From the Sector

In the fourth quarter of 2023 Italian textile machinery orders index, drawn up by the Economics Department of ACIMIT, the Association of Italian Textile Machinery Manufacturers, appears to be stationary compared to data recorded for the same period in 2022. In terms of absolute value, the index stood at 82.4 points (basis: 2015=100).

This is the result of an upswing in orders from foreign markets, counterbalanced by declining orders on the domestic front. While orders in Italy decreased at 18% rate, a 4% increase was observed abroad. The absolute value of the index on foreign markets amounted to 77.9 points, whereas it came in at 126.2 points domestically. Overall for the fourth quarter, the average order backlog yielded 3.7 months of assured production.

For the whole 2023 year, the index declined 25% overall compared to the 2022 average (absolute index of 82.4). On the home front however, the index dropped 24% (absolute index of 124.5), while slipping 25% abroad (absolute index of 78.4).

ACIMIT president Marco Salvadè commented the data: “The orders index for October – December 2023, as elaborated by our Economics Department, confirms an intake of orders that is still weak, with a negative trend in demand for machinery that is ongoing for the domestic market.” Nonetheless, the orders index abroad shows a slight increase. “We estimate that the global geopolitical context is still a source of concern,” continued Salvadè, specifying that, “For the first nine months of 2023, Italian exports on major global markets (i.e. China, Turkey, India and the United States of America), confirm a widespread decline. However, some positive signs emerged in the fourth quarter of last year, as reflected by the latest orders index. For 2024 we expect a consolidation of this trend reversal.”

Nearly 8,000 international visitors came to meet the 1,300 exhibitors at Texworld Apparel Sourcing Paris. This year's event was enhanced by a boldly designed showcase in the heart of Paris.
The offer was broader, more diversified and more accessible. Despite increasing requirements in the industry, visitor numbers remained stable. It was on these two objective notes that the latest edition of the Texworld and Apparel Sourcing Paris trade shows for the fashion industry came to a close, held from 5 to 7 February 2024 at the Paris Expo Porte de Versailles. During these 3 days, nearly 8,000 visitors came to meet 1,300 weaving and clothing companies from 25 countries on the two levels of Hall 7 (7.2 and 7.3).

Visitors: a Euro-Mediterranean Top 5
This unprecedented concentration of international companies in Europe, which exceeds in number that of February 2019, is a reminder of the central role of European markets for the global fashion industry. This position is confirmed by the weight of buyers from the Euromed zone in the visitor structure: Top 5 is concentrated around buyers from France (20% of the total, up sharply on 2023), the UK (8.3%), Italy (7.9%), Turkey (7.2%) and Spain (6.8%). This Parisian event is proving to be an essential point of contact between designers, buyers and suppliers of fabrics or finished products.

Making the offer ever more accessible “Despite the slowdown in the clothing market, Europe remains a major market for textile and finished goods manufacturers" explains Frédéric Bougeard, President of Messe Frankfurt France. “For some players, it is becoming a strategic market to offset the uncertainties weighing on the Russian and American markets" he continues. Our mission is to fulfill our role as a market place, to adapt to these changes and to make the international offer more and more accessible." The February event also highlighted near sourcing. Nine Ukrainian companies grouped together under the banner of the Ukrainian Association of Textile and Leather Industry Companies (Ukrlegprom), as well as Bulgarian, Italian and Dutch companies, were able to take advantage of the show's visibility to include their expertise in the sourcing plans of French and European buyers.

Texworld Apparel Sourcing Paris, a new name for our trade fairs
Reflecting the adaptation of Messe Frankfurt France's strategy to changes in the market, Texworld Evolution Paris is changing its name to Texworld Apparel Sourcing Paris. This move reflects developments in fashion sourcing and the expansion of brand universes. A growing number of buyers now want to be able to select materials, while also sourcing finished products directly to complement collections or expand their range. The new name is accompanied by a new dual baseline - Weaving the future; sourcing I business I solutions - to underline these developments and reinforce the fairs' service-led positioning.

From 1 to 3 July 2024 at Porte de Versailles
This new signature will be fully expressed at the next edition of Texworld Apparel Sourcing Paris, including Avantex and Leatherworld, which will take place from 1 to 3 July 2024 in Hall 7 (7.2 and 7.3) of the Paris Expo Porte de Versailles. The show, which will remain the same size and offer a more selective range of products, will reflect this convergence between textiles and finished products. This session will also have no interaction with the Paris 2024 Olympic Games, which are due to open on 26 July, three weeks after Texworld Apparel Sourcing Paris

Tajima Software Solutions and Coloreel launch a software for the personalization of embroidery designs. Designed to cater to both in-store and online shopping experiences, the new software Pulse ID allows users to customize their embroidery. It offers the flexibility to edit text, add effects, and colors.

This collaboration marks a full integration of the Coloreel technology with Pulse ID and Tajima's embroidery machines. The result is a seamless and efficient solution, ideal for in-store embroidery services or for enhancing the offerings of online shops.

• Revenues: 477.6 million euros (-6%)
• EBITDA before non-recurring items: 79.0 million euros (-15%)
• Net income: 32.6 million euros (-26%)
• Free cash flow before non-recurring items: 45.3 million euros
• Dividend: €0.36 per share

Lectra’s Board of Directors, chaired by Daniel Harari, reviewed the consolidated financial statements for the fiscal year 2023. Audit procedures have been performed by the Statutory Auditors.

Currency changes between 2022 and 2023 mechanically decreased revenues and EBITDA before non-recurring items by 3.9 million euros (-3%) and 1.7 million euros (-8%) respectively in Q4, and by 11.2 million euros (-2%) and 4.8 million euros (-6%) respectively in the year, at actual exchange rates compared to like-for-like figures.

OUTLOOK
While the 2023 full-year results were affected by the adverse environment, they also attest to the substantial improvement in the fundamentals of the Group's business model, which will have a positive impact on 2024 results. Persistent macroeconomic and geopolitical uncertainties could nevertheless continue to weigh on investment decisions by the Group's customers.

While the most recent indicators seem to suggest that the situation is unlikely to deteriorate further, the timing and magnitude of a rebound in new system orders remain uncertain.

Outlook for 2024
To facilitate analysis, the accounts of Lectra excluding the Launchmetrics acquisition ("Lectra 2023 Scope") will be analysed separately from the Launchmetrics accounts in 2024.

The Group has based its 2024 objectives on the exchange rates in effect on December 29, 2023, in particular $1.10/€1. When converting 2023 results using the exchange rates retained for 2024, 2023 revenues are mechanically reduced by 4.7 million euros (to 472.9 million euros) and 2023 EBITDA before non-recurring items is reduced by 2.2 million euros (to 76.8 million euros). Thus, for the Lectra 2023 Scope, the comparisons between 2024 and 2023 printed below are based on constant exchange rates.

At this early stage of 2024, continuing low visibility regarding orders and revenues from new systems makes it impossible to predict the actual timing and scale of the future rebound in this area. On the other hand, visibility is high for recurring revenues, which accounted for 68% of total revenues in 2023 and will continue to grow in 2024.

In light of the above, Lectra has set as its objective for 2024, for the Lectra 2023 Scope, to achieve revenues in the range of 480 to 530 million euros (+2% to +12%) and EBITDA before non-recurring items in the range of 85 to 107 million euros (+10% to +40%).

The low end of the revenues range is based on the absence of a rebound in new systems orders, which would remain stable in 2024 relative to 2023, with a 6% decline in revenues from perpetual software licenses, equipment and accompanying software and non-recurring services, as the order backlog was lower on December 31, 2023 than a year before.

The high end of the revenues range reflects a gradual rebound in new systems orders, which at year-end 2024 would be back to year-end 2022 level.
 
In addition, Launchmetrics revenues (for the consolidation period from January 23 to December 31) are projected to be in the range of 42 to 46 million euros, with an EBITDA margin before non-recurring items of more than 15% (assuming an exchange rate of $1.10/€1).

In the fourth quarter of 2023 Italian textile machinery orders index, drawn up by the Economics Department of ACIMIT, the Association of Italian Textile Machinery Manufacturers, appears to be stationary compared to data recorded for the same period in 2022. In terms of absolute value, the index stood at 82.4 points (basis: 2015=100).

This is the result of an upswing in orders from foreign markets, counterbalanced by declining orders on the domestic front. While orders in Italy decreased at 18% rate, a 4% increase was observed abroad. The absolute value of the index on foreign markets amounted to 77.9 points, whereas it came in at 126.2 points domestically. Overall for the fourth quarter, the average order backlog yielded 3.7 months of assured production.

For the whole 2023 year, the index declined 25% overall compared to the 2022 average (absolute index of 82.4). On the home front however, the index dropped 24% (absolute index of 124.5), while slipping 25% abroad (absolute index of 78.4).
 
ACIMIT president Marco Salvadè commented: "The orders index for October – December 2023, as elaborated by our Economics Department, confirms an intake of orders that is still weak, with a negative trend in demand for machinery that is ongoing for the domestic market."

Nonetheless, the orders index abroad shows a slight increase. We estimate that the global geopolitical context is still a source of concern,” continued Salvadè, specifying that, “For the first nine months of 2023, Italian exports on major global markets (i.e. China, Turkey, India and the United States of America), confirm a widespread decline. However, some positive signs emerged in the fourth quarter of last year, as reflected by the latest orders index. For 2024 we expect a consolidation of this trend reversal."

Messe Frankfurt will extend its footprint in the Central Asian market by establishing seven brand events in Tashkent, Uzbekistan. The country’s strategic location as a crossroads of Europe and Asia positions it as a promising trade gateway and transportation hub, facilitating the economic development of neighbouring countries and access to the wider region. The company’s stronger presence in the market will promote business opportunities and foster the sustainable development of pillar industries, including cosmetics, textiles and clothing, automotive, logistics and transportation.

Uzbekistan has a promising consumer market with significant potential. It is the largest in Central Asia and is expected to increase due to population growth, rising incomes and the modernisation of economic and industry sectors.
 
The nation has actively sought to diversify its economy in recent years, undertaking reforms for greater entrepreneurial freedom and opening up to more international and regional cooperation. The country already exports precious metals, textiles and agricultural produce. It imports machinery, equipment, means of transportation, and vehicle components from foreign trading partners. Attracting overseas investment is also apparent through incentives such as tax benefits, reduced import duties and simplified procedures for overseas investors.
 
In addition, shifting global supply chains and trading patterns could also drive opportunities in the region. The nation benefits from its geographical location owing to its position between Asia and Europe, to which the Uzbek Government recognises the prospects of investing in infrastructure, such as transportation and logistics, to create an efficient transit hub. Against this backdrop, China acknowledges the importance of developing routes along the Belt and Road while Europe has expressed a readiness to support Uzbekistan’s efforts to diversify transport corridors.

Line-up of shows include:

• Automechanika Tashkent; Futuroad Expo Tashkent; and, Scalex Tashkent: 23 – 25 October 2024
• Heimtextil Uzbekistan; Texworld Tashkent; and, Apparel Sourcing Tashkent: 6 – 8 November 2024
• Beautyworld Central Asia: 21 – 23 November 2024

The Lenzing Group has updated its climate targets to align with the goals of the Paris Agreement to limit the human-induced global temperature increase to 1.5 degrees Celsius. The Science Based Targets Initiative (SBTi) has reviewed and confirmed this target improvement.

By 2030, Lenzing aims to reduce its direct emissions from the production of its fiber and pulp plants (scope 1) and its emissions from purchased energy (scope 2) by 42 percent and its indirect emissions along the value chain (scope 3) by 25 percent on the way to net zero, from 2021 baseline. This corresponds to an absolute reduction of 1,100,000 tons (instead of the previously targeted 700,000 tons).

The following targets were recognized and confirmed by the SBTi:

1. Overall net-zero target: Lenzing AG commits to reach net-zero greenhouse gas emissions along the entire value chain by 2050.
2. Near-term targets: Lenzing AG commits to reduce absolute scope 1 and scope 2 greenhouse gas emissions by 42 percent by 2030 from a base year 2021. Lenzing AG also commits to reduce absolute scope 3 greenhouse gas emissions from purchased goods and services, fuels and energy-related activities as well as upstream transport and distribution by 25 percent within the same timeframe.
3. Long-term targets: Lenzing AG commits to reduce absolute scope 1 and scope 2 greenhouse gas emissions by 90 percent by 2050 from a base year 2021. Lenzing AG also commits to reduce absolute scope 3 greenhouse gas emissions by 90 percent within in the same timeframe.

These updated targets replace the old SBTi approved Lenzing Group’s climate target in 2019.

Haelixa, the trailblazer of physical traceability solutions, has partnered with Trudel Silk, a market leader for sustainable organic and recycled silk products. This collaboration brings traceability and transparency to silk production.

Silk is one of the finest and smoothest fabrics; the better the quality of the silk, the more luxurious it feels to the touch. To create the best quality silk, the conditions for mulberry cultivation must be up to the highest standards. A healthy micro-ecosystem in the fields translates to top-grade silk cocoon quality. At Trudel, this is the environment they have created for the vertical integration of their business. Trudel aims to succeed at every stage of the process, which can only be accomplished through the active involvement and visible cooperation of all market players. These players include farmers, reeling mills, twisting/spinning mills, weaving mills, dyeing and printing mills, and brands. They are involved in every step, from the cultivation of mulberry trees to the production of silk fabrics.

Haelixa and Trudel have collaborated to improve silk’s robust and consistent traceability. As the demand for validation of the silk value chain increases, they have partnered with groups from Italy and Asia to develop a unique solution that uses DNA markers to trace the entire supply chain of silk production. This innovative approach ensures each silk product’s ethical sourcing.

The silk fibers used in their spun silk yarns are marked with a specific DNA per farm set selected by Trudel. Throughout the supply chain, samples of yarn, fabrics, and finished products undergo testing to verify the presence of original silk fibers. Based on the reporting, the brand can trace the finished accessories or garments to Trudel.

INDA announces Sustainability as a primary focus for 2024. This strategic initiative, backed by resounding support from INDA’s leadership, is a direct response to feedback from association members affirming that sustainability remains one of the nonwovens industry’s highest priorities.

INDA’s sustainability endeavor will center around three core pillars crucial to the industry’s future: Responsible Sourcing, End-of-Life Solutions, and Innovations in Sustainability. This multifaceted initiative will introduce a spectrum of new and enhanced offerings, including:

• Webinars addressing sustainability issues impacting members and the industry.
• Specialized technical and government affairs committees enabling members to collaborate on sustainability opportunities and challenges.
• The inaugural release of a comprehensive sustainability report from INDA’s Market Intelligence department.
• A dedicated sustainability special edition of the International Fiber Journal, produced by INDA Media.
• Sustainability programming at INDA events, including a dedicated focus at the IDEA® 2025 conference.

Archroma introduced Super Systems+. These end-to-end systems combine fiber-specific processing solutions and intelligent effects to help textile and apparel brands, retailers and mills positively impact their economic and environmental sustainability.

Archroma’s Super Systems+ suite encompass wet processing solutions that deliver measurable environmental impact; durable colors and functional effects that add value and longevity to the end product; and technologies that eliminate harmful or regulated substances. It will allow brands and mills to achieve their desired level of sustainability through measurable resource savings and cleaner chemistries.

Products and technologies that are be used in Super Systems+ solutions include: AVITERA® SE for resource savings, an improved cost-to-performance ratio for cotton and its blends and chlorine fastness; DIRESUL® EVOLUTION BLACK for shade and wash-down effects on black denim and an overall impact reduction of 57%*; aniline-free** DENISOL® PURE INDIGO 30 LIQ for authentic blue denim; ERIOPON® E3-SAVE all-in-one auxiliary for resource-intensive polyester dyeing that reduces processing time and conserves water and energy; and PHOBOTEX® NTR-50 LIQ for bio-based, PFAS-free, formaldehyde-free and crosslinker-free durable water repellence.

*As determined by Ecoterrae, a leading Spain-based sustainability consulting firm, through a Life Cycle Analysis (UNE-EN ISO 14044:2006) at the synthesis stage, using the ReCiPe 2016 Impact calculation methodology.
**Below limits of detection according to industry standard test methods.