From the Sector

• Sales of CHF 1 510.9 million,
• Order intake of CHF 1 157.3 million in 2022; order backlog of around CHF 1 540 million as of December 31, 2022
• EBIT margin of 2.1%
• Implementation of action plan to increase profitability ongoing
• Dividend of CHF 1.50 per share proposed

With record sales of CHF 1 510.9 million, Rieter achieved an increase of 56% compared with the previous year (2021: CHF 969.2 million). In the second half of 2022, especially in the fourth quarter, the measures introduced to address material bottlenecks had a positive impact. Consequently, sales increased to CHF 890.3 million compared with the first six months (first half-year 2022: CHF 620.6 million).

Order intake was CHF 1 157.3 million in 2022 (2021: CHF 2 225.7 million) and thus remained at a high level thanks to the company’s technological lead and broad international presence. The market situation, especially in the second half of 2022, was characterized by investment restraint and below-average capacity utilization at spinning mills due to geopolitical uncertainties, rising financing costs, and consumer reticence in important markets.
The company had an order backlog of around CHF 1 540 million at the end of 2022, which thus extends into 2023 and 2024.

The profit at the EBIT level in the 2022 financial year was CHF 32.2 million (2021: CHF 47.6 million). The result was strongly influenced by substantial cost increases, which could only be offset in part through price increases or other remedial measures. In addition, to compensate for material shortages, expenses were incurred in connection with the development of alternative solutions, and in relation to the acquired businesses.

Completion of the Acquisition
Rieter consolidated the acquired automatic winding machine business with effect from April 1, 2022. This acquisition completes Rieter’s system offering in the largest market segment of ring and compact spinning, thus significantly strengthening the company’s market position.

Action Plan to Increase Profitability
Implementation of the action plan to increase profitability is ongoing. With regard to the margins for the order backlog, which remains high, the already implemented price increases in combination with a positive trend in costs, particularly in logistics, are having a favorable impact. In addition, progress was made in eliminating material bottlenecks and reducing expenses for the three acquired businesses.

Dividend
The Board of Directors proposes to the shareholders the distribution of a dividend of CHF 1.50 per share for 2022. This corresponds to a payout ratio of 56%.

Outlook
For the coming months, Rieter expects below-average demand for new equipment at first, with a revival expected in the second half of 2023 after ITMA, the leading trade fair in Milan (Italy). Rieter also believes that demand for consumables, wear & tear and spare parts will recover during 2023.
For the 2023 financial year, due to the high order backlog, Rieter anticipates sales in the order of magnitude of the previous year.
The realization of sales from the order backlog continues to be associated with risks in connection with the ongoing geopolitical uncertainties, rising financing costs, continuing bottlenecks in the supply chains, and possible, currently unforeseeable consequences of the earthquake in Türkiye in February 2023. Despite the price increases already implemented, further global cost increases continue to pose a risk to the growth of profitability. Rieter will specify the outlook in the 2023 semi-annual report.

100 days before ITMA 2023 in Milan, VDMA Textile Machinery launched its “Way2ITMA” webinar series. “Transforming the World of Textiles: efficient – digital – circular”. Under this heading, VDMA technology providers will present their solutions along the value chain.

Speakers of the virtual event were Dr. Janpeter Horn, Chairman of the VDMA Textile Machinery Association and Managing Director of August Herzog Maschinenfabrik, Dirk Vantyghem, Director General, EURATEX, Francis Elias Junker, Area Sales Manager, Andritz Laroche and Tanja Karila, Chief Marketing Officer, Infinited Fiber Company.

With regard to the EU strategy for sustainable and circular textiles, Dr. Horn said: “This topic concerns all of us, consumers and producers. We as machinery builders position ourselves as enablers. We want to be part of the solution of this ambitious project”.

Dirk Vantyghem introduced the core issues of the EU textile strategy launched in 2022, which is the most ambitious plan ever, to push the textile sector towards sustainability and transparency, and promote a new circular business model. If wrongly designed, that new framework may collapse the European textile value chain. But if done rightly, the changes ahead could bring a paradigm shift in the sector, where competitiveness is no longer based on price only, but also on sustainability and innovation, explained Vantyghem.

Francis Elias Junker showed high level of expertise for mechanical textile recycling for both spinning and nonwovens industries that Andritz has. The company has a diversity of solutions to offer and several cooperation partners, covering the value chain from recovery of fiber to the chemical modification and preparation for the production of yarn.

Tanja Karila gave an overview of how Infinited Fiber is turning textile waste into new fibers. Patented technology turns post-consumer textile waste into brand new premium quality fibers for the textile industry. The textile-to-textile recycling technology captures the value in waste that would otherwise be landfilled or burned.

• Sales of CHF 890.3 million in second half-year 2022
• EBIT margin of around 2% expected for full year 2022
• Order intake of CHF 1 157.3 million in 2022; order backlog of around CHF 1 540 million as of December 31, 2022
• Preparations for ITMA 2023 on schedule
• Implementation of action plan to increase sales and profitability ongoing
• Rieter site sales process on schedule

For Rieter, in addition to the geopolitical uncertainties, the 2022 financial year was characterized by three main challenges:
Due to the rapid rise in inflation, the exceptionally high order backlog of around CHF 1 840 million at the beginning of 2022 was processed at significantly higher costs. It was only possible to offset these higher costs in part by means of price increases and other remedial measures.

In order to safeguard deliveries, it was necessary to compensate for serious material bottlenecks, particularly in electronic components, which resulted in considerable additional development expenditure.

Major expenses were also incurred in connection with the acquired businesses (Accotex, Temco and Winder).

Sales
The realization of sales from the exceptionally high order backlog developed better than expected. With sales of CHF 1 510.9 million, Rieter achieved an increase of 56% compared with the previous year (2021: CHF 969.2 million). In the second half of 2022, especially in the fourth quarter, the measures introduced to address material bottlenecks had a positive impact. Consequently, sales increased to CHF 890.3 million compared with the first six months (first half-year 2022: CHF 620.6 million).

EBIT margin
The trend in the EBIT margin was strongly influenced by substantial cost increases, which could only be offset in part through price increases and other remedial measures. In addition, to compensate for material shortages, expenses were incurred in connection with the development of alternative solutions and the acquired businesses.

Rieter succeeded in improving profitability compared with the first half of 2022 due to the higher sales volume and offsetting measures to compensate for increased costs, and expects a positive EBIT margin of around 2% for the full year 2022 (2021: 4.9%).

Order intake
In line with expectations, the order intake of CHF 1 157.3 million in 2022 was below the record year of 2021 (CHF 2 225.7 million). The market situation is characterized by investment restraint due to geopolitical uncertainties, higher financing costs and consumer reticence in important markets.

Order backlog
The company had an order backlog of around CHF 1 540 million at the end of 2022, which thus extends well into 2023 and 2024. In 2022, Rieter recorded order cancellations of less than 10% of the order backlog of CHF 1 840 million at the beginning of the year.

Preparations for ITMA 2023 on schedule
Rieter has continued to boost its innovative capability and, in order to further extend its technology leadership, will present new innovative solutions at ITMA 2023 in Milan.

Action plan to increase sales and profitability
Implementation of the action plan to increase sales and profitability is ongoing. With regard to the profitability of the order backlog, which remains high, the implemented price increases in combination with a favorable trend in costs, particularly in logistics, are having an impact. In addition, progress was made in eliminating material bottlenecks and reducing expenses for the three acquired businesses.

Rieter site sales process
The sales process for the remaining land at the Rieter site in Winterthur (Switzerland) is proceeding according to plan. In total, around 75 000 m² of land will be sold. The Rieter CAMPUS is not part of this transaction.

Results press conference 2023
Rieter will provide further details on the 2022 financial year and an outlook for the 2023 financial year on March 9, 2023.

adidas published its financial guidance for 2023. While the company continues to review future options for the utilization of its Yeezy inventory, this guidance already accounts for the significant adverse impact from not selling the existing stock. This would lower revenues by around € 1.2 billion and operating profit by around € 500 million this year. Against this background, adidas expects currency-neutral sales to decline at a high-single-digit rate in 2023. The company’s underlying operating profit is projected to be around the break-even level.

Should the company irrevocably decide not to repurpose any of the existing Yeezy product going forward, this would result in the write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional € 500 million this year. In addition, adidas expects one-off costs of up to € 200 million in 2023. These costs are part of a strategic review the company is currently conducting aimed at reigniting profitable growth as of 2024.

If all these effects were to materialize, the company would expect to report an operating loss of € 700 million in 2023.

In 2022, based on preliminary unaudited numbers, adidas revenues increased 1% in currencyneutral terms. In reported terms, sales were up 6% to € 22,511 million during the 12-months period (2021: € 21,234 million). The company’s gross margin reached a level of 47.3% (2021: 50.7%) in 2022. adidas generated an operating profit of € 669 million last year (2021: € 1,986 million), reflecting an operating margin of 3.0% (2021: 9.4%). Net income from continuing operations was € 254 million in 2022 (2021: € 1,492 million).

With China easing its pandemic restrictions, foreign exhibitors and buyers can look forward to quarantine-free travel when participating at this year’s industry showcase in Shanghai. The technical textile and nonwovens fair is scheduled to take place from 19 – 21 September 2023 at the Shanghai New International Expo Centre, amid positive market forecasts for both sectors. The organisers are anticipating a strong showing and the conclusion of an inconsistent period for in-person textile business.

“The industry has demonstrated incredible patience and resilience over the course of the pandemic,” said Ms Wilmet Shea, General Manager of Messe Frankfurt (HK) Ltd. “With both markets growing and China opening its borders, we are excited at the prospect of providing participants with an international, business-friendly platform and expect to welcome a healthy number of exhibitors later this year.”

The global technical textile and nonwovens markets are both set to perform strongly over the next few years. According to Grand View Research, the technical textile market is forecast to expand at a CAGR of 4.7% from 2022 to 2030^[1]. The nonwoven fabrics market is anticipated to display an even stronger CAGR of 5.6% during the same period^[2], with Asia-Pacific to maintain its position as the biggest regional market.

As one of Asia’s leading trade fairs for the abovementioned sectors, Cinte Techtextil China is the preferred platform for multiple industry players. Speaking at the previous edition in 2021, Mr Seven Shen, Sales Manager at Libero Trading (Shanghai) Co Ltd, China, said: “We have been exhibiting at this fair for years, and know we will meet our target customers at every edition. The buyers here are all highly specialised.”

During his interview at the same edition, Mr Eric Ni, Senior Manager, China Supply Chain Marketing for Cotton Council International, USA, commented: “We hope to use this platform to meet more companies and brands in the nonwovens industry who are interested in US cotton, and to meet up with old friends to discuss the current situation and industry trends. The fair’s buyers are quality, and we have found some new potential clients at this edition.”

Many buyers at the previous edition also gave positive appraisals. “As a professional trade fair for technical textile and nonwoven products, Cinte Techtextil China is not only a platform to gather qualified industry players, but also the best place to showcase new products and innovations,” said Mr Lin Bin, Technical Director at Zhejiang Xinna Medical Device Technology Co Ltd, China. “Specific and high quality products enhance sourcing efficiency for buyers, and exposure to new trends and market developments ensures my company visits here regularly.”

The fair’s product categories cover 12 application areas, which comprehensively span a full range of potential uses in modern technical textiles and nonwovens. These categories also cover the entire industry, from upstream technology and raw materials providers to finished fabrics, chemicals and other solutions. This scope of product groups and application areas ensures that the fair is an effective business platform for the entire industry.

^[1] “Technical Textile Market Size, Share & Trends Analysis Report 2022-2030”, 2022, Grand View Research, https://bit.ly/3IAxQIK, (Retrieved: January 2023)
^[2] “Nonwoven Fabrics Market Size”, 7 September 2022, GlobeNewswire, https://bit.ly/3CxPE3u, (Retrieved: January 2023)

• Style3D is sole shareholder of Assyst
• Integration of both product lines from 3D design to production
• Assyst remains independent within Style3D

Assyst GmbH is as of now part of Style3D. The German fashion technology market leader and the leading 3D software company are joining forces. For Assyst customers and partners nothing will change.
 
Die Assyst GmbH betreibt ihre Geschäfte weiterhin eigenständig, entwickelt alle ihre Produkte weiter und strebt mit Style3D eine gemeinsame, durchgängige Produktwelt an. Der erste gemeinsame Auftritt des Assyst-Style3D-Teams findet bereits auf der Assyst Experience im Rahmen der Munich Fabric Start (24.-26. Januar 2023) statt.

Assyst will continue to operate its business independently and to develop, sell, and service all its existing products. Style3D and Assyst will start to integrate their products into a universal, seamless product world. The Assyst-Style3D team will make its first joint appearance already at the end of January at the Assyst Experience at Munich Fabric Start (24-26 January 2023).

Both companies are deeply rooted in apparel development and production: Style3D in Asia and Assyst in EMEA. Together, they are planning to create a global product offering for producers and brands that covers the entire apparel value chain from development to production and the various sales touchpoints.

Starting point will be the integration of the flagship products of both companies – Style3D and Assyst.CAD. Style3D is currently the most advanced 3D fashion design software with a high growth rate globally. While Assyst is market leader with its 2D CAD technology in Germany, Austria, Italy and Switzerland and offers a seamless software portfolio from 2D and 3D CAD to production (Automarker) and to all sales touchpoints.

Major driver of the merger is the companies’ complimentary technology offering and the vision to create a seamless digital process from providing digital fabric and accessories up to the realization of products.

The merger also strengthens Assyst's competitive position in the 3D design sector. Style3D, in turn, will benefit from Assyst's expertise in the development, CAD and digital simulation of apparel products and the access to the international market.

Looking ahead to the future, both parties will offer 2D-based & 3D-based one-stop solutions for business clients leveraging on their global tech base and complementary serviceable resource dominance. On January 24-26, the Assyst-Style3D team will meet clients and present its products at the Assyst Experience at Munich Fabric Start.

Fibre Extrusion Technology Limited (FET) of Leeds, England, a supplier of laboratory and pilot melt spinning systems, is celebrating a record breaking year of sales and product innovation. “Sales revenue for 2022 has easily beaten our previous high” said FET Managing Director, Richard Slack “and the research projects we have collaborated in have become increasingly challenging in terms of technical specification.”

Prestigious new projects during 2022 included a multifilament melt spinning line for Senbis Polymer Innovations, Netherlands enabling the development of textile fibres from recycled polymers or biopolymers; a FET-200LAB wet spinning system at the University of Manchester which will play a major part in advanced materials research in collaboration with the renowned Henry Royce Institute; and a FET-103 Monofilament line for RHEON LABS of London to help develop a hyper viscoelastic fibre from RHEON™ which displays high strain-rate sensitive properties. The latter two of these examples were aided by significant UK grants to develop advanced materials.

FET is now looking forward to 2023 with a record order book. The company’s newly opened Fibre Development Centre features over £1.5 million investment in customer laboratory systems that will further enable fibre trials and product R&D. Three new polymer types were developed with clients in 2022 and several more are lined up in 2023, which is expected to bring the total of different polymer types to more than 40 in multifilament, monofilament and nonwoven formats.

FET will be exhibiting at two major exhibitions in 2023; INDEX 23, a leading Nonwovens show at Geneva in April; and ITMA, Milan, an international textile and garment technology exhibition in June.

The international fashion sourcing platform Source Fashion, taking place from 12th – 14th February at Olympia London, has announced a compelling line-up of country pavilions and over 150 audited, quality manufacturers from around the world including Peru, India, China, Pakistan, Italy, Spain, Greece, North Macedonia,  the UAE, Madagascar, Jordan, Uzbekistan, Turkey, the UK and many more who will join the inaugural show, which runs parallel to Pure London.

Bringing a textile pavilion to the UK for the first time, the Peru Pavilion will showcase six manufacturers specialising in high-quality alpaca wool from the raw material right through to garment production, as well as cotton and other natural mixtures.

The main Indian Pavilion at this year’s Source Fashion, in collaboration with the Wool and Woollens Export Promotion Council, will showcase 20 established garment and textile exporters specialising in wool, woollen and acrylic fibres. The exhibitors will be showing full garments including men’s, women’s and kidswear as well as a selection of fabrics and raw materials. These exhibitors are regular export partners to the UK retail industry and already work with some big retailers in white label production.

The China Pavilion will present a selection of high-quality Chinese manufacturers ranging from full garment manufacturing through to raw materials, fabrics, cashmere and components.

Other producers and manufacturers attending Source Fashion from across Europe and the UK include:

• Mivania - an Italian knitwear manufacturer producing garments in 100% cashmere and cashmere blends.
• SATCoL (Salvation Army Trading Company) - a charity-owned textiles collector in the UK, actively working with retailers to reduce their carbon footprints.
• Kusilas - a Spanish company monitoring all the stages of the production process.
• Prime Casual - based in Leicester, UK, they specialise in the design and manufacture of ladies clothing from fast fashion, wholesale to bespoke tailoring.
• Athos Pallas - a fashion and textile agency located in Thessaloniki, Greece.

Yalin Xu has been appointed Managing Director and President of DyStar Group by the Board of Directors. He will be directly responsible for the management and operations of DyStar Group. Mr Xu first joined DyStar in 2010 and has since been the Executive Board Director.
 
Eric Hopmann has been redesignated as CCO (Chief Commercial Officer), with a focus on Sales and Marketing of DyStar Group. He will continue to report to Yalin Xu. Mr Hopmann was with DyStar when the company started in 1995 and has been leading various leadership positions at DyStar Group, including the most recent CEO role, to which he was appointed in 2014.
 
DyStar’s leadership change is in response to the rapid global market changes, and to enable the group to accelerate growth and drive productivity. The group wants to streamline their operations and better utilise resources efficiently across the network.

January, 6 Autoneum signed an agreement to acquire the automotive business of Borgers. The transaction is expected to close in April 2023 following antitrust clearance. The enterprise value paid amounts to EUR 117 million.

Borgers specializes in textile acoustics protection, insulation and trim for automobiles. The product and customer range of Borgers is to a great extent complementary to the product and customer portfolio of Autoneum. Borgers’ wheel arch liner and trunk liner product lines as well as their truck business optimally complement the product range of Autoneum. Especially in the field of textile wheel arch liners, Borgers is the market leader in Europe. In addition, Borgers’ product range is distinguished by sustainable and fully recyclable products. In fiscal year 2021, the Borgers Automo-tive Group generated revenue of EUR 610 million with around 4 700 employees. Thanks to Autoneum’s global presence, the Borgers product portfolio adds to the sales potential for profitable growth in the medium term outside Europe.

Autoneum is acquiring Borgers from insolvency and has agreed new pricing and delivery terms with its customers. These will ensure sustained profitability and the further development of product and process technologies in both the short and long term.

The transaction will initially be financed through a new credit facility which is available in addition to the syndicated loan of CHF 350 million renewed in October 2022. A capital increase in the amount of approximately CHF 100 million is planned for the long-term refinancing of the acquisition. Autoneum’s two largest shareholders, Artemis Beteiligungen I AG and PCS Holding AG, have agreed to participate in the capital increase in proportion to their current shareholdings. Even taking into account the aforementioned capital increase, the transaction will generate a positive earn-ings per share contribution from the outset.