From the Sector

The global automobile production has been recovering faster than expected since summer. If this positive trend continues through the full second half of the year, Group revenue in local currencies in the second semester is likely to be just around –5% below the level of the prior year period. For the full year 2020 it is anticipated that revenue in local currencies will decline by around –20% compared to 2019.

Based on this development of revenue, the extensive cost reduction measures taken in response to the COVID-19 crisis and the on-schedule progress of the turnaround in North America, an EBIT margin of 4-5% is expected for the second half of the year and a slightly positive EBIT margin for 2020 as a whole. Supported by the strict management of working capital and investments, the free cash flow is likely to be in the higher double-digit million range, which should enable a slight reduction in debt.

The outlook for 2021 and especially the first half-year remains uncertain and depends strongly on how the pandemic will develop. According to forecasts, global vehicle production in 2021 will still not reach the level of 2019.

• Significant recovery in order intake in third quarter 2020
• Order intake of CHF 425.1 million after nine months
• COVID crisis management in place
• Continuous implementation of the strategy
• Outlook 2020

The market recovery, which Rieter reported in June 2020, has continued. This is reflected in capacity utilization at spinning mills worldwide, which Rieter monitors. In April 2020, the proportion of producing spinning mills was around 40% while at the end of September 2020 this was around 90%. Against this backdrop, the Rieter Group increased order intake in the third quarter of 2020 to CHF 174.4 million (2nd quarter 2020: CHF 45.7 million). In the first nine months of 2020, the Rieter Group achieved a cumulative order intake of CHF 425.1 million (2019: CHF 524.5 million). Compared to the previous year period, this represents a decline of 19%.

Order Intake by Business Group

Due to the positive development in the third quarter of 2020, order intake at the Business Group Machines & Systems reached a total of CHF 234.5 million in the first nine months. The reason for the relatively small decline of 8% compared to the previous year is that the new machinery business was already characterized by investment restraint in the first three quarters of the year 2019. The Business Group Components recorded a reduction of 33% to CHF 116.6 million while the Business Group After Sales posted an order intake of CHF 74.0 million, a decrease of 23%. This illustrates the effects of low capacity utilization at the spinning mills, especially in the second quarter of 2020 as a result of the COVID-19 pandemic. The order backlog as of September 30, 2020, was around CHF 515 million (September 30, 2019: CHF 285 million). Cancellations were in the normal range of around 5%.

COVID Crisis Management in Place

Rieter has quickly implemented comprehensive COVID crisis management. Priority is being given to protecting employees, fulfilling customer commitments and ensuring liquidity. The necessary measures to protect employees have been implemented worldwide and the order backlog is being processed largely as planned. Rieter has introduced 40% short-time working in Switzerland and Germany for the second half of 2020. Similar measures were implemented worldwide within the scope of the available legal options. As of September 30, 2020, Rieter had liquid funds of CHF 216.7 million and unused credit lines in the mid three-digit million range in order to ensure liquidity. At the end of September 2020, net debt of CHF 1.2 million was disclosed.

Continuous Implementation of the Strategy

In recent years, Rieter has consistently implemented the strategy with the focus on innovation leadership, strengthening the business on the installed base and optimization of the costs. The company intends to forge ahead with the strategy in the coming months in order to strengthen the market position for the time after the COVID-19 pandemic. The Rieter CAMPUS is an important element of Rieter’s innovation strategy. Depending on the business situation, construction work is due to begin in the first half of 2021.

Outlook 2020

As already announced, in terms of sales and profitability Rieter expects a stronger second half of the year compared to the first half of 2020. Nevertheless, due to the deferral of deliveries by customers, Rieter will also conclude the second half of the year − and thus the full year 2020 − with a net loss. Due to the existing uncertainties, it continues to be difficult to forecast sales and profitability for the second half of 2020. For this reason, Rieter refrains from providing more specific information for the full year 2020.

Als erste Composites-Messe weltweit seit Beginn der Corona-Krise hat die China Composites in Shanghai (2. bis 4. September 2020) ihre Tätigkeit wieder aufgenommen. Die Messe verzeichnete ca. 600 Aussteller und über 20 000, größtenteils chinesische Besucher.

Unter der Leitung ihres Präsidenten Daniel He stellte die chinesische Reach Group vor Ort einige europäische Unternehmen und deren jüngste Entwicklungen aus der Kooperation mit Dr. Michael Effing´s AMAC vor, darunter Airborne (NL), Textechno (D) und Conbility (D).

Daniel He zur aktuellen Lage: "Der chinesische Markt zieht wieder an; am 25. August 2020, unmittelbar vor der China Composites Show, wurde eine Preiserhöhung von 7% für Glasfasern angekündigt, die eine vorübergehende Materialknappheit ausgelöst hat. Derzeit wachsen in China vor allem die Märkte Windenergie, Bauwesen und Infrastruktur sowie Innovationen für Elektroautos. Im Gegensatz zum Rest der Welt, wo die Flugzeugindustrie besonders unter der Krise leidet und einen starken Rückgang erfährt, wächst sie in China aktuell um etwa 50 % mit der Einführung der neuen chinesischen Flugzeugtypen C919 und CR 929, was wirklich sehr vielversprechend ist. Das Wirtschaftswachstum in China dürfte für 2020 trotz allem etwa zwischen 2 und 4 % liegen. Darüber hinaus erwarten wir im Laufe des nächsten halben Jahres eine vollständige Erholung der Composites Branche.“

Michael Effing erklärt: "Das Composites-Geschäft zwischen China und Europa weiter auszubauen ist das Ziel unserer Zusammenarbeit mit Reach und mit unseren Kunden, die in den Bereichen digitale Automatisierung, Spezialmaschinen sowie Prüfgeräte oder Software zur Kostenoptimierung tätig sind. Wir sind sehr froh, durch unseren Vertreter Reach in China präsent gewesen sein zu können. Wir freuen uns darauf, die Corona-Krise mit unserer bevorstehenden Veranstaltung Composites for Europe in Stuttgart am vom 10. bis 12. November zu überbrücken und hoffen, 2021 auf der JEC in Paris wieder in vollem globalen Geschäft zurück zu sein“.

Asia’s leading trade platform for the home and contract textile industry, Intertextile Shanghai Home Textiles, is ready to welcome over 600 exhibitors to China’s commercial hub from 24 – 26 August. As China’s economy continues its recovery, the upcoming fair will serve as a key platform for the industry to reconnect and prepare for the seasons ahead. Taking consideration of current international travel restrictions, Intertextile has launched a brand new online business matching platform, enabling participation for those who cannot travel to Shanghai.

Ms Wendy Wen, Senior General Manager of Messe Frankfurt (HK) Ltd commented: “2020 has been a difficult and unpredictable year for every business and industry across the world, so we are pleased to be providing a platform for the home textile industry to connect and recover from the coronavirus pandemic. Intertextile Shanghai Home Textiles is the first physical trade event for the sector held by Messe Frankfurt since January, so we hope that the fair assists the sector to join forces and overcome this challenging year together.”

Ms Wen continued: “Our first priority is to create a clean and hygienic space for all participants to source and network. To achieve this goal, the fair will implement extra health care and hygiene precautions onsite. On the other hand, we are aware that a number of travel restrictions are still in place across the world. With this in mind, Intertextile will offer a series of online services for those who are unable to travel to Shanghai, allowing the fair to reach as wide an audience as possible.”

2020 fair highlights

To provide buyers with greater efficiency, the fair, which covers four halls, will be divided clearly by product categories: Household Hall (hall 3), International Brands / Upholstery Hall (hall 4.1), Brand Fabrics Hall (hall 5.1) and Sofa Fabrics Hall (hall 6.1).

In addition, the Contract Business 360° concept will return this year, with over 40 premier upholstery exhibitors presenting their latest textile products and furnishing solutions for contract use. Exhibitors include Guangzhou Yuanzhicheng Home Textile, Haining Julai Textile, JAB, Morgan Shanghai, Symphony Mills, Suzhou Roufang, Ter Molst International, Zhejiang Hexin and Zhejiang Maya Fabric. Furthermore, top brands such as Agmamito from Poland and Wollsdorf Leather from Austria will be exhibiting for the first time at Intertextile.

Online business matching platform offers new sourcing landscape

Although face-to-face interaction is irreplaceable, a virtual complement has become more important as a result of the worldwide pandemic. To support the industry during these unprecedented times, Intertextile has launched a brand new online business matching platform. With this free service, participants are able to source and network at their fingertips. The virtual platform will offer many new features including:

• Easy sourcing: exhibitors are categorised by product groups including Sofa / Decorative Fabrics, Curtains and Accessories, Bedding and Finished products, Shading and Accessories, and Editors
• Live-streamed product presentations of exhibitors
• Smart recommendations: pre-selected exhibitor lists will be provided to buyers based on their personal preferences and interests
• Convenience: participants are able to use the service through computers or portable devices without the need to download any software

High quality fringe programme covers comprehensive topics
 
The fair’s event programme will once again provide the industry with the latest trends and insights in four topics: Design Inspiration, Business O2O, Textile & Technology and Industry Empowerment. One of the highlights will be the 2021 Intertextile Trend Forum, led by Shen Lei, the Chinese representative of the Intertextile International Lifestyle Trend Committee. The forum will bring together five prominent Chinese designers including Ben Chen, Ben Wu, Meng Ye, Paul Pang and Xie Ke, who will delve into the theme of 2021 Intertextile Trends–“BOUND”, as well as the Chinese market conditions. The event will be held on day 1 of the fair, from 14:00 – 17:00 in hall 5.1 booth C18, and streamed live online.

Another not-to-be-missed event is the Ride the Storm – Home Textile Digital Printing Forum, which will include an array of educating seminars that cover the latest digital textile printing trends and technologies. The forum will be held on day 2 of the fair, from 13:20 – 17:20 in hall 3, booth M12.

Furthermore, joining forces with Tmall Global, the largest cross border B2C online retail platform in China, the fair will host a series of seminars delivering the solutions and strategies for industry digitalisation during the afternoon of day 1. In addition, the well-received Furniture & Home Textile Direct Negotiation Event will return to provide an excellent opportunity for furniture companies and fabric brands to collaborate.

Additional health care and hygiene precautions will be in place

As trade fair co-organisers, Messe Frankfurt’s number one priority always remains the health and safety of fairgoers. To maintain a clean and hygienic environment for visitors and exhibitors to meet in, extra measures will be in practice at the fair. These include: real-name registration, onsite temperature checks, frequent sterilisation of public areas and distancing measures for forum / seminar audiences, amongst others.

The previously communicated targets for 2020 are unlikely to be achieved due to the COVID-19 pandemic

The Board of Management of SGL Carbon SE determined today, that the forecasted results for the fiscal year 2020 are unlikely to be achieved due to the global COVID-19 pandemic. In light of the substantial uncertainty regarding the duration and the consequences of the COVID-19 pandemic, the Board of Management is currently unable to provide a reliable sales revenue and earnings forecast for the current year. Consequently, the guidance for 2020 is suspended. 

The previous expectation, which guided for a slightly lower sales revenue und a recurring EBIT1 approximately 10-15% below the prior year (sales revenue 2019: €1,087m; recurring EBIT 2019: €48m), was already made conditional by the Board of Management in the management report published on March 12, 2020, that negative effects from the coronavirus were not included, as the outbreak at that time was mainly restricted to China and Italy. In the meantime, numerous other governments have introduced far-reaching measures with substantial limitations on the public and economic sectors and leading economists now forecast significant reductions in economic output in key economies. 

The Board of Management of SGL Carbon has introduced and partially already implemented comprehensive measures to reduce the cost base and to secure liquidity. These measures include the introduction of short-time work, reduction of material and indirect spend, as well as further reduction resp. postponement of capital expenditures. In addition, we are exploring further financing options independent of the capital markets, some of which are already in preparation. The Company is intensively working on identifying and mitigating potential risks. 

• Bangladeshi supplier offers production capacity to produce face masks and PPE on non-profit basis
•  Reaching out to global agencies to build partnerships to help tackle COVID-19 crisis

A Bangladeshi garment manufacturer is offering the manufacturing capacity for the production of protective face masks and Personal Protective Equipment (PPE) on a non-profit basis to help tackle the COVID-19 global pandemic.
Many hospitals in Europe and USA are already running short of masks and PPE as they creak under the strain of the pandemic.
At present, COVID-19 is most prevalent in Europe, where demand for surgical masks and other protective garments has increased this past two months. However, other countries – including Bangladesh – are several weeks behind Europe but are expected to follow the same pattern in terms of cases and deaths.

Denim Expert Limited Managing Director, Mostafiz Uddin, has reached out to the global community including brands & retailers, governments, embassies, donors, development agencies, global apparel associations and bodies in these unprecedented times.