From the Sector

• OFF TO NEW HORIZONS

BOGNER was founded on innovations and adventures. When looking back, it is to 90 years of pioneering heritage. The company celebrates the past while welcoming the future with a selection of iconic BOGNER silhouettes revived and reinterpreted.

BEST OF BOGNER Fall/Winter 2022 combines innovative craftsmanship with luxury and progress. A collection of refined looks that create a sense of loose elegance and lightness.

Luxurious materials such as Bavarian wool, high-performance stretch nylon and performance travel wool are combined with embroidery, color blocking, cable knit patterns and fringes. The result: a fashion revival with iconic, timeless silhouettes and modern, luxurious highlights.

• Order intake of CHF 869.4 million, order backlog of more than CHF 2 100 million
• Sales of CHF 620.6 million, preproduced deliveries in the three-digit million range had to be postponed until the second half of 2022
• EBIT of CHF -10.2 million, net result of CHF -25.2 million due to significant cost increases, additional costs, and acquisition-related expenses
• Action plan to increase sales and profitability
• Rieter site Winterthur
• Outlook

Rieter continued to be successful in the market in the first half of 2022. Based on the company’s technology leadership, innovative product portfolio and the completion of the ring- and compact-spinning system, a high order intake and a significant increase in sales were generated. The increase in sales was achieved even though preproduced deliveries in the three-digit million range had to be postponed until the second half of 2022. The order backlog is at a record level. Despite higher sales, the significant increase in material and logistics costs, additional costs for compensation of the material shortages and the expenditure incurred for the acquisition in the years 2021/2022 resulted in a loss. Rieter is implementing an action plan to increase sales and profitability. The sales process for the remaining land owned by Rieter was initiated.

Order Intake and Order Backlog
Rieter posted an order intake of CHF 869.4 million, which included CHF 176.6 million from the businesses acquired in the years 2021/2022. As expected, demand has thus returned to normal compared with the exceptionally high figure for the prior-year period, but remains well above the average figure for the last five years of around CHF 570 million (first half 2021: CHF 975.3 million, first half 2022 excluding acquisition effect CHF 692.8 million).

The regional shift in demand with investments in additional spinning capacity outside China along with investments in the competitiveness of Chinese spinning mills continues. Rieter benefits from its technology leadership, the innovative product portfolio and the completion of the ring- and compact-spinning system through the acquisition of the automatic winding machine business. The largest order intakes came from India, Turkey, China, Uzbekistan, and Pakistan.

On June 30, 2022, the company had an order backlog of more than CHF 2 100 million (June 30, 2021: CHF 1 135 million). Cancellations in the reporting period amounted to around 5% of the order backlog.

Sales
The Rieter Group posted sales of CHF 620.6 million, which included CHF 68.9 million from the businesses acquired in the years 2021/2022 (first half 2021: CHF 400.5 million).

As a result, sales were significantly higher than in the prior-year period, although preproduced deliveries, which mainly affected the Business Group Machines & Systems, in the three-digit million range had to be postponed until the second half of 2022. The reasons for the postponements were the COVID lockdown in China and supply chain bottlenecks.

EBIT, Net Result and Free Cash Flow
Rieter posted a loss of CHF -10.2 million at the EBIT level in the first half of 2022.

Earnings were impacted by significantly higher material and logistics costs. The price increases already implemented are having a delayed effect, mainly in the Business Group Machines & Systems, and were therefore unable to compensate for the high increase in costs. In addition, costs in connection with material shortages negatively impacted profitability. The result also includes acquisition-related expenses of CHF -11.2 million.

The loss at the net result level was CHF -25.2 million, of which CHF -17.6 million was due to the acquisition.

Free cash flow was CHF -57.1 million, attributable to the build-up of inventories in connection with the high order backlog and postponed deliveries.

Action Plan to Increase Sales and Profitability
Rieter is implementing a comprehensive package of measures with the aim of increasing sales and profitability in the second half of 2022.

The package focuses on two main priorities: Firstly, Rieter is continuing to systematically implement price increases while working to improve the quality of margins of the order backlog, so as to compensate for cost increases in materials and logistics.
Secondly, Rieter is working closely with key suppliers and is developing alternative solutions to eliminate material bottlenecks, as far as possible, in order to safeguard deliveries.

Rieter Site Winterthur
The Board of Directors has decided to begin the process for the sale of the remaining land at the Rieter site in Winterthur (Switzerland). In total, around 75 000 m2 of land will be sold.

Outlook
As already reported, Rieter expects demand for new systems to normalize further in the coming months. Due to the capacity utilization at spinning mills, the company anticipates that demand for consumables, wear & tear and spare parts will remain at a good level.

For the full year 2022, due to the high order backlog and the consolidation of the businesses acquired from Saurer, Rieter expects sales of around CHF 1 400 million (2021: CHF 969.2 million). The reduced sales forecast compared to early 2022 (March 2022: CHF 1 500 million) reflects the impact of global supply bottlenecks. The realization of sales revenue from the order backlog continues to be associated with risks in relation to the well-known challenges.

Despite significantly higher sales, Rieter expects EBIT and net result for 2022 to be below the previous year’s level. This is due to the considerable increases in the cost of materials and logistics, additional costs for compensation of material shortages as well expenses in connection with the acquisition in the years 2021/2022. Despite the price increases already implemented, global cost increases continue to pose a risk to the growth of profitability.

This season, adidas Originals returns with the next installment of its “Always Original” initiative. First assembled in 2021 to pay homage to the multifaceted identities of women and non-binary folks, the “Always Original Collective” takes centre stage again, as the brand with the Three Stripes turns its focus to representing allyship in originality with a new collection and campaign made to fit every story.

The drop one offering has been designed for everyone – no matter their size, shape, gender, or style. Celebrating all forms of originality each piece is available in an extended size run and boasts lace constructions that are as versatile as the moves of those the collection was designed for. Created to allow everyone to express their individuality, the garments on offer reimagine adidas’ sporting history for a new generation of changemakers while the footwear selection features updated takes on the Forum Low and the Astir W silhouettes.

Launching alongside the main Fall/Winter 2022 drop one selection is an expressive capsule collection co-created directly with the “Always Original Collective”. Inspired by each member’s interpretation of two key words – Belonging and Community – the capsule offers a host of bold and dynamic graphic pieces.

The first seasonal drop is accompanied by the arrival of an undeniably optimistic campaign centering on four members of the collective – Jari Jones, Amani, Naomi Otsu, and Lena Waithe – and inspired by the slogan: “They’ve been here for us. Now it’s our turn.”

The campaign visuals spotlight the shops and small businesses that helped to shape the lives of each dynamic changemaker: Yu & Me Book Store, Le’Jemalik Beauty Salon, Hibiscus Brew Coffee Shop, and Savant Studios. Putting the focus on those who have been there all along, the campaign seeks to demonstrate the power of allyship in communities around the world.

FIRE+ICE continues to develop both sides of the collection: FUNCTIONAL SPORTSWEAR and PERFORMANCE WEAR. The collection convinces with sophisticated looks that allow you to move seamlessly between mountain top and metropolis.

Bold colors, modern prints, technical materials and fashionable silhouettes create suitable outfits for a stroll in fashion cities or sporty trips to mountain resorts. The signature mix of freeride attitude and modern urban style creates casual „urban outdoor pieces“ with a technical twist for best performance, no matter where it takes you.

TEXAID as a professional collector and sorter with roots in Switzerland contributes to this ecosystem to enable the textile-to-textile recycling.  The creation of Swiss Textile Recycling Ecosystem marks a key milestone in the upscaling of Worn Again Technologies’ recycling process technology with technology scale-up partner Sulzer Chemtech in Winterthur. It also supports its ambition to create a circular economy where non-reusable, hard-to-recycle textiles can be reintroduced into supply chains to become new fibers.

To cause a paradigm shift in the fashion industry and realize true circularity requires all members of the value chain to be on the same page and working towards the same goals. The Swiss Textile Recycling Ecosystem is a network comprising fabric and textile manufacturers, waste collectors and sorters, as well as retailers, brand owners and technology providers – all coordinated by Swiss Textiles. All these parties will cooperate to make their shared vision of a more sustainable fashion industry a reality, where used textiles can be recycled into new textiles.

TEXAID as a stakeholder in the Swiss Textile Recycling Ecosystem and as leading textile recycling company with over 40 years of experience will support the initiative through collecting, sorting, pre-processing and providing pre- and post-consumer feedstock to the Demonstration Plant. At its headquarters in Schattdorf (CH), TEXAID will investigate possibilities to automate the sorting and pre-processing of textile feedstock for recycling. Currently, TEXAID processes more than 80,000 tons of end-of-use textiles and footwear every year all over Europe and the US.

90 years of BOGNER are celebrated with the Anniversary Capsule Collection Frozen Riviera. Frozen Riviera draws inspiration from the pioneering figure of Maria Bogner, the woman who made the mountains chic. BOGNER not only adored the Riviera, but also supplied its leading style icons with their winter wardrobes.

The result is a Cross Capsule Collection of BOGNER Sport and Fashion, that represents the future heritage of the brand. A palette of rich blues and off-white is enlivened by gold trim details, depicting an abstract print pattern of waves and slopes that underlines the connection between the Mediterranean and the Alps.

The iconic silhouettes of the past 90 years are reinterpreted for winter and combined with new volumes, techniques and materials - always with an eye to the future. Characterized by modern silhouettes, tonal outfits and a look of loose elegance, BOGNER heritage details meet the latest innovations. The result: Athluxury Sports Fashion.

• Natural fibers combined with bio-derived epoxy resins provide sustainable options for Industrial markets

Hexcel has developed a new product range that combines Hexcel resin systems made with bio-derived resin content with natural fiber reinforcements to create material solutions for Automotive, Winter Sports, Marine and Wind Energy applications.

HexPly Nature Range includes proven resins such as HexPly M49, M78.1-LT and M79 but with bio-derived epoxy resin content. The excellent resin characteristics remain unchanged in the new Nature Range products, maintaining high mechanical performance and consistent processing properties.
In addition, the HexPly Nature Range provides prepreg options with natural fiber reinforcements that can be seamlessly integrated into existing production processes.

Hexcel worked with TÜV Austria to provide independent, high-quality measurement and assessment of the bio-content of HexPly Nature Range products. TÜV Austria’s OK biobased certification uses a standardized measurement of the biobased carbon content enabling transparency and easy like-for-like comparison between products.

At JEC World in Paris on May 3-5, Hexcel presented an alpine ski produced by the Tecnica Group Ski Excellence Center which produces skis for Blizzard and for Nordica using HexPly Nature Range M78.1-LT UD flax fiber prepreg. In addition to providing a bio-based material solution, the natural fiber-reinforced prepreg also offers the potential to improve impact performance and vibration damping in the ski.

Claude Despierres, VP of Sales and Marketing – Industrial at Hexcel, said, “Our new HexPly Nature Range forms an important part of providing customers with biobased, TÜV-certified material options based on our established prepreg resin systems. Marine, winter sports, wind energy and automotive manufacturers can now have the choice to switch from petroleum-based material solutions to Hexcel HexPly Nature Range with no compromise in performance or process efficiency.”

Hologenix® announces that its newest innovation has achieved two recognitions. In addition to being a Top Ten winner in the Fibers & Insulation Category of ISPO Textrends Fall/Winter 2023/24, pure white CELLIANT has been shortlisted in the Drapers Sustainable Fashion 2022 Awards. The company is sharing the spotlight with recognized brands such as H&M, Sweaty Betty and Timberland. According to Drapers, the leading authority on fashion retailing in the UK since 1887, which sponsors these awards annually, this year they received the most entries ever, making them very competitive.

To create pure white CELLIANT rPET fiber, Hologenix developed a strategic partnership with the Ireland-based Wellman International Limited, a fully owned subsidiary of Indorama Ventures. Indorama Ventures is investing $1.5 billion on sustainability initiatives, allowing them to recycle 50 billion PET bottles globally by 2025 to support the growth of the circular economy. Wellman International has been a pioneer of recycling technologies for almost 50 years, offering specialist solutions for the medical, hygiene, automotive, home care and apparel sectors.  

Pure white CELLIANT rPET fiber is sustainably manufactured, with a low-impact supply chain. It is achieved by embedding bioceramic materials, that are naturally derived and ethically sourced, into fibers, yarns and fabrics. Wellman International has converted 100% of pure white CELLIANT Polyester production into rPET. This conversion to rPET has been implemented across all CELLIANT product categories, replacing traditional polyester and dramatically enhancing CELLIANT’s sustainability initiatives.

Pure white CELLIANT is recognized as a Class 1 medical device in the European Union and is able to carry the CE mark. Like CELLIANT, pure white CELLIANT captures and converts body heat into infrared energy, powering bio-responsive textiles. This energy is reflected back to the body, resulting in increased local circulation and cellular oxygenation. These advantages have a variety of wellness benefits, including stronger performance, faster recovery and better sleep, as well as many functional properties such as thermoregulation, quick-dry properties and odor inhibition.  

Wellman International distributes pure white CELLIANT fibers across Europe, the Middle East, Africa, Asia and the USA.

On 21 - 22 June 2022, the VIEW Premium Selection Autumn.Winter 23/24 welcomes the textile and fashion industry in Munich's MVG Museum.

The VIEW Premium Selection as a preview textile trade show stands for the latest developments, first colour and material trends and the presentation of a selected, high-quality product portfolio in a personal and professional atmosphere.

At the earliest possible date in the season, around 250 brand new collections for Autumn.Winter 23/24 will be presented at VIEW in the areas of FABRICS, ADDITIONALS, DESIGN STUDIOS as well as DENIM and SPORTSWEAR. The internationality of this year's exhibitors deserves mention since in addition to Germany, Italy and Turkey, they also come from France, England, Greece, Spain, Denmark, Hong Kong, China and Japan.

Bellandi, Dynamo, E. Miroglio, Lisa Spa, Manteco, Max Müller, Agentur Püttmann, Set and Tejidos Royo will be on site, along with numerous other manufacturers. The futuristic suppliers We Nordic, Knopf und Knopf, Le Studio Copenhagen, Thermore and Kipas are exhibiting at VIEW for the first time, making the show the basis of information and inspiration for the upcoming season.

The textile and fashion industry is also invited to the next MUNICH FABRIC START Autumn.Winter 23/24 from 30 August - 01 September 22 at the MOC Munich and to the BLUEZONE from 30 - 31 August 22 on the Zenith Areal. Valuable information, physical exchange and a spirit of innovation as well as a new SOURCING show-in-show concept await the global industry players in Munich.

• Order intake of CHF 2 225.7 million at record level
• Sales of CHF 969.2 million despite bottlenecks in the supply chains
• EBIT margin of 4.9% and net profit of 3.3% of sales
• Milestones achieved in strategy implementation
• Dividend of CHF 4.00 per share proposed
• Outlook

The 2021 financial year was characterized by a rapid market recovery. As market and technology leader, Rieter succeeded in this environment in posting a record order intake, significantly increased sales compared with the previous year despite the bottlenecks in the supply chains, and generated an EBIT margin of 4.9%. This success is based on the investments in innovation and competitiveness of Rieter in recent years. Crisis management in the 2020 pandemic year, which aimed at benefiting from the expected market recovery after the pandemic, was also a contributing factor. With the acquisition of three businesses from the Saurer Group, a further milestone in the implementation of the strategy has been achieved. The acquisition strengthens Rieter’s market position by completing the ring and compact-spinning system. With the laying of the foundation stone for the Rieter CAMPUS in September 2021, an important prerequisite for the expansion of the company’s technology leadership has been created.

Order Intake and Sales
At the end of 2021, the company had an order backlog of around CHF 1 840 million (December 31, 2020: around CHF 560 million). Rieter closed the 2021 financial year with sales of CHF 969.2 million, which corresponds to an increase of 69% compared to the previous year (2020: CHF 573.0 million).

EBIT, Net Profit and Free Cash Flow
The profit at the EBIT level in the 2021 financial year was CHF 47.6 million, which represents 4.9% of sales. At the net profit level, a profit of CHF 31.7 million accrued, which corresponds to 3.3% in relation to sales. Free cash flow at CHF 128.1 million is a result of the positive developments in earnings and net working capital. The acquisition of three businesses from the Saurer Group for a purchase price of CHF 321.4 million resulted in net debt of CHF 161.9 million; as of December 31, 2020, net liquidity amounted to CHF 41.3 million. At December 31, 2021, liquid funds amounted to CHF 249.4 million (2020: CHF 283.2 million). The equity ratio as of December 31, 2021, was 27.6% (previous year’s reporting date: 36.4%).

Sales by Region
Sales increased in all regions, with the exception of Africa. The highest growth of CHF 126.0 million compared to CHF 50.8 million in the previous year was achieved in India, followed by North and South America with CHF 149.9 million in 2021 compared to CHF 66.4 million in the previous period, and the Asian countries excluding China, India and Turkey with CHF 318.7 million (2020: CHF 184.8 million). In Turkey, Rieter increased sales to CHF 182.3 million (2020: CHF 122.0 million), in China to CHF 135.3 million (2020: CHF 92.8 million) and in Europe to 43.3 million (2020: CHF 38.4 million). In Africa, sales were below the prior-year level at CHF 13.7 million (2020: CHF 17.8 million).

Business Groups
Despite the well-known challenges in the supply chain, the Business Group Machines & Systems posted an order intake of CHF 1 708.6 million (2020: CHF 363.9 million) and achieved sales of CHF 590.3 million, double the previous year’s figure (2020: CHF 295.8 million). Ring and compact-spinning systems, on whose customer benefits Rieter has worked intensively in recent years, were particularly in demand.
The order intake of the Business Group Components was CHF 296.0 million, 75% above the previous year’s level (2020: CHF 169.1 million). Against the backdrop of successful strategy implementation and good capacity utilization at spinning mills worldwide, sales increased to CHF 231.5 million (2020: CHF 174.3 million). The Business Group After Sales recorded an order intake of CHF 221.1 million, 106% higher than the previous year (2020: CHF 107.2 million). Sales reached a level of CHF 147.4 million (2020: CHF 102.9 million). The positive evolution of the Business Group After Sales was also significantly influenced by successful strategy implementation and good capacity utilization at spinning mills around the world.

Acquisition of three Saurer businesses
Effective from December 1, 2021, Rieter is consolidating the components businesses acquired from Saurer. With the acquisition of Accotex (elastomer components for spinning machines) and Temco (bearing solutions for filament machines), Rieter is strengthening its market position in the components business. The acquisition of the third business from Saurer (automatic winder) completes and thus considerably increases the attractiveness of Rieter’s ring and compact-spinning system. This acquisition marks an important milestone in the implementation of the company’s strategy as an innovative systems supplier. The transaction is expected to be finalized in the first half of 2022.

Rieter CAMPUS
On September 8, 2021, at the Winterthur location, the foundation stone was laid for the Rieter CAMPUS, which includes a customer and technology center as well as an administration building. With the Rieter CAMPUS, the company is creating a state-of-the-art and creative working environment, ensuring access to cutting-edge European technology and enhancing its ability to attract young talent. Thus, the Rieter CAMPUS will make an important contribution to the implementation of the innovation strategy and to the enhancement of the company’s technology leadership position.

Dividend
In view of the profit of CHF 31.7 million at the net profit level in the 2021 financial year, the Board of Directors proposes to the shareholders for 2021 the distribution of a dividend of CHF 4.00 per share. This corresponds to a payout ratio of 57%.

Changes to the Group Executive Committee
With effect from March 1, 2021, the Board of Directors of Rieter Holding AG appointed Roger Albrecht as Head of the Business Group Machines & Systems and a member of the Group Executive Committee.

Board of Directors and Annual General Meeting
At the 130th Annual General Meeting held on April 15, 2021, the shareholders approved all motions proposed by the Board of Directors. The Chairman of the Board Bernhard Jucker and the Directors This E. Schneider, Hans-Peter Schwald, Peter Spuhler, Roger Baillod, Carl Illi and Luc Tack were confirmed for a further one-year term of office. Stefaan Haspeslagh was newly elected to the Board of Directors for a one-year term of office. This E. Schneider, Hans-Peter Schwald and Bernhard Jucker, the members of the Remuneration Committee who were standing for election, were also each re-elected for a one-year term of office.

Changes to the Board of Directors
The two members of the Board of Directors, Luc Tack and Stefaan Haspeslagh, resigned from Rieter’s Board of Directors with effect from August 30, 2021.

Outlook
Rieter anticipates a gradual normalization of the demand for new systems in the coming months. The company expects demand for wear and spare parts to remain at a good level due to high capacity utilization at spinning mills. For the full year 2022, due to the high order backlog and the consolidation of the businesses acquired from Saurer, Rieter anticipates sales of around CHF 1 500 million. Sales in the second half of 2022 are expected to be higher than in the first half of the year. The realization of sales from the order backlog continues to be associated with risks in relation to the well-known bottlenecks in the supply chains, the ongoing pandemic and the geopolitical uncertainties. Despite the price increases already implemented, the rise in global costs poses a risk to the development of profitability.