From the Sector

Kornit Digital LTD. announced to unveil its new Smart Curing and Rapid SizeShifter solutions at TecStyle Visions 2023. Kornit Smart Curing is an intelligent and adaptive solution significantly streamlining curing processes while delivering high-quality results. Additionally, the introduction of Rapid SizeShifter eliminates time-consuming direct-to-garment pallet changes typically required to address disparate applications.

Kornit’s new energy-efficient Smart Curing solutions include Orion for mid-level production, and Titan for higher-capacity volumes – both optimized for compatibility with Kornit Atlas MAX systems and based on field-proven solutions from the acquisition of Tesoma. These highly efficient curing systems sync production and finishing for an end-to-end process that reduces both energy consumption and total cost of ownership (TCO). Kornit’s Rapid SizeShifter for Atlas MAX is an adjustable pallet that quickly adapts to disparate application requirements – reducing costly downtime associated with pallet changes and streamlining production for accelerated time-to-market.

At the Annual General Meeting of Autoneum Holding Ltd on 24th March 2023, a clear majority of the shareholders approved the introduction of a capital band in the amount of approximately CHF 100 million net proceeds to finance the acquisition of Borgers Automotive. The proposal to waive the payment of a dividend for the 2022 financial year in view of the lower net result was also approved. In addition, Board member Rainer Schmückle as well as CEO Matthias Holzammer were given a farewell.

221 shareholders attended today’s Annual General Meeting of Autoneum Holding Ltd in Winterthur. 66.48 percent of the share capital was represented.

The shareholders approved the Annual Report, the Annual Financial Statements and the Consolidated Financial Statements for 2022. The proposal of the Board of Directors to waive the payment of a dividend for the financial year 2022 due to the lower net result was also approved by the Annual General Meeting.

In addition, the shareholders of Autoneum Holding Ltd granted discharge to all members of the Group Executive Board and the Board of Directors by a large majority of votes.

Chairman Hans-Peter Schwald and the other members of the Board of Directors Liane Hirner, Norbert Indlekofer, Michael Pieper, Oliver Streuli and Ferdinand Stutz were confirmed in office for another year. Hans-Peter Schwald, Norbert Indlekofer, Ferdinand Stutz and Oliver Streuli were re-elected to the Compensation Committee.

The consultative vote on the 2022 remuneration report was approved by 85.55%. The proposals for the remuneration of the Board of Directors and the Group Executive Board for the 2023 financial year as well as the other proposals were also approved by a large majority.

With 99.03%, a clear majority of the shareholders approved a capital band authorizing a capital increase of approximately CHF 100 million net proceeds. The purpose of the capital increase is to partially finance the acquisition of the automotive business of the Borgers Group announced by Autoneum on January 9, 2023. The Annual General Meeting also approved the other proposals of the Board of Directors for partial amendments to the Articles of Association.

Rainer Schmückle did not stand for re-election. He had been Vice Chairman of the Board of Directors, Chairman of the Audit Committee and member of the Strategy and Sustainability Committee since Autoneum became independent in 2011. CEO Matthias Holzammer, who will leave Autoneum for family reasons, was also bid farewell.

At the same time, Hans-Peter Schwald welcomed the new CEO Eelco Spoelder, who will take over the management of the Group from Matthias Holzammer on March 27, 2023: "With Eelco Spoelder, Autoneum gains an accomplished leader with many years of experience in the automotive supply industry. At Faurecia and previously at Continental, Mr. Spoelder has successfully proven that he can ensure strategic continuity and operational excellence even in a difficult market environment. I and the other members of the Board of Directors warmly welcome Eelco Spoelder and look forward to our future cooperation."

• Oerlikon takes leadership position in luxury metalware

Oerlikon has successfully closed the acquisition of Riri, following the signing of the agreement announced on December 16, 2022.

Riri is a provider of coated metal accessories for the luxury fashion industry. This deal is the strategic next step to complement Oerlikon’s acquisition of Coeurdor in 2021. It expands Oerlikon’s foothold in the luxury market and together creates a leading platform in luxury metalware. As the demand for PVD coatings grows, Oerlikon’s PVD technologies that provide environmentally friendly solutions will accelerate the shift of the luxury goods industry to greener PVD technology.

Renato Usoni, CEO of Riri, will lead the newly formed luxury business unit of Oerlikon as President Oerlikon Luxury. Riri will operate as a separate business within the Surface Solutions division. Its zippers and buttons will continue to use the Riri and Cobrax brands on individual products. Oerlikon will consolidate Riri as of March 1, 2023.

Archroma, a manufacturer of sustainable specialty chemicals and solutions for industries such as textiles, packaging & paper, paints and coatings, announced that it has secured all regulatory approvals required to complete the acquisition of the Textile Effects business from Huntsman Corporation (“Huntsman Textile Effects”).

Both parties expect the transaction, which was first announced on 09 August 2022, to close on 28 February 2023.

Archroma is a portfolio company of US-based private investment firm SK Capital Partners. Since its formation in 2013, Archroma acquired and successfully integrated the global textile chemicals businesses of BASF as well as BASF’s stilbene-based OBA business for paper applications, and M. Dohmen, a specialist in coloration for automotive textiles.

Heike van de Kerkhof, Archroma Group Chief Executive Officer (CEO), commented: “We are very excited to see this acquisition nearing completion. I am deeply grateful to the project teams of Archroma and Huntsman who are preparing for a smooth transition for our employees and partners. After closing, we will be able to bring together our expert teams and highly complementary product portfolios to offer our customers and brand partners the high performance they expect, whilst respecting natural resources and the planet.”

• Sales of CHF 366.8 million in the third quarter, CHF 987.4 million after nine months
• Order intake of CHF 226.4 million in the third quarter, CHF 1 095.8 million after nine months
• Order backlog of around CHF 2 000 million as of September 30, 2022
• Precautionary measures taken against potential energy crisis in Europe
• Financing of a Professorship for Artificial Intelligence
• Rieter site sales process on schedule
• Outlook 2022

Rieter recorded a significant increase in sales in the third quarter of 2022, reaching a level of CHF 366.8 million (2021: CHF 257.3 million). The measures introduced to increase sales and profitability in the second half of 2022 are taking effect and will continue to be implemented in a systematic manner. These include a close cooperation with key suppliers, the development of alternative solutions to eliminate material shortages, the enforcement of price increases, and the improvement of the margin quality of the order backlog.

The order intake of CHF 226.4 million in the third quarter of 2022 reflects the expected normalization of demand for new equipment compared to the record year of 2021, which was characterized by catch-up effects and the regional shift in demand. In addition, the well-known uncertainties and risks and the continuing extremely long delivery times at key manufacturers had a dampening effect on demand. Due to the slowdown in capacity utilization in the spinning mills, demand for consumables, wear & tear and spare parts also declined in the third quarter of 2022. Major orders continued to be recorded from Turkey, Uzbekistan, and China.

Rieter has a high order backlog of around CHF 2 000 million as of September 30, 2022 (September 30, 2021: CHF 1 562 million), which will guarantee capacity utilization in all three business groups until well into 2023 or rather 2024. The cancellation rate in the reporting period was around 5% of the order backlog.

Outlook 2022
Rieter anticipates weakened demand for new systems in the coming months. The demand for consumables, wear & tear and spare parts will depend on the capacity utilization of spinning mills in the months ahead.

For the full year 2022, Rieter expects sales of around CHF 1 400 million. The realization of sales revenue from the order backlog continues to be associated with risks in relation to the well-known uncertainties.

Despite significantly higher sales compared to the prior-year period, 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 as expenses in connection with the acquisition in the years 2021/2022.

Coisne et Lambert, the group composed of the two companies TDV Industries and Klopman International, a leader in the production and marketing of technical fabrics for the professional clothing and PPE sector, announced the acquisition of TAD Teintures et Apprêts Danjoux.

TAD is specialized in the dyeing and finishing of knitted fabrics and has been in the market for over 30 years. Based in Le Coteau (France), the company has a production site of 9,000 m² and is a major player in the civil and administrative markets for technical textiles for professional clothing, medical, sport and apparel.

With a well equipped R&D laboratory, responsive and innovative sampling and production processes, TAD is ISO 14001 certified to manage its environmental performance.

TAD will extend the group's textile know-how adding expertise in knitwear finishing (dyeing, finishing and functionalities). The complimentary nature of their skillsets will allow the three companies to develop synergies for the benefit of their common and specific markets.

This integration will enable TAD to strengthen its specific business model and its services as a French finishing company over the long term, for the benefit of its historical and future customers.

The group, which is made up of the two companies TDV Industries and Klopman International, achieved a turnover of 185 million euros for the 2021-2022 financial year and employs more than 600 people. It also intends to expand its presence in new markets and geographical areas. Klopman International and TDV Industries want to offer markets more complete, flexible and competitive solutions for professional, civil and military clothing.

• 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.

C&S strengthens its position in the luxury segment with the acquisition of Texo S.R.L., a company based in Cagli (Pesaro and Urbino) with 10 years of experience in the production of fashion apparel for Texo and for third parties.

C&S enriches the offer of its Style Services Luxe division, the research and production solution for any kind of style needs, together with Style Services Denim and along with C&S Experience projects, initiatives in direct contact with retail such as the haikure brand and the license agreements for Europe for Jeckerson and Purple. C&S’s history begins over 40 years ago in Trestina, in the Perugia province, and is rooted in denim culture and in the limitless potential that comes with this fabric. The company has begun to establish itself as a partner for the creation of jackets, shirts, outerwear, and denim. Its know-how expresses the combination of the production souls that characterize its territory of origin, between Umbria and Marche: all the typical tradition of premium denim mixed with the culture of luxury apparel, intimately dedicated to beauty, quality, and attention to detail.

“We are proud to have achieved this new milestone” states Federico Corneli, C&S’s main shareholder. “We firmly believe that the added value that Texo S.R.L.’s specialization brings to the table will allow us to grow further and to be able to accelerate the strategic path that will lead us to establish ourselves as special partner for the most important luxury brands”.

AkzoNobel is to further strengthen its African footprint after reaching an agreement with Kansai Paint to acquire its paints and coatings activities in the region. Completion, which is subject to regulatory approvals, is expected during the course of 2023.
 
Present in 12 countries in Africa, Kansai Paint has regional consolidated revenue of around €280 million. The transaction includes the Plascon brand, which has more than 100 years of heritage in South Africa. Together with our own Dulux brand, they’re the longest-established paint brands in the region. The intended acquisition also includes automotive and protective coatings, and coatings for wood and coil.
 
“Acquiring Kansai Paint’s activities in the region will help us to further expand our paints and coatings business in Africa and provide a strong platform for future growth,” says AkzoNobel CEO, Thierry Vanlancker. “Kansai Paint shares our commitment to innovation and sustainability, and we look forward to combining our expertise, which will result in a wider range of innovative products and more sustainable solutions for our customers.”
 
Adds Kunishi Mori, Kansai Paint’s president: “We are convinced that AkzoNobel is the best owner as AkzoNobel considers the decorative paints business as a core business and will therefore be able to unlock the full potential of the business, thereby contributing to the development of the African economy.
 
”For Prejay Lalla and Arvind Shekhawat, Chief Executive Officers of KPAL and KPEA (the respective Africa entities being sold by Kansai Paint in this transaction), this agreement is an opportunity to further enhance growth. “We believe that AkzoNobel will be the owner who will elevate the business to the next level as AkzoNobel is willing to invest in ESG, is committed to innovation, workforce development and broader career opportunities as well as the long-term success of its paint businesses in Africa.”
 
The intended acquisition follows on from a series of recent acquisitions by AkzoNobel across paints and coatings over the last two years, including Titan Paints in Spain and Portugal, New Nautical Coatings in the US and, most recently, Grupo Orbis in Latin America.

Indorama Ventures Public Company Limited (IVL) completed the acquisition of Ngoc Nghia Industry – Service – Trading Joint Stock Company (NN), one of Vietnam’s leading PET packaging companies. The acquisition will boost IVL's market position as it continues to expand its integrated offering of PET products to major multinational customers throughout the region.

Ngoc Nghia is a trusted market leader in PET, preforms and closures, with long-term partnerships with major global and Vietnamese brands in the beverage and non-beverage industries. It has four manufacturing facilities in Vietnam's north and south with a total production capacity of 5.5 billion units of PET preforms, bottles, and closures, totaling 76,000 tons of PET conversion each year.

IVL plans to sustainably grow the business to better serve customers in Vietnam, a high-growth new market, as well as IVL’s major PET packaging customers across the region including global household beverage brands. Ngoc Nghia’s family business roots, led by its founder for over 30 years, was integral to IVL’s decision to invest in the company as a strategic match. The existing team’s extensive local market knowledge will be further augmented by leadership from IVL’s PET packaging business unit, bringing a powerful combination of local, regional and global expertise to the market.