From the Sector

• All motions approved
• Dividend of CHF 4.50 agreed
• COVID-19

In relation to participation in the Annual General Meeting on April 16, 2020, the Board of Directors of Rieter Holding Ltd. arranged exclusively written or electronic voting and the granting of power of attorney to the independent proxy. In taking this approach, the Board of Directors relied on Article 6a, lit. b of Ordinance 2 of the Swiss Federal Council (Measures to Combat the Coronavirus of March 16, 2020). Physical participation by the shareholders was therefore not possible. The Annual General Meeting was held on the premises of Rieter Holding Ltd. at the company’s headquarters in Winterthur.

At the Annual General Meeting of Rieter Holding Ltd. on April 16, 2020, the independent proxy represented a total of 2 025 shareholders who hold 64.3% of the share capital.

A dividend of CHF 4.50 per share was agreed. The shareholders approved the proposed maximum total amounts of the remuneration of the members of the Board of Directors and of the Group Executive Committee for fiscal year 2021.

The Chairman of the Board, Bernhard Jucker, and the members of the Board of Directors This E. Schneider, Michael Pieper, Hans-Peter Schwald, Peter Spuhler, Roger Baillod, Carl Illi and Luc Tack were confirmed for an additional one-year term of office.
Furthermore, 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.

Shareholders also adopted all other motions proposed by the Board of Directors, namely approval of the annual report, the financial statements and the consolidated financial statements for 2019, and formal approval of the actions of the members of the Board of Directors and those of the Group Executive Committee in the year under review. In addition, the authorized capital was extended for a further two years.

COVID-19
At present, it is not possible to predict how the global COVID-19 pandemic will affect Rieter’s sales and earnings in the first and second half of 2020, and thus also for 2020 as a whole.

Rieter therefore refrains from providing an outlook for financial year 2020 and will issue the relevant information as part of the semi-annual report on July 16, 2020.
The company has taken the necessary measures to protect employees and to meet commitments to customers as far as possible.

Thanks to long-standing customer relationships, a focus on innovation, global positioning and the company’s financial stability, Rieter will successfully overcome the challenges.

• Order intake up 7% on previous year; orders amounting to CHF 401.6 million booked in fourth-quarter 2019 (4th quarter 2018: CHF 119.0 million)
• As expected, sales significantly down on previous year, falling by 29% to CHF 760 million
• EBIT margin of 11 .2% and net profit of 6.9% of sales, non - recurring profit contribution from sale of real estate in Ingolstadt (Germany)
• Proposed dividend of CHF 4. 5 0 per share

In financial year 2019, Rieter recorded an order intake of CHF 926.1 million, which was 7% up on the prior-year period (2018: CHF 868.8 million). This development is attributable to a strong fourth quarter, in which Rieter booked orders totaling CHF 401.6 million (4th quarter 2018: CHF 119.0 million). At the end of 2019, the company had an order backlog of about CHF 500 million (December 31, 2018: about CHF 325 million).

In 2019, Rieter Group sales amounted to CHF 760.0 million (2018: CHF 1 075.2 million), which corresponds to a decrease of 29% compared to the previous year.

EBIT Margin, Net Profit and Free Cash Flow

Rieter generated an EBIT margin of 11.2% or CHF 84.9 million (2018: 4.0% or CHF 43.2 million). This includes the non - recurring profit from the sale of real estate in Ingolstadt in the amount of CHF 94.5 million. As a result of the capacity adjustment and cost reduction measures, the number of employees decreased by 11% to 4 591 (December 31, 2018: 5 134).

Net profit rose to CHF 52.4 million (6.9% of sales) and thus was significantly higher than in the previous year (2018: CHF 32.0 million or 3.0% of sales). The contribution from the sale of real estate in Ingolstadt had an impact of CHF 67.2 million (EUR 61.6 million) at the net profit level. Free cash flow in 2019 was CHF 42.3 million (2018: CHF 63.6 million). Net liquidity rose to CHF 162.1 million (December 31, 2018: CHF 150.2 million ). The equity ratio as of December 31, 2019, was 47.8% (prior-year balance sheet date: 44.6%).

• Verträge über zusätzliche Projekte in Kairo unterzeichnet
• Auftragsvolumen beträgt rund 30 Millionen Schweizer Franken
• Auftragseingang im ersten Halbjahr 2020 erwartet

Am Swiss-Egyptian Investment Forum, das heute in Kairo (Ägypten) stattfand, unterzeichneten die Cotton & Textiles Holding Company und Rieter zusätzliche Verträge im Zusammenhang mit dem Modernisierungsprogramm für die ägyptische Textilindustrie.

In Anwesenheit von H.E. Hisham Tawfik, Minister of Public Business Sector of the Egyptian Government, und dem Schweizer Bundesrat Guy Parmelin, Vorsteher des Eidgenössischen Departements für Wirtschaft, Bildung und Forschung, wurden die Verträge von Dr. Ahmed Moustafa, Chairman Cotton & Textiles Holding Company, und Dr. Norbert Klapper, Chief Executive Officer Rieter, unterzeichnet.

Das Gesamtvolumen der Verträge beläuft sich auf rund 210 Millionen Schweizer Franken, einschliesslich der Verträge, die an der ITMA 2019 in Barcelona unterzeichnet wurden und ein Volumen von rund 180 Millionen Schweizer Franken umfassen.

Rieter erwartet, dass der gesamte Auftrag als Auftragseingang im ersten Halbjahr 2020 verbucht wird. Bisher wurden 165 Millionen Schweizer Franken verbucht.

Dr. Klapper freute sich sehr über die feierliche Unterzeichnung: «Der nächste Schritt des heute vereinbarten Programms unterstreicht die starke Partnerschaft zwischen der Cotton & Textiles Holding Company und Rieter. Ich danke unseren ägyptischen Partnern für das Vertrauen, das sie Rieter weiterhin entgegenbringen. Wir werden unser Bestes tun, um die Cotton & Textiles Holding Company bei der erfolgreichen Umsetzung des Modernisierungsprogramms zu unterstützen.»

• Order intake of CHF 524.5 million after nine months
• Order intake for a major project from Egypt booked in October 2019
• Market situation remains challenging
• Real estate sale in Ingolstadt successfully completed
• Outlook 2019

The cumulative order intake recorded by Rieter Group in the first nine months of 2019 of CHF 524.5 million (2018: CHF 749.8 million) was down by 30% compared to the prior-year period. In the third quarter of 2019, order intake was CHF 146.2 million (Q3 2018: CHF 238.0 million).

Order Intake for a Major Project from Egypt Booked
On October 7, 2019, Rieter booked the order intake for the first six projects with Cotton & Textile Industries Holding Company, Cairo (Egypt) of around CHF 165 million. This amount is thus not included in the figures for the third quarter of 2019 and will positively affect the fourth quarter. The sales are anticipated to be realized in the 2020/2021 financial years. The order includes deliveries of compact and ring spinning systems and it is part of a comprehensive modernization program for the Egyptian textile industry.

Market Situation Remains Challenging
The demand for new machinery remained at a low level in the third quarter of 2019. The primary reasons are existing overcapacity in the spinning mills, the trade conflict between the USA and China, as well as political and economic uncertainties in other regions of importance to Rieter. Rieter's market share continues to be at the level of around 30%.

Real Estate Sale in Ingolstadt Successfully Completed
Rieter completed the real estate sale in Ingolstadt (Germany) to GERCHGROUP of Düsseldorf (Germany) on September 13, 2019. Rieter expects a non-recurring profit contribution from this transaction on a net profit level of around EUR 60 million.

Outlook 2019
Rieter estimates significantly lower sales for the year 2019 as a whole compared to 2018, and expects a significant drop in the result from the ongoing business. EBIT and net profit are anticipated to be significantly above the levels of the previous year due to the non-recurring profit contribution from the sale of real estate in Ingolstadt (Germany). The cost-cutting measures introduced have been implemented to a great extent.

Graf introduces at ShanghaiTex three novelties for the textile market: a new card clothing with up to 30% longer lifetime, a height adjustable comb and a helpful solution for card clothing management.
MULTISHARP, the unique wear resistant alloy for card clothings, increases the lifetime of metallic card clothings on the cylinder by up to 30%. Additionally, the work load of the maintenance team can be minimized by providing longer service cycles and less unplanned downtimes.

The yield on raw material can be increased without compromising the quality requirements – thanks to the continuous height adjustability of the new combs series. The continuous and exact gap setting between nipper and circular comb on each individual combing head provides customers a new level on raw material utilization. Additionally, the maintenance people will appreciate the comfortable and easy installation of the circular comb.

With the card clothing management the overall investment costs can be reduced. This is based on minimizing the operational expenses including optimizing the overall equipment effectiveness. Graf’s card clothing management prolongs the lifetime of flexible flats by up to three times without comprising on the quality parameters throughout the entire life cycle.

Suessen presents the new compacting devices for high flexibility, new weighting arms and premium rotor spinning components for excellent yarn quality.
COMPACTeasy is the new mechanical compacting device available as a plugon/ plug-off unit for any ring spinning machine type and suitable for most common applications like cotton, man-made fibers and blends. COMPACTeasy is the solution in compacting without additional energy requirement.

New EliTe is a versatile compact-spinning system with new innovative components. The customers profit from higher productivity, better quality and lower operational costs. Upgrade packages and spare parts packages enable the customers to benefit also on existing installations.

The new Top Weighting Arm HP 4080 for roving frames offers a new design for easy settings and improved stability. In addition, consistent yarn quality over the lifetime is guaranteed.

Sales expected to be realized in financial years 2020/2021
At ITMA 2019, the Rieter Group signed contracts for seven projects with Cotton & Textile Industries Holding Company, Cairo (Egypt), for a total volume of around 180 million Swiss francs.

The order intake for the first six projects in the amount of around 165 million Swiss francs was booked upon receipt of the down payment on October 7, 2019; sales are expected to be realized in financial years 2020/2021. The order includes deliveries of compact and ring spinning systems and is

• Order intake in the first• Order intake in the first half of 2019 amounted to CHF 378.3 million, 26% below the previous year period
• At CHF 416.1 million, sales were 19% down on the previous year period
• EBIT of CHF -1.2 million and net profit of CHF -3.8 million
• Implementation of cost-cutting measures proceeding according to plan
• Innovations successfully launched at ITMA 2019 in Barcelona
• Major order from Egypt signed – worth around CHF 180 million
• Completion of real estate sale in Ingolstadt (Germany) expected in the third quarter 2019
• Outlook unchanged compared to spring 2019

In the first half of 2019, Rieter posted an order intake of CHF 378.3 million (first half year 2018: CHF 511.8 million). This represents a decline of around 26% compared to the previous year period. As already reported, the main reason was low demand in the new machinery business (Business Group Machines & Systems: -34%). Rieter understands that market share remained unchanged at the previous year’s level of around 30%. Order backlog as at June 30, 2019 was CHF 295 million (December 31, 2018: CHF 325 million).

At ITMA 2019, Rieter showcases innovations for all four spinning processes that are established on the market. These innovations are designed to reduce raw material, energy and labor costs, while also increasing productivity during production of the yarn quality required in each case. Solutions to increase the flexibility of the spinning mill are also presented. In addition, Rieter presents two solutions for the production of innovative yarns.

• Innovative Textile Processes

Innovations are welcome. Based on innovations, many changes in textile processing are leading to more efficiency in process workflows. At the International Cotton Conference in Bremen on Wednesday, March 21st, Session IV Textile Processing, which takes place from 4:00 pm to 6:00 pm, is dedicated to this subject area and attractive examples.

Sustainable
Michael Tuschak, Mayer & Cie., Germany, informs about the 3-in-1 concept of Spinitsystems. Spinning, cleaning and knitting are all combined in one machine. This enables the production process of high-quality single jersey knitwear to be shortened significantly, which saves energy costs and reduces CO2 emissions.

Indigo.
An old dye returns to glory. Dr. Dean Etheridge of Texas Tech University, USA, talks about a new, innovative indigo dyeing process for cotton yarns using foam. This saves large amounts of water and is now increasingly being used by major brands in jeans production.

Efficient.
Amin Leder, Trützschler GmbH & Co. KG, Germany, presents a technique in which the stretching process for rotor yarn production does not take place in a separate machine, but is integrated into the carding. This makes it possible to efficiently process even cotton with a higher waste content.

Overview.
Harald Schwippel, from Rieter, Switzerland, summarises all four major spinning technologies for cotton – ring spinning, compact spinning, rotor spinning and air-jet spinning. His talk provides an overview of the possibilities that each of these processes currently offers for the manufacture of different yarns and the most efficient options for different applications.

More to know
In the run-up to the International Cotton Conference, the Fibre Institute Bremen and the Cotton Exchange are organising a specific seminar for spinning mills on Tuesday, dealing with the efficient handling of contaminants in cotton, from elimination in production to removal in winding. On Friday morning, Expert Session IX deals with the exchange of the latest research results, e.g. in the field of ginning in relation to cotton quality, or the important issue of checking the traceability of GMO-free cotton.