From the Sector

adidas and RIMOWA have come together to announce their inaugural capsule collection that seeks to offer explorers of the world the perfect tools to navigate and escape the cities of today.

Exclusively made in Germany, the cross-category collection features two contemporary designs: RIMOWA’s first-ever aluminium backpack and the ADIDAS NMD_S1 sneaker.

The RIMOWA x ADIDAS NMD_BACKPACK boasts new technical solutions that makes it suitable for outdoor needs and overnight trips. Made from RIMOWA’s signature grooved aluminium, it features a number of thoughtful functionalities, from padded utility shoulder straps fitted with a carabin and thumb loops to rope weight-bearing straps and grab handle. The piece also features foam ridges inspired by ADIDAS Boost foam overlaying the backpack’s grooved surface to ensure comfort, as well as an elasticated webbing running through its middle to secure the backpack onto the suitcase’s telescopic tubes. To allow for flat packing, a detachable gusset opens the backpack to reveal two deep zipped pockets, as well as a 16-inch laptop pocket inscribed with both brands’ logos.

The RIMOWA x ADIDAS NMD_S1 iteration features the futuristic sneaker’s signature Primeknit uppers in a titanium-inspired colourway, with the flexible ADIDAS Boost midsole in a light, almost translucent base colour.

• Currency-neutral sales up 4%, reflecting continued double-digit growth outside Greater China
• Gross margin down 1.0pp to 49.1% as price increases were more than offset by increased supply chain costs, higher discounting, and an unfavorable market mix
• Operating profit of € 564 million reflecting an operating margin of 8.8%
• Net income from continuing operations of € 66 million negatively impacted by several one-off costs totaling almost € 300 million as well as extraordinary tax effects in Q3

“The market environment shifted at the beginning of September as consumer demand in Western markets slowed and traffic trends in Greater China further deteriorated. As a result, we saw a significant inventory buildup across the industry, leading to higher promotional activity during the remainder of the year which will increasingly weigh on our earnings,” said adidas CFO Harm Ohlmeyer. “We are encouraged by the enthusiasm for the upcoming FIFA World Cup which is already noticeable in our Football revenue growth. And in North America we are gearing up for an exciting upcoming basketball launch.”

In the third quarter, adidas’ currency-neutral revenues increased 4%. While the company experienced high-single-digit top-line growth during the first two months of the period, deteriorating traffic trends in Greater China as well as slowing consumer demand in major Western markets weighed on the revenue development in September. In addition, the company’s decision to suspend its own operations in Russia at the end of Q1 significantly reduced revenues by more than € 100 million during the third quarter, particularly impacting the company’s direct-to-consumer (DTC) business. In euro terms, the company’s revenues grew 11% to € 6.408 billion in the third quarter (2021: € 5.752 billion).

From a category perspective, revenue growth was the highest in adidas’ strategic growth categories Football and Running, both growing at strong double-digit rates. In Football, the jersey launches ahead of the FIFA World Cup 2022 fueled consumer excitement prior to the tournament. Revenues in Running were driven by the latest iterations of adidas’ successful running franchises, including Adizero and Supernova, which both grew more than 50% during the quarter. On the Lifestyle side, the further scaling of the successful Forum and Ozweego franchises led to strong double-digit growth for both product families. At the same time, additional highly limited drops as part of the Gucci and Balenciaga partnerships continued to spark excitement around the adidas brand.   

From a regional perspective, revenue growth was driven by the company’s Western markets and APAC, which combined continued to grow at a double-digit rate (+12%). In EMEA, revenues grew 7% despite the loss of revenue in Russia/CIS of more than € 100 million. Revenues in North America increased 8% during the quarter driven by a double-digit increase in the company’s DTC channel. In APAC and Latin America, revenue growth accelerated compared to Q2, reaching 15% and 51% respectively, year-on-year. In contrast, the company’s top-line development in Greater China continues to be severely impacted by the challenging market environment, mainly related to the ongoing covid-19-related restrictions. While the company’s own retail revenues in Greater China increased 7% in the third quarter reflecting a robust sell-out, the significant product takebacks reduced the company’s sell-in and resulted in a revenue decline of 27% for the market as a whole during the three-month period.  

Strong bottom-line improvement in 2023  
In 2023, the company expects the non-recurrence of the one-off costs of around € 500 million occurred in 2022 to have a positive impact on the net income development in the same magnitude. In addition, in light of the challenging market environment, adidas established a business improvement program to safeguard the company’s profitability in 2023. As part of this program the company has launched several initiatives to mitigate the significant cost increases resulting from the inflationary pressure across the company’s value chain as well as unfavorable currency movements. In total, the program, which will result in one-off costs of around € 50 million in the fourth quarter of 2022, is expected to compensate cost headwinds of up to € 500 million in 2023. In addition, it is expected to deliver a positive profit contribution of around € 200 million next year. 

• Last twelve months (LTM) Core EBITDA of US$2.5B, an increase of 60% YoY
• Core EBITDA per ton of US$163 in LTM3Q22 and US$159 in 3Q22
• Operating cash flow of US$1,952 in LTM3Q22, an increase of 59% YoY
• 3Q22 Core Net Profit of THB 10.34B and Reported Net Profit of THB 8.14B

Indorama Ventures Public Company Limited (IVL) reported a resilient year-to-date performance and increasing earnings in a challenging macroeconomic environment.

IVL posted Core EBITDA of US$606 million in 3Q22, a 39% increase YoY and a decline of 20% QoQ as the strong tailwinds that drove record earnings into 2022 began to normalize in the third quarter.  

Strategic acquisitions, including Oxiteno, are bolstering IVL’s increasingly diverse geographic footprint and product portfolio, supporting earnings through volatile economic conditions. Revenue declined 10% QoQ in 3Q and grew 27% YoY as Combined PET, the largest business segment, saw steady volumes through the year, and new portfolio additions performed strongly, such as surfactants in the Integrated Oxides and Derivatives segment. With more than 70% of IVL’s platform catering to consumer daily necessities, demand remains stable.

Fibers segment posted YTD Core EBITDA of $189 million, a rise of 2% YoY. 3Q Core EBITDA increased 2% YoY, and decreased of 11% QoQ, to US$49 million. The Lifestyle fibers business continues to be impacted by the lockdown in China, while management in the Hygiene and Mobility verticals in Europe are effectively managing high energy costs.

Combined PET (CPET) segment achieved YTD Core EBITDA of US$1,192 million, an increase of 42% YoY. Core EBITDA in 3Q22 rose 27% YoY to US$327 million, and declined 24% QoQ, as business remained steady across operations apart from in Europe where peak energy prices continue to put pressure on demand and margins.

D K Agarwal, CEO of Indorama Ventures, said, “We are pleased with our performance across the business cycle. Our management is working hard to extract the advantages that we enjoy in terms of geographic leadership, product diversity, and an unmatched customer base of global household brands. Together with our habitual lens on cost management, these actions will help us to weather the economic challenges and continue to focus on our long-term potential.”

Ascend Performance Materials has purchased a majority stake in California-based Circular Polymers, a recycler of post-consumer, high-performance polymers including polyamide 6 and 66, polypropylene and polyester (PET). The deal provides Ascend with a consistent supply of high-quality PCR materials for its ReDefyne™ sustainable polyamides, launched at K 2022.

Circular Polymers, which as part of the deal is renamed Circular Polymers by Ascend, reclaims and processes post-consumer carpet via a unique technology and has redirected approximately 85 million pounds of waste from landfills into new goods since 2018.

“We are focused on helping our customers reach their sustainability goals and Circular Polymers by Ascend provides materials that offer strong performance with a considerably smaller environmental footprint, compared to other technologies like pyrolysis,” said Phil McDivitt, president and CEO of Ascend. “Since we launched ReDefyne, the demand for our circular products has been significant across all segments of our business, including automotive, consumer, electronics and high-performance fibers and textiles.”

Ascend has a sustainability strategy based on three pillars: empowering people, innovating solutions and operating without compromise. Ascend has committed to reducing its greenhouse gas emissions by 80% by 2030 and recently announced two new efforts to reduce the carbon footprint of its products.

• 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.

• Focus on the guiding principle of "textile intelligence" and sustainability

Long before sustainability became a trend in the textile industry, Schoeller Textil AG, which has been innovating technical fabrics and smart textile finishing technologies for more than 150 years, made it its mission to develop textile innovations in harmony with nature. Now the company is undergoing an extensive rebranding, whilst unveiling its strong brand foundation in the process. The result embodies the newly defined guiding principle of “Textile Intelligence” - the development and successful implementation of innovative textiles and intelligent textile technologies.

Innovations in the textile industry must meet requirements on several levels – offering both new and optimized solutions to sociological, ecological, and economic challenges of our time. Creating this holistic added value is firmly rooted in the Schoeller brand origin and is still the top priority in textile product development today. The brand essence has thus remained the same, but it has been embodied anew.

“At the beginning of the rebranding process, it was clear to us we had to root ourselves in (Swiss) tradition in order to fully realize Schoeller’s entire brand potential and successfully explore new, digital paths,” said Antonio Gatti Balsarri, Schoeller chief commercial officer.

“The goal of the rebranding is to communicate our traditional brand values in a completely new brand presence. The result was a sharpened brand profile, a clear brand strategy and tonality, as well as a clean, modern corporate design. We will specifically address our sustainability commitment through the expansion of digital touchpoints, their cross-media use, and an increased online presence. Simplified, straightforward, sustainable - in accordance with our greatest source of inspiration: nature.”

Transparency and Sustainability
Paramount to Schoeller’s corporate identity is the full disclosure of brand principles and transparency around all business divisions. A simplified logo design was established by reducing logo elements and colors for a modern look and feel that can be produced in a much more resource-efficient manner. Schoeller’s new brand mantra of “Textile Intelligence” speaks to its company mission of more than 150 years.

Schoeller has been a bluesign system partner from the very beginning and uses the Higg Facility Environmental Module (FEM) to assess sustainable performance. In addition to environmentally-friendly manufacturing processes and careful material selection, the highest quality and sustainability standards in production also mean guaranteeing fair working conditions. Schoeller follows a Code of Conduct that guarantees transparent production chains, environmental protection, and fair working conditions.

“Zero Textile Waste” becomes a targeted brand strategy. While the production of textiles and textile technologies is continuously being optimized to preserve resources, the manufacturing processes are often costly and complex. To this end, Schoeller offers new approaches to efforts around Zero Waste in the industry. Its new online shop, “Schoeller re-Fabric” sells textile remnants from production directly to designers and smaller productions to increase its overall production volume efficiency and avoid textile waste.

Fresh Relevance announces that DC International has selected its versatile personalization platform to power personalized online experiences for its Coverstore and Leatherology brands.

DC International is a vertically integrated eCommerce company and home to two fast-growing direct-to-consumer brands: Coverstore and Leatherology. By selecting Fresh Relevance to power personalization across the website and email marketing of Coverstore and Leatherology, DC International will be providing shoppers with a more engaging and tailored online experience. The business will take advantage of the rich feature set within the Fresh Relevance platform, including product recommendations.

“We’re delighted to welcome DC International to the Fresh Relevance family and are excited to help them provide their Coverstore and Leatherology customers with a more tailored and valuable experience online,” says Mike Austin, CEO & Co-founder at Fresh Relevance.

Freudenberg Performance Materials (Freudenberg) has launched an elastic variant of its flexible superabsorbers for modern wound dressings. These superabsorbers increase the comfort level for patients as well as enabling longer wear time, thus reducing the frequency of dressing changes. Freudenberg is debuting the elastic superabsorbers at this year’s Compamed in Düsseldorf, from November 14 – 17, 2022. Further highlights at the trade fair include components for more sustainable wound care, PU foams with directly applied silicone adhesives, and an innovative hydrophilic debridement foam.

Freudenberg uses a new technology to manufacture the elastic superabsorbers. Unlike other methods, this technology does not perforate or slit the material, thus achieving a high degree of consistent elasticity. Furthermore, the technology used by Freudenberg bonds the superabsorbent fibers more uniformly with the material, thus enhancing the integrity of this layer in the wound dressing.

“Our new elastic superabsorbers demonstrate yet again how Freudenberg components help increase comfort for patients, reduce the workload for nursing staff and lower healthcare costs. Our extensive technology platform and our innovative strength are the basis for this,” Dr. Henk Randau, SVP and General Manager Global Division Healthcare at Freudenberg Performance Materials, said.

Inspired by this innate desire to experience nature and a shared vision, adidas TERREX has teamed up with fashion-forward Japanese outdoor label and wander on a collection that will take hikers from city centre to mountain top (and back again) in style.

Since its inception, adidas TERREX has focused on providing people with the clothing and apparel they need to realize their individual goals in the outdoors and enjoy the benefits of nature.

Tokyo designers Keita Ikeuchi and Mihoko Mori, meanwhile, launched their own outdoor label and wander in 2011 to bring more creativity to outdoors wear. By pairing high-fashion design with the practical requirements needed for adventure, theirs is a modern approach to apparel that works both in the wild, and on the streets.  

Together, adidas TERREX and and wander have collaborated on a multi-seasonal collection that ties these philosophies together to help people enjoy more outdoors experiences.

With a striking visual update, the lightweight TERREX Free Hiker 2 offers grip on a range of surfaces, and a responsive BOOST midsole that delivers incredible energy return. With a breathable upper and a sock-like fit that adapts to every step, this supportive shoe made in part with Parley Ocean Plastic is ready for adventure, anywhere.

With the TERREX Free Hiker 2 taking care of the feet, the TERREX XPLORIC and wander COLD.RDY Down Jacket is a functional essential with eye-catching design. COLD.RDY insulating material help keep the warmth in, while prominent TERREX x and wander reflective prints on the jacket and detachable hood help it stand out. With an array of pockets and adjustable features for the right fit, this versatile jacket’s natural habitat is everywhere. It’s also made in part with recycled materials.

adidas TERREX x and wander graphics and reflective detailing have been worked into the rest of an adventure-ready outdoor clothing collection that also includes a TERREX Fleece Jacket, loose-fit unisex TERREX Graphics Hoody and TERREX Pants.

Also available in the adidas TERREX x and wander collection are breathable Merino Wool Hiking Socks made with COLD.RDY technology for snug hiking , a quilted Winterized Bucket Hat, and a lightweight AERO.RDY Hiking Backpack that is loaded with features to look after outdoor essentials.