From the Sector

• More than 8 million treasury shares cancelled

adidas announced today the completion of its second share buyback program this year. Between October 18, 2021, and November 25, 2021, the company bought back 1,619,683 shares for a total amount of € 450 million, corresponding to an average purchase price per share of € 277.83. Taking into consideration the first share buyback conducted during the third quarter, adidas bought back 3,471,205 shares for a total amount of € 1 billion in 2021. Including the dividend payment of € 585 million in May, the company returned nearly € 1.6 billion to its shareholders this year.

Strong cash returns are an essential part of the company’s new strategy ‘Own the Game’. Driven by the significant top-line growth and strong bottom-line expansion, adidas will generate substantial cumulative free cash flow until 2025. The majority of this – between € 8 billion and € 9 billion – will be distributed to shareholders through regular dividend pay-outs in a range of between 30% and 50% of net income from continuing operations, complemented with share buybacks.  

“‘Own the Game’ is a growth and investment strategy resulting in significant value creation,” said Harm Ohlmeyer, CFO of adidas. “Dividends as well as share buybacks are key components of this. Against this background and given our positive outlook for 2022, we plan to continue our regular share buyback activities early next year. This will be complemented by returning the majority of the cash proceeds from the Reebok divestiture to our shareholders after closing of the transaction, which is expected to occur during the first quarter of 2022.”

As announced in October 2021, adidas intends to cancel the majority of the shares repurchased as part of its buyback activities. As a result, a total of 8,316,186 treasury shares have been cancelled, reducing the company’s share count and stock capital from 200,416,186 to 192,100,000.

Indorama Ventures Public Company Limited (IVL) reported a strong 3Q 2021 performance amid record production volumes. The company maintained its positive outlook for the rest of the year and 2022, noting caution as headwinds including higher energy prices and supply chain disruptions weigh against resurgent consumer demand.

IVL reported EBITDA of US$478 million in Q3 versus US$552 million in the previous quarter and US$240 million a year earlier. Production volumes reached 3.73 million metric tons, a record, as the global recovery drove consumer demand for IVL’s products.

As the global economy recovers from the pandemic, consumer appetite and increasing Brent crude oil prices are testing supply chains and driving a commodity boom, with manufacturers running at full capacity. This has driven increases in freight prices and a shortage of materials.

Still, IVL posted a solid YTD performance, ending the first nine months of 2021 with EBITDA of US$ 1,512 million, up 123% YoY. The Integrated Oxides & Derivatives (IOD) segment will start to reap the full benefits of the hot commissioning of the Lake Charles gas cracker (IVOL) in Q4 and beyond, as well as continued advantaged shale gas economics.

In Q3, Project Olympus, the company’s cost saving and business transformation project, achieved US$63 million in efficiency gains, and is on track to achieve a total US$610 million of savings by 2023. IVL also implemented enhanced disclosures in governance, strategy, risk management, and metrics and targets, and launched a comprehensive financial policy and governance structure to accelerate environmentally driven projects.

IVL strengthened its Indorama Management Council (IMC) – the company’s highest operational management committee – by rotating experienced executives and adding the COOs of the Fibers and Integrated Oxides & Derivatives (IOD) segments. The appointments will help build the segments into self-sustaining organizations while also rotating expertise across the IMC.

3Q 2021 Performance Summary

• Consolidated Revenue of US$ 3,867M, an increase of 9% QoQ and 50% YoY
• EBITDA of US$ 478M in Q3 versus US$552 million, a decrease of 13% QoQ and an increase of 99% YoY
• Reported annualized EPS of THB 4.53 and core annualized EPS of THB 4.09

Indorama Ventures Public Company Limited issued a THB 10 billion triple-tranche Sustainability-Linked Bond, showcasing the company’s long-standing commitment to sustainable growth. It is the largest SLB issued in Thailand and the first offered to both institutions and high-net-worth investors.

The bond is part of IVL’s financing strategy across a range of instruments linked to the company’s sustainability targets. It is aligned with internationally accepted standards including International Capital Markets Association’s (ICMA) Sustainability-Linked Bond Principles and the Loan Market Association’s (LMA) Sustainability Linked Loan Principles.

The SLB is linked to IVL’s performance of reducing GHG emissions intensity by 10% by 2025 (from a 2020 base), increasing recycling of PET bale input to 750,000 tons per year by 2025, and achieving 25% renewable electricity consumption in 2030.

The triple-tranche structure includes 5-, 7-, and 10.5-year tenors, offering coupons of 2.48%, 3.00% and 3.60% per year respectively, targeting asset managers, commercial banks, insurance companies, cooperatives and high-net-worth individuals. With the orderbook peaking at over THB 17.8 billion due to strong interest in the sustainability-linked instrument, oversubscription was around 3x over the planned issuance amount of THB 6 billion with a green shoe option of THB 4 billion. In view of the strong orderbook from the investors, the company decided to exercise the green shoe option and increased the issuance to THB 10 billion, setting a new benchmark as the largest SLB transaction in Thailand. IVL appointed Bangkok Bank, Kasikorn Bank, Krungthai Bank, Siam Commercial Bank, and The Hongkong and Shanghai Banking Corporation Limited, Bangkok Branch as arrangers and bookrunners for the transaction.

On 23 September 2021, the bond was assigned an AA- rating and a “stable” outlook by TRIS Rating following a strong recovery of petrochemicals and derivatives and IVL’s growing profitability.

Under the terms, all tranches must purchase Energy Attribute Certificates (EAC) or voluntary carbon offsets in the event of failure to meet the sustainability performance targets (SPT). The testing dates for tenors with a maturity of 5 and 7 years are 31 December 2025, and 31 December 2030 for the 10.5-year tenor. SPT performance will be independently verified upon the testing dates.Proceeds for the issuance will be used to finance IVL’s corporate working capital and refinance existing debt.

In recent years, IVL secured loans linked to improvements in the company’s sustainability performance as a global leader in environmental, social and governance (ESG) integration. These included Thailand’s first Green Loan of USD 200 million and EUR 200 million from Japan’s Mizuho Bank, Thailand’s first cross-border Sustainability-Linked Ninja Loan worth USD 225 million from 16 institutions in Japan and a Blue Loan of USD 300 million arranged by International Finance Corporation and funded by Asian Development Bank and DEG.

• Order intake of CHF 698.6 million in third quarter 2021
• Order intake of CHF 1 673.9 million after nine months
• Acquisition of the three Saurer businesses on schedule
• Credit lines renewed early
• Outlook 2021

The positive market dynamics, which Rieter has already reported on several occasions, continued in the third quarter of the current year. Rieter recorded an order intake of CHF 698.6 million in the third quarter of 2021 (2020: CHF 174.4 million).

The order intake of CHF 1 673.9 million after nine months corresponds to an increase of 294% compared to the prior year period (2020: CHF 425.1 million).
 
The market development is broadly supported at the global level and is based on a catch-up effect from 2019 and 2020 in combination with a regional shift in demand. Rieter believes that a major reason for this regional shift in demand is the development of costs in China. This is leading to increased investments outside the Chinese market. The orders came primarily from Turkey, Latin America, India, Pakistan and China. Overall, Rieter is benefitting from its innovative product range and the global positioning of the company.

The Business Group Machines & Systems achieved an order intake totaling CHF 1 281.6 million in the first nine months of 2021 (+447%).*

In the first nine months of 2021, the Business Group Components recorded an increase of 95% to CHF 227.0 million, while the Business Group After Sales posted an order intake of CHF 165.3 million, an increase of 123% compared to the prior year period.*

Acquisition of the three Saurer businesses on schedule
The acquisition of the three businesses from Saurer, which Rieter announced on August 16, 2021, is proceeding according to plan. The incoming orders for these businesses are not taken into account in this trading update.
 
Credit lines renewed early
The Rieter Group arranged the early renewal of the existing committed credit lines (five-year term, totaling CHF 250 million).
 
Outlook 2021*
The first nine months of 2021 were characterized by a rapid market recovery combined with a regional shift in demand. Rieter expects the demand for new systems to gradually return to normal in the coming months.  
 
For the full year 2021, Rieter anticipates sales of around CHF 900 million.

* See attached document for more information.

The Lenzing Group recorded a significantly improved development of its operating result in the first half of 2021. The preliminary EBITDA (earnings before interest, tax, depreciation and amortization) more than doubled year-on-year to EUR 217.8 mn (compared to EUR 95.6 mn in the first half of 2020).

The currently positive environment is still characterized by a high level of uncertainty regarding the COVID-19 pandemic. Despite the continued limited visibility, the Managing Board of the Lenzing Group raises the outlook for the 2021 financial year.

Taking into account the above factors and due to the very positive development of the first half of the year, the Lenzing Group expects the EBITDA in 2021 to reach at least a level of EUR 360 mn.

The results of the Lenzing Group for the first half of 2021 will be published on Wednesday, August 04, 2021.

• Group sales in the first quarter 2021 of €241.5 million, down 2% below prior year (currency adjusted on prior year level)
• Expected positive impact from a contract termination with a customer of reporting segment Graphite Solutions contributes around €9 million to sales and earnings
• Transformation program proceeds according to plan in all areas
• EBITDA pre of €33.0 million significantly higher year-on-year (Q1/2020 €29.0 million), EBIT increases to €17.0 million (Q1/2020 €6.4 million)
• Positive net result at €6.1 million (Q1/2020 minus €4.3 million)
• Liquidity at €168.6 million also developed positively (year-end 2020 €141.8 million)
• Net financial debt decreases by 5% to €271.5 million (year-end 2020 €286.5 million)
• Equity ratio increases to 20.4% (Year-end 2020 17.5%)
• Outlook for fiscal year 2021 fully confirmed

See attached document for more information.

Based on Article 27 of Regulation 3 on measures to combat the Corona Virus (COVID-19), the Board of Directors of Rieter Holding Ltd. decided that shareholders can exercise their voting rights exclusively by authorizing the independent proxy. Shareholders therefore could not attend the Annual General Meeting in person. The AGM 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 15, 2021, the independent proxy represented a total of 2 084 shareholders who hold 63.6% of the share capital.

The shareholders approved the proposal of the Board of Directors not to distribute a dividend in view of the negative business result. In addition, they 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 2022.

The Chairman of the Board, Bernhard Jucker, and the members of the Board of Directors This E. Schneider, Hans-Peter Schwald, Peter Spuhler, Roger Baillod, Carl Illi and Luc Tack were confirmed for an additional one-year term of office. Stefaan Haspeslagh was newly elected to the Board of Directors for a 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 the approval of the annual report, the financial statements and the consolidated financial statements for 2020, 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.

Outlook Updated
As already communicated at the Results Press Conference on March 9, 2021, Rieter expects the market recovery to continue in 2021. The company expects an order intake exceeding CHF 500 million in the first half of 2021. For the first half of 2021, Rieter still anticipates that sales will be below break-even point. For the full year 2021, Rieter expects an operating profit.

• Swiss weaving machinery manufacturers are in the forefront of novel application development

Shoes and electronic calculators are probably not the first products people would associate with the textile weaving process. But they certainly signpost the future for woven fabrics, as two examples of the ever-wider possibilities of latest technology in the field. Fashion and function already combine in the increasing popularity of woven fabrics for shoes, and this is a present and future trend. Calculators in fabrics? That’s another story of ingenious development, using so-called ‘meander fields’ on the back and keys printed on the front of the material.

These glimpses of the outlook for modern weavers are among the highlights of developments now being pioneered by Swiss textile machinery companies. All weaving markets require innovation, as well as speed, efficiency, quality and sustainability. Member firms of the Swiss Textile Machinery Association respond to these needs at every point in the process – from tightening the first thread in the warp to winding the last inch for fabric delivery. They also share a common advantage, with a leading position in the traditional weaving industry as well as the expertise to foster new and exciting applications.

Technology and research cooperation
The concept of a ‘textile calculator’ was developed by Jakob Müller Group, in cooperation with the textile research institute Thuringen-Vogtland. Müller’s patented MDW® multi-directional weaving technology is able to create the meander fields which allow calculator functions to be accessed at a touch. A novel and useful facility, which suggests limitless expansion.

Today, the latest woven shoes are appreciated for their precise and comfortable fit. They score through their durability, strength and stability, meeting the requirements of individual athletes across many sports, as well as leisurewear. Stäubli is well known as a leading global specialist in weaving preparation, shedding systems and high-speed textile machinery. Its jacquard machines offer great flexibility across a wide range of formats, weaving all types of technical textiles, lightweight reinforcement fabrics – and shoes.

It’s possible to weave new materials such as ceramics, mix fibers such as aramid, carbon and other, and produce innovative multi-layers with variable thicknesses. Such applications put special demands on weaving machines which are fulfilled by Stäubli high-performance TF weaving systems.

Great weaving results are impossible without perfect warp tension, now available thanks to the world-leading electronic warp feeding systems of Crealet. Some market segments in weaving industry today demand warp let-off systems which meet individual customer requirements. For example, the company has recognized expertise to understand that geotextile products often need special treatment, as provided by its intelligent warp tension control system. Individual and connective solutions are designed to allow external support via remote link. Crealet’s warp let-off systems are widely used in both ribbon and broadloom weaving, for technical textiles applied on single or multiple warp beams and creels.

Functional, sustainable, automated
Trends in the field of woven narrow fabrics are clearly focused on functionality and sustainability. The Jakob Müller Group has already embraced these principles – for example using natural fibers for 100% recyclable labels with a soft-feel selvedge. It also focuses as much as possible on the processing of recycled, synthetic materials. Both PET bottles and polyester waste from production are recycled and processed into elastic and rigid tapes for the apparel industry.

For efficient fabric production environments, it is now recognized that automated quality solutions are essential. Quality standards are increasing everywhere and zero-defect levels are mandatory for sensitive applications such as airbags and protective apparel.

Uster’s latest generation of on-loom monitoring and inspection systems offers real operational improvements for weavers. The fabric quality monitoring prevents waste, while the quality assurance system significantly improves first-quality yield for all applications. Protecting fabric makers from costly claims and damaged reputations, automated fabric inspection also removes the need for slow, costly and unreliable manual inspection, freeing operators to focus on higher-skilled jobs.

Smart and collaborative robotics (cobots) offer many automation possibilities in weaving rooms. Stäubli’s future oriented robotics division is a driver in this segment with first effective installations in warp and creel preparation.

Control and productivity
Willy Grob’s specialized solutions for woven fabric winding focus on reliable control of tension, keeping it constant from the start of the process right through to the full cloth roll. Continuous digital control is especially important for sensitive fabrics, while performance and productivity are also critical advantages. In this regard, the company’s large-scale batching units can provide ten times the winding capacity of a regular winder integrated in the weaving machine.

The customized concept by Grob as well as design and implementation result in great flexibility and functionality of the fabric winding equipment – yet another example of Swiss ingenuity in textile machinery.  
There is even more innovation to come in weaving – and in other segments – from members of the Swiss Textile Machinery Association in future! This confident assertion is founded on an impressive statistic: the 4077 years of experience behind the creative power of the association’s member firms. It’s proof positive that their developments grow out of profound knowledge and continuous research.

• 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.

The corona pandemic has a significant impact on the global economy and thus also on the global automotive industry. The temporary plant closures at almost all customers in all regions will result in a revenue decline at Autoneum in the current year, the extent of which cannot yet be estimated.

In addition to the ongoing cost-saving programs, Autoneum has therefore decided on a comprehensive set of measures to further increase the flexibility of personnel and material expenses. This includes staff adjustments, e.g. by reducing the number of temporary employees in plants. In addition, short-time work at the Swiss sites, the Group’s headquarters in Winterthur and at the Sevelen plant (canton of Sankt Gallen), as well as short-time work in some other European countries and temporary closures of production facilities in various regions in line with those of customers are being implemented. With these measures, Autoneum is at the same time making its contribution to protecting the workforce, breaking chains of infection and containing the spread of this pandemic.

Despite the above-mentioned countermeasures and in light of the advancing spread of the coronavirus, Autoneum does not expect to achieve its targets for the business year 2020. Due to the considerable uncertainties regarding the course and duration of the pandemic, no updated outlook is provided for 2020 for the time being.