From the Sector

• Fiber prices and demand under pressure due to COVID-19 crisis
• Measures to maintain operations and to protect employees, customers and suppliers implemented successfully
• Hygiene competence center established to produce personal protective equipment in the fight against COVID-19 pandemic
• Strategic investment projects in Brazil and Thailand progressing according to plan
• Management Board proposes not to distribute a dividend for 2019 – AGM rescheduled for June 18, 2020

In a historically difficult market environment with increased pressure on prices and volumes resulting from the COVID-19 crisis, the Lenzing Group held its ground well in the first quarter of 2020. Thanks to a diversified business model and its global footprint on the one hand, and the disciplined implementation of the sCore TEN corporate strategy on the other, the effect on the revenue and earnings development was partially offset.

In the first quarter of 2020, revenue declined by 16.7 percent in comparison with the prior-year quarter and amounted to EUR 466.3 mn. The main reason was the development of prices for standard viscose (due to significant overcapacity in the market) and other standard fibers. The impact of the COVID-19 crisis further increased pressure on prices and volumes. The prices for standard viscose dropped to a new all-time low of 9,150 RMB/ton by March 31 – up to 33 percent lower than in the prior-year quarter. The comparatively positive development of the specialty fiber business and slightly higher demand for fibers in the medical and hygiene segments partially offset the decline in revenue. The share of specialty fibers increased from 47.3 percent in the first quarter of the previous year to 60.9 percent. The earnings development reflects the decline in revenue: EBITDA (earnings before interest, tax, depreciation and amortization) decreased by 24.3 percent to EUR 69.6 mn. The EBITDA margin declined from 16.4 percent to 14.9 percent. Net profit for the period was down 58.6 percent to EUR 17.7 mn. Earnings per share amounted to EUR 0.84 compared with EUR 1.65 in the first quarter of the previous year.

National Council of Textile Organizations (NCTO) President and CEO Kim Glas issued a statement, urging the government to institute Buy American policy changes to help bolster U.S. manufacturers producing personal protective equipment (PPE) for frontline workers battling the COVID-19 pandemic.

“If the government is sincere about reconstituting a U.S. production chain for medical personal protective equipment (PPE) to resolve the drastic shortages we are experiencing during the current pandemic, it is going to have to make key policy changes to help incentivize domestic production. A strong Buy American mandate for these vital healthcare materials needs to be instituted for all federal agencies, coupled with other reasonable production incentives, to help ensure a strong U.S.  manufacturing base for these essential products.

Our government already has an existing example of such a mandate that serves as an excellent model. The U.S. Department of Defense operates under a fiber-to-finished product Buy American rule for military textiles. This rule ensures that the vital textile materials our U.S. warfighters depend upon, come from a secure domestic production chain that cannot be severed during a military emergency by offshore entities.

There is a bipartisan call for action as members of Congress on both sides of the aisle have begun to acknowledge the need for these types of reasonable and essential policy changes.

Anything short of fully instituting domestic purchase requirements through Executive Order and other legislative initiatives will ensure that PPE production through U.S. supply chains that have been created overnight don’t evaporate as soon as this crisis is over.  

In the midst of the crisis, our failure to confront this challenge will allow for a repeat of the sins of the past that allowed sourcing agents to offshore the entire production of medical PPE in search of lucrative profits. While chasing the lowest cost import may have seemed cost effective at the time, these past few months have demonstrated that we paid a deadly price through this approach by jeopardizing the very lives of frontline medical personnel that are fighting the pandemic.   

This is a national security issue. It’s also a vital healthcare issue and it is decision time for U.S. policymakers. If our country is to be prepared for future deadly pandemics such as the one it is now facing, reasonable policy changes need to be implemented to ensure that we strengthen our domestic supply chain to address America’s security, safety and healthcare requirements.”

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers. 

Materials for in excess of one million protective masks
Within the context of supporting the critical infrastructure in Germany, Oerlikon Nonwoven immediately began converting its laboratory systems in Neumünster to manufacture nonwovens at the end of March. With this, only small local businesses and companies were initially supported in the manufacture of oronasal masks.
With the laboratory system at the R&D Center material for more than one million protective masks a month can be manufactured.

The laboratory has meanwhile run out of raw materials and new orders for replacement materials had to be placed before Easter – with current delivery times of approx. 3 weeks. This will allow production to be resumed, and even considerably expanded, in May.
The laboratory system is now once again being deployed to produce nonwovens that will be used to make more than million face masks / oronasal masks a month. “We will not be manufacturing the masks ourselves. We have meanwhile found both corresponding partner companies and also private individuals demanding nonwovens”, adds Andreas Frisch, commenting on the developments.

Boom in orders
Furthermore, Oerlikon Nonwoven has also fired up the production of the machines and systems used for its meltblown technology. The demand from Germany, Europe and the rest of the world has quickly
secured the company a high in orders..
We will be commissioning the first meltblown system at the site of a leading Western European nonwovens producers in the second quarter of 2020. The capacities for respiratory masks available in Europe to date are predominantly manufactured on Oerlikon
Nonwoven systems.

• Expanding global textile and polymer business

SANITIZED AG announces that it has entered into an agreement with Consolidated Pathways Inc. Midland, Michigan USA to globally promote the Sanitized® odor-management, hygiene function and material protection technologies to brands and retailers. Consolidated Pathways will also support the advancement of the trusted Sanitized® Quality Seal and related branding concepts. The longtime co-operation between SANITIZED AG and ARCHROMA remains unchanged and is supported by the activities of Consolidated Pathways.

Consolidated Pathways acts as global brand and technical representative for the Sanitized® line of antimicrobial products. Consolidated Pathways will be focusing on commercializing Sanitized® products in textiles and will use its broad experience in polymer-based antimicrobials to extend the reach of the unique technologies that SANITIZED AG offers.

Consolidated Pathways, Inc is based in Midland, Michigan USA. The Principals of Consolidated Pathways have over two decades of experience with commercializing polymer-based antimicrobials and sustainable surface modification technologies.

• Bemberg™ presents a great deal of novelties with a true key-statement for sustainability: Let’s Make it Circular!
• The lifespan of Bemberg™’s regenerated cellulose fiber Cupro derived from cotton is fully circular: from the source to manufacturing.

“Sustainability is the founding pillar of our company,” says SHUNSUKE SATO, sales manager of Bemberg™ by Asahi Kasei. “Indeed, the smart fiber is made from a cotton linter which is pre-consumer material, a natural derived source, that doesn’t deplete forestry resources”.

In Bemberg™’s production the whole sustainable closed-loop process is supported by the LCA study, signed by ICEA (Istituto per la Certificazione Etica e Ambientale) and validated by President of Ecoinnovazione Paolo Masoni ex Research Director of ENEA (Ente per le Nuove tecnologie, l’Energia e l’Ambiente).

While recyclability is granted by the Global Recycle Standard - GRS certification by the renown Textile Exchange (an influential guarantee that involves the whole production process and supply chain behind the company’s smart yarns), Bemberg™ yarns are also entirely biodegradable and ecotoxicity-free - meaning that at the end of their life circle they break down into the environment leaving no trace in terms of toxic substances as attested by the Innovhub-SSI report.

A special focus deserves Velutine™ Evo, the new fibrillation finishing technology for Bemberg™ fabrics only that guarantees another level of sustainable benefits without sacrificing the Bemberg™ amazing and unique touch. As part of the company’s continuous innovation, Velutine™ Evo brings better environmental, energy and water profiles for the benefit of Bemberg™ partners in the manufacture of their ranges.
The sustainable achievements of the new finishing technology have been measured by LCA - Life Cycle Assessment study by ICEA and proved to guarantee environmental benefits such as -16.5% of greenhouses gas emissions and -21% of overall consumption of energy resources. On top of that Velutine™ Evo means also -20.5% of electricity savings, -15.9% of steam production and -19.5% of water consumption.

The first Bemberg™ partner to present a commercial collection enriched by Velutine™ Evo is the Portuguese Matias & Araújo. With an innovative spirit, dynamism and a determined entrepreneurial spirit, the company is a leading knitwear producer for the textile industry.

Bemberg™ collaborated also with the premium brand CAALO that is making its mark in the outerwear market with its Sustainably produced Functional-Luxury proposal. For SS20, CAALO uses Bemberg™ lining because of the sustainability properties and it’s unique colour.

CAALO uses as much eco-friendly and sustainable materials as possible without compromising on design or quality. This Bemberg™ lining was a perfect fit. This versatile blazer features a removable hood, hidden welt pockets, button closure, and removable cargo pockets.

• New human-machine interface brings smart features to tissue operations

Paper Converting Machine Company (PCMC), part of Barry-Wehmiller, has launched Smart TOUCH HMI, a new human-machine interface available on Forte tissue converting lines.

Following high-performance design principles, PCMC’s Smart TOUCH HMI offers users a clean, modern interface and enhanced help features. The smart analytic capabilities are aimed at providing customer insights to improve overall equipment effectiveness. The Smart TOUCH HMI works much like today’s mobile devices with swipe functionality, enabling a short learning curve and increased productivity.

“We designed our new HMI with operators in mind,” said Jason Hilsberg, PCMC Tissue Sales Director. “PCMC is always working to improve the capabilities and features of our machines for our customers, and more specifically, to enhance the experience of the operators. With simplified controls and navigation, robust help functions and easy recipe management, this new design will provide operators with a more efficient process to keep tissue operations running quickly and smoothly.”

Center of competence for hygiene established in Wiener Neudorf to support Austria and the EU in the Covid-19 crisis for the industrial production of high-quality protective masks with a monthly capacity of 12 million pieces.

Lenzing AG and Palmers Textil AG found “Hygiene Austria LP GmbH”, in which Lenzing AG holds 50.1% and Palmers Textil AG 49.9%. The newly founded company will start producing and selling protective masks for the domestic and European markets from May 2020.

Over the past few weeks, Lenzing AG and Palmers Textil AG have invested several million euros in a modern production infrastructure at the Wiener Neudorf location and secured the corresponding raw materials for protective masks production. In a first step, the company produces so-called mouth-nose protective masks (MNS) and surgical protective masks of class EN14683. Hygiene Austria LP GmbH plans to increase its capacities to over 25 million masks per month over the next few weeks and to expand this business geographically as well.

The demand for high-quality MNS and respiratory masks for medical personnel is increasing rapidly, and there is real competition on the international market for these products. In order to sustainably secure domestic supply now and in the future and to strengthen the business location, the two companies Lenzing AG and Palmers Textil AG have now set a milestone with their own competence center for hygiene based in Austria.

Hygiene Austria LP GmbH thus makes a significant contribution to combating the Covid-19 pandemic and ensures the long-term supply of these critical goods in Austria in high quality.

• The PREMIUM GROUP in Berlin is cancelling its PREMIUM and SEEK trade shows for this summer season, as well as the FASHIONTECH conference – in collaboration with the leading global digital B2B marketplace, JOOR, there is still a guaranteed trading option.

Due to the coronavirus crisis, in April the dates of the PREMIUM GROUP’s events were provisionally moved from the original schedule of 31 June-2 July 2020 to 28 -30 July. Now, the Federal and State governments have decided to cancel large-scale events with over 1,000 visitors until 31 August 2020.
     
A statement from Anita Tillmann, Managing Partner of the PREMIUM GROUP: 

“We greatly regret the decision of course, especially after the success of our January events. The ban on large-scale events has been around for some time and has been publicly discussed. It hurts us to do it, but we are also conscious of our responsibility. If cancelling our trade shows, conferences and parties contributes to the safety of our customers and visitors, then we have to take this step.
 
We are in close contact with all our brands and partners and have spent the last four weeks discussing possible approaches, concepts and new focal topics for the summer. The bottom line is that digitalisation is clearly the focus. It’s all about using the time over the next few months sensibly. The timing for brands and retailers is now right – all market participants are aware of the necessity of this.

We have been working closely with JOOR, the leading B2B marketplace globally, for around a year, after successfully integrating our own digital platform, Veee.com. JOOR has digitalised the entire procurement process and ensures a seamless, functioning wholesale process on an international scale – both for brands and retailers.
 
We shall shortly be offering webinars on this and can offer our customers an optimal, digital ordering solution so as to use this time of the pandemic efficiently. We are very happy with this option and our year-long investment in the topic of digitalisation. This has come good for us now.
 
Our trade show formats have been about more than just ordering for a long time now. They are about encounters, emotion, inspiration, communication and, finally, the fashion community getting together. Although lots can take place digitally nowadays, it doesn't replace physically meeting up in person. We have seen this more than ever in the present situation.
 
We are going to work on new concepts for 2021, and we will liaise with the key stakeholders in Berlin and with all others too to ensure we hit the ground running again. We’re taking on the challenge and will come back to the industry when we have news.”

• 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.

Within the context of a globally-networked textile industry, online services have become essential for maintenance, modernization and original parts procurement processes for machines and systems.
Here, the Oerlikon Manmade Fibers segment optimized the myOerlikon.com service portal for the products and services of its Oerlikon Barmag, Oerlikon Neumag and Oerlikon Nonwoven brands, making it more userfriendly. It allows customers to now access tailored services in nine different languages and around the clock.

Each and every machine park usually has numerous associated documents, ranging from manuals, circuit diagrams and 3D drawing-supported original parts catalogs, all the way through to operating instructions and final documents. myOerlikon.com bundles this information, while also providing users with additional communications on potential machine modernizations and upgrades and on special offers tailored to the respective production system.

Real security during virtual shopping
At the same time, users can access the myOerlikon.com e-commerce platform, which operates in parallel.
Customers can not only place orders here, they can also send online inquiries to Oerlikon, view prices and warehouse stocks and track inquiries,
quotations and orders already made or placed, among many other things. As a result of online access to original parts catalogs for the respective customer machines and systems, erroneous orders can be avoided.
Log-in is secure for users, as are all transactions carried out using the platform. With this, Oerlikon is implementing real security for all virtual purchases. All data exchanged is fundamentally
encrypted and hence protected against unauthorized access.