Rieter (RIEN) H1 2024 earnings summary

Executive summary

• Order intake rose 24% year-over-year to CHF 403.4 million, driven by strong demand in China, India, and Turkey, while sales declined 44% to CHF 421.0 million due to a low prior-year order backlog and weak textile demand impacting consumables and spare parts.

• EBIT margin reached 2.1% (CHF 8.9 million), supported by strict cost management and the "Next Level" performance program, though net profit dropped 87% to CHF 1.7 million.

• Free cash flow was negative at CHF -1.1 million, mainly due to restructuring and performance program outflows.

• The order backlog remained stable at CHF 640 million as of June 30, 2024, providing six to nine months of visibility.

• Innovation and automation, including the J 70 air-jet spinning system and ROBOspin, drove customer interest and new orders.

Financial highlights

• Gross profit margin improved by five percentage points year-over-year to 29.0%, despite a 33% decline in absolute gross profit to CHF 122.2 million.

• EBITDA was CHF 35.7 million, down from CHF 52.2 million year-over-year.

• Net debt decreased to -CHF 243.9 million, aided by reduced operating net working capital.

• Equity ratio increased to 31.9%, up 3.1 percentage points due to favorable currency impacts.

• Liquid funds stood at CHF 99.5 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 sales are expected between CHF 900 million and CHF 1 billion, with a positive EBIT margin of 2%-4%.

• Second-half sales are projected at CHF 480 million-CHF 580 million, with margin improvement expected from higher volumes.

• Order intake is anticipated to increase in the second half, especially in China and India, supporting a solid start to 2025.