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Introduction & Market Context
Rieter Holding AG (SWX:RIEN) presented its Investor Update 2025 on October 22, highlighting the company's performance through the first nine months of 2025 and strategic initiatives amid challenging market conditions. The textile machinery manufacturer's stock fell 7.91% following the presentation, as investors reacted to declining sales figures and reduced full-year guidance.
CEO Thomas Oetterli and CFO Oliver Streuli detailed how macroeconomic turbulence has strongly impacted market sentiment after what had been a promising first quarter of 2025. The company is navigating significant headwinds across most regions while pursuing strategic initiatives in automation and acquisition integration.
As shown in the following overview of Rieter's current market situation across different regions:
Quarterly Performance Highlights
Rieter reported order intake of CHF 559.3 million for the first nine months of 2025, representing an 11% decline from the same period in 2024. More concerning was the 22% drop in sales to CHF 457.7 million. Despite these declines, management highlighted that the book-to-bill ratio remained above 1.0 for the period, suggesting potential revenue stabilization in future quarters.
The quarterly view of order intake shows some improvement when excluding exceptional orders from Chinese customer DIW in 2024:
A detailed breakdown of the order intake decline reveals that the Machines & Systems division experienced the largest drop in local currencies (-49.1 million), followed by Components (-19.6 million), while After Sales showed growth (+16.8 million). Currency effects further reduced order intake by CHF 18.6 million:
The sales decline was similarly broad-based across divisions, with Machines & Systems experiencing the steepest drop:
Barmag Acquisition Progress
A significant focus of the presentation was Rieter's progress on the Barmag acquisition, which the company views as a strategic growth driver. Management reported that the acquisition is proceeding according to schedule, with regulatory approvals expected by the end of 2025.
The company successfully completed what it described as "the largest public equity raise relative to market cap in Switzerland ever," with 97% approval at the Extraordinary General Meeting and 99% take-up in the rights issue. Additionally, Rieter secured CHF 750 million in syndicated credit facilities with Swiss and international lenders, fully refinancing the bridge facilities.
The regulatory approval process is advancing with filings completed in China, Egypt, and Türkiye, while approvals have already been secured in India and Portugal:
Strategic Initiatives
Rieter is placing significant emphasis on automation as a key strategic initiative to address market challenges and position for future growth. The company presented its vision for a fully automated spinning mill, which aims to dramatically reduce the number of operators required from 20 to just 3 by ITMA 2027.
The company's automation roadmap shows progressive reduction in human operators:
At the upcoming ITMA Asia exhibition in Singapore (October 28-31, 2025), Rieter will showcase three new automation solutions:
Beyond product innovation, Rieter outlined structural changes to enhance agility and supply chain excellence. These initiatives include relocating functions to markets, optimizing the supply chain, improving production footprint, and simplifying organizational structure to reduce complexity and manage costs more effectively.
Regional Performance Disparities
Rieter's performance varied significantly across regions, revealing both challenges and opportunities. China emerged as a bright spot with sales growing 13% to CHF 133.5 million, while North and South America increased 16% to CHF 89.1 million, and Europe grew 11% to CHF 40.5 million.
However, these gains were more than offset by steep declines in Türkiye (-72% to CHF 27.8 million) and Africa (-75% to CHF 11.3 million). Asian countries excluding China and India fell 30% to CHF 85.3 million, while India declined 16% to CHF 70.2 million.
The company noted that China continues to benefit from positive investment sentiment for the domestic market and government support for western territories. Several large projects have been signed in both China and India, with increasing demand for automation solutions in both markets.
Forward-Looking Statements
Rieter adjusted its full-year outlook downward, now expecting sales of around CHF 700 million for 2025, compared to the previous guidance of CHF 750-800 million mentioned in recent earnings reports. The operating EBIT margin is anticipated to be at the lower end of the 0-4% range.
The company disclosed several factors that will impact profitability, including transaction costs of approximately CHF 15 million related to the Barmag acquisition, significant additional restructuring costs, and net financial expenses of around CHF 20 million. As a result, Rieter expects its 2025 net result to be negative:
Despite these near-term challenges, management emphasized its commitment to innovation and strategic positioning for future growth. The company's vision of "Rieter in every spinning mill" and mission to provide "leading technology for fiber processing" underpin its long-term strategy, with targets including customer excellence (NPS > 50), becoming a top industry employer (eNPS > 60), achieving solid financial performance (EBIT 4-8%), and reaching net zero emissions by 2040.
As Rieter navigates this challenging period, investors will be closely watching whether its automation strategy and the Barmag acquisition can deliver the growth needed to offset current market headwinds.
Full presentation:
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