Rieter reports weaker demand for textile machinery

The Rieter Group has revised its expectations downward for the current financial year in light of the fact that the markets for textile machinery in particular are developing less favorably than previously expected. There are also signs of a more severe downturn in vehicle production in Rieter’s main markets. Based on current exchange rates, Rieter now foresees a significant decline in sales and a decrease in operating margins.

Rieter Textile Systems posted record figures for orders received, sales and operating earnings in 2007. However, demand has been weakening since the fourth quarter of 2007, and suffered a steep decline in March and April 2008. The main reason for this downturn is the currently subdued business outlook for Asian spinning mills. New orders received by Rieter Textile Systems in the first four months were therefore more than 50% lower than in the previous year. Since any substantial improvement is not expected to materialize before the end of 2008, sales are forecast to be significantly lower than previously envisaged, especially in the second half of the year. Rieter will therefore make appropriate adjustments in light of this situation.

Rieter generated sales of 3930 million CHF with some 15 000 employees worldwide in the 2007 financial year. The Textile Systems Division accounted for 1567 million CHF, the Automotive Systems Division for 2363 million CHF of this total.