rieter.com

Almost 100% of Rieter shareholders' options exercised

Tue, 02 Jun 2009 19:00:00 +0200

11 shareholders’ options entitled the holder to purchase one new Rieter registered share at a price of 120 CHF during the exercise period. 389'307 new Rieter registered shares were purchased up to the end of the exercise period at 12.00 CET on May 29, 2009. This corresponds to 99.98% of the total. This transaction has further reinforced the capital base of Rieter Holding Ltd. with an inflow of 46.7 million CHF. For further information, please contact:

Rieter Holding Ltd.
Investor Relations
Urs Leinhäuser
Chief Financial Officer
T +41 52 208 79 55
F +41 52 208 70 60
investor@who-needs-spam.rieter.com

Rieter Management AG
Media Relations

Peter Grädel
Head Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@who-needs-spam.rieter.com

Annual General Meeting of Rieter Holding Ltd.

Wed, 29 Apr 2009 18:00:00 +0200

The Annual General Meeting of Rieter Holding Ltd. was attended by 1184 shareholders. They adopted all motions proposed by the Board of Directors and formally approved the annual report, the annual accounts, the consolidated financial statements for 2008 and the actions of the Board of Directors and the Group Executive Committee in the 2008 financial year. The meeting elected Dr. Jakob Baer to the Board of Directors for a further three-year term of office and elected Michael Pieper, This E. Schneider, Hans-Peter Schwald and Peter Spuhler as new members of the Board of Directors. Dr. Ulrich Dätwyler, Dr. Rainer Hahn and Dr. Peter Wirth retire as directors on April 29.

Board of Directors stipulates terms of issue for shareholders’ options

At a meeting already held on April 29, 2009, prior to the Annual General Meeting, the Board of Directors stipulated the terms of issue for shareholders’ options, which were then announced at the conclusion of the Annual General Meeting, i.e. after the stock markets had closed. Options will be issued to shareholders free of charge in lieu of a dividend payment. Holders of Rieter shares on May 5, 2009, will be given the opportunity to purchase Rieter shares on attractive terms. The exercise terms have been stipulated as follows by the Board of Directors:

one shareholder’s option will be allotted free of charge for each registered share
11 shareholders’ options entitle the holder to purchase one share at a preferential price
the price of a new share is 120 CHF (this corresponds to a discount of rather more than 30% compared with the closing price on April 28, 2009: 172.6 CHF)
the exercise period commences on May 5, 2009, and ends on May 29, 2009, at 12.00 noon
the shareholders’ options will be listed and traded on the SIX Swiss Exchange

For further information, please contact:

Rieter Holding AG
Investor Relations
Urs Leinhäuser
Chief Financial Officer
T +41 52 208 79 55
F +41 52 208 70 60
investor@rieter.ch

Rieter Management AG
Media Relations

Peter Grädel
Head Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@who-needs-spam.rieter.com

Rieter sells Rieter Real Estate Ltd.

Wed, 01 Apr 2009 07:30:00 +0200

The sale of this wholly owned subsidiary is a further step in the context of Rieter’s restructuring program and will enable the company to concentrate on its core activities. Rieter Real Estate Ltd. pursues three business activities:

management of its own property portfolio
management of residential properties for the Rieter pension fund and third parties
facility management for Rieter companies and third parties

Rieter Real Estate Ltd. has 22 employees and manages some 1000 apartments and various industrial properties in the Winterthur area. Fur further information please contact:

Rieter Management AG
8406 Winterthur
Peter Grädel
Head Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@rieter.com
www.rieter.com

Rieter Board of Directors nominates new members

Tue, 24 Mar 2009 07:10:00 +0100

Michael Pieper is owner of the Franke Group (Aarburg), a globally active industrial corporation specializing in kitchen systems. He heads up this company as CEO. Via his holding company Artemis IV AG (Hergiswil), Michael Pieper owns 7.6 percent of the Rieter share capital. This E. Schneider is Board delegate and CEO Forbo Group (Baar), a global leader in flooring, bonding and movement systems. Forbo holds more than 10 percent of the Rieter share capital. Hans-Peter Schwald, Partner with Staiger, Schwald & Partner Lawyers, Zurich, is a corporate lawyer with long-standing experience as board member with various industrial corporations, including the Stadler Group. Peter Spuhler is majority shareholder of Stadler Rail AG, an internationally active manufacturer of rail vehicles headquartered in Bussnang, Thurgau. He heads up this company as Chairman of the Board and CEO. Via his finance company PCS Holding AG (Weiningen), Peter Spuhler holds about 17 percent of the Rieter share capital.
All four of these candidates for election to the Board have extensive industrial experience. With their expertise in the strategic realignment of large corporations and in market globalization, they will certainly play an important role in shaping the future of Rieter.

Ulrich Dätwyler and Peter Wirth will not stand for re-election to the board on completing their term of office at the Annual General Meeting 2009. Ulrich Dätwyler has been a member of the Rieter Board of Directors since 1994, and vice-chairman since 2007. During these fifteen years he has played a key role in Rieter Group development thanks to his long-standing industrial experience and international accounting know-how. Peter Wirth has been a board member since the year 2000. His expertise in global production strategies has benefited above all Rieter’s strategic expansion in Asia. Rainer Hahn, board member since 1999, has decided to step down per date of the Annual General Meeting 2009. His valuable services to Rieter during these ten years are largely attributable to his extensive know-how in the machine-building and automotive supply industries. The Board of Directors sincerely thanks these three departing members for their many years of service and outstanding commitment. This particular applies to the business year 2008, which involved some far-reaching decisions for the future of Rieter. Fur further information please contact:

Rieter Management AG
8406 Winterthur
Peter Grädel
Head Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@rieter.com
www.rieter.com

2008 annual results impacted by global recession – loan agreement signed – shareholder options instead of dividend payment

Tue, 24 Mar 2009 07:00:00 +0100

Download the pdf The 2008 financial year for the Rieter Group bore clear traces of the consequences of the global economic downturn. After achieving record figures in the previous year’s more favorable economic climate, Rieter recorded significantly lower orders received, sales, operating result and net result in the year under review. The Rieter Group has to cope with a drop in demand that is unprecedented in its intensity and rapidity. For the first time, both divisions – the textile machinery and the automotive component supply business – are affected simultaneously. Rieter therefore already launched an extensive restructuring program in summer 2008 in order to adjust to the new structural and cyclical conditions prevailing on the market. In the textile machinery business a significant slowdown on the world market started in spring 2008, and this continued and intensified in the second half of the year. Rieter’s automotive component supply business was affected by the crisis in the American automobile industry and the slowdown in economic activity in Europe, especially in the second six months. Despite the difficult overall economic conditions, Rieter succeeded in maintaining its market position in both divisions and even expanding it in Latin America. Both Rieter divisions have a global presence and a broad basis in terms of their products and customer relationships. This strategic position had always enabled diverging cyclical influences to be balanced in previous years. In 2008 the economic downturn affected for the first time all important markets of the Rieter Group at the same time. Steep, market-related decline in orders received and sales
The adverse effects of market trends resulted in a steep decline in orders received and sales by the Rieter Group. The trend in new orders received was attributable primarily to the drop in order intake at the Textile Systems Division. Consolidated sales declined less steeply (– 20%) than orders received and totaled 3 142.5 million CHF (3 930.1 million CHF in 2007). This was due to the high level of orders in hand for textile machinery with which Rieter started 2008, and a proportionately smaller decline in sales by Automotive Systems. Exchange rate movements had a negative impact on the development in group sales amounting to some three percentage.

Earnings trend depressed by structural and cyclical factors
The Rieter Group’s operating result before interest and taxes was adversely affected by several factors in 2008. While higher raw material and energy costs, upfront inputs for developing new markets and the cost of initial restructuring measures primarily accrued in the first six months, the massive decline in production volumes at both divisions was an additional burden on the earnings trend in the second half of the year. In order to align its operations with the structural and cyclical changes in the market, Rieter launched an extensive restructuring program. This necessitated expenditures totaling 237.7 million CHF, which were charged to the consolidated financial statements for 2008. Before special charges, interest and taxes, the Rieter Group posted an operating result of 22.4 million CHF. As a consequence of these restructuring measures and impairement charges on goodwill of 96.8 million CHF, the operating result before interest and taxes (EBIT) showed a loss of 312.1 million CHF – after a record outcome in the previous year (operating profit of 278.7 million CHF in 2007). Extensive action to increase earnings
Rieter has considerable experience in dealing successfully with pronounced market cycles and reacted promptly and rapidly to the downturn. However, in face of the steep, market-related decline in volumes, particularly in the second half of the year, the action taken was only partially able to reduce the volume-related decline in earnings in 2008. These measures are being implemented systematically in both divisions. They include the utilization of flexible working-time models, short-time working at locations in Europe and North America, and a worldwide reduction in employee numbers in order to adjust the workforce to lower order volumes. In addition, Rieter has initiated plant closures and structural adjustments in the USA and in Spain, Germany, Italy and France. At the end of 2008 the Rieter Group employed a workforce of 14 183 worldwide, some 9% less than at the end of the previous year. Rieter also terminated the employment contracts of some 1 500 temporary employees; these jobs are not included in the workforce totals stated above. Rieter therefore already reduced employee numbers by more than 2 800 in 2008, equivalent to some 16% of the total workforce. With its restructuring programs and transfers of manufacturing facilities Rieter is not only responding to the structural changes in both sectors, but is also reacting to the cyclical downturn. The cost-cutting action is being complemented by price discipline and selective increases in product prices in order to compensate for cost inflation. Net result
In addition to cyclical effects, the disruptions on the financial markets also exerted a strong influence on the development in net result. Following many years of good performance, Rieter posted negative financial results in the year under review. Together with special charges this resulted in a net loss of 396.7 million CHF (net profit of 211.5 million CHF in 2007).

Dividend canceled
Rieter Holding Ltd. has reported profits and paid substantial dividends to its shareholders by way of participation in the company’s success from its incorporation in 1985 until the 2007 financial year. In light of the difficult earnings situation at both divisions and the subdued outlook for the current year the Board of Directors will propose to the Annual General Meeting of Rieter Holding Ltd. on April 29, 2009, that no dividend should be paid for the 2008 financial year (15.00 CHF in 2007), in the interests of preserving capital. Instead of a dividend this year, shareholders will receive options for purchasing Rieter registered shares. They will be financed by contingent share capital of up to 396‘312 shares – corresponding to max. 9.2% of ordinary share capital. No AGM resolution is required for this shareholder-friendly measure. The Board of Directors will announce the respective conditions (term, strike price) at a later date.

Rieter Textile Systems: steep decline in orders received
The trend of business at Rieter Textile Systems in 2008 was dominated by a cyclical downturn on the world market for textile machinery of an intensity and rapidity that had not been experienced by the industry for decades. Orders of 539.5 million CHF received by Textile Systems were 68% lower than in the record year of 2007 (1 703.1 million CHF); this was also due in part to postponements of orders. The weakening effectiveness of government incentive programs, a cyclical decline in fiber consumption in major sales markets such as the USA and more difficult financing conditions caused a rapid fall in customers’ tendency to invest. Domestic demand in India and China was unable to offset this decline. Orders received by Rieter Textile Systems for staple fiber machinery since March 2008 have been substantially lower than in previous years.
While the sales trend at Textile Systems in the first six months continued to benefit from the high level of orders in hand at the beginning of the year, the low volume of orders and delays in the acceptance of machines by customers in the second half of the year had a distinctly negative impact. The division’s sales of 1 120.4 million CHF for the year as a whole were 28% lower (1 566.8 million CHF in 2007). However, in this difficult business environment Rieter succeeded in maintaining its leadership in the market segments served by Textile Systems. The operating result before special charges, interest and taxes amounted to 41.3 million CHF, equivalent to 4.1% of corporate output (200.7 million CHF and 13.1%, respectively, in 2007). This figure includes the gain of 2.6 million CHF on the disposal of the pelletizing machinery business in the first half of year. Special charges comprise restructuring costs of 42.7 million CHF and impairement charges on goodwill amounting to 48.1 million CHF. Due substantially to the steep decline in volumes, which resulted in inadequate capacity utilization, and to the restructuring program, the operating result before interest and taxes (EBIT) declined steeply, especially in the second half of 2008. Following the record figure of 200.7 million CHF in the previous year, Rieter Textile Systems posted an operating loss of 49.5 million CHF for the 2008 financial year.

Rieter Automotive Systems: downturn in the second half of the year
While high fuel prices in conjunction with cyclical and structural problems in the automobile industry already resulted in a significant reduction in vehicle output in North America in the first half of 2008, as of autumn the downturn also affected manufacturers in Europe and South America, and to a lesser extent in Asia. The automotive component supply industry, which has struggled for years with severe pressure on prices and margins, was additionally confronted with a massive drop in production volumes. In this adverse competitive environment Rieter Automotive Systems succeeded in maintaining its market position in its main markets of Western Europe and North America and expanding in Asia by virtue of its broad-based customer portfolio and its innovative product offering. In the second half of the year the automotive division also managed initial volume production start-ups of aerodynamic underfloor modules incorporating the innovative Rieter Ultra Silent technology. This new product’s unique lightweight structure enables significant reductions in vehicle CO2 emissions to be achieved.
Following years of steady growth, sales of 2022.1 million CHF by Rieter Automotive Systems in the year as a whole (2 363 million CHF in 2007) were 10% lower in local currencies (– 14% in nominal terms) as a consequence of the market turbulence.
As a result of the marked drop in volumes in the second half of the year and the burden of sharply higher raw material, energy and transport costs in the first half, the operating result before special charges, interest and taxes declined to -7.3 million CHF. The operating result before interest and taxes (EBIT) was also depressed by a radical restructuring program to adjust capacity, including plant closures and transfers of manufacturing facilities to low-cost locations (195.0 million CHF), as
well as impairement charges on goodwill (48.7 million CHF). Rieter Automotive Systems therefore posted an operating loss of 251.0 million CHF (operating profit of 91.6 million CHF in 2007).

Sound balance sheet and secure financing
Rieter remained on a good financial foundation at the end of the year under review with an equity ratio of 36% (48% in 2007) and low net debt of 37 million CHF (net liquidity of 145 million CHF in 2007). Cash and cash equivalents at year-end amounted to 283 million CHF (258 million CHF in 2007), despite the dividend payment to shareholders and the share buyback program, which was, however, suspended in the spring of 2008.
In mid-February 2009 Rieter also announced the sale of Rieter shares to Peter Spuhler’s PCS Holding AG. Together with the announcement in mid-February that an agreement in principle (term sheet) had been signed with a group of banks with a view to securing or expanding existing credit lines, finance is therefore available for the ongoing business and the restructuring program announced by Rieter.

Developing future markets
At the same time as launching a comprehensive restructuring program with the priority goal of taking rapidly effective action to adapt to the cyclical problems in the market environment, Rieter undertook important strategic steps for the long-term development of the business in the 2008 financial year. The divisions’ strategy of following customers into new markets has not been called into question by current market developments, although capital investment has been cautious. Rieter Textile Systems continues to see considerable potential for the future in the populous markets of India and China, in which the largest yarn manufacturing capacity worldwide is installed. The division is thus continuing to pursue the strategy of expanding its presence in these markets. Rieter Automotive Systems invested in new locations where major customers are installing manufacturing facilities, such as Eastern Europe and Asia. The division is making vigorous efforts to adjust its network of production sites to the structural changes in the industry worldwide.

Innovations for the further development of the business
In the 2008 financial year Rieter promoted product development in both divisions in order to maintain its strong market position and to be able to exploit the next cyclical upswing with attractive offer-ings. At Rieter Textile Systems the air-jet spinning machine presented in the previous year proved its qualities in operations at initial customer mills. This machine enables good quality yarns to be produced for a wide range of textile end products at much lower cost than with existing spinning processes. Rieter Automotive Systems worked intensively on further applications of the novel Rieter Ultra Silent fiber material. Rieter Ultra Silent products meet several requirements of modern automotive engineering at the same time – weight saving, recyclability, and indirectly CO2 reduction – and are thus attracting considerable interest from customers.

Share buyback program
Rieter Holding Ltd will prematurely terminate per March 24, 2009 the share buyback program launched on September 7, 2007 during the course of which 167'800 registered shares or 3.77% of the Rieter share capital were bought back. All repurchased shares have already been eliminated by resolution of the Anual General Meeting 2008.

Outlook
2009 will be a challenging year for Rieter, since the prospects for both the automotive and the textile machinery industry are very subdued and highly uncertain due to the global recession. Rieter expects declining demand in both divisions, and will therefore continue with capacity reductions and cost saving measures accordingly. Nevertheless, operating losses must be reckoned with in both divisions. Maintaining a sound balance sheet and adequate liquidity are therefore top priorities. In the medium term Rieter believes that demand will increase at both Textile Systems and Automotive Systems in line with global trends. As market leaders with an innovative product portfolio, both divisions are very well positioned to benefit from the next upswing.
For further information, please contact:

Rieter Holding AG
Investor Relations
Urs Leinhäuser
Chief Financial Officer
T +41 52 208 79 55
F +41 52 208 70 60
investor@rieter.ch

Rieter Management AG
Media Relations

Peter Grädel
Head Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@who-needs-spam.rieter.com

Key Figures

CHF million	2008	2007	Change in %
Rieter Group
Orders received	2 561.6	4 066.4	– 37
Sales	3 142.5	3 930.1	– 20
Corporate Output¹	2 971.7	3 822.8	– 22
Operating result before special charges, interest and taxes	22.4	286.8
• in % of corporate output	0.8	7.5
Operating result before interest and taxes (EBIT)	– 312.1	278.7
• in % of corporate output	– 10.5	7.3
Net result	– 396.7	211.5
• in % of corporate output	– 13.3	5.5
Cash flow²	– 102.4	360.2
• in % of corporate output	– 3.4	9.4
Investments in tangible fixed assets and intangible assets	140.9	203.5	– 31
Total assets	2 088.9	2 847.4	– 27
Shareholders’ equity before appropriation of profit	746.2	1 369.5	– 46
Number of employees at year-end³	14 183	15 506	– 9

Divisions
Sales Textile Systems	1 120.4	1 566.8	– 28
Operating result before special charges, interest and taxes Textile	41.3	200.7
• in % of corporate output Textile Systems	4.1	13.1
Sales Automotive Systems	2 022.1	2 363.3	– 14
Operating result before special charges, interest and taxes Automotive	– 7.3	99.7
• in % of corporate output Automotive Systems	– 0.4	4.3

Rieter Holding Ltd.
Share capital	21.4	22.3
Net profit	2.9	67.4
Gross distribution	0.0	57.1
Number of registered shares, paid-in	4 283 056	4 450 856
Average number of registered shares outstanding	3 822 929	4 092 265	– 7
Price per share (high/low) CHF	505/151	717/478
Number of registered shareholders on December 31	8 519	7 091	20
Market capitalization on December 31	650.9	1 965.7	– 67

Data per registered share
Earnings per share CHF	– 106.18	48.19
Equity (group)⁶ CHF	181.25	332.86	– 46
Gross distribution (Rieter Holding Ltd.) CHF	0.0	15.00

1 Sales, adjustments for sales deductions and own work capitalized and changes in inventories of
products manufactured by the company (cf. Annual Report page 38).
2 Net profit plus depreciation and amortization (cf. Annual Report page 72).
3 Excluding apprentices and temporary employees.
4 Proposed by the Board of Directors (cf. Annual Report page 87).
5 Source: Bloomberg.
6 Shareholders’ equity attributable to shareholders of Rieter Holding Ltd. per share outstanding at
December 31. All statements in this report which do not refer to historical facts are forecasts for the future which offer no guarantee whatsoever with respect to future performance; they embody risks and uncertainties which include – but are not confined to – future global economic conditions, exchange rates, legal provisions, market conditions, activities by competitors and other factors which are outside the company‘s control.

Loan agreement signed

Fri, 20 Mar 2009 16:53:00 +0100

Rieter and a group of banks today concluded a loan agreement for medium- and longer-term financing. With the signing of this agreement the sale of 420 000 Rieter shares to PCS Holding AG, Weinigen (Switzerland), which was announced on February 16, 2009, has been executed. PCS Holding AG is wholly owned by Peter Spuhler. For further information, please contact:

Contact for financial analysts:

Urs Leinhäuser
Chief Financial Officer
T +41 52 208 79 55
F +41 52 208 70 60
investor@rieter.com

Contact for the media:

Peter Grädel
Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@who-needs-spam.rieter.com

Term sheet on financing concluded

Tue, 17 Feb 2009 07:30:00 +0100

In addition to securing and expanding existing credit lines for the ongoing business, this term sheet also establishes the financial preconditions for implementing the restructuring program already announced by Rieter. Rieter and the participating banks intend to sign a loan agreement based on this term sheet in the coming weeks. For further information, please contact:

Contact for financial analysts:

Urs Leinhäuser
Chief Financial Officer
T +41 52 208 79 55
F +41 52 208 70 60
investor@rieter.com

Contact for the media:

Peter Grädel
Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@who-needs-spam.rieter.com

PCS Holding AG raises participation in Rieter above 15%

Mon, 16 Feb 2009 07:30:00 +0100

PCS Holding acquires these shares at a price about CHF 136 each, based on the 20-day average price as per 11.2.2009 plus block sale premium. These transactions, bringing Rieter Holding Ltd. around 57 million CHF cash inflow in total, make a significant contribution to Rieter’s financing in a difficult economic environment. PCS Holding, 100% owned by Peter Spuhler, underlines with this increase in Rieter stockholding its ongoing confidence in successful prospects not only for Rieter itself, but also for Switzerland as an important industrial work place. Peter Spuhler upholds thereby his earlier declaration that Rieter’s solid strategic positioning and good prospects of an upswing in the Rieter share price fully justify this financial investment. Rieter expressly welcomes Peter Spuhler’s stockholding increase as a long-term financial engagement.

Contact persons for further information:

Rieter Holding Ltd. Investor Relations	Rieter Managment AG Media Relations	PCS Holding
Urs Leinhäuser Chief Financial Officer T +41 52 208 79 55 F +41 52 208 70 60 investor@who-needs-spam.rieter.com	Peter Grädel Corporate Communications T +41 52 208 70 12 F +41 52 208 72 73 media@who-needs-spam.rieter.com	Tim Büchele Media Officer T +41 71 626 31 57 F +41 71 626 20 28 tim.buechele@who-needs-spam.stadlerrail.ch

Decline in 2008 orders received and sales; leading market position maintained in both divisions

Fri, 30 Jan 2009 07:00:00 +0100

2008 Orders Received & Sales (English/PDF/271 KB) As a consequence of the financial crisis and the global economic downturn the declining trend of business in the first half of 2008 continued and intensified in the final six months of the year. In the 2008 financial year Rieter experienced a decline in demand that was unprecedented in its intensity and rapidity and for the first time affected both the textile machinery and the automotive supply business simultaneously. The development in orders received was attributable primarily to the drop at the Textile Systems Division. The 20% decline in consolidated sales to 3 142.5 million CHF (3 930.1 million CHF in 2007) was less steep than that in new orders. This was due to the high level of orders in hand in the textile machinery business with which Rieter had started 2008, and a proportionately smaller decline in sales at Automotive Systems. Currency translation effects had a negative impact of some 3 percentage points on the development of group sales. Despite the difficult overall economic environment Rieter succeeded in maintaining – or in certain regions even improving – its market position in both divisions. Rieter continued working on innovations at both divisions in the 2008 financial year in order to exploit its strong market position in the next cyclical upswing and expand it further with attractive products.

Textile Systems: strong decline in orders received

The trend of business at Rieter Textile Systems in 2008 was dominated by a cyclical downturn on the world market for textile machinery that had not been experienced by the industry for decades. The causes of this downswing were structural and cyclical. The dynamic expansion of the spinning industry in 2006 and 2007, especially in the principal markets of India, China and Turkey, had led to a boom in investment. This had also been driven by government incentive programs and resulted in yarn production capacity which significantly exceeds nearterm demand. The weakening effectiveness of these investment incentives, combined with a cyclical decline in fiber consumption in major sales markets such as the USA and more difficult credit conditions caused a rapid fall in customers’ tendency to invest. Orders received by Rieter Textile Systems for staple fiber machinery since March 2008 have been substantially lower than in the previous year. There was also a decline – even though less pronounced – in the market for technology components, which is generally more consistent than that for machinery. Demand for wear and tear components remained healthy. Orders of 539.5 million CHF received by Textile Systems were 68% lower than in the record year of 2007 (1 703.1 million CHF). This was also due in part to cancelations of orders placed in the previous year. Most orders came from China, followed by smaller markets, such as Kazakhstan, Bangladesh, South Korea and Brazil, but these were by no means able to compensate for the reduction in order intake from large markets such as India and Turkey.

While the sales trend at Textile Systems in the first six months continued to benefit from the high level of orders in hand at the beginning of the year, the low volume of orders and delays in the acceptance of machines by customers in the second half of the year had a distinctly negative impact. The division’s sales revenues of 1 120.4 million CHF for the year as a whole were 28% lower (1 566.8 million CHF in 2007). However, in this difficult business environment Rieter succeeded in maintaining its leadership in the market segments served mainly by Textile Systems. In 2008 first customers successfully started production with Rieter’s latest spinning innovation air-jet.

Automotive Systems: downturn in the second half of the year

Global automobile production as a whole was lower for the first time in years. In 2008 it declined from 70.3 million to 68.5 million vehicles. While in North America high fuel prices, in conjunction with cyclical and structural problems suffered by the automotive industry, already resulted in a sharp fall in vehicle production in the first half of 2008, autumn saw the downswing also affecting manufacturers in Europe, Asia and South America.

Annualized production declined by 16% in North America and by more than 7% in Western Europe, particularly steeply in the fourth quarter. Since these are Rieter’s main markets, this reduction could only be offset in part by deliveries in the emerging markets in Eastern Europe and Asia. The trend in these markets was positive in 2008, but was no longer as dynamic as in earlier years.

The market for heavy commercial vehicles, where Rieter Automotive generates some 10% of its sales, dropped later, but even more severely than that for passenger cars. All the major commercial vehicle manufacturers recorded massive reductions in output as of mid-2008, also in the Asian growth regions.

After years of steady growth, sales of 2 022.1 million CHF by Automotive Systems in the year under review were 14% lower (2 363.3 million CHF in 2007). Exchange rate movements had a significantly negative impact on currency translation. Sales expressed in local currencies were some 10% lower.

In this difficult business environment Rieter Automotive succeeded in maintaining its market position in its main markets Western Europe, North America and in the emerging markets by virtue of its broad-based customer portfolio and its innovative product offer. Rieter supplied the first components based on the newly developed Rieter Ultra Silent technology.

Outlook for 2008 results

As announced in December, Rieter will report a slightly positive operating result before special charges, interest and taxes in 2008. Rieter responded early and rapidly to the looming economic crisis and the market-related decline in volume. The restructuring program launched in August 2008 will lead to special charges of some 250 million CHF. Its goal is to adjust capacity to the distinctly lower volumes, to intensify extensive streamlining measures and to speed up transfers of operations from traditional to emerging regions. Impairment charges on goodwill amounting to some 100 million CHF are also necessary. The disruption to the financial markets will have a marked impact on financial results and thus also on group results.

The Rieter Group’s final results for 2008 will be published at the presentation to financial analysts and the results press conference scheduled for March 24, 2009, in Winterthur.

Annual General Meeting on April 29, 2009

The 2009 Annual General Meeting will be held in Winterthur on April 29, 2009. Any proposals regarding the agenda must be submitted in writing to Rieter Holding Ltd., Office of the Group Secretary, P.O. Box, CH-8406 Winterthur, Switzerland, by February 23, 2009, at the latest, including the relevant motions and evidence of the necessary shareholdings (par value of 0.5 million CHF in conformity with Art. 699 of the Swiss Code of Obligations and §9 of the Articles of Incorporation).

Presentation for investors
You will find a presentation regarding order intake and sales in 2008 under Reports at Investor Relations.

Contact for financial analysts:	Contact for the media:
Urs Leinhäuser Chief Financial Officer T +41 52 208 79 55 F +41 52 208 70 60 investor@who-needs-spam.rieter.com	Peter Grädel Corporate Communications T +41 52 208 70 12 F +41 52 208 72 73 media@who-needs-spam.rieter.com

All statements in this report which do not refer to historical facts are statements related to the future which offer no guarantee with regard to future performance; they are subject to risks and uncertainties including, but not limited to, future global economic conditions, exchange rates, legal provisions, market conditions, ctivities by competitors and other factors outside the company’s control. The 2008 figures have not yet been audited.

Information on the trend of business

Mon, 08 Dec 2008 17:24:00 +0100

03Textile Systems

No signs of a recovery in the markets are currently apparent at the Textile Systems Division. On a current view, orders received and sales in 2008 must be expected to decline by some 65% and 30%, respectively, compared with the previous year. Operating profit before special charges will also be correspondingly lower than was being forecast up to now.

Automotive Systems

At Automotive Systems the turmoil on the automobile markets in recent weeks has resulted in a significant reduction in delivery requests by customers, for both passenger cars and trucks. While demand and output by the automobile industry in North America had already declined in the first half of 2008, manufacturers in Europe, Asia and South America have since also been affected by the global economic downturn. Rieter therefore foresees a decline in sales of more than 15% in 2008 compared with the previous year and a significant reduction in operating profit before special charges compared with estimates to date.

Restructuring measures

Rieter already responded in summer to the emerging signs of an economic downturn and launched an extensive restructuring program. This mainly comprises capacity adjustments and the transfer of manufacturing operations, and is being resolutely implemented in both divisions. In addition to the restructuring program already initiated, further measures are being implemented faster in order to adjust the costs to the declines in volume at both divisions. This includes short-time working at many Automotive and Textile sites in Europe and North America as well as redundancies worldwide, including both temporary and permanent personnel. The restructuring projects are being accompanied by significant reductions in capital expenditures and action to lower working capital.

Outlook for the group

Rieter expects consolidated sales in 2008 to be more than 20% lower and operating profits to be significantly reduced compared with the previous year’s figure. The restructuring program will entail total expenditure of some 250 million CHF. In addition impairment charges on goodwill amounting to some 100 million CHF will have to be recognized. The disruptions on the financial markets will depress financial results. In light of the unsettled markets as a consequence of the financial crisis no forecasts can yet be made for 2009. For further information, please contact:

Contact for financial analysts:

Urs Leinhäuser
Chief Financial Officer
T +41 52 208 79 55
F +41 52 208 70 60
investor@rieter.com

Contact for the media:

Peter Grädel
Corporate Communications
T +41 52 208 70 12
F +41 52 208 72 73
media@who-needs-spam.rieter.com