Rieter Holding AG

Good morning, ladies and gentlemen. A warm welcome from my side. Thank you for joining us today to review Reuters' full year 2025 performance and discuss the strategic path ahead. Together with our CFO, Oliver Streuli, I will outline the key results of 2025, the progress of our transformation, our expectations for 2026 and beyond. Before I begin the presentation, let me draw your attention to the picture on the cover page. That reflects the new Reiter consisting not only of natural fibers, but also of man-made fibers. So let's move to the agenda on slide number two. We will briefly look at the key messages and review the market. I will then hand over to Oliver for a deep dive into the financials. Afterwards, we will take a more extensive look at the successful acquisition of Barmark, the medium-term financial guidance and the outlook for 2026. And now to the key messages on slide number four. Let me first start with the green boxes. 2025 was a year marked by cyclical weakness in the global spinning machinery market, influenced by geopolitical tensions, lower yarn margins and high volatility in investment sentiments. Against this backdrop, Riete delivered an order intake of 703 million Swiss francs, slightly below last year, but stable in local currencies. Sales declined to 685 million Swiss francs, reflecting the subdued market and the result of lower order intakes in the last years. Our operating EBIT reached 2.5 million Swiss francs, affected by lower volumes and pricing pressure, yet supported by active cost management and the early impact of our restructuring measures. Despite a challenging market, we preserved strategic flexibility, strengthened our portfolio and positioned the group for accelerated earnings recovery once demand normalizes again. Second, the blue boxes. The Asian countries delivered strong order intake. confirming the region's ongoing structural importance for our business model and long-term market presence. The most important structural development, of course, for the year was the successful acquisition of Barmark. a transformative step that expands our presence in the higher-growth man-made fiber market, enhances sales diversification across technology and end applications, adds scale, productivity levers, long-term synergy potential, and strengthens our market position in the long-term in the strategically important Asia region. The soft integration is progressing according to plan. We expect to realize medium term a minimum of 20 million Swiss francs in synergies, driven by portfolio consolidation, cross-selling, procurement efficiencies, and optimized production structures. One of the most significant regional developments was China. where sales increased by 32%. This growth was driven by a supportive investment environment, improved meal utilization, and strong domestic demand. With our efforts to create a local-for-local organizational setup, we were able to participate more than in the past in this strong market. Let's turn to the gray boxes. We continue to make tangible progress in sustainability and operational performance. The share of renewable energy used increased to 38.7% compared to 28.6% in 2024. Women in management positions rose to 20.1%, up from 15%. This was enabled by systematically embedding a focus on diversity into all human resources processes and across the entire employee lifecycle. We were also able to reduce occupational accidents to a frequency rate of 2.7 down from 3.3 in the prior year. This was thanks to the targeted safety trainings in the year under review. These developments support both our ESG commitments and the long-term stability of our operations. We now move to our group leadership team on slide number five. To capture the full potential of Barmak and the wider group, we strengthened our leadership team with Georg Stausberg, who now heads up the man-made fiber division. He brings deep industry expertise to this role and the whole combined company. This reinforced leadership setup provides the operational focus required for the successful integration, profitability improvement and long-term competitiveness. And now to the Reuters full year results 2025. Let me start with the global economic and textile key indicators on slide number seven. This slide shows the resilience of retail sales, which confirms that people are still shopping despite all of all the global uncertainty. Retail sales are particularly healthy still in Europe. A look at the capacity utilization of spinning mills, however, paints a slightly different picture. In the rest of the world, capacity utilization is down year on year, while it is relatively constant in China. India maintains a healthy capacity utilization level of 88%. And a word on the profitability of the spinning mills on slide number eight. Here you see the cotton margins in terms of Swiss francs per kilo on the left compared with polyester on the right. The spinners cotton margin is naturally very slim and has come under increasing pressure in the recent years due to labor shortages and rising costs. Low capacity utilization further weights on the margins. Whereas the rest of the world stays quite stable, but with low volumes, India and China have low margins, but high volumes. A similar picture you can also see on the polyester margins. So here, Barmak and Riete pursue the same vision of fully digitizing and optimizing the value chain underpined by strong sales and service networks, which in turn will help strengthen the margins. And now a deep dive into the market situation on slide number nine. The 2025 market developed unevenly across the different regions. The Americas showed a stable market environment overall, being more positive in Central and South America, but more cautious in North America. Rieter is very well positioned in this market and we see quite some growth prospects for the near future. EMEA includes Europe, Middle East and Africa with the main markets Turkey, Egypt, Uzbekistan and Pakistan. Whereas Turkey and Uzbekistan have still not recovered from the downturn, we see some market improvements in Egypt. Overall, we can support our customers with automation solutions and low energy consuming products to create an advantage in the conversion costs per kilogram yarn. India and a part of Southeast Asia is considered as ready for growth. The latest agreements between the US and India regarding tariffs and the free trade agreement between India and the European Union have given more planning security for our customers. With the strong meal utilization, several larger projects are now in the final planning phase. China has shown the highest resilience in the market over the last four years of downturn. Besides focusing on latest technology, which helps us, a clear investment plan by the central government supports this trend. Reiter has implemented a strong local organizational setup to match the Chinese requirements. And our growth in the biggest textile market indicates that we are following the right strategy. This concludes now my part of the presentation. And I hand over to Oliver Strohli, our CFO for the financials.

Thank you, Thomas. Good morning also from my side. I will now walk you through the key financial information for the full year 2025. Sales amounted to 685.1 million Swiss francs, a decrease of 20% compared to the prior year. Free cash flow came in at minus 40.6 million Swiss francs versus a positive 14.1 million Swiss francs in 2024. Order intake, as already heard, reached 703.4 million Swiss francs, down 3% year-on-year in Swiss francs. Despite the exceptionally low sales level, operating EBIT remains slightly positive at 2.5 million Swiss francs, but below last year's 33.9 million Swiss francs. Restructuring, transaction and impairment effects totaled 54.2 million Swiss francs, significantly impacting reporting EBIT free cash flow and leading to a net result of 63.4 million Swiss francs. thanks to ongoing strong cost discipline consisting of structural and temporary measures we were able to reduce overhead costs by another 61.3 million swiss francs compared to the prior year and lastly net liquidity improved to 184.3 million swiss francs supported by the capital increase ahead of the barma closing Now let's turn to order intake on slide number 11. Order intake decreased by 3% to 703.4 million Swiss francs. Machines and systems recorded a slight decline. Components softened quite a bit while aftersales delivered solid growth. FX translation headwinds weighed on reported figures. In local currency, order intake was slightly above prior year and overall we achieved a positive book to bill ratio when compared to sales which brings me to the next slide sales declined by 20 closing in at 685.1 million swiss francs this was driven by the continuously low market and certain customer driven referrals especially in december Machines and systems saw the steepest decline, followed by components. In contrast, aftersales remained relatively resilient in absolute terms. FX headwinds reduced sales additionally by about 2.5%. Regionally, China grew by 32%, clearly the highlight which underpins our local strategy. Americas was stable while in contrast, Turkey, Africa and several Asian markets where Reiter historically holds a strong market position declined sharply due to the subdued market. Now let us continue with the operating EBIT on page number 13. Operating EBIT remained around break-even at 2.5 million Swiss francs thanks to strict cost discipline. The negative gross profit impact of around 92 million Swiss francs due to the lower volume was largely offset by overhead savings. Now allow me the comparison to 2023, our last normal or good sales year. In total, we have now reduced our overhead costs by almost 120 million Swiss francs or by more than one third. which mitigates the continuously difficult market environment to some extent. Regarding non-operating EBIT and net income effects, restructuring and impairment costs total 37.8 million CHF and transaction-related costs, including financing, amount to 16.4 million CHF. For the sake of completeness, some real estate disposals, most prominently in half year one, as already communicated, also supported operating EBIT as part of streamlining our production and administrative footprint. Now let's turn to an update on the announced restructuring programs on slide number 14. As outlined in Q3 2025, we expect the announced measures to deliver a run rate benefit of around 27 million Swiss francs against one-time costs of around 36 million Swiss francs. These benefits are expected to fully hit the P&L in 2027. Now on to some details. On the short staple fibre division, as we newly call our natural fibre business, we implemented targeted capacity adjustments and shifted parts of the winder assembly to China. We also transferred repair services to Rieter India and Rieter Czech Republic and optimised the indirect to direct labour ratio across the supply chain in India, the Czech Republic and also China. We also optimize the cost structure in India, Czech Republic, China and in the US. In the components and technology division, we selectively transferred R&D and SG&A capacities to best cost countries and reduced the overall cost base. Several footprint adjustments were also executed, such as the sale of the Graf company Comitex in Belgium, the closure of Graf Netherlands with production moved to China, and finally we executed a plant consolidation in Germany at Sussen and initiated the closure of Brecker France at the beginning of this year. These measures significantly simplify our footprint and structurally reduce costs, marking another milestone in improving our overall competitiveness. Now on to cash conversion on slide number 16. Free cash flow reached minus 40.6 million Swiss francs, reflecting the negative net result and transaction and restructuring related cash outflows. Lower advance payments from customers also weighed on cash flow, while operating working capital improved to some extent through reductions in receivables and inventories, which was partly offsetting. Strong cash discipline obviously remains a key management priority also in this year. Now a word on our financial position on slide number 16, which is my favorite slide, but has to be taken with a pinch of salt, obviously given the pending bar mark closing at year end. Our financial position improved during the year and the equity ratio stood at 53.3% and the net liquidity reached a positive 184.3 million Swiss francs at year end. Which brings me to my last slide number 17 on liquidity headroom. Given a still muted market environment, debt levels will be elevated during the course of 2026, following the Barmer closing. However, it's important for me to state that available liquidity shows a combined liquidity of more than 300 million Swiss francs, which consists of current accounts, deposits and money market funds. On top, Rieter has access to a 375 million revolving credit facility and more than 100 million Swiss francs in bilateral credit lines. This means that our financing is fully secured and provides a sound base. This concludes the financial section. Back to you, Thomas.

Thank you, Oliver.