The industrial group Rieter generated bad numbers in 2019 and is now reducing almost 180 jobs worldwide. The assembly of machines will be abandoned at the headquarters in Winterthur. As a result, 87 jobs will probably be cut in Winterthur, as Rieter announced on Wednesday. The company currently has 980 employees in Switzerland.
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Cost-cutting measures, including job cuts, are also planned at locations in Germany, Holland and the Czech Republic. The company had already cut around 5 percent of its workforce last year.
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The background is a “reluctance to invest” on the part of customers. In 2019, sales decreased by 29 percent to CHF 760.0 million. Order intake increased, but primarily because of a single major order. The management speaks of an overall “low order intake”, which will also lead to a decline in sales and earnings in the first half of 2020.
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Big minus in Turkey
The reasons for the reluctance of customers are the trade conflict between the United States and China, overcapacity in the spinning mills and political and economic uncertainties in regions that are important for Rieter, the report continued. This applies to Turkey, for example, where sales slumped by a whopping 57 percent.
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Rieter will not publish the exact winning numbers until March 10th. Nevertheless, fairly precise information is already given. The operating profit margin (EBIT) is expected to be around 11 percent and the net profit margin to be around 7 percent. This should result in a net profit of over CHF 50 million. However, this key figure was significantly influenced by a special effect. As is well known, the sale of a factory area in Ingolstadt in Germany, which is no longer needed, is known to have cost around 60 million euros. Without this effect, red numbers would have resulted.
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Nevertheless, Rieter wants to invest. The company hopes to start building the so-called “Rieter Campus” in Winterthur this year. This includes a new customer and technology center and an administration building.
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