2.2 Restructuring and impairment
On October 17, 2024, Rieter initiated further restructuring measures as a reaction to the persistently difficult market conditions, the current economic downturn, the continued high interest rates and the lower economic growth in various markets relevant to Rieter reflected in its order intake. Rieter intends to relocate customer-oriented functions to its sales markets, combine resources and simplify processes. This includes provisions for the reduction of positions in overhead functions across the Group, primarily in Winterthur (Switzerland). The consultation processes initiated with the employee representatives were completed in November 2024. Restructuring costs in 2024 amount to CHF 6.5 million and consist primarily of personnel-related restructuring costs. This includes mainly severance payments and outplacement costs.
On July 19, 2023, Rieter launched the “Next Level” performance program aimed at strengthening sales excellence, sharpening customer focus, improving cost efficiency in production, and optimizing fixed cost structures. Measures defined in the “Next Level” performance program were implemented in 2023 and mostly concluded in 2024.
The restructuring charges directly associated with the “Next Level” performance program are summarized in the table below:
CHF million | 2023 |
|---|---|
Restructuring costs directly related to “Next Level” | – 44.7 |
Impairment losses on property, plant, and equipment directly related to “Next Level” | – 4.9 |
Restructuring charges directly related to “Next Level” | – 49.6 |
Restructuring costs directly related to the “Next Level” performance program in 2023 included personnel-related restructuring costs in the amount of CHF 28.8 million. This included mainly severance payments and outplacement costs. Impairment losses on property, plant, and equipment directly related to the “Next Level” performance program included the impairment loss on the right-of-use asset related to the leased office premises no longer used due to the closure of the Ingolstadt location.
The following table presents the operating result before interest and taxes (EBIT) of Rieter before and after restructuring and impairment:
CHF million | 2023 | 2024 |
|---|---|---|
Operating result before interest, taxes, restructuring, and impairment1 | 159.4 | 33.8 |
Restructuring charges directly related to “Next Level” | – 49.6 | – |
Other restructuring costs | – 3.9 | – 6.5 |
Other impairment losses on property, plant, and equipment | – 1.1 | – 1.1 |
Reversal of restructuring provisions | – | 1.8 |
Operating result before interest and taxes (EBIT)1 | 104.8 | 28.0 |
1The comparative period (2023) has been adjusted retrospectively as a result of the reclassification of the share in profit of associated companies from financial result to the operating result (see note 1.3).
In 2023, other restructuring costs consist of expenses directly related to the relocation of Rieter Automatic Winder GmbH, which was contractually agreed with the seller of the business. In 2024, total restructuring costs and total impairment losses on property, plant, and equipment amounted to CHF 6.5 million (2023: CHF 48.6 million) and CHF 1.1 million (2023: CHF 6.0 million) respectively.