Notes to the consolidated financial statements

The consolidated financial statements have been prepared in accordance with the IFRS Accounting standards as issued by the International Accounting Standards Board (IASB).

The material accounting policies applied in preparing these consolidated financial statements are included in the respective notes. General types of material accounting policies are set out in note 8.8. These policies have been consistently applied to all the reporting periods presented unless otherwise stated. Changes in accounting policies are disclosed in note 8.7.

The consolidated financial statements are based on historical cost, with the exception of certain financial instruments and defined benefit plan assets which are measured at fair value.

The consolidated financial statements are presented in Swiss francs, the functional and presentation currency of Rieter Holding Ltd.

Financial reporting requires management to make estimates and exercise judgment in applying the Group’s accounting policies, both of which can affect the reported amounts of assets, liabilities, contingent liabilities, and contingent assets at the date of the financial statements, and reported amounts of income and expenses during the reporting period. These accounting estimates and judgments are periodically reviewed. During the year, Rieter updated the method used to estimate the inventory allowance by extending the historical consumption look back period from 24 to 36 months. The change reflects updated information indicating longer consumption cycles and improved predictive reliability. The change is accounted for as a change in accounting estimates and applied prospectively.

The areas involving significant accounting estimates and judgments are related to the accounting of the acquisitions in 2026 and 2024 (see notes 2.1 and 8.9) as well as the topics included in the following notes:

Significant pending transaction

On May 5, 2025, Rieter Holding Ltd. (Winterthur, Switzerland) signed a definitive agreement to acquire Barmag from OC Oerlikon at an upfront purchase price of CHF 713.4 million.

With this acquisition, Rieter strengthens and expands its technology position in the textile industry and positions itself in the growing market for man-made fibers. The transaction is fully in line with Rieter’s strategy and follows previous acquisitions, where Rieter complemented its portfolio in short-staple fiber machinery and expanded its footprint in components and machinery for man-made fiber production. The combined platform allows to leverage the recovery of global filament and short-staple fiber spinning markets and to reduce cyclicality due to diversification of end-markets. The acquisition will further enhance Rieter’s position in the important Asia-Pacific region and provide access to Barmag’s filament expertise, which will help to further scale Rieter’s own capabilities and improve digitization solutions and product sustainability.

Barmag comprises the established product brands Oerlikon Barmag, Oerlikon Neumag, and Oerlikon Nonwoven, which are providers of filament spinning systems used in the manufacturing of man-made fibers, texturing machines, Bulked Continuous Filament systems, staple fiber spinning, and nonwoven solutions and – as an engineering services provider – offers solutions along the textile value chain. In the financial year 2024, the company generated sales of CHF 734.0 million with around 2 600 employees.

The transaction values Barmag at an enterprise value of CHF 850.0 million. The enterprise value of CHF 850.0 million represents a through-the-cycle EV/EBITDA of 6.3x (excluding synergies). If certain financial criteria are achieved by 2028, an earn-out component of up to CHF 100.0 million will be paid to the seller. A maximum of CHF 36.8 million will be paid to the seller with respect to the future cash savings generated from the utilization of existing tax loss carry-forwards during a limited period of five years.

The acquisition financing was secured by a bridge loan facility of CHF 852.4 million from UBS. Refinancing the bridge facility happened through a fully underwritten CHF 400.0 million rights issue with tradable subscription rights, a CHF 77.4 million non-preemptive private placement, which was fully committed and subscribed by Rieter’s two largest shareholders and will happen through bank financing. The fully secured financing ensures the balance sheet stability of Rieter.

The acquisition of Barmag was closed on February 2, 2026.

The acquisition related transaction costs amounted to CHF 16.4 million, thereof CHF 8.6 million recorded in other expenses and CHF 7.8 million in financial expenses in the consolidated income statement 2025.

Significant past transactions

On January 5, 2024, Rieter Holding Ltd. (Winterthur, Switzerland) acquired 100 percent of the shares of Petit Spare Parts SAS (Aubenas, France). This entity is active in the business of spare parts for textile machines and employs ten full-time employees. The purchase price amounted to CHF 1.4 million. The acquired net assets primarily consist of inventories. No goodwill resulted from the acquisition.

On November 1, 2024, Rieter Holding Ltd. (Winterthur, Switzerland) acquired 11 percent of the shares of Prosino S.r.l. (Borgosesia, Italy), thereby increasing its investment to 60 percent. The company manufactures rings for spinning machines and had been a previous supplier of Rieter. Prosino S.r.l. employs 90 full-time employees. With the acquisition of Prosino S.r.l., Rieter has strengthened its portfolio of high-quality ring components, particularly spinning and twisting rings, which was allocated to the Components segment.

A further 10 percent of the shares were bought on January 1, 2025, and an additional 10 percent will be bought on July 1, 2026, at the same valuation as the initial transaction in 2024. For the remaining 20 percent of the shares, Rieter Holding Ltd. has a call option effective from January 1, 2027, while the seller is granted a put option effective from January 1, 2028. The exercise prices for the call and put options are based on an EBITDA multiple including a cap and a floor. The redemption amount for this part of financial liability has been determined considering these clauses. The maximum amount to be paid is EUR 4.4 million (CHF 4.1 million).

Under the anticipated-acquisition method the contract was accounted for as if the forwards (purchase obligations of 10 percent on January 1, 2025, and 10 percent on July 1, 2026) had been satisfied by the non-controlling shareholders and the put option (effective from January 1, 2028) had been exercised already. Accordingly, Rieter did not recognize a non-controlling interest in the consolidated financial statements and accounted for the business combination as if it had acquired a 100 percent stake. The respective forward and put liabilities for the remaining shareholding of 30 percent were recognized as financial liabilities in the consolidated balance sheet.

The purchase price of the shares amounted to EUR 2.2 million (CHF 2.1 million) and was settled against cash. The transaction resulted in goodwill of CHF 5.0 million. The goodwill is attributable to the acquired workforce and the complementary nature of the acquired business. It is not deductible for tax purposes. The acquired business contributed sales of CHF 1.4 million and a net result of CHF -0.1 million to the Group for the period from November 1 to December 31, 2024. If the acquisition had occurred on January 1, 2024, consolidated pro-forma sales and the net result for the year ended December 31, 2024, would have been CHF 866.3 million and CHF 12.1 million, respectively. These amounts were calculated based on the business results, adjusted by the differences in the accounting policies between Rieter and Prosino S.r.l., and by the additional depreciation and amortization that would have been charged assuming the fair value adjustments to inventories, property, plant, and equipment, and intangible assets had applied from January 1, 2024, together with the consequential tax effects.

The following table presents a breakdown of assets acquired and liabilities assumed at November 1, 2024:

There have been no adjustments to the purchase price allocation presented in the Annual Report 2024.

The identified intangible assets comprise the value of customer relationships (CHF 1.3 million) and the related brands and trademarks (CHF 0.9 million). The fair value of the acquired trade receivables amounted to CHF 0.9 million. The gross contractual amount of invoiced trade receivables was CHF 1.0 million, with a respective allowance of CHF 0.1 million recognized at the acquisition date.

Transaction costs of CHF 0.1 million relating directly to the acquisition were recognized as other expenses in the consolidated income statement 2024 as incurred in the second half of 2024.

On May 27, 2025, Rieter sold the land and buildings no longer required for operations at Klosterstrasse in Winterthur (Switzerland) to Töss Campus AG (Winterthur, Switzerland), an entity controlled by foundations related to Rieter. The transaction was conducted at a market value of CHF 15.7 million. The gain on the disposal of the land and buildings in Winterthur amounted to CHF 13.6 million and was internally reported as "Corporate".

Additionally, the Group sold land and buildings in the Netherlands and in Germany no longer required for operations. The transaction in the Netherlands was treated as a sale and leaseback transaction. The cumulative gain of these two transactions amounted to CHF 3.0 million and has been allocated to the Components segment.

The following table summarizes the effects of the disposals on the consolidated income statement 2025:

As a result of the persistently difficult market conditions and economic environment in various key markets, Rieter recorded a low order intake. In response to this development, Rieter initiated further restructuring measures. Rieter intends to relocate customer-focused functions to its sales markets, combine resources and simplify processes. The implementation of the respective measures started in the second half of 2024, continued in 2025, and will be concluded within the next twelve months. In 2025, restructuring costs (net) in the amount of CHF 33.6 million (2024: CHF 4.7 million) include mainly severance payments, outplacement costs and consulting costs directly related to the restructuring measures. In addition, impairment losses on property, plant, and equipment were recognized in the amount of CHF 4.2 million (2024: CHF 1.1 million).

Segment information is based on the Group’s organization and management structure and internal reporting to the Chief Operating Decision Maker up to the level of EBIT. The Chief Operating Decision Maker at Rieter is the Chief Executive Officer. Segment reporting is based on the same accounting policies as those used for the preparation of the consolidated financial statements. The Group consists of three reportable segments: Machines & Systems, Components, and After Sales. There is no aggregation of operating segments. Rieter Machines & Systems develops, produces and distributes machinery and systems used to convert natural and man-made fibers and their blends into yarns. Rieter Components supplies precision winding machines and technology components to spinning mills and textile machinery manufacturers. Rieter After Sales serves customers with spare parts, value-adding after sales services and solutions over the entire product life cycle.

The result that is not allocated to reportable segments includes all those elements of income and expenses that are not allocated on a reasonable basis to the other segments, such as certain costs of central functions and infrastructure (internally reported as “Corporate”).

No individual customer accounted for more than 10 percent of consolidated sales in 2025 and 2024. The greatest granularity available for products and product groups is segment level, which is reflected in the segment reporting shown above.

Revenue from sales of services is mainly incurred at Rieter After Sales.

Advance payments from customers at December 31, 2025 amounted to CHF 50.3 million (December 31, 2024: CHF 60.8 million). Of the advance payments at December 31, 2024, CHF 41.9 million were recognized as sales in 2025 and therefore included in the consolidated income statement 2025.

Material accounting policies

Rieter sells textile machinery and systems on a global scale. The respective customer contracts may include further elements such as installation. Installation is treated as a separate performance obligation due to the nature of the service rendered. Revenue from textile machinery and systems sales is recognized when control is transferred to the customer. In general, this happens at the point in time when products are handed over to the customer or its freight carrier based on contractually agreed terms (International Commercial Terms or Incoterms). Upon handover, the customer assumes physical control as well as significant risks and future rewards. Prior to delivery, Rieter ensures that machinery and systems comply with contractually agreed performance criteria. As a consequence, no significant unfulfilled obligations exist for Rieter upon handover, with the exception of installation. Installations are invoiced at the same time as the delivery of the machinery and systems, although the service is rendered at a later date. Revenue from installation services is therefore deferred as contract liability in the line item deferred revenue and is recognized in the period when the service is rendered (see note 4.7). The progress of the activities is determined based on accumulated working hours or expenses compared to total expected working hours or expenses (over time). Estimates of total expected working hours or expenses are adjusted in the event of changes. The effects of such adjustments are recognized in the respective period. The total selling price agreed in machinery and systems contracts (including discounts granted) is allocated to individual performance obligations based on relative stand-alone selling prices.

The Group also distributes technology components and spare parts for textile machinery and systems. Revenue from these products is recognized when control is transferred to the customer. In general, this happens at the point in time when products are handed over to the customer or its freight carrier based on the relevant contractually agreed terms (Incoterms). Upon handover, the customer assumes physical control as well as significant risks and future rewards.

In addition, Rieter offers a wide range of services and solutions over the entire life cycle of textile machinery and systems (e.g. mill assessments and preventive maintenance as well as upgrade and conversion packages). Revenue from such services rendered at customers’ machinery and systems is usually fixed and is recognized in the period when the service is rendered. The progress of the activities is determined based on accumulated working hours or expenses compared to total expected working hours or expenses (over time).

In the case of customers’ advance payments for goods or services, the respective contract liability is accrued separately in the line item advance payments from customers.

For receivables which are not covered by advance payments, the general payment term is normally between 30 and 60 days. Since payment terms of more than one year are not generally granted, customer contracts do not normally include any financing component.

The gain on existing interest in 2024 resulted from the revaluation of the investment in Prosino S.r.l. (Borgosesia, Italy) at fair value due to the increased interest in voting rights (see note 2.1 and 6.3).

Miscellaneous other income includes income that is not presented as sales, such as income from export incentive schemes and income from government grants. In 2024, this also includes a portion of the insurance compensation received for the earthquake in Türkiye in 2023 and the release of the environmental provision relating to the sold land and buildings in Ingolstadt (Germany) (see note 4.8).

Miscellaneous other expenses include expenses that are not directly linked to cost of sales, or which cannot be allocated to research and development expenses or selling, general, and administrative expenses. Such expenses include costs related to cancelled customer projects and losses from onerous customer contracts.

The operating result before interest, taxes, restructuring, impairment and transaction costs (Operating EBIT) is used by Rieter as an alternative performance measure. The table below contains a reconciliation of Operating EBIT:

Trade receivables are divided into the following major currencies:

For further information on credit risks, aging structure of trade receivables, and movements in the allowance for trade receivables, see note 8.5.

Material accounting policies

Trade receivables are initially recognized at their transaction price and subsequently measured at amortized cost, which is usually the original invoice value less an allowance for expected credit losses. The allowance for trade receivables is determined based on lifetime expected credit losses, which are calculated as the present value of expected cash shortfalls. Changes are recognized in the income statement as other income or expenses.

Other current receivables do not include any overdue or impaired items.

The allowance for inventories developed as follows:

Significant accounting estimates and judgments

When assessing the value of inventories, estimates of their recoverability are necessary. The recoverability of the respective items is based on the expected consumption. The allowance for inventories is calculated at item level using a range of coverage analysis. The assumptions used in this analysis are reviewed annually and modified if necessary. Changes in sales volumes, the production process, or other circumstances may result in carrying amounts having to be adjusted accordingly (see Note 1.2).

Material accounting policies

Raw materials, consumables, and trading goods are measured at the lower of average cost or net realizable value. Semi-finished and finished goods are stated at the lower of manufacturing cost or net realizable value. The net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Allowances on inventories are recognized for slow-moving items and excess stock.

No land and buildings are pledged as security for financial debt. At the end of 2025, open purchase commitments in respect of major investments in tangible fixed assets amounted to CHF 0.4 million (December 31, 2024: CHF 0.8 million).

Material accounting policies

Property, plant, and equipment are recognized at historical cost and depreciated on a straight-line basis over the estimated useful life. Depreciation of an asset starts when it is available for use. Historical cost also includes expenditure that is directly attributable to the acquisition. Useful life is determined based on the expected period of utilization of individual assets. The respective ranges are as follows:

Assets under construction that are not yet available for use, as well as land, are not depreciated. Value adjustments are recognized if required. Where components of significant assets have differing useful lives, these are depreciated separately.

All gains or losses arising from the disposal of property, plant, and equipment are recognized in the income statement. Cost related to repair and maintenance is charged to the income statement as incurred.

Investment grants received for capital projects are deferred and credited to the income statement on a straight-line basis over the expected useful life of the related assets.

Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are capitalized as a part of the acquisition costs of the qualifying asset.

For accounting policies in relation to right-of-use assets see note 8.3.

Software consists of capitalized cost for internally generated software. Brands and trademarks with a definite useful life include SSM, Accotex, Temco, Schlafhorst, Autoconer and Prosino. Technology consists only of capitalized costs for acquired technology in connection with acquisitions.

Significant accounting estimates and judgments

In the year under review, development costs in the amount of CHF 3.5 million have been capitalized (2024: none). In 2025, software in the amount of CHF 1.0 million has been capitalized (2024: CHF 0.9 million).

Material accounting policies

Intangible assets acquired from third parties such as product licenses, patents, trademark rights (brands), and customer relationships are recognized in the balance sheet at historical cost and are amortized on a straight-line basis over the expected useful life of up to 15 years. Rieter does not hold any intangible assets with an indefinite useful life.

Internally generated software is capitalized as intangible asset only if the costs can be measured reliably, the completion of the project is intended, and it can be demonstrated that the software project is technically and financially feasible and will generate a future economic benefit. All other costs associated with internally generated software are recognized in the income statement as incurred. Internally generated software is amortized over a period of up to five years.

The respective ranges of useful life are as follows:

Research and development activities focus on the expansion and improvement of Rieter’s product and service portfolio. Expenses related to research activities are recognized in the income statement as incurred. Expenditure in connection with development projects is capitalized as an intangible assets only if the costs can be measured reliably and it can be demonstrated that the project is technically and financially feasible and will generate a future economic benefit. Otherwise, the respective costs are expensed as incurred.

Goodwill resulting from business combinations represents the difference between the purchase considerations paid and the fair value of net assets acquired. Due to its indefinite useful life, it is subject to an impairment test performed at least on an annual basis.

For impairment testing, goodwill acquired through business combinations and brands with an indefinite useful life are allocated to the respective cash-generating unit (CGU) and monitored by management. Rieter tests whether goodwill and intangible assets with an indefinite useful life have suffered any impairment on an annual basis. For 2025 and 2024, the recoverable amount of the CGUs was determined on value-in-use calculations.

A segment-level summary of allocation of goodwill, the CGU, and the respective key assumptions used, are presented below:

Based on the performed impairment tests using the key assumptions mentioned above, there is no need for an impairment charge at December 31, 2025 and 2024.

Gross profit and cash flows depend on sales volume, sales growth and related cost of goods sold. The results of the impairment tests for Machines & Systems, SSM, Bräcker and After Sales confirm the carrying amount of the respective CGUs without an indication of impairment. No reasonably possible changes in key assumptions would cause the recoverable amount to equate to the carrying amount of goodwill.

Regarding Accotex and Temco, there is currently no indication of a long-term decrease in the market, the market share, or the profitability. Gross profit and cash flows depend on sales volume, sales growth and related cost of goods sold. The results of the impairment tests confirm the carrying amount of the CGUs without an indication for impairment, but showed only a small headroom for Accotex and Temco. Rieter performed sensitivity analyses in order to determine which reasonably possible changes in key assumptions would cause the recoverable amount to fall short of the carrying amount of goodwill.

The sensitivity analysis for Accotex showed that the recoverable amount would fall short of the carrying amount of Accotex if the pre-tax discount rate would be increased by 1.0 percentage points (2024: +2.0 percentage points), the sales volume growth would be reduced by 1.5 percentage points (2024: -3.4 percentage points), or the long-term sales growth rate would be decreased by 1.2 percentage points (2024: -2.2 percentage points). The recoverable amount of Accotex exceeds the carrying amount by CHF 3.6 million (2024: CHF 7.9 million).

The sensitivity analysis for Temco showed that the recoverable amount would fall short of the carrying amount of Temco if the pre-tax discount rate would be increased by 0.5 percentage points (2024: no reasonable change), the sales volume growth would be reduced by 0.6 percentage points (2024: no reasonable change), or the long-term sales growth rate would be decreased by 0.6 percentage points (2024: no reasonable change). The recoverable amount of Temco exceeds the carrying amount by CHF 2.2 million (2024: CHF 16.8 million).

Sales growth rates are calculated as compound average growth rate derived from the underlying business plans. Long-term sales growth rates are based on long-term inflation assumptions assuring rates are in line or below external market information provided by industry specialists. Pre-tax discount rates are determined on the basis of the weighted cost of capital using market participants information.

Significant accounting estimates and judgments

For the goodwill impairment test, Rieter uses financial plans for the next four years as approved by the Board of Directors and the Group Executive Committee. These plans are extrapolated to a period of five years. Management thereby makes assumptions related to sales growth rates and profit margins. Expected future cash flows are discounted with a market-specific discount rate.

Deferred revenue consists mainly of revenue for installations of machines and components at Rieter customer sites, which were invoiced already but have not yet been completed. Of the deferred revenue at December 31, 2024, CHF 19.6 million were recognized as sales and therefore included in the consolidated income statement 2025. Additional significant changes comprise services invoiced in 2025, which were either recognized as sales in 2025 or which are still included in deferred revenue at December 31, 2025. The majority of deferred revenue is recognized as revenue within twelve months. Miscellaneous current liabilities consist primarily of payables to customers, accounts receivable with a credit balance, and payables for VAT and social insurance.

Restructuring provisions cover legal and constructive obligations in connection with restructuring measures. In 2025, additional restructuring measures (see note 2.3) resulted in an increase in provisions of CHF 28.3 million. The respective obligations mainly include expected severance payments, outplacement costs and consulting expenses. The utilization of restructuring provisions relates to the additional restructuring measures launched in 2024 and 2025 (see note 2.3).

Personnel provisions include provisions for part-time arrangements for older employees, long-service awards, and other long-term benefits attributable to employees.

Guarantee and warranty provisions are recorded in the context of product deliveries and services and are based on past experience. Non-current warranty provisions are expected to result in outflows of resources in one or two years on average.

Environmental provisions contain obligations for site restoration associated with the disposal of land and buildings in Ingolstadt (Germany) in 2019 and in Winterthur (Switzerland) in 2022. The respective provisions are expected to be utilized in the years after 2026.

Rieter has recognized other provisions mainly for ongoing legal proceedings, for onerous contracts (where the unavoidable direct cost of performance exceeds the expected financial benefit), or for contracts with benefits linked to conditions that have to be fulfilled in the future (e.g. government grants). Non-current other provisions are expected to be utilized in the years after 2026.

Significant accounting estimates and judgments

In the course of the ordinary operating activities of Rieter, obligations can arise from restructuring measures, warranty claims, ongoing legal proceedings, site restoration, or onerous contracts. Provisions for the respective obligations are measured on the basis of expected cash outflows when accounts are drawn up. However, the outcome of the events mentioned above may result in claims against the Group that are higher or lower than the respective provisions and which are not – or only partially – covered by a relevant insurance benefit.

Material accounting policies

Provisions for restructuring, personnel, warranty claims, ongoing legal proceedings, site restoration, or onerous contracts are recognized if Rieter has a present legal or constructive obligation as a result of past events, it is probable that an outflow of economic resources will be required to settle the obligation, and the amount can be estimated reliably. Provisions are discounted if the impact is considered to be significant.

Rieter uses net debt and liquidity and free cash flow as alternative performance measures. Net debt and liquidity is calculated as follows:

Free cash flow consists of:

Material accounting policies

Cash and cash equivalents include bank accounts, investments in money market funds, and current time deposits with original maturities of up to three months.

On November 27, 2024, Rieter placed a fixed-rate bond amounting to CHF 70.0 million. This bond has a term of five years with a maturity date on November 27, 2029, a fixed interest rate of 3.5 percent p.a. and is listed on the SIX Swiss Exchange. The fair value of this bond amounted to CHF 70.0 million at December 31, 2025 (December 31, 2024: CHF 71.5 million). The effective interest expenses in the amount of CHF 2.5 million were charged to the income statement 2025 (2024: CHF 0.4 million). On November 25, 2021, Rieter issued a fixed-rate bond with a nominal value amounting to CHF 100.0 million. This bond has a term of six years with a maturity date on November 24, 2027, a fixed interest rate of 1.4 percent p.a. and is listed on the SIX Swiss Exchange. The fair value of this bond amounted to CHF 97.5 million at December 31, 2025 (December 31, 2024: CHF 98.0 million). The effective interest expenses in the amount of CHF 1.4 million were charged to the income statement 2025 (2024: CHF 1.4 million). On September 17, 2024, Rieter repaid the existing fixed-rate bond in the amount of CHF 75.0 million. The bond had a term of four years, a fixed interest rate of 1.55 percent and was listed on the SIX Swiss Exchange. The effective interest expenses were CHF 0.9 million in 2024.

By currency, financial debt is divided up as follows:

Financial debt changed as follows:

Material accounting policies

Financial debt is recognized initially at fair value, net of transaction costs incurred. Financial debt is subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the term of the obligation using the effective interest rate method. Contingent considerations for acquisitions are recognized at fair value. Contingent considerations are subsequently measured at fair value. Changes in the fair value of contingent considerations are recorded in the income statement. Financial debt is classified as a current liability, unless Rieter has a contractually agreed right to defer settlement for at least twelve months after the balance sheet date. For accounting policies in relation to lease liabilities, see note 8.3.

On September 18, 2025, the Extraordinary General Meeting (EGM) of Rieter Holding Ltd. approved a par value reduction of CHF 4.99 per share. The resulting amount of CHF 23.3 million was allocated to retained earnings. Simultaneously, the EGM approved a capital increase by means of issuance of 131 385 345 new shares via a subscription rights offering and a private placement. The net proceeds exceeding the par value of the newly issued shares in the amount of CHF 463.7 million were allocated to retained earnings. The transaction costs related to the capital increase have been deducted from the gross proceeds and are presented in equity.

The following table presents the calculation of basic and diluted earnings per share:

The basic and diluted earnings per share in 2024 have been restated to incorporate the bonus element arising from the rights issue offering executed in September 2025.

The dividend paid in 2025 amounted to CHF 9.1 million and was distributed from retained earnings (2024: CHF 13.5 million). Based on the financial statements of Rieter Holding Ltd. at December 31, 2025, the Board of Directors proposes to the Annual General Meeting not to distribute a dividend.

The table below summarizes the dividend payout ratio of the financial years 2025 and 2024:

Material accounting policies

Earnings per share are calculated by dividing net profit attributable to Rieter Holding Ltd. shareholders by the average number of shares outstanding. Diluted earnings per share additionally take into account the effects of the potential dilution as if all rights relating to the long-term incentive plan (see note 7.3) were to be exercised.

In 2025, Rieter increased its stake in Prosino S.r.l. (Borgosesia, Italy) from 60 percent to 70 percent, following an increase from 49 percent to 60 percent in 2024. Under the anticipated-acquisition method Rieter does not recognize a non-controlling interest for this business combination (see note 2.1). In 2024, Rieter Holding Ltd. also purchased share capital of Rieter India Pvt. Ltd. with a nominal value of INR 0.2 million (CHF 0.0 million), acquiring the remaining non-controlling interests. Furthermore, Rieter Ltd. sold 30 percent of Rieter Textilsystemen LLC (Tashkent, Uzbekistan) to an external investor, resulting in a non-controlling interest of 30 percent.

Material accounting policies

Net profit or loss and each component of other comprehensive income are attributed to the shareholders of Rieter Holding Ltd. and to the non-controlling interests in subsidiaries, even if this results in a deficit balance of non-controlling interests.

In 2025, Rieter sold the subsidiary Gomitex S.A. (Stembert, Belgium). The sale had an insignificant effect on the consolidated financial statements 2025. Furthermore, the subsidiary SSM Vertriebs AG (Steinhausen, Switzerland) was merged with SSM Schärer Schweiter Mettler AG (Wädenswil, Switzerland). In addition, the subsidiary Wilhelm Stahlecker GmbH (Suessen, Germany) was merged with Spindelfabrik Suessen GmbH (Suessen, Germany) and Rieter Deutschland GmbH & Co OHG (Ingolstadt, Germany) with Rieter Vertriebs GmbH (Ingolstadt, Germany).

In 2024, the subsidiary Rieter Management AG (Winterthur, Switzerland) was merged with Maschinenfabrik Rieter AG (Winterthur, Switzerland), which in turn changed its name to Rieter Ltd. (Winterthur, Switzerland). Moreover, the subsidiary Hogra Holding AG (Freienbach, Switzerland) was merged with Tefina Holding-Gesellschaft AG (Zug, Switzerland). Furthermore, Rieter Ingolstadt GmbH (Ingolstadt, Germany) was merged with Spindelfabrik Suessen GmbH (Suessen, Germany). Additionally, Rieter acquired Petit Spare Parts SAS (Aubenas, France, see note 2.1). As part of a reorganization, Changzhou Rieter Textile Machinery Trading Co., Ltd. (Changzhou, China) was incorporated as a subsidiary of Rieter China Textile Instruments Co. Ltd. (Changzhou, China). Rieter also increased its interest in voting rights in Prosino S.r.l. (Borgosesia, Italy) from 49 percent to 60 percent, changing from equity accounting to full consolidation (see note 2.1).

Material accounting policies

The consolidated financial statements comprise the financial statements of Rieter Holding Ltd. and its subsidiaries (or Group companies) at December 31, 2025. Subsidiaries are all entities over which Rieter has control. Control is achieved when Rieter is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to Rieter. They are deconsolidated from the date that control ceases.

Intercompany transactions and balances as well as unrealized gains on transactions between Group companies are eliminated. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those of the Group.

The table below summarizes the development of investments in associated companies:

Rieter holds 25 percent of the share capital and the voting rights of Electro-Jet S.L. based in Gurb (Spain). Until October 31, 2024, investments in associated companies also included the investment of 49 percent in Prosino S.r.l. incorporated in Borgosesia (Italy). On November 1, 2024, Rieter increased its interest in voting rights in Prosino S.r.l. (Borgosesia, Italy) from 49 to 60 percent, changing from equity accounting to full consolidation. As a consequence of the change to full consolidation, the existing investment of 49 percent was revalued at a fair value of CHF 9.2 million, resulting in a gain of CHF 3.3 million. The revaluation gain on the existing investment is presented in the consolidated income statement in other income (see note 3.3). Aside from the revaluation gain, the effects of the associated companies on the consolidated financial statements were insignificant.

In 2025, Rieter purchased products from associated companies with a total value of CHF 4.5 million (2024: CHF 14.1 million). The respective open trade payable balances at December 31, 2025, were interest free and amounted to CHF 1.0 million (December 31, 2024: CHF 0.1 million). In addition, Rieter sold products to associated companies with a total value of CHF 0.0 million in 2025 (2024: CHF 0.1 million). At December 31, 2025 and 2024, Rieter had no open trade receivables out of these sales.

Rieter’s total share in profit of individually immaterial associated companies resulted from continuing operations. The share in other comprehensive income was insignificant.

Material accounting policies

Associated companies are entities over which Rieter has significant influence, generally through a shareholding of between 20 and 50 percent of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize Rieter’s share in profit or loss of associated companies after the date of acquisition.

Defined contribution plans

The expense for defined contribution plans amounted to CHF 3.6 million in 2025 (2024: CHF 3.9 million).

Defined benefit plans

Defined benefit plans in accordance with IAS 19 exist mainly in Switzerland and Germany.

In Switzerland, the Group contributes to several pension plans, all of which are funded. One of these is a collective fund that administrates the pension plans of Group companies and unrelated companies. Plan participants are insured against the financial consequences of old age, disability, and death. The amount of risk benefits provided by the plans in the event of disability or death depends on the insured salary of the employee. Life-long retirement benefits are calculated by multiplying the individual retirement savings capital at the date of retirement by the conversion rate defined and guaranteed in the plan’s regulations.

The plans are administered by independent and legally autonomous foundations under government supervision. The pension plans’ most senior governing body (board of trustees) comprises an equal number of employee and employer representatives.

All material risks (financial and actuarial risks) are borne by the foundations. These risks are monitored on an ongoing basis and addressed by the board of trustees. If a plan is underfunded, the board of trustees has to perform an overall assessment of the financial situation, identify the reasons for the deficit, and decide on appropriate measures to eliminate the shortfall.

Pursuant to the Swiss Federal Law on Occupational Retirement, Survivors’, and Disability Pension Plans (BVG), the trustees of the foundations are responsible for the definition and the execution of the investment strategy. The investment strategy defined by the trustees aims at aligning the plan assets and liabilities in the medium and long term.

In Germany, the Group operates several pension plans, thereof three funded and six unfunded. German pension arrangements are governed by the German Occupational Pensions Act (BetrAVG). The employer is required by German law to increase pension payments every three years according to price inflation, as measured by the Consumer Price Index (“Verbraucherpreisindex – VPI”) or according to comparable pay grades. In the case of unfunded pension plans, the Group pays the pensions of retired employees directly from its own financial resources. Funded pension plans are administered through a Contractual Trust Agreement (CTA), where the assets are outsourced to an independent entity (e.g. a trust), that has the sole purpose of financing, paying out and ensuring benefits. The transferred assets are completely segregated from the employer’s assets to protect these assets against risk of employer insolvency. The employer is free to determine the scope and kind of assets that are transferred to the trust and used to fund the pension liabilities. No minimum funding requirements or regular funding obligations apply to a CTA. Based on a special trust agreement between the employer and the trust, the trust acquires legal title in the transferred assets, while the economic ownership rests with the employer. Through creation of a CTA, the employer ensures additional insolvency protection for the beneficiaries.

The status of defined benefit plans was as follows:

The defined benefit plan obligations changed as follows:

Past service costs are related to restructuring measures described in note 2.3. The weighted average duration of the defined benefit plan obligations is 11.0 years (2024: 11.5 years).

The fair value of defined benefit plan assets developed as follows:

The total result on plan assets was CHF 108.9 million in the year under review (2024: CHF 83.3 million). The Group expects employer contributions in the amount of CHF 8.0 million to its defined benefit plans in 2026.

The major categories of plan assets were as follows:

At the end of 2025, plan assets included no Rieter Holding Ltd. bonds (December 31, 2024: none). No Rieter shares were held at the end of 2025 and 2024. Cash equivalents (e.g. money market instruments), equity instruments and 53 percent of the debt instruments have a quoted market price on an active market. Real estate and other assets, which include private equity investments, do not usually have a quoted market price.

The impact of the asset ceiling developed as follows:

Expenses recognized in the income statement for the defined benefit plans include:

Remeasurements of defined benefit plans recognized as other comprehensive income contain:

Main actuarial assumptions used at year-end are:

The global interest rate levels remain volatile. After a decrease in 2024, in particular long-term interest rates increased again in 2025 by 0.3 percentage points.

The measurement of the defined benefit plan obligations is particularly sensitive to changes in the discount rate and the assumptions regarding future pension growth. The table below shows the potential impact of a change of 0.5 percentage points in the discount rate and a change of 0.5 percentage points in the assumed future pension growth rate on the defined benefit plan obligations:

A change in the assumption of future wage growth rate by 0.5 percentage points would impact defined benefit plan obligations by less than 1 percent (same as 2024).

The sensitivity analysis above considers the change in one assumption while leaving the other assumptions unchanged. Interdependencies were not taken into account.

Significant accounting estimates and judgments

Defined benefit plans require actuarial calculations in order to determine defined benefit plan obligations. These calculations are based on assumptions such as discount rates, future trends in wages and pensions as well as the employee share in the costs of the future benefits. Statistical data such as mortality tables and staff turnover probability rates are also used to calculate defined benefit plan obligations. If these parameters change, actual future results can deviate from the actuarial calculations. Such deviations can have an effect on the defined benefit plan obligations.

Material accounting policies

Employee benefit plans are operated by certain subsidiaries, depending upon the level of coverage provided by government post-employment benefit facilities in the respective countries. Such employee benefit plans exist on the basis of both defined contributions and defined benefits.

Contributions to defined contribution plans are recognized as personnel expenses in the period in which they are incurred.

For defined benefit plans, the benefit plan obligation is determined using the projected unit credit method, with valuations being carried out by independent actuaries, usually at the end of each year. The present value of the defined benefit plan obligation less the fair value of the defined benefit plan assets is recognized in the balance sheet as a liability. When the calculation results in a potential asset, the respective defined benefit plan asset recognized is limited to the present value of the economic benefits available in the form of reductions of future contributions to the plan (asset ceiling). Remeasurements of the net defined benefit plan assets and liabilities, which comprise actuarial gains and losses, the return on defined benefit plan assets (excluding interest), and the effect of the asset ceiling, are recognized immediately as other comprehensive income. Contributions by employees are recognized as a reduction of service cost in the period in which the related service is rendered.

Net interest on the net defined benefit plan assets and liabilities is determined by applying the discount rate used to measure the defined benefit plan obligation at the beginning of the year. Service cost and net interest are recognized as personnel expenses.

The members of the Board of Directors can choose whether to receive all or part of their remuneration in Rieter shares. In the context of their remuneration for 2025, two members of the Board of Directors received in total 62 345 shares on January 19, 2026. The cost of CHF 0.3 million was charged to the consolidated income statement 2025. On January 17, 2025, four members of the Board of Directors received in total 5 868 shares in connection with their remuneration for 2024. The market value of the shares granted was CHF 0.5 million and was charged to the consolidated income statement 2024. The shares are taken from treasury shares of Rieter Holding Ltd. and cannot be sold for three years.

In the context of the variable remuneration for 2025, the members of the Group Executive Committee will not receive any Rieter shares as the pre-condition for variable remuneration has not been fulfilled. In the context of the variable remuneration for 2024, the members of the Group Executive Committee received 14 913 shares with a market value of CHF 1.3 million on April 1, 2025. The respective cost of CHF 1.3 million was charged to the consolidated income statement 2024. These shares are taken from treasury shares of Rieter Holding Ltd. and cannot be sold for three years.

Rieter operates an incentive plan for the members of the senior management (excluding the members of the Group Executive Committee). In January 2024, it was decided that a defined percentage of the existing short-term incentive will be settled by transferring it to the new incentive plan. In the context of the incentive plan for 2025, the participants in the long-term incentive plan will not receive any shares since the pre-condition for variable compensation has not been fulfilled. In the context of the long-term incentive plan for 2024, the participants received Rieter shares with a market value of CHF 2.1. million in April 2025. The respective cost of CHF 2.1 million was charged to the consolidated income statement 2024. The shares are taken from treasury shares of Rieter Holding Ltd. and cannot be sold for three years.

The previous long-term incentive plan, granting the participants rights to receive a certain number of Rieter shares free of charge or to receive cash compensation in the amount of the same number of shares at the market price after three years, expired on May 4, 2025.

The movement of the outstanding rights was as follows:

In 2025, the expiration of the long-term incentive plan resulted in an income in the amount of CHF 0.1 million affecting the income statement (2024: CHF 0.1 million). There was no liability recognized in the balance sheet at December 31, 2025 (December 31, 2024: CHF 0.4 million).

Material accounting policies

Rieter uses share-based awards in the context of the compensation of the members of the Board of Directors, the Group Executive Committee, and senior management. The plans are equity settled share based payment awards.

Share-based payments are measured at fair value at the grant date and recognized in the consolidated income statement over the vesting period. For share-based payments that are settled with equity instruments, a corresponding increase in equity is recognized.