Rational AG expects faster recovery after very good first half of 2021

Landsberg am Lech, 22 July 2021

- Sales revenues of 212 million euros in the second quarter of 2021 - slightly above pre-crisis level

- EBIT margin of 22 percent in the first six months - 25 percent in the second quarter of 2021

- In the positive scenario 15 to 20 percent rise in sales revenue and EBIT margin of slightly more than 20 percent expected for 2021

- Surprisingly faster and stronger recovery throughout the industry - return to above pre-crisis level possible in 2022 already

Sales revenues of 212 million euros in the second quarter of 2021 - slightly above pre-crisis level
Rational's sales revenues of 211.6 million euros in the second quarter of 2021 were 3 percent up on the figure in the second quarter of 2019 (205.1 million euros), hence slightly exceeding pre-crisis levels. That was 81 percent higher than in the prior-year quarter, which was very weak due to the coronavirus pandemic (2020: 116.8 million euros). After six months, sales revenues stand at 379.3 million euros, up 27 percent on the previous year and only around 5 percent below the figure for the first half of 2019.

From management's perspective, three key factors contributed to this positive development in the commercial kitchen sector.

1. Catch-up effects: the opening up of the catering sector in most countries and the start of the tourist season prompted investments and led to the completion of projects launched earlier.

2. State aid programmes: in many cases, state aid measures were used for the investments. Due to the limited duration of these programmes, investments were brought forward in some countries

3. Delivery times: because of the tight supply situation worldwide, dealers and customers bought appliances for stock in order to avoid being caught out by potential supply shortages in the coming months.

The positive impact was evident in all markets worldwide and in both of Rational's product groups.

EBIT margin of 22 percent in the first six months - 25 percent in the second quarter of 2021
The gross margin improved to 56.3 percent in the first half of 2021 (2020: 54.7 percent). EBIT (earnings before financial result and income taxes) amounted to 84.4 million euros in the first six months of 2021 - three times the level recorded in the first half of 2020 (2020: 27.6 million euros). The EBIT margin was 22.3 percent (2020: 9.2 percent).

The EBIT margin benefited from the healthy sales revenue performance in combination with continuing lower cost levels. While sales revenues rose by 27 percent year-on-year, operating costs were only slightly up on the prior-year level. Total operating costs amounted to 131.1 million euros in the first half of 2021 (2020: 130.7 million euros).

In the positive scenario 15 to 20 percent rise in sales revenue and EBIT margin of slightly more than 20 percent expected for 2021
In recent months, Rational has seen a pleasing performance in almost all markets around the world. CEO Dr Peter Stadelmann believes that whether the recovery of the first six months of 2021 continues will critically depend on two factors.

Firstly, there is the question of whether tighter restrictions will once again be imposed on daily life in response to new coronavirus outbreaks. The second factor is the supply situation for primary products. The current situation in the global market is very tense, especially for electronics components, and considerable supply delays and volume restrictions may persist, leading to longer delivery times and later revenue recognition. What is more, the tense supply situation is in some cases leading to dramatic increases in component prices and shipping costs.

If the scenarios described above have a negative effect on business performance in the second half of the year, the Executive Board expects slower business growth with higher costs. Given the positive development of the first six months and the high level of orders on hand, it expects sales revenue to increase by a high single-digit percentage compared with the previous year, even in this less favourable scenario. If the above risks do not materialise, or only to a reduced extent, sales revenues are expected to rise by 15 to 20 percent in the 2021 fiscal year. If the recovery trend continues, it could be feasible to return, in full-year 2022, to sales revenue levels last seen in 2019. The company had previously expected this to not be until 2023. Since costs are projected to move in line with sales revenues, the EBIT margin is forecast to be just above 20 percent, regardless of which scenario plays out.

On August 5, 2021, Rational will provide detailed information on the course of the first half of the year and further expectations for the remainder of fiscal year 2021 with the 2021 half-year report and in a conference call.

Contact:

Rational Aktiengesellschaft

Stefan Arnold / Head of Investor Relations
Tel. +49 (0)8191 327-2209
Fax +49 (0)8191 327-72 2209

E-mail: ir@rational-online.com
www.rational-online.com

Editorial note:

The Rational Group is the global market and technology leader for thermal preparation of food in professional kitchens. Founded in 1973, the company employs around 2,200 people, over 1,200 of whom are in Germany. Rational was floated in the Prime Standard of the German stock market in 2000 and is currently represented in the MDAX.

The company's principal objective is to offer maximum customer benefit at all times. Rational is committed to the principle of sustainability, which is expressed in its corporate policies on environmental protection, leadership, job security and social responsibility. Numerous international awards bear witness to the high quality of the work done by Rational's employees year for year.

Editorial closing date: 22 July 2021