Corporate News

Rational AG expects faster recovery after very good first half of 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

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

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

Landsberg am Lech, 5 August 2021

Rational AG has published its half-year report for 2021 today with the complete business figures for the first six months of 2021. Ahead of the report, the company had already published its sales revenue and earnings situation and announced an improvement in its annual forecast for sales revenues and earnings in an ad-hoc announcement on 22 July 2021.

"After a weak start to the fiscal year with low new orders and relatively poor economic and political prospects, the industry and we were surprised at how quickly the trend was reversed throughout. We believe that three key special effects contributed to this positive development in the mass catering sector," as the CEO of Rational AG, Dr Peter Stadelmann, explains.

The following effects were decisive in the Executive Board's view.

1. Catch-up effects: the opening 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 to prevent being caught out by potential supply shortages in the coming months.

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 first half of 2020 and only around 5 percent below the figure for the first half of 2019.

Positive development in all regions - Asia already back up to pre-crisis level
The positive impact was evident in all markets worldwide. The year-on-year growth rates ranged from 19 percent in the DACH region (Germany, Austria, Switzerland) to 43 percent in Asia. In Asia the worldwide market leader for combi steamers already exceeded the pre-crisis level by 18 percent in this period. The region DACH (-2 percent) was only just short of this level, while EMEA (-7 percent) and the Americas (-12 percent) still fall slightly short of the pre-crisis level of 2019. However, adjusted for the more volatile chain business, six-month sales revenues in the Americas are on a level with the first half of 2019.

iVario up by 51 percent - iCombi by 25 percent
Sales revenues in the iVario product group in the first three months of fiscal 2021 were 51 percent up year on year at 41.7 million euros (2020: 27.7 million euros). In addition to the recovery in Europe, the product group continued to benefit from the market launch of iVario last year in North America and China. "With the sale of the 50,000th multifunctional cooking unit, our Wittenheim subsidiary has reached an important milestone," says a delighted Dr Stadelmann. A few months ago, construction of a new plant with a customer centre and offices began in Wittenheim. In the iCombi product group, sales revenues were up 25 percent year on year in the first half of 2021, at 337.6 million euros (2020: 270.3 million euros).

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 a continuing lower cost level," as Jörg Walter, Chief Financial Officer of Rational AG, explains. 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).

Increase in the number of employees in the second quarter of 2021 for the first time since the crisis began
After Rational largely held on to its core workforce during the crisis and acted very cautiously in hiring new employees in recent quarters, the number of employees increased again at the end of the second quarter of 2021 for the first time since the beginning of the crisis. Vacant positions were filled, or new positions created particularly in production and product development.

The Rational Group had 2,186 employees worldwide as at the end of June 2021, compared with 2,180 at the end of 2020. Around 1,200 people were employed in Germany as at the balance sheet date.

15 to 20 percent rise in sales revenues and EBIT margin of slightly more than 20 percent expected for 2021 in the positive scenario
In recent months, Rational has seen an encouraging trend 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 already return, in full-year 2022, to sales revenue levels last seen in 2019," Dr Peter Stadelmann is confident. 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," Chief Financial Officer Jörg Walter adds.

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 always offer maximum customer benefit. 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