Corporate News

RATIONAL AG: sales revenues stabilise at lower level - reliable forecast not possible for fiscal year 2020

- Sales revenues down 24 percent in 2020 after nine months - decrease of 21 percent in the third quarter

- EBIT margin of 14 percent after nine months - 22 percent in the third quarter

- None of the otherwise usual positive year-end effects expected - major uncertainty persists

- Forecast not possible for fiscal year 2020 - long-term outlook remains positive
 

Rational AG / keyword(s): 9-month figures
Landsberg am Lech, 27 October 2020

RATIONAL AG generated sales revenues of 168.2 million euros in the third quarter of 2020, 21 percent less than in the prior-year quarter (213.2 million euros). Sales revenues increased significantly when compared with the second quarter of the current fiscal year (116.8 million euros, 43 percent down on the prior-year quarter). "The reasons are a relaxation of coronavirus restrictions in many markets, the positive trend of the summer business among many of our customers and not least the launch of the new product generations, iVario and iCombi", explains CEO Dr Peter Stadelmann.

In the first nine months, this translated into sales revenues totalling 466.3 million euros (2019: 612.6 million euros), a year-on-year decline of 24 percent. In Latin America, sales revenues contracted by 48 percent in the first nine months, in North America there was a 29-percent decline. The best outcome after nine months was achieved in Asia, where sales revenues were 16 percent down on the previous year. Europe was 23 percent lower than in the previous year, while our home market of Germany contracted by 19 percent. Overall, the iVario product group was impacted to a lesser extent and contracted by 17 percent, while sales revenues for combi-steamers were 25 percent below the figure for the previous year.

EBIT margin of 14 percent after nine months - 22 percent in the third quarter
"Driven by the significant improvement in sales revenues in the third quarter, a better gross margin and significant cuts in operating costs, our EBIT margin improved to 21.9 percent, a significant increase compared with the first six months and slightly ahead of expectations", reports Dr Stadelmann.

Following the sharp decline to 52.6 percent in the second quarter, the gross margin rose again to 55.9 percent in the third quarter. For operating costs, substantial savings were made especially in sales and service on trade fairs, travel expenses as well as personnel costs. EBIT amounted to 36.8 million euros in the third quarter (2019: 61.3 million euros).

After nine months of the current fiscal year, EBIT was 64.4 million euros, 60 percent below the figure for the previous year (2019: 159.5 million euros). The EBIT margin was 13.8 percent (2019: 26.0 percent). Adjusted for currency effects, the EBIT margin after three months was 15.7 percent.

No positive year-end effects expected - major uncertainty persists
Despite the positive trends of the last few months and stabilising business, RATIONAL remains cautious in its forecast. "In a normal economic environment, we would expect sales revenues to be higher in the fourth quarter. This is driven by the incentive systems for our dealers and sales employees as well as the fact that many customers use budgets saved up in the course of the year for capital expenditure before the end of the year", explains the CEO. He does not expect these positive effects this year, since budgets have frequently been frozen or agreed sales targets can no longer be reached.

In addition, the respective time frames for the pandemic and, of even more serious consequence, for the countermeasures remain unknown. In the autumn and winter season in Europe and North America, outdoor business for the hospitality industry will be discontinued or significantly scaled back. Given the continuing restrictions on venue occupancy and extensive hygiene measures, as well as the threat of tighter restrictions, which have been announced or already introduced in many countries, these are significant uncertainty factors for the fourth quarter of 2020.

Forecast not possible for fiscal year 2020 - long-term outlook remains positive
Predictions of future development are subject to great uncertainty. "It is not possible at this time, when stricter measures are being ordered in many places, to give a reliable forecast of how the current year will continue to develop and hence also the 2020 fiscal year as a whole", says Stadelmann.

The potential for RATIONAL products was temporarily slightly reduced due to the crisis but, according to the CEO, remains at a high level. "Even if people consume less food in restaurants, on aeroplanes or in company canteens, they will still be hungry and want to eat. They will instead get deliveries or pick up hot meals on the go. The demand remains - the place and type of catering change", he explains.

The crisis will lead to an increase in hygiene and efficiency requirements for professional kitchens, giving RATIONAL's technologies an even greater competitive advantage, and exacerbate shortages of skilled staff in the kitchen. The use of versatile, intelligent and efficient cooking technology will become even more important. Some customer segments are set to benefit from government assistance programmes. Investments in health care and education, as was the case after the financial crisis, lead to increased demand in the commercial kitchen industry.

RATIONAL is currently working on numerous projects to use what it has learned from the crisis and improve process efficiency. "Our conservative way of doing and managing business guarantees us the freedom and independence to act in the crisis. Not all our competitors have this favourable starting point", says Stadelmann with confidence.

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. The company, founded in 1973, employs some 2,200 people, around 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: 20 October 2020