Rational AG: Sales revenues up 23 percent to 561 million euros in the first half year 2023

• Sales revenues grow by 23 percent to 561 million euros in the first half of 2023
• 56 percent gross margin and 24 percent EBIT margin after the first six months of 2023
• Orders on hand reduced to 160 million euros – delivery times back to normal level
• Forecast for fiscal year 2023 confirmed

Landsberg am Lech, 3 August 2023     “After a successful start into the year 2023 and boosted by special factors, we were able to build on our successes in the second quarter. We benefited from positive effects on sales revenues, while planned investments and expenditure will only be reflected in our accounts in future months,” reports Rational CEO Dr Peter Stadelmann with reference to the report on the first half of 2023 published today.

Sales revenues stable at high level in both quarters

Rational generated sales revenues of 278.3 million euros, 20 percent up on the figure for the second quarter of 2022 (2022: 232.4 million euros). In the second quarter, a rise in the number of appliances sold and price increases made another important contribution to growth. After the first six months of 2023, sales revenues amounted to 560.8 million euros, 23 percent up on the previous year (2022: 457.7 million euros).

“In addition to positive volume and price effects, the desired reduction in orders on hand also had a beneficial impact. In the first two quarters of 2023, we reduced order on hand by a total of around 85 million euros,” explains CFO Jörg Walter. At the end of June 2023, they stood at approximately 160 million euros, which the company believes to be close to the new normal. This was accompanied by the normalisation of delivery times.

From a regional perspective, year-on-year growth rates ranged from +4 percent in Germany to +50 percent in North America in the six-month period. Thanks to the strong business in the United States, North America remained Rational’s most important growth driver in the first half of 2023. In Latin America, sales revenues expanded by 33 percent. Thanks to high sales revenues in Japan and the recovery in the Chinese business, Asia exceeded the previous year’s figure by 29 percent. Europe (excluding Germany) also performed well in the first six months of 2023, with an increase of 14 percent.

In the iCombi product group, sales revenues were up significantly, by 27 percent year-on-year, in the first six months of 2023, at 503.0 million euros (2022: 395.1 million euros). In the iVario product group, sales revenues of 57.8 million euros were slightly down on the previous year (62.6 million euros). The company attributes this mainly to exceptionally strong growth in the previous year. For this reason, Rational does not believe that this represents a structural change in demand of iVario and continues to take a positive view of the long-term growth potential.

56 percent gross margin and 24 percent EBIT margin in the first half of 2023

Cost of sales increased more slowly than sales revenues in the first half of the year, up around 17 percent to 246.0 million euros (2022: 210.5 million euros). As a result, the gross margin improved by 2.1 percentage points year-on-year, to 56.1 percent (2022: 54.0 percent). The reasons are the positive effects of last year’s price increases combined with declining cost pressure in materials procurement and logistics. Procurement prices have recently begun to fall, especially for stainless steel, cleaning chemicals and international freight charges. Another factor is the improved productivity in our manufacturing processes,” comments Jörg Walter.

Since both the costs of material usage and operating expenses increased more slowly than sales revenues in the first half of 2023, the company ended this period with an EBIT margin of 24.3 percent (2022: 20.3 percent). EBIT (earnings before financial result and taxes) in the first six months of the current fiscal year was therefore 136.0 million euros, up approximately 46 percent on the first half of 2022 (2022: 93.1 million euros).

 85 new employees in the first six months

“We believe there is great potential for our products and services. We know that they will require guidance in many cases and, to tap into this potential, we therefore need customer-focused employees in sales who make customers aware of our technology, provide user training and give support when queries or problems arise,” explains CEO Stadelmann. At the end of June, 2,486 people worked for the RATIONAL Group, 1,430 of them in Germany. In the first six months of 2023, the company hired 85 new employees, especially in sales and sales-related processes.

Rational’s employees around the world benefit from a salary increase this year. Following an increase of 5 percent last year, salaries have been adjusted by another 4 percent in 2023.

Forecast confirmed

According to Rational, the first half of 2023 benefited from positive special factors resulting from the reduction in the high level of orders on hand. These positive effects are expected to diminish in the second half of the year. This would mean that sales revenues will not follow the usual seasonal pattern of a stronger fourth quarter. The company therefore anticipates sales revenues in the second half of the year to be slightly down on the first half and confirms the full-year forecast of growth in the high single-digit percentage range.

“In accordance with our full-year outlook, we will specifically increase certain operating expenses in 2023. We are planning targeted measures, especially in sales, to increase the rate of contact with even more potential customers as a way to enhance customer proximity. In addition, we continue to drive the strategic projects for the expansion of our international sites. We have identified movements in the relevant foreign currencies as another factor weighing on the second half of the year,” says CFO Walter. Overall, Rational anticipates that operating expenses will rise faster than sales revenues, which would reduce the EBIT margin to slightly below the prior-year level. “If the beneficial factors affecting these cost items were to continue, the EBIT margin could be on a level with the previous year,” adds Walter.

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
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 just under 2,500 people, over 1,400 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.