Rational AG: Sales revenues up 25 percent in the first quarter

• Sales revenues up 25 percent to 282 million euros in the first quarter of 2023
• 55.7 percent gross margin and 23.5 percent EBIT margin in the first quarter of 2023
• Forecast for 2023 confirmed: sales revenue growth expected in high single-digit percentage range and EBIT margin slightly below previous year level

Landsberg am Lech, 04 May 2023 “The first quarter results have given us a successful start to 2023. Due in part to special effects, we have exceeded the high prior-year figures, and are at a high level in terms of both sales revenues and earnings,” says Rational’s CEO Dr Peter Stadelmann on the quarterly results published today.

Sales revenues increase by 25 percent to 282 million euros in the first quarter of 2023
At 282.4 million euros (2022: 225.3 million euros), RATIONAL’s sales revenues in the first quarter of 2023 are 25 percent higher than in the prior-year quarter. In addition to unit growth, price increases provided were an important reason for growth, as most of them had not yet taken effect in the first quarter of 2022.

“As in the previous two quarters, we managed to successfully reduce our order backlog. Thanks to the continued stable supply situation for electronic components and increased productivity in manufacturing, we have almost reached the production level of the fourth quarter of 2022,” says CFO Jörg Walter. The order backlog was still around 200 million euros at the end of March 2023.

From a regional perspective, all countries performed well with only few exceptions. Sales revenue growth in the first three months was particularly pleasing in North America (+41 percent). “With the targeted expansion of our sales activities and service network in North America, we are reaching an increasing number of customers there in street business. Many of our customers are using our intelligent appliances to meet the challenges of a shortage of skilled workers and rising input prices,” says the CEO, explaining the positive figures. Latin America was also significantly up on the previous year with 41 percent increase in sales revenues. Europe (excluding Germany) and Germany also performed well in the first three months, up 21 percent and 10 percent respectively. Driven by strong sales revenues in Japan, Southeast Asia and India, growth in Asia amounted to 21 percent. Sales revenues in the Rest of the World were 51 percent higher than in the same period last year.

In the iCombi product group, sales revenues in the first three months of 2023 increased significantly by 30% year-on-year to 253.6 million euros (2022: 195.1 million euros). In the iVario product group, the previous year's figure with sales revenues of 28.8 million euros was not quite achieved (2022: 30.1 million euros), as iVario sales grew extraordinarily strongly by 69 percent in the same quarter of the previous year.

55.7 percent gross margin and 23.5 percent EBIT margin in the first quarter of 2023
Cost of sales increased more slowly than sales revenues in the first three months, up 22 percent to 125.1 million euros (2022: 102.5 million euros). As a result, Rational’s gross margin improved by 1.2 percentage points to 55.7 percent (2022: 54.5 percent). In addition to pricing effects, which pushed up sales revenues, increased productivity in production had a particularly positive impact. “High productivity, stable material availability and additional shifts helped us to produce large volumes of cooking systems. Prices for components, raw materials and logistics have stabilised but are still at a high level,” explains CFO Walter.

Rational’s EBIT (earnings before financial result and taxes) for the first three months was 66.5 million euros, up around 39 percent year-on-year (2022: 47.8 million euros). The EBIT margin rose to 23.5 percent (2022: 21.2 percent), benefiting from the very good sales revenue performance combined with a disproportionately low increase in cost levels compared to sales revenues. While sales revenues rose by 25 percent year-on-year, the company’s operating costs were only 18 percent up on the prior-year period.

Number of employees at new high
“This encouraging result for the first quarter of 2023 would not have been possible without the active support of our employees, whom we refer to as “entrepreneurs in the company,” says CEO Stadelmann. They have once again demonstrated their full commitment in the service of our customers. At the end of March 2023, the Rational Group employed 2,450 people worldwide. Of these, around 1,400 were employed in Germany.

Forecast confirmed
According to Rational, the successful first quarter was boosted by positive special factors. The reduction handoff the order backlog and the effects of price increases had a significant impact. According to the company, these effects will gradually decline in the subsequent quarters. For this reason, the company confirms its sales revenue and earnings forecast for the full year.

Rational expects the order backlog to be further reduced in the second quarter and anticipates that customer ordering behaviour will normalise. “Before the pandemic and the supply crisis, order intake and sales revenues were at similar levels. We expect this balance to return in the third quarter. We also expect sales revenues in the subsequent quarters to be roughly at the same level as in the first quarter. Overall, we confirm the sales revenue forecast for fiscal 2023, expecting growth in the high single-digit percentage range,” predicts Dr Peter Stadelmann.

In the further course of the year, Rational anticipates an unchanged high-cost level, with a risk of a further increase in costs, particularly for primary products. Energy and raw material costs have recovered slightly from their highs, but energy costs are rising significantly for many suppliers compared to 2022. Meanwhile, wage inflation has also stabilised. “On the one hand, these effects are reflected in our own operating costs, and on the other hand, we are also faced with further price demands from suppliers who are in a similar situation. Rising operating costs for increased sales capacity and activities will also have an impact on the cost base in the coming quarters,” expects Jörg Walter. Based on these factors, the company confirms overall the forecast issued at the end of a slight year-on-year decline in EBIT margin.

Contact:

Rational Aktiengesellschaft
Stefan Arnold / Head of Investor Relations
Phone +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 2,450 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.