RATIONAL AG starts fiscal year 2024 with a successful first quarter

RATIONAL AG starts fiscal year 2024 with a successful first quarter

• 286 million euros sales revenues
• North America and Asia regions continue to expand
• EBIT up 7 percent, outpacing sales revenue growth – EBIT margin at 24.8 percent
• Forecast for 2024 confirmed: sales revenue growth expected in medium to high single-digit percentage range and EBIT margin close to previous year

Landsberg am Lech, 2 May 2024 “After the successes of the previous year, the first three months of 2024 continue to give us a positive outlook. Financially, we are performing as expected. However, we are particularly pleased with the more intense direct contact with our customers,” says Rational’s CEO Dr Peter Stadelmann. On the morning of 2 May 2024, the company, headquartered in Landsberg am Lech, provided insights into the first quarter of 2024.

Sales revenues of 286 million euros
At 286.4 million euros (2023: 282.4 million euros), sales revenues in the first quarter were 1 percent higher than in the prior-year quarter. “Sales revenues had risen by 25 percent in the first quarter of 2023, boosted by the successful reduction of the exceptionally high orders on hand by around 45 million euros. This shows that year-on-year comparisons of sales revenues and new orders should be interpreted with caution due to the follow-on effects of the supply crisis. Against this background, and based on high demand, we evaluate the sales revenue performance as positive,” explains Rational’s CFO Jörg Walter. Orders on hand have stabilised at around 120 million euros.

Growth in Rational’s high-potential overseas markets of North America and Asia continues to outperform the average. Sales revenues in the North America region were up by 13 percent in the first quarter of 2024, while sales revenues in Asia increased by 18 percent during the same period. The major individual markets in these regions, namely the United States, China, and Japan, were responsible for the growth. The situation in Europe (excluding Germany) was mixed. In established markets, such as Italy, France, and Spain, Rational could not reach the peak values of the previous year’s quarter. Rational’s growth in Eastern and Southeastern Europe was all the more encouraging. Moreover, the United Kingdom made an important contribution to growth. In total, sales revenues in Europe (excluding Germany) were close to the previous year’s level, declining slightly by 3 percent. Sales revenues in Germany in the first quarter of 2024 were down significantly, by 17 percent, on the prior-year figure. Jörg Walter identified rapid growth during the period from 2021 until the first quarter of 2023 as the main reason for the decline. However, the long-term growth rate in the company’s home market remains within expectations.

With an increase of 7 percent, sales revenues in the iVario product group exceeded both the previous year and the previous peak from 2022. The iCombi product group saw a slight increase of one percent from the previous year’s high level.

EBIT up 7 percent, outpacing sales revenue growth – EBIT margin at 24.8 percent
On the cost side, Rational benefits from easing in the commodities market and in international logistics. According to the company, this had already become apparent in the previous year’s course. Despite rising sales revenues, the cost of sales went down by 5 percent, which in turn led to a 2.8 percentage point increase in the gross margin to 58.5 percent.

In the first quarter of 2024, the Rational Group generated EBIT (earnings before financial result and taxes) of 71.1 million euros (2023: 66.5 million euros), resulting in an EBIT margin of 24.8 percent (2023: 23.5 percent). EBIT benefited from the encouraging increase in gross profit. Total operating costs climbed by 5 percent to 94.5 million euros (2023: 89.8 million euros). “In line with our forecast, operating costs are increasing somewhat faster than sales revenues. We want our innovative cooking systems to help ensure customer proximity. That requires effort and financial resources,” says Dr Peter Stadelmann.

Dividend of 13.50 euros per share proposed
Due to the positive earnings performance, the Executive Board and Supervisory Board will propose the distribution of a dividend of 13.50 euros at the Annual General Meeting on 8 May 2024. That equates to a total distribution of 153.5 million euros. The distribution ratio of 71 percent of consolidated net profit is in line with the long-term average, and the dividend yield stood at 1.9 percent based on the closing price on 31 December 2023.

iCareSystem AutoDose honoured with Internorga Future Award
At this year’s Internorga, Germany’s largest trade fair for the out-of-home catering market, Rational’s iCareSystem AutoDose received the Future Award in the “Technology & Equipment” category. The five members jury recognised the innovation of the Landsberg company for the new and intelligent solution that sets standards in the market. They particularly highlighted that the iCareSystem AutoDose eases the workday in professional kitchens and minimises occupational risk and contributes significantly to waste reduction compared to conventional cleaning tabs. The use of cartridges, which are 100percent recyclable, reduces plastic waste by 50 percent. Also, at Internorga, the company unveiled the iHexagon to selected customers. “The iHexagon is the first cooking system that intelligently combines the three energy types, steam, hot air and microwave, across six racks for even faster cooking at the highest quality. The new cooking system will be rolled out gradually, starting in Germany, the United States and the United Kingdom,” reports Peter Stadelmann.

Number of employees increased further
“This year, we continue to rely on our employees, as the so-called “Entrepreneurs in the company” (U.i.U.s). Their consistent commitment to serving our customers is what makes us successful,” says Peter Stadelmann. At the end of March 2024, the Rational Group employed 2,630 people worldwide, with 1,480 based in Germany. Overall, this represents an increase of 180 new positions compared to March 2023.

2024 forecast confirmed
On the strength of the good results of the first quarter of 2024, Rational confirms its forecast for the fiscal year 2024.

“Rational can grow sustainably and organically. This growth is primarily driven by strong demand in overseas regions with still low market penetration. Being close to the fundamental human need for food also makes us less cyclical. Recurring sales revenues from cleaners, service parts, and accessories, as well as the replacement of older generations of appliances, support this,” explains Jörg Walter. Overall, the company expects organic sales revenue growth in the mid to high single-digit percentage range for 2024.

The CFO adds: “To position our company for sustainable success, we will continue to drive our strategic projects. In addition, our global sales team ensures customer proximity. In terms of cost, this means that our operating costs will rise somewhat faster than sales revenues. As we expect a higher gross profit due to lower material costs, we anticipate the EBIT margin to be close to last year’s level.”

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. The company, founded in 1973, employs more than 2,600 people, around 1,480 of whom are in Germany. Rational was floated in the Prime Standard of the German stock market in 2000.

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.