RATIONAL AG

  • WKN: 701080
  • ISIN: DE0007010803
  • Land: Deutschland

Nachricht vom 03.05.2018 | 07:00

Rational AG - Successful Start to Fiscal Year 2018

DGAP-News: RATIONAL AG / Key word(s): Quarterly / Interim Statement

03.05.2018 / 07:00
The issuer is solely responsible for the content of this announcement.


Rational AG - Statement on the First Quarter of 2018

Landsberg am Lech, 3 May 2018

Rational AG - Successful Start to Fiscal Year 2018

- Organic growth of 9 percent

- Growth markets Germany and Asia

- 60 percent gross margin

- 24 percent EBIT margin - adjusted for currency effects, at previous year's level

- 80 percent equity ratio - high liquidity

- Good development for both segments

- 70 new employees hired

- Outlook confirmed

Organic growth of 9 percent
In the first quarter of 2017, Rational reported exceptionally strong sales growth of 22 percent. Even when compared with that very successful quarter, the company succeeded in increasing sales revenue during the first three months of fiscal year 2018.

In total, Rational generated sales revenues of 173.5 million euros in the first quarter of 2018. Taking into account the base effect due to the previous year's performance and negative currency effects, the recorded growth of 5 percent was still significant and in line with expectations. This equates to average sales revenue growth of 13 percent over two years, bringing the company's growth in the high single-digit range above its own long-term growth targets.

The strong appreciation of the euro - against almost all currencies relevant to Rational - compared with the same quarter of the previous year had a considerable impact on sales revenues in the first quarter of 2018 . In particular, the decline of the US dollar (-15 percent), the Canadian dollar (-11 percent), the Japanese Yen (-11 percent), the Brazilian real (-20 percent), and the British pound (-3 percent) had a significantly negative impact on sales revenues. Adjusted for these effects, Rational sales revenues worldwide increased by 9 percent.

In March 2018, Rational also received high levels of new orders in particular in North and South America, which have not yet been shipped in keeping with the customer roll-out plan for the appliances (worth close to 10 million euros). As a result, orders on hand at the end of the quarter were at a higher level. These orders will contribute to sales revenue growth in the coming months.

Growth markets Germany and Asia
In the home market of Germany, Rational experienced growth of 13 percent in the first three months of the current fiscal year. This successful trend was due in particular to increased sales of combi-steamers (+15 percent).

In Europe (excluding Germany), sales revenues were up by 4 percent due to the base effect from the exceptionally high growth of 18 percent in the previous year. In addition, negative currency effects weighed slightly on sales revenues, while growth without currency effects was 5 percent.

In North America, sales revenues were at the previous year's level in the first three months, driven mainly by the base effect due to the extremely high growth of 58 percent in the previous year as well as increased orders on hand at the end of the quarter. The weakness of both the US dollar and Canadian dollar also had a negative impact on sales revenues. Without currency effects, the North America region experienced growth of 14 percent.

Sales revenue performance also took a hit in Latin America by high growth in the previous year (+53 percent) and negative currency effects. Overall, sales revenues were down 8 percent compared with the same quarter in the previous year - adjusted for negative currency effects, they were at the previous year's level. In addition, there was also a high number of orders on hand at the end of the quarter in this region.

Rational got off to a good start to the year in Asia with sales growth of 12 percent compared with the previous year. China was the main driver of this growth during the past quarter. All currencies relevant to the company in Asia also declined in value against the euro. Without currency effects, sales revenues in the region were up 18 percent on the previous year.

60 percent gross margin
In the first quarter of 2018, Rational generated a gross profit of 104.0 million euros (2017: 101.1 million euros). This equates to an increase of 3 percent compared with the previous year. At 60.0 percent, the gross margin remained at the average level of the previous 10 years (2017: 61.0 percent).

The year-on-year decline by 1 percentage point is attributable to the negative currency effects on sales revenues. Without currency effects, gross margin was sightly above the previous year at 61.3 percent.

24 percent EBIT margin - adjusted for currency effects, at previous year's level
Earnings before financial result and income taxes (EBIT) amounted to 40.8 million euros, 7 percent down on the previous year (2017: 44.1 million euros). The EBIT margin (ratio of EBIT to sales revenues) reached 23.5 percent (2017: 26.6 percent). The decline in EBIT and lower EBIT margin were mainly due to negative currency effects and translation effects on foreign currency positions as at the balance sheet date.

Operating costs rose compared to the first quarter 2017 by 4.6 million euros to 62.9 million euros (2017: 58.3 million euros). The increase in costs was largely attributable to sales and service, which saw a rise of 2.3 million euros to 46.1 million euros (2017: 43.8 million euros). Research and development costs rose by 1.5 million euros to 9.0 million euros compared with the previous year (2017: 7.5 million euros). Development costs of 0.2 million euros were capitalised in the first quarter of 2018 (2017: 0.1 million euros). After three months, general administration expenses amounted to 7.8 million euros, up 0.8 million euros over the previous year (2017: 7.0 million euros).

EBIT was negatively impacted by translation effects on foreign currency positions as at the reporting date. These effects are included in other operating expenses and income, negatively impacting EBIT by 0.8 million euros during the reporting period, whereas they had a positive impact of 1.1 million euros in the first quarter 2017.

Adjusted for these exchange rate effects, the EBIT margin was 25.5 percent, almost at the level of the previous year's margin also after exchange rate adjustments.

80 percent equity ratio - high liquidity
On 31 March 2018, the equity ratio was high at 80 percent (2017: 78 percent). This will decrease again with the planned dividend distribution in May (total proposed dividend of 11 euros per share, which equates to 125.1 million euros).

In the first three months of the current fiscal year, cash flow from operating activities was 14 thousand euros (2017: 11.5 million euros). The decline is due in particular to the markedly stronger increase in receivables and inventories than in the same period last year and due to slightly lower earnings.

The cash flow from investing activities includes investments in property, plant and equipment and in intangible assets. In the first quarter, these investments amounted to 17.2 million euros (2017: 3.2 million euros), an increase of 14.0 million euros on the previous year. For the first time, around 20 million euros was invested in a special fund for financial investment and hedging purposes.

Cash flow from financing activities reflects payments of principal and interest on loans up to the end of March and amounted to -0.7 million euros (2017: -1.6 million euros). The significant decline is due to the reduced loan amount. In 2017, loans of 9.5 million euros were redeemed ahead of schedule.

On 31 March 2018, in addition to cash and cash equivalents of 178.7 million euros (2017: 110.0 million euros Rational held financial assets in fixed-term deposits and a special fund amounting to 72.6 million euros (2017: 182.2 million euros). Thus, liquidity remains at a high level. The slight decline compared with the previous year is attributable to high investments made during the previous year and the past quarter as well as unscheduled loan repayments during the last fiscal year.

Positive performance for both segments
The Rational segment, which represents the production and sale of the SelfCookingCenter(R) and the CombiMaster(R) Plus, experienced growth in sales revenues of 4 percent in the first quarter of 2018 to 160.0 million euros (2017: 154.4 million euros). Segment EBIT was 39.6 million euros (2017: 43.3 million euros). The year-on-year decline is mainly due to negative currency effects.

The Frima segment produces and markets the VarioCooking Center(R). Frima continued its successful growth trend of the previous year with an increase of 14 percent in sales revenues in the first quarter of 2018. In total, Frima generated 13.4 million euros in sales revenues (2017: 11.8 million euros). Segment earnings amounted to 1.3 million euros in the first quarter of 2018 (2017: 0.8 million euros) and thus confirms the expectation of continuous improvement through economies of scale.

70 new employees hired
There was continued focus in 2018 on further expansion of the global sales and service organisation. 70 new employees were added in the first quarter of 2018, almost half of them in Germany. Most of the new jobs are in sales, sales-related functions and technical service, with the remainder in supporting functions. As at 31 March 2018, the Rational Group employed 1,954 people.

Outlook confirmed
The large majority of the customers are so satisfied with the products and services that they would be happy to purchase them again at any time and also recommend them to friends and colleagues. This assessment was confirmed again in the latest customer satisfaction survey. Given the high market potential and the solid forecasts for the global economy, the Executive Board of Rational AG believes the company is well placed to keep on growing successfully.

Despite the extraordinarily strong quarter last year, company expectations were met in the first quarter of 2018 with organic sales revenue growth of 9 percent and EBIT margin adjusted for currency effects at the previous year's level. In addition, on the back of a high number of new orders at the end of the quarter, the company had an increased orders on hand.

Given this, the Rational AG Executive Board confirmed the outlook provided for fiscal year 2018, in other words, sales revenue growth in the high single-digit range and EBIT margin between 26 percent and 27 percent.

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 around 2,000 people, over 1,000 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 SDAX.

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.

In m EUR Q1 2018 Q1 2017 Change
in percent
Sales revenues 173.5 165.7 +5
Gross profit 104.0 101.1 +3
Gross margin in percent 60.0 61.0 -
adjusted for currency effects 61.3    
EBIT 40.8 44.1 -7
EBIT margin in percent 23.5 26.6 -
adjusted for currency effects 25.5    
Profit or loss after taxes 31.2 33.7 -7
Earnings per share (in EUR) 2.75 2.96 -7
 

Disclaimer:

This quarterly statement contains forward-looking statements that are based on assumptions and expectations at the time the statement is published. They are subject to risks and uncertainties and the actual results may differ significantly from those in the forward-looking statements. Many of these risks and uncertainties are determined by factors that are outside the influence of Rational AG and cannot be assessed reliably at present. They include future market conditions and economic trends, the actions of other market players, and legal and political decisions. Rational AG is also not obligated to publish revisions to these forward-looking statements in order to reflect events or circumstances that have occurred after they were published.



03.05.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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