RATIONAL AG Reports Record Sales and Anticipates Steady Growth

RATIONAL AG, a German company known for manufacturing commercial cooking appliances, announced record sales of €295 million for Q2 2024, reflecting a 4% growth in sales for the first half of the year. The company’s earnings before interest and taxes (EBIT) rose by 10% to €149 million, marking the highest half-year result in its history. There was a significant improvement in the gross profit margin, and the company predicts continued sales growth alongside stable gross margins for the remainder of 2024.

### Key Highlights
– RATIONAL AG achieved record sales of €295 million in Q2 2024, with a 4% increase in first-half sales.
– Europe, particularly Germany, remains the primary market, accounting for over 50% of sales.
– North America and Asia reported organic growth rates of 6% and 13%, respectively.
– The iVario product line grew by 11%, while the iCombi group reported a 3% increase.
– EBIT increased by 10% to €149 million, with the gross profit margin improving by 2.8 percentage points to 58.9%.
– Research and development expenses increased by 24%, reflecting the company’s commitment to future growth.
– Operating costs rose by 77% to €190 million, primarily due to heightened R&D expenditures.
– The company holds a robust equity ratio of 75% and cash reserves near €350 million.
– A new service parts center in Landsberg is slated for investment of around €60 million.
– The recently introduced iHexagon product has received significant interest, though sales figures are yet to be disclosed.
– The Net Promoter Score (NPS) saw a slight decline but remains at satisfactory levels.
– RATIONAL AG has slightly lagged behind its hiring targets for sales personnel, adding 170 new employees in the past year.

### Company Outlook
– The company anticipates mid- to high-single digit percentage growth for 2024.
– EBIT margin is expected to slightly surpass last year’s figures.
– Most growth is expected in the latter half of the year, with stable gross margins projected.
– A gross margin of 25.6% is forecasted for the full year.

### Challenges
– Operating costs have increased significantly, with a 77% rise to €190 million.
– The company is slightly lagging in its staffing plans for sales personnel.
– A slight decrease in the Net Promoter Score has been noted.

### Opportunities
– No price reductions from competitors in the U.S. have been observed.
– No significant decline in demand in any region has been reported.
– Strong growth in North Asia is attributed to demand in China and Japan.
– RATIONAL AG expects sustainable growth rates for the iVario product compared to iCombi.

### Shortcomings
– Q2 sales growth was stable but affected by negative mix effects.
– Growth in Germany during Q2 was not linked to a reduction in the order backlog.

### Q&A Highlights
– The company noted that the conflict in the Middle East is unlikely to significantly impact supply chains, although potential freight cost increases and initial delays could arise.
– Staffing challenges are being addressed, with a focus on hiring former chefs for sales positions.
– Future updates will be shared in follow-up discussions, with a detailed release of 9-month figures scheduled for November 7, 2024.

Overall, RATIONAL AG continues to show resilience and growth potential within a dynamic global market. With impressive sales numbers and strategic investments in R&D and infrastructure, the company is poised to maintain its upward momentum despite facing some challenges in hiring and potential supply chain disruptions. The outlook for the remainder of 2024 appears positive, with expectations of steady growth and stable margins.