DGAP-News: RATIONAL AG: 2020 overshadowed by the COVID-19 crisis
DGAP-News: RATIONAL AG
/ Key word(s): Quarterly / Interim Statement
RATIONAL AG: Statement on the first quarter 2020 RATIONAL AG: 2020 overshadowed by the COVID-19 crisis - Slight growth in January and February - Slump in orders since March 2020 - Into the future with the new iCombi Pro(R) - Uncertain times - currently no forecast possible for 2020 Rational AG / keyword(s): provisional quarterly figures
Slump in orders since March 2020 Until the end of February, the RATIONAL Group's new orders were slightly up on the previous year and essentially in line with our own expectations. Only in China and Italy were there emerging signs of the first consequences of the coronavirus shutdown. From the start of March, the measures to contain the spread of coronavirus then began to have a perceptible impact in more and more markets. All our customer groups are hit by it to a greater or lesser extent. As a result, new orders at the Group fell sharply in practically all regions in March to around 30% of the level in the same period of the previous year. Since April, the coronavirus crisis has impacted the whole world, with a few exceptions, and has had an even stronger effect on our business performance. In the past weeks, we recorded a year-on-year drop in new orders of around 50% to 60%. 7% drop in sales revenues - declines in all major regions RATIONAL generated sales revenues of 181.3 million euros in the first quarter of 2020 (2019: 194.3 million euros), 13.0 million euros or 7% less than the previous year. The markets mainly hit by the coronavirus-related restrictions were Asia and our home market Germany, which contracted by 13% and 14% respectively. Sales revenues in North America in the first quarter also fell sharply by 9% year over year. Sales revenues in the other regions were at the same level as the previous year or slightly down. All in all, there were neutral to slightly positive effects on sales revenues in the first quarter of 2020 as a result of exchange rate movements for the foreign currencies relevant to RATIONAL. Decline for combi-steamers - slight growth for VarioCookingCenter(R) In the combi-steamer product group, which represents the production and sale of the SelfCookingCenter(R) and the CombiMaster(R) Plus, sales revenues in the first three months were 8% lower than in the previous year at 164.4 million euros (2019: 178.6 million euros). There was slight sales revenue growth for the VarioCookingCenter(R) product group, with an 8% increase in the first three months of 2020 to 16.9 million euros (2019: 15.7 million euros). RATIONAL launches new intelligent cooking system On the morning of 5 May 2020, RATIONAL launched its completely new iCombi Pro(R), the successor to the SelfCookingCenter(R), and so initiated what we term the Innovation Journey, in which we will present a large number of innovations to our customers in the coming months - the fruit of many years of intensive work by our colleagues in product development, production, sales, service and many other parts of the company. The benefits of the new iCombi Pro(R) can be found on pages 8 to 11 in the attached web link. The new ConnectedCooking platform was presented in February at Intergastra and EuroShop. It offers greater customer benefits in its free basic version and, for a charge, new functions such as hygiene, asset and recipe management under the name ConnectedCooking Pro. Gross margin of 56% The past few months were also dominated by the launch of iCombi Pro(R), our new generation of appliances, which resulted in a sharp increase in the workload for employees at the units involved. Marketing is preparing the launch and training of our sales staff, Production is preparing the complex process of discontinuing old appliances and rolling out new ones, and Technical Service is gearing up to train service partners in how to repair and maintain the new iCombi Pro(R) worldwide. A further consequence of the upcoming product changeover was a build-up in inventories of upstream products, as well as finished appliances. In addition to the usual stocks required in the normal course of business, appliances from the old series were also stocked for long-term project orders. In addition, we have already produced the new appliance series in advance, in particular for our overseas business. Due to the outbreak of the pandemic, numerous already complex processes had to be reworked again or completely changed. The large investments we made in past years meant that the significant increase in depreciation and amortisation charges was a major reason for the higher cost of sales. These effects had a perceptible effect on the cost of sales, which were 79.8 million euros (2019: 79.5 million euros) despite the 7% drop in sales revenues. In the first quarter of 2020, RATIONAL generated a gross profit of 101.5 million euros (2019: 114.8 million euros), a decline of 12% compared to the previous year. At 56.0%, the gross profit margin was significantly below the previous year's level (2019: 59.1 %). There were no significant exchange rate influences on the gross profit margin. 14% EBIT margin The main reasons for this sharp fall were the low gross profit margin, the fact that - coupled with the decline in sales revenues - operating expenses were around 4% higher year on year at 72.5 million euros (2019: 70.0 million euros), and the fact that the currency result fell sharply to -2.9 million euros compared to a positive figure of 2.2 million euros in the previous year. The sharp depreciation in the currencies of many emerging countries exerted heavy pressure on the currency result. Operating expenses for sales and service were 50.3 million euros and so at the level of the previous year (2019: 50.3 million euros). Whereas current personnel costs were significantly up on the previous year due to the sharp increase in the headcount over the same period of 2019, the costs of trade fairs and other customer events and activities in particular declined sharply as a result of the coronavirus-related restrictions. Research and development costs rose by 15% in the first three months to 11.9 million euros (2019: 10.3 million euros). Administration expenses rose by 10% and were 10.3 million euros (2019: 9.3 million euros). The main cost driver in these areas is in particular the sharp increase in personnel and IT expenses for the development of new products and services and for forward-looking expansion of support functions in business administration areas. Earnings after taxes additionally reduced by negative financial result Earnings after taxes in the first three months were 16.7 million euros (2019: 36.6 million euros) and hence 54% down on the previous year. Cash flow from operating activities: minus 22 million euros The cash flow from investing activities includes investments in property, plant and equipment and in intangible assets. These amounted to 7.5 million euros (2019: 9.2 million euros) in the first quarter. This is mainly due to investments in construction of the new logistics centre, which was commenced last autumn, and in modernising the machinery installed at the Landsberg am Lech location. The figure also includes returns from financial investments and fixed-term deposits totalling 8.2 million euros in net. In total, there was a cash inflow from investing activities of 0.8 million euros. The cash flow from financing activities of -5.0 million euros mainly reflects the repayment of bank loans (-0.7 million euros), the repayment of short-term bill commitments (-2.0 million euros) and payments as part of lease liabilities in accordance with IFRS 16 (minus 2.2 million euros). Securing liquidity has top priority The build-up of inventories in order to secure our delivery capability - in view of the fact that supply bottlenecks could not be ruled out and as part of the launch our new generation of appliances iCombi Pro(R) - weighed on our liquidity situation in the past months. We also expect the terms of payment for our customers to be extended. Ensuring the liquidity of our subsidiaries and key suppliers poses a risk insofar as it might tie up further liquidity. Measures to secure our liquidity situation include cost cuts, a review of our terms of payment with suppliers, a review of the proposed dividend, and changes in the timing of our investment projects. New building in Wittenheim postponed - logistics center in Landsberg to be completed 52 new employees - immediate hiring freeze Since we have imposed a hiring freeze due the current situation, vacant posts will not be refilled where reasonable, and temporary contracts will not be extended in some cases, so we expect that the number of employees will decline slightly in the further course of the fiscal year. Uncertain times - currently no forecast possible for 2020 The large majority of our customers continue to be 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 in spring of this year and also applies in the current crisis situation. The coronavirus crisis is having a severe temporary impact on RATIONAL's business model, but is not calling it into question. We still see great untapped market potential. The lessons learned from the pandemic will speed up the switch to state-of-the-art cooking technology and so open up big opportunities for us. We will do all in our power to support our customers as usual and where possible during the crisis and afterwards. As a result, we will strengthen our customers' loyalty and emerge stronger from the crisis. A longer-term look at growth rates and earnings for the coming years is not possible from the current perspective. A detailed assessment of the situation as well as information on the new iCombi Pro(R) are available in the letter of the CEO of RATIONAL AG Dr Peter Stadelmann following the web link below or under https://www.rational-online.com/en_gb/company/investor_relations_1/publications_reports_1/quarterly_reports/quarterly_reports.php?tab=2
Contact: Rational Aktiengesellschaft Stefan Arnold / Head of Investor Relations E-mail [email protected] 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 around 2,300 people, over 1,200 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.
Additional features: Document: https://eqs-cockpit.com/c/fncls.ssp?u=QFXTOGIMIQ Document title: RATIONAL AG - Announcement on Q1 2020
06.05.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. |
Language: | English |
Company: | RATIONAL AG |
Siegfried-Meister-Straße 1 | |
86899 Landsberg a. Lech | |
Germany | |
Phone: | 0049 8191 327 2209 |
Fax: | 0049 8191 327 722209 |
E-mail: | [email protected] |
Internet: | www.rational-online.com |
ISIN: | DE0007010803 |
WKN: | 701080 |
Indices: | MDAX |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart, Tradegate Exchange |
EQS News ID: | 1035897 |
End of News | DGAP News Service |
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1035897 06.05.2020
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