03.05.2018
RATIONAL AG DE0007010803
DGAP-News: Rational AG - Successful Start to Fiscal Year 2018
DGAP-News: RATIONAL AG / Key word(s): Quarterly / Interim Statement
Rational AG - Successful Start to Fiscal Year 2018
03.05.2018 / 07:00
The issuer is solely responsible for the content of this announcement.
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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 2018, 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: [email protected]
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.
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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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Language: English
Company: RATIONAL AG
Iglinger Straße 62
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: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Munich,
Stuttgart, Tradegate Exchange
End of News DGAP News Service
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681711 03.05.2018
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