DGAP-News: Rational AG: Encouraging business performance in March results in EBIT margin of 19% - another investment push in Wittenheim and U.S.EQS
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DGAP-News: RATIONAL AG
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Rational AG: Encouraging business performance in March results in EBIT margin of 19% - another investment push in Wittenheim and U.S.
- Sales revenues of 167.7 million euros, down 7% year on year
- Improvement in EBIT and EBIT margin to 32.2 million euros and 19.2% (2020: 14.3%) respectively
- Faster recovery possible than previously assumed
- Investments of around 55 million euros expected for 2021
Strong final month for sales revenues and new orders in the first three months
"We see the growing number of customers no longer suffering or suffering less from coronavirus restrictions, the catch-up effect of investment, the in some instances massive stimulus packages and, as the base effect, the fact that March 2020 was the first month to be affected by coronavirus as reasons for this recovery in March", said Rational CEO Peter Stadelmann. In the first quarter of 2021, the company generated sales revenues totalling 167.7 million euros and was therefore around 7% (currency-adjusted 5%) below the figure for the prior-year quarter (2020: 181.3 million euros).
Sales revenues in Asia grow by 27% compared to Q1 2020 - the other regions are still down year on year
iVario growth of 6% - iCombi 9% down year on year
Sales revenues in the iCombi product group in the first three months were 9% down year on year at 149.9 million euros (2020: 164.4 million euros). "The decline in sales revenues just for appliances was relatively low, which underscores the appeal of the new appliance generation. Due to the coronavirus-related restrictions on our customers' business activity, the drop in sales revenues from cleaning products and spare parts was somewhat steeper", adds Jörg Walter, CFO of Rational AG.
Investment push in Wittenheim and U.S.
In addition, RATIONAL is in the process of acquiring a plot of land in the greater Chicago area. In the first step, a customer centre, an administration building and a warehouse are to be erected on a generous plot and will replace the current leased properties from mid-2023. The plot should also offer the option of erecting a production facility in a later step.
RATIONAL anticipates an investment volume of around 55 million euros for 2021 as a whole.
56.0% gross margin in the first quarter of 2021
The cost of sales was successfully adjusted to the new sales revenue level and at 73.8 million euros was around 8% below the prior-year level (2020: 79.8 million euros). Personnel costs in production, in particular, fell significantly, since RATIONAL managed to achieve considerable savings for auxiliary and temporary staff.
EBIT margin up 4.9 percentage points to 19.2%
The EBIT margin for the previous year came under strong pressure due to the emerging coronavirus crisis, the resulting sudden slump in sales revenues in March and the related uncertainty at a still unchanged cost level. This year's EBIT margin for the first quarter benefited from the above-average drop in operating costs in relation to the decline in sales revenues. "The unexpectedly high sales revenues in March alone with a still comparatively low cost base were the main driver for the significantly better than expected EBIT margin", explains Peter Stadelmann.
In total, the operating costs in the first quarter were successfully cut by 12% to 63.6 million euros (2020: 72.5 million euros). The operating costs in sales and service in the first quarter stood at 42.5 million euros (2020: 50.3 million euros) due to a reduction in expenses on trade fairs, travel, personnel costs, and transport and logistics costs of around 15% below the prior-year level. Major reductions in research and development expenses were only consciously made. They fell by 4% to 11.4 million euros (2020: 11.9 million euros). Administration expenses went down by 6% to 9.7 million euros (2020: 10.3 million euros).
In the current year, the currency result of 1.5 million euros had a positive impact on the EBIT margin, while it fell sharply to -2.9 million euros in the prior-year quarter. Adjusted for all currency effects, the EBIT margin after three months was 19.4%.
13.5 million euros in operating cash flow in the first quarter
The cash flow from investing activities includes investments in property, plant and equipment and in intangible assets. In the first three months of the current fiscal year, these investments amounted to 4.0 million euros (2020: 7.5 million euros).
The cash flow from financing activities of -2.9 million euros mainly reflects the repayment of principal and interest in connection with bank loans (-0.8 million euros) and payments for lease liabilities in accordance with IFRS 16 (-2.1 million euros).
2020 dividend back to a payout ratio of around 70%
Slight decline in number of employees
Good first quarter provides slightly positive outlook for the year as a whole
General factors indicating that the recovery among customers will continue are the rising vaccination successes, the spread of tests, the decline in positive cases in more and more regions and the milder summer temperatures. On the industry side, the factors are the in some instances massive financial aid packages, as in the U.S., for example, and the dealers' depleted inventories. Risks that remain are new virus mutations and further waves of the pandemic that could lead to renewed lockdowns.
The company's management currently still expects growth in sales revenues in the medium single-digit range. "Based on the assumption that other markets will benefit sooner or more strongly from catch-up effects among restaurant and communal catering guests and our end customers, sales revenue growth for the fiscal year could turn out to be somewhat better than previously expected", said Peter Stadelmann.
The risk of supply shortages for electronic components and production stoppages as a result still remains. There is also the risk of rising costs in material procurement. "There are already signs of price increases for some raw materials and especially electronic components, as well as rising transport and logistics costs. In addition, operating costs for trade fairs, customer visits and travel will rise again as things continue to get back to normal", notes Jörg Walter.
If the positive trend in sales revenues and the favourable cost situation of the first quarter continue and the risks described do not materialise in full, then the EBIT margin will be higher than the previous year.
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.
05.05.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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|Phone:||0049 8191 327 2209|
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|EQS News ID:||1191871|
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