RATIONAL (0FRJ) Update / Briefing Transcript

Summary of RATIONAL (0FRJ) Update / Briefing August 12, 2025 Company Overview - Company: RATIONAL AG - Industry: Commercial kitchen equipment manufacturing Key Financial Highlights - Sales Revenue: Grew by 4% in the first half of the year to €606 million, with Q2 growth at 5.5% [3] - FX Impact: Negative FX effects in Q2 adjusted growth rates to 5.5% for H1 and 8% for Q2 [3] - EBIT Margin: Expected to be negatively impacted in H2, with a forecasted margin range adjusted to 25-26% from an initial 25-27% [5][6] Cost and Pricing Dynamics - Import Tariffs: Estimated additional costs of €10 million for fiscal year 2025 due to US import tariffs, with €1 million incurred in H1 [5] - Pricing Strategy: No immediate pricing decisions made; potential price increases in response to competitor actions and tariff impacts are under consideration [6][10] - Competitor Pricing: Competitors, including Eunox, have reportedly increased prices by 5-15% [10] Market and Demand Insights - US Market Dynamics: The out-of-home business remains crucial, with rising costs (energy, labor, food) affecting customer operations [26] - Customer Sentiment: Customers are facing significant cost pressures, but the demand for energy-efficient equipment remains strong [27] - Market Penetration: The US market penetration for RATIONAL is around 10-15%, indicating room for growth against traditional cooking equipment [27] Future Outlook - Guidance for Next Year: No guidance provided for the next year until current year figures are announced; future guidance will depend on tariff decisions and pricing strategies [7] - China Market: Anticipated slow ramp-up for new products in China post-Chinese New Year, with no significant growth contribution expected initially [40][42] - Manufacturing Considerations: Ongoing assessments regarding establishing production facilities in the US due to tariff impacts and cost considerations [51][54] Competitive Landscape - Market Share: RATIONAL holds a significant market share in the boiler unit segment, with competitors like Althussam potentially exiting this market [44] - Product Differentiation: Emphasis on the quality and efficiency of RATIONAL's products compared to lower-end alternatives [48] Additional Considerations - Tariff Uncertainty: Ongoing tariff changes create uncertainty in pricing and cost structures, impacting investment decisions among key accounts [63][66] - Steel Tariffs: Steel components account for less than 10% of sales, but tariffs on these components are a concern, albeit with a limited overall impact [70][71] This summary encapsulates the key points discussed during the RATIONAL briefing, highlighting financial performance, market dynamics, competitive positioning, and future outlook.