Rational holds its nerve even though it can’t bank on customers to use up budgets this year

Rational iKitchen

Rational said it was impossible to predict where its revenues would end up for 2020 after reporting a 24% reduction in sales during the first nine months of the year.

The combi oven maker normally counts on a strong end to the calendar year due to incentive programmes for dealers and operators using up budgets for capital expenditure, but CEO Dr Peter Stadelmann said those were less of a given this time around due to the pandemic.

“It is not possible at this time, when stricter measures are being ordered in many places, to give a reliable forecast of how the current year will continue to develop and hence also the 2020 fiscal year as a whole,” explained Mr Stadelmann.

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Rational racked up sales of €466m (£414m) between January and September, compared with €612m (£543m) the year before. Latin America and North America suffered the biggest downturn (falling 48% and 29% respectively), while sales in Europe decreased 23%. Germany, where Rational is based, slipped 19%.

Asia fared best over the first nine months of the year, with revenues down by only 16% on the previous year.

Rational can take positives from the fact that the situation does seem to be improving. Sales during the second quarter of the year, when lockdown measures sent markets around the world into hibernation, plunged 43%, but in the third quarter the decline slowed to 21%.

It also meant the company was able to show sequential growth, with revenues rising from €117m (£104m) in the second quarter to €168m (£149m) in Q3.

Mr Stadelmann said a relaxation of coronavirus restrictions in many of its global markets and the launch of new product generations, iVario and iCombi, had helped the recovery, while cuts in operating costs and a better gross margin led to Q3 EBIT margin improving to 21.9%, a significant increase compared with the first six months of the year and slightly ahead of expectations.

EBIT for the first nine months of the year reached €64m (£57m), a 60% decrease on the same period the year before.

Mr Stadelmann said that while the short term picture remained unclear, the use of versatile, intelligent and efficient cooking technology will gain in importantce, and investments in sectors such as education and healthcare will stimulate commercial kitchen sales.

“Even if people consume less food in restaurants, on aeroplanes or in company canteens, they will still be hungry and want to eat. They will instead get deliveries or pick up hot meals on the go. The demand remains – the place and type of catering change,” he argued.

Rational is currently working on numerous projects to use what it has learned from the crisis and improve process efficiency, Mr Stadelmann revealed.

“Our conservative way of doing and managing business guarantees us the freedom and independence to act in the crisis. Not all our competitors have this favourable starting point,” he said.

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Andrew Seymour

The author Andrew Seymour

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