Press release
Landsberg am Lech, 24 March 2020

Rational AG grows successfully in 2019 - Impact of coronavirus on 2020 not predictable at present, therefore no forecast is possible - Long-term prospects remain positive

- Successful fiscal year 2019 with 8 percent sales revenue growth

- Precautionary measures due to coronavirus are hitting some Rational customers hard

- Forecast for 2020 not possible

- Long-term prospects continue to be assessed as positive

- Amount of dividend proposal of 10.70 euros per share will be reviewed

Fiscal year 2019

In the 2019 fiscal year, Rational increased its sales revenues by 8 percent or 66 million euros to 844 million euros (2018: 778 million euros). Sales revenues in the combi-steamer product group went up by 8 percent. The VarioCookingCenter^(R) product group grew by 13 percent.

Asia, which saw a rise of 14 percent, was a key growth driver, while North America also made an above-average contribution to growth with a rise of 11 percent. The strength of a number of foreign currencies, particularly the US dollar, had a positive impact on sales revenues. Growth after adjustment for exchange rate movements was just under 7 percent.

Earnings before interest and taxes (EBIT) amounted to 223 million euros (2018: 205 million euros) and the EBIT margin at 26.5 percent (2018: 26.4 percent). Production and operating costs decreased slightly disproportionately to sales revenues in 2019. The EBIT margin after adjustment for exchange rate movements was just under 26 percent.

Rational created 145 new jobs worldwide in the last fiscal year. At just under 40 million euros, investment in 2019 was at the same high level as the previous year.

Precautionary measures due to coronavirus are hitting some Rational customers hard - Production has not been interrupted - Cost-cutting programs up and running
The negative effects of coronavirus on the economy and general public have dramatically increased since the ad-hoc announcement on 10 March 2020. Official precautionary measures, travel bans and curfews mean that restaurants, hotels or schools are unable or are finding it more difficult to operate or stay open. "The economic damage for some of our customers is enormous. Businesses in the catering sector traditionally have a low credit rating, so they will face insolvencies or closures if immediate government aid is not received soon," says Dr Peter Stadelmann, Chief Executive Officer of Rational AG. Some chain customers have suspended planned purchases of Rational products until further notice as a commercial precaution. Other customer segments, such as hospitals or public safety authorities, are under heavy strain and have to feed and care for more people for a longer time than in normal circumstances.

The activity of the Rational sales force is severely curtailed by the official precautionary measures. Visits to end customers and product demonstrations in person are no longer possible and appropriate. End customers are deferring investments that are not absolutely necessary. Rational is helping reliable business partners by easing the terms of payment for them in an acceptable manner and on a case-by-case basis reflecting their situation. It still has a high degree of insurance cover for its receivables and its credit insurers have confirmed that defaults as a result of the coronavirus crisis are covered.

To maintain the company's robust financial situation, a strict cost-cutting program throughout the Group was launched some weeks ago and a hiring freeze has been imposed. Measures have been taken to keep personnel costs down by reducing overtime and asking employees to use up their remaining leave, as well as to take holiday leave. The company is examining the possibility of and preparing for short-time working in countries that provide for this instrument so that it can be implemented without delay if and when necessary.

Rational's two production facilities at Landsberg am Lech and Wittenheim will maintain their output so that customer orders can be fulfilled on time. The company has been able to ensure the supply of components since the outbreak of the coronavirus crisis in China thanks to very great efforts. "We are proud of the dedication of our U.i.U.^(R), our Entrepreneurs in the Company, all of whom are working energetically to help Rational overcome these tough times well and ensure we are also there for our customers in these times. They deserve a big thank you!" emphasises Stadelmann.

Rational is complying with local official safety regulations on safeguarding employees' health at all its locations. Fortunately, no Rational employee anywhere in the world has tested positive for COVID-19 to date.

Forecast for 2020 not possible
In view of the negative developments of the past two weeks, management is retracting the forecast it gave on 10 March 2020 and is not announcing a new one due to the fact that it is not possible to predict the extent of the coronavirus pandemic and precautionary measures and how long they will last.

Long-term prospects assessed as positive
The company's management assumes that the effects of coronavirus will level off and market circumstances will normalise in the medium term and expects to see a return to sales revenue growth in the high single-digit percentage range and an EBIT margin of around 26 percent. Government investment and aid programs will encourage that trend. "Our customers value our products and their leading technology, comprehensive service and exceptional customer proximity and centricity. Together with the huge untapped potential, many still positive megatrends and our sound balance sheet structure, we have an excellent springboard to emerge stronger from this crisis," states Stadelmann. With its outstanding efficiency and the low complexity of its business model, Rational believes it is in a better position than many of its competitors to respond to and withstand the current crisis and so will also be able to exploit opportunities faster after the situation has normalised.

That is why the company will continue its long-term initiatives in 2020, albeit with great prudence and adapting them if necessary. If the intended plans are not discontinued or delayed, the company's management therefore expects a level of investment on a par with that of the previous year.

Amount of dividend proposal of 10.70 euros per share will be reviewed
The Executive Board adopted the proposed dividend and the Supervisory Board ratified it at an ordinary meeting of the Supervisory Board at the end of February 2020 and hence before the rapid surge in the spread of coronavirus in China, Europe, the USA and the rest of the world. In view of the unforeseeable and dramatic change in the economic situation of numerous customers in many markets since 10 March 2020 and the impact of that on Rational, the originally recommended dividend of 10.70 euros per share will be reviewed. A new dividend proposal will follow in due course. The company has the clear intention to enable shareholders to share in the company's profits in the same way as before the reduction by granting special dividends in subsequent years, once the course of business normalises and provided the company has sufficient capital resources. That approach was also practised in 2009 and 2010.

Annual General Meeting on a significantly reduced scale
The Annual General Meeting is scheduled to take place on 6 May 2020 as planned. The conduct as an Online Annual General Meeting in accordance with the expected change in the German Stock Corporation Act is currently being examined. "If the Annual General Meeting can be held in the personal presence of the shareholders, we will largely forgo catering for the shareholders due to this special situation," explains Dr. Stadelmann.

Contact:
Rational AG
Stefan Arnold / Head of Investor Relations
Tel. +49 (0)8191 327-2209
Fax +49 (0)8191 327-72 2209
E-mail

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 2,200 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.