RATIONAL (RAA) Q4 2008 earnings summary

Executive summary

• Sales rose 2% to €343.0m, but EBIT declined 10% to €83.1m as the global downturn sharply weakened H2 trading; net income edged up 1% to €61.7m.

• Asia and Latin America grew strongly, while 2009 planning shifted to flexible scenarios, cost adjustments and safeguarding liquidity.

Financial highlights

• Revenue was €342.958m versus €336.556m; currency-adjusted revenue was €349.6m, up 4%, with currency movements reducing revenue by €6.631m.

• Gross profit was €203.684m and gross margin 59.4%, unchanged YoY; EBITDA was €90.4m versus €97.9m.

• EBIT fell to €83.104m from €92.560m; EBT was €83.536m versus €93.463m, while group earnings rose to €61.681m from €61.155m.

• EPS was €5.42 versus €5.38; operating cash flow increased 16% to €71.028m, partly reflecting lower tax payments.

• Income tax expense fell to €21.855m from €32.308m; the effective tax ratio was 26% versus 35%, benefiting from German corporate tax reform.

Outlook and guidance

• 2009 outlook was cautious amid worsening economic forecasts; matching 2008 business development was considered extremely unlikely, with planning based on multiple sales scenarios.

• Flexible cost and structure adjustments, removal of process waste, and liquidity and financial stability were priorities under the “Quality First” approach.

• The new Landsberg plant and machinery expansion were expected to reduce investment and related financing needs over the next years versus the prior two years.

• Long-term opportunity remained substantial: SelfCooking Center potential was estimated at 95% and VarioCooking Center potential at 100% of 2.5m professional kitchens worldwide.