RATIONAL (RAA) Q4 2010 earnings summary

Executive summary

• FY2010 sales reached a record €350.1m, up 11% YoY; EBIT rose 17% to €105.8m and group earnings increased 19% to €79.8m.

• Q4 sales were €106.2m, up 21% YoY; growth accelerated through the year and all sales regions contributed.

• Global market share remained 54%; the SelfCooking Center and VarioCooking Center address a large, largely untapped professional-kitchen market.

Financial highlights

• Revenue was €350.1m versus €314.4m in 2009; most growth came from higher volumes, with currency effects contributing around 3 percentage points.

• EBIT increased to €105.8m from €90.5m; net earnings rose to €79.8m from €67.3m.

• Operating expenses increased 10.4% to €112.6m, including R&D expense of €13.5m versus €11.4m in 2009.

• Operating cash flow was €86.9m and free cash flow €82.4m; fixed-asset investment was €4.5m.

Outlook and guidance

• FY2011 sales are expected to increase around 10%, with good earnings development; beyond 2011, growth is expected to resume the pre-crisis trajectory if global conditions remain favorable.

• Global economic growth is forecast at 3.9% in 2011; continued sector recovery and rising investment appetite are expected to support demand.

• No major fixed-asset investments are planned for 2011; spending will continue on sales, marketing, research and development.

• Headcount is expected to rise significantly in 2011, subject to market developments, with employee retention, training and development remaining priorities.