RATIONAL (RAA) Q4 2014 earnings summary

Executive summary

• FY14 sales rose 8% to €496.7m; EBIT increased 13% to €145.2m, with reported EBIT margin of 29%.

• Growth was driven chiefly by Europe and higher unit volumes; positive currency effects supported earnings, while average prices remained largely stable.

Financial highlights

• Revenue €496.7m, up 8% YoY; gross profit €304.0m, up 8%, and gross margin 61.2% versus 60.9%.

• EBIT €145.2m, up 13%; reported margin 29.2%. Excluding positive currency effects, EBIT margin was 28%.

• Net income €110.1m, up 13%; EPS €9.68 versus €8.55. Net margin was 22.2%, compared with 21.1%.

• Q4 sales reached €144.0m, up 9% YoY; Q3 sales were €129.5m, up 10%.

• Operating cash flow was €112.5m, up 9%; free cash flow €95.7m. Investments were €16.8m versus €12.0m.

Outlook and guidance

• FY15 outlook: moderate growth in sales volume, revenue and EBIT; gross margin expected near 60%, EBIT margin 26–28%.

• R&D and sales-capacity expansion are expected to lift operating expenses disproportionately to sales; currency effects are expected to be slightly positive and commodity prices to have no material impact.

• FRIMA expected to deliver disproportionately high sales-volume, revenue and EBIT growth as VarioCooking Center remains at an early market-development stage.

• Equity ratio expected near 70%, with high liquidity; DSO expected at the prior-year level. Around 100 jobs planned, and CookingLive participants targeted to rise ~10%.

• Planned FY15 investment is ~€19m; manufacturing capacity utilisation was ~70%, providing room for growth.