Rational vows to recover after flat Q1 in Europe

Rational’s first quarter sales figures paint a “particularly heterogeneous picture” of the global market place that it currently operates in, the company said yesterday.

The German combi oven producer managed to increase its sales by 7% to €104m (£88m) during Q1, while gross profit rose 8% to €62m (£52m) in the process.

But it admitted that growth was harder to come by for some regions than others. Sales in Europe were flat, the Americas posted growth of 6%, while Asia recorded a 21% rise in revenue.

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Rational CEO, Dr. Guenter Blaschke, insisted its global presence actually proved to be an asset by allowing the company to “consistently cushion” fluctuations in individual national markets.

He described Rational’s European business, which accounts for around half its turnover, as suffering a “restrained start”, but said the difficulties could be traced back to two essential factors.

“Firstly, due to macroeconomic uncertainties, we have been very cautious about expanding our sales capacities here since 2010, and our growth has predominantly stemmed from efficiency increases within the existing organisations,” he explained.

“In addition, the market situation in the crisis-ridden countries of southern Europe remains tense. Our focus for investment in sales in recent years has been on setting up and expanding the organisations in the major emerging countries such as China, India and Latin America.”

Blaschke, however, is confident the challenges in Europe will be short-lived, especially as current forecasts assume that Europe as a whole will emerge from recession this year.

He said Rational was already starting to expand its capacities in Europe and predicts this will soon lead to “higher growth rates” again.

Globally, Rational hired an additional 39 people during the quarter. More than 750 of its 1,300-strong workforce are based in its native Germany.

One area of concern for during the quarter was the performance of its Frima brand, which only grew sales by 1%. The company blamed low growth in Germany and a slight fall in sales in France for the softness.

It said that “necessary structural adjustments” and “correction measures” had been taken to improve Frima performance over the longer-term.

Although the UK wasn’t referenced in the report, it is one of the markets where Frima has carried out changes. Earlier this year it unveiled plans to push all its business through UK distributors and make the MD position’s redundant. 

There continues to be Frima people on the ground in the UK developing the business, however, while additional senior management support is provided by the company’s Swiss HQ.

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