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Rational sets high watermark for orders despite supply chain challenges

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Rational’s appliance third quarter 2021 orders climbed 70% compared with 2020 and 40% versus 2019.

Germany-headquartered cooking equipment manufacturer Rational generated record new orders of ovens in the first 9 months of 2021 – but warned that a supply bottleneck was continuing to have an adverse on effect on its deliveries.

The combi oven maker has seen soaring demand for its latest generation of appliances as global hospitality markets recover from the pandemic, but bosses at the firm said concerns over materials procurement and logistics disruptions risked exacerbating an “already tense” situation.

CEO Dr. Peter Stadelmann detailed: “We have known since the middle of August that there will be a shortage of processors in the fourth quarter and at the beginning of 2022. For this reason, an additional processor supplier is currently being qualified, which is expected to help ease the tight situation from January 2022 onwards.”

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Orders during the third quarter climbed 70% compared with 2020 and 40% versus the pre-crisis year of 2019.

Rational said it was unable to fulfil the high levels of orders on hand due to the current supply difficulties, but said quarterly revenues of €207m (£175m) were now back up to 2019 levels.

The performance also helped to drive push nine-monthly revenues up 26% year-on-year to €586m (£495m).

Stadelmann said all regions had contributed to the figures it had achieved, with Asia and the German-speaking region driving growth rates of more than 20% versus 2019 as customers demonstrated demand for its iCombi and the iVario product lines, which were released last year.

Rational said that an increase in commodity and component costs began to have a tangible impact on production costs in the third quarter, causing these costs to increase slightly faster than revenues. That led to gross margin declining by half a percentage point on the previous year.

Looking ahead, Rational said it expected the fourth quarter to be characterised by uncertainty about global supply shortages and logistics constraints.

CFO Jörg Walter analysed: “We described these factors as a possible risk scenario in our July forecast. These factors have intensified in recent weeks, in some cases significantly.”

As the trends change daily, the short-term consequences are hard to predict, he added.

Rational said it believes it is well-positioned to master these challenges due to the countermeasures it has taken. It considers revenue growth of 15% to 20% and an EBIT margin of around 20% to be a realistic scenario.

Stadelmann said: “Should the already tense situation be exacerbated by additional bottlenecks in materials procurement, longer delays or supply chain disruptions, the executive board expects a corresponding negative effect on sales revenues and earnings.

“In this case, sales revenues would grow in the high single digits in percentage terms and the EBIT margin could be slightly below the forecast 20%.”

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Clare Nicholls

The author Clare Nicholls

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