Half Year 2026 RATIONAL AG Earnings Call - Post Earnings

August 11, 2026

Speaker #1: Hello? Can you hear me?

Speaker #2: Yeah. Hi, Stefan. I think I hear you.

Speaker #1: So, what is—what is the problem? We have an echo. Okay. Is it better now? Can anybody mute, please? So, how is it now?

Speaker #1: Is it better?

Speaker #2: Yeah, it's good. Stefan.

Speaker #1: Okay, perfect. Thank you very much. I think we should start—it's now two minutes after two, and I think the vast majority is already in.

Stefan Arnold: Perfect. Thank you very much. I think we should start. It is now 2 minutes after 2:00, and I think the big majority is already in. Again, good afternoon ladies and gentlemen, and a warm welcome to the IR follow-up talk on H1 2026. With me, as you can see, my colleague Laura. Some housekeeping rules at the very beginning. I think it works now. Everybody is on mute, and if you want to ask questions later on in the Q&A, please raise your hand and unmute yourself, and then please switch on the camera so that we can see you when you ask your questions. Before we go over to the Q&A, just a quick update on last week's, or a quick summary of last week's call and results. As said, after that, then the Q&A.

Stefan Arnold: Perfect. Thank you very much. I think we should start. It is now two minutes after 2:00PM, and I think the big majority is already in. Again, good afternoon ladies and gentlemen, and a warm welcome to the IR follow-up talk on H1 2026. With me, as you can see, my colleague Laura. Some housekeeping rules at the very beginning. I think it works now. Everybody is on mute, and if you want to ask questions later on in the Q&A, please raise your hand and unmute yourself, and then please switch on the camera so that we can see you when you ask your questions. Before we go over to the Q&A, just a quick update on last week's, or a quick summary of last week's call and results. As said, after that, then the Q&A.

Speaker #1: So now, again, good afternoon, ladies and gentlemen, and a warm welcome to the IR follow-up talk on the first half of 2026. With me, as you can see, is my colleague Laura.

Speaker #1: And some housekeeping rules at the very beginning: I think it works now. Everybody is on mute, and if you want to ask questions later on in the Q&A, please raise your hand and unmute yourself, and then please switch on the camera so that we can see you when you ask your questions.

Speaker #1: Before we go over to the Q&A, just a quick update or a quick summary of last week's call and results. And as I said, after that, then the Q&A.

Speaker #1: And just a hint for you: we will try now to record or transcribe this call for internal use. So if you are not— if you don't want to have that, please let us know.

Stefan Arnold: Just a hint for you, we will try now to record or transcribe this call for internal use. If you do not want to have that, please let us know. Again, as said, before we move straight into the Q&A, just a brief summary of the key points. Oh, sorry. Now back again. To start again, before we move into the Q&A, let me briefly summarize last week's key points from the earnings call, and then we start to discuss these topics in the Q&A. Overall, H1 2026 developed in line with our expectations. Despite the geopolitical and economic uncertainties in some markets, and of course, also noticeable currency effects, especially in Q1, we continued to grow. We held the profitability at a high level and confirmed the outlook for the full year.

Speaker #1: So again, as said before we move straight into the Q&A, then just a brief summary of the key points. Hello. Sorry. Now back again.

Speaker #1: So, yeah, to start again, before we move into the Q&A, let me briefly summarize last week's key points from the earnings call. Then we will start to discuss these topics in the Q&A.

Speaker #1: So, overall, the first half of 2026 developed in line with our expectations. So, despite the geopolitical and economic uncertainties in some markets and, of course, also notable currency effects, especially in Q1, we continued to grow.

Speaker #1: We held profitability at a high level and confirmed our outlook for the full year. So, crucially for us, the underlying demand for our cooking systems and solutions remains intact.

Stefan Arnold: Crucially for us, the underlying demand for our cooking systems and solution remains intact and the structural demand for efficient and automated cooking systems is really high, in particular against the backdrop of the ongoing shortage of skilled workers in the hospitality sector. Let us come to sales revenues performance and the regional development. Sales revenues came out at EUR 642 million in H1, and this corresponds to an organic growth rate of 8% or 6% reported growth after currency effects. In Q2, revenue stood at EUR 324 million. This is 4% higher than in the previous year, and here we had no relevant FX effects anymore. Important to note here is that Q1 in the USA was supported by pull forward effects linked to the pricing measures, which was then, of course, missing in Q2.

Speaker #1: And the structural demand for efficient and automated cooking systems is really high, particularly against the backdrop of the ongoing shortage of skilled workers in the hospitality sector.

Speaker #1: So, let's come to sales revenues performance and regional development. Sales revenues came out at €642 million in the first half. This corresponds to an organic growth rate of 8%, or 6% reported growth after currency effects.

Speaker #1: In the second quarter, revenues stood at €324 million. This is 4% higher than in the previous year, and here we had no relevant FX effects anymore.

Speaker #1: Important to note here is that the first quarter in the USA was supported by pull-forward effects, linked to the pricing measures which was then, of course, missing in Q2.

Speaker #1: We estimate these effects to have amounted to around €6 to €8 million. And overall, this paints a consistent picture for the first half of the year.

Stefan Arnold: We estimate these effects to have amounted to around EUR 6 to 8 million, and overall, this paints a consistent picture for H1. Solid growth, demand was robust, and the performance more or less was in line with our expectations. Regionally, Europe remains the key growth driver. Germany grew by 9%, as did the European markets outside Germany. Here, Austria, Spain, Scandinavia, Switzerland, and Eastern European countries, amongst others, performed particularly well. In North America, reported growth stood at 4%, but was around 10% on a currency-adjusted basis, so organic growth. For us, the US market remains the most important growth market in the long term, with its huge untapped potential.

Speaker #1: So, solid growth—demand was robust, and performance was more or less in line with our expectations. Regionally, Europe remains the key growth driver.

Speaker #1: So Germany grew by 9%, as did the European Germany. And here, Austria, Spain, Scandinavia, Switzerland, and Eastern European countries amongst others performed particularly well.

Speaker #1: In North America, reported growth stood at 4%, but was around 10% on a currency-adjusted basis—so, organic growth. For us, the US market remains the most important growth market in the long term, with this huge untapped potential.

Speaker #1: And for the second half of the year, and also for the future, we expect further growth here in the North American territory of around, let's say, 10 to 15%.

Stefan Arnold: For H2, and also for the future, we expect further growth here in the North American territory of around, let's say, 10% to 15%, so double-digit growth should be realistic here. Asia, on the other hand, was weighed down, particularly by China. There, turnover fell significantly, mainly due to the conversion by Yum China to increasingly source combi ovens locally. At the same time, we also see positive signs. The so-called street business is performing quite well. The sales team or sales organization for the iCombi One is now mostly in place. Dealer development is continuing, as we know it from RATIONAL in former times, and we already have secured a first key account tender for the iCombi One. In the short term, China really remains challenging, but in the long term, we continue to see and hear really attractive opportunities.

Speaker #1: So double-digit growth should be realistic here. Asia, on the other hand, was weighed down, particularly by China. There, turnover fell significantly, mainly due to the conversion by Yum!

Speaker #1: China is increasingly sourcing combi ovens locally. But at the same time, we also see positive signs. So, the so-called street business is performing quite well.

Speaker #1: Sales team or sales organization for the iCombi One is now mostly in place. Dealer development is continuing as we know it from rational informal times.

Stefan Arnold: `Dealer development is continuing, as we know it from RATIONAL in former times, and we already have secured a first key account tender for the iCombi One. In the short term, China really remains challenging, but in the long term, we continue to see and hear really attractive opportunities.

Speaker #1: And we have already secured a first key account tender for the iCombi One. So, in the short term, China really remains challenging, but in the long term, we continue to see really attractive opportunities here.

Speaker #1: Other Asian markets, like Japan, are performing well and, when adjusted for currency effects, we even see good growth rates in these markets. When we come to products and innovation—at the product level, the iCombi remains, of course, the backbone of our business, with revenue of more than €560 million and 5% growth.

Stefan Arnold: Other Asian markets like Japan are performing well and adjusted for currency effects, we even see good growth rates in these markets. When we come to products and innovation, at the product level, the iCombi remains, of course, the backbone of our business with a revenue of more than EUR 560 million and 5% growth. The iVario, so the smaller part of the business, once again performed significantly more strongly, growing by 14% to close to EUR 80 million. This is in line with our expectations, as the market penetration for the iVario is still lower. This means there is a bigger opportunity to grow and therefore higher growth rates.

Speaker #1: And the iVario, so the smaller part of the business, once again performed significantly more strongly, growing by 14% to close to €80 million.

Speaker #1: And so this is in line with our expectations. As the market penetration for the iVario is still lower, this means there is a bigger opportunity to grow and therefore higher growth rates.

Speaker #1: On the iHexagon, we are still not publishing detailed figures, but as said in the call, we are satisfied with the development and, of course, we are also seeing an increasing number of users confirming all the benefits of the technology in practice.

Stefan Arnold: On the iHexagon, we are still not publishing detailed figures, but, as said in the call, we are satisfied with the development and of course, we are also seeing an increasing number of users confirming all the benefits of the technology in practice as we saw in this movie in the core. Another important highlight in Q2 always is the National Restaurant Association show, so the NRA show in Chicago, which is always an important barometer for the mood in the industry. We held 52 arena shows. As Peter said, we generated more leads than in previous years. This is a positive development and we received very good feedbacks from our customer here. This underlines the potential and of course, the strategic importance of the US market.

Speaker #1: As we saw in this movie, in the call. Another important highlight in Q2 always is the national restaurant association show. So the NRA show in Chicago which is always an important barometer for the mood in the industry.

Speaker #1: And we held 52 arena shows. We as Peter said, we generated more leads than in previous years. So this is a positive development and we received very good feedbacks from our customer here.

Speaker #1: And so, this underlines the potential and, of course, the strategic importance of the US market. When we look at earnings, costs, and the balance sheet—before we go into the figures here, please let me give you one hint on the booking of the tariff refunds.

Stefan Arnold: When we look at earnings costs and the balance sheet, before we go into the figures here, please let me give you one hint on the booking of the tariff refunds. These amounted to around EUR 40 million. At first, as we communicated, I think in the last meetings, we intended to book this in the other operating income line. But after getting some statements from auditor organizations, we then decided to book it as a deduction from the cost of goods sold as they recommend and as also our auditor recommends. This means that this refund positively affected the gross margin, which then came out at 59.8%, 80 basis points above previous year's level. Adjusting for the tariff refund, the gross margin would be at 57.6%, 140 basis points below H1 2025.

Speaker #1: So, these amounted to around €14 million. And at first, as we communicated—I think in the last meetings—we intended to book this in the 'other operating income' line.

Speaker #1: But after getting some statements from auditor organizations, we then decided to book it as a deduction from the cost of goods sold as they recommend and as also our auditor recommends.

Speaker #1: So, this means that this refund positively affected the gross margin, which then came out at 59.8%—so 80 basis points above the previous year's level.

Speaker #1: Adjusting for the tariff refund, the gross margin would be at 57.6%. So 140 basis points below H1 2025. And this is then reflecting the higher cost levels we see mainly for the logistics and for the tariff expenses we were facing.

Stefan Arnold: This is then reflecting the higher cost levels we see mainly for the logistics and for the tariff expenses we were facing. EBIT rose by 11% to EUR 170 million in the H1, and the EBIT margin stood at 26.5%, its highest level now for a few years. The one-off effect from the tariff refund in the US was also significantly increasing the EBIT margin. Without this effect, the EBIT margin would be at around 24.3%, which is in line with our guidance. Due to the seasonality we see throughout the year, it is normal that in H2, the EBIT margin is lower, and so the range of 25% to 26% would be realistic even without the tariff refund. For the full year, we expect tariff expenses to amount to around EUR 28 to 20 million.

Speaker #1: EBIT rose by 11% to 170 million euros in the first half. And the EBIT margin stood at 26.5%. So its highest level now for a few years.

Speaker #1: So, the one-off effect from the tariff refund in the US was also significantly increasing the EBIT margin. Without this effect, the EBIT margin would be around 24.3%, which is in line with our guidance.

Speaker #1: So, due to the seasonality we see throughout the year, it is normal that in H2 the EBIT margin is lower. And so the range of 25 to 26% would be realistic even without the tariff refund.

Speaker #1: Sorry. For the full year, we expect tariff expenses to amount to around €28 to €30 million. So for 2027, this burden may be slightly higher due to the growing US business.

Stefan Arnold: For 2027, this burden may be slightly higher due to the growing US business. You know, in general that as a matter of principle, we try to cushion all the cost effects through efficiency gains. We are now reviewing maybe possible pricing measures, and we do not rule out this in case of the cost levels remaining that high, as we also see costs for steel, for material, for electronics increasing now. In terms of the operating costs, we are continuing to invest selectively in strategic priorities. R&D expenses rose by 7%, and sales and service increased by around 5%, while at the same time we remain very disciplined regarding the costs not directly related to sales, which is mainly the admin costs that are more or less stable. Balance sheet remains still very strong.

Speaker #1: And you know, in general, that as a matter of principle, we try to cushion all the cost effects through efficiency gains. We are now reviewing maybe possible pricing measures yeah, and we do not rule out this in case of the cost levels remaining that high as we also see costs for steel for material for electronics increasing now.

Speaker #1: In terms of the operating costs, we are continuing to invest selectively in strategic priorities. So R&D expenses rose by 7% and sales and service increased by around 5%, while at the same time we remain very disciplined regarding the costs not directly related to sales, which is mainly the admin costs that are more or less stable.

Speaker #1: The balance sheet remains very strong. The higher inventory levels that we were seeing are primarily due to the new warehouse in Dubai and higher stock levels in overseas markets to ensure delivery capacity.

Stefan Arnold: Higher inventory levels that we were seeing are primarily due to the new warehouse in Dubai and higher stock levels in overseas markets to ensure now delivery capacity. Higher levels of accounts payable are rather a balance sheet debt effect. When we go into the outlook, for the full year, this means we are confirming our forecast. We continue to expect revenue growth in the mid to high single-digit percentage range. For the EBIT margin, we are holding the range of 25% to 26%. But due to the tariff refund, we currently expect to be rather closer to the upper end of this range. With this, let's go over to Q&A. First question, Opie.

Speaker #1: And higher levels of accounts payable are rather a balance sheet date effect. So when we look into the or when we go into the outlook, so for the full year, this means we are confirming our forecast.

Speaker #1: We continue to expect revenue growth in the mid- to high-single-digit percentage range. And for the EBIT margin, we are holding the range of 25 to 26%.

Speaker #1: But due to the tariff refund, we currently expect to be rather closer to the upper end of this range. So with this, let's go over to Q&A.

Speaker #1: So first question, OP. So where is?

Speaker #2: 5, 7.

[Analyst]: Hi, Stefan.

[Analyst 1]: Hi, Stefan.

Speaker #1: Hello, OP.

Stefan Arnold: Hello, Opie.

Speaker #2: Hi. Three questions from my end. Maybe just on margin. I know you've talked about it a bit and Peter did on the call, but sort of effectively if you assume 26%, the high end of range, effectively are sort of 25% for H2, which is sort of 2% lower.

[Analyst]: Hi. Three questions from my end. Maybe just on margin. I know you've talked about it a bit, and Peter did on the call, but effectively if you assume 26%, the high end of your range effectively are 25% for H2, which is 2% lower. Do you mind just talking through key drivers there? Is this 25.5%, if I do the right, EBIT margin to be thinking for H2 implied? My second question would be backlog. I think Peter said you're going into H2 with a bigger backlog than normal in the US, but also the key accounts in China. Do you mind just giving some sizing on those if you can? Lastly, on pricing, have competitors done anything in pricing in the US, obviously, given the higher products they're facing as well?

[Analyst 1]: Hi. Three questions from my end. Maybe just on margin. I know you've talked about it a bit, and Peter did on the call, but effectively if you assume 26%, the high end of your range effectively are 25% for H2, which is 2% lower. Do you mind just talking through key drivers there? Is this 25.5%, if I do the right, EBIT margin to be thinking for H2 implied? My second question would be backlog. I think Peter said you're going into H2 with a bigger backlog than normal in the US, but also the key accounts in China. Do you mind just giving some sizing on those if you can? Lastly, on pricing, have competitors done anything in pricing in the US, obviously, given the higher products they're facing as well?

Speaker #2: So, do you mind just talking through the key drivers there? And is this 25% or 25.5% effectively the right EBIT margin to be thinking about for H2 implied?

Speaker #2: And then maybe the second question would be about the backlog. I think Peter said you're going into H2 with a bigger backlog than normal in the US, but also with the key accounts in China.

Speaker #2: So do you mind just giving some sizing on those if you can? And then lastly on pricing, have competitors done anything in pricing in the US?

Speaker #2: Obviously, given the higher costs they're facing as well.

Speaker #1: Then let's start with their margin question. I would say, yeah, as you said, 25 is maybe a realistic ballpark number to assume, probably then for H2.

Stefan Arnold: Let's start with the margin question. I would say, yeah, as you said, the 25.5% is maybe a realistic ballpark number to assume for H2. Compared to the 24.3%, which we would have without the tariff refund, maybe this is, let's say, a region where we say this is an increasing margin compared to H1. But then of course, plus the EUR 14 million refund, and this would then mean, as you said, 26% flat. From that point of view, I would say this ballpark number is quite okay. Backlog, we announced that the level is around EUR 10 to 15 million elevated compared to former quarter ends, which means we were not able to really deliver all the high order intake we saw in June.

Speaker #1: So compared to the 24.3, which we would have without the tariff refund, maybe this is, let's say, sort of a region where we say this is an increasing margin compared to H1.

Speaker #1: But then of course plus the 40 million refund and this would then mean as you said 26 point flat or 26% flat. So from that point of view, I would say this ballpark number is quite okay.

Speaker #1: Backlog—we announced that the level is around €10 to €15 million elevated compared to former quarter-ends. Which means we were not able to really deliver all the high order intake we saw in June.

Speaker #1: This will at least partly be feelable in Q3. And so this should support a little bit, or be a good starting point going into Q3.

Stefan Arnold: This will at least partly be feelable in Q3, so this should support a little bit or be a good starting point into Q3. 10 to 15 million was here the ballpark number. Regarding pricing, I think here we are still in discussions. It is no final decision yet at which magnitude, at which scope. Will it be global? Will it be selective? Will it be, I would say, rather in the lower single-digit range? Otherwise, we do not have the final decision yet. Will it be on what product groups will it be? I think there are different scenarios. The board is now playing here in order to find the right decision. There is no final decision we can communicate today.

Speaker #1: So, 10 to 15 million was here the ballpark number. And regarding pricing, I think here we are still in discussions; it is no final decision yet.

Speaker #1: At which magnitude, at which scope, will it be global? Will it be selective? I would say rather in the lower single-digit range, but otherwise, we do not have the final decision yet.

Speaker #1: And will it be on—what product groups will it be? I think there are different scenarios the board is now playing here in order to find the right decision.

Speaker #1: But there is no final decision we can communicate today.

Speaker #2: That helps. And just on pricing, have competitors done anything on pricing?

[Analyst]: That helps. Just on pricing, have competitors done anything on pricing?

[Analyst 1]: That helps. Just on pricing, have competitors done anything on pricing?

Speaker #1: Our competitors, yeah. Sorry. We didn't see anything so far. Let's say it that way. Sometimes you know pricing is played over the discounts. So you don't change list prices, but you maybe to some extent change then your discounts.

Stefan Arnold: Our competitors, yeah, sorry. We did not see anything so far, let us say it that way. Sometimes, pricing is played over the discounts. You do not change list prices, but you maybe to some extent change then your discount. This is something from the outside perspective we cannot see, but there are no list price changes we know so far.

Speaker #1: And this is something from the outside perspective. We cannot see, but there is no list price changes we know so far.

Speaker #2: Okay. Thanks very much.

Speaker #1: Thank you.

[Analyst]: Okay. Thanks very much.

[Analyst 1]: Okay. Thanks very much.

Stefan Arnold: Thank you.

Speaker #3: Maybe I'll jump in with a couple of questions. So maybe just on the order backlog, should we extrapolate really anything from the June strength?

[Analyst]: Maybe I will jump in with a couple of questions. So maybe just on the order backlog, should we extrapolate really anything from the June strength? Because you flagged the NRA fair in Chicago in May, so I am just not sure, should we see this as having a boost on your order backlog? Is that explaining a lot of the order backlog strength? That is question one. Question two, just on the China weakness you flagged. Is the underlying message unchanged on iCombi One, meaning no significant contribution this year? Is there a risk in your view that the product does not meet your internal targets based on what you have described on the key accounts in China? That is question two. Then just thirdly, just on the sales and servicing cost.

[Analyst 2]: Maybe I will jump in with a couple of questions. So maybe just on the order backlog, should we extrapolate really anything from the June strength? Because you flagged the NRA fair in Chicago in May, so I am just not sure, should we see this as having a boost on your order backlog? Is that explaining a lot of the order backlog strength? That is question one. Question two, just on the China weakness you flagged. Is the underlying message unchanged on iCombi One, meaning no significant contribution this year? Is there a risk in your view that the product does not meet your internal targets based on what you have described on the key accounts in China? That is question two. Then just thirdly, just on the sales and servicing cost.

Speaker #3: Because you had flagged the NRA fair in Chicago in May, I'm just not sure—should we see this as having a boost on your order backlog?

Speaker #3: Is that explaining a lot of the order backlog strength? That's question one. Question two, just on the China weakness you've flagged. Is the underlying message unchanged on I can be one?

Speaker #3: Meaning no significant contribution this year and is there a risk in your view that the product doesn't meet your internal targets based on what you've described on the key accounts in China?

Speaker #3: That's question two. And then just thirdly, on the sales and servicing cost, if you could give us a sense of the share of sales cost versus servicing within that line on the P&L.

[Analyst]: Just if you could give us a sense of the share of sales costs versus servicing within that line on the P&L, it would be helpful. Thanks.

[Analyst 2]: Just if you could give us a sense of the share of sales costs versus servicing within that line on the P&L, it would be helpful. Thanks.

Speaker #1: Be helpful. Thanks. Just a moment. Okay. So backlog, if you if I understand you correctly, you think whether we should extrapolate the positive effects from Q2 into the rest of maybe rather not.

Stefan Arnold: Mm-hmm. Just a moment. Okay. So, backlog. If I understand you correctly, you think whether we should extrapolate the positive effects from Q2 into the rest of the year. We would say maybe rather not. Sometimes it is a fluctuation you have, especially sometimes at quarter end, so that a March or a June is very strong and then you see, we were not able to deliver this and then this will be washed out maybe over the next month. So from that point of view, I would not extrapolate it.

Speaker #1: Sometimes it's a fluctuation you have, especially sometimes at the quarter end, so that March or June is very strong and then you see, yeah, we were not able to deliver this and then this will be washed out maybe over the next month.

Speaker #1: So, from that point of view, I would not extrapolate that.

Speaker #3: Maybe just to complement, you mentioned the NRA in May. So I'm just wondering if that boosted the order backlog in June basically. And I'm not I don't remember when it was last year.

[Analyst]: Okay. Maybe just to complement.

[Analyst 2]: Okay. Maybe just to complement.

[Analyst]: You mentioned the NRA in May. I am just wondering if that boosted the order backlog in June, basically. I do not remember when it was last year.

[Analyst 2]: You mentioned the NRA in May. I am just wondering if that boosted the order backlog in June, basically. I do not remember when it was last year.

Speaker #3: So just.

Speaker #1: Okay. It's always at the same time, definitely. So it's not a special impact from the NRA show now compared to the previous year. That China weakness, yeah, there are, let's say, three important parts we are having here.

Stefan Arnold: Okay. It is always at the same time.

[Analyst]: Yeah. Ultimately.

[Analyst 2]: Yeah. Ultimately.

Stefan Arnold: It is not a special impact from the NRA compared to previous year.

[Analyst]: Yeah

[Analyst 2]: Yeah

Stefan Arnold: But China weakness, there are, let us say, the three important parts we are having here. On the one hand, the quite subdued consumer sentiment we are seeing still in China. On the other hand, let us say that we are now lagging a little bit behind in building up the sales organizations compared to other markets. This is an ongoing process we are seeing now. And the third thing is that China was changing its purchase behavior toward more local sourcing. This is of course impacting us for sure, and we think with the iCombi One, we can here counteract to some extent. On the one hand, that we are addressing more price-sensitive customers with a cheaper unit, which is of course less powerful compared to the iCombi Pro, which is still for sale and which is still relevant for many customers, of course.

Speaker #1: So on the one hand, the quite subdued consumer sentiment we are seeing still in China. On the other hand, let's say the that we are now lagging a little bit behind in building up the sales organizations compared to other markets.

Speaker #1: This is an ongoing process. What we are seeing now, as the third point, is that China is changing its purchasing behavior toward more local sourcing.

Speaker #1: So this is of course yeah, impacting us for sure. And we think with the I can be one, we can hear counteract to some extent on the one hand that we are addressing more price sensitive customers with a cheaper unit.

Speaker #1: Which is, of course, less powerful compared to the iCombi Pro, which is still for sale and is still relevant for many, many customers, of course.

Speaker #1: And so from that point of view, we think we can yeah, counteract here in a positive way. And whether it will be then in the end perceived by the customers as we are expecting this is something we will see now we see first a first tender we won as we said a bigger tender with a key account.

Stefan Arnold: From that point of view, we think we can counteract here in a positive way. Whether it will be then in the end perceived by the customers as we are expecting, this is something we will see. We see a first tender we won, as we said, a bigger tender with a key account. We see a continuous development now, and from that point of view, we are quite satisfied with the development, and we will then learn maybe by the end of the year or so, or in fall, that we say, "Is everything running in the direction that we expected, or do we maybe need to make some changes?" This will be assessed then.

Speaker #1: We see a continuous development now. And from that point of view, we are quite satisfied with the development. And we will then learn maybe by the end of the year or so or in fall that we say is everything running in the direction that we expected or do we maybe do some need to make some changes.

Speaker #1: This will be assessed then.

Speaker #3: Okay, cool. And the third one was on the sales and servicing costs.

[Analyst]: Okay, cool. The third one on sales and servicing costs?

[Analyst 2]: Okay, cool. The third one on sales and servicing costs?

Speaker #1: Okay. I think sales cost is around 19% or so of sales revenues, and 4 to 5% or so is servicing. But I just need to check.

Stefan Arnold: Okay. I think sales cost is around 19% or so of sales revenues and 4% to 5% or so is servicing, but I just need to check. Do you have it, Laura? Let me just

Speaker #1: Do you have it, Laura? Let me just.

Speaker #3: Maybe while Laura is looking for that. For the CMD, so I understand we should expect a virtual event. Basically the focus will be just if you could give us some color.

[Analyst]: Maybe while Laura is looking for that, for the CMD, I understand we should expect a virtual event.

[Analyst 2]: Maybe while Laura is looking for that, for the CMD, I understand we should expect a virtual event.

Stefan Arnold: Yes.

[Analyst]: Basically, the focus will be, just if you could give us some color. Yeah.

[Analyst 2]: Basically, the focus will be, just if you could give us some color. Yeah.

Speaker #3: Yeah.

Speaker #1: Yes. Yes. So the CMD, we are planning after now a few years that we had really live and we got some feedback that maybe we really shouldn't need to present something new that it is worth traveling for the people.

Stefan Arnold: Yes. The CMD, we are planning, after now a few years that we had really live and we got some feedback that maybe we really should need to present something new, that it is worth traveling for the people. Then we had the idea to go over to, for this year, to do a ConnectedCooking, sort of a ConnectedCooking webinar, so virtual products. Of course, then followed by a Q&A session, like always, that you can ask any question you think is relevant here. But in order to give you an impression of the world of ConnectedCooking, which is, I think, quite relevant these days, more and more is helping.

Speaker #1: And then we had the idea to go over, for this year, to do a connected cooking—sort of a connected cooking webinar. So, virtual products.

Speaker #1: And this will of course then be followed by a Q&A session, like always, where you can ask any question you think is relevant here. But in order to give you an impression of the world of connected cooking—which is, I think, quite relevant these days more and more—is helping.

Speaker #1: And then, next year, hopefully everything works out well with the new service parts center, so that in 2027 we can welcome you back in Landsberg and show you some news here at the Landsberg location.

Stefan Arnold: Next year, hopefully everything works out well with the new service parts center, so that in 2027, we can then welcome you back in Landsberg and show you some news here at the Landsberg location.

Speaker #3: Thanks.

[Analyst]: Thanks.

[Analyst 2]: Thanks.

Speaker #1: So, okay. Okay. So, service is around 3% of sales revenues, and sales expenses—that is, sales and marketing—are around 20%. So, OP has another question.

Stefan Arnold: Okay. Service is around 3% of sales revenues, and sales expenses is around. Sales and marketing is around 20%. Opie has another question. You are still mute, Opie, I think.

Speaker #1: Oh, you're still mute, OP, I think.

Speaker #2: Sorry, two questions. One is on Germany and the other is a follow-up on tax. I think Germany Q1 was quite strong, and Q2 is reasonably strong as well.

[Analyst]: Sorry. Two questions. One is on Germany, and one is a follow-up on tax. In Germany, Q1 was quite strong. Q2 is really strong as well. From Q2 last year, comps are getting quite hard. How should we think of that in H2 this year? I know part of Q1 was due to a one-off from a dealer restocking, but was the strength in Q2 actually more underlying demand versus a one-off event? For tax, for this year, do you mind just helping us think about how to think of the rates, just because last year was slightly higher than normal, and so is 24% the right

[Analyst 1]: Sorry. Two questions. One is on Germany, and one is a follow-up on tax. In Germany, Q1 was quite strong. Q2 is really strong as well. From Q2 last year, comps are getting quite hard. How should we think of that in H2 this year? I know part of Q1 was due to a one-off from a dealer restocking, but was the strength in Q2 actually more underlying demand versus a one-off event? For tax, for this year, do you mind just helping us think about how to think of the rates, just because last year was slightly higher than normal, and so is 24% the right

Speaker #2: But actually, from sort of page two, last year's comps are getting quite hard. So how should we think of that on page two this year?

Speaker #2: And sort of I know part of Q1 was due to a one-off from a dealer. Restocking but sort of was the strength in Q2 actually more underlying demand versus a one-off event.

Speaker #2: And then for tax, for this year, do you mind just helping us think about how to consider the rates, just because last year was slightly higher than normal?

Speaker #2: And so, sort of 24% is the right number to be thinking of.

Speaker #1: Yeah, so I think on Germany itself, I think there is not one special effect that we are having. It's a general, broad, good development.

Stefan Arnold: Yeah

[Analyst]: number to be thinking of?

[Analyst 1]: number to be thinking of?

Stefan Arnold: Yeah. I think on Germany itself, there is not that one special effect that we are having. It is in general a broad good development. I think with some dealer stockings, you always have this to some extent, and then this is gone, and then they sell off the stocks they are having. Maybe in H1 in total, this is maybe not this big impact anymore. We had really for the German-speaking area, in Austria and Switzerland, for example, we had bigger tenders from supermarkets. This indeed helped here to realize this overproportional growth. All over, good development here. Sometimes you have this case that you say there is not the one reason, it is really in general a broad good development.

Speaker #1: And I think with some dealers talking, you always have this to some extent, and then this is gone, and then they sell off the stocks they are having.

Speaker #1: So maybe in H1, in total, this is maybe not such a big impact anymore. We had, really, for the German-speaking area in Austria and Switzerland, for example, we had bigger tenders from supermarkets.

Speaker #1: So this indeed helped here to realize this over-proportional growth. But overall, good development here, and sometimes you have this case that you say there is not the one reason.

Speaker #1: It's really, in general, a broadly good development. And when you remember back, maybe two or three years ago in Germany, we shrank. And then the explanation was, we don't have the one explanation for this right now.

Stefan Arnold: When you remember back, maybe I think two or three years in Germany, we shrank, and then the explanation was, we do not have the one explanation for this right now. Here sometimes, the good work you did, maybe the month or the years before are bearing fruits. Afterwards, maybe you work harder on onboarding people, and then you see this in a negative sales development maybe a few months ago, because you invest more in internal things. On the tax, we have these fluctuations. In 2024, I think we had a very low tax rate because we capitalized some deferred tax assets in Switzerland. This is in connection with the Swiss tax system we are in, where we were able then to capitalize some deferred tax assets, which we needed to depreciate, or is amortize here the right word? I do not know. In 2024.

Speaker #1: So here, sometimes the good work you did maybe the month or the years before are bearing fruit. And then afterwards, maybe you work harder on onboarding people, and then you see this in a negative sales development maybe a few months ago.

Speaker #1: Because you invest more in internal things. On the tax, we have these fluctuations. In '24, I think we had a very low tax rate because we activated or recapitalized some deferred tax assets in Switzerland.

Speaker #1: This is in connection with the Swiss tax system we are in, where we were then able to capitalize some different tax assets, which we needed to depreciate—or is 'amortize' the right word here?

Speaker #1: I don’t know. In 2024—so we had, so the average is approximately the tax we would assume now for the next year. So, it depends then on local developments and whether we need to amortize these assets.

Stefan Arnold: The average is approximately the tax we would assume now for the next year. It depends then on local developments and whether we need to amortize these assets. From that point of view, here there might be some fluctuations, but the average rate, I think it is 24 point flat percent approximately is something realistic.

Speaker #1: So from that point of view, there might be some fluctuations, but the average rate—I think it's 24 percent flat, approximately—is something realistic.

Speaker #2: Okay. And maybe just on DAX actually was the strong supermarket orders was that I hexagon or was it quite broad based amongst the product groups?

[Analyst]: Okay. Maybe just on DACH actually, was the strong supermarket orders, was that iHexagon or was it quite broad-based among product groups?

[Analyst 1]: Okay. Maybe just on DACH actually, was the strong supermarket orders, was that iHexagon or was it quite broad-based among product groups?

Speaker #1: No, no. I would say that in supermarkets we mainly see iCombis.

Stefan Arnold: No, I would say in supermarkets we mainly see iCombis.

Speaker #2: Okay.

[Analyst]: Okay.

[Analyst 1]: Okay.

Speaker #1: Perfect. So is there any more questions?

Stefan Arnold: Perfect. Are there any more questions?

Speaker #4: Hi, Stefan. May I ask a question? Hi, how are you? Nice to see you.

[Analyst]: Hi, Stefan. May I ask a question?

[Analyst 3]: Hi, Stefan. May I ask a question?

Stefan Arnold: Oh, hello, Marcia. Yeah.

Speaker #1: Good. You?

[Analyst]: Hi, how are you? Nice to see you.

[Analyst 3]: Hi, how are you? Nice to see you.

Speaker #4: Good, thank you. Maybe just a follow-up on Germany. So, what should we—because obviously, this has always been a more mature market. So, in our models, we always had it more in the single-digit growth.

Stefan Arnold: Good. You?

[Analyst]: Good, thank you. Maybe just a follow-up on Germany. What should we, because obviously this has always been a more mature market, so in our models, we've always had it more in the single digit growth, and the growth has been coming in very nicely. How should we model it going forward? Do you think that these levels of growth that you've seen in the last couple of quarters is sustainable, or is there a reason that we should revert back to mid-single digit? Is the first question. On North America, basically, if I understand correctly, the backlog that carries over into Q3, it's roughly like maybe a 6% contribution in the H2. If you say 10% to 15% in H2 for North America, then that means, yeah, underlying it's 4% to 9%.

[Analyst 3]: Good, thank you. Maybe just a follow-up on Germany. What should we, because obviously this has always been a more mature market, so in our models, we've always had it more in the single digit growth, and the growth has been coming in very nicely. How should we model it going forward? Do you think that these levels of growth that you've seen in the last couple of quarters is sustainable, or is there a reason that we should revert back to mid-single digit? Is the first question. On North America, basically, if I understand correctly, the backlog that carries over into Q3, it's roughly like maybe a 6% contribution in the H2. If you say 10% to 15% in H2 for North America, then that means, yeah, underlying it's 4% to 9%.

Speaker #4: And the growth has been coming in very nicely. How should we model it going forward? Do you think that the levels of growth you've seen in the last couple of quarters are sustainable, or is there a reason we should revert back to the single digits?

Speaker #4: That's the first question. And then on North America, so basically, if I understand correctly, the backlog that carries over into Q3 is roughly like a maybe 6% contribution in the second half.

Speaker #4: So, if you say 10 to 15 percent in H2 for North America, then that means, yeah, underlying it's, yeah, for the nine. So, yeah, similar sort of, more or less, underlying growth that we saw in H1 and then the push forward from H1 into H2.

[Analyst]: So yes, similar sort of more or less underlying growth that we saw in H1 and then the push forward from H1 into H2. Is that the way to think about it?

[Analyst 3]: So yes, similar sort of more or less underlying growth that we saw in H1 and then the push forward from H1 into H2. Is that the way to think about it?

Speaker #4: Is that the way to think about it?

Speaker #5: So for Germany maybe first. So in the long term we still expect the lower single digit growth. So at the moment it's really exceptional high we would say.

Laura Deininger: For Germany maybe first. In the long term, we still expect the lower single-digit growth. At the moment it is really exceptional high, we would say. We are very happy about it, but for the long term, we would rather say that we are satisfied with the lower single-digit-

Speaker #5: We are very happy about it. But for the long term we would rather say that we are satisfied with the lower single digit. Growth rates in Germany.

Stefan Arnold: Yeah

Laura Deininger: growth rates in Germany.

Speaker #1: And on the US, so we are talking about, let's say, organic growth levels. Meaning, we had 10% organic growth in the US in H2.

Stefan Arnold: On the US, we are talking about, let's say, organic growth levels, meaning, we had now 10% organic growth in the US in H2. In H1, sorry, and for H2, we are expecting more or less the same, so that we are staying in this magnitude of the 10% to 15% growth rates for this market as the potential is there. I hope I understood this correctly.

Speaker #1: In H1, sorry. And for H2, we are expecting more or less the same, so that we are staying in this magnitude of the 10% to 15% growth rates for this market, as the potential is there.

Speaker #1: I hope I understood this correctly.

Speaker #4: Okay. So are you think because you said 10 to 15 in H2? Yeah. No. Because I thought the orders that you couldn't book in Q2, they get pushed into Q3.

[Analyst]: Okay. Because you said 10% to 15% in H2. Yeah, no, because I thought the orders that you couldn't book in Q2, they get pushed into Q3. That's, yeah, technically they were Q2 orders. And then the underlying, and then there is in addition to that-

[Analyst 3]: Okay. Because you said 10% to 15% in H2. Yeah, no, because I thought the orders that you couldn't book in Q2, they get pushed into Q3. That's, yeah, technically they were Q2 orders. And then the underlying, and then there is in addition to that-

Speaker #4: That's yeah, technically they were Q2 orders. And then the underlying and then there's in addition to that the run rates underlying growth that you should see in H2.

Stefan Arnold: Yeah

[Analyst]: the run rates underlying growth that you should see in H2. That is how you get to the It is about-

[Analyst 3]: the run rates underlying growth that you should see in H2. That is how you get to the It is about-

Speaker #4: So that's how you get to the—it's about because the low double-digit million is like a 6% contribution to H2, roughly. So is that how you do the math to get to—help us, yeah, Bridget.

Stefan Arnold: Yeah

[Analyst]: because the low double-digit million is like a 6% contribution to H2, roughly. Is that how you do the math to get to the 10 to 15? Maybe you can help us, yeah, Brigitte, how you get to 10 to 15, why you are thinking 10 to 15 for H2.

[Analyst 3]: because the low double-digit million is like a 6% contribution to H2, roughly. Is that how you do the math to get to the 10 to 15? Maybe you can help us, yeah, Brigitte, how you get to 10 to 15, why you are thinking 10 to 15 for H2.

Speaker #4: How you get to 10 to 15? Why you're thinking 10 to 15 for H2?

Speaker #1: Because this is the long term assumption. We are having and I think whether it's 10, 11 or whether it's 13 or so this is then on short term topics.

Stefan Arnold: Because this is the long-term assumption we are having, and I think whether it is 10, 11 or whether it is 13 or so, this is then on short-term topics. This is sometime maybe the EUR 6 to 8 million will be maybe partly No, though, sorry, just the EUR 10 to 15 million-

Speaker #1: So this is sometimes maybe the 6 to 8 million will be maybe partly no, no, sorry. The 10 to 15 million which is partly in the US will be then again partly maybe seeable in Q3.

[Analyst]: Yeah

[Analyst 3]: Yeah

Stefan Arnold: which is partly in the US. Will be then again, partly maybe seeable in Q3. From that point of view, it will be within this range, in terms of the fluctuation, I would say.

Speaker #1: And from that point of view it will be within this range in terms of the fluctuation I would say.

Speaker #4: Okay. Thank you.

Speaker #1: You're welcome. So OP.

[Analyst]: Okay. Thank you.

[Analyst 3]: Okay. Thank you.

Stefan Arnold: You are welcome. Opie.

Speaker #2: Just on margins and sort of component cost. I'm just wondering do you have two sort of raised prices in other regions other than the US or sort of the US is really where you're seeing brown.

[Analyst]: Just on margins and component costs, I am just wondering, do you have to raise prices in other regions other than the US or the US is really where you are seeing higher costs?

[Analyst 1]: Just on margins and component costs, I am just wondering, do you have to raise prices in other regions other than the US or the US is really where you are seeing higher costs?

Speaker #2: So higher costs.

Speaker #1: This time this is rather a global topic than just the US topic. So if we are talking about a price increase my personal assumption here would be that we talk about a global price increase and not just on the US.

Stefan Arnold: This time, this is rather a global topic than just a US topic. If we are talking about a price increase, my personal assumption here would be that we talk about a global price increase and not just on the US. But we will see the decision. I think asset scope, magnitude, product groups as a regional scope, product groups, there is different scenarios on the table. But it will not be selectively for the US this time.

Speaker #1: And, yeah, but we will see the decision. I think, as said, scope, magnitude, product groups—so, regional scope, product groups—there are different scenarios on the table.

Speaker #1: And but it will not be selectively for the US this time.

Speaker #2: Okay. Thanks very much.

[Analyst]: Okay. Thanks very much.

[Analyst 1]: Okay. Thanks very much.

Speaker #1: Okay.

Stefan Arnold: Okay.

Speaker #3: Maybe I'll just go with a follow-up, because I got a little confused here by one of the answers. Just to clarify, the message on the order backlog at the end of Q2 was that you're basically €10 to €15 million above normal, right?

[Analyst]: Maybe I'll go with just a follow-up because I got a little confused here by one of the answers. Just the message on the order backlog at the end of Q2 was that basically you're EUR 10 to 15 million above normal, right?

[Analyst 2]: Maybe I'll go with just a follow-up because I got a little confused here by one of the answers. Just the message on the order backlog at the end of Q2 was that basically you're EUR 10 to 15 million above normal, right?

Speaker #1: Yes.

Speaker #3: Okay. Yeah. Yeah. Just went to double-check that. Thanks.

Stefan Arnold: Yes.

[Analyst]: Okay. Yeah.

[Analyst 2]: Okay. Yeah.

Stefan Arnold: Yeah.

[Analyst]: Just wanted to double-check that. Thanks.

[Analyst 2]: Just wanted to double-check that. Thanks.

Speaker #1: Okay. Perfect. So is there any more questions? Okay. Perfect. So then if not, I would say thank you very much for joining the call and for staying in contact with us.

Stefan Arnold: Okay, perfect. Is there any more questions? Perfect. Then, if not, I would say thank you very much for joining the call and for staying in contact with us. I hope we will meet again in November, at least in the earnings call. Until then, I wish you all the best, a good time, and see you soon. Bye-bye.

Speaker #1: And I hope we will meet again in November, at least in the earnings call. Until then, I wish you all the best, a good time, and see you soon.

Speaker #1: Bye-bye.

Speaker #2: All right. Thanks very much.

Speaker #3: Bye.

Speaker #4: Thank you. Bye.

[Analyst]: Bye. Thanks very much.

[Analyst 1]: Bye. Thanks very much.

Stefan Arnold: Bye.

[Analyst]: Thank you. Bye.

[Analyst 3]: Thank you. Bye.

Stefan Arnold: Bye-bye.

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Half Year 2026 RATIONAL AG Earnings Call - Post Earnings

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