Rational: Good demand momentum, though margins still need help

Research evidence excerpt

Rational: Good demand momentum, though margins still need help

52 Week range EUR 771.52-600.13were affected but recovered in June with €10-15m higher backlog at the end of the quarter than

previously. The China market has remained subdued and will likely take a few more quarters to

ramp up sales and new products. Although, RAA sees lower margin impact from tariffs (section

232 rate down from 25% to 15%) but higher than expected raw material costs - the company

maintains its FY26 EBIT margin guidance of 25-26% but this now includes the €14m tariff refund

(which will create a one-time boost to margins in 2Q, we estimate it at 28.6%).

Distributor commentary suggests still decent activity in the US.We recently spoke with a Source: IDC

leading distributor of combi ovens in the US, operating in one of Rational's fastest growing Link to Barclays Live for interactive charting

regions, and ranked among the top-10 distributors for Rational combi ovens in the US (which

accounts for >50% of the distributor's combi oven sales on top of other brands like Alto-Shaam European Capital Goods

and Convotherm). While the overall kitchen equipment market has been showing flattish Timothy Lee, CFA

demand in the US YTD, the distributor has continued to record growth in combi oven sales +44 (0)20 7773 6879

which has far outpaced other product categories (including sales of Rational ovens), and it has timothy.lee@barclays.com

seen peers also showing a similar pattern. The key driver remains the increasing penetration of Barclays, UK

combi ovens to replace traditional appliances, given the wider acceptance of technology (even Vlad Sergievskii

+44 (0)20 7116 1117

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies vlad.sergievskii@barclays.com