Good afternoon and welcome back, a warm welcome from my side to our last presentation of today's new food conference. I'm happy to have with me Stefan Arnold, Head of Investor Relations at RATIONAL. Mr. Arnold will walk us through the company's presentation. He will provide us a deeper insight into the product portfolio and will also answer the questions. Before we dive in, a quick housekeeping note: the conference is being recorded and all participants are in a listen-only mode. If you have questions, please submit them using the chat box, and we will address them later in the Q&A session. Without further ado, I'll hand it over to you, Mr. Arnold. The floor is yours.
Thank you very much. My dear ladies and gentlemen, also a warm welcome from my side to today's presentation, and thank you very much for your interest. For those who do not know us, RATIONAL is the world market leader for multi-functional cooking devices for commercial food preparation. We have production facilities in Landsberg am Lech in Germany and in Wittenheim in France. In Landsberg, we produce the iCombi technology, so combi- steamers, and in Wittenheim, we produce the iVario, both for global export. You see the red-marked China here. We are about to build up a new production facility in China for a local combi- steamer to be completed at the end of 2025. With the 33 subsidiaries and more than 4,000 partners, we are selling our cooking systems right now in more than 100 countries of the world.
With the installed base of around 900,000 units, our customers are cooking around 180 million dishes per day. Next slide. For 50 years now, our aim has been to offer the best tools and solutions for cooking for all the different types of customers that we have. With this, we are indeed focusing on just one dedicated target group, and that is the people who produce food in commercial kitchens around the world. In this target group, our biggest groups are catering, so big canteens, and restaurants, so classic dine-in business, each with a share of around 40%. Our fastest-growing segments are indeed quick service and retail customers, like, for example, supermarkets or petrol stations, and this is a consequence of the trend to more snacking.
As said before, we are offering the greatest possible benefit, and here you can see why we are doing this, why this is paying off for a company to pursue customer benefit. With the customer benefit, then also all the financial KPIs are improving and indirectly leading to higher profits, which we can see here in the spiral. Part of these higher profits that we achieve through the customer benefit dedication go into further expanding customer benefit. For example, for developing new services or functions, or even the introduction of new technologies and better cooking intelligence, and, and, and all different things. This then leads to more customer benefit, and the cycle can start again. The major product is an intelligent combi- steamer, the iCombi Pro.
The iCombi is cooking in steam or in dry heat, or in a combination of both, for sure, and with this, it ensures outstanding cooking results. This means, for example, it keeps vitamins in vegetables or the meat juicy and crispy outside at the same time, much better than any other cooking method. Or in short, we cook tasty and healthy food. With its straight cooking processes, with sensor technology that recognizes the load quantity, the product composition, it can calculate the ideal cooking pass so that the perfect results are reproducible again and again in the same quality and, very important, without monitoring and without adjusting the cooking process. Even for untrained personnel like you and me, that is possible. We call this autonomous cooking.
The iVario Pro is a complementary product to the combi- steamer technology because it cooks with direct contact heat or in liquids, so in contrast to steam and hot air, which is indirect. The iVario is up to four times faster and much more precise than any other tilting pan or boiler that's comparable in the market. With that, it can consume up to 40% less energy, and with that helps customers saving money, for sure. It is also intelligent, so this means, for example, if a pancake needs to be switched and the chef does not show up, the machine takes the heat out immediately, and if the chef comes and then switches the pancake and presses the button, it continues cooking.
With this, we avoid food waste on the one hand, and we don't have sticking or burning food, which makes it very, very easy to clean just with a little water, cleaner, and a sponge, and in a few seconds, you can use it for the next cooking application. With the iZone control that was introduced in 2020, we can subdivide the pan up to four zones, and with this, make it more multi-functional and increase the utilization. After the combi- steamer in 1976 and the iVario in 2005, another technological breakthrough was brought to the market in March 2024, and this is the iHexagon.
In addition to steam and heat, like we saw in the iCombi, we added now a third energy source for cooking, and this is microwave technology that is available on all the six layers of the iHexagon, next to steam and heat. With this, the iHexagon is an absolutely new product category itself in the market. We can gain speed now with the help of the microwave technology, so on average, up to 30% faster and significantly reduce the cooking time while securing the high food quality that we know from the combi- steamer technology. Here, the major target group is, yeah, mainly key account customers that produce big amounts of food in a short time at very high quality. With Connected Cooking, our digital kitchen management system for our customers, they can utilize, yeah, the full potential of their cooking systems and even improve their processes.
No matter where the cooking systems are, Connected Cooking offers plenty of advantages. This means, for example, download and create recipes and cooking programs to distribute software updates and cooking programs with just one click on hundreds of units. With this, they can, as said, utilize the units in a better way, so downtime is reduced to a minimum, and the work processes are simplified. This indeed saves time and money for our customer. Here you see the complete team. Of course, you can use both appliances alone, but just together, they are covering basically every cooking application you can imagine in a professional kitchen.
For example, in the iCombi Pro, you do rather things like baking or making gratins or grilling, whereas in the iVario Pro, you cook rather liquids like soups or sauces or puddings, or you use it for pan frying or cooking pasta. Yeah, very new. Out just for a few weeks now, we did a study together with our customer AXA. In a very, yeah, impressive and sophisticated study, they compared their consumption figures before and after a kitchen re-engineering process. This process lasted around two years, and here you can see the savings, which are more or less confirming the last study we did in 2014 with very impressive values. The savings of around one quarter of energy and half of the water compared to traditional cooking setup. This shows what is possible, which savings potentials are there using modern kitchen equipment.
Now let's come to the topic of the conference, new food. What does new food mean for us as a provider of multi-functional intelligent cooking systems? To be honest, this is nothing new for us because the changes in the food service environment were existing since the industry is existing. Topics and challenges, of course, are changing over time. In these days, we would mainly talk about increasing costs, which increases the efficiency pressure for the customers. It's, again, new food trends, which customers need to match in terms of healthy food, food variety. It's, yeah, trend topics like sustainability, digitization, and automation. Of course, labor issues that are very important, the most important here, the lack of qualified personnel, and, of course, work safety.
When we look back now on all what we saw before with the cooking intelligence, with the very efficient way of producing food, with the security that closed systems are offering, and with much more with the Connected Cooking, we are really contributing our customers in these topics to really be able to counter the problems they have and find perfect solutions with our technology. On the slides before, we saw, yeah, a very happy customer smiling while working. When we look here on the slide, we see there is around 4.8 million kitchens addressable with the iCombi and around 1.6 million with the iVario. Of these, just, yeah, 25% or 4%-5% are already cooking with these devices.
This shows there is a huge room to grow, just winning over customers from this untapped potential, which is really huge on a global scale. Why are these other customers, yeah, we say there are 20 million professional kitchens worldwide in total, and why are the other 50 million, for example, not fitting? This means they, for example, have the wrong menu, for example, a pizza restaurant would not buy a combi- steamer. The purchasing power in poorer countries or the availability of energy sources in rural areas in poorer countries, that's not available. This is a few topics that might change in the future, and that's why we think that even the pure figure here should grow. These customers, we saw it before, we have a market share of around 50%.
RATIONAL has the, let's say, image to be the best solution provider in the professional kitchen. This, of course, goes hand in hand with very high customer satisfaction. When we look here, the Net Promoter Score figure is at around 60. It used to be in the 60 area in the years before as well. With this, we are in this so-called best in class segment, and compared to the comparison industries here, we are way better, which makes us very proud. On the other hand, the feedbacks that we get from customers show us then even more improvement potential, and then to create projects to address this improvement potential, this is maybe even more important for us.
When you look on the sales performance, a few two slides on the financial performance of RATIONAL, looking back, we had growth rates of around 8%-9% in the last decades, year- over- year. Sometimes a little bit more, sometimes a little bit less, but on average, 8%-9%. We think that looking onto the free potential, we will see this later in the investment story as well, that mid- to- high single-digit growth, there is something we would deem realistic for the future. As important as sales revenue growth is, of course, the profitability, the EBITDA margin, we are in a level of 25%-26%, and this is also a level that we would see realistic for the future when we look into the outlook also in the financial terms. What is the RATIONAL investment story?
You see it here. There are many points that would, yeah, underline the future potential and the sensible assumption that we are able to continue on this growth path. I want to highlight the two most important again that we even saw before when we talked about new food. It is really the dramatic cost increases our customers are facing and where we can help with efficient cooking technology to counteract here. The second is the lack of qualified personnel so that people do not find enough trained people for the kitchens. With the technology that has the, let's say, the skills in the software, we can help the customers to hire then untrained personnel to train them in just a few days. They are ready to use it in a perfect way, and we help here to counter this problem.
That is in the end why we say, and I always like to close the presentation with the statement, "RATIONAL is a good investment for customers and for investors." Thank you very much.
Many thanks, Arnold. Questions already add, and I would like to start with one. If I am loud, I will go back to the iHexagon because it is the first question. Roughly a year ago, you've launched a new product, the iHexagon. Can you insight the ramp up, the acceptance from customers, and the market potential in the next four to five years?
First, maybe on the potential, this is something we are not talking about yet because this is too early. When we talk about the iHexagon, we talk about a new era, as you can see here on the slide. We are in a very, very early phase, and it would maybe be too early to really have here concrete figures. The ramp up is, maybe you followed that, we started last year just showing the iHexagon to selected customers, meaning customers got an invitation to meet us at a trade show, and then we showed it in this exclusive circle to customers that we think they are most likely to be potential customers for it, mainly the big, big chains that are in the snacking area that need this speed and the quality at the same time.
Right now, we are opening up in March at the INTERNORGA. We showed it the first time openly so that everybody visiting the booth at a trade show could look at it, could watch the show, and see all the advantages of the iHexagon. We are not talking about figures right now. We have now really good feedback. We have good stories in the meantime. We have a football stadium where we see a good case, which means you have limited time to cook, to bring out as much freshly prepared food as you want. We have petrol station chains, we have restaurants, et cetera, but it is not sensible to assume that there will be a significant contribution to the growth story in the next year. This will take years until it will really have a feelable impact here.
Thank you. Quite related question is, I mean, you mentioned it already, but will it impact growth at your top line? And if it's not in years, do you have a timeframe when it could become a meaningful revenue contributor?
Yeah, sooner or later it will contribute for sure, but right now, this is not the most important thing to us. The most important thing is to make it known in the market, to get the first feedbacks, to create stories, to leverage the story in the market. It will last, I would say, at least three, four, five years until we see a meaningful contribution to the growth rates.
Okay, thanks. Regarding the different markets you are addressing, the regional one beyond cost efficiency, does the new China plant allow RATIONAL to develop regional specific innovations or accelerate growth in Asia? What is the strategy you've got in this region?
Yeah, indeed. When we look into the Chinese market, there is really, you cannot say it's the Chinese market. It's that China is subdivided into seven or eight regions that are different from a cuisine perspective, so the way of cooking and eating. On the other hand, there are here one, two, three, four cities that are completely different in terms of the customer structures, in terms of the purchasing power, all the things we had before a little bit. That's why we are now creating this local for local product in China to be able to offer, let's say, an entry-level model also for customers that do not have the purchasing power to afford the iCombi Pro. Right now, we think we are good in track with the project. By the end of the year, we will be able to start the production.
By beginning of next year, we will then start the sales. With this, of course, the aim is to really exploit, let's say, the potential in these lower-tier cities and to boost the growth story in China again. Whether this is then maybe, let's say, a platform for developing new products for the Asian market in order to maybe go into other countries and other regions, this is up to, yeah, not yet decided. There is no, let's say, time plan for that. For the moment, as we are following also here a focus strategy, we will here focus on the Chinese market.
Okay. Thank you for answering this question. Maybe a clarification, the AXA study. You've mentioned AXA. Does Allianz use your cooking machine as well, especially at the Munich campus in Thüringen? Are you familiar with this kind of insight? It's going deep.
Good, good question. I'm sure that Allianz is using our units. To be honest, I don't know it in detail now, but basically in most of the big canteens, you find our units, and I'm sure they use it. When Allianz uses it, I'm sure they use it in Thüringen as well.
Yeah. Do you remember, I remember from an earlier presentation some years ago that the White House, the president, they are still cooking on RATIONAL?
I think so. We are not allowed to use these pictures anymore for license reasons, but we also had the Buckingham Palace as an example. There is a lot of famous Bhujala wrap, where units from us are standing. There are a lot of famous examples as well. Yes, the Allianz Arena, maybe we could name here, for sure, all over the Allianz Arena, you will find our units.
Okay. Another question. Given the 4.8 million addressable kitchens for iCombi, why do you think that growth has stagnated at just 2% year- over- year in the last quarter? When do we expect growth to accelerate again?
Yeah, I would say the addressable kitchens is what we see is the potential in the market that could, in theory, use Combi- steamer technology. The growth, of course, within these 4.8 million, there are other factors, of course. This is, of course, the economy that is hindering us in some cases to grow or the other way around. Of course, it's also internal things like what we always pointed out in the last meetings, the sales team, the sales subsidiaries, so that we continue to increase here the capacities in the sales team. Looking just on Q1 figures, we had last year a huge or two huge orders that were still influencing the comparison figure from two big Asian customers, key account customers, that are here making the comparison a little bit difficult.
That is why we think in the long run, for this year, we are rather on the mid-single-digit growth outlook, but for the long run, we think that mid to high single digit is again a realistic growth story. We need to do our homework, and of course, the environment around needs to be set also for growth.
For the time being, there's a final question, last one, but to all the participants, please add your questions. Mr. Arnold, you're still there, right? Because I recognize, yeah, just right now your picture was, yeah, your picture was stuck for a second, but now we can continue. For the last question, I mean, if there are further questions, please submit them. For the time being, then we will answer this one. Given the maturity of your core business and rising innovation costs, are you open to selective M&A transactions in related categories? Today, we heard a presentation from Circus, so there could be something like smart kitchen tech, food service automation. Do you intend to purely grow organically?
Basically, our approach is to grow organically. When we look on the pure cooking system side, with the assortment that we have in place and with multifunctional cooking devices, we do not want specialized cooking devices like pizza oven or something like that. This is not our business. We want it multifunctional. We want it intelligent. From that point of view, it does not make sense for us to acquire a competitor or any other company producing cooking devices just in order maybe to take somebody from the market, which might be much too expensive these days when we look at the valuations of all the companies.
What might be an opportunity is if there is on the software side, small boutique that is offering really a special software that helps us to improve cooking connectivity, something around the cooking process, then this is thinkable. Until now, we get, of course, we get these offers from special agencies for that, but until now, there was nothing that we think was worth acquiring. When we look back into the history, we had one M&A, and this was Frima. Frima is the company that produced the predecessor of the iVario. Here, the story was that it was an exclusive partner for the French market, and as the owners retired and sold the company, the choice was either to again build up the complete market organically or to purchase this company and use also this technology they had for the iVario.
This was the only choice where we then did it.
Okay. When do you start production directly in the U.S.? Maybe after China is running?
Yeah, could be. We will start a new assessment now, let's say as soon as there is more clarity on the tariff situation, in what direction it goes in concrete. As long as there is too much speculation on, is it 50%, is it zero, somewhere in between or whatever, we will presumably not start with the new assessment. We do this every two to three years. Until now, the decision was always no because it's better to do it in Germany and to ship. Maybe the situation with the next assessment changes because of maybe higher import costs, but on the other hand, the costs in the U.S. would also go up. There will be an assessment, and whether the decision is yes in the next time or not, we cannot say now, yeah.
Okay, thanks. Mr. Arnold, maybe a final question. I know that you will have to catch a plane later on, so let's get to an end maybe. What is your competitive position with the iVario? Do you expect to further gain market shares in this space?
Yeah, I would say if you are, let's say, the frontrunner in a technology, you are always the hunted one. You start with 100% market share, and then somebody else finds out, well, it's a cool technology and we can earn money with that, then there are followers. Right now, we are at somewhere between, let's say, 50%-60% with the iVario, depending on how you define the scope for this comparison. All over, we would say with a market share of around 50% for both units, we would feel very comfortable. Yeah, we would not expect maybe tremendous market share increases here.
Okay, thank you. Thank you for your insightful question and a big thank you to you, Mr. Arnold, for the presentation. We would be very grateful if you would share your feedback with the company and our research team as well. For this reason, you will find an email in your inbox. Coming to an end for today's presentation on the conference, thank you all for joining us today. We have heard inspiring stories from Germany's next-gen food leaders, all companies that are shaping the future of food through innovation and sustainability. I guess RATIONAL is really a good example for this story. We hope to leave you with fresh insights and, of course, with new investment ideas. For a few final words, I will hand over the floor again to you, Mr. Arnold.
Yeah, thank you very much for the opportunity to present. Indeed, I like the format. Thank you to all that participated. Of course, if you are interested more deep or deeper in the story, just give us a call, then we could organize maybe that you can visit a cooking live demonstration and get even more, yeah, feeling about RATIONAL and the products and the customers. Thank you.
Thank you for joining us today. Have a good one.
Perfect. Thank you. Take care. Bye-bye.