Up next is RATIONAL AG with Stefan Arnold. He is already on the stage, which is fantastic. Welcome, Stefan.
Thank you very much. I need to share my screen, I think.
Yes. It is not your first time, so I know you can manage to do it.
I hope so.
Already the fantastic presentation. It's loading. Yes. Full screen already. Awesome. All yours.
Can you see my screen now?
Yes, we can see it. You have 25 minutes for the presentation and maybe five minutes for Q&A afterwards.
Perfect. Thank you very much. A warm welcome from my side as well, and I think you had quite a few presentations already. Now, as we are approaching lunch, I'm sure you will be[crosstalk].
Just one second. Sorry. Can you click the Zoom app, Zoom as there's this-[crosstalk]. Yes. Perfect.
Okay. Now, maybe back to this thought. As we are approaching lunch now, and with this presentation, there are some pictures with very nice food, so you might maybe get even more hungry. Let's go through as we said in 25 minutes or so. RATIONAL AG, I think many of you know us already. We are a global market leader for professional and intelligent versatile cooking equipment. Here you see a sentence of our philosophy, the most important sentence, the core. The most important part is that we focus on commercial kitchens, so no domestic kitchens, so really professionals, and on food preparation. So no cooling, no cleaning, nothing. We are really focused on cooking in commercial kitchens.
We, of course, I think this is the philosophy as well, we focus on the greatest possible customer benefit, not on the financials, because the result of our strategy is really if we increase customer benefit and do this in a perfect way, the financial success will come anyhow. This is, let's say, the philosophy that RATIONAL was or that made the successful development of RATIONAL in the past decades. Focus on customers, on professional customers. Who are these professional customers? You see it here on the slide. It is everybody who cooks 20 meals per service or more in a professional environment. This is restaurants with service, so the classic dine-in business. It is a big part. It is 40%. We have community catering. This is big canteens.
For example, in schools, in universities, in military bases, on cruise ships, so everywhere where huge amounts of food is cooked at the same time is relevant here. Here, the advantages of the units can be played out in the best way because if you have a versatile menu or you have dozens of different food items in the canteen over a period of maybe five, six weeks, a versatile multifunctional unit saves you a lot of investments in specialized units. Because you can do everything in one or two units. This saves you space, this saves you training time for your people, for cleaning, for service. This is helping the customers here to make the process easier. The fastest-growing segments you see here in the lower part of the chart, this is restaurants without service, so quick service, and retail.
Here we see a trend toward more snacking in the different societies, meaning that people go there, grab food, and take away. Here we were growing quicker than in the other segments. Maybe 15 years ago, we would have here maybe 10% in share and higher share in the others. What are the products? What is the perfect offering that we want to give to our customers? The most important product we are having is the iCombi Pro. This is an intelligent combi oven. Combi oven means we prepare the food in hot air and in steam, or a combination of both. It is intelligent in a way that the chef tells the iCombi Pro his desired end result. For example, a roast, well done inside, crusty outside.
The iCombi Pro detects automatically with a core probe, with sensor technology, with software what to do in every second, what to do next in order to reach the desired end result. By this, you also can hire untrained personnel, because in the time where there is a lack of qualified kitchen personnel, then also unqualified people can prepare nice food, in order to make then your guests happy. This is what we say indirect heat transfer, meaning steam, hot air. On the other hand, we have a complementary product, the iVario, which is cooking with direct contact heat. If you see here on the right-hand side in this picture, the bottom of the container, we heat this up with a very fast heating up technology.
With this, we can either directly cook like in a pan, for example, here you see some shrimps, or you can heat up water to cook, for example, pasta or vegetables, or you heat up oil and use it as a fryer, for example, to do french fries. This is also a very versatile unit, and it is also intelligent. Intelligent here means that the machine recognizes, for example, if a steak would burn, and then it calls the chef, it takes down the heat immediately. It can do this because of the small bottom of the container, so it is very fast reacting. Then the chef flips the steak and presses the button so that it continues cooking, and then when it is done with the second side, it calls you, and then you can take it out.
With these two cooking devices, we can cover basically all cooking applications in professional kitchens, and you do not need anything else. Sorry. Now. In addition, for customers that need speed for very fast cooking processes, for example, we had in the past football stadiums where you have maybe 15 minutes in the break to sell as much freshly prepared food as possible. For this, we now have the iHexagon in the assortment. We launched this two years ago. The iHexagon is the only cooking device in the market that combines steam, hot air, and microwave technology in an intelligent way in the complete cooking cabinet. This means we have no compromises on the food quality. It is really comparable food quality in the end, to the iCombi Pro. But with the microwave, this cooks from the inside.
We gain a lot of speed, and with this, we save a lot of time. We say on average 30% time savings, for some food items more. For example, chicken, you can really use full power microwave technology. The other way around, for a steak medium rare, you would maybe not use the microwave technology because you then don't want to cook from the inside. There are some food items benefiting more and some less. As it is in a very early stage, we are just talking about very small numbers right now. We are now figuring out more and more with different customer groups what might be the best applications. We, in the meantime, trained global teams to work with the customers on this kind of technology in addition to the others and find out what's fitting best.
From that point of view, it will be a growth contributor, but for the time being, it will not be a big part of the business, but this will be the future technology. We had a very nice statement of one of our big customers from a German automobile manufacturer, last year. He said, "Your units are the most advanced in the market, that's for sure. But for us, it's even more important, the service you are offering around us. So every time we need people trained, there is somebody of you helping us in training.
Every time we have a problem, there is somebody that fixes this problem." This is showing that the technology itself is very important, but the complete package we are offering here is maybe even more important for the customers so that they are able to use their devices at every time, at the best possible way. One very important part here is ConnectedCooking, as we call it. We say this is the digital backbone of our cooking systems. It's an online platform for our customers. It's cloud-based, so they can connect all their units, they can connect their cell phone, their tablets, their PCs, whatever. Then they can, for example, remotely control cooking processes.
They can download software, they can update software, download recipes, include their service partners so that the service partner is always up to date about the status, and when he gets a notification, he immediately knows where to come with what kind of service part, et cetera, in order to be very fast reacting here. It's very important, especially for big customers. If you have more than 10, 15, 20 outlets, then you can control all these outlets, with ConnectedCooking and update everything at the same time. Also for smaller customers, it offers a lot of advantages. You see it here on the slide, we have in the meantime, more than 130,000 connected units. This is getting more and more important.
Despite the fact that the kitchen is not at all keen on innovations and rather sticky towards the well-known, this is now step by step going up. What is as well very important is that our users, they are trained in a perfect way so that they can use their units every time in the best possible way. That is why we are offering a lot of training. Sometimes we say we are more a training company than a machine manufacturer because, as said before, training, consulting is very important. There are less and less trained people in the kitchen, so we need to bring, in addition to the cooking intelligence, also the training to the customers. That is why before they purchase a unit, we offer cooking shows where people can look whether this is fitting. When they purchase one, they get a starter training.
Afterwards, they come to a RATIONAL academy, and if there is any problem later on, there is a 24/7 ChefLine where they can call and ask their question, whatever it be. I think one of the most spectacular things was that somebody wanted to cook a beaver, and there is no recipe for a beaver. They found out together with the ChefLine how to prepare this in the best possible way. Of course, a global technical service center is very important. We have more than 1,200 service partners worldwide. We are training 6,000- 7,000 service technicians every year so that we can offer our customers a very dense service partner network, with short reaction times. So if there is a case, that it will be fixed as quick as possible.
Also when we started the business relationship, the professional installation, the servicing that is done maybe on an annual basis, this is done by the service partners that we are training intensively in order here to safeguard the quality. Here is a split of the sales by product group. You see, as said, the iCombi is by far the most important product group. The iCombi or the combi oven technology is around 50 years old. It was invented by Mr. Meister 50 years ago. So here you see that is why it is the biggest part of the business. The iVario is younger. It is just 20 years old. That is why it is smaller and has a share of 10%. The after-sales business or non-unit business, as we call it, is split mostly in 10% accessories, 10% service parts, and 10% cleaner products.
Some parts, as already said, with ConnectedCooking and additional service we are offering. This is maybe the most important slide for you as investors because it shows the future potential. Why are we sure we can continue to grow in the future? We are estimating to be there around 20 million professional kitchens in the world. We deduct around 15 million for the iCombi and around 18 million for the iVario because the menu is not fitting, the purchasing power is not there. Maybe they are too small. Infrastructure is not there, et cetera. With this, we come out then at around 4.8 million kitchens for the iCombi and 1.6 million for the iVario. Of these, just 25% is already cooking with combi oven technology or 8% with multifunctional cooking devices like the iVario. The rest is still using traditional cooking equipment.
This blue part is now giving us the task to go out, to hire more salespeople that visit the customers, that meet them on trade shows, that spread all the information about the advantages of these kind of technologies in order to create then more demand and to transfer this huge potential that we are seeing into sales revenues. It also shows you we have a market share of around 50% with both product groups. Here we say our biggest competitor is not other combi steamer producers, but it is the traditional equipment. Everybody has enough room to grow without sharp price competition. With this, to go over to the financial figures. This is quite connected to the slide before. Here you see the growth rates of the past. Yeah, a little bit less representative because of the COVID time.
When we go longer into the past, we have a CAGR of around 8%. This is something we deem as realizable in a qualitatively perfect way, meaning in order to grow, as said before, we need to hire more people. We need to onboard them. We need to train them. This takes quite a long time, and we think we can do this in a good way in order to not jeopardize then the quality of the sales team and the business relationship. We can do this in this magnitude in the mid to high single digit range. Somewhere in the range between 6% and some 9%. The 8% CAGR of the last years is quite nice. Here in the past years, we had some year out comes from COVID. At first, we recovered, then we slowed down a little bit.
Now we are in the process of building up the sales teams in a magnitude as we had it pre-COVID, means hiring 6%, 7%, 8% more salespeople per year, and now also coming back to these growth levels. The 6% reported is because there is a negative currency effect, and the organic growth was at around 8% after six months. Regionally, still Europe is the biggest market with a share of around 50%. We would expect the highest growth rates in the overseas markets compared to Europe. In Europe, we have penetration levels of on average, 40%- 50%. In Germany, rather 80%, and maybe in the southern European markets, lower, or in the Eastern European markets. In the overseas markets, we just have penetration rates of around 10% that we are estimating. That means just one out of 10 potential customers is already using the technology.
That's why we are expecting here the bigger growth rates. This year it looks a little bit different. For example, in North America, we grew organically by around 10%, but the negative FX effect was mainly coming from the U.S. In Asia, we have some issues right now in China. Different things like organization development. We are doing now economic effects that are negative. Plus, we lost our biggest customer in China to one of the local competitors due to a local purchase decision. Product group wise, as said, the iVario is growing quicker as it is younger and has less penetration compared to the iCombi. Here we saw quite nice growth rates for both product groups in the first six months. Margin wise, after the COVID dip, we recovered quicker than we expected, to be honest. Back to the range of 25%-26%.
On a full year scale, last year, we were slightly beyond 26%. This year, we are now at 26.5% for the first half year. This is also driven by a EUR 14 million refund of U.S. tariffs. Without this refund, the margin would be at around 24.3%. Quite a normal level for a first half year, but positive impact is really helping us. With this, I come to the outlook for the year. We guided for a mid to high single-digit percentage range growth, meaning somewhere in the upper single-digit area between 5%, 6%- 9%, 10%. We think we will be in this magnitude at the year-end. That's why we confirmed it after the half year figures. Gross margin will be slightly lower as expected because of the increasing cost levels we are seeing and also the tariff costs.
Operating cost also will be a little bit higher or growing a little bit faster than the sales revenues, so slightly negative impact on the margin. That's why we think the margin coming from 26.3% last year will be expected rather in the range between 25% and 26%. Now with the tariff refund helping us rather to go around the upper end of the range. This is a positive outcome here. In the long term, we think we can continue to be successful because different reasons you can see here in the slide. The most important ones is the rocketing input costs for food, energy, and much more, where we can help our customers. The other one is the lack of qualified personnel, where we can help with our intelligent cooking devices.
Perfect. With this, I think we have time for some questions, yeah?
Great. Thank you. Yes, you have highlighted that iVario continues to grow faster than the overall business. What's driving the momentum and how far do you think the product is from reaching the penetration levels that you already have with iCombi?
I think the reasons why it grows quicker and what is the driver is that we go out and do more activities with customers because many of these customers don't know the technology at all. Even in Europe, still there is really a lack of knowledge about it. We went just overseas six years ago with the new product launch. Of course, here now we are starting, let's say, from scratch, and we see good success, especially in the Americas. This should drive the growth for the coming future. The penetration level is far away. It took us 50 years to come to a penetration with 25% with the combi-oven product group.
Here we are now at 8%. I think this is far away. The thing is that the penetration is also depending on the two sides of the equation. It's the potential market and the installed base. In the past year, the potential market grew quicker than the installed base, so penetration even went down, which is good because it increases potential.
Can you explain a little bit the competition? Are there new players coming to the market? Is AI playing a role?
There's new players coming to the market every time, because if you are, let's say, the inventor of a technology, you are always the hunted and not the hunter. We saw one Italian company in the past years being very active in terms of marketing and marketing communication, and also growing very nicely. Right now, we see some Chinese competitors coming up. They are rather playing a local role so far, but not internationally, and we will see how this will develop. But all over, our market share was quite stable in the past years.
Yes. Every time I can peek into a kitchen, I see some RATIONAL machine standing there. Do you fear the Chinese might move to Europe or the U.S. market?
I think we see some first steps with. I saw one Chinese company offering combis on the trade show in May this year in the U.S. In Europe, we do not see them a lot. Right now, there is. Of course, you can buy copycats when you go on online portals or so. This is there for many years now. But those relevant competitors we see in the Chinese market, they are not active in the European market. It is not only the product. As said, it is the network you need to offer. It needs the technical service, the training. To sell a product is quite simple, would be very easy for them, but to offer what professionals need is maybe much more, and this is not that easy to catch up maybe within a few years.
The other way around, you started producing the iCombi locally in China for the Chinese market. What have you learned from that, and what is different there?
What is different there is it is more price sensitive. This is one very important thing. So the cost of ownership through a lifetime of 10, 12 years is less relevant in this market compared to European markets. Then rather you have a long-term view in the other markets. In China, it is very price sensitive, and nobody is then looking at the costs during the lifetime that much. Right now, we see, at least with the bigger companies like Yum China, that there is some local purchase attitude. Less with the smaller ones, but that is maybe different. The market itself is somewhat different. There is more chain businesses than smaller restaurants, single restaurants and, yeah, I think this is the major things, yeah.
With just a minute remaining, looking back from the IPO times, it's one of the best stocks to invest in and hold it on from back in the 2000s. Maybe looking forward, what is now the best reason to invest in RATIONAL?
If you are a long-term investor, we think that all the things we discussed now, there is a huge market, there is huge growth potential. I think we are very well positioned. I think we have a track record in managing this with very high margins. From that point of view, I would say it's looking quite well. But, of course, you never can say, "Is this now the right time to invest?" Because share price movements are sometimes also driven by outside things. But I think all the participants maybe know this better than I do.
Excellent. Stefan, thank you so much. The time is up. Fantastic presentation.
Thank you very much, and take care.