So, hello everybody. Good afternoon, good morning, good evening from wherever you are dialed in. And a warm welcome from our side to our IR follow-up talk on the first nine months of 2026. With me, you see, is my colleague Laura Deininger. And let me first start again with some housekeeping rules. We will start with a quick summary of last week's result. Sorry. I just follow up on that. We just started the transcript, so we will do this for internal purposes, just that you know this. That's why I was mute for a few seconds, and maybe I repeat something now, but I again start here. We will start with a quick summary of last week's results and then move to the Q&A.
If you have a question, please raise your hand if you would like to ask that, and then we will unmute you, or you can unmute yourselves. And of course, we would appreciate if you could switch on your camera while asking a question so that we can see you. Thank you for that. And before, as said, we move straight into Q&A, let me start with the summary. I think now we are ready. The first nine months of 2026 developed solidly and broadly, also in line with our expectations. Sales revenues increased by 6% to EUR 974 million, or by 7% before currency effects. In Q3, revenue grew by 6% to EUR 332 million, and the underlying demand remains healthy, as we do not see any structural slowdowns.
The only thing that we can say, there is, of course, difficult market environment these days, and it's mixed from region to region, and of course, China continues to be challenging. The structural drivers of the demand remain intact, so this means labor shortages, the need for greater efficiency, and the increasing digitization continue to support the investment environment in the professional cooking systems. We also believe that our nine-month sales performance was stronger than that of most competitors that have published their figures so far. As far as we can see that. When we go on the regional development, first look at Europe. Europe remained, again, the principal growth drivers. Germany grew by 9%, and Europe, excluding Germany, by 8% after nine months. The growth was indeed broad-based, with no European country below the prior year level.
To highlight a few countries, it's Spain, it's Scandinavia, Italy, and the Eastern European markets performed particularly well, and also Austria and Switzerland, but they also benefited from key account projects. North America grew by 5% reported and 9% before currency effects after nine months. And in Q3, FX-adjusted growth was at around 7%. The softer Q3 development mainly reflected lower school business due to the reduced public funding rather than a loss of market share. And I would like to clarify one thing here, as we are talking about a 2 percentage point growth difference between H1 and Q2, this means this lower volume is, of course, having an impact, but it does not mean that it was really a breakdown in this kind of business.
For the Q4, the comparison is indeed demanding in North America because last year we saw here a growth rate of 15%. That's why on the group level, we may see rather a low to mid-single-digit growth rate in Q4. Slightly positive might be or should be the U.S. dollar effects in Q4 because of the development of the U.S. dollar to euro. When we move to Asia, here we saw a slowdown in the business, a decline of 3% after nine months, and by around 6% in the Q3, mainly because China was down by around 19%. Yum China's move towards local sourcing remains, of course, the main headwind here. Its share of our China sales business has fallen from historically around 30%- 40% to now approximately 10%.
The underlying street business, on the other hand, is growing. The iCombi launch is progressing well, and we won first key account customer. Year-over-year comparisons should become easier starting next year in 2027, because then the base effect should be gone. Japan, India, and some other Asian markets continue to develop solidly, so this is compensating here. Latin America continued to grow on a broad basis too, with positive contribution from Brazil, Mexico, and some other South American markets.
The last point here, the Middle East. Here, sales remain slightly below the prior year and represented around 2% of our group revenue after nine months, which is limiting the impact on the group overall. The reason for here is the ongoing conflict in this region. Looking at the product groups, the iCombi sales increased by 5% after nine months, and it remained, of course, the backbone of the business. iVario sales grew by 10% to EUR 120 million, so here we continue to expect to grow faster than the iCombi over time with, as already said, a rule of thumb of roughly twice the iCombi growth rate.
The greatest overseas opportunity for the iVario, of course, remains North America, where market penetration is still at an early stage. After nine months, cooking system sales were approximately at 75,000 units, up around 5%, and iCombi here at 4%, iVario + 8%. Full-year unit growth is expected to be slightly below the nine-month rate because of the demanding Q4 comparison. The share of the non-equipment revenue to accomplish here the view remains stable at around 31% in Q3 as in the nine-month period. The customer feedback on the iHexagon continues to be very positive, so the product now has been available in almost all markets since early October 2026, with worldwide availability targeted by April 2027, apart from a few exceptions here. We continue to stress that penetration of completely new equipment category is measured in decades and not in years.
I think we discussed this a few times, so this is rather a long-term view we are having here. When we look at pricing and our cost and profitability situation, we announced this in September, the price increase of slightly less than 3% on our cooking systems, with the exception of the United States. This generated some pull-forward effect in orders to Q3, but had only a limited impact on reported sales revenues because most of the additional orders had not yet been shipped by the end of September. That's why the order book was approximately EUR 20 million-EUR 30 million above the average of the previous quarters. This shows more or less that the customer reactions to the pricing measures has been broadly in line with our expectations.
Gross margin was at 59.5% after nine months, and excluding the tariff refunds of around EUR 14 million, it was 58.1%, so slightly below the prior year due to higher material, freight, logistics, and tariff costs. The Q4 benefit from the price increase that is expected, this will be in the low single-digit million euro range, and the full-year effect of these price increases will mainly support in 2027 and help to offset part of the higher expected input costs. EBIT increased by 12% to approximately EUR 261 million after nine months, resulting in an EBIT margin of 26.8%. Again here, excluding the tariff refunds, the EBIT margin was, of course, lower at around 25.4%, but also fully in line with our sustainable mid-term assumption of 25%-26%.
The higher level in Q3 2026 also reflects a release of tariff provisions of EUR 4 million-EUR 5 million, but this is mainly a shift between H1 and Q3 and no full-year impact, and no further release expected in Q4 or in future. The input cost pressure is increasing, particularly from materials and components, and it is expected to become more visible in 2027. The logistic costs are also higher, especially for overseas freights, although some measures, such as changing freight forwarders, have partly offset the increase. Our priority here remains to protect the margins, first through efficiency measures and to use pricing only where necessary. The current U.S. tariffs are at around 15% on the cooking systems and somewhat lower for service parts and accessories. Assuming no regulatory changes, rates are expected to remain broadly stable in 2027.
This means the average tariff rate and the total tariff expense for 2027 could therefore be slightly lower than in 2026, of course, depending on the volumes. Let me now come to the outlook for Q4 and for 2027. For 2026, we continue to expect revenue growth in the mid to high single-digit percentage range. As you already maybe know from last week, now more specifically at the lower end of that range. This would mean maybe rather in the 5%-6% area. For Q4, we expect growth of around 1%-5%, so in the lower mid-single-digit area, mainly because Q4 2025 was a particularly strong comparison quarter with a currency-adjusted growth of approximately 11%. We raised the EBIT margin guidance for 2026 to 26%-27%, while confirming the expected EBIT range of EUR 340 million-EUR 360 million.
This means the euro guidance is unchanged from the beginning of the year. The higher margin effect comes from the tariff refunds, a more gradual increase in the material costs, and some easing of currency headwinds, as well as some pricing impacts that were positive. Looking toward 2027, it is now, of course, too early to provide guidance. Nevertheless, we see a good starting position. Growth should benefit from the full-year pricing effect, the expanded sales organizations, and from the increased sales capacities throughout the year, then the further iVario penetration outside Europe, and the continued rollout of the iHexagon.
China, on the other hand, is likely to remain challenging while we are now rebuilding the dealer network and sales organization. In the medium term, we continue to believe that the mid to high single-digit growth in the range of some 6%-9% is achievable.
With that, we would like to move to Q&A. I just see the first question from Obi . Obi , you are still on mute.
Can you hear me?
Yes.
Hi. Good afternoon. Maybe three questions from my end, just going through the regions, maybe starting with Asia. Should we expect the Yum China effect comes out from Q4 or from Q1, and how much was the rest of China's industry business, how was that growing, and could you just maybe go through dynamics in the rest of Asia as well?
Okay. Laura? Should I? Okay. The effect from Yum China, I said the base effect should disappear or start to disappear in Q1 next year. This is because the lower levels of their sales were rather starting in January, February. This is one. I think looking at the street business, if we take out the KFC, we are growing by, I think, around 10% or so. Here, it's still okay, still good. But of course, it's still a challenging situation catching up still after the COVID period where we rather lowered capacities, et cetera, which is now something we need to rebuild in a structured way.
Maybe to add to the Yum China business, in the past, it was at around 30%-40% of China business, and it declined now to around 10%. 10% share is Yum China.
Okay. No, thanks very much. Just on the rest of the world, I know it's a small part of the business, but Q4 2025 comps are quite hard. I suppose it's been negative Q1 to Q3. How should we sort of think on Q4 for this year effect?
You mean now Q4 global?
Q4 20-- yeah, and the rest of the world, yeah.
In the rest of the world?
Yeah, the rest of the world segment.
Well, that is difficult to say. This is a very volatile business. We had, I think, last year a negative impact from volatility in Australia, where we had a strong, I think, Q4 and a weak Q1. This is sometimes quarterly shifts. I would not put too much attention on a single quarter in the rest of the world area.
Okay. Maybe just on pricing, do you have any idea what competitors have done in relation to your 3% globally, and sort of effectively how do you sit versus them?
We just got some information. I think ITW and Middleby are some of the major U.S. competitors. They were in a range somewhere in the 5%-8%. We learned from the others. We do not have any information on price increases.
Okay. Super. And just lastly, energy. I know in the U.S., half of the market is electric, half of the market is gas. Have you sort of seen any uptick in demand just given where energy prices are, or sort of that's maybe a more long-term driver of growth hopefully?
Yeah, I would say this is really a long-term driver. I think here it is absolutely the market with the highest gas share we are having, but I think there is not a major change that we are seeing right now. Maybe this is coming step by step. One thing that might also support the trend maybe, or may not support the trend, maybe let's say rather is for gas units in the end, if the iVario gets more successful and we don't have a gas unit for the iVario, so you need electricity for the iVario, and maybe then the capacity is not sufficient so that they would rather stay with gas units because otherwise they are not able to run both.
This is something, but this is something we need to see. But we know it from many markets that this is the case, that then they need a gas unit in order to overcome this electric capacity threshold.
Great. Thanks very much. Thanks for taking the questions.
I think Lars.
Yes, good afternoon. Fighting with the technology. Three questions from my side as well. I mean, your price increases are very, very moderate compared to major peers, and I guess one of the major reasons is not to be a social market participant, but rather buy some market share. I would be interested in your first observations whether this strategy is working.
Yes, I would say we don't have exact numbers on that, if we really gain market share with the later or lower price increases, but we think that it's possible that we won market share with that. But we don't have exact figures.
O ne indicator might be the sales development of competitors, mainly in the U.S., where we saw that we outperformed them mostly in the last quarters. This is maybe one indicator, but of course not the only truth you should take. But this shows what Laura is saying, that there might be some increase in market share, yeah. But to clarify one thing, it is not only the reason to be a social organization is maybe not the right thing to say, but of course, customer benefit and to balance the customer benefit, of course, is always an important point we look at when we talk about price discussions, because pricing is, of course, an important part of customer satisfaction.
Nobody should overdo it with price increases just in order to win over, and on the other hand, just to give away maybe some margin to be too nice to the customers. I think it's always a balance between both.
Helpful. Thanks. I mean, we discussed a potential cannibalization of the iCombi Pro by the iHexagon, or at least the risk, now that iHexagon sales seem to be gaining momentum. Are these product categories running in parallel, or would you agree that we see some cannibalization effects?
So maybe there are some cannibalization effects, but we are also seeing customers, they are adding the iHexagon to the iCombi Pro, for example. I think it is both a little bit.
Okay, thanks. Then maybe a third one, and then I will go back into the line. Stefan, you were already kind enough to give us a first indication how 2027 could look like. Consensus is at +8% when it comes to revenue growth. You said 6%-9%, so very cozy, all in place. But consensus envisages a stable EBIT margin year on year. I mean, yes, this year you had the tariff refund impact in Q2, which was definitely positive, but you also already outlined all of the tailwinds we should expect for next year. The prices coming up, full effect of pricing, more salespeople, yeah? No necessity to repeat that.
Against that background, is it realistic to only expect a stable EBIT margin, or given the operating leverage, should we not rather expect a slight margin improvement?
Yeah, on the other hand, here we need to look at the higher cost levels. As we said, we are maybe sort of surprised until now that the cost increase is not really visible in the P&L that much, because to give you examples, there is, for example, chips that were EUR 5 maybe a year ago, now they are EUR 100. Of course, step by step, we are pre-buying here a lot, and maybe we are able to save some prices, but it is difficult here to save the prices in the future. So from that point of view, here we will see, or we will see price increases in different product categories or component categories, which is something we want to compensate, of course, with the pricing.
If we are successful, it is of course depending on whether the price increases are then stronger or the cost increases, of course. This is something we do not know. But when we look at the margins, we are now at the high 26%. If we would assume this for the full year, and we would deduct the 1 percentage point for the tariff, we are in the 25%-26% range, and then having some positives, some negatives. In the end, difficult to say whether we will end up higher or lower. But all over, we think it is a challenging environment now with these really significant price increases in the different category, or cost increases in the different categories.
We would, from what my information is right now, I would rather say that in the mid to long term, which might include next year as well, it is rather the 25%-26% range. But planning is ongoing, and we will see what the outcome will be basically by the end of the year or early next year.
Perfect. Thank you. I will go back into the line and afterwards come back.
Okay. Ben, you are the next one.
Hi. Yeah, thank you for this. It is very helpful. I am just wondering about North America and the sales organization there. I think it is more of a distributor-driven market there, compared to, say, Europe. I am just wondering if there has been any developments there and if that is different in rural geographies compared to urban geographies.
Yes. So in the U.S. or in North America, especially in the U.S., we are working with rep offices. Those are external partners. They are also selling and distributing our units to the market in locations where we are not placed or where we are not running the market with our own peoples.
Yeah. Has that developed materially in the last year or so in terms of the shape of the overall sales organization, or is it pretty static?
I would say it was rather stable. There were some attempts. I think it's more than 10 years ago or 15 years ago, where we wanted to bypass them in some regions, and then you see they are very powerful, and you need to do business with them. Otherwise, you would maybe lose business in these areas. From that point of view, others did see this as well, so they have some power. But on the other hand, they also have a value because if you have a region with a low density of customers, then it's better to have a local partner who is doing, among others, this business for you instead of having own people which are then having too much travel distances and being not efficient there. It's a mix of both. It's costing money, but it's having a value as well.
Understood. Thank you very much.
Welcome. Lars is back.
Yes, but I think Obi was before, was the number one.
Okay, Obi. Yes, sorry.
Hi. Hi again. Maybe just two, just on margin. Could you give like a euro number on the commodity impact expected in Q4? I think previously you said EUR 8 million for full year. Is that still the same way to think of it? So I think that EUR 8 million number was based off EUR 2 million steel alloy, EUR 5 million, I believe, components and so on, and EUR 1 million logistic. Is that EUR 8 million number still the relevant number for inflation for the year, and therefore we can obviously back out what it is for Q4?
Can you repeat the number? Is it EUR 8 million you said?
Yeah, versus last year. So effectively the higher cost you are expecting in COGS versus last year. So I think it is sort of EUR 8 million specific costs, alloy surcharge, logistics, and commodities. Is that still the right way to think of COGS in for full year?
But I think EUR 8 million is a lot. Do you mean just for Q4?
No, for full year, and then obviously you can back out[crosstalk].
Ah, for the full year. Yeah. Difficult to say. I would say, looking just at chip costs, I would say it would need to be rather more. How much it is in concrete, we cannot say. Just we said on the one hand, we had a price increase. We are seeing the impact of the price increase at around EUR 20 million next year, approximately. And this compensates for higher costs, but I think that shows that the expectation for the costs increase will be higher for next year. But we don't have concrete figures so far for that.
Okay. Thanks very much. And just thinking maybe more broadly about sort of margin, excuse me. I suppose if you still see sort of 6%-8% or 6%-9% growth in the near term, do you still expect some operating leverage that should be able to offset some inflation and therefore still see some margin upside sort of in 2027, theoretically?
We don't see really margin upsides, because also with additional markets, the iHexagon as a new product, for example, you also have some additional costs and also complexity in the markets and so on. We don't see a leverage of the EBIT.
All right. Thank you.
Now it's Lars.
Yeah, I'm trying to get an answer from you, which I don't have myself, to be honest. Looking at your share price development from 700 to 550, what would you say are reasons for that? Because underlying, there is no change, or I miss something.
I think we got some feedbacks from investors in the past month on that question as well. Because we were asking us the question, what might be here the driver? Then we discussed with a few of them. There were some quite interesting answers. There's some outside perspective, of course, so that the reason is outside from RATIONAL, for sure. The one thing was the tech rally, where customers take the money and put it rather into tech companies. The other thing is the trend to passive money, where we had some feedbacks that investors with a quite big number of shares, they needed to sell a big portion or to sell off completely because money is flowing now into. Their mandates, for example, are they lose their mandates because the money is going to passive.
The other thing is, of course, that some investors, this is rather RATIONAL-oriented, where people are looking at the growth potential for the future, where they say you have some multiple compression. As long as we are not, let's say, showing the long-term trend toward the average 8% growth rate that investors say, maybe we do not accept 29, 28, 30 PE. That's why share price rather came down. I think now we came back to a level of EUR 630 now. I think last year it was even at EUR 680 in the top. But I think the level back to EUR 630 is maybe reflecting a bigger trust again.
Maybe now we see that the money is flowing out a little bit from this AI tech bubble, so that maybe some money is coming back to quality companies that have a long-term track record. But this is reasons some people tell us, but whether this is really the only thing, I don't know. Maybe you have another idea, or someone in the round.
But is that currently the larger or the biggest risk that the buy side sees? You not going back to the historical growth rates of high single digit, low double digit annual revenue growth?
Not high single digit, double digit. When we look historically, the average was at around 8%.
A bit too high single digit.
Yes. The reason that we are expecting high to low or low double digit, I think this is not a valid argument. But continuing on this growth path, I would say, would bring back trust. And we had one study out, I think today or yesterday, where exactly this was outlined. RATIONAL delivers approximately what they did the last 20 years, more or less. And the share market is reacting in a sort of an exaggerated way, that it is maybe the compression is too much, and they would expect higher multiples again.
From that point of view, we are quite confident that this could happen. But on the other hand, you know this, there is also ratings from analysts that are lower. They say, "Okay, share price is maybe okay or too high." This is always a broad view here.
Understood.
I think Fraser. Another question, Lars?
No, no, sorry. I'll go back into the line.
Okay, then Fraser.
Give the floor to Fraser.
Yeah. Hi, Stefan, Laura. I had three as well. Just wanted to clarify on Yum, the 10% which is left in the China business. Is that mainly kind of spare parts on the existing installed base, or you're still selling them some units?
I think we still sold some units this year, but of course, much less than in the last years. I think the bigger part, or I cannot say exactly if it is the bigger part of after-sales business or unit, but they are still bought some units this year.
Okay. Just on this U.S. schools impact, is there any reason to be more positive in the next quarters? Any funding which you have seen released at the kind of government level, or just anything kind of more you would add there? To what extent did that weakness in Q3 color as well iVario performance in the quarter, or is it more about the iCombi?
I would say it is, in general, it should be both, because it is about just funding of the school business. Maybe to put it in relation what I said before in this summary, if we talk about a, let us say, a 2 percentage point lower growth, which just should maybe give you an indication that the Q4, sorry, the Q3 might not be in a, the development is not, as I said before, it is not a breakdown in this kind of business, but it is a slower growth rate. When we talk about levels of, let us say, the average is maybe on the level of around 20%, sometimes a little bit more, sometimes a little bit less.
If a 20% share is growing by 10% less, then I have a 2 percentage point sales impact. Just to put it in the context, it is not a bad development, but it is a less good development. It was maybe last year just fueled by additional or by higher public funding. Whether this will go up or down next year, I think nobody knows. Nobody can tell you what public funding will be next year in detail.
Just a kind of general question coming back on iHexagon, but I know, I think you had kind of repositioned the price at one point. Have you found the kind of price point you are comfortable with now? For you guys, is anything surprising you positively and negatively about kind of the product in general, the launch?
I would say there is nothing surprisingly negative. No. The feedbacks are good, and I think what is surprisingly positive is for us that we learn more and more about new customer groups and the applications they can think of to use it for. For example, we just had a tour here in Landsberg with a colleague just a few months ago, and he was telling about replacing big fryers. This is maybe some of the major targets he would, or the major traditional cooking equipments he would target with the iHexagon, because with this high speed and the high quality of the fries in this, for example, football stadiums, et cetera, and in big catering organizations, this is really a huge benefit, and you do not need the fryers, you do not need the fire protection, et cetera.
These arguments for replacing maybe a complete system, which is including also fire protection and air ventilation, plus this fryer, you just need the iHexagon, and this covers everything. I think this is the positive thing that we learned. We had an internal presentation this morning. We were talking about the iVario, the 100,000th iVario. We sold 10,000 iVarios last year for the first time, and we were looking back 20 years, we had 500. It shows we need to start slowly but surely. We need to really point out again that it is more important now to gain this experience about all the applications that it could be used for, and the customer value that we and the customers are seeing then now to talk about the big figures.
What Laura said before, there is some cannibalization maybe, but it would be good for us if every combi in future would be cannibalized by the iHexagon. This would be perfect. Then we would sell maybe 1 million iHexagons. But this is maybe rather future music, as we would say in German.
Perfect. Thank you.
Perfect. If there are no more questions, let's close the call. I say thank you very much to everybody for joining. Wish you a good time, and hopefully we see each other soon, and hopefully next week on the Capital Markets Day on ConnectedCooking. We are looking forward to that. Olivier. Sorry, I was too fast.
Hey, Stefan. Sorry about that. I had a conflict. I just had two questions. Maybe you have answered them already, but just on North America, you are facing a tougher comp in Q4. Do you expect to be able to grow year-on-year in the quarter, or if not, what levels do you think are realistic to expect for Q4 in North America, given the school business slowdown this summer? Are you making any assumptions regarding business following the U.S. midterms, or you think business as usual?
Then just on the gross margin, maybe you have answered that, sorry, if that has been already the case, but how much benefit do you think you will get from the 3% ex-U.S. increase in the fourth quarter? What are the headwinds you are currently seeing from higher raw material, electronic, and chemical inflation?
Laura?
M aybe on the price increase, this year, we expect an impact of in the low single million, so around EUR 3 million for Q4, and for next year, around EUR 20 million on the positive side. Yes, and the costs are still rising, until Q3, we have not seen the impact we expected before. We see that a bigger part is coming in the next quarters. Stefan, do you want to add?
Yes, I think it is difficult to quantify indeed right now because it is very dynamic. Yes, but all over Q4 should be margin-wise on a higher level maybe than other quarters, so that it is very likely that we would stay in this guided range, or maybe rather in the upper part of that when we look at the nine-month figures.
Regarding, I think the second question was the U.S. growth in Q4. If there will be growth or not. If I just do a mathematical outlook in my model, which is maybe the best thing I can do, we would have slight growth, but very low, really in the low single-digit area. From that point of view, this will be maybe the major reason why Q4 growth will be rather in the 1%-5% area for the group.
Yes. Thanks.
Okay. Perfect. Let's close the call now. Everything is set, and I am looking forward to seeing you next week in the CMD. Thank you and bye-bye.