Rational AG free cash flow drops 35% on higher costs, despite sales growth

Published 05/08/2025, 06:58
© Reuters

Investing.com -- Rational AG (ETR:RAAG) on Tuesday reported a 35% drop in free cash flow to €70.3 million in the first half of 2025, down from €105.9 million a year earlier, citing higher tax payments, rising inventories and receivables, and reduced trade payables. 

Operating cash flow fell to €79.4 million from €122.8 million, according to the company’s half-year report published.

The kitchen appliance manufacturer posted €606.2 million in sales revenue for the first six months, up 4% from €581.2 million in 2024. 

Adjusted for currency effects, revenue rose approximately 5%. Second-quarter revenue reached €310.9 million, a 5% increase year over year and the second-highest quarterly result in the company’s history.

Gross profit climbed to €357.8 million in the first half from €342.3 million, with the gross margin rising slightly to 59% from 58.9%. 

The improvement came despite price cuts on cleaning products and was supported by production efficiencies and lower stainless steel costs.

EBIT rose 3% to €153.4 million, while the EBIT margin narrowed to 25.3% from 25.6%, reflecting higher operating costs. 

Adjusted EBIT margin stood at 25.8%. Net profit after taxes increased to €120.3 million from €117.1 million. Earnings per share rose to €10.58 from €10.30.

Sales and service expenses grew 6% to €140.2 million, while research and development costs rose 22% to €37.6 million. General administration costs increased 3% to €27.8 million, driven by higher IT spending.

By region, Europe excluding Germany posted €262.5 million in half-year revenue, up 9%, while North America rose 11% to €147.8 million. 

Germany declined 2% to €60.4 million. Asia dropped 16% to €66.8 million, with Asia North down 23% amid the absence of a large prior-year order from China. Latin America and the rest of the world rose modestly.

Product-wise, the iCombi line brought in €536.6 million in the half year, a 4% increase, while iVario grew 9% to €69.6 million. International sales accounted for 90% of total revenue, unchanged from last year.

Capital expenditures declined to €9.1 million from €16.9 million. The company cited lower investment at production sites compared with 2024. 

Dividend payments of €170.6 million and lease liabilities contributed to a €177.1 million outflow in financing activities. 

Total (EPA:TTEF) assets stood at €1.03 billion, and equity increased 11% to €807.7 million. The company employed 2,795 staff at mid-year, up 5%.

Rational maintained its full-year outlook for mid-single-digit sales growth and projected an EBIT margin near 26%. The impact of new 15% U.S. import tariffs remains unclear, as no implementation date has been announced.

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