Rational Ag Lndsberg

My dear ladies and gentlemen, it is a pleasure for me to welcome you to our earnings call on Rational's half-year 2023 figures that we published this morning. My name is Stefan Arnold, and with me are, like always, my colleagues Nicole Engelhardt, Tobias Stadler, and of course our CEO, Dr. Peter Stadelmann, and our CFO, Jörg Walter. So Peter will start the presentation in a few seconds. And I have just a few hints for you at the very beginning. So all participants are muted. And if you want to ask a question, please send the question to IR at rational-online.com. I see we already have a big number of questions. So thank you for sending you the question in advance. After the presentation, like always, we will give answers to all your open questions. And if we already gave answers during the presentation or if there are double questions, we might not repeat the question again in the Q&A session. And at the end, of course, we will make sure that every answers are given. And if you have any question, you feel it is not answered or do you have a new question, please give us a call or send us an email afterwards. So with this, I want to hand over to Peter. So the stage is yours.

Thank you, Stefan. Dear ladies and gentlemen, welcome. 2023 is our anniversary year. 50 years of rationale, 50 years of focus on helping our customers, helping the people working in the commercial kitchen. We celebrate this anniversary worldwide with our customers, with our partners and of course with our colleagues. You can see here examples from China, Brazil and Poland. These celebrations are important to us and believe me, our staff greatly enjoys these parties. It is one way of appreciating their hard work for our customers. Of course, there were and are also numerous events at our main location in Germany. We were able to welcome our global marketing and sales colleagues in Landsberg. Our summer party for our UIU took place and, as you can see here, we held an open day at our factory. After a break of more than 10 years, we opened our production facilities in Landsberg to all interested people. Almost 7,000 people came to visit us. To put that in perspective, The city of Landsberg, where we are located, has about 30,000 inhabitants. In addition to a factory tour, there were cooking shows, a program for the children, some of our departments were introduced in order to attract future employees, and of course, there was cooking and eating. For us, events of this kind are particularly important. At Rational, we stand for people coming together and eat. Wherever people come together, eat and have a good time, we bring the greatest possible benefits to those people that make such events possible in the kitchen. After the great challenges in the recent years, we are more than happy to be able to do this again on site in Landsberg. Why do we start this call with talking about celebrations and events? Because they are all about our people. Because we know that we could not deliver any results at all without our almost 2,500 great UIUs. That is one big difference to many other companies. And it is important for us to make sure you understand our differentness. 2023 is the year in which we are able to take a significant step towards normality. The last three years, external factors very much impacted how we did business, how we had to do business. One topic that has been much discussed only the last two years and not at all before was our order backlog. In general, this plays a minor role for us as we are aiming to be a very lean company, producing to order and to be flexible and acting fast. And we have not only the largest sales force in the industry, but also the one closest to end customers. On the other side, dealers and end customers were used to very short lead times. Order backlog was up to six times higher, more than €400 million in peak time end of Q2 2022. With €160 million of order backlog in Q2 2023, we believe that we are near the new normal, which might be still twice as high than pre-pandemic. You may ask why this is higher than it used to be before and my colleague Jörg Walter will tell you more in a few minutes about that. The order backlog issue and the very long lead times were created by the supply shortages in 2021 and 2022. The production of semi-finished units was kind of a nightmare for our productivity. R&D was busy having to redesign components and change software accordingly. Production had to allocate units and internal sales was constantly changing delivery dates due to the delays. Also here we are back to normal. I don't think you doubt that we are glad to put this chapter behind us. Without having to firefight all these external factors, we also were accomplishing internal projects. For example, the new offices in Landsberg, but also introduced new accessories for our units. The last three years also made us proud of ourselves. Even in these times we were successful. We showed that also in economically uncertain times we were and will stay successful. Why, you could ask. Our financial stability allows us to bridge uncertain times and to keep investing. We focus on a basic human need. The places of out-of-house food prepared may change. The number of meals on the other hand will increase. We know that only with satisfied employees a company can stay competitive in the long term. Employees are the foundation of our success. And lastly and most important, we have a clear focus towards our customer satisfaction. Every decision comes down to this one question. How can we increase the benefits for our customers? One example of our happy customer is Spectrum Retirement. It operates 41 retirement assisted living and memory care communities with 8,000 residents across the United States. Spectrum embraces new growth and evolution to ensure it is always providing the best service and opportunities to residents and families. And food service is an important part of that equation. But I will let our happy customer explain how we work together closely with them to guarantee perfect results for every resident.

Food service in senior dining is all about what's next. It's about bringing a very restaurant-centric experience into senior living and smashing through walls to really create these dynamic restaurant spaces that are a central part of the community that people are excited to come to every day and try the food we have to offer. My name is Rachel Boynton, and I am a regional director of food and beverage for Spectrum Retirement. I've been with Spectrum for a little over three years now, coming up on three and a half, and the same for Finier Dining. I was in traditional restaurants for about 15 years before that. As a regional food and beverage director, we wear a lot of hats. General training and documentation, work with the rollout processes, create our training programs at seven of our properties. It's a small world. Nothing much. We run a menu that's about 25 items that are all cooked a la carte. A lot of people, I think they get images of the cafeteria style food where you're making these huge batches of things and then they're sitting there while you serve them. We really are able to not do that at all.