RATIONAL AG — Interim / Quarterly Report 2007

May 9, 2007

Quarterly Report Q1 2007

At a glance

	Thousands of euros	1. Quarter 2007	1. Quarter 2006	Change
I Key figures
	Sales	73,949	62,878	+18%
	Sales abroad as a percentage of sales	85%	85%	+/- 0%-pts.
	Cost of sales	30,150	24,890	+21%
	as a percentage of sales	40.8%	39.6%
	Gross profit	43,799	37,988	+15%
	as a percentage of sales	59.2%	60.4%
	Sales and service expenses	19,401	17,720	+9%
	as a percentage of sales	26.2%	28.2%
	Research and development expenses	2,715	2,452	+11%
	as a percentage of sales	3.7%	3.9%
	General administration expenses	3,870	3,056	+27%
	as a percentage of sales	5.2%	4.9%
	EBIT – earnings before interest and taxes	17,539	14,648	+20%
	as a percentage of sales	23.7%	23.3%
	EBT – earnings before taxes	17,714	14,665	+21%
	as a percentage of sales	24.0%	23.3%
	Group earnings	11,329	9,334	+21%
	as a percentage of sales	15.3%	14.8%
	per share in euros	1.00	0.82
	Employees (as an annual average)	927	837	+11%
	Sales per employee	79.8	75.1	+6%
	Cash flow from operating activities	4,190	7,917	-47%
	per share in euros	0.37	0.70
	Balance sheet total	152,549	140,861	+8%
	Equity as a percentage	117,478	97,398	+21%
	of balance sheet total	77.0%	69.1%
	Working capital (without liquid funds)	63,433	55,161	+15%
	as a percentage of sales	85.8%	87.7%

Dear Shareholders, Dear Business Partners,

Thank you for your interest in RATIONAL AG.

This report sets out information on RATIONAL AG's business situation in the first quarter of 2007, along with the prospects for the further development of the company during fiscal year 2007.

Robust global economy

Even after four years of strong expansion there was still plenty of momentum in the global economy as 2007 dawned. The Institute for the World Economy (IfW) has revised its forecast for growth in global production upwards from 4.4 percent to 4.7 percent. This optimistic outlook is based on the assessment that the growth in the world's production potential has intensified considerably in recent years. While it is expected that macroeconomic capacity utilization will continue to fall in the US until next year, the upturn in Japan and the European Union looks set to continue.

The euro has strengthened considerably compared to the first quarter of the previous year, particularly against the US dollar and the Japanese yen.

I Business development

I Economic report

RATIONAL sales up by 18 percent

With sales growth of 11 million euros or 18 percent to 73.9 million euros (previous year 62.9 million euros) RATIONAL AG has continued with its impressive international course of success in the first quarter of 2007. The strongest growth was seen not simply in the established subsidiaries in the industrialized countries, but above all in sales in the new markets of Eastern Europe, Latin America and Asia. Opening up high-potential markets with our own extremely efficient sales organizations proved once again to be the guarantee of successful growth for RATIONAL AG in the first quarter of 2007.

EBIT up over-proportionately by 20 percent

Despite the further significant rise in raw material prices at the start of 2007, especially the alloy surcharge for high-grade stainless steel, the 20 percent rise in EBIT (earnings before interest and taxes) to 17.5 million euros (previous year 14.6 million euros) was above average. The EBIT margin is also slightly up, from 23.3 percent to 23.7 percent. Major productivity gains were achieved again in manufacturing as well as in sales and service costs, where, according to the principle "learning from the best", the sales subsidiaries were able to translate RATIONAL's uniform global sales process into action with ever increasing success. The over-proportionate rise in administrative costs is because of higher consultancy fees and severance payments in the reporting period.

Higher growth thanks to cell division, success in new markets

In many companies increasing growth and increasing size bring with them disproportionate complexity, division of labour and hierarchical levels. Consistent focus on customer benefit often falls by the wayside. To prevent this happening from the outset, RATIONAL has for years been divided into transparent, legally autonomous subsidiaries with professional entrepreneurial management and clearly defined tasks. Employees of any company know their precise objectives and tasks, and hence their contribution to customer benefit. As entrepreneurs within the business they take personal responsibility and make whatever decisions are needed themselves.

One example of the successful implementation of this strategy is the new subsidiary RATIONAL International AG established in 2006. With its flexible and highly efficient sales structures the company mainly focuses on tapping growth potential in emerging countries. In this way RATIONAL AG is in an ideal position to take advantage of the fastgrowing economic importance of the emerging markets.

The economic strength of the emerging markets has already reached the level of the traditional industrialized countries and is likely to surpass them more and more in

coming years. In future the world's major economies will be China, the US, Japan, India and Russia.

Participation in trade fairs impresses customers worldwide

RATIONAL AG has fundamentally revamped its international trade fair strategy. To impress upon visitors to trade fairs its message about the benefits and the time that the SelfCooking Center® frees up for chefs in professional kitchens to give free rein to their creativity, the excellent quality of the food and attractively presented dishes are at the centre of RATIONAL's gastronomic experience. At fairs held in the first quarter of 2007, such as "Internorga" in Hamburg, "Hostelequip" in Malaga, "Alles für den Gast" in Salzburg, "Hoteres" in Tokyo or "Eurogastro" in Warsaw, visitors were highly impressed by the technology on view on the RATIONAL stand.

... always better: New trade fair concept

Malaga, Spain

The new RATIONAL trade fair concept delighted visitors on the HOSTELEQUIP in Spain from March 03 to 06, 2007. Booth-design and demonstration have been perfectly synchronised.

Tokio, Japan

On the HOTERES from March 13 to 16, 2007 RATIONAL reached new records. With a huge increase in customer contacts the exhibition was the most successful ever for the team of RATIONAL Japan.

Hamburg, Germany

The INTERNORGA from March 09 to14, 2007 was the most successful ever for RATIONAL Germany. Experienced and motivated employees generated customer contacts on a new top level.

International Best Service Award 2007

The International Best Service Award is one of the most prestigious international awards for innovative and future-oriented service strategies. More than 30 companies from around the globe with excellent service organizations competed for the International Best Service Award, which is supported by famous names such as SAP and the business magazine "Markt und Mittelstand". RATIONAL AG excelled in the customer service category and as one of the Top 3 companies won the "International Best Service Award 2007" for its outstanding worldwide service partner strategy. Another crucial factor was the strictly applied "one-piece-flow process" and the "Entrepreneurs in the Business" principle practised by all employees. The award was presented by Prof. Pfeiffer from the University of Reutlingen in Germany at the award ceremony held on February 22, 2007 in Berlin.

Investor Relations is a Board matter

Investor Relations work has a very high profile at RATIONAL AG. Board members are always personally available to shareholders, analysts, fund managers and interested parties. We regard open, transparent and timely provision of information for everyone involved in the capital market as our prime maxim. In the first quarter of 2007 the Board provided full details of business trends and future plans for the company at the Financial Statement Press Conference in Munich, the DVFA analysts' conference in Frankfurt, at roadshows in Zurich, Paris, Edinburgh, London, Amsterdam and Vienna, and during numerous visits by international investors to the company's headquarter in Landsberg.

Opportunities and risks I Risk report

The opportunities for the further successful development of RATIONAL AG lie in its competition-beating technology, the transparent and highly efficient global sales and marketing network with its own sales subsidiaries and the fact that only a small part of the potential market of 2.5 million professional kitchens with a requirement for RATIONAL technology has been tapped. The technology lead is being further extended through targeted investment in research and development.

... always better: International recognition

RATIONAL AG was honoured with the "International Best Service Award 2007" as one of the Top 3 companies.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx European Roadshows

Opening up new markets and the ever better penetration of established markets combined with rising sales efficiency are also the safeguard for future outstanding sales opportunities.

Theoretical risks predominantly relate to a further rise in raw material prices, the increasing strength of the euro against the USD, GBP and JPY, and general geopolitical processes of change in individual sales markets. Risk reducing effect come from the fact, that some 70 percent of total sales are handled in euro.

RATIONAL AG possesses an international risk management system ideally suited to identify and analyse opportunities and risks at an early stage and to take the appropriate measures.

High sales and earnings growth for 2007 confirmed I Outlook

2007 will see investment in the further expansion of the international sales and marketing network, in research and development and in the expansion of production capacities. With the SelfCooking Center® and the VarioCooking Center® the RATIONAL group has a unique, innovative technology platform entailing maximum customer acceptance. Against this background we expect sales growth in fiscal 2007 of 15 percent to 325 million euros, together with a rise in EBIT, also of 15 percent, to 93 million euros.

Landsberg am Lech, April 27, 2007

RATIONAL AG The Managing Board

... always better: the RATIONAL share

Finance calendar 2007

I Income Statement RATIONAL Group

Thousands of euros	Q1 2007	Q1 2006
Sales	73,949	62,878
Cost of sales	-30,150	-24,890
Gross profit	43,799	37,988
Sales and service expenses	-19,401	-17,720
Research and development expenses	-2,715	-2,452
General administration expenses	-3,870	-3,056
Other operating income	613	1,052
Other operating expenses	-887	-1,164
Earnings before interest and taxes (EBIT)	17,539	14,648
Financial results	175	17
Earnings before taxes (EBT)	17,714	14,665
Taxes on income	-6,385	-5,331
Group earnings	11,329	9,334
Retained earnings brought forward	66,914	49,248
Retained earnings	78,243	58,582

	Q1 2007	Q1 2006
Average number of shares (undiluted)	11,370,000	11,370,000
Earnings per share (undiluted) in euros relating to the consolidated results and the number of shares	1.00	0.82
Average number of shares (diluted)	11,370,000	11,381,500
Earnings per share (diluted) in euros relating to the consolidated
results and the number of shares	1.00	0.82

I Balance Sheet
RATIONAL Group
Assets

Thousands of euros Thousands of euros	March 31, 2007	March 31, 2006	Dec. 31, 2006
Long-term assets	32,508	32,064	32,525
Intangible assets	1,741	1,051	1,441
Property, plant and equipment	27,305	27,456	27,576
Financial assets	218	218	218
Other long-term assets	101	94	191
Deferred tax assets	3,143	3,245	3,099
Short-term assets	120,041	108,797	114,034
Inventories	16,918	15,322	15,496
Trade receivables	55,513	46,323	53,140
Other short-term assets	4,331	3,374	4,815
Securities	5,996	12,997	-
Cash and cash equivalents	37,283	30,781	40,583
Balance sheet total	152,549	140,861	146,559

I Balance Sheet	Thousands of euros	March 31, 2007	March 31, 2006	Dec. 31, 2006
RATIONAL Group	Equity	117,478	97,398	105,816
Equity and liabilities	Subscribed capital	11,370	11,370	11,370
	Capital reserves	27,351	26,932	27,018
	Revenue reserves	514	514	514
	Retained earnings	78,243	58,582	66,914
	Long-term liabilities	3,379	4,388	3,633
	Provision for pensions	677	689	672
	Other long-term liabilities	2,702	3,699	2,961
	Short-term liabilities	31,692	39,075	37,110
	Liabilities for current tax	2,340	5,655	3,432
	Short-term provisions	15,546	16,867	17,675
	Liabilities to banks	-	5,620	-
	Trade accounts payable	10,302	6,820	6,787
	Other short-term liabilities	3,504	4,113	9,216
	Liabilities	35,071	43,463	40,743
	Balance sheet total	152,549	140,861	146,559

I Statement of
Changes in Equity
RATIONAL Group

Thousands of euros	Subscribed capital	Capital reserve	thereof non-realised	Revenue reserves	Retained earnings	Total
Balance at Jan. 1, 2006	11,370	28,792	-2,338	514	49,248	89,924
Dividends	-	-	-	-	-	-
Group earnings	-	-	-	-	9,334	9,334
Differences from currency conversion	-	-59	-	-	-	-59
Other changes	-	-1,801	-1,801	-	-	-1,801
Total changes	-	-1,860	-1,801	-	9,334	7,474
Balance at Mar. 31, 2006	11,370	26,932	-4,139	514	58,582	97,398
Balance at Jan. 1, 2007	11,370	27,018	-3,792	514	66,914	105,816
Dividends	-	-	-	-	-	-
Group earnings	-	-	-	-	11,329	11,329
Differences from currency conversion	-	333	333	-	-	333
Other changes	-	-	-	-	-	-
Total changes	-	333	333	-	11,329	11,662
Balance at Mar. 31, 2007	11,370	27,351	-3,459	514	78,243	117,478

I Cash Flow Statement	Thousands of euros	Q1 2007	Q1 2006
RATIONAL Group	Earnings from ordinary activities	17,714	14,665
	Cash flow from operating activities	4,190	7,917
	Cash flow from investing activities	-1,010	-1,688
	Cash flow from financing activities	-438	5,814
	Exchange rate changes	-46	-28
	Change in cash funds	2,696	12,015
	Cash on January 1	40,583	31,763
	Cash on March 31	43,279	43,778
	Cash in hand, cash in bank accounts, securities on March 31	43,279	43,778
	Long-term funds not included in cash position (> 3 months)	0	0

I Sales

Thousands of euros	Q1 2007		Q1 2006
Germany	11,443	15%	9,359	15%
Europe (excluding Germany)	42,229	57%	34,696	55%
Americas	8,506	12%	7,959	13%
Asia	8,453	11%	7,842	12%
Rest of the world *)	3,318	5%	3,022	5%
Total	73,949	100%	62,878	100%

*) Australia, New Zealand, Near/Middle East, Africa

The sales per region are shown according to customer location.

Segmentrechnung Segment reporting			Activities of the subsidiaries in:		Activities	Total	Reconcil.	Group
9 Monate 2006 Q1 2007	Germany	Europe excl.	Americas	Asia	of the parent	for segments
Thousands of euros		Germany			company
External sales*	11,354	47,918	6,735	2,703	5,239	73,949	-	73,949
vs. pervious year	+22%	+25%	+9%	-9%	-15%	+18%	-	+18%
share	15%	65%	9%	4%	7%	100%	-	100%
Inter-company sales	-	686	-	-	48,817	49,503	-	49,503
Segment sales*	11,354	48,604	6,735	2,703	54,056	123,452	-	123,452
vs. pervious year	+22%	+25%	+9%	-9%	+14%	+18%	-	+18%
Segment result*	21	3,860	-431	-116	14,281	17,615	-75	17,539
vs. pervious year	+292	+3,336	-883	-89	+598	+3,254	-363	+2,891

* Compared to 2006 the new group structure has effects on sales and results especially in the segments "Parent company" and "Europe"

Segment reporting			Activities of the subsidiaries in:		Activities	Total	Reconcil.	Group
Q1 2006	Germany	Europe excl.	Americas	Asia	of the parent	for segments
Thousands of euros		Germany			company
External sales	9,311	38,301	6,155	2,977	6,134	62,878	-	62,878
share	15%	61%	10%	4%	10%	100%	-	100%
Inter-company sales	-	435	-	-	41,299	41,734	-	41,734
Segment sales	9,311	38,736	6,155	2,977	47,433	104,612	-	104,612
Segment result	- 271	524	452	-27	13,683	14,361	287	14,648

I Segment reporting RATIONAL activities are focussed on one business segment: the development, production and marketing of devices used for the thermal preparation of food in industrial kitchens. The company does currently not engage in further significant independent product lines which are also reported internally as segments. That is why the primary and only reporting format for the segments is organised geographically. In the segments RATIONAL summarises the subsidiaries in the geographical regions in accordance with the stipulations in IAS 14.13 governing the structure according to the location of assets.

Besides the segments Germany, Europe excl. Germany, Americas and Asia the fifth segment represents the activities of the parent company, including the LechMetall Landsberg GmbH and the RATIONAL Technical Services GmbH, founded in April 2004. The activity of this segment comprises the development, production and delivery of the products to the subsidiaries, but also the supply of OEM-customers around the world. Sales revenues of FRIMA Deutschland GmbH have been allocated from segment "Europe" to segment "Germany" for business year 2006. The reconciliation column reflects the effects of consolidation.

I Accounting principles	The consolidated financial statements of RATIONAL AG as per March 31, 2007 were prepared in compliance with the International Accounting Standards (IAS) adopted and published by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards (IFRS), and their interpretation by the Standing Interpretation Committee (SIC) and the International Financial Reporting Interpretations Committee (IFRIC) respectively as these are to be applied in the EU, along with the IFRS in their entirety and those supplementary conditions to be applied as per section 315a (1) German Commercial Code (HGB). All the effective standards for the financial year 2007 were taken into account, with the result that a true and fair view of the RATIONAL group´s net assets, financial positions and result of operations has been given. The accounting, valuation and consolidation methods remain unchanged from those used last year. Balance sheet structure is in accordance with requirements of IAS 1.
I Consolidated companies	The consolidated companies as per March 31, 2007 comprise four domestic and fifteen foreign subsidiaries, beside RATIONAL AG as the parent company. There is no change in consolidated companies versus 1st quarter 2006 and balance sheet date December 31, 2006.
I Associated companies and persons	There were no significant transactions with companies or people associated in any way whatsoever with RATIONAL AG in the 1st quarter 2007.
I Change in the Executive Board	Mr Thomas Polonyi, chief operating officer sales and marketing, left the RATIONAL AG by mutual agreement as from April 30, 2007.
I DVFA result	DVFA result as per March 31, 2007 matches to earnings per share according to IAS/IFRS as shown in the profit and loss statement.

Iglinger Straße 62 86899 Landsberg am Lech Tel. 08191 3270 Fax 08191 327272 www.rational-ag.com