RATIONAL AG — Interim / Quarterly Report 2008

May 7, 2008

Quarterly Report Q1 2008

At a glance

I Key figures	Thousands of euros	1st Quarter 2008	1st Quarter 2007	Change
	Sales	79,529	73,949	+8%
	Sales abroad as a percentage of sales	85%	85%	+/- 0%-pts.
	Cost of sales	31,533	30,150	+5%
	as a percentage of sales	39.6%	40.8%
	Gross profit as a percentage of sales	47,996 60.4%	43,799 59.2%	+10%
	Sales and service expenses as a percentage of sales	22,598 28.4%	19,401 26.2%	+16%
	Research and development expenses as a percentage of sales	2,973 3.7%	2,715 3.7%	+10%
	General administration expenses as a percentage of sales	3,898 4.9%	3,870 5.2%	+1%
	EBIT – earnings before interest and taxes as a percentage of sales	18,733 23.6%	17,539 23.7%	+7%
	EBT – earnings before taxes as a percentage of sales	19,029 23.9%	17,714 24.0%	+7%
	Group earnings as a percentage of sales per share in euros	13,925 17.5% 1.22	11,329 15.3% 1.00	+23%
	Cash flow from operating activities per share in euros	10,860 0.96	4,196 0.37	+159%
	Balance sheet total	193,158	152,549	+27%
	Equity as a percentage of the balance sheet total	137,555 71.2%	117,478 77.0%	+17%
	Working capital (without liquid funds) as a percentage of sales	66,088 83.1%	63,433 85.8%	+4%
	Employees (as an annual average)	1,039	927	+12%
	Sales per employee	76.5	79.8	-4%

Dear Shareholders, Dear Business Partners,

Many thanks for your interest in RATIONAL AG.

This report provides information on RATIONAL AG's business situation in the first quarter of 2008, along with the prospects for the further development of the company during fiscal year 2008.

I Economic report

Crisis in the financial markets weakens economy in 2008

The world's financial markets have slipped into deep crisis on the back of the subprime mortgage collapse in the United States. The US is close to recession, if not already in one. Additionally, growth in Europe is likely to drop below 2 percent in 2008. The emerging markets too will not be able to shield themselves entirely from these negative effects, but will nevertheless post growth of over 6 percent in 2008. The global economy overall is still forecasted to grow by around 3 percent.

The US dollar and the pound sterling have fallen drastically in value against the euro in recent months. Although the US dollar is already regarded as undervalued, it is expected to weaken more in the coming months.

Sales growth of 8 percent is on target - Special effect of Easter in March

It is relevant to consider that the seasonal plan allocation for the first quarter of 2008 is affected by the earlier Easter week in March. In comparison to last year, March had not only 3 fewer business days, but also the usual Easter holiday period fell into this month.

With sales growth of 8 percent in the first quarter to 79.5 million euros (previous year at 73.9 million euros), we made a good start in the year, and are in line with the projected growth of 15 percent for the entire year.

Consolidated earnings up by 23 percent

The company's earnings situation was especially pleasing in the first quarter. Consolidated earnings rose by 23 percent from 11.3 million euros in the previous year to 13.9 million euros in the 1st quarter of 2008. In addition to the 7 percent improvement in EBIT (earnings before interest and taxes), the development was also influenced by the much lower rate of tax introduced as a result of changes in the German tax legislation.

Equity rose by 17 percent

As a result of the good earnings growth, RATIONAL AG's equity capital rose by 20.1 million euros, or 17 percent, to 137.6 million euros on 31.03.2008 compared to last year. The equity ratio stands at 71 percent (previous year at 77 percent) despite the over proportional growth of the balance sheet total due to the investment in the new plant in Landsberg.

Outstanding cash flow performance

Cash flow from operating activities rose by 6.7 million euros or 159 percent from 4.2 million euros the previous year to 10.9 million euros in the 1st quarter of 2008. This is not only due to higher earnings but also to improvements in receivables management.

In cash flow from investment activities, investments in fixed assets, mainly driven by the new plant, are offset by disposals of fixed-term deposits, resulting in a cash inflow of 9 million euros.

RATIONAL in the world of motor sports

RATIONAL's cooking technology has become an indispensible feature of major sporting events. Thanks to speciality dishes from the SelfCooking Center®, guests from all over the world certainly get their money's worth when it comes to good eating as well as to sport entertainment.

This is the third year in which the cooking for the Formula 1 race in Bahrain will employ the latest RATIONAL technology. All the catering is managed from facilities right next to the pit lane where Michael Schumacher once changed tyres in a matter of seconds, as do Alonso & Co. today. Drivers, officials and VIPs all enjoy the culinary delights produced by the RATIONAL SelfCooking Center®. Team RATIONAL International

Away from the excitement of racing itself, RATIONAL has been involved in motor sports for a number of years. For example, RATIONAL cooking technology is in everyday use at the testing and training facilities of BMW, Sauber Petronas, Porsche or MAN. "The technology and the opportunities RATIONAL offers us are really unique. We were won over by the SelfCooking Center® after the very first test run", raves Eduard Hoffmann, catering manager at MAN in Munich.

RATIONAL in the world of motor sports

No Limits – thanks to continuous improvement

Better corporate quality thanks to continuous improvement

Continuous improvement is more than just a buzzword at RATIONAL, it is an everyday practice. Every employee is called on to make improvements and to communicate them in a simple and unbureaucratic fashion. As an incentive to active involvement in the worldwide continuous improvement process, every suggestion implemented is rewarded with a bonus. In addition, there are further attractive awards offered for the best suggestions on profitability, quality, cleanliness, organization and safety. The number of improvement suggestions submitted and implemented rose by more than 40 percent in 2007 to over 3,800.

Through these suggestions, we achieved savings of well over a million euros alone in 2007. Waste was consequently eliminated and ultimately, quality and competitiveness of the total company were further improved.

KVP − Continuous improvement process

Strategy Award for Mechanical Engineering: RATIONAL is the overall Winner

The Strategy Award for Mechanical Engineering recognizes successful corporate strategies and systematically derived strategy processes. Strategies and processes evaluated were

• the product strategy
• innovation management adapted to individual corporate targets
• forward-looking employee development and
• anticipation of future customer needs.

The annual strategy prize was awarded by the management consultancy company Oliver Wyman and the leading business journal 'Produktion'.

RATIONAL AG won the this year's Strategy Award as the overall Winner. A crucial factor for the jury was the outstanding assessment of all individual aspects – e.g. strategy, strategy process, links between operational planning and the target agreement system, as well as the company's many years of successful business development.

International Best Factory Award: RATIONAL belongs to the Top 3

As part of this benchmarking competition, the best companies in the field of production are identified each year. The aim is to boost inward and outward competitiveness using best practice comparisons. The organisers are the Export Academy of Baden-Württemberg and integrated management consultants GiMA Consult, along with the magazine 'Markt und Mittelstand'. RATIONAL, as one of the best companies, belongs to the TOP 3 of this competition.

The awards were presented to the winners at a festive ceremony held at the Axel Springer House in Berlin on February 21st, 2008 by the former Bavarian Prime Minister Edmund Stoiber.

Investors show active interest in RATIONAL

RATIONAL sees the open, transparent and timely provision of information as its top priority. Because of the high value placed on investor relations work, it is handled directly by the Executive Board.

At the balance sheet press conference in Munich and the DVFA analysts' conference in Frankfurt, the Executive Board provided full details of the results for the past fiscal year and the prospects for 2008. At conferences and roadshows in Frankfurt, Vienna, Brussels and Paris and during visits by investors to Landsberg, the Executive Board presented the company, set out the business trends and put itself at the disposal of shareholders, analysts, fund managers and interested parties for any kind of questions.

No Limits – RATIONAL the Winner

Strategy Award for Mechanical Engineering

As overall winner, RATIONAL accepted the much

International Best Factory Award:

Best Practice comparisons are essential to continue to improve corporate quality.

Opportunities and risks I Risk report

RATIONAL AG has an international risk management system which ensures the early identification and analysis of opportunities and risks and which enables us to take appropriate action. There are no significant changes to opportunities and risks presented in the last consolidated statement.

The strength of the euro against the US dollar and the pound sterling poses special risks at the moment. These are reduced by the fact that around 70 percent of group sales are in euros and thus, are unaffected by currency fluctuations.

I Outlook

High sales and earnings growth planned for 2008

Despite adverse economic conditions and the unexpected, continuous decline in the value of the US dollar and pound sterling, we are confident to achieve the planned 15 percent increase in sales to 387 million euros and the proportional increase in EBIT of 15 percent to 106 million euros in 2008.

Landsberg am Lech, April 25, 2008

RATIONAL AG The Executive Board Sales and earnings growth despite negative exchange rate trends and forecast of declining global economic growth rates

Movement of the US dollar and pound sterling against the euro

RATIONAL grows continuously and organically

I Income Statement RATIONAL Group

Thousands of euros	Q1 2008	Q1 2007
Sales	79,529	73,949
Cost of sales	-31,533	-30,150
Gross profit	47,996	43,799
Sales and service expenses	-22,598	-19,401
Research and development expenses	-2,973	-2,715
General administration expenses	-3,898	-3,870
Other operating income	2,588	613
Other operating expenses	-2,382	-887
Earnings before interest and taxes (EBIT)	18,733	17,539
Financial results	296	175
Earnings before taxes (EBT)	19,029	17,714
Taxes on income	-5,104	-6,385
Group earnings	13,925	11,329
Retained earnings brought forward	85,431	66,914
Retained earnings	99,356	78,243

Q1 2007
11,370,000
1.00
11,370,000
1.00

I Balance Sheet
RATIONAL Group
Assets

Thousands of euros Angaben in Tausend €	March 31, 2008	March 31, 2007	Dec. 31, 2007
Long-term assets	46,608	32,508	40,268
Intangible assets	1,709	1,741	1,732
Property, plant and equipment	42,453	27,305	36,097
Financial assets	218	218	218
Other long-term assets	254	101	248
Deferred tax assets	1,974	3,143	1,973
Short-term assets	146,550	120,041	147,154
Inventories	19,711	16,918	18,638
Trade receivables	55,288	55,513	61,393
Other short-term assets	6,799	4,331	4,828
Deposits with maturities of more than 3 months	8,000	-	17,000
Cash and cash equivalents	56,752	43,279	45,295
Balance sheet total	193,158	152,549	187,422

I Balance Sheet	Thousands of euros	March 31, 2008	March 31, 2007	Dec. 31, 2007
RATIONAL Group	Equity	137,555	117,478	123,988
Equity and liabilities	Subscribed capital	11,370	11,370	11,370
	Capital reserves	26,315	27,351	26,673
	Revenue reserves	514	514	514
	Retained earnings	99,356	78,243	85,431
	Long-term liabilities	19,396	3 ,379	19,813
	Provision for pensions	609	677	617
	Non-current loans	16,924	-	17,144
	Other long-term liabilities	1,863	2,702	2,052
	Short-term liabilities	36 ,207	3 1,692	43,621
	Liabilities for current tax	2,708	2,340	3,646
	Short-term provisions	16,706	15,546	19,424
	Current portion of non-current loans	866	-	856
	Trade accounts payable	9,577	10,302	9,292
	Other short-term liabilities	6,350	3,504	10,403
	Liabilities	55,603	3 5,071 63	,434
	Balance sheet total	193,158	152,549	187,422

I Statement of	Thousands of euros	Subscribed capital	Capital reserve	thereof: non-realised	Revenue reserves	Retained earnings	Total
Changes in Equity
RATIONAL Group	Balance at Jan. 1, 2007	11,370 2	7,018	-3,792	514 66	,914	105,816
	Differences from currency conversion	-	333	333	-	-	333
	Other changes	-	-	-	-	-	-
	Income statement for the
	period taken directly to equity	-	333	333	-	-	333
	Group earnings	-	-	-	-	11,329	11,329
	Total of profit and expense items recorded in the period under review	-	333	333	-	11,329	11,662
	Dividends	-	-	-	-	-	-
	Balance at Mar. 31, 2007	11,370 2	7,351	-3,459	514	78,243	117,478
	Balance at Jan. 1, 2008	11,370 26	,673	-4,137	514	85,431	123,988
	Differences from currency conversion	-	-358	-358	-	-	-358
	Other changes	-	-	-	-	-	-
	Income statement for the period taken directly to equity	-	-358	-358	-	-	-358
	Group earnings	-	-	-	-	13,925	13,925
	Total of profit and expense items recorded in the period under review	-	-358	-358	-	13,925	13,567
	Dividends	-	-	-	-	-	-
	Balance at Mar. 31, 2008	11,370 26	,315	-4,495	514	99,356	137,555
I Cash Flow Statement	Thousands of euros					Q1 2008	Q1 2007
RATIONAL Group	Earnings from ordinary activities					19,029	17,714
	Cash flow from operating activities					10,860	4,196
	Cash flow from investing activities					1,503	-1,010
	Cash flow from financing activities					-637	-444
	Changes in cash from exchange rate changes					-269	-46
	Change in cash funds					11,457	2,696
	Cash and cash equivalents on January 1					45,295	40,583
	Cash and cash equivalents on March 31					56,752	43,279
	Thousands of euros			Q1 2008		Q1 2007
I Sales	Germany			12,127	15%	11,443	15%
	Europe (excluding Germany)			42,738	54%	42,229	57%
	Americas			10,242	13%	8,506	12%
	Asia			10,689	13%	8,453	11%
	Rest of the world			3,733	5%	3,318	5%

The sales per region are shown according to customer location.

				Activities	Total	Reconcil.	Group
Germany	Europe excl.	Americas	Asia	of the parent	for segments
11,838	51,936	6,876	2,660	6,219	79,529	-	79,529
+4%	+8%	+2%	-2%	+19%	+8%	-	+8%
15%	65%	9%	3%	8%	100%	-	100%
-	1,099	-	-	53,556	54,655	-54,655	-
11,838	53,035	6,876	2,660	59,775	134,184	-54,655	79,529
+4%	+9%	+2%	-2%	+11%	+9%	-	+8%
-488	2,759	-760	-45	17,430	18,896	-163	18,733
-509	-1,101	-329	+71	+3,149	+1,281	-87	+1,194
		Germany		Activities of the subsidiaries in:	company

			Activities of the subsidiaries in:		Activities	Total	Reconcil.	Group
Segment reporting Q1 2007 Thousands of euros	Germany	Europe excl. Germany	Americas	Asia	of the parent company	for segments
External sales	11,354	47,918	6,735	2,703	5,239	73,949	-	73,949
share	15%	65%	9%	4%	7%	100%	-	100%
Intercompany sales	-	686	-	-	48,817	49,503	-49,503	-
Segment sales	11,354	48,604	6,735	2,703	54,056	123,452	-49,503	73,949
Segment result	21	3,860	-431	-116	14,281	17,615	-76	17,539

I Segment reporting RATIONAL's activities are focused on one business segment: the development, production and sale of appliances used in the thermal preparation of food in industrial kitchens. It does not currently carry any other significant independent product lines that would be reported as segments internally. For this reason, the primary and only segment reporting format is geographical. In the segments RATIONAL summarises its subsidiaries established in the various regions, in accordance with the stipulations of IAS 14.13 governing the apportionment of assets by location.

Besides the Germany, Europe excluding Germany, Americas and Asia segments, the fifth segment covers the work of the parent company (including LechMetall Landsberg GmbH, RATIONAL Technical Services GmbH and RATIONAL Komponenten GmbH). This segment represents the development, manufacture and supply of products to subsidiaries as well as supplies of goods and services to OEM customers. The effects arising from the consolidation operations are reflected in the reconciliation column.

14 Notes

I Accounting principles	The consolidated quarterly report is based on the accounting principles of the International Financial Reporting Standard (IFRS). The same valuation and balance sheet methods have therefore been applied as in the last financial statements. The rules in IAS 34 on condensed financial statements were applied in this case.
I Consolidated companies	On 31.03.2008 the consolidated RATIONAL AG group contains, in addition to the parent company RATIONAL AG, five subsidiaries in Germany and sixteen outside Germany. Compared to 31.03.2007 the subsidiaries RATIONAL Trading (Shanghai) Co., Ltd, based in Shanghai, China, and RATIONAL Komponenten GmbH, based in Landsberg, Germany, have been included in the consolidated group. There were no other changes to the composition of the consolidated group compared to the balance sheet date of 31.12.2007.
I Associated companies and persons	In the first 3 months of 2008 no significant transactions occurred with companies or individuals in any way associated with RATIONAL AG.
I DVFA result	DVFA earnings as at 31.03.2008 correspond to the earnings per share under IAS or IFRS shown in the profit and loss account.

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