Significantly growing profitability, continuing successful crisis management

RÁBA Plc. closed the first quarter of 2021 with a consolidated, group level sales revenue of HUF 11.3 billion. Thanks to the market recovery and the company's consistently implemented crisis management measures, the profitable operations restored by the end of last year continued in the first three months of 2021.

In the review period, a key characteristic of Rába's business environment was the marked growth in the heavy truck segment, which was driven by the booming freight forwarding activity, promising a positive outlook for demand for the remainder of the year. In the raw material market, however, a sharp rise in prices was caused by steel production, which was partially ceased, and only gradually reopened as a result of the pandemic. Rába can typically pass on the cost increases to its partners with a half-year delay, which has affected the company's profitability this year as well.

The two key elements of the crisis strategy posted in 2020 were the improvement of flexible adaptation and the reduction of administrative costs by improving efficiency. In the first quarter of 2021, Rába managed to reduce corporate general and administrative expenses by HUF 427 million, which contributed to a significant improvement in the operating profitability of all business units, both in terms of volume and efficiency. With an outstanding growth, the group level operating profit reached HUF 399 million in the review period.

The positive effects of the crisis measures are also noteworthy regarding the cash generating efficiency:  despite the significant hike in raw material prices, the EBITDA profitability managed to reach 8.9 percent, the average level for the industry. The remarkable efficiency improvement of 5.1 percentage points resulted in a group level EBITDA of more than HUF 1 billion in the first quarter of 2021.

ˮRába started out this year once again proving to be a financially stable company, which could successfully rely on its strategic partnerships, further strengthened market positions and the results of its consistent efficiency improvement measures even in the midst of a crisis. In addition to the still encouraging market outlook, our goal is to build a strategy for a 21st century company, the three main pillars of which we have identified. On the one hand, we strive to modernize manufacturing, develop technology and provide quality service to our customers. On the other hand we also focus on optimizing and streamlining our infrastructure and operational processes, and, thirdly, we will place great emphasis on business development, building new partnerships, and establishing technological cooperations.” – said Béla Hetzmann, Chairman-CEO of Rába Automotive Holding Plc.