Successful Crisis Management at Rába

The Hungarian automotive firm Rába Plc. closed the 2020 business year with a consolidated, group-level sales revenue of HUF 38.7 billion, the company reports.

The report highlights that thanks to the measures introduced in the spring, the management successfully handled the crisis and, exceeding the set goal, restored profitable operations on an annual basis, along with a positive and stable cash production. In terms of operating profitability 2020 was the most successful second half year since 2001, and fourth quarter since Rába went public.

Despite the difficulties, the company steadfastly kept meeting the customers’ needs, and owing to this and the customer focus, Rába was among the first to recognize and tap into the improvement in demand. This was particularly noticeable in the two most important strategic product segments: the heavy truck category, where the company enjoys the trust of global customers such as Scania and the Volvo Group, and the high-performance agricultural axle market, where Rába is a complete solution partner for John Deere and Claas.

The main elements of the management's development-oriented crisis strategy are high-quality customer service, increased administrative efficiency and the widest possible application of Industry 4.0 automation solutions. The result of this was already noticeable in the second half of 2020: Rába achieved outstanding operating profit in Q4, with 10.1% efficiency an operating profit of HUF 1.1 billion was generated. Thus the group remained profitable at the operating level in 2020, and at the same time registered the highest second half year’s operating profit since 2001.

Regarding the cash generating efficiency, the positive effects of the crisis measures are even more spectacular: the cash production efficiency, improving by 9.6 percentage points, generated a profit of HUF 1.7 billion at the EBITDA level. This is the second best Q4 result achieved since the listing of the Rába Group.

Despite the challenges posed by the COVID-19 epidemic, the financial position of the Rába Group was characterized by a stable liquidity position in 2020 Q1-Q4. The level of the net borrowing portfolio reached HUF 6.4 billion at the end of the reporting period, which is a decrease of HUF 1.5 billion compared to the level at the end of the previous year.

As supported by the shareholders, the sale of real estate initiated in 2020 may take place before the general meeting approving the annual report. The transaction, once completed, will provide the company with additional profit and cash surplus.

The CEO of RÁBA Automotive Holding Plc., István Pintér pointed out that ˮdespite the extraordinary year, which, in addition to the epidemic, was also affected by the cessation of defense orders, the management successfully brought the company back to a stable and profitable operating level. In the most profitable key markets we have recorded a significant increase in the order books beginning in the second half of last year, and this trend is expected to continue this year as well. As a listed company and partner of leading international manufacturers, Rába is a valued company in the global automotive industry, where it is known for its high-tech axles manufactured for vehicles worth hundreds of thousands of euros. The quality production and punctual delivery under all circumstances of the complex structures based mostly on proprietary technology are the focus of our customer-driven operation.”