Inbox: Analysts on Do & Co: Successful crisis management and focus on post-crisis growth

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20.02.2021

20.02.2021

Emailed from / found at: Erste Group Research (BSN note: running text in the original of the broadcaster, title (always) and images (often) by boerse-social.com from the photaq.com photo archive)

From Erste Group’s Equity Weekly: On Thursday this week, DO&CO published the figures for the first nine months of FY 2020/21. As expected, the pandemic left deep marks and pushed sales in the first three quarters by 75% y / y to EUR 189.9 million.  The  EBITDA shrank by almost 70% y / y to EUR 26.6 million and the net loss was EUR – 35.6 million. Nonetheless, it was encouraging to see that DO&CO with around EUR 78.6 million in the third quarter achieved stable sales compared to the 2nd quarter and after two negative quarters turned the quarterly operating result (EUR 6.7 million) and net result (EUR 1.7 million) back into the black. Reflecting the positive influence of the austerity measures and state support programs to combat the COVID-19 pandemic, the EBITDA margin even increased to 25.5% in the third quarter of FY 2020/21.

Outlook. © www.de24.news

 The  Q1-3 2020/21 performance once again demonstrated the company’s successful crisis management and constant focus on growth after the crisis. © www.de24.news

 The  major order with Delta Air Lines for the Detroit hub (10 years from March 16, 2021) together with numerous other newly announced contracts (especially expansion of the cooperation with Jet Blue with new locations in Los Angeles, San Diego and Palm Springs and intensification the cooperation with Qatar Airways and Etihad) offer a strong starting point to benefit as much as possible from the coming upswing in the travel and catering industry. For the 4th quarter of 2020/21 (January – March 2021), DO&CO does not yet expect any improvement, but expects the markets to open gradually thereafter. In the coming business year 2021/22, management expects at least a doubling of sales and an EBITDA margin of around 12-14%. Thanks to its quick reduction in fixed costs and its secured liquidity (recently strengthened by the EUR 100 million convertible bond), the management sees itself well positioned in all divisions to benefit from the market opening with increasing vaccination rates and to expand its market share. However, the lean period until the corona restrictions are relaxed will likely be even longer in view of the slower than expected vaccination campaigns and new virus variants. Nevertheless, we are sticking to our assessment that with the lifting of the corona measures, DO&CO should quickly return to the old growth path thanks to its excellent market positions. We are therefore sticking to our recently confirmed accumulation recommendation.





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Inbox Analysts Successful crisis management focus postcrisis growth

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