DO & CO AG Reports Strong Q1 Results, Outperforms Travel Industry Fears

DO & CO AG has released robust Q1 results, counteracting concerns of a slowdown in air travel. Revenues surged by 11% year-on-year to €612 million, with growth reported across all segments. Airline Catering rose by 11% to €467 million, buoyed by new contracts and consistent demand. International Event Catering increased by 10% to €100 million, partly due to strong performance in Formula 1 and other sports events. Restaurants, Lounges, and Hotels also saw an 8% increase.

The quarter marked a record EBIT, expanding by 44% to €53 million. The key driver was an improved gross margin, notably in Airline Catering. A 26% incremental EBIT margin underscores profitability gains from low fixed costs. Furthermore, cash flow from operations improved significantly, boosting free cash flow to €23 million from a deficit in the previous year.

The company maintains its annual sales growth guidance and increases the EBIT margin target. The mid-term outlook predicts sustained revenue growth and expanding margins. As a result, the target price was revised to €266, with a continued BUY recommendation.