First Berlin Equity Research has published a research update on Schloss Wachenheim AG (ISIN: DE0007229007). Analyst Simon Scholes reiterated his BUY rating and maintained his EUR 22.00 price target.

Q3 23/24 sales climbed 5.6% to €87.1m (Q3 22/23: €82.5m) as price rises and positive product mix and currency effects outweighed a 2.3% decline in volume to 43.0m bottles (Q3 22/23: 44.0m bottles). Q3 23/24 EBIT of €-2.2m (Q3 22/23: €0.9m) was impacted by restructuring costs of €0.8m in connection with the transfer of production in France from Wissembourg to Tournan-en-Brie. No restructuring charge was taken in Q3 22/23. Clean of the restructuring charge, the comparison was €-1.4m vs €0.9m. The France segment was the biggest contributor to the decline in underlying profitability, but EBIT in Germany was also lower. EBIT in East Central Europe climbed to €2.0m (Q3 22/23: €1.4m) helped by acquisitions in Romania (consolidated from 31 July last year) and local currency strength. Management remains confident that guidance of a ca. 5% increase in group full-year sales is achievable, and that EBIT will come in at the lower end of €28m-€30m and net profit before non-controlling interests at the lower end of €19m-€21m. We continue to believe that falling inflation will feed through to lower interest rates and improving consumer sentiment over the coming quarters. We maintain our Buy recommendation and price target of €22.00.