Q3 25/26 results highlighted encouraging operational momentum, despite fx noise. Reported sales declined 2% yoy to € 630m (eCons: € 648m; eNuW: € 647m) against a tough comp that in fact had an 8pp fx-tailwind. Importantly, fx-adj. sales grew 16% yoy, supporting our positive view on underlying demand. Moreover, the EBIT margin improved to 8.9% (+0.2pp yoy, 0.2pp better than expected, also see p.2), thanks to a decline in material expenses (-5.5% yoy).
Q3 Airline Catering sales (c. 80% of group) declined 3% yoy (fx-adj. up 19% yoy) to € 471m. Importantly, profitability held up, showing an EBIT of € 39m, broadly stable yoy, supported by a favourable material cost trend (-4.4% yoy).
The demand setup into 2026 remains constructive for airline catering, with IATA expecting further passenger growth (c. 5% yoy). Turkey adds a tangible volume tailwind: Istanbul Airport is targeting roughly 7% passenger growth in 2026 (close to 90m). At the same time, Turkish Airlines is stepping up investments at the hub including catering infrastructure and it has the ambition to double its aircraft fleet within the next 10 years. DOC's new 150,000m² Istanbul gourmet kitchen, for which construction starts in Feb 26, should put capacity behind that growth.
In addition, DOC is seeing firm tender momentum, having participated in 73 closed tenders in 2025 with a win rate >50% (17 new contracts, remainder extensions), supporting further growth and visibility in Airline Catering. With that, we expect reported growth to re-accelerate in Q4 as fx comps ease.
International Event Catering delivered a "flat but healthy" quarter with sales of € 109m (+1% yoy) and EBIT of € 12m (+2% yoy; margin: 11.2%). The underlying sales run rate remains solid (+13% yoy in 9M 25/26 adj. for the EURO 2024 event last year), supported by Formula 1 hospitality and strong utilisation across DOC's Munich venues. Moreover, DOC seems to make progress on the FIFA world cup in 2026, with details expected in the coming weeks (eNuW: c. € 30m of sales potential, partly reflected in estimates).
Meanwhile, balance sheet quality continues to improve, supported by better than expected cash generation (FCF: € 66m in Q3). DOC has deleveraged to a net debt/EBITDA of 0.2x, effectively close to net debt neutral (only € 52m after Q3). This provides resilience and financial flexibility.
All in all, DOC maintains exposure to the secular growth in air travel, a differentiated premium positioning (validated by Turkish Airlines' Skytrax 2025 onboard catering award) and sound contract visibility.
BUY, unchanged PT of € 266, based on DCF.
ISIN: AT0000818802
