The Christmas days and of course New Year's Eve are the important year-end business for sparkling wine producers.

The Germans are always fond of "one glass" of sparkling wine - and this doesn't necessarily have to come from French Champagne.

In Germany, too, in Rhineland-Palatinate to be precise, there is adequate sparkling wine from a company that has developed into one of the most important sparkling wine and semi-sparkling wine producers in Europe over the past 25 years: Schloss Wachenheim AG.

In Germany, the Sektkellerei Schloss Wachenheim is one of the top 3 in the industry with Rotkäppchen-Mumm and Henkell & Co.

The company had mastered the turbulence surrounding Covid-19 in recent years, against the background that the business depends to a large extent on the catering trade.

More recently, higher costs have made themselves felt.

In addition, inflation may have caused some consumers to think twice about whether another bottle of wine or sparkling wine is really necessary.

Nevertheless, Schloss Wachenheim managed to continue on its growth course - also because the company was able to push through higher prices.

Price increases are having an effect

In the first quarter of the 2022/23 financial year (end of September), sales volume rose by 7.1 percent year-on-year to 57.0 million (converted to 0.75l bottles).

Particularly high revenue growth was recorded in France and East-Central Europe.

Price increases ensured that sales increased disproportionately.

The increase was 13.1 percent to 98.0 million euros.

The operating result (EBIT) was reported at 8.3 million euros, after 6.8 million euros in the same period of the previous year.

This was an increase of 22.1 percent.

For the current fiscal year, the company expects adjusted earnings before interest and taxes (EBIT) of between EUR 25 and 27 million.

According to the forecast, however, the restructuring of production capacities in France will have a negative impact of EUR 4.5 million on the earnings side.

Some production capacities are bundled and partly relocated to Germany.

According to the company, one reason for the restructuring is falling sales volumes in recent years.

A calm chart trend looks different

Anyone who has been a shareholder of Schloss Wachenheim for a long time will appreciate the dividend as a reassuring factor given the volatility of the share price over many years.

The company is a solid dividend payer.

The dividend yield is currently 3.5 percent.

The stock is currently trading below the 200-day line and is therefore in the overall downward trend.

Looking back over the decades, a shareholder in Schloss Wachenheim still gets a good return on the bottom line.

10,000 euros became more than 17,000 euros - including strong nerves because of the temporary, sometimes sharp price slumps.

As a secondary stock, Schloss Wachenheim is only covered by a few analysts.

One of them is GSC Research, which gives the sparkling wine share a “buy” rating and a target price of EUR 20.00.

For the very important current Christmas business, GSC assumes that Wachenheim Castle should do surprisingly well.

Well then cheers.