Topic: MWB released an H1 trading statement, that shows a strong sequential recovery in sales and profits. In detail:

H1 sales arrived at € 7.4m, up 110% yoy and 17% vs. H2’24. While the total number of watches sold was not disclosed, we still estimate a positive mix of higher watches sold coupled with increased average selling prices. Mind you, that the sale of a few very highly priced watches in a certain period can drastically skew the picture up- and downwards.

H1 EBITDA grew by 47% yoy to € 0.072m on the back of higher sales but with a lower margin (0.98% margin; -0.42pp yoy). Here, we attribute the margin decline to a slighlty higher cost base post IPO, but also see positive effects on OPEX due to the departure of one employee (now 2 FTE in total).

Following insignificant D&A, financial result and taxes, net income arrived 50% higher yoy at € 0.067m, showing that MWB now shows profitable operations, following previous loss-making years. Mind you, FY’24 results (net income: € -0.43m) were skewed by € 0.33m IPO-related one-off costs, but adjusted for these one-off IPO costs, MWB would still have reported a net loss. Going forward, we expect a slightly weaker H2 (yoy and sequentially) due to lumpy sales described above, but nevertheless an improving FY’25e (both on sales and adj. EBITDA), in line with the guidance (€ 12m sales in FY’25e).

In a broader picture, the macro environment seems to have improved. The second hand watch market has shown signs of recovery in H1’25, visible in an uptick in the WatchCharts Overall Market Index (Source: WatchCharts.com). Here, second hand market prices for a representative selection of 300 watches have reached their trough in early March 2025 and have recovered slightly since then. This stabilization of prices should be the consequence of a demand recovery and continuous supply scarcity on the first hand market. For the latter, the Federation of the Swiss Watch Industry (FH) reported a 5% decline in units in H1’25, also influenced by US-tariffs, which were offset by 6% higher ASPs, as gold prices increased respectively. Given that secondhand luxury watches are not affected by tariffs in the US’ secondhand market, the demand for secondhand watches has seen a strong uptick, which also affects European market prices respectively.

Against this backdrop, the positive developments in the market as well as operationally, lay the foundation for future growth. However, the shares remain priced for perfection, which is why we reiterate our HOLD recommendation with a PT of € 63.00, based on DCF.