Borussia Dortmund

DE: BVB

Market Cap€428m

Last Close €3.88

The group operates Borussia Dortmund, a leading football club, placed third in the Bundesliga in 2020/21, DFB Super Cup winners in 2019/20, and DFB-Pokal winners in 2020/21. The club has qualified for the Champions League in nine of the last 10 seasons.

Investment summary

Borussia Dortmund’s football season finished on 14 May 2022 with another (comfortable) second place in the Bundesliga confirming qualification for the Champions League in the 2022/23 season. Management’s reiterated guidance for FY22, a net loss of €17–24m, represents a robust performance given the restrictions on fan attendance for the majority of the year and a less successful season in European competitions than is typical. The company is well-placed to deliver an improved financial performance in FY22/23 if further COVID-19 related restrictions can be avoided. Our valuation of €9.8/share suggests significant upside in a normalised operating environment.

Y/E Jun	Revenue (€m)	EBITDA (€m)	PBT (€m)	EPS (fd) (c)	P/E (x)	P/CF (x)
2020A	370.2	63.0	45.6	46.77	8.3	6.0
2021A	334.2	39.0	24.3	26.28	14.8	9.4
2022E	350.4	81.5	65.8	57.43	6.8	5.1
2023E	389.0	106.5	91.5	76.23	5.1	4.1

Industry outlook

Unsustainable spend on wages and transfers is increasingly being penalised by UEFA Financial Fair Play requirements. A ‘break-even requirement’ obliges clubs to spend no more than they generate over a rolling three-year period. Sanctions vary from a warning to a ban from UEFA competition, fines and a cap on wages and squad size.

Last updated on 23/05/2022