Currency in EUR
Last close As at 09/06/2023
EUR4.35
▲ 0.02 (0.46%)
Market capitalisation
EUR480m
Research: Consumer
Borussia Dortmund’s Q222 results were affected by the imposition of new COVID-related restrictions towards the end of the period. Following the period end, the team was eliminated from the Europa League, having failed to qualify for the Champions League knockout stages before Christmas. Against this backdrop, the small downgrade in management guidance for FY22 profitability is testimony to the tight management of costs. The team is currently (comfortably) placed second in the Bundesliga so all will be looking forward to a more successful and profitable FY23. Our sum-of-the-parts valuation reduces to €11 per share.
Borussia Dortmund |
A brief revival before more restrictions |
Q222 results |
Travel & leisure |
5 April 2022 |
Share price performance
Business description
Next events
Analysts
Borussia Dortmund is a research client of Edison Investment Research Limited |
Borussia Dortmund’s Q222 results were affected by the imposition of new COVID-related restrictions towards the end of the period. Following the period end, the team was eliminated from the Europa League, having failed to qualify for the Champions League knockout stages before Christmas. Against this backdrop, the small downgrade in management guidance for FY22 profitability is testimony to the tight management of costs. The team is currently (comfortably) placed second in the Bundesliga so all will be looking forward to a more successful and profitable FY23. Our sum-of-the-parts valuation reduces to €11 per share.
Year end |
Revenue (€m) |
EBITDA (€m) |
PBT* |
EPS* |
DPS |
P/E |
EV/EBITDA |
06/20 |
370.2 |
63.0 |
45.6 |
0.47 |
0.00 |
8.7 |
7.0 |
06/21 |
334.2 |
39.0 |
24.3 |
0.26 |
0.00 |
15.5 |
11.4 |
06/22e |
350.4 |
81.5 |
65.8 |
0.57 |
0.00 |
7.1 |
5.4 |
06/23e |
389.0 |
106.5 |
91.5 |
0.76 |
0.00 |
5.3 |
4.2 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q222: More games and Omicron restrictions
Q222’s year-on-year revenue decline of 2% includes growth for Match Operations, Advertising & Catering, and declines for TV Marketing and Merchandising. There were more competitive games in Q221 with more fans in aggregate than Q220, albeit the number of fans in attendance at individual games in both periods was affected by COVID-related restrictions. Higher advertising from new sponsorships was further testimony to the increasing appeal of the brand. Following a significant transfer window (Q122) with the headline-making sale of Sancho, activity was more muted as is typical. The c 12% y-o-y decline in EBITDA to €32.0m is mainly attributable to higher other operating expenses (matchday staff, performance-related bonuses, advertising expense, etc).
FY22: Management guidance reduced modestly
Management reduced its guidance for FY22, to a net loss of €17–24m (prior guidance: net loss of €12–17m) implies a, H222 net loss of at least €54.5m, greater than H221’s €46.6m. The lower profit primarily reflects the absence of later-stage European competition revenue and continuing restrictions on fan attendance into Q322, with some offsetting operating cost savings including lower player contract amortisation. Our forecasts are reduced to bring them in line with management’s new guidance.
Valuation: Asset-backed valuation of €11/share
Our asset-backed sum-of-the-parts valuation, adjusting for recent changes in peer group share prices and the company’s updated H122 balance sheet following the equity raise in October 2021, reduces to €11 per share, a reduction of 5% since our last update of €11.56 per share. The EV/Sales multiple for FY22e of 1.3x is at a discount to the long-term average (2005–21) of 1.6x. We see good potential for upside to the share price in the absence of disruption to revenue generation from further potential COVID-related disruptions.
Exhibit 1: Financial summary
€m |
2019 |
2020 |
2021 |
2022e |
2023e |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
370.3 |
370.2 |
334.2 |
350.4 |
389.0 |
Cost of Sales |
(21.3) |
(22.4) |
(19.6) |
(20.6) |
(21.6) |
||
Gross Profit |
349.0 |
347.8 |
314.6 |
329.9 |
367.4 |
||
EBITDA |
|
|
116.0 |
63.0 |
39.0 |
81.5 |
106.5 |
Normalised operating profit |
|
|
103.2 |
49.1 |
25.3 |
67.7 |
92.5 |
Amortisation of acquired intangibles |
(65.9) |
(88.3) |
(92.6) |
(89.8) |
(97.3) |
||
Exceptionals |
(13.8) |
(3.9) |
(4.8) |
0.0 |
0.0 |
||
Reported operating profit |
23.5 |
(43.1) |
(72.1) |
(22.1) |
(4.8) |
||
Net Interest |
(1.7) |
(3.4) |
(1.1) |
(1.9) |
(1.0) |
||
Joint ventures & associates (post tax) |
0.0 |
(0.0) |
0.1 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
101.5 |
45.6 |
24.3 |
65.8 |
91.5 |
Profit Before Tax (reported) |
|
|
21.8 |
(46.6) |
(73.2) |
(24.0) |
(5.8) |
Reported tax |
(4.4) |
2.6 |
0.3 |
0.0 |
0.0 |
||
Profit After Tax (norm) |
80.9 |
43.0 |
24.2 |
60.5 |
84.2 |
||
Profit After Tax (reported) |
17.4 |
(44.0) |
(72.8) |
(24.0) |
(5.8) |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
80.9 |
43.0 |
24.2 |
60.5 |
84.2 |
||
Net income (reported) |
17.4 |
(44.0) |
(72.8) |
(24.0) |
(5.8) |
||
Average number of shares outstanding (m) |
92.0 |
92.0 |
92.0 |
105.4 |
110.4 |
||
EPS - normalised (c) |
|
|
87.9 |
46.8 |
26.3 |
57.4 |
76.2 |
EPS - diluted normalised (€) |
|
|
0.88 |
0.47 |
0.26 |
0.57 |
0.76 |
EPS - basic reported (€) |
|
|
0.19 |
(0.48) |
(0.79) |
(0.23) |
(0.05) |
Dividend (€) |
0.06 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
18.2 |
(0.0) |
(9.7) |
4.9 |
11.0 |
||
Gross Margin (%) |
94.3 |
94.0 |
94.1 |
94.1 |
94.4 |
||
EBITDA Margin (%) |
31.3 |
17.0 |
11.7 |
23.3 |
27.4 |
||
Normalised Operating Margin |
27.9 |
13.2 |
7.6 |
19.3 |
23.8 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
371.7 |
441.5 |
389.8 |
355.6 |
313.5 |
Intangible Assets |
163.7 |
229.7 |
193.4 |
167.0 |
133.0 |
||
Tangible Assets |
184.0 |
193.0 |
183.5 |
175.7 |
167.7 |
||
Investments & other |
24.0 |
18.8 |
12.9 |
12.9 |
12.9 |
||
Current Assets |
|
|
128.4 |
76.5 |
60.7 |
78.8 |
115.9 |
Stocks |
4.6 |
6.8 |
6.8 |
10.5 |
11.2 |
||
Debtors |
30.1 |
36.5 |
29.9 |
31.4 |
34.8 |
||
Cash & cash equivalents |
55.9 |
3.3 |
1.7 |
14.7 |
47.6 |
||
Other |
37.9 |
29.9 |
22.2 |
22.2 |
22.2 |
||
Current Liabilities |
|
|
(125.4) |
(122.6) |
(163.6) |
(88.5) |
(89.5) |
Creditors |
(119.8) |
(110.2) |
(100.1) |
(84.1) |
(85.0) |
||
Tax and social security |
(0.8) |
(0.0) |
(0.0) |
(0.0) |
(0.0) |
||
Short term borrowings |
0.0 |
(8.0) |
(56.9) |
0.0 |
0.0 |
||
Finance leases |
(3.1) |
(4.4) |
(4.2) |
(2.1) |
(2.1) |
||
Other |
(1.7) |
0.0 |
(2.3) |
(2.3) |
(2.3) |
||
Long Term Liabilities |
|
|
(19.8) |
(89.9) |
(54.3) |
(54.3) |
(54.3) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Finance leases |
(8.4) |
(20.1) |
(16.8) |
(16.8) |
(16.8) |
||
Other long-term liabilities |
(11.4) |
(69.9) |
(37.5) |
(37.5) |
(37.5) |
||
Net Assets |
|
|
354.9 |
305.4 |
232.6 |
291.6 |
285.7 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
354.9 |
305.4 |
232.6 |
291.6 |
285.7 |
CASH FLOW |
|||||||
Op Cash Flow before WC and tax |
111.9 |
59.5 |
37.9 |
79.6 |
105.5 |
||
Working capital |
5.7 |
(18.0) |
(6.9) |
(21.2) |
(3.3) |
||
Exceptional & other |
(84.6) |
(38.9) |
(13.6) |
(58.1) |
(59.0) |
||
Tax |
(2.8) |
0.3 |
0.0 |
0.0 |
0.0 |
||
Operating cash flow |
|
|
30.2 |
3.0 |
17.4 |
0.3 |
43.3 |
Capex |
(9.9) |
(6.1) |
(3.4) |
(6.0) |
(6.0) |
||
Net investment in intangibles |
(13.6) |
(44.6) |
(58.6) |
(3.3) |
(3.3) |
||
Acquisitions/disposals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net interest |
(1.5) |
(3.3) |
(1.4) |
(1.9) |
(1.0) |
||
Equity financing |
0.0 |
0.0 |
0.0 |
82.9 |
0.0 |
||
Dividends |
(5.5) |
(5.5) |
0.0 |
0.0 |
0.0 |
||
Other |
(3.3) |
(3.9) |
52.5 |
(59.0) |
0.0 |
||
Net Cash Flow |
(3.6) |
(60.6) |
6.4 |
13.0 |
32.9 |
||
Opening net debt/(cash) |
|
|
(50.8) |
(44.4) |
29.1 |
76.2 |
6.4 |
Other non-cash movements |
(2.8) |
(12.9) |
(53.6) |
56.9 |
0.0 |
||
Closing net debt/(cash) |
|
|
(44.4) |
29.1 |
76.2 |
6.4 |
(26.6) |
Source: Borussia Dortmund, Edison Investment Research
|
|
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