Last close As at 05/08/2026
EUR3.07
▲ 0.03 (0.99%)
Market capitalisation
EUR339m
Research: Consumer
While arguably riding its luck of late, Borussia Dortmund (BVB) is well-placed to exploit immediate Bundesliga and Europa League opportunities. However, there is minimal room for error in terms of prized Champions League qualification, the driver of our forecast improvement in FY19 operational profit (in Bundesliga just four points separate the second place from sixth and BVB is ranked only fourth since the winter break). To its credit, BVB’s Q2 financial performance was much more assured than on the field, with steady revenue and slightly lower EBITDA without the buttress of transfers. The rise in our current-year forecast is due wholly to January transfers (notably Aubameyang), further proof of Dortmund’s ability to generate substantial hidden reserves.
Borussia Dortmund |
Finding its feet |
Half-year results |
Travel & leisure |
6 March 2018 |
Share price performance
Business description
Next events
Analysts
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While arguably riding its luck of late, Borussia Dortmund (BVB) is well-placed to exploit immediate Bundesliga and Europa League opportunities. However, there is minimal room for error in terms of prized Champions League qualification, the driver of our forecast improvement in FY19 operational profit (in Bundesliga just four points separate the second place from sixth and BVB is ranked only fourth since the winter break). To its credit, BVB’s Q2 financial performance was much more assured than on the field, with steady revenue and slightly lower EBITDA without the buttress of transfers. The rise in our current-year forecast is due wholly to January transfers (notably Aubameyang), further proof of Dortmund’s ability to generate substantial hidden reserves.
Year end |
Revenue* (€m) |
EBITDA |
PBT** |
EPS** |
DPS |
EV/EBITDA |
06/16 |
281.3 |
86.7 |
73.8 |
0.68 |
0.06 |
5.6 |
06/17 |
328.4 |
74.1 |
61.1 |
0.56 |
0.06 |
6.6 |
06/18e |
331.0 |
135.0 |
120.0 |
1.11 |
0.06 |
3.5 |
06/19e |
375.0 |
85.0 |
71.0 |
0.66 |
0.06 |
5.3 |
Note: *Before player transfer income. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q2: A different kind of quarter
The three months to December saw a similar y-o-y fixture pattern but contrasting outcomes ie no Bundesliga wins until new coach Stöger joined late in the period and an equally poor Champions League (just two points against top of group table last time). This led to much lower (c 40%) broadcasting income from European competition, albeit fortuitously redeemed by the initial benefit of the new deal on domestic TV marketing. While advertising remained encouraging (up 7%), marked by new Champion Partners Opel and bwin, there was a further decline in merchandising (down 24%), which is common across the league. The shortfall in EBITDA (c €7m, relatively minor in full-year context) on flat revenue was due mainly to wage pressure, compounded by one-off severance costs related to the previous coach’s set-up.
Transfer gains fuel FY18 upgrade
Despite such quarterly volatility, we retain our operational assumptions for this year and next. The changes to our forecasts, detailed on page 2, relate predominantly to player transfers. The €37m EBITDA upgrade for the current period reflects January transfers (Aubameyang and Bartra) with no allowance for end of season dealings. We are now a little more cautious about transfers in FY19, given Aubameyang’s exit so soon after Dembélé. However, management has recently stated a need to adjust the squad, even if this would be subject to the vagaries of the new coach.
Valuation: Understandable caution
The contrast in reaction to the sale of Aubameyang with that of Dembélé (share price up c 40%) is telling, with evident concern about conflicting sporting and financial interests. This may persist in the face of unconvincing performances on the field, uncertainty about a long-term coach as well as main goal-scorer and growing financial reliance on transfer activity, however good the record.
Revenue and profit analysis
Exhibit 1: Revenue and profit analysis
Year end June (€m) |
Q117 |
Q217 |
H217 |
FY17 |
Q118 |
Q218 |
H218e |
FY18e |
FY19e |
▲ |
▲ |
▲▲ |
|||||||
Home matches: |
|
||||||||
Bundesliga |
3 |
5 |
12 |
17 |
3 |
5 |
9 |
17 |
17 |
Champions League |
1 |
2 |
2 |
5 |
1 |
2 |
- |
3 |
4 |
Europa League |
- |
- |
- |
- |
- |
- |
2 |
2 |
- |
DFB Cup |
- |
1 |
1 |
2 |
- |
- |
- |
- |
2 |
SuperCup |
1 |
- |
- |
1 |
1 |
- |
- |
1 |
- |
Away matches: |
|||||||||
Champions League |
1 |
2 |
2 |
5 |
1 |
2 |
- |
3 |
4 |
Europa League |
- |
- |
- |
- |
- |
- |
2 |
2 |
- |
DFB Cup |
1 |
- |
2+final |
3+final |
1 |
2 |
- |
3 |
3 |
Revenue |
|||||||||
Match operations: |
|||||||||
Bundesliga |
4.7e |
8.2e |
14.1e |
27.0 |
4.8e |
8.3e |
13.9e |
27.0 |
27.5 |
Champions League |
1.9e |
3.8e |
3.8e |
9.5 |
2.0e |
3.9e |
- |
5.9 |
8.0 |
Europa League |
- |
- |
- |
- |
- |
- |
4.0e |
4.0 |
- |
Domestic cups |
1.1e |
1.0e |
3.2e |
5.3 |
1.2e |
0.5e |
0.1e |
1.8 |
3.5 |
Other |
0.8e |
0.8e |
0.6e |
2.2 |
2.6e |
0.5e |
1.2e |
4.3 |
2.5 |
Total |
8.5 |
13.8 |
21.6 |
43.9 |
10.6 |
13.2 |
19.2 |
43.0 |
41.5 |
Broadcasting: |
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Bundesliga |
16.2 |
16.3 |
33.6 |
66.1 |
21.6 |
21.8 |
44.6 |
88.0 |
92.0 |
Champions League |
19.6 |
14.0 |
16.5 |
50.1 |
18.9 |
8.5 |
- |
27.4 |
68.0 |
Europa League |
0.9 |
- |
- |
0.9 |
- |
- |
4.0 |
4.0 |
- |
Domestic cups |
1.6 |
(0.3) |
7.3 |
8.6 |
1.8 |
1.5 |
0.3 |
3.6 |
4.5 |
Total |
38.3 |
30.0 |
57.5 |
125.8 |
42.3 |
31.8 |
48.9 |
123.0 |
164.5 |
Advertising |
17.8 |
22.3 |
47.3 |
87.4 |
21.3 |
23.9 |
50.8 |
96.0 |
99.0 |
Merchandising |
9.2 |
14.0 |
16.3 |
39.5 |
8.7 |
10.7 |
17.6 |
37.0 |
37.0 |
Catering / other |
7.8 |
7.4 |
16.7 |
31.9 |
5.8 |
7.2 |
19.0 |
32.0 |
33.0 |
Revenue before transfers |
81.6 |
87.4 |
159.4 |
328.4 |
88.7 |
87.0 |
155.3 |
331.0 |
375.0 |
Transfers |
45.2* |
- |
32.1 |
77.3 |
136.2** |
- |
73.8** |
210.0** |
75.0*** |
Total revenue |
126.8 |
87.4 |
191.5 |
405.7 |
224.8 |
87.0 |
229.1 |
541.0 |
450.0 |
Other operating income |
1.0 |
0.7 |
2.5 |
4.2 |
0.5 |
2.3 |
2.2 |
5.0 |
5.0 |
Labour costs |
(38.4) |
(43.8) |
(95.7) |
(177.9) |
(43.9) |
(50.4) |
(100.7) |
(195.0) |
(205.0) |
Share of revenue before transfers |
47% |
50% |
60% |
54% |
49% |
58% |
65% |
59% |
55% |
Material costs |
(5.8) |
(8.6) |
(11.5) |
(25.9) |
(5.6) |
(6.7) |
(11.7) |
(24.0) |
(24.0) |
Other operating costs |
(43.4) |
(25.9) |
(62.7) |
(132.0) |
(94.4) |
(29.8) |
(67.8) |
(192.0) |
(141.0) |
EBITDA |
40.1 |
9.8 |
24.2 |
74.1 |
81.4 |
2.5 |
51.1 |
135.0 |
85.0 |
Source: Edison Investment Research. Note: ▲ Assuming exit in Europa League round of 16. ▲▲ Assuming Champions League round of 16 and DFB Cup semi-final. *Including disposal of Mkhitaryan. **Including disposals of Dembélé, Bender, Mor, Bartra and Aubameyang. ***Notional (assumed average of transfer revenue of three previous years excluding “exceptional” Dembélé and Aubameyang transactions).
Exhibit 2: Financial summary
€'000s |
2016 |
2017 |
2018e |
2019e |
||
Year end June |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||
Revenue |
|
|
376,300 |
405,700 |
541,000 |
450,000 |
EBITDA |
|
|
86,700 |
74,100 |
135,000 |
85,000 |
Operating Profit (before amort. and except.) |
75,900 |
62,600 |
123,000 |
73,000 |
||
Intangible Amortisation |
(32,000) |
(51,900) |
(64,000) |
(60,000) |
||
Exceptionals |
(7,500) |
(100) |
(1,100) |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Operating Profit |
36,400 |
10,600 |
57,900 |
13,000 |
||
Net Interest |
(2,100) |
(1,500) |
(3,000) |
(2,000) |
||
Other financial items |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
73,800 |
61,100 |
120,000 |
71,000 |
Profit Before Tax (FRS 3) |
|
|
34,300 |
9,100 |
54,900 |
11,000 |
Tax |
(4,900) |
(900) |
(7,000) |
(1,000) |
||
Profit After Tax (norm) |
62,700 |
51,900 |
102,000 |
60,400 |
||
Profit After Tax (FRS 3) |
29,400 |
8,200 |
47,900 |
10,000 |
||
Minority interests |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
62,700 |
51,900 |
102,000 |
60,400 |
||
Profit after tax (FRS3) |
29,400 |
8,200 |
47,900 |
10,000 |
||
Average Number of Shares Outstanding (m) |
92.0 |
92.0 |
92.0 |
92.0 |
||
EPS - normalised (c) |
|
|
68.2 |
56.4 |
110.9 |
65.7 |
EPS - (IFRS) (c) |
|
|
32.0 |
8.9 |
52.1 |
10.9 |
Dividend per share (c) |
6.0 |
6.0 |
6.0 |
6.0 |
||
EBITDA Margin (%) |
23.0 |
18.3 |
25.0 |
18.9 |
||
Operating Margin (before GW and except.) (%) |
20.2 |
15.4 |
22.7 |
16.2 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
302,800 |
354,900 |
364,000 |
348,000 |
Intangible Assets |
65,300 |
141,500 |
147,000 |
140,000 |
||
Tangible Assets |
188,400 |
184,700 |
182,000 |
180,000 |
||
Investments |
49,100 |
28,700 |
35,000 |
28,000 |
||
Current Assets |
|
|
121,800 |
123,700 |
149,000 |
166,000 |
Stocks |
10,200 |
9,000 |
10,000 |
10,000 |
||
Debtors |
51,100 |
48,800 |
50,000 |
50,000 |
||
Cash |
51,700 |
49,300 |
59,000 |
76,000 |
||
Other |
8,800 |
16,600 |
30,000 |
30,000 |
||
Current Liabilities |
|
|
(78,800) |
(140,900) |
(140,000) |
(138,000) |
Creditors |
(76,200) |
(130,600) |
(137,000) |
(135,000) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Finance leases |
(2,600) |
(10,300) |
(3,000) |
(3,000) |
||
Long Term Liabilities |
|
|
(36,200) |
(25,400) |
(18,000) |
(18,000) |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Finance leases |
(19,000) |
(8,700) |
(8,000) |
(8,000) |
||
Other long term liabilities |
(17,200) |
(16,700) |
(10,000) |
(10,000) |
||
Net Assets |
|
|
309,600 |
312,300 |
355,000 |
358,000 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
44,400 |
12,200 |
1,000 |
30,000 |
Net Interest |
(1,400) |
(2,000) |
(2,800) |
(2,200) |
||
Tax |
(300) |
(5,500) |
(6,000) |
(6,000) |
||
Capex |
(9,400) |
(8,100) |
(9,000) |
(9,300) |
||
Acquisitions/disposals |
(20,500) |
9,100 |
40,000 |
10,000 |
||
Financing |
(7,700) |
0 |
0 |
0 |
||
Dividends |
(4,600) |
(5,500) |
(5,500) |
(5,500) |
||
Net Cash Flow |
500 |
200 |
17,700 |
17,000 |
||
Opening net debt/(cash) |
|
|
(29,600) |
(30,100) |
(30,300) |
(48,000) |
Finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(30,100) |
(30,300) |
(48,000) |
(65,000) |
Source: Borussia Dortmund accounts, Edison Investment Research
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FY17 results clearly demonstrate that Coats Group’s industrial operations have good momentum and a transformation plan is to enhance this further over the next couple of years. Group earnings and free cash generation were both up by double-digit percentages in FY17. While partly anticipated in the current rating, we believe that Coats is focusing on faster-growing segments and, having clarified group pension requirements, has the financial capacity to achieve this in a number of ways.