Last close As at 05/08/2026
EUR3.07
— 0.00 (0.00%)
Market capitalisation
EUR22m
Research: Consumer
After years of uncertainty, all 16 German states have agreed in principle that the July 2021 Gambling Treaty will include a unified approach to allowing e-gaming (casino and poker). This follows recent news that e gaming was to be banned altogether. This new development is clearly a very positive step forward for the industry. The announcement is particularly important for bet-at-home (BAH), which derives c 20% of net gaming revenues (NGR) from German e-gaming. We will update our estimates at FY19 results in March, when we expect further clarity.
Written by
bet-at-home |
German regulation looks positive (at last) |
German regulation |
Travel & leisure |
23 January 2020 |
Share price performance
Business description
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Analysts
bet-at-home is a research client of Edison Investment Research Limited |
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After years of uncertainty, all 16 German states have agreed in principle that the July 2021 Gambling Treaty will include a unified approach to allowing e-gaming (casino and poker). This follows recent news that egaming was to be banned altogether. This new development is clearly a very positive step forward for the industry. The announcement is particularly important for bet-at-home (BAH), which derives c 20% of net gaming revenues (NGR) from German e-gaming. We will update our estimates at FY19 results in March, when we expect further clarity.
Year end |
Revenue (GGR**) (€m) |
EBITDA |
EPS* |
DPS |
P/E |
Yield |
12/17 |
145.4 |
36.4 |
4.81 |
7.50 |
11.5 |
13.5 |
12/18 |
143.4 |
36.2 |
4.65 |
6.50 |
11.9 |
11.7 |
12/19e |
142.9 |
32.9 |
3.31 |
4.00 |
16.7 |
7.2 |
12/20e |
143.1 |
33.1 |
3.37 |
4.00 |
16.4 |
7.2 |
Note: *EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **GGR are gross gaming revenues
Moving towards e-gaming regulation in 2021
To date, gaming regulation in Germany has been very confusing, with a high level of disagreement. As recently as December 2019, the interior minister of Hesse (the state in charge of licensing) indicated that online gaming would be prohibited as part of fulfilling the temporary betting licence obligations. Somewhat to the contrary, this new announcement has confirmed that all 16 states have agreed in principle that the permanent regime (from 1st July 2021) would include egaming (casino and poker), not just betting as originally envisaged. This is clearly a hugely positive step forward for the e-gaming industry, although there are still doubts over the legality of e-gaming in the interim period (from January 2020 to June 2021).
Germany is BAH’s largest market
Germany is BAH’s largest market, comprising 35% of total wagers. We estimate that c 20% of BAH’s net gaming revenues are derived from German e-gaming and therefore the ability to operate with legal certainty throughout Germany would be a huge positive for the company. We note that German e-gaming is subject to 19% VAT and we expect this rate to be reviewed in due course. In comparison, sports betting (c 10% of BAH’s NGR) is taxed at 5% of turnover, which is equivalent to c 45% tax on gross gaming revenue. We expect further clarity at FY19 results and will update our figures at that point.
Valuation: 7.2% dividend yield
BAH trades at 10.7x EV/EBITDA and 16.4x P/E for FY20e, which is towards the top end of the peer group, but its net cash position remains healthy (despite the recently increased tax) and 7.2% prospective dividend yield are very attractive. Uncertainty surrounding German e-gaming has weighed on sentiment and this development is very positive for the company.
Exhibit 1: Financial summary
€'m |
2014 |
2015 |
2016 |
2017 |
2018 |
2019e |
2020e |
2021e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||||
Revenue (GGR) |
|
|
107.0 |
121.6 |
138.7 |
145.4 |
143.4 |
142.9 |
143.1 |
146.0 |
Cost of Sales |
(12.3) |
(21.3) |
(25.8) |
(27.6) |
(28.2) |
(25.8) |
(26.7) |
(27.3) |
||
Net Gaming Revenue |
94.7 |
100.3 |
112.9 |
117.8 |
115.1 |
117.1 |
116.4 |
118.7 |
||
EBITDA |
|
|
26.8 |
31.6 |
33.0 |
36.4 |
36.2 |
32.9 |
33.1 |
34.5 |
Normalised operating profit |
|
|
25.9 |
30.7 |
31.9 |
35.1 |
34.9 |
31.1 |
31.1 |
32.5 |
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
(0.1) |
0.1 |
0.0 |
(0.9) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
25.8 |
30.8 |
31.9 |
34.1 |
34.9 |
31.1 |
31.1 |
32.5 |
||
Net Interest |
1.7 |
2.2 |
2.2 |
1.5 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
27.5 |
32.9 |
34.1 |
36.6 |
35.0 |
31.1 |
31.1 |
32.5 |
Profit Before Tax (reported) |
|
|
27.5 |
32.9 |
34.1 |
35.7 |
35.0 |
31.1 |
31.1 |
32.5 |
Reported tax |
(1.8) |
(2.3) |
(3.1) |
(2.8) |
(2.4) |
(19.7) |
(7.5) |
(7.8) |
||
Profit After Tax (norm) |
25.7 |
30.6 |
31.0 |
33.8 |
32.6 |
23.2 |
23.7 |
24.7 |
||
Profit After Tax (reported) |
25.6 |
30.7 |
31.0 |
32.8 |
32.6 |
11.3 |
23.7 |
24.7 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
25.7 |
30.6 |
31.0 |
33.8 |
32.6 |
23.2 |
23.7 |
24.7 |
||
Net income (reported) |
25.6 |
30.7 |
31.0 |
32.8 |
32.6 |
11.3 |
23.7 |
24.7 |
||
Basic average number of shares outstanding (m) |
7.0 |
7.0 |
7.0 |
7.0 |
7.0 |
7.0 |
7.0 |
7.0 |
||
EPS - basic normalised (€) |
|
|
3.66 |
4.36 |
4.42 |
4.81 |
4.65 |
3.31 |
3.37 |
3.52 |
EPS - diluted normalised (€) |
|
|
3.66 |
4.36 |
4.42 |
4.81 |
4.65 |
3.31 |
3.37 |
3.52 |
EPS - basic reported (€) |
|
|
3.65 |
4.37 |
4.42 |
4.68 |
4.65 |
1.62 |
3.37 |
3.52 |
Dividend (€) |
0.60 |
2.25 |
7.50 |
7.50 |
6.50 |
4.00 |
4.00 |
4.00 |
||
Revenue growth (%) |
25.0 |
13.6 |
14.0 |
4.8 |
(1.4) |
(0.3) |
0.2 |
2.0 |
||
Gross Margin (%) |
88.5 |
82.5 |
81.4 |
81.0 |
80.3 |
82.0 |
81.3 |
81.3 |
||
EBITDA Margin (%) |
25.0 |
26.0 |
23.8 |
25.0 |
25.3 |
23.0 |
23.1 |
23.6 |
||
Normalised Operating Margin |
24.2 |
25.2 |
23.0 |
24.1 |
24.4 |
21.7 |
21.7 |
22.2 |
||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
4.5 |
4.8 |
4.9 |
4.0 |
3.4 |
7.1 |
6.1 |
5.1 |
Intangible Assets |
2.4 |
2.2 |
2.0 |
2.0 |
2.0 |
2.1 |
2.3 |
2.5 |
||
Tangible Assets |
2.1 |
2.6 |
2.9 |
2.0 |
1.4 |
5.0 |
3.8 |
2.6 |
||
Investments & other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Current Assets |
|
|
89.9 |
123.3 |
140.5 |
120.6 |
99.9 |
68.8 |
66.4 |
65.0 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
57.9 |
70.7 |
47.9 |
16.9 |
20.1 |
22.0 |
25.0 |
28.0 |
||
Cash & cash equivalents |
21.8 |
40.7 |
82.3 |
94.4 |
70.6 |
36.3 |
30.9 |
26.5 |
||
Customer cash |
9.7 |
9.4 |
9.5 |
7.5 |
7.7 |
8.0 |
8.0 |
8.0 |
||
Other |
0.5 |
2.5 |
0.7 |
1.8 |
1.5 |
2.5 |
2.5 |
2.5 |
||
Current Liabilities |
|
|
(27.0) |
(32.7) |
(35.7) |
(35.3) |
(34.0) |
(33.4) |
(34.4) |
(35.4) |
Creditors |
(1.3) |
(1.0) |
(0.5) |
(1.8) |
(3.3) |
(4.3) |
(5.3) |
(6.3) |
||
Short term provisions/ tax liabilities |
(14.1) |
(19.9) |
(21.4) |
(22.6) |
(19.2) |
(17.1) |
(17.1) |
(17.1) |
||
Short term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(11.5) |
(11.8) |
(13.9) |
(10.9) |
(11.5) |
(12.0) |
(12.0) |
(12.0) |
||
Long Term Liabilities |
|
|
(0.1) |
(0.0) |
(0.1) |
(0.0) |
(0.0) |
(4.0) |
(4.0) |
(4.0) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other long term liabilities |
(0.1) |
(0.0) |
(0.1) |
(0.0) |
(0.0) |
(4.0) |
(4.0) |
(4.0) |
||
Net Assets |
|
|
67.5 |
95.3 |
109.6 |
89.3 |
69.3 |
38.5 |
34.1 |
30.7 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
67.5 |
95.3 |
109.6 |
89.3 |
69.3 |
38.5 |
34.1 |
30.7 |
CASH FLOW |
||||||||||
Op Cash Flow before WC and tax |
26.8 |
31.6 |
33.0 |
36.4 |
36.2 |
32.9 |
33.1 |
34.5 |
||
Working capital |
(4.4) |
(3.6) |
(0.1) |
(2.4) |
(6.5) |
(0.9) |
(2.0) |
(2.0) |
||
Exceptional & other |
5.8 |
5.9 |
0.4 |
(0.4) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Tax |
(1.8) |
(2.3) |
(3.1) |
(2.8) |
(5.0) |
(19.7) |
(7.5) |
(7.8) |
||
Net operating cash flow |
|
|
26.4 |
31.7 |
30.2 |
30.8 |
24.8 |
12.3 |
23.7 |
24.7 |
Capex |
0.0 |
0.0 |
0.0 |
0.0 |
(0.7) |
(1.0) |
(1.0) |
(1.0) |
||
Acquisitions/disposals |
(2.4) |
(1.1) |
(1.3) |
(0.5) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net interest |
2.2 |
2.2 |
0.3 |
1.5 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Equity financing |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Dividends |
(2.8) |
(4.2) |
(15.8) |
(52.6) |
(52.6) |
(45.6) |
(28.1) |
(28.1) |
||
Other |
(15.0) |
(9.6) |
28.2 |
33.0 |
4.7 |
0.0 |
0.0 |
0.0 |
||
Net Cash Flow |
8.4 |
19.0 |
41.6 |
12.1 |
(23.8) |
(34.3) |
(5.4) |
(4.4) |
||
Opening net debt/(cash) |
|
|
(13.4) |
(21.8) |
(40.7) |
(82.3) |
(94.4) |
(70.6) |
(36.3) |
(30.9) |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(21.8) |
(40.7) |
(82.3) |
(94.4) |
(70.6) |
(36.3) |
(30.9) |
(26.5) |
Source: BAH accounts, Edison Investment Research
|
|
Research: TMT
EMIS’s FY19 trading update was reassuringly straightforward. H219 revenue and profit growth was similar to the rate in H119, which is within the company’s target for mid- to high single-digit growth. Both divisions made steady progress, with EMIS-X development ongoing and restructuring complete. We maintain our forecasts; FY19 results are due on 18 March.