Last close As at 05/08/2026
EUR3.07
▲ 0.03 (0.99%)
Market capitalisation
EUR339m
Research: Consumer
The 2019/20 season was typically successful from a sporting perspective, which reaffirmed Borussia Dortmund’s position as one of the leading football teams in Germany and Europe. The coming year is likely to be more challenging financially due to the operating restrictions necessitated by COVID-19, but the company is well placed to deliver a strong recovery in earnings if restrictions ease, albeit visibility on these is limited. The valuation reflects the uncertain outlook as it is trading at a significant discount to our sum-of the-parts valuation, broadly in line with historic sales multiples, and at a discount to its peers.
Borussia Dortmund |
Leading global football brand
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Travel & leisure |
Deutsches Eigenkapitalforum 2020
15 October 2020 |
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Borussia Dortmund is a client of Edison Investment Research Limited |
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The 2019/20 season was typically successful from a sporting perspective, which reaffirmed Borussia Dortmund’s position as one of the leading football teams in Germany and Europe. The coming year is likely to be more challenging financially due to the operating restrictions necessitated by COVID-19, but the company is well placed to deliver a strong recovery in earnings if restrictions ease, albeit visibility on these is limited. The valuation reflects the uncertain outlook as it is trading at a significant discount to our sum-of the-parts valuation, broadly in line with historic sales multiples, and at a discount to its peers.
Sustainable investment drives performance
Borussia Dortmund has demonstrated relatively consistent on-pitch performance over the long term, which has positioned it as one of the leading football clubs in Europe. In ‘normal’ times, this enabled it to generate strong revenue growth, improve profitability and gain a secure financial position as investment in the squad was made in a responsible way in a competitive market. Despite near-term earnings uncertainty due to the outbreak of COVID-19, the company has strong structural growth drivers of increasing domestic and global interest, which should enable it to monetise the brand globally.
FY21: Cautious outlook due to COVID-19
For the coming year, management estimates the restrictions required to counter COVID-19 will lead to a 5% decline in revenue which, coupled with other effects, such as lower transfer activity and high operational gearing, will translate into a reported operating loss with the inclusion of amortisation of intangibles. Our forecasts assume no significant improvement in the operating environment through FY21 and FY22, providing good scope for upgrades if and when operating restrictions end.
Valuation: Well supported by asset backing
The share price has been weak since the outbreak of COVID-19. Our asset-backed valuation of €13.03, which takes into account the unrealised value in the playing squad and brand, points to significant upside for the share price. The share price is attributing a lower value to the brand and the playing squad, which likely reflects the uncertain outlook for revenue and profitability given the high level of operational leverage. The EV/sales multiple of 1.4x is in line with its long-run average, but at a significant discount to its peers.
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Edison estimates
Source: Edison Investment Research |
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Research: TMT
Esker reported revenue growth of 7% y-o-y for Q320 and 8% for 9M20. The volume processed through its platform returned to close to pre-COVID levels by September. As companies look to Esker’s technology to support their digital transformation projects, orders for 9M20 grew 11% y-o-y. While management guidance for FY20 is maintained on a constant currency basis, we reduce our revenue forecasts for FY20/21 by 1% to reflect the recent strengthening of the euro, resulting in small EPS reductions.