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Research: Consumer
Borussia Dortmund’s Q324 results demonstrated some phasing but it has made good progress year-to-date. The focus of attention now is the team’s progress to the Champions League final for the first time since 2013, having beaten more-favoured (by the bookmakers) and higher-funded teams along the way. Despite being less successful than usual in the Bundesliga, the club will take part in the Champions League next season as well as the revamped FIFA Club World Cup in the summer of 2025, which are all helpful in increasing the club’s global exposure and appeal.
Borussia Dortmund |
London calling |
Q324 results |
Travel and leisure |
21 May 2024 |
Share price performance
Business description
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Analysts
Borussia Dortmund is a research client of Edison Investment Research Limited |
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Borussia Dortmund’s Q324 results demonstrated some phasing but it has made good progress year-to-date. The focus of attention now is the team’s progress to the Champions League final for the first time since 2013, having beaten more-favoured (by the bookmakers) and higher-funded teams along the way. Despite being less successful than usual in the Bundesliga, the club will take part in the Champions League next season as well as the revamped FIFA Club World Cup in the summer of 2025, which are all helpful in increasing the club’s global exposure and appeal.
Year end |
Revenue (€m) |
EBITDA (€m |
PBT* |
EPS* |
DPS |
EV/EBITDA (x) |
P/E |
Yield |
06/22 |
351.6 |
83.8 |
66.3 |
0.61 |
0.00 |
5.7 |
6.7 |
N/A |
06/23 |
418.2 |
123.2 |
104.1 |
0.63 |
0.00 |
3.8 |
6.5 |
N/A |
06/24e |
482.2 |
137.7 |
127.5 |
0.78 |
0.06 |
3.4 |
5.3 |
1.5 |
06/25e |
456.8 |
121.3 |
111.5 |
0.68 |
0.06 |
3.9 |
6.1 |
1.5 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Fewer games in Q324
Borussia Dortmund’s Q324 revenue fell by c 3% y-o-y to €98.2m and EBITDA moved to a loss of €1.8m from a positive €8.1m in the comparative period. The main reason for the decline was one less home game played versus Q323, which naturally affects all match-day related revenues such as ticket sales and catering. Outside of these revenue streams there were good increases in Advertising (+4%) and TV Marketing (+8%), the latter boosted by the team’s relative success in the Champions League (see below). For the cumulative nine months (9M24), revenue and EBITDA increased by 10% to €354.7m and by c 9% to €119.8m, respectively, helped primarily by more home games (18) than in 9M23 (16) as well as the progress in the Champions League.
Reached Champions League final, another upgrade
Ahead of the Q324 results announcement, the first team qualified for the Champions League final versus Real Madrid CF to be played on 1 June 2024. The final will be played in London. This brought a further upgrade to management’s guidance for FY24 following upgrades in March 2024 and April 2024 as the team has progressed through the competition. The new net income guidance of €40–50m is €7m higher than the prior €33–43m, and significantly higher than €15–25m from the start of the financial year. We have upgraded our FY24 estimate by a similar amount and believe success in the final would not have a significant positive effect on profit for the year. We have yet to include any financial benefit from the first team playing in the FIFA Club World Cup in our FY25 estimates.
Valuation: Significant discount to peers
Our asset-backed sum-of-the-parts valuation is unchanged at €10.4 per share adjusting for the Q324 results and changes in the valuations of the peer group and squad valuations (source: Transfermarkt.com). The prospective EV/sales multiple of 1.0x for FY24 remains at a significant discount to its main quoted European football peers, which trade in a range of 2.8–4.0x.
Exhibit 1: Financial summary
€m |
2022 |
2023 |
2024e |
2025e |
||
Year end 30 June |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
351.6 |
418.2 |
482.2 |
456.8 |
Cost of Sales |
(22.6) |
(24.1) |
(24.3) |
(25.1) |
||
Gross Profit |
329.0 |
394.1 |
458.0 |
431.6 |
||
EBITDA |
|
|
83.8 |
123.2 |
137.7 |
121.3 |
Operating profit (before amort. and excepts.) |
|
70.5 |
110.3 |
124.1 |
107.3 |
|
Amortisation of acquired intangibles |
(87.4) |
(89.7) |
(83.8) |
(83.8) |
||
Exceptionals |
(9.1) |
(3.6) |
0.0 |
0.0 |
||
Reported operating profit |
(26.0) |
16.9 |
40.3 |
23.5 |
||
Net Interest |
(4.2) |
(6.1) |
3.5 |
4.2 |
||
Joint ventures & associates (post tax) |
0.1 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
66.3 |
104.1 |
127.5 |
111.5 |
Profit Before Tax (reported) |
|
|
(30.2) |
10.8 |
43.8 |
27.7 |
Reported tax |
(1.7) |
(1.2) |
(3.0) |
(3.0) |
||
Profit After Tax (norm) |
64.6 |
70.0 |
85.7 |
74.9 |
||
Profit After Tax (reported) |
(31.9) |
9.6 |
40.8 |
24.7 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
64.6 |
70.0 |
85.7 |
74.9 |
||
Net income (reported) |
(31.9) |
9.6 |
40.8 |
24.7 |
||
Average Number of Shares Outstanding (m) |
105.6 |
110.4 |
110.4 |
110.4 |
||
EPS - normalised (c) |
|
|
61.2 |
63.4 |
77.6 |
67.9 |
EPS - normalised fully diluted (c) |
|
|
61.2 |
63.4 |
77.6 |
67.9 |
EPS - basic reported (€) |
|
|
(0.30) |
0.09 |
0.37 |
0.22 |
Dividend (€) |
0.00 |
0.00 |
0.06 |
0.06 |
||
Revenue growth (%) |
5.2 |
18.9 |
15.3 |
(-5.3) |
||
Gross Margin (%) |
93.6 |
94.2 |
95.0 |
94.5 |
||
EBITDA Margin (%) |
23.8 |
29.5 |
28.5 |
26.6 |
||
Normalised Operating Margin (%) |
20.0 |
26.4 |
25.7 |
23.5 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
361.9 |
440.7 |
481.3 |
461.2 |
Intangible Assets |
127.8 |
169.7 |
159.9 |
147.8 |
||
Tangible Assets |
172.5 |
182.3 |
183.6 |
175.7 |
||
Investments & other |
61.6 |
88.8 |
137.8 |
137.8 |
||
Current Assets |
|
|
96.6 |
71.1 |
67.1 |
101.2 |
Stocks |
4.4 |
5.4 |
5.4 |
5.4 |
||
Debtors |
45.8 |
38.2 |
38.6 |
39.0 |
||
Cash & cash equivalents |
10.6 |
4.5 |
0.1 |
33.8 |
||
Other |
35.7 |
22.9 |
22.9 |
22.9 |
||
Current Liabilities |
|
|
(137.3) |
(161.0) |
(161.9) |
(169.4) |
Creditors |
(132.6) |
(144.5) |
(145.3) |
(146.2) |
||
Tax and social security |
(0.0) |
(1.1) |
(1.1) |
(1.1) |
||
Short term borrowings |
0.0 |
(12.8) |
(12.8) |
(12.8) |
||
Finance leases |
(4.6) |
(2.6) |
(2.6) |
(2.6) |
||
Other |
0.0 |
0.0 |
0.0 |
(6.6) |
||
Long Term Liabilities |
|
|
(48.0) |
(68.1) |
(63.1) |
(58.1) |
Long term borrowings |
0.0 |
(8.8) |
(8.8) |
(8.8) |
||
Finance leases |
(12.5) |
(10.4) |
(5.4) |
(0.4) |
||
Other long term liabilities |
(35.5) |
(48.9) |
(48.9) |
(48.9) |
||
Net Assets |
|
|
273.2 |
282.7 |
323.5 |
334.9 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
273.2 |
282.7 |
323.5 |
334.9 |
CASH FLOW |
||||||
Operating Cash Flow |
79.6 |
117.1 |
141.2 |
125.5 |
||
Working capital |
12.7 |
8.9 |
0.5 |
0.5 |
||
Exceptional & other |
(56.9) |
(70.5) |
(85.5) |
(76.7) |
||
Tax |
0.0 |
0.0 |
(3.0) |
(3.0) |
||
Net operating cash flow |
|
|
35.4 |
55.5 |
53.2 |
46.3 |
Capex |
(1.7) |
(21.4) |
(15.0) |
(6.0) |
||
Net investment in intangibles |
(49.4) |
(55.3) |
(41.0) |
0.8 |
||
Acquisitions/disposals |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net interest |
(0.3) |
(1.1) |
3.5 |
4.2 |
||
Equity financing |
86.5 |
0.0 |
0.0 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
(6.6) |
||
Other |
(61.6) |
16.3 |
(5.0) |
(5.0) |
||
Net Cash Flow |
8.8 |
(6.1) |
(4.4) |
33.7 |
||
Opening net debt/(cash) |
|
|
76.2 |
6.6 |
30.1 |
34.4 |
Other non-cash movements |
60.8 |
(17.4) |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
6.6 |
30.1 |
34.4 |
0.8 |
Source: Borussia Dortmund accounts, Edison Investment Research
|
|
Research: Energy & Resources
HELLENiQ ENERGY delivered solid Q124 results, with group sales of €3,278m up 5.3% y-o-y, IFRS EBITDA of €350m up 25.4% y-o-y and adjusted EBITDA (mainly stripping out inventory effects) of €338m down 16% compared with Q123. The decrease in adjusted EBITDA was primarily due to the y-o-y decline in refining margins. Net income was up 16% y-o-y to €179m, while adjusted net income fell 35% y o y to €164m, for the same reason. HELLENIQ’s refining business had a good quarter, with volumes increasing 8.1% to 3.987m tonnes and sales increasing 5.5% to €2,963m. The company made progress on its debt restructuring, refinancing €1bn of facilities at a notable margin reduction, extending the average maturity profile by one year.