Currency in EUR
Last close As at 26/05/2023
EUR5.68
▲ −0.20 (−3.40%)
Market capitalisation
EUR635m
Research: Consumer
Borussia Dortmund’s Q323 results demonstrate the ongoing recovery of its financial results against a COVID-affected comparative period, with year-on-year growth from all its revenue streams and higher profitability. With two games to play, the Bundesliga is finely balanced. Our asset-backed sum-of the-parts valuation increases to €12/share from €11.3/share, highlighting the attractiveness of the current share price.
Borussia Dortmund |
Nail-biting finish to the 2022/23 season |
Q323 results |
Travel and leisure |
17 May 2023 |
Share price performance
Business description
Next events
Analysts
Borussia Dortmund is a research client of Edison Investment Research Limited |
Borussia Dortmund’s Q323 results demonstrate the ongoing recovery of its financial results against a COVID-affected comparative period, with year-on-year growth from all its revenue streams and higher profitability. With two games to play, the Bundesliga is finely balanced. Our asset-backed sum-of the-parts valuation increases to €12/share from €11.3/share, highlighting the attractiveness of the current share price.
Year end |
Revenue (€m) |
EBITDA |
PBT* |
EPS* |
DPS |
P/E |
EV/EBITDA |
06/21 |
334.2 |
39.0 |
24.3 |
0.26 |
0.0 |
17.2 |
12.9 |
06/22 |
351.6 |
80.8 |
63.2 |
0.63 |
0.0 |
7.1 |
6.2 |
06/23e |
395.0 |
105.9 |
91.6 |
0.76 |
0.0 |
5.9 |
4.7 |
06/24e |
420.5 |
120.2 |
105.9 |
0.88 |
0.0 |
5.1 |
4.2 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q323: More games, continued post-COVID recovery
Borussia Dortmund’s revenue grew by 57% y-o-y in Q323 to €100.8m, and EBITDA improved to a profit of €8.1m versus a loss of €5.9m in the comparative period. The key drivers of the improved financial performance were more Bundesliga games in the period (five Bundesliga games versus four in Q322), with greater attendance per game (full stadium versus COVID-related restrictions in Q322), better relative performance in European competitions and ongoing growth in sponsorship income. A greater number of games with better attendance led to significant year-on-year growth in match-related revenues: Match Operations +620%, and Conference and Catering +214%. The company’s first quarterly free cash flow generation since Q122 enabled a reduction in the net debt position to €13.3m from €19.9m at end H122.
FY23: All to play for
The results take the cumulative EBITDA and EBIT for the first nine months of the year to €109.7m and €31m, versus FY23 guidance issued at the time of the FY22 results of €101–106m and €2–7m, which was reiterated with the publication of the Q323 results. At the date of writing, with two games remaining in the domestic season, the first team is placed second in the Bundesliga – one point behind the leaders, having been top of the table in recent weeks. The maintained guidance reflects the company’s typical seasonality; it makes a loss in the final quarter due to fewer games. If successful in the league, Borussia Dortmund would likely incur extra costs such as player bonuses, as well as greater prize money from sponsors.
Valuation: Sum-of-the-parts increased by 6%
We have increased our sum-of-the-parts valuation for Borussia Dortmund to €12/share (€11.3/share previously) as we update for changes in squad valuations, the share price performance of its peer group and the company’s financial results. Borussia Dortmund’s attractive valuation was highlighted in our most recent MediaWatch report.
Exhibit 1: Financial summary
€m |
2020 |
2021 |
2022 |
2023e |
2024e |
||
Year end 30 June |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
370.2 |
334.2 |
351.6 |
395.0 |
420.5 |
Cost of Sales |
(22.4) |
(19.6) |
(22.6) |
(25.2) |
(26.3) |
||
Gross Profit |
347.8 |
314.6 |
329.0 |
369.9 |
394.2 |
||
EBITDA |
|
|
63.0 |
39.0 |
80.8 |
105.9 |
120.2 |
Operating profit (before amort. and excepts.) |
|
|
49.1 |
25.3 |
67.4 |
92.2 |
106.3 |
Amortisation of acquired intangibles |
(88.3) |
(92.6) |
(87.5) |
(85.4) |
(93.9) |
||
Exceptionals |
(3.9) |
(4.8) |
(9.1) |
0.0 |
0.0 |
||
Reported operating profit |
(43.1) |
(72.1) |
(29.2) |
6.9 |
12.3 |
||
Net Interest |
(3.4) |
(1.1) |
(4.2) |
(0.6) |
(0.3) |
||
Joint ventures & associates (post tax) |
(0.0) |
0.1 |
0.1 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
45.6 |
24.3 |
63.2 |
91.6 |
105.9 |
Profit Before Tax (reported) |
|
|
(46.6) |
(73.2) |
(33.4) |
6.2 |
12.0 |
Reported tax |
2.6 |
0.3 |
(1.7) |
0.0 |
0.0 |
||
Profit After Tax (norm) |
43.0 |
24.2 |
66.4 |
84.3 |
97.5 |
||
Profit After Tax (reported) |
(44.0) |
(72.8) |
(35.1) |
6.2 |
12.0 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
43.0 |
24.2 |
66.4 |
84.3 |
97.5 |
||
Net income (reported) |
(44.0) |
(72.8) |
(35.1) |
6.2 |
12.0 |
||
Average Number of Shares Outstanding (m) |
92.0 |
92.0 |
105.4 |
110.4 |
110.4 |
||
EPS - normalised (c) |
|
|
46.8 |
26.3 |
63.0 |
76.3 |
88.3 |
EPS - normalised fully diluted (c) |
|
|
46.8 |
26.3 |
63.0 |
76.3 |
88.3 |
EPS - basic reported (€) |
|
|
(0.48) |
(0.79) |
(0.33) |
0.06 |
0.11 |
Dividend (€) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
(0.0) |
(9.7) |
5.2 |
12.3 |
6.4 |
||
Gross Margin (%) |
94.0 |
94.1 |
93.6 |
93.6 |
93.7 |
||
EBITDA Margin (%) |
17.0 |
11.7 |
23.0 |
26.8 |
28.6 |
||
Normalised Operating Margin |
13.2 |
7.6 |
19.2 |
23.3 |
25.3 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
441.5 |
389.8 |
358.4 |
364.4 |
355.6 |
Intangible Assets |
229.7 |
193.4 |
124.4 |
132.0 |
131.1 |
||
Tangible Assets |
193.0 |
183.5 |
172.5 |
170.8 |
162.9 |
||
Investments & other |
18.8 |
12.9 |
61.6 |
61.6 |
61.6 |
||
Current Assets |
|
|
76.5 |
60.7 |
96.6 |
99.3 |
115.7 |
Stocks |
6.8 |
6.8 |
4.4 |
4.4 |
4.4 |
||
Debtors |
36.5 |
29.9 |
45.8 |
49.8 |
49.8 |
||
Cash & cash equivalents |
3.3 |
1.7 |
10.6 |
9.3 |
25.7 |
||
Other |
29.9 |
22.2 |
35.8 |
35.8 |
35.8 |
||
Current Liabilities |
|
|
(122.6) |
(163.6) |
(130.6) |
(133.1) |
(133.1) |
Creditors |
(110.2) |
(100.1) |
(125.9) |
(132.9) |
(132.9) |
||
Tax and social security |
(0.0) |
(0.0) |
(0.0) |
(0.0) |
(0.0) |
||
Short term borrowings |
(8.0) |
(56.9) |
0.0 |
0.0 |
0.0 |
||
Finance leases |
(4.4) |
(4.2) |
(4.6) |
(0.1) |
(0.1) |
||
Other |
0.0 |
(2.3) |
0.0 |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
(89.9) |
(54.3) |
(44.0) |
(44.0) |
(39.5) |
Long term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Finance leases |
(20.1) |
(16.8) |
(12.5) |
(12.5) |
(12.5) |
||
Other long term liabilities |
(69.9) |
(37.5) |
(31.4) |
(31.4) |
(26.9) |
||
Net Assets |
|
|
305.4 |
232.6 |
280.5 |
286.7 |
298.7 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
305.4 |
232.6 |
280.5 |
286.7 |
298.7 |
CASH FLOW |
|||||||
Operating Cash Flow |
59.5 |
37.9 |
76.6 |
105.2 |
119.9 |
||
Working capital |
(18.0) |
(6.9) |
16.3 |
(4.0) |
0.0 |
||
Exceptional & other |
(38.9) |
(13.6) |
(57.5) |
(52.4) |
(59.7) |
||
Tax |
0.3 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net operating cash flow |
|
|
3.0 |
17.4 |
35.4 |
48.9 |
60.2 |
Capex |
(6.1) |
(3.4) |
(1.7) |
(12.0) |
(6.0) |
||
Net investment in intangibles |
(44.6) |
(58.6) |
(49.4) |
(33.0) |
(33.0) |
||
Acquisitions/disposals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net interest |
(3.3) |
(1.4) |
(0.3) |
(0.6) |
(0.3) |
||
Equity financing |
0.0 |
0.0 |
86.5 |
0.0 |
0.0 |
||
Dividends |
(5.5) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(3.9) |
52.5 |
(61.6) |
(4.5) |
(4.5) |
||
Net Cash Flow |
(60.6) |
6.4 |
8.8 |
(1.3) |
16.4 |
||
Opening net debt/(cash) |
|
|
(44.4) |
29.1 |
76.2 |
6.6 |
3.4 |
Other non-cash movements |
(12.9) |
(53.6) |
60.8 |
4.5 |
0.0 |
||
Closing net debt/(cash) |
|
|
29.1 |
76.2 |
6.6 |
3.4 |
(13.0) |
Source: Borussia Dortmund, Edison Investment Research
|
|
Research: Healthcare
IRLAB has announced an agreement with the McQuade Center for Strategic Research and Development (MSRD), a member of the Otsuka family of pharmaceutical companies. As part of this agreement, MSRD will evaluate IRLAB’s neuropsychiatric preclinical programmes: IRL757 (apathy) and IRL942 (cognitive function). MSRD searches for, identifies and funds innovative early-stage R&D programmes that it believes have the potential to build the future portfolio of Otsuka products. We view this external interest from MSRD as encouraging for IRLAB’s preclinical portfolio; discussions are expected in coming months regarding a potential R&D collaboration for these programmes.
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