Currency in EUR
Last close As at 09/06/2023
EUR4.35
▲ 0.02 (0.46%)
Market capitalisation
EUR480m
Research: Consumer
Borussia Dortmund’s Q321 results reflected ongoing cost control, while COVID continued to affect attendance-related revenues. The team’s late surge to finish third in the Bundesliga, and more silverware by winning the DFB-Pokal ensured a pleasing end to a challenging year. We increase our FY22 EBITDA forecast by 33% to reflect a more positive outlook for attendance at matches given the roll-out of COVID vaccines. There will be much speculation about the futures of a number of key players during the summer transfer window, but the improving financial outlook means the company can remain firm on player valuations, with a number of open managerial roles at the major European teams following ‘poor’ seasons.
Borussia Dortmund |
Nice finish |
Q321 results |
Travel & leisure |
1 June 2021 |
Share price performance
Business description
Next events
Analysts
Borussia Dortmund is a research client of Edison Investment Research Limited |
Borussia Dortmund’s Q321 results reflected ongoing cost control, while COVID continued to affect attendance-related revenues. The team’s late surge to finish third in the Bundesliga, and more silverware by winning the DFB-Pokal ensured a pleasing end to a challenging year. We increase our FY22 EBITDA forecast by 33% to reflect a more positive outlook for attendance at matches given the roll-out of COVID vaccines. There will be much speculation about the futures of a number of key players during the summer transfer window, but the improving financial outlook means the company can remain firm on player valuations, with a number of open managerial roles at the major European teams following ‘poor’ seasons.
Year end |
Revenue (€m) |
EBITDA |
PBT* |
EPS* |
P/E |
EV/EBITDA |
06/19 |
370.3 |
116.0 |
101.5 |
0.88 |
6.9 |
5.6 |
06/20 |
370.2 |
63.0 |
45.6 |
0.47 |
12.9 |
10.3 |
06/21e |
335.2 |
32.3 |
16.1 |
0.18 |
34.5 |
20.1 |
06/22e |
369.9 |
80.8 |
63.9 |
0.62 |
9.7 |
8.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q321: Flat revenue and operating costs
In Q321, Borussia Dortmund’s revenue (excluding net transfer income) of €80.0m and total operating expenses (excluding materials) of €101.9m were broadly flat year-on-year, leading to unsurprising lower net transfer income (€22.5m less than Q320) dropping straight through to lower EBITDA (Q321 €7.9m versus €28.6m in Q320). Higher TV marketing revenue y-o-y offset lower attendance-related revenues, and on the cost side higher personnel expenses were offset by lower other expenses. The €19.9m y-o-y decline in net income to a loss of €18.8m, was lower than the EBITDA decline as a result of more favourable tax and financial expenses. The net debt position of €52.2m for the first nine months of FY21 (9M21) was modestly ahead of the H121 position €50.9m.
FY22: Looking forward to the return of fans
Subsequent to the results release, management finessed its financial guidance for FY21, incorporating unbudgeted success in the DFB-Pokal and better performance (quarter finalists) in the Champions League versus FY20 (Round of 16). Guidance is for EBITDA of €33m (€25–30m previously) and a net loss of €75m (€70–75m previously). We trim our FY21 EBITDA forecast to be consistent with the guidance and increase FY22 EBITDA by 33% to incorporate the phased return of fans to the stadium, given the success of the vaccine roll-out. We assume c 70% attendance through the season (less than 50% capacity in H122 and 100% capacity in H22).
Valuation: Asset-backed valuation upside of 118%
The share price has been strong, reflecting improved on-the-pitch performance, as well as a more optimistic outlook for attendance at games. Our asset-based valuation increases by c 1% to €13.2, reflecting recent changes in peer valuations and the valuation of the squad (€576.1m, source: Transfermarkt.com), as well as updates for the company’s net debt and other assets.
Exhibit 1: Financial summary
€'k |
2019 |
2020 |
2021e |
2022e |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
370,256 |
370,196 |
335,238 |
369,931 |
Cost of Sales |
(21,273) |
(22,392) |
(20,000) |
(21,000) |
||
Gross Profit |
348,983 |
347,804 |
315,238 |
348,931 |
||
EBITDA |
|
|
115,983 |
62,992 |
32,276 |
80,753 |
Normalised operating profit |
|
|
103,160 |
49,050 |
17,981 |
66,278 |
Amortisation of acquired intangibles |
(65,850) |
(88,285) |
(90,655) |
(94,904) |
||
Exceptionals |
(13,809) |
(3,903) |
0 |
0 |
||
Reported operating profit |
23,501 |
(43,138) |
(72,673) |
(28,626) |
||
Net Interest |
(1,705) |
(3,444) |
(1,879) |
(2,419) |
||
Joint ventures & associates (post tax) |
13 |
(1) |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
101,468 |
45,605 |
16,102 |
63,859 |
Profit Before Tax (reported) |
|
|
21,809 |
(46,583) |
(74,553) |
(31,045) |
Reported tax |
(4,418) |
2,630 |
0 |
(6,386) |
||
Profit After Tax (norm) |
80,913 |
43,030 |
16,102 |
57,473 |
||
Profit After Tax (reported) |
17,391 |
(43,953) |
(74,553) |
(37,431) |
||
Minority interests |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
80,913 |
43,030 |
16,102 |
57,473 |
||
Net income (reported) |
17,391 |
(43,953) |
(74,553) |
(37,431) |
||
Average number of shares outstanding (m) |
92.0 |
92.0 |
92.0 |
92.0 |
||
EPS - normalised (c) |
|
|
87.95 |
46.77 |
17.50 |
62.47 |
EPS - diluted normalised (€) |
|
|
0.88 |
0.47 |
0.18 |
0.62 |
EPS - basic reported (€) |
|
|
0.19 |
(0.48) |
(0.81) |
(0.41) |
Dividend (€) |
0.06 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
18.2 |
(0.0) |
(9.4) |
10.3 |
||
Gross Margin (%) |
94.3 |
94.0 |
94.0 |
94.3 |
||
EBITDA Margin (%) |
31.3 |
17.0 |
9.6 |
21.8 |
||
Normalised Operating Margin |
27.9 |
13.2 |
5.4 |
17.9 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
371,715 |
441,455 |
394,506 |
346,126 |
Intangible Assets |
163,710 |
229,667 |
194,012 |
154,108 |
||
Tangible Assets |
184,001 |
193,037 |
181,742 |
173,267 |
||
Investments & other |
24,004 |
18,751 |
18,751 |
18,751 |
||
Current Assets |
|
|
128,356 |
76,512 |
67,050 |
72,262 |
Stocks |
4,569 |
6,754 |
4,057 |
5,847 |
||
Debtors |
30,061 |
36,520 |
33,071 |
36,494 |
||
Cash & cash equivalents |
55,865 |
3,317 |
0 |
0 |
||
Other |
37,861 |
29,921 |
29,921 |
29,921 |
||
Current Liabilities |
|
|
(125,388) |
(122,609) |
(140,750) |
(135,014) |
Creditors |
(119,779) |
(110,188) |
(86,173) |
(86,889) |
||
Tax and social security |
(811) |
(40) |
(40) |
(40) |
||
Short term borrowings |
0 |
(8,031) |
(50,187) |
(43,735) |
||
Finance leases |
(3,127) |
(4,350) |
(4,350) |
(4,350) |
||
Other |
(1,671) |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(19,764) |
(89,911) |
(89,911) |
(89,911) |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Finance leases |
(8,381) |
(20,054) |
(20,054) |
(20,054) |
||
Other long term liabilities |
(11,383) |
(69,857) |
(69,857) |
(69,857) |
||
Net Assets |
|
|
354,919 |
305,447 |
230,894 |
193,463 |
Minority interests |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
354,919 |
305,447 |
230,894 |
193,463 |
CASH FLOW |
||||||
Op Cash Flow before WC and tax |
111,914 |
59,547 |
30,397 |
78,334 |
||
Working capital |
5,673 |
(18,011) |
(17,870) |
(4,496) |
||
Exceptional & other |
(84,587) |
(38,877) |
(8,121) |
(47,581) |
||
Tax |
(2,834) |
305 |
0 |
(6,386) |
||
Operating cash flow |
|
|
30,166 |
2,964 |
4,406 |
19,872 |
Capex |
(9,872) |
(6,143) |
(3,000) |
(6,000) |
||
Net investment in intangibles |
(13,643) |
(44,646) |
(45,000) |
(5,000) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Net interest |
(1,456) |
(3,326) |
(1,879) |
(2,419) |
||
Equity financing |
0 |
0 |
0 |
0 |
||
Dividends |
(5,519) |
(5,519) |
0 |
0 |
||
Other |
(3,275) |
4,122 |
43,000 |
(7,000) |
||
Net Cash Flow |
(3,599) |
(52,548) |
(2,473) |
(548) |
||
Opening net debt/(cash) |
|
|
(50,769) |
(44,357) |
29,118 |
74,591 |
Other non-cash movements |
(2,813) |
(20,927) |
(43,000) |
7,001 |
||
Closing net debt/(cash) |
|
|
(44,357) |
29,118 |
74,591 |
68,138 |
Source: Company data, Edison Investment Research
|
|
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