Last close As at 05/08/2026
EUR3.07
▲ 0.03 (0.99%)
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EUR339m
Research: Consumer
Bundesliga leaders and unbeaten in their last 14 matches in all competitions, Borussia Dortmund could not have wished for a stronger start under new head coach, Lucien Favre. Indeed an impressive home win over Atlético Madrid already all but assures qualification for the knockout stages of the Champions League, which is in marked contrast to last season’s disappointment. This reinforces our current-year forecast of robust pre-transfer revenue growth (c 12%), driven by international TV marketing, even if the bumper transfers of Dembélé and Aubameyang make FY18 a hard act to follow. Progress may be more measured in FY20 but subject as ever to surprise from Dortmund’s ability to generate substantial hidden reserves from player transfers.
Borussia Dortmund |
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Borussia Dortmund is a client of Edison Investment Research Limited |
Quick off the mark
Bundesliga leaders and unbeaten in their last 14 matches in all competitions, Borussia Dortmund could not have wished for a stronger start under new head coach, Lucien Favre. Indeed an impressive home win over Atlético Madrid already all but assures qualification for the knockout stages of the Champions League, which is in marked contrast to last season's disappointment. This reinforces our current-year forecast of robust pre-transfer revenue growth (c 12%), driven by international TV marketing, even if the bumper transfers of Dembélé and Aubameyang make FY18 a hard act to follow. Progress may be more measured in FY20 but subject as ever to surprise from Dortmund’s ability to generate substantial hidden reserves from player transfers.
Q418: Tough comparative
The quarter to June was predictably subdued as a lack of involvement in UEFA and DFB Cup competition, fewer Bundesliga home games (3 vs 5) and a halving of transfer activity drove revenue down by a third. However, domestic TV marketing was a rare bright spot owing to the new broadcasting deal and new Champion Partners buoyed advertising. The impact on profit was at least mitigated by a 12% reduction in bonus-led labour costs and a halving of material costs in line with revenue. Finances remained typically disciplined with net cash €50m at year end.
Shaping up
Despite current elation, epitomised by Atlético Madrid’s record Champions League defeat, we are not changing our assumption of Champions League Round of 16. It is early days and we are mindful that last year Dortmund’s Bundesliga season also began well only to fall apart with a 29-point deficit to winners, Bayern. Ahead of Q1 results on 14 November, our maintained forecast of 12% higher pre-transfer revenue largely reflects a doubling from the revamped Champions League, while our EBITDA forecast (also held) now assumes a further €15m rise in transfers. Our new FY20 forecast sees continued progress and scope for transfer gain surprise.
Valuation: So far, so good
An EV/EBITDA of 9.7x FY19e does not fully recognise the long-term potential of powerful brand development, valuable media rights and strong cash flow, backed by season ticket sales and hidden reserves from player investment (broadly, c €300m surplus of market value to net player assets, per www.transfermarkt.de).
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Edison estimates
Note: *Before player transfer income. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. |
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