Last close As at 05/08/2026
EUR3.07
▲ 0.03 (0.99%)
Market capitalisation
EUR339m
Research: Consumer
Bundesliga leaders and unbeaten in their last 13 matches in all competitions, Borussia Dortmund could not have wished for a stronger start under new head coach, Lucien Favre. Indeed, an impressive 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. We are therefore confidently maintaining 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 |
Scoring for fun |
Annual report |
Travel & leisure |
29 October 2018 |
Share price performance
Business description
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Bundesliga leaders and unbeaten in their last 13 matches in all competitions, Borussia Dortmund could not have wished for a stronger start under new head coach, Lucien Favre. Indeed, an impressive 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. We are therefore confidently maintaining 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.
Year end |
Revenue* (€m) |
EBITDA |
PBT** |
EPS** |
DPS |
EV/EBITDA |
06/17 |
328.4 |
74.1 |
61.1 |
0.56 |
0.06 |
10.7 |
06/18 |
313.3 |
126.6 |
111.2 |
1.03 |
0.06 |
6.2 |
06/19e |
350.0 |
87.0 |
76.0 |
0.70 |
0.06 |
9.1 |
06/20e |
365.0 |
90.0 |
80.0 |
0.74 |
0.06 |
8.8 |
Note: *Before player transfer income. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
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 (just one less point than now) only to fall apart with a 29-point deficit to winners, Bayern. We maintain our forecast of 12% higher pre-transfer revenue (see page 2) thanks largely to a doubling (our estimate) from the revamped Champions League. Our EBITDA forecast is also held but only as we now assume a further €15m rise in transfers to make up for higher operating costs than expected. Our new FY20 forecast sees continued progress and scope for transfer gain surprise.
Valuation: So far, so good
An EV/EBITDA of 9.1x 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).
Revenue and profit analysis
Exhibit 1: Revenue and profit analysis
Year end June (€m) |
Q1-Q317 |
Q417 |
FY17 |
Q1-Q318 |
Q418 |
FY18 |
2019e |
2020e |
Home matches |
▲ |
▲ |
||||||
Bundesliga |
12 |
5 |
17 |
14 |
3 |
17 |
17 |
17 |
Champions League |
4 |
1 |
5 |
3 |
- |
3 |
4 |
4. |
Europa League |
- |
- |
- |
2 |
- |
2 |
- |
- |
Domestic cups |
2 |
- |
3 |
1 |
- |
1 |
2 |
2 |
Away matches: |
||||||||
Champions League |
4 |
1 |
5 |
3 |
- |
3 |
4 |
4 |
Europa League |
- |
- |
- |
2 |
- |
2 |
- |
- |
Domestic cups |
2 |
1+Final |
3+Final |
3 |
- |
3 |
2 |
2 |
Revenue |
||||||||
Match operations: |
||||||||
Bundesliga |
19.3e |
7.7e |
27.0 |
22.3e |
5.1e |
27.4 |
28.0 |
28.5 |
Champions League |
7.6e |
1.9e |
9.5 |
5.8e |
- |
5.8 |
8.0 |
8.2 |
Europa League |
- |
- |
- |
3.3e |
- |
3.3 |
- |
- |
Domestic cups |
3.3e |
2.0e |
5.3 |
2.2e |
- |
2.2 |
3.5 |
4.0 |
Other |
2.0e |
0.2e |
2.2 |
2.9e |
0.6e |
3.5 |
3.0 |
3.3 |
Total |
32.1 |
11.8 |
43.9 |
36.6 |
5.7 |
42.3 |
42.5 |
44.0 |
TV marketing: |
||||||||
Bundesliga |
48.7 |
17.4 |
66.1 |
65.0 |
23.0 |
88.0 |
92.0 |
96.5 |
Champions League |
41.7 |
8.4 |
50.1 |
28.1 |
- |
28.1 |
55.0 |
58.0 |
Europa League |
0.9 |
- |
0.9 |
2.9 |
0.7 |
3.6 |
- |
- |
Domestic cups |
2.8 |
5.8 |
8.6 |
2.6 |
- |
2.6 |
4.0 |
4.5 |
Total |
94.1 |
31.7 |
125.8 |
98.6 |
23.7 |
122.3 |
151.0 |
159.0 |
Advertising |
60.8 |
26.6 |
87.4 |
67.5 |
26.5 |
94.0 |
99.0 |
101.0 |
Merchandising |
29.7 |
9.8 |
39.5 |
24.9 |
4.6 |
29.5 |
30.0 |
32.0 |
Catering/other |
22.6 |
9.3 |
31.9 |
18.7 |
6.5 |
25.2 |
27.5 |
29.0 |
Revenue before transfers |
239.3 |
89.1 |
328.4 |
246.5 |
66.8 |
313.3 |
350.0 |
365.0 |
Transfers |
46.2 |
31.1 |
77.3 |
208.8* |
13.9 |
222.7 |
105.0** |
110.0** |
Total |
285.5 |
120.2 |
405.7 |
455.4 |
80.7 |
536.0 |
455.0 |
475.0 |
Other operating income |
2.0 |
2.2 |
4.2 |
3.0 |
0.9 |
3.9 |
4.0 |
4.5 |
Labour costs: |
||||||||
Squad |
n/a |
n/a |
(146.9) |
n/a |
n/a |
(151.7) |
(163.0) |
(172.0) |
Retail / admin |
n/a |
n/a |
(23.6) |
n/a |
n/a |
(26.2) |
(27.5) |
(28.0) |
Other |
n/a |
n/a |
(7.4) |
n/a |
n/a |
(8.8) |
(9.5) |
(10.0) |
Total |
(123.9) |
(54.0) |
(177.9) |
(139.3) |
(47.4) |
(186.7) |
(200.0) |
(210.0) |
Material costs |
(19.1) |
(6.8) |
(25.9) |
(16.5) |
(3.6) |
(20.1) |
(20.0) |
(20.5) |
Other operating costs |
(93.7) |
(38.3) |
(132.0) |
(174.1) |
(32.4) |
(206.5) |
(152.0) |
(159.0) |
EBITDA |
50.6 |
23.5 |
74.1 |
128.5 |
(1.9) |
126.6 |
87.0 |
90.0 |
Source: Edison Investment Research. Note: ▲ Assuming Champions League round of 16 and DFB Cup semi-final. *Including disposals of Dembélé and Aubameyang. **Notional (assumed average of transfer revenue of three previous years excluding “exceptional” Dembélé and Aubameyang transactions).
Exhibit 2: Financial summary
€'000s |
2017 |
2018 |
2019e |
2020e |
||
June |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|
|||||
Revenue |
|
|
405,700 |
536,000 |
455,000 |
475,000 |
EBITDA |
|
|
74,100 |
126,600 |
87,000 |
90,000 |
Operating Profit (before amort. and except.) |
62,600 |
115,500 |
76,000 |
79,000 |
||
Intangible Amortisation |
(51,900) |
(79,400) |
(65,000) |
(68,000) |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Operating Profit |
10,700 |
36,100 |
11,000 |
11,000 |
||
Net Interest |
(1,500) |
(4,300) |
0 |
1,000 |
||
Other financial items |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
61,100 |
111,200 |
76,000 |
80,000 |
Profit Before Tax (FRS 3) |
|
|
9,200 |
31,800 |
11,000 |
12,000 |
Tax |
(900) |
(3,300) |
(1,000) |
(1,000) |
||
Profit After Tax (norm) |
51,900 |
94,500 |
64,600 |
68,000 |
||
Profit After Tax (FRS 3) |
8,300 |
28,500 |
10,000 |
11,000 |
||
Minority interests |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
51,900 |
94,500 |
64,600 |
68,000 |
||
Profit after tax (FRS3) |
8,300 |
28,500 |
10,000 |
11,000 |
||
Average Number of Shares Outstanding (m) |
92.0 |
92.0 |
92.0 |
92.0 |
||
EPS - normalised (c) |
|
|
56.4 |
102.7 |
70.2 |
73.9 |
EPS - (IFRS) (c) |
|
|
9.0 |
31.0 |
10.9 |
12.0 |
Dividend per share (c) |
6.0 |
6.0 |
6.0 |
6.0 |
||
EBITDA Margin (%) |
18.3 |
23.6 |
19.1 |
18.9 |
||
Operating Margin (before GW and except.) (%) |
15.4 |
21.5 |
16.7 |
16.6 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
354,900 |
341,900 |
384,000 |
395,000 |
Intangible Assets |
141,500 |
109,700 |
159,000 |
173,000 |
||
Tangible Assets |
184,700 |
180,700 |
178,000 |
175,000 |
||
Investments |
28,700 |
51,500 |
47,000 |
47,000 |
||
Current Assets |
|
|
123,700 |
136,400 |
101,000 |
95,000 |
Stocks |
9,000 |
5,600 |
6,000 |
6,000 |
||
Debtors |
48,800 |
23,000 |
28,000 |
28,000 |
||
Cash |
49,300 |
59,500 |
47,000 |
41,000 |
||
Other |
16,600 |
48,300 |
20,000 |
20,000 |
||
Current Liabilities |
|
|
(140,900) |
(119,000) |
(122,000) |
(122,000) |
Creditors |
(130,600) |
(117,000) |
(122,000) |
(122,000) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Finance leases |
(10,300) |
(2,000) |
0 |
0 |
||
Long Term Liabilities |
|
|
(25,400) |
(23,000) |
(22,000) |
(22,000) |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Finance leases |
(8,700) |
(6,700) |
(7,000) |
(7,000) |
||
Other long term liabilities |
(16,700) |
(16,300) |
(15,000) |
(15,000) |
||
Net Assets |
|
|
312,300 |
336,300 |
341,000 |
346,000 |
CASH FLOW |
||||||
Operating Cash Flow |
|
|
117,900 |
163,500 |
109,000 |
114,000 |
Net Interest |
(2,100) |
(3,700) |
0 |
1,000 |
||
Tax |
(5,500) |
(1,700) |
(6,000) |
(2,000) |
||
Capex |
(8,100) |
(7,200) |
(8,300) |
(8,500) |
||
Acquisitions/disposals |
(96,500) |
(123,600) |
(100,000) |
(105,000) |
||
Financing |
0 |
(1,300) |
0 |
0 |
||
Dividends |
(5,500) |
(5,500) |
(5,500) |
(5,500) |
||
Net Cash Flow |
200 |
20,500 |
(10,800) |
(6,000) |
||
Opening net debt/(cash) |
|
|
(30,100) |
(30,300) |
(50,800) |
(40,000) |
Finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(30,300) |
(50,800) |
(40,000) |
(34,000) |
Source: Company data, Edison Investment Research
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