Original-Research: Borussia Dortmund GmbH & Co KGaA (von NuWays AG): BUY

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Original-Research: Borussia Dortmund GmbH & Co KGaA - from NuWays AG

Classification of NuWays AG to Borussia Dortmund GmbH & Co KGaA

Company Name: Borussia Dortmund GmbH & Co KGaA
ISIN: DE0005493092

Reason for the research: Update
Recommendation: BUY
from: 26.02.2024
Target price: 5.50
Target price on sight of: 12 Monaten
Last rating change: 
Analyst: Philipp Sennewald

Strong Q2: A beat on all lines / chg. est.
Borussia Dortmund released Q2 prelims, which came in significantly ahead of
our estimates. In detail:
Q2 sales increased by 32.7% yoy, to EUR 154m (eNuW: EUR 131m), which was mainly
driven by a steep increase in revenues from TV-marketing (+43% yoy to EUR
71.5m) as well as match Operations (+71% to 19.9m). Both should be at least
partly attributable to the weak comparable base following the 2022 Qatar
World Cup. Sales from Conference, Catering and Miscellaneous also
contribute strongly, as the segment's sales grew 33.4% yoy to EUR 12.4m,
which we regard as a result of a pick-up in company events. Q2 EBITDA came
in at EUR 42.1m (eNuW: EUR 35.4m), implying a 27.3% margin (+3.4pp yoy). This
should be mainly explained be the strongly increased TV-marketing revenues,
which de facto do not incur any costs.
Against this backdrop, the company should be fully on track to outperform
its FY targets of > EUR 427m sales (lower end would even imply a 13% yoy
decrease in H2 sales) and EBITDA of EUR 104-114m (implying negative EBITDA in
H2 after EUR 122m at H1).
Besides the strong financial results, BVB is also delivering good
performances on the pitch. After trailing the Top-4 by six point before the
second half of the season started, BVB is now 1 point clear of 5th placed
Leipzig in P4, which would definitely be sufficient to qualify for the next
UCL season. Even more importantly, the team returned with a 1-1 draw from
Eindhoven, where they played the first leg of their UCL round of 16 tie.
Given the strong performances on their home turf in recent years, we regard
BVB's chances as high to advance to the quarterfinals, which would in turn
generate additional prize money of EUR 10.6m as well as an additional home
match (eNuW: EUR 2m sales). However, we conservatively do not include this in
our estimates yet.
On another note, UEFA recently disclosed first indications of the prize
money allocation for the newly formatted 2024/25 UCL, stating that overall
prize money will increase by c. 25% to EUR 2.47bn. While there will be a
higher emphasis on performance (+7.5pp of total prize money), UEFA will
also increase the starting fee to EUR 18.9m (prior: EUR 15.6m). Until more
details follow, we are initially modelling a 25% increase in BVB's UCL
TV-marketing sales for 24/25e, based on the increase in total prize money.
We confirm our BUY recommendation with an unchanged PT of EUR 5.50.

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Kontakt für Rückfragen
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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