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: Kaufen
from: 17.04.2024
Target price: EUR 5.50
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Philipp Sennewald

First semifinal since 11 years secures € 12.5m extra profit / chg.

By winning Tuesday night's match against Atletico Madrid, Borussia Dortmund has secured a spot in the UEFA Champions League semifinals for the first time since 2013. With this advancement, the club can now anticipate additional UEFA prize money payments of at least € 12.5m. Consequently, we anticipate an increase of the EBT and EBITDA guidance in the same amount. Keep in mind that those premium payments have a de facto 100% margin, as no costs are incurred. Moreover, this does not yet include sales from ticketing and catering for the additional home game.

In the semifinals, BVB will face PSG with superstar Mbappe. Both teams met already in the group stage, where PSG won their home game 2-0 followed by a 1-1 draw in Dortmund. We therefore attribute the outsider role to BVB for the time being and do not model any income from a potential progression. However, should Borussia Dortmund manage to reach the final, the club would receive additional premium payments of € 15.5 million, while winning the competition would add another € 4.5m along with at least € 3.5m for participating in the UEFA Super Cup (UCL winner vs UEL winner).

Looking at the Bundesliga table, BVB is currently positioned in 5 th place. With only 5 games to go, BVB finds themselves in a promising position to secure qualification for the upcoming season's UEFA Champions League. A direct duel with RB Leipzig for the 4 th spot in the final table and the consequent UCL participation is looming, with a head-to-head encounter scheduled for April 27th. Mind you, if Germany secures the second position in the UEFA coefficient ranking, even the 5 th -placed team in the Bundesliga would qualify for the Champions League. With their progression in the current UCL campaign, BVB now can gather additional valuable points for this ranking. (See update from January).

Lastly, the auction for domestic broadcasting rights for the 4-year period starting with the season 2025/26 kicked off this week. While the current 4-year deal has a total value of € 4.4bn, fears were arising that the next deal could decrease in volume after the Italian and French Leagues had to cut back recently. However, the recent abortion of the “NoSingle-Buyer-Rule” is set to intensify the bidding contest. Hence, we expect the deal volume to remain on the same level as in the current period.

Reiterate BUY with an unchanged PT of € 5.50 based on DCF.

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