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

Third final in club history guarantees extra profit / chg.

On Tuesday, BVB visited Paris St. Germain for the second leg of the UEFA Champions League semifinal. Thanks to a 1-0 victory, the team managed to advance to the final for the first time since 2013. With this, the club can now expect additional UEFA prize money payments of at least € 15.5m. Consequently, we anticipate an increase of the EBT and EBITDA guidance, as we have seen it after previous UCL advancements. Keep in mind that those premium payments have a de facto 100% margin.

The final in London will see BVB take on the winner of the Real Madrid vs Bayern Munich fixture, which is taking place tonight. Against either team BVB should be seen in the outsider role, and we therefore do not model any income from a potential Champions League victory. However, should Borussia Dortmund manage to win the final, the club would receive additional premium payments of € 4.5m for the victory, along with at least € 3.5m for participating in the UEFA Super Cup (UCL winner vs UEL winner).

Looking at the Bundesliga table, Borussia Dortmund has mathematically secured at least 5 th place, guaranteeing the club's participation in the upcoming Champions League season. Notably, this qualification marks an important achievement for BVB, especially considering the upcoming UCL season will be played in a new format with an increased prize money pool of € 2.5bn (+25%).

Furthermore, BVB has released its Q3 prelims, which showed a slight revenue decrease 2.7% yoy to € 98.2m, which can be primarily attributed to a reduced number of home games. Consequently, there was a decline in revenues from Match Operations (down 16% yoy to € 10.7m) as well as from the Conference, Catering and Miscellaneous segment (down 14% yoy to € 8.5m). However, the TV-marketing segment experienced a 9% yoy increase, reaching € 38.1m, while Advertising sales showed a 3% uptick, amounting to € 35.5m. Q3 EBITDA came in at € 1.8m, compared to € 8.1m in the previous year.

Lastly, Borussia Dortmund has announced changes to its executive board, including the appointment of Lars Ricken as a new member. Ricken, a former BVB player and director of the youth academy, will now be responsible for sporting activities, effective May 1st. Hans-Joachim Watzke, set to depart the executive board by the end of 2025 had previously announced plans to delegate sporting responsibilities by summer 2024, a decision now honoured by the executive committee with the appointment of Ricken.

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

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