Although in transition after high-profile player departures, Borussia Dortmund (SIX:BVB) continues to compete well on all fronts. Its financial performance is similarly spirited with a near doubling in H1 pre-transfer EBITDA, driven by the Champions League. However, costs remain an issue, so we are maintaining our full-year pre-transfer EBITDA forecast despite better than expected progress in Europe. Apart from a new deal on Bundesliga media rights, FY18 should benefit from a significantly lower player cost base, hence our €8m EBITDA upgrade and forecast bumper cash generation (over €100m net cash at June 2018), which provides ample scope for profitable investment and returns to shareholders.
H1: Solid profit recovery
Fortunes were predictably buoyed by renewed Champions League access, so, while positive, rises of 18% and 72% in pre-transfer revenue and EBITDA, respectively, should be seen against a weak Europa League comparative (H116 pre-transfer EBITDA down 59% y-o-y). Aside from the Champions League broadcasting boost, revenue was broadly flat in advertising, merchandising and match operations, reflecting in part fewer home UEFA games. Labour costs from the renewed squad were up 18% in the period, slightly higher than we expected.
To read the entire report please click on the pdf file below