Borussia Dortmund GmbH & Co KGaA (SIX:BVB): Immediate back-to-back Bundesliga wins under new coach Peter Stöger is at least a welcome change of fortune for beleaguered Dortmund. Now the winter break allows for renewed stability and the return of key players. The team remains very much in the mix for UEFA competition next season, while a deep run in the current Europa League may significantly make up for a premature Champions League exit, as evident in our newly-introduced minor downgrades. Recent Q1 results show the success of Dortmund’s transfer policy, which is generating substantial hidden reserves in player values. Quarterly EBITDA of €81.4m, driven by the remarkable sale of Dembélé to Barcelona, provides ample scope for reinvestment and alone all but guarantees a record outturn this year.
Après Champions League, pas de déluge!
Despite disappointment at Dortmund’s recent dip in form, the financial implications may not be significant, assuming progress in the Europa League (we look for round of 16) and top-four qualification for next season’s Champions League (currently third in Bundesliga, albeit in a very tight race). As detailed on page 2, the reduction now in our FY18 gross EBITDA forecast is just €4m (from €102m to €98m) on €5m lower pre-transfer revenue, primarily broadcasting. The projected halving of EBITDA for the rest of this period reasonably reflects a near double-digit rise in costs on flat revenue. Risk to all this is epitomised by a new coach, whose contract is only to the season end, but so far, so good. A win against Bayern in the imminent DFB Cup tie would be an unexpected bonus to our numbers.
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