Bundesliga leaders and unbeaten in their last 13 matches in all competitions, Borussia Dortmund GmbH & Co KGaA (DE:BVB)could not have wished for a stronger start under new head coach, Lucien Favre. Indeed, an impressive win over Atlético Madrid already all but assures qualification for the knockout stages of the Champions League, which is in marked contrast to last season's disappointment. We are therefore confidently maintaining our current-year forecast of robust pre-transfer revenue growth (c 12%), driven by international TV marketing, even if the bumper transfers of Dembélé and Aubameyang make FY18 a hard act to follow. Progress may be more measured in FY20 but subject as ever to surprise from Dortmund’s ability to generate substantial hidden reserves from player transfers.
Q418: Tough comparative
The quarter to June was predictably subdued as a lack of involvement in UEFA and DFB Cup competition, fewer Bundesliga home games (3 vs 5) and a halving of transfer activity drove revenue down by a third. However, domestic TV marketing was a rare bright spot owing to the new broadcasting deal and new Champion Partners buoyed advertising. The impact on profit was at least mitigated by a 12% reduction in bonus-led labour costs and a halving of material costs in line with revenue. Finances remained typically disciplined with net cash €50m at year end.
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