Original-Research: Borussia Dortmund GmbH & Co KGaA (von NuWays AG): BUY

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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: BUY

from: 18.03.2024

Target price: 5.50

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Philipp Sennewald

RS feedback: New formats offering upside / chg.

Last week, we hosted a digital roadshow with BVB CFO Thomas Treß, which

underpinned our view that the club is set to benefit from several

structural changes going forward. The main takeaways:

Bundesliga broadcasting rights: In Q2, the German Football League (DFL) is

starting to market the media rights for the 4-year period starting with the

season 2025/26. While the current 4-year deal has a total value of EUR 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 "No-Single-Buyer-Rule" is set to intensify the bidding

contest. Hence, we do not expect a decrease and conservatively forecast the

deal volume to remain on the same level as in the current period.

New UCL. Although UEFA did not disclose final details on the prize money

distribution for the new UCL format, earnings should increase by at least

20% compared to the current format given success in the competition. Yet,

as the share of performance-based premiums will increase by 7.5pp to 37.5%,

the delta is seen to increase, depending on a teams progresses in the

tournament. Moreover, the CWC (click here for more detail) is seen to

provide a liquidity boost in 2025, which is not yet reflected in our model

as no detailed information were released yet by FIFA.

Sponsorship upside. While TV marketing or transfer sales are subject to a

certain volatility based on sporting success and talent development, sales

in the sponsoring segment are seen to deliver stable growth going forward.

Both, the expiry of the Evonik and 1&1 contracts next year as well as the

CWC and the associated new sponsorship opportunities in the US are seen to

provide upside in the coming years, in our view.

Besides that, BVB reached the quarterfinals of the UCL after beating

Eindhoven last week. As this resulted in EUR 10.6m additional premium

payments, BVB consequently lifted its net profit guidance range by EUR 10m,

which we continue to consider as conservative, given the strong H1. BVB

will now face Atletico Madrid in the quarterfinals. While we rate this as a

50/50 fixture, we conservatively do not model the EUR 12.5m in premiums BVB

would receive if advancing to the semifinals.

BVB shares continue to trade on attractive levels of 0.9x EV/Sales,

significantly below the peer average of 3.9x. The stock hence remains a BUY

with an unchanged PT of EUR 5.50 based on DCF.

You can download the research here:

http://www.more-ir.de/d/29175.pdf

For additional information visit our website

www.nuways-ag.com/research.

Contact for questions

Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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The result of this research does not constitute investment advice

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