Original-Research: Borussia Dortmund - from NuWays AG

Classification of NuWays AG to Borussia Dortmund

Company Name: Borussia Dortmund
ISIN: DE0005493092

Reason for the research: Update
Recommendation: Kaufen
from: 03.04.2024
Target price: EUR 5.50
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Philipp Sennewald

A big step towards UCL 24/25 as UEFA discloses prize money

On Saturday BVB ended a long drought as the team won away at Bayern Munich (2-0) for the first time in ten years. Moreover, as Leipzig did not manage to beat Mainz (1-1), BVB extended the gap to 5th place to three points. Although 5th place might be sufficient to qualify for the 24/25 UCL in the unlikely event of Germany finishing 2nd in the UEFA club coefficient, finishing 4th is the safe way to go as it guarantees a spot in the highly lucrative competition.

Mind you, that the upcoming UCL season will be played in a new format with the total number of games rising from 125 to 189 and consequently an increased prize money pool of € 2.5bn (+25%). In fact, UEFA recently put out a circular letter explaining the exact distribution of the prize money to the participants, which will be divided into three different pillars. In detail:

€ 670m will be allocated to equal shares, leading to a starting fee of € 18.6m (old format: € 15.6m).

€ 914m will be distributed according to individual club performance which is based on group stage performance as well as knock-out stage progress (e.g. € 11m for round of 16 qualification).

€ 853m will be distributed according to the 'value pillar', a combination of the former market pool (based on value of country specific TV market) and coefficient (10-year coefficient rank) pillars.

More detail on the performance and value pillars is provided in the graphic on the second page.

Given our base scenario for the next season, in which the club reaches the round of 16 via the newly implemented knockout round play-offs, BVB will earn € 79.4m in TV marketing revenues from the newly formatted UCL. This is 17% more compared to our base case for the old format. Should BVB reach the quarter-finals like in this season, respective revenues would amount to € 91.9m (eNuW). Mind you, this does not include additional revenues from match operations thanks to two extra home games (group stage + play-offs). Moreover, additional TV marketing sales come at de facto no extra cost, thus driving profitability going forward. Against the backdrop as well as the continuously undemanding valuation (0.9 EV/sales 23/24e vs peer trading at 3.9x), the stock remains a BUY with an unchanged PT of € 5.50 based on DCF.

You can download the research here:
http://www.more-ir.de/d/29293.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
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