Borussia Dortmund: Tough Going And Off The Pitch
Edison | Jun 11, 2018 07:02AM ET
While uncertainty about a head coach and Champions League qualification has been satisfactorily resolved, there is no denying the challenge for Borussia Dortmund (DE:BVB) in making a fresh start after its most difficult season since near-bankruptcy. Without pre-empting new coach Favre, who takes over in July, radical change in the squad make-up and size has already been indicated by management. Likely enhanced transfer activity should therefore support our FY19 EBITDA forecast despite lower pre-transfer income expectations (still up 11%) on greater clarity of Champions League payout. However, for the current year no such transfer offset is assumed (admittedly cautious), hence our 13% EBITDA downgrade.
Q3: Tough going on and off the pitch
After the early Christmas gift of immediate wins under coach Stöger, the quarter to March saw renewed stability flatter to deceive, culminating in a bumpy Europa League run and a 6-0 “thrashing” by Bayern. This was reflected in flat pre-transfer revenue, despite two more home matches (eight against six). Broadcasting was redeemed by the new deal on domestic TV marketing, which made up for no Champions League and DFB Cup. While advertising was again encouraging (up 8%), marked by new Champion Partners, there was a further fall in merchandising (down 17%). By contrast, a resurgent EBITDA (€44.6m vs €0.7m) was testament to Dortmund’s sustained ability to generate high levels of transfer income (€73m, notably from the sale of Aubameyang to Arsenal).
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