Edison Investment Research Limited
London, UK, 2 November 2021
Borussia Dortmund (BVB): The roar of the fans
Borussia Dortmund has an established track record as one of the most successful football clubs in Europe. This enables it to exploit structural tailwinds, increasing global and multi-media coverage, to drive long-term revenue growth. FY21 was a challenging year financially due to the negative effects of COVID-19 related restrictions, but the team was relatively successful including winning major silverware and guaranteed participation in the financially lucrative Champions League in FY22. The phased return of fans to the stadium through FY22 should lead to better financial results. The share price weakness has led to it trading at recent low multiples and well below our sum-of-the-parts valuation of €11.56/share.
The share price has been weak due to uncertainties around the effects of COVID-19 restrictions and the recent equity raise. This has resulted in the share price trading at an FY22e EV/sales of 1.4x, which is below its long-term average of 1.6x, and a little above its own recent low multiples (1.0-1.3x). It continues to trade at a significant discount of 59% to our asset-backed sum-of-the-parts of €11.56/share.
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