DJ Borussia Dortmund (BVB): Another brick in the yellow wall
Edison Investment Research Limited
Borussia Dortmund (BVB): Another brick in the yellow wall
15-Oct-2020 / 08:00 GMT/BST
London, UK, 15 October 2020
Borussia Dortmund (BVB): Another brick in the yellow wall
The 2019/20 season was typically successful from a sporting perspective,
which reaffirmed Borussia Dortmund's position as one of the leading football
teams in Germany and Europe. The coming year is likely to be more
challenging financially due to the operating restrictions necessitated by
COVID-19, but the company is well-placed to deliver a strong recovery in
earnings if restrictions ease, albeit visibility on these is limited. The
valuation reflects the uncertain outlook as it is trading at a significant
(166%) discount to our sum-of the-parts valuation, broadly in-line with
historic sales multiples, and at a discount to its peers.
The share price has been weak since the outbreak of COVID-19. Our
asset-backed valuation of &euro13.03, which takes into account unrealised
value in the playing squad and brand, points to upside of 166% to the
current share price. The share price attributes a lower value to the brand
and the playing squad, which likely reflects the uncertain outlook for
revenue and profitability given the high level of operational leverage. The
EV/sales multiple of 1.4x is in line with the long-run average, and at a
discount to its peers.
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October 15, 2020 03:00 ET (07:00 GMT)
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