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Last close As at 24/04/2023
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EUR450m
Research: Consumer
Borussia Dortmund’s Q221 trading update showed higher profitability year-on-year due to active cost control despite lower revenue in aggregate as a result of COVID-19, and noting that the majority of revenue sources increased. Our recent Outlook note highlighted the attractive financial characteristics of Borussia Dortmund’s business, in isolation and versus its peers, in ‘normal’ times. Therefore, the company should be a prime beneficiary of life returning to normal, with improving momentum in revenue and profitability, subject to sporting results. Our asset-based valuation indicates upside of 144% from the current share price to €12.55.
Borussia Dortmund |
Passing the financial fitness test |
Q221 trading update |
Travel & leisure |
10 February 2021 |
Share price performance
Business description
Next events
Analysts
Borussia Dortmund is a research client of Edison Investment Research Limited |
Borussia Dortmund’s Q221 trading update showed higher profitability year-on-year due to active cost control despite lower revenue in aggregate as a result of COVID-19, and noting that the majority of revenue sources increased. Our recent Outlook note highlighted the attractive financial characteristics of Borussia Dortmund’s business, in isolation and versus its peers, in ‘normal’ times. Therefore, the company should be a prime beneficiary of life returning to normal, with improving momentum in revenue and profitability, subject to sporting results. Our asset-based valuation indicates upside of 144% from the current share price to €12.55.
Year end |
Revenue |
EBITDA |
PBT* |
EPS* |
P/E |
EV/EBITDA (x) |
06/19 |
370.3 |
116.0 |
101.5 |
0.88 |
5.8 |
4.9 |
06/20 |
370.2 |
63.0 |
45.6 |
0.47 |
11.0 |
9.0 |
06/21e |
331.5 |
39.5 |
22.9 |
0.25 |
20.6 |
14.4 |
06/22e |
346.6 |
60.8 |
43.8 |
0.43 |
12.0 |
9.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.
Q221: Improved profit despite lower revenue
The Q221 revenue decline of 3% y-o-y to €120.9m was a significant improvement from Q121’s decline of 50%, as three of Borussia Dortmund’s five sources of revenue increased year-on-year despite the ongoing challenges caused by COVID-19. This highlights the long-term resilience/growth dynamics of the majority of the revenue base. Coupled with a c 13% reduction in cash operating costs, EBITDA for Q221 of €36.6m was an impressive c 23% higher than the prior year. Lower taxes led to a threefold improvement in profit after tax to c €9.5m. The team’s current sixth position in the Bundesliga requires an improvement in on-the pitch results for the rest of the season to ensure qualification for the Champions League in FY22.
Forecasts: No change ahead of Q221 results
Our profit forecasts for FY21 and FY22 are broadly unchanged and will be reviewed further on publication of full financial results for the period. The strong cost control in H121 leads us to assume lower personnel and other operating expenses for FY21 than previously. These are offset by lowering forecasts for revenue from Match Operations as fans are less likely to attend games this season due to COVID-19 than we previously anticipated, and lower net transfer income to reflect the financial uncertainty facing all football clubs.
Valuation: SOTP supports €12.55/share
Our asset-based sum-of-the-parts (SOTP) valuation of €12.55/share points to 144% upside from the current share price of €5.14. The valuation includes the unrealised value in the playing squad and the brand, each of which have an estimated valuation greater than the current share price. The EV/sales multiple for FY21e of 1.7x is broadly in line with the long-run average since FY05 despite the depressed revenues and higher financial gearing, indicating potential for strong share price performance on a recovery in revenue and profitability post COVID-19.
Q221 results: Strong profit delivery
Borussia Dortmund’s Q221 headline results indicated a marked improvement in profitability due to a combination of a sequential quarter-on-quarter improvement in revenue, despite the ongoing disruption from COVID-19 that continues to negatively affect a number of sources of revenue, as well as impressive management of the cost base where possible.
Revenue declined by c 3% to €120.9m, EBITDA increased by c 23% to €36.6m, and profit after tax increased by more than threefold to €9.5m. Please note that the headline numbers for Q221 and H121 are reported to one decimal place, ie €x.xm, therefore numbers below may vary slightly versus the company’s news release due to rounding. Full financial statements for Q221 will be published on 26 February 2021.
Revenue: Sequential improvement from Q121
The revenue decline of c 3% in Q221 was a significant improvement on the decline of 50% reported for Q121, which featured fewer games than is typical in the first quarter of a financial year as the start of the German football season was delayed due to COVID-19. The revenue of €120.9m was more than double Q121’s €56.5m.
Exhibit 1: Borussia Dortmund’s revenue
€m |
Q120 |
Q220 |
H120 |
Q121 |
Q221 |
H121 |
Match Operations |
8.6 |
14.0 |
22.6 |
0.2 |
0.4 |
0.6 |
Advertising |
24.1 |
26.4 |
50.5 |
22.4 |
29.9 |
52.3 |
TV Marketing |
51.2 |
61.9 |
113.1 |
23.1 |
75.6 |
98.7 |
Merchandising |
9.0 |
12.1 |
21.2 |
8.2 |
12.3 |
20.5 |
Conference, Catering & Miscellaneous |
19.4 |
9.7 |
29.2 |
2.5 |
2.8 |
5.3 |
Total revenue |
112.4 |
124.2 |
236.6 |
56.5 |
120.9 |
177.4 |
Growth y-o-y% |
||||||
Match Operations |
(19%) |
(16%) |
(17%) |
(97%) |
(97%) |
(97%) |
Advertising |
14% |
4% |
9% |
(7%) |
13% |
3% |
TV Marketing |
9% |
6% |
7% |
(55%) |
22% |
(13%) |
Merchandising |
38% |
4% |
17% |
(9%) |
1% |
(3%) |
Conference, Catering & Miscellaneous |
236% |
(7%) |
79% |
(87%) |
(72%) |
(82%) |
Total revenue |
23% |
1% |
11% |
(50%) |
(3%) |
(25%) |
Net transfer income |
10.3 |
0.9 |
11.2 |
5.2 |
(0.7) |
4.5 |
o/w Gross transfer fees |
62.8 |
(2.0) |
60.8 |
9.0 |
3.9 |
12.9 |
Source: Borussia Dortmund data
It is notable that three of the company’s five sources of revenue grew year-on-year, including Borussia Dortmund’s two largest revenue streams, Advertising and TV Marketing, which operate with multi-year commitments with partners and rights holders, and represented 71% of group revenue before COVID-19. Advertising increased by 13% y-o-y to €29.9m due to the addition of a new sponsor; TV Marketing increased by 22% to €75.6m due to the phasing of Bundesliga and Champions League; and Merchandising increased by c 1% to €12.3m. Conversely, Match Operations and Conference, Catering & Miscellaneous declined by c 97% and 72% as fan attendance at the stadium was only partially and temporarily permitted during the period given national lockdowns and other restrictions.
As well as lower revenues from a lack of fans at games, the uncertainty created by COVID-19 for the rest of the industry is evidenced by the lower gross transfer fees of €12.9m for H121 compared with the prior year’s €60.8m.
Profitability: Active cost control leads to higher profit
It is not unusual for Borussia Dortmund to report volatility in its profitability in the different financial quarters given, mainly the phasing and number of homes games and the level of transfer activity. However, its EBITDA of €36.6m in Q221 and €27.3m in H121 is notable given the lower revenue in a very difficult operating environment. Specifically, for Q221, its EBITDA of €36.6m was higher than Q220’s €29.7m despite generating c €3.3m less revenue than the prior year. Further, for H121 the company’s revenue declined by c €59.2m y-o-y, but its EBITDA declined by only €27.4m.
Exhibit 2: Costs and profitability
€m |
Q120 |
Q220 |
H120 |
Q121 |
Q221 |
H121 |
Personnel expenses |
(55.5) |
(55.9) |
(111.5) |
(48.4) |
(53.9) |
(102.3) |
% of revenue |
49.4% |
45.0% |
47.1% |
85.5% |
44.6% |
57.7% |
Other operating expenses |
(37.3) |
(33.4) |
(70.6) |
(19.6) |
(23.6) |
(43.2) |
% of revenue |
33.2% |
26.9% |
29.9% |
34.6% |
19.6% |
24.4% |
EBITDA |
25.0 |
29.7 |
54.7 |
(9.3) |
36.6 |
27.3 |
Margin |
22.2% |
23.9% |
23.1% |
(16.4%) |
30.3% |
15.4% |
Depreciation and amortisation |
(25.7) |
(23.6) |
(49.3) |
(26.5) |
(26.3) |
(52.8) |
% of revenue |
22.9% |
19.0% |
20.8% |
46.9% |
21.8% |
29.8% |
Profit before tax |
(1.5) |
6.0 |
4.5 |
(36.0) |
9.8 |
(26.2) |
Profit after tax |
0.0 |
2.9 |
3.0 |
(35.8) |
9.5 |
(26.3) |
Source: Borussia Dortmund data
In descending order of contribution to the improvement in Borussia Dortmund’s EBITDA in Q221, other operating expenses fell by c 29% y-o-y to €23.6m, and the less-flexible personnel expenses declined by c 4% to €53.9m. Below EBITDA, the 12% increase in depreciation and amortisation, mostly the non-cash amortisation of the book value of player registrations, offset some of the cash cost savings, and lower taxes of c €200k (versus c €3.0m in Q220) ensured that Borussia Dortmund reported a higher absolute profit after tax of €9.5m (€2.9m in Q220).
Forecasts: FY21 and FY22 profit unchanged
Our profit forecasts for FY21 and FY22 are unchanged ahead of the full financial release of Q221 results on 26 February 2021. However, we make some changes to assumptions for key revenue and cost line items of the income statement following the trading update. Given the strong cost control in H121 we now assume lower personnel expenses and other operating expenses than previously, which add a combined €28m to our prior EBITDA forecast. These are offset by lower revenue from match operations as fans are less likely to attend games this season than we previously anticipated, and lower net transfer income to reflect the financial uncertainty facing all football clubs.
Valuation: SOTP suggests 144% upside
We typically value Borussia Dortmund using an asset-backed SOTP valuation that takes into account the unrealised value of the squad and the brand. Our €12.55 valuation represents a premium of 144% to the current share price of €5.14.
Exhibit 3: Sum-of-the-parts valuation
€m |
Per share (€) |
Comments |
|
Value of squad |
564.1 |
6.13 |
Per Transfermarkt.com less discount of 8.3% |
Brand value |
494.1 |
5.37 |
Brand Finance (May 2018) $587m plus premium of 1% |
Stadium |
190.2 |
2.07 |
Net book value at 30 September 2020 |
Enterprise value |
1,248.4 |
13.57 |
|
Net cash/ (debt) |
(94.1) |
(1.02) |
At 30 September 2020 |
Equity value |
1,154.3 |
12.55 |
|
Shares (m) |
92.0 |
||
Current share price |
5.14 |
||
Premium to current share price |
144% |
Source: Edison Investment Research
The current value of the first team squad according to Transfermarkt.com is €615.2m, a premium of 169% to the balance sheet valuation of €228.3m at the end of June 2020. To this we now apply a discount of 8.3% reflecting the average transfer costs as a percentage of gross transfer fees since the change in accounting for transfer activity in FY20. The valuation of players is subjective and vulnerable to changes in the financial positions of other clubs, but we also highlight that it includes no value for players in the wider footballing squad including the youth team. Management’s long-term record in realising gains on player disposals provides comfort that the squad’s market value is at a premium to book value. The book value of the squad is equivalent to €2.48/share, and the unrealised gain of €335.8m represents €3.65/share.
The last quoted valuation of the Borussia Dortmund brand by Brand Finance of US$587m is from May 2018, equivalent to €489m at the current exchange rate of US$1.20/€. The valuation is more than two years old. As the valuation of brands is outside our field of expertise, we use the change in share prices of the four largest quoted peers (sports franchises and general sports entertainment) since the end of May 2018 as a proxy for the change in Borussia Dortmund’s brand, and adjust it accordingly.
Exhibit 4: Share price performance of peers
Currency |
Market value (m) |
Share price 31 May 2018 |
Share price 8 February 2021 |
Change (%) |
|||||
Manchester United |
US$ |
2,612 |
20.95 |
16.03 |
(23) |
||||
Juventus |
€ |
1,064 |
0.54 |
0.81 |
50 |
||||
Olympique Lyonnais |
€ |
115 |
3.07 |
2.00 |
(35) |
||||
Ajax |
€ |
286 |
12.05 |
15.72 |
30 |
||||
Average of football clubs |
6 |
||||||||
Madison Square Garden |
US$ |
4,246 |
186.86 |
176.08 |
(6) |
||||
World Wrestling Entertainment |
US$ |
3,832 |
57.89 |
49.23 |
(15) |
||||
Average of other sports/ entertainment |
(10) |
||||||||
Average of four largest companies |
1 |
Source: Refinitiv. Note: Priced 8 February 2021.
The share prices of the four largest peers have increased on average by 1% since May 2018, albeit with a wide range of changes. Therefore we inflate Borussia Dortmund’s May 2018 brand valuation by 1% to arrive at a current valuation of €494.1m or €5.37/share.
The current share price of €5.14 is lower than the individual valuations of the playing squad (€6.13/share) and the brand (€5.37/share).
Borussia Dortmund’s long-term valuation
For FY21 and FY22, Borussia Dortmund’s EV/sales multiples are broadly in line with the long-term average of 1.6x since FY05, despite revenue being depressed by the effects of COVID-19, highlighting good scope for share price appreciation on a return to revenue growth post COVID-19. The higher EV/EBITDA multiples of 14.4x and 9.3x represent the near-term COVID-19-depressed profitability.
Exhibit 5: Borussia Dortmund’s EV/sales multiple |
Exhibit 6: Borussia Dortmund’s EV/EBITDA multiple |
Source: Refinitiv, company accounts |
Source: Refinitiv, company accounts |
Exhibit 5: Borussia Dortmund’s EV/sales multiple |
Source: Refinitiv, company accounts |
Exhibit 6: Borussia Dortmund’s EV/EBITDA multiple |
Source: Refinitiv, company accounts |
Exhibit 7: Financial summary
€'k |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021e |
2022e |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||||
Revenue |
|
|
256,280 |
263,601 |
281,261 |
328,375 |
313,310 |
370,256 |
370,196 |
331,475 |
346,606 |
Cost of Sales |
(15,857) |
(8,237) |
69,322 |
51,388 |
202,639 |
(21,273) |
(22,392) |
(17,066) |
(19,384) |
||
Gross Profit |
240,423 |
255,364 |
350,583 |
379,763 |
515,949 |
348,983 |
347,804 |
314,408 |
327,222 |
||
EBITDA |
|
|
49,132 |
55,594 |
86,668 |
74,073 |
137,306 |
115,983 |
62,992 |
39,446 |
60,801 |
Normalised operating profit |
|
|
40,976 |
46,025 |
75,798 |
62,597 |
126,150 |
103,160 |
49,050 |
25,152 |
46,326 |
Amortisation of acquired intangibles |
(22,523) |
(32,865) |
(31,899) |
(51,939) |
(66,814) |
(65,850) |
(88,285) |
(94,972) |
(107,072) |
||
Exceptionals |
0 |
0 |
(7,469) |
0 |
(20,362) |
(13,809) |
(3,903) |
0 |
0 |
||
Reported operating profit |
18,453 |
13,160 |
36,430 |
10,658 |
38,974 |
23,501 |
(43,138) |
(69,820) |
(60,746) |
||
Net Interest |
(3,889) |
(7,159) |
(2,104) |
(1,567) |
(4,336) |
(1,705) |
(3,444) |
(2,233) |
(2,483) |
||
Joint ventures & associates (post tax) |
27 |
0 |
8 |
28 |
13 |
13 |
(1) |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
37,114 |
38,866 |
73,702 |
61,058 |
121,827 |
101,468 |
45,605 |
22,918 |
43,843 |
Profit Before Tax (reported) |
|
|
14,591 |
6,001 |
34,334 |
9,119 |
34,651 |
21,809 |
(46,583) |
(72,053) |
(63,229) |
Reported tax |
(2,621) |
(469) |
(4,898) |
(910) |
(2,946) |
(4,418) |
2,630 |
0 |
(4,384) |
||
Profit After Tax (norm) |
30,447 |
35,828 |
63,188 |
54,965 |
111,469 |
80,913 |
43,030 |
22,918 |
39,458 |
||
Profit After Tax (reported) |
11,970 |
5,532 |
29,436 |
8,209 |
31,705 |
17,391 |
(43,953) |
(72,053) |
(67,613) |
||
Minority interests |
(310) |
(281) |
(245) |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
30,137 |
35,547 |
62,943 |
54,965 |
111,469 |
80,913 |
43,030 |
22,918 |
39,458 |
||
Net income (reported) |
11,660 |
5,251 |
29,191 |
8,209 |
31,705 |
17,391 |
(43,953) |
(72,053) |
(67,613) |
||
Average number of shares outstanding (m) |
61.4 |
92.0 |
92.0 |
92.0 |
92.0 |
92.0 |
92.0 |
92.0 |
92.0 |
||
EPS - normalised (c) |
|
|
49.06 |
38.64 |
68.42 |
59.74 |
121.16 |
87.95 |
46.77 |
24.91 |
42.89 |
EPS - diluted normalised (€) |
|
|
0.49 |
0.39 |
0.68 |
0.60 |
1.21 |
0.88 |
0.47 |
0.25 |
0.43 |
EPS - basic reported (€) |
|
|
0.19 |
0.06 |
0.32 |
0.09 |
0.34 |
0.19 |
(0.48) |
(0.78) |
(0.73) |
Dividend (€) |
0.10 |
0.05 |
0.06 |
0.06 |
0.06 |
0.06 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
1.1 |
2.9 |
6.7 |
16.8 |
(-4.6) |
18.2 |
(-0.0) |
(-10.5) |
4.6 |
||
Gross Margin (%) |
93.8 |
96.9 |
124.6 |
115.6 |
164.7 |
94.3 |
94.0 |
94.9 |
94.4 |
||
EBITDA Margin (%) |
19.2 |
21.1 |
30.8 |
22.6 |
43.8 |
31.3 |
17.0 |
11.9 |
17.5 |
||
Normalised Operating Margin |
16.0 |
17.5 |
26.9 |
19.1 |
40.3 |
27.9 |
13.2 |
7.6 |
13.4 |
||
BALANCE SHEET |
|||||||||||
Fixed Assets |
|
|
249,492 |
289,509 |
302,765 |
354,858 |
351,405 |
371,715 |
441,455 |
390,189 |
329,642 |
Intangible Assets |
61,602 |
96,340 |
65,278 |
141,521 |
120,342 |
163,710 |
229,667 |
189,695 |
137,624 |
||
Tangible Assets |
184,502 |
189,518 |
188,423 |
184,664 |
180,693 |
184,001 |
193,037 |
181,742 |
173,267 |
||
Investments & other |
3,388 |
3,651 |
49,064 |
28,673 |
50,370 |
24,004 |
18,751 |
18,751 |
18,751 |
||
Current Assets |
|
|
42,803 |
97,030 |
121,780 |
123,739 |
134,207 |
128,356 |
76,512 |
67,769 |
69,961 |
Stocks |
5,921 |
9,376 |
10,158 |
8,978 |
5,588 |
4,569 |
6,754 |
5,148 |
5,847 |
||
Debtors |
14,923 |
29,680 |
51,072 |
48,776 |
22,981 |
30,061 |
36,520 |
32,700 |
34,193 |
||
Cash & cash equivalents |
17,852 |
53,739 |
51,722 |
49,297 |
59,464 |
55,865 |
3,317 |
0 |
0 |
||
Other |
4,107 |
4,235 |
8,828 |
16,688 |
46,174 |
37,861 |
29,921 |
29,921 |
29,921 |
||
Current Liabilities |
|
|
(71,014) |
(61,627) |
(78,811) |
(140,912) |
(119,026) |
(125,388) |
(122,609) |
(134,652) |
(143,911) |
Creditors |
(59,927) |
(58,327) |
(69,587) |
(128,707) |
(113,949) |
(119,779) |
(110,188) |
(86,173) |
(86,889) |
||
Tax and social security |
(571) |
(803) |
(5,212) |
(732) |
(1,962) |
(811) |
(40) |
(40) |
(40) |
||
Short term borrowings |
(8,889) |
0 |
0 |
0 |
0 |
0 |
(8,031) |
(44,090) |
(52,632) |
||
Finance leases |
(1,627) |
(2,497) |
(2,640) |
(10,295) |
(1,969) |
(3,127) |
(4,350) |
(4,350) |
(4,350) |
||
Other |
0 |
0 |
(1,372) |
(1,178) |
(1,146) |
(1,671) |
0 |
0 |
0 |
||
Long Term Liabilities |
|
|
(76,032) |
(38,834) |
(36,192) |
(25,383) |
(23,001) |
(19,764) |
(89,911) |
(89,911) |
(89,911) |
Long term borrowings |
(32,139) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Finance leases |
(20,142) |
(21,630) |
(18,990) |
(8,695) |
(6,726) |
(8,381) |
(20,054) |
(20,054) |
(20,054) |
||
Other long term liabilities |
(23,751) |
(17,204) |
(17,202) |
(16,688) |
(16,275) |
(11,383) |
(69,857) |
(69,857) |
(69,857) |
||
Net Assets |
|
|
145,249 |
286,078 |
309,542 |
312,302 |
343,585 |
354,919 |
305,447 |
233,394 |
165,781 |
Minority interests |
(334) |
(305) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
144,915 |
285,773 |
309,542 |
312,302 |
343,585 |
354,919 |
305,447 |
233,394 |
165,781 |
CASH FLOW |
|||||||||||
Op Cash Flow before WC and tax |
45,270 |
48,435 |
84,572 |
72,534 |
132,983 |
111,914 |
59,547 |
37,213 |
58,318 |
||
Working capital |
(6,672) |
(20,851) |
29,052 |
31,488 |
(9,402) |
5,673 |
(18,011) |
(18,589) |
(1,476) |
||
Exceptional & other |
(4,649) |
(3,193) |
(76,641) |
13,868 |
52,171 |
(84,587) |
(38,877) |
(13,767) |
(47,517) |
||
Tax |
(3,879) |
(200) |
(320) |
(5,476) |
(1,723) |
(2,834) |
305 |
0 |
(4,384) |
||
Operating cash flow |
|
|
30,070 |
24,191 |
36,663 |
112,414 |
174,029 |
30,166 |
2,964 |
4,857 |
4,941 |
Capex |
(10,923) |
(10,399) |
(9,442) |
(8,139) |
(7,195) |
(9,872) |
(6,143) |
(3,000) |
(6,000) |
||
Net investment in intangibles |
2,058 |
(61,682) |
(20,038) |
(96,526) |
(135,556) |
(13,643) |
(44,646) |
(39,000) |
(5,000) |
||
Acquisitions/disposals |
0 |
0 |
(500) |
(45) |
0 |
0 |
0 |
0 |
0 |
||
Net interest |
(3,644) |
(7,244) |
(1,435) |
(2,002) |
(3,668) |
(1,456) |
(3,326) |
(2,233) |
(2,483) |
||
Equity financing |
5 |
140,708 |
1 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Dividends |
(6,523) |
(6,451) |
(5,124) |
(5,519) |
(5,519) |
(5,519) |
(5,519) |
0 |
0 |
||
Other |
(5,727) |
(43,236) |
(2,142) |
(2,608) |
(11,924) |
(3,275) |
4,122 |
10,000 |
0 |
||
Net Cash Flow |
5,316 |
35,887 |
(2,017) |
(2,425) |
10,167 |
(3,599) |
(52,548) |
(29,376) |
(8,542) |
||
Opening net debt/(cash) |
|
|
53,932 |
44,945 |
(29,612) |
(30,092) |
(30,307) |
(50,769) |
(44,357) |
29,118 |
68,494 |
Other non-cash movements |
3,671 |
38,670 |
2,497 |
2,640 |
10,295 |
(2,813) |
(20,927) |
(10,000) |
0 |
||
Closing net debt/(cash) |
|
|
44,945 |
(29,612) |
(30,092) |
(30,307) |
(50,769) |
(44,357) |
29,118 |
68,494 |
77,036 |
Source: Company accounts, Edison Investment Research
|
|
Research: Industrials
Mytilineos’s FY20 results not only demonstrate that its strategy is resilient and capable of withstanding headwinds from the ongoing pandemic, but also provide a platform for solid performance in 2021. FY20 EBITDA increased by 1% vs FY19 to €315m, despite H120 EBITDA being down 17% vs H119. Improvement in margins in the Power & Gas and Metallurgy divisions were key reasons for the H2 turnaround. The company has significant financial flexibility, with total liquidity of €1.3bn. Following an early bond repayment of €300m, it has a strong credit profile and no significant maturities until end 2024. Strong maturing pipelines of renewables (0.6GW own + €0.6bn third party) and sustainable engineering (>€1.5bn) projects should assist a turnaround in these businesses.
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