After two transition years that were characterized by risks associated with the liquidation of the Entertainment Ldt. as well as customer claims in Austria and Germany on the one hand and restructuring and stabilizing the remaining business on the other hand, we see good chances that we have seen the trough in the stock. Here is why:

Risk associated with the liquidation and customer claims are under control. The first claims that have been settled within the second half of 2024 in Austria can be seen as an indicator for the remaining claims, which is why we do not expect further provisions here. The claims in Germany (23 in sum) are more difficult to anticipate. Still, the total value in dispute is only € 1.9m.

Topline growth ahead. After the seasonally weaker Q2 and Q3, we expect a stronger Q4 topline (eNuW: € 12.9m), especially driven by the betting segment. Lower betting margins (eNuW: 10.5%) should have been overcompensated by higher betting volumes (eNuW: € 123m). Further, higher marketing spending in Q3 (eNuW: € 6.2m with lead-times of 3-6 months) should have already started to materialize, thus supporting top-line development from Q4´23e onwards. On top, the upcoming EURO 2024 is expected to fuel sales in Q2 and Q3´24. Overall we expect sales of € 47.4m in FY23 and € 49.8m in FY24.

Improving profitability. On the back of risks that are largely under control, improving topline, the full positive effect of headcount reduction in 2023 and the successful outsourcing and streamlining of operations, we expect bet-at-home to double EBITDA to € 1.5m in FY24.

Favorable macroeconomic trends. Long-term trends such as the shift towards online, the increasing acceptance of betting and gambling and the dry out of the black market in Germany, as a result of the GlüStV are clear growth drivers. Even better, betting and gambling revenues are rather independent from general consumption that is currently under pressure.

For now, we remain cautious, but as soon as the abovementioned trends start to materialize and the risks vanish further, we are set to reevaluate or position on the stock again.

HOLD with an unchanged, PT of € 3.80 based on FCFY´23e.