Topic: Yesterday, bet-at-home reported solid FY23 prelims and released a new guidance for FY24, which is in line with estimates. In detail:

Sales came in at € 46.2m (-14% yoy), slightly below our estimates of € 47.4m, mainly due to lower betting GGR of € 42.3m (-14% vs eNuW: € 44.5m) that was partially compensated by Gaming GGR that stand, at € 3.8m (-14% yoy vs eNuW: € 2.9m). but Still, sales met the management guidance of € 44-48m exactly at mid-point.

EBITDA of € 0.8m (vs € 2.1m in FY22) was in line with expectations (eNuW: € 0.7m): While personnel expenses declined as expected by 36% to € 8.7m (eNuW: € 8.8m), other operating expenses of € 12.6m (-22% yoy) came in even below our estimates (eNuW: € 14.2m), thanks to declining legal expenses and efficiency measures (i.e. streamlining of operations, cost-cutting) that bear fruit, compensating for higher marketing expenses of € 17.0m (25% yoy vs eNuW: € 15.4m). Importantly, bet-at-home introduced the new KPI EBITDA before special items (customer claims, liquidation of the Entertainment) in order to show the undiluted operating performance that stand at € 2.4m (vs € 4.4m in FY22).

With a solid transition year in the books, we expect tailwinds from the implemented efficiency measures and from the outsourcing and streamlining of processes that should show its full effect in FY24. Further, higher marketing spending in Q3/Q4´23 should materialize in H1´24, paving the way to a successful UEFA EURO championship. bet-at-home should hence easily reach its FY24 sales guidance of € 45-53m (eNuW: € 50m) and its EBITDA guidance before special items of -1m to € 2.5m.

Still, the risks associated with the liquidation process of the Entertainment Ldt. and provisions for current and potential new customer claims are for now limiting the share's upside. Positively, we assume that only a small portion of the receivables against the Entertainment Ldt. are at risk and that customer claims should have stabilized. That said and taken into account a worst-case scenario, the EV should be still clearly negative, despite a sustainably profitable operating business. Unfortunately, both topics should weigh on the case throughout FY24.  

In order to reflect the small but incalculable risk from customer claims, we reiterate HOLD but increase our PT to € 5.50 (old: € 3.80) rolling over valuation to FCFY´24e.