Topic: bet-at-home reported Q1 figures broadly in line with estimates. Ramped-up marketing spending burdened bottom line but should fuel topline growth during UEFA EURO championship in Q2/Q3. In detail:

Sales came in at € 11.7m (-12% yoy, 1% qoq), slightly above our estimates of € 11.5m, driven by the Betting GGR of € 10.6m (-13% yoy, 2% qoq vs eNuW: € 10.6m) and Gaming GGR that stood at € 1.1m (4% yoy, -15% qoq vs eNuW: € 0.9m). While gaming volume and gaming margin were higher than expected (€ 11.1m vs eNuW: 10.4m and 9.8% vs eNuW: 8.4%), betting volume and margin were fully in line with estimates.

EBITDA of € 0.7m (-58% yoy; -13% qoq) was broadly in line (eNuW: € 0.8m). Lower than anticipated other operating expenses (€ 2.6m vs eNuW: € 3.0m) compensated for higher marketing spending (€ 4.5m vs eNuW: € 4.1m), while personnel expenses remained rather stable, as anticipated. Undiluted operating performance measured with EBITDA before special items (i.e. non-operating costs in connection with customer claims and the liquidation of the Entertainment) came in at € 0.2m (vs € 2.5m in Q1´23).

Overall, the figures indicate a solid start into the year. Ramped-up marketing spending pave the way for strong growth of betting volumes during the UEFA EURO championship in Q2/Q3, resulting in ramped-up topline (assuming stable betting margins). As we expect marketing spending to remain high throughout Q2, scale effects – also carried by taken efficiency measures, such as outsourcing and streamlining of processes – should not materialize before Q3. Taking all that into account, FY24 sales should end up at € 49.8m and FY24 EBITDA at € 1.4m, both in line with the guidance range of € 45-53m sales and -1m to € 2.5m EBITDA before special items.

While the risks associated with the liquidation process of the Entertainment Ltd. and provisions for current and potential new customer claims in Austria seem to be largely under control, the new uncertainty arising from the indicative decision of The Federal Court of Justice should burden the stock for at least the next six month (eNuW), despite a sustainably profitable operating business and a negative EV.

We hence reiterate HOLD with an unchanged PT to € 5.50 based on FCFY´24e.