Topic: Last week bet-at-home reported a strong set of preliminary Q2 figures above our estimates on both, top and bottom line. In detail:

Sales came in at € 13.7m (17% qoq, 25% yoy), significantly above our estimates of € 12.7m (eNuW), mainly driven by tailwinds from the UEFA EURO championship as well as higher marketing spending between Q3´23 and Q2´24, that prepared the UEFA EURO championship on the one hand, but also supported the general new customer acquisition and reactivation of existing, but inactive customers.

EBITDA before special items of € 1.0m was below previous year´s figure of € 4.3m but above Q1 (€ 0.2m) and our estimates (eNuW: € 0.3m). Key drivers were lower than anticipated personnel expenses (€ 2.2m vs eNuW: € 2.3m), marketing expenses (€ 5.8m vs eNuW: € 6.1m) and lower other operating expenses of € 2.5m (vs eNuW: € 3.0m).

With Q2 in the books, bet-at-home seems fully on track to reach the upper end of its FY24 guidance of € 45-53m in sales and € -1m to € 2.5m in EBITDA before special items. Despite the fact, that we expect further positive effects from the UEFA EURO championship and the high marketing spendings of the last quarters that should fuel topline in Q3 and Q4, paired with stable OPEX, our estimates remained unchanged for now at € 49.8m in sales and € 1.4m in EBITDA before special items.

More tailwinds should come from a potential positive ECJ ruling, after the Federal Court of Justice in Germany has recently appealed the European Court of Justice in a legal dispute over the reimbursement of losses between 2013-18 from unauthorized sports betting. With a likely ruling of the ECJ in favor of the betting providers, the current customer claims against bet-at-home and – even more importantly – the looming risks of new customer claims would be off the table, together with related lifted legal costs. As a result, risks and legal costs would normalize again, and provisions released. All that would bode well for (reported) EBITDA. Mind you that we have not yet modeled in potential positive effects from the expected ruling of the ECJ, as it is still uncertain.

As the operating performance of bet-at-home is developing nicely and all sources of risks, that burdened the case for a long time, are seen to vanish, we reiterate BUY with an unchanged (but conservative) PT of € 5.50 based on FCFY´25e.