Topic: Yesterday bet-at-home reported a strong set of Q3 figures that are above our estimates on both – top- and bottom line. Further, it increased its EBITDA before special items guidance. In detail:

Sales came in at € 12.2m (-11% qoq, 18% yoy), slightly above our estimates of € 12.0m (eNuW), mainly driven by the UEFA EURO championship that lasted until early Q3 as well as higher marketing spending between Q3´23 and Q2´24, that prepared the UEFA EURO championship. While sales in the betting segment were € 10.7m (12% yoy vs eNuW: € 10.6m), achieved with € 86m betting volume and a 12.5% margin, the gaming segment contributed € 1.5m (103% yoy vs eNuW: € 1.4m), based on € 13m volume and an 11.1% margin.

EBITDA before special items increased to € 1.6m (vs -1.9m in Q3´23 vs eNuW: € 0.6m). Key drivers were higher sales as well as lower than anticipated personnel expenses (€ 2.0m vs eNuW: € 2.3m), marketing expenses (€ 3.5m vs eNuW: € 4.0m) and other operating expenses of € 2.5m (vs eNuW: € 3.0m). Still, due to one-offs such as € 4.8m for the provision for the ruling of the Swiss Federal Supreme Court in the dispute over VAT liability for sports betting which drove up other operating expenses (€ 8.3m vs eNuW: € 2.7m), reported EBITDA amounted to € -2.7m.

With Q3 in the books, bet-at-home is heading towards the upper end of its FY24 guidance of € 45-53m in sales (vs eNuW old: € 49.8m). More importantly and thanks to the strong operating performance in the first nine months, as well as the sound start into Q4, bet-at-home increased its EBITDA before special items guidance to € 1.5-4.5m from € -1m to 2.5m (vs eNuW old: € 1.4m). In light of the strong Q3 figures paired with stable OPEX, we raised our estimates to € 50.2m in sales and € 2.5m in EBITDA before special items.

More tailwinds should come from a potential positive ECJ ruling, expected mid-2025, that would eliminate the looming risks of new customer claims, normalize lifted legal costs again and release provisions.

On the back of the solid operating performance and vanishing sources of risks, that burdened the case for a long time, we reiterate BUY with an unchanged (but conservative) PT of € 5.50 based on FCFY´25e.