Soccer, music and beaches
Borussia Dortmund, CANCOM, UMG, Verallia, Schott Pharma, Siemens Energy, Waga Energy, TUI, Carl Zeiss Meditec and M6
Borussia Dortmund (BVB) Mixed Results but Long-Term Potential Remains
Borussia Dortmund’s latest financials showed what we expected—lower profitability due to a dip in transfer income.
The club’s first-half revenue came in slightly below last year’s numbers, mainly because there wasn’t a blockbuster transfer like the Jude Bellingham sale to Real Madrid. A delayed payout from UEFA Champions League TV rights also played a role in the revenue dip. That said, advertising and conference income increased, which helped offset some of the declines in matchday revenue, TV marketing, and merchandising.
On the pitch, it’s been a bit of a rollercoaster. Dortmund is currently in 11th place in the Bundesliga, trailing RB Leipzig by seven points for a Champions League spot. That’s not great, but it’s still within reach.
Meanwhile, their European campaign is looking more promising, especially after a convincing 3-0 win against Sporting CP in the Champions League knockout phase play-offs. If they make it to the Round of 16, that could mean a nice €11m boost in UEFA bonuses.
Despite the weaker first-half numbers, we’re still optimistic about the club’s financial year. The FIFA Club World Cup and a deep Champions League run could provide additional revenue streams, and if they manage to climb up the Bundesliga table, it’ll be even better.
CANCOM (COK) Revenue Surprise but Profitability Disappoints
CANCOM delivered full-year results that were a bit of a mixed bag. On the one hand, revenue came in strong, reaching the upper end of guidance and even surpassing expectations. Growth was mainly driven by its KBC acquisition in the first half of the year, which helped push overall sales up by 14.4% year-over-year. On the other hand, profits didn’t follow suit—EBITDA actually declined slightly for the full year, and Q4 profits took a bigger hit than expected.
The revenue surprise was particularly interesting given the weak IT demand in Germany, especially among small and mid-sized businesses. A key factor behind the outperformance could be better-than-expected government IT spending in Q4.
However, what’s frustrating is that despite gross profit growing faster than revenue, CANCOM couldn’t convert that into improved profitability. Some of this is due to purchase price adjustments, but overall, the lack of operating leverage is disappointing.
The industry still faces some short-term headwinds, especially in Germany and France. The hope is that demand will start picking up in the second half of the year as businesses begin upgrading to Windows 11 and refresh their hardware. But for now, we remain cautious.
Universal Music Group (UMG) Big Moves Coming in 2025
Momentum is picking up for Universal Music Group, with 2025 shaping up to be a strong year.
Recent price hikes in paid streaming, particularly Amazon Music’s increase, are expected to drive solid organic growth. UMG’s 2025 paid streaming segment could grow high single digit, and that doesn’t even include potential new offerings from Spotify. The music giant is in a prime position to benefit as the entire streaming industry likely follows Amazon’s lead in raising prices.
Looking ahead to the Q4 2024 earnings release on March 6, we expect steady numbers, with some short-term softness due to tough comparisons—last year’s quarter was boosted by Taylor Swift’s success.
Additionally, ad-supported streaming remains a bit sluggish, with the discontinuation of Meta’s premium ad formats weighing on revenue. However, things should pick up in 2025 with new deals with Meta and TikTok, an improving ad market for YouTube, and potential expansion of premium streaming tiers on Spotify.
There’s also the acquisition of Downtown Music, which could further bolster UMG’s market position. While we haven’t factored that into our forecasts just yet, it’s another potential tailwind. Overall, UMG is well on track to capitalize on structural price increases and shifting consumer behavior in streaming.
Verallia (VRLA) So What’s the Deal
There’s movement at Verallia, with BWGI, controlled by Brazil’s Moreira Salles family, considering a takeover bid. BWGI already owns 28.84% of the glass-packaging company and has been steadily increasing its stake since Verallia’s IPO in 2019.
Until now, the family office had avoided crossing the 30% ownership threshold, but they’ve now confirmed they are reviewing an offer—though they have no plans to delist the company.
This move looks opportunistic. 2024 was a rough year for Verallia, with multiple downward earnings revisions leading to a 30% stock price drop. After two years of record growth and margins, the company was hit by destocking and weaker pricing power. Earnings took a hit, and management had to reset expectations. 2025 is expected to bring some stabilization, with a gradual recovery in profitability and less impact from pricing and mix pressures.
BWGI’s initial offer price of €30 per share, including dividends, doesn’t look particularly generous. The valuation is at a discount compared to historical levels, and the proposed price is only slightly above the IPO price despite significantly stronger financials today. Given this, there’s room for debate on whether this offer undervalues the company, especially if earnings trends improve in the coming quarters.
Schott Pharma (1SXP) Weak Start, Stronger Finish Expected
Schott Pharma is set for a rough first half, with Q1 results expected to show a significant drop in earnings. The headwinds from mRNA-related products and ongoing destocking in its vial business are taking a toll, with EBITDA likely seeing a notable decline.
Investors are understandably cautious, given the weak momentum, but the company is banking on a substantial turnaround in the second half of the year.
A major factor in this expected recovery is the ramp-up of new production capacity in Hungary, which will bring a much-needed boost to glass syringe sales. Once certifications are complete, these new facilities should drive additional revenue, making the ambitious H2 growth target look more achievable. While the near-term outlook remains tough, the mid-term fundamentals remain intact, and the company’s valuation has dropped to historically low levels.
With Schott Pharma trading at a significant discount compared to industry peers like Stevanato, the stock is looking increasingly attractive for long-term investors. The key question is whether the expected recovery in H2 plays out as planned. If it does, we could see a strong rebound.
Siemens Energy (ENR) In Line with Expectations, Waiting for Guidance Update
No surprises in Siemens Energy’s Q1 numbers, as the company had already given a preliminary release in January. Sales saw solid growth, and the order backlog reached a record €131 billion, but order intake itself was down compared to the exceptional levels seen last year. Siemens Gamesa’s wind turbine division remains the company’s biggest challenge, still operating at a loss, while the more traditional gas and power businesses continue to perform well.
The biggest positive surprise came from cash flow, with pre-tax free cash flow hitting €1.5 billion in just one quarter—already exceeding the full-year target. With this strong cash flow performance, the company has hinted that it will likely revise its 2025 targets upward when it reports interim results in May. Higher sales growth, an improved margin outlook, and stronger cash flow guidance could all be on the table.
For now, Siemens Energy remains a mixed bag. The growth is there, but challenges remain in managing supply chains and ramping up offshore wind operations. The market is waiting to see if the company can execute smoothly before getting more bullish.
Waga Energy (WAGA) – Full Speed Ahead with U.S. Expansion
Waga Energy is firing on all cylinders, wrapping up 2024 with a massive 67% jump in sales. The big driver are the Biomethane production and treatment services, which surged 81%, making up the bulk of the company’s revenue. Equipment sales also saw solid growth, though at a slower pace. What’s really exciting is the growing international footprint—nearly 40% of its biomethane production is now happening outside France, where prices tend to be more attractive, especially in North America.
The company’s deal pipeline is looking stronger than ever. After a sluggish first half, the second half of 2024 and early 2025 have more than made up for it, with nine new contracts signed—four of them in the U.S.
The flagship Steuben unit in the U.S. is a game-changer, positioning Waga to grab more market share in the region. Financially, the company is well-equipped, thanks to a fresh €200 million capital raise that ensures it has the funds to hit its 2026 targets.
While short-term sales estimates have been trimmed slightly, the long-term growth story remains rock solid. The fundamentals are all there—cutting-edge technology, long-term contracts providing stability, and a market that’s only going to get bigger.
TUI AG (TUI) Strong Start, Summer Looks Promising
TUI kicked off the year with a solid Q1, beating expectations across the board. Revenue climbed 13%, and operating profit was well ahead of forecasts. The real standout was the Hotels division, which saw a huge boost in both revenue and profitability. Cruises also had a strong quarter, while the Markets & Airlines segment, despite seasonal losses, still posted encouraging top-line growth.
Summer bookings are shaping up nicely. Volumes are up 2% compared to last year, and prices are holding steady with a 4% increase. The U.K. market is picking up momentum after a slow start, while Germany has normalized after an initial surge. Management remains confident, sticking to its full-year outlook of 5-10% revenue growth and a 7-10% bump in adjusted EBIT.
This update reinforces the view that TUI is in a good spot. Travel demand remains strong, pricing is resilient, and the company is executing well.
Carl Zeiss Meditec (AFX) A Slow Start, But No Major Surprises
Not the best way to kick off the year for Carl Zeiss Meditec. While revenue came in slightly ahead of expectations, profitability fell short, mainly due to weak performance in the Microsurgery segment. The company’s EBITA and net profit both took a hit, showing that while sales were holding up, margins were under pressure.
Ophthalmic devices, one of the company’s core areas, had a decent quarter, but growth was weighed down by sluggish demand in China, where customers held off on buying equipment and price cuts on intraocular lenses added extra pressure. Microsurgery, on the other hand, struggled against a tough comparison from last year and lower-than-expected sales of the KINEVO 900S system.
Despite the rough start, management stuck to its full-year guidance, expecting moderate revenue growth and stable-to-slightly-improving EBITA margins. It’s clear that challenges in China and a sluggish start in Microsurgery have made things more difficult than expected, but the long-term outlook remains intact.
M6 (MMT) Tough Ad Market, But Signs of a Turnaround
M6 had a rough Q4, with advertising revenue taking a bigger hit than expected. The company saw a 7% drop in ad sales, which was a major drag on earnings, despite decent cost control. This weaker-than-expected finish to the year forced a revision of 2025 forecasts, and while the outlook isn’t dire, it’s also not particularly exciting.
On the bright side, streaming remains a strong point, with 34% growth over the year, and management is sticking to its ambitious 2028 target of €200m+ in revenue from digital platforms. That’s a long way off, but it does show where the company sees future growth coming from.
Interestingly, despite the weak Q4, management noted that advertising is off to a solid start in 2025, with a slight improvement in early trends. Programming costs should remain stable, and without major sporting events to factor in this year, there’s hope for some margin relief.
Still, with ongoing cost pressures and uncertainty around traditional TV ad revenues, the stock remains a wait-and-see story. The dividend, however, remains attractive, offering a strong 10% yield, which might be a reason for some investors to stick around.
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