Original-Research: bet-at-home AG (von NuWays AG): HOLD

Original-Research: bet-at-home AG - from NuWays AG

Classification of NuWays AG to bet-at-home AG

Company Name: bet-at-home AG
ISIN: DE000A0DNAY5

Reason for the research: Update
Recommendation: HOLD
from: 17.07.2024
Target price: EUR 5.50
Last rating change:
Analyst: Frederik Jarchow

Negative ruling in dispute over Swiss VAT liability; chg

Topic: Swiss Federal Supreme Court does not rule in favour of the bet-at-home subsidiary bet-at-home Internet in the first instance in the dispute over the VAT liability of sports betting.

The Swiss Federal Tax Administration ('ESTV') assumes that the offer of sports betting in Switzerland by bet-at-home´s subsidiary, bet-at-home.com Internet Ltd., Malta, is subject to VAT. Consequently, the company should be entered in the register of companies liable for VAT. Further, the ESTV has assessed tax claims for the payment of VAT for the tax periods 2013 to 2017. bet-at-home takes a contrary view on the whole matter, first filed objection with the ESTV before filing a complaint with the court.

The ruling in first instance (not legally binding) rejected the complaint of bet-at-home, but emphasized that the statue of limitations has already expired for 2013. bet-at-home is now examining its legal options as well as the potential impact on the given guidance for FY24. In case bet-at-home would accept the ruling in first instance, it would have to pay € 1.3m for the tax years 2014-17 and another € 2.7m for 2018 to H1´24 (excl. interest costs). Nevertheless, the company does not expect any immediate cashoutflows. In order to reflect the ruling, we increased provisions and operating expenses in FY24 and and reduced reported EBITDA estimates respectively. As we consider the potential costs as “special items” (i.e. non-operating costs in connection with claims and the liquidation of the Entertainment), EBITDA before special items should remain unaffected after all (eNuW).

Apart from that, the UEFA EURO championship should have fueled betting volumes topline in Q2/Q3 (assuming stable betting margins). Due to high expected marketing spending also throughout Q2, scale effects – also carried by imposed efficiency measures, such as outsourcing and streamlining of processes – should not materialize before Q3. Taking all into account, FY24 sales should still end up at € 49.8m in line with the guidance range of € 45-53m, (reported) EBITDA is now seen at € 1.4m, below the guidance of -1m to € 2.5m in EBITDA (before special items).

While the risks associated with the liquidation process of the Entertainment Ldt. and provisions for current and potential new customer claims in Austria seem to be largely under control, the uncertainty in Germany remains after the indicative decision of The Federal Court of Justice.

HOLD with an unchanged PT to € 5.50 based on FCFY´25e.

You can download the research here:
http://www.more-ir.de/d/30223.pdf
For additional information visit our website www.nuways-ag.com/research.

Contact for questions
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany ++++++++++
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