A cc or # $T ypcap$ 1628 1 0 4 2 Page 1/7 Equity flash Trading Update Entertainment Mybet Holding SE BUY (BUY) Target EUR 1.50 (EUR 1.60) Price (last closing price) : EUR 1.10 Upside : 36% Est. change 2015e 2016e EPS -12% - -10% Outlook for 2015 damped by new VAT ruling; turnaround assumed in 2016e C apital X M Y GY X M Y n.d E M arket Cap (EURm) 27 Enterprise value (EURm) 29 Extrema 12 months 1.55-1.01 Free Float (%) 70.8% P erfo rmance (%) 1m 3m 12m Absolute -6.1-10.7-7.9 Perf. rel. " sector" -9.4-25.7-35.0 Perf. rel. CDAX -11.4-26.8-28.5 P &L 12/15e 12/16e 12/17e Sales (EURm) 76.6 81.5 85.6 EBITDA (EURm) 2.2 3.2 3.7 EBIT (EURm) -0.5 0.3 0.7 Attr. net profit (EURm) -0.5 0.1 0.4 EPS (EUR) -0.02 0.00 0.02 Dividend (EUR) 0.00 0.00 0.00 P/E (x) n.m. 236.6 62.8 P/B (x) 1.7 1.7 1.6 Dividend yield (%) 0% 0% 0% FCF yield (%) -17% -8% 0% EV/Sales (x) 0.4 0.4 0.3 EV/EBITDA (x) 13.3 9.3 7.8 EV/EBIT (x) n.m. 109.2 41.8 Gearing (%) 0.0 0.0 0.0 Net Debt/EBITDA(x) -1.9-0.6-0.5 N ext Events 1Q15 results 13 May 2015 Final 2014 figures has published its annual report. The numbers came in as expected given that the company had already posted some key preliminary figures. Overall, the top line stood at EUR 70.4m (PY: EUR 67.0m) mainly driven by the Sports Betting segment s strong performance in the World Cup. Group opex improved to EUR 25.4m (PY: EUR 32.6m), EBITDA rose to EUR 3.0m (PY: EUR -7.1m) and EBIT jumped to EUR 0.6m (PY: EUR -11.3m), about 100k above our estimate. Net income attributable to shareholders was EUR -0.5m, marginally short of our forecast (EUR -0.4m). On the segment level, Sports Betting s EBIT loss improved from EUR -5.4m to EUR -0.7m, while the top line improved from EUR 33.3m to EUR 40.3m; in Casino & Poker EBIT fell to EUR 1.2m (PY: EUR 1.8m), mirroring the top line (down from EUR23.4m to EUR 21.9m); Horse Betting s EBIT rose to EUR 1.3m (PY: EUR 0.8m). Outlook for 2015 dimmed by new EU VAT ruling For its 2015 outlook management provided two scenarios: Basic scenario: Revenues of EUR 70-75m, EBIT break-even. Management expects the new EU VAT ruling to depress net revenues, and hence EBITDA and EBIT, by ~EUR 2m. Absent this additional burden, the net earnings target would be ~EUR 2m higher. Alternative scenario: As stated and confirmed in today s conference call, mybet s management board is examining additional investments in technology and products. If they decide to technologically enhance the Sports Betting product range, revenue could reach upper end of our forecast range (EUR 75m) or exceed it in a best case. However, the additional outlay for a technological upgrade would probably reduce our EBIT estimate to at least EUR -0.5m (best-case EBIT) if not lower. From our current perspective, the most realistic scenario is probably a mix of the two scenarios. We adjust our 2015e forecasts as follows: 1) Group net revenues of EUR 72.9m, translating to 2) EBITDA of EUR 2.2m and 3) EBIT of EUR -0.5m. Excluding the new VAT ruling, we estimate 2015e EBIT at ~EUR +1.5m (2014: EUR 0.6m). Turning to 2016e, we expect the bottom line turnaround to be finished, resulting in an estimated net profit of EUR 0.1m (2015e: EUR -0.5m), with EBIT likely improving to EUR 0.3m. Note that our estimates do not include any positive effects from potential investments in technology and products; hence, we may need to further adjust our estimates within the next few months. Stock trending sideways BUY with new PT of EUR 1.50 The stock has lagged the market ytd; and given the new outlook and the uncertainties attached to the two-scenario guidance, it could take a while to regain its momentum. Our updated fair value per share (DCF, peer group) now stands at EUR 1.48, and we accordingly lower our PT to EUR 1.50 (1.60), but underline the further upside potential coming from the possible investments. We reiterate our BUY recommendation. Marcus Silbe (Analyst) +49 (0)69 920 54 814 Marcus.silbe@oddoseydler.com Please notice the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by 34b WpHG (Securities Trading Law) at the end of this document. This financial analysis in accordance with 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others in connection with their trading activities, occupation, or employment.
Page 2/7 Profit and loss account IFRS EURm 2012 2013 2014 2015E 2016E 2017E Net revenues 69.19 67.03 70.36 72.92 78.03 81.93 YoY grow th 14.0% -3.1% 5.0% 3.6% 7.0% 5.0% Internally produced and capitalised assets 1.45 2.19 2.46 1.46 1.56 1.64 as % of sales 2.1% 3.3% 3.5% 2.0% 2.0% 2.0% Other operating income 10.39 1.53 3.22 2.19 1.95 2.05 as % of sales 15.0% 2.3% 4.6% 3.0% 2.5% 2.5% Total revenues 81.03 70.75 76.04 76.57 81.54 85.61 as % of sales 117.1% 105.6% 108.1% 105.0% 104.5% 104.5% Cost of materials -9.67-45.16-47.74-48.27-51.50-54.07 as % of net revenues -14.0% -67.4% -67.9% -66.2% -66.0% -66.0% Personnel costs -10.99-10.95-10.49-10.57-10.92-11.22 as % of net revenues -15.9% -16.3% -14.9% -14.5% -14.0% -13.7% Other operating expenses -49.38-21.73-14.84-15.51-15.96-16.59 as % of net revenues -71.4% -32.4% -21.1% -21.3% -20.5% -20.2% EBITDA 10.99-7.10 2.97 2.21 3.16 3.73 as % of net revenues 15.9% -10.6% 4.2% 3.0% 4.0% 4.6% Depreciation and amortisation (incl. PPA depreciation) -3.74-4.20-2.37-2.70-2.89-3.03 as % of net revenues -5.4% -6.3% -3.4% -3.7% -3.7% -3.7% Operating profit (EBIT) 7.25-11.29 0.60-0.49 0.27 0.70 as % of net revenues 10.5% -16.8% 0.8% -0.7% 0.3% 0.9% Net financial results -0.04 0.22 0.02 0.04 0.08 0.12 EBT (Earnings before income taxes) 7.21-11.60 0.61-0.45 0.35 0.82 as % of net revenues 10.4% -17.3% 0.9% -0.6% 0.4% 1.0% Income taxes -1.10 0.79-0.40 0.07-0.05-0.12 as % of EBT -15.3% -6.8% -64.9% -15.0% -15.0% -15.0% Income from continuing operations 6.11-10.81 0.22-0.38 0.30 0.70 Income from discontinued operations 0.00 0.00 0.00 0.00 0.00 0.00 Net income 6.11-10.81 0.22-0.38 0.30 0.70 Minorities -0.01-0.13-0.53-0.14-0.18-0.25 Net income attributable to shareholders 6.10-10.93-0.32-0.52 0.12 0.45 as % of net revenues 8.8% -16.3% -0.4% -0.7% 0.2% 0.5% Shares outstanding (in m) 24.2 24.3 25.6 25.6 25.6 25.6 Basic earnings per share (EUR) 0.25-0.46-0.01-0.02 0.00 0.02 Source: Company Data, Oddo Seydler Bank AG
Page 3/7 Balance Sheet IFRS EURm 2012 2013 2014 2015E 2016E 2017E Assets Non-current assets 20.42 17.09 18.57 21.34 23.12 24.12 as % of total assets 46.5% 44.8% 50.2% 57.3% 60.6% 61.4% Intagible assets 14.64 14.46 16.33 16.48 16.24 15.93 Property, plant and equipment 1.04 1.12 0.99 3.60 5.61 6.94 Long-term investments (incl. Financial assets) 3.78 0.16 0.00 0.00 0.00 0.00 Deferred tax assets 0.97 1.35 1.26 1.26 1.26 1.26 Other assets 0.00 0.00 0.00 0.00 0.00 0.00 Current assets 23.51 21.07 18.40 15.87 15.02 15.19 as % of total assets 53.5% 55.2% 49.8% 42.7% 39.4% 38.6% Inventories 0.08 0.06 0.18 0.15 0.15 0.15 Accounts receivable, other receivables and other assets 10.25 13.04 9.55 11.53 12.88 13.15 Current income tax claims 0.00 0.00 0.00 0.00 0.00 0.00 Assets held for sale 0.00 0.00 0.00 0.00 0.00 0.00 Cash and cash equivalents 13.18 7.97 8.68 4.20 1.99 1.90 Total assets 43.93 38.16 36.98 37.21 38.14 39.31 Shareholders equity and liabilities Shareholders equity 28.52 16.96 18.94 18.55 18.85 19.55 as % of total equity and liabilities 64.9% 44.4% 51.2% 49.9% 49.4% 49.7% Subscribed capital 24.22 24.26 25.59 25.59 25.59 25.59 Capital reserve 11.66 11.64 12.18 12.18 12.18 12.18 Accumulated profit -8.67-21.13-21.55-22.07-21.95-21.50 Other reserves 0.00 0.00 0.00 0.00 0.00 0.00 Difference arising from currency conversions 0.00 0.00 0.00 0.00 0.00 0.00 Equity attributable to shareholders 27.21 14.77 16.21 15.69 15.81 16.26 Minorities 1.31 2.19 2.72 2.86 3.04 3.29 Current provisions and liabilities 14.74 20.28 17.15 17.77 18.40 18.88 as % of total equity and liabilities 33.6% 53.2% 46.4% 47.7% 48.2% 48.0% Financial liabilities 0.31 0.13 0.00 0.00 0.00 0.00 Financial lease 0.00 0.00 0.00 0.00 0.00 0.00 Bond / Convertible Bond 0.00 0.00 0.00 0.00 0.00 0.00 Accounts payable 4.90 10.74 9.26 8.99 9.62 10.10 Tax liabilities 0.18 0.21 0.24 0.24 0.24 0.24 Liabilities directly in connection with assets held for sale 0.00 0.00 0.00 0.00 0.00 0.00 Other provisions 0.78 0.84 1.02 1.02 1.02 1.02 Other liabilities 8.57 8.36 6.64 7.52 7.52 7.52 Non-current provisions and liabilities 0.67 0.92 0.89 0.89 0.89 0.89 as % of total equity and liabilities 1.5% 2.4% 2.4% 2.4% 2.3% 2.3% Financial liabilities 0.59 0.02 0.00 0.00 0.00 0.00 Bond / Convertible Bond 0.08 0.00 0.00 0.00 0.00 0.00 Deferred tax liabilities 0.00 0.89 0.89 0.89 0.89 0.89 Total equity and liabilities 43.93 38.16 36.98 37.21 38.14 39.31 Source: Company Data, Oddo Seydler Bank AG
Page 4/7 Cash flow statement IFRS EURm 2012 2013 2014 2015E 2016E 2017E Net indrme 6.11-10.81 0.22-0.38 0.30 0.70 Disdrntinued business 0.00 0.00 0.00 0.00 0.00 0.00 Depreciation and amortisation 3.74 6.30 2.37 2.70 2.89 3.03 Other operating CF activities Change in Working Capital and others -6.24 0.16 0.38-0.04-0.08-0.12 0.15 4.85-3.02-1.29-0.64 0.33 Cash flow from operating activities 3.76 0.51-0.06 0.98 2.46 3.94 CAPEX -3.30-5.39-4.11-5.46-4.67-4.03 Other investing activities 7.94 0.32 3.13 0.00 0.00 0.00 Cash flow from investing activities 4.64-5.07-0.98-5.46-4.67-4.03 Change in debt -0.15-0.33-0.07 0.00 0.00 0.00 Repayment of liabilities under finance lease 0.00 0.00 0.00 0.00 0.00 0.00 Other investing CF activities 0.00-0.04-0.05 0.00 0.00 0.00 Net proceeds from capital increase & right capital 0.03 0.00 1.87 0.00 0.00 0.00 Change in capital reserve 0.00 0.00 0.00 0.00 0.00 0.00 Dividend payments 0.00 0.00 0.00 0.00 0.00 0.00 Cash flow from financing activities -0.13-0.36 1.75 0.00 0.00 0.00 Total change in cash and cash equivalents 8.27-4.92 0.71-4.48-2.20-0.09 Effect of exchange rate changes on cash 0.00 0.00 0.00 0.00 0.00 0.00 Changes in cash due to changes in drnsolidation -0.93-0.29 0.00 0.00 0.00 0.00 Cash and cash equivalents at the start of the period 5.83 13.18 7.97 8.68 4.20 1.99 Cash and cash equivalents at year s end 13.18 7.97 8.68 4.20 1.99 1.90 Source: Company Data, Oddo Seydler Bank AG
Page 5/7 Disclaimer and statement according to 34b German Securities Trading Act ( Wertpapierhandelsgesetz ) in combination with the provisions on financial analysis ( Finanzanalyseverordnung FinAnV) This report has been prepared independently of the company analysed by Oddo Seydler Bank AG and/ or its cooperation partners and the analyst(s) mentioned on the front page (hereafter all are jointly and/or individually called the author ). None of Oddo Seydler Bank AG or its cooperation partners, the Company or its shareholders has independently verified any of the information given in this document. Section 34b of the German Securities Trading Act in combination with the FinAnV requires an enterprise preparing a security analysis to point out possible conflicts of interest with respect to the company that is the subject of the analysis. Oddo Seydler Bank AG is a subsidiary of Oddo & Cie, Paris (hereafter Oddo, together Oddo Group ). However, Oddo Seydler Bank AG (hereafter Oddo Seydler ) provides its research work independent from Oddo. Oddo Group is offering a wide range of Services not only including investment banking services and liquidity providing services (designated sponsoring). Oddo Group may possess relations to the covered companies as follows (additional information and disclosures will be made available upon request): a. Oddo Group holds more than 5% interest in the capital stock of the company that is subject of the analysis. b. Oddo Group was a participant in the management of a (co)consortium in a selling agent function for the issuance of financial instruments, which themselves or their issuer is the subject of this financial analysis within the last twelve months. c. Oddo Group has provided investment banking and/or consulting services during the last 12 months for the company analysed for which compensation has been or will be paid for. d. Oddo Group acts as designated sponsor for the company's securities on the basis of an existing designated sponsorship contract. The services include the provision of bid and ask offers. Due to the designated sponsoring service agreement Oddo Group may regularly possess shares of the company and receives a compensation and/ or provision for its services. e. The designated sponsor service agreement includes a contractually agreed provision for research services. f. Oddo Seydler and the analysed company have a contractual agreement about the preparation of research reports. Oddo Seydler receives a compensation in return. g. Oddo Group has a significant financial interest in relation to the company that is subject of this analysis. In this report, the following conflicts of interests are given at the time, when the report has been published: d, f Oddo Group and/or its employees or clients may take positions in, and may make purchases and/ or sales as principal or agent in the securities or related financial instruments discussed in this analysis. Oddo Group may provide investment banking, consulting, and/ or other services to and/ or serve as directors of the companies referred to in this analysis. No part of the authors compensation was, is or will be directly or indirectly related to the recommendations or views expressed. Recommendation System: Oddo Seydler uses a 3-level absolute share rating system. The ratings pertain to a time horizon of up to 12 months: BUY: The expected performance of the share price is above +10%. HOLD: The expected performance of the share price is between 0% and +10%. SELL: The expected performance of the share price is below 0%. This rating system is only a guideline. Therefore, deviations from this system may apply. Recommendation history over the last 12 months for the company analysed in this report: Date Recommendation Price at change date Price target 19 May 2014 BUY EUR 1.24 EUR 1.60 14 August 2014 BUY EUR 1.27 EUR 1.60 14 November 2014 BUY EUR 1.37 EUR 1.60 16 April 2015 BUY EUR 1.10 EUR 1.50 The following valuation methods are used when valuing companies: Multiplier models (price/earnings, price/cash flow, price/book value, EV/Sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer group comparisons, historical valuation approaches, discounting models (DCF, DDM), break-up value approaches or asset valuation approaches. The valuation models are dependent upon macroeconomic measures such as interest, currencies, raw materials and assumptions concerning the economy. In addition, market moods influence the valuation of companies.
Page 6/7 The figures taken from the income statement, the cash flow statement and the balance sheet upon which the evaluation of companies is based are estimates referring to given dates and therefore subject to risks. These may change at any time without prior notice. The opinions and forecasts contained in this report are those of the author alone. Material sources of information for preparing this report are publications in domestic and foreign media such as information services (including but not limited to Reuters, VWD, Bloomberg, DPA-AFX), business press (including but not limited to Börsenzeitung, Handelsblatt, Frankfurter Allgemeine Zeitung, Financial Times), professional publications, published statistics, rating agencies as well as publications of the analysed issuers. Furthermore, discussions were held with the management for the purpose of preparing the analysis. Potentially parts of the analysis have been provided to the issuer prior to going to press; no significant changes were made afterwards, however. Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by the author with regard to the accuracy or completeness of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Possible errors or incompleteness of the information do not constitute grounds for liability, neither with regard to indirect nor to direct or consequential damages. The views presented on the covered company accurately reflect the personal views of the author. All employees of the author's company who are involved with the preparation and/or the offering of financial analyzes are subject to internal compliance regulations. The report is for information purposes, it is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the securities mentioned in this report. Any reference to past performance should not be taken as indication of future performance. The author does not accept any liability whatsoever for any direct or consequential loss arising from any use of material contained in this report. The report is confidential and it is submitted to selected recipients only. The report is prepared for professional investors only and it is not intended for private investors. Consequently, it should not be distributed to any such persons. Also, the report may be communicated electronically before physical copies are available. It may not be reproduced (in whole or in part) to any other investment firm or any other individual person without the prior written approval from the author. The author is not registered in the United Kingdom nor with any U.S. regulatory body. It has not been determined in advance whether and in what intervals this report will be updated. Unless otherwise stated current prices refer to the closing price of the previous trading day. Any reference to past performance should not be taken as indication of future performance. The author maintains the right to change his opinions without notice, i.e. the opinions given reflect the author s judgment on the date of this report. This analysis is intended to provide information to assist institutional investors in making their own investment decisions, not to provide investment advice to any specific investor. By accepting this report the recipient accepts that the above restrictions are binding. German law shall be applicable and court of jurisdiction for all disputes shall be Frankfurt am Main (Germany). This report should be made available in the United States solely to investors that are (i) "major US institutional investors" (within the meaning of SEC Rule 15a-6 and applicable interpretations relating thereto) that are also "qualified institutional buyers" (QIBs) within the meaning of SEC Rule 144A promulgated by the United States Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Securities Act") or (ii) investors that are not "US Persons" within the meaning of Regulation S under the Securities Act and applicable interpretations relating thereto. The offer or sale of certain securities in the United States may be made to QIBs in reliance on Rule 144A. Such securities may include those offered and sold outside the United States in transactions intended to be exempt from registration pursuant to Regulation S. This report does not constitute in any way an offer or a solicitation of interest in any securities to be offered or sold pursuant to Regulation S. Any such securities may not be offered or sold to US Persons at this time and may be resold to US Persons only if such securities are registered under the Securities Act of 1933, as amended, and applicable state securities laws, or pursuant to an exemption from registration. This publication is for distribution in or from the United Kingdom only to persons who are authorised persons or exempted persons within the meaning of the Financial Services and Markets Act 2000 of the United Kingdom or any order made there under or to investment professionals as defined in Section 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. This publication is for distribution in Canada only to pension funds, mutual funds, banks, asset managers and insurance companies. The distribution of this publication in other jurisdictions may be restricted by law, and persons into whose possession this publication comes should inform themselves about, and observe, any such restrictions. In particular this publication may not be sent into or distributed, directly or indirectly, in Japan or to any resident thereof. Responsible Supervisory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, Federal Financial Supervisory Authority)
Page 7/7 Graurheindorferstraße 108 53117 Bonn and Marie-Curie-Str. 24-28 60439 Frankfurt Oddo Seydler Bank AG Schillerstrasse 27-29 60313 Frankfurt am Main www.oddoseydler.com Tel.: 0049 - (0)69-920 54 800