Performance indicators
Various financial and non-financial performance indicators are used to measure performance. Borussia Dortmund uses these internally-defined performance indicators to guide its entrepreneurial actions and to select the focus of its internal reporting.
Financial performance indicators
From a wide range of possible financial indicators, Borussia Dortmund focuses on those specific indicators that management has primarily used in the past few years to steer the Company.
First and foremost is revenue. Management uses this indicator to internally manage the Company, knowing full well that this indicator alone is not sufficiently meaningful. Nevertheless, it provides a clear indication of the Company’s economic strength, especially when compared against that of competitors and when monitoring the Company’s long-term revenue trend.
Consolidated total operating proceeds is another financial performance indicator that, in contrast to the other financial performance indicators, is only used for the Borussia Dortmund Group. These are calculated as total revenue plus the gross transfer proceeds generated. This indicator is used to reflect the Group’s earnings power and as a source of funding for ordinary activities.
The result from operating activities (EBIT) and net profit or loss for the year are also used to manage the Company. These financial performance indicators play a key role in preparing the budget for the coming financial year(s), in interim controlling with respect to the earnings performance and when looking back on a particular financial year.
Another key performance indicator is the operating result (EBITDA). This is due to the considerable level of investment activity and the associated increase in depreciation, amortisation and write-downs. As a result, EBITDA (EBIT adjusted for depreciation, amortisation and write-downs) has been selected to better benchmark the Company’s annual performance.
These indicators are rounded out by cash flows from operating activities and free cash flow, both of which the Company uses for internal planning purposes.
Free cash flow is defined as cash flows from operating activities plus cash flows from investing activities and is a key indicator used to ensure that cash flows from operating activities are sufficient to cover investments. Because Borussia Dortmund’s strategic objective is to maximize sporting success without incurring new debt, free cash flow is a key indicator for the club. In light of steadily growing transfer sums, free cash flow is thus becoming increasingly important. Furthermore, it is an indicator used to determine whether Borussia Dortmund has sufficient funds to finance the steady dividend payments to its shareholders. Therefore, Borussia Dortmund strives to continuously optimise free cash flow.
Non-financial performance indicators
Borussia Dortmund’s only non-financial performance indicator is the reach of its brand.
The reach of Borussia Dortmund’s brand is determined by a number of criteria that, when taken together, are representative of the brand’s reach. Some of these criteria are measurable, while others are not. Nevertheless, they are a reflection of the Company’s appeal.
The number of criteria varies and they are thus exchangeable. While any one factor may be of relevance during a given season, this may not necessarily be the case in subsequent years. New media in particular constantly provides new value drivers: for instance, the number of Facebook fans or page impressions represent relevant indicators.
Measurable criteria include, for example, the number of season tickets sold, attendance figures and television broadcast hours.
Awards, surveys and studies represent possible criteria that cannot be measured quantitatively. Another “soft” criterion is the deliberate selection of sponsors whose products and brand images are aligned with the Borussia Dortmund brand.
Borussia Dortmund’s decision-makers receive reports about all criteria on a regular basis. Furthermore, taken as a whole, these are an indicator of the success of the Company’s strategic alignment.
Compared to the previous year, there were no changes to Borussia Dortmund’s control system.