Duell - Turnaround continues

Q4 developed in line with our estimates

Duell’s Q4 net sales grew 5.8% y/y to EUR 31.6m (EUR 29.9m in Q4/23, EUR 31.3m Evli). Adj. EBITA in Q4 amounted to EUR 1.4m (EUR 0.2m in Q4/23, EUR 1.3m Evli). The company experienced an improvement in the gross margin due to a change of accounting principles related to inventory. Duell continued its cost control efforts, which in addition to the improved gross margin led to profitability improvement. At the end of the FY, the net debt to adjusted EBITDA ratio was 2.8x, with net debt substantially reduced to EUR 19.6m from EUR 38.2m in Q4/23, primarily due to the rights offering completed during FY. The conditions for the debt covenants were met at the end of the FY and the leverage ratio was in line with the company’s medium-term targets.

Estimates remain relatively unchanged

Duell gave relatively broad guidance for 2025E as was expected. The company expects organic net sales with comparable currencies to be at the same level or higher than the previous year and adjusted EBITA to improve from last year’s level. Our estimates for 2025E were in line with the guidance already prior to the report. We continue to expect mid-single digit growth for the rest of Europe and slightly lower growth for the Nordics. In terms of profitability, we estimate gross margin pressure from the challenging market and higher logistics costs while the planned change negotiations will alleviate personnel costs for the fiscal year, especially for the second half. We now estimate net sales of EUR 128.9m and adj. EBITA of EUR 7.7m for 2025E.

BUY with a TP of EUR 0.045 (prev. EUR 0.04)

With our estimates for 2025E, Duell is priced at 9x P/E and 8x EV/EBIT which we continue to see as undemanding levels. The fourth quarter offered further proof of the turnaround and reduced debt levels have mitigated the associated risks despite the unpredictable market environment. We increase our TP to EUR 0.045 (prev. EUR 0.04) while maintaining recommendation at BUY.