Duell - A challenging quarter as expected
The Q4 softness came as a no surprise as the company provided preliminary figures in September in conjunction with the profit warning.
- Net sales in Q4 were EUR 29.9m (EUR 34.6m in Q4/22, EUR 29m Evli).
- EBITA in Q4 amounted to EUR 0.2m (EUR 1.8m in Q4/22, EUR 0.1m Evli).
- EPS (excl. goodwill amortization and NRIs) in Q4 amounted to EUR -0.03 (EUR 0.05 in Q4/22, -0.03 Evli).
- Net debt at the end of FY 2023 was at EUR 38m, in line with our expectations (EUR 38m Evli).
- The company was able to lower net working capital levels from EUR 61.8m at the end of Q3 2023 to EUR 49.9m at the end of Q4 2023 (NWC was at EUR 57.7m at the end of FY 2022).
- Operating free cash flow amounted to EUR 10.6m (Q4/22: EUR 9.4m).
- Tran-Am’s unaudited figures for 17-month period ended on 31 August 2023 (financial period extended by 5 months to bring it in line with Duell’s) were strong as net sales were at GBP 16.2m and EBITDA at GBP 3.3m resulting in a EBITDA margin of roughly 20%.
- The covenants for the company’s loans from financial institutions were not met at the end of the reporting period, Duell is currently in negotiations with the bank to amend the covenant levels.
- According to comments by CEO, the target for FY 2024 is to improve profitability by EUR 3-4m.
- The timeframe for the medium-term target for net sales changed: Net sales in the range of EUR 200-300 million in medium term (prev. by the end of 2025).
- Guidance for FY 2024: Net sales guidance not given due to weakened market predictability. Duell will continue its profitability improvement programme and plans to strengthen its capital structure in financial year 2024. Duell estimates adjusted EBITA to improve from previous year’s level.