Duell - Self-help story continues in tough market
Duell’s Q2 net sales came in at EUR 28.2m, above our estimate of EUR 25.9m, driven by the TranAm acquisition. With the higher-than-expected sales and further self-help, adj. EBITA was also higher than estimated at EUR 1.4 (Evli est. EUR 0.8m).
- Duell’s Q2 net sales grew 10.2% y/y to EUR 28.2m (EUR 25.5m in Q2/23, EUR 25.9m Evli).
- Net sales in the Nordics amounted to EUR 15.7m (EUR 16.3m in Q2/23, EUR 15.3m Evli), in Rest of Europe net sales stood at EUR 12.5m (EUR 9.2m in Q2/23, EUR 10.6m Evli).
- While we expected TranAm to support sales development and increased our estimates in connection with our result preview report, the growth in Rest of Europe was still more rapid than expected.
- EBITA in Q2 amounted to EUR 1.4m (EUR 1.0m in Q2/23, EUR 0.8m Evli).
- Additional transport costs due to Red Sea shipping challenges had a negative effect on the gross margin as expected. Duell’s gross margin decreased from 26.5% in Q2/23 to 25.2% in Q2/24. Despite the decrease in gross margin, the margins improved driven by the company’s profitability improvement project.
- Net debt at the end of Q2 stood at EUR 29.9m, down y/y from EUR 62.8m at the end of Q2/23. The lower net debt was the result of the completed rights issue and lower net working capital.
- Outlook for FY 2024 (unchanged): Net sales guidance not given due to weakened market predictability. Duell will continue its profitability improvement programme and enhance the net working capital position in financial year 2024. Duell estimates adjusted EBITA to improve from previous year’s level.