Duell - Continues to improve
Duell delivered slightly better figures than we had expected for the seasonally quiet Q1 of its fiscal year. Market environment remains tense, yet we expect growth in Europe coupled with efficiency measures to deliver improvement from last year also on an annual basis.
Q1 establishes a solid base for the year
Duell’s Q1 net sales grew 4.7% y/y to EUR 28.3m (EUR 27.0m in Q1/24, EUR 27.5m Evli). Sales growth exceeded our estimates in both the Nordics and Europe. While adverse weather effects impacted sales negatively in the Nordics, the company was able to grow its sales in the region slightly y/y. Duell grew strongly in Europe with 9% growth y/y coming fully from organic sources. We expect that the company’s largest markets in Europe, France, the UK and Germany have performed well while the strongest growth has come from growth markets such as Poland and Benelux region. The company’s gross margin improved more than we had estimated as it ticked up to 24.9%, up from 23.9% in Q1/24. The company has effectively passed on fluctuating logistics costs and defended its prices. Operating expenses were mostly in line with our estimates and the company’s adj. EBITA was at EUR 0.7m (EUR 0.3m in Q1/24), slightly higher than our estimate of EUR 0.5m.
Expecting improvement on a full-year basis
Duell kept its relatively broad guidance unchanged. In line with the guidance, we expect net sales growth of 4.1% y/y in 2025E to EUR 130m. We estimate that growth will come from both of operating regions. In Europe, we anticipate growth to continue despite the challenging comparison period, as we expect that the new accounts acquired in Central Europe will continue to contribute to future growth. We retain our conservative outlook on the Nordics and expect only slight growth mainly due to easier comparable periods especially in Q2 and Q3 as the visibility remains rather limited for the high season. Duell completed its change negotiations related to the efficiency programme and expects that it will achieve the targeted annual cost savings of approximately EUR 1m. With some positive adjustments, we model adj. EBITA of EUR 8.2m for 2025E with a margin of 6.3%.
BUY with a TP of EUR 9.0
With our updated estimates for 2025-2026E, the company is priced at 7-6x adj. EV/EBIT. The pricing remains conservative, and it presents a significant discount to the peer group and fair value derived from our DCF.