Duell - Focus is on the outlook
Duell publishes its Q1/2025 (9/24-11/24) business review on 16th of January. Given that Q1 of Duell’s fiscal year is typically slow due to seasonal factors, our attention is on any potential remarks regarding market activity and future outlook.
Mixed signals from the end-markets
Snowmobiling is a smaller category for Duell, yet important in the seasonally quiet first quarter. We anticipate that the delayed winter in the Nordics has slightly affected demand in Q1, but the impact should be minimal. Motorcycling is Duell’s largest category by net sales. While Duell distributes motorcycling parts and accessories, the registrations give an indication of the market activity. The registrations of motorcycles increased during the first eleven months of 2024 in Sweden yet declined in Finland. Consumer confidence has improved in both Finland and Sweden y/y yet is still at relatively low levels especially in Finland. In Europe, the new motorcycle registrations in five of the largest markets (France, Germany, Italy, Spain and UK) increased slightly during the first nine months of 2024. While the total grew, the number of registrations declined in markets important for Duell (France, UK and Germany). Overall, the search statistics across the largest Nordic powersports aftermarket webstores indicate decreased interest y/y during the second half of the year 2024.
Expecting growth to continue in Europe
We keep our estimates largely unchanged for FY 2025. We have revised our estimates downwards for coming years to reflect a more cautious outlook. Duell gave relatively broad guidance for 2025E as was expected due to the low visibility. 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. We estimate net sales of EUR 128m (EUR 125m) and adj. EBITA of 7.4m (EUR 6.2m) with a margin of 5.8% (5.0%). We expect growth to materialize during H2 largely due to easier comparable growth figures especially in Q3. In the first quarter, we anticipate stable sales overall, with projected growth in Europe and a slight decline in sales in the Nordic region. In terms of profitability, we estimate adj. EBITA of EUR 0.5m (Q1/24 EUR 0.3m), a slight improvement y/y.
Bar is set relatively low
We maintain our TP at EUR 9.0 and reiterate our BUY recommendation. While the market seems to continue to challenge in 2025, we see the company’s fundamentals largely intact. Our target price indicates 9-6x adj. EV/EBIT based on our estimates for 2025-2026E.