Duell - Headwinds persist ahead of Q2
Duell is set to report Q2 (Dec-Feb) on Thursday, April 9. We expect another soft quarter, reflecting continued market headwinds, weak seasonal demand, and ongoing challenges in France. Following the weak Q1, the need to catch up is evident, and the risk of a negative profit warning has risen.
Weak winter demand and headwinds in France weigh on Q2
Duell’s Q2 falls within the Nordic winter season, with lower volumes compared to the summer-driven H2. This year, conditions have been unfavorable, with weak snow coverage across most of Finland, particularly early in the season. New snowmobile registrations were also low in Q2, supporting the view of a soft season. Demand has likely remained weak, particularly given Q2’s reliance on weather-dependent in-season sales. In Central Europe, H1 is structurally softer, and we expect challenges in France to have continued, offsetting healthier development in other CE markets. Broader market conditions have also remained subdued, with weak consumer confidence, rising interest rates, and ongoing geopolitical tensions. Leadership changes add further uncertainty following the CEO departure in March and the appointment of an interim CEO.
Q2 will be soft, with recovery in H2 critical
Despite a weak Q1 and subdued conditions during Q2, Duell has maintained its FY26 guidance of flat net sales and adj. EBITA. Given weak winter conditions in the Nordics, we have lowered our net sales estimates for the region, while challenges in France were already largely reflected following our previous update. We expect sales to have declined in both regions and forecast a 6% drop in Q2. Reflecting weaker net sales, we have lowered our adj. EBITA estimate to EUR 0.7m, with one-off restructuring costs further weighing on reported figures. Soft winter sales and elevated Q1 inventory mean the LTM leverage ratio could rise toward 5–6x. Seasonal demand should provide some relief, but with leverage reduction dependent on H2 recovery, the second half is critical not only for earnings but also for the balance sheet. Cost savings and gradual easing in France should provide support, but the scale ultimately depends on stronger sales and favorable market and weather conditions.
ACCUMULATE with a TP of EUR 2.3 (prev. EUR 3.0)
While we believe much of the downside risk is already reflected in the valuation (adj. EV/EBITDA 5–4x on our 2026–27E), visibility for H2 recovery remains limited and risks remain elevated. A successful second half is essential to support sales, cash flow, and overall financial position. We keep our ACCUMULATE rating but lower our TP to EUR 2.3.