Duell - Summer season remains the key
Duell’s Q2 was mixed as rapid growth continued in Europe while slower snowmobile products sales in the Nordics affected margins more than we had expected. Uncertainties are high, yet we expect growth to continue during H2 in both Nordics and Central Europe.
Full throttle in Europe, slower ride in the Nordics
Duell’s Q2 net sales grew 3.9% y/y to EUR 29.3m (EUR 28.2m in Q2/24, EUR 28.3m Evli). Sales in Europe increased by over 13% compared to last year, while sales in the Nordics decreased by nearly 4%, in line with our estimates. The weaker snowmobile products sales affected volumes in the Nordics, while the company was able to grow in the central European market. Large online customers drove growth in the area. While the net sales were slightly higher than we estimated, the adj. EBITA in Q2 amounted to EUR 1.1m, falling short of our estimate (EUR 1.4m in Q2/24, EUR 1.5m Evli). The primary factor contributing to lower profitability was the gross margin, which decreased from 25.2% to 23.5% in Q2/24. The decline in the gross margin was mainly due to reduced snow mobile product sales, resulting in a less favorable sales mix.
Summer season growth expected despite uncertainties
Duell retains its guidance for 2025, as it expects organic net sales with comparable currencies to be at or above the previous year’s level while adjusted EBITA is anticipated to improve. After stronger than expected net sales in Q2 and some adjustments to our estimates, we now forecast net sales of EUR 130.0m with growth of 4.3% y/y. While we continue to model stronger growth in the Central European markets, we expect some recovery also in the Nordics for H2 partly driven by the softer comparison period (especially in Q3/24) and FX. In addition, while the market remains uncertain, new motorcycle registrations were up during 1-3/2025 year-over-year in both Finland and Sweden. With increasing volumes and improving efficiency we now expect adj. EBITA of EUR 7.3m for 2025E with a margin of 5.6% (EUR 6.2m, 5.0% in 2024). Although Duell is not directly impacted by the trade war, its indirect effects on European economic growth, consumer confidence, and demand pose a key downside risk.
BUY with a TP of EUR 8.0 (prev. EUR 8.5)
Duell is priced at 7-5x EV/EBITDA and 8-5x adj. P/E on our updated estimates for FY 2025-2026E. We continue to see the valuation cautious especially considering the current depressed earnings levels due to challenging market conditions. After the adjustments to our estimates, we revise TP to EUR 8.0 (prev. EUR 8.5) while maintaining a BUY rating.