Duell - Waiver received on covenant breach
Duell’s Q4 results were mixed, with the Nordics outperforming expectations while Central Europe fell short. Profitability came in line with our estimates. Although the company did not meet its covenant requirements at the end of the period, the lender granted a waiver.
- Duell’s Q4 net sales declined -2.3% y/y to EUR 30.9m (EUR 31.6m in Q4’24, EUR 30.3m Evli). Net sales with comparable FX declined -1.1%.
- Adj. EBITA in Q4 amounted to EUR 1.0m (EUR 1.4m in Q4’24, EUR 0.9m Evli). Duell’s gross margin was 24.4% (23.2% in Q4’24).
- Net sales in the Nordics were EUR 16.4m, clearly above our EUR 13.8m estimate, as demand recovered in Q4 with the arrival of summer weather in the region.
- In Central Europe, net sales declined to EUR 14.5m (EUR 15.7m in Q4’24, EUR 16.5m Evli). marking the first y/y decline in the region since Q2’23.
- Cash flow from operating activities in Q4 was EUR 2.9m (Q4’24: EUR 7.4m).
- Net debt at FY25-end was EUR 20.2m (FY24: EUR 19.6m), and LTM net debt/adj. EBITDA increased to 3.3x (FY24: 2.8x, Evli: 3.0x). The conditions for the covenants were not met at the end of the review period. However, the lender granted a waiver, and repayments continue as scheduled.
- Net working capital increased to EUR 50.0m (EUR 48.3m Q4’24) and inventories as % of LTM net sales declined to 36.7% from 36.1% in Q4’24.
- Guidance for FY 2026: Duell expects organic net sales to remain at the same level as last year and adjusted EBITA to stay at the same level as last year.
- According to management, consumer sentiment remains fragile and no material improvement is expected over the next 12 months.
- The company announced that it has launched a performance improvement programme, with focus on improving profitability, net working capital efficiency and operative cash flow. These initiatives are expected to have a positive impact on FY 2026 and beyond.