4.4.2024 08:30:01 EEST | Duell Oyj | Company Announcement

This company announcement is a summary of Duell’s Half-year Financial Report for September 2023–February 2024. The complete Report is attached to this announcement as a pdf file. It is also available on the company website at https://investors.duell.eu/ 

Solid second quarter despite challenging market conditions - financial position strengthened

Unaudited financials presented below.

December 2023-February 2024 "Q2 2024" (comparable figures in parenthesis 12/2022-2/2023):

  • Net sales increased 10.2% to EUR 28.2 million (EUR 25.5 million). Net sales with comparable currencies increased 15.9%. Organic net sales with comparable currencies increased 4.0%.
  • Adjusted EBITDA increased 29.7% to EUR 1.5 million (EUR 1.2 million) with an adjusted EBITDA margin of 5.5% (4.7%).
  • Adjusted EBITA increased 40.4% to EUR 1.4 million (EUR 1.0 million) with an adjusted EBITA margin of 4.9% (3.8%).
  • Adjusted operating profit was EUR 0.7 million (EUR 0.5 million) with a margin of 2.4% (1.9%).

September 2023-February 2024 "H1 2024" (comparable figures in parenthesis 9/2022-2/2023):

  • Net sales increased 7.5% to EUR 55.2 million (EUR 51.3 million). Net sales with comparable currencies increased 11.6%. Organic net sales with comparable currencies decreased -0.8%.
  • Adjusted EBITDA increased 114.6% to EUR 2.1 million (EUR 1.0 million) with an adjusted EBITDA margin of 3.8% (1.9%).
  • Adjusted EBITA increased 198.9% to EUR 1.6 million (EUR 0.6 million) with an adjusted EBITA margin of 3.0% (1.1%).
  • Adjusted operating profit increased 158.1% to EUR 0.3 million (EUR -0.4 million) with a margin of 0.5% (-0.9%)
  • Earnings per share was EUR -0.01 (-0.07) at end of February 2024.

Outlook for financial year 2024 (unchanged)

Market uncertainty and weakness will persist in financial year 2024. Overall challenging market situation has lowered consumer confidence and demand. These factors will weaken the predictability and therefore Duell is not giving outlook for net sales for financial year 2024.

Duell will continue its profitability improvement programme and enhance the net working capital position in financial year 2024. Duell estimates adjusted EBITA to improve from previous year’s level.

CEO Jarkko Ämmälä:

The second quarter progressed as planned in a challenging market. The winter season in the Nordics was close to our expectations. Despite the difficult market situation in Sweden, our continued focus on the European market contributed to growth in net sales, even though Europe was in off-season.

Net sales increased by 10.2% while gross margin decreased from 26.5% to 25.2%. Factors affecting to the decline in the gross margin included delayed and additional transport costs due to Red Sea shipping challenges as well as specific inventory valuation adjustments in the review period. Adjusted EBITA increased to EUR 1.4 million from EUR 1.0 million last year. Net debt significantly decreased by approximately EUR 33 million thanks to the rights offering and improved net working capital.

We foresee the consumer demand still to remain slow due to overall market uncertainty. To respond to the prolonged soft market, we will continue our profitability improvement initiatives.

Key figures and ratios
EUR thousand

Q2 2024

(12/2023-

2/2024)

Q2 2023 (12/2022-2/2023)

H1 2024
(9/2023-2/2024)

H1 2023

(9/2022-2/2023)

FY 2023
(9/2022-8/2023)

Net sales

28,155

25,543

55,169

51,294

118,832

Net sales growth, %

10.2

-5.7

7.5

-5.4

-4.2

Net sales with comparable currencies, %

15.9

-2.5

11.6

-3.4

-1.0

Organic net sales growth with comparable currencies, %

4.0

-17.3

-0.8

-18.6

-15.6

Gross margin

7,106

6,758

13,562

         12,493

28,344

Gross margin, %

25.2

26.5

24.6

24.4

23.9

EBITDA

-551

1,090

-744

733

4,307

EBITDA margin, %

-2.0

4.3

-1.3

1.4

3.6

Items affecting comparability, Gross margin*

-

-

-

-

131

Items affecting comparability, EBITDA*

2,099

103

2,830

239

1,193

Adjusted EBITDA

1,548

1,193

2,086

972

5,499

Adjusted EBITDA margin, %

5.5

4.7

3.8

1.9

4.6

EBITA

-728

873

-1,185

312

3,401

EBITA margin, %

-2.6

3.4

-2.1

0.6

2.9

Adjusted EBITA

1,371

976

1,645

550

4,594

Adjusted EBITA margin, %

4.9

3.8

3.0

1.1

3.9

Operating profit

-1,422

374

-2,571

-685

1,041

Operating profit margin, %

-5.1

1.5

-4.7

-1.3

0.9

Adjusted operating profit

677

478

259

-446

2,234

Adjusted operating profit margin, %

2.4

1.9

0.5

-0.9

1.9

Earnings per share, basic, EUR

0.00

-0,01

-0.01

-0.07

-0.1

Earnings per share, diluted, EUR

0.00

-0.01

-0.01

-0.07

-0.1

Number of outstanding shares at the end of the period, basic

1,038,546,116

25,454,574

1,038,546,116

25,454,574

30,545,474 

Number of outstanding shares at the end of the period, diluted

1,038,546,116

25,454,574

1,038,546,116

25,454,574

30,545,474 

Weighted average number of shares, basic

661,930,492

25,454,574

346,237,983

25,454,574

27,937,259 

Weighted average number of shares, diluted

661,930,492

25,454,574

346,237,983

25,454,574

27,937,259 

Investments in tangible and intangible assets excluding acquisitions

172

669

439

1,083

2,481

Net debt

29,917

62,785

29,917

62,785

38,248

Net working capital

58,897

66,912

58,897

66,912

49,873

Operating free cash flows

-1,399

-1,412

-7,559

-4,903

16,392

*) Items affecting comparability:  Cost saving program costs of EUR 42 thousand and Rights offering costs of 2 788 thousand in H1 2024 (Cost saving program costs of EUR 239 thousand in H1 2023). 

Operational key figures

Q2 2024

(12/2023-2/2024)

Q2 2023

(12/2022-2/2023)

H1 2024
(9/2023-2/2024)

H1 2023

(9/2022-2/2023)

FY 2023 (9/2022-8/2023)

Number of brands

564

529

564

529

562

Share of own brand sales, % of total

21.2

29.9

21.4

25.9

21.8

Share of online sales, % of total

26.4

25.1

25.4

23.2

24.7

Equity ratio, %

53.1

25.5

53.1

25.5

38.6

Full-time equivalent employees

216

210

214

213

218

*) Including seasonal employees and 24 TranAm employees from March 2023 onwards.

Significant events during the reporting period

The Annual General Meeting and Board’s organisational meeting was held on 5th of December.

Duell paid out the deferred purchase price relating to the acquisition of Tran-Am Ltd (approximately GBP 4.9 million) on December 28, 2023.

Magnus Miemois M.Sc. started as COO and Deputy CEO of Duell Corporation latest on January 1, 2024. The plan is for Magnus Miemois to become Duell’s CEO during 2024. In connection with this change, the current CEO Jarkko Ämmälä will become Duell’s Commercial Director with responsibility for Key Accounts, Key suppliers, and strategic initiatives.

The rights offering took place between December 7, 2023-December 21, 2023, which was oversubscribed.  The total number of shares increased from 30,545,474 shares to 1,038,546,116 shares. Duell received gross proceeds of approximately EUR 20.2 million and net proceeds of approximately EUR 17.7 million from the share issue. Trading in the new shares started on January 3, 2024. 

The renegotiated financing agreement between Duell and Nordea entered into force as all subsequent conditions of the agreement were fulfilled.

Duell’s Chief Financial Officer (CFO) and member of the Management Team, Riitta Niemelä, announced on January 30, 2024, of the decision to leave the company. Niemelä will continue in her current position until the end of April 2024. The recruitment process for the successor has started.

Duell announced on February 6, 2024, about Board’s resolution to establish a new share-based incentive plan (Restricted Share Unit Plan 2024-2025) for selected key employees of the Group. The purpose of the plan is to align the interests of the company’s shareholders and key employees to increase the company’s value in the long-term and to commit key employees to the company. The target group consists of CEO, members of the Management Team and other selected key employees.

Significant events after review period

Duell appointed Juha Lindroos as the company's interim Chief Financial Officer (CFO) and member of Management Team from March 18, 2024. Juha Lindroos has long experience in financial operations expertise and management in several companies including listed companies and has also a background in the wholesale industry. Duell will continue the recruitment process for appointing a permanent successor.

Webcast for investors and media

Duell will arrange a live webcast for investors and media in English on April 4, 2024, at 10.30 am EET. The webcast can be followed online through this link. A presentation will be held by CEO Jarkko Ämmälä, CFO Riitta Niemelä and IR Pellervo Hämäläinen. A recording of the event will be available later the same day at www.investors.duell.eu.

Medium-term financial targets (3-5 years) (Unchanged)

Growth: Net sales in the range of EUR 200-300 million in medium term, achieved through yearly growth organically and inorganically.

Profitability: adjusted EBITA margin of at least 13% in the medium-term.

Leverage: net debt to adjusted EBITDA ratio in the range of 2-3. Leverage may temporarily exceed the target range (for example, in conjunction with acquisitions).

Duell’s Financial Reporting and Annual General Meeting in 2024

During the year 2024, Duell will publish financial information as follows:

  • Business report September 2023–May 2024 (Q3 2024) on Wednesday, July 3, 2024.
  • Financial Statements Bulletin for the fiscal year 9/2023–8/2024 (Q4 2024) on Wednesday, October 9, 2024.          

Annual Report the week starting on October 21, 2024.

Duell’s Annual General Meeting of shareholders is scheduled for Wednesday, November 20, 2024.

The financial reviews and the annual report will be available after publication on the company's investor website at https://sijoittajat.duell.eu/en/reports_and_presentations.

Further information

Jarkko Ämmälä, CEO
Duell Corporation
+358 50 056 5149
jarkko.ammala@duell.eu 

Pellervo Hämäläinen, Communications and IR Manager
Duell Corporation
+358 40 674 5257
pellervo.hamalainen@duell.eu

Certified Advisor

Oaklins Merasco Ltd, +358 9 612 9670 

Duell Corporation(Duell) is an import and wholesale company based in Mustasaari, Finland, established in 1983. Duell imports, manufactures, and sells products through an extensive distribution network in Europe covering approximately 8,500 dealers. The range of products includes approximately 150,000 items under more than 550 brands. The assortment covers spare parts and accessories for motorcycling, bicycling, ATVs/UTVs, mopeds and scooters, snowmobiling, and boating. Logistics centres are in Finland, Sweden, Netherlands, France, and the UK. Duell’s net sales in 2023 was EUR 119 million and it employs over 200 people. Duell’s shares are listed on the Nasdaq First North Growth Market Finland marketplace. www.duell.eu

Attachments

  • Duell Corporation September 2023-February 2024 Financial Report.pdf

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