Duell Corporation full year 2024 financial report September 2023–August 2024

This company announcement is a summary of Duell’s financial year report for September 2023–August 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/en/reports_and_presentations.

Progress with both Central European growth strategy and profitability improvements

Full year and comparative figures presented below are derived from published financial statement. Financial year and quarterly figures are unaudited. The comparison period figures are based on audited statements. 

June 2024-August 2024 "Q4 2024" (comparable figures in parenthesis 6/2023-8/2023):

• Net sales increased 5.8% to EUR 31.6 million (EUR 29.9 million). Net sales with comparable currencies increased 2.0 %.
• Adjusted EBITDA was EUR 1.6 million (EUR 0,5 million) with an adjusted EBITDA margin of 5.0% (1.6%).
• Adjusted EBITA was EUR 1.4 million (EUR 0.2 million) with an adjusted EBITA margin of 4.2% (0.8%).
• Adjusted operating profit was EUR 0.6 million (EUR -0.4 million) with a margin of 2.0% (-1.5%).

September 2023–August 2024 "FY 2024" (comparable figures in parenthesis 9/2022-8/2023):

• Net sales increased 4.9% to EUR 124.7 million (EUR 118.8 million). Net sales with comparable currencies increased 5.7%. Comparable net sales growth was 0.3%.
• Adjusted EBITDA was EUR 7.1 million (EUR 5.5 million) with an adjusted EBITDA margin of 5.7% (4.6%).
• Adjusted EBITA was EUR 6.2 million (EUR 4.6 million) with an adjusted EBITA margin of 5.0 % (3.9%).
• Adjusted operating profit was EUR 3.4 million (EUR 2.2 million) with a margin of 2.7% (1.9%).
• Earnings per share was EUR -0.004 (EUR -0.10) at end of August 2024.

Guidance 2025

Markets have somewhat stabilised, but consumer sentiment remains fragile due to uncertainties. Duell expects the demand over the next 12 months to be slightly better than the comparison period, but there may be variations between product categories. The industry in which Duell operates remains relatively fragmented, which provides long-term opportunities and favours the larger players, of which Duell is one.

Therefore, our guidance for financial year 9/2024-8/2025 is, that:

• Duell expects that organic net sales with comparable currencies will be at the same level or higher than previous year.
• Duell will continue to focus on improving profitability and expects adjusted EBITA to improve from last year’s level.

CEO Magnus Miemois:

I am quite happy with the performance of team Duell in the fourth quarter and the fiscal year overall. For the financial year 2024, net sales increased by five percent to EUR 125 million and adjusted EBITA increased by 34 percent to EUR 6.2 million. Our strategic focus on the central European market progressed well. As a result, we managed to grow business volumes, in a still somewhat uncertain market situation. This strategic focus has served us particularly well in this moment in time where the Nordics market demand remains soft. Our largest central European operations are in France and UK, but Benelux countries and Germany are also important regions in our growth equation.

In the Nordics motorcycle registrations declined, which is an indicator of lower market demand for motorcycle parts and accessories. On the other hand, we had good demand for bicycle parts and accessories in the Nordics market, where we are known for having top brands and a well working logistics setup for customers in Finland, Sweden and Norway.

Our program focused on profitability improvements, applying a wide array of initiatives, progressed well throughout the year and reached the point where we could continue the activities embedded into operational processes. Apart from the results, I consider this also as a milestone in developing our ability to execute, to identify opportunity and convert actions into tangible results. An important capability in every high performing organisation, I believe.

In June 2024 a new operating model was introduced. The aim of this operating model is to improve efficiency with a clearer market focus, to drive growth and develop strategic partnerships. The new operating model will also enable more effective integration at group level to accelerate organic growth. It will also provide a stronger emphasis on purchasing operations and the development of the brand portfolio.

The financial position of the company significantly improved during the year. The additional capital raised through the rights issue in January was the major step, but also the efforts made to improve profitability were important in having reached a more stable situation. We also progressed with inventory level optimizations and the inventory turnover rate is improving in the right direction. We are gradually shifting to a more data driven decision making regarding assortment and inventory levels. 

Many of the above-mentioned things will remain on our agenda in the current financial year, and I would like to thank the entire Duell organisation for their accomplishments in financial year 2023-2024.We expect the demand over the next 12 months to be slightly more favourable, but there may be variations between product categories. Despite market uncertainties, our aim is to continue improving our performance in fiscal year 2025.

Key figures and ratios EUR thousand	Q4 2024 (6/2024-8/2024)	Q4 2023 6/2023-8/2023)	FY/ 2024 (9/2023-8/2024)	FY 2023 (9/2022-8/2023)
Net sales	31,579	29,866	124,652	118,832
Net sales growth, %	5.8	-14.0	4.9	-4.2
Net sales growth with comparable currencies, %	2.0	-9.5	5,7	-1.0
Organic net sales growth with comparable currencies, %	2.0	-16.2	0,3	-15.6
Gross margin	7 324	6,550	30,339	28,344
Gross margin, %	23.2	21.9	24.3	23.9
EBITDA	2,136	101	4,564	4,307
EBITDA margin, %	6.8	0.3	3.7	3.6
Items affecting comparability, Gross margin*	421	-131	421	-131
Items affecting comparability, EBITDA**	101	-370	-2,998	-1,193
Adjusted EBITDA	1 614	471	7,141	5,499
Adjusted EBITDA margin, %	5.1	1.6	5.7	4.6
EBITA	1,885	-145	3,628	3,401
EBITA margin, %	6.0	-0.5	2.9	2.9
Adjusted EBITA	1 363	225	6,205	4,594
Adjusted EBITA margin, %	4.3	0.8	5.0	3.9
Operating profit	1,179	-828	842	1,041
Operating profit margin, %	3.7	-2.8	0.7	0.9
Adjusted operating profit	657	-458	3,419	2,234
Adjusted operating profit margin, %	2.1	-1.5	2.7	1.9
Earnings per share, basic, EUR	0.001	-0.06	-0,004	-0.1
Earnings per share, diluted, EUR	0.001	-0.06	-0,004	-0.1
Number of outstanding shares at the end of the period, basic	1,038,546,116	30,545,474	1,038 546,116	30,545,474
Number of outstanding shares at the end of the period, diluted	1,036,334,706	30,545,474	1,036,334,706	30,545,474
Weighted average number of shares, basic	1,038,546,116	30,545,474	692,113,705	27,937,259
Weighted average number of shares, diluted	1,038,344,706	30,545,474	691,926,399	27,937,259
Investments in tangible and intangible assets excluding acquisitions	118	1,004	746	2,481
Net debt	19,563	38,248	19,563	38,248
Net working capital	48,323	49,873	48,323	49,873
Operating free cash flows	10,130	10,599	5,785	16,392

*) Items affecting comparability, gross margin: EUR 421 thousand in 09/2023-08/2024, generated from change of accounting principles related to inventory.

**) Items affecting comparability, EBITDA: Totally EUR -2,988,000 in 09/2023-08/2024. EUR 338,000 was generated from changing accounting principles related to receivables, restructuring costs EUR -371,000, rights issue EUR -2,818,000 and other non-recurring items EUR -147,000. 

Inventory and receivables, change in accounting principles

Duell has changed its accounting principles related to inventory valuation and overdue receivables. The reason for this change is to harmonise and simplify the policies in the group and adopt commonly applied practices in wholesale distribution business. Inventory valuation is done according to inventory aging, applying set write down profiles. The principles related to provisions for bad debt have been tightened and provisions made at given overdue thresholds. This change impacts both income statement and balance sheet positions, as detailed in the below table. 

Income statement impact	MEUR	Balance sheet impact	MEUR
Impact on gross margin (inventory)	0.4	Inventory and receivables valuation impact	-4.0
Impact on EBITDA (receivables)	0.3	Net tax impact	0.5
Net impact, income statement	0.8	Net impact, equity	-3.5

Operational key figures	Q4 2024 (6/2024-8/2024)	Q4 2023 6/2023-8/2023)	FY/ 2024 (9/2023-8/2024)	FY 2023 (9/2022-8/2023)
Number of brands	535	562	535	562
Share of own brand sales, % of total	15.9	15.0	18.0	21.8
Share of online sales, % of total	25.8	27.4	26.0	24.7
Equity ratio, %	55.0	38.6	55.0	38.6
Full-time equivalent employees, average*	215	224	215	218

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

Net sales, EUR thousand	Q4 2024 (6/2024-8/2024)	Q4 2023 6/2023-8/2023)	FY/ 2024 (9/2023-8/2024)	FY 2023 (9/2022-8/2023)
Nordics	15,895	15,152	66,162	69,926
Central Europe	15,684	14,714	58,490	48,906
Total	31,579	29,866	124,652	118,832

Significant events during the reporting period

Duell announced on June 1, 2024, to renew its organisation and Management Team from June 1, 2024, with the aim of investing in growth, developing strategic partnerships and improving efficiency.

Duell announced on June 10, 2024, that is has appointed Caj Malmsten as the company's Chief Financial Officer (CFO) and member of Management Team from August 19, 2024. Juha Lindroos served as Interim CFO in the period March to September 2024.

Duell announced on August 1, 2024, to commence a share buy-back programme based on the authorisation received from the Annual General Meeting on 5 December 2023. The shares to be repurchased will be used for a new share-based incentive plan for key employees of the Duell Group. The maximum number of shares to be repurchased is 6,760,000 shares, corresponding to approximately 0.7 percent of the total number of shares in the Company. The maximum amount to be used for the acquisition of shares is EUR 300,000.

Duell announced on August 28, 2024, that the Board of Directors of Duell Corporation has resolved to establish a new share-based incentive plan for key employees of the group. The Performance Share Plan 2025–2029 consists of three performance periods, covering the financial years 2025–2027, 2026–2028 and 2027–2029 respectively. The Board of Directors will resolve annually on the commencement and details of a performance period.

Significant events after review period

Duell announced to start change negotiations on October 9, 2024, with the aim of improving operational efficiency by adapting operations and workloads to the current market situation. The aim of the efficiency measures, which will affect the Group's all 220 employees, is to achieve annual cost savings of approximately EUR 1 million, mainly in the financial year 2025. The total estimated need for reductions in the Duell Group is up to 20 positions, including a maximum of 9 positions in Finland.

Duell announced on October 9, 2024 that the Board of Directors proposes that the combination of shares would be implemented by issuing new shares in the company without consideration and by redeeming shares in the company without consideration so that after carrying out the arrangements under this proposal, each existing 200 shares in the company would correspond to one (1) share in the company. The current total number of shares in the company is 1,038,546,116. 

Webcast for investors and media

Duell will arrange a live webcast for investors and media in English on October 9, 2024, at 10.30 am EET. The webcast can be followed online through this link. A presentation will be held by CEO Magnus Miemois, CFO Caj Malmsten and IR Pellervo Hämäläinen. A recording of the event will be available later the same day at wwhttps://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          

Annual Report 2024, which includes, among other things, the Report of the Board of Directors and the Company's financial statements, will be released in the week commencing 21 October 2024.

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

Financial reporting and Annual General Meetings in Financial Year 2025

During the Financial Year 2025, Duell will publish financial information as follows:

• Business report September 2024–November 2024 (Q1 2025) on Thursday, January 16, 2025.
• Half-year financial report September 2024–February 2025 (Q2 2025) on Thursday, April 10, 2025.
• Business report September 2024–May 2025 (Q3 2025) on Thursday, July 3, 2025.
• Financial statements bulletin for the financial year September 2024–August 2025 (Q4 2025) on Thursday, October 16, 2025.

Annual Report 2025, which includes, among other things, the Report of the Board of Directors and the Company's financial statements, in the week commencing October 27, 2025.

Duell’s Annual General Meeting of shareholders is scheduled for Tuesday, November 25, 2025.

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

Further information

Magnus Miemois, CEO
Duell Corporation
+358 50 558 1405
magnus.miemois@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 around 150,000 items under more than 550 brands. The assortment covers spare parts and accessories for Motorcycling, Bicycling, ATVs/UTVs, Snowmobiling, Marine and Garden/Forest categories. Logistics centres are in Finland, Sweden, Netherlands, France, and the UK. Duell’s net sales in 2024 was EUR 125 million and it employs over 200 people. Duell’s shares are listed on the Nasdaq First North Growth Market Finland marketplace www.duell.eu.