INTERIM REPORT, JANUARY-SEPTEMBER 2014

Strong operating profit and improved operating margin in the third quarter

JULY TO SEPTEMBER 2014 (THIRD QUARTER)

• Net sales amounted to SEK 228 million (229).
• The gross margin was 46.1 percent (46.3).
• Operating profit amounted to SEK 22 million (19).
• Profit for the period was SEK 18 million (17).
• Earnings per share amounted to SEK 0.79 (0.75).
• Cash flow from continuing operations amounted to SEK 23 million (19).

JANUARY TO SEPTEMBER 2014 (NINE MONTHS)

• Net sales amounted to SEK 692 million (691).
• The gross margin was 45.8 percent (46.3).
• Operating profit amounted to SEK 50 million (48).
• Profit for the period was SEK 38 million (39).
• Earnings per share amounted to SEK 1.67 (1.71).
• Cash flow from continuing operations amounted to SEK 41 million (53).

Comment by the CEO
Midsona’s operating profit improved to SEK 22 million, compared to SEK 19 million for the equivalent quarter last year. The operating margin rose to 9.6 percent (8.3) and was therefore close to the long-term target of 10 percent.

The favourable profit trend is mainly attributable to cost savings. However, sales fell marginally to SEK 228 million (229). Sales rose by just under 4 percent in Sweden and Finland and fell by more than 4 percent in Norway. It is likely that the unusually warm summer had a negative impact on sales for several major product groups. Sales were weak in July and August but significantly better in September.

In Sweden, profitability improved due to cost savings deriving from the reorganisation that was implemented. Price increases have partially offset the effect of the euro’s strengthening against the Swedish krona. In Norway, good cost control allowed profitability to improve despite sales declining somewhat. Profits weakened in Finland, although the comparison period included a capital gain from the divestment of a brand. Adjusted for the brand divestment, profit was in line with last year.

In general, the Group’s priority brands have performed well, both during the quarter and the over year to date. The trend has been particularly positive for the brands Friggs, Dalblads and Miwana, which all show double-digit growth to date this year. The first two of the aforementioned brands are well positioned in the growing health food segment. On the other hand, Naturdiet has continued to lose volumes as the weight control market has generally been weak.

As previously announced, we are, during the autumn, launching a number of new products under our well-known brands. This represents an important part of our strategy to generate organic growth by frequently offering innovative new products in the areas of health and well-being. This is the Group’s most extensive launch period ever and has been very well received among retailers, with good shop listings.

The Group’s strategy of focusing on priority brands in the areas of health and well-being has been successful. We are continuing our efforts to generate organic growth in our priority brands while actively analysing potential acquisitions. We will approach and, in time, achieve all of our financial targets – this will allow us to deliver on the vision of becoming the Nordic leader in health and well-being.

Peter Åsberg, President and CEO

  
For further information:
MD and CEO Peter Åsberg, +46 (0)730 26 16 32

This is information of the type that Midsona AB is obligated to disclose in accordance with the Swedish Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was published on 24 October, 2014, 8

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