Midsona - Interim Report January-March 2021
A quarter of continued growth and good profitability
January-March 2021 (first quarter)
- Net sales amounted to SEK 965 million (946), but with challenges in organic growth as a result of the previous year’s hoarding effects.
- EBITDA amounted to SEK 94 million (107) before items affecting comparability, corresponding to a margin of 9.7 percent (11.3).
- Profit for the period was SEK 33 million (47), corresponding to earnings per share of SEK 0.50 (0.72) before and after dilution.
- Free cash flow amounted to SEK -26 million (2).
- The brand Kung Markatta was named Sweden's Greenest Brand 2020 in a survey of how the Swedish people view issues of sustainability and the brand.
Comment by the CEO
Midsona delivering according to plan
The beginning of 2021 is facing tough comparative figures with last year’s product hoarding and strong first quarter. Our business is still developing according to plan, both in terms of net sales and earnings. In the first quarter, we did not see any hoarding tendencies or restraint, but consumers appear instead to have largely resumed earlier consumption patterns. Net sales rose two percent to SEK 965 million. Adjusted for acquisitions and negative currency effects, organic growth declined by nearly 6 percent. Our prioritised brands managed significantly better, mainly driven by a continued successful roll-out of Davert and Happy Bio.
The net sales increase is mainly attributable to the acquisition of the Danish System Frugt, which according to plan experienced its seasonally weakest quarter, however. In order to not risk disrupting sales in the important fourth quarter, the withdrawal of synergies was not begun until the first quarter of this year. The integration is proceeding according to plan. We expect synergies to gradually have greater impact during the year and have successfully begun rolling out System Frugt’s assortment to the other Nordic countries.
In the Nordic region, which was the region where we saw the strongest hoarding effects last year, we saw the relatively weakest development this year. When it comes to the food service industry, meaning restaurants and other dining, demand remained weak.
Our organic roll-out is going strong
Our broad assortment of organic products for grocery trade in Europe – the brands Davert in the DACH region and Happy Bio in France and Spain – showed a very strong quarter. We have double-digit growth with Davert and nearly triple-digit growth with Happy Bio, primarily as a result of new listings at several leading actors. During the quarter, we spent just over SEK 10 million more than usual on consumer marketing and other sales promotion measures, which was a venture that only partly paid off during the quarter. Above all, the investments were building for future product and brand awareness. Altogether, we can proudly confirm that our European expansion is functioning very well.
We look forward to the future with confidence
During the quarter, we continued to assess possible acquisitions in Europe. Our strong history of incorporating products and businesses, together with our size and our geographic coverage, makes us an attractive partner. As for much else, the pandemic has dampened activity, but we now see signs that the acquisition market is slowly beginning to open up and we have entered some processes and promising discussions. In accordance with our strategy, I hope and believe we will be able to make further complementary acquisitions in one of our three regions in 2021.
Considering the product hoarding that took place in the first quarter of 2020 in connection with the beginning of the pandemic, the comparative figures for the first quarter of this year are challenging. April 2020 was the last month of hoarding and thereafter we encounter more normal comparative figures. For the remainder of 2021, synergies will gradually increase, we believe in continued success in the DACH and France/Spain regions and we see continued potential in the Nordic region and in the food service industry.
We have a strong portfolio of healthy products that the consumers have clearly shown that they appreciate, and we are steadfast in our humble optimistic view of the future. The strategy we followed for several years has proven itself and I look to the future with confidence. The mood in the organisation is positive and I am looking forward to keeping you updated.
President and CEO
This is information of the type that Midsona AB is obligated to make public in accordance with the EU Market Abuse Regulation. The information was submitted for publication through the agency of Peter Åsberg and Max Bokander on 29 April 2021 at 8am CET.
For more information, please contact MD and CEO Peter Åsberg, telephone +46 (0)730 26 16 32, or CFO Max Bokander, telephone +46 (0)708 65 13 64.
Midsona develops and markets strong brands within health and well-being, with products that help people live a healthier and more sustainable life, with an increased understanding of the origin of the raw material and with transparency as to the content. The Midsona share is listed on NASDAQ OMX Stockholm, Mid Cap. For more information www.midsona.com/en