In This Article:
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Organic Sales Growth: 2.6% for the quarter.
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EBIT: Improved to SEK 32 million from SEK 18 million last year.
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Gross Margin: Increased from 25.2% to 28%.
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Net Debt/EBITDA Ratio: Reduced to 2.0 from 4.0 last year.
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Net Result Improvement: Improved by SEK 27 million.
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Cash Flow from Operating Activities: SEK 42 million, SEK 45 million weaker than last year.
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Private Label Business Growth: 6.6% during the quarter.
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License Brand Growth: 19.2% driven by increased scope in Finland.
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Available Cash: SEK 575 million, representing 15% of last 12 months net sales.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Midsona AB (FRA:9KF) achieved organic sales growth for the second consecutive quarter, with a growth rate of 2.6% in Q3.
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The company's EBIT improved significantly from SEK 9 million last year to SEK 32 million this year, indicating strong operational performance.
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Gross margin increased from 25.2% last year to 28% this year, despite high raw material prices.
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Net debt to EBITDA ratio improved significantly, reducing from 4 times last year to 2 times this year, showcasing enhanced financial stability.
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The Nordic division showed strong performance, with a 35% improvement in operating profit to SEK 66 million, driven by a more profitable product mix.
Negative Points
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Overall sales were slightly down due to currency effects, despite organic growth.
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The company faced production constraints in its German factories, limiting potential sales growth in the organic segment.
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Conventional health food brands saw a decline due to the termination of less profitable contracts.
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The North division posted a loss of SEK 3 million, although it was an improvement from the previous year's loss.
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Market conditions remain challenging, with some markets and channels still depressed, affecting overall growth potential.
Q & A Highlights
Q: Could you provide an update on the progress of SKU reduction and the remaining work in this area? A: We are more than halfway through the SKU reduction process. It has improved our model profile despite some lower net in certain categories. We are setting up a central purchasing organization and hiring a purchasing director, which will continue into 2025. Our focus remains on improving our modern profile while achieving organic growth targets. - Peter Asberg, CEO
Q: Regarding the new organizational structure, will this lead to higher OPEX due to new hires, or is it just an adjustment? A: It's primarily an organizational adjustment. We are flattening the organization with a stronger headquarters and fewer resources in divisions. This should not significantly increase OPEX, although we are hiring a sourcing director. Tight cost control remains crucial. - Peter Asberg, CEO