Significant improvement in operating profit and margins
January-
- Net sales amounted to
SEK 929 million (974), corresponding to growth of -4.6 percent (0.2). The organic change in net sales was -4.2 percent (-3.4). -
Gross profit amounted to
SEK 269 million (256), corresponding to a margin of 29.0 percent (26.3). -
Operating profit/loss was
SEK 38 million (16), corresponding to a margin of 4.1 percent (1.6), and operating profit/loss, before items affecting comparability, wasSEK 38 million (21), corresponding to a margin of 4.1 percent (2.2). -
Profit/loss for the period was
SEK 16 million (-6), corresponding to earnings per share ofSEK 0.11 (-0.04) before and after dilution. -
Cash flow from operating activities amounted to
SEK 21 million (82). -
The Board of Directors of
Midsona AB (publ) revised and adopted both new financial targets and a new strategy for the Group. Midsona has received awards for its sustainability work, firstly from the global environmental initiative CDP for its climate strategy and leadership, and secondly as the stock exchange's most sustainable company in the grocery category, taking second place overall, in the Sustainable Companies rankings for 2023.
Comment by the CEO
In the first quarter, we took several steps forward that strengthened our position. As a result of our efforts, all three divisions reported both improved margins and an improved operating profit. An important milestone for us during the period was the launch of our new strategy, which sets our course for the future.
In terms of the external environment, the rise in inflation slowed and there were signs of imminent interest rate cuts. Such an outlook naturally has an effect on people's confidence and consumption patterns, allowing a larger share of households to prioritise healthy, sustainable and high quality food. That being said, significant uncertainties remain, such as the unstable geopolitical situation, the impact of climate change on this year's crops and the weakening of the Swedish krona.
Margins improved by the measures taken
Operating profit for the period amounted to
The improvement in the Group's earnings was mainly driven by the higher gross margin. This was a result of well-chosen price increases, and also of the streamlining of our ranges, with a focus on best sellers and the termination of unprofitable contracts. Efficiency improvements in production also began to have an impact.
The gross margin increased to 29.0 percent (26.3), despite continued relatively high raw material prices. The operating result for the period improved significantly, despite the decline in sales.
All divisions improved their profitability
We saw a broad improvement in the first quarter, as all three divisions improved their operating profit compared with last year. The Nordics Division remained the strongest with an EBIT margin before non-recurring items of 9.2 percent (8.0). Friggs continued to sell well throughout the Nordic region and Helios developed well in
The North Europe Division increased its operating profit to
The South Europe Division increased its operating profit to
New strategy and new financial targets
During the first quarter, we launched the Group's new strategy, which is largely focused on increasing profitability and strengthening our market position for the future. To achieve this, we will build an even stronger organic platform, develop our strong health food brands and achieve greater efficiency and harmonisation across the organisation. We are confident that our food and health food brands are very well positioned to attract consumers who prioritise their health and want to eat more organic products. As part of the strategy review, we updated our financial targets, which we are now working to achieve:
- Organic growth averaging 3-5 percent annually
- EBIT margin (before items affecting comparability) to exceed 8 percent by 2027
- Net debt/adjusted EBITDA of up to 2.5 x
Recognition of our sustainability efforts
Sustainability is the foundation of our business strategy. This makes it especially pleasing that the non-profit organisation CDP (formerly the
Outlook for 2024
We are getting clear indications that we are doing the right things, but we have higher ambitions and have much more to do. We can see that the continued streamlining and coordination of our product range is having a clear impact on earnings and we are continuing to work to create the conditions for organic growth. Recent contracts in
Peter Åsberg
President and CEO
FOR MORE INFORMATION, PLEASE CONTACT:
Peter Åsberg, CEO och President
Phone: +46 (0)730 26 16 32
E-mail: peter.asberg@midsona.com
Max Bokander, CFO
Phone: +46 708 65 13 64
E-mail: max.bokander@midsona.com
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