• Net sales amounted to SEK 918 million (893), corresponding to growth of 2.8 percent (–6.6). The organic change in net sales was 2.7 percent (–11.0).
• Gross profit amounted to SEK 265 million (222), corresponding to a margin of 28.9 percent (24.9), and gross profit, before items affecting comparability, amounted to SEK 265 million (236), corresponding to a margin of 28.9 percent (26.4).
• Operating profit/loss amounted to SEK 22 million (–15), corresponding to a margin of 2.4 percent (–1.7), and operating profit/loss, before items affecting comparability, amounted to SEK 22 million (–1), corresponding to a margin of 2.4 percent (–0.1).
• Profit/loss for the period amounted to SEK 3 million (–32), corresponding to earnings per share of SEK 0.02 (–0.22) before and after dilution.
• Cash flow from operating activities amounted to SEK –19 million (17).

January–June 2024 (six months)

• Net sales amounted to SEK 1,847 million (1,867), corresponding to growth of –1.1 percent (–3.2). The organic change in net sales was –0.9 percent (–7.2).
• Gross profit amounted to SEK 534 million (478), corresponding to a margin of 28.9 percent (25.6), and gross profit, before items affecting comparability, amounted to SEK 534 million (492), corresponding to a margin of 28.9 percent (26.4).
• Operating profit/loss amounted to SEK 60 million (1), corresponding to a margin of 3.2 percent (0.1), and operating profit/loss, before items affecting comparability, amounted to SEK 60 million (20), corresponding to a margin of 3.2 percent (1.1).
• Profit/loss for the period amounted to SEK 19 million (–38), corresponding to earnings per share of SEK 0.13 (–0.26) before and after dilution.
• Cash flow from operating activities amounted to SEK 2 million (99).

Significant events after the end of the reporting period

• Midsona is introducing a new organisation with central Marketing & Innovation, HR and Purchasing functions, as part of measures to increase coordination within the Group and create the right conditions for profitable growth.

Comment by the CEO

The second quarter of 2024 saw us take further steps towards achieving our new financial targets, consisting of an EBIT margin of more than 8 percent by 2027, average annual organic growth of 3–5 percent and net debt not exceeding 2.5 x adjusted EBITDA. The course has been set and now we need to keep following it.

Underlying demand for our core offering, namely high quality, healthy and sustainable food, is strong, but inflation and interest rate rises in recent years have slowed consumer demand for several of our product categories. We saw some signs of improvement during the quarter, however, as interest rate cuts contributed to increased confidence and a greater willingness to spend. The clear fall in inflation is also helping to shift the focus from price negotiations to new business. As a result we were able to return to organic growth in the second quarter.

Improvement in the gross margin for the third consecutive quarter

The second quarter is usually the weakest quarter of the year for Midsona. This year the figures were boosted in the second quarter by the fact that Easter fell in the first quarter, as demand for our categories is weak during this holiday, at the same time as there were two fewer store and selling days in June than usual. Sales increased by 3 percent to SEK 918 million (893) during the quarter, an increase that might have been even greater if it had not been adversely affected by production bottlenecks, above all in Germany.

The Group’s operating profit/loss amounted to SEK 22 million (–15), and operating profit/loss, before items affecting comparability, amounted to SEK 22 million (–1), driven by increased sales and a stronger gross margin, which increased to 28.9 percent (26.4). For the third consecutive quarter, the gross margin increased, despite continued high raw material prices and temporarily higher production overheads at some production facilities. The improvement was driven by good price management, an improved product mix as a result of range rationalisation and the termination of unprofitable contracts.

Stronger results for all of the divisions

As during the first quarter of the year, we saw a clear improvement in the performance of all the divisions in the second quarter:

• For the Nordics, operating profit/loss, before items affecting comparability, improved to SEK 38 million (31), mainly driven by an improved gross margin, synergies realised from the restructuring programmes completed and good cost control. Sales reached SEK 591 million (593), due to certain challenges still affecting the own brand portfolio and the termination of unprofitable contract manufacturing assignments. Both Finland and Norway performed well, whereas demand was weaker in Denmark and Sweden. Among other things, this meant lower sales for some own consumer brands in the organic product category. The Friggs brand in the health food category continued to enjoy good sales growth.
• North Europe sales increased by 11 percent to SEK 223 million (201), mainly because of strong sales growth for the consumer brand Davert, as a result of new customer contracts, as well as new profitable contract manufacturing assignments. Overall, this contributed to an improved gross margin of 19.1 percent (15.2) and a significantly improved operating profit of SEK 5 million (–6). The strong sales performance would have had an even greater impact if deliveries had not been held up by production bottlenecks. We have addressed this by adding new shifts to increase capacity, with full effect by the third quarter of the year.
• For South Europe, sales increased by 5 percent to SEK 114 million (108) and operating profit/loss improved, amounting to SEK –2 million (–9). A strong sales performance was recorded for Spain generally, and for French grocery stores, but sales remained weak for French health food stores. We are of course not satisfied with the level of performance and have initiated activities to strengthen sales in the French health food stores and further improve production efficiency in the Spanish operations.

The ongoing implementation of our new strategy

The implementation of our new strategy to increase our profitability and achieve our financial targets continued according to plan. After the end of the period, a new organisational structure was presented in which central Marketing & Innovation, Purchasing and HR functions are being introduced in order to strengthen the foundations of profitable growth through increased central coordination between the divisions. Top talent is being recruited to the functions internally, to give them a flying start, and the new posts will entail membership of Group Management.

Outlook for 2024

The past quarter saw continued improvements for Midsona, although we still have much to do. We are taking further steps to create even stronger foundations for profitable organic growth. We believe that in 2024 we will continue to see gradual improvements. Our focus going forward is to implement our new strategy, to move us step by step towards the attainment of our financial targets.

Peter Åsberg

President and CEO