Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Midsona AB (FRA:9KF, Financial) achieved organic growth of 1.6% in Q1 2025, driven by brand and private label performance.
- The company reported improved cash flow and efficient working capital management, with a SEK40 million improvement compared to last year.
- Net debt to EBITDA ratio improved significantly, ending at 1.5 times, down from 2.5 times the previous year.
- The company achieved a prestigious CDPA sustainability rating for the second consecutive year.
- Midsona AB (FRA:9KF) saw solid growth of 5% in the organic category for two consecutive quarters, despite challenging market conditions.
Negative Points
- Gross margin was slightly down due to temporary higher production expenses and an unfavorable sales mix.
- The company faced bottlenecks in production at the beginning of the quarter, impacting sales potential in divisions north and south.
- There was a decline of 4% in conventional healthy products due to the cessation of unprofitable private label contracts.
- The Nordic division experienced a decline in sales due to exiting unprofitable private label contracts and stopping some licensing agreements.
- The net result was negatively impacted by SEK30 million related to the announced change of CEO.
Q & A Highlights
Q: Is there potential for expanding the Frigs brand beyond Denmark into other countries?
A: Peter Asberg, President, CEO: Currently, the focus is on Denmark, but expanding Frigs into other countries is a potential opportunity. The brand has shown success in expanding within the Nordics, indicating potential for further growth outside the region.
Q: Can Frigs products cater to tastes outside the Nordics?
A: Peter Asberg, President, CEO: Frigs is a strong and unique brand that has successfully expanded across Nordic markets despite varying taste profiles. There is potential for the brand to cater to other nationalities in Europe.
Q: Were gross margins affected by ramp-up costs, and will these costs recur?
A: Peter Asberg, President, CEO: Yes, gross margins were impacted by ramp-up costs in Germany and Spain. However, production levels have now stabilized, so these costs should not recur unless new ramp-ups are initiated.
Q: What is the outlook for production costs following the recent ramp-ups?
A: Peter Asberg, President, CEO: Production costs are expected to stabilize as the company can now better meet demand following the ramp-ups in Germany and Spain.
Q: Any final comments as this is your last call as CEO?
A: Peter Asberg, President, CEO: It has been a privilege to work with the team and stakeholders over 70 quarterly reports. I extend my thanks and best wishes to the team and my successor, Henry Emerson.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
