Lower sales that led to a weak earnings performance
April-June 2025 (second quarter)
- Net sales amounted to SEK 865 million (918), corresponding to a growth of -5.7 percent (2.8). The organic change in net sales amounted to -2.0 percent (2.7).
- Gross profit amounted to SEK 242 million (265), corresponding to a margin of 28.0 percent (28.9), and gross profit, before items affecting comparability, amounted to SEK 243 million (265), corresponding to a margin of 28.1 percent (28.9).
- Operating profit/loss amounted to SEK -7 million (22), corresponding to a margin of -0.8 percent (2.4), and operating profit/loss, before items affecting comparability, amounted to SEK 4 million (22), corresponding to a margin of 0.5 percent (2.4).
- Profit/loss for the period amounted to SEK -15 million (3), corresponding to earnings per share of SEK -0.10 (0.02) before and after dilution.
- Cash flow from operating activities amounted to SEK 5 million (-19).
- Henrik Hjalmarsson formally took up the position of President and CEO of Midsona on 23 June 2025.
- Midsona AB signed a new long-term financing agreement with Nordea Bank for a total credit line of SEK 950 million, including a global cash management solution.
January-June 2025 (six months)
- Net sales amounted to SEK 1,802 million (1,847), corresponding to a growth of -2.4 percent (-1.1). The organic change in net sales amounted to -0.3 percent (-0.9).
- Gross profit amounted to SEK 510 million (534), corresponding to a margin of 28.3 percent (28.9), and gross profit, before items affecting comparability, amounted to SEK 511 million (534), corresponding to a margin of 28.4 percent (28.9).
- Operating profit/loss amounted to SEK 17 million (60), corresponding to a margin of 0.9 percent (3.2), and operating profit/loss, before items affecting comparability, amounted to SEK 41 million (60), corresponding to a margin of 2.3 percent (3.2).
- Profit/loss for the period amounted to SEK -8 million (19), corresponding to earnings per share of SEK -0.05 (0.13) before and after dilution.
- Cash flow from operating activities amounted to SEK 40 million (2).
Significant events after the end of the reporting period
- Part of the plant-based protein alternatives production facility in Castellcir, Spain, was hit by a fire that resulted in major material damage but no injuries. This part of the production facility produces goods with an annual sales value of around SEK 75 million. The business is covered by property damage and business interruption insurance.
Joining forces after a challenging quarter
The second quarter of 2025 - and my first quarter reporting as President and CEO - was a disappointment with a 2 percent organic sales decline, mainly due to temporary setbacks in the Nordics. Combined with a slightly lower gross margin and stable overheads, this fall in sales resulted in a weak operating profit of SEK 4 million (22), before items affecting comparability. We are of course not satisfied with this and are working hard to reverse the trend and an early realisation on my part has been that we need to accelerate the pace at which we are implementing the strategy for profitable growth that was developed last year.
The gross margin for the period amounted to 28.1 percent (28.9), before items affecting comparability. The change is mainly due to a shift in mix, with a strong performance in contract manufacturing, with lower margins, although we remain selective about the contracts that we enter into. On the positive side I want to highlight the fact that both North Europe and South Europe reported growth, which helped the latter to break even for the period, marking a clear improvement on the previous year.
The work on strengthening our financial position continued during the quarter, and cash flow from operating activities improved, increasing to SEK 5 million (-19), mainly due to a more positive working capital trend. At the same time, interest expenses fell as our debt was lower and the interest rate environment was more favourable. At the end of the period, we signed a new long-term financing agreement with improved terms - an important milestone that puts us in an even better position to achieve long-term profitable growth.
The Group's own consumer brands reported a mixed performance during the quarter. The organic products category grew in the second quarter, posting a 1 percent organic increase, while sales decreased for the health foods and consumer health products categories. Organic growth amounted to -3 percent for own consumer brands, but when adjusted for the fact that there were fewer selling days in the quarter, sales were in line with the previous year. The Group's contract manufacturing performance remained strong during the quarter, driven by newly won business volumes.
Weak performance in the Nordics and a continued improvement in South Europe
For the Nordics, sales decreased organically by 7 percent in the second quarter due to the weak development of demand, temporary challenges related to an ongoing change in the business model for a health food brand going from direct to central distribution, and the termination of distribution agreements for two licensed brands. The overall effect was a weakened operating profit of SEK 25 million (38), before items affecting comparability. In the organic category, our own consumer brands performed well, as did our overall brand portfolio in the Norwegian market, but the combination of these factors was not enough to compensate for the loss in other areas.
For North Europe, sales increased organically by 9 percent in the quarter, with growth in both own consumer brands and contract manufacturing. Despite good cost control, operating profit/loss remained at SEK 5 million (5), due to a somewhat unfavourable sales mix, with a higher share of contract manufactured products, combined with increased production overheads to resolve capacity shortages in the production and logistics process and henge improve our capacity to deliver to our customers. During the period, we achieved the increase in production capacity that we sought to meet the overall demand for organic products, although we now have the potential to further improve the efficiency in our production facilities.
The positive trend continued for South Europe. An organic 2 percent sales growth, increases in the efficiency of the production facilities and good cost control improved our operating profit to SEK 0 million (-2). Sales volumes to the French grocery trade increased, partly due to improved listings, but could not fully compensate for the continued weak performance of health food stores. Sales growth was strong as a whole in the Spanish organic products market. After the end of the period, we suffered a fire at our Spanish production facility. Fortunately, no one was injured and, at the time of writing, all the administrative activities and parts of our production are in full operation, while we work with customers and partners to find solutions for the parts of production that are directly affected. The business is covered by property damage and business interruption insurance, and we are working to fully assess the financial consequences of the incident.
A focus on implementing the strategy
Our direction is clear - we are continuing to gather our forces and focus on profitable growth. The growing interest in sustainable and healthy foods among European consumers is giving us good reason for optimism and opening up new opportunities for the future. In the long term, I am also very positive about our prospects. The short-term outlook remains uncertain, however. Although the impact of the appreciation of the Swedish krona and the possible impact of tariffs on the Group is limited, the high level of uncertainty is a factor dampening consumers' willingness to consume and delaying the recovery in demand. Going forward, our focus will be on implementing our strategy even more vigorously, in order to strengthen our brands, increase our efficiency and improve our profitability.
Henrik Hjalmarsson
President and CEO
FOR MORE INFORMATION, PLEASE CONTACT:
Henrik Hjalmarsson, President and CEO
Mobile: +46 768 46 20 46
E-mail: henrik.hjalmarsson@midsona.com
Max Bokander, CFO
Mobile: +46 708 65 13 64
E-mail: max.bokander@midsona.com
ABOUT MIDSONA
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 Stockholm. For more information www.midsona.com.
This information is information that Midsona is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-07-17 08:00 CEST.
