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Third party research

Midsona: Starting to invest more in its best brands - ABG

Midsona

This is a third party research report and does not necessarily reflect our views or values

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Limited estimate revisions
We expect more solid growth from its own brands
Trading at '25e EV/EBITA of ~10x


Adj. EBIT slightly lower than expected on one-off cost

Q1 was in line with our estimates for sales, but slightly below for EBIT. The EBIT miss was partly due to a lower than expected gross margin, which was driven by temporarily higher production costs to meet high demand in Germany and Spain. While we expect the forecast margin expansion to come mainly from a better mix and higher scale, we are encouraged by the recent SKU rationalisation and Midsona's focus on key brands, such as the expansion of Friggs into Denmark. In addition, we continue to see some opportunities for Midsona to pass on incremental cost increases to grocery retailers in the current environment due to Midsona's "preferred supplier" status. Since the rights issue in '22, Midsona has focused on retaining profitable contracts, which seems to have borne fruit in the form of better delivery capacity in Q1.
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