Midsona: Another step in the right direction - ABG

We cut '24e-'25e EBITA by 9-6%
Margin recovery likely to be driven by better sales mix
Trading at '24e EV/EBITA of ~10x


On the right path after two tough years

The Q4'23 numbers beat our estimates on sales (+4% vs. ABGSCe) but missed on adj. EBITDA (-9% vs. ABGSCe). In similar fashion to the previous quarter, Midsona continued its SKU reduction plan by divesting two brands (Kan Jang and Arctic Root). We were positively surprised by the fact that Midsona managed to divest these two brands, as the management team had spoken of discontinuations rather than divestments prior to Q4'23. The gross margin continues to improve, as margin-dilutive SKUs disappear from the company's portfolio. On the matter of cash flow, the company appears to have overachieved in terms of its working capital release, but the release is positive nonetheless.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/midsona/Equity-research/2024/2/midsona---another-step-in-the-right-direction/