Midsona: Margin improvements continue - ABG

Limited estimate revisions
Growth appears more capital-light than history suggests
Trading at '25e EV/EBITA of ~8x


A report without surprises

The Q3'24 numbers were broadly in line with our forecasts, with sales and EBIT beating our estimates by 1% and 2%, respectively. With a continued focus on the slimming of the SKUs, Midsona's gross margin has improved by ~230bps y-o-y. We believe that this trend is set to continue when the offering becomes even more focused. Our general impression is that Midsona can pass on the cost pressure in its COGS and opex base through price increases toward grocery retailers. However, the contract manufacturing business is often based on how individual contracts are formed, and we believe that the company will be more stringent in how it handles them, given the current strategic direction. Therefore, we would not be surprised if the company's contract manufacturing business will be of a higher quality several years from now compared to the last two years.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/midsona/Equity-research/2024/10/midsona---margin-improvements-continue/