Medicanatumin: COVID-19 headwinds continue - Introduce

Q3’20 vs. ABGSCe details
MedicaNatumin reported net sales of SEK 45.9m (vs. ABGSCe SEK 60.5m), corresponding to 18.5% y-o-y growth. The patterns from Q2 continued into Q3, when growth was primarily driven by Norway (now ~50% of group sales vs. 16% in 2019), following the transformative acquisition of Vitalkost. The gross margin increased 2.2pp q-o-q, but with Norwegian sales primarily consisting of eco-foods, the gross margin of 48.9% declined 11.8pp y-o-y (-4.8pp vs. ABGSCe of 53.7%). Despite lower sales volumes than expected, we note that cost control was solid, with adj. EBIT of SEK 1.7m, for a margin of 3.7%, only slightly below ABGSCe at SEK 2.1m. Much like in Q2, MedicaNatumin continued to feel the negative effects from COVID-19 in Q3. For example, sales in Sweden declined 46% y-o-y due to its exposure to tourist-intensive natural health stores. B2B and exports have also seen continued negative effects of shutdowns, with some launch delays and delivery challenges.