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Midsona: Margin recovery to continue - ABG

We cut '24e-'26e adj. EBITA by 8-4%
Should break seven-quarter negative org. decline streak
Trading at '24e EV/adj. EBITA of ~10x


What to expect in Q1'24

We anticipate a y-o-y organic decline of -7% for Q1'24, which we expect will mark the final quarter with negative y-o-y growth in a string of seven quarters. Starting in mid-Q1, a minor positive effect from price negotiations with grocery retailers should offset product and brand discontinuations somewhat. We expect Q1 sales of SEK 906m and adj. EBITA of SEK 44m, which implies a margin of 4.8%, as well as operating cash flow of SEK -113m as we expect working capital tie-up in the quarter.
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