* Adj. EBIT 29% above estimates at SEK 47m * '26e could bring both organic and structural growth * Consensus EBIT revisions likely up h.s.d.
ANNONS
Q4'25 report
The Q4 report was materially better than expected on adj. EBIT. Sales amounted to SEK 933m (2% vs ABGSC 918m), for an organic growth of 0.7% (1.7pp vs ABGSC -1%). Adj. EBIT came in at SEK 47m (29% vs ABGSC 36m), for a margin of 5% (1pp vs ABGSC 4%). Sales were driven by Midsona's own consumer brands (6% y-o-y). Licensed brands showed growth of -15%, partly on terminated distribution agreements. B2B sales in North Europe were weak as Midsona is changing its product range, which was positive for earnings. The adj. gross margin of 29% was 0.6pp above our estimate. Adj. EBIT was better than expected, as Midsona has successfully started to implement its cost savings initiative and an improved product mix, with its own brands in focus. Free cash flow (ex. M&A) was also strong at SEK 144m (vs. ABGSCe 70m) due to higher than expected release in NWC (SEK 74m vs. ABGSCe 31m) and a positive capex effect of SEK 3m due to a SEK 10m tangible divestment.
Thoughts and outlook
The CEO comments on tendencies of stabilisation in consumer households, but the optimism is muted by comments on uncertainties in the world. We are encouraged by the growth in its own consumer brands and believe that the underlying solid growth and profitability improvements are indicative of a brighter '26e, as the market hopefully improves and Midsona continues to strengthen its profitability. Moreover, a return to both organic and structural growth is mentioned, as well as a robust balance sheet, and the possibility for future M&A therefore does not seem unlikely.
Likely positive consensus EBIT estimate revisions
The share, which is has been strong into numbers, is trading at ~8x-6x '26e-'27e EV/EBITA on our unrevised estimates. Our initial understanding of the report as well as a mechanical calculation suggest that consensus' adj. EBIT estimates for '26e-'27e could be positive within a high-single-digit range.
