Hi, everyone, and welcome to ABG Investor Days. My name is Nikola Kalanoski, and I'm an equity research analyst here at ABG. With us today, we have the CEO of Midsona, Peter Åsberg. He will present to us for about 20 minutes about this company, and then we will have an opportunity for a 5-minute Q&A session. With that said, Peter, the floor is yours. Thank you, Nikola, and good morning, everyone. I would like to stay on this first picture for a while because this is really the essence of Midsona. Midsona is about strong brands with health and well-being perspectives. Simply said, brands that are both good for people and the planet. And this is, in our mind, a very interesting trend, a long-term trend, and this is what Midsona is all about. A little bit more into the details. We are headquartered in Malmö, about 800 employees. Most of our business is in the Nordics, about 70% still, but we have also expanded out in Europe, about 20% of the business in DACH, and 10% in Southern Europe, i.e., Spain and France. About 50% is organic brands, 30% conventional consumer health brands, and then we also have a portfolio of dietary supplements in the Nordics. Midsona has been on a very good growth track, but in the last couple of years, we have had some challenges, both in terms of growth and in terms of margin development. Very much due to the economic situation that we have seen in the world, with lots of inflation, tough negotiations with customers. But as I will show you during the presentation, we do start to see the light at the end of the tunnel, and we are very convinced that the long-term trend for healthy and sustainable foods that benefit both the people and the planet will continue to be very, very strong. Let's look into our brand portfolio in some more detail. Depending on what country you come from, I'm sure that you will recognize some of the brands that you see on this page. As I said, about 50% of our portfolio is organic products. We basically have one strong brand by country, but then we share the same products, the same production facilities in order to create scale. If you are from Sweden, I'm quite sure that you're familiar with the brand Kung Markatta. If you are from Denmark or Finland, you probably know the brand Urtekram. If you are from Germany, you would recognize the brand Davert. One strong brand by country in the organic segment. We also do have some conventional health brands, and if you are from the Nordics, I'm quite sure that you know the brand Friggs. It's a very strong brand, especially in Sweden. It's corn and rice cakes, a brand that has been growing tremendously. I will show you more about that. Some sport nutrition brands like Gainomax and Swebar, and then also a number of dietary supplement brands. So quite some strong brands in quite some interesting segments of the market. As said, we do have three operating segments. Our heritage is really the Nordics, and our Nordic brands stands for about 70% of our turnover, and also during this quite difficult financial period, with consumers going for cheaper alternatives, we have been able to be strong in the Nordics. We pretty decent margins. Our issues have been in the Division North, i.e., DACH, and Division South, France and Spain, where growth has been slower, and also we have had some margin challenges. We are fixing those issues right now, and we have seen some good trends lately. I will show you that later in the presentation, but really strong Nordic presence, quite a lot to do still in the rest of Europe, and this is something that we are clearly working on. A little bit about how we operate. We do have four main strategies. The first, and by far the most important one, is to create strong positions for our brands, brands like Kung Markatta, Friggs, Urtekram, and so on. We do have very strong brands. They are in very attractive segments long term, organic foods, health foods, and consumers today are very interested in eating healthy, but also to contribute to a more sustainable planet, and those brands hit those things. Furthermore, during the last 10 years, we have expanded quite a lot via building our own brands, but also via acquisition. It means that we have quite a lot of complexity in our production and our portfolio, and lately, we have spent quite some time in order to streamline that, to basically dispose of smaller brands, discontinue smaller products, to create a better and more streamlined portfolio. We're pretty much halfway through that. We still have some work to be done, but we also start to see the benefits of that in terms of improving profits. Midsona is about health and sustainability, and lately it has been quite tough to be in that part of the business because consumers have been hard hit by inflation. They have resorted to cheaper alternatives. However, we are 100% sure that long term, people will like to continue to consume products that are both good for the people and the planet. We've been quite acquisition-driven in the past. Considering the market situation, we are not so focused on that for the moment being. We have not done any acquisitions this year and also not any last year. We think that we will come back to that because there still is a need for consolidation in Europe. It's still very fragmented. So this is something that we have paused, but hopefully, and most probably, will come back to. And we have the aim to become a leading European player in healthy and sustainable foods. We have very high and ambitious target when it comes to sustainability. Those are not only targets, but those are things that we actively work against. Those are things where we have achieved quite a lot. We have won a number of prizes when it comes to sustainability, so we are at the forefront when it comes to sustainable food products. Let's see if... Nope, one more. There we are. So this is a little bit of background on Midsona, what we are about, what our focus is. I would now like to take a few minutes to talk about the market and the market dynamics that we do see. First of all, I talked about the fact that the market for healthy food is still quite fragmented or even very fragmented. There are a few big players, many small- and medium-sized players, and right now, we do not see a lot of movement in terms of acquisitions and mergers. We are, however, quite confident that it will start up soon again because this market is just too fragmented. It's very different from conventional food markets, where you have a few big competitors, so we think that there will be a consolidation wave in this market, and somehow we want to take part in this move long term. I did talk about the tough financial times that many consumers are facing. Still, we have done quite a lot of research in terms of how are consumers thinking, what do they want? And clearly, consumers still do want to consume food products that are both healthy and sustainable. You see a lot of attributes on this list, and very, very positive thinking towards healthy and sustainable foods. As said, people might think one thing and act in a different way, and it has been a bit tougher now during the financial times that we have had, but we are still confident that consumers will come back to consuming healthy and sustainable foods. I told you that about 50% of our sales is in organic foods, and consumers are willing to pay a premium for organic foods. There is no, no change in that, so we think that there is a good long-term market for organic food products. Last but not least, the Nordic countries have been at the forefront of this movement. We have high per capita consumption of organic foods. We have high interest in healthy foods. We have high interest in creating a sustainable world. We see the same trends in the rest of Europe, and long term, we are therefore convinced that this will be a growth market and a growth area just because people, consumers, really do want this. So where are we currently? Well, we are starting to see some light at the end of the tunnel. Quarter three was a step in the right direction. We saw some good EBITDA improvement. We had a very strong cash flow, but also, most importantly, we started to see some good progress for some of our key segments, and I will come to that quite soon. We also did start or continue to improve our gross margins. And one of the key challenges that we've had during the last, say, 18 months, is heavy inflation, and for us, it has taken some time to pass those, those cost increases on to our customers. So we came from a situation where our gross margins were dropping quite significantly, putting a lot of pressure on our profits. As you can see on this page, we have step-by-step improved, and our gross profits have started to increase again. So gross profit, it's basically net sales minus our, minus our cost of goods and production and various cost. So it's starting to improve again. Still, we are not at our target level. The main reason for this is that we have seen a very weak Swedish and Norwegian krona that has hit us quite a lot. So we will continue to actively manage price. Now, as you have seen lately, the Swedish krona has strengthened somewhat. That's good for us. We hope that that trend will continue, or otherwise, we have to manage price, of course. Very promising in the third quarter was the fact that our organic portfolio started to increase in terms of sales, an increase of 5%. So those are organic brands like Kung Markatta, Urtekram, Davert in Germany, Helios in Norway, and a brand called Happy Bio in France and Spain. And it was driven by a somewhat stabilized consumer demand, but also the fact that we have done quite a lot of things in terms of improving our marketing, but also attracting new customers, especially in Germany, France, and Spain. Our health foods, i.e., our conventional health brands, were also doing quite well. Very strong growth for the brand Friggs, decent growth for other brands. Still, overall, quite sluggish growth. The main reason is that we have chosen to stop a number of private label contracts with very low profitability. So we're selling a better mix, more of our own products and more private label contracts with good profitability. Where we're seeing a big minus is consumer health. That's 100% due to the fact that we have discontinued a couple of agreements with quite big, what we call principal brands, i.e., distribution agreements, so it was not our own brands. But the essence of this is that our own important big brands are starting to grow again. One thing that we have done is that we have created a completely new concept for organic brands, and it's basically the same concept done by one advertising agency, but we have been able to roll it out on pretty much all of our organic brands. We started with Kung Markatta in Sweden. We have continued with Urtekram in Denmark and Finland. And first result, it's still early days, but first results are quite promising, actually, and we have seen, for example, Kung Markatta, Kung Markatta getting back to growth again. So this is really, really good, that we do see some stabilization and even some increasing sales for organic brands because it's so important for the overall result of Midsona. The next one that I wanted to talk about is more of a long-term success story. It's the brand Friggs, which has seen tremendous growth during a long period of time. Very strong model that we've been able to employ. What we have done is that, one, we have rolled Friggs out in new countries, adding new volumes on top. Friggs was originally a Swedish brand that we rolled out in Finland, then in Norway, and we're looking at rolling it out in further countries. As you can see, growth has been quite spectacular. Friggs has also been very much driven by consumer innovation, launching new products that really have taken on to consumers. Our latest Chili Cheese launch, we did now end of quarter three, and we're starting to see first results, which also looks very promising. Last but not least, a cost-efficient digital marketing approach. I said that we started to see that light at the end of the tunnel. We are starting to see improved EBITDA figures. We did that in quarter two. We've also done that in quarter three. We are still not happy with this level. It's still way too low, but at least we're taking steps in the right directions. We are starting to grow our brands. We manage price actively, and it starts to pay out, and we've also done a lot on the cost side in terms of simplifying the portfolio, and that's also given some stabilization to our results. So still, we are not where we want to be, but we are for sure taking good steps in the right direction. Something that has also been very important is our cash flow management, and this has been a huge focus to strengthen our balance sheet. As you can see, we have now seen a number of strong quarters in terms of cash flow, and this really helps in an environment where lending money is quite expensive. This is also a very, very good thing that we have done that has strengthened the company significantly. To conclude, we have been through a quite tough period. I'm still convinced that the long-term prospect for a company like Midsona is very good. People in society will continue to want healthy and sustainable food products. I think that that's... There is no doubt about it.... We think that demand is starting to bounce back now a little bit, which is very good. We are managing price, which also helps. So what we are doing now for the future is that we'll continue to drive our core brands by strengthened marketing, by addressing opportunities that we have out in various markets. I wrote in the quarter three report that we have taken a number of new contracts and customers in Germany. This is really helping our sales, and we will continue to really hunt for new good customer agreements, and there still is a lot to be done there. We are working to simplify our portfolio, and there are a lot of cost benefits doing that, and we are starting to see first results. We still have some work to be done in terms of simplifying our portfolio, which will further help the long-term prospects of the company and the brands. Also importantly, I mean, of course, we do want to get back to growth, and that's our—that's one of our key objectives, but short term, we will continue to focus on EBITDA and cash, even before net sales. So we'll continue to simplify the portfolio, getting rid of contracts that are not profitable, even if that hurt net sales, but will improve long-term EBITDA and cash flow. So that was my presentation on Midsona. Looking forward to questions now. Thank you very much, Peter. So, I think in the recent year, you mentioned that, you've been discontinuing non-performing brands. I think you mentioned a little bit how far you are into this journey. Could you perhaps clarify how far you are and what else is left, so to speak? I think in a way, it's a never-ending journey, but- Mm ... if you look at the bulk of the work, I would say that maybe we're halfway. Still a lot to be done in terms of simplification of the portfolio. We're also now starting to look at our production sites to make them more efficient, and we have done quite a lot in that sense as well. So still some work to be done, which will help the long-term profit of the company. Yeah. I think on the same topic, when you do discontinue unprofitable brands and products, you have mentioned that you will get some secondary effects as well, maybe some lower headcount or lower rents. Have you started to see some of these secondary effects that you've been speaking of? We have. I would say that our general cost level is down, quite a lot actually. You might not really see it in, in the P&L because of there is also a lot of FX effects due to the fact that we have a weak Swedish krona. But if you look at apples to apples, cost is really starting to get down, and, and that helps a lot, of course. Yeah. Yeah, that's very helpful. I think you also went into a little bit that you are trying to help some brands that are iconic, but that are perhaps underperforming currently with some marketing campaigns, such as Kung Markatta. Is this something that we can expect for products in North Europe and South Europe as well, or is there some different solution that you're looking for in those regions? Yeah, I think it's a little bit of a mixed bag. I would say, first of all, if you look at the organic food market, it did grow for a number of years, but has actually shown declines in most markets in the last 24 months. We now see a stabilization. Still, that does not mean that you cannot grow your brand. So what we are trying to do now is via marketing to really underpin the strength of our brands, because it's not only about organic product, it's about healthy product, sustainable product, clean label. So there are a lot of other attributes that we actually can market and do. And I said we were first out with Kung Markatta. First signs are promising. The brand has started to grow again. We will roll it out under Örtagård now. We will also start to look at the other countries and the other brands. Still, I would say that the situation in a country like Germany is quite different. Yes, we want to promote the brand Davert in Germany, but I would say the main opportunity that we have in Germany is still distribution. There still is a lot of customers out there with no or limited Davert assortment. And as I wrote in the third quarter report, we have taken some new contracts. Some of them gave support already in quarter three, but many will give support to net sales and profits from quarter four and quarter one, 2024. Yep, that's helpful. And would you say that there's any low-hanging fruit left to pick, or is there only hard work left, in terms of improving the profitability journey? I would say it's always hard work. Yeah ... but low-hanging fruit, I would say the following, that what we have done on, on the cash flow side, I would say that the low-hanging fruits, we have picked those because it was very much about basically managing our inventory better. Now, it's more about really getting into the details, really streamlining the operations. In terms of our brands, I would say that might not be low-hanging fruit, but there are some good opportunities on the customer side in countries like Germany, France, and Spain. If we get the marketing right in, in the Nordics, that could give a boost. First signs are promising. So a mix between low-hanging fruits and, and some hard work, I would say. Yeah. And just to wrap up, what do you most look forward to in 2024? I would say a number of things. First of all, I think that we do have a much more solid platform now in terms of how we have developed our brands, how we have streamlined the portfolio, how we have managed price. So the situation is a lot better in that sense, and therefore, I look forward to 2024 with quite some anticipation. Then, of course, if we could see a little bit of less doom and gloom in the financial markets, that would be good, because that would help consumers to start spending on what they should spend, i.e., products that are healthy and sustainable. So that would be my wish, but that would be icing on the cake. Anyhow, I think that we are well prepared for 2024. Yeah. Perfect. Well, thank you very much for this presentation and Q&A, Peter. Thanks so much. Thank you to everybody else for listening in. Thank you!