* Q1e: flat organic growth and minor margin improvements * Risenta acquisition adds 3.5% to FY sales * Trading at '26e EV/EBITA of ~9.5x
We expect a fairly uneventful Q1
We anticipate flat organic growth y-o-y in Q1'26e, implying sales of SEK 909m and adj. EBIT of SEK 38m, for a margin of 4.2%. We expect continued headwinds in South Europe, which are partly offset by organic growth improvements in North Europe and the Nordics. For the quarter, we expect an FX impact of -3% on net sales. We expect continued strength in the GM on product mix in Q1e. Our estimated adj. EBIT margin is up 0.3pp y-o-y, as we expect total opex to decline by 8%, partly on the recent cost savings initiatives. Moreover, Q1 will be positively affected by SEK 58m due to insurance compensation after the fire in Spain.
Back to M&A
Midsona issued a press release this morning stating that it is acquiring Swedish health food company Risenta, well know for its sesame-based snacks. The acquisition cost is SEK 45m and Risenta has an annual turnover of SEK ~130m, which would add ~3.5% to Midsona's full-year sales. The acquisition will go through on 1 June, and our estimated M&A growth for '26e-'27e is 2-1%. Midsona has not disclosed Risenta's profitability, although commented that it should be EBIT- and EPS-accretive. Assuming an EBIT margin in line with Midsona's '27e of ~6%, this would imply an EV/EBIT of ~7x compared to Midsona's 10x. We make limited changes to our organic estimates, with '26e-'27e sales and adj. EBITA are up 1-2% and 1-4%. We expect the nature of Risenta's business to weigh slightly on the GM, but carry less opex. Unadjusted '26e earnings are up significantly on the insurance payment.
Implied valuation
Based on our revised estimates, the company is trading at ~9.5x '26e adj. EV/EBITA, which is ~30% below current peer multiples. We note that peers are in turn trading ~7% below the 10-year historical median of ~14x NTM EV/EBITA.