Interim report, January-June 2015

Midsona agreed to acquire Urtekram International A/S, a Danish company holding a
leading position in organic foods in the Nordic region
APRIL-JUNE 2015 (SECOND QUARTER)

  ·
Net sales amounted to SEK 223 million (223).

  ·
The gross margin was 45.7 percent (46.6).

  ·
Operating profit amounted to SEK 13 million (12).

  ·
Profit for the period was SEK 12 million (8).

  ·
Earnings per share before and after dilution amounted to SEK 0.53 (0.35).

  ·
Cash flow from continuing operations amounted to SEK 23 million (11).

JANUARY-JUNE 2015 (SIX MONTHS)

  ·
Net sales amounted to SEK 455 million (464).

  ·
The gross margin was 44.2 percent (45.7).

  ·
Operating profit amounted to SEK 14 million (28).

  ·
Profit for the period was SEK 11 million (20).

  ·
Earnings per share before and after dilution amounted to SEK 0.49 (0.88).

  ·
Cash flow from continuing operations amounted to SEK 37 million (18).

Comment by the CEO

In the second quarter, Midsona announced its acquisition of Urtekram
International A/S (Urtekram), with ownership being transferred on 1 July 2015.
The acquisition is strategically important since it takes us a major step closer
towards our vision of becoming a leader in health and well-being in the Nordic
region. This broadens our product portfolio of proprietary brands that are well
positioned in attractive organic products growth segments, establishes Midsona
in Denmark and strengthens our position in the other Nordic countries. The
market for organic products showed strong growth in the Nordic region in 2014
and forecasts suggest continued growth over the next few years. In 2014,
Urtekram generated sales of SEK 460 million, of which the Urtekram trademark
accounted for about 80 percent. Midsona generated sales of SEK 920 million last
year and the acquisition thus increases the Group’s pro forma sales by about 50
percent. The transaction is expected to provide both cost and growth synergies.
Cost synergies are estimated at approximately SEK 15 million annually, with the
full effect being achieved from the second half of 2016. Non-recurring costs for
these measures are estimated at about SEK 10 million and will affect earnings
for the third quarter of 2015. We also have good expectations that the
acquisition will provide growth synergies. With the help of Midsona’s good
contacts with the major retail players in Sweden, Norway and Finland, Urtekram
is expected to be able to increase its sales. Similarly, Urtekram’s organisation
is expected to be able to contribute growth for Midsona’s products in Denmark.
The acquisition is being financed through existing credit facilities, an
acquisition loan of SEK 70 million and a rights issue for up to SEK 120 million.
The terms of the issue will be announced on 6 August.

Midsona’s sales remained unchanged at SEK 223 million for the quarter. Operating
profit improved to SEK 13 million (12) and profit after tax was SEK 12 million
(8). Several of the Group’s proprietary brands continued to develop favourably.
Growth was particularly good for the Friggs and Dalblads brands. A couple of
important projects were completed ahead of schedule during the quarter. The
closure of the production unit in Stenkullen, with annual estimated cost savings
of SEK 7 million, is now complete. Soma Nordic, which was acquired at the end of
2014, is now operationally integrated into the business.

During the remainder of 2015, Midsona will focus on the integration of Urtekram
and on developing other prioritized brands in the portfolio. The new merged
company will have a better position in negotiations with customers and a
stronger platform for product development and marketing. Cost and growth
synergies have been identified. Consequently, the acquisition is expected to
provide significantly higher sales and improved profitability for the Group. In
this way, we are taking new steps towards our vision of becoming a leader in
health and well-being in the Nordic region.

Peter Åsberg, President and CEO

This is information of the type that Midsona AB is obligated to disclose in
accordance with the Swedish Securities Exchange and Clearing Operations Act
and/or the Financial Instruments Trading Act. The information was published on
July 17, 2015, 8 am.
For further information: MD and CEO Peter Åsberg, 46 (0)730 26 16 32
About Midsona

Midsona holds a strong position in the Nordic market with own strong brands
within healthfoods, personal care and hygiene. Midsona also sells a number of
licensed internationally established brands.  Our products are sold through
grocery and convenience stores, pharmacies, health stores and internet.
Midsona’s priority trademarks are: DALBLADS, FRIGGS, MIWANA, MYGGA, NATURDIET,
SUPERNATURE, URTEKRAM and TRI TOLONEN. Midsona has annual sales of about MSEK
920 (2014). The Midsona share (MSON) is listed on NASDAQ OMX Stockholm, Small
Cap. For further information: www.midsona.com