Midsona is launching a restructuring exercise to improve the Spanish organic and plant-based foods company’s profit margins.
The program is being implemented by President and CEO Henrik Hyalmarsson, who replaced Peter Åsberg in October, and aims to generate annual savings of 20 million Swedish krona ($2.1 million) on a run-rate basis.
Publicly-listed Midsona announced the project alongside third-quarter results released today (October 22), where the company reported an operating profit, before items affecting comparability, of SEK 45 million, up from SEK 32 million a year earlier.
The corresponding EBIT margin increased by 150 basis points to 5%.
“It’s satisfying to see profitability, but our ambitions are bigger and we need to pick up the pace to reach our target margin,” the owner of plant-based burger brand Vegetalia said in the earnings release.
“Therefore, the focus will be on intensifying efforts to achieve greater profitability.”
Midsona is targeting an EBIT margin of 8% in 2027, compared to 3.4% last year and 1.6% in 2023. It is also looking to achieve organic growth of 3-5%. That metric dropped 0.7% and 6.6%, respectively, over the past two years.
Organic growth was a negative 0.4% in the third quarter to September, falling from a positive 2.6% in the previous months, as a fire at Midsona’s factory in Castellcir, Barcelona, in July took its toll on revenue.
Reported sales fell 2.6% to SEK 895 million, a bigger drop than the 0.4% recorded in the corresponding quarter.
“The restructuring program is part of a broader efficiency review that also includes the evaluation of our production and logistics structure to find sources of efficiency improvements,” Midsona said.
“This is a priority initiative that we will return to in the future.”
As biscuit maker Friggs looks to “accelerate margin improvements and strengthen the group’s competitiveness”, Midsona added that the restructuring exercise will cost the business around SEK 15 million.
“The program measures do not include the cost adjustments that are being carried out in the Spanish business sector, which is experiencing lower production capacity after the fire at the Castellcir factory,” explains the company.
Just food Midsona today asked whether the restructuring will lead to factory closures and job losses.
“The details of the program are not yet established or announced,” Hyalmarsson responded. “We are working through the details and will proceed to consult with the affected unions before we can announce any details.”
Meanwhile, Midsona aims to “achieve the full run rate effect” of the project by the first quarter of next year, the CEO confirmed.