Thank you so much. We can start on page two. This has been quite an intense summer quarter, I would say. Let's be honest, it has not been our strongest quarter in terms of results generation. I think that there are good explanations for that, and I will come back to those. Overall, I would still say that we have a positive outlook for the future. We can move to page number three already, and then I will go through the key developments during quarter three. If we look at Midsona, we had a very strong half first year to some extent driven by the pandemic, which actually made a huge spike in our sales. Mid-July, we saw a drop in sales which lasted until about the end of August. We see this as what we call a reverse lockdown effect
When restrictions were lifted, that meant that in-home consumption went down. We think that both customers and consumers had then the possibility or the urge to drive down their stock levels, which then impacted sales negatively during the second half of July and the month of August. We have seen a strong bounce back in September, which gives us some confidence that this drop in sales has been temporary. September is actually our second strongest month in the year after the stockpiling month of March. It's a strong sign that we should be back on track now again. I said that the third quarter has been quite intense, and also as lockdowns are eased, we had the opportunity to make new acquisitions. We took control of the Gainomax brand. It's a strong iconic sports nutrition brand in the Nordics on September 1.
Just after the end of the quarter, we announced and also took control of System Frugt, which is a major acquisition for us. It's an acquisition that almost adds 20% pro forma sales as of October 1. Looking at our divisions, I would say that the main news in the Division Nordic was the acquisitions of System Frugt and Gainomax. That's a very good addition to sales in the Nordics. We also see new development opportunities for the brands. Those are both growth acquisitions that we have made, and in the case of System Frugt, we see very good possibility for synergy generation, and I will come back to that later in the presentation. In Division North, we had a disappointing result in the quarter. Sales were relatively okay. We had a slight growth in North but had some mixed effects.
In the last quarter, I talked about the rollout of the Davert brand to a major retail customer. That launch was temporarily halted during the third quarter due to COVID as well. [ audio distortion ] did not have the resources to execute. That made sales of the brand Davert a little bit lower in the third quarter. What has happened is that the launch restarted again at the end of the third quarter, We have after that seen a strong distribution build up of the brand, We have also seen reorders from this major retailer in the beginning of the fourth quarter. We have also had some extra costs related to production maintenance. Our production, this goes both for Division North and Division South, we're running at very high utilization levels in both quarter one and quarter two.
This meant that we had a little bit more wear on our production equipment, but also that maintenance that we normally would have done in the first and second quarter, they were all done in the third quarter, and that drives some extra cost. Division South, as you might know, is a relatively recent acquisition. We took control on the 1st of October last year. We are very happy with the development so far. It has gone extremely well, we would say. We are ahead of our plan, and we also had a relatively good development in the third quarter primarily driven by the continued roll out of the Happy Bio brand to the retail trade in both France and Spain. We can go to the fourth page, the quarter three highlights. This is pretty much a short summary of what I've already discussed.
The somewhat weaker sales also meant that our EBITDA was slightly down for the quarter. What we're happy about still is that we managed to have a very good cash flow, which more than tripled compared to the same period last year. Let's go to page number five which then highlights our revenue development for the third quarter. A big portion of the growth is M&A driven, and that is the acquisition in France and Spain, the Alimentation Santé acquisition that we did last year which explains this part of the bridge. We did have some growth for our top 10 brands, despite the fact that they were also affected by the lower sales when restrictions were lifted. They're up 2.4%. As already mentioned, we had a continued good development for the Happy Bio brand in France and Spain due to the role of the grocery trade.
Many of our brands in the Nordics also developed well. The Urtekram was growing, the Friggs brand was growing, the Helios brand was growing at very healthy rates. Little bit more challenging situation in the self-care products where we had a drop in sales, and this is what you see in the other part of this bridge. Then we had a quite negative currency effect, which is basically due to the strengthening of the Swedish krona, both against the euro and the Norwegian krone. We can move to page number six and look at the year-to-date figures. As I mentioned, although we are disappointed about the third quarter and the drop in sales we had due to the lift of restrictions, I would say that the overall development during the COVID-19 crisis has been positive for Midsona.
We have been growing sales at healthy rates also see a very good improvement in both the EBITDA and the EBITDA margin. We almost doubled the net result, we almost tripled the cash flow during this first nine months of the year. While the third quarter wasn't our strongest, we still feel that we are on a good track. Again, this is mainly due to one and a half months of very slow sales, the second half of July and the month of August. We have seen a bounce back in September. Let's move to page number seven, which outlines the key points on the System Frugt acquisition. This is a major acquisition for us. I said it adds almost 20% to sales pro forma. It's a very strategic one.
Midsona is the market leader in dry organic products in all the four Nordic markets, and this is of course an important growth area for us. Still, there are lots of consumers that are mainly focused on conventional products and mainly consume conventional products. With the acquisition of System Frugt, we get a very strong brand, Earth Control, which is focused on conventional dry products. It's a very good combination to our organic brands. The acquisition gives us a very strong position in the Danish market, where we not really, but almost double our presence. It also gives us the opportunity to develop positions in other Nordic countries. System Frugt has wide Earth Control brand sales and operations in all the other countries, but I would say that they do not have the same leverage with the customers as we have.
We see good opportunity to further drive sales in those countries. Furthermore, we have identified significant synergies, about SEK 34 million to be realized up until the end of 2022. This is a major acquisition and one that we are very happy about, and we took control already beginning of October. The System Frugt figures will add to our sales and EBITDA already in the fourth quarter. By that, I leave the word to Lennart Svensson, the CFO, to do the financial review.
Thank you. Moving on to page nine. This will be very much a summary of what Peter has already mentioned previously. If we look at the quarter and also the full-year results, we see here that we are slightly below than on the EBITDA level in the Q3. On the overall, we are quite far ahead. What we can say is that the pandemic has really offset our seasonality, where we normally have a weak Q2 and a strong Q3, and we see a little bit of the reverse here this year. Looking in also into our cost-saving programs, we are continuing our cost-savings programs in the Nordics, and they follow plan, as we will see a little bit later on here also on the total cost levels.
We are working very much closely with the maintenance costs in Germany and also with the continued integration of the Europe South, where we also see cost savings coming out of these operations. Our financing cost is slightly lower this year compared to last year. That has to do with some restructuring of our internal debts and how those are calculated. We also see the depreciation that is very much related to... It is really the acquisition of Europe South that has affected the depreciation. Income taxes are in line with the different income taxes that we have in the different countries. The profit for the period is just almost in line with last year. Year to date, we see quite substantial profit compared to last year. If we move over to slide 10, going a little bit into the different segments.
In the Nordics, we see a little bit slower sale , as Peter mentioned here, very much related also to the health food trade, pharmacies, and also food service in the wake of the pandemic. We see continued focus on the cost-efficiency programs that were launched back in 2019, and also a continued cost efficiency tracking towards the development that we have during the year to secure that we have a profitability increase going forward. Northern Europe, as we mentioned here, we had some delays in the launches to main customer here. This is of branded products, meaning also that we have a higher stake of private label products driving down the gross margin in the quarter. We see now that we have launches are coming out now end of September, beginning of October.
We also had some maintenance costs related to the high utilization of the factories in Q2 that we took in Q3. South Europe, as mentioned before, we have a very good development. We're very pleased with the development there. Of course, South Europe is also affected by the pandemic. But still, we have good growth, especially of our brand in the grocery trade, which is the Happy Bio brand. We're very pleased with that development. Moving into slide number 11, as mentioned, the free cash flow. Cash flow is a main component for us also for going forward with more acquisitions in the future. Behind this, we see a sound and improving base business profitability-wise, but also a continued high focus on working capital.
This is a struggle, especially now in the pandemic, where we need to secure supplies and therefore have had a little bit of a high inventory level compared to what we normally would have had, that we need to secure also the supply out to our customers, and also the supply from suppliers, where we see different countries going into lockdowns and opening up and then going back into lockdowns again. I think that we have managed this quite well in line of the pandemic here, and this is also shown here in the free cash flow, which has improved dramatically. Moving into slide number 12, this is just an illustration of our sales distribution, where we see here that up until end of September, we have that our organic category stands for 60% of our sales.
We can also see that on the right-hand pie chart, that our license brands in line with our overall strategy of around 20%. That has been the targets or the numbers that we have had for the last years. Of course, this will be a little bit offset now, where we see that health food will increase here with the acquisition of Gainomax and System Frugt. Also the licensed brand will go down a little bit here going forward. With that, Peter, I hand over to you.
Great. Then we move on to slide number 13, and I would like to make a short summary before we open up for questions. Of course, there is still major uncertainty considering the pandemic. As I tried to explain, we have seen some quite erratic demand patterns with a huge short hoarding effect at the end of quarter one, a continued high demand during quarter two when we saw a lot of restrictions and lockdowns, then weaker sales at the beginning of the third quarter as restrictions were lifted, more of normalized sales during the month of September. Overall, again, we are growing the business versus year ago, and we have made major profit improvement. We now see signals of new COVID-19 restrictions, and this might, of course, have effects on both demand and supply. Of course, it's very hard to predict how this will play out.
What I would say that what we have seen so far, and I think that that's a reasonable assumption also for the future, is that the more restrictions in society, the more time people will spend at home. And that in itself will lead to more home cooking. That should then have a positive safe effect for us. As restrictions have been lifted and we might now rather go in the other direction, we don't see any further volume risk from lift of restrictions in quarter four. Probably rather the opposite then. What is most important is the continued efforts that we make to grow our business further. The rollout in the grocery trade in Germany with the brand Davert and the Happy Bio brand in France and Spain continues in quarter four.
We've had very good development for Happy Bio in France and Spain during quarter two and quarter three. The Davert brand had a very strong development in quarter two, but then slower in quarter three, as said due to the fact that the retailer we were rolling out did a temporary pause. We have started now again at the end of quarter three and made new orders at the beginning of quarter four. We are very happy that we found this window to make two good acquisitions. The Gainomax acquisition that strengthens our position in the sports nutrition segment, and then especially System Frugt, which is a major strategic acquisition with some very good growth and synergy potential. One of the key focuses here now in quarter four will of course be to start integration and then to start realizing synergies as soon as possible.
We continue our focus on cost and cost savings, special focus on Europe right now considering the somewhat high-cost level in quarter three. I would say overall, we're very humble about how the situation will develop in the future, but we are still doing that on a positive. We think that there is very good opportunity for Midsona to keep continuing to grow both sales and profit at healthy rates. By that we go to page number 14. I leave the word back to the operator to start the Q&A session.
Thank you. If you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two. Once again, it's zero one on your telephone keypad, if you wish to ask an audio question. First question comes from Johan Brown from ABG. Please go ahead with your question.
Hi, Peter and Lennart. Can you hear me?
Yes.
Wonderful. I have a couple of questions. We'll start off with the stock situation among your customers. Do you have any sort of indication of how much that has affected your sales during the quarter?
I think that is, of course, very hard to say because we don't have the stock numbers by customer. It would be very difficult. I think that there has been a significant impact. We saw a very clear slowdown in sales, as said in the second half of July, all throughout August. I would say that it was quite weak sales but then quite a good rebound in September again. It's quite a major effect that we now have behind us, and we are back to reasonable growth rates in September again.
October .
October. That trend continue in October. Yes.
Thank you. You mentioned a bit about extra costs related to the production maintenance. Is it possible to give some sort of number to that?
Well, the way I would put it is that sales in Division North was up a little bit, but EBITDA was about half. I would say that this is all related to different types of production costs. A significant part is different type of maintenance, which we see as one-off costs. There is a little bit of a mix effect due to the fact that we sold less of brand Davert due to the halting in the rollout of this major retailer. We also, to some extent, had a little bit of extra manning in production, which we then didn't need when sales were dropping. It's a mix of those three effects, I would say. Production rate and maintenance is the better part of that. All of these three costs I would consider being temporary.
Thank you. Last question from me, it's on the gross margin, and you were talking a bit about that just now. Essentially the product mix, raw material prices, and FX should have aided a bit as well, or counteracted at least. What is extrapolatable, if we put it that way, if we look on the gross margin?
I'm not sure I understood the question. What was the question?
Yeah, sorry. Sort of the dynamic behind the gross margin, since there are a lot of moving parts there, what can we expect going forward regarding all of these effects that we saw during the quarter?
I would say that we are not making those kind of forward-looking statements . As said, I explained the effect in Division North. In the Division Nordic, it was a little bit of a mixed effect, I would say that we have lower amount of sales of self-care products, which typically have relatively seen a little bit higher margin, gross margins compared to our organic products and health food products. That's an effect that we see in the Nordics. In Division South, it has been a little bit downward pressure on the gross margin, but that has been related to production maintenance just as in Division North.
We can also see, you mentioned here the FX effects and so on. Of course, the pandemic here now depends a little bit on how this pans out because it might and can affect, of course, raw material pricing depending on so and so. That is one thing, of course. On the other hand, we have a stronger Swedish krona compared to previous years, so that improves it a little bit. This evens out, but it is very difficult at this point in time to predict the consequences here now of the pandemic and especially when it comes to raw material pricing.
Thank you very much. That's all from me.
Thank you. Our next question comes from Johan Dahl from Danske Bank. Please go ahead with your question.
Good morning. Just on Southern Europe, you've had these operations in the company now for a year. Can you just update us on sum of the performance compared to what you expected when you acquired it? I think you took EUR 5 million EBITDA. Also update us on how synergies are expected to be realized here in 2021. What actions and possibly the timeline for that?
I would say that, first of all, we are very happy with this platform acquisition. We think that we have done a very good integration. It's a very good team down there. They are now driving the right type of products in terms of especially the rollout of the Happy Bio brand. What we're doing is that we have mainly been in the specialty trade, but we are now moving the brand out in the mass market trade. We think that in the long run, there will be much more potential in that. I think they've done an excellent job in that area. We are very happy with the development. We are ahead of plan. In terms of synergy realization, I would say that we are on plan or potentially slightly behind plan.
The reason for that is that when it comes to synergy projects, those are collaborative processes, and many of those have been quite hard to execute during the pandemic. There has been a halt for half a year in that. Also, as mentioned earlier, in the first half year, we saw very high demand from customers and consumers in Division South, which meant that the key focus was to secure customer and consumer demand. I would say that we still have some way to go there, but that is then on the positive side because that's an upside.
What we can say is also there, apart from the cost synergies in mind, we are already now in different projects with the common sourcing. We are in a different project with product swappings with South. The products from the Midsona Group previously launched under the Happy Bio brand. There are very good projects ongoing and being launched into these different markets. There are a number of projects, collaboration projects ongoing, but as Peter said, they are on the slow side right now. It has been a little bit slow side at the moment. I don't know if System Frugt, if you want to.
No. Lennart was talking about System Frugt, and of course, that's one of our key focus there now for the fourth quarter and forward to start that integration process. I think that now we've only been owners of the company a couple of weeks, but the reception has been very good when we meet with personnel. Projects have already been started. We are looking at our joint organization, and we're making some progress on that.
We see good opportunities, as I said, both on the cost synergy side, but also increasing as we get to know the company on actively driving the product portfolio in the countries outside their home market, Denmark, where we have a lot more critical mass and thereby leverage with the trade both at the headquarter level and in store. This is quite an important priority for us now and something that will give a very good addition to company results.
All right. Just a question on this inflation you're seeing on logistics, some raw materials, et cetera. I think you talked about price hikes in the report. What are the potential to actually recoup that loss that we saw here in third quarter? Also, if you can just mention briefly this maintenance cost, I presume that's normal operations that happens every year and nothing you should really treat as an extraordinary item?
Yes. If you start with the second question on the maintenance cost. I think that one, there has been some [temp maintenance] because we just did not have the time to do it in quarter one or quarter two due to the very high demand. The fact that we have been running a high capacity utilization has meant that there has been some extra wear and tear on the machines, and that might, to some extent, have caused this. I would say that this is, per quarter, it's a lot more than normal, and also some, I would say, unfortunate incidences. I see those as more one-off costs. They are not recurring at that level at all. It is for sure a one-off cost. Sorry, what was your first question again? Sorry, Johan.
What prospects do you have of actually compensating for this logistics inflation that you're seeing?
Our principle on that is very simple. When we have raw material price increases, we should take those to the market, to the customer and consumer. That's the only way. That should go both ways. If we have lower raw material prices, for sure our customers will come back on that. Our intention is to price for that, and we will do that.
You will do that? Is that what you're saying? Have you announced already price hikes, or?
Maybe I should say at present tense, we are doing that, to be clear.
All right. Thank you.
Thank you. Just as a quick reminder, if you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. Once again, it's zero one on your telephone keypad if you wish to ask an audio question. Okay, there appears to be no further questions. I'll hand back to the speakers for any other remarks.
Thank you so much. Thank you.