Net sales for the period were EUR6m. This result fell short of our estimated figure of EUR10.8m mainly because no sales from distribution were recognized. According to the management, after the divestment of Distribution, Strax would still receive a smaller part of its revenue through its minority holding. This is not the case in the third quarter report. Therefore, our estimate for distribution is not valid.

COGS came in at EUR-10m vs our estimate of EUR-7m and OPEX EUR-8m vs our estimate of EUR-5m translating into a deep negative EBIT of EUR-13m.

Own Brands was weaker than expected, with sales of EUR6m, and an EBIT of EUR-13m. Sales fell short of our estimated figure of EUR7m, Ebit came in much worse than our estimate of EUR-1m at EUR-13m. There is no information to explain the deviation of the higher COGS and OPEX and we have to come back after talking to the management.

Short-term debt in the quarter is EUR37m. STRAX is not fulfilling the loan agreement with PCP and we have written about it before. Management continues to argue it has good relationship with PCP and is working to solve the debt. One key component to lighten up the debt was to divest Health & Wellness. This looks to take time and the question is if there is a buyer out there. With R12M revenue of around EUR29m for Strax own brands, the outlook to repay the loan from cash flow is more or less zero in the short term. The key is to divest Health & Wellness and part of Clckr as communicated.