Q3 2023: Another quarter with increased market shares in the Nordics — strengthened margin in Viva eCom

July – September 2023

• Net sales increased by 5.6% to SEK 952 (902) million. Organic growth was 4.5% (-4.9).
• EBITA, adjusted, decreased to SEK 77 (87) million. EBITA-margin, adjusted, was 8.1% (9.6). The change is mainly explained by negative currency effects.
• Cash flow from operating activities decreased to SEK 14 (68) million.
• Operating profit decreased to SEK 45 (116) million. Operating margin was 4.8% (12.8). Much of the difference can be attributed to positive non-recurring effects from the sale of a warehouse property in Q3 2022.
• Market share increased to 26.3% (25.3) in Sweden, 19.2% (15.9) in Finland and 5.8% (5.0) in Norway.
• Earnings per share was SEK 0.43 (0.96).

January – September 2023

• Net sales increased by 4.0% to SEK 2,882 (2,772) million. Organic growth was 2.9% (-5.0).
• EBITA, adjusted, decreased to SEK 222 (278) million. EBITA-margin, adjusted, was 7.7% (10.0). The change is mainly explained by negative currency effects.
• Cash flow from operating activities decreased to SEK 120 (221) million.
• Operating profit decreased to SEK 130 (249) million. Operating margin was 4.5% (9.0).
• Market share increased to 26.3% (25.4) in Sweden, 18.9% (16.1) in Finland and 5.8% (5.2) in Norway.
• Earnings per share was SEK 1.19 (2.34).

Significant events during the quarter

• Viva eCom started delivering from its new centralized e-commerce warehouse outside Mainz in Germany.
• Viva Wine Group AB appointed ABG Sundal Collier (ABGSC) as liquidity provider for the company's shares listed on Nasdaq Stockholm.

Emil Sallnäs, CEO comments:

CONTINUED STRONG GROWTH IN THE NORDICS AND WELL POSITIONED FOR EXPANSION IN EUROPE
Our European e-commerce platform has now been consolidated after the launch of the new warehouse in Germany. We are consequently well positioned for further expansion in Europe. At the same time, we are continuing to increase market shares in all our Nordic markets.

SALES INCREASE DESPITE WEAK MARKET
Our sales increased in all markets in the third quarter, despite challenging market conditions and continued weak consumer sentiment. In the Nordics, we continue to have strong momentum with high volume growth. Net sales increased overall by 5.6 percent in the quarter.

Adjusted EBITA margin was 8.1 percent, down on the previous year. Our hard work to balance currency effects with strict cost control and balanced price adjustments have – in light of very unfavourable exchange rates – resulted in a satisfactory margin.

STRONG VOLUME GROWTH IN THE NORDICS
We are continuing to see strong growth in the Nordic markets. Once again, we are proving that our business model works. We know what customers want and are quick to the market. In Finland and Norway, volume growth reached record high levels, on the back of a long-term effort to boost the range of white wines, rosés and sparkling wines. In Finland, our sales volume increased by as much as 16.9 percent, while the market decreased by 2.9 percent. Norway also performed above expectations, with an increase in volume of 15.8 percent in a market that declined by 1.1 percent.

STRENGTHENED MARGIN IN ECOM
Viva eCom delivered stable net sales in the quarter and slightly improved its adjusted EBITA margin to 10.3 percent. We see signs of the market having bottomed out, and our assessment is that our e-commerce business has a brighter outlook.

SYNERGIES THAT SIMPLIF Y FURTHER EXPANSION
In Viva eCom we have laid the final brick in our efforts to achieve synergies. Our new centralised e-commerce logistics hub was launched during the quarter. We started delivering on schedule and in time for the important fourth quarter with both Black Week and Christmas trading. The new warehouse also boosts capacity for our planned growth in Europe. During the quarter, we established our e-commerce concept Weinfürst in two new markets, Romania and Switzerland, and we are planning for further market expansion in the future.

Our new e-commerce hub not only puts us in a good position to grow organically but also provides a platform to quickly capitalise on potential future acquisitions. In addition to the search for major candidates for acquisition, we also see potential in bolt-on acquisitions that can complement our European operations. During the quarter, we successfully refinanced our debt and added a revolving credit facility that further strengthens our capacity for acquisitions.

FOCUS ON GROWTH IN EASTERN EUROPE
Following the Supreme Court's decision in July by which distance selling to Sweden from other European countries was confirmed as being legal, we have assessed what this means for Viva. As part of the assessment we have evaluated potential in relation to other European e-commerce markets, especially in Eastern Europe. We will, of course, continue to monitor the Swedish e-commerce market, but will for the time being focus on continued e-commerce expansion in Eastern Europe. At the same time, we welcome the fact that Systembolaget is strengthening its e-commerce offering to Swedish consumers, which is important for our Swedish business.

PROGRESS IN SUSTAINABILITY
The roll-out of our Group-wide sustainability platform continued throughout our Nordics business segment in the quarter. As part of this roll-out and preparations for the forthcoming Corporate Sustainability Reporting Directive, an upgraded software solution for efficient climate data collection is being implemented. With this, we are further strengthening our procedures for measuring and monitoring the climate impact from our business and supply chain.

A ROBUST BUSINESS MODEL
We are living in challenging times with major events rocking the global economy. Something consumers and businesses are experiencing alike. Inflation and rising interest rates eroding purchasing power and demand creates a challenging situation where currency exposed companies such as Viva Wine Group are hit hard.

It is easy to be successful when experiencing tailwind. Delivering results in headwind is more difficult. So I am incredibly proud that we are able to show good growth and take market shares in the current market situation. We have a fantastic organisation with the ability to adapt our offering quickly to new conditions and changing demand – a business model that delivers even in challenging times.

Emil Sallnäs, CEO Viva Wine Group
Stockholm, November 2023

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's interim report for the third quarter 2023 will be published on 22 November 2023 at 8:00 a.m. On the same day at 11:00 a.m. CET a webcast telephone conference will be held with CEO Emil Sallnäs and CFO Linn Gäfvert. The webcast can be accessed here: https://financialhearings.com/event/45873. The presentation will also be made available at https://investors.vivagroup.se/reports-presentations/

Certified Adviser
FNCA Sweden AB is the Company's Certified Adviser on Nasdaq First North Premier Growth Market.

For more information, please contact:
Mikael Sundström, Director Sustainability, Communications & Investor Relations
Tel: +46 70 943 22 26
Email: mikael.sundstrom@vivagroup.se

Linn Gäfvert, CFO
Tel: +46 73 086 89 90
Email: linn.gafvert@vivagroup.se