Viva Wine Group
Q1 2022: Increasing market share in a turbulent world
Significant events during the quarter
- Net sales increased by 26.8% to SEK 871 (687) million.
- The operating margin was 25.2% (21.5)
- Operating profit fell to SEK 65 (73) million. The operating margin was 7.5% (10.6).
- EBITA, adjusted, increased to SEK 95 (78) million. The EBITA margin, adjusted, was 10.9% (11.4).
- Market share measured in volume increased in Sweden to 25.8% (25.4), in Finland to 16.9% (16.4) and in Norway to 5.5% (3.4).
- Anna Möller was recruited as Chief Operating Officer and became part of the Management Team on March 7.
- An agreement was signed with Speqta AB for the acquisition of all shares in MyTaste & Food AB (Vinklubben), Swedens largest online community for wine. The purchase price amounted to SEK 120 million on a cash and debt-free basis. The transaction was completed on April 1.
- The Board of Directors proposes to the Annual General Meeting an ordinary dividend of SEK 1.50 per share.
Significant events after the end of the quarter
- The acquisition of MyTaste & Food AB (Vinklubben) was completed according to plan with a transaction on April 1.
- Christian Fricke, CEO of Viva eCom became part of the Management Team on April 1.
Emil Sallnäs, CEO comments:
A STRONG START IN A TURBULENT WORLD
Viva Wine Group started 2022 strongly with growth of almost 27%, largely due to the acquisitions in the previous year, and gained market shares in an otherwise weak market.
A CHALLENGING QUARTER
The first quarter was not without its challenges and featured several factors that affected our business. At the beginning of the year, omicron contributed to high sickness rates and reduced wine consumption. February saw the start of the ruthless war against Ukraine, which has had repercussions for price trends, general concerns and, not least, shortages of certain inputs. It is also clear that customers have partly returned to previous habits, with more restaurant visits as restrictions have been lifted. A year ago, we were in the midst of the pandemic and benefited from a different consumption pattern at the time. Restrictions in many European countries were not eased until the summer of last year. Taken together, there were several factors contributing to a rather challenging quarter.
STRENGTHENED MARKET POSITIONS
Despite all the challenges and concerns in the world at large, I am very pleased with our trend in the first quarter. We have strengthened our position in all Nordic monopoly markets and increased our market shares. The best performance has been in Norway, where we increased our market share by two percentage points. In Finland we have regained our position as the second largest in the market, and in Sweden we have further bolstered our number one position. The e-commerce market in Europe has normalised from a very unusual period last year when sales were driven by lockdowns. At the same time, we can see that customers who have become accustomed to shopping online will continue to do so, and we are continuing our efforts to expand into new markets.
INCRE ASED COSTS LEAD TO TEMPORARY PRESSURE ON MARGINS
Several external factors have driven up costs and, in addition to rising inflation, war and container shortages have increased packaging and transport costs. This contributed to slightly lower profitability in the first quarter as the first price adjustment period, which is driven by the monopolies, occurred in March. Maintaining margins going forward is extremely important to us, and we will make further price adjustments in all markets to protect our margins.
STRENGTHENED MANAGEMENT TEAM FOR INCREASED LEVERAGE
After a very intensive 2021 with record acquisitions and an IPO, the focus is now on unlocking synergies and optimising the businesses. In Germany, the integration of our e-commerce operations, including warehouse optimisation, is in full swing and will be completed by the middle of next year. During the quarter, we decided to clarify the strategic importance of our e-com business by adding Christian Fricke, CEO of Viva eCom, to the management team from 1 April.
In the Nordic market, there are synergistic benefits to be achieved in several areas, such as product development. We therefore recruited Anna Möller as COO in March, with a clear remit to optimise our operations in the Nordic monopoly markets. She has a perfect background for this, with many years of experience in the industry. Anna and Christian are two important pieces of the puzzle to take Viva Wine Group to the next level.
CONTINUED FOCUS ON ACQUISITIONS
We are continuing to see many exciting acquisition opportunities both in Europe and in the Nordics, and much of my own time is spent precisely on that. We have a history of successful acquisitions, and it has always been important to find businesses that complement us in the right way. The acquisition of Mytaste Food & Beverage AB, the owner of Vinklubben, is one example. Vinklubben is Sweden's largest online community for wine with 1.6 million members. Getting as close to the customer as possible is part of our strategy.
It is difficult not to conclude by saying something about the horrific war in Ukraine. Viva Wine Group is only indirectly affected by the war and we have preparedness and plans to counteract this. But our thoughts are with all the people directly affected by the war, and we have contributed in whatever way we can with donations to international aid organisations. I hope with all my heart that we will soon see an end to this war and the suffering and turmoil it has caused.
Emil Sallnäs, CEO Viva Wine Group
Stockholm, May 2022
Please see the full report in the attached pdf.
Publication and presentation
Viva Wine Group's interim report for the first quarter 2022 will be published on 12 May 2022 at 8:00 a.m. On the same day at 11:30 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/44358. The presentation will also be made available at https://investors.vivagroup.se/reports-presentations/
For more information, please contact:
Mikael Sundström, Director Sustainability, Communications & Investor Relations
Tel: +46 70 943 22 26
Viva Wine Group is the leading wine group in the Nordic region, with a strong position in the European e-commerce market for wine. The Group consists of a collection of entrepreneurial companies with head office in Stockholm, developed through organic growth and strategic acquisitions. Viva Wine Group develops, markets, and sells both wholly owned and partner brands and offers affordable quality wines from all over the world to consumers in locations such as the Nordic countries, Germany, Switzerland, Austria, France, and the Netherlands. Sustainability is one of our foremost driving forces and we are a leader within certified ethical and organic wine. www.vivagroup.se