Q1 2023: Stable growth and record high market shares

January – March 2023

• Net sales increased by 1.3 % to SEK 883 (871) million.
• EBITA, adjusted, decreased to SEK 68 (95) million. EBITA margin, adjusted, was 7.7 % (10.9).
• Cash flow from operating activities decreased to SEK 84 (100) million.
• Operating profit decreased to SEK 38 (65) million. Operating margin was 4.3 % (7.5). The change is largely explained by unfavourable exchange rates.
• Market share by volume increased in all our Nordic markets. Share increased to 26.7 % (25.8) in Sweden, 18.8 % (16.9) in Finland and 5.9 % (5.5) in Norway.
• Earnings per share was SEK 0.30 (0.56).

Emil Sallnäs, CEO comments:

RECORD HIGH MARKET SHARES IN THE NORDICS AND SUSTAINED PROFITABILITY IN ECOM

Viva Wine Group started 2023 with a stable first quarter – we maintained profitability in our European e-commerce business and grew in all the Nordic markets reaching record high market shares.

STABLE GROWTH IN DIFFICULT TIMES
Given the tough market environment, we delivered a stable first quarter with growth of 1.3 percent. The Nordics segment developed strongly, with organic growth of 8.1 percent. Sweden also had a good quarter with organic growth of 5.0 percent. Viva eCom is still feeling the effects of fluctuations in the e-commerce market but is starting to see signs of stabilisation and a change for the better.

Adjusted EBITA margin for the quarter came out at 7.7 percent, a level I am pleased with given cost increases and a challenging exchange rate.

STRONG START IN THE NORDIC MONOPOLY MARKETS
In the first quarter, we continued to gain market share in all the Nordic monopoly markets. Indeed, we reached record levels in all three monopoly markets. Market volume in the total alcohol market decreased by 2.2 percent, while we increased our total market volume by 2.7 percent.

Norway once again had a strong quarter and is the market where our sales have increased the most, as much as 7.0 percent in a market that was down -1.6 percent in terms of volume. Finland is the country where the economic slowdown is most noticeable and, combined with active cross-border trade, monopoly sales have fallen more than in Norway and Sweden. Despite this, we have increased sales in Finland and consequently also our market share, which was close to 19 percent. In Sweden, we reached our highest market share ever with 26.7 percent in the quarter.

PRESSURE ON MARGINS FROM CURRENCY EFFECTS
In addition to cost increases in inputs, logistics and freight, primarily driven by inflation, we face a major challenge with the unfavourable EUR exchange rate.

We have used the price adjustment windows to offset the cost increases. But in a competitive market it is, of course, a balancing act. Volumes and market shares are important factors to consider, and we also hope that the Riksbank’s efforts will eventually master the weakness of the Swedish and Norwegian currencies. We therefore see our EBITA margin remaining under pressure for some time to come.

STABILISATION OF THE E-COMMERCE MARKET
Net sales in Viva eCom decreased by 11.2 percent in the quarter, but we are beginning to see some positive signs in the European e-commerce market. In the most recent quarter, average order value for wines sold in the different segments has increased, partly due to inflation, but also due to our strategic efforts to increase the number of bottles sold per order, as well as an increased share of repeat customers. Our wide range of products in all price categories and rapid market adaptation have been a major advantage.

The restructuring of Viva eCom is proceeding according to plan. Despite lower sales, we have kept adjusted EBITA at the same level as the first quarter of last year and have also increased the adjusted EBITA margin.

OUR SUSTAINABILITY EFFORTS ARE PAYING OFF
Our efforts to reduce the climate impact of transport and packaging are continuing to be regarded, demonstrating the significance of our conviction and the strength of our approach. We have now met, or are on track to meet, all our 2023 sustainability targets. Now we are setting our sights on 2030: To achieve a 50% reduction in climate impact per litre of wine sold.

GOOD PROSPECTS FOR THE NEXT QUARTERS
Growing the Nordic business in the prevailing market conditions is a sign of strength. We have again demonstrated that our business model makes us agile and relevant in all market environments. Our efforts to streamline Viva eCom will deliver visible results in the second half of the year. At the same time, we are making active efforts to find the next acquisition to add to our already profitable e-commerce business. Here we see that price expectations have come down, which makes me optimistic about finding the next piece of the puzzle for Viva eCom.

The market may be facing some headwinds at present, but I see that Viva Wine Group stands strong despite unfavourable macro conditions.

Emil Sallnäs, CEO Viva Wine Group
Stockholm, May 2023

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's Interim Report for the first quarter 2023 will be published on 17 May 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/45871. 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