Q2 2023: Continued organic growth and further strengthened market position in the Nordics

April – June 2023

• Net sales increased by 4.8% to SEK 1,047 (999) million.
• EBITA, adjusted, decreased to SEK 77 (96) million. EBITA margin, adjusted, was 7.4% (9.6). The change is mainly explained by negative currency effects.
• Cash flow from operating activities decreased to SEK 21 (53) million.
• Operating profit decreased by 30.9% to SEK 47 (68) million. Operating margin was 4.5% (6.8).
• Market share in volume terms increased in all the Nordic monopoly markets. Market share increased to 26.0% (25.2) in Sweden, 18.7% (15.7) in Finland and 5.6% (5.2) in Norway.
• Earnings per share was SEK 0.46 (0.82).

January – June 2023

• Net sales increased by 3.2% to SEK 1,930 (1,870) million.
• EBITA, adjusted, decreased to SEK 145 (191) million. EBITA margin, adjusted, was 7.5% (10.2). The change is mainly explained by negative currency effects.
• Cash flow from operating activities decreased to SEK 105 (153) million.
• Operating profit decreased to SEK 84 (133) million. Operating margin was 4.4% (7.1).
• Market share in volume terms increased in all the Nordic monopoly markets. Market share increased to 26.3% (25.4) in Sweden, 18.7% (16.2) in Finland and 5.8% (5.3) in Norway.
• Earnings per share was SEK 0.76 (1.38).

Significant events during the quarter

• The operating segments Sweden and Nordics was merged during the quarter in the segment reporting. As of the interim report for Q2 2023 the operations in the three monopoly markets will be reported as one operating segment, the Nordics.
• A dividend of SEK 1.55 per share was approved by the Annual General Meeting on 16 May and paid out 24 May.

Emil Sallnäs, CEO comments:

STRONG GROWTH AND STRENGTHENED MARKET POSITION IN THE NORDIC MONOPOLY MARKETS
The Nordic segment delivers yet another quarter with organic growth and strengthened market shares in the monopoly markets of Sweden, Finland and Norway. Growth in the quarter was well above target and far better than the underlying market. Development in Viva eCom is stabilizing and delivering good gross margins.

CONTINUED GROWTH DESPITE A WEAK MARKET
Viva Wine Group had a strong second quarter with growth of 4.8 percent in a market where conditions continue to be challenging. Our Nordic operations, which we report as one segment with effect from this quarter, delivered organic growth of as much as 7.1 percent, which is more than double the local market growth. At the same time, we are seeing signs of improvement in European e-commerce markets.

Adjusted EBITA margin for the second quarter was 7.4 percent, despite EUR exchange rates that continue to be challenging.

GROWTH WELL ABOVE TARGET IN THE NORDICS
The Nordic segment delivered very strong sales in the second quarter. An important reason is our long-term work to improve the product mix in Norway and Finland, where we have invested in strengthening our range of white wines, rosé wines and sparkling wines. The strategy was very successful in the favorable weather and both countries exceeded their sales targets. The greatest growth was in Finland, where we increased our sales volume by as much as 15.6 percent in a market that declined by 2.8 percent. In Norway, volume increased by 6.0 percent, while the underlying market declined by 2.1 percent.

CONTINUED PRESSURE ON MARGINS FROM FX
Currency effects were again significant in the Swedish and Norwegian operations in this quarter, while distribution and material prices have stabilized. We work actively to balance the currency effects with strict cost control and balanced price adjustments.

GROSS MARGINS IN E-COMMERCE REMAIN STABLE
Our European e-commerce business is continuing to deliver a stable gross margin, largely thanks to active efforts to optimise the product mix. Consumer sentiment remains low in the wake of inflation and high interest rates, impacting the e-commerce market as a whole. Our sales volumes therefore decreased in the second quarter, but not as much as previously, and there are signs of an emerging recovery in the European e-commerce market.

The launch in new Central European markets is going according to plan. Our consolidation and efficiency improvement efforts are also continuing as planned, and we look forward to the opening of the new e-commerce warehouse in time for the Christmas sales.

INDUSTRY LEADING CLIMATE PERFORMANCE
In the second quarter, we released our fifth sustainability report, which once again followed the latest version of the GRI standards and was reviewed and approved by our auditors. We saw further improvement in our climate performance compared to previous years, with a 3 percent reduction per litre sold. With this reduction we strengthen our industry leading position. According to the latest report from the Swedish Beverage Industry's Climate Initiative, our Swedish companies have on average a climate impact per litre sold which is 28 percent below the industry average for wine and spirits companies.

GREATER REGULATORY CLARITY
On 7 July, the Supreme Court ruled on Systembolaget's case against Winefinder. The Court clarified that distance selling from other European countries to Sweden is legal under the current Alcohol Act. We do not believe this will have any significant impact on the market or the monopoly as distance selling to Sweden has already been established for many years. Viva Wine Group does not currently engage in any e-commerce on the Swedish market, but we welcome clarification on this issue and monitor closely the development.

STABLE BUSINESS MODEL CREATES OPPORTUNITIES
Despite challenging market conditions, we have delivered a strong quarter, with successful product launches, good sales in the Nordics and stable profitability within our European e-commerce. Our robust business model, flexible ways of working, continuous innovation work and unique consumer knowledge allows us to quickly adapt to prevailing market conditions and trends, while creating synergies and maintaining tight cost control. We are constantly reviewing the landscape to find suitable acquisition candidates that can strengthen our e-commerce business, but we are picky and price-conscious at the same time.

In other words, Viva Wine Group has a solid foundation to build on, no matter which way the wind blows.

Emil Sallnäs, CEO Viva Wine Group
Stockholm, August 2023

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's interim report for the second quarter 2023 will be published on 29 August 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/45872. 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