Q4 2022: Strengthened market shares in the Nordics and more efficient e-commerce structure in Europe

October – December 2022

• Net sales rose by 2.1% to SEK 1,053 (1,031) million.
• EBITA, adjusted, dropped to SEK 99 (144) million. The EBITA margin, adjusted, was 9.4% (13.9).
• Cash flow from operating activities increased to SEK 66 (33) million.
• Operating profit dropped to SEK 62 (298) million. The operating margin was 5.9% (28.9). The change is largely attributable to non-recurring items in the comparative figures, which were SEK 176 million higher for the quarter in 2021. Items affecting comparability in 2021 mainly relate to the non-cash effect of the revaluation of existing holdings at fair value on acquisition of Norwegian Beverage Group.
• Earnings per share amounted to SEK 0.52 (4.00), with 2021 strongly impacted by the above-mentioned non-recurring items.
• Market share increased to 26.0% (25.6) in Sweden, 18.8% (16.8) in Finland and 5.6% (5.5) in Norway.

January – December 2022

• Net sales rose by 14.8% to SEK 3,825 (3,331) million.
• EBITA, adjusted, dropped to SEK 377 (399) million. The EBITA margin, adjusted, was 9.8% (12.0).
• Cash flow from operating activities increased to SEK 286 (158) million.
• Operating profit dropped to SEK 310 (521) million. The operating margin was 8.1% (15.6). The change is largely attributable to non-recurring items in the comparative figures. Items affecting comparability in 2021 mainly relate to the non-cash effect of the revaluation of existing holdings at fair value on acquisition of Norwegian Beverage Group.
• Earnings per share amounted to SEK 2.86 (6.63), with 2021 strongly impacted by the above-mentioned non-recurring items.
• Market share increased to 25.5% (25.2) in Sweden, 16.8% (15.8) in Finland and 5.3% (4.2) in Norway.

Significant events during the year

• The management team was strengthened with a COO Nordics and CEO at Viva eCom.
• Acquisition of MyTaste & Food AB (Vinklubben), Sweden’s largest online community for wine.
• Divestment of Chinese operations through the sale to a related party, Vin och Vind AB.
• Sale of warehouse property in Germany as part of streamlining e-commerce operations in Europe.

Significant events after the end of the year

• The Board of Directors proposes to the Annual General Meeting an ordinary dividend of SEK 1.55 (1.50) per share.

Emil Sallnäs, CEO comments:

STABLE END TO A CHALLENGING YEAR AND A STRONG POSITION FOR 2023

All of us at Viva Wine Group can be incredibly proud of our fantastic performance in 2022. Despite high comparable figures and an extremely turbulent environment, we ended this challenging year with fourth quarter growth of over two percent and stable profitability of 9.4 percent.

MOST CHALLENGING YEAR OF MY CAREER
From a global perspective, 2022 was the most challenging year since I started my career in the wine business over 20 years ago. The year brought a perfect storm of input shortages, transport chain bottlenecks, a record weak SEK, general deterioration of market sentiment and a return to more traditional buying patterns after the pandemic. I am therefore very proud that we for 2022 delivered 14.8 percent revenue growth, including acquisitions, and an adjusted EBITA margin that, despite an highly unfavourable exchange rate, reached 9.8 percent.

We have strengthened our position in the Nordic monopoly markets and have laid the foundations for our new efficient European e-commerce business. Adaptations and efficiency improvements have enabled us to offset some of the cost increases, and we have also been able to pass on a large part to end customers.

STRONG FINISH IN THE NORDIC MONOPOLY MARKETS
Both the Sweden and Nordic segments finished the year on a strong note, with record market shares in both Finland and Norway. In Sweden, we balanced increased costs and an unfavourable exchange rate with price increases towards consumers. Despite raising prices, we managed to maintain volumes and continue to gain market share, demonstrating the strength of our product offering and the stability of our business.

In Finland, we managed to increase volumes despite an underlying market that declined by almost nine percent and captured a market share of 18.8 percent in the quarter. However, the effects of a return to more traditional shopping patterns are most evident in the Norwegian market. Here the market declined by over 18 percent in 2022 compared with 2021, when the monopoly saw significant benefits from trends such as fewer restaurant visits and the closure of border trade. It is therefore particularly rewarding that, despite the market downturn, our Norwegian business managed to increase its volumes in 2022.

We have seen a shift in consumer preferences for wines in slightly lower price ranges, where we already have a strong position. We have also quickly geared our product development to best meet this demand. We have lately had several successful product launches, including the successful Falu Rödvin, which we launched in Sweden in October. This demonstrates the strength of our business model – to be responsive to customer behaviour and preferences and to quickly come up with products that customers want.

EFFICIENT E-COMMERCE PLATFORM
We have also seen a change in buying patterns in Europe, with a shift towards wines in the lower price ranges. It has therefore been a great advantage to have product offerings in all price segments. Our Weinfürst brand, which offers quality wines in slightly lower price ranges, has performed well in both new markets, such as the Czech Republic, and its largest market, Germany.

Efforts to streamline our European e-commerce operations, initiated after the acquisition of Vicampo, have been in progress throughout the year and are now nearing completion. This is reflected in the adjusted EBITA margin of 11.6 percent in the last quarter in the eCom segment. In 2023, we will reach our goal of having an even more cost-efficient e-commerce business with one warehouse, one team and three platforms (Vicampo.de, Weinfürst and Wine in Black).

WE ENTER 2023 WITH GREAT CONFIDENCE
There are certainly good reasons to be humble about the near future, but with the lean and efficient organisation we have put in place both in the Nordic monopoly markets and in Europe, we have a fantastic platform for continued and increased profitable growth. We also continue to see exciting acquisition opportunities, particularly in e-commerce, where we can leverage our existing business. So even though some macroeconomic clouds still loom on the horizon, I feel confident and optimistic about 2023.

Emil Sallnäs, CEO Viva Wine Group
Stockholm, February 2023

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's Year-End Report 2022 will be published on 23 February 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/45870. 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