Q4 2023: Strong momentum in the Nordics with record high market shares

October – December 2023

• Net sales increased by 4.3% to SEK 1,098 (1,053) million. Organic growth was 4.4% (-0.4).
• EBITA, adjusted, decreased to SEK 70 (99) million. EBITA margin, adjusted, was 6.3% (9.4). The change is mainly explained by negative currency effects.
• Cash flow from operating activities increased to SEK 92 (66) million.
• Operating profit decreased to SEK 35 (62) million. Operating margin was 3.2% (5.9). The change is mainly explained by negative currency effects and non-recurring costs.
• Market share increased to 27.4% (26.0) in Sweden, 21.3% (18.8) in Finland and 6.4% (5.6) in Norway.
• Earnings per share was SEK 0.00 (0.52).

January – December 2023

• Net sales increased by 4.1% to SEK 3,981 (3,825) million. Organic growth was 3.3% (-3.7).
• EBITA, adjusted, decreased to SEK 292 (377) million. EBITA margin, adjusted, was 7.3% (9.8). The change is mainly explained by negative currency effects.
• Cash flow from operating activities decreased to SEK 212 (286) million.
• Operating profit decreased to SEK 165 (310) million. Operating margin was 4.1% (8.1). The change is mainly explained by negative currency effects and positive non-recurring effects in 2022.
• Market share increased to 26.6% (25.5) in Sweden, 19.5% (16.8) in Finland and 5.9% (5.3) in Norway.
• Earnings per share was SEK 1.19 (2.86).

Significant events during the year

• The Sweden and Nordic operating segments were merged during the year and are now reported as the Nordics.
• Viva eCom started delivering from its new centralised e-commerce warehouse outside Mainz in Germany.
• Viva Wine Group AB appointed ABG Sundal Collier (ABGSC) as liquidity provider for the company's shares.
• Viva Wine Group entered into an agreement to acquire the Norwegian company Target Wines AS, which was finalised in February 2024.

Significant events after the end of the year

• As of 1 January 2024, Viva Wine Group's Swedish subsidiaries Chris Wine & Spirits AB and Winemarket Nordic AB merged to form Morningstar Brands AB.
• The Board of Directors proposes to the Annual General Meeting an ordinary dividend of SEK 1.55 (1.55) per share.

Emil Sallnäs, CEO comments:

ANOTHER YEAR OF RECORD HIGH MARKET SHARES IN THE NORDICS DESPITE SOFT MARKETS

We ended 2023 with record growth in the Nordics and by becoming the no 1 in the Finnish market. Viva eCom also performed relatively well in a weak European e-commerce market. Our centralised e-commerce platform in Europe is in place, and we are continuing to open new markets.

STRONG PERFORMANCE DESPITE CURRENT MARKET CONDITIONS
In terms of sales, 2023 was our best year ever with sales of SEK 4 billion, corresponding to overall growth of 4.1 percent. In the Nordics, we grew by as much as 6.9 percent despite a weak underlying market in all three countries. Viva eCom was impacted by a weaker e-commerce market, particularly in Germany, and declined by 5.5 percent, which we consider to be a good performance under current market conditions. The gross margin in Viva eCom strengthened during the year thanks to active work on the product mix and reached 41.7 percent in the quarter. In total for Viva Wine Group, adjusted EBITA margin was 7.3 percent for 2023, negatively impacted by the weak Swedish and Norwegian currencies. Besides currency effects, the quarter was also negatively impacted by non-recurring costs related to our acquisition agenda and efficiency improvements. During the year, we made active efforts to offset currency effects, with both balanced price adjustments and good cost control, to gradually strengthen margins going forward. Even though the FX headwind has eased, due to our hedging policy there will be a delay in margin improvement. With the refinancing carried out in the second half of the year, we will also lower our existing financing costs going forward.

WE ARE TAKING THE LEAD IN FINLAND
We ended 2023 in the Nordics in the best way imaginable, with record high market shares, while all three monopoly markets declined in volume. In Finland we became the market leader with a market share of 21.3 percent in the quarter, and in Sweden we surpassed 27 percent in the quarter. Our sales volume in Finland grew strongly during the quarter by 9.3 percent, while the market declined by 3.5 percent. The Norwegian business was the strongest performer in the fourth quarter, with growth in volume of 11.9 percent in a market that declined by 2.1 percent. At the end of the year, we also reached an agreement to acquire Target Wines AS. With its own brands and high profitability, the company will further strengthen our position in the Nordic market.

SETTING THE STAGE FOR GROWTH IN EUROPE
We have had a busy year in Viva eCom, as we have laid the foundation for our European expansion with a new centralised e-commerce warehouse in Germany and continued expansion in Eastern Europe. During the quarter, the e-commerce market in Europe continued to be affected by lower consumer sentiment and purchasing power, also during the Christmas season. We have not yet seen an improvement or turnaround in consumer sentiment. We expect the market to continue to be soft in the beginning of the year, but we are hopeful that the market may return to growth again in 2024.

CONTINUED HIGH AMBITIONS IN SUSTAINABILITY
As an industry leader in sustainability, we have high ambitions. We are committed to reducing our CO2 emissions per litre of wine sold by 2030 and achieving net zero climate impact by 2050. During the year, we improved our measurement and data collection methods and also integrated Finland and Norway into our monitoring of climate emissions. We are now working to prepare for the forthcoming EU Corporate Sustainability Reporting Directive (CSRD).

A CHALLENGING AND EVENTFUL YEAR BEHIND US
Inflation and higher market interest rates have had a significant impact on consumer sentiment and price sensitivity, while we are facing currency headwinds in the Nordic market. I choose to take a positive view. This just means we have to do things smarter and operate even more efficiently.

A lot of things fell into place in 2023. The ambition we had when we acquired Vicampo has become reality, and we can now leverage our European organisation. We are continuing to work actively on the acquisition agenda and to find suitable acquisitions.

We end 2023 with strong momentum in the Nordics, taking market shares in all countries. From the beginning of 2024, alcohol duties will be increased in all the monopoly markets, mostly in Sweden and Finland, and it remains to be seen how this will impact the end-consumer. The strength of our business model is speed to market and meeting consumer preferences.

To conclude, I am extremely proud of all our employees and partners who have contributed to making the strong position we have today possible, and look forward to 2024 with confidence.

Emil Sallnäs, CEO Viva Wine Group
Stockholm, February 2024

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's year-end report 2023 will be published on 22 February 2024 at 8:00 am. At 11:00 a.m. on the same day, a video conference will be held with CEO Emil Sallnäs and CFO Linn Gäfvert. The video conference can be accessed at the following link: https://financialhearings.com/event/48949. The presentation will also be made available at https://investors.vivagroup.se/

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

For more information, please contact:
Emil Sallnäs, CEO
Tel: +46 70 956 58 72
Email: emil.sallnas@vivagroup.se

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