Q2 2024: Continued good growth and improved profitability

April - June 2024

• Net sales increased by 6.4% to SEK 1,114 (1,047) million.
• EBITA, adjusted, increased to SEK 107 (77) million. Adjusted EBITA margin increased to 9.6% (7.4).
• Cash flow from operating activities decreased to SEK -6 (21) million.
• Operating profit increased to SEK 81 (47) million. Operating margin was 7.2% (4.5).
• Market share in volume increased in all the Nordic monopoly markets, in Sweden to 29.1% (26.0), in Finland to 20.4% (18.7) and in Norway to 6.3% (5.6).
• Earnings per share was SEK 0.38 (0.46).

January - June 2024

• Net sales increased by 4.6% to SEK 2,018 (1,930) million.
• EBITA, adjusted, increased to SEK 164 (145) million. EBITA margin, adjusted, was 8.1% (7.5).
• Cash flow from operating activities decreased to SEK 90 (105) million.
• Operating profit increased to SEK 114 (84) million. Operating margin was 5.6% (4.4).
• Market share in volume increased in all the Nordic monopoly markets, in Sweden to 28.7% (26.3), in Finland to 20.7% (18.7) and in Norway to 6.5% (5.8).
• Earnings per share was SEK 0.82 (0.76)

Significant events during the quarter

• A dividend of SEK 1.55 per share was approved by the AGM on 23 May and paid on 30 May.

Emil Sallnäs, CEO comments:

IMPROVED PROFITABILITY IN THE NORDICS – ORGANIC GROWTH IN ECOM
A strong second quarter where we once again achieved record high market shares in our Nordic segment. In Europe, the market stabilised and eCom delivered positive organic growth. At the same time, profitability improved for the whole Group.

CONTINUED GROWTH AND INCREASED PROFITABILITY
Viva Wine Group achieved a strong second quarter of 2024 with growth of 6.4 percent. We are continuing to gain market shares in the Nordics and are now seeing signs of easing in our European e-commerce markets. At the same time, our profitability is increasing, and adjusted EBITA margin for the quarter was 9.6 (7.4) percent.

RECORD HIGH NORDIC MARKET SHARE
In the Nordics segment, sales volume increased by 5.1 percent in the second quarter. Our market share, in terms of volume, was as high as 22.9 (20.3) percent, our highest figure to date for the Nordic markets. The market in general declined by 6.6 percent compared with the same quarter of 2023, largely due to poorer weather conditions and the fact that Easter occurred in the first quarter this year. Our performance in the Nordics shows that our consumer centric business model is really delivering. It gives us speed to market and allows us to adapt to changing consumer trends. Particularly our successful work with line extensions, where we launch new wines in already established brands, has yielded good results. We are also seeing that the trend towards the lower price segments is continuing, and several new bag-in-box wines sold well during the quarter. In addition to our continued positive underlying sales trend in the Nordics, Viva Wine Group's sales in Sweden also benefited from a cyber-attack that affected the logistics company Skanlog and disrupted deliveries for some of our competitors. In Finland, the law permitting the sale of wine up to 8 percent alcohol in grocery stores came into force in June, and our launch in this segment resulted in an increase in net sales. It is too early to say how the market will be affected going forward, but we eagerly wait to see how the initiative continues to be received by Finnish consumers.

GRADUAL MARGIN IMPROVEMENT IN THE NORDICS
The profitability of our Nordic operations improved significantly during the quarter, and we delivered an adjusted EBITA margin of 9.8 (7.1) percent. The strengthened margin is explained by increased sales in the Nordics but is also a result of our ongoing price increases having now started to offset the cost increases and exchange rate effects of recent quarters, in combination with good cost control.

ECOM IS SHOWING ORGANIC GROWTH
During the quarter, we saw signs of stabilisation in the European e-commerce market, although consumer sentiment remains at low levels. Our organic growth in eCom was 0.1 (-9.7) percent, a significant improvement compared to the same quarter of 2023. This improvement is in line with what is happening in the market at large but has also been positively impacted by our strategic work on optimising our customer offerings and strengthening the organisation. During the quarter, we focused on developing the 11 markets where we already have a presence. We are also continuing to pursue our strategic initiatives for cost-efficiency and to further strengthen our customer offering and retention.

WE ARE STRENGTHENING THE SUSTAINABILITY ORGANISATION
Our work on CSRD implementation is progressing according to plan. During the spring, we worked on strengthening our sustainability team both at group level and in the companies, a process that will continue during the autumn. Much of our sustainability work is done in our operating companies, which have primary responsibility for the value chain and contact with our producers.

LONG-TERM EFFORTS YIELD RESULTS
Viva Wine Group delivered a strong quarter, both in the Nordics and in the European e-commerce market, with successful product launches, improved profitability and organic growth. We are continuing to adapt to a turbulent environment, while seeing some easing in external factors. Cost increases that have eased and the European e-commerce market that seems to have started to stabilise. We consequently continue to anticipate better market growth in 2024, although we do not rule out the risk of temporary setbacks. We are well-positioned financially for further acquisitions and our efforts to find profitable and high-quality companies that fit into our business are ongoing. The success factor for Viva Wine Group is that we remain consistent in our strategy. We have an established and agile business model and are engaged in long-term efforts to optimise the business, which we see are delivering good results. All in all, we had a strong second quarter, and it appears that we are returning to a more stable situation after a long period of macroeconomic headwinds. I therefore feel hopeful for the rest of 2024.

Emil Sallnäs, CEO Viva Wine Group
Stockholm, August 2024

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's interim report for Q2 2024 will be published at 8.00 am on 28 August 2024. At 11:00 a.m. on the same day, a videoconference will be held with CEO Emil Sallnäs and CFO Linn Gäfvert. The videoconference can be accessed at the following link: https://financialhearings.com/event/48951. 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:
Linn Gäfvert, CFO
Tel: +46 73 086 89 90
Email: linn.gafvert@vivagroup.se