Viva Wine

January – March 2024

• Net sales increased by 2.4% to SEK 904 (883) million.
• EBITA, adjusted, decreased to SEK 57 (68) million. EBITA margin, adjusted, was 6.3% (7.7).
• Cash flow from operating activities increased to SEK 96 (84) million.
• Operating profit decreased to SEK 33 (38) million. Operating margin was 3.6% (4.3).
• Market share in volume increased in all our Nordic markets. Share increased to 28.1% (26.7) in Sweden, 21.1% (18.8) in Finland and 6.8% (5.9) in Norway.
• Earnings per share was SEK 0.44 (0.30).

Significant events during the quarter

• On 1 January 2024, Viva Wine Group's Swedish subsidiaries Chris Wine & Spirits AB and Winemarket Nordic AB merged to form Morningstar Brands AB.
• Viva Wine Group completed the acquisition of the Norwegian wine supplier Target Wines AS during the first quarter.

Emil Sallnäs, CEO comments:

RECORD HIGH MARKET SHARES IN THE NORDICS – CONTINUED EXPANSION IN ECOM
Strong organic growth and increased sales volumes in the Nordics in the quarter. Our European e-commerce business continued to be affected by weak consumer sentiment, but we expect a turnaround during the year.

CONTINUED GROWTH IN A CHALLENGING MARKET
Viva Wine Group delivered a solid first quarter with organic growth of 2.8 percent and an adjusted EBITA margin of 6.3 percent. Net sales for the last twelve months exceeded SEK 4 billion for the first time, despite the continued challenging market conditions.

Our Nordic segment developed strong, with organic growth as high as 6.1 percent. In the European e-commerce market, we are still feeling the effects of low consumer sentiment. However, slightly positive signals in the market contribute to our continued expectation of a turnaround in the latter part of the year.

INCREASING NORDIC MARKET SHARES
We are continuing to gain market shares in all the monopoly markets and reached new record levels in all our markets for the first quarter. Sales volumes in the Nordic region increased by 7.5 percent, in a market that, despite the positive effects of the early Easter this year, grew by only 0.4 percent. Following alcohol tax increases at the beginning of the year, together with balanced price adjustments, we see that consumers have remained loyal to our strong portfolio of brands.

In Sweden we are seeing a trend towards increased sales of rosé and sparkling wines and made many launches during the quarter. In the Vinordic Wine Challenge 2024, many of our products attracted great attention and won awards in several categories. In total, we were awarded 46 medals.

In Norway, we grew both organically and through the acquisition of Target Wines, which developed favourably, fully in line with expectations.

In Finland, we are seeing our long-term strategy to increase market share in white and sparkling wines in particular having produced good results.

CURRENCY EFFECTS ARE CONTINUING TO PRESSURE GROSS MARGIN IN THE NORDICS
The gross margin for Nordics decreased in the quarter to 14.4 percent. We have not fully been able to benefit from the strengthening of the Swedish and Norwegian currencies from the beginning of the year as we have some currency hedges from previous quarters.

Looking ahead we expect to see a gradual improvement, which is, however, dependent on future exchange rate movements.

At the same time, we are continuing to work on good cost control and our effective price adjustment strategy.

STRONG GROSS MARGIN IN VIVA ECOM
Consumer sentiment in European e-commerce markets was cautious in the quarter, particularly in the German market. Sales in eCom were lower than in the same quarter of 2023, impacted by the weaker market and some shifts in marketing campaigns between years. However, Viva eCom is continuing to show a strong gross margin, at 39.8 percent. Operating costs are lower than in the previous year, mainly driven by lower personnel expenses, and we are continuing to balance growth and profitability.

WE CONTINUED OUR EXPANSION IN EUROPE
In market research, we see cautiously positive signs that a turnaround in the consumer sentiment in Germany will come during 2024. At the same time there is strong growth potential in Eastern Europe. We continued our expansion eastwards, and in the quarter we launched Weinfürst in Bulgaria, where performance so far looks promising. As a result, we are now established in 11 markets in Central and Eastern Europe and have expanded our market potential to a total of 230 million consumers. Our focus going forward is on continuing to grow in these markets.

WE ARE PREPARING FOR CSRD
During the quarter, we consolidated our sustainability results from 2023. Our climate impact from packaging has decreased during the year – the share of both climate-smart packaging and lightweight glass packaging has increased. Looking ahead, we continue to have an ambitious sustainability agenda, focusing fully on the preparation and implementation of the forthcoming EU Corporate Sustainability Reporting Directive (CSRD).

GOOD PROSPECTS FOR THE FUTURE
Despite tough market conditions, we are continuing to grow the business in the Nordics and maintain gross margins in Viva eCom. Our success in the Nordics is a strong proof of that our business model really works and our ability to adapt quickly to changing demand is one of our key success factors. Viva eCom has a strong and scalable platform that we will leverage when the market in Europe turns around, which we expect it will during the year. We are continuing to look for the next acquisition in Europe, but at the same time have high quality standards.

We see great potential ahead. Viva eCom has had a good start in terms of sales in the second quarter, trending towards organic growth. In Finland, a parliamentary bill has been introduced to allow wine to be sold at up to 8 percent in ordinary grocery stores. This is expected to come into effect in the second quarter and could make a positive contribution to our sales. Together with tailwind from our Nordic markets and expectations of a more positive market in Europe, this gives me great hopes for 2024.

Emil Sallnäs, CEO of Viva Wine Group
Stockholm, May 2024

Please see the full report in the attached pdf.

Publication and presentation
Viva Wine Group's interim report for Q1 2024 will be published at 8.00 am on 16 May 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/48950. 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