Viva Wine Group (VIVA) Q3 2024 earnings summary

Executive summary

• Achieved record-high market shares in all Nordic countries, with Sweden at 27.7%, Finland at 21.3%, and Norway at 6.2%, reinforcing leadership in wine sales.

• Group delivered strong organic growth of 5.8% and improved profitability, with adjusted EBITA/EBITDA margin rising to 9.9% from 8.1% year-over-year, a 27% increase.

• Nordics segment drove growth, while eCom faced challenges from weak consumer sentiment, especially in Germany.

• Positive outlook maintained for full year 2024, with continued focus on margin improvement and M&A opportunities.

• John Wistedt appointed Deputy CEO effective October 1, 2024.

Financial highlights

• Q3 net sales rose 4.8% year-over-year to SEK 998 million, with organic growth at 5.8%.

• Adjusted EBITA increased to SEK 98 million (+27.7% YoY), margin at 9.9%; operating profit up 68.6% to SEK 76 million.

• Earnings per share: SEK 0.50 (vs. 0.43 YoY); cash flow from operating activities: SEK 26 million (vs. 14 YoY).

• Net debt to EBITDA improved to 1.1x from 1.7x year-over-year, well below 2.5x target.

• Net working capital rose due to timing effects, not operational changes.

Outlook and guidance

• Confident in finishing 2024 strongly, driven by momentum in the Nordics and margin improvement.

• OPEX expected to remain flat year-over-year in Q4, with future growth aligned with business expansion.

• Gross margins anticipated to improve in Q4 due to recent price hikes, with stable outlook for 2025 barring currency shifts.

• Long-term eCom market growth in Europe expected to normalize at 10% when conditions improve.

• Financial targets: annual organic growth >4% in Nordics, 10-15% in eCom, adjusted EBITA margin 10-12%, net debt/EBITDA <2.5x, and dividend payout of 50-70% of annual net profit.