Equity research Viva Wine Group, Q2 2025: Soft markets, but expansion is underway

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In Q2 2025, soft markets and high OPEX hampered profitability. However, higher growth is in the cards, supported by the Delta Wines acquisition. Hence, we expect better momentum and gradual margin recovery in the coming quarters. We have made slight downward revisions to estimates and valuation, mainly related to increased OPEX and the European B2C business.

Stable performance despite soft market, stronger Q3 in the cards

Viva Wine Group’s net sales in Q2 2025 increased by 20 per cent, boosted by the acquisition of Delta Wines in May. Organic sales in the Nordics increased slightly despite a slow market (the Nordic wine monopolies markets decreased by 1.5% in volumes) and a difficult comparison period in 2024 with unusually high market share in Sweden. The B2B segment grew 25% due to the acquisition of Delta Wines in May. We are encouraged by the stable sales performance in Sweden and Delta Wines, contributing to overall ~2% higher net sales than anticipated. Sales in the B2C segment declined; however, organic growth for the segment was slightly positive in a challenging environment (as also reported by German peer Hawesko). Specifically, Viva’s efforts to attract new customers have yielded some results, counteracting generally lower consumer activity. Regarding outlook, reports from the Nordic monopolies show that July was a strong month, indicating a decent start to Q3 (however, August was cold). Viva says it has gained back market share in Sweden. Viva will also see the full contribution from Delta Wines in the current quarter. All in all, growth should pick up following a lacklustre H1.

Q2 margins affected by slow sales, M&A and higher OPEX

In the quarter, adjusted EBITA fell by 5.7% to SEK 101m, corresponding to a margin of 7.5%, vs our forecast of SEK 102m. The main deviation from our forecast was OPEX increasing more than expected in the B2B segment and on a group level, mitigated by total operating income exceeding our expectations, including the revaluation effect on a minority option of SEK 16m. EBITA and EBITA margin for the B2B and B2C segments were slightly below expectations, at SEK 91m (92) and SEK 11 m (17) and 7.8% (9.8) and 6.6% (9.8), respectively. Admittedly, Viva has guided for higher OPEX to support growth; however, market headwinds exacerbate the effect on profitability. Following the report, we have made some minor adjustments to our estimates due to higher OPEX and D&A. Also, we make more cautious assumptions regarding the e-commerce operations, forecasting single-digit growth in the medium term. Even if there is room to expand with good profitability, European wine markets are sluggish.

Profitability should start to recover

We expect better earnings momentum (adjusted EBITA) ahead from higher organic and acquired sales and a subsequent gradual margin improvement. Also, margins are typically seasonally stronger in Q4. Combined with a low valuation in a historical perspective, EV/EBIT ~11x (2026E), we see room for rerating of the shares. We have lowered our EBITA estimates by some four per cent due to higher costs and lower expectations for B2C.

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