Equity research Viva Wine Group, Q3 2024: Nordics segment exceeds expectations

Today, Viva Wine Group published its interim report for Q3, 2024. Below is a compilation of our first impressions of the outcome, including deviations from our estimates. The company will host a webcast with a telephone conference today at 11:00 a.m.

Viva Wine Group’s sales figures exceeded our expectations, as did the gross margin and adjusted EBITA margin. Growth in the Nordics segment was overall higher than our forecast, with Sweden as the main positive contribution. Sales in the eCom segment declined more than we had expected, but profitability was still relatively decent. Despite some uncertainty in Europe, Viva states it feels optimistic about the last quarter of the year.

The initial market reaction to the report is expected to be positive.

• In Q3 2024, Viva Wine Group reported net sales of SEK 998m, corresponding to a 4.6% growth. Our forecast for the quarter was SEK 974m.
• The Nordic segment increased net sales organically by a solid 8.3% on an underlying market with a negative volume growth of 3.5%, exceeding our expectation of 4%.
• Net sales for the Viva eCom segment declined by 8.9%, burdened by a weak German market. Our expectation was negative 3%. However, profitability was higher than we had anticipated.
• Gross profit calculated on net sales increased by 16% in Q3 2024, year-over-year, to SEK 206m. Our forecast was SEK 202m. The gross margin improved markedly by 1.9 percentage points to 20.6%. Our forecast was 20.8%.
• Like in the previous quarter, Viva achieved a strong improvement in profitability. Adjusted EBITA increased by 27% to SEK 98m, corresponding to a margin of 9.8%. Our forecast was SEK 90m, equivalent to a margin of 9.3%. The difference is in large due to higher sales in the Nordics and overall better margins than expected.

We intend to provide an updated analysis of Viva Wine Group shortly. Read the last research update report here.

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