Equity research, Viva Wine Group: We expect a slight improvement in EBITA-margin in Q2 2024

Viva Wine Group (the company or Viva) will release its Q2 2024 report on 28 August 2024. Below are Carlsquare Equity Research’s updated estimates ahead of the report.

• Based on data from the monopolies in the Nordics, wine sales volumes in those local markets decreased in Q2 2024 by 6.6%. This decline partly to the weather. Another contributing factor was fewer days in Q2 2024 compared to Q2 2023. Despite this, we expect Viva to continue to outperform and gain market shares in the Nordics. In Q2 2024, this is partly due to the logistical issues faced by some competitors and price hikes. We forecast the Nordic segment to report net sales of SEK 909m in Q2 2024, reflecting a growth of 4.8%. Our new estimate represents a 1.6% downward revision from our previous estimate published on May 20, 2024.
• Although improving, German consumer confidence remained low over the past quarter. This mirrors the trend in German retail sales, which somewhat lag both the rest of the Euro area and Sweden. Consequently, we anticipate ongoing challenges in the eCommerce segment, with expected net sales down by 7.6% year-over-year to SEK 163m. This is an upward revision of 2.9% compared to the previous research update, partially due to favourable e-commerce sector data.
• Total net sales for Viva Wine Group, including the Other segment and eliminations, are expected to grow by 2.5% to SEK 1,073m.
• For the group, we anticipate a gross profit calculated from net sales at SEK 211m, equating to a margin of 19.7%. That can be compared to a gross margin of 19.6% in Q2 2023.
• For the group, we expect an adjusted EBITA of SEK 86m, corresponding to a margin of 8.0%. That corresponds to an improvement in margin by 0.6 percentage points for the quarter, year-over-year. See the table below for more detailed estimates per segment.
• EPS is expected at SEK 0.39 per share. That is an upward revision from SEK 0.28 in the last research upside due to the assumption of lower losses on hedges due to FX movements.

Read the latest research update here.

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