Equity Research Viva Wine Grooup: Preview, Q4 2023

Preview Viva Wine Group, Q4 2023: Growth expected despite continued tough markets

Viva Wine Group will release its Q4 2023 report on 22 Feb. 2024. The corresponding telephone conference will be hosted on the same day at 11:00 a.m. Below are Carlsquare Equity Research’s updated estimates ahead of the report.

• Total net sales in Q4 2023 are expected at SEK 1,075m, corresponding to a growth of 2.1%. The Nordics is expected to continue to grow despite a challenging market with falling sales volumes at the Nordic monopolies; however, we now expect a pace marginally lower than what we had assumed in the initial coverage report. In a similar vein, we have slightly lowered our sales estimates for Viva eCom compared to our estimates in the initial coverage report, on the back of somewhat soft retail sales in Germany in Q4 2023,
• We expect gross profit calculated on net sales at SEK 210m, which is equal to a margin of 19.5%. The SEK and NOK have strengthened against the EUR, but the full effects on gross margins are not anticipated to be realised in Q4 due to the timing of inventory turnover.
• EBITA is one of Viva Wine Group’s key measurements of profitability. “Recurring adjustments are made for payments to the founders of Vicampo. We expect adj. EBITA for Q4 at SEK 88m (99), corresponding to a margin of 8.2%. That is slightly lower than the estimates presented in the initial coverage report.
• Based on an estimated EPS of around SEK 1.6 per share for 2023, we expect the proposed dividend per share to be between SEK 0.8 and 1.15.

With slightly downward adjusted estimates, a fair value per share of SEK 46.2 (46.3) is calculated by combining a DCF model with three comparison valuation models. Valuations based on EV/Sales are up, while those based on EV/EBIT and a DCF model are down.

Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, is engaged in corporate finance and equity research, publishing information on companies and including analyses. The information has been compiled from sources that Carlsquare deems reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be considered a recommendation or solicitation to invest in any financial instrument, option, or the like. Opinions and conclusions expressed in the analysis are intended solely for the recipient.

The content may not be copied, reproduced, or distributed to any other person without the written consent of Carlsquare. Carlsquare shall not be liable for either direct or indirect damages caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments offer the potential for appreciation and gains. All such investments are also subject to risks. The risks vary between different types of financial instruments and combinations thereof. Past performance should not be taken as an indication of future returns.

The analysis is not directed at U.S. Persons (as that term is defined in Regulation S under the United States Securities Act and interpreted in the United States Investment Companies Act of 1940), nor may it be disseminated to such persons. The analysis is not directed at natural or legal persons where the distribution of the analysis to such persons would involve or entail a risk of violation of Swedish or foreign laws or regulations.

The analysis is a so-called Assignment Analysis for which the analysed company has signed an agreement with Carlsquare for analysis coverage. The analyses are published on an ongoing basis during the contract period and for the usually fixed fee.

Carlsquare may or may not have a financial interest with respect to the subject matter of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.

The analysts Markus Augustsson, Christopher Solbakke and Niklas Elmhammer do not own and may not own shares in the analysed company.