Equity research Viva Wine Group: Positive profitability trend should continue in Q4 2024

Viva Wine Group (the company or Viva) will release its Q4 2024 report on 20 February 2025. Below are Carlsquare Equity Research’s updated estimates ahead of the report.

• Based on sales statistics from the Finnish and Norwegian markets, we expect wine volumes in the Nordic monopolies to have declined also in Q4, mainly driven by slow sales in Alko stores (Finland) due to the migration to the grocery channel. However, we assume a more stable Swedish market to mitigate the slowdown.
• We remain confident of growth in Viva’s Nordics segment due to market share gains during 2024, price adjustments, and good performance in the Finnish grocery channel. In fact, with fewer market headwinds, we raise our expectations for the Nordics segment in 2024 somewhat.
• The development for Viva e-com is harder to estimate given the “bumpiness” of recent quarters, slow markets, and still low consumer confidence in, for example, Germany. As we see no apparent signs of an upturn, we adopt a more cautious view in the short term and expect another quarter of lower demand.
• We revise our total net sales estimate for Viva Wine Group, including the Other segment and eliminations, in Q4 2024 upwards to SEK 1,151m (from SEK 1,134m previously), corresponding to a growth of 4.8 per cent.
• Viva Wine Group has guided for a sequentially improved gross margin (Q3: 20.6 per cent) and stable operating costs y-o-y. We assume an OPEX of SEK 141m in the past quarter. This supports our view of a continued robust profitability trend.
• For the group, we expect an adjusted EBITA of SEK 106m (70), corresponding to a margin of 9.2% (6.3).
• We will review our current base case valuation of SEK 51 per share in conjunction with the Q4 report. We believe the share price decline since the release of the Q3 2024 report is unwarranted and probably explained by a weak performance for the alcoholic beverages sector in general. Thus, we see a good opportunity for a rebound in the share price in the run-up to the Q4 report on 20 February.

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