Equity research Viva Wine Group, Q1 2024: Solid growth but at modest margins

Viva Wine Group (the company or Viva) will release its Q1 2024 report on 16 May 2024. Below are Carlsquare Equity Research’s updated estimates ahead of the report.

• In Q1 2024, the total sales volume in the monopoly market experienced a modest increase, partly due to the positive impact of Easter falling in March. We anticipate that Viva will continue to outpace the monopolies in sales volume growth, leading to an expected net sales increase of 8.0% to SEK 754m for the Nordic segment in Q1 2024. This represents an upward revision of our estimates by 2.4% compared to the research update published on 23 February 2024.
• In Germany, the primary market for the Viva eCom segment, consumer confidence remained low over the past quarter, mirroring the trend in retail sales. Given this, we anticipate ongoing challenges in the eCom segment, with expected net sales to decrease by 1.4% to SEK 180m. This reflects a downward revision of 1.6% compared to the previous research update.
• Total net sales for Viva Wine Group, accounted for the Other segment and eliminations, is expected to grow 6.0% to SEK 936m. This represents a slight upward revision of our estimates by 1.4% compared to the previous research update.
• We anticipate a gross profit calculated from net sales at SEK 181m, equating to a margin of 19.1%. This represents a downward revision of 0.2 percentage points in our estimated gross margin compared to the previous research update. This adjustment is due to the expectation that FX will exert more pressure on the gross margin to than previously assumed.
• We expect an adjusted EBITA at SEK 52m, corresponding to a margin of 5.6%. That is unchanged from what was presented in the initial coverage report. Adjusted EBITA is one of Viva Wine Group’s key measurements of profitability. Historically, “recurring adjustments” are made for payments to the founders of Vicampo. This adjustment is to be ceased as of Q1 2024.
• EPS is expected at SEK 0.15 per share, unchanged from the last research update.

Read the latest research update here.

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.