Viva Wine Group AB

Hello everyone and welcome to our Q3 presentation. My name is Emil Salnes and I will, together with our CFO, Linn Jævert, present today. This is the agenda for today and before we go into the quarterly update and financials, I want to start by giving you a short introduction to Viva Wine Group. Viva Wine Group consists of two major segments, the Nordics and Econ. The Nordics consists of the three monopoly markets, Sweden, Finland and Norway, where we are the market leader in wine. This is currently 83% of our net sales. The remaining 17% is our e-com business based in Germany and serving 11 markets in Europe. Now, let's move on to the quarterly update and performance summary. First of all, we again reached record high market shares for the quarter in all of the Nordic markets, strengthening our position as the market leader in wine. And since the Nordics is by far our biggest segment, this means that we had a very solid organic growth of 5.8% for the group as a whole. We are also very happy to report that the EBITDA margin reached 9.9% up from 8.1%, a very solid increase in profitability of 27%. So all in all, a very strong quarter for the group. Now let's look at the financial performance in more detail. And for that, I will hand over the word to Lin.

Thank you, Emil. We have a positive net sales growth of 4.8% for the group, organic growth even slightly better reaching 5.8%. The Nordics is the driver and primarily Sweden. All countries in the segment Nordics also increase its position compared to the markets. Ecom declined in the quarter as the consumer sentiment was weaker than expected in Q3. We had an improved profitability and we see a strengthened adjusted EBITDA margin reaching, as Emil said, 9.9% in the quarter. The increase is related to Nordics and comes from improved sales and stronger gross margins. The decline in adjusted EBITDA in Ecom is related to the sales decrease. Our well-balanced price adjustments in the Nordics have had a positive contribution to our gross margins. And our solid sales development proves that consumers have remained loyal to our strong portfolio of own brands and partner brands. Our net working capital is above last year, and the net working capital towards net sales is slightly higher. The increase in net working capital is, however, a timing effect and not related to any operational change. Our net debt is well within our targets. Looking at the cash flow, we have a strong operative cash flow from the ongoing business. While working capital was negative due to timing effects, naming trade payables offsetting the amount. The refining thing that we did last year in Q3 now has a positive effect related to paid interest year on year. Our repayments according to plan are also at lower levels.

Thank you, Lynn. So now over to the performance by segments. In the Nordics, we have a continued steady growth and again increased more than the market. We reported record high Q3 market share in all the Nordic monopoly markets. This is something we are very proud of since the overall market decreased and sales in all of the three monopoly markets declined. The key success factor for us beating the market is our consumer-centric and decentralized business model, which allows us to quickly adapt to changes in consumer demand. For the Nordic markets combined, Viva Wine Group reported a market share of 22.2%, which is an increase of an impressive 1.4 percentage points from last year. In Sweden, we reached almost 28% market share in the quarter and beat the market in all wine segments. We continue to have a high pace of introducing new products and are seeing consumers responding positively to the new offering. In Finland, we also continue to beat the monopoly market and increased our market share with almost 2 percentage points, reaching 21.3%. Since June, we have also entered a new market, which is the sales of wines with alcohol content of up to 8% in supermarkets. The rollout has been according to plan, and we estimate that we have a strong market position also in this new channel. In Norway, we increased our market share to 6.2%. The increase in market share in Norway is driven by organic growth and price increases, but also volume, and of course, also by our acquisition target wines.