Viva Wine Group AB

Good morning everyone and welcome to our Q4 2024 presentation. My name is Emil Salles and together with our CFO, Lynn Javert, I will present today for you. This is the agenda 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 Ecom. In the Nordic monopoly market, we are the market leader in wine In Europe, we have a profitable ecom business across 11 markets. Our operating companies are in the Nordic monopoly markets, Sweden, Finland and Norway, while our ecom business is based in Germany. Germany is also our main market for ecom. Now let's move on to the quarterly update and performance summary. In the quarter, we continue to report increased market shares in the Nordics. This is the 13th straight consecutive quarter as a listed company in which we increase our Nordic market share. In fact, the actual growth streak is much longer, something we of course are very proud of. In the quarter, the net sales for the group increased by 8.7%, with an organic growth of 8.2%. We also report a strong growth in profitability. Adjusted EBITDA increased 49.6% to reach an 8.7% margin compared with 6.3% last year. Finally, the board proposes an unchanged dividend of 155 krona per share. Now, let's look at the financial performance and I will hand the word over to Lynn who will give you a closer view.

Thank you, Emil. We have a positive net sales growth of 8.7% for the group, where we closed the quarter strongly. Viva Wine Group performed very strong in continued soft markets. Group organic growth was strong as well, reaching 8.2%. The Nordic countries are the drivers, where all three countries, Sweden, Norway and Finland, performed strongly. All countries in the segment Nordics also increased the position compared to the market. Ecom declined slightly in the quarter as the consumer sentiment, especially in Germany, has remained at low levels. Looking at the profitability, we had an improved profitability, and as Emil mentioned, of 49.6%. And we see a strengthened adjusted EBITDA margin reaching 8.7% in the quarter. The increase is related to the Nordics and comes from improved sales and stronger gross margins. The small decline in adjusted EBITDA in Ecom is mainly related to the sales decrease. Slight decline in other compared to last year due to further professionalizing of the organization and support to our M&A agenda. We have well balanced price adjustments in the Nordics and we have a positive contribution to our gross margins. And as said in previous quarter, our solid sales development proves that consumers have remained loyal to our strong portfolio of own brands and partner brands. Looking at our net working capital, it is below last year and slightly better in relation to net sales. Our net debt is well within our target and net debt to EBITDA decreased to 1.4. Cash flow for the quarter, we have a very strong operative cash flow, both from strong result for the quarter and positive effect from changing working capital. Working capital was high in Q3 due to timing effects, which had a positive effect in this quarter instead. During the year, the bank overdraft was used, however, in Q4 fully repaid. In Q4, we acquired shares in subsidiaries from minority owners due to natural reasons such as retirement.

Thank you, Lin. So now over to the performance by segments. We have, as mentioned, continued our steady growth in the Nordic market shares and once again increased more than the market. We report record high market shares for Q4 in all the Nordic monopoly markets and solidified our number one position. This is despite the overall market performing softer with decreased sales in two of the three monopoly markets. The key success factor for us beating the market is our business model, which allows us to quickly adapt to changes in consumer demand and introduce new products that match this consumer demand. For the Nordic markets combined, Viva Wine Group reported a market share of 22.2% for Q4, which is an increase of 0.8 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 innovation and are seeing a positive response from customers to our new product offering. In Finland, we also continue to beat the monopoly market and increased our market share to 22.8%. In June this year, we entered a new channel in Finland, which is wine with alcohol contents of up to 8% in supermarkets and in general outside of the monopoly. The rollout has followed our plan and after seven months we estimate that we have the same market position in this channel as in the monopoly market. In Norway, we also increased our market share to 7.3%. The increase in market share in Norway is driven by a strong organic growth and by the acquisition of target wines. With Q4 completing the calendar year, we'll also take a look at the development of the Nordic market share for the full year. We have, as mentioned, a long history of growth in the Nordics, and in the last five years, we have grown our market share from 17% to 22.4%. In 2024, we accelerated our growth pace and increased our market share with 1.6 percentage points compared with previous year.