Viva Wine Group AB

Welcome to Viva Wine Group presentation for Q2 2025. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Emil Salnas and CFO Lynn Gavir. Please go ahead.

Good morning everyone and welcome to our Q2 2025 presentation. My name is Emil Svallnäs and I will, together with our CFO, Lynn Gavert, present today. This is the agenda for today and before we go into the quarterly update on financials, I want to start by giving you a short introduction to Viva Wine Group. We, now after the acquisition of Delta Wines, have two main segments in the group, business-to-business, B2B, and business-to-consumer, B2C. Business-to-business consists of the Nordic countries as well as Netherlands, Poland, Belgium, and the Czech Republic, all markets where we do not sell directly to consumers. B2C consists of our e-commerce business based in Germany, but with consumers spread over a number of countries in Europe. In our B2B segment, we operate in the Nordic monopoly market. We are the clear market leader in wine, where we are the clear market leader in wine. Our operating companies are active in Sweden, Finland and Norway. And now with Delta Wines, we have expanded our B2B presence into Europe. Delta Wines have a strong presence in all distribution channels from retail, sales to e-com platform, food services, wine shops and exports. In our B2C segment, we operate three Ecom platforms, Dicampo, Wine First and Wine in Black, covering in total 11 different markets. So now let's move on to the Q2 update and our performance summary. Net sales increased significantly due to the acquisition of DeltaWise and increased by over 20%. Organic growth was positive at 1%. A positive effect from Easter was partly offset by a slower development following cold weather in May. Furthermore, we have a comparison effect versus last year, when some of our colleagues had severe logistical problems, which boosted our sales in Q2 2024. We increase our gross profit while our gross margin percentage declines as a result of the acquisition of Delta Wines, a business with lower gross margins than our historic business. Our remaining business, excluding Delta Wines, increases in gross margin. Adjusted EBITDA for the quarter decreased to 7.5% compared with 9.6% last year as a result of the lower gross margin percentage, one-time expenses for the acquisition, and additionally from the previously communicated step-up in OPEX. Now, let's look in more detail at the financial performance, and I will hand over the word to Lynn.

Thank you, Emil. We have a positive net sales growth of 20.2% for the group, as Emil mentioned, a result of the acquisition of Delta Wines. Viva Wine Group, excluding Delta Wines, was affected positively by Eastern, but as Emil mentioned, due to very cold weather and also high comparable figures in Sweden Q2 2024. Still, the group managed to grow organically by 1%. In our B2B segment, Delta Wine is the growth driver in Q2. Without Delta Wines, the sales was flat versus last year with a small negative currency effect. B2C declined slightly in the quarter, which is entirely in effect from a negative exchange rate. Our B2C business showed a small growth in local currency. We have a decrease in our adjusted EBITDA versus last year. The main reasons are our strategic OPEX step up to be able to support our growing Nordic business, marketing investments in our B2C segment and professionalization of the organization. The lower adjusted EBITDA margin is a result of the lower gross margin percentage in the acquired business and our investments in OPEX. The gross margin percentage excluding the acquired business continue to strengthen. Looking at our net working capital, it has increased as a result of the acquisition and higher inventory. Net working capital to net sales is higher due to that only one month of net sales is included. A high level simulation including net sales for 12 months shows that the ratio is in line with numbers pre-acquisition. We have the same development in net debt, where we have full effect from our new loan, but only one month result. We expect to deleverage ongoing as the EBITDA is consolidated month per month. A high level simulation of adding 12 months of EBITDA reduced the number from 4.1 to approximately 3. We expect to deleverage and reach our financial targets of 2.5 within approximately one year. To go with our cash flow, we have a stable operative cash flow in the quarter. Cash flow from investing activities include acquisition of Delta wines with a cash flow effect of 566 million Swedish kronor. Cash flow from our financing activities is according to plan, where dividends was paid during the quarter, Planned acquisition of shares in subsidiary was paid out and further change in liabilities to credit institutions, where we include a new loan of 633 million Swedish kronors.