Viva Wine Group AB

Good morning everyone and welcome to our Q4 2025 presentation. My name is Emil Sallnes and I will together with our CFO and newly appointed Deputy CEO Linn Jävert 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. 2025 was a year of growth and expansion. Today, almost 90% of our business is in our B2B segment, which includes the Nordic monopoly markets, as well as retailers and restaurants in both the Nordics and Europe. With the acquisition of DeltaWise, our B2B business is now present in seven markets. As you might have seen, we kickstarted the new year with the acquisition of Alfa brands in Norway, which I will come back to later in the presentation. In the Nordic monopoly market, we are the market leader in wine. With the acquisition of Delta Wines, we also entered the open market in Europe and we are the leading wine distributor in the Netherlands. Just over 10% of our sales is in the B2C segment, which consists of our e-commerce business based in Germany. We operate three platforms, Vikampo, Weinfjost and Wine&Black, selling to 11 markets. And with that, we are one of the leading online wine retailers. So, now let's move on to the Q4 update and our performance summary. Looking at Q4, I'm pleased to report that we delivered both strong growth and strong margins. Net sales increased significantly by 49%, mainly driven by the acquisition of Delta wines. Adjusted EBITDA increased year-on-year as an effect of the consolidation of Delta wines, and the adjusted EBITDA margin of 9% was also higher than last year. We also had a very strong operative cash flow in the quarter thanks to a solid operative performance. Finally, the board of directors proposes an increase to the dividend of 160 krona per share. We have had a good EPS growth driven by strong underlying business where Delta Wines has contributed positively. Now over to our latest acquisition, Alfa Brands. Alfa Brands is a fairly young company but funded and run by seasoned professionals. The management of Alfa sees the transaction as an important step to accelerate its growth rate together with Viva. The acquisition strengthens Viva's presence in Norway while it also opens up the grocery retail market in Norway for us. Worth noting is that alcoholic beverages up to 4.7% are sold outside the monopoly. It is also a significant step for Viva into the no-low segment, which is the fastest growing segment in most of the markets where Viva operates. The company, Alfa, has an innovative portfolio of both own and partner brands in the Norwegian market. For example, Storm, Crush, Vithit and Snapple. With Alfa's experienced team and clear focus on innovation and market leadership, we see a strong cultural fit. Finally, it was also an important factor for us that the whole management stays on as significant shareholders. Now let's look in more detail on the financial performance. I will hand over the word to Lynn.

Thank you, Emil. We have a strong net sales growth of 49% driven by the acquisition of Delta Wines. Organic growth was negative at 1.6 due to slow markets and high comparable numbers in our B2B segments. Our estimate is, however, that we have performed above the markets. In our B2B segment, we continue to be the clear number one in the Nordics and Delta Wines' performance and integration is going according to plan. B2C reported positive organic growth for the fourth quarter in a row and also continued to grow its customer base. Looking at the adjusted EBITDA, it has increased versus previous year, mainly as an effect of the consolidation of Delta wines, but also excluding Delta wines, adjusted EBITDA increased versus previous year. The higher adjusted EBITDA margin is a result of the strong gross margin percentage in our B2B business driven by the Nordics. Looking at the cash flow, we have a strong operative cash flow and that is a result of a solid underlying operating performance and also a seasonally strong working capital development. The cash flow from our financing activities includes repayments of term loans according to plan and a reduction of overdrafts. Proceeds from the distribution issue also had a positive impact during the quarter. Our net working capital had a strong development and the net working capital to net sales ratio is down from 12.9% in previous quarter to 9.6%. A high level simulation including net sales for 12 months shows that the ratio is slightly below last year's number, supported by good numbers by Delta Wines. Our net debt to EBITDA is developing according to plan and is down from 3.6 in Q3 to 2.6. We expect to continue to deliver as the EBITDA of Delta wines is consolidated month per month. A high level simulation of rolling 12 months of EBITDA reduced the number from 2.6 to approximately 2.5, which is in line with our financial targets.

Thank you, Lynn. So now over to the performance by segment. First out is our B2B segment. Viva Wine Group is now a significant player in the European retail business of wine. In the Nordic monopolies, we remain the clear market leader and we increase our market share. We are number one in Sweden and Finland, and we have now moved up to number five in Norway. For the Nordic markets combined, Viva Wine Group reported a market share of 22.6% for the full year, which is a slight increase from last year. Our B2B business in Europe has performed in line with expectations and above the market according to our estimates. With the acquisition of Alfa brands, Viva Wine Group is now a significant player also in the Nordic grocery retail business.

Total net sales in segment B2B increased significantly by 59% in the quarter and the increase versus last year is driven by Delta wines. Organic growth was negative at 2.5% due to slow marks and high comparable numbers. Adjusted EBITDA increased versus last year and adjusted EBITDA margin in the quarter was in line with last year and ended up at 10%. Strong margins in the Nordics offset the lower margin structure of Delta wines.

Segment B2C, which consists of our Ecom business, had a strong quarter and delivered organic growth for the fourth consecutive quarter, a result of our long-term strategic work and successful marketing investments. In Q4, the organic growth was 4.5%. Despite the slow overall market, we have seen a continued growth in active customers due to a strong customer acquisition. Thanks to this strong performance, our estimate is now that we outperformed the market both in profitability and growth.

In the B2C segment, our net sales was in line with last year and we have continued our positive organic growth reaching, as Emil said, 4.5% in the quarter. The gross margin was slightly lower, mainly due to the market mix. Adjusted EBITDA margin in Q4 was lower than prior year, driven by our successful marketing investments.

So, before my final remarks, I would like to take a look at the year in relation to our newly updated financial targets, which are set for the medium term. Looking at the goal for growth for the full year, we delivered organic growth under demanding market conditions, which means that we have outperformed the market. The profitability goal of 8% to 10% was almost reached with a 7.9% EBITDA margin for the full year. Our capital structure has been deleveraged according to plan and we are at the end of the year with a net debt EBTA ratio of 2.6 times, which is just above our target of 2.5. Finally, the proposed and increased dividend to 1.60 per share is within our dividend policy of 50 to 70% of annual net profits. To summarize, with Delta fully integrated in the quarter, we are a significantly larger company with a stronger footprint in Europe. We show record numbers for the group as a whole. Sales increased with 1.3 billion in 2025, thanks to DeltaWise. Adjusted EBITDA was also significantly higher and at the record level for the full year. When looking back at the year, it's especially pleasing to see that our B2C business is back on the growth track with a positive organic growth for each quarter of the year. In the fourth quarter, we changed listing venue from First North to Nasdaq Main Market, which is an accomplishment we are very proud of in the company. M&A has been in focus during the last 12 months with important strategic acquisitions. During 2025, we strengthened our position in the European wine market with the acquisition of Delta, and this year we started with the acquisition of Alpha Brands. We will continue to carefully evaluate strategic targets while we continue to deleverage according to plan and stay in line with our financial targets. And with that, it's now time for the Q&A session.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Frederick Iverson from ABG Sundahl Collier. Please go ahead.

Thank you for the presentation and the questions. First a few on the gross margin and then first maybe if you could help us with the impact from the delta acquisition i.e. what would the gross margin have been if you sort of strip out delta from the equation?

We have had a strong gross margin development in our underlying business. I would say that looking at last year's total number of 20.5% we moved up approximately 1% this year in the underlying business. leading to the total number of 19.9 for the total business this year but as then said it's up around one percent since last year for the underlying business so good strong performance yeah thanks very clearly thank you and then a forward-looking question on the gross margin

In the end of November, when you reported Q3, you gathered for a stable gross margin, I believe, if I recall correctly, for this year in the respective business units. But since then, I guess, both Swedish krona and the Norwegian krona have strengthened versus the euro by a few percentage points or percent. And then this is obviously... positive for your online earnings and implies an FX tailwind when looking into 2026. And then my question is, should we expect the gross margin to continue to strengthen or will you sort of reinvest this tailwind into the offering instead and focus on growth?

Starting at the gross margin development, we expect the underlying business to have a stable development as said in Q3, as you mentioned. It will perhaps strengthen a bit the underlying business, but still we believe in stable development. Towards the end of the year, if the headwinds tailwinds in the FX, we could see some tailwinds in H2. because we also have our hedging effects. So I would still say stable on gross margin, a bit strengthening on the underlying business. Looking to Q1 and Q2, we will have five more months where we consolidate delta wine. So that will of course affect the total gross margin percentage. But if...

we get tailwinds and if we invest that will be of course below gross margin but looking at gross margin stable with positive positive effects in h2 yep makes sense thanks and then a question on delta which has been part of the group for almost a year now what what's your key reflections from from working with this company for almost a year

Well, first of all, that we work very well together and that we also have been able to create a lot of talks and synergies in terms of product and producer discussions, maybe not seen yet in the sales, but we will soon see that. Corporation wise, it's going very, very well. And then in terms of the performance, we are happy. This is exactly according to the expectations we had when we acquired the company. And so we are good. It's very well integrated into Viva Wine Group now. And as with any acquired company, they have to spend quite a bit of time on the integration the first few months, but now they can fully focus on the business.

Yes, and they have, as we said, when we bought the company, they have contributed according to plan. So we have an EPS growth of 10 to 11% this year already, which is very strong. And we also have the leverage according to plan. So that is a very strong acquisition from looking at from the financial side.

Yeah, it seems like it. And to follow up on what you just said Emil on sales synergies or product, is that more related to Delta gaining from being able to source from your sort of legacy products or the other way around or both?

It goes both ways, definitely. We try to create as many interesting business opportunities, let's call it, maybe more than synergies as possible and then the companies are delivering on some of those in the coming year or so.

Okay, thanks. Last one from my side before I jump back into the queue, and a broader one, I guess, if you could share any observations in terms of consumer behavior during the last months. Is it sort of status quo, or have you seen any meaningful changes in the start of 26?

looking at actual data the data are exactly the same as you saw in Q4 that the markets and especially in the Nordics where we have maybe the clearest market data the markets are still not very strong more in line with Q4 however I mean there are small indications that that the demand for more expensive wines is coming back for example so the temporary assortment is going a little bit better in Sweden so there are small signs that the consumer are especially in Sweden seeing the fact that they in theory should have a little bit more money to spend now that the taxes are lower interest rates are lower and soon also the VAT it will be lower on food not on wine then obviously but making more room in the budget for wine, hopefully.

Yep, thanks so much for answering the questions. That's all for me.

The next question comes from Johan Fred from SEB. Please go ahead.

Yes, thank you guys for taking my questions. A first one on Delta Wine, contributing 50 million to adjusted EBITDA in the quarter. which if my math is correct equates to roughly 8% margin here in Q4, a significant step up from roughly 4% in Q3 and I assume similar levels in Q2. Should we expect similar seasonal patterns for Delta wines going forward or was there anything particular that you want to highlight that may have impacted the Delta wines profitability in Q4?

Well as we have said before also Q4 is strong for Delta wines so the seasonal pattern will continue so Q4 is strong but this is not a step up that we will also see in Q1 it will have its seasonal pattern as it had this year so yeah but we're happy with their performance and we have said before that the full year number we will be around six-ish yeah got it got it and then just to clarify then Q1 we should expect similar margin patterns as say Q3 for example yeah more in line with that yeah got it but lower i would also say it must be taken into context that q1 is the weakest quarter in general in in all markets so that must also be you can look at the seasonal pattern for for the ongoing business yeah of course of course thank you for for clarifying that and also if do you mind sharing delta's growth rate here in q4 We don't exactly have the growth rate specifically, since we don't have the numbers in that way, but I would say that the market is down, but we have a positive sales development. I would say somewhere around one-ish, two-ish percentage. So positive growth, which is very strong since we estimate that the underlying market did not have a positive development.

Got it. Perfect. Thank you. And finally, on the Nordic markets, you remain number one in Sweden and Finland and advance your position to number five in Norway. What are your strategic priorities for 2026 when it comes to the Nordic? And a follow-up question on that is, what would it take to further improve your position in Norway, for example?

I think in Norway we have already adjusted our business model a little bit. We are a little bit more focused on own labels in Norway. So in terms of growth, we will see a lot of growth from that in Norway in the coming year. And if I'm going to tell you exactly what I've told the companies in the Nordics is that the focus in 2026 is really growth. Then when it comes to growing in Norway, of course, considering our position and how the Norwegian market works, I think to take a significant step up in that ranking to become, let's say, number one, which we like to be, we would have to acquire at least one company. So that's how it is. But we expect to grow in Norway and continue growing and maybe reaching number four in not too distant future. But after that, we probably we will need acquisitions.

Yeah, that's very clear. Thank you so much for taking my questions and for your time, Evelin.

Thank you.

The next question comes from Niklas Elmhammer from Karlsruhe. Please go ahead.

Hello, thank you and good morning. And thank you for the presentation and the good answers. Just a bit of a follow-up here on OpEx. If I remember correctly, you have said before that you expected level two in relative to sales to go up in 2025 and normalize thereafter. If you perhaps could comment or update your views here.

Yes, of course. Well, looking at 2025 OPEX level, the total absolute number will move up a bit in 2026 due to the fact that we will consolidate five more months of Delta wines into the numbers. But our OPEX to net sales guidance remains the same as we have said before. It was around 12.3 percentage points for 2025. Now we expect it to go down to around 11% for 2026.

Okay, thanks very much. That was my question. Thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Rowley Juva from Indiers. Please go ahead.

Yeah, hi, Raleigh from Inderes here. Thanks for the good comments. I have one question still left. I was just wondering how do you see the competitive situation or the changes in that recently, if there is any. At least one of your main competitors seems to be making an effort to regain some market shares in Sweden. So I was wondering if that is showing in any way or if there's something else happening in that competition you want to mention.

Being careful about commenting on our colleagues. Obviously, we have seen that they have put a lot of effort into especially the Swedish market. But if you look at the timeline over a longer period of time, these are ebbs and flows in the market that we always see. So we are not concerned in any specific way with that.

Yeah, okay, and no other kind of meaningful changes either.

Outside of that there are other competitors that are doing well and we are doing well as well. I mean it is a tough market and it all depends a little bit on which part of the year you put your efforts in in terms of new launches and we know for example that we will start 2026 with a very strong number of listings coming in through the normal

newly launched products in March now that we will have a lot of new products coming in so so we are very confident for 26. yeah and if you are you're targeting for growth I guess that basically means that you aim to also continue taking market share in during this year

Yeah, if the market, I mean, the consensus seems to be that the market will be down somewhat and we expect to have growth. So yes, we expect to be not in any big steps because obviously it's easy, but that's our expectation. Yes.

Yeah, exactly. All right. Thank you very much. That's all for me.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

So we have a couple of questions from Alexander. What was the organic growth for Delta in 2025?

Well, we don't disclose the exact numbers as I said, but around 1-ish percent, 2-ish percent.

Do we have the adjusted EBITDA pro forma for 2025 for Delta?

Not the exact number, but I would say it's around 6.

Gross margins on current EuroCirc levels, gross margins guidance for Q1, Q2, 2026, question mark.

Yes, and we have elaborated around that, but to repeat, the underlying business has moved up like one percentage point from last year to this year, and then it will be expected to stay stable during this year. And there could be positive signs of improvement in the second half of the year if the FX tailwinds continue. but currently we have our hedge effects but it will be strong but then also to repeat that in Q1 and Q2 we will have a negative gross margin percentage mix because we include delta wines for five months but the underlying business will stay on strong levels

Good. Can you describe season effects on gross margins in delta?

The gross margin effects is pretty much the same as the whole segment B2B and historic seasonal patterns.

Great. Any comment regarding OPEX guidance for 2026?

Yeah, we said that and to repeat it, it's around 11% to net sales so it will move down percentage-wise from 2025 but in absolute numbers it will go up since we have five more months of Delta wines.

and then find one final question regarding buybacks with current valuation what is the board's current view regarding using buybacks to drive EPS growth well it's not for me to speak for the board but of course being now on the main market this is a tool that the board continues to evaluate and then it's of course always a timing question we have made acquisitions we need to do leverage buybacks is another factor but it's something that the board is considering actively yes And with that, I think we have ended the... That concludes today's session. Our next report on Q1 will be published in May. Thank you all for today and hope to see you soon.