Viva Wine Group Q1 2025 slides: Sales dip 1% amid major Delta Wines acquisition

Introduction & Market Context

Viva Wine Group (STO:VIVA) reported its first quarter 2025 results on May 15, showing a slight sales decline but continued market share gains across Nordic markets. The quarter was highlighted by the announcement of a significant acquisition of Delta Wines, which will substantially expand the company’s European footprint and transform its business structure.

The wine distributor saw its net sales decrease by 1.0% to 895 million SEK compared to 904 million SEK in Q1 2024, with organic growth at -0.9%. Despite this dip, which the company attributed primarily to Easter calendar effects, Viva Wine Group strengthened its gross margin to 21.2% from 19.1% in the comparable period.

As shown in the following summary of key performance indicators:

Quarterly Performance Highlights

The slight decrease in net sales was primarily driven by a 10 million SEK decline in the Nordic segment, while the e-commerce segment saw a minor 1 million SEK reduction. The company’s adjusted EBITA decreased by 13.0% to 50 million SEK, resulting in a margin of 5.5% compared to 6.3% in Q1 2024.

This financial performance represents a notable shift from the company’s strong Q4 2024 results, which had shown 8.7% sales growth and an 8.7% adjusted EBITA margin.

The following chart illustrates the sales decline across segments:

Profitability was mixed across business segments, with the Nordic region showing improvement despite sales challenges, while the e-commerce division faced margin pressure due to increased investments in customer acquisition:

The company’s net debt position stood at 506 million SEK at the end of Q1 2025, representing a net debt to EBITDA ratio of 1.3x, an improvement from 1.7x at the same point in 2024 but higher than the 1.0x ratio in 2023.

Cash flow was significantly affected by seasonal factors, particularly the build-up for Easter, which impacted working capital requirements:

Segment Performance

Nordic Segment

Despite the overall market decline in the Nordic region, Viva Wine Group continued to strengthen its market leadership position. The company achieved a record market share of 23.0% across the Nordics, with particularly strong positions in Sweden (28.6%) and Finland (22.1%).

The following table demonstrates the company’s market performance across Nordic countries:

While net sales in the Nordic segment decreased by 1.3% to 732 million SEK, the adjusted EBITA margin improved to 7.1% from 6.5% in the previous year, driven primarily by gross margin improvements:

E-Commerce Segment

The e-commerce segment showed resilience with slight organic growth of 0.2%, despite challenging consumer sentiment in key markets. However, profitability was impacted by increased investments in customer acquisition, with the adjusted EBITA margin declining to 3.7% from 7.6% in Q1 2024:

The company noted that it had implemented a brand facelift for its VICAMPO platform by the end of March and was testing new customer acquisition channels to drive growth.

Strategic Acquisition of Delta Wines

The most significant announcement of the quarter was Viva Wine Group’s binding agreement to acquire 88.59% of Delta Wines for 57 million EUR. This acquisition represents a strategic expansion of the company’s European operations and will significantly transform its business structure.

Delta Wines, founded in 1985, generated approximately 186 million EUR in revenue in fiscal year 2024 with an adjusted EBITDA margin of 6.8%. The company holds the #1 market position in retail and wine shops in the Netherlands, which accounts for 85% of its revenue.

The following slide provides an overview of Delta Wines’ business profile:

The acquisition creates a substantially larger combined entity with annual revenue of approximately 6.3 billion SEK and an EBITDA margin of 8.4%:

Viva Wine Group outlined several strategic rationales for the acquisition, including strengthened market access, diversification, and significant synergy potential:

The acquisition will be financed through a new term loan facility provided by SEB and Danske Bank (CSE:DANSKE). Following the completion of the transaction, the company’s net debt to EBITDA ratio is expected to temporarily exceed 3x, up from the current 1.3x level:

Forward-Looking Statements

In conjunction with the Delta Wines acquisition, Viva Wine Group announced plans to restructure its business segments. The current Nordic segment will be renamed to B2B and will include Delta Wines, while the e-commerce segment will be rebranded as B2C:

Following the acquisition, the B2B segment will represent approximately 89% of the group’s combined sales, with B2C accounting for the remaining 11%.

The company expects the acquisition to be accretive to earnings per share from day one and noted that its financial targets would be reviewed following the completion of the transaction.

In its final remarks, management emphasized the strategic importance of the acquisition, highlighting the cultural fit between the organizations and the potential for synergies:

While Viva Wine Group faces near-term challenges from weak consumer sentiment and the integration of a major acquisition, its continued market share gains and improved gross margins suggest underlying operational strength. Investors will be watching closely to see how effectively the company can integrate Delta Wines and leverage its expanded European platform to drive future growth.

Full presentation:

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