Q2 2024 Financial Results

Festi hf.

Main results

• Merchandise sales amounted to ISK 36,037 million, compared to ISK 34,199 million in the previous year, an increase of 5.4% year-on-year.

• Gross profit from sales of goods and services was ISK 8,593 million, an increase of 837 million or 10.8% year-on-year.

• The margin on sales of goods and services was ISK 23.8% and increased by 1.1 pp compared to Q2 2023 and by 2.0 pp compared to Q1 2024.

• Salaries and other personnel expenses increase by 6.6% and full-time equivalents by 4.5%.

• EBITDA was ISK 2,915 million, compared to ISK 2,562 million in Q2 2023, an increase of 13.8% year-on-year.

• Profit for the quarter was ISK 953 million, or 11.1% sales margin, an increase of 29.1% year-on-year.

• Net cash from operating activities was ISK 3,063 million or 35.6% of the sales margin, compared to ISK 2,859 million last year.

• Equity at the end of Q2 2024 was ISK 36,105 million, with an equity ratio of 37.2%.

• Lyfja hf. will be included in the Consolidation in the second half of the year. The EBITDA guidance for the year 2024 is increased by ISK 800 million to ISK 12,300 – 12,700 million.

Ásta S. Fjeldsted, CEO:

Quarterly operations proceeded as planned

• The company’s operations were good in the second quarter and results were in line with the company’s budget. Profit margins improved for all Group companies and increased by 1.1 pp year-on-year. Working closely with suppliers to reduce costs, increasing own imports and success in reducing shoplifting are primarily producing these results, as a recent ASÍ price survey clearly shows for the food market. The number of visits to our stores increased compared to the same quarter last year, with a good increase in sales volumes for most product categories year-on-year.

• The company’s operating profit (EBITDA) was ISK 2,915 million (Q2 2023: ISK 2,562 million), an increase of 13.8% year-on-year. The profit for the second quarter was ISK 953 million, an increase of ISK 215 million year-on-year. The outlook for the second half of the year is good. Lyfja joins the group as of July 1st and the company’s EBITDA forecast for the year 2024 has been increased by ISK 800 million and is: ISK 12,300-12,700 million.

The main projects of the quarter and beyond:

• A major milestone was reached by the Festi group when the acquisition of Lyfja was completed on July 10th. The purchase price for the share capital was ISK 7,117 million. Payment was made in cash in the amount of ISK 5,077 million and in the form of delivery of 10 million Festi shares with a market value of ISK 2,040 million based on the closing price of ISK 204 on Nasdaq Iceland on 10 July 2024.

• The acquisition offers great opportunities for collaboration, synergy, increased efficiency and growth between the companies. The coming weeks and months will be spent synchronizing the companies and controlling the operation of the systems, combining operations where appropriate and ensuring that Lyfja achieves even greater success with all the dynamic employees who work there. App and online sales, as well as well-located service stations and our stores across the country, will play a key role in this.

• A new and renovated Krónan store in Grafarholt opened on July 11th and the reception was great from day one. Krónan in Bíldshöfði will receive a similar overhaul in the third quarter and will reopen before the end of October.

• Krónan’s expansion into the countryside has been very well receivedand Krónan’s Smart Store began serving East Iceland during the quarter. Smart Store’s revenue as a whole increased by 35% year-over-year.

• The renovation of ELKO’s flagship electronics store in Lindir has begun, which will provide even better access to new and fun technology experiences for our customers. The formal opening is scheduled for October.

• Ýmir Örn Finnbogason has retired as CEO of N1 at the end of June and the vacancy will be advertised for applications in the autumn.

• The first of seven automatic car washes to be installed this year has opened in Mosfellsbær in July. The next seasons will open in August and September.

• 20 Tesla fast charging stations will be ready in Reykjanesbær at the N1 service station in Flugvellir in August. N1 has upgraded fast-charging stations in Hvolsvöllur, Blönduós and Skógarlind and Tesla construction is starting on service stations in Blönduós and Staðarskáli.

The story continues

There is an exciting time ahead with Lyfja on board. The emphasis will continue to be on improving revenue growth, maintaining profit margins and continuing to work on projects related to reducing total unit costs.

Attachments

Fuente