Financial results for Q3 2024

Main results

• The Lyfja operation became part of the Festi group on July 1^street2024.

• Merchandise sales were ISK 44,257 million, up ISK 6,923 million or 18.5% year-over-year, or 6.4% excluding Lyfja.

• Gross profit from sales of goods and services reached ISK 10,829 million, an increase of ISK 2,255 million or 26.3% year-over-year, or 9.6% excluding Lyfja.

• The margin from the sale of goods and services was 24.5% and increased by 1.5 pp from the 3rd quarter of 2023 and increased by 0.7 pp from the 2nd quarter of 2024.

• Salaries and other personnel costs were ISK 4,826 million, up 31.3% or 8.8% excluding Lyfja.

• EBITDA reached ISK 4,741 million, representing a year-on-year increase of ISK 836 million or 21.4%. Excluding the effects of Lyfja, the increase is 9.3%.

• Profit for the quarter reached ISK 2,232 million, or a 20.6% margin on sales, representing a year-over-year increase of ISK 416 million.

• Net cash from operating activities was ISK 4,643 million or 42.9% of sales margin, compared to ISK 3,383 million last year.

• Equity at the end of Q3 2024 was ISK 40,434 million with an equity ratio of 35.7%.

• EBITDA estimate for 2024 increases by ISK 400 million to ISK 12,700-13,100 million.

Ásta S. Fjeldsted, CEO:

• The company’s operations exceeded expectations. We have seen improvement in all areas of operation with increases in customer traffic, number of goods sold and number of liters of fuel sold year-on-year. Profit margins strengthened for all companies in the group and rose 1.5 pp year-over-year or 0.7 pp excluding Lyfja, the same margin level achieved last quarter. We are pleased with the result, which shows that the cost-side measures taken to improve profit margin levels have been successful.

• Lyfja has been part of the company’s operations since July 1 where sales of goods and services reached ISK 4,549 million in the quarter. Lyfja’s EBITDA reached ISK 473 million and profit ISK 186 million. Financial comparisons between years are difficult because Lyfja is a newcomer to the group.

• Festi’s operating profit (EBITDA) reached ISK 4,741 million. (Q3 2023: 3,905 million ISK), a 21.4% increase over the previous year. Third quarter profit reached ISK 2,232 million, an increase of ISK 416 million over the previous year. The outlook for the last quarter of the year is good and the company’s 2024 EBITDA estimate increases by ISK 400 million to ISK 12,700-13,100 million.

The story continues

Main projects in the quarter and in the future:

• Festi and Olís have started the formal process of selling the companies’ shares in Olíudreifing ehf. on the 26^Thursday September. Olíudreifing is 60% owned by Festi and 40% by Olís. The company is an important infrastructure company when it comes to fuel storage and distribution in Iceland. Íslandsbanki Corporate Finance was entrusted with managing the sale process. Further information on the progress of the sale process will be provided as and when required.

• Karen Ósk Gylfadóttir has been hired as CEO of Lyfja on October 11 and is now a member of the Festi Executive Committee. For the past three years, she served as the Executive Director of Product, Marketing and Digital Development at Lyfja. Karen Ósk takes over from Hildur Þórisdóttir, who has served as CEO since summer 2023 in addition to her work as Human Resources Director. Festi hired Hildur as the company’s human resources manager.

• The Lyfja office will move to the Festi headquarters in Dalvegur at the beginning of November. With the transfer, the companies’ support services will be combined as part of several projects that are being worked on to achieve synergy in the acquisition of Lyfja. Projects have varying timelines, but most projects are estimated to be completed within the next 12 months.

• Tomorrow, October 31, the largest ELKO store in Lindir opens after extensive reconstruction and changes. The decrease in sales in Lindir during the construction period was completely transferred to the other ELKO stores, which showed a significant increase between the years.

• The position of General Manager N1 has been advertised and the selection process will start in the next few days.

• Three automatic car washes opened on Gagnvegur, Lækjargata and Stórihjalli and the continued increase in the number of charging stations in cooperation with Tesla, which opened its largest charging park in Iceland on the N1 at Reykjanes Airport in early September. N1 also installed new fast charging stations in Egilsstaðir, Ísafjörður, Sauðárkrókur and Blönduós during the quarter.

• Renovation work at the Krónan store in Bíldshöfði was started and the plan is to open a stylish and improved store at the turn of November and December.

• The progress of Krónan’s Smart Store continueswith home deliveries for the inhabitants of the mountainous areas of Árnessýsla starting from quarter a the turnover of the Smart Store increased by more than 40% between years.

The company is getting bigger and stronger. Emphasis will continue to be placed on improving revenue growth, reducing costs and sharpening efficiency in order to increase profit margins and reduce unit costs in the Group.

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