Financial results for Q3 2024

Main results

• Lyfje’s operations became part of the Festi group from July 1^str2024.

• Merchandise sales totaled ISK 44,257 million, up ISK 6,923 million or 18.5% year-on-year, or 6.4% excluding the effects of Lyfja.

• Gross profit from sales of goods and services amounted to ISK 10,829 million, an increase of ISK 2,255 million or 26.3% year-on-year or 9.6% excluding the effects of Lyfja.

• The margin from the sale of goods and services was 24.5% and increased by 1.5 pp from Q3 2023 and increased by 0.7 pp from Q2 2024.

• Salaries and other personnel expenses were ISK 4,826 million and increased by 31.3% or 8.8% excluding the effects of Lyfja.

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

• Profit for the quarter came to ISK 2,232 million, or 20.6% of sales margin, an increase of ISK 416 million year-on-year.

• 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 amounted to ISK 40,434 million with an equity ratio of 35.7%.

• EBITDA guidance for 2024 is increased by ISK 400 million to ISK 12,700 – 13,100 million.

Ásta S. Fjeldsted, CEO:

• The company’s operations exceeded expectations. We saw improvement in all areas of operation with an increase in customer visits, number of merchandise sold and number of liters of fuel sold over the years. Profit margins have strengthened for all Group companies and increased by 1.5 percentage points year over year, or 0.7 percentage points excluding Lyfja, which is the same margin level achieved in the last quarter. We are pleased with the result, which shows that the cost-side measures taken to improve the level of profit margin have been successful.

• Lyfja was part of the Company’s operations from July 1 where the sale 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 comparison between years is difficult due to the new entry into the Lyfja group.

• Festi’s operating profit (EBITDA) reached 4,741 million ISK. (Q3 2023: ISK 3,905 million), which is an increase of 21.4% from last year. Profit for the third quarter reached ISK 2,232 million, an increase of ISK 416 million from last year. The outlook for the last quarter of the year is good and the company’s EBITDA guidance for 2024 has been increased by ISK 400 million to ISK 12,700 – 13,100 million.

The story continues

The main projects for the quarter and the following:

• Festi and Olís started an official process of selling the company’s properties in Olíudreifing ehf. with 26^th of September. Olíudreifing is 60% owned by Festi and 40% owned by Olís. The company is a vital infrastructure company in terms of fuel inventory and distribution in Iceland. Íslandsbanki Corporate Finance has been entrusted with the management of the sale process. Further information on the progress of the sale process will be provided as soon as necessary.

• Karen Ósk Gylfadóttir was hired as Lyfja’s Managing Director on October 11 and is now a member of the Festi Executive Committee. For the past three years, she has served as the Managing Director of Products, Marketing and Digital Development at Lyfja. Karen Ósk takes over from Hildur Þórisdóttir, who was CEO along with her work as Human Resources Director from the summer of 2023. Hildur has been hired by Festi as the company’s Human Resources Manager.

• Lyfja’s office will be moved to Fest headquarters in Dalvegur in early November. With the transfer, the companies’ support services will be merged as part of several projects being worked on to achieve synergy in the Lyfja acquisition. Projects have different timelines, but it is estimated that most projects will be completed in the next 12 months.

• ELKO’s largest store opens in Lindir tomorrow, October 31, after renovation and numerous changes. The decline in sales in Lindir during the construction period was completely transferred to ELKO’s other stores, which recorded significant growth over the years.

• The position of the managing director of N1 has been announced and the recruitment process will start in the coming days.

• Three automatic car wash stations were opened in Gagnvegur, Lækjargata and Stórihjalli and a continuous 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, at the beginning of 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 has started and The plan is to open a stylish and upgraded store in late November/December.

• The progress of Krónan’s Smart Store continueswith home deliveries to residents of the mountainous areas of Árnessýsla starting in the quarter and Smart Store’s turnover has increased by over 40% over the years.

The company is getting bigger and stronger. The focus will continue to be on improving revenue growth, containing costs and sharpening efficiencies to increase profit margins and reduce unit costs across the Group.

Annexes