0QIS N1 Hf

Main results

• Sales of goods was ISK 34,199 million, compared to ISK 29,936 million in the previous year, an increase of 14.2% between years.
• Gross profit from sales of goods and services was ISK 7,756 million, an increase of ISK 431 million or 5.9% between years.
• Profit margins from sale of goods and services were 22.7%, which is 1.6 p.p. higher than previous quarter but 1.8 p.p. lower than previous year.
• Salaries and other personnel expenses increased by 21.4% YoY. Full-time equivalents increased by 9.7% YoY as a result of new stores opening in the second half of last year. Non-recurring expenses of ISK 154 million were expensed due to severance agreements related to structural changes during the quarter.
• EBITDA amounted to ISK 2,562 million compared to ISK 2,911 million in Q2 2022, a decrease of ISK 349 million between years.
• Equity at the end of Q2 amounted to ISK 33,641 million with an equity ratio of 35.5% compared to equity ratio of 36.9% at year-end 2022.
• Net cash from operating activities was ISK 2,859 million, compared to ISK 476 million in the previous year.
• EBITDA forecast for the year is unchanged at ISK 9,750 – ISK 10,250 million

Ásta S. Fjeldsted, CEO of Festi

Sales in Q2 increased by 14.2% between years. Improved contribution level across all operating segments during the quarter.

“We have improved our operation since the first quarter of 2023 despite challenges in the environment due to the impact of inflation, interest rate hikes, wage increases and continued price increases from suppliers. Sales of goods and services increased by 14.2%, with significant volume increase in grocery sales, fuel sales and sales of electronics. The number of customer visits to our stores between years grew by 12.1%, the number of goods sold by 12.9% and the number of fuel litres sold increased by 8.7%.

The margin from sales in the quarter was 22.7%, an increase of 1.6 p.p. from the last quarter with improvements in all business segments. Great emphasis is on reducing costs in the current market environment and action plans are in place in all operational units. Wages and personnel costs increased by 7.9% between years, without the impact of increased full-time equivalent positions and non-recurring costs on the quarter. Other operating expenses increased by 5.8%. The company's cash flow is very strong, with net cash from operations amounting to ISK 2,859 million, an increase of ISK 2,382 million from the previous year.

Organisational changes were made at the end of May, with Ýmir Örn Finnbogason appointed as the new Managing Director of N1 and Óðinn Árnason appointed Managing Director of Festi fasteignir. The changes were made, among other things, to sharpen the focus of the companies towards increased growth and to ensure that the company's investments are steered towards the right opportunities and increased value creation.

Agreement on the acquisition of the entire share capital of Lyfja ehf. was signed on 13 July, but the transaction is subject to, among other things, conditions on approval by Festi's shareholders' meeting, held before the end of August, and the approval of the Icelandic Competition Authority. Great opportunities lie in a strong service network across the country, the integration across the companies within Festi as well as the availability of a wider range of essentials at affordable prices.

The outlook for the Group is good, ahead is the most important time of the year for the Group's operations. A robust summer of tourists has begun and to accommodate this, N1 has introduced a number of new solutions, including new fuelling systems and self-service kiosks at service centres as well as a new mobile app that facilitates business with the company. ELKO has opened up B2B transactions through ELKO.is and Krónan's online store has grown 80% between years. We will continue to strive to improve margins on sales through better purchasing of goods with aim to lower unit costs, benefiting our customers and owners alike,” says Ásta S. Fjeldsted, CEO of Festi.

Attachments

• Festi hf - Company announcement Q2 2023
• Festi hf - Consolidated Statements for 2023 Q2

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