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Festi — Interim / Quarterly Report 2020
Feb 24, 2021
2195_rns_2021-02-24_ba06917f-e3ba-48f6-9c76-b046f20fb847.pdf
Interim / Quarterly Report
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24 February 2021 – Festi Q4 2020 Interim Report
FESTI
Profit in Q4 2020 ISK 526 million
Main results
- Margin from sales of goods and services was ISK 5,288 million compared to ISK 5,273 million in Q4 2019, increase of 0.3%.
- EBITDA ISK 1,746 million compared to ISK 1,766 million in Q4 2019, decrease of 1.1%.
- Decline in results is related to COVID-19 restrictions enforced beginning Q4 2020.
- Gross margin from sales 22.8% in Q4 2020 compared to 24.8% in Q4 2019.
- Gross margin from sales 24% in 2020 compared to 23.8% in 2019.
- Operating expenses related to COVID19 was 153 million in Q4 2020 and 394 million in 2020.
- Equity ISK 29,784 million and equity ratio 35.7% compared to 35.3% at the end of 2019.
- Net interest-bearing debt without lease liabilities ISK 29,986 million compared to ISK 28,011 million at the end of 2019.
| ISK million | Q4 2020 | Q4 2019 | Change | % Change | 2020 | 2019 | Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Income Statement | ||||||||
| Sale of goods and services | 23,222 | 21,279 | 1,943 | 9.1% | 86,260 | 84,991 | 1,268 | 1.5% |
| Margin from sales of goods and services | 5,288 | 5,273 | 15 | 0.3% | 20,684 | 20,196 | 488 | 2.4% |
| Other operating income | 708 | 428 | 280 | 65.5% | 1,658 | 1,851 | -193 | -10.4% |
| EBITDA | 1,746 | 1,766 | -20 | -1.1% | 7,057 | 7,605 | -549 | -7.2% |
| EBIT | 1,135 | 1,301 | -165 | -12.7% | 4,429 | 5,198 | -770 | -14.8% |
| EBT | 642 | 840 | -198 | -23.5% | 2,778 | 3,371 | -593 | -17.6% |
| Profit for the period | 526 | 715 | -189 | -26.4% | 2,266 | 2,796 | -529 | -18.9% |
| Statement of Financial Position | ||||||||
| Inventories | 7,668 | 7,678 | -10 | -0.1% | ||||
| Trade receivables | 4,924 | 3,756 | 1,167 | 31.1% | ||||
| Interest bearing liabilities without lease liabilities | 32,549 | 33,380 | -832 | -2.5% | ||||
| Cash and cash equivalents | 2,563 | 5,369 | -2,806 | -52.3% | ||||
| Net interest bearing liabilities without lease liabilities | 29,986 | 28,011 | 1,974 | 7.0% | ||||
| Statement of Cash Flows | ||||||||
| Cash flows from operating activities | 18 | 1,279 | -1,261 | -98.6% | 4,387 | 5,556 | -1,170 | -21.1% |
| Investing activities | -979 | -865 | -113 | 13.1% | -3,414 | 478 | -3,891 | -814.6% |
| Financing activities | -1,455 | -1,888 | 433 | -22.9% | -3,800 | -4,961 | 1,161 | -23.4% |
| Cash and cash equiv. at the end of the period | 2,563 | 5,369 | -2,806 | -52.3% | 2,563 | 5,369 | -2,806 | -52.3% |
| Key indicators | ||||||||
| Margin from sales | 22.8% | 24.8% | -2.0% | -8.1% | 24.0% | 23.8% | 0.2% | 0.9% |
| EBITDA/gross profit | 33.0% | 33.5% | -0.5% | -1.4% | 34.1% | 37.7% | -3.5% | -9.4% |
| Equity ratio | 35.7% | 35.3% | 0.4% | 1.2% | ||||
| Salaries/gross profit | 55.5% | 51.3% | 4.2% | 8.2% | 50.9% | 49.3% | 1.6% | 3.2% |
| Return on equity | 7.8% | 10.2% | -2.4% | -24.0% | ||||
| Investments | 1,258 | 761 | 497 | 65.2% | 3,842 | 2,258 | 1,585 | 70.2% |
| Inventory turnover | 8.8 | 8.6 | 0 | 2.3% | 8.6 | 8.6 | 0 | 0.0% |
24 February 2021 – Festi Q4 2020 Interim Report
FESTI
Operations in the fourth quarter
Our fourth quarter EBITDA results were good despite significant effects on the operation because of COVID-19 congregation ban had on the operations. EBITDA was in the amount of ISK 1,746 million which was 1,1% lower than same time last year. The COVID-19 outbreak had significant economic impact during the quarter, but the Group is balanced in exposure with its diversified business mix. Elko had strong results while N1 and Krónan operations were slightly below expectations. Overall results for Festi are 2% lower than the EBITDA guidance published 4th of November 2020.
Revenues
- Sales of goods and services were ISK 23,222 million in Q4 2020 compared to ISK 21,279 million in Q4 2019, up by 9.1%.
- Diversified business mix. Increase in grocery, convenience goods and electronic equipment.
- Significant growth in online stores.
- The classification of certain operating revenue and operating expenses for the year 2019 has been changed to harmonize their classification among the Group's entities.
| ISK million | Q4 2020 | Q4 2019 | Change | % Change | 2020 | 2019 | Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Sale of goods and services | ||||||||
| Grocery and convenience goods | 12,996 | 10,156 | 2,840 | 28.0% | 47,680 | 41,205 | 6,475 | 15.7% |
| Fuel and Electricity | 3,998 | 5,789 | -1,790 | -30.9% | 18,639 | 26,085 | -7,446 | -28.5% |
| Electronic Equipment | 4,091 | 3,291 | 800 | 24.3% | 12,941 | 10,911 | 2,030 | 18.6% |
| Other goods and services | 2,137 | 2,044 | 93 | 4.6% | 7,000 | 6,790 | 210 | 3.1% |
| Total Sale of goods and services | 23,222 | 21,279 | 1,943 | 9.1% | 86,260 | 84,991 | 1,268 | 1.5% |
| Total Other Operating income | 708 | 428 | 280 | 65.5% | 1,658 | 1,851 | -193 | -10.4% |
| Total Income | 23,929 | 21,707 | 2,222 | 10.2% | 87,918 | 86,842 | 1,076 | 1.2% |
Revenue from grocery and convenience goods are up by 28,0%, sale of electronic equipment, up by 24,3% between years. Revenue from fuel sales and electricity are down by 30,9% between years but sold quantity is down by 24%. Lower revenues from fuel sales are further explained by lower fuel prices on the world market, which decreased by an average of 35.2% between years. Revenues from other goods and services increased by 4,6%.
| ISK million | Q4 2020 | Q4 2019 | Change | % Change | 2020 | 2019 | Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Margin from sales of goods and services | ||||||||
| Grocery and convenience goods | 2,516 | 2,265 | 251 | 11.1% | 10,616 | 9,727 | 889 | 9.1% |
| Fuel and Electricity | 795 | 1,311 | -516 | -39.4% | 3,997 | 5,249 | -1,252 | -23.9% |
| Electronic Equipment | 943 | 845 | 99 | 11.7% | 3,141 | 2,561 | 580 | 22.7% |
| Other goods and services | 1,034 | 852 | 182 | 21.4% | 2,930 | 2,659 | 272 | 10.2% |
| Total margin from sales of goods and services | 5,288 | 5,273 | 15 | 0.3% | 20,684 | 20,196 | 488 | 2.4% |
Total margin from sales of goods and services in Q4 is ISK 5,288 million compared to ISK 5,273 million for the same quarter last year, an increase of 0.3%. Margin from grocery and convenience goods is ISK 2,516 million and up by 11.1%. Margin from electronic equipment sales is ISK 943 million and is up by 11.7% and margin from
FESTI
24 February 2021 – Festi Q4 2020 Interim Report
other goods is ISK 1,034 million and up by 21.4%. Margin from fuel and electricity is ISK 795 million and down by 39.4%.
The classification of certain operating revenue and operating expenses has been changed to harmonize their classification among the Group's entities. Comparative figures have been restated accordingly. The change did not have any impact on the performance of the Group, its assets, liabilities, equity or cash flows.
Operating expenses
- Operating expenses in Q4 2020 was ISK 4,249 million compared to ISK 3,934 million in Q4 2019
- COVID-19 added cost of ISK 152 million in Q4 2020.
| ISK million | Q4 2020 | Q4 2019 | Change | % Change | 2020 | 2019 | Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Operating expenses | ||||||||
| Salaries and other personnel expenses | 2,933 | 2,703 | 230 | 8.5% | 10,521 | 9,953 | 568 | 5.7% |
| Other operating expenses | ||||||||
| Operating costs of real estate | 369 | 301 | 68 | 22.4% | 1,530 | 1,538 | -7 | -0.5% |
| Maintenance expenses | 164 | 109 | 55 | 50.6% | 672 | 579 | 93 | 16.1% |
| Sales and marketing expenses | 441 | 425 | 16 | 3.7% | 991 | 994 | -3 | -0.4% |
| Office and administrative expenses | 123 | 75 | 48 | 64.0% | 477 | 460 | 17 | 3.7% |
| Communication expenses | 204 | 223 | -19 | -8.7% | 653 | 593 | 60 | 10.1% |
| Insurance and damage cost | 64 | 25 | 39 | 153.9% | 154 | 83 | 71 | 86.1% |
| Other expenses | -55 | 59 | -115 | -193.8% | 270 | 172 | 98 | 57.3% |
| Expenses due to acquisition of Hlekkur ehf. | 7 | 12 | -6 | -45.9% | 18 | 71 | -52 | -73.9% |
| Total Other operating expenses | 1,317 | 1,231 | 85 | 6.9% | 4,765 | 4,489 | 276 | 6.2% |
| Total Operating Expenses | 4,249 | 3,934 | 315 | 8.0% | 15,286 | 14,441 | 844 | 5.8% |
Salaries and other personnel expenses amount to ISK 2,933 million in Q4 2020 compared to ISK 2,703 million in Q4 2019 which is an increase of 8.5% over years. Full-time equivalents were 1,180, an increase of 92 between years, which is explained by the opening of two new Krónan stores and one new ELKO store in Akureyri. Added COVID-19 personnel expenses in the quarter is ISK 107 million. The table below illustrates the difference between years in millions ISK.
| Salaries and other personnel expenses Q4 2019 | 2,703 |
|---|---|
| Change in full-time position equivalents | 68 |
| Contractual wage increases | 64 |
| Accrued vacation, change | -16 |
| Covid-19 effects | 107 |
| Other | 7 |
| Salaries and other personnel expenses Q4 2020 | 2,933 |
Other operating expenses were ISK 1,317 million compared to ISK 1,231 million in Q4 2019, an increase of 6.9%. Included is COIVID-19 related cost of ISK 45 million.
24 February 2021 – Festi Q4 2020 Interim Report
FESTI
Financial items
- Net finance cost ISK 493 million in Q4 2020 compared to ISK 461 million in Q4 2019.
- Interest paid in 2020 ISK 1,340 million compared to ISK 1,864 million in 2019 which is 28% down YoY due to lower interest rates.
| ISK million | Q4 2020 | Q4 2019 | Change | % Change | 2020 | 2019 | Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Finance income | 24 | 94 | -70 | -74.1% | 102 | 173 | -71 | -41.1% |
| Finance expenses | -468 | -546 | -78 | -14.2% | -2,044 | -2,353 | -309 | -13.1% |
| Foreign currency difference | -80 | -51 | -29 | 56.9% | 23 | 27 | -4 | -14.6% |
| Share of profit from associates | 30 | 101 | -71 | -70.4% | 268 | 385 | -117 | -30.4% |
| Loss of shares in other companies | 0 | -60 | 60 | 0 | -60 | 60 | ||
| Total | -493 | -461 | -32 | 7.0% | -1,651 | -1,828 | 177 | -9.7% |
Statement of financial position
- Total assets amounted to ISK 83,365 million at end of Q4 2020.
- Equity ratio was 35.7%.
- Cash and cash equivalents amounted to ISK 2,563 million at end of 2020.
| ISK million | 31.12.2020 | 31.12.2019 | Change | % Change |
|---|---|---|---|---|
| Goodwill | 14,668 | 14,070 | 598 | 4.2% |
| Other intangible assets | 4,971 | 4,650 | 321 | 6.9% |
| Property and equipment | 32,297 | 31,434 | 864 | 2.7% |
| Leased assets | 5,420 | 3,862 | 1,557 | 40.3% |
| Investment properties | 7,467 | 7,354 | 113 | 1.5% |
| Inventories | 7,668 | 7,678 | -10 | -0.1% |
| Trade receivables | 4,924 | 3,756 | 1,167 | 31.1% |
| Cash and cash equivalents | 2,563 | 5,369 | -2,806 | -52.3% |
| Interest bearing liabilities without lease liabilities | 32,549 | 33,380 | -832 | -2.5% |
| Net interest bearing liabilities without lease liabilities | 29,986 | 28,011 | 1,974 | 7.0% |
| Net interest bearing liabilities | 35,596 | 31,975 | 3,621 | 11.3% |
| Equity ratio | 35.7% | 35.3% | 0% | 1.2% |
| Inventory turnover | 8.3 | 8.6 | -0.3 | -3.5% |
Goodwill is ISK 14,668 million and other intangible assets ISK 4,971 million at end of Q4 2020. Properties and equipment amounted to ISK 32,297 million and investment properties to ISK 7,467 million at end of Q4 2020. Trade receivables increase by ISK 1,167 million due to a new agreement on settlement of credit card claims.
Net interest-bearing liabilities without lease liabilities amount to ISK 29,986 million which is an increase of ISK 1,974 million from year-end 2019. Equity ratio was 35.7% at the end of Q4 2020 compared to 35.3% at year-end 2019. The cash position remains strong as well as the balance sheet.
24 February 2021 – Festi Q4 2020 Interim Report
FESTI
Cash flow and investments
- Net cash from operating activities ISK 18 million compared to ISK 1,279 million in Q4 2019.
- Cash used for investments was ISK 1.258 million.
| ISK million | Q4 2020 | Q4 2019 | Change | % Change | 2020 | 2019 | Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Cash flow | ||||||||
| Cash and cash equivalents, beginning of period | 4,991 | 6,839 | -1,848 | -27.0% | 5,369 | 4,267 | 1,102 | 25.8% |
| Net cash to operating activities | 18 | 1,279 | -1,261 | -98.6% | 4,387 | 5,556 | -1,170 | -21.1% |
| Net cash used in investing activities | -979 | -865 | -113 | 13.1% | -3,414 | 478 | -3,891 | -814.6% |
| Net cash used in financing activities | -1,455 | -1,888 | 433 | -22.9% | -3,800 | -4,961 | 1,161 | -23.4% |
| Effect of movements in exchange rates on cash | -12 | 4 | -17 | -378.9% | 21 | 29 | -8 | -26.3% |
| Cash and cash equivalents change | -2,428 | -1,470 | -958 | 65.1% | -2,806 | 1,102 | -3,908 | -354.7% |
| Cash and cash equivalents, end of period | 2,563 | 5,369 | -2,806 | -52.3% | 2,563 | 5,369 | -2,806 | -52.3% |
Net cash from operating activities was ISK 18 million in Q4 2020 compared to ISK 1.261 million in same quarter last year. Increase in trade receivables due to changes in the contract with the record keeper to reduce costs has a one-time negative impact on this component by over ISK 1,100 million. Investments amounted to ISK 1,258 million which is an increase of ISK 497 million between years. Krónan opened a new store in Austurver in Reykjavík and Norðurhella Hafnarfjörður, as well as a new ELKO store was opened in Akureyri in Q4 2020. Investment is expected to be considerably smaller in 2021. Net Cash and cash equivalents decreased by ISK 2.428 million in Q4 2020.
Future outlook and EBITDA guidance for 2021
EBITDA guidance for the year 2021 is in the range of ISK 7,500 – 7,900 million.
Following factors may affect the ongoing business:
- Uncertainties related to COVD19 and the ongoing congregation ban.
- Volatility in fuel prices and the ISK.
- Unemployment rates and drop in GDP.
- The Icelandic economy will be affected for some months/years.
The company has an equity ratio of 35.7% and a strong cash position. The business outlook is good, and the company is well equipped to handle the projects that lie ahead
Shareholders
- The Company’s market capitalization was ISK 57.4 billion at the end of Q4 2020.
- Buy-back program started 5th of October for up to 1.2% of own shares.
- Capex is expected to be 2,800 million in 2021 compared to 3,842 million in 2020.
- No. of shareholders were 880 at end of Q4 2020.
24 February 2021 – Festi Q4 2020 Interim Report
FESTI
Investor meeting - Presentation on Thursday the 25th of February 2021
A presentation will be held online on Thursday the 25th of February 2021 due to COVID restrictions. Eggert Kristófersson CEO of Festi will present the results and answer questions. Registration is here https://origo.zoom.us/webinar/register/WN_bexqqMsuQ2iimGAX_RURyw
The meeting will begin at 08:30 local time. The presentation and related material will be accessible on Festi website following the presentation, see https://festi.is/r/fjarhagsupplysingar as well as on the company news section on Nasdaq OMX Iceland hf. webpage.
Financial calendar
- Annual general meeting 2021: 22 March 2021
- Quarterly Financial statement for Q1 2021: 28 April 2021
- Quarterly Financial statement for Q2 2021: 28 July 2021
- Quarterly Financial statement for Q3 2021: 28 October 2021
- Annual Financial statement for the year 2021: 4 February 2022
- Annual general meeting 2021: 2 March 2022
For further information please contact Eggert Þór Kristófersson, CEO, ([email protected]) or Magnús Kr. Ingason, CFO, ([email protected]).