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Festi Investor Presentation 2021
2195_rns_2021-07-29_b93cf0f4-067f-4c72-a792-d938b1c95202.pdf
Investor Presentation
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Presentation of Q2 2021 results
Eggert Þór Kristófersson, CEO
FESTI
CONSOLIDATED HIGHLIGHTS
| ISK 2,458 m
EBITDA Q2 2021 | 25.1%
Margin from sales | 3.52
NIBD/EBITDA |
| --- | --- | --- |
| ISK 3,134 m
Cash and cash equivalents | 40.3%
EBITDA/Margin from sales Q2 2021 | 49.4%
Salaries/Margin from sales Q2 2021 |
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FESTI
CONSOLIDATED OPERATIONS IN Q2
| Amounts are in ISK million | Q2 2021 | Q2 2020 | Change | % Chg. |
|---|---|---|---|---|
| Sale of goods and services | 24,326 | 20,589 | 3,738 | 18.2% |
| Margin from sale of goods and services | 6,106 | 5,224 | 882 | 16.9% |
| Lease revenue and operating income | 603 | 379 | 224 | 59.2% |
| Salaries and personnel expenses | -3,017 | -2,708 | -308 | 11.4% |
| Other operating expenses | -1,234 | -1,191 | -43 | 3.6% |
| EBITDA | 2,458 | 1,703 | 755 | 44.3% |
| Key Figures | ||||
| EBITDA/Margin from sales | 40.3% | 32.6% | 7.7% | 23.5% |
| Salaries/Margin from sales | 49.4% | 51.8% | -2.4% | -4.7% |
| Earnings per share | 4.12 | 1.60 | 2.52 | 157.5% |
- Sale of goods and services ISK 24,326 million, increase of 18.2% YoY.
- Margin from sales ISK 6,106 million, increase of 16.9% YoY.
- Number of full-time employees 1,195, increase of 7.6% YoY.
- COVID-19 related cost ISK 26 million in salaries and other operating expenses.
- EBITDA ISK 2,458 million in Q2 2021, increase of 44.3% YoY.
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FESTI
HIGHLIGHTS Q2
- Volatility in USD/ISK and EUR/ISK exchange rates
- USD/ISK decreased by 2.6% and the difference between highest and lowest exchange rate in Q2 is 6.2%
- EUR/ISK decreased by 2.0% and the difference between the highest and lowest exchange rate in Q2 is 3.8%
- The Q2 2021 average price of diesel fuel was 560.8 USD, compared to an average of 284.7 USD in Q2 2020, an increase of 97.0%.
- The Q2 2021 average price of gasoline was 668.5 USD, compared to an average of 281.2 USD in Q2 2020, an increase of 137.8%.
- The Q2 2021 average price of USD/ISK was 123.5 compared to 141.2 in Q2 2020, a decrease of 12.5%
Exchange rate development
Price development of Mogas 95 and Diesel
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FESTI
N1 HIGHLIGHTS Q2
N1
- Revenue was ISK 9,275 million, an increase of 28.2% YoY
- Removal of COVID-19 restrictions had positive effect on sales in Q2 2021
- Sales of fuel similar as year before. Sale of electricity immaterial in comparative amounts.
- Devaluation of fuel inventory in Q1 2020 of ISK 140 million affect positively comparative amounts.
- Gain from fuel hedges ISK 188 million between years.
- Sales of grocery and convenience goods increased by 25.5% YoY
- Sales of other goods increased by 9% YoY.
- EBITDA was ISK 957 million, increase of 27,8% YoY.
- Isey skyr bar is doing well. Four new outlets planned to open in second half of year.
| Amounts are in ISK million | Q2 2021 | Q2 2020 | Change | %Change |
|---|---|---|---|---|
| Total segment revenue | 9,275 | 7,236 | 2,039 | 28.2% |
| Total operating expenses of segments | -8,318 | -6,487 | -1,831 | 28.2% |
| Segment EBITDA | 957 | 749 | 208 | 27.8% |
| Segment depreciation and amortisation | -488 | -680 | 192 | -28.3% |
| Operating result of segments | 469 | 68 | 401 | 584.8% |
| Financial expenses | -237 | -246 | 8 | -3.4% |
| Income tax expense | -45 | 38 | -83 | -218.9% |
| Profit (Loss) | 187 | -139 | 326 | -234.2% |
| Segment assets | 30,235 | 29,424 | 811 | 2.8% |
| Segment capital expenditure | 373 | 288 | 85 | 29.4% |
| Segment liabilities | 16,698 | 16,286 | 412 | 2.5% |
FESTI
KRÓNAN HIGHLIGHTS Q2
KRONAN
- Revenue was ISK 11,951 m., increase of 11.5% YoY
- Three new stores contribute ISK 858 million to the increase. Increase in other stores is 5% YoY.
- Sales exceeded expectations
- Margins were in line with expectations
- EBITDA ISK 1.114 million, increase of 65.5% YoY
- Emphasis on customer experience with investments in online store and "scan and go" solutions.
- The sale of Kjarval store at Hella and Krónan store at Nóatún 17 completed in June. Capital gain of ISK 170 million realized in other revenues.
- Constructions for a new store in Akureyri started in May – planned to open in autumn 2022
| Amounts are in ISK million | Q2 2021 | Q2 2020 | Change | %Change |
|---|---|---|---|---|
| Total segment revenue | 11,951 | 10,719 | 1,232 | 11.5% |
| Total operating expenses of segments | -10,836 | -10,045 | -791 | 7.9% |
| Segment EBITDA | 1,114 | 673 | 441 | 65.5% |
| Segment depreciation and amortisation | -376 | -337 | -40 | 11.8% |
| Operating result of segments | 738 | 336 | 402 | 119.3% |
| Financial expenses | -110 | -116 | 6 | -5.4% |
| Income tax expense | -126 | -44 | -81 | 182.6% |
| Profit | 503 | 176 | 327 | 185.3% |
| Segment assets | 15,878 | 13,527 | 2,351 | 17.4% |
| Segment capital expenditure | 327 | 308 | 19 | 6.2% |
| Segment liabilities | 13,807 | 12,161 | 1,646 | 13.5% |
FESTI
ELKO HIGHLIGHTS Q2
ELKO
- Revenue was ISK 3.253 million, increase of 21.0% YoY.
- New store in Akureyri contributed ISK 285 million to the increase. Increase in other stores 12% YoY.
- ELKO online store continues increasing sales.
- ELKO store at international airport is starting to gain momentum.
- Emphasis on great service and product range.
- EBITDA was ISK 345 million, increase of 13.1% YoY.
| Amounts are in ISK million | Q2 2021 | Q2 2020 | Change | %Change |
|---|---|---|---|---|
| Total segment revenue | 3,523 | 2,911 | 611 | 21.0% |
| Total operating expenses of segments | -3,178 | -2,606 | -571 | 21.9% |
| Segment EBITDA | 345 | 305 | 40 | 13.1% |
| Segment depreciation and amortisation | -103 | -86 | -17 | 19.5% |
| Operating result of segments | 242 | 219 | 23 | 10.6% |
| Financial expenses | -21 | -4 | -17 | 422.8% |
| Income tax expense | -44 | -43 | -1 | 2.8% |
| Profit | 177 | 172 | 5 | 2.8% |
| Segment assets | 4,784 | 4,005 | 779 | 19.5% |
| Segment capital expenditure | 117 | 92 | 26 | 28.0% |
| Segment liabilities | 3,822 | 3,139 | 682 | 21.7% |
FESTI
CONSOLIDATED OPERATIONS IN 6M 2021
| Amounts are in ISK million | 6M 2021 | 6M 2020 | Change | % Chg. |
|---|---|---|---|---|
| Sale of goods and services | 45,244 | 39,419 | 5,824 | 14.8% |
| Margin from sales of goods and services | 11,249 | 9,527 | 1,722 | 18.1% |
| Lease revenue and operating income | 1,058 | 753 | 305 | 40.5% |
| Salaries and personnel expenses | -5,834 | -5,113 | -721 | 14.1% |
| Other operating expenses | -2,510 | -2,444 | -66 | 2.7% |
| EBITDA | 3,963 | 2,724 | 1,240 | 45.5% |
| Key Figures | ||||
| EBITDA/Sales margin | 35.2% | 28.6% | 6.6% | 23.2% |
| Salaries/Sales margin | 51.9% | 53.7% | -1.8% | -3.4% |
| Earnings per share | 4.12 | 1.76 | 2.36 | 134.1% |
- Sale of goods and services ISK 45,244 million, increase of 14.8% YoY.
- Margin from sales ISK 11,249 million, increase of 18.1% YoY.
- COVID-19 related cost ISK 61 million in salaries and other operating expenses.
- EBITDA ISK 3,963 million in 6M 2021, increase of 45% YoY.
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FESTI
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| Amounts are in ISK million | 30.6.2021 | 31.12.2020 | Change | % Chg. |
|---|---|---|---|---|
| Goodwill | 14,668 | 14,668 | 0 | 0.0% |
| Other Intangible assets | 4,910 | 4,971 | -61 | -1.2% |
| Property and equipment | 32,058 | 32,297 | -239 | -0.7% |
| Leased assets | 4,965 | 5,420 | -454 | -8.4% |
| Investment properties | 7,428 | 7,467 | -39 | -0.5% |
| Shares in associates | 2,047 | 2,150 | -103 | -4.8% |
| Shares in other companies | 13 | 13 | 0 | 1.4% |
| Long-term receivables | 260 | 272 | -12 | -4.4% |
| Non-current assets | 66,349 | 67,258 | -897 | -1.3% |
| Inventories | 9,001 | 7,668 | 1,333 | 17.4% |
| Trade receivables | 5,586 | 4,924 | 663 | 13.5% |
| Other short-term receivables | 967 | 952 | 15 | 1.6% |
| Cash and cash equivalents | 3,134 | 2,563 | 571 | 22.3% |
| Current assets | 18,689 | 16,107 | 2,582 | 16.0% |
| Total assets | 85,038 | 83,365 | 1,673 | 2,0% |
- Strong Balance Sheet
- Property and equipment and leased assets lower with sale of two of Kronan stores.
- Higher inventory because of higher global oil prices, increased activity and seasonal fluctuations in inventories.
- Trade receivables increase with higher oil prices and seasonality in the business
Current ratio
Inventory turnover
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| Amounts are in ISK million | 30.6.2021 | 31.12.2020 | Change | % Chg. |
|---|---|---|---|---|
| Equity | 29,906 | 29,784 | 122 | 0,4% |
| Payable to credit institutions | 28,839 | 29,075 | -236 | -0,8% |
| Lease liabilities | 4,753 | 5,181 | -427 | -8,3% |
| Deferred tax liabilities | 4,981 | 4,664 | 318 | 6,8% |
| Non-current liabilities | 38,573 | 38,919 | -346 | -0,9% |
| Payable to credit institutions | 3,502 | 3,474 | 28 | 0,8% |
| Lease liabilities | 431 | 430 | 1 | 0,2% |
| Trade payables | 7,255 | 7,019 | 236 | 3,4% |
| Other short-term liabilities | 5,371 | 3,739 | 1,632 | 43,7% |
| Current liabilities | 16,559 | 14,662 | 1,897 | 12,9% |
| Total equity and liabilities | 85,038 | 83,365 | 1,673 | 2,0% |
- Equity ratio of 35.2%
- Purchase of own shares ISK 402 million and dividend paid ISK 969 million in April.
- Other short-term liabilities increase with higher inventory and seasonality in the business.
- Current capital structure is in line with company strategy and well within the covenant agreements with credit institutions.
Equity ratio
Not interest bearing liabilities without lease liabilities
Not interest bearing liabilities without lease liabilities / EBITDA
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CONSOLIDATED STATEMENT OF CASH FLOWS Q2
| Amounts are in ISK million | Q2 2021 | Q2 2020 | Change | % Chg. |
|---|---|---|---|---|
| Cash at the beginning of the period | 2,463 | 5,023 | -2,560 | -51.0% |
| Cash flows from operating activities | 2,991 | 1,022 | 1,970 | 192.8% |
| Investing activities | -81 | -830 | 749 | -90.2% |
| Financing activities | -2,243 | -944 | -1,299 | 137.7% |
| FX difference on cash | 4 | 24 | -20 | -82.5% |
| Cash at the end of the period | 3,134 | 4,294 | -1,160 | -27.0% |
- Increase in cash from operating activities YoY ISK 1,970 million because of better results and positive effects from Q1 2021 where trade payables of ISK 850 million were paid due in Q2 2021 because of bank holidays.
- Investing activities amounted to 81 million in Q2 2021, a decrease of 749 million YoY
- Financing activities amounted to ISK 2.243 million in Q2 2021, an increase of 1.299 YoY.
- Increase in cash in Q2 2021 from Q1 2021 was ISK 671 million
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FESTI
CONSOLIDATED STATEMENT OF CASH FLOWS 6M
| Amounts are in ISK million | 6M 2021 | 6M 2020 | Change | % Chg. |
|---|---|---|---|---|
| Cash at the beginning of the period | 2,563 | 5,369 | -2,806 | -52.3% |
| Cash flows from operating activities | 3,382 | 1,915 | 1,467 | 76.6% |
| Investing activities | -468 | -1,437 | 969 | -67.4% |
| Financing activities | -2,360 | -1,589 | -771 | 48.5% |
| FX difference on cash | 17 | 36 | -19 | -52.4% |
| Cash at the end of the period | 3,134 | 4,294 | -1,160 | -27.0% |
- Increase in cash from operating activities YoY, ISK 1,467 million because better results and increase in short-term liabilities.
- Investment activities amounted to ISK 468 million in 6M 2021, a decrease of ISK 969 million YoY
- Financing activities amounted to ISK 2.360 million in 6M 2021, an increase of ISK 771 million YoY.
- Increase in cash in 6M 2021 was ISK 571 million
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FESTI
OPERATING SEGMENTS OF THE GROUP – Q2 2021
| Amounts are in ISK million | N1 | Krónan | Elko | Other | Total |
|---|---|---|---|---|---|
| Total segment revenue | 9,275 | 11,951 | 3,523 | 1,744 | 26,492 |
| Total operating expenses of segments | -8,318 | -10,836 | -3,178 | -825 | -23,157 |
| Segment EBITDA | 957 | 1,114 | 345 | 919 | 3,335 |
| Segment depreciation and amortisation | -488 | -376 | -103 | -362 | -1,330 |
| Fair value changes of investment properties | 0 | 0 | 0 | 23 | 23 |
| Operating result of segments | 469 | 738 | 242 | 579 | 2,028 |
| Financial expenses | -237 | -110 | -21 | -623 | -990 |
| Share of profit from associates | 0 | 0 | 0 | 81 | 81 |
| Income tax expense | -45 | -126 | -44 | 35 | -180 |
| Profit | 187 | 503 | 177 | 72 | 938 |
| Segment assets | 30,235 | 15,878 | 4,784 | 34,141 | 85,038 |
| Segment capital expenditure | 373 | 327 | 117 | 171 | 989 |
| Segment liabilities | 16,698 | 13,807 | 3,822 | 20,805 | 55,132 |
Segment EBITDA
Segment Assets
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OPERATING SEGMENTS OF THE GROUP – 6M 2021
| Amounts are in ISK million | N1 | Króan | ELKO | Other | Total |
|---|---|---|---|---|---|
| Total segment revenue | 6,688 | 11,246 | 3,254 | 1,753 | 22,942 |
| Total operating expenses of segments | -6,256 | -10,369 | -2,948 | -998 | -20,571 |
| Segment EBITDA | 432 | 878 | 307 | 754 | 2,371 |
| Segment depreciation and amortisation | -488 | -386 | -106 | -357 | -1,336 |
| Fair value changes of investment properties | 0 | 0 | 0 | -64 | -64 |
| Operating result of segments | -55 | 491 | 201 | 334 | 971 |
| Financial expenses | -206 | -105 | -24 | -465 | -800 |
| Share of profit from associates | 0 | 0 | 0 | 45 | 45 |
| Income tax expense | 51 | -77 | -35 | 26 | -36 |
| Profit | -211 | 309 | 142 | -60 | 180 |
| Segment assets | 28,928 | 15,673 | 4,715 | 34,595 | 83,911 |
| Segment capital expenditure | 148 | 168 | 56 | 78 | 451 |
| Segment liabilities | 15,576 | 13,432 | 3,343 | 22,333 | 54,683 |
Segment EBITDA
Segment Assets
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FESTI
REAL ESTATE OPERATIONS OF THE GROUP
| Properties, key figures | Q2 2021 | Q2 2020 |
|---|---|---|
| NOI* | ISK 845 m | ISK 829 m |
| NOI ratio | 86% | 84% |
| Utization ratio | 97% | 97% |
| LTV** | 62% | 61% |
| Number of Festi's properties | 92 | 89 |
| Total square meters | 105 thousand m² | 101 thousand m² |
| Own use | 85% | 84% |
| Leased to third parties | 15% | 16% |
- Net operating income
** Loan-to-value ratio
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FESTI
SHARE PRICE DEVELOPMENT
| Shareholders (10 largest) | % |
|---|---|
| Lífeyrissjóður verslunarmanna | 11.5 |
| Lífeyrissj.starfsm.rík. A-deild | 9.9 |
| Gildi - lífeyrissjóður | 7.8 |
| Birta lífeyrissjóður | 5.8 |
| Stapi lífeyrissjóður | 5.5 |
| Almenni lífeyrissjóðurinn | 4.9 |
| Brú Lífeyrissjóður starfs sveit | 4.5 |
| Frjálsi lífeyrissjóðurinn | 3.5 |
| Arion banki hf. | 3.4 |
| Söfnunarsjóður lífeyrisrétinda | 2.9 |
| Market information | |
| --- | --- |
| Issued shares | 322 m. |
| Market cap at the end of dec 2020 | ISK 65.024 M |
| Market cap at the end of dec 2019 | ISK 42.681 M |
| Number of shareholders | 935 |
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FESTI
Agreements with the City of Reykjavík
Agreements with the City of Reykjavík on petrol station reductions
- Agreements between the city of Reykjavík and Festi were signed on Friday 25th of June 2021
- N1 currently operates 11 fuel stations in Reykjavík with 43 pumps and 82 nozzles
- The agreement assumes a reduction of fuel nozzles of 29 – 37%
- The City of Reykjavík refrains from charging infrastructure and building right fees on sites that will be developed.
- Road construction fees have to be paid for square meters in addition to what is already constructed.
- City of Reykjavík claims 20% for rental properties and 5% for Félagsbústaði (social housing)
FESTI
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Ideas presented to the city of Reykjavík in 2018
Festi's ideas on reducing the number of gas stations and plot activity reinvention
| Phase | Location | Proposal |
|---|---|---|
| 1 | N1 | |
| Ægisíða 102 | Ægisíða 102 converted into a residential area and pumps relocated to Fiskislóð (multi-energy station). | |
| KRØNAN | ||
| Rofabær 39 | Krónan store built on Elliðabraut 2 and Rofabær 39 closed down. (Residential area instead). | |
| N1 | ||
| Stóragerði 40 | Stóragerði 40 converted to a residential area and fuel station discontinued. | |
| 2 | N1 | |
| Skógarsel 10 | Preparations of local planning proposals for a residential area begins within 3 years. | |
| 3 | N1 | |
| Borgartún 39 | New plot lease agreement issued for Borgartún and Kringlumýrarbraut until 2040. | |
| Promise that fossil fuel sales will be discontinued no later than 2029 if energy exchange is successful. | ||
| N1 | ||
| Kringlumýrarbraut 100 | Commercial and restaurant operations in existing structures, or a permission to demolish current structures and create new commercial buildings built on more than one floor |
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FESTI
Fiskislóð 15 - 21
- The City of Reykjavík authorizes a self-service station with two fuel pumps for four cars simultaneously on the site, which is owned by Festi fasteignir hf. Pumps may be operated when operations are ceased on Ægisíða 102.
N1
FESTI
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Ægisíða 102
- Festi hf. will cease operations of a gas station on the site no later than 1 January 2023, but no later than 12 months from the City Council's approval of a new zoning plan for Ægisíða 102 and Fiskislóð 15-21.
- Zoning plans are expected to be completed at the end of September and the station shut down before then end of next year.
- Estimated construction volume between 13,000 - 15,000 sqm2
FESTI
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Elliðabraut 2
Ásýnd m v það sem áformað er að reisa fyet matváru
- The plot is currently allocated for N1 gas station.
- Plans assumed for Krónan store in the first floor and two N1 gas pumps.
- Zoning plan expected to be completed by the end of January 2022
- Construction volume between 4,000 and 5,000 sqm2
KRÓNAN
[N1]
FESTI
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Rofabær 39
- This plot is currently in use for Krónan store
- Up to 4,130 sqm² of 2 - 4 storey residential housing will be constructed there.
FESTI
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Stóragerői 40
- Currently this plot is a N1 gas and service station
- Up to 2,860 sqm2 of 3 - 4 storey residential housing will be constructed there.
FESTI
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Furthermore
Borgartún 39
- Site lease agreement will be extended until the year 2040. The site owner obliges not to increase the number of fuel pumps or increase their capacity without a special agreement with the City of Reykjavík.
Kringlumýrarbraut 100
- The site owner obliges not to increase the number of fuel pumps or increase their capacity without a special agreement with the City of Reykjavík. The site lease agreement shall remain unchanged.
Bíldshöfði 2
- The City of Reykjavík will push for a change in layout of the site so that the site will be expanded to the west so that the size of Oil change and tire service workshops can be increased. The utilization ratio will be increased to 0.5.
Skógarsel 10
- Festi hf. will cease operations of the gas station no later than January 1, 2025, but no later than 12 months from approval by the city council on the new zoning of the plot.
FESTI
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Furthermore
Straumur 9/Ártúnshöfði
- The City of Reykjavík will push for a change in layout of the site so that the site will be expanded to the east and the utilization ratio increased to 0.5. If there is an expansion, Festi hf. pays the market price of plot expansion.
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Timeframe
FESTI
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POSITION AND OUTLOOK
POSITION AND OUTLOOK FOR 2021
Financial forecast
- In light of Q2 2021 better results, EBITDA forecast for the year 2021 is increased by ISK 900 million with an announcement to Nasdaq OMX on July 15th and is now to ISK 8,800 – ISK 9,200 million excluding estimated capital gain of ISK 460 million with the sale of property to Reitir. All conditions of the sale are expected to be fulfilled in Q3 2021.
Assumptions:
- Tourism expected to gradually increase.
- Large fluctuations in ISK exchange rate and global oil markets turmoil can lead to changes in margins and sales
- Decrease in ISK exchange rate has had a negative effect on margins
- Ongoing uncertainty due to future COVID-19 effects
Highlights:
- Agreement signed with the City of Reykjavík regarding reduction of petrol stations.
- Sale of 4 properties to Reitir at end of quarter.
- Ongoing focus on decrease in operating expenses.
Investments and transactions with shareholders:
- Investments in Q2 2021 were ISK 538 million.
- Investments are expected ISK 3,000 million in 2021 an increase of ISK 200 million.
- Purchase of own shares for ISK 402 million during the quarter.
- Dividend paid ISK 969 million during the quarter
FESTI
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DISCLAIMER
- All information in this presentation is based on sources which Festi hf. considers reliable at the time of publication, but it cannot be guaranteed that the information is infallible.
- All information in this presentation is owned by Festi hf. It is not permitted to copy, change or distribute in any way information from this presentation, in part or in its entirety.
- This presentation is only intended for information purposes and is not part of, or a basis for, any decisions made by the recipient. Recipients should not interpret information in this presentation as a promise or as instructions. Festi hf. is not obliged to provide recipients of this presentation with further information about the company or to make changes or corrections to the presentation if information upon which it is based changes.
- The company's future outlook is dependent on a number of risks and uncertainties which may have the effect that the actual result in the future is considerably different to the scenario described in this presentation. This includes factors such as exchange rates, the global price of fuel, the availability of funding, new legislation coming into effect and the impact of regulators, etc.
- Festi hf. wishes to point out that recipients of the presentation should not rely on statements contained within in the future since they are only applicable on the date of publication of the presentation. All statements concerning the company's future prospects are entirely valid with respect to this proviso.
- By receiving this presentation the recipient agrees that they are bound by the above provisos and limitations.
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FESTI