Festi: Consolidated Annual report 2022

Festi hf.
Festi hf.

EBITDA ISK 2,293 million in Q4 and ISK 10,020 million for 12M 2022

Key results

  • Sale of goods amounted to ISK 31,744 million, compared to ISK 26,428 million in the previous year, and increased by 20.1% between years.

  • Gross profit from sale of goods and services amounted to ISK 6,871 million. Gross profit ratio was 21.6% and decreases by 3.1 b.p., mostly due to the increase in prices of raw materials in the global market between years.

  • Additional costs due to a new collective wage agreement in the labour market from the last 1 November amounted to ISK 200 million in the quarter.

  • EBITDA amounted to ISK 2,293 million compared to ISK 2,809 million in Q4 2021, which equals to an 18.4% decrease between years but the decrease is 9.5% if the gain on sale of property of ISK 276 million which was in Q4 2021 is taken into account.

  • Icelandic Food Company ehf., a 45% shareholding acquired, will become a 100% owned subsidiary from 1 January 2023.

  • Equity at year-end 2022 amounted to ISK 34,460 million and equity ratio 36.9%, compared to 39.4% at year-end 2021.

  • In 2022, N1, ELKO and Krónan deliver their best EBITDA results ever, if the gain on sale of property of Krónan in 2021 is not included.

  • EBITDA for the year 2022 amounted to ISK 10,020 million, which is in line with the Company's median earnings forecast if the additional costs of the new collective wage agreement from the last 1 November  are taken into account, which was not included in the plans.



Magnús Kr. Ingason, Chief Financial Officer and Deputy CEO of Festi:

Operations in 2022

The year 2022 was marked by a sharp increase in world market prices for raw materials, which led to increased turnover and decrease in margin level, especially in the fuel part of the operations. Increased inflation and a sharp increase in policy interest rates also created challenges in the operations, but despite this, all of the Group's businesses, through targeted actions, succeeded to deliver one of their best operating results ever.

The war in Ukraine that began in February 2022 had a major impact on the world market prices for raw materials, which rose sharply. Inflation and the sharp rise in energy prices on the continent, the rise in transportation costs and other key factors in the supply chain had a direct impact on the increased purchase price of goods. We at Festi and operating companies are aware of our responsibility towards customers and the society as a whole. We have endeavoured to make every effort to increase efficiency in procurement and operations to counter the aforementioned price increases so that they do not directly translate into product prices. These include measures such as temporary price freezing of certain products, increased product availability of cheaper alternatives, increased efficiency in processes through new digital solutions, as well as active dialogue with the company's suppliers to find ways to reduce costs.

Changes to key management personnel in 2022

Ásta Sigríður Fjeldsted was appointed CEO of Festi in September and succeeded Eggert Þór Kristófersson, who ended employment in July the same year. Magnús Kr. Ingason, CFO of Festi, served as interim CEO until Ásta was hired and again as deputy CEO from the time she went on maternity leave in the beginning of November. Guðrún Aðalsteinsdóttir took over as managing director of Krona from Ásta S. Fjeldsted in September and Óttar Örn Sigurbergsson took over as managing director of ELKO on 1 January from Gestur Hjaltason.

There were numerous progress projects in 2022

  • New operating units, locations and improved services: Elegant new stores of ELKO and Krónan opened in Skeifan during the year, and Krónan opened a new store in Borgartún and Akureyri. Everywhere there was expansion and better service. N1 also opened a new service center in Mývatn and a brand new car service workshop in Klettagarðar. N1 took over the operations of Djúsí restaurants and increased the number of places where Djúsí is available along with Ísey Skyr bars. N1 electricity is also in full swing and has, among other things, entered into a milestone agreement with the City of Reykjavík for the purchase of all public electricity in the city starting from the turn of the years 22/23. N1 EV charging stations can now be found all over the country or a total of 11 locations and will be increased in the coming months.

  • Digital customer service: The operating companies have all started implementing new digital solutions to improve customer service experience. The N1 service app went live during the year, where it is possible to book a tire replacement, charge the electric car, view business history etc. but the company's online business has doubled during the year. Krónan completed the implementation of the self-service solution Skannað og skundað (e. Click and collect) in all its stores during the year and has doubled turnover through Krónan Smart Store (online store). ELKO implemented smart chat in its online store during the year, a revolutionary service where customers receive sales advice from an employee over the phone just as if they were in ELKO's store.

  • New developments and improvements in human resources: As part of the company's emphasis on efficiency and good communication with and between employees, Relesys' employee-communication app has been implemented across all companies. The goal is to further strengthen internal communication and dissemination of information, increase training and offer e-learning courses in collaboration with Akademias as well as facilitate employee access to the companies' human resources team. Public health policies and actions for employees were strengthened and further developed.

  • Social Responsibility: Festi and operating companies set clear goals when it comes to supporting social issues. To mention a few projects undertaken during the year: financial support to UNICEF for refugee children in Ukraine, support for Women's European Championship 2022, ELKO's circular project "Get something for nothing" where you can bring old devices, have ELKO assessed and received credit at ELKO, along with grants for sports clubs, charities and other community infrastructures. Increased emphasis on combating food waste is also part of the social responsibility of Festi and the management companies.

  • Awards and recognitions: ELKO received for the first time this year the FKA Balance Scale for contributions to gender equality, as well as VR's recognition as a model company. Krónan was awarded the Icelandic Web Award for Skannað og skundað (e. Click and collect), FKA's Balance Scale, the Gender Equality Incentive Award and The Icelandic Satisfaction Scale for the 6th time. N1 electricity was recognized as an outstanding company for the second year in a row. The CEO of Festi was recognized by the FKA for a job well done for the benefit of women's business or those who have been a special encouragement and role model for women in the business community.

Steady growth and increased benefits despite market challenges

“Many exciting projects await Festi in the coming months, including the expansion of the Krónan store in Grandi and the development of a new Krónan store in Grafarholt. Renovation of the ELKO store in Lindir and the introduction of new self-service lockers outside ELKO's stores. Furthermore, the development of a new workshop at Flugvellir, Keflavik, the increase in the number of EV charging stations as well as further additions to the N1 service app. The development and expansion of outlets for ready-made dishes such as Djúsí and Ísey skyrbar at N1 as well as WokOn, sushi and other places that make ready-made meals within the Krónan will continue.

The conclusion of the City History Museum regarding the possible conservation of buildings on fuel plots is still pending in order to get ahead with subdivision work relating to the land at Skógarhlíð, Stóragerði and Ægisíða.

There are great opportunities in the companies' operations in the coming years by focusing as before on favourable prices, quality and a good customer experience. The locations of our service stations will continue to attract a large group of tourists, domestic and foreign, and forecasts of their increase further strengthen the outlook for the upcoming operating year. Great emphasis will continue to be placed on efficiency and optimisation of operations in the coming operating year as well as increased cooperation within the Group, efficient procurement and new ways of reducing unit costs for the Group as a whole.

Festi has a strong financial position and the company is well positioned to adress the challenges ahead, ” says Magnús Kr. Ingason, Chief Financial Officer and Deputy CEO of Festi.

Web streaming for market participants, Thursday, 9 February 2023

A webstream for market participants will take place on Thursday, 9 February, where Magnús Kr. Ingason, CFO of Festi and Deputy CEO, will present the Group's results and answer questions in Icelandic. The meeting starts at 08:30.

Registration for the meeting takes place here:

Participants who follow electronically can ask questions during a meeting via a forum that appears below the web feed. Questions will be answered after the presentation.

Promotional material for the meeting will be available after that on Festi’s website: