Festi hf.: Financial results for Q3 2025

Main results in Q3 2025

• Sales of goods and services amounted to ISK 47,093 million, an increase of 6.4% between years but 9.1% without effects of changes in USD and fuel global market price.
• Margin from sales of goods and services amounted to ISK 12,057 million, an increase of 11.3% from the previous year.
• Profit margin was 25.6%, up by 1.1 p.p. from Q3 2024.  Profit margin would be 25.0% without effects of changes in USD and fuel global market price, an increase of 0.5 p.p. from same quarter last year.
• EBITDA amounted to ISK 5,319 million, increasing by 12.2% between years.
• Profit for the quarter amounted to ISK 2,651 million, increasing by ISK 18.8% between years.
• Net Cash from operating activities amounted to ISK 6,664 million and increase by 43.5% between years.
• Repayment of interest-bearing debt amounted to ISK 2,807 million. Share buy-back amounted to ISK 649 million.
• Equity amounted to ISK 46,097 million, and the equity ratio was 39.2% at the end of Q3 2025.
• The company’s EBITDA guidance for the year 2025 is raised by ISK 400 million and is ISK 15,600 – 16,000 million.
• In mid-October, a 24% ownership stake in Malik Supply A/S in Denmark was sold for approx. ISK 1.1 billion. A sales profit of ISK 0.2 billion will be materialized in Q4 25 among financial items due to this.

Ásta S. Fjeldsted, CEO of Festi:

“Q3 is the most important quarter of the year in terms of total group activity, and operations performed well across all business units – in line with results for the first nine months. Overall, performance exceeded expectations, confirming the strength of our operations and the continued momentum of Festi’s subsidiaries in their respective markets.

Key operational highlights include:

• ELKOhas launched a new embedded finance solution under the name ELKO Snjallgreiðslur (ELKO Smart Payments), enabling customers to spread payments for their purchases in a simple, secure, and flexible way with favourable terms. Initially available online, it will soon be offered in physical stores.
• In November, ELKO will also launch a digital advisor on elko.is powered by generative AI, combining AI with product data to assist customers with product recommendations, comparisons, and usage guidance – a first-of-its-kind retail innovation in Iceland.
• Krónancontinues to strengthen its store network. In August, a new 2,400 m² flagship store opened on Fitjabraut in Reykjanesbær, receiving an excellent customer response. A new 1,500 m² store in Höfn in Hornafjörður is planned for next year – Krónan’s 27th location and 10th outside the capital area.
• Lyfja continues to leveraging digital solutions and technical solutions to enhance service and efficiency. The company’s first pharmacy robot is now operational at Lyfja Smáratorg, improving speed and cost-effectiveness. In addition, access to psychological services has been integrated into the Lyfja app – another step in broadening public access to healthcare services.
• N1 has introduced fast-charging for electric vehicles within the “Stöðin mín” feature of the N1 app, with highly positive customer feedback. EV users can now also report mileage directly through the app for transmission to the Icelandic Road and Transport Authority.
• A new refrigerated warehouse will open in Bakkinn in Q1 2026, bringing Krónan’s fresh produce operations in-house – currently outsourced – to improve internal efficiency and synergy within the group.
• In October, Festi sold its 24% stake in Danish company Malik Supply A/S for approximately ISK 1,100 million. A capital gain of around ISK 200 million will be recognised in Q4 2025.
• Festi has completed its share buyback programme launched on 30 June. A total of 2,500,000 shares were repurchased for ISK 754.5 million. Festi now holds 2,746,226 own shares, equating to 0.88% of total share capital.

Overall, summer performance was strong, with increased footfall across stores nationwide and continued substantial growth in digital sales. Recent months have seen focused reinvestment in key group units, including upgrades to N1 service stations and the rollout of self-service technology. Krónan’s new store at Fitjabraut is now operational, and additional Smart Store locations are being added. Construction of a new cold storage facility at Bakkinn is underway to enhance logistics capacity. Digital development remains a strategic priority across the group. New launches at ELKO include the AI-powered sales assistant and Smart Payments to improve the customer journey. Lyfja continues to expand healthcare access, now including mental health services via its app. The integration of Lyfja into the group is already yielding synergies, and these will be reviewed in more detail during Festi’s investor presentation on Friday, 31 October, where Karen Ósk Gylfadóttir, Managing Director of Lyfja, will present key developments in the company’s strategic roadmap.

Looking ahead, macroeconomic uncertainty is higher than we have seen for a long time. The impact of the recent Supreme Court’s ruling on interest rates is still unknown but could significantly affect households and businesses going forward. Key export industries face headwinds from reduced fishing quotas going into next year, increased levies, and rising carbon and product taxes. Additionally, uncertainty persists around the effects of Play’s airline bankruptcy, the closure of the silicon plant in Húsavík, and reduced operations at Norðurál aluminium plant. Examples have shown that increased taxation on special sectors often lead to reduced business operations. which is a concern if government is planning to increase tax on tourism which has been a key driver of GDP growth in recent years.

Despite these external challenges, the outlook for Festi remains strong. Our companies are pushing forward, and we continuously monitor the evolving landscape. The group’s financial position is strong, and our vision and goals remain clear. Our people are ambitious and continuously looking for ways to make our customers lives easier,  through smart technology, more sustainable products, and improved services at fair prices to increase their quality of life – every day,” says  Ásta S. Fjeldsted, CEO of Festi

Attachments

• Festi hf - Company announcement Q3 2025
• Festi hf - Consolidated Statements for 2025 Q3 - signed