Investor Presentation
May 19, 2020
Consolidated Highlights
- Comprehensive income for the year is ISK 3.054 m, or 2,6% of sales
- Earnings per share is ISK 2,54
- Sales for the year is ISK 116.357 m
- Gross profit for the year is 22,2%
- EBITDA for the year is ISK 8.890 m
- Total assets are ISK 62.708 m at year end
- Cash and cash equivalents are ISK 2.232 m at year end
- Equity is ISK 24.587 m at year end
- Equity ratio is 39,2% at year end
- EBITDA for the year is consistent with EBITDA budget, ISK 8.750 - 9.200 m
Statement of Comprehensive Income
Q4 2019/20 | Q4 2018/19 | 2019/20 | 2018/19 | |
01.12-29.02 | 01.12-28.02 | 01.03-29.02 | 01.03-28.02 | |
Sales | 28.613 | 27.924 | 116.357 | 84.179 |
Cost of goods sold | (22.179) | (21.469) | (90.551) | (64.172) |
Gross profit | 6.434 | 6.455 | 25.806 | 20.007 |
Gross profit % | 22,5% | 23,1% | 22,2% | 23,8% |
Other operating income | 99 | 179 | 484 | 340 |
Salaries and related expenses | (3.073) | (3.082) | (12.087) | (9.194) |
Other operating expenses | (1.306) | (2.172) | (5.313) | (6.663) |
Profit from operating activities before | ||||
depreciation and amortisation (EBITDA) | 2.154 | 1.380 | 8.890 | 4.490 |
EBITDA % | 7,5% | 4,9% | 7,6% | 5,3% |
Depreciation and amortisation | (1.045) | (530) | (3.927) | (1.300) |
Profit from operating activities (EBIT) | 1.109 | 850 | 4.963 | 3.190 |
Net finance expense | (272) | (175) | (1.327) | (295) |
Effect of results of associates | 28 | (12) | 139 | (12) |
Profit before income tax | 865 | 663 | 3.775 | 2.883 |
Income tax | (160) | (110) | (721) | (566) |
Comprehensive income for the period | 705 | 553 | 3.054 | 2.317 |
Operating Segments
Retail chains | Elimination | Application of | |||
2019/20 | and warehouses | Olís | entries | IFRS 16 | Total |
Sales | 80.393 | 36.847 | (883) | -- | 116.357 |
Other operating income | 442 | 67 | (25) | -- | 484 |
Total segment revenue | 80.835 | 36.914 | (908) | -- | 116.841 |
Total segment operating expenses | |||||
(76.015) | (35.082) | 908 | 2.238 | (107.951) | |
Segment EBITDA | 4.820 | 1.832 | -- | 2.238 | 8.890 |
Depreciation and amortisation | |||||
(1.411) | (796) | -- | (1.720) | (3.927) | |
Effect of reults of associates | -- | 139 | -- | -- | 139 |
Profit from operating activities (EBIT) | 3.409 | 1.175 | -- | 518 | 5.102 |
Net finance expense | |||||
(513) | (250) | -- | (564) | (1.327) | |
Income tax | (721) |
Profit for the period | 3.054 |
EBITDA BRIDGE
- ISK million -
2.238
1.635
527
8.890
4.490
EBITDA 2018/19 | Effect of retail chains and | Effect of Olís | IFRS 16 Impact | EBITDA 2019/20 |
warehouses |
Sales and EBITDA
- ISK million -
Sales | EBITDA | EBITDA% | |||
140.000 | 9,0% | ||||
120.000 | 116.357 | 8,0% | |||
7,5% | 7,6% | ||||
7,2% | 7,0% | ||||
100.000 | |||||
5,6% | 84.179 | 6,0% | |||
78.366 | 80.521 | ||||
73.895 | 5,3% | ||||
80.000 | |||||
5,0% | |||||
60.000 | 4,0% | ||||
3,0% | |||||
40.000 | |||||
2,0% | |||||
20.000 | 1,0% | ||||
5.659 | 6.024 | 4.139 | 4.490 | 8.890 | |
0 | 0,0% | ||||
2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 |
Gross Profit %
25,0% | 24,6% | 24,8% | 24,8% | 23,5% | 24,1% | 24,3% | 24,0% | 24,4% | 24,8% | 24,8% | 23,8% |
22,2%
20,0%
15,0%
10,0%
5,0%
0,0%
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Cost ratios
Salaries & other operating expenses
12,0% | |||||||||
11,0% | 10,9% | ||||||||
10,3% | 10,4% | ||||||||
10,0% | 9,6% 9,4% | 9,3% | 9,3% | 9,7% | |||||
9,1% | |||||||||
9,2% | 9,0% | 8,7% | 8,7% | 8,7% | |||||
8,5%8,2% | 8,6% | ||||||||
8,4% | 8,2% | 8,3% | 7,9% | ||||||
8,0% | 7,9% | ||||||||
6,0%
4,6%
4,0%
2,0%
0,0%
2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 |
Salaries | Other operating expenses |
Number of stores
Specialty stores and pharmacies | 5 |
ÓB stations | 42 |
Olís stations | 28 |
Grocery stores | 40 |
0 | 5 | 10 | 15 | 20 | 25 | 30 | 35 | 40 | 45 |
Balance Sheet
Balance Sheet
29.02.2020 | 28.02.2019 | |
Assets | ||
Non-current assets | 47.554 | 34.896 |
Current assets | 15.154 | 15.955 |
Total assets | 62.708 | 50.851 |
Equity and liabilities | ||
Share capital | 1.189 | 1.213 |
Other equity | 23.397 | 23.066 |
Capital and reserves attributable to owners of Hagar hf. | 24.586 | 24.279 |
Non-controlling interest | 1 | -- |
Total equity | 24.587 | 24.279 |
Non-current liabilities | 22.362 | 6.877 |
Current borrowings | 442 | 7.631 |
Bank borrowings | 1.273 | 800 |
Other payables | 14.045 | 11.264 |
Total liabilities | 38.122 | 26.572 |
Total equity and liabilities | 62.708 | 50.851 |
Cash Flows
Q4 2019/20 | Q4 2018/19 | 2019/20 | 2018/19 | |
01.12-29.02 | 01.12-28.02 | 01.03-29.02 | 01.03-28.02 | |
Net cash provided by operating activities | 1.153 | 1.206 | 9.828 | 2.882 |
Net cash used in investing activities | (2.657) | (465) | (5.221) | (6.249) |
Net cash (used in) from financing activities | 371 | (778) | (3.111) | 3.881 |
Net increase (decrease) in cash and cash | ||||
equivalents | (1.133) | (37) | 1.496 | 514 |
Cash and cash equivalents at beginning of the | ||||
period | 3.365 | 773 | 736 | 222 |
Cash and cash equivalents at the end of period | 2.232 | 736 | 2.232 | 736 |
Cash Flows 2019/20
- ISK million -
-5.221
9.828
-3.111
2.232 | |||||
736 | |||||
Cash at the beginning of | Net cash from | Net cash used in | Net cash from financing Cash at the end of the | ||
the year | operating activities | investing activities | activities | year |
Changes in Equity
Non | ||||||||
Share | Legal | Restricted | Retained | controlling | ||||
Share capital | premium | reserve | reserve | earnings | Total | interests | Total equity | |
Equity at March 1, 2019 | 1.213 | 5.023 | 303 | 5.092 | 12.648 | 24.279 | -- | 24.279 |
IFRS 16, effects of | ||||||||
implementation | (559) | (559) | (559) | |||||
Purchased own share | (24) | (1.006) | (1.030) | (1.030) | ||||
Comprehensive income for the | ||||||||
period | 3.054 | 3.054 | -- | 3.054 | ||||
Transferred from legal reserve | (6) | 6 | -- | -- | ||||
Non-controlling interests on | ||||||||
acquisition of subsidiary | -- | 1 | 1 | |||||
Dividends paid, 0,955 ISK per | ||||||||
share | (1.159) | (1.159) | (1.159) | |||||
Transferred to restricted | ||||||||
reserve | 855 | (855) | -- | -- | ||||
Equity at February 29, 2020 | 1.189 | 4.017 | 297 | 5.947 | 13.136 | 24.586 | 1 | 24.587 |
Equity
- ISK million -
Equity | Equity ratio |
30.000 | 70,0% | |||||
61,1% | ||||||
25.000 | 57,8% | 60,0% | ||||
24.587 | ||||||
55,1% | 24.279 | 50,0% | ||||
47,7% | ||||||
20.000 | ||||||
39,2% | 40,0% | |||||
17.412 | 17.957 | |||||
15.000 | 16.368 | |||||
30,0% | ||||||
10.000 | ||||||
20,0% | ||||||
5.000 | 10,0% | |||||
0 | 0,0% | |||||
2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 |
Refinancing
Bond Issue
- Successful bond issue that ensured the company's refinancing
- Excess demand for Hagar's bonds
- Two bond series were issued, indexed and non-indexed.
- ISK 8.000 m in total
- ISK 5.500 m indexed with fixed nominal rate of 2,8%
- ISK 2.500 m non-indexed with fixed nominal rate of 4,65%
- Credit line agreements signed to the amount of ISK 6.000 m
- Approx. ISK 4.500 m and USD 12,5 m (ISK 1.600 m) at year end
Loans and Borrowings at Year End
Non-current | |||
Amounts are in ISK million | liabilities | Current liabilities | Total |
CPI-linked bond issue | 5.270 | 183 | 5.453 |
Non-indexed bond issue | 2.500 | - | 2.500 |
Non-indexednon-current loans | 4.412 | 259 | 4.671 |
Credit line - USD | - | 1.273 | 1.273 |
Total loans and borrowings | 12.182 | 1.715 | 13.897 |
Unused credit lines | |||
Credit line - ISK | - | 4.500 | 4.500 |
Credit line - USD | - | 309 | 309 |
Total unused credit lines | 0 | 4.809 | 4.809 |
Total loans and credit lines | 12.182 | 6.524 | 18.706 |
Borrowings
- ISK million -
Net interest bearing debt | x EBITDA | ||||
14.000 | 3,0 | ||||
2,7 | |||||
12.000 | 2,5 | ||||
12.289 | 11.665 | ||||
10.000 | |||||
2,0 | |||||
8.000 | |||||
1,5 | |||||
6.000 | |||||
1,3 | |||||
1,0 | |||||
4.000 | |||||
0,7 | |||||
2.000 | 2.766 | 0,5 | |||
0,2 | |||||
0,1 | |||||
0 | 701 | 1.279 | 0,0 | ||
2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 |
Key projects of the year
Merger of Hagar and Olís
- The biggest integration projects are associated with organisational changes and housing
- Warehouse operations were the biggest single project
- Purchases for products and services
- Moving and coordination of Olís and Hagkaup offices
- Early savings for housing will be ISK 140-150 m on a early basis
- Integration goals achieved
New Warehouse
- Warehouse for refrigerated and frozen goods in Korngarðar - 4.440 m2
- Will be put into operation in November 2020
- Increased efficiency in warehouse operations and distribution
- Lease payments decrease by approx. ISK 50 m on a early basis, with effect from next operating year
Warehouse operations have been simplified. Aðföng has taken over warehouse operations for Olís, as well as operations for Hýsing and Ferskar kjötvörur.
Bónus leads the convenience market
- About a year ago, three Bónus stores were sold in accordance with an agreement with the Icelandic Competition Authority.
- Since then, Bónus has opened two new stores
- Increase in sales in Bónus is 12% from January 2020 to March 2020, in spite of fewer stores
- Increase in customers
- The cheapest option for consumers
- The same price all around Iceland
- Received Terra's environmental award in 2020
New Olís station opened in Varmahlíð and service center renewed New ÓB station opened in Vík í Mýrdal in September 2019
New ÓB station opened at Sjafnargata in Akureyri in February 2020
Deployment of self-service solutions
has been extremely successful
- Deployment finished in 14 Bónus stores and 7 Hagkaup stores, total of 21 stores
- Deployment planned in 7 Bónus stores and 1 Hagkaup store during this operating year
- Increased performance during peak hours
- Increased operational efficiency
- Less lines and instant service
- Pleased customers
- High ratio of handlings goes through self- service machines
- Different between stores and ranges from 35-60%
New real estates owned by Hagar
- Eiðistorg in Seltjarnarnes where Hagkaup is located, total 4.211 m2 (Q4 2019-2020)
- Bjarkarholt in Mosfellsbær. Bónus store that is total 1.660 m2 (Q4 2019-2020)
- Hagkaup store in Akureyri, total 2.173 m2 (Q2 2020-2021)
- In addition, construction of a new warehouse for refrigerated and frozen goods will finish in November 2020, total 4.440 m2
- The properties are not pledged
Reykjavíkur Apótek became a part of the group in September 2019 New pharmacy opened in Skeifan in February 2020
Further development ahead
Reykjavíkur Apótek in Skeifan
Mjöll Frigg became a part of the group in January 2020 An important part of the restructuring of warehouses, mainly due to bottling and mixing
Great increase in sales for Mjöll Frigg products due to COVID-19
Hagkaup.is back to business
Online store with groceries the first step Hagkaup celebrated its 60th anniversary in 2019
Útilíf online store was opened for business
in the operating year
- Alcohol sales have been successful
- Aðföng operates the project through Vínföng
- Prodicted sales during this operating year is approx. ISK 750 m
- Now, approx. 113 brands
- Good products for a good price
- Fifth largest in beer of 44 sales agents
- Fourth largest in red wine of 44 sales agents
Environmental and Social Projects
Carbon offset and a contract with
Klappir Grænar lausnir
- The goal is to achieve measurable results in environmental affairs and sustainability
- Bónus was the first chain store to offset its carbon footprint
- Olís in good cooperation with The Soil Conservation Service in Iceland
- This operating year, all companies within Hagar will offset its carbon footprint
-
For the first time, Hagar will publish its
CSR report according to Nasdaq's ESG reporting guide, concurrently with Hagar's annual report before the AGM
2020
Companies within the group are very active in supporting various community projects
Development Projects
- Full-blownproposals were handed to the negotiation committee of Reykjavík in June 2019.
- The proposals are in full accordance with the city's policy of decreasing the number of gas stations, the compact neighbourhood development and "the merchant on the corner"
- The proposals take into account commercial, residential and energy sales / gas pumps on the sites that the company has prioritized.
- Prioritized projects are:
- Stekkjarbakki
- Fjallkonuvegur
- Ánanaust
- Skúlagata
- Egilsgata
- In addition Lundur in Kópavogur
COVID-19
COVID-19
- No infections within grocery stores
- Frontline workers are heroes
- Good collaboration with authorites
- Product supply ensured
- Great work within stores and warehouses
- Great increase in sales with groceries but cost addition
- Great sales decrease at Olís
- Considerable decrease in clothing stores
Q1 2020/21 - The effect of COVID-19 and more
- Hagar has not issued an EBITDA budget for the operating year of 2020-21
- There is still great uncertainty about the effect COVID-19 will have on operations during a new operating year
- In total, the financial impact is negative for the first quarter of 2020-21
- In spite of great uncertainty, projected EBITDA in Q1 is between ISK 800-1.100 m
- Deviation in operating results are mostly due to Olís
- Primary factors of influence in Q1 are:
- COVID-19
- Drop in oil prices
- Devaluation of the Icelandic krona
- Increase in cost price from domestic and foreign suppliers
- One-timecost
- It is the evaluation of management that the effect of COVID-19 will mostly be visible during Q1 and have emerged largely as of May
- Gross profit is lower now compared to the previous year and historically low due to above-mentioned factors
Thank you
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Hagar hf. published this content on 19 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 May 2020 08:27:02 UTC