HAGAR HF

HAGA
Delayed Quote. Delayed  - 11/26 07:56:28 am
53.7ISK --.--%

Hagar : Fjarfestakynning-19.-mai-2020_enska

05/19/2020 | 04:28am

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)

(100%)

--

(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

Disclaimer

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

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