Strong underlying performance despite heightened uncertainty and challenging market conditions
Q2 2026 Key Operating Results
- Sales amounted to ISK 46,347 million, an increase of 6.4% year-on-year.
- Margin from sales of goods and services amounted to ISK 11,522 million, an increase of 4.7% year-on-year.
- Margin level was 24.9%, down 0.4 p.p. from Q2 2025, but up 0.9 p.p. excluding the effects of exchange-rate movements, changes in global fuel prices and changes to fuel-related government levies at the beginning of the year.
- EBITDA amounted ISK 3,908 million, a decrease of 0.8% year-on-year.
- Profit amounted to ISK 1,299 million and return on equity was 13.1%.
- Cash flow from operating activities amounted to ISK 287 million, a decrease of ISK 4,918 million year-on-year, primarily due to one-off movements in operating assets and liabilities.
- Net interest-bearing debt amounted to ISK 39,214 million, an increase of ISK 6,267 million from year-end 2025, primarily reflecting higher working capital requirements related to inventories and trade receivables following the rise in global fuel prices.
- Equity amounted to ISK 46,789 million and the equity ratio was 40.2% at the end of Q2 2026, compared with 41.2% at year-end 2025. Festi paid a dividend of ISK 2,151 million to shareholders during the quarter.
- The Company has lowered its 2026 EBITDA guidance by ISK 500 million to ISK 16,000–16,500 million due to lower-than-expected margin from fuel sales.
Ásta S. Fjeldsted, CEO:
“Group performance was solid during the quarter, although margin from fuel sales fell short of management's expectations and fuel volumes declined by 4.3%, primarily due to lower B2B sales. Performance across other product categories was positive, with both sales and margin increasing year-on-year. Customer transactions across the Group were broadly stable year-on-year, while average basket size increased as units sold rose by 3.7%.
Key Business Highlights
- Krónan: Krónan's largest store, Lindir, reopened in June following a nine-week closure for refurbishment. The reopening has been well received, with trading exceeding expectations. Despite the closure, transactions across the store network increased by 2.6% year-on-year, while units sold rose by 4.5%. Krónan's online store, Snjallverslun, continued its strong momentum, with sales increasing by 52% year-on-year.
- ELKO: ELKO opened its sixth store in Smáralind in June, which is off to a positive start. Refurbishment of ELKO‘s Grandi store will begin this autumn. ELKO continued to grow despite a 4.1% contraction in the consumer electronics market, supported by strong online sales.
- Lyfja: Lyfja received the highest perception score among pharmacy brands in a survey conducted by Prósent, while brand awareness reached 98%. Lyfja Heyrn continued to gain momentum, with margins from sales increasing by 39% year-on-year. Digital sales and services also performed strongly, with the lyfja.is website achieving record monthly sales in June, up 56% year-on-year.
- N1: N1 opened a new station at Geysir in Haukadalur, replacing the previous location in the area and improving access for both passenger cars and larger vehicles. N1 will also open a new service centre at Borgarhella this autumn, which will house Iceland’s largest tyre hotel and offer tyre services, car washing and oil changes for both passenger and commercial vehicles.
“ We continue to invest in infrastructure, digital capabilities and new service solutions across the Group. Key initiatives for the remainder of 2026 include a new Lyfja pharmacy at Vellir in Hafnarfjörður in Q3, a new Krónan store in Höfn in Q4 and the continued development of N1’s foodservice offering. These investments will enhance service levels, broaden our offering and strengthen customer relationships across Iceland.
The outlook for the second half of the year is shaped by heightened geopolitical uncertainty. Developments in the Middle East and volatility in fuel markets demand continued cost discipline and operational flexibility. The sharp increase in global fuel prices that has already materialised is expected to weigh on N1’s earnings over the remainder of the year. Meanwhile, Krónan continues to perform strongly and is expected to deliver robust, profitable growth. ELKO and Lyfja are maintaining solid momentum, with online sales continuing to grow strongly year-on-year.
Overall, we are pleased with the Group's performance during the quarter. Festi remains in a strong financial position despite the temporary impact on cash flow from increased working capital tied up in inventories and trade receivables. The underlying business remains strong, but external factors have temporarily affected the margin from fuel sales, which has fallen short of our expectations. Accordingly, we have lowered our 2026 EBITDA guidance by ISK 500 million to ISK 16.0–16.5 billion." says Ásta S. Fjeldsted.
