Ölgerðin Egill Skallagrímsson (OLGERD) Q1 2025 earnings summary

Executive summary

• Revenue increased by 2% year-over-year to ISK 11.2 billion, driven by retail and corporate sales, while sales to quick-service chains declined and hotel/restaurant sales remained flat.

• Net profit for the quarter was ISK 482 million, down ISK 481 million from the same period last year, mainly due to a one-time gain in 2023 from a revaluation of the Iceland Spring acquisition.

• EBITDA decreased by 9% year-over-year to ISK 1,055 million, and EBIT fell by 14% to ISK 778 million.

• Operating margin was pressured by increased wage and operating costs, which rose ISK 102 million above gross profit growth.

Financial highlights

• Gross profit rose by 5.7% (ISK 239 million) year-over-year, attributed to higher beer sales share and increased sales of functional drinks.

• Sales and marketing expenses increased by ISK 217 million, mainly due to intensified competition and new customer acquisition, with ISK 71 million related to Collab exports.

• Net financial expenses increased by ISK 26 million, largely due to currency effects and higher interest rates, partially offset by lower leverage and favorable commercial paper issuance.

• Equity at period end was ISK 15.8 billion, with an equity ratio of 48%.

• Net interest-bearing debt including lease liabilities was ISK 5.8 billion, up ISK 75 million from year-end.

Outlook and guidance

• Management continues to emphasize investments that reduce environmental impact, aiming for net zero emissions by 2040.

• The company expects continued competitive pressure and is investing in product innovation and market expansion, especially for functional drinks.