Strong operating year - new procurement partnership lowers prices

The management accounts of Hagar hf. for the financial year 2025/26 have been reviewed by the Company’s Board of Directors. The report includes, among other things, key information on the Group’s operations, financial position and cash flows. The management accounts have not been audited by the Group’s auditors and do not include non-financial information. The audited annual financial statements, together with non-financial disclosures, will be published on 29 April. Accordingly, the results presented herein may be subject to change by that time. Any deviations, should they arise, will be disclosed upon publication of the annual financial statements. Comparative figures, in the balance sheet as of 28 February 2025, have been adjusted to reflect the fair value of the SMS purchase price at the acquisition date following information obtained within one year of the acquisition.

Key figures*

• Sales in Q4 amounted to 48,043 m.ISK (4.4% increase from Q4 2024/25). Sales in 12M amounted to 197,043 m.ISK (9.3% increase from 12M 2024/25). [Q4 2024/25: 46,037 m.ISK, 12M 2024/25: 180,342 m.ISK]
• Gross profit Q4 amounted to 12,296 m.ISK (25.6%) and 49,124 m.ISK (24.9%) for 12M. [Q4 2024/25: 11,508 m.ISK (25.0%), 12M 2024/25: 41,104 m.ISK (22.8%)]
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) Q4 amounted to 4,032 m.ISK or 8.4% of sales. EBITDA 12M amounted to 18,129 m.ISK or 9.2% of sales. [Q4 2024/25: 3,857 m.ISK (8.4%), 12M 2024/25: 14,738 m.ISK (8.2%)]
• Profit for Q4 amounted to 1,981 m.ISK or 4.1% of sales. Profit for 12M amounted to 7,394 m.ISK or 3.8% of sales. [Q4 2024/25: 3,066 m.ISK (6.7%), 12M 2024/25: 7,030 m.ISK (3.9%)]
• Comprehensive income for Q4 amounted to 1,836 m.ISK and 7,741 m.ISK for 12M. [Q4 2024/25: 6,735 m.ISK, 12M 2024/25: 10,699]
• Basic earnings per share in Q4 were 1.81 ISK and 6.75 ISK for 12M. [Q4 2024/25: 2.81 ISK, 12M 2024/25: 6.47 ISK]. Diluted earnings per share in Q4 were 1.66 ISK and 5.94 ISK for 12M. [Q4 2024/25: 2.71 ISK, 12M 2024/25: 6.30 ISK]
• Equity amounted to 42,779 m.ISK at year-end and equity ratio was 37.1%. [Year end 2024/25: 38,489 m.ISK and 36.5%]
• Management's guidance for the financial year 2025/26 assumed that EBITDA would be in the range of 17,600-18,100 m.ISK

*SMS became part of Hagar Group in Q4 2024/25 and therefore the impact is only reflected in the final quarter of previous year‘s comparative figures.

Operational highlights

• The quarter delivered strong results, with solid revenue growth and good performance across all operating segments – SMS now included in Q4 comparative figures for the first time.
• The abolition of the fuel duties at year-end impacts the Group’s revenue, but sales growth would have been around 6.4% on a like-for-like basis – gross profit in ISK remains unchanged, while the gross margin ratio increases.
• Customer visits to grocery stores in Iceland increased by 6.8% in Q4 - the number of units sold increased by 3.2%.
• Fuel volumes sold increased by 1.2% during the quarter – growth in both retail and sales to industries.
• Customer visits at SMS in the Faroe Islands increased by 2.2% during the quarter.
• Fair value changes of investment properties were negative in Q4 by ISK 189 million, compared to a positive ISK 1,042 million last year, incl. ISK 922 million due to one-off effects related to SMS operating lease properties.
• Hagar and Salling Group have entered a procurement partnership, enabling Hagar - Bónus and Hagkaup - to reduce prices on hundreds of products.
• Preparation for the new retail media unit, Hagar miðlar (e. Hagar Media), is nearing completion, with a presentation event for partners scheduled for April 17.
• Hagar’s new loyalty program, Takk, was launched on January 14 and has been very well received, with nearly 60,000 members to date.
• Construction has begun on facilities for Eldum rétt and Ferskar kjötvörur at Álfabakki 2 - lease-related expenses of ISK 133 million recognized in Q4.
• Hagar’s share of profit in Klasi amounted to ISK 828 million in Q4.  

Finnur Oddsson, CEO:

Operations of Hagar during the fourth quarter of the 2025/26 financial year were strong across the board, with results exceeding forecasts. Sales amounted to ISK 48,043 million, representing a 4.4% increase year-on-year, although comparisons are affected by the abolition of fuel duties at the turn of the year, which lowers revenue relative to the prior year. EBITDA amounted to ISK 4,032 million, increasing by 4.5% year-on-year, while profit amounted to ISK 1,981 million and decreased between years. Adjusted for one-off income items and changes in the valuation of investment properties in the prior year, EBITDA strengthened further year-on-year and operating profit increased.

The quarter concludes a strong financial year for Hagar, with the company’s new operating pillar, SMS in the Faroe Islands, now fully contributing. Annual sales amounted to ISK 197,043 million, a 9.3% increase, EBITDA was ISK 18,129 million, or 9.2% of revenue, and profit for the year amounted to ISK 7,394 million. The results reflect the strong position of all operating segments and solid demand in the markets in which the Group operates, both in Iceland and the Faroe Islands. We are satisfied with the Group’s performance during the year and that, alongside strong operating results, meaningful steps have been taken to further broaden the revenue base and support profitable growth.

During the quarter, revenue from Stores and Warehouses - Iceland increased by 8.1% from the same period last year, amounting to ISK 35,687 million, and profit improved. Growth in revenue, units sold and customer visits confirms increasing momentum in Hagar’s retail operations. A record number of customers visited Bónus during the quarter, resulting in 9% revenue growth and a 4% increase in units sold. Customers have responded well to updated priorities in Bónus stores and the continued focus on offering the best value in grocery retail in accessible locations across the country. The assortment of fruits, vegetables, health products and ready meals has been expanded, and initiatives such as the sale of 43 tonnes of “sports candy” in collaboration with LazyTown have supported children’s health initiatives. In addition, 95% of children born in Iceland last year received a Barnabónus gift (care packages), support that eases the financial burden on families with children. Through strong procurement practices and close collaboration with suppliers, Bónus has reduced prices on about 850 products and maintained stable pricing on approximately 1,600 additional items year-on-year. In addition, customers save tens of millions of ISK each month through attractive offers, including “Ódýrast vikunnar í Bónus” (e. Value of the Week in Bónus) and “Takk” promotions.

Christmas trading at Hagkaup was strong and set the tone for a solid quarter. Customer visits reached record levels, supported by continuous service innovation and the broadest product offering in the Icelandic market across groceries, cosmetics and toys. The share of e-commerce in specialty goods and catering continues to grow, and customers have responded positively to the new online grocery platform in collaboration with Wolt. Activity at Aðföng and Bananar increased in line with strong performance in Hagar’s grocery retail operations. Stórkaup’s wholesale of operational supplies and health products performed well, with particularly strong growth in food-related sales. Convenient and high-quality meal solutions from Eldum rétt continue to enjoy popularity, which is reflected in performance. Zara also delivered solid results, with performance exceeding both forecasts and the prior year.

Operations at Olís were overall strong during the quarter. Revenue amounted to ISK 8,974 million and decreased by 10% year-on-year solely due to the abolition of fuel duties at year-end. Performance exceeded forecasts but declined year-on-year. Volumes sold increased in both retail and to industries, and continued growth was seen in non-fuel sales, including retail goods, food service and other services. The fifth Glans car wash station opened in February at Skúlagata. The financial year was one of the strongest in the company’s history, driven by solid fuel sales in the retail market, efficiency improvements in operating costs and increased sales of services and non-fuel products such as food service, car wash services under Glans, last-mile delivery with Wolt and parcel services.

SMS in the Faroe Islands continued to perform well. Revenue amounted to ISK 3,965 million, increasing by close to 9% year-on-year, and customer visits increased. Profitability was slightly below the prior year and forecasts, partly due to one-off income items in the prior year and partly due to lost sales this year following supply chain disruptions from a logistics provider in mid-December, shortly before Christmas. Overall, SMS performed well during the year, with results well above forecasts.

“Takk”, the Group’s loyalty program launched in January, has been well received. Membership has reached approximately 60,000 users, significantly above expectations in the initial months. The program enables Hagar’s retail operations to better tailor product offerings and services to customer needs. Another new initiative, a retail media platform named “Hagar miðlar” (e. Hagar media), will formally launch on 17 April, enabling partners to communicate more effectively with customers at point of sale, compared to traditional media channels. Initial testing of advertising performance within “Hagar miðlar” has been promising, and we look forward to presenting the service further to partners at a formal launch event tomorrow.

Led by Bónus, Hagar has consistently emphasized maintaining the lowest possible prices for customers. Continuous efforts are made to minimize operating costs and secure favorable procurement terms, contributing to efforts to contain inflation. It is widely recognized that Bónus has played a key role in moderating grocery price increases in Iceland since its establishment. There are, however, emerging challenges, as rising oil prices driven by geopolitical tensions in the Middle East are increasing pressure on cost of goods in grocery retail globally, given the close link between oil prices, production and transportation costs.

In this context, we are pleased to announce that we have started a new procurement partnership with the Danish retail group Salling Group. Salling Group is the largest company in its field in Denmark, operating more than 2,100 stores under brands such as Netto, føtex, Bilka and Rimi across Denmark, Germany, Poland and the Baltic countries. The company is known for competitive pricing across a wide range of products, many of which carry recognized Nordic quality certifications. The partnership marks a milestone in Icelandic grocery retail, enabling Hagar to leverage Salling Group’s purchasing power to reduce prices on hundreds of products in the coming months. The first products have already been introduced in Bónus and Hagkaup stores, with further expansion expected. We expect these price reductions in ours stores to have a positive impact on the development of grocery prices in general and contribute to easing inflationary pressures.

We are satisfied with the development of Hagar over the past year, which combined strong operating performance with progress on key strategic initiatives. A new operational pillar has been established through SMS in the Faroe Islands, the “Takk” loyalty program has been launched, and “Hagar miðlar” creates new opportunities for collaboration and customer engagement. In addition, the Glans car wash concept has been successfully rolled out, with five locations now in operation. At the same time, the year has been used to prepare the partnership with Salling Group, which we believe will deliver tangible benefits for both customers and the company in the short and long term. This progress is reflected in increased shareholder value, with return on equity in line with targets and earnings per share increasing by 21% over the past year and more than tripling over the past five years. The share price, adjusted for dividends, increased by over 21% during the financial year.

Hagar's strong performance over the past year reflects, on the one hand, the loyalty of our customers, who demonstrate their trust by choosing to shop with us, and on the other, an exceptional team of employees who bring dedication every day to deliver a convenient, simple and value-driven shopping experience. Despite challenging conditions facing the Icelandic economy and global markets for oil and supplies, we remain confident in a positive outlook for Hagar. The Group’s position is strong, and there are multiple opportunities ahead for profitable growth.

The outlook for the 2026/27 financial year assumes that EBITDA will be in the range of ISK 18,800 – 19,300 million.

Presentation meeting on Friday, 17 April 2026

A presentation meeting for investors and market participants will be held at Nauthóll, Nauthólsvegur 106, Reykjavík, on Friday, 17 April 2026, at 8:30 a.m. At the meeting, Finnur Oddsson, CEO, and Guðrún Eva Gunnarsdóttir, CFO, will present the company’s operations and financial performance and answer questions.

The meeting will also be live-streamed, and registration for the stream is available at: https://www.hagar.is/skraning. Questions related to the financial results can be sent to the email address [email protected] and will be answered as possible at the end of the meeting.

Presentation materials will be available in Icelandic on Hagar’s website, www.hagar.is, at the start of the meeting. Presentation materials will be made available in English no later than 20 April at https://www.hagar.is/en/.

For further information, please contact Finnur Oddsson, CEO ([email protected]), and Guðrún Eva Gunnarsdóttir, CFO ([email protected]), by telephone 530-5500 or email.