Festi hf. – Valuation as of 1 Jan 2026

Valuation Summary

• The value per share as of 1 January 2026 is estimated at ISK 302.5.
• The valuation is based on a ten-year forecast using the residual income method, with a 10% nominal required return on equity and a 4.5% terminal growth rate (1.5% real).
• The increase in value from the prior valuation reflects 2025 performance and higher forecast gross margins.

Key Assumptions

• Revenue grows by an average of 5,7% per year (2.4% real).
• Gross margin is 25% in the early years, declining to 24% thereafter.
• Other operating expenses amount to 17% of revenue.
• Depreciation of operating assets, right-of-use assets, and intangible assets (excluding goodwill) averages 8% per year.
• Investment properties are revalued in line with CPI growth of 3–4%.
• The average cost of debt is 7.2%, with financing in ISK.
• Associates deliver a 18% return on the book value of their equity stake and pay out about 70% of earnings as dividends.
• Income tax is 20%, calculated on profit excluding the share of results from associates.
• The ratio of revenue to operating assets, right-of-use assets, and intangible assets (excluding goodwill) increases from 2.8 to 3.2, reflecting improved asset utilisation. Investment averages 4.6% of revenue.
• Dividend payments amount to 34.8% of prior year total comprehensive income in 2026, increasing to 80% thereafter, assuming an equity ratio of approximately 40%.
• Other general assumptions are presented under “Valuation”.