Why Read?

• Understand how well covered Iceland’s SSNs are by DCF EV (+ cash), including sensitivities to any unrecovered (via customer pass-through) and unmitigated (via cost savings) cost inflation and to UK YOY LFL sales growth shocks
• Understand how resilient Iceland’s UK frozen food niche is to Aldi’s planned store expansion
• Understand latest trends within Iceland’s EBITDA between its The Food Warehouse stores and its “core” Iceland stores (both new and old)

What’s New?

• Updated financial projections, DCF valuation and sensitivities, across base and bear cases
• Updated estimation of EBITDA split between The Food Warehouse stores and “core” Iceland stores

Questions Answered

• Everest model “portfolio” has had strong returns on Iceland. 2024 SSNs (recommended at a price of c. 68 in Mar-20) were successfully redeemed (above par) via early call in Feb-21 and 5 year CDS (recommended long risk, i.e. sell CDS in Mar-20 at 28% upfront + 500bps running) has now rolled down to 3 year CDS (now trading around c. 0% upfront + 500bps running). Does long Iceland risk still make sense or is SSNs “coverage” too sensitive to structural decline in “core” Iceland stores’ EBITDA?