XXL

Investor Presentation • Jul 12, 2024

XXL ASA – Q2 2024

STRENGTHENED EBITDA AND EARLY SIGNS OF POTENTIAL MARKET RECOVERY, BUT SOMEWHAT DISAPPOINTING SALES IN THE QUARTER HELD BACK FURTHER PROFITABILITY UPLIFT

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Presentation of Financial Results July 12th, 2024

Disclaimer

Important notice

The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ("relevant persons"). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the XXL Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

This presentation includes and is based, inter alia, on forward-looking information and contains statements regarding the future in connection with the XXL Group's growth initiatives, profit figures, outlook, strategies and objectives. All forward-looking information and statements in this presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the XXL Group and its lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions.

Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although XXL believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation.

XXL is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither XXL nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared for the interim results presentation for the second quarter 2024, held on 12th July 2024. Information contained herein will not be updated. The following slides should also be read and considered in connection with the information given orally during the presentation.

CEO agenda

Strengthened gross margin driving improved EBITDA, while soft sales are being addressed

Soft top line driven by capital-intensive products, but signs of recovery in overall sales since March

• Challenging year-over-year comparables with extraordinary strong Q2-2023 campaigns
• But positive trend since March
• Capital intensive sub-categories, especially bikes, are holding back sales in the quarter
• However, shoes and apparel categories are driving growth

Intentions to enter into a strategic partnership with Frasers Group

• ✓ Sourcing & brand partnerships
• ✓ Store elevation
• ✓ Best practice sharing

WILL ACCELERATE OUR RESET & RETHINK JOURNEY!

Other commercial milestones during the quarter

XXL Rewards

Now over 3.8 million members in the Nordics

XXL Pay

Launched XXL Pay, a new payment solution to boost sales and loyalty

Everyday low price

Focusing on value for money entry price points, with Stormberg and Pilago leading the way

Store elevations

First steps taken to be even more inspiring and relevant for our customers

Joshua King Football Camp - Zuccarellostiftelsen

Aligned with our purpose "Sports Unite All"

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Leverage service

offering

"Reset" progressing well, thus we have also begun with "Rethink"

MWB indicators | Increased focus towards lower price points to improve sales and availability, with a continued positive gross margin trend

CATEGORY RESET AVAILABILITY

Moving toward our target and purchasing more lower price classes with significantly lower stock days

Price points dist. (%) & stock days (index)

Significant decrease of inventory value, while # of pieces in stock less affected, however availability on top 1000 products still lagging behind

Development inventory

PRICING

Year-over-year improvement, but June effected by heavy campaigns in the market

MWB indicators | Further indicators pointing towards underlying progress in our turnaround plan

The sporting goods market continues to be challenging but a few positive developments are seen during the quarter

Q2 financial summary

CFO | A changing of the guard

Many thanks to Stein Eriksen

Welcome to Lars Syse Christiansen Senior management team complete and renewed

Financial Review Q2 2024

Key Figures

(Amounts in NOK million)	Q2 2024	Q2 2023	H1 2024	H1 2023	FY 2023
GROUP - Continuing Operations
Operating revenue	1 776	1 946	3 334	3 930	961 7
Growth (%)	-8 % 7 ,	-6 9 % ,	-15 2 % ,	-0 % 7 ,	% -5 5 ,
Gross profit	633	538	1 238	1 159	2 509
Gross margin (%)	35 7 % ,	27 6 % ,	37 1 % ,	29 5 % ,	31 5 % ,
OPEX %	33 4 % ,	30 6 % ,	35 6 % ,	32 1 % ,	32 5 % ,
EBITDA	39	-57	51	-102	-80
(%) EBITDA margin	2 2 % ,	-2 9 % ,	1 5 % ,	-2 6 % ,	-1 0 % ,
EBIT	-151	-249	-339	-488	-1 409
(%) EBIT margin	-8 5 % ,	-12 8 % ,	-10 2 % ,	-12 4 % ,	-17 7 % ,
Impairment losses	-	-	-	-	576
EBIT adj	-151	-249	-339	-488	-833
EBIT adj . margin (%)	-8 % 5 ,	-12 8 % ,	-10 2 % ,	-12 4 % ,	-10 % 5 ,
Net Income	-283	-246	-491	-472	-1 590
Net Income adj	-283	-246	-491	-472	-1 014
**Basic Earnings share (NOK) per	-0 13 ,	-0 63 ,	-0 25 ,	-1 37 ,	-2 18 ,

• Revenue down by NOK 170 million vs. last year
  • Low product availability
  • Capital-intensive goods, especially bikes, holding back sales
  • Challenging LY comparison due to extraordinary sales campaigns Q2 23
• Gross margin at 35.7%, up from 27.6% last year
• OPEX is 2.8 p.p higher than last year
  • Operating expenses as percentage of sales increased to 33.4% in Q2 24 (30.6% in Q2 23) impacted by the negative like for like growth hampering scale in the operations
• EBITDA NOK 39 million vs NOK 57 million LY
• MAP/APA: NOK 72 million effect on tax provision and NOK 14 million on interest expense relate to the ongoing MAP-APA case which is expected to have limited net cash effect
• Net income of negative NOK 283 million in Q2 2024

Gross Margin Development

XXL ASA Q2 2024 - Gross margin per segment (in %)

• Improved gross margin development in the quarter, up from 27.6% in Q2 2023 to 35.7% in Q2 2024. All segments posting positive development vs. last year
• The strengthened gross margin is explained by a healthier inventory level, as well as better pricing
• Also, in Q2 2023 XXL posted an additional write down of inventory explaining around 3.4 percentage points of the gross margin improvement
• A high share of sales is still on campaign products, impacting the margin negatively
• However, continued positive trend on gross margin

OPEX Development

XXL ASA Q2 2024 - OPEX per segment (in %)

• Group OPEX% in Q2 increased to 33.4% (up 2.8 points vs Q2 23), impacted by the negative like for like growth hampering scale in the operations
• Operating expenses NOK 1 million lower in Q2 24 vs Q2 23
  • o Personnel expenses reduced by NOK 30 million
  • o Reduction in personnel expenses offset by several factors:
    • Adjustments in bonus accruals LY of approximately NOK 15 million
    • Increased marketing investments during the quarter, due to negative timing effects
    • Other OPEX negatively affected with approximately NOK 10 million in non-recurring cost elements

EBITDADevelopment

Q2 23 Q2 24

XXL ASA Q2 2024 Q2 - EBITDA per segment (in mNOK) -57 -39 4 39 17 GROUP NORWAY SWEDEN FINLAND 90 148 0

• Positive EBITDA development vs LY in all segments. The positive development in EBITDA in Q2 on group level is solely explained by the improved gross margin.
  • Norway segment improved EBITDA by NOK 58 million
  • Sweden improved EBITDA by NOK 39 million
  • Finland improved EBITDA by NOK 14 million
• XXL's HQ overhead cost increased by NOK 14 million, mainly due to non-recurring elements and timing effects
• EBITDA margin of 2.2% in Q2 2024 vs. 2.9% in Q2 2023

Net debt increased by NOK 18 million

Net debt development (mNOK)

Financial position

Summary and final remarks

Turnaround progressing well with several commercial achievements, however we are now increasing our efforts on top line improvements even more

Summary

Now full focus on SALES to get back on track on bottom line

THANK YOU!

Q&A

Sports unite all.

All sports united.