XXL

Investor Presentation • Oct 27, 2023

XXL ASA – Q3 2023

Reset & Rethink initiatives progressing well in an unsatisfactory 3rd quarter

XXL Q3 2023 Presentation 27 October 2023

Presentation of Financial Results October 27th, 2023

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 third quarter 2023, held on 27th of October 2023. 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.

XXL Q3 2023 Presentation 27 October 2023 3

CEO agenda

Reset & Rethink progressing according to plan 1 including our Must Win Battles

2 Continued challenging market

Unsatisfactory sales and results in Q3, thus 3 increased ambitions on cost take out

X

XXL's journey ahead

RESET

Top line quick wins and cost control

0-12 months 0-24 months

RETHINK

Accelerate key top line levers

RESET: We continue to focus on our 5 "Must Win Battles"

Must Win Battles are progressing well – Several highlights during the quarter (1/2)

Private label: Stormberg products selling through very well and considerable order volumes are placed for 2024

Private label: MacKenzie to be relaunched in cooperation with Stormberg

Stock clearance of slow-moving high price points products ongoing

Must Win Battles are progressing well – Several highlights during the quarter (2/2)

Strong progress also on other key initiatives

• ✓ Successful launch of new customer loyalty club XXL REWARD. with cashpoints and bonus checks
• ► Major upside potential and foundation for improved personalization and increased customer loyalty

CASH & LIQUIDITY

• ✓ Successful and over-subscribed rights issue of NOK 500 million
• ► Close monitoring of liquidity and cash and continuous focus on net working capital

8

• ✓ Signed exit agreements on last three stores in Austria scheduled to be closed during 2023
• ✓ No operations nor material contractual obligations in Austria after 2023-year end

New Nordic management team being secured to deliver on the Reset & Rethink plan

▪ We are on a professionalization journey

• New top management with considerable experience, relevant competence, senior leadership and strong track records now being secured and effectively put in place
• The majority of the senior management team will thus effectively be renewed
• A new operating model as well as a clear steering framework will further support and secure strong execution

9

Emelie Friis - Brand & Marketing

Over 25 years experience in marketing with focus on FMCG, Retail and consumer brands

Simen Helly-Hansen - Category & Supply

Strong & diverse international experience, over 20 years, with proper & relevant category management competence

Peter Jansson - IT & Development

A previous IT consultant that joined XXL in 2014 and Today is SVP Tech development (~CTO)

COO (recruitment ongoing)

New COO in progress to be recruited

10

A challenging market in the short-term, but resilient in the long-term

11

Resetting and rebalancing inventory composition towards greater value for money

…and slow sales on capital intensive hardware products

Avg. turnover days selected hardware categories (# of days)

Hardware category 1 Hardware category 2 Hardware category 3 Hardware category 4

RESET initiative: Key focus going forward to reset and re-balance towards greater value for money price points, which in turn will improve availability

Continued high campaign pressure in all three core markets

RETHINK initiative: Currently improving our tactical campaign tool-box to both secure top line and safe-guard gross margin

13

Q3 financial summary – unsatisfactory sales and result

Cost out ambition increased up to NOK 300 million

Cost base in scope (2022 numbers)

UPDATED Q3: Ambition to reduce costs by at least NOK ~200-300m**

* Rental costs not part of reported EBITDA; ** Gross run rate end of 2024

Financial Review Q3 2023

Q3 2023 characterized by continued focus on liquidity

• Settlement of rights issue of NOK 500 millions to strengthen the liquidity of the Group
• 169 MNOK • Granted a 12 month extension of a repayment of Swedish tax of SEK 345 million – due on 12 September 2024 (provided that an extended 36 month payment plan is not accepted by Swedish tax authorities)

• vs. Q1 2019 • Reassessment of tax paid to Norwegian tax authorities in Oct 23 of NOK 90 million – ongoing negotiations (MAP/APA)

• Significantly reduced purchased goods vs. 2023 and previous years

• Inventory reduction of > NOK 850 (> 30%) million vs. LY
• Lowest CAPEX in the last 10 years
• Supplier debt reduced with NOK ~400 million vs. Q3 LY

Liquidity Balance sheet Structural measures

• Exit agreements for the remaining three stores in Austria were signed in the quarter. Consequently, XXL will have no material operations or commitments in Austria after year end 2023
• Minority investment in Stormberg finalized

Close monitoring of liquidity and continuous focus on net working capital

Key Figures

(Amounts in NOK million)	Q3 2023	Q3 2022	YTD 2023	YTD 2022	FY 2022
GROUP - Continuing Operations
Operating revenue	1,982	2,207	5,911	6,162	8,426
Growth (%)	-10.2 %	-14.1 %	-4.1 %	-11.8 %	-12.2 %
Gross profit	662	770	1,821	2,273	2,721
Gross margin (%)	33.4 %	34.9 %	30.8 %	36.9 %	32.3 %
OPEX %	31.6 %	26.4 %	32.0 %	29.2 %	29.5 %
EBITDA	3 5	187	-67	473	237
EBITDA margin (%)	1.8 %	8.5 %	-1.1 %	7.7 %	2.8 %
EBIT	-155	5 4	-643	-61	-467
EBIT margin (%)	-7.8 %	2.4 %	-10.9 %	-1.0 %	-5.5 %
Net Income	-140	5 7	-611	-28	-411
**Basic Earnings per share (NOK)	-0.20	0.23	-1.32	-0.11	-1.63

• Revenue down with NOK 225 million vs. last year - Challenging market driven by low consumer confidence and
• reduced demand for sporting goods results in a negative like for like growth of 12.8%
• Gross margins ended at 33.4%, down from 34.9% last year - The market is characterized by continued high inventory levels in the whole value chain, resulting in aggressive pricing, excessive campaigns, and consequently reduced margins

• OPEX in % is 5.2 p.p higher than last year

• Operating expenses as percentage of sales increased to 31.6% in Q3 (26.4% in Q3 22) impacted by the negative like for like growth hampering scale in the operations
• Increased costs explained by new store openings, higher marketing costs, and negative currency translation effects
• Additional costs related to the equity raise
• EBITDA ending at NOK 35 million
• Net income of minus NOK 140 million in Q3 2023

Gross Margin Development

XXL ASA Q3 2023 - Gross margin per segment

• Weakened gross margin development in the quarter, down from 34.9% in Q3 2022 to 33.4% in Q3 2023
• The market continues to be characterized by excessive inventory levels in the whole value chain, resulting in aggressive pricing, excessive campaigns, and consequently reduced margins
• The current market demands strict focus on inventory levels and liquidity control, which will lead to fluctuations in the gross margin between quarters and seasons

OPEX Development

• Group OPEX% in Q3 increased to 31.6% (up 5.2 points vs Q3 22), mainly impacted by the negative like for like growth hampering scale in the operations
• Operating expenses increased by NOK 43 million vs Q3 22, explained by negative currency translation effects of around NOK 20 million. Remaining increase related to new store openings, and increased marketing spend due to high campaign activity, as well as costs related to the raise of new equity. This is partly counteracted by lower personnel costs

EBITDADevelopment

Q3 22 Q3 23

• Negative EBITDA development vs LY in all segments mainly explained by reduced revenue and lower gross margin
• EBITDA margin of 1.8% in Q3 2023 vs. 8.5% in Q3 2022

Inventory levels are normalized and significantly reduced commitments going forward

22

Net debt reduced

Net debt Development (NOK million)

Financial position

Summary and final remarks

X

XXL's journey ahead

RESET

Top line quick wins and cost control

0-12 months 0-24 months

RETHINK

Accelerate key top line levers

RESET: We have 5 "Must Win Battles" – which are progressing well!

XXL Q3 2023 Presentation 27 October 2023 27

We have successfully opened our 86th store in the Nordics

LILLEHAMMER NOW OPEN!

We are now entering peak season

WE LOOK FORWARD TO WELCOMING Friday MORE CUSTOMERS THAN EVER BEFORE!

THANK YOU

Q&A

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