XXL

Investor Presentation • Apr 29, 2020

XXL ASA – Q1 2020

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 first quarter 2020, held on 29 April 2020. 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.

Introduction to XXL's new CEO - Pål Wibe

• Experienced CEO within retail from Europris AS, Nille AS, Travel Retail Norway AS
• Board member Kolonial.no
• Passionate sport enthusiast
• Strong believer in the uniqueness of the XXL concept
• Highly confident in the transformation process and the strategy going forward

Top line – high variation in sales during the quarter

An extraordinary and tough quarter

• First quarter since Q2 18 with positive like for like growth of 3%
• E-commerce with growth of 35%
• All markets gaining market shares
• EBITDA of NOK -83 million, negatively affected by
• Clearance sales
• Lower supplier bonuses of NOK 71 million
• COVID-19
• Significant reduction of inventory, NOK 0.9 billion lower than last year
• Liquidity reserve of NOK 0.8 billion and secured financing

XXL has outperformed sports retail market in Q1

• Very volatile markets – gaining market shares in all markets

-12.1

COVID-19 impacting sales and categories

-7.6% NO LFL Stores eCom (Sales growth vs LY – 12.03.20-26.04.20) (Sales growth Norway vs LY – 23.03.20-26.04.20)

• Consumers shifting buying behavior towards online and ecommerce across all markets
• Strong growth in Norway in eCom while drop in store revenues are at lowest level compared to other markets

Strong growth in online channel (eCom) Growth in specific categories

• Strong growth in some specific categories
• Home training and exercise increase across all markets while Norway also has a significant growth within outdoor related categories

Financial review

Q1 results significantly impacted by several factors

Impact • Significantly reduced purchased goods (NOK 500 million) Events • Lower supplier bonuses of NOK 71 million • Reduced inventory and improved liquidity • Clearance sales (approx. NOK 400 million in sales of obsolete goods) • Sold off significant volumes to 0-margin (negative cannibalization) • Increased market shares • Reduced inventory and improved liquidity • Covid-19 • Reduced sales of NOK 100 million from mid-March 20 (-23%) vs. LY • Secured long term financing of XXL • Liquidity covenants until Q3-21

Negative P&L effects in Q1, but strengthened balance sheet and liquidity

Key Figures

(Amounts in NOK million)	Q1 2020	Q1 2019	FY 2019 Audited
GROUP
Operating revenue	2 162	2 014	8 992
Growth (%)	7 4 % ,	-2 7 % ,	-5 1 % ,
Gross profit	604	821	3 058
Gross margin (%)	27 9 % ,	40 7 % ,	34 0 % ,
OPEX %	31 8 % ,	31 2 % ,	28 6 % ,
EBITDA	-83	192	490
EBITDA margin (%)	-3 9 % ,	9 5 % ,	5 4 % ,
EBIT	-262	19	-201
EBIT margin	-12 1 % ,	1 0 % ,	-2 2 % ,
Net Income	-224	-19	-327

Positive sales development in Q1 vs. LY: +7.4%

• Challenging markets
• First time since Q2-18 with positive LFL growth of 2.8%
• Norway, Sweden and Finland posting positive growth

Gross margins:

• Q1: margins ended at 27.9%, significantly lower levels than, due to clearance and lower supplier bonuses

OPEX % in Q1 is 0.6 p.p higher than last year, where Q1 have a higher OPEX base

– Sweden, Finland and Austria with positive trend

Status Q1 2020 – LFL and EBITDA

Gross margin development

Gross margins (%) 27.9 30.5 25.5 25.0 32.4 26.1 40.7 43.7 38.7 38.7 35.3 21.5 GROUP NORWAY SWEDEN FINLAND AUSTRIA DENMARK Q1 20 Q1 19

Gross margin was 27.9% in Q1 2020 down from 40.7% in Q1 2020, due to clearance campaign in February and lower supplier bonuses of NOK 71 million

Q1-2020: significantly lower gross margins due to clearance sales and supplier bonuses

Gross margin (%) development

OPEX development

OPEX (%)

Group OPEX% up by 0.6 points to 31.8% in Q1 – Driven by higher OPEX base

• Increased costs in HQ and Logistics segment, mainly explained by ongoing improvement programs, refinancing activities and contingency plans in relation to the COVID-19 situation
• Also increased OPEX due to 6 more stores compared to last year

EBITDA development

EBITDA 69 -18 4 -11 -1 50 43 -9 -3 -83 206 GROUP NORWAY 192 SWEDEN FINLAND AUSTRIA DENMARK Q1 20 Q1 19

EBITDA decline in Q1 of NOK 275 million vs. LY

• Lower supplier volume bonuses of NOK 71 mill
• Clearance sale in February with 0-margins
• Higher opex base related to consultancy and restructuring
• Strong decline in Norway (NOK 136 mill) and Sweden (NOK 68 mill) and Finland (NOK 39 mill)

EBITDA - bridge Q1-19 to Q1-20

Net debt development

Liquidity reserves ending at NOK 0.8 billion

Q1/Q2-2020 – strengthening the balance sheet

Own Balance Sheet Capital Raise New Bank Facilities

• Reduced purchasing of goods with NOK 500 mill in Q1 vs. LY
• 169 MNOK • Clearance sales in Q1

• vs. Q1 2019 • Reduced inventory of NOK >900 mill vs. Q1 19

• Fully underwritten share issue of NOK 400 mill

• Subscription price of NOK 5.00 per share
• Each shareholder granted 0.464 subscription for every existing share
• Oversubscription will be allowed

• Subscription period from 4 May to 18 May 2020

• New bank financing with bank consortium of NOK 1 450 mill

• Term loan of NOK 500 mill
• RCF of NOK 500 mill + 364 days of RCF of NOK 300 mill
• Seasonal credit of NOK 150 mill
• Liquidity covenants until Q3-2021

Closing remarks

Measures has been taken to strengthen XXL's performance

• Reduced purchasing budgets
• Sold off a substantial part of inventory
• Secured long term funding needs
• Focus on retail basics and core processes
• Reducing operating costs and rightsizing the organization

Strategic priorities

Priority on changes with direct customer impact

XXL are strengthening management team and key functions

Claes Winterfeldt EVP Purchasing & Category

• Sportamore Chief commercial officer
• Sportamore Buying Director
• Stadium Business Unit Manager
• Puma Nordic Sales Manager

SVP Communication

• Process closed to be announced soon
• Strengthen internal communication and culture alignment
• Build brand identity and XXL brand equity
• Improve external stakeholder relationships

André Sjåsæt EVP Strategy & Business Development

• Bertel O. Steen EVP Corporate dev. & digital services
• Bertel O. Steen Chief Strategy Officer
• Kearney Management Consultant
• EY Management Consultant

EVP Commercial

• Process of recruiting new leader
• Will have responsibility for marketing, omni-channel customer experience, CRM and customer support

SVP Human Resources

• Process in closing
• Strengthen internal routines and control
• Improvements on HSE and Corporate governance issues
• Create and contribute to positive and necessary cultural change

Summary

Q1 2020 takeaways	• Extraordinary quarter – weak winter conditions, clearance sales, COVID-19 • Positive like for like growth of 3% - first time since Q2 2018 • Significant EBITDA decline explained by: - clearance sales, COVID-19 and lower supplier bonuses • Strong inventory reduction of NOK 0.9 billion • Secured long term funding of XXL and liquidity reserves of NOK 0.8 billion
Priorities	• Implement measures to strengthen XXL's performance - optimize inventory - reduce cost base and right size organization • Priority on changes with direct customer impact • Build management team and key functions
Outlook	• COVID-19 - deploy contingency plan and secure cash flow • High fluctuations in sales across markets, sales channels and categories - growth in Norway/Sweden/E-com, negative growth in Finland and Austrian stores closed until 2 May 2020 • 4 new lease agreements signed for 2020 • Capex NOK ~150-180 mill

Appendix

Norway

• Positive sales development in the quarter
• Negative like for like growth of 1.5%
• -0.9% adjusted for cannibalization effects
• 1 new store in Hønefoss
• Lower gross margins down 13.2%p to 30.5%, affected by clearance sale and lower supplier bonuses
• EBITDA-margin down 14.4%p to 7.3%

Page | 29

Sweden

• Volatile and price focused market
• Like for like growth up 5.9% in local currency
• Affecting the cost leverage positively
• Negative development in gross margin of 13.3%p to 25.5%, affected by clearance sales and lower supplier bonuses
• EBITDA of NOK -18 million and a margin of -2.8%

Finland

Positive development in Q1 and gaining market shares

Positive like for like growth of 2.8% when adjusting for cannibalization effects

Negative development in gross margins, down 13.6%p to 25.0% due to clearance sale and negative effect from lower supplier bonuses

EBITDA of NOK 4 million (NOK 43 million)

Page | 31

Q1 20

-11.0% -8.2%

Revenues EBITDA

-11

Q1 19

-9

• Constantly working on improving the offering
• Gross margin down 2.9%p to 32.4% affected by negative effect from lower supplier bonuses
• Negative EBITDA of NOK 11 million
• still lagging scale on HQ

Austria

Page | 32

-23.7%

-3

Q1 19 Q1 20

-18.5%

Revenues EBITDA

Denmark

Revenues declined 70.9% in local currency

• Gross margins improved from 21.5% to 26.1%
• EBITDA loss of NOK 1 million
• Adjustments to reach break-even on a significant lower cost base

5

-1

HQ and Logistics

• Higher cost mainly explained by new recruitments and costs of external cost elements
• OPEX of NOK 126 million to 5.8% of Group sales
• Several initiatives to reduce the cost base

Market data – online traffic

Growth split by markets

XXL ASA – Q1 2020