XXL

Earnings Release • Jul 21, 2017

XXL ASA - Second quarter and first half 2017 results - Cost improvements offset demanding conditions

XXL ASA - Second quarter and first half 2017 results - Cost improvements offset demanding conditions

XXL ASA delivered a growth of 8 per cent for the second

quarter 2017 under demanding spring conditions but sales

responded well with the arrival of summer conditions late in

the quarter. Cost focus throughout the organization

compensated for a negative like-for-like growth. EBITDA for

the Group amounted to NOK 211 million in the quarter with a

corresponding margin of 10.3 per cent, where the Finnish

operation delivered a solid improvement compared to last

year. XXL is currently establishing operations in Austria

and the organization is well on track for its first store

opening to come in the third quarter 2017. Group EBITDA

without Austrian cost was NOK 218 million.

Highlights Q2 2017

- Total revenues of NOK 2 054 million (NOK 1 898

million), up 8 per cent

- Late spring season - Good start of summer

- Margins under pressure in Sweden - Still good

progression in Finland

- Four new store openings

- Austria well on track for launch in Q3 2017

Outlook

XXL has signed 11 new lease agreements for store openings

for 2017 where of 1 in Norway, 4 in Sweden, 4 in Finland and

2 in Austria. This includes 5 stores that are opened by the

end of Q2 2017.

Regarding Austria both the stores are in Vienna, giving

synergies to marketing cost. The first store opening will be

late Q3 2017. In addition, XXL will launch an E-commerce

offering to achieve omni-channel functionality. A local team

of at least five employees will be recruited for buying and

support to establish XXL in the new area. This organization

will be scaled for the whole DACH-region (Germany, Austria

and Switzerland). CAPEX per store will be in the range of

EUR 1.7 -1.9 million and an average pay-back per store of

4-5 years including net working capital. The average pay-

back time is after being some time in the market, following

an establishing period. Average sale per store is expected

to be around EUR 12 million, while the gross margin and

EBITDA-profile will be as in Sweden over time when excluding

for the build up of a centralized organization. Hence, the

start-up in Austria will have higher costs than the launch

in Sweden, Finland and Denmark. XXL expects between 15-20

stores in total in the Austrian market.

To continue the growth strategy, within both stores and

E-commerce, and in new markets as well as existing markets,

XXL will invest in infrastructure, IT and training

facilities. These investments are expected to be in the

range of NOK 70-90 million for 2017. In addition XXL has

refurbished two stores with CAPEX in the range of two new

stores.

The Group maintains the following long term objectives (on

full year basis):

- Like-for-like growth of mid-single digits over time

including E-commerce

- Gross margins: In Norway at low 40's, high 30's in

Sweden and between mid and high 30's in Finland. Due to the

demanding macro in Finland the lift to high 30's may take

longer time than in Sweden

- EBITDA-margins: In Norway at low 20's, in Sweden low

double digits and in Finland high single digits. Due to the

demanding macro in Finland the lift to high single digits

may take longer time than in Sweden.

- Both gross margin and EBITDA-margin for the Group

will be negatively affected by the establishment in new

markets

For further information please find attached the quarterly

report and the presentation material.

The results will be presented at 08:30 CET by CEO Fredrik

Steenbuch and CFO Krister Pedersen. The presentation will

take place at Danske Bank Markets in Oslo, Bryggetorget 4,

Foredragssalen. The presentation will be held in English and

will be webcasted at www.xxlasa.com. You may also follow the

presentation live by telephone. Dial-in details: +47 21 56

33 18 (Norway) and +44(0) 20 3003 2666 (International),

passcode - XXL Q2.

A replay will be available on www.xxlasa.com soon after the

live presentation.

For further queries, please contact:

Tolle O. R. Grøterud

Investor Relations XXL ASA

Tel: +47 90 27 29 59

E-mail:ir@xxlasa.com

This information is subject of the disclosure requirements

pursuant to section 5-12 of the Norwegian Securities Trading

Act

About XXL ASA

XXL is a leading sports retailer with stores and e-commerce

in Norway, Sweden, Finland and Denmark. It is the largest

and the fastest growing among the major sports retailers in

the Nordic. XXL pursues a broad customer appeal, offering a

one stop shop experience with a wide range of products for

sports, hunting, skiing, biking and other outdoor

activities. XXL's concept is to have the largest stores with

the lowest prices and the widest assortment of products,

focusing on branded goods.