XXL

Earnings Release • Jul 22, 2016

XXL ASA - Second quarter and first half 2016 results - Five new stores and E-commerce launch in Denmark

XXL ASA - Second quarter and first half 2016 results - Five new stores and E-commerce launch in Denmark

Second quarter 2016 was characterized by many

important operational events to contribute to future

growth for the Group. XXL delivered a growth rate of

24 per cent for the second quarter 2016, driven by new

stores and a like-for-like growth of 11 per cent. Both

Norway and Sweden experienced record sales on the

opening day of a new store. In addition XXL expanded

into Denmark late in May with an E-commerce offering

only. EBITDA for the Group amounted to NOK 222 million

in the quarter with a corresponding margin of 11.7 per

cent, where the Swedish operation delivered the

strongest improvement compared to last year.

Highlights Q1 2016

- Total revenues of NOK 1 898 million (NOK 1

535 million), up 24 per cent

- Like-for-like growth of 11 per cent

- EBITDA of NOK 222 million (NOK 201 million)

- Five new stores - three in Norway, one in

Sweden and one in Finland

- Launched E-commerce offering in Denmark

- Total upgrade of ERP-platform and new front-

end website

Outlook

XXL has signed 12 new lease agreements for store

openings for 2016 where of 7 in Norway, 2 in Sweden

and 3 in Finland. This includes 5 stores that XXL has

opened so far in 2016.

In addition, XXL launched an E-commerce offering in

Denmark in May 2016. The launch is colored by

aggressive pricing and high marketing spending and

will return negative profits the first years of

operation. The business case has minor initial CAPEX

but the total investment should be considered as a

small store outside Norway with 4-5 years of pay-back.

Due to more stores and growth in E-commerce in Norway

XXL will invest in the central warehouse. The central

warehouse in Norway will increase from approximately

24 000 square meters to 32 000 square meters. In

addition, XXL will increase the capacity of the

Autostore system in Sweden. Total infrastructure

investments will be in the range of NOK 50-65 million

in 2016.

The distribution channels for XXL marketing material

is under substantial change where the existing print

and TV marketing is under pressure. XXL will focus

more on digital marketing channels in addition to the

existing channels. The new strategy will increase the

marketing cost in per cent of sales in all countries

in a transition period by approximately 0.5 percentage

points year over year.

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 to be stable. 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-margin stable as a result of stable

gross margins and operating expenses. In Norway at low

20's, in Sweden low double digits and in Finland high

single digits.

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 our headquarters in

Oslo, Strømsveien 245, Alna Senter (entrance on the

right side of Maxbo). 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, Head of 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.