Presentation of results for the fourth quarter and full year 2015

CEO Pål Wibe CFO Espen Eldal 12 February 2016

Norway's leading discount variety retailer

The figures presented are unaudited

Highlights in the fourth quarter

Group revenues increased 8.6% and likefor-like growth of 6.2%, outperforming market growth of 2.8%
Strong performance during all three seasonal events
Solid growth in Adjusted EBITDA:
Up 9.7% to NOK 283 million
Adjusted EBITDA margin 20.1%
Reduced leverage due to strong cash flow
Two new store openings during the quarter
Bodø
Grorud

Highlights full year 2015

Revenue

Group revenues increased 8.7% to NOK 4 629 million for the full year
5.4% like-for-like growth, 2.3% for market
Adjusted EBITDA rose 16.2% year-on-year to NOK 640 million
Gross margin increased 1.4% points resulting from savings from sourcing initiatives and takeover of franchise stores
Significant increase in net profit
Reflecting reduction in interest costs following refinancing
Nine new stores opened
58 store modernisations completed

Adjusted net profit

Adjusted EPS and dividend

Adjusted earnings per share of NOK 2.04 in 2015*
The Board of Directors proposes a dividend of NOK 1.40 per share, a total of NOK 234 million
Dividend corresponds to 68.5% of adjusted net profit
Dividend distribution will be carried out by way of a repayment of paid in capital

Europris continues to outperform the market

Overall growth performance

Y-o-Y LFL growth (%)

Europris growth rate in excess of market growth rate in the period % points

Modernisation almost completed

77% of own stores updated to latest store format at year end 2015
Ten projects planned for Q1 of which four franchise stores (incl. one relocation)
Strong pipeline for the full year with more than 30 projects planned of which app. 10 are relocations
Peak of modernisation activity reached

Solid pipeline and a wide range of prospects

Nine new stores opened during 2015, of which two during Q4 – Grorud and Bodø
One new store planned in Q1 Ågotnes
Solid pipeline of 19 new stores and several in negotiations:
Ten confirmed for 2016
Four confirmed for 2017 onwards
Five waiting for municipal approval
Wide range of prospects and good opportunity flow
No closures planned for 2016

Q4 "Christmas Gift" – deep dive in like-for-like growth

The fundamentals for continued growth are sound…

Discount penetration is low Potential upside in frequency

How frequently do people shop at Europris (% of respondents) Discount retail penetration of grocery and variety retail (%)¹ ²

Source: Ultima database; Euromonitor; MediaCom survey

Includes grocery retail and variety retail; all variety retail defined as discount. Only Coop Obs of grocery retail chains is defined as "Discount" for the purpose of this analysis. Euromonitor defines Rema 1000, Kiwi, Rimi and Coop Prix as "Discounters". However, these have been excluded in this comparison to other geographical markets where the "Discount" concepts are believed to be more differentiated on e.g. price and private label penetration. Source: Ultima database & Euromonitor
MediaCom survey with 1,303 respondents over 15 years of age that have heard of Europris and have a store in proximity to where they live, updated autumn 2015

…and we have a clear and resilient business model…

Respondents agreeing with statement: "offers generally low prices" 2008 level indexed to 100

Strong price perception Resilient business model

LFL development in selected regions, FY 2015

Europris Market

…with a lot of "levers" to pull – store modernisations is one…

Case study: seven latest stores that were modernised in 2014

…and as other "levers" will become more important…

We will continue to focus on seasons or events to drive sales
Christmas
Black Friday
Halloween
Summer
Easter
And others to come…
There is flexibility in our wide assortment agility in the face of shifting demands
Europris is on a "modernisation journey" of category and concept development will take time to capture full potential
E-commerce/marketing and B2B still not fully exploited opportunities remain

…ensuring effective execution will be key – we have proven consistency across areas…

Source: Europris analysis

13 Definitions: City: Above 25.000 inhabitants in catchment area. 53 stores in 2015; Town: Between 10.000 and 25.000 inhabitants in catchment area. 108 stores in 2015; Rural: Less than 10.000 inhabitants in cathment area. 50 stores in 2015.

…which is also reflected across store sizes…

LfL growth: store size (m²

) Adj. EBITDA margin: store size (m² )

Source: Europris analysis

14 Definitions: Under 900 sqm sales space: 42 stores in 2015; Between 900 and 1,200 sqm sales space: 108 stores in 2015; Between 1,200 and 1,500 sqm sales space: 44 stores in 2015; Above 1,500 sqm sales space: 17 stores in 2015.

…and even with nearby competition…

LfL growth: competitive intensity Adj. EBITDA margin: competitive intensity

…thus leaving a profitable store base with inherent opportunity for further upside

Adj. EBITDA in NOK per square meter sales space in 2015 for the 211 like-for-like stores in the Europris estate

Financial review

Gross margin development

Gross margin was 45.9% in Q4 2015 vs. 47.2% in Q4 2014
Timing difference in store stocktaking between 2014 (Q4) and 2015 (Q3) accounts for margin reduction
Positive effect from stocktaking in 2014 was NOK 25.4 million
Excluding effects from stocktaking, the gross margin was up by 0.2%-points
Gross profit increased 12.3% for the full year
Margin increase of 1.4%-points
Significant savings from sourcing initiatives
Positive impact from takeover of franchise stores
Currency fluctuations handled well

Gross margin

OPEX development

OPEX* in % of revenue was 25.7% in Q4 2015 vs. 27.3% in Q4 2014
Positive impact from timing difference in marketing costs
OPEX** was up by 10.5% for the full year
Increase influenced by takeover of franchise stores

OPEX in % of revenue

Adjusted EBITDA development

Adjusted EBITDA* margin of 20.1% in Q4 2015 vs. 19.9% in Q4 2014
Strong revenue development and positive impact from timing differences in marketing costs
Adjusted EBITDA** increased 16.2% from last year to NOK 640 million
Positive impact from revenue growth
Improved gross margin on the back of savings from sourcing initiatives and takeover of franchise stores

Adjusted EBITDA margin

* Adjusted for nonrecurring expenses of NOK 6.8 milllion in 2014

** Adjusted for nonrecurring expenses of NOK 36.7 milllion in 2015, mainly related to the IPO; adjusted for nonrecurring expenses of NOK 10.5 million in 2014

Profit and loss account

• Q4 2015

Revenue growth of 8.6%
Gross margin in Q4 2015 adversely impacted by timing difference in stocktaking
Net financial expenses impacted by reduced interest costs in Q4 2015. Q4 2014 expenses influenced by positive impact from currency hedging
Adjusted net profit up 9.7%
FY 2015, preliminary
Revenue grew 8.7% during 2015, driven by nine new stores and 5.4% LFL growth
Strong growth in gross margin
IPO related costs of NOK 30 million and refinancing costs of NOK 57 million in 2015
Adjusted net profit up 31.2%
Adjusted EPS of NOK 2.04

Amounts in NOK million	Q4 2015	Q4 2014	FY 2015	FY 2014
Total operating income	1 409	1 297	4 629	4 259
Operating profit	265	140	533	336
Net financial income (exp.)	-16	-12	-165	-129
Profit before tax	250	129	368	206
Income tax expense	67	36	95	57
Profit for the period	182	92	273	149

Nonrecurring items
IPO cost and refinancing	0	0	87	0
Other nonrecurring items	0	101	7	152
Total nonrecurring items	0	101	94	152
Profit before tax, adjusted	250	229	461	358
Tax on nonrecurring items 27%	0	27	25	41
Income tax expense	67	36	95	57
Adjusted net profit	182	166	341	260
Adjusted EPS (NOK) Based on 167 million shares	1.09	0.99	2.04	1.56

Cash flow and working capital

Strong cash flow of NOK 202 million for the year
Stable operational cash flow for the full year
Increase in income tax paid
Rise in net working capital
Working capital increase mainly inventory related
Opening of net nine new stores and takeover of four franchise stores
Value of goods purchased in foreign currencies increased
Positive impact from refinancing during spring 2015
No repayment of loans in 2015
Reduced interest expenses

Cash flow, NOK million	FY 2015	FY 2014
Cash from operating activities	303	304
Cash used in investing activities	-120	-122
Cash (used in)/from financing activities	19	-230
Net change in cash and cash equivalents	202	-48
Cash and cash equivalents at 1 January	245	293
Cash and cash equivalents at end of period	447	245

Change in working capital, NOK million	FY 2015	FY 2014
Inventory	-108	-105
Accounts receivables and other short-term receivables	53	-28
Accounts payable and other short-term liabilities	14	74
Change in working capital	-40	-59

Summary and outlook

Europris continues to outperform the market and delivered a strong end to a good year in 2015
The group is well positioned to benefit from continued discount sector growth
Resilient business model that shows relative strength in Rogaland and Hordaland
Truly mixed assortment provides competitive flexibility and a large addressable market
Nonstop growth focus
Strong focus on concept and category development
Healthy pipeline of new stores: expect >10 net new stores in 2016