Europris

Earnings Release • Nov 1, 2019

Strong increase in customer traffic drives sales growth

Strong increase in customer traffic drives sales growth

Highlights third quarter 2019:

· Group revenue up by 9.2 per cent to NOK 1,477 million (NOK 1,352 million)

· Gross margin increased to 44.3 per cent (43.6 per cent)

· Positive result from annual stocktaking in the stores, as last year

· Fill rate at the central warehouse still too high, but Opex impact limited

to NOK 5 million

· Adjusted net profit up by 45.4 per cent to NOK 88.4 million (NOK 60.8

million)

· IFRS 16 Leases implemented at 1 January 2019, last year's figures not

restated

Europris - the first choice for anyone who wants to shop convenient, smart and

at low price - delivered a strong third-quarter result. With a solid increase in

customer numbers as the main driver for sales growth, group revenue came to NOK

1,477 million - up by 9.2 per cent year-on-year.

Like-for-like growth was 7.5 per cent, significantly above the overall market

growth of 1.3 per cent. Note that last year's comparable numbers were negatively

affected by exceptional weather and one fewer sales days.

On a year-to-date basis, the Europris chain had a total growth of eight per cent

compared with 1.2 per cent for the market. Like-for-like growth was 5.8 per cent

for the first nine months, compared with 0.2 per cent for the comparable market.

"I am pleased to see continued strong sales growth driven by customer traffic,"

comments Pål Wibe, CEO of Europris. "I'm also proud and pleased to see a

continuously improved execution of our seasonal sales and campaigns. Once again,

we're delivering like-for-like growth well above the market and thereby further

strengthening our position as Norway's leading discount variety retailer."

"Discount variety retailing is thriving in a challenging retail market, and

being Norway's number one in this sector puts us in a unique position to

continue our profitable growth journey."

The gross margin in the third quarter was higher than for the same period of

last year, at 44.3 per cent (43.6 per cent). As last year, profits in the

quarter were positively affected by the annual calculation of actual cost prices

during stocktaking in the stores. Adjusted for stocktaking, the gross margin was

42.6 per cent (42.0 per cent).

Operating expenditure excluding non-recurring items came to NOK 392 million in

the third quarter (NOK 507 million adjusted for IFRS 16), compared with NOK 471

million last year.

A non-optimal level of inventory at the central warehouse remains an issue, but

the measures taken to reduce the negative impact on costs have quickly produced

results. Cost overruns were reduced to NOK 5 million in the quarter, mostly

booked in July.

Efforts to improve processes related to volume control in the supply chain made

good progress during the quarter.

Adjusted EBITDA was NOK 262 million for the third quarter (NOK 147 million

adjusted for IFRS 16), up by 23.5 per cent from NOK 119 million in the same

period of last year.

Adjusted net profit for the third quarter amounted to NOK 88 million, up from

NOK 61 million in the same quarter of 2018. Adjusted net profit for the first

nine months of 2019 was NOK 173 million (NOK 206 million).

Europris opened one new store in the third quarter, relocated one store and

undertook two store modernisations. Six new stores were opened in the first nine

months. The board has so far approved an additional five stores for 2020 and

beyond, two of which are subject to planning permission.

Webcast today, Friday 1 November, at 8.30 AM CET: CEO Pål Wibe and CFO Espen

Eldal will host a presentation. Europris invites investors, analysts and media

to attend.

Material: The third quarter report and presentation will also be made available

at www.europris.no/corporate (http://www.europris.no/corporate/investor) and

www.newsweb.no. In addition, a recorded version of the presentation will be made

available on

www.europris.no/corporate (http://www.europris.no/corporate/investor)

approximately two hours after the webcast has concluded.

For questions or further information, please contact:

CEO Pål Wibe, tel: +47 99 11 98 91, email: paal.wibe@europris.no

CFO Espen Eldal, tel: +47 48 29 24 24, email: espen.eldal@europris.no

Europris in brief

Europris is Norway's largest discount variety retailer by sales. The company

offers its customers a broad range of quality own brands and brand-name

merchandise. Its merchandise is sold through the Europris chain, which comprises

a network of 264 stores throughout Norway. Of these, 230 are directly owned by

the company and 34 operate as franchise stores. The company's headquarters are

in Fredrikstad, Norway.

This information is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.