Europris

Earnings Release • Apr 28, 2022

Europris shows strength after a satisfactory first quarter

Europris shows strength after a satisfactory first quarter

Highlights for the first quarter of 2022:

.    Total sales of NOK 1,716 million, down 0.2 per cent

- 5.5 per cent decline in sales excluding acquisitions

- Mild winter season and negative timing effect from Easter

.    Gross margin of 44.3 per cent, an improvement of one percentage point

- Positive contributions from fixed-rate agreement for inbound freight

- Negative effect from currency hedging

.    Opex-to-sales ratio of 28.1 per cent (26.3 per cent)

- Opex increase of 6.6 per cent, with a rise of 1.7 per cent excluding acquired

companies

.    EBITDA of NOK 278 million (292 million) and EBITDA margin of 16.7 per cent

(17 per cent)

.    Net profit of NOK 88 million (NOK 104 million) attributable to parent

.    Continued strong financial position with cash and liquidity reserves of NOK

1,383 million (NOK 1,526 million)

Europris has seen strong growth and lifted its performance over the past few

years, and the group is satisfied with developments in the first quarter of

2022. Total sales were almost on par with last year, with a higher gross margin,

although a slight underlying cost increase and costs from acquired companies

reduced profit.

Several factors make a meaningful comparison of the underlying performance for

the first quarter challenging. On the positive side, all the chain's stores were

open this year, whereas 10 per cent of them were temporarily closed in 2021

owing to Covid-19 restrictions. However, the lifting of all restrictions from

the middle of February this year led to increased cross border shopping. In

addition, a mild winter had negative effect on the sale of seasonal products

this year, and later Easter sales also had a negative effect on sales compared

to the first quarter last year.

Given the significant effects of the Covid-19 pandemic on consumer spending

patterns, sales developments need to be evaluated in a longer perspective. The

first quarter revenues for the Europris chain were 31 per cent above the same

quarter in 2019 (pre-pandemic).

CEO Espen Eldal comments:

"We're satisfied with developments in the first quarter and are well prepared

for the important upcoming summer season. Given increased inflation and higher

interest rates as well as the war in the Ukraine, the world is undoubtedly a

more uncertain place than it was a quarter ago.

"We see that our discount variety retail model provides good value for money in

today's market. How the new normal will play out is difficult to predict, but

the Europris concept has historically proven to be resilient in uncertain times.

With a wide and accessible store network, a broad product offering at low prices

and attractive campaigns, we're ready to deliver on our ambition of becoming one

of the best retailers in Europe."

Group sales for the first quarter came to NOK 1,716 million, down by a marginal

0.2 per cent. Excluding acquisitions, sales declined by 5.5 per cent, whereas

the like-for-like decline for the Europris chain in the first quarter of 2022

was 6.7 per cent.

Gross profit came to NOK 760 million (NOK 744 million), with the gross margin of

44.3 per cent (43.3 per cent) affected positively by a fixed-rate agreement on

inbound freight. The group recognised a net unrealised loss of NOK 5 million on

hedging contracts and accounts payable (gain of NOK 21 million). In addition,

the gross margin was somewhat diluted by the margin from acquired companies.

Operating expenditure (Opex) was NOK 482 million in the first quarter (NOK 452

million), up by 6.6 per cent. The increase is mainly explained by the inclusion

of acquired companies. Operating costs increased by 1.7 per cent excluding

acquisitions, which mainly reflects the increase from 239 to 244 directly

operated stores. Opex amounted to 28.1 per cent of total operating income for

the group (26.3 per cent).

EBITDA was NOK 278 million (NOK 292 million), down by NOK 14 million or 4.9 per

cent from the first quarter last year.

Cash and liquidity reserves for the group amounted to NOK 1,383 million per 31

March 2022 (NOK 1,526 million).

Europris has a flexible business model and a demonstrated ability to adapt

quickly to changes, and the board remains confident that the group also

continues to be well positioned for the future in a more challenging

environment.

Year-to-date sales growth for the Europris chain was 4.6 per cent at 26 April.

During the same period last year, an average of 13 per cent of the chain's

stores were temporarily closed.

The quarterly report, presentation materials and spreadsheet with key figures

will also be available on the company's website https://investor.europris.no.

CEO Espen Eldal and CFO Stina C Byre will present the company's results at 08:30

CEST at Nordea headquarter, Essendrops gate 7 in Oslo. The presentation will be

held in English and transferred via live webcast and will be made available

through the company's website https://investor.europris.no. It will be possible

to ask questions via the web.

For further information please contact:

Espen Eldal, CEO, +47 48 29 24 24, espen.eldal@europris.no

Stina C Byre, CFO, +47 41 10 58 08, stina.byre@europris.no

About Europris:

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

offers its customers a broad assortment of quality owned brands and brand name

merchandise. The company's merchandise is sold through the Europris chain, which

consists of a network of 271 stores throughout Norway, 244 of which are directly

owned by the company and 27 of which operate as franchise stores. The company's

headquarters are located in Fredrikstad, Norway.

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to Section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Trine Engløkken, Investor

Relations Manager at Europris ASA, on 28 April 2022 at 07:00 CEST.