Europris

Investor Presentation • Dec 8, 2022

Capital Markets Update

December 2022

Disclaimer

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From good to great

CEO Espen Eldal

Capital Markets Update 2022 – Agenda

Date	8 December – 2022
Time	09:00 – 12:30
Place	Oslo + webcast
Agenda	09:00 – 09:45	Europris – "From good to great"	Espen Eldal, CEO
	09:45 – 10:05	Lekekassen	Andreas Skalleberg, CEO, Lekekassen
	10:05 – 10:30	Growth strategies and sustainability	Renate B Spernes, VP strategy and sustainability
	10:30 – 10:45	Break
	10:45 – 11:10	Financials and goals	Stina C Byre, CFO
	11:10 – 11:15	Concluding remarks	Espen Eldal, CEO
	11:15 – 11:30	Q&A
	11:30 – 11:50	International variety retail perspectives	Jeroen van Dorp, head of consumer retail, cross market group, EMEA Goldman Sachs
	11:50 – 12:30	Fireside chat and lunch Development of the retail market in Norway	Espen Eldal, CEO Renate B Spernes, VP strategy and sustainability
			Harald Jackwitz Andersen, director, Virke Britt Otterdal Myrset, partner, Deloitte Derya Incedursun, private economist, Nordea

What does "good" look like?

Norway's discount variety retailer #1

Strong brand and loyal customer base

Low prices and powerful marketing and campaign engine

Proven category management model

Expanding store network and e-commerce operation

A growing loyal customer base

1.2 million customer club members

35 million transactions annually

Powerful marketing and campaign engine

Prices for our front-page products are unbeatable …

about 1 million households

… and customers know it

Our campaigns drive traffic

Featured products support the low-price perception …

… and increase shopping frequency

Where do you shop at least monthly²?

¹ Percent of sales in the Europris chain (directly operated and franchise stores)

² MediaCom Brand Tracker 2022, across Europris, Clas Ohlson, Nille, Jysk, Biltema, Coop OBS, Normal, Rusta and Jula

Established price leadership

Well positioned in current tough market environment

• Low-price concept well suited for the current tough market environment
  • → Consumer confidence at low levels, with inflation and interest rates reducing disposable household incomes
• Has further sharpened the focus on daily consumables with low price points
  • → Entered the fourth quarter well stocked and ready for the important seasons

Recognised as a price leader

Which chains do you think have generally low prices¹?

Champion of the seasons

Seasonal campaigns and store layouts aligned

Shifting focus according to seasons

Which chains do you think have a seasonal range¹?

Broad range of relevant products

Well-diversified across different retail segments¹ General merchandise Consumables Speciality retail

High level of flexibility in 15 main categories

Current focus on products with low price points

¹ Sales for the Europris chain (directly operated and franchise stores), January-November 2022

Private labels support growth

Private labels add variety, new price points and sustainable alternatives → increasing growth and improving gross margins

Customer feedback is aligned with our goals

In 2022, low price remained a key association, followed by large selection and a broad range In 2015, we were associated with low price and a varied range…but also with low quality

Expanding network of own stores across Norway

New, relocated or modernised 86 stores from 2019 to December 2022 Number of stores

▪ Average store size around 1,200m2

Directly operated Franchise

Lifted margins across the store portfolio

Store EBITDA margin improvement

%

• All stores profitable in 2021
• Larger volumes and improved operational leverage yield higher EBITDA margins
• Additional margin improvements by applying stricter "rules of business"
  • Making fewer mistakes across the value chain

Improving customer scores for store facilities

Score improvements from 2018 to 2022

Change from 2018 to 2022, %-p

Store opening, Nittedal November 2022

¹ MediaCom Brand Tracker from 2007 to 2022 19

What makes us good?

Strong retail culture and execution power

Experienced team with deep retail understanding

Espen Eldal CEO Nine years with Europris

Pål Christian Andersen VP supply chain Nine years with Europris

Ole Petter Harv VP technology and IT Eight years with Europris

Jon Boye Borgersen VP commercial 17 years with Europris

Stina C Byre CFO Two years with Europris

Renate B Spernes VP strategy and sustainability Three years with Europris

Øyvind Haakerud VP store operations Nine years with Europris

Knut Spæren VP international sourcing 11 years with Europris

Continuing to develop and grow

• All members of the management team have more than 10 years of retail experience
• Mixing continuity and new impulses, with changes of CEO, CFO and head of strategy in recent years
• Sharp focus on continuous management development
  • 2019: "Yellow belt" in Lean
  • 2020: New rules of business
  • 2021: Category upgrades initiative
  • 2022: Innovation and sustainability

Dedicated workforce pulling in the right direction

• Around 3,300 employees with 60% women and 40% men
• Loyal and dedicated employee base with high level of job satisfaction
• Strong and all-time-high scores in employee satisfaction surveys

Growth in the core

Efficient operations

New growth and innovations

Top-of-mind destination categories

Seasonal concepts drive traffic

Our ambition is to develop our store concept to deliver an even better customer experience, and offer a more relevant and profitable product range for everyday life, seasons, and special occasions

Proven category management model

Pets is a prime example of category management

A highlighted category at the CMD in 2018

The revenue growth continues

Category upgrades drive growth

Kitchen Q1 20 Home Q1 21 Storage Q2 21 Textiles Q2 21

Chocolate and snacks Q3 21 Pets Q1 22 Toys Q4 22

Handyman Q3 22

Retail management is about putting all the pieces together

Exceeded our financial and operational ambitions

What we said on the CMD in Q4 2018			What we have delivered
Growth	Continue to deliver like-for-like growth above the market		Growth clearly above the market
Number of new stores	Average of five new stores net per year	✔	Delivered on plan and budget
EBITDA	Increased EBITDA margin over time	✔	Doubled EBITDA and lifted EBITDA margin from 18% in 2019 to 24% LTM Q3 22
Dividend	Dividend policy of 50-60% payout of net profit	✔	Dividend payout of 63% of net profit

30 years of growth

NOK 9bn

Note: sales for the Europris chain (directly operated and franchise stores), Lunehjem (consolidated as of March 2021), Lekekassen (consolidated as of August 2021) and the Strikkemekka group (consolidated as of July 2022) 32

EPR Capital Markets Update

Lekekassen Holding AS

Andreas Skalleberg, CEO

Lekekassen legacy dating back to 1945

"The butcher from Grimstad" Transforming into a Scandinavian online retailer

Transformational change

• Shut down 11 physical stores
• Invested heavily in IT infrastructure
• Warehouse capacity increased built for scale

Leading online toy specialist in Scandinavia

Priority areas

• Grow in Norwegian core market
• Invest in growth in Sweden and Denmark
• Implement new growth categories

"It's hard to change a habit of making money – we're an online value company"

It had to be Europris

Two-way synergies

"E-commerce is like Formula 1"

We have to operate as separate entities

We control the service!

Winter is coming - our profit-focused organisation will always beat the market

Reducing Opex and increasing efficiency through

• operational excellence
• a data-driven mindset and approach
• continous investment in tech and loyalty initiatives

Opex and efficiency programmes are paying dividends

• 2022: New five-year outbound logistics agreement. YoY savings of +20% in Norway
  • Market is experiencing an 11% increase in prices in 2022
  • The contract is with a 2% fixed inflation rate up to 2027
• Warehouse efficiency programme launched by COO. Q4 efficiency increase of +20%
• Successful loyalty programme launched in Norway in Q4

E-commerce adding to growth in the core

Building our e-commerce platform Norwegian retail market¹

Physical store network is key growth lever for us

Key value proposition from low-cost products, wide product selection and targeted campaigns

E-commerce as incremental growth lever to ensure a fair share of the total market – mainly through pureplay concepts

NOK billion

Acquisition of selective pure-play concepts

Growth in the core
		Launched pure-play concepts
		Lekekassen / ToySpace • Acquired 67% in August 2021 • Revenue 2021: NOK 591m • EBITDA margin: 18.5%
New growth		Strikkemekka group • Acquired 67% in July 2022 • Revenue 2021: NOK 180m • EBITDA margin: 9.2%
		Lunehjem • Acquired 67% in March 2021 • Revenue 2021: NOK 32m • EBITDA margin: 13.8%

Targeted approach for pure-play selection

✓ Profitable e-commerce player

• ✓ Strong position in target segment
• ✓ Specialist standalone concept in niche
• ✓ Synergy potential with Europris
• ✓ Strong organisational structure and competence

Why pure-play?

E-commerce sales, 2019 – LTM Q3 22

Lunehjem from March 2021, Lekekassen from August 2021 and the Strikkemekka group from July 2022

Home deliveries and click-and-collect 48

Building our pure-play portfolio

Scandinavian pure-play portfolio

Potential to grow along multiple axes

The digital customer

Increasing conversion and profitability through the digital customer

Grow number of customers and shopping frequency

Increase basket value

Personalise shopping experience

Half our revenue now comes from the MER club

Higher average basket value¹

Customer insights to drive customer value

Identify target demographics Data driven insights Personalised outreach

Personalised outreach already beginning to increase conversion rates

Targeted measures to increase shopping frequency

Win back and regain loyalty Maintain loyalty Build loyalty New customer Potential loyalist Loyal customer Need attention Drop in

Increasing frequency and loyalty Outreach based on what we know about …

… purchase history … the customer profile

Personalised outreach based on customer profiles

Examples of newsletters based on customer profiles

Europris.no driving traffic to stores

Europris.no is a key marketing channel Monthly traffic on Europris.no

Million visits

Modernised IT systems enabling innovation

Implementing project to modernise IT and core systems

Modernise ERP systems

New and modern cashier system

Modernise accounting and financial reporting system

Project started in 2021 with completion expected early 2025

Growing sustainably - acting responsibly

59

Sustainability is an integrated part of our strategy

Environment (E)

Social (S)

Reduce emissions in line with the Paris agreement with ambition of reaching net zero by 2050

Give everyone the opportunity to make sustainable choices, and be a pioneer for affordable sustainable products

Being an attractive place to work, where employees thrive and experience personal development

Our climate profile Our products Our people Our social responsibility

Contribute positively to people and the environments in the many local communities we are a part of

Governance (G)

Committing to net zero emissions by 2050

From storage to shop with zero emissions

Pioneer with affordable sustainable products

Paving the way for sustainable choices

• Affordable sustainable products
• Increase share of certified sustainable products
• Recycled and recyclable packaging and products
• Improved quality and reduced product returns

Launching Europris as the "local hero"

Already positioned as a positive local contributor

Continuing to contribute to local communities …

46%

of people agree that we contribute positively to local communities

Continuously improving

in order to increase our contribution to local communities and take social responsibility

… building from a strong position

"I agree that Europris contributes actively and positively in local communities"¹

Pure-play and	Building a targeted pure-play portfolio to capture a fair
e-commerce	share of the growing online market
The digital	Increasing frequency, profitability and customer
customer	experience through the digital customer
Sustainability and social responsibility	Sustainability is an integrated part of our strategy Becoming the "local hero"

Sustainable growth making us great!

Financials

CFO Stina C Byre

Europris has consistently outperformed the market

Strengthened position in growing market

Retail sales development

• Expanded customer base, with more loyal members in the Mer customer club
• Upgraded key product categories
• Continued to develop the campaign engine
• Improved shopping experience with all-time high customer satisfaction
• Broadened and upgraded the store network

Q4 2022 trading update

Revenue growth, October and November 2022

• Strong growth in October and November
• High growth in consumables
• Lower sales of seasonal items

Strong organic growth plus add-on acquisitions

Reported revenue and EBITDA margin

NOK billion, %

• More customers and higher basket values
• Category upgrades driving growth
• New stores and store upgrades
• Acquisitions adding to the total
  • About NOK 700 million in revenue from Lekekassen, Strikkemekka and Lunehjem LTM Q3 22

Note: Acquisitions consist of 100% consolidated figures from the partly owned subsidiares Lunehjem (consolidated as of March 2021), Lekekassen (consolidated as of August 2021) and the Strikkemekka group (consolidated as of July 2022)

More customer transactions + higher basket values

Number of transactions and average basket value

Category upgrades drive growth

Kitchen Q1 20 Home Q1 21 Pets Q1 22

Sales growth, Kitchen and Europris chain % year-on-year change

Sales growth, Home and Europris chain % year-on-year change

Expansion of the store portfolio

New, modernised, relocated and expanded stores …

Number of stores

… drive growth

• Number of stores increased in line with plans
  • Payback¹ for new stores of around 1 year
• Total number of stores in the chain has increased to 276 from 258 at the end of 2018
  • Number of directly operated stores increased to 249 from 221
  • Number of franchise stores reduced to 27 from 37

Expanded scope through pure-play acquisitions

¹ Consolidated revenue at 100% basis as booked in Europris group numbers 75

Gross margin improved

Gross margin

• Favourable freight agreement through 2021-22
• Positive effect from category initiatives
• Increasing contribution from private labels
• Efficient long-term sourcing arrangements
• Expect margins somewhat above pre-pandemic levels

Competitive freight terms - also going forward

Container freight rates¹

• Strong positive effect of freight agreements through 2021 and 2022 1
  • Historical annual freight costs of NOK 60-70 million
  • Additional costs of NOK 170-200 million in 2022, but peak freight rates avoided
• Reduction of about 50% for freight rates in new two-year contract effective from 1 January 2023
  • Full P&L effect will be delayed, dependent on inventory turnover

Maintaining strong cost discipline

Opex % of revenue

• 60% of Opex LTM Q3 22 related to employee benefit expenses - follows collective agreements
• More efficient logistics gradual impact of new warehouse and automation, with full effect from H2 24
• Predictable energy cost from forward power contracts
  • Avoided cost increase of NOK 80 million in 2022
  • Cost increase of NOK 20 million in 2023
• Lease contracts are CPI-adjusted
  • Recognised under IFRS 16 Leases, and not part of the Opex

Europris has showcased its inherent operational leverage

• Improved gross margins +
• Strong cost discipline +
• High earnings growth =

Average annual growth across the P&L CAGR 2019 to LTM Q3 22 LTM

Cash flow from operations

Net cash flow generated from operating activities¹

• Increased net working capital requirements driven by inflationary pressures and higher inventory of seasonal items
• Net working capital increased by NOK 0.6 billion from Q3 21 to Q3 22

Investing in growth and cost position

Total CAPEX development

NOK million

Two projects continue to drive investments in 2022-24

New and expanded warehouse and automation at logistics hub in Moss

Total investment of about NOK 230 million, with NOK 85-90 million remaining in 2023-24

New IT platform, including transition to new ERP and point of sale systems

Total investment of about NOK 45 million, with NOK 15 million remaining in 2023

Capex level set to decline in 2024 and 2025

Distributing excess cash

Sources and uses of cash

2019 - 2021, NOK billion

Financing and funding

NOK 1 billion term loan hedged 60%

RCF and overdraft facility covering seasonal cash flow variations

• NOK 1.2 billion RCF (of which NOK 300 million drawn at Q3 22)
• NOK 200 million overdraft facility (of which NOK 124 million drawn at Q3 22)
• Seasonally strong cash flow in Q4

Ample financial headroom within current covenants

• EBITDA/net interest bearing debt last 12 months to Q3 22 of about 1x versus covenant of 3.25x

• Term loan and RCF up for refinancing, maturing in January 2024

• Interest rate hedge of NOK 300 million to July 2027 and NOK 300 million to July 2030

• Total gains of NOK 85 million booked from 2020 to Q3 22

Maintaining an attractive dividend policy

Dividends announced since last CMD in 2018

NOK per share

• Ambition to continue delivering competitive shareholder return through share appreciation and dividends
• Average dividend ratio of 63% in 2018-21
• Maintaining dividend policy of 50-60% payout of net profit

Growth	Continue to deliver like-for-like growth above the market
Number of new stores	Average of five new stores net per year Depending on availability of locations which meet strict return requirements and potential for relocations, expansions and modernisations
EBITDA	Increased EBITDA margin over time From improved sourcing and more cost-efficient value chain
Dividend	Dividend policy of 50-60% payout of net profit While maintaining an efficient balance sheet

Financial and operational ambitions remain unchanged

Creating strong shareholder returns

Total shareholder return of more than 250% since last CMD in 2018

Indexed, dividends reinvested

Concluding remarks CEO Espen Eldal

Our key strategic focus areas

Key takeaways

Clear market leader in a growing market segment

1 2 3 4 5

Strong track record with 30 years of consecutive growth

Well managed with proven ability to adapt to changing market conditions

Clear operational and financial strategy

Committed to profitable growth and cash distribution

Appendix

Long-term financial and operational ambitions
ÖoB
Sales days and store projects
Analytical information
Alternative performance measures (APMs)

Long-term financial and operational ambitions

Growth	Continue to deliver like-for-like growth above the market over time
Number of new stores	Target to open a net average of five new stores per year, depending on availability of locations which meet strict return requirements, and the potential for relocations, expansions and modernisations
EBITDA	Increase EBITDA margin over time from improved sourcing and a more cost-effective value chain
Dividend	Dividend policy of paying out 50-60% of net profit while maintaining an efficient balance sheet

A low-risk synergistic partnership today

Potential for true European scale tomorrow

Transaction highlights

20% initial stake in Runsven-gruppen AB	• Based on EV using fixed multiple of 7.7 of actual EBITDA for 2018 • Purchase price settled at NOK 115 million based on ÖoB EV of NOK 574 million • Shares acquired in the market by Europris at a total cost of NOK 98 million • Share-for-share transaction, settled with treasury shares • 2.6% ownership stake in Europris (4.35 million shares)
Option to acquire remaining 80% stake	• Exercisable six months after agreement reached on ÖoB's 2019 EBITDA • Based on EV using fixed multiple of 7.7 for average of 2019 and 2020 EBITDA • Share-for-share transaction
Lock-up	• Shares issued to sellers of ÖoB are subject to lock-up

Sales days and store projects

Number of sales days

Year	Q1	Q2	Q3	Q4	Total
2021	76	71	79	81	307
2022	76	72	79	81	308
2023	77	71	79	79	306

•Number of store projects (franchise projects in brackets)

2021	Q1	Q2	Q3	Q4	Total
New stores	1	1	1	1	4
Store closures	-	-	-	-	-
Relocations	1	1	1	2	5
Modernisations	4	2	2	1	9

2022E	Q1	Q2	Q3	Q4	Total
New stores	1	3	1	1	6
Store closures	-	-	-	-	-
Relocations	2	2	-	2	6
Modernisations	5	3	4	3	15

Analytical information¹

Seasonality	• As a rule-of-thumb, the Easter impact is approximately NOK 60-75 million in revenue and NOK 12-15 million in EBITDA
Quarterly Opex	• Europris stores: as a rule-of-thumb, Opex in quarter one year earlier + inflation + NOK 1.5-1.6 million per extra directly operated store (DOS)
Capex	• New store – NOK 2.2 million per store (average of five per year) • Relocation – NOK 1.7 million per store (average of 10 per year) • Modernisation – NOK 1.2 million per store (average of 10 per year) • Category development – NOK 15 million per year • IT and maintenance – NOK 40 million per year • In addition, estimate for 2022: IT (ERP) of NOK 10 million and warehouse (automation expanded high bay area) of NOK 10 million
Rent	• Majority of contracts are CPI-adjusted • Recognised under IFRS-16 leases

Successfully investing in our stores

Store specific Capex NOK million 35 2019 2020 2021 19 26 Modernisation Relocations/expansions New stores # of new stores 6 4 4

• Around NOK 80 million invested across 59 new stores, modernisations, and relocations/expansions in 2019-2021
• Overall investments level in line with guidance
• Average payback time for new store investments around one year¹

Alternative performance measures (APMs)

APMs are used by Europris for annual and periodic financial reporting in order to provide a better understanding of the group's financial performance. The APMs are considered to be well-known and frequently utilised by users of the financial statements, and are also used in internal reporting and by management to measure operating performance.

Gross profit/gross margin Gross profit is defined as total operating income minus the cost of goods sold (COGS).It represents revenue which the group retains after incurring the direct costs associated with the purchase of the goods. Gross margin is defined as gross profit divided by total revenue and is useful for benchmarking direct costs associated with the purchase of the goods versus total revenues.	Capital expenditure Capital expenditure (Capex) is the sum of purchases of fixed assets and intangible assets as used in cash flow. Capex is a well-known and widely used term among users of the financial statements, and is a useful measure of investments made in the operations when evaluating capital intensity.
Opex Operating expenses (Opex) are the sum of employee benefit expenses and other operating expenses. Looking at the cost of these two components combined is useful since they comprise a large part of fixed operating costs. The Opex-to-sales ratio divides Opex by total operating income and is useful for benchmarking this cost base versus developments in sales.	Financial debt Financial debt is the sum of borrowings and lease liabilities. Financial debt is useful for seeing total debt as defined by the IFRS.
EBITDA/EBITDA margin EBITDA is earnings before interest, tax, depreciation of property, plant and equipment and right-of-use assets, and amortisation of other intangibles. EBITDA is a well-known and widely used term among users of the financial statements, and is useful when evaluating operational efficiency on a more variable cost basis because it excludes amortisation and depreciation expenses related to capital expenditure. EBITDA margin is EBITDA divided by total operating income and is useful for benchmarking this profitability parameter versus developments in sales.	Cash and liquidity reserves Cash and liquidity reserves are defined as available cash plus available liquidity through overdraft and credit facilities. This measure is useful for seeing total funds available in the short term.
EBIT EBIT is earnings before interest and taxes and is the same as the IFRS definition of operating profit. EBIT is a well-known and widely used term among users of the financial statements, and is useful when evaluating operational profitability. EBIT margin is EBIT divided by total operating income, and thereby the same as operating profit divided by total operating income.	Total chain sales Total chain sales are sales from all chain stores, both directly operated and franchises. This KPI is an important measure of the performance of the total Europris chain and considered useful in order to understand the development of the entire chain, regardless of the store ownership structure.
Working capital Net change in working capital is the sum of change in inventories and trade receivables and change in other receivables less the sum of change in accounts payable and other current liabilities. Net change in working capital is a well-known and widely used term among users of the financial statements and is useful for measuring the group's liquidity, operational efficiency and short-term financial condition.	Directly operated store Directly operated store means a store owned and directly operated by the group. Franchise store Franchise store means a store operated by a franchisee under a franchise agreement with the group. Chain Chain means the sum of directly operated and franchise stores. Like-for-like sales growth 99 Like-for-like growth is defined as growth in total chain sales for stores which have been open for every