Kid ASA

Earnings Release • Oct 26, 2015

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Financials for the third quarter of 2015 and update on October trading

Lier, 26 October 2015: The board of directors of Kid ASA ("Kid" or the "Company") has approved the interim financials for the third quarter of 2015. Kid intends to publish a supplementary prospectus in relation to the third quarter financials. The publication of a supplementary prospectus is expected to result in an extension of the application period and the bookbuilding period in Kid's ongoing initial public offering. A summary of the key financial information is set out below. Kid also provides an update on the revenue development so far in October.

NOK million	Q3 2015	Q3 2014	YTD 2015	YTD 2014	2014
Total revenue	288.4	295.5	756.5	736.7	1,136.1
Growth	-2.4%	3.5%	2.7%	8.2%	10.1%
Gross profit1	174.8	184.0	451.3	454.9	706.1
Gross margin (%)	60.8%	62.3%	59.7%	61.8%	62.2%
EBITDA2	45.2	61.1	62.3	91.5	186.7
Margin (%)	15.7%	20.7%	8.2%	12.4%	16.4%
EBIT3	39.7	56.2	45.3	77.6	166.8
Margin (%)	12.7%	19.0%	6.0%	10.5%	14.7%
Net income	28.2	34.2	31.9	35.7	88.2
Margin (%)	9.8%	11.6%	4.2%	7.8%	12.5%

Summary of the financial results for the third quarter of 2015

Revenue development: For the third quarter of 2015 Kid's revenues fell by 2.4% compared to the third quarter of 2014, driven primarily by the weather pattern during the summer. The second half of the year is the seasonally most important in terms of sales due to school start in August and the Christmas season in December. The revenue decline in Q3 was entirely driven by a weak August, where consumers were not visiting shopping centres due to unusually warm weather, following a cold June and July. Norwegian shopping centres reported weak trade numbers⁴ , and data from Statistics Norway showed that the Norwegian market for textiles was down 8.1% in August compared to the corresponding month in 2014. Sales in July were ahead of last year while September sales were approximately at 2014 level. The Company's online sales grew 39% compared to the same period in 2014.

Gross profit: The gross margin has been affected by the strengthening of the USD/NOK exchange rate, as approx. 90% of goods purchases are denominated in USD. In the third quarter the effects of the currency rate were still prevalent, however towards the end of the period the Company saw effects from its hedging contracts and price increases implemented during the quarter.

¹ Including effect of realised currency derivatives. Gross margin calculation excludes other operating revenue

² Excluding effect of unrealised currency derivatives

³ Excluding effect of unrealised currency derivatives

⁴ Kvarud Analyse's "Kjøpesenterindeks" (not publically available, dated August 2015) (English language "mall index")

Counteracting this was a change in the product mix, with a somewhat higher share of campaign goods sold. In the quarter, the gross margin (including realised currency derivatives) was 60.8%, down from 62.3% in Q3 2014.

Operating costs and EBITDA: The Company's management monitors operating costs closely in order to keep costs to a minimum. Despite having a higher number of stores in Q3 2015, employee expenses were slightly below the corresponding period in 2014. Other operating costs have however increased in the period due to net new store openings. In terms of total operational costs, trailing twelve months OPEX as percentage of revenue was in line with levels experienced over the last few years. EBITDA for the period ended lower than for the same quarter in 2014, mainly driven by a lower gross margin and higher operating expenses. EBITDA in the quarter was affected by IPO costs of NOK 3.3 million, and also included accruals for management incentives of NOK 2.0 million.

Net income: Net income for the quarter was positively affected by NOK 0.6 million lower interest expenses given decreased margins on long-term debt and NOK 25 million lower debt compared to last year. Net income was also positively affected by unrealized gains on currency derivatives of NOK 7.1 million in Q3 2015, compared to a negative unrealized loss in Q3 2014 of NOK -2.8 million. Net financial expense also includes interest costs and fair value adjustments related to an interest swap that will be terminated in conjunction with the IPO. The fair value adjustment increased financial expenses by NOK 1.3 million in Q3 2015, compared to a positive adjustment last year decreasing financial expenses by NOK - 1.5 million. The interest cost related to the SWAP was NOK 2.3 million in Q3 2015 compared to NOK 1.6 million in Q3 2014.

Development in October 2015

Revenue development has been positive in October. For the period 1 October to 25 October of 2015 revenue was 9.9% higher than for the corresponding period in 2014. The increase in revenue has been driven by like-for-like sales growth of 2.6% as well as contribution from the nine new stores opened since October 2014. Two of these new stores have been opened in October 2015.

Enquiries

Kjersti Hobøl, CEO Kid,	+47 918 35 965
Petter Schouw-Hansen, CFO Kid,	+47 482 24 534

About Kid ASA

Kid is the leading and most profitable retailer in the Norwegian home textile market, typified by products like duvets, pillows, curtains, bed linens and other accessories and decorating items. As of 30 September 2015, Kid operated a total of 128 wholly-owned stores in Norway, in addition to an established e-commerce platform. Kid traces its history back to 1937, and has since the 1950s renewed Norwegian homes by offering attractive and practical curtains, bed linens and other interior articles. Kid is among the known brands within retail in Norway, with 97% of Norwegian women being familiar with the Company⁵ . Kid has approximately 900 employees with headquarters in new

⁵ Opinion brand research March 2015, among women aged 20+

and modern facilities in Lier, Norway. Kid is a wholly-owned subsidiary of Gjelsten Holding. For more information visit www.kid.no

Important Notice

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company.

Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Hong Kong, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

Any offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is not a prospectus for the purposes of Directive 2003/71/EC (as amended, together with any applicable implementing measures in any Member State, the "Prospectus Directive"). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in a prospectus.

In any EEA Member State that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forwardlooking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in public sector investment levels, changes in the general economic, political and market conditions in the Norwegian market, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward‐looking statements in this presentation are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or any obligation to update or revise the statements in this presentation to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward‐looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.