Kid ASA — Earnings Release 2016

Feb 13, 2017

Dear Shareholders

As we enter 2017 – which marks the company's 80th anniversary – we are proud to present the results of the final quarter of 2016 for Kid ASA, as well as results for the full year. Q4 is always an important period for Kid. Through improvements in assortments and strong promotions, we succeeded in increasing revenues during the quarter by 11.7% and bringing our adjusted EBITDA for the fiscal year of 2016 above MNOK 200. Our performace in 2016 resulted in healthy earnings growth, which enables the board to propose a dividend of NOK 2,00 per share to the annual general meeting to be held in May 2017.

Our main focus remains the same: Continue growth-enhancing strategic and operational initiatives in accordance with our business plan. Key take-aways from the fourth quarter are:

• We continued to test and introduce new products, including a line of coffee and tea launched before Christmas.
• Launch of an exclusive Marcus and Martinus collection before Christmas, which received very good market response. We experienced strong revenues for the collection through our online store, and the collection was an important driver of customer traffic to our physical stores.

• Until a few years ago, Black Friday was a tradition exclusive to North America, but Norwegian retailers now embrace this opportunity and customers are responding favourably. For Kid, Black Friday was an even bigger trading day in 2016 than in 2015 as we recorded our highest daily turnover ever. However, this was somewhat offset by lower sales during the following week.

• Our customer club, started in 2015, consisted of over 620,000 individual members by year-end. The customer club newsletters are becoming an increasingly valuable channel of communication which creates immediate traffic to both our stores and online site.

• Each October the breast cancer awareness campaign Pink Ribbon is undertaken throughout Norway. As one of the campaign's main sponsors in Norway, Kid Interior sold a variety of Pink Ribbon products and pins in our stores during the month. We are proud to have raised and contributed MNOK 2.8 this year - a significant increase compared to 2015.

In an eventful year, both political and macro-economic, we have continued to focus on improving our retail offering through new stores and refurbishments, better customer service and interaction, improved assortments and an efficient online presence. We are satisfied with our performance in 2016 and I am confident that we will be able to build an even stronger Kid going forward.

Yours sincerely,

Kjersti Hobøl CEO

Fourth quarter and 2016 in brief

(Figures from corresponding period the previous year in brackets)

• Revenues of MNOK 483.8 (MNOK 433.1) in Q4 2016, an increase of 11.7%. For the full year, revenues amounted to MNOK 1293,9 (MNOK 1188,4), up 8.9% from 2015. The number of shopping days in the quarter was 78 (77), and for the full year the number of shopping days was 306 (304).
• Kid continued to gain market share. The sale of home textiles in Q4 2016 in specialised stores in Norway increased by 6.6%, according to Statistics Norway. For the full year 2016, the corresponding figure was 3.6%.
• Positive impact of early Easter, especially when comparing with last year's low traffic Like-for-like (LFL) sales increased by +8.9% in the quarter and +5.9% for the full year compared to the same periods in 2015.
• number due to the winter Olympics [Two] net new store openings, [X] store refurbishments and [x] store relocations Gross margin of 59.7% (59.3%) in Q4 and 60.2% (58.6%) for the full year. Kid ASA has early adopted hedge accounting in accordance with IFRS9 from 1.1.2015. A more detailed description is provided in the Financial Review and in the Financial Statements.
• EBITDA of NOK 11.2 million (NOK 8.9 million), up 26.3% [Accounting effects] Adjusted EBITDA of MNOK 118.3 (MNOK 95.0) in Q4. For the full year, adjusted EBITDA was MNOK 201.1 (MNOK 153.2), an increase of 31.3%.
• Adjusted EPS increased to NOK 2.94 (1.98) per share in 2016. The board of directors will propose a dividend of NOK 2,00 per share to the general annual meeting to be held on May 11th 2017.
• A new store opened in AMFI Drøbak. The stores at Sjøkanten (Harstad), Kongsenteret (Kongsvinger) and Tveita (Oslo) were relocated. The total number of physical stores at the end of the quarter was 134 (130).

Key figures

Kid ASA has early adopted hedge accounting in accordance with IFRS9 from 1.1.2015. All references to historical financial figures are based on IFRS 9 in this report. A more detailed description is provided in the Financial Review and in the Financial Statements.

			Full year	Full year
(Amounts in NOK million)	Q4 2016	Q4 2015	2016	2015
Revenues	483,8	433,1	1293,9	1188,4
Growth	11,7%	8,5%	8,9%	4,6%
LFL growth including online sales	8,9%	4,0%	5,9%	-0,4%
No. of shopping days in period	78	77	306	304
No. of physical stores at period end	134	130	134	130
COGS including realized FX-effects	-195,0	-176,5	-515,3	-492,0
Gross profit	288,8	256,6	778,6	696,4
Gross margin (%)	59,7%	59,3%	60,2%	58,6%
Adj. EBITDA*	118,3	95,0	201,1	153,2
EBITDA margin (%)	24,5%	21,9%	15,5%	12,9%
Adj. EBIT*	110,4	87,5	172,1	128,7
EBIT margin (%)	22,8%	20,2%	13,3%	10,8%
Adj. Net Income*	80,5	60,7	119,5	80,4
#shares at period end	40,6	40,6	40,6	40,6
Adj. Earnings per share	1,98	1,49	2,94	1,98
Net interest bearing debt	234,7	295,4	234,7	295,4

*Adjusted for non-recurring items, financial costs related to interest SWAP, "other unrealized (losses)/gains" and change in deferred tax caused by lower tax rate.

Adjusted EBIT margin Number of physical stores (period end)

Financial review

The figures reported in the Q4 report have not been subject to a review by the Group's auditor PwC, and the preparation has required management to make accounting judgements and estimates that impact the figures. Figures from corresponding period the previous year are in brackets, unless otherwise specified.

Profit and loss

Revenues in the fourth quarter of 2016 amounted to MNOK 483.8 (MNOK 433.1), an increase of 11.7% compared to the fourth quarter of 2015 (8.5%).

For the fiscal year of 2016, revenues amounted to MNOK 1 293.9 (MNOK 1 188.4), an increase of 8.9% compared to the fiscal year of 2015. The key drivers for the revenue increase are strong like-for-like growth in Q2-Q4 and new store openings.

Online sales grew by 64.5% in the fourth quarter of 2016 compared to the fourth quarter of 2015. Last twelve months online revenues were MNOK 32.0 as of December 31 2016 - a growth of 57.2% from the corresponding period last year.

During the fourth quarter of 2016, a new storeopened in Amfi Drøbak. The stores at Sjøkanten (Harstad), Kongsenteret (Kongsvinger) and Tveita (Oslo) were relocated. The total number of physical stores at the end of the quarter was 134.

Gross margin was 59.7% (59.3%) for the quarter, and 60.2% (58.6%) for the fiscal year of 2016.

Kid ASA has early adopted the IFRS 9 standard and hedge accounting in the fourth quarter of 2016 after its endorsement by the European Union in November 2016. The standard has been applied retrospectively with initial application from 1 January 2015. All references to historical financial figures are based on IFRS 9 in this report.

Gross margin (hedge accounting):

Kid ASA hedge 100% of the USDNOK goods purchases approximately 6 months ahead by entering into foreign exchange contracts. Hedge accounting in accordance with IFRS 9 allows the currency gain/loss to be measured and recognised in the same period as the relevant goods are sold, and hence better reflect the hedging strategy.

When adopting the standard retrospectively, a combination of old and new principles are applied in the transition period. E.g, goods purchased before 1.1.2015 are measured using spot rates, and goods purchased after this date are measured using hedged rates. The transition period ended 31.3.2016 from which point the financial figures are entirely based on IFRS9.

Kid ASA have historically tracked the gross margin development internally by using hedge accounting in accordance with NGAAP. This alternative measure of gross margin has not been subject to a

conversion between IFRS standards and therefore provides a more consistent measure of historical development. The below table shows these historical figures based on NGAAP:

Gross margin NGAAP	2015	2016
(internal hedge accounting)
Q1	58.2%	59.3%
Q2	59.7%	61.5%
Q3	60.4%	61.1%
Q4	59.8%	59.7%
Fiscal year	59.6%	60.4%

Operating expenses, including employee benefit expenses, were MNOK 170.5 (MNOK 161.8) in the fourth quarter, up 5.4% from Q4 2015. Other operating expenses included non-recurring adjustments of MNOK 2.1 for the fourth quarter of 2015 related to the IPO process. For the fiscal year of 2016, operating expenses including employee benefits amounted to MNOK 579.2 (MNOK 544.6). Adjustments of MNOK 9.5 was made for the fiscal year of 2015 and were related to the IPO process and the relocation of the warehouse and headquarters to new premises in Lier.

Employee expenses increased by 4.4% to MNOK 88.5 (MNOK 84.8) in the fourth quarter, which was due to the following;

• 1.9 percentage points increase was related to net new stores
• 5.9 percentage points increase was related to general salary inflation and increased staffing level due to higher sales
• 4.2 percentage points increase was related to bonuses to stores and HQ employees driven by strong financial performance in the quarter
• 7.6 percentage points decrease was due to changes in management incentive program from 1.1.2016

Other operating expenses have increased by 6.5% in the quarter to MNOK 82.0 (MNOK 77.0). The main reason for the increase was house rental costs, driven by new stores and general inflation. Of the 6.5% increase, new stores account for 2.1 percentage points and other rental cost accounted for 3.2 percentage points. Other operating expenses except rental costs accounted for the remaining cost increase of 1.2 percentage points.

Adjusted EBITDA amounted to MNOK 118.3 (MNOK 95.0) in the fourth quarter, an increase of 24.6%. This represents an EBITDA margin of 24.5% (21.9%). The EBITDA increase is due to strong like-for-like growth, increased gross margins and a reduction of OPEX-to-sales by 2.1 percentage points.

Adjusted EBITDA for the fiscal year of 2016 came in at MNOK 201.1 (MNOK 153.2), an increase of 31.3%. The EBITDA margin for the the fiscal year was 15.5% (12.9%).

Adjusted EBIT amounted to MNOK 110.4 (MNOK 87.5) in the fourth quarter, an increase of 26.2%. This represents an EBIT margin of 22.8% (20.2%). EBIT was affected by increased depreciation due to last year's CAPEX levels.

Adjusted EBIT for the fiscal year of 2016 was MNOK 172.1 (MNOK 128.7), up 33.7% from 2015 and corresponding to an EBIT margin of 13.3% (10.8%).

Adjusted net financial expenses amounted to MNOK 3.1 (MNOK 4.1) in the fourth quarter. Net financial expenses are adjusted for expenses and fair value adjustments related to a swap contract of MNOK 0.2 in the fourth quarter of 2015. The swap contract was terminated on November 3 rd 2015.

Adjusted EBITDA

Adjusted net financial expenses were positively affected by lower long-term debt.

Adjusted net financial expenses for the fiscal year of 2016 were MNOK 12.7 (MNOK 18.4). The total adjustment in relation to the swap contract was MNOK 1.8 in the fiscal year of 2015.

Adjusted net income amounted to MNOK 80.6 (MNOK 60.7) in the fourth quarter. Adjusted net income for the fiscal year was MNOK 119.5 (MNOK 80.4). Net income is adjusted for a change in deferred tax related to trademark of MNOK -14.6 caused by the reduced tax rate from 25% to 24% with effect from 1.1.2017.

A complete adjustments overview is provided in the following table:

Adjustments overview (MNOK)	Q4 2016	Q4 2015	FY 2016	FY 2015
Cost of relocation to new warehouse				3,7
Cost related to IPO		2,1		5,8
EBITDA adjustments	0,0	2,1	0,0	9,5
SWAP		0,1		1,8
Profit adjustments before tax	0,0	2,2	0,0	11,3
Deferred tax effect of lower tax	-14,6	-29,2	-14,6	-29,2
Tax effect of profit adjustments		-0,6		-3,0
Net profit (loss) adjustments	-14,6	-27,6	-14,6	-20,9

Events after the end of the reporting period

The Board of Directors proposes a dividend of NOK 2.00 per share for 2016, representing 68% of preliminary adjusted net income for 2016. The dividend is within the policy of 60-70% of adjusted net profit.

Furthermore, the board of directors will propose to the general annual meeting that dividends are paid out two times per year going forward, presumably in May and November, effective from November 2017.

Lier, 13th February 2017

Interim Report Q4 2016 Kid ASA

Kid ASA Q4 2016

Financial statements

Interim condensed consolidated statement of profit and loss

(Amounts in NOK thousand)	Note	Q4 2016	Q4 2015	Full year 2016	Full year 2015
		Unaudited	Unaudited (restated)	Unaudited	Unaudited (restated)
Revenue		483 835	433 115	1 293 932	1 188 433
Other operating revenue		32	114	1 604	1 294
Total revenue		483 868	433 229	1 295 536	1 189 726
Cost of goods sold	10	195 007	176 488	515 299	492 005
Employee benefits expense		88 525	84 791	289 547	271 342
Depreciation and amortisation expenses	9	7 950	7 470	28 953	24 447
Other operating expenses		81 992	79 043	289 627	282 690
Total operating expenses		373 473	347 793	1 123 426	1 070 484
Other realized (losses)/gains- net	10	0	0	0	0
Other unrealized (losses)/gains- net	10	0	0	0	0
Operating profit		110 394	85 436	172 110	119 243
Other financial income		478	94	1 008	471
Other financial expense		3 547	5 219	13 678	26 225
Changes in fair value of financial assets		0	836	0	5 537
Net financial income (+) / expense (-)		-3 070	-4 289	-12 670	-20 217
Profit before tax		107 325	81 147	159 440	99 026
Income tax expense	10	12 276	-7 149	25 413	-2 308
Net profit (loss) for the period		95 048	88 296	134 027	101 333
Interim condensed consolidated statement of comprehensive
income
Profit for the period		95 048	88 296	134 027	101 333
Other comprehensive income	10	14 574	14 277	-212	47 794
Tax on comprehensive income	10	-3 560	-3 440	137	-12 490
Total comprehensive income for the period		106 063	99 133	133 952	136 637
Attributable to equity holders of the parent		106 063	99 133	133 952	136 637
Basic and diluted Earnings per share (EPS):	10	2,64	2,56	3,30	3,27

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

Interim condensed consolidated statement of financial position

(Amounts in NOK thousand)	Note	31.12.2016	31.12.2015	01.01.2015
		Unaudited	Unaudited	Unaudited
Assets			(restated)	(restated)
Trademark	9	1 463 023	1 459 585	1 459 585
Total intangible assets		1 463 023	1 459 585	1 459 585
Fixtures and fittings, tools, office machinery and equipment	9	88 492	86 081	69 890
Total tangible assets		88 492	86 081	69 890
Total fixed assets		1 551 515	1 545 666	1 529 475
Inventories	10	222 190	204 315	201 053
Trade receivables	6	2 527	2 996	1 844
Other receivables	6	26 435	23 322	11 169
Derivatives	6	8 372	14 206	0
Totalt receivables		37 334	40 524	13 013
Cash and bank deposits		291 852	230 373	99 070
Total currents assets		551 376	475 212	313 136
Total assets		2 102 891	2 020 878	1 842 611

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

Interim condensed consolidated statement of financial position

(Amounts in NOK thousand)	Note	31.12.2016	31.12.2015 Unaudited	01.01.2015 Unaudited
Equity and liabilities		Unaudited	(restated)	(restated)
Share capital		48 774	48 774	42 000
Share premium		321 049	321 049	156 874
Other paid-in-equity		64 617	64 617	37 718
Total paid-in-equity		434 440	434 440	236 592
Other equity	10	567 852	503 972	406 090
Total equity		1 002 292	938 411	642 683
Pensions liabilities		0	0	15
Deferred tax	10	350 349	368 956	389 084
Total provisions		350 349	368 956	389 099
Liabilities to financial institutions		526 544	525 761	556 343
Derivatives		0	0	25 892
Total long-term liabilities		526 544	525 761	582 235
Liabilities to financial institutions		0	0	45 000
Trade creditors	10	40 626	36 636	22 255
Tax payable		40 849	21 739	34 205
Public duties payable		80 729	69 634	62 186
Other short-term liabilities		61 502	59 740	64 950
Total short-term liabilities		223 706	187 749	228 595
Total liabilities		1 100 600	1 082 467	1 199 929
Total equity and liabilities	10	2 102 891	2 020 878	1 842 611

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

Interim condensed consolidated statement of changes in equity

(Amounts in NOK thousand)	Note	Total paid- in equity	Other equity	Total equity
		Unaudited	Unaudited	Unaudited
Balance at 1 January 2015 (restated)		236 593	406 090	642 682
Profit for the period YTD 2015 (restated)		0	136 637	136 637
Contributions of equity, net of transaction costs		170 949		170 949
Transfer from Cash Flow Hedge Reserve			-26 192	-26 192
Tax effect of transfer from Cash Flow Hedge Reserve			7 072	7 072
Group contribution to/from parent company		26 898	-19 636	7 262
Balance as at 31 December 2015 (restated)	10	434 440	503 971	938 411
Balance at 1 January 2016		434 440	503 971	938 411
Profit for the period YTD 2016		0	133 952	133 952
Transfer from Cash Flow Hedge Reserve			-12 139	-12 139
Tax effect of transfer from Cash Flow Hedge Reserve			3 035	3 035
Dividend payment		0	-60 968	-60 968
Group contribution to/from parent company		0	0	0

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

Interim condensed consolidated statement of cash flows

(Amounts in NOK thousand)	Note	Q4 2016	Q4 2015	Full year 2016	Full year 2015
		Unaudited	Unaudited (restated)	Unaudited	Unaudited (restated)
Cash flow from operations
Profit before income taxes	10	107 325	81 147	159 440	99 026
Taxes paid in the period		1 374	-8 743	-21 739	-26 942
Gain/loss from sale of fixed assets		0	0	0	0
Depreciation & impairment	9	7 950	7 470	28 953	24 447
Change in financial derivatives	10	0	-836	0	-5 537
Differences in expensed pensions and payments in/out of
the pension scheme		0	-9	0	-15
Effect of exchange fluctuations	10	0	0	0	0
Items classified as investments or financing		3 070	5 125	12 670	25 754
Non-cash effect from currency hedging	10	634	2866	-7901	-3787
Change in working capital
Change in inventory	10	77 138	93 829	-17 875	-3 262
Change in trade debtors		-692	-1 060	469	-1 152
Change in trade creditors	10	1 178	6 781	3 990	15 251
Change in other provisions*		46 152	45 035	9 779	-6 213
Net cash flow from operations		244 128	231 605	167 786	128 643
Cash flow from investments
Net proceeds from investment activities		0	0	0	0
Purchase of fixed assets	9	-8 412	-9 316	-34 803	-40 638
Net cash flow from investments		-8 412	-9 316	-34 803	-40 638
Cash flow from financing
Change in debt		1 220	-164 361	783	-95 937
Net interest		-2 819	-8 180	-12 705	-29 456
Dividend payment		0	0	-60 968	0
Net proceeds from shares issued		0	169 451	0	169 451
Net cash flow from financing		-1 599	-3 090	-72 889	44 058
Cash and cash equivalents at the beginning of the period		57 717	11 316	230 373	99 070
Net change in cash and cash equivalents	10	234 117	219 199	60 094	132 064
Exchange gains / (losses) on cash and cash equivalents	10	17	-142	1 384	-761
Cash and cash equivalents at the end of the period		291 852	230 373	291 852	230 373

*Change in other provisions includes other receivables, public duties payable and other short-term liabilities.

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

Note 1 Corporate information

Kid ASA and its subsidiaries` (together the "company" or the "Group") operating activities are related to the resale of home textiles on the Norwegian market.

All amounts in the interim financial statements are presented in NOK 1 000 unless otherwise stated.

Due to rounding, there may be differences in the summation columns.

Note 2 Basis of preparations

These condensed interim financial statements for the three and twelve months ended 31 December 2016 have been prepared in accordance with IAS 34, 'Interim financial reporting'. The condensed interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2015, which have been prepared in acccordance with IFRS as adopted by the European Union ('IFRS').

Note 3 Accounting policies

The accounting policies applied in the preparation of the condensed consolidated interim financial statements are consistent with those applied in the preparation of the annual IFRS financial statements for the year ended 31 December 2015, with the exception of IFRS 9 that has been early adopted as 0f 01 01 2015. EU endorsed IFRS 9 before year end 2016 and KID has have chosen to early adopt this standard. See note 10 in this quarterly report for implementation effects.

Amendments to IFRSs effective for the financial year ending 31 December 2016 are assessed not to have a material impact on the group.

The Preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed interim financial statements the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 December 2015, with the exception of IFRS 9. KID has chosen to use hedge accounting based on IFRS 9 requirements for the groups hedging of USDNOK exposure connected to highly probable future purchase of goods in USD and sale in the Norwegian market in NOK. The old accounting principle according to IAS 39 was not to use hedge accounting and to book the fair value change of currency derivatives to the profit & loss.

Monitoring of hedge effectiveness (based on chosen hedge policy) requires judgement in order to identify any in-effectiveness

Note 5 Segment information

The Group sells home textiles in 134 fully owned stores across Norway and through the Group's online website. Over 97% of the products are sold under own brands. The Group's aggregate online sales are approximately equal to the sales of two physical store and it is therefore not considered as a separate segment. The Norwegian market is not divided into separate geographical regions with distinctive characteristics and Kid's operations cannot naturally be split in further segments.

Note 6 Financial instruments

interest rate risk and price risk), credit risk and liquidity risk.

The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group's annual financial statements as at 31 December 2015. There have been no changes in any risk management policies since previous year end.

Set out below is a comparison of the carrying amounts and fair values of financial assets and liabilities as at 31 December 2016 and 31 December 2015.

As mentioned above the group has implemented IFRS 9 as of 01 01 2015 and the table below is now based on IFRS 9 requirements. Trade receivables and cash are held at cost. There is no credit risk associated with trade receivables. Borrowing is held at amortized cost.

(Amounts in NOK thousand)	31 Dec 2016		31 Dec 2015
Financial assets	Carrying amount	Fair value	Carrying amount	Fair value
Trade and other receivables excluding pre-payments	4 827	4 827	5 075	5 075
Cash and cash equivalents	291 852	291 852	230 373	230 373
Total	296 678	296 678	234 979	234 979
Financial liabilities
Borrowings (excluding finance lease liabilities)	525 000	525 000	525 000	525 000
Finance lease liabilities	1 544	1 544	761	761
Trade and other payables excluding non-financial liabilities	121 355	121 355	41 601	41 601
Total	647 899	647 899	569 204	569 204

Financial instruments measured at fair value through profit and loss			31 Dec 2016			31 Dec 2015
	Carrying		Carrying
Derivatives – asset	amount	Fair value	amount	Fair value
Foreign exchange forward contracts – hedging instruments	8 372	8 372	14 206	14 206
Total	8 372	8 372	14 206	14 206
Derivatives – liabilities
Foreign exchange forward contracts	0	0	0	0
Total	0	0	0	0

Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole, as follows:

Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

There were no transfers between Levels or changes in valuation techniques during the period. All of the Group's financial instruments that are measured at fair value are classified as level 2.

Level 2 trading and hedging derivatives comprise forward foreign exchange contracts. These forward foreign exchange contracts have been fair valued using forward exchange rates that are quoted in an active market. The effects of discounting are generally insignificant for Level 2 derivatives.

Note 7 Earnings per share

	Note	Q4 2016 restated	Q4 2015 restated	Full year 2016 restated	Full year 2015 restated
Weighted number of ordinary shares Net profit or loss for the year		40 645 162 95 048	38 763 441 88 296	40 645 162 134 027	35 940 860 101 333
Earnings per share (basic and diluted) (Expressed in NOK per share)	10	2,34	2,28	3,30	2,82

Note 8 Related party transactions

The Group's related parties include it associates, key management, members of the board and majority shareholders.

None of the Board members have been granted loans or guarantees in the current year. Furthermore, none of the Board members are included in the Group's pension or bonus plans.

The following table provides the total amount of transactions that have been entered into with related parties during the twelve months ended 31 December 2015 and 2014:

Lease agreements:	2016	2015
Vågsgaten Handel AS with subsidiaries (Store rental)	1 222	1 052
Bekkestua Eiendomsutvikling AS (Store rental)	545
Mortensrud Næring AS (Store rental)	572
Gilhus Invest AS (Headquarter rental)	12 939	7 465
Total	15 277	8 517

Note 9 Fixed assets and intangible assets

(amounts in NOK million)	PPE	Trademark
Balance 01.01.2015	69,9	1459,6
Additions	40,6
Disposals and write downs	0,0
Depreciation and amortisation	-24,4
Balance 31.12.2015	86,1	1459,6

(amounts in NOK million)	PPE	Trademark
Balance 01.01.2016	86,1	1459,6
Additions	30,7	4,1
Disposals and write downs	0,0
Depreciation and amortisation	-28,3	-0,7
Balance 31.12.2016	88,5	1463,0

Note 10 Adoption of IFRS9

The EU approved IFRS 9 on 29 November 2016. Kid ASA has chosen 1 January 2015 as the date of initial application for the adoption of IFRS 9.

All financial assets and liabilities, except derivatives, continue to be at amortized cost measured under IFRS9.

The transition is a change in accounting policy, and disclosures required by IAS 8 are IFRS 7 are included in this Q4 report.

The group adopts the general expected credit loss model for loans to customers, debt investments carried at amortised cost and debt investments carried at fair value through other comprehensive income.

The group has adopted the simplified expected credit loss model for trade receivables, as permitted by IFRS 9, paragraph 5.5.15.

The group has never applied hedge accounting for forward contracts under IAS 39 Financial Instruments: Recognition and Measurement in prior periods. Kid ASA elects to apply hedge accounting upon adoption of IFRS 9 for currency exposure of future purchase of goods in USD.

There was no inventory on hand at 31 December 2014 for which hedge accounting had been applied so there is no implementation effect as of implementation 01 01 2015.

Consolidated statement of restated profit and loss Q4 2015 and full year 2015

					Full year
(Amounts in NOK thousand)		Q4 2015			2015
	Previously reported	Adjustments	Restated (unaudited)	Previously reported	Adjustments	Restated (unaudited)
Revenue	433 115		433 115	1 188 433		1 188 433
Other operating revenue	114		114	1 294		1 294
Total revenue	433 229	0	433 229	1 189 726		1 189 726
Cost of goods sold	179 709	-3 221	176 488	498 267	-6 261	492 005
Employee benefits expence	84 791		84 791	271 342		271 342
Depreciation and amortisation expenses	7 470		7 470	24 447		24 447
Other operating expenses	79 043		79 043	282 690		282 690
Total operating expenses	351 014		347 793	1 076 745		1 070 484
Other realized (losses)/gains- net	7 895	-7 895	0	22 405	-22 405	0
Other unrealized (losses)/gains- net	-144	-144	0	14 206	-14 206	0
Operating profit	89 965		85 435	149 592		119 243
Other financial income	94		94	471		471
Other financial expense	5 219		5 219	26 225		26 225
Changes in fair value of financial assets	836		836	5 537		5 537
Net financial income (+) / expense (-)	4 289		4 289	-20 217		-20 217
Profit before tax	85 676		81 147	129 375		99 026
Income tax expense	-6 516	-633	-7 149	5 297	-7 605	-2 308
Net profit (loss) for the period	92 192		88 296	124 078		101 333
Interim condensed consolidated statement of comprehensive income
Profit for the period	92 192	-3 896	88 296	124 078	-22 745	101 333
Other comprehensive income	0	14 277	14 277	0	47 794	47 794
Tax on comprehensive income	0	-3 440	-3 440	0	-12 490	-12 490
Total comprehensive income for the period	92 192		99 133	124 078		136 637
Attributable to equity holders of the parent	92 192		99 133	124 078		136 637
Basic and diluted Earnings per share (EPS):	2,38		2,28	3,45		2,82

Consolidated statement of financial position per 1 January and 31 December 2015

		01.01.2015		Full year 2015
(Amounts in NOK thousand)	Previously reported	Adjustments	Restated (unaudited)	Previously reported	Adjustments	Restated (unaudited)
Assets
Trademark	1 459 585		1 459 585	1 459 585		1 459 585
Total intangible assets	1 459 585		1 459 585	1 459 585		1 459 585
Fixtures and fittings, tools, office
machinery and equipment	69 890		69 890	86 081		86 081
Total tangible assets	69 890		69 890	86 081		86 081
Total fixed assets	1 529 475		1 529 475	1 545 666		1 545 666
Inventories	201 053		201 053	215 211	-10 896	204 315
Trade receivables	1 844		1 844	2 996		2 996
Other receivables	11 169		11 169	23 322		23 322
Derivatives	0		0	14 206		14 206
Totalt receivables	13 012		13 012	40 523		40 523
Cash and bank deposits	99 070		99 070	230 373		230 373
Total currents assets	313 134		313 134	486 106		475 210
Total assets	1 842 612		1 842 612	2 031 774		2 020 878
Equity and liabilities
Share Capital	42 000		42 000	48 774		48 774
Share Premium	156 874		156 874	321 049		321 049
Other paid-in-equity	37 718		37 718	64 617		64 617
Total paid-in-equity	236 592		236 592	434 440		434 440
Other reserves - OCI	0		0	0		0
Other equity	406 090		406 090	510 532	-6 560	503 972
Total equity	642 683		642 683	944 973		938 411
Pension liabilities	15		15	0		0
Deferred tax	389 084		389 084	371 143	-2 187	368 956
Total provisions	389 099		389 099	371 143		368 956
Liabilities to financial institutions	555 496		555 496	525 761		525 761
Derivatives	25 892		25 892	0		0
Total long-term liabilities	581 388		581 388	525 761		525 761
Liabilities to financial institutions	45 000		45 000	0		0
Trade payables	22 255		22 255	38 785	-2 149	36 636
Tax payable	34 205		34 205	21 739		21 739
Public duties payable	62 186		62 186	69 634		69 634
Other short-term liabilities	65 798		65 798	59 740		59 740
Total short term liabilities	229 443		229 443	189 898		187 749
Total liabilities	1 199 930		1 199 930	1 086 802		1 082 467
Total equity and liabilities	1 842 612		1 842 612	2 031 774		2 020 878

Consolidated statement of changes in equity per 1 January 2015 and 31 December 2015

	As at 1 January 2015 (unaudited)
(Amounts in NOK thousand)	Share capital	Share premium	Other paid -in equity	Other reserves	Retained earnings	Total equity
Balance at 1 January 2015, as previously reported	42 000	156 874	37 719	0	406 090	642 683
Impact of IFRS 9 adoption	0	0	0	0	0	0
Restated balance at 1 January 2015	42 000	156 874	37 719	0	406 090	642 683
Profit for the year						0
Other comprehensive income for the year						0
Total comprehensive income for the year	0	0	0	0	0	0
Group contribution from parent company	0	0	0	0	0	0
Contributions of equity, net of transaction costs	0	0	0	0	0	0
Dividends	0	0	0	0	0	0
Total contributions by and distributions to owners of
the parent, recognised directly in equity	0	0	0	0	0	0
Restated balance as at 1 January 2015	42 000	156 874	37 719	0	406 090	642 683

	As at 31 December 2015 (unaudited)
(Amounts in NOK thousand)	Share capital	Share premium	Other paid -in equity	Other reserves	Retained earnings	Total equity
Balance at 1 January 2015, as previously reported	42 000	156 874	37 719	0	406 090	642 683
Restated balance at 1 January 2015	42 000	156 874	37 719	0	406 090	642 683
Profit for the year					101 333	101 333
Other comprehensive income for the year					35 304	35 304
Total comprehensive income for the year	0	0	0	0	136 637	136 637
Transfer from Cash Flow Hedge Reserve					-26 192	-26 192
Tax effect of transfer from Cash Flow Hedge Reserve	0	0	0	0	7 072	7 072
Group contribution from parent company	0	0	26 899	0	-19 636	7 263
Contributions of equity, net of transaction costs	6 774	164 175	0	0	0	170 949
Dividends	0	0	0	0	0	0
Total contributions by and distributions to owners of the
parent, recognised directly in equity	6 774	164 175	26 899	0	-38 756	159 092
Restated balance as at 31 December 2015	48 774	321 049	64 617	0	503 971	938 411

Earnings per share full year 2015

There exists only one class of shares.

	Q4 2015
	Previously reported	Adjustments	Restated (unaudited)
Weighted average number of shares Net profit for the period	38 763 441 92 192	0 -3 896	38 763 441 88 296
Earnings per share (basic and diluted) (Expressed in NOK per share)	2,38		2,28

	Full year 2015
	Previously reported	Adjustments	Restated (unaudited)
Weighted average number of shares	35 940 860	0	35 940 860
Net profit for the year	124 078	-22 744	101 333
Earnings per share (basic and diluted) (Expressed in NOK per share)	3,45		2,82

Consolidated statement of cash flows Q4 2015 and full year 2015

(Amounts in NOK thousand)	Q4 2015			Full year 2015
	Previously	Adjustments	Restated	Previously	Adjustments	Restated
	reported		(unaudited)	reported		(unaudited)
Cash flow from operations
Profit before income taxes	85 676	-4 529	81 147	129 375	-30 349	99 026
Taxes paid in the period	-8 743		-8 743	-26 942	0	-26 942
Gain/loss from sale of fixed assets	0		0	0	0	0
Depreciation & impairment	7 470		7 470	24 447	0	24 447
Change in financial derivatives	-692	-144	-836	-19 743	14 206	-5 537
Differences in expensed pensions and
payments in/out of the pension scheme	-9		-9	-15	0	-15
Effect of exchange fluctuations	142	-142	0	761	-761	0
Items classified as investments or financing	5 125		5 125	25 754	0	25 754
Non-cash effect from currency hedging	0	2 866	2 866	0	7 287	7 287
Change in net working capital			0			0
Change in inventory	89 731	4 098	93 829	-23 282	20 020	-3 262
Change in trade debtors	-1 060		-1 060	-1 152		-1 152
Change in trade creditors	8 930	-2 149	6 781	25 654	-10 403	15 251
Change in other provisions	45 035	0	45 035	-6 213	0	-6 213
Net cash flow from operations	231 604	0	231 605	128 644	0	128 643
Cash flow from investments
Net proceeds from investment activities	0	0	0	0	0	0
Purchase of fixed assets	-9 316	0	-9 316	-40 638	0	-40 638
Net cash flow from investments	-9 316	0	-9 316	-40 638	0	-40 638
Cash flow from financing
Change in debt	-164 361	0	-164 361	-95 937	0	-95 937
Net interest	-8 180	0	-8 180	-29 456	0	-29 456
Net proceeds from shares issued	169 451	0	169 451	169 451	0	169 451
Net cash flow from financing	-3 090	0	-3 090	44 058	0	44 058
Cash and cash equivalents at the beginning of
the period	11 316	0	11 316	99 070	0	99 070
Net change in cash and cash equivalents	219 199	0	219 199	132 064	0	132 064
Exchange gains / (losses) on cash and cash
equivalents	-142	0	-142	-761	0	-761
Cash and cash equivalents at the end of the
period	230 373	0	230 373	230 373	0	230 373

Consolidated statement of restated profit and loss from Q1 2015 - Q4 2016

(Amounts in NOK thousand)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016
Revenue	231 928	235 758	287 631	433 115	230 554	265 468	314 074	483 835
Other operating revenue	379	27	773	114	34	9	1 529	32
Total revenue	232 308	235 785	288 405	433 229	230 589	265 477	315 603	483 868
Cost of goods sold	101 043	97 933	116 540	176 488	96 094	102 158	122 039	195 007
Employee benefits expence	63 662	61 487	61 401	84 791	67 936	66 331	66 755	88 525
Depreciation and amortisation expenses	5 612	5 782	5 582	7 470	6 725	6 833	7 444	7 950
Other operating expenses	61 967	72 729	68 951	79 043	66 488	72 464	68 684	81 992
Total operating expenses	232 286	237 932	252 474	347 793	237 244	247 786	264 922	373 473
Operating profit	22	-2 147	35 931	85 436	-6 655	17 691	50 680	110 394
Other financial income	110	173	95	94	174	224	132	478
Other financial expense	7 040	7 059	6 907	5 219	3 458	3 371	3 302	3 547
Changes in fair value of financial assets	3 008	2 995	-1 302	836	0	0	0	0
Net financial income (+) / expense (-)	-3 922	-3 892	-8 114	-4 289	-3 284	-3 147	-3 170	-3 070
Profit before tax	-3 900	-6 039	27 817	81 147	-9 939	14 544	47 511	107 325
Income tax expense	-1 055	-1 634	7 530	-7 149	-2 500	3 665	11 972	12 276
Net profit (loss) for the period	-2 845	-4 405	20 287	88 296	-7 439	10 879	35 538	95 048
Interim condensed consolidated statement of comprehensive income
Profit for the period	-2 845	-4 405	20 287	88 296	-7 439	10 879	35 538	95 048
Other comprehensive income	7 132	4 673	21 712	14 277	-8 283	2 628	-9 131	14 574
Tax on comprehensive income	-1 926	-1 262	-5 862	-3 440	2 071	-657	2 283	-3 560
Total comprehensive income for the period	2 361	-993	36 137	99 133	-13 651	12 850	28 691	106 063

Definitions

• Like for like are stores that were in operation at the start of last year's period and end of current period. Refurbished and relocated stores, as well as online sales, are included in the definition.
• Gross profit is revenue less cost of goods sold (COGS)
• EBITDA (earnings before interest, tax, depreciation and amortisation) is operating profit excluding depreciation and amortization
• Adjusted EBITDA is EBITDA adjusted for non-recurring items.
• EBIT (earnings before interest, tax) is operating profit
• Adjusted EBIT is EBIT adjusted for non-recurring items.
• Capital expenditure is the use of funds to acquire intangible or fixed assets
• Net Income is profit (loss) for the period
• Adjusted Net Income is Net Income adjusted for non-recurring items, financial costs related to interest SWAP, "other unrealized (losses)/gains" and change in deferred tax caused by the lower tax rate.

Disclaimer

This report includes forward-looking statements which are based on our current expectations and projections about future events. All statements other than statements of historical facts included in this report, including statements regarding our future financial position, risks and uncertainties related to our business, strategy, capital expenditures, projected costs and our plans and objectives for future operations, including our plans for future costs savings and synergies may be deemed to be forward-looking statements. Words such as "believe," "expect," "anticipate,", "may," "assume," "plan," "intend," "will," "should," "estimate," "risk" and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. You should not place undue reliance on these forward-looking statements. In addition any forward-looking statements are made only as of the date of this notice, and we do not intend and do not assume any obligation to update any statements set forth in this notice.