XXL

Earnings Release • Feb 19, 2016

XXL ASA - Fourth quarter and full year 2015 results - Solid results despite warm autumn

XXL ASA - Fourth quarter and full year 2015 results - Solid results despite warm autumn

In the fourth quarter 2015 XXL ASA delivered a growth

rate of 21 per cent compared to the same quarter last

year. E-commerce is standing out with a solid 71 per

cent growth in the quarter. Four new stores opened

including the brand new XXL Outlet concept ending at

52 stores in total. EBITDA increased by 11 per cent

from lower gross margin offset by improved cost

efficiency.

XXL ASA generated total revenues of NOK 6.5 billion

for the year 2015, representing a growth rate of 24

per cent. The corresponding growth in EBITDA was 14

per cent. Significantly lower net financial expenses

lead to a net income of NOK 467 million. The Board of

Directors will propose a dividend of NOK 2.00 per

share for 2015 representing 60 per cent of diluted

Earnings per share. Looking forward XXL has doubled

the capacity at the central warehouse in Sweden and

made several improvements for the E-Commerce

distribution. This makes a good platform for further

growth in 2016.

Highlights Q4 2015

- Total revenues of NOK 1 831 million (NOK 1

520 million), up 21 per cent

- E-commerce growth of 71 per cent

- Opened four new stores including a brand new

XXL Outlet concept

- Good cost control with OPEX/Sales ratio of

28.5 per cent

- Dividend proposal of NOK 2.00 per share for

2015

Outlook

Total operating revenue for the Group in January 2015

grew by 29.6 per cent to NOK 652 million. The start of

the year was impacted by good winter conditions in

most of Norway, Sweden and Finland. However, these

conditions did not continue into February.

XXL has signed 9 new lease agreements for store

openings for 2016 where of 6 in Norway. The aim for

2016 is 10-12 new stores in total.

In addition XXL will launch an e-commerce offering in

Denmark in 2016. The launch will be colored by

aggressive pricing and high marketing spending and

will return negative profit the first years of

operation. The business case has minor initial CAPEX

but the total investment should be considered as a

small store outside Norway with 4-5 years of pay-back.

It is necessary to invest in the central warehouse in

Norway due to more stores and growth in e-commerce.

The central warehouse will increase from approximately

24 000 square meters to 32 000 square meters. In

addition XXL will increase the capacity of the

autostore system in Sweden. Total infrastructure

investments will be in the range of NOK 50-65 million

in 2016.

The distribution channels for XXL marketing material

is under substantial change where the existing print

and TV marketing is under pressure. XXL will focus

more on digital marketing channels in addition to the

existing channels. The new strategy will increase the

marketing cost in per cent of sales in all countries

in a transition period by approximately 0.5 percentage

points.

The Group maintains the following long term objectives

(as compared to 2013 figures):

- Like-for-like growth of mid-single digits over

time including e-commerce

- E-commerce share of total revenues of low

double digits

- Gross margins to be stable. For Norway

maintained at the same level, increasing to high 30's

in Sweden and Finland. Due to the demanding macro in

Finland the lift to high 30's may take longer time

than in Sweden

- EBITDA-margin stable as a result of stable

gross margins and operating expenses. In Norway at low

20's, in Sweden low double digits and in Finland high

single digits.

Share option program and restricted share units

In accordance with the resolution made by the Annual

General Meeting in XXL ASA on 27 May 2015, a share

option program for the management team and key

employees for 2016 will take place. The program has an

estimated cost of around NOK 8.5 million. The strike

price will be equal to the volume weighted average

market price the next five trading days, starting

today 19 February 2016 and ending 25 February 2016.

The grant date will be 25 February 2016 and the

options are exercisable after three years, subject to

key performance criteria (EBITDA-target) being met and

subject to the holder at the time of exercise is

employed in XXL.

In accordance with the resolution made by the Annual

General Meeting in XXL ASA on 27 May 2015, a program

of restricted share units for around 140 employees

will take place. The amount of the program is around

NOK 9 million worth of restricted shares to be

distributed in total. The allocation price will be

equal to the volume weighted average market price the

next five trading days, starting today 19 February

2016 and ending 25 February 2016. The shares will vest

after three years subject to the holder at the time of

exercise is employed in XXL.

For further information please find attached the

quarterly report and the presentation material.

The results will be presented at 08:30 CET by CEO

Fredrik Steenbuch and CFO Krister Pedersen. The

presentation will take place at our headquarters in

Oslo, Strømsveien 245, Alna Senter (entrance on the

right side of Maxbo). The presentation will be held in

English and will be webcasted at www.xxlasa.com. You

may also follow the presentation live by telephone.

Dial-in details: +47 21 56 33 18 (Norway) and +44(0)20

3003 2666 (International), passcode - XXL Q4.

A replay will be available on www.xxlasa.com soon

after the live presentation.

For further queries, please contact:

Tolle O. R. Grøterud, Head of Investor Relations, XXL

ASA

Tel: +47 90 27 29 59

E-mail: ir@xxlasa.com

This information is subject of the disclosure

requirements pursuant to section 5-12 of the Norwegian

Securities Trading Act

About XXL ASA

XXL is a leading sports retailer with stores and e-

commerce in Norway, Sweden and Finland. It is the

largest and the fastest growing among the major sports

retailers in the Nordic. XXL pursues a broad customer

appeal, offering a one stop shop experience with a

wide range of products for sports, hunting, skiing,

biking and other outdoor activities. XXL's concept is

to have the largest stores with the lowest prices and

the widest assortment of products, focusing on branded

goods.