XXL

Earnings Release • Apr 26, 2017

XXL ASA - First quarter 2017 results - Challenging winter hampered revenue growth

XXL ASA - First quarter 2017 results - Challenging winter hampered revenue growth

In the first quarter 2017 XXL ASA experienced challenging

winter conditions with limited snow and cold combined with a

March with no signs of the spring season. XXL delivered a

growth of 2 per cent in the quarter compared to the same

quarter last year. Through overall better pricing strategies

XXL succeeded to improve gross margins in Norway and

Finland, while the Swedish gross margin declined. The

markets proved difficult with overall low demand. As a

consequence, it was difficult to achieve scale in the

stores. XXL compensated with cost cuts where possible

resulting in an EBITDA of NOK 34 million with a

corresponding margin of 2 per cent.

Highlights Q1 2017

- Total revenues of NOK 1 713 million (NOK 1 684

million), up 2 per cent

- Challenging winter season

- Actions taken to maintain gross margin

- EBITDA of NOK 34 million

- Good progression in Finland, including one new store

Outlook

XXL has signed 10 new lease agreements for store openings

for 2017 where of 1 in Norway, 4 in Sweden, 3 in Finland and

2 in Austria. The aim for 2017 is 10-12 new stores in total.

Regarding Austria both of the stores are in Vienna, giving

synergies to marketing cost. The opening will be in late

2017, and in addition XXL will launch an E-commerce offering

together with the first store. It will also be added a local

team for buying and support to establish XXL in the new area

consisting of at least five employees. This organization

will be scaled for the whole DACH-region (Germany, Austria

and Switzerland). CAPEX per store will be in the range of

EUR 1.7 -1.9 million and an average pay-back per store of

4-5 years. The average pay-back time is calculated after

being 3 years in the market. Average sale per store is

expected to be around EUR 12 million, while the gross margin

and EBITDA-profile will be as in Sweden over time when

excluding for the build up of a centralized organization.

Hence, the start-up in Austria will have higher costs than

the launch in Sweden, Finland and Denmark. XXL expects

between 15-20 stores in total in the Austrian market.

To continue the growth strategy, in stores and E-commerce,

in new markets and existing markets, XXL will invest in

infrastructure, IT and training facilities. These

investments are expected to be in the range of NOK 70-90

million for 2017. In addition XXL will refurbish at least

two stores with CAPEX in the range of two new stores.

The Group maintains the following long term objectives (on

full year basis):

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

including E-commerce

- Gross margins: In Norway at low 40's, high 30's in

Sweden and between mid and high 30's in Finland. Due to the

demanding macro in Finland the lift to high 30's may take

longer time than in Sweden

- EBITDA-margins: In Norway at low 20's, in Sweden low

double digits and in Finland high single digits. Due to the

demanding macro in Finland the lift to high single digits

may take longer time than in Sweden.

- Both gross margin and EBITDA-margin for the Group

will be negatively affected by the establishment in new

markets

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 Q1.

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

live presentation.

For further queries, please contact:

Tolle O. R. Grøterud

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, Finland and Denmark. 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.