XXL

Earnings Release • Feb 15, 2017

XXL ASA - Fourth quarter and full year 2016 results - Eventful year completed by a solid quarter

XXL ASA - Fourth quarter and full year 2016 results - Eventful year completed by a solid quarter

In the fourth quarter 2016 XXL ASA delivered a growth of 18

per cent compared to the same quarter last year. Six new

stores opened in the quarter and all markets delivered a

solid like-for-like growth. EBITDA increased by 25 per cent

in the quarter driven by higher gross margins in both Norway

and Finland. Finland is overall standing out with good

results, delivering a like-for-like growth of 13.3 per cent

in local currency combined with significant improved margins.

For the full year 2016 XXL ASA generated total revenues of

NOK 7.8 billion, representing a growth rate of 20 per cent.

The growth is driven by both stores and e-commerce and XXL

is gaining market shares in all markets. The growth

continues to be profitable increasing the net income by 17

per cent to NOK 501 million. The Board of Directors will

propose a dividend of NOK 2.00 per share for 2016

representing 56 per cent of diluted Earnings Per Share. The

year has been very busy with a XXL-record of 12 store

openings, established an E-commerce operation in Denmark in

2016, expanded the warehouse capacity in the Group, upgraded

the ERP platform, launched a new front-end website in all

markets and signed the first two lease contracts for store

openings in Austria. This makes a good platform for further

growth in 2017.

Highlights Q4 2016

- Total revenues of NOK 2 151 million (NOK 1 831

million), up 18 per cent

- Solid like-for-like growth in all markets

- EBITDA increased by 25 per cent to NOK 286 million

- Six new stores - three in Norway, one in Sweden and

one in Finland

- Dividend proposal of NOK 2.00 per share for 2016

Outlook

Total operating revenues for the Group in January 2017

decreased by 8.1 per cent to NOK 600 million. The month was

impacted by unusual poor winter conditions in all regions in

the Nordics.

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. This is a new market area for

XXL and it will be focus on branded goods at introduction

prices and a significant footprint on marketing activities.

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.

Share option program and restricted share units

In accordance with the resolution made by the Annual General

Meeting in XXL ASA on 3 June 2016, a share option program

for the management team and key employees for 2017 will take

place. The program has an estimated cost of around NOK 21.6

million. The strike price will be equal to the volume

weighted average market price the next five trading days,

starting today 15 February 2017 and ending 21 February 2017.

The grant date will be 21 February 2017 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 3 June 2016, a program of restricted

share units for around 150 employees will take place. The

amount of the program is around NOK 11 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 15 February

2017 and ending 21 February 2017. 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

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.