XXL

Investor Presentation • Apr 29, 2015

XXL ASA – Q1 2015

Disclaimer

Important notice

The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ("relevant persons"). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.

This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the XXL group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

This presentation includes and is based, inter alia, on forward-looking information and contains statements regarding the future in connection with the XXL group's growth initiatives, profit figures, outlook, strategies and objectives. All forward-looking information and statements in this presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the XXL group and its lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions.

Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although XXL believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation.

XXL is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither XXL nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared for the interim results presentation for the first quarter 2015, held on 29 April 2015. Information contained herein will not be updated. The following slides should also be read and considered in connection with the information given orally during the presentation.

Highlights Q1 2015

• Now the largest sports retailer in the Nordics
• Revenue growth of 32%
• Like for Like growth of 4.3%
• E-commerce growth of 75%
• On and off winter season with regional differences
• Many campaigns driving volume but affecting margins
• Cost control OPEX/Sales of 30.3%, down 1.5 pp YoY
• Stable EBITDA-margin compared to last year despite establishment in Finland and lower gross margins
• EBITDA-margin of 6.9%, slightly down 0.1 pp YoY
• Opened 2 new stores in Finland
• Espoo (Helsinki west) on 24 March
• Lielahti (Tampere) on 14 April (Q2 2015)

Growth drivers in the quarter

1 035 1 369 230 9 41 44 ¹¹ 2014 YTD Q1 FY effect 2014 stores New Stores 2015 LfL growth E-Com Other* 2015 YTD Q1 Growth drivers (Amounts in MNOK)

Growth split by markets

Share of growth by geography

Gross margin decrease but cost control

38.8% 40.3% 35.5% 37.3% 39.5% 34.7% Group Norway Sweden Finland

Q1 14 Q1 15

Gross margin development

OPEX%

Q1 14 Q1 15

Underlying EBITDA-margin improvements

Q1 14 Q1 15

• Driving volume impacts gross margins
• Cost focus improves EBITDA-margins in Norway and Sweden
• Negative EBITDA when establishing Finland
• Taking down cost through central warehouses and overhead costs
• Stable EBITDA-margin for the Group

Norway – Driving volumes

• 12% revenue growth YoY
• 5.9% Like for Like growth
• Driving volumes and utilizing improved winter conditions and early signs of spring
• Lower gross margin due to winter clearance and campaigns in the market
• Cost focus and efficiency
• EBITDA-margin improved from 16.9% to 17.5% YoY

Amounts in MNOK

Sweden – Focusing on sales

Revenue growth of 32%

Still a volatile market

• Sporting goods sales up 2.1% in Q1 (Figures from HUI Research)
• Positive trend shift in Like for Like
• Growth of 2.3% in local currency
• Still cannibalization in Stockholm, but…
• …growth in Stockholm of 48% YoY
• More aggressive campaigns and clearance of winter assortment
• Gross margin down from 35.5% to 34.7% YoY
• EBITDA-margin up to 3.2% (1.9% LY)

Amounts in MNOK

Finland – Gaining market position

Amounts in MNOK 144 -7 Q1 14 Q1 15 -3 Revenues EBITDA

• Challenging macro environment
• According to Sporttimyyjä XXL gained a market share of 3.5% in 2014
• Increasing customer perception drives volume both in stores and online
• Still in an establishing phase, opened two new stores
• Espoo (Helsinki west) on 24 March
• Lielahti (Tampere) on 14 April (Q2 2015)

E-commerce – Continuing high growth

• 75% revenue growth
• 7.5% of Group sales compared to 5.6% last year
• All three markets contribute with high growth
• New initiatives
• Pick-up at store roll-out during spring
• Retargeting solutions
• Recruitment of new competence
• And many more

HQ and logistics – Cost focus

• Handling more goods through the two central warehouses compared to last year
• Cost focus throughout the organization
• OPEX of NOK 57 million, up 17%, but…
• …decrease of 0.6 pp YoY to 4.1% of Group sales

The largest sports retailer in the Nordics

Market data of sport retail chains for 2014

• XXL growth significant higher than market growth
• XXL Like for Like growth higher than competitors growth in both Norway and Sweden in 2014
• Including cannibalization in Stockholm and Linköping
• Competitors figures includes new establishments
• XXL taking all the market growth in Finland
• Competitors are reducing
• Following releases of annual accounts from competitors, XXL is now the largest sports retailer in the Nordics in term of revenues

– > NOK 500 million higher revenue than number 2

Priorities going forward

• Investing in our employees
• Delivering the omni-channel experience
• Opening of new stores
• Continuing to drive LfL growth
• Improving the profitability in Sweden
• Always focusing on cost improvements

Financial review

Income statement

Revenue growth of 32%
Cost control most important
– OPEX% of Group sales from 31.8% to 30.3% YoY
Stable EBITDA-margin
Net financials negative due to currency effects
– Negative currency effect of NOK 21 million
– Interest expenses of NOK 8 million

Effective tax rate of 23%

Amounts in MNOK	Q1 15	Q1 14
Total operating revenue	1 369	1 035
Operating income	74	55
Net financials	-30	-65
Profit before income tax	44	-10
Income tax expense	10	0
Net profit	34	-10

Cash flow

• Inventory level increased due to goods related to new season and opening of new stores
• Inventory is healthy with less winter goods compared to last year
• Changes in accounts payables
• Share buy-back of NOK 8 million
• Equity ratio of 59%
• Net interest bearing debt of NOK 874 million
• Liquidity reserve of NOK 529 million
• NIBD / EBITDA down at 1.4x

Cash flow

(Amounts in MNOK)	Q1 2015	Q1 2014
Cash provided by operating activities	47	-62
Cash used by investing activities	-25	-23
Cash used by financing activities	-15	-19
Net change in cash and cash equivalents	7	-104
Cash and cash equivalents beginning of year	222	170
Cash and cash equivalents end of period	229	65

Changes in working capital

(Amounts in MNOK)	Q1 2015	Q1 2014
Changes in inventory	-212	-132
Changes in receivables	59	61
Changes in payables	164	18
Prepayments of financial leases	-3	-3
Changes in other assets and liabilities	-18	-61
Change in working capital	-10	-117

Outlook

• XXL has signed 8 new lease agreements for new store openings in 2015
• One store might be postponed to spring 2016 due to local regulations
• The Group expects the new store openings to be back-end loaded
• Two stores already opened in Finland this year
• An achievement if Finland delivers positive EBITDA in 2015
• Sweden had a good improvement in margin in 2014 due to the new central warehouse and better operations. Margin improvement going forward will not be in the same pace as in 2014
• The Group maintains the following long term objectives (as compared to 2013 figures):
• Like-for-like growth of mid-single digits over time
• 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
• 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

Summary

• 32% revenue growth
• Like for Like growth of 4.3% for the Group
• E-commerce growth of 75%
• Cost control OPEX/Sales of 30%
• Down 1.5 %p
• Stable EBITDA-margin compared to last year despite establishment in Finland and lower gross margins
• Continued expansion and growth in 2015

XXL ASA – Q1 2015