Oslo, 15 February 2017 - 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.