In the first quarter 2016 XXL ASA delivered a growth rate of 23 per cent compared to the same quarter last year. Under various winter conditions XXL succeeded to grow sales but at lower gross margin. However, focus on clearance of seasonal products resulted in a good and healthy inventory situation. EBITDA amounted to NOK 101 million with a corresponding margin of 6 per cent, impacted by the increase in digital marketing costs and the higher costs after doubling the capacity at the central warehouse in Sweden. Overall the Swedish results are standing out with a revenue growth of 25 per cent and a positive like-for-like growth of 12 per cent in local currency.
Highlights Q1 2016
- Total revenues of NOK 1 684 million (NOK 1 369 million), up 23 per cent
- Like-for-like growth of 11 per cent
- EBITDA of NOK 101 million (NOK 95 million)
- Sweden standing out with strong results
Outlook
XXL has signed 10 new lease agreements for store openings for 2016 where of 6 in Norway. The target 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 profits 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.
Due to more stores and growth in e-commerce in Norway XXL will invest in the central warehouse. The central warehouse in Norway 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 year over year.
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.
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, 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.