In the first quarter 2018 XXL ASA delivered a growth of 21 per cent driven by a good and long winter season and is gaining market shares. Gross margins improved from 36.5 per cent in Q1 2017 to 37.9 per cent in Q1 2018 despite establishing operations in Austria with lower gross margins. EBITDA was negatively impacted by a weak March with no spring conditions, costs in Austria, higher marketing costs in Sweden and costs related to new store openings. E-commerce continues to deliver solid growth with 42 per cent and an improved inventory situation drives stronger cash flow generation. XXL maintains the long term outlook.
Highlights Q1 2018
- Total revenues of NOK 2 070 million (NOK 1 713 million), up 21 per cent
- E-commerce growth of 42 per cent
- EBITDA of NOK 51 million (NOK 34 million)
- Solid cash flow from improved inventory development
- Continued market share increase
Changes in the Management team
Buying Director Mr. Lars Rugaas, CFO Mr. Krister Pedersen and E-commerce Director Mr. Tommi Jylhä-Vuorio will leave XXL during 2018.
XXL has established a new operational management team consisting of the following members and primary insiders in XXL ASA
- CEO Mr. Fredrik Steenbuch
- COO Mr. Ulf Bjerknes
- Marketing and Buying Director Mr. Jarle Bråten
- IT and Omni-channel Director Mr. Espen Terland
- Strategy and Investor Relations Director Mr. Tolle Grøterud
- Retail Director Mr. Anders Kjellén
- E-commerce Director Mrs. Karoline Gjerde
- Wholesale and Supply Chain Director Mr. Harald Borgen
- CFO – to be disclosed soon
Mrs. Karoline Gjerde has been the E-commerce Manager in Norway since 2015, showing strong results and solid leadership capabilities. Prior to joining XXL she served three years as E-commerce Manager in Ferner Jacobsen, establishing the E-commerce platform for this leading high-end fashion retailer in Norway. Gjerde holds a MSc in Business and Economics form BI, Norwegian Business School. Karoline Gjerde is a Norwegian citizen and resides in Norway. She currently owns 4,677 restricted share units in XXL ASA.
Outlook
XXL has signed 6 new lease agreements for store openings in 2018 where of 4 in Norway, 1 in Sweden and 1 in Austria. This figure includes the 2 stores that were established in Q1 2018. The aim for 2018 is 7-9 new stores in total. XXL will at all times evaluate the trend of E-commerce growth compared to opening of new stores. The required market size for approving a new store opening will be increased.
To continue the growth strategy, within both stores and E-commerce, in new markets as well as in 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 2018. In addition, XXL will refurbish at least 2 stores with CAPEX in the range of a new store.
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 to be stable. In Norway at low 40’s, high 30’s in Sweden and between mid and high 30’s in 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.
- New market entries affect both Group gross margin and Group EBITDA margin in the establishing period of 1-3 years
The Austria 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 for buying and support. Hence, the start-up in Austria will have higher costs than the launch in Sweden, Finland and Denmark. CAPEX per store will be in the range of EUR 1.7-1.9 million and the average pay-back per store is estimated to 4-5 years including net working capital. The average pay-back time is after being some time in the market, following an establishing period. XXL expects around 15 stores in total in the Austrian market.
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 2018.
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, Denmark and Austria. It is the largest among the major sports retailers in the Nordics and the fastest growing among the major sports retail chains in the World. 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 best prices and the widest assortment of products, focusing on branded goods.