Oslo, 7 February 2025 - XXL delivered total operating revenue of NOK 7.2 billion in 2024 in a Nordic sporting goods market that persisted to be challenging. Record low inventory had a negative impact on product availability and hence on topline development. Consequently, XXL is currently executing a rights issue of NOK 600 million, with adjustments to its current loan agreements, to support efforts in regaining top line growth and continue to deliver on XXL’s “Reset & Rethink” plan. XXL sees positive effects of the cost out program as well as a strengthened gross margin. EBITDA for the year amounted to NOK 74 million, compared to negative NOK 80 million in 2023. However, EBITDA improvements are hampered by the continued negative market development in the Nordics for sporting and outdoor goods, where the expected 2024 recovery in consumer demand has not materialized, and where the outlook on a market recovery is delayed until later in 2025. Going into the new year, XXL has generated growth of more than 4 per cent in January 2025.
XXL continued to see sales recovery quarter over quarter, but still delivered negative year over year growth of 1.8 per cent, in the fourth quarter of 2024. Total operating revenue amounted to NOK 2.0 billion (NOK 2.0 billion). The market remained challenging, also impacted by muted winter conditions compared to the fourth quarter last year. However, XXL was still able to generate sales growth in Sweden and improved overall sales development throughout the quarter. EBITDA amounted to NOK 18 million (negative of NOK 13 million). EBITDA improvement was driven by underlying savings in operating expenses and an increased gross margin, but was at the same time held back by costs related to the group’s current financing process as well as a precautionary VAT provision. XXL has also made a further impairment of its goodwill leading to an extraordinary write-down of NOK 670 million, which has no liquidity effect.
Looking ahead, XXL will remain committed to delivering sales growth through execution of the Reset & Rethink plan, continuing to reduce costs as well as exhibiting strong inventory and liquidity control, all to strengthen its position as the leading mass-market sports retailer in the Nordics.
Highlights:
▪ Total operating revenues of NOK 2.0 billion (NOK 2.0 billion) as sales recovery continues in a challenging market, with Sweden leading the way
▪ Increased sales resilience driven by strengthened campaign execution and activation of non-seasonal categories to compensate for lower sales of seasonal products
▪ Positive EBITDA of NOK 18 million (negative of NOK 13 million), driven by underlying cost savings and positive gross margin development
▪ Extraordinary write-down of goodwill of NOK 670 million
▪ Positive sales trajectory continued in January 2025, with more than 4 per cent growth in total operating revenues
CEO Freddy Sobin says:
" It’s very motivating for the entire organization to deliver yet a quarter of sales recovery, and on top of that, two consecutive months of growth despite challenging market conditions. We continue to believe in our plan, Reset and Rethink, and we are now increasingly seeing the results materializing. However, we remain humble that we have a lot to deliver still, at the same time as we as an organization are highly motivated to come back to growth in 2025 and thus also improve underlying profitability."
Outlook and trading update
Total operating revenues for the Group in January 2025 increased by 4.4 per cent to around NOK 576 million with a stable gross margin year-over-year. The month was characterized by high volatility related to the “on-and-off” winter conditions. In light of the timeline for the ongoing financing of the Group, XXL will short term prioritize strict inventory and liquidity measures, which can impact the Group’s availability of products as well as realized gross margin short- to mid-term.
XXL is in the phase of implementing several strategic initiatives and projects to improve profitability and operational efficiency moving forward, called “Reset & Rethink”. The Five must win battles identified and under execution are expected to deliver an EBITDA run-rate uplift of NOK 500-750 million.
XXL’s target and goal moving forward is to come back to sound profitability as well as over time gain market shares in all markets and regain growth in the E-commerce channel.
In line with the existing strategy, XXL will continue to mainly invest in operational efficiency, store footprint optimization, customer experience enhancing projects in both stores and in the E-commerce platform, as well as in IT and tech. Total CAPEX for XXL Group in 2025 is expected to remain at around NOK 100 million.
XXL has thus far one new store opening signed for 2025. Mid- to long-term XXL continues to expect the pace of the store roll-out to be 2-3 new stores per year including relocations of stores. At the same time XXL will be downsizing several existing stores. Short term the Group will continue to focus on optimizing the store portfolio, including evaluation of selective closures of low performing stores with limited turnaround abilities.
Restricted share units program
As previously disclosed, the restricted share units program for 2022 expires after the Q4 2024 report. Consequently the exercise window opens 7 February 2025 and commences until 17 February 2025.
For further information please find attached the quarterly report and the presentation material.
For APMs please see the quarterly report for further definitions and reconciliations.
The results will be presented at 08:30 CET by CEO Freddy Sobin and CFO Lars Syse Christiansen. The presentation will be held in English and will be webcasted at www.xxlasa.com.
For further queries, please contact:
Investor Relations:
Tolle O. R. Grøterud
Phone: +47 902 72 959
E-mail: ir@xxlasa.com
Press:
Jan Christian Thommesen
Phone: + 47 918 21 387
Email: presse@xxl.no
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Tolle O. R. Grøterud, Investor Relations Officer at XXL ASA, on 7 February 2025 at 07:00 CEST.
About XXL ASA
XXL is a leading sports retailer with stores and e-commerce in Norway, Sweden and Finland. It is the largest among the major sports retailers in the Nordics. 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.