XXL ASA – Update on the COVID-19 situation

XXL ASA (“XXL” or the “Company”) has initiated contingency plans for different challenges that may occur related to the COVID-19 situation. Focus is on the well-being of all our employees, and so far we have not seen any infection outbreaks among our employees. XXL has strengthen the frequency and routines related to cleaning and hygiene in all parts of its operations, and the Company is at all times complying  with the COVID-19 guidelines issued at any given time by the Norwegian Institute of Public Health and other relevant authorities in the markets it operates, and has established good routines for informing employees, customers and business partners.

As announced on 15 March 2020, Austrian authorities, with effect from 16 March 2020, decided to temporarily close down retail trade other than food, pharmacies and other important supply functions in the country as a precautionary measure to contribute to limit the contagion of COVID-19. As a consequence, the five XXL stores in Austria closed from Monday 16 March 2020. XXL monitors the situation closely and has initiated several actions to reduce costs during this period, and the estimated financial effects are estimated to be limited. Following the restriction imposed by Norwegian authorities on traveling abroad, XXL is considering to temporarily close down the three outlet stores in Sweden and initiate several measures to reduce costs. These outlet stores are close to the Norwegian border and are heavily reliant on customers traveling from Norway. Also here the estimated financial effects are estimated to be limited.

Up until the last couple of trading days XXL had solid positive like for like revenue growth in all main markets. However, as a consequence of the recent developments including inter alia shortened opening hours in many shopping centres and restrictions related to the COVID-19, sales have declined to double digit negative like for like growth the last couple of days, but with significant variations between the various stores. This has been partly offset by strong growth from E-commerce. XXL has already initiated cost reductions to compensate for the negative revenue development and is monitoring the situation closely. As part of its contingency plan, XXL is constantly considering implementation of cost reduction measures.

So far there has been no major disruptions in the in the inbound or outbound distribution. However, XXL is monitoring the situation closely and will evaluate alternative actions when necessary.

During Q1 2020, XXL has successfully sold off a substantial part of its inventory with significant lower margins, mainly winter products. This, in combination with substantially lower purchased volumes, has reduced inventory down to NOK 2.4 billions, and improved the liquidity reserves, ending at NOK 0.8 billion by the end of February 2020, and net interest bearing debt at NOK 1.3 billion (before the subsequent offering of NOK 0.1 billion in March 2020).

For further queries, please contact:

Investor Relations

Tolle O. R. Grøterud

Interim CEO, XXL ASA

Tel: +47 90 27 29 59

E-mail:ir@xxlasa.com

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. 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.

Definitions

Alternative Performance Measures (APM)

Certain financial measures and ratios are not specifically defined under IFRS or any other generally accepted accounting principles. These measures are presented in this statement because they are among the measures used by Management to evaluate the cash available to fund ongoing, long-term obligations and they are frequently used by other interested parties for valuation purposes or as a common measure of the ability of a company to incur and meet debt service obligations. These measures may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles, and you should not consider such items as alternatives to profit for the year, total operating revenues, operating income or any other performance measures derived in accordance with IFRS, and they may be different from similarly titled measures used by other companies. All amounts in tables below are in NOK billion.

Like for Like

Like for Like include comparable stores and E-commerce. Comparable stores are stores that have been open all months of the current year and all months of the previous year. Stores that have been relocated or significantly expanded are excluded from Like for Like stores.

Liquidity reserve

Liquidity reserve is defined as XXL’s available cash and cash equivalents plus available liquidity through overdraft and credit facilities.

Reconciliation

Net Interest Bearing Debt

Net interest bearing debt is defined as non-current interest bearing debt and current interest bearing debt less cash and cash equivalents. Net debt is a measure of the Group’s net indebtedness that provides an indicator of the overall balance sheet strength.

Reconciliation