Oslo, 14 February 2018: In the fourth quarter 2017 XXL ASA delivered a growth of 17 per cent driven by a good like-for-like growth of 7 per cent and new store openings. EBITDA increased by 16 per cent in the quarter despite impact from the establishment in Austria during the quarter. Both Norway and Finland delivered solid performance. However, an E-commerce growth of 40 per cent in the quarter stands out and proves the strength of the XXL omni-channel model.
For the full year 2017 XXL ASA generated total revenues of NOK 8.7 billion, representing a growth rate of 12 per cent, impacted by unfavorable seasons in the first half year, but more normal conditions in second half of the year. The growth in 2017 was driven by new stores and E-commerce and XXL gained market shares in all markets. The establishment of XXL in Austria was in addition a significant strategic step for XXL during 2017. XXL Group reported a preliminary consolidated net income of NOK 502 million for 2017. The Board of Directors will propose a dividend of NOK 2.00 per share for 2017 representing 56 per cent of diluted Earnings Per Share.
Highlights Q4 2017
- Total revenues of NOK 2 525 million (NOK 2 151 million), up 17 per cent
- Like-for-like growth of 7 per cent
- EBITDA of NOK 332 million (NOK 286 million)
- Strong cash flow generation of NOK 386 million
- Dividend proposal of NOK 2.00 per share for 2017
Outlook
Total operating revenues for the Group in January 2018 increased by 26.2 per cent to NOK 756 million. The month had good winter conditions with snow and cold in most regions in Norway, in northern parts of Sweden and Finland. The rest of the regions also experienced more cold than at the same time last year.
XXL has signed 6 new lease agreements for future store openings in 2018 where of 4 in Norway, 1 in Sweden and 1 in Austria. The aim for 2018 is 7-10 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 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 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 between 15-20 stores in total in the Austrian market.
Share option program and restricted share units
In accordance with the resolution made by the Annual General Meeting in XXL ASA on 7 June 2017, a share option program for the management team and key employees for 2018 will take place. The program has an estimated cost of around NOK 22.4 million. The strike price will be equal to the volume weighted average market price the next five trading days, starting today 14 February 2018 and ending 20 February 2018. The grant date will be 20 February 2018 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 7 June 2017, a program of restricted share units for around xx employees will take place. The amount of the program is around NOK 7 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 14 February 2018 and ending 20 February 2018. The shares will vest after three years subject to the holder at the time of exercise is employed in XXL.
As previously disclosed, the share incentive programs from 2015 expire five days after the Q4 2017 report. Consequently, the exercise windows for vesting share options and restricted share units open today 14 February 2018 and commence until 20 February 2018.
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.
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.