Oslo, 29 April 2020 - Q1 2020 was an extraordinary quarter in many ways. The COVID-19 situation has affected us all, and XXL has worked hard on ensuring the safety of its employees and customers while keeping stores open for operation. Lack of winter conditions in the quarter combined with COVID-19 have made it very difficult for all players in the industry. XXL responded quickly with a major effort to clear out winter inventory to preserve cash and allow for an attractive and up-to-date product offering next winter. This led to strong sales, weak margins but a solid financial situation entering the second quarter.
XXL also secured its long term funding needs through new loan facilities as well as new capital. During the quarter XXL also successfully sold off a substantial part of its inventory resulting in a liquidity reserve of NOK 0.8 billion (NOK 0.4 billion).
Highlights
- Operating revenue of NOK 2 162 million (NOK 2 014 million), up 7 per cent
- Like for like growth of 3 per cent
- EBITDA reported of minus NOK 83 million (NOK 192 million)
- Liquidity reserves of NOK 774 million (NOK 417 million)
- Secured long term funding
Update on the COVID-19 situation
XXL 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 XXL has strengthen the frequency and routines related to cleaning and hygiene in all parts of its operations. XXL will at all times comply 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 including temporarily layoffs of around 200 employees. The Austrian authorities plan to lift the ban from 2 May and XXL will open its stores accordingly.
Following the restriction imposed by Norwegian authorities on traveling abroad, XXL has initiated several measures to reduce costs related to its outlet stores including temporarily layoffs of employees and reduced opening hours. These stores are close to the Norwegian border and are heavily reliant on customers traveling from Norway.
As a consequence of the significant decline in sales during the last weeks of March, XXL resolved to give notice of temporary layoffs to around 1 000 store employees in Norway and around 450 employees in Finland.
So far there has been no major disruptions in the inbound or outbound distribution.
Going into April XXL experiences increased demand in Norway and Sweden, especially in categories related to the spring season and home gym equipment, but with significant variations between the various stores. E-commerce continues to see good growth. Finland has been more challenging with negative sales growth so far in April. The Austrian stores will be closed for the whole month. XXL has decided to cancel some temporarily layoffs in Norway due to the improved sales in some departments.
XXL continues to monitor the situation closely and will as part of its contingency plan evaluate alternative actions when necessary.
Outlook
XXL has signed 4 new lease agreements for store openings in 2020 where of 1 in Norway, 1 in Sweden and 2 in Austria. The new stores in Norway and Sweden opened in Q1 2020.
In line with the existing growth strategy, XXL will continue to invest in new stores, E-commerce platform, existing stores, infrastructure and IT. Total CAPEX for XXL Group in 2020 is expected to be around NOK 150-180 million. Going forward XXL expects to slow down the pace of the store roll-out to 3-5 new stores per year and focus on new stores in Austria and some in Sweden. At the same time XXL will be downsizing several existing stores.
XXL has a mid-term ambition of inventory per store of NOK 25 million.
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 Pål Wibe and CFO Stein Eriksen. The presentation will be held in English and will be webcasted at www.xxlasa.com.
Due to restrictions caused by COVID-19 the presentation will be conducted only as a webcast.
For further queries, please contact:
Press contact Norway:
Marte Ramuz Eriksen
Email: presse@xxl.no
Phone: + 47 952 21 425
Press contact Sweden and International
Anders Andrén
Email: press@xxl.se
Phone: +46 76-133 99 40
Investor Relations
Tolle O. R. Grøterud
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. 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.