XXL ASA – Third quarter 2019 - Underperformance driven by declining sales volumes

The results in the third quarter are disappointing driven by a continued negative like-for-like growth of 4 per cent impacting the scalability of the operations. EBITDA amounted to NOK 271 million (NOK 190 million) and NOK 132 million when excluding positive effects of the IFRS 16 implementation. Norway, the most profitable market, reported 10 per cent like-for-like decline in the quarter, impacting the overall results for the Group. However Finland is delivering another strong quarter, with a combination of positive like-for-like and improved margins.

XXL’s Net interest bearing debt (NIBD) amounted to NOK 1.9 billion and the leverage ratio ended at 4.2x, slightly below the covenant of 4.25x. In order to strengthen the balance sheet, XXL has proposed to raise NOK 500 million in new equity.               

Highlights

-              Total revenues of NOK 2 473 million (NOK  2 504 million), down 1 per cent

-              Negative like-for-like growth of 4 per cent, driven by Norway

-              EBITDA of NOK 271 million (NOK 190 million)

-              Continued solid performance in Finland

-              Obtained commitments for NOK 500 million in new equity

Outlook

XXL has signed 4 new lease agreements for store openings in 2019 where of 1 in Sweden, 2 in Finland and 1 in Austria.

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 2019 is expected to be around NOK 160 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.

The long term objectives of the Group will be presented at the Q4 2019 presentation as well as a revised strategy plan.

 

For further information please find attached the quarterly report and the presentation material.

 

The results will be presented at 08:30 CET by interim CEO Tolle Grøterud and CFO Stein Eriksen. The presentation will take place at our headquarters in Oslo, Strømsveien 245, Alna (entrance to our offices on the left side of McDonalds). 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 Q3.

For further queries, please contact:

Tolle O. R. Grøterud

Interim CEO/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. 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