In the fourth quarter 2015 XXL ASA delivered a growth rate of 21 per cent compared to the same quarter last year. E-commerce is standing out with a solid 71 per cent growth in the quarter. Four new stores opened including the brand new XXL Outlet concept ending at 52 stores in total. EBITDA increased by 11 per cent from lower gross margin offset by improved cost efficiency.
XXL ASA generated total revenues of NOK 6.5 billion for the year 2015, representing a growth rate of 24 per cent. The corresponding growth in EBITDA was 14 per cent. Significantly lower net financial expenses lead to a net income of NOK 467 million. The Board of Directors will propose a dividend of NOK 2.00 per share for 2015 representing 60 per cent of diluted Earnings per share. Looking forward XXL has doubled the capacity at the central warehouse in Sweden and made several improvements for the E-Commerce distribution. This makes a good platform for further growth in 2016.
Highlights Q4 2015
- Total revenues of NOK 1 831 million (NOK 1 520 million), up 21 per cent
- E-commerce growth of 71 per cent
- Opened four new stores including a brand new XXL Outlet concept
- Good cost control with OPEX/Sales ratio of 28.5 per cent
- Dividend proposal of NOK 2.00 per share for 2015
Outlook
Total operating revenue for the Group in January 2015 grew by 29.6 per cent to NOK 652 million. The start of the year was impacted by good winter conditions in most of Norway, Sweden and Finland. However, these conditions did not continue into February.
XXL has signed 9 new lease agreements for store openings for 2016 where of 6 in Norway. The aim for 2016 is 10-12 new stores in total.
In addition XXL will launch an e-commerce offering in Denmark in 2016. The launch will be colored by aggressive pricing and high marketing spending and will return negative profit the first years of operation. The business case has minor initial CAPEX but the total investment should be considered as a small store outside Norway with 4-5 years of pay-back.
It is necessary to invest in the central warehouse in Norway due to more stores and growth in e-commerce. The central warehouse will increase from approximately 24 000 square meters to 32 000 square meters. In addition XXL will increase the capacity of the autostore system in Sweden. Total infrastructure investments will be in the range of NOK 50-65 million in 2016.
The distribution channels for XXL marketing material is under substantial change where the existing print and TV marketing is under pressure. XXL will focus more on digital marketing channels in addition to the existing channels. The new strategy will increase the marketing cost in per cent of sales in all countries in a transition period by approximately 0.5 percentage points.
The Group maintains the following long term objectives (as compared to 2013 figures):
- Like-for-like growth of mid-single digits over time including e-commerce
- E-commerce share of total revenues of low double digits
- Gross margins to be stable. For Norway maintained at the same level, increasing to high 30’s in Sweden and Finland. Due to the demanding macro in Finland the lift to high 30’s may take longer time than in Sweden
- 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.
Share option program and restricted share units
In accordance with the resolution made by the Annual General Meeting in XXL ASA on 27 May 2015, a share option program for the management team and key employees for 2016 will take place. The program has an estimated cost of around NOK 8.5 million. The strike price will be equal to the volume weighted average market price the next five trading days, starting today 19 February 2016 and ending 25 February 2016. The grant date will be 25 February 2016 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 27 May 2015, a program of restricted share units for around 140 employees will take place. The amount of the program is around NOK 9 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 19 February 2016 and ending 25 February 2016. The shares will vest after three years subject to the holder at the time of exercise is employed in XXL.
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.
A replay will be available on www.xxlasa.com soon after the live presentation.
For further queries, please contact:
Tolle O. R. Grøterud, Head of 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 and Finland. It is the largest and the fastest growing among the major sports retailers in the Nordic. 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 lowest prices and the widest assortment of products, focusing on branded goods.