Oslo, 25 April 2017: In the first quarter 2017 XXL ASA experienced challenging winter conditions with limited snow and cold combined with a March with no signs of the spring season. XXL delivered a growth of 2 per cent in the quarter compared to the same quarter last year. Through overall better pricing strategies XXL succeeded to improve gross margins in Norway and Finland, while the Swedish gross margin declined. The markets proved difficult with overall low demand. As a consequence, it was difficult to achieve scale in the stores. XXL compensated with cost cuts where possible resulting in an EBITDA of NOK 34 million with a corresponding margin of 2 per cent.
Highlights Q1 2017
- Total revenues of NOK 1 713 million (NOK 1 684 million), up 2 per cent
- Challenging winter season
- Actions taken to maintain gross margin
- EBITDA of NOK 34 million
- Good progression in Finland, including one new store
Outlook
XXL has signed 10 new lease agreements for store openings for 2017 where of 1 in Norway, 4 in Sweden, 3 in Finland and 2 in Austria. The aim for 2017 is 10-12 new stores in total.
Regarding Austria both of the stores are in Vienna, giving synergies to marketing cost. The opening will be in late 2017, and in addition XXL will launch an E-commerce offering together with the first store. It will also be added a local team for buying and support to establish XXL in the new area consisting of at least five employees. This organization will be scaled for the whole DACH-region (Germany, Austria and Switzerland). CAPEX per store will be in the range of EUR 1.7 -1.9 million and an average pay-back per store of 4-5 years. The average pay-back time is calculated after being 3 years in the market. 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. Hence, the start-up in Austria will have higher costs than the launch in Sweden, Finland and Denmark. XXL expects between 15-20 stores in total in the Austrian market.
To continue the growth strategy, in stores and E-commerce, in new markets and 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 2017. In addition XXL will refurbish at least two stores with CAPEX in the range of two 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: In Norway at low 40’s, high 30’s in Sweden and between mid and high 30’s in Finland. Due to the demanding macro in Finland the lift to high 30’s may take longer time than in Sweden
- EBITDA-margins: In Norway at low 20’s, in Sweden low double digits and in Finland high single digits. Due to the demanding macro in Finland the lift to high single digits may take longer time than in Sweden.
- Both gross margin and EBITDA-margin for the Group will be negatively affected by the establishment in new markets
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 Q1.
A replay will be available on www.xxlasa.com soon after the live presentation.
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 and Denmark. 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.