XXL ASA The fourth quarter 2019 results are disappointing and XXL continued to loose market shares in a tough sports retail market. Under challenging market conditions, with a limited winter season, the industry sees a build up of inventory and heavy discount activities. XXL results are significantly impacted by an extraordinary write down of inventory ofNOK 385 million , lower supplier bonuses ofNOK 72 million and a negative like for like growth of 12 per cent. EBITDA amounted to minusNOK 246 million (NOK 115 million ). XXL's Net interest bearing debt amounted toNOK 1.2 billion and the leverage ratio ended at 2.9x. Under these conditions XXL will immediately launch a massive clearance campaign in the main markets. Highlights Q4 2019 - Total revenues ofNOK 2 319 million (NOK 2 569 million), down 10 per cent - Negative like for like growth of 12 per cent - EBITDA (adj.) ofNOK 139 million - Extraordinary write down of inventory ofNOK 385 million - EBITDA reported of minusNOK 246 million (NOK 115 million ) 2019 proved to be a challenging year for the sports retail market and for XXL as well. Total revenues ended atNOK 8 992 million (NOK 9 475 million) down by 5 per cent. The main driver was a negative like for like growth of 9 per cent. EBITDA amounted toNOK 490 million (NOK 541 million ) impacted positively by the implementation of IFRS 16 but negatively by an extraordinary write down of inventory ofNOK 385 million . Highlights for the full year 2019 - Total revenues ofNOK 8 992 million (NOK 9 475 million), down 5 per cent - Negative like for like growth of 9 per cent - EBITDA (adj.) ofNOK 875 million - Extraordinary write down of inventory ofNOK 385 million - EBITDA reported ofNOK 490 million (NOK 541 million ) Outlook Total operating revenues for the Group inJanuary 2020 decreased around 22 per cent toNOK 600 million . All markets have been challenging and with limited winter conditions in all the main cities. This is to be compared to good winter conditions inFinland andAustria last year and a normal winter inNorway andSweden . XXL will immediately launch a massive clearance campaign in main markets for the benefit of all our customers. XXL is closely monitoring the Group's compliance with applicable financial covenants agreed with the bank consortium, and there is a risk for XXL not being in compliance with such covenants by the end of Q1 2020 given the current challenging market conditions and XXL's level of debt. XXL investigates different alternatives for long term sustainable sources of funding for the company. XXL has signed 4 new lease agreements for store openings in 2020 where of 1 inNorway , 1 inSweden and 2 inAustria . 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 forXXL Group in 2020 is expected to be aroundNOK 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 inAustria and some inSweden . At the same time XXL will be downsizing several existing stores. XXL has a mid-term ambition of inventory per store ofNOK 25 million . Vesting of share incentive programs from 2017 As previously disclosed, the share incentive programs from 2017 expire five days after the Q4 2019 report. Consequently, the exercise windows for vesting share options and restricted share units open today7 February 2020 and commence until13 February 2020 . For the share option program for 2017, in total 571,205 share options will lapse without any exercise for the participants. The following primary insiders have after the above mentioned reduced the number of share options with 63,467 each and holds after this the following number of shares and share options inXXL ASA : - Tolle O. R. Grøterud, Interim CEO, holds 48,137 shares and 70,481 share options inXXL ASA including ownership of closely related parties. -Espen Terland , IT Director, holds 25,919 shares and 70,481 share options inXXL ASA including ownership of closely related parties. -Harald Borgen , Supply chain and Process Improvement Director, holds 48,700 shares and 70,481 share options inXXL ASA including ownership of closely related parties. - Tom Erik Kjønø, Buying Director, holds 205,000 shares and 70,481 share options inXXL ASA including ownership of closely related parties. -Anders Kjellen , Retail Director, holds 19,500 shares and 70,481 share options inXXL ASA including ownership of closely related parties. 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 at08:30 CET by interim CEOTolle Grøterud and CFOStein Eriksen . The presentation will take place at our headquarters inOslo , 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 Q4. For further queries, please contact: Press contactNorway : Marte Ramuz Eriksen Email: presse@xxl.no Phone: + 47 952 21 425 Press contactSweden and InternationalAnders Andrén Email: press@xxl.se Phone: +46 76-133 99 40 Investor RelationsTolle O. R. Grøterud Interim CEOXXL 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 AboutXXL ASA XXL is a leading sports retailer with stores and e-commerce inNorway ,Sweden ,Finland ,Denmark andAustria . 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.
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