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2016 was for the Company a period of preparation to significant changes that have been implemented in March this year. - The Company obtained individual licence for INTERSPORT brand and carried out a new issue of shares of the Company.

The process of preparation for the above changes lasted for over half a year and unfortunately had an impact on the Company's results, especially in the second half of 2016. The lack of continuity in supplies of private label goods contributed to the insufficient level of goods in the stores, which resulted in a decrease in sales revenue and a decrease in profit margins.

Lower sales revenues in 2016 by 4.2% as compared to 2015 were caused mainly by the decrease in revenues from the sale of own brand goods by 19.6% on a year-to-year basis or approximately PLN 6.186 thousand that is responsible for about 70% decline of the overall sales.

The main reasons for the weaker financial performance in 2016 were lower sales margin by PLN 4.548 thousand on a year-to-year basis - margin decrease was mainly related to own brands goods by PLN 2.590 thousand on a year-to-year basis and the costs of one-off events, which amounted to PLN 1,878 thousand (which consisted of closing costs of three stores in 2016 - undepreciated part of the cost of fixed assets, the cost of restoring the shops to their original state, severance payments for employees - and the provision for the planned closure of shops in 2017). Operating expenses in 2016 amounted to PLN 83,786 thousand and they were lower by 1.1%, ie. By about PLN 960 thousand in comparison to 2015.

Accordingly, the Company has taken a number of measures aimed at improving the economic and financial situation. The implementation of a new business model by obtaining an independent license for INTERSPORT brand, giving the right to buy own INTERSPORT brands directly from their producers, an increase in equity through a new share issue, the launch of a new Internet platform in the second quarter of 2017 the completion of the stores optimization process give strong arguments for improvement of the financial condition of the Company.

INTERSPORT Poland SA chain stores are well located; we have about 12 million visits of customers per year ; we have in our database more than 500 thousand of regular customers and we have efficient logistics center and qualified staff. All these elements combined with possibility to implement a new business model provide a good opportunity to develop good financial results.