Beter Bed posts lower profit in 2012 with steady revenue

* Further fall in consumer confidence in the Netherlands and Spain. * 2012 net revenue nearly equal to previous year at EUR 397.3 million (2011: EUR 397.0 million). * 2012 net profit including write-downs for Spain and non-recurring expenses fell by 49% to EUR 14.4 million (2011: EUR 28.0 million); earnings per share totalled EUR 0.67 (2011: EUR 1.29). * Normalised net profit decreased by 21% in 2012 to EUR 22.2 million (2011: EUR 28...

• Further fall in consumer confidence in the Netherlands and Spain.
• 2012 net revenue nearly equal to previous year at EUR 397.3 million (2011: EUR 397.0 million).
• 2012 net profit including write-downs for Spain and non-recurring expenses fell by 49% to EUR 14.4 million (2011: EUR 28.0 million); earnings per share totalled EUR 0.67 (2011: EUR 1.29).
• Normalised net profit decreased by 21% in 2012 to EUR 22.2 million (2011: EUR 28.0 million); normalised earnings per share of EUR 1.02 (2011: EUR 1.29).
• Dividend proposal: EUR 0.47 per share, pay-out ratio of 70%.
• After taking the write-down, the Spanish activities were repositioned from a full service into a cash & carry formula.

 

Key figures for the year

(in millions of EUR unless stated otherwise)	2012	2011	Change
Revenue	397.3	397.0	0.1%
Change in revenue at comparable stores (%)	-4.7%	0.4%
Gross profit (%)	56.3%	56.5%
EBITDA	38.1	46.8	-18.5%
Operating profit/EBIT	23.7	38.3	-38.1%
Net profit	14.4	28.0	-48.6%
Earnings per share (in EUR)	0.67	1.29	-48.1%
Proposed dividend (in EUR)	0.47	1.10	-57.3%
Pay-out ratio (%)	70%	85%
Solvency (%)	50.4%	54.1%
Number of stores	1,219	1,187	2.7%

 

Normalised EBITDA	40.4	46.8	-13.6%
Normalised operating profit/EBIT	31.2	38.3	-18.5%
Normalised net profit	22.2	28.0	-20.8%
Normalised earnings per share (in EUR)	1.02	1.29	-20.9%
Pay-out ratio excluding write-down for Spain (%)	50%	85%

Key figures for the fourth quarter

(in millions of EUR unless stated otherwise)	Q4 2012	Q4 2011	Change
Revenue	100.8	108.0	-6.6%
Change in revenue at comparable stores (%)	-10.5%	1.8%
Gross profit (%)	58.0%	58.8%
Operating profit/EBIT	4.5	14.3	-68.3%
EBITDA	11.9	16.6	-28.2%
Net profit	0.9	10.2	-91.2%
Earnings per share (in EUR)	0.05	0.46	-89.1%

 

Normalised operating profit/EBIT	10.6	14.3	-26.1%
Normalised EBITDA	13.0	16.6	-21.7%
Normalised net profit	7.5	10.2	-26.4%
Normalised earnings per share (in EUR)	0.34	0.46	-26.1%

 

 

Ton Anbeek, Chief Executive Officer:

'Our company was hit badly in the course of 2012 by the further deterioration of the economy in many European countries. This is one factor that led to a write-down on our assets in Spain. The results deteriorated further in the Netherlands due to sharply declining consumer confidence. This was caused by the continuing crisis in the housing market, the pension crisis and measures introduced by the Dutch government such as the VAT increase that took effect in October 2012. Germany also had a somewhat more difficult second half of the year, in part owing to the strong comparative basis formed by the successful anniversary year of 2011. The cost-saving measures introduced in the third quarter of 2012 were already reflected in the results in the fourth quarter. The outlook for 2013 in countries including the Netherlands and Spain remain extremely challenging. A sharp focus on expenses remains warranted. A strong balance sheet, a healthy cash flow and our highly motivated employees give us confidence that we will be able to maintain our strong market position.'

 

Fourth quarter 2012

The revenue of Beter Bed Holding decreased by 6.6% to EUR 100.8 million in the fourth quarter of 2012 (fourth quarter 2011: EUR 108.0 million). The revenue at comparable stores fell by 10.5% (fourth quarter 2011: 1.8%). Revenue performance per country in the fourth quarter was as follows:

 

Germany	-3%
The Netherlands	-11%
Switzerland	+2%
Austria	-6%
Spain	-34%
Belgium	+24%

 

Revenue in Germany decreased by 3% in the fourth quarter. Revenue at comparable stores fell by 8% in the fourth quarter (fourth quarter 2011: +12%). In the Netherlands, a combination of a distinctly lower order portfolio at the end of the third quarter and a 13% decrease in revenue at comparable stores in the fourth quarter caused revenue to fall by more than 11%. In Spain, the drop in revenue at comparable stores amounted to 37% in the fourth quarter. This sharp decline began in September as a result of the deteriorating economic situation and the VAT increase in Spain.

 

Gross profit amounted to 58.0% in the fourth quarter (fourth quarter 2011: 58.8%). Despite the fact that the average number of stores grew by a total of 42, the operating expenses decreased by 2.6% from EUR 49.2 million in 2011 to EUR 48.0 million in 2012. Average expenses per store decreased by more than 3% in the fourth quarter of 2012. Normalised operating profit (EBIT) totalled EUR 10.6 million in the fourth quarter of 2012 (10.5% of the revenue), compared to EUR 14.3 million (13.2% of the revenue) in 2011. Normalised net profit in the fourth quarter of 2012 decreased by 26% to EUR 7.5 million (2011: EUR 10.2 million).

 

Write-down for Spain and non-recurring expenses in 2012

As announced on 23 January 2013, Beter Bed took an impairment of EUR 4.9 million, which are deducted from operating profit, due to further decreasing consumer confidence and the uncertainty regarding the outlook for the activities in Spain. The company also took impairments of EUR 1.1 million on the tax assets. The negative effect of the impairments for Spain on net profit consequently totals EUR 6.0 million.

In 2012 the company has also deducted a total of EUR 2.5 million (EUR 1.8 million after tax) in non-recurring expenses from the operating profit for the closure of stores in Poland, reorganisation expenses in Spain and the Netherlands and the closure of stores in Spain, the Netherlands, Belgium and Germany (MAV).

Full year 2012
Revenue for the full year 2012 increased marginally by 0.1% to EUR 397.3 million (2011: EUR 397.0 million). This increase is partially the result of the growth in the number of stores by 32 to 1,219 (year-end 2011: 1,187 stores). Revenue at comparable stores decreased by 4.7% for the full year 2012 (2011: +0.4%). While revenue performance at comparable stores in the Netherlands (5% decrease) and Germany (5% increase) was still divergent in the first half of 2012, the performance in both the Netherlands and Germany was negative in the second half of 2012 at -11% and -6% respectively. Consumer confidence deteriorated further in the second half of 2012. Revenue performance at comparable stores was negative in all months of 2012, with the exception of the month of September preceding the VAT increase on 1 October 2012.

Revenue performance per country in the full year 2012 was as follows:

Germany                      +3%

The Netherlands            -5%

Spain                           -12%

Switzerland                   +10%

Austria                         +4%

Belgium                       +34%

 

Gross profit decreased marginally to 56.3% in 2012 (2011: 56.5%). Operating expenses increased from EUR 186.1 million to EUR 190.1 million, primarily due to the increase in the number of stores. Expenses as a percentage of revenue rose from 46.9% to 47.8%.

 

Average expenses per store decreased marginally by 0.1% in 2012.

 

Operating profit totalled EUR 23.7 million for the full year 2012 (6.0% of revenue), compared to EUR 38.3 million (9.6% of revenue) for the full year 2011. Normalised operating profit decreased from EUR 38.3 million (9.6% of revenue) to EUR 31.2 million (7.9% of revenue). Net profit amounted to EUR 14.4 million in 2012 (2011: EUR 28.0 million). Normalised net profit totalled EUR 22.2 million in 2012 (2011: EUR 28.0 million). Earnings per share amounted to EUR 0.67 in 2012 (2011: EUR 1.29).

 

Total investments in 2012 amounted to EUR 10.9 million (2011: EUR 13.3 million). A total of EUR 7.2 million of this amount was invested in new and existing stores in 2012 (2011: EUR 9.8 million). The remaining amount has been invested primarily in IT. The cash flow (net profit plus depreciations and write-downs) amounted to EUR 28.8 million in 2012, compared to EUR 36.5 million in 2011. Solvency at year-end 2011 amounted to 50.4% (2011: 54.1%). Interest-bearing debt amounted to EUR 12.3 million at year-end 2012 (year-end 2011: EUR 8.3 million).

Operational

A total of 128 stores were opened and 96 stores were closed in 2012. The number of stores has consequently increased by 32 on balance. The company had 1,219 stores at the end of 2012.

Number of stores	31-12-2011	Closed	Opened	31-12-2012
Matratzen Concord (including MAV)	963	66	107	1,004
Beter Bed	87	1	2	88
El Gigante del Colchón	67	11	7	63
BeddenREUS	39	2	7	44
Slaapgenoten	16	1	1	16
Schlafberater.com	-	-	4	4
Matratzen-AbVerkauf	15	15	-	-
Total	1,187	96	128	1,219

Matratzen Concord

The revenue of the cash & carry retail formula Matratzen Concord amounted to EUR 251.2 million in 2012 (63.2% of the total group revenue). This represents growth of 3.8% compared to 2011. Revenue at comparable stores decreased by 1.8%. 83% of Matratzen Concord's revenue was realised in Germany in 2012. The initial results of Matratzen Concord's webshop that was launched in December 2012 appear to be positive. Online sales via a partner are also expected to be launched in Germany in the second quarter of 2013. A number of poorly performing stores in both the Netherlands and Belgium were closed.

 

This formula opened a net total of 41 new stores in 2012, of which 52 were opened in Germany and five in both Austria and Switzerland. There were a net total of twelve store closures in the Netherlands and three in Belgium. The last remaining store in Poland was closed in December 2012.

 

 

Number of stores	31-12-2011	Closed	Opened	31-12-2012
Germany	800	43	95	852
Austria	62	-	5	67
Switzerland	47	1	6	52
The Netherlands	39	13	1	27
Belgium	9	3	-	6
Poland	6	6	-	-
Total	963	66	107	1,004

 

 

Beter Bed

This formula operates in the Netherlands and has also been active in Belgium since 2011. The number of Beter Bed stores grew by one store from 87 to 88 as a result of two openings and one closure. Revenue decreased by 5.1% in 2012 to EUR 102.4 million (2011: EUR 107.9 million). This formula consequently contributes 25.8% to the total group revenue. Revenue at the comparable stores of Beter Bed declined by 6.2% for the full year 2012. The online revenue via the own webshop and the partnership with wehkamp.nl developed positively and now amounts to approximately 5% of the revenue.

 

Other formulas

The revenue of the other formulas amounted to EUR 43.7 million in 2012 (2011: EUR 47.1 million). This includes the revenue of the retail formulas BeddenREUS (The Netherlands), Slaapgenoten (The Netherlands), El Gigante del Colchón (Spain), Schlafberater.com (Germany), the wholesaler DBC and the Matratzen-AbVerkauf formula that was closed in 2012. Revenue in 2012 was 7.4% lower than in 2011. These other formulas contribute 11.0% to the total group revenue.

 

Dividend

Beter Bed Holding N.V.'s dividend policy is aimed at maximising shareholder return while at the same time maintaining a solid capital position. The company aims to distribute at least 50% of its net profit to the shareholders provided that its solvency is not less than 30% and the net-interest-bearing debt/EBITDA ratio does not exceed two.

 

In November 2012, the company paid an interim cash dividend of EUR 0.35 per share. A proposal will be submitted to the Annual General Meeting of Shareholders, scheduled for 25 April 2013, to distribute a final cash dividend of EUR 0.12.This brings the dividend for 2012 to EUR 0.47 per share (2011: EUR 1.10 per share), with 70% of net profit to be distributed to the shareholders. Adjusted for the write-down in Spain, the pay-out ratio amounts to 50%. This payment is in line with the aforementioned dividend policy.

 

Auditor's report

The financial information in the appendices is taken from the consolidated financial statements of Beter Bed Holding N.V., which will be submitted for adoption to the Annual General Meeting of Shareholders on 25 April 2013, and for which an unqualified auditor's report has been issued by the independent auditor.

 

Developments and outlook first months of 2013

The company does not expect the economic situation to improve in 2013, particularly in the Netherlands and Spain. The focus in both the Netherlands and Spain will remain fully on continuing cost reductions, closure of poor performing stores and a further increase in conversion, service and customer satisfaction. The company expects to be able to save an amount of EUR 1.3 million in 2013 on top of the cost-savings totalling EUR 2.2 million that have already been implemented.

 

The company foresees a distinct decrease in revenue in the first quarter of 2013, despite the realised cost-savings and stable gross profit, which will lead to a considerably lower operating profit than in the first quarter of 2012. This is caused by a lower order portfolio in the Netherlands at year-end 2012, historically low consumer confidence in the Netherlands and lower visitor numbers due to winter weather conditions in January and February in the Netherlands and Germany.

 

 

For more information, please contact: Ton Anbeek, Chief Executive Officer
Tel. +31 (0)413 338819 / Fax +31 (0)413 338829 / Mob. +31 (0)6 53662838
E-mail: ton.anbeek@beterbed.nl  / Website: www.beterbedholding.nl

 

 

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