* Revenue up 5.8% to EUR 196.3 million (first half 2011: EUR 185.5 million) * German revenue up 9.9%; Dutch revenue down 1.5% * Gross profit as a percentage of revenue in line with same period last year * Operating profit: EUR 12.9 million (first half 2011: EUR 14.3 million) * Net profit: EUR 9.1 million (first half 2011: EUR 10.6 million) Beter Bed Holding N.V. posted net profit of EUR 9.1 million for the first six months of 2012 - down 14...

• Revenue up 5.8% to EUR 196.3 million (first half 2011: EUR 185.5 million)
• German revenue up 9.9%; Dutch revenue down 1.5%
• Gross profit as a percentage of revenue in line with same period last year
• Operating profit: EUR 12.9 million (first half 2011: EUR 14.3 million)
• Net profit: EUR 9.1 million (first half 2011: EUR 10.6 million)

 

Beter Bed Holding N.V. posted net profit of EUR 9.1 million for the first six months of 2012 - down 14.0% from the same period last year (first half 2011: EUR 10.6 million). Net profit for the second quarter of 2012 dropped by EUR 1.4 million to EUR 0.2 million.

 

 

Key half-year figures

(in millions of EUR unless stated otherwise)	2012 H1	2011 H1	Change
Revenue	196.3	185.5	5.8%
Gross profit (%)	55.8	55.9
EBIT	12.9	14.3	(9.9%)
Net profit	9.1	10.6	(14.0%)
Earnings per share (in EUR )	0.42	0.49	(14.3%)
Operating cash flow	10.3	7.0	47.1%
	30-6-2012	30-6-2011
Solvency (%)	50.6	53.7

 

Ton Anbeek, Chief Executive Officer:

'We've witnessed increasingly cautious consumer behaviour in virtually all our markets, triggered by the continuing economic uncertainty across Europe. During the first half of 2012 this resulted in a lower number of visitors and lower visitor expenditure, especially in the Netherlands and Spain. Fortunately, the German market has been bucking this trend. Revenue at our German stores increased by almost 10% during the first half of 2012, with revenue at comparable stores increasing by 5%. At our Dutch stores, the 7% increase in the number of stores was unable to fully offset the 5% decline in revenue at comparable stores. The 18% drop in revenue at comparable stores in the Spanish market prompted to a number of changes in the organisation and the store base. Despite the lower prices caused by negative sentiment in Spain, the Netherlands and other countries, we have managed to maintain total gross profit at virtually the same level as 2011. In addition, we have also again gained market share in all markets and have opened yet more new stores in recent months. Our solid balance sheet and healthy cash flow enable us to continue investing in our stores.'

 

Key second-quarter figures 

(in millions of EUR )	2012 Q2	2011 Q2	Change
Revenue	87.8	84.1	4.4%
Gross profit (%)	55.8	55.7
EBIT	0.6	2.4	(76.3%)
Net profit	0.2	1.6	(87.2%)

 

Second quarter 2012

Revenue at comparable stores in Germany increased by 2.8% in the second quarter and declined by the same rate at our Dutch stores. For the group as a whole, revenue at comparable stores dropped by 0.6% during the second quarter.

 

Total revenue increased by 4.4% to EUR 87.8 million during the second quarter (second quarter 2011: EUR 84.1 million). At 55.8%, gross profit for the second quarter of 2012 was marginally higher than for the same period last year (55.7%).The average number of stores increased by 6.4% in the second quarter over the same period last year; this was one of the reasons why second-quarter expenses increased by 8.9%: from EUR 44.5 million to EUR 48.4 million. Due to reorganisation costs in Spain and expenses related to the closure of stores in Spain and the Netherlands, in particular, operating expenses have been increasing more than proportionally. In addition, pension costs in the Netherlands are higher and staff costs are higher in Germany as a result of revenue bonuses.

 

Expressed as a percentage of revenue, expenses for the second quarter increased from 52.9% in 2011 to 55.2% in 2012. Operating profit (EBIT) declined by EUR 1.8 million to EUR 0.6 million in the second quarter (second quarter 2011: EUR 2.4 million). Net profit for the second quarter of 2012 was EUR 0.2 million (second quarter 2011: EUR 1.6 million).

 

Due to the seasonal pattern in consumer demand, revenue and net profit in the second and third quarters are generally lower than during the first and fourth quarters.

 

First half 2012

Revenue for the first half of 2012 increased by 5.8% to EUR 196.3 million (first half 2011: EUR 185.5 million). Revenue at comparable stores dropped by 0.1% during the first half of 2012.

 

Revenue performance per country in the first six months of 2012 was as follows:

Netherlands                   -2%

Germany                      10%

Austria                         13%

Switzerland                   21%

Spain                             2%

Belgium                       35%

Poland                         37%

 

At 55.8%, gross profit as a percentage of revenue remained virtually equal in the first half of the year (first half 2011: 55.9%).

 

 

 

The average number of stores increased by 6.5% during the first half of 2012, versus the same period last year. Driven in part by this growth, expenses during the first six months increased by 8.1%: from EUR 89.4 million to EUR 96.6 million. Operating expenses outpaced the increase in the number of stores, due in part to higher advertising spending in Germany, in particular, higher pension costs in the Netherlands, reorganisation costs in Spain, and expenses related to the closure of stores, particularly in Spain and the Netherlands.

 

Substantially lower visitor numbers in Spain, which were caused by the economic crisis, contributed to the sharp decline in revenue at comparable stores at El Gigante del Colchón during the first half of the year (- 18%), resulting in the implementation of radical cost-cutting measures. The management is focussing intensively on the Spanish formula and is closely tracking the economic developments.

 

Expressed as a percentage of revenue, operating expenses for the first six months increased from 48.2% in 2011 to 49.2% in 2012.

 

Average expenses per store increased by 1.6% for the first half of 2012 due to higher advertising spending, higher pension costs, reorganisation costs in Spain, and expenses related to the closure of stores, particularly in Spain and the Netherlands. Operating profit (EBIT) declined by 9.9% during this period: from EUR 14.3 million to EUR 12.9 million. Expressed as a percentage of revenue, operating profit (EBIT) dropped from 7.7% to 6.6%.

 

The tax burden increased from 25% to 28% during the first six months; this is caused by foregoing loss carry forwards and the relatively larger portion of the revenue generated in Germany, where a higher tax rate applies (on average).

 

Net profit for the first six months declined by 14.0%: from EUR 10.6 million to EUR 9.1 million. Earnings per share for the first half of 2012 were EUR 0.42 (first half 2011: EUR 0.49).

 

Investments and cash flow

Investments for the first half of 2012 totalled EUR 5.7 million (2011: EUR 5.5 million).Total investments in stores were EUR 4.3 million for the first six months of 2012 (2011: EUR 4.1 million); the bulk of the remaining amount was invested in IT. Operating cash flow increased by 47.1%: from EUR 7.0 million in 2011 to EUR 10.3 million in 2012.

 

Financing

Solvency was 50.6% at 30 June 2012; 53.7% at 30 June 2011; and 54.1% at year-end 2011. Net debt at the end of June 2012 totalled EUR 10.0 million, versus EUR 6.1 million at the end of June 2011 and EUR 1.2 million at year-end 2011. During the first six months, the company extended its account overdraft facilities by EUR 10.0 million. The committed account overdraft facilities currently run to EUR 23.7 million.

 

Operational

A total of 63 stores were opened and 45 stores were closed during the first half of 2012. This means that, on balance, a total of 18 stores were added in the first half of 2012. The largest number of stores was opened in Germany in the past six months: a total of 40. As at the end of June 2012, there were a total of 1,205 stores.

 

Number of stores	31-12-2011	Closed	Opened	30-6-2012
Matratzen Concord	963	27	47	983
Beter Bed	87	-	-	87
El Gigante del Colchón	67	4	7	70
BeddenREUS	39	1	6	44
Slaapgenoten/Dormaël Slaapkamers	16	-	1	17
MAV	15	13	2	4
Total	1,187	45	63	1,205

Matratzen Concord

Number of stores	31-12-2011	Closed	Opened	30-6-2012
Germany	800	20	38	818
Netherlands	39	4	1	36
Austria	62	-	4	66
Switzerland	47	-	4	51
Belgium	9	1	-	8
Poland	6	2	-	4
Total	963	27	47	983

Revenue from the cash & carry formula Matratzen Concord totalled EUR 119.3 million for the first half of 2012 (equating to 60.8% of total group revenue); this represents an increase of 10.5% over the same period in 2011. A total of 82.8% of this formula's revenue was generated in Germany. Revenue at comparable stores increased by 3.8%.

 

Beter Bed

This formula operates in the Netherlands, and last year it began operating in Belgium again. The number of Beter Bed stores has remained unchanged. During the first half of 2012, revenue dropped from EUR 54.8 million to EUR 54.0 million, representing a decline of 1.4%. Revenue at comparable stores decreased by 3.6% during this period. Beter Bed accounts for 27.5% of total group revenue.

 

Other formulas

Revenue of the other formulas totalled EUR 23.0 million for the first half of 2012, which means it accounts for 11.7% of total group revenue. This includes the revenues of retail formulas BeddenREUS (the Netherlands), Slaapgenoten/Dormaël Slaapkamers (the Netherlands), El Gigante del Colchón (Spain), MAV (Germany) and wholesaler DBC. This makes the revenue of the other formulas for the first half of 2012 1.0% higher than for the same period last year.

 

Outlook for third quarter 2012

Besides the consistently low consumer confidence in the Netherlands, Spain and other countries, the good summer weather in July and August resulted in lower visitor numbers in all markets.

Based on this information, the company expects operating profit for the third quarter of 2012 to be considerably lower than for the same period in 2011.

 

Interim dividend

The company intends to once again pay an interim dividend in 2012. As customary, further information regarding this interim pay-out will be provided upon publication of the third-quarter figures on 26 October 2012.

 

Profile

Beter Bed Holding N.V. operates in the European bedroom furnishings market. Its activities include retail trade through a total of 1,205 stores at the end of June 2012 that operate via the chains Beter Bed (the Netherlands and Belgium), Matratzen Concord (Germany, Switzerland, Austria, the Netherlands, Belgium and Poland), El Gigante del Colchón (Spain), BeddenREUS, Dormaël Slaapkamers and Slaapgenoten (all three active in the Netherlands) and MAV (Germany). Beter Bed Holding is also engaged in developing and wholesaling branded products in the bedroom furnishings sector in the Netherlands, Germany, Belgium, Spain, Austria, Switzerland and Turkey via its subsidiary DBC International. Beter Bed Holding achieved net revenue of EUR 397.0 million in 2011. A total of 63% of the group's net revenue is generated outside the Netherlands. The company has been listed on NYSE Euronext Amsterdam since December 1996. Beter Bed Holding shares are traded on the Amsterdam Small Cap Index.

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.com

 

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