Beter Bed revenue under pressure in 2013

2013 net revenue fell by 10% to € 357.4 million (2012: € 397.3 million).Gross profit rose to 56.9% (2012: 56.3%).Non-recurring expenses mainly for streamlining the Benelux formula portfolio and store closures in Spain amounted to € 7.4 million.2013 net profit including non-recurring expenses and write-downs fell by 43.1% to € 8.2 million (2012: € 14.4 million); earnings per share stood at € 0.38 (2012: € 0.67).Normalised net profit in 2013 (excluding non-recurring expenses) decreased by 36.8% to € 14.0 million (2012: € 22.2 million); normalised earnings per share stood at € 0.65 (2012: € 1.02).Dividend proposal: € 0.27 per share, payout ratio of 72%.

       
Key figures for the year

(in millions of € unless stated otherwise) 20132012Change Revenue 357.4 397.3 -10.0% Change in revenue at comparable stores -11.2% -4.7% Gross profit (%) 56.9% 56.3% EBITDA 22.3 38.1 -41.6% Operating profit/EBIT 12.3 23.7 -48.2% Net profit 8.2 14.4 -43.1% Earnings per share (in €) 0.38 0.67 -43.3% Proposed dividend (in €) 0.27 0.47 -42,6% Payout ratio 72% 70% Solvency 56.6% 50.4% Number of stores 1,175 1,219 -3.6%
Normalised EBITDA 27.8 40.4 -31.3% Normalised operating profit/EBIT 19.6 31.2 -37.0% Normalised net profit 14.0 22.2 -36.8% Normalised earnings per share (in €) 0.65 1.02 -36.9%

  

Key figures for the fourth quarter

(in millions of € unless stated otherwise) Q4 2013Q4 2012Change Revenue 90.8 100.8 -10.0% Change in revenue at comparable stores -9.2% -10.5% Gross profit 58.3% 58.0% Operating profit/EBIT 0.5 4.5 -87.9% EBITDA 3.8 11.9 -68.3% Net profit 0.0 0.9 -102.8% Earnings per share (in €) 0.00 0.05 -103.1%
Normalised operating profit/EBIT 6.9 10.6 -34.4% Normalised EBITDA 8.3 13.0 -36.0% Normalised net profit 4.9 7.5 -34.8% Normalised earnings per share (in €) 0.22 0.34 -35.0%

Ton Anbeek, Chief Executive Officer:
'2013 was a difficult year for our company. With the exception of Austria and Switzerland, the propensity to buy was under pressure in all markets, which was primarily reflected in lower visitor numbers. Despite a higher conversion, this ultimately led to 10% lower revenue. Germany saw a decline in the propensity to buy in the home furnishings segment in general and the bedroom furniture segment in particular. Our market share nevertheless grew. Consumer confidence dropped to a low point in the Netherlands. This led to fewer visitors in the stores. Two of our formulas, Slaapgenoten and Matrassen Concord in the Benelux, were hit particularly badly by this development, which forced us to decide to discontinue these formulas and to shift the strategic focus in the Netherlands and Belgium to Beter Bed and BeddenREUS. The group was able to raise gross profits further and achieve additional cost-savings in 2013. The net working capital was also reduced.

In anticipation of recovery of the markets, which is not expected before the fourth quarter of this year, we will begin working on relaunching and fine-tuning all the formulas in all the countries in which we are active. The initial steps in this process have already been taken for Beter Bed Benelux in early 2014. We will also continue to focus on measures in the field of cost-savings and improving margins. The group's financial position remains strong, with a healthy balance sheet and a strong cash position. This, combined with the commitment of our motivated employees, provides us with the foundation to look to the future with confidence despite the current difficult market conditions.'

Fourth quarter 2013

The revenue of Beter Bed Holding decreased by 10.0% to € 90.8 million in the fourth quarter of 2013 (fourth quarter 2012: € 100.8 million). The revenue at comparable stores fell by 9.2% (fourth quarter 2012: -10.5%).

Revenue performance per country in the fourth quarter was as follows:

Germany -4% The Netherlands -19% Switzerland -3% Austria +1% Spain -52% Belgium -14%     

Revenue in Germany decreased by 4% in the fourth quarter. Revenue at comparable stores fell by 7% in the fourth quarter (fourth quarter 2012: -8%). This decrease in revenue is attributable to low consumer spending in Germany within the home furnishings segment, which includes mattresses. In the Netherlands, a combination of a lower-than-average number of stores and a 16% decrease in revenue at comparable stores in the fourth quarter led to a 19% decrease in revenue. In Spain, the drop in revenue at comparable stores amounted to 14% in the fourth quarter.

Gross profit amounted to 58.3% in the fourth quarter of 2013 (fourth quarter 2012: 58.0%). Operating expenses decreased by 3.0% from € 54.0 million in 2012 to € 52.3 million in 2013. Average expenses per store increased by 0.8% in the fourth quarter of 2013. Operating profit (EBIT) in the fourth quarter of 2013 amounted to € 0.5 million (2012: € 4.5 million). Net profit in the fourth quarter of 2013 decreased to € 0.0 million (2012: € 0.9 million).

  

Streamlining of Benelux formula portfolio

For the sake of portfolio rationalisation Beter Bed Holding announced on 22 January 2014 its decision to close the Slaapgenoten and Matrassen Concord formulas in the Benelux in 2014. As a result of this the fixed assets of these formulas have been written down, a stock provision has been made and a provision for onerous rental contracts has been formed with a total negative effect on operating profit in 2013 of € 6.4 million and € 4.9 million on net profit.

Full year 2013

Revenue for the full year 2013 decreased by 10% to € 357.4 million (2012: € 397.3 million). This decline is due to the decrease in revenue at comparable stores of 11.2% (2012: -4.7%). The number of stores decreased by 44 to 1,175 (year-end 2012: 1,219 stores), primarily as a result of store closures in Spain. Continuing low consumer confidence in the Netherlands led to a 16% decrease in revenue at comparable stores. Consumers' reduced propensity to buy in the home furnishings and bedroom furnishings segments in Germany and the bad weather in the first half of the year led to an 8% decrease in revenue at comparable stores on an annualised basis.

Revenue performance per country in the full year 2013 was as follows:

Germany -5% The Netherlands -17% Switzerland +2% Austria +4% Spain -48% Belgium -25%     

Gross profit rose to 56.9% (2012: 56.3%) in 2013 due to substantially improved purchasing conditions. As a result of the initiated cost-savings program, operational expenses fell from € 200.1 million to € 190.9 million. Costs as a percentage of revenue rose from 50.4% to 53.4%.

Operating profit for the full year 2013 amounted to € 12.3 million (3.4% of revenue) compared to € 23.7 million (6.0% of revenue) in 2012. Net profit in 2013 amounted to € 8.2 million (2012: € 14.4 million). Earnings per share amounted to € 0.38 in 2013 (2012: € 0.67).

2013 and 2012 normalised

In addition to the non-recurring expenses of € 6.4 million in connection with the closure of the Slaapgenoten and Matrassen Concord formulas in the Benelux, the company incurred non-recurring expenses totalling € 1.0 million in early 2013 for the closure of the stores in Spain and the reorganisation of the head office in the Netherlands.

An amount of € 7.5 million in additional expenses was included in the 2012 financial statements for the write-down of the activities in Spain and other reorganisation expenses.

The normalised operational expenses decreased in 2013 by € 8 million to € 184.6 million (2012: € 192.6 million). The normalised average expenses per store decreased by 3.0% in 2013. The normalised operating profit fell from € 31.2 million (7.9% of revenue) to € 19.6 million (5.5% of revenue). Normalised net profit amounted to € 14.0 million in 2013 (2012: € 22.2 million).

Investments, cash flow and balance sheet positions

Total investments in 2013 amounted to € 5.4 million (2012: € 10.9 million). A total of € 3.7 million of this amount was invested in new and existing stores in 2013 (2012: € 7.2 million). The remaining amount has been invested primarily in IT. The cash flow (net profit plus depreciations and write-downs) amounted to € 18.2 million in 2013, compared to € 28.8 million in 2012. Solvency at year-end 2013 amounted to 56.6% (2012: 50.4%). Interest-bearing debt amounted to € 5.0 million at year-end 2013 (year-end 2012: € 12.3 million).

Operational

A total of 75 stores were opened and 119 stores were closed in 2013. The total number of stores consequently decreased by 44 on balance. The company had 1,175 stores at the end of 2013.

Number of stores   31-12-2012ClosedOpened   31-12-2013 Matratzen Concord     1,004        72          70  1,002 Beter Bed         88          -           4       92 El Gigante del Colchón         63        32           -       31 BeddenREUS         44         4           -       40 Slaapgenoten         16         7           -        9 Schlafberater.com           4         4           1        1 Total    1,219     119         75   1,175

Matratzen Concord

The revenue of the cash & carry retail formula Matratzen Concord amounted to € 238.4 million in 2013 (66.7% of the total group revenue). This represents a decrease of 5.1% compared to 2012. Revenue at comparable stores decreased by 7.7%. The formula closed a net total of two stores in 2013. Twelve stores were opened on balance in Germany. The number of stores in the other countries decreased.

 Number of stores     31-12-2012      Closed    Opened    31-12-2013  Germany      852  44 56    864  Austria       67    7   4     64  Switzerland       52  10   9     51  The Netherlands       27    9   -     18  Belgium        6    2   1       5  Total  1,004 72 701,002

Beter Bed

This formula is active in the Netherlands and Belgium. The number of Beter Bed stores grew by four from 88 to 92 as a result of store openings in Belgium. Revenue fell by 12.6% in 2013 to € 89.5 million (2012: € 102.4 million). The formula consequently contributes 25.0% to the total group revenue. Beter Bed's revenue at comparable stores fell by 13.5% for the full year 2013. Online revenue performed according to expectation in 2013 and contributed approximately 5% to the total revenue.

Other formulas

The revenue of the other formulas amounted to € 29.5 million in 2013 (2012: € 43.7 million). This includes the revenue of the BeddenREUS (Netherlands), Slaapgenoten (Netherlands), El Gigante del Colchón (Spain) retail formulas and the wholesaler DBC. These other formulas contribute 8.3% 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 2013, the company paid an interim cash dividend of € 0.20 per share. A proposal will be submitted to the Annual General Meeting of Shareholders, scheduled for 19 May 2014, to distribute a final cash dividend of € 0.07. This brings the dividend for 2013 to € 0.27 per share (2012: € 0.47 per share) and 72% of net profit will be distributed to shareholders.

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 19 May 2014, and for which an unqualified auditor's report has been issued by the independent auditor.

Developments and outlook 2014
The company expects that the economic situation in the Netherlands will only begin to recover cautiously at the end 2014 or beginning of 2015. This will be followed by an increase in consumer spending. It is also still too early to be able to detect a change in German consumers' buying behaviour. There will consequently not be a substantial increase in revenue in the short term. The various formulas will be fine-tuned further in the months ahead, with the related focus being on increasing the number of visitors, the conversion, the service and customer satisfaction. In addition, priority will be placed on improving margins, reducing costs and closing poor-performing stores.

Profile

Beter Bed Holding N.V. operates in the European bedroom furnishings market. Its activities include retail trade through a total of 1,175 stores at the end of 2013 that operate via the chains Beter Bed (active in the Netherlands and Belgium), Matratzen Concord (active in Germany, Switzerland, Austria, the Netherlands and Belgium), El Gigante del Colchón (active in Spain), BeddenREUS and Slaapgenoten (both active in the Netherlands). Beter Bed Holding is also active in the field of developing and wholesaling branded products in the bedroom furnishing sector in the Netherlands, Germany, Belgium, Spain, Austria, Switzerland and the United Kingdom via its subsidiary DBC International. Beter Bed Holding N.V. achieved net revenue of € 357.4 million in 2013. More than 67% of the group's net revenue is realised outside the Netherlands. The company has been listed on the NYSE Euronext Amsterdam since 1996 and is included in the Amsterdam Small Cap Index.

Financial Calendar

Analysts' Meeting annual results 2013                         week 11           14.03.2014

Publication Annual Report 2013                                    week 13           24.03.2014

Annual General Meeting of Shareholders                      week 21           19.05.2014

Publication Q2 2014 trading statement                         week 29           18.07.2014

Publication interim figures 2014                                week 34        22.08.2014                  

Analysts' Meeting interim figures 2014                         week 34           22.08.2014

Publication Q4 2014 trading statement                         week 4             23.01.2015

For further information: _____________________________________________________________________________

Ton Anbeek Bart Koops CEO CFO +31 (0)413 338819 +31 (0)413 338819 +31 (0)6 53662838 +31 (0)6 46761405 ton.anbeek@beterbed.nlbart.koops@beterbed.nl

 

 

Please click on the link below for the full version of the press release.

 

press release 14-3-2014.pdf


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Source: Beter Bed Holding NV via Globenewswire
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