BBED Beter Bed Holding NV

• Revenue increases by 5.7% to € 196.7 million.
• Like-for-like order intake: + 3.5%.
• Gross profit rises by 0.4% to 57.0%.
• EBITDA increases by € 1.6 million (10.3%) to € 17.1 million.
• Net profit rises by 7.4% to € 8.4 million.

Key figures interim results
(in millions of € unless stated otherwise)

Ton Anbeek, Chief Executive Officer
'The strategic decision to enable the company to develop into an omnichannel retailer with a marketing and advertising policy aimed at customer satisfaction and innovation is producing results given the development of the online revenue and revenue in our stores in the first six months of 2016. This is revealed most clearly in the Benelux countries where the execution of the 'From Good to Great' strategy is taking place according to plan. With some delay the German-speaking countries will carry out the same strategy. Combined with a strong comparative basis, this provides an explanation for the lower like-for-like growth. Gross profit and EBIT also showed healthy growth. While great importance is placed on cost control, the expenses were higher in the first six months of 2016. This is due in part to the new strategy in which further professionalisation of the organisation is a top priority. Non-recurring expenses were also recorded in the first six months of 2016 that relate to logistics tests/studies, omnichannel/ecommerce, marketing projects and the acquisition of Sängjätten. We expect Sängjätten to contribute to profit from the first half of 2017 onwards.'

Key figures second quarter results
(in millions of € unless stated otherwise)

Second quarter of 2016

Order intake in comparable stores rose in the second quarter of 2016 in all the countries in which the group operates, with the exception of Germany and Switzerland. The order intake in comparable stores in the Netherlands increased by 15.9% and decreased by 4.0% in Germany. Like-for-like order intake growth amounted to 2.5% for the entire group.

Total revenue increased by 7.0% to € 89.8 million in the second quarter. The growth in revenue was caused on the one hand by the positive like-for-like development and on the other hand by the increase in the average number of stores by 3.3% as a result of organic growth and acquisitions. Revenue also rose as a result of a high order portfolio at the beginning of the quarter.

Gross profit in this period amounted to 57.4%, representing a 0.7% increase compared to the second quarter of 2015. Gross profit rose as a result of improved purchasing conditions and range improvements.

Total expenses increased by 8.2% to € 50.0 million in the second quarter of 2016. This rise was caused by the increase in the average number of stores and the growth in like-for-like, and relates primarily to logistics and staff costs (increased number of employees and variable remuneration). Investments in the further professionalisation of the organisation, in fields including retail marketing, training and ecommerce, also led to higher amortisation, staff and IT expenses. In addition, € 1.0 million in non-recurring expenses were included in the second quarter results of 2016, with the largest proportion of this amount being connected to the strategy development. Average expenses (excluding DBC) per store rose by 5.2% in the second quarter (excluding non-recurring expenses, the increase was 3.0%).

EBITDA totalled € 4.3 million in the second quarter. This is an increase of € 0.6 million (16.8%) compared to the same period of last year. Total operating profit (EBIT) increased in the second quarter from € 1.3 million to € 1.5 million. Net profit in the second quarter of 2016 totalled € 1.0 million (second quarter 2015: € 1.0 million).

Revenue and net profit are generally lower in the second and third quarter than in the first and fourth quarter due to the seasonal pattern in consumer demand.

First six months of 2016
Revenue rose by 5.7% to € 196.7 million in the first six months of 2016. Order intake at comparable stores rose by 3.5% during this period.

Revenue performance per country in the first six months of 2016 was as follows:

The higher revenue in the Netherlands was attributable, in addition to a pick-up in demand resulting from the recovering housing market, primarily to the execution of the new 'From Good to Great' strategy that emphasises omnichannel ecommerce, retail marketing, customer satisfaction, innovation and logistics. Revenue in Germany decreased due to lower footfall in our stores and the strong comparative basis (like-for-like H1 2015: 10.2%). The growth in Austria and Spain is primarily attributable to an increase in the number of stores as a result of organic expansion and acquisitions. The group has gained market share in almost all the countries in which it operates.

Gross profit amounted to 57.0% in the first six months of 2016 and is consequently 0.4% higher than in the same period of last year (H1 2015: 56.6%). The increase was once again achieved mainly through improved purchasing conditions and range adjustments.

The average number of stores in the first six months of 2016 rose by 3.1% compared to the first six months of last year. Total expenses increased by 6.0% from € 94.8 million to € 100.5 million in the first six months of 2016. This increase largely stems from the aforementioned increase in the average number of stores and (investments in) the further professionalisation of the organisation. Average expenses (excluding DBC) per store rose by 3.2% in the first six months of 2016.

EBITDA totalled € 17.1 million in the first six months of 2016. This amounts to an increase of € 1.6 million (10.3%) compared to the same period of last year. Operating profit (EBIT) increased by 10.3% to € 11.6 million in this period. Operating profit as a percentage of revenue rose from 5.7% to 5.9%.

Net profit rose by 7.4% from € 7.8 million to € 8.4 million in the first six months of 2016.

Earnings per share in the first six months of 2016 amounted to € 0.38 (first six months of 2015: € 0.36).

Investments
Investments in the first six months of 2016 totalled € 8.9 million (first six months of 2015: € 8.7 million). During this period, investments in stores amounted to € 4.5 million (first six months of 2015: € 4.8 million). The assets acquired through the acquisition of Sängjätten total € 2.1 million, and consist of € 0.3 million in tangible fixed assets and € 1.8 million in intangible assets.

Financing/solvency
Solvency amounted to 57.9% on 30 June 2016, compared to 58.6% on 30 June 2015 and 57.5% at year-end 2015.

Operational
53 stores were opened and 38 stores were closed in the first six months of 2016. The group had a total of 1,176 stores at the end of June 2016.

Number of stores

Matratzen Concord

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Matratzen Concord
Revenue of the cash & carry format Matratzen Concord in the first six months of 2016 totalled € 123.6 million (62.8% of total group revenue). This is a decrease of 1.1% compared to the first six months of 2015. Of the revenue of this format, 83.1% was achieved in Germany and 16.9% in Austria and Switzerland. Revenue at comparable stores decreased by 4.1%.

Beter Bed
This format operates in the Netherlands and Belgium. Revenue grew in the first six months of 2016 by € 10.7 million to € 61.1 million, which equals an increase of 21.2%. Revenue in comparable stores increased by 20.9% in the first six months of 2016. Beter Bed contributed 31.1% to the total group revenue.

Other formats
Revenue of the other formats rose by 11.3% in the first six months of 2016 to € 12.0 million. The other formats contributed 6.1% to the total group revenue. This includes the revenues of the retail formats Beddenreus (The Netherlands), El Gigante del Colchón (Spain), Literie Concorde (France), Sängjätten (Sweden) and the wholesaler DBC.

Outlook for third quarter of 2016
The revenue trends in the Benelux, Spain and France are continuing. Demand continues to lag behind, primarily in Germany and Austria, despite a less stronger comparative basis .

Interim dividend
The company plans to pay an interim dividend in 2016. As is customary, further information regarding this matter will be provided upon the publication of the trading update on 28 October 2016.

Profile

Beter Bed Holding is a European retail organisation that strives to offer its customers a comfortable and healthy night's rest every night at an affordable price. The company does this via stores and its own webshops through the formats:

• Matratzen Concord, located in Germany, Switzerland and Austria.
• Beter Bed, located in the Netherlands and Belgium.
• Beddenreus, located in the Netherlands.
• El Gigante del Colchón, located in Spain.
• Literie Concorde, located in France.
• Sängjätten, located in Sweden.

The retail formats ensure products of good quality, offer customers the best advice and always the best possible deal. Beter Bed Holding is also active as a wholesaler of branded products in the bedroom furnishing sector via its subsidiary DBC International. The international brand M Line is sold in the Netherlands, Germany, Belgium, Austria, Switzerland, Spain, France and the United Kingdom. The current total number of stores is 1,176. In 2015, the company achieved net revenue of € 385.4 million. 70.1% of this figure was realised outside the Netherlands. Beter Bed Holding N.V. has been listed on the Euronext Amsterdam since December 1996 and its shares (BBED NL0000339703) have been included in the AScX Index.

In case of textual contradictions between the Dutch and the English interim report, the first shall prevail.

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