General

Each country put Beter Bed Holding's adopted strategy ‘From Good to Great 2016-2020’ into practice with varying success in 2017. The central themes of this strategy are: customer satisfaction, retail marketing, further development of the omnichannel proposition, innovation and acceleration in the logistics chain.

Beter Bed Holding’s strategy centres on achieving long-term value creation by seeking to gain market leadership in all the countries in which the group operates. It seeks to achieve this position based on the omnichannel principle, a focus on service, a strong private label brand portfolio and up-to-date and modern stores.

Beter Bed Benelux and Beddenreus continued the positive development of 2016 and saw their revenue, margin and operating profit improve further. This success could be achieved thanks to a range of commercial activities coupled with a substantial acceleration in the logistics chain. The organisation has now been completely aligned to the demands placed on a modern omnichannel retailer and as a result can now expressly lay claim to its position in the bedroom furniture sector. Beter Bed has succeeded in further developing its leading position in the highly competitive Dutch market. A high level of consumer confidence and effective realisation of the strategy went hand in hand in this endeavour. The further development of the online proposition also contributes to long-term value creation.

The revenue of Beter Bed Benelux rose by 8.8%, with revenue increasing further in both the Netherlands and Belgium. Revenue also rose at Beddenreus in the Netherlands. The group continues to seek expansion of the number of Beter Bed stores in Belgium and Beddenreus stores in the Netherlands.

The formats in Germany, Austria and Switzerland had a difficult year in 2017. While in Germany a limited recovery of revenue compared to the trend in 2016 could be seen in the first six months of 2017, revenue in the third and fourth quarter trailed far behind, primarily due to a lower number of visitors. A similar pattern could be discerned in Austria and Switzerland. The demand for box springs is growing in the German bed and mattress market. In addition, the share of the pure players at the bottom of the market is increasing. In 2017, Matratzen Concord took steps forward in both areas en route to gaining a fair share.

The decrease in the fourth quarter was due primarily to supplier-related problems and the ensuing negative publicity that dissuaded consumers from deciding to buy a mattress. Nonetheless a number of key steps towards making the format more contemporary were taken. In addition to the refurbishment of many of the stores, these steps included the implementation of the new e-commerce platform and the introduction of box springs. The management was also changed at multiple positions.

Spain was able to sustain the growth in revenue, despite the number of stores being slightly lower at year-end. Revenue rose by 5.6%.

The development of the Sängjätten format in Sweden acquired in 2016 was extremely positive, which resulted in a positive contribution margin in the last quarter of 2017. The conversion of the format into the Beter Bed format and the introduction of its own brand portfolio formed the foundation for this success.

The conclusion had to be reached in the summer of 2017 that profitable operation of the format Literie Concorde in the south of France in the short to medium term was unlikely. It was consequently decided to close the format and the closure was effected at the end of 2017.

In summary, the group realised revenue of € 416.4 million in 2017, which represents an increase of € 5.9 million (1.5%) compared to the previous year. Growth in revenue in comparable stores amounted to -0.4%.

Gross profit decreased slightly and amounted to 57.5% (2016: 57.8%). The decrease was caused primarily by the increased share of box springs and bed textiles in the revenue. This was countered by improved purchasing conditions, an adjustment in the sales mix and range and product innovation.

Total expenses rose with € 14.0 million to € 225.1 million. This increase was caused mainly by higher marketing costs, the expansion of the omnichannel organisation and the further professionalisation of the different back office departments. In addition, the amortisation costs increased chiefly due to investments in the refurbishment of stores in Germany. Increased revenue at Beter Bed Benelux was accompanied by higher logistics expenses. An amount of approximately € 2 million has also been appropriated for restructuring.

Operating profit decreased by 44.6% to € 14.4 million in 2017 (2016: € 26.0 million). EBITDA as a percentage of revenue decreased to 6.6% (2016: 9.1%). Net profit amounted to € 9.5 million (2016: € 19.0 million); a decrease of 49.9%.

The number of stores decreased by 18 in 2017. The group operated 1,188 stores in seven countries at the end of 2017.