General

2016 can be characterised as a year with multiple and sometimes contrasting faces. The major themes of the ’From Good to Great 2016-2020’ strategic plan, including customer satisfaction, retail marketing, further development of the omnichannel proposition, innovation and acceleration in the logistics chain, have been addressed in all countries.

In the Benelux, major progress has been achieved on all fronts and the strategy has been actively carried out under the leadership of a partially new and younger management team. Striking results were achieved through both a sharp increase in revenue and the expansion of the E-commerce department, product innovations, the expanded sales training program and the enhanced customer focus. The Net Promoter Score, which is an indicator of customer satisfaction, rose from 40 to 50. This means Beter Bed can contend with the top of the retail sector.

This all resulted in 20.9% growth in revenue at Beter Bed Benelux (the market grew by 8.5% according to sector organisation INretail), while there was also already substantial growth in revenue in 2015. Revenue in both the Netherlands and Belgium rose considerably and the renewed Beddenreus format also showed favourable development. The group envisions mainly expansion of the Beter Bed format in Belgium and the Beddenreus format in the Netherlands in the near future.

In contrast to the good results in the Benelux, revenue performance in Germany was more difficult. Even though in line with the mattress market, the decrease in revenue is disappointing. This disappointment is intensified by the fact that a number of important strategic initiatives were not implemented in a timely fashion. This included the introduction of a new digital technical webshop platform aimed at increasing the online and offline attractiveness (attracting more customers) that was not implemented on time due to a delay in its delivery and did not sufficiently achieve the desired effect within the context of growing demand for box springs. The decrease further relates to the rise of the online-only one-size-fits-all mattresses that have been introduced with very high acquisition expenses per order and an exceptionally high level of returns. Revenue in Germany ultimately decreased by 4.0%.

The process of developing Matratzen Concord into an omnichannel organisation and strengthening the management team in the areas of Marketing, Purchasing and E-commerce was nonetheless carried out according to plan. Some of the stores have also been remodelled to give them a contemporary look and feel and the number of stores was increased by a net total of 12. A store was opened in Düsseldorf in late 2016 under the name Boxspring Betten by Concord that offers a wide range of box springs.

In Austria, all BettenMax stores were converted into Matratzen Concords within a short space of time and the stores have since then contributed to the result. The situation in Switzerland has remained difficult since the adjustment to the exchange rate in early 2015.

The expansion in Spain was continued and the number of stores at year-end 2016 stood at 48 (year-end 2015: 36). Revenue rose by 21.9%.

It was decided in the summer of 2016 to expand Literie Concorde further in southern France. Three stores were opened in late 2016, bringing the total number of stores to five. There will be a total of six stores, most of which are located in the Rhone valley, participating in the pilot at the time of the evaluation in late 2017.

The acquisition of Sängjätten in Sweden was finalised in the summer of 2016. The group took possession of 16 own stores as a result of this acquisition. In addition, 9 stores are operated by franchisees. The own stores were converted to the Beter Bed format in late 2016 and were given, among other things, a new, up-to-date (Beter Bed) range.

In summary, the group realised revenue of € 410.5 million in 2016, which represents an increase of
€ 25.1 million (6.5%) compared to the previous year. Growth in revenue in comparable stores amounted to 2.8%.

Gross profit once again developed positively and rose to 57.8% (2015: 57.7%). Improved purchasing conditions, an adjustment in the sales mix and range and product innovation contributed substantially to this result.

Average expenses per store amounted to € 176,700 (2015: € 166,200). The increase was primarily caused by the development of the omnichannel organisation, efforts in the field of customer satisfaction (customer care and training for logistics and sales employees), further professionalisation of, for example, BI, IT and logistics departments, management development training programs in both the Netherlands and Germany, the growth in the number of stores, the conversion of the Swedish stores and the increased revenue at Beter Bed Benelux, which is accompanied by higher logistics expenses.

Operating profit decreased by 15.2% to € 26.0 million in 2016 (2015: € 30.7 million). EBITDA as a percentage of revenue decreased to 9.1% (2015: 10.7%). Net profit amounted to € 19.0 million (2015: € 22.6 million); a decrease of 15.7%.

The number of stores rose by 45 in 2016, 16 of which were the result of the acquisition of Sängjätten in Sweden. The group operated 1,206 stores in eight countries at the end of 2016.