Annual Report 2016


Dear Reader,

Beter Bed Holding looks back on a year in which performance varied sharply from country to country. Ultimately the group as a whole realised higher revenue with slightly rising margins. It did so, however, with higher expenses that caused operating profit to decrease slightly in 2016 compared to previous year.

It was possible to achieve growth in revenue by realising more revenue in existing stores, increasing the number of stores and the acquisition of Sängjätten in Sweden.

The group succeeded in continuing the outstanding performance of the previous year in the Benelux. Both revenues and margins improved and investments in the omnichannel strategy with a primary focus on retail marketing, customer satisfaction, innovation and acceleration in logistics bore fruit. The key indicator for operational performance, the Net Promoter Score, used to measure customer satisfaction, rose at both the Beter Bed formats in the Benelux and at the Beddenreus format in the Netherlands.

The success in the Benelux is, in addition to a successful execution of the ‘From Good to Great’ strategy, due in part to favourable macroeconomic developments such as lower mortgage interest rates. There also continues to be a recovering housing market, a high level of consumer confidence and high propensity to buy. Customers give high ratings to the up-to-date range, offered in an attractive store ambience, combined with outstanding service and advice.

The situation was different at primarily Matratzen Concord (MC) in Germany. The trend of negative growth in revenue that already became visible in 2015 continued throughout the entire year in line with developments in the mattress market. While German consumer confidence remained unabatedly high, the propensity to buy in the bed and mattress segment was clearly lower than in previous years. Matratzen Concord was ultimately able to maintain its position in the German mattress market.

The execution of the first year of the new strategy incurred a delay in all the countries in which MC operates due to the late delivery of the new technical webshop platform in late 2016.

MC Austria was able to benefit both from the increase in the number of stores owing to the acquisition of BettenMax in late 2015 and successful promotions. In closing, MC Switzerland continues to struggle with the consequences of the substantial adjustment to the exchange rate in 2015, which continues to negatively affect consumer spending.

The margin on goods once again rose slightly in 2016. This increase was achieved through improvements in conditions, the range, product innovation and, when possible, price increases.

Expenses rose primarily as a result of the expansion of the omnichannel and customer satisfaction activities in the Netherlands and Germany as part of the strategy, the increase in the number of stores and the higher logistics expenses Beter Bed Benelux had to incur in connection with its full-service concept (targeted advice, home delivery and installation) due to the sharp growth in revenue.

The formats in Spain and France cautiously continued the expansion that began in 2015 and posted increased revenue. The own stores of the Sängjätten format in Sweden acquired in the second half of 2016 have been converted and restyled and given a new contemporary range.

Finally, 2016 saw the successful introduction of our M line brand in the UK market where the range is offered through the Dreams bed format that operates nationwide.

While economic developments in the various countries appear to be favourable, the outlook for 2017 is primarily determined by the extent to which revenue recovers in the German market (more than 50% of group revenue). Through the final delivery of the new webshop platform in the first quarter of 2017 and a refined range, promotion and advertising strategy, we expect to see a slight improvement in the first half of 2017.

Given the results achieved so far, we will continue to pursue the various objectives set out in our ‘From Good to Great 2016-2020’ strategic plan with the primary focus being on maximising customer satisfaction in an omnichannel environment, which will be promoted by a sharpened retail marketing focus and innovations and supported by an acceleration in logistics. The company furthermore aims to gain market leadership in the various markets through like-for-like growth in revenue and expansion.

After driving organic growth in revenue across the company through various new initiatives, investments and experiments for a number of years, a stringent cost control and investment policy will be followed in 2017.

The company was once more able to take steps forward towards further professionalisation in 2016. Everyone in the company worked with commitment and passion to enable this.

We are fully aware of our employees' high level of dedication and consequently wish to thank each employee for her or his contribution.

Yours sincerely,

Ton Anbeek,
Chief Executive Officer

Uden, The Netherlands, 16 March 2017

On the annual report website an eco-version of the annual report is available.