Beter Bed Holding N.V. — Earnings Release 2010

Mar 10, 2011

BETER BED HOLDING N.V. PRESS RELEASE ANNUAL RESULTS 2010

Uden, the Netherlands, 10 March 2011

Contents

1.	Press release – annual results 2010	3
2.	Consolidated balance sheet…………………………………………………………………….	8
3.	Consolidated income statement …………………………………………………………	9
4.	Consolidated cash-flow statement……………………………………………………	10
5.	Consolidated statement of comprehensive income…………………………………	11
6.	Consolidated statement of changes in equity………………………………………………	12

1. Press release

Beter Bed books a record year and distributes entire net profit to shareholders

• Increase in revenue over the full year 2010 of 3.7% to € 374.7 million.
• Record gross profit over both the full year 2010 (55.9%) and the fourth quarter of 2010 (58.5%).
• Net profit up 16.8% to a record of € 27.9 million in 2010.
• Earnings per share: € 1.30 (2009: € 1.12).
• Proposed dividend: € 1.30 per share, pay-out ratio 100%.
• Profit forecast for first quarter 2011 at least equal to first quarter 2010 (€ 8.2 million).

2010	2009	Change
374.7	361.5	+3.7%
-1.3%	-3.1%
55.9%	54.7%
37.5	32.6	+14.8%
27.9	23.9	+16.8%
1.30	1.12	+16.1%
53.4%	50.5%
1.30	1.04	+25.0%

Key figures for the fourth quarter
(in millions of € unless stated otherwise)	Q4 2010	Q4 2009	Change
Revenue	102.6	101.9	+0.7%
Change in revenue at comparable stores (%)	-4.5%	+7.9%
Gross profit (%)	58.5%	56.7%
Operating profit/EBIT	15.8	15.7	+0.9%
Net profit	11.9	11.9	+0.1%

Ton Anbeek, Chief Executive Officer:

'We are proud to be able to report a record year with respect to revenue, gross profit and net profit, certainly in a year in which consumers showed continuing caution, there were twice as many days of snow as in 2009, and our most important markets once again contracted. The increase in revenue, the expansion of our store network, the increased gross profit and the high level of cost consciousness all contributed to this net profit record achievement, which without the huge commitment and professionalism of our staff would not have been possible. Our strong balance sheet and relatively stable prospects have put us in a position this year to be able to distribute our entire net profit to our shareholders.'

Fourth quarter 2010

The revenue in the fourth quarter of 2010 of € 102.6 million was 0.7% higher than in the fourth quarter of 2009 (€ 101.9 million). Revenue at comparable stores fell by 4.5% (Q4 2009: +7.9%). Revenue performance per country in the fourth quarter was as follows:

The Netherlands	3%
Germany	-4%
Austria	9%
Switzerland	26%
Spain	7%
Belgium	13%
Poland	50%	(four stores)

In addition to the increase in the number of stores, the strong increase in revenue in Switzerland was partly due to the appreciation of the Swiss franc against the euro. In Spain, we were able to realise growth in revenue in the second half of 2010 of 6%, and for the first time in 14 quarters, a revenue growth at comparable stores of 4% was realised in the fourth quarter.

The gross profit in the fourth quarter of 2010 came to 58.5%, compared to 56.7% in the same period in 2009. Operating expenses rose, partly due to the net increase of 23 stores, from € 42.1 million to € 44.2 million. The average expenses per store rose marginally in the fourth quarter of 2010. The operating profit (or EBIT) in the fourth quarter of 2010 amounted to € 15.8 million (15.4% of revenue) compared to € 15.7 million (15.4% of revenue) in the fourth quarter of 2009. The net profit of € 11.9 million was the same as the net profit in the fourth quarter of 2009.

Full year 2010

Revenue over the full year 2010 increased by 3.7% from € 361.5 million in 2009 to € 374.7 million in 2010, partly due to the growth in the number of stores. The number of stores rose by 59 from 1,064 at the end of 2009 to 1,117 at the end of 2010. Revenue at comparable stores on the contrary fell by 1.3%. The company had to cope with disappointing visitor numbers in its most important markets, the Netherlands and Germany, as a result of more than double the number of days of snow last year than occurred in 2009, as well as a warm period during the summer. Consumer spending on bedroom products was lower in 2010 than in 2009. Nevertheless the company once again managed to increase its market share in 2010. Revenue performance per country in the full year 2010 was as follows:

The Netherlands	7%
Germany	0%
Austria	8%
Switzerland	25%
Spain	-2%
Belgium	10%
Poland	48%	(four stores)

The continuous effort to improve the gross profit also made an important contribution to the result in 2010. The gross profit rose from 54.7% in 2009 to 55.9% in 2010. Operating expenses rose, partly as a result of the increase in the number of stores, from € 165.2 million to € 172.0 million. As a percentage of revenue, expenses rose slightly from 45.7% to 45.9%. Average expenses per store also rose marginally in 2010.

The operating profit for the full year 2010 came to € 37.5 million (10.0% of revenue), compared to € 32.6 million (9.0% of revenue) in 2009. The tax burden fell from 25.2% over the full year 2009 to 24.6% for the full year 2010. This was due to factors including the realisation of tax-losses from the past, whereby the tax burden was € 0.4 million lower than in the same period in the previous year. Net profit came to € 27.9 million compared to € 23.9 million in 2009. Earnings per share came to € 1.30 in 2010 (2009: € 1.12).

Total investment in 2010 amounted to € 8.2 million (2009: € 6.3 million). In 2010, the majority of this sum, € 6.7 million, was invested in new and existing stores. Most of the remainder was invested in IT. Cash flow (net profit plus depreciation) in 2010 amounted to € 35.8 million, compared to € 31.7 million in 2009. The solvency ratio at year-end 2010 stood at 53.4% (2009: 50.5%).

The company's interest-bearing debt at year-end 2010 amounted to € 7.0 million (year-end 2009: € 9.0 million).

Operational

A total of 112 stores were opened and 59 stores were closed in 2010. This means that, on balance, a total of 53 stores were added, bringing the total at year-end 2010 to 1,117.

Number of stores	31-12-2009	Closed	Opened	31-12-2010
Matratzen Concord (incl. MAV)	883	46	95	932
Beter Bed	84	1	2	85
El Gigante del Colchón	51	9	11	53
BeddenREUS	34	3	4	35
Slaapgenoten/Dormaël Slaapkamers	12	-	-	12
Total	1,064	59	112	1,117

Matratzen Concord (incl. MAV)

Revenue from the cash & carry formula Matratzen Concord amounted to € 219.2 million in 2010 (58.5% of the total group revenue). This is an increase of 1.7% compared to 2009. Revenue at comparable stores declined by 3.8%.

84% of the revenue from Matratzen Concord was realised in Germany in 2010.

49 new stores were opened on balance in 2010, with 31 new stores in Germany. On balance, six new stores were opened in Austria, four in Switzerland, six in the Netherlands, one in Belgium and one in Poland.

Number of stores	31-12-2009	Closed	Opened	31-12-2010
Germany	761	39	70	792
The Netherlands	32	3	9	38
Austria	46	1	7	52
Switzerland	34	3	7	38
Belgium	7	-	1	8
Poland	3	-	1	4
Total	883	46	95	932

Beter Bed

This formula operates in the Netherlands. The number of Beter Bed stores rose by one from 84 to 85 as a result of two openings and one closure. Revenue increased by 5.9% from € 107.4 million in 2009 to € 113.7 million in 2010. This formula contributed 30.3% of the total group revenue. Revenue at comparable stores increased by 3.0% in the full year 2010.

Other formulas

The other formulas realised revenue of € 41.8 million in 2010 (2009: € 38.5 million). This includes the revenue generated by the retail formulas BeddenREUS (the Netherlands), Slaapgenoten/Dormaël (the Netherlands), El Gigante del Colchón (Spain) and the wholesaler DBC. The revenue in 2010 was 8.4% higher than in 2009. DBC produced a particularly strong performance, with revenue growth of 30.1%. The other formulas contributed 11.2% to total group revenue.

Dividend

An interim dividend of € 0.47 per share was distributed in cash in November 2010. A proposal will be made to the General Meeting of Shareholders to be held on 28 April 2011 to distribute a final cash dividend of € 0.83.

This will bring the dividend for 2010 to € 1.30 per share (2009: € 1.04 per share) and means that the entire net profit for 2010 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 to the Annual General Meeting of Shareholders on 28 April 2011 and for which an independent auditor's report of approval has been provided.

Developments in the early months of 2011 and outlook

The market conditions for Beter Bed Holding are expected to remain challenging in 2011. Most consumers are uncertain regarding the future. Their willingness to buy is expected to remain relatively low. Furthermore, the number of removals - which is an important factor in the market for bedroom products - does not lead the company to expect any increase in the near future,. The same applies to the number of new-build homes.

Despite these difficult market conditions, our tightened retail marketing policy in 2011 will continue to focus on winning market share in all the markets in which the company operates.

In addition to our continuing international expansion, in 2011 specific attention will be devoted to the potential for expanding our existing formulas in the Netherlands.

In previous years, the net increase in new stores (the balance of openings and closures) has been between 50 and 100 stores annually. Depending on the opportunities in the real estate market and the general economic developments, our intention is to achieve a figure towards the upper end of this range in 2011.

2011 began with a lower order book in comparison to the beginning of 2010. This was due to a lower order intake in November and December in 2010 than in those months in 2009. The lower order book will lead to lower revenue in the first quarter of 2011 for the formulas that operate with an order book.

In the first quarter of 2010, the tax burden was € 0.4 million lower as a result of the possibility of realising non-recurring tax-losses, among other factors.

Despite the above, the company expects to be able to realise net profit in the first quarter of 2011 at least equal to that in the first quarter of 2010, when net profit amounted to € 8.2 million, partly due to strong promotional campaigns.

Profile

Beter Bed operates in the European bedroom furnishings market. Its activities include retail trade through a total of 1,117 stores at the end of 2010 that operate via the chains Beter Bed (active in the Netherlands), Matratzen Concord (active in Germany, the Netherlands, Austria, Switzerland, Belgium and Poland), El Gigante del Colchón (active in Spain), BeddenREUS, Dormaël and Slaapgenoten (all three active in the Netherlands) and MAV (active in Germany). Beter Bed Holding is also active in the field of developing and wholesaling branded products in the bedroom furnishings sector in the Netherlands, Belgium, Germany and Spain via its subsidiary DBC International. Beter Bed Holding achieved net revenue of € 374.7 million in 2010. The company has been listed on Euronext Amsterdam since December 1996. The Beter Bed Holding share is included in the Amsterdam Small Cap Index.

Financial Calendar

Analysts' Meeting annual results 2010	Week 10	10-03-2011
Publication Annual Report 2010	Week 11	17-03-2011
Publication Q1 2011 results	Week 17	28-04-2011
Annual General Meeting of Shareholders	Week 17	28-04-2011
Publication Q2 2011 trading statement	Week 28	15-07-2011
Publication half-year results 2011	Week 34	26-08-2011
Analysts' Meeting half-year results 2011	Week 34	26-08-2011
Publication Q3 2011 results	Week 43	28-10-2011
Publication Q4 2011 trading statement	Week 3	20-01-2012

For more information, please contact: Ton Anbeek, Chief Executive Officer Tel. +31 (0)413 338819 / Fax +31 (0)413 338829 / Mob. +31 (0)6 53662838 E-mail: ton.anbeek@beterbed.nl / Website: www.beterbedholding.com

2. Consolidated balance sheet

(* EUR 1,000)	31-12-2010	31-12-2009
Fixed assets	29,405	29,663
Intangible fixed assets	3,811	3,811
Financial fixed assets	1,206	1,038
Stocks	56,633	51,467
Debtors	6,161	5,942
Cash and cash equivalents	16,761	17,156
TOTAL ASSETS	113,977	109,077
Equity attributable to equity holders of the parent	60,851	55,052
Long-term liabilities	6,924	8,816
Credit institutions	2,000	2,000
Credit institutions	44,202	43,209
TOTAL LIABILITIES	113,977	109,077

3. Consolidated income statement

		(* EUR 1,000)
	Fourth quarter			Cumulative
2010	2009		2010	2009
102,591	101,857	Revenue	374,724	361,470
(42,580)	(44,075)	Cost of sales	(165,217)	(163,638)
60,011	57,782	Gross profit	209,507	197,832
58.5%	56.7%		55.9%	54.7%
21,171	20,148	Wage and salary costs	81,190	78,238
		Depreciation of tangible fixed
1,989 21,023	1,945 19,995	assets Other operating expenses	7,848 83,009	7,750 79,206
(44,183)	(42,088)	Total operating expenses	(172,047)	(165,194)
-43.1%	-41.3%		-45.9%	-45.7%
15,828	15,694	Operating profit (EBIT)	37,460	32,638
15.4%	15.4%		10.0%	9.0%
(69)	(157)	Financial income and expenses	(389)	(660)
15,759	15,537	Profit before taxation	37,071	31,978
(3,856)	(3,648)	Income tax expense	(9,134)	(8,060)
11,903 11.6%	11,889 11.7%	Net profit	27,937 7.5%	23,918 6.6%
0.55	0.55	Earnings per share in €	1.30	1.12
0.55	0.56	Diluted earnings per share in €	1.29	1.12

4. Consolidated cash flow statement

(* EUR 1,000)

		Cumulative
	2010		2009
Cash flow from operating activities
Operating result	37,460		32,638
Financing income received	459		67
Financial expenses paid	(848)		(727)
Income taxes paid	(8,626)		(6,772)
Depreciation	7,848		7,750
Costs employee stock options Movements in:	507		247
Stocks	(5,166)		(2,074)
Debtors	(219)		168
Short term liabilities	425		5,334
Other	269		7
		32,109		36,638
Cash flow from investing activities
Additions to tangible fixed assets	(8,151)		(6,331)
Disposals of tangible fixed assets	659		683
		(7,492)		(5,648)
Cash flow from financing activities
Drawing of loan	-		10,000
Repayment of loan	(2,000)		(1,000)
Income from the issue of shares	1,959		664
Dividend paid	(24,971)		(12,357)
		(25,012)		(2,693)
Movements in cash and cash equivalents		(395)		28,297
Cash and cash equivalents at the start of the financial year		17,156		(11,141)
Cash and cash equivalents at the end of the financial year		16,761		17,156

5. Consolidated statement of comprehensive income

		(* EUR 1,000)
	Fourth quarter			Cumulative
2010	2009		2010	2009
11,903 -	11,889 -	Net profit Revaluation	27,937 -	23,918 (130)
61	45	Movements in reserve for currency translation differences	367	7
11,964	11,934	Total comprehensive income	28,304	23,795

6. Consolidated statement of changes in equity

(* EUR 1,000)				Reserve for
		Issued	Share	currency
		share	premium	translation	Revaluation	Other	Retained
	Total	capital	reserve	differences	Reserve	reserves	earnings
Balance on 1 January 2009	42,703	436	16,145	130	2,852	1,014	22,126
Net profit for 2009 Other components of	23,918	-	-	-	-	-	23,918
comprehensive Income 2009	(123)	-	-	7	(130)	-	-
Profit appropriation 2008	(4,897)	-	-	-	-	17,229	(22,126)
Interim dividend 2009	(7,460)	-	-	-	-	(7,460)	-
Issue of shares	664	-	-	-	-	664	-
Costs of employee stock options	247	-	-	-	-	247	-
Balance on 31 December 2009	55,052	436	16,145	137	2,722	11,694	23,918
Balance on 1 January 2010	55,052	436	16,145	137	2,722	11,694	23,918
Net profit for 2010 Other components of	27,937	-	-	-	-	-	27,937
comprehensive Income 2010	367	-	-	367	-	-	-
Profit appropriation 2009	(14,853)	-	-	-	-	9,065	(23,918)
Interim dividend 2010	(10,118)	-	-	-	-	(10,118)	-
Issue of shares	1,959	-	-	-	-	1,959	-
Costs of employee stock options	507	-	-	-	-	507	-
Balance on 31 December 2010	60,851	436	16,145	504	2,722	13,107	27,937