Beter Bed Holding N.V. — Earnings Release 2011

Mar 2, 2012

BETER BED HOLDING N.V.

PRESS RELEASE

ANNUAL RESULTS 2011

Uden, the Netherlands, 2 March 2012

In the event of any differences in interpreting the half-year figures, the Dutch version shall prevail.

Contents

1.	Press release – annual results 2011…………………………………………………………	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 posts record revenue and higher profit in 2011, partly driven by strong growth in Germany

• Revenue for the full year 2011 up by 6.0% to € 397.0 million.
• Record gross profit, both for the full year 2011 (56.5%) and the fourth quarter of 2011 (58.8%).
• Slight increase in net profit: up 0.3% to € 28.0 million (2010: € 27.9 million).
• Earnings per share: € 1.29 (2010: € 1.30).
• Proposed dividend: € 1.10 per share; pay-out ratio: 85%.

Key figures for the year
(in millions of € unless stated otherwise)	2011	2010	Change
Revenue	397.0	374.7	+6.0%
Change in revenue at comparable stores (%)	+0.4%	-1.3%
Gross profit (%)	56.5%	55.9%
Operating profit/EBIT	38.3	37.5	+2.2%
Net profit	28.0	27.9	+0.3%
Earnings per share (in €)	1.29	1.30	-0.8%
Proposed dividend (in €)	1.10	1.30	-15.4%
Pay-out ratio (%)	85.3%	100.0%
Solvency (%)	54.1%	53.4%
Number of stores	1,187	1,117	+6.3%

Key figures for the fourth quarter
(in millions of € unless stated otherwise)	Q4 2011	Q4 2010	Change
Revenue	108.0	102.6	+5.2%
Change in revenue at comparable stores (%)	+1.8%	-4.5%
Gross profit (%)	58.8%	58.5%
Operating profit/EBIT	14.3	15.8	-9.8%
Net profit	10.2	11.9	-14.7%

Ton Anbeek, Chief Executive Officer:

'We are delighted to once again be able to report a record year in terms of revenue, gross profit and net profit. Despite the fact that order intake in the Netherlands, one of our key markets, fell significantly from August onwards due to lower number of visitors, we increased our market share in all countries. These strong results are credited in part to the tremendous commitment and professionalism of our employees. Although the outlook for 2012 for the Netherlands, Spain and other markets remains challenging, based on the relatively strong annual results for 2011 and the solid balance sheet we propose distributing a dividend to our shareholders equivalent to 85% of net profit.'

Fourth quarter 2011

During the fourth quarter, Beter Bed Holding's revenue increased by 5.2% to € 108.0 million (versus € 102.6 million for Q4 2010). Revenue at comparable stores increased by +1.8% (versus -4.5% in Q4 2010). Revenue performance per country in the fourth quarter was as follows:

Germany	16%
The Netherlands	-12%
Switzerland	19%
Austria	21%
Spain	15%
Belgium	42%
Poland		68% (increase from four to six stores)

In Germany, revenue increased by 16% in the fourth quarter (including newly opened stores), while revenue at comparable stores increased by 12% during this period. In the Netherlands, a combination of a significantly reduced order portfolio at the end of the third quarter and a 10% drop in revenue at comparable stores during the fourth quarter drove revenue down by 12%. In Spain, the decline in revenue at comparable stores in the fourth quarter was offset by the increase in the number of stores.

Gross profit for the fourth quarter of 2011 totalled 58.8% (fourth quarter 2010: 58.5%). Operating expenses increased, driven in part by the increase in the average number of stores by 73: from € 44.2 million to € 49.2 million. Average expenses per store increased by nearly 4% during the fourth quarter of 2011, driven mainly by an increase in marketing expenses. Operating profit (EBIT) for Q4 2011 totalled € 14.3 million (13.2% of revenue), versus € 15.8 million (15.4% of revenue) in 2010. At 27.7%, the tax burden for Q4 2011 was higher than that for the same period in 2010 (24.5%); this is mainly due to the fact that a larger share of the profit was generated in Germany, where marginal tax rates are higher. As a result, net profit for the fourth quarter of 2011 dropped to € 10.2 million (2010: € 11.9 million).

Full year 2011

Revenue for the full year 2011 increased by 6.0% to € 397.0 million (2010: € 374.7 million). This increase was driven in part by the growth in the number of stores by 70 to 1,187 (year-end 2010: 1,117 stores). Revenue at comparable stores increased slightly in 2011, by 0.4% (2010: -1.3%). Trends in the group's two key markets, the Netherlands and Germany, began to diverge significantly in August 2011. In the Netherlands, declining consumer confidence and lower propensity to buy caused the number of visitors and order intake at comparable stores to decrease from August 2011.

In Germany, consumer confidence has remained at nearly the same, high level. Strong anniversary promotions supported by advertising and the 'Best in Test Mattress' label awarded to the Vitalis Star model caused revenue to increase (by 6.1% at comparable stores).

Although consumer spending in the bedroom furnishings market was lower in 2011 than in 2010, the company nevertheless managed to increase its market share once again last year.

Revenue performance per country in the full year 2011 was as follows:

Germany	10%
The Netherlands	-2%
Switzerland	21%
Austria	18%
Spain	13%
Belgium	35%
Poland	24%

Gross profit increased further in 2011: to 56.5% (versus 55.9% in 2010). Operating expenses increased from € 172.0 million to € 186.1 million, due in part to the larger number of stores and the higher marketing expenses in Germany. Expenses as a percentage of revenue increased from 45.9% to 46.9% in 2011; average expenses per store increased by nearly 2% during the year.

Operating profit (EBIT) for the full year 2011 was € 38.3 million (9.6% of revenue), versus € 37.5 million (10.0% of revenue) for 2010. The tax burden increased from 24.6% in 2010 to 26.0% for the full year 2011. Net profit for 2011 totalled € 28.0 million (2010: € 27.9 million). Earnings per share for 2011 were € 1.29 (versus € 1.30 in 2010).

Total investments for 2011 amounted to € 13.3 million (2010: € 8.2 million), a total of € 9.8 million of which was invested in new and existing stores (2010: € 6.7 million). The bulk of the remaining amount was invested in IT. Cash flow (net profit plus depreciation) for 2011 was € 36.5 million (versus € 35.8 million in 2010). Solvency at year-end 2011 was 54.1% (versus 53.4% in 2010). Interest-bearing debt at year-end 2011 totalled € 8.3 million (compared to € 7.0 million at yearend 2010).

Operational

In 2011, a total of 123 stores were opened while 53 were closed, bringing the balance of new stores to 70. At year-end 2011, the company operated 1,187 stores.

Number of stores	31.12.2010	Closed	Opened	31.12.2011
Matratzen Concord (incl. MAV)	932	38	84	978
Beter Bed	85	7	9	87
El Gigante del Colchón	53	1	15	67
BeddenREUS	35	4	8	39
Slaapgenoten/Dormaël Slaapkamers	12	3	7	16
Total	1,117	53	123	1,187

Matratzen Concord (incl. MAV)

Revenue for 2011 at cash-and-carry retail formula Matratzen Concord totalled € 244.6 million (61.6% of total group revenue), up 11.6% from 2010. Meanwhile, revenue at comparable stores increased by 5.1%. In 2011, 83% of Matratzen Concord's revenue was generated in Germany.

This formula opened 46 new stores (net) in 2011, including 23 in Germany. In Austria, ten new stores were opened (net), with nine openings in Switzerland, two in Poland and one new store in the Netherlands and Belgium each.

Number of stores	31.12.2010	Closed	Opened	31.12.2011
Germany	792	34	57	815
The Netherlands	38	2	3	39
Austria	52	1	11	62
Switzerland	38	-	9	47
Belgium	8	1	2	9
Poland	4	-	2	6
Total	932	38	84	978

Beter Bed

This formula operates in the Netherlands and, since 2011, also in Belgium. The number of Beter Bed stores increased from 85 to 87 following nine openings and seven closures. In the first quarter of 2011, Beter Bed launched a strategic partnership with wehkamp.nl, followed by the relaunch of the beterbed.nl web shop in the fourth quarter. Revenue for 2011 dropped by 5.1% to € 108.0 million (2010: € 113.7 million), bringing Beter Bed's share in the group's total revenue to 27.2%. Revenue at comparable stores at Beter Bed declined by 7.0% for the full year 2011.

Other formulas

Total revenue at the other formulas was € 44.5 million for 2011 (2010: € 41.8 million); this includes revenue at the following retail formulas: BeddenREUS and Slaapgenoten/Dormaël Slaapkamers in the Netherlands, El Gigante del Colchón in Spain, and the wholesaler DBC. Revenue for 2011 was 6.5% higher than for 2010. At more than 14%, DBC achieved the highest revenue growth of these activities, with the other formulas contributing 11.2% to the group's total revenue.

Dividend

Beter Bed Holding N.V.'s dividend policy is aimed at maximising shareholder return while at the same time maintaining a solid capital position. The company aims to distribute at least 50% of its net profit to the shareholders provided that its solvency is not less than 30% and the net-interest-bearing debt/EBITDA ratio does not exceed two.

In November 2011, the company paid an interim cash dividend of € 0.47 per share. A proposal will be submitted to the Annual General Meeting of Shareholders, scheduled for 18 April 2012, to distribute a final cash dividend of € 0.63.This brings the dividend for 2011 to € 1.10 per share (2010: € 1.30 per share), with 85% of net profit to be distributed to the shareholders. This excludes the year 2010, when 100% was distributed on a one-time basis, in line with the above-mentioned dividend policy and the company's distribution policy in recent years.

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 for adoption to the Annual General Meeting of Shareholders on 18 April 2012, and for which an unqualified auditor's report has been issued by the independent auditor.

Developments and outlook for the first few months of 2012

Trends in the group's key markets during the first two months of 2012 are virtually identical to those in the last quarter of 2011. Revenue at comparable stores has increased in Germany to date, while having declined in the Netherlands. It currently does not seem unlikely that the impact on operating profit of the reduced order intake at comparable stores in the Netherlands can be offset by the revenue growth in Germany.

In Germany, consumer confidence will remain at the same high level. Consumers will remain uncertain in 2012, particularly in the Netherlands and Spain, with propensity to buy therefore expected to remain relatively low. Despite these difficult conditions, the pricing and promotional policy, which was tightened in 2011, will remain focused in 2012 on continuously increasing market share in all markets where the company operates.

In terms of expansion, the company expects to again open between 70 and 80 new stores net (i.e. the balance of openings and closures) in 2012, barring any unforeseen circumstances.

Profile

Beter Bed Holding N.V. operates in the European bedroom furnishings market. Its activities include retail trade through a total of 1,187 stores at year-end 2011 that operate via the chains Beter Bed (the Netherlands and Belgium), Matratzen Concord (Germany, Switzerland, Austria, the Netherlands, Belgium and Poland), El Gigante del Colchón (Spain), BeddenREUS, Dormaël and Slaapgenoten (all three active in the Netherlands) and MAV (Germany). Beter Bed Holding is also engaged in developing and wholesaling branded products in the bedroom furnishings sector in the Netherlands, Germany, Belgium, Spain, Austria, Switzerland and Turkey via its subsidiary DBC International. Beter Bed Holding achieved net revenue of € 397.0 million in 2011. A total of 63% of the group's net revenue is generated outside the Netherlands. The company has been listed on NYSE Euronext Amsterdam since December 1996. Beter Bed Holding shares are traded on the Amsterdam Small Cap Index.

Financial Calendar

Analysts' Meeting annual results 2011	week 9	02.03.2012
Publication Annual Report 2011	week 10	07.03.2012
Annual General Meeting of Shareholders	week 16	18.04.2012
Publication Q1 2012 results	week 19	10.05.2012
Publication Q2 2012 trading statement	week 28	20.07.2012
Publication interim figures 2012	week 35	30.08.2012
Analysts' Meeting interim figures 2012	week 35	30.08.2012
Publication Q3 2012 results	week 43	26.10.2012
Publication Q4 2012 trading statement	week 3	18.01.2013

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)	31-12-2011	31-12-2010
Tangible fixed assets	33,986	29,405
Intangible fixed assets	3,811	3,811
Financial fixed assets	1,930	1,714
Stocks	59,461	56,633
Debtors	8,308	5,653
Cash and cash equivalents	7,075	16,761
TOTAL ASSETS	114,571	113,977
Equity attributable to equity holders of the parent	62,015	60,851
Long-term liabilities	5,000	6,924
Credit institutions	5,314	2,000
Other current liabilities	42,242	44,202
TOTAL LIABILITIES	114,571	113,977

3. Consolidated income statement

(* EUR 1,000)

	Fourth quarter		Cumulative
2011	2010		2011	2010
107,960	102,591	Revenue	397,035	374,724
(44,480)	(42,580)	Cost of sales	(172,625)	(165,217)
63,480	60,011	Gross profit	224,410	209,507
58.8%	58.5%		56.5%	55.9%
23,532	21,171	Wage and salary costs	87,757	81,190
2,323	1,989	Depreciation of tangible fixed assets	8,510	7,848
23,342	21,023	Other operating expenses	89,855	83,009
(49,197)	(44,183)	Total operating expenses	(186,122)	(172,047)
-45.6%	-43.1%		-46.9%	-45.9%
14,283	15,828	Operating profit (EBIT)	38,288	37,460
13.2%	15.4%		9.6%	10.0%
(241)	(69)	Financial income and expenses	(434)	(389)
14,042	15,759	Profit before taxation	37,854	37,071
(3,890)	(3,856)	Income tax expense	(9,829)	(9,134)
10,152	11,903	Net profit	28,025	27,937
9.4%	11.6%		7.1%	7.5%
0.46	0.55	Earnings per share in €	1.29	1.30
0.47	0.55	Diluted earnings per share in €	1.29	1.29

4. Consolidated cash flow statement

(* EUR 1,000)

		Cumulative
	2011		2010
Cash flow from operating activities
Operating result	38,288		37,460
Financing income received	394		459
Financing expenses paid	(828)		(848)
Income taxes paid	(10,407)		(8,626)
Depreciation	8.510		7,848
Costs employee stock options	489		507
Movements in:
Stocks	(2,828)		(5,166)
Debtors	(2,655)		(286)
Short-term liabilities	(1,416)		425
Other	273		269
		29,820		32,042
Cash flow from investing activities
Additions to tangible fixed assets	(13,336)		(8,151)
Disposals of tangible fixed assets	254		659
Changes in long-term accounts receivable	(106)		67
		(13,188)		(7,425)
Cash flow from financing activities
Repayment of loan	(2,000)		(2,000)
Income from the reissuance of shares	542		1,959
Dividend paid	(28,174)		(24,971)
		(29,632)		(25,012)
Change in net cash and cash equivalents		(13,000)		(395)
Cash and cash equivalents at the end of the reporting period		7,075		16,761
Current bank overdraft not including repayment obligations at the end of the reporting period		3,314		-
Net cash and cash equivalents at the end of the reporting period		3,761		16,761
Cash and cash equivalents at the start of the reporting period		16,761		17,156
Change in net cash and cash equivalents		(13,000)		(395)
Beter Bed Holding N.V. annual results 2011				10

5. Consolidated statement of comprehensive income

		(* EUR 1,000)
Fourth quarter			Cumulative
2011	2010		2011	2010
10,152	11,903	Net profit	28,025	27,937
18	-	Change in revaluation reserve due to a change in the tax rate	18	-
60	61	Movements in reserve for currency translation differences	264	367
10,230	11,964	Total comprehensive income	28,307	28,304

6. Consolidated statement of changes in equity

(* EUR 1,000)				Reserve for
	Total	Issued share capital	Share premium reserve	currency translation differences	Revaluation reserve	Other reserves	Retained earnings
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)	-
Reissuance 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
Balance on 1 January 2011	60,851	436	16,145	504	2,722	13,107	27,937
Net profit for 2011	28,025	-	-	-	-	-	28,025
Other components of comprehensive income 2011	282	-	-	264	18	-	-
Profit appropriation 2010	(17,988)	-	-	-	-	9,949	(27,937)
Interim dividend 2011	(10,186)	-	-	-	-	(10,186)	-
Reissuance of shares	542	-	-	-	-	542	-
Costs of employee stock options	489	-	-	-	-	489	-
Balance on 31 December 2011	62,015	436	16,145	768	2,740	13,901	28,025