Beter Bed Holding N.V. — Interim / Quarterly Report 2007

Aug 24, 2007

PRESS RELEASE

Uden, The Netherlands, 24 August 2007

BETER BED ACHIEVES 40.8% INCREASE IN PROFIT IN FIRST HALF 2007

• Revenue rises by 11.7%
• Net profit increases by 40.8% in first half of 2007 to € 13.2 million
• 896 stores at the end of June; net total of 57 stores opened
• Share buy-back programme for first half of 2007 is finalised
• Subsequent share buy-back programme and interim dividend announced
• Positive performance in first half of 2007 is currently also visible in the third quarter
• Forecasted profit of at least € 14.5 million for the second half of 2007

Beter Bed Holding N.V. realised net profit totalling € 13.2 million in the first half of 2007. This marks a 40.8% increase in comparison to the first half of 2006 when net profit amounted to € 9.4 million. Revenue rose by 11.7% to € 169.1 million in the first half of 2007 (first half of 2006: € 151.4 million).

First half-year results 2007

Beter Bed Holding had a total of 896 stores in Europe at the end of June 2007. This amounts to 57 more sales outlets than at the end of 2006.

Number of stores	31-12-2006	Closed	Opened	30-06-2007
Matratzen Concord	691	26	62	727
MAV	5	-	11	16
Beter Bed	78	2	5	81
BeddenReus	24	-	4	28
El Gigante del Colchón	32	-	2	34
Slaapgenoten/Dormaël Slaapkamers	9	-	1	10
Total	839	28	85	896

Growth in revenue was achieved in all the countries in which Beter Bed Holding is active. Total growth in revenue amounted to 11.7%. Revenue performance per country in the first half of 2007 was as follows:

+7%
+15%
+25%
+24%
+20%

Market conditions were positive throughout the first half of 2007 in all the countries in which the Beter Bed formulas operate, with the exception of Spain. The positive conditions in Germany in the first half of 2007 were, however, initially influenced unfavourably by the increase in the VAT rate and the extremely warm weather in April.

Revenue at comparable stores within the Beter Bed formula was marginally lower than in 2006, with a higher gross profit. Revenue at comparable stores within the Dutch formulas BeddenReus and Slaapgenoten increased by 21% and 8%. Revenue at comparable stores within El Gigante del Colchón in Spain decreased by 12% in the first half of 2007. Matratzen Concord, which accounts for 54% of the revenue of Beter Bed Holding, realised an 8% growth in revenue at comparable stores in the first half of 2007.

In addition to the retail formulas, Beter Bed Holding also operates DBC, a wholesale company that markets the M Line mattress brand. This activity realised a 32% growth in revenue.

Overview of revenue x € 1,000	Revenue 2007-H1	Revenue 2006-H1	2007/2006	Difference Share Revenue 2007-H1
Matratzen Concord (including MAV)	90,748	78,056	16%	54%
Beter Bed	59,119	58,822	1%	35%
BeddenReus	5,804	4,178	39%	3%
El Gigante del Colchón	7,102	5,907	20%	4%
DBC Europe	7,675	5,821	32%	5%
Slaapgenoten/Dormaël Slaapkamers	3,155	2,105	50%	2%
Adjustment inter-company revenue	-4,469	-3,476	29%	-3%
Total	169,134	151,413	12%	100%

All the formulas of Beter Bed Holding achieved growth in revenue. The growth in revenue of the Beter Bed formula was limited by the strong growth in the first half of 2006, which made the comparative basis difficult.

Gross profit amounted to 53.0% of revenue (€ 89.7 million) in the first half of 2007, which constitutes an improvement in comparison to the first half of 2006 when gross profit totalled 52.6% (€ 79.6 million). This improvement is primarily attributable to both the fact that Matratzen Concord Germany has above average gross profit and an increased share in the revenue and to the improvement of the gross profit at the Beter Bed formula.

Expenses increased at a slower rate than revenue. The growth in the number of stores caused the operational expenses to increase from € 66.1 million in the first half of 2006 to € 72.9 million in the first half of 2007 (10.2%). Expenses decreased as a percentage of revenue from 43.7% to 43.1%. This decrease was realised in the areas of logistical and overhead expenses. Total store expenses as a percentage of revenue remained virtually the same as last year. It was nonetheless possible to reduce the average expenses per store in the first half of 2007 by approximately 1% in comparison to the first half of 2006.

Operating profit (EBIT) totalled € 16.8 million (9.9% of revenue) in the first half of 2007 compared to € 13.4 million (8.9% of revenue) in the first half of 2006. This represents an increase of 25%. Net profit amounted to € 13.2 million. This marks a 40.8% increase in comparison to the first half of 2006 when net profit totalled € 9.4 million.

The Company paid out € 14.2 million in dividend and bought back own shares worth € 5.0 million in the first half of 2007. At the end of June 2007, the balance of bank debt minus cash at bank and in hand was € 6.2 million and solvency was 45.4%.

Developments in the second quarter

Revenue performance was initially disappointing due to the extremely warm weather in April. Development was, however, positive in May and June and this caused revenue for the entire second quarter to rise by 12.6% from € 68.6 million in 2006 to € 77.3 million in 2007. Gross profit in the second quarter of 2007 was 54.1%, which was higher than in the second quarter of 2006 (53.2%). Operational expenses as a percentage of revenue decreased from 46.8% in the second quarter of 2006 to 46.5% in the second quarter of 2007. Operating profit (EBIT) amounted to € 5.9 million in the second quarter of 2007, representing a 34.2% increase in comparison to 2006 (€ 4.4 million). Net profit increased by 34.8% in the second quarter of 2007 and totalled € 4.3 million (second quarter of 2006: € 3.2 million).

Revenue and profit are normally lower in the second and third quarters than in the first and fourth quarters due to the seasonal pattern of consumer demand.

Course of affairs and outlook

The positive revenue performance in the first half of 2007 has continued so far in the third quarter. The turbulence on the financial markets could, however, result in a reduced consumer confidence. The Company is consequently exercising caution in assuming that net profit in the second half of 2007 will be at least equal to the net profit realised in the second half of 2006 (€ 14.5 million). This would mean that net profit for the entire year 2007 would amount to at least € 28 million (2006: € 23.8 million).

Share buy-back and interim dividend

In follow-up to the share buy-back programme that took place earlier this year, the Company will, barring unforeseen circumstances, launch a new share buy-back programme in the second half of this year. The Company furthermore plans to once again pay out an interim dividend. Both the share buy-back programme and the interim dividend will be specified upon publication of the figures for the third quarter of 2007 on 26 October 2007.

Profile

Beter Bed operates in the European bedroom furnishings market. Its activities include retail trade through a total of approximately 900 stores that operate via the chains Beter Bed (active in the Netherlands), Matratzen Concord (active in the Netherlands, Germany, Austria and Switzerland), 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 and Germany via its subsidiary DBC International. Beter Bed Holding achieved net revenue of € 320 million in 2006. The company has been listed on the Eurolist of Euronext Amsterdam since December 1996 and forms part of the NextPrime segment. The Beter Bed Holding share is included in the Amsterdam Smallcap Index.

APPENDIX:

• Half-year results 2007

For further information: Frans Geelen, Chief Executive Officer Tel. +31 (0)413 338819 / Fax +31 (0)413 338829/ Mob. +31 (0)6 29565517 E-mail: frans.geelen@beterbed.nl / Website: www.beterbedholding.com

BETER BED HOLDING NV HALF-YEAR RESULTS 2007

Contents

1.	Consolidated balance sheet	6
2.	Consolidated profit & loss account	7
3.	Consolidated cashflow statement	8
4.	Consolidated overview of movements equity ……	9
5.	General notes 10
6.	Notes to the consolidated balance sheet	10
7.	Notes to the profit & loss account ……………………	11
8.	Review report ……………………………………………………………………	12

1. Consolidated balance sheet

(* EUR 1.000)	30-6-2007	30-6-2006	31-12-2006
Tangible fixed assets	26.102	23.018	24.420
Intangible fixed assets	3.811	3.811	3.811
Stocks	42.046	38.063	40.275
Debtors, prepayments and accrued income	4.660	3.579	4.907
Cash and cash equivalents	5.932	2.742	9.544
TOTAL ASSETS	82.551	71.213	82.957
Equity attributable to equity
holders of the parent	37.454	33.402	42.701
Provisions	1.134	1.215	1.134
Long-term liabilities	---	917	417
Short-term bankloans	12.143	5.253	1.000
Current liabilities	31.820	30.426	37.705

The figures presented are in line with the current IFRS standards and interpretations.

2. Consolidated profit and loss account

	Second quarter
2007	2006		2007	2006
77.250	68.604	Revenue	169.134	151.413
(35.495)	(32.093)	Cost of sales	(79.435)	(71.843)
41.755	36.511	Gross margin	89.699	79.570
54,1%	53,2%		53,0%	52,6%
17.310	15.735	Staff costs	34.971	32.193
1.791	1.502	Depreciation	3.400	3.013
16.782	14.897	Other operating expenses	34.513	30.919
(35.883)	(32.134)	Total operating expenses	(72.884)	(66.125)
-46,5%	-46,8%		-43,1%	-43,7%
5.872	4.377	Operating result (EBIT)	16.815	13.445
7,6%	6,4%		9,9%	8,9%
(111)	(174)	Financial income and expense	(170)	(297)
5.761	4.203	Profit before tax	16.645	13.148
(1.449)	(1.004)	Income tax expense	(3.461)	(3.782)
4.312	3.199	Net profit	13.184	9.366
5,6%	4,7%		7,8%	6,2%
0, 18	0 ,15	Earnings per share €	0,61	0,43
0, 17	0 ,15	Diluted earnings per share €	0,60	0,43

(* EUR 1.000)

The figures presented are in line with the current IFRS standards and interpretations.

3. Consolidated cash flow statement

(* EUR 1.000)

		cumulative
	2007-Q2		2006-Q2
Cash flow from/(used in) operating activities
Net group profit	13.184		9.366
Depreciation	3.400		3.013
Movements in:
Stocks	(1.771)		(1.274)
Debtors	247		(186)
Creditors	(5.885)		(3.555)
Provisions	---		33
Cash flow from/(used in) operating activities		9.175		7.397
Cash flow from/(used in) investing activities
Additions to tangible fixed assets	(5.200)		(3.179)
Disposals of tangible fixed assets	118		38
Cash flow used in investing activities		(5.082)		(3.141)
Cash flow from/(used in) financing activities
Income from the issue of new shares	552		---
Movement in equity because of costs of
employee share options	203		137
Exchange gain/(loss) on foreign
participating interests	(4)		---
Repayment of long-term liabilities	(417)		(500)
Share buy back	(5.009)		---
Dividend paid	(14.173)		(9.523)
Cash flow from/(used in) financing activities		(18.848)		(9.886)
Net cash flow for financial year		(14.755)		(5.630)
Balance of cash and cash equivalents/
short-term bankloans at 1 January		8.544		3.119
Balance of cash and cash equivalents/
short-term bankloans at 30 June		(6.211)		(2.511)

4. Consolidated overview of movements equity

	total	issued share capital	share reserve	reserve premium participating interests	legal revaluation other reserve	reserves	retained earnings
Balance on 1 January 2007	42.701	433	15.596	-	1.548	1.294	23.830
Profit appropriation 2006 Profit 2007	(14.173) 13.184	- -	- -	- -	- -	9.657 -	(23.830) 13.184
Share issue	552	3	549	-	-	-	-
Share buy back Revaluation	(5.009) -	- -	- -	- -	- -	5.009- -	- -
Expenses employee share options Movement in legal reserves	203	-	-	-	-	203	-
exchange differences Adjustment to legal reserve	(4)	-	-	4-	-	-	-
participating interests	0	-	-	4	-	4-	-
Balance on 30 June 2007	37.454	436	16.145	-	1.548	6.141	13.184

(* EUR 1.000) legal

	total	issued share capital	share reserve	legal reserve premium participating interests	legal revaluation other reserve	reserves	retained earnings
Balance on 1 January 2006	33.422	433	15.596	-	1.463	293	15.637
Profit appropriation 2005	(9.523)	-	-	-	-	6.114	(15.637)
Profit 2006	9.366	-	-	-	-	-	9.366
Revaluation	-	-	-	-	-	-	-
Expenses employee share options	137	-	-	-	-	137	-
exchange differences	-	-	-	-	-	-	-
Adjustment to legal reserve participating interests	-	-	-	-	-	-	-
Balance on 30 June 2006	33.402	433	15.596	-	1.463	6.544	9.366

Beter Bed Holding N.V. half-year results 2007 9

5. General Notes

General information

The consolidated interim report by Beter Bed Holding NV (the company) on the first six months of 2007 relates to the company and its operating companies (together referred to as the 'Group').

This condensed consolidated interim report has been compiled in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. It does not contain all information required for complete financial statements and should be read in conjunction with the consolidated financial statements of the Group for 2006.

This condensed consolidated interim report was approved by the Supervisory Board on 23 August 2006.

Accounting principles and policies for the determination of the result

The accounting principles and policies for the determination of the result are unchanged from those used in the 2006 financial statements.

Estimates

The preparation of interim financial reports requires judgement on the part of management, which makes estimates and assumptions that affect the application of accounting principles and the reported valuation of assets and liabilities and the measurement of income and expenses. Actual results can differ from those estimates.

Unless stated otherwise, the main judgements made by management in the process of applying the Group's accounting principles and the main sources of estimation used in preparing this condensed consolidated interim report are unchanged from those made in preparing the consolidated financial statements for the financial year 2006.

6. Notes to the consolidated balance sheet

Equity

The movements of equity items are shown in the consolidated equity movements overview on page 6.

At year-end 2006, 21,642,617 shares were issued and paid in full.

In the first half of 2007 162,500 shares were issued as a result of exercising employee stock options. The share issue price was € 3.40. Furthermore in the first half of 2007 192,779 shares were bought for an average prive of € 25.94.

The average number of outstanding shares in the reporting period was 21,698,796. The number of shares used in calculating the diluted earnings per share is equal to 21,931,081. At the end of juni 2007 21,805,117 shares were issued and paid in full. The number of outstanding shares at the end of june 2007 amounted to 21,612,338.

A final dividend for the financial year 2006 of EUR 0.65 per ordinary share with a nominal value of EUR 0.02 was adopted in the reporting period and paid accordingly. The total dividend paid in the reporting period amounted to € 14,173,326.

7. Notes to the consolidated profit and loss account

Taxes

A reconciliation between the tax burden and the result of the calculation of profit before taxation multiplied by the local tax rate in the Netherlands is as follows at 30 June 2007 and 2006:

(* EUR 1.000)		cumulative
	2007-Q2	2006-Q2
Profit before taxes	16.645	13.148
At the applicable legal rate of 25.5% in
the Netherlands (2006: 29.6%)	4.244	3.892
Non tax-deductible costs	62	24
Tax-deductible costs personnel stock options	(837)	-
Effect of the tax rates outside the Netherlands	(8)	(134)
At an effective rate of 20.8% (2006: 28.8%)	3.461	3.782
Profit tax taken to the consolidated profit and loss account	3.461	3.782

8. Review report

To: Beter Bed Holding N.V.

Introduction

We have reviewed the accompanying interim condensed consolidated balance sheet of Beter Bed Holding N.V. (the 'Company'), Uden, as at 30 June 2007 and the related interim condensed consolidated statements of income, changes in equity and cash flows for the six-month period then ended and explanatory notes. Company's management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union ('IAS 34'). We have not reviewed the figures for the second quarters 2006 and 2007 as included in the interim condensed consolidated financial statements. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Eindhoven, August 23, 2007

for Ernst & Young Accountants

was signed by W.T. Prins