General

2018 brought many changes for Beter Bed Holding. The underlying results have shown a downward trend for several years and Beter Bed Holding responded to this in 2018. This entailed changing virtually all the leadership positions within the Group and developing a new strategy. Central to this strategy is the promise to offer the best quality rest at very affordable prices via the channel that best suits the individual customer.

As part of the strategy, a analysis of the dynamics in the markets in which Beter Bed Holding operates and a careful analysis of the changing customer behaviour within this market have been carried out. This has revealed that the categories in which the Group operates continue to be attractive. For example, this brought to light an interesting social insight into the importance of a good night’s rest. Civil society organisations and scientific organisations have conducted extensive research into this topic and these studies repeatedly demonstrate how important a good quality night’s rest is to people’s health.

Detailed analysis also showed that Beter Bed Holding has insufficiently responded to these changes in recent years. The Group had an overly high and inflexible cost base and the underlying business strategy and operational processes were no longer future-proof. The assortment and pricing were also not competitive and the online and offline shopping experience were not aligned. The network of physical stores was focused on finding as many new locations as possible rather than on creating an efficient network.

These issues were addressed decisively in 2018 by the entirely new leadership team.
The first step that was taken entailed the replacement of virtually all the members of the various layers of the leadership team comprising the Management Board, Supervisory Board, General Managers and their regional management teams.

This was immediately followed by the launch of a restructuring program of the companies within Beter Bed Holding. This led to the decision to terminate the activities in Spain, close 172 Matratzen Concord stores in the German-speaking countries, eliminate different layers within the organisations of all the countries, reduce the inventories in all the countries and discontinue complex IT projects that were not aligned across the different countries.

A program for determining a new strategy that effectively responds to the changing market and changing customer behaviour was also commenced and completed in the course of 2018.

This strategy, which was presented at the Capital Markets Day on 26 October 2018, includes:

• Changing the assortment offered to customers to include innovative products.
• Sharpening attractive price points both in terms of promotions and regular prices.
• Offering the best advice at any time.
• New campaigns, such as the Mattress for Life as the first international commercial program.
• New omni-channel solutions for customers whereby online and offline reinforce each other.
• Facilitating the transition to a company culture with performance and fulfilling promises at its core.
• The creation of a business model in which cost control and efficient and scalable processes within all units of Beter Bed Holding plays a central role.

The ambitions that have been formulated as part of the new strategy encompass targets for sales, EBITDA margin and working capital with the aim of returning to sustainable, profitable growth. As a result of these ambitions and the progress achieved to date mainly due to the restructuring in 2018, Beter Bed Holding looks to the future with confidence.