Beter Bed

Beter Bed


150701 Beter Bed | Sleep tight (while collecting dividends) 150701 Beter Bed | Sleep tight (while collecting dividends)

No. pages 41

Based on markets and company results which only started to recover as of mid FY14, we estimate earnings can accelerate further. We estimated the company can reach its peak EBITDA and peak EPS levels as of FY16E, exceeding previous peaks (in FY07, FY10 and FY11). Moreover, healthy free cash flow conversion rates and a balance sheet that never has been so solid support a dividend policy which should at least provide 4-5% dividend yields. Higher pay-outs (>80%) and yields (5-6%) can't be ruled out. Strategically, we believe the company's needs to broaden its geographic horizon to more favorable demographic areas.


    Summary and Conclusions
1   Introduction and profile
2   Consistent performance on the longer term
3   Despite shorter term volatility
4   Store base expansion back on the agenda
5   Sales densities: Current levels below historic levels
6   Sales densities: So, what's the upside?
7   Market(s), macro and demographics
8   Estimates and valuation
9   Appendix

160419 Beter Bed Holding | Expansion more prominently on agenda 160419 Beter Bed Holding | Expansion more prominently on agenda




No. pages


Based on markets and company results which only started to recover as of mid 2014, we estimate earnings can accelerate further. We estimated the company can reach its peak EBITDA and peak EPS levels as of 2016E,exceeding previous peaks. Moreover, healthy free cash flow conversion rates and a net cash position support both an attractive dividend and an expansive strategic policy.



  • Summary and Conclusions

  • Consistent, positive performance on the longer term

  • Despite shorter term volatility

  • Store base expansion more prominently back on agenda

  • Sales densities: despite progress, still below historic levels

  • Sales densities: so what's the upside?

  • Market conditions and economic environment

  • Market conditions and economic environment

  • Estimates and valuation

  • Appendix



170530 BeterBed | uncertainties create opportunities 170530 BeterBed | uncertainties create opportunities

No. pages 30
Description A disappointing share price performance due to unfavorable geographic mix and rising costs
We have published a new report (30 pages) featuring Beter Bed following earlier reports last July 2015 and April 2016. There is no denying that the upside potential that we expected hasn't materialized. Beter Bed's share price dropped considerably thereby underperforming the market. Main reasons for the disappointments were a negative sales growth performance in Germany and accelerating operational costs in general. Ironically, Dutch sales growth rates were so strong that additional capacity was needed to absorb the sales jump.

Road map of our report: Shorter and longer term trends and what about leases?
Chapter 1 of this company report presents further by presenting 2 scenarios. We might be early regarding this subject, but we believe a sluggish share price performance might also have been related to the uncertainties related to leases. However, cash flows will not (hardly) change following the implementation of IFRS 16. Moreover, details our investment case. In Chapter 2 we deepen our focus on longer term trends, specifically on sales densities per country and banner. Lastly, in Chapter 3, we shed our light on the potential impact of the implementations of IFRS 16 as of January 2019 Beter Bed has included provisions in its agreements so that debt covenants are not breached as a result of applying IFRS 16. Bottom line, IFRS 16 should not be a reason for worries, in our view.



190304 Beter Bed Holding | a cleaner sheet as of 2019 190304 Beter Bed Holding | a cleaner sheet as of 2019


No. pages 7




We already commented upon Beter Bed's FY18 results in our What's News last Friday 1st March. In this update we'll highlight our main findings following the FY18 presentation itself. As concluded in our earlier research, e.g. our 30 July 2018 update ('First impressions of new CEO's plan') following the H1-18 results presentation, Beter Bed's new management team has shown a strong sense of urgency and commitment to tackle the issues that have dented the company's profitability. That all started with analysing and identifying the reasons for the underperformance at primarily Matratzen Concord, a process that was basically completed last year. The next steps, including the roadmap towards to 2020-2022 targets, were presented at the CMD last October 2018. Execution has already started, both the cost cutting measurements but also the sales growth initiatives, and will continue this year and beyond.

The FY18 results were softish, but they were distorted by one-offs, as could be expected given the (already completed) restructuring at Matratzen Concord. Apparently, the company itself also felt it needed to further if not better explain the underlying figures. We summarized the underlying developments in the exhibits in this update, which are based on both the company's disclosure as well as our assumptions.

We finish this update presenting our base case savings scenario and illustrate how much progress the company has to realize further to achieve its medium term targets by 2020-2022.







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