Beter Bed Holding

Annual Report 2014

General notes

  • General

    The consolidated financial statements have been prepared on a historical cost basis, except for land, which is carried at fair value. The consolidated financial statements have been compiled in accordance with the International Financial Reporting Standards (IFRS), as approved for use in the European Union and in accordance with the interpretations as adopted by the International Accounting Standards Board (IASB). Unless expressly stated otherwise, the amounts stated in these notes refer to the consolidated figures. The consolidated financial statements have been drawn up in euros and all amounts have unless stated otherwise been rounded off to thousands (€ 000).

    The 2014 consolidated financial statements of Beter Bed Holding N.V. have been drawn up by the Management Board and were considered in the meeting of the Supervisory Board on 12 March 2015. These financial statements are still to be adopted by the shareholders. The adoption of the financial statements has been placed on the agenda of the Annual General Meeting of Shareholders on 19 May 2015. Pursuant to Section 402 of Book 2 of the Dutch Civil Code, the company financial statements contain an abbreviated profit and loss account.

  • Application of new standards

    Insofar as applicable, the company applied the following new and revised IFRS standards and IFRIC interpretations that are relevant for the company:

    IFRS 10

    Consolidated Financial Statements, effective 1 January 2014.

    IFRS 11

    Joint Arrangements, effective 1 January 2014.

    IFRS 12

    Disclosure of Interests in Other Entities, effective 1 January 2014.

    IFRS 10-12

    Transitional provisions, effective 1 January 2014.

    IAS 27

    Statutory Financial Statements, effective 1 January 2014.

    IAS 28

    Investments in Associates and Joint Ventures, effective 1 January 2014.

    IAS 32

    Financial Instruments: Presentation: Offsetting Financial Assets and Financial Liabilities, effective 1 January 2014.

    IAS 36

    Impairment of Assets, effective 1 January 2014.

    IAS 39

    Financial Instruments: Recognition and Measurement – Novation of Derivatives and Continuation of Hedge Accounting, effective 1 January 2014.

    The application of these standards and interpretations had no material effect on the company’s financial position and results.

    The following standards and interpretations were issued on the date of publication of the financial statements, but were not yet effective for the 2014 financial statements. Only those standards and interpretations are listed below that Beter Bed Holding reasonably expects to have an impact on the disclosures, the financial position or the results of Beter Bed Holding upon future application. Beter Bed Holding intends to apply these standards and interpretations as soon as they become effective.

    IFRS 9

    Financial instruments, effective 1 January 2018*.

    IFRS 15

    Revenue from contracts with customers, effective 1 January 2017*.

    IAS 1

    Presentation of the financial statements – Disclosure initiative, effective 1 January 2016*.

    IAS 16 and IAS 38

    Tangible fixed assets and intangible assets – Clarification of Acceptable Methods of Depreciation and Amortisation, effective 1 January 2016*.

    IAS 19

    Employee Benefits – Defined Benefit Plans: Employee Contributions, effective 1 February 2015.

    IAS 27

    Statutory Financial Statements – Equity Method in the Statutory Financial Statements, effective 1 January 2016*.

    IFRIC 21

    Levies Charged by Public Authorities, effective 17 June 2014.

    * Not yet approved by the European Union.

    Annual Improvements to IFRSs 2010-2012 Cycle (published December 2013), effective 1 February 2015.
    Annual Improvements to IFRSs 2011-2013 Cycle (published December 2013), effective 1 January  2015. Annual Improvements to IFRSs 2012-2014 Cycle (published September 2013), effective 1 January  2016.

    The company has taken note of the improvements and is currently assessing their consequences.

  • Principles of consolidation

    New group companies are included in the consolidation at the time at which the company can exercise effective control over the company. The information is accounted for on the basis of full consolidation using uniform accounting policies. All intercompany balances and transactions, including unrealised gains on intercompany transactions, are eliminated in full. Beter Bed Holding N.V. has issued declarations of joint and several liability for all Dutch group companies for the obligations arising from all legal transactions entered into by these group companies. Pursuant to these letters of guarantees, the Dutch group companies have made use of the exemption options laid down in Article 403, paragraphs 1 and 3, of Part 9, Book 2 of the Dutch Civil Code.

    The following companies are involved in the consolidation of Beter Bed Holding N.V. and its participating interests.

    Name of statutory interest

    Registered office

    Interest %

    BBH Beteiligungs GmbH

    Cologne, Germany


    BBH Services GmbH & Co K.G.

    Cologne, Germany


    Bedden & Matrassen B.V.

    Uden, The Netherlands


    Beter Bed B.V.

    Uden, The Netherlands


    Beter Bed Holding N.V. y Cia S.C.

    Barcelona, Spain


    Beter Beheer B.V.

    Uden, The Netherlands


    DBC International B.V.

    Uden, The Netherlands


    DBC Nederland B.V.

    Uden, The Netherlands


    DBC Deutschland GmbH

    Moers, Germany


    El Gigante del Colchón S.L.

    Barcelona, Spain


    Linbomol S.L.

    Barcelona, Spain


    M Line Bedding S.L.

    Barcelona, Spain


    Madrasser Concord ApS

    Copenhagen, Denmark


    Matratzen Concord (Schweiz) AG

    Malters, Switzerland


    Matratzen Concord GmbH

    Cologne, Germany


    Matratzen Concord GesmbH

    Vienna, Austria


    Procomiber S.L.

    Barcelona, Spain

    100 GmbH

    Cologne, Germany


    Literie Concorde SAS

    Reichstett, France


  • Principles for the translation of foreign currencies

    The consolidated financial statements have been prepared in euros. The euro is the functional currency of Beter Bed Holding N.V. and the reporting currency of the group. Assets and liabilities in foreign currencies are translated at the rate of exchange on the balance sheet date; result items are translated at the rate of exchange at the time of the transaction. The resultant exchange differences are credited to or deducted from the profit and loss account. Exchange differences in the annual accounts of foreign group companies incorporated in the consolidation are taken directly to the reserves. The results of consolidated foreign participating interests are translated into euros at the average exchange rate for the year under review. On the disposal of a foreign entity, the deferred accumulated amount recognised in equity for the foreign entity concerned is taken through the profit and loss account.

  • Accounting policies

    Tangible fixed assets

    Tangible fixed assets other than company land are valued at the purchase price or production price less straight-line depreciation based on the expected economic life or lower realisable value. Company land is valued at the estimated current value. Land is carried at fair value on the basis of periodic valuations by an outside expert. Any revaluations are recognised in equity, with a provision for deferred taxation being formed at the same time. Company land and tangible fixed assets under construction are not depreciated.

    A tangible fixed asset is derecognised in the event of disposal or if no future economic benefits are expected from its disposal or use. Any gains or losses arising from its balance sheet derecognition (calculated as the difference between the net proceeds on disposal and the book value of the asset) are taken through the profit and loss account for the year in which the asset is derecognised. The residual value of the asset, its economic life and valuation principles are reviewed and if necessary adapted at the end of the financial year.

    Lease agreements

    The determination whether an arrangement forms or contains a lease agreement is based on the content of the agreement and requires an assessment to determine whether the execution of the agreement is dependent upon the use of a certain asset or certain assets and whether the agreement gives the right to actually use the asset. Beter Bed Holding only has operating leases. Operational lease payments are recorded as expenses in the profit and loss account evenly throughout the lease period.

    Intangible fixed assets

    Initial valuation of intangible fixed assets is at cost price, with the cost price of intangible fixed assets obtained through acquisition equal to the real value as of the acquisition date. Thereafter, valuation is at cost price minus cumulative write-downs and impairment. Costs of development are activated when they are likely to generate future economic benefit.

    Intangible fixed assets are assessed in order to determine whether they have a limited or unlimited life span.

    Intangible fixed assets are written down over the life span and checked for impairment if there are indications that the intangible fixed asset may have been subjected to impairment.

    The period and method used to write down an intangible fixed asset with limited life span are assessed in any event at the end of each period under review. Any changes in the expected life span or expected pattern of the future economic profits from the asset are accounted for by means of a change in the write-down period or write-down method and must be treated as a change in estimate. Write-downs on intangible fixed assets with limited life spans are recognised in the profit and loss account.

    Any profits or losses arising from the off-balance-sheet status of intangible fixed assets relate to the difference between net profit upon sale and the book value of the asset, and are recognised in the profit and loss account, so that the asset is actually no longer included in the balance sheet.

    Impairment of assets

    The company assesses per reporting date whether there are indications that an asset has been impaired. If there is any such indication or if the annual assessment of impairment of an asset is required, the company estimates the asset’s realisable value.

    An asset’s realisable value is the higher of the fair value of an asset or the cash-flow generating unit (after deduction of the selling costs) and the value in use. If an asset’s book value exceeds the realisable value, the asset is deemed to have been impaired and its value is decreased to the realisable value. When assessing the value in use, the present value of the estimated future cash flows is determined, with the application of a discount rate before tax that takes into account the current market assessment of the time value of money and the specific risks associated with the asset.

    An assessment is made on each reporting date of whether there are indications that a formerly included impairment loss no longer exists or has decreased. If there is any such indication, the realisable value is estimated. A formerly included impairment loss is only reversed if a change has occurred in the estimate that was used to determine the realisable value of the last impairment loss since it was included in the accounts. In that case, the book value of the asset is increased to the realisable value. This increased amount cannot be higher than the book value that would have been determined (after deducting sums in depreciation) if no impairment loss had been included for the asset in previous years. Any such reversal is accounted for in the profit and loss account.

    Derecognition in the balance sheet of financial assets and liabilities

    A financial asset (or, if applicable, part of a financial asset or part of a group of similar financial assets) is no longer included in the balance sheet if the group is no longer entitled to the cash flows from that asset or if substantially all risks and rewards of the asset have been transferred or – if substantially all risks and rewards of the asset have not been transferred – the entity has transferred ‘control’ of the asset.

    A financial obligation is no longer included in the balance sheet once the obligation has been fulfilled or discontinued or has expired. If an existing financial obligation is replaced by another from the same lender, under substantially different conditions, or if considerable amendments are made to the conditions of the existing obligation, the replacement or amendment is dealt with by including the new obligation in the balance sheet and no longer including the original obligation. The difference between the relevant book values is included in the profit and loss account.


    Tax liabilities for current or previous years are valued at the amount that is expected to be paid to the tax authorities. The amount is calculated on the basis of the tax rates set by law and the applicable tax legislation.

    A provision is formed for deferred tax liabilities based on the temporary differences on the balance sheet date between the tax book value of assets and liabilities and the book value entered in these financial statements. Deferred tax liabilities are entered for all taxable temporary differences. The deferred tax liabilities are valued at nominal value.

    Deferred tax assets are recognised for available tax loss carryforwards and deferred tax assets arising from temporary differences at the balance sheet date between the amounts of assets and liabilities for tax purposes and the book values recognised in these financial statements. They are valued at nominal value. Deferred tax assets arising from future tax loss carryforwards are only recognised to the extent that it is probable that sufficient future taxable profit will be available against which they can be utilised.

    Deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on applicable tax rates and enacted tax laws. 


    Stocks are valued at the lower of cost price and market value. The cost price consists of the purchase price less purchase discounts and plus additional direct costs. The market value is formed by the estimated sale price within normal business operations minus the estimated costs of completion and the estimated costs for settling the sale. Where necessary, the downward adjustment of the value of unmarketable goods is taken into account. Unrealised intercompany profits are eliminated from the stock valuation. 

    Cash and cash equivalents

    Cash and cash equivalents on the balance sheet consist of bank credit and cash.

    Other assets and liabilities

    Other assets and liabilities are valued at amortised cost. Where necessary the assets take doubtful debts into account. The notes contain a specification of any differences between the market value of these assets and liabilities and the amounts stated in the balance sheet.

  • Determination of the result

    Net revenue

    The net revenue is understood as the proceeds of the sale of goods and services to third parties less discounts and similar, and sales taxes. Revenue is valued at the time the goods are delivered to consumers and other customers.

    Cost of sales

    These comprise the cost of the goods and services included in sales, after deduction of any payment discounts and purchase bonuses received, increased by directly attributable purchase and supply costs.


    The costs are determined in accordance with the aforementioned accounting policies, and are allocated to the financial year to which they relate. Interest is recognised as an expense in the period to which it relates.


    A variety of pension schemes are in use within the company. In the Netherlands, the majority of the employees participate in the Wonen Industrial Pension Fund. This is an average pay scheme with a maximum pension accrual on the income for social security contributions. This arrangement is currently considered a ‘defined benefit’ arrangement. This pension fund is not, however, presently able to provide data that enable a pure application of IAS 19. Consequently this pension scheme is considered a defined contribution arrangement.

    Virtually all other pension schemes are based on the defined contribution system. The premiums paid to the Wonen Industrial Pension Fund and to insurers respectively are included as expenses in the year for which they are applicable. There are no company specific pension schemes in the other countries.


    Depreciation is calculated using the straight-line method based on the expected economic life. Additions in the year under review are depreciated from the date of purchase.

  • Cash flow statement

    The cash flow statement is drawn up using the indirect method. The ‘cash and cash equivalents’ item stated in the cash flow statement can be defined as cash and cash equivalents less short-term bank overdrafts, inasmuch as this does not relate to the short-term component of long-term loans. Short-term bank overdrafts are accounted as an integral part of the cash flow management.

  • Share-based transactions

    Members of the Management Board and a few other employees of the company receive remuneration in the form of payment transactions based on shares, whereby these employees provide certain services in return for capital instruments (transactions settled in equity instruments). The expenses of the transactions settled with employees in equity instruments are valued at the real value on the allotment date. The real value is determined on the basis of the Black & Scholes model. Performance conditions are taken into account when determining the value of the transactions settled in equity instruments.

    The expenses of the transactions settled in equity instruments are, together with an equal increase to the capital and reserves, entered in the period in which the conditions relating to the performance and/or services are met, ending on the date on which the involved employees receive full rights to allotment (the date upon which these rights have become unconditional). The cumulative expenses, for transactions settled in equity instruments on the reporting date, reflect the degree to which the waiting period has expired and also reflects the company’s best estimation of the number of equity instruments that will ultimately be allotted unconditionally. The amount that is charged to the profit and loss account for a certain period reflects the movements in the cumulative.

  • Risks

    Currency risks, arising mainly from purchases in dollars, are not covered. A 5% change in the average dollar exchange rate would, on the basis of the purchasing volumes in the financial year, produce an effect of approximately € 136 (2013: € 148) on the operating profit (EBIT) if sales prices remain the same. There are virtually no financial instruments in foreign currencies.

    Owing to the current capital structure of the company, interest rate risk is very limited. The effect on the result of a change (increase or decrease) in interest rate by 50 basis points would be approximately € 0 before tax (2013: € 25), on the basis of the use of the credit facilities at year-end 2014. The book value of the financial obligations is virtually equal to the fair value. Credit risk is limited to the wholesale operations and trade receivables under bonus agreements. No specific measures are required for this, in addition to standard credit control. The fair value of receivables is equal to their book value. The maximum credit risk equals the carrying amount of the receivables.

    Liquidity risk is not very significant, owing to the nature of the company’s operations and financial position. A description of the available credit facilities can be found in the chapter
    current obligations. For an explanation of the other risks, please refer to the related section in the Report of the Management Board.

  • Capital management

    The company has a target solvency (equity/total assets) of at least 30% in accordance with the dividend policy. In addition, the ratio of net interest-bearing debt/EBITDA may not exceed two. The item stocks is by far the most important in the working capital. Targets have been defined for this for each formula. These variables are included in the weekly reports. Solvency at year-end 2014 was 58.6% (2013: 56.6%). The – net interest-bearing – debt/EBITDA ratio was 0.0 in 2014 (2013: 0.22).

  • Information by segment

    Various operating segments are identified within the group as they are reviewed by the decision-makers within the entity. These operating segments independently earn revenues and incur expenses. These operating segments are aggregated into a single reportable segment as the nature of the products, the customers and distribution methods are comparable and in addition the economic characteristics are similar.

  • Estimates

    If important estimates are made when drawing up the financial statements, an explanation will be provided in the discussions for each item in question. Accounting estimates were applied mainly for the tangible and intangible fixed assets and the provision for onerous contracts.