Beter Bed Holding

GRI INDEX 2014

Strategy & Analysis

G4-1
Statement from the most senior decision-maker of the organisation about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability.

For Beter Bed Holding and its subsidiaries, corporate social responsibility means that they make a positive contribution to the communities in which they operate. That contribution is embodied, for instance, in complying at all times with laws and regulations and always treating the interests of all stakeholders with respect. Healthy business practices therefore go hand in hand with respect for people and the environment.

As a specialist in the field of bedroom furniture and as a market leader in several countries in Europe, Beter Bed Holding seeks to provide a good, healthy night’s rest for its customers, on the basis of good-quality products, properly trained staff and excellent service.

Ton Anbeek: ‘What we do needs to be good for people, animals and the planet, and therefore also for our customers, employees and business partners. To us, growth is much more than investing in more revenue. We firmly believe that this vision does not just benefit our results and reputation but also provides greater satisfaction in what we do. We do not only want to do things right but also and especially want to do the right things, in a financially sound manner.’

Strategic priorities and key topics for the short and medium term with regard to sustainability, including respect for internationally recognised standards and how such standards relate to long term organisational strategy and success.

CSR targets at a glance

Subject

2014

2013

2012

Target

Chain management

100%

100%

97%

2013 100%

Codes of conduct signed

Diversity in management

22%

22%

16%

2016 30%

Women in management

Sickness rate

3.6%

3.5%

3.2%

2016 3%

Germany

Sickness rate

4.2%

4.3%

4.8%

2016 3.5%

The Netherlands

Safe products

82%

81%

78%

2016 80%

Certified mattresses

Energy consumption (GJ)

240,000

275,000

270,000

2016 235,000

Recycled waste

48%

46%

46%

2016 75%


Broader trends affecting the organisation and influencing sustainability priorities.

Beter Bed Holding N.V. was able to benefit from a recovering market in nearly all the countries in which it operates. The Netherlands and Germany, in particular, experienced a clear recovery in revenue. Austria also showed excellent development and growth continued in Belgium and Spain. Switzerland was the only country that posted decreasing revenue. The measures in the field of positioning, margin improvement, cost savings and customer satisfaction that have been taken over the past two years in anticipation of a market recovery produced results.

The organisation’s strategic decision to strengthen its purchasing, e-commerce and customer service have contributed to the positive development and led to the desired like-for-like growth in revenue. All things considered, we can conclude that in 2014 the organisation once again took good steps forward in the development of a modern omni- channel retail formula.

Key events, achievements, and failures during the reporting period.

2014 was a year with two faces for Beter Bed Holding. After a weak start, which followed a disappointing order intake in the final months of 2013, the order intake picked up in the Netherlands at the end of the first quarter of 2014. We saw a similar development in Germany and Austria in the second quarter. Revenue rose strongly in the second half of 2014 at all the formulas in all the countries in which we are active, with the exception of Switzerland. This meant Beter Bed Holding was ultimately able to achieve a 1.8% increase in revenue. The like-for-like order intake for the full year was +4.8%.

In addition to the focus on top-line growth, the company was able to take structural next steps forward with respect to improving margins, reducing net working capital, limiting complexity and, 'last but not least', with respect to achieving innovation at the Beter Bed and El Gigante del Colchón formulas and product and brand innovations at M Line and Alpine Plus.

Expenses developed in a controlled manner and any increases in expenses were aimed at strengthening the commercial power in the field of marketing, innovation and e-commerce and improving service and customer satisfaction. The policy of reducing rents (in combination with fewer square metres whenever possible) was continued. The Slaapgenoten, Matrassen Concord Netherlands and Matrassen Concord Belgium formulas were discontinued.

Propensity to buy in the home furnishings segment in Germany initially remained at the low level of 2013. There was greater movement in the market at the end of the second quarter. Matratzen Concord was able to pick up on this trend and it deployed targeted marketing activities in order to translate it into substantially higher revenue for the remainder of the year. As a result it was possible to increase market share again in 2014. While online revenue developed positively, it continues to constitute only a limited share of total revenue. Matratzen Concord in Austria had an extremely successful year that was driven by successful promotions. Consumers were less keen to buy in the home and bedroom furnishings segment in Switzerland.

The recovery in the Netherlands, at primarily Beter Bed, is a result of the recovering housing market on the one hand and the renewed and contemporary look and feel of the stores, the new advertising campaign, the new logo and the higher service level on the other. The customer satisfaction benchmark, Net Promoter Score (NPS), was successfully introduced in mid-2014. A total of 45 stores were successfully refurbished in 2014. The other stores will be refurbished in the first half of 2015. Beter Bed’s online revenue has grown slightly and amounts to approximately 5% of the total revenue. Beter Bed opened two new stores in Belgium.

El Gigante del Colchón also had an excellent year. The restyled modern stores have caught on well. The number of stores is also once again beginning to grow gradually. We expect to be able to strengthen our position in the Spanish market in tandem with the recovering market in the country.

The company expects the positive revenue trend of 2014 to continue in 2015. The economic outlook remains moderately positive, as does the forecast for consumer spending. The focus remains fully on (like-for-like) growth in revenue and consequently on formula and product innovation, omni-channel e-commerce and customer satisfaction. In addition to completing the refurbishment of the Beter Bed stores, the process of making the stores at the other formulas more competitive, attractive and contemporary will commence following the successful conclusion of the pilots that are currently underway.

Improving margins, stringently controlling expenses and reducing net working capital will obviously continue to receive our full attention.

Views on performance with respect to targets.

The company can look back on a successful year with a good recovery in revenue and operating profit. We understand that none of this would have been possible without the fantastic efforts and dedication of our employees. We would therefore like to take this opportunity to thank them sincerely and wholeheartedly.

Outlook on the organisation’s main challenges and targets for the next year and goals for the coming three to five years.

Positioning the company’s retail formulas such that growth opportunities can be exploited to maximum effect. Beter Bed Holding aims to expand its position in all the markets in which it operates by offering strong, competitively positioned retail formulas. The needs of consumers and the ‘customer comes first’ principle form the basis for our actions. This will allow the company to further strengthen its position as the European market leader, always in a socially responsible manner.

The Slaapgenoten, Matrassen Concord Netherlands and Matrassen Concord Belgium formulas were discontinued in 2014. The Beter Bed formula was modernised in 2014 by means of a new marketing strategy, a new logo and an updated store concept. This process will be completed in 2015. A similar approach will be applied to Beddenreus in the Netherlands and Matratzen Concord in Germany, Austria and Switzerland, as well as El Gigante del Colchón in Spain in 2015.

Other items pertaining to the organisation’s strategic approach.

Beter Bed Holding N.V. was able to benefit from a recovering market in nearly all the countries in which it operates. The Netherlands and Germany, in particular, experienced a clear recovery in revenue. Austria also showed excellent development and growth continued in Belgium and Spain. Switzerland was the only country that posted decreasing revenue. The measures in the field of positioning, margin improvement, cost savings and customer satisfaction that have been taken over the past two years in anticipation of a market recovery produced results.

The organisation’s strategic decision to strengthen its purchasing, e-commerce and customer service have contributed to the positive development and led to the desired like-for-like growth in revenue. All things considered, we can conclude that in 2014 the organisation once again took good steps forward in the development of a modern omni-channel retail formula.


G4-2
Description of key impacts, risks, and opportunities for the organisation the impact of sustainability trends.



Section 1: Organisation’s key impacts on sustainability and effects on stakeholders.

Significant economic, environmental and social impacts of the organisation, and associated challenges and opportunities.

The vision for corporate social responsibility was launched in 2010: ‘In every country in which we operate, we intend to become the market leader in the value-for-money segment of the bed and mattress market, in a socially responsible manner.’ The general code of conduct defines what corporate social responsibility is for Beter Bed Holding. Beter Bed Holding has developed codes of conduct for its staff and for its suppliers. These codes are aligned with the UN Global Compact.

In 2011 Beter Bed Holding reported extensively for the first time on CSR in accordance with the GRI G3 guideline. The focus on topics and reporting has aided Beter Bed Holding in suitably positioning the topic of CSR within the organisation.

In 2012, the company committed to the United Nations’ Global Compact Code. The ten principles it summarises seamlessly match the codes of conduct for both our own staff and our strategic suppliers. The company has also set itself medium-term targets. It is important for a successful CSR strategy to set ambitious goals in a modest context: they must be relevant, make a positive contribution and be attainable with our own resources within a period of three years.

In 2013, the reporting was adapted in line with the fourth generation of GRI guidelines. This mainly affected the detailed reporting in the GRI Index, for which a start was made on defining views on the broad selection of CSR topics. In addition, a first step was taken to improve prioritisation by means of a materiality review in the sector.

Approach to prioritising challenges and opportunities arising from sustainable development.

In 2014, the organisation engaged in active dialogue with its stakeholders. The dialogue was conducted by asking in advance which priorities Beter Bed Holding should set. In three sessions, the stakeholders were given ample opportunity to formulate their views on CSR at Beter Bed Holding.

The three principal conclusions are:

  1. The reporting structure with a compact annual report and a detailed GRI Index is appreciated.

  2. Beter Bed Holding has ensured that its own business processes are properly in order and should now give greater priority to responsibility in the chain.

  3. The pragmatic approach has laid a solid foundation for CSR within the organisation. What is Important now is to better embed this topic within the organisation.

The priorities arising from the stakeholder dialogue are reported in chapter Identified material aspects & boundaries.

Key conclusions about progress in sustainable development and related performance.

Strengths

  • The suppliers with which the organisation has a long-term relationship all signed the code of conduct. The signing of the code is still in progress at four new suppliers.

  • Energy consumption totalled 240,000 gigajoules. The decrease is attributable to the decrease in the number of stores and the continual focus on energy savings. Consumption of natural gas and fuel oil fell substantially, by 22% compared with last year. This decrease largely resulted from the relatively mild winter in Western Europe.

Possible improvements

  • Diversity, defined as the number of women in management positions, was unchanged. Two women were appointed to senior positions in the Netherlands. In Germany and Switzerland, the number of female region leaders fell. In 2015, we will again vigorously aim to increase the number of women in management positions.

  • The volume of waste rose by 240 tonnes. That is attributable to the refurbishments within the Beter Bed formula in 2014. The percentage of recycled waste rose slightly.

  • In the past three years, Beter Bed Holding has made significant progress in the field of CSR reporting, as reflected in the scores versus the transparency benchmark as shown in the chart. The score in the previous report for 2013 had fallen. The decrease is however not caused by policy changes at Beter Bed Holding, but by a different weighting of various components in the benchmark. Beter Bed Holding is assuming that the score for 2014 will resume the uptrend, given the greater role of stakeholders in determining Beter Bed Holding’s CSR targets.

What will be done in 2015

  • Beter Bed Holding will review how the advice of stakeholders to continue changing CSR in the organisation can be implemented. The main option under consideration is a CSR policy team that meets regularly, initiates actions and monitors the progress of activities already under way.

  • The stakeholder dialogue showed that certain targets should be assigned a different (higher) priority. Thus stakeholders rank customers’ health and safety (i.e. the quality of the product) as priority number one. Beter Bed Holding will formulate new medium-term targets on the basis of this new prioritisation.

Main processes in place to address performance and relevant changes.

Beter Bed Holding will consider how the advice of stakeholders to embed CSR more deeply in the organisation can be implemented. This could for instance be achieved by a CSR policy team that meets periodically, initiates actions and monitors the progress of activities already underway.



Section 2: Impact of sustainability trends, risks, and opportunities on the long-term prospects and financial performance of the organisation.

Most important risks and opportunities for the organisation arising from sustainability trends.

The dialogue with stakeholders has shown that Beter Bed Holding is expected to have (and provide) insight into the origins (and the environmental impact) of raw materials and products and semi-manufactured products used by suppliers. In addition to the standard requirement of signing of the code of conduct by all suppliers, it is necessary to consider how Beter Bed Holding can take on a pro-active role to ensure that materials used by suppliers meet the applicable requirements from a CSR perspective as well. Beter Bed Holding will take preparatory steps for this in 2015.

Prioritisation of key sustainability topics as risks and opportunities according to their relevance for long-term organisational strategy, competitive position and financial value drivers.

The priorities for corporate social responsibility at Beter Bed Holding are reported in the section Identified Material Aspects & Boundaries.

Medium-term sustainability targets, including updates on the progress achieved presented in a table.

The table CSR targets at a glance is reported earlier in indicator G4-1.

Governance mechanisms in place specifically to manage sustainable development.

The Management Board of Beter Bed Holding is responsible for CSR. The CFO is chairman of the policy team, which is supported by the consultancy firm MVOplossingen.

The organisation has been advised by the stakeholders to organise CSR even more systematically, by periodically calling meetings for the CSR policy team, initiating actions and monitoring progress of activities already underway.

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