MACINTOSH RETAIL GROUP 
By
Maastricht-Airport, the Netherlands
February 10, 2014
Turnover weighed down in 2013 by poor retail market.
Online turnover up nearly 13%.
EBITDA down on 2012, but markedly positive.
Slightly negative operating result for 2013.
Financing covenants adapted.
Turnover (in € millions) | Full year | Q1-Q31 | Q4 | ||||||
Turnover (in € millions) | 2013 | 2012 | % | 2013 | 2012 | % | 2013 | 2012 | % |
Fashion2 | 640.3 | 701.0 | - 8.7 | 457.5 | 511.4 | - 10.5 | 182.8 | 189.6 | - 3.6 |
Living | 181.8 | 192.3 | - 5.4 | 135.4 | 145.2 | - 6.8 | 46.4 | 47.1 | - 1.2 |
Total2 | 822.1 | 893.2 | - 8.0 | 592.9 | 656.6 | - 9.7 | 229.2 | 236.6 | - 3.1 |
1. Figures according to Q3 trading update of 30 October 2013.
2. Inclusive of currency effect of - € 10,4 million in 2013.
The persistent economic crisis in 2013 was to blame for a lack of consumer confidence in every country where Macintosh has retail activities. As a result, consumers held off purchases of non-food items, often only to spend their money when retailers put on special offers and substantially slashed prices. At the same time exceptional negative weather conditions for our activities, both in the spring and in the autumn, clearly affected turnover from Fashion as well as Living.
In the Fashion segment good progress was made with the further roll out of our cross-channel strategy. Besides that a number of measures were taken to increase the traffic to and the conversion within the stores, including price reductions and higher availability of products. The Managing Board also stepped up its direct involvement in retail operations. These measures proved successful in Q4. The number of store visitors declined less and the sales conversion in our stores was up, resulting in higher sales volumes. This recovered turnover in October and increased turnover in November compared to 2012. December, which is a key month in the shoe business, did not bring the same wintry conditions as in 2012, resulting in a lower turnover in that month. On balance, however, showing a 3.6% drop in turnover, Q4 proved to be a marked improvement on the previous three
quarters (average - 10.5%) and Fashion managed to win market share in the Netherlands.
Macintosh Retail Group NV Amerikalaan 100, 6199 AE Maastricht-Airport - 00 31 (0)43-3280780 www.macintosh.nl
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In 2013, strong growth in cross-channel activities resulted in an increase in turnover in Fashion from online activities by nearly 13%, but this increase was not substantial enough to absorb the drop in turnover from brick-and-mortar stores.
As in previous years, Living (Kwantum) suffered from a lower number of people moving house because of the ongoing crisis in the housing market. Owing, in part, to the late onset of spring, with cold spells continuing from March through May (effect on turnover from garden furniture and garden accessories - € 2 million), turnover in the first half of 2013 was down € 6.8 million (- 6.8%). The fall in turnover was € 3.7 million in the second half, of which € 3.2 million was attributable to Q3. In other words, Kwantum too delivered a better performance in Q4 than in the previous quarters on average.
In the trading update of 30 October 2013, we reported that the last months of the year, which usually account for most of Fashion's operating result, would be decisive whether a positive operating result could be realised by Macintosh in 2013.
According to current insights, the relative good Q4 will lead to a clear positive operating result for
the second half of 2013. This will largely offset the negative operating result for the first half (- € 13.0 million). Full year 2013 is expected, therefore, to close on a slight negative operating result (exclusive of non-recurring expenses).
Although we expect EBITDA (operating result + depreciation) for 2013 to be lower than the figure for
2012, it will clearly be positive.
The ratio Net Debt/EBITDA as of year-end 2013 is expected to remain below the covenant (< 3.0x) agreed with the financing banks. This does not apply to the Interest Coverage Ratio (covenant > 3.0x). Agreements have been made with the banks on waiving this covenant per the end of 2013.
The results for Fashion will be negative as usual in the first half of 2014, driven by seasonal influences, while the net debt will as usual follow the normal seasonal pattern and will surpass the 2013 year- end levels at the end of June 2014, due to the arrival and payment of the autumn inventory. Agreement has therefore been reached with the financing banks on raising the Net Debt/EBITDA ratio as per 30 June 2014 to below 4.5x (was < 3.0x). The Interest Coverage Ratio will be increased from larger than 3x to larger than 4.5x per 30 June 2014 and to larger than 5.0x for the thereafter remaining tenor (September 2015) of the facility and will from now on be based on EBITDA instead of EBIT. Furthermore, agreements have been made on a quarterly EBITDA-floor in 2014. Considering the expected results of 2013, Macintosh's dividend policy will not allow for payment of dividends. The agreement with the banks is aligned with this. The credit facility amounts to a maximum of € 160 million, whereas it has been agreed to operate in the second half of 2014 within the liquidity requirement of € 125 million.
The current credit facility expires in September 2015. In the next months preparations regarding the
refinancing of Macintosh will commence.
Macintosh Retail Group NV Amerikalaan 100, 6199 AE Maastricht-Airport - 00 31 (0)43-3280780 www.macintosh.nl
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Financial results
The annual figures have not yet been finalised, nor have they been audited. The financial results for
2013 will be published on 27 February 2014 before the opening of the Euronext Stock Exchange.
Maastricht-Airport, the Netherlands, 10 February 2014
The Managing Board of Macintosh Retail Group NV
This press release is also available on the website of Macintosh Retail Group NV: www.macintosh.n l
Should different interpretations arise between the Dutch and the English version of this press release, the Dutch language version prevails
Retail is our business. Macintosh Retail Group is a large-scale non-food retailer that specialises in the off and online distribution of consumer products in Fashion and Living. Macintosh Retail Group operates nearly 1,000 stores in the Benelux and UK. Fashion comprises some 900 shoe stores of Brantano, Dolcis, Invito, Jones Bootmaker, Manfield, PRO 0031, Scapino and Steve Madden in the Benelux and UK. Online shoe platform Intreza and Nea International are also part of the Fashion sector. Living consists of some 110 home furnishing stores in the Netherlands and Belgium under the name Kwantum.
Macintosh Retail Group NV Amerikalaan 100, 6199 AE Maastricht-Airport - 00 31 (0)43-3280780 www.macintosh.nl
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