A statement by the Chairman

‘We worked hard on our balance sheet structure in 2003, reducing the net financial debt position by generating significant free cash flow. In addition to the cash flow arising from operations, the sale of a portion of the real estate provides an additional free cash flow. The sale of the distribution centre in the United Kingdom must therefore also be seen in this context. When selling the real estate good care was taken to ensure that this will not affect the Group’s future profitability. As the lease that now has to be paid is market compliant and is almost compensated for by the depreciations and financing costs that are being eliminated, the effect on the profit in the future will be minimal.

In addition to the reduction in the net financial debt position work was also carried out on improving the credit structure. Last week we successfully concluded a syndicated loan with our bankers which meant that all existing financial debts have been consolidated into an € 80 million credit line. The fact that all of the existing bankers are participating in this and some were even prepared to increase their exposure to Brantano is a sign that the banks have strong trust in the Group’s future, given the current banking climate’ says Joris Brantegem, Chairman of the Board of Directors.