Brantano turnover rises 9,3 %

The consolidated turnover of the Brantano group for the first quarter of 2004 is € 70.8 million. This represents a rise of 9.3% compared with the turnover earned in the first quarter of 2003. This rise in turnover is primarily due to the strong growth in turnover of the stores in Belgium and the United Kingdom.

On 31.03.2004 the Brantano Group had achieved a turnover of € 70.8 million, which represents a rise of 9.3% compared with the € 64.7 million earned in the first quarter of the previous year. Of the total group turnover of € 70.8 million, Belgium (including Luxembourg) accounts for € 34.7 million, the United Kingdom (including the Middle East) € 31.7 million, the Netherlands € 3.0 million and Denmark € 1.4 million.

Turnover for Belgium (including Luxembourg) therefore accounts for 49.0% of the group total, United Kingdom turnover 44.8 %, the Netherlands 4.3% and Denmark 1.9%.

In the United Kingdom (including the Middle East) turnover of € 31.7 million was earned in 2004 compared with € 27.7 million in the first quarter of 2003. Sales thus grew by 14.5%. The growth in turnover in euros was negatively influenced by the development of the pound. In real terms, namely expressed in pounds, turnover actually increased by 16.4%. Brantano also experienced strong like-for-like growth in the United Kingdom, i.e. 5.2%. In addition, the stores opened in 2003 were responsible for the growth in turnover.

At the end of last year the Group had 313 stores. In 2004 3 stores were opened in the United Kingdom, 1 franchising store in the Middle East and 1 store in the Netherlands were closed. This brings the total at the end of March 2004 to 314 stores. Thus, on 31.03.2004 Brantano has 124 stores in Belgium (including Luxembourg), 132 stores in the United Kingdom, 39 stores in the Netherlands and 15 stores in Denmark, which, including the 4 franchising stores in the Middle East, brings the total to 314.

Brantano stable in 2003 and 2004

The Brantano group’s consolidated turnover for the 2003 financial year amounts to € 303.8 million, i.e. a rise of 1.5% relative to the turnover achieved in 2002. In real terms, without taking account of exchange rate effects, turnover increased by 6.4%.

Of the total group turnover of € 303.8 million Belgium (including Luxembourg) accounted for € 132.0 million or 43.4% of the total turnover, the United Kingdom (including the Middle East) € 144.9 million or 47.7%, the Netherlands € 17.9 million or 5.9% and Denmark € 9.0 million or 3.0%.

During the second half year turnover was influenced negatively in all countries due to the very mild winter season.

New stock valuation rules
The Board of Directors has decided to change the rules for valuing stock. The economic value of the stock will be better reflected by this new valuation method and Brantano will be more comparable with other national and international shoe and clothing distributors.

The new valuation rule entails stock being valued at the acquisition costs (after allocation of the financial discounts). If the acquisition price is higher than the net realisable value, the valuation is adjusted to the lower net realisable value. The net realisable value is equal to the estimated normal sale price, reduced by the estimated sale-related costs.

Gross margin
The gross margin was equal to € 146.3 million in 2003 and amounts to 48.2% of the total turnover. In 2002 the gross margin was € 138.6 million or 46.3% of turnover. The increase in the gross margin results from an economic improvement of the gross margin, on the one hand and on the other, the financial discounts obtained from suppliers for cash payments are no longer viewed as financial income due to the new valuation rule. They are allocated to stock and thus included in the gross margin. € 2.2 million was obtained as a financial discount in 2003.
Operating profit

The operating profit (EBIT) for the 2003 financial year amounts to € 15.9 million compared to € 3.0 million in 2002. The new valuation rule for stock has an impact of € 2.7 million on the operating profit. Calculated with the old stock valuation rule the operating profit amounts to € 13.2 million, which – as previously notified – lies at the lower end of the earlier announced projections (€ 13 – 15 million).

Extraordinary result
In 2003 Brantano Netherlands carried out a restructuring of its Dutch branch. The results of this were thoroughly analysed at the end of 2003. Without taking account of the first quarter the Dutch shops achieved a positive cashflow in 2003. If turnover in these shops is brought back to normal level, the Group considers an improvement in profitability to be possible in the near future.

In addition, an impairment test was carried out on Brantano Netherlands on the basis of a conservative business plan. Based on this test the Board of Directors decided to carry out an extra depreciation of Brantano Netherlands’ goodwill of € 5.1 million. As a result the goodwill on Brantano Netherlands still amounted to € 5.0 million at the end of 2003.

Exceptional charges of € 1.4 million were booked in Denmark as a result of streamlining Danish operations.

A capital gain of € 2.8 million was booked on the sale of the distribution centre in the United Kingdom.

Finally the transition to the new rule for stock valuation resulted in an exceptional income of € 4.5 million.

The total extraordinary result thus amounts to € 0.8 million.

Financial result
The financial result was – € 5.1 million in 2003. Before allocation of the financial discounts to stock the financial result in 2003 was - € 2.8 million, which is the same result as in 2002 (€ 2.7 million).
Current net profit

The Brantano Group achieved a net profit of € 5.7 million in 2003 compared with € 0.3 million in 2002. The (current) net profit amounts to € 7.1 million.

Balance sheet and cashflow statement
In 2003 Brantano invested € 10.1 million. On the other hand, the Group achieved an incoming cashflow of € 48.6 million through the net cashflow from operations (€ 31.1 million), the divestment of fixed assets (€ 17.5 million) and a reduction in working capital requirements by € 12.7 million.

As a result a free cashflow of € 38.5 million was generated in 2003. This was applied in full to reducing the Group’s net debt position, bringing net financial debt from € 89.5 million at end-2002 to € 53.9 million at 31 December 2003, and cutting the net financial debt/equity ratio from 172% to 104%, while the financial debt/ EBITDA ratio fell from 4.2 to 2.2.

The Brantano Group completed a syndicated loan of € 80 million on 24 December 2003 to improve the credit structure. The members of the syndicate are the existing Brantano Group bankers and the syndicated loan has a duration of 5 years. The long-term debt/short-term debt ratio has been improved via this loan.

Development in number of outlets
At the end of 2002 the Group had 295 shops. A net 18 shops was added to this in 2003. Thus on 31.12.03 Brantano had 124 shops in Belgium (including Luxembourg), 129 shops in the United Kingdom, 40 shops in the Netherlands and 15 shops in Denmark. Including the 5 franchising outlets in the Middle East this brings the total to 313 shops.

Dividend
The Board of Directors meeting at the Annual General Meeting of 12 May 2004 will propose the distribution of a gross dividend of € 2,852,040 or € 1 per share (€ 0.75 net).

Prospects
Turnover
The Group assumes limited like-for-like growth for 2004. In addition, it is expected that further growth in the United Kingdom, where 10 openings are planned, will again be largely levelled out by a further fall in the pound. As a result turnover will prove to be between € 305 and € 310 million in 2004.

Outlet openings
2 openings are planned in Belgium and 10 in the United Kingdom in 2004. 1 closure and no openings are planned in both the Netherlands and Denmark.

Investments
The investment budget for 2004 is € 7.5 million, of which € 3.4 million is for new shops.

Operating result (EBIT)
Without taking account of other operating income from outlet management (in 2003 this influenced the operating result by € 3.6 million), the Group is budgeting for an operating result (EBIT) of between € 13 million and € 15 million for 2004.

Word from the Chairman
“2003 was the year of financial stability for the Brantano Group. We reduced the net financial debt by 40%. This leads to a decrease in financial debts of € 35.6 million. Moreover, we concluded a syndicated loan amounting to € 80 million at the end of the year. Stability was also achieved at shareholder level by attracting Fortis Private Equity. Starting from a stable base we can therefore focus completely on operations in 2004. These suffered from the mild winter in the second half of 2003. The difficult economic climate also influenced sales in all countries. In Belgium this resulted in negative like-for-like turnover. In the United Kingdom link-for-like turnover grew by almost 2%. This is quite a performance. Cashflow from the Dutch outlets was positive over the last 9 months despite the low turnover. Based on this fact, and taking account of a realistic growth in income in the coming years, we have drawn up a business plan that we support fully and on whose basis we have decided that we must continue to give the recovery plan its opportunity. Finally, we slimmed down the main office in Denmark significantly in 2003. We expect a positive contribution from the shops in 2004.” says Joris Brantegem

www.brantano.com
17 february 2004

Brantano successfully concludes € 80 million loan

The Brantano Group successfully concluded a syndicated loan of € 80 million last week. The members of the bankers’ consortium are the Brantano Group’s existing bankers. The subscriptions amply exceeded € 80 million. The syndicated loan has a duration of 5 years. The distribution centre in the United Kingdom was sold on 23 December, once again within the context of reinforcing the balance sheet structure. The sale price is £ 8.785 million and the distribution centre is being leased back subject to normal market conditions.

Syndicated loan

The Brantano Group has successfully concluded a syndicated loan of € 80 million. Fortis Bank and Commerzbank were Lead Arrangers for this transaction. Brantano’s current bankers (Fortisbank, Commerzbank, KBC, Dexia, ING and Banca Monte Paschi Belgio) have not only accommodated their existing loans in the syndicated loan; they were also prepared to increase their total credit position in the Brantano Group, which meant that the demand for a consolidated credit line of € 80 million was oversubscribed. The syndicated loan has a duration of 5 years.

Sale and lease-back of UK distribution centre

The distribution centre in the United Kingdom was sold to the Standard Life Investment Funds on 23 December 2003 for € 12.5 million (£ 8.785 million). Brantano simultaneously concluded a 20-year lease agreement based on normal market conditions. The buyer will obtain a yield of 6.824% on the basis of the agreed lease.

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.

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31 december 2003

Brantano Profits Boost

Out-of-town footwear retailer Brantano reported pre-tax profits up to 12.6 per cent to GBP5.8million across the group for the first nine months of 2003. Sales rose 0.9 per cent to GBP159.8m. The UK, including five Middle East stores, accounted for GBP75.5 million.

1 December 2003
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Brantano sells 11 stores

To finace the takeover of 28 Famous Brunswick stores in the UK the Brantano Group has entered into an agreement with the Belgian vastgoedbevak Retail Estates on the sale of 11 Brantano stores for a total amount of 8 million euro. After the sale, Brantano will once again rent all sold stores. With this sale, Brantano generated the means for the take-over and refit of 28 Famous Brunswick stores internally. With this sale, Brantano realises a gain on assets before tax of 1.5 million euro.
As per 31 December 2002, the Brantano Group had 295 stores, of which 32 (21 from now on) were their own property and 263 are rented. The stores owned by Brantano are all situated in Belgium. The Brantano Group also owns the distribution centres in Belgium, the UK and the Netherlands, which is currently for sale.

The 11 stores that were sold to Retail Estates mainly concern properties bought by the Group more recently. It concerns the Brantano stores in Gembloux, Marche-en-Famenne, Hasselt, La Louvière, Spa, Tienen, Zemst, Dilbeek, Herent, Herstal and Lokeren.

The Brantano Group remains the tenant of the properties sold to Retail Estates and has entered into long-term contracts in accordance with market conditions. Negotiations resulted in a return for Retail Estates of 8.25% in accordance with the market.

Late December 2002, Brantano was able to take over 28 Famous Brunswick stores in the UK, which speeds up its expansion in the UK, the growth market for Brantano, enormously. As this take-over perfectly fits in with Brantano's strategy, the decision was made to phase out real estate possession, which is not considered as a core activity, and to generate the necessary take-over resources this way. With the sale's net profit Brantano will finance the take-over of these 28 stores and their conversion to Brantano stores.

www.brantano.be
april 2, 2003

Brantano increases sales by 6%

The consolidated sales revenue of the Belgian Brantano Group for the 2002 financial year was 299.4 million euros. This amounts to an increase of 6.0 percent compared with the sales revenue achieved in 2001. In the United Kingdom (including the Middle East), sales revenue of 132.5 million euros was realised in 2002, compared with 118.0 million euros in 2001. Sales revenue thus increased by 12.3 percent. In 2002, Brantano realised a like-for-like growth in sales revenue of 2.1 percent.

The growth in sales revenue in homeland Belgium (including Luxembourg) amounts to 4.6 percent (130.6 million euros in 2002 versus 124.8 million euros in 2001). This growth was primarily realised in the shops opened in 2001 (10) and 2002 (7).

As of 31 December 2002. Brantano has 127 shops in Belgium (including Luxembourg), 96 in the United Kingdom, 51 in the Netherlands and 15 in Denmark. The six franchise shops in the Middle East bring the total to 295.

Joris Brantegam, Delegate Member of the Executive Board of the Group, in a statement: "With regard to the sales revenue in 2002, our expectations were slightly higher. Nevertheless, the sales revenue of the Brantano Group increased by 6 per cent. In the United Kingdom, our strongest growth market, we had a LFL growth of 2.1 percent. In Belgium, LFL sales revenue remained roughly the same, following a super year in 2001."

In 2003 Brantano plans to open around 45 new shops, of which 38 will be in the United Kingdom, including the 28 Famous Brunswick Warehouse shops the company took over at the end of December 2002, as well as 4 in Belgium and 3 in Denmark.

January 22, 2003
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Belgian Brantano buys 24 Brunswick stores

The Brantano Group has agreed to buy 24 stores in the UK form Famous Brunswick Warehouse. With this 3.2 million purchase, Brantano's planned expansion in the UK has been accelerated greatly. The purchase fits flawlessly into the Brantano strategy. The UK is a strong growth market for the Brantano Group.

Famous Brunswick Warehouse Limited is a shoe distributor with 68 stores in the UK. Due to difficult marketing conditions the chain entered into administration in the beginning of December. As a result all 68 stores were put up for sale. Brunswick will almost certainly continue to trade from some of the stores not sold to Brantano.

The transaction consists of the purchase of the stores and the store fittings. The stock is not to be taken. The purchase will take place in two phases: one in January and in the beginning of February 2003. The costs of the conversion are also budgeted at 3.2 million euros.

December 31, 2002
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Brantano to merge with Mitiska

Leading Belgian shoe chain Brantano is to merge with holding group Mitiska in a move that will see the two combine their retail operations, according to The Belgian newspaper De Standaard. Mitiska holds a 41 per cent stake in Brantano and will merge with the footwear retailer and increase its capital in 2003 to reduce the group's debts and improve its balance sheet.

The report saw Brantano's shares fall six per cent in early trade today while both companies remained tight-lipped on the reported deal.

In an extremely short press-release, Brantano claims it "is considering a new structure aimed at determining the focus on Brantano and safeguarding its future. Along with the advisors, Brantano and Mitiska will examine a number of possible options."

December 18, 2002
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Brantano streamlines international campaign

The Brantano Group had ended its relation witch Saatchi & Saatchi and opted for the TBWA bureau as new strategic marketing partner. The Belgian shoe retailer announced the news this week. From now on TBWA will assist the Brantano Group in determining its international marketing strategy and developing international marketing campaigns. The Group is currently. The marketing strategy will be streamlined internationally. One single international campaign is being developed, which will be used in all countries in question. This way the Brantano concept is positioned the same way in every country. Brantano currently has 292 stores operating in 8 countries: Belgium, Luxembourg, the United Kingdom, the Netherlands, Denmark, Bahrain, the United Arab Emirates and Qatar.

To anticipate the local customer, marketing will be drawn up by local bureaus per country.
TBWA\Brussels is part of the TBWA\GV Group Belgium, and TBWA/GV Group Belgium is part of TBWA\International. The group is responsible for the marketing strategies and campaigns for example of Samsonite and Delhaize.

www.brantano.com
October 11, 2002

SHOE RETAILER BRANTANO CHANGES TO QUARTERLY REPORTIING:

RESULTS FOR THE FIRST QUARTER OF 2002

OPERATIONAL CASH FLOW (EBITDA) UP BY 2.7 MILLION EUROS

The Brantano Group has decided to change to quarterly reporting in order to provide their investors with information more regularly. In the traditionally negative first quarter, Brantano succeeded achieving better profitability ratios in 2002. During the first quarter of 2002, the Brantano Group realised consolidated sales revenue of 60.7 million Euros and a negative operational cash flow (EBITDA) of 0.8 million Euros an improvement of 2.7 million Euros compared with the first quarter of 2001.

The financial year of the Brantano Group closes on 31 December. The first quarter thus involves the months of January, February and March.

During the first quarter of 2002, the Brantano Group realised consolidated sales revenue of 60.7 million Euros, which represents an increase of 12.2 percent with respect to the 54.1 million Euros realised in the first quarter of 2001.

This increase can be attributed to a large like-for-like increase in sales (from stores that have already been open for more than 12 months) in Belgium, the UK and Denmark, sales realised from stores opened in 2001 and the opening of a total of four new stores during the first quarter of 2002. Belgium (including Luxembourg) yielded 44.7 percent of the group total, the UK 43.3 percent and the Netherlands and Denmark 9.8 and 2.2 percent, respectively.

The gross margin increased from 40.6 percent in the first quarter of 2001 to 43.2 percent in the first quarter of 2002. This increase can be explained by better inventory management in all countries, a shift in the sales season in Belgium and the fact that the Dutch management resolutely decided for qualitative sales revenue in place of quantitative.

The operational cash flow (EBITDA) also showed a significant increase. Whereas this still amounted to -3.5 million Euros in the first quarter of 2001 (-6.5 percent of sales), in the first quarter of 2002 it was equal to -0.8 million Euros, or -1.3 percent of sales.

The operational result (EBIT) in the first quarter of 2002 was equal to -4.3 million Euros or -7.1 percent of sales, compared with -4.0 million Euros or -7.4% of sales in the first quarter of 2001.

Profit before taxes amounts to -4.3 million Euros in the first quarter of 2002, compared with -4.2 million Euros in the first quarter of 2001.

'In our sector - shoe retailing - the first three months of the year are the weakest months of the year. Weak turnover (such as in February) is combined with the lowest gross margins (due to discounting) and booking the fixed costs. In 2001, for example, in the first quarter we realised 19.2 percent of the sales revenue for the whole year and 16.5 percent of the gross margin for the whole year. Since we are convinced that the regular supply of information that comes with quarterly reporting provides added value for the investor, we decided to report quarterly results starting with this year. In this manner, one of the rules regarding financial information that comes with the NextPrime label has been implemented in practice earlier than required.'
'In the first quarter of 2002, we succeeded in significantly increasing both sales revenue and profitability. This is realized by a strong performance of Belgium and the UK. In Denmark things are going according to plan and in the Netherlands, a change in the discounting-policy resulted in a higher gross margin,' according to Joris Brantegem, Chairman of the Executive Board.

www.brantano.com
6 june 2002

COMPANY RESULTS OF 18,0 MILLION EURO EXCEEDS EXPECTATIONS

In the financial year 2001 the Brantano Group realised a consolidated turnover of 282.6 million euro and current profits stand at 13.0 million euro after tax. With an operating result (EBIT) of 18.0 million euro the provisional figure of 17.4 million euro was easily outstripped.

In the financial year 2001 the Brantano Group achieved a consolidated turnover of 282.6 million euro, which represents an increase of 19.1% compared to the 237.3 million euro that was achieved in 2000.

This increase is in part due to the historically high like-for-like growth in turnover (turnover growth of the shops that had been open for longer than 12 months as of 01.01.2001) in Belgium (including Luxembourg), namely 13.2%; a very high like-for-like growth in turnover, namely 7.0%, combined with the opening of 16 shops in the United Kingdom; and the fact that the activities in the Netherlands and Denmark were consolidated for 12 months this year compared to 9 and 5 months respectively for the previous year.

Of the total turnover of 282.6 million euro, Belgium (including Luxembourg) was responsible for 124.8 euro, the United Kingdom (including the shops in the Middle East) for 118.0 million euro, the Netherlands 33.6 million euro and Denmark 6.2 million euro.

The turnover of Belgium (including Luxembourg) amounted to 44.2% of the group total, with the United Kingdom (including the shops in the Middle East) turnover representing 41.7%, whilst the Netherlands accounted for 11.9% and Denmark for 2.2%.

The operating result of Brantano is 18.0 million euro. In 2000 the operating result was positively influenced by a one-off sum of 3.35 million euro by the other one-off operating income resulting from the sale of the rental entitlement of the shop in Cheshunt (UK) and the expense of the start-up costs in Denmark. Without taking these into account the trading profits (EBIT) increased in 2001 by 15.6 % compared to 2000. The operating result is thus 3.2% higher than originally budgeted (17.4 million euro). The current profits after taxes have increased by 13.2 % compared to 2000 .

The current net profits amount to 13.0 million euro and have therefore risen by 5.7 % compared to the 12.3 million euro1 that were achieved in 2000.

Despite the operating losses in Denmark and the fact that the Dutch subsidiary has been unable to contribute to the group results, the Group has succeeded in increasing the results significantly, due to the strong performance of the shops in Belgium and the United Kingdom which together were responsible for 86% of the total group turnover.

At the Annual General Meeting on 8 May 2002, the Board of Management will propose the payment of a gross dividend of 3,422,448 euro, or 1.2 euro per share (or 0.9 euro net). This amounts to an increase in the dividend of 9% and a pay-out ratio of 28%.

Prospects for 2002
Taking the planned openings (some forty in total) in the various countries into account Brantano confirms an increase in turnover of 10%, which with a constant rate of exchange for the Pound Sterling amounts to 310 million euro.

The investment budget for 2002 amounts to 18.87 million euro, of which 11/2 million euro is for the opening of 40 new shops.

For 2002 the Group expects the operating results to be 19.8 million euro or rather an increase of 10%.

"Thanks to the very high like-for-like increase in turner and better stock management we have managed in Belgium and the United Kingdom to increase profitability considerably. In the United Kingdom we have more than compensated for the full effect of the five-yearly rent increases in 23 of the 47 shops that we took over. In addition to Belgium, the United Kingdom is now presenting itself as our base from which to strengthen and extend further international expansion. We believe very strongly in this development. In the Netherlands we are working hard on the expansion of a strong organisation. It is our intention to realise a turnaround in 2002. In Denmark we are being selective about opening shops and the emphasis there is on marketing especially to increase growth in turnover in the existing shops," according to Joris Brantegem, Chairman of the Board of Management.
Erembodegem, 19 February 2002.
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