ANNUAL REPORT BLOKKER HOLDING 20...

2014

ANNUAL REPORT

BLOKKER HOLDING

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CONTENTS

FOREWORD 4OVERVIEW OF THE SUPERVISORY BOARD, BOARD OF DIRECTORS, MANAGEMENT AND CENTRAL WORKS COUNCIL 8REPORT OF THE SUPERVISORY BOARD 9HIGHLIGHTS 2014 11REPORT OF THE BOARD OF DIRECTORS 12ACCELERATED TRANSFORMATION WITH NEW STRATEGY 15NEXTAIL 19

HOUSEHOLD 22BLOKKER 23BLOKKER OUTSIDE THE NETHERLANDS 26 XENOS 27BIG BAZAR 30BUDG€T 31COOK&CO 32MARSKRAMER 34TREND CENTER 35ELEKTROBLOK 35

TOYS 36BART SMIT 37INTERTOYS 39MAXI TOYS 41

LIVING 43LEEN BAKKER 44

BLOKKER HOLDING FINANCIAL REPORT 47CONSOLIDATED BALANCE SHEET 48CONSOLIDATED INCOME STATEMENT 49CASH FLOW STATEMENT 50FINANCIAL REPORTING PRINCIPLES 51NOTES TO THE CONSOLIDATED BALANCE SHEET 54NOTES TO THE CONSOLIDATED INCOME STATEMENT 57COMPANY BALANCE SHEET 60COMPANY INCOME STATEMENTS 60NOTES TO THE COMPANY BALANCE SHEET 61OTHER INFORMATION 64INDEPENDENT AUDITOR’S REPORT 65

FACTS AND FIGURES 66KEY DATA 66

ADDRESSES 68

4 BLOKKER HOLDING aNNuaL REpORT 2014

FOREwORD

The year 2014 saw the official kick-off of our Transformation Strategy 2017, in which we focused more than ever on change, innovation and progress. We invested many extra millions of euros in upgrading our online and offline retail formats and in the underlying logistics systems and IT and appropriated substantial funds for the corporate reorgani-sation at Blokker B.V., all of which marks the official start of our transformation. Our new strategy and the hard work and dedication of our 22,000 committed employees are what keeps us in the game as a strong player and will help us to return to profitable growth in the foreseeable future.

We continued to face tough market conditions in 2014 and had to cope with lower revenues in our main sector, Household. Coupled with our provisions and increased expenses, this has resulted in a net operating loss. We are aware of the need to go full steam ahead with the transformation and are confident that, supported by our dedicated employees, strong retail brands, solid plans and strong financial basis, we will remain a powerful and sustainable player in the turbulent and sometimes erratic non-food retail market.

FOCUS ON FORMAT DEVELOPMENT RATHER THAN EXPANSIONAs reported in our previous annual report, we shifted our focus for the first time in years from expansion to format development and e-commerce. In 2014 as well, we

The new Blokker format in a prime location at Hoofddorp’s Vier Meren shopping centre opened in February 2015.

concentrated on the quality of our current online and offline formats as opposed to expanding our store base.

OUR ‘CHANGE AGENDA’QuaLITY, SERVICE, CONVENIENCE aND RELEVaNCEWe are rapidly introducing a variety of new innovations in order to continue meeting our customers’ needs. There are many different ways of developing new formats, ranging from opening pilot stores to updating existing stores. Many of our stores are being or will be completely upgraded. We began this process in 2014 and have since changed the format of a total of 51 stores or reopened them based on a new format – and we are only just getting started. The initial results have been promising and we will be changing over more stores to the new format at an accelerated pace.

At the same time, we also want to keep surprising our custo-mers with new product ranges, and indeed, we continued to actively pursue new partnerships and enter into licensing agreements with various high-profile brands in 2014. Successful examples of this include the new products under licence from cable food channel ‘24Kitchen’ and ‘Rudolph’s Bakery’ at Blokker and Cook&Co. Blokker launched an exclusive and exciting range of Douwe Egberts products in 2015 – a perfect selection of beloved and trusted home-grown Dutch brands. Consumers can currently redeem their Douwe Egberts Reward

BLOKKER HOLDING aNNuaL REpORT 2014 5

Points at more than half of all Blokker stores and we expect this promotion to drive strong sales gains in the future.

Creating and launching strong white-label brands such as the UMIX range of furniture at Leen Bakker and the Le Sud garden furniture line at Leen Bakker and Blokker are both excellent examples of some of the innovative changes we have introduced in our product ranges.

The launch in 2014 of Nextail, our Shared Service Center (SCC) for omnichannel retailing, is a key milestone in our company’s history and consistent with our strategy of becoming an omnichannel organisation. The 2014 results are encouraging, with revenue having increased by 24% to EUR 98 million.

The talented e-commerce specialists employed at the Nextail SSC serve all our webshops, with activities ranging from social media and online marketing to online development and content improvement for the thousands of items we offer our customers in our current webshops. Following the launch of new webshops for Xenos and Blokker Belgium in early 2015, our group currently has twelve online sales outlets.

FaCILITaTING SERVICE aND QuaLITYThe services we provide to our customers form an integral part of our business, extending to our stores, our online channels and our aftersales services.

According to data collected by research company Service Scout, Cook&Co provided the best online service of any retailer in the Netherlands in 2014 and in April 2015 Blokker won the Consumer Centric DNA Award for ‘Most Customer-Friendly Offline Retailer’.

We will also work to further improve the service level of each of our formats in the coming year. How should our retail employees be trained in order to communicate to customers the value to which each of our formats aspires and how should they interact with customers in this era of omnichannel retailing? These are the questions at the heart of the ongoing debate in which we engage in our organisation.

We can only deliver the level of service and quality we want to our customers if we maintain the long-term drive to change, upgrade and improve our company alongside our stores. However, these changes cannot be achieved in just one year, which is why our transformation strategy will see us through to 2017. As part of these initiatives for change, we developed a roadmap for IT in 2014, one of the reasons being to make more business data available in real-time.

Having successfully launched a group-wide Enterprise Resource Planning (ERP) system at Bart Smit in January 2015, we are pleased to report that preparations for the launch of this same new system at Intertoys in June also point to success. The system is set to be rolled out at the other formats in the next few years. Meanwhile, the implementation of a single e-commerce platform for all our webshops is also proceeding according to plan. The benefits of these efforts will be substantial once the standardisation has been completed. The improved check-out process for webshops can now efficiently be rolled out for all our webshops in a standardised format. We have also begun implementing a number of changes in our logistics systems. In the Netherlands and Belgium, we are currently setting up a new supply chain organisation which will transport goods from suppliers to consumers with even greater efficiency. One of the key logistics issues for our

Nextail, the new online organisation for Blokker Holding formats.

The partnership with 24Kitchen has resulted in a successful product range for Blokker and Cook&Co.


organisation is improving our working capital and we are in the process of developing a group-wide and integrated set of processes and procedures in our Supply Chain.

Our goal of further developing and expanding our omnichannel operations also requires that we optimise our logistics systems. Another challenging change project that is currently underway is the e-distribution centre we are creating in Gouda for the blokker.nl and blokker.be webshops.

Cost savings remain essential for our organisation. While our two largest expenses continue to be rent and wage costs, we managed to significantly reduce rents in the Netherlands during the year under review through a structured approach of negotiating with all our lessors. Wage costs are being kept strictly under control across the entire group by making sure the work our employees perform in our stores is adapted to revenue trends and store traffic. We are therefore focusing increasingly on the costs of our non-merchandise in order to reduce our total cost base.

As we are experiencing first-hand, change is not necessarily always a positive thing: for the first time in our history, we are forced to let approximately 400 employees go at Blokker stores across the Netherlands. Blokker’s recent lower retail

sales revenues and shifts in store traffic have left us no other choice but to reduce the workforce at half of our own (non-franchise) Blokker stores.

The current, dynamic retail landscape is changing so rapidly that the work which was traditionally always performed by our employees is constantly subject to evaluation and change. Our HR department supports these organisational changes in a number of ways, including through the group-wide, performance-based assessment system introduced recently.

In addition to Human Resources, various other departments are also enhancing their operations in a variety of ways. This includes the customer service departments of Blokker in the Netherlands and in Belgium, each of which made great strides during the year under review. There are many aspects in our company that require new skills and the will to change our organisation and it is very satisfying to see the energy with which our teams are dealing with these changes.

CHANGES IN THE PORTFOLIOBlokker Holding’s retail portfolio saw two significant changes in 2014. At the end of June, we sold the Tuincentrum Overvecht (TCO) chain of garden centres. Blokker Holding had originally acquired this company with the intention of gaining a foothold

This Leen Bakker store in Breda was changed to the new format and opened its doors on 21 May 2015.


in the retail sector in exurban areas. We were expecting that a possible liberalisation of zoning plans would enable us to sell our other product categories in large shopping precincts in less populated parts of the country. We decided to sell this division in 2014 because the operation of garden centres is no longer among our core activities. An additional factor is that TCO had been operating at a loss in recent years.

The second key change in the portfolio is the deconsolidation of the Casa chain of household supplies. Following the transfer of management control over all Casa activities, Casa was deconsolidated at the start of the year under review and is currently classified under ‘Associates’.

We are optimistic and confident that we will remain in the game as a stronger player in the years to come. At the time of writing of this annual report, the first new Blokker TV adverts were being aired on Dutch television. Using the payoff Fijn dat we er zijn (It’s good that we’re here), we are reintroducing ourselves to the Dutch public as the leading omnichannel household goods retailer in the Netherlands. The payoff is the result of careful marketing, based on consumer research and the experiences of our customers, suppliers and employees. We are about to open dozens of stores based on the new format and we are making

substantial investments in blokker.nl. We have already taken the first steps and our expectations are high.

But our innovations are obviously not limited to Blokker alone: all our retail chains are working hard on this and we are backed by our many stakeholders, who are enthusiastically welcoming and supporting our plans for a transformation. We have listed some of these stakeholders, along with the various ways in which they contribute, below.

• Our customers contribute their own input and ideas for our new formats, as well as providing feedback and keeping up with our new formats, brands, product ranges and webshops, even if there are start-up issues. We would like to take this opportunity to thank our customers for their input, loyalty and support.

• Our employees are more flexible than ever, and – given the recent changes in the non-food retail sector – they must be able to adapt to new duties and new and different working hours, both in our stores and in the distribution centres. We are working in new group-wide positions at the head office and in logistics, including in Supply Chain, Category Management and format development. We have also changed the way we work together and are looking for more synergy across the operating companies in Shared Service Centers such as for omnichannel/e-commerce (Nextail), IT, quality and real estate properties.

• The Central Works Council provides input for our agenda for change, shares ideas and provides constructive criticism. The Council is working with us in our shared effort to turn the transformation into a success.

• Trade unions play a key role during corporate reorganisations. We are working with them in order to protect jobs in the future.

• Suppliers of merchandise contribute to the supply chain process, which will enable us to optimise our working capital.

• Suppliers of non-merchandise are improving their services and providing more value for money.

• Lessors are working with us on building realistic business models. We expect market-level rents and flexibility with regard to the term of the leases.

• Our shareholders and members of the Supervisory Board support our plans. The shareholders are patient: our revenue has been lower than in the past and the company’s transformation cannot be achieved in just one year.

I would like to conclude by thanking the stakeholders listed above and our other partners for their vote of confidence in our ongoing corporate transformation.

Amsterdam, the Netherlands, 13 May 2015

Roland Palmer, Chairman of the Board of Directors

Douwe Egberts Reward Points can be redeemed at more than half of all Blokker stores.


SupERVISORY BOaRD, BOaRD OF DIRECTORS, MaNaGEMENT aND CENTRaL wORKS COuNCIL SITuaTION aS aT 13 MaY 2015

SUPERVISORY BOARDP.C. Klaver, ChairmanA. BlokkerM.J. Poots-Bijl H.Th.E.M. RottinghuisA.J.L. Slippens

HOUSEHOLD

BLOKKERJ. Peters, ChairmanF.J.J. LetschertO. BocxeK.H.H. van DoornC. HooijdonkH. SchipperW.J.M. Voss, Deputy

BLOKKER BELGIuMF.A.C. De Belie, ChairmanL.R.M. Steenbekkers

BIG BaZaRR.E. van Geest, ChairmanB.J.H. Kasteel

BuDG€TR.E. van Geest

COOK&COA.J.J. van Schaik*

MaRSKRaMER/NOVYJ.G.D. Groot Baltink, ChairmanJ. Pels, Deputy

XENOSA.J.J. van Schaik, Chairman*H.J.J. de Bie*O. SjoerdsE.T.J. Vosbeek

BOARD OF DIRECTORSR.E. Palmer, ChairmanL.M. de Kool, Deputy ChairmanJ.W. Visser, CFOT. Smit

GROUP MANAGEMENTR.E. Palmer, ChairmanA.J. BrouwerL.M. de KoolA. SchrijverT. SmitJ.W. Visser

WHOLESALERS

ELEKTROBLOKJ.G.D. Groot Baltink

TREND CENTERA. Vonk

TOYS

BaRT SMITT. Smit, ChairmanJ.J.M. de Boer, DeputyS.J.T. HansenH.C.A.M. Verbaandert, Deputy

INTERTOYSL.M. de Kool, Acting Chairman*J. NapS.J.M. Buffing

MaXI TOYSA.C. Mettens, ChairmanG.M.M. HenrionA.E.G. Hellebaut

LIVING

LEEN BaKKERR.F. van den Noort, Chairman*J.W. BraafhartM.N. Eijffinger, DeputyJ.A.A. Krol, Deputy

LEEN BaKKER BELGIuMR.F. van den Noort*

GROUP SECRETARYP.J. Krenn

OTHER DIRECTORSJ.M. Vos (Real Estate)Ms S.J. van der Mispel (Real Estate)J. van de Schraaf (Group Control)

CENTRAL WORKS COUNCIL

EXECuTIVE COMMITTEEM.A. van der Vos (Intertoys), ChairmanT.N.P. van Hees (Blokker),Deputy ChairmanM. Hartog (Xenos, Cook&Co), Secretary

OTHER MEMBERSJ. van den Berg (Big Bazar)J.B.A.M. de Bont (Marskramer)D. Drenth (Bart Smit)A.I. Drogt (Big Bazar)G.G.M. Garnier (Leen Bakker)A. Gebhard (Xenos, Cook&Co)M. Rapaic (Bart Smit)F.M. de Rijke (Intertoys)L. Verbeek (Marskramer)W.A.B. Verkooijen (Leen Bakker)C.H.M. van Zuilen (Blokker)

´

* As at 1 July 2015.


REpORT OF THE SupERVISORY BOaRDThe two domineering trends that shaped the year under review were, on the one hand, continued lower consumer spending in the countries in which our group operates with its retail formats and, on the other hand, the upgrading of various formats, the creation of the transformation strategy and the start of the rollout of the omnichannel strategy.

Total group revenue in 2014 fell by approximately 1% from 2013 (adjusted for the business of Casa and Tuincentrum Overvecht, which were deconsolidated in 2014). The report of the Board of Directors sheds light on revenue and profit trends in the Household, Toys and Living sectors. After restructuring expenses and profit from associates, the consolidated net group result for 2014 was EUR -20 million (2013: EUR 61 million).

The Supervisory Board is presenting for adoption the financial statements for the financial year 2014 prepared by the Board of Directors. These financial statements have been audited by BDO Audit & Assurance B.V.; their audit statement is included on page 65 of this report. We adopted the financial statements based on this report, their statement and other data and we recommend these financial statements to be approved.

COMPOSITION OF THE BOARD OF DIRECTORS AND SUPERVISORY BOARDAs noted in the previous annual report, Ms M.J. Poots-Bijl was appointed to the Supervisory Board effective 1 March 2014 on the nomination of the Central Works Council. She also serves as the chair of the Audit Committee. As previously reported, Mr A. Blokker retired from the Board of Directors on 1 April, joining the Supervisory Board as of that same date. Mr A.H.M. van der Horst, who retired from the Board of Directors on 1 June, had been with the group since 1988. He was initially employed by Blokker B.V. and eventually joined the Board of Directors as a member and CFO in 2009. We are extremely grateful to Mr Van der Horst for his excellent work at Blokker Holding over the years. Mr J.W. Visser was appointed as a member of the Board of Directors and CFO effective 1 November 2014. In the General Meeting of Shareholders of 11 June 2014, Mr H.T.E.M. Rottinghuis and A.J.L. Slippens retired by rotation and were subsequently reappointed by the Meeting.

CENTRAL WORKS COUNCILMembers of the Supervisory Board attend consultation meetings with the Central Works Council. Items on the agenda for the consultation meeting with the Council in July 2014 included the financial statements for the 2013/2014 financial year, the updated group strategy and developments related to the Collective Agreement (CAO). This meeting was attended by Ms Poots-Bijl. The Supervisory Board is committed to promoting open and constructive meetings with the employee representatives.

SUPERVISION AND GOVERNANCECurrent developments were discussed with the Board of Directors during the year under review, in accordance with a fixed schedule of meetings. The Supervisory Board and the Board of Directors convened on six occasions in the year under review, while the Supervisory Board members also consulted several times outside these meetings.

Delegations from the Council also held regular meetings with the Chairman and members of the Board of Directors during the year under review. The various committees that form part of the Board also convened on several occasions during the year under review, while the Audit Committee met twice during this period. A meeting was held with the CFO and the external auditor to discuss the summary of the audit findings, the financial statements and the audit report.

In the year under review, the Chairman of the Audit Committee also consulted with the external auditor in the absence of the members of the Board of Directors. The Nomination Committee was involved, among other things, in the search and selection of a new CFO.

Pursuant to the Management and Supervision Act [Wet bestuur en toezicht], the group currently does not maintain a balanced distribution of male and female management and supervisory positions. Our organisation has always maintained that the main consideration in making appointments is the quality of the candidates and their suitability for the roles in question.


Topics discussed at length on various occasions in the meetings with the Board of Directors included the group strategy, the development of pilot stores and the significant increase in the online business of the retail formats and e-fulfilment activities based on the omnichannel strategy. Several on-site meetings were held at the various operating companies, including a presentation by the General Manager of the format in question.

Other items discussed in the meetings with the Board of Directors were the demerger and deconsolidation of the business activities of Casa, the establishment of Nextail (the Shared Service Center for online, operational developments within the group) the efficiently executed automation of the internal reporting systems, the operational budget, the investment budget, disposal and the revenues and profits of the various formats and the group as a whole. In our meetings with the Board of Directors, we also periodically discussed issues relating to human resources, including social policies, the necessary reorganisation of the Blokker Nederland retail organisation, management development and the results of the Employee Engagement Survey.

The Board discussed the annual report and financial statements in a meeting with the Board of Directors, in the presence of the external auditor. In addition, the Supervisory Board and Board of Directors also discussed and assessed the performance

of, and collaboration between, the two boards and the other stakeholders. The Supervisory Board assessed its own performance in spring 2015.

Tuincentrum Overvecht was sold during the year under review. The decision was made during the year under review to form new provisions for the closure of loss-making stores for various formats.

The year 2014 was a disappointing year for Blokker Holding overall on account of the weaker revenues and lower profits. The Board endorses the transformation strategy and is confident that the Board of Directors is implementing the appropriate measures to improve the group’s performance in the coming years. The Supervisory Board would like to express its thanks to the Board of Directors, management and employees for their commitment and hard work during the year under review.

Amsterdam, the Netherlands, 13 May 2015

Supervisory BoardP.C. Klaver, ChairmanA. Blokker M.J. Poots-BijlH. T.E.M. RottinghuisA.J.L. Slippens


HIGHLIGHTS 2014

BLOKKER HOLDING• Revenue of EUR 2,098 million; down by 1.1%• Further growth in online revenue – driven in part by the

Nextail services – by 24% to EUR 98 million• Operational EBITDA* reaches EUR 65.3 million

(2013: EUR 139.5 million)• EUR 66.5 million invested in upgrading formats, supply

chain, logistics and IT

HOUSEHOLD• Revenue falls by 2.9% over last year• Blokker opens 6 new stores based on the new format• Further growth of Xenos in Germany with the opening of 12

new stores; total German revenue grows by 20% • Big Bazar opens 9 new XL stores with a new format and an

all-new product range• Continued strong revenue growth of the Blokker and

Cook&Co webshops

TOYS• 1.7% revenue growth• Continued growth for Bart Smit and Intertoys webshops• Revenue boost through popular toy trends such as

Loombands• Maxi Toys distribution centre expanded from 30,000 to

45,000 square metres

LIVING • Leen Bakker revenue remains stable (-0.4%)• Blokker Holding withdraws from garden-centre market

following the sale of Tuincentrum Overvecht• Leen Bakker launches the new format (including new logo

and branding) at 5 existing stores• Launch of new white-label brands in furniture (UMIX) and

(in conjunction with Blokker) in garden furniture (Le Sud)

HOuSEHOLD

14,405TOYS

5,132

LIVING

2,253wHOLESaLERS/OTHER

75

NuMBER OF STORES IN 2014/15

HOuSEHOLD

1.467

TOYS

717

LIVING

181

Net revenue at Blokker Holding. The orange sections indicate changes in revenue, adjusted for the sale of Tuincentrum Overvecht and the deconsolidation of Casa.

100

50

0

20122010 20142011

REVENuE FROM wEBSHOpS (IN EuR MILLION)

2013

NET REVENuE (IN EuR MILLION)

3,000

2,000

1,000

0

20132011 20142012

TOTaL NuMBER OF EMpLOYEES IN 2014/15

21,865(2013/14: 21,659)

TOTaL NuMBER OF STORES IN 2014/15

2,365(2013/14: 2,393)

NuMBER OF EMpLOYEES IN 2014/15

* Operating profit before interest, taxes, depreciation, amortisation and provisions for the purpose of restructuring.

Revenue from webshops increased by 24%: from EUR 79 million in 2013 to EUR 98 million in 2014.

The figures have been adjusted to include the sale of Tuincentrum Overvecht (TCO) and the deconsolidation of Casa.

2,122 2,098


REpORT OF THE BOaRD OF DIRECTORSThe year 2014 can be regarded as a transitional year. Based on the Transformation Strategy 2017 launched by the Board of Directors and Group Management in 2014, a number of key investments were made in areas such as new formats, omnichannel retailing, automation and logistics. Various cost-saving measures were implemented as well.

The purpose of the strategy is to start generating profitable growth again within three years and to become a leading sustainable provider of omnichannel retail services through our formats in the Benelux region. The strategies for France and Germany are designed to further successfully expand our retail and online activities. Our Transformation Strategy 2017 is detailed on page 15 of this report.

During the transitional year 2014, Blokker Holding found itself faced with falling revenues and increased costs. Together with the additional expenses for improving customer service, web care and our marketing activities, this has resulted in substantially lower profits. After the deduction of restructuring costs and the loss from the sale of Tuincentrum Overvecht (TCO), net group earnings totalled EUR -20 million. Fortunately, the group can rely on an extremely solid financial basis and receives virtually no financing from external sources.

REPORTING PERIODBlokker Holding follows a non-calendar financial year, running from the fifth week in January up to the fifth week in January of the following year. The 2014/2015 financial year ran from 26 January 2014 to 24 January 2015 (inclusive). The financial year is also referred to below as ‘the year under review’ or ‘the year 2014’. The composition of the group changed during the year under review. TCO was sold effective 30 June 2014, while Casa – following the transfer of management control over all of Casa’s operations – was deconsolidated with effect from the year under review and is currently classified under ‘Associates’.

In the Report of the Board of Directors, the key figures for 2013 and 2014 have been adjusted to reflect the deconsolidation of Casa and TCO; this is done for the purpose of comparison. Note that the figures contained in the annual report have not been adjusted.

REVENUENet group revenue (exclusive of VAT) during 2014 reached EUR 2,098 million, representing a 1% decline from 2013, when the group generated total net revenue of EUR 2,122 million.

WEBSHOPS

blokker.nl blokker.be

xenos.nl cookandco.nl

bartsmit.com intertoys.nl

maxitoys.be intertoys.de

maxitoys.fr maxitoys.lu

leenbakker.nl leenbakker.be

NET REVENUE

In EUR thousand 2014/15 2013/14 Index

Household 1,083,020 1,115,315 97.1

Toys 666,854 655,744 101.7

Living 323,379 324,812 99.6

Retail trade 2,073,253 2,095,871 98.9

Wholesalers 24,728 25,928 95.4

Total net revenue 2,097,981 2,121,799 98.9

The amounts listed exclude Casa / TCO

While this was a difficult year for the Household retailers, the formats in the Toys and Living sectors performed well. Revenue growth in our four key markets shows a different picture from last year: the Netherlands -1.9%, Belgium -1.2%, France -1.4% and Germany +6.1%.

The revenue in retail sales value (i.e. retail sales including VAT) generated at both our company-owned stores and the franchise stores plus the revenues of our wholesalers at invoiced value exclusive of VAT totalled EUR 2,613 million versus EUR 2,646 million in 2013, representing a 1% decline. By year-end 2014 the group operated a total of 2,365 stores, broken down into 2,044 company-owned stores (including 11 webshops), 321 franchise stores and 2 wholesalers.

WEBSHOPSWe saw another sharp rise in revenue from our webshops in 2014. Customer sales (including VAT) from sales in our webshops increased by nearly 25% to approximately EUR 100 million. Following the closure of the Marskramer webshop in spring 2015 and the launch of the xenos.nl and blokker.be webshops, the number of webshops currently stands at 12.

This net revenue is shown below, divided among the three strategic retail sectors which make up our group and our wholesalers.


RESULTOperational EBITDA* excluding Casa and TCO reached EUR 65.3 million in 2014 (2013: EUR 139.5 million). The main reason for this sharp drop in profit was the lower revenue in the Household sector. In line with the group strategy to strengthen the core activities in this sector, a number of measures were implemented to increase revenue and reduce costs over the long term. Revenue and profit in the Toy and Living sectors are in line with last year.

After deduction of the restructuring costs and recognition of the EUR 7.5 million loss from the sale of Tuincentrum Overvecht, the consolidated net group earnings for 2014 totalled EUR -20 million (2013: EUR 61 million).

* Operating profit before interest, depreciation, taxes, amortisation and

provisions for the purpose of restructuring.

INVESTMENTSOperational cash flow before working-capital changes reached EUR 55.5 million (2013: EUR 131.6 million). The main cause of the drop is the sharp fall in earnings. The total amount invested in tangible and intangible fixed assets was significantly larger in 2014 than in 2013. A total of EUR 66.5 million was invested in 2014 (2013: EUR 56.3 million). A number of targeted investments were made in 2014 as part of the group strategy. The bulk of these investments went towards the organisation and establishment of Nextail, the online orga-nisation responsible for managing all e-commerce activities of the operating companies. We also continued to invest substan-tially in IT and logistics and, at various operating companies, in the development and rollout of pilot stores, fully in line with the Transformation Strategy 2017. These investments were financed internally within the group. Net cash flow from operating activities totalled EUR 1.9 million (2013: EUR 148.7 million), mainly as a result of the lower profit and a sharp increase in stocks.

The group concluded 2014 with a balance sheet total of EUR 1,104 million (2013: EUR 1,041 million). Shareholders’ equity fell to EUR 467 million (2013: EUR 486 million). The solvency rate (defined as the ratio between shareholders’ equity and borrowed funds) fell to 42.4% (2013: 46.7%).

PROFIT APPROPRIATION In light of the lower earnings, the Board of Directors has proposed that no dividends be paid for the 2014 financial year; this proposal has also been incorporated into the financial statements. The proposal to refrain from paying any dividends also applies to the dividends for employees participating in the existing Oranje Boven Participation Plan. The value of the Oranje Boven certificates is determined based on a fixed valuation rule whereby the average of Blokker Holding’s net earnings for the past two years form the basis. This amount fell again following the substantially lower earnings in 2013 and 2014.

CENTRAL WORKS COUNCILThe Central Works Council is comprised of members of the works councils of our subsidiaries in the Netherlands (for details on their composition, please refer to page 8 of this annual report). The Central Works Council convened on a total of nine occasions during 2014, including twice in consultation meetings with the CEO. These consultation meetings are generally attended by a member of the Supervisory Board.

In addition to the consultation meetings, the Executive Committee of the Central Works Council also consults regularly with the CEO. The consultation meeting held in July was attended by the newly appointed Supervisory Board member Ms M.J. Poots-Bijl. Topics discussed in this meeting included the 2013/14 financial statements, the updated group strategy and the sale of the business of Tuincentrum Overvecht, the latest developments concerning the Collective Agreement and the results of the Employee Engagement Survey.

ROLLOUT OF NEW FORMATS Retail formats Store openings based on the new formats

Blokker NL 6

Big Bazar XL 9

Xenos 31

Leen Bakker 5

Total 51

NET INVESTMENTS

x EUR mln. 2014/15 2013/14

New stores/formats 31.1 26.3

Other stores 13.4 11.7

Logistics and information systems 20.6 17.2

Other 1.4 1.1

Total 66.5 56.3

Amounts excl. Casa / TCO


Requests for advice were submitted to the Central Works Council in 2014 regarding the establishment of the online organisation for all the e-commerce activities of the operating companies, the introduction of new management positions for these omnichannel activities and for Group Control; the introduction of a performance-based evaluation system; and the relocation of the Blokker Holding head office from Laren to Amsterdam. The Central Works Council made carefully considered favourable recommendations in each of these cases. Furthermore, the Central Works Council was also asked to give its approval for the proposed required amendment of the supplementary pension insurance in connection with the amendments of the Dutch tax regulations effective 1 January 2015.

The second consultation meeting with the CEO was held in November 2014. During this meeting, the members of the Central Works Council were introduced to the CFO of Blokker Holding, Mr J.W. Visser, appointed effective 1 November 2014. The meeting attendees also again discussed the slow progress of the Gebra Collective Agreement negotiations.

The talks with the Central Works Council are always conducted in a positive and open atmosphere, based on mutual respect and trust. The Board of Directors greatly values the constructive attitude of the employee representatives within the group.

PERSONNEL CHANGES IN THE GROUP ORGANISATIONThere were several changes in the Board of Directors during the year under review. As reported in the annual report for the previous year under review, Mr A. Blokker retired from the Board of Directors on 1 April 2014, joining the Supervisory Board as of that same date. Meanwhile, Mr A.H.M. van der Horst retired from the Board of Directors on 1 June, while Mr J.W. Visser was appointed as a member of the Board of Directors and CFO effective 1 November.

The management of the retail formulas have also seen various changes and appointments during the year under review. The overview of the group organisation and the management of the operating companies is included on page 8 of the report.

OUTLOOKThe first signs of economic recovery should become evident during the 2015 financial year in the European countries in which the group operates. To date, however, we have only seen a tentative recovery of consumer confidence, which is also reflected in the sales at our retail formulas. The sale of garden furniture and garden accessories at our Leen Bakker and Blokker chains and outdoor toys at our toy chains had a late start this spring. Since retail organisations such as Blokker Holding tend to generate the bulk of their profits in the second half of the year, it is too early to make any statements regarding profits during the current financial year.

Investments in the current year will be similar to those in the year under review. A key priority at present is the optimisation of the e-commerce business of the formats operating web-shops, along with an expansion of our store base to include new formats at Blokker, Xenos, Big Bazar and Leen Bakker.

The number of employees (based on full-time employment) is expected to remain equal overall as a result of store closures in the Netherlands and new store openings in Germany.

The results of the Employee Engagement Survey conducted in 2014 form the basis for various promotions and monitoring by the management and executive management of the various operating companies.

We would finally like to extend our compliments to approximately 22,000 employees, the majority of whom are employed in the stores. They once again managed to satisfy millions of customers in the year under review. This is no small feat and we thank them for the way they committed themselves to our company during the year under review.

Amsterdam, 13 May 2015

Board of Directors R.E. Palmer, ChairmanL.M. de Kool, Deputy ChairmanJ.W. Visser, CFOT. Smit


aCCELERaTED TRaNSFOR- MaTION wITH NEw STRaTEGY

The Transformation Strategy 2017 – created in June 2014 – is based on four cornerstones: ‘Close to the customer’, ‘Contem-porary formats’, ‘Operational excellence’ and ‘Open and committed teams’. The purpose of the strategy is to start generating profitable growth again within three years in the Household, Toys and Living sectors and to become a leading sustainable omnichannel player in the Benelux market. In Germany we aim to further expand the retail and online activities in Household. In France, we are looking to strengthen our position in the toy market. Online revenues will comprise a significant portion of our total revenues. We aim to generate a total of EUR 300 million in online revenues by 2017.

CONTEMpORaRY FORMaTSCLOSE TO THE CuSTOMER

OpEN aND COMMITTED TEaMSOpERaTIONaL EXCELLENCE

Customers want to be able to do pre-purchase research and shop anywhere, anytime on a 24/7 basis. Our retail formats should seamlessly fit the model of the ‘customer journey’, both in the stores and online. We conduct in-depth research to find out how customers shop and what their needs and expectations are. This way, we both increase customer satisfaction and customers’ willingness to make purchases.

We will continue to inspire our customers both online and offline by continuously updating our retail formats. This requires that we clearly position these formats against each other. Distinctive and relevant retail brands are Blokker Holding’s strength.

Blokker Holding is working on developing up-to-date and efficient business processes. This enables us to further reduce costs and increase revenues from all our activities. Closer cooperation between the various operating companies improves synergy in e-commerce, logistics, supply chain, category management and IT. Information about our business processes is up-to-date, allowing us to manage our organisation in real-time and respond much more quickly to changes.

We strive to create open and committed teams with an ongoing dedication to providing top services to our customers. Our managers and employees are enterprising, innovative and focused on results. By investing in effec-tive evaluation systems and development opportunities, we support our employees and operating companies in their development.


B-point in the new Blokker stores. Ordering online right in the stores, giving individual stores their own ‘endless aisle’.

CLOSE TO THE CuSTOMER

Blokker Holding moved the process of updating and upgrading its organisation up a few notches in 2014, based on the new strategy. Its single objective is to meet customers’ needs where and when they want, with relevant and distinctive stores and products at reasonable prices, offering the highest level of service. Based on qualitative and quantitative research, our retail chains updated their formats in 2014 and improved their service levels. We are strengthening our relationships with the customer by monitoring customer sentiment on social media and through our customer service (both telephone and web care) alongside the traditional channels.

Blokker significantly expanded its customer service and web care team in the past year.

CONTEMpORaRY FORMaTS

Although it will take several years for our formats to be fully updated, these changes already began to be clearly visible in 2014. Based on extensive customer research and active brand development, our chains Blokker, Leen Bakker, Big Bazar and Xenos were off to a good start in upgrading their stores. This ensures that the retail formats will do an even better job of meeting the demands of today’s customers in the future.

Both Blokker and Leen Bakker have backed their new formats with a TV advertising campaign. Leen Bakker launched a major TV campaign at the end of 2014, while on 9 May 2015 Blokker premiered an all-new TV campaign using the payoff Fijn dat we er zijn (It’s good that we’re here).

Leen Bakker and Blokker teamed up in 2014 to provide Dutch consumers – starting in the first few weeks of good weather in spring 2015 – with an appealing and modern range of garden furniture and accessories, an all-new white-label brand marketed under the name ‘Le Sud’. The TV adverts for this new brand aired on Dutch television in April 2015.

The number of online kiosks at Bart Smit will be further increased in 2015, along with those at fellow chains Intertoys, Blokker and Leen Bakker.

SERVING OUR CUSTOMERS AT ALL TIMESNew systems are improving the efficiency of customer contact. Orders placed in one of our webshops are available in the store the following day or delivered to the customer’s home. By making our online product range available to customers in stores, we create an ‘endless aisle’. Customers can order products which are not – or no longer – in stock at the moment and have them delivered right to their home the next day. The great advantage of this method is that our sales staff never again have to give no for an answer. We use customer counters and purchase data recorded at cash registers to provide us with information about conversion rates and peak times, so that our colleagues can focus even more on the customer’s needs.

NEW FORMATS: CHANGES ARE NOT JUST COSMETICThe updated formats involve decidedly more than a ‘changed layout and a few dabs of paint’, as certain cynical retail experts have been known to claim. In fact, we have worked to truly improve the customer experience by offering greater convenience and service, faster availability of products, efficient


delivery and by combining the services of the physical and online stores. New white-label brands and product ranges play a key role in the new formats.

Partnerships with manufacturers of premium brands remain a priority for the majority of our retail formulas, as exemplified by the unique alliance between Douwe Egberts and Blokker launched in September.

CUSTOMER SATISFACTION LEADS TO HIGHER SALES REVENUESCustomer feedback on our new retail formats has been positive and their high degree of satisfaction is evident from the increased sales in those stores which have since been remodelled based on the new formats.

With all that being said, we still have some way to go, as this is only the beginning. Retailers truly need to deliver on their promises in this omnichannel world, which involves delivering when and where the customer wants it, fast, easy and as

Leen Bakker’s UMIX collection: launched in 2014, this unique contemporary line of furniture is already one of the home furnishings retailer’s bestsellers.

OpERaTIONaL EXCELLENCE

USING SYNERGY, JOINING FORCES AND REDUCING COSTSOmnichannel retail at the highest level is an increasingly challenging feat to pull off for modern retailers and the organisation behind the stores. This brings us to the next cornerstone of our strategy: operational excellence. Our group’s strength is the ability to join forces, which is why our retail formats are strengthening their cooperation behind the scenes. A good example of such efficient cooperation is our Shared Service Centers (SSC). Our Quality SSC, for example, monitors the quality and safety of our product ranges.

OCTOBER 2014: ESTABLISHMENT OF NEXTAIL The SSC Omnichannel Nextail, launched in October 2014, is the online organisation for all Blokker Holding retail formats. A large number of new employees and colleagues from the operating companies have since joined the Nextail team in Amsterdam. We have made major strides in omnichannel retail

and our online revenue increased steadily to EUR 98 million in 2014. All our webshops are currently managed by Nextail.

CONSTRUCTIVE RELATIONSHIP WITH LESSORS‘Operational excellence’ also means that, being the enterprising retailers we are, we close loss-making stores and open new branches whenever we spot an opportunity. An essential part of this is building constructive relationships with our lessors. The world has changed in the past five years and the percentage of vacant retail properties in the Netherlands increased for the seventh consecutive year in 2014. Whereas the vacancy rate remained below 6% up to 2010, this rate has since risen to nearly 9%. With 570 stores for every 100,000 inhabitants, the Netherlands has one of the highest levels of store density in Europe; this is part of the reason that 20% of new stores are not yet leased on completion. The situation in the home furnishings market also does not bode well: the 135 home furnishing centres in the Netherlands could easily serve a population of 51 million. Estimates have shown that there is room in the country for only 30 to 40 concentrations of home furnishing centres.

It is important that both lessors and lessees stay on top of these changes and continue to work together where possible. We ask that our lessors adopt a flexible attitude and show understanding for the changing situation in the market. Fortunately, our cooperation is improving in this respect. MAKING CHOICES WITHIN THE PORTFOLIOWe believe that ‘Operational excellence’ also involves making choices – choices in our portfolio of retail formats which are consistent with our strategy, knowhow and aspirations. One of the decisions we made in 2014 was selling the Tuincentrum

In October 2014 e-commerce and online talents employed at our operating companies, along with new team members, moved into the offices of Nextail, the online organisation for Blokker Holding retail formats.

cost-effectively as possible. This requires strong back-office operations, as well as helpful customer service representatives and a highly service-oriented web care team that fields queries from customers and handles complaints efficiently.


Overvecht chain of garden centres, as a result of which ‘Garden & Pets’ is no longer part of our core business.

CRUX IN RETAIL: BRINGING COSTS AND REVENUE IN LINE Another key aspect of Operational excellence is aligning revenue and costs with each other. This is both a challenge and a necessity, particularly for traditional retailers operating physical stores. In 2014, for example, we implemented carefully prepared measures for the reorganisation announced by Blokker Netherlands on 9 February 2015.

Research conducted in 2014 focused on adapting the staffing at Blokker stores to the changing shopping habits and bringing personnel costs more in line with the lower sales revenues. This has resulted in a change in our staffing at half of our company-owned stores. This reorganisation coincided with Blokker’s announcement, on 9 February 2015, of a substantial investment in the rollout of the new format presented in e-commerce and logistics in 2014.

E-FULFILMENT: DELIVERING ON THE PROMISELogistics and IT are key links in creating affordable and profitable product ranges and reliable delivery to our

customers. Now and in the future, fulfilment will determine whether we will be able to deliver on our promises of fast and accurate delivery at the lowest costs. That is why we decided to invest in new distribution centres in 2014. A new distribution centre was completed for Xenos in Waalwijk in order to accommodate the growth of the chain’s online business and its expansion in Germany. Blokker implemented a new warehouse management system in 2014.

OpEN aND COMMITTED TEaMS

OPEN AND COMMITTED TEAMS: RETAIL REMAINS A PEOPLE BUSINESSWe feel it is important for our employees to be able to continue to develop and believe that management skills, leadership development, customer focus and product knowhow are all qualities which are key to a good performance. Training and education are a shared responsibility of the employer and its employees. In the coming years we will increase the number of internal training programmes focused on developing these skills.

The group is always on the lookout for talented young employees. The key is to attract well-qualified people and further grooming and developing them for a career within the company. Blokker has been doing just that with its range of training courses, its practical training course for young professionals Beroeps Begeleid Leren being a prime example of a course that has been successfully completed by many employees to date.

The organisation conducts regular talent management reviews as part of its strategic personnel planning. Its objectives are to appoint the right people to the right positions, keeping people motivated, ensuring that they maintain their skill set up to date and keeping an eye out for new talent. This truly offers employees an opportunity to make a difference at a retail group in transition.

EMPLOYEES MORE IMPORTANT THAN EVERAt these times of change, our people are more crucial than ever to our continued success. Change does not happen overnight: it requires that we all pull our weight together. We conducted

an Employee Engagement Survey in 2014 as a basis for further improving employee engagement and satisfaction.

SUSTAINABLE RETAIL GROUPThe fact that no new Collective Agreements and therefore no attendant salary changes have been forthcoming has been a cause for concern for many of our employees. We therefore introduced a unilateral salary increase of 1.5% in early 2015 for employees covered by the Collective Agreements in the Netherlands. The retail world is undergoing rapid change and we operate in a dynamic sector in which change is the only constant. This presents a challenge for our organisation and can be difficult to manage at times. However, the first steps have now been taken and together we are working on building a sustainable retail group whose top priorities are innovation, enterprise and a focus on service.

The new Xenos distribution centre in Waalwijk was completed in 2014. Op-timising our logistics operations is one of the priorities of our omnichannel strategy.

Opening of the new Blokker store in Hoofddorp on 19 February 2015. Our employees form the basis of the services we provide to our customers.


NEXTaIL

FORMaTBlokker Holding established a new Shared Service Center (SSC) in 2014 under the name Nextail. Nextail accommodates the e-commerce and omnichannel activities of Blokker Holding, with the objective of increasing these activities at a faster pace for, and together with, our formats. Nextail is located in Amsterdam in a modern building and offers its employees a transparent, inspiring and enjoyable work environment.

Consumer behaviour has changed fundamentally in recent years, mainly as a result of the emergence of online sales channels. Customers determine where, when and how they make their purchases and expect to receive excellent service in the process. Meanwhile, the exponential growth of the mobile services market has also had a radical impact on how consumers prepare for purchases. In 2014, one-third (36%) of all customers accessed our webshops using a mobile device. Google refers to this as the ‘zero moment of truth’, meaning you need to be visible as soon as customers appear online.

CLOSE TO THE CUSTOMER While online pre-purchase research and sales continue to grow substantially, around 90% of all non-food retail sales continue to be made in physical, brick-and-mortar stores. The majority of consumers do not fall neatly into the category of either ‘strictly online’ customers or traditional shoppers. Customers may choose to shop online one day and be in the mood to visit a store the next, driven by factors such as the convenience of ordering items from the comfort of their home or the option of actually seeing the physical product before they purchase it. Another growing trend we are seeing is that consumers like to shop at online retailers which also operate physical stores. This is both because of the trust they place in these retailers, which tend to be well established, and because they have the option to collect their orders and return them with minimal inconvenience. An additional advantage is that they know they will receive a high level of service. At Blokker Holding, we therefore firmly believe that this omnichannel customer behaviour will only continue to grow in the future. FIVE OMNICHaNNEL pILLaRS Our mission is to use a customer-centric approach to provide consumers with the option to purchase products when they want, how they want and where they want through seamless and personalised service across all channels. We have developed this into five omnichannel pillars.

Nextail:1. offers a value-for-money proposition with a competitive

product range in our core product lines and a fast-growing range in the High Online Destination (HOD) categories

2. uses qualitative content and ‘rich media’ to be able to provide high-quality information to customers

3. facilitates a consistent integration of channels and a seamless experience across all channels, maintaining a single, consistent customer profile throughout

4. provides customer-focused, efficient and cross-channel customer service

5. knows our customers and communicates our omnichannel proposition in a cost-effective way across all channels

ONLINE GROwTHThe group’s online sales revenues increased by 24%: from EUR 79 million to EUR 98 million, at a profit. The number of visitors has also grown markedly: from 95 million in 2013 to 107 million in 2014. This is to be credited mostly to the expansion of our online marketing activities. Examples of this include the automated use of media through application programming interface (API) using Google and the expansion of product feeds to aggregator sites and affiliates.

The number of orders placed has also increased sharply: from 1.3 million to 1.7 million following the expansion of the online product range, improved conversion rates and increased online marketing efforts. The number of visitors and fans and the amount of feedback on social media has also increased across the board. The number of Facebook fans increased by more than 140%, with Intertoys showing the most spectacular growth at 400%.

OPERATIONAL EXCELLENCEWe improved our IT infrastructure and logistics options in the past year and will continue to do so in the years to come. We converted several webshops to the new web platform in 2014 and have been working hard on developing webshops for Blokker Belgium and Xenos The Netherlands, which went live in February and March 2015, respectively. We also further developed our omnichannel proposition in the new retail format of Blokker with an improved click & collect service, Wi-Fi and the availability of in-store technologies such as digital product information screens, kiosks and tablets. The Bart Smit and Leen Bakker stores began making their online product ranges available, both to ensure the most comprehensive possible range and to be able to provide more

EMpLOYEES

65HEaD OFFICE

aMSTERDaM


product information to our customers. We refer to this as the ‘endless aisle’, i.e. the extension online of the product ranges available in our physical stores. This enables us to provide the most extensive possible product range in both our online and offline channels.

OUTLOOK AND ACTIVITIES FOR 2015 We developed a three-year strategy and a roadmap with the objective of making Blokker Holding the leading omnichannel non-food retailer in the Benelux market. The implementation of this strategy will continue in 2015. As part of this strategy, we focus on the following areas:

• Further improvement and alignment of the IT landscape• Expansion of the long-tail product range online• Rollout of kiosks across all formats• Optimisation of click & collect• Increase in the number of delivery options• Launch of mobile websites• Improved usability and conversion rates• Enriching content

FACTS AND FIGURES 2013 2014

Revenue EUR 79 mln EUR 98 mln

Number of visitors 95 mln 107 mln

Orders 1.3 mln 1.7 mln

Facebook fans 192,000 463,000

The omnichannel-vision of Blokker Holding.


A customer’s journey on a website should be as smooth as possible

Teun Jaspers, 31, was working as a Content Improvement Manager at online retailer bol.com when he was asked to join Nextail. It did not take him long to make up his mind. Since November 2014 he is Nextail’s Content & Publishing Manager, supervising three teams of 16 enthusiastic employees. His hobbies include photography – preferably taking pictures on the street – and travelling whenever he gets a chance: he and his girlfriend will soon be heading off to Asia.

Start-up protected by a sound holding companyTeun: ‘I’ve always been fascinated by content; I’m intrigued by how you can entice people using just copy and nothing else. As a Nextail employee, I get to work with some of the most talented web specialists around – there’s certainly a lot of knowhow here. Since Nextail is an all-new business unit, it has something of a ‘start-up’ feel to it, the difference being that we are actually part of a large and well-run holding company. That was certainly one of the reasons I ended up accepting the offer.’

Unexplored territory and roadmapsThe advantage of starting a new business unit from the ground up is that you are venturing into new territory. ‘If you start out the way we did, the only way is up. You see results very quickly. During my first few weeks on the job, I began expanding the size of the teams, figuring out the operating processes and ensuring that everything ran smoothly. That involved brainstorming, getting to know all the systems and making the right choices. We incorporated the results into a content plan, which we used as a basis for designing a roadmap for 2015. We migrated all the websites to the new, central platform and are currently looking at automating the content-entry process. You can use the labour you save through these processes to optimise the content.’

Full focus on omnichannel retailing‘Our current focus is on coordinating online strategies, expanding the online product range, enriching the existing content and continuing to develop our websites. We want to learn from our customers and are constantly improving the sites based on customer feedback. A customer’s journey on a website should be as smooth as possible. Whenever we see any hiccups somewhere, we check to see what should be changed. This is one of the ways we improve customer conversion rates. Of course, the website is only part of it – there are a lot more services available, such as the in-store kiosks. We can make massive progress by doing an even better job integrating the online and offline experience.’

FutureNextail will therefore get cracking in 2015 to further improve the webshops. ‘We are very methodical in analysing specific product categories. Take garden furniture for example: you need to ask what do consumers want now, what information do they need and is this information clear enough? What filters do they use when searching online and do they have a need for video? And then there’s omnichannel: how fantastic would it be if consumers could simply check their phone to see how many units of an item are still in stock at the nearest store, or to offer customers dynamic price tags showing the current price? We could also display in-store customer reviews for all products. There are so many ways in which we could improve in the future – this job remains a fascinating challenge every step of the way.’

INTERVIEW WITH TEUN JASPERS

HOuSEHOLD

NET REVENuE (X EuR 1,000)

1,083,020(2013/14: 1,115,315)

Blokker Holding has been operating in the household retail market since 1896. Initially only through our Blokker format, but later also, for many years, with the retail formats Xenos, Marskramer, Big Bazar, Budg€t, Cook&Co and the wholesalers Elektroblok and Trend Center. Blokker operates stores throughout the Benelux market, while Big Bazar has stores across the Netherlands and Belgium and Xenos also operates in the German market. This format, which has grown from 12 to 62 stores, is becoming increasingly familiar to German high-street customers.

The market slightly recovered in 2014 in the countries surrounding the Netherlands, particularly Germany. Although the economic tide has shifted somewhat, 2014 turned out to be another challenging year. With consumer spending continuing to trail off in the non-food sector, total retail sales revenues in the household sector fell by an average of 3.2% last year (source: Statistics Netherlands/CBS). The household market and the large number of retailers operating within it are struggling, including the various Blokker formats.

Current trends in the household retail market include a shift to online sales and an increase in the number of discount chains. With an average growth of 34% in sales in its webshops in the Household sector and the ongoing expansion of Big Bazar in the Netherlands, Blokker Holding finds itself right in the middle of these developments.

HIGHLIGHTS 2014• Spring: first pilot store of the updated Big Bazar chain opened in Amsterdam’s

Kalverstraat high street. During the year under review, the discount chain also opened nine XL stores based on the new format.

• Autumn: six pilot stores based on the new Blokker format opened their doors and partnerships were launched with 24Kitchen and Douwe Egberts.

• Autumn: independent research company Service Scout conducted a survey among several major Dutch online retailers in December, the busiest time of the year. Cook&Co won the title of ‘Best Webshop’.


14,405(2013/14: 14,087)


1,467(2013/14: 1,477)

NuMBER OF STORES-HOuSEHOLD

BLOKKER

813

XENOS

252

MaRSKRaMER

206

NOVY

25

BIG BaZaR

131

BuDG€T

13COOK&CO

27

22


BLOKKER

FORMaTAs the leading retailer in the Netherlands specialising in household supplies and home accessories, Blokker is a quintessentially Dutch retail chain offering items ‘for the whole house, every day’. The store always has an up-to-date supply of items in the Household, Cookware and Dining categories, alongside a wide range of garden supplies, multimedia items and toys.

This was a financially difficult year for Blokker on account of the ongoing economic crisis and consistently low consumer confidence. At the same time, 2014 was also a key year of transition for the retailer, which took important steps to improve its sales revenues and safeguard future growth by launching an all-new Blokker format. A total of six new-style Blokker stores have been opened since August 2014. These stores immediately showed a strong growth in sales revenues and higher rates of customer satisfaction. In addition to this investment in the formats – and, by extension, in revenue growth – the company took measures to further reduce costs related to accommodation, logistics and personnel. Wage costs already fell slightly in 2014, with the largest savings expected for 2015 and 2016. Online sales increased once again in 2014, by 42%.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSBlokker presented the new format in August, in the first pilot store on Amsterdam’s Jodenbreestraat. Several weeks later, five new pilot stores were opened in Eindhoven, Alkmaar, Nijmegen, Alphen aan den Rijn and Amsterdam’s Maasstraat. The new format is based in part on extensive consumer research and various tests conducted at Blokker stores around the country. The format is adapted to suit the shifting composition and habits of today’s Dutch families.

The products are divided into eight ‘worlds’, making it easy for consumers to navigate the store and find the product they are looking for within no time at all. These worlds include:

• Cleaning & Household• Washing & Ironing• Cooking & Baking• Eating & Dining• Storing & Organising• Living & Home Decoration• Play & Surprise• Seasonal/Current The stores have become easier to navigate thanks to lower shelves, bright lighting and inspiring in-store

communications. Staffs in the pilot stores have also received intensive product and service training.

B-pOINTBlokker has introduced an innovative service point in its pilot stores, known as ‘B-point’. Customers can use the in store B-point to order items online and have them delivered to their home. The sales staffs also operate their own tablets, which they can use to quickly find relevant and additional product information for customers.

NEw pRODuCT RaNGES aND paRTNERSHIpSA key element of the new format is the introduction of a select range of 24Kitchen items. Blokker teamed up with the chefs of 24Kitchen, the largest food platform in the Netherlands. Together they created a range of cooking items and accessories. Under the name ‘Rudolph’s Bakery’, 24Kitchen chef Rudolph van Veen and Blokker jointly created a range of baking supplies to make baking even more fun, easier and tastier. The 24Kitchen range is currently available at all Blokker and Cook&Co stores nationwide. The new product ranges from the pilot stores have also been available in the other Blokker stores since the end of 2014, along with an all-new range of household tools marketed under the name Vitility and an extensive range of kitchen towels.

24Kitchen’s Rudolph van Veen signing one of his cookbooks at the opening of a new Blokker store.

EMpLOYEES

7,187COuNTRY

THE NETHERLaNDSCOMpaNY-OwNED STORES

495FRaNCHISE STORES

102wEBSHOp

BLOKKER.NL


paRTNERSHIpS wITH pREMIuM BRaNDSPartnerships with manufacturers of premium brands remain a key focus of the Blokker format. A good recent example is the partnership with coffee manufacturer Douwe Egberts. In September, Blokker and Douwe Egberts signed a partnership agreement under which Blokker takes over the management of the reward programme and the sale of the popular range of Douwe Egberts gift items. The six pilot stores were the first to start selling this range in 2014. The range will also become available on the shelves of around 300 other Blokker stores in the course of 2015. Consumers will then also be able to redeem their Douwe Egberts reward points in these stores.

EXpaNDED CuSTOMER SERVICEBlokker expanded its customer service department and web care team to approximately 30 employees during the year under review, thereby further improving its services both online and offline. OPERATIONAL EXCELLENCE WITH OPEN AND COMMITTED TEAMSDuring 2014, Blokker switched over to a new warehouse management system at its Geldermalsen distribution centre. Although the introduction was initially costly and time-consuming, Blokker now has access to real-time information on the flow of goods and stocks. This makes it possible for the company to further reduce its stock expenses. Blokker eliminated

its manual ordering system during 2014; automatic re-ordering was introduced through an ordering advice system at the stores. Orders at the stores are based on sales; this way, a lower limit is set automatically for the stocks. Blokker is now better able to manage the availability of items and stocks. In order to facilitate automatic re-orders, a space matrix has been created for all stores and special shelf plans have been prepared. This links purchasing and sales directly together at a central level.

Blokker conducted an Employee Engagement Survey in the year under review. The results of the survey were discussed with the various departments, based on which a number of improvements were implemented. For one, internal communications were improved and special cafeteria sessions were held at the head office at regular intervals, in which the management explains the current status and progress of the various ongoing projects.

The renovation of Blokker’s Amsterdam head office began at the end of 2014, which has resulted in a fresher, more open and contemporary work environment.

OUTLOOK AND ACTIVITIES FOR 2015During the year under review, Blokker researched the most efficient staffing arrangements for its stores in order to bring wage costs more in line with trends in revenue growth and to adapt the services more to store traffic. This is in preparation for the measures announced in February 2015, involving substantial investments and operational efforts of approximately EUR 25 million for e-commerce, IT, logistics and the roll-out of the new retail format in several dozen new stores.

The company also decided to adapt the staffing in half of the 500 company-owned stores. This has resulted in the redundancy of approximately 400 employees. An agreement has since been reached with the trade unions regarding the Redundancy Plan and the reorganisation is currently underway. Blokker is working on making the working hours more flexible. The retailer expects that the measures implemented in 2014 will help generate stronger returns in 2015.

At the time of publication of this annual report, Blokker launched its new Fijn dat we er zijn! (It’s good that we’re here) advertising campaign.

New interior of the store on Amsterdam’s Jodenbreestraat.

Article about the partnership between Blokker and Douwe Egberts in DE’s corporate magazine Blends.

25

B-point: Gone today, back tomorrow

INTERVIEW WITH TATJANA BROCKHOFF

Tatjana Brockhoff was just shy of her eighteenth birthday when she joined Blokker as a sales assistant. Having worked at the Toolenburg store in Hoofddorp for nine years, she transferred to the eighth, brand-new pilot store at the Vier Meren shopping centre in Hoofddorp in February 2014. Tatjana, 28, lives in the town of Nieuw-Vennep and trains horses for a commercial business on Sundays. In her spare time she likes to be out and about with her young son, Stefano.

B-point: never turn away a customer againTatjana’s uniform has the line ‘Questions about our website? I’m happy to assist you!’ printed on the back and around her waist she wears a pouch holding a tablet computer. The launch of the new retail format has changed many things on the shop floor. Products which are no longer included in the product range or no longer in stock at the store can be ordered with a push of a button and are delivered the next day.

Tatjana: ‘The majority of customers love having access to the B-point service – they rave about how convenient they find it. Orders can usually be delivered the next day and customers can choose whether they want them delivered to their home or collect them from the store. People are always very happy to hear that their product will arrive the next day. We used to have to tell customers: “With any luck it will arrive tomorrow,” but now we can simply say: “We’ll get it in tomorrow.” No longer having to disappoint customers by telling them that a product is unavailable is fantastic.’

From store-focused to customer-focusedServing customers online while they themselves are offline requires a whole new approach: ‘Our entire team attended a four-day training course at the head office. We learned to work on a more customer-focused basis. How do you approach customers and keep the conversation going, for example, or what can you do to really assist a customer? Before the new format was introduced, customers would pass us by as we were stacking shelves. In the new set-up, we simply restock the shelves after closing, so that we can devote all our attention to the customers during opening hours. That means we are much more focused now on assisting and approaching customers. It really makes a huge difference.’

Uncluttered and well-organisedAlthough it has taken some time for both employees and customers to get accustomed to the new format, they all share a sense of excitement. ‘When people first walk into the store, they’ll tell me that they had to look twice to make sure they were really in the right place, because everything looks so neat, uncluttered and well-organised! We really had to help customers get their bearings in the beginning – people didn’t know that there was a B-point. But they’re finding it easier all the time. Most customers are aware of the B-point now and try using the tablet themselves at the service desk. Unfortunately, customers who are not yet aware of the B-point have a harder time finding the tablet. Of course, this is as much a learning process for us as it is for them, so I hope we can create something in the store to make it clear to them that there is a B-point in the store. I’m confident that we will succeed.’

The new-style Blokker stores are more spacious, have more atmos-phere, are more on-trend and provide a much more extensive product range. In addition, customers can order any item from the product range they like directly inside the store from the B-point. This is a service point where customers can order a product directly online and browse electronic versions of all leaflets. Store employees also carry a tablet, which enables them to provide their customers with the most up-to-date product information at any time.

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BLOKKER OuTSIDE THE NETHERLaNDS

FORMaTBlokker also operates a large number of stores in Belgium and Luxembourg. With no franchises and company-owned stores only, Blokker is a leading retailer in these markets, offering a wide selection of household supplies, toys and garden furniture. Blokker has one franchisee in Suriname, who operates a total of three stores.

Numerous Belgian retailers are struggling because consumers continued to keep their purse strings tight in 2014. Blokker has, unfortunately, also found itself in this position and saw its total retail sales in the international market fall slightly in 2014.

In the Belgian and Luxembourg markets, the main focus was on reducing costs and on activities designed to increase sales revenues. All stores aimed to optimise their staffing and reduce their stocks.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSBlokker Belgium further upgraded its store layouts in 2014. As part of these changes, it divided the product range into different ‘worlds’. The result is a well-organised store that is easier for customers to navigate. The FIFA World Cup generated substantial additional revenues in the months of May and June, with the Panini football cards being particularly successful. The key to success was strong merchandising and the strong performance in the tournament of the Belgian national team, the ‘Red Devils’.

changed over to a new warehouse management system. Ahead of the automated reordering system to be implemented in 2016, all Belgian stores have been equipped with Wi-Fi. Sales assistants have received new ordering scanners and the installation of shelf plans is underway, which will have been rolled out at all stores by the third quarter of 2015.

FuRTHER pROFESSIONaLISaTIONThe Belgian stores have also seen a change in the store culture and the further professionalisation of their operations. Sales information is more up-to-date and more easily accessible to the sales teams. A horizontal organisational structure and direct lines of communication give the organisation greater control over its operations. An Employee Engagement Survey is scheduled to be conducted at Blokker Belgium in 2016.

ACTIVITIES AND OUTLOOK FOR 2015Although the Belgian economy is expected to improve slightly in 2015, consumers remain very price-conscious and for this reason Blokker Belgium is expecting the upcoming year to be challenging. While the FIFA World Cup generated a large amount in additional sales revenues in 2014, other sales promotions have yet to prove their success this year. Examples of these activities include promotions organised in conjunction with Zalando, Studio 100 and women’s magazine Libelle, and merchandising tie-ins with two of the most popular Flemish soap operas, Thuis and De Kampioenen. Blokker Belgium is hoping to maintain stock sales and sales revenues and reduce its stocks on the strength of these promotions. In fact, this is the company’s number-one priority this year. EXpaNSION OF THE wEBSHOpBlokker Belgium is set to significantly expand the range of items available in its webshops in 2015. In addition, the retailer is also preparing for the 2016 launch of stores based on the new Blokker format currently being introduced at stores across the Netherlands.

Football stand of the Belgian national team in a Blokker store.

Blokker Belgium and Nextail worked together during the year under review to set up the blokker.be webshop. The webshop for Blokker customers in Belgium went live on 2 February 2015, just after the end of the 2014 financial year.

OPERATIONAL EXCELLENCE WITH OPEN AND COMMITTED TEAMSBlokker Belgium upgraded its operating processes in a number of ways in 2014. Along with Blokker Netherlands, Belgium

Blokker Belgium has made preparations in 2014 for the launch of blokker.be. The webshop is launched on 2 February 2015.

(SINCE FEBRuaRY 2015)

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XENOS

FORMaTXenos is a retail chain with stores in the Netherlands and Germany specialising in the sale of home, household and gift items. The product range includes international products, as well as home decoration accessories and practical household items.

Sales at the Dutch stores fell slightly during the year under review. The situation is rather different in the German market, where sales increased by 20% and a total of 12 new stores were opened. In the year under review, the retailer invested in upgrading the look and feel of the Xenos format. At the same time, the company also made preparations for the launch of the xenos.nl webshop, which went live on 30 March 2015. The upgraded and expanded distribution centre in Waalwijk is also completed in 2014.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSXenos specialises in the sale of original, international and special food and non-food items with a cheerful and positive style and at competitive prices. The chain began converting 20 stores in 2014 in order to achieve a more contemporary look and design. The unique, cosmopolitan atmosphere of Xenos has been further implemented in the stores and promotional leaflets. This will inspire customers more and provide them a unique experience, while the focus is kept firmly on attractive

Xenos offers. Popular items from the Xenos range of products in the Netherlands include Christmas decoration products and accessories and gift items.

Xenos store in Stuttgart, Germany.

The popular Paul Frank promotion also generated plenty of buzz on social media.

(SINCE MaRCH 2015)

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A reward programme was launched in 2014 related to the popular Paul Frank line of products, where customers could redeem points to win ‘danglers’ in different colours. In addition, a photo competition was held on social media featuring selfies made by customers based on the Paul Frank theme. This competition introduced the Xenos product range to younger consumers in a completely contemporary way.


GROwTH IN GERMaNYXenos focused on further growth in Germany, where it opened a total of 12 new stores. The market for home decoration and accessories and gift items is not as developed in this market, which is adding to Xenos’ popularity as a highly original and unique format. The marketing and sales activities of Xenos Germany are, by and large, the same as those in the Netherlands.

OPERATIONAL EXCELLENCEIn order to further improve delivery and service to consumers and achieve revenue growth this year, the distribution centre in Waalwijk was upgraded and expanded. For example, a second

high-bay stocking system was constructed and a new dynamic order picking system was introduced. Xenos expects the new distribution centre to become fully operational in the summer of 2015. In addition, the existing distri bution centre currently has a dedicated department for the delivery of online orders. This department became operational in early 2015. The substantial investments in the distribu-tion centre made in 2014 are

needed in order to accommodate the German growth. The German Xenos stores are stocked from the Waalwijk distribution centre.

OPEN AND COMMITTED TEAMSRecent shifts in retail require that all Xenos employees make the necessary changes: different procedures, further

professionalisation and a more service-oriented customer approach. Xenos values its internal training courses: all retail employees take several or all modules of the Basis Opleiding Xenos (BOX) basic training course after starting employment, which is offered online. In order to further improve the quality of the organisation, a group-wide evaluation system was launched at Xenos. The retailer also conducted an Employee Engagement Survey in 2014.

OUTLOOK AND ACTIVITIES 2015Xenos’ priorities in the Netherlands are improving retail sales and bringing the product range more in line with the new Xenos format. Xenos expects the new format to boost sales in 2015. The webshop xenos.nl, launched in conjunction with Nextail in March 2015, will also contribute to boosting sales. Xenos also anticipates further expansion and sales growth in Germany.

New distribution centre in Waalwijk.

In 2014, Xenos prepared for the launch of its xenos.nl webshop, which went live on 30 March 2015.

Leaflets designed in the all-new Xenos style: original, cosmopolitan and competitively priced.


Since joining Blokker Holding in 1998 and after holding positions as Logistics Manager, Sales Manager, Deputy Sales Director at Xenos and Managing Director of Xenos and Cook&Co, Hugo de Bie will start focusing completely on the expansion of Xenos in the German market in July 2015, when he takes over as Managing Director for Germany. Hugo, who is 47, lives in Volkel with his wife and six children. In his spare time he likes to go running and go out for dinner with his family.

Receive the goods instead of collecting themIn the brand-new part of the distribution centre, cranes are driving around in narrow paths between scaffolds the height of small tower blocks. And yet the hall, which is several dozen metres high, is seam-lessly connected with two other sections of the distribution centre.

Hugo: ‘In early 2014, we began using the high-bay unit for the storage of goods. We are currently working on our dynamic order-picking system. This involves removing goods from the shelves and delivering them to the employee. The process always worked the other way around, but this new system has significantly reduced the likelihood of error and allows us to work much more efficiently. It is quite a challenge to link the warehouse management system – which manages the logistics operations of the entire distribution centre – to the software installed in the high-bay cranes and the automatic order-picking system. We expect to implement this new order-picking system in the course of 2015.’

Webshops: the market dictatesThe online orders are also sent from the Waalwijk distribution centre to the customer. The top floor of the shipping warehouse accommodates a separate floor where all online orders are prepared for shipment. Order picking is done manually in this department. A spiral conveyor, a metal slider also known as the wokkel (named after a spiral-shaped Dutch savoury treat) is used to transport orders from the online-store floor to the ground floor, where the boxes are prepared for shipment.

‘We are currently checking out how we can expand the product range for the webshops. Since the entire logistics system – including offline and online – is all under one roof, we aim for a cut-off time for our online orders (the latest time consumers can order items for next-day delivery – Ed.) of 10:00 p.m. That is what the market dictates. We have already achieved this for Cook&Co and will do the same for Xenos by the end of 2015.’

Expansion in GermanyThe main reason for the expansion of the distribution centre is to accommodate the rapid growth of Xenos in Germany. The chain expanded the number of stores with 12 to 62 in 2014. Xenos continues to see potential for growth in the densely populated country. ‘From a logistics perspective, Waalwijk is the perfect location for stocking both the Dutch and German stores. Towns such as Dokkum and Den Helder are equidistant to Waalwijk as Dortmund and Cologne. So, essentially, that part of Germany is just as close as the farthest Dutch stores. This makes a single central storage area the best logistics solution.’ He continues, smiling and pointing to a large piece of grassland next to the building: ‘And if we manage to grow even further in Germany, at least we’ll have space to add another section.’

The distribution centre in Waalwijk accommodates the warehouse for Xenos and Cook&Co. This logistics centre serves the whole of the Netherlands and part of Germany. Due to the expansion, especially in Germany, the distribution centre is recently extended with a 35-metre-high hall, used for the bulk storage of goods. These goods will be shipped to other locations in the course of 2015 using an ingenious order-picking system. At the time of writing, this order-picking system is still being assembled and tested.

INTERVIEW WITH HUGO DE BIE

New and improved distri-bution centre in waalwijk: we can always add another section if needed


BIG BaZaR

FORMaTBig Bazar is a discount chain offering customers competitive prices in an original and inspiring retail environment. Big Bazar provides a very wide and fast-changing product range which is divided into 12 worlds: Contemporary & Surprising, Home & Decoration, Clothing & Textiles, Children & Games, Hobbies & Parties, Home Improvement & En Route, Pets Care, Clean & Convenient, Dining & Cooking, Food & Drink, Beauty & Personal Care and Cash Register & Multimedia. Big Bazar also sells premium brands at very low prices.

Big Bazar stores are mostly located in high-traffic locations in city centres, as well as in district shopping centres and in exurban areas and urban outskirts. Big Bazar remains one of the fastest-growing retail chains in the Netherlands. The sharp growth in the number of stores has also generated higher sales revenues in the Netherlands and Belgium.

Big Bazar has taken a number of important strategic steps in 2014. This includes the development of a completely new retail format and logo and a substantial expansion of the product range. A number of XL stores have been opened with floor space of between 600 and 1,000 square metres, while some stores which had become too small have been relocated, expanded or closed down. CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATS

A new retail format was developed in 2014 for the successful XL format. A completely new store layout was introduced selling the 12 ‘worlds’, appealing branding featuring shades of orange and magenta, and a new Big Bazar logo. The purpose of the new format is to maintain the discount format, based on an always changing product range and a unique retail experience.

Following a substantial expansion of the product range at the end of 2014, the average Big Bazar store currently carries 5,000 items.

XL STORES aND BIG SIMpLEThe first new store – or at least a smaller version of it –opened on Amsterdam’s Kalverstraat in April 2014 to much public interest and media exposure. The first-ever XL store opened its doors in the Maxis retail park in Muiden in July 2014. Shortly afterwards, additional XL stores opened in Alkmaar, Venlo and The Hague. At the end of 2014, existing XL stores in The Hague, Rotterdam and Roermond were converted based on the new format. Since then, Big Bazar has converted a total of 10 stores based on this format, to be followed by an additional number of store openings in 2015. A new Big Bazar XL opened its doors in

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Big Bazar, Maxis Muiden Retail Park.

Big Bazar, Maxis Muiden Retail Park.


Budg€t store in Purmerend.

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13FORMaTBudg€t is a pop-up discount format which provides a range of mainly household and various branded items based on the Big Bazar range.

In 2012 the Big Bazar management launched the Budg€t chain, which serves as Blokker Group’s pop-up format. However, Blokker Holding’s focus is currently on further expanding Big Bazar. The number of Budg€t stores were therefore reduced by 12 stores to 13 stores during the year under review.

Hoofddorp in February 2015, in addition to a store based on the new Blokker format.

At the end of 2014, Big Bazar tested for six smaller Big Bazar for-mats whether the new-style format would appeal to consumers. The layout and several elements of the new format were copied. This design, known as the ‘Big Simple’ project, has proved suc-cessful in terms of both customer experience and sales revenues.

OPERATIONAL EXCELLENCEThe Big Bazar retail chain has grown rapidly in recent years; approximately half of the Blokker distribution centre in the town of Mijdrecht is currently reserved for Big Bazar. These capabilities may be further increased if the Big Bazar format continues to grow in the future.

OPEN AND COMMITTED TEAMSOf the total of 1,300 people employed by Big Bazar at the end of 2014, 500 joined in 2013 and 400 in 2014. This means the

majority of Big Bazar staff have been with the company only a short while. The compact management team worked hard during the year under review on setting up a professional and efficient organisation, including training courses for new employees.

OUTLOOK AND ACTIVITIES FOR 2015In addition to the opening of Hoofddorp XL in February 2015, Big Bazar is focusing on sales growth at the existing stores and expansion in large-scale XL locations. Another 40 renovations based on the new format are scheduled for 2015. Big Bazar is currently also working to improve its visibility, in order to increase traffic to the stores. Since early 2015, the company has been distributing a new leaflet to homes every two weeks.

Big Bazar is currently also working together with Xenos and Blokker in sourcing their food from the same suppliers. This partnership is expected to create purchasing and other synergy benefits.

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The shop floor of a Big Bazar XL store.


COOK&CO

FORMaTCook&Co is an online cookware retailer which also operates physical stores across the Netherlands for amateur cooks, ‘foodies’ and gourmands looking for personalised advice and excellent service. The Cook&Co range consists of high-quality, trendy cookware, including pots and pans, knives, electrical kitchen appliances, kitchen aids and tools, and cookbooks. The stores also provide customers with a wide range of food items.

Cook&Co’s online sales grew by nearly 25% in 2014. The physical stores fell just short of matching their 2013 sales revenue. The closure of the Zoetermeer store drove down total sales revenues.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSThe retail format is committed to providing a high level of service and makes every effort to maintain and improve this level. In the wake of the immense growth of the webshop in particular, Cook&Co is able to compile an increasingly sophis-ticated profile of its customers. By asking online customers to write reviews, Cook&Co is able to actively improve its services and various surveys have revealed the high level of customer satisfaction among Cook&Co customers.

BEST wEBSHOpResearch Company Service Scout conducted a survey in December 2014 to assess the quality of several major online retailers in the Netherlands. The independent survey revealed Cook&Co to be the best webshop: during the busiest time of the year, Cook&Co proves its quality and the reliability of its deliveries.

DEVELOpMENT INTO a wEBSHOp wITH pHYSICaL STORESIn recent years this quality store has evolved from a physical retailer with a webshop into a webshop with physical stores. Cook&Co further defined its brand vision in 2014 and communicated it more effectively in order to increase the visibility and awareness of the brand. A number of changes were made to the communications, look and feel, and product range.

During the year under review, an exclusive line of cookware was launched for Blokker and Cook&Co under the labels ‘24Kitchen’ and ‘Rudolph’s Bakery’.

OPEN AND COMMITTED TEAMSAn Employee Engagement Survey was conducted among all Cook&Co employees in 2014. This survey resulted in relevant information which is actively being incorporated into the various departments at the head office, in the distribution centre and at the stores.

Cook&Co promotes high service levels, which is valued and acknowledged by its customers.

Cook&Co leaflet featuring celebrity chef Gordon Ramsay.

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OPERATIONAL EXCELLENCEThe focus of Cook&Co is increasingly on approaching the market online, supported by the network of physical stores spread across the Netherlands. The profits of the stores are assessed annually and any stores that show a pattern of losses over an extended period of time are closed.

The Cook&Co management team has been increased in order to help meet Cook&Co targets for expansion.

ACTIVITIES AND OUTLOOK FOR 2015The online platform of the webshop was replaced in early 2015 and became part of Nextail. This measure contributes to the further professionalisation and development of the webshop. Cook&Co expects that the physical stores will benefit from this development as well.

CONTEMpORaRY FORMaTOne of the top priorities for 2015 is increasing the chain’s brand awareness. A national campaign was launched for this purpose in early 2015. The year 2015 was off to a promising start, with significant sales growth in the physical stores and sharp growth in online sales.

The main activity for the coming years is developing a contemporary format in line with Cook&Co’s brand vision. Several pilot stores are scheduled to be opened at the end of 2015.

A line of cookware was launched exclusively for Blokker and Cook&Co in 2014 under the labels 24Kitchen and Rudolph’s Bakery.

Cook&Co promotional items.


Poster commemorating Marskramer’s 75th anniversary.

MaRSKRaMER

FORMaTMarskramer is a retail chain with 205 stores with an average floor space of 300 square metres specialising in household goods and toys and catering to residential neighbourhoods and villages. Marskramer also operates the soft-franchise formats Novy and Prima and the Groothandel Gouda wholesaler. Estab-lished in 1940, Marskramer is part of Blokker Holding since 1993. The retailer is celebrating its 75th anniversary in 2015.

Marskramer is a household format for smaller cities, villages and residential neighbourhoods. Like many other retailers, the sales revenues of Marskramer were under pressure in 2014. Toy sales however, remained stable during the year under review, boosted by the Loom bands craze. Marskramer began working even more closely with Blokker in 2014.

NOVY aND pRIMaThe ‘Prima’ label, a shop-in-shop format for smaller inde-pendent stores in villages and residential neighbourhoods, was launched in the market in 2014. Several Novy stores were converted into Prima stores and a number of wholesale buyers have been incorporated into Prima. At year-end 2014, there were 25 Novy stores and 12 Prima stores, followed by opening of six additional Prima stores in spring 2015. The total number of wholesale customers fell in 2014.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSDuring the year under review Marskramer redesigned several stores in the new style, which was first launched in 2011. The layout of the stores has been improved thanks to a better and clearer arrangement of the product range into core groups and by lowering the sales units. At the end of 2014, a special customer late-opening night was organised for women only under the name ‘Ladies’ night’.

OPERATIONAL EXCELLENCE WITH OPEN AND COMMITTED TEAMSIn 2014 Marskramer once again closed several non-profitable stores whose leases were on the verge of expiring. Furthermore, the retailer also agreed on a rent reduction with a large number of lessors. Another example of a cost reduction is a pilot project involving alternative staffing in the mornings at 40 stores. Both the stores and the head office are pleased with the results of this pilot project. The project will be continued for the 40 stores and extended across another 40 stores.

Various support services for Marskramer, including Purchasing Administration, Finance & Administration, IT, Human Resources and Store Construction, were integrated with Blokker’s services in 2013. Marskramer will be able to strengthen its position thanks to the economies of scale created through this partner-ship. The retailer is also generating more sales from TV adverts

at lower costs, through name recognition and promotions. One example is the reward campaign for Blue Band bread boxes, available at Blokker and Marskramer stores.

Marskramer conducted an Employee Engagement Survey in April 2014. After a detailed analysis, the Marskramer manage-ment began taking concrete action and making improvements based on the results of this survey, starting in the second half of 2014. Marskramer holds constructive and open meetings with its employees, the Works Council and the franchise manage-ment. Decisions regarding process and organisational changes are made in conjunction with the various parties concerned.

OUTLOOK AND ACTIVITIES FOR 2015Marskramer will continue to focus on residential neighbour-hoods and villages and will start working even more closely with Blokker. Starting in September 2015, the current Marskramer distribution centre in Gouda will also be used for Blokker’s e-commerce fulfilment. From 2016, the Marskramer stores will be stocked by the Blokker distribution centre; by then, the Gouda distribution centre will be fully dedicated to e-commerce operations for Blokker.

MaRSKRaMER’S 75TH aNNIVERSaRY Marskramer will be celebrating its 75th anniversary in 2015 and we fully intend to commemorate this special occasion. One of the activities we organised is the ‘Anniversary Late Opening’ held in spring 2015.

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TREND CENTER aND ELEKTROBLOK

FORMaTBlokker Holding operates two independent wholesalers, both of which have buyers in Europe, the Netherlands Antilles and Suriname. In 2014, many of these customers faced tough market conditions. Both wholesalers nevertheless again contributed to Blokker Holding’s group earnings.

TREND CENTERTrend Center carries a range of home decoration and gift items, supplying primarily to retail chains and several major wholesalers. The commercial organisation imports goods from the Far East and subsequently exports them to countries in Europe and beyond. The two main markets are Germany and France.

The year under review has been reasonably positive for Trend Center, although sales were down slightly as a result of a sluggish last quarter and the high U.S. dollar. Sales in Germany fell, while those in the other countries showed a strong recovery. Although the retailer lost several smaller customers during the year under review, the overall increase in the customer base has boosted group profit. After several negative experiences in 2013, the creditworthiness of the customers improved once again in the year under review. Costs related to storage, transport and handling fell marginally, one of the reasons for which was the lower number of small shipments.

ACTIVITIES AND OUTLOOK FOR 2015With the number of trade fairs and exhibitions declining, Trend Center intends to further increase the number of customer visits. The software will be upgraded in 2015, making it possible to present items more effectively and making the ordering system more customer-friendly.

The market continues to contract in early 2015. There is a sufficient stream of potential new customers, but average orders from existing customers are smaller.

ELEKTROBLOKElektroblok specialises in the sale of households items (carrying both regular brands and white-label brands) alongside luxury items and toys. The wholesaler primarily serves independent retailers operating stores in small- to medium-sized cities and towns. The majority of customers are based in the Netherlands, although Elektroblok also operates in Belgium, Germany, Suriname, Curacao and Bonaire.

Elektroblok has seen its sales decline during the year under review. At the same time, profit margins increased slightly. The bulk of Elektoblok’s revenue originates from independent retailers. Sales were down sharply at the majority of these more or less ‘regular’ customers, resulting in fewer orders. Exports to Suriname, Curacao, Aruba and Bonaire were down as well, due primarily to the increased competition and higher cost of living in these regions.

ACTIVITIES AND OUTLOOK FOR 2015Elektroblok expects to once again help boost the group earnings in 2015.

Trend Center promotional items.

Trend Center promotional items.

36 BLOKKER HOLDING aNNuaL REpORT 2014 36

TOYSWith the growing number of online retailers having inten-sified competition, the toy sector as a whole saw its sales increase only slightly in 2014. Still, Blokker Holding’s toy formats performed well, with an average growth of 1.7%.

In spring 2014 a new craze swept the Dutch toy world: ‘Loom’. Children, teenagers and their parents all rushed out to buy these coloured rubber bands, which they tied into bracelets and necklaces. LEGO was another bestseller at toy shops across the country in 2014.

The biggest hits in multimedia were the new Sony PlayStation 4 and Microsoft’s XBOX One. The market for DVDs and Blu-ray further shrank during the year under review, in keeping with expectations.


666,854(2013/14: 655,744)


5,132(2013/14: 5,236)


717(2013/14: 738)

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INTERTOYS

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MaXI TOYS

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BaRT SMIT

FORMaTThe Bart Smit retail format specialises in toys and entertain-ment items for children and anyone who is young at heart. In addition to the traditional toys, games and gifts, Bart Smit sells multimedia items, mainly video games.

Total sales in the Netherlands were up slightly in 2014, despite a number of store closings. The main driver behind these higher sales is the higher online sales revenues. The Belgian stores experienced a slight decline in sales, making it a challenging year in Belgium.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSBart Smit and marketing research firm TNS/NIPO conducted a market survey in order to better adapt the format to customer needs. One of the retailer’s objectives is to get even closer to the customer – and remaining there. The year under review also saw the launch of the ’t Juiste cadeau, altijd raak! (The right gift, always a winner!) branding campaign.

ONLINE INFORMaTION pOINTIn order to further increase online and offline conversion rates, the webshop switched to the shared group platform in early 2014. The online product range was further expanded at the same time.

By year-end 2014, 25 stores opened an online kiosk, also known as online information point. The full Bart Smit online product range is now also available to customers in these stores. This means sales staff rarely have to turn away customers anymore telling them that an item is not available. OPERATIONAL EXCELLENCE WITH OPEN AND COMMITTED TEAMSBart Smit made considerable efforts to improve its business operations in 2014. For one, it worked hard on implementing an automatic reordering system for its stores, which has been operational since early 2015.

The transition to the new ERP/BI environment, with the option of automatic reorders, has been an important strategic step for Bart Smit as a fully-fledged omnichannel retailer.Online ordering point at various stores.

wEBSHOp

BaRTSMIT.COM

Logo te gebruiken vanaf 75 cm

2014, the year of the Loom bands.

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Bart Smit store in Mortsel, Belgium.

More efficient e-fulfilment continued to pay off in 2014. Meanwhile, Bart Smit also closed a number of unprofitable stores and took various measures to increase franchise fees, including by negotiating more favourable lease terms. In order to gain greater control over the product range and working capital, the administrative processes have been further streamlined during the year under review and the quality of the information provision is improved, which will be further enhanced with the launch of the new ERP/BI system. The reduction of the truck fleet completed in 2013 also paid off in 2014.

Bart Smit fosters a culture with open and committed employees. In order to strengthen these qualities, a number of measures are taken in 2014. This includes increasing communications with staff and managing various HR processes with greater professionalism. Bart Smit’s high-performance culture is preserved throughout.

ACTIVITIES AND OUTLOOK FOR 2015The format will be further defined and implemented in the stores in 2015. Furthermore, the retailer will analyse what elements the toy and entertainment format will require in the future. Bart Smit will also take additional measures to align its logistics and e-fulfilment processes with the solid online growth. The new web environment will be further perfected while the product range has become more accessible thanks to the automatic reordering system.

SLIGHT RECOVERY IN THE MaRKET The toy and multimedia market is expected to improve slightly in 2015. Although a craze such as the Loom bands does not occur every year, innovations in the traditional toy market nevertheless look promising.

Bart Smit promotional items.


INTERTOYS

FORMaTIntertoys, which was established in 1976 and has been part of Blokker Holding since 1993, is a contemporary toy retailer operating in the traditional toy market and selling an extensive and up-to-date range of multimedia items, gifts and jewellery.

Intertoys again generated profit in 2014, its sales revenues even outpacing the market. It was also able to increase its market share slightly in Belgium and Germany. This success should be credited in part to the Loom bands craze, a phenomenon Intertoys was able to capitalise on at an early stage. Another success factor is the active focus on improving efficiency and enhancing the product range. Since Intertoys has been able to effectively anticipate the higher sales of toys and multimedia online, it has seen its sales increase sharply during 2014.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSIn 2014, Intertoys focused specifically on customer relationships in the stores and at other points of contact. Several years ago, the retailer began providing internal customer service training to employees at both the company-owned stores and the franchise stores. The Intertoys format is constantly adapted to meet customer needs. For example, high-quality toys at a fixed, low price, named Prijstoppers, have been introduced in 2014.

The year 2014 also saw Intertoys’ debut as an independent exhibitor at the world’s largest toy trade fair in Nuremberg, Germany, to

promote its product range for potential wholesale customers. The company has seen the changes it has made validated by two major awards it has won: ‘Best Online Toy Retailer’ and ‘Best Music, DVD and Game Retailer’.

OPERATIONAL EXCELLENCE WITH OPEN AND COMMITTED TEAMSIntertoys worked hard in 2014 on developing a new ERP/BI system, which is to be implemented in June 2015. Meanwhile, the Dutch and German webshops switched to a new e-commerce platform in early 2015 and remodelled their stores to create an all-new look and feel.

The Intertoys retail culture is characterised by the strong loyalty of its staff, resulting in low staff turnover. Following the creation of the new omnichannel organisation, the employees of the webshop relocated at the end of 2014 from the head office in Waddinxveen to Nextail’s offices in Amsterdam.

ACTIVITIES AND OUTLOOK FOR 2015Intertoys will be conducting a pilot project involving in-store online kiosks. The online product range will be further expanded and customer service in the retail stores will be further improved. The webshop will continue to be further optimised throughout the year and a number of pilot projects will be run inside the stores in order to keep the format contemporary. By improving the integration of the physical and online stores through the omnichannel proposition, Intertoys will strengthen its position as the leading toy retailer in the Netherlands.

Intertoys The Hague.

The Intertoys megastore in The Hague opened on 14 August 2014.

EMpLOYEES

2,168COuNTRIES

THE NETHERLaNDSBELGIuMGERMaNY


176FRaNCHISE STORES

125wEBSHOp

INTERTOYS.NLINTERTOYS.DE


Franchisee Jurian Duijzer runs the Intertoys store in Dordrecht’s city centre. His team consists of 17 employees, including his sister Angelique. Jurian, 40, lives in Papendrecht with his wife and two daughters. In his spare time, he is a goalkeeping coach and President of the junior section for the VV Dechtstreek football club. Jurian studied Higher Management, worked as a Manager for several major companies and served as the Sales and Marketing Director of a publishing company. He is recently appointed Chairman of the Intertoys Franchise Association.

Blood, sweat and tears Intertoys has been part of Jurian Duijzer’s life for 39 years. The old paper-tape calculator sitting on the desk in the small office reveals the family history. Five years ago Jurian took over the business from his father, who developed it from nothing into a flourishing store with blood, sweat and tears.

The expertise Jurian acquired in his corporate career prior to the takeover has turned out to be invaluable to his work as an independent entrepreneur. Jurian: ‘Putting other people first is something I’ve really had to learn. As ambitious as I may be, I now realise I’m nothing without my team. I believe in my staff – they are the ambassadors of your company. That means you must invest energy in each other and have the will to keep changing.’ Doing business under a strong bannerJust how essential change was became clear to Jurian during the recent economic crisis. ‘The crisis wasn’t all bad; it kept me on my toes. If everything is going swimmingly, there’s a risk you will start losing your edge. It’s during times of crisis that you start to scrutinise your processes and start looking for opportunities.’ For Jurian, it is essential to have the support of the holding company right behind him. ‘There are three regional managers in the Netherlands who are available to assist and support franchisees. They help you to manage the format effectively and their role is crucial. They support you, for example, with negotiations on the building you are leasing and help provide solutions when sales are slack. They are always there for you when you’re stuck. And that does happen from time to time. I certainly take advantage of the opportunity; I can always pick up the phone and call my contact.’

Achieving excellence within the formatJurian does not regard the fact that independent franchisees need to follow the format rules as a restriction, but rather as a source of opportunities. ‘As an entrepreneur, you need to have an interest in Blokker Holding. The sheer amount of knowhow and ambition you find among people there is really inspiring. Something like Nextail, which is an important development in the industry, is really something to be grateful for. As the Chairman of the Franchise Association, I like to explain to employees how important omnichannel retailing is for us. Sure, you have to stay true to the format – you opened the franchise for a reason, and the holding company has the expertise you need. But I absolutely have input of my own as well. Look at it this way: Intertoys is the framework and if you do your best everything will fit within that framework. The holding company is responsible for purchasing and marketing and for defining the total identity. This enables me to focus completely on my customers, which gives me the freedom I need to excel as an entrepreneur within the parameters given. For example, I get to order a small quantity of my own products, which is very important given the fact that local needs change constantly. I also have the freedom to manage my social media the way I want. Sure, we are given certain guidelines, but I remain responsible for my own sales and staffing policy. What matters is that I have a strong organisation behind me, which is certainly the case.’

You’ve got to have the will to keep changing

INTERVIEW WITH JURIAN DUIJZER

40

There are 119 Intertoys franchise stores in the Netherlands. At Intertoys, franchising involves close collaboration between the local entrepreneur and a strong retail format. Franchisees are responsible for their own sales and investments, while getting to benefit from the expertise and economies of scale offered by Blokker Holding.


MaXI TOYS

FORMaTMaxi Toys is a specialised toy retail chain operating in five European countries. A typical Maxi Toys store has floor space of between 600 and 1,000 square metres and is generally located in large shopping centres right outside the major cities. The head office and distribution centre are located in Houdeng-Goegnies, Belgium. Established in 1989, Maxi Toys has been part of Blokker Holding since 1997.

Maxi Toys celebrated its 25th anniversary during the year under review, which it celebrated in a variety of ways. The quarter-century celebrations were supported with additional advertising, special offers, in-store decorations, creative collections and promotions. And to share in the celebrations with its customers, Maxi Toys treated them to several campaigns and promotions between March and December. Around 80,000 customers took home the Maxi Toys truck, a special anniversary gift.

The international toy market showed plenty of dynamic in 2014, with various peaks and troughs. Maxi Toys saw its sales increase slightly in 2014. Its online sales also increased further during the year under review. With the exception of Luxembourg, the retailer saw its sales revenues from games and multimedia items fall in all markets in 2014. Its own white-label brands of traditional toys continued to show strong sales.

The number of stores remained virtually unchanged, with two closures and one opening. Traditional retail struggled mainly in the Belgian and French markets, which are both Maxi Toys markets. This is the result of both an increase in the number of online players and the reduced market share of hypermarkets in France. This trend has been unfavourable for Maxi Toys because hypermarkets generally attract large numbers of customers to the shopping areas where Maxi Toys is located.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSA successful shopping experience remains key to Maxi Toys’ success. The combination of leading, premium brands and the range of exclusive and up-to-date white-label brands appeals to large numbers of consumers. Research shows that customers spend an average of 42 minutes in the stores. Bestsellers during the year under review included the new collections of the white-label brands Professor PI (educational toys) and EZ BLOX (construction toys). Maxi Toys mascot.

Maxi Toys, Flémalle, Belgium.

EMpLOYEES

1,145COuNTRIES

FRaNCE, BELGIuM,LuXEMBOuRGSwITZERLaND, ITaLY


174FRaNCHISE STORES

2wEBSHOpMaXITOYS.FRMaXITOYS.BEMaXITOYS.Lu


OPERATIONAL EXCELLENCEThe major expansion of the distribution centre in Houdeng-Goegnies (trading as Logitoys) from 30,000 to 45,000 square metres was a major milestone in 2014. The expansion coincided with the redesign of the supply chain. This has improved services to both online customers and in the

physical stores. The expansion also enables Maxi Toys to realise its plans for expansion for the next 10 years.

MaSTER FRaNCHISES IN GROwTH MaRKETSSince Maxi Toys expects limited growth in the coming years in its two main markets, France and Belgium, the chain is increasingly focusing on the world around it. Revenues are increased as a result of the introduction of the master franchise model. In 2014 the maxitoys.ro webshop is set up in Romania, in addition to a master franchise in Bucharest, repeating previous successes in Turkey and Morocco. The model is scheduled to be rolled out in other non-European markets in 2016.

OPEN AND COMMITTED TEAMSIt all starts with the employees and this requires a constant focus on development. For example, external experts were hired during 2014 to adapt the entire training and education programme and create a Maxi Toys Academy. Since 2011, Maxi Toys have been working on the ‘Standardisation and professionalisation’ project, which focuses on some of the following topics: store image, routing, communications, duties, employee training and coaching, and service.

ACTIVITIES AND OUTLOOK FOR 2015In light of the overall economic trends and increased competi-tion in the toy market, Maxi Toys again expects this to be a challenging year. Sales in the first few months of 2015 were stable, despite the early Easter. The toy retailer is well-posi-tioned to overcome these challenges.

Maxi Toys celebrated its 25th anniversary in 2014.

Entrance to Maxi Toys store.


LIVING The Living sector as a whole showed a plus for the first time in seven years in 2014. The growth rate for the full year increased by 5% over 2013 (like-for-like figures). This growth was driven by the double-digit growth in the kitchen and parquet flooring business (source: INretail).

Data supplied by the Central Bureau of Statistics in the Netherlands (CBS) shows that the Dutch market for home furnishing stores as a whole (like-for-like figures) fell by 0.1% in 2014. In the Netherlands, Leen Bakker slightly outpaced the market. All Leen Bakker stores in the Benelux market together showed stable sales of - 0.4% in the past financial year.

Many home furnishings retailers are struggling to keep afloat. High vacancy rates at home furnishing centres, higher rents, diversification and the growing popularity of used goods are just a few of the contributing factors. Competitive advantage in this sector is therefore vital. A satisfying customer experience, for example, will attract customers to both the physical and online stores. Leen Bakker fully updated its retail concept in 2014 for this reason, including the introduction of a new logo, additional services and white-label (furniture) brands. The information available in the webshop has also been improved. The stores which have been fully converted based on the new retail concept have shown much stronger sales growth than both the other Leen Bakker stores and the market as a whole.


323,379(2013/14: 324,812)


2,253(2013/14: 2,280)


181(2013/14: 178)

43


LEEN BaKKER

FORMaTLeen Bakker is a home furnishings retailer offering contem-porary home design styles at surprisingly affordable prices. Leen Bakker attributes its competitive edge to its high quality, competitive prices, fast delivery, contemporary designs and strong customer focus.

Leen Bakker’s stable sales revenues in 2014 are to be credited mainly to the all-new format, the introduction of the new branding in all stores, national radio and TV advertising campaigns and the distribution of a special promotional leaflet.

CLOSE TO THE CUSTOMER WITH CONTEMPORARY FORMATSLeen Bakker turned its attention in the past few years to changing its brand image, which has resulted in a complete visual transformation of the retail format. During the year under review, the retailer converted existing stores into pilot stores: pleasant, well-organised and welcoming retail spaces that do a better job of meeting customers’ needs. The retailer’s signature colours blue, red and grey have been replaced with fuchsia. In response to customer surveys, which revealed that customers

have a strong need for detailed product information, Leen Bakker set up a content team that is responsible for enhancing the webshop and physical stores with product information. In addition, the sales staff has attended specialised training courses to improve their product knowledge. Customer surveys have also revealed that the first new-style Leen Bakker pilot stores have improved Leen Bakker’s image. The core values of ‘competitively priced’, ‘contemporary’ and ‘original’ still shine through in the new stores while the retailer has, at the same time, managed to strengthen its competitive advantage in the home furnishings market. Five more stores are scheduled to be opened in 2015. Outdoor advertising will also be changed for all stores in the Netherlands in the current year.

wHITE-LaBEL BRaNDS In order to boost sales in its Large Furniture section, Leen Bakker commissioned a team of creative young designers to create a new line called UMIX: these are sofas which customers can design based on their own specifications. The ‘Stock’ line of cabinets and Leen Bakker’s own range of garden furniture, ‘Le Sud’, are based on the same concept.

OPERATIONAL EXCELLENCEThe sales reports issued periodically by the Finance and IT departments, which contain sales breakdowns per store,

New Leen Bakker logo. The house represents all home furnishing items for indoors and outdoors. By adding the word ‘also’, Leen Bakker draws the customer’s attention to its additional services.

New interior of a Leen Bakker store.

EMpLOYEES

2,253COuNTRIES

THE NETHERLaNDSBELGIuMLuXEMBOuRG


170FRaNCHISE STORES

9wEBSHOp

LEENBaKKER.NLLEENBaKKER.BE


have shown that not all Leen Bakker stores contribute to the company’s profit. This indicates that further investments will need to be made in the quality of the sales team and in other strategies to attract larger numbers of customers to the stores. Any stores that continue to consistently operate at a loss despite these efforts can be permanently closed.

The sales growth in the webshops has resulted in an increase in the number of home deliveries. A large number of orders are delivered to customers’ homes by third-party providers. The logistics organisation needs all its resource capacity to handle the growing volume of deliveries. The technical installation of one of the bulk warehouses was fully renovated during the year under review. Since the flow of incoming goods varies significantly depending on the circumstances, staff at the stores work on a flexible basis.

SuSTaINaBLE BuSINESSLeen Bakker is committed to sustainability and is taking measures in this area with regard to the sale of FSC-certified wood and reducing carbon emissions. It also fully upgraded its fleet of trucks in 2014. All platforms of the trucks now bear the new logo. The new trucks comply with all applicable carbon emission standards and have received the ‘Lean and Green’ label for their energy-efficiency.

OPEN AND COMMITTED TEAMSAll employees at the head office, along with the store managers and team leaders of the distribution centre, participated in the Employee Engagement Survey in 2014. The results of the survey were shared across the organisation as

Leen Bakker’s exclusive UMIX range.

New store in Saint-Georges-sur-Meuse, Belgium.

a whole and as this year unfolds it will be clear how much progress these teams have made.

A total of 14 employees successfully completed specialised retail sales training in 2014. The Format Development department, which was established in spring 2015, will provide support in updating and developing the product range, in combination with aisle management services.


LEEN BAKKER BELGIUM AND LUXEMBOURGDue to a variety of factors, including sustained lower sales in garden furniture, sales revenues at the Belgian stores remained marginally below the 2013 level. This group has a significant share in the sales revenues as a whole. By focusing more on staff’s sales knowledge, the retailer did manage to significantly increase its conversion rates in 2014.

Sales revenues of Leen Bakker’s webshop increased by 23% in 2014, although the total share in the revenue of the online busi-ness remains relatively low. Customers continue to collect their online orders from the stores. Leen Bakker is expected to enter into a partnership with a courier company in 2015. Supported by Nextail and a home delivery service, sales revenues from the webshop in Belgium should be able to further increase.

A new store was opened in the Belgian town of Saint-Georges-sur-Meuse, designed in the new Leen Bakker style.

LEEN BAKKER CURAÇAOThe Building Depot megastore, a Leen Bakker franchisee, opened its doors in November 2014 – exactly eighteen months after the building was destroyed by fire. In 2014, Building Depot managed to attract more than 100,000 visitors to the store in less than six weeks.

The Leen Bakker shop-in-shop inside the Building Depot megastore is designed based on the new retail format. This same style was used for the store as a whole, which has 14,000 square metres of floor space and is Curaçao’s largest megastore. Building Depot has managed to successfully re-establish itself with a significantly upgraded modern store, while keeping the existing slogan: ‘Djis Pens’e…Nos Tin E (Need something? We’ve got it!).

ACTIVITIES AND OUTLOOK FOR 2015Backed by an ambitious sales and marketing plan, Leen Bakker expects to increase overall sales revenues at both its Dutch and Belgian stores in 2015. In spring 2015, Leen Bakker and Blokker began selling a white-label range of garden furniture under the name ‘Le Sud’. A radio and TV advertising campaign supported the launch of the brand.

IN-STORE TaBLETS Leen Bakker is currently running a pilot project at five stores involving the use of tablets for sales staff. By the end of this year, sales assistants should be able to have easy access to all the information they need in the stores. Customers should also be able to use these tablets to order items. Leen Bakker will furthermore be installing online kiosks in the stores on which customers can view the product range and place orders.

The Leen Bakker webshop will be integrated into the Nextail web platform this year, creating major opportunities for growth in online sales. Supported by the webshop and Nextail, Leen Bakker is gradually evolving into an omnichannel home furnishings retailer.

The growing number of brands and a more coherent product range have resulted in a boost in sales. In-store training has helped improve the level of service provided to customers. Another customer satisfaction survey will be conducted this year to gauge customers’ opinions of Leen Bakker.

The remodelling of the stores is an investment priority for the coming years. Three stores were already successfully converted based on the new format in 2014, followed by five more stores in 2015. The outdoor advertising will be adapted at all stores across the Netherlands.

Building Depot megastore, Leen Bakker franchisee in Curaçao.


FINANCIAL REPORT

BLOKKER HOLDING 20

14


CONSOLIDaTED BaLaNCE SHEETaS aT 24 JaNuaRY 2015

in thousands of euros, after proposal for profit appropriation 24-01-2015 25-01-2014 aSSETSNon-current assets

Intangible assets 14,609 9,688

Property, plant and equipmentLand and buildings 130,734 180,216Other non-current operating assets 95,282 116,875 226,016 297,091Financial fixed assetsAssociates 270,093 1,124Receivables from associates 12,657 -Other receivables 6,644 - 289,394 1,124

Current assets

Stocks 410,952 439,563

Receivables Trade debtors 20,852 26,186Other receivables 60,685 55,387 Prepayments and accrued income 34,929 47,128 116,466 128,701

Cash and cash equivalents 47,061 56,211 1,104,498 932,378

LIaBILITIES

Shareholders’ equity 466,628 486,231

ProvisionsTax 11,593 20,243Other provisions 57,291 48,052 68,884 68,295 Non-current liabilitiesDebts to credit institutions - 44Debts to associates 162,015 - Other debts 131,697 71,474 293,712 71,518Current liabilitiesDebts to trade creditors 89,065 90,365Tax and social insurance contributions 90,874 104,329Other debts 403 278 Accruals and deferred income 94,932 111,362 275,274 306,334 1,104,498 932,378


CONSOLIDaTED INCOME STaTEMENT FOR 2014/15

in thousands of euros 2014/15 2013/14 Net revenue 2,117,923 2,502,591

Cost of sales -1,560,113 -1,730,353Gross sales revenues 557,810 772,238

Selling expenses 510,257 613,525General administrative expenses 65,462 82,000Total costs -575,719 -695,525

Operating income (EBIT) -17,909 76,713

Financial income 476 448Financial expenses -2,363 -877Total financial income and expenses -1,887 -429

Income from ordinary operations before tax -19,796 76,284

Tax 4,341 -15,622Income after tax -15,455 60,662

Income from associates -4,830 -Net income -20,285 60,662


CaSH FLOw STaTEMENT FOR 2014/15

in thousands of euros 2014/15 2013/14 Operating income (EBIT) -17,909 76,713

Depreciation 55,655 89,601Changes in provisions 17,824 -7,023Changes in working capital in• Stocks -44,996 32,106• Receivables 2,065 -3,027• Current liabilities 3,375 15,292 33,923 126,949Cash flow from operating activities 16,014 203,662

Financial income and expenses -1,887 -429Tax on profit -13,649 -17,912 -15,536 -18,341Net cash flow from operating activities 478 185,321

Net investment in• intangible assets -8,855 -5,673• plant, property and equipment -58,022 -62,800• financial fixed assets -4,439 -• deconsolidation -7,422 -Net cash flow from investment activities -78,738 -68,473

Dividend - -83,000Changes in long-term loans 68,428 -31,555Other 682 77Net cash flow from financing activities 69,110 -114,478Net cash flow -9,150 2,370

Cash and cash equivalents at start of financial year 56,211 53,841Cash and cash equivalents at end of financial year 47,061 56,211


FINaNCIaL REpORTING pRINCIpLES

GENERAL DETAILS

LOCaTIONBlokker Holding B.V. has its registered office and principal place of business in Amsterdam.

aCTIVITIESBlokker Holding B.V. is a retail group operating retail chains in the Household, Toys and Living sectors, along with wholesalers.

FINaNCIaL YEaRIn accordance with the Articles of Association, the financial year ends on the Saturday of the fourth week of the calendar year. The 2014/2015 financial year included 52 weeks (versus 52 weeks in 2013/2014). The last day of the 2014/15 financial year was 24 January 2015 and that of the previous financial year was 25 January 2014.

GENERaL aCCOuNTING pRINCIpLESThe financial statements are prepared in accordance with the provisions of Part 9 Book 2 of the Dutch Civil Code. The valuation principles described below relate to both the company financial statements and the consolidated financial statements.

The general accounting principles for the valuation of assets and liabilities, as well as for determining the results, are based on the purchase or manufacturing price. Assets and liabilities are shown at nominal value unless stated otherwise.

For the preparation of the income statement in the company financial statements, the exemption provided for in Section 2:402 of the Dutch Civil Code is applied.

The financial statements are drawn up in thousands of euros.

uSE OF ESTIMaTESIn preparing the financial statements, the company’s management must, in accordance with generally accepted accounting principles, make specific estimates and assumptions which help determine the amount stated in the financial statements. Actual results may vary from these estimates.

The estimates and underlying assumptions are assessed on an ongoing basis. Revised estimates are recognised during the period in which the estimate is being revised and during future periods for which the revision has implications.

FOREIGN CuRRENCIESAssets and liabilities in foreign currency are converted at the exchange rates prevailing on the balance sheet date. Transactions in foreign currency are converted at the exchange rates prevailing on the date of the transaction. The resulting exchange rate differences are shown in the income statement.

Financial statements of foreign associates which are not denominated in euros are converted into euros at the exchange rate prevailing at the end of the reporting period. The effect of the recalculation of the assets and liabilities of associates at the beginning of the year at the exchange rates at the end of the year is recognised in shareholders’ equity.

CONSOLIDaTION pRINCIpLESBlokker Holding B.V. and the associates, also being the group companies over which Blokker Holding B.V. has primary control or which are centrally managed, are consolidated. Financial data of Blokker Holding B.V., along with those of the group companies, are recognised based on the integrated consolidation method. Debts, liabilities and transactions between the group companies have been eliminated in the Group Financial Statements. Inter-company results included in the available stocks on the balance sheet date are eliminated for the purpose of the preparation of the consolidated financial statements.

A legal reserve is created for the retained earnings from associates which are not freely accessible to the company.

The data of the companies included in the consolidation as at 24 January 2015 were filed with the Chamber of Commerce.

The results of acquired companies are included in the consolidation from the date from which Blokker Holding BV bears the risk and expense for these companies.

In principle, the exemption provided for in Section 2:403(1) of the Dutch Civil Code is applied for the individual financial statements of the Dutch associates.

DECONSOLIDaTIONIn 2014, Blokker Holding B.V. transferred a single share in the paid-up capital of Casa Holding B.V. to an affiliated company outside the Blokker Holding B.V. group. A shareholder agreement was subsequently entered into in which it was agreed that Blokker Holding B.V. would transfer managerial control over Casa Holding B.V. and its affiliates with effect from the 2014/15 finan-cial year. The following terms are agreed with the counterparty:

• managerial control over Casa Holding B.V. and its associates will revert to Blokker Holding B.V. if there are any changes in the counterparty’s management.

• The equity capital of Casa Holding B.V. at that time will be equal to its equity capital at the end of the 2013/14 financial year (i.e. EUR 269.0 million).

• Blokker Holding B.V. will be entitled in the intervening period to an annual fee equivalent to 1% of its equity capital at year-end 2013/14, which will be payable at such time as the managerial control is reverted.


The amount for 2014/15 of the annual fee (EUR 2.7 million) is recognised as income from associates. With effect from the 2014/15 financial year, the associate Casa Holding B.V. is recognised at net asset value as at 26 January 2014 until such time as the managerial control is transferred back to Blokker Holding B.V.

In 2014, Blokker Holding B.V. reached agreement regarding the sale, effective 30 June 2014, of the total business of Tuincentrum Overvecht, consisting of Groenblok B.V. and its associates.

The financial details of the above-mentioned companies are no longer included in the consolidated financial statements from the time it is no longer possible to exercise managerial control over the company.

For additional information, please refer to page 58.

PRINCIPLES FOR THE VALUATION OF ASSETS AND LIABILITIES

INTaNGIBLE aSSETSIntangible assets are valued at cost, less depreciation calculated on a straight-line basis, based on expected economic life (5 years) and, if applicable, including impairments. In the year of investment, depreciation is calculated on a pro rata basis.

Goodwill paid on the acquisition of a company, by means of shares or through acquisition of the operating activities and the associated assets and liabilities, is directly deducted from shareholders’ equity in accordance with the statutory provisions of Part 9 Book 2 of the Dutch Civil Code.

pROpERTY, pLaNT aND EQuIpMENTProperty, plant and equipment are valued at cost, less straight-line depreciation, based on the expected economic life of the asset, and less impairment where applicable. In the year of investment, depreciation is calculated on a pro rata basis. Land is not depreciated.

Insofar as property, plant and equipment have been acquired through the acquisition of the companies concerned, these are valued at the current cost on acquisition of the shares.

In determining depreciation, the following expected economic lives are assumed:

Company buildings 25 – 50 yearsRenovations of company buildings 10 – 12 yearsOther non-current operating assets 5 – 7 years

FINaNCIaL FIXED aSSETSAssociates over which significant control can be exercised are shown at net asset value. This is calculated by valuing the assets, provisions and debts and calculating the result on the basis of the valuation principles applicable to the parent company.

Capital interests in other companies, over which no significant control can be exercised, are valued at cost. At the moment of losing the managerial control by Blokker Holding B.V., the net asset value will be the valuation principle for Casa Holding B.V.

Dividend income is recognised in the income statement in the year of receipt.

The remaining financial fixed assets are shown at nominal value, less a provision for the risk of irrecoverable debts where necessary.

STOCKSStocks of trade items are valued at cost or the lower market value, plus additional procurement costs. If necessary, a provi-sion for obsolescence is deducted from the value of the stocks.

RECEIVaBLESAt initial recognition, the receivables are stated at their fair value and consequently at amortised cost, which equals their nominal value less such provisions deemed necessary with respect to the risk of irrecoverable debts.

CaSH aND CaSH EQuIVaLENTSUnless stated otherwise, cash and cash equivalents are freely accessible to the company.

pROVISIONSProvisions are formed for all legally enforceable or constructive obligations resulting from an event prior to the balance sheet


date, the settlement of which is likely to require an outflow of funds and the extent of which can be reliably estimated.

The provision for deferred tax liabilities involves the calculation of the temporary differences between valuation principles for commercial and tax purposes. Deferred tax assets with equal durations are deducted if these relate to the same tax entity.

The provision for restructuring is shown at nominal value and is intended to cover costs related to reorganisations of parts of the group and onerous contracts.

The provision for warranty obligations is shown at the estimated costs expected as a result of current guarantee obligations as at the balance sheet date relating to goods and services delivered.

The provision for long-service bonuses is based on long-service policies applicable as at the balance sheet date, taking account of the staff turnover risk, future changes in wage costs and the discount rate.

The provision for legal proceedings concerns ongoing disputes, claims and lawsuits.

The company has contracted a pension scheme for its employees, which qualifies as a defined-contribution plan. This means that contributions payable during the financial year are recognised as costs. Factors such as wage changes, price indexation and investment returns on fund assets could lead to future adjustments in the annual contributions to the pension fund. In the event of a deficit or surplus of the sectoral pension fund, the company has no obligations other than the payment of future higher or lower contributions.

NON-CuRRENT LIaBILITIESNon-current liabilities include debts with a remaining term of more than one year. Payments due in the short term (within one year) are shown in current liabilities.

CuRRENT LIaBILITIESCurrent liabilities have an expected term of one year maximum, unless otherwise stated in the notes.

INCOME RECOGNITION

GENERaL DETaILSProfit is determined as the difference between net revenue and all related costs allocated to the reporting year. Costs are determined in accordance with the above valuation principles.

Profits are recognised in the year in which the revenue is realised. Losses are shown in the year in which these are foreseeable. Other income and expenses are recognised in the reporting period to which they relate.

NET REVENuENet revenue comprises the sales of the retail chains to consumers at the market value (exclusive of VAT) as well as other deliveries of goods and services to customers, less discounts and VAT.

COST OF SaLESThe cost of sales is the purchase value plus the costs directly and indirectly related to procurement. These costs also include movements in the provision for the risk of obsolescence.

FINaNCIaL INCOME aND EXpENSESFinancial income and expenses comprise interest received (or receivable) and paid (or payable).

TaXCorporation tax is calculated on the basis of the commercial result according to the consolidated income statement, at the applicable rate, taking account of tax facilities.

CaSH FLOw STaTEMENTThe cash flow statement is prepared on the basis of the indirect method, where the financial income and expenses and profit tax are recognised under ‘Cash flow from operating activities’.

The effect of deconsolidation of group companies, including any changes in assets and liabilities, is recognised as cash flow from investment activities.

COMpaRaTIVE FIGuRES.The classification of the comparative figures is adjusted where necessary for the purposes of comparison.


NOTES TO THE CONSOLIDaTED BaLaNCE SHEETaS aT 24 JaNuaRY 2015

in thousands of euros Total

INTaNGIBLE aSSETS

Opening balanceCost price 18,316Cumulative depreciation -8,628Book value 9,688 Changes during the financial yearDeconsolidation -416Investments 9,205 Disposals, impairment and translation differences -865 Depreciation on disposals, impairment and translation differences 515 Depreciation -3,518Total changes 4,921 Closing balanceCost price 24,736Cumulative depreciation -10,127 Book value 14,609

The ‘Intangible assets’ relate primarily to software/licences and websites.

Other non-current operating assets

Land and buildings

aSSETS

The ‘Land and buildings’ items refer primarily to renovations of leased premises.


pROpERTY, pLaNT aND EQuIpMENT

Opening balanceCost price 428,307 300,637 728,944Cumulative depreciation -248,091 -183,762 -431,853Book value 180,216 116,875 297,091

Changes during the financial yearDeconsolidation -46,131 -30,829 -76,960Investments 17,712 40,491 58,203 Disposals, impairment and translation differences -20,758 -11,576 -32,334 Depreciation on disposals, impairment and translation differences 20,758 11,395 32,153 Depreciation -21,063 -31,074 -52,137Total changes -49,482 -21,593 -71,075

Closing balanceCost price 315,566 246,467 562,033Cumulative depreciation -184,832 -151,185 - 336,017Book value 130,734 95,282 226,016


FINaNCIaL FIXED aSSETS

aSSOCIaTESThe ‘Associates’ item represents a 99.9% interest in Casa Holding B.V. (EUR 269.0 million), arising from the deconsolidation in 2014 and a 20% interest in Dennenhoorn B.V. (EUR 1.1 million), both of which have their registered offices in Laren.

RECEIVaBLESReceivables in the amount of EUR 12.7 million relate to receivables from associates as a result of the deconsolidation of Casa in 2014. These receivables have a maturity of 1 to 5 years; no securities have been created.

The other receivables, in the amount of approximately EUR 0.7 million, have a maturity of less than one year.

CuRRENT aSSETS

STOCKSIn connection with the change in the provision for obsolescence, an amount of EUR 8.2 million has been charged to the income statement (2013/14: EUR 11.7 million gain).

RECEIVaBLESThe receivables in the amount of approximately EUR 0.5 million (2013/14: EUR 3.2 million) have a maturity of more than one year.

‘Other receivables’ includes an amount of EUR 25.7 million (2013/14: EUR 13.6 million) related to profit tax and EUR 1.0 million (2013/14: EUR 2.8 million) related to deferred tax assets.

The total amount in tax losses not included in the recognition of tax deferrals is approximately EUR 5.8 million (2013/14: EUR 4.1 million).

LIaBILITIES

SHaREHOLDERS’ EQuITYFor an explanation of changes in shareholders’ equity, please see the Notes to the Company Balance Sheet.

pROVISIONS

in thousands of euros

Taxes 20,243 -3,837 71 -4,884 11,593 Restructuring 26,283 -1,319 26,099 -8,284 42,779 Guarantee 8,431 -1,232 - -75 7,124Long-service bonuses 4,580 -179 691 -490 4,602 Legal proceedings 2,977 -2,526 244 -180 515Other 5,781 -3,329 482 -663 2,271Total 68,295 -12,422 27,587 -14,576 68,884

Additions Closing balance financial year

DeconsolidationOpening balance financial year

The provision for deferred tax liabilities concerns future tax liabilities resulting from temporary differences between valuation principles for commercial and tax purposes.

The provision for restructuring is intended to cover the costs related to reorganisations of parts of the group and unprofitable contracts.

The provision for warranty obligations is recognised for the estimated costs expected to arise from the warranty obligations at the balance sheet date in relation to goods and services provided. Costs arising from meeting warranty obligations are deducted from the provision. Additions and

withdrawals were netted in the transition summary.

The provision for long-service bonuses is recognised based on the long-service policy at the balance sheet date, taking into account the likelihood of the employee remaining at the company, future trends in wage costs, and discount rate.

The provision for legal proceedings relates to current disputes, claims and court cases.

The remaining provisions include, among other things, a provi-sion for the large-scale maintenance of buildings owned by the company.

Withdrawals


Of the total balance of provisions, approximately EUR 39.0 million (2013/14: EUR 28.5 million) is current; the remainder is likely to be of a long-term nature.

NON-CuRRENT LIaBILITIESMost of the non-current liabilities have a maturity of up to five years and consist mainly of debts payable to affiliated companies and debts to associates. No collateral is provided.

Liabilities to affiliated companies amount to EUR 131.7 million (2013/14: EUR 71.5 million). The interest rate is fixed on a quarterly basis and comprises the average of the three-month and twelve-month Euribor rates at the start of each quarter (average for 2014/15: 0.33%; 2013/14: 0.375%). The debts to associates are related to the deconsolidation of Casa in 2014 and amount to EUR 162.0 million (2013/14: EUR nil) at interest rates ranging from 1.0% to 2.2%.

INFORMaTION NOT SHOwN IN THE CONSOLIDaTED BaLaNCE SHEET

RENT aND LEaSE COMMITMENTSAn amount of approximately EUR 228 million (2013/14: EUR 274 million) is payable in connection with long-term leasing contracts and leases. Contracts expire each year, and a number of contracts in effect at the balance sheet date have a remaining maturity of one to five years (total lease amount: approx. EUR 524 million) while other contracts have a remaining term of more than five years (total lease amount is roughly EUR 330 million). BaNK GuaRaNTEES aND LETTERS OF CREDITAn amount of approximately EUR 19 million has been frozen in the bank accounts (2013/14: EUR 23 million) in connection with bank guarantees and letters of credit, including EUR 15 million at Dutch companies (2013/14: EUR 8 million).

INVESTMENT COMMITMENTSInvestment commitments at year-end 2014/15 totalled approximately EUR 7.4 million (2013/14: EUR 27.7 million).

puRCHaSING COMMITMENTSAt the balance sheet date, outstanding purchasing commitments totalled approximately EUR 210 million (2013/14: EUR 270 million).

FINaNCIaL INSTRuMENTSThe risks associated with financial instruments are detailed below.

CuRRENCY EXCHaNGE RISKSCurrency exchange risks are almost exclusively related to purchases of goods in currencies other than the euro. The Group’s currency policy is aimed at managing currency exchange risks. In this context, forward foreign currency exchange contracts are used. The foreign currency component of forward currency exchange contracts, which serve as hedge instruments for future transactions, are stated at cost as long as the hedged position has not yet been included in the balance sheet.

The fair value of forward foreign currency exchange contracts on the balance sheet date was EUR 11.4 million (2013/14: EUR - 0.7 million).

INTEREST RaTE RISKSThe company has not used any instruments in connection with hedging interest rate risks.

CREDIT RISKSCredit risks relate to trade debtors and other current receivables. Sufficient provision has been made for these.


NOTES TO THE CONSOLIDaTED INCOME STaTEMENT FOR 2014/15

in thousands of euros 2014/15 2013/14

RevenueRevenue is divided as follows:

The Netherlands• Retail 1,385,189 1,426,875•Wholesale 161,361 171,169 1,546,550 1,598,044International • Retail 536,695 847,895•Wholesale 34,678 56,652 571,373 904,547Net group revenue 2,117,923 2,502,591

Salaries

Salaries 326,243 391,691Social insurance contributions 57,983 69,749Pension charges 22,105 28,650 406,331 490,090

Depreciation

Intangible assets 3,518 4,177Property, plant and equipment 52,137 85,424 55,655 89,601

EBITDA* 37,746 166,314

Personnel (number of employees)

The Netherlands 18,140 18,167International 4,055 7,485 22,195 25,652

Depreciation includes impairment in the amount of EUR 0.6 million (2013/14: EUR 11.5 million) relating to long-term impairment.

Converted to full-time equivalents (FTEs), the total number of employees is 13,063 (2013/14: 16,260).

* Operating income before interest, tax, depreciation and amortisation.


AUDIT FEESThe fees payable to BDO and other auditors pursuant to Section 382a, Book 2 of the Dutch Civil Code can be specified as follows:

Other auditors

BDO International

BDO NLTotalOther auditors

BDO International

BDO NL2014/15 2013/14

TAXThe effective tax rate for the 2014/15 financial year is 21.9% (2013/14: 20.5%).

REMUNERATION OF MANAGING DIRECTORS AND SUPERVISORY DIRECTORSThe income statement includes an amount, also covering pension contributions, of EUR 2.6 million (2013/14: EUR 2.2 million) for the remuneration of the current and former Managing Directors of Blokker Holding B.V. This includes the amount pursuant to Section 32bd of the Income Tax Act 1964 [Wet op de Loonbelasting 1964] [crisis tax].

For the remuneration of the Supervisory Directors of Blokker Holding B.V., an amount of EUR 189,000 (2013/14: EUR 191,000) was payable by the company for the 2014/15 financial year.

DECONSOLIDATION OF BUSINESS ACTIVITIESAt the beginning of the 2014/15 financial year, the managerial control over Casa Holding B.V. and its associates was transferred to an affiliated company outside the Blokker Holding B.V. group. In addition, the shares in Groenblok B.V. and its associates were sold effective 30 June 2014. On this basis, the above-mentioned companies are no longer included in the consolidation as of the dates stated.

The tables below and on the next page show the impact of this deconsolidation on various key data for both 2014/15 and 2013/14:

Please note: Figures for 2014/15 are exclusive of Casa (2013/14: EUR 138,000) and Groenblok (2013/14: EUR 25,000).

Casa Groenblokin thousands of euros


Audit of the financial statements 398 166 55 619 276 253 288 817Other audit tasks 16 16 7 7Remaining non-audit tasks 108 108 131 131Total 522 166 55 743 414 253 288 955

Total

24-01-2015 25-01-2014 24-01-2015 25-01-2014

Balance sheetTotal book value of the assets - 311,524 - 16,418 Total book value of the loan capital items - 42,540 - 21,362


Casa Groenblok

A loss of EUR 7.5 million was incurred following the sale of Groenblok B.V. and its associates. (accounted for under ‘Income from associates’); no tax is to be offset on this amount. The deconsolidation of Casa Holding B.V. had no effect on income in 2014.

The table below shows the effect of the deconsolidation of Casa and Groenblok on the key figures of Blokker Holding B.V. for 2014/15 and 2013/14.

Net revenue 2,117,923 19,942 2,097,981 2,502,591 380,792 2,121,799EBITDA * 37,746 -794 38,540 166,314 25,737 140,577Operating income (EBIT) -17,909 -1,320 -16,589 76,713 2,727 73,986Operating cash flow before working capital changes 55,570 46 55,524 159,291 27,725 131,566Net cash flow from operating activities 478 -1,433 1,911 185,321 36,663 148,658Solvency 42.2% - 42.2% 52.1% -5.4% 46.7%Number of branches 2,365 - 2,365 2,939 546 2,393

2014/15 2013/14Total excl.

Casa/Groenblok

Effect of deconsolidation

Financial statements

TaBLE SHOwING DECONSOLIDaTION OF BuSINESS aCTIVITIES (CONTINuED)


in thousands of eurosTotal excl.

Casa/Groenblok

Effect of deconsolidation

Financial statements

* Operating income before interest, tax, depreciation and amortisation.

2014/15 2013/14 2014/15 2013/14

Income statement

Net revenue • Retail Netherlands - - 19,563 40,998•Wholesale Netherlands - - 379 602• Retail international - 312,808 - -•Wholesale international - 26,384 - -

Costs - -330,319 -21,262 -47,746

EBITDA * - 29,581 -794 -3,844Operating income (EBIT) - 8,873 -1,320 -6,146

Income from ordinary operations before tax - 10,172 -1,486 -6,439

Tax - -2,606 367 1,601

Cash flowOperating cash flow before working capital changes - 32,217 46 -4,492Net cash flow from operating activities - 38,959 -1,433 -2,296Net cash flow from investment activities - -9,946 -449 -2,273Net cash flow from financing activities - -22,747 4,852 3,972


COMpaNY BaLaNCE SHEETaS aT 24 JaNuaRY 2015

in thousands of euros, after proposal for profit appropriation 24-01-2015 25-01-2014

aSSETSFixed assetsIntangible assets 2,257 260Property, plant and equipment 3,828 2,893Financial fixed assets 711,078 680,500 Current assetsOther receivables, prepayments and accrued income 25,992 12,106Cash and cash equivalents 38,718 47,584Total 781,873 743,343

LIaBILITIESShareholders’ equityPaid-up capital 25,000 25,000Premium reserve 114,427 114,427Other reserves 327,201 346,804 466,628 486,231 Provisions 8,507 13,295 Non-current liabilities 295,975 237,372

Current liabilitiesSuppliers 4,976 121Other liabilities, accruals and deferred income 5,787 6,324 10,763 6,445Total 781,873 743,343

COMpaNY INCOME STaTEMENTS FOR 2014/15

in thousands of euros 2014/15 2013/14

Results of associates after tax -20,420 54,346Net other income and expenses after tax 135 6,316Result after tax -20,285 60,662


NOTES TO THE COMpaNY BaLaNCE SHEET aS aT 24 JaNuaRY 2015

in thousands of eurosuizenden euro’s Total

INTaNGIBLE FIXED aSSETS Opening balanceCost price 260Cumulative depreciation - Book value 260 Changes during the financial yearInvestments 2,535 Depreciation -538Total changes 1,997 Closing balanceCost price 2,795Cumulative depreciation -538Book value 2,257

‘Intangible assets’ mainly relate to software/licenses and websites.

in thousands of eurosuizend Total

pROpERTY, pLaNT aND EQuIpMENT

Opening balanceCost price 3,746 691 4,437Cumulative depreciation -1,076 -468 -1,544Book value 2,670 223 2,893

Changes during the financial yearInvestments - 1,186 1,186 Disposals and impairments - -71 -71 Depreciation of disposals and impairments - 71 71 Depreciation -101 -150 -251Total changes -101 1,036 935

Closing balanceCost price 3,746 1,806 5,552Cumulative depreciation -1,177 -547 -1,724Book value 2,569 1,259 3,828

Other non-current operating assets

Land and buildings

aSSETS



FINaNCIaL FIXED aSSETS

AssociatesOpening balance 574,012Share in result -15,590Dividend -28,621Other changes 17,480Closing balance 547,281

Receivables from group companies/associatesOpening balance 106,488 Changes 50,665 Closing balance 157,153

Other receivablesOpening balance - Changes 6,644 Closing balance 6,644Total financial fixed assets at end of financial year 711,078

The other changes concern the reclassification of the earnings of associates with a negative net asset value to receivables from group companies/associates.

LIaBILITIES

SHaREHOLDERS’ EQuITYThe authorised capital on the balance sheet date totals EUR 100,000,000 and is divided into 90,000,000 shares, each with a nominal value of EUR 1, and 10,000,000 Class P shares, each with a nominal value of EUR 1. Of these shares, 22,500,000 ordinary shares and 2,500,000 Class P shares have been issued and paid-up.

The changes in shareholders’ equity are as follows:


Balance as at 26 January 2013 369,065 114,427 483,492Dividend from other reserves -22,338 - -22,338 Translation difference foreign associates 77 - 77 Opening balance 346,804 114,427 461,231

Profit appropriation -20,285 - -20,285Translation difference foreign associates 682 - 682Closing balance 327,201 114,427 441,628 Share capital 25,000 Total 466,628

Premium reserveOther reserves

An interest rate of 5% is calculated on long-term receivables from group companies/associates (2013: 5%). The other receivables, in the amount of approximately EUR 0.7 million, have a maturity of less than one year.


The company’s total loss (profit/loss after tax and direct movements in capital) is EUR 19.6 million (2013/14: EUR 60.7 million).

in thousands of eurosduizenden euro’s Total

Opening balance 13,295 Additions / withdrawals -4,788 Closing balance 8,507

The provisions almost exclusively concern deferred tax liabilities; EUR 2.8 million of these provisions are short term in nature, with the remaining portion expected to be of a long-term nature.

NON-CuRRENT LIaBILITIESThe bulk of the non-current liabilities has a term of up to five years. Of the total non-current liabilities, EUR 164.3 million (2013/14: EUR 165.9 million) relates to group companies at interest rates ranging from 1.0% to 2.2%.

The remaining debts concern debts to affiliated companies. The interest rate is fixed on a quarterly basis and comprises the average of the three-month and twelve-month Euribor rates at the start of each quarter (average for 2014/15: 0.33%; 2013/14: 0.375%).

No collateral has been provided for these liabilities.

INFORMaTION NOT SHOwN IN BaLaNCE SHEETLiability disclosures have been submitted for virtually all Dutch companies, on the basis of which Blokker Holding B.V. is liable for the payables arising from legal acts of these group companies. In this respect, the provisions of Section 2:403(1) of the Dutch Civil Code apply to the consolidated group companies.

The company and the various group companies form a Dutch tax entity for the purposes of corporation tax and VAT and are therefore jointly and severally liable for the tax liabilities of these tax entities.

RENT aND LEaSE COMMITMENTSAn amount of approximately EUR 665,000 million (2013/14: EUR nil) is payable in relation to long-term leasing contracts and leases. Contracts expire each year, and a number of contracts in effect at the balance sheet date have a remaining term of one to five years (total lease amount: approximately EUR 1.6 million).

BaNK GuaRaNTEES aND LETTERS OF CREDITAn amount of approximately EUR 2.4 million has been frozen in the bank accounts (2013: EUR 0) in connection with bank guarantees and letters of credit.

aVERaGE NuMBER OF EMpLOYEESAn average of 61 people were employed by the company during the year under review (2013/14: 42 people).

Amsterdam, 13 May 2015

w.g.Board of Directors Supervisory Board

R.E. Palmer, Chairman P.C. Klaver, ChairmanL.M. de Kool, Deputy Chairman A. BlokkerJ.W. Visser, CFO M.J. Poots-BijlT. Smit H.Th.E.M. Rottinghuis A.J.L. Slippens

The balance of the translation difference foreign associates is approximately EUR 0.7 million (2013/14: EUR 1.7 million).

pROVISIONS


OTHER INFORMaTION

REGuLaTIONS OF THE aRTICLES OF aSSOCIaTION FOR THE appROpRIaTION OF pROFITThe company’s issued capital is EUR 25 million, divided among two share classes. For the shares issued, the following summarised provisions apply with regard to the appropriation of profit. Allocation, payment and distribution of the profit to shareholders take place after approval of the financial statements that show the profit available for allocation, payment and distribution.

Profit distribution charged to a reserve takes place only insofar as the company’s shareholders’ equity exceeds the capital in issue plus the statutory reserves. Both share classes qualify for their share of the results in the same way. The General Meeting decides to distribute profit or to allocate this to a dividend reserve, which is allocated for each type of share. The General Meeting may decide to distribute the profit to the holders of one type of share, while a corresponding amount is set aside in a dividend reserves for the holders of the other share class.

Payments charged to a dividend reserve may be made at any time, but only pursuant to a resolution adopted by the General Meeting, either at the request of the meeting of the holders of the share class in question.

pROpOSED pROFIT appROpRIaTIONIn relation to the profit appropriation, the company proposes to pay out the profit as dividend. SpECIaL SuppORTBlokker Holding provided special support in 2014 to some of the following projects/foundations:

Helen Dowling Instituut, Stichting Sportclub voor Gehandicapten Gooi- en Eemland, VUmc CCA Project ‘vroegdiagnostiek dikke darmkanker’, IMC Weekendschool, Doe een wens Stichting Nederland, Go for Children, Stichting Kinderen Kankervrij (Kika), Het Leerorkest, onderzoek ziekte Parkinsonisme, Stichting Ambulance Wens and Klooster de Stad Gods – Zusters Augustinessen.


To: the General Meeting, Supervisory Board and Board of Directors of Blokker Holding B.V.

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Blokker Holding B.V., Amsterdam for the financial year ending on 24 January 2015, as set out in this Annual Report on pages 48 to 63, which comprise the consolidated and company balance sheet as at 24 January 2015, the consolidated and company income statements for 2014/15 and the notes, comprising a summary of the accounting policies and other explanatory information.

MaNaGEMENT’S RESpONSIBILITYManagement is responsible for the preparation and fair presentation of these financial statements and for the preparation of the management board report, both in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

auDITOR’S RESpONSIBILITYOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

An audit also includes evaluating the appropriateness of ac-counting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpINION wITH RESpECT TO THE FINaNCIaL STaTEMENTSIn our opinion, the financial statements give a true and fair view of the size and composition of Blokker Holding B.V. as at 24 January 2015 and of its result for 2014/15 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

REPORT ON OTHER LEGAL OR REGULATORY REQUIREMENTS

Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the management board report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code.

Amstelveen,13 May 2015

BDO Audit & Assurance B.V.On its behalf,

A.D. den Braber, Chartered Accountant

INDEpENDENT auDITOR’S REpORT


FaCTS aND FIGuRES

The 2014/15 reporting year runs from 26 January 2014 to 24 January 2015 (inclusive). This report contains the results of the combined group divisions in the Netherlands and internationally for this period. All financial years cover a period of 52 weeks.

In 2014/15, Casa and Tuincentrum Overvecht were deconsolidated as a result of the transfer of managerial control and the sale of the business, respectively. Novalux Estonia has been a wholly-owned subsidiary since the 2011/12 financial year (previously a joint venture) and has been fully included in the financial data since 2011/12 (previously 50%). The Estonian business was sold in early 2013. * Operating income before tax, depreciation and amortisation.

** Adjusted for the consolidation of Casa 46.7%.

amounts in millions of euros 2014/15 2013/14 2012/13 2011/12 2010/11

Retail sales 2,636 3,120 3,234 3,367 3,433 Net revenue 2,118 2,503 2,609 2,723 2,770

EBITDA * 38 166 166 249 291 Operating income (EBIT) -18 77 82 167 211 Financial income and expenses -2 -1 - - -2 Income from ordinary operations before tax -20 76 82 167 209 Tax 5 -15 -18 -39 -51 Income after tax -15 61 64 128 158 Income from associates -5 - - - - Net income -20 61 64 128 158

Depreciation 56 89 84 82 80 Cash flow from operating activities 0 185 117 260 224 Investments in intangible assets and property, plant and equipment 66 68 69 75 90 Free cash flow -66 117 48 185 134 Group capital 467 486 508 499 518

Result of associates after tax -4.1% 12.0% 12.8% 24.7% 33.0%Solvency 42.2% 52.1% 52.1% 52.1% 52.1% Tax burden 21.9% 20.5% 22.2% 23.4% 24.4% Income as a % of net revenue -0.9% 2.4% 2.5% 4.7% 5.7%

Number of employees 22,195 25,652 25,985 25,547 25,094

STORES Company-owned stores – Netherlands 1,431 1,460 1,442 1,411 1,372 Company-owned stores – International 613 1,063 1,065 1,047 1,039 Franchise stores – Netherlands and international 321 416 436 449 473 NUMBER OF STORES BY RETAIL FORMATHOuSEHOLD Blokker 813 832 836 839 835 Xenos 252 229 212 202 192 Marskramer 206 220 234 241 240 Big Bazar 131 113 70 39 31 Cook&Co 27 27 29 26 24 Novy 25 31 35 40 48 Budg€t 13 25 42Casa 526 523 516 519 Novalux 10 11 13

1,467 2,003 1,991 1,914 1,902

TOYSIntertoys 303 305 306 307 305Bart Smit 235 250 252 248 247Maxi Toys 179 183 189 182 177 E-Plaza 6 58 57 717 738 753 795 786 LIVING & GaRDENLeen Bakker 181 178 180 178 176Tuincentrum Overvecht 18 19 20 20Diervoordeel 2 181 198 199 198 196Total 2,365 2,939 2,943 2,907 2,884

**

KEY DaTa


FaCTS aND FIGuRESNUMBER OF STORES Household Toys Living Total

Year-end 2014/15 Company-owned stores 1,282 590 172 2,044Franchise stores 185 127 9 321Total 1,467 717 181 2,365Number of webshops 3 6 2 11 Year-end 2013/14 Company-owned stores 1,730 604 189 2,523Franchise stores 273 134 9 416Total 2,003 738 198 2,939Number of webshops 3 5 3 11 Openings 2014/15 Company-owned stores 65 8 3 76Franchise stores 4 1 1 6Total 69 9 4 82Number of webshops 1 1 Closures 2014/15 Company-owned stores 55 22 1 78Franchise stores 24 8 1 32Total 79 30 1 110Number of webshops -

Deconsolidation 2014/15 Company-owned stores 458 19 477Franchise stores 68 1 69Total 526 20 546Number of webshops 1 1

NUMBER OF EMPLOYEES Number of employees Number of FTEs

2014/15 2013/14 2014/15 2013/14

Household 14,405 14,087 7,953 8,080Toys 5,132 5,236 3,287 3,361Living 2,253 2,280 1,596 1,634Retail 21,790 21,603 12,836 13,075Wholesale and holding company activities 75 56 72 52Total number of employees 21,865 21,659 12,908 13,127Employees of the franchise stores 2,400 2,550 Total number of employees 24,265 24,209 Netherlands 17,810 17,424 9,912 10,025International 4,055 4,235 2,996 3,102Total number of company employees 21,865 21,659 12,908 13,127

Adjustments were made during the 2014/15 financial year for Casa and Tuincentrum Overvecht – adding up to a total of 21,865 of the group’s own employees. This represents a slight increase from the 2013/14 financial year.

Divided across the three sectors, the two wholesalers and the holding company, the employees are employed as follows*:

* Excluding Casa and Tuincentrum Overvecht.


aDDRESSES

HOUSEHOLD

BIG BaZaR B.V.Van der Madeweg 9

NL-1114 AM Amsterdam-Duivendrecht

The Netherlands

P.O. Box 94072

NL-1090 GB Amsterdam

The Netherlands

T +31 (0)20 5683500

E [email protected]

I www.bigbazar.eu

BLOKKER B.V.Van der Madeweg 13-15


The Netherlands

P.O. Box 94072


The Netherlands

T +31 (0)20 5683568

E [email protected]

I www.blokker.nl

BLOKKER N.V.Antwerpsestraat 36

B-2500 Lier

Belgium

T +32 (0)3 2882200

E [email protected]

I www.blokker.be

BuDG€TVan der Madeweg 9


P.O. Box 94072


The Netherlands

T +31 (0)20 5683500

E [email protected]

I www.budgetwinkel.eu

COOK&CO Schutweg 8

NL-5145 NP Waalwijk

The Netherlands

P.O. Box 1038

NL-5140 CA Waalwijk

The Netherlands

T +31 (0)416 675299

E [email protected]

I www.cookandco.nl

MaRSKRaMER B.V.Van der Madeweg 11


The Netherlands

P.O. Box 94072


The Netherlands

T +31 (0)20 5683100

E [email protected]

I www.marskramer.nl

NOVYVan der Madeweg 11


The Netherlands

P.O. Box 94072


The Netherlands

T +31 (0)20 5683100

I www.novy.nl

XENOS B.V.Schutweg 8

NL-5145 NP Waalwijk

The Netherlands

P.O. Box 1038

NL-5140 CA Waalwijk

The Netherlands

T +31 (0)416 674747

E [email protected]

I www.xenos.nl

wHOLESaLERS

ELEKTROBLOK B.V.Van der Madeweg 11


The Netherlands

P.O. Box 94072


The Netherlands

T +31 (0)20 5683556

E [email protected]

I www.elektroblok.nl

TREND CENTER B.V.Van der Madeweg 13-15


The Netherlands

T +31 (0)20 5683356

E [email protected]

I www.trend-center.nl

TOYS

BaRT SMIT B.V.Bellstraat 3-4

NL-1131 JV Volendam

P.O. Box 69

NL-1130 AB Volendam

The Netherlands

T +31 (0)299 399599

E [email protected]

I www.bartsmit.com

INTERTOYS HOLLaND B.V.Handelsweg 15

NL-2742 RD Waddinxveen

The Netherlands

P.O. Box 29

NL-2740 AA Waddinxveen

The Netherlands

T +31 (0)180 333500

E [email protected]

I www.intertoys.nl

MaXI TOYS SaRue Athena 4

B-7110 Houdeng-Goegnies

Belgium

T +32 (0) 64516100

E [email protected]

I www.maxitoys.com

LIVING

LEEN BaKKER B.V.Karperweg 3

NL-4941 SH Raamsdonksveer

The Netherlands

P.O. Box 43

NL-4940 AA Raamsdonksveer

The Netherlands

T +31 (0)162 583100

E [email protected]

I www.leenbakker.nl

LEEN BaKKER BELGIë N.V.Terlindenhofstraat 36

B-2170 Merksem

Belgium

T +32 (0)3 6418500

E [email protected]

I www.leenbakker.be

BLOKKER HOLDING B.V.

Head office

Hessenbergweg 8

NL-1101 BT Amsterdam-Zuidoost

P.O. Box 22591

The Netherlands

NL-1100 DB Amsterdam-Zuidoost

The Netherlands

T +31 (0)20 3589000

E [email protected]

I www.blokkerholding.nl

Real estate

Naarderstraat 50

NL-1251 BD Laren

The Netherlands

P.O. Box 6

NL-1250 AA Laren

The Netherlands

T +31 (0)35 5393344

Nextail

Hessenbergweg 8

NL-1101 BT Amsterdam-Zuidoost

The Netherlands

P.O. Box 22591

NL-1100 DB Amsterdam-Zuidoost

The Netherlands

T +31 (0)20 3589999

E [email protected]

I www.nextail.nl

Shared Service Center Quality

Van der Madeweg 11


The Netherlands

P.O. Box 94072


The Netherlands

T +31 (0)20 5683568

coloPHon

Concept and designMonter, Amsterdam

PhotographyArchive images Blokker HoldingIvo de BruijnMariëlle Penrhyn LoweSebastiaan Westerweel

Copy and editingJaco HavelaarPeter KrennSandra MaasAstrid Nissen Roland PalmerNatascha SandersJos van de SchraafMichiel TolsmaJeroen Visser

PrintingDrukkerij Tesink, Zutphen

This report is printed on FSC-certified paper:300 gr. cardboard, Matterhorn and 130 gr. semi matt mc.

Blokker Holding B.V. has a closed structure and formal reporting on the 2014/15 financial year takes place as required by law and the Articles of Association. This internal annual report is intended for executive staff, franchisees, participants in the Participation Plan and relations who are closely involved in the development of the business. All rights reserved. No part of this publication may be reproduced, saved in an automated data file or disclosed in any way or form, either electronically, mechanically, through photocopying, recording or in any other way without the prior written consent of Blokker Holding B.V.

ANNUAL REPORT BLOKKER HOLDING 20...

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