PRESS RELEASE

PRESS RELEASE
Maastricht-Airport, the Netherlands
July 30, 2014
HALF-YEAR REPORT 2014
Significant turnover growth Fashion (up 10.1%) and clear improvement in
underlying operating performance

Increase in turnover Macintosh with € 25.8 million (up 6.8%) to € 405.4 million.

Fashion core1 outperforms shoe market with a 12.4% increase in turnover; brick-and-mortar
sales up 9.0% and online sales up 47.5%.

Lower turnover Living with upward trend in Q2.
New financing package of € 180 million lays solid foundation for further execution of
Rebalancing for Profitable Growth strategy

1.
“Core” refers to the 768 stores in Fashion as specified in the Rebalancing for Profitable Growth strategy, plus the
online/cross-channel activities.
Frank De Moor, CEO:
“Over the past few years, we have worked hard to build the new Macintosh cross-channel proposition.
Strong shoe formats with appealing offerings and online and brick-and-mortar stores form the heart of
this proposition. What we have been able to establish recently is that both online and offline customers
are responding well to the changes that were initiated. Our growth figures were strong and we
managed to realise a historical high market share of 12.9% in “shoes” in the Dutch shoe market."
Kurt Staelens, CEO as of 1 August 2014
“Because of the developments in turnover and earnings we have seen over the past months, I am
confident that our Rebalancing for Profitable Growth strategy is based on the right priorities. The
recently announced new financing package will help us to continue our strategic course with vigour,
allowing us also to fully capitalise on the momentum of rising consumer confidence."
1.
Turnover from core activities up 8.5%, rising by € 29.0 million to € 370.1 million
Offline1
Total
H1 14
H1 13
H1 14
H1 13
H1 14
H1 13
H1 14
H1 13
Fashion core
286.2
254.6
258.5
237.3
24.2
16.4
3.5
0.9
Living core
83.9
86.5
82.3
85.0
1.6
1.6
0
0
Total core
370.1
341.1
340.8
322.3
25.8
18.0
3.5
0.9
Non-core
35.3
38.5
35.3
38.5
0
0
0
0
405.4
379.6
376.1
360.8
25.8
18.0
3.5
0.9
Total turnover
1
2
Cross-channel2
Turnover (in €
millions)
Online
Offline
Turnover from own brick-and-mortar stores and wholesale (the latter to a limited extent).
Turnover from all sales channels other than own brick-and-mortar stores, subdivided by:
(a) purely online sales via Intreza, own online stores operated by the formats and third-party online platforms; and
(b) offline sales via concessions, shops-in-shops and other partnerships with third parties.
Macintosh Retail Group NV – Amerikalaan 100, 6199 AE Maastricht-Airport - + 31 (0)43-3280780 www.macintosh.nl
-1-

Turnover Fashion core up 12.4% (i.e. € 31.6 million of which € 2.9 million was attributable to
currency effects), reaching € 286.2 million, thanks to higher sales conversion rates and a rise in
average ticket amount. Turnover Fashion NL was up 13.3%, Fashion UK 18.0% (excluding currency
effect 13.9%) and Fashion BeLux was up 4.2%.

Turnover Fashion core in brick-and-mortar stores up 9.0% (up € 21.2 million) to € 258.5 million.
Online turnover Fashion rose by 47.5% (up € 7.8 million), landing at € 24.2 million.

In all markets but in the Netherlands and the UK in particular, Fashion clearly outperformed the
shoe market, offline as well as online.
Developments in turnover
Shoes, exclusive of clothing,
accessories, etc.
1
2
The Netherlands1
Belgium1
UK1
Market
MRG
Market
MRG
Market
MRG
Value
Total
2.1%
21.8%
3.3%
5.8%
2.0%
11.8%
Volume
Total
- 0.3%
17.5%
- 0.3%
4.7%
- 2.1%
2.2%
Price
Total
2.5%
3.7%
3.7%
1.0%
4.1%
9.4%
Value
Offline2
- 1.9%
19.2%
0.4%
4.8%
- 0.2%
10.5%
Value
Online2
28.1%
53.5%
35.1%
42.9%
9.7%
46.5%
Market data from GfK Netherlands and Belgium through May; UK (Kantar) from December 23, 2013 to June 8, 2014.
Macintosh figures are for comparable periods.
Macintosh figures at aggregate level are comparable with market sources on a one-on-one basis, but the division
between online/offline is not.

Turnover Living (Kwantum) core was down € 2.6 million (– 3.2%), showing a clear positive trend
in Q2, in a home decoration market which, according to Statistics Netherlands (CBS), contracted
by 2.0%. Kwantum realised a higher market share in its core groups wall and window coverings
and flooring.
2.
Operating EBIT
EBIT (in € millions)
H1 14
H1 13
- 8.1
- 10.7
0.7
1.2
- 3.7
- 1.4
- 11.1
- 11.0
- 2.1
- 2.0
Operating EBIT
- 13.2
- 13,0
Exceptional items2
- 14.3
- 2.3
EBIT
- 27.5
- 15.3
Fashion core
Living core
Other1
Operating EBIT core
Operating EBIT non-core
1
2

Group expenses not directly attributable to the segments.
See explanation in annex.
The operating EBIT of Macintosh was on the level of H1 2013, but was underlying clearly better
because of incidental effects in H1 2013 (as announced in half-year report 2013) having a positive
impact of € 3.9 million in that year.
Macintosh Retail Group NV – Amerikalaan 100, 6199 AE Maastricht-Airport - + 31 (0)43-3280780 www.macintosh.nl
-2-

The underlying operating EBIT of Fashion was in H1 2014 € 4.1 million better. Excluding the
incidental effect of € 1.5 million in H1 2013, the operating EBIT of Fashion was € 2.6 million better
in H1 2014. A higher absolute gross margin compensated higher sales-supporting expenditures
(as foreseen in Rebalancing for Profitable Growth).

A higher relative gross margin partially compensated pressure on turnover at Kwantum. The
operating EBIT of Kwantum core was positive (€ 0.7 million) but € 0.5 million lower than in H1
2013.

In the operating EBIT of the non core stores in H1 2014 a release was made of € 6.0 million of the
provision (H1 2013: € 6.7 million).
3.
Store evolution

As part of the Rebalancing for Profitable Growth programme, 54 stores were added to the list of
103 non-core stores in mid-April 2014.

A cautious approach was taken to closing non-core stores in H1 2014 because of the cash effects
in anticipation of the refinancing. 13 non-core stores were closed in H1 2014.
4.
Net result Macintosh
Net result (in € millions)
H1 14
H1 13
EBIT
- 27.5
- 15.3
Finance costs
- 3.0
- 1.2
Income tax expense
- 0.7
+ 3,3
- 31.2
- 13.2
-
- 4.1
- 31.2
- 17.3
Net result on continuing operations
Net result on discontinued operations1
Total net result
1

2013: operating result and transaction result from Halfords (sold on June 30, 2013).

Finance costs were € 1.8 million higher, of which € 0.9 million was due to the higher liquidity
requirement and related increase in interest payable while € 0.9 million was due to other effects.
The net effect of exceptional items on the net result was - € 14.3 million.
5.
Cash flows and ratios
(in € millions)
June 30, 2014
June 30, 2013
- 26.9
- 12.4
Capex
- 5.2
- 5.3
Net debt
80.1
59.5
Net debt/EBITDA ratio2
4.4
1.8
Interest coverage ratio2
7.2
11.2
Operating cash flow
1
2
1
2013: excluding Halfords.
According to bank definitions
Macintosh Retail Group NV – Amerikalaan 100, 6199 AE Maastricht-Airport - + 31 (0)43-3280780 www.macintosh.nl
-3-

In H1 2014, the operational cash flow decreased by € 14.5 million on H1 2013 due to, on balance,
planned expenditures on product availability and appealing assortments as defined in Rebalancing
for Profitable Growth (- € 12.1 million), taxes (- € 6.2 million) and operational efficiencies. As a
consequence net debt was up € 20.6 million on H1 2013.

The net debt/EBITDA ratio and the interest coverage ratio remained within the bandwidths
adopted in February 2014. The EBITDA floors agreed with the bank were achieved as well.
6.
Refinancing

A new financing package totalling € 180 million was agreed with majority shareholders and the
banks in mid-July 2014. New shares (10%) have already been issued (proceeds: € 19.5 million).
The details of the subordinated structured loan by shareholders in the sum of € 20 million and the
new financing (roll-over facility) by the banking consortium of € 140 million will be fleshed out by
the end of September 2014 (for a description of key conditions, see the annexe).

The new financing package offers a solid foundation for the further implementation of the
Rebalancing for Profitable Growth strategy.

The current view is that the finance costs will be higher by about € 2 million in 2014 than they
were in 2013 due, in particular, to the higher liquidity requirement and the related increase in
interest rate. The new financing arrangements will have a minor impact in 2014. The step-up in
finance costs for 2015 is expected to amount to about € 2 million mainly as a result of the effects
of the new financing arrangements.
7.
Outlook for H2 2014

Consumer confidence and spending are showing an upward trend.

The second half of the year is traditionally the most important for Macintosh with usually a higher
turnover and a substantially better operating EBIT than in the first half of the year.

Although it is not a given that turnover will grow at the same pace as in H1, turnover from core
stores is expected to be higher in H2 than in the same period in 2013.

The relative cost increases in H2 2014 are expected to be less than in H1 2014 because of the fact
that actions were already implemented in H2 2013.

The secured refinancing offers the opportunity for accelerated implementation of store closures
and other measures from Rebalancing for Profitable Growth. About 35 stores are expected to be
closed in H2 2014.

Cost reduction programmes will be worked out to bring about structural cost cuts of
approximately € 10 million per year with effect from 2016.

Despite the fact that the Managing Board is clearly confident, no pronouncements are made
about operating EBIT for H2 2014.
Managing Board Responsibility Statement
The semi-annual figures have not been audited. The Managing Board hereby declares that (a) the halfyear financial statements give a true and fair view of the assets, liabilities, financial position and
earnings of Macintosh Retail Group NV and those of its consolidated entities, and (b) the half-year
report 2014 gives a true and fair view of developments in the first half of 2014. In the Managing Board's
opinion, the internal control structure provides reasonable assurance that the financial reports are free
of material misstatement.
Macintosh Retail Group NV – Amerikalaan 100, 6199 AE Maastricht-Airport - + 31 (0)43-3280780 www.macintosh.nl
-4-
No key events occurred or transactions were conducted in the first half of 2014 that had a significant
impact on the risks incurred by Macintosh Retail Group. The Fashion and Living segments in which
Macintosh Retail Group operates continue to be sensitive to cyclical movements and dependent on
consumer confidence. In a difficult market, this potentially results in commercial and market risks over
which Macintosh Retail Group has only limited control.
Maastricht-Airport, the Netherlands, July 30, 2014
The Managing Board of Macintosh Retail Group NV
The semi-annual figures, which will be presented during the analysts' meeting to be held today, will be available
on www.macintosh.nl from 9:30 a.m.
For more information, please contact:
+31 (0)43-3280728
T.L. Strijbos (CFO)
This press release is also available on the website of Macintosh Retail Group NV: www.macintosh.nl
Should different interpretations arise between the Dutch and the English version of this press release, the Dutch language version prevails
Macintosh wants to offer all consumers wishing to buy shoes or home decorations a unique offline and online shopping
experience, focusing on convenience, service and emotion combined with familiar brands, excellent collections and customer
knowledge, to exceed the expectations of customers, and to ensure customers will return to one of our store formats for
their next purchase.
Macintosh has over 1,000 stores in the Benelux and the UK. Fashion comprises around 900 shoe stores operating under the
brands Brantano, Dolcis, Invito, Jones Bootmaker, Manfield, PRO 0031, Scapino and Steve Madden in the Benelux and the
UK. Living consists of around 110 Kwantum home decorations stores in the Netherlands and Belgium.
Macintosh Retail Group NV – Amerikalaan 100, 6199 AE Maastricht-Airport - + 31 (0)43-3280780 www.macintosh.nl
-5-
Annexe to half-year report 2014
MACINTOSH RETAIL GROUP NV
Remark:
- The half-year figures have not been audited.
Condensed consolidated income statement for the first half-year
(in millions of euros)
Note*
Continuing operations
Net turnover
first half 2014
Excluding
exceptional
items
Exceptional
items
first half 2013
Total
Excluding
exceptional
items
Exceptional
items
Total
405.4
-
405.4
379.6
-
379.6
Cost of sales
Gross margin on turnover
- 199.0
-
- 199.0
- 185.7
-
- 185.7
206.4
-
206.4
193.9
-
193.9
As a percentage of turnover
50.9%
50.9%
51.1%
3/6a
Selling expenses
51.1%
- 173.6
-
- 173.6
- 167.0
-
- 167.0
- 46.0
-
- 46.0
- 39.9
-
- 39.9
Total expenses
- 219.6
-
- 219.6
- 206.9
-
- 206.9
As a percentage of turnover
- 54.2%
- 54.2%
- 54.5%
General administrative expenses
- 54.5%
Other operating expenses
5
-
- 14.3
- 14.3
-
- 2.3
- 2.3
Operating result
3
- 13.2
- 14.3
- 27.5
- 13.0
- 2.3
- 15.3
- 6.8%
- 3.4%
As a percentage of turnover
- 3.3%
Financial income and expense
- 4.0%
- 3.0
-
- 3.0
- 1.2
-
- 1.2
- 16.2
- 14.3
- 30.5
- 14.2
- 2.3
- 16.5
- 0.7
-
- 0.7
2.8
0.5
3.3
- 16.9
- 14.3
- 31.2
- 11.4
- 1.8
- 13.2
-
-
-
- 4.0
- 0.1
- 4.1
Net result
- 16,9
- 14.3
Net result attributable to holders of ordinary
- 16,9
- 14.3
shares
* The numbers refer to the notes on page 5 and further of this annexe.
- 31.2
- 15.4
- 1.9
- 17.3
- 31.2
- 15.4
- 1.9
- 17.3
Result before taxation
Income tax expense
6b
Net result on continuing operations
Net result on discontinued operations
Earnings per share first half-year*
(in euros)
first half 2014
first half 2013
Net result attributable to holders of ordinary
shares
- Total
- 0.66
- 0.56
- 1.22
- 0.60
- 0.08
- 0,68
- Continuing operations
- 0.66
- 0.56
- 1.22
- 0.45
- 0.07
- 0,52
-
-
-
- 0.15
- 0.01
- 0.16
Diluted earnings attributable to holders of
ordinary shares
- Total
- 0.66
- 0.56
- 1.22
- 0.60
- 0.08
- 0,68
- Continuing operations
- 0.66
- 0.56
- 1.22
- 0.45
- 0.07
- 0,52
-
-
-
- 0.15
- 0.01
- 0.16
- Discontinued operations
- Discontinued operations
Weighted average number of shares outstanding (x 1,000)
25 532
25 441
Diluted number of shares outstanding (x 1,000)
25 532
25 441
*
Per-share information based on number of shares after share issue in July 2014.
1
Condensed consolidated balance sheet
(in millions of euros)
Assets
30.06.2014
31.12.2013
30.06.2013
35.6
114.6
61.5
0.0
6.4
4.4
222.5
35.3
114.0
68.6
0.0
6.4
4.7
229.0
34.9
113.4
71.5
0.0
6.5
2.9
229.2
221.1
17.1
0.2
10.8
249.2
216.5
20.5
27.5
264.5
201.3
24.1
0.5
21.3
247.2
Total
471.7
493.5
476.4
Equity and liabilities
Equity attributable to shareholders of the company
As a % of balance sheet total
165.2
194.4
188.8
35.0%
39.4%
39.6%
30.8
0.2
26.7
0.1
57.8
29.8
0.2
27.4
0.4
57.8
35.3
76.8
1.0
27.1
0.6
140.8
89.8
0.9
9.5
147.2
1.3
72.0
0.9
11.2
155.5
1.7
2.7
0.2
8.2
135.2
0.5
248.7
241.3
146.8
471.7
493.5
476.4
90.9
80.1
73.1
45.6
80.7
59.5
Non-current assets
Intangible assets
Goodwill
Property, plant and equipment
Investment in associates
Loans to associates
Other financial assets
Current assets
Inventories
Receivables
Derivative financial instruments
Cash and cash equivalents
Note*
7a
7b
7c
7d
8
Non-current liabilities
Provisions
Long-term borrowings
Finance lease obligations
Other non-current liabilities
Derivative financial instruments
Current liabilities
Current account overdrafts with credit institutions
Other interest-bearing debts
Current portion of provisions
Other current liabilities
Derivative financial instruments
7d
7d
Total
Interest-bearing debt
Net debt
*
7e
The numbers refer to the notes on page 5 and further of this annexe.
2
Consolidated statement of changes in equity for the first half-year
(in millions of euros)
Total
Issued
capital
Share
premium
Unrealised
exchange
differences
Unrealised
hedge gains
and losses
Retained
earnings1
Net result
At January 1, 2013
210.7
9.7
4.0
- 1.0
- 1.8
325.8
- 126.0
Changes in first half-year 2013:
Net result
Other comprehensive income
Income tax effect
Total comprehensive income
- 17.3
- 0.2
- 0.2
- 17.7
-
-
- 1.6
- 1.6
1.4
- 0.2
1.2
-
- 17.3
- 17.3
Equity settled share-based payments
Appropriation of result
0.4
-
-
-
-
-
0.4
- 126.0
126.0
Dividend distribution for 2012 in cash
Total of other changes
- 4.6
- 4.2
-
-
-
-
- 4.6
- 130.2
126.0
188.8
9.7
4.0
- 2.6
- 0.6
195.6
- 17.3
Total
Issued
capital
Share
premium
Unrealised
exchange
differences
Unrealised
hedge gains
and losses
Retained
earnings
Net result
At January 1, 2014
194.4
9.7
4.0
- 2.2
- 1.7
196.7
- 12.1
Changes in first half-year 2014:
Net result
Other comprehensive income
Income tax effect
Total comprehensive income
- 31.2
2.0
- 0.2
- 29.4
-
-
1.1
1.1
0.9
- 0.2
0.7
-
- 31.2
- 31.2
0.2
0.2
-
-
-
-
0.2
- 12.1
- 11.9
12.1
12.1
At June 30, 2013
Equity settled share-based payments
Appropriation of result
Total of other changes
At June 30, 2014
165.2
9.7
4.0
- 1.1
- 1.0
184.8
- 31.2
1
Including - € 4.2 million actuarial gains and losses. As from January 1, 2013 no distinction is made between cumulative actuarial gains and
losses and retained earnings.
Consolidated statement of comprehensive income for the first half-year
(in millions of euros)
Net result for the period
Other comprehensive income:
Net change in cash flow hedges
Income tax effect
Exchange gains and losses on investments in associates
Comprehensive income to be reclassified to profit or loss in subsequent periods
first half 2014
first half 2013
- 31.2
- 17.3
0.9
- 0.2
0.7
1.4
- 0.2
1.2
1.1
- 1.6
1.8
- 0.4
Share of comprehensive income of associates
Total comprehensive income
- 29.4
- 17.7
Attributable to holders of ordinary shares
- 29.4
- 17.7
3
Condensed consolidated cash flow statement for the first half-year
(in millions of euros)
Note*
first half 2014
first half 2013
- 30.5
- 16.5
Cash flow from ordinary activities
Income tax (payment) refund
3.0
18.4
- 14.1
- 1.7
0.2
- 24.7
- 2.2
1.2
10.8
- 2.4
- 2.0
- 7.8
0.3
- 16.4
4.0
Cash flow from operating activities:
- Continuing operations
- Discontinued operations
- 26.9
-
- 12.4
- 1.7
- 26.9
- 14.1
Result on continuing operations before taxes
Adjusted for:
- finance revenue and costs
- depreciation, amortisation and impairment
- gains/losses on non-current assets sold
- changes in working capital
- changes in provisions
- other
Net cash flow from operating activities
Investments in fixed assets
Disposals of fixed assets
- 5.2
-
- 5.3
3.8
Cash flow from investing activities:
- continuing operations
- discontinued operations
- 5.2
-
- 1.5
- 5.3
Net cash flow from investing activities
- 5.2
8b
- 6.8
Balance of borrowings (repayments)
Interest received on loans to associates
Dividends paid
Staff options exercised
Interest paid
17.7
0.2
0.1
- 2.6
33.8
- 4.6
0.1
- 1.4
Cash flow from financing activities:
- continuing operations
- discontinued operations
15.4
-
27.9
1.9
Net cash flow from financing activities
*
8a
15.4
29.8
Change in net cash and cash equivalents
- 16.7
8.9
Cash and cash equivalents at January 1
27.5
12.4
Cash and cash equivalents at June 30
10.8
21.3
8c
The numbers refer to the notes on page 5 and further of this annexe.
4
Notes to the 2014 half-year figures of Macintosh Retail Group NV
1.
General
All amounts are in millions of euros.
Macintosh Retail Group NV’s registered office is in Maastricht, the Netherlands. Its place of business is
located at Amerikalaan 100, 6199 AE Maastricht-Airport, the Netherlands.
The half-year figures relate to the period January 1 through June 30.
2.
Accounting policies
In line with the 2013 financial statements, the 2014 half-year figures have been drawn up in accordance
with the International Financial Reporting Standards (IFRS) adopted by the European Union. By drawing up
the half-year figures, the same accounting policies have been applied as used in the 2013 annual report,
apart from the changes resulting from new and/or amended standards and interpretations referred to
below. The half-year is a brief report; it does not contain all the information and disclosures required for
full-year financial statement.
The half-year report should therefore be read in conjunction with the 2013 financial statements.
This half-year report has been draw up in accordance with IAS 34 “Interim Financial Reporting”.
New and amended standards and interpretations applied to the half-year figures
The following new and/or amended standards and interpretations relevant to Macintosh Retail Group were
applied for the first time in the half-year report for 2014:
 IFRS 10:
Consolidated financial statements
This is a new standard that supersedes IAS 27 in part and SIC 12 in full. This new standard
contains a new definition of “control”, but will not impact Macintosh's financial position
or earnings given that Macintosh only has wholly owned subsidiaries.
 IFRS 11:
Joint Arrangements
This is a new standard replacing IAS 31 and SIC 13, containing rules on the recognition of
joint control. Macintosh Retail Group currently has no joint arrangements with other
entities.
 IFRS 12:
Disclosure of Interests in Other Entities
This is a new standard containing detailed rules on disclosure of all types of interests in
other entities. The standard only affects disclosures, but has no impact on Macintosh's
financial position or earnings.
 IAS 32:
Financial Instruments: Presentation (revised)
The revision concerns a clarification of one of the netting requirements, i.e. that of ”a
legally enforceable right to set off recognised amounts”. The revision does not affect
Macintosh's financial position or earnings as at June 30.
 IAS 36:
Impairment of Assets (revised)
As a result of the introduction of IFRS 13, the disclosure requirement for net realisable
value goes beyond what was envisaged. The revision has been amended in this regard.
5

IAS 39:

IFRIC 21:
The revision does not affect Macintosh's financial position or earnings, but it may have an
impact on its disclosures.
Financial Instruments: Recognition and Measurement (revised)
This revision concerns an amendment of the standard to include novation of over-thecounter derivatives and continuing designation for hedge accounting. The amendment
allows for the continuation in certain circumstances of hedge accounting upon novation
of a hedging instrument. The revision does not affect Macintosh's financial position or
earnings.
Levies
This interpretation provides clarity as to the timing of the recognition of a government
levy. This interpretation not only covers accounting for a liability to pay a levy if that
liability is within the scope of IAS 37, but also addresses accounting for a liability to pay a
levy whose timing and amount is certain. This clarification has a minimal effect on
Macintosh's financial position or earnings.
New and amended standards and interpretations applicable to future accounting periods
The following new and/or amended standards and interpretations may become applicable to Macintosh
Retail Group in future accounting periods:
 IFRS 9:
Financial Instruments (financial year 2018, not yet endorsed by the EU)
This is a new standard that will eventually supersede IAS 39. Phase 1 concerns an entirely
new framework for classifying and measuring financial instruments. The amendment will
affect classification, but not measurement.
 IFRS 15:
Revenue from Contracts with Customers (financial year 2017)
This is a new standard that will eventually supersede IAS 18, IAS 11, SIC 31, IFRIC 13 and
IFRIC 18. The standard introduces a five-step plan for recognising revenue from contracts
with customers; it is set to have a particularly significant effect on the timing and amount
of revenue recognition. This revision will have virtually no effect on Macintosh's financial
position or earnings.
 IAS 19:
Employee Benefits (July 1, 2014, not yet endorsed by the EU)
This amendment concerns the timing of the recognition of employee or third-party
contributions to defined benefit plans. This revision is not expected to affect Macintosh's
financial position or earnings.
Improvements in IFRSs Cycle 2010-2012 and cycle 2011-2013 (published in December 2013)
The IASB published two annual improvement cycles to its standards and interpretations in December 2013,
with a view to removing inconsistencies and clarifying wordings. The improvements are effective for
accounting periods beginning on or after July 1, 2014.
 IFRS 2:
Share-based Payment
This improvement concerns the tightening of the definition of “vesting condition”, which
provides clarity as to the correlation between performance conditions and the service
condition. This clarification will have a minimal effect on Macintosh's financial position or
earnings.
 IFRS 3:
Business Combinations
The improvement brings two clarifications, i.e.:
- contingent considerations that are presented as an asset or liability should be
subsequently measured at fair value at each period end.
6
 IFRS 8:
 IFRS 13:
 IAS 24:
3.
- a change in scope so that joint arrangements are not in scope of this standard.
This improvement will be implemented as appropriate.
Operating Segments
These improvements are:
- a broadening of disclosures relating to the assessment management has made with
respect to aggregation criteria.
- a clarification of the disclosures on reconciliation of the total of reportable segment
assets to the entity's total assets.
This improvement will be applied.
Fair Value Measurement:
The improvement brings two clarifications, i.e.:
- measurement of short-term receivables and payables with no stated interest rates.
They can be held at invoice amounts when the effect of discounting is immaterial.
- broadening of the exception for portfolios (Section 52). This broadening relates to all
contracts recognised in accordance with IAS 39 or IFRS 9.
This improvement will not affect Macintosh's financial position or earnings.
Related-party Disclosures
This improvement clarifies that a management entity, providing key management
personnel services to a reporting entity, qualifies as a related party. This improvement will
not affect Macintosh's financial position or earnings.
Segment information
For management purposes, the group is divided into segments, based on products delivered and services
provided.
The division leads to the following operating segments for reporting purposes:
Fashion
Fashion comprises stores for the fashion segment, mainly chain stores that sell shoes, some of
them clothing as well.
Living
The Living sector comprises stores for home furnishing and decoration.
The segments reported on are aggregates of operating segments that satisfy the criteria specified in IFRS 8.
7
Turnover and operating result by operating segment for the first half-year
(In millions of euros)
first half 2014
Fashion
Living
Non-allocated
Total according to income statement
Turnover
Operating result
excluding
exceptional items
Exceptional
items
Operating result
including
exceptional items
315.8
- 10.6
- 13.7
- 24.3
89.6
0.9
-
0.9
-
- 3.5
- 0.6
- 4.1
405.4
- 13.2
- 14.3
- 27.5
Finance revenue and costs
- 3.0
Result before taxes
- 30.5
Income tax expense
- 0.7
Net result on continuing operations
- 31.2
Net result on discontinued operations
-
Net result according to income statement
- 31.2
first half 2013
Fashion
Living
Non-allocated
Total according to income statement
Finance revenue and costs
Turnover
Operating result
excluding
exceptional items
Exceptional
items
Operating result
including
exceptional items
286.8
- 13.0
- 2.3
- 15.3
92.8
1.4
-
1.4
-
- 1.4
-
- 1.4
379.6
- 13.0
- 2.3
- 15.3
- 1.2
Result before taxes
- 16.5
Income tax expense
3.3
Net result on continuing operations
Net result on discontinued operations
Net result according to income statement
- 13.2
- 4.1
- 17.3
There are no transactions between operating segments.
The item “Non-allocated” operating results relates to all results not directly attributable to the segments.
Such results are those generated by businesses that do not meet the IFRS 8 definition of an operating
segment. As financing activities and tax management are conducted at group level, finance income and
expense, as well as tax items, are not allocated to individual segments.
Operating assets by operating segment
Operating assets by operating segment do not materially differ from those presented in the financial
statements for 2013.
8
4.
Seasonal factors
Seasonal patterns can be distinguished in the retail markets relevant to Macintosh Retail Group. Under
normal circumstances, turnover as well as the related operating result for the second half of the year,
particularly the fourth quarter, is higher than that for the first half.
5.
Exceptional items
The Rebalancing for Profitable Growth action programme was initiated following the completion of the
strategy survey in the first quarter of 2014. One of the priorities of this programme is the planned
sale/closure of an additional 54 stores, mainly involving Scapino Belgium (which will be divested entirety)
and Dolcis. An amount of € 7.3 million was added to the provision for onerous contracts in the first half of
the year. In addition, impairment losses of € 2.9 million and € 5.1 million were recognised on these stores'
assets and inventories respectively so that they are now carried at their recoverable amounts.
Several non-core stores were closed in in the first half of 2014 in such a cash-efficient manner that € 1.5
million of the provision formed for this purpose could be left untouched. This surplus has been released to
the result in the column “Exceptional items”. Because they are exceptional in nature, these income and
expense items are shown separately in the column "Exceptional items".
Of the provisions totalling € 40.3 million disclosed in the balance sheet as at June 30 (long-term and shortterm provisions combined), € 25.8 million related to onerous contracts. Movements in this provision were
as follows in the first half of 2014:
At January 1
Applied
Surplus closed stores
Added
Currency exchange differences
At June 30
25.5
- 6.0
- 1.5
7.3
0.5
25.8
Exceptional items in an amount of - € 14.3 million could be broken down as follows as at June 30, 2014:
Release of surplus closed stores
Added to provision for stores to close
Impairment of assets of stores to close/to divest
Impairment of inventories of stores to close/to divest
Consulting fees for strategy research
Total exceptional items
1.5
- 7.3
- 2.9
- 5.1
- 0.5
- 14.3
9
6.
Notes to various items included in the consolidated income statement
a)
Net turnover
The net turnover from continuing operations mainly relates to turnover from goods sold.
b)
Taxes
The income tax expense for the first half of 2014 is € 0.7 million (H1 2013: an income item of € 2.8 million).
The expense item for 2014 is due to tax losses being incurred by a number of tax groups in 2014, which – as
things look now – are not expected to be utilizable against future profits. In addition, a number of other
(foreign) group companies have posted profits for tax purposes, which are subject to current corporate
income tax.
7.
Notes to various items included in the balance sheet
a)
Loans to associates
This concerns long-term loans in the sum of € 6.4 million, € 1.5 million of which has been subordinated,
that were issued to Halfords Nederland BV in 2013. The loans, which will fall due on December 31, 2018,
are subject to interest at a rate of Euribor + 3%. The loans were initially recognised at fair value.
b)
Inventories
Inventories at € 221.1 million (2013: € 201.3 million) relate almost entirely to goods for retailing. The
increase was due in particular to a deliberate attempt at improving the availability of inventories. The
impairment of inventories where their net realisable value is less than their carrying amount is set out
below:
(in millions euros)
As at January 1
Impairment of inventories of stores to close/to divest
Addition charged to the income statement
Utilisation
As at June 30
30.06.2014
30.06.2013
7.9
5.1
4.3
- 3.2
14.1
8.9
4.6
- 4.0
9.5
The impairment loss at June 30, 2014 includes an additional impairment loss of € 5.1 million, which relates
to the closure/divestment of stores.
c)
Receivables
This item includes a short term receivable from Halfords Nederland in the sum of € 0.1 million.
d)
Derivative financial instruments
The capitalised amount of € 0.2 million for short-term derivative financial instrument relates entirely to
forward exchange contracts. The total of € 1.4 million of long-term and short-term financial derivatives that
is recognised as a liability comprises both interest rate derivatives (€ 0.7 million) and forward exchange
contracts (€ 0.7 million).
10
e)
Interest bearing debt
In accordance with the financial statements for 2013, interest-bearing borrowings are fully recognised
within current liabilities. For details on the increase, see the notes to the cash flow statement.
The total bank facility amounted to € 160 million, € 89.8 million of which had been drawn at June 30, 2014.
At year-end 2013, new arrangements were made with the banks with regard to:
Relaxation of the net debt/EBITDA ratio at June 30, 2014 to lower than 4.50 (actual first half of 2014:
4.40).
Relaxation of the interest coverage ratio at June 30, 2014 to higher than 4.50, based on EBITDA (actual
first half of 2014: 7.21) and to higher than 5.0 for the remaining term of the facility.
Introduction of a quarterly EBITDA floor in 2014. The targets were achieved in the first half of 2014
Lowering of the credit facility to € 125 million for the second half of 2014.
No securities have been provided for these facilities. Moreover, group companies have undertaken not to
encumber their assets.
Arrangements for a new financing package have already been made. For details, see Note 9 of this report
(Events after the reporting date).
8.
Notes to the consolidated cash flow statement
The cash flows from continuing operations in 2014 versus those in 2013 are set out below.
a)
Cash flow from operating activities
Net cash used in operating activities increased by € 14.5 million compared to the first half of 2013 due in
particular to expenditures on product availability and appealing product offerings (€ 12.1 million), taxes
(- € 6.2 million) and an improvement of operations.
b)
Cash flow from investing activities
Net cash used in investing activities stood at € 5.2 million and is comprised of regular capital expenditures
(2013: € 5.3 million). The sale of properties yielded a cash flow of € 3.8 million in 2013.
c)
Cash flow from financing activities
Net cash from financing activities was at € 15.4 million (2013: € 27.9 million). The drop by € 12.5 million
was primarily attributable to fewer loans being contracted (€ 16.1 million) and a dividend distribution
(- € 4.6 million) in 2013.
11
9.
Events after balance sheet date
Refinancing
In mid-July 2014, Macintosh reached agreement with its majority shareholders and banks on structural
refinancing in the second half of 2014. The outlines of the package are as follows.
- Issue of 2.4 million new shares. These shares were issued in July 2014; this has resulted in an increase
in equity by a gross amount of € 19.5 million. The net amount of the increase (exclusive of issue-related
costs) is estimated at € 19.2 million.
- The majority shareholders have undertaken to issue a € 20 million structured loan that will be
subordinated to the banks and will fall due on February 1, 2018 at the latest. The loan will be repaid
from the planned sale of Kwantum. The interest rate for the first 18 months is Euribor + 6%, payable in
cash. After 18 months, the interest rate will be increased to 7%; the interest will be credited to the loan
(PIK) and paid upon expiry of the term to maturity.
- The banks have undertaken to issue a € 140 million structural loan via a two-part roll-over facility.
Tranche A comprises € 125 million and will fall due on January 1, 2018. Tranche B, which will run from
January 1, 2015 to June 30, 2016, comprises € 15 million and is designed to finance peaks in working
capital.
- The interest rate on both tranches A and B is based on Euribor. Tranche A comes with an additional
margin of up to 4.5%, with a usual downward adjustment of the margin based on the leverage ratio.
Tranche B comes with a margin of 9.0% as long as the outstanding amount is higher than € 7.5 million
and of 6.0% as soon as this amount drops below € 7.5 million.
Arm's length securities will be provided for the loans. Dividend distributions will be permitted as soon as
the leverage ratio is lower than 2.0 on a structural basis.
The current view is that the finance costs directly associated with the bank and shareholder loans will be
higher by about € 2 million in 2014 than they were in 2013 due, in particular, to the higher liquidity
requirement and the related increase in interest rate. The new financing arrangements will have a minor
impact in 2014. The step-up in finance costs for 2015 is expected to amount to about € 2 million mainly as a
result of the effects of the new financing arrangements.
Recap of arrangements:
Loan
Falling due on
Subordinated loan
February 1, 2018
Tranche A
January 1, 2018
Tranche B
January 1, 2015 to
June 30, 2016
Amount
€ 20 million
€ 125 million
€ 15 million
Interest
Note
Euribor + 6% (cash)
first 18 months
Euribor + 7% (PIK)
after 18 months
Up to Euribor + 4.5%
(cash)
depending on grid
Euribor + 9% (cash)
Euribor + 6% (cash)
principal > € 7.5 million
principal < € 7.5 million
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