Vendex KBB achieves satisfactory results in stagnating market

Net sales continued activities up 10%
Net income substantially increased by sale of Group companies
Results of HEMA, Do-It-Yourself and Consumer Electronics sharply higher
Fashion continues good performance
Bijenkorf feels economic headwind
Revitalization charge V&D puts pressure on operating income
Writedown of real estate interests in Brazil

Royal Vendex KBB N.V. recorded in the first half of the fiscal year 2002/03 (as of July 31) a net income of EUR 148 million (last year EUR 33 million). This income arose largely from the sale of six Group companies effective as of July 31 last, which yielded a tax-free gain of circa EUR 145 million. This amount is included in the result of the discontinued activities.

Earnings per share (after preferred dividend, before amortization goodwill) amounted to EUR 1.65 against EUR 0.35 last year. The interim dividend per common share certificate is fixed at EUR 0.18 (last year EUR 0.15). This constitutes circa one third of the total dividend over the previous fiscal year. This dividend will be distributed entirely in cash.

Operating income (excluding real estate) of continued activities
Operating income (excluding real estate income and before goodwill amortization) of the continued activities (EUR 24 million) was greatly influenced by the (one-off) expenditure of EUR 48 million for the revitalizing of V&D.

Four of the six business units achieved satisfactory to excellent results. The results of HEMA and DIY rose sharply, and Consumer Electronics too reported an increase. FashionÂ's result remained at roughly the same high level as last year. Bijenkorf, whose annual result depends to a large extent on business in the second half of the year, showed a small loss over the first six months. V&D, which is also highly dependent on the second half, showed a greater loss than in the first half of the previous year. As earlier announced, V&D furthermore incurred one off revitalization charge for cleaning up the inventory positions and for reorganizations.

Operating income
Including Other Activities / Holding (which comprises Schaap & Citroen and AudioSonic) and after amortization of goodwill (EUR 3 million) the total operating income (excl. real estate) of the continued activities amounted to EUR 21 million. Including the result of discontinued activities (in which EUR 145 million tax-free profit on the sale of six Group companies) and the income from real estate, operating income totaled EUR 188 million against EUR 72 million last year.

Financing costs
Financing costs rose to 28 million euros due to the acquistion of Brico, the refinancing of existing debt at higher interest margins and the buy back of own shares last fiscal year.

Changes in value
The result of Changes in value amounted to EUR 12 million negative against EUR 6 million positive in the previous year. The figure this year relates mainly to a write-down of the real estate interests in Brazil in connection with the considerably altered market conditions in that country. As of now the Brazilian real estate interests are shown in the books at EUR 16 million.

The tax burden over the first half year was nil. Since the pre-tax result consists almost entirely of the book profit on the sale of six Group companies to CVC, no corporation tax is payable over the first half year.

The economic situation in the countries of relevance to the Group has deteriorated further in the first half of the current year. The economic outlook for the second half of the year is uncertain. Against this backdrop no reliable pronouncement can be made concerning the development to be expected in consumer spending. As known the results of a non-food retailer as Vendex KBB are being realized for an important part in the second half of the year. In spite of the uncertainties of the economic climat it is expected that the majority of the formats will continue the generally satisfactory course of business in the second half of the year.

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