Balta Group announced a revenue increase of 15.1% to €333.9 million ($400.83 million) for the first half of 2017. Organic growth increased 6.1% and was driven by business (+12.9% organic growth) and commercial business (+7.8% organic growth). The acquisition of Bentley (completed at the end of Q1 2017) contributed to revenues as of April 2017, and accounted for an additional 10.1% growth.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 11.1% to €46.5 million ($55.77 million) with an adjusted EBITDA margin of 13.9% and an underlying organic growth of 9.8%. The increase in raw material purchase prices observed during the first half did not have a significant impact on financial performance. Organic and mergers and acquisitions growth have been partially offset by the adverse impact of the depreciation of the British pound.
The company reports that the integration of U.S.-based Bentley is on track. In June 2017, Bentley and modulyss jointly showcased their products for the first time at NeoCon in Chicago. A selected number of modulyss products were chosen based on their European style and appeal to U.S. customers. The company reports that revenues should be seen from the U.S. sales force and architects and design community in Q4 2017.
The company remains committed to lowering its financing costs through the refinancing of a portion of the 7.75% Senior Secured Notes (SSN). During Q3 2017, a total of €33.9 million ($40.67 million) of the SSN will have been redeemed and replaced by a new senior term loan maturing September 2020 at a margin of 1.4%, reducing annualized interest expenses by €2.1 million ($2.52 million).
“I am pleased to announce this first set of results since our IPO last June,” said Tom Debusschere, CEO of Balta. “We executed on our strategy of growth, both organically and through M&A. The growth is a result of our continued investments in innovation and new product collections in all of our divisions. Over the last months, we have also made clear progress with the integration of our recent U.S. acquisition, Bentley Mills. We anticipate continued headwinds from higher raw material prices and currency impacts. We have implemented and continue to implement mitigating actions which include price increases, new product introductions and lean initiatives, which will restore our margins on the mid-term. Based on our H1 2017 performance and the current outlook for H2, we remain confident that we will achieve our objectives for the full year.”