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Balta boosts profitability despite pandemic
March 10, 2021
Major Belgium carpet business Balta has boosted its profitability and reduced debt to demonstrate the success of its efficiency savings programme during the pandemic.
In its full year financial report for 2020, the company – a major importer into the UK – saw total sales decline 16% but its profitability in residential carpets rose 26% and in rugs by 4% reflecting better margins.
Commercial sales were the greatest casualty of Covid-19 with full year revenues down 19% while rugs were down 14.2% and residential was least affected, down 11.9%
Fourth quarter figures for 2020 were also encouraging for residential sales which were up 9.7% on 2019 figures, with rugs up 1%,
Net debt significantly reduced by €30.5m to €283.2m by the end of 2020 from €313.7m in 2019, driven by strong cash generation from reduced working capital and a rigorous focus on cost management.
The resilience of Balta is attributed to the Groups' NEXT initiative, a 3-year programme to reduce costs and improve efficiency across its 10 manufacturing sites in Belgium, Turkey and the US.
Cyrille Ragoucy, CEO and Chairman of the Board of Balta commented: "2020 was an unprecedented year due to COVID-19 disruption and its material challenges to our industry. In the second half of the year, we recovered revenues in Rugs and Residential. Commercial is taking somewhat longer to return to more normal levels.
"Despite depressed volume due to COVID-19 restrictions, our full year Adjusted EBITDA [profitability] margin still ended above last year, reflecting the strong margin upside of NEXT initiatives, continued cost savings and lower raw material prices," he said.
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