Balta : 2021 Annual Results

LSF9 BALTA ISSUER S.à r.l.

Senior Secured Notes due 2024

Annual Report ended 31 December, 2021

Registered office

15, Boulevard Friedrich Wilhelm Raiffeisen L-2411 Luxembourg

R.C.S. Luxembourg: B 198084

2021

ANNUAL REPORT

TABLE OF CONTENTS

THE GROUP AT A GLANCE

The Group at a Glance 2

Balta Group in Numbers 11

Balta Group Worldwide 12

MANAGEMENT REPORT

Management report 14

SUMMARY OF MAIN RISKS

Summary of main risks 22

FINANCIAL STATEMENTS

1. Consolidated statement of comprehensive income

for the period ended 31 December

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&RQVROLGDWHG VWDWHPHQW RI FDVK ȵRZV for the period ended 31 December

4. Consolidated statement of changes in equity for the year ended 31 December

28

29

30

31

5. Notes to the Consolidated Financial Statements 32

Notes see box on the right

Audit Report

Notes

NOTE 1

Accounting policies

32

NOTE 2

Critical accounting estimates and judgements 45

NOTE 3

Reconciliation of non-GAAP measures 47

NOTE 4

Segment reporting 48

NOTE 5

NOTE 6

Goodwill 49 (PSORHH EHQHȴW H[SHQVHV

NOTE 7

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NOTE 8

Depreciation / amortisation 52

NOTE 9

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NOTE 12 Other intangible assets 54

NOTE 13 Property, plant and equipment 55 NOTE 14 'HIHUUHG LQFRPH WD[ DVVHWV DQG OLDELOLWLHV

NOTE 15 Inventories 60

NOTE 16 Trade and other receivables 60

NOTE 17 Cash and cash equivalents 62

NOTE 18 Share capital and share premium 62

NOTE 19 Other comprehensive income 63

NOTE 20 Retained earnings 64

NOTE 21 Senior Secured Notes 64

NOTE 22 Bank and other borrowings 66

NOTE 23 Leases 68

NOTE 24 Net debt reconciliations 69 NOTE 25 $GGLWLRQDO GLVFORVXUHV RQ ȴQDQFLDO LQVWUXPHQWV

NOTE 26 Financial risk management 71 NOTE 27 (PSORHH EHQHȴW REOLJDWLRQV

NOTE 28 Other payroll and social related payables 78

NOTE 29 Provisions for other liabilities and charges 78

NOTE 30 Trade and other payables 79

NOTE 31 Share based payments 79

NOTE 32 Government grants 79

NOTE 33 Earnings per share 80

NOTE 34 Dividends per share 81

NOTE 35 Commitments 81

NOTE 36 82

List of consolidated companies

NOTE 37 Related party transactions 83

NOTE 38 Fees paid to the Group's auditors 83

NOTE 39 Discontinued operations 83

NOTE 40 Events after the reporting period 86

State-of-the-art weaving looms

THE GROUP

AT A GLANCE

Balta is a leading producer of high-quality textile floor coverings. Representing a consolidated revenue of € 634m and the passion and commitment of 4,029 employees, our products are manufactured in 8 production facilities and sold to 136 countries worldwide.

On 29 November 2021, Balta Group has announced that it has entered into a binding agreement to sell its Rugs, Residential polypropylene and Non-Woven businesses, together with the Balta brand, to Victoria PLC WKHbȆWUDQVDFWLRQȇ

The transaction concluded, on 4 April 2022, will allow the continuing Group to focus on developing its commercial busi-nesses in Europe and the United States under the main brands arc edition, Bentley and modulyss, as well as its premium European Residential polyamide business, Ζ7& )RU WKH SXUSRVHV RI WKLV annual report, we will cover both the continuing and discontinued SDUWV RI WKH EXVLQHVV

Revenue 2021 per segment (1)

Rugs

Commercial

Residential

Non-woven

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37.2%

Adjusted EBITDA 2021 per segment (2)

Rugs

Commercial

Residential

Non-woven

• (1) The revenue of 2021 includes € 357.5m of revenue from the discontinued operations (Rugs, Res PP and Non-Woven).

• (2) The Adjusted EBITDA of 2021 includes € 43.9m of Adjusted EBITDA from the discontinued operations (Rugs, Res PP and Non-Woven).

SEGMENTS

THE GROUP AT A GLANCE

Rugs

woven and tufted area rugs, sold under the Balta home brand.

Residential

wall-to-wall carpet and carpet tiles for domestic use, through the brands Balta carpets, Balta carpet tiles and ITC.

Commercial

wall-to-wall carpet and carpet tiles for commercial use under the brands arc edition, Bentley, and modulyss.

Non-Woven

needle felt, carpet backing, and technical non-wovens under the Captiqs brand.

Our traditional core markets include the United States, WKH 8QLWHG .LQJGRP *HUPDQ DQG )UDQFH :H DOVR KDYH DbVWURQJ SUHVHQFH LQ &HQWUDO DQG (DVWHUQ (XURSH