Platform (PAH, Financial) reported strong earnings this quarter due to continued organic revenue growth and positive results from its ongoing cost savings initiatives. Platform’s organic revenue increased 2%, as Performance Solutions grew 6% and Ag Solutions declined 2%. The growth in the Performance Solutions segment was due primarily to the positive results of the electronics business it recently acquired from Alent and strength in its industrial business. The modest decline in Ag Solutions resulted from poor weather conditions in Eastern Europe and the restructuring of its business in Africa. Ag Solutions reported positive growth in all of its key regions outside of Eastern Europe and Africa.
Platform’s organic EBITDA increased 8% due to strong results in both segments. Performance Solutions organic EBITDA grew 7% due to revenue growth and ongoing cost synergies from the acquisition of Alent, which was somewhat offset by a higher mix of sales from lower margin products. Ag Solutions organic EBITDA grew 9% in spite of the decline in revenue due to increased sales of higher-margin products and continued cost reductions in the business.
Platform’s overall EBITDA grew 6% due to a 2% headwind from the strengthening U.S. dollar. As a result of interest savings from the company’s recent debt refinancing and its leveraged capital structure, EPS grew roughly 25%.
From Bill Ackman (Trades, Portfolio)'s second quarter 2017 shareholder letter.
