Aquafil Group Demonstrates Resilient Profitability Amid Market Challenges with ECONYL® Products Driving Margin Expansion

Aquafil Group reported resilient third-quarter 2025 results characterized by improved profitability despite softer revenue performance, highlighting the effectiveness of the company's ongoing efficiency measures and strategic focus on regenerated products. The Italian manufacturer achieved an EBITDA margin of 13.7% in the quarter, up significantly from 12.1% in the same period last year, driven by lower raw material costs, disciplined cost-containment actions, and a richer product mix favoring higher-margin regenerated fibers.

The company's ECONYL®-branded and other regenerated fibers continued to demonstrate strong momentum, accounting for approximately 60% of fiber revenues year-to-date. This sustained shift toward regenerated content not only reinforces Aquafil's environmental, social, and governance credentials but also strengthens its differentiation with key carpet and textile customers. The increasing proportion of higher-margin ECONYL® products has been a crucial factor in driving EBITDA growth and margin expansion, helping to offset volume softness in certain market segments.

Regional performance showed distinct patterns, with North America's BCF business remaining a key growth engine with solid volume gains, while the EMEA region performed broadly in line with the prior year. The Asia Pacific market continued to experience softness, particularly in textile applications, reflecting broader industry challenges in that region. Management's ongoing reorganization of U.S. carpet collection and recycling operations, while resulting in one-off restructuring charges, positions the business for structurally lower labor and logistics costs beginning in fiscal year 2026 and beyond.

Financial results for the quarter showed revenue of €120.9 million, representing a 5.5% year-over-year decline, while EBITDA rose to €16.6 million, marking a 7.0% year-over-year increase. For the first nine months of 2025, revenue totaled €402.0 million, down 3.4% compared to the same period last year, while EBITDA reached €54.9 million, a 14.3% decrease year-over-year. Net income showed improvement at €0.4 million compared to a €8.8 million loss in the first nine months of 2024, indicating progress in overall financial health.

Looking ahead, management maintains a cautious outlook for the fourth quarter of 2025, with margin performance expected to remain at the upper end of the industrial plan despite muted volume growth in certain regions. Profitability should continue to benefit from disciplined cost controls and the ongoing reorganization of U.S. operations. Demand in the U.S. BCF segment is anticipated to remain healthy, partially offsetting continued softness in Asian markets and garment-related fibers.

On the balance sheet front, leverage continues to trend lower, with net financial position to EBITDA now around the mid-3x range. Management has prioritized cash generation and disciplined capital expenditure to support ongoing deleveraging efforts. Stonegate Capital Partners' valuation analysis, available at https://www.stonegatecp.com, utilizes both discounted cash flow and EV/EBITDA methodologies, arriving at a valuation range of €4.68 to €5.07 and €4.52 to €5.54 respectively, reflecting confidence in the company's strategic direction and execution capabilities.

The sustained performance of Aquafil's regenerated product portfolio underscores the growing market demand for sustainable materials across the carpet and textile industries. As environmental considerations continue to influence purchasing decisions across business and consumer segments, Aquafil's focus on circular economy principles through its ECONYL® regeneration system positions the company to capitalize on evolving market trends while maintaining competitive margins through operational efficiency and product mix optimization.