Stonegate Capital Partners has updated its coverage on Aquafil Group (ECNL.MI), reporting that the company delivered resilient profitability in the third quarter of 2025 despite softer top-line trends. The company achieved an EBITDA margin of 13.7%, up from 12.1% in the same period last year, reflecting lower raw material costs, disciplined cost-containment actions, and a richer mix of regenerated products. ECONYL®-branded and other regenerated fibers continued to play a pivotal role, representing roughly 60% of fiber revenues year to date.
In the third quarter, Aquafil reported revenue of €120.9 million, down 5.5% year-over-year, while EBITDA rose 7.0% to €16.6 million. Adjusted EBITDA and adjusted EPS came in at €16.6 million and (€0.02), respectively, compared to Stonegate's estimates of €24.5 million and €0.05. For the first nine months of 2025, revenue was €402.0 million, down 3.4% year-over-year, while EBITDA was €54.9 million, down 14.3%, but net income improved to €0.4 million from a loss of €8.8 million in the prior year period.
Regionally, the North American BCF business remained a key growth engine with solid volume gains, while EMEA was broadly in line with the prior year, and Asia Pacific remained soft, particularly in textile applications. Management also advanced its reorganization of U.S. carpet collection and recycling operations, recognizing one-off restructuring charges that are expected to position the business for structurally lower labor and logistics costs in fiscal 2026 and beyond.
Looking ahead, management remains cautious for the fourth quarter of 2025, with margin performance expected to stay 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. carpet collection and recycling operations. Demand in the U.S. BCF segment is anticipated to remain healthy, partially offsetting softness in Asia and garment-related fibers. On the balance sheet, leverage is trending lower, with net financial position to EBITDA now around the mid-3x range, and management is prioritizing cash generation and disciplined capital expenditures to support deleveraging.
The sustained shift toward regenerated content reinforces Aquafil's ESG credentials and strengthens its differentiation with key carpet and textile customers. The increasing mix of higher-margin ECONYL® products has been an important contributor to EBITDA growth and margin expansion, helping to offset volume softness.
Stonegate Capital Partners uses both a discounted cash flow model and an EV/EBITDA analysis to frame its valuation of Aquafil. The DCF analysis, relying on discount rates between 10.75% and 11.25%, arrives at a valuation range of €4.68 to €5.07 with a mid-point of €4.87. The EV/EBITDA analysis, relying on a range of 7.0x to 8.0x, leads to a valuation range of €4.52 to €5.54, with a midpoint at €5.03.
