DALLAS, TX -- March 13th, 2026 -- Aquafil Group (ECNL.MI): Stonegate Capital Partners updates coverage on Aquafil Group (ECNL.MI). Aquafil’s FY25 results were better than the headline revenue decline suggests, as the year was defined more by mix, margin, and operating discipline than by top-line growth. Revenue fell 3.9% to €520.8M, largely reflecting lower raw material-linked selling prices. Volumes increased 4.4% on the year, leading to EBITDA increasing 16.1% to €72.4M representing EBITDA margin of 13.9%. In our view, the key takeaway is that Aquafil is showing early signs of a cleaner earnings profile, supported by resilient North America trends, continued Engineering Plastics growth, ECONYL® exceeding 60% of fiber revenues, and early savings from the €17M cost rationalization program. At the same time, the balance sheet improved, with net financial position at €209.5M and leverage declining to 2.89x, suggesting management’s focus on cost control, mix, and debt reduction is beginning to translate into more durable operating leverage heading into 2026.
Quarterly Results: ECNL reported 4Q25 revenue of €118.8M and EBITDA of €17.5M, implying a 14.7% EBITDA margin, as profitability improved despite continued top-line pressure from lower raw material-linked pricing. While FY25 revenue declined 3.9% to €520.8M, full-year EBITDA increased 16.1% to €72.4M, highlighting better mix, stronger discipline, and early cost rationalization benefits. In our view, the quarter reinforced that earnings quality is improving even before a broader volume and pricing recovery takes hold.
Outlook: Management’s 2026 framework points to a cleaner earnings recovery story, with guidance calling for ~5% volume growth, EBITDA of €79M-€83M, and continued deleveraging, as net financial position is expected to improve to €185M-€195M. In our view, the setup is increasingly supported by self-help, including carryover benefits from the €17M cost program, a better mix, continued cash discipline, and active raw material sourcing adjustments, including the shift to a new supplier, which should help Aquafil navigate a still-volatile oil and input cost environment.
ECONYL®: ECONYL®-branded and other regenerated products accounted for 60.4% of fiber revenues in FY25 and 61.4% in 4Q25, reinforcing that regenerated content remains an increasingly important part of the mix. That positioning could become more valuable in a firmer oil environment, as nylon and other virgin fibers produced from oil-based inputs become less economical and comparatively less attractive. In that context, ECONYL® should continue to support product differentiation, mix quality, and margin resilience, particularly as end-market demand remains uneven.
Valuation: We use both a DCF Model and EV/EBITDA Analysis to frame our valuation of ECNL. Our DCF analysis relies on a range of discount rates between 10.75% and 11.25%. This arrives at a valuation range of €4.12 to €4.72 with a mid-point of €4.40. Our EV/EBITDA analysis relies on a range of 7.0x to 7.5x leading to a valuation range of €4.77 to €5.28, with a midpoint at €5.03.
