Aquafil Group reported resilient third-quarter profitability despite facing softer revenue trends, demonstrating the effectiveness of the company's ongoing efficiency measures and strategic focus on sustainable products. The Italian manufacturer achieved an EBITDA margin of 13.7% in the third quarter, up from 12.1% during the same period last year, primarily driven by lower raw material costs, disciplined cost containment, and an increasing mix of higher-margin regenerated products.
The company's ECONYL®-branded and other regenerated fibers continued to play a pivotal role in the business strategy, representing approximately 60% of fiber revenues year-to-date. This sustained shift toward regenerated content not only strengthens Aquafil's environmental, social, and governance credentials but also provides meaningful differentiation with key carpet and textile customers. The increasing proportion of higher-margin ECONYL® products has been a significant contributor to EBITDA growth and margin expansion, helping to offset volume softness in certain market segments.
Regionally, the North American BCF business remained a key growth engine with solid volume gains, while EMEA performance was broadly in line with the prior year. Asia Pacific markets remained soft, particularly in textile applications, reflecting broader industry challenges in the region. Management has advanced its reorganization of U.S. carpet collection and recycling operations, recognizing one-off restructuring charges that position the business for structurally lower labor and logistics costs beginning in fiscal year 2026 and beyond.
For the third quarter, Aquafil reported revenue of €120.9 million, down 5.5% year-over-year, while EBITDA rose to €16.6 million, representing a 7.0% year-over-year increase. This performance highlights continued progress in margin quality despite revenue pressure. For the first nine months of 2025, revenue reached €402.0 million, down 3.4% year-over-year, while EBITDA was €54.9 million, down 14.3% year-over-year. Net income improved to €0.4 million compared to a €8.8 million loss in the same period last year.
Looking forward, management remains cautious for the fourth quarter, 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. 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 expenditure to support deleveraging.
The company's valuation analysis, available through Stonegate Capital Partners, utilizes both discounted cash flow modeling and EV/EBITDA analysis. The DCF analysis arrives at a valuation range of €4.68 to €5.07 with a midpoint of €4.87, while the EV/EBITDA analysis suggests a range of €4.52 to €5.54 with a midpoint at €5.03. This financial performance matters because it demonstrates how companies can successfully navigate challenging market conditions through strategic focus on sustainability and operational efficiency, potentially setting a template for other industrial manufacturers facing similar market pressures.
