Aquafil Group (ECNL.MI) has reported a strong fourth quarter in 2024, showcasing its ability to navigate a complex market environment through strategic adaptations and operational enhancements. The company's financial results underscored a notable improvement in profitability, with revenues reaching €128.4 million and adjusted EBITDA growing by 36.0% compared to the previous year. A key highlight was the performance of ECONYL®, Aquafil's regenerated nylon product line, which accounted for 57.2% of fiber revenues, marking a 50-basis-point increase from the prior quarter.
Geographically, Aquafil faced varied conditions across its markets. The North American sector saw volume declines, whereas the EMEA and Asia Pacific regions met their budget forecasts, indicating growth. Despite these challenges, the company is optimistic about a rebound in North America, with early indicators of rising orders as it moves into fiscal year 2025. This optimism is supported by Aquafil's strategic financial management, which has led to a significant reduction in the net financial position-to-EBITDA ratio from 5.11x at the end of fiscal year 2023 to 3.42x by the fourth quarter of 2024.
Analysts from Stonegate Capital Partners have provided a valuation range for Aquafil between €3.97 and €5.02 per share, with a midpoint of €4.51, reflecting a positive outlook on the company's market position. Looking ahead, Aquafil is focused on expanding its ECONYL® line, aiming for it to contribute 60% of revenues by the end of fiscal year 2025. The company is also implementing cost-reduction strategies and benefiting from a covenant holiday from lenders, which positions it for potential growth and enhanced financial performance in the coming year.
