Stonegate Capital Partners Updates Coverage on Aquafil Group (ECNL) Q3 2025

Core Insights - Aquafil Group (MI: ECNL) demonstrated resilient profitability in Q3 2025 despite softer top-line trends, benefiting from efficiency measures and cost control [1] - The company achieved an EBITDA margin of 13.7%, an increase from 12.1% in Q3 2024, driven by lower raw material costs and a richer mix of regenerated products [1][6] - ECONYL®-branded and other regenerated fibers accounted for approximately 60% of fiber revenues year to date, highlighting their importance to the company's revenue stream [1][6] Financial Performance - EBITDA margin improved to 13.7% in Q3 2025 from 12.1% in Q3 2024, indicating effective cost management and operational efficiency [1][6] - The North American BCF business showed solid volume gains, contributing significantly to growth, while EMEA performance was stable compared to the previous year [1] Strategic Initiatives - Management is advancing the reorganization of U.S. carpet collection and recycling operations, which includes recognizing one-off restructuring charges [1] - The restructuring is expected to lead to lower labor and logistics costs in FY26 and beyond, positioning the company for improved margins [1][6] Market Dynamics - The Asia Pacific region remained soft, particularly in textile applications, indicating potential challenges in that market segment [1]