Aquafil (ECNL) Q2 2024 earnings summary

Executive summary

• Profitability improved significantly in H1 2024, with EBITDA up 4% year-over-year to €32.6 million and a 77.7% increase in Q2; however, revenues declined 7.4% to €288.1 million and net loss widened to €6.1 million.

• ECONYL® branded and regenerated products accounted for 52.8% of fiber revenues in H1 2024, up from 47.2% in H1 2023.

• EMEA and Asia-Pacific regions showed volume growth and recovery, while the US market remained weak and below expectations.

• A new three-year industrial plan (2024-2026) was approved, including a proposed capital increase of up to €40 million, with major shareholder intent to subscribe pro-quota.

• Actions on personnel rationalization and working capital optimization are finalized and delivering expected results.

Financial highlights

• EBITDA margin rose to 11.3% in H1 2024 (vs. 10.1% in H1 2023); Q2 margin was 12.3% (vs. 6.8%).

• 1H 2024 revenues were €288.1 million, down 7.4% year-over-year; Q2 2024 revenues were €140.6 million, down 2.5%.

• Net financial position improved to €243.0 million at June 30, 2024, from €248.5 million at December 31, 2023.

• Net financial charges increased to €10.2 million in H1 2024, mainly due to higher interest expenses.

• Net loss for H1 2024 was €6.1 million, compared to a €4.1 million loss in H1 2023.

Outlook and guidance

• 2024 EBITDA expected at ~€65 million, up 37% from 2023, but 14% below prior guidance due to US market weakness.

• Limited volume growth is expected in H2 2024, with a substantial recovery anticipated in 2025; EMEA and Asia Pacific are expected to maintain or grow volumes, while the US is projected to see slight improvement.

• The new industrial plan targets further EBITDA and NFP improvements in 2025 and 2026.

• New guidance and business plan for 2025-2026 to be presented in September.

• Volume growth for 2024 revised to ~5% YoY, mainly from Polymers; BCF and NTF volumes stable.