RESULTS FOR THE FIRST NINE MONTHS OF 2024
SHARP PROFITABILITY GROWTH
(9M 2024 +30% vs 9M 2023)
PERCENTAGE MARGINS
CONTINUED TO IMPROVE
ECONYL® BRANDED AND REGENERATED
PRODUCTS INCREASED TO 54%
OF REVENUES GENERATED FROM FIBERS
NFP/EBITDA RATIO
FURTHER IMPROVED
USA VOLUMES RECOVERED
CAPITAL INCREASE WITH OPTION RIGHTS
PLANNED BY THE END OF THE YEAR
MAIN INDICATORS AT SEPTEMBER 30, 2024:
- Revenues: €416.1 million, -5.9% compared to €442.2 million for the same period of 2023;
- Volumes sold: up 6.3% compared to the same period of the previous year;
- EBITDA: €48.1 million, +29.9% compared to €37.0 million for the same period of 2023;
- Net result: €8.8 million loss, +48.7% compared to a €17.1 million loss for the same period of 2023;
- NFP/LTM EBITDA ratio at x4.52 at September 30, 2024 compared to x5.23 at December 31, 2023.
Arco, October 28, 2024 - The Board of Directors of Aquafil S.p.A. [ECNL:IM] [ECNLF:OTCQX], chaired by Prof. Chiara Mio, met today and approved the Company's consolidated operating and financial results at September 30, 2024.
Giulio Bonazzi, Chief Executive Officer, stated:
"We are particularly satisfied with the results achieved in the third quarter, which showed a significant increase in profitability over last year and a continuously improving the percentage marginality, confirming our goal.
The cost containment actions and sales raised initiated last year are generating the expected results and will have even greater impacts in the coming periods.
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The net financial position, excluding the impacts of IFRS 16 accounting standard, is markedly decreased from the same period last year. The NFP/EBITDA ratio also continues to decline even considering the effects of the aforementioned standard.
Product line dynamics in EMEA finally recorded increasing volumes for fibers for textiles in the third quarter, while fibers for carpet and polymers remain in line with expectations.
In the United States, both fiber product lines showed signs of recovery, despite the penalty resulting from the impacts of Hurricane Helene in North Carolina.
In Asia Pacific, volumes are confirming what was forecast in the Plan.
In the fourth quarter, we expect a further increase in margins, a continuation of the decline in debt and volumes increasing compared to last year.
In relation to the capital increase operation, we are completing the preparatory activities for the launch of the rights offering, which we expect to conclude by the end of the year.
If any rights remain unopted at the end of the subscription period, the final deadline to execute them will be January 31, 2025.
We remain confident in achieving the goals of the Plan and obtaining the support of our shareholders, which is necessary for the operation to be successful."
Operating results at September 30, 2024
Revenues1
Revenues amounted to €416.1 million at September 30, 2024, of which €127.9 million in Q3 2024, with a 5.9% and a 2.4% decrease, respectively, compared to the same periods of the previous year. The change was attributable to a 6.3% increase in the volumes sold in the first nine months, not fully supported by selling prices as a result of their alignment to the lower price of raw materials and to the different sales mix. In the third quarter, volumes declined slightly by 2.7% compared to the same period of 2023.
In detail, sales performance by Geographical Area and Product Line is reported below:
1) in the first nine months:
9M | BCF (fiber for carpet) | NTF (fibre for fabrics) | Polymers | TOTAL | ||||||||||||||
2024 | 2023 | Δ | Δ% | 2024 | 2023 | Δ | Δ% | 2024 | 2023 | Δ | Δ% | 2024 | 2023 | Δ | Δ% | %24 | %23 | |
EMEA | 137,2 | 140,6 | (3,5) | (2,5)% | 44,8 | 57,8 | (13,1) | (22,6)% | 39,2 | 29,8 | 9,4 | 31,5 % | 221,2 | 228,3 | (7,1) | (3,1)% | 53,2% | 51,6% |
North America | 94,8 | 115,3 | (20,6) | (17,8)% | 18,6 | 23,0 | (4,4) | (19,1)% | 6,3 | 4,0 | 2,3 | 58,7 % | 119,7 | 142,3 | (22,6) | (15,9)% | 28,8% | 32,2% |
Asia e Oceania | 68,9 | 66,5 | 2,4 | 3,6 % | 2,5 | 3,2 | (0,7) | (22,6)% | 1,9 | 0,5 | 1,4 | N.A. | 73,2 | 70,2 | 3,1 | 4,4 % | 17,6% | 15,9% |
RoW | 0,6 | 0,6 | (0,0) | (4,3)% | 1,4 | 0,8 | 0,6 | 68,1 % | 0,0 | 0,0 | 0,0 | N.A. | 2,0 | 1,4 | 0,5 | 37,0 % | 0,5% | 0,3% |
TOTALE | 301,4 | 323,1 | (21,7) | (6,7)% | 67,2 | 84,8 | (17,6) | (20,8)% | 47,5 | 34,3 | 13,2 | 38,3 % | 416,1 | 442,2 | (26,2) | (5,9)% 100,0% | 100,0% | |
% | 72,4% | 73,1% | 16,2% | 19,2% | 11,4% | 7,8% | 100,0% | 100,0% |
1The evolution of the Group's revenues from one reporting period to another may be influenced by the performance of raw materials' prices, which is reflected in final selling prices through predefined contractual mechanisms. Accordingly, to ensure a proper understanding of its results, the Group also presents its revenue performance in terms of change in first choice "volumes sold", which historically account for approximately 95% of the Group's revenues.
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9M - % Revenues by Geographical Area
17,6% | 15,9% | |
28,8% | 32,2% | |
53,2% | 51,6% | |
2024 | 2023 | |
EMEA | North America | Asia e Oceania |
9M - % Revenues by Product Line
11,4% | 7,8% | |||
16,2% | 19,2% | |||
72,3% | 73,1% | |||
2024 | 2023 | |||
BCF (fiber for carpet) | NTF (fibre for fabrics) | Polymers |
1) in the third quarter:
3Q | BCF (fiber for carpet) | NTF (fibre for fabrics) | Polymers | TOTAL | ||||||||||||||
2024 | 2023 | Δ | Δ% | 2024 | 2023 | Δ | Δ% | 2024 | 2023 | Δ | Δ% | 2024 | 2023 | Δ | Δ% | %24 | %23 | |
EMEA | 40,3 | 41,6 | (1,4) | (3,3)% | 12,9 | 11,6 | 1,3 | 11,5 % | 10,3 | 10,0 | 0,3 | 3,0 % | 63,5 | 63,2 | 0,3 | 0,4 % | 49,6% | 48,2% |
North America | 32,5 | 35,4 | (2,9) | (8,1)% | 6,1 | 7,3 | (1,3) | (17,6)% | 2,1 | 1,2 | 0,9 | 72,3 % | 40,6 | 43,9 | (3,3) | (7,5)% | 31,8% | 33,5% |
Asia e Oceania | 21,8 | 22,3 | (0,6) | (2,5)% | 0,9 | 1,2 | (0,3) | (21,1)% | 0,6 | 0,1 | 0,5 | N.A. | 23,3 | 23,6 | (0,3) | (1,4)% | 18,2% | 18,0% |
RoW | 0,1 | 0,1 | (0,0) | (8,1)% | 0,4 | 0,2 | 0,2 | 96,9 % | 0,0 | 0,0 | 0,0 | N.A. | 0,5 | 0,3 | 0,2 | 55,5 % | 0,4% | 0,3% |
TOTALE | 94,6 | 99,4 | (4,8) | (4,8)% | 20,3 | 20,3 | (0,0) | (0,0)% | 13,0 | 11,4 | 1,6 | 14,5 % | 127,9 | 131,1 | (3,2) | (2,4)% 100,0% | 100,0% | |
% | 74,0% | 75,9% | 15,9% | 15,5% | 10,2% | 8,7% | 100,0% | 100,0% |
3Q - % Revenues by Geographical Area
18,2% | 18,0% | |
31,8% | 33,5% | |
49,6% | 48,2% | |
2024 | 2023 | |
EMEA | North America | Asia e Oceania |
3Q - % Revenues by Product Line
10,2% | 8,7% | |||
15,9% | 15,5% | |||
74,0% | 75,9% | |||
2024 | 2023 | |||
BCF (fiber for carpet) | NTF (fibre for fabrics) | Polymers |
EMEA revenues amounted to €221.2 million at September 30, 2024, of which €63.5 million in Q3 2024, with a 3.1% decline and a slight 0.4% increase, respectively, compared to the same periods of the previous year. Volumes sold increased by 12.2% in the first nine months and declined slightly by 5.3% in Q3 2024 compared to the same periods of the previous year. An analysis by product line performance shows that:
- the BCF product line declined by 2.5% in the first nine months and by 3.3% in Q3 2024 compared to the same periods of the previous year. The change was attributable to the alignment of selling prices to the lower price of raw materials, whereas volumes sold grew by 7.7% in the first nine months and decreased by 2.6% in Q3 2024;
- the NTF product line declined by 22.6% in the first nine months and rose by 11.5% in Q3 2024 compared to the same periods of the previous year. The change was mainly due to the volumes sold, which dropped by 11.8% in the first nine months and grew by 14.4% in Q3 2024, in addition to lower selling prices due to their alignment to the lower raw material prices;
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the Polymers product line increased by 31.5% in the first nine months and by 3.0%
in Q3 2024 compared to the same periods of the previous year as a result of the volumes sold, which grew by 33.8% in the first nine months and decreased by 15.3% (due to basic polymers) in Q3 2024.
In North America, revenues amounted to €119.7 million at September 30, 2024, of which €40.6 million in Q3 2024, with a decrease of 15.9% and 7.5%, respectively, compared to the same periods of the previous year. Volumes sold declined by 5.0% in the first nine months and rose by 2.1% in Q3 2024, thus confirming the volumes' uptrend expected for the US geographical area. An analysis by product line performance shows that:
- the BCF product line declined by 17.8% in the first nine months and by 8.1% in Q3 2024 compared to the same periods of the previous year as a result of the volumes sold, which decreased by 8.3% in the first nine months and grew slightly by 0.7% in Q3 2024 with lower selling prices due to their alignment to the lower prices of raw materials;
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- the NTF product line decreased by 19.1% in the first nine months and by 17.6% in Q3 2024 compared to the same periods of the previous year, chiefly attributable to the lower volumes sold, down by 15.4% and 9.7% in the first nine months and in Q3 2024, respectively and from the effects of Hurricane Helene on the third quarter.
In Asia and Oceania, revenues amounted to €73.2 million at September 30, 2024, of which €23.3 million in Q3 2024, with an increase of 4.4% and a slight 1.4% decline, respectively, compared to the same periods of the previous year. In terms of volumes sold, the BCF product line grew by 7.8% in the first nine months compared to the same period of the previous year and dropped slightly by 2.9% in the third quarter.
Revenues from ECONYL® branded products accounted for 54.0% of revenues generated from fibers in the first nine months and for 56.7% in the third quarter. Both ratios rose compared to the same periods of the previous year, thus confirming the ongoing progress towards the achievement of the target set at 60% of revenues generated by fibers by the end of 2025.
EBITDA
EBITDA stood at €48.1 million at September 30, 2024, of which €15.5 million in Q3 2024, with a 29.9% and a 171.8% increase compared to the same periods of the previous year. EBITDA margin at September 30, 2024 was 11.6% compared to 8.4% for the same period of the previous year, whereas in the third quarter it was 12.1% compared to 4.3% in Q3 2023.
The increase compared to the same periods of the previous year was mainly attributable to the efficiencies derived from the reduction in personnel costs, the decrease in raw materials and utilities costs, and the change in inventories.
EBIT
EBIT amounted to €3.9 million at September 30, 2024, of which €0.8 million in Q3 2024, with a 188.7% increase compared to the same period of the previous year. The change in the reporting period was attributable to the EBITDA performance, as well as to higher amortization and depreciation.
Net financial charges
Net financial charges amounted to €(14.2) million at September 30, 2024 compared to €(10.5) million for the same period of the previous year.
The change was chiefly attributable to a €4.2 million increase in financial charges, due to higher interest expense on bank loans and borrowings, and a €0.4 million rise in financial income.
Income taxes
Income taxes were positive for €1.5 million at September 30, 2024 compared to €2.2 million for the same period for the previous year.
Net result
Net result was a €8.8 million loss at September 30, 2024 compared to a €17.1 million loss for the same period of the previous year.
Consolidated capital and financial highlights at September 30, 2024
Investments and acquisitions
At September 30, 2024, net investments - excluding those recognized in application of IFRS 16 - amounted to €16.6 million compared to €25.7 million for the same period of the previous year. They mainly focused on activities aimed at stepping up industrial and energy
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efficiency at the Group's plants and at increasing the production efficiency of ECONYL® caprolactam and its raw materials, in addition to the development of technologies linked to circularity and the expansion of existing production capacity, as well as the general and technological improvement of existing plants and equipment.
Net working capital
At September 30, 2024, net working capital absorbed €19.8 million cash.
Said change was attributable to lower trade payables for €21.7 million, the overall €4.7 million reduction in the value of inventories - due both to the decline in the unit prices of raw materials and in other cost components, in addition to the decrease in the volumes of inventories - and the increase in trade receivables for €2.8 million.
Net Financial Position
The Group's net financial position amounted to €265.0 million at September 30, 2024 compared to €248.5 million at December 31, 2023. Said change was mainly due to the positive cash generation of operating activities for €44.1 million, the €19.8 million cash absorbed by working capital, net investments for €16.6 million, the payment of financial charges and hedging instruments with negative fair value for €15.1 million, the non-monetary change relating to the application of IFRS 16 for €5.3 million and taxes and the use of provisions for €3.8 million.
As of September 30, 2024, the impact of the IFRS 16 accounting standard, included in the net financial position above, amounted to €32.0 million, compared to €19.5 million in the same period last year.
At September 30, 2024, the NFP/LTM EBITDA ratio was x4.52 compared to x5.23 at December 31, 2023.
Outlook
In these first nine months, profitability marked a significant increase over the same period last year with margins exceeding 12 percent in the third quarter.
The net financial position, excluding the impacts of IFRS 16 accounting standard, showed an important decrease from last year. The NFP/EBITDA ratio also continued to improve, as expected.
Demand in Asia Pacific and EMEA confirmed budget forecasts for the current year. The U.S. region showed signs of recovery in both fibers' product lines, despite the impacts of Hurricane Helene in North Carolina.
The fourth quarter is expected to see further profitability improvement, continued decline in debt, and increasing volumes, confirming the Business Plan.
The capital increase operation to support the Business Plan is expected to be completed by the end of the current year. If any rights remain unopted at the end of the subscription period, the final deadline to execute them will be January 31, 2025.
Significant events occurred in the third quarter of 2024
Ordinary and Extraordinary Shareholders' Meeting
The Ordinary and Extraordinary Shareholders' Meeting held on October 10, 2024 resolved to approve:
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- the appointment, pursuant to and for the purposes of Article 2386 of the Italian Civil Code, of Roberto Siagri, already appointed by co-option by the Board of Directors on May 31, 2024, as a Director of the Company to integrate the Board of Directors, until the date of approval of the Financial Statements for the year ending December 31, 2025;
- the proposal to carry out a divisible increase of the Company's share capital, against payment, on one or more occasions, including in one or more tranches, for a maximum amount of €40,000,000.00 including any share premium, by issuing new ordinary shares and B Shares with characteristics similar to those of outstanding shares, to be offered with option rights to entitled parties under Article 2441, paragraph 1, of the Italian Civil Code. Ensuing amendment of Article 5 of the By-laws;
- the proposal to vest the Board of Directors with the delegated powers, pursuant to Article 2443 of the Italian Civil Code, to carry out a divisible or not-divisible increase of the Company's share capital, against cash payment, on one or more occasions, including in one or more tranches, valid until December 31, 2025 and for a maximum amount of €40,000,000, including any share premium, without option rights pursuant to Article 2441, paragraphs 5 and 6, of the Italian Civil Code, in addition to powers to define the terms and conditions of the capital increase, in compliance with any applicable laws and regulatory provisions in force. Ensuing amendment of Article 5 of the By-laws. Relevant and ensuing resolutions.
* * *
Statement of the Appointed Manager
"The Manager responsible for preparing the Company's financial reports, Roberto Carlo Luigi Bobbio declares, pursuant to Paragraph 2 of Article 154-bis of the Consolidated Finance Law, that the accounting information contained in this press release corresponds to the company's records, ledgers and accounting entries."
* * *
This press release contains forward-looking statements. These statements are based on the Aquafil Group's current expectations and projections regarding future events and are, by their very nature, subject to a number of risks and uncertainties. These statements refer to events and depend on circumstances that may or may not occur or take place in the future, and, as such, undue reliance should not be made on them. Actual performance could differ significantly from the contents of such statements due to a variety of factors, including constant volatility and a further deterioration of capital and financial markets, changes in macroeconomic conditions and economic growth and other changes in business conditions, changes in the law and institutional context (in Italy and internationally), and many other factors, most of which are beyond the Group's control.
* * *
Aquafil is a pioneer in the circular economy also thanks to the ECONYL® regeneration system, an innovative and sustainable process able to create new products from waste and give life to an endless cycle. The nylon waste is collected in locations all over the world and includes industrial waste but also products - such as fishing nets and rugs - that have reached the end of their useful life. Such waste is processed to obtain a raw material - caprolactam - with the same chemical and performance characteristics as those from fossil sources. The polymers
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produced from ECONYL® caprolactam are distributed to the Group's production plants, where they are transformed into yarn for rugs carpet flooring and for clothing.
Founded in 1965, Aquafil is one of the main producers of nylon in Italy and worldwide. The Group is present on three different continents, employing about 2,500 people at 19 production sites located in Italy, Slovenia, Unites States, China, Croatia, Chile, Thailand and Japan.
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For further information | |
Investors Contact | Agota Dozsa |
Giulia Rossi | a.dozsa@barabino.it |
investor.relations@aquafil.com | mob: +39 338 7424.061 |
mob: +39 327 0820 268 | Media Contact |
Barabino & Partners IR | Barabino & Partners |
T: +39 02 72.02.35.35 | Federico Vercellino |
Stefania Bassi | f.vercellino@barabino.it |
s.bassi@barabino.it | T: +39 02 72.02.35.35 |
mob: +39 335 6282.667 | mob: +39 331 5745.17 |
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Appendix 1 - Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT | At 30 September | of which | At 30 | of which | Third Quarter | of which | Third Quarter | of which |
€/000 | 2024 | non-current | September 2023 | non-current | 2024 | non-current | 2023 | non-current |
Revenues | 416.075 | 442.229 | 1 | 127.942 | 131.112 | 1 | ||
of which related parties | 18 | 227 | (140) | 76 | ||||
Other Revenues and income | 6.618 | 32 | 7.550 | 625 | 3.333 | (5) | 2.603 | 622 |
of which related parties | 227 | - | 227 | - | ||||
Total Revenues and Other Revenues and income | 422.693 | 32 | 449.779 | 626 | 131.275 | 32 | 133.715 | 623 |
Raw Material | (196.191) | (230.169) | (415) | (58.400) | (71.231) | (415) | ||
Services | (92.659) | (484) | (95.987) | (1.263) | (30.958) | (336) | (28.123) | (245) |
of which related parties | (530) | (388) | - | (201) | (124) | |||
Personel costs | (90.642) | (1.217) | (94.220) | (2.345) | (28.467) | (387) | (31.201) | (1.830) |
Other Operating Costs | (2.411) | (123) | (2.718) | (181) | (752) | (14) | (954) | (67) |
of which related parties | (52) | (52) | (17) | (17) | ||||
Depreciation and Amorti zation | (40.207) | (35.982) | (13.220) | (11.695) | ||||
(Provisions&Write-downs)/ releases | (27) | 217 | (38) | 40 | ||||
Capitalization of Internal Construction Costs | 3.340 | 4.687 | 1.364 | 951 | ||||
EBIT | 3.896 | (1.792) | (4.393) | (3.578) | 804 | (743) | (8.499) | (1.933) |
Investment income/charges | 110 | 90 | 110 | 90 | ||||
of which related parties | 110 | 90 | 110 | 90 | ||||
Financial income | 1.060 | 621 | 419 | 282 | ||||
of which related parties | 1 | 1 | ||||||
Fianancial charges | (16.138) | (11.907) | (5.607) | (4.402) | ||||
of which related parties | (70) | (116) | (21) | (29) | ||||
FX Gains and Losses | 741 | 698 | 1.097 | (285) | ||||
Profit Before Taxes | (10.330) | (1.792) | (14.891) | (3.578) | (3.177) | (743) | (12.813) | (1.933) |
Income Taxes | 1.552 | (2.177) | 532 | - | (119) | |||
Net Profit (Including Portion Attr. to Minority ) | (8.779) | (1.792) | (17.068) | (3.578) | (2.646) | (743) | (12.932) | (1.933) |
Net Profit Attributable to Minority Interest | ||||||||
Net Profit Attributable to the Group | (8.779) | (17.068) | (2.646) | (12.932) |
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Appendix 2 - EBITDA and Adjusted Operating Results
RECONCILIATION FROM NET PROFIT TO EBITDA | September | September | Third Quarter | Third Quarter | ||||
€/000 | 2024 | 2023 | 2024 | 2023 | ||||
Net Profit (Including Portion Attr. to Minority ) | (8.779) | (17.068) | (2.646) | (12.932) | ||||
Income Taxes | (1.552) | 2.177 | (532) | 119 | ||||
Investment income and charges | (110) | (90) | (110) | (90) | ||||
Amortisation & Depreciation | 40.207 | 35.982 | 13.220 | 11.695 | ||||
Write-downs & Write-backs of intangible and tangible assets | 27 | (217) | 38 | (39) | ||||
Financial items (*) | 16.486 | 12.638 | 4.777 | 4.987 | ||||
No recurring items (**) | 1.792 | 3.578 | 743 | 1.933 | ||||
EBITDA | 48.072 | 37.001 | 15.490 | 5.673 | ||||
Revenue | 416.075 | 442.229 | 127.942 | 131.112 | ||||
EBITDA Margin | 11,6% | 8,4% | 12,1% | 4,3% | ||||
RECONCILIATION FROM EBITDA TO | September | September | Third Quarter | Third Quarter | ||||
EBIT ADJUSTED €/000 | 2024 | 2023 | 2024 | 2023 | ||||
EBITDA | 48.072 | 37.001 | 15.490 | 5.673 | ||||
Amortisation & Depreciation | 40.207 | 35.982 | 13.220 | 11.695 | ||||
Write-downs & Write-backs of intangible and tangible assets | 27 | (217) | 38 | (39) | ||||
EBIT Adjusted | 7.838 | 1.236 | 2.232 | (5.983) | ||||
Revenue | 416.075 | 442.229 | 127.942 | 131.112 | ||||
EBIT Adjusted Margin | 1,9% | 0,3% | -(1,7%) | -4,6% |
- The financial items include: (i) financial charges and other bank charges of Euro (16.1) million, (ii) cash discounts of Euro (2.1) million, (iii) financial income of Euro 1 million, and (iv) exchange gain of Euro 0.7 million.
- This includes at the end of September: (i) non-recurring charges related to the expansion of the Aquafil Group for Euro (0.1) million, (ii) non-recurring charges related to legal advice for Euro (0.1) million, (iii) non-recurring costs relating to the mobility of personnel for Euro (1.2) million, (iv) other non-recurring charges and income for Euro (0.1) million, (v) non-recurring charges related to the capital increase operation Euro (0.3) million.
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