AQUAFIL REPORTS 2018 YEAR-OVER-YEAR REVENUES AND NET PROFIT UP BY 5.1% AND 19.4% RESPECTIVELY, COMPARED TO 2017
HIGHLIGHTS INCLUDE GROWING DEMAND FOR ECONYL® REGENERATED NYLON AND EXPANSION IN NORTH AMERICA
- Revenues at €555.2 million ($625.47 million) in 2018, up 5.1% compared to 2017 at €528.3 million ($595.16 million);
- EBITDA at €77.9 million ($87.76 million) in 2018, up 5.6% compared to 2017 at €73.8 million ($83.14 million);
- Adjusted EBIT at €51.2 million ($57.68 million) in 2018, up 5.8% compared to 2017 at €48.4 million ($54.53 million);
- Net profit for the year at €30.1 million ($33.91 million), up 19.4% compared to 2017 at €25.2 million ($28.39 million);
- Net financial position at December 31, 2018 was €157.3 million ($177.21 million) compared to €165 million ($185.88 million) at September 30, 2018, mainly due to investments for the period
- Proposed dividend distribution: €0.24 ($0.27) per share.
CARTERSVILLE, GA, APRIL 9, 2019 – The Board of Directors of Aquafil S.p.A. [ECNL:IM] approved the Consolidated Financial Statements for 2018.
The Group closed financial year 2018 with an increase in operating indicators compared to 2017. In Q4 2018, revenues were essentially in line with the same period of 2017.
Giulio Bonazzi, Aquafil’s Chairman and Chief Executive Officer stated:
"The importance of the ECONYL® brand continues to grow and the interest in circular economy products is constantly increasing.
Our ECONYL® brand products are increasingly appreciated by the market, especially in the U.S. – and the number of agreements to utilize the brand on finished products has more than doubled in 2018, reaching over seven hundred partners.
Moreover, there is a growing interest towards its application in other industries that use plastic raw materials, such as design objects or packaging, as a result of being increasingly aware of the importance of circular and sustainable ingredients.
We remain absolutely committed to the constant development and diffusion of our circular business model, as shown by the important investments already sustained and planned, which will translate into sustainable growth in the medium term.
The 2018 results showed an improvement in all the economic indicators compared to the previous year, despite the fact that the European market showed a weaker performance in the second half of the year.
In Asia Pacific, on the other hand, growth was particularly significant, capitalizing on the effects of the acquisition of Invista's assets. In North America, the disengagement from the automotive sector of our main competitor has allowed us to seize opportunities and increase market share, while enduring reduced margins deriving from greater logistic costs and customs duties, which we are certain to recover with the increase of production capacity already launched in 2018."
Revenues of the financial year 2018 grew by 5.1%, reaching €555.2 million ($625.47 million) compared to €528.3 million ($528.3 million) in 2017. The revenues in the fourth quarter declined slightly, by 0.6%, totaling €124.3 million ($140.03 million) compared to €125.1 million ($140.93 million) in the same period of 2017.
Such results are almost entirely attributable, both on a yearly and quarterly basis, to the BCF (fiber for carpet flooring) Line’s higher revenues in Asia and the United States, partially penalized by the slowdown of the European market in H2 2018. The minor reduction in revenues during Q4 is mostly attributable to the lower sales levels of the later due to planned in-house use of such polymers for fiber production for the U.S. market.
Operating Profit and Margins
EBITDA grew by 5.6% compared to the previous year and by 3.6% in Q4 2018, rising from €73.8 million ($83.14 million) to €77.9 million ($87.76 million) on an annual basis, and from €16.4 million ($18.5 million) in Q4 2017 to €17.0 million ($19.15 million) in Q4 2018.
The EBITDA increase was mainly attributable to higher global sales generated throughout the reporting period. It is worth noting, incremental sales in North America were impacted by significantly lower margins due to higher shipping and customs costs (8.4%) as they were supported by European manufacturing facilities. The said costs are expected to be recovered thanks to investments registered during 2018, aimed at stepping up production capacity and to be completed in H2 2019.
EBITDA margin amounted to 14% for the year (in line with 2017) and to 13.7% in Q4 (13.1% in Q4 2017) mainly thanks to a better product sales mix.
Net profit for 2018 amounted to €30.1 million ($33.91 million), up by 19.4% compared to €25.2 million ($28.39 million) in 2017.
The increase in net profit was driven by EBITDA growth, as well as by a significant reduction of exchange losses compared to 2017, nonetheless paired with higher non-recurring charges for 2018, mostly relating to the restructuring of the German subsidiary Aqualeuna GmbH.
Net financial position at December 31, 2018 was €157.3 million ($177.21 million) compared to €165 million ($185.88 million) at September 30, 2018 and €112.1 million ($126.29 million) at December 31, 2017. The increase was mainly due to investments for the period – about €71 million ($80 million) mainly referring to: the acquisition of Invista’s assets; the completion of the first Aquafil Carpet Recycling (ACR#1) in Phoenix, Arizona, the partial completion of the second one in Woodland, California and capacity boosting in the United States and China; dividends paid; and higher working capital requirements as a result of the higher sales and the goods shipped to support the North American market, as needed.
Franco Rossi, Aquafil’s U.S. President and Chairman states:
“We continue to show strong growth and expansion in the U.S. market. We opened the first American Aquafil Carpet Recycling facility in Phoenix, Arizona in October 2018 and we have our second U.S. facility underway in Northern California, which is scheduled to open in 2019.
There continues to be growing demand for our carpet flooring materials in the U.S. in the automotive industry. This demand has enabled us to grow North American sales from €90.5 million ($101.95 million) in 2017 to €103.7 million ($116.82 million) in 2018 – a 14.6% increase.
We look forward to continuing to expand our ECONYL® customers across the U.S. in the fashion and carpet industries.”