Fabbrica Italiana Lapis ed Affini (FILA) Q4 2025 earnings summary

Executive summary

• FY 2025 was marked by significant challenges, including sudden tariffs in the U.S., unprecedented school budget cuts, illegal imports in Mexico, and negative FX impacts, yet overall results were satisfactory with resilient profitability and cash flow.

• U.S. and Mexico, representing a major portion of the balance sheet, faced headwinds but maintained profitability and cash generation.

• Europe showed resilience and growth, especially in France, with positive momentum in H2 and expectations for continued improvement.

• Strategic reorganization in the U.K. and a key acquisition in Italy (Seven) are expected to drive future profitability.

• Indian operations delivered over 20% top-line growth and strong EBITDA, supporting group performance.

Financial highlights

• Core business sales declined 3.1% year-over-year to €572.2m on a comparable FX basis, with Q4 sales down 1.4%.

• Adjusted EBITDA was €105.2m, down 11.0% year-over-year, with a stable margin of 18.4%.

• Adjusted net profit was €33.0m, down from €40.9m in 2024, impacted by €6.8m in Forex losses and €12.2m net bank interest expenses.

• Free cash flow to equity was €35.6m, or €47m excluding extraordinary US tariffs and China reorganization, at the high end of guidance.

• Net bank debt at year-end was €138.2m (up €13.7m), leverage ratio 1.3x.

Outlook and guidance

• Double-digit growth in revenue and adjusted EBITDA expected for 2026, including the contribution from Seven, assuming stable tariffs and USD/EUR at 1.16.

• Free cash flow to equity guidance remains €40–50m.

• EBITDA consensus of €110m for 2026 is considered reasonable.

• Positive momentum in Europe and stabilization in Mexico and North America anticipated.

• FY 2026 expected to remain challenging due to geopolitical tensions, inflation, and US tariff uncertainty.