- Adjusted EBITDA Growth: Increased 11% YoY to $72.1 million, driven by new business wins and organic volume growth.
- Asia Pacific Performance: Net sales rose 13% YoY, with 10 consecutive quarters of organic volume growth.
- Margin Improvements: EMEA gross margins improved 280 bps, while Asia Pacific saw organic margin growth despite flat overall gross margin.
- Shareholder Returns: $76 million returned to shareholders in 2025 via $5 million share repurchases and $9 million in dividends.
- Cost Savings Initiatives: Closure of German facility expected to save $2 million in 2026 and $5 million annually from 2027.
Regional Performance
The Asia Pacific region saw a 13% increase in net sales for the full year, driven by strong organic volume growth. The EMEA region saw a 280 basis point improvement in gross margins, while Asia Pacific had margin growth on an organic basis. The Americas region saw underlying growth of around 1% down in the fourth quarter, excluding the customer outage.
Operational Highlights
The company generated $47 million in operating cash flow in the fourth quarter, down from $63 million in the prior year period, due to higher restructuring costs and negative impacts to working capital. Quaker Houghton announced the closure of its German manufacturing facility, expecting cost savings of $2 million in 2026 and $5 million annually from 2027.
Outlook and Guidance
Looking forward, the company expects underlying markets to remain flat in 2026, with potential for incremental growth in the second half of the year. Quaker Houghton remains confident in delivering net share gains within its target range of 2% to 4%, driven by its sales pipeline and recent business wins. Analysts estimate next year's revenue growth at 4.2%.
Valuation Metrics
Quaker Houghton's current valuation metrics indicate a 'P/E Ratio' of -1102.07, 'P/B Ratio' of 2.0, 'P/S Ratio' of 1.45, and 'EV/EBITDA' of 28.26. The company's 'Net Debt / EBITDA' ratio stands at 5.83, indicating a relatively high level of debt. As per Tom Coler, "we expect margin growth in '26. Our product margin remains healthy in all 3 regions." The company's margin outlook is expected to improve, with gross margins recovering to the 36-37% range.