Ontex: EBITDA Down 24% in Q1, Yet 2026 Guidance Maintained
Ontex reported its first quarter 2026 results on Wednesday, marked by a decline in revenue and a significant contraction in margins. The care group (baby care, feminine care, adult care) recorded a revenue of 426 million euros, down 4% year-on-year, while adjusted EBITDA was 39 million euros, 24% less than the previous year. This profitability deterioration reflects higher raw material and energy costs, which the group was only partially able to offset through pricing measures and cost optimization. However, the group maintains its guidance for 2026, relying on its ability to mitigate external shocks and the acceleration of its strategic plan.
Revenue Down, Margins Squeezed by Rising Costs
First quarter revenue stood at 426 million euros, down 2% from the fourth quarter of 2025 and 4% on a year-over-year comparable basis. This contraction is entirely due to a decrease in volumes, with the price-mix impact remaining broadly stable. Adult volumes increased by 2%, driven by growth in the retail channel in Europe and stability in the healthcare segment. However, feminine volumes declined by 4%, in line with slowed market demand. Baby care suffered the most significant drop with an 11% decrease in volumes, a consequence of order timing shifts in the first two quarters of 2025 and persistent promotions by leading retail brands. Adjusted EBITDA fell sharply to 39 million euros compared to 51 million a year earlier, a contraction of 24%. The adjusted EBITDA margin dropped from 11.3% to 9.1%, a compression of 2.2 percentage points.
Costs Catch Up with Prices: Quarterly Balance Remains Fragile
The decline in EBITDA reflects two movements. On one hand, the decrease in revenue represents a negative impact of 8 million euros. On the other hand, net costs increased by 5 million euros. In terms of raw materials, indices for certain materials (fibers, SAP, nonwovens) decreased, but counterparts (backs, packaging, and other raw materials) became more expensive. Meanwhile, operational costs increased due to general inflation, higher transportation fees, and some residual inefficiencies in the supply chain. The cost transformation program partially offset these overcharges, as did the stability in commercial and administrative expenses, where wage inflation was counterbalanced by cost-saving initiatives. Compared to the fourth quarter of 2025, however, the margin improved by 0.2 percentage points, signaling progress in stabilizing business and operations.
Maintaining 2026 Guidance: Group Counts on Managing Overhead Costs and Secured Contracts
Ontex maintains its 2026 guidance despite an environment marked by unstable geopolitical circumstances and persistent low demand in baby care. The group counts on offsetting market pressures with new or previously secured contracts, particularly in North America's retail segment where contractual gains continued to offset the decline in demand from distributor brands. Facing rising prices for energy and raw materials (notably petroleum derivatives), Ontex is implementing pricing actions and transport surcharges. The group also announces the acceleration of its restructuring plan, whose anticipated savings will contribute to achieving the guidance. A more comprehensive strategic plan, currently in the diagnostic phase with the help of external advisors, will be detailed during the second quarter results presentation. The cash position has improved to 262 million euros (from 240 million at the beginning of the year), while net debt stands at 550 million euros. The leverage ratio is set at 3.36x, slightly up from 3.29x at the start of the year, due to the lower EBITDA contribution over the last twelve months.
