Ontex Lowers Annual Forecasts Due to Weakened Demand
Ontex Group NV has announced a downward revision of its annual revenue growth expectations following a decrease in baby product demand during October and November.
Unexpected Drop in Consumer Demand
According to the statement, Ontex Group NV has revised its revenue growth forecasts for the year due to an unexpected decline in consumer demand for baby care products. This decrease was observed during the months of October and November, impacting performance in Europe and North America. Anticipating a single-digit revenue decline compared to the fourth quarter of 2024, Ontex had expected stable performance with new contracts offsetting weaker market conditions. However, reduced consumption of private label brands and sustained promotional activities by A brands contributed to this downward revision.
Efficiency Improvement Initiative Accelerated
In response to market changes and following a recent divestiture, Ontex's management has decided to accelerate an efficiency improvement initiative covering operations and SG&A, targeting 200 million euros over three years. The implementation costs are estimated at less than 40 million euros. This initiative aims to enhance the group's competitiveness and support margin improvement as well as cash flow generation. Full results and outlook for 2026 will be detailed in February.
CEO Comments on Market Conditions
According to Gustavo Calvo Paz, CEO of Ontex, 'Consumer demand has decreased throughout the year, particularly for baby diapers in our key markets, leading us to revise our annual forecasts.' Although the company has made progress in strategic and operational transformation, current market conditions and recent results require accelerated action on the announced efficiency improvement initiative.
