Ontex Lowers Annual Revenue Forecast

Financial Forecast Revision

Ontex Group NV reports that the decrease in baby care product sales has led to a revision of the financial forecasts for the full year 2025. The company now anticipates a mid-single-digit decline in revenue for the year, instead of the previously expected low-single-digit decline. Fourth quarter revenue is expected to see a high single-digit decrease compared to the same period last year. Private label sales have declined in both Europe and North America, with weak consumer demand and increased competition from major brands. As a result, Ontex expects an adjusted EBITDA of between 175 and 180 million euros, representing a margin of about 10%, compared to a previous estimate of 200 to 210 million euros. Free cash flow is expected to be around -35 million euros, while the debt ratio is projected at 3.2x, compared to an initially expected 2.5x.

Operational Efficiency Initiative

In response to the current market situation, Ontex has decided to accelerate an initiative to improve operational efficiency and general administration, amounting to 200 million euros over three years. One-time implementation costs are expected to remain below 40 million euros. This strategy aims to increase the company's competitiveness and support margin improvement and cash flow generation. More details on this initiative will be shared in February along with annual results and outlook for 2026.

CEO's Perspective on Market Challenges

According to Ontex CEO Gustavo Calvo Paz, consumer demand has weakened over the year, particularly for baby diapers in the company's key markets. Despite significant progress in strategic and operational transformation and the acquisition of new contracts, challenging market conditions have forced Ontex to revise its annual forecasts. The company plans to maintain a double-digit margin for 2025 despite market headwinds. The group is now focusing on improving efficiency to strengthen its foundations and meet current challenges.