Ontex Shares Plunge 19% at Close After Sharp Revision of Forecasts
Belgian hygiene products manufacturer Ontex Group experienced a disastrous session this Thursday, December 11, dropping 19.25% to 5.20 euros after revising its annual forecasts downward. The persistent weakness in the demand for baby diapers in October and November has forced the group to revise its adjusted EBITDA between 175 and 180 million euros, compared to the previously expected 200 to 210 million euros. This nearly 13% correction at the midpoint has sent the stock into a downward spiral, now 35% below its level from a year ago.
Revenue Growth Forecasts Revised Due to Unexpected Consumer Demand Drop
Ontex Group has revised its revenue growth forecasts for the year due to an unexpected drop in consumer demand for baby care products, observed in October and November. The stock ended the session at 5.20 euros, down 19.25% from the previous day's close of 6.44 euros. The share of capital traded reached 1.44%, indicating a strong movement of investor distrust. This decrease in demand was observed in Europe and North America, two strategic areas for the group. Over a week, the decline now stands at 18.37%, while over three months, the drop reaches 18.5%, signaling a structural deterioration of the situation. The annual performance becomes clearly negative with a drop of 35.32%, illustrating the persistent difficulties of the disposable hygiene sector facing the erosion of consumption.
Management Accelerates Efficiency Improvement Initiative Amid Market Shifts
In response to market developments, Ontex's management has decided to accelerate an efficiency improvement initiative covering operations and SG&A, with a target of 200 million euros over three years. The implementation costs are estimated at less than 40 million euros. This cost-cutting drive aims to restore competitiveness and support margin improvement in a context of intense promotional pressure from major brands. Concurrently, Ontex's board has appointed Laurent Nielly as the next CEO, taking over from Gustavo Calvo Paz in May 2026. Laurent Nielly, currently President of the Europe division, has over 25 years of experience gained at P&G, McKinsey, PepsiCo, and Coty. This leadership change comes at a critical time when the financial leverage ratio is expected to climb to about 3.2 times from the initially expected 2.5 times, increasing concerns about the group's financial solidity.
Stock Price Now Significantly Below 200-Day Moving Average
The price of 5.20 euros is now significantly below the 200-day moving average set at 7.03 euros, confirming a long-term downward trend firmly in place. The technical support identified at 6.08 euros was violently breached, potentially paving the way for further declines in the absence of positive catalysts. The RSI is at 64, retreating from a recent overbought level, but not yet signaling overselling that might attract short-term buyers. The Bollinger Bands, which normally frame the evolution between 6.02 euros and 6.68 euros, have been shattered downwards, demonstrating a major technical break. The Chaikin Money Flow (CMF) at 0.14 indicates moderate buying pressure, insufficient to offset the severity of the day's correction. The 50-day moving average, positioned at 6.29 euros, now represents the first resistance to be reclaimed in hopes of stabilizing the stock and giving some respite to a case battered by ground reality.
