Ontex lowers EBITDA forecast to €143-148M, third-quarter EBITDA down 49%
The Belgian manufacturer of disposable hygiene products saw its purchase costs rise faster than its selling prices in the third quarter. The revision of its forecasts also incorporates the exit of its Russian subsidiary from its consolidation scope.
Adjusted EBITDA down 49% due to cost pressure
Ontex published its third-quarter results on October 28, 2026. Revenue amounted to €427.9M, compared with €445.4M a year earlier, a decline of 3.9% on a reported basis and 4.4% at constant scope and exchange rates. Volumes fell by 5.1%, while price and mix effects contributed positively by 0.7%. Compared with the previous quarter, revenues remained stable for the third consecutive quarter. By business segment, adult hygiene volumes remained broadly stable, with demand from the healthcare channel offsetting a decline in retail distribution. They fell 9% in baby hygiene and 12% in feminine hygiene, notably due to the loss of certain contracts abroad. Adjusted EBITDA declined 49%, to €25.9M from €50.6M. The corresponding margin fell from 11.4% to 6.1%, a decrease of 5.3 percentage points. Operating income was limited to €0.4M, compared with €29.3M in the third quarter of 2025. According to the company, raw material and transportation costs reached a level approximately 10% higher during the quarter than at the beginning of the year, notably for nonwovens, superabsorbent polymers, packaging and fuel. Price increases were implemented more gradually than expected. Over the first nine months, adjusted EBITDA reached €104.1M, down 24%, for a margin of 8.1% compared with 10.3%. Operating income showed a loss of €117.2M, compared with a profit of €72.1M, following asset write-downs of €143.9M. The group consequently lowered its annual adjusted EBITDA forecast, now expected between €143M and €148M, down from €165M to €180M previously. When publishing its annual results on February 12, 2026, management had targeted 10% adjusted EBITDA growth in 2026.
Leverage raised to 3.75x, covenant negotiations initiated
Net financial debt fell to €535.8M at the end of September, compared with €540M at the end of June and €577M at the end of 2025. According to Ontex, the EBITDA decline was offset by a favorable change in working capital requirements, including extended supplier payment terms, and controlled investments. The group raised its annual free cash-flow forecast, now expected between -€10M and €0M, compared with -€25M to -€10M previously. At the end of September, liquidity stood at €272M, composed of €82M in cash and €190M undrawn on the revolving credit line. The decline in adjusted EBITDA on a twelve-month rolling basis, to €142.9M from €175.6M at the end of 2025, brought the leverage ratio to 3.75x, up from 3.22x at the end of June. The ceiling expected at year-end moves from 3.5x to 3.75x, which should allow the group to remain within covenant limits. Ontex has entered into discussions with the banks of its revolving credit line (maximum €270M, until 2029) to obtain a temporary waiver of the leverage covenant, with the objective of concluding before year-end. The group also has a €400M bond issue maturing in 2030.
Russian subsidiary deconsolidation planned, adjusted EBITDA of €39-44M expected in fourth quarter
Placed under provisional administration under a Russian presidential decree of October 15, 2026, Ontex's Russian subsidiary is now controlled by an administrator appointed by the authorities. It will be deconsolidated in the fourth quarter. At the end of September, this entity held €19M in cash and €30M in lease liabilities. Its exit from the scope reduces net debt by €10M on a pro forma basis and should reduce fourth-quarter adjusted EBITDA by approximately €2M. On October 16, 2026, the group had indicated that it represented approximately 5% of its revenue. For the final three months of the year, Ontex targets adjusted EBITDA between €39M and €44M, or €13M to €18M more than in the third quarter. The group is relying on confirmed price increases, slightly lower raw material costs, seasonally higher volumes and new cost savings. The "Focus to Value" program generated €45M in savings over nine months, including €16M in the third quarter, against a total target of €240M by the end of 2028. Approximately one-third of the reduction of more than 20% in non-production administrative posts has already been achieved or is underway.
