Belgian company Ontex's revenue falls 3.8% in Q3 FY25

Volumes were down 3.9 per cent. Baby care volumes were 11 per cent lower, which was overall in line with softer demand in the quarter, especially for retailer brands, which continue to be affected by intense promotional activities by A-brands in certain countries. While Ontex’s volumes in North America were down, they outperformed market demand due to the start-up of new contract gains in the retail channel. Contract manufacturing dropped significantly, however. In Europe, baby care volumes were also lower, except for baby pants.

Sales prices, including a slightly positive mix effect, were flat year on year across regions and categories. Prices have been largely stable since mid-2024.

Adjusted EBITDA was €51 million (~$59.16 million) in the third quarter, resulting in a margin of 11.4 per cent. The year-on-year decrease of €6 million (~$6.96 million) is entirely attributable to the revenue drop. The cost transformation programme delivered €16 million (~$18.56 million) net savings, which fully offset higher raw material prices and mostly inflation-driven operating cost increases.

Compared to the second quarter, the company’s adjusted EBITDA improved by €15 million (~$17.4 million) and margin by 3.0 percentage point, thanks to the combined effect of revenue recovery and cost improvement.

“The significant sequential improvement in profitability in the third quarter as a result of new contracts and strong execution of our transformation program, gives us confidence that we are on target to deliver a strong end to 2025 despite soft market conditions. Also, importantly, Ontex is becoming stronger and seeing significant opportunities which make me excited as we look to the future,” Gustavo Calvo Paz, Ontex’s CEO, said.

Although market conditions remained soft in the third quarter, Ontex maintains its full-year outlook as shared in July, with cost efficiencies and volume gains as the main drivers. The company expects revenue to decline by a low single-digit percentage on a like-for-like basis, adjusted EBITDA to range between €200 million (~$232 million) and €210 million (~$243.6 million), free cash flow to be around zero, and leverage to end the year at approximately 2.5x.

ALCHEMPro News Desk (RR)