Ontex posted Q1 2026 revenue of €426 million, down 4% like-for-like year on year, reflecting softer market demand across key segments. The decline was driven entirely by lower volumes, while pricing and product mix remained broadly stable.

Performance was mixed across categories. Adult care volumes increased by 2%, supported by continued retail channel growth in Europe and stable healthcare demand. However, feminine care declined by 4%, while baby care fell sharply by 11%, impacted by weaker European demand and strong promotional activity from branded competitors. The company noted that retailer-brand baby care demand remained under pressure globally. Contract manufacturing volumes also decreased as expected, and some contracts were exited in overseas markets.

Including a small negative foreign exchange impact, mainly from US dollar depreciation, total reported revenue declined by 5%.

Adjusted EBITDA fell to €39 million, down 24% year on year, with the margin contracting to 9.1% (-2.2 percentage points). The decline was driven by lower volumes and higher costs. Raw material trends were mixed: while prices for fluff, SAP, and nonwovens declined, this was more than offset by higher costs for packaging materials and backsheets. In addition, inflation in transport and other operating expenses, as well as residual supply chain inefficiencies, weighed on profitability.

Importantly, Ontex highlighted that geopolitical instability is now an additional pressure factor, contributing to cost inflation across its supply chain. The company specifically pointed to broader geopolitical and economic tensions impacting the supply base, which are driving higher energy costs and increased volatility in oil-derived raw materials. These pressures are affecting manufacturing input costs and logistics, further compressing margins. The company is responding through pricing actions and transportation surcharges to partially offset these effects.

Despite these headwinds, EBITDA was stable compared to Q4 2025, indicating early signs of operational stabilization. SG&A costs remained broadly flat, as internal savings offset wage inflation.

Operating profit fell to €15 million, compared to €29 million a year earlier, reflecting lower EBITDA and €3 million in restructuring charges linked to new efficiency initiatives.

From a financial standpoint, net debt decreased to €550 million, down from €577 million at the start of the year, supported by working capital optimization and cash repatriation from Algeria. Liquidity improved to €262 million, although leverage rose slightly to 3.36x EBITDA due to weaker earnings.

Looking ahead, Ontex confirmed that it continues to operate in a challenging environment shaped by weak baby care demand, strong A-brand promotions, and persistent cost inflation driven in part by geopolitical conditions and energy market volatility. These external pressures are expected to continue throughout 2026.

Nevertheless, the company maintained its full-year outlook, expecting:

• ~10% growth in adjusted EBITDA, driven by efficiency gains, pricing actions, and stable volumes
• Positive free cash flow, supported by lower capital expenditure and improved working capital
• Gradual leverage reduction to around 3x or lower by year-end

Ontex is also advancing a broader strategic review aimed at improving profitability and cash generation. The review has already identified opportunities in cost optimization and operational efficiency.

As part of this transformation, the company is accelerating:

• A 15% reduction in SG&A roles over 12–18 months
• Capacity adjustments in Europe and North America, including exiting baby diaper production in Australia
• Further working capital reductions of 0.5 percentage points of revenue

As part of near-term execution, Ontex is accelerating several initiatives:

• Organizational restructuring, targeting a ~15% reduction in SG&A positions over 12–18 months
• Capacity optimization, aligning production with demand in Europe and North America, including the planned exit from baby diaper production in Australia by year-end
• Working capital improvements, aiming for a further 0.5 percentage point reduction relative to revenue

These measures will require about €10 million in restructuring cash costs in 2026, in addition to prior provisions.

CEO Laurent Nielly said the company is not yet at its desired performance level but emphasized resilience and progress. He noted that despite geopolitical and market headwinds, Ontex’s cost actions, pricing discipline, and strategic transformation remain on track to support recovery in 2026 and beyond.