Ontex is embarking on a fundamental transformation aimed at building a more focused, resilient, cash-generating and value-driven business. Following the completion of its strategic review, the company is expanding its productivity program, resetting its North American operations, accelerating growth in adult care in Europe and adopting a more targeted approach to its baby and feminine care businesses.

The transformation includes an additional €40 million in EBITDA savings by the end of 2028, bringing Ontex’s total productivity target to €240 million. The program includes production and logistics optimization, lean manufacturing, simplification initiatives and a streamlined organizational structure, with white-collar positions outside manufacturing expected to decline by more than 20% by the end of 2028.

Ontex is also fundamentally reshaping its North American operations to prioritize profitability and sustainable cash generation, while making adult care the cornerstone of its future growth strategy in Europe.

The strategic repositioning results in a €144 million non-cash impairment, including €51 million related to North American goodwill and €93 million primarily linked to the simplification and adjustment of production capacity in baby and feminine care. In addition, Ontex expects €30–35 million of additional cash restructuring costs over the next 24 months, bringing total restructuring costs to €60–65 million.

Q2 stabilization, but H1 performance remains under pressure

Ontex’s business continued to stabilize during the second quarter, although performance for the first half remained below the prior year following a weaker Q1.

H1 2026 revenue was €854.8 million, down 2.9% year on year, while adjusted EBITDA decreased 9.4% to €78.1 million. The adjusted EBITDA margin declined to 9.1%, compared with 9.8% in H1 2025.

Q2 showed stronger momentum. Revenue was broadly stable at €428.5 million, while adjusted EBITDA increased 11% to €39.5 million. The adjusted EBITDA margin improved to 9.2%, up 0.9 percentage points from Q2 2025.

The company said pricing and productivity actions are gaining momentum, helping offset supply chain inefficiencies and inflationary pressure on input costs. However, persistent cost inflation, higher transportation costs and a more volatile market environment continue to weigh on performance.

H1 financial performance

Revenue declined by 2.9% in H1, with the decrease primarily driven by lower volumes. Adult care was the strongest-performing category, with revenue increasing 1.0% to €410.0 million. Baby care revenue declined 6.8% to €328.0 million, while feminine care revenue fell 6.4% to €106.7 million.

Adjusted EBITDA was €78.1 million, compared with €86.2 million a year earlier. The decline was entirely linked to lower revenue, which had a €12 million negative year-on-year impact, partly offset by productivity measures and a €2 million net improvement in costs.

Operating profit was €117.5 million negative, compared with a €42.8 million profit in H1 2025. The result included €42.2 million of depreciation and amortization, restructuring-related costs and the €143.9 million impairment charge resulting from the strategic review.

Despite lower adjusted EBITDA, Ontex improved its cash generation. Free cash flow turned positive at €6.6 million, compared with negative €40.3 million in H1 2025.

Net working capital declined to €77.3 million, compared with €89.0 million at the end of 2025. Net financial debt decreased from €577.0 million to €539.8 million, while the leverage ratio improved from 3.29x to 3.22x.

Adjusted profit from continuing operations was €8.5 million, compared with €0.3 million in H1 2025. Reported loss for the period was €143 million, primarily reflecting the significant non-cash impairment charges.

Q2 performance shows signs of stabilization

In Q2, revenue was broadly stable year on year. Adult care volumes were overall flat, with strong performance in healthcare offset by softer retail volumes.

Baby care volumes increased 3%, driven mainly by continued growth in baby pants. Retail volumes increased in both Europe and North America, although contract manufacturing volumes in North America declined as anticipated.

Feminine care volumes decreased 4%, primarily due to lower contract manufacturing.

Adjusted EBITDA increased 11% year on year to €39.5 million. Productivity measures more than offset inflationary pressure from higher transportation and raw material costs, while SG&A productivity initiatives generated further savings. The adjusted EBITDA margin improved to 9.2%.

Four strategic shifts to build a new Ontex

Following its strategic review, Ontex has identified four major shifts that will shape the next phase of the company’s transformation:

1. Increase structural efficiency through an expanded Focus to Value program

Ontex is expanding its Focus to Value productivity program with an additional €40 million of savings by the end of 2028, bringing the total target to €240 million.

The program will focus on production and logistics optimization, simplification, lean manufacturing and a streamlined organizational structure. The company expects these measures to reduce white-collar positions outside manufacturing by more than 20% by the end of 2028.

Ontex expects €30–35 million of additional cash restructuring costs, bringing total restructuring costs to €60–65 million over the next 24 months. Around €20 million of these additional costs are expected to impact the second half of 2026.

2. Reset North America to prioritize profitability and cash generation

Ontex is fundamentally changing its approach to North America, shifting the focus from volume growth to profitability and sustainable cash generation.

The company will adjust capacity and its operational setup, review its customer portfolio and explore partnership opportunities. The objective is to establish a right-sized asset base and concentrate investment on segments where Ontex can generate attractive returns.

3. Accelerate adult care growth in Europe

Adult care will become the cornerstone of Ontex’s future growth in Europe.

The company sees adult care as a structurally attractive and growing category in which it already has strong market positions and competitive advantages. Ontex plans to increase investment in capacity, innovation and go-to-market capabilities, with the aim of strengthening its leadership and growing volumes ahead of the market.

4. Adopt a more targeted approach to baby and feminine care in Europe

Ontex will focus its resources on the markets, customers and product segments where it can create sustainable value and generate attractive returns.

The company will further simplify its product and asset portfolio and make targeted adjustments to its manufacturing footprint to improve efficiency and better align capacity with future priorities.

Restructuring and balance sheet adjustments

The strategic transformation has resulted in €144 million of non-cash impairments.

Of this amount, €51 million relates to goodwill in North America, while the remaining €93 million primarily reflects the simplification and adjustment of production capacity in baby and feminine care across North America and Europe.

The company expects additional cash restructuring costs of €30–35 million over the next 24 months, bringing the total expected restructuring costs to €60–65 million.

The transformation will be supported by a newly established Transformation Management Office, with dedicated senior resources in North America and Europe. The office will oversee complex cross-functional initiatives, strengthen governance and help balance day-to-day business requirements with the implementation of the transformation program.

2026 outlook revised

Against the backdrop of increased geopolitical instability, volatile and inflationary input costs and continued shifts in consumer behavior, Ontex has revised its full-year 2026 outlook.

The company now expects:

• Adjusted EBITDA of €165–180 million, compared with €176 million in 2025. This replaces the previous expectation of around 10% growth.
• Free cash flow of negative €25 million to negative €10 million, compared with negative €25 million in 2025. The revised range reflects the lower EBITDA outlook and higher restructuring cash-out associated with the Focus to Value program.
• Leverage below 3.5x at year-end, compared with the previous target of 3.0x or lower.

Ontex expects revenue to remain broadly stable and margins to improve in the second half as pricing actions begin to have a greater impact and productivity initiatives accelerate.

Priorities for the second half of 2026

Ontex’s immediate priorities are to continue pricing actions to offset higher input costs, accelerate productivity and efficiency improvements through the Focus to Value program, ramp up new adult care assets and preserve balance sheet strength while executing its transformation agenda.

The company will also continue to realign its organization and asset base with its future strategic priorities.

Ontex said the strategic review provides a clear path toward a leaner, more efficient and cash-generating business, with further details on its mid-term financial ambitions and the building blocks of its strategy expected to be shared in the coming months.