Ontex Group (ONTEX) Q2 2025 earnings summary

Executive summary

• First half and Q2 results were disappointing, with revenue down 4% year-over-year in H1 2025 due to weak baby care demand in Europe, customer destocking, and supply chain inefficiencies, partially offset by contract gains in North America.

• Adjusted EBITDA margin contracted by 2.2pp to 9.8%, reflecting lower volumes, price carry-over, and higher costs, despite €34 million in cost transformation savings.

• Strategic transformation continues, focusing on operational efficiency, portfolio improvement, and a leaner, performance-driven culture.

• Balance sheet health improved through refinancing and divestments, supporting ongoing investments in innovation.

• Loss for the period was €115 million, driven by a €111 million loss from discontinued operations, mainly the Brazilian divestment.

Financial highlights

• H1 2025 revenue: €880 million (-4.0% LFL); adjusted EBITDA: €86 million (-21.5%); adjusted EBITDA margin: 9.8% (-2.2pp year-over-year).

• Significant Q2 miss, with 75% of the gap from volume shortfalls and 25% from inefficiencies.

• Free cash flow was negative €40 million in H1, with expectations of a €40 million positive swing in H2.

• Operating profit: €43 million, including €5 million in one-off restructuring costs; net finance cost: €43 million.

• Loss from discontinued operations: €111 million, mainly due to the Brazilian business divestment and currency translation adjustments.

Outlook and guidance

• H2 2025 expected to see revenue recovery to prior-year levels, with adjusted EBITDA returning to year-on-year growth and positive free cash flow.

• Full-year 2025 guidance revised: revenue to contract low single digit (previously +3–5% LFL), adjusted EBITDA €200–210 million (previously €232–238 million), free cash flow around zero, leverage at ~2.5x.

• Recovery driven by new contracts, end of destocking, resolved supply chain issues, and lower raw material costs.

• Outlook revised two weeks prior and remains unchanged; no further guidance cuts anticipated if current trends persist.

• New contracts in North America and Europe are on track and expected to drive top-line improvement in H2.