Ontex Group (ONTEX) Q3 2024 earnings summary

Executive summary

• Q3 delivered 4% volume growth, with double-digit increases in adult care and North America baby care, supported by innovation and new contracts.

• Achieved key transformation milestones, including successful social negotiations in Belgium and agreement to sell Brazilian business.

• Adjusted EBITDA margin rose to 12%, up 2.4 percentage points year-over-year, with adjusted EBITDA up 29%.

• Leverage reduced to 2.4x, with net debt at €579 million, reflecting strong EBITDA and asset disposals.

• 2024 outlook confirmed for margin, free cash flow, and leverage, with revenue growth guidance updated.

Financial highlights

• Q3 revenue from continuing operations was €468 million, up 1.7% like-for-like and 2.4% year-over-year, driven by 4.4% volume/mix improvement.

• Adjusted EBITDA reached €56 million in Q3, up 29% year-over-year, with margin at 12%.

• Cost transformation program delivered €40 million in savings, reducing operating costs by 4%.

• Sales prices declined 2.6% year-over-year due to lower raw material costs, but stabilized sequentially.

• Net financial debt reduced by €9 million in the quarter to €579 million; leverage ratio improved to 2.4x.

Outlook and guidance

• 2024 outlook confirmed: adjusted EBITDA margin at 12%, free cash flow above €20 million, leverage below 2.5x.

• Revenue growth guidance revised to 2%-3% due to phased onboarding of new North America customers.

• Strong double-digit growth in North America baby care expected to continue into 2025 and 2026.