Ontex Group (ONTEX) Q4 2025 earnings summary

Executive summary

• Revenue declined 4.9% like-for-like in 2025 to €1,762 million, with adjusted EBITDA margin down 2 percentage points to 10%, mainly due to lower baby care volumes, supply chain constraints, and challenging market conditions.

• Free cash flow turned negative at €(25) million, but net debt was reduced by 6% to €577 million, aided by €131 million in divestment proceeds.

• Leverage increased to 3.3x from 2.5x in 2024, still below the 3.5x covenant, due to lower EBITDA and reclassification of Algerian cash.

• Strategic review initiated and new CEO appointed to sharpen focus, with 2026 priorities set on profit growth, cash generation, and cost transformation.

Financial highlights

• Baby care volumes dropped 12%, with retailer brand markets down in Europe and North America due to low consumer confidence, lower birth rates, and intense A-brand promotions.

• Adult care volumes grew 1% like-for-like, now representing nearly half of total revenues.

• Feminine care volumes declined 2%–2.4%, reflecting market trends.

• Adjusted profit from continuing operations was €34 million, down from €76 million in 2024.

• Non-cash loss of €190–210 million from divested Brazil and Turkey businesses due to currency translation reserves.

Outlook and guidance

• 2026 market conditions expected to remain challenging, especially for baby care, with low consumer confidence and continued A-brand promotions.

• Adjusted EBITDA targeted to improve by ~10%, with gradual improvement expected from Q2 onwards; Q1 to be in line with Q4 2025.

• Free cash flow after financing expected to return to positive territory, and leverage to decrease to 3x or below by year-end.

• CapEx guidance remains at 3.5%–4.5% of revenue.

• Non-recurring cash outflows expected to be around €20–30 million in 2026, mainly for Belgian footprint restructuring.