Ontex’s revenue was €916 million (~$991 million) in the first half of 2024, up 3 per cent like for like, with higher, volume-driven, adult care sales of 11 per cent, more than compensating for a price-related decrease in baby care and in feminine care of 2 per cent and 3 per cent respectively. Forex fluctuations had no meaningful net effect, leaving revenue growth at 3 per cent overall compared to the first half of 2023, and 1 per cent compared to the second half.

Volumes were up 5 per cent, including mix effects, driven by strong double-digit volume growth in North America and in selected product categories.

The strong increase in North America contrasted with the overall stable demand for baby care products in the region, thereby highlighting Ontex’s share gains. These were based on new contracts that started during the second half of 2023, the first quarter of 2024 and at the end of the second quarter. Further volume growth in the year will be supported by additional secured contracts. The year-on-year comparison was partly helped by customer destocking in the first quarter of 2023 which depressed order levels at that time.

In Europe, overall demand for baby care products weakened, while they were stable for feminine care and growing for adult care, in line with the demographic evolution. While promotional activities by branded players, temper the previous share gains of retail brands in baby diapers, the latter continue to outperform in baby pants and in the feminine and adult category. Ontex’s sales volumes in Europe overall reflected these market trends, with lower sales in baby diapers and strong increases in baby pants and in adult care, especially in the healthcare channel, the company said in a press release.

Prices were 2 per cent lower on average. While in certain categories, such as healthcare, prices remained relatively stable, as these contracts typically have a longer term and are more rigid, prices have been coming down sequentially in other categories since the second half of 2023. This was expected, in view of the raw material price index decreases which had started earlier that year.

“We have achieved several key strategic milestones in the first half year. Two divestments were successfully completed, sharpening our focus on core markets further, and our cost transformation program delivered solid efficiency gains yet again. This consistent delivery, coupled with our sustainable innovation pipeline, allows us to grow our business in North America and strengthen it in Europe, which gives me confidence to deliver a strong year. Aiming to further strengthen our competitive position, we announced the intention to restructure our Belgian production and distribution activities. These measures will allow us to further reinforce and grow our business sustainably, while driving profitability and cash flow generation up,” Gustavo Calvo Paz, Ontex’s CEO, said.

Based on the solid delivery in the first half of 2024, and further progress made on Ontex’s structural transformation, Ontex’s management revises its previously iterated guidance upward, expecting revenue to grow in a range of 4 per cent to 5 per cent like for like (previously: by low-single-digit); adjusted EBITDA margin of 12 per cent (previously: in a range of 11 per cent to 12 per cent).