Ontex closed fiscal year 2025 with revenue of €1,762 million, down 9% on a comparable basis, in a context marked by a contraction in demand for baby diapers in Europe and North America. Pressure on volumes weighed on profitability, bringing the adjusted EBITDA margin to 10%, two percentage points below the level recorded in the previous year.
Performance mainly reflects the slowdown in private-label baby care products, amid a weakened consumption environment and intensified promotional activity by leading brands. The company also faced customer inventory adjustments and supply chain constraints, affecting multiple categories.
While the feminine hygiene division posted a slight decline, in line with the market, the adult hygiene category maintained growth, albeit at a more moderate pace, reinforcing the positive structural trend associated with population aging.
Adjusted EBITDA totaled €176 million, compared to €223 million in 2024. The contraction is directly linked to lower revenue and reduced fixed-cost absorption.
The cost transformation program helped mitigate part of the inflationary pressure on raw materials and operating expenses but was not sufficient to fully offset volume losses.
Operating profit reached €79 million, including €(19) million in extraordinary costs related to restructurings and asset impairments, a lower amount than recorded in the prior year.
Free cash flow was negative at €25 million, impacted by lower EBITDA and still-elevated restructuring cash outflows, partially offset by reduced capital expenditures.
DIVESTMENTS REDUCE DEBT, BUT LEVERAGE INCREASES
Throughout 2025, Ontex completed the divestment of its remaining operations in emerging markets, selling its units in Brazil and Turkey and generating combined net proceeds of €131 million.
As a result, net financial debt decreased to €577 million, down 6% year over year. Nevertheless, the leverage ratio increased to 3.29x, reflecting lower EBITDA generation during the period.
On the financial front, the company also refinanced its capital structure through the issuance of a €400 million bond maturing in 2030, replacing previous debt.
FOURTH QUARTER CONFIRMS A CHALLENGING ENVIRONMENT
In the fourth quarter, revenue totaled €436 million, a 6% decline year over year. The adjusted EBITDA margin fell to 8.9%, highlighting the ongoing pressure on volumes and profitability.
Demand for baby care products remained weak in both Europe and North America. In contract manufacturing, the impact was more pronounced, while in private labels, new contracts helped partially mitigate the market contraction.
In December, the company announced a leadership transition, with Laurent Nielly taking over as CEO.
“I am honored by the trust placed in me by the Board to lead the company at this challenging time. Our performance in 2025 clearly did not meet expectations,” said Laurent Nielly, CEO of Ontex. “Our goal is to return to adjusted EBITDA growth while continuing to seek additional momentum to re-establish the foundations for sustainable growth throughout the year. We have strong assets and people, and I am confident that the work already underway will allow us to unlock the intrinsic value of Ontex,” he added.
The company stated that the strategic review is ongoing and that further updates will be shared throughout the process.
OUTLOOK FOR 2026
For 2026, Ontex expects a still-competitive environment in the baby diaper category, with continued promotional pressure. Conversely, the adult hygiene segment should remain supported by demographic factors.
The company anticipates approximately 10% growth in adjusted EBITDA over the year, with gradual improvement following a still-pressured first quarter.
Targets also include generating positive free cash flow and reducing leverage to 3x or less by the end of 2026, supported by the expansion of the operational efficiency program and the implementation of recently secured contracts.
