Press release
Regulated Information

Press release H1 and HY statement (pdf version)



  • Resilient revenue: €1,053 million reported; 2.0% LFL decrease due to Q2 demand slowdown
  • Strong increase in Adjusted EBITDA: €126 million (+13%) and Adj. EBITDA margin: 12.0% (+199 bps), reflecting significant gross margin improvement due to lower raw material costs and ongoing delivery of T2G despite lower volume, COVID-19 disruptions and costs, as well as strong currency headwinds
    • T2G delivered €49 million of gross value creation at constant currencies in H1 2020
  • Adjusted EPS up 34% to €0.61 on the back of higher operating profit
  • Positive free cash flow generation and further decrease in leverage
  • US expansion strategy advances: Greenfield project launched, feminine care acquisition completed in July

Aalst-Erembodegem, July 30, 2020 – Ontex Group NV (Euronext Brussels: ONTEX) today announced its results for the three months and six months ending June 30, 2020.

Thierry Navarre, Ontex CEO, commented: “Ontex delivered a meaningful improvement in H1 operating performance amid the exceptional context of the COVID-19 pandemic, with an unprecedented surge and subsequent unwinding of demand, as well as extreme currency headwinds. While lower market demand weighs on our sales, we generated a substantial improvement in profitability, from gross margin to net profit, on the back of strong delivery from our T2G plan. I want to thank Ontex’s staff across the group and all our business partners, who are working tirelessly to ensure we supply daily-use personal hygiene products to our consumers and customers. While addressing current challenges, we invested to drive future growth, as attested by our recent announcement of a new manufacturing facility and the feminine care acquisition, both in the US. In an environment that remains uncertain, we will continue all efforts to protect our people, improve operations, and enhance profitability and cash generation.”

Key Financials for H1 2020 and Q2 2020

  Six Months Second Quarter
€ in million, except per share data 2020 2019 % Change   2020 2019 % Change
LFL Revenue 1,091.7 1,114.3 -2.0%   508.5 568.1 -10.5%
Reported Revenue 1,053.4 1,114.3 -5.5%   479.2 568.1 -15.6%
Adjusted EBITDA at constant currencies 157.7 111.0 +42.0% 79.2 58.1 +36.4%
Adjusted EBITDA Margin at constant currencies 14.4% 10.0% +448 bps   15.6% 10.2% +536 bps
Adjusted EBITDA 125.9 111.0 +13.4% 59.9 58.1 +3.1%
Adj. EBITDA Margin 12.0% 10.0% +199 bps   12.5% 10.2% +228 bps


  Six Months
in € million, except per share data 2020 2019 % Change
Free Cash Flow 28.7 52.1 -44.9%
Net Debt 853.4 898.7 -5.0%
Net Debt / LTM Adj. EBITDA 3.28x 3.71x -0.43x
Adj. profit/(loss) for the period 49.2 36.5 +34.8%
Adjusted EPS 0.61 0.45 +34.4%
Non-recurring income and expenses (10.8) (39.6) -72.7%
Profit/(Loss) for the period 41.1 8.4 n. m.
Basic EPS 0.51 0.10 n. m.

N.M.: not meaningful

Notes which apply to this document

Unless otherwise indicated, all comments in this document on changes in revenue are on a like-for-like basis (at constant currencies).

Definitions of Alternative Performance Measures (APMs) in this document can be found in section 6.16 of the Condensed Consolidated Interim Financial Statements.

Due to rounding, numbers presented throughout this press release may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Improved operating profitability in H1 2020

Solid profitability in a challenging environment

LFL revenue decreased 2.0% in H1 2020, as strong growth at the end of Q1 was followed by a slowdown in market demand particulary in April and May, with sequential improvement in June. Despite lower volume, we grew gross profit and gross margin meangingfully thanks to T2G initiatives and lower raw material indices. This strong gross profit improvement underpinned Adjusted EBITDA growth of 13.4% to €125.9 milllion, yielding an Adjusted EBITDA margin of 12.0%. At constant currencies, Adjusted EBITDA grew 42.0% to €157.7 milllion, and the related margin was 14.4%. Adjusted EPS was up 34% at reported currencies.

Positive free cash flow generation and improved leverage

The Group’s focus on cash generation resulted in free cash flow of €29 million in H1 2020, which reflects rigorous working capital and capex management, and comes on top of the €110 million free cash flow generated in FY 2019. Net debt at end June 2020 of €853 million (or €718 million excluding IFRS 16 Leases) decreased by €8 million versus end of December 2019, and by €18 million versus end of March 2020, while factoring at the end of H1 2020 stood at €157 million, down €4 million vs. end-2019. As a consequence of stronger Last Twelve Months Adjusted EBITDA and lower net debt at end of period, reported leverage improved to 3.28x from 3.51x at end-December 2019.


Transform to Grow (T2G) Progress Report

Despite the execution challenges raised by the pandemic, we delivered through T2G €49 million of gross gains to Adjusted EBITDA at constant currencies in H1 2020

We made good progress in several areas: The operational workstreams delivered €57 million of gross gains at constant currencies in H1 2020 versus the same period last year of which c. 80% was generated from procurement initiatives, excluding any benefit from lower raw material indices. To achieve these gains we have been reinforcing our procurement, production engineering and management resources that are supporting our operational transformation. Whereas we are ahead of our targets in procurement, achieving our efficiency and cost improvement ambitions in manufacturing and supply chain requires a further enhancement of our skills, processes and systems, and therefore is taking more time and efforts than initially anticipated.

In a very difficult market context, the commercial workstreams are not yet delivering the expected benefits. We continued to invest in sales and marketing to support Ontex brands and upgrade our commercial capabilities. Price/mix improved in the first half but did not fully offset the volume shortfall due to lower market demand. Altogether, sales and marketing investments and the unfavorable volume/price/mix had a €8 million negative impact on the T2G gross gains for the first half.

COVID-19 has impacted the ability to implement certain T2G initiatives, in particular those related to enhanced customer value propositions and product mix optimization. This is due to adjusted priorities by customers and Ontex in the unprecedented demand environment in H1 2020, restrictions on travel, access to production lines for innovation and saving projects, and postponed joint business development initiatives with customers and suppliers. Actions are being taken to ensure these initiatives get back on track.

Overall, taking into account the achievements to date and the delays mentioned above, we are on track to deliver the announced improvement objectives by 2021, while remaining within the foreseen budget of €85 million for one-off costs across 2019 – 2021. Also, in line with our last update on the subject, Group capital expenditure for 2020 and 2021 including T2G-specific projects, will not exceed 5% of sales. This is a decrease versus our initial plan, reflecting the in-depth review and optimization of our total capital expenditure program carried out in the last 12 months.


Operating in the COVID-19 environment

The personal hygiene market in Europe experienced an unforeseen surge in demand towards the end of Q1 with category revenue up double-digit in March, followed by double-digit decreases in April and May.

The decrease in demand for the tracked channels was impacted by:

  • customers and consumers using their stock of products after stockpiling
  • lower personal hygiene consumption due to restricted consumer mobility
  • lower store traffic due to lockdown-related closures and consumer health and safety concerns
  • postponement of promotions and new product launches by retailers
  • higher online sales

Low visibility on demand put significant pressure on personal hygiene players to satisfy customers and consumers. The entire Ontex organization rapidly mobilized to address these challenges. We incurred
c. €8 million in COVID-19 related expenditures in H1 2020, mainly including extra compensation, disinfection and enhanced cleaning of our operations, protective equipment and additional transportation costs for our products. These costs have been recognized as recurring expenses in the income statement of the period.

All measures to protect our employees, ensure continuity of our operations and enhance profitability and cash generation remain in force.


Current prospects for Q3 2020

Considering the persisting uncertainties related to the pandemic and its impacts on our business, in particular on the evolution of demand in our markets, we are not in a position to provide projections for the balance of 2020. In this challenging context, we remain focused on supporting our customers and improving our operating performance.

The fluff pulp index has increased sequentially (in US Dollars) since early this year, which will have a limited impact on our purchasing prices. The most recent indices for oil-based derivatives show sequential increases following downwards trends earlier in Q2. However, these indices remain below the levels of prior year.

At current rates, we expect the year-on-year negative impact of currency depreciations on reported revenue and Adjusted EBITDA in Q3 to be similar to the impacts reported in Q2.

Operational Review: Categories

  Six Months Second Quarter
in € million 2020 2019 % ∆ as reported % ∆ at LFL 2020 2019 % ∆ as reported % ∆ at LFL
Ontex Reported Revenue 1,053.4 1,114.3 -5.5% -2.0%   479.2 568.1 -15.6% -10.5%
Babycare 589.7 648.9 -9.1% -5.1%   261.3 337.5 -22.6% -16.5%
Adult Incontinence 338.4 345.2 -2.0% +0.9%   161.3 171.5 -5.9% -1.8%
Femcare 111.0 106.3 +4.3% +5.3% 49.0 52.2 -6.0% -4.5%
Other 14.4 13.9 +3.8% +12.7% 7.5 6.9 +9.0% +20.7%

H1 2020 Babycare category revenue was down 5.1% compared with a year ago. Category sales have been strongly impacted in the second quarter as they slowed after the surge recorded in March as lockdown measures were implemented. They also reflect lower consumption patterns as consumers were largely confined throughout the quarter.

The Adult Incontinence (Adult Inco) category posted a 0.9% revenue increase in H1 2020. Adult Inco sales were up 4.5% in retail channels, with solid growth in the first quarter followed by lower market demand in Q2. Sales in institutional channels decreased as the result of the temporary suspension of a contract in our Healthcare Division, for which shipments have resumed in the second quarter.

Feminine Care revenue in H1 2020 ended up 5.3% above the same period last year on the back of a strong start to the year. Organic cotton tampons continued to exhibit solid growth in AMEAA.

Operational Review: Divisions

  Six Months Second Quarter
in € million 2020 2019 % ∆ as reported % ∆ at LFL   2020 2019 % ∆ as reported % ∆ at LFL
Ontex Reported Revenue 1,053.4 1,114.3 -5.5% -2.0%   479.2 568.1 -15.6% -10.5%
Europe 442.0 469.1 -5.8% -4.7%   191.9 235.4 -18.5% -17.0%
AMEAA 393.6 422.7 -6.9% +0.9%   180.1 223.2 -19.3% -7.8%
Healthcare 217.9 222.4 -2.0% -2.0%   107.2 109.4 -2.0% -1.8%

1 2019 revenue in AMEAA and Healthcare has been adjusted due to a shift of customer responsibility between these Divisions effective January 1, 2020, which has no impact on total Ontex revenue. Details can be found in annex.


Europe Division revenue in H1 2020 decreased 4.7% on the back of a strong surge in demand in March, followed by lower sales during Q2 essentially reflecting the market trends for personal hygiene products as described on page 3. The expected decrease in demand in April (disclosed in the Q1 Trading Update) was followed by a weaker-than-expected May, while June showed a slight sequential improvement as lockdown measures eased in most countries. In light of exceptional demand volatility, the commercial teams are working closely with our large customer base to ensure uninterrupted availability of essential, daily-use hygiene products.

Americas, Middle East, Africa and Asia (AMEAA)

H1 2020 revenue in the AMEAA Division increased 0.9% on a strong comparable base in the same period of 2019. Similarly to Europe, the commercial environment was impacted by the spread of the pandemic during most of H1. This underpinned the strong start to the year including some stockpiling ahead of lockdown measures, followed by a slowdown in demand throughout Q2 across all geographies, explained by the unwinding of the Q1 stockpiling, confinement measures and store closures. Sales in the Americas were up in H1 versus a year ago, led by growth in Brazil despite store closures for several weeks in Q2, and in the US where stores remained open albeit with less customer traffic. The solid positioning of our local brands helped our business in Mexico contain the impact of lower demand in most retail channels in Q2. Revenue in MEAA was down versus last year as many markets were impacted in the second quarter by the pandemic and related health measures, which reduced consumer access to shops and limited commercial activities.


Revenue in our Healthcare Division was down 2.0% in H1 2020, demonstrating a good degree of resilience in a challenging environment, including the temporary closure of some sales channels in the second quarter, such as hygiene and babycare shops. Excluding the temporary suspension of an institutional contract, H1 2020 Healthcare revenue was higher than in the first half of 2019, in part thanks to continued progress in self-pay and e-commerce channels. The aforementioned institutional contract resumed in April and achieved full run-rate in June. In addition, sales in home delivery channels were solidly ahead.



Selected Financial Information

  First Half
in € million 2020 2019 % ∆
Ontex Reported Revenue 1,053.4 1,114.3 -5.5%
Cost of sales ( 736.2) ( 820.3) -10.2%
Gross profit 317.2 294.0 +7.9%
Operating expenses ( 191.3) ( 183.0) +4.6%
Adjusted EBITDA 125.9 111.0 +13.4%
Non-recurring income and expenses ( 10.8) ( 39.6) -72.7%
EBITDA 115.1 71.5 +61.1%
Depreciation and amortization ( 43.4) ( 42.4) +2.3%
Operating profit 71.7 29.1 +146.7%
Net finance cost ( 16.2) ( 17.8) -9.2%
Income tax expense ( 14.4) ( 2.9) n.m.
Adjusted profit for the period 49.2 36.5 +34.8%
Adjusted Basic EPS 0.61 0.45 +34.4%
Profit for the period 41.1 8.4 n.m.
Basic EPS 0.51 0.10 n.m.
Free Cash Flow (post-tax) 28.7 52.1 -44.9%
– Of which change in WC ( 10.4) 43.2 n.m.
– Of which Capex ( 45.2) ( 39.6) +14.1%
– Of which repayment of lease liabilities ( 13.7) ( 13.3) +2.9%

n.m. not meaningful


Gross profit

H1 2020 gross profit was €317.2 million, an increase of +7.9% compared with the same period last year. Gross profit was positively impacted by material savings and efficiencies generated from T2G initiatives as they continued to ramp up, and also benefited from lower raw material indices. These positive effects more than outweighed the impacts of lower revenue, the steep depreciation of several functional currencies versus the euro, and additional, unplanned COVID-19 related expenses. We also invested in engineering capabilities to accelerate our manufacturing transformation as part of T2G. Gross profit as a percentage of sales was 30.1% in H1 2020, up 373 basis points versus prior year.

Adjusted EBITDA

Adjusted EBITDA reached €125.9 million in H1 2020, 13.4% above a year ago, resulting in an adjusted EBITDA margin of 12.0%, up 199 basis points. The solid improvement in adjusted EBITDA reflected higher gross profit, and allowed for ongoing investment in marketing to support our brands (albeit adjusted to lower demand in Q2), in R&D to enhance innovation, as well as in IT to support the manufacturing transformation and our digital initiatives. At constant currencies, Adjusted EBITDA was €157.7 million in H1 2020, up 42.0% year-on-year and the related margin was 14.4%, +448 basis points.

Non-recurring income and expenses

Non-recurring expenses were €10.8 million in H1 2020, a decrease of 72.7% year-on-year. The majority of these charges were related to restructuring expenses as part of the implementation of the T2G program. The cash flow impact of non-recurring expenses was -€23.0 million in H1 2020, due to timing differences between expense recognition, for which an important amount was recorded in 2019 linked to the start of many T2G initiatives, and cash out which is planned to be more evenly spread over the T2G program period of 2019 to 2021, as previously disclosed.

Due to rigorous control of expenses and cash outlays, for the full year 2020 we now expect non-recurring expenses recognized in the income statement at €30 million to €35 million [previously: €35 million to €40 million], of which €15 million to €20 million [previously: €25 million to €30 million] related to the implementation of T2G. The forecast cash-outs related to non-recurring items ranges from €35 million to €40 million [previously: €45 million to €50 million], of which €25 million to €30 million [previously: €35 million to €40 million] related to the T2G implementation.

Foreign Exchange

Nearly all of the main functional currencies in which we do business weakened versus the euro in H1 2020, resulting in negative impacts on both revenue and Adjusted EBITDA. The impact on Group revenue was ‑€38.3 million, primarily attributable to a depreciation of the Brazilian Real, Mexican Peso, and to a lesser extent the Turkish Lira, Polish Zloty and Russian Ruble, versus the euro. The evolution of these currencies against the euro also explain most of the -€31.7 million impact on Adjusted EBITDA in the first half of 2020.

Net Finance Cost

The net finance cost in H1 2020 was €16.2 million, a decrease of 9.2% compared with the same period last year. This is fully explained by the impact on our net financial debt of movements in foreign exchange rates versus the euro.

Income Tax Expense

H1 2020 income tax expense was €14.4 million, yielding an effective tax rate of 25.9%, in-line with the rate in the first half of 2019.

Working Capital

Working capital as a percentage of LTM revenue was 8.1%*, reflecting a solid underlying performance in line with the 9.5% achieved a year ago, as well as the favorable impact of the depreciation of several of our functional currencies versus the euro. Higher inventories at the end of June were driven by an increase in finished goods compared with the low level at end-December 2019, due to lower Q2 sales and raw material stockbuild to ensure production continuity during the pandemic. Trade receivables and trade payables remained under tightly management, confirming the structural, T2G-driven improvements.

Capital expenditure

H1 2020 capital expenditure including T2G-specific capex was €45.2 million, higher than a year ago due to different phasing over the full year. Capital expenditure for the full year is currently forecasted at 5% of revenue, including T2G-specific investments.

Free Cash Flow (post-tax)

Free cash flow (post-tax) was €28.7 million in H1 2020, net of €25.0 million in T2G-specific cash outflows (for one-off expenses and capital expenditure). Free cash flow generation was due to solid EBITDA, and ongoing tight management of working capital and capex.

* excluding monetization through factoring lines: €157 million at end-June 2020, €171 million at end-June 2019

Corporate information

The above press release and related financial information of Ontex Group NV for the three and six months ended June 30, 2020 was authorized for issue in accordance with a resolution of the Board on July 29, 2020.


Management will host a presentation for investors and analysts on July 30, 2020 at 9:00am CET/8:00am UK.

If you would like to participate in the conference call, please dial-in 5 to 10 minutes prior using the details below:

Belgium                             +32 (0)2 404 0659

France                               +33 (0)1 70 72 25 50

Germany                          +49 (0)69 2222 25574

United Kingdom              +44 (0)330 336 9125

United States                  +1 323-794-2093

Confirmation Code:       8372767


H1 2020                            July 30, 2020

Q3 2020                            November 4, 2020

FY 2020                             February 24, 2021


Maarten Verbanck

Phone: +32 53 33 36 20

Geoffroy Raskin