Ontex Announces Strategic Overhaul Following Q1 Revenue Decline in Baby Care

2026-04-29 companies

Brussels, Wednesday, 29 April 2026.
After an 11% drop in baby care sales pushed Q1 2026 revenue down 4%, Ontex is launching a comprehensive strategic overhaul to stabilize operations and cut costs.

Financial Pressures and Segment Divergence

Ontex Group NV (EBR: ONTEX) reported a total first-quarter revenue of €426.3 million for 2026, representing a 5.4% year-on-year decrease and a 4% decline on a like-for-like basis [1]. The divergence in segment performance was stark. Adult care, which addresses incontinence—a growing market demographic globally [GPT]—accounts for the largest portion of the company’s product sales at 46.2% [4]. This segment saw a 2.2% like-for-like revenue increase to €206.8 million [1]. However, this growth was eclipsed by a 13.8% like-for-like revenue plunge in the baby care segment, which brought in €162.1 million, and a 6.4% drop in feminine care to €52.6 million [1]. The company attributed the baby care softness to a mid-single-digit drop in European demand and lower contract manufacturing sales [1].

Strategic Overhaul and Capacity Reductions

Acknowledging that performance is not at the desired level, Ontex leadership has initiated an aggressive strategic review to right-size the organization [1]. A central pillar of this turnaround strategy is a planned 15% reduction in Selling, General, and Administrative (SG&A) headcount, targeted for completion within the next 12 to 18 months, placing the finalization window between April and October 2027 [1]. The diagnostic phase of this review, conducted with external advisors focusing on the North American and European businesses, is already mostly complete [1].

Market Dynamics and Shareholder Shifts

The prolonged operational challenges have severely impacted Ontex’s valuation on the stock market. As of April 28, 2026, the company’s shares were trading at €2.95, reflecting a staggering one-year decline of 64.29% [5]. Institutional investor confidence also appears to be shifting. On April 22, 2026, Ontex received a transparency declaration indicating that The Goldman Sachs Group, Inc. had reduced its stake. The institution reported holding 35,820 voting rights and 2,298,616 equivalent financial instruments, totaling 2.334 million combined instruments, which dropped its holding below the 3% statutory threshold to 2.83% [2]. Meanwhile, broader market calendars indicate no immediate corporate events or dividend announcements for Ontex in the final days of April 2026 [3].

Looking Ahead: Financial Targets for 2026

Despite the turbulent first quarter, Ontex is maintaining its full-year outlook for 2026 [alert! ‘Forward-looking statements are highly dependent on the gradual easing of the energy crisis and stabilization of geopolitical factors’] [1]. The personal care manufacturer expects its adjusted EBITDA to increase by approximately 10% over the course of the year and anticipates free cash flow turning positive [1]. Furthermore, management aims to reduce the company’s leverage ratio—which stood at 3.36x at the end of March 2026, up slightly from 3.29x at the start of the year—to 3.0x or lower by year-end [1]. Further details regarding the strategic review and long-term operational plans are scheduled to be unveiled during the second-quarter earnings call [1].

Sources

Earnings Personal care