Ontex Feedback conference call

Below are the highlights from the conference call. Key point was the confidence on solid growth in North America – whereas the press release stated strong double digit growth is expected in North America in 2024, the CEO mentioned they target 30-40% revenue growth in the zone (albeit from a low base, as the US currently represents an estimated 11% of Core revenues. We remind that Ontex announced this morning a 4Q23 adjusted EBITDA growth of 16% to € 46.5m, bang in line with consensus and 1% above our forecasts, despite slightly lower than expected revenue generation (flat on a like for like basis). The FY24 guidance of low single digit LFL revenue growth is in line with our and consensus forecasts, while KBCS and CSS forecasts are on the low end of the 11-12% adj EBITDA margin guidance range. The balance sheet is gradually strengthening with net debt/EBITDA at 3.3x at year-end 2023 with guidance calling for a reduction to below 3x by year-end 2024. On the back of the much improved earnings momentum and the attractive intrinsic forward valuation, we maintain our BUY rating.