Ontex Turning the corner on profitability in 3Q, acceleration expected for 4Q
Ontex reported a 41% y/y drop in 3Q EBITDA which was slightly better than our forecast and slightly below consensus, marking however a sequential improvement of 28% on the back of accelerating progress on pricing (from +5% y/y in 2Q to +11% y/y in 3Q). There is no news on divestments or discussions with AIP, but Ontex has chosen to change CEO, with Board member Gustavo Calvo Paz becoming the new CEO as of today. As implied by the maintained guidance, we expect margin progression to accelerate in 4Q on further pricing momentum and a slowdown in inflationary headwinds. We believe margins will further recover beyond 2022 and on the back of the attractive intrinsic forward valuation, we maintain our BUY rating.Ontex Group NV is a Belgium-based company, which operates in the manufacturing sector of industry. The Company is a producer of disposable personal hygiene solutions for babies, women and adults. It offers a range of such products as baby diapers, baby pants, baby wet wipes, pads, pantyliners, tampons, light incontinence products, pull-ups, belt diapers, all-in-one tape systems, shaped pads and underpards. Its products are distributed through retail partner brands, as well as under its own brands (canbebe, canped, Helen Harper, Moltex, Baby Charm) across several distribution channels, such as retail trade, care institutions and pharmacies. The Company is present in Europe, Northern Africa, Australia and Asia.
We are a financial services provider for several types of professional clients, each with distinct needs.
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