Transformation of Ontex progressing well; Q3 impacted by steep input cost increases; Full-year adj. EBITDA outlook lowered to €143-148 million

The free cash flow forecast improved despite the earnings downgrade, while lower trailing earnings pushed leverage higher.

Rhea-AI Summary

Ontex (ONXYY) lowered its full-year 2026 adjusted EBITDA outlook to €143–148 million as input costs outpaced pricing increases. The previous forecast was €165–180 million. Third-quarter revenue fell 3.9% year on year to €427.9 million, while adjusted EBITDA fell 49% to €25.9 million and its margin narrowed to 6.1%.

Focus to Value delivered €45 million of nine-month savings toward a €240 million target by end-2028. September net financial debt was €535.8 million, down from €577.0 million at year-end, but leverage rose to 3.75x. Ontex expects fourth-quarter adjusted EBITDA of €39–44 million and full-year free cash flow of €(10)–0 million. It raised its year-end leverage ceiling to 3.75x and is seeking a temporary bank covenant adjustment. Its Russian subsidiary will be deconsolidated in the fourth quarter after an interim administrator assumed operational control, reducing expected quarterly adjusted EBITDA by approximately €2 million.

16 points · 0 major

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2 major · 24 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.Free cash flow outlook improved to €(10)–0 million for 2026, previously €(25)–€(10) million.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Fourth-quarter adjusted EBITDA is expected at €39–44 million, versus €25.9 million in the third quarter.
• Moderate pointFocus to Value delivered €45 million of nine-month savings, including €16 million in the third quarter.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Focus to Value targets €240 million by end-2028, including €40 million additional EBITDA identified in July.
• Moderate pointNet financial debt fell to €535.8 million at September-end from €577.0 million at year-end 2025.
• Moderate point. Forward-looking: it has not happened yet and may not happen.White-collar, non-manufacturing positions are targeted to fall more than 20%; approximately one-third is completed or in execution.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Australia manufacturing exit and Großpostwitz plant rightsizing are planned for completion in Q4.

9 minor points

• Minor pointAdult care revenue increased to €205.0 million in Q3 from €201.3 million a year earlier.
• Minor pointNine-month adult care revenue rose to €615.1 million from €607.4 million a year earlier.
• Minor pointAdult pants grew mid-single digit like for like year to date; European capacity additions are ramping up as planned.
• Minor pointBaby pants grew high single digits like for like year to date.
• Minor pointNorth America sales stabilized, with third-quarter revenue slightly higher and operational efficiency improving.
• Minor pointEuropean operations maintained a double-digit adjusted EBITDA margin over the first nine months.
• Minor point. Forward-looking: it has not happened yet and may not happen.AI-enabled planning tools are planned for next year, following redesigned end-to-end planning processes.
• Minor point. Forward-looking: it has not happened yet and may not happen.Russian deconsolidation reduces net financial debt by €10 million on a pro forma basis.
• Minor point. Forward-looking: it has not happened yet and may not happen.Ontex plans accelerated savings implementation and adult care volume growth to support 2027 cash generation.

Negative

• Major point. Forward-looking: it has not happened yet and may not happen.Full-year adjusted EBITDA guidance fell to €143–148 million from €165–180 million.
• Major pointNine-month operating loss reached €117.2 million, versus a €72.1 million operating profit a year earlier.
• Moderate pointQ3 adjusted EBITDA fell 49% year on year to €25.9 million.
• Moderate pointQ3 revenue fell 3.9% year on year to €427.9 million, despite remaining stable sequentially.
• Moderate pointQ3 group volumes fell 5.1%, with pricing and mix contributing positive 0.7%.
• Moderate pointRaw material and transportation costs reached approximately 10% above the start of the year; pricing ramped up slower than anticipated.
• Moderate pointLeverage rose to 3.75x at September-end from 3.22x at June-end.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Year-end leverage guidance increased to not exceeding 3.75x, previously 3.5x.
• Moderate pointA temporary leverage covenant adjustment remains to be secured; Ontex expects completion before year-end.

15 minor points

• Minor pointQ3 adjusted EBITDA margin narrowed 5.3 percentage points year on year to 6.1%.
• Minor pointQ3 baby care revenue fell to €162.2 million from €176.2 million a year earlier.
• Minor pointQ3 feminine care revenue fell to €53.7 million from €59.7 million a year earlier.
• Minor pointNine-month revenue declined 3.2% year on year to €1,282.7 million.
• Minor pointNine-month adjusted EBITDA fell 24% year on year to €104.1 million.
• Minor pointNine-month adjusted EBITDA margin fell to 8.1% from 10.3% a year earlier.
• Minor pointNine-month baby care revenue fell to €490.2 million from €528.1 million a year earlier.
• Minor pointNine-month feminine care revenue fell to €160.4 million from €173.7 million a year earlier.
• Minor pointQ3 operating profit fell to €0.4 million from €29.3 million a year earlier.
• Minor pointNine-month asset impairment expenses increased to €143.9 million from €3.6 million a year earlier.
• Minor pointGroup-structure expenses rose to €11.8 million over nine months from €3.1 million a year earlier.
• Minor pointMajor-litigation expenses rose to €1.3 million over nine months from €0.5 million a year earlier.
• Minor pointNine-month depreciation and amortization increased 12% year on year to €64.1 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.Russian operations will be deconsolidated in Q4, reducing expected quarterly adjusted EBITDA by approximately €2 million.
• Minor pointEuropean adult care retail performance fell short of company ambitions, prompting corrective actions.

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^{Inside information - Regulated information}

• Executing the transformation towards a more focused, resilient, cash-generating and value-driven Ontex:

• • Focus to Value program delivered €45 million savings year to date, contributing towards the total savings target of €240 million by end 2028 including the €40m additional EBITDA identified in July; One-third implemented of the planned reduction by more than 20% in white-collar, non-manufacturing positions;
  • North America sales stabilized with marked improvement of operational efficiency;
  • Additional adult care capacity in Europe ramping up as planned, and continued solid growth of adult and baby pants driving positive mix.

• Q3 results impacted by a steep increase in input costs:

• • Revenue stable sequentially for the third consecutive quarter at €428 million, and down 4% year on year reflecting the exit of select overseas contracts and soft demand;
  • Adj. EBITDA of €26 million, decreasing by one third quarter on quarter, and by half year on year, as input costs rose sharply in Q3 while price increases ramped up more gradually than anticipated;
  • Net debt further reduced to €536 million, with solid liquidity position of €272 million preserved; Additional actions taken to protect liquidity, enabling Ontex to execute its strategic plan.

• Russian subsidiary to be deconsolidated, following its placement under interim administration;
• Full-year 2026 outlook revised: Adj. EBITDA now expected in €143-148 million range, free cash flow in €(10)-0 million range and year-end leverage not to exceed 3.75x, thereby remaining within the RCF covenant limits;
• In 2027: Maintaining heightened focus on cash generation, fueled by acceleration of Focus to Value implementation and adult care-driven volume growth, leading to balance sheet strengthening.

CEO comments: Building the new Ontex

Three months ago, we set out a clear plan to fundamentally transform Ontex into a more focused, resilient, cash-generating and value-driven company. That transformation is now in full execution, and we are making tangible progress on each of our four strategic shifts.

At the same time, we continue to operate in a very challenging environment, and our third-quarter financial results were disappointing. They were driven by specific and identifiable factors, primarily the timing gap between the input cost increase and the ramp-up of our pricing actions. We are taking decisive actions on each of the factors.

What gives me confidence as we build the new Ontex is the resilience of our business in Europe. It is the home to our adult care business, and maintained a double-digit adjusted EBITDA margin over the first nine months of the year. Our businesses in other regions are currently margin dilutive, but we are addressing this through our strategic shifts, enabling them to contribute to our value creation journey over time.

Progress on our four strategic shifts

1. Increase structural efficiency through the expanded Focus to Value program: The program delivered €45 million savings in the first nine months, of which €16 million in the third quarter. This is part of our total savings target of €240 million by the end of 2028, including the €40 million additional EBITDA identified in July. Some examples of our initiatives:

• • Manufacturing excellence: The exit of manufacturing in Australia and the rightsizing of our Großpostwitz plant in Germany are planned to be finalized in the fourth quarter, as part of a broader review of our manufacturing footprint. These initiatives are complemented by a company-wide focus on improving overall equipment productivity and output. Our progress on both scrap and machine effectiveness, for instance in our North Carolina plant, is a great example of what we can accomplish ahead of our plan.
  • Logistics and planning: We have redesigned our end-to-end planning processes and will implement new AI-enabled planning tools next year. A recently completed logistics network review has identified opportunities to improve cost-to-serve, with execution already starting for part of our healthcare channel.
  • Complexity reduction: We are further simplifying and standardizing raw materials, improving procurement flexibility and manufacturing efficiency, while reducing inventory requirements.
  • Organization streamlining: We are on track to reduce non-manufacturing white-collar positions by more than 20%, with approximately one-third already completed or in execution.

2. Reset North America to prioritize profitability and cash generation: Under new leadership, North America sales stabilized, with revenue slightly up in the third quarter, supported by the ramp-up of recently won contracts in baby pants. Operational efficiency is improving, benefiting from our manufacturing excellence push, and plans to adjust our capacity to our target portfolio of customers and product groups is progressing well.
3. Accelerate adult care growth in Europe: Adult pants, our fastest-growing adult category, grew by mid-single digit like for like year to date, and demand in the healthcare channel remained solid. The capacity increase, including adult pants, is ramping up as planned across Europe. Performance in parts of the retail channel fell short of our ambition, and we have launched specific corrective actions.
4. Adopt a more targeted approach in baby and feminine care in Europe: We continue to focus on the segments where we can earn attractive returns. Baby pants grew by high single digits like for like year to date, while we exited selected overseas contracts and continued to simplify our product and asset portfolio.

Q3 2026 results

Our revenue was stable sequentially for the third consecutive quarter. The decline in adjusted EBITDA was driven by input costs that reached their highest level of the year, approximately 10% above the start of the year, while pricing actions ramped up more gradually than anticipated. We expect pricing contribution to increase further in the fourth quarter, both in Europe and in North America. Over the first nine months, adjusted EBITDA amounted to €104 million, 24% below last year.

Our teams acted quickly to protect cash generation. Net financial debt decreased further to €536 million, €41 million lower than at the end of 2025, and liquidity remained strong at €272 million.

Going forward

For the fourth quarter, we expect raw material costs to remain elevated, albeit slightly below the high level reached in the third quarter, while the contribution from pricing is expected to increase further. We expect the fourth-quarter adjusted EBITDA between €39 and €44 million, representing an increase of €13 to €18 million compared to the third quarter, equal or better year on year and compared to the level in the first half. This is driven by confirmed price increases, slightly lower raw material costs, additional Focus to Value savings, and higher volumes in what is traditionally a stronger quarter, partly offset by the deconsolidation of our Russian subsidiary.

We have revised our full-year 2026 outlook accordingly, compensating our lower expectations for adjusted EBITDA, with solid cash management measures, as we did in the third quarter. This will ensure that our year-end leverage will not exceed 3.75x, and thereby remain within the covenant limits of our revolving credit facility (RCF). To preserve financial flexibility as we execute our transformation plan, we are proactively engaging with the banks of our revolving credit facility to secure a temporary adjustment to the leverage covenant. We expect this process to be completed before year-end.

Looking ahead to 2027, we will maintain a heightened focus on cash generation, fueled by the acceleration of the implementation of our Focus to Value savings program and by growth of our adult care volumes, which will strengthen the balance sheet. At the same time, we will continue to invest in the transformation that will underpin future value creation.

Q3 2026 report

Key business and financial indicators

Business results	Q3			9 months
in € million	2026	2025	%	2026	2025	%
Revenue	427.9	445.4	-3.9%	1,282.7	1,325.7	-3.2%
Operating expenses (excl. depreciation & amortization)	(401.9)	(394.8)	-1.8%	(1,178.6)	(1,188.9)	+0.9%
Adj. EBITDA	25.9	50.6	-49%	104.1	136.8	-24%
Adj. EBITDA margin	6.1%	11.4%	-5.3pp	8.1%	10.3%	-2.2pp
Income and expenses related to changes to Group structure	(2.5)	(0.7)	n.a.	(11.8)	(3.1)	n.a.
Income and expenses related to major litigations	(1.1)	(0.1)	n.a.	(1.3)	(0.5)	n.a.
Income and expenses related to impairments of assets	0.0	(1.2)	n.a.	(143.9)	(3.6)	n.a.
Depreciation & amortization	(21.9)	(19.3)	-14%	(64.1)	(57.4)	-12%
Operating profit/(loss)	0.4	29.3	-99%	(117.2)	72.1	n.a.

Revenue	2025	Volume	Price	2026	Forex	2026
in € million			/mix	LFL
Q3
Adult care	201.3	+0.5	+2.3	204.1	+1.0	205.0
Baby care	176.2	-16.0	+1.0	161.2	+1.0	162.2
Feminine care	59.7	-7.0	+0.9	53.6	+0.1	53.7
Group	445.4	-22.6	+3.1	425.8	+2.1	427.9
		-5.1%	+0.7%	-4.4%	+0.5%	-3.9%
9 months
Adult care	607.4	+3.9	+2.3	613.5	+1.5	615.1
Baby care	528.1	-31.3	-1.5	495.3	-5.1	490.2
Feminine care	173.7	-11.3	-1.8	160.7	-0.3	160.4
Group	1,325.7	-38.9	-0.3	1,286.4	-3.8	1,282.7
		-2.9%	-0.0%	-3.0%	-0.3%	-3.2%

Adj. EBITDA	2025	Reve-	Net	Forex	2026
in € million		nue	costs
Q3	50.6	-7.1	-18.2	+0.6	25.9
		-14%	-36%	+1.3%	-49%
9 months	136.8	-19.3	-15.8	+2.4	104.1
		-14%	-12%	+1.8%	-24%

Reconciliation of net financial debt	30/09	31/12
in € million	2026	2025
Non-current interest-bearing debts	510.9	518.1
Current interest-bearing debts	107.4	129.3
Gross financial debt	618.3	647.4
Cash & cash equivalents	82.4	70.4
Net financial debt	535.8	577.0
Adj. EBITDA (LTM)	142.9	175.6
Leverage ratio	3.75x	3.29x

Q3 2026 results

Revenue amounted to €428 million, stable compared to the previous two quarters and down 4% like for like versus a strong third quarter of 2025, reflecting a 5% decline in volumes. Adult care volumes were broadly stable, as continued strength in the healthcare channel offset softer activity in retail. Baby care volumes declined by 9%, mainly due to exits from some overseas contracts and lower baby diaper sales in Europe, where market demand continued to soften by a high-single-digit percentage, both overall and for retailer brands. Lower baby diaper sales were partly offset by continued growth in baby pants. In North America, baby volumes were largely stable, as the ramp-up of recently won contracts, also mostly for baby pants, offset weaker market demand. Feminine care volumes declined by 12%, reflecting the exits from contract manufacturing contracts in North America and from select overseas contracts. Growth in the categories prioritized by Ontex had a favorable mix impact, which, together with pricing, contributed a positive 1%.

Adjusted EBITDA amounted to €26 million, down 49% year on year, as raw material and transportation costs rose steeply during the quarter at approximately 10% above the start of the year, driven in particular by nonwoven materials, superabsorbent polymers, backsheet materials, packaging and fuel. The Focus to Value program delivered €16 million savings in the quarter, which lowered the cost base by about 4%. These were insufficient to offset raw material and other input cost inflation, resulting in a net cost impact of €(18) million compared with the prior year. The sales price increases to pass through cost inflation, ramped up more slowly than anticipated, which combined with the lower volumes resulted in a €(7) million revenue decrease impact. The adjusted EBITDA margin decreased by 5.3 percentage points year on year to 6.1%.

Operating profit was €0.4 million, versus €29 million in Q3 2025, reflecting the decrease in adjusted EBITDA. In addition to €(22) million of depreciation and amortization, the result includes €(4) million of one-off costs, mainly restructuring provisions related to the Focus to Value program.

Net financial debt decreased to €536 million at the end of September from €540 million at the end of June, and was €41 million lower than at the end of 2025. The lower adjusted EBITDA was offset by working capital inflows, including extended supplier payment terms, by disciplined capital expenditure and by lower lease liabilities. Ontex’s financing facilities remain solid, based on the €400 million outstanding bond, maturing in 2030, and the revolving credit facility for up to €270 million, extending until 2029. They also include off-balance sheet factoring for €197 million at the end of September. Liquidity remained strong at €272 million, consisting of €82 million cash and cash equivalents and €190 million undrawn under the revolving credit facility. Due to the lower last-twelve-months adjusted EBITDA, however, the leverage ratio increased to 3.75x, compared to 3.22x at the end of June.

Subsequent event

Ontex Russia was placed under interim administration pursuant to a Russian presidential decree dated October 15, 2026. A government-appointed interim administrator has assumed operational control of Ontex's subsidiary, which will lead to its deconsolidation in the fourth quarter. At the end of September, the Russian subsidiary held €19 million of cash and €30 million of lease liabilities. As such, the deconsolidation reduces Ontex's net financial debt by €10 million on a pro forma basis, while the expected impact on the fourth-quarter adjusted EBITDA is a reduction by approximately €2 million. Both impacts are reflected in our revised outlook.

2026 outlook

Persistent geopolitical instability continues to drive volatile exchange rates and input cost inflation, keeping raw material and other energy-related costs higher for longer than anticipated. Ontex is mitigating these through pricing, mix management and the Focus to Value savings program. Pricing is making an increasingly positive contribution, a trend that is expected to continue. However, the persistent volatile and elevated cost environment combined with slower-than-anticipated pricing ramp-up, lower sales volumes, and the deconsolidation of Ontex’s Russian subsidiary, have led Ontex to revise its full-year 2026 outlook as follows:

• Adjusted EBITDA to be in the range of €143 to €148 million (previously €165 to €180 million), with the fourth-quarter adjusted EBITDA expected between €39 and €44 million;
• Free cash flow to be in the range of €(10) to €0 million (previously €(25) to €(10) million);
• Leverage ratio not to exceed 3.75x at year end (previously 3.5x).

Practical information

Disclaimer

This report may include forward-looking statements. Forward-looking statements are statements regarding or based upon our management’s current intentions, beliefs or expectations relating to, among other things, Ontex’s future results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. By their nature, forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results or future events to differ materially from those expressed or implied thereby. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this report regarding trends or current activities should not be taken as a report that such trends or activities will continue in the future. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this report.

The information contained in this report is subject to change without notice. No re-report or warranty, express or implied, is made as to the fairness, accuracy, reasonableness or completeness of the information contained herein and no reliance should be placed on it. Amounts in the report are shown mostly in € million for reasons of transparency. This may give rise to rounding differences in the tables presented in the report. This report has been prepared in Dutch and translated into English. In the case of discrepancies between the two versions, the Dutch version will prevail.

Corporate information

The financial information in this document of Ontex Group NV for the nine months ended September 30, 2026 was authorized for issue in accordance with a resolution of the Board on September 27, 2026.

Audio webcast

Management will host an audio webcast for investors and analysts on October 28, 2026 at 12:00 CET / 11:00 BT. To attend, click on https://ontexgroup.engagestream.euronext.com/q3-2026-results. A replay will be available on the same link shortly after the live presentation. A copy of the presentation slides will be made available beforehand on https://ontex.com/investors/results-reports.

Financial calendar

• February 11, 2027                                      FY & Q4 2026 results publication
• April 30, 2027                                               Q1 2027 results publication
• May 5, 2027                                                  Annual general meeting
• July 29, 2027                                                 Q2 & H1 2027 results publication
• October 28, 2027                                        Q3 2027 results publication

Enquiries

Investors	Geoffroy Raskin	+32 53 333 730	investor.relations@ontexglobal.com
Media	Catherine Weyne	+32 53 333 622	corporate.communications@ontexglobal.com

About Ontex 

Ontex is a leading international developer and producer of baby care, feminine care and adult care products, both for retailers and healthcare, primarily in Europe and North America. The group employs around 5,000 people, with plants and offices in 12 countries, and its innovative products are distributed in around 100 countries. Ontex is headquartered in Aalst, Belgium and is listed on Euronext Brussel.  To keep up with the latest news, visit ontex.com or follow Ontex on LinkedIn.

ONTEX Group NV
Korte Keppestraat 21 – 9320 Erembodegem (Aalst) – Belgium                                                      0550.880.915 RPR Ghent – Division Dendermonde

Attachment

• 26Q3_PressRelease_EN

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much liquidity and available credit does Ontex have?

Ontex had €272 million of liquidity at September-end, comprising €82 million of cash and cash equivalents and €190 million undrawn under its revolving credit facility. Its financing includes a €400 million outstanding bond maturing in 2030 and a revolving credit facility of up to €270 million extending until 2029.

What helped Ontex reduce debt despite lower third-quarter earnings?

Working capital inflows, including extended supplier payment terms, disciplined capital expenditure and lower lease liabilities offset the effect of lower adjusted EBITDA. Net financial debt decreased to €536 million at September-end from €540 million at June-end.

When did the interim administration of Ontex Russia begin?

Ontex Russia was placed under interim administration pursuant to a Russian presidential decree dated October 15, 2026. A government-appointed interim administrator assumed operational control. At September-end, the subsidiary held €19 million of cash and €30 million of lease liabilities.