Update: Ontex sees a return to value creation

(ABM FN) After a challenging year 2021, Ontex is counting on a return to growth in the coming years. The diaper manufacturer announced this during an investor update on Monday afternoon.

In the first quarter of 2021, Ontex posted really bad numbers, but the manufacturer actually made improvements in the second quarter, according to CEO Esther Pirosby. However, the first lady warned that the first half of 2021 will mean a downturn. On an annual basis, Ontex expects a steady turnover.

“Our actions to increase productivity, reduce costs and improve our cash flow generation are well underway,” Pirosby said in a press release Monday morning. “In the meantime, we have already built a new, leaner, and resilient organization that fosters a strong performance culture and discipline in delivering returns,” she says.

By 2023, Ontex hopes to save up to 120 million euros, of which 60 million euros will be in 2021. Chief Financial Officer Peter Vanest confirmed that these cost savings will take place in three areas. Overhead costs will be reduced, among other things, to the 2016 level.

The progress in recent months also gives management confidence to stick to its 2023 goals. For example, Ontex targets annual sales growth of 2-3% on a comparative basis, REBITDA margin between 12.5 and 13.5%, and a lower net debt/EBITDA ratio From 3, according to the group.

Ontex’s leverage will be reduced through rebuilding EBITDA and through better management of group finances and capital allocations.

In addition, Ontex is also refinancing 1.1 billion euros in debt, according to Vanesty. The manufacturer already has agreements with a consortium of banks for 470 million euros, and will study options for a large debt instrument in the coming weeks. “But the equity issue is not part of the plan,” the CFO reassured investors.

At the end of the year, Ontex will propose a long-term strategic plan.

Update: to add investor update information.

ABM Financial News; [email protected]; Revised text: +31 (0) 20 26 28999.

From Beursplein 5, Editors ABM Financial News Keep a close eye on developments on the stock exchanges, and the Amsterdam Stock Exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation to make certain investments.