Ontex LFL 2018 revenue up 1.7% due to improved pricing

March 14, 2019 - Belgium

Ontex Group, a leading provider of personal hygiene solutions with expertise in babycare, femcare and adultcare, reported revenue of €2.29 billion in FY 2018 ending December 31, 2018. The like-for-like (LFL) revenue growth was 1.7 per cent due to improved pricing and mix. Gross margin of €625.7 million in FY 2018 was 5.3 per cent lower than the previous year.

Personal hygiene markets (Babycare, Femcare and Adult Inco categories) in which Ontex is present remained broadly unchanged overall in 2018 compared to 2017, Ontex said in a press release. Babycare category value decreased, with lower volumes, but price/mix turned positive and the shift from baby diapers to baby pants continued. As expected, Adult Inco showed the highest category value growth.

Retailer brands maintained their solid position in all three personal hygiene categories as a competitive alternative to international brands in Western Europe, while retailer brands continued to grow faster than the overall market in Russia.

Category wise, the Babycare revenue of Ontex was slightly lower at -0.6 per cent for FY 2018, whereas Adult Inco revenue grew 3.8 per cent. Femcare was up 1.6 per cent in FY 2018, mainly driven by growing organic cotton tampon sales.

In terms of divisions, the Mature Market Retail division revenue decreased 1.8 per cent in FY 2018 following strong growth of 5.1 per cent in 2017. The Americas Retail division delivered a 4.5 per cent increase in revenue in FY 2018, strongly outperforming the market. Revenue in Healthcare increased 0.8 per cent, while in Growth Markets revenue grew 9.5 per cent. Revenue in Middle East and North Africa increased by 2.6 per cent in FY 2018 with double-digit sales growth in the second half of the year.

Most geographies where the company is doing business, contributed to higher revenue in FY 2018.

In Q4 2018, the company initiated Transform to Grow (‘T2G’), a comprehensive transformation programme to enhance Ontex’s competitiveness and return to sustainable growth. In this context, Thierry Navarre was appointed to the new role of chief transformation officer.

The organisational structure of the company was revamped in 2018 in order to better seize opportunities arising from geographic expansion with the establishment of new growth platforms in the Americas and sub-Saharan Africa, improve execution and bolster focus on its competitive differentiators.

The company organised its commercial activities in three divisions: Europe, which is predominantly focused on retail brands; Americas, Middle East, Africa and Asia (AMEAA), which is predominantly focused on local brands; Healthcare, which continues to focus on the institutional markets and dedicated incontinence brands; and Group Manufacturing and Supply Chain was regrouped into a newly-created Operations unit, with a focus on production efficiency and customer service excellence.

“Ontex delivered sound LFL revenue growth in 2018 despite a difficult market environment. Both Adult Inco and Femcare sales grew, while Babycare sales improved in H2 after a slow start to the year. Dynamic pricing actions and continued savings mitigated the strong raw materials and FX headwinds that we faced in 2018. Ontex is fully mobilised to make the T2G transformation programme a success. We will provide an update of our strategy and ambitions going forward during the investor event scheduled in London on May 8,” said Charles Bouaziz, Ontex CEO.

As of Q1 2019, Ontex’s revenue will be presented in accordance with the three new commercial divisions. For 2019, the company anticipates further top-line growth in developing markets, and lower revenue in developed markets. The pricing, mix improvement and cost savings actions should start taking effect in the second half of the year, according to company estimates. (PC)