Q2 2024 Ontex Group NV Earnings Call Transcript
Key Points
- Ontex Group NV (ONXXF) achieved a 3% like-for-like revenue growth in the first half of 2024, driven by a 5% increase in volume and mix.
- The adjusted EBITDA margin rose to 12%, marking a 31% increase in adjusted EBITDA compared to the previous year.
- The company generated significant free cash flow of EUR 43 million, a substantial improvement from an outflow of EUR 29 million a year ago.
- Net debt was reduced by 12% due to free cash flow and M&A proceeds, improving the leverage ratio from 3.3 times to 2.5 times.
- Ontex Group NV (ONXXF) continues to expand in North America, achieving strong double-digit growth in baby care and preparing for new launches in the second half of the year.
- The company is facing challenges in emerging markets, with discontinued operations resulting in a loss of EUR 50 million.
- There are ongoing restructuring costs, including a provision of EUR 37 million for potential redundancy costs in Belgium.
- Raw material costs are expected to gradually increase, potentially impacting future profitability.
- The company anticipates further exceptional costs related to the restructuring in Belgium, which could affect financial results in the second half of the year.
- Despite improvements, the company still faces competitive pressures, particularly from A brands in the retail market.
Good afternoon, everyone, and thank you for joining us today. This is Geoff Raskin from IR. I'm pleased to have Gustavo, our CEO; and Geert Peters, our CFO, with us today to present the first half-year results.
Before that, let me remind you of the Safe Harbor regarding forward-looking statements. I will not read it out loud, but I will assume you will have duly noted it. You're well aware that since 2022, our P&L is based on continuing operations, which consists of our core market activities only, while the emerging markets are reported as discontinued operations. We have already divested more than half of these, and we are working on strategic options for the remaining.
Meanwhile, these activities continue to contribute to our results and to the presented debt and cash flow figures in particular. Please note that since the start of the year, we have changed the definition of free cash flow to reflect free cash flow after financing and the operating savings in our EBITDA bridge to a
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