Ontex Group Nv Ord

Good morning, everyone, and thank you for joining us today. I'm Geoffroy Rasquin from Investor Relations. I'm pleased to have with us Laurent Nilly, our CEO, and Heath Peters, our CFO, to present the results for the first quarter of 2026. 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. With that cleared up, Laurent, over to you.

Thanks, Geoff. Good afternoon, everyone. I will provide a few introductory comments on the quarter. Cleart will cover the financial analysis, and then I will come back to give you a few thoughts on what we see and also on our strategic review progress. Overall, Q1 was a relatively soft quarter. Not a surprise, as we had indicated in February, that our results this quarter would be in line with Q4 of last year and thereby down versus a relatively strong first quarter in 25. And importantly, we delivered on what we expected. Revenue was down 4% like for like compared to a year ago because of weaker market demand in baby and feminine care, even if in retailer brands we slightly outperformed the market overall. And because of some lower sales in contract manufacturing, especially in the U.S., as we had expected. The adjusted EBITDA was in line with Q4, but lower than the previous year. Margin came down by two percentage points due to the impact of lower volumes and higher net costs, which we partially mitigated through continued savings efforts in operation and in SG&A. The lower adjusted EBITDA this quarter drove the last 12 months adjusted EBITDA down, which led to a slight increase in the leverage ratio despite the reduction in net debt. Now, if one looks at the past five quarters, reported revenue on the left of this slide and adjusted EBITDA on the right of it, it is fair to say that our performance is still not where we expect it to be. Yet we see a few encouraging signs on our journey to stabilize the business. Adult care, our largest category, continues to grow. and we are ramping up more capacity to fuel future growth. Even in this quarter, adult care growth was not enough to offset decline in baby and fem care demand. With this lower demand versus Q4 and the geopolitical instability started early March, delivering stable adjusted EBITDA is a good sign of our resilience and an important consideration to face the rest of the year. I'll come back to this later, and we'll pass now over to Geert for more detailed financial analysis.

Thanks a lot, Laurent, and also from my side, good morning to everyone. In the following slides, I will focus on the year-on-year evolution of revenue and adjusted EBITDA, and will of course also comment on the debt and leverage evolution over the quarter. But first, the revenue on the next slide. The waterfall shows the evolution of revenue from Q1 25 to Q1 26. The combined price and mix impact was largely stable, meaning that the 4% like-for-like decrease is entirely linked to lower volumes. Let's then look at baby, feminine care, and adult care. First, the baby care volumes, they were down 11% versus a strong Q1 25. You might remember that last year, the Q1 sales were pushed up in the first quarter due to concerns on US tariffs, which then reversed in Q2. The market demands in baby care also decreased by mid single digits in Europe and even by high single digits for retailer brands. And also that's the case in North America. Overall, we did somewhat better than the market in this market segment, thanks to growth in baby pants in Europe and also new and previously secured contracts that are ramping up in North America. And we could then say in North America that the baby care retail sales, they were growing year on year. And then on contract manufacturing, you remember from February that the sales in North America came down, and this is as we anticipated. And that's due to the mix of market share losses by our customers and some contract exits. We also, in our sales in overseas markets, they were substantially lower. but this is largely because of planned contract exits. Then feminine care, that volume reduced by 4%. This is largely in line with the market evolution. And then as Laurent said, adult care volumes were positive. They were growing again 2%, reflecting sustained growing demand in the retail channel and stable demand in healthcare in Europe, where we have a very strong position. Forex had a 1% adverse impact, mainly due to the US dollar. depreciation of about 10% year-on-year. Let's now explore the evolution of the adjusted EBDA as compared to last year. So on the next slide, you'll find the bridge that shows the decrease of adjusted EBDA from Q1 2025 to Q1 2026, which is a drop of more than 20%. The largest impact comes from the previously discussed lower revenue, which led to a decrease of €8 million. Including this volume effect, the net costs increased by €5 million with different net-of-saving initiatives. And let me take each of them step by step. First of all, the index. Although the index evolution had a positive impact on fluff, SAP and non-woven, backsheets and packaging materials were more expensive. And that's on the year-end, resulting in slightly negative impacts. If we then look to the other operating costs, they increased as well, linked to the continued inflation of salaries and services. But we're making good progress on gradually improving the supply chain efficiencies, which impacted ONTEX from Q2 last year onwards, with still some limited leftover impact. And then, of course, the rising oil prices, they have resulted in higher transportation costs. which is a cost category where the cost passed through occurs almost immediately. But I should say in Q1, the impact was still very limited. Then we have the operating efficiency programs that we run. They continue with the full year impact of initiatives launched last year and several new ones. Also this quarter, a large part of the cost increases were offset by initiatives in procurement, manufacturing, logistics, and innovation. And then we started up a specific saving program to streamline the SG&A organization. The first results already materialize and they offset the inflationary pressure on salaries and services. You will see in the bridge also the Forex. There is a translational Forex impact, but this is very limited and positive. That results in an adjusted EBITDA of €30 million, which is identical to Q4-25. The margin thereby stands at 9.1%, which is 2.2 percentage points lower than last year, reflecting less fixed cost absorption due to lower volumes and net inflation of costs. Let's now move from the P&L to the balance sheet on the next slide. Our net financial debt reduced over the quarter from 577 to 550 million euro. We finally managed to repatriate the cash that we held in Algeria following the divestment of our activities there in 24. You remember at the end of 25 that cash amount had to be reclassified from cash to financial assets on the balance sheet that are now back to us and in the cash pool and used to repay part of the RCF. because this allowed us then to significantly reduce the position of RCF below 30% while keeping an amount of cash of a bit more than 70 million euro. Our liquidity position, and we define it as the sum of the cash and the undrawn parts of the RCF, thereby strengthened further from 240 to 262 million euro over the quarter. And then the leverage ratio ended at 3.36 This is of course within the agreed covenant level, and as Laurent will explain in the outlook, we expect it to gradually decrease in the coming quarters. Laurent, now back to you.