Earnings call transcript: Ontex Group Q3 2025 shows revenue decline

Ontex Group NV reported a 5% year-over-year decrease in Q3 revenue, missing forecasts. The company’s stock remained stable at €6.3, with no immediate market reaction. The earnings call highlighted a €445 million revenue, falling short of the expected €459.95 million.

Key Takeaways

• Q3 revenue decreased by 5% year-on-year to €445 million.
• Sequential revenue growth of 4% and a 3 percentage point improvement in EBITDA margin.
• Cost transformation program achieved €16 million in net savings.
• Baby care segment experienced an 11% volume decline.

Company Performance

Ontex Group’s performance in Q3 2025 reflects challenges in the market, with a notable 5% decline in revenue compared to the previous year. Despite this, the company achieved sequential growth and improved its EBITDA margin, suggesting some operational improvements. The company faces a soft market environment in Europe and North America, contributing to the revenue shortfall.

Financial Highlights

• Revenue: €445 million, down 5% year-on-year.
• Adjusted EBITDA: €51 million.
• EBITDA Margin: 11.4%, a 0.6 percentage point decrease year-on-year.
• Net Debt: €543 million.
• Leverage Ratio: 2.7x.

Outlook & Guidance

Ontex expects full-year revenue to decline by low single digits, with adjusted EBITDA projected between €200 million and €210 million. The company anticipates a 5% revenue growth in Q4, with a €30 million sequential EBITDA increase. Positive free cash flow and a reduction in net debt are targeted, with an expected leverage ratio of 2.5x by year-end.

Executive Commentary

CEO Gustavo Calvo Paz remarked, "While we are turning the tide sequentially getting back to growth, we have continued to build on our foundations of our operations." CFO Geert Peeters added, "Our SG&A is not that if we sell more contracts we have more SG&A. Our SG&A is a rather fixed amount."

Risks and Challenges

• The decline in baby care volumes could signal challenges in maintaining market share.
• High net debt levels may pose financial risks if revenue continues to decline.
• The soft market environment in Europe and North America could pressure future earnings.

Q&A

During the earnings call, analysts focused on new contract wins in the US and Europe, drivers of margin improvement, and the management strategy for SG&A costs. Concerns about competitive dynamics in the baby care market were also addressed.

Full transcript - Ontex Group (ONTEX) Q3 2025:

Geoffroy Raskin, Investor Relations, Ontex Group NV: Good afternoon everyone and thank you for joining us today. I’m Geoffroy Raskin from Investor Relations and I’m pleased to have with us Gustavo Calvo Paz, our CEO, and Geert Peeters, our CFO, to present the third quarter 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. With that cleared up, Gustavo, over to you.

Gustavo Calvo Paz, CEO, Ontex Group NV: Thanks, Geoff. While market conditions have not been supportive in 2023 so far, our ongoing transformation journey continues to structurally improve our competitive position in the market. You can see the benefits of this in the quarter-on-quarter results where we turn the sequential growth. Our revenue in Q3 is up 4% compared to Q2, driven by volumes from new contract wins. In a continuous soft market environment, our EBITDA margin improved by 3% points thanks to the revenue growth and net cost improvement, including continued delivery on our cost transformation program. Meanwhile, our leverage remained at 2.7% over the quarter. The soft market environment in the first half of the year did continue in the third quarter, therefore our results are still lower compared to last year. Let me pass you over to Geert for a more detailed financial analysis.

Geert Peeters, CFO, Ontex Group NV: Thanks a lot, Gustavo. On this slide you will find the different components that contributed to the 5% year-on-year decrease of revenue in Q3 to reach €445 million. In the quarter, the price and mix impact was almost nil and contains a limited price investment and a small positive mix contribution. Since mid last year, prices were rather stable, leading to a neutral year-on-year impact. The lower revenue is explained by lower volumes as in the previous quarters. The drop amounted to 4% and is in line with the contraction of the consumer demand in private label in Europe and North America. In adult care, we’re growing by high single digits in the retail channel and we’re ramping up capacity, including the healthcare channel where Ontex has a high exposure and demand is more stable. Overall growth in adult care was 1%.

In feminine care, we performed strongly with a volume growth of 5%, and baby care volumes were down 11% as demand continued to be soft in private label, partly as promotional activities of A brands continued in certain countries. In North America, this was exacerbated by a decline in contract manufacturing. Positive was the startup of new contracts in North America and in Europe, albeit that some started a bit later in the quarter than originally expected. We also recorded a 1% negative impact from Forex caused by the depreciation of the British pound, Australian dollar, and especially the U.S. dollar. What this means on a quarter-on-quarter basis can be seen on the next. In the first two quarters, we have experienced sequential revenue declines by 5% each, but we are now turning the curve in quarter three with 4% sequential growth, including a positive price mix contribution.

Volumes dropped in the first quarter mainly due to soft consumer demand, and in the second quarter they came down further as on top some customers decreased inventories and Ontex faced some supply chain disruptions, amongst others due to the outage in our Segovia plant. Although the market remains very soft in the third quarter, customer destocking is over and capacity constraints are being solved. Moreover, we gained new contracts that mostly started up at the end of the quarter. Forex had a positive contribution in the first quarter and turned negative afterwards, mainly due to the depreciation of the U.S. dollar. Now let’s move to the adjusted EBITDA on the next slide. On the year-on-year bridge, we find the building blocks which led to the adjusted EBITDA of €51 million.

The revenue decrease had a €6 million negative impact, which is a main explanation for the year-on-year adjusted EBITDA drop. Indeed, as our cost transformation journey continues, net savings for an amount of €16 million in the quarter fully offset cost increases. Contributions came from optimizations in innovation, purchasing, supply chain, and manufacturing, including the contribution from the ongoing Belgian footprint transformation. Raw material costs were still up year-on-year, mainly for fluff and packaging materials, albeit less than in Q2. Actual prices for raw materials have started to stabilize after the peak but still remain higher than the level of last year. Other operating costs were up largely due to inflation of salaries, logistics, and other services. Furthermore, there are still some supply chain inefficiencies, which, however, are declining.

Also, the increase in operating costs is partly offset by lower SG&A costs, which have been adapted to the lower volume level. The margin amounted to 11.4%. While this represents a 0.6 percentage point decrease versus last year, it is a 3 percentage point improvement versus Q2. More on the quarter-on-quarter comparison can be found on the next slide. We experienced two quarters of sequential adjusted EBITDA decrease, especially in the second quarter. In Q3, we have been turning the tide from Q2, from the Q2 low point to return to the Q1 level. You can first notice the impact of the revenue evolution, which I described earlier. It is important to see that we have already recovered in the third quarter about 75% of the negative impact of the first half of the year. Net costs started to ease in Q3 versus Q2.

Stabilization of raw material costs and improved supply chain efficiency allowed our continued cost transformation efforts and SG&A streamlining to flow through. Before I pass the word to Gustavo, let’s cover first the leverage and net debt on the next slide. With solid EBITDA delivery, no material restructuring cash outs, and managing the CapEx spend, we produced positive free cash flow in the quarter. Net debt for the group thereby reduced by €9 million to €543 million. Maintaining a solid liquidity position, the leverage ratio remains stable at 2.7 times as the lower net debt was offset by slightly lower adjusted EBITDA in the last 12 months. Gustavo will now give more insight into our expectations to further improve revenue and EBITDA in Q4.

Gustavo Calvo Paz, CEO, Ontex Group NV: Thanks Geert for this detailed analysis. I want to start saying in July we have talked about the several adverse factors that affected our results in the H1 and I shared what we should expect to improve in the second half of the year. What happened so far? Q3 price is stable, negative price carryover has stopped, new contract wins have started in North America and in Europe customer destocking is over, new capacity in high growth product categories has come on stream. The Segovia plant outage as well as the packaging material shortage are over. The temporary measures to mitigate the U.S. tariffs have phased out and finally raw material prices stabilize. The second half of the year has started largely as expected and we expect this to be reflected further in the fourth quarter as we can see on the next slide.

Looking at revenue first on the left in dark blue, we have had 4% sequential growth in Q3 with positive price mix and especially thanks to volume with the new contract wins kicking in at the end of the quarter, our current projections indicate that 5% growth in Q4 is realistic based mostly on volume from the new contract wins. On the right side in light blue we have the quarter on quarter evolution of adjusted EBITDA. In Q3 we grew by €15 million thanks to higher revenue and improving net cost. In Q4 we expect cost to improve further sequentially with further raw material price stabilization and further operating and SG&A cost optimization combined with the positive impact of volume driven revenue growth, we project a sequential increase in EBITDA at least €30 million.

As a result, we keep our expectations for the year at the same level as in July. As shown on the next slide, revenue for the year is expected down by low single digit like for like and adjusted EBITDA in a range of €200 million and €210 million. Solid EBITDA generation and working capital management efforts in Q4 will drive positive free cash flow further in the quarter and thereby bring the free cash flow for the year to break even. Combined with investments proceeds this brings net debt down by year end and brings back the leverage ratio to about 2.5 times, which is the level at which we exited 2024.

Let me finish saying while we are turning the tide sequentially getting back to growth, we have continued to build on our foundations of our operations as stipulated in our strategic roadmap, resulting in Ontex becoming more strongly positioned for the future. With that, Geert and I are ready to take your questions.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Thank you, Gustavo and Geert, for the Q&A session. If you wish to ask a question, please dial the pound key followed by 5 to enter the queue. If you wish to withdraw your question, please dial the pound key followed by 6. Please limit your questions to two at a time. The first question comes from Charles Eden from UBS. Charles, your line is open. Please go ahead.

Hi, thanks for taking my question. I just wanted to dig a little bit deeper into the implied Q4 EBITDA because I guess to get to the bottom end of the full year guidance, that means you need to do at least €63 million of EBITDA in core markets.

In Q4.

Could you just help us in the building blocks there? Is it just that the phasing of the new contracts are not in the base in Q4 in Q3? When we get to Q4 that comes and that’s the major delta, are you baking an improvement in the underlying markets in Europe? If so, is there anything you’re seeing to give you confidence in that? Linked to that, when I think about 2026, is there anything one off in that $63 million plus you’re saying for Q4 or should we be saying that’s the quarterly run rate to expect for 2026? If so, that implies $250 million of EBITDA. Is that, if that’s not the right way to think about it, could you help me bridge those factors?

Thank you.

Geert Peeters, CFO, Ontex Group NV: Charles, I take that question. Thanks for the two questions. First, on the Q4, if you look at the bridges we made. First of all, your calculation is right. We entered the low end of the EBITDA and we need about €63 million, which is €12 million extra from the Q3. How do we think to achieve it?

Geoffroy Raskin, Investor Relations, Ontex Group NV: About.

Geert Peeters, CFO, Ontex Group NV: More than a bit more than half. It’s revenue related, as you can see. We expect about 5% at least extra revenue as compared to Q3. This is mainly related to the new contracts. As we said, those new contracts started only at the end of September as well, contracts in Europe, but at the same time two big ones in North America that will have a full quarter impact. That will be the main driver to a certain extent. Also, we’re expanding the capacity in adults, so that will also help us. On the market itself, we’re not assuming an improvement on the market. If markets would improve in the last quarter, that could bring us some upside. The other half, but it’s a bit less than half, will be mainly cost driven.

On one hand, we said raw material prices are stabilizing and the impact year-on-year is still negative. Quarter on quarter, we have a slight improvement again in Q4, and at the same time we’re also looking at our SG&A. Our activity level is lower, so we want to keep the SG&A at a level which is in line with that lower volume level. To translate it to next year, we’re still working on the budget, so there’s not much I can tell about that. Of course, the new contracts will be a very strong basis for next year. That will be an important driver for the budget of next year.

Okay, thank you. Nothing one off, the cost savings in Q4 are permanent. There’s not sort of, you’re phasing some costs into next year. I’m just trying to understand, there’s nothing that you’re calling out that would not suggest that $63 million can be a recurring level of profitability, is that correct?

Yeah, there are no big one-offs. At the same time, of course, we adjusted SG&A. It might be that we have to release it a bit more next year. It’s not that it just copy paste multiplied by four.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Understood. Thank you very much. Okay, thank you, Charles. The next question comes from Usama Tariq from ABN AMRO ODDO BHF. Usama, the line is yours.

Hi, good morning team. Thank you for the opportunity. I just have two questions. Firstly on pricing for Q4, you indicate relatively stable pricing. Do you see some negative effects from promotional activity still in Q4? Do you expect that to have an impact on you? In general terms, do you think you will be forced into cutting some prices if other brands do very strong promotional activity? My second question would be, could you kindly also recall what is the restructuring cash out that you still have to do or expect in Q4 or in 2026? Thank you. That would be my two questions.

Gustavo Calvo Paz, CEO, Ontex Group NV: All right, Usama, thank you very much. I’m going to take the first question and Geert is going to take the second one. On the pricing front, yes, pricing now is stable for us. When we are talking about the stable, it’s always stable for us. We are not expecting any changes in Q4 in our front, no expectations to change the pricing, our pricing. What can happen in the market is a competitive market at this moment. Because when the market is.

Geert Peeters, CFO, Ontex Group NV: In a.

Gustavo Calvo Paz, CEO, Ontex Group NV: Soft mode, definitely there is more competition. Competition is not just on the pricing front. Competition is seeing promotions and ABRMs are for sure defending their positions. Also, competition from other private labels maybe. Our contracts, they have a pricing already and we will continue with that pricing. There is no move for us depending on the market.

Geert Peeters, CFO, Ontex Group NV: Okay, Saman, on the second question, non-recurring good news is that in Bugenhout, which is the plant which we’re completely upgrading, we’re fully getting up to speed. New machines have been installed. We expect to have a fully operational plant in a very new state, best of practice states by Q2 2026. That means also that we will be getting the savings from that one, because it will be an important contributor for the cost transformation last quarter. It also means that we have now the restructuring costs kicking in. Last quarter of this year we’re expecting a bit more than €5 million still as non-recurring. For Q1, Q2 next year it will be a bit more than €10 million related to that footprint in Belgium.

Is more than $10 million per quarter, or is it $10 million in total?

In total for next year, last quarter of this year, €5 million, €10 million for next year. If you add up all the amounts that we already reported in the past, you’re in line with the provision that we made last year because we had a P&L provision for it. It’s a cash out on a provision that we made in our books.

Okay, thank you so very much. Thank you. That would be all from me.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Thank you, Usama. Our next speaker is from KBC Securities. Wim Hoste, your line is open.

Yes, good morning everybody. Two questions for me please. Can you elaborate on the contract book for next year? Are the new recently gained contracts by now fully started up, or are the new contracts to be expected to contribute also into next year? If you can clarify that. The second question would be on the contract manufacturing business in the U.S. Can you remind us how big that now is and how you expect that.

Gustavo Calvo Paz, CEO, Ontex Group NV: To further evolve in the next few quarters?

Thank you.

Okay, Wim, thank you. Your questions. Contract wins. We do have contract wins this year. The key, you know, at the end, towards the end of the third quarter and will continue and will continue for the entire 2026 and 2027 in some cases for sure. We have won also some new contracts that are going to kick in next year. They are not yet, you know, there is always a time when the tender happens, you win and then you start supplying. We are going to have very good news next year. The good news has happened already with the contract win. Yes, we have in 2026 contracts coming. Our projections on gain and losses is positive throughout also 2026. Second question, you ask about contract manufacturing and, you know, it’s an interesting question because years ago contract manufacturing was the larger business that we had in the U.S.

Starting in 2023, we decided to put more strategic emphasis on retail brands, on private label segment, and we started to grow significantly our private label segment while contract manufacturing, you know, is facing more the soft market situation at the moment. Our contract manufacturing volume is declining as a result of the situation in the market, in general market. Contract manufacturing is brands that we don’t control at all, while in the private label sector with the retailers, we work together with the retailers on developing their private label for the baby care segment in this moment. We are growing significantly in the retail brand business while contract manufacturing is declining at the moment.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Okay, understood.

If I can just follow up on the first question. The contract wins you commented on for next year, are those in the U.S. market or are those in Europe?

Both. Both. Both.

Gustavo Calvo Paz, CEO, Ontex Group NV: There are some contract wins this year, four impacting in U.S. next year, and contract wins important, with waste in Europe impacting next year.

Geert Peeters, CFO, Ontex Group NV: Yeah, okay, understood.

Thank you.

You’re welcome.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Thank you, Wim. Our next question comes from Maxime Stranart from ING. Maxime, your line is open.

Hi, good morning. Gustavo and Geert. Two questions on my end as well. First of all, looking at adult care, where the growth is somewhat below what SCA has reported. If you can elaborate a bit on the reason why the growth has trailed branded products in adult care and how you see this evolving in the future. Secondly, looking at Q4, especially in your guidance, quick math on the bottom end would imply that your margin would jump by more than 200 basis points. Obviously, to 13.5% in reach since the pandemic. Quite surprised about such a guidance in terms of margins. If you could elaborate on that and following up on Charles’ question, is it some level we should see as sustainable in the long run? That would be awesome. Thank you.

Gustavo Calvo Paz, CEO, Ontex Group NV: All right, Maxime, thank you. On other care growth, our other care growth in retail brands is high single digit, which is, I would say, that is higher than even what the market is growing. We are very, very happy and pleased how we are performing there. As we said before, more capacity in certain segments or categories, high growth categories, are coming into stream with good innovation. We know that we are going to continue getting wins in the adult care segment in the retail brand. You have the healthcare sector for us, the healthcare channel, which is different because those contracts are much long term. It’s different, you know, big tenders normally with the government or big companies in nursing homes.

Those tenders are long term contracts and sometimes it happens that in one specific quarter you can have one coming in and another one coming out and maybe the quarter is not exactly. We need to measure healthcare more, at least on a yearly basis, how we are doing. The net result of the year is a positive result also for the healthcare business. Repeat high single digit growth in the retail brand of adult care, which is higher than the market growth.

Geert Peeters, CFO, Ontex Group NV: Now for the second question, Maxime. Indeed, if you calculate back for Q4 based on the guidance, you arrive at about 13.5%. Of course, our margins. First of all, as you know, we are a very volume-driven company. That means that the volume growth in Q4 and having a better absorption of our fixed costs will help us with our gross margins. That explains the improvement. Now your question also is to what extent is that sustainable? Of course, there are several components. It’s about raw material pricing. I was telling you also on the SG&A, currently we’re curtailing the SG&A. Also, always every quarter we have to take positions on what are, for example, the rebates we expect to receive. It’s a combination of all those elements that will give us the 13.5%.

Towards the future, I can say definitely a sustainable margin, which we think we can have in a sustainable way in the future. It doesn’t mean it’s for the coming quarters that you can just. Same answer as before on the revenue, that you can just multiply by four. That would be more a goal for the future. It’s now a positive combination of different components.

That’s very clear. Thank you for the answers.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Thank you. Maxime. As a reminder, if you wish to ask a question, please dial the pound key followed by five. Our next question is from Karel Zuytte from Kepler Cheuvreux. Karel, your line should be open.

Gustavo Calvo Paz, CEO, Ontex Group NV: Yes.

Good morning all. Thanks. I have a question on the baby business and the capacity in Europe, and that kind of relates to pricing because I think the market has been difficult for a while now. Volume’s about 10% down, and you’re probably not the only one suffering. How do you see this with regards to capacity utilization in your European platform? How do you see price negotiations or new contracts into next year for the European baby business? The second question is on the reduction of SG&A in Q4. I don’t completely understand why it should be down. You’re landing a couple of new contracts. That probably comes with more commercial efforts as well. Why would SG&A be down sequentially? Thank you.

All right, Karine, I’m going to take the first one. I believe that Geert is going to answer you the second question. Your point is very valid, right, because the capacity installed in, generally speaking, right, in the whole European market is now getting idle in some cases. We should not also forget the transformation of the baby care business. Baby diapers is going down more significantly while baby pants, although now these past quarters slowed down the growth, but year on year it’s been growing baby pants. There is a move from baby diapers to baby pants. Also within baby diapers and baby pants and youth pants, there is a dynamic that is happening that is larger sizes. There is a transformation between a movement, more consumption in larger sizes. This is due to a trend that babies are using diapers for a longer period of time.

When we see each other next, I want to explain a little bit more because there are very interesting insights regarding that happening because that trend is happening not just here, but also in the U.S. It’s following something about also the aging of the couples of the parents. Interesting to know. In our case in particular, we are renewing, as you hear from us all the time, that we are doing footprint work, footprint all the time, investment in efficiencies. We use this also momentum of more capacity or more free capacity in diapers to do the adjustments where we need to do it, thinking in the future, thinking the trends. You ask about if this excess capacity cannot impact in the next future contracts and pricing in baby care.

I’m going to say that potentially yes, if you just play in the very, very low end of the segment, definitely. We started, you know, some years ago we started to invest significantly in innovation coupled with our partners or customers, retailer customers that you know, partner with them in innovation. We’re bringing a lot of innovation into the market which it’s very important to take into consideration that it’s not just a price type of competition, also it’s innovation, it’s sustainability, it is customer service, it’s quality assurance. All those things that for which we as a company when I mentioned that we are working on our foundations to structurally change our foundations and be more efficient, all of that is included and that gave us the competitiveness into the marketplace.

We are not just competing in the pricing, we need to be more efficient, yes, definitely, but also innovative and have high customer service and quality assurance. Of course the patents and the regulatory is also a very important subject. That’s for baby care. Now I’m going to leave here on.

Geert Peeters, CFO, Ontex Group NV: The second question, Gustavo, on the question of the SG&A, first of all to clarify, if you look to the quarter on quarter from Q3 to Q4, there SG&A is less an explanation because SG&A is already lower in Q3. The explanation from Q3 to Q4 in operating costs is more related to stabilization of raw material prices and gaining further efficiency. Now on the SG&A itself, if we look at SG&A at a lower level in Q3 and Q4, looking at it and explaining a bit more on why SG&A is lower. For me there are three components. First of all, important for you to understand our SG&A, it’s not that if we sell more contracts we have more SG&A. Our SG&A, it’s a rather fixed amount. All the sales teams, all the administration, it’s in place. That means it’s a rather fixed cost.

It doesn’t mean of course that there are three ways to bring the SG&A down. It’s first of all cost consciousness. It’s about how we function, how much we travel in an organization, all that type of stuff. We’re in a very cost conscious mindset over the last months because of the lower results, which is also logical that we do that. Second thing is of course we are.

Looking.

Extra to being a more efficient organization. How can we work more efficiently with the staff we have? That’s the second area that’s of course more sustainable towards the future. Then a third component, there’s always a variable component of course in the SG&A because part of the remuneration of management, of sales, it’s a variable remuneration which is down because of the sales and the EBITDA which is down.

Okay, very clear. Thank you.

Geoffroy Raskin, Investor Relations, Ontex Group NV: All right, thank you. The next question comes from Marcus Schmidt from ABN AMRO ODDO BHF. Marcus, your line is open.

Good afternoon. Thanks for taking the question. I have one just on free cash flow guidance. You had $19 million in Q3. $31 million is therefore left to meet the guidance. You expect apparently strong EBITDA in Q4, and you paid the cash interest on the bond already in July. You just mentioned that there will be some restructuring costs in Q4. This brings me to about $10 million of contribution from inventory releases in Q4 to meet the guidance. Is this assumption about correct or do I miss something here?

Geert Peeters, CFO, Ontex Group NV: Marcus, I love that you already give 90% of the answer because indeed the drivers of the better free cash flow in Q4 are EBITDA, it’s indeed the high yield bond coupon. The next one is only in January. That’s an important explanation. Non-recurring, there will be some non-recurring, but it’s limited. The 2 other components are CapEx. We are, of course this year because our result is less, we’re not spending the full CapEx that we intended to do without hampering the business because I can tell you the key CapEx we need to build the capacity, for example, in adult care. Of course, that one continues. We’re also bringing down CapEx. The last element is, like you say, on the working capital. In the working capital there are always two elements. First of all, at the end of the year you have the typical seasonal impacts.

Our inventories are always down in the Christmas market period towards the end of the year because we produce less at that moment. That’s one of the components. The other component is you know that we have been talking in Q3 on inefficiencies. We solved a lot of inefficiencies in Q3 but having the full impact in Q4 and that’s mainly on an inventory level. We believe we still have a step we can, we will make in the short term on inventory. Your conclusion is quite correct.

Almost on target.

Okay, great.

Thank you very much.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Thank you, Marcus. Our last question comes from Karine Elias. Karine, the line is open.

Hi, thanks again for the call and appreciate taking my question. Sorry if you’ve covered that before, but just wondering if you can comment on the competitive environment. Are you seeing any changes with regards to the eight brands’ behavior on promotional activity? That would be very helpful, thank you.

Gustavo Calvo Paz, CEO, Ontex Group NV: Hi, Katerina Augustavo here. The eight brands, yes, are defending their volumes and of course as it was expected from our side and that is in both regions where we are focusing on in Europe and in the U.S. For them also, volume is important for every single company here. In baby care in particular, that is a declining market at the moment. What we are expecting for the future is that we are expecting to continue competing. Private label is a very important business for the retailers and we are not expecting that that is strategically changing the retailers. Retailers and I, we are all constantly working together on continuously putting in place consumer-driven volume growth for their private label. We compete through today brands, through the retail brands in hand to hand with them. It’s going to be competitive. In other words, continue to be competitive.

That’s very helpful, thank you, and good luck.

Thank you.

Geoffroy Raskin, Investor Relations, Ontex Group NV: There are no more questions, and thereby I hand you back over to Gustavo for your closing remarks.

Gustavo Calvo Paz, CEO, Ontex Group NV: All right, thanks all for the questions and the interest and participating in the call. Perhaps I’m going to repeat something that I said earlier during the presentation, that while we are turning the tide sequentially and getting back to growth, we have continued to build our foundations of our operations as stipulated in our strategic roadmap, resulting in Ontex Group NV becoming more strongly positioned for the future. Thank you again. Thank you very much and see you next.

Thank you.

Geoffroy Raskin, Investor Relations, Ontex Group NV: Thanks for joining today’s call. You may now disconnect. Sam, you can stop the music. Good afternoon everyone, and thank you for joining us today.

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