Ontex’s revenue of Core Markets was €396 million ($403 million), up 10% like for like, driven by 5.1% volume/mix growth and 5.3% overall higher prices. With a 2.9% increase compared to the previous quarter, this marks five consecutive quarters of sequential growth. Revenue was up double digit in Europe, while in North America the evolution was more subdued due to a higher comparable in 2021. Forex fluctuations added 3.6%, with the significant year-on-year appreciation of the U.S. dollar and Russian ruble, increasing revenue 14% overall.

The volume and mix increase of 5.1% was spread equally over both, with strong market momentum supplemented by the contract gains secured in 2021 both in Europe and North America. Retail brands have gained share overall, especially in the second quarter, as consumers seek better value-for-money alternatives. The year-on-year uplift is lower than in the first quarter, as the first quarter benefitted from a lower comparison base and by pre-loading by customers.

Prices were up 5.3% on average, versus 1.7% in the first quarter. By June prices were up further and as more pricing has already been secured, these are expected to continue to increase in the coming months. Additional pricing actions put in place to respond to the continued inflation of input costs.

In baby care revenue grew 11% like for like. Baby pants growth accelerated compared to the first quarter, to strong double-digit year on year, benefitting from a new product range and share gains from its customers. Ontex outperformed the retail brand market, which was positive overall. In adult care revenue growth was 13% like for like, with double digit growth both in the institutional channel and in retail channels. Feminine care products grew 4% like for like.

Esther Berrozpe, Ontex’s CEO, says, “We are delivering on the group’s strategic priorities: turnaround of the top-line, bringing down the structural cost base and divestments to reduce net debt and refocus the Group. The unprecedented cost inflation has however hit our adjusted EBITDA significantly during the first half, so we will continue to accelerate pricing to alleviate this negative impact. Revenue growth and the lower cost base will be a major driver to margin recovery and value creation once the raw material environment improves.”

On July 29, Ontex announced it entered into a binding agreement to sell its Mexican and related export activities to Softys S.A. marking a milestone in the transformation of Ontex. The transaction is based on an enterprise value of MXN $5,950 million, or approximately €285 million ($290 million). This includes a deferred payment of MXN $500 million ($24.5 million), spread over a maximum of five years. Net cash proceeds are estimated at approximately €250 million ($254.5 million), after the impact of taxes, transaction expenses and balance sheet adjustments. The closing is foreseen by early 2023, subject to the customary conditions, including the applicable merger clearance approvals. Proceeds from the transaction will be exclusively applied to reduce debt.

Ontex is also making progress in the divestment of its remaining Emerging Markets businesses, as discussions with potential acquirers continue.