Q1 2019 Babycare revenue decreased by 3.2%. Sales of baby pants continued to outperform baby diapers, and Ontex says it remains committed to serving growing consumer and customer demand for pants as an attractive alternative to diapers. Its local baby diaper brands posted higher revenue in the majority of its markets. The decrease in babycare was driven by contract losses of retailer brands in Europe in H2 2018.
Revenue in the Adult Inco category was up 1.5% in Q1 2019 versus a strong comparable figure a year ago. Sales in retail channels, comprising its own brands as well as leading retailer brands, increased 8%. In institutional channels, revenue decreased against a high comparable figure last year. Demand for Adult pants was solid across retail and institutional channels.
Femcare revenue was 6.3% lower in Q1 2019. Aside from the strong comparable a year ago, this is mainly explained by lower volumes related to contract losses of retailer brands in Europe, where the majority of its revenue is generated.
Charles Bouaziz, Ontex CEO, comments: “Our first quarter performance was in line with the trends we signaled in March when we published our full-year results. Our revenue was impacted by lower sales of retailer brands in Europe, but we posted good growth of Ontex brands in other markets. While raw material costs have been stabilizing over the last months, year-on-year they remained a headwind in Q1, as did foreign exchange. However, we were able to partly mitigate them through cost savings and pricing actions. The T2G program that we are unveiling today at our Investor Update in London will boost operational efficiency and drive commercial excellence, taking Ontex to the next level by accelerating the execution of our strategic priorities and value creation.”
Ontex’s Transform2Grow (T2G) plan has two main objectives. The first is to boost operational efficiency by reinvigorating its manufacturing strengths, optimizing transportation and warehousing, leveraging scale in procurement and enhancing innovation strengths in product design. The second is to drive commercial excellence by increasing focus on high-growth product segments, offering a more differentiated value proposition to customers and adapting its innovation process to increase speed to market.