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    Breaking News

    Ontex Reports Lower Revenues

    Sales impacted by pandemic-related shift to online sales

    02.24.21
    After a surge in demand drove Ontex's first quarter sales to record levels, in particular in Europe, activity dropped sharply in the second quarter, and demand across the traditional distribution channels did not return to pre-pandemic levels. In the second half, Ontex's sales were impacted by the pandemic-related shift to online sales, where retail brands are less present. Furthermore, demand decreased in several emerging markets due to economic downturn. The company's reported sales also reflect the steep and lasting depreciation of most emerging market currencies.

    Ontex's
    revenue of €2.087 billion () was down 3.1% LFL for the full year 2020, and down 8.5% on a reported basis. This includes a €130 million () unfavorable currency effect from the major depreciation of several key functional currencies against the euro, notably the Mexican Peso, Brazilian Real and Turkish Lira. The decrease in LFL sales mainly reflects lower demand for personal hygiene products in tracked retail channels from the second quarter onwards as well as contract losses in Europe, partly offset by a resilient performance in Healthcare and growth in Brazil, Turkey and the U.S.

    FY 2020 sales in Baby Care decreased by 7.1% versus prior year. After a strong surge at the end of the first quarter triggered by the pandemic outbreak, market demand for Baby Care products contracted in retail channels and accelerated in online channels as consumer purchase habits shifted. Contract losses also accounted for lower sales in Europe. Demand in several emerging markets decreased due to the economic downturn, outweighing growth in Brazil and the U.S. Overall, baby pants outperformed baby diapers, particularly in the AMEAA Division.

    Adult Incontinence products delivered the best category revenue performance for the third consecutive year, growing by 3.3% in FY 2020. Adult Inco sales in retail channels grew 8% thanks to the company's leading position supplying its retail customers with their proprietary brands in Europe, as well as strong Ontex brand sales in Brazil, Mexico and Turkey. In the Healthcare Division, growth in the self-pay channel, home delivery and e-commerce offset lower activity with hospitals and nursing home due to the pandemic. The shift in demand towards Adult pants continued, resulting in sales growth that outpaced the overall category.

    Feminine Care revenue was down 1.5% for the full year 2020. Lower revenue in Europe, from lower in-store demand for retail brands and contract losses, outweighed the growth reported by the AMEAA Division in the first half of the year.
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