Months after warning investors that challenges in the baby care market would negatively impact its full year results for 2025, Belgian personal care products manufacturer Ontex reported a difficult 2025, meeting its most recently revised guidance but falling well short of initial expectations set earlier in the year.

Full-year revenue declined 4.9% on a like-for-like basis to €1.76 billion, driven entirely by lower sales volumes. The downturn was largely attributed to weakness in baby care retailer brands across Europe and North America, where lower consumer demand was compounded by aggressive promotional activity from major A-brands and intensified competition.

“We faced softer demand in 2025, especially in baby care,” says CEO Laurent Nielly. “We could not pivot on some of the growing segments as fast as we wanted to in the midst of our transformation in Europe, which limited temporarily our flexibility. T his was amplified by some disruption in supply that we had discussed in previous quarters.”

According to CFO Geert Peeters, North American baby care volumes dropped 12%, largely due to lower contract manufacturing activity. Feminine care volumes fell 2%, broadly reflecting overall market trends. Adult care, however, provided some relief, with volumes rising 1%, supported by steady demand in the healthcare channel. The company, which is largely focused on health care channels in adult care, is increasing capacity to capture additional growth in the retail segment of the market.

Transformation Complete

Ontex completed its three-year transformation program in 2025, following the divestment of its emerging market businesses with the sale of its Brazilian operations in April and Turkey in November.

In Belgium, the company is restructuring its manufacturing footprint to improve cost efficiency and competitiveness. This includes closing its site in Eeklo and transforming its Buggenhout facility into a specialized center of excellence for medium and heavy adult incontinence products. The project, announced in 2024, represents a €40 million investment and includes expanded automation and a stronger focus on bio-based products.

In North America, Ontex has continued to expand capacity at its Stokesdale, North Carolina facility, originally opened in 2020 as part of a $100 million investment. Late last year, the reported it had tripled production capacity at the site due largely to success in the diaper pants segments.

Cautious Outlook for 2026

After two solid years in 2023 and 2024, management expects market conditions to continue to be challenging throughout 2026.

“With the overall market conditions, we anticipate 2026 to remain pretty similar to 2025 overall with low consumer confidence and continued promotional activity by A brands,” says Neilly. “Yet we equally expect the adult care momentum to continue and overall retail brand to remain a compelling consumer proposition with opportunity to grow share.”

In Europe, declining birth rates are expected to slightly reduce baby care demand again in 2026, while in North America, lower contract manufacturing sales will create difficult year-on-year comparisons in the first half of 2026, particularly in the first quarter. This contrasts with early 2025, when shipments were accelerated amid trade-related uncertainties between the U.S. and Mexico.

Despite the challenges, Ontex is targeting a 10% increase in adjusted EBITDA in 2026, supported by an accelerated cost transformation program and a gradual return to more stable operations. The improvement is expected to build progressively throughout the year, starting with a soft first quarter comparable to the fourth quarter of 2025. Sales volumes are also expected to recover by the end of the year as the company’s transformation efforts bear fruit.