Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the US business, specifically regarding contract ramp-ups and profit evolution? A: Gustavo Paz, CEO, explained that the onboarding of new customers in the US is proceeding as expected, with strong growth anticipated in Q4 and continuing into 2025. The ramp-up of capacities and deliveries is being spread throughout the quarters. Geert Peeters, CFO, added that while the US business is currently dilutive, economies of scale and reduced inefficiencies will improve profitability over time.
Q: What led to the change in revenue growth guidance, and how is Europe performing? A: Gustavo Paz clarified that the change in guidance is due to the phasing of orders and deliveries, not a loss of customers. The onboarding of new US customers is on track, but volumes are being spread across quarters. In Europe, Ontex is meeting expectations, with stable baby care volumes and positive innovation impacts.
Q: Can you provide insights into the adult care market and share gains in Europe? A: Gustavo Paz highlighted that adult care is a growing segment due to an active aging population. Ontex is seeing growth in both institutional and retail channels, supported by consumer trends and strategic partnerships with retailers. The company has a strong innovation pipeline that is well-received by customers.
Q: What is the outlook for pricing and mix in Europe, considering branded competition? A: Gustavo Paz noted that the mix is positive due to innovation and competitive advantages in selective categories. While branded players are increasing promotional activities, retail brands remain strong due to high quality and sustainability. Ontex does not foresee major pricing battles and emphasizes its cost transformation program to maintain competitiveness.
Q: What are the plans for refinancing and capital allocation following the Brazilian business sale? A: Geert Peeters stated that Ontex is preparing for refinancing, aiming to complete it by mid-next year. The company plans to reduce gross debt significantly and allocate capital smartly between different financial products, ensuring sufficient headroom and cost efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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