Wall Street Trader schreef op 10 april 2022 13:50:
Ontex is counting on revenue growth and a recovery in profits as the year progresses, but the first quarter promises to be bad, after already a mediocre Q4.
CEO Esther Berrozpe: "Our total costs have increased by 15 to 20 percent, much more than originally planned.
We are also raising our sales prices. We see that the A-brands do that, so there will be room for us too.
The negotiations are underway. And we aim for growth with New Ontex. In Europe, the turnaround after four years of decline in turnover is in sight. In the US we are growing more than 10 percent a year, and with the construction of a new factory we will continue to do so".
It delivered €75 million in cost savings, cutting out management layers yielded €17 million and productivity increases yielded €58 million. These are recurring savings and therefore also important for 2022 and beyond.
Suppose the economy enters a recession due to high inflation and higher interest rates, then that is actually good news for Ontex.
The demand for Ontex products is quite inelastic, you might cut back on hygiene products, but not much.
A couple of weeks ago Bloomberg announced that major shareholder GBL would like to delist Ontex.
The stock initially shot up about 10-15%, GBL of course denied everything, but it is only logical that GBL will make an offer now at this point in time.
GBL is said to have continued to hold talks with potential partners, including private equity firms and peers, to delist Ontex.
GBL has been talking to ENA Investment Capital, the hedge fund that is one of Ontex's largest shareholders, about forming a consortium to buy Ontex. Credit Suisse has been lined up to finance the consortium, said these people following the situation.Ontex already once received a takeover interest from the French PAI Partners of ~ € 26-27. Because it was already not going well with Ontex, they canceled the deal and Ontex eventually ended up in a down fall. There was another major shareholder, ENA Investment Capital (see the open letter that ENA sent at the time) that previously wanted to force something, but nothing came out of it.
www.novumpr.nl/2020/08/07/ena-investm...So now it is time to really close the deal for GBL that still has some cash and can therefore easily make an offer of approximately ~ € 10. A takeover by GBL now makes sense.
In the December Strategy Update, Ontex reiterated its ambition to achieve organic sales growth of 2–3% and an adjusted EBITDA margin of 12.5–13.5% by the end of 2023. By 2025, Ontex targets a profit margin of more than 15%, with a debt ratio of less than 2x.