Ontex sells Mexican business to Softys – Companies

Ontex sells its Mexican business to Softys for approx. EUR 285 million This was announced by the diaper manufacturer on Friday before trading. Softys is a subsidiary of Empresas headquartered in Chile.

The transaction includes Ontex’s Mexico operations and related exports to regional markets, as well as the manufacturing facility in Puebla, Mexico. The Tijuana plant in Mexico will remain in Ontex’s portfolio as an integral part of Ontex’s North American supply chain.

“This divestiture is an important milestone in our strategy to align our portfolio,” said Esther Berrozpe Galindo, CEO of Ontex. “The proceeds from the sale will help reduce our net debt and strengthen our balance sheet. I am convinced that Softys, with 40 years of experience in the personal hygiene market in Latin America, is well equipped to grow the business.” The deal is expected to close in early 2023.

Ontex also published its results for the first half of this year on Friday morning. In that period, revenue increased by 15 percent to 1.152 billion euros. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) fell 53 percent year-on-year to EUR 40 million. ‘Unheard of cost inflation’ continued to negatively impact recurring EBITDA despite savings, volume growth and price increases, according to Ontex.

“We deliver on the group’s strategic priorities: to restore sales, reduce the cost base and carry out divestments to reduce net debt and refocus the group. Unprecedented inflationary pressures and supply chain disruptions have severely impacted our recurring EBITDA. So we will accelerate pricing to mitigate this negative impact. The revenue growth and lower cost base will be a key driver of margin recovery and value creation as the commodity environment improves,” the CEO said.

The transaction includes Ontex’s Mexico operations and related exports to regional markets, as well as the manufacturing facility in Puebla, Mexico. The Tijuana plant in Mexico will remain in Ontex’s portfolio as an integral part of Ontex’s North American supply chain. “This divestiture is an important milestone in our strategy to align our portfolio,” said Esther Berrozpe Galindo, CEO of Ontex. “The proceeds from the sale will help reduce our net debt and strengthen our balance sheet. I am convinced that Softys, with 40 years of experience in the personal hygiene market in Latin America, is well equipped to grow the business.” The transaction is expected to close in early 2023. Ontex also published its results for the first half of this year on Friday morning. In that period, revenue increased by 15 percent to 1.152 billion euros. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) fell 53 percent year-on-year to EUR 40 million. ‘Unheard of cost inflation’ continued to negatively impact recurring EBITDA despite savings, volume growth and price increases, according to Ontex. “We deliver on the group’s strategic priorities: to restore sales, reduce the cost base and carry out divestments to reduce net debt and refocus the group. Unprecedented inflationary pressures and supply chain disruptions have severely impacted our recurring EBITDA. So we will accelerate pricing to mitigate this negative impact. The revenue growth and lower cost base will be a key driver of margin recovery and value creation as the commodity environment improves,” the CEO said.

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