Personal care and baby products manufacturer Ontex has said that its Transform To Grow programme, which is aimed at improving the group's operational efficiency, led to a marked improvement at the end of its financial full year.
The group posted revenue of €2.27 billion for the year, which was down 1.0% on a like-for-like basis.
Regional Performance
The company said that it reported 'solid revenue growth' in its AMEAA region, which largely offset lower sales in Europe.
Adjusted EBITDA was down 1.1% to €261 million. Free cash flow improved by 51% in the period, to €110 million, enabling the business to drive down debt by €46 million.
“Our 2019 revenue and operating profitability were broadly in line with our expectations, despite the anticipated temporary slow-down of our business in Europe and persistent high raw material costs in the first three quarters," commented Charles Bouaziz, Ontex CEO.
Bouaziz added that he was encouraged by the "meaningful improvement" in the business' operating profits in the final quarter, which "reflects the first benefits from our Transform to Grow (T2G) program as it continues to ramp up, and easing raw materials indices.
"We are also pleased by the strong cash flow generation across the past year which exceeded our objectives, supported by T2G initiatives."
Transform To Grow
Among the measures being implemented by the business as part of the T2G programme, which was introduced in May 2019, include the rollout of a new shop floor model in four production sites, a new warehouse management system, measures to lower transportation costs, and tighter management of working capital.
The group has also invested in local manufacturing capacity in the US, to keep costs down and build on its 'solid commercial progress' in that region.
Coronavirus Impact
The business added that while it sources several raw materials from China, it has not experienced any 'material adverse impact' from coronavirus on its operations.
'Further spread of the coronavirus leading to restrictions in the transportation of goods and individuals could nevertheless lead to disruptions to our supply chain and manufacturing organisation, increased logistics costs and delayed shipments to customers,' it said. 'We continue to monitor the situation closely.'
Looking ahead to the coming year, Ontex said that it expects to deliver higher revenue, operating profitability and net profit in full-year 2020.
"We are also stepping up investments in innovation, information technology and marketing to further strengthen the company’s long-term competitiveness and growth potential, to create value for our stakeholders," said Bouaziz.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
