Q2 2026 Ontex Group NV Earnings Call

Speaker #1: Good afternoon, everyone, and thank you for joining us today. I'm Jeff Ruskin from IR, and I'm pleased to have with us Laurent Millet, our CEO, and Hirk Peeters, our CFO, to present the outcome of our strategic review and the results of the first half year of 2026.

Speaker #1: Before that, let me remind you of the safe harbor regarding forward-looking statements. I will not read it out loud; what I will assume you will have duly noted it.

Speaker #1: With that cleared up, Laurent, over to you.

Speaker #2: Thank you, Jeff, and good afternoon, everyone. Today we have several key messages to share, of course our H1 results and our outlook revision. But also the change of CFO we just announced, and I want to take the opportunity to thank Hirk not only for his numerical contribution in the last 2.5 years, but also to be there with me today as we guide you through some of the key changes at Ontex.

Speaker #2: And in fact, today I will spend my comments on the strategic review first. Before moving to highlights of H1 and our outlook, then Hirk will cover the financial analysis of the half year; I will come back to give you our priorities for the remainder of the year.

Speaker #2: When I took the helm of the company, my first mission was to ensure we would stabilize our business. This task will stay with us as we face a difficult environment.

Speaker #1: Good afternoon, everyone, and thank you for joining. I'm Geoffroy Raskin from IR, and I'm pleased to have with us Laurent Millet, our CEO, and Geert Peeters, our CFO, to present the outcome of our strategic review and the results of the first half-year of 2026.

Speaker #2: We've been very fast in deploying pricing actions while at the same time pushing for more cost initiatives. In parallel, my first 6 months as a CEO have been dedicated to taking a fresh and objective look at every aspect of our business.

Speaker #1: Before that, let me remind you of the Safe Harbor regarding forward-looking statements. I will not read it out loud; I will assume you have duly noted it.

Speaker #2: With the support of the board, we did deep review in both North America and Europe leveraging external advisor and our full team. The outcome of this work is leading to a fundamental transformation of the company to resume both top and bottom line.

Speaker #1: With that cleared up, Laurent, over to you.

Speaker #2: Thank you, Geoff, and good afternoon, everyone. Today we have several key messages to share: of course, our H1 results and our outlook revision, but also the change of CFO we just announced. I want to take this opportunity to thank Geert, not only for his numerical contribution over the last two and a half years, but also for being here with me today as we guide you through some of the key changes at Ontex.

Speaker #2: We have not waited to enter into execution mode. Actually, the consequences of the Middle East crisis made it all the most urgent for us to act.

Speaker #2: And as you can see here, we have taken already many steps. Finally, I have made several changes in our leadership team in addition to the new CFO we announced today, we have backfilled the head of Europe and have a new head of North America.

Speaker #2: In fact, today I will spend my comments on the strategic review first, before moving to highlights of H1 and our outlook. Then Geert will cover the financial analysis of the half year. I will come back to give you our priorities for the remainder of the year.

Speaker #2: But let me now explain a little bit more what is behind our fundamental transformation. It is articulated around 4 major shifts. First shift is to increase structural productivity by launching an ambitious expanded program which we label Focus to Value.

Speaker #2: When I took the helm of the company, my first mission was to ensure we would stabilize our business. This task will stay with us as we face a difficult environment.

Speaker #2: It will be a central pillar of the transformation, and I'll come back on the next slide with more details. Second, we are resetting our approach in North America to transition from volume-led expansion to a disciplined value creation model focused on profitability, asset efficiency, and returns.

Speaker #2: We've been very fast in deploying pricing actions, while at the same time pushing for more cost initiatives. In parallel, my first six months as CEO have been dedicated to taking a fresh and objective look at every aspect of our business.

Speaker #2: Third and fourth relate to Europe. Where we will both accelerate adult care to corner store corner stone of our future profitable growth, while adopting a more targeted approach to protect our important baby and feminine care positions.

Speaker #2: With the support of the Board, we did a deep review in both North America and Europe, leveraging external advisors and our full team. The outcome of this work is leading to a fundamental transformation of the company, to resume growth in both top and bottom line.

Speaker #2: We have not waited to enter into execution mode. Actually, the consequences of the Middle East crisis made it all the more urgent for us to act.

Speaker #2: So let me expand on the Focus to Value program, which encompasses all productivity initiative of the company. Reflecting on what we experienced in the past few years and building on the work with advisors, we have set clear and ambitious targets with a scope that goes deeper and broader including cross-functional initiative to further reduce complexity and waste, and with a focus on performance-driven culture.

Speaker #2: And as you can see here, we have already taken many steps. Finally, I have made several changes in our leadership team. In addition to the new CFO we announced today, we have backfilled the Head of Europe and have a new Head of North America.

Speaker #2: But let me now explain a little bit more about what is behind our fundamental transformation. It is articulated around four major shifts. The first shift is to increase structural productivity by launching an ambitious, expanded program which we label 'Focus to Value.'

Speaker #2: We aim to deliver 240 million euro of savings over 26-28 versus our 25 baseline, which represents 40 million more than the 200 million we had committed for.

Speaker #2: Actions have already started to further adjust the cost base, amplify product and logistics savings through simplification, lean manufacturing, and network optimization. A streamlined organization across white-collar functions.

Speaker #2: It will be a central pillar of the transformation, and I'll come back on the next slide with more details. Second, we are resetting our approach in North America to transition from volume-led expansion to a disciplined value creation model focused on profitability, asset efficiency, and returns.

Speaker #2: There, at the end of the program, we aim to have reduced white-collar positions outside manufacturing by more than 20%. To achieve the incremental 40 million euro identified, it will require additional restructuring costs.

Speaker #2: Third and fourth relate to Europe, where we will both accelerate adult care to cornerstone of our future profitable growth, while adopting a more targeted approach to protect our important baby and feminine care positions.

Speaker #2: Of about 30 to 35 million euros, leading to a total of about 60 to 65 million restructuring for the total program to be faced over the next 24 months, of which about 20 million impacting the second half of 2026.

Speaker #2: To ensure we don't lose any time, and are able to adjust as the business evolves, we have put in place a transformation management office which is operational today.

Reflecting on what we experienced in the past few years and building on the work with advisors, we have set clear and ambitious targets.

With a scope that goes deeper and broader.

Speaker #2: Let me now take you through our changes in North America. There, we have a clear case for change. Market dynamics have evolved in the past few years.

including cross-functional initiatives to further reduce complexity and waste, with a focus on a performance-driven culture,

Speaker #2: In the baby market, we have a complex setup that is suboptimal to drive cost leadership. Combined to a business that has not delivered the returns expected on the high investment we realized.

We aim to deliver €240 million of savings over 2026 to 2028 versus our 2025 baseline.

which represents €40 million more than the €200 million we had committed for.

Speaker #2: This is leading us to fundamentally reset the approach to prioritize profitability, we have a new leadership in place, we have already adjusted our plans, and have started to simplify our operational setup which includes a thorough review of our assets and capacity.

Actions have already started to further adjust the cost base, amplify product and logistics savings with simplification, lean manufacturing, and network optimization.

A streamlined organization across white-collar functions.

Speaker #2: This resulted to a significant non-cash impairment to adjust both the historical goodwill and the asset base. What we are pursuing progressively shift our portfolio where we can generate profit, and we believe there are many opportunities to do so.

At the end of the program, we aim to reduce white-collar positions outside manufacturing by more than 20%.

To achieve the incremental €40 million identified.

Speaker #2: Deliver a simpler operating model all aiming to return to sustained cash flow generation. Let me now touch briefly on Europe. Adult care is a structurally attractive growing category.

It will require additional restructuring costs of about €30 to €35 million, leading to a total of about €60 to €65 million in restructuring for the total program to be faced over the next 24 months, of which about €20 million.

Impacting the second half of '26.

To ensure we don't lose any time.

Speaker #2: Where we already hold a strong position. It will become the cornerstone of our future growth. We will increase focus and investment in capacity, innovation, and go-to-market.

which,

Let me now, take you.

To our changes in North America.

Speaker #2: That will reinforce our leadership and allow us to grow volume and volume share across retail and healthcare channels. This is obviously a topic that we will share more elements of in the future interactions.

There, we have a clear case for change.

Market dynamics have evolved in the past few years in the baby market.

We have a complex setup that is suboptimal to drive cost leadership.

Speaker #2: But at the same time, we intend to protect our very important position in baby and feminine care. But we concluded here too that we had to approach it in a different way.

...combined to a business that does not deliver the returns expected on the high investments. We realize...

This is leading us to fundamentally reset our approach to prioritize profitability.

We have new leadership in place.

We've already adjusted our plans.

Speaker #2: As market declines, especially in baby, as we still have legacy assets that drive complexity despite our many recent efforts, we are reviewing our approach to ensure we allocate our resources where we can best unlock value to our customers and to us.

And has started to simplify our operational setup, which includes a thorough review of our assets and capacity.

This resulted in a significant non-cash impairment to adjust both the historical goodwill and the asset base.

What we're pursuing?

Speaker #2: At very specific times, it might mean to rely more on outsourcing partners. At other times, it might mean that we define our innovation strategy much more in tune with our asset capability to optimize investment.

We will progressively shift our portfolio where we can generate profit, and we believe there are many opportunities to do so.

Deliver a simpler operating model, all aiming to return to sustained cash flow generation.

Let me now touch briefly on Europe.

Speaker #2: In all cases, this is to best position us to continue to serve our priority customers the best way possible. To execute this shift, we have identified selective opportunities to simplify our asset base, retire some old lines, to again drive efficiency.

"I don't care" is a structurally attractive, growing category, where we already hold a strong position.

It will become the cornerstone of our future growth.

We will increase focus and investment in capacity, innovation, and go-to-market.

Speaker #2: This explains why we have recorded some non-cash impairment here as well. All that to pursue clear goals. Protect our volume share by focusing where we can make the difference for our customers, unlock innovation speed and productivity, to improve return on capital.

That will reinforce our leadership and allow us to grow volume.

And volume share across retail and healthcare channels.

This is obviously a topic that we will share more elements of.

in the future interactions.

Speaker #2: To enable the transformation we have mentioned additional restructuring costs and alluded to non-cash impairment which will total 144 million that here will detail more in this part.

But at the same time, we intend to protect our very important position in baby and feminine care.

But we concluded here, too, that we had to approach it in a different way.

As the market declines, especially in baby.

Speaker #2: This is consistent with our ambition to simplify our operations, to focus on segment best place to improve returns, thereby shaping a more resilient cash-generating and value-driven context.

As we still have legacy assets, that drives complexity, despite our many recent efforts.

We are reviewing our approach to ensure we allocate our resources appropriately.

where we can best unlock value for our customers and for us,

Speaker #2: Let me now transition to our second key topic and share highlights of H1 and our revised outlook. Our H1 performance was mostly characterized by year-on-year lower demand leading to lower volume.

At very specific times, it might mean to rely more on outsourcing partners; at other times, it might mean that we define our innovation strategy much more in tune with our asset capability to optimize investment.

In all cases.

Speaker #2: It drove revenue down 2.2% like-for-like, and adjusted EBITDA margin by 0.7% points. The result of the lower volume while cost inflation was offset by productivity.

This is to best position us to continue serving our priority customers.

The best way possible.

To execute the shift, we have identified selective opportunities to simplify our asset base and retire some old lines to again drive efficiency.

Speaker #2: Nevertheless, we generated positive free cash flow and combined with some M&A inflows this brought our net debt down to reduce leverage over the half 1 to 3.2 times.

This explains why we have recorded some non-cash impairment here as well.

All that to pursue clear goals.

Protect our volume share by focusing on where we can make a difference for our customers.

Speaker #2: Let's look at quarterly evolution on the next slide. What is encouraging to see is that we have managed to stabilize the year, and this despite the more challenging environment.

Unlock innovation, speed, and productivity to improve return on capital.

To enable the transformation.

We have mentioned additional restructuring costs and alluded to the two.

Speaker #2: While year-on-year our Q1 performance was well below last year, in Q2 revenue was in line and adjusted EBITDA is stable. In fact, adjusted EBITDA is stable over the last three quarters, a good outcome of our singular focus on stabilizing the business.

Non-cash impairment, which will total €144 million that he had, will detail more in his part.

This is consistent with our ambition to simplify operations.

Speaker #2: Albeit we all agree at a level we would like to see higher. We will keep this minorical focus on stabilizing our business, yet we know that in the middle is crisis impact will be more severe in Q3.

To focus on segments, best place to improve returns, thereby shaping a more resilient, cash-generating, and value-driven Ontex.

Let me now transition to our second key topic and share highlights of H1, as well as our revised outlook.

Speaker #2: So that leads me now to look at H2. Where indeed we expect to continue to operate in an equally challenging and volatile environment. The demand side has softened a bit further compared to what we expected and we believe it's going to remain mostly unchanged.

RH1 performance was mostly characterized by year-on-year lower demand, leading to lower volume. It drove revenue down 2.2% like-for-like and adjusted the margin by 0.7 percentage points.

The result of the lower volume.

While cost inflation was offset by productivity.

Speaker #2: We still the opportunity that we have and the headwind that we have. On the cost side, however, the geopolitical situation remains uncertain and is pressuring our margin.

Nevertheless, we generated positive free cash flow and, combined with some M&A inflows, this brought our net debt down to reduce leverage over the half.

Speaker #2: It is fair to say that the speed and the intensity of the cost increase in Q2 was more than what we had expected. But we are taking actions and as we explained earlier, we expect to fully recover the cost impact over time, yet with timing delay.

1 to 3.2 times.

Let's look at the quarterly evolution on the next slide.

What is encouraging to see?

We have managed to stabilize the quarterly performance since the fourth quarter last year, and this despite the more challenging environment.

Speaker #2: The situation remains fluid as all you know, with changes every day, every weeks. Based on the evolution so far and the latest assumption, we are revising and broadening the outlook as presented on the next slide.

While year-on-year, our Q1 performance was well below last year, in Q2, revenue was in line and adjusted a bit, despite all.

Stable over the last three quarters.

A good outcome of our singular focus on stabilizing the business.

Speaker #2: Adjusted EBITDA to end up in a range of 165 to 180 million euros, which is midpoint which midpoints is broadly aligned with prior year results and latest consensus.

Albeit, we all agree at the level; we would like to see higher.

We will keep this minority focus on stabilizing our business.

Yet, we know that the impact of the Middle East crisis will be more severe in Q3.

Speaker #2: Driving this, we expect revenue to be broadly stable and some margin recovery as we enter Q4 as the pricing actions and efficiency initiatives start to more than offset the cost inflation.

So that leads me now to look at H2.

Where indeed, we expect to continue to operate.

In an increasingly challenging and volatile environment.

The demand side has softened a bit further.

Speaker #2: We expect negative free cash flow between 10 and 25 million euros, the decrease versus the previous positive outlook is the result of the lower expected adjusted EBITDA and the higher restructuring costs partly offset by better working capital management results.

Compared to what we expected.

And we believe it's going to remain mostly unchanged. We still see the opportunity that we have, and the headwind that we have.

On the cost side. However,

The geopolitical situation remains uncertain and is putting pressure on our margin.

It is fair to say that the speed.

Speaker #2: The combination of both is to keep leverage below 3.5 times at the end of the year to a point that here it will come in further.

And the intensity of the cost increase in Q2 was more than what we had expected.

But we are taking actions.

Speaker #2: So a perfect transition to our H1 financial review here it's up to you.

Speaker #1: Thanks a lot, Laurent. Let me go through the year-on-year performance of the first half-year results. As Laurent pointed out, revenue declined 2% like-for-like driven by volumes, although Q2 showed a mild growth.

And as we explained earlier, we expect to fully recover the cost impact over time.

Which time in delay.

The situation remains fluid, as you know, with changes every day and every week.

Speaker #1: On top of X being mainly the US dollar depreciation added another 1% decrease. Baby and feminine care volumes came out 4% lower, both can be explained by the decreasing contract manufacturing volumes as well some contract exits in overseas regions which were anticipated.

Based on the evolution so far and the latest assumptions, we are revising and broadening our outlook as presented on the next slide.

Adjust the BDA to end up in a range of €165 million to €180 million, which midpoint is broadly aligned with prior year results and latest consensus.

Driving this, we expect revenue to be broadly stable.

Speaker #1: When we only look at retailer brands, we actually did better than the market. Our baby care volumes were largely stable in Europe and even slightly increased in North America while both markets for retailer brands actually showed a mid-single-digit decline.

And some margin recovery as we enter Q4, as the pricing actions and efficiency initiatives start to more than offset the cost inflation.

We expect negative free cash flow between

Speaker #1: Ontex mainly benefited from a strong position in baby pants which continues to grow double digits. Adult care also continued to show growth, albeit more modest by 1%.

10 and 25 million euros.

The decrease versus the previous positive outlook is the result of the lower expected adjustability in that.

Speaker #1: This is due to a robust performance in the healthcare channel whereas in retail volumes were down linked to Ontex customer exposure and temporary capacity constraints.

And the higher restructuring costs are partly offset by better working capital management results.

The combination of both is to keep leverage below 3.5 times at the end of the year.

Speaker #1: Although we have committed price increases in Q2 to mitigate the cost inflation, these will only impact the second half of the year. The negative price impact you notice in the revenue bridge of H1 is still a carryover from last year as a response to raw material price increases in that year.

The point is that here, it will come further. So, perfect. Let's transition to our H1 financial review here—it's up to you. Thanks a lot.

Let me go through the year-on-year performance of the first half-year results.

Speaker #1: Moving to adjusted EBITDA on the next page. The lower volume and revenue pushed our adjusted EBITDA 12 million euro lower. We managed however to reduce cost by 2 million euro net thanks to savings offsetting the rising input price environment.

Pointed out Revenue declined, 2% like for like driven by volumes. Although Q2 showed a mild growth on top. Ethics being mainly the US dollar depreciation, added another 1% decrease

Speaker #1: Raw material prices started to go up due to the Middle East crisis, especially from June onwards. As the contractually delayed impact of indices kicked in.

Baby and feminine care volumes came out 4% lower. Both can be explained by the decrease in contract manufacturing volumes as well as some contract exits in overseas regions, which were anticipated.

Speaker #1: This was primarily the case of oil derivatives such as bag sheets and certain packaging materials. Other input costs rose as well, but earlier, from March onwards, in particular transport costs driven by the higher diesel price.

When we only look at retailer brands, we actually did better than the markets. Our baby care volumes were largely stable in Europe, and even slightly increased in North America, while both markets for retail and brands actually showed a mid-single-digit decline.

Speaker #1: Supply chain inefficiencies which started in the second quarter of the year are improving but still impacted the comparison especially in the first quarter. Our cost transformation program has been continued but at the same time deepened and broadened under the new name focus to value.

Ontex mainly benefited from a strong position in baby pants, which continues to grow at double digits.

Speaker #1: It contributed significant savings in cost of goods sold and SG&A. Last but not least, the translation impact was slightly positive. Altogether adjusted EBITDA came down by 9% to 78 million euro and margin by 0.7 percentage points to 9.1%.

Adult care also continued to show growth, albeit more modestly by 1%. This is due to a robust performance in the healthcare channel, whereas in retail, volumes were down, linked to Ontex C customer exposure and temporary capacity constraints.

We have committed price increases in Q2 to mitigate the cost of inflation. This will only impact the second half of the year.

The negative price impact you notice in the revenue bridge of H1 is still a carryover from last year, as a response to raw material price increases in that year.

Speaker #1: Let's dive a bit deeper in the full P&L on the next slide. The adjusted profit for the half year was plus 9 million euro, slightly better than last year despite the lower adjusted EBITDA.

Moving to adjusted MDA on the next page.

The lower volume and revenue pushed our adjusted EBITDA €12 million year-over-year lower.

Speaker #1: Main reason are the net financial costs which amounted this year to 19 million euro but were inflated last year by unrealized negative forex impacts.

We managed, however, to reduce costs by €2 million net, thanks to savings offsetting the rising input price environment.

Speaker #1: That's where we're temporarily and mostly recovered in the second half of '25. Adjusted tax was somewhat higher than last year due to the higher net profit before tax.

Raw material prices started to go up due to the Middle East crisis, especially from June onwards. As a construct, the late impact of indices kicked in. This was primarily the case for oil derivatives, such as back sheets, and certain packaging materials.

Speaker #1: The adjusted figures exclude two buckets of one-off costs. Being on one hand the restructuring costs and these amount to 9 million euro net and consists of partial provisions of 21 million euro for the focus to value program of which a small part was already expensed in H1.

Other input costs rose as well, but earlier from March onwards in particular, transport costs driven by the higher diesel price.

Quarters of the year are improving.

But it still impacted the comparison, especially in the first quarter.

Speaker #1: That was partly offset by a positive 12 million euro accrual for tax that we expect to reclaim in the future in Brazil. And on the other hand we have the non-cash impairments for 144 million euro triggered by the strategic review as been explained by Laurent.

Our cost transformation program has been continued, but at the same time deepened and broadened under the new name, Focused to Value. It contributed significant savings in cost of goods sold and SG&A.

Speaker #1: 51 million euro is the impairment of the goodwill on the North America business where we have reviewed our ambitions. And the other 93 million euro is on assets.

Last but not least, the translation impact was slightly positive altogether. Adjusted EBITDA came down by 9% to €78 million, and margin by 0.7 percentage points to 9.1%.

Speaker #1: Mostly equipment in baby and feminine care categories where we adjust capacity and focus on our core assets. This brings us to a total loss for the period of 143 million euro which compares also to a negative amount last year of 115 million euro but last year we also had non-cash impact but for different reasons.

Let's dive a bit deeper into the full P&L on the next slide.

Registered profits for the half year were plus €9 million, slightly better than last year, despite the lower adjusted EBITDA.

Speaker #1: Namely due to the divestment of the Brazilian business the cumulative translation reserves were recycled from the balance sheet into the P&L in '25. As you notice the P&L is impacted by several non-cash effects.

The main reason is the net financial costs, which amounted this year to €90 million, but were inflated last year by unrealized negative forex impacts. That’s where we’ve temporarily, and mostly, recovered in the second half of '25.

I just said tax was somewhat higher than last year, due to the higher net profit before tax.

Speaker #1: Let us now look into the cash flow of the first year half which shows a much brighter picture. We managed to realize in the first half of the year a positive free cash flow before interest of '27 million euro and including interest of 7 million euro.

So just at the figures, exclude two buckets of one-off costs.

On the one hand, the restructuring costs and this amount to €9 million net and consist of partial provisions of €21 million for the Focus to Value program, of which a small part was already expensed in H1.

Speaker #1: Our continuous focus on improving working capital delivered results. Indeed, net working capital over revenue dropped by 0.6 percentage points to 4.5%. The improvement is a combination of optimizing payment terms and inventory levels.

That was partly offset by a positive €12 million, a growth for tax that we expect to reclaim in the future in Brazil.

And on the other hand, we have the non-cash impairments for €144 million, triggered by the strategic review, as has been explained by Lon.

Speaker #1: Where the positive impact from employee benefits, this is due to the difference between the accrual for variable remuneration related to '26 and the actual lower payout on the performance of '25 which occurred in the first half of '26.

€51 million is the impairment of the goodwill on the North America business, where we have reviewed our ambitions.

Speaker #1: As to capex, that amount was 29 million euro which is 3.4% of revenue and is relatively low but is linked to the phasing over the year.

And the other €93 million is on assets, mostly equipment in the baby and feminine care categories, where we adjust capacity and focus on our core assets.

Speaker #1: Because in the meantime we have commitments so that capex levels will catch up in the second half of the year. We paid out 11 million euro in restructuring costs in the first half of the year which are mostly related to the finalization of the Belgium footprint optimization.

This brings us to a total loss for the period of €143 million, which compares also to a negative amount last year of €115 million. But last year, we also had a non-cash impact, but for different reasons; namely, due to the divestiture of the Brazilian business. The cumulative translation reserves were recyclable from the balance sheet into the P&L in 2025.

Speaker #1: Also some initial actions have been executed on the focus to value program. And then the tax and financing cash outs were slightly lower than last year.

As you notice, the P&L is impacted by several non-cash effects. Let us now look into the cash flow of the first half of the year, which shows a much brighter picture.

Speaker #1: That brings us to an overview of the net debt on the next slides. Our net debt further reduced by 6% or 37 million euro of which we cash flow contributed plus 7 million euro as explained on the previous slide.

We managed to realize, in the first half of the year, a positive free cash flow before interest of €27 million, and including interest, of €7 million.

Speaker #1: We also had 29 million euro positive impact from M&A activities mainly thanks to the repatriation of the cash in Algeria. This cash comes from the divestment of the Algerian business in '24 which took time to repatriate until Q1 '25 and was classified as a financial asset at the end of '25.

Our continuous focus on improving working capital delivered results. Indeed, net working capital over revenue dropped by 0.6 percentage points to 4.5%. The improvement is a combination of optimizing payment terms and inventory levels.

Speaker #1: Within the M&A block we also have some limited post-closing adjustments related to the Brazil and Turkey divestments last year. Net debt thereby amounted to 540 million euro at the end of June and gross debt to 619 million.

Where did the positive impact from employee benefits come from? This is due to the difference between a growth for variable remuneration related to 2026, and the actual lower payout on the performance of 2025, which occurred in the first half of 2026.

Speaker #1: Debt included 68 million euro drawn on the RCF which represents 25% of the total capacity. And we finished the first half year with the cash position of 79 million euro.

As to CapEx, that amount was €29 million, which is 3.4% of revenue and is relatively low. But this is linked to the phasing over the year, because in the meantime we have commitments. So CapEx levels will catch up in the second half of the year.

Speaker #1: And then the last slide on finance. Our prime focus as a management remains of course reducing net debt and keeping sufficient leverage headroom despite pressure on the LTM EBITDA.

We paid out €11 million in restructuring costs in the first half of the year, which are mostly related to the finalization of the Belgium footprint optimization.

Also, some initial actions have been executed on the Focus to Value program.

Speaker #1: Thanks to decreasing net debt as explained before we managed to reverse the uplift of the leverage ratio at the end of '25 by reducing it back from 3.3 last year to 3.2 at the end of the first half of the year.

And then the tax and financing cash outs were slightly lower than last year. That brings us to an overview of the net debt on the next slides.

Speaker #1: This keeps us well below the 3.5 times threshold of the RCF covenant. We expect to remain below that level going forward. Our liquidity position remains strong with about 280 million euro based on our cash position and 75% of the RCF undrawn.

Our net debt further reduced by 6%, or €37 million, of which free cash flow contributed plus €7 million, as explained on the previous slides.

Speaker #1: So we can conclude that we have the financial flexibility needed to execute our plans. With that covered I hand over to Laurent.

We also had a €29 million positive impact from M&A activities, mainly thanks to the repatriation of cash in Algeria. This cash comes from the divestment of the Algerian business in '24, which took time to repatriate until Q1 '25 and was classified as a financial asset at the end of '25.

Speaker #2: Thank you here. And before we move to Q&A let me close with our priorities for H2. It is very clear that we need to focus on delivering the outlook that we just shared.

Within the MBNA block, we also have some limited business closing adjustments related to the Brazilian Turkey divestments last year.

Speaker #2: And to put in motion the strategic transformation we announced. But first we will continue the pricing actions to practical cost inflation. We will also continue with our saving initiative help by the start of our focus to value program.

€68 million drawn on the RCF, which represents 25% of the total capacity. And we finished the first half year with a cash position of €79 million.

And then, the last slide on finance.

Speaker #2: The third focus is to ensure that the capacity that we have put in place in the last two years especially in adult care is ramping up to its full potential.

Speaker #2: Fourth, we will continue to work to preserve our balance sheet strengths and financial flexibility which again we see sufficient to execute our transformation agenda.

Speaker #2: And finally we will continue to evolve the organization to future requirements be it as a result of the streamlining actions that we're taking or to ensure our operating model is best suited to deliver on our ambition.

Our prime focus as a management remains, of course, reducing net debt and keeping sufficient leverage headroom. Despite pressure on the LTM MDA, thanks to decreasing the debt as explained before, we managed to reverse the uplift of the leverage ratio at the end of '25, by reducing it back from 3.3 last year to 3.2 at the end of the first half of the year. This keeps us well below the 3.5 times threshold of the RCF covenant. We expect to remain below that level going forward.

Speaker #2: With that Hirt and I are ready to take your questions.

Speaker #1: Thank you Laurent and Hirt for the Q&A session. If you wish to ask your question please dial the pound key followed by five and that will allow you to enter the queue.

Our liquidity position remains strong, with about €280 million based on our cash position, and 75.5% of the RCF on draw. So we can conclude that we have the financial flexibility needed to execute our plans.

With that covered, I hand over to Lauren.

Speaker #1: And if you wish to withdraw your question please dial the pound key followed by six. And please of course limit your questions to two.

Thank you. And before we move to Q&A, let me close with our priorities for H2.

It is very clear that we need to focus on delivering.

the outlook that we just shared,

Speaker #1: The first question comes from Karina Elias from Barclays. Karina the floor is yours.

And to put in motion the strategic transformation.

We announced.

Speaker #3: Thank you Devin. Thank you Laurent and Hirt for the presentation. I just had two questions if I may. Looking at the Q2 performance I saw that the net cost obviously benefit was 7 million and I was just trying to understand what the impact of these would have been.

But first, we will continue the pricing actions to practically cover cost inflation.

We will also continue with our saving initiative, helped by the start of our Focus to Value program.

Speaker #3: I think you mentioned it would have impacted June. So I'm just trying to understand what the building blocks were for that. And I suppose you know related to that should we think that this obviously will annualize in Q3 and Q4 because obviously your Q3 EBITDA last year was a bit higher than at 51 million.

The third focus is to ensure that the capacity we have put in place in the last two years.

Especially in adult care, it is ramping up to its full potential.

Of course, we will continue to work.

To preserve our balance sheet strengths and financial flexibility, which, again, we see as sufficient to execute our transformation agenda.

Speaker #3: If I remember correctly. And then my second question was if you can just remind us of what the minimum liquidity that you need to earn the business.

and finally,

We will continue to evolve the organization to meet future requirements.

Speaker #3: Thank you.

Speaker #2: Yeah. Hi on the second one is a very easy one because we have no covenant anymore on the on the liquidity. So it was one we had in the past but not anymore since end of since the renewal of the RCF a year ago.

Be it as a result of the streamlining actions that we're taking, or to ensure our operating model is best suited to deliver on our ambition.

With that.

Geert and I are ready to take your questions.

Speaker #2: On the Q2 performance the net incomes the net cost impact we started having impact from the Middle East but as I said it started in in June based on the indices you know there is a delay on indices in Q1 we still had some some limited positive impacts and if you take all together our net cost yeah it's a it's a sum of some negative Middle East impacts also some diesel of course that kicked in from from March onwards and on the other hand some inefficiencies we had in Q1 and at the same time we of course we continue having our cost transformation program which we broadened now into the focus to value and all that together gave you the net cost impact that you find in our bridge.

Thank you for the Q&A session. If you wish to ask a question, please dial the pound key, followed by 5, and that will allow you to enter the queue. If you wish to withdraw your question, please dial the pound key, followed by 6. And please, of course, limit your questions to two.

The first question comes from.

Karina Elias.

From Barclays, Karina, the floor is yours.

Speaker #2: But I think Karina to to to to give you an element on questions we estimate that we had at least 10 million of additional inflation in Q2 due to the the Middle East crisis.

Thank you, and thank you for the presentation. I just had 2 questions. If I may looking at the Q2 performance, I saw that the net cost obviously benefit was 7 million, and I was just trying to understand what the impact of these would have been. I think you mentioned, it would have impacted June. So I'm just trying to understand what the building blocks were, um, for that. And I suppose, you know, related to that, should we think that this obviously will analyze in Q3 and Q4? Because obviously, your K3 Eva? Last year was a bit higher than, uh, at at 51 million. Uh, if I remember correctly. And then my second question was, if you can uh, just remind us of what the minimum liquidity uh that you need to earn the business. Thank you.

Speaker #3: That's very helpful and should we expect a similar impact in Q3 or because of the fact that the timing was end of June we should expect inflation to be a bit higher than the 10 million?

Speaker #2: As I mentioned we expect the the biggest. To be in Q3. And then to slide to decrease as we go into Q4.

Yeah. Okay. Again I I will take these questions on uh the second 1 is a very easy 1 because we have no Covenant anymore on the on the liquidity. So it was wrong we had in the past but not anymore since uh um and so far since the renewal of the RCF a year ago.

Speaker #3: Okay that's great. And just to for the for the liquidity points I'm aware of obviously of the covenant point but just in general what sort of like cash balance you know you'd like to keep to run the business typically.

Speaker #3: I mean it's been stable at 70 79 and obviously you've got the availability on the RCF. In my right I'm thinking that you need about 150 typically for the business.

Speaker #2: No no no it's it's lower. So we can run at at about 50 million euro and important is as you said to stress the fact that we are we still have a huge headroom on the RCF so we can easily increase our our cash position if if we like.

Uh, on the Q2 performance, uh, the net income, the net cost impact that we started having impact from the Middle East. But as I said it started, uh, in uh, in June based on the indices here. You know, there is a delay on indices um, in q1. We still had some some uh limited positive impacts and if you take all together our net costs. Yeah, it's a, it's a sum of, um, um, some negative Middle East impacts, also some diesel of course that kicked in from uh from March onwards. Um, and on the other hand, some inefficiencies we had in q1.

Speaker #2: So we keep we typically keep it between the 50 and the 100 million euro. But 50 is sufficient.

Speaker #3: That's helpful. That's great. Thank you so much.

And at the same time, we, of course, continue having our cost transformation program, which we have now broadened into the Focus to Value, and all that together gave you the net cost impact that you find in our bridge.

Speaker #1: Thank you Karina. The next question comes from Sanjay Bagwani from Citigroup. Sanjay should be. Talk to you.

Due to the, uh, Middle East crisis.

Speaker #4: Hi. Thank you very much for taking my question and also presenting the strategic review outcome. My my first one is on the cost saving program.

Speaker #4: Are you able to help us understand how much of the 240 million saving target actually is likely to flow into the P&L? That is the net impact and what could be the face in of that will be I mean I I can imagine some of this is already showing showing up in H1 26.

That's very helpful. And should we expect a similar impact in Q3? Or, because of the fact that the timing was end of June, should we expect inflation to be a bit higher than the €10 million?

As I mentioned, we expect the, uh, the biggest impact to be in Q3, uh, and then to decrease as we go into Q4.

Speaker #4: So how should we think of this for 26 and 27? Of of the total 240 million. That's my first question and I'll just follow up the next one after this.

Okay, that's great. And just to I for the, for the liquidity points, I'm aware of of the Covenant point, but just in general, what sort of like, cash balance, you know, you'd like to keep to run the business. Typically I mean it's been stable at 7779 and obviously you've got the availability on that the RCF immersed and thinking that you need about 150 typically to operate the business.

Speaker #2: Great. Maybe I'll take that question Sanjay. Thank you for the question. You know we the 240 is our total saving program and it's used to cover inflation to cover also some targeted investment that we do in some categories and geographies.

Speaker #2: And then obviously to the rest will go to margin expansion and you know this is a relatively complex equation which we don't disclose precisely.

No, no, no. It's it's lower. So we can run at at about 50 million euro and an important is as you said to stress, the fact that we uh, are uh, we still have a huge chat room on the RCF, so we can easily increase our our cash position. If if we like so we keep we typically keep it between the 50 and the 1 0 0.

But 50.

That's great. Thank you so much.

Speaker #2: We'll do later when we share our midterm financial ambition. But what we mentioned here is that the 40 million incremental that is in this 240 we aim to flow flow it through from a two EBITDA extension.

Thank you, Karina. The next question comes from Sanjay Bagwani from Citigroup.

Sanjay.

To begin, hi. Thank you very much to you.

Speaker #4: Thank you. That is that is very helpful. And I think I think the second one is a bit more housekeeping question on this one off tax benefit.

Speaker #4: If so what could be the cash timing of this around the 12 million I think you mentioned this reclaim when should we see the cash coming in for this?

Speaker #4: And if this cash has already been baked into the full year guidance or not for the cash flow.

Speaker #2: Yeah. No thanks also for that question. Sanjay very good you ask this because it will take some time it's because yeah there in in Brazil things are taking time in order to recover tax from government.

All right. Thank you very much for taking my question and also presenting the Strategic review outcome. Uh, my, my first 1 is on the cost Savings Program. Are you able to, uh, help us understand how much of the 240 million? Uh, Saving Time Target. Uh, actually, uh, is likely to flow into the pnl. That is the net impact. Uh, and what could be the face in of that will be? I mean, I, I can imagine some of this is already showing showing up in H1 26. Uh, so how should we think of, uh, this for 26 and 27 uh, of of the total 240 million? Uh, that's my first question and I'll just follow up the next 1 after this.

Maybe I'll take that question, Sanjay. Thank you for the question.

Um,

Speaker #2: So it can take another two three years so it's not part of our guidance. We don't expect it this year. The reason we booked it is that we had a positive outcome of a card case so we have a very strong position.

You know, the €240 million is our total savings program, and it's used to cover, uh, inflation, to cover also, uh, some targeted investments that we do in some categories, in geographies, and then obviously, the rest will go to margin expansion.

Speaker #4: Thank you. Very clear.

Speaker #1: Okay. Thank you Sanjay. Next question comes from Maxime Stranner from ING Bank. Maxime. It's up to you.

Uh, and you know, this is a relatively complex equation, which we don't disclose precisely. We'll do so later when we share our midterm financial ambition.

Speaker #5: Hi. Good morning. Two questions on my side if I may. First one would be on restructuring costs. You have announced now that you will spend 60 to 65 million over the next 12 12 over the next 24 months.

But what we mentioned here is that the €40 million incremental, uh, that is in this €240 million, uh, we aim to flow through from a €280 million extension.

Speaker #5: Could you maybe a bit elaborate on what's the payback period you see on that investment and how basically you see the phasing of those savings in the short short to medium term?

Speaker #5: That would be the first one. And then secondly if I look at new guidance of the company and obviously given the difficult history of on tax with regards to guidance can you maybe elaborate on the building blocks and how and what's basically assumptions are behind the low and the upper end of the guidance.

Thank you. That is, uh, that is very helpful and I think, I think the second was a bit more housekeeping. Question on this uh, 1-off tax, uh benefit, uh, uh, uh if uh, so what could be the cache timing of this around the 12 million? I think you mentioned, uh, basically claim, uh, when when I should we see the cash coming in for this, and if this cache has already been, uh, baked into the full year guidance or not for the cash flow,

Speaker #5: That would be all for me. Thank you.

Speaker #2: Yeah. Okay. Thanks

Speaker #1: Maxime. I will take the first one. On restructuring I will explain it a little bit more elaborate because I can imagine there from the other analysts also questions about that.

Speaker #1: So before we mentioned that we we would have restructuring costs of 10 plus 30 million euro. That was what we explained a couple of months ago.

Speaker #1: position.

Uh, no, thanks also for that question. Uh, Sanjay, very good to ask this because it will take some time. Uh, it's, uh, because, yeah, there in Brazil, things are taking time in order to recover taxes from governments. So it can take another two to three years. So it's not part of our guidance. Uh, we don't expect this year. The reason we booked it is that we have the positive outcome of a court case. Uh, so we have a very strong position.

Speaker #3: Thank you. Very clear.

Thank you very clear.

Speaker #1: Okay, thank you, Sanjay. Next question comes from Maxime Straner from ING Bank. Maxime. It's up to you.

Speaker #1: The 10 was related to the footprint of of Belgium. That's mainly the cash out that we had in the first year of the first half of the year.

Speaker #4: Hi. Good morning. Two questions on my side, if I may. First one would be on restructuring costs. You have announced now that you will spend 60 to 65 million over the next 12 12, over the next 24 months.

Speaker #1: So that 10 is gone. And the other 30 that we increased now from 60 to 60 to 65. So that means it's another 30 to 35 million.

Speaker #1: Out of that 60 to 65 we believe that's what Laurent said that 20 million will be in the second half of the year the remaining part of the amount we will try to of course accelerate and realize as much as possible our transformation program in the course of 27.

Speaker #4: Could you maybe a bit elaborate on what the payback period you see on that investment and how basically you see the phasing of those savings in the short to medium term?

Speaker #4: That would be the first one. And then secondly, if I look at the new guidance of the company and obviously given the difficult history of ONTEX with regards to guidance, can you maybe elaborate on the building blocks and how and what basically assumptions are behind the low and the upper end of the guidance?

Speaker #1: What means that most of those costs the cash out will be in 27. From a P&L point of view it might be that we take decisions now that it will be in the P&L of 26.

Speaker #1: Cash out will be mainly the the part on top of the 20 million of the second half of this year will be mainly in 27.

Speaker #4: That would be all for me. Thank you.

Speaker #1: Yeah. Okay. Thanks, Maxime. I will take the first one. On restructuring, I will explain it a little bit more elaborate because I can imagine there are from the other analysts also questions about that.

Speaker #1: Is that is that clear?

Speaker #5: Yes. But that was only part of my question. My focus was mainly on the payback period you see. So basically if you invest those 20 million today what what basically timeline do you expect to catch up those 20 million investments?

Speaker #1: So before we mentioned that we would have restructuring costs of 10 plus 30 million euro. That was what we explained a couple of months ago.

Speaker #1: The 10 was related to the footprint of Belgium. That's mainly the cash out that we had in the first year of the first half of the year.

Speaker #5: That's basically the the focus I had.

Speaker #2: Well you know maybe Maxime would like what we can share is that we we we communicated that there is you know we are committed to 40 million incremental productivity to flow through and for which we're going to spend 30 to 35 million.

Speaker #1: So that 10 is gone. And the other 30 that we increased now from 60 to 60 to 65. So that means it's another 30 to 35 million.

Speaker #2: So you see that's the kind of payback that you have there right. So it's a slightly below one. Now from the exact timing of perspective some actions are already in implementation mode.

Speaker #1: Out of that 60 to 65, we believe that's what Laurent said, that 20 million will be in the second half of the year. The remaining part of the amount, we will try to of course accelerate and realize as much as possible our transformation program in the course of 27.

Speaker #2: Some will take through 27. So you know but roughly this is the math that you can use. And maybe I'll take your your second question on the the guidance revision and and why broadening the range.

Speaker #1: What means that most of those costs, the cash out, will be in 27. From a P&L point of view, it might be that we take decisions now that it will be in the P&L of 26.

Speaker #2: Or creating a range. And the the key reason is really linked to the volatility under certainty on the on the outcome and the impact of the Middle East crisis with changes in in oil price and raw material indices by the week.

Speaker #1: Cash out will be mainly the part on top of the 20 million of the second half of this year will be mainly in 27.

Speaker #2: And so what we did was to look at the key two key factors that are impacted by that volatility on the one hand it's the cost that we have and so we created a series of scenarios and on the other hand it's the speed at which the pricing will be executed.

Speaker #1: Is that clear?

Speaker #4: Yes. But that was only part of my question. My focus was mainly on the payback period you see. So basically if you invest those 20 million today, what basically timeline do you expect to catch up those 20 million investments?

Speaker #4: That's basically the focus I have.

Speaker #2: Well, maybe Maxime, what we can share is that we communicated that there is we are committed to 40 million incremental productivity to flow through and for which we're going to spend 30 to 35 million.

Speaker #2: Because while we're progressing very well on executing our pricing sometimes we still work with our customers to find the best timing to reflect that pricing.

Speaker #2: So that we can find the right solution to protect the volume and their position in the market. So when you combine those two variables this is why we thought it would be more prudent given the visibility that we have on the cost evolution to create a range.

Speaker #2: So you see that's the kind of payback that you have there, right? So it's a slightly below one. Now, from an exact timing of perspective, some actions are already in implementation mode.

Speaker #2: Some will take through 27. So but roughly this is the math that you can use. And maybe I'll take your second question on the guidance revision and why broadening the range.

Speaker #5: That's very clear. Thank you for your answers.

Speaker #1: Okay. Thank you Maxime. The next question comes from Rebecca Clements from JP Morgan. Rebecca the line is open.

Speaker #2: Or creating a range. And the key reason is really linked to the volatility under certainty on the outcome and the impact of the Middle East crisis with changes in oil price and raw material indices by the week.

Speaker #6: Hi. Thanks for taking my questions. Stepping back a little bit with the strategic change could you just elaborate a little bit on what what exactly does protect mode mean mean for baby and femme care in the context of you know do you have relationships with the same customers across all of the categories you're in and and how how should we think about this.

Speaker #2: And so what we did was to look at the key two key factors that are impacted by that volatility on one hand, it's the cost that we have.

Speaker #6: Because protect could mean many things but does it mean you're actually probably going to end up being a smaller business. In those two divisions going forward.

Speaker #2: And so we created a series of scenarios. And on the other hand, it's the speed at which the pricing will be executed. Because while we're progressing very well on executing our pricing, sometimes we still work with our customers to find the best timing to reflect that pricing so that we can find the right solution to protect the volume and their position in the market.

Speaker #6: That's my first question.

Speaker #2: Mm-hmm. No I otherwise we would not have mean called protect right. So protect is really to to defend and to hold on to our our position.

Speaker #2: But in order to do that to be more choiceful on where we allocate resources so if you think about it is to really think about where we have the best changes and the best segments to be able to create value for our customers.

Speaker #2: So when you combine those two variables, this is why we thought it would be more prudent given the visibility that we have on the cost evolution to create a range.

Speaker #2: So for instance if you talk about baby we know that baby pants and large sizes of diapers are the two growing segments on which we want to help our customers to fully benefit from the opportunity.

Speaker #4: That's very clear. Thank you for your answers.

Speaker #2: It might mean on the other hand we might mean that on some of the subcategories of femme care we protect and we protect our position but we are going to find solutions with some co-manufacturing partners so that we can be much more choiceful on where we put our own capital across the different segment and assets.

Speaker #1: Okay. Thank you, Maxime. The next question comes from Rebecca Clements from JPMorgan. Rebecca. The line is open.

Speaker #3: Hi. Thanks for taking my questions. Stepping back a little bit, with the strategic change, could you just elaborate a little bit on what exactly does protect mode mean for baby and femme care in the context of do you have relationships with the same customers across all of the categories you're in and how should we think about this?

Speaker #2: But we aim to defend that business. Rebecca.

Speaker #6: Okay. And and that carries over as well to North America given the capacity expansion.

Speaker #3: Because protect could mean many things, but does it mean you're actually probably going to end up being a smaller business in those two divisions going forward?

Speaker #2: The North America you know for all sake of of of of understanding is mostly a baby market right. We have very very tiny position in femme care.

Speaker #3: That's my first question.

Speaker #2: There you know the as we express earlier the what we're doing is review the food portfolio of product and customers and really understand where we are best chances to win.

Speaker #2: No. Otherwise, we will not have been called protect, right? So protect is really to defend and to hold on to our position. But in order to do that, to be more choiceful on where we allocate resources.

Speaker #2: It's not that we are going to proactively exit market is that you have to make a choice on where you allocate your resources to win those contracts and to be the best partner for those customers and I think what we've concluded is we can't do it across the entire portfolio blindly and we're going to be more choiceful but there that doesn't mean that there are not opportunity for growth.

Speaker #2: So if you think about it, is to really think about where we have the best changes and the best segments to be able to create value for our customers.

Speaker #2: So for instance, if you talk about baby, we know that baby pants and large sizes of diapers are the two growing segments on which we want to help our customers to fully benefit from the opportunity.

Speaker #2: There are many opportunity for growth. It's going to be approach in a different way.

Speaker #2: It might mean on the other hand, we might mean that on some of the subcategories of femme care, we protect and we protect our position, but we are going to find solutions with some co-manufacturing partners so that we can be much more choiceful on where we put our own capital across the different segment and assets.

Speaker #6: Okay. That that that's extremely helpful. And then just in my second question in the context of that is there any change in expectation to the amount of CapEx.

Speaker #6: I don't know that you really gave formal guidance but I I think I had it running kind of 4% almost 4% of revenue. Is that an appropriate way to look at it or is there going to be retrenchment on CapEx as well.

Speaker #2: But we aim to defend that business. Rebecca.

Speaker #3: Okay. And that carries over as well to North America given the capacity expansion?

Speaker #2: Mm-hmm. I can take that one Rebecca. Indeed in the in the past we always said we would be around the the 4% actually we we most of the time we were talking about 3 and a half and 4 and a half percent.

Speaker #2: The North America for all sake of understanding is mostly a baby market, right? We had very, very tiny position in femme care. There, as we express earlier, the what we're doing is review the full portfolio of product and customers.

Speaker #2: Now we we believe it's important that we continue investing in the business. We we also see a lot of opportunities. The first one is of course in adults where there's significant growth that we still expect.

Speaker #2: And really understand where we are best chances to win. It's not that we are going to proactively exit market. Is that you have to make a choice on where you allocate your resources to win those contracts and to be the best partner for those customers.

Speaker #2: But it's also about automation. We see quite some automation opportunities with a nice payback and we're also in a large digitalization program as a group.

Speaker #2: So actually if we find the right business cases because we will assess everything of course individually with the good paybacks then we aim to be at a higher end of the range.

Speaker #2: And I think what we've concluded is we can't do it across the entire portfolio blindly. And we're going to be more choiceful. But that doesn't mean that there are not opportunity for growth.

Speaker #2: That means more to the 4 and a half percent on a case by case basis to be assessed. But maybe to complement that I think you know versus the recent past you could you could assume that there will be proportionately less CapEx in in North America because we had invested heavily to build that capacity.

Speaker #2: There are many opportunity for growth. It's going to be approaching a different way.

Speaker #3: Okay. That's extremely helpful. And then just in my second question in the context of that, is there any change in expectation to the amount of CapEx?

Speaker #3: I don't know that you really gave formal guidance, but I think I had it running kind of 4%, almost 4% of revenue. Is that an appropriate way to look at it, or is there going to be retrenchment on CapEx as well?

Speaker #2: Proportional. And then in Europe you would assume that you know most of the CapEx would go to either those productivity opportunity or digitalization opportunity or to adult.

Speaker #6: Understood. Thanks very much.

Speaker #5: I can take that one, Rebecca. Indeed, in the past, we always said we would be around the 4%. Actually, most of the time we were talking about 3.5 and 4.5%.

Speaker #1: Thank you Karina. So just as a reminder if you wish to ask a question please dial the pound key followed by five. And the next question comes from Wim Hoster from KBC.

Speaker #1: Wim up to you.

Speaker #5: Now we believe it's important that we continue investing in the business. We also see a lot of opportunities. The first one is, of course, in adults where there's significant growth that we still expect.

Speaker #7: Yes. Good morning. Thanks for the opportunity to ask questions. I have a couple ones. First on North America can you offer a bit more granularity on on the ambition levels you still have there with regards to revenue also the kind of margin potential that that markets would offer and then also regarding the operational setup with the yeah production Mexico US how how should we think about that operational setup if you can offer a bit more granularity that that would be nice.

Speaker #5: But it's also about automation. We see quite some automation opportunities with a nice payback. And we're also in a large digitalization program as a group.

Speaker #5: So actually, if we find the right business cases, because we will assess everything, of course, individually, with the good paybacks, then we aim to be at a higher end of the range.

Speaker #7: And then second question or second set of questions would be more on the overall level of competitiveness and and promotional pressure with the A labels in certainly in in Europe.

Speaker #5: That means more to the 4.5% on a case-by-case basis to be assessed.

Speaker #2: But maybe to complement that, I think versus the recent past, you could assume that there will be proportionately less CapEx in North America because we had invested heavily to build that capacity.

Speaker #7: Can you offer a bit of granularity there on start of the Q3 how that is is kind of evolving what kind of signals you're getting in in each of the individual countries or markets where there's an easing or or or just not.

Speaker #2: And then in Europe, you would assume that most of the CapEx would go to either those productivity opportunity or digitalization opportunity or to adult.

Speaker #7: And then also not against the the pressure from A labels but more inside the the retail brands yeah what is kind of a competitive fight going on over there is there relatively pricing discipline in that segment.

Speaker #3: Understood. Thanks very much.

Speaker #1: Thank you, Karina. So just as a reminder, if you wish to ask a question, please dial the pound key followed by five. And the next question comes from Wim Hoster from KBC.

Speaker #7: Is everybody trying to increase prices given the inflationary trends or are some people kind of yeah trying to to gain some market shares or tenders by by postponing that a little bit.

Speaker #1: Wim, up to you.

Speaker #6: Yes. Good morning. Thanks for the opportunity to ask questions. I have a couple of ones. First on North America, can you offer a bit more granularity on the ambition levels you still have there with regards to revenue?

Speaker #7: You can also offer a bit of granularity on that. That would be helpful. Thank you.

Speaker #6: Also the kind of margin potential that the markets would offer? And then also regarding the operational setup with the production Mexico US, how should we think about that operational setup?

Speaker #2: Thank you Wim. Pretty broad questions. So on I'll start with North America. No I don't think we are time where we will offer a granular plans.

Speaker #2: I think we aim later this year to be able to share more of our financial ambitions but I think what I can share is that we are going to probably don't expect the same level of absolute growth in North America that we were initially reflected into our our long-term ambition.

Speaker #6: If you can offer a bit more granularity, that would be nice. And second question, or second set of questions, would be more on the overall level of competitiveness and promotional pressure with the A labels in certainly in Europe.

Speaker #6: Can you offer a bit of granularity there on start of the Q3, how that is kind of evolving, what kind of signals you're getting in each of the individual countries or markets where there's an easing or just not?

Speaker #2: So that's one fair. But still growing. Maybe not at the same rate. And the margin I think what you should expect is because we said that the focus would be on profitability that we would expect a higher pace of margin rebuilt in North America which we have disclosed several times that was a a highly diluted business which was a consequence of us being in this ramp up aggressive ramp up mode.

Speaker #6: And then also not against the pressure from A labels, but more inside the retail brands? Yeah, what is kind of the competitive fight going on over there?

Speaker #6: Is there relatively pricing discipline in that segment? Is everybody trying to increase prices given the inflationary trends or some people kind of, yeah, trying to gain some market shares or tenders by postponing that a little bit?

Speaker #2: On the the the European dynamic first versus the A brands we haven't really seen a shift in the approach you know we're not in the boardroom of of of P&G and what they do for Pampers but you could you probably have read that SET on one hand was happy with the the push they're doing on their brand Liberal.

Speaker #6: You can also offer a bit of granularity on that. That would be helpful. Thank you.

Speaker #2: Thank you, Wim. Pretty broad questions. So I'll start with North America. No, I don't think we are a time where we will offer a granular plans.

Speaker #2: And that P&G also was relatively happy with the the share gain that they had on Pampers. So what we observed was that those A players retook a a a more aggressive stance to defend their position.

Speaker #2: I think we aim later this year to be able to share more of our financial ambitions. But I think what I can share is that we are going to probably don't expect the same level of absolute growth in North America that we were initially reflected into our long-term ambition.

Speaker #2: We don't see a key change on that. And you know this is something that we're just is part of our strategy and how we we fight.

Speaker #2: So that's you know up to us to bring solution to our customers in this environment to be able to be more positioned which is is what is our focus on.

Speaker #2: So that's one fair. But still growing. Maybe not at the same rate. And the margin, I think what you should expect is profitability, that we would expect a higher pace of margin rebuild in North America, which we have disclosed several times, that was a highly diluted business, which was a consequence of us being in this ramp-up aggressive ramp-up mode.

Speaker #2: Versus the other manufacturers and the pricing dynamics you you can understand that you know I cannot comment on on pricing and relative pricing I'm not you know previewed of what you know our competitors do.

Speaker #2: We are you know sitting with objective and factual approaches with our customers where we we share you know the evolution of our cost. We look jointly what we can do on the mix on the products on pricing if we have two choices.

Speaker #2: On the European dynamic first versus the A brands, we haven't really seen a shift in the approach. We're not in the boardroom of P&G and what they do for Pampers, but you probably have read that SET on one hand was happy with the push they're doing on their brand Liberal.

Speaker #2: Because we understand that's the best way to preserve and build partnership and and collaboration with our customers. So it's a case by case example and we don't you know I I cannot comment on our competitors approach and strategy.

Speaker #2: And that P&G also was relatively happy with the share gains that they had on Pampers. So what we observed was that those A players retook a more aggressive stance to defend their position.

Speaker #7: Yeah I understand. Thank you very much for the answer.

Speaker #2: Thank you.

Speaker #1: Thank you Wim. The next question comes from Floris Dijkstra from BNP Paribas. Floris.

Speaker #2: We don't see a key change on that. And this is something that we're just it's part of our strategy and how we fight. So that's up to us to bring solution to our customers in this environment to be able to be more positioned, which is what is our focus on.

Speaker #8: Hi. Thanks for taking my question. I'll ask them one at a time. So very quickly in regards to the input cost inflation due to what's happening in the Middle East is everyone in your industry hit similarly or are there differences between you and your competitors and some of the A brand players because of how you source them?

Speaker #2: Versus the other manufacturers, and the pricing dynamics you can understand that I cannot comment on pricing and relative pricing I'm not previewed of what our competitors do.

Speaker #2: I I thank you Floris. Our understanding is that you know everybody's industry is impacted. Of course it will depend on whether they have hedging strategy in place and the structure of their contract.

Speaker #2: We are sitting with objective and factual approaches with our customers where we share the evolution of our cost. We look jointly what we can do on the mix, on the products.

Speaker #2: But most of the contract for all of the players of the industry usually work with price formula which you know are are adjusted when the indices or the energy cost evolve.

Speaker #2: On pricing, if we have two choices. Because we understand that's the best way to preserve and build partnership and collaboration with our customers. So it's a case-by-case example.

Speaker #2: And all of them will have a slight lag because of the inventory position that you may you may hold. So that I would expect would be pretty similar except if there were very different hedging strategy in place.

Speaker #2: We don't I cannot comment on our competitors' approach and strategy.

Speaker #2: So that's for you first for your first question.

Speaker #6: Yeah. I understand. Thank you very much for the answer.

Speaker #8: Okay. That's helpful. And then just on the updated guidance so I think you know it says you get close to three and a half times net leverage number.

Speaker #2: Thank you.

Speaker #1: Thank you, Wim. The next question comes from Floris Dijkstra from BNP Paribas. Floris.

Speaker #8: From my understanding that's the leverage covenant on the RCF. Could you just give a bit more information on on how like that covenant works?

Speaker #7: Hi. Thanks for taking my question. I'll ask them one at a time. So very quickly, in regards to the input cost inflation due to what's happening in the Middle East, is everyone in your industry hit similarly, or are there differences between you and your competitors and some of the A brand players because of how you source them?

Speaker #8: I understand you get a one off spike and then what does it exactly prevent you from doing? Is it some kind of stopping on the draw?

Speaker #8: Just any clarity would be appreciated. Thank you.

Speaker #7: Yeah. So Floris thanks also for this question. Indeed we have a one off spike. That means that each half year we have a testing of the covenant.

Speaker #2: Thank you, Floris. Our understanding is that everybody's industry is impacted. Of course, it will depend on whether they have hedging strategy in place. And the structure of their contract, but most of the contract for all of the players of the industry usually work with price formula, which are adjusted when the indices or the energy cost evolve.

Speaker #7: That means the next testing is on the on the full year result. And that means that if we believe that we will be below the 3.5 actually if we would be at 3.6 for example it will would be below that 3.75 it would not be give a covenant breach.

Speaker #7: Now the question you're asking is imagine we would have a covenant breach which we don't expect at all because otherwise we would have come with a with with a different communication.

Speaker #2: And all of them will have a slight lag because of the inventory position that you may hold. So that I would expect would be pretty similar except if there were very different hedging strategy in place.

Speaker #7: Then you typically sit together with the banks and you present your plans and you discuss on a new covenant path. So that's how it works.

Speaker #2: So that's for your first question.

Speaker #7: But that's not the case at this moment. Does it answer your question?

Speaker #7: Okay. That's helpful. And then just on the updated guidance, so I think it says you get close to three and a half times net leverage number.

Speaker #8: Okay. Thank you. That's very helpful.

Speaker #7: From my understanding, that's the leverage covenant on the RCF. Could you just give a bit more information on how that covenant works? I understand you get a one-off spike, and then what does it exactly prevent you from doing?

Speaker #1: Okay. Thank you Floris. The next question comes from Fernand Debourg from Degroofed.com. Fernand. Up to you.

Speaker #5: Yes. Good morning. It's Fernand Debourg from Degroofed.com. I have a question on the impairment charges. And let's say on your strategy so why do you have to take these impairment charges related to your strategy?

Speaker #7: Is it some kind of stopping one of the draw? Just any clarity would be appreciated. Thank you.

Speaker #6: So Floris, thanks also for this question. Indeed, we have a one-off spike. That means that each half year, we have a testing of the covenant.

Speaker #5: Because actually if you take the impairment charges my understanding was always that you in the future you don't expect the proceeds anymore of the EBITDA.

Speaker #5: But on the other hand you say okay maybe you add a little bit of scaling down but of less less growth less ambition but still higher margins et cetera.

Speaker #6: That means the next testing is on the full-year result. And that means that if we believe that we will be below the 3.5, actually, if we would be at 3.6, for example, it would be below that 3.75.

Speaker #5: So why then to take this impairment? I don't understand. And and also if you are going to.

Speaker #6: It would not be give a covenant breach. Now, the question you're asking is, imagine we would have a covenant breach, which we don't expect at all because otherwise we would have come with a different communication.

Speaker #2: Obviously.

Speaker #5: Use third third third party place. Sorry. Third party players you also have to pay them. So you have your own production you you probably do your cottage lines then and then you are going to outsource it.

Speaker #6: Then you typically sit together with the banks and you present your plans and you discuss on a new covenant path. So that's how it works.

Speaker #5: I I I'm totally lost in this.

Speaker #6: But that's not the case at this moment. Does it answer your question?

Speaker #7: Yeah. Obviously the the one of the impairments I will take because it's indeed also a bit a technical. From an accounting point of view you make a you have to make a bit a distinction in the 144 million you have the goodwill and as you can read in the half year report but also the full year report it's you have to do a kind of impairment test.

Speaker #7: Okay. Thank you. That's very helpful.

Speaker #1: Okay, thank you, Floris. The next question comes from Fernand Debourg from the Haute Filtrum. Fernand, up to you.

Speaker #5: Yes, good morning. It's Fernand Debourg from the Haute Filtrum. I have a question on the impairment charges and, let's say, on your strategy. So, why do you have to take these impairment charges related to your strategy?

Speaker #7: It looks to your future plan. And first of all important to know that goodwill in North America it exists already for many years. It's based on past transactions that were done even not it's it's the the total structure that was built up at the time.

Speaker #5: Because actually, if you take the impairment charges, my understanding was always that you, in the future, you don't expect the proceeds anymore from the EBITDA.

Speaker #7: So there's no clear yeah specific origin related to recent M&A for example. What do you what are you doing then? You look at your plan and of course because we go from a volume strategy and you know that what was the intention to grow in sales to a more selective profitability strategy.

Speaker #5: But on the other hand, you say, okay, maybe you add a little bit of scaling down—less growth, less ambition, but still higher margins, etc.

Speaker #5: So why, then, take these impairments? I don't understand. And also, if you are going to...

Speaker #6: Obviously.

Speaker #5: Use third-party play, sorry. Third-party play is—you also have to pay them. So you have your own production, you do your cottage lines then.

Speaker #7: That comes of course the coming years with the cash flow which is more less modest than we expected before. And based on that tested we decided to take out the goodwill.

Speaker #5: And then you are going to outsource it. I'm totally lost in this.

Speaker #7: So it's related to to the ambition and the change in the strategy. On the assets for me there are two parts. Some of it are very concrete like in in Europe and for us Europe includes Australia you have seen that we we stopped the operation locally in Sydney to become an export business.

Speaker #6: Yeah. Obviously, the one impairment I will take, because it's indeed also a bit of a technical matter from an accounting point of view. You have to make a bit of a distinction in the €144 million.

Speaker #6: You have the goodwill, and as you can read in the half-year report, but also the full-year report, you have to do a kind of impairment test.

Speaker #7: You have perhaps seen in the H one report also that we have an intention to restructure some activities in Mayon that brings some asset impairments because some assets will not be used anymore.

Speaker #6: It looks to your future plan. And first of all, it's important to know that goodwill in North America exists already for many years. It's based on past transactions that were done, even if not in the total structure that was built up at the time.

Speaker #7: For the rest of the business and it's partially North America and partially in Europe and. With the main focus on baby and femme because they're as Laurent explained we focus on protecting the business defending the business and there we say okay we looked at our asset base and we said okay if we take our assets we want to simplify we will also to focus on the core assets that are most efficient the newest ones and then we said okay then it's better to take the old ones out because we want to go for full efficiency within our transformation.

Speaker #6: So there's no clear, yeah, specific origin related to recent M&A, for example. What do you—what are you doing then? You look at your plan.

Speaker #6: And of course, because we go from a volume strategy—you know, that was the intention: to grow in sales—to a more selective profitability strategy, that comes, of course, in the coming years, with the cash flow, which is more or less more modest than we expected before.

Speaker #7: And that brought another yeah bunch of impairments. So that's the buckets we're looking at.

Speaker #6: And based on that test, we decided to take out the goodwill. So it's related to the ambition and the change in the strategy. On the assets, for me, there are two parts.

Speaker #5: Right. Sorry. I thought Mayon Germany production was already closed down a few years ago way off took a lot of restriction charges. So I'm not.

Speaker #6: Some of it is very concrete, like in Europe. And for us, Europe includes Australia, and you have seen that we stopped the operation locally in Sydney.

Speaker #5: Of Australia but. Mayon was.

Speaker #2: Fernand. It's a reorganization of some of yeah. Fernand maybe the intention in Mayon relates to some innovation R and D activities and engineering activities that we are reorganizing.

Speaker #6: It will become an export business. You have perhaps seen in the H1 report also that we have an intention to restructure some activities in Mayon that brings some asset impairments, because some assets will not be used anymore.

Speaker #2: So that's that's why yes it's not linked to a manufacturing production site. But we also had pilot lines as you as you know in Mayon or you may know in Mayon.

Speaker #6: For the rest of the business, it's partially in North America and partially in Europe, with the main focus on baby and fem. Because there, as Laurent explained, we focus on protecting and defending the business.

Speaker #5: And then to come back on North America these lines are quite new. So what what are you going to.

Speaker #6: And there we say, okay, we looked at our asset base, and we said, okay, if we take our assets, we want to simplify. We also want to focus on the core assets that are most efficient, the newest ones.

Speaker #2: So yeah. There is thank you for the question again on North America. The the the North America business is is a mix you know we have two sites and it's a mix of new assets that of course are fully operational and fully used.

Speaker #6: And then we said, okay, it's better to take the old ones out, because we want to go for full efficiency within our transformation.

Speaker #2: And some old and older assets that we had that we some of them we were keeping as part of having eventually capacity available part of our previous high growth high volume growth plan.

Speaker #6: And that brought another set of impairments. So that's the buckets we're looking at.

Speaker #5: But sorry, I thought Mayen, Germany, production was already closed down a few years ago—way off, took a lot of restriction charges. So I'm not.

Speaker #2: As the market evolves as well some of the product requirement to win in the market has changed. And we've concluded that some of those assets will no longer be in use.

Speaker #6: It's the reorganization of.

Speaker #5: Of Australia, but.

Speaker #2: Because either too costly to modify or frankly because we could not be competitive to find the right contract to serve them volume. So when you reach that conclusion it is the right approach to adjust your asset base.

Speaker #6: Fernand.

Speaker #5: Mayon was.

Speaker #6: It's the reorganization of some of our, yeah. Fernand, maybe the intention in Mayon relates to some innovation, R&D activities, and engineering activities that we are reorganizing.

Speaker #5: Okay. Thank you.

Speaker #6: So that's why, yes, it's not linked to a manufacturing production site, per se. But we also had pilot lines, as you know, in Mayon—or you may know, in Mayon.

Speaker #1: Thank you Fernand. The next question comes from Oussama Tariq from BHF. Oussama up to you.

Speaker #5: And then to come back on North America, these lines are quite doing?

Speaker #6: Hi. Hi. Thank you for the opportunity. Good afternoon. I have just wanted to general questions. With regards to the review could you provide just a bit of more color on for example feminine care going forward and specifically on that where do you see that going in one or two years?

Speaker #6: So, yeah. Thank you for the question again on North America. The North America business is a mix. We have two sites, and it's a mix of new assets.

Speaker #6: And of course, our fully operational and fully used, and some older assets that we had—some of them we were keeping as part of eventually having capacity available.

Speaker #6: My second question would be more of a clarification. With regards to contract manufacturing did you I'm sorry if I missed something. Did you did you indicate something on it with regards to the review?

Speaker #6: Is it going to stop completely? And those will be my two questions at the moment. Thank you.

Speaker #6: Part of our previous high growth, high volume growth plan—as the market evolves as well—some of the product requirements to win in the market have changed.

Speaker #2: Thank thank you Oussama. On the first question our feminine care business is is almost ninety five percent plus European business. That is a relatively stable business and we intend to keep it that way.

Speaker #6: And we've concluded that some of those assets will no longer be in use—because they are either too costly to modify or, frankly, because we could not be competitive to find the right contract to serve them volume.

Speaker #2: So no change there. When we say that we go with a more targeted approach is how we serve that business. But not the the absolute sales of that business which you know we believe play a very important role and for which we have a key role for many of our customers.

Speaker #6: So when you reach that conclusion, it is the right approach to adjust your asset base.

Speaker #5: Okay. Thank you.

Speaker #2: Thank you, Fernand. The next question comes from Oussama Tariq from BHF. Oussama, over to you.

Speaker #2: On the contract manufacturing no we didn't indicate any changes on our stance on contract manufacturing. What we mentioned is that in some very selective situation we might go with an outside partner to source some product if we believe that it's a better use of resources than putting our own capital.

Speaker #7: Hi. Hi. Thank you for the opportunity. Good afternoon. I just wanted to ask a couple of general questions. With regards to the review, could you provide just a bit more color on, for example, feminine care going forward?

Speaker #7: And specifically on that, where do you see that going in one or two years? My second question would be more of a clarification. With regards to contract manufacturing, did you—I'm sorry if I missed something.

Speaker #6: All right. Thank you. Thank you. That would be all.

Speaker #2: Thank you.

Speaker #1: So thanks. That concludes the Q and A session. Laurent do you want to finish off with a couple of words?

Speaker #7: Did you indicate something on it with regards to the review? Is it going to stop completely? And those will be my two questions at the moment.

Speaker #2: Yes. Thank you. Thank you everybody for joining especially on the eve of of a summer break. And on a very heavy wheat for many of you.

Speaker #7: Thank you.

Speaker #2: Today we have communicated three important messages. First our progress on stabilizing the business which includes the liquidity and the leverage. Which is a very solid achievement.

Speaker #6: Thank you, Oussama. On the first question, our feminine care business is almost 95% European business. That is a relatively stable business, and we intend to keep it that way.

Speaker #2: However we also communicated a revision of our outlook given continued uncertainty and deeper impact from the Middle East crisis. And third we shared the key outcome of our strategic review with the fundamental transformation at its shaping a new context.

Speaker #6: So no change there. When we say that we go with a more targeted approach, it is how we serve that business—but not the absolute sales of that business, which we believe play a very important role.

Speaker #2: We have a very clear direction. The team in full execution mode. And while the market is challenging all our associates are working very hard to pave the way to a more resilient cash generating and value oriented context.

Speaker #6: And for which we have a key role for many of our customers. On the contract manufacturing, no, we didn't indicate any changes in our stance on contract manufacturing.

Speaker #6: What we mentioned is that, in some very selective situations, we might go with an outside partner to source some product if we believe that it's a better use of resources than putting in our own capital.

Speaker #2: Thank you for attending this call. Have a great rest of the day. And summer vacation for those who will benefit from it. Thank you.

Speaker #7: All right. Thank you. Thank you. That will be all.

Speaker #6: Thank you.

Speaker #2: So, thanks. That concludes the Q&A session. Laurent, do you want to finish off with a couple of words?

Speaker #6: Yes, thank you. Thank you, everybody, for joining, especially on the eve of a summer break—and on a very heavy week for many of you.

Speaker #6: Today, we have communicated three important messages. First, our progress on stabilizing the business, which includes the liquidity and the leverage—this is a very solid achievement.

Speaker #6: However, we also communicated a revision of our outlook, given continued uncertainty and the deeper impact from the Middle East crisis. And third, we shared the key outcome of our strategic review.

Speaker #6: With the fundamental transformation at its core, shaping a new context, we have a very clear direction. The team is in full execution mode. And while the market is challenging, all our associates are working very hard to pave the way to a more resilient, cash-generating, and value-oriented context.

Speaker #6: Thank you for attending this call. Have a great rest of the day, and summer vacation for those who will benefit from it. Thank you.

Speaker #1: Good afternoon, everyone, and thank you for joining us today. I'm Geoffroy Raskin from IR, and I'm pleased to have with us Laurent Millet, our CEO, and Geert Peeters, our CFO, to present the outcome of our strategic review and the results of the first half-year of 2026.

Speaker #1: Before that, let me remind you of the safe harbor regarding forward-looking statements. Good afternoon, everyone, and thank you for joining us today. I'm Geoffroy Raskin from IR, and I'm pleased to have with us Laurent Millet, our CEO, and Geert Peeters, our CFO, to present the outcome of our strategic review and the results of the first half-year of 2026.

Speaker #1: Before we proceed, let me remind you of the safe harbor statement regarding forward-looking statements. I will not read it out loud; I will assume you have duly noted it.

Speaker #1: With that cleared up, Laurent, over to you.

Speaker #2: Thank you, Geoff, and good afternoon, everyone. Today we have several key messages to share: of course, our H1 results and our outlook revision, but also the change of CFO we just announced. I want to take the opportunity to thank Geert, not only for his numerical contribution over the last two and a half years, but also for being here with me today as we guide you through some of the key changes at Ontex.

Speaker #2: In fact, today I will spend my comments on the strategic review first, before moving to highlights of H1 and our outlook. Then, Geert will cover the financial analysis of the half-year. I will come back to give you our priorities for the remainder of the year.

Speaker #2: When I took the helm of the company, my first mission was to ensure we would stabilize our business. This task will stay with us as we face a difficult environment.

Speaker #2: We've been very fast in deploying pricing actions, while at the same time pushing for more cost initiatives. In parallel, my first six months as CEO have been dedicated to taking a fresh and objective look at every aspect of our business.

Speaker #2: With the support of the board, we did a deep review in both North America and Europe, leveraging external advisors and our full team. The outcome of this work is leading to a fundamental transformation of the company to resume both top and bottom line growth.

Speaker #2: We have not waited to enter into execution mode. Actually, the consequences of the Middle East crisis made it all the more urgent for us to act.

Speaker #2: And as you can see here, we have already taken many steps. Finally, I have made several changes in our leadership team. In addition to the new CFO we announced today, we have backfilled the Head of Europe and have a new Head of North America.

Speaker #2: But let me now explain a little bit more about what is behind our fundamental transformation. It is articulated around four major shifts. The first shift is to increase structural productivity by launching an ambitious, expanded program, which will be able to focus on value.

Speaker #2: It will be a central pillar of the transformation, and I'll come back on the next slide with more details. Second, we are resetting our approach in North America to transition from volume-led expansion to a disciplined value creation model, focused on profitability, asset efficiency, and returns.

Speaker #2: Third and fourth relate to Europe, where we will both accelerate adult care to cornerstone our future profitable growth, while adopting a more targeted approach to protect our important baby and feminine care positions.

Speaker #2: So let me expand on the Focus to Value program, which encompasses all productivity initiatives of the company. Reflecting on what we experienced in the past few years and building on the work with advisors, we have set clear and ambitious targets, with a scope that goes deeper and broader — including cross-functional initiatives — to further reduce focus on performance-driven culture.

Speaker #2: We aim to deliver €240 million of savings over 2026–2028 versus our 2025 baseline, which represents €40 million more than the €200 million we had committed for.

Speaker #2: Actions have already started to further adjust the cost base, amplify product and logistics savings through simplification, lean manufacturing, and network optimization. A streamlined organization across white-collar functions.

Speaker #2: There, at the end of the program, we aim to have reduced white-collar positions outside manufacturing by more than 20%. To achieve the incremental €40 million identified, it will require additional restructuring costs.

Speaker #2: ...of about €30 to €35 million, leading to a total of about €60 to €65 million in restructuring for the total program to be faced over the next 24 months, of which about €20 million will impact the second half of '26.

Speaker #2: To ensure we don't lose any time and are able to adjust as the business evolves, we have put in place a Transformation Management Office, which is operational today.

Speaker #2: Let me now take you to our changes in North America. There, we have a clear case for change. Market dynamics have evolved in the past few years.

Speaker #2: In the baby market, we have a complex setup that is suboptimal to drive cost leadership, combined with a business that has not delivered the returns expected on the high investment we realized.

Speaker #2: This is leading us to fundamentally reset the approach to prioritize profitability. We have a new leadership in place, we have already adjusted our plans, and have started to simplify our operational setup, which includes a thorough review of our assets and capacity.

Speaker #2: This resulted in a significant non-cash impairment to adjust both the historical goodwill and the asset base. What we are pursuing is to progressively shift our portfolio to areas where we can generate profit, and we believe there are many opportunities to do so.

Speaker #2: Deliver a simpler operating model, all aiming to return to sustained cash flow generation. Let me now touch briefly on Europe. Adult care is a structurally attractive, growing category.

Speaker #2: Where we already hold a strong position, it will become the cornerstone of our future growth. We will increase focus and investment in capacity, innovation, and go-to-market.

Speaker #2: That will reinforce our leadership and allow us to grow volume and volume share across retail and healthcare channels. This is obviously a topic that we will share more elements of in future interactions.

Speaker #2: At the same time, we intend to protect our very important position in baby and feminine care. However, we concluded here too that we had to approach it in a different way.

Speaker #2: As the market declines, especially in Baby, as we still have legacy assets that drive complexity despite our many recent efforts, we are reviewing our approach to ensure we allocate our resources where we can best unlock value for our customers and for us.

Speaker #2: At very specific times, it might mean we rely more on an outsourcing partner. At other times, it might mean that we define our innovation strategy much more in tune with our asset capability to optimize investment.

Speaker #2: In all cases, this is to best position us to continue to serve our priority customers in the best way possible. To execute this shift, we have identified selective opportunities to simplify our asset base and retire some old lines, to again drive efficiency.

Speaker #2: This explains why we have recorded some non-cash impairment here as well. All that to pursue clear goals: protect our volume share by focusing where we can make a difference for our customers, unlock innovation speed and productivity, and improve return on capital.

Speaker #2: To enable the transformation, we have mentioned additional restructuring costs and alluded to non-cash impairment, which will total €144 million. We will detail this more in this part.

Speaker #2: This is consistent with our ambition to simplify our operations, to focus on segment best place to improve returns, thereby shaping a more resilient, cash-generating, and value-driven Ontex.

Speaker #2: Let me now transition to our second key topic and share highlights of H1 and our revised outlook. Our H1 performance was mostly characterized by year-on-year lower demand, leading to lower volume.

Speaker #2: It drove revenue down 2.2% like-for-like, and adjusted EBITDA margin by 0.7 percentage points, as a result of the lower volume, while cost inflation was offset by productivity.

Speaker #2: Nevertheless, we generated positive free cash flow, and combined with some M&A inflows, this brought our net debt down to reduce leverage over the half, to 3.2 times.

Speaker #2: Let's look at the quarterly evolution on the next slide. What is encouraging to see is that we have managed to stabilize the quarterly performance since the fourth quarter last year, and this is despite the more challenging environment.

Speaker #2: While year-on-year our Q1 performance was well below last year, in Q2 revenue was in line and adjusted EBITDA is stable. In fact, adjusted EBITDA is stable over the last three quarters—a good outcome of our single focus on stabilizing the business.

Speaker #2: Albeit we all agree at a level we would like to see higher, we will keep this minorical focus on stabilizing our business. Yet, we know that in the middle, this crisis impact will be more severe in Q3.

Speaker #2: So that leads me now to look at H2, where indeed we expect to continue to operate in an equally challenging and volatile environment. The demand side has softened a bit further compared to what we expected, and we believe it's going to remain mostly unchanged.

Speaker #2: We still see the opportunity that we have and the headwinds that we have. On the cost side, however, the geopolitical situation remains uncertain and is pressuring our margin.

Speaker #2: It is fair to say that the speed and intensity of the cost increase in Q2 was more than what we had expected. But we are taking actions, and as we explained earlier, we expect to fully recover the cost impact over time, yet with a timing delay.

Speaker #2: The situation remains fluid, as all of you know, with changes every day and every week. Based on the evolution so far and the latest assumptions, we are revising and broadening the outlook as presented on the next slide.

Speaker #2: Adjusted EBITDA to end up in a range of €165 to €180 million, with the midpoint broadly aligned with prior year results and the latest consensus.

Speaker #2: Driving this, we expect revenue to be broadly stable and some margin recovery as we enter Q4, as the pricing actions and efficiency initiatives start to more than offset the cost inflation.

Speaker #2: We expect negative free cash flow between €10 million and €25 million. The decrease versus the previous positive outlook is the result of the lower expected adjusted EBITDA and the higher restructuring costs, partly offset by better working capital management results.

Speaker #2: The combination of both is to keep leverage below 3.5 times at the end of the year, a point that later on will come up further.

Speaker #2: So, a perfect transition to our H1 financial review here. It's up to you.

Speaker #1: Thanks a lot, Laurent. Let me go through the year-on-year performance of the first half-year results. As Laurent pointed out, revenue declined 2% like-for-like, driven by volumes, although Q2 showed mild growth.

Speaker #1: On top of X being mainly the US dollar depreciation, which added another 1% decrease, baby and feminine care volumes came out 4% lower. Both can be explained by the decreasing contract manufacturing volumes, as well as some contract exits in overseas regions, which were anticipated.

Speaker #1: When we only look at retailer brands, we actually did better than the market. Our baby care volumes were largely stable in Europe, and even slightly increased in North America, while both markets for retailer brands actually showed a mid-single-digit decline.

Speaker #1: Ontex mainly benefited from a strong position in baby pants, which continues to grow double digit. Adult care also continued to show growth, albeit more modestly, by 1%.

Speaker #1: This is due to a robust performance in the healthcare channel, whereas in retail, volumes were down, linked to Ontex customer exposure and temporary capacity constraints.

Speaker #1: Although we have committed price increases in Q2 to mitigate the cost inflation, this will only impact the second half of the year. The negative price impact you notice in the revenue bridge of H1 is still a carryover from last year, as a response to raw material price decreases in that year.

Speaker #1: Moving to adjusted EBITDA on the next page. The lower volume and revenue pushed our adjusted EBITDA €12 million lower. We managed, however, to reduce costs by €2 million net, thanks to savings offsetting the rising input price environment.

Speaker #1: Raw material prices started to go up due to the Middle East crisis, especially from June onwards, as the contractually delayed impact of indices kicked in.

Speaker #1: This was primarily the case for oil derivatives, such as back sheets and certain packaging materials. Other input costs rose as well, but earlier—from March onwards in particular—transport costs increased, driven by the higher diesel price.

Speaker #1: Supply chain inefficiencies, which started in the second quarter of the year, are improving but still impacted the comparison, especially in the first quarter. Our cost transformation program has continued but, at the same time, has deepened and broadened under the new name 'Focus to Value.'

Speaker #1: It contributed significant savings in cost of goods sold and SG&A. Last but not least, the translation impact was slightly positive. Altogether, adjusted EBITDA came down by 9% to €78 million, and margin by 0.7 percentage points to 9.1%.

Speaker #1: Let's dive a bit deeper into the full P&L on the next slide. The adjusted profit for the half year was plus €9 million, slightly better than last year despite the lower adjusted EBITDA.

Speaker #1: The main reason is the net financial costs, which amounted this year to €19 million but were inflated last year by unrealized negative forex impacts.

Speaker #1: That's where we temporarily and mostly recovered in the second half of '25. Adjusted tax was somewhat higher than last year due to the higher net profit before tax.

Speaker #1: The adjusted figures exclude two buckets of one-off costs, being, on one hand, the restructuring costs. These amount to €9 million net and consist of partial provisions of €21 million for the Focus to Value program, of which a small part was already expensed in H1.

Speaker #1: That was partly offset by a positive €12 million accrual for tax that we expect to reclaim in the future in Brazil. On the other hand, we have the non-cash impairments for €144 million triggered by the strategic review, as has been explained by Laurent.

Speaker #1: €51 million is the impairment of the goodwill on the North America business, where we have reviewed our ambitions. The other €93 million is on assets, mostly equipment in the baby and feminine care categories, where we adjust capacity and focus on our core assets.

Speaker #1: This brings us to a total loss for the period of €143 million, which compares also to a negative amount last year of €115 million. But last year, we also had a non-cash impact, but for different reasons.

Speaker #1: Namely, due to the divestment of the Brazilian business, the cumulative translation reserves were recycled from the balance sheet into the P&L in '25. As you notice, the P&L is impacted by several non-cash effects.

Speaker #1: Let us now look into the cash flow of the first half of the year, which shows a much brighter picture. We managed to realize, in the first half of the year, a positive free cash flow before interest of €27 million, and including interest of €7 million.

Speaker #1: Our continuous focus on improving working capital delivered results. Indeed, net working capital over revenue dropped by 0.6 percentage points to 4.5%. The improvement is a combination of optimizing payment terms and inventory levels.

Speaker #1: We had a positive impact from employee benefits. This is due to the difference between the accrual for variable remuneration related to 26. The first half of 2026.

Speaker #1: As to capex, that amount was 29 million 3.4% of revenue, and is relatively low but is linked to the phasing over the year. Because in the meantime we have commitments so that capex levels will catch up in the second half of the year.

Speaker #1: We paid out 11 million euro in restructuring costs in the first half of the year, which are mostly related to the finalization of the Belgium footprint optimization.

Speaker #1: Also, some initial actions have been executed on the focus-to-value program. And then the tax and financing cash-outs were slightly lower than last year. That brings us to an overview of the net debt on the next slides.

Speaker #1: Our net debt further reduced by 6% or 37 million euro, of which we cash flow contributed plus 7 million euro as explained on the previous slide.

Speaker #1: We also had 29 million euro positive impact from M&A activities, mainly thanks to the repatriation of the cash in Algeria. This cash comes from the divestment of the Algerian business in 2024, which took time to repatriate until Q1 2025 and was classified as a financial asset at the end of 2025.

Speaker #1: Within the M&A block, we also have some limited post-closing adjustments related to the Brazil and Turkey divestments last year. Net debt thereby amounted to 540 million euro at the end of June, and gross debt to 619 million.

Speaker #1: Debt included 68 million euro drawn on the RCF, which represents 25% of the total capacity. And we finished the first half year with a cash position of 79 million euro.