S&P revises Ontex outlook to stable

S&P said it changed its outlook for Ontex Group NV to stable from negative and affirmed its B ratings on the company and its €580 senior unsecured notes due 2026. The 3 recovery rating(65%) on the notes is unchanged.

“Ontex's operating performance for 2023 outperformed our base case and led to stronger-than-expected deleveraging, with S&P Global Ratings adjusted debt to EBITDA of about 4.5x; we expect deleveraging to continue,” S&P said in a statement.

The agency said it forecasts Ontex's S&P Global Ratings-adjusted EBITDA margin growing to 9%-10% in 2024 and 10.5%-11.5% in 2025, leading to a gradual improvement in free operating cash flow generation and further deleveraging toward 4x in 2024 and 3x-3.5x in 2025.

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