Ontex Rating Lowered To 'B' On Deteriorating Free Cash Flow And Constrained Operating Margins; Outlook Stable Dec 12
- Language: English
- Published: December 2012
The rating on Belgium-headquartered hygienic disposables manufacturer Ontex IV S.A. (Ontex) reflects Standard & Poor's Rating Services' assessment of its financial risk profile as "highly leveraged," with fully Standard & Poor's-adjusted debt to EBITDA of about 7x for the 12 months ended Sept. 30, 2011. We classify Ontex's business risk profile as "fair," reflecting increased competition from branded players pursuing aggressive promotion and discounting strategies. The group is also exposed to volatile raw material prices, which make up about 67% of operating costs. These weaknesses are mitigated by Ontex's established position in the niche private-label market for hygienic disposable products in Europe and its good cash generation capacity. In the first nine months of 2011, Ontex's operating margins were lower...
Companies mentioned in this report are:
- Ontex IV S.A.
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- Ontex IV S.A.