Ontex Group

Ontex is the largest private-label baby-diaper, feminine-care, and adult-incontinence manufacturer in Europe. If you have ever bought Aldi, Lidl, Carrefour, Tesco, or Walmart store-brand diapers, you have probably bought Ontex. Revenue 1.76 billion euros across baby, feminine, and adult-care segments, operating from Belgian-headquartered plants in Europe, Mexico, Turkey, and Australia.

The market has been crushing ONTEX because of three things: pulp and resin commodity cost spikes from 2021 to 2023 (compressed gross margins), the loss of large private-label contracts to lower-cost Turkish competitors, and a 2023 divestiture of the Mexican-Brazilian business at unfavorable terms. P/B 0.22, forward P/E 3.8 reflect deep skepticism. But trailing P/E 13.3 says current earnings are not zero — and the deleveraging plus pulp-cost normalization could unlock a multi-bagger if margins recover.

Belgian family-office Sienna Capital (Frère group) has a meaningful stake. Activist Sterling Capital made a 2023 push for divestitures and got the Mexican-Brazilian sale done. No US 13F whale. Free float around 60 percent.

At 2.65 EUR with 0.20 EUR EPS the trailing P/E is 13.3 and forward P/E 3.8 on consensus 0.70 EUR forward EPS. P/B 0.22 is extreme; P/S 0.12 reflects low-margin business. EV/EBITDA 5.7 is reasonable on a recovering basis. The cheapness is real; the question is whether margin recovery materializes.

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ONTEX is a textbook European deep-value cyclical: real franchise, balance sheet not pretty, margin pressure that should mean-revert. Forward P/E 3.8 with credible pulp-cost normalization catalyst is asymmetric. The risk is that private-label-margin compression is structural rather than cyclical; the reward is multiple expansion plus dividend reinstatement. I size 0.5 to 1 percent in a deep-value sleeve and watch quarterly gross margins for catalyst confirmation.