DARE

TO LEAD
CHANGE.

Integrated Annual Report 2019

MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

ABOUT ONTEX
2019 AT A GLANCE

OUR OUR TRACK OUR

BRANDS RECORD CATEGORIES
We understand
the complexities
and opportunities
of the personal
hygiene business.
Our 40 years of 2.28B €
experience in Revenue Baby Care Adult Care Feminine
personal hygiene
has enabled us to
This is the largest Discretion, Care
part of our protection and
develop our own business. We dignity are By providing
brands, which we
mainly market in
86.4M € manufacture baby the three key a range of
products such
Adjusted profit diapers and baby considerations in
Europe, Russia, pants for retailers the design and as ultra-towels,
Middle East, Sub- for the period fluff towels,
as well as our manufacture of
Saharan Africa, own brands. They our light, medium panty liners
North Africa and are designed to and heavy and tampons
the Americas. we are able to
5.86 bring affordable
comfort to babies
incontinence
solutions. respond to the
different needs
Accident and peace of mind Products include
to parents. pads, pants, and lifestyles
frequency rate of women. All
(#/m worked hours) adult diapers and
underpads, which have innovative
are sold through features that
healthcare offer protection
and comfort at all
26.6 gCO2/€ institutions as
well as directly to times.
Carbon emissions retailers and other
customers and
consumers

18
Production facilities

28
Sales and marketing OUR MARKETS
sites

9
R&D centers

~10,000
Employees

60+ ONTEX PRODUCTS AND SERVICES ARE DISTRIBUTED

Nationalities IN MORE THAN 110 COUNTRIES AROUND THE WORLD.

www.ontex.com
INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

CONTENTS

Strategic report
At a glance
Interview 2
Key highlights 6
Market context 8
Strategy 10
Stakeholder engagement 16
KPIs 18
Divisions 20
AMEAA 22
Europe 24
Healthcare 26
Operations 28
Innovation/digitalization 30
People 32
Responsible production 40
Financial review 48

Corporate governance
Corporate governance statement 50
Remuneration report 66
Risk management 79

Financial statements
Contents 83
Statement of the Board of Directors 84
Independent auditor’s report 85
General information 89
Consolidated financial statements 90
Notes to the consolidated financial statements 96
Summary statutory financial statements 144

Sustainability statements
Materiality approach 146
Sustainable Development Goals 148
Engaging with our stakeholders 149
Sustainability performance 2019 150
GRI index 156

Additional information
Investor relations and
financial communication 160
Glossary 161
About this report 162

Find out more online

Our 2019 integrated annual report is also
available online at ontex.com

STRATEGIC REPORT 1
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

DARE TO LEAD
CHANGE
INTERVIEW OF THE CHAIRMAN
OF THE BOARD AND CEO

How would progress on this drive for sustainable invaluable. Their diversity brings bal-
change on page 12. ance and a spectrum of relevant skills
you characterize Ontex’s
and experience which complement the
performance in 2019? We are encouraged by the energy and
talents of our executive team.
enthusiasm behind the faster tempo.
Charles Bouaziz, CEO: 2019 marks
the improvement of our trading per- We review Board membership regu-
the end of the second chapter in the
formance in the second half of the larly to maintain an appropriate bal-
company’s history since its initial public
year, partly thanks to the first benefits ance and orderly succession. During
offering in 2014.
of T2G, and we look forward to reaping the year, we welcomed two new
Admittedly, it made less captivating the full benefits of T2G within the next non-executives. Esther Berrozpe brings
reading than the first one. As we have two years. more than 25 years of FMCG expe-
documented in previous reports, it has rience from various marketing and
The resilience of our business, our abil-
featured strong external headwinds executive roles, while Aldo Cardoso’s
ity to adapt and the hard work, deter-
and a number of internal challenges. experience from many industries in a
mination and creativity of our people
number of different regions will be of
During the year, we introduced a num- have all been vital elements in the
great value in our multinational and
ber of measures to improve all areas year’s performance and the introduc-
multicultural environment. (See page
of our business and prepare us for the tion of T2G.
54 for fuller biographies.)
future.
Luc Missorten, Chairman: The
First, we moved to three large Divisions Board is happy with the direction that Can you already see
(rather than five small-to-medium management took and the rigorous
focus on execution. No stone was
the effect of T2G?
sized ones) with specific go-to-market
models. We also established a single, left unturned. The initial results are Charles: The performance of our own
centrally managed Operations organi- encouraging. They speak volumes for brands in our AMEAA Division posi-
zation to further drive efficiency. This the integrity of the company, the com- tively contributed to Like-for-like sales
more agile structure was an integral mitment of the people and the quality result and adjusted EBITDA, at constant
part of our readiness to adopt Trans- of leadership that we have. currencies. Sales in retailer brands in
form2Grow, an all-encompassing pro- Europe showed positive signs of recov-
Our Board work sets the tone for the ery and, in Healthcare we are benefit-
gram to revitalize us at every level of
company and ensures good gover- ing from boldly going beyond the tradi-
the company.
nance (see pages 50 to 77). The support tional tender business into new areas
Introduced in the second quarter, T2G of the fellow Board members has been such as self-pay, and extending our
will speed our path to operational and market offer to include more services.
commercial excellence. It acts as an
enabler of our strategy and will accel- Cash generation was stronger thanks
erate value creation, specifically in to strict working capital management.
terms of margin improvement and free We reduced our net debt and improved
cash flow. It covers every aspect of our the important Debt/EBITDA ratio. We
operations from production and sup- “T2G will speed are comfortable with our covenant
ply chain, through innovation and com- up our path obligations.
mercial, to how we work and act as an to operational Details of our operational and financial
organization. and commercial performance can be found on pages 28
to 29 and pages 78 to 143 respectively.
In all, there are around 2,000 T2G ini- excellence. It acts
tiatives across the company. We have as an enabler of Luc: The Group’s diversity in terms of
resources allocated, governance to geography and segments has clearly
monitor execution and progress and
our strategy and
helped this year. And that diversity
investments ring-fenced to underpin will accelerate value is something we plan to build on. We
and sustain the transformation. Our creation.” are encouraged by the changes we are
Chief Transformation Officer, Thierry seeing to ensure that we maximize our
CHARLES BOUAZIZ, CEO
Navarre, provides more details of strengths and improve the long-term

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Beyond
Traditional
Business
In Healthcare we
are benefiting from
boldly going beyond
the traditional tender
business into new areas
such as self-pay.

CHARLES BOUAZIZ, CEO

“Diversity is
LUC MISSORTEN, CHAIRMAN something we plan
to build on. We are
sustainability of our business. The the interest of all of our stakeholders, encouraged by the
Board is confident that we will see the and leave a sustainable legacy. It has changes we are
positive impact of the strategic choices been tested in recent years in terms of seeing to ensure
that have been made, and the transfor- top line and margins, and our industry that we maximize
mational initiatives that are well under
way.
per se has proven more volatile than our strengths and
previously thought. The model has
improve the long-
been a constant and the Board strongly
While your structure has supports it.
term sustainability
changed, your model of our business.”
remains the same? How have you dealt with UC MISSORTEN,
L
CHAIRMAN
Charles: Our model remains unique. the issues specific to Brazil
We are the only big player (we are last year?
number five in the world by revenue) Charles: The team in Brazil has put
playing equally on both the retailer in a great effort and the business is
side and the branded goods side. We well along the path to recovery after
manage to successfully satisfy the cost the post-acquisition challenges. We
expectations of the retailer brand and centralized production without major
to match the ever-changing needs of disruption and brought better struc-
consumer brands. The fact that we ture to the business. At the same time,
play exclusively in three high value cat- Details of our operational
we increased efforts to engage and
egories Baby Care, Feminine Care and and financial performance
empower our people. The much-im-
Adult Care, distinguishes us from other can be found on pages 48
proved safety record says much about to 49 and pages 83 to 145
large-scale operators. This is what respectively.
their attitude. Brazil is a very competi-
really gives us a strong proposition.
tive market where all the main branded
Luc: The Ontex business model puts us players are competing for share. The
in a position of trust – trust that we will process of recovery will take time but
grow our business in the right way, in I am encouraged at gradual top-line

STRATEGIC REPORT 3
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

“The Ontex
business model
puts us in a
position of trust –
trust that we will
grow our business
in the right way, in
the interest of all of
our stakeholders.”
LUC MISSORTEN,
CHAIRMAN

improvement, the sequential margin

expansion and better cash manage-
ment as our local brands continued to
generate solid consumer demand.
Luc: Brazil is a very exciting and
important market for Ontex’s growth
plans. The significance of this region
THE FACT THAT WE PLAY EXCLUSIVELY IN
was mirrored by our decision to hold THREE HIGH VALUE CATEGORIES BABY
one of our board meetings there this CARE, FEMININE CARE AND ADULT CARE,
year which included a visit to the fac- DISTINGUISHES US FROM OTHER LARGE-SCALE
OPERATORS. THIS IS WHAT REALLY GIVES US A
tory so that we could see for ourselves STRONG PROPOSITION.
the results of the plans to re-create
value. The impression left makes it eas-
ier to understand why the turnaround
is in progress and why we expect it to
continue.
In terms of sustainability, Luc: The way Ontex makes its products
Are there any standout and the way it behaves give the com-
are you on track to meet
pany an opportunity to build trust and
successes you want to your aspirations? respect. It is seizing that opportunity.
mention? Charles: We want to make a positive Ontex has a strong commitment to
Charles: We are resilient people and difference to the world around us corporate responsibility and a highly
restoring our performance will sustain through our products and how we act. knowledgeable and motivated team
that sense of pride (and daring) that We manufacture disposable products leading environmental matters at
has characterized us to date. Special so sustainability is hugely relevant to Group level. The Board is satisfied with
mention should go to the efforts of our business. 2019 marked the end the direction the company is taking
our Healthcare team. They have made of the latest stage of our sustainability and with the plans to go further with
further inroads into the important self- the next set of goals. The company has
journey. The targets we set have largely
pay channel and added different levels found some real opportunities to make
been met (see page 19) and during the
of service while maintaining their com- a difference and align itself closely with
year, we worked on revising our strat-
mitments to the institutional market. In the UN’s Sustainable Development
egy and setting new targets that will
Turkey, where we are big in Adult Care Goals.
take us to 2030 (see page 14), the year
products, the Baby Care team man-
aged to secure a substantial contract we have said we will be carbon neu-
tral. All our European plants are now And any news on the
which means that we are now firing on
all cylinders there. And in North Amer- powered by green energy, and there is innovation front?
ica, we have succeeded in deepen- always an environmental assessment Charles: Our company is full of tal-
ing our engagement with a very large accompanying any new request for ented people with a real passion for
supermarket chain in Baby Care, which investment to make sure we get it right and commitment to innovation. This
will help drive scale and growth. from the start. report is sprinkled with examples of

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Confident
of Progress COVID-19
UPDATE APRIL 7TH, 2020
Our expectations for After the end of our 2019 financial
the Group in 2020
are positive. The new year, on January 30th, 2020, the World
structure is bedded in, Health Organization (WHO) declared a
our pioneering thinking. During the T2G is already having
the desired effect, the Covid-19 virus outbreak a Public Health
year, we refined our innovation pro- geographic spread and Emergency of International Concern. On
cess. We split our R&D into two streams pipeline of new products
are promising. March 11th, 2020, the WHO Director General
(retailer brands and our own brands) to
characterized COVID-19 as a pandemic.
ensure that we are surfacing the best
ideas and innovations specific to them. We support global efforts to contain the
(See page 30). virus and minimize its consequences.
With more than 40 years of experience in
Luc: Innovation is very important to us
as a Board and is always on our agenda. personal hygiene, we feel our best course of
Innovation is not just value-generating, action is to continue to produce and deliver
it also demonstrates the mind-set of our normal range of vital products to our
the company. The company has cre- customers and consumers.
ated an environment where creative We have implemented measures in all our
thinking can flourish. Growth will come production facilities and our global supply
from the ability to turn that into excit-
chain to keep our people safe and to ensure
ing new propositions that create real
a steady, daily flow of millions of personal
value for our customers and the world
hygiene products to healthcare workers and
around us.
retailers on five continents. Our suppliers are
supporting us strongly in our efforts.
You have just celebrated “We want to make a
your 40th anniversary. Any In addition, we are advising institutions on
positive difference how our products can help doctors serve
reflections? to the world patients for longer uninterrupted periods.
Charles: It is a reason to celebrate and around us through We have also donated tens of thousands of
we did that in various ways during the
year, very much on a plant-by-plant
our products personal hygiene products to care-givers,

basis. We appreciate the experience and how we act. including emergency response teams in
We manufacture China and Europe.
and expertise that those four decades
have given us as we progressed from disposable We thank all Ontex employees around the
family ownership, through private products so world at this difficult time. We are aware
equity to being a listed company. We
sustainability is that this is not an easy time for them and
are still a young and vital company. The their families and we very proud of their
actions we are taking today are prepar-
hugely relevant to
dedication and sense of responsibility in
ing us for the next forty years. We are our business.” these challenging times. We have taken the
a completely different company today CHARLES BOUAZIZ, CEO necessary measures to slow the spread of
and we should also celebrate that. COVID-19 and protect our employees, and
Luc: We have much to look back on, this will remain our number one priority
but a lot more to look forward to. Our throughout this difficult time. Please note
expectations for the Group in 2020 are that all pictures of employees in this report
positive. The new structure is bedded were taken prior to 2020.
in, T2G is already having the desired
effect, the geographic spread and pipe-
line of new products are promising. We
are confident of progress.
In the longer term, the Board remains
excited about the structural growth
opportunities in the healthcare busi-
ness, the potential for further revenue
and profit growth, and healthy returns
to shareholders.

STRATEGIC REPORT 5
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

KEY HIGHLIGHTS
Opening up the east
In February, Ontex officially
Further commitment
opened its new factory in to human rights
Radomsko, Poland. The plant’s We expect our own commitment Product of
four lines help us better serve to human rights to be shared by
the growing eastern European
the Year 2019
our business partners, and those
market. that they, in turn, do business iD Comfy Junior, a diaper designed
with. As part of our journey to for children aged four years and
advance the human rights of over, was named Voted Product
workers and positively shape of the Year 2019 by an online
global labor markets, we launched consumer panel in Belgium. First
(See also
page 25.) a new social compliance scheme, rated on attractiveness, innovation
including third party social audits. and intention to buy, they were also
We also updated our ethical field-tested by Belgian consumers.
sourcing program by revising our
Supplier Code of Conduct and
Ethical Sourcing policies.

Factory of the future

Ontex Eeklo won the prestigious
Factory of the Future award
Working with local communities
from Belgian sectoral employers’
organization Agoria for the In Brazil, Ontex started an outreach program, Take
second time in two years. The Care, that works with local communities. During the
award recognizes the plant’s year, four charitable organizations chosen by the
efforts to future-proof operations employees themselves, received free consignments of Professionalism
and its focus on ecological diapers for distribution to local parents. rewards
production and sustainable Annick De Poorter, Executive
innovation. Vice President R&D, Quality &
Sustainability, was nominated
as 2019 CSR Professional of
the Year in Belgium. The award
recognizes a consistently
ambitious drive to create a truly
integrated sustainability vision for
a company.

7,200 Turbo-charging our organization

Solar modules that generate
over two gigawatthours of In the second quarter, we launched our company-
green power per year. wide Transform to Grow (T2G) program to boost our
commercial focus and competitiveness and accelerate
Green electricity produced on site the execution of our strategic priorities. The aim is to
The Ontex plant in Eeklo, Belgium installed a large turn Ontex into a stronger more profitable company
industrial solar power system. The photovoltaic system and to enhance our ability to deliver sustainable
comprises 7,200 solar modules that have the potential to growth.
generate over two gigawatthours of green power per year,
equivalent to the electricity consumption of 600 families.
The system supplies 7.5 percent of the plant’s annual (See page 12 for full details.)
electricity requirements.

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The beautiful games Just like normal underwear

In June, women and men from 16 different Ontex locations Launched in August in Brazil, BigFral pants are designed
came together to compete in the Ontex Football Cup 2019 for young and physically active people with light or
in Belgium. The women’s team from Brazil and the men’s moderate incontinence. Consumers can wear them just
team from Mexico won the Cup. like ordinary underwear, and absorption is twice as high
as that of leading A-brands. They are also lighter and
better fitting than other brands.

Outclassing the rest

Our Brazilian baby diaper
brand Pom Pom was launched
with our new technology in
September to improve liquid
distribution and speed up
absorption. The changes keep
it at the forefront of the local
Big reward for diaper market. The special
Little Big Change 40% Comfort Fit makes the diapers
A campaign for our much-heralded The special 40 percent thinner than
diaper subscription service in France, Comfort Fit makes ‘normal’ diapers and features
the diaper 40%
Little Big Change, won the top category thinner than such as elastic ears and front
award at the French Grand Prix Strategiés ‘normal’ diapers wings help make life easier for
du Digital 2019. The film in question, parents.
where babies demand diapers with
fewer chemical substances, featured on
Facebook and TV and reached 40 million
people in only a few weeks. New solution for men
Encouraged by the success with In October, Ontex started production of its latest
French consumers, a Little Big Change Adult Care innovation, pants for men. Available in
subscription model was also launched for dark blue, these pants offer powerful protection,
moms and dads in Belgium, Luxembourg extreme comfort and ultimate discretion.
and the Netherlands.

(See page 31)

The future’s in good hands

Ontex’s popular Global Graduate program is
going from strength to strength. In September,
we welcomed our third generation of graduates
who spent the first couple of months at our
headquarters in Aalst familiarizing themselves
with our company. Then, like their predecessors,
they moved on to different assignments in
Belgium and abroad.

STRATEGIC REPORT 7
STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS MARKET CONTEXT STRATEGY KPI’S DIVISIONS
ENGAGEMENT

FAVORABLE
MARKET
FUNDAMENTALS
THE PERFORMANCE, CONVENIENCE AND COST-EFFECTIVENESS
OF OUR PERSONAL HYGIENE PRODUCTS MAKE AN ESSENTIAL
CONTRIBUTION TO PEOPLE’S LIVES. THEY IMPROVE QUALITY
OF EVERYDAY LIFE AND ENCOURAGE BETTER HYGIENE AND
HEALTH. THEY ARE DESIGNED SO THAT EVERYONE CAN ENJOY
INDEPENDENCE AND DIGNITY.

T
he three categories in which we Two major trends –
play, Baby Care, Adult Care and
e-commerce and natural
Feminine Care all show good
growth trends on a global basis, The below paragraph here sets out
driven mostly by emerging markets. the major trends that are helping to
reshape our thinking. While all are
The fundamentals of the hygiene seg- being addressed, two of them, the
ment remain positive. These include
move towards more natural products
continued population growth, a grow-
and the shift towards online shopping
ing ageing population, further urban-
are the most prevalent. We are adapt-
ization and more awareness of what is
ing our business to capture the benefit
available.
of those changes. Natural, naturally
The concern for the future of society
Growth patterns vary
E-commerce fastest and the planet has triggered a shift
While growth is being driven by emerg-
growing channel towards a demand for products which
ing markets, the developed markets still have a natural profile and which sup-
offer good potential. The Americas (€24 E-commerce has doubled its share of
port circular economy thinking. We are
billion market)1 is expected to return a sales2 of our personal hygiene prod-
conscious that, today, you have to do
compound average growth rate (CAGR) ucts in recent years and is the fast-
more than run production facilities effi-
of 7.6 percent up to the end of 2024. est-growing channel for our categories.
ciently and you also have to minimize
The mature market of Europe (€17 bil- For example, in Baby Care, a €41 billion
external impacts.
lion) is expected to grow 3.2 percent in global business, 15 percent of sales are
the same period in terms of revenue, now online. For Feminine Care (€28 bil- In our industry, the focus is also on
while Middle East and Africa (€7 billion) lion) and Adult Care (€9 billion), the fig- product biodegradability and recy-
is expected to grow 14 percent and Asia ures are 10.6 percent and 12.6 percent clability; the effects of the materials
Pacific (€36 billion) at just under 8 per- respectively. we use and the products themselves;
cent. where they come from and where they
Shoppers are looking for messages and
go when used. We are already address-
With the adoption of T2G, with its claims that talk to them on a personal
ing the post-use-life of diapers in some
emphasis on improving our processes level. The majority of our marketing
markets.
in the factory and in the office, and expenditure is now in digital.
its focus on driving commercial excel- The success of our additive and hypo-
Pages 30 and 31 provide further infor-
lence, we are confident that we will allergenic-free Feminine Care products
mation on our digital strategy and
be able to benefit from the favorable in the US, using very specific position-
investments in training and systems,
growth environment. ing and primarily working online, is also
both internal and external, to address
evidence of our ambitions.
the challenges and reap the potential
of this growing segment. Both examples will help inform our future
strategy and go beyond our promise to
turn our operations carbon neutral by
2030.

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UNDERLYING GROWTH
TRENDS RESHAPING OUR
INDUSTRY
Emerging markets drive growth
The demographics and the growing economic maturity of popula-
tions to spend money on hygiene products are generating market
growth.
“Local brands are proving more
successful than global ones, and
In recent years, we have grown with acquisitions in Mexico and Bra-
not just in our industry. Our work
zil and new plants in Pakistan and Ethiopia and are our now consol-
idating our presence in these regions.
with retailer brands identifies
consumer needs and expectations
Retailer brands strengthening position by region so that we can respond
in developed markets with suitable products. For example,
European retailer brands in our categories have grown their mar- baby diapers in the Americas have
ket share in Baby Care from 30 percent to 36 percent in the last more versions with perfumes than
five years. In the US, the equivalent figures are 26 percent and 28% diapers in Europe, which offer more
percent respectively3. The gap between the share of value continues ‘natural’ versions. T2G gives us the
to narrow between global and local brands. We expect the gap to
means to invest further in systems,
narrow further as retailers in other markets adopt this approach.
capabilities and training to research
Our position as the number one retailer brand partner across all our markets. This helps ensure that
categories in Europe is based on a broad and deep understanding
our propositions fulfil the needs for
of the success criteria in the retail world and close partnerships. Our
success in transferring the base model to markets like the US con-
local relevance and differentiation in
firms the strength of our offer. the most cost-effective way and that
we can benefit from the successes
Local and regional brands driving market of local brands.”
growth and winning share AURENT BONNARD, PRESIDENT, EUROPE
L
The shift towards local brands in Baby Care is intensifying as shop- DIVISION AND GROUP COMMERCIAL
pers look for value and retailers look to build their own reputations
(rather than those of others). Over the period 2014-2019, local/
regional brands were responsible for over 70 percent of market
growth4.

Our strategy focuses on acquiring, building and nurturing local LOCAL/REGIONAL BABY CARE BRANDS
brands, traditions and culture (see graph in right column). DRIVE OVER 70% OF MARKET GROWTH
OVER 2014-20193
Continued shift to baby pants
The shift from open diapers to pants continued across all markets
globally driven by the big brands to stimulate volumes and regain 30%
29%
competitive edge in what is a relatively flat baby care market. There 28%
28%
is still room for growth but declining birthrates, improved product 28%
27%
performance and (in some countries) economic barriers, open dia-
pers are declining and pants (once only seen as a product for older 73%
children and potty training) are growing fast driven by the big play- 72%
72%
ers and their ability to produce. 72%
71%
70%
We continued to expand our manufacturing capacity at our various
plants to meet the growing demand for baby pants.

2014 2015 2016 2017 2018 2019

1. F igures in this paragraph from Tissue and Hygiene in Euromonitor. Categories included for
Baby Care: “Nappies/Diapers/Pants”, for Femcare: “Sanitary Protection” and for Adult Care: the Share of retail value:
sum of “AFH Adult Incontinence”, “Rx/Reimbursement adult incontinence” and “Retail Adult
Incontinence”. Global brands 4 L ocal/regional brands 5
2. R
etail Tissue and Hygiene in Euromonitor. Categories included for Baby Care: “Nappies/Diapers/
Pants”, for Femcare: “Sanitary Protection” and for Adultcare: “Retail Adult Incontinence”.
3. Europe Nielsen Baby Pants, Europe Nielsen Baby Diapers.
4. N
appies/Diapers/Pants in Euromonitor. Global brands include: P&G, Kimberly Clark, Edgewell,
Unicharm, Johnson & Johnson and Essity. Local brands also include retailer brands.
5. It also includes Retailer Brands.

STRATEGIC REPORT 9
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

OUR STRATEGY
ONTEX’S GOAL TO DELIVER SUSTAINABLE PROFITABLE GROWTH RESTS ON A TWO-
PILLARED STRATEGY: STRENGTHEN CURRENT LEADERSHIP POSITIONS IN ITS THREE
DIVISIONS, AND EXPAND INTO NEW BUSINESSES AND GEOGRAPHIES IN CORE
CATEGORIES.

OPERATING
MODEL
Ontex offers locally relevant affordable personal
hygiene solutions, ensuring operational agility
and proximity to the markets. We continue to
leverage our scale and category expertise.

Industry consolidator Nurture hero brands

Uniquely positioned to drive Differentiated value
industry consolidation and proposition per market,
additional value for all our with brands that speak
stakeholders to local consumers

Smart choice
provider
Cost-efficient A unique selling High quality
operations & proposition focused brands, products
organization, smart on local relevance and services
investments and scale while managing its
build-up complexity
Margin
excellence focus
Margin Ontex
improvement
through additional
Operating
value and cost Model Best customer
excellence partner
High customer
focus to accelerate
joint growth
Operational agility
enabled by a
decentralized cross-
functional organization

Empowerment of Agile manufacturing &

local agile teams supply chain network
Strong local capabilities driving Flexible production with
relevant decisions closest in-house engineering
to each market

S Y
U
S T L I T
A I N A B I
10 ONTEX INTEGRATED ANNUAL REPORT 2019
INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

T2G
Our transformation plan T2G (Transform to
Grow) touches every part of our business,
reflected in the number and nature of the work
streams (see image below). Each will help accel-
erate our strategy. While we are adopting a step-
by-step approach to implementation, the scope
is holistic.

DELIVER SUSTAINABLE
PROFITABLE GROWTH

STRENGTHEN EXPAND INTO NEW

CURRENT BUSINESSES AND
LEADERSHIP GEOGRAPHIES
POSITIONS
North America:
Europe: Maintain Establish foothold
leadership in retailer with retailer brands
brands
Online: Grow share
AMEAA: Strengthen of online sales
local brands
and continue Acquisitions:
turnaround of Participate
Brazilian business in industry
consolidation
Healthcare:
Leverage scale and
expertise to increase
sales in self-pay and
services
HIGHLY ATTRACTIVE
MARKET
FUNDAMENTALS

STRATEGIC REPORT 11
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

DARE TO LEAD CHANGE.

DRIVE SUSTAINABLE
GROWTH. CREATE
SUSTAINABLE VALUE.
THE TRANSFORM TO GROW PROGRAM (T2G) WILL
HELP ACCELERATE EXECUTION OF OUR STRATEGIC
PRIORITIES AND CREATE A STRONGER AND MORE
PROFITABLE COMPANY DELIVERING SUSTAINABLE
GROWTH.

A
t the beginning of 2019, we T2G touches every part of our busi-
initiated Transform to Grow ness, reflected in the number and
(T2G), a comprehensive nature of the work streams. Each will
transformation program to help accelerate our strategy. While we
make us more competitive and return are adopting a step-by-step approach
us to sustainable growth. Thierry to implementation, the scope is holis-
Navarre, our Chief Operating Officer tic. In this way, the change becomes
with more than 13 years of experience wholesale, we minimize the risk of any
in the company, was appointed to the unforeseen knock-on effects, and the
new role of Chief Transformation Offi- company remains in balance.
cer to lead this critical program. Charles detailed planning, execution and follow
Bouaziz has assumed the current func- Planning to succeed up backed by a comprehensive gover-
tion of Thierry Navarre. nance system to raise any issues and
The first part of 2019 was dedicated
solve them quickly. In manufacturing,
In summary, we are planning to invest to building the plan, and detailing and
the engine of the company, we have
€130 million in T2G up to the end of structuring more than 2,000 initiatives
captured operations under one roof to
2021 and expect full pay-back by the to support the work stream ambi-
standardize procedures and accelerate
end of 2022. tions. We moved into implementation
synergies. We are also adopting new
just before the middle of the year.
models to increase shop-floor owner-
For sustainable change Although we will not see the full effect
ship and productivity, and in procure-
of our work until the end of 2021, we
T2G is not a quick-fix, one-off cost cut- ment, we are further leveraging our
are starting to deliver.
ting program. We are focused on sus- size using new tools.
tainable change. Neither does T2G In our research and development,
change our strategy. Rather it acceler- for example, we have modified our
ates strategic execution by addressing approach to clearly differentiate
every aspect of the company and the between our two main target audi-
way we operate. It has its own specific ences, retailers’ brands and Ontex’s
structure, dedicated people and specific own brands, which has allowed to
governance to ensure swift delivery. materially increase our speed to mar-
ket with innovations. In our commer-
cial work, we are focusing on more “The new company
structure recognizes the
needs of our different
customer bases–retailer
SUPPLY CHAIN MANUFACTURING
brands and Ontex’s
own brands–and by
carving out operations to
T2G PRODUCT
accelerate efficiencies, the
PROCUREMENT WORK
commercial Divisions can
INNOVATION
STREAMS now focus all their efforts
on staying close to the
COMMERCIAL PEOPLE & customers.”
(IN EACH OF THE ORGANIZATION / AURENT BONNARD, PRESIDENT,
L
3 DIVISIONS) CHANGE MANAGEMENT EUROPE DIVISION AND GROUP
COMMERCIAL

12 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

“The profile of our company has drastically changed in a

short period of time and the markets we work in likewise.
Originally retailer brands were our main business, now
they are half of it. We were mostly European focused, and
that has also changed with our entry into the Americas
and further expansion in Africa and the Middle East. And
competition is stiffening. While we had shown resilience,
and had started to adapt, we needed to accelerate the
pace of change. That’s where Transform to Grow came in.
It is renewing our commercial focus and our operational
competitiveness on all fronts, and accelerating execution of
our strategic priorities.”
THIERRY NAVARRE, CHIEF TRANSFORMATION OFFICER

THE AIM OF T2G IS TO BOOST OPERATIONAL

Capability building to
EFFICIENCY AND DRIVE COMMERCIAL EXCELLENCE
ensure success and OPERATIONAL EFFICIENCY Innovation relevance and speed:
sustainability Manufacturing excellence: boost build the right innovation roadmap
The success of T2G is dependent on strengths, leverage best practices and and adapt innovation process to end
our people. We recognise that T2G is a improve shop floor models customers’ specific expectations
challenge and that employee engage-
Supply chain optimization: upgrade WHAT ARE WE LOOKING
ment is key to success. We have intro-
transportation, warehousing and end- TO ACHIEVE?
duced further training and systems to
accelerate and expand capability and to-end planning Like-for-like revenue1 outperform-
support our people in their personal Strategic procurement: better lever- ing the markets in which we operate
and professional development as they
age scale, deploy new technology and by at least 50 basis points (bps)
adapt to the new environment. We are
tools, and target further cost reduction
also incentivising all levels of the orga- By end of 2021
in direct/indirect purchasing
nization appropriately. EBITDA margin improvement at con-
Product optimization: leverage the stant currency2 compared with 2018:
Getting back on track cross-functional Transformation Office +125bps to +175bps
T2G will enable us to accelerate exe- and the new governance to further ac- Working capital3 improvement com-
cution of our strategic priorities and celerate optimization of raw materials pared with 2018: 10 percent
create a stronger, more profitable com- usage and product concepts Capital expenditure: 4 to 5 percent
pany delivering growth, now and in the of revenue
long term. DRIVE COMMERCIAL Cash flow conversion: c. 55 to 65
EXCELLENCE
T2G will restore confidence in the com- percent
Category mix: increased focus on the
pany and enable us to resume our
high-growth product segments By end of 2022
plans for external growth and, in doing
so, create further value for all stake- Full return on investment expected
Customer value proposition: offer
holders. more differentiated value propositions
to customers through enhanced cat-
egory expertise, partnership relation-
ships as well as product and logistics
excellence

1. Like-for-like revenue is defined as revenue at constant currency excluding change in scope of consolidation or M&A.
2. Net of the impact of the application of IFRS 16 effective as of January 1, 2019.
3. On the basis of the 2018 reported working capital of €421 million, excluding factoring (inventories, trade receivables,
prepaid expenses and other receivables minus trade payables, accrued expenses and other payables).
4. Cash flow conversion is calculated as (Adj. EBITDA - Capex + Change in Working Capital)/Adj. EBITDA.

STRATEGIC REPORT 13
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

DARING TO PUSH
THE BOUNDARIES
ONTEX’S SUSTAINABILITY STRATEGY SETS AMBITIONS FOR 2030. IT
DEFINES A COMMON SUSTAINABILITY AGENDA BASED ON CIRCULAR
ECONOMY THINKING1 AND SETS GOALS FOR ALL PARTS OF OUR
COMPANY INCLUDING THE VALUE CHAIN. WE BELIEVE THAT THE NEW
SUSTAINABILITY STRATEGY WILL HELP US TO CONTRIBUTE STRONGLY TO
THE ACHIEVEMENT OF THE UN’S SUSTAINABLE DEVELOPMENT GOALS.

THE NEW SUSTAINABILITY

STRATEGY SETS AMBITIONS
FOR 2030.

“Big change requires

an element of daring
and the courage to
aim high. So, if we
want to make a real
change, we have
to be bold, push
the boundaries.
And not be afraid
to fail. With our
new sustainability
strategy, we
challenge ourselves.
We may not have all
the solutions yet but
believe it’s the right
and only way to go.”
NNICK DE POORTER,
A
EXECUTIVE VICE
PRESIDENT, R&D, QUALITY
AND SUSTAINABILITY

14 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Our focus areas

We identified four main focus areas
and set out what we aim to achieve in
each of them:

W
1. Building trust: our ambition is to
e articulated our first for-
enhance transparency, and lead the
mal sustainability strat-
way to a fair society.
egy in 2016. It included
goals to reduce the 2. Circular solutions: our ambition is
impact of our production sites, man- to move towards a circular business
age our value chain and reduce any model.
environmental effect our products may
have. 3. Climate action: our ambition is to
have climate neutral operations by
We updated our sustainability strategy 2030.
in 2019 to ensure that it remains rele-
vant and that we, as an ambitious and 4. Sustainable supply chain: our
growing business, continue to make a ambition is to create a positive
impact in our supply chain and Open and still learning
positive difference for the planet and
all the elements in our value chain. regenerate natural resources. We will go beyond setting commit-
ments and will be open about our suc-
As a starting point, we used our vision These four areas form the basis of our
cesses and failures and the challenges
and values, which state the need for us strategy, and are all interconnected. For
we face along the way. We don’t have
to act in a socially responsible way. We example, working on circular solutions
all the answers yet, and we will join
feel that this is more important than will have an impact on climate change
forces with others to be part of a wider
ever in times of climate change, pres- or tackling human rights issues in our
conversation to find new solutions.
sure on natural resources and inequal- value chain and will increase trust in us
ities in our society. as a brand and as an employer.

Developing the strategy

We have made significant progress
since 2016. But we need to dare to go The UN’s Sustainability Development Goals (SDGs) and the 2030
further. Agenda for Sustainable Development call on governments,
The new sustainability strategy sets business and civil society to take action to address social and
ambitions for 2030. It defines a com- economic challenges. We believe this collaborative approach is
mon sustainability agenda based on essential and, as you can see here, our sustainability strategy
circular economy thinking1 and sets aligns well with the SDGs.
goals for all parts of our company
including the value chain. We believe
that the new sustainability strategy will
help us to contribute strongly to the
achievement of the UN’s Sustainable
Building Circular
Development Goals. trust solutions

Close cooperation
We worked closely with our stakehold-
ers across our value chain and beyond
to develop the strategy. Their input
and advice were invaluable as was the
challenge to stretch ourselves. The
consultations helped us map and pri-
oritize challenges, and identified how
and where we can have the greatest
impact. Read more about stakeholder Climate Sustainable
engagement on page 16. action supply chain

1. A
circular economy is an economic system aimed at eliminating waste and the continual use of resources.

STRATEGIC REPORT 15
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

STAKEHOLDER
ENGAGEMENT
S
AS A PUBLICLY LISTED COMPANY, takeholder engagement concerns all levels
ONTEX HAS A WIDE RANGE OF of the business (international, divisional
and local) but most of our work focuses on
STAKEHOLDERS WHO ARE AFFECTED
the local level. We require all our sites to
BY OR INFLUENCE OUR DAY TO identify their respective stakeholders and estab-
DAY BUSINESS. A TABLE ON PAGE lish the best ways of engaging with them. In many
149 SHOWS THE KEY TOPICS, OUR cases, such as dialogue with customers and sup-
RESPONSES AND HOW WE ENGAGE. pliers, the stakeholder relationships are primarily
THE RELATIONSHIP THAT WE FOSTER managed by the departments themselves.
WITH THESE STAKEHOLDERS AND THE The executive committee receives feedback from
WAY WE MANAGE THEIR VARYING stakeholders directly from visits to customers and
NEEDS AND EXPECTATIONS HAVE A suppliers, as well as employee and investor meet-
DIRECT IMPACT ON OUR SUCCESS. ings. They also get information from Divisions,
departments or workers’ representatives during
their regular briefings by senior management.
Other forms of input include periodic employee
survey results.

STAKEHOLDER ENGAGEMENT CONCERNS

ALL LEVELS OF THE BUSINESS (GLOBAL,
COUNTRY AND LOCAL) BUT MOST OF OUR
WORK FOCUSES ON THE LOCAL LEVEL.

16 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

CONSUMER
PANEL ALGERIA.

We actively participate in various industry asso-

ciations. This enables us to engage with policy
makers and contribute to a better understand-
ing of industry-related issues. These associations
are also important platforms for us to contribute
to broader, industry-wide action on sustainable
development. (For details about the organizations
see page 155.)
On a less formal level, members of our manage-
ment team are often called upon to participate Listening to consumers
in public forums to discuss our business strategy Listening is key to the long-term success of our
and approach to sustainability. Events like this company. In November, 100 students with var-
provide an opportunity to interact with various ious academic backgrounds (civil engineering,
groups including business leaders, academics, bio-engineering, economic science and more)
other companies and society as a whole. were given the task to develop a circular business
model for Ontex focusing especially on emerging
Rewarding suppliers markets. They presented their findings and ideas
to a jury of Belgium-based academics and Ontex
Suppliers play a vital role in our efforts to create
employees.
value, deliver quality, and drive innovation. We
want to acknowledge their contribution and every We regularly consult panels of our consumers on
18 months we officially recognize outstanding five continents, like a recent panel in Algeria (pic-
performance of our suppliers with our supplier of tured above).
the year award. In 2019, it went to a leading global
adhesive specialist.

Co-creating with employees

Our sustainability goals were set to expire in 2020.
We needed to develop a new set of goals to build
on the progress made. As a sustainable future is
everybody’s concern and climate change is very
much linked with carbon emissions, in November
2019, we asked representatives from across our
functions to help develop our roadmap towards
carbon neutrality.
WE RECOGNIZE OUTSTANDING
At a co-creation session, facilitated by an external PERFORMANCE OF OUR SUPPLIERS
consultant, we considered the status of climate WITH OUR SUPPLIER OF THE YEAR
AWARD.
change, the impact our business has, the trends
and regulatory changes such as carbon taxes and
their effects, and discussed possible ways for-
ward. The results of the deliberations helped set
the base for our new carbon-related goals (see
page 45) which will be key to a sustainable future
for us and our planet.

CO-CREATING OUR NEW

CARBON-RELATED GOALS.

STRATEGIC REPORT 17
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

OUR KEY
PERFORMANCE
INDICATORS

LIKE-FOR-LIKE REVENUE GROWTH1 (%) BALANCED PORTFOLIO

5.5

1. BRANDS (%)
Grow balance in own
brands vs. retailer
52

54

53

brands in terms of
1.7

Outperform the business

markets we chose
to play in
-1.0

47
48

46

etailer brands
R
2017 2018 2019 READ MORE ON PAGE 48-49 2017 2018 2019 ntex brands
O

1. Like-for-like revenue is defined as revenue at constant currency

excluding change in scope of consolidation or M&A. 2. GEOGRAPHIES (%)
Grow further outside
13 13

12 14
13 14

Western Europe
29
27

27

est of the world

R
astern Europe
E
45
46

47

mericas
A
ADJUSTED EBITDA MARGIN (%) 2017 2018 2019 estern Europe
W
11.4

10.7

3. CATEGORIES (%)
10.2

30 1

30 1

Grow our three prod-

29

uct categories
Expand profit
10
9

margin over time

ther
O
2017 2018 2019 READ MORE ON PAGE 48-49
dult Care
A
59
61

59

eminine Care
F
2017 2018 2019 aby Care
B

18 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

CARBON INTENSITY RATIO

FEMALE MANAGEMENT (%) (gCO2/€) (SCOPE 1-2)

27

32.0
26

29.3

26.6
21

Be an inclusive and Aim to be carbon

diverse capabilities- neutral by 2030
driven employer
2017 2018 2019 2017 2018 2019 READ MORE ON PAGE 44

HEALTHY AND SAFE WORKING

CAPEX SPENDING (% NET SALES) CONDITIONS2 (FREQUENCY RATE)
4.8

4.6
4.5

14.39
Remain efficient Continue to decrease
in capex spending the number of acci-

9.16

5.86
in the personal dents towards a vision
hygiene industry of zero accidents
2017 2018 2019 READ MORE ON PAGE 107 2017 2018 2019 READ MORE ON PAGE 36

2. T
he number of labor accidents per million worked hours.

NURTURE LOCAL BRANDS

Build sustainable leading positions in

our core categories and countries
READ MORE ON PAGE 8

STRATEGIC REPORT 19
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

OUR DIVISIONAL
STRUCTURE
2019 REVENUE - €M PERCENTAGE
PER DIVISION OF GROUP

Europe 956.9 42%

Americas, Middle East, 891.9 39%
Africa and Asia
Healthcare 432.5 19%
Ontex Group 2,281.3 100% AMERICAS,
MIDDLE EAST,
AFRICA AND ASIA
After careful reflection on how far we have come in
terms of re-shaping our portfolio of geographies and
DIVISION
balance of retailer and own brands, effective as from The AMEAA Division pre-
January 2019, we have revamped our organization in dominantly focuses on local
order to better leverage our strengths and improve hero brands. Sales and mar-
execution. Our commercial activities are now orga-
keting activities are split into
nized in three Divisions: Europe, which is predomi-
four geographical areas:
nantly focused on retailer brands; Americas, Middle
East Africa and Asia (AMEAA), which is predominantly North America
focused on local brands; and Healthcare which con- exico and Central
M
tinues to focus on the institutional markets and ded- America
icated incontinence brands.
“At Ontex AMEAA South America
In addition, Group Manufacturing and Supply Chain
have been regrouped into a newly-created Opera- Division we provide MEAA (Middle East, Africa
& Asia)
tions unit, with a focus on production efficiency and personal hygiene
customer service excellence. products and
solutions that
make it easier for
families to embrace
life’s many
changes. We do
it by encouraging
a happy and
optimistic work
€891.9M
Revenue
environment
that will make
us successful in
providing smart
choices for our
consumers and
customers.”
RMANDO AMSELEM,
A
PRESIDENT AMEAA
DIVISION

20 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

€432.5M HEALTHCARE
DIVISION
Revenue
The Healthcare Division
continues to focus on the
institutional markets and
dedicated incontinence
brands.
Marketing is organized on a
divisional level, with dedicat-
ed support at area level.
“We never forget The sales activities are split
that our business into two geographical areas.
is contributing rea North: France & Be-
A
to the quality of lux, Germany, UK & Ireland
life and dignity and distributors
of the end users rea South: Italy and
A
Iberia.
of our products
and services,
providing them
EUROPE DIVISION with innovative
products and
The Europe Division is pre-
smart solutions
dominantly retailer brand
focused. It comprises three
at affordable
geographical areas: prices.”
rea North: UK/Ireland,
A XAVIER LAMBRECHT,
Australia/New Zealand, PRESIDENT
Belgium/Netherlands/ “When customers HEALTHCARE DIVISION
Nordics. Contract Manu- need help
facturing also reports into to design,
this area. manufacture and
rea South: France and
A market hygiene
Iberia, Italy & Greece
products sold
rea East: Russia & CIS,
A
under their
DACH, Poland, and CEE.
brands, they
turn to Ontex, as
€956.9M they recognize
Revenue
and value our
innovation
capabilities,
responsiveness,
superior service
levels and
dedication.”
AURENT BONNARD,
L
PRESIDENT EUROPE
DIVISION

STRATEGIC REPORT 21
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

THE ENGINE
OF GROWTH
AMEAA
THE AMEAA DIVISION SERVES THE ATTRACTIVE GROWTH MARKETS OF THE AMERICAS,
MIDDLE EAST, AFRICA AND ASIA. THE DIVISION IS PREDOMINANTLY FOCUSED ON ONTEX’S
OWN BRANDS BUT HAS A GROWING RETAILER BRAND BUSINESS IN THE US. THE TOP-LIGHT
ORGANIZATION RELIES ON THE AGILITY AND ENTREPRENEURSHIP OF LOCAL TEAMS.

Performance Revenue increased 6.7 percent, and light Adult Care products.
well ahead of the market, based Solid consumer demand for our
2019 was a good year for the
on solid commercial execution, own brands in Mexico (a declin-
AMEAA Division as a whole
distribution gains and a series ing market) also drove revenue
as we skilfully managed our
of innovations to support our growth.
portfolio mix to leverage the
product platforms.
strong local brands in emerg- In Brazil, we stabilized the base
ing markets and the retailer Sales increased in all three cate- and are pleased with the prog-
brand opportunity in the US. gories and most regions, driven ress and the improvement in
The introduction of a new orga- by increased volumes as well sell out. We consolidated two ONTEX IS WELL
nization at the start of the year as an improvement in price/ plants into one, streamlined KNOWN IN
PAKISTAN FOR
ensures that we remain close to mix. Baby diapers continued to the organization, and optimized ITS CANBEBE
the market, an essential aspect grow well, as did the medium product specifications. We also DIAPERS. IN 2019,
when dealing with local brands. extended distribution into new WE LAUNCHED
SINCERE,
regions of this vast country. OUR LATEST
FEMININE CARE
Revenue in the Middle East, BRAND THERE.
BABY DIAPERS CONTINUED Africa and Asia also grew THE SANITARY
TO GROW WELL, AS DID THE NAPKINS WITH
MEDIUM AND LIGHT ADULT despite a challenging political
THEIR ACTIVE
CARE PRODUCTS. and economic environment in FRESH SYSTEM
some markets. It was encourag- AND DELICATE
ing to see the market in Turkey SILK TOUCH
ARE DESIGNED
recovering.
TO GUARANTEE
TOTAL
While there were many product PROTECTION.
successes in our markets, three
stand out. We relaunched the
Pom Pom baby diaper brand
in Brazil. The pricing strategy
clearly signalled innovation
and, judging by sales, consum-
ers were very appreciative of
the new product features that
included a thinner core, chan-
nels and elastic ‘ears’. Also in
Brazil, we successfully launched
adult pants. And in Mexico, we POM POM IS A
launched a new Kiddies brand LEADING BRAND
OF DIAPERS IN
diaper pant that proved popu- BRAZIL. IT IS THIN
lar with consumers. AND FEATURES
TECHNOLOGY
THAT IMPROVES
LIQUID
DISTRIBUTION
AND SPEEDS UP
US$ 145 million ABSORPTION.
Lifestyle diapers sales have
tripled in the last five years
to around US$ 145 million.
We are present in this niche
market with a number of
diaper products.

22 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Strategy
The main part of our strategy is to
nurture local brands in various mar-
kets. Our goal is to drive baby diapers
ORGANIC COTTON adoption in key markets, improve dis-
TAMPONS
CONTINUE tribution channels, and upgrade our
TO GROW. WE products with locally relevant innova-
ARE WORLD tion. We will build on our leadership in
LEADERS IN THE
DEVELOPMENT OF
Adult Care products, shifting the focus
THESE PRODUCTS towards light Incontinence and adult
THAT TARGET THE pants.
ECO CONSCIOUS
CONSUMER.
Market overview
The AMEAA region is a massive market.
Maturity differs widely, as do the needs.
Our range of products and models
have proven attractive enough to gain
share in markets that are slowing (such
as the US and Mexico) and to capture
growth in developing segments (such
as adult incontinence) and emerging
IN THE US, ECO
RETAILER BRANDS
markets, for example, North Africa.
ACCOUNT FOR There are many markets in which we
A DOUBLE DIGIT are not present today. We have a well-
PART OF RETAILER grounded plan for future growth and OUR RANGE OF PRODUCTS
BRAND SALES AND MODELS HAVE PROVEN
FOR LEADING are focused on capturing our share of
ATTRACTIVE ENOUGH TO
RETAILERS. the potential. GAIN SHARE IN MARKETS
THAT ARE SLOWING.
Outlook
AMEAA continues to be a challenging
yet rewarding market. Our strengths
lie not just in product design and man-
ufacturing but managing complexity.
That’s why our resources are located
in the various end-markets. We see
further growth potential in building
WHILE MOST brands that are relevant to a specific
OF OUR MEAA country or region, adapting the prod-
MARKETS ARE
STILL DEVELOPING uct platform to ensure relevance, and
THEIR RETAIL AND then communicating with a special
DISTRIBUTION target audience in mind. At the same
MODELS, IN
time, the retailer brand opportunity
COUNTRIES LIKE
SOUTH KOREA in the US is substantial. Working with
THE LARGE the top name in retailing has given us
MAJORITY OF much more visibility and experience
BABY CARE
PRODUCTS ARE from which we should benefit. “Our market
SOLD ONLINE.
WE ARE ALREADY
approach is tailored
SUPPLYING ONE to meet consumer
OF THE MARKET
LEADERS IN needs. In emerging
THIS VIBRANT markets our efforts
SEGMENT.
are channeled into
strengthening local
Ontex brands, while
in the US we focus
mainly on retailer and
lifestyle brands.”
RMANDO AMSELEM,
A
PRESIDENT AMEAA
DIVISION

STRATEGIC REPORT 23
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

REVITALIZING EUROPE
IMPROVING SALES TRENDS IN THE SECOND HALF OF 2019

AS THE LEADING SUPPLIER OF RETAILER BRANDS IN EUROPE, WE SUPPORT OUR CUSTOMERS IN

SUCCESSFULLY GROWING THEIR CATEGORIES THROUGH A COMBINATION OF PRODUCT INNOVA-
TION AND A BROAD OFFERING OF COMMERCIAL EXPERTISE.

Performance
The non-renewal of major contracts The primary task was to make sure that nize our functions and thereby run an
in 2018 was reflected in our divisional we had the right capabilities among effective supply chain management.
results for 2019. The improved sales our people to partner with our retailer The new S&OP affords us excellent vis-
trends in the second half of the year, customers. In some important mar- ibility on future demand and ensures
however, indicate that the measures kets, we brought in completely new that we can provide the right innova-
that we took, and are taking, to improve line-ups. The Ontex Europe Division tion, in the right place, at the right time.
execution and organic revenue growth now have a highly talented, multifunc-
The opening of the new plant in
in our large customer base are starting tional team with the right leadership in
Radomsko, Poland helps us better
to take effect, underpinning our expec- all areas to engage retailers and help
serve the major retailers in central
tations for the future. Feedback from them grow their business in all three
and eastern Europe. It allows us to act
categories of personal hygiene. The job
the retailers has been extremely posi- quickly to their needs and generally
they have done is extraordinary, and
tive. improve the execution in the supply
this is reflected in our progress during
chain.
The benchmark of our performance the year.
against key customer criteria carried
When you work with retailers it is
out as part of preparations for T2G
essential to get the basics right and
confirmed many opportunities to fix the key business drivers – the right
return to growth. The series of mea- product with the right amount of inno-
sures and commercial initiatives imple- vation at the right price and the right
mented turned the year into one of supply. We made a step change in our
reconstruction in what was, after all, a sales and operations planning (S&OP)
new division. processes to focus, align and synchro-

THE OPENING OF THE NEW PLANT IN

RADOMSKO, POLAND HELPS US BETTER
SERVE THE MAJOR RETAILERS IN
CENTRAL AND EASTERN EUROPE.

24 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

RADOMSKO PLANT OPENING

The newly built Radomsko plant fits in Ontex’s ambition
to expand its international presence and will allow the
company to better serve the eastern European market.

The first production line of the Radomsko site was

officially opened in February 2019 at an event attended
by local media and partners. Construction of the facility
began back in 2017, with an entire investment estimat-
ed at €16 million. The 26,000 sqm factory was built on a
“Our priority in 2019 was to 110,000 sqm site.
rebuild the trust with retailers “We are very proud to extend our production capacity
we once enjoyed so that we in Poland, which is testimony to our strong commitment
could grow our businesses to the eastern European market,” said CEO of Ontex,
together. That is the very Charles Bouaziz.
essence of our business Ontex had been serving Poland by importing products
model. Judging by the results from the Czech Republic. The swift development of the
we are on the right track but Polish market and its advantageous location drove the
there is still some way to go.” decision to set up a local facility, CEO Charles Bouaziz
LAURENT BONNARD, explained: “At Ontex, we strongly believe in a local mar-
PRESIDENT EUROPE DIVISION ket approach, with manufacturing plants which are stra-
tegically located to allow us to respond efficiently and
flexibly to consumers and customers’ needs. The new
production facility in Radomsko will help us better serve
our expanding retailer customer base in the region.”

ECOLOGICAL
OR NATURAL
PRODUCTS
ACCOUNT FOR
ABOUT 1% (€44 M)
OF EUROPEAN Strategy Outlook
BABY CARE, A Our strategy is to develop broad- Forty years ago, Ontex started as a
DOUBLING OF
LAST YEAR’S based and in-depth partnerships with small retailer brand business. Today,
FIGURE. our retailer customers so that we can the Europe Division is approaching
be their smart-choice provider and €1 billion in sales and accounts for more
strengthen our leadership position. than 50 percent of group revenue. The
The partnership will add value to busi- story confirms the attractiveness and
ness planning, category management, potential of the business provided you
shopper behavior, innovation, brand manage to skillfully orchestrate all the
building, e-commerce and other areas constituent parts, which is what we
to help drive growth in their catego- have focused on this year.
ries and own brands in a multi-channel
The 40 years are testimony to the
landscape.
resilience of the Division, its business
model and its people. A clear strategy
BABY PANTS Market overview with very few choices, an entrepre-
CONTINUE TO Retailer brands in general in Europe neurial mindset, good leadership and
GROW IN EUROPE.
are growing and taking market share. ‘trust in the local’, have all contributed.
In Baby Care specifically, they contin- We look forward to retailer brands con-
ued to gain volume share in a declining tinuing to grow worldwide.
market.
The pressure in the baby care market
remains relentless, led by the deep
promotions and innovation of the big
brands and the aggressive stance of
some smaller competitors looking to
scale up their operations. We have the
capabilities, scale and speed to serve
this market competitively.

STRATEGIC REPORT 25
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

SOLID PERFORMANCE
BASED ON TRUST AND
CONFIDENCE
HEALTHCARE
OUR RANGE OF PRODUCTS FOR ADULT CARE INCLUDES PADS, PANTS, ADULT DIAPERS AND UN-
DERPADS. EACH IS DESIGNED AND MADE WITH DISCRETION, PROTECTION AND DIGNITY IN MIND.
THEY ARE SOLD THROUGH INSTITUTIONS AS WELL AS DIRECTLY THROUGH SELF-PAY CHANNELS.

Performance We introduced a Marketing & Ser-

vices cluster to concentrate on e-com-
2019 was another motivating year for
the Healthcare Division. Organization- merce and services as well as product
ally, we split our business into two development. With the new working
distinct geographic segments, north environment, we aim to maximize the
and south Europe. This helped us to knowledge of our people and continue
better accommodate the different cus- to build future capability in important
tomer bases and different brands (iD in areas such as revenue and category
the north and Serenity in the south). It
also speeded up decision making and
management as well as shopper expe-
riences as the self-pay channel grows.
Online
ensures we have the resources where opportunity
we need them. Divisional revenue remained flat at
A small share of our
€432.5, as predicted, in a market largely Healthcare sales is online
declining in value, and raw material at present, but the discreet
costs remained high. We had positive nature of this channel means
that it is growing fast and we
developments in most of our markets continue to invest strongly in
and were able to pass on some costs this area.
through pricing.

We maintained a disciplined approach

in the aggressive pricing environment
PRODUCT OF THE YEAR of institutional channels and had to
deal with a number of major contract
Research shows that bladder control issues in reversals. Encouragingly, in self-pay
children and teenagers have an important impact channels, the market continued to
on their psychological well-being. Our iD Comfy show confidence and trust in our prod-
Junior offers a discreet and comfortable solution ucts. Sales in France, Spain and Italy
for night and daytime wetting and is aimed at with our own as well as some distrib- iD INTIME IS OUR NEW
children between 4 and 15 years old. It was voted utor brands were robust, while in Ger- AWARD-WINNING RANGE
OF DISCREET PROTECTION
‘Product of the Year 2019’ by Belgian consumers. many we enjoyed success with home UNDERWEAR FOR WOMEN
delivery models and some key part- DESIGNED TO MANAGE
In the absence of a dedicated range for children MODERATE URINARY
ners. INCONTINENCE. THE PANTS
with bladder control issues, parents had to rely
LOOK AND FEEL LIKE REAL
on baby diapers or Adult Care products for their UNDERWEAR THANKS TO THE
children. With iD Comfy Junior, we offer a com- SUPER SOFT WAISTBAND,
AND THEY SHAPE LIKE
plete solution to help children and their parents NORMAL UNDERWEAR.
manage these issues. It allows children to regain
confidence and continue their active lives in a
dignified, discreet and comfortable way.

The award reconfirms the trust placed in our

products by consumers – the trust that drives us
to continually deliver high quality solutions.

26 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

“Institutions
continue to be our
main customers
but the retail
self-pay market is
growing significantly
as are digital
channels, both
from small bases.
Our business
model, products,
and innovation
pipeline are geared
to meet all the
THE MARKET IN WHICH WE OPERATE
IS GOING THROUGH DEEP CHANGE:
market trends.”
FROM REIMBURSEMENT TO SELF- AVIER LAMBRECHT,
X
PAY; FROM PUBLIC INSTITUTIONS
TO PRIVATE ORGANIZATIONS; PRESIDENT OF
FROM AWAY-FROM-HOME TO AT- HEALTHCARE DIVISION
HOME CARE AND FROM A FOCUS
ON PRODUCTS TO PRODUCTS AND
RELEVANT SERVICES. and care management so that we can
provide a comprehensive offer for this
type of customer. We will use our expe-
rience with institutions to invest in the
In Australia, we changed strategy to
increase our focus on home care, and attractive, higher margin and growing Private
in Spain, Portugal, Poland, US and Can- self-pay market. care
ada our good relationships with dis- homes
tributors helped develop various chan- Market overview We are starting
nels. In the UK, we reversed a declining to become a
The market in which we operate is
trend and won a significant contract significant player
going through deep change: from in the private care
with a major nursing home group,
reimbursement to self-pay; from pub- home segment.
while in Belgium we retained one of the The homes are
lic institutions to private organizations;
major accounts in addition to winning not just attracted
from away-from-home to at-home
new business. All these examples pro- by our product
care; and from a focus on products to properties but by
vide us with sustainable and profitable
products and relevant services. Parallel the whole concept
paths to growth, and fit exactly with we offer including
with this is the increase in the signifi-
our strategy. training and digital
cance of digitalization in all areas of our tools to help
We continued to optimize products business. In addition, the taboo around optimize the way
based on circular economy thinking. incontinence is diminishing they look after
their own clients.
We are conscious of the need to look
at the whole life cycle up to disposal. Outlook
We carried out a significant number
The institutional market still constitutes
of trials in institutions with Odobin,
the base of our sales but we see great
our closed odorless disposal system
potential in the trends that are shaping
for Adult Care products. We secured a
our business. Budget restrictions in
number of contracts and we see a lot
reimbursement systems are set to con-
more potential in this area.
tinue and will push patients to look for
options in the self-pay market. Sustain-
Strategy ability is now a given in our business
The institutional segment provides and the increase in digital is requiring
the base of our business and we are different capabilities and more agility.
conscious of the need to maintain our As a leading supplier in the Adult Care
position. We also offer a range of ancil- field we are more than prepared for
lary services such as waste handling these shifts.

STRATEGIC REPORT 27
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

RIGOR AND
DISCIPLINE
OPERATIONS
TO BE EFFECTIVE, WE PRODUCE OUR GOODS AS CLOSE TO OUR CUSTOMERS AS POSSIBLE. THIS
MINIMIZES TRANSPORTATION COSTS AND ENVIRONMENTAL IMPACTS. WE FOCUS RIGOROUSLY
ON THE ELEMENTS THAT ENABLE US TO OPERATE PREDICTABLY AND AT HIGH LEVELS OF
EFFICIENCY.

T
he restructuring of the organization at processes and eliminate losses. In those plants
the start of 2019 established a single where we have been implementing change, pro-
centralized operations unit to flawlessly duction efficiency measured in uptime, runtime
integrate manufacturing excellence and efficiency and quality has improved significantly.
supply chain. As part of this, we hired an execu- We have instigated training programs in other
tive vice-president of operations, Axel Loebel (see plants to re-apply and roll out the practices.
page 61), who brings more than 25 years of oper-
ations experience, most of them in diaper manu- Transform to grow
facturing but also in supply chain.
The introduction of the T2G program provides a
framework for our planned actions. It has also
Production and capability building helped to strengthen the links between our net-
The year has focused on both production line work of 18 plants. We have transformation man-
improvements and strengthening our capabilities. agers in place and we see good potential for even
One of the fundamental capabilities to grow is more technology sharing and transfer between
safety. (See page side story.) plants, which will help us become more efficient.
T2G has also enabled us to hire and assign exter-
We established a new manufacturing excellence
nal people with a deep knowledge of lean man-
team to document and share best practices and
ufacturing capabilities to take the organization to
establish a system of agreed production standards
the next level.
at a pilot plant and further rollout to all 18 manu-
facturing sites. We are already seeing the impact
of the actions taken in the improved efficiency.
We strengthened our capabilities in preventive
maintenance and root cause analysis. We also
strengthened our management methods so that
we are able to control and continually improve our

WIN WIN
The rise in demand for our Feminine Care products
was putting pressure on our plant in Großpostwitz,
Germany, which is dedicated to tampon production.
The difficulty was finding local skilled people to run
the lines. Our plant in Mayen, Germany is one of
our largest plants and is a significant and stable
economic factor in the local region. It was not at full
capacity and had no tampon production. The solu-
tion? Relocate the Großpostwitz tampon production
to Mayen. Ten lines were transferred to the plant
and production started up in December. The switch
BY ELECTING TO RUN OUR LINES ON ensured continued supply for our customers and
TARGET SETTINGS WE HAVE REDUCED
THE AMOUNT OF STOPS AND THE enhanced the co-operation between our plants. A
RELATED START/ STOP SCRAP. very positive outcome for all.

28 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Engagement
Increased ownership of a process SAFETY IMPROVEMENTS
has shown itself to be a sound way of
engaging people and improving perfor- Clarity, rigor and discipline permeate all we do in
mance. During the year, we deployed safety. The expectations from the leadership are
an autonomous manufacturing unit unequivocal, and those expectations are cascad-
(AMU) model in one of our factories ed through the manufacturing vice presidents to
with a view to extending it to other pro- the plants and followed up.
duction units.
We saw a significant improvement on last year in
AMU effectively hands ownership of
both frequency and severity rates. For example,
the line to the operators and we are
already seeing a concomitant improve- Karachi in Pakistan passed the two-year mark
ment in the engagement and actions without having an incident and Ontex Engineering
at the plants. Already implemented in (Germany), went more than one year. We also saw
four sites, we will roll AMU out to other good results in Brazil.
plants using a team of coaches to lead
The improvement stems from our focus on driv-
the transformation, train the people in
new working methods, and implement ing the right behavior at work, not relying on the
the systems to monitor progress. provision of physical guards. If our people are fully
aware of the dangers that machinery poses, then
Scrap reduction that is half the battle won. The guarding aspect is
“Manufacturing an important back-up but should only come into
personal hygiene The greatest gains are to be found in
play if behavior fails. We have implemented a very
the reduction of scrap (optimization of
products is all about materials) in the manufacturing pro- clear ‘lock out, take out’ strategy this year so that
rigor, discipline, cess. By electing to run our lines on nobody can enter a line without locking out the
and following target settings we have reduced the power.
standards. Our vision amount of stops and the related start/
stop scrap. Our plants have made good
is to operate like a progress and our aim is to keep on
cost-efficient Swiss improving.
clock–predictable
and always on time. Improving service
This relates to both We analyzed where finished goods are
operations and manufactured to improve customer
maintenance. The service and reduce cost of transport
and our environmental impact (cost-
production lines are to-serve). Our data-based reallocation
operating according work is having the desired effect to opti-
to defined targets mize our global footprint to improve
and standards. We this indicator. At the same time, we are
optimizing truck utilization, for exam-
have optimized ple, compressing our products to get
those standards and more per pallet without jeopardizing
introduced actions quality and performance.
during the year to
further embed the Intelligent solutions
singular mindset you One highlight of our digital journey
during 2019, was the successful trial
see in a Formula 1
of artificial intelligence (AI) to predict
pit crew in our own potential failures in the production
operating teams line. The data captured will help to
to minimize the reduce line stoppage. It will also add
downtime of the predictability, reduce maintenance and
downtime, and cut costs.
line. We are already
seeing the benefits in
longer running times INCREASED OWNERSHIP
OF A PROCESS HAS SHOWN
and scrap reduction.” ITSELF TO BE A SOUND WAY
OF ENGAGING PEOPLE AND
XEL LOEBEL,
A IMPROVING PERFORMANCE.
EXECUTIVE VICE
PRESIDENT OPERATIONS

STRATEGIC REPORT 29
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

DIGITALIZATION
AND INNOVATION
GETTING UP TO SPEED
MODERN DAY BUSINESS IS NOT SO MUCH DEPENDENT ON SIZE BUT SPEED. IN 2018, WE STARTED
OUR DIGITAL TRANSFORMATION TO ADD AGILITY AND SWIFTNESS TO PROCESSES ACROSS ALL OF
OUR BUSINESSES AND FUNCTIONS. DURING 2019, E-COMMERCE CONTINUED TO GROW ITS SHARE
OF SALES IN OUR CATEGORIES AND WE CONTINUED TO INVEST IN DIGITAL SYSTEMS AND COM-
PETENCIES TO OPEN UP NEW GROWTH OPPORTUNITIES. NOW, MORE THAN ONE THIRD OF OUR
MARKETING EXPENDITURE HAS SHIFTED TOWARDS DIGITAL MEDIA.

Four areas of external focus helping retailers maximize the online the brand further developed to include
potential of their own brands. new products, including baby pants.
The digital route to market has many
advantages–convenient and low-cost Direct-to-consumer Market places
access, a heightened sense of engage- We work closely with direct-to-con- The fourth leg of our digital strategy
ment and not least, discretion, an sumer brands and are today a leading focuses on pure-play, online mar-
important consideration for some of manufacturer of third-party brands ketplaces. We adopt a step-by-step
our product categories. across our three categories Baby Care, approach. Our partnership in Mexico
Adult care and Feminine care. Often with a multinational marketplace, for
We have a dedicated management
very specific and purpose-centric, example, has proven a good motor
team with specialized competencies to
these types of company are experts at for our growth there, and in China our
run our commercial digital activities.
connecting with their customers, often Feminine Care products are all sold on
They focus on four areas: retailers, through ecological, organic lifestyle the country’s main platform.
direct-to-consumer brands, subscrip- branding. We provide category exper-
tion models and online marketplaces. tise and suitable products to co-de- Internal focus on processes
velop new value propositions.
Retailers and operations
Leading retailers continue to empha- Subscription Digital is having a positive effect on our
size the importance of their own We continued to extend the subscrip- processes and operations. In 2019, for
brands in their e-commerce channels. tion model which we started with Lit- example, we introduced digital systems
Our retailer experience positions us tle Big Change diapers in France. The and training to help operators under-
uniquely to support their growth plans. success has now been rolled out to stand their lines better and enable
The addition of e-commerce expertise the neighboring countries Belgium, them to make on-the-floor decisions.
to key account management teams is Luxembourg and the Netherlands and The extra layer of intelligence increases

IN TOUCH WITH ONLINE

Online purchase of hygiene products is a global
trend, with China and the US leading the way.

The percentage of hygiene products sold online

globally, across the Adult Care, Baby Care and
Feminine Care categories, increased from 6.6 to
13.3 percent between 2014 and 2019. For exam-
ple, there were €106M incremental Baby Care
sales through e-commerce in ’19 v. ‘18, €45M in
feminine care and 112M in Adult Care1.

1. R
etail Tissue and Hygiene in Euromonitor. Categories included for
Babycare: “Nappies/Diapers/Pants”, for Femcare: “Sanitary Protection”
and for Adultcare: “Retail Adult Incontinence”.

30 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

sense of ownership and helps us fine-

tune our manufacturing to run lines at
the efficiency required.
In our offices, we adopted powerful
business intelligence tools for data ana-
lytics at Ontex’s HQ in Aalst, Belgium.

Digital marketing
transformation
We are also using digital to change the
way we market our products. In Health-
care, for example, we set up a new, spe-
cific e-commerce team to create rich and
authentic content for customers and car-
ers. Their output included the creation of
SECONDRY® a number of new articles every month on
ENSURES
QUICK LIQUID various topics like bladder weakness or
TRANSPORT IN managing burnout for carers, all based
THE DIAPERS on search engine algorithms to boost
WHICH RESULTS
IN FAST Ontex rankings. Other initiatives included
DRYNESS AND the launch of a number of active digital WE CONTINUED TO EXTEND THE
OPTIMAL SKIN campaigns to keep our brands at the top SUBSCRIPTION MODEL WHICH WE
PROTECTION STARTED WITH LITTLE BIG CHANGE
AND COMFORT. of search engines, a mobile responsive DIAPERS IN FRANCE.
WE Healthcare site, and new product-ori-
SUCCESSFULLY ented mini-sites to create more engage-
LAUNCHED
SECONDRY®
ment and conversion, as well as samples
WITH SOME OF and discounts for online shoppers.
OUR EUROPEAN
RETAILER we are doing. Natural based products
PARTNERS, Continuous flow of account for just 1 percent of European
AND WILL
CONTINUE TO
innovations baby care but are growing extremely
ROLL OUT THE As can be seen in the stories here and fast, and our new products will help us
TECHNOLOGY
elsewhere in the report, the pipeline of gain a strong foothold in this exciting
IN OUR OWN
BRANDS AS innovation continued to deliver for us segment.
WELL. during the year.
Convenience is a must
Product performance first Baby and adult pants are growing in
Surface dryness is a hugely important popularity owing to the convenience of
aspect of our development work and the format. In Adult Care, we launched
during the year we finalized work on our first pants for men which couple
SeconDRY®, an innovative instant-dry- protection and comfort with discretion
ness system that we are now apply- (see page 7) and we also rolled out our
ing to our diapers. Tests carried out proven channel technology to new,
by independent labs in France and easy-to-use baby Lycra pants.
Germany showed that our technology
results in diapers that are as dry as Local production important
A-brand diapers and better than the As a result of the increased partnering
other retailer brands used in the test. between our R&D and Engineering peo-
ple across the world, we were able to
Safe for me... and the world roll out our technologies to a number
Our cross-functional teams not only of regions in the world quickly and effi-
continued to work with suppliers on ciently. For example, in Brazil we intro-
materials with natural ingredients but duced channel technology to our diaper
also on greater transparency in such brand Pom Pom (see page 7) to improve
areas as trace chemicals. The relaunch liquid distribution and absorption which
of the Little Big Change diapers during will help keep the brand at the forefront
the year exemplifies the type of work of the local diaper market.

STRATEGIC REPORT 31
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

PEOPLE
BETTER BEFORE BIGGER
T2G IS SET TO END IN 2021 BUT ITS LEGACY WILL LAST FAR BEYOND. THE
NEW ORGANIZATION, THE GRANULAR PREPARATION AND FOLLOW-UP,
THE NEW PROCESSES AND PRACTICES, AND THE REFOCUSED ORGANIZA-
TION WILL SIMPLY BECOME THE ONTEX WAY OF DOING THINGS EVERY-
WHERE WE OPERATE. THE MAGNITUDE AND INTENSITY OF CHANGE MAY
DECREASE, BUT WE CAN NEVER STAND STILL.

“What makes our

transformation
program
Transform to
Grow (T2G)
different is that
it has been built
by everyone,
touches
everyone, and
will be delivered
by everyone.
In short, it’s a
program where
everyone has
a stake and
can make a
difference.”
ASTRID DE
LATHAUWER,
EXECUTIVE VICE-
PRESIDENT HUMAN
RESOURCES

WHILE IT FOLLOWS CENTRAL GUIDELINES,

RECRUITMENT IS A LOCAL ACTIVITY. LOCAL PLANTS
AND OFFICES KNOW THEIR MARKETS BETTER THAN
A CENTRALLY LOCATED ORGANIZATION. WHILE WE
MAY MANUFACTURE THE SAME PRODUCTS, AND USE
SIMILAR MACHINERY AND PROCESSES, WE RESPECT
THE NEED FOR A LOCAL TOUCH TO ATTRACT PEOPLE.
IT ALSO HELPS TO EMPHASIZE THE ENTREPRENEURIAL
SPIRIT. ACTIVITIES VARY WIDELY FROM ATTENDING
LOCAL TRADE FAIRS TO SETTING UP A LOCAL
GRADUATE PROGRAM TO ATTRACT AND TRAIN TALENT
IN MEXICO.

32 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

IN TRUE ONTEX STYLE,

CELEBRATIONS OF

O
THE COMPANY’S 40TH
ANNIVERSARY WERE VERY
ur transformation program Phased and measured MUCH LEFT IN THE HANDS
Transform to Grow (T2G) introduction OF THE LOCAL ENTITIES.
dominated the year in terms THEY UNDERSTAND BEST
The transformation is phased, rather THE NEEDS OF THEIR LOCAL
of people management and AUDIENCES, SO OUR PLANTS
than being implemented all at once
development. Any action we took, AND OFFICES ORGANIZED
company-wide. For example, the new THEIR CELEBRATIONS.
and any work we did with, and for, our
manufacturing excellence model with
people, was aimed at ensuring that THE CELEBRATIONS
autonomous manufacturing units INCLUDED THE ONTEX
they understood the need for us to get
(AMU) was piloted in Turnov, Czech FOOTBALL CUP. EVERY
better before we get bigger, and were FACTORY FROM AROUND THE
Republic. The AMU model brings own-
aware of our plans to affect change WORLD SENT ONE TEAM TO
ership of and responsibility for produc- BELGIUM TO PARTICIPATE IN
across the whole of the company and
tion, quality and maintenance to the THE DAY-LONG EVENT. IN ALL,
in every function. WE HAD ABOUT 200 PEOPLE
shop floor. It also helps to standardize
FROM A CROSS SECTION
It could have been a very unsettling staffing levels. OF FUNCTIONS INCLUDING
year for our people. The response 10 ALL FEMALE TEAMS, 20 ALL
The work in Turnov illustrates the MALE TEAMS AS WELL AS
was outstanding. It reflects the strong
extent of the changes we want to make. MIXED ONES. IT WAS A TRULY
culture and values that underpin our
But change will not happen overnight. UNIQUE GLOBAL GATHERING
company, and that our people have AND CELEBRATION.
Every operator and person involved in
helped define. We continue to nurture
an AMU needs to be thoroughly trained
and invest in that special Ontex culture.
in running what is, in effect, a miniature
It has proven to be one of our most
factory and made aware of the expec-
important assets. It smoothed the path
tations. Over a period of three months
for transformation. The leadership
we gradually ramped up the processes
team recognizes the pride and passion
so that everyone had time to take on
of our people in driving T2G and is con-
the information, receive the necessary
fident we will reach our stated goals.
training and fully absorb the new way
of working.
All-encompassing change
While each plant is individual, the work
T2G touches all our operational and
done has provided a model that we are
commercial processes. It affects our
now rolling out according to an agreed
ways of working and the processes we
schedule as we aim to standardize
employ. It also addresses the capabili-
manufacturing processes plant by
ties we need for each and every func-
plant and make them more effective.
tion. Feedback indicates that there
was general understanding of the logic We conducted an Organizational
behind the change and the need to Health Survey during the year to under- THE WORK IN
improve our operational and commer- stand how our people assess the orga- TURNOV ILLUSTRATES
cial excellence before we can take the nization and the support they need THE EXTENT OF THE
CHANGES WE WANT
next step. during the transformation. The survey TO MAKE.
confirmed the desire for continual and
regular communication at shop floor
level, the importance of one-to-one
meetings for personal development,
and the need to celebrate milestones
and successes in each of the work
streams. These were all incorporated
into the T2G work streams.

STRATEGIC REPORT 33
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

THE SHIFT FROM FIVE TO THREE DIVISIONS GAVE US FOCUS AND

SCALE. ONE CENTRAL MANUFACTURING ORGANIZATION FREES
UP THE COMMERCIAL ORGANIZATION TO FOCUS FULLY ON THE
CUSTOMER. IT MAKES IT EASIER FOR US TO ADOPT A SINGLE-
MINDED APPROACH TO MANUFACTURING EXCELLENCE AND TO
DEPLOY THAT IN ALL OUR PLANTS, IRRESPECTIVE OF REGION AND
THE SPECIFIC GO-TO-MARKET MODEL.

From 5 to 3
The shift from 5 to
3 Divisions gave us
focus and scale.

1,000
By the end of 2019,
our Ability2Execute
training reached
more than 1,000
people managers.

1. WHY?
WITH TRANSFORM2GROW WE WANT TO
BECOME BETTER, BEFORE BIGGER.
HOW GOOD
1. CAN WE BE?

2. HOW?
1. HOW GOOD
CAN WE BE? 2. HOW DO
WE GET THERE?
PRODUCT / R&D

PURCHASING

MANUFACTURING

SUPPLY CHAIN

COMMERCIAL

3. READY TO

Building sense of Communication is key

PEOPLE & CHANGE IMPLEMENT!

3. WHAT DOES T2G MEAN

FOR MANUFACTURING?

ownership Because of the nature of the rollout,

One of the aims of T2G is to boost our plants and functions are all at dif- ROLLING OUT
IMPROVED PRACTICES
ON THE SHOPFLOOR
FOCUS ON IMPROVING

ferent stages of T2G. We have struc-

MACHINE PRODUCTIVITY

productivity. We want to ensure that LESS BREAKDOWN

& CHANGE-OVERS

=
all employees share in the gains. We tured and systematic communication LESS SCRAP

introduced an incentive scheme with procedures using, for example, team CONTINUOUS TEAMWORK
BETWEEN DEPARTMENTS

meetings, presentations and posters,

BETTER INVENTORY

monthly targets to translate the con-

MANAGEMENT

4. WHAT DOES T2G MEAN FOR ME?

cept of value creation to a personal to update those who have started the Ontex will invest in training for:
PERSONAL

level and increase engagement. It T2G journey and to prepare those not GROWTH SOFT
SKILLS
TECHNICAL
SKILLS
PEOPLE
SKILLS

yet involved for what to expect when

Less downtime at the production line! LESS

will be adopted by each plant as they LESS

SCRAP
EFFICIENT
QUALITY
CHECKS
PREVENTIVE
MAINTENANCE
Lorem
ipsum
DOWNTIME

implement T2G. T2G arrives. SAFER WORKING

ENVIRONMENT
MORE SPACE
IN PRODUCTION

The gains are not just economic. T2G Any plant or office visit by the CEO or WE NEED YOUR INPUT!

other executives from the leadership

FILL-IN FORMS AVAILABLE IN THE CANTEEN.

is a major investment in training and YOU CAN SUBMIT COMPLETED FORMS TO

YOU SUPERVISOR.

capability-building in our organization team in the year was accompanied by

and our people are appreciating the a structured Q&A session. This gave Let’s drive ourselves
to our utmost.
Let’s do this
with passion.
Let’s do this
together.

opportunity for their own personal management the opportunity to per-

WE USE A VARIETY
growth. sonally tell the story behind the trans- OF CHANNELS TO
formation and answer any questions. COMMUNICATE
Although there are some top-down ini- Meeting attendees could then cascade THE PROGRESS
tiatives, the vast majority of the value the message to their own colleagues. OF T2G. POSTERS
creation plans came from the ground ARE A GOOD
MEDIUM TO GET
up from across the whole organization. OUR MESSAGES
This was essential to creating a sense AND SUCCESSES
of ownership. Each initiative has a for- ACROSS.
mal structure and plan for realization
and is reviewed on a monthly basis. In
all, our people created around 2,000
initiatives.

34 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Recognizing and Digital training modules

celebrating success In keeping with T2G, work continued
Recognition and communication are a swiftly in 2019 with the digital deploy-
ment of HR systems and modules to
99%
major part of T2G. We introduced the Of our employees
Transformation Spot Awards to for- train and build skills. We added vari- received one or more
mally recognize any individual in the ous e-HR training modules, developed training sessions
by our own communities of subject during 2019.
organization who makes a meaningful
contribution to the realization of the matter experts, to the learning man-
plan. agement system. These complement

20
existing commercial modules and will
eventually lead to a full curriculum for
Investment in hard and each function. They have proven an The average number
soft skills of hours training per
efficient way to address skill or knowl- fulltime equivalent
During the year, we invested in both edge gaps raised by the performance employee.
hard and soft skills to drive T2G. For management system.
example, we launched Ability2Execute’
a program covering topics such as pri-
ority setting, feedback, measuring the
impact of communication and more,
to improve the skills of all our people
managers in their daily job.
IN 2019, WE WELCOMED THE THIRD GENERATION OF GRADUATES
The training was deployed in local TO OUR SPECIAL GRADUATE PROGRAM. THE NUMBER OF
languages in each country where we APPLICATIONS CONTINUES TO GROW ALTHOUGH OUR INTAKE
REMAINS CONSTANT. THE RETENTION RECORD IS ENCOURAGING
operate. By the end of the year, we AND OUR FIRST GRADUATES HAVE NOW FOUND THEIR PLACE IN
had reached more than 1,000 people THE ORGANIZATION. WE PLAN TO CONTINUE THE PROGRAM.
managers. Monthly follow-up on work
on each of the topics is now reinforcing
the earlier learnings and strengthening
the campaign.
We also introduced standardized skills
matrices for each and every function
in the company, as we invested in core
training and capability-building. Pre-
viously this was done plant by plant,
function by function. The new stream-
lined and structured approach sharp-
ens our focus. It establishes a common
agenda with agreed ways of working
and shared processes across the entire
company. It provides a framework for
the Ontex entrepreneurial spirit and
will help drive growth and create value.

FIVE CHAIRS
TRAINING
We continued with our Five
Chairs training which we
introduced in 2018 to boost
our cultural intelligence and
to make the most of our di-
versity. Also intended to help
people cope with change
not just at work but in life in
general, it has proven very
popular and useful in facil-
itating the change brought
about by T2G.

STRATEGIC REPORT 35
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

Respecting human rights

The respect of human rights is a fundamental part
of Ontex’s ethos and is vital to the sustainability of
our business. We believe the most relevant issues
in creating a fair place of work for all employees
are occupational health and safety and the num-
ber of hours that people work.
Our Human Rights policy contains sound due dili-
gence and risk assessment processes that enable
us to quickly identify any potential human rights
risks in our operations. We conduct regular inter-
nal and third party social audits to understand
any imminent or actual risks.

Addressing health & safety

An active and positive safety culture is critical
to protecting the well-being of our people and
end-consumers. We believe in preventive mea-
sures. We train our people regularly in health and
safety matters and in awareness-raising. We also
ensure that there are open channels so that they
can raise any safety concerns themselves. We
encourage worker representation, dialogue with
factory management, and worker involvement
in decisions that affect workplace-related health
and safety issues.

TWO YEARS WITHOUT ONTEX PAKISTAN WON A SECOND GOLD STAR

SAFETY AWARD FROM ONTEX FOR THEIR CONTINUED
LOST WORK DAY CASE ACCIDENT-FREE RECORD. IT IS NOW TWO YEARS SINCE
THEY REGISTERED THEIR LATEST LOST WORK DAY CASE.
(LWDC)
Ontex Pakistan won a second Gold Star
Safety Award for its continued accident-free
record. It is now two years since they regis-
tered their latest LWDC. PROGRESS IN 2019
The secret of their success? In short, com- ontinued improvement in Accident Frequency Rate.
C
mitment from management and employees, Now at 5.86, reaching our 2020 goal one year ahead of
allied to an environment where employees schedule. (For more details, see page 29.)
feel a strong personal connection to their e rolled out the Radar Chart (internal audit program)
W
own safety and the safety of others.
in six of our plants in 2019.
The work place is regularly assessed to Zero fatalities in any of our sites across the world.
identify potential hazards. There are open
e saw some outstanding safety achievements at our
W
discussions with shop floor employees about
plants, managing the day to day business without any
potential risks, and any recommendations for
accidents. Ontex Pakistan and Ontex Engineering won
improvement involve employees.
safety awards.
A consistent stream of communication keeps he Health & Safety program 2020 has been fully
T
safety top of mind, and recognition of the
implemented. The team is currently developing the
best safety performers has also proven to be
2030 Health & Safety strategic program.
an important motivator.

36 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Working hours
We believe that the use of overtime is
meant to be exceptional, voluntary and
should be paid at a premium rate.
PROGRESS IN 2019
As an absolute minimum requirement,
we stipulate that no Ontex factory In 2019 Business Social Compliance Initiative (BSCI) audits took place in
should ask its workers to work more seven of our sites. In total 12 of our plants are in the scope of this audit
than 48 regular hours per week1, and
process. All of them scored a B or better. We use both internal (through
we continually monitor compliance. In
plants where we see regular overtime, radar chart audits) and third party (through BSCI) audits to understand
we set up programs to decrease the the status and track progress.
number of working hours to accept-
able limits.

BUSINESS SOCIAL
RADAR CHART COMPLIANCE INITIATIVE
(BSCI) SCORE PLANTS (%)
AUDIT PROGRAM
The Radar Chart program is an
internal audit program carried
out by our own sustainability
and quality team. Over a period
of three days, two internal au-
ditors check a site’s compliance
with applicable regulations and
company policies and use the
opportunity to share best prac-
tices between sites.

THE AUDITORS DO NOT JUST CHECK COMPLIANCE,

THEY ALSO HELP SPREAD BEST PRACTICES
BETWEEN THE PLANTS.

1 We recognize the exceptions specified by the ILO.

STRATEGIC REPORT 37
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

Engaging with local

communities around the
world
We recognize that each Ontex site is
part of a unique community, and that
community engagement is a local
matter. We do have Local Commu-
nity Involvement guidelines, which set
out certain standards and expecta- AIDING LOCAL
tions, but we encourage our factories COMMUNITIES IN MEXICO
and offices to motivate and empower
employees to actively participate in and Ontex México was involved in a
support events that will have a positive number of programs and donations
impact on their immediate community, during the year. For example, they
and serve to enhance the reputation of donated a stretcher to the Mexican INCLUSION MAKES FOR
the company. Red Cross, and blankets to the nursing A BETTER WORKING
home Yermo y Parres so that they ENVIRONMENT
These below stories are examples of could cope with the onset of the cold
the many community engagement season. They helped a family who had In Brazil, Ontex launched a number of
activities which took place in 2019. given birth to quadruplets in Puebla activities in the second half of the year
City by giving them a two-year sub- to promote inclusion of people with
scription to diapers. They also helped disabilities. It followed a local initiative
the charity Banco de Tapitas to collect to identify the needs of people with
PROGRESS IN 2019 plastic bottle caps in Puebla and disabilities currently employed by
Tijuana. The organization is dedicated Ontex in Brazil and to increase the
In 2019, 57% of Ontex sites were to recycling plastic caps. The profits recruitment of such people. João
engaged in one or more local deriving from this are earmarked for Paulo Borges, a production assistant
community initiatives young cancer patients (0-21 years) in with disabilities, has been employed
Mexico. at the Ontex plant in Senator Canedo
for more than eight years. He com-
mented: “initiatives aimed at strength-
ening inclusion will make the working
environment better for all Ontex
employees.”
Ontex Brazil also lent its support to
four Brazilian community organiza-
tions by making donations of diapers.
Various organizations were nominated
by the Brazilian employees and the
final choice was made by a designated
CHARITY BEGINS AT HOME committee.

Close relations with local communities

are very important to us as a company.
In 2019, the Ontex Legal team at
headquarters in Aalst took the initiative
to organize a toy collection for Belgian
children’s charity Kinderfonds de
Tondeldoos VZW, which helps families HELPING FAMILIES IN NEED
with children in need. The toys collected IN POLAND
from employees and others were The Ontex Radomsko plant and the
handed over to the charity in the pres- Warsaw based commercial teams in
ence of two journalists and a TV station, Poland participated in a charity event
whose reporting helped encourage fur- called Szlachetna Paczka (Noble Gift).
ther donations. We were very pleased Noble Gift is one of Poland’s largest
with the engagement of our employees and most effective charity organi-
and the positive outcome. Koen Van zations. Its aim is to personalize aid
Hedent, president of De Tondeldoos: to provide individual help to specific
“The collection came just in time for people in difficult situations. Ontex
our Tondeldoos goes VIP children’s employees in Poland collected money
party in mid-November. At the end of and various gifts including Ontex baby
the event, each child chose a toy from products, food, microwave ovens,
the donations. Children love presents bunk beds, household products and
and this was only made possible by the clothing which went to two thankful
solidarity shown by Ontex.” families in need of support.

38 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Business ethics
Code of Ethics
We are committed to setting the highest standards
for responsible business practice. These are sup-
ported by a number of policies and measures and
are implicit in our vision and values, the way we
conduct business and are enshrined in the Ontex
Code of Ethics (the Code). The Code sets out the
standards we expect and which we support with
communications and training programs.
The annual compliance objectives are approved
by the Ontex Management Committee and cas-
caded to the local compliance community in each
location. A local compliance coordinator is tasked
with concrete local actions to meet the compli-
ance objectives under the supervision and with
the support of local management.

Raising concerns
Any transgression or alleged transgression of the Anti-bribery and corruption
Code is assessed on a case by case basis by the Face-to-face training sessions were organised in
Compliance team at global or local level, together a number of countries (Turkey, Algeria, Ethiopia,
with the other relevant functions (such as HR or Pakistan, Mexico and Brazil), emphasizing our
Legal) depending on the type of incident. The zero tolerance policy towards bribery and corrup-
remedial actions also depend on the nature of tion. These types of sessions are a very efficient
the breach. way to communicate. They enable us to listen
to specific concerns and allows us to keep on
We have a number of channels for raising con-
improving our program.
cerns and reporting any violation or potential
violation of the Code. These include an externally Personal data and privacy
managed Speak Up channel where people can In addition to the strengthening of our data pri-
report misconduct anonymously. vacy compliance program in line with the General
Ontex people need to feel comfortable in report- Data Protection Regulation (GDPR), we have ini-
ing incidents or breaches of the Code and we are tiated a number of actions to comply with newly
constantly seeking to foster such behavior. In adopted national laws in and outside Europe.
order to make the different channels to report
breaches more broadly known, and encourage The Ontex Code of Ethics relates to:
their use, we have issued a series of regular com- W orking conditions
munications during the year, each of which high- H ealth & safety
lighted a specific compliance topic. H uman rights
P roduct quality
MAIN FOCUS AREAS R esponsible marketing & advertising
Our main focus areas during the year remained F air competition
fair competition, anti-bribery and corruption, and S ustainability
personal data and privacy. However, all the topics C onflicts of interest
included in our Code (see list) are equally import-
A nti-bribery and corruption
ant to us and reflect the way we want to conduct
our business. Our aim is to ensure that our peo- G ifts & hospitality
ple are fully aware of the risks in their daily busi- A nti-money laundering
ness. E conomic sanctions
C ommunity involvement
Fair competition C onfidential information
We conducted an e-learning refresher course
S ocial media & networks
on competition law for all sales and marketing
employees as well as the leadership team, and C ompany assets
launched a poster campaign on competition law Intellectual property
to emphasize the main applicable principles and P ersonal data and privacy
the high risks in case of infringement. Insider dealing

STRATEGIC REPORT 39
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

RESPONSIBLE
PRODUCTION
HOW WE ARE
SET UP TO BOARD OF
DIRECTORS

DELIVER

T
he Board of Directors, CEO and SUSTAINABLE
Executive Leadership Com- MANAGEMENT VP R&D, QUALITY & INNOVATIONS
COMMITTEE SUSTAINABILITY
mittee are responsible for the SPECIALIST
supervision and management
of our sustainability strategy and our
role in society as a whole. GROUP
SUSTAINABILITY ECOLABELS
& PRODUCT SPECIALIST
In 2019, we disbanded the Sustainabil- STEWARDSHIP
ity and Health & Safety steering com- DIRECTOR
mittees and integrated sustainability
in existing committees to better align SUSTAINABILITY
our efforts as our ambitions grow and SPECIALIST
we fine-tune our strategy. We also
strengthened our sustainability gover-
nance by adding two new people to the
SUSTAINABILITY
sustainability team to focus on scien- SYSTEMS MANAGER
tific affairs and product safety.
Annick De Poorter, Vice-President R&D,
Quality & Sustainability, is the custo-
SCIENTIFIC AFFAIRS
dian of our sustainability vision. She SPECIALIST
leads the Group sustainability team
whose task is to set the sustainability
strategy and the related goals, and to
monitor progress. The team works REGULATORY &
PRODUCT SAFETY
closely with other departments and MANAGER
local production sites to ensure sus-
tainability is embedded in the organi-
zation.
The team reports to the Executive
Leadership Committee and Board of THE GROUP SUSTAINABILITY
Directors once a month. TEAM SETS THE SUSTAINABILITY
STRATEGY AND RELATED GOALS
To ensure sustainability is systemati- AND MONITORS ITS PROGRESS.
cally embedded in our daily operations,
our aim is to have all our main plants
certified according to ISO 14001 and
15001 by the end of 2020.

40 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

CERTIFICATIONS IN ONTEX’S
18 PLANTS AROUND THE
WORLD (%)
100

80

60

40

20

0
2017 2018 2019

ISO14001 ISO50001 ISO45001

Our sustainability
standards and policies
Our standards and policies are critical
in supporting our sustainability strat-
egy. Our values are also essential in
this respect–they define who we are
and what we stand for. We use our
standards and policies to implement
TO ENSURE SUSTAINABILITY IS
and embed these values with all our SYSTEMATICALLY EMBEDDED IN OUR DAILY
employees and business partners. OPERATIONS, OUR AIM IS TO HAVE ALL OUR
MAIN PLANTS CERTIFIED ACCORDING TO ISO
Where applicable, we base our policies 14001 AND 15001 BY THE END OF 2020.
and standards on international norms
and well-recognized guidelines and
accords such as the ILO Conventions
and the UN Guiding Principles on Busi-
ness and Human Rights.
We group our standards into three cat-
egories:
wn operations
O
usiness partners
B
aterials/products
M
POLICIES
Our human rights policy sits above all
these categories and applies to all areas Human Rights policy
of our work. This section illustrates OWN BUSINESS MATERIALS/
how we implement our standards and OPERATIONS PARTNERS PRODUCTS
policies along our value chain, and how Code of ethics Supplier code of Animal testing
we assess and monitor them to ensure conduct statement
compliance and improvement. The Diversity policy Ethical sourcing
table at the right shows a selection of requirements
our policies.
SHEQ policy Modern slavery
Our standards and policies are an statement
essential component in turning our Speak up policy
strategy into action and making our
vision a reality.

STRATEGIC REPORT 41
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

CIRCULAR
SOLUTIONS

U
sing natural resources in an Design for recycling Recycled materials reduce the use
efficient, responsible and sus- of virgin raw materials as well as the
When designing new products for mar-
tainable way is highly relevant chemicals, energy and water used
kets with sophisticated waste handling
to our business. At Ontex, we to make them, and prevents waste
infrastructure, we choose our raw
believe that using the principles of the material from going to landfill. We are
materials carefully so that the used
circular economy model will help us always conscious that we can never
products can be recycled easily once
reduce the environmental impact of compromise on the hygiene, health
recycling infrastructure becomes avail-
our products. and safety of our users.
able. In markets with inadequate waste
The circular economy model is based handling infrastructure, we opt to max-
on designing out waste and pollution, imize the use of biodegradable mate- Bio-based materials and
regenerating natural systems, and rials to address the impact of plastic sourcing
keeping materials and products in use pollution. We look to sustainably sourced bio-
for as long as possible (as described by based materials that are grown or
the Ellen McArthur Foundation). For Reduce cultivated naturally. This results in a
us, this entails reducing oil-based raw reduction of oil-based raw materials.
A lot of our research and development
materials and increasing the use of
work is channelled into reducing the
bio-based materials. It also means min- We have specific sourcing policies for
amounts of material we use in our
imizing production waste and re-de- many of our raw materials. These typ-
products while achieving equal or bet-
signing the products so that they either ically require the use of credible third-
ter performance. A thinner, less bulky
biodegrade or are easier to recycle. In party certification schemes to ensure
product also results in less packaging
addition, it is our ambition to be part of sustainable sourcing. These include
and more efficient logistics, which posi-
the solution for the after-use treatment the Global Organic Textile Standard
tively impact our carbon footprint.
of products. (GOTS), recycled standards, the Forest
A business model can only be truly Using recycled materials Stewardship Council (FSC®) and Pro-
circular if it is powered by renewable All our packaging is already 100 per- gramme for the Endorsement of Forest
electricity, which is why we are aiming cent recyclable, and in 2019, we started Certification (PEFC™).
for 100 percent renewable electricity initiatives focusing on recycled material
throughout our own operations. (See for packaging.
page 44.)

WE UNDERSTAND THAT IN
AN INDUSTRY LIKE OURS,
CONSIDERATION FOR WHAT
HAPPENS AFTER A PRODUCT’S LIFE
IS BECOMING JUST AS IMPORTANT
AS ITS PERFORMANCE.

REDUCE CARBON
FOOTPRINT
“With the launch
MINIMIZING of our Circular
PRODUCTION
WASTE
Economy Program,
RECYCLING
we will execute
DESIGN FOR INFRASTRUCTURE initiatives reducing
RECYCLING OR THROUGH
BIODEGRADATION PARTNERSHIPS the environmental
impact of our
products while
BIOBASED creating value for
REDUCE
OIL-BASED our stakeholders.”
FOSSIL
CARBON REDUCE & GRIET DECONINCK,
BIODEGRADABLE CIRCULAR ECONOMY
“LEAKS INTO NATURE”
PROGRAM DIRECTOR

42 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

A LOT OF OUR RESEARCH

AND DEVELOPMENT WORK IS
SOME OF CHANNELLED INTO REDUCING THE
THE THINGS AMOUNTS OF MATERIAL WE USE IN
WE’VE DONE OUR PRODUCTS WHILE ACHIEVING
MAIN RAW MATERIALS EQUAL OR BETTER PERFORMANCE
(TONS)
IN 2019
CIRCULAR
THINKING IN
BRAZIL
Plastic waste
generated during
the packing process
of our products in
Brazil plant is now
re-purposed into new
plastic garbage bags
P ulp 49% for use at the plant.
S AP (superabsorbent
polymer) 23%
P lastic non-woven 17%
P lastic film 6%
G lue & wetness
indicators 3%
T apes 1%
V iscose 1%

Recycling infrastructure
and recycling through
partnerships
Post-usage waste is one of the main
challenges associated with our prod-
ucts. Currently, little infrastructure is IMPROVED RECYCLING INDEX1 (%)
PRODUCT,
available to effectively recycle used dia- LESS PACKAGING
pers or feminine care products. In addi- 100

88
For our own Moltex
86

tion, defining proper, safe and gener-

82

Pure&Nature brand 80
ally accepted hygiene standards for the
recycled fraction remains a challenge we decided to push
60
for the industry. even further and
remove the handle 40
In 2019, we joined a pilot project to all together with
investigate the feasibility and viability going to a new 20
of different recycling options for used design of the diaper
diaper waste. The outcome was prom- and optimized 0
ising and challenging and we will con- 2017 2018 2019
the pack-counts.
tinue to explore possible routes.

Minimize production waste PROGRESS IN 2019

Minimizing production waste is an 00% of our fluff comes from certified
1
important part of reducing the envi- or controlled sources.
ronmental impact of our products. We SINGLE-USE 00% organic cotton in our tampons.
1
achieve this through a well thought- PLASTICS
out product design and a good mon- ll our packaging is 100% recyclable.
A
By popular demand,
itoring of the production process and 92% of cardboard used for packaging is
we abolished the
we make sure our production waste is recycled.
use of single-use
recycled rather than sent to landfill or
plastic cups at our emoval of plastic cups at our HQ.
R
incineration (see graph).
headquarters in 8% recycling index1. Details can be checked on
8
In 2019, we managed to reduce the Aalst, Belgium. page 152.
production waste at our plants but
there is more to do. artnership with waste processing company to
P
work on diaper recycling technology.
In markets with inadequate waste han-
dling infrastructures, we opt to max-
imize the use of biodegradable mate-
rials to address the impacts of plastic 1. R
ecycling index: % of production waste (tons) being recycled or incinerat-
pollution. ed with energy recuperation.

STRATEGIC REPORT 43
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

OUR GOAL IS TO BECOME CLIMATE NEUTRAL BY

2030, EVEN THOUGH WE DO NOT YET HAVE ALL THE
SOLUTIONS TO GET THERE.

CLIMATE ACTION

A
s a responsible international company, and a prin- We have identified three key priorities that relate
cipal player in our field, we will take up our role to both our own operations and those across our
in tackling the challenge of climate change. That value chain.
pledge goes beyond simply cutting emissions.
(See pages 150-151 for details on 2019 energy consumption riority 1 focuses on leadership in energy effi-
P
and emissions.) As a minimum, we commit to making a sig- ciency so that we use as little energy as possible.
nificant contribution to help our planet stay below the 2°C
riority 2 tackles our 100 percent renewable
P
global warming limit as set by the Paris Climate Agreement.
electricity goal, which will help us ensure the
We will hasten our transition to climate neutral operations.
energy we source is renewable.
Our goal is to become climate neutral by 2030. It is a stretch
target and we do not yet have all the solutions to get there riority 3 targets climate resilience and carbon
P
but the urgency of imminent climate change means we must sinks (natural or artificial deposits that absorb
dare to take decisive action now. and store carbon from the atmosphere help-
ing reduce the greenhouse effect) to address
unavoidable emissions and emissions beyond
our value chain.

44 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

PRIORITY 1
Leadership in energy
FIRST MAJOR STEP
TOWARDS CARBON efficiency
NEUTRAL
Our primary focus is on improving
The 7,200 solar panels on energy efficiency in our plants. It is
the roof of our Eeklo plant something that we can influence and
in Belgium generated control directly. The use of electricity
more than 600 mega- accounts for the majority of our emis-

PRIORITY 3
watthours of green power sions (90 percent), the rest comes from
in 2019. This installation fuels such as natural gas and oil.
is the first stage of our
Climate resilience
sustainability journey
towards carbon neutrality
PRIORITY 2 The most recent IPCC report urgently
by 2030. recommends rapid transition from
100% renewable electricity fossil fuels to renewable and sustain-
We want to source 100 percent renew- able energy technologies to reduce
able electricity in our own operations. greenhouse gas emissions into the
In 2019, 70 percent of the electricity atmosphere. The report also includes
purchased was renewable. We under- a section on carbon dioxide removal.
stand that more capacity is needed to It singles out ‘reforestation and eco-
generate renewable energy to contrib- system restoration’, along with simi-
ute to the necessary decarbonisation lar nature-based activities, as the only
of energy systems. Going forward, our methods that are well understood to
energy purchasing strategy will evolve be effective in reducing the polluting
from today’s focus on green electricity gases that are already in the atmo-
to a balanced portfolio of green elec- sphere. We have adopted this in our
tricity and the electricity generated on new 2030 Sustainability strategy and
our own sites. (For details, see page will be examining the best way to move
151.) forward on this topic.

PROGRESS IN 2019
ll European plants run on 100 percent
A
renewable electricity
lobally, 70 percent of the electricity we use is
G
renewable
I nauguration of first on-site solar rooftop
system, generating 628 Mwh electricity
e set an absolute emission reduction target
W
of 50 percent by 2030, base year 2018, in line
with science-based target setting.
e further reduced our absolute scope 1 &
W
2 greenhouse gas emissions by 10 percent
compared with last year.

ALL EUROPEAN PLANTS NOW RUN

ON 100% RENEWABLE ELECTRICITY.

STRATEGIC REPORT 45
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

SUSTAINABLE
SUPPLY CHAIN

W
e have more than 200
raw material and packag-
ing suppliers. To do busi-
ness with us, they have ALL NEW SUPPLIERS ARE
to abide by our Supplier Code of Con- SCREENED FOR PRODUCT
SAFETY, PRODUCT
duct and our Ethical Sourcing Require- QUALITY, ENVIRONMENTAL
ments which stipulate our expectations CONSIDERATIONS, WORKING
on business ethics, environmental CONDITIONS AND HUMAN
RIGHTS.
matters, health and safety and human
rights, all of which are based on the
code of ethics we apply to ourselves.
All new raw material and packaging
suppliers are screened for product
safety, product quality, environmental
considerations, working conditions and
human rights. In terms of human rights,
we carry out a risk analysis based on
country-specific circumstances so that
we can identify high-risk suppliers. 200+
Raw material and
Raw material & packaging suppliers packaging suppliers
with operations in a high-risk country
must be able to show proof of compli-
ance with the Ontex Supplier Code of
Conduct through a valid, third-party
social audit. We introduced these 26%
requirements in 2019 and will have the Are located in high-
first reports during 2020. risk countries1

Our main direct procurement materi-

als include superabsorbent material,
fluff, non-woven and PE film and bags.
Technical goods and services, market-
ing services and research and develop-
ment are important components of our
indirect procurement portfolio.

PROGRESS IN 2019
e launched updated versions of
W
our Supplier Code of Conduct and
Ethical Sourcing Requirements.
4 percent of our raw material and
6
packaging suppliers signed our
updated Supplier Code of Conduct.
e rolled out a new social
W
compliance program .

1. High-risk countries as defined by the country risk classification of amfori.

46 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

SAFE
PRODUCTS

P
roduct safety is always a top
concern. When developing
products, we carefully evalu-
ate the materials that go in to
them, conducting risk assessments and
testing each one to ensure it meets our
standards. We listen to market feed-
back as well and are continually con-
scious of the quality and safety of our
products. In 2019, there were no prod-
uct recalls or withdrawals.
We use chemicals to give texture to
materials, glue parts together, and
sometimes to provide a protective
layer to guarantee the safety perfor-
mance of our products. Safety is always
the priority and we thoroughly asses
any chemicals to make sure they are
safe for customers, our employees and
the environment.
We work together with EDANA2 on
industry standards for chemicals.
Our standards often go beyond legal
requirements, and, in advance of legis-
lation, we phase out chemicals that we
suspect of being harmful.
We are currently revising our chemical WE WORK TOGETHER WITH EDANA ON INDUSTRY
roadmap focusing on: STANDARDS FOR CHEMICALS. OUR STANDARDS
OFTEN GO BEYOND LEGAL REQUIREMENTS, AND,
Increasing information on chemical IN ADVANCE OF LEGISLATION, WE PHASE OUT
CHEMICALS THAT WE SUSPECT OF BEING HARMFUL.
content in products.
ssessing all our products for chem-
A
ical safety.
hasing out substances that could
P
TRANSPARENCY
cause harm. TOWARDS
nsuring suppliers share our values
E CONSUMERS IS KEY
on chemical safety and compliance. We are committed to
Increasing awareness among co-work- communicating the
ers, consumers, and key stakeholders. sustainable features
of our products
on-pack. Our share
“Chemical safety is key as we
of labelled products transition to a circular business and
has grown steadily use more recycled and alternative
over the past years. materials. We do not accept that
In 2019, 34% of our recycling happens at the expense of
turnover came from
products with one or
chemical safety. To ensure safety,
more eco or health we conduct a thorough chemical
labels. risk assessment before a product
or packaging is introduced into our
product portfolio.”
BART WATERSCHOOT,
ONTEX GROUP SUSTAINABILITY & PRODUCT
STEWARDSHIP DIRECTOR

2. EDANA is the European industry association serving the nonwoven and related industries.

STRATEGIC REPORT 47
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

IMPROVING
PERFORMANCE
TREND ACROSS
THE YEAR
FINANCIAL REVIEW
THE CHALLENGES THAT ONTEX HAS FACED IN THE LAST THREE YEARS SHOWED LITTLE SIGN
OF ABATING FOR MOST OF 2019. OUR COMPETITIVE CULTURE, WHICH MANIFESTS ITSELF
THROUGH COST CONTROL AND DIFFERENTIATION THROUGH INNOVATION, ONCE AGAIN
ACCOUNTED FOR THE RESILIENCE OF OUR OPERATING PERFORMANCE.

A
Revenue1 (€/B)
highlight of the year was our Revenue
strong cash flow generation on the
2.28 back of a comprehensive working
We delivered a resilient like-for-like (LFL)
revenue performance with growth in devel-
-1% capital management effort led by
(LFL growth %) oping markets nearly compensating lower
Group Finance. Tight control of our financial
sales in developed markets. LFL revenue
leverage also contributed, as did improve-
was down 1.0%, with a positive price/mix in
ments to the quality and reliability of the
each of the three product categories and all
forecasting processes in the perpetually vol-
Gross profit1 (€/M) three Divisions, largely offsetting the antici-
atile environment of input prices, currency
620.0 and operations.
pated decline in volume.
-1.4% Group sales of €2.28 billion were broadly
The finance function was also intimately
stable (-0.5%) including a positive foreign
involved in the planning and implemen-
exchange impact of €11 million.
tation of T2G, from the overall economic
Adjusted EBITDA1 evaluation of the project, through the
(€/M) assessment of each of its initiatives, to the Gross profit
245.1 tracking of results as those projects moved
into implementation.
Gross profit amounted to €620 million in FY
2019, a limited decrease of 1.4% compared
-7.0%
with the previous year. Gross profit growth
in H2 2019 nearly offset the decrease
recorded in the first half of the year. Gross
REVENUE BY DIVISION profit as a percentage of sales was 27.2% in
Adjusted profit for
the period1 (€/M) (€/M) 2019, down 26 basis points versus prior year.
86.4 2019 gross profit benefitted from another
year of savings and efficiencies, mostly as
-20.0%
results of the T2G implementation, as well
as a positive contribution from sales price/
mix effects, nearly offset foreign exchange
and raw material headwinds.

Adjusted EBITDA
Europe 956.9 2019 Adjusted EBITDA came in at €261 mil-
A mericas 891.9 lion at constant currencies, 1.1% below prior
H ealthcare 432.5 year and supported by improving trends in

1. All comparisons vs. 2018, pro forma IFRS 16. Like-for-like revenue is defined as revenue at constant
currency excluding change in scope of consolidation or M&A.

48 ONTEX INTEGRATED ANNUAL REPORT 2019

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PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

Income tax expense

The income tax expense was €12.2 million in
2019, for an effective tax rate of 24.7%.

Working capital
“A highlight of the year was our strong cash flow At the end of 2019, working capital as a
percentage of FY revenue was 9%, mark-
generation on the back of a comprehensive working ing a strong improvement on top of the
capital management effort led by Group Finance.” 11.2% achieved at 2018 end. A coordinated,
CHARLES DESMARTIS, CFO cross-functional approach implemented
during 2019, including specific trade receiv-
ables, trade payables and inventory man-
the second half of the year as anticipated. agement practices implemented through
Adjusted EBITDA at constant currencies was the T2G program, account for this excellent
broadly stable while we continued to invest performance.
REVENUE GROWTH2 to strengthen our engineering and commer-
(LFL GROWTH %) cial capabilities. Capital expenditure
3 Capital expenditure was €103.9 million
Non-recurring income and
2.34

2.29

in 2019, or 4.6% of revenue. This amount

2 expenses includes T2G-specific capex and was at the
Non-recurring expenses amounted to €70.3 lower end of our initial range planned for
1 million in 2019, primarily due to restructur- the year.
ing expenses and consulting fees related to
-1.00

0
the implementation of the T2G program. Free cash flow (post tax)
The cash flow impact of non-recurring
Free cash flow (post tax) improved by a
expenses was limited to €30.1 million in
-1 very strong +50.5% or €36.8 million in
2019 due to differences between expense
2017 2018 2019 2019 to €109.7 million, net of €29.9 mil-
recognition, which has been more front-
lion in T2G-specific cash outflows (for one-
loaded in 2019 linked to the start of many
off expenses and capital expenditure).
T2G initiatives, and cash out which will be
GROSS PROFIT (€M) Improved management of our working cap-
more evenly spread over the T2G program
ital was the main driver for the strong cash
period of 2019 to 2021.
660.6

generation.
625.7

620.0

700
600
500
Foreign exchange Net debt and leverage
400 The rates of our functional currencies ver- Net debt stood at €861.3 million at Decem-
300 sus the euro remained volatile during 2019. ber 31, 2019, down €37.5 million compared
200 Group revenue ended up benefiting from a with June 30, 2019, and down €46.3 million
100 positive effect of +€11.1 million, essentially compared with December 31, 2018 (pro
0 due to a stronger Mexican peso and US dol- forma for IFRS 16). Leverage was 3.51x at
2017 2018 2019 lar partly offset by weaker Turkish lira, Bra- December 31, 2019, lower than the 3.71x
zilian real and Pakistani rupee, relative to reported at June 30, 2019 and only margin-
the euro. However, the impact on Adjusted ally higher than one year ago (pro forma
NET FINANCIAL EBITDA of variations of currencies versus for IFRS 16). We remained fully compliant
DEBT/LTM the euro was -€15.7 million, mainly attribut- with the leverage covenant of our financing
ADJUSTED EBITDA able to the stronger US dollar, the currency agreements, and headroom improved over
RATIO (LEVERAGE)3 in which we purchase a large part of our raw H2.
materials, as well as the weaker Turkish lira.
4
3.51

Dividends
3.25

Net finance costs

2.79

3 The Board of Directors has proposed a divi-

2019 net finance costs were €37.7 million, dend of €0.16 per share, in line with Ontex’s
6.6% more than prior year. policy to pay out 35% of net profit.
2

1
(€M UNLESS OTHERWISE SPECIFIED) 2019 2018 CHANGE
0 Revenue 2,281.3 2,292.2 -0.5%
2017 2018 2019
Gross profit 620.0 628.9 -1.4%
Adjusted EBITDA 245.1 263.6 -7.0%
2. L ike-for-like revenue is defined as revenue
at constant currency excluding change in Adjusted profit for the period 86.4 107.9 -20.0%
scope of consolidation or M&A.
3. N
et financial debt is calculated by adding
Adjusted free cash flow 109.7 72.9 +50.5%
short-term and long-term debt and
deducting cash and cash equivalents. LTM Net debt 861.3 907.6 -5.1%
adjusted EBITDA is defined as EBITDA plus
non-recurring income and expenses for Leverage 3.51x 3.44x +0.07x
the last twelve months (LTM).

STRATEGIC REPORT 49
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

CORPORATE
GOVERNANCE
STATEMENT
THE FOLLOWING SECTION PROVIDES INFORMATION ABOUT THE
CORPORATE GOVERNANCE OF ONTEX GROUP NV (ALSO REFERRED TO
HEREIN AS THE ‘COMPANY’ OR AS ‘ONTEX’).

This section includes changes to the Company’s corporate governance, together with the relevant events that took place during
2019, such as changes in the Company’s shareholder structure, its governance and in the composition of the Company’s Board
of Directors (hereafter the ‘Board’) and its committees, the main features of the Remuneration Policy and Report, and the internal
control and risk management systems of the Ontex group. This chapter also includes explanations, where applicable, of any
deviations from the Corporate Governance Code (see section 7 of this Corporate Governance Statement).

In view of the recent and expected changes of legislation, the Company’s approach is as follows:
 With respect to the Belgian Code of Companies and Associations of 23 March 2019 (hereinafter “Belgian Code of
Companies and Associations”), replacing the Belgian Code of Companies of 7 May 1999 (hereinafter “Belgian
Companies Code”) Ontex envisages to submit, at the next extraordinary general meeting of shareholders, a proposal
for amendment of its Articles of Association to bring these in accordance with the new legislation.

 With respect to the Belgian Corporate Governance Code of 9 May 2019 (hereinafter “the 2020 Corporate Governance
Code”), replacing the 2009 Corporate Governance Code , the Board will adapt its Corporate Governance Charter
subsequently to amendment of its Articles of Association as mentioned above. Until then, the 2009 Corporate
Governance Code will continue to be applied.
 With respect to the Directive as regards the encouragement of long-term shareholder engagement of 7 May 2017,
replacing the Directive of 11 June 2007 on the exercise of certain rights of shareholders in listed companies, Ontex has
opted to anticipate the envisaged entry into force to the extent that this annual report will contain a remuneration policy
as well as a remuneration report, and both will be presented for approval to the ordinary general meeting of
shareholders, scheduled on 25 May 2020.

1. REFERENCE CODE
Pursuant to Article 3.6, § 2 of the Belgian Code of Companies and Associations and the Royal Decree of June 6, 2010 designating
the Corporate Governance Code to be complied with by listed companies, Ontex Group NV has adopted the 2009 Corporate
Governance Code as its reference code on corporate governance 1.
As appropriate for a Belgian listed company with a commitment to high standards of corporate governance, the Board adopted a
Corporate Governance Charter in June 2014 (hereafter the ‘Corporate Governance Charter’), as required by the 2009 Corporate
Governance Code. The Board amended the Corporate Governance Charter on June 28, 2016. The Corporate Governance
Charter can be consulted on the Company’s website 2.
The Corporate Governance Charter describes the main aspects of Ontex Group NV’s corporate governance, including its
governance structure and the terms of reference of the Board, as well as those of the Board committees and of the Management
Committee. The Corporate Governance Charter is regularly updated and will be annually reviewed by the Board to be in line with
applicable laws, regulations, the 2009 Corporate Governance Code and their interpretation.

1
The ‘2009 Belgian Code on Corporate Governance’ is available on the website of the Belgian Corporate Governance Committee
(http://www.corporategovernancecommittee.be)
2
The English version of Ontex’s Corporate Governance Charter is available on the Ontex website
(http://www.ontexglobal.com/sites/default/files/20170509_ontex_corporate_governance_charter_e.pdf).

50

50 ONTEX INTEGRATED ANNUAL REPORT 2019

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2. CAPITAL AND SHAREHOLDERS

2.1. Capital and capital evolution
At December 31, 2019, the capital of Ontex Group NV amounted to €823,587,466.38 and was represented by 82,347,218 shares
without nominal value. Each share represents 1/82,347,218th of the capital and carries one vote. The shares are listed on
Euronext Brussels.

In 2014, the Company adopted a Long-Term Incentive Plan approved by the Board and the Shareholder Meeting on June 3, 2014
and June 10, 2014 respectively (the ‘Long Term Incentive Plan’) which consists of a combination of stock options and restricted
stock units (hereafter ‘RSUs’). The Board has previously approved grants under the Long-Term Incentive Plan, in 2014, 2015,
2016, 2017 and 2018 (respectively the ‘LTIP 2014’, the ‘LTIP 2015’, the ‘LTIP 2016’, the ‘LTIP 2017’, the ‘LTIP 2018’, and the
Long-Term Incentive Plan including the LTIP 2014, the LTIP 2015, the LTIP 2016, the LTIP 2017, and the LTIP 2018 being
referred to as the ‘LTIP’). In 2018, the Company adopted a revised Long Term Incentive Plan, as adopted by the shareholders
meeting on 25 May. Going forward, the LTIP consists of 1/3 of stock options, restricted stock units and performance shares each
(hereafter referred to as "LTIP 2"). In 2019 the Board has approved a grant under the LTIP 2.

The stock options, performance shares and RSUs granted under the LTIP do not confer any shareholder rights. The grants made
by Ontex under its LTIP typically consist of Restricted Stock Units (RSU) and stock options and provided for a three-year vesting
period. The shares to be delivered to participants upon exercise of their stock options or upon vesting of their RSUs or performance
shares are existing shares of the Company with all rights and benefits attached to such shares. A more detailed description of the
LTIP and the LTIP 2019 and the LTIP 2 is set out in the Remuneration Report.

The grants made by Ontex under its LTIP provide for a three-year vesting period. Accordingly, the grants that were made in 2016
vested as from 2019. In order to meet its obligations thereunder, Ontex has partially exercised a forward purchase agreement
with the following characteristics:

Ontex has exercised the relevant forward purchase agreement in order to meet its obligation to deliver its own shares under grants
made under its Long-Term Incentive Plan (LTIP) in 2016.

Date Number of shares Strike Price Highest Price Lowest Price

Originally entered
36,589 € 27.070 € 28.685* € 25.800*
into on 21 July 2015
* The highest price and lowest price, respectively, reflects the highest price and lowest price of Ontex shares on Euronext Brussels during the
period 1 July 2015 until 21 July 2015 during which underlying Ontex shares were bought by its counterparty under the forward purchase
agreement and on the basis of which the strike price of € 27.070 was determined.

Date Number of shares Strike Price Highest Price Lowest Price

Originally entered
into on 1 July 2016
26,788 € 28.965 € 30.515** €27.145**
and extended on 22
June 2018
* The highest price and lowest price, respectively, reflects the highest price and lowest price of Ontex shares on Euronext Brussels during the
period 20 June 2016 until 1 July 2016 during which underlying Ontex shares were bought by its counterparty under the forward purchase
agreement and on the basis of which the strike price of € 28.965 was determined.

In addition, Ontex has entered into the following forward purchase agreements in order to hedge its obligations under grants made
under its LTIP in 2016, 2017 and 2018. These consist of (i) one-year forward purchase agreements entered into in 2015, 2016
and 2017 which have been extended on 22 June 2018 to cover its future delivery obligations under grants made under its 2016
and 2017 LTIP and (ii) a new one-year forward purchase agreement entered into on 21 June 2019 to cover its future delivery
obligations under grants made under its 2018 LTIP.

As of today, the following purchase agreements are outstanding in respect of Ontex’s own shares:

Date Maturity Number of shares Strike Price Highest Price Lowest Price
Originally entered
into on 1 July 2016
291,757 € 28.965 € 30.515* € 27.145*
and extended on 21 21 June 2020
June 2019
Originally entered
into on 22 June
21 June 2020 332,043 € 32.2982 € 33.405** € 31.555**
2017 and extended
on 21 June 2019
Originally entered
into on 22 June
21 June 2019 536,409 € 22.4709 € 24.240*** € 19.200***
2018 and extended
on 21 June 2019

51

STRATEGIC REPORT 51
MARKET STAKEHOLDER
AT A GLANCE INTERVIEW KEY HIGHLIGHTS STRATEGY KPI’S DIVISIONS
CONTEXT ENGAGEMENT

* The highest price and lowest price, respectively, reflects the highest price and lowest price of Ontex shares on Euronext Brussels during the
period 20 June 2016 until 1 July 2016 during which underlying Ontex shares were bought by its counterparty under the forward purchase
agreement and on the basis of which the strike price of € 28.965 was determined.
** The highest price and lowest price, respectively, reflects the highest price and lowest price of Ontex shares on Euronext Brussels during the
period 7 June 2017 until 22 June 2017 during which underlying Ontex shares were bought by its counterparty under the forward purchase
agreement and on the basis of which the strike price of € 32.298 was determined.
*** The highest price and lowest price, respectively, reflects the highest price and lowest price of Ontex shares on Euronext Brussels during the
period 29 May 2018 until 22 June 2018 during which underlying Ontex shares were bought by its counterparty under the forward purchase
agreement and on the basis of which the strike price of € 22.4709 was determined.

More details about the vested Stock Options and RSUs can be found in the Remuneration Report.

More details about the forward purchase agreement can be found in the financial statements, note 7.5.6.
Pursuant to the above, on December 31, 2019, 335.273 shares of the Company were held by the Company.

On December 31, 2019, 82.218 shares of the Company were registered shares.

2.2. Shareholder evolution

Pursuant to the Company’s Articles of Association and the Corporate Governance Charter, the applicable successive thresholds
as regards the application of the Law of May 2, 2007, on the disclosure of significant shareholdings in issuers whose shares are
admitted to trading on a regulated market and other provisions (hereafter the ‘Law of May 2, 2007’) and the Royal Decree of
February 14, 2008 on the disclosure of significant shareholdings, are set at 3%, 5%, 7.5%, 10% and any subsequent multiples of
5%.

In the course of 2019, the Company received the following transparency declarations:
On February 26, 2019, Axa Investment Managers SA notified Ontex that it has, as a result of sales of shares, crossed below the
threshold of 3.00% of the total number of voting rights in Ontex.

On March 13, 2019, Zadig Gestion (Luxembourg) SA notified Ontex that it holds, as a result of the acquisition of voting securities
or voting rights, 3,041,284 shares in Ontex and so has crossed the threshold of 3.00% of the total number of voting rights in Ontex
to 3.69%.

On March 25, 2019, Black Creek Investment Management Inc. notified Ontex that it had, as a result of sales of shares, crossed
below the threshold of 3.00% of the total number of voting rights in Ontex.

On May 13, 2019, Zadig Gestion (Luxembourg) SA notified Ontex that it had, as a result of sales of shares, crossed below the
threshold of 3.00% of the total number of voting rights in Ontex.

On May 14, 2019, Bank of America Corporation notified Ontex that it holds, as a result of the acquisition of voting securities or
voting rights, 7,010,239 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex
to 8.51%.

On May 16, 2019, Bank of America Corporation notified Ontex that it had, as a result of sales of shares, crossed below the
threshold of 5.00% of the total number of voting rights in Ontex.

On May 30, 2019, Bank of America Corporation notified Ontex that it holds, as a result of the acquisition of voting securities or
voting rights, 4,544,722 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex
to 5.52%.

On May 30, 2019, Bank of America Corporation also notified Ontex that it had, as a result of sales of shares, crossed below the
threshold of 5.00% of the total number of voting rights in Ontex.

On June 5,2019, ENA Investment Capital notified Ontex that it holds, as a result of the acquisition of voting securities or voting
rights, 2,621,528 shares in Ontex and so has crossed the threshold of 3.00% of the total number of voting rights in Ontex to
3.18%.

On August 2, 2019, Bank of America Corporation notified Ontex that it holds, as a result of the acquisition of voting securities or
voting rights, 4,174,240 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex
to 5.07%.

On August 5, 2019, Bank of America Corporation notified Ontex that it had, as a result of sales of shares, crossed below the
threshold of 3.00% of the total number of voting rights in Ontex.
On August 6, 2019, Bank of America Corporation notified Ontex that it holds, as a result of the acquisition of voting securities or
voting rights, 4,403,856 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex
to 5.35%.
On August 13, 2019, Black Creek Investment Management Inc. notified Ontex that it holds, as a result of the acquisition of voting
securities or voting rights, 2,483,000 shares in Ontex and so had crossed the threshold of 3.00% of the total number of voting
rights in Ontex to 3.02%.
On August 21, 2019, ENA Investment Capital notified Ontex that it holds, as a result of the acquisition of voting securities or voting
rights, 4,223,768 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex to
5.13%.

52

52 ONTEX INTEGRATED ANNUAL REPORT 2019

INNOVATION/ RESPONSIBLE FINANCIAL CORPORATE FINANCIAL SUSTAINABILITY ADDITIONAL
PEOPLE
DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

On September 10, 2019, CIAM notified Ontex that it holds, as a result of the acquisition of voting securities or voting rights,
2,614,990 shares in Ontex and so had crossed the threshold of 3.00% of the total number of voting rights in Ontex to 3.18%.
On September 18, 2019, Black Creek Investment Management Inc. notified Ontex that it had, as a result of sales of shares,
crossed below the threshold of 3.00% of the total number of voting rights in Ontex.

On September 26, 2019, ENA Investment Capital notified Ontex that it holds, as a result of the acquisition of voting securities or
voting rights, 4,223,768 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex
to 5.13%.

On October 7, 2019, Assenagon SA notified Ontex that it holds, as a result of the acquisition of voting securities or voting rights,
2,961,131 shares in Ontex and so has crossed the threshold of 3.00% of the total number of voting rights in Ontex to 3.60%.

On October 8, 2019, Assenagon SA notified Ontex that it holds, as a result of the disposal of voting securities or voting rights,
823,414 shares in Ontex and so has crossed below the threshold of 3.00% of the total number of voting rights in Ontex.
On October 21,2019, Bank of America Corporation notified Ontex that it had, as a result of sales of shares, crossed below the
threshold of 5.00% of the total number of voting rights in Ontex.

On November 6, 2019, ENA Investment Capital notified Ontex that it holds, as a result of the acquisition of voting securities or
voting rights, 8,392,504 shares in Ontex and so has crossed the threshold of 10.00% of the total number of voting rights in Ontex
to 10.19%.

On December 3, 2019, Morgan Stanley notified Ontex that it holds, as a result of the acquisition of voting securities or voting
rights, 4,202,626 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex to
5.10%.

On December 24, 2019, Bank of America Corporation notified Ontex that it holds, as a result of the acquisition of voting securities
or voting rights, 6,139,439 shares in Ontex and so has crossed the threshold of 5.00% of the total number of voting rights in Ontex
to 7.46%.
On December 27, 2019, Bank of America Corporation notified Ontex that it had, as a result of the disposal of voting securities or
voting rights, crossed below the threshold of 5.00% of the total number of voting rights in Ontex.

On December 27, 2019, ENA Investment Capital notified Ontex that it holds, as a result of the disposal of voting securities or
voting rights, 1,757,385 shares in Ontex and has so crossed below the threshold of 3.00% of the total number of voting rights in
Ontex to 2.13%. ENA Investment Capital also notified Ontex that it holds 8,562,481 equivalent financial instruments in Ontex or
10.40% of the total number of voting rights in Ontex if all the instruments are exercised. Consequently, ENA Investment Capital
remained above the threshold of 10.00% of the total number of voting rights in Ontex with 12.53%.

We refer to our website for transparency declarations received after December 31, 2019.

2.3. Shareholder structure

The shareholder structure of the Company on December 31, 2019 3 was, based on the transparency declarations received by the
Company, as follows:
Date threshold
Shareholders Shares %4 crossed
Groupe Bruxelles Lambert SA 16,454,453 19.98% December 3, 2018
ENA Investment Capital 8,562,481 12,53% 5 November 6, 2019
Morgan Stanley 4,202,626 5,10% December 3, 2019
Janus Capital Management LLC 3,424,055 4,75% November 10, 2018
The Pamajugo Irrevocable Trust 2,722,221 3,64% February 29, 2016
CIAM 2,614,990 3,18% September 10, 2019

2.4. Dealing and Disclosure Code

On June 3, 2014, the Board approved the Ontex Dealing and Disclosure Code (the “Dealing and Disclosure Code”) in accordance
with provision 3.7 of the 2009 Corporate Governance Code. The Dealing and Disclosure Code was subsequently amended on
April 2, 2015 and most recently on June 28, 2016. The Dealing and Disclosure Code restricts transactions in Ontex Group NV
securities by members of the Board and of the Management Committee, and by certain senior employees of the Ontex Group
during closed and prohibited periods. The Dealing and Disclosure Code also contains rules concerning the internal approval of
intended transactions, as well as the disclosure of executed transactions through a notification to the Belgian Financial Services
and Markets Authority, and disclosure of inside information. The Corporate Legal Counsel is the Compliance Officer for purposes
of the Dealing and Disclosure Code.

3
Updates subsequent to December 31, 2019 are described on our website (http://www.ontexglobal.com/ShareInformation).
4
Percentage based on the outstanding share capital of the Company at the time of the declaration.

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3. BOARD AND BOARD COMMITTEES

3.1 Board composition
Pursuant to the 2009 Corporate Governance Code, at least half of the directors should be non-executive and at least three
directors should be independent in accordance with the criteria set out in Article 526ter of the Belgian Companies Code and the
2009 Corporate Governance Code. The composition of the Board as at December 31, 2019 complies with these
recommendations.

On December 31, 2019, the Board was composed as follows:

Other Mandates per Mandate Mandate
Name Mandate Board December 31, 2019 Since Expires
Chairman, Independent Barco NV, GIMV, Recticel
Revalue BVBA,
Director NV, Scandinavian Tobacco 2015 2022
represented by Luc Missorten (1)
Group, Mateco
Regina SARL, Independent Director
A drop in the ocean 2017 2021
represented by Regi Aalstad (2)
Independent Director Fluidra, Pernod Ricard,
Esther Berrozpe 2019 2023
Roca, Tasty Bidco
Independent Director Euroclear SA,
Econoholding NV, QRF
Inge Boets BVBA,
Management NV, Triginta, 2014 2022
represented by Inge Boets
La Scoperta BVBA, VZW
Altijd Vrouw
Michael Bredael Non-Executive Director Upfield Group BV 2017 2021
Non-Executive Director Bureau Veritas, Imerys,
Aldo Cardoso Worldline, DWS (Deutsche 2019 2023
Wealth Management)
Independent Director Laeringsverkstedet AS,
Tegacon Suisse GmbH, Laeringsverkstedet
represented by Gunnar Gruppen AS, CK CreKids 2017 2022
Johansson Germany GmbH, CreaKids
GmbH
Desarrollo Empresarial Joven Non-Executive Director
Member of the World
Sustentable SC, represented by 2016 2020
Economic Forum
Juan Gilberto Marin Quintero

Jonas Deroo was appointed as Corporate Secretary by the Board on May 8, 2015.
(1) As communicated in our press release of March 3,2020, Luc Missorten will resign from it position as Independent Director as of the General
Meeting of 25 May 2020. The Board has decided, upon recommendation of the Remuneration and Nomination Committee, to propose to the
general meeting to appoint Hans Van Bylen as Independent Director. Subsequent and subject to the approval of the appointment by the general
meeting, the Board has expressed the intention to appoint Mr. Hans Van Bylen as Chairman.
(2) On 27/06/2019 the Board has resolved, by way of cooptation, on the replacement of Regi Aalstad by her management company, Regina
SARL. The said replacement will be submitted for ratification at the ordinary general meeting of shareholders on 25 May 2020.

The following paragraphs set out the biographical information of the current members of the Board, including information on other
director mandates held by these members.

Luc Missorten
Chairman of the Board of Directors, Independent Director
Luc Missorten was appointed as Independent Director of Ontex Group NV as of June 30, 2014. On April 10,
2015, Luc Missorten was appointed Chairman, as replacement for Paul Walsh. On May 26, 2015, Revalue
BVBA, with Luc Missorten as its permanent representative, was appointed as Independent Director to replace
Luc Missorten who resigned. Luc Missorten holds a law degree from the Catholic University of Leuven, a Certificate of Advanced
European Studies from the College of Europe, Bruges and an LL.M from the University of California, Berkeley. In the past, Luc
Missorten served as a Vice President of Citibank from 1981 to 1990, and held the function of Corporate Finance Director for
Interbrew from 1990 to 1995. From 1995 to 1999, he served as CFO for Labatt Brewing Company. Afterwards, Luc Missorten
held the function of Chief Financial Officer at Interbrew (now AB InBev) from 1999 until 2003, and of CFO at UCB from 2003 to
2007. Luc Missorten has been the Chief Executive Officer and a Board member of Corelio from 2007. As from September 2014,
he resigned as Chief Executive Officer from Corelio. Currently, Luc Missorten is also an Independent Director of Barco, chairs its
Audit Committee and is a member of its Remuneration Committee. In addition, he is an Independent Director of GIMV, where he
chairs the Audit Committee. Further, Luc Missorten is an Independent Director at Recticel, where he chairs the Audit Committee
and is a member of its Remuneration Committee. He is also Independent Director at Scandinavian Tobacco Group and is a
member of its Audit and Risk Committee and its Remuneration and Nomination Committee. He is also an Independent Board
member at Mateco.

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Regi Aalstad
Independent Director
Regi Aalstad has over 25 years of experience in global FMCG. Ms. Aalstad has held Regional General Manager
and Vice President positions with Procter & Gamble in Asia, Europe, Middle East and Africa. She joined P&G
in the Nordics in 1988 and from 1996 to 2014 held leadership roles in emerging markets. Regi chairs the
humanitarian organization ‘A Drop in the Ocean’, supporting refugees in Greece. She advises and helps to
found digital start-ups from Switzerland, where she resides. Regi has Non-Executive Director experience with public industry-
leading companies operating globally in telecom, digital services and sanitary sector. She holds a Master of Business
Administration in International Business from University of Michigan, USA.

Esther Berrozpe
Independent Director
Esther Berrozpe was appointed on May 24, 2019 as an Independent Director. Esther has over 25 years of
experience in the consumer goods area through marketing roles within FMCG at Paglieri (personal care), Sara
Lee (underwear) and Wella (cosmetics) and senior P&L leadership roles at Whirlpool (BTC and BTBTC) in
Europe and in the USA. In her last role at Whirlpool, Esther was member of the Global Executive Committee as
EVP and President of Europe, Middle East and Africa, having the full P&L responsibility for its $5 billion business in EMEA, with
24M employees across 35 countries, 15 production sites and distribution to more than 140 countries. Esther is currently a member
of the Board of Directors of Pernod Ricard, Fluidra, Roca and Tasty Bidco.

Inge Boets
Independent Director
Inge Boets BVBA, with Ms. Boets as its permanent representative, was appointed as Independent Director of
Ontex Group NV as of June 30, 2014. Inge currently chairs the Audit and Risk Committee. She holds a master
degree in applied economics from the University of Antwerp, Belgium. She was a partner with Ernst & Young
from 1996 through 2011 where she was the Global Risk leader and held several other roles in audit and
advisory. Currently, Inge is also an Independent Director and chairs the Audit and Risk Committee of Euroclear SA, She chairs
the Board of the Econopolis Group and of QRF City retail. In addition, Inge Boets BVBA, with Ms. Boets as its permanent
representative, is the manager of La Scoperta BVBA.

Michael Bredael
Non-Executive Director
Michael Bredael is Investment Officer at Groupe Bruxelles Lambert (GBL) since 2016. He started his career at
Towers Watson as a consultant in the United States (Atlanta and New York) in 2003 before joining the BNP
Paribas Group in 2007. Michael held various Investment Banking positions at BNP Paribas, across different
offices (New York, Paris, Brussels and London), particularly focusing on cross-border M&A transactions. From
2014 to 2016, he was Head of the M&A Execution Group of BNP Paribas London. Michael holds a masters degree in applied
economics from EHSAL (KU Leuven). He is Director of Upfield Group BV as a representative of Groupe Bruxelles Lambert. Upfield
Group BV is a private company incorporated in The Netherlands, active in the consumer goods industry (plant-based nutrition).

Aldo Cardoso
Non-Executive Director
On May 24, 2019, Aldo Cardoso was appointed as a Non-Executive Director. Aldo Cardoso is the Chairman of
the Board of Directors at Bureau Veritas and a Senior Advisor to CVC. Aldo is a member of the Board of
Directors of Imerys, Worldline and DWS (Deutsche Wealth Management – Francfort). Aldo spent 24 years with
Arthur Andersen, joining as a junior staff member and rising to Senior Partner, with various audit and consulting assignments, and
then multinational and multicultural management roles. Subsequently, Aldo held the functions of Non-Executive Chairman of
Andersen Worldwide from 2000 to 2003, President of Andersen for the Western European region from 1998 to 2002, and President
of Andersen France from 1993 to 2002. Aldo has been Senior Advisor at Deutsche Bank (Global Banking – Paris) from 2010 to
2014 and then at Deutsche Bank infrastructure fund in London from 2015 to 2018. Further, he has been a member of the Lehman
Brothers European Advisory Committee (2004 to 2008), and has served on the Boards of various listed companies such as:
Orange, Accor, Rhodia, Gecina, Mobistar, as well as numerous private companies in various countries.

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Gunnar Johansson
Independent Director
Gunnar Johansson was appointed as Independent Director of Ontex Group NV as of June 30, 2014. Gunnar
Johansson was appointed Chairman of the Remuneration and Nomination Committee on April 10, 2015,
replacing Luc Missorten. On May 26, 2015, Tegacon AS, with Gunnar Johansson as its permanent
representative, was appointed as Independent Director to replace Gunnar Johansson who resigned. He holds
an MBA from Norges Handelshøyskole in Bergen, Norway. Gunnar Johansson has vast experience in emerging markets,
business-to-business and FMCG. Prior to starting Tegacon Suisse GmbH, he held a number of positions within SCA AB, a global
company in the tissue, femcare, baby diaper and incontinence care industries. Gunnar Johansson worked with SCA from 1981 to
2009, the last years as Global President of the Hygiene Category. He was also a member of the board of Orkla Brands, the largest
FMCG company in Norway. Currently, Gunnar Johansson works as a Senior Executive Advisor at his own company, Tegacon
Suisse GmbH. He is also Chairman of the Board of Laeringsverkstedet AS, Laeringsverkstedet Gruppen AS, CK CreKids Germany
GmbH and CreaKids GmbH.

Juan Gilberto Marín Quintero

Non-Executive Director
Juan Gilberto Marín Quintero was appointed as Non-Executive Director of the Ontex Group as from May 25,
2016. Juan Gilberto Marín Quintero is the founder and former chairman of Grupo Mabe. He holds a degree in
Business Administration from Universidad Iberoamericana, Mexico City, Mexico, an MBA from Instituto
Panamericano de Alta Direccion, Mexico City and a postgraduate in International Business from the British Columbia University,
Vancouver, Canada as well as a diploma in Mergers and Acquisitions from Stanford University. Formerly, Juan Gilberto Marín
Quintero has been the President of the National Council of Foreign Trade, Conacex, former President of the Advisory Board of
Citibanamex in Puebla, and former President of the Advisory Board of NAFINSA in Puebla and Tlaxcala, member of the Advisory
Board of Telmex and Bancomext. In addition, Juan Gilberto Marín Quintero is a member of the World Economic Forum and has
been president at the Latin America Entrepreneur Council and has been president of the Board of Universidad de las Americas.
Furthermore, Juan Gilberto Marín Quintero currently also develops Eolic Energy, consumer products, restaurants, textile industry
and real estate in Mexico.

3.2. Board: evolution in composition during 2019

On December 31, 2019, the Board of the Company was composed of eight members. All Board members are Non-Executive
Directors.
There are currently five Independent Directors within the meaning of Article 526ter of the Belgian Companies Code: Revalue
BVBA (with Luc Missorten as its permanent representative), Tegacon Suisse GmbH (with Gunnar Johansson as its permanent
representative), Inge Boets BVBA (with Inge Boets as its permanent representative), Regina SARL (with Regi Aalstad as its
permanent representative) and Esther Berrozpe. Further there are currently three Non-Executive Non-Independent Directors:
Desarrollo Empresarial Joven Sustentable SC (with Juan Gilberto Marin Quintero as its permanent representative), Michael
Bredael and Aldo Cardoso.

3.3. Gender diversity

As at December 31, 2019, the Company had 3 female Board members, ie, Inge Boets, as permanent representative of Inge Boets
BVBA, Regi Aalstad, as permanent representative of Regina SARL and Esther Berrozpe, representing 37.5% of the Board
members. Since its establishment, the Remuneration and Nomination Committee evaluates the composition of the Board on a
yearly basis and formulates suggestions to the Board, while, among other things, taking into account the gender composition. The
Company does comply with the requirement that at least one-third of the members of the Board is of the opposite gender as the
gender of the majority of the Board in accordance with Article Art. 7:86. of the Belgian Code of Companies and Associations.

Second, the Company has developed a diversity policy.

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3.4. Functioning of the Board

During 2019, the Board met ten times. The attendance rate was as follows:

Name Board Attendance Attendance Rate

Revalue BVBA, represented by Luc Missorten 10/10 100%
Regina SARL, represented by Regi Aalstad 10/10 100%
Esther Berrozpe 5/5(1) 100%
Inge Boets BVBA, represented by Inge Boets 10/10 100%
Michael Bredael 10/10 100%
Aldo Cardoso 3/5(2) 60%
Tegacon Suisse GmbH, represented by Gunnar Johansson 10/10 100%
Desarrollo Empresarial Joven Sustentable SC, represented by Juan
9/10 90%
Gilberto Marin Quintero
(1) Esther Berrozpe has been appointed as a member of the Board of Directors on 24/05/2019 and only 5 meetings of the Board of Directors
occurred after that date.
(2) Aldo Cardoso has been appointed as a member of the Board of Directors on 24/05/2019 and only 5 meetings of the Board of Directors
occurred after that date.

On June 28, 2016 the Board established a management committee (the “Management Committee”) to which it has delegated all
its management powers, except (i) those powers expressly reserved to the Board of Directors by law, (ii) matters belonging to the
general policy of the Company, and (iii) the supervision of the Management Committee, such powers being further described
under chapter 3.5 of this Corporate Governance Statement.
Major matters reviewed by the Board during 2019 include, among others:

The monitoring and review of the implementation of the T2G program to accelerate the delivery of value;

 The approval of the half-year and quarterly financial statements and corresponding financial reports;
 The financial and overall performance of the Ontex group;

 Various investments and assessments of M&A projects; and

 General strategic, financial and operational matters of the Company.

3.5. Board Committees

Audit and Risk Committee
In compliance with Article 7.99, §2 of the Belgian Code of Companies and Associations and the 2009 Corporate Governance
Code, all members of the Audit and Risk Committee are Non-Executive and at least one Director is independent. .
On December 31, 2019, the Audit and Risk Committee was composed as follows:

Name Mandate A&R Committee Mandate Since Mandate Expires

Chairwoman of the Committee,
Inge Boets BVBA, represented by Inge Boets 2018 2022
Independent Director
Member, Independent
Revalue BVBA, represented by Luc Missorten 2018 2022
Director
Member, Non-Executive
Michael Bredael 2018 2022
Director

During 2019, the Audit and Risk Committee met four times. The attendance rate was as follows:
A&R Committee Attendance Rate
Name
Meetings Attended A&R Committee
Inge Boets BVBA, represented by Inge Boets 4/4 100%
Revalue BVBA, represented by Luc Missorten 4/4 100%
Michael Bredael 4/4 100%

All members attended all meetings. Marc Gallet, VP Corporate Finance, is appointed as Secretary of the Audit and Risk
Committee.

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The Audit and Risk Committee is entrusted with the tasks set out in Article 7.99, §4 of the Belgian Code of Companies and
Associations. It decided on the agenda, frequency and topics of its meetings, and reviewed the external and internal audit plan,
the half year financial statements and the external review on the half-year financial statements, the quarterly financial information
contained in the Q1 and Q3 trading updates, the key risks, and their role and responsibility.

As required by the 2009 Belgian Companies Code, Ontex Group NV confirms that (i) the Audit and Risk Committee is composed
of Non-Executive Directors only and (ii) the Audit and Risk Committee possesses the adequate expertise and experience in the
field of the activities of the Company and (iii) Inge Boets, as permanent representative of Inge Boets BVBA, Chairman of the Audit
and Risk Committee, is an Independent Director and possesses the adequate expertise and experience in the field of accounting
and audit. Reference is made to her biography under chapter 3.1 of this Corporate Governance Statement.

The mandate of PricewaterhouseCoopers Bedrijfsrevisoren BV (“PwC”) as statutory auditor of the Company will be proposed to
be renewed at the upcoming shareholders meeting of 25 May 2020 and the replacement of the representative of
PricewaterhouseCoopers Bedrijfsrevisoren BV ("PwC") will be submitted for approval.

Remuneration and Nomination Committee

In compliance with Article 526quater,§2 of the Belgian Code of Companies and Association and the 2009 Corporate Governance
Code, all members of the Remuneration and Nomination Committee are Non-Executive and the majority of the members are
independent in accordance with the criteria set out in Article 526ter of the Belgian Code of Companies and Associations and the
2009 Corporate Governance Code.

On December 31, 2019, the Remuneration and Nomination Committee was composed as follows:

Name Position Mandate Since Mandate Expires

Tegacon Suisse GmbH, represented by Gunnar Chairman of the Committee,
2018 2022
Johansson Independent Director
Revalue BVBA, represented by Luc Missorten Independent Director 2018 2022
Regina SARL, represented by Regi Aalstad Independent Director 2018 2022
Michael Bredael Non-Executive Director 2018 2022

During 2019, the Remuneration and Nomination Committee met five times. The attendance rate was as follows:
R&N Committee Attendance Rate
Name Meetings Attended R&N Committee
Tegacon Suisse GmbH, represented by Gunnar
5/5 100%
Johansson
Revalue BVBA, represented by Luc Missorten 5/5 100%
Regina SARL, represented by Regi Aalstad 5/5 100%
Michael Bredael 5/5 100%
All members attended all meetings. Astrid De Lathauwer, Executive VP HR is appointed as Secretary of the Remuneration and
Nomination Committee. Charles Bouaziz attended all meetings.

The Remuneration and Nomination Committee is entrusted with the tasks set out in Article 526quater, §5, of the Belgian Code of
Companies and Associations. It decided on the agenda, frequency and topics of the meetings, and reviewed the context and
history with respect to Board composition, executive remuneration and terms and conditions of employment. The Remuneration
and Nomination Committee also reviewed the performance of the Ontex Group against the key performance indicators (“KPI’s”)
and targets determined for the 2019 performance year.

As required by the Belgian Companies Code, Ontex Group NV confirms that (i) the Remuneration and Nomination Committee is
composed of Non-Executive Directors only and a majority of Independent Directors, and (ii) Luc Missorten, Gunnar Johansson,
Regi Aalstad and Michael Bredael possess the adequate expertise and experience in the field of remuneration. Reference is made
to their biography under chapter 3.1 of this Corporate Governance Statement.

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Management Committee
On June 28, 2016, the Board has decided to establish a Management Committee (directiecomité) within the meaning of Article
524bis of the Belgian Companies Code to be effective as of July 1, 2016 which has the power to perform all actions that are
necessary or useful for the realization of the Company’s purpose, except for those actions that are, by law or pursuant to the
Articles of Association or the Corporate Governance Charter, reserved to the shareholders’ meeting or to the Board, including (i)
matters belonging to the general policy of the Company, and (ii) the supervision of the Management Committee, or to other
management bodies. 6

Accordingly, the powers of the Management Committee include, without limitation, the operational management and organization
of the Company, developing or updating on a yearly basis the overall strategy and business plan of the Company and submitting
it to the Board for approval, monitoring the implementation of the overall strategy and business plan of the Company, supporting
the CEO in the daily management of the Company and the exercise of his responsibilities, preparing the Company’s financial
statements and presenting accurate and balanced evaluations of the Company’s financial situation to the Board and providing the
Board with the information it needs in order to properly fulfil its duties, setting up and maintaining policies related to the risk profile
of the Company and systems to identify, assess, manage and monitor financial and other risks within the framework set out by
the Board and the Audit and Risk Committee.
The size and composition of the Management Committee is determined by the Board acting on a proposal of the CEO, who chairs
the Management Committee. Members of the Management Committee are appointed by the Board based on a proposal of the
CEO and upon recommendation of the Remuneration and Nomination Committee. Members of the Management Committee are
appointed for an indefinite period and can be dismissed by the Board at any time or cease to be a member of the Management
Committee if their management agreement with the Company terminates.

The CEO leads and chairs the Management Committee and decides on the allocation of responsibilities among the members of
the Management Committee. The CEO is vested with the day-to-day management of the Company and the execution of the
resolutions of the Board and the resolutions of the Management Committee, unless decided otherwise by the Management
Committee. In addition, he exercises the special and limited powers assigned to him by the Board or the Management Committee.
The CEO reports regularly to the Board, including on the actions taken by the Management Committee.

In the framework of bringing the Articles of Assocation and governance of the Company in accordance with the Belgian Code of
Companies and Assocations, the Board has thoroughly reviewed the available options, and will submit to the general meeting a
proposed governance model for approval.

On December 31, 2019, the Management Committee, consisted of the following members:
Member of the
Management Appointed to
Committee Management
Name Position Since Committee
Chairman of the Management Committee –
Charles Bouaziz 2013 2016
Chief Executive Officer
Philippe Agostini Executive Vice-President Procurement 2013 2016
Armando Amselem President of the AMEAA Division 2016 2016
Laurent Bonnard Executive Vice-President Sales & Marketing 2013 2016
Astrid De Lathauwer Executive Vice-President Human Resources 2014 2016
Executive Vice-President R&D, Quality &
Annick De Poorter 2009 2016
Sustainability
Chief Financial Officer and Executive Vice-
Charles Desmartis 2019 2019
President Finance, Legal & IT
Marex BVBA with Xavier Lambrecht
President Healthcare Division 2013 2016
as its permanent representative
Axel Löbel Executive Vice-President Operations 2019 2019
Artipa BVBA with Thierry Navarre as
Chief Transformation Officer 2009 2016
its permanent representative
Thierry Viale President Europe Division 2013 2016
During 2019, the Management Committee met monthly and discussed strategic, business, financial and operating matters and
Group projects.

6
The specific powers as well as the composition and functioning of the Management Committee are further described in the Corporate
Governance Charter.

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The following paragraphs set out the biographical information of the current members of the Management Committee, including
information on other Director mandates held by these members.

Charles Bouaziz
Chairman of the Management Committee and Chief Executive Officer
Charles Bouaziz was appointed Chief Executive Officer of the Ontex Group in early 2013. Prior to this, he held
a number of senior positions during his 25 years in the consumer goods industry. He spent his early career at
Michelin and Procter & Gamble. In 1991, he joined PepsiCo as Marketing Director for France & Belgium and
held a range of senior positions until 2008, when he became President of PepsiCo Western Europe. In 2010, he left to become
CEO of Monoprix, then in 2010 joined PAI Partners as member of the Food & Consumer Goods sector team and later as head of
the Portfolio Performance Group. Charles graduated from Ecole Supérieure des Sciences Economiques et Commerciales
(ESSEC 1985). Charles is a supervisory Board member at PAI Partners since 2013 and also holds position at Les Amis de
Vaulserre et du Trieves.

Philippe Agostini
Executive Vice-President Procurement
Philippe Agostini previously held various senior positions in Purchasing and Supply Chain for 30 years, at Mars,
McDonald’s, Lactalis, Pechiney-Alcan, JohnsonDiversey, and most recently Famar, where he held the position
of Group Purchasing VP. Philippe holds a degree from the Engineer School École Nationale Supérieure des
Arts et Métiers and a degree of Purchasing Master Management des Achats Industriels.

Armando Amselem
President of the AMEAA Division
He joined the Ontex Group from Vita Coco where he served as Global Chief Financial Officer. Prior to Vita
Coco, Armando Amselem held various management positions in Europe and the US during his 20-year career
with PepsiCo, including General Manager of Tropicana North America and General Manager of PepsiCo
France. He also worked for Santander Investment Bank, and Alella Vinicola. Armando holds an MBA from New
York University Leonard Stern School of Business, USA, and a master’s degree in Enology and a bachelor’s degree in Agronomic
Engineering and Food Sciences from Universidad Politecnica de Barcelona in Spain.

Laurent Bonnard
Executive Vice-President Sales & Marketing
Laurent Bonnard was appointed Group Sales Director for the Ontex Group on September 9, 2013. As from 1
January 2019, he took up the function of Group Sales and Marketing Director for the Ontex Group NV. He
has previously held various senior positions within Sales and Marketing in Mars and Quaker. Subsequently
he joined PepsiCo, as Sales Director France, and last he held the function as VP Business Development for Europe.

Astrid De Lathauwer
Executive Vice-President Human Resources
Astrid De Lathauwer joined the Ontex Group after holding a number of leading human resources functions.
Astrid held international HR leadership roles at AT&T in Europe, at their US headquarters and at Monsanto.
For 10 years, Astrid was the Chief HR Officer of Belgacom. Before joining the Ontex group, she was Managing
Director of Acerta Consult. Astrid holds degrees in Political & Social Science and History of Art. Astrid was
appointed as a manager of Ontex BVBA as of October 1, 2014. Astrid chairs the Remuneration Committee of Colruyt and Immobel.

Annick De Poorter
Executive Vice-President R&D, Quality and Sustainability
Annick De Poorter joined the Ontex Group in 2003 as the R&D Manager of Feminine Hygiene and was
promoted to R&D and Quality Director in January 2009. Before joining the Group, she worked at Libeltex NV
in Belgium, and prior to that, she was a Scientific Researcher at University of Ghent, Belgium. Annick holds a
master’s degree in Civil Engineering in Textiles from the University of Ghent, Belgium.

Charles Desmartis
Chief Financial Officer and Executive Vice-President Finance, Legal & IT
Charles Desmartis joined the Ontex Group in November 2018. Charles Desmartis holds an MBA from the Ecole
des Hautes Etudes Commerciales in Paris and a Master of Science in Management from Stanford University,
US. Prior to joining the Ontex Group, Charles Desmartis has held senior finance and CFO positions at
Schlumberger, Gemalto and subsequently Europcar before joining Carrefour as Group Financial Controller.
Most recently, he held the CEO position for the Carrefour Group in Brazil, where he led the preparation and execution of the IPO
of the company.

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Xavier Lambrecht
President of the Healthcare Division
Xavier Lambrecht, permanent representative of Marex BVBA, joined the Ontex Group in early 2009 as Sales
& Marketing Director of the Healthcare Division. Prior to that, he held different roles within Sales Development,
Marketing and Business Planning at Imperial Tobacco. Xavier holds a master’s degree of Commercial
Engineering from the University of Leuven, Belgium.

Axel Löbel
Executive Vice-President Operations
Axel Löbel joined the Ontex Group in February 2019. He holds a Master’s degree in Electrical Engineering –
subject area communications – from one of the top German Universities, and has more than twenty-five years
of professional experience in Operations. Prior to joining the Ontex Group, Axel Löbel has held various
positions within Procter and Gamble Baby Care evolving from electrical support to production, logistics and
then leading the development and implementation of global product upgrades. In 2008, he led a green field start-up of a Procter
& Gamble diaper plant in Cairo, Egypt. In 2013 he joined Melitta as COO, leading the end-to-end supply chain of their consumer
goods business. Most recently, he held the General Manager position of one of the key fulfilment centers of Amazon, based in
Prague.

Thierry Navarre
Chief Transformation Officer
Thierry Navarre, permanent representative of Artipa BVBA, joined the Ontex Group in 2006 as the Group
Supply Chain Director and was appointed Chief Operating Officer in 2009. Before 2006, he was Director of
Strategy & Development at InBev in France (now, AB InBev), and held other senior management positions in
supply and distribution at InBev between 2001 and 2005. Prior to this, between 1997 and 2001 he held various
roles in logistics and distribution at Fort James (now Georgia Pacific), and between 1991 and 1997 at Jamont (now Georgia
Pacific). Thierry is a Board member of Cemminerals and Idlegcy.

Thierry Viale
President of the Europe Division
Thierry Viale was appointed President Europe on January 1, 2019, prior to that, Thierry was General Manager
of the Growth Markets Division and Strategic Development since October 1, 2013. Prior to joining the Ontex
Group, Thierry held a number of senior positions at Procter & Gamble in Western Europe, Russia, Nigeria/West
Africa, Greater China, the Balkans and in India. Thierry holds a Master degree from the Saint Cyr Military
Academy, a Bachelor degree from the Neoma Business School, and a MBA from ESCP Europe.

Changes within the Management Committee composition within 2019

Following an international reorganization, effective January 1, 2020, the actual Management Committee is structured as follows:

Name Position
Charles Bouaziz Chairman of the Management Committee – Chief Executive Officer
Philippe Agostini Executive Vice-President Procurement
Armando Amselem President AMEAA
Laurent Bonnard President Europe
Charles Desmartis Chief Financial Officer and Executive Vice-President Finance, Legal & IT
Astrid De Lathauwer Executive Vice-President Human Resources
Annick De Poorter Executive Vice-President R&D, Quality and Sustainability
Marex BVBA with Xavier Lambrecht as
President Healthcare
its permanent representative
Axel Löbel Executive Vice-President Operations
Artipa BVBA with Thierry Navarre as its
Chief Transformation Officer
permanent representative

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4. RELEVANT INFORMATION IN THE EVENT OF A TAKEOVER BID

Article 34 of the Royal Decree of November 14, 2007 on the obligations of issuers of securities which have been admitted to
trading on a regulated market, requires that listed companies disclose certain items that may have an impact in the event of a
takeover bid.

4.1. Capital Structure

A comprehensive overview of our capital structure as at December 31, 2019 can be found in chapter 2 of this Corporate
Governance Statement.

4.2. Restrictions on transfers of securities

The Company’s Articles of Association do not impose any restrictions on the transfer of shares in the Company. Furthermore, the
Company is not aware of any such restrictions imposed by Belgian law except in the framework of market abuse rules.

4.3. Holders of securities with special control rights

There are no holders of securities with special control rights.

4.4. Employee share plans where the control rights are not exercised directly by the employees
The Company’s shares to be delivered to participants upon exercise of the stock options or vesting of the RSUs or Performance
Shares in the framework of the LTIP are existing ordinary shares in the Company with all rights and benefits attached to such
shares. A more detailed description of the LTIP is set out in the Remuneration Policy and report.

The Company has not set up employee share plans where control rights over the shares are not exercised directly by the
employees.

4.5. Restriction on voting rights

The Articles of Association of the Company do not contain any restrictions on the exercise of voting rights by the shareholders,
provided that the shareholders concerned comply with all formalities to be admitted to the shareholders’ meeting and their voting
rights are not suspended in one of the events set out in the Articles of Association or the Belgian Companies Code. Pursuant to
Article 11 of the Company’s Articles of Association, the Board is entitled to suspend the exercise of rights attaching to shares
belonging to several owners.

The Company is not aware of any restrictions imposed by Belgian law on the exercise of voting rights by the shareholders.

4.6. Rules on appointment and replacement of members of the Board

The term of office of directors under Belgian law is limited to six years (renewable) but the 2009 Corporate Governance Code
recommends that it be limited to four years. The appointment and renewal of directors is proposed by the Board, based on a
recommendation of the Remuneration and Nomination Committee and is subject to approval by the shareholders’ meeting.

4.7. Rules on amendments to the Articles of Association

Save for capital increases decided by the Board within the limits of the authorized capital or a change of the registered office of
the Company (such change not triggering the application of different rules on the use of languages by companies than those that
currently apply to the Company), only an extraordinary shareholders’ meeting is authorized to amend the Company’s Articles of
Association. A shareholders’ meeting may only deliberate on amendments to the Articles of Association if at least 50% of the
share capital is represented. If the above attendance quorum is not reached, a new extraordinary shareholders’ meeting must be
convened, which will validly deliberate regardless of the portion of the share capital represented at the shareholders’ meeting. As
a rule, amendments to the Articles of Association are only adopted if approved by at least 75% of the votes cast. The Belgian
Companies Code provides for more stringent majority requirements in specific instances, such as for modifications of the
Company’s corporate purpose clause.

4.8. Authorized capital

On June 10, 2014, the extraordinary shareholders’ meeting authorized the Board, subject to and with effect as from the closing of
the IPO, to increase the capital of the Company in one or several times by an (aggregate) amount of maximum 50% of the amount
of the registered capital (€340,325,414) as such amount was recorded immediately after the closing of the IPO. Within the
framework of the authorized capital, the Board is authorized to proceed with a capital increase in any form, including, but not
limited to, a capital increase in cash or in kind and by issuance of shares, convertible bonds, warrants or other securities.

The Board is authorized to limit or cancel the preferential subscription rights of the shareholders within the limits and in accordance
with the provisions set out in the Company’s Articles of Association and the Belgian Companies Code.

This authorization includes the limitation or cancellation of the preferential subscription rights for the benefit of one or more specific
persons and in connection with capital increases in the event of a public takeover bid.
The authorization is valid for a term of five years as from the date of the publication of the authorization in the Annexes to the
Belgian State Gazette (Belgisch Staatsblad), ie, five years from July 9, 2014.

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On November 9, 2015, the Company recorded the realization of a capital increase in cash, within the limits of the authorized
capital, resulting in a capital increase of €40,839,036.68 (excluding issue premium in an amount of €73,902,592.52), from
€680,650,828 to €721,489,864.68 as described in chapter 2.1.1. of this Corporate Governance Statement.

On February 29, 2016, the Company recorded the realization of a capital increase in kind, within the limits of the authorized capital,
resulting in a capital increase of €27,226,021.12 (excluding issue premium in an amount of €48,451,722.68), from
€721,489,864.68 to €748,715,885.80 as described in chapter 2.1.2 of this Corporate Governance Statement.

On March 22, 2017, the Company recorded the realization of a capital increase in kind, within the limits of the authorized capital,
resulting in a capital increase of €74,871,580.58 (excluding issue premium in an amount of €145,968,664.42), from
€748,715,885.80 to €823,587,466.38 as described in chapter 2.1.2 of this Corporate Governance Statement.

On May 25, 2018, the extraordinary general meeting of shareholders renewed the authorization to the Board with respect to
authorized capital under the following conditions;

The Board of Directors may increase the registered capital of the Company in one or several times by an amount cumulated over
5 years of:

- maximum 50% of the amount of the registered capital as such amount is recorded immediately after the general meeting of
shareholders of 25 May 2018, of which maximum 20% of the amount of the registered capital as such amount is recorded
immediately after the general meeting of shareholders of 25 May 2018, in the event of a capital increase with cancellation or
limitation of the preferential subscription rights of the shareholders,

This authorization may be renewed in accordance with the relevant legal provisions. The Board of Directors can exercise this
power of a period of five (5 years) as from the date of publication in the Annexes to the Belgian State Gazette of the amendment
to these articles of association approved by the shareholders’ meeting on 25 May 2018.

4.9. Acquisition of own shares

On May 25, 2018 the Extraordinary Shareholders’ meeting renewed the authorization towards the Board with respect to the
acquisition of own shares subject to the following conditions:
The Company may, without any prior authorization of the shareholders' meeting, in accordance with Articles 620 ff. of the Belgian
Companies Code and within the limits set out in these provisions, acquire, on or outside the stock market, up to 10% of its own
shares, profit-sharing certificates or associated certificates for a price which will respect the legal requirements, but which will in
any case not be more than 10% below the lowest closing price in the last thirty trading days preceding the transaction and not
more than 5% above the highest closing price in the last thirty trading days preceding the transaction. This authorization is valid
for five years from 25 May 2018. This authorization covers the acquisition on or outside the stock market by a direct subsidiary
within the meaning and the limits set out by Article 627, indent 1 of the Companies Code. If the acquisition is made by the Company
outside the stock market, even from a subsidiary, the Company shall comply with Article 620, §1, 5° of the Companies Code.

On May 13, 2019, the Company bought 63,377 own shares, as further described above, cfr chapter “capital and capital evolutions”.

4.10. Material agreements to which Ontex is a party containing change of control provisions
4.10.1. Senior Facilities Agreement
The Company, and certain of its subsidiaries as guarantors, entered into a new 5-year multicurrency credit facilities agreement
dated November 26, 2017 (the “Senior Facilities Agreement 2017”) for an amount of €900,000,000, comprising a term loan of
€600,000,000 and a revolving credit facility of €300,000,000, for the purpose of among others repaying the Senior Facilities
Agreement 2014 as amended and/or restated from time to time, and for general corporate purposes.

The Senior Facilities Agreement 2017 contains provisions that may be triggered in the event of a change of control over the
Company. More specifically, the Senior Facilities Agreement provides, among others, that any person or group of persons acting
in concert acquiring, directly or indirectly, beneficial ownership of the issued capital of the Company having the right to cast more
than 50% of the votes capable of being cast at a shareholders’ meeting (“Change of Control”) may lead to a mandatory prepayment
and cancellation under the Senior Facilities Agreement.

4.10.2. Facilities Agreements

The Company, and certain of its subsidiaries as guarantors, entered into a new 7-year multicurrency credit facilities agreement
dated December 4, 2017 (the “Facilities Agreement 2017”) for an amount of €250,000,000, comprising a term loan of
€150,000,000 and an accordion of €100,000,000, for the purpose of among others repaying the Senior Secured Notes, and for
general corporate purposes.
The Facilities Agreement 2017 contains provisions that may be triggered in the event of a change of control over the Company.
More specifically, the Senior Facilities Agreement provides, among others, that any person or group of persons acting in concert
acquiring, directly or indirectly, beneficial ownership of the issued capital of the Company having the right to cast more than 50%
of the votes capable of being cast at a shareholders’ meeting (“Change of Control”) may lead to a mandatory prepayment and
cancellation under the Facilities Agreement.

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4.10.3. Factoring Agreement

The Company entered into a Factoring Agreement dated February 21, 2018, with BNP Paribas Fortis Factor N.V. and KBC
Commercial Finance N.V. (‘Factoring Agreement’); The Factoring Agreement contains provisions that may be triggered in the
event of a change of control over the Company. More specifically, the Factoring Agreement provides, among others, that in the
event the effective control of any party is transferred to others, the other party has the right to terminate the Factoring Agreement.

4.10.4. Hedging Agreement

The Company entered into a ISDA FX Hedging Agreement dated March 12, 2018 with Crédit Agricole Corporate and Investment
Bank (“CACIB”) (“Hedging Agreement”). The Hedging Agreement contains provisions that may be triggered in the event of a
change of control over the Company. More specifically, the Hedging Agreement, provides, among others, a change control,
defined as any person or group of persons acting in concert acquiring, directly or indirectly, beneficial ownership of the issued
share capital of the Company (“Change of Control”), provides CACIB the right to terminate the Hedging Agreement.

4.10.5. Guarantee Agreement

The Company entered into a guarantee agreement dated 6 November 2018 its subsidiary Hygiene Medica SAS and Euler Hermes
NV (hereinafter “Guarantee agreement”), with respect to the guarantee issued by Euler Hermes SA to Land Rheinland, Finanzamt
Mayen, dated 13 November 2018. The guarantee agreement includes provisions that may be trigged in the case of a change of
control. More specifically, the guarantee agreement provides for acceleration in case Ontex Group NV has leased a substantial
part of her assets to a third party, or the Client merges or decides to merge, splits or decides to split, or Ontex Group NV is
absorbed by a third Party.
All Change of Control provisions as listed above are subject to shareholders’ consent in accordance with article 556 of the Belgian
Companies Code, and were approved during by the general meeting of shareholders.

4.11. Severance pay pursuant to termination of contract of Board members or employees

pursuant to a takeover bid
The Company has not concluded any agreement with its Board members or employees which would result in the payment of a
specific severance pay if, pursuant to a takeover bid, the Board members or employees resign, are dismissed or their employment
agreements are terminated.
Please see chapter 8.7 of this Corporate Governance Statement on termination provisions of the members of the Board and the
Management Committee in general.

5. CONFLICTS OF INTERESTS
Each Board member should arrange his or her personal and business affairs in such a way as to avoid any conflict of interests of
a personal, professional or financial nature with the Company, directly or through relatives (including spouse or life companion, or
other relatives (by blood or marriage) up to the second degree and foster children).
In accordance with Article 7.96 of the Belgian Code of Companies and Associations, if a Board member has a direct or indirect
patrimonial interest in a decision or transaction which is the responsibility of the Board, he/she must inform the other Board
members before any decision by the Board is taken and the statutory auditor must also be notified. The conflicted Board member
cannot be present during the deliberations of the Board relating to these transactions or decisions and cannot vote.

No conflicts of interest within the meaning of Article 7.96 of the Belgian Code of Companies and Associations arose in 2019.

6. RELATED PARTY TRANSACTIONS

During 2019, Ontex Group NV has not entered into transactions with related parties within the meaning of Article 7.97 of the
Belgian Code of Companies and Associations.

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7. COMPLIANCE WITH THE 2009 BELGIAN CODE ON CORPORATE GOVERNANCE

The Company is committed to high standards of corporate governance and relies on the Corporate Governance Code as a
reference code. The Corporate Governance Code is based on a “comply or explain” approach. Belgian listed companies must
comply with the Corporate Governance Code but may deviate from those provisions which are not otherwise contained in the
Belgian Companies Code, and provided they disclose the justification for any such deviations in their corporate governance
statement included in the Annual Report in accordance with Article 3.6 §2, 2°, of the Belgian Code of Companies and Associations.

The Company complies with all provisions of the 2009 Corporate Governance Code, except in respect of the following:
 the Company’s Articles of Association allow the Company to deviate from all provisions of Article 520ter of the Belgian
Companies Code and hence to grant shares, stock options and other share-based incentives vesting earlier than three
years after their grant. However, the Company has not yet made use of such authorization and the LTIP, the LTIP 2014,
LTIP 2015, LTIP 2016, LTIP 2017 and LTIP 2018 as well as the LTIP 2019, as described within the Remuneration
Report, provides for a vesting period of three years for the stock options, RSUs and Performance Shares;

 the CEO and certain other members of the Management Committee are entitled, in certain circumstances, to severance
pay which is higher than 12 or 18 months of remuneration if the Company decides to apply the non-competition clauses
in their respective agreements to the fullest extent provided by such agreements (see chapter 8.7 of the Remuneration
Report for a detailed description thereof). In accordance with Article 554, 4th indent, of the Belgian Companies Code,
with respect to Charles Bouaziz and Artipa BVBA, with Thierry Navarre as its permanent representative, the annual
shareholders’ meeting of May 26, 2015 approved a severance payment exceeding 18 months, in certain circumstances.
The Company deems such deviations from the Corporate Governance Code necessary to attract and retain competent
executive directors and managers in the competitive environment in which the Company operates.

EVENTS AFTER THE END OF THE REPORTING PERIOD

COVID-19 is an infectious disease caused by the most recently discovered coronavirus. This new virus and disease were unknown
before the outbreak began in Wuhan, China, in December 2019. Ontex sales in China and other countries of the Far East are not
material, hence the outbreak of the virus in Asia had no significant impact on the financial performance of the Group at the
publication date of this report.

However, based on its assessment of the evolution and spreading of the virus, the World Health Organization characterized it as
a pandemic on March 11, 2020. We source several raw materials from suppliers all over the world and we deliver our products to
customers located in all regions of the world. Further spread of the coronavirus leading to restrictions in the movement of goods
and individuals could lead to disruptions to our supply chain and manufacturing organization, increased logistics costs and delayed
shipments to customers. At the moment of the publication of these consolidated financial statements, the impact of the current
spread of the virus on the financial performance of the Group is limited. We nevertheless will continue to monitor the situation
closely as continuing restrictions due to the virus could adversely affect the results of operations, financial position and
performance in 2020. Based on our analysis and modelling using currently available information, as well as discussions with the
Management of Ontex, we believe the Company has taken the required measures to mitigate the impacts of the pandemic on its
operations and strengthened its funding; even though visibility remains limited as the pandemic is still progressing, the going
concern is not considered to be at risk.

No other significant events occurred after the end of the reporting date which would affect the information mentioned in these
consolidated financial statements.

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8. REMUNERATION REPORT
The remuneration report provides a comprehensive overview of the remuneration awarded to non-executive Directors and
members of the Management Committee of Ontex during 2019. The remuneration report should be read in close conjunction with
the remuneration policy, as the remuneration report contains the result of the application of the remuneration policy during financial
year 2019.
This remuneration report contains more detailed information on the 2019 remuneration and on our remuneration policy than we
have provided in the past. By doing so we wish to become more transparent about the remuneration of the Members of the
Management Committee. This is our response to the request from the investor community to increase transparency on the
alignment between company performance and executive pay.

8.1. Remuneration for Non-Executive Directors

Non-Executive Directors at Ontex receive an annual fixed fee as well as attendance fee. The amounts paid to non-executive
Directors in 2019 are shown in the table below.

# N&R N&R # A&R A&R

# Board Board Committee Committee Committee Committee Total fee
Fixed fee meetings attendance meetings attendance meetings attendance for 2019
Name Mandate (EUR) attended fee (EUR) attended fee (EUR) attended fee (EUR) (EUR)
Revalue
Chairman of
BVBA,
the Board,
represented 120,000 10/10 5.000 5/5 2,500 4/4 2,500 192,500
Independent
by Luc
Director
Missorten
Chairwoman of
Inge Boets
the Audit and
BVBA,
Risk
represented 70,000 10/10 2.500 4/4 4,000 111,000
Committee,
by Inge
Independent
Boets
Director
Chairman of
Tegacon
the
Suisse
Remuneration
GmbH,
and Nomination 70,000 10/10 2.500 5/5 4,000 115,000
represented
Committee,
by Gunnar
Independent
Johansson
Director
Desarrollo
Empresarial
Joven
Sustentable
SC, Non-Executive
60,000 9/10 2.500 82,500
represented Director
by Juan
Gilberto
Marin
Quintero
Regina
SARL,
Independent
represented 60,000 10/10 2.500 5/5 2,500 97,500
Director
by Regi
Aalstad (2)
Michael Non-Executive
60,000 10/10 2.500 5/5 2,500 4/4 2,500 107,500
Bredael Director
Ester Independent
35,000 5/5 2.500 47,500
Berrozpe (1) Director
Aldo Non-Executive
35,000 3/5 2.500 42,500
Cardoso (1) Director

(1) Ester Berrozpe and Aldo Cardoso were appointed as non-executive Director by the AGM on 24 May 2019. Their fixed fee for 2019 has
been pro-rated and represents 7/12ths of the annual fixed fee for their Board mandate.
(2) Regi Aalstad has been replaced by her management company Regina SARL as independent director of Ontex Group NV on 27/06/2019.
6/12th of her board fees have been paid to Regi Aalstad personally and 6/12th of the board fees have been paid to Regina SARL.

8.2. Remuneration for Members of the Management Committee

8.2.1. Introduction
2019 was marked by a change in the operating model of the company. We moved from 5 to 3 Commercial Divisions, we
consolidated manufacturing and supply chain under one head and changed some of the reporting lines. As a result, the
composition of the Management Committee, including the CEO, changed from 14 members in 2018 to 11 members in 2019.

8.2.2. 2019 Short-term Incentive

As outlined in the Remuneration Policy, the short-term incentive of the CEO and the other members of the Management
Committee is determined based on a set of KPIs including net sales, profitability and cash generation. The Ontex Group results
against these targets show a close to on-target performance in terms of net sales, a below target performance against the
profitability target, and a significant over-performance on cash generation. The Divisional performance showed a significant
variance, with the Europe Division performing close to target on net sales and cash, but underperforming on profitability, while the
AMEAA and HealthCare Divisions have been performing on target or above.

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The achievement against the 2019 Group and Divisional KPIs driving the 2019 short-term incentive for the CEO and the other
members of the Management Committee and the resulting pay-out factors are shown in the table below.

KPI Metrics Group Europe AMEAA Healthcare

Revenue Achievement 99% 99% 98% 102%
Pay-out Factor 90% 90% 80% 120%
Weighting 25% 25% 25% 25%
Corresponding Pay-out Factor 22.5% 22.5% 20% 30%
EBITDA Achievement 95% 92% 103% 100%
Pay-out Factor 50% 20% 130% 100%
Weighting 50% 50% 50% 50%
Corresponding Pay-out Factor 25% 10% 65% 50%
Cash (*) Achievement 159% 99% 106% 107%
Pay-out Factor 150% 90% 150% 150%
Weighting 25% 25% 25% 25%
Corresponding Pay-out Factor 37.5% 22.5% 37.5% 37%
Total Total Bonus Factor Weighted 85% 55% 122.5% 117.5%
Pay-out

The resulting gross bonus amounts for the CEO and the other members of the Management Committee are reported in the column
one-year variable in the total remuneration table below. The short-term incentive is not subject to any claw-back provision.
2019 has also been the year in which the Transform to Grow program (T2G) has been kicked off. To underpin the importance of
this transformation program, the Board has approved a specific and temporary incentive plan related to T2G. The first part of the
T2G Incentive as described in the Remuneration Policy was delivered in 2019 and is reported in the column extra-ordinary items
in the total remuneration table below.

8.2.3. 2019 Long-term incentives

This section contains information on the long-term incentive plan (LTIP) granted in 2019 as well as on former LTIP grants which
vested in 2019.
The value of the LTIP grants which vested in 2019 is shown in the total remuneration table below, in the column multi-year variable.
The way in which this value has been calculated is explained in note 4 below the table.

The members of the Management Committee also received a new LTIP grant in 2019, which took place on 13 June 2019. The
2019 grant was the first year of the new LITP as approved at the general meeting of shareholders on May 25, 2018. The 2019
grant consisted of a combination of Restricted Stock Units, Stock Options and Performance Shares, each representing one third
of the LTIP grant value. This is a change compared to previous LTIP grants, which consisted of Restricted Stock Units (50%) and
Stock Options (50%). The performance shares were added to make the LTIP more performance based. Furthermore, it was
decided to keep the restricted stock units (with a reduced weight), despite the absence of performance vesting, retaining their
presence requirement. As such, they are a counter weight to the financial risk associated with stock options which, for Belgian
beneficiaries, such as the CEO and other Belgian residents on the Management Board, are taxed at grant with no possibility to
recover taxes in case the options remain below their exercise price.

The 2019 LTIP has a vesting period of 3 years. For the vesting of the Performance Shares granted in 2019, the Board has set
targets for the 2019-2021 performance period in terms of like-for-like sales growth (weight 30%), Adjusted EBITDA (weight 35%)
and Earnings per share growth (weight 35%). The vesting schedule for these 3 performance measures is shown below.

Achievement vs target Threshold 80% vesting 100% vesting 200% vesting

Sales Growth 75% 90% 100% 110%
EBITDA 87% 93% 100% 105%
EPS Growth 44% 72% 100% 119%

Because the 3-year targets for the performance shares are commercially sensitive, the Company has opted not to disclose them
upfront. However, the Company commits to publish both the targets and the achievement levels for the performance shares KPIs
at the end of the 3-year performance period.

The stock options which were granted on 13 June 2019 have a strike price of 14,00 EUR, which is the closing price of the day
preceding the grant date.
The tables below provide the details of the 2019 LTIP for the members of the Management Committee. They also provide an
overview of share related transactions which occurred during the year.

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Shares awarded during the reported financial year

Number of Number of
RSUs PSUs Share
awarded awarded value at
and and Award Vesting the time of Total value
Name of Director Position accepted accepted date date the grant awarded
Executive VP
Agostini, Philippe 3,986 3,986 13/06/2019 14/06/2022 €14 €111,608
Procurement
President
Amselem,
AMEAA 4,420 4,420 13/06/2019 14/06/2022 €14 €123,760
Armando
division
Executive VP
Bonnard, Laurent Sales & 4,518 4,518 13/06/2019 14/06/2022 €14 €126,504
Marketing
Chief
Bouaziz, Charles Executive 18,414 18,414 13/06/2019 14/06/2022 €14 €515,592
Officer
Executive VP
De Lathauwer,
Human 4,766 4,766 13/06/2019 14/06/2022 €14 €133,448
Astrid
Resources
Executive VP
De Poorter, R&D, Quality
4,595 4,595 13/06/2019 14/06/2022 €14 €128,660
Annick &
Sustainability
Chief
Desmartis,
Finance 18,333 18,333 13/06/2019 14/06/2022 €14 €513,324
Charles (1)
Officer
President
Lambrecht,
Healthcare 4,377 4,377 13/06/2019 14/06/2022 €14 €122,556
Xavier
Division
Executive VP
Loebel, Axel 3,601 3,601 13/06/2019 14/06/2022 €14 €100,828
Operations
Navarre, Thierry CTO 9,167 9,167 13/06/2019 14/06/2022 €14 €256,676
President
Viale, Thierry Europe 4,780 4,780 13/06/2019 14/06/2022 €14 €133,840
Division
(1) Charles Desmartis received twice the regular LTIP grant, as part of a sign-on arrangement upon joining the company

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Shares vested and sold during the reported financial year

Balance at start of the year Changes during the year Balance at end of the year
Numbe
r of Number Numb Number Number Number
Number unvest of er of of of of
of ed vested Number Number Share unvested unvested vested
unvested PSUs shares of RSUs of PSUs s sold Total RSUs at PSUs at shares
RSUs at at start at start vested vested during value of end of end of at end
Name of Director start of of the of the during during the Price shares the year the year of the
(1) (2)
Position the year year year the year the year year of sale sold year (3)
Agostini, Executive VP
9,411 2,511 2,760 10,637 3,986 5,271
Philippe Procurement - - - - -
President
Amselem,
AMEAA 11,558 3,526 1,134 €15.66 €17,761 12,452 4,420 2,392
Armando - - -
division
Executive VP
Bonnard,
Sales & 8,697 2,738
Laurent - 1,744 - - - - 10,477 4,518 4,482
Marketing
Bouaziz, Chief Executive
39,811 14.752 14,522 43,703 18,414 29,274
Charles Officer - - - - -
De Executive VP
Lathauwer, Human 9,015 1.092 2,723 1,449 €15.66 €22,694 11,058 4,766 2,366
- -
Astrid Resources
Executive VP
De Poorter,
R&D, Quality & 7,695 957 1,989 1,058 €15.66 €16,568 10,301 4,595 1,888
Annick - -
Sustainability
Desmartis, Chief Finance
18,333 18,333
Charles (1) Officer - - - - - - - - -
President
Lambrecht,
Healthcare 9,136 1,216 2,524 10,989 4,377 3,740
Xavier - - - - -
Division
Executive VP
Loebel, Axel 3,601 3,601
Operations - - - - - - - - -
Chief
Navarre,
Transformation 17,112 5,814 4,641 21,638 9,167 10,455
Thierry - - - - -
Officer
Viale, President
8,396 1,475 3,697 1,366 €15.66 €21,392 9,479 4,780 3,806
Thierry Europe Division - -

(1) Number of unvested RSUs at start of the year plus number of RSUs awarded during the year minus number of RSUs vested during the year
(2) Number of unvested PSUs at start of the year plus number of PSUs awarded during the year minus number of PSUs vested during the year
(3) Number of vested shares at start of the year plus number of PSUs and RSUs vested during the year minus number of shares sold during the
year

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Share options awarded during the reported financial year

Share options awarded during the year

Number Number Strike
Name of of options of options Award Vesting price of
Director Position awarded accepted date date Exercise period the share
Agostini, Executive VP start 14/06/2022 -
13,987 13,987 13/06/2019 14/06/2022 €14
Philippe Procurement end 13/06/2027
President
Amselem, start 14/06/2022 -
AMEAA 15,508 15,508 13/06/2019 14/06/2022 €14
Armando end 13/06/2027
division
Executive VP
Bonnard, start 14/06/2022 -
Sales & 15,852 15,852 13/06/2019 14/06/2022 €14
Laurent end 13/06/2027
Marketing
Chief
Bouaziz, start 14/06/2022 -
Executive 64,610 64,610 13/06/2019 14/06/2022 €14
Charles end 13/06/2027
Officer
De Executive VP
start 14/06/2022 -
Lathauwer, Human 16,722 16,722 13/06/2019 14/06/2022 €14
end 13/06/2027
Astrid Resources
Executive VP
De Poorter, R&D, Quality start 14/06/2022 -
16,125 16,125 13/06/2019 14/06/2022 €14
Annick & end 13/06/2027
Sustainability
Desmartis, Chief Finance start 14/06/2022 -
64,327 64,327 13/06/2019 14/06/2022 €14
Charles (1) Officer end 13/06/2027
President
Lambrecht, start 14/06/2022 -
Healthcare 15,356 13/06/2019 14/06/2022 €14
Xavier - end 13/06/2027
Division
Executive VP
start 14/06/2022 -
Loebel, Axel Operations 12,636 12,636 13/06/2019 14/06/2022 €14
end 13/06/2027
(01/02/2019)
Navarre, Start 14/06/2022 –
CTO 32,164 32,164 13/06/2019 14/06/2019 €14
Thierry end 13/06/2017
President
Viale, start 14/06/2022 -
Europe 16,771 16,771 13/06/2019 14/06/2022 €14
Thierry end 13/06/2027
Division
(1) Charles Desmartis received twice the regular LTIP grant, as part of a sign-on arrangement upon joining the company

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Share options vested, exercised or lapsed during the reported financial year
Balance at Balance at
start of Changes during the year end of the
the year year
Number Number
Number Number of Number of
Number of of Number of of vested
of Exer options unvested
unvested vested options Exer Gross options at
options cise lapsed options at
options at options exercised cise gain the end of
vested price during the the end of
the start at the during the date the year
during year the year (1)
Name of of the year start of year (2)
the year
Director Position the year
Executive
Agostini,
VP N/A N/A - 45,337 23,444
Philippe 43,176 11,618 11,826 - N/A
Procurement
President
Amselem,
AMEAA N/A N/A - 53,583 15,106
Armando 53,181 - 15,106 - N/A
division
Executive
Bonnard,
VP Sales & N/A N/A - 44,169 23,380
Laurent 40,047 11,650 11,730 - N/A
Marketing
Chief
Bouaziz,
Executive N/A N/A - 184,776 129,811
Charles 182,386 67,591 62,220 - N/A
Officer
De Executive
Lathauwer, VP Human N/A N/A - 46,722 22,595
41,666 10,929 11,666 - N/A
Astrid Resources
Executive
VP R&D,
De Poorter,
Quality &
Annick 35,769 9,657 8,522 - N/A N/A N/A - 43,372 18,179
Sustainabilit
y
Chief
Desmartis,
Finance N/A N/A - 64,327 -
Charles - - - - N/A
Officer
President
Lambrecht,
Healthcare
Xavier 42,230 12,134 10,813 - N/A N/A N/A - 31,417 22,947
Division
Executive
VP
Loebel, Axel
Operations - - - - N/A N/A N/A - 12,636 -
(01/02/2019)
Navarre,
CTO 79,340 26,839 19,886 - N/A N/A N/A - 91,618 46,725
Thierry
President
Viale, Thierry Europe
38,158 11,196 15,839 - N/A N/A N/A - 39,090 27,035
Division

(1) Number of unvested options at the start of the year minus number of options vested during the year plus number of options accepted during
the year
(2) Number of vested options at the start of the year plus number of options vested during the year minus number of options exercised and lapsed
during the year

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8.2.4. Total 2019 remuneration for the CEO and Members of the Management Committee
The table below set out the total 2019 remuneration for the CEO and the other Members of the Management Committee.

Fixed Remuneration Variable Remuneration

Other Multi-year Pension Total
All amounts in Base Benefits One-year Variable Extraordinary expense Remuneration
EUR Salary (1) (2)
Variable (3) (4)
items (5) (6) (7)

CEO 1,031.169 83,189 886,805 225,091 344,000 - 2,570,254

Other Members
of the
4,188,480 334,573 2,376,284 381,269 1,134,873 642,146 9,057,625
Management
Committee
(1) This represents the annual base salary on a full year basis.
(2) Other benefits include the cost of medical, life and disability insurance, company car and school fees, on a full year basis.
(3) This represents the short-term incentive for performance year 2019.
(4) This represents the value, at the day of vesting, of the long-term incentives granted in previous years and vested during 2019. For the
Restricted Stock Units (RSUs) vested in 2019, the value reported is the number of RSUs vested times the share price at the time of vesting. For
the stock options vested in 2019, the value reported is the number of options vested times the difference between the share price at the time of
vesting and the exercise price, if positive.
(5) This represents the first part of the T2G Incentive paid in 2019.
(6) This represents the company contributions towards a defined contribution pension plan, on a full-year basis.
(7) This is the sum of items 1 through 6.

8.3.Remuneration Policy
The remuneration policy describes the principles and policies that determine the composition and level of remuneration for Non-
Executive Directors and members of the Management Committee of Ontex. The Board of Directors sets the principles and policies
following recommendation by the Remuneration and Nomination Committee.
The principles and policies governing the remuneration for Non-Executive Directors and for members of the Management
Committee address the following topics:
 The way in which the Remuneration Policy contributes to the strategy, the long-term ambitions, performance and
sustainability of Ontex

 A description of the different remuneration components and their respective weights in the total remuneration package.

For the variable components of remuneration, the policy defines the performance criteria that are used to determine the
variable compensation. It also sets out the minimum performance threshold required for any variable compensation to
pay out, as well as the performance level at which the maximum bonus pay out is reached.

For equity-based components, the policy addresses the nature of the equity compensation, the vesting criteria and the
performance criteria linked to the grant or the vesting of equity instruments. It also covers how these performance criteria
contribute to the strategy and the long-term ambitions and sustainability of Ontex.

 Whether the measurement of performance, base pay evolution, short-term variable pay and long-term variable pay for
members of the Management Committee is the same as for other managers in the company

 The principle terms of appointment of Non-Executive Directors and members of the Management Committee and the
applicable end-of-contract provisions.

8.3.1. Remuneration Policy for Non-Executive Directors

As per the Corporate Governance Charter, the Board of Directors exercises the powers expressly reserved to the Board of
Directors by law, addresses matters pertaining to the general policy of the company, and acts in a supervisory capacity with regard
to the Management Committee.
It is believed that, in order to fulfil these tasks, Ontex must be able to attract a rich spectrum of Board Member profiles that mirror
the company’s diverse customer and consumer bases and its geographical footprint. Furthermore, the composition of the Board
needs to embody a thorough knowledge of the business dynamics and markets in the personal hygiene sector.
With this ambition in mind, the Non-Executive Directors at Ontex are rewarded through a combination of a fixed annual fee and
attendance fees. The total annual remuneration paid to Non-Executive Directors is aligned with remuneration levels for similar
positions reported by BEL20 companies.
The Chairpersons of the Board and the Board Committees receive a higher fixed fee than the other members of the Board, given
the broader time commitment required of these roles. The fixed fees are pro-rata based so that Board and/or Board Committee
membership may start or end in the course of a calendar year.
In addition to fixed remuneration, Board members also receive a fee for every Board and Board Committee meeting they attend.

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The fixed remuneration and attendance fees for Non-Executive Directors are shown in the table below.

Role Fixed Fee Attendance Fee

Non-Executive Director 60,000 EUR 2,500 EUR
Board Chairperson + 60,000 EUR + 2,500 EUR
Committee Chairperson + 10,000 EUR + 2,500 EUR
Committee Member + 1,500 EUR
An analysis is being conducted whether, going forward, a part of the remuneration for Non-Executive Directors will be paid in
shares. Should that be the case, the remuneration policy will be updated accordingly.
Non-Executive Directors are appointed for a period of 4 years, in accordance with the guidance laid down in the corporate
governance charter.

8.3.2. Remuneration Policy for Members of the Management Committee

General reward principles and alignment with the company’s strategy
Ontex aspires to be the preferred company for its consumers, customers, employees and investors, as well as a socially
responsible company.

In order to attract, motivate and retain people who are committed to helping Ontex realize its commitments towards its consumers,
customers, employees and investors, we have built our remuneration policy on the following pillars:

We reward the successful implementation of strategy. This is done by linking a significant part of remuneration to
the achievement of financial goals which reflect our commitment to our consumers, customers and investors.

We reward performance by making a significant portion of remuneration dependent on both individual contribution
and collective (Group and divisional) achievements.

We foster a bias towards long-term shareholder value creation through granting share-based remuneration to
employees who have an important influence on the company’s success.
Our pay practices are aligned with local market practices for the talent pools we are recruiting from.

8.3.3. Executive Remuneration Policy

Decision-making process
The remuneration policy for members of the Management Committee is decided on by the general meeting of shareholders upon
recommendation by Board of Directors and the Remuneration and Nomination Committee. Within the confines of the remuneration
policy as approved by the general meeting of shareholders, the Board of Directors:
 Evaluates and reviews the appropriate market positioning of the rewards offered to the members of the Management
Committee compared with the relevant benchmarks.

 Determines the individual compensation levels of the members of the Management Committee taking into consideration
their role and contribution to the business.
 Evaluates and determines the appropriate pay mix.

 Sets and reviews the financial targets for the performance-based remuneration components.

The Board evaluates the effectiveness of the remuneration policy for members of the Management Committee. As and when
needed, the Board calls upon the help of reputable external compensation consultants to assist them in this task.

Competitive Positioning
To attract, motivate and retain talented executives with the necessary knowledge, skills and values to deliver Ontex’ growth
ambitions, our levels of remuneration and the various instruments at our disposal need to be aligned with those of companies who
are recruiting from the same talent pool. For that reason, Ontex periodically benchmarks its total compensation against a peer
group of companies with the following characteristics:

 Active in FMCG
 Headquartered in Europe

 Internationally present

 Mix of publicly traded and privately held companies

In terms of cash and equity-based compensation elements, the targeted competitive positioning is the median pay level in the
peer group. Where there is a significant difference in scope and size between Ontex and the peer group companies, appropriate
adjustments are being made. For pensions and fringe benefits, the target is the median of local general industry practices. The
company aims for individual compensation levels to be within a competitive range around this benchmark, taking into consideration
an individual’s tenure, experience and contribution to the business.

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Compensation components and mix

Members of the Management Committee are compensated for their responsibilities as well as individual and company
performance, both short and long-term. The total compensation of executives consists of:

 A fixed compensation component: base salary

 Variable compensation components: annual bonus and a long-term incentive plan

The charts below show the weight of these elements in the total target compensation for the CEO and for other members of the
management committee.

Fixed Compensation Component – Base Salary

The target base salary for members of the Management Committee is within a competitive range of the median base salary for
comparable positions in the peer group mentioned above. The actual salary reflects the individual’s tenure, experience and
contribution to the business. Base salary levels are reviewed annually, and their development depends on the individual’s
performance and salary in relation to the said benchmark. Where there is a considerable gap between the actual base pay and
the benchmark, the Board of Directors may consider a multi-year catch-up programme to bring the base pay level up to a
competitive range of the benchmark.
Variable Compensation Component – Annual Bonus
The annual bonus programme is designed to reward executives for individual and collective performance over a one-year horizon.
The table below sets out the weight of the financial and non-financial performance indicators in the bonus calculation for the
different executive positions.

The metrics used for the assessment of the Group Financial Performance reflect Ontex’ ambition to focus on business growth,
profitability and the generation of sufficient cash to allow us to continuously fuel R&D, innovation, organic expansion and strategic
acquisitions. The group financial performance KPIs and their respective weights are shown in the table below.

KPI - Group KPI Definition KPI Weight

Actual Group revenue, adjusted for exchange
Net Sales 25%
rate fluctuations vs budgeted Group revenue
Actual Group EBITDA, adjusted for exchange
EBITDA 50%
rate fluctuations vs budgeted Group EBITDA
Actual Group Operating Free Cash Flow vs
OFCF 25%
budgeted Group OFCF

The targets for each of the Group financial performance KPIs are set annually by the Board of Directors. As these targets are
commercially sensitive, they are not being disclosed ex ante. However, both targets and actual achievements will be published
ex post. The weighted Group financial performance score (based on the table above) is subsequently translated into a pay-out
curve which has a threshold and a cap. The threshold is set at the minimum acceptable level of performance to trigger the Group
financial performance part of the bonus. For each of the above-mentioned KPIs at least 91% of the objective needs to be achieved

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for any bonus to be paid. At 91% performance, bonus pay-out is only 10%. 95% achievement yields a bonus pay-out of 50%. The
cap reflects a considerable over-achievement of the targets. This achievement level is set at 105% of target, resulting in a bonus
pay-out of 150%. The pay-out curve for the Group financial performance is shown below.

The KPIs, KPI definition and respective weights for the Division Financial Performance are shown in the table below. The
targets for each of the Division financial performance KPIs are set annually by the Board of Directors. The performance threshold,
cap and pay-out curve for the Division financial performance are the same as for the Group financial performance.

KPI - Division KPI Definition KPI Weight

Actual Division revenue, adjusted for exchange
Net Sales 25%
rate fluctuations vs budgeted Division revenue
Actual Division EBIT, adjusted for exchange
EBIT 50%
rate fluctuations vs budgeted Division EBIT
Actual days of sales outstanding vs targeted
DSO 25%
days of sales outstanding

The non-financial Performance of each executive is assessed against a set of quantitative and qualitative objectives, including
sustainability targets, employee engagement, succession, quality of leadership and others.

The non-financial performance criteria for the CEO are set and assessed annually by the Board of Directors. The non-financial
performance criteria for the other executives are set and assessed annually by the Board of Directors based on recommendations
by the CEO. The degree to which the non-financial objectives have been achieved and the corresponding pay-out levels are
shown in the table below.

Non-financial performance assessment Pay-out factor

Consistently exceeded 150%
Frequently exceeded 115% - 140%
Met 90% - 115%
Partially met 50% - 90%
Not met 0%

The target bonus for the CEO is set at 100% of base salary. For other members of the Management Committee, the target bonus
ranges from 50% to 70% of base salary.
The KPIs, KPI weights and pay-out curves that are used to calculate the annual bonus for the members of the Management
Committee also apply to the bonus calculation of other management positions in the organization. However, the balance between
the financial and the non-financial performance indicators may be different.
In line with the dominant practice in Belgium, the annual bonus is not subject to any deferrals or claw-back provisions as it is
unclear whether such clauses would be enforceable. Moreover, some of the customary triggers included in claw-back provisions,

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such as fraud or gross misconduct can be addressed in other ways such as dismissal (for cause), recovery, exclusion from D&O
insurance coverage and others.
Variable Compensation Component – Long-term Incentive
With a view to fostering long-term sustained performance, and aligning the interests of senior management with those of the
shareholders, a significant proportion of the variable compensation of the members of the Management Committee is linked to
tenure and financial goals measured over a three-year period, and is delivered in the form of equity instruments.

The long-term incentive plan was approved by the shareholders in May 2018 for a five-year period, starting in 2019. Long-term
incentives are delivered in the form of restricted stock units, stock options and performance shares, all vesting over a three-year
period.

The long-term incentive target for the members of the Management Committee is expressed as a percentage of base salary. The
target incentive for the CEO represents 80% of base salary. For the other members, the target incentive amounts to 55% of base
salary. These target incentive levels are aligned with the benchmark as described in the section on competitive positioning above.

The weights, vesting term and vesting conditions of the 3 LTIP instruments are specified in the table below.

LTIP Instrument Weight in Vesting Term Vesting Conditions

total grant
Performance Shares 33.33% 3 years Performance vesting (threshold – target – cap)
Stock Options 33.33% 3 years Performance vesting (share price performance) +
upfront tax investment (*)
Restricted Stock Units 33.33% 3 years Time vesting

Restricted stock units remain part of the LTIP despite the absence of performance vesting. As such, they are a counter-weight for
the financial risk and upfront cash investment associated with the grant of stock options to Belgium based executives. Taxes on
stock options granted to Belgium based executives are payable up-front, at the time of grant, with no refund in case the options
remain out of the money.

Stock Options
A stock option gives the beneficiary the right to purchase from the company one share in the company per vested stock option,
during a predetermined timeframe, by paying a predetermined exercise price.

Stock options at Ontex vest three years after the grant and are valid eight years from the date of grant. They lapse automatically
if they have not been exercised by the ninth anniversary of the grant date. The exercise price is the share price on the date of
grant. Stock options will only deliver value if, between the vesting date and the expiry of the options, the share price exceeds the
value of the share at grant. This focuses the efforts of members of the Management Committee on increasing the value of the
Ontex share over the vesting period.
The number of stock options awarded to members of the Management Committee is determined by dividing one third of the total
long-term incentive grant value by the value of one stock option. The value of a stock option is calculated using the Black and
Scholes valuation methodology based on the share price on the grant date.

Members of the Management Committee who are subject to income taxes in Belgium need to pay the income tax on the value of
the stock options at the time of the grant. These taxes may not be claimed back if the options cannot be exercised, and therefore
represent a substantial financial risk.

Ontex does not facilitate the entering into derivative contracts related to stock options, nor the hedging of the risks associated with
these instruments.

Restricted Stock Units (RSUs)

A restricted stock unit entitles the beneficiary to receive from the company for no consideration one share in the company per
vested restricted stock unit.
The number of restricted stock units awarded to members of the Management Committee is determined by dividing one third of
the total long-term incentive grant value by the value of the Ontex share on the grant date.

Restricted stock units at Ontex vest three years after the grant provided the member of the Management Committee is still working
for Ontex at that time.

In 2019, the company has reduced the share of RSUs in the overall value of the long-term incentive grant from 50% to 33%, in
response to concerns in the investor community about the perceived deficit in performance-based pay.

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Performance Shares
A performance share provides the beneficiary with the right to receive from the company one share in the company per vested
performance share, where the vesting is subject to a three-year period as well as the achievement of performance conditions
measured over the three-year period.
Performance shares at Ontex are subject to performance criteria and targets set by the Board of Directors at the time of grant.
The performance criteria are chosen to foster long-term value creation and alignment with shareholder interests. As the
performance targets for the Performance shares are commercially sensitive, the performance targets are not disclosed upfront.
However, the performance targets and actual achievements will be disclosed at the end of the 3-year performance period.

The number of performance shares awarded to members of the Management Committee is determined by dividing one third of
the total long-term incentive grant value by the value of the Ontex share on the grant date.
The number of performance shares that vest is adjusted according to the achievement of the performance goals over the three-
year performance period. If the actual performance is below a specified threshold, no shares are awarded. The vesting is also
subject to a 200% cap, at a performance level which exceeds the original targets in a significant way. The performance threshold
and cap are set by the Board at the time of grant.

Members of the Management Committee are not required to hold a minimum value in company stock. It is the company’s belief
that, through successive annual grants, at any given time they will have a sufficiently important equity stake in the company (even
though not vested) to focus their efforts and attention on the creation of long-term shareholder value.

The long-term incentive instruments, vesting periods, performance conditions and other plan features applicable to the members
of the Management Committee are the same as those that apply to other Ontex staff who qualify for long-term incentive
participation.

Variable Compensation – Specific and temporary incentive related to the Transform to Grow Transformation programme
In 2019, Ontex launched a comprehensive transformation programme called ‘Transform to Grow’ (T2G). The T2G programme is
a key enabler of Ontex’ strategy to accelerate value creation by step-changing its operational and commercial excellence. The
programme is targeted to generate an incremental recurring EBITDA as well as a margin improvement between 125 and 175
basis points at the end of 2021 versus 2018.

To underpin the importance of this transformation programme, the Board has approved a specific and temporary incentive plan
related to T2G (“temporary T2G incentive plan”). Participation in this plan is limited to restricted number of people, across all
functions and levels in the organization, who are accountable for important levers in the transformation plan. The temporary T2G
incentive plan for this restricted number of people is in addition to the annual bonus and long-term incentive plans to which they
are normally entitled, and which continue to apply as per the rules described above during the T2G programme.
The temporary T2G incentive plan consists of two parts. The first part has been paid in 2019 upon delivery of a pipeline of initiatives
the value of which is equivalent to the targeted margin improvement.

The large majority of the temporary T2G incentive plan is eligible to be paid in 2021 and 2022, subject to a strict evaluation by the
Remuneration and Nomination Committee of the delivery of the financial objectives of the T2G programme, expressed as an
incremental recurring EBITDA and the above-mentioned margin improvement. The temporary T2G incentive plan cannot be
altered or extended, and will end after the evaluation performed in Q1 2022.
Other remuneration elements
Members of the Management Committee participate in the benefits plans applicable to this category of staff in the country of their
contract. These usually include a company contribution to a pension plan, life insurance, disability insurance and health benefits.
Members of the Management Committee may also be entitled to certain executive benefits such as company cars and other
benefits in kind. The value of these elements is disclosed in the annual Remuneration Report.

Terms of Contract and Termination Provisions

The rights and obligations related to the office of ‘Member of the Management Committee’ at Ontex are formalized in a contract
of indefinite duration. These contracts include the principle terms of office as well as clauses covering the protection of intellectual
property of the company, confidentiality (both during and after employment) regarding information to which members of the
Management Committee have access, as well as termination and non-compete provisions. The termination and non-compete
provisions for the current members of the Management Committee are shown in the table below.
Contractual Non-Compete and/or
Function & Name Contractual Notice Additional Termination Indemnity
CEO – C. Bouaziz
12 months 12 months fixed fee
CTO – Artipa BVBA, represented by T. Navarre
EVP R&D, Quality, Sustainability – A. De Poorter 3 months 15 months fixed fee
All other Management Committee members 3 months 9 months fixed fee

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9. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

9.1. Introduction
The Ontex Group operates a risk management and control framework in accordance with the Belgian Companies Code and the
Corporate Governance Code.

The Ontex Group is exposed to a wide variety of risks within the context of its business operations that can result in its objectives
being affected or not achieved. Controlling those risks is a core task of the Board (including the Audit and Risk Committee), the
Management Committee and all other employees with managerial responsibilities.

The risk management and control system has been set up to reach the following goals:
 Achievement of the Ontex Group objectives;

 Achieving operational excellence;

 Ensuring correct and timely financial reporting; and

 Compliance with all applicable laws and regulations.

9.2. Control Environment

Three lines of defense
The Ontex Group applies the “three lines of defense model” to clarify roles, responsibilities and accountabilities, and to enhance
communication within the area of risk and control. Within this model, the lines of defense to respond to risks are:
 First line of defense: line management is the first responsible for assessing risks on a day-to-day basis and implementing
controls in response of these risks.
 Second line of defense: the oversight functions like Finance and Controlling, Quality, Compliance, Tax and Legal
oversee and challenge risk management as executed by the first line of defense. The second line of defense actors
provide guidance and direction and develop a risk management framework.

 Third line of defense: independent assurance providers like internal audit and external audit challenge the risk
management processes as executed by the first and second line of defense.

Policies, procedures and processes

The Ontex Group fosters an environment in which its business objectives and strategy are pursued in a controlled manner. This
environment is created through the implementation of different company-wide policies, procedures and processes such as the
Ontex values, the Ontex Code of Ethics (and its related policies such as the anti-bribery, anti-money laundering and fair
competition policies), the Quality Management System and the Delegation of Authorities ruleset. The Management Committee
fully endorses these initiatives. The employees are regularly informed and trained on these subjects in order to develop sufficient
risk management and control at all levels and in all areas of the organization.

Group-wide ERP system

The main portion of the Group entities operate the same group-wide ERP systems which are managed centrally. These systems
embed the roles and responsibilities defined at the Ontex Group level. Through these systems, the main flows are standardized
and key controls are enforced. The systems also allow detailed monitoring of activities and direct access to data.

9.3. Risk management

Sound risk management starts with identifying and assessing the risks associated with the Company’s business and external
factors. Once the relevant risks are identified, the Company strives to prudently manage and minimize such risks, acknowledging
that certain calculated risks are necessary to ensure that the Ontex Group achieves its objectives and continues to create value
for its stakeholders.

All employees of the Ontex Group are accountable for the timely identification and qualitative assessment of the risks within their
area of responsibility.

The Ontex Group has identified and analyzed its key corporate risks as disclosed under the Strategic Report of this Annual Report.
These corporate risks are communicated to the various levels of management.

9.4. Control activities

Control measures are in place to minimize the effect of risk on Ontex Group’s ability to achieve its objectives. These control
activities are embedded in the Ontex Group’s key processes and systems to assure that the risk responses and the Ontex Group’s
overall objectives are carried out as designed. Control activities are conducted throughout the organization, at all levels and within
all departments.

Key compliance areas are monitored for the entire Ontex Group by Local Compliance Coordinators, the Compliance Manager,
the Head of Compliance, and the Compliance Steering Committee. The Compliance function supports the compliance with the
Ontex Code of Ethics and the adoption of clear processes and procedures with respect to the Code policies, such as anti-bribery
and corruption, anti-money laundering, economic sanctions, fair competition, personal data and privacy and insider trading. The

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Compliance Steering Committee is composed of the COO, the CFO, the Group HR Director, the Group General Counsel and the
Head of Compliance and meets regularly to discuss and decide on compliance strategy, issues and action plans. The Compliance
Steering Committee reports on its activities to the Management Committee.

In addition to these control activities, an insurance program is being implemented for selected risk categories that cannot be
absorbed without material effect on the Company’s balance sheet.

9.5. Information and communication

The Ontex Group recognizes the importance of timely, complete and accurate communication and information both top-down as
well as bottom-up. The Ontex Group therefore put several measures in place to assure amongst others:
 Security of confidential information;

 Clear communication about roles and responsibilities; and

 Timely communication to all stakeholders about external and internal changes impacting their areas of responsibility.

9.6. Monitoring of control mechanisms

Monitoring helps to ensure that internal control systems operate effectively.

The quality of the Ontex Group’s risk management and control framework is assessed by the following actors:
 Internal Audit. The tasks and responsibilities assigned to Internal Audit are defined in the Internal Audit Charter, which
has been approved by the Audit and Risk Committee. The key mission of Internal Audit as defined in the Internal Audit
Charter is “to add value to the organization by applying a systematic, disciplined approach to evaluating the internal
control system and providing recommendations to improve it”.
 External Audit. In the context of its review of the annual accounts, the statutory auditor focusses on the design and
effectiveness of internal controls and systems relevant for the preparation of the financial statements. The outcome of
the audits, including work on internal controls, is reported to management and the Audit and Risk Committee and shared
with Internal Audit.

 Audit and Risk Committee. The Board and the Audit and Risk Committee have the ultimate responsibility with respect
to internal control and risk management. For more detailed information on the composition and functioning of the Audit
and Risk Committee, see chapter 3.5 of this Corporate Governance Statement.

9.7. Risk management and internal control with regard to the process of financial reporting
The accurate and consistent application of accounting rules throughout the Ontex Group is assured by means of a Finance and
Accounting Manual.
On a quarterly basis, a bottom-up risk analysis is conducted to identify risk factors. Action plans are defined for all key risks.
Specific identification procedures for financial risks are in place to assure the completeness of financial accruals.
The accounting teams are responsible for producing the accounting figures, whereas the controlling teams check the validity of
these figures. These checks include coherence tests by comparison with historical and budget figures, as well as sample checks
of transactions according to their materiality.

Specific internal control activities with respect to financial reporting are in place, including the use of a periodic closing and
reporting checklist. This checklist assures clear communication of timelines, completeness of tasks, and clear assignment of
responsibilities.

Uniform reporting of financial information throughout the Ontex Group ensures a consistent flow of information, which allows the
detection of potential anomalies. The Group’s ERP systems and management information tools allow the central controlling team
direct access to disaggregated financial and non-financial information.

An external financial calendar is planned in consultation with the Board and the Management Committee, and this calendar is
announced to the external stakeholders. The objective of this external financial reporting is to provide Ontex stakeholders with the
information necessary for making sound business decisions. The financial calendar can be consulted on https://www.ontex.com

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The table below sets out our principal risks and examples of relevant controls and mitigating factors.

The Board considers these to be the most significant risks faced by the Group that may impact the achievement of our strategic
drivers as set out on page 10. They do not comprise all risks associated with our business and are not set out in priority order.

Description Risk Main Potential Impact

Infectious diseases of As Ontex is operating around the globe, a Global epidemic or pandemic outbreaks may
epidemic and pandemic global epidemic or pandemic outbreak have an impact on raw material availability &
potential may affect our business contingency. unavailability of employees. This could
negatively impact our service level.

All Divisions face competition from

The fact that we would fail to deliver our value
branded product manufacturers and
proposition and/or to adapt to the customer’s
Competitive retailer brand manufacturers. We also face
needs could affect our performance, and could
Environment competition from competing manufacturers
entail price and volume pressure, loss of market
in production innovation. Rapid time-to-
share or margin erosion.
market is key to our competitiveness.
As a public company, Ontex has
stakeholders with various needs, and
Reputation and Such adverse publicity may adversely impact our
Ontex is subject to high transparency
Stakeholder reputation, and indirectly our business and
standard and periodic reporting
Management financial condition.
obligations. Ontex may be subject to
adverse publicity.

In case of quality issues, this may lead to

Our reputation as a business partner relies adverse effects to consumer health, loss of
Product Quality
heavily on our ability to supply quality market share, financial costs and loss of
and Safety
products. turnover as well as putting the Company
reputation at stake.

Although we are monitoring changes in

intellectual property rights, we may
As a potential consequence thereof, the
inadvertently infringe intellectual property
Intellectual Property Company may face legal claims or have to pay
rights owned by others. Secondly, the
royalties which erode our profit margins.
Company may fail to register intellectual
property rights in a timely manner.
Our ability to serve our customers
depends on the operation of our 18 Such temporary shortfalls in production could
Manufacturing and manufacturing sites. We may experience affect our on-time delivery record, which could in
Logistics disruptions at our production facilities or in turn adversely affect our ability to acquire new
extreme cases, our production facilities customers and retain existing customers.
may shut down.
We are dependent upon the availability of
raw materials for the manufacture or our
products. On average the main raw
materials and packaging costs account for The price volatility of the underlying commodities
between 75% and 80% of our cost of can affect the cost and availability of our
Sourcing and Supply
sales. Our raw materials are subject to products. We may not always succeed in
Chain
price volatility due to a number of factors passing on these costs to the
that are beyond our control, including but customer/consumer through pricing.
not limited to, the availability of supply,
general economic conditions, commodity
price fluctuations and market demand.
From time to time, we evaluate possible
acquisitions that would complement our
existing operations and enable us to grow
our business. The success of any
acquisition depends on our ability to
integrate acquired businesses effectively.
In case we would not be able to realise the
The integration of acquired businesses
objectives of the acquisition, the integration may
may be complex and expensive and may
Acquisitions lead to additional unforeseen difficulties or
present a number of risks and challenges.
liabilities, failure to deliver on financial goals and
Furthermore, there can be no assurance
internal disruption.
that we will realize any or all of the
anticipated benefits of any future
acquisitions, including the expected
business growth opportunities, revenue
benefits, cost synergies and other
operational efficiencies.

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Description Risk MainMain

Potential
Potential
Impact
Impact Main Potenti
We are increasingly reliant on IT systems A disruption of our IT systems could affect our
and information management to run our sales, production and cash flows, ultimately
Information Technology,
business. There is a risk of disruption of impacting our results. Unauthorized access and
Data Security and Cyber
our IT systems and that sensitive data may misuse of sensitive information could interrupt
Attack
be compromised by malicious cyber-attack our business and/or lead to loss of assets. It
or technology failure. could also lead to negative reputational impact.

Failure to comply with laws and regulations

Ontex is subject to applicable laws and
could expose us to civil and/or criminal actions,
Legal and Regulatory regulations in the global jurisdictions in
and changes to laws and regulations could have
which it operates.
an impact on the cost of doing business.

Ontex operates around the globe, and as a

Any such conditions or instability could impact
result is subject to risks associated with
our operations and result in additional
operating internationally. Recent and
Economical and Political expenditure and other commercial and financial
ongoing instability in some of the countries
Instability impacts incurred in order to comply or adapt to
in which we operate may adversely affect
such conditions and consequently have a
our business, including but not limited to
material adverse effect on our business.
Brexit.
A skilled workforce and agile organization
are essential for the continued success of
In case of failure to recruit and retain adequately,
Recruitment and our business. Failure to identify, attract,
this may result in a decline in business
Retention develop and retain talents to satisfy
performance.
current and future needs of the business
may affect our ability to compete.

As detailed in section 7.5 of the financial

statements, the Group’s activities expose it These risks may have a material adverse effect
Financial to a variety of financial risks including on our business, financial condition and results
currency risk, interest rate risk and liquidity of operations.
risk as well as counterparty default.

As Ontex is operating around the globe, it

may fail to provide for the personal safety
Occupational Health This may lead to reputational damage and
of employees in production and other
and Safety difficulties in hiring people.
facilities and during travel to high-risk
locations.

Ontex risks not to be able to respond

timely to the climate and environmental
expectations and requirements from
Ontex risks losing market share if stakeholder
consumers, governments and other
Climate and expectations cannot be met at a competitive
stakeholders. Ontex requires certain
Environment price. New regulations might increase the cost of
sensitive raw materials such as paper pulp
doing business.
and plastics to manufacture its products
and Ontex produces disposable finished
products.

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CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED
DECEMBER 31, 2019 AND 2018
CONTENTS
INDEPENDENT AUDITORS’ REPORT 85
1. General information 89
1.1. Corporate Information 89
1.2. Business Activities 89
1.3. History of the Group 89
1.4. Legal status 89
2. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31 90
3. CONSOLIDATED INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31 91
4. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31 92
5. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31 93
6. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 95
7. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 96
7.1. Summary of significant accounting policies 96
7.2. Alternative performance measures 106
7.3. Capital management 108
7.4. Critical accounting estimates and judgments 108
7.5. Financial instruments and financial risk management 111
7.6. Operating segments 116
7.7. List of consolidated companies 118
7.8. Business combinations 121
7.9. Goodwill and intangible assets 121
7.10. Property, plant and equipment 123
7.11. Leases 125
7.12. Inventories 126
7.13. Trade receivables, prepaid expenses and other receivables 126
7.14. Cash and cash equivalents 127
7.15. Share capital 128
7.16. Earnings per share 128
7.17. Interest-bearing debts 129
7.18. Employee benefit liabilities 131
7.19. Deferred taxes and current taxes 135
7.20. Current and non-current liabilities 136
7.21. Provisions 136
7.22. Employee benefit expenses 136
7.23. Other operating income/(expenses), net 137
7.24. Non-recurring income and expenses 137
7.25. Expenses by nature 138
7.26. Net finance cost 138
7.27. Income tax expense 139
7.28. Share-based payments 139
7.29. Contingencies 141
7.30. Commitments 141
7.31. Related party transactions 142
7.32. Events after the end of the reporting period 143
7.33. Audit fees 143
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STATEMENT OF THE BOARD OF DIRECTORS

The Board of Directors of Ontex Group NV certifies in the name and on behalf of Ontex Group NV, that to the best of their
knowledge,

 the consolidated financial statements, established in accordance with International Financial Reporting Standards (“IFRS”)
as adopted by the European Union, give a true and fair view of the assets, financial position and results of Ontex Group
NV and of the entities included in the consolidation;

 the annual review presents a fair overview of the development and the results of the business and the position of Ontex
Group NV and of the entities included in the consolidation, as well as a description of the principal risks and uncertainties
facing them pursuant Article 12, paragraph 2 of the Royal Decree of November 14, 2007

The amounts in this document are represented in millions of euros (€ million), unless noted otherwise.
Due to rounding, numbers presented throughout these Consolidated Financial Statements may not add up precisely to the totals
provided and percentages may not precisely reflect the absolute figures.

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INDEPENDENT AUDITORS’ REPORT

STATUTORY AUDITOR'S REPORT TO THE GENERAL SHAREHOLDERS’
MEETING OF THE COMPANY ONTEX GROUP NV ON THE CONSOLIDATED
ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2019

We present to you our statutory auditor’s report in the context of our statutory audit of the consolidated accounts of Ontex Group
NV (the “Company”) and its subsidiaries (jointly “the Group”, “Ontex”). This report includes our report on the consolidated accounts,
as well as the other legal and regulatory requirements. This report forms part of an integrated whole and is indivisible.

We have been appointed as statutory auditor by the general meeting d.d. 24 May 2017, following the proposal formulated by the
board of directors and following the recommendation by the audit committee. Our mandate will expire on the date of the general
meeting which will deliberate on the annual accounts for the year ended 31 December 2019. We have performed the statutory
audit of the consolidated accounts of Ontex Group NV for 6 consecutive years.

REPORT ON THE CONSOLIDATED ACCOUNTS

Unqualified opinion
We have performed the statutory audit of the Group’s consolidated accounts, which comprise the consolidated statement of
financial position as at 31 December 2019, the consolidated income statement, consolidated statement of comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information,
and which is characterised by a consolidated statement of financial position total of EUR 2,884.9 million and a profit for the year
of EUR 37.3 million.
In our opinion, the consolidated accounts give a true and fair view of the Group’s net equity and consolidated financial position as
at 31 December 2019, and of its consolidated financial performance and its consolidated cash flows for the year then ended, in
accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory
requirements applicable in Belgium.

Basis for unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we
have applied the International Standards on Auditing (ISAs) as approved by the IAASB for the year-end and which are not yet
approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s
responsibilities for the audit of the consolidated accounts” section of our report. We have fulfilled our ethical responsibilities in
accordance with the ethical requirements that are relevant to our audit of the consolidated accounts in Belgium, including the
requirements related to independence.
We have obtained from the board of directors and Company officials the explanations and information necessary for performing
our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

EMPHASIS OF MATTER - SUBSEQUENT EVENT

As far as the outbreak of COVID 19 is concerned, we draw your attention to page 65 of the directors' report and section 7.32
("Subsequent events") of the consolidated financial statements in which the board of directors expresses their view that, although
the consequences thereof may have a significant impact on the Group's operations in 2020, such consequences do not have a
material impact on the Group's financial position for the year ended 31 December 2019. Our opinion is not qualified in respect of
this matter.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
accounts of the current period. These matters were addressed in the context of our audit of the consolidated accounts as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Impairment of goodwill and indefinite useful life intangible assets

Description of the key audit matter
Ontex carries a significant value of goodwill on the balance sheet amounting to EUR 1,171.2 million as detailed in disclosure 7.9.
Under the International Financial Reporting Standards as endorsed by the EU (“IFRS’s”), the Company is required to test the
amount of goodwill and indefinite useful life intangible assets for impairment at least annually. We consider this matter to be of
most significance because of the complexity of the assessment process and significant judgments in respect of assumptions about
the future results of the business and the discount rates applied to future cash flow forecasts. The most important assumptions
relate to the discount rate, growth rates of revenue and operating margin. We focused on the goodwill, intangible assets and
property, plant and equipment of the Cash Generating Unit (further CGU) Americas because it is most sensitive to changes in key
assumptions.
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How our audit addressed the key audit matter

We challenged if the goodwill impairment test was performed at the lowest CGU level at which the goodwill is monitored. We
challenged the cash flow projections used in the impairment tests and the process through which they were prepared. We found
that the projected cash flow for 2020 were consistent with the Board approved budgets, which were subject to timely oversight
and challenge by the Directors. We have critically assessed the historical accuracy of management’s estimates and evaluation of
business plans by comparing the prior year’s forecast with the Group’s actual performance. For the cash flows after 2020 we
critically assessed and checked the assumptions related to the long-term growth rates, by comparing them to industry forecasts
and historical growth rates. We compared the weighted average cost of capital (“WACC”) to the cost of capital and debt of the
Group and comparable organisations, as well as considering territory specific factors. We tested the calculation method used and
the accuracy thereof. We compared operating margin, working capital- and CAPEX percentage with past actuals. We challenged
the adequacy of management’s sensitivity analysis of the headroom. For all CGUs we calculated the degree to which these
assumptions would need to move before an impairment conclusion was triggered. We discussed the likelihood of such a
movement with management. We included valuation specialists in our team to assist us with these procedures. We also assessed
the adequacy of the disclosures (Note 7.9 and Note 7.4.3) in the financial statements.

Our results
From our sensitivity analysis, we found the likelihood of changes resulting in impairment losses to be unlikely.

2. Valuation of deferred taxes and valuation allowance on deferred tax assets related to tax
losses carried forward
Description of the key audit matter
Ontex has recognised a deferred tax asset and deferred tax liability of respectively EUR 29.3 million and EUR 34.7 million. EUR
124.1 million deferred tax asset position was not recognised, as disclosed in Note 7.19. Ontex recognised in 2019 EUR 0.2 million
deferred tax assets on previously unrecognised tax losses, while EUR 12,1 million deferred tax asset positions on tax losses of
2019 were not recognised as disclosed in Note 7.27. The valuation of the deferred tax positions at Ontex involved significant
judgement, more specifically in the determination of the recognition of deferred tax assets related to tax losses carried forward.
The estimation of the future taxable basis is highly judgemental as well as the assessment of the impact of tax laws and
regulations, tax planning action and strategies, rulings and transfer pricing. Because of all the aforementioned reasons, we found
this key audit matter to be of most significance for our audit.

How our audit addressed the key audit matter

We challenged the assumptions made to assess the recoverability of deferred tax assets related to tax losses carried forward and
the timing of the reversal of deferred tax positions. During our procedures, we used amongst others budgets, forecasts and tax
laws and in addition we assessed the historical accuracy of management’s assumptions. We involved tax specialists in our audit.
An important management judgement was the period over which taxable profits can be reliably estimated and consequently, no
deferred tax assets are recognised for tax losses used in any period beyond. We verified that the deferred tax position was
calculated at the enacted tax rate for the year in which the deferred tax position is expected to reverse.
We also assessed the adequacy and completeness of the Company’s disclosure included in
Note 7.4.1, 7.19 and 7.27 in respect of deferred taxes.
Our results
We found management’s judgements in respect of the Group’s deferred tax positions to be consistent and in line with our
expectations.

3. Accounting for accruals for sales incentives and purchase related incentives
Description of the key audit matter
Trade discounts and volume rebates related to both sales and purchases are subject to judgmental estimates and assessments
of the impact of commercial negotiations which take place after year-end. The impact of commercial negotiations is material and
hence of most significance for our audit. Ontex calculates an estimate of final incentives based on the information available until
the financial statements are established. Incentives related to sales are reported as deduction of Group’s revenue. Purchase
discounts are recorded as a deduction of the initial purchase.

How our audit addressed the key audit matter

We have agreed the discount percentages or lump sum payments to underlying customer and purchase agreements, we
recalculated the accrual and challenged the estimated impact of commercial negotiations taking into account the results. We also
performed back-testing on the accruals per 31 December 2018. We also reviewed credit notes and other adjustments to trade
receivables and trade payables after 31 December 2019 as part of our work around subsequent events. Finally we have audited
manual journal entries related to discounts in order to confirm that sufficient documentation and suitable attestations exist for
these entries.
Our results
Our work did not identify findings that are significant for the financial statements as a whole.

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Responsibilities of the board of directors for the preparation of the consolidated accounts
The board of directors is responsible for the preparation of consolidated accounts that give a true and fair view in accordance with
International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements
applicable in Belgium, and for such internal control as the board of directors determine is necessary to enable the preparation of
consolidated accounts that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated accounts, the board of directors is responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the board of directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Statutory auditor’s responsibilities for the audit of the consolidated accounts

Our objectives are to obtain reasonable assurance about whether the consolidated accounts as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated accounts.
In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the consolidated
accounts in Belgium. A statutory audit does not provide any certainty as to the Group’s future viability nor as to the efficiency or
effectiveness of the Board of Directors’ current and future business management.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
 Identify and assess the risks of material misstatement of the consolidated accounts, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the board of directors.

 Conclude on the appropriateness of the board of directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated accounts or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.

 Evaluate the overall presentation, structure and content of the consolidated accounts, including the disclosures, and
whether the consolidated accounts represent the underlying transactions and events in a manner that achieves fair
presentation.

 Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the board of directors and with the audit committee regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the board of directors and the audit committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors and with the audit committee, we determine those matters that were
of most significance in the audit of the consolidated accounts of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter.

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OTHER LEGAL AND REGULATORY REQUIREMENTS

Responsibilities of the board of directors
The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated financial
statements, the separate report on non-financial information and the other information included in the report on the consolidated
financial statements.
Statutory auditor’s responsibilities
In the context of our mandate and in accordance with the Belgian standard which is complementary to the International Standards
on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report on the
consolidated financial statements, the separate report on non-financial information and the other information included in the report
on the consolidated financial statements and to report on these matters.*
Aspects related to the directors’ report on the consolidated financial statements and to the other
information included in the annual report on the consolidated financial statements
In our opinion, after having performed specific procedures in relation to the directors’ report on the consolidated financial
statements, this report is consistent with the consolidated financial statements for the year under audit, and it is prepared in
accordance with article 3:32 of the Companies’ and Associations’ Code.
In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on
the knowledge acquired resulting from the audit, whether the directors’ report is materially misstated or contains information which
is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material
misstatements we have to report to you.
The non-financial information required by virtue of article 3:32, §2 of the Companies’ and Associations’ Code is included in the
directors’ report on the consolidated financial statements. The Company has prepared the non-financial information, based on
Global Reporting Initiative Standards. However, in accordance with article 3:80, §1, 5° of the Companies’ and Associations’ Code,
we do not express an opinion as to whether the non-financial information has been prepared in accordance with the Global
Reporting Initiative Standards as disclosed in the consolidated financial statements.

Statement related to independence

 Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the
consolidated financial statements, and our registered audit firm remained independent of the Group in the course of our
mandate.
 The fees for additional services which are compatible with the statutory audit of the consolidated financial statements
referred to in article 3:65 of the Companies’ and Associations’ Code are correctly disclosed and itemized in the notes to
the consolidated financial statements.

Other statements
This report is consistent with the additional report to the audit committee referred to in article 11 of the Regulation (EU)
N° 537/2014.

Ghent, 9 April 2020

The statutory auditor

PwC Bedrijfsrevisoren BV
Represented by

Peter Opsomer
Registered Auditor

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1. GENERAL INFORMATION
1.1. CORPORATE INFORMATION
The consolidated financial statements of Ontex Group NV for the year ended December 31, 2019 were authorized for issue in
accordance with a resolution of the Board of Directors on March 23, 2020.

1.2. BUSINESS ACTIVITIES

Ontex is a leading international provider of personal hygiene solutions, with expertise in baby care, feminine care and adult care.
Ontex’s innovative products are distributed in more than 110 countries through Ontex brands such as BBTips, BioBaby, Pompom,
Bigfral, Canbebe, Canped, ID and Serenity, as well as leading retailer brands. Employing around 9,600 passionate people all over
the world, Ontex has a presence in 21 countries, with its headquarters in Aalst, Belgium.

1.3. HISTORY OF THE GROUP

Ontex was founded in 1979 by Paul Van Malderen and initially produced mattress protectors for the Belgian institutional market.
During the 1980s and the first half of the 1990s, the Company expanded its product range into its current core product categories
and grew the business internationally both organically and through acquisitions.

After opening a production facility in the Czech Republic and acquiring businesses in Belgium, Germany and Spain, Ontex was
listed on Euronext Brussels in 1998. Following the listing, Ontex experienced rapid growth over several years, primarily through
bolt-on acquisitions in France, Germany and Turkey.

Ontex was acquired by funds advised by Candover in 2003 and subsequently de-listed from Euronext Brussels. Ontex acquired
a diaper production unit of Paul Hartmann in Germany in 2004 and opened a production facility in China in 2006. In 2008, we
opened a production facility in Algeria. In 2010, Ontex acquired iD Medica, which sells incontinence products in Germany.

In 2010, Ontex was acquired by funds managed by GSCP and TPG. In 2011, Ontex opened two additional production facilities,
one in Australia and one in Russia, and acquired Lille Healthcare, a company operating in the adult incontinence market in France.
In 2013, Ontex acquired Serenity, a company operating in the adult incontinence market in Italy, and opened a production facility
in Pakistan.

In June 2014, Ontex Group NV successfully listed its shares on the Euronext Brussels exchange and trades under the ticker
‘ONTEX’.

In February 2016, Ontex acquired Grupo Mabe, a leading Mexican manufacturer of disposable personal hygiene products.
In March 2017, Ontex has completed the acquisition of the personal hygiene business of Hypermarcas (renamed to “Ontex
Brazil”).

In July 2017 Ontex opened its new production plant in Ethiopia for the manufacturing of baby diapers that are specifically meeting
the needs of African families.
In February 2019, Ontex opened a new production plant in Radomsko, Poland to support its Central European business.

1.4. LEGAL STATUS

Ontex Group NV is a limited-liability company incorporated as a “naamloze vennootschap“ (“NV”) under Belgian law with company
registration number 0550.880.915. Ontex Group NV has its registered office at Korte Keppestraat 21, 9320 Erembodegem (Aalst),
Belgium. The shares of Ontex Group NV are listed on the regulated market of Euronext Brussels.

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2. CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT DECEMBER 31

ASSETS
in € million Note December 31, 2019 December 31, 2018

Non-current Assets
Goodwill 9 1,171.2 1,165.2
Intangible assets 9 52.0 51.8
Property, plant and equipment 10 622.7 593.4
Right of use assets 11 150.4 6.5
Deferred tax assets 19 29.3 26.5
Non-current receivables 13 18.1 5.1
2,043.7 1,848.5
Current Assets
Inventories 12 318.8 365.9
Trade receivables 13 324.2 355.4
Prepaid expenses and other receivables 13 49.1 69.1
Current tax assets 19 15.8 12.5
Derivative financial assets 5.1 1.4 3.6
Cash and cash equivalents 14 127.8 130.6
Non-current assets held for sale 10 4.2 4.0
841.2 941.1
TOTAL ASSETS 2,884.9 2,789.6

EQUITY AND LIABILITIES

in € million Note December 31, 2019 December 31, 2018
Equity attributable to owners of the company
Share capital & premium 15 1,208.0 1,208.0
Treasury shares (40.3) (42.1)
Cumulative translation reserves (172.6) (189.7)
Retained earnings and other reserves 203.1 208.0
TOTAL EQUITY 1,198.2 1,184.2

Non-current liabilities
Employee benefit liabilities 18 26.9 22.6
Interest-bearing debts 17 919.5 786.6
Deferred tax liabilities 19 34.7 49.9
Other payables 0.6 0.3
981.7 859.4
Current liabilities
Interest-bearing debts 17 69.6 104.0
Derivative financial liabilities 5.1 11.9 6.7
Trade payables 20 465.6 501.0
Accrued expenses and other payables 20 39.0 31.8
Employee benefit liabilities 20 55.1 47.9
Current tax liabilities 19 39.4 46.0
Provisions 21 24.4 8.6
705.0 746.0
TOTAL LIABILITIES 1,686.7 1,605.4
TOTAL EQUITY AND LIABILITIES 2,884.9 2,789.6
The accompanying notes are an integral part of the Audited Consolidated Financial Statements.

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3. CONSOLIDATED INCOME STATEMENT

FOR THE YEARS ENDED DECEMBER 31

in € million Full Year

Note 2019 2018
Revenue 6.1 2,281.3 2,292.2
Cost of sales 25 (1,661.3) (1,666.5)
Gross Margin 620.0 625.7

Distribution expenses 25 (203.4) (208.7)

Sales and marketing expenses 25 (168.3) (158.8)
General administrative expenses 25 (90.4) (83.0)
Other operating income/(expenses), net 23-25 (0.5) 1.9
Income and expenses related to changes to Group structure 24 (58.8) (15.5)
Income and expenses related to impairments and major litigations 24 (11.5) (8.8)
Operating profit 87.2 152.8

Finance income 26 2.6 2.5

Finance costs 26 (39.3) (29.9)
Net exchange differences relating to financing activities 26 (1.0) (1.2)
Net finance cost (37.7) (28.6)

Profit before income tax 49.5 124.2

Income tax expense 27 (12.2) (27.2)

Profit for the period from continuing operations 37.3 97.0
Profit for the period 37.3 97.0

Profit attributable to:

Owners of the parent 37.3 97.0
Profit for the period 37.3 97.0

Earnings per share:

in € million Full Year

Note 2019 2018
Basic earnings per share 16 0.46 1.20
Diluted earnings per share 16 0.46 1.20
Adjusted basic earnings per share 16 1.07 1.35
Adjusted diluted earnings per share 16 1.07 1.35
Weighted average number of ordinary shares
80,804,164 81,020,929
outstanding during the period

The accompanying notes are an integral part of the Audited Consolidated Financial Statements.

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4. CONSOLIDATED STATEMENT OF COMPREHENSIVE

INCOME
FOR THE YEARS ENDED DECEMBER 31

in € million Full Year

2019 2018
Profit for the period 37.3 97.0
Other comprehensive income/(loss) for the period, after tax:

Remeasurements of defined benefit plans (note 7.18) (3.7) 0.3

Deferred tax on items that will not be reclassified subsequently to income
0.8 -
statement
Items that will not be reclassified subsequently to income statement,
(2.8) 0.3
net of tax

Exchange differences on translating foreign operations 17.1 (30.8)

Fair value remeasurements - Cash flow hedge (5.9) (3.1)
Deferred tax on items that will be reclassified subsequently to income statement 1.2 -
Items that will be reclassified subsequently to income statement, net of tax 12.4 (33.9)

Other comprehensive income/(loss) for the period, net of tax 9.5 (33.6)
Total comprehensive income for the period 46.8 63.4

Total comprehensive income attributable to:

Owners of the parent 46.8 63.4
Total comprehensive income for the period 46.8 63.4

The accompanying notes are an integral part of the Audited Consolidated Financial Statements.

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5. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31

in € million Attributable to equity holders of the Company

Retained
Cumulative earnings
Number of Share Share Treasury translation and other Total
shares capital Premium shares reserves reserves Equity
Balance at December 31,
82,347,218 795.2 412.8 (42.1) (189.7) 208.0 1,184.2
2018
Restatement opening
(1.0) (1.0)
balance (IFRS 16)
Restatement opening
(2.5) (2.5)
balance (IFRIC 23)
Restated Balance at
82,347,218 795.2 412.8 (42.1) (189.7) 204.5 1,180.6
December 31, 2018
Transactions with
owners at the level of
Ontex Group NV:
Share-based payments - - - 1.8 - 2.1 4.0
Dividends - - - - - (33.1) (33.1)
Treasury Shares - - - - - (0.1) (0.1)
Total transactions with
- - - 1.8 - (31.0) (29.2)
owners 2019
Comprehensive income:
Profit for the period - - - - - 37.3 37.3
Other comprehensive
income:
Exchange differences on
translating foreign - - - - 17.1 - 17.1
operations
Remeasurements of
defined benefit pension - - - - - (2.8) (2.8)
plans
Fair value
remeasurements - Cash - - - - - (4.8) (4.8)
flow hedge
Total other comprehensive
- - - - 17.1 (7.6) 9.5
income
Balance at December 31,
82,347,218 795.2 412.8 (40.3) (172.6) 203.1 1,198.2
2019

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in € million Attributable to equity holders of the Company

Retained
Cumulative earnings
Number of Share Share Treasury translation and other Total
shares capital Premium shares reserves reserves Equity
Balance at December 31,
82,347,218 795.2 412.8 (31.3) (158.9) 160.2 1,178.0
2017
Transactions with
owners at the level of
Ontex Group NV:
Share-based payments - - - 1.2 - 2.4 3.6
Dividends - - - - - (48.8) (48.8)
Treasury Shares - - - (12.0) - - (12.0)
Total transactions with
- - - (10.8) - (46.4) (57.2)
owners 2018
Comprehensive income:
Profit for the period - - - - - 97.0 97.0
Other comprehensive
income:
Exchange differences on
translating foreign - - - - (30.8) - (30.8)
operations
Remeasurements of
defined benefit pension - - - - - 0.3 0.3
plans
Fair value
remeasurements - - - - - - (3.1) (3.1)
Cash flow hedge
Total other
- - - - (30.8) (2.8) (33.6)
comprehensive income
Balance at December 31,
82,347,218 795.2 412.8 (42.1) (189.7) 208.0 1,184.2
2018

The accompanying notes are an integral part of the Audited Consolidated Financial Statements.
The shareholding of Ontex Group NV based on the declarations, received in the period up to December 31, 2019, is as follows:

Shareholder December 31, 2019 %1

Groupe Bruxelles Lambert SA 16,454,453 19.98%
ENA Investment Capital 8,562,481 12.53%
Morgan Stanley 4,202,626 5.10%
Janus Capital Management LLC 3,424,055 4.75%
The Pamajugo Irrevocable Trust 2,722,221 3.64%
CIAM 2,614,990 3.18%
1
At the time of the transparency declaration

The accompanying notes are an integral part of the Audited Consolidated Financial Statements.

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6. CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

in € million Full Year

2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period 37.3 97.0
Adjustments for:
Income tax expense 12.2 27.2
Depreciation and amortization 87.6 56.9
Impairment losses and results on disposal of property, plant and equipment 7.9 7.1
Provisions (including employee benefit liabilities) 20.1 5.3
Change in fair value of financial instruments 2.3 (4.9)
Net finance cost 37.7 28.6
Changes in working capital:
Inventories 49.8 (39.9)
Trade and other receivables and prepaid expenses 44.4 24.5
Trade and other payables and accrued expenses (25.1) 4.4
Employee benefit liabilities 7.0 2.6
Cash from operating activities before taxes 281.3 208.8
Income taxes paid (42.3) (39.1)
NET CASH GENERATED FROM OPERATING ACTIVITIES 239.0 169.7

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment and intangible assets (103.9) (103.8)
Proceeds from disposal of property, plant and equipment and intangible assets 2.2 2.6
Payment for acquisition of subsidiary, net of cash acquired (note 8) - (16.5)
Commitments from business combinations - (0.3)
NET CASH USED IN INVESTING ACTIVITIES (101.7) (118.0)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings (note 17) 48.8 58.6
Repayment of borrowings (note 17) (122.3) (25.4)
Interests paid (note 26) (31.3) (21.8)
Interests received (note 26) 2.6 2.5
Cost of refinancing & other costs of financing (7.3) (3.0)
Realized foreign exchange (losses)/gains on financing activities 2.9 (0.5)
Derivative financial assets (1.2) (1.2)
Dividends paid (33.1) (48.8)
NET CASH GENERATED FROM / (USED IN) FINANCING ACTIVITIES (141.0) (39.6)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (3.6) 12.1
Cumulative translation differences on cash movements 0.9 -

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 130.6 118.5
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 127.8 130.6

The accompanying notes are an integral part of the Audited Consolidated Financial Statements.

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7. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7.1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
7.1.1. Introduction
The accounting policies used to prepare the consolidated financial statements for the period from January 1, 2019 to December
31, 2019 are consistent with those applied in the audited consolidated financial statements for the year ended December 31, 2018
of Ontex Group NV, except for the introduction of the new requirements applied to lease agreements as a result of the application
of IFRS 16 – Leases (see below). The accounting policies have been consistently applied to all the periods presented.

7.1.2. Basis of preparation

These consolidated financial statements of the Ontex Group NV for the year ended December 31, 2019 have been prepared in
compliance with IFRS (“International Financial Reporting Standards”) as adopted by the European Union. These include all IFRS
standards and IFRIC interpretations issued and effective as at December 31, 2019. The new standards, amendments to standards
and interpretations that are mandatory for the first time for the financial year beginning January 1, 2019, did not have a significant
impact, except for IFRS 16. No new standards, amendments to standards or interpretations were early adopted, except for the
amendments to IFRS 9, IAS 39 and IFRS 7 related to the IBOR Reform.

These consolidated financial statements have been prepared under the historical cost convention, except for certain financial
instruments for which fair value is used (such as derivative instruments).

These financial statements are prepared on an accrual basis and on the assumption that the entity is in going concern and will
continue in operation in the foreseeable future.

The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise judgment in the process of applying the Group accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 7.4.

IFRS accounting standards to be adopted as from 2019 and onwards

The following relevant new standards and amendments to existing standards have been published and endorsed by the European
Union and are mandatory for the first time for the financial periods beginning on or after January 1, 2019:

IFRS 16 – Leases (effective January 1, 2019): IFRS 16 supersedes IAS 17 – Leases and related interpretations. For lessees,
IFRS 16 requires most leases to be recognized on-balance (under a single model), eliminating the distinction between operating
and finance leases. In accordance with the new standard, the lessee will recognize assets and liabilities for the rights and
obligations created by leases. The standard increases interest-bearing liabilities and non-current assets (new class “Right-of-use
assets”) in the consolidated financial statements of the Ontex Group. In addition, the rental expenses recognized in profit or loss
will decrease and depreciation and amortization as well as interest expenses will increase. As a result of these impacts, EBITDA
will be impacted significantly. However, operating result and net result (profit of the period) will only be impacted to a limited extent.

Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform (effective January 1, 2020, but early adopted):
The amendments deal with issues affecting financial reporting in the period before the replacement of an existing interest rate
benchmark with an alternative interest rate and address the implications for specific hedge accounting requirements.

Amendments to IAS 19 – Employee Benefits (effective January 1, 2019): The amendments clarify that if a plan amendment,
curtailment or settlement occurs, it is now mandatory that the current service cost and the net interest for the period after the
remeasurement are determined using the assumptions used for the remeasurement.

Annual improvements 2015-2017 (effective January 1, 2019): The Improvements contain amendments to four standards as a
result of the IASB's annual improvements project. Amendments to IFRS 3 – Business Combinations and IFRS 11 – Joint
Arrangements clarify the definition of a business and the accounting for previously held interests. The amendment to IAS 12 –
Income Taxes clarify that all income tax consequences of dividends (i.e. distribution of profits) should be recognized in profit or
loss, regardless of how the tax arises and finally, the amendment to IAS 23 – Borrowing Costs clarify the accounting for specific
borrowings which remain outstanding after the related asset is ready for its intended use or sale.

IFRIC 23 – Uncertainty over Income Tax Treatments (effective January 1, 2019): This Interpretation sets out how to determine
the accounting tax position when there is uncertainty over income tax treatments. The Group has performed an assessment of its
uncertain tax positions and the application of IFRIC 23 is not anticipated to have a significant impact on the future consolidated
financial statements. The Group applies these new guidelines retrospectively with the cumulative effect of initially applying the
interpretation recognized on January 1, 2019 (modified retrospective approach) in accordance with the transition requirements of
IFRIC 23. As such, the Group restated its opening balance of equity as a result of initially applying the principles of IFRIC 23 for
an amount of € 2.5 million.

The above-mentioned standards did not have an impact on the financial statements, except for IFRIC 23 (see impact above) and
IFRS 16:

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The Ontex Group applied the new guidelines for lease accounting retrospectively with the cumulative effect of initially applying
the standard recognized on January 1, 2019 (modified retrospective approach) in accordance with the transition requirements of
IFRS 16. The comparative statements have not been restated.

Upon transition, the Group used following practical expedients authorized by the standard:

 Applying a single discount rate to a portfolio of leases with reasonably similar characteristics;
 Excluding initial direct costs from the measurement of the right-of-use asset at the date of initial application;

 Using hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease;

 Not reassessing whether a contract is, or contains, a lease at the date of initial application, for contracts entered into
before January 1, 2019;

 Relying on previous assessments on whether leases are onerous as an alternative to performing an impairment review –
there were no onerous contracts as at January 1st, 2019

For short-term leases (lease term of 12 months or less) and leases of low-value assets (mainly IT equipment and small office
furniture), the Group has opted to recognize a lease expense on a straight-line basis as permitted by IFRS 16 over the lease term.

Following the adoption of IFRS 16, the Group has changed its accounting policy for leases. The new policy is described below.

The impact of the changes in accounting policies impacts only the opening balance of equity (reversal of operating lease incentives
recognized previously as deferred income) and the opening balance of the statement of financial position. As a result of the
application of the revised accounting policies due to the application of IFRS 16 on a modified retrospective basis, the Group
recognized lease liabilities for an amount of € 148.0 million relating to leases previously classified as operating leases under IAS
17. These liabilities were measured at the present value of the remaining lease payments, discounted using the Group’s
incremental borrowing rate as of January 1, 2019.
The related right-of-use assets were measured at the amount equal to the lease liability, adjusted for the outstanding balance of
accrued rental expenses and an initial estimate of restoration and dismantling costs amounting to € 0.3 million and the outstanding
balance of assets relating to favorable lease contracts acquired as part of past business combinations.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the
lessor. Leased assets may not be used as security for borrowing purposes

Leases classified under IAS 17 as finance leases were previously presented a part of property, plant and equipment (2018: € 6.5
million) and are, as from 2019, presented as part of the new line item “Right-of-use assets” in the statement of financial position.
No contracts have been assessed to be onerous at transition date.
The weighted average incremental borrowing rate used at transition date is 4.56%.

Following table presents a reconciliation between the note disclosing the non-cancellable lease commitments as reported in the
2018 consolidated financial statements and the lease liabilities recognized at transition date:

in € million
Operating lease commitment as disclosed in the
160.9
2018 consolidated financial statements
Recognition exemption
Short term leases (1.6)
Leases of low value assets (5.1)
Contracts excluded as not in scope of IFRS 16 (0.9)
Extension and termination options reasonably certain to be exercised 28.0
Total lease commitments in scope of IFRS 16 per December 31, 2018 181.3
Discounted using the incremental borrowing rate at January 1, 2019 (33.3)
Lease liabilities recognized at January 1, 2019 148.0

Relevant IFRS accounting pronouncements to be adopted as from 2020 onwards

A number of new standards, amendments to existing standards and annual improvement cycles have been published and are
mandatory for the first time for reporting periods beginning on or after January 1, 2020 and have not been early adopted. Those
which may be the most relevant to the Ontex Group’s consolidated financial statements are set out below, but are expected not
to have a significant impact on the Ontex’ consolidated financial statements.

Amendments to IFRS 3 – Definition of a Business (effective January 1, 2020, but not yet endorsed in EU): The amendments aim
to assist companies to determine whether it has acquired a business or a group of assets.

Amendments to IAS 1 and IAS 8 – Definition of Material (effective January 1, 2020): The amendments clarify the definition of
“material” and align the definition used in the Conceptual Framework and the standards.

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7.1.3. Consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has control. Control is established when the Group is exposed, or has the rights,
to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the
subsidiary. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity
interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a
contingent consideration agreement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities
assumed and contingent liabilities assumed in a business combination are measured initially at their fair values at acquisition
date. On an acquisition-by-acquisition basis, the Group recognizes any non-controlling interest in the acquiree at fair value or at
the non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration of any non-controlling interest in the acquiree and the acquisition date fair value of any previous
equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as
goodwill. If this is less than the fair value of the net assets of the subsidiary in the case of a bargain purchase, the difference is
recognized directly in the income statement.

Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized
losses are also eliminated but considered an impairment indicator of the asset transferred.

Transactions with non-controlling interests

The Group treats the transactions with non-controlling interests as transactions with equity owners of the Group. For purchases
from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value
of the net assets of the subsidiary is recorded in equity. Gains and losses on disposal to non-controlling interests are also recorded
in equity.

When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value,
with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequent accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income
are reclassified to profit or loss.

7.1.4. Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets
of the acquired subsidiary at the date of acquisition. Separately recognized goodwill is tested annually for impairment and carried
at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal
of an entity include the carrying amount of goodwill relating to the entity sold.
The goodwill recognized in the statement of financial position is allocated to four Cash Generating Units (CGUs). These CGUs
are Europe, Healthcare, Middle East, Africa and Asia and Americas. They represent the lowest level within the entity at which the
goodwill is monitored for internal management purposes. This is in line with the centralized business model that was implemented
during 2010.

7.1.5. Foreign currencies

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in euro,
which is the Group’s presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income
statement.

Foreign exchange gains and losses that relate to interest-bearing debts and cash and cash equivalents are presented in the
income statement within ‘Net finance cost’. All other foreign exchange gains and losses are presented in the income statement
within ‘Other operating income/(expenses), net’.

For the purpose of presenting consolidated financial statements, assets and liabilities of the Group’s foreign operations are
translated at the closing rate at the end of the reporting period. Items of income and expense are translated at the monthly average
exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions), and equity
items are translated at historical rates. The resulting exchange rate differences are recognized in other comprehensive income
and accumulated in a separate component of equity.

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The principal exchange rates that have been used are as follows:

December 31, 2019 December 31, 2018

Currency Closing Rate Av Rate Year Closing Rate Av Rate Year
AUD 1.5995 1.6106 1.6220 1.5798
BRL 4.5157 4.4135 4.4440 4.3089
CZK 25.4080 25.6697 25.7240 25.6440
GBP 0.8508 0.8773 0.8945 0.8847
MXN 21.2202 21.5573 22.4921 22.7141
PLN 4.2568 4.2975 4.3014 4.2605
RUB 69.9563 72.4593 79.7153 74.0385
TRY 6.6843 6.3573 6.0588 5.6968
USD 1.1234 1.1196 1.1450 1.1814

7.1.6. Intangible assets

An intangible asset is recognized on the statement of financial position when the following conditions are met: (1) the asset is
identifiable, i.e. either separable (if it can be sold, transferred, licensed) or it results from contractual or legal rights; (2) it is probable
that the expected future economic benefits that are attributable to the asset will flow to the Group; (3) the Group can control the
resource; and (4) the cost of the asset can be measured reliably.

Intangible assets are carried at acquisition cost (including the costs directly attributable to the transaction) less any accumulated
amortizations and less any accumulated impairment losses.
Within the Group, internally generated intangibles represent IT projects and product/process development projects.

Development costs that are directly attributable to the design and testing of identifiable and unique projects controlled by the
Group are recognized as intangible assets when the following criteria are met:
 it is technically feasible to complete the project so that it will be available for use

 management intends to complete the project and use or sell it

 there is an ability to use or sell the project

 it can be demonstrated how the project will generate probable future economic benefits

 adequate technical, financial and other resources to complete the development and to use or sell the project are available,
and

 the expenditure attributable to the project during its development can be reliably measured.

The Group’s systems allow a reliable measure of expenses directly attributable to the different IT and product/process
development projects.

Research expenditure and development expenditure that do not meet the criteria above are recognized as an expense as incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
Externally acquired software is carried at acquisition cost less any accumulated amortization and less any accumulated
impairment loss.

Maintenance costs as well as the costs of minor upgrades whose objective is to maintain (rather than increase) the level of
performance of the asset are expensed as incurred.

Borrowing costs that are directly attributable to the acquisition, construction and or production of a qualifying intangible asset are
capitalized as part of the cost of the asset.
Intangible assets are amortized on a systematic basis over their useful life, using the straight-line method. The applicable useful
lives are:

Intangible assets
Brands 20 years
IT implementation costs 5 years
Capitalized development costs 3 to 5 years
Licenses 3 to 5 years
Acquired concessions, patents, know-how, and other similar rights 5 years

Amortization commences only when the asset is available for use.

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7.1.7. Property, plant and equipment

Property, plant and equipment are carried at acquisition cost less any accumulated depreciation and less any accumulated
impairment loss. Acquisition cost includes any directly attributable cost of bringing the asset to working condition for its intended
use. Borrowing costs that are directly attributable to the acquisition, construction and/or production of a qualifying asset are
capitalized as part of the cost of the asset.

Expenditure on repair and maintenance which serve only to maintain, but not increase, the value of fixed assets is charged to the
income statement. However, expenditure on major repair and major maintenance, which increases the future economic benefits
that will be generated by the fixed asset, is identified as a separate element of the acquisition cost. The cost of property, plant and
equipment is broken down into major components. These major components, which are replaced at regular intervals and
consequently have a useful life that is different from that of the fixed asset in which they are incorporated, are depreciated over
their specific useful lives. In the event of replacement, the component is replaced and removed from the statement of financial
position, and the new asset is depreciated up until the next major repair or maintenance.

The depreciable amount is allocated on a systematic basis over the useful life of the asset, using the straight-line method. The
depreciable amount is the acquisition cost, less residual value, if any. The applicable useful lives are:

Property, plant and equipment

Land N/A
Land improvements and buildings 30 years
Plants, machinery and equipment 10 to 15 years
Furniture and vehicles 4 to 8 years
Other tangible assets 5 years
IT equipment 3 to 5 years

The useful life of the machines is reviewed regularly. Each time a significant upgrade is performed, such upgrade extends the
useful life of the machine. The cost of the upgrade is added to the carrying amount of the machine and the new carrying amount
is depreciated prospectively over the remaining estimated useful life of the machine.

7.1.8. Leases
The Group leases several properties, machinery, vehicles and IT equipment. Leases are recognized as a right-of-use asset and
corresponding liability at the date of which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:

 fixed payments (less any lease incentives),

 variable lease payments that are based on an index or rate,

 the exercise price of a purchase option if the group is reasonably certain to exercise that option, and

 payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, or the
Group’s incremental borrowing rate, i.e. the rate of interest that a lessee would have to pay to borrow over a similar term, and with
a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment.

The group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the right-of-use asset.

Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the remaining
balance of the liability. Finance expenses are recognized immediately in profit or loss, unless they are directly attributable to
qualifying assets, in which case they are capitalized.

Right-of-use assets are measured at cost comprising the following:

 the amount of the initial measurement of lease liability,

 any lease payments made at or before the commencement date less any lease incentives received,

 any initial direct costs, and

 an estimate of the costs related to the dismantling and removal of the underlying asset.

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 If it is reasonably certain that the Group will exercise a purchase option, the asset shall be depreciated on a straight-line
basis over its useful life (see property, plant and equipment above). In all other circumstances the asset is depreciated on
a straight-line basis over the shorter of the useful life of the asset or the lease term.

 For short-term leases (lease term of 12 months or less) or leases of low-value items (mainly IT equipment and small office
furniture) to which the Group applies the recognition exemptions available in IFRS 16, lease payments are recognized on
a straight-line basis as an expense over the lease term.

 Some property leases contain variable payment terms that are linked to the use of the property (mainly warehouses).
Variable lease payments that depend on the use are recognized in profit or loss in the period in which the condition that
triggers those payments occurs.

7.1.9. Impairment of non-financial assets, other than goodwill

Intangible assets with indefinite useful lives and intangible assets not yet available for use are not subject to amortization, but are
tested annually for impairment.
Other assets which are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value
in use.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognized immediately in profit or loss.

7.1.10. Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises the production costs, like raw materials, direct labor, and also the
indirect production costs (production overheads based on normal operating capacity). Net realizable value is the estimated selling
price in the ordinary course of business, less applicable variable selling expenses.

Spare parts held by the Group are classified as property, plant and equipment if they are expected to be used in more than one
period and if they are specific to a single machine. If they are not expected to be used in more than one period or if they can be
used on several machines, they are classified as inventory. For the spare parts classified as inventory, the Group uses write-down
rules based on the economic use of these spare parts.

7.1.11. Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through
a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and
the asset (or disposal group) is available for immediate sale in its present condition. For a sale to be highly probable, management
should be committed to a plan to sell the asset (or disposal group), an active program to locate a buyer and complete the plan
should be initiated, the asset (or disposal group) should be actively marketed at a price which is reasonable in relation to its current
fair value, the sale should be expected to be completed within one year from the date of classification, and actions required to
complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be
withdrawn.

A disposal group is a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and
liabilities directly associated with those assets that will be transferred in the transaction. The group includes goodwill acquired in
a business combination if the group is a cash-generating unit to which goodwill has been allocated, or if it is an operation within
such a cash-generating unit.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary
are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-
controlling interest in its former subsidiary after the sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount
and fair value less costs to sell. Any excess of the carrying amount over the fair value less costs to sell is recognized as an
impairment loss. Depreciation of such assets is discontinued as from their classification as held for sale. Prior period consolidated
statements of financial position are not restated to reflect the new classification of a non-current asset (or disposal group) as held
for sale.

A discontinued operation is a component of the Group which the Group has disposed of or which is classified as held for sale,
and which:
 represents a separate major line of business or geographical area of operations;

 is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or

 is a subsidiary acquired exclusively with a view to resale.

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7.1.12. Revenue recognition

Ontex Group’s core activity is the sale of goods with as only performance obligation the delivery of goods. As such, the Group
recognizes revenue at a point in time when control of the goods is transferred to the customer, generally on delivery of the goods.
The Group sells its products to its customers directly, through distributors or agents. This can result in a different moment to
recognize revenue. Following delivery to distributors, the distributor has full discretion over the manner of distribution and price to
sell the goods, has the primary responsibility when selling the goods and bears the risks of obsolescence and loss in relation to
the goods.

Next to the sale of goods, distinct services – mainly customer training or customer assistance services – are rendered
predominantly over the period that the corresponding goods are sold to the customer. Transportation (shipping) is not be
considered as a separate performance obligation as control over the goods is only transferred to the customer after the shipment.

Payment terms can differ depending on the customer, based on the credit risk and prior payment behavior of the customer. In
addition, the geographical location of the company and the customer have an effect on the payment terms. There are no significant
financing components in the transaction prices and the considerations are paid in cash.
Customer contracts include trade discounts or volume rebates, which are granted to the customer if the delivered quantities
exceed a certain threshold. In these cases, the transaction price includes a variable consideration. The effect of the variable
consideration on the transaction price is taken into account in revenue recognition by estimating the probability of the realization
of the discount or rebate for each contract. Furthermore, the estimated variable consideration is included in the transaction price
only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur
when the uncertainty associated with the variable consideration is subsequently resolved (constraining the variable consideration).
Furthermore, the Group considers all payments made to customers and whether these are related to the revenue generated from
the customer.

A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because
only the passage of time is required before the payment is due.

7.1.13. Financial assets

The Group classifies its financial assets in the following categories: financial assets at fair value and financial assets at amortized
cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows. Management determines the classification of its financial assets at initial recognition.
Regular purchases and sales of financial assets are recognized on the trade date – the date on which the Group commits to
purchase or sell an asset.

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets (such as loans, trade and other receivables, cash and cash equivalents) are subsequently measured at amortized
cost using the effective interest method, less any impairment if they are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest.

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all
fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on
initial recognition.
Trade and other receivables after and within one year are recognized initially at fair value and subsequently measured at amortized
cost, i.e. at the net present value of the receivable amount, using the effective interest rate method, less allowances for impairment.

The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortized
cost. For trade receivables, the group applies the simplified approach permitted by IFRS 9 Financial Instruments, which requires
expected lifetime losses to be recognized from initial recognition of the receivables.

The amount of the allowance is deducted from the carrying amount of the asset and is recognized in the income statement within
‘Sales and marketing expenses’.

Trade receivables are no longer recognized when (1) the rights to receive cash flows from the trade receivables have expired, (2)
the Group has transferred substantially all risks and rewards related to the receivables.

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group
neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset,
the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group
retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the
financial asset and also recognizes a collateralized borrowing for the proceeds received.

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On de-recognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income
and accumulated in equity is recognized in profit or loss.

On de-recognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of a
transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to
recognize under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts
on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the
sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been
recognized in other comprehensive income is recognized in profit or loss. A cumulative gain or loss that had been recognized in
other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer
recognized on the basis of the relative fair values of those parts.

7.1.14. Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with
original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the statement of
financial position.

7.1.15. Share capital

Ordinary shares are classified as equity. Where any Group company purchases the company’s equity share capital (treasury
shares), the consideration paid is deducted from equity attributable to owners of the company until the shares are cancelled or
reissued. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from
the proceeds.

Financial instruments, such as the Convertible Preferred Equity Certificates (CPECs), are either classified as financial liabilities
or equity. The financial instrument is included in equity if, and only if, the instrument does not include a contractual obligation to
deliver cash or another financial asset or to exchange financial assets or liabilities under conditions that are potentially unfavorable
to the Group, and if the instrument will or may be settled in a fixed number of the Group’s own equity instruments.

7.1.16. Government grants

Grants from governments are recognized at their fair value where there is a reasonable assurance that the grant will be received
and the Group will comply with all attached conditions.
Government grants relating to property, plant and equipment are deducted from the acquisition cost of the assets to which they
relate and are credited to the income statement on a straight-line basis over the expected lives of the related assets.

7.1.17. Employee benefits

Short-term employee benefits
Short-term employee benefits are recorded as an expense in the income statement in the period in which the services have been
rendered. Any unpaid compensation is included in ‘Employee benefit liabilities’ in the statement of financial position.

Post-employment benefits
Group companies operate various pension schemes. Most of the schemes are unfunded. Some schemes are funded through
payments to insurance companies or pension funds, determined by periodic actuarial calculations. The Group has both defined
benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions
into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit
plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit
that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and
compensation.

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually
by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension
obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to
other comprehensive income in the period in which they arise.

Past-service costs are recognized immediately in income. The net interest cost relating to the defined benefit plans is recognized
within financial expenses.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.
The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an
asset to the extent that a cash refund or a reduction in the future payments is available.

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Long-term employee benefits

Unfunded obligations arising from long-term benefits are provided for using the projected unit credit method.

Termination benefits
Early termination obligations are recognized as a liability when the Group is ‘demonstrably committed’ to terminating the
employment before the normal retirement date. The Group is ‘demonstrably committed’ when, and only when, it has a detailed
formal plan for the early termination without realistic possibility of withdrawal. Where such benefits are long term, they are
discounted using the same rate as above for defined benefit obligations.

7.1.18. Share-based payments

The Group operates an equity settled share-based compensation plan, consisting of stock options (hereafter ‘options’), restricted
stock units (‘RSU’) and performance stock units (‘PSU’). For grants of options, RSU’s and PSU’s, the fair value of the employee
services received is measured by reference to the fair value of the shares or options granted on the date of the grant. The Group
recognizes the fair value of the services received in exchange for the grant of the options as an expense and a corresponding
increase in equity on a straight-line basis over the vesting period. The fair value of the options granted is determined using option
pricing models, which take into account the exercise price of the option, the share price at date of grant of the option, the risk-free
interest rate, the expected volatility of the share price over the life of the option and other relevant factors. Vesting conditions
included in the terms of the grant are not taken into account in estimating fair value except where those terms relate to market
conditions. Non-market vesting conditions are considered by adjusting the number of shares or options included in the
measurement of the cost of employee services so that ultimately the amount recognized in the income statement reflects the
number of vested shares or options.
At each balance sheet date, the entity revises its estimates of the number of instruments that are expected to become exercisable
and recognizes the impact of revision of original estimates, if any, in the income statement and a corresponding adjustment to
equity over the remaining vesting period.

When the instruments are exercised, the proceeds received net of any directly attributable transaction costs are credited to share
capital (nominal value) and share premium.
The social security contributions payable in connection with the grant of the instruments is considered an integral part of the grant
itself, and the charge will be treated as a cash-settled transaction.

7.1.19. Provisions
Provisions are recognized when (I) the Group has a present legal or constructive obligation as a result of past events; (II) it is
probable that an outflow of resources will be required to settle the obligation; (III) and the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in
the provision due to passage of time is recognized as finance cost.
If the Group has an onerous contract, it will be recognized as a provision. Restructuring provisions comprise lease termination
penalties and employee termination payments. Provisions are not recognized for future operating losses.

A provision for restructuring is only recorded if the Group demonstrates a constructive obligation to restructure at the balance
sheet date. The constructive obligation should be demonstrated by: (a) a detailed formal plan identifying the main features of the
restructuring; and (b) raising a valid expectation to those affected that it will carry out the restructuring by starting to implement
the plan or by announcing its main features to those affected.

7.1.20. Income taxes

Income tax expense represents the sum of the tax currently payable and deferred tax.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Group’s subsidiaries operate and generate taxable income. In line with paragraph 46
of IAS 12 Income taxes, management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities. This evaluation is made for tax periods open for audit by the competent authorities.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period.
Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.

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However, the deferred tax is not recognized for:

 the initial recognition of goodwill;

 the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss and

 deferred tax is recognized on temporary differences arising on investments in subsidiaries and associates, except for
deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and
it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax liabilities are generally recognized for taxable temporary differences.

Deferred tax assets are generally recognized for tax losses and tax attributes to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilized. The carrying amount of deferred tax assets
is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.

Deferred taxes are calculated at the level of each fiscal entity in the Group. The Group is able to offset deferred tax assets and
liabilities only if the deferred tax balances relate to income taxes levied by the same taxation authority.

7.1.21. Financial liabilities

Financial liabilities (including borrowings and trade and other payables) are classified as at amortized cost, except for derivative
instruments (see 7.1.21 below).

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized
cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income
statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities
unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting
period.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including
all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount
on initial recognition.
When a financial liability measured at amortized cost is modified without this resulting in derecognition, a gain or loss is recognized
in profit or loss. The gain or loss is calculated as the difference between the original contractual cash flows and the modified cash
flows discounted at the original effective interest rate.
A limited part of trade payable is subject to reverse factoring. As the main risk and rewards of the trade payable remain with the
Group, the financial liability is not de-recognized from trade payables.

7.1.22. Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate, foreign exchange rate
and commodity price risks and equity price risks associated with share-based payments, including foreign exchange forward
contracts, commodity hedging contracts and interest rate CAP’s and SWAP’s and a total return swap.
Derivatives are accounted for in accordance with IFRS 9. Derivatives are initially recognized at fair value at the date the derivative
contracts are entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting
gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument,
in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

The fair values of various derivative instruments are disclosed in note 7.5 ‘Financial Instruments and Financial Risk Management’.
The full fair value of a derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is
more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

If no hedge accounting is applied, the Group recognizes all gains or losses resulting from changes in fair value of derivatives in
the consolidated income statement within Other operating income/expense to the extent that they relate to operating activities
and within Net finance cost to the extent that they relate to the financing activities of the Group (e.g. interest rate swaps relating
to the floating rate borrowings).

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable
right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability
simultaneously.

7.1.23. Hedge accounting

The Group designates certain hedging instruments, which include derivatives in respect of foreign currency risk and commodities,
as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

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At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the
inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in
offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized
in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the
ineffective portion is recognized immediately in profit or loss and is included in the ‘other operating income/(expense)' line item.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the
periods when the hedged item is recognized in profit or loss, in the same line of the consolidated income statement as the
recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a
non-financial liability, the gains and losses previously recognized in other comprehensive income and accumulated in equity are
transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument expires or is
sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other
comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction
is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated
in equity is recognized immediately in profit or loss.

7.1.24. Operating segments

The Group’s activities are in one segment. There are no other significant classes of business, either singularly or in aggregate.
The chief operating decision maker, the Board of Directors, reviews the operating results (defined as EBITDA) and operating
plans, and make resource allocation decisions on a company-wide basis; therefore, the Group operates as one segment.

7.1.25. Statement of cash flows

The cash flows of the Group are presented using the indirect method. This method reconciles the movement in cash for the
reporting period by adjusting net profit of the year for any non-cash items and changes in working capital, and identifying investing
and financing cash flows for the reporting period.

7.2. ALTERNATIVE PERFORMANCE MEASURES

Alternative performance measures (non-GAAP) are used in the financial communication of the Group since management believes
that they are widely used by certain investors, securities analysts and other interested parties as supplemental measure of
performance and liquidity. The alternative performance measures may not be comparable to similarly titled measures of other
companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our
operating results, our performance or our liquidity under IFRS.

7.2.1. Non-recurring income and expenses

Income and expenses classified under the heading “non-recurring income and expenses” are those items that are considered by
management not to relate to transactions, projects and adjustments to the value of assets and liabilities taking place in the ordinary
course of activities of the Company. Non-recurring income and expenses are presented separately, due to their size or nature, so
as to allow users of the consolidated financial statements of the Company to get a better understanding of the normalized
performance of the Company. Non-recurring income and expenses relate to:
 acquisition-related expenses;

 changes to the measurement of contingent considerations in the context of business combinations;

 changes to the Group structure, business restructuring costs, including costs related to the liquidation of subsidiaries and
the closure, opening or relocations of factories;

 impairment of assets and major litigations.

Non-recurring income and expenses of the Group for the years ended December 31 are composed of the following items
presented in the consolidated income statement and can be reconciled in note 7.24:

 income/(expenses) related to changes to Group structure; and

 income/(expenses) related to impairments and major litigations.

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7.2.2. EBITDA and Adjusted EBITDA

EBITDA is defined as earnings before net finance cost, income taxes, depreciations and amortizations. Adjusted EBITDA is
defined as EBITDA plus non-recurring income and expenses.
EBITDA and Adjusted EBITDA reconciliation of the Group for the years ended December 31 are as follows:

in € million Full Year

2019 2018
Operating profit 87.2 152.8
Depreciation and amortization 87.6 56.9
EBITDA 174.8 209.7

Non-recurring income and expenses 70.3 24.3

Adjusted EBITDA 245.1 234.0

7.2.3. Net financial debt/LTM Adjusted EBITDA ratio (Leverage)

Net financial debt is calculated by adding short-term and long-term debt and deducting cash and cash equivalents.

LTM adjusted EBITDA is defined as EBITDA plus non-recurring income and expenses for the last twelve months (LTM).
Net financial debt/LTM Adjusted EBITDA ratio of the Group for the years ended December 31 are presented in note 7.3 ‘Capital
Management’.

7.2.4. Free Cash Flow

Free cash flow was previously defined as Adjusted EBITDA less capital expenditures (Capex, defined as purchases of property,
plant and equipment and intangible assets), less change in working capital, less income taxes paid. This means that operating
lease payments were included in the Free cash flow.
As a result of the application of IFRS 16, lease payments will be reported as cash flows from financing activities. Considering that
operationally nothing has changed and IFRS 16 is only an accounting change, the definition of free cash flow is adjusted to include
the repayment of lease liabilities (i.e. excluding the interest expense).
Furthermore, the Group decided to disclose from now on Free cash flow instead of Adjusted free cash flow in order to facilitate
the reading and the reconciliation with the consolidated cash flow statement. As such, free cash flow is defined as net cash
generated from operating activities (as presented in the consolidated cash flow statement, i.e. including income taxes paid) less
capital expenditures (Capex, defined as purchases of property, plant and equipment and intangible assets), less repayment of
lease liabilities and including cash (used in)/from disposal.

Free Cash Flow of the Group for the years ended December 31 is as follows:

in € million Full Year

2019 2018
Operating profit 87.2 152.8
Depreciation and amortization 87.6 56.9
EBITDA 174.8 209.7
Non-cash items in cash flows from operating activities 30.3 7.5
Change in working capital
Inventories 49.8 (39.9)
Trade and other receivables and prepaid expenses 44.4 24.5
Trade and other payables and accrued expenses (25.1) 4.4
Employee benefit liabilities 7.0 2.6
Cash from operating activities before taxes 281.3 208.8
Income taxes paid (42.3) (39.1)
Net cash generated from operating activities 239.0 169.7
Capex (103.9) (103.8)
Cash (used in)/from on disposal 2.2 2.6
Repayment of lease liabilities (27.6) (2.4)
Free cash flow 109.7 66.1

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7.2.5. Adjusted Basic Earnings and Adjusted Basic Earnings per Share
Adjusted Basic Earnings (or Adjusted Profit) are defined as profit for the period plus non-recurring income and expenses and tax
effect on non-recurring income and expenses, attributable to the owners of the parent. Adjusted Basic Earnings per share are
defined as Adjusted Basic Earnings divided by the weighted average number of ordinary shares.

Adjusted Basic Earnings per Share for the years ended December 31 are presented in note 7.16 ‘Earnings per share’.

7.2.6. Working Capital

The components of our working capital are inventories, trade receivables and prepaid expenses and other receivables plus trade
payables and accrued expenses and other payables.

7.2.7. Alternative Performance Measures included in the Press releases and other Regulated
information
Pro-forma revenue at constant currency
Pro-forma revenue at constant currency is defined as revenue for the 12 months period ending on the reporting date at prior year
foreign exchange rates and inclusive of impact of mergers and acquisitions.

Like-for-Like (LFL) revenue

Like-for-like revenue is defined as revenue at constant currency excluding change in scope of consolidation or M&A.

Adjusted EBITDA margin

Adjusted EBITDA margin is adjusted EBITDA divided by revenue.

7.3. CAPITAL MANAGEMENT

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide benefits for shareholders.
The Group monitors capital on the basis of the net debt position. The Group’s net debt position is calculated by adding all short
and long-term interest-bearing debts and by deducting the available short-term liquidity.
The net debt positions of the Group for the years ended December 31 are as follows:

in € million December 31, 2019 December 31, 2018

Non-current interest-bearing debts 919.5 786.6
Current interest-bearing debts 69.6 104.0
Cash and cash equivalents (127.8) (130.6)
Total net debt position 861.3 760.0
LTM Adjusted EBITDA 245.1 234.0
Net financial debt/LTM Adjusted EBITDA ratio 3.51 3.25

The Group is subject to covenants, which are further disclosed in note 7.17.

7.4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The amounts presented in the consolidated financial statements involve the use of estimates and assumptions about the future.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The actual amounts may differ from
these estimates. The estimates and assumptions that could have an impact on the consolidated financial statements are discussed
below.

7.4.1. Income taxes

The Group has tax losses and other tax incentives usable to offset future taxable profits, mainly in Belgium, Brazil, France and
Spain, amounting to € 583.0 million at December 31, 2019 (€ 378.4 million at December 31, 2018).

As mentioned in the 2018 consolidated financial statements, the European Commission challenged Belgium’s excess profit ruling
(EPR) system, characterizing this system as illegal state aid. Ontex, through its Belgian subsidiary Ontex BVBA, had an EPR
covering the years 2011-2015. Ontex has lodged an appeal against this EC decision. The General Court has handed down its
judgment on February 14, 2019 in the joint case of Belgium vs Commission and Magnetrol International vs Commission. The
General Court has annulled the Commission’s Decision for the reason that the Commission erroneously considered that the
excess profit exemption system constituted an aid scheme. The European Commission has appealed the decision of the General
Court to the European Court of Justice and we await the outcome.
Furthermore, the European Commission announced on September 16, 2019 that it was opening formal investigations into each
of the individual EPRs including that of Ontex, as it believes that each EPR grants illegal state aid, even if the EPR system does

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not. The formal investigation into the Ontex EPR continues and it is unclear when a final decision can be expected. Ontex will
have the right to appeal against any decision that concludes the Ontex EPR grants illegal state aid. Any such appeal will take
some time to be heard.
Ontex had fully taken into account the impact of the Commission’s appeal that the EPR system is illegal state aid being successful,
and the Commission concluding that the Ontex EPR grants illegal state aid in its tax position. Since the outcome of both challenges
is not yet final, Ontex will not release the relevant provisions at this stage.
The Group has only recognized deferred tax assets on € 142.5 million of tax losses and other tax incentives out of the € 583.0
million mentioned above. The measurement of these deferred tax assets depends on a number of judgmental assumptions
regarding the future probable taxable profits of different Group subsidiaries in different jurisdictions. These estimates are made
prudently to the extent of the best current knowledge.

The Group applies significant judgement in identifying uncertainties over income tax treatments. Since the Group operates in a
complex multinational environment, it assesses whether certain uncertain tax provisions should be recognized in its consolidated
financial statements (based on the requirements of IFRIC 23).

7.4.2. Business combinations

For business combinations, the Group must make assumptions and estimates to determine the purchase price allocation of the
business being acquired. To do so, the Group must determine the acquisition-date fair value of the identifiable assets acquired
and liabilities assumed. These assumptions and estimates have an impact on the asset and liability amounts recorded in the
Consolidated Statement of Financial Position on the acquisition date. In addition, the estimated useful lives of the acquired
property, plant and equipment, the identification of other intangible assets and the determination of the indefinite or finite useful
lives of other intangible assets acquired requires significant judgments and will have an impact on the Group’s profit or loss.

7.4.3. Impairment
The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated in note
7.1.4 “Goodwill”. The outcome of these goodwill impairment tests in 2019 did not result in an impairment loss (2018: nil).
As a result of the organizational restructuring, the Group has revisited its cash-generating units used for impairment testing. As
such, the Group identifies the following cash-generating units as from January 1st, 2019:

 Europe (previously Mature Market Retail, plus Russia and Ukraine)

 Healthcare
 MEAA (Middle East, Africa and Asia; previously MENA, plus previous Growth Markets excluding Russia and Ukraine)

 Americas (previously Americas Retail)

The recoverable amounts of cash-generating units (‘CGUs’) have been determined based on value-in-use calculations. These
calculations require the use of estimates and assumptions, including macroeconomic conditions, demand and competition in the
markets where we operate, product offerings, product mix and pricing, raw materials availability and cost, direct and indirect
expenses, operating margins, growth rates, capital expenditure and working capital, etc. as reflected in Ontex’ financial budgets
and strategic plans, as well as discount rates. For more details on the impairment test performed, we refer to note 7.9 ‘Goodwill
and intangible assets’. The discount rates used are summarized here below:

in % Full Year
2019 2018
Pre-tax discount rate
Europe 6.1% 7.1%
Healthcare 6.4% 6.7%
Middle East, Africa and Asia 9.1% 11.7%
Americas 6.8% 9.5%

A sensitivity analysis indicates that the recoverable amount of Europe, Healthcare, Middle East Africa and Asia (MEAA) and
Americas would be equal to their carrying amount if the pre-tax discount rates of the CGUs were 10.9%, 19.8%, 17.5% and 10.2%,
respectively and all other variables kept constant.

As indicated in note 7.9, cash flows beyond the three-year period are extrapolated using an estimated growth rate of 1.0% for
Europe, 2.0% for Healthcare, 3.0% for MEAA and 3.6% for Americas. These same percentages are used as perpetual growth
rates. The growth rates have been determined by management but do not exceed the current market expectations in which the
four CGUs are currently operating. Should the growth rate for any of the CGUs decrease by 40%, no impairment would need to
be recognized.
Should the estimated operating margins decrease by 10%, no impairment would be recognized.

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Future cash flows are estimates that are likely to be revised in future periods as underlying assumptions change. Key assumptions
in supporting the value of goodwill include long-term interest rates and other market data. Should the assumptions vary adversely
in the future, the value in use of goodwill may reduce below their carrying amounts. Based on current valuations, headroom
appears to be sufficient to absorb a normal variation in the underlying assumptions.

7.4.4. Expected useful lives

The expected useful lives of the property, plant and equipment and intangible assets must be estimated. The determination of the
useful lives of the assets is based on management’s judgment and it is reviewed at least at each financial year-end, pursuant to
IAS 16 and IAS 38.

7.4.5. Fair value of derivatives and other financial instruments

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. The Group uses its judgment to select a variety of methods and make assumptions
that are mainly based on market conditions existing at the end of each reporting period. All derivative financial instruments are, in
accordance with IFRS 7, level 2. This means valuation methods are used for which all inputs that have a significant effect on the
recorded fair value are observable in the market, either directly or indirectly.

7.4.6. Employee benefits

The carrying amount of the Group’s employee benefit obligations is determined on an actuarial basis using certain assumptions.
One particularly sensitive assumption used for determining the net cost of the benefits granted is the discount rate. Any change
to this assumption will affect the carrying amount of those obligations.

The discount rate depends on the duration of the benefit, i.e. the average duration of the engagements, weighted with the present
value of the costs linked to those engagements. According to IAS 19, the discount rate should correspond to the rate of high-
quality corporate bonds of similar term to the benefits valued and in the same currency.

7.4.7. Revenue recognition

For the accrual for volume discounts (to customers and from suppliers) important judgements are made on the impact of
commercial decisions that will influence the final discount to be received or to be granted.

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7.5. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

7.5.1. Overview of financial instruments
The table below summarizes all financial instruments by category in accordance with IFRS 9 and discloses the fair values of each
instrument and the fair value hierarchy:

in € million December 31, 2019

Designated in
hedge Fair value
relationship At amortized cost Fair value level
Non-current receivables 18.1 18.1 Level 2
Trade receivables 324.2 324.2 Level 2
Other receivables 49.1 49.1 Level 2
Derivative financial assets 1.4 1.4
Cross-currency interest rate swaps 1.3 1.3 Level 2
Forward foreign exchange contracts 0.1 0.1 Level 2
Cash and cash equivalents 127.8 127.8 Level 2
Total Financial Assets 1.4 519.3 520.6

Interest-bearing debts - non-current 919.5 928.5

Syndicated Term Loan A > 1 year 591.0 600.0 Level 2
Term Loan > 1 year 150.0 150.0 Level 2
Lease & other liabilities 178.5 178.5 Level 2
Derivative financial liabilities 11.9 11.9
Interest rate swap 8.9 8.9 Level 2
Forward foreign exchange contracts 2.5 2.5 Level 2
Commodity hedging contracts 0.5 0.5 Level 2
Other payables - non-current 0.6 0.6 Level 2
Interest-bearing debts - current 69.6 69.6
Accrued interests - Other 1.2 1.2 Level 2
Total return swap 31.2 31.2 Level 2
Lease & other liabilities 37.1 37.1 Level 2
Trade payables 465.6 465.6 Level 2
Other payables - current 39.0 39.0 Level 2
Total Financial Liabilities 11.9 1,494.4 1,515.3

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in € million December 31, 2018

Designated in
hedge Fair value
relationship At amortized cost Fair value level
Non-current receivables 5.1 5.1 Level 2
Trade receivables 355.4 355.4 Level 2
Other receivables 69.1 69.1 Level 2
Derivative financial assets 3.6 3.6
Cross-currency interest rate swaps 1.4 1.4 Level 2
Forward foreign exchange contracts 2.0 2.0 Level 2
Commodity hedging contracts 0.2 0.2 Level 2
Cash and cash equivalents 130.6 130.6 Level 2
Total Financial Assets 3.6 560.2 563.8

Interest-bearing debts - non-current 786.6 798.8

Syndicated Term Loan A > 1 year 587.8 600.0 Level 2
Term Loan > 1 year 150.0 150.0 Level 2
Total return swap 33.0 33.0 Level 2
Financial lease & other liabilities 15.8 15.8 Level 2
Derivative financial liabilities 6.7 6.7
Interest rate swap 5.3 5.3 Level 2
Cross-currency interest rate swaps 0.9 0.9 Level 2
Forward foreign exchange contracts 0.2 0.2 Level 2
Commodity hedging contracts 0.2 0.2 Level 2
Other non-current financial liabilities 0.3 0.3 Level 2
Interest-bearing debts - current 104.0 104.0
Revolver credit loan 82.4 82.4 Level 2
Accrued interests - Other 1.2 1.2 Level 2
Financial lease & other liabilities 20.4 20.4 Level 2
Trade payables 501.0 501.0 Level 2
Other payables - current 31.8 31.8 Level 2
Total Financial Liabilities 6.7 1,423.7 1,442.6

In the context of the Group’s financial risk management, the Group uses derivative instruments to cover specific risks, such as
foreign currency exposure, interest rate exposure and commodity price exposure. The following table presents an overview of the
derivative instruments outstanding at reporting date:

in € million Fair value Nominal amounts

December 31, December 31, December 31, December 31,
2019 2018 2019 2018
Derivative financial assets 1.4 3.6 67.3 127.2
Cross-Currency Interest rate swap 1.3 1.4 47.0 20.0
Forward foreign exchange contracts 0.1 2.0 20.3 105.4
Commodity hedging contracts - 0.2 - 1.8
Derivative financial liabilities 11.9 6.7 625.5 832.8
Interest rate swap 8.9 5.3 510.0 767.4
Cross-Currency Interest rate swap - 0.9 - 32.4
Forward foreign exchange contracts 2.5 0.2 106.9 30.1
Commodity hedging contracts 0.5 0.2 8.5 2.9

The derivative instruments presented in the tables above are all designated in a cash flow hedge relationship (see below in notes
7.5.3 to 7.5.5).

The fair value of a derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is exceeding
12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months.

The fair value of the derivatives is based on level 2 inputs as defined under IFRS 7.27, meaning inputs that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

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The above table provides an analysis of financial instruments grouped into Levels 1 to 3 based on the degree to which the fair
value (recognized on the statement of financial position or disclosed in the notes) is observable:
 Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities.

 Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

 Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
The fair values of financial assets and financial liabilities are based on mathematical models that use market observable data and
are determined as follows:

 The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market prices (includes listed redeemable notes).

 The fair values of derivative instruments are calculated using quoted prices. Where such prices are not available, a
discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-
optional derivatives, and option pricing models for optional derivatives. Foreign currency forward contracts are measured
using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the
contracts. Interest rate swaps are measured at the present value of future cash flows estimated and discounted based on
the applicable yield curves derived from quoted interest rates.

 The fair values of other financial assets and financial liabilities (excluding those described above) are determined in
accordance with generally accepted pricing models based on discounted cash flow analysis.
 Level 3 liabilities: the amount has been determined based on contractual agreements.

The Group has derivative financial instruments which are subject to offsetting, enforceable master netting arrangements and
similar agreements. No offsetting needed to be done per December 31, 2019 (nor 2018).

The counterparties of the outstanding derivative instruments have an A-credit rating.

7.5.2. Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and commodity
price risk), credit risk and liquidity risk.
There have been no changes in the risk management department since last year-end or in any risk management policies.

7.5.3. Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the British pound (GBP), the Turkish lira (TRY), the Polish zloty (PLN), the Australian dollar (AUD), the Mexican
peso (MXN), the Brazilian real (BRL) and Russian ruble (RUB) in relation to sales, and the US dollar (USD), the Czech koruna
(CZK), the Mexican peso (MXN) and the Brazilian real (BRL) in relation to procurement. Foreign exchange risk arises from future
commercial transactions and recognized assets and liabilities. The Group also has exposures to the Turkish lira (TRY), Algerian
dinar (DZD), Russian ruble (RUB), Czech koruna (CZK), Australian dollar (AUD) Pakistani rupee (PKR), Mexican peso (MXN)
and Brazilian real (BRL) due to their net investments in foreign operations.

The carrying amounts of the Group's main foreign currency denominated monetary assets and monetary liabilities at the end of
the reporting period are as follows:

in € million Assets Liabilities

December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018
EUR 1,895.8 1,976.1 2,589.2 2,711.9
BRL 53.1 70.3 90.7 45.3
USD 95.6 83.1 160.0 144.9
MXN 56.3 43.2 36.7 59.8
PLN 107.8 95.1 61.7 47.9
DZD 34.7 21.3 8.0 1.0
RUB 26.9 21.1 1.2 2.3
GBP 66.9 43.1 44.5 27.2
TRY 18.7 16.4 6.5 9.3
AUD 29.6 29.0 17.1 15.4

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CONTEXT ENGAGEMENT

The Group monitors its foreign exchange exposure closely and will enter into hedging transactions if deemed appropriate to
minimize exposure throughout the Group to foreign exchange fluctuations. All hedging decisions are subject to approval of the
Board of Directors. The strategy regarding FX hedges was maintained.

To manage their foreign exchange risk arising from future commercial transactions, recognized assets and liabilities, the Group
uses forward exchange contracts. Foreign exchange risk arises when future commercial transactions, recognized assets and
liabilities are denominated in a currency that is not the entity’s functional currency. The Group treasury is responsible for optimizing
the net position in each foreign currency when possible and appropriate. The Group applies hedge accounting for the hedge
related transactions, the impact of the revaluation is recognized in other comprehensive income.
The Group has entered into foreign exchange forward contracts at the beginning of each quarter in 2019 maturing at the latest in
September 2020 in order to limit volatility in the business resulting from exposures to sales in British pound, Polish zloty, Australian
dollar as well as purchases in US dollar and Czech crown during 2019 and 2020. Based on the hedge strategy, the foreign
exchange forward contracts hedge the following forecasted exposures until September 30, 2020: for British pound (GBP) 37.5
million, for Polish zloty (PLN) 65.3 million, for Australian dollar (AUD) 25.0 million, for Czech crown (CZK) 159.3 million, for US
dollar (USD) 40.2 million versus EUR, US dollar (USD) 9.0 million versus Mexican peso (MXN) and US dollar (USD) 5.4 million
versus Brazilian real (BRL).

The terms of the foreign currency forward contracts have been negotiated to match the terms of the highly probable forecast
transactions. The Group applies hedge accounting to the foreign currency forward contracts. At inception, these instruments were
designated as cash flow hedges. At the moment the forecast transactions materialize, the foreign exchange forward contracts
become fair value hedges. As the terms of the foreign currency forward contracts match the terms of the expected highly probable
forecast transactions, there is no hedge ineffectiveness to be recognized in the statement of profit or loss.
As of December 31, 2019, an unrealized loss of € 2.2 million (Australian dollar, British pound, US dollar) have been recognized in
other comprehensive income.
As of December 31, 2019, the fair value of the derivative financial asset for the foreign exchange contracts amounted to € 0.1
million (2018: € 2.0 million) and of the derivative financial liability amounted to € 2.5 million (2018: € 0.2 million).

The following table sets forth the impact on pre-tax profit and equity for the year of a 10% weakening/strengthening of the Euro
against the reported currency with all other variables held constant. The impact is mainly as a result of foreign exchange
gains/losses on translation of foreign currency denominated trade receivables and payables and related derivative positions as at
the respective balance sheet dates.
in € million 10% weakening of the EUR 10% strengthening of the EUR

2019 2018 2019 2018

Impact on Impact on Impact on Impact on
P&L Equity P&L equity
AUD (0.4) (1.4) (1.2) 0.3 1.1 1.0
GBP (0.9) (4.1) (3.3) 0.8 3.4 2.7
PLN (1.6) - - 1.3 - -
USD (5.6) 2.0 2.8 4.6 (1.6) (2.3)

7.5.4. Interest rate risk

The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash
flow interest rate risk which is partially offset by cash held at variable rates. Borrowings issued at fixed rate expose the Group to
fair value interest rate risk. These risks are managed centrally by Group treasury taking into account the expectations of the Group
with respect to the evolutions of the market rates. The Group has used interest rate swaps and cross-currency interest rate swaps
to manage these risks.

Considering that the floating rate borrowings (EURIBOR + margin) are hedged through interest rate swaps, the interest expense
recognized in the consolidated income statement is not subject to interest rate volatility and therefore no sensitivity analysis has
been prepared.

Sensitivity of the fair value of derivative financial instruments related to loans: at December 31, 2019, if EURIBOR interest rates
had been 10bps higher/lower with all other variables held constant, pre-tax other comprehensive income for the year would have
been respectively € 0.3 million higher / € 0.2 million lower. At December 31, 2018, if EURIBOR interest rates had been 10bps
higher/lower with all other variables held constant, pre-tax other comprehensive income for the year would have been respectively
€ 1.1 million higher / € 1.0 million lower.

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Floating Rate Syndicated Term Loan A of € 600 million due 2022 is carrying an interest of EURIBOR 3 month + margin of 1.75%.
Floating Rate Syndicated Term Loan B due 2022 is carrying an interest of EURIBOR 3 month + margin of 1.55%. Floating Rate
Term Loan of € 150 million due 2024 is carrying an interest of EURIBOR 3 month + margin of 1.40%. The notional principal
amounts of the outstanding fixed payer interest rate swap and cross-currency interest rate swap contracts at December 31, 2019
are € 557.0 million as per below table:

Duration Fixed interest rate % Amount in € million

3 Year 0.3890% 85.0
3 Year 0.4950% 50.0
3 Year 0.6250% 75.0
3 Year 0.6290% 75.0
3 Year 0.6220% 75.0
3 Year 5.2574% 33.1
3 Year 5.3870% 4.5
3 Year 5.6561% 9.4
5 Year 0.5950% 150.0
Total 557.0

7.5.5. Price risk (commodity)

The Group has some exposure to the price of oil because certain of the raw materials used in production are manufactured from
oil derivatives. These include glues, polyethylene, propylene and polypropylene.
In relation to our fluff and propylene exposure, the Group has arrangements with certain of their fluff suppliers that reduce our
exposure to volatility in fluff prices. The Group also decided to hedge a portion of the propylene exposure that is not covered by
such arrangements for 2019.
Sensitivity of the fair value of derivative financial instruments related to commodities: at December 31, 2019 if there would be a
shift of the commodity forward curve by 10% increase/decrease with all other variables held constant, pre-tax other
comprehensive income for the year would have been respectively € 1.1 million higher / € 0.5 million lower (2018: impact was €
0.3 million higher/lower).

7.5.6. Equity price risk

Following the issuance of options and RSU’s as share-based payment arrangements under the different LTIP programmes (refer
to note 7.28 for details of these programs), the Group is exposed to variations in the Group share price. The Board of Directors of
the Group has decided on June 1, 2015 to implement a full hedging program through a total return swap. The purpose of this
financial instrument is to effectively hedge the risk that a price increase of the Ontex shares would negatively impact future cash
flows related to the share-based payments.
The Group entered into a total return swap (‘TRS’) agreement with a financial institution to manage its exposure to price volatility
related to the shares subject to the stock option and RSU plans as disclosed in note 7.28. Under the total return swap agreement,
the Company will pay interest to the financial institution. At the settlement of the TRS, the Group will receive the underlying shares
which will be granted to the beneficiaries of the stock options or RSU’s upon exercise. As such, the Group hedges the risk that
the share price would increase when shares have to be issued upon exercise by the beneficiaries of their options/RSUs/PSUs.
The shares bought in this context are recognized in deduction of Group equity at the strike price at the moment of entering into
the TRS. As the Group takes physical delivery of the shares upon settlement of the TRS (no net settlement), the TRS does not
meet the scope of financial instruments in accordance with IAS 32 / IFRS 9. As such, the TRS should not be remeasured at fair
value at each closing date.

As a result, the Group recognized treasury shares for an amount of € 40.3 million (represented by 1,491,654 shares) and a related
financial liability for an amount of € 31.2 million (see note 7.15). These amounts do not require to be remeasured during the
contract time and consequently, all volatility has been eliminated.

7.5.7. Credit risk

Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and
deposits with banks and financial institutions, as well as credit exposures to corporate customers, including outstanding
receivables and committed transactions. The Group assesses the credit quality of the customer, taking into account its financial
position, past experience and other factors based on which individual risk limits are set in accordance with the limits set by
business managers. Historical default rates have been below 1% for 2019 and 2018. Trade receivables are spread over different
countries and counterparties and there is no large concentration with one or a few counterparties.
We refer to note 7.13 for the aging of the receivables and the doubtful receivables.

The maximum exposure to credit risk at the reporting date is the carrying amount as presented in the table above in the note
7.5.1.

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7.5.8. Liquidity risk

Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational
needs while maintaining sufficient headroom on its undrawn committed borrowing facilities (note 7.17 Interest-bearing debts) at
all times so that the Group does not breach borrowing limits or covenants (where applicable) on its borrowing facilities.

The table below analyses the Group’s financial liabilities (including interest payments) into relevant maturity groupings based on
the remaining period at the balance sheet date to the contractual maturity date.

in € million Less than Between 1 Between 2 Over 5 years

1 year and 2 years and 5 years
At December 31, 2019
Interest-bearing debts (43.9) (17.5) (816.1) (0.1)
Lease liabilities (30.9) (25.1) (52.8) (59.3)
Trade payables (465.6) - - -
Total non-derivative financial liabilities (540.5) (42.6) (868.9) (59.5)
Interest rate swaps (4.9) (4.9) (4.6) -
Forward foreign exchange contracts (127.2) - - -
Total derivative financial liabilities (132.1) (4.9) (4.6) -

At December 31, 2018

Interest-bearing debts (103.0) (17.6) (633.3) (152.0)
Trade payables (501.0) - - -
Total non-derivative financial liabilities (604.0) (17.6) (633.3) (152.0)
Interest rate swaps (3.6) (2.9) (6.3) (0.9)
Forward foreign exchange contracts (135.5) - - -
Total derivative financial liabilities (139.0) (2.9) (6.3) (0.9)

7.6. OPERATING SEGMENTS

According to IFRS 8, reportable operating segments are identified based on the “management approach”. This approach stipulates
external segment reporting based on the Group’s internal organizational and management structure and on internal financial
reporting to the chief operating decision maker. The Group’s activities are in one segment, “Hygienic Disposable Products”. There
are no other significant classes of business, either singularly or in aggregate. The chief operating decision maker, the Board of
Directors, reviews the operating results and operating plans, and make resource allocation decisions on a company-wide basis.
Therefore, the Group operates as one segment. Enterprise-wide disclosures about product sales, geographic areas and revenue
from major customers are presented below:

7.6.1. Information by Division

We have revamped our organization in order to better seize opportunities arising from our geographic expansion with the
establishment of new growth platforms in the Americas and sub-Saharan Africa, improve execution and bolster focus on our
competitive differentiators. The Company’s commercial activities are now organized in three Divisions:

 Europe, which is predominantly focused on retail brands

 Americas, Middle East, Africa and Asia (AMEAA), which is predominantly focused on local brands

 Healthcare, which continues to focus on the institutional markets and dedicated incontinence brands

in € million Full Year

2019 2018
Europe 956.9 1,020.7
AMEAA 891.9 835.8
Healthcare 432.5 435.6
Total revenue 2,281.3 2,292.2

The 2018 figures have been restated to reflect the change in divisional structure.

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7.6.2. Information by product group

The key product categories are:

 Babycare products, principally baby diapers, baby pants and, to a lesser extent, wet wipes;
 Feminine care products, such as sanitary towels, panty liners and tampons;

 Adult incontinence products, such as adult pants, adult diapers, incontinence towels and bed protection.

in € million Full Year

2019 2018
Babycare 1,345.7 1,345.1
Adult Incontinence 692.0 693.6
Femcare 212.7 222.8
Other 30.9 30.6
Total revenue 2,281.3 2,292.2

7.6.3. Information by geographic area

The organizational structure of the Group and its system of internal information indicates that the main source of geographical
risks results from the location of its customers (destination of its sales) and not the physical location of its assets (origin of its
sales). The location of Group’s customers is accordingly the geographical segmentation criterion and is defined as below:

 Western Europe

 Eastern Europe
 Americas
 Rest of the World

in € million Full Year

2019 2018
Western Europe 1,027.5 1,075.2
Eastern Europe 276.6 292.9
Americas 667.8 620.2
ROW 309.3 303.8
Total revenue 2,281.3 2,292.2

The sales in the country of domicile of Ontex Group NV (Belgium) represent less than 3% of Ontex Group NV Revenue. Sales to
countries in our top four markets are presented in the table below. The sales in all other individual countries represent less than
10% of the Group’s revenue.

in € million Full Year

2019 2018
Mexico 304.1 282.1
United Kingdom 242.1 237.9
Italy 194.6 203.9
France 188.5 209.7
Other countries 1,352.0 1,358.6
Total revenue 2,281.3 2,292.2

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The following table presents an overview of the non-current assets (property, plant and equipment (PP&E), right to use assets
and intangible assets) located in the main countries. The non-current assets in all other individual countries represent less than
10% of the Group’s total non-current assets (excluding financial instruments, deferred tax assets and goodwill). Goodwill is not
included in the below table as this not monitored on a country-basis, but at the divisional level.

in € million December 31, 2019 December 31, 2018

Mexico 152.8 138.5
Belgium 156.8 132.7
Germany 105.3 65.0
Brazil 96.0 97.9
Other countries 314.3 217.6
Total 825.1 651.7

7.6.4. Revenue from major customers

The Group does not have a single significant customer. In 2019 the largest customer represents 6.2% (2018: 6.2%) of the revenue.
The 10 largest customers represent 33.3% of 2019 revenue (2018: 35.2%).

7.7. LIST OF CONSOLIDATED COMPANIES

Percentage of
interest held by
the group
Company legal
Name Country 2019 2018 Registered office number
Haouch Sbaat Nord, Zone
Industrielle de Rouiba, Voie H,
Can Hygiene SPA Algeria 100.0% 100.0% 04/B/0965101
lot 83B, 16012 Rouiba, Alger,
Algeria
Suite 10, 27 Mayneview Street, ABN 59 130 076
Ontex Australia Pty Ltd Australia 100.0% 100.0%
Milton, QLD 4064, Australia 283
Ontex Manufacturing Pty Ltd
Wonderland Drive 5, Eastern ABN 16 145 822
(former Ontex Australia Pty Australia 100.0% 100.0%
Creek, NSW, 2766, Australia 528
Ltd)
Korte Moeie 53, 9900 Eeklo,
Eutima bvba Belgium 100.0% 100.0% 0415.412.891
Belgium
Genthof 12, 9255 Buggenhout,
Ontema bvba Belgium 100.0% 100.0% 0453.081.852
Belgium
Genthof 5, 9255 Buggenhout,
Ontex bvba Belgium 100.0% 100.0% 0419.457.296
Belgium
Rua Contorno Oeste 1/16 CNPJ
Active Industria De
Brazil 100.0% 100.0% Quadra 01, Lote 01/16, Modulo 2 22.010816/0001-
Cosméticos S.A.
Senador Canedo, Goiania, Brazil 39
Falcon Distribuidora Rua Iza Costa 1.104 Quadra: CNPJ
Armazenamento E Brazil 100.0% 100.0% Area Lote Modulo 2, Fazenda 23.191.831/0001-
Transporte S.A. Retio, Goiania, Brazil 93
Calle la Concepcion 81, D 603 P
06, Providencia, Santiagà,
Chicolastic Chile, S.A. Chile 100.0% 100.0% 96886530-7
Region Metropolitan,8320000
Santiago de Chile, Chile
Hangji industrial park, Hanjiang
Ontex Hygienic Disposables
China 100.0% 100.0% Dictrict, N°1 Zhaizhuang Road, 321000400010102
(Yangzhou) Co.TD
225111 Yangzhou, China
100 norte del Centro Comercial
Tres Rios a mano izquierda-
Valor Brands Centroamerica, Costa
100.0% 100.0% Apartamento Tinoco #02, City 3-101-645685
S.A. Rica
Cartago, 10106 San José, Costa
Rica
Czech Vesecko 491, 51101 Turnov,
Ontex CZ Sro 100.0% 100.0% 44564422
Republic Czech Republic
Tracon Tower Building Addis
Ontex Hygienic Disposables Ababa, Subcity Arada, Werada EIA-
Ethiopia 100.0% 100.0%
PLC 02, Kebele 01, House n° : 30/97, PC/01/005318/08
Ethiopia
30 Rue Hubble Parc Européen
Hygiëne Medica SAS France 100.0% 100.0% de la Haute Borne, 59262 401 439 872
Sainghin-en-Mélantois, France

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Percentage of
interest held by
the group
Company legal
Name Country 2019 2018 Registered office number
586 Boulevard Albert Camus,
Ontex France SAS France 100.0% 100.0% 338 081 102
69400 Villefranche-sur-Saône
Quai du rivage 62119 Dourges,
Ontex Santé France SAS France 100.0% 100.0% 502 601 297
France
Robert-Bosch-Straße 8, 56727
Moltex Baby-Hygiene GmbH Germany 100.0% 100.0% HRB 5260
Mayen, Germany
Ontex
Robert-Bosch-Straße 8, 56727
Beteiligungsgesellschaft Germany 0.0% 100.0% HRB 15558
Mayen, Germany
mbH (*)
Robert-Bosch-Straße 8, 56727
Ontex Engineering GmbH Germany 100.0% 100.0% HRA 21335
Mayen, Germany
Ontex Healthcare Hansaring 6, Lotte 49504,
Germany 100.0% 100.0% HRB 9669
Deutschland GmbH Germany
Ontex Hygiënartikel Fabrikstrasse 30, 02692
Germany 100.0% 100.0% HRB 3865
Deutschland GmbH Grosspostwitz, Germany
Ontex Inko Deutschland Robert-Bosch-Straße 8, 56727
Germany 100.0% 100.0% HRB 20630
GmbH Mayen, Germany
Robert-Bosch-Straße 8, 56727
Ontex Inko-Shop GmbH Germany 100.0% 100.0% HRB 21024
Mayen, Germany
Robert-Bosch-Straße 8, 56727
Ontex Mayen GmbH Germany 100.0% 100.0% HRB 11699
Mayen, Germany
Ontex Vertrieb Gmbh & Co. Robert-Bosch-Straße 8, 56727
Germany 100.0% 100.0% HRB 4983
KG Mayen, Germany
Robert-Bosch-Straße 8, 56727
WS Windel-Shop GmbH Germany 100.0% 100.0% HRB 2793
Mayen, Germany
Via Oberdan 140, 25128
Ontex Italia Srl Italy 100.0% 100.0% BS-347522
Brescia, Italy
Localita Cucullo, Zona
Ontex Manufacturing Italy
Italy 100.0% 100.0% Industriale, 66026 Ortona 02456370697
S.r.l.
(Chieti), Italy
Localita Cucullo, Zona
Serenity Holdco S.r.l. Italy 100.0% 100.0% Industriale, 66026 Ortona CH-178769
(Chieti), Italy
Localita Cucullo, Zona
Serenity Spa Italy 100.0% 100.0% Industriale, 66026 Ortona CH-99632
(Chieti), Italy
Almaty, Bostandyk district, Al-
Farabi Avenue 5, Business
Ontex Central Asia LLP Kazakstan 100.0% 100.0% 600400642455
Center Nurly Tau, Blok 1A, Suite
502, Kazakstan
Comercializadora Av San Pablo, Xochimehuacan
Interncional de comercio Mexico 100.0% 100.0% 7213, Colinia La Loma, Puebla CIPQ210141Z8
Mabe, S.A de C.V Mexico CP 72230
Retorno 2 Esteban De Antunano
Compania Interoceanica de
no.8, Col. Parque Industrial CD.
productos Higionicos, S.A de Mexico 100.0% 100.0% IPH060317DPA
Textil De Puebla, 74160 Puebla,
C.V
Mexico
Corporativo de Av San Pablo, Xochimehuacan
administracion con calidad, Mexico 100.0% 100.0% 7213, Colinia La Loma, Puebla CAC920612HE9
S.A de C.V Mexico CP 72230
Ibsen N40 4to piso, col. Polanco
Grupe P.I Mabe, S.A de C.V Mexico 100.0% 100.0% Delegacion Miguel Hidalgo CP GPI950824N64
11560 Mexico
Calle 27 Norte 7402, Zona
Inmobiliaria Kiko S.A de C.V Mexico 100.0% 100.0% Industrial Anexa a la loma, IKI811207FG8
Puebla Mexico CP 72230
Av San Pablo, Xochimehuacan
P.I Mabe International, S de
Mexico 100.0% 100.0% 7213, Colinia La Loma, Puebla PIM021028HL6
R.L de C.V
Mexico CP 72230
Productos Internacionales Calle Norte 12, Ciudad Industrial
Mexico 100.0% 100.0% PIM810710R32
Mabe, S.A de C.V 105,22505 Tijuana, Mexico
Av San Pablo, Xochimehuacan
Promotora Internacional de
Mexico 100.0% 100.0% 7213, Colinia La Loma, Puebla PIC001031K61
comercio Mabe, S.A de C.V
Mexico CP 72230
Calle 27 Norte 7402, Zona
Servicios Administrativos E.
Mexico 100.0% 100.0% Industrial Anexa a la loma, SAI880817KP4
inmobiliaria Gima S.C
Puebla Mexico CP 72230

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CONTEXT ENGAGEMENT

Percentage of
interest held by
the group
Company legal
Name Country 2019 2018 Registered office number
Av San Pablo, Xochimehuacan
Transportes P.I Mabe, S.A
Mexico 100.0% 100.0% 7213, Colinia La Loma, Puebla TPM960709QS1
de C.V
Mexico CP 72230
Quartier Al Hank Boulevard De
La Corniche, 6ième étage,
Ontex Hygiene Sarlau Morocco 100.0% 100.0% 240709
immeuble Yacht A/B Anfa -
Casablanca, Morocco
Office No 705, 7th Floor, Park
Ontex Pakistan ltd Pakistan 100.0% 100.0% Avenue, Main Sharh-e-Faisal, 0076658
Karachi Sindh 7400, Pakistan
ul. Przedsiebiorcrow 6, 97-500
Ontex Polska sp. z.o.o. Poland 100.0% 100.0% 0000010044
Radomsko, Poland
Bucharest, 46 Grigore
Ontex Romania Srl Romania 100.0% 100.0% Cobalcescu Street, 2nd floor, 1st R 7682053
District
Zemlyanoy Val Street 9, 10564
Ontex RU LLC Russia 100.0% 100.0% 1055008702649
Moscow, Russia
Poligono Industrial Nicomedes
Garcia, C/Fresno s/n, sector C,
Ontex ES Holdco SL Spain 100.0% 100.0% B85082832
40140 Valverde del Majano,
Segovia, Spain
Poligono Industrial Nicomedes
Garcia, C/Fresno s/n, sector C,
Ontex ID SAU Spain 100.0% 100.0% NIFA-60617875
40140 Valverde del Majano,
Segovia, Spain
Poligono Industrial Nicomedes
Garcia, C/Fresno s/n, sector C,
Ontex Peninsular SAU Spain 100.0% 100.0% A40103855
40140 Valverde del Majano,
Segovia, Spain
Torviscal 12, 45007 Toledo,
Valor Brands Europe, S.L Spain 100.0% 100.0% B2837-1540
Spain
Poligono Industrial Nicomedes
Garcia, C/Fresno s/n, sector C,
Ontex Hygienic Spain, S.L. Spain 100.0% 100.0% M635-328
40140 Valverde del Majano,
Segovia, Spain
Tekstilkent Cad. Koza Plaza B
Ontex Tuketim. Urn. San. ve
Turkey 100.0% 100.0% Blok Kat:31 No:116-117 Esenler, 137334
Tic. AS
Istanbul
Building 7(C), 13 M. Pymonenko
Ontex Ukraine LLC Ukraine 100.0% 100.0% 37728333
Street, 04050 Kyiv, Ukraine,
Kettering Parkway, Kettering
United Venture Park, Kettering,
Ontex Health Care UK Ltd. 100.0% 100.0% 02274216
Kingdom Northants, NN156XR, United
Kingdom
Unit 5 (1st Floor), Grovelands
Business Centre, Boundary
United
Ontex Retail UK Ltd. 100.0% 100.0% Way, Hemel Hempstead, 1613466
Kingdom
Hertfordshire, HP2 7TE, United
Kingdom
1201 North Market Street, 19801
Wilmington, New Castle county,
Ontex US Holdco, LLC USA 100.0% 100.0% N/A
Delaware, United States of
America
960 North Point Parkway, Suite
Valor Brands, LLC USA 100.0% 100.0% 06-1661367
100, Alpharetta, GA 30005, USA
(*) Merged in the course of 2019 with Ontex Vertrieb Gmbh & Co. KG

The voting rights equal the percentage of interest held.

The most significant Group subsidiaries are Ontex bvba, Ontex Mayen GmbH, Ontex CZ Sro, Ontex Tuketim AS, Serenity Spa,
Ontex Manufacturing Italy S.r.l., Productos Internacionales Mabe, Active Industria De Cosméticos S.A. and Falcon Distribuidora
Armazenamento E Transporte S.A.

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7.8. BUSINESS COMBINATIONS

7.8.1. Acquisitions
No business combinations have occurred during 2019 nor 2018.

7.8.2. Reconciliation with cash flow statement

The consolidated cash flow statement presents the following relating to the acquisition of subsidiaries within the investing activities:

in € million Full year

2019 2018
Contingent consideration paid for the acquisition of Grupo Mabe - (16.5)
Payment for acquisition of subsidiary, net of cash acquired - (16.5)

7.9. GOODWILL AND INTANGIBLE ASSETS

in € million
IT
Capitalized implementation Other
Goodwill Brands Development costs intangibles Total
Period ended December 31, 2019
Opening carrying amount 1,165.2 31.6 0.2 18.4 1.6 1,217.0
Reclass IFRS 16 to Right-of-use
- - - (1.7) - (1.7)
assets (note 11)
Restated opening carrying
1,165.2 31.6 0.2 16.7 1.6 1,215.3
amount
Additions - - 0.7 7.4 1.6 9.8
Transfers - - 0.7 0.4 (0.8) 0.3
Amortization expense - (1.9) (0.1) (7.1) - (9.2)
Exchange differences 6.0 1.0 - - - 7.0
Closing carrying amount 1,171.2 30.7 1.4 17.5 2.5 1,223.2
At December 31, 2019
Cost or valuation 1,171.1 36.9 1.5 46.8 16.5 1,273.0
Accumulated amortization and
(6.3) (0.1) (29.3) (14.1) (49.8)
impairment -
Carrying amount 1,171.2 30.7 1.4 17.5 2.5 1,223.2

in € million IT
Capitalized implementation Other
Goodwill Brands Development costs intangibles Total
Period ended December 31, 2018
Opening carrying amount 1,163.6 34.0 0.1 16.3 0.1 1,214.1
Additions - - 0.1 8.9 1.5 10.5
Transfers - - - 0.5 - 0.5
Amortization expense - (1.9) - (7.0) - (8.9)
Exchange differences (2.0) (0.5) - (0.3) - (2.8)
Acquired through business
3.6 - - - - 3.6
combination
Closing carrying amount 1,165.2 31.6 0.2 18.4 1.6 1,217.0
At December 31, 2018
Cost or valuation 1,165.2 35.9 0.2 43.6 15.6 1,260.5
Accumulated amortization and
- (4.3) - (25.2) (14.0) (43.5)
impairment
Carrying amount 1,165.2 31.6 0.2 18.4 1.6 1,217.0

Capitalized IT implementation costs represent internally developed and externally purchased software for own use.
Brands represent the capitalization of some of the brands acquired through the acquisitions of Grupo Mabe and Ontex Brazil.

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The amortization expense is included in the captions of the consolidated income statement as follows:

in € million 2019 2018

Cost of sales 0.1 1.0
Distribution expenses 1.2 0.6
Sales and marketing expenses 1.8 1.9
General and administrative expenses 6.1 5.4
Total amortization expense 9.2 8.9

The Group incurred € 8.9 million of research and development expenses in 2019 (2018: € 6.3 million) that has been recorded
under the caption ‘General and administrative expenses’.
No intangible assets have been pledged in the context of financial liabilities.

Goodwill impairment
As a result of the organizational restructuring, the Group has revisited its cash-generating units used for impairment testing. As
such, the Group identifies the following cash-generating units as from January 1st, 2019:
 Europe (previously Mature Market Retail, plus Russia and Ukraine)

 Healthcare

 MEAA (Middle East, Africa and Asia; previously MENA, plus previous Growth Markets excluding Russia and Ukraine)
 Americas (previously Americas Retail)

Annual impairment reviews are performed as at December 31 for all CGUs. These reviews compare the carrying value of each
CGU with the recoverable amount of the CGU’s assets calculated using a discounted cash flow model. If the recoverable amount
is less than the carrying value of the CGU, an impairment loss is recognized immediately in the income statement.

The judgments and estimates considered in the context of the impairment tests are disclosed in note 7.4.3.

Goodwill allocated to the CGUs as at December 31 was as follows:

in € million 2019 2018

Europe 757.7 757.7
Healthcare 60.4 60.4
MEAA 38.1 42.0
Americas 315.0 305.1
Goodwill allocated to the CGU's 1,171.2 1,165.2

The recoverable amount of a CGU is determined by means of value-in-use calculations. These calculations are based on pre-tax
cash flow projections (prepared in euros) using key parameters from the consolidated financial budget approved by Ontex’ Board
of Directors and the Group’s Strategic Plan through 2021. Cash flows beyond the three-year period are extrapolated using an
estimated growth rate of 1.0% for Europe, 2.0% for Healthcare, 3.0% for MEAA and 3.6% for Americas. The growth rate does not
exceed the current market expectations in which the four CGUs are currently operating.
The key assumptions for the value-in-use calculations used to determine the recoverable amount are those regarding the discount
rates, estimated changes to selling prices, product offerings, direct costs, operating margins and terminal growth rates.

The discount rate is a measure based on industry average weighted cost of capital and risk-free rates weighted for the different
regions in which the CGU’s are operating.

Changes in selling practices and direct costs are based on past practices and expectations of future changes in the market. The
calculation uses cash flow projections based on key parameters from the consolidated financial budget approved by the Board of
Directors, the Group’s Strategic Plan through 2021, and pre-tax discount rates for each CGU as described in note 7.4.3 Impairment
based on current market assessments of the time value of money and the risks specific to the Group.

The development of the financial budget and Strategic Plan relies on a number of assumptions, including:
 The market growth, the evolution of the Group’s market share, competitive landscape and innovation trends in the different
markets as well as strategic initiatives.

 The product mix.

 The expected evolution of various direct and indirect expenses.

 The estimated future capital expenditure.

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The assumptions were derived mainly from:

 Available historic data.

 External market research.

 Internal market expectations based on trend reports, etc.

The key assumptions used are reviewed and updated on a yearly basis by the Group’s management. Taking into account the
considerable excess of the cash generating unit’s recoverable amount over its carrying amount, and based on sensitivity testing
performed, management is of the opinion that any reasonably possible changes in key assumptions on which the recoverable
amount is based would not cause the carrying amount to exceed the recoverable amount at December 31, 2019.

The Group has performed a sensitivity analysis by reducing the risk-adjusted cash flow projections and by increasing the pre-tax
discount rate as disclosed in note 7.4.3 Impairment.

7.10. PROPERTY, PLANT AND EQUIPMENT

in € million Plant, Assets under

Land, land machinery Furnitur Other construction
improvements and e and tangible and advance
and buildings equipment vehicles assets payments Total
Period ended December 31, 2019
Opening carrying amount 144.3 361.9 1.7 8.2 83.8 599.9
Reclass IFRS 16 to Right-of-use
- - - (6.5) - (6.5)
assets (note 11)
Restated opening carrying
144.3 361.9 1.7 1.7 83.8 593.4
amount
Additions 2.1 27.9 0.3 0.1 55.4 85.8
Transfers 1.5 69.4 0.2 - (75.3) (4.1)
Disposals - (1.1) (0.1) - (0.1) (1.3)
Depreciation expense (6.1) (42.8) (0.4) (0.3) - (49.7)
Impairment losses (2.4) (3.5) - - (0.1) (5.9)
Exchange differences 1.8 4.9 - (0.1) 0.5 7.0
Transfer to assets held for sale (4.0) 1.6 - - - (2.4)
Closing carrying amount 137.0 418.3 1.8 1.3 64.2 622.7
At December 31, 2019
Cost 177.5 669.8 3.8 4.2 64.2 919.6
Accumulated depreciation and
(40.5) (251.5) (2.1) (2.8) - (296.9)
impairment
Carrying amount 137.0 418.3 1.8 1.3 64.2 622.7

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in € million Plant, Assets under

Land, land machinery Furniture Other construction
improvements and and tangible and advance
and buildings equipment vehicles assets payments Total
Year ended December 31, 2018
Opening carrying amount 151.1 326.0 1.7 9.9 89.7 578.3
Additions 2.1 34.6 0.3 0.2 59.0 96.2
Transfers 5.0 59.8 0.2 (0.6) (64.9) (0.5)
Disposals (1.4) (5.8) - - - (7.2)
Depreciation expense (6.1) (40.5) (0.4) (1.0) - (48.0)
Impairment losses (1.6) (0.7) - - - (2.3)
Exchange differences (2.8) (7.5) (0.1) (0.3) - (10.6)
Transfer to assets held for sale (2.0) (2.0) - - - (4.0)
Acquired through business
- (2.0) - - - (2.0)
combination
Closing carrying amount 144.3 361.9 1.7 8.2 83.8 599.9
At December 31, 2018
Cost 182.1 573.8 3.4 17.7 83.8 860.8
Accumulated depreciation and
(37.8) (211.9) (1.7) (9.5) - (260.9)
impairment
Carrying amount 144.3 361.9 1.7 8.2 83.8 599.9
The additions to property, plant and equipment represent mainly investments in capacity extension, investments in innovation,
investments to improve the efficiency and IT investments and include investments related to the Transform to Grow programme.

Impairment losses are mainly recognized in the context of the closure of the manufacturing operation in Aparecida de Goiânia,
which was started in May 2018 and continued in 2019.
The transfer to non-current assets held for sale relates to the building in Brazil.

The depreciation expense is included in the consolidated income statement as follows:

in € million 2019 2018

Cost of Sales 43.4 42.2
Distribution expenses 3.0 2.0
Sales and marketing expenses 0.7 0.7
General administrative expenses 2.5 2.8
Other operating income 0.2 0.3
Total depreciation expense 49.8 48.0

No pledges have been set on the items of property, plant and equipment.

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7.11. LEASES

in € million Plant, Furniture

Land and machinery and and Other
buildings equipment vehicles assets Total
Period ended December 31, 2019
Opening carrying amount - - - - -
Reclass from intangible assets & PPE 1.7 5.7 - 0.8 8.2
Initial recognition IFRS 16 123.6 12.3 12.3 - 148.3
Restated Opening carrying amount 125.3 18.0 12.3 0.8 156.5
Additions 17.0 0.4 5.4 - 22.9
Transfers (0.2) 4.9 - (0.8) 4.0
Depreciation expense (18.9) (3.8) (6.0) - (28.6)
Impairment - (1.0) - - (1.0)
Modifications to lease liabilities (5.3) (1.2) (0.1) - (6.6)
Exchange differences 2.9 0.4 0.1 - 3.3
Closing carrying amount 120.9 17.7 11.8 - 150.4
At December 31, 2019
Cost 142.7 25.0 17.8 - 185.4
Accumulated depreciation and impairment (21.8) (7.3) (5.9) - (35.0)
Carrying amount 120.9 17.7 11.8 - 150.4

In the previous year, the Group only recognized leased assets relating to leases that were classified as ‘finance leases’ under IAS
17 Leases. These assets were presented in property, plant and equipment and have been reclassed to the right-of-use assets in
the opening carrying amount upon initial adoption of IFRS 16. Furthermore, also favorable leases recognized as intangible assets
have been reclassed to right-of-use assets in the opening carrying amount.
The consolidated income statement presents the following amounts relating to leases:

in € million 2019
Cost of Sales 10.1
Distribution expenses 11.6
Sales and marketing expenses 2.3
General administrative expenses 4.7
Total depreciation expense 28.6
Interest expense 6.9
Expense relating to short-term leases 10.5
Expense relating to leases of low-value assets 3.2
Expense relating to variable lease payments 4.3

The Group leases mainly plants and warehouses (lease terms between 3 and 25 years), machinery (lease terms of 5 years on
average) and company cars (lease terms between 4 and 5 years).
For the lease of land and buildings, the Group is exposed to potential future increases in variable lease payments based on an
index, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index
or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Extension and termination options are included in a number of property and equipment leases across the Group. These are used
to maximize operational flexibility in terms of managing the assets used in the group’s operations. As at December 31, 2019,
potential future cash outflows of € 21.4 million (undiscounted) have not been included in the lease liability because it is not
reasonably certain that the leases will be extended (or not terminated).

The lease liabilities are detailed in note 7.17.

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7.12. INVENTORIES
Inventories can be split as follows:

in € million December 31, 2019 December 31, 2018

Raw materials 147.8 169.3
Work in progress 1.0 1.1
Finished goods 181.4 204.2
Other 5.1 6.9
Write-down on inventories (16.6) (15.6)
Inventories 318.8 365.9

The Group mainly uses fluff, super-absorbers and non-woven fabrics. Other raw materials used by the Group for its production
include polyethylene, adhesives and tapes as basic raw materials. The finished products are baby diapers, baby pants, towels,
tampons, panty liners, incontinence products and trade goods.

The cost of inventories recognized as an expense and included under ‘Cost of sales’ amounted to € 1,661.3 million in 2019 (€
1,666.5 million in 2018).

7.13. TRADE RECEIVABLES, PREPAID EXPENSES AND OTHER RECEIVABLES

The non-current other receivables include mainly non-current recoverable VAT.
The current trade and other receivables are detailed below:

in € million December 31, 2019 December 31, 2018

Trade receivables 331.5 362.2
Less: allowance for impairment of trade receivables (7.3) (6.8)
Trade receivables - net 324.2 355.4
Prepayments 7.7 14.1
Other amounts receivable 41.4 55.0
Prepaid expenses and other receivables 49.1 69.1
Trade and other receivables - Current 373.3 424.5

Other amounts receivable include recoverable VAT for an amount of € 34.3 million for 2019 (2018: € 46.4 million). The fair value
of the current receivables approximates their carrying amounts.

The aging of the trade receivables (net) at December 31 is as follows:

in € million December 31, 2019 December 31, 2018

Not due 284.7 304.6
0 to 30 days 20.5 24.8
31 to 60 days 5.7 4.8
61 to 90 days 4.0 6.6
Over 90 days 9.3 14.6
Total 324.2 355.4

The Group doesn’t apply systematically external credit rating. An impairment analysis of trade receivables is done based on
expected losses, next to individual assessments, but there are no significant impairments.

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The carrying amount of the Group’s trade receivables (net) are denominated in the following currencies:

in € million December 31, 2019 December 31, 2018

EUR 92.9 101.9
BRL 42.1 53.2
PLN 42.7 45.7
MXN 44.0 50.0
USD 21.0 26.6
RUB 13.1 12.2
TRY 10.6 15.4
GBP 19.7 15.3
AUD 8.2 10.3
Other 29.9 24.8
Total 324.2 355.4

During the year, the payment terms for the receivables have neither deteriorated nor been renegotiated. The maximum credit risk
exposure at the end of the reporting period is the carrying value of each caption of receivables mentioned above. The Group does
not hold any collateral as security.

Movements on the Group allowance for impairment of trade receivables are as follows:

in € million December 31, 2019 December 31, 2018

Opening Balance 6.8 5.5
Allowance for receivable impairment 1.4 2.4
Receivables written off during the year as uncollectible (0.9) (0.4)
Unused amounts reversed (0.1) (0.5)
Foreign exchange differences 0.1 (0.2)
At December 31 7.3 6.8

The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract
assets have been grouped based on shared credit risk characteristics and the days past due.

The creation and the release of the allowance for impaired receivables have been included in ‘Sales and marketing expense’ in
the income statement.
The Group has entered into a Group non-recourse syndicate factoring agreement with BNP Paribas Fortis Factor and KBC
Commercial Finance. The Agreement provides us with a maximum credit facility of up to € 200 million and up to 95% of the amount
of the approved outstanding receivables on all debtors that we transfer to the Factor. The remaining 5% of the relevant receivables
is paid by the Factor to us upon receipt of payment from the relevant debtor, upon which also the remaining balance of the
receivable is derecognized. Financing per debtor is capped at 10% of the aggregate amount of all approved outstanding
receivables transferred to the Factor. Any financing within the credit limit is non-recourse to us. This factoring agreement is an off-
balance sheet arrangement.

Next to the above-mentioned Group factoring agreement, Serenity (Italian subsidiary) entered into a bilateral factoring agreements
with Ifitalia and Banca Sistema. Furthermore, also Ontex Russia has entered into a bilateral factoring agreement with Rosbank
and Ontex Brazil has entered into a bilateral factoring agreements with Banco Safra and Banco Industrial. All these agreements
are non-recourse agreements.

As at December 31, 2019, € 149.1 million of financing was obtained through the factoring programs (€ 163.2 million in 2018), this
is in addition to € 12.3 million of financing was obtained through the use of supply chain financing programs offered by our
customers. The late payment risk related to the factoring has been assessed as immaterial at closing 2019 and 2018.

In accordance with IFRS 9 Financial instruments, all non-recourse trade receivables, included in these factoring programs, are
derecognized for the non-continuing involvement part.

7.14. CASH AND CASH EQUIVALENTS

The net cash position as presented in the consolidated statement of cash flows is as follows:

in € million December 31, 2019 December 31, 2018

Short-term bank deposits (no longer than 3 months) 55.8 46.3
Cash at bank and on hand 72.1 84.3
Total 127.8 130.6

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The carrying amount of the cash and cash equivalents is a reasonable approximation of their fair value.

The credit quality of the banks and financial institutions the Group is working with is mentioned in the following table:

in € million December 31, 2019 December 31, 2018

AA 2.4 26.5
A 91.6 75.7
BBB 3.5 3.7
BB 11.0 19.5
B 11.7 -
C - 1.3
No credit rating 7.7 3.9
Total 127.8 130.6

7.15. SHARE CAPITAL

The capital of € 1,208.0 million is represented by 82,347,218 shares, of which 1,491,654 treasury shares (2018: 1,559,874 treasury
shares). As such, the ordinary shares held by third parties amount to 80,855,564 shares (2018: 80,787,344).

The issued capital is fully paid and consists of ordinary shares without par value.

7.16. EARNINGS PER SHARE

In accordance with IAS 33, the basic earnings per share amounts are calculated by dividing net profit for the year attributable to
ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. The number
of shares used for 2019 was 80,804,164, which is the weighted average number of shares for 2019 (2018: 81,020,929 shares).

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent
(after adjusting for the effects of all dilutive potential ordinary shares) by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.

In case of Ontex Group NV, no effects of dilution affect the net profit attributable to ordinary equity holders. The table below reflects
the income and share data used in the basic and diluted earnings per share computations:
in € million Full Year
2019 2018
Basic earnings
Profit from continuing operations attributable to owners of the parent 37.3 97.0
Adjustment dilution - -
Profit from continuing operations attributable to owners of the parent, after dilution effect 37.3 97.0

Adjusted Basic Earnings

Profit from continuing operations attributable to owners of the parent 37.3 97.0
Non-recurring income and expenses 70.3 24.3
Tax correction (21.2) (11.6)
Adjusted Basic Earnings 86.4 109.7
Adjustment dilution -
Adjusted Earnings, after dilution effect 86.4 109.7

Number of shares Full Year

2019 2018
Weighted average number of ordinary shares outstanding during the period 80,804,164 81,020,929
Dilution 133,028 94,940

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Earnings per share (€) Full Year

2019 2018
Basic earnings per share 0.46 1.20
Diluted earnings per share 0.46 1.20
Adjusted basic earnings per share 1.07 1.35
Adjusted diluted earnings per share 1.07 1.35

A weighted average number of 831,989 options were not included in the denominator of the diluted earnings per share as they
were out-of-the-money at year-end 2019 (2018: 393,672 options).

7.17. INTEREST-BEARING DEBTS

in € million December 31, 2019 December 31, 2018

Non-current
Borrowings:
Syndicated Term Loan A > 1 year 591.0 587.8
Term Loan > 1 year 150.0 150.0
Total return swap - 33.0
Lease and other liabilities 178.5 15.8
Lease liabilities 120.3 -
Other financial liabilities 58.2 15.8
Interest-bearing debts non-current 919.5 786.6

Current
Borrowings:
Senior revolving Facility B - 82.4
Interests:
Other borrowings 1.3 1.2
Total return swap 31.2 -
Lease and other liabilities 37.1 20.4
Lease liabilities 24.2 3.1
Other financial liabilities 12.9 17.3
Interest-bearing debts current 69.7 104.0

Total interest-bearing debts 989.2 890.6

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Reconciliation to statement of cash flows:

December 31, Restatement

2019 Opening opening Non-cash movements Closing
carrying balance Cash Exchange carrying
in € million amount IFRS 16 flows Acquisition differences Reclasses Other amount
Non-current
interest-bearing
debts
Borrowings 770.8 - (1.8) - - (31.2) 3.2 741.0
Lease and other
15.8 148.0 17.8 22.9 2.1 (23.8) (4.3) 178.5
liabilities
Current interest-
bearing debts
Borrowings 83.6 - (82.4) - (0.1) 31.2 (0.1) 32.4
Lease and other
20.4 - (7.2) - 1.0 23.8 (0.6) 37.1
liabilities
Total liabilities
from financing 890.6 148.0 (73.6) 22.9 3.0 - (1.9) 989.1
activities
Presented in the
statement of cash
flows (financing
activities) as
follows:
Proceeds from
48.8
borrowings
Repayment of
(122.3)
borrowings

December 31,
2018 Opening Non-cash movements Closing
carrying Cash Exchange carrying
in € million amount flows Acquisition differences Reclasses Other amount
Non-current
interest-bearing
debts
Borrowings 760.3 (4.7) - - - 15.2 770.8
Financial lease
11.7 4.0 - 0.6 (0.5) - 15.8
and other liabilities
Current interest-
bearing debts
Borrowings 31.0 52.4 - - - 0.3 83.7
Financial lease
38.9 (18.5) - (0.6) 0.5 - 20.3
and other liabilities
Total liabilities
from financing 841.9 33.2 - - - 15.5 890.6
activities
Presented in the
statement of cash
flows (financing
activities) as
follows:
Proceeds from
58.6
borrowings
Repayment of
(25.4)
borrowings

All borrowings are denominated in € as of December 31, 2019, except for one borrowing in MXN (€ 15.3 million) (2018: all in €).

On September 26, 2017, the Group entered into a syndicate credit facilities agreement (Syndicated Term Loan A) in an amount
of € 600.0 million, and a revolving credit facility (Senior Revolving Facility B) in an amount of up to € 300.0 million. The Syndicated
Term Loan A of € 600 million due 2022 is carrying an interest rate of EURIBOR 3 months + margin of 1.75%. The Senior Revolving
Facility B due 2022 is carrying an interest rate of EURIBOR 3 months + margin of 1.55%, but was not used at closing 2019.

Furthermore, the Group has also closed a Term Loan of € 150 million due 2024, carrying an interest rate of EURIBOR 3 months
+ margin of 1.40%. This agreement also includes an accordion option of € 100 million, carrying an interest rate of EURIBOR
3 months + margin of 1.40%.
As of December 31, 2019, € 300.0 million of the Senior Revolving Facility is undrawn (2018: € 217.6 million).
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On July 29, 2015, a full hedging program (total return swap) for the share-based payment arrangements (LTIP) was implemented.
For more information we refer to note 7.5.6 and 7.28.
This program was renewed in 2019. Total return swap decreased to an amount of 31.2 million (2018: € 33.0 million).

7.17.1. Collateral for borrowings

The Group is subject to regular information covenants, and certain financial ratios are monitored.

No assets have been pledged in the context of the syndicated term loans. However, certain subsidiaries act as guarantors for
these loans.

7.17.2. Other information

 Following lines of credit have been granted to Productos Internacionales Mabe, S.A de C.V:

o USD 25.0 million from HSBC, of which nothing has been used;

o USD 6.0 million from Banamex, of which nothing has been used;
o MXN 156.5 million from Banregio, of which MXN 36.5 million has been used.

 Following lines of credit have been granted to Ontex Tuketim A.S.:

o TRY 24.1 million and USD 1.6 million from Isbank Turkey. Over this line of credit in USD, 0.2 million has been
used for letters of guarantees given to one of the suppliers.

o TRY 10.1 million from Akbank Turkey; of which nothing has been used.

o TRY 3.9 million and USD 0.9 million from Garanti Turkey. Over the line of credit of USD 0.9 million, USD 0.1
million has been used for a letter of guarantee given to one of the suppliers.
o USD 2.0 million from Yapi Kredi, of which nothing has been used.

 Following lines of credit have been granted to Serenity SPA, of which €26.8 million has been used:

o € 35 million from UniCredit

o € 50 million from UBI

o € 15 million from BNL

 Following lines of credit have been granted to Ontex Manufacturing Australia Pty Ltd, of which nothing has been used:
o USD 1.1 million from Commonwealth Bank Australia.

 Ontex BVBA has given bank guarantees for an amount of € 10.2 million in favor of the Italian VAT authorities and € 2.0
million in favor of the Italian Custom Agency as at December 31, 2019.

7.18. EMPLOYEE BENEFIT LIABILITIES

The Group grants its working and retired personnel post-employment benefits, long-term benefits, and termination benefits. These
benefits have been valued in conformity with IAS 19. The related IAS 19 liability recognized in the statement of financial position
can be analyzed as follows:

in € million December 31, 2019 December 31, 2018

Post-employment benefits 24.2 19.9
Long-term benefits 2.7 2.6
Termination benefits1 - 0.1
Employee benefit liabilities 26.9 22.6
Short-term employee benefit liabilities 55.1 47.9
Net liability 82.0 70.4
1
The termination benefits include also the pre-pensions, but exclude the termination benefits included in the restructuring
provisions disclosed in note 7.21 below.

The calculation of the liability is based on actuarial assumptions that have been determined on the various balance sheet dates.
They are based not only on macro-economic factors valid for the dates in question but also on the specific characteristics of the
various schemes evaluated. They represent the Group’s best estimate for the future. They are periodically reviewed in accordance
with the evolution of the markets and available statistics.

Post-employment benefits
Ontex makes payments on a defined contribution basis to both state and private pension arrangements across our operations. In
addition, Ontex operates a defined benefit insurance scheme in Belgium and Ontex also has an obligation to make severance
payments to employees upon their retirement in France and Turkey.

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Ontex also operates several unfunded pension arrangements in respect of our German operations. The German operations do
not fund the pension arrangements but reflect pension scheme liabilities in company accounts on an IAS 19 basis. The pension
benefits are paid by the relevant company as they fall due.

The Group operates a couple of defined contribution (DC) plans which receive fixed contributions. The Group’s legal or
constructive obligation for these plans is limited to the contributions. The expense recognized in the current period in relation to
these contributions amounts to € 4.0 million (see also note 7.22 below; 2018: € 3.6 million).

In Belgium, the defined contribution (DC) plans are subject to a minimum guaranteed rate of return by law and are hence treated
as defined benefit (DB) plans. In practice, this guarantee is mainly covered by insurance companies. As there is no deficit as per
December 31, 2019, no liability has been recognized (2018: nil). The accumulated reserves of these plans are equal to the assets.
There are no risks to which the plan exposes the entity, focusing on any unusual, entity-specific or plan-specific risks, and of any
significant concentrations of risk.

Reconciliation of the post-employment employee benefit liabilities

in € million December 31, 2019 December 31, 2018
RECOGNITION OF THE OBLIGATION
Defined benefit obligation (DBO) at end of period (35.1) (30.0)
Fair value of plan assets at end of period 11.7 11.3
Funded status (23.4) (18.7)
-
Net (liability)/asset in statement of financial position (23.4) (18.7)

Defined benefit cost

Current service cost (2.3) (2.4)
Past service cost 0.3 -
Service cost recognized in Income Statement (2.0) (2.4)
Interest expense on DBO (0.7) (0.5)
Interest income on plan assets 0.2 0.1
Net interest cost (0.5) (0.3)
Remeasurement of other long-term benefits - -

Pension expense (2.4) (2.7)

in € million December 31, 2019 December 31, 2018

RECONCILIATION OF THE OBLIGATION
Defined benefit obligation (DBO) at beginning of year (30.0) (28.4)
Current service cost (2.3) (2.4)
Past service cost 0.3 -
Service cost (2.0) (2.4)
Interest expense on DBO (0.7) (0.5)
Participant contributions (0.1) (0.1)
Administrative expenses included in the DBO 0.1 0.1
Taxes included in the DBO 0.2 0.2
Benefit payments from plan 0.3 0.1
Benefit payments from employer 0.4 0.4
Effect of changes in financial assumptions (4.3) 0.2
Effect of experience adjustments 1.4 (0.1)
Effect of changes in foreign exchange rates (0.3) 0.4
Defined benefit obligation (DBO) at end of year (35.1) (30.0)

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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

in € million December 31, 2019 December 31, 2018

RECONCILIATION OF PLAN ASSETS AT FAIR VALUE
Fair value of plan assets at beginning of year 11.3 9.4
Interest income 0.2 0.1
Employer contribution 1.7 2.2
Plan participants' contributions 0.1 0.1
Benefit payments from plan (0.3) (0.1)
Benefit payments from employer (0.4) (0.4)
Administrative expenses included in the DBO (0.1) (0.1)
Taxes paid from plan assets (0.2) (0.2)
Return on plan assets (excluding interest income) (0.7) 0.2
Fair value of plan assets at end of period 11.7 11.3

in € million December 31, 2019 December 31, 2018

RECONCILIATION OF NET (LIABILITY)/ASSET IN STATEMENT OF
FINANCIAL POSITION
Net (liability)/asset at beginning of year (18.7) (18.9)
Defined benefit cost included in the income statement (2.0) (2.4)
Net interest expense (0.5) (0.3)
Total remeasurements included in OCI (3.7) 0.3
Employer contributions 1.7 2.2
Effect of changes in foreign exchange rates (0.3) 0.4
Net (liability)/asset at end of year (23.4) (18.7)
Unfunded versus Funded
Part of DBO from plans that are wholly unfunded (23.4) (18.7)

The plan assets consist of insurance contracts.

Expected contributions to post-employment benefit plans for the year ending December 31, 2020 are € 2.4 million.

Significant actuarial assumptions

COUNTRY
As at December 31, 2019 Belgium Germany France Turkey Italy Mexico
0.35% /
Discount rate 0.55% 0.80% / 0.65% 0.85% 12.60% 7.16%
0.45%
0.35% /
Expected Interest Income 0.55% 0.80% / 0.65% 0.85% 12.60% 7.16%
0.45%
Salary increase rate 0.00% /
3.25% 2.50% N/A 8.00% 4.54%
(on top of inflation) N/A / N/A
1.75% /
Rate of inflation 1.75% 1.75% / 1.75% 1.75% 8.00% 4.00%
1.75%
MR FR with INSEE
Heubeck C.S.O.
Mortality table age correction 2013/2015 IPS55 EMSSA09
2018 G 1980
minus 3 years par sexe
Based on
company
Turnover table/rates None N/A Table 1 5% flat company
specific
experience
Heubeck
Disability table/rates N/A N/A N/A N/A N/A
2018 G
Weighted average durations 14.1 10.9 13.0 4.6 12.4 11.0
* plan durations < 11: 1.35%; plan durations between 11 and 12: 1.5%; plan durations between 12 and 13: 1.55%; plan durations > 13:
1.65%

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COUNTRY
As at December 31, 2018 Belgium Germany France Turkey Italy Mexico
1.35% /
Discount rate 1.65% * 1.65% / 1.55% * 17.00% 1.55% * 7.85%
1.50% *
1.35% /
Expected Interest Income 1.65% 1.65% / 1.55% 17.00% 1.55% 7.85%
1.50%
Salary increase rate 0.00% /
3.25% 2.50% 12.00% N/A 4.54%
(on top of inflation) N/A / N/A
1.75% /
Rate of inflation 1.75% 1.75% / 1.75% 12.00% 1.75% 4.00%
1.75%

MR FR with INSEE
Heubeck C.S.O.
Mortality table age correction 2013/2015 IPS55 EMSSA09
2018 G 1980
minus 3 years par sexe

Based on
company
Turnover table/rates none N/A Table 1 5% flat company
specific
experience
Heubeck
Disability table/rates N/A N/A N/A N/A N/A
2018 G
Weighted average durations 14.1 10.9 13.0 4.6 12.4 11.0
* plan durations < 11: 1.35%; plan durations between 11 and 12: 1.5%; plan durations between 12 and 13: 1.55%; plan durations > 13: 1.65%

There are no unusual entity-specific or plan-specific risks to which the plan exposes the entity, neither are there any significant
concentrations of risk.

The sensitivity analyses below have been determined based on a method that extrapolates the impact on defined benefit obligation
as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

in € million As at December 31, 2019

Belgium Germany France Turkey Italy Mexico
Discount rate - 0,25bp (20.1) (11.3) (2.9) (1.6) (1.9) (1.4)
Discount rate + 0.25bp 18.4 10.8 2.7 1.5 1.8 1.3
Salary increase - 0.25bp (19.0) (11.0) (2.8) (1.5) (1.9) (1.3)
Salary increase + 0.25bp 19.4 11.0 2.9 1.6 1.9 1.3

in € million As at December 31, 2018

Belgium Germany France Turkey Italy Mexico
Discount rate - 0,25bp (15.9) (10.2) (2.8) (1.4) (1.0) (1.0)
Discount rate + 0.25bp 14.8 9.7 2.6 1.4 1.8 1.0
Salary increase - 0.25bp (15.2) (2.9) (2.6) (1.4) (1.8) (1.0)
Salary increase + 0.25bp 15.5 2.9 2.8 1.4 1.8 1.0

Post-Employment Benefits by Country

in € million As at December 31, 2019
Belgium Germany France Turkey Italy Mexico
RECOGNITION OF THE
OBLIGATION
Defined benefit obligation
(18.3) (9.8) (2.8) (1.1) (1.9) (1.2)
(DBO) at end of period
Fair value of plan assets at
11.7 - - - - -
end of period
Funded status (6.6) (9.8) (2.8) (1.1) (1.9) (1.2)
Net (liability)/asset in
statement of financial (6.6) (9.8) (2.8) (1.1) (1.9) (1.2)
position

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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

in € million As at December 31, 2018

Belgium Germany France Turkey Italy Mexico
RECOGNITION OF THE
OBLIGATION
Defined benefit obligation
(14.6) (8.8) (2.7) (1.1) (1.8) (1.1)
(DBO) at end of period
Fair value of plan assets at
11.3 - - - - -
end of period
Funded status (3.3) (8.8) (2.7) (1.1) (1.8) (1.1)
Net (liability)/asset in
statement of financial (3.3) (8.8) (2.7) (1.1) (1.8) (1.1)
position

7.19. DEFERRED TAXES AND CURRENT TAXES

Deferred taxes
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred taxes relate
to the same fiscal authority. The deferred tax assets and liabilities are attributable to the following items:

in € million 2019 2018

Deferred tax Deferred tax Deferred tax Deferred tax
asset liability asset liability
Intangible assets - (4.3) 0.2 -
Property, plant and equipment - (47.0) - (43.7)
Leases 30.7 (33.6) - -
Inventories 0.9 - - (1.9)
Financial instruments - (17.5) 1.0 -
Employee benefits 6.6 - 1.0 -
Accrued expenses and other payables 21.5 - 2.7 -
Others 2.1 - - (2.7)
Tax losses 150.0 - 105.3 -
Tax credit 9.3 - 1.4 -
Deferred tax assets & liabilities - Gross 221.0 (102.3) 111.6 (48.3)
Net deferred tax assets not recognized (124.1) - (86.7) -
Offsetting (67.7) 67.7 1.6 (1.6)
Deferred tax assets & liabilities - Net 29.3 (34.7) 26.5 (49.9)

Deferred tax assets are recognized on temporary differences, tax attributes carried forward and tax losses carried forward to the
extent that the realization of the related tax benefit through the future taxable profits is probable.

The tax losses carried forward mainly relate to France, Belgium, Brazil and Spain. In Belgium and France, deferred tax assets
have been recognized on tax losses carried forward considering the expected taxable profits in the foreseeable future.

The Group did not recognize deferred tax assets of € 124.1 million (2018: € 86.7 million) on the tax losses carried forward (see
also note 7.4.1).

In Spain, this relates to tax losses at the level of the Spanish subsidiary acquired as part of Grupo Mabe. In Brazil this relates to
tax losses at the level of the Brazilian subsidiaries. In both countries, tax losses can in principle be carried forward indefinitely but
the current profit levels in the relevant entities are such that no deferred tax asset has been recognized per December 31, 2019,
bearing in mind that in Brazil no tax consolidation is allowed and that in Spain pre-acquisition tax losses cannot be offset against
profits of legacy Ontex entities.

The Group did not recognize deferred taxes associated with investments in subsidiaries. There is currently no policy or detailed
plan in relation to the payment of dividends within the Group.

Current taxes
in € million December 31, 2019 December 31, 2018
Current tax assets 15.8 12.5
Current tax liabilities (39.4) (46.0)

The current tax assets mainly relate to the excess of pre-payments made compared to the actual income tax payable for the year.
The current tax liabilities include an amount of € 33.3 million actual corporate taxes payable (2018: € 35.6 million) and € 6.1 million
of provision for uncertain taxes (2018: € 10.4 million).

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7.20. CURRENT AND NON-CURRENT LIABILITIES

Other current liabilities (excluding provisions, income tax liabilities, financial liabilities and liabilities directly associated with non-
current assets intended for sale) can be presented as follows:

in € million December 31, 2019 December 31, 2018

Accrued expenses and other payables 39.0 31.8
Current accrued expenses and other payables 39.0 31.8
Trade payables 465.6 501.0
Employee benefit liabilities 55.1 47.9
Total current liabilities 559.8 580.7
Other non-current financial liabilities - -

7.21. PROVISIONS

in € million Legal claims Restructuring Other Total

Opening Balance 6.8 0.8 1.0 8.6
Additional provisions 1.1 15.5 1.2 17.8
Unused amounts reversed (0.1) - (0.6) (0.7)
Used during the year (0.6) (0.6) (0.2) (1.3)
As at December 31, 2019 7.2 15.8 1.4 24.4
Of which non-current - - - -
Of which current 7.2 15.8 1.4 24.4

The restructuring provision has been established in the context of the Transform to Grow Programme, launched in 2018. The
provision mainly includes termination benefits. The additional provisions have been recognized in ‘Non-recurring income and
expenses’, under the heading ‘Business restructuring’ (see also note 7.24).
The Group recognizes a provision for certain legal claims filed against the Group by customers, suppliers or former employees.

On September 2, 2014, Ontex received a notification that the Spanish Competition Authorities (CNMC) opened infringement
proceedings against 15 companies in the sector (including three subsidiaries of the Company: Ontex Es Holdco, S.A., Ontex
Peninsular, S.A.U. and Ontex ID, S.A.U.) with respect to alleged conduct of fixing prices and other commercial conditions in the
Spanish market for heavy adult incontinence products. On May 26, 2016, following the investigation, the CNMC issued its decision.
In its decision it has found eight companies, including Ontex' Spanish subsidiaries guilty of being part of a cartel. For its
involvement from 1999 to 2014, Ontex was fined € 5.2 million. Ontex initiated an appeal against the decision and this appeal is
pending. As per December 31, 2016, a provision amounting to € 5.2 million has been accounted for. The provision has not been
adjusted per December 31, 2019.

7.22. EMPLOYEE BENEFIT EXPENSES

in € million Full Year

2019 2018
Wages and salaries (258.9) (260.1)
Social security costs (62.0) (61.6)
Defined benefit plans - Service cost (2.0) (2.4)
Defined contribution costs (4.0) (3.6)
Other employee benefit expenses (55.0) (52.4)
Total employee benefit expenses (382.0) (380.1)

In Full-Time Equivalents 2019 2018

Average number of total employees 9,610 10,750
Of which:
- workers 5,996 6,944
- employees 3,520 3,706
- management 94 100

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DIGITALIZATION PRODUCTION REVIEW GOVERNANCE STATEMENTS STATEMENTS INFORMATION

7.23. OTHER OPERATING INCOME/(EXPENSES), NET

in € million Full Year

2019 2018
Gain on sale of assets 0.6 0.9
Foreign exchange differences on operating activities 3.0 2.7
Losses on sale of assets (0.6) (1.0)
Other income/(expenses) (3.4) (0.7)
Total other operating income/(expense), net (0.5) 1.9

7.24. NON-RECURRING INCOME AND EXPENSES

in € million Full Year

2019 2018
Factory Closure (2.9) (5.9)
Business restructuring (54.7) (11.1)
Acquisition-related expenses (1.2) 2.5
Change in fair value of contingent consideration - (1.0)
Income and expenses related to changes to Group structure (58.8) (15.5)

Impairment of assets (7.6) (8.8)

Litigation and legal claims (3.9) -
Income and expenses related to impairments and major litigations (11.5) (8.8)

Total non-recurring income and expenses (70.3) (24.3)

Items classified under the heading non-recurring income and expenses are those items that are considered by management not
to relate to items in the ordinary course of activities of the Company. The Group has adopted this classification to allow a better
understanding of its recurring financial performance.
These items are presented as follows in the consolidated income statement as follows:
 income and expenses related to changes to Group structure; and

 income and expenses related to impairments and major litigations

7.24.1. Income and expenses related to changes to Group structure

Factory closure
On March 7, 2019, Ontex informed its employees at the Yangzhou (China) plant of its intention to cease production by mid-2019.
This plant primarily manufactures feminine care products for the Western European market, and this production will be re-allocated
to other Ontex plants. The costs recognized in 2019, € 1.5 million relates mainly to the restructuring expenses.

In 2018, the Group announced the decision to transfer its manufacturing operation in Aparecida de Goiânia to its manufacturing
site in Senador Canedo, both in the State of Goiás. This move was made after an in-depth analysis and considering the efficiency
of combining the entire production into a single unit, where it will be possible to deploy efficient technologies and processes. All
alternatives were investigated to minimize impact on Ontex employees in Aparecida de Goiânia, the majority of whom have
transferred to Senador Canedo.

The costs recognized relates mainly to the restructuring expenses (2019: € 1.4 million; 2018: € 5.9 million).

Business restructuring
The Group undertook several projects to optimize the management of its business.
The Group announced in May 2019 a comprehensive transformation plan, Transform2Grow (T2G), which will step-change the
operational efficiency and commercial practices. With T2G-enhanced commercial focus and competitiveness, the Group will
accelerate execution of our two strategic priorities: Strengthen the current leadership positions and expand into new businesses
and geographies within our core categories. The T2G plan entails an investment of € 130 million, split between one-off costs of €
85 million and Capex of € 45 million, with a full pay-back by the end of 2022.
The costs recognized in 2019 relate to in-depth assessments of the different processes and the start of the implementation of
different projects to increase the operational efficiency. Total expenses related to the execution of the projects amount to € 54.7
million in 2019.
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Acquisition-related items
In 2018, an income of € 5.0 million was realized as a result of the reversal of the liability relating to the deferred consideration for
the acquisition of Serenity as it is considered not probable. Furthermore, the Group incurred expenses relating to the continuing
integration of Grupo Mabe and Ontex Brazil in 2018 and 2019.

7.24.2. Income and expenses related to impairments and major litigations

Impairment of assets
The impairment loss is a non-cash item and relates in 2019 and 2018 (2019: € 7.6 million; 2018: € 8.8 million) mainly to the
impairment of assets as a result of the transfer of the manufacturing operation in Aparecida de Goiânia in Brazil to its
manufacturing site in Senador Canedo.

7.25. EXPENSES BY NATURE

Expenses by nature represent an alternative disclosure for amounts included in the Consolidated Income Statement. There are
classified under ‘Cost of sales’, ‘Distribution expenses’, ‘Sales and marketing expenses’, ‘General administrative expenses’ and
‘Other operating income / expense (net)’ in respect of the years ended December 31:

in € million Full Year

Note 2019 2018
Changes in inventories 3.7 9.7
Raw materials and consumables purchased (1,344.6) (1,358.9)
Employee benefit expenses 7.22 (382.0) (380.2)
Depreciation and amortization 7.9, 7.10, 7.11 (87.6) (56.9)
Rendered services (294.8) (287.0)
Lease expenses 7.11 (18.0) (43.7)
Other income / (expenses) 7.23 (0.5) 1.9
Total cost of sales, distribution expenses, sales and
marketing expenses, general administrative expenses (2,123.8) (2,115.1)
and other operating income / (expense)

7.26. NET FINANCE COST

The various items comprising the net finance cost are as follows:

in € million Full Year

2019 2018
Interest income on current assets 2.6 2.5
Finance income 2.6 2.5

Interest expense on bonds and TLA (incl. commitment fee) (15.4) (14.4)
Amortization borrowing expenses (3.2) (3.6)
Interest expense on other loans (16.4) (7.1)
Interest expense (35.0) (25.1)
Banking cost (2.0) (2.2)
Factor fee (1.0) (1.1)
Losses on derivatives and deports forward contracts (1.2) (1.2)
Other (0.1) (0.3)
Finance cost (39.3) (29.9)

Finance income as per income statement 2.6 2.5

Finance expense as per income statement (39.3) (29.9)
Net exchange differences relating to financing activities (1.0) (1.2)
Net finance cost as per income statement (37.7) (28.6)

The interest expense on other loans includes also the interest expense on lease liabilities as disclosed in note 7.11, which explains
the movement compared to 2018.

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Reconciliation to the statement of cash flows:

in € million Full Year

2019 2018
Total interest expense (31.9) (21.1)
Movement in accrued interest and accreting interest 0.6 (0.7)
Interest paid (31.3) (21.8)
Total interest income 2.6 2.5
Interest received 2.6 2.5

7.27. INCOME TAX EXPENSE

The income tax (charged)/credited to the income statement during the year is as follows:

in € million Full Year

2019 2018
Current tax (expense) / income (28.9) (28.9)
Deferred tax (expense) / income 16.7 1.7
Total income tax expense (12.2) (27.2)

The income tax expense can be reconciled as follows:

in € million Full Year

2019 2018
Profit before income tax 49.5 124.2
Income tax expense calculated at domestic tax rates (9.6) (31.2)
Disallowed expenses (4.6) (4.3)
Tax-exempt income 1.7 -
Use of previously unrecognized tax losses 0.2 1.6
Use of previously recognized tax losses - 3.3
Effect of unused tax losses not recognized as deferred tax assets (12.1) (3.7)
Effect of previously unrecognized tax losses now recognized as deferred tax assets 4.0 8.5
Effect of tax credits recognized as deferred tax assets 5.8 -
Adjustments in respect of prior year 4.6 (3.4)
Difference in statutory tax rates (1.4) -
Other (0.9) 2.0
Total income tax expense (12.2) (27.2)

7.28. SHARE-BASED PAYMENTS

Since September 2014 the Company implemented yearly Long-Term Incentive Plans (‘LTIP’), which are based on a combination
of stock options (further ‘Options’) and restricted stock units (further ‘RSU’s’). In 2019 the long-term incentive plan changed in a
combination of RSU’s, Options and Performance Stock Units (further ‘PSU’s), each representing one third of the total long-term
incentive grant value. The Options, RSU’s and PSU’s are accounted for as equity-settled share-based payments. The options,
RSU’s and PSU’s can only vest and Options giving the right to receive shares of the Company (further ‘Shares’) or any other
rights to acquire Shares can only be exercisable as from three years after the grant. The RSU, PSU and Options will vest subject
to the condition that the participant remains in service. The share price is considered to be the relevant performance indicator and
the vesting of the award will not be subject to additional specific performance conditions, except for PSU’s. For the vesting of the
PSU’s, the Board has set targets for the 2019-2021 performance period in terms of like-for-like sales growth, Adjusted EBITDA
and Earnings per share growth. The Articles of Association authorize the Company to deviate from such rule, as allowed under
the Belgian Companies Code.

The exercise price of the Options will be equal to the last closing rating of the Share immediately preceding the option grant date.
For the Options, the exercise period will start on the vesting date.
The Shares underlying the RSU’s and PSU’s will be granted for free as soon as practicable after the vesting date of the RSU’s
and the PSU’s.

Upon vesting of RSU’s and PSU’s, the Shares underlying the RSU’s and PSU’s are transferred to the participants, while upon
vesting, Options may be exercised until their expiry date (eight years from the date of grant).

On or about September 26, 2014, a total of 242,642 stock options and 49,040 RSU’s were granted, 74,244 options and 49,040
RSU’s have forfeited, expired or have been exercised as of December 31, 2019. The stock options and RSU’s are exercisable
between September 2017 and September 2022.

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On or about June 26, 2015, a total of 159,413 stock options and 38,294 RSU’s were granted, 19,746 options and 38,294 RSU’s
have forfeited, expired or have been exercised as of December 31, 2019. The stock options and RSU’s are exercisable between
June 2018 and June 2023.

On or about June 15, 2016, a total of 322,294 stock options and 75,227 RSU’s were granted, 49,736 options and 75,227 RSU’s
have forfeited, expired or have been exercised as of December 31, 2019. The stock options and RSU’s are exercisable between
June 2019 and June 2024.

On or about May 10, 2017 a total of 299,914 stock options and 69,023 RSU’s were granted, 38,173 options and 8,785 RSU’s
have forfeited, expired or have been exercised as of December 31, 2019. The stock options and RSU’s are exercisable between
June 2020 and June 2025.

On or about June 15, 2018, the Group granted a new LTIP plan consisting of 471,064 stock options and 93,576 RSU’s, 40,921
options and 8,128 RSU’s have forfeited, expired or have been exercised as of December 31, 2019. The stock options and RSU’s
are exercisable between June 2021 and June 2026.

During the period, the Group granted a new LTIP plan consisting of 393,403 stock options, 124,420 RSU’s and 124,420 PSU’s.
1,546 options, 441 RSU’s and 441 PSU’s have forfeited, expired or have been exercised as of December 31, 2019. The stock
options and RSU’s are exercisable between June 2022 and June 2027.

The Board of Directors of the Group has decided on June 1, 2015 to implement a full hedging program (total return swap) for the
share-based payment arrangements starting July 1, 2015 and renewed on an annual basis.
The following share-based payment arrangements were in existence during the current and prior years:

# stock options/ # stock options/

Exercise Price RSU's/PSU's RSU's/PSU's
per stock option December 31, December 31,
Expiry Date (€) Fair value (€) 2019 2018
LTIP 2014
Options 2022 17.87 3.57 168,398 172,998
RSU's 2017 N/A 15.97 - -
LTIP 2015
Options 2023 26.60 6.39 139,667 139,667
RSU's 2018 N/A 24.45 - -
LTIP 2016
Options 2024 28.44 6.64 272,558 271,267
RSU's 2019 N/A 26.48 - 63,318
LTIP 2017
Options 2025 33.11 7.62 261,741 263,836
RSU's 2020 N/A 30.45 60,238 60,720
LTIP 2018
Options 2026 23.56 4.68 430,143 433,658
RSU's 2021 N/A 21.35 85,448 86,146
LTIP 2019
Options 2027 14.0 3.99 391,857 -
RSU's 2022 N/A 12.05 123,979 -
PSU's 2022 N/A 12.05 123,979 -
Total outstanding
1,664,364 1,281,426
stock options
Total outstanding
269,665 210,184
RSU's
Total outstanding
123,979 -
PSU's

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The following reconciles the options and RSU’s outstanding at the beginning and end of the year:

Average exercise
price per stock
option (€)1 Stock options RSU's PSU's
As at January 1, 2018 27.56 915,936 170,658 -
Granted 23.56 471,064 93,576 -
Forfeited 28.29 (93,906) (20,499) -
Exercised² 17.87 (11,668) (33,551) -
As at December 31, 2018 26.12 1,281,426 210,184 -
Granted 14.00 393,403 124,420 124,420
Forfeited 25.90 (5,865) (64,939) (441)
Exercised² 17.87 (4,600) - -
As at December 31, 2019 25.54 1,664,364 269,665 123,979
of which vested and exercisable 24.93 580,623
1
The average exercise price mentioned in the table above relates only to the stock options, as the RSU's do not have an exercise price.

² The weighted average share price of options exercised during the year ended December 31, 2019 was € 16.48 (2018: € 22.64).

The fair value of the stock options has been determined based on the Black and Scholes model. The expected volatility used in
the model is based on the historical volatility of the Company.
Below is an overview of all the parameters used in this model:

LTIP 2014 LTIP 2015 LTIP 2016 LTIP 2017 LTIP 2018 LTIP 2019
Exercise Price (€) 17.87 26.60 28.44 33.11 23.56 14.00
Expected volatility of the shares (%) 23.58% 26.32% 26.56% 27.12% 25.63% 37.98%
Expected dividends yield (%) 2.94% 2.14% 1.98% 2.31% 2.70% 3.82%
Risk free interest rate (%) 1.13% 1.02% 0.37% 0.60% 0.69% 0.10%

The fair value of the RSU’s and PSU’s has been determined by deducting from the exercise price the expected and discounted
dividend flow, based on the same parameters as above.
Social charges related to the LTIP are accrued for over the vesting period.

7.29. CONTINGENCIES
The Group is involved in a number of environmental, contractual, product liability, intellectual property, employment and other
claims and disputes incidental to our business.

COFECE, the Mexican antitrust authority, is conducting an investigation in our industry. To the best of the Group’s knowledge,
the facts under investigation relate to periods prior to its acquisition of Grupo PI Mabe, S.A. de C.V. (“Mabe”). Ontex and Mabe
have been proactively and fully cooperating with COFECE in the investigation and intend to continue to do so. Based on the facts
and circumstances known to it and in light of the contractual terms of the Mabe acquisition, the Group does not expect the
investigation to result in a net financial cost to it.

The Group currently believes that the disposition of the claims and disputes, individually or in aggregate, should not have a
material adverse effect on our consolidated financial condition, results of operations or liquidity.

7.30. COMMITMENTS
7.30.1. Capital commitments
The Group has contracted expenditures for the acquisition of property, plant and equipment at December 31, 2019 of € 17.0
million (2018: € 26.3 million).

7.30.2. Operating lease commitments

The Group has also contracted a number of property leases that can be terminated by respecting the notice period which is
different in each jurisdiction.
The Group leases machinery used in the production. The typical lease terms vary depending upon which country the lease
agreement is entered into. The majority of lease agreements are renewable at the end of the lease period at market rate.

From 1 January 2019, the Group has recognized right-of-use assets for these leases, except for short-term and low-value leases,
see note 7.11 for further information.

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The lease expenditure charged to the income statement during the respective years is disclosed in note 7.11 ‘Leases’.
Commitments in respect of future minimum lease payments that may be claimed under simple non-cancellable leases break down
as follows:

in € million December 31, 2019 December 31, 2018

Within one year - 35.7
From 1 to 5 years - 91.4
Beyond 5 years - 33.8
Total - 160.9

7.30.2. Bank guarantees

As indicated in note 7.17 ‘Interest-bearing debts’, no assets are pledged as security for these borrowings. The entire amount of
the Group’s bank borrowings and accrued interest are secured according to collective pledge agreements.

The Group has given bank guarantees for an amount of € 26.7 million in order to participate in public tenders as at December 31,
2019 (2018: € 41.8 million).

7.31. RELATED PARTY TRANSACTIONS

As part of our business, Ontex has entered into several transactions with related parties.

7.31.1. Consolidated companies

A list of subsidiaries is given in note 7.7 ‘List of consolidated companies’.

7.31.2. Relations with the shareholders

There are no transactions with shareholders per December 31, 2019 (nor in 2018).

7.31.3. Relations with non-executive members of the Board of Directors

in € million Full Year
2019 2018
Remuneration 0.8 0.9

7.31.4. Relations with the key management personnel

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the
activities of the Group. Key management for the Group are all the members of Management Committee.

7.31.5. Key management compensation

Remuneration of the CEO Full Year
in € million 2019 2018
Fixed and variable remuneration 2.6 1.6

Remuneration of the Executive Team (excluding the CEO) Full Year

in € million 2019 2018
Fixed remuneration 4.5 4.7
Variable remuneration 3.9 1.9
Other remuneration 0.7 0.8
Total 9.1 7.4

The Company implemented Long-Term Incentive Plans (‘LTIP’), which are based on a combination of stock options, restricted
stock units and performance stock units (see note 7.28).

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The number of stock options, restricted stock units and performance stock units granted to the CEO and the Executive
Management Team is summarized below:
For the year ended Number of Number of
December 31, 2019 Number of RSU's PSU's Stock Options
LTIP 2014
CEO 7,868 - 38,930
Executive Team (excluding CEO) 21,163 - 104,720
LTIP 2015
CEO 6,884 - 28,661
Executive Team (excluding CEO) 15,786 - 65,718
LTIP 2016
CEO 14,522 - 62,220
Executive Team (excluding CEO) 37,496 - 160,650
LTIP 2017
CEO 10,368 - 45,052
Executive Team (excluding CEO) 36,982 - 160,699
LTIP 2018
CEO 14,921 - 75,114
Executive Team (excluding CEO) 47,478 - 239,016
LTIP 2019
CEO 18,414 18,414 64,610
Executive Team (excluding CEO) 53,376 53,376 171,928

7.32. EVENTS AFTER THE END OF THE REPORTING PERIOD

COVID-19 is an infectious disease caused by the most recently discovered coronavirus. This new virus and disease were unknown
before the outbreak began in Wuhan, China, in December 2019. Ontex sales in China and other countries of the Far East are not
material, hence the outbreak of the virus in Asia had no significant impact on the financial performance of the Group at the
publication date of this report.

However, based on its assessment of the evolution and spreading of the virus, the World Health Organization characterized it as
a pandemic on March 11, 2020. We source several raw materials from suppliers all over the world and we deliver our products to
customers located in all regions of the world. Further spread of the coronavirus leading to restrictions in the movement of goods
and individuals could lead to disruptions to our supply chain and manufacturing organization, increased logistics costs and delayed
shipments to customers. At the moment of the publication of these consolidated financial statements, the impact of the current
spread of the virus on the financial performance of the Group is limited. We nevertheless will continue to monitor the situation
closely as continuing restrictions due to the virus could adversely affect the results of operations, financial position and
performance in 2020. Based on our analysis and modelling using currently available information, as well as discussions with the
Management of Ontex, we believe the Company has taken the required measures to mitigate the impacts of the pandemic on its
operations and strengthened its funding; even though visibility remains limited as the pandemic is still progressing, the going
concern is not considered to be at risk.

No other significant events occurred after the end of the reporting date which would affect the information mentioned in these
consolidated financial statements.

7.33. AUDIT FEES

in € thousands Full Year

2019 2018
Audit Fees 1,130.7 1,108.4
Additional Services rendered by the auditor's mandate:
Audit related fees 90.2 95.5
Tax advisory & compliance services 131.0 270.3
Other Services 9.0 22.9
Total 1,360.9 1,497.1

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SUMMARY STATUTORY
FINANCIAL STATEMENTS
STATUTORY BALANCE SHEET AFTER APPROPRIATION

in € million December 31, 2019 December 31, 2018

ASSETS 3,172.8 3,282.5
FIXED ASSETS 3,015.7 3,078.9
Formation expenses 1.0 1.6
Intangible assets 16.1 45.4
Tangible assets 1.6 2.1
Financial fixed assets 2,997.0 3,029.9
Participating interests 1,908.0 1,908.0
Amounts receivable 1,088.9 1,121.8
Other financial fixed assets 0.1 0.1

CURRENT ASSETS 157.1 203.5

Amounts receivable within one year 87.8 121.3
Treasury shares 28.0 27.9
Cash at bank and in hand 39.2 52.1
Deferred charges and accrued income 2.2 2.2

EQUITY AND LIABILITIES 3,172.8 3,282.5

EQUITY 1,937.5 1,994.0
Capital 823.6 823.6
Share premium 412.7 412.7
Reserves 285.6 285.6
Accumulated losses 415.6 472.1

PROVISIONS AND DEFERRED TAXES 10.4 4.4

AMOUNTS PAYABLE 1,224.9 1,284.0

Amounts payable after more than one year 808.2 806.5
Financial debt 808.2 806.5
Amounts payable within one year 415.8 476.6
Financial debt 158.0 241.5
Trade debts 5.4 8.9
Taxes, remunerations and social security 5.1 5.4
Other amounts payable 247.3 220.7
Accruals and deferred income 0.9 0.9

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STATUTORY INCOME STATEMENT

Full Year
in € million 2019 2018
Operating income 22.0 41.9
Operating charges (83.0) (69.5)

Operating loss (61.0) (27.7)

Financial result 3.7 24.5

Profit/(loss) for the period before taxes (57.3) (3.2)

Income taxes 0.7 (1.4)

Profit/(loss) for the period (56.5) (4.6)

EXTRACT FROM ONTEX GROUP NV SEPARATE (NON-

CONSOLIDATED) FINANCIAL STATEMENTS PREPARED IN
ACCORDANCE WITH BELGIAN GAAP
The preceding information is extracted from the separate Belgian GAAP financial statements of Ontex Group NV and is included
as required by article 105 of the Belgian Company Code. The separate financial statements, together with the annual report of
the Board of Directors to the general assembly of shareholders as well as the auditors’ report, will be filed with the National Bank
of Belgium within the legally foreseen time limits. These documents are also available on request at Ontex Group NV, Korte
Keppestraat 21, 9320 Aalst (Erembodegem).

The statutory auditor’s report is unqualified and certifies that the non-consolidated financial statements of Ontex Group NV
prepared in accordance with Belgian GAAP for the year ended December 31, 2019 (full financial year) give a true and fair view of
the financial position and results of Ontex Group NV in accordance with the legal and regulatory dispositions applicable in Belgium.

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CONTEXT ENGAGEMENT

MATERIALITY APPROACH
THE DEVELOPMENT OF OUR NEW SUSTAINABILITY STRATEGY WAS
BASED UPON A MATERIALITY ASSESSMENT. THIS APPROACH IDENTIFIES
CRITICAL ECONOMIC, ENVIRONMENTAL AND SOCIAL ISSUES WHICH MAY
SIGNIFICANTLY IMPACT ONTEX’S PERFORMANCE AND/OR INFLUENCE
STAKEHOLDERS’ DECISIONS.

We conduct a materiality assessment every two years. The last one was performed in December 2018 with just under 200
stakeholders from four main stakeholder groups: customers, employees, suppliers and NGOs.

……………………………………………………………………………………………………………………………………………………

MATERIALITY PROCESS
We used a four-step process for the materiality assessment:

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The topics identified were placed on a matrix (see below), their position relative to the degree of stakeholder interest and potential
business impact.

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CONTEXT ENGAGEMENT

SUSTAINABLE
DEVELOPMENT GOALS
THE UNITED NATIONS’ SUSTAINABLE DEVELOPMENT GOALS (SDGS) HAVE
OUR FULL SUPPORT. THEY INSPIRE OUR WORK AND ACT AS A GUIDE AS
WE SET AMBITIONS AND ENGAGE WITH OUR PARTNERS. THEY PROVIDE A
CLEAR COMPASS FOR BUSINESS GROWTH AND DEVELOPMENT. THEY
HELPED PILOT US THROUGH THE DEVELOPMENT OF OUR NEW STRATEGY
AND ARE EMBEDDED IN OUR SUSTAINABLE PRIORITIES.

As a company, we focus on the SDGs where we can have the biggest positive impact. This approach builds on our core principles
of sustainability, safety and integrity, including respect for human rights.

Our healthcare products enhance consumer’s everyday life. In our own operations, we are committed to creating
a safe and healthy workplace.

Our focus is on circular solutions. Part of this is eliminating waste from production and optimizing waste treatment
methods. Our commitment to eco or health labels will enhance transparency.

Our focus is on energy efficiency, renewable energy and supporting climate resilience so that our operations can
become carbon neutral by 2030.

We will only source certified or controlled fluff, and use organic cotton in our products.

We strive to ensure good working conditions and fair jobs for all our employees and people in our supply chain.

We will continue to engage with local communities via partnerships, through volunteering, donations and other
similar activities.

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ENGAGING WITH OUR

STAKEHOLDERS
WE ENGAGE WITH OUR STAKEHOLDER GROUPS IN A VARIETY OF FORMAL
AND INFORMAL SETTINGS. THESE RANGE FROM MEETINGS WITH LOCAL,
REGIONAL, NATIONAL AND INTERNATIONAL GROUPS TO ONGOING
DIALOGUES WITH OUR CUSTOMERS AND CONSUMERS.

The table below shows how we engage, the topics of concern and how we try to address them.

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SUSTAINABILITY
PERFORMANCE 2019
NON-FINANCIAL DATA
The table below provides an overview of Ontex's sustainability performance in 2019 and tracks progress since 2017.

ENVIRONMENTAL DATA
GENERAL
UNIT 2017 2018 2019 COMMENT
Production site scope
Total number of manufacturing sites in Number of
19 19 18
scope sites

ISO 14001 certification

Percentage of ISO 14001 certified sites % 69 77 85

ISO 50001 certification

Percentage of ISO 50001 certified sites % 62 62 62

ISO 45001 certification

Percentage of ISO 45001 certified sites % 15 15 23

Radar chart audit

New indicator. Internal
audit to check plant's
compliance with
applicable regulations
Percentage of sites that went through a
% - - 39 and company policies on
radar chart audit
quality, environment,
safety, social
accountability &
ecolabels.

CLIMATE
UNIT 2017 2018 2019 COMMENT
CO2 EMISSIONS SCOPE 1,2 & 3
Scope 1 & 2 emissions market-based
Tons CO2-
Scope 1 10992 11756 9770
equivalent
Tons CO2-
Scope 2 57966 55395 50855
equivalent
Tons CO2-
Total scope 1 & 2 68957 67152 60626
equivalent
Scope 1 and 2 carbon
emissions are calculated
Scope 1 & 2 emissions location-
using the Greenhouse
based
Gas Protocol definition.
Tons CO2-
Scope 1 10992 11756 9770 Note that the transport of
equivalent
goods via owned trucks
Tons CO2-
Scope 2 130677 135001 128694 is currently not included
equivalent
in the scope of carbon
Tons CO2- reporting.
Total scope 1 & 2 141669 146757 138465
equivalent

Absolute reduction of scope 1 & 2

% 5 8 10
emissions market-based since 2014

Carbon intensity ratio of scope 1 & 2 gCO2/€

32 29.3 26.6
emissions product sold

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Greenhouse gas emissions in scope Tons CO2-

- - - Currently not calucated.
3 equivalent

ENERGY EFFICIENCY &

RENEWABLES
Energy consumption within the
organisation
Electricity consumption MWh 354107 432309 382937
Car fuels (diesel/gasoline) MWh 10831 11101 10226
Fuel oil MWh 3537 6086 3608
LPG MWh 1416 2685 1722
Natural gas MWh 27610 28233 25029
Wood pellets MWh 925 3542 2737
Total energy consumption MWh 398426 483956 426260

kwh/1000 Weighted average over

Electricity intensity ratio finished 13.64 14.89 15.66 the different product
goods categories.

Renewable energy
Quantity of renewable
electricity compared with
Percentage of renewable electricity % 60 64 70
the total amount of
electricity purchased.
New indicator. Quantity
of renewable energy
Percentage of total renewable energy % - - 63 compared with total
amount of energy
consumed.

On-site production renewable

electricity
Production plants with on-site renewable Number of
0 0 1 New indicator
electricity generation sites
Amount of green electricity generated
MWh - - 628 New indicator
on-site

WATER
Water consumption
Ground water m³ 38361 51125 79887
Surface water m³ 24161 10891 10171
Urban water m³ 115176 114457 114140
Rain water m³ 247 205 574
Deep well m³ 20242 23613 0
Total water consumption m³ 198187 200291 204771

l/1000
Water intensity ratio finished - - 9.33 New indicator
goods

MATERIALS
UNIT 2017 2018 2019 COMMENT
Material use
Baby diapers % -6 -6 -8
Baby pants % 1 0 0
External feminine care % 5 6 2 Reduction of materials
(kg) compared with base
Light adult care % -3 -2 -1 year 2014.
Heavy adult care % -7 -10 -13
Total % -1 -2 -1

Renewable raw materials

Share of renewable raw materials in our
% 50 49 49
products

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CONTEXT ENGAGEMENT

Share of renewable raw materials in our

% 82 82 81
packaging

Biobased raw materials

Share of biobased raw materials in our
% 50 49 49
products
Share of biobased raw materials in our
% 80 82 81
packaging

Deforestation
Share of recycled paper and board for
% - - 92 New indicator
packaging
Share of fluff coming certified sources
% 35 55 73
(FSC®/ PEFC™ )
Share of fluff coming from controlled
% 65 45 27
sources
Share of organic cotton used in tampons % 100 100 100

Eco Products
Share of products with eco-labels % turnover 29 32 34

CIRCULAR SOLUTIONS
UNIT 2017 2018 2019 COMMENT
REUSABLE, RECYCLABLE,
COMPOSABLE
Percentage of total packaging that is
% 100 100 100 New indicator
reusable, recyclable or compostable
Share of recycled raw materials in our
% 0 0 0 New indicator
products
Share of recycled raw materials in our
% - - 0 New indicator
packaging

PRODUCTION WASTE
Non-hazardous
Sent to recycling ton 24136 35230 31142
Sent to incineration for energy
ton 1769 2148 2201
generation/recovery
Sent to incineration without energy This data excludes waste
ton 465 304 237
generation/recovery information from our
Sent to landfill/storage ton 5022 5924 4357 Ethiopian plant.
Hazardous
The recycling index
Sent to recycling ton 501 27 25
expresses the quantity of
Sent to incineration for energy waste sent to recycling &
ton 26 167 136
generation/recovery energy recuperation
Sent to incineration without energy compared with the total
ton 24 36 14
generation/recovery production waste.
Sent to landfill/storage ton 398 29 5
Total production waste ton 32341 43865 38118

Recycling index % 82 86 88

Waste (g)
Production waste intensity ratio per finished 1.6 1.8 1.7
good

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SOCIAL DATA
HUMAN RESOURCES
UNIT 2017 2018 2019 COMMENT
WORKFORCE
All Workforce data is
expressed as the
Total employees average number of total
employees in 2019
(FTEs)
Number of
Total number of employees 11013 10750 9610
employees

Employee by category
Number of
Blue collar 7475 6944 5996
employees
Number of
White collar 3431 3706 3520
employees
Management Number 107 100 94

Employees by geographical zones

Number of different nationalities Number 50 50 60

Employees by gender
Percentage of men in total employees % 71 70 72
Percentage of women in total
% 29 30 28
employees

Employees by age
<30 years % 27 26 23
30-50 years % 60 61 61
>50 years % 13 13 16

Employees by contract type

Limited duration % 9 24 6
Unlimited duration % 91 76 94

Inclusive diversity
Percentage of female management % 21 27 24
Percentage of persons with disabilities % - - 1 New indicator

Hires & dismissals

Number of
Total number of hires - - 1606 New indicator
hires
Number of
Total number of dismissals - - 1315 New indicator
dismissals
Turnover rate % - - 14% New indicator

Absenteeism
Expressed as the total of
unplanned hours of
absence of active
Absenteeism rate % - - 3
employees to the total of
available hours during
2019.

SOCIAL DIALOGUE
Social dialogue
Percentage of employees covered by
% 95 76 66
collective bargaining agreements
Percentage of employees that are
represented by a health & safety % 95 94 41
committee

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HEALTH & SAFETY

Occupational accidents
Number of labor
Frequency rate Ratio 14.39 9.16 5.86 accidents per million
worked hours.
Number of total lost days
compared with the total
number of hours
scheduled to be worked
Severity rate Ratio 0.17 0.14 0.11 by the employees. Days
mean scheduled work
days. The counting of
lost days starts the day
after the accident.

Fatal accidents Number 0 0 0

Type of accidents
Superficial injuries % 36 25 22
Open wound or cut caused by sharp
% 17 20 12
edge/machine
Twisted, disjointed and work strain % 13 8 8 Top 5 of most frequent
accidents.
Cut caused by knife, cutter or scissors % - 8 3
Closed fractures % 7 - 16
Others % 14 39 39

TALENT DEVELOPMENT
Employees having
Percentage of employees trained % 98 participated in at least
one training course.
As not all training is
currenty registered, the
figures shown are an
Total number of training hours Number 207255 101993 192484 underestimation. We are
currently optimizing the
process of registering
training.
Average number of training hours per
Number 19 9 20
employee

HUMAN RIGHTS
Number of BSCI audits conducted at our
Number - 12 7
sites

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SUPPLIER DATA
UNIT 2017 2018 2019 COMMENT
A new Supplier Code of
Conduct was developed
and sent out to our
Supplier Code of Conduct signed % 93 95 64 existing raw material
supplier in Q4 2019. We
are in the process of
collecting the signatures.

Human rights risk mapping

New indicator. All our
Percentage of new suppliers that were Group raw material &
% - - 100
screened using social criteria packaging suppliers are
in scope.
New indicator. All our
Group raw material &
Suppliers located in risk countries % - - 26
packaging suppliers are
in scope.
Percentage of risk suppliers covered by New indicator. Monitoring
% - - -
a valid social audit report starts in 2020.

MEMBERSHIPS OR PARTICIPATIONS
Responsible forestry FSC®
PEFC™
Sustainable consumption SWAN
GOTS
EU Ecolabel
Sustainable supply chains BSCI
Circular business OVAM - Flemish government
Sustainability The Shift
Consumer health & safety EDANA, Group Hygiène, INDA & Ahpma

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GRI INDEX
GRI STANDARD Disclosure Page number(s) and/or URL(s)
GENERAL DISCLOSURES
GRI 101: Foundation 2016
Organizational profile
102-1 Name of the organization Cover
102-2 Activities, brands, products, and services Inner cover
102-3 Location of headquarters p. 160
102-4 Location of operations Inner cover
102-5 Ownership and legal form p. 51
102-6 Markets served p. 20-21
102-7 Scale of the organization Inner cover
102-8 Information on employees and other p. 153
workers
102-9 Supply chain p. 46
102-10 Significant changes to the organization p. 160
and its supply chain
102-11 Precautionary Principle or approach p. 40-41
102-12 External initiatives p. 148 & p. 160
102-13 Membership of associations p. 155
Strategy
102-14 Statement from senior decision-maker p. 5
102-15 Key impacts, risks and opportunities p. 8,9, 79-82
Ethics and integrity
102-16 Values, principles, standards, and norms p. 39
of behavior
102-17 Mechanisms for advice and concerns p. 39
about ethics
GRI 102: General Governance
Disclosures 2016
102-18 Governance structure p. 40-41, 50-82
Stakeholder engagement
102-40 List of stakeholder groups p. 16-17, 149
102-41 Collective bargaining agreements p. 153
102-42 Identifying and selecting stakeholders p. 16-17
102-43 Approach to stakeholder engagement p. 16,17, 146-147, 149
102-44 Key topics and concerns raised p. 16,17, 146-147, 149
Reporting practice
102-45 Entities included in the consolidated p. 118-120
financial statements
102-46 Defining report content and topic p. 160
Boundaries
102-47 List of material topics p. 147
102-48 Restatements of information -
102-49 Changes in reporting p. 160
102-50 Reporting period p. 160
102-51 Date of most recent report p. 160
102-52 Reporting cycle p. 160
102-53 Contact point for questions regarding the p. 160
report
102-54 Claims of reporting in accordance with p. 160
the GRI Standards
102-55 GRI content index p. 156-159
102-56 External assurance -

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MATERIAL TOPICS
GRI 200 Economic standard series
Direct economic impacts
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 48-49
components and evaluation
GRI 201: Economic 201-1 - Direct economic value generated and p. 83-145
performance distributed
201-2 - Financial implications and other risks and p. 79-82
opportunities due to climate change
Anti-corruption
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 39
components and evaluation
GRI 205: Anti- 205-2 Communication and training about anti- p. 39
corruption 2016 corruption policies and procedures
Anti-competitive Behavior
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 39
components and evaluation
GRI 206: Anti- 206-1 Legal actions for anti-competitive behavior,
competitive Behavior anti-trust, and monopoly practices p. 39
2016
GRI 300 Environmental Standards Series
Materials
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 42-43
components and evaluation
301-1 Materials used by weight or volume p. 151
GRI 301: Materials 301-2 Recycled input materials used p. 152
2016
301-3 Reclaimed products and their packaging -
materials
Energy
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 44-45
components and evaluation
302-1 Energy consumption within the p. 151
organization
302-2 Energy consumption outside of the -
organization
GRI 302: Energy 2016 302-3 Energy intensity p. 151
302-4 Reduction of energy consumption p. 151
302-5 Reductions in energy requirements of p. 151
products and services
Emissions
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 44-45
components and evaluation
305-1 Direct (Scope 1) GHG emissions p. 150-151
305-2 Energy indirect (Scope 2) GHG emissions p. 150-151
305-3 Other indirect (Scope 3) GHG emissions p. 150-151
GRI 305: Emissions 305-4 GHG emissions intensity p. 150-151
2016 305-5 Reduction of GHG emissions p. 150-151
305-6 Emissions of ozone-depleting substances -
(ODS)
305-7 Nitrogen oxides (NOX), sulfur oxides -
(SOX), and other significant air emissions
Waste
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 42-43
components and evaluation
306-1 Water discharge by quality and destination No data available
306-2 Waste by type and disposal method p. 152
GRI 306: Waste 2016 306-3 Significant spills -
306-4 Tranport of hazardous waste -
306-5 Water bodies affected by water discharges -
and/or runoff

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GRI 400 Social Standards Series

Occupational Health and Safety
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 36
components and evaluation
403-1 Workers representation in formal joint
management-worker health and safety p. 153
committees
403-2 Types of injury and rates of injury,
occupational diseases, lost days, and p. 154
GRI 403: Occupational absenteeism, and number of work-related
Health and Safety 2016 fatalities
403-3 Workers with high incidence of high risk of -
diseases related to their occupation
403-4 Health and safety topics covered in formal -
agreements with trade unions
Training and Education
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 35
components and evaluation
404-1 Average hours of training per year per p. 154
employee
GRI 404: Training and 404-2 Programs for upgrading employee skills p. 35
Education 2016 and transition assistance programs
404-3 Percentage of employees receiving regular -
performance and career development reviews
Diversity and Equal Opportunity
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 3, 35, 56
components and evaluation
GRI 405: Diversity and 405-1 Diversity of governance bodies and
Equal Opportunity employees p. 153
2016
Human rights
GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 36-37, 39, 46
components and evaluation
GRI 407: Freedom of 407-1 Operations and suppliers in which the right
association & to freedom of association and collective p. 36-37, 39, 46
collective bargaining bargaining may be at risk
GRI 408: Child labour 408-1 Operations and suppliers at significant risk p. 36-37, 39, 46
for incidents of child labour
GRI 409: Forced or 409-1: Operations and suppliers at significant p. 36-37, 39, 46
compulsory labour risk for indicidents of forced or compulsory labor
GRI 411: Rights of 411-1: Incidents of violations involving rights of -
Indigenous people indigenous people
412-1: Operations that have been subject to p. 36-37
human rights reviews or impact assessments
GRI 412: Human 412-2: Employee training on human rights -
Rights Assessment policies or procedures
412-3: Significant investment agreements and
contracts that include human rights clauses or p. 46
that underwent human rights screening

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Local Communities

GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 38
components and evaluation
413-1 Operations with local community
engagement, impact assessments, and p. 38
GRI 413: Local development programs
Communities 2016
413-2 Operations with significant actual and -
potential negative impact on local communities
Supplier Social Assessment

GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 46
components and evaluation
414-1 New suppliers that were screened using p. 21, 155
GRI 414: Supplier social criteria
Social Assessment
2016 414-2 Negative social impacts in the supply chain -
and actions taken
Customer Health and Safety

GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p.47
components and evaluation
416-1 Assessment of the health and safety p.48
impacts of product and service categories
GRI 416: Customer
Health and Safety 2016 416-2 Incidents of non-compliance concerning
the health and safety impacts of products and -
services
Marketing and Labeling

GRI 103: Management 103-1 - 3 Explanation of the material topic and its
Approach 2016 Boundary, management approach, its p. 47
components and evaluation
417-1 Requirements for product and service p. 47
information and labeling
GRI 417: Marketing 417-2 Incidents of non-compliance concerning -
and Labeling 2016 product and service information and labeling
417-3 Incidents of non-compliane concerning -
marketing communications

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INVESTOR RELATIONS AND

FINANCIAL COMMUNICATIONS
OUR AIM IS TO PROVIDE RELIABLE, CONSISTENT INFORMATION ON A
TIMELY BASIS ABOUT THE STRATEGY, GOALS AND PROGRESS OF ONTEX
TO ALL FINANCIAL MARKET PARTICIPANTS. SINCE OUR IPO IN JUNE 2014,
WE ARE CONTINUOUSLY BUILDING OUR INVESTOR RELATIONS PROGRAM.

1. SHAREHOLDER STRUCTURE
The shareholder structure of the Company on December 31, 2019 1 was, based on the transparency declarations received by the
Company, as follows:

Shareholders Shares %2 Date threshold crossed

Groupe Bruxelles Lambert SA 16,454,453 19.98% December 3, 2018
ENA Investment Capital 8,562,481 12.53% 3 November 6, 2019
Morgan Stanley 4,202,626 5.10% December 3, 2019
Janus Capital Management LLC 3,424,055 4.75% November 10, 2018
The Pamajugo Irrevocable Trust 2,722,221 3.64% February 29, 2016
CIAM 2,614,990 3.18% September 10, 2019

2. SHARE PERFORMANCE
Our share is listed on Euronext Brussels. Performance of the Ontex share compared with market indices and hygienic disposable
manufacturers:

3. FINANCIAL CALENDAR 2020

Financial Calendar 2020 Date
Quarter 1 2020 May 6, 2020
Annual General Meeting of Shareholders May 25, 2020
Half Year 2020 July 30, 2020
Quarter 3 2020 November 4, 2020

1
Updates subsequent to December 31, 2019 are described on our website (https://ontex.com/investors/leadership).
2
Percentage based on the outstanding share capital of the Company at the time of the declaration.

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GLOSSARY
Description
Adjusted Profit (or Adjusted Profit (or Adjusted Basic Earnings) is defined as profit for the period plus non-
Adjusted Basic recurring income and expenses and tax effect on non-recurring income and expenses,
Earnings) attributable to the owners of the parent.
Adjusted Basic Earnings Adjusted Basic Earnings per share are defined as Adjusted Basic Earnings divided by the
per share weighted average number of ordinary shares.
Adjusted EBITDA Adjusted EBITDA is defined as EBITDA plus non-recurring income and expenses
Adjusted EBITDA margin Adjusted EBITDA margin is adjusted EBITDA divided by revenue.
Free Cash Flow Free cash flow is defined as net cash generated from operating activities (as presented in the
consolidated cash flow statement, i.e. including income taxes paid) less capital expenditures
(Capex, defined as purchases of property, plant and equipment and intangible assets), less
repayment of lease liabilities and including cash (used in)/from disposal.
EBITDA EBITDA is defined as earnings before net finance cost, income taxes, depreciations and
amortizations.
Like-for-like (LFL) Like-for-like revenue is defined as revenue at constant currency excluding change in scope of
revenue consolidation or M&A.
LTM adjusted EBITDA LTM adjusted EBITDA is defined as EBITDA plus non-recurring income and expenses for the
last twelve months (LTM).
Net Financial Debt Net financial debt is calculated by adding short-term and long-term debt and deducting cash
and cash equivalents.
Net financial debt/LTM Net financial debt divided by LTM Adjusted EBITDA.
adjusted EBITDA ratio
(leverage)
Non-recurring income Income and expenses classified under the heading “non-recurring income and expenses” are
and expenses those items that are considered by management not to relate to transactions, projects and
adjustments to the value of assets and liabilities taking place in the ordinary course of activities
of the Company. Non-recurring income and expenses are presented separately, due to their
size or nature, so as to allow users of the consolidated financial statements of the Company to
get a better understanding of the normalized performance of the Company. Non-recurring
income and expenses relate to:
- acquisition-related expenses;
- changes to the measurement of contingent considerations in the context of business
combinations;
- changes to the Group structure, business restructuring costs, including costs related to the
liquidation of subsidiaries and the closure, opening or relocations of factories;
impairment of assets and major litigations.

Non-recurring income and expenses of the Group for the years ended December 31 are
composed of the following items presented in the consolidated income statement:
- income/(expenses) related to changes to Group structure; and
- income/(expenses) related to impairments and major litigations.
Working Capital The components of our working capital are inventories plus trade, pre-paid expenses and other
receivables plus trade payables, accrued expenses and other payables.

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ABOUT THIS REPORT

EACH YEAR ONTEX PUBLISHES AN INTEGRATED REPORT COVERING THE
ECONOMIC, ENVIRONMENTAL AND SOCIAL ISSUES THAT MATTER MOST
TO US AND OUR STAKEHOLDERS. OUR LATEST REPORT WAS PUBLISHED
ON APRIL 3, 2019.

This report contains financial and non-financial information for the period January 1, 2019 to December 31, 2019, unless otherwise
specified. It encompasses our operations in 12 countries as well as our headquarters in Aalst, Belgium, which together employ
~10,000 people. Some manufacturing sites and offices do not report all social or environmental data, and in these cases the type
of data they report may differ from site to site. See the notes in Sustainable Performance 2019 chapter (p. 150-155).

We have used the Global Reporting Initiative (GRI) Standards (Core option) with reference to the Sustainable Development Goals
(SDGs) to guide us in preparing this report. GRI is the international standard for sustainability reporting. The SDGs define global
sustainable development priorities and aspirations for 2030 and seek to mobilize global efforts around a common set of goals and
targets.
Disclaimer: This report may include forward-looking statements. Forward-looking statements are statements regarding or based
upon our management’s current intentions, beliefs or expectations relating to, among other things, Ontex’s future results of
operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. By
their nature, forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results or
future events to differ materially from those expressed or implied thereby. These risks, uncertainties and assumptions could
adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained
in this report regarding trends or current activities should not be taken as a report that such trends or activities will continue in the
future.
This report represents the directors’ report prepared in accordance with article 3.32 §1 of the Belgian Company Code. In most of
the tables of this report, amounts are shown in € million for reasons of transparency. This may give rise to rounding differences in
the tables presented in the report. This report has been prepared in English and translated into Dutch. In the case of discrepancies
between the two versions, the Dutch version will prevail.

The Ontex leadership team has validated this report.

Contact details
INVESTOR CONTACTS
Philip Ludwig
Head of Investor Relations and Financial Communications
+32 53 333 730
[email protected]

PRESS CONTACTS
Gaëlle Vilatte
Head of Corporate Communications
+32 53 333 708
[email protected]

SUSTAINABILITY CONTACTS
Elise Barbé
Group Sustainability Specialist
+32 53 333 756
[email protected]

Send us your feedback: https://ontex.com/contact or [email protected]

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164 ONTEX INTEGRATED ANNUAL REPORT 2019
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For enquiries and additional
information, please contact:
ONTEX
Korte Keppestraat 21
B-9320 Aalst
Erembodegem
Belgium
Tel.: +32 53 333 600
www.ontexglobal.com