Slide 1: Q2 & H1 2020 results
Q2 & H1 2020 results July 30, 2020
Slide 2: Forward-looking statements
Forward-looking statements This Presentation 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 conditi
Slide 3: Table of contents
Table of contents H1 2020 Highlights 04 T2G Progress Report 10 H1 2020 Financial review 13 Current prospects for Q3 2020 22 Appendix 25 Confidential 3
Slide 4: H1 2020 Highlights
H1 2020 Highlights Strong progress in an unprecedented environment Thierry Navarre, CEO
Slide 5: Strong progress in an unprecedented environment
Strong progress in an unprecedented environment Meaningful profitability improvement; T2G ramping up • Meaningful improvement in H1 operating performance thanks to mobilization of all Ontex employees and business partners to mitigate the pandemic’s disruptions to operations • Lower market demand wei
Slide 6: H1 2020 financial highlights
H1 2020 financial highlights Key financials H1 2020 Q2 2020 Group revenue: €1,092 million, down 2.0% LFL • Strong Q1, Q2 marked decrease in April-May with June improving LFL revenue LFL revenue • Positive price/mix in all categories -2.0% -10.5% • Reported revenue down 5.5% Adjusted EBITDA: €126 mil
Slide 7: Operating in an unprecedented environment – market trends
Operating in an unprecedented environment – market trends Europe tracked retail channel sales growth Jan-Feb March April May 23.6% 19.9% +11.1% 11.6% 4.3% -1.9% -8.6% -8.8% -12.2% -15.1% -13.9% -19.9% Babycare Adult Inco Femcare Babycare Adult Inco Femcare Babycare Babycare Adult Inco Femcare Adult
Slide 8: US expansion strategy advances
US expansion strategy advances • New greenfield plant and feminine care acquisition in North Carolina demonstrate Ontex’s commitment to further develop North American business • Strategic location: Approximately half the U.S. population lives within a 1,000 km/650-mile radius, complements shipments
Slide 9: H1 2020 Innovations
H1 2020 Innovations New products across all categories BABYCARE - DIAPER FEMCARE – ULTRA TOWEL FEMCARE - PACKAGING ADULT INCO – PADS SeconDRY® Genius Core Lens effect packaging Light Inco Pads Extension Instant dryness system Smart Channel For tampons New sizes ▪ New liquid handling system ▪ Integra
Slide 10: T2G Progress Report
T2G Progress Report Ramping up and delivering value Thierry Navarre, CEO
Slide 11: After successful start of T2G implementation in 2019, continuous progress in 2020
After successful start of T2G implementation in 2019, continuous progress in 2020 COVID-19 world 2019 2020 2021 ✓ Rolled out updated T2G governance, ✓ Increase the focus on ✓ Institutionalize the new capabilities, and tracking processes transformational projects, tools & processes to continue interd
Slide 12: T2G's €49m gross gains are driving the performance improvement
T2G’s €49m gross gains* are driving the performance improvement of Ontex, despite some execution challenges in an uncertain environment Boost Operational Efficiency Drive Commercial Excellence STRATEGIC PROCUREMENT Facing challenges on implementation in context of COVID-19 • Direct and indirect proc
Slide 13: H1 2020 Financial review
H1 2020 Financial review Meaningful profitability improvement Charles Desmartis, CFO
Slide 14: LFL revenue decrease of 2% in volatile demand environment
LFL revenue decrease of 2% in volatile demand environment Group revenue review H1 2020 Sales bridge (€m) • H1 2020 LFL revenue: €1,091.7 million, -2.0% -5.5% reported • After volume surge in March mainly in Europe and the US, Q2 demand decreased in tracked channels impacted by: -2.0% LFL • customers
Slide 15: Category review
Category review • H1 2020 Babycare revenue: €590 million, -5.1% LFL LFL sales growth • Category sales strongly impacted in Q2 after the surge recorded in March due to lockdown measures H1 2020 Q2 2020 • Lower consumption patterns as consumers were largely % reported confined throughout Q2 group sale
Slide 16: Europe: Lower sales reflect wide quarterly sequential swing in market demand
Europe: Lower sales reflect wide quarterly sequential swing in market demand Volume decrease, stable price/mix Europe (42% of Group revenue) • H1 2020 LFL revenue: €447 million, -4.7% Revenue (€m) and evolution (LFL and reported) -5.8% reported • Strong surge in March followed by lower sales during
Slide 17: Americas, Middle East, Africa and Asia: Sales slightly ahead vs. high comparable
Americas, Middle East, Africa and Asia: Sales slightly ahead vs. high comparable Positive price/mix, lower volumes on contrasting demand patterns AMEAA (37% of Group revenue) • H1 2020 LFL revenue: €427 million, +0.9% Revenue (€m) and evolution (LFL and reported) -6.9% reported • Americas sales up o
Slide 18: Healthcare: Resilient sales in challenging environment
Healthcare: Resilient sales in challenging environment Healthcare (21% of Group revenue) • H1 2020 LFL revenue: €218 million, -2.0% Revenue (€m) and evolution (LFL and reported) -2.0% reported • Sales down overall in institutional channels • Entirely due to temporary suspension of a large institutio
Slide 19: Adjusted EBITDA: Meaningful increase driven by T2G and lower raw material indices
Adjusted EBITDA: Meaningful increase driven by T2G and lower raw material indices H1 2020 Adjusted EBITDA bridge (€million) 14.4% T2G impact: €49m -10 margin 25 -10 -5 -8 12.0% 10.0% 46 -32 margin margin -3 16 158 126 111 -5 Procurement Gains Other Operational Workstreams H1 2019 Volume &Price/Mix I
Slide 20: Non-recurring expenses improving strongly
Non-recurring expenses improving strongly H1 2020 Income statement impact H1 2020 H1 2019 change In millions of Euro • Non-recurring expenses in the income statement amounted to Group reorganization, acquisition integration (1.2) (6.6) +5.4 €10.8 million in H1 2020 vs. €39.6m in prior year. and rest
Slide 21: Free Cash Flow in line with Prior Year excluding T2G specific outflows
Free Cash Flow in line with Prior Year excluding T2G specific outflows In millions of Euro H1 2020 H1 2019 change H1 2020 EBITDA 115.1 71.5 +43.6 • Free cash flow of +€28.7 million, net of -€25 million in T2G- Non-cash from operating activities (5.2) 12.7 -17.9 related cash outflows (€21 million for
Slide 22: Q3 prospects
Q3 prospects Thierry Navarre, CEO
Slide 23: Q3 prospects
Q3 prospects • Considering the persisting uncertainties related to the pandemic and its impacts on our business, in particular on the evolution of demand in our markets, we are not in a position to provide projections for the balance of 2020. In this challenging context, we remain focused on support
Slide 24: Q&A
Ontex~ tex Q&A
Slide 25: Appendix
Appendix
Slide 26: Evolution of raw material indices
Evolution of raw material indices Oil derivatives tending down until recently; fluff pulp rising sequentially Non-Woven Fluff Pulp 125 150 125 100 100 75 75 Super-Absorbent Polymer (SAP) Polyethylene 150 125 125 100 100 75 75 50 50 Appendix Confidential 26
Slide 27: Year-on-year evolution of main currencies versus euro
Year-on-year evolution of main currencies versus euro Unfavorable devaluations started in February 2020 Brazilian real Turkish Lira Mexican Peso Russian Rouble US Dollar H1 Q2 H1 Q2 H1 Q2 H1 Q2 H1 Q2 -3% -2% -4% -10% -10% -13% -19% -19% -25% -34% BRL H1 BRL Q2 TRY H1 TRY Q2 MXN H1 MXN Q2 RUB H1 RUB
Slide 28: Alternative Performance Measures
Alternative Performance Measures The following alternative performance measures (non-GAAP) have been included in this presentation since management believes that they are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and li
Slide 29: Thank you
Thank you