Slide 1: Investor Update
INVESTOR UPDATE June 21, 2021
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: Return to Value Creation Progress Update
RETURN TO VALUE CREATION PROGRESS UPDATE Esther Berrozpe Chief Executive Officer INVESTOR UPDATE JUNE 21, 2021 3
Slide 4: Ontex Turnaround Progress Update
ONTEX TURNAROUND PROGRESS UPDATE Growth opportunities with value to be captured Six strategic priorities with short term turnaround agenda Focus has been on implementing actions Progress gives confidence on ambition level, despite short term challenges Long term strategy to be further developed INVE
Slide 5: Ontex Key Facts & Figures
ONTEX KEY FACTS & FIGURES Household & Personal Care 10% 110 Distribution Countries Adult Care €2.1bn 33% Turnover 56% 10 000 Employees 19 Production Baby Care Feminine Baby Care Feminine Care facilities Care Adult Care Other INVESTOR UPDATE JUNE 21, 2021 5
Slide 6: Categories with Growth Opportunities
CATEGORIES WITH GROWTH OPPORTUNITIES VALUE ADDED TRENDS GROWING CATEGORY RESILIENT CATEGORY & PREMIUM OFFERINGS 2.8% ONTEX exposure CAGR Global Hygiene market size (Bn€) 85 68 19% 6.1%* Adult Care 32% 3.4%* Fem Care 49% 4.6%* Baby Care Smart choices Convenience Lifestyle brands Homecare 2015 2020 E-
Slide 7: Our Scale Is a Key Asset
OUR SCALE IS A KEY ASSET 2.0x 3.5x 2.8x Clear leader in Europe Retailer Brands in all three personal hygiene categories: 2.4X larger than number 2 Baby Care Adult Care Feminine Care Estimated share in Europe Retailer Brands and delta towards #2 player #2 in Europe #1 or 2 brand portfolio #1 partner
Slide 8: Our Operations Footprint Enables Proximity to Customers, Flexibility and Scale
OUR OPERATIONS FOOTPRINT ENABLES PROXIMITY TO CUSTOMERS, FLEXIBILITY AND SCALE GERMANY BELGIUM RUSSIA POLAND FRANCE CZECH REPUBLIC SPAIN UNITED STATES ITALY TURKEY ALGERIA PAKISTAN MEXICO ETHIOPIA BRAZIL AUSTRALIA Ontex Production facility Ontex R&D Center of Excellence/Hub INVESTOR UPDATE JUNE 21,
Slide 9: Important Challenges to Fix
IMPORTANT CHALLENGES TO FIX CUSTOMER < FOCUS COMPLEXITY < COST INVESTOR UPDATE JUNE 21, 2021 9
Slide 10: Ontex Turnaround Progress Update
ONTEX TURNAROUND PROGRESS UPDATE Growth opportunities with value to be captured Six strategic priorities with short term turnaround agenda Focus has been on implementing actions Progress gives confidence on ambition level, despite short term challenges Long term strategy to be further developed INVE
Slide 11: 6 Strategic Priorities
6 STRATEGIC PRIORITIES PORTFOLIO CUSTOMER PRODUCT OPERATIONAL FOCUS CENTRICITY INNOVATION EXCELLENCE Simplify the business Strengthen Accelerate Improve cost & product portfolio customer relations cadence of competitiveness & restore growth innovation & service levels ENVIRONMENT & Set clear long-te
Slide 12: Translated into a Focused Agenda
TRANSLATED INTO A FOCUSED AGENDA Focused New culture Key Enablers Portfolio Roll out new organization Turnaround Europe Retailer Deliver flexibility at best cost model and performance culture Brands Maximize value creation Outperform in North America through Innovation Grow our business in emerging
Slide 13: Ontex Turnaround Progress Update
ONTEX TURNAROUND PROGRESS UPDATE Growth opportunities with value to be captured Six strategic priorities with short term turnaround agenda Focus has been on implementing actions Progress gives confidence on ambition level, despite short term challenges Long term strategy to be further developed INVE
Slide 14: Focus on Execution
FOCUS ON EXECUTION New leadership New organization New remuneration Cost Out in Refinancing team in place deployed policy implemented Progress underway Stabilizing Europe Building assets Profitable growth Refocused Innovation Sustainability goals in the US in Emerging to support growth and initiativ
Slide 15: New Leadership Team in Place
NEW LEADERSHIP TEAM IN PLACE Esther Berrozpe Peter Vanneste Vincent Crepy Laurent Nielly Chief Executive Officer Chief Financial Officer Chief Supply Chain Officer President Europe Division Armando Amselem Astrid De Lathauwer Annick De Poorter Jonas Deroo President AMEAA Division Executive Vice-Pres
Slide 16: Streamlined Organization with Clear Accountabilities
STREAMLINED ORGANIZATION WITH CLEAR ACCOUNTABILITIES TODAY PREVIOUSLY 2 Divisions: Europe & AMEAA 3 Divisions: mix of geography & channels, duplicated organizations Delayered organization to gain agility and speed of decision making Product portfolio ownership delegated locally Centralized ownership
Slide 17: One Operating Model for the Entire Business
ONE OPERATING MODEL FOR THE ENTIRE BUSINESS PROXIMITY Category expertise and Winning customer centricity Fast follow propositions innovation AFFORDABILITY FLEXIBILITY Best value offering Customer differentiation with Deployment common product platforms at scale INVESTOR UPDATE JUNE 21, 2021 17
Slide 18: New Remuneration Policy Implemented to Drive Performance Culture
NEW REMUNERATION POLICY IMPLEMENTED TO DRIVE PERFORMANCE CULTURE TODAY PREVIOUSLY Clear separation of KPIs in short- and long-term Multiple rewards for the same outcomes plans T2G incentive plan stopped Impact of FX excluded from KPIs Net Sales LFL, Profit and Cash as reported Complex mix of instrum
Slide 19: Three Concrete Cost-Out Programs Already Delivering Results
THREE CONCRETE COST-OUT PROGRAMS ALREADY DELIVERING RESULTS 2021 2022 2023 1 Operations Productivity 2 Capacity Optimization 3 Overheads Savings INVESTOR UPDATE JUNE 21, 2021 19
Slide 20: Starting to Reverse the Trend in Europe
STARTING TO REVERSE THE TREND IN EUROPE Net impact of balance of Gain and Losses on revenue (Europe Retail) Customer centricity Innovation cadence, service and quality Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Cost Competitiveness 2019 2020 2021 2022 Confirmed net “order-book” as of June Net Impact of
Slide 21: Gradually Improving Our Positions in E-Commerce
GRADUALLY IMPROVING OUR POSITIONS IN E-COMMERCE Omnichannel “e-places” Direct To Consumer PurePlays & Marketplaces E-CATEGORY & E-TRADE INVESTOR UPDATE JUNE 21, 2021 21
Slide 22: USA Market with Attractive Growth Profile
USA MARKET WITH ATTRACTIVE GROWTH PROFILE Second largest personal care market worldwide, growing +2-3% Adult Care growing +6-7% Lifestyle brands gaining share €3.5B €13B Growing > market CAGR +2.5% Retailer & distributor Hygiene market Retailer brands still have headroom for growth and Lifestyle bra
Slide 23: Building Assets in North America
BUILDING ASSETS IN NORTH AMERICA Agile ‘coast-to-coast’ operations ‐ North Carolina plant to ramp up H1 2022 ‐ New Baby Care production lines; Integration of Feminine Care production assets ‐ Modular approach to support growth ‐ Only supplier with both East and West Coast production capabilities Add
Slide 24: Focus on Profitable Growth Leveraging Current Positions in Emerging Markets
FOCUS ON PROFITABLE GROWTH LEVERAGING CURRENT POSITIONS IN EMERGING MARKETS ONTEX BRANDS POSITIONS* Baby Care Adult Care 01 Leverage growth opportunity with our strong Mexico #2 #2 brands to drive margin & cash Brazil #3 #2 02 Support retailer brands development: leading Turkey #4 #1 supplier in Mex
Slide 25: Refocused Innovation Portfolio to Our Growth Priorities
REFOCUSED INNOVATION PORTFOLIO TO OUR GROWTH PRIORITIES Launch: Smart diaper solution for Adult Incontinence Contribute to well-being of users, families and caregivers alike Reduce time staff spend on continence care, freeing up time and budget for other essential care tasks Reduce environmental imp
Slide 26: Deploying Our Sustainability Agenda
DEPLOYING OUR SUSTAINABILITY AGENDA FOUR PILLARS Circular solutions Commercial initiatives deployed on circular economy Recycling: Delivery and collection of recycling used diapers from nurseries Sustainable Supply Chain Composting: Innovative concept with a re-usable pant and a compostable insert C
Slide 27: What Is Changing?
WHAT IS CHANGING? RIGOROUS ON CRITICAL REVIEW OF ONE PLATFORM COST PRODUCTIVITY GEOGRAPHICAL & AND CASH SUPPLY FOOTPRINT INVESTOR UPDATE JUNE 21, 2021 27
Slide 28: Ontex Turnaround Progress Update
ONTEX TURNAROUND PROGRESS UPDATE Growth opportunities with value to be captured Six strategic priorities with short term turnaround agenda Focus has been on implementing actions Progress gives confidence on ambition level, despite short term challenges Long term strategy to be further developed INVE
Slide 29: 2021 Outlook
2021 OUTLOOK Key Priorities actioned in 2021 Stable LFL revenue in 2021, with growth starting in Q2 Sharply increasing commodities, with high volatility Partially offset by Cost Saving Programs, that are strongly delivering Working on further measures to mitigate raw materials €55M non-recurring cha
Slide 30: 2023 Ambitions
2023 AMBITIONS LFL sales growth Adjusted EBITDA Leverage ratio <3x of 2-3% p.a. margin of 12.5%-13.5% INVESTOR UPDATE JUNE 21, 2021 30
Slide 31: Ontex Turnaround Progress Update
ONTEX TURNAROUND PROGRESS UPDATE Growth opportunities with value to be captured Six strategic priorities with short term turnaround agenda Focus has been on implementing actions Progress gives confidence on ambition level, despite short term challenges Long term strategy to be further developed INVE
Slide 32: Financial Priorities
FINANCIAL PRIORITIES Peter Vanneste Chief Financial Officer INVESTOR UPDATE JUNE 21, 2021 32
Slide 33: Financial Discipline to Deliver the Turnaround Agenda
FINANCIAL DISCIPLINE TO DELIVER THE TURNAROUND AGENDA COST-OUT PROGRAMS DISCIPLINED STRONG AND for Cost Competitiveness INVESTMENT STEADY CASH and Margin Expansion in the Growth Pools to reduce Leverage Operations Productivity Selective pricing Step up capital allocation investments to support manag
Slide 34: We Are Driving Concrete Pillars to Drive Cost Out
WE ARE DRIVING 3 CONCRETE PILLARS TO DRIVE COST OUT 2021 2022 2023 €120M saving by 2023 1 Operations Productivity Year on year productivity gains >2% Off-set raw material impact, Reinvestment into growth & Margin 2 10 pts utilization expansion Capacity Optimization improvement Non-recurring charges
Slide 35: Operational Productivity and Resizing Organization Drives €120M Savings
OPERATIONAL PRODUCTIVITY AND RESIZING ORGANIZATION DRIVES €120M SAVINGS 3-YEAR NET SAVINGS Design to Procurement Manufacturing Logistics Overheads Value Scale advantage, Improve Overall Trucks fill rates Qualify alternative Streamline structure & through platform Equipment Effectiveness Localize pro
Slide 36: Productivity as One of the Crucial Levers to Mitigate Impact of Forex and Commodity Indices
PRODUCTIVITY AS ONE OF THE CRUCIAL LEVERS TO MITIGATE IMPACT OF FOREX AND COMMODITY INDICES Raw Materials Indices & Forex impact on EBITDA 2019-2021, €M 48 Productivity Drumbeat 17 Geographical Footprint -16 Pricing & Mix management, including contracting -74 Working Capital optimization New Remuner
Slide 37: Restoring Growth Through Disciplined Investment
RESTORING GROWTH THROUGH DISCIPLINED INVESTMENT EUROPE AMEAA Low single-digit LFL growth Mid single-digit LFL growth Re-gain contracts Strong growth in North America Lifestyle & Retailer Brands with added assets Fair share in fast growing product segments, channels and customers, especially in Adult
Slide 38: Capital Allocation & Group-Wide 'Cash Is King' Program
CAPITAL ALLOCATION & GROUP-WIDE ‘CASH IS KING’ PROGRAM TO DRIVE CASH CONVERSION RETURN MINDSET TO RUN RATE GROUP-WIDE Working CAPEX MANAGEMENT < 4% CASH IS KING PROGRAM Capital YoY of sales improvement 3YR CAPEX roadmap as guide Dedicated Working Capital Network Team ‐ Aligned with Strategic Agenda
Slide 39: Reduce Leverage <3x with Refinancing in Progress
REDUCE LEVERAGE <3X WITH REFINANCING IN PROGRESS Leverage Ratio (x) Net Debt/ Adjusted EBITDA 3.86 3.44 3.51 3.60 <3 Execute EBITDA Plan Return Mindset to CAPEX management Group Wide ‘Cash is King’ Working Capital program 31-Dec-18 31-Dec-19 31-Dec-20 31-Mar-21 31-Dec-23 Refinancing 470M€ Banks’ com
Slide 40: Accelerating Execution in 2021 Is Imperative Considering Commodities & Forex
ACCELERATING EXECUTION IN 2021 IS IMPERATIVE CONSIDERING THE IMPACT OF COMMODITIES & FOREX Indices evolution, Jan 2020 = 100 280 SAP: C3, Europe Implementation started. Non-Recurring costs of €55M in 2021 SAP: C3, US 260 (operations and organization restructuring) PP, Europe 240 PP, US LDPE, Europe
Slide 41: Strong Short-Term Mobilization of Mitigating Actions
STRONG SHORT-TERM MOBILIZATION OF MITIGATING ACTIONS Pricing Plans Own Brands Commercial Smart Tender Price Investment Europe to stop contract loss Mix & Trade Spend Optimization Accelerate Organization Redesign implementation. Hiring Freeze Design to Value initiatives Cost Production efficiency Mar
Slide 42: 2023 Ambitions
2023 AMBITIONS LFL sales growth Adjusted EBITDA Leverage ratio <3x of 2-3% p.a. margin of 12.5%-13.5% INVESTOR UPDATE JUNE 21, 2021 42
Slide 43: Esther Berrozpe
Esther Berrozpe Chief Executive Officer INVESTOR UPDATE JUNE 21, 2021 43
Slide 44: Key Takeaways: Restoring Value Creation
KEY TAKEAWAYS All building blocks in place and execution underway Attractive growth opportunities to capture Clear roadmap to restoring sound financial structure Restoring Value Creation INVESTOR UPDATE JUNE 21, 2021 44
Slide 45: Return to Value Creation Progress Update
RETURN TO VALUE CREATION PROGRESS UPDATE INVESTOR UPDATE JUNE 21, 2021 45