Ontex Group NV — Annual Report 2017

Apr 25, 2018

^FRE E TRANSLATI O N FO R I N FO RMATIO NAL PU RPOSES

Ontex Group Public limited Company Korte Keppestraat ²¹ 9320 Erembodegem BTW BE 0550 880 915 RPR Dendermonde (the "Company")

BOARD OF DIRECTORS REPORT OF NV ONTEX GROUP TO THE ORDINARY SHAREHOLDERS MEETING oF MAY 25,2OL8

1. General

The Board of Directors presents you the separate annual accounts and reports to you in respect of its management during the financialyear started on January t,2017 and ended on December 3t,20L7.

2. Introduction

The Group - Ontex Group NV

Our teams delivered a strong LFL revenue in 20L7, ahead of our markets despite very competitive conditions. This growth is across all 3 categories, and we gained share in most of our markets, including our leading position in European retailer brands. Our Mature Market Retail had a particularly strong performance, and confirmed the strengths we have built over decades in these markets after some temporary challenges faced in 2016.

Our efforts to drive this strong revenue growth to adjusted EBITDA largely mitigated significant input cost and FX headwinds and capacity constraints. However, the Brazilian business acquired last year impacted overall group profitability. While disappointing, we have taken appropriate actions and will continue to do so, and remain confident in the long-term opportunity for Ontex from this foothold in a major personal hygiene market. Going forward, we will have significant recurring benefits to earnings and cash flows from a successful debt refinancing.

3. Comments to the statutory accounts per December 3t,2Ot7

3.1 Financialyear

The financial year started on January I, 2OL7 and ended on December 31, 2017, which is a period of L2 months.

3.2 Balance Sheet

The most important sections are disclosed here below

The section 'Formation expenses' amounts to € 2,L94,975 and consist out of the issuance costs of the new shares issued in view of the capital increases realized in 2015 for an amount of € 77L,327 and 2Ot7 for a total amount of € L,423,648.

The section 'lntangible fixed assets' mainly consists of a merger goodwill resulting from the simplification of the company structure in 2015 for an amount of € 59,399,455. Aside from the merger goodwill, this section also includes the concessions and licenses for the SAP and Microsoft software for an amount of €I2,57O,O24.

The section 'Tangible fixed assets' amounts to € 2,553,4L8 and mainly consists out of lT servers and lT related material (€2,472,L581.

The section 'Financial fixed assets' includes the participation of Ontex Group NV in Ontex BVBA for an amount of €t,9O7,965,289. The section'Financial fixed assets'also includes receivable positions on affiliated companies for an amount of € l-,051-,324,8L8 and guarantees for an amount of € 150,897 per December 31,2017 .

The section 'Amounts receivable within one year - trade debtors' amounts to € 67,301,96L and consists mainly of factored trade receivables.

The section 'Amounts receivable within one year - Other amounts receivable' amounts to € 52,LL5,977 per December 3L, 20t7 and consists mainly of current accounts with other members of the Ontex Group, which are managed on a daily basis and on which monthly interests are charged.

The accrual accounts of the assets mainly include accrued interests of the above mentioned loans.

The section 'Current investments - Own shares' consists out of an amount of € 29,254,624 of own shares. The group implemented a full hedgíng program through a total return swap on June 1,20L5 for the share bases payments LTIP 2OI4, LTIP 2015, LTIP 2016 and LTIP 2017. This was extended per June L,2Ot7. As a consequence Ontex Group recognized treasury shares for the above mentioned amount.

De section'Capital'amounts to € 823,587,466, represented by 82,347,218 shares without nominal value.

On March 22, 20L7, the Board of Directors decided to increase the capital through a contribution in kind , by the issuance of 7,486,LLO new ordinary shares at a share price of €29.5 per share. As a consequence the Board of Directors confirmed a capital increase by contribution in cash for an amount of €74,87L.581 (excluding a share premium amounting to € 145,968,664) from €748,715,886 to €823,587,466 represented by 82,347,218 shares.

The 'Share premium' amounts to € 472,742,t42 per December 3I,2OI7 which is an increase compared to December 31,2O'J.6 as ^aresult of the capital increase described above.

The section 'Reserves' amounts to € 32L,329,248 per December 3L,2OL7 and consists out of the following reserves:

• Legal Reserve for an amount of €29,660,L84.

This reserve was established based on art. 616 of the Belgian company code. Each year, the annual shareholders should allocate at least 5% of the net result to a legal reserve. The obligation to provide for this reserve ends when 10% of the issued capital is reached.

Unavailable reserves for own shares for an amount o1€29,254,624 ln view of the recognition of own shares, the company formed an unavailable reserve in accordance with art. 623 of the Belgian company code. An unavailable reserve should be formed equal to the value of the own shares included on the balance sheet of the company.

Untaxed reserve for an amount of € 675,443

Available reserves for an amount of €26I,738,997

The section'Provisions for other liabilities and charges'amounts to€7,O57,I48 and consists of the provision in view of the Long Term lncentive Plan (LTIP), based on a combination of stock optíons and restricted stock units. For more information on this incentive plan, we refer to chapter 15.5 of this report.

The section 'Amounts payable after more than one yea/ amounts to € 793,630,523 per December 37, 2OL7 and is composed of Senior Term Loan Facilities (€ 600,000,000 and € 150,000,000); loans received from members of the Ontex Group (€ L8,000,000) and a loan issued by ING in view of the total return swap (€ 25,630,5231for share based payments.

The section'Amounts payable within one year'amounts f.o€397,628,697 and mainly consists out of the outstanding debt in view of the factoring agreements in place of all the members of Ontex Group (€ 154,066,93L), revolving credit facility (€ 30,000,000) trade debt (€ 6,284,5431, tax payables (€ 1-,069,6721 and payables with regard to remuneration and social security (€ 2,397,4391.

The section 'other amounts payable' amounts to € 203,8L0,LL3 and mainly consists out of current accounts with other members of the Ontex Group (€ L54,333,451) and the dividend to be paid (€49,408,33L).

The accruals and deferred income consists mainly of the accrued interests on the mentioned loans.

3.3 lncome Statement

The operational loss amounts to € 22,384,497 at the end of 2OL7 , aside from the management costs of the group in2017, it is mainly composed of the depreciation expenses on the merger goodwill for an amount of €29,699,728.

The financial result at the end of 2017 amounts to a gain of € 27,505,157. This is mainly the result of the receipt of a dividend from Ontex BVBA (€29,933,183) and interests calculated on loans issues to different members of the group (€33,0L4,6L8).This gain was partially compensated by the interest charge on the mentioned debt, costs for bond early redemption and current account positions with the different members of the Ontex group.

The company closes the year 2017 with a gain of € 3,330,33L.

4. Reporting & Analysis required by Article 96 S 1, 1" Belgian Companies Code.

With regard to the analysis & reporting requirement as stated in Article 96 9l-, 1" of the Belgian Companies Code, the following can be stated:

Considering the activity of the company, rendering of services within the Ontex group, the company stand alone is not exposed to operational risks other than those applicable for the Ontex Group. For an overview of the risks and uncertainties of the Ontex Group, we refer to chapter 19 of this report.

5. Events after the end of the reporting period ended December 3L, 2Ot7 (Art¡cle 96 S 1 ,2" Belgian Companies Code)

There are no significant events after the reporting period that could have a significant impact on the annual accounts per December 31,,20t7, presented in this report.

6. Circumstances that may have a material impact on the development of the company (Art¡cle ⁹⁶S 1,3'Belgian Companies Codel

Unless mentioned otherwise in this report, no circumstances have occurred that could affect the company's development considerably.

7. Research and Development expenses (Art¡cle 96 S 1, 4' Belgian Companies Code)

Given the holding activity of the company, there were no significant expenses related to research and development in 2017.

8. Information in relation to branch offices (Art¡cle 96 S 1, 5 Belgian Companies Code)

The company does not have any branches.

9. Financial lnstruments (Article 96 91,8'Belgian Companies Code)

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate-, foreign exchange rate- and commodity price risks. Therefore interest rate CAP contracts are used to limit the interest charges on the long term loans with variable interest rate.

During 2Ot7, the group decided to enter into interest rate SWAP's and commodity hedging contracts for the raw material prices. The policy related to the currency risk hedging was followed appropriately.

The group also entered into a full hedging program for the share based payments 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.

10. Acquisition own shares

The company has own shares per December 3t,2OI7 for an amount of €29.254.624 and were obtained in view of the full hedging of the share based payments. We refer to paragraph 3.2 of this report.

11. Compliance with the 2009 Belgian Code on Corporate Governance (Art¡cle 96 92, 1o& 2" Belgian Companies Code)

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 Corporat 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 96 92,2", of the Belgian Companies Code. The Company complies with all provisions of the Corporate Governance Code, except in respect of the followíng:

• 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 2OI4, L-llP 20L5 as well as the LTIP 2016 and 2017, as described within the Remuneration Report, provides for a vesting period of three years for the stock options and RSUs;
• The CEO and certain other members of the Management Committee are entitled, in certain circumstances, to a 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 Remuneration Report for a detailed description thereof). ln 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 26,2OLS 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.

12. Capital and Shareholders

L2.L Capital and capital evolutions during ²⁰¹⁷

As at December 3L, 2Ot7,lhe 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 t/82.347.2I8th of the capital and carries one vote. The shares are lísted on Euronext Brussels.

On March 22,2OI7, the Board resolved to increase the share capital in the framework and within the limits of the authorized capital, through a capital increase in kind as described below..

The Company has entered into a transaction (the "Ontex Brazil Transaction") whereby it, through Ontex BVBA, a wholly-owned subsidiary of the Company, and certain subsidiaries of Ontex BVBA, has directly or indirectly acquíred all outstanding shares of Falcon Distribuidora Armazenamento E Transporte, a Brazilian company which manufactures disposable hygienic products ("Falcon").

As a consequence of the above, on March 22,2Ot7, the Board confirmed the realization of a capital increase in kind in an amounlof €74,87L,580.58 (excluding issue premium in an amount of €145,968,664.42), from €748,715,885.80 to €823,587,466.38, represented by a total number of 82,347,2t8 shares.

ln addition, the Board approved in 2OI7 a new grant under the Long Term lncentive Plan (as defined below) (the 20L7 grant being referred to as the "LTIP 2017"1. ln 2OL4, the Company adopted a Long Term lncentive Plan approved by the Board and the Shareholder Meeting on June 3, 2014 and June 10, 20L4 respectively (the "Long Term lncentive 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 lncentive Plan, in 20L4, 2OL5,2OL6 and 20L7 (respectivelythe "LTIP 20L4", the "LTIP 2Ot5", the "LTIP 2OL6", the "LTIP 2OL7", and the Long Term lncentive Plan including the LTIP 2014, the LTIP 20L5, the LTIP 2016 and the LTIP 20L7 being referred to as the "LT|P"). The stock options and RSUs granted under the LTIP do not confer any shareholder rights, and the shares to be delivered to participants upon exercise of their stock options or upon vesting of their RSUs 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 2017 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 2014 vested as from 31July 2OL7.ln order to meet its obligations thereunder, Ontex has partially exercised a forward purchase agreement with the following cha racte ristics:

D at e	of N be um r	S ic ik tr pr e e	H i gh t es	Lo t es w
	sh ar es		ic pr e	ic pr e
O ri gi ll na y	27 4 ,4 39	.O € 29 70	* 28 .6 85	* 2 5 .8 00 €
d te en re
in to 21 o n
20 15 Ju l y

* 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 .O7O was determined.

More details about the vested Stock Options and RSUs can be found in the remuneration report

More details about the forwards purchase agreement can be found in the financial statements, note 7.4.6.

Pursuant to the above, on December 312077,208,291shares of the Company were held by the Company. On December 3L ²⁰¹⁷, Ll-,185,038 shares of the Company were registered shares (aandelen op naam).

12.2 Shareholderevolutions

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, 2OO7 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"1 and the Royal Decree of February 14, 2OO8 on the disclosure of significant shareholdings, are set at 3Yo, syo, 7.5%, LO% and any subsequent multiples of 5%.

ln the course of 2017, the Company received the following transparency declarations:

On January 25, 2OI7, the Company received a transparency declaration from Allianz Global lnvestors GmbH stating that, on January 20,2OL7, it crossed below the threshold of 3% of the total number of voting rights in the Company.

On February 9, 2Ot7 BlackRock, lnc., and its affiliated entities, notified the Company that BlackRock, lnc. and Blackrock lnvestment Management (UK) Limited had, as ^aresult of sales of shares, crossed below the threshold of 5% and 3% respectively, of the total number of voting rights in Ontex.

On March 2,2017, BlackRock, lnc., and its affiliated entities, notified the Company that BlackRock, lnc. had, as a result of sales of shares, crossed below the threshold of 3% of the total number of voting rights in Ontex, excluding equivalent financial instruments.

On June 20,20t7, Allianz Global lnvestors GmbH notified the Company that it had acquired 2,521.,427 shares in Ontex and so had crossed the threshold of 3% of the total number of voting rights in Ontex to 3,06%.

On June 22,2017, Norges Bank notified the Company that it had, as a result of sales of shares, crossed below the threshold of 3% of the total number of voting rights in Ontex.

On June 30,2017, Black Creek lnvestment Management lnc. notified the Company that it holds, as a result of the acquisition of voting securities orvoting rights, 2,612,528 shares in Ontex and so had crossed the threshold of 3% of the total number of voting rights in Ontex to 3.I7%.

On October 3,2OL7, Aviva plc, and its affiliated entities, notified the Company that Aviva plc had, as a result of sales of shares, crossed below the threshold of 3o/o of the total number of voting rights in Ontex, excluding equivalent financial ¡nstruments.

We refer to our website for transparency declarations received after December 2Ot71

^thttp ://www. o ntexgl o ba l. co m/Sh a re I nfo rm ati o ⁿ

Shareholder structure

Based on the transparency declarations received by the Company, the shareholder structure of the Company as at December 3L,2OI7, was as follows:

S ha ho ld re er s	S ha re s	Yo 2	th sh ld D at ed re o e c ro ss
S A 3 G B lle La be rt ro up e ru xe s m	LL ,2 39 ,8 97	L I 5 ,0 %	M 77 O L6 2 ay
C C L M C ita l t Ja an ag em en nu s ap	3 ,4 24 ,0 55	5% 4 .7	N be 10 20 15 ov em r
lrr ab le T he P aj ev oc am ug o T st ru	L 2 ,7 22 ,2 2	% 3. 64	29 F eb 20 16 ru ar y
C ek l Bl k tm t re nv es en ac M t ln an ag em en c.	2 ,6 L2 28 ,5	% 3. 17	27 O J e2 LT un
G lo ba l l A lli G to bH an nv es rs z m	2, 52 42 7, 7	% 3. 06	16 2O L7 J un e
l A XA tm t M SA nv es en an ag er s	2 ,0 53 ,2 36	.O 3 2 %	A 20 14 7 t ug us

13. Dealing and disclosure code

On June 3,201,4, the Board approved the Ontex Dealing and Disclosure Code (the "Dealing and Disclosure Code") in accordance with provision 3.7 of the Corporate Governance Code. The Dealing and Disclosure Code was subsequently amended on April 2,2Ot5 and most recently on June 28, 201-6. 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.

²Percentage based on the number of outstanding shares in the capital of the Company at the time of the declaration

³The actual percentage of GBL per 31 December 2O!7 is equal to !9,98%io

14. Risk management and internal controlframework (Art¡cle 96I2, 13" Belgian Companies Code)

t4,l lntroduct¡on

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;
• Achievingoperationalexcellence;
• Ensuring correct and timely financial reporting; and
• Compliance with all applicable laws and regulations.

L4.2 ControlEnvironment

t4.2.t 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 dayto-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.

14.2.2 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, Ontex Code of Ethics, the Anti-Bribery Policy, the Antitrust Policy, 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 sufficíent risk management and control at all levels and in all areas of the organization.

t4.2.3 Group-wide ERP system

The main portion of the Group ent¡ties 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.

t4.2.4 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.

L4.2.5 Control activities

Control measures are in place to minimize the effect of risk on the Ontex Group's ability to achieve its objectives. These control activities are embedded in the Ontex Group's key procfsses 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.

ln 2OL6, an lnternal Controls Manager was appointed to facilitate the further development of control activities in a structured way. Key legal compliance areas are monitored for the entire Ontex Group by Local Compliance Coordinators, the Head of Compliance, the Legal Compliance Manager and the Compliance Steering Committee. The Legal Compliance function supports the adoptíon of clear processes and procedures with respect to (i) the Code of Conduct and the Anti-Bribery Policy (ii) Antitrust Policy, and (iii) insider trading, the Dealing and Disclosure Code, and other listing obligations. The 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 legal compliance issues and action plans. The Compliance Steering Committee reports on its activities to the Management Committee.

ln 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.

L4.2.6 lnformation 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.

t4.2.7 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:

• lnternal Audit. The tasks and responsibilities assigned to lnternal Audit are defined in the lnternal Audit Charter, which has been approved by the Audit and Risk Committee. The key mission of lnternal Audit as defined in the lnternal 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. ln the context of its review of the annual accounts, the statutory auditor focuses 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 lnternal 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 15.5.1 of this Corporate Governance statement.

1'4.2.8 Risk management and internal control with regard to the process of financial report¡ng

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-wide ERP systems and management informat¡on tools allow the central controll¡ng 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 www.ontexglobal.com/ca lenda r.

15. Remuneration Report

15.1 Remuneration policy and procedure for the Board of Directors

The remuneration of the Non-Executive members of the Board was amended by approval of the shareholders' meeting of May 25, 20L6 as proposed by the Board of Directors, upon recommendation of the Remuneration and Nomination Committee. lt took into account the responsibilities and the commitment of the Board members to develop the Ontex Group and was intended to attract and retain individuals who have the necessary experience and competencies for this role.

Pursuant to this shareholders' resolution the following remuneration policy was approved:

• Non-Executive Board member retainer: €60,000 paid out annually to each Non-Executive member of the Board of Directors, other than the Chairperson of the Board of Directors;
• Non-Executive Board member attendance fee: €2,500 paid out to each Non-Executive member of the Board of Directors, other than the Chairperson of the Board of Directors, for each Board meeting attended;
• Board Chairperson retainer: €L20,000 paid out annually to the Chairperson of the Board of Directors;
• Board Chairperson attendance fee: €5,000 paid out to the Chairperson of the Board of Directors for each Board meeting attended;
• Committee member attendance fee (with respect to the Remuneration and Nomination Committee respectively Audit and Risk Committee): €2,500 paid out to each Non-Executive Committee member, other than the Chairperson of the relevant Committee, for each Committee meeting attended;
• Committee Chairperson retainer (with respect to the Remuneration and Nomination Committee respectively Audit and Risk Committee): €10,000 paid out annually to the Chairperson of each Committee; and
• Committee Chairperson attendance fee (with respect to the Remuneration and Nomination Committee respectively Audit and Risk Committee): €4,000 paid out to the Chairperson of each Committee for each Committee meeting attended in his or her capacity of Chairperson of such Committee.

These amounts are excluding any applicable VAT

ln addition, Non-Executive Directors benefit from the D&O Policy, described under chapter 15.6 of this Corporate Governance Statement.

The remuneration of the Executive Directors is described below under chapter 15.6 of this Corporate Governance Statement. None of the Executive Directors received any director fee.

Going forward, the remuneration policy will be reviewed on a regular basis by the Remuneration and Nomination Committee in line with prevailing market conditions for listed companies in Belgium and

companies of similar size in an equivalent FMCG market.

Na m e	Fu tio nc n	Pa id F ee
Re lu BV BA va e ,	f t he C ha irm B rd an o oa	€ 20 0, 00 0
d M is te bv rte L re pr es en so n uc	ln de nd D ire t ct pe en or
ln B ts B VB A, ge oe	f h A d i d R i t t C ha irm o e a n u s a n	k L € 31 ,5 00
d ln B te by ts re pr es en ge oe	C itt ee om m
	ln de nd D ire t ct or pe en
Te G bH Su iss ga co n m e ,	f h t C ha irm o e R io a n at an em un er n	d € 12 8, 50 0
d te by G Jo ha re pr es en n un na r ns so	C N in at io itt om n om m ee
	ln de nd D ire t ct pe en or
Uw Kr e ug er	ln de nd di t ct pe en re or	€ 85 ,0 00
G ilb M ín Ju to Q ui er ar nt an er o	N -E tiv D ire ct on xe cu e or	€ 87 ,5 00
Aa lst ad Re si	ln de nd D ire t ct pe en or	42 00 € ,s
M ic ha el B da el re	N -E tiv D ire ct on xe cu e or	42 ,5 00 €

on rre remuneration overview

L5.2 Remuneration policy and procedure for the Executive Management Team

The Company's remuneration policy for the Management Committee was developed in order to attract, motivate and retain talent executives, who have the necessary drive to deliver results toward our growth ambitions. The remuneration policy aims at creating high performance culture to achieve long-term profitable growth. Growth is defined by financial growth, but also in terms of organizational transformation and people development. To achieve this goal, the Management Committee members are evaluate against business objectives and people development objectives

The structure of the executive remuneration package is based upon the following principles:

Base salaries for the members of the Management Committee are rev¡ewed annually by the Remuneration and Nomination Committee. The salary adjustments, following approval by the Board, become effective as of January L each year. As part of this annual exercise, the Remuneration and Nomination Committee considers:

• ' The average salary increase in the country in which the executive is employed;
• . The market positioning of the execut¡ve's compensation package;
• . The different tenure and experience of each executive;
• . Changes in the scope and responsibility of the executive; and
• . The executive's individual performance.

The target short term var¡able remuneration ("bonus") of the members of the Executive Management Team is at least 5O% of their fixed base salary. The target percentage is based on the level of each executive. An important part of the bonus is linked to the group performance and the divisional performance and achievement of the growth targets. The shareholders' meeting has granted the Company the authority to deviate from the requ¡rements in relation to variable remuneration included in Article 520ter of the Belgian Companies Code, as recorded ¡n Art¡cle 30 of the Articles of Association and as further described within section 7 of this Corporate Governa nce Statement.

The composition of the bonus is as follows:

. A70% (or 8O% for the CEO) collective part determined by financial objectives that are required to achieve the Company's long term plan and growth ambition. For the General Managers of divisions, the70% is split into 35% group and35% divisional objectives. ln2OL7, the targets were revenue, EBITDA and free cash flow. These targets are decided by the Board. The payout of this part of the bonus is based on the achievements of the business targets. Below g0% of the achievements of the targets, no bonus is paid out. ln addition, this part of the bonus is capped at ^amaximum of LSO%.

. A 30% (or 2O% for the CEO) individual part determined by the achievement of the individual business and people development objectives. Every member of the Management Committee agrees these objectives with the CEO and the Chairman of the Board at the start of the

performance year. The objectives for the CEO are agreed with the Chairman of the Board. This part of the bonus is calculated based on the performance evaluation of each executive at the end of the year. The evaluation scores are recommended by the CEO and approved by the Board, upon recommendation of the Remuneration and Nomination Committee. The performance score for the CEO is recommended by the Chairman, upon consultation with the Remuneration and Nomination Committee and approved by the Board. The payout of this part of the bonus is also capped at tSO%.

15.3 Fixed and short term variable remuneration 2Ot7 of the CEO (total cost)

Fixed base remuneration: 915.456€.

• . 2Ot7 short term variable remuneration (paid out in 20L8): 357.028 €.
• . Aggregate other elements of remuneration (medical insurances, car perks): 64.794 €.

There are no pension contributions or other elements of remuneration within the meaning of Article 96, 53, 6", c) and d), of the Belgian Companies Code, except for the Long Term lncentives Plan grant described under chapter L5.5 of this Corporate Governance Statement and the D&O Policy described under chapter 15.6 of this Corporate Governance Statement.

The assessment of performance is based on audited results and the evaluation of the Board of the individual performance of the CEO. There is no deferral with respect to the variable remuneration or claw back provision in case such variable remuneration would have been granted on the basis of inaccurate financial data. The decrease of the CEO's remuneration for 2017 compared to 201-6 is due to the reduction of the short term variable remuneration.

15.4 Fixed and short-term variable remuneration 2Ot7 for the members of the Management Committee (excluding the CEO)

• . Aggregate fixed base remuneration 4.265.756€
• . Aggregate 2017 short term variable remuneration (paid out in 2018): 1.L86.902€.

. Aggregate pension entitlements (defined contribution plan structure) and life and disability insurance contributions: 352.31-5€.

. Aggregate other elements of remuneration (medical insurance, company cars, a.o.): 235.603€.

ln addition, the members of the Management Committee benefit from the D&O Policy, described under chapter 15.6 of this Corporate Governance Statement.

The assessment of performance is based on audited results and the recommendation of the CEO with respect to his evaluation of the individual performance of the Management Committee members. There is no claw back provision or deferral with respect to the variable remuneration in case such variable remuneration has been granted on the basis of inaccurate financial data. The figures are based on real remuneration paid, taking into account entry date in the company. The decrease of the remuneration for 2OL7 compared to 20L6 is due to the reduction of the short term variable remuneration.

15.5 Long Term lncentives

ln 2Ot7 the Company implemented the LTIP 2Ot7, which consists of a combination of stock options and RSUs.

A RSU is the ríght to receive from the Company one share in the Company per vested restricted stock unit, for no consideration. The RSUs vest not less than three years after the grant date. A stock option gives 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. ^A stock option can only be exercised not less than three years after the grant date, in accordance with the principle set out in Article 520ter of the Belgian Companies Code. The vesting of the stock options and RSUs is subject to certain condítions, such as the participant remaining in service until the vesting date. The evolution of the share price between grant and vesting or exercise has been considered to be the relevant performance indicator and the vesting of the LTIP 2016 award is thus not subject to specific performance conditions. The number of RSUs and stock options granted to the members of the members of the Executive Management Team/Management Committee in 2OI7 and the aggregate amount of outstanding options and RSUs for the LTIP can be summarized as follows:

C ha rle Bo zi s ua z	10 .3 68	7. 86 8	.O 45 52	38 .9 30
A in i Ph ilip st go pe	3. 09 8	r.4 84	13 .4 63	7. 34 3
öz gü r A ky ild iz	2. 7L 6	1. 82 2	11 .8 01	9. 01 8
A le A do m se m rm an ,	3. 42 5	0	t4 .8 82	0
La Bo d t ur en nn ar	2. 44 3	T 9L .4	10 .6 16	7, 37 9
A rid st La th D au er e w	2. 43 0	1. 39 9	10 .5 59	6. 92 2
A ic k P De rte nn oo r	2. L4 4	1. 32 9	9. 31 6	6, 57 6
M tin G är tn ar er	1. 89 1	t2 4 t.	8 .2 t8	5. 56 1
Xa vi L br ht er am ec	2. 7L L	1. 49 8	LL 79 .7	7. 41 4
Th ie N rrv re av ar	4. 82 8	3. 3s 9	20 .9 79	16 .6 20
O ria P ne er re au x	L. 70 5	98 0	7. 40 8	4. 84 9
Ja Pu od rn e cq ue s	4. 32 7	2. 98 0	18 .8 02	14 .7 47
M ric io T au ro nc os o	3. 32 2	0	74 .4 36	0
Th ie V ia le rry	1. 94 2	L. 42 7	8. 44 0	7. 06 L

15.6 D&O Policy

Ontex Group NV has entered into a Directors and officers insurance policy (the "D&O Policy") covering claims that would be made against any of the insured persons, subject to certain exceptions. lnsured persons are, among others, natural persons who qualify as (i) a director or officer or (ii) an employee while acting in a managerial or supervisory capacity, of Ontex Group NV and/or of any of its subsidiaries.

t5,7 TerminationProvisions

Charles Bouaziz, Artipa BVBA (Thierry Navarre) and Cepholli BVBA (Jacques Purnode) may claim ^atermination indemnity in lieu of notice of up to 12 (3 for Cepholli) months fixed remuneration plus bonus and a non-compete (and/or additional termination) indemnity of up to L2 months fixed remuneration.

The other members of the Management Committee have different contractual termination provisions depending on their personal situation and (where applicable) employment location, whereby contractual termination compensation is however (contractually) capped within the limits of article 554 of the Belgian Company Code. The maximum total contractual non-compete provision combined with applicable contractual termination indemnit(y)(ies) is 18 months. Hence all contractual termination provisions, as set out below are fully in line with Belgian corporate governa nce regulations.

N am e	C al tr tu tic on ac no e tit le t en m en	C l t t o n ra c u a te no n- co m pe nd /o ad di tio l in io te at a r na rm n in de ni t m y
A rid D st La La th t Bo d, e au er ur en w nn ar , B V B A ( X ie M ), La br ht O ria ar ex av r m ec ne P hi li A in i, T hi Pe st V ia le pp e rre au x, go er ry , A þ ild iz Ö M ric io T ür au ro nc os o, zg	3 th m on s	l2 th m on s
A ic k De P rte nn oo r	3 th m on s	th 15 m on s
M tin G är tn ar er	th 12 m on s	th 6 m on s
m A do A le rm an m se	90 al da da c en r ys	th 9 m on s

15.8 lnformation about the remuneration policy in the coming two years

ln 2015 and 2016, the Remuneration and Nomination Committee reviewed the competitiveness of the total remuneration for the different levels in the organization.

The Committee reviewed and discussed an extensive benchmark study by Mercer, a global benefits consulting firm, with respect to medical, death & disability and pension benefits for all employees and all countries in the Ontex group. Based on the results of this study, a roadmap was developed for those countries where our current benefits coverage is below the median of the local market.

ln 20L7, the Remuneration and Nomination Committee also contracted with Willis Towers Watson, a global advisory for executive reward, to benchmark the Ontex remuneration

practices. This study reviewed the competitiveness of the total remuneration levels of the members of the Management Committee at Ontex, in comparison to:

• A sample of companies which are active within the FMCG sector and which are comparable in size (measured in terms of revenues and number of employees) for total direct compensation (total target cash compensation plus the expected value of long term incentives).
• BEL20 as a validation of the market levels resulting from the ¡nternational peer comparison group and as a frame of reference for the main perquisites and retirement & related risk benefits.

On a total compensation basis this benchmarking study showed that Ontex was lagging behind the benchmark for some Management Committee members. The Committee therefore has decided to recommend an enhancement of the remuneration package of some Management Committee members, in order to align the remuneration levels with the median of the market. This adaptatíon may be implemented over a multi-year period.

The Remuneration Committee has also initiated discussions on a potentialchange of the LTIP as from 2019 onwards. The current LTIP has been approved for a 5 year period, ending in 2018. ln the course of 2Ot8, the Remuneration Committee will make a recommendation for a new LTIP plan. ln this context, the Committee will investigate the optimal way of linking the output of the LTIP to the long-term performance of the company.

16. Board and Board Committees (Art¡cle 96 52,5'Belgian Companies Codel

16.1 Board composition

Pursuant to the Corporate Governance Code, at least half of the directors should be nonexecutive 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 Corporate Governance Code. The composition of the Board as at December3L,2OLT complies with these recommendations.

N e am	M da te an	O th da te pe r e r m an s lt2 l2 O 3 .t t7	M da at an si e nc	M nd t a aa pi ex re s
R al B V BA ev ue , d te b re pr es en y M is Lu rte n so c	C ha irm an , in de nd t pe en d ire ct o r	, C lio B N V N V o re ar co , G IM V , R tic el N V ec , S nd in ia T ob ac co ca av n G up ro	20 L4	20 L8
R iA al ad st eg	ln de nd t pe en D ire ct o r	A D in he t O ro p ce an	L7 20	2 0 2 t
ln B ts ge oe BV BA , d te b re pr es en y ln B ts ge oe	ln de nd t pe en D ire ct o r	lc Ec ol is Eu cl p r on op ro ea , W lth M t NV ea an ag em en , M t N V an ag em en , L Q R F a ZW , V SC C B V BA rta op	20 1, 4	20 18

On December 37,2077, the Board was composed as follows:

		A lti jd V V B da ro uw an re , & ef B its Ri sk en
C ha rle Bo zi s ua z	C ef hi Ex iv ut ec e O ff ic er	Bu si S ch l ES SE C ne ss oo A lu ni A is d Le m m e s , V ls T rie t du au er re e ve s, rt PA I p a ne rs	20 1, 4	L8 20
M ic ha el B da el re	N on Ex iv ut ec e D ire ct o r		20 L7	20 2 1
T S ui eg ac on e ss G bH m , d te b re pr es en y G un na r Jo ha ns so n	ln de nd t pe en D ire ct o r	La in rk ed st et AS er gs ve	20 L4	20 L8
U K rlì w e ge r	ln de nd t pe en D ire ct o r	I P A ko tn SU S ar er s, gg re pl N le S is c, uc ar w s C is si on om m	L4 20	20 18
A i rt B V BA pa , d te b re pr es en y T hi N er ry av ar re	C hi ef O tin pe ra g O ff ic er		L4 20	20 18
C ho lli B V BA ep , d te b re pr es en y Ja P de cq ue s ur no	C hi ef Fi ia l na nc O ff ic er	M in 's Jo hn rt B ie a re w er s	20 14	20 18
G ilb to Ju er an M rin Q ui a nt o er	N on iv ut ex ec e D ire ct o r	M be of he W rld t em r o um Ec ic F on om or	20 L6	20 20

Jonas Deroo was appointed as corporate secretary by the Board on May 8,2OL5

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, lndependent Director, Chairman. Luc Missorten was appointed as lndependent Director of Ontex Group NV as of June 30, 20L4. On April LO, 2015, Luc M issorten was appointed Chairman, in replacement of Paul Walsh. On May 26,2015, Revalue BVBA, with Luc Missorten as its permanent representative, was appointed as lndependent 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. ln the past, Luc Missorten served as a Vice President of Citibank from 1981 to L990 and held the function of Corporate Finance Director for lnterbrew from 1990 to 1995. From 1-995 to L999, he served as CFO for Labatt Brewing Company. Afterwards, Luc Missorten held the function of CFO at lnterbrew (now AB lnBev) 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 2OL4, he resigned as Chief Executive Officer from Corelio but remains a board member of Corelio to date. Currently, Luc Missorten is also an lndependent

Director of Barco, chairs its audit committee and is a member of its remuneration committee. ln addition, he is an lndependent Director of GIMV, where he chairs the audit committee. Further, Luc Missorten is an lndependent Director at Recticel, where he chairs the audit committee and is a member of its remuneration committee. Luc Missorten is also an lndependent Director at Scandinavian Tobacco Group. He is as well an independent board member at Mateco.

lnge Boets, lndependent Director. lnge Boets BVBA, with Ms. Boets as its permanent representative, was appointed as lndependent Director of Ontex Group NV as of June 30, 2014. Ms. Boets currently also serves as Chairman of the Audit and Risk Committee. She holds a master degree in applied economics from the University of Antwerp, Belgium. Ms. Boets 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, Ms. Boets is also an lndependent Director at Euroclear, Econopolis Wealth Management, VZW Altijd Vrouw, and and Chairs the Board of Triginta and QRF. Finally, lnge Boets BVBA, with Ms. Boets as its permanent representative, is director of Van Breda Risk & Benefits and La Scoperta BVBA .

Regi Aalstad. Regi Aalstad has over 25 years of experience in global fast moving consumer goods. 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 ²⁰¹⁴held leadership roles in emerging markets. Ms. Aalstad chairs the humanitarian organization 'A Drop

in the Ocean', supporting refugees in Greece. She advises and help found digital start-ups from Switzerland, where she resides. Ms. Aalstad 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 lnternational Business from University of Michigan, USA.

Michael Bredael. Michael Bredael is lnvestment 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 2OO7. Mr. Bredael held various lnvestment Banking positions at BNP Paribas, across different offices (New York, Paris, Brussels and London), particularly focusing on cross-border M&A transactions. From 20L4 to 2016, he was Head of the M&A Execution Group of BNP Paribas London. Mr. Bredael holds a masters degree in applied economics from EHSAL (today KU Leuven)

Charles Bouaziz, Chief Executive Officer. Charles Bouaziz joined the Ontex Group in January 20L3, and was appointed as an Executive Director of Ontex Group NV as of April24,2Ot4.

Charles Bouaziz graduated from École Supérieure des Sciences Economiques et Commerciales (ESSEC). Prior to joining the Ontex Group, Charles Bouaziz held a number of

senior positions during his 25 years in the consumer goods industry. He spent his early career at Michelin (in Canada) and Procter & Gamble before joining PepsiCo in 1"991. Charles Bouaziz joined PepsiCo as Marketing Director of France & Belgium and in 1996 became General Manager for France. ln 2006, he became General Manager of a group of countries including France, Germany, ltaly, Switzerland and Austria. ln 2008, Charles Bouaziz was appointed President of PepsiCo Western Europe. ln 2010, he left PepsiCo and became CEO of Monoprix. Charles Bouaziz joined PAI Partners in 2010 as member of the Food & Consumer Goods sector team and later as head of the Portfolio Performance Group. ln addition, Charles

Bouaziz is President of the ESSEC Business School Alumni and also holds a posítion at Les Amis de Vaulserre et du Trieves.

Gunnar Johansson, lndependent Director. Gunnar Johansson was appointed as lndependent Directorof Ontex Group NV as of June 30,201-4. GunnarJohansson was appointed Chairman of the Remuneration and Nomination Committee on April 70,2015, replacing Luc Missorten. On May 26, 20L5, Tegacon AS, with Gunnar Johansson as its permanent representative, was appointed as lndependent 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 fast moving consumer goods ("FMCG"). Prior to starting Tegacon Suisse GmbH, he held a number of positions within SCA AB, a global company in the tissue, feminine care, 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 Non-Executive Chairman of Laeringsverkstedet, Norway and a member of the board of Hilding Anders in Sweden, and Askona Vek in Russia.

Uwe Krüger, lndependent Director. Prof. Dr. Krüger was appointed as Non-Executive Director of Ontex Group NV as of June 2, 2014. The appointment of Uwe Krüger as lndependent Director was approved by the Annual Shareholders' Meeting held on May 25, 2016. As from 1 January 2018, Uwe Krueger is Head of Business Services and Senior Managing Director at Temasek lNTL., Singapore. Temasek is a leading globally diversified investment company headquartered in Singapore with a net portfol¡o of SS275 billion. Uwe Krüger has been Chief Executive Officer of WS Atkins plc (Atkins) since August 2}tt. He is a physicist who graduated from the University of Frankfurt, Germany, with a PhD in complex system theory. He also studied at Columbia University (New York, USA), the Ecole Normale Supérieure (Paris, France) and at Harvard (Boston, USA). Uwe Krüger has spent the majority of his career leading engineering and consulting organisations globally. He began his career at AT Kearney, followed by leadership positions at Hochtief AG in central and eastern Europe and at Turner lnternational in Dallas, USA. More recently he was Chief Executive Officer of Swiss company, Oerlikon. He joined Atkins from Texas Pacific Group and Cleantech Switzerland. Currently, Uwe Krüger is also on the board of Aggreko plc (Glasgow,

UK), SUSI Partners (Zurich, Switzerland) and the Swiss Nuclear Commission (Zurich, Switzerland). As an honorary professor of physics he lectures at the University of Frankfurt, Germany.

Thierry Navarre, Chief Operating Officer. Thierry Navarre joined the Ontex Group in May ²⁰⁰⁶ as the Group Supply Chain Director and was appointed Chief Operating Officer in February 2009. Artipa BVBA, with Thierry Navarre as its permanent representative, was appointed as an Executive Director of Ontex Group NV as of April24,2Ot4.

Thierry Navarre holds a degree in Business Administration from École Supérieure de Commerce de Nantes (AUDENCIA), France, and also has a master's degree in lndustrial Logistícs from the lnstitut Supérieur de Logistique lndustrielle (Groupe École Supérieure de

Commerce), Bordeaux, France. Before joining the Ontex Group, he was Director of Strategy & Development at lnBev in France (now AB lnBev), between July 2005 and May 2006, and held other senior management positions in supply and distribution at lnBev, between 2001 and 2005. Prior to that, he held various roles in logistics and distribution at Fort James (now Georgia Pacific), between 1997 and 2001, and at Jamont (now Georgia Pacific) between ¹⁹⁹¹ and 1997.

Jacques Purnode, Chief Financial Officer. Jacques Purnode joined the Ontex Group in August 2013, and Cepholli BVBA, with Jacques Purnode as its permanent representative, was appointed as an Executive Director of Ontex Group NV as of Apri|24,20L4. Jacques Purnode holds a degree of Civil Engineer in metallurgy and a Master of Business Administration from the Université de Liège, Belgium. Prior to joining the Ontex Group, Jacques Purnode held a number of senior positions at AB lnBev in various roles in finance as well as in information technology. From 2007, he worked for Coca Cola Enterprises, lnc. in London, where he most recently held the position of CFO for Europe. Currently, Jacques Purnode also holds a position at John Martin's Breweries.

Juan Gilberto Marín Quintero, non-executive director. Juan Gilberto Marin Quintero has been appointed as Non-Executive Directors of Ontex Group NV as from 25 May 20L6. Juan Gilberto Marín Quintero is the founder and former chairman of Grupo Mabe. He holds a degree ín Business Administration from Universidad lberoamericana, Mexico City, Mexico, an MBA from lnstituto Panamericano de Alta Direccion, Mexico City and a postgraduate in lnternational Business from the British Columbia University, Vancouver, Canada as well as ^adiploma 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. ln addition, Juan Gilberto Marín Quintero is 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.

16.2 Board: evolutions in composition during ²⁰¹⁷

On December 31, 20L7,fhe Board of the Company was composed of ten members. With the exception of the CEO, COO and CFO, all Board members are Non-Executive Directors. There are currently 5 lndependent 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), lnge Boets BVBA (with lnge Boets as its permanent representative), Uwe Krüger and Regi Aalstad. Further there are currently two non-executive non-independent directors: Gilberto Marin Quintero and Michael Bredael. The annual shareholders' meeting held on May 24,20L7 appointed Regi Aalstad as independent director and Michael Bredael as non-executive director of the Company upon recommendation of the Board and the Remuneration and Nomination Committee.

16.3 Diversity (Art¡cle 96 52,6'Belgian Companies Code)

Ontex has adopted a diversity policy

ln terms of aims, with respect to all employees, including the board, the management comm¡ttee and the senior management, Ontex recognizes the benefits of having a diverse Board and Leadership Team to enhance the quality of its performance. Secondly, increasing diversity at the Board, Management Committee and senior management is an essential element in supporting the attainment of our strategic objectives and our sustainable development.

ln designing the Board's, Management Committee's and senior management composition, diversity is considered from a number of aspects, including but not limited to gender, age, cultural and educational background, professional experience, skills and knowledge. All appointments will be based on meritocracy, and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, Management Committee or Extended Leadership Team.

As at December 31, 2017, The Company had two female Board members, ie, lnge Boets, as permanent representative of lnge Boets BVBA, and RegiAalstad, representing 2O% 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, among other things taking into account the gender compositíon, in order to obtain that by January 1., 2O2O al 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 51-8bis,53, of the Belgian Companies Code (stating that companies whose securities are admitted for the first time for offering for negot¡at¡on on a regulated market should meet the quota from the first day of the sixth financial year beginning after this admission).

16.4 Functioning of the Board

N e am	nd B rd tte a an ce oa	A nd tt te e a nc e ra
R al B V BA ev ue , d te b M is rte Lu re pr es en y so n c	Ls /L 5	O% LO
C ha rle B iz s ou az	\ / l s s	o% to
C ho lli B V BA ep , d te by J P de re pr es en ur no ac qu es	L4 / Is	3% 93 ,3
A i rt B V BA pa , d T hi te N by re pr es en er ry re av ar	/ ts 7 s	o% rc
ln B ts B V BA ge oe , d te b ln B ts re pr es en y ge oe	Ls l7 s	% LO O
T S ui G bH eg ac on ss e m , d te G b Jo ha re pr es en un na r ns so n y	Ls lL s	0% 10
U K rü w e ge r	3/ 1. Ls	6% 86 ,6
G ilb Ju to M rin Q ui er nt an a o er	t4 / Ls	3% 93 ,3
R iA al ad st eg	6/ ' 6	Ù % to
M ic ha el B da el re	6/ 6	0% 70

During 2Ot7, The Board met 15 times. The attendance rate was as follows:

(1-) 6 meetings of the Board were held since the appointment of Michael Bredael and Regi Aalstad on May 24,2OI7.

On June 28, 2OL6 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 16.5.3. of this Corporate Governance Statement.

Major matters reviewed by the Board duringZOLT include, among others:

• . The integration of Ontex Brazil;
• . Refinancing;
• . 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 M&A projects; and
• . General strategic, financial and operational matters of the Company.

16.5 Board Committees

16.5.1 Audit and Risk Committee

ln compliance with Article 526bis,52 of the Belgian Companies Code and the Corporate Governance Code, all members of the Audit and Risk Committee are non-executive and at least one Director is

independent in accordance with the criteria set out in Article 526ter of the Belgian Companies Code and the Corporate Governance Code.

On December 31.,2OL7, the Audit and Risk Committee was composed as follows:

Na m e		A & R M da te an C itt om m ee	M da te an si nc e	M da te an pi ex re s
ln B B VB A, ts ge oe		f h t C ha irm o e an	20 14	20 18
d ln te by B ts re pr es en ge oe		C itt om m ee ,
		ln de nd t pe en
		D ire ct or
Re lu va e	B V B A	M be em r, ,	20 t4	20 18
te d M is rte by L re pr es en so n uc		ln de nd t pe en
		D ire ct or
Te G bH Su iss ga co n m e ,		M be em r,	20 L4	20 r8
d te by G Jo ha re pr es en un na r ns so n		ln de nd t pe en
		D ire ct or

During 2OL7, the Audit and Risk Committee met eight times. The attendance rate was as follows:

Na e m	A & R C itt om m ee tin m ee gs at te nd ed	A nd tt e a nc C itt ee om m	R t a e e	A & R
ln B ts B VB A, ge oe	8/ 8	0% L0
d te by ln B ts re pr es en ge oe

Re lu BV BA va e , d te M is rte bV L re pr es en so n uc	8/ 8	O% LO
Te Su G bH iss ga co n m e , d te by G r J oh re pr es en un na an ss on	8/ 8	0% L0

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

The Audit and Risk Committee is entrusted with the tasks set out in Article 526bis, 4, of the Belgian Companies Code. lt 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 QL and Q3 trading updates, the key risks, and their role and responsibility.

As required by the Belgian Companies Code, Ontex Group NV confirms that (¡) 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) lnge Boets, as permanent representative of lnge Boets BVBA, Chairman of the Audit and Risk Committee, is an lndependent Director and possesses the adequate expertise and experience in the field of accounting and audit. Reference is made to her biography under chapter 16.1. of this Corporate Governance Statement.

The mandate of PricewaterhouseCoopers Bedrijfsrevisoren BV CVBA ("PwC") as statutory auditorof the Company has been renewed in2Ot7, on May 24,2OL7.

L6.5.2 Remuneration and Nomination Committee

ln compliance with Article 526quater, 52 of the Belgian Companies Code and the Corporate Governance Code, all members of the Remuneration and Nomination Committee are nonexecutive and the majority of the members are independent in accordance with the criteria set out in Article 526ter of the Belgian Companies Code and the Corporate Governance Code.

On December 31, 20L7, The Remuneration and Nomination Committee was composed as follows:

N am e	Po si tio n	M d an at e si e nc	M da an te pi ex re s
Te d Su G bH te iss by ga co n re pr es en e m , G Jo ha un na r ns so n	C nt ur re C h ir of a m a n th e C itt om m ee , ln de nd t pe en D ire ct or	20 14	20 18
Re lu BV BA va e , d te by M is L rte re pr es en so n uc	ln de nd t pe en D ire ct or , fo rm er C h ir of a m a n th C itt e om m ee	20 14	20 18
ln B ed b ts nt B V BA ln ge oe , r ep re se y ge Bo et s	ln de nd t pe en D ire ct or	20 14	20 L8

During 2OL7,lhe Remuneration and Nomination Committee met six times. The attendance rate was as follows:

Na m e	N& R C itt ee om m tin m ee gs nd ed at te	A nd tte an ce R t a e N& R C itt om m ee
Te G Su iss bH ga co n m e , d te by re pr es en G Jo ha n un na r ns so	6/ 6	0% 10
R al B VB A, ev ue d M is te rte by L re pr es en so n uc	6/ 6	o% to
ln B ts B VB A, ge oe d te by ln B ts re pr es en ge oe	61 6	j% to

All members attended all meetings. Astrid De Lathauwer, Group HR Director 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, 55, of the Belgian Companies Code. lt 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 ("KPl's") and targets determined for the 2O17 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 lndependent Directors, all its members being lndependent Directors, and (ii) Luc Missorten, Gunnar Johansson and lnge Boets possess the adequate expertise and experience in the field of remuneration. Reference is made to their biography under chapter L6.1 of this Corporate Governance Statement.

16.5.3 Management Committee

On June 28, 2016, the Board has decided to establish a Management Committee) within the meaning of Article 524bis of the Belgian Companies Code to be effective as of July L,2OL6 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.

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 financialsituation 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 Commíttee 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 Commíttee. ln 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.

N am e	P iti os on	M b e m f o er th e M an ag nt e m e m C om itt e e si nc e	M be em f th e r o M e an ag nt m e C it o m m il te nt e u
C ha rle Bo zi s ua z	f th C ha irm M t e an o an ag em en C itt C hi ef E tiv om m ee e xe cu - O ff ic er	20 13	20 16
P hi li e pp A in i st go	G P C ef t hi d ro cu re m en ro up an O ff S pl C ha in ic er up y	20 13	20 16
O ür A ky rld zg rz	M M id dl G al an ag er e en er - fr nd N h A ic rt D iv ís io Ea st o a a n	20 08	20 16
A do rm an	d P si de A ic nt e re an m er as v
m A le m se	R ai l D iv is io et n	L6 20	2 0 t6
La t ur en B rd on na	G D ire S ct al ro up o r es	L3 20	L6 20
A rid st D e La th au w er	G H R D ire ct o r ro up	L4 20	2 0 t6
A ic k De nn P rte oo r	G D ire ct R & D Q lit ro up o r en ua y	20 09	20 16
A rli B V BA pa se , A ld et m rn au	M M G al at an ag er ur e en er - M rk et R ai l D iv is io et a n	20 L3	20 16

On December 3I,2017, the Management Committee, consisted of the following members:

D lin ls em ou a st va rd i rte ve ge nw oo r 4 ge
M in G är rt tn a er	G M uf rin D ire tu ct ro up an ac g o r	20 09	L6 20
M BV BA a re x , et X ie m av r La br ht ls m ec a st va rd i rte ve ge nw oo ge r	G al M en er an ag er - H lth D iv is io ea ca re n	20 73	20 1, 6
A i rt B V BA pa , T hi et er ry m N ls st av ar re a va rd i rte ve ge nw oo ge r	D ire Ex iv ct C hi ef ut ec e o r - O tin O ff ic pe ra g er	20 09	20 16
O ria ne Pe rr ea ux	G M rk in D ire et ct a g o r ro up	20 13	20 16
C ho lli B V BA ep , et J m ac qu es P de ls ur no a st va rd i rte ve ge nw oo ge r	Ex iv D ire C ut ct hi ef o r ec e - Fi ia lO ff ic na nc er	20 L3	20 L6
M ric io au T ro nc os o	G M al M at e en er an ag er ur - M rk et R ai l D iv is io et a n	20 L7	L em pt se be r 20 L7
T hi V ia le er ry	M G th G al an ag er ro en er w - M rk et D iv is io d S ic tr at a s n an eg D el t ev op m en	20 13	20 1- 6

During 2O17, the Management Committee met monthly and discussed strategic, business, financial and operating matters and Group projects.

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

Charles Bouaziz, Chief Executive Officer. We refer to chapter 1-6.1 of this report.

Philippe Agostini, Group Chief Procurement & Supply Chain Officer

Appointed 2013. 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 lndustriels.

^aMouricio Troncoso has been oppointed as General Manager of the Mature Morket Retoil Divisie, as replacement of Arlipase BVBA.

Armando Amselem, President of the Americas Retail Division

He joined the Ontex group from Vita Coco where he served as Global Chief Fínancial 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 lnvestment 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.

özgür Akyrldrz General Manager of the Middle East North Africa Division Appointed 2OO8 özgür Akyrldrz joined the Ontex Group in 2OO2 as an Assistant Sales and Marketing Manager and was appointed General Manager of the Middle East North Africa Division in May 2008. Before joining the Ontex Group, özgtir was Product Manager at Digiturk A.S in lstanbul, between May 200L and August 2002, and Sales Supervisor, between October 1999 and May 2001. Ozgür holds a degree in Business Administration from Bo[aziçi University, lstanbul, Turkey.

Laurent Bonnard, Group Sales Director. Appointed 201-3. Laurent Bonnard was appointed Group Sales Director for the Ontex Group on September 9,20L3. He has previously held various senior positions within Sales and Marketing in Mars and Quaker. Subsequently he joined PepsiCo as Sales Director for France, and last held the function as VP Business Development for Europe.

Annick De Poorter, Group R&D & Quality Director. Appointed 2009, 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 2009. Before joining the Group, she worked at Libeltex NV in Belgium, and príor to that, she was a Scientific Researcher at the University of Ghent, Belgium. Annick holds a master's degree in Civil Engineering in Textiles from the University of Ghent, Belgium.

Astrid De Lathauwer Group Human Resources Director

Appointed 2014 .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 1.0 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.

Martin Gärtner Group Manufacturing Director. Appointed 2009 Martin Gärtner joined the Ontex Group in t997 as an Assistant Production Manager and was promoted to Group Manufacturing Director in 2009. Before becoming Group Manufacturing Director, Martin held the positions of Production Manager, Plant Manager and General Manager of the Ontex Group. Prior to joining the Ontex Group, Martin spent two years as a trainee at Wirths J. Hygiene GmbH in Germany. Martin holds a Diploma-Kfm. ln Production Technique and lndustrial Controlling from the Technical University in Aachen, Germany.

Xavier Lambrecht General Manager of the Healthcare Division

Appointed 20L4 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 lmperial Tobacco. Xavier holds a master's degree in Commercial Engineering from the University Leuven, Belgium.

Thierry Navarre, Chief Operating Officer. We refer to chapter 16.1 of this report.

Oriane Perreaux, Group Marketing Director. Appointed 2013 Prior to joining the the Ontex Group, Oriane Perreaux was Brand Buílding Director at Carrefour Group, in charge of Baby & Kids Retailer brands for Western Europe. From L998 to 2010, she held a number of Marketing positions at Procter & Gamble, in France first, and as of 2005 in Switzerland, working on Central Eastern Europe and Middle East and Africa regions. Oriane graduated in 1998 from ESCP Europe Business School, Paris, France.

Jacques Purnode, Chief Financial Officer. We refer to chapter 16.1 of this report.

Mauricio Troncoso, General Manager of the Mature Markets Retail Division

Mauricio joined Ontex in 201-7 as General Manager of the Mature Markets Retail Division. Before joining the Group, he was Vice President and Managing Director for Western Europe at Kimberly Clark. Prior to that, he worked at Mead Johnson in Latin America. He started his career at Procter and Gamble where he held a number of different roles for 18 years, initially in Mexico and afterwards in various countries of Latin America, to finish in the P&G headquarters in Cincínnati working in the Personal Health Care division. Mauricio holds a bachelor's degree in ActuarialSciences (Applied Math)from the Universidad Anahuac delsur in Mexico.

Thierry Viale General Manager of the Growth Market Division and Strategic Development Appointed 2013 Thierry Viale was appointed as General Manager of the Growth Markets Division and Strategic Development on October L, 20L3. Prior to joining the Ontex Group, Thierry held a number of senior positions at Procter & Gamble ¡n Western Europe, Russia, Nigeria/ West Africa, Greater China, the Balkans and in lndia. Thierry holds a degree of the Saint Cyr Military Academy, a degree from the Neoma Business School, and a degree from ESCP Europe.

17. Relevant information in the event of a takeover bid

Article 34 of the Royal Decree of November 1.4,2007 on the obligations of íssuers of securities which have been admitted to trading on ^aregulated market, requires that listed companies disclose certain items that may have an impact in the event of a take-over bid.

t7.l CapitalStructure

^Acomprehensive overview of our capital structure as at December 31, 201.6 can be found in chapter 12 of this report.

17.2 Restr¡ct¡ons on transfers of secur¡t¡es

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 restrictions imposed by Belgian law except in the framework of market abuse rules.

L7.3 Holders of securities with special control rights

There are no holders of securities with special control rights

t7.4 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 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's set out in the Remuneration Report.

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

t7.5 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 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.

17.6 Rules on appointment and replacement of members of the Board and amendments to the Articles of Association

The term of office of directors under Belgian law is limited to six years (renewable) but the 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.

L7.7 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 applicatíon 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 capital is represented. lf 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 capital represented at the shareholders' meeting. As a general 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 cla use.

t7.8 Authorized capital - Acquisition of own shares

Authorized capital

On June LO,20L4, the extraordinary shareholders' meeting authorized the Board, subject to and with effect as from the closing of the lPO, to increase the capital of the Company in one or several times by an (aggregate) amount of maximum 5O% of the amount of the registered capital (€340,325,414) as such amount was recorded immediately after the closing of the lPO. 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 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"), i.e., five years from July 9, 2074. On November 9, 2OL5, 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 amounÌ. of €73,902,592.521, from €680,650,828 to €721,,489,864.68 as described in chapter 11. of th¡s report.

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,O21.I2 (excluding issue premium in an amount of €48,45L,722.681, from €721,489,864.68 to €748,715,885.80 as described in chapter 1L of this report.

on March 22,2OL7, the Board confirmed the realization of a capital increase in kind in an amount of €74,87L,580.58 (excluding issue premium in an amount of €145,968,664.421, from €748,7L5,885.80 to €823,587,466.38, represented by a total number of 82,347,218 shares, as described in chapter 11of this report.

17.9 Acquisition of own shares

On June IO,2Ot4, the extraordinary shareholders' meeting authorized the Board, in accordance wíth Article 620 and following of the Belgian Companies Code and within the limits set out in that article, to purchase, on or outside the stock market, up to 20% of the Company's own shares, profit-sharing certificates or associated certificates, for a price not more than 10% below the lowest closing price ín the last 30 trading days preceding the transaction and not more than 5% above the highest closing price during the last 30 trading days preceding the transaction. This authorization is valid for five years from June 10, 2014.

This authorization is also valid if the acquisition is made by one of the subsidiaries directly controlled by the Company, as set out in Article 627 of the Belgian Companies Code.

On June 22 2OL7 the Company bought ²⁴⁷,439 own shares, as further described above, cfr. chapter "capital and capital evolutions during 2017.

L7.tO Material agreements to which Ontex is a party containing change of control provisions

tT.LO.ISFA 2014 and the Senior Secured Notes

The Company and certain of its subsidiaries entered into a five-year multicurrency credit facilities agreement dated November 10,2OL4as amended and/or restated from time to time (the "Senior Facilities Agreement") with, among others, the Original Lenders as set out

therein and Wilmington Trust (London) Limited as Security Agent, for an initial amount of €480,000,000.

The Company also issued €250,000,000 4.75% senior secured notes due 2021 (the "Senior Secured Notes") pursuant to a senior secured notes indenture dated November 1-4, 2014 (the "Senior Secured Notes Indenture").

The Senior Facilities Agreement, as well as the Senior Secured Notes lndenture, contain provisions that may be triggered in the event of a change of control of the Company.

The relevant clauses in the Senior Facilities Agreement, among other things, provide that, in case any person or group of persons acting in concert (other than the lnitial lnvestors and Management defined therein) 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 of the Company, this may lead to a mandatory prepayment and cancellation under the Senior Facilities Agreement.

The relevant clauses in the Senior Secured Notes lndenture, among other things, grant the holders of the notes the right to require the repurchase of all or any part of the notes at a purchase price in cash in an amount equal to LOt% of the principal amount thereof, plus

accrued and unpaid interest, in the event of a change of control of the Company as defined in the offering memorandum.

The relevant change of control provisions have been approved by the shareholders' meeting of May 26,2015, in accordance with Article 556 of the Belgian Companies Code.

The Senior Facilities Agreement was amended and restated pursuant to an amendment and restatement agreement dated February 25, 2016 to provide for an additional amount of €125,000,000 (or the equivalent thereof ín any other currency) and for certain other amendments to the Senior Facilities Agreement. The Senior Facilities Agreement has been supplemented by means of an additional facility notice from the Company dated January 25, ²⁰¹⁷to establish a new additional bridge facility for an additional aggregate amount equal to €125,000,000.

The Company, and certain of its subsidiaries as guarantors, entered into a new five-year multicurrency credit facilities agreement dated November 26, 2017 (the 'Senior Facilities Agreement 2OL7'l 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 20L4 as amended and/or restated from time to time, and for general corporate purposes.

The Senior Facilities Agreement 201-7 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.

!7 .1O.2 Faci lities Agreeme nt

The Company, and certain of its subsidiaries as guarantors, entered into a new seven-year multicurrency credit facilities agreement dated December 4, 2017 (the 'Facilities Agreement 2OI7') for an amount of €250,000,000, comprising a term loan of €1-50,000,000 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 AgreemenT2OlT 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.

17.10.3 Factoring Agreement

The Company, entered into a Factoríng Agreement dated February 2L, ZOLB 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.

t7 .1O.4 Hedgi ng Agree ment

The Company, entered into a ISDA FX Hedging Agreement dated March 12, 2OI8 with Crédit Agricole Corporate and lnvestment 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 specifícally, the Hedging Agreement, provides, among others, a change of 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, having the right to cast more than 50% of the votes, capable of being cast at the shareholders' meeting of the Company ('Change of Control'), provides CACIB the right to terminate the Hedging Agreement.

All Change of Control provisions as listed above are subject to shareholders' consent in accordance with article 556 of the Belgian Companies Code, and such approval shall be requested during the upcoming shareholders' meeting on May 25,2018.

t7.!l Severance pay pursuant to termination of contract of Board members or employees pursuant to a take-over 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 ¡f, pursuant to a takeover bid, the Board members or employees resign, are dismissed or their employment agreements are terminated.

Please see chapter L5.7 of this report on termination provisions of the members of the Board and the Management Committee in general.

18. Conflicts of interests (Art¡cle 523 Belgian Companies Code)

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).

ln accordance with Article 523 of the Belgian Companies Code, if a Board member has a direct or indirect patrimonialinterest in a decision ortransaction 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. For companies that are making or have made a public call on savings (such as Ontex Group NV), the conflicted Board member cannot be present during the deliberations of the Board relating to these transactions or decisions and cannot vote.

Conflict of interests within the meaning of Article 523 of the Belgian Companies Code arose on the following occasion in2O17, and the provisions of Article 523 Belgian Companies Code were complied with:

18.1 Remuneration of the member of the Executive Management Team/Management Committee

On March 5, 2077, respectively May 9, 2OI7,lhe Board resolved on the remuneration (incl. LTIP 2016) for the members of the Executive Team/Management Committee. Prior to discussing this item, Charles Bouaziz, Cepholli BVBA, with Jacques Purnode as its permanent representative, and Artipa BVBA, with Thierry Navarre as its permanent representative, declared to have a conflict of interest in accordance with Article 523 of the Belgian Companies Code. The relevant section of the minutes can be found below in its entirety:

"Prior to discussing this item on the agenda, Charles Bouaziz, Director, Jacques Purnode and Thierry Navarre, permanent representatives of their respective management companies,

Cepholli BVBA and Artipa BVBA, Directors of the Company, declared to have an interest of a patrimonial nature which is conflicting with the decisions that fall within the scope of powers of the Board of Directors. This conflict of interest results from the fact that Charles Bouaziz, Jacques Purnode and Thierry Navarre are, either in personal name or via their management

company, both Directors of the Company and members of the Executive Committee.

The remuneration proposals will have financial consequences for the Company that have been set out in the file submitted to the Remuneration and Nomination Committee.

ln accordance with Article 523 of the Companies Code, Charles Bouaziz, Cepholli BVBA (represented by its permanent representative Jacques Purnode) and Artípa BVBA (represented by its permanent representative Thierry Navarre) refrained from taking part in the deliberations and from vot¡ng on the resolutions. ln accordance with Article 523 of the Companies Code, the auditor of the Company, PricewaterhouseCoopers Bedrijfsrevisoren BV CVBA, permanently represented by Peter Opsomer BV BVBA, in turn represented by its permanent representative Peter Opsomer, has been informed of the existence of the conflicts of interest.

Furthermore, the relevant sections of these minutes will be included in the Annual Report of the Board of Directors.

On March 5,2OL7 , the Board approved the bonus and merit of the CEO, and of the Management Committee in aggregate, as set out below in the remuneration report.

On May 9,2077, the Board approved the LTIP as set out in the remuneration report. ln that framework the Board also decided to give Jacques Purnode an exception to the general policy of ³year cliff vesting for the 201-6 and 2O17 grant.

t8.2 Deferred consideration20t5l20t6 regarding acquisition of Grupo Mabe

On April 4, 2Ot7, the Board resolved on the deferred consideration 2015-2016 regarding the Grupo Mabe acquisition by the Company (through its subsidiaries). Prior to discussing this item, Juan Gilberto Marin Quintero declared to have a conflict of interest in accordance with Article 523 of the Belgian Company Code. The relevant section of the minutes can be found below in its entírety:

"Prior to discussing the concerned agenda item, the Chairman informed the members that Mr. Juan Gilberto Marin Quintero had prior to the meeting declared a personal conflict of interest of ^afinancial nature, within the meaning of Article 523 of the Belgian Companies Code, in respect of the sole agenda item, which relates to the amounts of 20L5 and 2016 deferred consideration

payable to him, among other sellers, with respect to the acquisition of Grupo Mabe by the Company (through its subsidiaries). ln light of this conflict of interest Mr. Juan Gilberto Marin Quintero did not participate in the meeting. He will inform the Company's auditor of his conflict of interest, in accordance with Article 523 of the Belgian Companies Code, and a copy of the relevant extract of these minutes will be included in the relevant annual report. The Chairman reminded the Board that Sellers and Buyers, subsidiaries of the Company (as defined in the Amended and Restated Master Purchase Agreement for Project Spiral dated February 28,2OL6, as further amended on April 29, 2Ot6, the "Master Purchase Agreement", have engaged in discussions regarding the amounts of deferred consideration due with respect to the years ²⁰¹⁵ and 2016. The parties have now been able to reach an agreement with respect to the deferred consideration for the years 2015 and 2016 (the 'Proposed Agreement'). Pursuant to the Proposed Agreement, the Company, through its subsidiaries, will agree to pay a total amount of MXN 965,888,000 to Sellers, in full and final settlement of any and all claims, disputes or discussions with respect to the 20L5 and 20L6 deferred consideration. This settlement amount shall be reduced with certain transaction costs due by Sellers to Buyers pursuant to the Master Purchase Agreement, amounting to a total of MXN 3,23I,762.20. Upon discussion and deliberation; the Board considers the entry into the Proposed Agreement to be in the interest of the Company and its subsidiaries, and unanimously approves the execution thereof in the form of the draft submitted to the Board".

19. Risks and uncertainties

We view managing risk with various stakeholders, in order to satisfo consumer and customer expectations, as an inherent part of doing business. The following summary provides the main risks we have identified and manage; however, this is not an exhaustive list, and there may be additional risks which we are not aware of.

Although for most of these risks we have set up mitigating efforts, these efforts are no guarantee that risks will not materialize. The order in which these risks are lísted is not an indication of their importance or probabílity.

For more information about our risk management framework and internal control framework, please refer to section 14 of the Corporate Governance report.

Environment

All Divisions face competition from branded product manufacturers and retailer brand manufacturers. We also face competition from competing manufacturers in production innovation. Rapid time-to-market is key to our competitiveness.

The fact that we would fail to deliver our value proposition and/or to adapt to the customer's needs could affect our performance, and could entail price and volume pressure, loss of market share or margin erosion.

Reputation and stakeholder management

As a public company, Ontex has stakeholders wíth various needs, and Ontex is subject to high transparency standard and periodic reporting obligations. Ontex may be subject to adverse publicity.

Such adverse publicity may adversely impact our reputation, and indirectly our business and financial condition.

Product quality and safety

Our reputation as a business partner relies heavily on our ability to supply quality

ln case of quality issues, this may lead to adverse effects on consumer health, loss of market share, financial costs and loss of turnover as well as to Company reputation at stake.

lntellectual Property

Although we are monitoring changes in intellectual property rights, we may inadvertently infringe intellectual property rights owned by others. Secondly, the Company may fail to register ¡ntellectual property rights in a timely mannerAs a potentialconsequence thereof the company may face legal claims or have to pay royalties which erode our profit margins.

Manufactu ring and Logistics

Our ability to serve our customers depends on the operation of our L9 manufacturing sites. We may experience disruptions at our production facilities or in extreme cases, our production facilities may shut down. Such temporary shortfalls in production could affect our on-time delivery record, which could in turn adversely effect on our ability to meet new customers and retain existing customers.

Sourcing and supply chain

We are dependent upon the availability of raw materials for the manufacture of our products. On average the main raw materials and packaging costs account for between 75o/o and 80% of our cost of sales. Our raw materials are subject to price volatility due to a number of factors that are beyond our control, including but not limited to, the availability of supply, general economic conditions, commodity price fluctuations and market demand.

The price volatility of the underlying commodities can affect the cost and availability of our products. We may not always succeed to pass these costs to the customer/ consumer through pricing.

Acquisitions

From time to time, we evaluate possible acquisítions 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. The integration of acquired businesses may be complex and expensive and may present a number of risks and challenges. Furthermore, there can be no assurance that we will realize any or all of the ant¡cipated benefits of any future acquisitions, including the expected business growth opportun¡ties, revenue benefits, cost synergies and other operational efficiencies ln case we would not be able to realise the objectives of the acquisition, the integration may lead to additional unforeseen difficulties or liabilities, failure to deliver on financial goals and internal disruption.

lnformation technology, data security and cyber attack

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

Legal and regulatory

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

Economic and political instability

Ontex operates around the globe, and as a result is subject to risks associated with operating internationally. Recent and ongoing instability in some of the countries in which we operate may adversely affect our business. Any such conditions or instability could impact our operations and result in additionalexpenditure and othercommercialand financial impacts incurred in orderto comply or adapt to such conditions and consequently have a material adverse effect on our business.

Recruitment and retention

A skilled workforce and agile organization are essential for the continued success of our business. Failure to identify, attract, develop and retain talents to satisfo current and future needs of the business may affect our ability to compete and grow effectively. ln case of failure to recruit and retain adequately, this may result in a decline in business performance.

Financial Risk

As detailed in section 7.4 of the consolidated financial statements, the Group's activities expose it to a variety of financial risks including currency risk, interest rate risk and liquidity risk as well as counterparty default. These risks may have a material adverse effect on our business, financial condition and results of operations.

Occupational health & safety

As Ontex is operating around the globe, it may fail to provide for the personal safety of employees in the production and other facilities and during travel to high-risk locations, which can cause reputational damage and difficulties to hire people.

Climate change

Ontex is subject to applicable laws and regulations in the global jurisdictions in which it operates. Climate change continues to be a focus for government legislators working within the susta inability agenda.

Climate change legislation (eg the introduction of a carbon tax) could result in making our products less affordable or less available resulting in reduced growth and profitability.

20. Proposal for the resolution of the Ordinary Shareholders Meeting on May 25,201,8.

The Board of director proposes, amongst others, the following to the Ordinary shareholders meeting:

• ^a Acknowledge the Board of Directors report and the report of the statutory auditor for the year ending December 3L,2017
• Approval of the separate annual accounts of December 31,20t7 a
• ^a To appropriate the loss of the period as follows:

The Board of directors proposes to carry forward the profit of the period amounting to € 3.330.331 to next year:

fo f P fit ( Lo ) br gh rd t l t y ss ea r ro ou rw a ro m as	€ 48 2 ,3 1L 97 ,5
( ) Lo P fit to ria d ss te b ro ap pr op e	€ 3 ,3 30 ,3 31 _
	€ 48 ,6 4 L ,9 L8 5
fit fo rd P ie d ro rw a c a rr	€ ,7 2 4 ,3 9 to r
A llo tio to ca n r es er ve s
A llo tio Le l R ca n ga es er ve s	€ L 70 ,0 00
th h ith d l a ila bl D iv id d en ro ug w ra w a va e re se rv es	€ 4 9 ,4 08 ,3 3 L

• Discharge for the directors for their mandate exercised in the financial year ended December 3L, 2OL7. a
• Discharge for the auditor PwC Bedrijfsrevisoren BCVBA, represented by its liable partner Peter Opsomer BV BVBA, represented by Peter Opsomer for the financial year ended December 31,2OL7. o

Board of Directors, March 28, 2018

Erembodegem,

De Raad van Bestuur, 28 maart 2018

Erembodegem,

Artipa sprl Bestuurder Vertegenwoordigd door Thierry Navarre

Cepholli bvba Bestuurder Vertegenwoordigd door Jacques Purnode

lnge Boets SVBA Bestuurder Vertegenwoordigd door lnge Boets

regacon 5l.,ís5f 6lisfl Bestuurder Vertegenwoordigd door Gunnar Johansson

Charles David Bouaziz Bestuurder

G¡lberto Maf ín Quintero Bestuurder

Revalue BVBA Bestuu rd er Vertegenwoordigd door Luc Mlssorten

Uwe Krüger Bestuurder

Regi Aalstad Eestuurder

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