Ontex Group NV — Share Issue/Capital Change 2016

Feb 29, 2016

ONTEX GROUP

Limited Liability Company (Naamloze Vennootschap) Korte Keppestraat 21 9320 Erembodegem (Aalst) VAT BE 0550.880.915 RPR Ghent, division Dendermonde

(the "Company")

SPECIAL REPORT OF THE BOARD OF DIRECTORS IN ACCORDANCE WITH ARTICLE 602, §1, OF THE BELGIAN COMPANY CODE

1. PURPOSE OF THIS REPORT

This special report is prepared in accordance with Article 602, 81, of the Belgian Company Code and has been adopted by the board of directors of the Company (the "Board of Directors") on February 29, 2016, in the context of a proposed capital increase by way of a contribution in kind of the Vendor Loan Note (as defined below), to be decided by the Board of Directors on that same date, within the framework of the authorized capital under the terms and conditions described in section 3 below (the "Capital Increase").

This special report describes the Capital Increase and sets out the importance of the proposed contribution in kind and the resulting capital increase for the Company, as required by Article 602, §1, of the Belgian Company Code.

This special report should be read jointly with the report drawn up by the auditor of the Company in accordance with Article 602, §1, of the Belgian Company Code, which is attached to this special report. The Board of Directors agrees with the conclusions of the auditor included in the aforementioned report.

2. CONTEXT

The Company has entered into a transaction whereby it, through Ontex BVBA, a whollyowned subsidiary of the Company, and certain subsidiaries of Ontex BVBA, will directly or indirectly acquire all outstanding shares of Grupo P.I. Mabe, S.A. de C.V., a Mexican company which manufactures disposable hygienic products ("Grupo Mabe"), together with other related interests, for a total enterprise value of approximately MXN 7,220 million (at an exchange rate of 20.04, equal to EUR 360.28 million) (the "Transaction"),

pursuant to the terms and conditions described in the Master Purchase Agreement entered into between the parties on November 3, 2015, as amended and restated on February 28, 2016 (the "Agreement"), together with other transaction documents.

Of the net consideration payable to the sellers at the closing of the Transaction (the "Closing"), an amount equal to (i) the reference share price for the Company's shares as agreed among the parties in the Agreement, EUR 27.8, multiplied by (ii) 2,722,221, i.e. EUR 75,677,743.8, will be paid in the form of a vendor loan note issued by Ontex BVBA (the "Vendor Loan Note") which will immediately be contributed in the Company in exchange for 2,722,221 newly-issued ordinary shares of the Company. The balance of MXN 3,522,303,760 (rounded), being MXN 5,650,000,000 minus (i) the principal amount of the Vendor Loan Note, converted into Pesos at an agreed exchange rate of 20.0429, i.e. MXN 1,516,801,451, and (ii) Grupo Mabe's estimated net financial debt at Closing, i.e. MXN 610,894,790 (rounded), will be paid in cash, for which Ontex BVBA and certain of its subsidiaries have been granted an intra-group loan by the Company.

$\overline{3}$ . DESCRIPTION OF THE CONTRIBUTION

At the latest at the time of the Closing, the Board will resolve to increase the share capital of the Company by means of a contribution in kind of the receivable evidenced by the Vendor Loan Note, conditional upon the effective contribution in kind of this receivable.

At the Closing, in accordance with the purchase price allocation schedule annexed to the Agreement, the Vendor Loan Note, having a nominal value of EUR 75,677,743.80, will be issued to The Pamajugo Irrevocable Trust ("Pamajugo"), a trust organized and existing under the laws of the State of Delaware, as one of the sellers in the Transaction.

Pursuant to the Agreement, Pamajugo will contribute the receivable evidenced by the Vendor Loan Note in kind to the share capital of the Company, after which the authorized directors will record the effective realization of the capital increase in accordance with Article 589 of the Belgian Companies Code. In consideration for this contribution in kind, 2,722,221 new shares in the Company will be issued to The Wilmington Trust Company, as trustee for Pamajugo, at an agreed issue price per share of EUR 27.8, being the weighted average closing price of the shares of the Company in the 20 trading days preceding the signing of the initial Agreement, being November 3, 2015. This contribution will increase the capital by an amount of EUR 27,226,021.12 (being the product of the number of newly issued shares by the fractional value of the Company's ordinary shares) from EUR 721,489,864.68 to EUR 748,715,885.80. The balance of the amount of the contribution (i.e., EUR 48,451,722.68) will be allocated as issue premium.

The newly issued shares will be in dematerialized form and of the same kind as the existing shares. As of the date of their issuance, they will benefit from the same rights and privileges (including as to dividends and other distributions).

$4.$ JUSTIFICATION OF THE CONTRIBUTION IN KIND

The contribution in kind, and the resulting capital increase, are necessary to complete the Transaction, which will enable the Company to acquire, through its subsidiaries, a leading Mexican business that is a strong strategic fit. Grupo Mabe's investment in innovation and manufacturing positions the business well to support its future growth. In particular, the Transaction is consistent with the Company's strategy of enhancing organic growth with value added bolt-on acquisitions, and reflects a focus on extending its platform outside Western Europe and deeper into growth markets, whilst increasing the contribution to the group from strong Ontex brands.

In light of these considerations, the Board of Directors is of the opinion that the contribution in kind, and the resulting capital increase are therefore undoubtedly in the Company's interest.

Brussels, February 29, 2016

On behalf of the board of directors of Ontex Group NV,

Luc Missorter Charles Bouaziz Director Director

English translation for information purposes only

Annex: Report of the Auditor in accordance with Art. 602, §1, BCC

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