Dare to move forward.
Integrated Annual Report 2018
Profile
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Why
We add value through the products we make and the services we offer, the jobs we create, our endeavors to operate within the limits of our planet, and the high standards of responsible behavior we set ourselves.
What Baby care
This is the largest part of our business. We manufacture baby diapers and baby pants for retailers as well as our own brands. They are designed to bring affordable comfort to babies and peace of mind to parents.
Baby care is a €39 billion* global business that includes baby diapers as well as the new and fast-growing category, baby pants. In all, it accounts for half of the global hygiene market in terms of value. The segment is forecast to grow at around 8% in coming years driven largely by emerging markets.
- €39BN* Global Business *Source: Euromonitor 2019
ONTEX REVENUE SPLIT BY Product Category (%)
What Adult care
Discretion, protection and dignity are the three key considerations in the design and manufacture of our light, medium and heavy incontinence solutions. Products include pads, pants, adult diapers and underpads, which are sold through institutions as well as directly to customers and consumers.
Adult Care covers heavy and light incontinence products. Their route to market varies but it is largely through institutions caring for the elderly or retail channels. The market is valued at some €11 billion* on a global scale and makes up about 14% of the total hygiene market. The market is predicted to expand by just over 10% in the next five years driven by further breakdown of taboos surrounding such products, the increase in purchasing power in emerging markets and, not least, the availability of suitable incontinence products.
- €11BN* Global Business *Source: Euromonitor 2019
ONTEX Revenue Split By Product Category (%)
What Feminine care
By providing a range of products such as ultra-towels, fluff towels, panty liners and tampons we are able to respond to the different needs and lifestyles of women. All have innovative features that offer protection and comfort at all times.
Feminine care is a €26 billion* global business comprising tampons, panty liners and standard and ultra-pads. The sector accounts for 34% of the global hygiene market in terms of value and is highly commoditized. The segment is forecast to maintain its growth rate at around 6% in coming years as penetration increases in emerging markets.
- €26BN* Global Business *Source: Euromonitor 2019
ONTEX Revenue Split By Product Category (%)
Interview
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Thanks to the resilience and hard work of our people all over the world, we managed to negate most of the potential roadblocks to achieve low single digit like-for-like growth in what were broadly flat hygiene markets.
Charles Bouaziz CHIEF EXECUTIVE OFFICER
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The issues we had in Brazil are an exception to our track record. The focus on efficiency, innovation and attractive products is the right path. The signs of recovery are encouraging.
Luc Missorten CHAIRMAN OF THE BOARD
Key figures
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Financial
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Operational
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Environmental
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Social
Key highlights
2018, a year of opportunities
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Online diaper subscription model
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125,000 tons CO2 saved since 2014
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Global roll-out of leadership training
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New brand launched on Chinese e-commerce platform
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Engineer of the Year
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40 years Ontex Mexico
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New R&D Center of Excellence
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Creativity Award for Canbebe Digital Campaign
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Safety figures at cruising speed
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Radomsko production start
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Pom Pom turns 50
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Strategy
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Our operation model clearly focuses on creating unique competitive advantage and sustainable value for all our stakeholders.
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Sustainability encapsulates everything we do. In 2018, we conducted a new materiality assessment. The process, which involved all our stakeholders, shows the main material aspects and why they matter. It also provides links to the relevant Sustainable Development Goals.
Dare To put people at the heart.
Ontex is a people company working in a people-oriented business
Ontex is a people company working in a people-oriented business. We believe that business growth fosters people success…and vice versa. We want and expect our people to take responsibility for their personal growth and reach their full potential. We, of course, provide people at all levels with the tools and support, but in true Ontex fashion, they have to dare to show some entrepreneurship to progress their career.
EVERYONE’S A LEADER
One of the highlights of 2018 from a people management viewpoint was the introduction of the Ontex Leadership Model. Mirroring our Ontex values, its assumption is that everyone is a leader at Ontex and that leadership can and should be demonstrated by anyone at any time not just in the workplace but outside as well.
Ontex is a people company working in a people-oriented business. We believe that business growth fosters people success… and vice-versa. In true Ontex spirit, we place great emphasis on providing our people at all levels with the tools and support to take responsibility for their own personal growth and reach their full potential.
ASTRID DE LATHAUWER GROUP HR DIRECTOR
DARE TO EXPLORE NEW HORIZONS.
INCREASING ENGAGEMENT THROUGH DIGITAL CHANNELS
We realize that we need to be where our shoppers and consumers are. That’s why digital activity among our own brands and our customers’ brands increased strongly in 2018 as we gained further insight into the dynamics of this route to market. During the year we launched the first Ontex baby brand sold exclusively through an on-line subscription model.
DIGITALIZATION IN OPERATIONS
We have a strong legacy in manufacturing, and our people have proven consistently innovative in improving the quality and efficiency of our lines. In true Ontex style, we are consistently looking to go one better, and we are taking advantage of innovations in computing power to improve our operations. During 2018, we equipped a number of pilot manufacturing lines with advanced analytics engines. These new data sources enable our plant people to uncover new insights and help our crews deliver the next level of efficiency and quality in our products.
Digital affects every part of our company and business. Our activities span direct-to-consumer models, supplier relationship management and the digitalization of our own manufacturing processes.
DARE TO SET HIGHER STANDARDS.
FOCUS ON SUSTAINABLE INNOVATIONS
In 2018, we successfully introduced a range of new products and product platforms across all our categories, once again demonstrating our ability to delight our customers and consumers. One of the main focus points was the work to boldly transform and optimize the Ontex innovation model, examining areas such as process and change management, to ensure that we can always deliver. Innovation is much more than design, so we called on a multifunctional work group representing manufacturing, marketing, pricing, R&D and more to identify the discrete components of the innovation process.
CONTINUED PRODUCT INNOVATION
In terms of innovation itself, we adopted a new approach looking at general (rather than category specific) topics that had come to light in our customer research. The three key areas were long lasting absorption, softness and, in feminine care, femininity.
At Ontex, we believe that those who initiate change have a better opportunity to manage and benefit from the change that is inevitable. That is why innovation is a key priority and why we continually invest in processes, technology and people to keep us at the forefront of our field.
DARE TO MAKE A DIFFERENCE.
SETTING AMBITIOUS TARGETS FOR REDUCING GHG EMISSIONS
We recognize that climate change is an urgent and potentially irreversible threat to businesses, human societies and the planet. We also acknowledge that we are part of a broad, global picture. We aim to be carbon neutral by 2030 and we have set ourselves ambitious targets along the way. The majority of our emissions come from electricity consumption in our plants (91% versus 9% of other fuels such as natural gas and oil) so our related to climate main focus is on reducing this aspect of consumption. Over the past two years we have invested in switching to ‘green’ electricity and all our European sites have now been converted.
RESPONSIBLE MATERIAL SOURCING
The availability of raw materials for the manufacture of our products is critical, and raw materials and packaging costs account for up to 80% of our cost of sales. With the health and safety of consumers always in mind, acquiring raw materials from sustainable sources is key to our operations.
Making products in a responsible manner is central to our success. It is the assurance our customers and consumers seek. It is the path to reducing our environmental impact. As a group, we adopt a holistic approach to responsible production and consumption because sustainability is one of Ontex’s strategic pillars.
Divisions
Divisions Mature Markets Retail
MATURE MARKETS RETAIL DIVISION IS DEDICATED TO SUPPLYING RETAILER BRANDED BABY CARE, ADULT CARE AND FEMININE CARE PRODUCTS IN WESTERN EUROPE AND AUSTRALIA, AND ENJOYS STRONG AND DEEP-GOING RELATIONSHIPS WITH ESTABLISHED INTERNATIONAL AND NATIONAL RETAILERS.
Revenue*
- 2018 : €880.2M
- 2017 : €900.7M
- -1.8% Like-for-like growth
- 38.40% of Ontex revenue
Key markets
Market value
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BABY CARE
68%
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ADULT CARE
11%
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FEMININE CARE
21%
“Our offer is based on detailed and wide-ranging consumer, shopper and innovation expertise that ensures that our customers’ brands leverage the retailers’ overall positioning while delivering a trustworthy alternative to the big multinational and national brands. It is one of the reasons why we are the clear leader in retailer brands in Europe today.”Mauricio Troncoso General Manager, MMR
Divisions Americas Retail
THE AMERICAS RETAIL DIVISION SUPPLIES A WHOLE RANGE OF BRANDED PRODUCTS TO MARKETS ACROSS THE AMERICAS FROM PRODUCTION PLANTS IN BRAZIL AND MEXICO, TWO OF THE TOP FIVE PERSONAL HYGIENE MARKETS IN THE WORLD.
Revenue*
- 2018 : €618.0M
- 2017 : €624.1M
- +4.5% Like-for-like growth
- 26.96% of Ontex revenue
Key markets
Market value
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BABY CARE
78%
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ADULT CARE
16%
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FEMININE CARE
5%
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OTHER
1%
“We were encouraged by the major progress we made towards entering the retailer brand baby diapers segment in the US. Another positive was that we took full advantage of the trend towards organic lifestyle products in the US feminine care market.”Armando Amselem General manager, americas retail
Divisions Healthcare
WE SUPPLY MOST OF OUR ONTEX-BRANDED INCONTINENCE PRODUCTS TO HEALTHCARE INSTITUTIONS, BUT OUR DIRECT-TO- CONSUMER MODEL THROUGH HOME DELIVERY AND ONLINE IS GROWING. OUR COMMERCIAL APPROACH VARIES DEPENDING ON LOCAL MARKET CONDITIONS.
Revenue*
- 2018 : €435.6M
- 2017 : €433.4M
- +0.8% Like-for-like growth
- 19.00% of Ontex revenue
Key markets
Market value
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BABY CARE
2%
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ADULT CARE
94%
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Other
4%
“Our job is to provide peace of mind for consumers and continence care stakeholders... helping people who experience incontinence to live their lives with dignity and in comfort. As we actively managed our customer and product portfolio in 2018, this was the one thought that drove us forward.”Xavier Lambrecht General manager, healthcare
Divisions Growth Markets
THROUGH OUR GROWTH MARKETS DIVISION WE SUPPLY RETAILER AND ONTEX BRANDS TO DEVELOPING AND EMERGING MARKETS. BABY CARE ACCOUNTS FOR MOST OF OUR SALES BUT WE ARE GROWING IN ADULT AND FEMININE CARE.
Revenue*
- 2018 : €197.6M
- 2017 : €192.3M
- +9.5% Like-for-like growth
- 8.62% of Ontex revenue
Key markets
Market value
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BABY CARE
64%
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ADULT CARE
29%
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FEMININE CARE
5%
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Other
2%
“Growth Markets again lived up to its name in 2018. Higher volumes and a positive price/mix meant that growth was materially ahead of the underlying market. This successful transformation story that started in 2014 is a result of clear strategic choices, amazing people and very hard work.”Thierry Viale General manager, growth markets
Divisions Middle East North Africa
OUR MIDDLE EAST NORTH AFRICA (MENA) DIVISION MANUFACTURES AND MARKETS BRANDED PRODUCTS. THE MAIN MARKETS ARE TURKEY, ALGERIA AND PAKISTAN WHERE WE HAVE MANUFACTURING FACILITIES BUT WE ALSO SERVE OTHER COUNTRIES IN THE MENA REGION VIA EXPORTS.
Revenue*
- 2018 : €160.8M
- 2017 : €184.5M
- +2.6% Like-for-like growth
- 7.02% of Ontex revenue
Key markets
Market value
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BABY CARE
81%
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ADULT CARE
19%
“Our operations in MENA center mainly on local hero brands. Our relentless focus on innovation, customers and consumers has helped build our categories in the region. The experience gained will serve us well as we look to expand in the coming years.”Özgür Akyildiz general manager, mena
