mondi results year end 2015 final...packaging paper remains the largest contributor ebit...

Mondi GroupFull year results for the year ended 31 December 201525 February 2016

2

Agenda

HighlightsFinancial overviewOperational overviewDelivering on our strategyOutlookAppendices

3

622 574 699 767 957

15.0% 13.6% 15.3% 17.2%20.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2011 2012 2013 2014 2015ROCE

● Excellent results achieved

○ Underlying operating profit up 25%○ Underlying earnings up 25%○ ROCE of 20.5%

● Significant profit improvement across all business units

● Capital projects delivering growth

○ €50 million incremental contribution to underlying operating profit in 2015 from completed investments

○ Strong capital investment pipeline

● €94 million in acquisitions to enhance product offering in Consumer Packaging

● Recommended full year dividend of 52 euro cents per share, up 24% on prior year68.1 69.2 95.0 107.3 133.7

2011 2012 2013 2014 2015

CAGR 18.4%

Underlying earnings per share

Highlights

Strong results on all key metrics

Underlying operating profit and ROCE

€ million

Euro cents per share

4

Agenda


5

Operating financial highlights

€ million 2014 2015%

changeH2

2014H1

2015H2

2015Group Revenue 6,402 6,819 7% 3,254 3,459 3,360

Underlying EBITDA 1,126 1,325 18% 573 671 654

% Margin 17.6% 19.4% 17.6% 19.4% 19.5%

Underlying operating profit 767 957 25% 390 490 467

% Margin 12.0% 14.0% 12.0% 14.2% 13.9%

Group ROCE 17.2% 20.5% 17.2% 19.0% 20.5%

25% increase in operating profit and ROCE of 20.5%

6

Currency effects

0

Underlying operating profit development

Price, volume and input costs driving profitability

2014 Volume Price Variable costs

Fixed costs

Fair value gains and other

Acquisitions and

disposals

2015

76726

14295 (77)

(7)11 957

€ million

7

43%

13%12%

18%

14%

2014

€212 million

1 Excludes Corporate costs of €35 million (2014: €33 million)

Divisional operating profit contribution

40%

12%11%

21%

16%

2015

€102 million

€112 million

€148 million

€96 million

Packaging Paper remains the largest contributor

EBIT contribution by segment¹

€342m

€102m

€96m

€148m

€112m

€391m

€120m€108m

€212m

€161m

Packaging Paper Fibre Packaging Consumer Packaging Uncoated Fine Paper South Africa Division

8

76744 5 20 (2) 10 2

3331 11

38 (5) 3 957

H2 H1 H2 H1H2H1 H1 H1H2 H2 H2

Divisional operating profit development

Strong contributions from all business units

2014 Packaging Paper

Fibre Packaging

Consumer Packaging

Uncoated Fine Paper

South Africa

Division

Corporate 2015

€ million

H1

9

Financial review

€ million 2014 2015%

changeH2

2014H1

2015H2

2015

Underlying operating profit 767 957 25% 390 490 467

Net underlying finance costs (97) (105) (8%) (47) (59) (46)

Net profit from associates 1 1 - - - 1

Underlying profit before tax 671 853 27% 343 431 422

Tax before special items (126) (161) (28%) (64) (82) (79)

Total non-controlling interests (26) (45) (73%) (11) (21) (24)

Underlying earnings 519 647 25% 268 328 319

Special items (after tax and non-controlling interests) (48) (47) 2% (32) (36) (11)

Reported profit after tax and non-controlling interests 471 600 27% 236 292 308

Basic earnings per share (euro cents) 97.4 124.0 27% 48.8 60.3 63.7

Underlying earnings per share (euro cents) 107.3 133.7 25% 55.4 67.8 65.9

Underlying earnings per share up 25%

10

● Sharply higher Russian interest rates in H1 and one-off effects increase effective interest rate

● Net debt down despite increasing capex spend

● Strong balance sheet provides strategic flexibility

● Public credit ratings

○ Moody’s Investor Services at Baa2 (stable outlook)○ Standard & Poor’s at BBB (stable outlook) – upgraded in

May 2015

Finance costs and net debt

€ million 2014 2015%

changeNet debt 1,613 1,498 7%Average net debt 1,675 1,650 2%Net underlying finance costs 97 105 (8%)Effective interest rate (before capitalised interest) 5.4% 6.3%Committed facilities 2,134 2,002 (6%)Of which undrawn 456 598Net debt/12-month trailing EBITDA (times) 1.4 1.1

46%

19%

14%

4%2%

1% 14% EuroPolish zlotyCzech korunaRussian roubleRandPounds sterlingOther

A robust financial position

Currency split of net debt €1,498 million

11

Taxation

€ million 2014 2015%

change

Tax charge 126 161 (28%)

Cash tax paid 106 160 (51%)

Effective tax rate 19% 19%

● Effective tax rate reflects underlying profit mix of Group plus

○ Benefits of tax incentives related to our capital investments in Slovakia, Poland and Russia

○ Recognition of deferred tax assets on tax losses

● Expect tax rate to move towards 22% over next three years

○ Based on current geographic profit mix, prevailing tax rates and

○ In the absence of further investment related tax incentives

Stable tax rate

12

Net debt at 31 Dec 2015

Cash flow effects - movement in net debt

Significant cash generation

1,4986338209

595

253

6

1,613 (1,279)

€ million

Net debt at 31 Dec 2014

Cash generated from operations

Currency effects (including

derivatives)

Tax and financing costs

paid

Capex investment

Dividends paid to equity holders

Acquisitions and disposals

Other

13

8.25 8.90 9.55 13.23 14.38

17.75 19.1026.45

28.77

37.62

2.6

2.5

2.6 2.6 2.6

1.5

1.7

1.9

2.1

2.3

2.5

2.7

0

10

20

30

40

50

60

2011 2012 2013 2014 2015Interim dividend Final dividend Dividend cover (times)

● Mondi’s dividend policy aims to offer shareholders long term dividend growth within a target dividend cover range of two to three times underlying earnings on average over the cycle

● Given the Group’s strong financial position and the Boards’ stated objective to increase distributions to shareholders through the ordinary dividend, the Boards have recommended an increase in the final dividend to 37.62 euro cents per share

● Full year dividend of 52 euro cents per share, up 24% on prior year

Dividends

Compound annual growth rate in dividend over past 5 years of 19%

Dividends declared

Euro cents per share

14

Agenda


Packaging Paper | Fibre Packaging | Consumer Packaging | Uncoated Fine Paper | South Africa Division

15

300 236 308 342 391

24.5%

17.8%21.7% 23.7% 25.5%

14.6% 12.0% 14.9% 16.7% 18.1%

2011 2012 2013 2014 2015ROCE Underlying operating profit margin

● Another strong performance, ROCE of 25.5% and underlying profit up 14% on prior year

● Supported by

○ Higher selling prices in Containerboard○ Benefits of completed capital investments

- Higher sales volumes of kraft paper and pulp- Lower energy costs

○ Positive currency effects○ Strong cost control through cost savings initiatives and

lower average wood, chemicals and energy costs

0.70 0.80 0.90 1.00 1.10 1.20 1.30

2011 2012 2013 2014 2015VCB RCB Kraft paper Market pulp

Volumes indexed to 2011

Packaging Paper

Underlying operating profit, margin and ROCE

€ million

Production volumes

Packaging Paper | Fibre Packaging | Consumer Packaging | Uncoated Fine Paper | South Afr ica Division

16

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

€/tonne

Source: FOEX Indexes Ltd

Virgin containerboard (VCB)● European demand growth of 4.7% in 2015

● Average 2015 European benchmark selling prices○ Kraftliner brown up 4.4%○ White-top kraftliner marginally up

● Recent downward pressure on prices due to European capacity increases and competition from emerging markets enjoying weaker currencies○ Average decline in unbleached kraftliner prices of around

€20-€25/tonne in early 2016○ White-top kraftliner down €10-€15/tonne

Recycled containerboard (RCB)● European demand growth of 3.9% in 2015

● Average 2015 European benchmark selling prices up 0.9%

● Net capacity additions of ±800 ktpa in 2016, expected to be matched by demand growth

Packaging Paper | industry fundamentals

Selling prices

White-top kraftlinerRCBVCB


17

37.23.3 2.0-3.0

● Overall containerboard capacity expected to grow in line with demand

● In VCB grades, announced capacity increase likely to be compensated by grade substitution and/or reduction in net imports

○ Net imports of 0.6 million tonnes estimated in 2015○ US kraftliner can be sold domestically at €100-€140/t higher than in Southern Europe

Incremental containerboard supply expected to be absorbed by demand in the medium term

Source: RISI and Mondi estimatesPackaging Paper | Fibre Packaging | Consumer Packaging | Uncoated Fine Paper | South Afr ica Division

2016E-2018E demand and capacity growth estimates in Europe (in mt)

+2-3%CAGR +1-2% +2-3%

Containerboard VCB RCB

7.5 0.6 0.2-0.4

Demand growth

Net capacity additions

2015 Capacity

Demand growth


2015 Capacity

29.7 2.7 1.8-2.6

Demand growth


2015 Capacity

18

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

2011 2012 2013 2014 2015

Source: Mondi

Sack kraft paper● European demand moderately weaker

● Softness in export markets

○ Slowdown in construction activity in south east Asia○ Political instability in Middle East and North Africa

● Average selling prices down 5-6% in early 2016

Speciality kraft paper● Good demand growth

● Higher average selling prices in 2015

● Selling prices remain stable in early 2016

Packaging Paper | industry fundamentals

Sack kraft paper - Europe

Selling prices

Price indexed to 2011


19

74 93 86 102 120

11.3%13.9%

11.8%13.4% 13.9%

4.6%5.9% 5.1% 5.5% 5.9%


Corrugated Packaging● 3.3% higher like-for-like sales volumes, good growth in Poland

and Czech Republic

● Good cost control and benefits of restructuring in 2014

● Turkey impacted by weaker Turkish lira, political instability and domestic inflation

● Capital investments contributed to improved performance

Industrial Bags ● Sales volumes up 11%○ US acquisition○ Market share growth in MENA and Europe

● Higher average selling prices

● Benefits from stronger USD, product innovation, commercial excellence projects and productivity improvements

Extrusion Coatings● Gains from improved product portfolio

0.700.800.901.001.101.201.30

2011 2012 2013 2014 2015


Fibre Packaging

Industrial bags Extrusion coatingsCorrugated packaging


Production volumes

€ million


20

32 37 79 96 108

11.6%

9.0% 8.7%10.4%

10.7%

5.1% 4.8%5.6%

7.0% 7.4%

2011 2012¹ 2013 2014 2015ROCE Underlying operating profit margin

1 Excludes €14 million one-off costs relating to Nordenia acquisition

● Underlying operating profit up 13% on prior year

● Margins supported by

○ Strong volume growth in higher value-added segments○ Commercial excellence initiatives

- Improved sales infrastructure- Material usage and efficiency- Improving productivity- Streamlining innovation process

● Good progress in repositioning business

○ Exposure to lower value-added products reduced- Closure of Spanish and Italian operations- Sale of Malaysian and German plants

○ Ramp-up of Chinese plant and 2014 Polish acquisition○ Acquisitions of Ascania (Germany) and KSP (South

Korea and Thailand)- Increase exposure to high-growth, high value-added

segments

Consumer Packaging


€ million


21

205 186 164 148 212

16.7% 16.7% 16.0% 16.1%25.6%

14.3% 13.1% 12.3% 11.9%17.2%


● Strong performance with ROCE of 25.6% and 43% increase in underlying operating profit

● Selling price increases in Europe and Russia

● Sales volumes up 1.7%

● Good cost control through commercial excellence initiatives

○ Lower wood, energy and chemical costs

● Higher euro pulp costs (up 26%) impact Neusiedleroperations

● Full realisation of benefits from new recovery boiler at the Ružomberok mill – providing energy efficiencies and increased pulp production

0.90

0.95

1.00

1.05

2011 2012 2013 2014 2015

Uncoated Fine Paper


Production volumes – Uncoated fine paper

€ million



22

400

450

500

550

600

650

700

750

800

850

900

2011 2012 2013 2014 2015A4 B-copy Pulp (BHKP)

€/tonne

Source: FOEX Indexes Ltd

Demand● Europe stable

● Decline in CIS of approximately 4%

Supply● Significant capacity rationalisation through closures and

conversions - ±720 ktpa over 2015/2016

Prices● Average benchmark pricing in Europe down 0.7% on prior

year, but up 1.9% in second half

● Price increase in Europe of up to 4% implemented –effective February 2016

● Price increases in Russia announced for implementation during Q1 2016

Uncoated Fine Paper | industry fundamentals

Pulp and A4 B-copy prices


23

63 69 93 112 161

8.7% 9.6%16.0%

21.9%

30.1%

9.8% 9.8%14.9%

18.8%24.7%


Comparatives for 2011 have not been restated to include 100% of Mondi Shanduka Newsprint in South Africa Division and consequently reflect a 58% portion

● Strong performance, underlying profit up 44% and ROCE of 30.1%

● Benefited from

○ Higher average selling prices in pulp and white-top kraftliner

○ Good cost control- Focus on improving productivity, driving efficiencies and

reducing waste

○ Significant currency gains on export volumes

● Sales volumes marginally lower, impacted by extended Richards Bay shut

● Productivity improved by 90% over last three years

0.80

0.90

1.00

1.10

1.20

2011 2012 2013 2014 2015Uncoated fine paper White-top kraftliner Market pulp

South Africa Division


Production volumes

€ million


Packaging Paper | Fibre Packaging | Consumer Packaging | Uncoated Fine Paper | South Africa Division

24

Agenda


25

6%19% 20% 21%

23%17%

15% 16% 18% 19%33%

32% 34% 34%36%

41%31% 29% 26% 21%

2011 2012 2013 2014 2015Consumer packaging Fibre based packaging Upstream packagingUncoated fine paper Other

Development of Capital Employed per business as a % of total ● Capital expenditure in packaging business between 2011-2015 represents 75% of total Group expenditure over period

● €1.4 billion spent on packaging acquisitions over the last 5 years

○ Świecie minorities and power plant (Containerboard)○ 2 Duropack plants (Corrugated)○ Industrial bags and kraft paper business of Graphic

Packaging in the US and industrial bags business Intercell (Kraft Paper and Industrial Bags)

○ Nordenia, Kutno, Ascania and KSP (Consumer packaging)

● Organic growth in our consumer exposed packaging businesses exceeds GDP growth

Consistent, clear strategic focus – growing our packaging business

2011 2012 2013 2014 2015

26

2010 2015Packaging

Paper

● Cost reductions driven by

○ Capital investment programme- In excess of €650 million invested over past 5 years in major

projects delivering cost and volume benefits

○ Rationalisation of high-cost capacity – 4 mills closed or sold

○ Ongoing focus on operational efficiency- Exceeded target of 2% reduction in cash cost base per

annum, offsetting inflationary pressures

○ Currency benefits due to emerging market currency weakness mainly in Uncoated Fine Paper and South Africa Division

Continuing to strengthen our cost leadership position by investing in our low-cost, high-quality asset base

2010 2015Uncoated Fine

Paper

2010 2015South Africa

Division

Cost per tonne produced (€/t)

-6% -22% -16%

Structural improvements in cost base driving profit growth

27

263 294 405 562 595

78%86%

113%

159% 164%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

2011 2012 2013 2014 2015Capex as a % of depreciation, amortisation and impairments

Capital expenditure ● €770 million committed to major projects over 2013-2016

○ Completed major capital investments already contributing meaningfully- Delivered incremental operating profit of around €100 million

over past two years- Incremental operating profit of around €60 million expected

in 2016

● Approved new 300 ktpa kraft top white machine at Ružomberok mill in Slovakia: €310 million

○ Subject to tax incentives and permitting

● Strong pipeline of projects under consideration

○ Centred around our high-quality, low-cost packaging paper assets in central Europe

● Capital expenditure expected to be in the range of €400-€450 million per annum over next two years

Growth options | Organic capital investments

€ million

28

New €310 million, 300 ktpa kraft top white machine investment

Ružomberok mill, Slovakia

Project description ● 300,000 tonne per annum kraft top white machine● Debottlenecking pulp mill – increasing capacity by 100,000 tonnes per annum

Benefits ● Unique product offering o targeted at fast growing white-top testliner and white-top kraftliner end useso virgin top layer provides higher brightness, printability and stability while recycled layer provides

a cost advantage for customer o based on Mondi´s proven concept of unbleached kraft top liner grades

● Improves pulp production costs and the mill’s energy balance further benefiting Ružomberok’s overall cost position

ROCE % In excess of Group’s 13% hurdle rate for new investments within 3 years of start-up

Expected Start-up Mid 2019

Conditions ● Tax incentives● Necessary permitting

29

App

rove

dU

nder

con

side

ratio

n

• €310 million 300 ktpa kraft top white machine at Ružomberok mill

• Replacement of the recovery boiler at Štĕti mill

• Installation of a 90 ktpa kraft paper machine at one of our central European operations

• Other

€121m

• €60m Frantschach recovery boiler

• €16m Syktyvkar bark boiler

• €13m Stambolijski steam turbine and economiser

• €32m Richards Bay steam turbine

Major project pipeline delivering strongly

€100 million incremental operating profit delivered from major projects in 2014/2015€60 million incremental operating profit benefit expected in 2016

2013 2014 2015 2016

€228m

• €70m Štĕti bleached kraft

• €128m Ružomberok recovery boiler

• €30m Syktyvkar pulp dryer

€296m

• €166m Świecie recovery boiler, turbine and biomass boiler

• €106m Packaging Paper

• €24m Fibre Packaging

€124m

• €94m Świecie phase II

• €30m South Africa Division woodyard upgrade

2017+

>€500m

30

Further integrating sustainable development into our strategy

*excluding two climate-related commitments for the period 2004-2014

Progress against our 2015 commitments:29 out of 35 commitments* achieved

Employee and contractor safety

A skilled and committed workforce

Fairness and diversity in the workplace

Sustainable fibre

Climate change

Constrained resources and environmental impacts

Biodiversity and ecosystems

Supplier conduct and responsible procurement

Relationships with communities

Solutions that create value for our customers

Securing access to sustainable fibreHighlight: 100% of owned and leased land is FSC®-certified

Contributing to our communitiesHighlight: Community engagement plans at all key operations

Minimising our contribution to climate changeHighlight: 103% electrical self-sufficiency across our pulp and paper mills

Operating in a world of constrained resourcesHighlight: 25% of managed land set aside for conservation

Focusing on safety & health and securing talentHighlight: Industry-leading safety performance

Increasing the eco-efficiency of our productsHighlight: 22% reduction of waste to landfill

Looking ahead to 2020:16 commitments across 10 action areas

31

Agenda


32

Outlook

Our outlook for the business remains positive. While we are currently seeing some softness in certain of our packaging paper grades, we are also seeing firmer prices in the European uncoated fine paper markets following recent industry capacity rationalisation. In addition, lower energy and related input costs, the generally positive impact of weaker emerging market currencies and the incremental contribution from recently completed major capital projects are expected to benefit the Group's performance in the near term.

Underpinned by the Group's robust business model, centred around our high-quality, low-cost asset base, clear strategic focus and culture of continuous improvement, we remain confident of continuing to deliver an industry-leading performance.

33

Q&A

34

Agenda


35

Mondi at a glance

1 Segment revenues, before elimination of inter-segment revenues

2015Revenue1

Products

ROCE 25.5% 13.9% 10.7% 25.6% 30.1%

30%

€2,156m

29%8%

23%

10%

€2,031m €1,469m €1,233m €652m

South Africa

29%

27% 19%

16%9%

Packaging Paper Fibre Packaging Uncoated Fine PaperConsumer Packaging

36

Strong global presence

20%

10%

8%7%

4%

40%

11%Emerging Europe

Asia & Australia

Russia

South Africa

Other

Western Europe

North America

31%

10%

10%

1%

38%

10% Emerging Europe

Russia

South Africa

Other

Western Europe

North America

Sales by location of production €6,819 million

Emerging Markets

Mature Markets

48%

24%

18%10%

Consumer related packaging

Industrial packaging

Uncoated fine paper

Other

Product mix

Packaging38%

10%9%3%

34%

6% Emerging Europe

South Africa

Russia

Other

Western Europe

North America

Operating net segment assets by geography €5,219 million

Emerging Markets

Mature Markets

Sales by location of customer €6,819 million

37

Our clear strategic focus is on growth in packaging

Our strategic value drivers

Paper Mills

Converting Operations

Pulp Mills

We are passionate about performancedriving productivity and efficiency / margin improvement

UpstreamDownstream

We invest in our high-quality, low-cost assetskeeping us competitive and giving us sustainable cost advantages We work with our customers

to find innovative solutionsgrowing our product range and

geographic reach

Upstream Downstream

• Our passion for performance is important across all our businesses and we consistently focus on driving productivity, improving efficienciesand reducing costs

• Our value drivers of investing in our high-quality, low cost assets and working with our customers to find innovative solutions apply to all ouroperations, although the priorities differ across the value chain

38

Growing in line with our strategy

A strong financial position allows us to pursue growth options through capital investment and/or M&A

Free Cash Flow

priorities

As appropriate

Maintain our strong and stable financial position and investment grade credit metrics

Support payment of dividends to our shareholders

Evaluate growth opportunities through M&A and/or increased shareholder distributions

Grow through selective capital investment opportunities

39

Continuing to deliver on our strategy

2015 DevelopmentsWe are passionate about performance

We invest in our high-quality, low-cost

assets

We work with our customers to find

innovative solutions

Packaging Paper

• Completion of first phase of Świecie Green (Poland) • Completion of various strategic capital projects mainly at

our kraft paper operations

• Sale of Raubling (Germany) and closure of Lohja (Finland) • Evaluating significant new packaging investments in

integrated mills in central Europe

Fibre Packaging

• Investment in various Corrugated Packaging operations • Closure of 2 US bags plants and Sendenhorst (Germany)

Consumer Packaging

• Acquisition of Ascania (Germany) • Acquisition of KSP (South Korea and Thailand) • Sale of Ipoh (Malaysia) and Osterburken (Germany) • Closure of Iberica (Spain) and Silicart (Italy)

40

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2011 2012 2013 2014 2015

Pulp Paper Wood Paper for recycling Energy Chemicals Plastics Other variable costs


Input costs

Variable costs

€ million

41

22.1%22.7%

23.1%22.8% 23.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

0

500

1 000

1 500

2 000

2 500

2011 2012 2013 2014 2015Depreciation, amortisation and impairments Other net operating expensesPersonnel costs Maintenance and other indirect expensesFixed costs excluding depreciation, amortisation and impairments as a % of revenue


Fixed costs

Fixed costs composition

€ million

42

Special items

Operating special items – €57 million charge● Packaging Paper○ Closure of speciality kraft paper mill in Finland (€14 million)

● Fibre Packaging ○ Restructuring following the acquisition of the bags business from Graphic Packaging (€10 million)○ Closure of plants in Germany and France in Industrial Bags (€11 million)

● Consumer Packaging○ Closure of a plant in Spain (€14 million)

● Write off of receivable and provision for settlement of a legal case relating to the 2012 Nordenia acquisition (€8 million)

43

575 764 711 811 79410.0%

11.9%11.0%

12.3%11.6%

2011 2012¹ 2013 2014¹ 2015Working capital as a % of revenue

12%

1 Working capital as a % of revenue is based on annualised revenue from acquisitions

● Working capital as a percentage of revenue marginally below revised target range of 12%-14% at year end

● Target range increased to reflect increased contribution from more working capital intensive downstream businesses

(68)(83)

(27)

(87)

9

2011 2012 2013 2014 2015

Working capital

Working capital cash flows

Working capital management

€ million

€ million

14%

44

100% 56% 100% 11% 77% 100%

44% 100% 23% 100%

58% 11%

8%12% 12%

Whi

te-to

p kr

aftli

ner

Unb

leac

hed

kraf

tline

r

NS

SC

flut

ing

Rec

ycle

d flu

ting

Unb

leac

hed

sack

kra

ft pa

per

UFP

²

BH

KP

(pul

p)³

1 Delivered to Frankfurt except where noted | 2 Includes specialities | 3 Delivered to Rotterdam Source: RISI and Mondi estimates

Our integrated low-cost operations

3.8

0.3 0.5 0.7

0.2

1.40.2

0.5

0.0

1.0

2.0

3.0

4.0

Pulp Virgincontainerboard

Recycledcontainerboard

Kraft paper

Consumed internally Sold externally

Integrated value chain – total production

Million tonnes

Emerging market asset base leads to low cost positions across the Group’s main grades

Q4

Cost quartile¹

Q3

Q2

Q1

45

Five-year cumulative free cash flow

1 Excludes dividend in specie of €205 million

3.7

(2.1)

(0.8)

0.3

Change in net debtSpent on acquisitionsDistributed to shareholdersInvested in asset baseFree cash flow generated

(1.4)

Received from disposals and adjustments

1

€ billion

(0.3)

46

Cash flow (reconciling to movement in net debt)

1 On a cash and debt free basis

€ million 2014 2015%

changeUnderlying EBITDA 1,126 1,325 18%

Working capital movements (87) 9Other operating cash flow items (6) (55)Cash generated from operations 1,033 1,279 24%

Dividends from financial investments and associates 2 -Taxes paid (106) (160) (51%)

Net cash inflow from operating activities 929 1,119 20%

Capital expenditure, excluding intangible assets (562) (595) (6%)

Investment in intangibles and forestry assets (45) (50) (11%)

Acquisitions¹ (104) (94)Disposals - 56Financing costs (125) (93) 26%

Dividends paid to shareholders (193) (209) (8%)

Other investing and financing activities 94 (19)Net decrease/(increase) in net debt (6) 115

47

Statement of financial position

€ million 2014 2015

Property, plant and equipment 3,432 3,554

Goodwill 545 590

Working capital 811 794

Other assets 434 422

Other liabilities (715) (675)

Net assets excluding net debt 4,507 4,685

Equity 2,628 2,905

Non-controlling interests in equity 266 282

Net debt 1,613 1,498

Capital employed 4,507 4,685

48

Production volumes

2014 2015%

changeEurope & International

Containerboard '000 tonnes 2,160 2,138 (1%)

Kraft paper '000 tonnes 1,130 1,162 3%

Softwood pulp '000 tonnes 2,085 2,108 1%

Corrugated board and boxes million m2 1,343 1,350 1%

Industrial bags million units 4,446 4,925 11%

Extrusion coatings million m2 1,401 1,389 (1%)

Consumer packaging¹ million m2 6,501 6,594 1%

Uncoated fine paper '000 tonnes 1,361 1,379 1%

Hardwood pulp '000 tonnes 1,127 1,161 3%

Newsprint '000 tonnes 202 197 (2%)

South Africa Division

Containerboard '000 tonnes 253 247 (2%)

Uncoated fine paper '000 tonnes 258 240 (7%)

Hardwood pulp '000 tonnes 649 619 (5%)

Newsprint '000 tonnes 117 113 (3%)

Softwood pulp '000 tonnes 139 138 (1%)

1 2014 figure restated

49

Exchange rates

2014 2015%

changeClosing rates against the euroSouth African rand 14.04 16.95 21%

Czech koruna 27.74 27.02 (3%)

Polish zloty 4.27 4.26 -

Pounds sterling 0.78 0.73 (6%)

Russian rouble 72.34 80.67 12%

Turkish lira 2.83 3.18 12%

US dollar 1.21 1.09 (10%)

Average rates for the year against the euroSouth African rand 14.42 14.17 (2%)

Czech koruna 27.53 27.28 (1%)

Polish zloty 4.18 4.18 -

Pounds sterling 0.81 0.73 (10%)

Russian rouble 50.73 68.04 34%

Turkish lira 2.91 3.02 4%

US dollar 1.33 1.11 (17%)

50

Exchange rate development vs EUR

0.600.700.800.901.001.101.201.301.40

0.650.700.750.800.850.90

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

GBP (LHS) USD (RHS)

24.5025.0025.5026.0026.5027.0027.5028.00

2.002.503.003.504.004.505.00

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

PLN (LHS) TRY (LHS) CZK (RHS)

Emerging markets

8.010.012.014.016.018.0

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

ZAR vs EUR ZAR vs USD

South African rand

30.040.050.060.070.080.090.0

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

RUB

Russian rouble

Mature markets

51

Mondi: Forward-looking statements disclaimer

This document includes forward-looking statements. All statements other than statements of historical facts included herein, including, without limitation, those regarding Mondi’s financial position, business strategy, market growth and developments, expectations of growth and profitability and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”, “continues”, “assumes”, “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Mondi, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions and are based on numerous assumptions regarding Mondi’s present and future business strategies and the environment in which Mondi will operate in the future. These forward-looking statements speak only as of the date on which they are made.

No assurance can be given that such future results will be achieved; various factors could cause actual future results, performance or events to differ materially from those described in these statements. Such factors include in particular but without any limitation: (1) operating factors, such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development plans and targets, changes in the degree of protection created by Mondi’s patents and other intellectual property rights and the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for Mondi’s products and raw materials and the pricing pressures thereto, financial condition of the customers, suppliers and the competitors of Mondi and potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in Mondi’s principal geographical markets or fluctuations of exchange rates and interest rates.

Mondi expressly disclaims

a) any warranty or liability as to accuracy or completeness of the information provided herein; and

b) any obligation or undertaking to review or confirm analysts’ expectations or estimates or to update any forward-looking statements to reflect any change in Mondi’s expectations or any events that occur or circumstances that arise after the date of making any forward-looking statements,

unless required to do so by applicable law or any regulatory body applicable to Mondi, including the JSE Limited and the LSE.

mondi results year end 2015 final...packaging paper remains the largest contributor ebit...

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