Mondi Plc · LSE:MNDI
Mondi — UBS Global Basic Materials Conference 2011
20 slides from Mondi's conference presentation, Jun 9, 2011
Slide 1: UBS Global Basic Materials Conference
MONDI GROUP UBS Global Basic Materials Conference London – 9 June 2011
Slide 2: Mondi's strategic positioning
Mondi’s strategic positioning Sector fundamentals Current trading Presenter Andrew King CFO – Mondi Group Mondi – UBS – Global Basic Materials Conference – June 2011│ Page 2
Slide 3: Mondi's product exposure
Mondi’s product exposure Mondi Group Mondi Groupsegment/product Product Mix 1 1 mix Other, 3% Uncoated fine Corrugated, paper, 30% 30% Coatings2, 15% Kraft paper / Bags, 21% Packaging Uncoated Fine Paper (UFP) Good fundamental demand dynamics Structural decline in western Europe Aside from sack kraf
Slide 4: Delivering on the key pillars to our strategy
Delivering on the key pillars to our strategy Build on leading positions in packaging and Uncoated Fine Paper (UFP), particularly in emerging markets Leading market positions Corrugated restructured Consolidated Bags positioning Russian mill expansion South Africa increasing pulp exposure (UFP & VCB
Slide 5: Delivering on major projects
Delivering on major projects Świecie's RCB machine Syktyvkar mill modernisation 410,580 tonnes production in 2010 Largest capital project in Mondi history, Full design capacity ~470,000 tonnes delivering well ahead of business plan Reduced environmental footprint further >10% increase in output in 2
Slide 6: Sector fundamentals
Mondi’s strategic positioning Sector fundamentals Current trading Mondi – UBS – Global Basic Materials Conference – June 2011│ Page 6
Slide 7: Industry fundamentals
Industry fundamentals Europe (ex. Russia) is short of timber Timber No new virgin based capacity planned in Europe constraints Mondi is potentially ~56% self-sufficient globally Aside from corrugated and Coatings, western markets maturing or in structural decline Emerging markets experiencing growth
Slide 8: Corrugated – Market fundamentals
Corrugated – Market fundamentals Western Europe back to pre-crisis level, eastern Europe above Demand Western European demand growth likely to flatten in the short-term CEE & Russia – growth of about 5%1 in medium-term expected European Virgin Containerboard “VCB” net capacity contraction during the
Slide 9: Corrugated – Commodity cycle and Mondi returns
Corrugated – Commodity cycle and Mondi returns Mondi’s ROCE (%), kraftliner price and RB fluting – 10 year price cycle (in EUR) OCC price differential (EUR/tonne) 700 Kraftliner YTD H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 600 RB Fluting-OCC differential % ROCE 2011 2010 2010 2009 2009 2008 2008 2007 2007 2006
Slide 10: Bags and Coatings – Market fundamentals
Bags and Coatings – Market fundamentals European sack kraft and bags demand remains below pre-crisis level Overseas demand sack kraft strong and structurally improved Demand Sack kraft demand growth expected to flatten in the short-term Coatings demand growth is positive in both west and east Europe
Slide 11: Bags & Coatings – Commodity cycle and Mondi returns
Bags & Coatings – Commodity cycle and Mondi returns Mondi’s ROCE (%), sack kraft and indexed bags 10 year price cycle (in EUR) price (EUR/tonne) Unbleached sack Kraft (€/tonne) 900.0 16.0% 15.3% 850.0 14.0% 13.3% 10.2% 800.0 11.9% 10.9% 12.0% 10.0% 750.0 10.0% 6.7% 8.3% 700.0 8.0% 7.3% 7.0% 2001 200
Slide 12: Uncoated Fine Paper – Market fundamentals
Uncoated Fine Paper – Market fundamentals Europe demand largely recovered in 2010, albeit below pre-crisis levels Indications of softening volumes in 2011 Demand Structural decline in western Europe, emerging markets expected to be more robust Possibility of further industry capacity reductions anno
Slide 13: Uncoated Fine Paper – Commodity cycle and Mondi returns
Uncoated Fine Paper – Commodity cycle and Mondi returns Mondi’s ROCE (%), Uncoated fine paper price 10 year+ price cycle (in EUR) (EUR/tonne) 1100 A4 B-copy 1050 1000 YTD H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 950 % 2011 2010 2010 ROCE 2009 2009 2008 2008 2007 2007 2006 2006 900 900 25.0% €/tonne 850 880 19.
Slide 14: Currency concerns
Currency concerns Strong emerging market currencies and local inflation undermining cost competitiveness Average exchange rates vs 2011 (YTD) % EUR change vs: CPI 2 H1 2010 H2 2010 YTD 2011 H1 2010 H2 2010 2011 H1 2010 H2 2010 Euro 1.3% 1.9% 2.6% (YTD) USA 2.1% 1.2% 2.6% Czech Republic 0.9% 2.0% 1.7
Slide 15: Current trading
Mondi’s strategic positioning Sector fundamentals Current trading Mondi – UBS – Global Basic Materials Conference – June 2011│ Page 15
Slide 16: Trading update – May 2011
Trading update – May 2011 Underlying operating profit in the first quarter 2011 of EUR187 million Positive trading environment and a very strong operating performance No significant maintenance shuts during the first quarter Price increases have been realised across all major products weakening of t
Slide 17: Further improvements to financial position
Further improvements to financial position € Millions 2009 2010 % Change "Capital employed" 4,341 4,588 6% Net debt 1,517 1,364 (10%) Shareholders equity, incl. non-controlling interests 2,824 3,224 14% Gearing (net debt / capital employed) 35% 30% Net debt / EBITDA (times) 2.4 1.5 Net assets largel
Slide 18: Intention to demerge MPSA as "Mpact"
Intention to demerge MPSA as “Mpact” Transaction rationale Mondi rationale Listing positions MPSA to pursue MPSA business and growth plans in rigid optimisation and growth initiatives in line plastics not aligned with Mondi Group with its strategic vision strategic focus Attractive opportunities for
Slide 19: Summary
Summary Industry dynamics Fundamentals generally remain strong in the Group's key paper grades Rising input costs are impacting on margins The recent weakening of the US dollar is a concern to pricing Mondi’s consistent strategy leaves it well-positioned to benefit Favourable product and geographic
Slide 20: Mondi – UBS – Global Basic Materials Conference – June 2011│ Page 20
Mondi – UBS – Global Basic Materials Conference – June 2011│ Page 20
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