Mondi plc · LSE:MNDI
Mondi — Credit Suisse 2011 Global Paper & Packaging Conference
26 slides from Mondi's conference presentation, Feb 24, 2011
Slide 1: Credit Suisse – 2011 Global Paper & Packaging Conference
MONDI GROUP Credit Suisse – 2011 Global Paper & Packaging Conference 24 February 2011
Slide 2: Agenda
Agenda Group overview 2010 Financial results Operational review Major projects Summary Page 2
Slide 3: Mondi at a glance
Mondi at a glance UFP Corrugated Bags & Coatings South Africa MPSA Newsprint €1.5B €1.2B €2.2B €0.6B €0.6B €0.5B 7% 2010 10% Sales 23% 9% (1) 18% 33% 2010 EBIT % 9.6% 6.0% 11.8% 11.1% 7.8% (0.9)% Products Europe South Africa Europe/SA No. 1 in Office No. 1 in Kraft Paper No. 1 in Office No.
Slide 4: Focus on Packaging and UFP in emerging markets
Focus on Packaging and UFP in emerging markets1 Revenue by destination Revenue by origin Net operating assets 27% 39% 45% 55% 61% 73% Emerging markets Emerging markets Emerging markets Mature markets Mature markets Mature markets Virgin-based production Revenue by product Corrugated products 22% 26%
Slide 5: Integrated value chain
Integrated value chain Leading market Pulp Virgin Containerboard positions 1.2 4.0 3.5 0.2 + 3.0 0.7 0.4 1 0.3 0.3 0.8 2.5 High quality, low Millions 2.0 of tonnes Millions of tonnes 0.6 1.5 3.1 cost asset base 1.0 2.8 0.4 0.8 0.7 0.5 0.2 0.0 0.3 (0.3) 0 (0.5) Production Consumption Net long positio
Slide 6: Delivering on Group strategy in 2010
Delivering on Group strategy in 2010 Leading market High quality, low Focus on positions cost asset base performance • European Corrugated •Syktyvkar mill modernisation • Relentless focus on costs restructuring completed completed, securing the mills’ cost entrenched leadership • Expanded Uncoated f
Slide 7: Agenda
Agenda Group overview 2010 Financial results Operational review Major projects Summary Page 7
Slide 8: Key financial highlights
Key financial highlights Earnings significantly up versus 2009 EBITDA up 37% at €882 million Underlying operating profit up 73% at €509 million Underlying EPS up 151% at 47.0 euro cents Group ROCE of 12.3% Cash inflow from operations of €778 million Strong EBITDA growth €121 million investment in wo
Slide 9: Divisional underlying operating profits
Divisional underlying operating profits1 120 100 98 H1 2009 81 H2 2009 80 78 75 H1 2010 71 71 H2 2010 60 55 € millions 48 46 46 40 36 33 28 25 22 20 18 18 11 8 4 4 1 1 0 (5) Uncoated Fine Paper Bags & Coatings Corrugated South Africa division Mondi Packaging Newsprint South Africa (20) Strong perfor
Slide 10: Agenda
Agenda Group overview 2010 Financial results Operational review Major projects Summary Page 10
Slide 11: Uncoated Fine Paper
Uncoated Fine Paper Excellent full year result on the back of a strong operating performance and improved pricing Cost pressures Especially pulp at non-integrated mills Second half impacted by Extended Syktyvkar shut for final commissioning (€15m) Lower speciality volumes 1.5 Fundamentals remain att
Slide 12: Uncoated Fine Paper – Commodity cycle and returns
Uncoated Fine Paper – Commodity cycle and returns 1,100 A4 B-copy 1 1,050 1,000 950 900 €/tonne 850 800 750 700 650 600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2010 2010 2009 2009 2008 2008 2007 2007 2006 2006 900 25.0% 880 19.7% 860 20.0% 840 15.2% 14.4%
Slide 13: Corrugated
Corrugated Further improvement in product prices and volumes Partly offset by significant input cost pressures – specifically recovered paper Recent strengthening of eastern-European currencies placed some pressure on export-focused operations Box prices tracking paper – further increases required B
Slide 14: Corrugated – Commodity cycle and returns
Corrugated – Commodity cycle and returns 700 Kraftliner RB Fluting-OCC 600 differential 500 €/tonne 400 300 200 100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2010 2010 2009 2009 2008 2008 2007 2007 2006 2006 700 20.0% 18.1% 17.1% 18.0% 600 16.0% 16.0% 12.9%
Slide 15: Bags and Coatings
Bags and Coatings Significant Kraft Paper selling price increases achieved Partially offset by sharp rise in input costs, mainly wood Recent pressure from strong eastern European currencies European volumes largely recovered, supported by exports Negligible market-related downtime (2009: ~87,000t) R
Slide 16: Bags and Coatings – Commodity cycle and returns
Bags and Coatings – Commodity cycle and returns Unbleached sack Kraft (€/tonne) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 850.0 16.0% 15.3% 800.0 14.0% 13.3% 10.2% 11.9% 10.9% 750.0 12.0% 10.0% 10.0% 700.0 6.7% 8.3% 8.0% 7.3% 7.0% 650.0 6.0% 600.0 4.0% 550.0 2.0% 0.0% 500.0 2006 2006 2007 20
Slide 17: South Africa Division
South Africa Division Improved result, however still short of targeted levels Strong recovery in average pulp export selling prices Partially offset by rand strength Domestic cost inflation, most notably electricity Exited the European uncoated fine paper market Now focused on domestic and Africa Fu
Slide 18: Mondi Packaging South Africa
Mondi Packaging South Africa Very pleasing performance, especially on costs Pricing broadly unchanged until final quarter Demand largely back to pre-recession levels Growth in agricultural products for export supported the stronger second half result Industrial sector remains under pressure 6 month
Slide 19: Newsprint
Newsprint Sale of Europapier completed November 2010 €6 million profit up to October 2010 Aylesford severely impacted by lower selling prices and input cost pressures, notably recycled paper Plus additional waste disposal costs Price increases in excess of 20% have been negotiated in 2011 – more req
Slide 20: Agenda
Agenda Group overview 2010 Financial results Operational review Major projects Summary Page 20
Slide 21: Syktyvkar mill modernisation
Syktyvkar mill modernisation Project returns Wood / Pulp production Sales growth New recovery boiler ~30% woodyard capacity ~50,000 tonnes Uncoated Fine ~100% increased heat supply increase, ~10% efficiency gain Paper (~5% of domestic market) ~571 Mwh additional energy ~170,000 tonnes pulp ~63,000 t
Slide 22: Świecie's new machine performing well
Świecie’s new machine performing well ECO7 410,580 tonnes production achieved >85% of full design capacity well ahead of business plan ~213,000 tonnes produced in second half, including impact of a maintenance shut RCB cost curve1 Looking for a further >10% increase in 400 Manufacturing costs output
Slide 23: Capital expenditure
Capital expenditure Capital expenditure 400 200% Cash spend, excluding major projects was 64% of depreciation 300 189 13 135 (2009: 63%; 2008: 101%) € millions 200 179 100% 121 68 Approximately €50 million still to 92 27 256 100 182 194 spend on major projects 145 114 116 106 93 0 0% H1 H2 H1 H2 H1
Slide 24: Agenda
Agenda Group overview 2010 Financial results Operational review Major projects Summary Page 24
Slide 25: Summary
Summary Sustained improvement in order inflows, volumes and prices across all main products Strong operational performance Significant earnings recovery New Polish and Russian investments performing well Further refined portfolio with sale of non-core assets Significant increase in full year dividen
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