Mondi Plc · LSE:MNDI
Mondi — UBS emerging markets conference 2013
31 slides from Mondi's conference presentation, May 13, 2013
Slide 1: Mondi Group UBS emerging markets conference
Mondi Group UBS emerging markets conference 13 May 2013
Slide 2: Agenda
Agenda Highlights Strategy Industry fundamentals Summary Appendices 2
Slide 3: Highlights
Highlights Strategy Industry fundamentals Summary Appendices 3
Slide 4: Financial Highlights
Financial Highlights Underlying operating profit and ROCE 2012 € million Strong profitability in 2012 despite challenging 15.0% 13.7% start to the year with improved volumes and 12.3% pricing after Q1, supported by excellent operating 9.5% 7.6% performance and cost management ROCE of 13.7%, in exces
Slide 5: Strategy
Highlights Strategy Industry fundamentals Summary Appendices 5
Slide 6: Mondi at a glance
Mondi at a glance Europe & International South Africa Packaging Fibre Consumer Paper Packaging Packaging UFP €1,896m €1,860m €1,167m1 €1,466m €653m 10% 9% 9% 27% 2012 30% 21% 23% Revenue1 8% 17% 26% 29% 2012 ROCE% 17.9% 12.5% 10.8%2 16.7% 9.9% Products 1 Pro-forma segment revenues, before eliminatio
Slide 7: 2012 Strategic highlights
2012 Strategic highlights Net operating assets development (% group total) Significant progress with strategic initiatives €1.2 billion spent on acquisitions 33% 43% increasing exposure to higher growth 57% 67% packaging segments Disposal of interest in non-core Aylesford 2011 2012 Packaging Newspri
Slide 8: Today Mondi is a high-quality and focused business
Today Mondi is a high-quality and focused business 2008 2013 Uncoated Uncoated ●Syktyvkar modernisation completed Packaging Paper Fine Paper Fine Paper ●Sold controlling interest in Hadera E&I Corrugated Fibre Packaging ●470,000t RCB machine in Świecie E&I Corrugated ●Focus on central & eastern Euro
Slide 9: Our strategic pillars
Our strategic pillars 1 Achieve leading Maintain and/or develop leading market positions in our core packaging and market positions uncoated fine paper markets, with specific focus on higher-growth emerging markets 2 Maintain a high- Maintain our low-cost, high-quality asset base by selectively inve
Slide 10: Achieving leading market positions
1 Achieving leading market positions Acquisition of Nordenia represents a significant step in the development of a Delivering on our leading consumer packaging business strategy Acquisition of two corrugated packaging plants in Germany and the Czech Republic reinforces Mondi’s strong central Europea
Slide 11: Maintain a high-quality, low-cost asset base
2 Maintain a high-quality, low-cost asset base Acquisition of the remaining non-controlling interest in Mondi Świecie Acquisition of heat and energy plant at Mondi Świecie Delivering on our strategy €300 million committed to energy related and debottlenecking projects 83% of upstream paper assets lo
Slide 12: Our emerging market focus underpins our low-cost position
2 Our emerging market focus underpins our low- cost position across the Group’s main grades Percentage of Mondi's capacity in overall cost curve in Q3 2012 Quartile¹ Q4 18% 7% Q3 46% 20% Q2 25% 11% 38% 100% Q1 100% 100% 100% 75% 25% 35% White Top Unbleached NSSC Fluting Recycled fluting Unbleached U
Slide 13: Integrated value chain
2 Integrated value chain1 Pulp Kraft Paper Millions Millions of tonnes of tonnes E&I E&I MSAD 4.0 1.2 0.8 0.5 E&I SAD 3.0 1.0 0.8 2.0 0.6 3.0 3.2 0.6 1.0 1.0 0.3 0.4 0.0 0.2 0.4 (0.2) (1.0) 0.0 Production Consumption Net long position Production Consumption Net long/(short) position Virgin Container
Slide 14: Grow through customer focused development
3 Grow through customer focused development Acquisition of Nordenia contributes significantly due to its innovation driven culture €70m planned investment in a 155,000 tonne per annum bleached kraft paper Delivering on our machine in Štěti, Czech Republic in order to meet growing demand strategy New
Slide 15: Continuous focus on performance
4 Continuous focus on performance Production and efficiency records in numerous operations Delivering on our Sale of our 50% interest in Aylesford Newsprint strategy Cost base reduced in absolute terms for past four years adjusted for acquisitions and disposals Underlying operating profit (€m) and R
Slide 16: Mondi has clear free cash flow priorities
Mondi has clear free cash flow priorities Maintain investment grade credit metrics Ratings reaffirmed Successful launch of 3.375% 8-year €500 million Eurobond Selective capital investment opportunities (optimisation of asset base) Free Cash Energy projects (€140 million) on track to deliver from end
Slide 17: Recently approved major capital investments
Recently approved major capital investments Ružomberok Štěti Description Recovery boiler and improvements in 155,000 tonne capacity bleached kraft chemical recovery and green energy paper machine Cost €128 million €70 million IRR ±40% ±20% Increase pulp production Integrate remaining open market pul
Slide 18: Industry fundamentals
Highlights Strategy Industry fundamentals Summary Appendices 18
Slide 19: Packaging Paper | Containerboard
Packaging Paper | Containerboard Selling prices/differential - indexed Virgin containerboard Indexed to 2007 Supply side contraction and lower imports 1.50 Kraftliner tightened markets in second half of 2012 White-top Kraftliner 1.30 RB fluting-OCC differential Markets remain firm in early 2013, €40
Slide 20: Packaging Paper | Kraft paper
Packaging Paper | Kraft paper Selling prices - indexed Kraft paper Indexed to 2007 2012 Q3 price increases implemented on strong 1.50 demand in export markets 1.40 Sack Kraft Paper 1.30 1.20 Sack kraft paper demand remained stable with 1.10 sales volumes in Q1 2013 well above the 1.00 0.90 previous
Slide 21: Fibre Packaging
Fibre Packaging Production volumes Corrugated packaging million Demand stable in mature central Europe 4,500 4,000 Pleasing growth in emerging Europe 3,500 New corrugated plants in Germany & Czech 3,000 Republic strengthening leading market positions 2,500 2,000 Some margin erosion expected in Q2 20
Slide 22: Consumer Packaging
Consumer Packaging Underlying operating profit and ROCE Acquisition of 99.93% of Nordenia, effective 1 € million October 2012 15.0% 13.5% 10.8% Integration on track 10.2% 5.6% Synergies expected of €20 million per annum (up from initial €15 million estimate) 12 17 22 25 33 2008 2009 2010 2011 2012¹
Slide 23: Uncoated Fine Paper
Uncoated Fine Paper Pulp and A4 B-copy prices Demand € / tonne € / tonne 900 800 Structural decline in western Europe 850 700 Growing demand in emerging Europe and CIS 600 800 500 750 400 Supply 700 300 650 A4 B-copy €/ton New capacity in Russia and France, albeit effects 200 Pulp (BHKP) - EUR/tonne
Slide 24: South Africa Division
South Africa Division Underlying operating profit and ROCE Improved result, with ROCE of 9.9% in € million 2012 16.4% Continued positive domestic trading 9.9% 8.9% 8.7% environment in uncoated fine paper 5.3% Gains from weaker Rand 118 38 71 63 68 2008 2009 2010 2011 2012 Closure of woodchip export
Slide 25: Summary
Highlights Strategy Industry fundamentals Summary Appendices 25
Slide 26: Summary
Summary Mondi strategically well positioned. The Group continues to deliver on its four pillar strategic framework: Achieve leading market positions (favourable product and geographic exposure) Maintain a high-quality, low-cost asset base Grow through customer focused development Continuous focus on
Slide 27: Appendices
Highlights Strategy Industry fundamentals Summary Appendices 27
Slide 28: Demonstrating our ability to act decisively and deliver results
Demonstrating our ability to act decisively and deliver results through the cycle Underlying operating profit (€m) and ROCE (%) € million 15.0% 13.7% 12.3% 9.5% 7.6% 441 294 458 622 568 2008 2009 2010 2011 2012 ROCE % • Szolnok (UFP) • Merebank PM32 (UFP) • Europapier • Demerger Mpact • Aylesford di
Slide 29: Abridged income statement
Abridged income statement1 % H2 H1 H2 € million 2012 2011 change 2012 2012 2011 Group Revenue 5,807 5,739 1% 2,967 2,840 2,797 Materials, energy and consumables used (3,049) (2,998) (2%) (1,549) (1,500) (1,470) Variable selling expenses (523) (511) (2%) (259) (264) (254) Gross margin 2,235 2,230 - 1
Slide 30: Market shares sources and region definitions
Market shares sources and region definitions Region defitnitions: Europe - Europe including Russia and Turkey. Emerging Europe - Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia, Malta, M
Slide 31: mondi
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