REG-Mondi Plc: Half-year Report
01/08/2024 07:15
Mondi plc
(Incorporated in England and Wales) ISIN: GB00BMWC6P49
(Registered number: 6209386) LSE share code: MNDI
LEI: 213800LOZA69QFDC9N34 JSE share code: MNP
1 August 2024
Results for the six months ended 30 June 2024
Mondi, a global leader in the production of sustainable packaging and paper,
today announces its results for the six months to 30 June 2024 ("first half"
or "H1 2024").
H1 2024 - key points
• Robust performance with underlying EBITDA of
€565 million - trading in line with our expectations
• Second quarter underlying EBITDA benefitted from
rescheduled maintenance shuts and a higher than expected forestry fair value
gain, together totalling approx. €40 million
• Continued progress delivering organic growth investments
- on track and on budget
• Supporting shareholder distributions through ordinary
and special dividends
Andrew King, Mondi Group Chief Executive Officer, commented:
"Our underlying EBITDA of €565 million in the first six months, although
lower than the comparable period last year, reflected an encouraging
performance, supported by improving market conditions resulting in stronger
order books and higher sales volumes. This enabled us to implement a number of
price increases across our paper grades. Alongside lower input costs, we
delivered a sequential improvement in underlying EBITDA when compared to the
second half of 2023. The benefit of the price increases will continue into the
second half of the year. The second half is expected to be impacted by higher
planned maintenance shuts and a likely forestry fair value loss.
“We continue to invest through-cycle to grow our business, enhancing our
unique packaging and paper platform and broad product offering. Of our €1.2
billion organic growth investments, we will have invested around 80% by the
end of this year, with operations currently ramping up following the
modernisation of our Kuopio mill, the debottlenecking of our Swiecie mill and
the two expanded box plants in Poland. Overall, our organic growth investments
are expected to deliver a meaningful EBITDA contribution from 2025."
€ million, except where noted Six months ended 30 June 2024 Six months ended 30 June 2023 Six months ended 31 December 2023
From continuing operations
Group revenue 3,739 3,881 3,449
Underlying EBITDA 1 565 680 521
Underlying EBITDA margin 1 15.1% 17.5% 15.1%
Profit before tax 296 418 264
Basic underlying earnings per share (euro cents) 1, 2 50.5 67.0 40.8
Basic earnings per share (euro cents) 2 44.5 63.7 39.8
Interim dividend per share (euro cents) 2 23.33 23.33
Special dividend per share (euro cents) 2 160.00
Cash generated from operations 372 554 758
Net debt to underlying EBITDA (times) 1 1.5 0.8 0.3
Return on capital employed (ROCE) 1 10.8% 19.1% 12.8%
Notes:
1 The Group presents certain measures that are not defined or specified
according to International Financial Reporting Standards. Refer to the
Alternative Performance Measures (APMs) section at the end of this document
for further detail.
2 Per share metrics for the six months ended 30 June 2024 (except for the
special dividend) include the impact of the share consolidation effective in
January 2024. Refer to notes 7, 8 and 10 in the condensed consolidated
financial statements for further information.
Mondi delivered a robust performance in the first half of 2024 on the back of
improving market conditions. This performance was supported by our continued
focus on quality, reliability and offering our customers a broad range of
sustainable packaging and paper solutions.
Underlying EBITDA of €565 million with margin of 15.1% was below the
comparable period (H1 2023: €680 million, 17.5%) primarily due to lower
average selling prices and inflationary personnel and operating cost pressures
despite the improvement in sales volumes and the reduction in input costs.
Whilst improving market demand and customer restocking led to an increase in
our volumes in the first half of the year, prices were, on average, lower than
the first half of 2023 as a result of the substantial price declines seen
throughout 2023. However, the improving market conditions enabled a number of
price increases to be implemented across all our paper grades over the course
of the first half of the year. The full benefit of these increases are
expected to come through in the second half of this year.
Overall, input costs were lower in the period compared to the first half of
2023, mostly due to lower wood and energy prices. As we enter the second half
of 2024, overall input costs are stable despite recent increases in paper for
recycling prices.
Return on capital employed was lower at 10.8% (31 December 2023: 12.8%),
calculated on a rolling 12-months basis.
The Group continues to generate good cash flows and maintains a strong
financial position, which provides the platform to continue investing in the
business through-cycle alongside paying dividends to shareholders. Cash
generated from operations of €372 million was lower than the prior year (H1
2023: €554 million) mainly due to an increase in working capital in line
with the improving market environment.
Net debt to underlying EBITDA at 30 June 2024 was 1.5 times due to ongoing
investment in the business and payment of a special dividend.
An interim dividend of 23.33 euro cents per share has been declared (H1 2023:
23.33 euro cents per share).
Further progress on delivering our strategy
Mondi has a clear strategy to deliver value accretive growth, sustainably.
This includes extending our market leadership positions and scale in our key
packaging markets. For Flexible Packaging, our focus is on leveraging our
unique platform by building on our global leadership positions in kraft paper
and paper bags and developing our niche positions in consumer flexibles, while
bringing together the capabilities from across the platform to deliver
innovative, sustainable packaging solutions. For Corrugated Packaging, our
focus remains on growing in Europe and adjacent markets given our strong and
integrated positions in these regions. In Uncoated Fine Paper we continue to
optimise our existing assets and market leading positions in selected regional
markets.
We continue to invest in upstream and downstream assets to deliver organic
growth, enhance cost competitiveness, improve environmental performance and
drive synergistic benefits of our integrated business model. This enables us
to further strengthen our broad range of innovative sustainable solutions, and
partner with customers to contribute to a circular economy. Our people are at
the heart of our business, and we are committed to fostering a safe,
motivating and inclusive work environment, aligned with our values of
Performance, Care and Integrity.
Delivering organic growth investments - on track and on budget
We seek to invest through-cycle, by leveraging our strong financial position,
leading market positions and confidence in the long-term structural growth of
the packaging markets we operate in.
We are making good progress on our organic growth investments. Our €1.2
billion of organic growth investments remain on track and on budget. These
projects are diversified across our value chain, products and geographic reach
and comprise €0.6 billion of investments in Corrugated Packaging and €0.6
billion of investments in Flexible Packaging. By the end of 2024, we will have
invested around 80% of the €1.2 billion.
Our projects are expected to take two to three years to achieve full
production following their start-up, and deliver mid-teen returns
through-cycle when fully operational. We expect these projects to deliver a
meaningful EBITDA contribution from 2025.
Advancing our sustainability performance through the Mondi Action Plan 2030
We have a long track record of delivering sustainably and continue to be
recognised as a leader in sustainable practices. During the period, we
maintained our top ‘A’ scores for forestry and water security and an
‘A-’ score in climate change in CDP’s 2023 disclosures. We also achieved
Platinum status in EcoVadis’ Corporate Social Responsibility (CSR) ratings,
placing us among the top 1% of global companies assessed for the eighth
consecutive year. These achievements, alongside other awards and recognitions,
underscore our continued dedication to sustainable practices and transparent
reporting towards achieving our ambitious commitments set out in the Mondi
Action Plan 2030 (MAP2030).
We are making good progress delivering circular solutions to our customers as
we continue to develop innovative packaging and paper products that are
sustainable by design. For example, we developed TrayWrap, a secondary paper
packaging solution made with Mondi's kraft paper that replaces plastic shrink
film for wrapping bundles of food and drinks. This new solution is being used
by a coffee brand to securely transport its coffee packages across Sweden.
Another innovation includes FlexiBag Reinforced, a recyclable and
cost-effective mono-material plastic packaging solution incorporating
post-consumer recycled content offering high barrier protection, making it the
ideal solution for German pet food producer mera's ‘pure green’ dry pet
food packaging range.
Our relentless focus on employee safety, wellbeing and personal development
continues to be a top priority for the Group. Our initiatives support and
provide opportunities for our people to build skills that support long-term
employability, empower decision making and provide purposeful employment in a
diverse and inclusive workplace.
We continue to take action on climate and make good progress towards achieving
our 2030 milestone in support of our Net-Zero commitment by 2050. Our
investments to reduce our reliance on fossil fuels and make our operations
more energy efficient are progressing well, most notably the modernisation
investment at our Dynas mill (Sweden) and the installation of a power boiler
at our Richards Bay mill (South Africa).
Business unit review
Corrugated Packaging
Mondi is a leading producer of corrugated packaging with a cost-competitive
asset base and strong customer offering focused on quality and reliability. We
are the leading virgin containerboard producer in Europe and the largest
containerboard producer in emerging Europe. Our virgin containerboard is a
high-quality product with excellent properties for specialised end-use
applications, ideal to meet our customers' needs around the globe.
We are also a leading corrugated solutions producer across central and
emerging Europe. We leverage our integrated production network and partner
with our customers to create fully recyclable corrugated boxes and packaging.
€ million, except for percentages Six months ended 30 June 2024 Six months ended 30 June 2023 Six months ended 31 December 2023
Segment revenue 1,103 1,187 1,093
Underlying EBITDA 143 188 122
Underlying EBITDA margin 13.0% 15.8% 11.2%
ROCE 5.2% 15.8% 7.7%
Corrugated Packaging delivered underlying EBITDA of €143 million with a
margin of 13.0%. This was down on the prior year (H1 2023: €188 million,
15.8%) mainly due to lower average containerboard selling prices and
inflationary personnel and operating cost pressures exceeding the benefit of
lower input costs. Corrugated Solutions delivered a stable financial
performance.
In Containerboard, our sales volumes were broadly flat compared to the
comparable prior year period as the business continued to deliver its strong
customer offering with its broad range of high-quality paper grades. Selling
price increases were successfully achieved during the period across all paper
grades. Average prices for the period were however below average prices in the
first half of 2023 and at similar levels to the second half of 2023. As we
enter the second half of the year, prices are now higher than the first half
of 2024.
Corrugated Solutions achieved 3% box volume growth compared to H1 2023
supported by the growing demand for eCommerce and sustainable packaging
solutions, together with improving demand in consumer end-use applications. We
anticipate recent paper price increases to be passed through our converting
operations as we progress through the second half of the year.
We continue to invest through-cycle in our high-quality asset base. In
Containerboard, we are ramping up capacity following the completion of our
€125 million modernisation investment at our Kuopio mill (Finland). This
project will increase semi-chemical fluting capacity by 55,000 tonnes while
enhancing efficiency and improving environmental performance. We have also
recently completed the €95 million debottlenecking project at our Swiecie
mill (Poland) which will increase kraftliner capacity by 55,000 tonnes. Our
€200 million investment at our Duino mill (Italy) to convert the existing
paper machine into a high-quality, cost-competitive recycled containerboard
machine with an annual capacity of 420,000 tonnes is ongoing. Start-up of the
machine is expected in the first half of 2025.
In our Corrugated Solutions' converting operations, we recently started up the
investments at our Simet and Warsaw plants in Poland, transforming these sites
into state-of-the-art corrugated packaging facilities tailored to serve the
specialised needs of our customers in Poland and beyond.
Flexible Packaging
We are a global flexible packaging producer, integrated across the value chain
with a unique portfolio of solutions. As a global leader in the production of
kraft paper and paper bags, our well-invested mills produce high-quality kraft
paper that is converted into strong, lightweight paper-based packaging. With
our high level of integration across the value chain, our customers come to us
for scale, security of supply and global reach.
We are also a leading producer of consumer flexible packaging in Europe and
have broad coating capabilities which together provide an extensive and unique
range of paper, plastic and hybrid packaging solutions.
€ million, except for percentages Six months ended 30 June 2024 Six months ended 30 June 2023 Six months ended 31 December 2023
Segment revenue 2,024 2,062 1,804
Underlying EBITDA 276 343 294
Underlying EBITDA margin 13.6% 16.6% 16.3%
ROCE 12.1% 17.2% 14.4%
Flexible Packaging's underlying EBITDA was €276 million with margin of
13.6% (H1 2023: €343 million, 16.6%) as higher sales volumes and reduced
input costs were offset by lower average selling prices, inflationary
personnel and operating cost pressures and a €32 million one-off currency
loss from the devaluation of the Egyptian pound in the period, as previously
reported.
In Kraft Paper, improvements in market demand and our continued focus on
innovative solutions supporting our customers seeking sustainable packaging
solutions, led to higher sales volumes compared to H1 2023. As a response to
stronger order books, the business successfully achieved selling price
increases during the period. As we enter the second half of the year, prices
are now higher than the first half of 2024.
In Paper Bags, sales volumes were at similar levels to the prior year but
improved as we progressed over the period. Average pricing was however lower
compared to H1 2023 mainly as a result of lower paper input costs. We
anticipate recent paper price increases will be passed through our converting
operations as we progress through the second half of the year.
Consumer Flexibles and Functional Paper and Films delivered good performances
with improved margins compared to the H1 2023, continuing to offer customers a
broad range of innovative packaging solutions.
We are making good progress on our organic growth investments across our
platform. Our €400 million investment in a new 210,000 tonne per annum kraft
paper machine and pulp mill upgrade at our Steti mill (Czech Republic) is
progressing well, with ramp up expected from the first half of 2025. We also
have a number of investments across our converting plant network including
expanding and upgrading the global reach of our paper bag network, investments
to consolidate our leading position in European pet food packaging, and
projects to enhance our European coating capabilities.
During the period we completed the acquisition of the Hinton Pulp mill in
Alberta (Canada) for USD 5 million and have a strong leadership team in place
focused on optimising the pulp mill and undertaking feasibility studies for a
kraft paper machine. The mill has the capacity to produce around 250,000
tonnes of pulp per annum and provides the Group with access to local,
high-quality fibre from a well-established wood basket.
Uncoated Fine Paper
Our Uncoated Fine Paper business produces a wide range of home, office,
converting and professional printing papers at our mills in central Europe and
South Africa. We have strong customer relationships, leveraging our leading
positions in these regions. We also produce and sell market pulp to customers
around the world.
€ million, except for percentages Six months ended 30 June 2024 Six months ended 30 June 2023 Six months ended 31 December 2023
Segment revenue 669 690 602
Underlying EBITDA 166 168 121
Forestry fair value gain 49 86 42
Underlying EBITDA excluding forestry fair value gain 117 82 79
Underlying EBITDA margin 24.8% 24.3% 20.1%
ROCE 20.1% 33.2% 20.6%
In Uncoated Fine Paper, underlying EBITDA was €166 million with margin of
24.8%. The business delivered higher sales volumes and exhibited good cost
control, however lower average selling prices and a lower forestry fair value
gain resulted in a similar underlying EBITDA to the prior year (H1 2023:
€168 million).
European uncoated fine paper market conditions improved while in South Africa,
market demand was lower than the comparable prior year period.
Uncoated fine paper price increases were implemented at the start and during
the period. As we enter the second half of the year, prices are broadly in
line with H1 2024 average prices. Pulp prices increased sharply during the
period and were on average similar to the comparative prior year period.
The forestry fair value gain was €49 million in the first half of 2024 (H1
2023: €86 million). Due to the decrease in wood prices in South Africa since
the balance sheet date, current prices would likely lead to a forestry fair
value loss in the second half of 2024.
Our Uncoated Fine Paper business remains well placed, with strong customer
relationships, underpinned by a broad product portfolio, integrated asset base
and excellent service.
Finance review
Group performance
Mondi delivered Group revenue of €3,739 million and underlying EBITDA of
€565 million (H1 2023: €3,881 million and €680 million,
respectively). Lower average selling prices and inflationary personnel and
operating cost pressures mitigated by a reduction in input costs led to an
underlying EBITDA margin of 15.1% (H1 2023: 17.5%).
Personnel, maintenance and other net operating expenses were higher compared
to H1 2023 driven by inflationary cost pressures, a lower forestry fair value
gain, a one-off currency loss in the period from the devaluation of the
Egyptian pound and income received in the prior year from an insurance claim.
The impact of maintenance shuts during the period was lower than previously
expected due to the rescheduling of the maintenance shut at our Richards Bay
mill (South Africa) from the second quarter of the year to the third quarter.
We therefore expect the underlying EBITDA impact from shuts in the second half
of the year to be around €80 million when compared to around €20 million
impact in the first half of the year.
Depreciation and amortisation charges of €210 million were up year-on-year
(H1 2023: €199 million) as a result of the Group's ongoing capital
investment programme. We continue to expect the full year's charges at
€425-450 million.
Net finance costs of €31 million were lower than the comparable period (H1
2023: €43 million) driven mainly by currency mix effects. Following the
issuance of a €500 million Eurobond in May 2024, further strengthening the
liquidity position and extending the maturity profile of the Group's debt, our
full year expectation for net finance costs is around €80 million.
The underlying tax charge for the year was €71 million giving an effective
tax rate of 22.0% (H1 2023: €102 million, 23.2%). We expect the full year's
effective tax rate to remain around 22-23%.
The Group paid a €1.60 per share special dividend to shareholders during the
period, returning the net proceeds received from the sale of all the Group's
Russian assets as planned. The special dividend was accompanied by a share
consolidation whereby shareholders received 10 new ordinary shares for every
11 existing ordinary shares held. Including the impact of the share
consolidation, basic underlying earnings were 50.5 euro cents per share (H1
2023: 67.0 euro cents per share based on weighted average number of shares
prior to consolidation).
After taking the effect of special items into account, which comprised the
closure of a paper bags plant in Maastricht, Netherlands (€14 million) and
costs relating to the aborted all-share combination with DS Smith plc (€13
million), basic earnings were 44.5 euro cents per share (H1 2023: 63.7 euro
cents per share, special items after tax charge of €16 million).
Return on capital employed was 10.8% (31 December 2023: 12.8%), calculated on
a rolling 12-months basis.
Cash flow
Cash generated from operations was €372 million (H1 2023: €554 million),
which included an increase in working capital of €160 million in line with
the improving market environment in the period (H1 2023: €37 million). As a
percentage of revenue, working capital was broadly in line with the first half
of last year at 17.9% (H1 2023: 17.0%). We expect this to reduce over the
second half of the year and end the year towards our 12-14% through-cycle
range.
Capital expenditure cash payments were €397 million (H1 2023: €310
million) as we progress with our organic growth investment projects. Our total
capital expenditure cash payments in 2024 are expected to be towards the upper
end of our previously guided range at around €900 million due to the timing
of expected cash payments.
Tax paid was €71 million (H1 2023: €91 million) and interest paid was
€61 million (H1 2023: €68 million) including derivative interest.
The Group returned €978 million of dividends to shareholders during the
period. This comprised the payment of the 2023 final ordinary dividend in May
2024 totalling €209 million (H1 2023: €231 million) and a €1.60 per
share special dividend in February 2024 from the disposal of the Group's
Russian operations in 2023 totalling €769 million.
Liquidity, treasury and borrowings
The Group continues to maintain a strong financial position. Net debt at 30
June 2024 was €1,603 million, up from €419 million at 31 December 2023,
due to the ongoing investment in the business and the payment of dividends to
shareholders. Net debt at 31 December 2023 included the proceeds received in
2023 from the disposal of the Group's previously owned Russian operations,
which were subsequently distributed to shareholders in February 2024. As a
result, net debt to underlying EBITDA at 30 June 2024 was 1.5 times
(31 December 2023: 0.3 times).
In April 2024, the Group redeemed a €500 million Eurobond on maturity and in
May 2024, issued a 3.750% €500 million Eurobond with an 8-year tenor,
thereby extending the Group’s maturity profile and further strengthen our
liquidity position. At 30 June 2024, we had available liquidity of
€1.2 billion comprising €754 million of undrawn committed debt
facilities and cash and cash equivalents of €411 million. The weighted
average maturity of our committed debt facilities was 3.9 years at 30 June
2024 with no significant short-term debt maturities. Our financing agreements
do not contain financial covenants.
The Group maintains its investment grade credit ratings and has an A- (stable
outlook) credit rating from Standard & Poor’s and a Baa1 (stable outlook)
credit rating from Moody’s Investors Service.
Principal risks and uncertainties
The Board is responsible for the effectiveness of the Group’s risk
management activities and internal control processes. It has put procedures in
place for identifying, evaluating, and managing the risks faced by the Group.
In combination with the Audit Committee, the Board conducted, in 2024, a
robust assessment of the Group’s principal and emerging risks to which Mondi
is exposed and it is satisfied that the Group has effective systems and
controls in place to manage these risks within the risk appetite levels
established.
There were no changes to the Group’s principal risks as set out on pages 69
to 79 of the Integrated report and financial statements 2023.
Risk management is by its nature a dynamic and ongoing process. Risk
management is of key importance given the diversity of the Group’s
locations, markets and production processes. Our internal controls aim to
provide reasonable assurance as to the accuracy, reliability and integrity of
our financial information, non-financial disclosures and the Group’s
compliance with applicable laws, regulations and internal policies as well as
the effectiveness of internal processes.
Strategic risks
The industries and geographies in which we operate expose us to specific
long-term risks which are accepted by the Board as a consequence of the
Group’s chosen strategy and operating footprint.
We continue to monitor recent capacity announcements, demand developments and
how consumers are demanding more sustainable packaging. We continue to develop
our understanding of climate change risks and its impact whilst continuing to
improve our disclosures and improve our responses.
The Executive Committee and Board monitor our exposure to these risks and
evaluate investment decisions against our overall exposures so that our
strategic capital allocation takes advantage of the opportunities arising from
our deliberate exposure to such risks.
Our principal strategic risks relate to the following:
• Industry productive capacity
• Product substitution
• Fluctuations and variability in selling prices or gross
margins
• Country risk
• Climate change risks
Financial risks
We aim to maintain an appropriate capital structure and to manage our
financial risk exposures in compliance with all laws and regulations.
An attentive approach to financial risk management remains in response to tax
risks and ongoing short-term currency volatility.
Our principal financial risks relate to the following:
• Capital structure
• Currency risk
• Tax risk
Operational risks
As a Group we focus on operational excellence and investment in our people and
are committed to the responsible use of resources.
Our investments to improve our energy efficiency, engineer out our most
significant safety risks and improve operating efficiencies reduce the
likelihood of operational risk events.
Our principal operational risks relate to the following:
• Cost and availability of raw materials
• Energy security and related input costs
• Technical integrity of our operating assets
• Environmental impact
• Employee and contractor health and safety
• Attraction and retention of key skills and talent
• Cyber security risk
Compliance risk
We have a zero tolerance approach to non-compliance. Our strong culture and
values underpin our approach. These are emphasised in every part of our
business with a focus on integrity, honesty and transparency.
Our principal compliance risk relates to Reputational risk.
Going concern
The directors have reviewed the Group’s current financial position and
performance expectations for the period until 31 December 2025, including
consideration of the principal risks which may impact the Group’s
performance in the near term.
The Group continues to maintain a strong financial position. Net debt at 30
June 2024 was €1,603 million, up from €419 million at 31 December 2023,
due to the ongoing investment in the business and the payment of dividends to
shareholders. Net debt at 31 December 2023 included the proceeds received in
2023 from the disposal of the Group's previously owned Russian operations,
which were subsequently distributed to shareholders in February 2024. As a
result, net debt to underlying EBITDA at 30 June 2024 was 1.5 times
(31 December 2023: 0.3 times).
In April 2024, the Group redeemed a €500 million Eurobond on maturity and in
May 2024, issued a 3.750% €500 million Eurobond with an 8-year tenor,
thereby extending the Group’s maturity profile and further strengthen our
liquidity position. At 30 June 2024, we had available liquidity of
€1.2 billion comprising €754 million of undrawn committed debt
facilities and cash and cash equivalents of €411 million. The weighted
average maturity of our committed debt facilities was 3.9 years at 30 June
2024 with no significant short-term debt maturities. Our financing agreements
do not contain financial covenants.
The Group has prepared a base case forecast reflecting recent trading
performance in the first half of the year and expectations for market
developments over the period to 31 December 2025. The base case forecast was
sensitised to reflect a severe but plausible downside scenario including
possible future impacts of the principal risks on Group performance. In such a
scenario, there remains significant liquidity headroom.
In addition to its modelled downside going concern scenario, the Board has
reverse stress tested the model to determine the extent of downturn which
would result in no liquidity headroom. A decline of 73% to the planned
underlying EBITDA in the period until 31 December 2025, well in excess of that
contemplated in the severe but plausible downside scenario, would need to
persist throughout the observed period to result in no liquidity headroom,
which is considered very unlikely. This reverse stress test also does not
incorporate mitigating actions such as reductions and deferrals of capital and
operational expenditure or cash preservation responses, which the Group would
implement in such an event.
Following its assessment, the directors have formed a judgement, at the time
of approving the condensed consolidated financial statements, that there are
no material uncertainties that cast doubt on the Group’s going concern
status and that it is a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. For
this reason, the Group continues to adopt the going concern basis in preparing
the condensed consolidated financial statements for the six months ended 30
June 2024.
Enquiries
Investors/analysts:
Fiona Lawrence +44 742 587 8683
Mondi Group: Head of Investor Relations
Media:
Chris Gurney +44 799 004 3764
Mondi Group: Head of Corporate Communication
Richard Mountain +44 790 968 4466
FTI Consulting
Results presentation details
A webinar will be held today at 09:00 (BST), 10:00 (CET/SAST).
Event registration link:
https://storm-virtual-uk.zoom.us/webinar/register/WN_0pBl29kYTziAvbIBWkSXBw
Once registered, you will receive a confirmation email from ‘MONDI GROUP
Events’ with the webinar link and ID.
A replay will be available on our website within a couple hours after the end
of the live results presentation at:
https://www.mondigroup.com/investors/results-reports-and-presentations/
For any queries, please e-mail ir@mondigroup.com.
Directors’ responsibility statement
The directors confirm that to the best of their knowledge:
• the condensed consolidated financial statements of the
Group have been prepared in accordance with International Accounting Standard
34, ‘Interim Financial Reporting’, as adopted for use in the United
Kingdom and the Disclosure Guidance and Transparency Rules sourcebook of the
United Kingdom’s Financial Conduct Authority and that the half-year results
announcement includes a fair review of the information required by DTR 4.2.7
and DTR 4.2.8, namely:
• the half-year results announcement includes a fair
review of the significant events during the six months ended 30 June 2024 and
their impact on the condensed consolidated financial statements and a
description of the principal risks and uncertainties for the remaining six
months of the year ending 31 December 2024;
• there have been no significant individual related party
transactions during the first six months of the financial year; and
• there have been no significant changes in the Group’s
related party relationships from those reported in the Integrated report and
financial statements 2023.
The Group’s condensed consolidated financial statements, and related notes,
were approved by the Board and authorised for issue on 31 July 2024 and were
signed on its behalf by:
Andrew King Mike Powell
Director Director
31 July 2024
Independent review report to Mondi plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Mondi plc’s condensed consolidated interim financial
statements (the “interim financial statements”) in the half year results
announcement of Mondi plc for the six month period ended 30 June 2024 (the
“period”).
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, ‘Interim Financial Reporting’ and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom’s Financial Conduct
Authority.
The interim financial statements comprise:
• the condensed consolidated statement of financial
position as at 30 June 2024;
• the condensed consolidated income statement and the
condensed consolidated statement of comprehensive income for the period then
ended;
• the condensed consolidated statement of cash flows for
the period then ended;
• the condensed consolidated statement of changes in
equity for the period then ended; and
• the explanatory notes to the interim financial
statements.
The interim financial statements included in the half year results
announcement of Mondi plc have been prepared in accordance with UK adopted
International Accounting Standard 34, ‘Interim Financial Reporting’ and
the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom’s Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, ‘Review of Interim Financial Information Performed by
the Independent Auditor of the Entity’ issued by the Financial Reporting
Council for use in the United Kingdom (“ISRE (UK) 2410”). A review of
interim financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the half year results
announcement and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half year results announcement, including the interim financial
statements, is the responsibility of, and has been approved by the directors.
The directors are responsible for preparing the half year results announcement
in accordance with the Disclosure Guidance and Transparency Rules sourcebook
of the United Kingdom’s Financial Conduct Authority. In preparing the half
year results announcement, including the interim financial statements, the
directors are responsible for assessing the group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend
to liquidate the group or to cease operations, or have no realistic
alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the half year results announcement based on our review. Our
conclusion, including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom’s Financial Conduct Authority and for no other purpose.
We do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
31 July 2024
Condensed consolidated income statement
for the six months ended 30 June 2024
Six months ended 30 June 2024 Six months ended 30 June 2023
€ million Notes Underlying Special items (Note 4) Total Underlying Special items (Note 4) Total
From continuing operations
Group revenue 3 3,739 — 3,739 3,881 — 3,881
Materials, energy and consumables used (1,859) — (1,859) (2,113) — (2,113)
Variable selling expenses (331) — (331) (333) — (333)
Gross margin 1,549 — 1,549 1,435 — 1,435
Maintenance and other indirect expenses (180) — (180) (170) — (170)
Personnel costs (612) (12) (624) (554) (7) (561)
Other net operating expenses (192) (15) (207) (31) (11) (42)
EBITDA 3 565 (27) 538 680 (18) 662
Depreciation, amortisation and impairments (210) — (210) (199) (3) (202)
Operating profit 3 355 (27) 328 481 (21) 460
Net loss from joint ventures (2) — (2) (2) — (2)
Net monetary gain arising from hyperinflationary economies 1 — 1 3 — 3
Investment income 19 — 19 14 — 14
Foreign currency losses (3) — (3) — — —
Finance costs (47) — (47) (57) — (57)
Profit before tax 323 (27) 296 439 (21) 418
Tax (charge)/credit 6 (71) — (71) (102) 5 (97)
Profit from continuing operations 252 (27) 225 337 (16) 321
From discontinued operations
Loss from discontinued operations 1 — (4)
Profit for the period 225 317
Attributable to:
Non-controlling interests 26 12
Shareholders 199 305
Earnings per share (EPS) attributable to shareholders 2
euro cents
From continuing operations
Basic EPS 7 44.5 63.7
Diluted EPS 7 44.5 63.7
Basic underlying EPS 7 50.5 67.0
Diluted underlying EPS 7 50.5 67.0
From continuing and discontinued operations
Basic EPS 7 44.5 62.9
Diluted EPS 7 44.5 62.9
Notes:
1 Discontinued operations represent the Group’s Russian packaging
operations and the Syktyvkar mill until the disposal completed on 30 June 2023
and 4 October 2023, respectively. Details on the transaction and information
on the financial performance and cash flows of the discontinued operations for
the year ended 31 December 2023 were disclosed in note 28 of the Group’s
Integrated report and financial statements 2023.
2 On 13 February 2024, the Group returned the net proceeds from the sale of
the Group’s Russian assets to its shareholders by way of a special dividend.
In addition, in order to maintain the comparability, so far as possible, of
Mondi plc’s share price before and after the special dividend, the special
dividend was accompanied by a share consolidation, which took effect on
29 January 2024, resulting in shareholders receiving 10 new ordinary shares
for every 11 existing ordinary shares. Further details are provided in notes
7, 8 and 10.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2024
€ million Six months ended 30 June 2024 Six months ended 30 June 2023
Profit for the period 225 317
Items that may subsequently be or have been reclassified to the condensed consolidated income statement
Fair value losses arising from cash flow hedges of continuing operations (2) —
Exchange differences on translation of foreign continuing non-euro operations 52 (106)
Exchange differences on translation of foreign discontinued non-euro operations — (192)
Reclassification of foreign currency translation reserve to the condensed consolidated income statement on disposal of business of discontinued operations — 34
Items that will not subsequently be reclassified to the condensed consolidated income statement
Remeasurements of retirement benefits plans of continuing operations 4 (12)
Remeasurements of retirement benefits plans of discontinued operations — 2
Tax effect thereof (1) 3
Other comprehensive income/(expense) for the period 53 (271)
Total comprehensive income for the period 278 46
Attributable to:
Non-controlling interests 33 —
Shareholders 245 46
Total comprehensive income/(expense) for the period attributable to shareholders arises from:
Continuing operations 245 206
Discontinued operations — (160)
Condensed consolidated statement of financial position
as at 30 June 2024
€ million Notes As at 30 June 2024 As at 31 December 2023
Property, plant and equipment 4,835 4,619
Goodwill 766 765
Intangible assets 70 68
Forestry assets 9 567 519
Investments in joint ventures 6 8
Financial instruments 29 28
Deferred tax assets 18 24
Net retirement benefits asset 5 5
Other non-current assets 3 5
Total non-current assets 6,299 6,041
Inventories 1,138 1,049
Trade and other receivables 1,552 1,254
Current tax assets 20 14
Financial instruments 11 14
Cash and cash equivalents 13b 415 1,592
Total current assets 3,136 3,923
Total assets 9,435 9,964
Short-term borrowings 11 (61) (559)
Trade and other payables (1,353) (1,219)
Current tax liabilities (56) (78)
Provisions (37) (21)
Financial instruments (12) (4)
Total current liabilities (1,519) (1,881)
Medium and long-term borrowings 11 (1,959) (1,460)
Net retirement benefits liability (154) (159)
Deferred tax liabilities (354) (322)
Provisions (31) (27)
Other non-current liabilities (18) (19)
Total non-current liabilities (2,516) (1,987)
Total liabilities (4,035) (3,868)
Net assets 5,400 6,096
Equity
Share capital 10 97 97
Own shares (14) (17)
Retained earnings 4,663 5,434
Other reserves 181 141
Total attributable to shareholders 4,927 5,655
Non-controlling interests in equity 473 441
Total equity 5,400 6,096
The Group’s condensed consolidated financial statements, and related notes 1
to 18, were approved by the Board and authorised for issue on 31 July 2024 and
were signed on its behalf by:
Andrew King Mike Powell
Director Director
Mondi plc company registered number: 6209386
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2024
€ million Equity attributable to shareholders Non-controlling interests Total equity
At 1 January 2024 5,655 441 6,096
Total comprehensive income for the period 245 33 278
Profit for the period 199 26 225
Other comprehensive income 46 7 53
Hyperinflation monetary adjustment 4 — 4
Transactions with shareholders in their capacity as shareholders
Dividends (978) (4) (982)
Purchases of own shares (5) — (5)
Injection from non-controlling interests — 3 3
Other 6 — 6
At 30 June 2024 4,927 473 5,400
€ million Equity attributable to shareholders Non-controlling interests Total equity
At 1 January 2023 5,794 460 6,254
Total comprehensive income for the period 46 — 46
Profit for the period 305 12 317
Other comprehensive expense (259) (12) (271)
Hyperinflation monetary adjustment 5 — 5
Transactions with shareholders in their capacity as shareholders
Dividends (231) (4) (235)
Purchases of own shares (4) — (4)
Non-controlling interests bought out 21 (28) (7)
Other 4 — 4
At 30 June 2023 5,635 428 6,063
Equity attributable to shareholders
€ million As at 30 June 2024 As at 31 December 2023
Share capital 97 97
Own shares (14) (17)
Retained earnings 4,663 5,434
Cumulative translation adjustment reserve (475) (520)
Post-retirement benefits reserve (53) (53)
Share-based payment reserve 15 19
Cash flow hedge reserve — 1
Merger reserve 667 667
Other sundry reserves 27 27
Total 4,927 5,655
Condensed consolidated statement of cash flows
for the six months ended 30 June 2024
€ million Notes Six months ended 30 June 2024 Six months ended 30 June 2023
Cash flows from operating activities
Cash generated from continuing operations 13a 372 554
Income tax paid (71) (91)
Net cash generated from operating activities from discontinued operations — 159
Net cash generated from operating activities 301 622
Cash flows from investing activities
Investment in property, plant and equipment (397) (310)
Investment in intangible assets (8) (6)
Investment in forestry assets 9 (23) (22)
Proceeds from the disposal of property, plant and equipment 3 2
Proceeds from the disposal of financial asset investments — 1
Acquisition of businesses, net of cash and cash equivalents 12 (6) (37)
Loans advanced to related and external parties (1) (1)
Interest received 22 12
Other investing activities 11 17
Net cash used in investing activities from discontinued operations — (10)
Net cash used in investing activities (399) (354)
Cash flows from financing activities
Proceeds from issue of Eurobond 11 496 —
Repayment of Eurobond 11 (500) —
Proceeds from other medium and long-term borrowings 13c 215 —
Repayment of other medium and long-term borrowings 13c (215) —
Proceeds from short-term borrowings 13c 8 17
Repayment of short-term borrowings 13c (11) (32)
Repayment of lease liabilities 13c (13) (11)
Interest paid (43) (42)
Dividends paid to shareholders 8 (978) (231)
Dividends paid to non-controlling interests (4) (4)
Purchases of own shares (5) (4)
Injection from non-controlling interests 3 —
Non-controlling interests bought out — (7)
Net cash outflow from debt-related derivative financial instruments 13c (23) (40)
Net cash used in financing activities from discontinued operations — (5)
Net cash used in financing activities (1,070) (359)
Net decrease in cash and cash equivalents (1,168) (91)
Cash and cash equivalents at beginning of period 1,592 1,381
Cash movement in the period 13c (1,168) (91)
Effects of changes in foreign exchange rates 13c (13) (99)
Cash and cash equivalents at end of period 13b 411 1,191
Notes to the condensed consolidated financial statements
for the six months ended 30 June 2024
1 Basis of preparation
These condensed consolidated financial statements as at and for the six months
ended 30 June 2024 comprise Mondi plc and its subsidiaries (referred to as the
‘Group’), and the Group’s share of the results and net assets of its
associates and joint ventures.
The Group’s condensed consolidated financial statements have been prepared
in accordance with International Accounting Standard 34, ‘Interim Financial
Reporting’ as adopted for use in the United Kingdom (UK) and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial
Conduct Authority. They should be read in conjunction with the Group’s
Integrated report and financial statements 2023, prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
The condensed consolidated financial statements have been prepared on a going
concern basis as discussed in the commentary under the heading ‘Going
concern’, which is incorporated by reference into these condensed
consolidated financial statements.
The financial information set out above does not constitute statutory accounts
as defined by section 434 of the Companies Act 2006. A copy of the statutory
accounts for the year ended 31 December 2023 has been delivered to the
Registrar of Companies. The auditors have reported on those accounts; their
report was (i) unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006. The financial information set out above has been
reviewed, not audited.
These condensed consolidated financial statements have been prepared on the
historical cost basis, as modified by forestry assets, pension assets, certain
financial assets and financial liabilities held at fair value through profit
and loss, assets acquired and liabilities assumed in a business combination
and accounting in hyperinflationary economies.
The preparation of these condensed consolidated financial statements includes
the use of estimates and assumptions. Although the estimates used are based on
management's best information about current circumstances and future events
and actions, actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, the critical
accounting judgements made by management in applying the Group’s accounting
policies and significant accounting estimates as identified in the Group’s
Integrated report and financial statements 2023 were the same. Refer to note 9
for details on the valuation of forestry assets.
2 Accounting policies
The same accounting policies, methods of computation and presentation have
been followed in the preparation of the condensed consolidated financial
statements for the six months ended 30 June 2024 as were applied in the
preparation of the Group’s annual financial statements for the year ended
31 December 2023, except as follows:
• A number of amendments to IFRS Accounting Standards
became effective for the financial period beginning on 1 January 2024, but the
Group did not have to change its accounting policies or make any retrospective
adjustments as a result of adopting these amendments.
• Consistent with previous half year reports, taxes on
income in the interim period are accrued using the tax rate that would be
applicable to expected total annual profits or losses. The Group’s
assessment of the OECD Pillar 2 model rules is provided in note 6.
Alternative Performance Measures
The Group presents certain measures of financial performance, position or cash
flows in the condensed consolidated financial statements that are not defined
or specified according to IFRS Accounting Standards. These measures, referred
to as APMs, are defined at the end of this document and where relevant
reconciled to IFRS Accounting Standards.
3 Operating segments
The Group’s operating segments are reported in a manner consistent with the
internal reporting provided to the Executive Committee, the chief operating
decision-making body. The operating segments are managed based on the nature
of the underlying products produced by those businesses and comprise three
distinct segments. Each of the operating segments represents a reportable
segment and derives its income from the sale of manufactured products.
Six months ended 30 June 20241
€ million, unless otherwise stated Corrugated Packaging Flexible Packaging Uncoated Fine Paper Corporate Intersegment elimination Total continuing operations
Segment revenue 1,103 2,024 669 — (57) 3,739
Internal revenue (11) (18) (28) — 57 —
External revenue 1,092 2,006 641 — — 3,739
Underlying EBITDA 143 276 166 (20) — 565
Depreciation (75) (95) (32) — — (202)
Amortisation (3) (4) (1) — — (8)
Underlying operating profit/(loss) 65 177 133 (20) — 355
Special items before tax — (14) — (13) — (27)
Capital employed 2,512 3,321 1,222 (52) — 7,003
Trailing 12-month average capital employed 2,074 3,039 1,097 (122) — 6,088
Additions to non-current non-financial assets 133 219 69 — — 421
Capital expenditure cash payments 137 218 42 — — 397
Underlying EBITDA margin (%) 13.0 13.6 24.8 — — 15.1
Return on capital employed (%) 5.2 12.1 20.1 — — 10.8
Average number of employees (thousands) 2 6.5 11.9 2.7 0.1 — 21.2
Notes:
1 See definitions of APMs at the end of this document.
2 Presented on a full time employee equivalent basis.
Six months ended 30 June 20231
€ million, unless otherwise stated Corrugated Packaging Flexible Packaging Uncoated Fine Paper Corporate Intersegment elimination Total continuing operations
Segment revenue 1,187 2,062 690 — (54) 3,885
Internal revenue 2 (13) (19) (26) — 54 (4)
External revenue 1,174 2,043 664 — — 3,881
Underlying EBITDA 188 343 168 (19) — 680
Depreciation (69) (88) (33) (1) — (191)
Amortisation (3) (4) (1) — — (8)
Underlying operating profit/(loss) 116 251 134 (20) — 481
Special items before tax — — (21) — — (21)
Capital employed 2,217 3,161 1,077 (49) — 6,406
Trailing 12-month average capital employed 2,092 3,045 1,064 (67) — 6,134
Additions to non-current non-financial assets 173 176 50 — — 399
Capital expenditure cash payments 132 154 24 — — 310
Underlying EBITDA margin (%) 15.8 16.6 24.3 — — 17.5
Return on capital employed (%) 15.8 17.2 33.2 — — 19.1
Average number of employees (thousands) 3 6.5 11.7 2.9 0.1 — 21.2
Notes:
1 See definitions of APMs at the end of this document.
2 Continuing operations' internal revenue of €4 million relates to
transactions with discontinued operations.
3 Presented on a full time employee equivalent basis.
Year ended 31 December 20231
€ million, unless otherwise stated Corrugated Packaging Flexible Packaging Uncoated Fine Paper Corporate Intersegment elimination Total continuing operations
Segment revenue 2,280 3,866 1,292 — (104) 7,334
Internal revenue 2 (23) (33) (52) — 104 (4)
External revenue 2,257 3,833 1,240 — — 7,330
Underlying EBITDA 310 637 289 (35) — 1,201
Depreciation and impairments 3 (144) (183) (66) (1) — (394)
Amortisation (7) (8) (2) — — (17)
Underlying operating profit/(loss) 159 446 221 (36) — 790
Special items before tax — — (27) — — (27)
Capital employed 2,318 3,167 1,095 (65) — 6,515
Trailing 12-month average capital employed 2,057 3,068 1,075 (65) — 6,135
Additions to non-current non-financial assets 379 427 129 — — 935
Capital expenditure cash payments 326 425 79 — — 830
Underlying EBITDA margin (%) 13.6 16.5 22.4 — — 16.4
Return on capital employed (%) 7.7 14.4 20.6 — — 12.8
Average number of employees (thousands) 4 6.5 11.6 2.8 0.1 — 21.0
Notes:
1 See definitions of APMs at the end of this document.
2 Continuing operations' internal revenue of €4 million relates to
transactions with discontinued operations.
3 Includes only impairment not classified as special items.
4 Presented on a full time employee equivalent basis.
External revenue by location of contribution and by location of customer
External revenue by location of contribution External revenue by location of customer
€ million Six months ended 30 June 2024 Six months ended 30 June 2023 Six months ended 30 June 2024 Six months ended 30 June 2023
Africa
South Africa 322 330 249 255
Rest of Africa 46 41 186 208
Africa total 368 371 435 463
Western Europe
Austria 657 749 85 90
Germany 284 312 478 520
United Kingdom 1 2 100 102
Rest of western Europe 336 434 839 932
Western Europe total 1,278 1,497 1,502 1,644
Emerging Europe
Czech Republic 370 355 130 134
Poland 648 657 366 368
Turkiye 225 171 254 210
Rest of emerging Europe 474 484 269 270
Emerging Europe total 1,717 1,667 1,019 982
North America 325 302 423 444
South America 5 — 43 50
Asia and Australia 46 44 317 298
Group revenue from continuing operations 3,739 3,881 3,739 3,881
4 Special items
The Group separately discloses special items, an APM as defined at the end of
this document, on the face of the condensed consolidated income statement to
assist its stakeholders in understanding the underlying financial performance
achieved by the Group on a basis that is comparable from year to year.
€ million Six months ended 30 June 2024 Six months ended 30 June 2023
Operating special items
Impairment of assets — (3)
Restructuring and closure costs:
Personnel costs (12) (7)
Other restructuring and closure costs (2) (11)
Costs relating to the aborted all-share combination with DS Smith plc (13) —
Total special items before tax (27) (21)
Tax credit (see note 6) — 5
Total special items (27) (16)
The operating special items resulted in a cash outflow from operating
activities for the six months ended 30 June 2024 of €18 million (six months
ended 30 June 2023: €1 million).
The special items during the period ended 30 June 2024 comprised:
• Flexible Packaging
– Closure of a paper bags plant in Maastricht (Netherlands). Restructuring
and closure costs of €14 million were recognised.
• Corporate
– €13 million of costs relating to the aborted all-share combination
with DS Smith plc. On 19 April 2024, the Board announced it did not intend to
make an offer for DS Smith plc following a period of due diligence and after
carefully considering the value the all-share combination with DS Smith plc
would deliver to Mondi's shareholders.
Details of the special items for the year ended 31 December 2023 were
disclosed in note 3 of the Group’s Integrated report and financial
statements 2023.
5 Write-down of inventories to net realisable value
€ million Six months ended 30 June 2024 Six months ended 30 June 2023
Write-down of inventories to net realisable value (43) (50)
Aggregate reversal of previous write-downs of inventories 34 29
The reversal of previous write-downs of inventories relates to goods that had
been written down to net realisable value and were subsequently sold above
their carrying value.
6 Tax charge
The Group’s effective tax rate before special items, an APM as defined at
the end of this document, was 22.0% for the six months ended 30 June 2024 (six
months ended 30 June 2023: 23.2%).
€ million Six months ended 30 June 2024 Six months ended 30 June 2023
UK corporation tax at 25% (2023: 23.5%) — —
Overseas tax 48 67
Current tax in respect of prior periods (3) (3)
Current tax 45 64
Deferred tax in respect of the current period 26 53
Deferred tax in respect of prior periods — (15)
Tax charge before special items 71 102
Current tax on special items — (5)
Tax credit on special items (see note 4) — (5)
Tax charge for the period 71 97
Current tax charge 45 59
Deferred tax charge 26 38
On 24 May 2021, legislation was substantively enacted in the UK to increase
the corporate tax rate from 19% to 25% with effect from 1 April 2023. In the
year ended 31 December 2023, the 23.5% UK corporation tax rate referenced in
the table above reflects the average tax rate that has applied during the
year.
The Group is within the scope of the OECD Pillar 2 model rules as of 1 January
2024. It is expected that the effective tax rate (as calculated under the
Pillar 2 rules) in the majority of countries in which the Group operates will
exceed 15% for the year ending 31 December 2024. Additional Pillar 2 top-up
tax of €0.3m has been included within the current tax charge for the six
months ended 30 June 2024, mostly arising in a small number of jurisdictions
benefiting from tax incentives on capital investments and tax holidays.
7 Earnings per share (EPS)
On 13 February 2024, the Group returned the net proceeds from the sale of the
Group’s Russian assets to its shareholders by way of a special dividend (see
note 8). In addition, in order to maintain the comparability, so far as
possible, of Mondi plc’s share price before and after the special dividend,
the special dividend was accompanied by a share consolidation, which took
effect on 29 January 2024, resulting in shareholders receiving 10 new
ordinary shares for every 11 existing ordinary shares (see note 10).
The special dividend approximates the amount the Group would have paid if it
had repurchased the shares at market price. For calculating basic and diluted
EPS measures, the Board concluded that the overall effect of the share
consolidation and special dividend was a share repurchase at fair value.
Therefore, the reduction in the number of shares as a result of the share
consolidation was reflected in the denominator in the current year
prospectively from the day the dividend was paid (i.e. 13 February 2024).
The weighted average number of ordinary shares outstanding for 2023 was not
restated.
EPS attributable to shareholders
euro cents Six months ended 30 June 2024 Six months ended 30 June 2023
From continuing operations
Basic EPS 44.5 63.7
Diluted EPS 44.5 63.7
Basic underlying EPS 50.5 67.0
Diluted underlying EPS 50.5 67.0
From continuing and discontinued operations
Basic EPS 44.5 62.9
Diluted EPS 44.5 62.9
Basic headline EPS 41.8 92.8
Diluted headline EPS 41.8 92.8
The calculation of basic and diluted EPS, basic and diluted underlying EPS and
basic and diluted headline EPS is based on the following data:
Earnings
€ million Six months ended 30 June 2024 Six months ended 30 June 2023
Profit for the period attributable to shareholders 199 305
Arises from:
Continuing operations 199 309
Discontinued operations — (4)
Special items (see note 4) 27 21
Related tax (see note 4) — (5)
Total earnings for the period (prior to special items) 226 321
Arises from:
Continuing operations 226 325
Discontinued operations — (4)
Gain on disposal of property, plant and equipment (2) —
Restructuring costs (see note 4) (14) (18)
Costs relating to the aborted all-share combination with DS Smith plc (see note 4) (13) —
Gain on purchase of business before transaction-related costs (see note 12) (13) —
Loss arising from sale and leaseback transaction 3 —
Loss on disposal of business from discontinued operations — 46
Impairments included in loss from discontinued operations — 113
Related tax — (12)
Headline earnings for the period 187 450
Underlying earnings, total earnings (prior to special items) and headline
earnings represent APMs which are defined at the end of this document.
Weighted average number of shares
million Six months ended 30 June 2024 Six months ended 30 June 2023
Basic number of ordinary shares outstanding 447.2 485.1
Diluted number of ordinary shares outstanding 447.2 485.1
8 Dividends
The interim ordinary dividend for the year ending 31 December 2024 of 23.33
euro cents per ordinary share will be paid on Friday 27 September 2024 to
those shareholders on the register of Mondi plc on Friday 23 August 2024. The
dividend will be paid from distributable reserves of Mondi plc, as presented
in the annual financial statements for the year ended 31 December 2023. The
interim ordinary dividend is not recognised as a liability at 30 June 2024.
Six months ended 30 June 2024 Year ended 31 December 2023
euro cents € million euro cents € million
per share per share
Final ordinary dividend in respect of prior year 46.67 209 48.33 231
Special dividend 160.00 769 — —
Interim ordinary dividend in respect of current year 23.33 103 23.33 114
The interim ordinary dividend declared for the year ended 31 December 2023 of
23.33 euro cents per ordinary share was paid in September 2023.
On 13 February 2024, the Group returned the net proceeds from the sale of the
Group’s Russian assets to shareholders by way of a special dividend of
€1.60 per existing ordinary share (see note 10 for further details). The
final ordinary dividend for the year ended 31 December 2023 was declared
after the share consolidation took effect and therefore, was declared based on
the number of new ordinary shares.
Dividend timetable
The interim ordinary dividend for the year ending 31 December 2024 will be
paid in accordance with the following timetable:
Last date to trade shares cum-dividend
JSE Limited Tuesday 20 August 2024
London Stock Exchange Wednesday 21 August 2024
Shares commence trading ex-dividend
JSE Limited Wednesday 21 August 2024
London Stock Exchange Thursday 22 August 2024
Record date Friday 23 August 2024
Last date for receipt of Dividend Reinvestment Plan (DRIP) elections by Central Securities Depository Participants Thursday 29 August 2024
Last date for DRIP elections to UK Registrar and South African Transfer Secretaries
South African Register Friday 30 August 2024
UK Register Monday 9 September 2024
Payment Date Friday 27 September 2024
DRIP purchase settlement date (subject to market conditions and the purchase of shares in the open market)
UK Register Tuesday 1 October 2024
South African Register Friday 4 October 2024
Results of Dividend Reinvestment Plan announcement released Friday 11 October 2024
Currency conversion date
ZAR/euro Thursday 1 August 2024
Euro/sterling Friday 13 September 2024
Share certificates on Mondi plc's South African register may not be
dematerialised or rematerialised between Wednesday 21 August 2024 and Friday
23 August 2024, both dates inclusive, nor may transfers between the UK and
South African registers of Mondi plc take place between Wednesday 14
August 2024 and Friday 23 August 2024, both dates inclusive.
Information relating to the dividend tax to be withheld from Mondi plc
shareholders on the South African branch register will be announced
separately, together with the ZAR/euro exchange rate to be applied, on or
shortly after Thursday 1 August 2024.
9 Forestry assets
€ million As at 30 June 2024 As at 30 June 2023 As at 31 December 2023
At 1 January 519 485 485
Investment in forestry assets 23 22 48
Fair value gains 49 86 128
Felling costs (47) (41) (87)
Currency movements 23 (60) (55)
At 30 June / 31 December 567 492 519
The fair value of forestry assets is a level 3 measure in terms of the fair
value measurement hierarchy (see note 16), consistent with prior years. The
fair value of forestry assets continues to be determined using a market-based
approach. The valuation process and key observable inputs were largely
consistent with those applied for the year ended 31 December 2023, as
described in note 14 of the Group’s Integrated report and financial
statements 2023.
10 Share capital
On 13 February 2024, the Group returned the net proceeds from the sale of the
Group’s Russian assets to shareholders by way of a special dividend of
€1.60 per existing ordinary share. In addition, in order to maintain the
comparability, so far as possible, of Mondi plc’s share price before and
after the special dividend, the special dividend was accompanied by a share
consolidation, which took effect on 29 January 2024, resulting in shareholders
receiving 10 new ordinary shares with a nominal value of €0.22 each for
every 11 existing ordinary shares with a nominal value of €0.20 each.
To effect the share consolidation, the Group issued 3 additional ordinary
shares prior to the record date for the share consolidation, increasing the
number of ordinary shares from 485,553,780 ordinary shares to 485,553,783
ordinary shares, so that the number of the existing ordinary shares in issue
at the time of the consolidation was exactly divisible by 11, such that there
was no remaining fraction of a share. Following the share consolidation, the
total number of ordinary shares issued decreased by 44,141,253 ordinary shares
from 485,553,783 ordinary shares to 441,412,530 ordinary shares, while the
total nominal value of the share capital of the Group remained unchanged at
€97 million.
Number of shares € million
At 31 December 2023 1 485,553,780 97
Shares issued 3 —
Effect of share consolidation (44,141,253) —
At 30 June 2024 441,412,530 97
Note:
1 There were no movements in the share capital of Mondi plc in 2023.
11 Borrowings
Financing facilities
Group liquidity is provided through a range of committed debt facilities. The
principal loan arrangements in place are the following:
€ million Maturity Interest rate % As at 30 June 2024 As at 31 December 2023
Financing facilities
Syndicated Revolving Credit Facility June 2028 EURIBOR + margin 750 750
€500 million Eurobond April 2024 1.500% — 500
€600 million Eurobond April 2026 1.625% 600 600
€750 million Eurobond April 2028 2.375% 750 750
€500 million Eurobond May 2032 3.750% 500 —
Long Term Facility Agreement December 2026 EURIBOR + margin 17 20
Other Various Various 4 4
Total committed facilities 2,621 2,624
Drawn (1,867) (1,870)
Total committed facilities available 754 754
The Group’s Eurobonds incur a fixed rate of interest. Swap agreements are
utilised by the Group to raise non-euro-denominated currency to fund
subsidiaries' liquidity needs, thereby exposing the Group to floating interest
rates.
In April 2024, the Group repaid its €500 million Eurobond at maturity and,
in May 2024, issued a new €500 million 8 year Eurobond maturing in May 2032
at a coupon of 3.750% per annum. The new Eurobond was issued under the
Group’s Guaranteed Euro Medium Term Note Programme and the proceeds were
used for general corporate purposes.
The €750 million 5-year revolving multi-currency credit facility agreement
(RCF) incorporates key sustainability targets linked to MAP2030, classifying
the facility as a Sustainability Linked Loan. Under the terms of the
agreement, the margin will be adjusted according to the Group’s performance
against specified sustainability targets.
Short-term liquidity needs are met by cash and the RCF.
As at 30 June 2024, the Group had no financial covenants in any of its
financing facilities.
The Group currently has investment grade credit ratings from both Moody’s
Investors Service (Baa1, outlook stable) and Standard & Poor’s (A-, outlook
stable).
As at 30 June 2024 As at 31 December 2023
€ million Current Non-current Total Current Non-current Total
Secured
Lease liabilities 23 109 132 21 104 125
Total secured 23 109 132 21 104 125
Unsecured
Bonds — 1,841 1,841 500 1,345 1,845
Bank loans and overdrafts 38 9 47 38 11 49
Total unsecured 38 1,850 1,888 538 1,356 1,894
Total borrowings 61 1,959 2,020 559 1,460 2,019
Committed facilities drawn 1,867 1,870
Uncommitted facilities drawn 153 149
12 Business combinations
To 30 June 2024
On 5 February 2024, the Group announced the completion of the acquisition of
Hinton Pulp mill in Alberta (Canada) from West Fraser Timber Co. Ltd (West
Fraser) for an agreed consideration of USD 5 million, before working capital
adjustments. The mill has the capacity to produce around 250,000 tonnes of
pulp per annum and will provide the Group with access to local, high-quality
fibre from a well-established wood basket as part of a long-term partnership
with West Fraser. The Group intends to invest in the mill to improve
productivity and sustainability performance and, subject to pre-engineering
and permitting, expand the facility primarily with a new kraft paper machine
which will integrate its paper bag operations in the Americas and support
future growth.
Hinton's revenue for the six months ended 30 June 2024 was €64 million with
a loss after tax of €2 million. Since the date of acquisition, Hinton's
revenue of €51 million and profit after tax of €2 million have been
included in the condensed consolidated income statement.
Details of the net assets acquired, as adjusted from book to fair value, are
as follows:
€ million Fair value
Net assets acquired
Property, plant and equipment 4
Inventories 15
Trade and other receivables 17
Total assets 36
Trade and other payables (11)
Deferred tax liabilities (4)
Other provisions (2)
Total liabilities (17)
Net assets acquired 19
Gain on purchase before transaction-related costs (13)
Net cash paid per condensed consolidated statement of cash flows 6
Transaction costs of €4 million were charged to other net operating expenses
in the condensed consolidated income statement.
The acquisition is a purchase of assets that constitutes a business accounted
for under IFRS 3, 'Business Combinations'. The purchase price allocation
resulted in a net gain on purchase of €9 million, net of transaction-related
costs, as the fair value of net assets acquired was in excess of the
consideration paid. The gain on purchase is attributable to the mill’s
loss-making operations at the time of the transaction and the need for
investment to improve productivity and sustainability performance. The gain
was recognised in other net operating expenses in the condensed consolidated
income statement.
The fair values of assets acquired and liabilities assumed in business
combinations are level 3 measures in terms of the fair value measurement
hierarchy. Property, plant and equipment has been measured at fair value using
relevant valuation methods accepted under IFRS 13, 'Fair Value Measurement',
with related deferred tax adjustments. Management has considered the impact of
environmental and climate risks on the estimated fair values of Hinton's
property, plant and equipment. These considerations did not have a material
impact. The fair value accounting of this acquisition is provisional pending
final determination of the fair value of the assets and liabilities acquired.
In particular, the fair values of the assets and liabilities disclosed above
have only been determined provisionally because the independent valuations
have not been finalised. If necessary, any adjustments to the fair values
recognised will be made within 12 months of the acquisition date.
To 31 December 2023
On 12 January 2023, the Group completed the acquisition of the Duino mill near
Trieste (Italy) from the Burgo Group. Details of this business combination
were disclosed in note 25 of the Group’s Integrated report and financial
statements 2023.
13 Consolidated cash flow analysis
(a) Reconciliation of profit before tax from continuing operations to cash
generated from continuing operations
€ million Six months ended 30 June 2024 Six months ended 30 June 2023
Profit before tax from continuing operations 296 418
Depreciation and amortisation 210 199
Share-based payments 6 5
Net pre-tax cash flow effect of current and prior period special items 9 20
Net finance costs 31 43
Net monetary gain arising from hyperinflationary economies (1) (3)
Net loss from joint ventures 2 2
Increase/(decrease) in provisions 8 (16)
Decrease in net retirement benefits (5) (10)
Movement in working capital (160) (37)
(Increase)/decrease in inventories (50) 152
(Increase)/decrease in operating receivables (275) 19
Increase/(decrease) in operating payables 165 (208)
Fair value gains on forestry assets (49) (86)
Felling costs 47 41
Net (gain)/loss on disposal of property, plant and equipment (2) 1
Insurance reimbursements for property damages (11) (17)
Other adjustments (9) (6)
Cash generated from continuing operations 372 554
(b) Cash and cash equivalents
€ million As at 30 June 2024 As at 30 June 2023 As at 31 December 2023
Cash and cash equivalents per condensed consolidated statement of financial position 415 857 1,592
Bank overdrafts included in short-term borrowings (4) (20) —
Cash and cash equivalents held by continuing operations (see note 13c) 411 837 1,592
Cash and cash equivalents classified as assets held for sale — 354 —
Cash and cash equivalents per condensed consolidated statement of cash flows 411 1,191 1,592
The cash and cash equivalents of €415 million (as at 31 December 2023:
€1,592 million) include money market funds of €216 million (as at 31
December 2023: €840 million) valued at fair value through profit and loss,
with the remaining balance carried at amortised cost.
The Group operates in certain countries where the existence of exchange
controls or access to hard currency may restrict the use of certain cash
balances outside of those countries. These restrictions are not expected to
have any material effect on the Group’s ability to meet its ongoing
obligations.
The fair value of cash and cash equivalents carried at amortised cost
approximate their carrying values presented.
(c) Movement in net debt
The Group’s net debt position is as follows:
€ million Cash and cash equivalents Current financial asset investments 1 Debt due within one year 2 Debt due after one year Debt-related derivative financial instruments Total net debt
At 1 January 2024 1,592 1 (559) (1,460) 7 (419)
Cash flow (1,168) — 516 (496) 23 (1,125)
Cash movement in the period (1,168) — — — — (1,168)
Proceeds from issue of Eurobond — — — (496) — (496)
Repayment of Eurobond — — 500 — — 500
Proceeds from borrowings — — (8) (215) — (223)
Repayment of borrowings — — 11 215 — 226
Repayment of lease liabilities — — 13 — — 13
Net cash outflow from debt-related derivative financial instruments — — — — 23 23
Additions to lease liabilities — — (7) (13) — (20)
Disposal of lease liabilities — — — 1 — 1
Movement in unamortised loan costs — — — (1) — (1)
Net movement in fair value of derivative financial instruments — — — — (29) (29)
Reclassification — — (12) 12 — —
Currency movements (13) — 5 (2) — (10)
At 30 June 2024 411 1 (57) (1,959) 1 (1,603)
€ million Cash and cash equivalents Current financial asset investments 1 Debt due within one year Debt due after one year Debt-related derivative financial instruments Total net debt
At 1 January 2023 1,061 1 (96) (1,970) (7) (1,011)
Cash flow (91) — 27 — 40 (24)
Cash movement from continuing operations (235) — — — — (235)
Proceeds from borrowings — — (17) — — (17)
Repayment of borrowings — — 32 — — 32
Repayment of lease liabilities — — 11 — — 11
Net cash outflow from debt-related derivative financial instruments — — — — 40 40
Discontinued operations 144 — 1 — — 145
Additions to lease liabilities — — (7) (11) — (18)
Disposal of lease liabilities — — — 1 — 1
Movement in unamortised loan costs — — — (1) — (1)
Net movement in fair value of derivative financial instruments — — — — (36) (36)
Reclassification — — (510) 510 — —
Elimination of assets and liabilities previously classified as held for sale (34) — (1) (19) — (54)
Currency movements (99) — 23 23 — (53)
At 30 June 2023 837 1 (564) (1,467) (3) (1,196)
Notes:
1 Included in financial instruments in the condensed consolidated statement
of financial position.
2 Excludes bank overdrafts of €4 million (as at 31 December 2023: €nil),
which are included in cash and cash equivalents (see note 13b)
The Group incurred interest expense of €52 million in relation to bank
overdrafts, loans and lease liabilities (six months ended 30 June 2023: €57
million). The Group paid €43 million (six months ended 30 June 2023:
€42 million) relating to interest on borrowings and €18 million (six
months ended 30 June 2023: €26 million) relating to forward exchange rates
on derivative contracts. The settlement of debt-related derivatives shown as
cash flow in the table above is recognised as net cash outflow from
debt-related derivative financial instruments in the condensed consolidated
statement of cash flows.
14 Capital commitments
As at 30 June 2024, capital expenditure contracted for but not recognised as
liabilities is €635 million (as at 31 December 2023: €634 million).
15 Contingent liabilities
There have been no significant changes to the nature of the contingent
liabilities as disclosed in note 30 of the Group’s Integrated report and
financial statements 2023.
16 Fair value measurement
Assets and liabilities that are measured at fair value, or where the fair
value of financial instruments has been disclosed in the notes to the
condensed consolidated financial statements, are based on the following fair
value measurement hierarchy:
• level 1 – quoted prices (unadjusted) in active markets for
identical assets or liabilities;
• level 2 – inputs other than quoted prices included within level 1
that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices); and
• level 3 – inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs).
The assets measured at fair value on level 3 of the fair value measurement
hierarchy are the Group’s forestry assets as set out in note 9 and certain
assets acquired or liabilities assumed in business combinations as set out in
note 12.
As at 30 June 2024, the fair value of level 2 derivative financial assets is
€11 million (as at 31 December 2023: €13 million), whereas the fair value
of level 2 derivative financial liabilities is €13 million (as at 31
December 2023: €4 million).
Cash and cash equivalents include money market funds, which are carried at
fair value through profit and loss, with the remaining balance carried at
amortised cost. As at 30 June 2024, the level 1 fair valued money market funds
are valued at €216 million (as at 31 December 2023: €840 million).
The Group did not measure any financial assets or financial liabilities at
fair value on a non-recurring basis as at 30 June 2024.
There have been no transfers of assets or liabilities between levels of the
fair value hierarchy during the period.
The fair values of financial instruments that are not traded in an active
market (for example, over-the-counter derivatives) are determined using
generally accepted valuation techniques. These valuation techniques maximise
the use of observable market data and rely as little as possible on Group
specific estimates.
Specific valuation methodologies used to value financial instruments include:
• the fair values of foreign exchange contracts are calculated as the
present value of expected future cash flows based on observable yield curves
and exchange rates; and
• other techniques, including discounted cash flow analysis, are used
to determine the fair values of other financial instruments.
Except as detailed below, the directors consider that the carrying values of
financial assets and financial liabilities recorded at amortised cost in the
condensed consolidated financial statements are approximately equal to their
fair values.
Carrying amount Fair value
€ million As at 30 June 2024 As at 31 December 2023 As at 30 June 2024 As at 31 December 2023
Financial liabilities
Borrowings 2,020 2,019 1,969 1,983
17 Related party transactions
The Group and its subsidiaries, in the ordinary course of business, enter into
various sale, purchase and service transactions with associated undertakings
in which the Group has a material interest. The related party transactions
entered into by the Group have been contracted on an arms-length basis. The
level of these transactions is consistent with prior year.
Transactions between Mondi plc and its subsidiaries, which are related
parties, and transactions between its subsidiaries have been eliminated on
consolidation. There have been no significant changes to the nature of its
related party transactions as disclosed in note 32 of the Group’s Integrated
report and financial statements 2023.
18 Events occurring after 30 June 2024
Aside from the interim ordinary dividend declared for the current financial
year (see note 8), there have been no material reportable events since
30 June 2024.
Alternative Performance Measures (APMs)
The Group presents certain measures of financial performance, position or cash
flows in the condensed consolidated financial statements that are not defined
or specified according to IFRS Accounting Standards in order to provide
additional performance-related measures to its stakeholders. These measures,
referred to as Alternative Performance Measures (APMs), are prepared on a
consistent basis for all periods presented in this report.
By their nature, the APMs used by the Group are not necessarily uniformly
applied by peer companies and therefore may not be comparable with similarly
defined measures and disclosures applied by other companies. Such measures
should not be viewed in isolation or as a substitute to the equivalent IFRS
Accounting Standards measure.
Internally, the Group and its operating segments apply the same APMs in a
consistent manner in planning and reporting on performance to management, the
Executive Committee and the Board. Three of the Group’s APMs, underlying
EBITDA, basic underlying EPS and ROCE, form part of the executive directors'
and senior management's remuneration targets.
The most significant APMs used by the Group are described below, together with
a reconciliation to the equivalent IFRS Accounting Standards measure. The
reconciliations are based on Group figures and represent the continuing
operations of the Group, unless otherwise stated. The reporting segment
equivalent APMs are measured in a consistent manner.
APM description and purpose Financial statement reference Closest IFRS equivalent measure
Special items
Special items are generally material, non-recurring items from continuing operations that exceed €10 million. The Audit Note 4 None
Committee regularly assesses the monetary threshold of €10 million on a net basis and considers the threshold in the context of
both the Group as a whole and individual operating segment performance. The Group separately discloses special items on the face
of the condensed consolidated income statement to assist its stakeholders in understanding the underlying financial performance
achieved by the Group on a basis that is comparable from year to year. Examples of special item charges or credits include, but
are not limited to, significant restructuring programmes, impairment of assets or cash-generating units, profits or losses from
the disposal of businesses, and the settlement of significant litigation or claims. Subsequent adjustments to items previously
recognised as special items, including any related credits received subsequently, continue to be reflected as special items in
future periods even if they do not exceed the quantitative reporting threshold. Subsequent adjustments to items, or charges and
credits on items that are closely related, which previously did not qualify for reporting as special items, continue to be
reported in the underlying result even if the cumulative net charge/credit over the years exceeds the €10 million quantitative
reporting threshold.
Underlying EBITDA
Operating profit before special items, depreciation, amortisation and impairments not recorded as special items provides a Condensed consolidated income statement Operating profit
measure of the cash-generating ability of the Group's continuing operations that is comparable from year to year. For the
Uncoated Fine Paper business unit review, the Group has disclosed underlying EBITDA excluding forestry fair value gain to
improve relative comparability.
Underlying EBITDA margin
Underlying EBITDA expressed as a percentage of Group revenue (segment revenue for operating segments) provides a measure of the None
cash-generating ability of the Group's continuing operations relative to revenue.
APM calculation:
€ million, unless otherwise stated Six months ended 30 June 2024 Six months ended 30 June 2023
Underlying EBITDA (see condensed consolidated income statement) 565 680
Group revenue (see condensed consolidated income statement) 3,739 3,881
Underlying EBITDA margin (%) 15.1 17.5
Underlying operating profit
Operating profit before special items provides a measure of operating performance of the Group's continuing operations that is Condensed consolidated income statement Operating profit
comparable from year to year.
Underlying profit before tax
Profit before tax and special items. Underlying profit before tax provides a measure of the Group’s continuing operations' Condensed consolidated income statement Profit before tax
profitability before tax that is comparable from year to year.
Effective tax rate
Underlying tax charge expressed as a percentage of underlying profit before tax. A measure of the tax charge of the Group’s None
continuing operations relative to its profit before tax expressed on an underlying basis.
APM calculation:
€ million, unless otherwise stated Six months ended 30 June 2024 Six months ended 30 June 2023
Tax charge before special items (see note 6) 71 102
Underlying profit before tax (see condensed consolidated income statement) 323 439
Effective tax rate (%) 22.0 23.2
Underlying earnings (and per share measure)
Net profit after tax before special items arising from the Group's continuing operations that is attributable to shareholders. Note 7 Profit for the period attributable to shareholders (and per share measure)
Underlying earnings (and the related per share measure based on the basic, weighted average number of ordinary shares
outstanding) provides a measure of the continuing operations’ earnings.
Total earnings (prior to special items)
Net profit after tax before special items arising from the Group's continuing and discontinued operations that is attributable Note 7 Profit for the period attributable to shareholders
to shareholders. Total earnings provides a measure of the Group’s earnings.
Headline earnings (and per share measure)
The presentation of headline earnings (and the related per share measure based on the basic, weighted average number of ordinary Note 7 Profit for the period attributable to shareholders (and per share measure)
shares outstanding) is mandated under the Listings Requirements of the JSE Limited and is calculated in accordance with Circular
1/2023, ‘Headline Earnings’, as issued by the South African Institute of Chartered Accountants.
Capital employed (and related trailing 12-month average capital employed)
Capital employed comprises total equity and net debt. Trailing 12-month average capital employed is the average monthly capital Note 3 Total equity
employed over the last 12 months adjusted for spend on major capital expenditure projects which are not yet in production. These
measures provide the level of invested capital in the business. Trailing12-month average capital employed is used in the
calculation of return on capital employed.
Return on capital employed (ROCE)
Trailing 12-month underlying operating profit, including share of associate's and joint ventures' net profit/(loss), divided by None
trailing 12-month average capital employed. ROCE provides a measure of the efficient and effective use of capital in the
business and is presented on the basis of the Group's continuing operations for comparability.
APM calculation:
€ million, unless otherwise stated Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
Trailing 12-month underlying operating profit 664 1,176 790
Trailing 12-month underlying net loss from joint ventures (5) (4) (5)
Trailing 12-month underlying profit from operations and joint ventures 659 1,172 785
Trailing 12-month average capital employed of continuing operations (see note 3) 6,088 6,134 6,135
ROCE (%) 10.8 19.1 12.8
Net debt (and related trailing 12-month average net debt)
A measure comprising short, medium, and long-term interest-bearing borrowings and the fair value of debt-related derivatives Note 13c None
less cash and cash equivalents, net of overdrafts, and current financial asset investments. Trailing 12-month average net debt
is the average monthly net debt over the last 12 months.
Net debt to underlying EBITDA
Net debt divided by trailing 12-month underlying EBITDA. A measure of the Group’s net indebtedness relative to its cash None
-generating ability.
APM calculation:
€ million, unless otherwise stated Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
Net debt (see note 13c) 1,603 1,196 419
Trailing 12-month underlying EBITDA 1,086 1,586 1,201
Net debt to underlying EBITDA (times) 1.5 0.8 0.3
Working capital as a percentage of revenue
Working capital, defined as the sum of trade and other receivables and inventories less trade and other payables, expressed as a None
percentage of annualised Group revenue, which is calculated based on an extrapolation of average monthly year-to-date revenue. A
measure of the Group’s effective use of working capital relative to revenue.
APM calculation:
€ million, unless otherwise stated Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
Inventories (see condensed consolidated statement of financial position) 1,138 1,203 1,049
Trade and other receivables (see condensed consolidated statement of financial position) 1,552 1,367 1,254
Trade and other payables (see condensed consolidated statement of financial position) (1,353) (1,247) (1,219)
Working capital 1,337 1,323 1,084
Annualised Group revenue 7,478 7,762 7,330
Working capital as a percentage of revenue 17.9 17.0 14.8
Production statistics
Six months ended 30 June 2024 Six months ended 30 June 2023
Continuing operations
Containerboard 000 tonnes 1,171 1,178
Kraft paper 000 tonnes 640 557
Uncoated fine paper 000 tonnes 489 410
Pulp 000 tonnes 1,906 1,616
Internal consumption 000 tonnes 1,579 1,379
Market pulp 000 tonnes 327 237
Corrugated solutions million m² 935 916
Paper bags million units 2,792 2,837
Consumer flexibles million m² 1,006 945
Functional paper and films million m² 1,637 1,407
Forward-looking statements
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 the
Disclosure Guidance and Transparency Rules, the UK Market Abuse Regulation or
applicable law or any regulatory body applicable to Mondi, including the JSE
Limited, the FCA and the LSE.
Any reference to future financial performance included in this announcement
has not been reviewed or reported on by the Group’s auditors.
Editors’ notes
Mondi is a global leader in packaging and paper, contributing to a better
world by producing products that are sustainable by design. We employ 22,000
people in more than 30 countries and operate an integrated business with
expertise spanning the entire value chain, enabling us to offer our customers
a broad range of innovative solutions for consumer and industrial end-use
applications. Sustainability is at the centre of our strategy, with our
ambitious commitments to 2030 focused on circular driven solutions, created by
empowered people, taking action on climate.
In 2023, Mondi had revenues of €7.3 billion and underlying EBITDA of €1.2
billion. Mondi is listed on the London Stock Exchange in the ESCC category
(MNDI), where the Group is a FTSE100 constituent. It also has a secondary
listing on the JSE Limited (MNP).
mondigroup.com
Sponsor in South Africa: Merrill Lynch South Africa Proprietary Limited t/a
BofA Securities.
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