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MND/MNP - Mondi Limited/Mondi plc - Half-yearly results for the six months

Release Date: 28/07/2011 08:00
Code(s): MND MNP
Wrap Text

MND/MNP - Mondi Limited/Mondi plc - Half-yearly results for the six months ended 30 June 2011 Mondi Limited (Incorporated in the Republic of South Africa) (Registration number: 1967/013038/06) JSE share code: MND ISIN: ZAE000097051 Mondi plc (Incorporated in England and Wales) (Registration number: 6209386) JSE share code: MNP ISIN: GB00B1CRLC47 LSE share code: MNDI As part of the dual listed company structure, Mondi Limited and Mondi plc (together `Mondi Group`) notify both the JSE Limited and the London Stock Exchange of matters required to be disclosed under the Listings Requirements of the JSE and/or the Disclosure and Transparency and Listing Rules of the United Kingdom Listing Authority. Half-yearly results for the six months ended 30 June 2011 Financial summary1 Six months Six months ended 30 June ended 30 June Half-year
2011 2010 2 change % EUR million, except for percentages and per share measures From continuing operations Group revenue 2,942 2,752 7 EBITDA 526 371 42 Underlying operating profit 354 204 74 Underlying profit before tax 296 164 80 Profit before tax 300 166 81 Per share measures Basic earnings per share from continuing operations (EUR cents) 39.0 19.3 102 Basic earnings per share - alternative measure3 (EUR cents) 41.7 20.2 106 Basic earnings per share from total operations (EUR cents) 41.6 21.5 93 Interim dividend per share (EUR cents) 8.25 3.5 136 Cash generated from operations 403 269 50 Net debt 1,200 1,632 (26) Group Return on Capital Employed (ROCE) 15.2% 9.9% Notes: 1 Refer to definitions in the glossary of financial terms in the half-yearly financial statements. 2 Comparative information has been re-presented where appropriate to take cognisance of the discontinued operation. 3 The directors have elected to present an alternative, non-IFRS measure of earnings per share from continuing operations. As more fully set out in note 11 of the half-yearly financial statements, the effects of the recapitalisation and the demerger of Mpact (formerly Mondi Packaging South Africa) and the Mondi Limited share consolidation have been adjusted to reflect the position as if the transaction had been completed at the beginning of each period presented. This will enable a useful comparison of earnings per share from continuing operations, based on the consolidated number of shares. Operational and financial highlights - Underlying operating profit up 74%, driven by a very strong performance from the Europe & International Division - Demerger of Mpact successfully completed - Refinancing of Group revolving credit facility completed - Interim dividend of 8.25 euro cents per share - Return on capital employed up to 15.2%, in excess of the Group`s through-the- cycle target of 13% David Hathorn, Chief executive officer, said: "The good result achieved in positive market conditions confirms the validity of our strategy. All operations are running well and our recent major investments have made a meaningful contribution to the Group`s profits. The successful completion of the Mpact demerger endorses the strategies of both Mondi and Mpact, allowing both businesses to pursue their increasingly divergent strategic priorities and focus on their respective growth opportunities. In the Europe & International Division, following a period of strong demand order books remain good but are somewhat softer, having returned to more normalised levels. As previously indicated, maintenance shuts planned at a number of the large and strongly profitable European mills will impact second half performance. The South Africa Division should benefit from improved output following the extended maintenance shut taken in the first half. Looking further ahead, while the uncertainties in the broader macroeconomic environment continue to be a concern for demand, supply-side fundamentals in our core grades remain good. Overall, we believe Mondi remains well-positioned to continue adding value for shareholders." Contact details Mondi Group David Hathorn +27 (0)11 994 5418 Andrew King +27 (0)11 994 5415 Lora Rossler +27 (0)31 451 2040 / +27 (0)83 627 0292 Financial Dynamics Richard Mountain +44 20 7269 7186 / +44 20 7909 684 466 Chloe Webb +27 (0)11 214 2421 Conference call dial-in and audio cast details Please see below details of our dial-in conference call and audio cast that will be held at 10:00 (UK) and 11:00 (SA). The conference call dial-in numbers are: South Africa 0800 200 648 (toll-free) UK 0800 917 7042 (toll-free) Europe & Other 00800 246 78 700 (toll-free) An online audio cast facility will be available via: www.mondigroup.com/HYResults11. Password: HYResults11. The presentation will be available online via the above website address an hour before the audio cast commences. Questions can be submitted via the dial- in conference call or by e-mail via the audio cast. Should you have any issues on the day with accessing the dial-in conference call, please call +27 (0)11 535 3600. Should you have any issues on the day with accessing the audio cast, please e- mail mondi@kraftwerk.co.at and you will be contacted immediately. An audio recording of the presentation will be available on Mondi`s website during the afternoon of 28 July 2011. Editors` notes Mondi is an international paper and packaging Group, with production operations across 31 countries and revenues of EUR6.2 billion in 2010. The Group`s key operations are located in central Europe, Russia and South Africa and as at the end of 2010, Mondi employed 29,000 people. (2010 figures include Mpact.) Mondi is fully integrated across the paper and packaging process, from the growing of wood and the manufacture of pulp and paper (including recycled paper), to the conversion of packaging papers into corrugated packaging, industrial bags and coatings. The Group is principally involved in the manufacture of packaging paper, converted packaging products and uncoated fine paper (UFP). Mondi has a dual listed company structure, with a primary listing on the JSE Limited for Mondi Limited under the ticker code MND and a premium listing on the London stock exchange for Mondi plc, under the ticker code MNDI. The Group has been recognised for its sustainability through its inclusion in the FTSE4Good UK, Europe and Global indices in 2008, 2009 and 2010 and the JSE`s Socially Responsible Investment (SRI) Index in 2007, 2008, 2009 and 2010. 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, plans and objectives of management for future operations, are forward-looking statements. 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 are based on numerous assumptions regarding Mondi`s present and future business strategies and the environment in which Mondi will operate in the future. Among the important factors that could cause Mondi`s actual results, performance or achievements to differ materially from those in the forward- looking statements include, but are not limited to, those discussed under Principal risks and uncertainties, below. These forward-looking statements speak only as of the date on which they are made. Mondi expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Mondi`s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Group performance review The Group`s underlying operating profit from continuing operations of EUR354 million was up 74% on the comparable prior year period and up 39% on the second half of the previous year. Sales volumes continued to improve and average selling prices for the period were higher across all key paper grades compared to the second half of the previous year. Rising commodity input costs partially offset the benefit from revenue gains. The demerger of Mpact was approved by shareholders on 30 June 2011 and was effected on 18 July 2011, with Mpact having commenced trading as an independent listed entity on 11 July 2011. The related consolidation of Mondi Limited shares will be effected on 8 August 2011, with the new Mondi Limited shares commencing trading on 1 August 2011. Mondi Limited`s shares in issue will reduce from 147 million shares to 118 million shares, bringing the total number of shares in issue for the Mondi Group down from 514 million to 486 million. At 30 June 2011, the results of Mpact are presented as a discontinued operation and comparative information has been re-presented accordingly. In order to reflect the continuing business of the Mondi Group, the Group has elected to present an additional alternative measure of earnings per share as if the recapitalisation and demerger of Mpact and Mondi Limited share consolidation had taken place at the beginning of each period presented. This is more fully detailed in note 11 of the financial statements. Set out in the table following the principal risks and uncertainties, are the illustrative effects on the Mondi Group as if the Mpact recapitalisation, subsequent demerger and Mondi Limited share consolidation had taken place at the beginning of each period presented. Basic earnings per share - alternative measure was 41.7 cents, an increase of 106%. An interim dividend of 8.25 euro cents will be paid. Net debt at 30 June 2011 decreased from 31 December 2010 by EUR164 million to EUR1.20 billion, excluding the net external debt of Mpact (EUR111 million). Robust EBITDA generation and the benefits of an exchange rate gain were offset primarily by an increase in working capital (in line with growth in revenue), the annual interest payment on the Eurobond, payable in April of each year and a significantly increased final dividend payment. The average maturity of the Group`s committed debt facilities is 4.1 years with unutilised committed borrowing facilities of EUR781 million. Europe & International Division Uncoated Fine Paper Six months Six months ended 30 June ended 30 June Half-year 2011 2010 change % EUR million Segment revenue 734 762 (4) - of which inter-segment revenue 13 75 EBITDA 169 146 16 Underlying operating profit 118 98 20 Capital expenditure 33 82 Net segment assets 1,360 1,642 ROCE 16.9% 17.5% The underlying operating profit of EUR118 million was 20% up on the comparable prior year period, giving a very strong ROCE of 16.9%. This continued excellent performance reflects the positive trading environment supported by a strong operational performance and an increasing contribution from the Syktyvkar mill modernisation investment, completed in the second half of 2010. The reduction in turnover is largely attributable to the sale of the Group`s controlling interest in Mondi Hadera at the end of the previous year and the decline in sales of uncoated fine paper from South Africa, following the decision in mid-2010 to mothball a paper machine at Mondi South Africa Division`s Merebank mill and withdraw from the European export markets. Average benchmark European cut-size office paper prices increased by approximately 11% from the comparable prior year period and by approximately 2% compared to the second half of the previous year. The increase in selling prices was offset to some extent by increased wood, pulp, energy and chemical costs. Maintenance shuts in all three of the mills (Syktyvkar, Ruzomberok and Neusiedler) are planned for the second half of the year, which will impact results, both due to the maintenance charges associated with these shuts and the lost contribution from what are strongly profitable operations. Corrugated Six months Six months ended 30 June ended 30 June Half-year
2011 2010 change % EUR million Segment revenue 704 610 15 - of which inter-segment revenue 34 26 EBITDA 142 82 73 Underlying operating profit 105 48 119 Capital expenditure 18 42 Net segment assets 1,058 862 ROCE 20.1% 9.4% The Corrugated business achieved a significant improvement in underlying operating profit to EUR105 million, delivering a ROCE of 20.1%. The business benefited from significant increases in selling prices, increased volumes from the Swiecie mill as the recycled containerboard machine commissioned in late 2009 continues to ramp-up to full production and a significantly increased contribution from the rebuilt containerboard machine at Syktyvkar, completed in the second half of 2010. Average benchmark selling price increases were recorded for recycled containerboard (28% up on the first half of 2010 and in excess of 10% up on the second half of 2010), kraftliner (31% up on the first half of 2010 and 6% up on the second half of 2010) and white top containerboard (18% up on the first half of 2010 and 7% up on the second half of 2010). Input cost pressures remain with average benchmark recovered paper prices having increased by 23% in the period compared to the second half of the previous year and wood and chemical prices also continuing to increase. Price increases achieved in the corrugated box plants more than offset the increased paper input costs, leading to some margin expansion. Planned maintenance shuts at both Swiecie and Syktyvkar, the two largest and most profitable operations in this business unit, will impact the second half. Bags & Coatings Six months Six months ended 30 June ended 30 June Half-year 2011 2010 change %
EUR million Segment revenue 1,319 1,060 24 - of which inter-segment revenue 27 20 EBITDA 179 108 66 Underlying operating profit 128 55 133 Capital expenditure 43 35 Net segment assets 1,398 1,318 ROCE 17.4% 9.2% The Bags & Coatings business achieved an underlying operating profit of EUR128 million, an increase of 133% on the comparable prior year period resulting in a ROCE of 17.4%. This reflects both improved sales volumes, attributable in part to the restarted Stambolijski plant, and increased selling prices. Average benchmark sack kraft paper selling price increases of around 27% were achieved against the comparable prior year period (9% up on the second half of the prior year), more than offsetting the continued increase in input costs, particularly wood and chemicals. Price increases were achieved on strong demand growth, particularly in export markets, coupled with the effects of reduced industry capacity following the closures that took place during the 2008/9 economic downturn. Volumes were good in the bag converting segment. Significant price increases were achieved from the beginning of the year on annual contractual volumes, although subsequent increases in paper input costs have eroded some of these gains. The business is benefiting from the integration of the Smurfit Kappa bags plants, acquired in mid-2010. Robust volume increases in Coatings & Consumer Packaging, particularly the release liner segment, coupled with selling price increases largely offset increasing paper and chemical input costs. Maintenance shuts are planned at various paper mills during the second half of the year, notably at the large operation of Steti in the Czech Republic. South Africa Division Six months Six months ended 30 June ended 30 June Half-year
2011 2010 change % EUR million Segment revenue 269 276 (3) - of which inter-segment revenue 90 106 EBITDA 54 44 23 Underlying operating profit 27 18 50 Capital expenditure 13 9 Net segment assets 877 932 ROCE 9.7% 3.1% Notwithstanding the negative impact of the planned extended maintenance shut at Richards Bay during June 2011, the South Africa Division realised a 50% improvement in underlying operating profit to EUR27 million versus the comparable prior year period. The ROCE of 9.7% reflects the benefits of higher average selling prices, improved operating efficiencies and the positive impact of the closure of the 120,000 tonne uncoated fine paper machine in the previous year and related restructuring of the fixed cost base. Against the comparable prior year period, average sales prices have improved across most products with containerboard and pulp being the main contributors during the period. These benefits have been partially offset by increased fibre and energy costs as well as the negative impact of the stronger rand. The recent industry-wide strike had no impact on the Division as resolution was achieved at a local level. The Division continues to pursue the settlement of outstanding land claims with further progress expected during the second half of the year. Newsprint Six months Six months ended 30 June ended 30 June 2011 2010
EUR million Segment revenue 80 271 - of which inter-segment revenue - - EBITDA 2 8 Underlying operating (loss)/profit (5) 1 Capital expenditure 2 2 Net segment assets 100 108 ROCE (9.2%) 2.2% Note: The 2010 comparative figure includes turnover of EUR198 million, EBITDA of EUR4 million and underlying operating profit of EUR3 million attributable to the Europapier business. The Newsprint business made an underlying operating loss of EUR5 million. Despite significant sales price increases having been realised at Aylesford Newsprint, these were not sufficient to return the business to profitability on the back of increased input costs. In South Africa, Mondi Shanduka Newsprint has been severely impacted by electricity price increases which cannot be passed on to customers. Input costs and currency exposure Average fibre input costs have increased during the first half of the year. - Procured wood prices in central Europe continue to increase, albeit at a slower pace than in the comparable prior year period. Average costs have increased by approximately 12% compared to the second half of the previous year. - Average pulp prices have increased by 2% for softwood whilst prices have reduced by 2% for hardwood during the period when compared to the second half of the prior year. Closing benchmark prices at 30 June 2011 were 8% up for softwood and 3% up for hardwood compared to 31 December 2010 prices. - The average benchmark price of recovered paper increased by 23%, when compared to the second half of the previous year. Energy and chemical prices also increased during the period under review. Mondi benefits from its structural position in South Africa and Russia due to integration into wood supply. Similarly, the Group`s integrated pulp and paper mills negate the impact of pulp price escalations. The Group, on an annualised basis, is now marginally long on pulp following the completion of the Syktyvkar modernisation and other restructuring activities. Restructuring initiatives and an ongoing focus on cost reduction and productivity improvement further mitigate the impact of input cost pressures. More recently there has been evidence of some weakness in certain key input costs, most notably recovered paper. The Group continues to experience the effects of significant exchange rate volatility. The Group`s hedging programme is intended to curb the impact of short-term fluctuations in exchange rates by hedging its on-balance sheet exposure. Over the period under review, strong emerging market currencies, coupled with ongoing relatively high levels of inflation in these jurisdictions, served to increase the underlying cost base of operations in those countries, thus eroding their relative competitiveness. This is particularly the case in South Africa, and to a lesser extent in the emerging European markets of Poland, Czech Republic, Turkey and Russia. The ongoing weakness of the US$ relative to the euro continues to pose challenges, weakening the ability to achieve price increases in Europe. Financial review Special items There were no significant special items during the period. Special items (aggregate gain of EUR4 million), as more fully set out in the notes to the half-yearly financial statements, include the impact of ongoing restructuring initiatives as well as the finalisation of certain business combination transactions from previous periods. Finance costs Despite lower average borrowings, net finance costs of EUR60 million were higher than those of the comparable prior year period mainly due to the reduction in capitalisation of finance charges following the completion of the Syktyvkar modernisation, and an exchange rate loss of EUR2 million compared to a gain in the comparable prior year period of EUR11 million. Whilst interest rates have remained largely unchanged during the period, the higher interest rate on the EUR500 million Eurobond, compared to the interest rate on the facilities it replaced, resulted in the effective interest rate (pre- capitalised interest) for the period of 8.97% being above that of 7.64% in the comparable prior year period. A large proportion of the Group`s debt (76%) is at fixed rates of interest for varying terms. The first annual interest payment on the Eurobond of EUR29 million, made during April 2011, results in an increase in interest paid in the statement of cash flows. Taxation The reduction in the underlying effective tax rate on continuing operations to 20% is primarily due to increased profitability in regions with lower tax rates and the benefits of tax incentives granted in certain countries in which the Group operates, notably Poland. Discontinued Operation - Mpact (previously Mondi Packaging South Africa) Six months Six months ended 30 June ended 30 June Half-year 2011 2010 change % EUR million Segment revenue 310 298 4 EBITDA 36 33 9 Underlying operating profit 19 18 6 Capital expenditure 17 14 Mpact`s underlying operating profit increased marginally during the period due to improved margins offset to some extent by reduced sales volumes. Cash flow Cash generated from operations amounted to EUR403 million, an increase of 50% on the comparable prior year period primarily due to the significant increase in EBITDA generation. As expected, cash flow generated from operating activities was negatively impacted by an increase in working capital on increased trading activity and seasonal fluctuations, although working capital levels remain well within the target range of 10-12% of turnover. Capital expenditure Capital expenditure of EUR126 million, including EUR16 million on the major project in Russia, was incurred. Outside of this major project, capital expenditure for the period, excluding Mpact, is at 53% of depreciation. The Group is exploring various opportunities in respect of energy efficiencies in its European mills. The previously announced process for the intended exercise of the option by Mondi Swiecie to acquire the power and heat generating plant owned by Saturn Management is unlikely to be concluded before the end of the current year. Treasury and borrowings Net debt at 30 June 2011 was EUR1.20 billion, a decrease of EUR164 million from 31 December 2010. Positive exchange rate movements of EUR46 million and the classification of the Mpact external debt of EUR111 million as held for sale positively impacted this figure. The settlement of intercompany loans from Mpact, following its recapitalisation and subsequent listing, will be reflected in the second half of the year. The net debt to trailing 12 month EBITDA ratio was 1.3 times. On 14 April 2011, Mondi signed a new EUR750 million five year syndicated revolving credit facility to refinance its existing EUR1.55 billion revolving facility that was due to mature in June 2012. Following this refinancing the average maturity of the Group`s committed debt facilities is extended to 4.1 years from 2.6 years as at December 2010, with unutilised committed borrowing facilities of EUR781 million. The long-term corporate credit ratings received of Baa3 (stable outlook) from Moody`s Investor Service and BB+ (positive outlook) from Standard & Poor`s were confirmed during the period. Dividend A dividend of 8.25 euro cents per share has been declared by the directors and will be paid on 13 September 2011 to those shareholders on the register of Mondi plc on 19 August 2011. An equivalent South African rand interim dividend will be paid on 13 September 2011 to shareholders on the register of Mondi Limited on 19 August 2011. Note that the dividend to Mondi Limited shareholders will be based on the new Mondi Limited shares, following the completion of the share consolidation in August 2011. Outlook In the Europe & International Division, following a period of strong demand order books remain good but are somewhat softer, having returned to more normalised levels. As previously indicated, maintenance shuts planned at a number of the large and strongly profitable European mills will impact second half performance. The South Africa Division should benefit from improved output following the extended maintenance shut taken in the first half. Looking further ahead, while the uncertainties in the broader macroeconomic environment continue to be a concern for demand, supply-side fundamentals in our core grades remain good. Overall, we believe Mondi remains well-positioned to continue adding value for shareholders. Supplementary information Going concern Positive trading conditions are evident although some risks remain in specific locations and business segments. This is mitigated by Mondi`s geographical spread, product diversity and large customer base. Through ongoing initiatives of cost management, prudent capital investment, stringent working capital targets and restructuring and rationalisation of assets where appropriate, Mondi has a leading cost position in its chosen markets. The Group maintains adequate committed undrawn borrowing facilities (EUR781 million at 30 June 2011) and the average maturity of its debt is approximately four years, thus providing sufficient short and medium-term liquidity. The Group`s forecasts, taking into account reasonably possible changes in trading performance, show that Mondi will be able to operate well within the levels of its current facilities and related covenants. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis continues to be adopted in preparing financial reports. Principal risks and uncertainties It is in the nature of its business that Mondi is exposed to risks and uncertainties that may have an impact on future performance and financial results, as well as on its ability to meet certain social and environmental objectives. The Group believes that it has effective systems and controls in place to manage the key risks identified below. The key risks identified remain consistent with those presented on page 31 of the 2010 annual report. - Mondi operates in a highly competitive environment The markets for paper and packaging products are highly competitive. Prices of Mondi`s key products have experienced substantial fluctuations in the past. Furthermore, product substitution and declining demand in certain markets, coupled with new capacity being introduced, may have an impact on market prices. A downturn in trading conditions in the future may have an impact on the carrying value of goodwill and tangible assets and may result in further restructuring activities. Mondi is flexible and responsive to changing market and operating conditions and the Group`s geographical and product diversification provide some measure of protection. - Input costs are subject to significant fluctuations Materials, energy and consumables used by Mondi include significant amounts of wood, pulp, recovered fibre, packaging papers and chemicals. Increases in the costs of any of these raw materials, or any difficulties in procuring wood or recovered fibre in certain countries, could have an adverse effect on Mondi`s business, operational performance or financial position. The Group`s focus on operational performance, relatively high levels of integration and access to its own virgin fibre in Russia and South Africa, serve to mitigate these risks. Approximately fifty percent of the South African forestry acreage is subject to land claims. The continued acceptance of the Mondi settlement model as the industry standard by the South African government provides some predictability for future land claim settlements. - Foreign currency exposure and exchange rate volatility The location of some of the Group`s significant operations in emerging markets results in foreign currency exposure. Adverse currency movements and high degrees of volatility may impact on the financial performance and position of the Group. The most significant emerging market currency exposures are to the South African rand, Russian rouble, Czech koruna, Polish zloty and Turkish lira. The Group`s policy is to hedge balance sheet exposures against short- term currency volatility. - Cost and availability of supply of electricity in South Africa may adversely impact operations South Africa continues to experience increases in the cost of electricity well above inflation. In 2010, the price of electricity increased by in excess of 25% and similar increases are forecast for the next three years. Electricity demand is expected to continue to outstrip supply until new generation capacity is brought on stream, which is unlikely to be before 2013. Mondi continues to monitor electricity consumption and has invested in projects to increase its own generation capacity and reduce its dependence on the national energy provider. - Significant capital investments including acquisitions carry project risk The business is capital intensive and therefore requires ongoing capital investment to expand or upgrade existing facilities and to develop new facilities. Projects that require significant capital expenditure carry risks including: failure to complete a project within the required timetable and/or within budget; failure of a project to perform according to prescribed operating specifications; and significant, unforeseen changes in raw material costs or inability to sell the envisaged volumes or achieve envisaged price levels. The successful completion of the Group`s two most significant capital investment programmes in Poland and Russia has reduced the potential impact of this risk. Larger capital projects are subject to specific approval by the Boards and regular monitoring and reporting. Skilled and experienced teams are assigned to large capital projects under the oversight of the Group technical director. - Investments in certain countries may be adversely affected by political, economic and legal developments in those countries The Group operates in a number of countries where the political, economic and legal systems are less predictable than in countries with more developed institutional structures. Significant changes in the political, economic or legal landscape in such countries may have a material effect on the Group`s operations in those countries. The Group has invested in a number of countries thereby diversifying its exposure to any single jurisdiction. The Group`s diversified management structure ensures that business managers are able to closely monitor and adapt to changes in the environment in which they operate. Financial effects of Mpact demerger The Mpact demerger was completed on 18 July 2011, with Mpact having commenced trading as an independent listed entity on 11 July 2011, and the related Mondi Limited share consolidation will be concluded on 8 August 2011, with the consolidated shares commencing trading on 1 August 2011. The following table presents the illustrative effect on the Mondi Group as if the recapitalisation and demerger of Mpact and related Mondi Limited share consolidation had taken place at the beginning of each period presented. Details of the adjustments are set out in note 11 of the half-yearly financial statements. As reported Six months Six months Year ended
ended 30 ended 30 31 December June 2011 June 2010 2010 EUR million Continuing operations Underlying operating profit 354 204 458 Net income from associates 2 2 2 Finance costs (60) (42) (106) Tax charge (59) (46) (88) Non-controlling interests (42) (27) (60) Underlying earnings attributable to equity holders of the parent companies 195 91 206 Discontinued operations1 13 11 32 Profit before special items attributable to equity holders of the parent companies 208 102 238 Special items1 4 7 (14) Profit for the year attributable to equity holders of the parent companies 212 109 224 Weighted average shares in issue 510 508 508 Underlying earnings per share (EUR cents) 38.2 17.9 40.6 Basic earnings per share (EUR cents) 41.6 21.5 44.1 Adjusted earnings Six months Six months Year ended
ended ended 31 December 3 June 2011 30 June 2010 2010 EUR million Continuing operations Underlying operating profit 354 204 458 Net income from associates 2 2 2 Finance costs (57) (39) (99) Tax charge (56) (43) (82) Non-controlling interests (42) (27) (60) Underlying earnings attributable to equity holders of the parent companies 201 97 219 Discontinued operations1 - - - Profit before special items attributable to equity holders of the parent companies 201 97 219 Special items1 4 7 (14) Profit for the year attributable to equity holders of the parent companies 205 104 205 Weighted average shares in issue 482 480 480 Underlying earnings per share (EUR cents)41.7 20.2 45.6 Basic earnings per share (EUR cents) Note: 1 Reported net of tax and non-controlling interests. Directors` responsibility statement The directors confirm that to the best of their knowledge: - the condensed set of combined and consolidated financial statements has been prepared in accordance with International Financial Reporting Standards and in particular with International Accounting Standard 34, `Interim Financial Reporting`; - the half-yearly report includes a fair review of the important events during the six months ended 30 June 2011 and a description of the principal risks and uncertainties for the remaining six months of the year ending 31 December 2011; and - there have been no significant individual related party transactions during the first six months of the financial year and nor have there been any significant changes in the Group`s related party relationships from those reported in the Group`s annual financial statements for the year ended 31 December 2010. David Hathorn Andrew King Director Director 27 July 2011 Independent review report to the members of Mondi Limited Introduction We have reviewed the Group`s condensed combined and consolidated financial statements for the six months ended 30 June 2011 which comprise the condensed combined and consolidated income statement, the condensed combined and consolidated statement of comprehensive income, the condensed combined and consolidated statement of financial position, the condensed combined and consolidated statement of cash flows and the condensed combined and consolidated statement of changes in equity, the summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and presentation of these condensed combined and consolidated financial statements in accordance with International Accounting Standards on Interim Financial Reporting (IAS 34) and the Companies Act of South Africa. Our responsibility is to express a conclusion on these Group condensed combined and consolidated financial statements based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements 2410, `Review of Interim Financial Information Performed by the Independent Auditor of the Entity`. 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 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. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the Group`s interim condensed combined and consolidated financial statements is not prepared, in all material respects, in accordance with International Accounting Standards on Interim Financial Reporting (IAS 34) and the Companies Act of South Africa. Deloitte & Touche Per Bronwyn Kilpatrick Partner Sandton 27 July 2011 Deloitte & Touche Registered Auditors Buildings 1 and 2, Deloitte Place, The Woodlands Woodlands Drive, Woodmead, Sandton Republic of South Africa National Executive GG Gelink Chief Executive AE Swiegers Chief Operating Officer GM Pinnock Audit DL Kennedy Risk Advisory NB Kader Tax & Legal Services L Geeringh Consulting L Bam Corporate Finance JK Mazzocco Human Resources CR Beukman Finance TJ Brown Clients & Markets NT Mtoba Chairman of the Board MJ Comber Deputy Chairman of the Board A full list of partners and directors is available on request. Independent review report to the members of Mondi plc We have been engaged by the Company to review the condensed combined and consolidated set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 which comprises the condensed combined and consolidated income statement, the condensed combined and consolidated statement of comprehensive income, the condensed combined and consolidated statement of financial position, the condensed combined and consolidated statement of cash flows, the condensed combined and consolidated statement of changes in equity and related notes 1 to 21. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410, `Review of Interim Financial Information Performed by the Independent Auditor of the Entity`, issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed. Directors` responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom`s Financial Services Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, `Interim Financial Reporting`, as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, `Review of Interim Financial Information Performed by the Independent Auditor of the Entity`, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, 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 Ireland) 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. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom`s Financial Services Authority. Deloitte LLP Chartered Accountants and Statutory Auditor London, United Kingdom 27 July 2011 Note: A review does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular on whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Condensed combined and consolidated income statement for the six months ended 30 June 2011 (Reviewed) Six months ended 30 June 2011 Before Special After
special items special Notes items (note 6) items EUR million Continuing operations Group revenue 4 2,942 - 2,942 Materials, energy and consumables used (1,528) - (1,528) Variable selling expenses (257) - (257) Gross margin 1,157 - 1,157 Maintenance and other indirect expenses (133) - (133) Personnel costs (417) - (417) Other net operating expenses (81) 1 (80) Depreciation, amortisation and impairments (172) - (172) Operating profit 4/5 354 1 355 Non-operating special items 6 - 3 3 Net income from associates 2 - 2 Total profit/(loss) from operations and associates 356 4 360 Net finance costs (60) - (60) Investment income 15 - 15 Foreign currency (losses)/gains (2) - (2) Finance costs 7 (73) - (73) Profit/(loss) before tax 296 4 300 Tax (charge)/credit 8 (59) - (59) Profit/(loss) from continuing operations 237 4 241 Discontinued operation Profit from discontinued operation 9 13 Profit for the financial period/year 254 Attributable to: Non-controlling interests 42 Equity holders of the parent companies 212 (Restated)
(Reviewed) Six months ended 30 June 2010 Before Special After special items special
items (note 6) items EUR million Continuing operations Group revenue 2,752 - 2,752 Materials, energy and consumables used (1,480) - (1,480) Variable selling expenses (252) - (252) Gross margin 1,020 - 1,020 Maintenance and other indirect expenses (120) - (120) Personnel costs (409) (2) (411) Other net operating expenses (120) 56 (64) Depreciation, amortisation and impairments (167) (17) (184) Operating profit 204 37 241 Non-operating special items - (35) (35) Net income from associates 2 - 2 Total profit/(loss) from operations and associates 206 2 208 Net finance costs (42) - (42) Investment income 14 - 14 Foreign currency (losses)/gains 11 - 11 Finance costs (67) - (67) Profit/(loss) before tax 164 2 166 Tax (charge)/credit (46) 4 (42) Profit/(loss) from continuing operations 118 6 124 Discontinued operation Profit from discontinued operation 11 Profit for the financial period/year 135 Attributable to: Non-controlling interests 26 Equity holders of the parent companies 109 (Restated) (Audited) Year ended 31 December 2010
Before Special After special items special items (note 6) items EUR million Continuing operations Group revenue 5,610 - 5,610 Materials, energy and consumables used (3,006) - (3,006) Variable selling expenses (494) - (494) Gross margin 2,110 - 2,110 Maintenance and other indirect expenses (272) - (272) Personnel costs (829) (23) (852) Other net operating expenses (211) 50 (161) Depreciation, amortisation and impairments (340) (23) (363) Operating profit 458 4 462 Non-operating special items - (25) (25) Net income from associates 2 - 2 Total profit/(loss) from operations and associates 460 (21) 439 Net finance costs (106) - (106) Investment income 31 - 31 Foreign currency (losses)/gains 7 - 7 Finance costs (144) - (144) Profit/(loss) before tax 354 (21) 333 Tax (charge)/credit (88) 6 (82) Profit/(loss) from continuing operations 266 (15) 251 Discontinued operation Profit from discontinued operation 34 Profit for the financial period/year 285 Attributable to: Non-controlling interests 61 Equity holders of the parent companies 224 (Restated) (Restated)
(Reviewed) (Reviewed) (Audited) Notes Six months Six months ended ended Year ended 30 June 30 June 31 December
2011 2010 2010 Earnings per share (EPS) for profit attributable to equity holders of the parent companies From continuing operations Basic EPS (EUR cents) 10 39.0 19.3 37.8 Diluted EPS (EUR cents) 10 38.5 19.0 37.4 Basic underlying EPS (EUR cents) 10 38.2 17.9 40.6 Diluted underlying EPS (EUR cents) 10 37.7 17.7 40.1 From continuing and discontinued operations Basic EPS (EUR cents) 10 41.6 21.5 44.1 Diluted EPS (EUR cents) 10 41.0 21.2 43.6 Basic headline EPS (EUR cents) 10 39.4 24.8 47.0 Diluted headline EPS (EUR cents) 10 38.9 24.5 46.5 Condensed combined and consolidated statement of comprehensive income for the six months ended 30 June 2011 (Reviewed) (Reviewed) (Audited) Six months Six months ended 30 June ended 30 June Year ended 31
2011 2010 December 2010 EUR million Profit for the financial period/year 254 135 285 Other comprehensive income: Effect of cash flow hedges 5 6 11 Actuarial losses and surplus restriction on post-retirement benefit schemes (2) (9) (18) Exchange differences on translation of foreign operations (84) 171 193 Share of other comprehensive income of associates (1) - 1 Tax relating to components of other comprehensive income (1) 2 4 Other comprehensive income for the financial period/year, net of tax (83) 170 191 Total comprehensive income for the financial period/year 171 305 476 Attributable to: Non-controlling interests 33 36 75 Equity holders of the parent companies 138 269 401 Condensed combined and consolidated statement of financial position as at 30 June 2011 (Reviewed) As at 30 June EUR million Notes 2011 Intangible assets 241 Property, plant and equipment 3,625 Forestry assets 299 Investments in associates 12 Financial asset investments 31 Deferred tax assets 11 Retirement benefits surplus 13 12 Derivative financial instruments - Total non-current assets 4,231 Inventories 726 Trade and other receivables 959 Current tax assets 8 Cash and cash equivalents 17b-c 33 Derivative financial instruments 4 Total current assets 1,730 Assets held for sale Continuing operations 16 1 Discontinued operation 9 495 Total assets 6,457 Short-term borrowings 17c (485) Trade and other payables (989) Current tax liabilities (84) Provisions (45) Derivative financial instruments (4) Total current liabilities (1,607) Medium and long-term borrowings 17c (748) Retirement benefits obligation 13 (196) Deferred tax liabilities (326) Provisions (36) Other non-current liabilities (20) Derivative financial instruments (10) Total non-current liabilities (1,336) Liabilities directly associated with assets classified as held for sale Continuing operations 16 - Discontinued operation 9 (248) Total liabilities (3,191) Net assets 3,266 Equity Ordinary share capital and share premium 646 Retained earnings and other reserves 2,168 Total attributable to equity holders of the parent companies 2,814 Non-controlling interests in equity 452 Total equity 3,266 (Reviewed) (Audited) As at 30 June As at 31 December EUR million 2010 2010 Intangible assets 314 312 Property, plant and equipment 3,990 3,976 Forestry assets 290 320 Investments in associates 6 16 Financial asset investments 33 34 Deferred tax assets 31 21 Retirement benefits surplus 13 11 Derivative financial instruments - 3 Total non-current assets 4,677 4,693 Inventories 688 702 Trade and other receivables 1,083 992 Current tax assets 19 11 Cash and cash equivalents 77 83 Derivative financial instruments 13 11 Total current assets 1,880 1,799 Assets held for sale Continuing operations 172 1 Discontinued operation - - Total assets 6,729 6,493 Short-term borrowings (217) (410) Trade and other payables (1,123) (1,034) Current tax liabilities (75) (78) Provisions (50) (64) Derivative financial instruments (4) (9) Total current liabilities (1,469) (1,595) Medium and long-term borrowings (1,492) (1,037) Retirement benefits obligation (202) (211) Deferred tax liabilities (334) (349) Provisions (35) (39) Other non-current liabilities (21) (23) Derivative financial instruments (23) (15) Total non-current liabilities (2,107) (1,674) Liabilities directly associated with assets classified as held for sale Continuing operations (60) - Discontinued operation - - Total liabilities (3,636) (3,269) Net assets 3,093 3,224 Equity Ordinary share capital and share premium 646 646 Retained earnings and other reserves 2,006 2,117 Total attributable to equity holders of the parent companies 2,652 2,763 Non-controlling interests in equity 441 461 Total equity 3,093 3,224 The Group`s condensed combined and consolidated financial statements, and related notes 1 to 21, were approved by the Boards and authorised for issue on 27 July 2011 and were signed on their behalf by: David Hathorn Andrew King Director Director Mondi Limited company registration number: 1967/013038/06 Mondi plc company registration number: 6209386 Condensed combined and consolidated statement of cash flows for the six months ended 30 June 2011 (Reviewed) Six months
ended 30 June Notes 2011 EUR million Cash generated from operations 17a 403 Dividends from associates - Dividends from other investments - Income tax paid (45) Net cash generated from operating activities 358 Cash flows from investing activities Acquisition of subsidiaries, net of cash and cash equivalents 15 (12) Acquisition of associates, net of cash and cash equivalents - Proceeds from disposal of subsidiaries, net of cash and cash equivalents 14 Investment in property, plant and equipment (126) Investment in intangible assets (1) Proceeds from the disposal of property, plant and equipment and intangible assets 7 Investment in forestry assets (23) Investment in financial asset investments (7) Proceeds from the sale of financial asset investments 7 Loan (advances to)/repayments from related parties (1) Loan repayments from external parties 1 Interest received 5 Other investing activities - Net cash used in investing activities (136) Cash flows from financing activities Repayment of short-term borrowings 17c (13) Proceeds from medium and long-term borrowings 17c 13 Repayment of medium and long-term borrowings 17c (112) Interest paid (75) Dividends paid to non-controlling interests 12 (40) Dividends paid to equity holders of the parent companies 12 (86) Purchases of treasury shares (7) Non-controlling interests bought out (1) Net realised loss on cash and asset management swaps - Other financing activities 2 Net cash used in financing activities (319) Net decrease in cash and cash equivalents (97) Cash and cash equivalents at beginning of financial period/year1 17c 24 Cash movement in the financial period/year 17c (97) Reclassification of discontinued operation 17c (23) Reclassification 17c - Effects of changes in foreign exchange rates 17c 3 Cash and cash equivalents at end of financial period/year1 (93) (Reviewed) (Audited) Six months Year ended ended 30 June 31 December 2010 2010
EUR million Cash generated from operations 269 778 Dividends from associates 2 2 Dividends from other investments - 1 Income tax paid (36) (47) Net cash generated from operating activities 235 734 Cash flows from investing activities Acquisition of subsidiaries, net of cash and cash equivalents 11 - Acquisition of associates, net of cash and cash equivalents - (2) Proceeds from disposal of subsidiaries, net of cash and cash equivalents 64 100 Investment in property, plant and equipment (184) (394) Investment in intangible assets (1) (4) Proceeds from the disposal of property, plant and equipment and intangible assets 6 14 Investment in forestry assets (21) (46) Investment in financial asset investments (1) (11) Proceeds from the sale of financial asset investments 2 3 Loan (advances to)/repayments from related parties (4) 1 Loan repayments from external parties - 2 Interest received 4 10 Other investing activities - (2) Net cash used in investing activities (124) (329) Cash flows from financing activities Repayment of short-term borrowings (95) (51) Proceeds from medium and long-term borrowings 527 717 Repayment of medium and long-term borrowings (452) (831) Interest paid (60) (117) Dividends paid to non-controlling interests (17) (18) Dividends paid to equity holders of the parent companies (36) (54) Purchases of treasury shares (1) (2) Non-controlling interests bought out (4) (5) Net realised loss on cash and asset management swaps (61) (48) Other financing activities - - Net cash used in financing activities (199) (409) Net decrease in cash and cash equivalents (88) (4) Cash and cash equivalents at beginning of financial period/year1 37 37 Cash movement in the financial period/year (88) (4) Reclassification of discontinued operation - - Reclassification (1) - Effects of changes in foreign exchange rates (6) (9) Cash and cash equivalents at end of financial period/year1 (58) 24 Note: 1 `Cash and cash equivalents` includes overdrafts and cash flows from disposal groups and is reconciled to the condensed combined and consolidated statement of financial position in note 17c. Condensed combined and consolidated statement of changes in equity for the six months ended 30 June 2011 Combined share capital and share Retained premium 1 earnings Other reserves 2
EUR million At 1 January 2010 646 1,743 10 Dividends paid - (36) - Total comprehensive income for the financial period - 109 160 Issue of shares under employee share schemes - 5 (5) Purchases of treasury shares - (1) - Disposal of businesses - - 19 Non-controlling interests bought out - (1) - Other - - 3 At 30 June 2010 646 1,819 187 Dividends paid - (18) - Total comprehensive income for the financial period - 115 17 Purchases of treasury shares - (1) - Disposal of businesses - - (7) Reclassification - 1 (1) Other - - 5 At 31 December 2010 646 1,916 201 Dividends paid - (86) - Total comprehensive income for the financial period - 212 (74) Issue of shares under employee share schemes - 7 (7) Purchases of treasury shares - (7) - Non-controlling interests bought out - 1 - Other - - 5 At 30 June 2011 646 2,043 125 Total attributable to equity holders
of the parent Non-controlling Total companies interests equity EUR million At 1 January 2010 2,399 425 2,824 Dividends paid (36) (17) (53) Total comprehensive income for the financial period 269 36 305 Issue of shares under employee share schemes - - - Purchases of treasury shares (1) - (1) Disposal of businesses 19 - 19 Non-controlling interests bought out (1) (3) (4) Other 3 - 3 At 30 June 2010 2,652 441 3,093 Dividends paid (18) (1) (19) Total comprehensive income for the financial period 132 39 171 Purchases of treasury shares (1) - (1) Disposal of businesses (7) (18) (25) Reclassification - - - Other 5 - 5 At 31 December 2010 2,763 461 3,224 Dividends paid (86) (40) (126) Total comprehensive income for the financial period 138 33 171 Issue of shares under employee share schemes - - - Purchases of treasury shares (7) - (7) Non-controlling interests bought out 1 (2) (1) Other 5 - 5 At 30 June 2011 2,814 452 3,266 Notes: 1 After 30 June 2011, Mondi Limited`s par value shares will be converted by special resolution to shares with no par value. As a result Mondi Limited`s share capital and share premium will be combined into a stated capital account. The share consolidation described in notes 10 and 11 will have no impact on the share capital and stated capital of Mondi plc and Mondi Limited respectively. 2 Other reserves consist of the share-based payment, cumulative translation adjustment, cash flow hedge, post-retirement benefit, merger and other sundry reserves. Notes to the condensed combined and consolidated financial statements for the six months ended 30 June 2011 1 Basis of preparation The Group has two separate legal parent entities, Mondi Limited and Mondi plc, which operate under a dual listed company (DLC) structure. The substance of the DLC structure is such that Mondi Limited and its subsidiaries, and Mondi plc and its subsidiaries, operate together as a single economic entity through a sharing agreement, with neither parent entity assuming a dominant role. Accordingly, Mondi Limited and Mondi plc are reported on a combined and consolidated basis as a single reporting entity under International Financial Reporting Standards (IFRS). The condensed combined and consolidated half-yearly financial information for the six months ended 30 June 2011 has been prepared in accordance with IAS 34, `Interim Financial Reporting`. It should be read in conjunction with the Group`s annual financial statements for the year ended 31 December 2010, prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB). The Group has also complied with South African Statements and Interpretations of Statements of Generally Accepted Accounting Practice. There are no differences for the Group in applying IFRS as issued by the IASB and IFRS as adopted by the European Union (EU) and therefore the Group also complies with Article 4 of the EU IAS Regulation. The condensed combined and consolidated financial statements have been prepared on a going concern basis as discussed in the business review, under the heading `Going concern`. Comparative information has been re-presented where appropriate to reflect the discontinued operation of Mpact (previously Mondi Packaging South Africa) as described in note 9. The information for the year ended 31 December 2010 does not constitute statutory accounts as defined by section 434 of the UK Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor`s report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the UK Companies Act 2006. 2 Accounting policies The same accounting policies, methods of computation and presentation have been followed in the preparation of the condensed combined and consolidated financial statements as were applied in the preparation of the Group`s annual financial statements for the year ended 31 December 2010. The condensed combined and consolidated financial statements have been prepared on the historical cost basis, except for the revaluation of certain properties and financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for assets. 3 Seasonality The seasonality of the Group`s operations has no significant impact on the condensed combined and consolidated financial statements. 4 Operating segments Operating segment revenues (Reviewed) Six months ended 30 June 2011 Segment Internal External
revenue revenue1 revenue2 EUR million Europe & International Uncoated Fine Paper 734 (13) 721 Corrugated 704 (34) 670 Bags & Coatings 1,319 (27) 1,292 Intra-segment elimination (73) 73 - Total Europe & International 2,684 (1) 2,683 South Africa Division 269 (90) 179 Newsprint businesses 80 - 80 Segments total 3,033 (91) 2,942 Inter-segment elimination (91) 91 - Group total 2,942 - 2,942 (Restated) (Reviewed) Six months ended 30 June 2010
Segment Internal External revenue revenue1 revenue2 EUR million Europe & International Uncoated Fine Paper 762 (75) 687 Corrugated 610 (26) 584 Bags & Coatings 1,060 (20) 1,040 Intra-segment elimination (60) 60 - Total Europe & International 2,372 (61) 2,311 South Africa Division 276 (106) 170 Newsprint businesses 271 - 271 Segments total 2,919 (167) 2,752 Inter-segment elimination (167) 167 - Group total 2,752 - 2,752 (Restated) (Audited)
Year ended 31 December 2010 Segment Internal External revenue revenue1 revenue2 EUR million Europe & International Uncoated Fine Paper 1,516 (129) 1,387 Corrugated 1,235 (59) 1,176 Bags & Coatings 2,226 (39) 2,187 Intra-segment elimination (125) 125 - Total Europe & International 4,852 (102) 4,750 South Africa Division 580 (211) 369 Newsprint businesses 492 (1) 491 Segments total 5,924 (314) 5,610 Inter-segment elimination (314) 314 - Group total 5,610 - 5,610 Notes: 1 Inter-segment transactions are conducted on an arm`s length basis. 2 The description of each business segment reflects the nature of the main products they sell. In certain instances the business segments sell minor volumes of other products and due to this reason the external segment revenues will not necessarily reconcile to the external revenues by type of product presented below. External revenue by product type (Restated) (Restated)
(Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December 2011 2010 2010
EUR million Products Corrugated products 686 596 1,212 Uncoated fine paper 684 674 1,351 Kraft paper & industrial bags 716 531 1,170 Coatings & consumer packaging 479 403 809 Pulp 125 104 247 Newsprint 123 104 221 Woodchips 25 39 76 Merchant 14 215 373 Other1 90 86 151 Group total 2,942 2,752 5,610 Note: 1 Revenues derived from product types that are not individually material are classified as other. External revenue by location of customer (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December
2011 2010 2010 EUR million Revenue Africa South Africa1 129 120 249 Rest of Africa 137 107 226 Africa total 266 227 475 Western Europe Germany 420 375 768 United Kingdom1 145 169 323 Rest of Western Europe 821 727 1,474 Western Europe total 1,386 1,271 2,565 Emerging Europe 584 584 1,184 Russia 281 249 491 North America 130 111 234 South America 15 14 30 Asia and Australia 280 296 631 Group total 2,942 2,752 5,610 Note: 1 These revenues, which total EUR274 million (six months ended 30 June 2010: EUR289 million; year ended 31 December 2010: EUR572 million), are attributable to the countries in which the Group`s parent entities are domiciled. External revenue by location of production (Restated) (Restated)
(Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December 2011 2010 2010
EUR million Revenue Africa South Africa1 281 286 593 Rest of Africa 4 3 5 Africa total 285 289 598 Western Europe Austria 593 597 1,161 United Kingdom1 67 88 155 Rest of Western Europe 572 463 997 Western Europe total 1,232 1,148 2,313 Emerging Europe Poland 406 335 711 Rest of Emerging Europe 568 512 1,076 Emerging Europe total 974 847 1,787 Russia 355 322 617 North America 81 62 131 Asia and Australia 15 84 164 Group total 2,942 2,752 5,610 Note: 1 These revenues, which total EUR348 million (six months ended 30 June 2010: EUR374 million; year ended 31 December 2010: EUR748 million), are attributable to the countries in which the Group`s parent entities are domiciled. There are no external customers which account for more than 10% of the Group`s total external revenue. Operating profit/(loss) before special items from continuing operations (Restated) (Restated) (Reviewed) (Reviewed) (Audited)
Six months Six months Year ended ended 30 June ended 30 June 31 December 2011 2010 2010 EUR million Europe & International Uncoated Fine Paper 118 98 179 Corrugated 105 48 119 Bags & Coatings 128 55 133 Total Europe & International 351 201 431 South Africa Division 27 18 64 Newsprint businesses (5) 1 (4) Corporate & other businesses (19) (16) (33) Segments total 354 204 458 Special items from continuing operations (see note 6) 4 2 (21) Net income from associates 2 2 2 Net finance costs (60) (42) (106) Group profit before tax from continuing operations 300 166 333 Operating segment assets (Reviewed) As at 30 June 2011 Segment Net segment assets1 assets
EUR million Europe & International Uncoated Fine Paper 1,553 1,360 Corrugated 1,286 1,058 Bags & Coatings 1,839 1,398 Intra-segment elimination (56) - Total Europe & International 4,622 3,816 South Africa Division 1,015 877 Newsprint businesses 130 100 Corporate & other businesses 10 10 Inter-segment elimination (52) - Segments total 5,725 4,803 Unallocated: Discontinued operation 495 247 Investments in associates 12 12 Deferred tax assets/(liabilities) 11 (315) Other non-operating assets/(liabilities)2 150 (312) Group trading capital employed 6,393 4,435 Financial asset investments 31 31 Net debt 33 (1,200) Group assets 6,457 3,266 (Restated) (Reviewed) As at 30 June 2010
Segment Net assets1 segment assets EUR million Europe & International Uncoated Fine Paper 1,862 1,642 Corrugated 1,074 862 Bags & Coatings 1,720 1,318 Intra-segment elimination (67) - Total Europe & International 4,589 3,822 South Africa Division 1,052 932 Newsprint businesses 148 108 Corporate & other businesses 18 18 Inter-segment elimination (71) - Segments total 5,736 4,880 Unallocated: Discontinued operation 475 368 Investments in associates 6 6 Deferred tax assets/(liabilities) 31 (303) Other non-operating assets/(liabilities)2 371 (259) Group trading capital employed 6,619 4,692 Financial asset investments 33 33 Net debt 77 (1,632) Group assets 6,729 3,093 (Restated)
(Audited) As at 31 December 2010 Segment Net assets1 segment assets
EUR million Europe & International Uncoated Fine Paper 1,672 1,512 Corrugated 1,112 898 Bags & Coatings 1,731 1,333 Intra-segment elimination (55) - Total Europe & International 4,460 3,743 South Africa Division 1,091 953 Newsprint businesses 141 106 Corporate & other businesses 10 7 Inter-segment elimination (63) - Segments total 5,639 4,809 Unallocated: Discontinued operation 507 393 Investments in associates 16 16 Deferred tax assets/(liabilities) 21 (328) Other non-operating assets/(liabilities)2 193 (336) Group trading capital employed 6,376 4,554 Financial asset investments 34 34 Net debt 83 (1,364) Group assets 6,493 3,224 Notes: 1 Segment assets are operating assets and consist of property, plant and equipment, intangible assets, forestry assets, retirement benefits surplus, inventories and operating receivables. 2 Other non-operating assets consist of derivative assets, current income tax receivables, other non-operating receivables and assets held for sale. Other non-operating liabilities consist of derivative liabilities, non-operating provisions, current income tax liabilities, other non-operating payables and deferred income, and liabilities directly associated with assets classified as held for sale. Additions to non-current non-financial assets Additions to non-current non-financial assets 1 (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended
ended 30 June ended 30 June 31 December 2011 2010 2010 EUR million Europe & International Uncoated Fine Paper 21 74 138 Corrugated 19 38 79 Bags & Coatings 53 45 102 Total Europe & International 93 157 319 South Africa Division 34 28 71 Newsprint businesses 4 4 10 Corporate & other businesses - - - Segments total 131 189 400 Unallocated: Discontinued operation 18 14 28 Group total 149 203 428 Capital expenditure cash payments 2
(Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December
2011 2010 2010 EUR million Europe & International Uncoated Fine Paper 33 82 151 Corrugated 18 42 87 Bags & Coatings 43 35 92 Total Europe & International 94 159 330 South Africa Division 13 9 28 Newsprint businesses 2 2 7 Corporate & other businesses - - 1 Segments total 109 170 366 Unallocated: Discontinued operation 17 14 28 Group total 126 184 394 Notes: 1 Additions to non-current non-financial assets reflect cash payments and accruals in respect of additions to property, plant and equipment, intangible assets and forestry assets and include interest capitalised as well as additions resulting from acquisitions through business combinations. Additions to non-current non-financial assets, however, exclude additions to deferred tax assets, retirement benefits surplus and non-current financial assets. 2 Capital expenditure cash payments exclude business combinations, interest capitalised and investments in intangible and forestry assets. 5 Write-down of inventories to net realisable value (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December
2011 2010 2010 EUR million Combined and consolidated income statement From continuing operations Write-downs of inventories to net realisable value (9) (11) (20) Aggregate reversal of previous write-downs of inventories 4 2 4 6 Special items (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six month Six months Year ended
ended 30 June ended 30 June 31 December 2011 2010 2010 EUR million Operating special items from continuing operations Asset impairments - (25) (32) Reversal of asset impairments - 8 9 Restructuring and closure costs Restructuring and closure costs excluding related personnel costs (1) (1) (14) Personnel costs relating to restructuring - (2) (24) Reversal of restructuring and closure costs excluding related personnel costs 2 26 30 Reversal of personnel costs relating to restructuring - - 1 Gain on acquisition of business - 31 34 Total operating special items from continuing operations 1 37 4 Non-operating special items from continuing operations Profit/(loss) on disposals 3 (22) (11) Impairment of assets held for sale - (13) (14) Total non-operating special items from continuing operations 3 (35) (25) Total special items before tax and non-controlling interests 4 2 (21) Tax - 4 6 Non-controlling interests - 1 1 Total special items attributable to equity holders of the parent companies 4 7 (14) Special items before tax and non-controlling interests from continuing operations by operating segment (Restated) (Restated) (Reviewed) (Reviewed) (Audited)
Six months Six months Year ended ended 30 June ended 30 June 31 December 2011 2010 2010 EUR million Europe & International Uncoated Fine Paper 2 10 5 Corrugated 3 (16) (15) Bags & Coatings (1) 48 28 Total Europe & International 4 42 18 South Africa Division - (14) (10) Newsprint businesses - (26) (29) Group and segments total from continuing operations 4 2 (21) Operating special items A purchase price adjustment on the sale of the Szolnok site resulted in the reversal of previously recognised restructuring provisions of EUR2 million in the Europe & International Uncoated Fine Paper business. Restructuring activities relating to the Polish industrial bag plant acquired from Smurfit Kappa UK Limited resulted in a EUR1 million charge in the Europe & International Bags & Coatings business. Non-operating special items Finalisation of the sale of Frohnleiten and the UK corrugated plants resulted in a gain of EUR3 million being recognised in the Europe & International Corrugated business. 7 Finance costs (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended
ended 30 June ended 30 June 31 December 2011 2010 2010 EUR million From continuing operations Total interest expense (74) (74) (152) Less: interest capitalised 1 7 8 Total finance costs from continuing operations (73) (67) (144) 8 Tax charge (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended
ended 30 June ended 30 June 31 December 2011 2010 2010 EUR million From continuing operations UK corporation tax at 26.5% (2010: 28%) - (1) (2) SA corporation tax at 28% (2010: 28%) 4 2 3 Overseas tax 51 52 74 Current tax (including tax on special items from continuing operations) 55 53 75 Deferred tax 4 (11) 7 Total tax charge from continuing operations 59 42 82 The Group`s estimated effective annual rate of tax from continuing operations before special items for the six months ended 30 June 2011, calculated on profit before tax from continuing operations before special items and including net income from associates, is 20% (six months ended 30 June 2010: 28%; year ended 31 December 2010: 25%). The reduction in the effective tax rate from 28% to 20% is primarily due to increased profitability in regions with lower tax rates, and benefits from tax incentives granted in certain countries in which the Group operates, notably Poland. 9 Discontinued operation On 30 June 2011, the Mondi Group shareholders approved a special resolution to separate the Group`s interest in Mondi Packaging South Africa (MPSA) via a demerger in terms of which all the ordinary shares in MPSA held by Mondi Limited were distributed to the Mondi Limited ordinary shareholders by way of a dividend in specie. MPSA was listed on 11 July 2011 under a new name, Mpact Limited (Mpact), on the securities exchange operated by the JSE Limited (JSE). Prior to the demerger (i) Mondi Limited and Shanduka Packaging Proprietary Limited (Shanduka Packaging) subscribed for new Mpact shares; (ii) certain shareholder loans made to Mpact were repaid using the cash proceeds received from the new share subscription and newly arranged borrowing facilities of Mpact; and (iii) the Mpact shares held by Mondi Limited`s employee share ownership trust were acquired by the Mondi Group. The Mondi Group`s shareholding in Mpact increased to 89.55% of the total number of Mpact shares in issue following these steps and Shanduka Packaging`s shareholding reduced to 10.45%. The resulting interest in Mpact held by the Mondi Group was distributed to Mondi Limited shareholders by way of the dividend in specie. The dividend in specie declared to Mondi Limited shareholders will be measured at the fair value of the Mpact shares distributed, which was EUR201 million. The carrying value of the investment, immediately prior to distribution as a dividend in specie was approximately EUR170 million. The resulting gain on disposal of the business was approximately EUR31 million before related transaction costs. The demerger and disposal of Mpact was completed after 30 June 2011. The gain on disposal will be separately recognised as part of the discontinued operation in the second half of the year. The assets and associated liabilities of Mpact were classified as held for sale at 30 June 2011. Subsequent to the demerger, a consolidation of the Mondi Limited ordinary shares owned by Mondi Limited shareholders, the effect of which will be to reduce their proportionate interest in the Mondi Group will be undertaken in order to compensate Mondi plc shareholders for the value distributed to Mondi Limited shareholders under the demerger. The Mondi Limited share consolidation was intended to have, as far as practicable, an equivalent but not necessarily identical economic effect on Mondi plc shareholders as the economic effect that the demerger will have on Mondi Limited shareholders. The total number of new Mondi Limited ordinary shares held by Mondi Limited shareholders after the Mondi Limited share consolidation was determined by reference to the volume weighted average price (VWAP) of Mpact shares traded on the JSE, the VWAP of existing Mondi Limited ordinary shares traded on the JSE and the VWAP of Mondi plc ordinary shares traded on the London Stock Exchange plc (LSE) and JSE, in each case during the applicable VWAP determination period, being the nine business days from 11 July 2011 to 21 July 2011. The formula for determining the number of new Mondi Limited ordinary shares was designed to ensure that the benefit per Mondi plc ordinary share received by each Mondi plc shareholder as a result of the Mondi Limited share consolidation matched as closely as possible the value per Mondi Limited ordinary share received (in the form of Mpact shares) by each Mondi Limited shareholder pursuant to the demerger. Following the conclusion of the VWAP determination period, the number of Mondi Limited shares in issue will reduce from 147 million to 118 million and the total number of Mondi shares in issue will reduce from 514 million to 486 million. Mpact paid interest of EUR13 million (six months ended 30 June 2010: EUR13 million; year ended 31 December 2010: EUR28 million) to Mondi Limited in respect of intercompany financing provided. This interest is eliminated on consolidation and is thus not taken into consideration in the tables below. The results of the discontinued operation, which have been included in the condensed combined and consolidated income statement for the six months ended 30 June 2011, were as follows: (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December
2011 2010 2010 EUR million Revenue 296 281 618 Expenses (283) (270) (579) Profit before tax 13 11 39 Related tax charge - - (5) Profit after tax from discontinued operation 13 11 34 Attributable to: Non-controlling interests - - 2 Equity holders of the parent companies 13 11 32 Mpact contributed the following cash flows to the Group: (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December 2011 2010 2010
EUR million Net cash generated from operating activities 31 27 69 Net cash used in investing activities (17) (13) (29) Net cash generated from/(used in) financing activities 13 (7) (36) Earnings per share from the discontinued operation are presented as follows (see note 10): (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December
2011 2010 2010 EUR cents per share Profit from discontinued operation for the financial period/year attributable to equity holders of the parent companies Basic EPS 2.6 2.2 6.3 Diluted EPS 2.5 2.2 6.2 Details of the disposal group and assets held for sale of the discontinued operation are presented as follows: (Reviewed) Six months
ended 30 June 2011 EUR million Intangible assets 68 Property, plant and equipment 195 Investments in associates 5 Financial asset investments 1 Deferred tax assets 3 Retirement benefits surplus 1 Total non-current assets 273 Inventories 74 Trade and other receivables 125 Cash and cash equivalents 23 Total current assets 222 Total assets classified as held for sale 495 Short-term borrowings (15) Trade and other payables (99) Current tax liabilities (1) Total current liabilities (115) Medium and long-term borrowings (119) Retirement benefits obligation (7) Deferred tax liabilities (1) Derivative financial instruments (2) Other non-current liabilities (4) Total non-current liabilities (133) Total liabilities directly associated with assets classified as held for sale (248) Net assets 247 10 Earnings per share (a) From continuing operations As discussed in note 9, Mondi Limited`s ordinary shares were subject to a share consolidation which will be recognised from 1 August 2011, the date on which the new Mondi Limited ordinary shares commence trading on the JSE. As more fully described in note 9, the share consolidation is the matching action to compensate Mondi plc shareholders for the dividend in specie declared to Mondi Limited shareholders. IFRS requires that the number of shares subject to the consolidation be adjusted from the effective date of the consolidation, and thus the number of shares in issue is unchanged at 30 June 2011. Hence, for the period under review no account is taken of the share consolidation. (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended 31 ended 30 ended 30 June December
June 2011 2010 2010 EUR cents per share Profit from continuing operations for the financial period/year attributable to equity holders of the parent companies Basic EPS 39.0 19.3 37.8 Diluted EPS 38.5 19.0 37.4 Underlying earnings for the financial period/year1 Basic EPS 38.2 17.9 40.6 Diluted EPS 37.7 17.7 40.1 Note: 1 Underlying EPS excludes the impact of special items. The calculation of basic and diluted EPS and basic and diluted underlying EPS from continuing operations is based on the following data: Earnings (Restated) (Restated) (Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31 ended 30 ended 30 June December June 2011 2010 2010 EUR million Profit for the financial period/year attributable to equity holders of the parent companies 212 109 224 Profit from discontinued operation (see note 9) (13) (11) (39) Related tax (see note 9) - - 5 Related non-controlling interests (see note 9) - - 2 Profit from continuing operations for the financial period/year attributable to equity holders of the parent companies 199 98 192 Special items from continuing operations (see note 6) (4) (2) 21 Related tax (see note 6) - (4) (6) Related non-controlling interests (see note 6) - (1) (1) Underlying earnings for the financial period/year1 195 91 206 Note: 1 Underlying earnings excludes the impact of special items. Number of shares (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31
2011 2010 December 2010 million Basic number of ordinary shares outstanding prior to Mondi Limited share consolidation1 510 508 508 Effect of dilutive potential ordinary shares2 7 7 6 Diluted number of ordinary shares outstanding prior to Mondi Limited share consolidation 517 515 514 Notes: 1 The basic number of ordinary shares outstanding represents the weighted average number in issue for Mondi Limited and Mondi plc for the period/year, as adjusted for the weighted average number of treasury shares held during the period/year. 2 Diluted EPS is calculated by adjusting the weighted average number of ordinary shares in issue, net of treasury shares, on the assumption of conversion of all potentially dilutive ordinary shares. (b) From continuing and discontinued operations (Reviewed) (Reviewed) (Audited)
Six months Six months Year ended ended 30 ended 30 June 31 December June 2011 2010 2010 EUR cents per share Profit for the financial period/year attributable to equity holders of the parent companies Basic EPS 41.6 21.5 44.1 Diluted EPS 41.0 21.2 43.6 Headline earnings for the financial period/year 1 Basic EPS 39.4 24.8 47.0 Diluted EPS 38.9 24.5 46.5 Note: 1 The presentation of Headline EPS is mandated under the JSE Listings Requirements. Headline earnings has been calculated in accordance with Circular 3/2009, `Headline Earnings`, as issued by the South African Institute of Chartered Accountants. The calculation of basic and diluted EPS and basic and diluted headline EPS from continuing and discontinued operations is based on the following data: Earnings (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended 31
ended 30 ended 30 June December June 2011 2010 2010 EUR million Profit for the financial period/year attributable to equity holders of the parent companies 212 109 224 Special items (4) (2) 21 Special items: restructuring and closure costs 1 23 (7) Remeasurements related to the discontinued operation1 - 1 1 Profit on disposal of tangible and intangible assets (6) (1) (1) Impairments not included in special items - - 6 Related tax (2) (3) (4) Related non-controlling interests - (1) (1) Headline earnings for the financial period/year 201 126 239 Note: 1 Remeasurements as defined in Circular 3/2009, `Headline Earnings`, as issued by the South African Institute of Chartered Accountants. 11 Alternative measure of earnings per share The directors have elected to present an alternative, non-IFRS measure of earnings per share from continuing operations in order to provide shareholders with a comparison of the continuing operations of the Group as if the demerger and related share consolidation had occurred at the beginning of each period presented. This is deemed appropriate as it is the continuing operations of the Group, after taking the impact of the share consolidation into consideration, which will be the basis of the future performance of the Group. This approach will enable a useful comparison of earnings per share from continuing operations, based on the consolidated shares, for all future periods. In addition, the effect of the recapitalisation of Mpact resulted in a repayment of intercompany debt by Mpact to Mondi Limited on 4 and 5 July 2011 of EUR76 million. These proceeds were used to reduce the Group`s net debt. The alternative measure of earnings per share has therefore been adjusted to take the related saving on interest paid into consideration as if the recapitalisation had occurred at the beginning of each period presented. Earnings
(Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended 31 ended 30 ended 30 June December
June 2011 2010 2010 EUR million Underlying earnings for the financial period/year1 195 91 206 Tax saving by Mondi Limited on intercompany interest received from Mpact2 4 4 8 Saving of interest paid on net debt at 8.6% per annum 3 3 7 Tax at 28% on saving of interest paid (1) (1) (2) Adjusted earnings for the financial period/year 201 97 219 Notes: 1 Underlying earnings excludes the impact of special items. 2 Had the recapitalisation of Mpact occurred at the beginning of each period presented, Mondi Limited would no longer have received interest on its intercompany loans to Mpact and thus the tax charge on the interest received would not have been incurred. The revised weighted average number of shares is determined as follows: Number of shares
(Restated) (Restated) (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31 2011 2010 December 2010
million Basic number of ordinary shares outstanding prior to Mondi Limited share consolidation 510 508 508 Effect of Mondi Limited share consolidation1 (28) (28) (28) Basic number of ordinary shares outstanding after Mondi Limited share consolidation2 482 480 480 Effect of dilutive potential ordinary shares3 6 6 5 Diluted number of ordinary shares outstanding after Mondi Limited share consolidation 488 486 485 Notes: 1 The actual number of shares subject to consolidation was 29 million. These figures represent the proportionate adjustment calculated in relation to the weighted average number of shares in issue. 2 The basic number of ordinary shares outstanding represents the weighted average number in issue for Mondi Limited and Mondi plc for the period/year, as adjusted for the weighted average number of treasury shares held during the period/year. 3 Diluted EPS is calculated by adjusting the weighted average number of ordinary shares in issue, net of treasury shares, on the assumption of conversion of all potentially dilutive ordinary shares. Based on the adjusted earnings and weighted average number of shares, the alternative, non-IFRS earnings per share figures for continuing operations would be: (Restated) (Restated) (Reviewed) (Reviewed) (Audited) Six months Six months Year ended 31 ended 30 ended 30 June December
June 2011 2010 2010 EUR cents per share Earnings per share - alternative measure for the financial period/year Basic EPS - alternative measure 41.7 20.2 45.6 Diluted EPS - alternative measure 41.2 20.0 45.2 12 Dividends The interim dividend for the year ending 31 December 2011 of 8.25 euro cents per ordinary share will be paid on 13 September 2011 to Mondi Limited and Mondi plc ordinary shareholders on the relevant registers on 19 August 2011. The dividend will be paid from distributable reserves of Mondi Limited and of Mondi plc, as presented in the respective company annual financial statements for the year ended 31 December 2010. The interim dividend for the year ending 31 December 2011 will be paid in accordance with the following timetable: Mondi Limited Mondi plc Last date to trade shares cum-dividend JSE Limited 12 August 2011 12 August 2011 London Stock Exchange Not applicable 16 August 2011 Shares commence trading ex-dividend JSE Limited 15 August 2011 15 August 2011 London Stock Exchange Not applicable 17 August 2011 Record date JSE Limited 19 August 2011 19 August 2011 London Stock Exchange Not applicable 19 August 2011 Last date for receipt of Dividend Reinvestment Plan 25 August 2011 25 August 2011 (DRIP) elections by Central Securities Depository Participants Last date for DRIP elections to UK Registrar and South 26 August 2011 19 August 2011* African Transfer Secretaries by shareholders of Mondi Limited and Mondi plc Payment Date South African Register 13 September 2011 13 September 2011 UK Register Not applicable 13 September 2011 DRIP purchase settlement dates 20 September 2011 16 September 2011** Currency conversion dates ZAR/euro 28 July 2011 28 July 2011 Euro/sterling Not applicable 26 August 2011 * 26 August 2011 for Mondi plc South African branch register shareholders ** 20 September 2011 for Mondi plc South African branch register shareholders Share certificates on the South African registers of Mondi Limited and Mondi plc may not be dematerialised or rematerialised between 15 August 2011 and 21 August 2011, both dates inclusive, nor may transfers between the UK and South African registers of Mondi plc take place between 10 August 2011 and 21 August 2011, both dates inclusive. Please note that following the demerger of Mpact Limited and the Mondi Limited consolidation, with effect from Monday 1 August 2011, Mondi Limited ordinary shares will trade on the JSE under the new ISIN ZAE000156550 and the same JSE code MND. 13 Retirement benefits There were no significant curtailments, settlements or other significant one- time events relating to the Group`s defined benefit schemes, post-retirement medical plans or statutory retirement obligations during the six months ended 30 June 2011. All assumptions of the Group`s material defined benefit schemes and post- retirement medical plan liabilities were re-assessed individually and the remaining Group defined benefit schemes and unfunded statutory retirement obligations were re-assessed in aggregate for the six months ended 30 June 2011. The net retirement benefit obligation decreased by EUR16 million mainly due to an exchange rate impact of EUR9 million and a transfer of the discontinued operation to be classified as held for sale of EUR6 million. The assets backing the defined benefit scheme liabilities reflect their market values as at 30 June 2011. Any movements in the assumptions have been recognised as an actuarial movement in the condensed combined and consolidated statement of comprehensive income. 14 Asset values per share Net asset value per share is defined as net assets divided by the combined number of ordinary shares in issue as at the reporting dates presented, less treasury shares held. Tangible net asset value per share is defined as the net assets less intangible assets divided by the combined number of ordinary shares in issue as at the reporting dates presented, less treasury shares held. (Reviewed) (Reviewed) (Audited)
As at 30 June As at 30 June As at 31 2011 2010 December 2010 Net asset value per share (EUR) 6.40 6.07 6.33 Tangible net asset value per share (EUR) 5.93 5.45 5.71 15 Business combinations There were no major acquisitions made for the six months ended 30 June 2011. Details of the aggregate net assets acquired, as adjusted from book to fair value, are presented as follows: Book value Revaluation Fair value EUR million Net assets acquired: Intangible assets 1 4 5 Property, plant and equipment 12 (8) 4 Inventories 5 - 5 Trade and other receivables 9 - 9 Trade and other payables (6) - (6) Short-term borrowings (4) - (4) Medium and long-term borrowings (1) - (1) Net assets acquired 16 (4) 12 Goodwill arising on acquisition 1 Total cost of acquisition 13 Debt consideration (1) Net cash paid 12 16 Disposal groups and assets held for sale Other than the discontinued operation and associated disposal group held for sale disclosed in note 9, there were no major disposal groups or assets held for sale as at 30 June 2011. 17 Consolidated cash flow analysis (a) Reconciliation of profit before tax from continuing operations to cash generated from operations (Restated) (Restated)
(Reviewed) (Reviewed) (Audited) Six months Six months Year ended 31 ended 30 ended 30 June December June 2011 2010 2010
EUR million Profit before tax from continuing operations 300 166 333 Depreciation and amortisation 172 167 340 Share-based payments 5 3 7 Non-cash effect of special items (13) (8) 11 Net finance costs 60 41 105 Net income from associates (2) (2) (2) Decrease in provisions and post-employment benefits (15) (5) (3) Increase in inventories (104) (66) (102) Increase in operating receivables (134) (187) (127) Increase in operating payables 95 116 119 Fair value gains on forestry assets (23) (16) (36) Felling costs 34 32 65 Profit on disposal of tangible and intangible assets (6) (1) (1) Other adjustments 2 (2) (4) Cash generated from continuing operations 371 238 705 Cash generated from discontinued operation 32 31 73 Cash generated from operations 403 269 778 (b) Cash and cash equivalents (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31 2011 2010 December 2010
EUR million Cash and cash equivalents per condensed combined and consolidated statement of financial position 33 77 83 Bank overdrafts included in short-term borrowings (126) (135) (59) Net cash and cash equivalents per condensed combined and consolidated statement of cash flows (93) (58) 24 (c) Movement in net debt The Group`s net debt position, excluding disposal groups is as follows: Cash and Debt due Debt due cash within one after one Total net equivalents1 year2 year debt
EUR million At 1 January 2010 37 (133) (1,421) (1,517) Cash flow (88) 95 (75) (68) Business combinations - (1) - (1) Disposal of businesses - 5 - 5 Movement in unamortised loan costs - - (2) (2) Reclassification (1) (33) 40 6 Currency movements (6) (15) (34) (55) At 30 June 2010 (58) (82) (1,492) (1,632) Cash flow 84 (44) 189 229 Disposal of businesses - 18 52 70 Movement in unamortised loan costs - - (2) (2) Reclassification 1 (240) 233 (6) Currency movements (3) (3) (17) (23) At 31 December 2010 24 (351) (1,037) (1,364) Cash flow (97) - 112 15 Business combinations - (4) (1) (5) Movement in unamortised loan costs - - (3) (3) Reclassification of discontinued operation (23) 15 119 111 Reclassification - (39) 39 - Currency movements 3 20 23 46 At 30 June 2011 (93) (359) (748) (1,200) Notes: 1 The Group operates in certain countries (principally South Africa) where the existence of exchange controls may restrict the use of certain cash balances. These restrictions are not expected to have any material effect on the Group`s ability to meet its ongoing obligations. 2 Excludes overdrafts, which are included as cash and cash equivalents. As at 30 June 2011, short-term borrowings on the condensed combined and consolidated statement of financial position of EUR458 million (as at 30 June 2010: EUR217 million; as at 31 December 2010: EUR410 million) include EUR126 million of overdrafts (as at 30 June 2010: EUR135 million; as at 31 December 2010: EUR59 million). The following table shows the amounts available to draw down on the Group`s committed loan facilities: (Reviewed) (Reviewed) (Audited)
As at 30 June As at 30 June As at 31 2011 2010 December 2010 EUR million Expiry date In one year or less 39 211 44 In more than one year 742 1,147 1,437 Total credit available 781 1,358 1,481 18 Capital commitments (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31 2011 2010 December 2010 EUR million Contracted for but not provided 122 184 98 Approved, not yet contracted for 182 200 316 The maturity of these capital commitments is: (Reviewed) (Reviewed) (Audited)
As at 30 June As at 30 June As at 31 2011 2010 December 2010 EUR million Within one year 237 242 296 One to two years 58 47 77 Two to five years 9 91 39 After five years - 4 2 Total capital commitments 304 384 414 19 Contingent liabilities and contingent assets Contingent liabilities comprise aggregate amounts as at 30 June 2011 of EUR19 million (as at 30 June 2010: EUR20 million; as at 31 December 2010: EUR20 million) in respect of loans and guarantees given to banks and other third parties. Acquired contingent liabilities of EURnil (six months ended 30 June 2010: EURnil; year ended 31 December 2010: EURnil) have been recorded on the Group`s condensed combined and consolidated statement of financial position. There are a number of legal and tax claims against the Group. Provision is made for all liabilities that are expected to materialise. Contingent assets comprise aggregate amounts as at 30 June 2011 of EURnil (as at 30 June 2010: EUR5 million; as at 31 December 2010: EUR1 million). 20 Related party transactions The Group has related party relationships with its associates and joint ventures. Transactions between Mondi Limited, Mondi plc and their respective subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The Group and its subsidiaries, in the ordinary course of business, enter into various sale, purchase and service transactions with joint ventures and associates and others in which the Group has a material interest. These transactions are under terms that are no less favourable than those arranged with third parties. These transactions, in total, are not considered to be significant. There have been no significant changes to the related parties as disclosed in note 38 of the Group`s annual financial statements for the year ended 31 December 2010. Dividends received from associates for the six months ended 30 June 2011 amount to EURnil (six months ended 30 June 2010: EUR2 million; year ended 31 December 2010: EUR2 million). 21 Events occurring after 30 June 2011 The following events have occurred subsequent to 30 June 2011: - Mpact (previously called Mondi Packaging South Africa) demerger (see note 9); - Mondi Limited share consolidation (see notes 9 to 11); and - Proposed interim dividend (see note 12). Production statistics Six months Six months Year ended 31
ended 30 June ended 30 June December 2011 2010 2010 Europe & International Uncoated fine paper Tonnes 712,886 790,748 1,524,225 Containerboard Tonnes 991,970 1,008,305 1,939,935 Kraft paper Tonnes 535,238 466,156 984,607 Hardwood pulp Tonnes 527,889 474,700 935,628 Internal consumption Tonnes 496,518 451,524 825,664 External Tonnes 31,371 23,176 109,964 Softwood pulp Tonnes 1,011,757 935,783 1,899,518 Internal consumption Tonnes 934,588 856,279 1,688,472 External Tonnes 77,169 79,504 211,046 Corrugated board and boxes Mm2 609 713 1,308 Industrial bags M units 2,050 1,858 3,850 Coating and release liners Mm2 1,797 1,601 3,187 Newsprint Tonnes 97,931 98,051 197,601 South Africa Division Uncoated fine paper Tonnes 114,686 152,663 276,957 Containerboard Tonnes 126,516 128,830 259,785 Hardwood pulp Tonnes 282,284 287,417 589,186 Internal consumption Tonnes 153,402 162,785 366,170 External Tonnes 128,882 124,632 223,016 Softwood pulp Tonnes 58,646 56,885 112,956 Woodchips Bone dry tonnes 101,454 129,516 280,154 Newsprint Joint Ventures (attributable share) Aylesford Tonnes 95,955 92,575 187,971 Mondi Shanduka Newsprint (MSN) Tonnes 61,548 64,976 126,530 Exchange rates Six months Six months Year ended
ended 30 June ended 30 June 31 December 2011 2010 2010 Closing rates against the euro South African rand 9.86 9.38 8.86 Pounds sterling 0.90 0.82 0.86 Polish zloty 3.99 4.15 3.97 Russian rouble 40.40 38.28 40.82 US dollar 1.45 1.23 1.34 Czech koruna 24.34 25.69 25.06 Turkish lira 2.35 1.94 2.07 Average rates for the period against the euro South African rand 9.69 9.99 9.70 Pounds sterling 0.87 0.87 0.86 Polish zloty 3.95 4.00 3.99 Russian rouble 40.14 39.88 40.27 US dollar 1.40 1.33 1.33 Czech koruna 24.35 25.72 25.29 Turkish lira 2.21 2.02 2.00 28 July 2011 Sponsor: UBS South Africa (Pty) Ltd Date: 28/07/2011 08:00:09 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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