Wrap Text
Half-yearly results for the six months ended 30 June 2012
Mondi Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1967/013038/06)
JSE share code: MND ISIN: ZAE000156550
Mondi plc
(Incorporated in England and Wales)
(Registered number: 6209386)
JSE share code: MNP ISIN: GB00B1CRLC47
LSE share code: MNDI
7 August 2012
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 JSE Listings
Requirements and/or the Disclosure Rules and Transparency Rules and/or the Listing Rules of the United
Kingdom Listing Authority.
Half-yearly results for the six months ended 30 June 2012
Highlights
· Good operating performance after a challenging start to the year
· Return on Capital Employed of 13.3%, in excess of the Group's through-the-cycle target of 13%
· Interim dividend of 8.9 euro cents per share, up 8%
· Strong cash generation of EUR353 million
· Significant strategic acquisitions:
* Swiecie minorities acquired for EUR296 million
* EUR655 million acquisition of Nordenia agreed
Financial summary
Six months
Six months Six months ended 31
ended 30 ended 30 June December
EUR million, except for percentages and per share measures June 2012 2011 2011
From continuing operations
Group revenue 2,840 2,942 2,797
Underlying EBITDA(1) 436 526 438
Underlying operating profit(1) 269 354 268
Underlying profit before tax(1) 217 296 216
Profit before tax 223 300 157
Per share measures
Basic underlying earnings per share 30.9 38.2 29.9
Basic earnings per share alternative measure(2)(EUR cents) 30.9 41.7 30.1
Basic earnings per share from continuing operations (EUR cents) 31.7 39.0 18.5
Basic earnings per share (EUR cents) 31.7 41.6 24.5
Interim dividend per share (EUR cents) 8.9 8.25
Free cash flow per share3 (EUR cents) 9.3 19.6 59.2
Cash generated from operations 353 403 514
Net debt 1,273 1,200 831
Group Return on Capital Employed (ROCE )(4) 13.3% 15.2% 15.0%
Notes:
1 The Group presents underlying EBITDA, operating profit and profit before tax as measures which exclude special items in order to provide a
more effective comparison of the underlying financial performance between reporting periods.
2 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 in the 2011 comparative earnings per share figures to reflect the position
as if the transaction had been completed on 1 January 2011. This is intended to enable a more useful comparison of earnings per share from
continuing operations, based on the consolidated number of shares.
3 Free cash flow per share is net increase in cash and cash equivalents before the effects of acquisitions and disposals of businesses and
changes in net debt and dividends paid divided by the net number of shares in issue at the end of the reporting period.
4 ROCE is the 12 month rolling average underlying operating profit expressed as a percentage of the average rolling 12 month capital employed,
adjusted for impairments and spend on strategic projects which are not yet in operation.
David Hathorn, Mondi Group chief executive, said:
"We are pleased to announce good results following the anticipated pick-up in trading after a
challenging start to the year. Cash generation is robust and our return on capital employed remains
above our through-the-cycle target, reflecting the strength of our low-cost operating model.
We have made significant progress on a number of strategic initiatives, most notably the acquisition
of the remaining minority interest in Swiecie and the agreement to acquire a 93.9% interest in
Nordenia. These steps build on our position as a leading international packaging and paper company
with a strong platform for continued growth in emerging markets.
The macroeconomic environment remains a concern, with continued soft demand evident in certain
western European markets. Encouragingly, demand in a number of the emerging markets to which the
Group is exposed remains firm, and positive supply side fundamentals in various of our core grades
offer price support. As such, we remain confident of delivering against our expectations for the full
year."
Contact details
Mondi Group
David Hathorn +27 (0)11 994 5418
Andrew King +27 (0)11 994 5415
Lora Rossler +27 (0)11 994 5400 / +27 (0)83 627 0292
FTI Consulting
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) or +27 (0)11 535 3600
An online audio cast facility will be available via: www.mondigroup.com/HYResults12.
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 7 August
2012.
Editors' notes
Mondi is an international packaging and paper Group, with production operations across 28 countries and
revenues of EUR5.7 billion in 2011. The Group's key operations are located in central Europe, Russia and South
Africa and as at the end of 2011, Mondi Group employed 23,400 people.
Mondi Group 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 paper 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 Group 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 Global, European and UK Index Series (since 2008) and the JSE's Socially Responsible
Investment (SRI) Index since 2007. The Group was also included in the FTSE350 Carbon Disclosure
Leadership Index for the second year.
Forward-looking statements
This document includes (or may include) certain 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 of EUR269 million was in line with that of the second half of 2011 and
24% below that of the comparable prior year period.
Average selling prices were lower across all grades compared to both the first and second half of the prior
year.
Sales volumes were above those of the second half of the prior year, reflecting improving demand, but were
still below the volumes achieved in the first half of 2011 in certain segments, most notably kraft paper and
industrial bags.
Input costs provided some benefit with recovered fibre and pulp prices, on average, below 2011 levels.
Finance charges for the period were lower than those of the comparable prior year period mainly as a result of
the lower average net debt.
The underlying effective tax rate of 20% is consistent with that of 2011 as the Group continued to benefit from
a favourable profit mix and investment incentives, most notably in Poland.
Underlying earnings per share in the six months ended 30 June 2012 was 30.9 euro cents per share, a 26%
decrease on the basic earnings per share - alternative measure applicable to the comparable prior year period
and better than that achieved in the second half of 2011. An interim dividend of 8.9 euro cents per share, up
8% on the prior year interim dividend of 8.25 euro cents per share, has been declared.
The Group achieved a Return on Capital Employed (ROCE) of 13.3%, above the through-the-cycle target of
13%.
The Group remains strongly cash generative with cash generated from operations of EUR353 million, including
the effects of the normal seasonal pick-up in working capital in the first half of the year.
Capital expenditure of EUR112 million represents 67% of the Group's depreciation charge. An increase in capital
expenditure is expected in the second half, partly due to investment in the previously announced energy and
de-bottlenecking investment projects ramping up as well as the normal seasonal variation in capital
expenditure.
On 18 April 2012, Mondi concluded an all cash public tender offer for the shares in Mondi Swiecie that it did
not already own increasing its holding to 93.2% from 66%. On 18 May 2012, Mondi acquired the remaining
shares it did not already own. The total consideration paid by Mondi was EUR296 million.
On 2 May 2012 Mondi Swiecie S.A. acquired Saturn Management Sp. Z o.o., the company that owns the
power and heat generating plant that provides Mondi Swiecie S.A. with most of its electricity requirements and
all of its heat and steam needs, for a net cash consideration of EUR31 million and the assumption of debt of EUR57
million.
Net debt of EUR1,273 million at 30 June 2012 increased from EUR831 million at 31 December 2011, reflecting the
impact of the Mondi Swiecie acquisitions described above as well as the usual bias towards the first half of the
year in respect of cash outflows from other financing activities.
The average maturity of the Group's committed debt facilities at 30 June 2012 was 4.0 years, with unutilised
committed facilities in excess of EUR580 million.
On 11 July 2012, Mondi announced that it has agreed to acquire 93.4% of the outstanding share capital of
Nordenia International AG for a total cash consideration of EUR240 million and the assumption of debt and debt
like liabilities of EUR398 million, implying an enterprise value of EUR655 million. The transaction is subject to
customary completion conditions including the approval of certain competition authorities. On 23 July 2012,
agreement was reached to acquire a further 0.5% interest on the same completion conditions. The acquisition
is expected to be completed in the fourth quarter of 2012 and the cash consideration will be financed by
means of a new, two-year EUR250 million committed bank debt facility obtained subsequent to 30 June 2012.
Nordenia is an international supplier of innovative consumer packaging solutions and hygiene components.
Following the completion of the Nordenia acquisition, Mondi will reorganise its Europe & International Division
into four businesses: Packaging Paper; Fibre Packaging; Consumer Packaging; and Uncoated Fine Paper
(UFP). Nordenia will form part of the Consumer Packaging business. The Group's restated historical
segmental information, to reflect this reorganisation, is presented as an annexure to this half-yearly report.
Europe & International - Uncoated Fine Paper business
Six months
Six months Six months ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Segment revenue 749 734 695
of which inter-segment revenue 8 13 7
EBITDA 154 169 140
Underlying operating profit 100 118 87
Capital expenditure 24 33 28
Net segment assets 1,270 1,360 1,283
ROCE 15.7% 16.9% 16.7%
The business continued to deliver a strong operating performance with ROCE of 15.7%. Underlying operating
profit of EUR100 million, 15% below the comparable prior year period, reflects primarily the effects of the annual
planned maintenance shut at Syktyvkar, which took place during June, compared to July in the previous year,
resulting in lower sales volumes and higher costs compared to the first half of 2011. Marginally lower average
net selling prices, due in part to a change in sales mix, also contributed to the lower result. Average
benchmark European uncoated fine paper prices were slightly lower than the comparable prior year period
and approximately 2% below the average prices in the second half of 2011.
Lower pulp and chemical costs benefited the business whilst energy costs increased across all mills due to
higher gas and other fuel costs. Wood costs were lower in central Europe but higher in Russia.
Planned maintenance shuts in Ruomberok and Neusiedler will take place during the third quarter of the year
as European markets enter the traditional slower summer period.
Europe & International - Corrugated business
Six months
Six months Six months ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Segment revenue 680 704 680
of which inter-segment revenue 20 34 30
EBITDA 100 142 109
Underlying operating profit 65 105 73
Capital expenditure 22 18 26
Net segment assets 1,087 1,058 967
ROCE 14.1% 20.1% 18.5%
While ROCE remained above the Group's through the cycle target at 14.1%, the underlying operating profit of
EUR65 million was well below that of the comparable prior year period due to significantly lower average selling
prices of containerboard. Sales volumes were slightly higher over the same period.
Despite price increases implemented across all grades during the period following the lows reached in the
early part of the year, average benchmark kraftliner and recycled containerboard prices were both 12% lower
than those of the comparable prior year period. While the virgin containerboard grades showed positive price
momentum throughout the period under review, supported by capacity reductions in Europe and the stronger
US dollar, recycled containerboard grades came under pressure in the second quarter due to a combination of
lower recovered fibre costs, low demand growth and new production capacity. Price increases for white top,
virgin and recycled containerboard were announced in July. The actual price increase achieved will be subject
to individual negotiations with customers.
Average benchmark recovered fibre costs declined by approximately 6% compared to the second half of 2011
during the period, and were more than 10% lower than the comparable prior year period. Wood, pulp and
energy costs were also lower during the period whilst chemical costs increased marginally.
The planned maintenance shut for Mondi Swiecie took place during July.
The corrugated packaging business reflected a pleasing improvement in underlying operating profit, mainly
due to increased average selling prices due to product mix improvements driven by an increased focus on
customer segmentation and lower paper input costs.
Europe & International - Bags & Coatings business
Six months
Six months Six months ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Segment revenue 1,149 1,319 1,159
of which inter-segment revenue 22 27 19
EBITDA 145 179 148
Underlying operating profit 96 128 100
Capital expenditure 47 43 67
Net segment assets 1,347 1,398 1,279
ROCE 16.5% 17.4% 19.0%
Underlying operating profit of EUR96 million was 25% lower than the comparable prior year period but broadly in
line with the second half of 2011. ROCE remained robust at 16.5%.
Commercial downtime in the kraft paper business, taken in the second half of 2011, continued at reduced
levels into the first quarter of 2012. Full production resumed in the second quarter on the back of the end of
destocking and improved demand in export markets. Average selling prices were approximately 7% lower
than the comparable prior year period and 9% lower than the second half of 2011, reflecting the lower prices
agreed on contract volumes set in the early part of the year. Price increases were announced in the latter part
of the second quarter and are expected to take effect in the second half of the year. While the outlook for
near-term European demand continues to be uncertain, export markets remain strong, driven by a
combination of underlying demand growth and supply contraction. The business benefited from lower wood
and pulp input costs whilst energy prices were higher.
Selling prices in industrial bags were broadly in line with the comparable prior year period but demand was
weaker, particularly in southern Europe. The business benefited from lower paper input costs and an ongoing
focus on fixed costs savings.
Coatings was negatively impacted by lower sales prices and volumes versus the comparable prior year
period, although sales volumes have improved from the weaker demand seen during the second half of 2011.
Furthermore, the start-up of a new facility in the US, coupled with the related closure of an old site and
relocation of activities negatively impacted results. Consumer packaging benefited from stable demand.
Higher resin prices were successfully passed on to customers and the business also benefited from an
improved product mix.
South Africa Division
Six months
Six months Six months ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Segment revenue 287 269 300
of which inter-segment revenue 57 90 65
EBITDA 55 54 60
Underlying operating profit 29 27 35
Capital expenditure 15 13 14
Net segment assets 840 877 828
ROCE 9.5% 9.7% 8.9%
The underlying operating profit of EUR29 million was marginally higher than the comparable prior year period.
The business benefited from both the weaker South African rand and an increase in sales volumes and lower
operating costs, primarily due to the shift in the planned annual maintenance shut at the key Richards Bay
operations from the first half in the prior year to the third quarter in the current year. This was partially offset by
lower average selling prices, particularly for hardwood pulp and white top containerboard. A continued focus
on the domestic market and improved operating performance at Richards Bay has benefited the business
through improved margins.
In June 2012 a further 8 forestry land settlement agreements were reached. To date Mondi has signed a total
of 19 land settlements involving about 35,000 hectares of its forestry land. The settlements were reached
using a sale and lease back framework developed by Mondi and the South African Government which
ensures that title to the land is transferred to the various claimant communities, that Mondi is paid a fair price
for the land and which secures a continued fibre supply for its mills.
Newsprint
Six months
Six months Six months ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Segment revenue 83 80 84
of which inter-segment revenue 1 - -
EBITDA - 1 (6)
Underlying operating profit (3) (5) (13)
Capital expenditure 1 2 2
Net segment assets 66 100 59
ROCE (20.6%) (9.2%) (19.2%)
The Newsprint business made an operating loss of EUR3 million. Mondi Shanduka Newsprint benefited from
price increases during the period, which were sufficient to return the business to a modest level of profitability
in the second quarter and address electricity price increases for the year. Aylesford Newsprint was negatively
impacted by lower average selling prices as well as higher chemical and energy costs, offset by cost reduction
initiatives and a lower depreciation charge.
Financial review
Input costs
Lower input costs provided some offset to lower selling prices during the period. Lower wood costs were
experienced in general across central Europe, although this was offset by higher costs in Russia and South
Africa. Benchmark recovered fibre costs were approximately 10% lower on average than the comparable prior
year period. Prices were volatile throughout the period, increasing significantly off the lows at the end of 2011
through the first quarter, and subsequently weakening in the latter part of the period under review. Average
benchmark pulp prices were approximately 7% lower in euro terms (14% lower in US dollar terms) than the
comparable prior year period benefiting the European businesses in the Group that are net consumers of
pulp. Overall, the Group is around 95,000 tonnes long in pulp, resulting in a small negative impact on overall
Group profitability.
Higher energy costs impacted margins across the business. The coatings & consumer packaging business
benefited from lower average resin prices and other chemical input costs versus the comparable prior year
period, although prices did increase during the period under review.
Currency exposure
Currency effects were muted during the period with most production currencies at similar average levels
versus the euro to those of the second half of 2011 and weaker than levels of the comparable prior year
period. The stronger US dollar versus the euro has however had a positive impact across the Group, both on
dollar denominated exports, and due to the support offered to European pricing levels.
Non-controlling interests
Lower profitability in the Swiecie and Ruomberok mills, particularly in the first quarter of 2012, resulted in a
reduction in earnings attributable to holders of non-controlling interests in those entities. The acquisition of the
non-controlling interests in April and May in Mondi Swiecie S.A. further contributed to the reduction in earnings
attributable to holders of non-controlling interests. The full effect of this acquisition will be seen in the second
half of the year.
Special items
There were no significant special items during the period. A gain of EUR6 million was realised on the sale of land
in the South Africa Division and Mondi Shanduka Newsprint as part of their ongoing settlement of land claims.
Cash flow
Cash flow from operations of EUR353 million was negatively impacted by the lower profitability compared to the
prior year period as well as a net outflow due to increased working capital. Working capital as a percentage of
turnover increased during the period to 12.6%, due to normal seasonal effects as well as a build up of
inventory in anticipation of a number of planned maintenance shuts to take place in the second half of the
year.
Capital expenditure
Good progress is being made on the energy related investments in Syktyvkar, Stambolijski, Richards Bay and
Frantschach. The pulp dryer approved for Syktyvkar has been put on hold pending clarification of various
technical and financial parameters.
Capital expenditure in the period under review was at 67% of the Group's depreciation charge. This is
expected to increase in the second half of the year, and in subsequent years, to approximate the Group's
depreciation charge as expenditure on the various energy related investments ramps up.
Treasury and borrowings
Net debt of EUR1,273 million was EUR442 million higher than at 31 December 2011. This was impacted by the
acquisitions of both the non-controlling interest in Mondi Swiecie S.A., and of Saturn Management Sp. Z o.o.
(together EUR384 million). The net debt to trailing 12 month EBITDA ratio was 1.5 times and gearing was 31% at
30 June 2012. The Group's long-term investment grade credit ratings of Baa3 (Moody's Investor Services)
and BBB- (Standard and Poor's) were reaffirmed during the period.
In July 2012, Mondi secured a new two-year EUR250 million committed bank debt facility in order to fund the
proposed acquisition of Nordenia International AG.
Principal risks and uncertainties
It is in the nature of Mondi's business that the Group is exposed to risks and uncertainties which may have an
impact on future performance and financial results, as well as on its ability to meet certain social and
environmental objectives.
On an annual basis, the DLC executive committee and Boards conduct a formal systematic review of the most
significant risks and uncertainties and the Group's responses to those risks. These risks are assessed against
pre-determined risk tolerance limits, established by the Boards. Additional risk reviews are undertaken on an
ad-hoc basis for significant investment decisions and when changing business conditions dictate. The key
risks have been reviewed as part of the half-yearly results and remain consistent with those presented on
pages 24 and 25 of the 2011 integrated report and financial statements.
The Group believes that it has effective systems and controls in place to manage the key risks identified below
within the risk tolerance levels established by the Boards.
· 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.
· Cost and availability of a sustainable supply of fibre
Fibre (wood, pulp, recovered paper) is Mondi's most important raw material, comprising approximately
one-third of total input costs. Increases in the costs of any of these raw materials, or any difficulties in
procuring a sustainable supply of wood, pulp or recovered paper 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 FSC certified virgin fibre in Russia and South Africa, serve to mitigate these risks. It is the
Group's objective to acquire fibre (wood and pulp) from sustainable sources with internationally
credible certification and to avoid any illegal or controversial supply.
· Foreign currency exposure and exchange rate volatility
The location of a number of the Group's significant operations in a range of different countries 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 currency exposures are
to the US dollar, South African rand, Russian rouble, Czech koruna, Polish zloty, Swedish krona and
Turkish lira.
The Group's policy is to hedge balance sheet exposures against short-term currency volatility.
Furthermore, the Group's geographic diversification provides some level of protection.
· 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 with differing political, economic and legal systems. In
some countries, such systems are less predictable than in countries with more developed institutional
structures. Significant changes in the political, economic or legal landscape of any country in which
the Group is invested may have a material effect on the Group's operations in that country.
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.
· Employee attraction, retention and safety
The complexity of operations and geographic diversity of the Group demands high quality,
experienced employees in all operations.
Appropriate reward and retention strategies are in place to attract and retain talent at all levels of the
organisation. Mondi has a policy of working towards zero-harm. Incidents are fully investigated,
remedial actions taken and early warning indicators used to direct preventative work. Mondi adopts
internationally recognised safety and health management systems across all its operations.
· Capital intensive operations
Mondi operates large facilities, often in remote locations. The ongoing safety and sustainable
operation of such sites is critical to the success of the Group.
Mondi's management system ensures ongoing monitoring of all operations to ensure they meet the
requisite standards and performance requirements. A structured maintenance programme is in place
under the auspices of the Group technical director. Emergency preparedness and response
procedures are in place and subject to periodic drills. Mondi has adequate insurance in place to cover
material property damage, business interruption and liability risks.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance
and position are set out above. The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the financial statements.
Mondi's geographical spread, product diversity and large customer base mitigate potential risks of customer or
supplier liquidity issues. Ongoing initiatives by management in implementing profit improvement initiatives
which include plant optimisation, cost-cutting, and restructuring and rationalisation activities have consolidated
the Group's leading cost position in its chosen markets. Working capital levels and capital expenditure
programmes are strictly monitored and controlled.
The Group meets its funding requirements from a variety of sources. The availability of some of these facilities
is dependent on the Group meeting certain financial covenants all of which have been complied with. Mondi
had EUR584 million of undrawn committed debt facilities as at 30 June 2012 which should provide sufficient
liquidity in the medium term. In addition, subsequent to 30 June 2012, the Group has obtained a new, two-
year EUR250 million committed bank debt facility to fund the cash consideration of the purchase of Nordenia
International AG.
The Group's forecasts and projections, taking account of reasonably possible changes in trading performance,
including an assessment of the current macroeconomic environment, particularly in Europe, indicate that the
Group should be able to operate well within the level 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 the half-yearly financial statements.
Dividend
An interim dividend of 8.9 euro cents per share has been declared by the directors and will be paid on 18
September 2012 to those shareholders on the register of Mondi plc on 24 August 2012. An equivalent South
African rand interim dividend will be paid on 18 September 2012 to shareholders on the register of Mondi
Limited on 24 August 2012. 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 2011.
Outlook
The macroeconomic environment remains a concern, with continued soft demand evident in certain western
European markets. Encouragingly, demand in a number of the emerging markets to which the Group is
exposed remains firm, and positive supply side fundamentals in various of our core grades offer price support.
As such, we remain confident of delivering against our expectations for the full year.
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 2012 and a description of the principal risks and uncertainties for the remaining six months of the
year ending 31 December 2012; 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 2011.
David Hathorn Andrew King
Director Director
6 August 2012
Independent review report to the shareholders of Mondi Limited
Introduction
We have reviewed the Group's condensed combined and consolidated financial statements for the six months
ended 30 June 2012 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 requirements of 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
requirements of the Companies Act of South Africa.
Deloitte & Touche
Registered Auditor
Per Bronwyn Kilpatrick
Partner
Sandton
6 August 2012
Deloitte & Touche
Registered Auditors
Buildings 1 and 2, Deloitte Place, The Woodlands
Woodlands Drive, Woodmead, Sandton
Republic of South Africa
National Executive: LL Bam Chief Executive AE Swiegers Chief Operating Officer GM Pinnock Audit DL
Kennedy Risk Advisory NB Kader Tax L Geeringh Consulting & Clients & Industries JK Mazzocco Talent &
Transformation CR Beukman Finance M Jordan Strategy S Gwala Special Projects TJ Brown Chairman of
the Board MJ Comber Deputy Chairman of the Board.
A full list of partners and directors is available on request.
B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code
Member of Deloitte Touche Tohmatsu Limited
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 2012 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 2012 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
6 August 2012
Condensed combined and consolidated income statement
for the six months ended 30 June 2012
(Reviewed) (Reviewed) (Audited)
Six months ended 30 June Six months ended 30 June
2012 2011 Year ended 31 December 2011
Before Special After Before Special After Before Special After
special items special special items special special items special
EUR million Notes items (note 6) items items (note 6) items items (note 6) items
Continuing operations
Group revenue 4 2,840 - 2,840 2,942 - 2,942 5,739 - 5,739
Materials, energy and consumables
used (1,500) - (1,500) (1,528) - (1,528) (2,998) - (2,998)
Variable selling expenses (264) - (264) (257) - (257) (511) - (511)
Gross margin 1,076 - 1,076 1,157 - 1,157 2,230 - 2,230
Maintenance and other indirect
expenses (124) - (124) (133) - (133) (272) - (272)
Personnel costs (413) - (413) (417) - (417) (808) (4) (812)
Other net operating expenses (103) - (103) (81) 1 (80) (186) (2) (188)
Depreciation, amortisation and
impairments (167) - (167) (172) - (172) (342) (48) (390)
Operating profit/(loss) 4/5 269 - 269 354 1 355 622 (54) 568
Non-operating special items 6 - 6 6 - 3 3 - (1) (1)
Net income from associates 1 - 1 2 - 2 1 - 1
Total profit/(loss) from operations
and associates 270 6 276 356 4 360 623 (55) 568
Net finance costs (53) - (53) (60) - (60) (111) - (111)
Investment income 6 - 6 15 - 15 30 - 30
Foreign currency losses (3) - (3) (2) - (2) - - -
Finance costs 7 (56) - (56) (73) - (73) (141) - (141)
Profit/(loss) before tax 217 6 223 296 4 300 512 (55) 457
Tax (charge)/credit 8 (43) (2) (45) (59) - (59) (102) 2 (100)
Profit/(loss) from continuing
operations 174 4 178 237 4 241 410 (53) 357
Discontinued operation
Profit from discontinued operation 9 - 13 43
Profit for the financial period/year 178 254 400
Attributable to:
Non-controlling interests 25 42 70
Equity holders of the parent
companies 153 212 330
Condensed combined and consolidated income statement
for the six months ended 30 June 2012 (continued)
(Reviewed) (Reviewed) (Audited)
Six months ended 30 June Six months ended 30 June
Notes 2012 2011 Year ended 31 December 2011
Earnings per share (EPS) for
profit attributable to equity
holders of the parent companies
From continuing operations
Basic EPS (EUR cents) 10 31.7 39.0 57.5
Diluted EPS (EUR cents) 10 31.6 38.5 56.8
Basic underlying EPS (EUR cents) 10 30.9 38.2 68.1
Diluted underlying EPS (EUR cents) 10 30.8 37.7 67.3
From continuing and
discontinued operations
Basic EPS (EUR cents) 10 31.7 41.6 66.1
Diluted EPS (EUR cents) 10 31.6 41.0 65.3
Basic headline EPS (EUR cents) 10 30.9 39.4 69.9
Diluted headline EPS (EUR cents) 10 30.8 38.9 69.1
Condensed combined and consolidated statement of comprehensive income
for the six months ended 30 June 2012
(Reviewed) (Reviewed) (Audited)
Six months Six months
ended 30 June ended 30 June Year ended 31
EUR million 2012 2011 December 2011
Profit for the financial period/year 178 254 400
Other comprehensive income
Items that may subsequently be reclassified to the combined and consolidated
income statement:
Effect of cash flow hedges 3 5 12
Exchange differences on translation of foreign operations 48 (84) (196)
Share of other comprehensive income of associates - (1) (1)
Tax effect thereof - (1) (4)
Items that will not subsequently be reclassified to the combined and consolidated
income statement:
Actuarial losses on post-retirement benefit schemes (35) (1) (18)
Surplus restriction on post-retirement benefit schemes 23 (1) (3)
Tax effect thereof 1 - 4
Other comprehensive income for the financial period/year, net of tax 40 (83) (206)
Total comprehensive income for the financial period/year 218 171 194
Attributable to:
Non-controlling interests 36 33 43
Equity holders of the parent companies 182 138 151
Condensed combined and consolidated statement of financial position
as at 30 June 2012
(Reviewed) (Reviewed) (Audited)
As at 30 June As at 30 June As at 31
EUR million Notes 2012 2011 December 2011
Intangible assets 243 241 238
Property, plant and equipment 3,454 3,625 3,377
Forestry assets 306 299 297
Investments in associates 12 12 10
Financial asset investments 40 31 33
Deferred tax assets 5 11 5
Retirement benefits surplus 13 6 12 8
Derivative financial instruments 2 - 3
Total non-current assets 4,068 4,231 3,971
Inventories 666 726 637
Trade and other receivables 936 959 829
Current tax assets 5 8 6
Financial asset investments - - 1
Cash and cash equivalents 17b-c 60 33 191
Derivative financial instruments 5 4 10
Assets held for sale
Continuing operations 16 - 1 -
Discontinued operation 9 - 495 -
Total current assets 1,672 2,226 1,674
Total assets 5,740 6,457 5,645
Short-term borrowings 17c (319) (485) (286)
Trade and other payables (884) (989) (891)
Current tax liabilities (81) (84) (78)
Provisions (34) (45) (43)
Derivative financial instruments (5) (4) (8)
Total current liabilities (1,323) (1,607) (1,306)
Medium and long-term borrowings 17c (1,014) (748) (737)
Retirement benefits obligation 13 (217) (196) (202)
Deferred tax liabilities (317) (326) (310)
Provisions (33) (36) (35)
Derivative financial instruments (1) (10) -
Other non-current liabilities (20) (20) (20)
Liabilities directly associated with assets classified as held for sale
Discontinued operation 9 - (248) -
Total non-current liabilities (1,602) (1,584) (1,304)
Total liabilities (2,925) (3,191) (2,610)
Net assets 2,815 3,266 3,035
Equity
Ordinary share capital and stated capital 542 646 542
Retained earnings and other reserves 1,973 2,168 2,044
Total attributable to equity holders of the parent companies 2,515 2,814 2,586
Non-controlling interests in equity 300 452 449
Total equity 2,815 3,266 3,035
Condensed combined and consolidated statement of financial position
as at 30 June 2012 (continued)
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 6 August 2012 and were signed on their behalf by:
David Hathorn Andrew King
Director Director
Mondi Limited company registration number: 1967/013038/06
Mondi plc company registered number: 6209386
Condensed combined and consolidated statement of cash flows
for the six months ended 30 June 2012
(Reviewed) (Reviewed) (Audited)
Six months Six months
ended 30 June ended 30 June Year ended 31
EUR million Notes 2012 2011 December 2011
Cash generated from operations 17a 353 403 917
Dividends from associates - - 2
Income tax paid (45) (45) (85)
Net cash generated from operating activities 308 358 834
Cash flows from investing activities
Investment in property, plant and equipment (109) (126) (263)
Investment in intangible assets (3) (1) (5)
Proceeds from the disposal of property, plant and equipment and intangible
assets 5 7 9
Investment in forestry assets (29) (23) (42)
Investment in financial asset investments (4) (7) (13)
Proceeds from the sale of financial asset investments 4 7 8
Acquisition of subsidiaries, net of cash and cash equivalents 15 (34) (12) (12)
Acquisition of associates, net of cash and cash equivalents - - (2)
Proceeds from the disposal of subsidiaries, net of cash and cash
equivalents 1 14 17
Disposal of discontinued operation's cash and cash equivalents - - (38)
Loan advances to related parties (8) (1) -
Loan repayments from/(advances to) external parties - 1 (1)
Interest received 2 5 9
Other investing activities - - 2
Net cash used in investing activities (175) (136) (331)
Cash flows from financing activities
Repayment of short-term borrowings 17c (52) (13) (135)
Proceeds from medium and long-term borrowings 17c 291 13 123
Repayment of medium and long-term borrowings 17c (51) (112) (127)
Interest paid (60) (75) (106)
Dividends paid to non-controlling interests 12 (29) (40) (43)
Dividends paid to equity holders of the parent companies 12 (85) (86) (126)
Purchases of treasury shares (34) (7) (12)
Non-controlling interests bought out 14 (296) (1) (1)
Net realised gain on cash and asset management swaps 2 - 9
Other financing activities - 2 (1)
Net cash used in financing activities (314) (319) (419)
Net (decrease)/increase in cash and cash equivalents (181) (97) 84
Cash and cash equivalents at beginning of financial period/year1 17c 117 24 24
Cash movement in the financial period/year 17c (181) (97) 84
Reclassification of discontinued operation 17c - (23) -
Effects of changes in foreign exchange rates 17c (1) 3 9
Cash and cash equivalents at end of financial period/year1 (65) (93) 117
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 2012
Total
Combined attributable to
share capital equity holders
and stated Retained Other of the parent Non-controlling Total
EUR million capital earnings reserves(1) companies interests equity
At 1 January 2011 646 1,916 201 2,763 461 3,224
Dividends paid - (86) - (86) (40) (126)
Total comprehensive income for the
financial period - 212 (74) 138 33 171
Issue of shares under employee share
schemes - 7 (7) - - -
Purchases of treasury shares - (7) - (7) - (7)
Non-controlling interests bought out - 1 - 1 (2) (1)
Other - - 5 5 - 5
At 30 June 2011 646 2,043 125 2,814 452 3,266
Dividends paid - (40) - (40) (3) (43)
Effect of dividend in specie distributed (104) (101) - (205) - (205)
Total comprehensive income for the
financial period - 118 (105) 13 10 23
Issue of shares under employee share
schemes - 5 (5) - - -
Purchases of treasury shares - (5) - (5) - (5)
Disposal of treasury shares - 4 - 4 - 4
Disposal of discontinued operation - - (5) (5) (6) (11)
Disposal of businesses - - (1) (1) - (1)
Non-controlling interests bought out - 4 - 4 (4) -
Reclassification - 13 (13) - - -
Other - - 7 7 - 7
At 31 December 2011 542 2,041 3 2,586 449 3,035
Dividends paid - (85) - (85) (29) (114)
Total comprehensive income for the
financial period - 153 29 182 36 218
Issue of shares under employee share
schemes - 9 (9) - - -
Purchases of treasury shares - (34) - (34) - (34)
Non-controlling interests bought out - (140) - (140) (156) (296)
Other - - 6 6 - 6
At 30 June 2012 542 1,944 29 2,515 300 2,815
Note:
1 Other reserves consist of the share-based payment reserve in surplus of EUR14 million (six months ended 30 June 2011: EUR15 million; year ended
31 December 2011: EUR17 million), cumulative translation adjustment reserve in deficit of EUR171 million (six months ended 30 June 2011: EUR107
million; year ended 31 December 2011: EUR208 million), cash flow hedge reserve in surplus of EUR1 million (six months ended 30 June 2011: deficit
of EUR7 million; year ended 31 December 2011: deficit of EUR2 million), post-retirement benefit reserve in deficit of EUR67 million (six months ended 30
June 2011: EUR41 million; year ended 31 December 2011: EUR56 million), merger reserve in surplus of EUR259 million (six months ended 30 June 2011:
EUR259 million; year ended 31 December 2011: EUR259 million) and other sundry reserves in deficit of EUR7 million (six months ended 30 June 2011:
surplus of EUR6 million; year ended 31 December 2011: deficit of EUR7 million).
Notes to the condensed combined and consolidated financial statements
for the six months ended 30 June 2012
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
2012 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 2011, 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'.
The information for the year ended 31 December 2011 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.
These financial statements have been prepared under supervision of the Group Chief Financial Officer,
Andrew King CA (SA), as required by Section 29(1)(e)(ii) of the Companies Act of South Africa 2008.
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 2011.
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) (Reviewed) (Audited)
Six months ended 30 June 2012 Six months ended 30 June 2011 Year ended 31 December 2011
Segment Internal External Segment Internal External Segment Internal External
EUR million revenue revenue(1) revenue(2) revenue revenue(1) revenue(2) revenue revenue(1) revenue(2)
Europe & International
Uncoated Fine Paper 749 (8) 741 734 (13) 721 1,429 (20) 1,409
Corrugated 680 (20) 660 704 (34) 670 1,384 (64) 1,320
Bags & Coatings 1,149 (22) 1,127 1,319 (27) 1,292 2,478 (46) 2,432
Intra-segment
elimination (50) 50 - (73) 73 - (129) 129 -
Total Europe &
International 2,528 - 2,528 2,684 (1) 2,683 5,162 (1) 5,161
South Africa Division 287 (57) 230 269 (90) 179 569 (155) 414
Newsprint businesses 83 (1) 82 80 - 80 164 - 164
Segments total 2,898 (58) 2,840 3,033 (91) 2,942 5,895 (156) 5,739
Inter-segment elimination (58) 58 - (91) 91 - (156) 156 -
Group total 2,840 - 2,840 2,942 - 2,942 5,739 - 5,739
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
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Products
Corrugated products 697 686 1,369
Uncoated fine paper 687 684 1,337
Kraft paper & industrial bags 630 716 1,350
Coatings & consumer packaging 414 479 881
Pulp 140 125 263
Newsprint 130 123 251
Woodchips 28 25 60
Merchant 21 14 41
Other1 93 90 187
Group total 2,840 2,942 5,739
Note:
1 Revenues derived from product types that are not individually material are classified as other.
External revenue by location of customer
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Revenue
Africa
South Africa1 197 129 303
Rest of Africa 122 137 268
Africa total 319 266 571
Western Europe
Germany 383 420 810
United Kingdom1 138 145 278
Rest of western Europe 731 821 1,529
Western Europe total 1,252 1,386 2,617
Emerging Europe 569 584 1,144
Russia 291 281 556
North America 124 130 243
South America 21 15 30
Asia and Australia 264 280 578
Group total 2,840 2,942 5,739
Note:
1 These revenues, which total EUR335 million (six months ended 30 June 2011: EUR274 million; year ended 31 December 2011: EUR581 million), are
attributable to the countries in which the Group's parent entities are domiciled.
External revenue by location of production
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Revenue
Africa
South Africa1 323 281 617
Rest of Africa 5 4 10
Africa total 328 285 627
Western Europe
Austria 526 593 1,110
United Kingdom1 75 67 147
Rest of western Europe 520 572 1,090
Western Europe total 1,121 1,232 2,347
Emerging Europe
Poland 382 406 794
Rest of emerging Europe 544 568 1,075
Emerging Europe total 926 974 1,869
Russia 359 355 703
North America 89 81 159
Asia and Australia 17 15 34
Group total 2,840 2,942 5,739
Note:
1 These revenues, which total EUR398 million (six months ended 30 June 2011: EUR348 million; year ended 31 December 2011: EUR764 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) from continuing operations before special items
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Europe & International
Uncoated Fine Paper 100 118 205
Corrugated 65 105 178
Bags & Coatings 96 128 228
Total Europe & International 261 351 611
South Africa Division 29 27 62
Newsprint businesses (3) (5) (18)
Corporate & other businesses (18) (19) (33)
Segments total 269 354 622
Special items (see note 6) 6 4 (55)
Net income from associates 1 2 1
Net finance costs (53) (60) (111)
Group profit from continuing operations before tax 223 300 457
Earnings before interest, tax, depreciation and amortisation (EBITDA)
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Europe & International
Uncoated Fine Paper 154 169 309
Corrugated 100 142 251
Bags & Coatings 145 179 327
Total Europe & International 399 490 887
South Africa Division 55 54 114
Newsprint businesses - 1 (5)
Corporate & other businesses (18) (19) (32)
Group and segments total from continuing operations 436 526 964
Operating margin1
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
% 2012 2011 2011
Europe & International
Uncoated Fine Paper 13.4 16.1 14.3
Corrugated 9.6 14.9 12.9
Bags & Coatings 8.3 9.7 9.2
South Africa Division 10.1 10.0 10.9
Newsprint businesses (3.6) (6.3) (11.0)
Group 9.5 12.0 10.8
Note:
1
Operating margin is underlying operating profit divided by revenue.
Return on capital employed (ROCE)1
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
% 2012 2011 2011
Europe & International
Uncoated Fine Paper 15.7 16.9 16.7
Corrugated 14.1 20.1 18.5
Bags & Coatings 16.5 17.4 19.0
South Africa Division 9.5 9.7 8.9
Newsprint businesses (20.6) (9.2) (19.2)
Group 13.3 15.2 15.0
Note:
1 Return on capital employed (ROCE) is trailing 12 month underlying operating profit, including share of associates' net income, divided by trailing
12 month average trading capital employed and for segments has been extracted from management reports. Capital employed is adjusted for
impairments in the year and spend on strategic projects which are not yet in production.
Operating segment assets
(Reviewed) (Reviewed) (Audited)
As at 30 June 2012 As at 30 June 2011 As at 31 December 2011
Net Net
Segment Net segment Segment segment Segment segment
EUR million assets(1) assets assets(1) assets assets1 assets
Europe & International
Uncoated Fine Paper 1,469 1,270 1,553 1,360 1,473 1,283
Corrugated 1,300 1,087 1,286 1,058 1,215 967
Bags & Coatings 1,727 1,347 1,839 1,398 1,640 1,279
Intra-segment elimination (59) - (56) - (87) -
Total Europe & International 4,437 3,704 4,622 3,816 4,241 3,529
South Africa Division 978 840 1,015 877 964 828
Newsprint businesses 95 66 130 100 94 59
Corporate & other businesses 8 9 10 10 6 3
Inter-segment elimination (32) - (52) - (40) -
Segments total 5,486 4,619 5,725 4,803 5,265 4,419
Unallocated:
Discontinued operation - - 495 247 - -
Investments in associates 12 12 12 12 10 10
Deferred tax assets/(liabilities) 5 (312) 11 (315) 5 (305)
Other non-operating assets/(liabilities)(2) 137 (271) 150 (312) 140 (291)
Group trading capital employed 5,640 4,048 6,393 4,435 5,420 3,833
Financial asset investments 40 40 31 31 33 33
Net debt 60 (1,273) 33 (1,200) 192 (831)
Group assets 5,740 2,815 6,457 3,266 5,645 3,035
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) Capital expenditure cash payments(2)
(Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31 Six months Six months Year ended 31
ended 30 ended 30 June December ended 30 ended 30 June December
EUR million June 2012 2011 2011 June 2012 2011 2011
Europe & International
Uncoated Fine Paper 21 21 51 24 33 61
Corrugated 115 19 43 22 18 44
Bags & Coatings 47 53 120 47 43 110
Total Europe & International 183 93 214 93 94 215
South Africa Division 42 34 66 15 13 27
Newsprint businesses 3 4 7 1 2 4
Segments total 228 131 287 109 109 246
Unallocated:
Discontinued operation - 18 18 - 17 17
Group total 228 149 305 109 126 263
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
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Combined and consolidated income statement
From continuing operations
Write-downs of inventories to net realisable value (9) (9) (15)
Aggregate reversal of previous write-downs of inventories 3 4 4
6 Special items
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Operating special items
Asset impairments - - (48)
Restructuring and closure costs
Restructuring and closure costs excluding related personnel costs - (1) (5)
Personnel costs relating to restructuring - - (4)
Reversal of restructuring and closure costs excluding related personnel costs - 2 3
Total operating special items - 1 (54)
Non-operating special items
Profit/(loss) on disposals 6 3 (1)
Total non-operating special items 6 3 (1)
Total special items from continuing operations before tax and non-controlling
interests 6 4 (55)
Tax (2) - 2
Non-controlling interests - - -
Total special items attributable to equity holders of the parent companies 4 4 (53)
Special items from continuing operations before tax and non-controlling interests by operating
segment
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Europe & International
Uncoated Fine Paper - 2 2
Corrugated - 3 3
Bags & Coatings - (1) (27)
Total Europe & International - 4 (22)
South Africa Division 5 - -
Newsprint businesses 1 - (33)
Group and segments total from continuing operations 6 4 (55)
Non-operating special items
A gain of EUR6 million was realised on the sale of land in South Africa Division and Mondi Shanduka Newsprint
as part of their ongoing settlement of land claims. The settlements were reached using the sale and leaseback
framework developed by Mondi and the South African Government which ensures that title to the land is
transferred to the claimant, that Mondi is paid a fair price for the land and secures a continued fibre supply for
its mills.
7 Finance costs
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
From continuing operations
Total interest expense (56) (74) (141)
Less: interest capitalised - 1 -
Total finance costs from continuing operations (56) (73) (141)
8 Tax charge
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
From continuing operations
UK corporation tax at 24.5% (2011: 26.5%) - - 1
SA corporation tax at 28% (2011: 28%) 11 4 7
Overseas tax 38 51 84
Current tax (including tax on special items from continuing operations) 49 55 92
Deferred tax (4) 4 8
Total tax charge from continuing operations 45 59 100
The Group's estimated effective annual rate of tax from continuing operations before special items for the six
months ended 30 June 2012, calculated on profit from continuing operations before tax before special items
and including net income from associates, is 20% (six months ended 30 June 2011: 20%; year ended 31
December 2011: 20%). The Group continues to benefit from tax incentives granted in certain countries in
which the Group operates, most 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).
Subsequent to the demerger, a consolidation of the Mondi Limited ordinary shares owned by Mondi Limited
shareholders, the effect of which was to reduce their proportionate interest in the Mondi Group, was
undertaken in order to compensate Mondi plc shareholders for the value distributed to Mondi Limited
shareholders in terms of the demerger.
The result of the Mondi Limited share consolidation was that the number of Mondi Limited shares in issue
reduced from 147 million to 118 million and the total number of Mondi shares in issue reduced from 514
million to 486 million.
Prior to the demerger, Mpact paid interest of EUR13 million for the six months ended 30 June 2011 (year ended
31 December 2011: EUR13 million) to Mondi Limited in respect of intercompany financing provided, which
eliminated on consolidation and thus was not taken into consideration in the tables below.
The results of the discontinued operation were:
(Reviewed) (Audited)
Six months Year ended 31
ended 30 June December
EUR million 2011 2011
Revenue 296 296
Expenses (283) (282)
Profit before tax 13 14
Related tax charge - -
Profit after tax from discontinued operation 13 14
Gain on distribution of discontinued operation - 29
Related tax charge - -
Net gain on distribution of discontinued operation - 29
Total profit attributable to discontinued operation 13 43
Attributable to:
Non-controlling interests - -
Equity holders of the parent companies 13 43
Earnings per share from the discontinued operation were (see note 10):
(Reviewed) (Audited)
Six months Year ended 31
ended 30 June December
EUR cents per share 2011 2011
Profit from discontinued operation for the financial period/year attributable to equity holders
of the parent companies
Basic EPS 2.6 8.6
Diluted EPS 2.5 8.5
Details of the disposal group and assets held for sale of the discontinued operation as at 30 June 2011 were:
Six months
ended 30 June
Non-current assets
Current assets 273
222
Total assets classified as held for sale 495
Current liabilities
Non-current liabilities (115)
(133)
Total liabilities directly associated with assets classified as held for sale (248)
Net assets 247
Details of the discontinued operation disposed were:
(Audited)
Year ended 31
December
EUR million 2011
Net assets disposed 181
Cumulative translation adjustment reserve realised
Non-controlling interests disposed (5)
(6)
Net carrying value of discontinued operation distributed 170
Dividend in specie distributed to Mondi Limited shareholders 205
Net carrying value of discontinued operation distributed (170)
Fair value gain on discontinued operation distributed 35
Transaction costs (6)
Net fair value gain on discontinued operation distributed 29
10 Earnings per share
(a) From continuing operations
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR cents per share June 2012 2011 2011
Profit from continuing operations for the financial period/year attributable to
equity holders of the parent companies
Basic EPS 31.7 39.0 57.5
Diluted EPS 31.6 38.5 56.8
Underlying earnings for the financial period/year1
Basic EPS 30.9 38.2 68.1
Diluted EPS 30.8 37.7 67.3
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
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Profit for the financial period/year attributable to equity holders of the parent
companies 153 212 330
Profit from discontinued operation (see note 9) - (13) (14)
Net gain on distribution of discontinued operation (see note 9) - - (29)
Related tax (see note 9) - - -
Related non-controlling interests (see note 9) - - -
Profit from continuing operations for the financial period/year attributable to
equity holders of the parent companies 153 199 287
Special items (see note 6) (6) (4) 55
Related tax (see note 6) 2 - (2)
Related non-controlling interests (see note 6) - - -
Underlying earnings for the financial period/year1 149 195 340
Note:
1 Underlying earnings excludes the impact of special items.
As described in note 9, Mondi Limited's ordinary shares were subject to a share consolidation which was
recognised from 1 August 2011, the date on which the new Mondi Limited ordinary shares commenced
trading on the JSE.
IFRS requires that the number of shares subject to the consolidation be adjusted from the effective date of the
consolidation, hence for the periods under review the effect of the share consolidation was included from 1
August 2011.
Number of shares
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
million 2012 2011 2011
Basic number of ordinary shares outstanding1 483 510 499
Effect of dilutive potential ordinary shares2 1 7 6
Diluted number of ordinary shares outstanding 484 517 505
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, and includes the impact of the share
consolidation in 2011.
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 31
ended 30 ended 30 June December
EUR cents per share June 2012 2011 2011
Profit for the financial period/year attributable to equity holders of the parent
companies
Basic EPS 31.7 41.6 66.1
Diluted EPS 31.6 41.0 65.3
Headline earnings for the financial period/year1
Basic EPS 30.9 39.4 69.9
Diluted EPS 30.8 38.9 69.1
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
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Profit for the financial period/year attributable to equity holders of the parent
companies 153 212 330
Net gain on distribution of discontinued operation (see note 9) - - (29)
Special items (6) (4) 55
Special items: restructuring and closure costs - 1 (6)
Profit on disposal of tangible and intangible assets - (6) -
Impairments not included in special items - - 1
Related tax 2 (2) (2)
Related non-controlling interests - - -
Headline earnings for the financial period/year 149 201 349
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.
The presentation of such an alternative, non-IFRS measure of earnings per share is classified by the JSE
Limited as pro-forma financial information. Refer to pages 34 to 39 of the printed half-yearly report for the pro-forma
financial information and independent reporting accountants' report thereon.
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
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Underlying earnings for the financial period/year1 149 195 340
Tax saving by Mondi Limited on intercompany interest received from Mpact2 - 4 4
Saving of interest paid on net debt at 8.6% per annum - 3 3
Tax at 28% on saving of interest paid - (1) (1)
Adjusted earnings for the financial period/year 149 201 346
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
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
million 2012 2011 2011
Basic number of ordinary shares outstanding 483 510 499
Adjustment for Mondi Limited share consolidation1 - (28) (17)
Adjusted basic number of ordinary shares outstanding2 483 482 482
Effect of dilutive potential ordinary shares3 1 6 6
Diluted number of ordinary shares outstanding after Mondi Limited share
consolidation 484 488 488
Notes:
1 The actual number of shares subject to consolidation was 29 million. The adjustment reflects the impact on the number of shares as if the share
consolidation had occurred with effect from 1 January 2011 and takes treasury shares into consideration. The adjustment reflects the period up
to the date of the share consolidation as the share consolidation is included in the basic number of ordinary shares outstanding from 1 August
2011.
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.
11 Alternative measure of earnings per share (continued)
Based on the adjusted earnings and weighted average number of shares, the alternative, non-IFRS earnings
per share figures for continuing operations would be:
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR cents per share June 2012 2011 2011
Earnings per share alternative measure for the financial period/year
Basic EPS alternative measure 30.9 41.7 71.8
Diluted EPS alternative measure 30.8 41.2 70.9
12 Dividends
The interim dividend for the year ending 31 December 2012 of 8.9 euro cents per ordinary share will be paid
on 18 September 2012 to those shareholders on the register of Mondi plc on 24 August 2012. An equivalent
South African rand interim dividend will be paid on 18 September 2012 to shareholders on the register of
Mondi Limited on 24 August 2012. 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 2011.
The interim dividend for the year ending 31 December 2012 will be paid in accordance with the following
timetable:
Mondi Limited Mondi plc
Last date to trade shares cum-dividend
JSE Limited 17 August 2012 17 August 2012
London Stock Exchange Not applicable 21 August 2012
Shares commence trading ex-dividend
JSE Limited 20 August 2012 20 August 2012
London Stock Exchange Not applicable 22 August 2012
Record date
JSE Limited 24 August 2012 24 August 2012
London Stock Exchange Not applicable 24 August 2012
Last date for receipt of Dividend Reinvestment Plan
(DRIP) elections by Central Securities Depository
Participants 30 August 2012 30 August 2012
Last date for DRIP elections to UK Registrar and South
African Transfer Secretaries by shareholders of Mondi
Limited and Mondi plc 31 August 2012 23 August 2012*
Payment Date
South African Register 18 September 2012 18 September 2012
UK Register Not applicable 18 September 2012
DRIP purchase settlement dates 27 September 2012 21 September 2012**
Currency conversion dates
ZAR/euro 7 August 2012 7 August 2012
Euro/sterling Not applicable 31 August 2012
* 31 August 2012 for Mondi plc South African branch register shareholders
** 27 September 2012 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 20 August 2012 and 26 August 2012, both dates inclusive, nor may transfers between
the UK and South African registers of Mondi plc take place between 15 August 2012 and 26 August 2012,
both dates inclusive.
Information relating to the dividend tax to be withheld from Mondi Limited shareholders and Mondi plc
shareholders on the South African branch register will be announced separately, together with the ZAR/euro
exchange rate to be applied, on or shortly after 7 August 2012.
13 Retirement benefits
In November 2011 the trustees of the defined benefit pension plan in South Africa, with agreement from the
participating pensioners and employees, resolved to initiate a process to wind up the fund subject to
regulatory approval. Regulatory approval was received in January 2012 and accordingly, Mondi Limited
recognised a settlement charge of EUR2 million in the condensed combined and consolidated income statement.
Mondi Limited expects to receive a reimbursement of the pension surplus of EUR6 million once the fund is wound
up, subject to any potential claims.
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 2012. The net
retirement benefit obligation increased by EUR17 million mainly due to changes in assumptions, an exchange
rate impact of EUR2 million and the above mentioned settlement charge of EUR2 million. The assets backing the
defined benefit scheme liabilities reflect their market values as at 30 June 2012. Any movements in the
assumptions have been recognised as an actuarial movement in the condensed combined and consolidated
statement of comprehensive income.
14 Non-controlling interests bought out
On 18 April 2012, Mondi concluded an all cash public tender offer for the share in Mondi Swiecie S.A. that it
did not already own, increasing its shareholding to 93.2% from 66%. On 18 May 2012, Mondi acquired the
remaining shares it did not already own. The total consideration paid by Mondi was EUR296 million including
transaction costs of approximately EUR1 million which were expensed. The acquisition is reflected in the
condensed combined and consolidated statement of changes in equity as a transaction between shareholders
with the premium over the carrying value of the non-controlling interests being reflected as a reduction in
retained earnings.
15 Business combinations
On 2 May 2012, following completion of a number of suspensive conditions, including a ruling from the
Arbitration Court of the National Chamber of Commerce in Poland, Mondi Swiecie S.A. acquired the entire
share capital of Saturn Management Sp. Z o.o. from Polish Energy Partners S.A. for a net cash consideration
of EUR31 million and the assumption of debt of EUR57 million. Transaction costs of approximately EUR1 million were
expensed. Saturn Energy is the owner of the power and heat generating plant that provides Mondi Swiecie
S.A. with most of its electricity requirements and all of its heat and steam needs.
The fair value accounting reflected in these results is provisional in nature. If necessary, adjustments will be
made to these fair values, and to the goodwill on acquisition, within 12 months of the acquisition date.
The acquired business has contributed underlying operating profit of EUR2 million. Had the acquisition occurred
on 1 January 2012, the acquired business would have contributed underlying operating profit of EUR9 million.
Details of the aggregate net assets acquired, as adjusted from book to fair value, are:
EUR million Book value Revaluation Fair value
Net assets acquired:
Property, plant and equipment 70 25 95
Trade and other receivables 3 - 3
Cash and cash equivalents 2 - 2
Trade and other payables (6) - (6)
Short-term borrowings (11) - (11)
Medium and long-term borrowings (48) - (48)
Deferred tax liabilities - (8) (8)
Net assets acquired 10 17 27
Goodwill arising on acquisition 4
Total cost of acquisition 31
Cash acquired net of overdrafts (2)
Purchase price adjustment receivable 5
Net cash paid 34
16 Disposal groups and assets held for sale
There were no major disposal groups or assets held for sale as at 30 June 2012.
17 Consolidated cash flow analysis
(a) Reconciliation of profit from continuing operations before tax to cash generated from operations
(Reviewed) (Reviewed) (Audited)
Six months Six months Year ended 31
ended 30 ended 30 June December
EUR million June 2012 2011 2011
Profit from continuing operations before tax 223 300 457
Depreciation and amortisation 167 172 342
Share-based payments 6 5 10
Non-cash effect of special items (4) (13) 36
Net finance costs 53 60 111
Net income from associates (1) (2) (1)
Decrease in provisions and post-employment benefits (7) (15) (25)
Increase in inventories (19) (104) (55)
Increase in operating receivables (86) (134) (32)
Increase in operating payables 3 95 19
Fair value gains on forestry assets (13) (23) (49)
Felling costs 32 34 65
Profit on disposal of tangible and intangible assets - (6) -
Other adjustments (1) 2 5
Cash generated from continuing operations 353 371 883
Cash generated from discontinued operation - 32 34
Cash generated from operations 353 403 917
(b) Cash and cash equivalents
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
EUR million 2012 2011 2011
Cash and cash equivalents per condensed combined and consolidated statement of
financial position 60 33 191
Bank overdrafts included in short-term borrowings (see note 17c) (125) (126) (74)
Net cash and cash equivalents per condensed combined and consolidated
statement of cash flows (65) (93) 117
(c) Movement in net debt
The Group's net debt position, excluding disposal groups, is:
Cash and Debt due Debt due Current
cash within one after one financial asset Total net
EUR million equivalents(1) year(2) year investments debt
At 1 January 2011 24 (351) (1,037) - (1,364)
Cash flow (97) - 112 - 15
Business combinations - (4) (1) - (5)
Movement in unamortised loan costs - - (3) - (3)
Effect 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)
Cash flow 181 135 (108) 1 209
Disposal of businesses - 30 12 - 42
Movement in unamortised loan costs - - (3) - (3)
Effect of discontinued operation 23 - 76 - 99
Reclassification - (25) 25 - -
Currency movements 6 7 9 - 22
At 31 December 2011 117 (212) (737) 1 (831)
Cash flow (181) 52 (240) (1) (370)
Business combinations - (11) (48) - (59)
Movement in unamortised loan costs - - (3) - (3)
Reclassification - (19) 19 - -
Currency movements (1) (4) (5) - (10)
At 30 June 2012 (65) (194) (1,014) - (1,273)
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 2012, short-term borrowings on the condensed combined
and consolidated statement of financial position of EUR315 million (as at 30 June 2011: EUR485 million; as at 31 December 2011: EUR286 million)
include EUR125 million of overdrafts (as at 30 June 2011: EUR126 million; as at 31 December 2011: EUR74 million).
The following table shows the amounts available to draw down on the Group's committed loan facilities:
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
EUR million 2012 2011 2011
Expiry date
In one year or less 26 39 38
In more than one year 558 742 851
Total credit available 584 781 889
18 Capital commitments
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
EUR million 2012 2011 2011
Contracted for but not provided 178 122 140
Approved, not yet contracted for 230 182 372
These capital commitments relate to the following categories of non-current non-financial assets:
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
EUR million 2012 2011 2011
Intangible assets 11 5 13
Property, plant and equipment 397 299 499
Total capital commitments 408 304 512
The expected maturity of these capital commitments is:
(Reviewed) (Reviewed) (Audited)
As at 31
As at 30 June As at 30 June December
EUR million 2012 2011 2011
Within one year 270 237 339
One to two years 122 58 141
Two to five years 16 9 32
Total capital commitments 408 304 512
Capital commitments are based on capital projects approved to date and the budget approved by the Boards.
Major capital projects still require further approval before they commence. These capital commitments will be
financed by existing cash resources and borrowing facilities.
Capital commitments related to joint venture entities are immaterial.
19 Contingent liabilities and contingent assets
Contingent liabilities comprise aggregate amounts as at 30 June 2012 of EUR13 million (as at 30 June 2011:
EUR19 million; as at 31 December 2011: EUR17 million) in respect of loans and guarantees given to banks and
other third parties. No acquired contingent liabilities have been recorded in the Group's condensed combined
and consolidated statement of financial position for all periods presented.
There are a number of legal and tax claims against the Group. Provision is made for all liabilities that are
expected to materialise.
There were no contingent assets for all periods presented.
Contingent assets and liabilities related to joint venture entities are immaterial.
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.
Other than the transactions described in notes 13 and 14, there have been no significant changes to the
related parties as disclosed in note 39 of the Group's annual financial statements for the year ended 31
December 2011.
Dividends received from associates for the six months ended 30 June 2012 amount to EURnil (six months ended
30 June 2011: EURnil; year ended 31 December 2011: EUR2 million).
21 Events occurring after 30 June 2012
On 11 July 2012, Mondi announced that it had agreed to acquire 93.4% of the outstanding share capital of
Nordenia International AG for a total cash consideration of 240 million, subject to customary completion
conditions including the approval of certain competition authorities. On 23 July 2012, agreement was reached
to acquire a further 0.5% interest on the same completion conditions. The acquisition is expected to be
completed in the fourth quarter of 2012.
The directors declared an interim dividend of 8.9 euro cents per share as set out in note 12.
Pro-forma financial information
The directors have in the past presented underlying earnings per share in accordance with IAS 33.73 as they
believe it provides a useful measure for shareholders to understand the underlying financial performance of
the Group. Underlying earnings represents the earnings of the Group, from continuing operations, excluding
special items. Special items are those non-recurring financial items which the Group believes should be
separately disclosed on the face of the combined and consolidated income statement to assist in
understanding the underlying financial performance of the Group. IAS 33 requires that the number of shares
subject to the Mondi Limited share consolidation be adjusted from the effective date of the consolidation. This
results in a mismatch between the underlying earnings, which excludes the discontinued operation for the full
year, and the weighted average number of shares, which only reflects the adjusted number of shares from the
date of the share consolidation.
The directors have therefore elected to present an alternative, non-IFRS measure of underlying earnings per
share from continuing operations for the prior year comparative periods in order to provide shareholders with a
comparison of the continuing operations of the Group as if the demerger of Mpact and related Mondi Limited
share consolidation had occurred at the beginning of each financial 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.
The presentation of such an alternative, non-IFRS measure of earnings per share is classified by the JSE
Limited (JSE) as pro-forma financial information and must comply with section 8 of the JSE Listings
Requirements. The unaudited pro-forma financial information below has been prepared for illustrative
purposes to provide information on how the alternative measure of earnings per share adjustments would
have impacted on the financial results of the Group. Because of its nature, the unaudited pro-forma financial
information does not reflect the Group's actual results of operations which are set out in the combined and
consolidated financial statements.
The unaudited pro-forma results set out below only reflect an adjustment to the combined and consolidated
income statement as no adjustments were made to the combined and consolidated statement of financial
position. The combined and consolidated statement of comprehensive income is not presented as the pro-
forma information relates only to the earnings per share measures, determined from the combined and
consolidated income statement. The directors do not propose to present any pro-forma measures other than
those relating to underlying earnings per share and therefore have not presented the effect of the pro-forma
adjustments to headline earnings per share or earnings per share measures from continuing and discontinued
operations.
The underlying information used in the preparation of the pro-forma financial information has been prepared
using the accounting policies set out in note 1 of the audited combined and consolidated financial statements
for the year ended 31 December 2011 without adjustment.
The directors of the Group are responsible for the compilation, contents and preparation of the unaudited pro-
forma financial information set out below. Their responsibility includes determining that: the unaudited pro-
forma financial information has been properly compiled on the basis stated; the basis is consistent with the
accounting policies of the Group; and the pro-forma adjustments are appropriate for the purposes of the
unaudited pro-forma financial information disclosed in terms of the JSE Listings Requirements.
The unaudited pro-forma financial information should be read in conjunction with the Deloitte & Touche
independent reporting accountants' report thereon.
Pro-forma combined and consolidated income statement
Six months ended 30 June 2011 Year ended 31 December 2011
Reviewed Adjust- Pro-forma Audited Adjust- Pro-forma
EUR million (A) ments (unaudited) (A) ments (unaudited)
Continuing operations
Group revenue 2,942 - 2,942 5,739 - 5,739
Materials, energy and consumables used (1,528) - (1,528) (2,998) - (2,998)
Variable selling expenses (257) - (257) (511) - (511)
Gross margin 1,157 - 1,157 2,230 - 2,230
Maintenance and other indirect expenses (133) - (133) (272) - (272)
Personnel costs (excluding special items) (417) - (417) (808) - (808)
Other net operating expenses (excluding special
items) (81) - (81) (186) - (186)
Depreciation and amortisation (172) - (172) (342) - (342)
Underlying operating profit 354 - 354 622 - 622
Special items (note B) 4 - 4 (55) - (55)
Net income from associates 2 - 2 1 - 1
Total profit from operations and associates 360 - 360 568 - 568
Net finance costs (60) 3 (57) (111) 3 (108)
Investment income 15 - 15 30 - 30
Foreign currency losses (2) - (2) - - -
Finance costs (note B) (73) 3 (70) (141) 3 (138)
Profit before tax 300 3 303 457 3 460
Tax (charge)/credit (note B) (59) 3 (56) (100) 3 (97)
Profit from continuing operations 241 6 247 357 6 363
Profit from discontinued operations 13 - 13 43 - 43
Profit for the financial period/year 254 6 260 400 6 406
Attributable to:
Non-controlling interests 42 - 42 70 - 70
Equity holders of the parent companies 212 6 218 330 6 336
Earnings per share (EPS) for profit
attributable to equity holders of the parent
companies
From continuing operations (note D)
Basic underlying EPS (EUR cents) 38.2 41.7 68.1 71.8
Diluted underlying EPS (EUR cents) 37.7 41.2 67.3 70.9
Notes to the pro-forma combined and consolidated income statement
A. The Group financial information has been extracted, without adjustment, from the Group's reviewed
combined and consolidated financial statements for the six months ended 30 June 2011 and the Group's
audited combined and consolidated financial statements for the year ended 31 December 2011.
B. The adjustments to the combined and consolidated financial statements to reflect the unaudited pro-forma
earnings are set out below:
Earnings
Six months Year ended 31
ended 30 June December
EUR million 2011 2011
Profit for the period/year attributable to equity holders of the parent companies 212 330
Discontinued operation (13) (43)
Effect of special items (refer note 10a of the financial statements) (4) 55
Tax and non-controlling interests in respect of special items (refer note 10a of the financial
statements) - (2)
Underlying earnings attributable to equity holders of the parent companies (refer note 10a of
the financial statements)1 195 340
Pro-forma adjustments
Saving of interest paid on net debt at 8.6% per annum2 3 3
Tax at 28% on saving of interest paid (1) (1)
Tax saving by Mondi Limited on intercompany interest received from Mpact3 4 4
Adjusted pro-forma underlying earnings for the financial period/year 201 346
Notes:
1 Underlying earnings excludes the impact of special items as described in note 6 of the condensed combined and consolidated financial
statements.
2 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 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.
3 Had the recapitalisation of Mpact occurred at the beginning of each financial 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.
C. The revised weighted average number of shares is determined as follows:
Number of shares
Six months Year ended 31
ended 30 June December
million 2011 2011
Basic number of ordinary shares outstanding 510 499
Adjustment for Mondi Limited share consolidation1 (28) (17)
Adjusted basic number of ordinary shares outstanding2 482 482
Effect of dilutive potential ordinary shares3 6 6
Diluted number of ordinary shares outstanding after Mondi Limited share consolidation 488 488
Notes:
1 The actual number of shares subject to consolidation was 29 million. The adjustment reflects the impact on the number of shares as if the share
consolidation had occurred with effect from 1 January 2011 and takes treasury shares into consideration. The adjustment reflects the period up
to the date of the share consolidation as the share consolidation is included in the basic number of ordinary shares outstanding from 1 August
2011 as set out in note 10a of the condensed combined and consolidated financial statements.
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.
D. Based on the adjusted earnings and weighted average number of shares, the alternative, non-IFRS
underlying earnings per share figures for continuing operations would be:
Six months Year ended 31
ended 30 June December
EUR cents per share 2011 2011
Underlying earnings per share alternative measure for the financial period/year
Basic EPS alternative measure 41.7 71.8
Diluted EPS alternative measure 41.2 70.9
The directors do not propose to present any pro-forma measures other than those relating to underlying
earnings per share and therefore have not presented the effect of the pro-forma adjustments to headline
earnings per share or earnings per share measures from continuing and discontinued operations.
Independent reporting accountants' assurance report on the pro-forma
financial information of the Mondi dual listed structure (Mondi Group)
We have performed our limited assurance engagement in respect of the pro-forma financial information set
out on pages 34 to 37 of the printed half-yearly condensed combined and consolidated financial statements for the six months
ended 30 June 2012 dated 6 August 2012 issued in connection with presentation of the alternative, non-IFRS
measure of earnings per share from continuing operations in the condensed combined and consolidated
financial statements of Mondi Group for the six months ended 30 June 2011 and the year ended 31 December
2011. The presentation of this alternative, non-IFRS measure is disclosed to provide shareholders with a
comparison of the continuing operations of the Group as if the demerger of Mpact Limited and related share
consolidation in Mondi Limited had occurred at the beginning of each financial period presented. The
demerger of Mpact Limited and the share consolidation was finalised in August 2011. The pro-forma financial
information has been prepared in accordance with the requirements of the JSE Limited (JSE) Listings
Requirements, for illustrative purposes only, to provide information about how the alternative, non-IFRS
measure might affect the reported financial information presented.
Directors' responsibility
The directors are responsible for the compilation, contents and presentation of the pro-forma financial
information contained in the condensed combined consolidated financial statements. Their responsibility
includes determining that: the pro-forma financial information has been properly compiled on the basis stated;
the basis is consistent with the accounting policies of the Mondi Group and the pro-forma adjustments are
appropriate for the purposes of the pro-forma financial information disclosed in terms of the JSE Listings
Requirements.
Reporting accountants' responsibility
Our responsibility is to express our limited assurance conclusion on the pro-forma financial information
included in the condensed combined consolidated financial statements of the Mondi Group. We conducted our
assurance engagement in accordance with the International Standard on Assurance Engagements applicable
to Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the Guide
on Pro Forma Financial Information issued by SAICA.
This standard requires us to obtain sufficient appropriate evidence on which to base our conclusion.
We do not accept any responsibility for any reports previously given by us on any financial information used in
the compilation of the pro-forma financial information beyond that owed to those to whom those reports were
addressed by us at the dates of their issue.
Sources of information and work performed
Our procedures consisted primarily of comparing the unadjusted financial information with the source
documents, considering the pro-forma adjustments in light of the accounting policies of the Mondi Group, the
issuer, considering the evidence supporting the pro-forma adjustments and discussing the adjusted pro-forma
financial information with the directors of the Group in respect of the alternative, non-IFRS measure presented
in the condensed combined and consolidated results that is a result of the demerger of Mpact completed in
August 2011.
In arriving at our conclusion, we have relied upon financial information prepared by the directors of the Mondi
Group and other information from various public, financial and industry sources.
While our work performed has involved an analysis of the historical published audited financial information
and other information provided to us, our assurance engagement does not constitute an audit or review of any
of the underlying financial information conducted in accordance with International Standards on Auditing or
International Standards on Review Engagements and accordingly, we do not express an audit or review
opinion.
In a limited assurance engagement, the evidence-gathering procedures are more limited than for a reasonable
assurance engagement and therefore less assurance is obtained than in a reasonable assurance
engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our
conclusion.
Independent reporting accountants' assurance report on the pro-forma
financial information of the Mondi dual listed structure (Mondi Group)
(continued)
Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention, which causes us to
believe that, in terms of the section 8.17 and 8.30 of the JSE Listings Requirements:
· the pro-forma financial information has not been properly compiled on the basis stated,
· such basis is inconsistent with the accounting policies of the issuer, and
· the adjustments are not appropriate for the purposes of the pro-forma financial information as
disclosed.
Consent
We consent to the inclusion of this report, which will form part of the SENS announcement and the condensed
combined and consolidated financial statements, to be issued on or about 6 August 2012, in the form and
context in which it will appear.
Deloitte & Touche
Registered Auditor
Per Bronwyn Kilpatrick
Partner
Sandton
6 August 2012
Deloitte & Touche
Registered Auditors
Buildings 1 and 2, Deloitte Place, The Woodlands
Woodlands Drive, Woodmead, Sandton
Republic of South Africa
National Executive: LL Bam Chief Executive AE Swiegers Chief Operating Officer GM Pinnock Audit DL
Kennedy Risk Advisory NB Kader Tax L Geeringh Consulting & Clients & Industries JK Mazzocco Talent &
Transformation CR Beukman Finance M Jordan Strategy S Gwala Special Projects TJ Brown Chairman of
the Board MJ Comber Deputy Chairman of the Board.
A full list of partners and directors is available on request.
B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code
Member of Deloitte Touche Tohmatsu Limited
Revised operating segments subsequent to acquisition of Nordenia
International AG
Operating segment revenues
Six months ended 30 June 2012 Six months ended 30 June 2011
Segment Internal External Segment Internal External
EUR million revenue revenue(1) revenue(2) revenue revenue1 revenue2
Europe & International
Packaging Paper 960 (249) 711 1,063 (260) 803
Fibre Packaging 946 (19) 927 973 (18) 955
Consumer Packaging 150 (1) 149 207 (3) 204
Uncoated Fine Paper 749 (8) 741 734 (13) 721
Intra-segment elimination (277) 277 - (293) 293 -
Total Europe & International 2,528 - 2,528 2,684 (1) 2,683
South Africa Division 287 (57) 230 269 (90) 179
Newsprint businesses 83 (1) 82 80 - 80
Segments total 2,898 (58) 2,840 3,033 (91) 2,942
Inter-segment elimination (58) 58 - (91) 91 -
Group total 2,840 - 2,840 2,942 - 2,942
Year ended 31 December 2011 Year ended 31 December 2010
Segment Internal External Segment Internal External
EUR million revenue revenue(1) revenue(2) revenue revenue(1) revenue(2)
Europe & International
Packaging Paper 2,006 (469) 1,537 1,747 (423) 1,324
Fibre Packaging 1,881 (33) 1,848 1,728 (30) 1,698
Consumer Packaging 372 (5) 367 348 (7) 341
Uncoated Fine Paper 1,429 (20) 1,409 1,516 (129) 1,387
Intra-segment elimination (526) 526 - (487) 487 -
Total Europe & International 5,162 (1) 5,161 4,852 (102) 4,750
South Africa Division 569 (155) 414 580 (211) 369
Newsprint businesses 164 - 164 492 (1) 491
Segments total 5,895 (156) 5,739 5,924 (314) 5,610
Inter-segment elimination (156) 156 - (314) 314 -
Group total 5,739 - 5,739 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
Six months Six months Year ended 31 Year ended 31
ended 30 ended 30 June December December
EUR million June 2012 2011 2011 2010
Products
Fibre packaging products 909 937 1,810 1,657
Packaging paper 689 748 1,438 1,202
Uncoated fine paper 687 684 1,337 1,351
Consumer packaging products 149 204 367 341
Pulp 140 125 263 247
Newsprint 130 123 251 221
Other1 136 121 273 591
Group total 2,840 2,942 5,739 5,610
Note:
1 Revenues derived from product types that are not individually material are classified as other.
Operating profit/(loss) from continuing operations before special items
Six months Six months Year ended 31 Year ended 31
ended 30 ended 30 June December December
EUR million June 2012 2011 2011 2010
Europe & International
Packaging Paper 104 173 295 178
Fibre Packaging 47 46 86 52
Consumer Packaging 10 14 25 22
Uncoated Fine Paper 100 118 205 179
Total Europe & International 261 351 611 431
South Africa Division 29 27 62 64
Newsprint businesses (3) (5) (18) (4)
Corporate & other businesses (18) (19) (33) (33)
Segments total 269 354 622 458
Special items (see note 6) 6 4 (55) (21)
Net income from associates 1 2 1 2
Net finance costs (53) (60) (111) (106)
Group profit from continuing operations before tax 223 300 457 333
Significant components of operating profit from continuing operations before special items
The DLC executive committee uses EBITDA as a measure of cash flow, coupled with the depreciation and
amortisation charge, for making decisions about, amongst others, allocation of funds for capital investment.
EBITDA
Six months Six months Year ended 31 Year ended 31
ended 30 ended 30 June December December
EUR million June 2012 2011 2011 2010
Europe & International
Packaging Paper 150 224 392 270
Fibre Packaging 80 77 149 120
Consumer Packaging 15 20 37 35
Uncoated Fine Paper 154 169 309 279
Total Europe & International 399 490 887 704
South Africa Division 55 54 114 117
Newsprint businesses - 1 (5) 10
Corporate & other businesses (18) (19) (32) (33)
Group and segments total from continuing operations 436 526 964 798
Green energy sales and
Depreciation and amortisation Operating lease charges disposal of emissions credits
Year ended 31 Year ended 31 Year ended 31 Year ended 31 Year ended 31 Year ended 31
December December December December December December
EUR million 2011 2010 2011 2010 2011 2010
Europe & International
Packaging Paper 97 92 32 25 79 74
Fibre Packaging 63 68 9 9 - -
Consumer Packaging 12 13 1 2 - -
Uncoated Fine Paper 104 100 7 8 5 6
Total Europe & International 276 273 49 44 84 80
South Africa Division 52 53 5 5 - -
Newsprint businesses 13 14 1 6 - -
Corporate & other businesses 1 - 1 2 - -
Group and segments total from
continuing operations 342 340 56 57 84 80
Operating margin1
As at 31 As at 31
As at 30 June As at 30 June December December
% 2012 2011 2011 2010
Europe & International
Packaging Paper 10.8 16.3 14.7 10.2
Fibre Packaging 5.0 4.7 4.6 3.0
Consumer Packaging 6.7 6.8 6.7 6.3
Uncoated Fine Paper 13.4 16.1 14.3 11.8
South Africa Division 10.1 10.0 10.9 11.0
Newsprint businesses (3.6) (6.3) (11.0) (0.8)
Group 9.5 12.0 10.8 8.2
Note:
1
Operating margin is underlying operating profit divided by revenue.
Return on capital employed (ROCE)1
As at 31 As at 31
As at 30 June As at 30 June December December
% 2012 2011 2011 2010
Europe & International
Packaging Paper 18.5 25.8 24.4 17.0
Fibre Packaging 10.9 8.5 11.0 7.5
Consumer Packaging 14.6 14.4 15.0 13.5
Uncoated Fine Paper 15.7 16.9 16.7 16.9
South Africa Division 9.5 9.7 8.9 8.4
Newsprint businesses (20.6) (9.2) (19.2) (2.8)
Group 13.3 15.2 15.0 12.3
Note:
1 Return on capital employed (ROCE) is trailing 12 month underlying operating profit, including share of associates' net income, divided by trailing
12 month average trading capital employed and for segments has been extracted from management reports. Capital employed is adjusted for
impairments in the year and spend on the strategic projects which are not yet in production.
Operating segment assets
As at 30 June 2012 As at 30 June 2011
Net
Segment Net segment Segment segment
EUR million assets(1) assets assets(1) assets
Europe & International
Packaging Paper 1,709 1,373 1,718 1,337
Fibre Packaging 1,207 916 1,244 928
Consumer Packaging 189 145 248 191
Uncoated Fine Paper 1,469 1,270 1,553 1,360
Intra-segment elimination (137) - (141) -
Total Europe & International 4,437 3,704 4,622 3,816
South Africa Division 978 840 1,015 877
Newsprint businesses 95 66 130 100
Corporate & other businesses 8 9 10 10
Inter-segment elimination (32) - (52) -
Segments total 5,486 4,619 5,725 4,803
Unallocated:
Discontinued operation - - 495 247
Investments in associates 12 12 12 12
Deferred tax assets/(liabilities) 5 (312) 11 (315)
Other non-operating assets/(liabilities)(2) 137 (271) 150 (312)
Group trading capital employed 5,640 4,048 6,393 4,435
Financial asset investments 40 40 31 31
Net debt 60 (1,273) 33 (1,200)
Group assets 5,740 2,815 6,457 3,266
As at 31 December 2011 As at 31 December 2010
Net Net
Segment segment Segment segment
EUR million assets(1) assets assets(1) assets
Europe & International
Packaging Paper 1,593 1,249 1,526 1,208
Fibre Packaging 1,131 866 1,139 840
Consumer Packaging 175 131 239 183
Uncoated Fine Paper 1,473 1,283 1,672 1,512
Intra-segment elimination (131) - (116) -
Total Europe & International 4,241 3,529 4,460 3,743
South Africa Division 964 828 1,091 953
Newsprint businesses 94 59 141 106
Corporate & other businesses 6 3 10 7
Inter-segment elimination (40) - (63) -
Segments total 5,265 4,419 5,639 4,809
Unallocated:
Discontinued operation - - 507 393
Investments in associates 10 10 16 16
Deferred tax assets/(liabilities) 5 (305) 21 (328)
Other non-operating assets/(liabilities)2 140 (291) 193 (336)
Group trading capital employed 5,420 3,833 6,376 4,554
Financial asset investments 33 33 34 34
Net debt 192 (831) 83 (1,364)
Group assets 5,645 3,035 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- Capital expenditure cash
financial assets(1) payments(2)
Six months Six months Six months Six months
ended 30 ended 30 June ended 30 ended 30 June
EUR million June 2012 2011 June 2012 2011
Europe & International
Packaging Paper 125 22 34 20
Fibre Packaging 29 43 28 34
Consumer Packaging 8 7 7 7
Uncoated Fine Paper 21 21 24 33
Total Europe & International 183 93 93 94
South Africa Division 42 34 15 13
Newsprint businesses 3 4 1 2
Segments total 228 131 109 109
Unallocated:
Discontinued operation - 18 - 17
Group total 228 149 109 126
Additions to non-current non- Capital expenditure cash
financial assets(1) payments(2)
Year ended 31 Year ended 31 Year ended 3 1 Year ended 31
December December December December
EUR million 2011 2010 2011 2010
Europe & International
Packaging Paper 66 94 67 109
Fibre Packaging 82 77 72 59
Consumer Packaging 15 10 15 11
Uncoated Fine Paper 51 138 61 151
Total Europe & International 214 319 215 330
South Africa Division 66 71 27 28
Newsprint businesses 7 10 4 7
Corporate & other businesses - - - 1
Segments total 287 400 246 366
Unallocated:
Discontinued operation 18 28 17 28
Group total 305 428 263 394
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.
Production statistics
Six months Six months Year ended 31
ended 30 ended 30 June December
June 2012 2011 2011
Europe & International
Containerboard Tonnes 1,042,937 991,970 2,009,984
Kraft paper Tonnes 489,279 535,238 955,741
Softwood pulp Tonnes 992,772 1,011,757 1,954,284
Internal consumption Tonnes 907,194 934,588 1,799,577
External Tonnes 85,578 77,169 154,707
Corrugated board and boxes Mm² 606 609 1,213
Industrial bags M units 2,005 2,050 3,958
Coating and release liners Mm² 1,758 1,797 3,357
Consumer packaging Mm² 376 373 702
Uncoated fine paper Tonnes 715,575 712,886 1,400,991
Newsprint Tonnes 98,936 97,931 199,337
Hardwood pulp Tonnes 527,310 527,889 1,033,226
Internal consumption Tonnes 483,642 496,518 975,121
External Tonnes 43,668 31,371 58,105
South Africa Division
Containerboard Tonnes 132,251 126,516 257,680
Uncoated fine paper Tonnes 129,337 114,686 233,837
Hardwood pulp Tonnes 330,963 282,284 637,205
Internal consumption Tonnes 169,584 153,402 316,388
External Tonnes 161,379 128,882 320,817
Softwood pulp Tonnes 51,859 58,646 115,606
Woodchips Bone dry
tonnes 68,632 101,454 206,150
Newsprint Joint Ventures (attributable share)
Aylesford Tonnes 96,509 95,955 188,536
Mondi Shanduka Newsprint (MSN) Tonnes 58,770 61,548 124,914
Exchange rates
Six months Six months Year ended 31
ended 30 ended 30 June December
June 2012 2011 2011
Closing rates against the euro
South African rand 10.37 9.86 10.48
Pounds sterling 0.81 0.90 0.84
Czech koruna 25.64 24.34 25.79
Polish zloty 4.25 3.99 4.46
Russian rouble 41.37 40.40 41.77
Turkish lira 2.28 2.35 2.44
US dollar 1.26 1.45 1.29
Average rates for the period against the euro
South African rand 10.29 9.69 10.10
Pounds sterling 0.82 0.87 0.87
Czech koruna 25.16 24.35 24.59
Polish zloty 4.24 3.95 4.12
Russian rouble 39.69 40.14 40.88
Turkish lira 2.34 2.21 2.34
US dollar 1.30 1.40 1.39
Date: 07/08/2012 08:00:00 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.