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Mondi Limited - Full year results for the year ended 31 December 2012

Release Date: 21/02/2013 09:00
Code(s): MND MNP     PDF:  
Wrap Text
Full year results for the year ended 31 December 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 

21 February 2013
 
As part of the dual listed company structure, Mondi Limited and Mondi plc (together 'Mondi Group') notify both 
the JSE Limited and the London Stock Exchange of matters required to be disclosed under the Listings 
Requirements of the JSE and/or the Disclosure and Transparency and Listing Rules of the United Kingdom 
Listing Authority. 

Full year results for the year ended 31 December 2012

Financial highlights
-   Strong profitability despite challenging start to the year
-   Supported by excellent operating performance and cost management
-   ROCE of 13.7%, in excess of the Group's through-the-cycle target of 13%
-   Strong cash generation from operations of EUR845 million
-   Total dividend for the year of 28.0 euro cents per share, up 8%

Strategic highlights
-   Significant progress with strategic initiatives
        - EUR1.2 billion spent on acquisitions increasing exposure to higher growth packaging segments
        - Disposal of interest in non-core Aylesford Newsprint
        - Capital employed in packaging businesses now 67% of Group total (57% at end of 2011)
-   Integration of acquisitions on track
-   Cost synergies from recent acquisitions now estimated at EUR30 million per annum, up 33%

Financial Summary


                                                      Year ended   Year ended              Six months  Six months
                                                              31           31                ended 31    ended 31
                                                        December     December                December    December
EUR million, except for percentages and per          
 share measures                                            2012         2011   Change %         2012        2011    Change %
From continuing operations  
Group revenue                                             5,807        5,739          1        2,967       2,797           6
Underlying EBITDA(1)                                        923          964         (4)         487         438          11
Underlying operating profit(1)                              568          622         (9)         299         268          12
Underlying profit before tax(1)                             462          512        (10)         245         216          13
Operating profit                                            541          568         (5)         272         213          28
Profit before tax                                           371          457        (19)         148         157          (6)
Per share measures 
Basic earnings per share - alternative measure(2) 
 (EUR cents)                                               69.6         71.8         (3)
Basic earnings per share from continuing operations 
 (EUR cents)                                               50.5         57.5        (12)
Total dividend per share (EUR cents)                       28.0         26.0          8
Free cash flow per share(3) (EUR cents)                    51.3         78.8        (35)
Cash generated from operations                              845          917         (8)
Net debt                                                  1,864          831
Group return on capital employed (ROCE)(4)                13.7%        15.0%

Notes:

1 The Group presents underlying EBITDA, operating profit, profit before tax and related per share information as measures which exclude special
  items in order to provide a more effective comparison of the underlying financial performance of the Group between financial reporting periods.
2 The directors have elected to continue to present an alternative, non-IFRS measure of earnings per share from continuing operations. As more
  fully set out in note 8 of the condensed financial statements, the effects of the demerger of Mpact Limited 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 underlying earnings per share from continuing
  operations, based on the consolidated number of shares. In 2012, there is no difference between the alternative measure presented and
  underlying earnings per share.
3 Free cash flow per share is the net increase in cash and cash equivalents before the effects of acquisitions and disposals of businesses,
  changes in net debt and dividends paid divided by the net number of shares in issue at year end.
4 ROCE is underlying profit expressed as a percentage of the average capital employed for the year, adjusted for impairments and spend on
  strategic projects which are not yet in operation.

David Hathorn, Mondi Group chief executive, said:

'Mondi delivered a solid financial performance in what remains an uncertain economic environment.
While the early part of the year was particularly challenging, trading picked up as the year progressed,
culminating in a strong final quarter.

Continued strong profitability resulted in a return on capital employed (ROCE) of 13.7%, once again
above our through-the-cycle target of 13%. Net debt finished the year at EUR1,864 million, largely due
to the EUR1.2 billion of strategic acquisitions in higher growth packaging segments completed during
the year. Our continued strong cash generation and underlying earnings per share of 69.6 euro cents
per share has resulted in the directors recommending a final dividend of 19.1 euro cents per share,
bringing the total dividend to 28.0 euro cents per share for the year, an increase of 8%.

Our focus in the near term is on the integration and optimisation of the recent acquisitions and
successful delivery of the significant capital investment projects we have initiated over the course of
the past year. I am very pleased to see the progress we have already made in integrating our recent
acquisitions, exemplified by the fact we have revised upwards by 33% our estimate of expected
synergies to EUR30 million per annum within two years.

Fundamentals for our core segments remain sound, although recently announced capacity additions
by various manufacturers in selected paper grades are a concern, exacerbated by the prevailing
demand softness as Europe remains affected by the macroeconomic slowdown. However, with the
strong finish to the year, coupled with the expected contribution from the recent acquisitions, we
remain confident of making progress in the year ahead.'

Contact details
Mondi Group
David Hathorn                                                 +27 11 994 5418
Andrew King                                                   +27 11 994 5415
Lora Rossler                                                  +27 11 994 5400 / +27 83 627 0292

FTI Consulting
Richard Mountain / Sophie McMillan                            +44 20 7269 7186 / +44 20 7909 684 466
Sandra Sowray / Lerato Matsaneng                              +27 11 214 2422 / +27 11 214 2407

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 09:00 (UK) and 11:00
(SA).

The conference call dial-in numbers are:
South Africa             0800 200 648 (toll-free)
UK Primary               0808 162 4061 (toll-free)
UK Alternative           0800 917 7042 (toll-free)
Europe & Other           00800 246 78 700 (toll-free)

An online audio cast facility will be available via: www.mondigroup.com/FYResults12.

The presentation will be available online via the above website address 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 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 21
February 2013.

Editors' notes
Mondi is an international packaging and paper Group, with production operations across 30 countries and
revenues of EUR5.8 billion in 2012. The Group's key operations are located in central Europe, Russia and
South Africa and as at the end of 2012, Mondi employed 25,700 people.

Mondi Group is fully integrated across the packaging and paper value chain, from the growing of wood and
the production of pulp and paper (packaging paper and uncoated fine paper), to the conversion of packaging
paper into corrugated packaging, industrial bags, extrusion coatings and release liner. Mondi is also a supplier
of innovative consumer packaging solutions, advanced films and hygiene products components.

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 Carbon Disclosure Project's (CDP)
Carbon Disclosure Leadership Index for the third year and in CDP's Carbon Performance Leadership Index
(CPLI) for the first time in 2012.

Forward-looking statements
This document includes forward-looking statements. All statements other than statements of historical facts
included herein, including, without limitation, those regarding Mondi's financial position, business strategy,
plans and objectives of management for future operations, are forward-looking statements. Such forward-
looking statements involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of Mondi, or industry results, to be materially different from any
future results, performance or achievements expressed or implied by such forward-looking statements. Such
forward-looking statements are based on numerous assumptions regarding Mondi's present and future
business strategies and the environment in which Mondi will operate in the future. Among the important
factors that could cause Mondi's actual results, performance or achievements to differ materially from those in
the forward-looking statements include, but are not limited to, those discussed under 'Principal risks and
uncertainties'. 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.

Overview

Financial review
While the first quarter was particularly difficult, characterised by a continuation of the weak order books seen
towards the end of 2011, trading picked up as the year progressed. Sales volumes recovered into the second
quarter and this, in turn, saw some price recovery in certain of the Group's major grades going into the second
half of the year. The third quarter was impacted by the traditional European summer slowdown in trading, but
a strong finish to the year, with good volumes and reasonable price levels in Europe, meant the Group was
able to deliver full year underlying operating profit of EUR568 million, 9% down on the very strong prior year
result.

Fundamentals for each of the Group's core businesses remain good, although recently announced capacity
additions in segments that remain in oversupply are a concern. While the uncoated fine paper business
remains in structural decline in the mature western European region, prices have remained stable due to
continued supply side contraction in the face of poor profitability among the more marginal players. Such
rationalisation will need to continue in order to ensure market stability. On the packaging side, fundamentals
for growth in the medium term remain firmly in place with only the kraft paper/industrial bags value chain in
western Europe suffering some secular demand decline, offset by strong export markets.

The Group continued to be strongly cash generative with cash generated from operations of EUR845 million.
Working capital levels were maintained within the Group's targeted level of 10-12% as a percentage of
turnover, closing the year (based on the annualised sales of Nordenia) at 11.8%. During the year, capital
expenditure amounted to EUR298 million.

Net debt at 31 December 2012 was EUR1,864 million, an increase of EUR1,033 million from 31 December
2011. The increase is attributable to the EUR1.2 billion of strategic acquisitions completed during the year
(further detailed below). The acquisitions were financed by the proceeds from an 8-year 3.375% EUR500
million Eurobond and from existing borrowing facilities. Excluding the effects of acquisitions, net debt reduced
by EUR180 million.

At the underlying earnings per share level, results were down only 3% on the comparable prior year figure,
supported by lower interest charges and a reduction in the non-controlling interest charge, primarily due to the
acquisition of the remaining minority interest in Mondi Swiecie in the first half of the year. This strong
performance bears testament not only to the strength of our strategic positioning, but also the unrelenting
focus on cost management and strong operating performance achieved across the Group.

The Group is proposing to pay a final dividend of 19.1 euro cents per share, bringing the total dividend for the
year to 28.0 euro cents per share, an increase of 8% on 2011.

Progress on strategy
During the year good progress was made in the ongoing process of shifting Mondi's portfolio to higher growth
products. This included EUR1.2 billion of acquisitions in the growing corrugated packaging and consumer
packaging value chains and the disposal of the 50% interest in Aylesford Newsprint, which operates in the
structurally challenged newsprint sector.

Key acquisitions included:
   - Packaging Paper
            -  the acquisition of the remaining minority interest in Mondi Swiecie;
            -  Mondi Swiecie acquired a combined heat and power generating plant, providing the bulk of its
               electricity requirements and all of its heat and steam needs;
   - Consumer Packaging
            -  the acquisition of a 99.93% interest in Nordenia; and
   - Fibre Packaging
            -  the acquisition of Duropack's two corrugated packaging plants in Germany and the Czech
               Republic.

Over the past year, the share of the Group's capital employed in the packaging businesses, with typically
higher structural growth rates than the graphic paper grades, has increased from 57% to 67%.

Following the completion of the Nordenia acquisition and disposal of Aylesford Newsprint, the Group
management and reporting structures were reorganised. The Europe & International Division has been
restructured into four business units, divided into upstream and downstream activities with a clear separation
between packaging and uncoated fine paper: Packaging Paper, Fibre Packaging, Consumer Packaging and
Uncoated Fine Paper. The remaining Newsprint business, Mondi Shanduka Newsprint, has been
incorporated into the South Africa Division. Europe & International contributed EUR538 million to underlying
operating profit and the South Africa Division EUR68 million. Corporate costs remained at similar levels to the
previous year.

Europe & International - Packaging Paper
                                       Year ended   Year ended              Six months  Six months
                                               31           31                ended 31    ended 31
                                         December     December                December    December
EUR million                                  2012         2011   Change %         2012        2011    Change %

Segment revenue                             1,896        2,006         (5)         936         943          (1)
 - of which inter-segment revenue             469          469                     220         209
Underlying EBITDA                             321          392        (18)         171         168           2
Underlying operating profit                   227          295        (23)         123         122           1
Special items                                   -          (11)                      -         (11)
Capital expenditure                            89           67                      55          47
Net segment assets                          1,466        1,249
ROCE                                        17.9%        24.4%

Packaging Paper delivered another good financial performance despite the more challenging trading
environment, with a ROCE of 17.9% and underlying operating profit of EUR227 million.

The early part of the year was characterised by weak demand, with market related downtime continuing from
the end of 2011 into the first quarter of 2012. Demand improved during the first half, enabling the business to
implement price increases in the virgin containerboard and kraft paper grades, which became effective during
the second half of the year. Sales volumes of containerboard were similar to those of the previous year whilst
volumes of kraft paper increased as a result of stronger export markets.

Whilst industry wide demand for the various containerboard grades was marginally lower than the previous
year, with growth in the emerging central European countries only partly offsetting the decline in the more
mature western markets, Mondi increased its volumes by 3% during the year. European markets for sack
kraft paper remained weak with demand below prior year levels. The sack kraft business, however, continued
to benefit from strong export growth, particularly in Asia and Africa.

In 2012, virgin containerboard pricing was weaker on average than in 2011. Average benchmark kraftliner
prices were 6% lower. However, supply side contraction coupled with reduced imports from the US resulted
in an improved supply/demand balance with price increases being realised in stages throughout the second
half of 2012. Average benchmark prices in the second half of 2012 for kraftliner were 7% higher than in the
first half. European virgin containerboard markets remain firm in early 2013.

Surplus capacity in recycled containerboard continued to influence pricing and average benchmark prices
were 10% lower than in 2011. After recovering through the end of the first quarter and into the second quarter
from the January 2012 lows, pricing weakened in the second half on lower input costs. Average benchmark
prices in the second half of 2012 were 4% lower than in the first half. Recent capacity closures coupled with a
stable demand environment have firmed up the recycled containerboard market. As yet, there has been little
impact from the start-up of new capacity in Poland. A price increase of EUR60/tonne was announced in
January 2013.

Sack kraft paper prices were on average 2-4% lower than in 2011 despite price increases having been
implemented in the third quarter, reflected in average prices in the second half being around 2% higher than
the first half. European price levels have weakened marginally in early 2013, while pricing in export markets
remains stable.

Packaging Paper benefited from lower input costs particularly in the second half of the year with lower wood
costs in central Europe, and recycled paper costs being on average 16% lower than in 2011. The acquisition
by Mondi Swiecie of the power and heat generating plant benefited the business with lower costs and
increased green energy credits, although the lower average selling prices achieved for green energy credits
did provide some offset.

The business also benefited significantly from profit improvement initiatives, which, along with improved
productivity, enabled the business to continue to realise good returns on invested capital.

The containerboard business is expected to benefit from synergies from the acquisition of the Duropack
corrugated packaging plants in Germany and the Czech Republic, completed in November 2012, primarily
through reduced transportation costs (refer to Europe & International - Fibre Packaging for more detail).

Europe & International - Fibre Packaging
                                           Year ended   Year ended              Six months  Six months
                                                   31           31                ended 31    ended 31
                                             December     December                December    December
EUR million                                      2012         2011   Change %         2012        2011   Change %

Segment revenue                                 1,860        1,881         (1)         914         908          1
 - of which inter-segment revenue                  42           33                      23          15
Underlying EBITDA                                 168          149         13           88          72         22
Underlying operating profit                       101           86         17           54          40         35
Special items                                     (16)          (8)                    (16)        (10)
Capital expenditure                                76           72                      48          38
Net segment assets                                958          866
ROCE                                            12.5%        11.0%

Fibre Packaging realised a 17% increase in underlying operating profit to EUR101 million in 2012. The
improvement reflects the benefits of ongoing profit improvement initiatives and lower input costs. The ROCE
of 12.5%, whilst still below our 13% target, reflects a pleasing improvement on 2011 levels.

The corrugated packaging business benefited from generally stable pricing and volumes coupled with lower
paper input costs. Market demand for corrugated packaging products was broadly unchanged in the mature
central European markets whilst pleasing growth continued to be seen in emerging Europe. Average selling
prices in emerging Europe were higher than in 2011 which offset in part the declines experienced in the more
mature markets.

In line with the Group's strategy to strengthen its leading market position in corrugated packaging in central
and eastern Europe, Mondi acquired two corrugated box plants in Germany and the Czech Republic
consuming 130,000 tonnes of containerboard per annum, and a 105,000 tonne recycled containerboard mill in
the Czech Republic from Duropack GmbH on 5 November 2012. On 19 November 2012, Mondi announced
its intention to close the recycled containerboard mill. The acquisition of the packaging plants is expected to
provide the Group with improved access to these regional markets and generate logistics synergies from their
proximity to the Swiecie containerboard mill in Poland. Cost synergies are estimated at approximately EUR10
million per annum, up around one-third from the original estimate at the time of acquisition. After taking into
account the restructuring and closure costs of the containerboard mill of EUR3 million, the contribution to
underlying operating profit in 2012 from this acquisition was a loss of EUR2 million.

Industrial bags benefited from lower paper input costs and productivity and cost improvement initiatives, which
more than offset lower sales volumes and lower average selling prices. Growth in the CIS, Middle East,
North Africa and Asia regions was positive whilst the western European markets continued to be weak,
particularly in the south. This has necessitated restructuring in Belgium, Spain and France with restructuring
provisions and an asset impairment charge amounting to EUR21 million being recognised in special items.

The coatings business benefited from lower input costs for both paper and resin as well as from stringent cost
management measures and productivity improvements. These gains were offset in part by weaker demand,
particularly from the automotive and building industries, and consequently lower selling prices. The new
facility in the US continues to ramp up its activities, particularly in respect of product qualification in higher
value markets.

Europe & International - Consumer Packaging
                                                          Year ended   Year ended               Six months   Six months
                                                                  31           31                 ended 31     ended 31
                                                            December     December                 December     December
EUR million                                                     2012         2011    Change %         2012         2011    Change %

Segment revenue                                                 502           372          35          352          165         113
 - of which inter-segment revenue                                 4             5                        3            2
Underlying EBITDA                                                45            37          22           30           17          76
Underlying operating profit                                      19            25         (24)           9           11         (18)
Special items                                                   (11)           (5)                      (7)          (5)
Capital expenditure                                              28            15                       21            8
Net segment assets                                              872           131
ROCE                                                           6.2%         15.0%

Adjusted for non-recurring items in 2012 and the effect
of the disposal of Unterland in 2011
Adjusted underlying EBITDA                                       54            30          80
Adjusted underlying operating profit                             33            20          65
Adjusted ROCE                                                 10.8%         16.9%

The growth in consumer packaging reflects a significant step in the Group's strategic development in higher
growth markets. Mondi acquired a 99.93% interest in Nordenia International AG with effect from 1 October
2012.

Nordenia, as an international supplier of innovative consumer packaging solutions and hygiene components,
enables the Group to develop a leading consumer packaging business, building on existing deep, long-term
customer relationships. Nordenia enjoys a strong competitive advantage through its proprietary technology,
global presence and a proven track record of innovation and growth.

Stripping out the effects of one-off costs and depreciation and amortisation charges largely related to the
acquisition accounting of EUR18 million detailed below, the ex-Nordenia business delivered underlying
operating profit of EUR19 million in the fourth quarter, in line with expectations at the time of the acquisition.

On acquisition, the Group recognised the net assets of Nordenia at their fair market value (the details of which
are set out in note 12 of the condensed financial statements) resulting in a higher depreciation and
amortisation charge than recognised in the stand-alone Nordenia business. In the three months to 31
December 2012, this charge amounted to EUR4 million. The increase in depreciation and amortisation from 2013 
will be approximately EUR13 million per year.

In the fourth quarter a number of one-off costs, amounting to EUR14 million were recognised. These costs
mainly related to the acquisition accounting for the Nordenia transaction and include the effect of the
recognition of short-term assets at their fair value which were subsequently recognised as an expense in the
income statement.

Comparability with the prior year is further complicated by the sale of Unterland in October 2011 which
contributed EUR7 million of EBITDA and EUR5 million of underlying operating profit up to the date of disposal.

In addition to the full year contribution from Nordenia in 2013, synergies amounting to approximately EUR20
million per annum are expected to be realised by the end of 2014, with approximately half the benefit already
expected in 2013. This synergy target exceeds the original estimates at the time of the acquisition of EUR15
million per annum, largely due to increased confidence in the delivery of a number of cost reduction initiatives.

Consumer Packaging has a strong product pipeline in development. The business expects its plant in
Taicang, China to commence operations towards the end of 2013 with full capacity being reached by 2015.

Europe & International - Uncoated Fine Paper

                                           Year ended     Year ended              Six months  Six months
                                                   31             31                ended 31    ended 31
                                             December       December                December    December
EUR million                                      2012           2011   Change %         2012        2011    Change %
Segment revenue                                 1,466          1,429          3          717         695           3
 - of which inter-segment revenue                  13             20                       5           7
Underlying EBITDA                                 300            309         (3)         146         140           4
Underlying operating profit                       191            205         (7)          91          87           5
Special items                                       -              2                       -           -
Capital expenditure                                58             61                      34          28
Net segment assets                              1,248          1,283
ROCE                                            16.7%          16.7%

Uncoated Fine Paper again delivered a strong operating performance with underlying operating profit of
EUR191 million and a ROCE of 16.7%.

Whilst western European markets remained soft, impacted by both short-term cyclical and longer-term
structural challenges, demand growth in eastern Europe (excluding the CIS region) was marginally positive.
Market demand in Russia was down on a very strong 2011. In aggregate, Mondi's sales volumes for uncoated
fine paper were on a similar level to that of the previous year.

In Europe, selling prices were stable throughout the year with average benchmark European uncoated fine
paper prices declining by 1% in the year, while marginal price increases were achieved in the Russian market.

Russia entered the World Trade Organisation in August 2012 and, as a consequence, import duties for
uncoated fine paper will reduce by 2.5% per year until they reach a level of 5% in 2016. Implementation is due
to start in 2013. The reduction in trade duties, coupled with new capacity coming on stream in both Russia
and France, is expected to place some pressure on pricing in the short to medium term.

The business benefited from lower input costs, driven by lower pulp costs for the unintegrated Neusiedler
operation, partially offset by higher wood costs in Russia and generally higher energy costs. Fixed costs were
higher, largely due to a higher depreciation charge offset by ongoing cost optimisation initiatives.

South Africa Division
                                                                                        
                                   Year ended   Year ended              Six months   Six months              
                                           31           31                ended 31     ended 31              
                                     December     December                December     December              
EUR million                              2012         2011   Change %         2012         2011   Change %   
Segment revenue                           653          645          1          330          339         (3)   
 - of which inter-segment revenue         109          155                      52           64              
Underlying EBITDA                         123          117          5           68           62         10   
Underlying operating profit                68           63          8           40           36         11   
Special items                               6            -                       -            -              
Capital expenditure                        46           29                      30           14              
Net segment assets                        811          860                                                   
ROCE                                     9.9%         8.7%                                                   

South Africa Division delivered an improved result with underlying operating profit increasing by 8% to EUR68
million and ROCE to 9.9%. Whilst still below the Group's target rate, it is pleasing to note the continued
improvement in this business from the lows of 2009.

Sales volumes increased across all grades, largely on the back of increasing domestic demand.

Domestic selling price increases for uncoated fine paper and newsprint were implemented early in 2012 and
prices remained at those levels throughout the year. Both pulp and white-top kraftliner sales prices decreased
on the back of lower average international benchmark US dollar selling prices. Lower average selling prices
were offset in large part by gains from the weaker rand versus the US dollar and euro.

Above inflation wage and energy price increases were mitigated through ongoing cost management and
efficiency improvement initiatives such that overall cost increases were kept below prevailing inflation rates.

Good progress is being made in land claims with a further eight claims having been settled during the year.

Financial review

Special items
Special items for the year, giving rise to a net charge of EUR91 million before tax, include the following:
   - Loss of EUR70 million on disposal of Aylesford Newsprint;
   - Transaction costs of EUR11 million attributable to the Nordenia acquisition;
   - Restructuring activities and asset impairment in Fibre Packaging amounting to EUR21 million;
   - Profit of EUR6 million on sale of land in South Africa Division; and
   - A EUR5 million gain on settlement of an insurance claim.

Further detail is provided in note 4 of the condensed financial statements.

Input costs
Wood, recovered fibre and pulp comprise approximately one third of the input costs of the Group.

Wood costs decreased on average for both hardwood and softwood (1% and 5% respectively) versus the
prior year. On average benchmark European recovered paper prices in 2012 were around 16% lower than in
2011 with an increase in the early part of the year followed by a significant drop off in the second half of the
year. Current recovered paper prices are at their lowest levels since March 2010.

Average benchmark euro denominated pulp prices were 8% lower for softwood pulp and largely unchanged
for hardwood pulp versus 2011. Softwood pulp prices continued to decline over the course of the year whilst
average hardwood pulp prices were 6% higher in the second half of 2012 than the first half.

Energy cost increases for the year were significant, with oil increasing by 7%, gas by 12% and coal and power
by 17% on average. This highlights the importance of the Group's efforts to increase both energy efficiency
and energy self-sufficiency.

Mondi's well established and relentless pursuit of cost saving initiatives bore significant benefits across the
value chain. These initiatives enabled the Group to realise significant savings on input costs and fixed cost
increases were kept well within inflation.

Currencies
The weaker rand and a stronger Polish zloty and US dollar against the euro provided a net positive impact to
the Group. Positive translational and transaction gains were realised in Packaging Paper, Fibre Packaging
and the South Africa Division. Exchange rate volatility was more muted during the year with most currencies
trading within a relatively narrow range against the euro.

Tax
The effective tax rate before special items was 20% - consistent with that of 2011. The low tax rate continues
to be a result of profitability in regions with lower statutory tax rates and the benefits of tax incentives granted
in certain countries in which the Group operates, notably those related to the major Polish and Russian
projects.

Non-controlling interests
Earnings attributable to holders of non-controlling interests declined significantly from EUR70 million in the
prior year to EUR35 million, primarily as a result of the acquisition of the non-controlling interest in Mondi
Swiecie in the second quarter of 2012.

Cash flow
Despite the challenging economic environment, EBITDA from continuing operations of EUR923 million was
only 4% lower than in 2011. The strong cash generation reflects the contribution in the fourth quarter from the
acquisition of Nordenia and the successful profit improvement and cost management initiatives throughout the
Group.

Mondi generated EUR845 million in cash from operations (2011: EUR917 million) after taking into account a
net increase in working capital of EUR80 million. The increase in working capital includes the settlement of a
number of short-term obligations recognised as part of the acquisition of Nordenia as well as the cancellation
of the factoring arrangements that were in place prior to the acquisition.

The strong cash flow generation, supplemented by additional borrowings raised during the year, were applied
to fund the Group's capital expenditure of EUR298 million, its strategic acquisitions and distributions to
shareholders.

Capital expenditure
Capital expenditure of EUR298 million was EUR35 million higher than the prior year. The capital expenditure
to depreciation ratio was 86% including expenditure on a number of the Group's strategic energy projects.

Mondi's approved energy related investments totalling approximately EUR140 million announced in early
2012 included a bark boiler at Syktyvkar in Russia, a steam turbine and recovery boiler economiser at
Stambolijski, Bulgaria, a new recovery boiler at Frantschach, Austria and a new steam turbine at the Richards
Bay mill in South Africa. The benefits of these investments, mainly in the form of reduced energy costs,
improved efficiencies and energy self-sufficiency are expected to be realised from the end of 2013 as these
projects reach completion. In addition, the decision has recently been taken to commence the EUR30 million
pulp dryer project in Syktyvkar. The project was initially announced in early 2012 but put on hold pending
clarification of various technical parameters, which have since been resolved.

As announced early in 2012 various additional energy related projects, amounting to approximately EUR250
million, were under consideration. In this regard, the Boards have since approved a further EUR128 million
strategic energy investment at the 51% held Ruzomberok mill. Further options remain under evaluation.

The Ruzomberok investment, including a new recovery boiler at the mill, will increase pulp production, reduce
the mill's environmental footprint and improve the overall cost position. The project will also include
improvements in chemical recovery and green energy and heat production during the pulp production
process. Some of the project benefits also result from avoiding otherwise essential stay-in-business capital
expenditure. The project is expected to be completed in the fourth quarter of 2014, delivering an after-tax
internal rate of return in excess of 40%.

The Boards also approved a EUR70 million project in the Steti kraft paper mill which will enable the mill to
integrate the remaining open market pulp production on site by producing additional volumes of bleached kraft
paper and will provide growth opportunities for the kraft business. The project is expected to be completed in
the latter part of 2014 delivering an after tax internal rate of return of around 20%.

Including the announced strategic projects, capital expenditure is expected to be approximately 125% of the
Group's depreciation charge on average over the next two years.

Treasury and borrowings
Net debt at the end of the year was EUR1,864 million, a EUR1,033 million increase from the prior year end.
Gearing increased to 39.3% at the end of 2012, up from 21.5% at the end of 2011, and the net debt to 12
month trailing EBITDA ratio was 2.0, well within the Group's key financial covenant requirements.

Finance charges of EUR107 million were similar to the previous year (EUR111 million) due to a lower effective
average interest rate offset by the increased net debt. The majority of the increase in the Group's net debt
occurred in the last quarter of the year as a consequence of the acquisitions of Nordenia and the corrugated
packaging plants of Duropack in Germany and the Czech Republic. The debt assumed in the Nordenia
acquisition included a high yield bond, which was recognised on acquisition at its fair market value, with the
premium over book value amortised over the remaining term of the bond. As a consequence, the effective
interest rate recognised in the financial statements approximates the Group's average borrowing rate, well
below the 9.75% coupon applicable to that bond.

Mondi's public credit ratings, first issued in March 2010, were reaffirmed during the year at BBB - from
Standard and Poor's and Baa3 from Moody's Investors Service.

The Group actively manages its liquidity risk by ensuring it maintains diversified sources of funding and debt
maturities. During the year the Euro Medium Term Note (EMTN) programme under which the EUR500
million, seven year bond was issued in March 2010 was renewed. In September 2012 Mondi successfully
launched an eight year, 3.375% fixed coupon, EUR500 million bond maturing in 2020 under the same
programme.

At the end of the year the Group's committed debt facilities amounted to EUR2.6 billion with EUR762 million
undrawn, which provides significant liquidity to meet Mondi's short and medium-term funding requirements.
Drawn committed facilities maturing in 2013 amount to EUR191 million.

The weighted average maturity of the Eurobonds and committed debt facilities increased to 4.8 years as at 31
December 2012 compared to 4.3 years a year earlier.

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. In addition, the DLC audit committee
reviews each of the principal risks in detail over the course of the year. Additional risk reviews are undertaken
on an ad-hoc basis for significant investment decisions and when changing business conditions dictate.

The Boards' risk management framework addresses all significant strategic, sustainability, financial,
operational and compliance-related risks which could undermine the Group's ability to achieve its business
objectives in a sustainable manner. The risk management framework is designed to be flexible, to ensure that
it remains relevant at all levels of the business given the diversity of the Group's locations, markets and
production processes; and dynamic, to ensure that it remains current and responsive to changing business
conditions.

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.

Competitive environment in which Mondi operates
The industry in which Mondi operates is highly competitive and subject to significant volatility. New capacity
additions are usually in large increments which, combined with product substitution towards lighter weight
products and alternative packaging solutions and increasing environmental considerations, have an impact on
the supply-demand balance and hence on market prices.

Mondi monitors industry developments in terms of changes in capacity as well as trends and developments in
its own product range and potential substitutes. A flexible and responsive approach to market and operating
conditions and the Group's strategic focus on low-cost production in growing markets, with consistent
investment in its operating capacity serve to mitigate this risk.

In 2012, the acquisitions of Nordenia and the corrugated packaging plants in Germany and the Czech
Republic, as well as the disposal of Aylesford Newsprint, further position the Group in its selected strategic
growth areas.

Cost and availability of a sustainable supply of raw materials
Fibre (wood, pulp and recovered paper) and resins accounts for approximately one-third of the Group's input
costs. It is the Group's objective to acquire fibre from sustainable sources and to avoid the use of any illegal
or controversial supply.

All plantations in South Africa and leased/managed forests in Russia are FSC certified. With the exception
of Stambolijski, Bulgaria, all mills have chain-of-custody certificates in place, ensuring that the wood procured
in 2012 was from non-controversial sources. Stambolijski will be certified to FSC chain-of-custody
standards in 2013 and currently wood supplies meet Mondi's minimum wood standards that ensure legality
and non-controversial wood sources. Mondi constantly monitors international market prices for its other raw
materials (recovered paper and resins) and, where possible, have cost pass-through mechanisms in place
with customers to mitigate the risk of input cost increases. The Group's focus on high-quality, low-cost
operations, relatively high levels of integration and access to its own fibre in Russia and South Africa further
mitigate this risk.

Cost of energy and related input costs
Non-fibre input costs comprise approximately a third of the Group's total variable costs. Increasing energy
costs, and the consequential impact thereof on both chemical and transport costs, may impact the Group's
operating profit margins.

Active investment in energy related projects have significantly improved energy self-sufficiency and efficiency
in the Group.

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. The Group has adequate insurance in place to cover material
property damage, business interruption and liability risks. 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.

The locations in which the Group operates
Mondi 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. In
addition, economic risks in certain regions are heightened following the macroeconomic uncertainties
experienced in recent years.

Mondi is invested in a number of geographical locations, with a strategic focus on low-cost high-growth
markets. This geographical diversity and decentralised management structure utilising local resources in
countries in which the Group operates reduces its exposure to any specific jurisdiction. Mondi continues to
actively monitor and adapt to changes in the environments in which it operates.

Attraction and retention of key skills and talent
The complexity of operations and geographic diversity of the Group is such that high-quality, experienced
employees are required in all locations.

Appropriate reward and retention strategies are in place to attract and retain talent across the organisation. At
more senior levels, these include a share based incentive scheme.

Employee and contractor safety
Mondi's employees work in potentially dangerous environments where hazards are ever-present and must be
managed. Mondi's objective is a zero harm environment.

The Group engages in extensive safety training sessions, involving employees and contractors, at all its
operations. The Nine Safety Rules to Live By, applied across the Group, are integral to the safety strategy.
Operations conduct statutory safety committee meetings where management and employees are represented.
A risk-based approach underpins safety and health programmes. All business units and operations are
required to have safety improvement plans in place. Mondi's Total Recordable Case Rate (TRCR per
200,000 hours worked) was 0.79 (2011: 0.92). Regrettably, there were two fatalities at our operations during
the year  one in Finland and one in Russia.

Environmental footprint
Maintaining the Group's socio-economic license to trade is a strategic imperative. This encompasses
continued access to credible sources of fibre as described above, protection of High Conservation Value
(HCV) areas and bio-diversity, eco-efficiency of products throughout their lifecycle and the Group's carbon
and energy footprint.

Mondi's approach to product stewardship is based on the Life-Cycle Initiative set out in the United Nations
Environmental Programme (UNEP). The Group's certified products carry clear and informative labelling to
ensure that its customers are aware of the environmental process controls and health and safety assessments
conducted throughout the life cycles of Mondi's products. In 2012, no incidents of non-compliance relating to
the regulation and voluntary codes, to which the Group subscribes, concerning product and service
information and labelling were recorded. Mondi does not convert natural forests, riparian areas, wetlands or
protected areas into plantations. HCV areas are identified and preserved or enhanced, as is biological
diversity. In Russia 522,260 hectares have been set aside for conservation (24.8% of our landholding) and
76,398 hectares in South Africa (25% of our landholding). Mondi uses biomass energy sources such as black
liquor as an alternative to fossil fuels at all of its mills. Some 58% of Mondi's fuel consumption comes from
biomass and a number of operations are completely energy self-sufficient.

Governance risks
The Group operates in a number of legal jurisdictions and non-compliance with legal and governance
requirements in these jurisdictions could expose the Group to significant risk if not adequately managed.

The Group's legal and governance risk management and compliance will be set out in the Corporate
governance report in the integrated reporting and financial statements 2012.

Financial risks
Mondi's trading and financing activities expose the Group to financial risks that, if left unmanaged, could
adversely impact current or future earnings. These risks relate to the currencies in which the Group conducts
its activities, interest rate and liquidity risks as well as exposure to customer credit risk.

Mondi's approach to financial risk management is described in notes 37 and 38 of the annual financial
statements.

Going concern
The Group's business activities, together with the factors likely to affect its future development, performance
and position are set out in the business review. The financial position of the Group, its cash flows, liquidity
position and borrowing facilities are described in the annual financial statements. In addition, the risk report
sets out the most significant risks facing the Group and the management and mitigation thereof.

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 as more fully described in note 10 of the
condensed financial statements. 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 EUR762 million of
undrawn committed debt facilities as at 31 December 2012 which should provide sufficient liquidity in the
medium term.

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.

The directors have reviewed the overall Group strategy, the budget for 2013 and subsequent years,
considered the assumptions contained in the budget and reviewed the critical risks which may impact the
Group's performance. After making such enquiries, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly,
they continue to adopt the going concern basis in preparing the integrated report and financial statements.

Dividend
The Boards' aim is to offer shareholders long-term dividend growth within a targeted dividend cover range of
two to three times over the business cycle. Given the Group's strong financial position notwithstanding the
significant debt-funded acquisitions during the year, and the Boards' stated objective to increase distributions
to shareholders through the ordinary dividend, we are pleased to recommend an increase in the final dividend.

The boards of Mondi Limited and Mondi plc have recommended a final dividend of 19.1 euro cents per share
(2011: 17.75 euro cents per share), payable on 16 May 2013 to shareholders on the register at 19 April 2013.
Together with the interim dividend of 8.9 euro cents per share, paid on 18 September 2012, this amounts to a
total dividend for the year of 28.0 euro cents per share. In 2011, the total dividend for the year was 26.0 euro
cents per share.

Outlook
Mondi's focus in the near term will be the integration and optimisation of the recent acquisitions and
successful delivery of the significant capital investment projects initiated over the course of the past year. It is
pleasing to see the progress that has already been made in integrating the recent acquisitions, exemplified by
the fact that the Group has revised upwards by 33% its estimate of expected synergies to EUR30 million per
annum within two years.

Fundamentals for Mondi's core segments remain sound, although recently announced capacity additions by
various manufacturers in selected paper grades are a concern, exacerbated by the prevailing demand
softness as Europe remains affected by the macroeconomic slowdown. However, with the strong finish to the
year, coupled with the expected contribution from the recent acquisitions, the Boards remain confident of
making progress in the year ahead.

Directors' responsibility statement
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, and
have been audited in compliance with the applicable requirements of the Companies Act of South Africa 2008
and the UK Companies Act 2006.

The responsibilty statement below has been prepared in connection with the Group's annual report for the
year ended 31 December 2012. Certain parts thereof are not included within this announcement.

The Boards confirm that to the best of their knowledge:

    -   the financial statements, prepared in accordance with the relevant financial reporting framework, give
        a true and fair view of the assets, liabilities, financial position and profit and loss of Mondi Limited,
        Mondi plc and the undertakings included in the consolidation taken as a whole; and
    -   the management report, which is incorporated into the directors' report, includes a fair view of the
        development and performance of the business and the position of the Group and the undertakings
        included in the consolidation taken as a whole, together with a description of the principal risks and
        uncertainties that they face.

The Group's combined and consolidated financial statements, and related notes, were approved by the
Boards and authorised for issue on 20 February 2013 and were signed on its behalf by:

David Hathorn                                     Andrew King
Director                                          Director

20 February 2013                                  20 February 2013

Audited financial information 
 
The combined and consolidated financial statements for the year ended 31 December 2012 have been 
audited by the Group's auditors, Deloitte LLP and Deloitte & Touche. Their unqualified audit reports are 
available for inspection at the Group's registered offices. 
 
Condensed combined and consolidated income statement 
for the year ended 31 December 2012
                                                                        2012                            2011
                                                              Before    Special      After     Before     Special      After
                                                             special      items    special    special       items    special
EUR million                                          Notes     items    (note 4)     items      items     (note 4)     items

Continuing operations
Group revenue                                            3    5,807           -      5,807      5,739           -      5,739
Materials, energy and consumables used                       (3,049)          -     (3,049)    (2,998)          -     (2,998)
Variable selling expenses                                      (523)          -       (523)      (511)          -       (511)

Gross margin                                                  2,235           -      2,235      2,230           -      2,230
Maintenance and other indirect expenses                        (279)          -       (279)      (272)          -       (272)
Personnel costs                                                (840)       (16)       (856)      (808)         (4)      (812)
Other net operating expenses                                   (193)       (10)       (203)      (186)         (2)      (188)
Depreciation, amortisation and impairments                     (355)        (1)       (356)      (342)        (48)      (390)

Operating profit/(loss)                                  3      568        (27)        541        622         (54)       568
Non-operating special items                              4        -        (64)        (64)         -          (1)        (1)
Net income from associates                                        1           -          1          1           -          1

Total profit/(loss) from operations and associates              569        (91)        478        623         (55)       568
Net finance costs                                              (107)         -        (107)      (111)          -       (111)
Investment income                                                10          -          10         30           -         30
Foreign currency losses                                          (2)         -          (2)         -           -          -
Finance costs                                                  (115)         -        (115)      (141)          -       (141)

Profit/(loss) before tax                                        462        (91)        371        512         (55)       457
Tax (charge)/credit                                      5      (91)        (1)        (92)      (102)          2       (100)

Profit/(loss) from continuing operations                        371        (92)        279        410         (53)       357

Discontinued operation                                   6                               -                                43
Profit from discontinued operation                                                                                        14
Net gain on distribution of discontinued operation                                                                        29

Profit for the financial year                                                          279                               400

Attributable to:
 Non-controlling interests                                                              35                                70
 Equity holders of the parent companies                                                244                               330

Earnings per share (EPS) for profit attributable to
equity holders of the parent companies

From continuing operations
Basic EPS                  (EUR cents)                   7                            50.5                              57.5
Diluted EPS                (EUR cents)                   7                            50.3                              56.8
  
Basic underlying EPS       (EUR cents)                   7                            69.6                              68.1
Diluted underlying EPS     (EUR cents)                   7                            69.3                              67.3

From continuing and discontinued operations
Basic EPS                  (EUR cents)                   7                            50.5                              66.1
Diluted EPS                (EUR cents)                   7                            50.3                              65.3

Basic headline EPS         (EUR cents)                   7                            63.4                              69.9   
Diluted headline EPS       (EUR cents)                   7                            63.1                              69.1   


Condensed combined and consolidated statement of comprehensive
income
for the year ended 31 December 2012

EUR million                                                                               2012     2011

Profit for the financial year                                                              279      400
 
Other comprehensive income/(expense):
Items that may subsequently be reclassified to the combined and consolidated income
statement:
  Effect of cash flow hedges                                                                 2       12
  Gains on available-for-sale investments                                                    1        -
  Exchange differences on translation of foreign operations                                 49     (196)
  Share of other comprehensive income of associates                                          -       (1)
  Tax effect thereof                                                                         -       (4)
Items that will not subsequently be reclassified to the combined and consolidated income
statement:
  Actuarial losses on post-retirement benefit schemes                                      (61)     (18)
  Surplus restriction on post-retirement benefit schemes                                    26       (3)
  Tax effect thereof                                                                         8        4

Other comprehensive income/(expense) for the financial year, net of tax                     25     (206)

Total comprehensive income for the financial year                                          304      194

Attributable to:
 Non-controlling interests                                                                  42       43
 Equity holders of the parent companies                                                    262      151

Condensed combined and consolidated statement of financial position
as at 31 December 2012

EUR million                                                   Notes      2012      2011

Intangible assets                                                         695       238
Property, plant and equipment                                           3,706     3,377
Forestry assets                                                           311       297
Investments in associates                                                   6        10
Financial asset investments                                                27        33
Deferred tax assets                                                        10         5
Retirement benefits surplus                                      11         -         8
Derivative financial instruments                                            -         3

Total non-current assets                                                4,755     3,971

Inventories                                                               779       637
Trade and other receivables                                             1,007       829
Current tax assets                                                         10         6
Financial asset investments                                                 1         1
Cash and cash equivalents                                                  56       191
Derivative financial instruments                                            4        10
Assets held for sale                                                        2         -

Total current assets                                                    1,859     1,674

Total assets                                                            6,614     5,645

Short-term borrowings                                            10      (281)     (286)
Trade and other payables                                               (1,025)     (891)
Current tax liabilities                                                   (66)      (78)
Provisions                                                                (67)      (43)
Derivative financial instruments                                           (4)       (8)

Total current liabilities                                              (1,443)   (1,306)

Medium and long-term borrowings                                  10    (1,640)     (737)
Retirement benefits obligation                                   11      (253)     (202)
Deferred tax liabilities                                                 (344)     (310)
Provisions                                                                (33)      (35)
Derivative financial instruments                                           (1)        -
Other non-current liabilities                                             (24)      (20)

Total non-current liabilities                                          (2,295)   (1,304)
 
Total liabilities                                                      (3,738)   (2,610)

Net assets                                                              2,876     3,035

Equity
Ordinary share capital and stated capital                                 542       542
Retained earnings and other reserves                                    2,030     2,044

Total attributable to equity holders of the parent companies            2,572     2,586
Non-controlling interests in equity                                       304       449

Total equity                                                            2,876     3,035

The Group's combined and consolidated financial statements, and related notes, were approved by the
Boards and authorised for issue on 20 February 2013 and were signed on its 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 year ended 31 December 2012

EUR million                                                                                                Notes            2012          2011

Cash generated from operations                                                                               15a             845           917
Dividends from associates                                                                                                      1             2
Dividends from other investments                                                                                               1             -
Income tax paid                                                                                                             (107)          (85)

Net cash generated from operating activities                                                                                 740           834

Cash flows from investing activities
Investment in property, plant and equipment                                                                    3            (298)         (263)
Investment in intangible assets                                                                                               (9)           (5)
Investment in forestry assets                                                                                                (60)          (42)
Investment in financial asset investments                                                                                     (7)          (13)
Proceeds from the disposal of property, plant and equipment and intangible assets                                             15             9
Proceeds from the sale of financial asset investments                                                                          4             8
Acquisition of subsidiaries, net of cash and cash equivalents                                                               (381)          (12)
Acquisition of associates, net of cash and cash equivalents                                                                    -            (2)
Proceeds from the disposal of businesses, net of cash and cash equivalents                                                   (16)           17
Disposal of discontinued operation's cash and cash equivalents                                                                 -           (38)
Loan repayments from related parties                                                                                           9             -
Loan repayments from/(advances to) external parties                                                                           16            (1)
Interest received                                                                                                              3             9
Other investing activities                                                                                                    (1)            2

Net cash used in investing activities                                                                                       (725)         (331)

Cash flows from financing activities
Repayment of short-term borrowings                                                                           15c            (132)         (135)
Proceeds from medium and long-term borrowings                                                                15c             614           123
Repayment of medium and long-term borrowings                                                                 15c             (65)         (127)
Interest paid                                                                                                                (92)         (106)
Dividends paid to equity holders of the parent companies                                                                    (128)         (126)
Purchases of treasury shares                                                                                                 (34)          (12)
Dividends paid to non-controlling interests                                                                                  (29)          (43)
Non-controlling interests bought out                                                                          13            (298)           (1)
Net realised (loss)/gain on cash and asset management swaps                                                                   (9)            9
Other financing activities                                                                                                     -            (1)

Net cash used in financing activities                                                                                       (173)         (419)

Net (decrease)/increase in cash and cash equivalents                                                                        (158)           84

Cash and cash equivalents at beginning of year(1)                                                                            117            24
Cash movement in the year                                                                                    15c            (158)           84
Effects of changes in foreign exchange rates                                                                 15c               4             9

Cash and cash equivalents at end of year(1)                                                                                  (37)          117
 
Note:

1 Cash and cash equivalents include overdrafts and cash flows from disposal groups and are reconciled to the combined and consolidated
  statement of financial position in note 15b.

Condensed combined and consolidated statement of changes in equity
for the year ended 31 December 2012

                                                                                                                  Total
                                                          Combined                                      attributable to
                                                     share capital                                       equity holders
                                                        and stated        Retained                        of the parent     Non-controlling         Total
EUR million                                                capital(1)     earnings   Other reserves(2)        companies           interests        equity

At 1 January 2011                                              646           1,916               201              2,763                 461         3,224
Total comprehensive income for the year                          -             330              (179)               151                  43           194
Dividends paid                                                   -            (126)                -               (126)                (43)         (169)
Effect of dividend in specie distributed (see
note 6)                                                       (104)           (101)                -               (205)                  -          (205)
Issue of shares under employee share
schemes                                                          -              12               (12)                 -                   -             -
Purchases of treasury shares                                     -             (12)                -                (12)                  -           (12)
Disposal of treasury shares                                      -               4                 -                  4                   -             4
Disposal of discontinued operation (see note 6)                  -               -                (5)                (5)                 (6)          (11)
Disposal of businesses                                           -               -                (1)                (1)                  -            (1)
Non-controlling interests bought out                             -               5                 -                  5                  (6)           (1)
Reclassification                                                 -              13               (13)                 -                   -             -
Other                                                            -               -                12                 12                   -            12

At 31 December 2011                                            542           2,041                 3              2,586                 449         3,035

Total comprehensive income for the year                          -             244                18                262                  42           304
Dividends paid                                                   -            (128)                -               (128)                (29)         (157)
Issue of shares under employee share
schemes                                                          -               9                (9)                 -                   -             -
Purchases of treasury shares                                     -             (34)                -                (34)                  -           (34)
Disposal of businesses (see note 14)                             -               -                15                 15                   -            15
Non-controlling interests bought out                             -            (141)                -               (141)               (157)         (298)
Reclassification                                                 -             (12)               12                  -                   -             -
Other                                                            -               2                10                 12                  (1)           11

At 31 December 2012                                            542           1,981                49              2,572                 304         2,876

Notes:

1 In August 2011, Mondi Limited's par value shares were converted by special resolution to shares with no par value. As a result Mondi Limited's
  share capital and share premium were combined into a stated capital account. The share consolidation described in notes 6 and 7 had no
  impact on the stated capital and share capital of Mondi Limited and Mondi plc respectively.
2 Other reserves are analysed further below.


                                                                                                Other reserves(1)
                                                                           Cumulative
                                                       Share-based        translation
                                                           payment         adjustment         Cash flow  Post-retirement        Statutory
EUR million                                                reserve            reserve     hedge reserve benefits reserve        reserves(2)           Total

At 1 January 2011                                               17               (31)              (10)             (40)              265               201
Total comprehensive income for the year                          -              (171)                8              (16)                -              (179)
Mondi share schemes' charge                                     12                 -                 -                -                 -                12
Issue of shares under employee share
schemes                                                        (12)                -                 -                -                 -               (12)
Disposal of discontinued operation (see note 6)                  -                (5)                -                -                 -                (5)
Disposal of businesses                                           -                (1)                -                -                 -                (1)
Reclassification                                                 -                 -                 -                -               (13)              (13)

At 31 December 2011                                             17              (208)               (2)             (56)              252                 3

Total comprehensive income for the year                          -                42                 2              (27)                1                18
Mondi share schemes' charge                                     10                 -                 -                -                 -                10
Issue of shares under employee share
schemes                                                         (9)                -                 -                -                 -                (9)
Disposal of businesses (see note 14)                             -                15                 -                -                 -                15
Reclassification                                                 -                 -                 -               12                 -                12

At 31 December 2012                                             18              (151)                -              (71)              253                49

Notes:

1 All movements in other reserves are disclosed net of non-controlling interests. The movement in non-controlling interests as a direct result of the
  movement in other reserves for the year ended 31 December 2012 was an increase in non-controlling interests related to total comprehensive
  income for the year of EUR7 million (2011: decrease of EUR27 million).
2 Statutory reserves consist of the merger reserve of EUR259 million (2011: EUR259 million) and other sundry reserves in deficit of EUR6 million
  (2011: deficit of EUR7 million).

Notes to the condensed combined and consolidated financial statements
for the year ended 31 December 2012

1       Basis of preparation

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.

The condensed combined and consolidated financial information included in this preliminary announcement
has been prepared in accordance with the measurement and recognition criteria of International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and contains
the information required by IAS 34, 'Interim Financial Reporting'. The Group has also complied with the South
African Institute of Chartered Accountants Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Reporting Pronouncements as issued by the Reporting Standards Council of South
Africa. 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 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 financial information set out above does not constitute the Company's statutory accounts for the years
ended 31 December 2012 or 2011 but is derived from those accounts. Statutory accounts for 2011 have been
delivered to the registrar of companies, and those for 2012 will be delivered in due course. The auditors have
reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a
statement under section 498 (2) or (3) of the UK Companies Act 2006. Copies of their unqualified auditors'
reports are available for inspection at the Mondi Limited and Mondi plc registered offices.

2       Accounting policies

The same accounting policies, methods of computation and presentation have been followed in the
preparation of the 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.

3       Operating segments

Identification of the Group's externally reportable operating segments

The Group's externally reportable segments reflect the internal reporting structure of the Group, which is the
basis on which resource allocation decisions are made by management in the pursuit of strategic objectives.
The Group operates under two primary geographic regions reflecting its South African activities and assets,
and its international, principally European, activities and assets. The broad European region is further split by
product segments reflecting the management structure of the Group.

Following the completion of the acquisition of Nordenia International AG (Nordenia) on 1 October 2012 (refer
note 12) the Europe & International business was reorganised to comprise four operating segments:
Packaging Paper, Fibre Packaging, Consumer Packaging and Uncoated Fine Paper. Furthermore, the
disposal of Aylesford Newsprint on 2 October 2012 (refer note 14) resulted in the previously reported
Newsprint segment no longer meeting any of the quantitative thresholds required for classification as a
separate operating segment. The remaining newsprint joint venture, Mondi Shanduka Newsprint, has
accordingly been incorporated into the South Africa Division due to similarities in geographical location,
production processes and the integrated nature of the production facilities. The Group's segmental information
for the year ended 31 December 2011 has been restated to reflect these reorganisations.

Product revenues

The material product types from which the Group's externally reportable segments derive both their internal
and external revenues are presented as follows:

Operating segments                                                       Revenues(1)

Europe & International
 Packaging Paper                                                         -   Packaging paper
 Fibre Packaging                                                         -   Fibre packaging products
 Consumer Packaging                                                      -   Consumer packaging products
 Uncoated Fine Paper                                                     -   Uncoated fine paper
                                                                         -   Pulp
                                                                         -   Newsprint
South Africa Division                                                    -   Uncoated fine paper
                                                                         -   Pulp
                                                                         -   Packaging paper
                                                                         -   Newsprint(2)

Notes:

1 Revenues are generated from both internal and external sales. The Group operates a vertically-integrated structure in order to benefit from
  economies of scale and to more effectively manage the risk of adverse price movements in key input costs. Internal revenues are therefore
  generated across the supply chain.
2 South Africa Division generates newsprint revenue from external sales only.

Measurement of operating segment revenues, profit and loss, assets and non-current non-
financial assets

Management has regard to certain operating segment measures in making resource allocation decisions and
monitoring segment performance. The operating segment measures required to be disclosed adhere to the
recognition and measurement criteria presented in the Group's accounting policies. In addition, the Group has
presented certain non-IFRS measures by segment to supplement the user's understanding. All intra-group
transactions are conducted on an arm's length basis.

The Group's measure of net segment assets includes the allocation of retirement benefits surpluses and
deficits on an appropriate basis. The measure of segment results exclude, however, the financing effects of
the Group's defined benefit pension plans. In addition, the Group's measure of net segment assets does not
include an allocation for derivative assets and liabilities, non-operating receivables and payables and assets
held for sale and associated liabilities. The measure of segment results includes the effects of certain
movements in these unallocated balances.

The Group's geographic analysis is presented on the following level:

     -    continental; or
     -    sub-continental; or
     -    by individual country (if greater than 10% of the Group total).

There has been no change in the basis of measurement of segment profit and loss in the financial year.

Operating segment revenue
                                                                                                                         (Restated)
                                                                         2012                                              2011
                                                         Segment          Internal         External          Segment          Internal          External
EUR million                                              revenue         revenue(1)         revenue(2)       revenue         revenue(1)         revenue(2)

Europe & International
 Packaging Paper                                           1,896            (469)             1,427            2,006             (469)            1,537
 Fibre Packaging                                           1,860             (42)             1,818            1,881              (33)            1,848
 Consumer Packaging                                          502              (4)               498              372               (5)              367
 Uncoated Fine Paper                                       1,466             (13)             1,453            1,429              (20)            1,409
 Intra-segment elimination                                  (528)            528                  -             (526)             526                 -

Total Europe & International                               5,196               -              5,196            5,162               (1)            5,161

South Africa Division                                        653            (109)               544              645             (155)              490

Segments total                                             5,849            (109)             5,740            5,807             (156)            5,651
Unallocated:
Disposed operation                                            67               -                 67               88                -                88
Inter-segment elimination                                   (109)            109                  -             (156)             156                 -

Group total                                                5,807               -              5,807            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
                                                                                                           (Restated)
EUR million                                                                                          2012       2011

Products
Fibre packaging products                                                                            1,785      1,810
Packaging paper                                                                                     1,393      1,438
Uncoated fine paper                                                                                 1,355      1,337
Consumer packaging products                                                                           498        367
Pulp                                                                                                  276        263
Newsprint                                                                                             233        251
Other(1)                                                                                              267        273

Group total                                                                                         5,807      5,739

Note:

1 Revenues derived from product types that are not individually material are classified as other.

External revenue by location of customer
EUR million                                                                                                                      2012               2011

Revenue
Africa
 South Africa(1)                                                                                                                  405                303
 Rest of Africa                                                                                                                   236                268
 
Africa total                                                                                                                      641                571

Western Europe
 Germany                                                                                                                          791                810
 United Kingdom(1)                                                                                                                271                278
 Rest of western Europe                                                                                                         1,445              1,529

Western Europe total                                                                                                            2,507              2,617

Emerging Europe                                                                                                                 1,180              1,144
Russia                                                                                                                            592                556
North America                                                                                                                     270                243
South America                                                                                                                      41                 30
Asia and Australia                                                                                                                576                578

Group total                                                                                                                     5,807              5,739

Note:

1 These revenues, which total EUR676 million (2011: EUR581 million), are attributable to the countries in which the Group's parent entities are
  domiciled.


External revenue by location of production
EUR million                                                                                                                      2012               2011

Revenue
Africa
 South Africa(1)                                                                                                                  652                617
 Rest of Africa                                                                                                                     8                 10

Africa total                                                                                                                      660                627

Western Europe
 Austria                                                                                                                        1,025              1,110
 United Kingdom(1)                                                                                                                120                147
 Rest of western Europe                                                                                                         1,179              1,090

Western Europe total                                                                                                            2,324              2,347

Emerging Europe
 Poland                                                                                                                           766                794
 Rest of emerging Europe                                                                                                        1,086              1,075

Emerging Europe total                                                                                                           1,852              1,869

Russia                                                                                                                            729                703
North America                                                                                                                     196                159
Asia and Australia                                                                                                                 46                 34

Group total                                                                                                                     5,807              5,739


Note:

1 These revenues, which total EUR772 million (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 from continuing operations before special items                        
                                                                           (Restated)   
EUR million                                                         2012         2011   
Europe & International                                                                  
Packaging Paper                                                      227          295   
Fibre Packaging                                                      101           86   
Consumer Packaging                                                    19           25   
Uncoated Fine Paper                                                  191          205   
Total Europe & International                                         538          611   
South Africa Division                                                 68           63   
Corporate & other businesses                                         (33)         (33)   
Segments total                                                       573          641   
Disposed operation                                                    (5)         (19)   
Operating profit from continuing operations before special items     568          622   
Special items (see note 4)                                           (91)         (55)   
Net income from associates                                             1            1   
Net finance costs                                                   (107)        (111)   
Group profit from continuing operations before tax                   371          457   

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.

                                                                                         Depreciation, amortisation and
                                                                   EBITDA                        impairments(1)
                                                                            (Restated)                        (Restated)
EUR million                                                      2012           2011             2012             2011

Europe & International
 Packaging Paper                                                  321            392               94               97
 Fibre Packaging                                                  168            149               67               63
 Consumer Packaging                                                45             37               26               12
 Uncoated Fine Paper                                              300            309              109              104

Total Europe & International                                      834            887              296              276

South Africa Division                                             123            117               55               53
Corporate & other businesses                                      (32)           (32)               1                1

Segments total                                                    925            972              352              330
Unallocated:
Disposed operation                                                 (2)            (8)               3               12

Group total from continuing operations                            923            964              355              342

Note:
1 Excluding impairments included in special items (see note 4).

                                                                      Green energy sales and disposal
                                         Operating lease charges           of emissions credits
                                                         (Restated)                       (Restated)
EUR million                                  2012             2011             2012             2011

Europe & International
 Packaging Paper                                13              32               67              79
 Fibre Packaging                                 8               9                -               -
 Consumer Packaging                              3               1                -               -
 Uncoated Fine Paper                             7               7                9               5

Total Europe & International                    31              49               76              84

South Africa Division                            5               6                -               -
Corporate & other businesses                     2               1                -               -

Group total from continuing operations          38              56               76              84

Reconciliation of total profit from operations and associates to EBITDA
EUR million                                                              2012   2011

Total profit from operations and associates                               478    568
Special items (excluding associates) (see note 4)                          91     55
Depreciation, amortisation and impairments(1)                             355    342
Share of associates' net income                                            (1)    (1)

EBITDA                                                                    923    964

Note:
1 Excluding impairments included in special items (see note 4).

Operating segment assets
                                                                         (Restated)
                                                   2012                     2011
                                            Segment   Net segment    Segment    Net segment
EUR million                                  assets(1)     assets    assets(1)       assets

Europe & International
 Packaging Paper                              1,829         1,466     1,593           1,249
 Fibre Packaging                              1,229           958     1,131             866
 Consumer Packaging                           1,019           872       175             131
 Uncoated Fine Paper                          1,450         1,248     1,473           1,283
 Intra-segment elimination                     (120)            -      (131)              -

Total Europe & International                  5,407         4,544     4,241           3,529

South Africa Division                           962           811     1,007             860
Corporate & other businesses                      5             1         6               3
Inter-segment elimination                       (30)            -       (40)              -

Segments total                                6,344         5,356     5,214           4,392
Unallocated:
Disposed operation                                -             -        51              27
Investments in associates                         6             6        10              10
Deferred tax assets/(liabilities)                10          (334)        5            (305)
Other non-operating assets/(liabilities)(2)     170          (315)      140            (291)

Group trading capital employed                6,530         4,713     5,420           3,833
Financial asset investments                      27            27        33              33
Net debt                                         57        (1,864)      192            (831)

Group assets                                  6,614         2,876     5,645           3,035

Notes:
1 Segment assets are operating assets and as at 31 December 2012 consist of property, plant and equipment of EUR3,706 million (2011:
  EUR3,377 million), intangible assets of EUR695 million (2011: EUR238 million), forestry assets of EUR311 million (2011: EUR297 million),
  retirement benefits surplus of EURnil (2011: EUR8 million), inventories of EUR779 million (2011: EUR637 million) and operating receivables of
  EUR854 million (2011: EUR708 million).
2 Other non-operating assets consist of derivative assets of EUR4 million (2011: EUR13 million), current income tax receivables of EUR10 million
  (2011: EUR6 million), other non-operating receivables of EUR153 million (2011: EUR121 million) and assets held for sale of EUR2 million
  (2011: EURnil). Other non-operating liabilities consist of derivative liabilities of EUR4 million (2011: EUR8 million), non-operating provisions of
  EUR94 million (2011: EUR68 million), current income tax liabilities of EUR66 million (2011: EUR78 million) and other non-operating payables
  and deferred income of EUR320 million (2011: EUR277 million).

Non-current non-financial assets
                                                                                 (Restated)
                                           2012                                    2011
                            Non-current                   Net     Non-current                    Net
                          non-financial    Segment    segment   non-financial       Segment  segment
EUR million                     assets1     assets     assets         assets(1)      assets   assets

Africa
 South Africa(2)                   793         938        786            825            974      827
 Rest of Africa                      7          20         19              6             17       16

Africa total                       800         958        805            831            991      843

Western Europe
 Austria                           477         828        611            453            796      576
 United Kingdom(2)                  39          69         60             37             77       66
 Rest of western Europe            929       1,359      1,136            398            671      525

Western Europe total             1,445       2,256      1,807            888          1,544     1,167

Emerging Europe
 Poland                            623         805        703            469            594      511
 Slovakia                          408         456        388            439            490      427
 Rest of emerging Europe           451         628        511            342            482      388

Emerging Europe total            1,482       1,889      1,602          1,250          1,566    1,326

Russia                             855         985        925            836            957      917
North America                       84         162        136             57            105       91
Asia and Australia                  46          94         81             19             51       48

Segments total                   4,712       6,344      5,356          3,881          5,214    4,392

Notes:
1 Non-current non-financial assets are non-current assets and consist of property, plant and equipment, intangible assets and forestry assets, but
  exclude retirement benefits surplus, deferred tax assets and non-current financial assets.
2 These non-current non-financial assets, segment assets and net segment assets, which total EUR832 million, EUR1,007 million and
  EUR846 million respectively (2011: EUR862 million, EUR1,051 million and EUR893 million respectively), are attributable to the countries in
  which the Group's parent entities are domiciled.

Additions to non-current non-financial assets

                                       Additions to non-current non-     Capital expenditure cash
                                              financial assets(1)                 payments(2)
                                                            (Restated)                     (Restated)
EUR million                                    2012             2011            2012             2011

Europe & International
 Packaging Paper                                249               66             89               67
 Fibre Packaging                                144               82             76               72
 Consumer Packaging                             620               15             28               15
 Uncoated Fine Paper                             60               51             58               61

Total Europe & International                  1,073              214            251              215

South Africa Division                           106               71             46               29

Segments total                                1,179              285            297              244
Unallocated:
Disposed and discontinued operations              1               20              1               19

Group total                                   1,180              305            298              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.

4   Special items  
                                                                                     
EUR million                                                                               2012   2011   
Operating special items                                                                                 
Asset impairments                                                                          (1)   (48)   
Restructuring and closure costs:                                                                        
Restructuring and closure costs excluding related personnel costs                          (4)    (5)   
Personnel costs relating to restructuring                                                 (16)    (4)   
Reversal of restructuring and closure costs excluding related personnel costs               -      3   
Transaction costs incurred on the acquisition of Nordenia                                 (11)     -   
Gain on insurance settlement                                                                5      -   
Total operating special items                                                             (27)   (54)   
Non-operating special items                                                                             
Loss on disposals (see note 14)                                                           (70)    (1)   
Gain on sale of land                                                                        6      -   
Total non-operating special items                                                         (64)    (1)   
Total special items from continuing operations before tax and non-controlling interests   (91)   (55)   
Tax (see note 5)                                                                           (1)     2   
Total special items attributable to equity holders of the parent companies                (92)   (53)   

Special items from continuing operations before tax and non-controlling interests by operating
segment

                                                (Restated)   
EUR million                              2012         2011 
Europe & International  
Packaging Paper                             -          (11)   
Fibre Packaging                          (16)          (8)   
Consumer Packaging                       (11)          (5)   
Uncoated Fine Paper                        -            2   
Total Europe & International             (27)         (22)   
South Africa Division                      6            -   
Segments total                           (21)         (22)   
Unallocated:                                                 
Disposed operation                       (70)         (33)   
Group total from continuing operations   (91)         (55)   

Operating special items
Asset impairments of EUR1 million and restructuring costs of EUR20 million in the Industrial Bags segment of
the Fibre Packaging business in Belgium, Spain, France and Mexico were recognised. These costs were
partly offset by a EUR5 million gain on the settlement of an insurance claim.

Transaction costs incurred by the Consumer Packaging business on the acquisition of Nordenia amounted to
EUR11 million.

Non-operating special items
A gain of EUR6 million was realised on the sale of land in the South Africa Division as part of its 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
and that Mondi is paid a fair price for the land and secures a continued fibre supply for its mills.

The disposal of Aylesford Newsprint resulted in a loss on disposal of EUR70 million. The shares in Aylesford
Newsprint were sold for a nominal consideration satisfied in cash at completion.

5     Tax charge

(a)   Analysis of charge for the year from continuing operations

EUR million                                                                      2012   2011   
UK corporation tax at 24.5% (2011: 26.5%)                                           -      1   
SA corporation tax at 28% (2011: 28%)                                              17      7   
Overseas tax                                                                       66     84   
Current tax (excluding tax on special items)                                       83     92   
Deferred tax in respect of the current period (excluding tax on special items)     16     22   
Deferred tax in respect of prior period over provision                             (8)   (12)   
Total tax charge before special items                                              91    102   
Current tax on special items                                                        2      -   
Deferred tax on special items                                                      (1)    (2)   
Total tax charge/(credit) on special items (see note 4)                             1     (2)   
Total tax charge from continuing operations                                        92    100   

(b)     Factors affecting tax charge for the year

The Group's effective rate of tax from continuing operations before special items for the year ended 31
December 2012, calculated on profit from continuing operations before tax before special items and including
net income from associates, is 20% (2011: 20%).

The Group's total tax charge from continuing operations for the year can be reconciled to the tax on the
Group's profit from continuing operations before tax at the weighted average UK and SA corporation tax rate
of 24.9% (2011: 26.6%), as follows:

EUR million                                                                                 2012   2011   
Profit from continuing operations before tax                                                 371    457   
Tax on profit from continuing operations before tax calculated at the weighted average UK                 
and SA corporation tax rate of 24.9%(1) (2011: 26.6%(1))                                      92    121   
Tax effect of net income from associates, calculated at 24.9% (2011: 26.6%)                    -      -   
Tax effects of:                                                                                           
Tax in Mondi Limited on intercompany interest received from Mpact Limited                      -      4   
Expenses not deductible/(taxable) for tax purposes                                             6     (7)   
Intangible amortisation and non-qualifying depreciation                                       (7)   (11)   
Special items not deductible                                                                   5      1   
Other non-deductible expenses                                                                  8      3   
Non-taxable income                                                                            (1)    (1)   
Temporary difference adjustments                                                              35     14   
Changes in tax rates(2)                                                                        7      -   
Current year tax losses and other temporary differences not recognised                        36     26   
Prior period tax losses and other temporary differences not previously recognised             (8)   (12)   
Other adjustments                                                                            (40)   (31)   
Current tax prior period adjustments                                                         (11)     6   
South African Secondary Tax on Companies                                                       -      4   
Tax incentives                                                                               (20)   (20)   
Effect of differences between local rates and UK and SA rates                                (19)   (28)   
Other adjustments                                                                             10      7   
Tax charge from continuing operations for the financial year                                  92    100   

Note:
1 The weighted average tax rate has been determined by weighting the profit from continuing operations before tax after special items of Mondi
  Limited and its subsidiaries and Mondi plc and its subsidiaries.

2 For the year ended 31 December 2012, changes in tax rates principally relate to adjustments made to deferred tax balances based on
  substantively enacted future changes in corporation tax rates in Slovakia and Sweden.

The Group's share of its associates' tax charge included within net income from associates for the year ended
31 December 2012 is EURnil (2011: EURnil).

6       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 year ended 31 December 2011 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:

EUR million                                                                                               2011   
Revenue                                                                                                    296   
Expenses                                                                                                  (282)   
Profit before tax                                                                                           14   
Related tax charge                                                                                           -   
Profit after tax from discontinued operation                                                                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                                                         43   
Attributable to:                                                                                                 
Non-controlling interests                                                                                    -   
Equity holders of the parent companies                                                                      43   
Earnings per share from the discontinued operation were:                                                         
EUR cents per share                                                                                       2011   
Profit from discontinued operation for the financial year attributable to equity holders of the parent           
companies                                                                                                        
Basic EPS                                                                                                  8.6   
Diluted EPS                                                                                                8.5   

Details of the discontinued operation disposed were as follows:           
EUR million                                                        2011   
Net assets disposed                                                 181   
Cumulative translation adjustment reserve realised                   (5)   
Non-controlling interests disposed                                   (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   

7       Earnings per share

As described in note 6, 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 years under review the effect of the share consolidation was included from 1
August 2011.
                                                       Number of shares          
million                                                     2012   2011   
Basic number of ordinary shares outstanding(1)               483    499   
Effect of dilutive potential ordinary shares                   2      6   
Diluted number of ordinary shares outstanding                485    505   

Note:
1 The basic number of ordinary shares outstanding represents the weighted average number in issue for Mondi Limited and Mondi plc for the
  year, as adjusted for the weighted average number of treasury shares held during the year, and includes the impact of the share consolidation in
  2011.

(a)       From continuing operations

EUR cents per share                                                                              2012   2011   
Profit from continuing operations for the financial year attributable to equity holders of the                 
parent companies                                                                                               
Basic EPS                                                                                        50.5   57.5   
Diluted EPS                                                                                      50.3   56.8   
Underlying earnings for the financial year                                                                     
Basic EPS                                                                                        69.6   68.1   
Diluted EPS                                                                                      69.3   67.3   

The calculation of basic and diluted EPS and basic and diluted underlying EPS from continuing operations is
based on the following data:

                                                                                                      Earnings          
EUR million                                                                                          2012   2011   
Profit for the financial year attributable to equity holders of the parent companies                  244    330   
Profit from discontinued operation (see note 6)                                                         -    (14)   
Net gain on distribution of discontinued operation (see note 6)                                         -    (29)   
Profit from continuing operations for the financial year attributable to equity holders of the                     
parent companies                                                                                      244    287   
Special items (see note 4)                                                                             91     55   
Related tax (see note 4)                                                                                1     (2)   
Underlying earnings for the financial year                                                            336    340   

(b)   From continuing and discontinued operations                                                                  
EUR cents per share                                                                                  2012   2011   
Profit for the financial year attributable to equity holders of the parent companies                               
Basic EPS                                                                                            50.5   66.1   
Diluted EPS                                                                                          50.3   65.3   
Headline earnings for the financial year(1)                                                                          
Basic EPS                                                                                            63.4   69.9   
Diluted EPS                                                                                          63.1   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 3/2012, '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          
EUR million                                                                                2012   2011   
Profit for the financial year attributable to equity holders of the parent companies        244    330   
Net gain on distribution of discontinued operation (see note 6)                               -    (29)   
Special items (see note 4)                                                                   91     55   
Special items: restructuring and closure costs                                              (20)    (6)   
Transaction costs attributable to the acquisition of Nordenia (see note 12)                 (11)     -   
Profit on disposal of tangible and intangible assets                                         (4)     -   
Impairments not included in special items                                                     4      1   
Related tax                                                                                   2     (2)   
Headline earnings for the financial year                                                    306    349   

8       Alternative measure of earnings per share
The directors 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 on 1 January 2011. This is deemed appropriate
as it is the continuing operations of the Group, after taking the impact of the share consolidation into
consideration, which form the basis of the performance of the Group. This approach enables 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 the Mondi Group Integrated report and financial
statements for the year ended 31 December 2011 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 on 1 January 2011.

The demerger and related share consolidation had no impact on the Group's results for the year ended 31
December 2012.

                                                                                 Earnings          
EUR million                                                                     2012   2011   
Underlying earnings for the financial year                                       336    340   
Tax saving by Mondi Limited on intercompany interest received from Mpact(1)        -      4   
Saving of interest paid on net debt at 8.6% per annum                              -      3   
Tax at 28% on saving of interest paid                                              -     (1)   
Adjusted earnings for the financial year                                         336    346   

Note:
1 Had the recapitalisation of Mpact occurred on 1 January 2011, 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   
million                                                                                        2012     2011   
Basic number of ordinary shares outstanding                                                     483      499   
Adjustment for Mondi Limited share consolidation(1)                                               -      (17)   
Adjusted basic number of ordinary shares outstanding(2)                                         483      482   
Effect of dilutive potential ordinary shares                                                      2        6   
Diluted number of ordinary shares outstanding after Mondi Limited share consolidation           485      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. In 2011, 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
  year, as adjusted for the weighted average number of treasury shares held during the year.

Based on the adjusted earnings and weighted average number of shares, the alternative, non-IFRS earnings
per share figures for continuing operations would be:

EUR cents per share                                               2012   2011   
Earnings per share - alternative measure for the financial year                 
Basic EPS - alternative measure                                   69.6   71.8   
Diluted EPS - alternative measure                                 69.3   70.9   

9       Dividends
Dividend payments

An interim dividend for the year ended 31 December 2012 of 90.44358 rand cents / 8.90 euro cents per share
was paid on 18 September 2012 to all Mondi Limited and Mondi plc ordinary shareholders on the relevant
registers on 24 August 2012.

A proposed final dividend for the year ended 31 December 2012 of 19.1 euro cents per ordinary share will be
paid on 16 May 2013 to all those shareholders on the register of Mondi plc on 19 April 2013. An equivalent
South African rand final dividend will be paid on 16 May 2013 to shareholders on the register of Mondi Limited
on 19 April 2013. The final dividend is subject to the approval of the shareholders of Mondi Limited and Mondi
plc at the respective annual general meetings scheduled for 3 May 2013.

Dividend timetable

The proposed final dividend for the year ended 31 December 2012 of 19.1 euro cents per share will be paid in
accordance with the following timetable:

                                                         Mondi Limited      Mondi plc          
Last date to trade shares cum-dividend                                                         
JSE Limited                                              12 April 2013      12 April 2013      
London Stock Exchange                                    Not applicable     16 April 2013      
Shares commence trading ex-dividend                                                            
JSE Limited                                              15 April 2013      15 April 2013      
London Stock Exchange                                    Not applicable     17 April 2013      
Record date                                                                                    
JSE Limited                                              19 April 2013      19 April 2013      
London Stock Exchange                                    Not applicable     19 April 2013      
Last date for receipt of Dividend Reinvestment Plan                                            
(DRIP) elections by Central Securities Depository                                              
Participants                                             25 April 2013      25 April 2013      
Last date for DRIP elections to UK Registrar and South                                         
African Transfer Secretaries by shareholders of Mondi                                          
Limited and Mondi plc                                    26 April 2013      21 April 2013*     
Payment Date                                                                                   
South African Register                                   16 May 2013        16 May 2013        
UK Register                                              Not applicable     16 May 2013        
DRIP purchase settlement dates                           24 May 2013        21 May 2013**      
Currency conversion date                                                                       
ZAR/euro                                                 21 February 2013   21 February 2013   
Euro/sterling                                            Not applicable     30 April 2013      

*26 April 2013 for Mondi plc South African branch register shareholders
**24 May 2013 for Mondi plc South African branch register shareholders

Share certificates on the South African registers of Mondi Limited and Mondi plc may not be dematerialised or
rematerialised between 15 April 2013 and 21 April 2013, both dates inclusive, nor may transfers between the
UK and South African registers of Mondi plc take place between 10 April 2013 and 21 April 2013, 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 21 February 2013.

10   Borrowings

                                                    2012                            2011           
EUR million                        Current   Non-current   Total   Current   Non-current   Total   
Secured                                                                                            
Bank loans and overdrafts                5             3       8         9             1      10   
Obligations under finance leases         2             9      11         2            10      12   
Total secured                            7            12      19        11            11      22   
Unsecured                                                                                          
Bank loans and overdrafts              253           251     504       253           155     408   
Bonds                                    -         1,310   1,310         -           492     492   
Bonds                                    -         1,357   1,357         -           492     492   
Embedded call option derivative          -           (47)    (47)        -             -       -   
Other loans                             21            67      88        22            79     101   
Total unsecured                        274         1,628   1,902       275           726   1,001   
Total borrowings                       281         1,640   1,921       286           737   1,023   

Obligations under finance leases                                     
The maturity of obligations under finance leases is:                 
EUR million                                            2012   2011   
Not later than one year                                   3      3   
Later than one year but not later than five years         8     10   
Later than five years                                     5      -   
Future value of finance lease liabilities                16     13   
Future finance charges                                   (5)    (1)   
Present value of finance lease liabilities               11     12   

The Group does not have any individual finance lease arrangements which are considered material.

Financing facilities

Group liquidity is provided through a range of committed debt facilities. The principal loan arrangements in
place include the following:

EUR750 million Syndicated Revolving Credit Facility (RCF)
The RCF is a five year multi-currency revolving credit facility which was signed on 14 April 2011. Interest is
charged on the balance outstanding at market-related rates linked to EURIBOR.

EUR500 million 2017 Eurobond
Mondi Finance plc launched its inaugural seven year publicly traded bond, guaranteed by Mondi plc, in March
2010. The EUR500 million bond, which matures on 3 April 2017, was issued at a discount of EUR5.63 million
and pays a fixed coupon of 5.75% per annum. The bond contains a coupon step up clause whereby the
coupon will be increased by 1.25% per annum if Mondi fails to maintain at least one investment grade credit
rating from either Moody's Investors Service or Standard & Poor's. Mondi currently has investment grade
credit ratings from both Standard & Poor's (BBB-, outlook stable) and Moody's Investors Service (Baa3,
outlook stable).

EUR500 million 2020 Eurobond
In September 2012 Mondi Finance plc launched an eight year publicly traded bond, guaranteed by Mondi plc.
The EUR500 million bond, which matures on 28 September 2020, was issued at a discount of EUR0.1 million
and pays a fixed coupon of 3.375% per annum. The bond contains the same 1.25% per annum coupon step
up clause as the EUR500 million 2017 Eurobond.

EUR280 million Eurobond
As part of the acquisition of Nordenia (see note 12) Mondi assumed Nordenia's EUR280 million Eurobond,
paying a coupon of 9.75% per annum and maturing on 15 July 2017. The bond was recognised at its fair
value of EUR324 million at date of acquisition. The fair value of the bond includes the fair value of an option
to call the bond early at the following redemption rates:

%                           Redemption rate

Redemption date
15 July 2014                        104.875
15 July 2015                        102.438
15 July 2016 and thereafter         100.000

The option is valued at EUR47 million at 31 December 2012.

EUR160 million Export Credit Agency Facility (ECAF)
The ECAF is used to part finance expansionary capital expenditure in Russia. The facility has an amortising
repayment until 2020 and interest is charged on the balance outstanding at a market-related rate linked to
LIBOR.

PLN 474 million European Investment Bank Facility (EIBF1)
The EIBF1 is used to part finance expansionary capital expenditure at Mondi Swiecie in Poland. The facility
has an amortising repayment until 2017 and interest is charged at a market-related rate linked to WIBOR
(Warsaw Interbank Offered Rate).

EUR100 million European Investment Bank Facility (EIBF2)
The EIBF2 is used to part finance expansionary capital expenditure in Russia. The facility is currently undrawn
and is available to be drawn until 28 May 2013. Once drawn, the facility amortises over 12 years with a two
year grace period. Interest is charged on the balance outstanding at a market-related rate linked to EURIBOR.

RUB 1.6 billion European Bank for Reconstruction and Development Facility (EBRDF)
The EBRDF is used to part finance expansionary capital expenditure in Russia. The facility has an amortising
repayment until 2019 and interest is charged on the balance outstanding at a market-related rate linked to
MOSPRIME (Moscow Prime Offered Rate).

In addition to the facilities above, the Group has committed facilities amounting to R1.2 billion in South Africa,
comprising of two revolving loans of R500 million (2011: R500 million) and R700 million (2011: R500 million)
respectively. These loans are repayable on their extended maturity dates of 15 June 2013 and 23 August
2013 and bear interest at one month JIBAR plus different margins, payable monthly.

The Group's borrowings as at 31 December are analysed by nature and underlying currency as follows:

                                                  Non-interest                                 
                     Floating rate   Fixed rate        bearing   Total carrying                
2012/EUR million        borrowings   borrowings     borrowings            value   Fair value   
Euro                           126        1,322              -            1,448        1,559   
South African rand             180            -              -              180          180   
Polish zloty                    84            -              -               84           84   
Russian rouble                  41            -              -               41           41   
Turkish lira                    29            -              -               29           29   
Pounds sterling                116            -              -              116          116   
Other currencies                22            1              -               23           23   
Carrying value                 598        1,323              -            1,921                
Fair value                     598        1,434              -                         2,032   

                                                  Non-interest                                 
                     Floating rate   Fixed rate        bearing   Total carrying                
2011/EUR million        borrowings   borrowings     borrowings            value   Fair value   
Euro                           152          503              -              655          682   
South African rand             178            -              -              178          178   
Polish zloty                    94            -              -               94           94   
Russian rouble                  39            -              -               39           39   
Turkish lira                    26            -              -               26           26   
Pounds sterling                 19            -              -               19           19   
Other currencies                 3            9              -               12           12   
Carrying value                 511          512              -            1,023                
Fair value                     511          539              -                         1,050   

In addition to the above, the Group swaps euro debt into other currencies through the foreign exchange
market.

The fair values of the EUR500 million 2017 Eurobond, EUR500 million 2020 Eurobond and EUR280 million
Eurobond are estimated with reference to the last price quoted in the secondary market and for all other
financial liabilities are estimated by discounting the future contractual cash flows at the current market interest
rate that is available to the Group for similar financial instruments.

The Group has pledged specific assets as collateral against certain borrowings. The fair values of these
assets as at 31 December are as follows:

EUR million                                         2012   2011   
Assets held under finance leases                                  
Property, plant and equipment                          9      9   
Assets pledged as collateral for other borrowings                 
Property, plant and equipment                          8     21   
Inventories                                            4      5   
Financial assets                                       2     17   
Other                                                  -     17   
Total value of assets pledged as collateral           23     69   

The Group is entitled to receive all cash flows from these pledged assets. Further, there is no obligation to
remit these cash flows to another entity.

11      Retirement benefits

All assumptions of the Group's material defined benefit schemes and post-retirement medical plan liabilities
were reassessed individually and the remaining Group defined benefit schemes and unfunded statutory
retirement obligations were reassessed in aggregate for the year ended 31 December 2012.

The net retirement benefit obligation increased by EUR59 million mainly due to changes in assumptions,
EUR21 million of net liabilities acquired through business combinations (see note 12), an exchange rate
impact of EUR4 million and a EUR2 million settlement charge resulting from the winding-up of the Mondi
Pension Fund in South Africa. 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. The reimbursement is included in
trade and other receivables.

The assets backing the defined benefit scheme liabilities reflect their market values as at 31 December 2012.
Any movements in the assumptions have been recognised as an actuarial movement in the combined and
consolidated statement of comprehensive income.

12      Business combinations

To 31 December 2012

Acquisition of Nordenia
On 1 October 2012 Mondi acquired 99.93% of the outstanding share capital of Nordenia from Oaktree Capital
Management L.P. and certain other minority shareholders for a cash consideration of EUR259 million. The
acquisition enables Mondi to create a leading consumer packaging business.

Nordenia generated operating profits prior to its acquisition by Mondi, but was highly geared and as a result
had an equity deficit. The premium of EUR268 million paid over the fair values of Nordenia's identifiable net
assets was recognised as goodwill on acquisition and can be attributed to significant synergies to be realised
from combining Nordenia's existing consumer packaging activities with those of Mondi, the ability to leverage
Nordenia's existing competencies in high-growth emerging markets, exposure to Nordenia's proven innovation
and product development processes and access to Nordenia's long-term relationships with a broad blue chip
customer base. It is not expected that any portion of the goodwill will be deductible for tax purposes.

The interest of non-controlling interests in Nordenia of 0.07% recognised at the acquisition date was
insignificant.

The fair value accounting reflected in these results is provisional in nature. The nature of this business is such
that adjustments to the carrying values of acquired assets and/or liabilities, and to the goodwill arising on
acquisition, are possible as the detail of the acquired business is evaluated post acquisition. If necessary,
these adjustments will be made within 12 months of the acquisition date.

Prior to being acquired by Mondi, Nordenia generated revenue of approximately EUR74 million per month and
underlying operating profit of EUR6 million per month. Nordenia's revenue for the year ended 31 December
2012 was EUR873 million with a profit after tax of EUR1 million. Nordenia's revenue of EUR208 million and
underlying operating profit of EUR1 million since date of acquisition have been included in the combined and
consolidated income statement. Transaction costs of EUR11 million related to the acquisition are recognised
as a special item in the combined and consolidated income statement.

Details of the net assets acquired, as adjusted from book to fair value, and the attributable goodwill are as
follows:

EUR million                                                           Book value   Revaluation   Fair value   
Net assets acquired:                                                                                          
Intangible assets                                                              2           100          102   
Property, plant and equipment                                                224            (3)         221   
Financial asset investments                                                   17             -           17   
Deferred tax assets                                                            4             -            4   
Inventories                                                                  113             7          120   
Trade and other receivables                                                  127             -          127   
Cash and cash equivalents                                                     33             -           33   
Other current assets                                                           1             -            1   
Short-term borrowings                                                        (56)            -          (56)   
Trade and other payables                                                    (134)            -         (134)   
Current tax liabilities                                                       (6)            -           (6)   
Provisions                                                                   (27)            -          (27)   
Medium and long-term borrowings                                             (300)          (45)        (345)   
Retirement benefits obligation                                               (20)            -          (20)   
Deferred tax liabilities                                                     (14)          (17)         (31)   
Other non-current liabilities                                                (15)            -          (15)   
Net assets acquired                                                          (51)           42           (9)   
Goodwill arising on acquisition                                                                         268   
Total cost of acquisition                                                                               259   
Transaction costs expensed                                                                               11   
Cash acquired net of overdrafts                                                                         (33)   
Net cash paid per combined and consolidated statement of cash flows                                     237   

In respect of trade and other receivables, the gross contractual amounts receivable and the best estimate at
the acquisition date of the contractual cash flows not expected to be collected approximate the book value and
the revaluation amount respectively as presented.

Other acquisitions
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. The premium of EUR4 million paid over the
acquisition date fair values of the net assets acquired is attributable to expected cost saving synergies.
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.

In line with Mondi's existing strategy to strengthen its leading market position in corrugated packaging in
central and eastern Europe, Mondi acquired two corrugated box plants in Germany and the Czech Republic,
consuming 130,000 tonnes of containerboard per annum, and a 105,000 tonne recycled containerboard mill in
the Czech Republic from Duropack GmbH (Duropack) for a cash consideration of EUR133 million on 5
November 2012. On 19 November 2012 the Group announced its intention to close the recycled
containerboard mill. Closure costs of EUR3 million were recognised in the combined and consolidated income
statement.

The premium of the purchase price over the acquisition date fair values of the net assets acquired from
Duropack amounted to EUR84 million and is mainly attributable to synergies expected to be realised from
combining the converting activities of the two box plants with the Group's existing operations.

It is not expected that any portion of the goodwill arising from the acquisition of these businesses will be
deductible for tax purposes.

The fair value accounting reflected in these results is provisional in nature. The nature of these businesses is
such that adjustments to the carrying values of acquired assets and/or liabilities, and to the goodwill arising on
acquisition, are possible as the detail of each acquired business is evaluated post acquisition. If necessary,
these adjustments will be made within 12 months of the acquisition dates.

Prior to the acquisitions, the businesses generated revenue of approximately EUR12 million per month and
underlying operating profits of EUR1 million per month. The businesses' aggregate revenues for the year
ended 31 December 2012 were EUR148 million with profits after tax of EUR7 million. Since the acquisition
dates, turnover of EUR27 million and underlying operating losses of EUR1 million were contributed by the
businesses and included in the combined and consolidated income statement.

Details of the aggregate net assets acquired, as adjusted from book to fair value, and the attributable goodwill
are presented as follows:

EUR million                                                            Book value   Revaluation   Fair value   
Net assets acquired:                                                                                           
Intangible assets                                                               -             3            3   
Property, plant and equipment                                                 100            25          125   
Inventories                                                                    10            (2)           8   
Trade and other receivables                                                    16             -           16   
Cash and cash equivalents                                                      20             -           20   
Short-term borrowings                                                         (11)            -          (11)   
Trade and other payables                                                      (22)            -          (22)   
Current tax liabilities                                                        (1)            -           (1)   
Provisions                                                                     (1)           (1)          (2)   
Medium and long-term borrowings                                               (48)            -          (48)   
Retirement benefits obligation                                                 (1)            -           (1)   
Deferred tax liabilities                                                       (1)           (9)         (10)   
Other non-current liabilities                                                  (1)            -           (1)   
Net assets acquired(1)                                                         60            16           76   
Goodwill arising on acquisitions(2)                                                                       88   
Total cost of acquisitions                                                                               164   
Cash acquired net of overdrafts                                                                          (20)   
Net cash paid per combined and consolidated statement of cash flows(3)                                   144   

Notes:
1 EUR27 million of net assets acquired is attributable to Saturn and EUR49 million to Duropack.
2 EUR4 million of the goodwill arising on acquisitions is attributable to Saturn and EUR84 million to Duropack.
3 EUR29 million of the net cash paid is attributable to Saturn and EUR115 million to Duropack.

In respect of trade and other receivables, the gross contractual amounts receivable and the best estimates at
the acquisition dates of the contractual cash flows not expected to be collected approximate the book values
and the revaluation amounts respectively as presented.

There were no other acquisitions made during the year ended 31 December 2012.

To 31 December 2011

There were no major acquisitions made during the year ended 31 December 2011.

Details of the aggregate net assets acquired are disclosed in note 29 of the Group's annual financial
statements for the year ended 31 December 2012.

13        Non-controlling interests bought out
On 18 April 2012, Mondi concluded an all cash public tender offer for the ordinary shares 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.

EUR2 million was paid for the acquisition of an additional 3.1% of the ordinary shares of Mondi Tire Kutsan
Kagit Ve Ambalaj Sanayi Anonim Sirketi.

These acquisitions are reflected in the combined and consolidated statement of changes in equity as
transactions between shareholders with the premium over the carrying value of the non-controlling interests
being reflected as a reduction in retained earnings.

14      Disposal of joint ventures and subsidiaries

To 31 December 2012

Disposal of Aylesford Newsprint
On 2 October 2012, Mondi and Svenska Cellulosa Aktiebolaget (SCA) sold their 100% interest in the jointly
owned Aylesford Newsprint to The Martland Holdings for a nominal consideration. Aylesford Newsprint
specialises in newsprint production from recycled fibre. The loss on disposal of EUR70 million was recognised
in special items in the combined and consolidated income statement. Transaction costs were insignificant and
were expensed.

Other disposals
There were no other significant disposals during the year ended 31 December 2012.

Details of the aggregate net assets disposed are presented as follows:                       
EUR million                                                                           2012   
Net assets disposed:                                                                         
Property, plant and equipment                                                           30   
Inventories                                                                              7   
Trade and other receivables                                                             11   
Cash and cash equivalents                                                               17   
Trade and other payables                                                               (11)   
Provisions                                                                              (4)   
Retirement benefits obligation                                                          (1)   
Other non-current liabilities                                                           (1)   
Total net assets disposed                                                               48   
Guarantee liability retained                                                             7   
Cumulative translation adjustment reserve realised                                      15   
Loss on disposal of businesses (see note 4)                                            (70)   
Disposal proceeds                                                                        -   
Cash disposed                                                                          (17)   
Deferred consideration received in respect of the sale of Mondi Frohnleiten in 2010      1   
Net cash outflow from disposal of businesses during the year                           (16)   

To 31 December 2011

The discontinued operation and associated demerger of Mpact is disclosed in note 6.

There were no other major disposals during the year ended 31 December 2011. Details of the aggregate net
assets disposed are disclosed in note 31 of the Group's annual financial statements for the year ended 31
December 2012.

15    Consolidated cash flow analysis

(a)   Reconciliation of profit from continuing operations before tax to cash generated from
      operations

EUR million                                                                               2012   2011   
Profit from continuing operations before tax                                               371    457   
Depreciation and amortisation                                                              355    342   
Share-based payments                                                                        10     10   
Non-cash effect of special items                                                            91     36   
Net finance costs                                                                          107    111   
Net income from associates                                                                  (1)    (1)   
Decrease in provisions and post-employment benefits                                        (23)   (25)   
Increase in inventories                                                                    (14)   (55)   
Increase in operating receivables                                                          (31)   (32)   
(Decrease)/increase in operating payables                                                  (35)    19   
Fair value gains on forestry assets                                                        (40)   (49)   
Felling costs                                                                               64     65   
Profit on disposal of tangible and intangible assets                                        (4)     -   
Other adjustments                                                                           (5)     5   
Cash generated from continuing operations                                                  845    883   
Cash generated from discontinued operation                                                   -     34   
Cash generated from operations                                                             845    917   

(b)   Cash and cash equivalents
                                                                         
EUR million                                                                               2012   2011   
Cash and cash equivalents per combined and consolidated statement of financial position     56    191   
Bank overdrafts included in short-term borrowings (see note 15c)                           (93)   (74)   
Net cash and cash equivalents per combined and consolidated statement of cash flows        (37)    117   

The fair value of cash and cash equivalents approximate the carrying values presented.

(c)     Movement in net debt

The Group's net debt position, excluding disposal groups is as follows:

                                                     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                                                  84         135           4                 1         224
Business combinations                                       -          (4)         (1)                -          (5)
Disposal of discontinued operation (see note 6)             -          15         195                 -         210
Disposal of businesses                                      -          30          12                 -          42
Movement in unamortised loan costs                          -           -          (6)                -          (6)
Reclassification                                            -         (64)         64                 -           -
Currency movements                                          9          27          32                 -          68

At 31 December 2011                                       117        (212)       (737)                1        (831)

Cash flow                                                (158)        132        (549)                -        (575)
Business combinations (see note 12)                         -         (67)       (393)                -        (460)
Movement in unamortised loan costs                          -           -           3                 -           3
Reclassification                                            -         (46)         46                 -           -
Currency movements                                          4           5         (10)                -          (1)

At 31 December 2012                                       (37)       (188)     (1,640)                1      (1,864)

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 in cash and cash equivalents. As at 31 December 2012, short-term borrowings in the combined and
  consolidated statement of financial position of EUR281 million (2011: EUR286 million) include EUR93 million of overdrafts (2011:
  EUR74 million).

16   Capital commitments  
                                                                                        
EUR million                                                                                         2012   2011   
Contracted for but not provided                                                                      129    140   
Approved, not yet contracted for                                                                     589    372   
These capital commitments relate to the following categories of non-current non-financial assets:                 
EUR million                                                                                         2012   2011   
Intangible assets                                                                                      9     13   
Property, plant and equipment                                                                        709    499   
Total capital commitments                                                                            718    512   
The expected maturity of these capital commitments is:                                                            
EUR million                                                                                         2012   2011   
Within one year                                                                                      445    339   
One to two years                                                                                     263    141   
Two to five years                                                                                     10     32   
Total capital commitments                                                                            718    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 are
expected to be financed by existing cash resources and borrowing facilities.

17      Contingent liabilities and contingent assets

Contingent liabilities comprise aggregate amounts as at 31 December 2012 of EUR15 million (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 combined and consolidated statement of financial
position for both years 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 at 31 December 2012 or 31 December 2011.

18      Related party transactions

The Group has related party relationships with its joint ventures and associates. Transactions between Mondi
Limited, Mondi plc and their respective subsidiaries, which are related parties, have been eliminated on
consolidation.

The Group and its subsidiaries, in the ordinary course of business, enter into various sale, purchase and
service transactions with joint ventures and associates and others in which the Group has a material interest.
These transactions are under terms that are no less favourable than those arranged with third parties. These
transactions, in total, are not considered to be significant.

There have been no significant changes to the related parties as disclosed in note 39 of the Group's annual
financial statements for the year ended 31 December 2012.

19      Events occurring after 31 December 2012
With the exception of the proposed final dividend for 2012, included in note 9, there have been no material
reportable events since 31 December 2012.

Unaudited financial information
Production statistics

                                                   (Restated)   
                                            2012         2011   
Europe & International                                          
Containerboard               Tonnes    2,079,005    2,009,984   
Kraft paper                  Tonnes      980,637      955,741   
Softwood pulp                Tonnes    1,978,583    1,954,284   
Internal consumption         Tonnes    1,825,916    1,799,577   
External                     Tonnes      152,667      154,707   
Corrugated board and boxes   Mm2           1,213        1,213   
Industrial bags              M units       3,829        3,958   
Coating and release liners   Mm2           3,352        3,357   
Consumer packaging(1)        Tonnes      121,127       69,005   
Uncoated fine paper          Tonnes    1,417,709    1,400,991   
Newsprint                    Tonnes      201,278      199,337   
Hardwood pulp                Tonnes    1,059,140    1,033,226   
Internal consumption         Tonnes      972,883      975,121   
External                     Tonnes       86,257       58,105   
South Africa Division                                           
Containerboard               Tonnes      263,468      257,680   
Uncoated fine paper          Tonnes      257,747      233,837   
Hardwood pulp                Tonnes      658,368      637,205   
Internal consumption         Tonnes      320,772      316,388   
External                     Tonnes      337,596      320,817   
Softwood pulp(2)             Tonnes      169,724      182,651   
Internal consumption         Tonnes      169,724      182,651   
Newsprint                    Tonnes      114,854      124,914   

Notes:
1 Includes Nordenia from October 2012.
2 Restated to include proportionate share of Mondi Shanduka Newsprint production.

Exchange rates                                                  
                                                 2012    2011   
Closing rates against the euro                                  
South African rand                              11.17   10.48   
Czech koruna                                    25.15   25.79   
Polish zloty                                     4.07    4.46   
Pounds sterling                                  0.82    0.84   
Russian rouble                                  40.33   41.77   
Turkish lira                                     2.36    2.44   
US dollar                                        1.32    1.29   
Average rates for the period against the euro                   
South African rand                              10.55   10.10   
Czech koruna                                    25.14   24.59   
Polish zloty                                     4.18    4.12   
Pounds sterling                                  0.81    0.87   
Russian rouble                                  39.91   40.88   
Turkish lira                                     2.31    2.34   
US dollar                                        1.29    1.39   

Sponsor in South Africa:   UBS South Africa (Proprietary) Limited



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