Wrap Text
Full year results for the year ended 31 December 2014
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
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 Limited and/or the Disclosure and Transparency and Listing Rules of the United
Kingdom Listing Authority.
Full year results for the year ended 31 December 2014
Highlights
- Excellent financial performance
- Underlying operating profit of EUR767 million, up 10%
- Underlying earnings of 107.3 euro cents per share, up 13%
- Strong contribution from all business units
- Capital projects delivering meaningful contribution
- Completed investments delivering to plan
- Strong capital investment pipeline
- Good progress in integrating acquisitions
- Bags and kraft paper acquisition in US, extending global leadership
- Consumer Packaging acquisition in Poland increases capacity in low cost location
- Recommended full year dividend of 42.0 euro cents per share, up 17%
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 2014 2013 Change % 2014 2013 Change %
Group revenue 6,402 6,476 (1) 3,254 3,134 4
Underlying EBITDA(1) 1,126 1,068 5 573 514 11
Underlying operating profit(1) 767 699 10 390 333 17
Operating profit 728 605 20 354 320 11
Profit before tax 619 499 24 307 270 14
Per share measures
Basic underlying earnings per share(1) (EUR cents) 107.3 95.0 13
Basic earnings per share (EUR cents) 97.4 79.8 22
Total dividend per share (EUR cents) 42.0 36.0 17
Free cash flow per share(2) (EUR cents) 55.0 64.1 (14)
Cash generated from operations 1,033 1,036
Net debt 1,613 1,619
Group return on capital employed (ROCE)(3) 17.2% 15.3%
Notes:
1 The Group presents underlying EBITDA, operating profit 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. A reconciliation
of underlying operating profit to profit before tax is provided in note 3 of the condensed financial statements.
2 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.
3 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:
"I am pleased to report another successful year for Mondi. Underlying earnings per share increased
by 13% to 107.3 euro cents per share and our return on capital employed was 17.2%, with a strong
contribution from all business units.
During the year, we made good progress in growing the business. We completed a number of key
capital projects, including the 155,000 tonne per annum bleached kraft paper machine in the Czech
Republic, the recovery boiler in Slovakia and the 100,000 tonne per annum softwood pulp dryer in
Russia. Over the past 18 months, we have approved further major projects amounting to a total
capital commitment of around EUR420 million, thereby ensuring a strong pipeline for future growth. We
extended our global leadership position in industrial bags with the acquisition of Graphic Packaging's
bags business in the US, while in Consumer Packaging, we acquired a modern converting plant in
Poland.
The Boards have recommended a final dividend of 28.77 euro cents per share, bringing the total
dividend for the year to 42.0 euro cents per share, an increase of 17%.
Economic growth is expected to remain below historical averages in the regions in which we operate.
We expect this slow economic growth to continue to impact on demand for our products in the short
term, although underlying industry fundamentals remain generally sound, with supply/demand
balance supported by supply-side constraint.
Recent exchange rate movements provide a mixed impact, although with a clearly positive bias when
considered for the Group as a whole. Furthermore, the recently completed capital investments and
ongoing projects should contribute meaningfully to our performance going forward. As such, we
are confident of making further progress in the year ahead."
Overview
In 2014, Mondi delivered an excellent financial performance despite the continued slow economic growth in a number of key markets,
testament to the Group's robust business model and high-quality, low-cost asset base.
Revenue was broadly in line with the prior year. On a like for like basis, selling prices and volumes were
similar to the prior year, with revenue boosted by the acquisition of the bags business in the US, offset by
negative currency impacts and disposals or closures of non-core businesses.
Mondi's underlying operating profit of EUR767 million was up 10% on 2013. Packaging Paper continued to deliver
very strongly despite a generally weaker pricing environment, driven by cost reduction and currency benefits.
The Fibre Packaging business benefited from lower paper input costs and good volume growth. Consumer
Packaging saw a strong improvement in trading in the second half of the year. Coupled with the benefits of a
number of sales and margin improvement initiatives, the business was able to deliver a pleasing improvement in
year-on-year performance. Uncoated Fine Paper came under pressure from weaker pricing and negative
currency effects but nevertheless continued to deliver strongly, while the South Africa Division benefited from
higher average selling prices and the weak rand. Contributing to these results were the benefits from recently
completed capital investments, primarily around energy efficiencies and other cost optimisation in the pulp and
paper operations, and continued strong cost management across the Group.
While acquisition led growth remains a key component of the Group's strategy, and opportunities continue to
be evaluated as they arise, management currently sees greater opportunity for value-enhancing growth
through capital investments in existing operations. A number of key capital projects were completed during
the year, including the 155,000 tonne per annum bleached kraft paper machine in the Czech Republic, the
recovery boiler in Slovakia and the 100,000 tonne per annum softwood pulp dryer in Russia. Over the past 18
months further major projects were approved, amounting to a total capital commitment of around EUR420 million,
thereby ensuring a strong pipeline for future growth. The Group extended its global leadership position in
industrial bags with the acquisition of Graphic Packaging's bags business in the US in June, while in
Consumer Packaging, a modern converting plant in Poland was acquired in July.
Volatility in foreign exchange rates had a significant impact on the performance of the different business units,
although the net impact on the Group was limited. The sharp devaluation of the rouble in the second half
negatively impacted the domestically focused Russian operations of the Uncoated Fine Paper business unit,
while benefiting the export orientated Russian Packaging Paper activities. Rand weakness supported
the export business from South Africa. The stronger US dollar versus the euro had a net positive impact on
US dollar denominated export sales, although the greater impact is expected to be in the support it provides
going forward to European pricing levels given the reduced import threat.
The Group benefited from a general reduction in variable costs compared to the prior year. European wood costs were
lower as a result of lower demand and currency effects. Paper for recycling costs
were 3% lower than the previous year. Chemical input costs, particularly starch, also declined during the
year. The packaging converting operations benefited from lower average paper input costs. Benchmark
polyethylene prices were broadly in line with the previous year but declined sharply towards the end of the
year as a consequence of lower oil prices.
The Group benefited from lower energy costs largely as a result of the energy investments completed over the
last few years, which have significantly improved the efficiency and self-sufficiency of the larger, more energy
intensive, pulp and paper operations. Lower average oil and gas prices also contributed to the
lower energy costs, in addition to supporting a reduction in transport and logistics costs. Green energy
sales prices and volumes were higher than the previous year, providing further cost offset.
Fixed costs were lower than the previous year, driven by foreign exchange benefits and the continued
strategic focus on operating performance and efficiencies.
Consistent with the prior year, the impact of the Group's maintenance shuts on underlying operating profit was
around EUR55 million. In 2015, the effect is expected to be more significant, with longer shuts planned at certain
mills to allow for project implementation and the move of certain mills to an eighteen month rotation. The
impact on underlying operating profit, at prevailing price levels, is estimated at around EUR80 million.
Cash generated from operations of EUR1,033 million was similar to 2013 despite an increase in working capital of
EUR87 million. Excluding the impact of acquisitions, working capital as a percentage of revenue was 12.3%,
marginally above the Group's targeted 10-12% range.
Underlying earnings of 107.3 euro cents per share were up 13% compared to 2013.
The Boards are recommending payment of a final dividend of 28.77 euro cents per share, bringing the total
dividend for the year to 42.0 euro cents per share, an increase of 17% on 2013.
Europe & International - Packaging Paper
Year ended Year ended Six months Six months
31 31 ended 31 ended 31
December December December December
EUR million 2014 2013 Change % 2014 2013 Change %
Segment revenue 2,043 2,073 (1) 1,021 995 3
Underlying EBITDA 443 408 9 227 206 10
Underlying operating profit 342 308 11 175 154 14
Underlying operating profit margin 16.7% 14.9% 17.1% 15.5%
Special items (6) - (6) -
Capital expenditure 259 141 143 85
Net segment assets 1,588 1,543
ROCE 23.7% 21.7%
Building on the strong performance of 2013, Packaging Paper's underlying operating profit increased by 11%
to EUR342 million, with a ROCE of 23.7%. This was achieved on modest volume growth, lower costs and foreign
exchange gains, offset in part by lower average selling prices.
Sales volumes of containerboard grades were similar to the previous year, with all operations running at
capacity. Sales volumes of kraft paper increased as the business benefited from the successful start-up of the
155,000 tonne per annum bleached kraft paper machine in the second quarter, forward integrating pulp that
was previously sold on the open market, and the additional volumes from the kraft paper machine in the US
following the acquisition from Graphic Packaging in June.
Average benchmark unbleached virgin containerboard prices were 5% lower than the previous year. After
starting the year at lower levels than the previous year and subsequently drifting lower during the first half,
price increases were successfully implemented towards the end of the third quarter. Further prices increases
of EUR40 per tonne have been announced in February 2015 in southern Europe.
European white top kraftliner prices remained stable throughout the year. Price increases were implemented
in Russia to offset the weaker rouble.
Average benchmark recycled containerboard prices were 3% higher than the previous year. Having fallen
sharply through the first half due to increased supply from newly installed capacity, prices stabilised before a
series of price increases were implemented in the third quarter.
At the beginning of 2014, sack kraft prices were approximately 9% lower than the highs of the previous year.
On the back of a strong pick-up in demand, price increases in brown sack kraft paper of around 4% to 5%
were successfully implemented early in the second half, although average selling prices for the year remained
approximately 4% lower than the previous year. In early 2015, sack kraft prices have reduced by
approximately 2% to 4% as a result of seasonally weak demand and increased competition from producers
experiencing a reduction in their cost base from currency devaluation.
The Speciality Kraft Paper business benefited from good demand, with generally higher average selling prices
than in the previous year.
The business benefited from lower energy input costs with gas and electricity costs lower than the previous
year. Paper for recycling input costs declined marginally throughout the year impacted by lower demand from
China. Average benchmark prices were 3% lower than the previous year.
Good progress is being made in integrating the kraft paper mill in the US acquired in June 2014 as part of the
Graphic Packaging bags acquisition.
The annual maintenance shut at the Swiecie mill took place in June 2014 and the remainder of the shuts were
completed in the second half of the year.
In 2013, operating profit was impacted by the EUR11 million write-down of green energy credits following the
significant decline in market prices. Green energy prices recovered during 2014 and the business benefited
from both the increased market prices and increased volumes.
As a net exporter from Russia, the Czech Republic and Sweden, the devaluation of these currencies relative
to the euro provided a net benefit to the Packaging Paper business.
Europe & International - Fibre Packaging
Year ended Year ended Six months Six months
31 31 ended 31 ended 31
December December December December
EUR million 2014 2013 Change % 2014 2013 Change %
Segment revenue 1,852 1,690 10 984 834 18
Underlying EBITDA 166 146 14 88 71 24
Underlying operating profit 102 86 19 54 42 29
Underlying operating profit margin 5.5% 5.1% 5.5% 5.0%
Special items (16) (3) (9) (3)
Capital expenditure 77 71 47 40
Net segment assets 875 771
ROCE 13.4% 11.8%
The Fibre Packaging business continues to show steady progress with underlying operating profit of
EUR102 million, an increase of 19%, and a ROCE of 13.4%. The business benefited from gross margin
expansion and good cost control.
Higher average selling prices across all geographic regions, stable input costs and good fixed cost
management resulted in a strong improvement in the Corrugated Packaging business. Sales volumes were
broadly in line with the previous year despite the negative impact of the rationalisation activities in Turkey
completed in the previous year. The business was negatively impacted by currency translation losses as a
result of the weaker Turkish lira.
Industrial Bags had a very strong start to the year and, despite a slowdown in the second half, on a like-for-
like basis, sales volumes for the year ended 3% higher than in 2013. The volume growth, coupled with lower
average paper input costs, enabled the business to deliver a strong underlying operating profit performance.
The acquisition of the bags business from Graphic Packaging in the US, combined with the Group's existing
operations in that region creates a leading player in the North American bags market, further expanding the
Group's global footprint. Following the acquisition, a number of rationalisation and restructuring activities were
implemented, with a net special item charge of EUR10 million recognised. The business contributed EUR150 million
of revenue in the six months since it was acquired, with a negligible contribution to underlying operating profit,
as planned.
The Extrusion Coatings business benefited from good cost management, the restructuring of the Belgium
operations and stable pricing, but was negatively impacted by lower sales volumes.
Europe & International - Consumer Packaging
Year ended Year ended Six months Six months
31 31 ended 31 ended 31
December December December December
EUR million 2014 2013 Change % 2014 2013 Change %
Segment revenue 1,379 1,414 (2) 694 693 -
Underlying EBITDA 158 143 10 89 69 29
Underlying operating profit 96 79 22 57 37 54
Underlying operating profit margin 7.0% 5.6% 8.2% 5.3%
Special items (17) (13) (21) -
Capital expenditure 80 61 45 34
Net segment assets 1,021 964
ROCE 10.4% 8.7%
Underlying operating profit increased by 22% to EUR96 million. The second half performance was particularly
encouraging as the business benefited from improving volumes, input cost reductions and successful
implementation of various sales and margin improvement initiatives.
Management sought to pro-actively phase out a number of lower value-added mature products during the
year, although the weak trading conditions, particularly in the first half, made it difficult to adequately replace
these volumes by sales into higher value-added segments. Sales volumes increased during the second half
of the year in a generally more favourable trading environment.
A number of steps were taken during the year to improve the operating performance of the
business, including increasing investments in innovation activities and the business' sales and application
engineering infrastructure as well as further optimisation and specialisation of production facilities. The
acquisition of a plant for EUR17 million provides additional production capacity and, importantly, expands the
production technology base through the addition of flexographic printing technology in Poland. During the
year, the Taicang plant in China started commercial production, with good sales volumes and underlying profit
ahead of plan in its first year of operation.
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 2014 2013 Change % 2014 2013 Change %
Segment revenue 1,240 1,335 (7) 594 624 (5)
Underlying EBITDA 238 266 (11) 111 116 (4)
Underlying operating profit 148 164 (10) 68 67 1
Underlying operating profit margin 11.9% 12.3% 11.4% 10.7%
Special items - (60) - (10)
Capital expenditure 117 80 58 44
Net segment assets 922 1,099
ROCE 16.1% 16.0%
The Uncoated Fine Paper business generated underlying operating profit of EUR148 million, down on the prior
year as a result of lower average selling prices in Europe and the impact of a significantly weaker Russian
rouble. Good cost control, benefits from the restructuring of the Neusiedler mill in Austria, completed in 2013,
and lower input costs provided some offset to these headwinds.
Demand for uncoated fine paper increased by around 1% in Europe, while Russian demand is estimated to
have declined by approximately 3% compared to the previous year.
Uncoated fine paper sales volumes were marginally down on the prior year due to the effects of the
restructuring at the Neusiedler mill, while sales of market pulp increased as more volume was produced at the
Ruzomberok operation following the successful start-up of the new recovery boiler. Sales into the domestic
Russian market were maintained at similar levels to the prior year despite the lower overall market demand as
the business gained market share at the expense of importers.
Average benchmark uncoated fine paper selling prices were down 2% year on year in Europe. Selling price
increases were implemented during the year in Russia, although these were not sufficient to fully offset the
negative impact of the weaker rouble. Following the significant devaluation of the rouble towards the end of
the year, a 15% price increase in the domestic Russian market was implemented in February 2015. In
Europe, price increases of 5%-8% were announced to take effect from the end of the first quarter of 2015.
The business benefited from lower wood costs in Russia, with local currency increases more than offset by
the weaker rouble. Wood costs in central Europe were up marginally. Significantly lower gas and chemical
input costs provided a further benefit to the business.
A continued focus on cost optimisation meant that fixed costs were contained well within inflationary levels.
The benefits of the recently completed recovery boiler replacement in Ruzomberok are expected to be fully
realised in 2015.
South Africa Division
Year ended Year ended Six months Six months
31 31 ended 31 ended 31
December December December December
EUR million 2014 2013 Change % 2014 2013 Change %
Segment revenue 596 624 (4) 312 299 4
Underlying EBITDA 153 135 13 75 68 10
Underlying operating profit 112 93 20 54 49 10
Underlying operating profit margin 18.8% 14.9% 17.3% 16.4%
Special items - (11) - 7
Capital expenditure 29 52 20 38
Net segment assets 626 622
ROCE 21.9% 16.0%
Underlying operating profit of EUR112 million was 20% higher than the prior year, with the business delivering a
ROCE of 21.9%. The business benefited from higher average selling prices, the weaker rand and higher fair
value gains from its forestry assets.
Domestic selling prices were, on average, higher than the previous year. Benchmark average international
hardwood pulp prices were 6% lower than the previous year, but, as a net exporter of pulp and
containerboard, the business benefited from the stronger US dollar and euro relative to the rand which offset the lower
international selling prices.
Sales volumes were similar to the prior year except for newsprint as a result of the closure of a newsprint
machine during 2013. The newsprint business realised price increases and cost savings as a result of the
restructuring and machine closure completed in 2013, enabling this business to continue to generate a
modest level of operating profit.
Higher selling prices for wood and lower input costs, attributable in part to reduced transportation costs as a
result of the oil price decline, resulted in a EUR17 million increase in fair value gains on forestry assets compared
to the previous year.
The business remains under pressure from higher administered costs with labour and electricity costs
increasing in excess of inflationary levels. Strong cost management and active measures to improve
productivity and competitiveness enabled the business to limit increases to well within inflationary levels. The
business benefited from energy sales following completion of the steam turbine at the end of 2013, which
moved the Richards Bay mill into a net energy producing position.
The maintenance shut in Richards Bay was completed during the first half of the year. In 2015, a longer shut
is required in order to conduct additional planned maintenance activities and is scheduled to take place in the
first half of the year.
Tax
The Group's underlying effective tax rate of 19% was up 2% on the prior year on changes to the underlying
profit mix and as the incentives related to previous major investments were fully utilised during the year.
Special items
Special items are those items of financial performance that the Group believes should be separately disclosed
to assist in the understanding of the underlying financial performance achieved by the Group and its
businesses. These items are considered to be material either in nature or in amount.
The net special item charge of EUR52 million before tax comprised the following:
- EUR2 million charge for transaction costs relating to the acquisition of the bags and kraft paper business
from Graphic Packaging in the US;
- EUR38 million charge for various restructuring activities and EUR6 million charge for related asset
impairments in the Speciality Kraft Paper business, Industrial Bags business, Extrusion Coatings
business and Consumer Packaging business;
- EUR4 million gain on release of a provision for transaction costs attributable to the Nordenia acquisition;
- EUR3 million gain on settlement of a 2007 court case; and
- EUR13 million charge on early redemption of the EUR280 million Eurobond.
Further detail is provided in note 3 of the condensed financial statements.
After taking special items into consideration, profit attributable to shareholders of EUR471 million (97.4 euro cents
per share) was 22% higher than the previous year (EUR386 million, 79.8 euro cents per share).
Treasury and borrowings
The Group maintains diversified sources of funding and debt maturities. Our policy is to fund subsidiaries in
their local functional currency. External funding is obtained in a range of currencies, and where required,
translated into the subsidiaries' functional currencies through the swap market.
Net debt at 31 December 2014 of EUR1,613 million was at a similar level to the previous year. Net finance
charges of EUR97 million were EUR18 million lower than the previous year, with the Group benefiting from lower
average interest rates and lower average net debt.
The fair value of the Group's debt related derivative instruments is included in the calculation of net debt. The
significant depreciation of the rouble towards the end of 2014 led to a significant unrealised gain being
recognised at 31 December 2014.
Mondi's public credit ratings, first issued in March 2010, were reaffirmed during the year by Standard and
Poor's at BBB- and Moody's Investors Service upgraded the Group's credit rating from Baa3 to Baa2. The
upgrade validates the Group's high-quality, low-cost and well-diversified asset base and is testament to the
robustness of the Group's business model and ability to generate strong cash flows through the business
cycle.
In July 2014, the 9.75% EUR280 million bond assumed as part of the acquisition of Nordenia in 2012 was
redeemed at a premium of 4.875%. The net loss on redemption of EUR13 million was recognised as a special
item. The redemption was financed from existing borrowing facilities.
Gearing at 31 December 2014 was 36%, similar to the prior year. The Group's net debt to 12 month trailing
EBITDA ratio was 1.4 times, well within the Group's key financial covenant requirement of 3.5 times.
The weighted average maturity of the Eurobonds and committed debt facilities was 4 years at 31 December
2014. At the end of the year EUR456 million of the Group's EUR2.1 billion committed debt facilities remained
undrawn.
Cash flow
Mondi's cash generation continues to be strong. In 2014, the cash generated from our operating activities
was EUR1,033 million.
Excluding the impact of the Graphic Packaging acquisition, working capital as a percentage of revenue was
12.3%, marginally above the Group's targeted range of 10-12%. The net investment in working capital during
the year was EUR87 million (2013: EUR27 million).
Interest paid and returns to shareholders amounted to EUR331 million during the year, compared to EUR322 million
in the previous year. Dividends of EUR193 million were paid to shareholders of the Group (2013: EUR138 million)
and interest paid was EUR125 million (2013: EUR124 million). Dividends paid to holders of non-controlling interests
in the Group's subsidiaries were lower in 2014, primarily due to the lower dividend from the 51% held
Ruzomberok operations as cash was utilised for the completion of the EUR128 million recovery boiler investment.
In 2014, we invested EUR562 million in capital expenditure and completed 3 acquisitions with a total purchase
price (including debt assumed) of EUR104 million.
Capital investments
Capital expenditure amounted to EUR562 million, with a number of large investment projects both completed and
initiated during the year.
The EUR70 million, 155,000 tonne per annum bleached kraft paper machine in Steti, Czech Republic was
successfully started up during April 2014.
The new EUR128 million recovery boiler in Ruzomberok, Slovakia started up in November, significantly improving
the mill's environmental footprint, making the mill 100% energy self-sufficient, reducing ongoing operating and
maintenance costs and providing additional pulp production capacity.
Around the same time, the EUR30 million pulp dryer in Syktyvkar, Russia, producing 100,000 tonnes of FSC
certified softwood market pulp per year, was also completed.
The Group has a strong capital project pipeline, with a number of significant projects underway. The
EUR166 million project in Swiecie, Poland, bringing forward the planned replacement of the recovery boiler and
coal fired boilers is progressing according to plan and on track for project start-up in the second half of 2015.
Early in 2015, the Boards approved the EUR94 million second phase of this project which will ensure full
utilisation of the new recovery boiler's capacity, provide an additional 100,000 tonnes per annum of softwood
pulp, 80,000 tonnes per annum of kraftliner and further improve the mill's product mix flexibility.
The Boards have also approved approximately EUR30 million for a project at the South Africa Division's Richards
Bay mill to upgrade the wood yard. Other significant projects in progress or approved during the year,
amounting to approximately EUR130 million, include projects intended to further modernise some of the Group's
kraft paper and converting operations, provide additional capacity and production flexibility and reduce
ongoing operating and maintenance costs.
The incremental operating profit expected from major projects in 2015 is around EUR50 million
(2014: EUR45 million), illustrating the benefits that arise from these high return investments. Given this project
pipeline, and in the absence of other major projects, capital expenditure is expected to average EUR550 –
EUR560 million per year over the next two years.
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 and the Boards' stated
objective to increase distributions to shareholders through the ordinary dividend, the Boards have
recommended an increase in the final dividend.
The Boards of Mondi Limited and Mondi plc have recommended a final dividend of 28.77 euro cents per share
(2013: 26.45 euro cents per share), payable on 21 May 2015 to shareholders on the register on 24 April 2015.
Together with the interim dividend of 13.23 euro cents per share, paid on 16 September 2014, this amounts to
a total dividend for the year of 42.0 euro cents per share. In 2013, the total dividend for the year was 36.0
euro cents per share.
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 13 May 2015.
Outlook
Economic growth is expected to remain below historical averages in the regions in which the Group operates.
This slow economic growth is expected to continue to impact on demand for Mondi's products in the short
term, although underlying industry fundamentals remain generally sound, with supply/demand balance
supported by supply-side constraint.
Recent exchange rate movements provide a mixed impact, although with a clearly positive bias when
considered for the Group as a whole. Furthermore, the recently completed capital investments and ongoing
projects should contribute meaningfully to the Group's performance going forward. As such, management
is confident that Mondi will make further progress in the year ahead.
Principal risks and uncertainties
The executive committee, audit committee and Boards conduct an annual formal systematic review of the
Group's most significant risks and uncertainties, including how these risks are monitored and managed. Risk
management is embedded in all decision making processes, with ongoing review of the Group's risks
throughout the year as well as risk assessments being conducted as part of all investment decisions. A
number of the key risks to which we are exposed are a function of our strategy and thus are long-term in
nature and do not tend to change significantly from year to year.
Risk management is by nature a dynamic and ongoing process. Our risk management framework is designed
to address all the significant strategic, sustainability, financial, operational and compliance-related risks that
could undermine our ability to achieve our business objectives into the future. It is flexible, to ensure that it
remains relevant at all levels of the business; and dynamic to ensure we can be responsive to changing
business conditions. This is particularly important given the diversity of the Group's locations, markets and
production processes.
Over the course of the year, the audit committee has reviewed each of the principal risks set out below. In
evaluating the Group's risk management and internal control processes, the committee has considered both
internal and external audit reports and received confirmation from the finance heads of the business units that
financial control frameworks have operated satisfactorily.
The Boards are satisfied that the Group has effective systems and controls in place to manage its key risks
within the risk tolerance levels established by the Boards.
Industry capacity
Plant utilisation levels are the main driver of profitability in paper mills. New capacity additions are usually in
large increments which, through their impact on the supply/demand balance, influence market prices. Unless
market growth exceeds capacity additions, excess capacity may lead to lower selling prices.
We monitor industry developments in terms of changes in capacity as well as trends and developments in our
own product markets. Our strategic focus on low-cost production and innovation activities to produce higher
value added products, combined with our focus on growing markets, with consistent investment in our
operating capacity ensures that we remain competitive.
Product substitution
Sustainability considerations and changes in consumer preferences affect the demand for packaging
products. Factors such as the weight of packaging materials, increased use of recycled materials, electronic
substitution of paper products, increasing demand for certified and labelled goods and specific material
qualities all impact on the demand for the products Mondi produces.
Our ability to meet changes in consumer demand depends on our capacity to correctly anticipate such
changes and develop new products on a sustainable, competitive and cost effective basis. Our focus for
growth is on products enjoying positive substitution dynamics and growing regional markets. We work with
our customers in developing new markets and new products. Our broad range of converting products
provides some protection from the effects of substitution between paper and plastic based packaging
products.
Selling price variability
Our selling prices are determined by changes in capacity and by demand for our products, which are, in turn,
influenced by macroeconomic conditions, consumer spending preferences and inventory levels maintained by
our customers. Changes in prices differ between products and geographic regions and the timing and
magnitude of such changes have varied significantly over time and are unpredictable.
Our strategic focus is on higher growth markets and products where we enjoy a competitive advantage
through innovation, proximity or a production cost advantage. We continue to invest in our low-cost, high
quality production assets to ensure we maintain our competitive cost position. Our high levels of vertical
integration reduce our exposure to price volatility of our key input costs. Our financial policies and structures
are designed taking the inherent price volatility of the markets in which we operate into consideration.
Country risk
We have production operations across more than 30 countries, a number of which are in jurisdictions where
the political, economic and legal systems are less predictable than in countries with more developed
institutional structures. Political or economic upheaval, inflation, changes in laws, nationalisation or
expropriation of assets may have a material effect on our operations in those countries.
We actively monitor all countries and environments in which we operate and have established limits on
exposure to any particular geographic environment. We engage in regular formal and informal interaction with
the authorities to ensure we remain abreast of any new development. New investments are subject to
rigorous strategic and commercial evaluation. Our geographic diversity and decentralised management
structure, utilising local resources in countries in which we operate, reduces our exposure to any specific
jurisdiction.
We have around 11% of our capital employed in Russia and a limited presence in the Ukraine. The US,
European Union and a number of other countries imposed economic sanctions and other measures on
persons and corporate entities in Russia and the Ukraine. Possible additional sanctions and/or other
measures on Russia could have a material adverse effect on our business. To date, the measures imposed
have had no material impact on our operations.
Fibre supply
Wood, pulp and paper for recycling comprise approximately a third of our input costs. We have access to our
own sources of wood in Russia and South Africa and purchase wood, pulp and paper for recycling to meet our
needs in the balance of our operations. Wood prices and availability may be adversely affected by reduced
quantities of available wood supply that meet our standards for chain-of-custody certified or controlled wood,
and initiatives to promote the use of wood as a renewable energy source.
We are committed to acquiring fibre from sustainable, responsible sources and avoiding the use of any
controversial or illegal supply. The sustainable management of our forestry operations is key in managing our
overall environmental impact, helping to preserve ecosystems and resilient landscapes. We have built strong
forestry management resources in Russia and South Africa to actively monitor and manage our wood
resources in those countries. We maintain 100% FSC certification of our forests in Russia and South Africa.
We have multiple suppliers for each of our mills and actively pursue longer term agreements with strategic
suppliers of wood, pulp and paper for recycling. We work in collaboration with private and public sectors to
address challenges in meeting the global demand for sustainable, responsible fibre.
Energy and related input costs
Energy and related input costs comprise approximately a third of our variable costs. Mondi is a significant
consumer of electricity and both purchases electricity from external suppliers and generates it internally. To
the extent that we don't generate electricity from biomass and by-products of our production processes, we
are dependent on external suppliers for raw materials such as gas, oil and coal.
We monitor our electricity usage levels, emission levels and use of renewable energy. Most of our larger
operations have high levels of electricity self-sufficiency. We focus on improving the efficiency of our
operations and have invested in our operations to improve our energy profile and increase electrical self-
sufficiency, while reducing ongoing operating costs and emission levels. To the extent that we generate
electricity surplus to our own requirements, we may sell such surplus externally. We also generate revenue
from the sale of green energy credits in certain of our operations, the prices of which are determined in the
open market.
Environmental impact
We operate in a high-impact sector and need to manage the associated risks and responsibilities. Our
operations are water, carbon and energy intensive; consume materials such as fibre, polymers, metals and
chemicals; and generate emissions in the air, water and land. We are the custodian of more than two million
hectares of forested land. We are subject to a wide range of international, national, state and local
environmental laws and regulations as well as the requirements of our customers.
We ensure that we are complying with all applicable environmental, health and safety requirements where we
operate. Our own policies and procedures, at or above local policy requirements, are embedded in all our
operations. We focus on a clean production philosophy to address the impact from emissions, discharge and
waste. We focus on increasing the energy efficiency of our operations and using biomass-based fuels,
reducing our use of fossil-based energy sources. We emphasise the responsible management of forests and
associated ecosystems, protecting high conservation value areas.
Employee and contractor safety
We operate large facilities, often in remote locations. Accidents/incidents cause injury to our employees or
contractors, property damage, lost production time and harm to our reputation.
We have a zero harm policy. We continually monitor incidents and close calls and actively transfer learnings
across our operations. We apply an externally accredited safety management system and conduct regular
audits of our operations to ensure our facilities remain fit-for-purpose.
Reputational risk
Non-compliance with the legal and governance requirements in any of the jurisdictions in which we operate
could expose us to significant risk if not actively managed. These include laws relating to the environment,
exports, price controls, taxation and labour.
We operate a comprehensive training and compliance programme, supported by self-certification and
reporting. We also operate a confidential reporting hotline, Speakout, enabling employees, customers,
suppliers, managers and other stakeholders to raise concerns about conduct that may be contrary to our
values.
Financial risks
Our trading and financing activities expose the Group to financial risks that, if left unmanaged, could adversely
impact our financial position. These risks relate to the currencies in which we conduct our activities, interest
rate and liquidity risks and exposure to customer credit risk.
Our approach to financial risk management is described in notes 29 and 30 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, the most significant risks and the Group's related management and mitigating actions are set out
above. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are
described in the condensed financial statements.
Mondi's geographical spread, product diversity and large customer base mitigate potential risks of customer or
supplier liquidity issues. Ongoing initiatives by management in implementing profit improvement initiatives
which include ongoing investment in its operations, 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 11 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 EUR456 million of undrawn
committed debt facilities as at 31 December 2014 which should provide sufficient liquidity in the medium term.
The Group's debt facilities have maturity dates of between 1 and 11 years, with a weighted average maturity of 4 years.
The Group's forecasts and projections, taking account of reasonably possible changes in trading performance,
including an assessment of the current macroeconomic environment 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 2015 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 are satisfied that the Group remains solvent
and has adequate liquidity in order to meet its obligations and continue in operational existence for the
foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparing this
report.
Contact details
Mondi Group
David Hathorn +27 11 994 5418
Andrew King +27 11 994 5415
Lora Rossler +27 83 627 0292
FTI Consulting
Richard Mountain +44 7909 684 466
Sue I Ong +44 20 3727 1340
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 08:30 (UK) and 10:30 (SA).
The conference call dial-in numbers are:
South Africa 0800 200 648 (toll-free)
UK 0808 162 4061 (toll-free)
Europe 00800 246 78 700 (toll-free)
Alternate +27 11 535 3600
An online audio cast facility will be available via: www.mondigroup.com/FYResults14.
The presentation will be available online via the above website address an hour before the audio cast
commences. Questions can be submitted via the dial-in conference call or by e-mail via the audio cast.
Should you have any issues on the day with accessing the dial-in conference call, please call +27 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 24 February 2015.
Directors' responsibility statement
These financial statements have been prepared under the supervision of the Group chief financial officer,
Andrew King CA (SA), 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 directors confirm that to the best of their knowledge:
- the condensed combined and consolidated financial statements of the Group has been prepared in
accordance with International Financial Reporting Standards and in particular with International
Accounting Standard 34, 'Interim Financial Reporting';
- the full year results announcement includes a fair review of the significant events during the year
ended 31 December 2014 and a description of the principal risks and uncertainties;
- there have been no significant individual related party transactions during the year; and
- there have been no significant changes in the Group's related party relationships from that reported in
the half-yearly results for the six months ended 30 June 2014.
The Group's condensed combined and consolidated financial statements, and related notes, were approved
by the Boards and authorised for issue on 23 February 2015 and were signed on their behalf by:
David Hathorn Andrew King
Director Director
23 February 2015
Audited financial information
The condensed combined and consolidated financial statements and notes 1 to 19 for the year ended
31 December 2014 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 2014
2014 2013
Before Special After Before Special After
special items special special items special
EUR million Notes items (note 4) items items (note 4) items
Group revenue 6,402 - 6,402 6,476 - 6,476
Materials, energy and consumables used (3,314) - (3,314) (3,391) - (3,391)
Variable selling expenses (499) - (499) (523) - (523)
Gross margin 2,589 - 2,589 2,562 - 2,562
Maintenance and other indirect expenses (283) - (283) (278) - (278)
Personnel costs (946) (29) (975) (940) (17) (957)
Other net operating expenses (234) (4) (238) (276) (10) (286)
Depreciation, amortisation and impairments (359) (6) (365) (369) (67) (436)
Operating profit 767 (39) 728 699 (94) 605
Non-operating special items 4 - - - - 7 7
Net profit from associates 1 - 1 2 - 2
Total profit from operations and associates 768 (39) 729 701 (87) 614
Net finance costs 6 (97) (13) (110) (115) - (115)
Investment income 3 - 3 3 - 3
Foreign currency losses - - - (1) - (1)
Finance costs (100) (13) (113) (117) - (117)
Profit before tax 671 (52) 619 586 (87) 499
Tax charge 7 (126) 4 (122) (98) 13 (85)
Profit for the year 545 (48) 497 488 (74) 414
Attributable to:
Non-controlling interests 26 26 28 28
Shareholders 519 471 460 386
Earnings per share (EPS) for profit attributable to
shareholders
Basic EPS (EUR cents) 8 97.4 79.8
Diluted EPS (EUR cents) 8 97.1 79.6
Basic underlying EPS (EUR cents) 8 107.3 95.0
Diluted underlying EPS (EUR cents) 8 107.0 94.8
Basic headline EPS (EUR cents) 8 99.5 91.3
Diluted headline EPS (EUR cents) 8 99.2 91.1
Condensed combined and consolidated statement of comprehensive income
for the year ended 31 December 2014
2014 2013
Tax
Before tax (expense)/ Net of tax Before tax Net of tax
EUR million amount benefit amount amount Tax expense amount
Profit for the year 497 414
Other comprehensive (expense)/income
Items that may subsequently be
reclassified to the combined and
consolidated income statement:
Fair value gains/(losses) on cash flow
hedges 2 (1) 1 (2) - (2)
Gains on available-for-sale investments 1 - 1 2 - 2
Exchange differences on translation of
foreign operations (193) - (193) (233) - (233)
Share of other comprehensive expense of
associates - - - (1) - (1)
Items that will not subsequently be
reclassified to the combined and
consolidated income statement:
Remeasurements on retirement benefits
plans: (44) 9 (35) 19 (6) 13
Return on plan assets 11 4
Actuarial gains/(losses) arising from
changes in demographic assumptions 2 (4)
Actuarial (losses)/gains arising from
changes in financial assumptions (62) 17
Actuarial gains arising from experience
adjustments 3 4
Asset ceiling movement 2 (2)
Other comprehensive (expense)/income
for the year (234) 8 (226) (215) (6) (221)
Other comprehensive (expense)/income
attributable to:
Non-controlling interests 2 - 2 (11) - (11)
Shareholders (236) 8 (228) (204) (6) (210)
Total comprehensive income for the year 271 193
Total comprehensive income attributable to:
Non-controlling interests 28 17
Shareholders 243 176
Condensed combined and consolidated statement of financial position
as at 31 December 2014
EUR million Notes 2014 2013
Intangible assets 658 675
Property, plant and equipment 3,432 3,428
Forestry assets 10 235 233
Other non-current assets 42 38
Total non-current assets 4,367 4,374
Inventories 843 746
Trade and other receivables 966 954
Financial instruments 76 6
Cash and cash equivalents 14b 56 130
Other current assets 40 30
Total current assets 1,981 1,866
Total assets 6,348 6,240
Short-term borrowings 11 (176) (181)
Trade and other payables (998) (989)
Other current liabilities (149) (126)
Total current liabilities (1,323) (1,296)
Medium and long-term borrowings 11 (1,565) (1,571)
Net retirement benefits liability 12 (250) (211)
Deferred tax liabilities (259) (264)
Other non-current liabilities (57) (52)
Total non-current liabilities (2,131) (2,098)
Total liabilities (3,454) (3,394)
Net assets 2,894 2,846
Equity
Share capital and stated capital 542 542
Retained earnings and other reserves 2,086 2,049
Total attributable to shareholders 2,628 2,591
Non-controlling interests in equity 266 255
Total equity 2,894 2,846
The Group's condensed combined and consolidated financial statements, and related notes, were approved
by the Boards and authorised for issue on 23 February 2015 and were signed on their behalf by:
David Hathorn Andrew King
Director Director
Mondi Limited company registration number: 1967/013038/06
Mondi plc company registered number: 6209386
Condensed combined and consolidated statement of changes in equity
for the year ended 31 December 2014
Equity
attributable to Non-controlling Total
EUR million shareholders interests equity
At 1 January 2013 2,572 301 2,873
Total comprehensive income/(expense) for the year 176 17 193
Dividends paid (138) (60) (198)
Purchases of treasury shares (30) - (30)
Other 11 (3) 8
At 31 December 2013 2,591 255 2,846
Total comprehensive income/(expense) for the year 243 28 271
Dividends paid (193) (16) (209)
Purchases of treasury shares (22) - (22)
Other 9 (1) 8
At 31 December 2014 2,628 266 2,894
Equity attributable to shareholders
EUR million 2014 2013
Combined share capital and stated capital 542 542
Treasury shares (24) (24)
Retained earnings 2,497 2,233
Cumulative translation adjustment reserve (569) (374)
Post-retirement benefits reserve (92) (57)
Share-based payment reserve 19 18
Cash flow hedge reserve (1) (2)
Merger reserve 259 259
Other sundry reserves (3) (4)
Total 2,628 2,591
Condensed combined and consolidated statement of cash flows
for the year ended 31 December 2014
EUR million Notes 2014 2013
Cash flows from operating activities
Cash generated from operations 14a 1,033 1,036
Dividends from associates 2 1
Income tax paid (106) (126)
Net cash generated from operating activities 929 911
Cash flows from investing activities
Investment in property, plant and equipment (562) (405)
Investment in intangible assets (8) (12)
Investment in forestry assets 10 (37) (41)
Acquisition of subsidiaries, net of cash and cash equivalents 13 (72) -
Other investing activities 36 45
Net cash used in investing activities (643) (413)
Cash flows from financing activities
Proceeds from medium and long-term borrowings 14c 354 107
Repayment of medium and long-term borrowings 14c - (117)
Repayment of short-term borrowings 14c (375) (77)
Interest paid (125) (124)
Dividends paid to shareholders 9 (193) (138)
Dividends paid to non-controlling interests (13) (60)
Purchases of treasury shares (22) (30)
Other financing activities 34 28
Net cash used in financing activities (340) (411)
Net (decrease)/increase in cash and cash equivalents (54) 87
Cash and cash equivalents at beginning of year 64 (37)
Cash movement in the year 14c (54) 87
Effects of changes in foreign exchange rates 14c (1) 14
Cash and cash equivalents at end of year 14b 9 64
Notes to the condensed combined and consolidated financial statements
for the year ended 31 December 2014
1 Basis of preparation
The Group has two separate legal parent entities, Mondi Limited and Mondi plc, which operate under a dual
listed company (DLC) structure. The substance of the DLC structure is such that Mondi Limited and its
subsidiaries, and Mondi plc and its subsidiaries, operate together as a single economic entity through a
sharing agreement, with neither parent entity assuming a dominant role. Accordingly, Mondi Limited and
Mondi plc are reported on a combined and consolidated basis as a single reporting entity.
The Group's condensed combined and consolidated financial statements and notes 1 to 19 have been
prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) and the South African Institute of Chartered Accountants (SAICA)
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council and contain the information required
by IAS 34, 'Interim Financial Reporting'. There are no differences for the Group in applying IFRS as issued by
the IASB and IFRS as adopted by the European Union (EU) and therefore the Group also complies with
Article 4 of the EU IAS Regulation.
The condensed combined and consolidated financial statements have been prepared on a going concern
basis as discussed in the Group overview 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 2014 or 2013 but is derived from those accounts. Statutory accounts for 2013 have been
delivered to the Registrar of Companies, and those for 2014 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 on the Integrated report and financial statements 2014 as well as the condensed combined
and consolidated financial statements are available for inspection at the Mondi Limited and Mondi plc
registered offices.
These condensed combined and consolidated financial statements have been prepared on the historical cost
basis, except for the fair valuing of financial instruments and forestry assets.
2 Accounting policies
The same accounting policies, methods of computation and presentation have been followed in the
preparation of the condensed combined and consolidated financial statements as were applied in the
preparation of the Group's annual financial statements for the year ended 31 December 2013.
3 Operating segments
Reorganisation of business segments
During the year, the Group refined its organisational structure, resulting in several changes to segmental
reporting. The most significant of these changes were the:
- transfer of the release liner business from Fibre Packaging to Consumer Packaging to take advantage of
identified synergies in customer relations, innovation and the global footprint of these businesses; and
- transfer of the 66,000 tonne per annum kraft paper machine at the Ruzomberok mill from Uncoated Fine
Paper to Packaging Paper.
All comparative segmental information has been restated. The reorganisation had no impact on the overall
Group result.
Year ended 31 December 2014
Europe & International
Packaging Fibre Consumer Uncoated South Africa Corporate & Intersegment Segments
EUR million, unless otherwise stated Paper Packaging Packaging Fine Paper Division other elimination total
Segment revenue 2,043 1,852 1,379 1,240 596 - (708) 6,402
Internal revenue (559) (41) (5) (6) (97) - 708 -
External revenue 1,484 1,811 1,374 1,234 499 - - 6,402
EBITDA 443 166 158 238 153 (32) - 1,126
Depreciation, amortisation and
impairments (101) (64) (62) (90) (41) (1) - (359)
Operating profit/(loss) from
operations before special items 342 102 96 148 112 (33) - 767
Special items (6) (16) (17) - - (13) - (52)
Operating segment assets 1,961 1,165 1,185 1,089 743 4 (166) 5,981
Operating net segment assets 1,588 875 1,021 922 626 2 - 5,034
Additions to non-current non-
financial assets 279 104 109 125 68 - - 685
Capital expenditure cash
payments 259 77 80 117 29 - - 562
Operating margin (%) 16.7 5.5 7.0 11.9 18.8 - - 12.0
Return on capital employed (%) 23.7 13.4 10.4 16.1 21.9 - - 17.2
Average number of employees
(thousands) 5.0 7.3 4.6 6.5 1.6 0.1 - 25.1
Year ended 31 December 2013 (restated)
Europe & International
Packaging Fibre Consumer Uncoated South Africa Corporate & Intersegment Segments
EUR million, unless otherwise stated Paper Packaging Packaging Fine Paper Division other elimination total
Segment revenue 2,073 1,690 1,414 1,335 624 - (660) 6,476
Internal revenue (506) (43) (4) (6) (101) - 660 -
External revenue 1,567 1,647 1,410 1,329 523 - - 6,476
EBITDA 408 146 143 266 135 (30) - 1,068
Depreciation, amortisation and
impairments (100) (60) (64) (102) (42) (1) - (369)
Operating profit/(loss) from
operations before special items 308 86 79 164 93 (31) - 699
Special items - (3) (13) (60) (11) - - (87)
Operating segment assets 1,905 1,001 1,121 1,270 731 2 (140) 5,890
Operating net segment assets 1,543 771 964 1,099 622 1 - 5,000
Additions to non-current non-
financial assets 165 66 65 85 93 - - 474
Capital expenditure cash
payments 141 71 61 80 52 - - 405
Operating margin (%) 14.9 5.1 5.6 12.3 14.9 - - 10.8
Return on capital employed (%) 21.7 11.8 8.7 16.0 16.0 - - 15.3
Average number of employees
(thousands) 5.0 6.7 4.6 7.1 1.8 - - 25.2
Reconciliation of operating profit before special items
EUR million 2014 2013
Operating profit before special items 767 699
Special items (see note 4) (52) (87)
Net profit from associates 1 2
Net finance costs (excluding financing special item) (97) (115)
Group profit before tax 619 499
Reconciliation of total profit from operations and associates to EBITDA
EUR million 2014 2013
Total profit from operations and associates 729 614
Special items (see note 4) (excluding financing special item) 39 87
Depreciation, amortisation and impairments 359 369
Net profit from associates (1) (2)
EBITDA 1,126 1,068
Reconciliation of operating segment assets
(Restated)
2014 2013
Net Net
Segment segment Segment segment
EUR million assets assets assets assets
Segments total 5,981 5,034 5,890 5,000
Unallocated:
Investments in associates 5 5 6 6
Deferred tax assets/(liabilities) 10 (249) 4 (260)
Other non-operating assets/(liabilities) 224 (283) 207 (281)
Group capital employed 6,220 4,507 6,107 4,465
Financial instruments/(net debt) 128 (1,613) 133 (1,619)
Total assets/equity 6,348 2,894 6,240 2,846
External revenue by product type
(Restated)
EUR million 2014 2013
Products
Fibre packaging products 1,776 1,617
Packaging paper products 1,435 1,482
Consumer packaging products 1,385 1,422
Uncoated fine paper 1,185 1,284
Pulp 240 269
Newsprint 146 177
Other 235 225
Group total 6,402 6,476
External revenue by External revenue by
location of production location of customer
EUR million 2014 2013 2014 2013
Revenue
Africa
South Africa 596 623 419 432
Rest of Africa 10 11 216 231
Africa total 606 634 635 663
Western Europe
Austria 960 958 153 161
Germany 931 993 966 1,003
United Kingdom 34 48 236 262
Rest of western Europe 664 720 1,331 1,390
Western Europe total 2,589 2,719 2,686 2,816
Emerging Europe
Poland 873 877 484 450
Rest of emerging Europe 1,144 1,168 857 893
Emerging Europe total 2,017 2,045 1,341 1,343
Russia 685 741 559 608
North America 437 274 515 349
South America - - 61 57
Asia and Australia 68 63 605 640
Group total 6,402 6,476 6,402 6,476
4 Special items
EUR million 2014 2013
Operating special items
Asset impairments (6) (67)
Restructuring and closure costs:
Personnel costs relating to restructuring (29) (17)
Restructuring and closure costs excluding related personnel costs (9) (10)
Reversal of provision for transaction costs attributable to Nordenia acquisition 4 -
Transaction costs for US acquisition (2) -
Gain on settlement of 2007 legal case 3 -
Total operating special items (39) (94)
Non-operating special item
Gain on sale of land - 7
Financing special item
Net charge on early redemption of EUR280 million Eurobond (13) -
Total special items before tax and non-controlling interests (52) (87)
Tax (see note 7) 4 13
Total special items attributable to shareholders (48) (74)
Operating special items
Restructuring and closure costs and related asset impairments during the year comprise:
- closure of one of the two speciality kraft paper machines in Finland with a capacity of 30,000 tonnes
per annum. Restructuring costs of EUR5 million and related impairment of assets of EUR1 million were
recognised in Packaging Paper;
- restructuring of certain operations in the Extrusion Coatings segment of Fibre Packaging giving rise to
restructuring costs of EUR7 million;
- restructuring following the acquisition of the bags business from Graphic Packaging in the US,
including the closure of the New Philadelphia operation. Restructuring costs of EUR10 million were
recognised in Fibre Packaging;
- relocation of the Consumer Packaging head office and restructuring activities in its operations across
Europe. Restructuring costs of EUR16 million and related asset impairments of EUR5 million were
recognised.
Transaction costs of EUR2 million for the acquisition of the bags and kraft paper business from Graphic
Packaging in the US were incurred.
A provision of EUR4 million in respect of transaction costs for the 2012 Nordenia acquisition was released.
A gain of EUR3 million was recognised in the Corrugated Packaging segment of Fibre Packaging for the
settlement of a 2007 legal case.
Financing special item
On 15 July 2014, the Group redeemed the 9.75% EUR280 million Eurobond assumed as part of the acquisition of
Nordenia in 2012. The net charge on redemption of EUR13 million was recognised.
5 Write-down of inventories to net realisable value
EUR million 2014 2013
Write-down of inventories to net realisable value (24) (21)
Aggregate reversal of previous write-down of inventories 16 12
6 Net finance costs
Net finance costs and related foreign exchange losses are presented below:
EUR million 2014 2013
Investment income
Interest on bank deposits, loan receivables and other 3 3
Foreign currency losses
Foreign currency losses - (1)
Finance costs
Interest expense
Interest on bank overdrafts and loans (94) (108)
Net interest expense on net retirement benefits liability (11) (11)
Total interest expense (105) (119)
Less: interest capitalised 5 2
Total finance costs before special item (100) (117)
Financing special item (see note 4) (13) -
Total finance costs after special item (113) (117)
Net finance costs (110) (115)
The weighted average interest rate applicable to capitalised interest on general borrowings for the year ended
31 December 2014 is 8.36% (2013: 5.34%) and is related to investments in Poland, Russia & Czech Republic
(2013: related to investments in Austria and South Africa).
7 Taxation
The Group's effective rate of tax before special items for the year ended 31 December 2014, calculated on
profit before tax before special items and including net profit from associates, is 19% (2013: 17%).
EUR million 2014 2013
UK corporation tax at 21.5% (2013: 23.25%) 1 1
SA corporation tax at 28% (2013: 28%) 30 21
Overseas tax 86 105
Current tax 117 127
Deferred tax in respect of the current period 23 (1)
Deferred tax in respect of prior period over provision (14) (28)
Total tax charge before special items 126 98
Current tax on special items - (5)
Deferred tax on special items (4) (8)
Total tax credit on special items (see note 4) (4) (13)
Total tax charge 122 85
8 Earnings per share
EUR cents per share 2014 2013
Profit for the year attributable to shareholders
Basic EPS 97.4 79.8
Diluted EPS 97.1 79.6
Underlying earnings for the year
Basic underlying EPS 107.3 95.0
Diluted underlying EPS 107.0 94.8
Headline earnings for the year
Basic headline EPS 99.5 91.3
Diluted headline EPS 99.2 91.1
The calculation of basic and diluted EPS, basic and diluted underlying EPS and basic and diluted headline
EPS is based on the following data:
Earnings
EUR million 2014 2013
Profit for the year attributable to shareholders 471 386
Special items (see note 4) 52 87
Related tax (see note 4) (4) (13)
Underlying earnings for the year 519 460
Special items not excluded from headline earnings (46) (27)
Profit on disposal of property, plant and equipment and intangible assets - (2)
Impairments not included in special items 4 4
Related tax 4 7
Headline earnings for the year 481 442
Weighted average number of
shares
million 2014 2013
Basic number of ordinary shares outstanding 483.6 484
Effect of dilutive potential ordinary shares 1.3 1
Diluted number of ordinary shares outstanding 484.9 485
9 Dividends
An interim dividend for the year ended 31 December 2014 of 189.93650 rand cents/13.23 euro
cents per share was paid on 16 September 2014 to all Mondi Limited and Mondi plc ordinary
shareholders on the relevant registers on 22 August 2014.
A proposed final dividend for the year ended 31 December 2014 of 28.77 euro cents per ordinary
share will be paid on 21 May 2015 to those shareholders on the register of Mondi plc on 24 April
2015. An equivalent South African rand final dividend will be paid on 21 May 2015 to shareholders
on the register of Mondi Limited on 24 April 2015. 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 13 May 2015.
Dividend timetable
The proposed final dividend for the year ended 31 December 2014 of 28.77 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 17 April 2015 17 April 2015
London Stock Exchange Not applicable 22 April 2015
Shares commence trading ex-dividend
JSE Limited 20 April 2015 20 April 2015
London Stock Exchange Not applicable 23 April 2015
Record date
JSE Limited 24 April 2015 24 April 2015
London Stock Exchange Not applicable 24 April 2015
Last date for receipt of Dividend Reinvestment Plan (DRIP) elections by Central
Securities Depository Participants 30 April 2015 30 April 2015
Last date for DRIP elections to UK Registrar and South African Transfer Secretaries
by shareholders of Mondi Limited and Mondi plc 4 May 2015 26 April 2015*
Payment Date
South African Register 21 May 2015 21 May 2015
UK Register Not applicable 21 May 2015
DRIP purchase settlement dates
(subject to the purchase of shares
in the open market) 29 May 2015 26 May 2015**
Currency conversion date
ZAR/euro 24 February 2015 24 February 2015
Euro/sterling Not applicable 5 May 2015
*4 May 2015 for Mondi plc South African branch register shareholders
**29 May 2015 for Mondi plc South African branch register shareholders
Share certificates on the South African registers of Mondi Limited and Mondi plc may not be
dematerialised or rematerialised between 20 April 2015 and 27 April 2015, both dates inclusive, nor
may transfers between the UK and South African registers of Mondi plc take place between
15 April 2015 and 27 April 2015, 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 24 February 2015.
Dividends paid to the shareholders of Mondi Limited and Mondi plc are presented on a combined basis.
EUR cents per share 2014 2013
Final dividend paid (in respect of prior year) 26.45 19.10
Interim dividend paid 13.23 9.55
Final dividend proposed for the year ended 31 December 28.77 26.45
EUR million 2014 2013
Final dividend paid (in respect of prior year) 129 92
Interim dividend paid 64 46
Final dividend proposed for the year ended 31 December 139 128
Declared by Group companies to non-controlling interests 16 60
10 Forestry assets
EUR million 2014 2013
At 1 January 233 311
Capitalised expenditure 35 39
Acquisition of assets 2 2
Fair value gains 34 17
Disposal of assets (13) (9)
Felling costs (54) (55)
Reclassified to assets held for sale (11) -
Currency movements 9 (72)
At 31 December 235 233
Comprising:
Mature 148 146
Immature 87 87
Total forestry assets 235 233
The fair value of forestry assets is a level 3 measure in terms of the fair value measurement hierarchy (see
note 30b) and this category is consistent with prior years. The fair value of forestry assets is calculated on the
basis of future expected net cash flows arising on the Group's owned forestry assets, discounted based on a
pre tax yield on long-term bonds over the last five years.
11 Borrowings
2014 2013
EUR million Current Non-current Total Current Non-current Total
Secured
Bank loans and overdrafts 2 2 4 4 2 6
Obligations under finance leases 1 1 2 1 6 7
Total secured 3 3 6 5 8 13
Unsecured
Bank loans and overdrafts 170 553 723 175 261 436
Bonds - 995 995 - 1,289 1,289
Bonds - 1,340 1,340
Call option derivative - (51) (51)
Other loans 3 14 17 1 13 14
Total unsecured 173 1,562 1,735 176 1,563 1,739
Total borrowings 176 1,565 1,741 181 1,571 1,752
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
2014/EUR million borrowings borrowings borrowings value Fair value
Euro 199 999 - 1,198 1,309
Pounds sterling 355 - - 355 355
South African rand 58 - 7 65 65
Polish zloty 48 - - 48 48
Russian rouble 11 - - 11 11
Turkish lira 28 - - 28 28
Other currencies 24 6 6 36 36
Carrying value 723 1,005 13 1,741
Fair value 723 1,116 13 1,852
Non-interest
Floating rate Fixed rate bearing Total carrying
2013/EUR million borrowings borrowings borrowings value Fair value
Euro 208 1,299 - 1,507 1,591
South African rand 79 - 6 85 85
Polish zloty 64 - - 64 64
Russian rouble 30 - - 30 30
Turkish lira 33 - - 33 33
Other currencies 25 2 6 33 33
Carrying value 439 1,301 12 1,752
Fair value 439 1,385 12 1,836
The fair values of the EUR500 million 2017 Eurobond and EUR500 million 2020 Eurobond are estimated from
reference to the last price quoted in the secondary market. 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.
In addition to the above, the Group swaps euro and sterling debt into other currencies through the foreign
exchange market. The currencies swapped into/(out of) and the amounts as at 31 December were as follows:
EUR million 2014 2013
Long-dated contracts with tenures of more than 12 months
Russian rouble - 27
Short-dated contracts with tenures of less than 12 months
Russian rouble 141 179
Czech koruna 179 81
US dollar 67 80
Pounds sterling (322) 62
Swedish krona 50 34
Polish zloty 198 94
Other 41 57
Total swapped 354 614
Financing facilities
Group liquidity is provided through a range of committed debt facilities. The principal loan arrangements in
place include the following:
EUR million, unless otherwise stated Maturity Interest rate % 2014 2013
Financing facilities
Syndicated Revolving Credit Facility Jul 2019 EURIBOR/LIBOR + margin 750 750
EUR500 million Eurobond Apr 2017 5.75% 500 500
EUR500 million Eurobond Sep 2020 3.375% 500 500
EUR280 million Eurobond Jul 2014 9.75% - 280
Export Credit Agency Facility Jun 2020 EURIBOR + margin 92 111
European Investment Bank Facility Jun 2025 EURIBOR + margin 100 100
Other Various Various 192 246
Total committed facilities 2,134 2,487
Drawn (1,678) (1,695)
Total committed facilities available 456 792
Both the EUR500 million Eurobonds contain 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
Moody's Investors Service (Baa2, outlook stable) and Standard & Poor's (BBB-, outlook positive).
12 Retirement benefits
All assumptions related to the Group's defined benefit schemes and post-retirement medical plan liabilities
were re-assessed individually for the year ended 31 December 2013. The net retirement benefit liability
increased by EUR38 million mainly due to changes in assumptions. The assets backing the defined benefit
scheme liabilities reflect their market values as at 31 December 2014. Any movements in the assumptions
have been recognised as a remeasurement in the condensed combined and consolidated statement of
comprehensive income.
13 Business combinations
To 31 December 2014
Acquisition of bags and kraft paper business of Graphic Packaging International Inc
On 30 June 2014, Mondi acquired the bags and kraft paper business of Graphic Packaging International Inc
(Graphic), a wholly-owned subsidiary of Graphic Packaging Holding Company, for a total consideration of
US$101 million (EUR74 million) on a debt and cash-free basis. The production base comprised an integrated
kraft paper mill, with production capacity of 135,000 tonnes per annum, and nine bags plants. The
combination of Graphic with Mondi's existing network created a leading bags player in North America and
expanded the Group's growing global footprint in this market.
Graphic's revenue for the year ended 31 December 2014 was EUR312 million with a loss after tax of EUR7 million.
Graphic's revenue of EUR159 million and a loss after tax of EUR9 million since date of acquisition have been
included in the combined and consolidated income statement.
Details of the net assets acquired, as adjusted from book to fair value, are as follows:
EUR million Book value Revaluation Fair value
Net assets acquired:
Intangible assets - 1 1
Property, plant and equipment 77 (50) 27
Inventories 59 (7) 52
Trade and other receivables 28 (1) 27
Total assets 164 (57) 107
Trade and other payables (30) (1) (31)
Net retirement benefits liability (1) - (1)
Deferred tax liabilities - (1) (1)
Total liabilities (excluding debt) (31) (2) (33)
Short-term borrowings (30) - (30)
Net assets acquired 103 (59) 44
Transaction costs expensed 2
Net cash paid per combined and consolidated statement of cash flows 46
Other acquisitions
On 31 July 2014, the acquisition of a consumer packaging plant in Poland from Printpack Inc (Printpack), for
US$23 million (EUR17 million) on a debt and cash-free basis, was completed, adding to the Group's production
capacity in that region.
Printpack's revenue for the year ended 31 December 2014 was EUR12 million with a loss after tax of EUR4 million.
Since the acquisition date, revenue of EUR4 million and a loss of EUR1 million was contributed by Printpack and
included in the combined and consolidated income statement.
On 31 October 2014, the industrial bags business was acquired from Inn_Flex S.r.L. & David Tomasin
(Intercell), for US$12 million (EUR9 million) on a debt and cash-free basis, in line with the Group's growth
strategy.
Intercell's revenue for the year ended 31 December 2014 was EUR11 million with a loss after tax of EUR1 million.
Since the acquisition date, revenue of EUR2 million and a loss of EURnil was contributed by Intercell and included in
the combined and consolidated income statement.
Details of the net assets acquired, as adjusted from book to fair value, are as follows:
EUR million Book value Revaluation Fair value
Net assets acquired:
Property, plant and equipment 20 2 22
Inventories 3 - 3
Trade and other receivables 5 - 5
Cash and cash equivalents 6 - 6
Total assets 34 2 36
Trade and other payables (1) (2) (3)
Total liabilities (excluding debt) (1) (2) (3)
Medium and long-term borrowings (2) - (2)
Net assets acquired 31 - 31
Transaction costs expensed 1
Cash acquired net of overdrafts (6)
Net cash paid per combined and consolidated statement of cash flows 26
EUR million Net assets Net cash paid
Printpack 23 17
Intercell 8 9
Other acquisitions total 31 26
The fair value accounting of these acquisitions is provisional in nature. The nature of these businesses is such
that further adjustments to the carrying values of acquired assets and/or liabilities are possible as the detail of
the acquired businesses is evaluated post acquisition. If necessary, any adjustments will be made within 12
months of the acquisition dates.
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.
To 31 December 2013
There were no significant acquisitions during the year ended 31 December 2013.
14 Consolidated cash flow analysis
(a) Reconciliation of profit before tax to cash generated from operations
EUR million 2014 2013
Profit before tax 619 499
Depreciation and amortisation 355 365
Impairment of property, plant and equipment and intangible assets (not included in special items) 4 4
Share-based payments 10 11
Non-cash effect of special items 15 60
Net finance costs (including financing special item) 110 115
Net profit from associates (1) (2)
Decrease in provisions and net retirement benefits (10) (25)
Increase in inventories (71) (7)
Increase in operating receivables (2) (14)
Decrease in operating payables (14) (6)
Fair value gains on forestry assets (34) (17)
Felling costs 54 55
Profit on disposal of property, plant and equipment and intangible assets - (2)
Other adjustments (2) -
Cash generated from operations 1,033 1,036
(b) Cash and cash equivalents
EUR million 2014 2013
Cash and cash equivalents per combined and consolidated statement of financial position 56 130
Bank overdrafts included in short-term borrowings (47) (66)
Net cash and cash equivalents per combined and consolidated statement of cash flows 9 64
The fair value of cash and cash equivalents approximate their carrying values presented.
(c) Movement in net debt
The composition of net debt has been revised to take into account the Group's debt related derivative
instruments. Comparative information has been restated accordingly.
The Group's net debt position is as follows:
Debt related
Cash and Debt due Debt due Current derivative
cash within one after one financial asset financial Total net
EUR million equivalents year year investments instruments debt
At 1 January 2013 (Restated) (37) (188) (1,648) 1 (3) (1,875)
Cash flow 87 77 10 - - 174
Movement in unamortised loan costs - - 18 - - 18
Net movement in derivative financial
instruments - - - - 5 5
Reclassification - (34) 34 - - -
Currency movements 14 30 15 - - 59
At 31 December 2013 (Restated) 64 (115) (1,571) 1 2 (1,619)
Cash flow (54) 375 (354) (1) - (34)
Business combinations (see note 13) - (30) (2) - - (32)
Movement in unamortised loan costs - - 16 - - 16
Net movement in derivative financial
instruments - - - - 70 70
Reclassification - (388) 388 - - -
Currency movements (1) 29 (42) - - (14)
At 31 December 2014 9 (129) (1,565) - 72 (1,613)
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.
The following table shows the amounts available to draw down on the Group's committed loan facilities:
EUR million 2014 2013
Expiry date
Within one year 59 42
One to two years - -
Two to five years 397 750
Total credit available 456 792
15 Capital commitments
(Restated)
EUR million 2014 2013
Contracted for but not provided 344 330
Approved, not yet contracted for 1,009 889
Total capital commitments 1,353 1,219
These capital commitments relate to the following categories of non-current non-financial assets:
(Restated)
EUR million 2014 2013
Intangible assets 26 19
Property, plant and equipment 1,327 1,200
Total capital commitments 1,353 1,219
The expected maturity of these capital commitments is:
(Restated)
EUR million 2014 2013
Within one year 570 509
One to two years 451 412
Two to five years 332 298
Total capital commitments 1,353 1,219
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 from existing cash resources and borrowing facilities.
16 Contingent liabilities
Contingent liabilities comprise aggregate amounts as at 31 December 2014 of EUR26 million (2013: EUR25 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.
17 Fair value disclosures
Financial instruments that are measured in the combined and consolidated statement of financial position at
fair value or where the fair value of financial instruments have been disclosed in notes to the combined and
consolidated financial statements require disclosure of fair value measurements by level based on the
following fair value measurement hierarchy:
- level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
- level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and
- level 3 – inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
The Group does not hold any financial instruments categorised as level 3 financial instruments. The only
assets measured at fair value on level 3 of the fair value measurement hierarchy are the Group's forestry
assets as set out in note 10.
There have also been no transfers of assets or liabilities between levels of the fair value hierarchy during the
year.
The fair values of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) are determined using standard valuation techniques. These valuation techniques maximise the
use of observable market data where available and rely as little as possible on Group specific estimates.
Specific valuation methodologies used to value financial instruments include:
- the fair values of interest rate swaps and foreign exchange contracts are calculated as the present
value of expected future cash flows based on observable yield curves and exchange rates;
- the Group's commodity price derivatives are fair valued by independent third parties, who in turn
calculate the fair values as the present value of expected future cash flows based on observable
market data; and
- other techniques, including discounted cash flow analysis, are used to determine the fair values of
other financial instruments.
Except as detailed in the following table, the directors consider that the carrying values of financial assets and
financial liabilities recorded at amortised cost in the combined and consolidated financial statements are
approximately equal to their fair values.
Carrying amount Fair value
EUR million 2014 2013 2014 2013
Financial liabilities
Borrowings 1,741 1,752 1,852 1,836
18 Related party transactions
The Group and its subsidiaries, in the ordinary course of business, enter into various sale, purchase and
service transactions with equity accounted investees 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. Transactions between Mondi Limited, Mondi plc
and their respective subsidiaries, which are related parties, have been eliminated on consolidation.
There have been no significant changes to the related parties as disclosed in note 36 of the Group's annual
financial statements for the year ended 31 December 2013.
19 Events occurring after 31 December 2014
With the exception of the proposed final dividend for 2014, included in note 9, there have been no material
reportable events since 31 December 2014.
Production statistics
(Restated)(1)
2014 2013
Packaging Paper
Containerboard Tonnes 2,160,485 2,138,714
Kraft paper Tonnes 1,130,220 1,010,885
Softwood pulp Tonnes 2,085,191 2,007,959
Internal consumption Tonnes 1,970,491 1,859,597
Market pulp Tonnes 114,700 148,362
Fibre Packaging
Corrugated board and boxes Mm2 1,343 1,344
Industrial bags M units 4,446 4,032
Extrusion coatings Mm2 1,401 1,472
Consumer Packaging
Consumer packaging Mm2 6,397 6,387
Uncoated Fine Paper
Uncoated fine paper Tonnes 1,361,243 1,381,141
Newsprint Tonnes 201,998 207,228
Hardwood pulp Tonnes 1,127,594 1,087,615
Internal consumption Tonnes 1,041,104 1,013,790
Market pulp Tonnes 86,490 73,825
South Africa Division
Containerboard Tonnes 252,526 254,714
Uncoated fine paper Tonnes 258,083 258,751
Hardwood pulp Tonnes 648,635 645,611
Internal consumption Tonnes 332,085 331,928
Market pulp Tonnes 316,550 313,683
Softwood pulp – internal consumption Tonnes 138,640 166,101
Newsprint Tonnes 117,087 145,498
Note:
1 Restated to reflect the change in the Group's segmental reporting. Refer to note 3 of the condensed combined and consolidated financial statements.
Exchange rates
Average Closing
versus euro 2014 2013 2014 2013
South African rand 14.42 12.83 14.04 14.57
Czech koruna 27.53 25.99 27.74 27.43
Polish zloty 4.18 4.20 4.27 4.15
Pounds sterling 0.81 0.85 0.78 0.83
Russian rouble 50.73 42.32 72.34 45.32
Turkish lira 2.91 2.53 2.83 2.96
US dollar 1.33 1.33 1.21 1.38
Forward-looking statements
This document includes forward-looking statements. All statements other than statements of historical facts
included herein, including, without limitation, those regarding Mondi's financial position, business strategy,
market growth and developments, expectations of growth and profitability and plans and objectives of
management for future operations, are forward-looking statements. Forward-looking statements are
sometimes identified by the use of forward-looking terminology such as "believe", "expects", "may", "will",
"could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes",
"positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology. Such
forward-looking statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Mondi, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements and other statements contained in this document regarding
matters that are not historical facts involve predictions and are based on numerous assumptions regarding
Mondi's present and future business strategies and the environment in which Mondi will operate in the future.
These forward-looking statements speak only as of the date on which they are made.
No assurance can be given that such future results will be achieved; various factors could cause actual future
results, performance or events to differ materially from those described in these statements. Such factors
include in particular but without any limitation: (1) operating factors, such as continued success of
manufacturing activities and the achievement of efficiencies therein, continued success of product
development plans and targets, changes in the degree of protection created by Mondi's patents and other
intellectual property rights and the availability of capital on acceptable terms; (2) industry conditions, such as
strength of product demand, intensity of competition, prevailing and future global market prices for Mondi's
products and raw materials and the pricing pressures thereto, financial condition of the customers, suppliers
and the competitors of Mondi and potential introduction of competing products and technologies by
competitors; and (3) general economic conditions, such as rates of economic growth in Mondi's principal
geographical markets or fluctuations of exchange rates and interest rates.
Mondi expressly disclaims a) any warranty or liability as to accuracy or completeness of the information
provided herein; and b) any obligation or undertaking to review or confirm analysts' expectations or estimates
or to update any forward-looking statements to reflect any change in Mondi's expectations or any events that
occur or circumstances that arise after the date of making any forward-looking statements, unless required to
do so by applicable law or any regulatory body applicable to Mondi, including the JSE Limited and the LSE.
Any reference to future financial performance included in this announcement has not been reviewed or
reported on by the Group's auditors.
Editors' notes
We are Mondi: In touch every day
Mondi is an international packaging and paper Group, employing around 25,000 people across more than
30 countries. Our key operations are located in central Europe, Russia, North America and South Africa. We
offer over 100 packaging and paper products, customised into more than 100,000 different solutions for
customers and end consumers. In 2014, Mondi had revenues of EUR6.4 billion and a return on capital employed
of 17.2%.
The Mondi Group is fully integrated across the packaging and paper value chain - from managing forests and
producing pulp, paper and compound plastics, to developing effective and innovative industrial and consumer
packaging solutions. Our innovative technologies and products can be found in a variety of applications
including hygiene components, stand-up pouches, super-strong cement bags, clever retail boxes and office
paper. Our key customers are in industries such as automotive; building and construction; chemicals; food
and beverage; home and personal care; medical and pharmaceutical; packaging and paper converting; pet
care; and office and professional printing.
Mondi has a dual listed company structure, with a primary listing on the JSE Limited for Mondi Limited under
the ticker code MND and a premium listing on the London Stock Exchange for Mondi plc, under the ticker
code MNDI.
For us, acting sustainably makes good business sense. We don't just talk about sustainability; we make it
part of the way we work every day. We have been included in the FTSE4Good Index Series since 2008 and
the JSE's Socially Responsible Investment (SRI) Index since 2007.
24 February 2015
Sponsor in South Africa: UBS South Africa Proprietary Limited
Date: 24/02/2015 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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