MONDI PLC - Half-yearly results for the six months ended 30 June 2018

Release Date: 03/08/2018 08:00
Code(s): MNP MND
 
Wrap Text
Half-yearly results for the six months ended 30 June 2018

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)
LEI: 213800LOZA69QFDC9N34

JSE share code: MNP        ISIN: GB00B1CRLC47
LSE share code: MNDI

3 August 2018

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 Guidance and Transparency and Listing Rules of the United Kingdom Listing Authority.

This announcement contains inside information.

Half-yearly results for the six months ended 30 June 2018

Highlights
     -   Strong financial performance
               - Underlying EBITDA of EUR852 million, up 17%, with margin of 22.9%
               - Profit before tax of EUR490 million, up 6%
               - Basic underlying earnings of 89.2 euro cents per share, up 26%
               - Cash generated from operations up 18%
               - Return on capital employed 21.3%
    -    Excellent performance from Packaging Paper
    -    Good progress on major capital investment projects
    -    Integration of recent acquisitions on track, expanding the Group's containerboard portfolio and network of
         industrial bag plants in high growth regions
    -    Interim dividend declared of 21.45 euro cents per share

Financial Summary
                                                                                                        (Restated) 1   (Restated) 1
                                                                                           Six months     Six months     Six months
                                                                                                ended          ended          ended
                                                                                              30 June        30 June    31 December
EUR million, except for percentages and per share measures                                       2018           2017           2017                     
Group revenue                                                                                   3,727          3,582          3,514                               
Underlying EBITDA 2                                                                               852            730            752                                                               
Underlying operating profit 2                                                                     630            503            526
Operating profit                                                                                  530            508            460
Profit before tax                                                                                 490            461            423                                    
Per share measures                                                                                                              
Basic underlying earnings per share 2 (euro cents)                                               89.2           71.0           77.9
Basic earnings per share (euro cents)                                                            72.5           72.1           65.8                                                  
Interim dividend per share (euro cents)                                                         21.45          19.10                                            
Cash generated from operations                                                                    722            612            751                    
Net debt 2                                                                                      2,450          1,679          1,532                                                                                                                             
Underlying EBITDA margin 2                                                                      22.9%          20.4%          21.4%                                                                                                      
Group return on capital employed (ROCE) 2                                                       21.3%          18.5%          19.3%
                              
Notes:
1  The Group has early adopted the new 'Leases' accounting standard, IFRS 16. Consequently, the audited annual financial statements 
   for the year ended 31 December 2017 and the reviewed interim financial statements for the six months ended 30 June 2017 have been 
   restated. Further details are disclosed in notes 2a and 2b of the condensed combined and consolidated financial statements
2  The Group presents certain measures of financial performance, position or cash flows that are not defined or specified according 
   to International Financial Reporting Standards (IFRS). These measures, referred to as Alternative Performance Measures (APMs), 
   are defined at the end of this document and where relevant, reconciled to IFRS measures in the notes to the condensed combined and 
   consolidated financial statements. APMs are prepared on a consistent basis for all periods presented in this report


Peter Oswald, Mondi Group Chief Executive Officer, said:
"Mondi delivered a strong performance in the first half of 2018, with underlying EBITDA of EUR852 million, up 17% in the
period. We benefited from good demand across our packaging businesses as well as higher average selling prices, while
remaining focused on initiatives to drive performance and mitigate inflationary pressures on our cost base. We saw
a strong operational performance across the pulp and paper businesses, with the exception of the extended shut at
our Richards Bay mill (South Africa).

We continue to make good progress in securing future growth and ensuring the ongoing cost competitiveness of our
operations through the delivery of our major capital expenditure programme of over EUR750 million, which is expected to
contribute to earnings from 2019. The modernisation of our kraft paper facility in Steti (Czech Republic) is on track to
start-up in late 2018 and work to upgrade the pulp mill at our Ruzomberok mill (Slovakia) has commenced, while we await
final permits to proceed with our investment in a new 300,000 tonne kraft top white machine at the same site. We continue to
make good progress on smaller capital expenditure projects at a number of our packaging operations, while integration
of the recently completed acquisitions is progressing according to plan.

The trading environment remains positive going into the second half of the year, with pricing in key fibre based product
segments remaining supportive. The second half of the year will be impacted by the usual seasonal downturn in Uncoated 
Fine Paper. We also expect continued pressure on the cost base across the Group, mitigated by our ongoing proactive and 
comprehensive cost reduction programmes. 

Mondi is uniquely positioned to develop sustainable fibre and plastic based packaging solutions. With our robust 
business model, focus on leveraging key industry trends of sustainability, e-commerce and convenience, and culture of 
driving performance, we remain confident of sustaining our track record of delivering value accretive growth."

Group performance review
Underlying EBITDA for the half-year ended 30 June 2018 of EUR852 million was up 17% compared to the first half of 2017. Stable
volumes and higher prices more than offset higher costs, negative currency effects and the impact of maintenance shuts. The fibre
based packaging value chain, comprising Packaging Paper and Fibre Packaging, was the main contributor to the improved
performance, driven by a combination of higher prices and strong operational performance.

Revenue was up 4% on a like-for-like basis, supported by higher average selling prices across all our businesses and volume
growth in Containerboard and Industrial Bags. Input costs were higher than the comparable prior year period with the notable
exception of paper for recycling costs, with average European benchmark prices down 27% and 30% on the comparable prior year
period and the second half of 2017, respectively. While there remains uncertainty, caused mainly by Chinese import policies, we
are seeing signs of stabilisation in European paper for recycling markets, with benchmark prices holding steady during the second
quarter and July. Wood costs were generally higher in local currency terms in northern and central Europe during the first
half of the year. Energy costs were higher than the comparable prior year period driven by increasing commodity input prices.
Cash fixed costs were higher as a result of inflationary cost pressures across the Group and the impact of mill maintenance shuts.
Depreciation and amortisation charges were marginally lower during the period.

In June 2018, we completed the acquisition of Powerflute, an integrated pulp and paper mill in Kuopio (Finland) with an annual
production capacity of 285,000 tonnes of high-performance semi-chemical fluting, for a total consideration of EUR363 million on a debt
and cash-free basis. We are pleased with the progress made to date with the integration of this business, which further broadens
our containerboard product portfolio and geographic reach.

In the first half of 2018, we completed a longer than anticipated annual maintenance shut at our Richards Bay mill, a maintenance
shut at our Syktyvkar mill (Russia) and smaller shuts at some of our other mills. The balance of our maintenance shuts are
scheduled for the second half of the year. Based on prevailing market prices, the full year impact on underlying EBITDA of the
Group's maintenance shuts is estimated at around EUR115 million (2017: EUR95 million) of which the first half effect was around
EUR55 million (2017: EUR40 million).

Currency movements had a net negative impact on underlying EBITDA versus the comparable prior year period. The weaker US
dollar had a net negative impact mainly on dollar denominated sales of a number of the Group's globally traded products, while the
weaker Russian rouble had a net negative impact on translation of the profits of the domestically focused Uncoated Fine Paper
business.

Basic underlying earnings were up 26% to 89.2 euro cents per share, with strong improvement in underlying operating profit and
lower net finance charges partly offset by an increase in the effective tax rate from 19% in the prior year period to 22% in the
current period. After taking the effect of special items into account, basic earnings of 72.5 euro cents per share were up 1% on the
comparable prior year period.

An interim dividend of 21.45 euro cents per share has been declared.

Packaging Paper
                                                                                                     (Restated)     (Restated)
                                                                                     Six months      Six months     Six months
                                                                                          ended           ended          ended
                                                                                        30 June         30 June    31 December
EUR million                                                                                2018            2017           2017
Segment revenue                                                                           1,311           1,141          1,151
Underlying EBITDA                                                                           430             301            338
Underlying operating profit                                                                 351             226            258
Special items (charge)/income                                                              (55)               5            (2)
Capital expenditure                                                                         172             122            161
Net segment assets                                                                        2,568           2,087          2,169
Underlying EBITDA margin                                                                  32.8%           26.4%          29.4%
ROCE                                                                                      31.3%           22.8%          25.6%

Underlying EBITDA of EUR430 million was up 43% on the comparable prior year period with higher selling prices, higher sales
volumes and a better mix more than offsetting higher costs and negative currency effects.

Containerboard markets remain robust, with good demand and limited capacity additions continuing to support pricing. Selling
prices were up significantly on the prior year period and up sequentially, following price increases implemented through the course
of 2017 and during the first quarter of 2018. Average benchmark European selling prices for unbleached kraftliner were up 24% on
the comparable prior year period and up 7% on the second half of 2017, while average benchmark European selling prices for
recycled containerboard were up 18% on the first half of 2017, and up 6% sequentially. By contrast, benchmark white top kraftliner and 
semi-chemical fluting prices were up a more modest 8% to 11% on the comparable year and 5% to 6% up on the preceding six month
period. Margins in containerboard were further supported by the significant decline in paper for recycling prices. On an annual
basis, the Group consumes around 1.3 million tonnes of paper for recycling in the production of containerboard.

In response to sustained good demand, a strong order position and higher input costs, we have announced further price increases
of EUR40/tonne for selected virgin containerboard grades to take effect across European markets from September 2018.

From January 2018, we implemented sack kraft paper price increases in the range of 8% to 9% compared to average 2017 price
levels across all geographies. Markets remain very tight, with good demand, particularly in our export markets, coupled with
constrained supply. At the end of the second quarter, further price increases in the range of 5% to 7% were implemented in
Europe, where most of our volumes are integrated. In overseas markets, price increases are being implemented for the limited
volumes that are not fixed by annual contracts.

We continue to see good demand across our range of speciality kraft papers in Europe, supported by the drive to replace plastic
carrier bags with paper-based alternatives. Selling prices were, on average, higher than the comparable prior year period and
higher than the second half of 2017.

With the exception of paper for recycling, costs were above the comparable prior year period, mitigated by our ongoing cost
reduction programmes. We saw higher wood and energy costs, inflationary increases on cash fixed costs and a higher depreciation
charge during the period. The business benefited from higher average green energy prices in Poland. In the first six months of the
year, we completed a planned maintenance shut at our Syktyvkar mill and an extended shut at our facility in Richards Bay. During
the second half of the year, planned maintenance shuts are scheduled at Swiecie (Poland) and the majority of our kraft paper mills,
including an extended shut at Steti as we progress to commission the modernisation of this operation.

In May 2018, we decided to stop production of in-line silicone coated products at our facility in Steti. The Group had rebuilt one of
its paper machines at the mill with an in-line coating extension, an innovative process technology. Despite the progress achieved,
the improvements did not outweigh the increased technical challenges and process complexity. Production of speciality kraft paper
at the machine will continue, while we will revert to off-line coating at our release liner operations to continue to serve our
customers. A related net special item charge of EUR55 million has been recorded in the period.

In June 2018, we completed the sale of a flat sack kraft paper mill in Pine Bluff, Arkansas (US) with 130,000 tonnes of annual
production capacity.

Fibre Packaging
                                                                                                     (Restated)     (Restated)
                                                                                      Six months     Six months     Six months
                                                                                           ended          ended          ended
                                                                                         30 June        30 June    31 December
EUR million                                                                                 2018           2017           2017
Segment revenue                                                                            1,067          1,031          1,024
Underlying EBITDA                                                                            105            101             93
Underlying operating profit                                                                   65             61             51
Capital expenditure                                                                           53             47             68
Net segment assets                                                                         1,146          1,065          1,077
Underlying EBITDA margin                                                                    9.8%           9.8%           9.1%
ROCE                                                                                       11.2%          13.0%          11.2%

Underlying EBITDA of EUR105 million was up 4% on the comparable prior year period, with higher average selling prices more than
offsetting higher costs and negative currency effects.

Corrugated Packaging made very good progress in implementing price increases required to compensate for the significantly
higher paper input costs and negative currency effects, while it continues to benefit from growing e-commerce activity. Sales
volumes were stable on a strong comparable prior year period. The business remains focused on continuous improvements to
reduce conversion costs and further enhance its product offering, quality and service to customers.

Industrial Bags volumes were up 3.6% on the comparable prior year period, with strong growth in Iberia, emerging Europe, Middle
East and West Africa more than offsetting weaker US volumes. As previously reported, annual contracts for 2018 were finalised
during the first quarter, with price increases implemented that largely reflected the full impact on the cost base of the paper price
increases that took effect from the beginning of the year. Further price increases are being negotiated following recent increases in
paper input costs, albeit the ability to influence pricing in the short term is limited due to the prevalence of annual contracts. The
business benefited from good cost management and restructuring measures to optimise the plant network in Europe and North
America that were implemented during 2017. Industrial Bags, together with the other Fibre Packaging businesses, is working closely with 
Consumer Packaging to develop paper based consumer packaging solutions.

In June 2018, we acquired an industrial bags plant in Giza near Cairo (Egypt), for a total consideration of EGP510 million 
(EUR25 million) on a debt and cash-free basis. This acquisition bolsters our leading position in the fast growing Middle East industrial 
bags market and will allow us to better serve our customers in the region. We have also agreed to acquire a control position in 
another plant near Cairo which is expected to complete in the third quarter.

Consumer Packaging
                                                                                                      (Restated)     (Restated)
                                                                                      Six months      Six months     Six months
                                                                                           ended           ended          ended
                                                                                         30 June         30 June    31 December
EUR million                                                                                 2018            2017           2017
Segment revenue                                                                              822             839            807
Underlying EBITDA                                                                            103             109            113
Underlying operating profit                                                                   63              64             70
Special items charge                                                                        (27)               —           (49)
Capital expenditure                                                                           38              36             55
Net segment assets                                                                         1,295           1,327          1,326
Underlying EBITDA margin                                                                   12.5%           13.0%          14.0%
ROCE                                                                                       10.4%            9.8%          10.4%

Underlying EBITDA of EUR103 million was down on the comparable prior year period, as steady underlying performance was offset
by negative currency and one-off effects.

The business benefited from good growth in selected value-added segments in technical films and consumer goods packaging,
and the programme launched in the second half of 2017 to restructure the cost base. Short-term performance was held back by
declining volumes in personal care components and certain weaker plants in the portfolio.

In continuing to drive performance by aligning capacity to current market requirements, we are progressing with the restructuring of
our UK operations, including the closure of our plant in Scunthorpe in the second half of the year. A related net special item charge
of EUR24 million was recorded in the period.

We continue to drive various commercial excellence and innovation initiatives, aimed at improving our product and service offering
to customers. As previously disclosed, our commitment to work collaboratively with other stakeholders led us to join the Ellen
MacArthur Foundation New Plastics Economy Initiative in 2017. We are actively working with our customers, suppliers and
recycling companies to find innovative solutions that improve the sustainability of packaging. We believe flexible packaging, which
typically uses 70% less plastic than rigid based alternatives, can contribute towards a global sustainable plastics system, based on
circular economy principles. Furthermore, we continue to seek opportunities to leverage our customer relationships and product
know-how across our packaging businesses, being in a unique position as a leading producer of both plastics and paper based
solutions.

Uncoated Fine Paper                                                    
                                                                                                    (Restated)     (Restated)
                                                                                    Six months      Six months     Six months     
                                                                                         ended           ended          ended
                                                                                       30 June         30 June    31 December
EUR million                                                                               2018            2017           2017
Segment revenue                                                                            941             947            885
Underlying EBITDA                                                                          230             240            224
Underlying operating profit                                                                168             174            163
Special item charge                                                                       (18)               —           (15)
Capital expenditure                                                                         84              49             73
Net segment assets                                                                       1,523           1,508          1,515
Underlying EBITDA margin                                                                 24.4%           25.3%          25.3%
ROCE                                                                                     26.5%           27.1%          26.6%
                                                    
Our Uncoated Fine Paper business continued to perform strongly, with underlying EBITDA of EUR230 million and ROCE of 26.5%.
Underlying EBITDA was down 4% on the comparable prior year period as higher average selling prices were offset by higher
costs, the impact of the extended shut at Richards Bay, a lower fair value gain and negative currency effects, mainly from a weaker
Russian rouble and US dollar compared to the prior year period.

Uncoated fine paper sales volumes were higher than the prior year period despite the ongoing structural decline in overall market
demand in mature markets, as we continue to benefit from our superior cost positioning and emerging market exposure. Average
benchmark European uncoated fine paper selling prices were up 6% on the comparable prior year period and 3% up sequentially,
following the implementation of price increases through the course of 2017 and at the end of March 2018. As a result of continued
cost pressures, we implemented price increases in July of between 2% and 6% for our range of uncoated fine papers in
Europe with a further price increase of up to 6% announced for implementation in September.

Variable input costs increased due to higher wood, chemical and energy costs, while fixed costs were higher due to domestic
inflationary cost pressures and maintenance shuts; partly compensated by our ongoing cost reduction initiatives. The forestry fair
value gain of EUR13 million was down EUR7 million on the prior year period.

Due to the declining margins on unintegrated paper production following the rapid rise in hardwood pulp input costs, we will cease
production at one of our uncoated fine paper machines at Merebank (South Africa) during the second half, which was operating at
70,000 tonnes per annum production capacity, leading to a net special item charge of EUR18 million in the period.

To enhance the security of wood supply to our Richards Bay mill and improve cost competitiveness, we acquired around 
11,000 hectares of well-located forest plantations in KwaZulu-Natal (South Africa) in May 2018 for ZAR408 million (EUR27 million) 
on a debt and cash-free basis.

During the period we completed a planned maintenance shut at our Syktyvkar mill and extended shut at our facility in Richards
Bay. Maintenance shuts at our Ruzomberok and Neusiedler (Austria) mills are scheduled for the second half of the year. In line
with previous years, the second half is also expected to be impacted by a seasonal slowdown in demand during the European
summer months.

Tax
The underlying effective tax rate in the first half was 22%, above the comparable prior year period and in line with our expectation
as previously disclosed. The increase in tax rate is partly due to the full utilisation in 2017 of key tax incentives in Poland. In
addition, in the prior year we recognised deferred tax assets related to previously unrecognised tax losses.

Special items
The net special item charge in the period of EUR100 million before tax (2017: net gain EUR5 million) comprises the following by business:
  -    Packaging Paper
           - Discontinuation of in-line silicone coating production at Steti. Restructuring costs of EUR8 million and related
             impairment of assets of EUR47 million were recognised.
  -    Consumer Packaging
           - Restructuring of operations, primarily in the United Kingdom. Restructuring costs of EUR9 million and impairment of
             assets of EUR15 million were recognised.
           - Following the discontinuation of in-line silicone coating production at Steti, restructuring costs of EUR3 million and
             related impairment of EUR2 million, offset by reversal of impairment of assets of EUR2 million, were recognised.
  -    Uncoated Fine Paper
           - Closure of an uncoated fine paper machine at Merebank. Restructuring costs of EUR13 million and related
             impairment of assets of EUR5 million were recognised.

Further detail is provided in note 5 of the condensed combined and consolidated financial statements.

Cash flow
Cash generated from operations of EUR722 million (2017: EUR612 million), reflects the continued strong cash generating capacity of the
Group.

Working capital at 30 June 2018 was 14.3% as a percentage of annualised revenue (30 June 2017: 13.4%), higher than the year
end level of 12.7%. This reflects the usual seasonal uptick in the first half of the year compounded by increasing average selling
prices, giving rise to a net cash outflow of EUR148 million in the period (2017: EUR141 million).

During the period we completed the acquisition of Powerflute, an industrial bags plant in Egypt and forest plantations in South
Africa for a total consideration, including net debt assumed of EUR415 million. Further significant cash outflows from financing activities
included the payment of the 2017 final ordinary dividend (EUR207 million) and the 2017 special dividend in May 2018 (EUR484 million).

Capital investments
During the first half of the year we invested EUR347 million (2017: EUR254 million) in our property, plant and equipment. Our recently
completed capital projects made good contributions during the period.

We are making good progress with our major capital expenditure programme, totalling over EUR750 million and securing future
growth:
    -    The modernisation of our Steti mill to replace the recovery boiler, rebuild the fibre lines and debottleneck the existing
         packaging paper machines is on track to start-up towards the end of the year.
    -    Our investment in a new 300,000 tonne per annum kraft top white machine and related pulp mill upgrade at our
         Ruzomberok mill is progressing well. Work on the pulp mill upgrade is ongoing, with start-up expected in late 2019. The
         investment in the paper machine remains subject to obtaining necessary permitting with start-up expected in 2020.
    -    As part of our plan to maintain Syktyvkar's competitiveness and increase saleable production by around 100,000 tonnes
         per annum in the medium term, we are investing to debottleneck production and avoid unplanned shutdowns.
    -    We continue to invest in our Fibre Packaging and Consumer Packaging businesses to enhance our product and service
         offering.

Our major capital projects in Czech Republic, Slovakia and Russia will increase our current saleable pulp and paper production by
around 9% when in full operation.

Given the approved project pipeline and in the absence of any other major investments, our capital expenditure is expected to be
in line with our previous estimate of EUR700-800 million per annum in 2018 and 2019 as expenditure on these large projects
accelerates.

Treasury and borrowings
Net debt at 30 June 2018 was EUR2,450 million, up from EUR1,532 million at 31 December 2017, mainly as a consequence of the
payment of the 2017 special dividend at the end of May (EUR484 million) and the completion of acquisitions totalling EUR415 million in
the period. At 30 June 2018, the net debt to 12-month trailing underlying EBITDA ratio was 1.5 times.

In April 2018, we issued a 1.625% EUR600 million Eurobond with an 8-year tenor under our Euro Medium Term Note Programme,
thereby extending the Group's maturity profile and maintaining our strong liquidity. At 30 June 2018, we had EUR2.5 billion of
committed borrowing facilities of which EUR429 million were undrawn. The weighted average maturity of our committed debt facilities
is approximately 4.6 years.

Finance charges of EUR40 million were below those of the comparable prior year period (EUR47 million). Average net debt was up on the
comparable prior year period, while the average effective interest rate for the period was lower at 4.3% (six months ended
30 June 2017: 5.5%), primarily due to the redemption of the 5.75% EUR500 million Eurobond on maturity in April 2017.

During the period, Standard & Poor's upgraded the Group's credit rating to BBB+ (stable outlook) from BBB, while Moody's
Investors Service maintained their Baa1 (stable outlook) credit rating.

Dividend
The Boards' aim is to offer shareholders long-term dividend growth within a targeted dividend cover range of two to three times
underlying earnings over the business cycle.

An interim ordinary dividend of 21.45 euro cents per share has been declared by the directors and will be paid on
14 September 2018 to those shareholders on the register of Mondi plc on 24 August 2018. An equivalent South African rand
interim ordinary dividend will be paid on 14 September 2018 to shareholders on the register of Mondi Limited on 24 August 2018.
The dividend will be paid from distributable reserves of Mondi Limited and Mondi plc.

Outlook
The trading environment remains positive going into the second half of the year, with pricing in key fibre based product segments
remaining supportive. The second half of the year will be impacted by the usual seasonal downturn in Uncoated Fine Paper. We also 
expect continued pressure on the cost base across the Group, mitigated by our ongoing proactive and comprehensive cost reduction programmes. 

Mondi is uniquely positioned to develop sustainable fibre and plastic based packaging solutions. With our robust business model, 
focus on leveraging key industry trends of sustainability, e-commerce and convenience, and culture of driving performance, 
we remain confident of sustaining our track record of delivering value accretive growth.

Reorganisation of business units
Effective from 1 August 2018, the Group reorganised its business units to achieve improved strategic alignment and operational
coordination across the fibre based packaging value chain. The changes to the Group's business units, and consequently to the
Group's segmental reporting, are as follows:
- Packaging Paper and Fibre Packaging were replaced by a single business unit called Fibre Packaging; and
- there were no changes to the Consumer Packaging or Uncoated Fine Paper business units.

The Group's restated segmental reporting for the six months ended 30 June 2018 and the comparative reporting periods for the six
months ended 30 June 2017 and the year ended 31 December 2017 are disclosed later in this document. The reorganisation has no impact 
on the overall Group result.

Principal risks and uncertainties
The Boards are responsible for the effectiveness of the Group's risk management activities and internal control processes. They
have put procedures in place for identifying, evaluating, and managing the significant risks that the Group faces. In combination
with the audit committee, at the beginning of 2018, the Boards have conducted a robust assessment of the principal risks to which
Mondi is exposed and they are satisfied that the Group has effective systems and controls in place to manage its key risks within
the risk tolerance levels established. There have been no significant changes to the principal risks since 31 December 2017 as
described on pages 34 to 40 of the Group's Integrated report and financial statements 2017.

Risk management is by nature a dynamic and ongoing process. Our approach 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. Our internal control environment is designed to
safeguard the assets of the Group and to provide reasonable assurance that the Group's business objectives will be achieved.

Strategic risks
The industries and geographies in which we operate expose us to specific long-term risks which are accepted by the Boards as a
consequence of the Group's chosen strategy and operating footprint.

While there have been no significant changes in our strategic risk exposure during the year, we continue to monitor recent capacity
announcements, the developments in the process as the UK seeks to exit the European Union, the stability of the Eurozone and
the increasing use of trade tariffs and economic sanctions.

The executive committee and Boards monitor our exposure to these risks and evaluate investment decisions against our overall
exposures so that our strategic capital investments and acquisitions take advantage of the opportunities arising from our deliberate
exposure to such risks.

Our principal strategic risks relate to the following:
    -    Industry productive capacity
    -    Product substitution
    -    Fluctuations and variability in selling prices or gross margins
    -    Country risk

Financial risks
We aim to maintain an appropriate capital structure and to conservatively manage our financial risk exposures in compliance with
all laws and regulations.

Despite ongoing short-term currency volatility and increased scrutiny of the tax affairs of multinational companies, our overall
residual risk exposure remains similar to previous years, reflecting our conservative approach to financial risk management.

Our principal financial risks relate to the following:
    -    Capital structure
    -    Currency risk
    -    Tax risk

Operational risks
A low residual risk tolerance is demonstrated through our focus on operational excellence, investment in our people and
commitment to the responsible use of resources.

Our investments to improve our energy efficiency, engineer out our most significant safety risks, improve operating efficiencies, and
renew our equipment continue to reduce the likelihood of operational risk events. However, the potential impact of any such event
remains unchanged.

Our principal operational risks relate to the following:
    -    Cost and availability of raw materials
    -    Energy security and related input costs
    -    Technical integrity of our operating assets
    -    Environmental impact
    -    Employee and contractor safety
    -    Attraction and retention of key skills and talent

Compliance risks
We have a zero tolerance approach to compliance risks. Our strong culture and values, emphasised in every part of our business
with a focus on integrity, honesty, and transparency, underpins our approach.

Our principal compliance risks relate to the following:
    -    Reputational risk
    -    Information technology risk

Going concern
The directors have reviewed the Group's current financial position, performance expectations for the next twelve months, and the
significant risks which may impact the Group's performance in the near term. These include an evaluation of the current
macroeconomic environment and reasonably possible changes in the Group's trading performance.

The Group's financial position, cash flows, liquidity position and borrowing facilities are described in the financial statements. 
At 30 June 2018, Mondi had EUR429 million of undrawn, committed debt facilities. The Group's debt facilities have maturity dates of
between 1 and 8 years, with a weighted average maturity of 4.6 years.

Based on our evaluation the Boards considered it appropriate to prepare the financial statements on the going concern basis.

Accordingly, the Group continues to adopt the going concern basis in preparing the condensed combined and consolidated
financial statements.

Contact details
Mondi Group
Peter Oswald                                                    +43 1 79013 4000
Andrew King                                                     +44 193 282 6321
Sara Sizer                                                      +43 664 244 9994
Clara Valera                                                    +44 193 282 6357

FTI Consulting
Richard Mountain                                                +44 790 968 4466

Conference call dial-in and webcast details

Please see below details of our dial-in conference call and webcast that will be held at 09:00 (UK) and 10:00 (SA) today.

The conference call dial-in numbers are:

South Africa                                                    0800 998 654 (toll-free)
UK                                                              0800 358 6377 (toll-free)
Europe                                                          0800 005 408 (toll-free)
Other                                                           +44 330 336 9105
                                    
Confirmation Code                                               3862765 or Mondi results presentation

The webcast will be available via www.mondigroup.com/HYResults18.

The presentation will be available to download from the above website an hour before the webcast commences. Questions can be
submitted via the dial-in conference call or via the webcast.

Should you have any issues on the day with accessing the dial-in conference call, please call +44 330 336 9105.

Should you have any issues on the day with accessing the webcast, please e-mail group.communication@mondigroup.com and
you will be contacted immediately.

A video recording of the presentation will be available on Mondi's website during the afternoon of 3 August 2018.

Directors' responsibility statement

The directors confirm that to the best of their knowledge:
    -    the condensed combined and consolidated financial statements of the Group have been prepared in accordance with
         International Financial Reporting Standards and in particular with International Accounting Standard 34, 'Interim Financial
         Reporting';
    -    the half-yearly results announcement includes a fair review of the significant events during the six months ended
         30 June 2018 and a description of the principal risks and uncertainties for the remaining six months of the year ending
         31 December 2018;
    -    there have been no significant individual related party transactions during the first six months of the financial year; and
    -    there have been no significant changes in the Group's related party relationships from that reported in the Integrated
         report and financial statements 2017.

The Group's condensed combined and consolidated financial statements, and related notes, were approved by the Boards and
authorised for issue on 2 August 2018 and were signed on their behalf by:

Peter Oswald                                            Andrew King
Director                                                Director

2 August 2018

Independent review report of PricewaterhouseCoopers LLP to Mondi plc and
PricewaterhouseCoopers Inc. to the shareholders of Mondi Limited

Mondi plc and Mondi Limited operate under a dual listed company structure as a single economic entity. The "Group" consists of
Mondi plc, Mondi Limited and their respective subsidiaries. The Group financial statements combine and consolidate the financial
statements of the Group and include the Group's share of joint arrangements and associates.

PricewaterhouseCoopers LLP is the appointed auditor of Mondi plc, a company incorporated in the United Kingdom in terms of the
United Kingdom Companies Act 2006. PricewaterhouseCoopers Inc. is the appointed auditor of Mondi Limited, a company
incorporated in South Africa in terms of the Companies Act of South Africa. PricewaterhouseCoopers LLP and
PricewaterhouseCoopers Inc. reviewed the interim financial statements of the Group.

For the purpose of this report, the terms 'we' and 'our' denote PricewaterhouseCoopers LLP in relation to UK legal, professional
and regulatory responsibilities and reporting obligations to Mondi plc and PricewaterhouseCoopers Inc. in relation to South African
legal, professional and regulatory responsibilities and reporting obligations to the shareholders of Mondi Limited. When we refer to
PricewaterhouseCoopers LLP or PricewaterhouseCoopers Inc. such reference is to that specific entity to the exclusion of the other.

Report on the interim financial statements

Conclusion of PricewaterhouseCoopers LLP for Mondi plc
We have reviewed Mondi plc and Mondi Limited's condensed combined and consolidated half-yearly financial statements (the
"interim financial statements") in the half-yearly results for the six months ended 30 June 2018. Based on our review, nothing 
has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material 
respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union 
and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Conclusion of PricewaterhouseCoopers Inc. for Mondi Limited
We have reviewed Mondi plc and Mondi Limited's condensed combined and consolidated half-yearly financial statements (the
"interim financial statements") in the half-yearly results for the six months ended 30 June 2018. Based on our review, nothing 
has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all 
material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as issued by the 
International Accounting Standards Board (IASB), the South African Institute of Chartered Accountants (SAICA) Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the South African
Financial Reporting Standards Council and the provisions of the Companies Act of South Africa.

What we have reviewed
The interim financial statements comprise:
    -    the condensed combined and consolidated statement of financial position as at 30 June 2018;
    -    the condensed combined and consolidated income statement and the condensed combined and consolidated statement
         of comprehensive income for the period then ended;
    -    the condensed combined and consolidated statement of cash flows for the period then ended;
    -    the condensed combined and consolidated statement of changes in equity for the period then ended; and
    -    the explanatory notes to the interim financial statements.

The interim financial statements included in the half-yearly results have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the European Union and as issued by the IASB and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the South African
Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation
of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards as adopted by
the European Union and as issued by the IASB.

Responsibilities for the interim financial statements and the review

Responsibilities of the directors of Mondi plc and Mondi Limited
The half-yearly results, including the interim financial statements, are the responsibility of, and have been approved by, the
directors. The directors are responsible for the preparation and presentation of the interim financial statements in accordance with
International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and as issued by the IASB,
the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the
South African Financial Reporting Standards Council and the requirements of the Companies Act of South Africa, and for such
internal control as the directors determine is necessary to enable the preparation of interim financial statements that are free from
material misstatement, whether due to fraud or error.

Our responsibilities
Our responsibility is to express a conclusion on the interim financial statements based on our review.

What a review of interim financial statements involves
PricewaterhouseCoopers LLP conducted their review in accordance with International Standard on Review Engagements (UK and
Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom.

PricewaterhouseCoopers Inc. conducted their review in accordance with International Standard on Review Engagements (ISRE)
2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' as issued by the International
Auditing and Assurance Standards Board. ISRE 2410 requires us to conclude whether anything has come to our attention that
causes us to believe that the interim financial statements are not prepared in all material respects in accordance with the
applicable financial reporting framework. This standard also requires us to comply with relevant ethical requirements. A review of
interim financial statements in accordance with ISRE 2410 is a limited assurance engagement.

A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with either International Standards on Auditing (UK) or International Standards on Auditing and, consequently, does
not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion on these interim financial statements.

As part of our review, we have read the other information contained in the half-yearly results and considered whether it contains
any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Use of the review report of PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP have prepared this review report, including their conclusion, for and only for Mondi plc for the
purpose of the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and
for no other purpose. PricewaterhouseCoopers LLP do not, in giving this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.

PricewaterhouseCoopers LLP                                                         PricewaterhouseCoopers Inc.

Chartered Accountants                                                              Director: JFM Kotzé
London                                                                             Registered Auditor
2 August 2018                                                                      Waterfall
                                                                                   2 August 2018

a)   The maintenance and integrity of the Mondi Group website is the responsibility of the directors; the work carried out by
     the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any
     changes that may have occurred to the interim financial statements since they were initially presented on the website.

b)   Legislation in the United Kingdom and South Africa governing the preparation and dissemination of financial statements
     may differ from legislation in other jurisdictions.

Condensed combined and consolidated income statement
for the six months ended 30 June 2018
                                                                                                                          
                                                                                   Restated 1                        Restated 1
                                        Six months ended 30 June 2018   Six months ended 30 June 2017    Year ended 31 December 2017
                                                    Special                           Special                          Special
                                                      items                             items                            items
EUR million                     Notes Underlying   (Note 5)      Total Underlying    (Note 5)     Total  Underlying   (Note 5)      Total
Group revenue                              3,727          —      3,727      3,582           —     3,582       7,096          —      7,096
Materials, energy and 
consumables used                         (1,766)          —    (1,766)    (1,744)           —   (1,744)     (3,452)          —    (3,452)
Variable selling expenses                  (266)          —      (266)      (275)           —     (275)       (525)          —      (525)
Gross margin                               1,695          —      1,695      1,563           —     1,563       3,119          —      3,119
Maintenance and other indirect  
expenses                                   (160)          —      (160)      (150)           —     (150)       (319)          —      (319)
Personnel costs                            (528)        (8)      (536)      (544)           —     (544)     (1,053)        (9)    (1,062)
Other net operating expenses               (155)       (25)      (180)      (139)           5     (134)       (265)       (14)      (279)
Depreciation, amortisation and 
impairments                                (222)       (67)      (289)      (227)           —     (227)       (453)       (38)      (491)
Operating profit                             630      (100)        530        503           5       508       1,029       (61)        968
Net profit from equity
accounted investees                            —          —         —           —           —         —           1          —          1
Total profit from operations
and equity accounted
investees                                    630      (100)        530        503           5       508       1,030       (61)        969
Net finance costs                   7       (40)          —       (40)       (47)           —      (47)        (85)          —       (85)
Profit before tax                            590      (100)        490        456           5       461         945       (61)        884
Tax (charge)/credit                 8      (132)         19      (113)       (87)           —      (87)       (181)          8      (173)
Profit for the period                        458       (81)        377        369           5       374         764       (53)        711
Attributable to: 
 Non-controlling interests                    26                    26         25                    25          43                    43
 Shareholders                                432                   351        344                   349         721                   668
 
Earnings per share (EPS)
attributable to shareholders
euro cents

Basic EPS                           9                             72.5                             72.1                             137.9
Diluted EPS                         9                             72.4                             72.0                             137.8
Basic underlying EPS                9                             89.2                             71.0                             148.9
Diluted underlying EPS              9                             89.1                             71.0                             148.8
Basic headline EPS                  9                             85.1                             72.5                             145.4
Diluted headline EPS                9                             85.0                             72.4                             145.3

Note:
1 The audited annual financial statements for the year ended 31 December 2017 and the reviewed interim financial statements for the 
  six months ended 30 June 2017 were restated due to a change in accounting policy which has been disclosed in notes 2a and 2b of these 
  condensed combined and consolidated financial statements. The restatements to the comparative information have not been audited.

Condensed combined and consolidated statement of comprehensive income
for the six months ended 30 June 2018
                                                                                                           Restated       Restated
                                                                                          Six months     Six months     Year ended
                                                                                               ended          ended    31 December
EUR million                                                                             30 June 2018   30 June 2017           2017           
Profit for the period                                                                            377            374            711
                        
Items that have been or may subsequently be reclassified to the condensed            
combined and consolidated income statement            
Cash flow hedges                                                                                   —              2             —
Exchange differences on translation of foreign operations                                      (154)           (45)           (71)
Share of other comprehensive expense of equity accounted investees                                 —            (2)            (2)
                        
Items that will not subsequently be reclassified to the condensed combined            
and consolidated income statement            
Remeasurements of retirement benefits plans                                                        4             14              9
Tax effect thereof                                                                                 —            (3)            (1)
Other comprehensive expense for the period                                                     (150)           (34)           (65)
                    
Total comprehensive income for the period                                                        227            340            646
                     
Attributable to:           
 Non-controlling interests                                                                        23             22             41
 Shareholders                                                                                    204            318            605

Condensed combined and consolidated statement of financial position
as at 30 June 2018
                                                                                         Restated        Restated         Restated
                                                                             As at          As at        As at 31            As at
EUR million                                                   Notes   30 June 2018   30 June 2017   December 2017   1 January 2017                           
Property, plant and equipment                                                4,187          3,994           4,128            3,961
Goodwill                                                                       932            696             698              681
Intangible assets                                                              101            124             111              120
Forestry assets                                                  11            321            312             325              316
Other non-current assets                                                        63             62              59               62
Total non-current assets                                                     5,604          5,188           5,321            5,140
Inventories                                                                    921            879             867              850
Trade and other receivables                                                  1,265          1,146           1,106            1,049
Cash and cash equivalents                                       16b             54            104              38              404
Other current assets                                                            35             29              44               41
Total current assets                                                         2,275          2,158           2,055            2,344
Total assets                                                                 7,879          7,346           7,376            7,484
                                                     
Short-term borrowings                                            13          (305)          (351)           (291)            (673)
Trade and other payables                                                   (1,121)        (1,065)         (1,074)          (1,100)
Other current liabilities                                                    (206)          (158)           (184)            (167)
Total current liabilities                                                  (1,632)        (1,574)         (1,549)          (1,940)
Medium and long-term borrowings                                  13        (2,206)        (1,434)         (1,280)          (1,309)
Net retirement benefits liability                                            (227)          (223)           (232)            (240)
Deferred tax liabilities                                                     (241)          (251)           (248)            (260)
Other non-current liabilities                                                 (57)           (70)            (60)             (70)
Total non-current liabilities                                              (2,731)        (1,978)         (1,820)          (1,879)
Total liabilities                                                          (4,363)        (3,552)         (3,369)          (3,819)
                                                      
Net assets                                                                   3,516          3,794           4,007            3,665
 
Equity 
Combined share capital and stated capital                                      542            542             542              542
Retained earnings and other reserves                                         2,646          2,948           3,141            2,820
Total attributable to shareholders                                           3,188          3,490           3,683            3,362
Non-controlling interests in equity                                            328            304             324              303
Total equity                                                                 3,516          3,794           4,007            3,665

The Group's condensed combined and consolidated financial statements, and related notes 1 to 21, were approved by the Boards
and authorised for issue on 2 August 2018 and were signed on their behalf by:

Peter Oswald                                                       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 six months ended 30 June 2018
                                                                               Equity
                                                                      attributable to     Non-controlling            Total
EUR million                                                              shareholders           interests           equity
At 1 January 2017, as previously reported (Audited)                             3,392                 304            3,696
Impact of change in accounting policy                                            (30)                 (1)             (31)
Restated balance at 1 January 2017                                              3,362                 303            3,665
Total comprehensive income for the period (Restated)                              318                  22              340
Dividends                                                                       (180)                (21)            (201)
Purchases of treasury shares                                                     (20)                   —             (20)
Other                                                                              10                   —               10
Restated balance at 30 June 2017                                                3,490                 304            3,794
Total comprehensive income for the period (Restated)                              287                  19              306
Dividends                                                                        (93)                 (1)             (94)
Purchases of treasury shares                                                      (4)                   —              (4)
Other                                                                               3                   2                5
Restated balance at 31 December 2017                                            3,683                 324            4,007
Total comprehensive income for the period                                         204                  23              227
Dividends                                                                       (691)                (17)            (708)
Purchases of treasury shares                                                     (14)                   —             (14)
Other                                                                               6                 (2)                4
At 30 June 2018                                                                 3,188                 328            3,516

Equity attributable to shareholders
                                                                            Restated           Restated           Restated
                                                              As at            As at              As at              As at
                                                            30 June          30 June        31 December          1 January
EUR million                                                    2018             2017               2017               2017
Combined share capital and stated capital                       542              542                542                542
Treasury shares                                                (24)             (26)               (27)               (24)
Retained earnings                                             3,220            3,351              3,568              3,187
Cumulative translation adjustment reserve                     (756)            (580)              (604)              (536)
Post-retirement benefits reserve                               (67)             (64)               (71)               (75)
Other reserves                                                  273              267                275                268
Total                                                         3,188            3,490              3,683              3,362

Condensed combined and consolidated statement of cash flows
for the six months ended 30 June 2018
                                                                                               Restated           Restated
                                                                          Six months         Six months         Year ended
                                                                               ended              ended        31 December
EUR million                                                    Notes    30 June 2018       30 June 2017               2017          
Cash flows from operating activities          
Cash generated from operations                                   16a             722                612              1,363
Dividends received from other investments                                          —                  —                  1
Income tax paid                                                                (110)               (73)              (151)
Net cash generated from operating activities                                     612                539              1,213       
Cash flows from investing activities         
Investment in property, plant and equipment                                    (347)              (254)              (611)
Investment in forestry assets                                                   (28)               (25)               (49)
Acquisition of subsidiaries, net of cash and cash equivalents     15           (383)               (34)               (37)
Other investing activities                                                        15                  2                  3
Net cash used in investing activities                                          (743)              (311)              (694)        
Cash flows from financing activities         
Proceeds from medium and long-term borrowings                                    354                154                 25
Repayment of medium and long-term borrowings                                       —                (8)               (11)
Proceeds from Eurobonds                                                          600                  —                  —
Repayment of Eurobonds                                                             —              (500)              (500)
Net proceeds from/(repayment of) short-term borrowings                             9                104                (4)
Interest paid                                                                   (32)               (59)               (97)
Dividends paid to shareholders                                    10           (691)              (180)              (273)
Dividends paid to non-controlling interests                                     (17)               (21)               (22)
Purchases of treasury shares                                                    (14)               (20)               (24)
Net cash outflow from derivatives                                               (24)               (41)               (47)
Other financing activities                                                       (8)                 —                 (5)
Net cash generated from/(used in) financing activities                           177              (571)              (958)         
Net increase/(decrease) in cash and cash equivalents                              46              (343)              (439)         
Cash and cash equivalents at beginning of period                                (66)                377                377
Cash movement in the period                                      16c              46              (343)              (439)
Effects of changes in foreign exchange rates                     16c               7                (2)                (4)
Cash and cash equivalents at end of period                       16b            (13)                 32               (66)


Notes to the condensed combined and consolidated financial statements
for the six months ended 30 June 2018

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 half-yearly financial statements have been prepared in accordance with
International Financial Reporting Standard IAS 34, 'Interim Financial Reporting'; the South African Institute of Chartered
Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee; Financial Pronouncements as
issued by the Financial Reporting Council; and the requirements of the Companies Act of South Africa 2008. They should be read
in conjunction with the Group's Integrated report and financial statements 2017, prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

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
commentary under the heading 'Going concern'.

The financial information set out above does not constitute statutory accounts as defined by section 434 of the UK Companies Act
2006. A copy of the statutory accounts for the year ended 31 December 2017 has been delivered to the Registrar of Companies.
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.

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.

The preparation of these condensed combined and consolidated financial statements includes the use of estimates and
assumptions. Although the estimates used are based on management's best information about current circumstances and future
events and actions, actual results may differ from these estimates.

In preparing these condensed combined and consolidated financial statements, the significant judgements made by management
in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to
the Group's Integrated report and financial statements 2017, with the exception of changes in estimates that are required in
determining the provision for income taxes for an interim period and the estimates required under the new accounting standards as
described in note 2a.

These financial statements have been prepared under the supervision of the Group Chief Financial Officer, Andrew King CA (SA).

2a Accounting policies
The same accounting policies and alternative performance measures (APMs), methods of computation and presentation have
been followed in the preparation of the condensed combined and consolidated financial statements for the six months ended
30 June 2018 as were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2017,
except as set out below.

The new Standards IFRS 9, 'Financial instruments' and IFRS 15, 'Revenue from contracts with customers' (including amendment),
are effective and have been adopted, together with the early adoption of IFRS 16, 'Leases', for the financial year beginning on 1
January 2018. The accounting policies have been updated to reflect the changes required by the new accounting standards. The
transitional options selected are detailed below.

A number of further amendments to IFRS became effective for the financial period beginning on 1 January 2018, but the Group did
not have to change its accounting policies or make material retrospective adjustments as a result of adopting these new
amendments.

Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual profits or
losses.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's condensed combined and consolidated statement of financial
position when the Group becomes party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss
are recognised immediately in the condensed combined and consolidated income statement.

Cash and cash equivalents (note 16b)
Cash and cash equivalents comprise cash on hand and demand deposits, together with short-term, highly liquid investments of a
maturity of three months or less from the date of acquisition that are readily convertible to a known amount of cash and that are
subject to an insignificant risk of changes in value. Bank overdrafts are shown within short-term borrowings in current liabilities in
the condensed combined and consolidated statement of financial position. Cash and cash equivalents presented in the condensed
combined and consolidated statement of cash flows and in net debt (note 16c) are net of overdrafts.

Trade receivables
Trade receivables are initially recognised at their fair value and are subsequently measured at amortised cost using the effective
interest rate method, less allowance for impairments.

Impairment of trade receivables
A simplified lifetime Expected Credit Loss (ECL) model is used to assess trade receivables for impairment. ECL is the present
value of all cash shortfalls over the expected life of a trade receivable. Expected credit losses are based on historical loss
experience on trade receivables, adjusted to reflect information about current economic conditions and reasonable and
supportable forecasts of future economic conditions. At the date of initial recognition, the credit losses expected to arise over the
lifetime of a trade receivable are recognised as an impairment.

Trade payables
Trade payables are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest rate
method.

Borrowings (note 13)
Interest bearing loans and overdrafts are initially recognised at fair value, net of direct transaction costs. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds, net of transaction costs, and the redemption
value is recognised in the condensed combined and consolidated income statement over the term of the borrowings using the
effective interest rate method.

Borrowing costs (note 7)
Interest on borrowings directly relating to the acquisition, construction or production of qualifying assets is capitalised until such
time as the assets are substantially ready for their intended use or sale. Where funds have been borrowed specifically to finance a
project, the amount capitalised represents the actual borrowing costs incurred. Where the funds used to finance a project form part
of general borrowings, the amount capitalised is calculated using a weighted average of rates applicable to relevant general
borrowings of the Group during the construction period.

All other borrowing costs are recognised in the condensed combined and consolidated income statement in the period in which
they are incurred.

Derivative financial instruments and hedge accounting
The Group enters into forward, option and swap contracts in order to hedge its exposure to foreign exchange, interest rate and
commodity price risks.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and subsequently measured at fair
value in the condensed combined and consolidated statement of financial position within derivative financial instruments, and are
classified as current or non-current depending on the maturity of the derivative.

Changes in the fair value of derivative financial instruments that are not formally designated in hedge relationships are recognised
immediately in the condensed combined and consolidated income statement and are classified within operating profit or net
finance costs, depending on the type of risk to which the derivative relates.

Cash flow hedges
The effective portion of changes in the fair value of derivative financial instruments that are designated as hedges of future cash
flows are recognised directly in other comprehensive income and accumulated in equity. The gain or loss relating to the ineffective
portion is recognised immediately in the condensed combined and consolidated income statement. If the cash flow hedge of a
forecast transaction results in the recognition of a non-financial asset then, at the time the asset is recognised, the associated
gains or losses on the derivative that had previously been recognised in the Group's cash flow hedge reserve in equity are
included in the initial measurement of the asset. For hedges that do not result in the recognition of a non-financial asset, amounts
deferred in the Group's cash flow hedge reserve in equity are recognised in the condensed combined and consolidated income
statement in the same period in which the hedged item affects profit and loss on a proportionate basis.

Hedge accounting is discontinued when the hedge relationship is revoked or the hedging instrument expires or is sold, terminated,
exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss deferred in equity remains in equity
and is recognised in the condensed combined and consolidated income statement when the forecast transaction is ultimately
recognised. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss deferred in equity is included
immediately in the condensed combined and consolidated income statement.

Transitional application
The Group has adopted IFRS 9, 'Financial Instruments', on 1 January 2018 and in accordance with the transitional provisions in
IFRS 9, comparative figures have not been restated.

Revenue from contracts with customers

Sale of goods (note 4)
Revenue is recognised from the sale of goods and is measured at the amount of the transaction price received in exchange for
transferring goods. The transaction price is the expected consideration to be received, to the extent that it is highly probable that
there will not be a significant reversal of revenue in future, after deducting discounts, volume rebates, value added tax and other
sales taxes. When the period of time between delivery of goods and subsequent payment by the customer is less than one year,
no adjustment for a financing component is made.

Control of the goods is passed when title and insurance risk have passed to the customer, which is typically when the goods have
been delivered to a contractually agreed location.

The incremental costs of obtaining a contract are recognised as an expense when the period of amortisation over which the costs
would have been recognised is one year or less. If not, these costs are capitalised and amortised on a basis consistent with the
transfer of goods to the customer to which the asset relates.

Transitional application
The Group has elected to adopt IFRS 15, 'Revenue from contracts with customers', with the retrospective transitional option per
IFRS 15 C3 (a), in accordance with IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', subject to
expedients. The Group has used the following practical expedients as permitted by IFRS 15:
-   for completed contracts that began and ended in the same annual reporting period, no restatement has been done;
-   for completed contracts that have variable consideration, the transaction price at the date on which the contract was
    completed has been used; and
-   for the comparative 2017 periods, the amount of the transaction price allocated to remaining performance obligations is not
    disclosed.

Leases (note 12)

To the extent that a right-of-control exists over an asset subject to a lease, with a lease term exceeding one year, a right-of-use
asset, representing the Group's right to use the underlying leased asset, and a lease liability representing the Group's obligation to
make lease payments are recognised in the condensed combined and consolidated statement of financial position at the
commencement of the lease.

The right-of-use asset is measured initially at cost and includes the amount of initial measurement of the lease liability, any initial
direct costs incurred, including advance lease payments, and an estimate of the dismantling, removal and restoration costs
required in terms of the lease. Depreciation is charged to the condensed combined and consolidated income statement so as to
depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or
the end of the lease term. The lease term shall include the period of an extension option where it is reasonably certain that the
option will be exercised. Where the lease contains a purchase option the asset is written-off over the useful life of the asset when it
is reasonably certain that the purchase option will be exercised.

The lease liability is measured at the present value of the future lease payments, including variable lease payments that depend on
an index and the exercise price of purchase options where it is reasonably certain that the option will be exercised, discounted
using the interest rate implicit in the lease, if readily determinable. If the rate cannot be readily determined, the lessee's
incremental borrowing rate is used. Finance charges are recognised in the condensed combined and consolidated income statement 
over the period of the lease.

Lease expenses for leases with a duration of one year or less and low-value assets are charged to the condensed combined and
consolidated income statement when incurred. Low-value assets are based on qualitative and quantitative criteria.

Transitional application
The Group has elected to early adopt IFRS 16, 'Leases', with effect from 1 January 2018, with the retrospective transitional option
per IFRS 16 C5 (a), applying IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors'. The Group has elected to
apply the practical expedient per IFRS 16 C3, such that the IFRS 16 definition of a lease would only be applied to assess whether
contracts entered into after the date of initial application are, or contain leases. All contracts previously assessed not to contain
leases have not been reassessed.

Alternative Performance Measures
The Group presents certain measures of financial performance, position or cash flows in the condensed combined and
consolidated financial statements that are not defined or specified according to IFRS. These measures, referred to as Alternative
Performance Measures (APMs), are defined in the Alternative Performance Measure section at the end of this document, and
where relevant reconciled to IFRS in the notes to the condensed combined and consolidated financial statements, and are
prepared on a consistent basis for all periods presented.

2b Restatement of comparative information
The following tables summarise the material impacts resulting from the changes in accounting policies on the Group's condensed
combined and consolidated income statement, condensed combined and consolidated statement of comprehensive income,
condensed combined and consolidated statement of financial position and condensed combined and consolidated statement of
cash flows. The effect of restatement is purely attributable to the adoption of the new accounting standard IFRS 16, 'Leases'.

Condensed combined and consolidated income statement
                                                     Six months ended 30 June 2017                     Year ended 31 December 2017
                                          As previously                                     As previously
                                               reported          Effect of                       reported      Effect of
EUR million                                  (Reviewed)        restatement     As restated      (Audited)    restatement     As restated
Group revenue                                     3,582                  —           3,582          7,096              —           7,096
Materials, energy and consumables
used                                            (1,746)                  2         (1,744)        (3,456)              4         (3,452)
Variable selling expenses                         (275)                  —           (275)          (525)              —           (525)
Gross margin                                      1,561                  2           1,563          3,115              4           3,119
Maintenance and other indirect
expenses                                          (150)                  —           (150)          (319)              —           (319)
Personnel costs                                   (544)                  —           (544)        (1,062)              —         (1,062)
Other net operating expenses                      (152)                 18           (134)          (313)             34           (279)
Depreciation, amortisation and
impairments                                       (213)               (14)           (227)          (464)           (27)           (491)
Operating profit                                    502                  6             508            957             11             968
Net profit from equity accounted 
investees                                             —                  —               —              1              —               1
Total profit from operations and 
equity accounted investees                          502                  6             508            958             11             969
Net finance costs                                  (40)                (7)            (47)           (71)           (14)            (85)
Profit before tax                                   462                (1)             461            887            (3)             884
Tax charge                                         (87)                  —            (87)          (173)              —           (173)
Profit for the period                               375                (1)             374            714            (3)             711
Attributable to:
 Non-controlling interests                           25                  —              25             43              —              43
 Shareholders                                       350                (1)             349            671            (3)             668

The restatement had no impact on special items.

Earnings per share (EPS)
attributable to shareholders                         Six months ended 30 June 2017                     Year ended 31 December 2017
                                          As previously                                     As previously
                                               reported          Effect of                       reported      Effect of
euro cents                                   (Reviewed)        restatement     As restated      (Audited)    restatement     As restated
Basic EPS                                          72.3              (0.2)            72.1          138.6          (0.7)           137.9
Diluted EPS                                        72.2              (0.2)            72.0          138.5          (0.7)           137.8
Basic underlying EPS                               71.2              (0.2)            71.0          149.5          (0.6)           148.9
Diluted underlying EPS                             71.2              (0.2)            71.0          149.4          (0.6)           148.8
Basic headline EPS                                 72.7              (0.2)            72.5          146.0          (0.6)           145.4
Diluted headline EPS                               72.6              (0.2)            72.4          145.9          (0.6)           145.3

Condensed combined and consolidated statement of comprehensive income
                                                     Six months ended 30 June 2017                     Year ended 31 December 2017
                                       As previously                                    As previously
                                            reported        Effect of                        reported          Effect of
EUR million                               (Reviewed)      restatement     As restated       (Audited)        restatement     As restated
Profit for the period                            375              (1)             374             714                (3)             711

Items that have been or may
subsequently be reclassified to the
condensed combined and
consolidated income statement                   (46)                1            (45)            (75)                  2            (73)

Items that will not subsequently be
reclassified to the condensed
combined and consolidated income
statement                                         11                —              11               8                  —               8

Other comprehensive expense for  
the period                                      (35)                1            (34)            (67)                  2            (65)

Total comprehensive income for the
period                                           340                —             340             647                (1)             646

Attributable to:
 Non-controlling interests                        22                —              22              41                  —              41
 Shareholders                                    318                —             318             606                (1)             605

Condensed combined and consolidated statement of financial position
                                                        As at 30 June 2017                           As at 31 December 2017
                                      As previously                                      As previously
                                           reported           Effect of                       reported         Effect of
EUR million                              (Reviewed)         restatement    As restated       (Audited)       restatement     As restated
Property, plant and equipment                 3,822                 172          3,994           3,962               166           4,128
Goodwill                                        696                   —            696             698                 —             698
Intangible assets                               124                   —            124             111                 —             111
Forestry assets                                 312                   —            312             325                 —             325
Other non-current assets                         61                   1             62              58                 1              59
Total non-current assets                      5,015                 173          5,188           5,154               167           5,321
Inventories                                     879                   —            879             867                 —             867
Trade and other receivables                   1,146                   —          1,146           1,106                 —           1,106
Cash and cash equivalents                       104                   —            104              38                 —              38
Other current assets                             29                   —             29              44                 —              44
Total current assets                          2,158                   —          2,158           2,055                 —           2,055
Total assets                                  7,173                 173          7,346           7,209               167           7,376

Short-term borrowings                         (326)                (25)          (351)           (267)              (24)           (291)
Trade and other payables                    (1,065)                   —        (1,065)         (1,074)                 —         (1,074)
Other current liabilities                     (158)                   —          (158)           (184)                 —           (184)
Total current liabilities                   (1,549)                (25)        (1,574)         (1,525)              (24)         (1,549)
Medium and long-term borrowings             (1,248)               (186)        (1,434)         (1,098)             (182)         (1,280)
Net retirement benefits liability             (223)                   —          (223)           (232)                 —           (232)
Deferred tax liabilities                      (258)                   7          (251)           (255)                 7           (248)
Other non-current liabilities                  (70)                   —           (70)            (60)                 —            (60)
Total non-current liabilities               (1,799)               (179)        (1,978)         (1,645)             (175)         (1,820)
Total liabilities                           (3,348)               (204)        (3,552)         (3,170)             (199)         (3,369)

Net assets                                    3,825                (31)          3,794           4,039              (32)           4,007

Equity
Combined share capital and stated
capital                                         542                   —            542             542                 —             542
Retained earnings and other reserves          2,978                (30)          2,948           3,172              (31)           3,141
Total attributable to shareholders            3,520                (30)          3,490           3,714              (31)           3,683
Non-controlling interests in equity             305                 (1)            304             325               (1)             324
Total equity                                  3,825                (31)          3,794           4,039              (32)           4,007

Net debt                                    (1,468)               (211)        (1,679)         (1,326)             (206)         (1,532)

Condensed combined and consolidated statement of cash flows
                                               Six months ended 30 June 2017                       Year ended 31 December 2017
                                        As previously                                       As previously
                                             reported           Effect of                        reported         Effect of
EUR million                                (Reviewed)         restatement     As restated       (Audited)       restatement  As restated
Net cash generated from operating
activities                                        519                  20             539           1,175                38        1,213
Net cash used in investing activities           (311)                   —           (311)           (694)                 —        (694)
Net cash used in financing activities           (551)                (20)           (571)           (920)              (38)        (958)
Net decrease in cash and cash  
equivalents                                     (343)                   —           (343)           (439)                 —        (439)

3 Seasonality
The seasonality of the Group's operations had no significant impact on the condensed combined and consolidated financial
statements.

4 Operating segments
Identification of the Group's externally reportable operating segments
The Group's operating segments are reported in a manner consistent with the internal reporting provided to the DLC executive
committee, the chief operating decision-making body. The operating segments are managed based on the nature of the underlying
products produced by those businesses and comprise four distinct segments.

Each of the reportable segments derives its income from the sale of manufactured products.

Six months ended 30 June 2018
                                                      Packaging       Fibre    Consumer     Uncoated              Intersegment
EUR million, unless otherwise stated                      Paper   Packaging   Packaging   Fine Paper   Corporate   elimination     Total
Segment revenue                                           1,311       1,067         822          941           —         (414)     3,727
Internal revenue                                          (371)        (17)         (3)         (23)           —           414         —
External revenue                                            940       1,050         819          918           —             —     3,727
Underlying EBITDA                                           430         105         103          230        (16)             —       852
Depreciation and impairments                               (75)        (37)        (31)         (61)         (1)             —     (205)
Amortisation                                                (4)         (3)         (9)          (1)           —             —      (17)
Underlying operating profit/(loss)                          351          65          63          168        (17)             —       630
Special items                                              (55)           —        (27)         (18)           —             —     (100)
Operating segment assets                                  2,934       1,497       1,543        1,831           7         (210)     7,602
Operating segment net assets                              2,568       1,146       1,295        1,523           3             —     6,535
Additions to non-current 
non-financial assets                                        508          80          42          129           —             —       759
Capital expenditure cash payments                           172          53          38           84           —             —       347
Underlying EBITDA margin (%)                               32.8         9.8        12.5         24.4           —             —      22.9
Return on capital employed (%)                             31.3        11.2        10.4         26.5           —             —      21.3
Average number of employees
(thousands) 1                                               5.4         7.9         5.9          6.5         0.1             —      25.8

Six months ended 30 June 2017 (Restated)
                                                      Packaging       Fibre    Consumer     Uncoated              Intersegment
EUR million, unless otherwise stated                      Paper   Packaging   Packaging   Fine Paper   Corporate   elimination     Total
Segment revenue                                           1,141       1,031         839          947           —         (376)     3,582
Internal revenue                                          (333)        (17)         (2)         (24)           —           376         —
External revenue                                            808       1,014         837          923           —             —     3,582
Underlying EBITDA                                           301         101         109          240        (21)             —       730
Depreciation and impairments                               (73)        (37)        (34)         (65)         (1)             —     (210)
Amortisation                                                (2)         (3)        (11)          (1)           —             —      (17)
Underlying operating profit/(loss)                          226          61          64          174        (22)             —       503
Special items                                                 5           —           —            —           —             —         5
Operating segment assets                                  2,405       1,406       1,570        1,822          10         (202)     7,011
Operating segment net assets                              2,087       1,065       1,327        1,508           7             —     5,994
Additions to non-current
non-financial assets                                        125          51          79           84           —             —       339
Capital expenditure cash payments                           122          47          36           49           —             —       254
Underlying EBITDA margin (%)                               26.4         9.8        13.0         25.3           —             —      20.4
Return on capital employed (%)                             22.8        13.0         9.8         27.1           —             —      18.5
Average number of employees 
(thousands) 1                                               5.4         8.1         6.0          6.8         0.1             —      26.4

Year ended 31 December 2017 (Restated)
                                                      Packaging       Fibre    Consumer     Uncoated              Intersegment
EUR million, unless otherwise stated                      Paper   Packaging   Packaging   Fine Paper   Corporate   elimination     Total
Segment revenue                                           2,292       2,055       1,646        1,832           —         (729)     7,096
Internal revenue                                          (642)        (34)         (5)         (48)           —           729         —
External revenue                                          1,650       2,021       1,641        1,784           —             —     7,096
Underlying EBITDA                                           639         194         222          464        (37)             —     1,482
Depreciation and impairments                              (151)        (76)        (67)        (125)         (1)             —     (420)
Amortisation                                                (4)         (6)        (21)          (2)           —             —      (33)
Underlying operating profit/(loss)                          484         112         134          337        (38)             —     1,029
Special items                                                 3          —         (49)         (15)           —             —      (61)
Operating segment assets                                  2,537       1,377       1,552        1,826          17         (187)     7,122
Operating segment net assets                              2,169       1,077       1,326        1,515           8             —     6,095
Additions to non-current                                             
non-financial assets                                        326         125         146          191           —             —       788
Capital expenditure cash payments                           283         115          91          122           —             —       611
Underlying EBITDA margin (%)                               27.9         9.4        13.5         25.3           —             —      20.9
Return on capital employed (%)                             25.6        11.2        10.4         26.6           —             —      19.3
Average number of employees                                             
(thousands) 1                                               5.3         8.1         6.0          6.8         0.1             —      26.3                     
Note:
1 Presented on a full time employee equivalent basis

Reconciliation of underlying EBITDA and underlying operating profit to profit before tax
                                                                                                            Restated           Restated
                                                                                         Six months       Six months         Year ended
                                                                                              ended            ended        31 December 
EUR million                                                                            30 June 2018     30 June 2017               2017  
Underlying EBITDA                                                                               852              730              1,482
Depreciation and impairments                                                                  (205)            (210)              (420)
Amortisation                                                                                   (17)             (17)               (33)
Underlying operating profit                                                                     630              503              1,029
Special items (see note 5)                                                                    (100)                5               (61)
Net profit from equity accounted investees                                                        —                —                  1
Net finance costs                                                                              (40)             (47)               (85)
Profit before tax                                                                               490              461                884

Reconciliation of operating segment assets
                                                                                              Restated               Restated
                                                      As at 30 June 2018               As at 30 June 2017       As at 31 December 2017
                                                Segment        Segment net        Segment       Segment net    Segment     Segment net
EUR million                                      assets             assets         assets            assets     assets          assets
Group total                                       7,602              6,535          7,011             5,994      7,122           6,095
Unallocated
Investment in equity accounted                       
investees                                             3                  3              6                 6          3               3
Deferred tax assets/(liabilities)                    25              (216)             24             (227)         26           (222)
Other non-operating                                 
assets/(liabilities)                                181              (356)            190             (300)        178           (337)
Group capital employed                            7,811              5,966          7,231             5,473      7,329           5,539
Financial instruments/(net debt)                     68            (2,450)            115           (1,679)         47         (1,532)
Total assets/equity                               7,879              3,516          7,346             3,794      7,376           4,007

                                           External revenue by location of                    External revenue by location of
                                                     production                                          customer
                                  Six months      Six months        Year ended        Six months       Six months           Year ended
                                       ended           ended       31 December             ended            ended          31 December
EUR million                     30 June 2018    30 June 2017              2017      30 June 2018     30 June 2017                 2017
Revenue
Africa
 South Africa                            283             337               617               228              211                  426
 Rest of Africa                            9               7                19               122              106                  206
Africa total                             292             344               636               350              317                  632
Western Europe 
 Austria                                 587             545             1,043                81               71                  146
 Germany                                 437             448               891               496              478                  952
 United Kingdom                           36              37                75               122              116                  241
 Rest of western Europe                  281             258               532               758              684                1,340
Western Europe total                   1,341           1,288             2,541             1,457            1,349                2,679
Emerging Europe                 
 Poland                                  572             464               992               317              287                  592
 Rest of emerging Europe                 741             688             1,348               523              460                  954
Emerging Europe total                  1,313           1,152             2,340               840              747                1,546
Russia                                   466             456               907               346              379                  720
North America                            272             301               583               366              389                  747
South America                              —               —                 —                38               35                   71
Asia and Australia                        43              41                89               330              366                  701
Group total                            3,727           3,582             7,096             3,727            3,582                7,096

5 Special items
                                                                                            Six months     Six months     Year ended
                                                                                                 ended          ended    31 December
EUR million                                                                               30 June 2018   30 June 2017           2017
Operating special items           
Impairment of assets                                                                              (69)              —           (52)
Reversal of impairment of assets                                                                     2              —             14
Restructuring and closure costs             
 Personnel costs                                                                                   (8)              —            (9)
 Other restructuring and closure costs                                                            (25)              5           (14)
Total special items before tax and non-controlling interests                                     (100)              5           (61)
Tax credit (see note 8)                                                                             19              —              8
Total special items attributable to shareholders                                                  (81)              5           (53)
           
Operating special items
Restructuring and closure costs and related impairments during the six months ended 30 June 2018 comprise:
    -   Packaging Paper
            - Discontinuation of in-line silicone coating production at Steti, Czech Republic. Restructuring costs of EUR8 million
              and related impairment of assets of EUR47 million were recognised.
    -   Consumer Packaging
            - Restructuring of operations, primarily in the United Kingdom. Restructuring costs of EUR9 million and impairment of
              assets of EUR15 million were recognised.
            - Following the discontinuation of in-line silicone coating production at Steti, Czech Republic, restructuring costs of
              EUR3 million and related impairment of EUR2 million, offset by reversal of impairment of assets of EUR2 million, were
              recognised.
    -   Uncoated Fine Paper
            - Closure of an uncoated fine paper machine at Merebank, South Africa. Restructuring costs of EUR13 million and
              related impairment of assets of EUR5 million were recognised.

6 Write-down of inventories to net realisable value
                                                                                           Six months     Six months      Year ended
                                                                                                ended          ended     31 December
EUR million                                                                              30 June 2018   30 June 2017            2017
Write-down of inventories to net realisable value                                                (20)           (19)            (22)
Aggregate reversal of previous write-downs of inventories                                           9             14              19

7 Net finance costs
                                                                                                            Restated        Restated
                                                                                           Six months     Six months      Year ended
                                                                                                ended          ended     31 December
EUR million                                                                              30 June 2018   30 June 2017            2017
Investment income                                                                                   5              2               4
Net foreign currency losses                                                                       (2)              —             (2)
Finance costs
Interest expense
  Interest on bank overdrafts and loans                                                          (35)           (38)            (65)
  Interest on lease liabilities                                                                   (7)            (7)            (14)
  Net interest expense on net retirement benefits liability                                       (4)            (4)             (9)
Total interest expense                                                                           (46)           (49)            (88)
Less: Interest capitalised                                                                          3              —               1
Total finance costs                                                                              (43)           (49)            (87)
Net finance costs                                                                                (40)           (47)            (85)

8 Tax charge
The Group's effective rate of tax before special items for the six months ended 30 June 2018, calculated on profit before tax and
special items and including net profit from equity accounted investees, was 22% (six months ended 30 June 2017: 19%; year
ended 31 December 2017: 19%).
                                                                                                         Restated         Restated
                                                                                       Six months      Six months       Year ended
                                                                                            ended           ended      31 December
EUR million                                                                          30 June 2018    30 June 2017             2017
UK corporation tax at 19.0% (2017: 19.25%)                                                      1               1                1
SA corporation tax at 28% (2017: 28%)                                                           4              13               28
Overseas tax                                                                                  135              81              153
Current tax in respect of prior periods                                                       (7)               —                5
Current tax                                                                                   133              95              187
Deferred tax in respect of the current period                                                 (1)               4               16
Deferred tax in respect of prior periods                                                        —            (12)             (23)
Deferred tax attributable to a change in the rate of domestic income tax                        —               —                1
Total tax charge before special items                                                         132              87              181
Current tax on special items                                                                  (1)               —              (2)
Deferred tax on special items                                                                (18)               —              (6)
Total tax credit on special items (see note 5)                                               (19)               —              (8)
Total tax charge                                                                              113              87              173

9 Earnings per share (EPS)
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
                                                                                                         Restated         Restated
                                                                                       Six months      Six months       Year ended
                                                                                            ended           ended      31 December
EUR million                                                                          30 June 2018    30 June 2017             2017
Profit for the period attributable to shareholders                                            351             349              668
Special items (see note 5)                                                                    100             (5)               61
Related tax (see note 5)                                                                     (19)               —              (8)
Underlying earnings for the period                                                            432             344              721
Special items not excluded from headline earnings                                            (33)               5             (23)
Loss on disposal of subsidiaries and other assets                                               6               2                1
Impairments not included in special items                                                       —               —                4
Related tax                                                                                     7               —                1
Headline earnings for the period                                                              412             351              704

                                                                                             Weighted average number of shares
                                                                                       (Reviewed)      (Reviewed)        (Audited)
                                                                                       Six months      Six months       Year ended
                                                                                            ended           ended      31 December
million                                                                              30 June 2018    30 June 2017             2017
Basic number of ordinary shares outstanding                                                 484.4           484.3            484.3
Effect of dilutive potential ordinary shares                                                  0.2             0.4              0.3
Diluted number of ordinary shares outstanding                                               484.6           484.7            484.6

10 Dividends
The interim ordinary dividend for the year ending 31 December 2018 of 21.45 euro cents per share will be paid on
14 September 2018 to those shareholders on the register of Mondi plc on 24 August 2018. An equivalent South African rand
interim ordinary dividend will be paid on 14 September 2018 to shareholders on the register of Mondi Limited on 24 August 2018.
The dividend will be paid from distributable reserves of Mondi Limited and Mondi plc.

Dividends paid to the shareholders of Mondi Limited and Mondi plc are presented on a combined basis.

                                                                                         Six months       Six months      Year ended
                                                                                              ended            ended     31 December
euro cents per share                                                                   30 June 2018     30 June 2017            2017
Final ordinary dividend paid (in respect of prior year)                                       42.90            38.19           38.19
Special dividend paid (in respect of prior year)                                             100.00
Interim ordinary dividend paid                                                                                                 19.10

Interim ordinary dividend declared for the six months ended 30 June                           21.45            19.10
Final ordinary dividend proposed for the year ended 31 December 2017                                                           42.90
Special dividend proposed for the year ended 31 December 2017                                                                 100.00
Total interim ordinary, final ordinary and special dividends proposed for
period ended                                                                                  21.45            19.10          142.90

                                                                                         Six months       Six months      Year ended
                                                                                              ended            ended     31 December
EUR million                                                                            30 June 2018     30 June 2017            2017
Final ordinary dividend paid (in respect of prior year)                                         207              180             180
Special dividend paid (in respect of prior year)                                                484
Interim ordinary dividend paid                                                                                                    93
Total ordinary and special dividends paid                                                       691              180             273
        
Interim ordinary dividend declared for the six months ended 30 June                             104               93
Final ordinary dividend proposed for the year ended 31 December 2017                                                             208
Special dividend proposed for the year ended 31 December 2017                                                                    485
Total interim ordinary, final ordinary and special dividends proposed for the
period ended                                                                                    104               93             693
Declared by Group companies to non-controlling interests                                         17               21              22

Dividend timetable
The interim ordinary dividend for the year ending 31 December 2018 will be paid in accordance with the following timetable:

                                                                                                 Mondi Limited            Mondi plc             
Last date to trade shares cum-dividend             
JSE Limited                                                                                     21 August 2018           21 August 2018
London Stock Exchange                                                                           Not applicable           22 August 2018
Shares commence trading ex-dividend             
JSE Limited                                                                                     22 August 2018           22 August 2018
London Stock Exchange                                                                           Not applicable           23 August 2018
Record date             
JSE Limited                                                                                     24 August 2018           24 August 2018
London Stock Exchange                                                                           Not applicable           24 August 2018
Last date for receipt of Dividend Reinvestment Plan (DRIP) elections by
Central Securities Depository Participants                                                      30 August 2018           30 August 2018
Last date for DRIP elections to UK Registrar and South African Transfer
Secretaries by shareholders of Mondi Limited and Mondi plc                                      31 August 2018          24 August 2018*
Payment Date
South African Register                                                                       14 September 2018        14 September 2018
UK Register                                                                                     Not applicable        14 September 2018
DRIP purchase settlement dates (subject to market conditions and the
purchase of shares in the open market)                                                       20 September 2018      18 September 2018**
Currency conversion dates
ZAR/euro                                                                                         3 August 2018            3 August 2018
Euro/sterling                                                                                   Not applicable           31 August 2018
* 31 August 2018 for Mondi plc South African branch register shareholders
** 20 September 2018 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 22 August 2018 and 26 August 2018, both dates inclusive, nor may transfers between the UK and South African registers
of Mondi plc take place between 15 August 2018 and 26 August 2018, 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
3 August 2018.

11 Forestry assets
                                                                                         Six months      Six months        Year ended
                                                                                              ended           ended       31 December
EUR million                                                                            30 June 2018    30 June 2017              2017
At 1 January                                                                                    325             316               316
Capitalised expenditure                                                                          23              24                46
Acquisition of assets                                                                             5               1                 3
Acquired through business combinations (see note 15)                                             14               —                 —
Fair value gains                                                                                 13              20                43
Impairment losses recognised                                                                      —               —               (3)
Felling costs                                                                                  (32)            (41)              (73)
Currency movements                                                                             (27)             (8)               (7)
At 30 June / 31 December                                                                        321             312               325

The fair value of forestry assets is a level 3 measure in terms of the fair value measurement hierarchy (see note 19), consistent
with prior years. The fair value of forestry assets is determined using a market approach.

12 Leases
From 1 January 2018 the Group early adopted IFRS 16, 'Leases'. Refer to note 2a and note 2b for the accounting policy and
restatements, respectively. The right-of-use assets recognised on adoption of the new leasing Standard are reflected in the
underlying asset classes of Property, plant and equipment, and related lease liabilities reflected as Borrowings.

Mondi has entered into various lease agreements. Leases over land and building have a weighted average term of 39 years, plant
and equipment a weighted average term of 12 years and other assets a weighted average term of 4 years.

Right-of-use assets
                                                     Right-of-use asset                             Depreciation charge
                                                           Restated         Restated                       Restated         Restated
                                                                                         Six months      Six months       Year ended
                                         As at                As at         As at 31          ended           ended      31 December
EUR million                       30 June 2018         30 June 2017    December 2017   30 June 2018    30 June 2017             2017
Land and building                          130                  142              138              7               7               14
Plant and equipment                         17                   20               19              4               4                7
Other                                       11                   13               12              3               3                6    
Total                                      158                  175              169             14              14               27
  
Additions to the right-of-use assets during the six months ended 30 June 2018 were EUR11 million (six months ended 30 June 2017:
EUR18 million; year ended 31 December 2017: EUR27 million).

Lease liabilities
                                                                                                          Restated         Restated
                                                                                               As at          As at        As at 31
EUR million                                                                             30 June 2018   30 June 2017   December 2017
Maturity analysis - contractual undiscounted cash flows
Less than one year                                                                                40             42              40
One to five years                                                                                 97            111             105
More than five years                                                                             279            304             300
Total undiscounted cash flows                                                                    416            457             445
Total lease liabilities                                                                          197            213             208
Current                                                                                           24             26              25
Non current                                                                                      173            187             183
The total cash outflow for leases during the six months ended 30 June 2018 was EUR21 million (six months ended 30 June 2017: 
EUR22 million; year ended 31 December 2017: EUR41 million).

Amounts recognised in the condensed combined and consolidated income statement
                                                                                                            Restated        Restated
                                                                                           Six months     Six months      Year ended
                                                                                                ended          ended     31 December
EUR million                                                                              30 June 2018   30 June 2017            2017
Interest on lease liabilities                                                                       7              7              14
Expenses relating to leases of low-value assets                                                     1              —               —


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

                                                                                                As at          As at        As at 31
EUR million                                         Maturity          Interest rate %    30 June 2018   30 June 2017   December 2017
Financing facilities  
Syndicated Revolving Credit Facility               July 2021   EURIBOR/LIBOR + margin             750            750             750
EUR500 million Eurobond                       September 2020                   3.375%             500            500             500
EUR500 million Eurobond                           April 2024                   1.500%             500            500             500
EUR600 million Eurobond                           April 2026                   1.625%             600              —               —
European Investment Bank Facility                  June 2025         EURIBOR + margin              67             76              71
Export Credit Agency Facility                      June 2020         EURIBOR + margin              24             43              34
Other                                                Various                  Various              91            136             132
Total committed facilities                                                                      2,532          2,005           1,987
Drawn                                                                                         (2,103)        (1,338)         (1,196)
Total committed facilities available                                                              429            667             791

The EUR500 million Eurobond maturing in 2020 contains a coupon step-up clause whereby the coupon will be increased by 1.25%
per annum if the Group 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 (Baa1, outlook stable)
and Standard & Poor's (BBB+, outlook stable).

In April 2018 the Group issued a EUR600 million Eurobond maturing in 2026 at a coupon rate of 1.625% per annum. The Eurobond has 
been issued under the Group's Guaranteed Euro Medium Term Note Programme.

                                                                                                            Restated        Restated
                                                                                                As at          As at        As at 31
EUR million                                                                              30 June 2018   30 June 2017   December 2017
Secured
Bank loans and overdrafts                                                                           3              2               —
Lease liabilities                                                                                 197            213             208
Secured                                                                                           200            215             208
Unsecured
Bonds                                                                                           1,592            995             995
Bank loans and overdrafts                                                                         719            564             349
Other loans                                                                                        —              11              19
Total unsecured                                                                                 2,311          1,570           1,363
Total borrowings                                                                                2,511          1,785           1,571
Maturity of borrowings
Current                                                                                           305            351             291
Non-current                                                                                     2,206          1,434           1,280

14 Retirement benefits
All assumptions related to the Group's material defined benefit schemes and post-retirement medical plan liabilities were re-
assessed individually and the remaining defined benefit schemes and unfunded statutory retirement obligations were re-assessed
in aggregate for the six months ended 30 June 2018. Due to changes in assumptions and exchange rate movements, the net retirement 
benefits liability decreased by EUR5 million and the net retirement benefits asset increased by EUR5 million. The assets backing 
the defined benefit scheme liabilities reflect their market values as at 30 June 2018. Net remeasurement gains arising from
changes in assumptions amounting to EUR4 million before tax have been recognised in the condensed combined and consolidated
statement of comprehensive income.

15 Business combinations
To 30 June 2018

Acquisition of Powerflute Group Holdings Oy
Mondi acquired 100% of the outstanding share capital of Powerflute Group Holdings Oy (Powerflute) on 1 June 2018 for a total
consideration of EUR363 million on a debt and cash-free basis.

Powerflute operates an integrated pulp and paper mill in Kuopio, Finland, with an annual production capacity of 285,000 tonnes of
high-performance semi-chemical fluting. Powerflute's premium semi-chemical fluting is sold to a diverse range of customers,
primarily for packaging fresh fruit and vegetables, but also other end-uses such as electronics, chemicals and pharmaceuticals.
The provisional goodwill arising on the acquisition is attributable to the anticipated synergies from integrating Powerflute into
the Group, the benefits from the skilled workforce and the expansion of the product range and geographic reach of Mondi's 
containerboard business.

Powerflute's revenue for the six months ended 30 June 2018 was EUR84 million with a profit after tax of EUR10 million. Powerflute's
revenue of EUR13 million and profit after tax of EURnil since the date of acquisition have been included in the condensed 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                                                                   64                51              115
Intangible assets                                                                                7                 3               10
Other non-current assets                                                                         1                 —                1
Inventories                                                                                     14                 5               19
Trade and other receivables                                                                     48                 —               48
Cash and cash equivalents                                                                        6                 —                6
Other current assets                                                                             1                 —                1
Total assets                                                                                   141                59              200
Trade and other payables                                                                      (35)                 —             (35)
Income tax liabilities                                                                         (3)                 —              (3)
Other current liabilities                                                                      (1)                 —              (1)
Deferred tax liabilities                                                                      (11)              (12)             (23)
Other provisions                                                                                 —               (1)              (1)
Total liabilities (excluding debt)                                                            (50)              (13)             (63)
Short-term borrowings                                                                         (31)                 —             (31)
Debt assumed                                                                                  (31)                 —             (31)
Net assets acquired                                                                             60                46              106
Goodwill arising on acquisition                                                                                                   232
Cash acquired net of overdrafts                                                                                                   (6)
Net cash paid per condensed combined and consolidated statement of cash flows                                                     332

Other acquisitions
Mondi acquired 100% of the outstanding shares in National Company for Paper Products and Import & Export (S.A.E.) (NPP) on
20 June 2018 for a total consideration of EGP510 million (EUR25 million) on a debt and cash-free basis. NPP is an industrial bags
producer, operating one plant in Giza near Cairo, Egypt, serving mostly regional customers.

NPP's revenue for the six months ended 30 June 2018 was EUR17 million with a profit after tax of EUR1 million. NPP's revenue of EURnil
and profit after tax of EURnil since the date of acquisition have been included in the condensed combined and consolidated income
statement.

Mondi acquired the operating business and the underlying assets and liabilities of World Hardwood Proprietary Limited (World
Hardwood) on 1 May 2018 for a consideration of ZAR408 million (EUR27 million) on a debt and cash-free basis. World Hardwood is a
supplier of wood and operates two plantations in Draycott and Greytown, South Africa. The acquisition increases the level of
secure wood supply.

World Hardwood's revenue for the six months ended 30 June 2018 was EURnil with a profit after tax of EUR1 million. World Hardwood's
revenue of EURnil and profit after tax of EUR1 million since the date of acquisition have been included in the condensed combined and
consolidated income statement.

Details of the net assets acquired in relation to NPP and World Hardwood, as adjusted from book to fair value, are as follows:

EUR million                                                                               Book value     Revaluation       Fair value
Net assets acquired
Property, plant and equipment                                                                     17               7               24
Intangible assets                                                                                  —               3                3
Forestry assets                                                                                   13               1               14
Inventories                                                                                        4               1                5
Trade and other receivables                                                                        5               —                5
Cash and cash equivalents                                                                          1               —                1
Total assets                                                                                      40              12               52
Trade and other payables                                                                         (2)             (2)              (4)
Income tax liabilities                                                                           (1)               —              (1)
Deferred tax liabilities                                                                           —             (2)              (2)
Other provisions                                                                                   —             (2)              (2)
Total liabilities (excluding debt)                                                               (3)             (6)              (9)
Short-term borrowings                                                                            (4)               —              (4)
Debt assumed                                                                                     (4)               —              (4)
Net assets acquired                                                                               33               6               39
Goodwill arising on acquisition                                                                                                     9
Goodwill arising on purchase price allocation adjustment (TSP)                                                                      1
Deferred acquisition consideration                                                                                                (1)
Overdrafts net of cash acquired                                                                                                     3
Net cash paid per condensed combined and consolidated statement of cash flows                                                      51

EUR million                                                                                 Goodwill       Net assets   Net cash paid
NPP                                                                                                9               13              24
World Hardwood                                                                                     —               27              27
Acquisitions total                                                                                 9               40              51
Purchase price allocation adjustment (TSP)                                                         1              (1)               —
Acquisitions total including adjustments                                                          10               39              51

Transaction costs of EUR8 million were charged to the condensed combined and consolidated income statement.

Goodwill arising on the above business combinations is not tax deductible.

The fair value accounting of these acquisitions is provisional in nature. The nature of the businesses is such that further
adjustments to the carrying values of acquired assets and/or liabilities, and adjustments to the purchase price, are possible as the
detail of the acquired businesses is evaluated post acquisition. If necessary, any adjustments to the fair values recognised will be
made within 12 months of the acquisition date.

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

To 31 December 2017

Mondi acquired 100% of the outstanding share capital of Excelsior Technologies Limited (Excelsior) on 3 February 2017 for a total
consideration of GBP34 million (EUR40 million) on a debt and cash-free basis. Excelsior is a vertically-integrated producer of
innovative flexible packaging solutions, mainly for food applications.

Mondi acquired 100% (51% effective share) of the outstanding share capital of Smurfit Kappa Recycling CE, s.r.o. (SK Recycling)
on 8 March 2017 for a consideration of EUR1 million on a debt and cash-free basis. SK Recycling operates eight paper recycling sites
in Slovakia.

Mondi acquired the remaining shares of Mondi TSP Co., Ltd. (TSP) that it did not already own (representing an interest of 50%) on
26 July 2017 for a consideration of THB143 million (EUR4 million) on a debt and cash-free basis. TSP operates a plant near Bangkok,
Thailand, and produces consumer goods packaging products with a focus on retort stand-up pouches for the food and pet food
industry.

EUR million                                                                                  Goodwill       Net assets    Net cash paid
Excelsior                                                                                          21               12               31
SK Recycling                                                                                        —                1                1
TSP                                                                                                 3                4                3
Acquisitions total                                                                                 24               17               35
Purchase price adjustment (Uralplastic)                                                             2                —                2
Acquisitions total including adjustments                                                           26               17               37

16 Consolidated cash flow analysis
(a) Reconciliation of profit before tax to cash generated from operations
                                                                                                              Restated         Restated
                                                                                           Six months       Six months       Year ended
                                                                                                ended            ended      31 December
EUR million                                                                              30 June 2018     30 June 2017             2017
Profit before tax                                                                                 490              461              884
Depreciation and amortisation                                                                     222              227              449
Net cash flow effect of current and prior period special items                                     90              (5)               40
Net finance costs                                                                                  40               47               85
Decrease in provisions and net retirement benefits                                               (12)             (11)             (16)
Movement in working capital                                                                     (148)            (141)            (122)
Fair value gains on forestry assets                                                              (13)             (20)             (43)
Felling costs                                                                                      32               41               73
Loss on disposal of subsidiaries and other assets                                                   6                2                1
Other adjustments                                                                                  15               11               12
Cash generated from operations                                                                    722              612            1,363

(b) Cash and cash equivalents
                                                                                                As at            As at         As at 31
EUR million                                                                              30 June 2018     30 June 2017    December 2017
Cash and cash equivalents per condensed combined and consolidated statement of
financial position                                                                                 54              104               38
Bank overdrafts included in short-term borrowings                                                (67)             (72)            (104)
Cash and cash equivalents per condensed combined and consolidated
statement of cash flows                                                                          (13)               32             (66)

(c) Movement in net debt
The Group's net debt position is as follows:
                                                        Current                                          Debt-related
                                          Cash and    financial                   Debt due    Debt due     derivative
                                              cash        asset                 within one   after one      financial                Total net
EUR million                            equivalents  investments  Total assets         year        year    instruments  Total debt         debt
At 1 January 2017, as previously
reported (Audited)                             377            2           379        (624)     (1,119)           (19)     (1,762)      (1,383)
Impact of change in accounting    
policy                                           —            —             —         (22)       (190)              —       (212)        (212)
Restated balance at 1 January 2017             377            2           379        (646)     (1,309)           (19)     (1,974)      (1,595)
Cash flow (Restated)                         (343)          (1)         (344)          396       (146)              —         250         (94)
Additions to lease liabilities    
(Restated)                                       —            —             —          (4)        (14)              —        (18)         (18)
Acquired through business     
combinations                                     —            —             —          (1)         (8)              —         (9)          (9)
Movement in unamortised loan       
costs                                            —            —             —            —         (1)              —         (1)          (1)
Net movement in derivative financial      
instruments                                      —            —             —            —           —             19          19           19
Reclassification (Restated)                      —            2             2         (31)          31              —           —            2
Currency movements (Restated)                  (2)            —           (2)            7          13            (1)          19           17
Restated balance at 30 June 2017                32            3            35        (279)     (1,434)            (1)     (1,714)      (1,679)
Cash flow (Restated)                          (96)            —          (96)          108         132              —         240          144
Additions to lease liabilities
(Restated)                                       —            —             —          (1)         (8)              —         (9)          (9)
Acquired through business   
combinations                                     —          (1)           (1)          (1)           —              —         (1)          (2)
Movement in unamortised loan     
costs                                            —            —             —            —         (1)              —         (1)          (1)
Net movement in derivative financial   
instruments                                      —            —             —            —           —              1           1            1
Reclassification (Restated)                      —          (1)           (1)         (23)          23              —           —          (1)
Currency movements (Restated)                  (2)            —           (2)            9           8              —          17           15
Restated balance at 31 December
2017                                          (66)            1          (65)        (187)     (1,280)              —     (1,467)      (1,532)
Cash flow                                       46            —            46          (9)       (954)              —       (963)        (917)
Additions to lease liabilities                   —            —             —          (3)         (8)              —        (11)         (11)
Acquired through business   
combinations (see note 15)                       —            —             —         (31)           —              —        (31)         (31)
Movement in unamortised loan    
costs                                            —            —             —            —         (1)              —         (1)          (1)
Net movement in derivative financial   
instruments                                      —            —             —            —           —              6           6            6
Reclassification                                 —            —             —         (21)          21              —           —            —
Currency movements                               7            —             7           13          16              —          29           36
At 30 June 2018                               (13)            1          (12)        (238)     (2,206)              6     (2,438)      (2,450)

17 Capital commitments
Capital commitments are based on capital projects approved to date and the budget approved by the Boards. As previously indicated, 
capital expenditure for 2018 is expected to be in the range of EUR700-EUR800 million. These capital projects are expected to
be financed from existing cash resources and borrowing facilities.

18 Contingent liabilities
Contingent liabilities comprise aggregate amounts as at 30 June 2018 of EUR6 million (as at 30 June 2017: EUR6 million; as at
31 December 2017: EUR6 million) in respect of loans and guarantees given to banks and other third parties. No acquired contingent
liabilities have been recorded in the Group's condensed combined and consolidated statement of financial position for all periods
presented.

The Group is subject to certain legal proceedings, claims, complaints and investigations arising out of the ordinary course of
business. Legal proceedings may include, but are not limited to, alleged breach of contract and alleged breach of environmental,
competition, securities and health and safety laws. The Group may not be insured fully, or at all, in respect of such risks. The
Group cannot predict the outcome of individual legal actions or claims or complaints or investigations. The Group may settle
litigation or regulatory proceedings prior to a final judgment or determination of liability. The Group may do so to avoid the cost,
management efforts or negative business, regulatory or reputational consequences of continuing to contest liability, even when it
considers it has valid defences to liability. The Group considers that no material loss to the Group is expected to result from these
legal proceedings, claims, complaints and investigations. Provision is made for all liabilities that are expected to materialise
through legal and tax claims against the Group.

19 Fair value measurement
Assets and liabilities that are measured at fair value, or where the fair value of financial instruments has been disclosed in the
notes to the condensed combined and consolidated financial statements, are based on the following fair value measurement
hierarchy:
- level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
- level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly 
  (that is, as prices) or indirectly (that is, derived from prices); and
- level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The assets measured at fair value on level 3 of the fair value measurement hierarchy are the Group's forestry assets as set out in
note 11, certain assets acquired or liabilities assumed in business combinations.

There have been no transfers of assets or liabilities between levels of the fair value hierarchy during the period.

The fair values of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are
determined using generally accepted valuation techniques. These valuation techniques maximise the use of observable market
data and rely as little as possible on Group specific estimates.

Specific valuation methodologies used to value financial instruments include:
- the fair values of 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 fair values of the Group's commodity price derivatives are calculated 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 below, the directors consider that the carrying values of financial assets and financial liabilities recorded at
amortised cost in the condensed combined and consolidated financial statements are approximately equal to their fair values.

                                             Carrying amount                               Fair value
                                                Restated        Restated                      Restated        Restated
                                 As at             As at        As at 31          As at          As at        As at 31
EUR million               30 June 2018      30 June 2017   December 2017   30 June 2018   30 June 2017   December 2017
Financial liabilities
Borrowings                       2,314             1,572           1,363          2,365          1,634           1,421

20 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 30 of the Group's Integrated report and financial
statements 2017.

21 Events occurring after 30 June 2018
With the exception of the interim dividend declared for the six months ended 30 June 2018 (see note 10), and the reorganisation of
business segments described below, there have been no material reportable events since 30 June 2018.

Reoganisation of business segments
Effective from 1 August 2018, the Group reorganised its business units to achieve improved strategic alignment and operational
coordination across the fibre based packaging value chain. The changes to the Group's business units, and consequently to the
Group's segmental reporting, are as follows:
- Packaging Paper and Fibre Packaging were replaced by a single business unit called Fibre Packaging; and
- there were no changes to the Consumer Packaging or Uncoated Fine Paper business units.

The Group's restated segmental reporting for the six months ended 30 June 2018 and the comparative reporting periods for the six
months ended 30 June 2017 and the year ended 31 December 2017 are disclosed later in this document. The reorganisation has no 
impact on the overall Group result.

Production statistics

                                                                             Six months     Six months      Year ended
                                                                                  ended          ended     31 December
                                                                           30 June 2018   30 June 2017            2017
Packaging Paper
Containerboard                                             '000 tonnes            1,189          1,119           2,297
Kraft paper                                                '000 tonnes              605            606           1,206
Softwood pulp                                              '000 tonnes            1,028          1,005           2,010
 Internal consumption                                      '000 tonnes              958            931           1,874
 Market pulp                                               '000 tonnes               70             74             136
Hardwood pulp                                              '000 tonnes              292            250             547
 Internal consumption                                      '000 tonnes              292            246             543
 Market pulp                                               '000 tonnes                —              4               4
Fibre Packaging
Corrugated board and boxes                                million m(2)              814            820           1,650
Industrial bags                                          million units            2,600          2,513           4,952
Extrusion coatings                                        million m(2)              665            667           1,281
Consumer Packaging
Consumer packaging                                        million m(2)            3,819          3,783           7,437
Uncoated Fine Paper
Uncoated fine paper                                        '000 tonnes              840            818           1,644
Softwood pulp                                              '000 tonnes              174            197             375
 Internal consumption                                      '000 tonnes              159            189             358
 Market pulp                                               '000 tonnes               15              8              17
Hardwood pulp                                              '000 tonnes              587            675           1,345
 Internal consumption                                      '000 tonnes              452            465             950
 Market pulp                                               '000 tonnes              135            210             395
Newsprint                                                  '000 tonnes              102            159             277

Exchange rates
                                                 Average                                       Closing
                               Six months     Six months      Year ended     Six months     Six months      Year ended
                                    ended          ended     31 December          ended          ended     31 December
versus euro                  30 June 2018   30 June 2017            2017   30 June 2018   30 June 2017            2017
South African rand                  14.89          14.31           15.04          16.05          14.92           14.81
Czech koruna                        25.50          26.78           26.33          26.02          26.20           25.54
Polish zloty                         4.22           4.27            4.26           4.37           4.23            4.18
Pounds sterling                      0.88           0.86            0.88           0.89           0.88            0.89
Russian rouble                      71.96          62.76           65.88          73.16          67.54           69.39
Turkish lira                         4.96           3.94            4.12           5.34           4.01            4.55
US dollar                            1.21           1.08            1.13           1.17           1.14            1.20

Operating segments (Restated)
Effective from 1 August 2018, the Group reorganised its business units to achieve improved strategic alignment and operational
coordination across the fibre based packaging value chain. The changes to the Group's business units, and consequently to the
Group's segmental reporting, are as follows:
- Packaging Paper and Fibre Packaging were replaced by a single business unit called Fibre Packaging; and
- there were no changes to the Consumer Packaging or Uncoated Fine Paper business units.

The Group's restated segmental reporting for the six months ended 30 June 2018 and the comparative reporting periods for the six
months ended 30 June 2017 and the year ended 31 December 2017 are disclosed below. The reorganisation has no impact on the
overall Group result.

Six months ended 30 June 2018 (Restated)
                                                 Fibre       Consumer  Uncoated Fine     Corporate &   Intersegment
EUR million, unless otherwise stated         Packaging      Packaging          Paper          other     elimination          Total 
Segment revenue                                  2,020            822            941              —            (56)          3,727
Internal revenue                                  (30)            (3)           (23)              —              56              —
External revenue                                 1,990            819            918              —               —          3,727
Underlying EBITDA                                  535            103            230           (16)               —            852
Depreciation and impairments                     (112)           (31)           (61)            (1)               —          (205)
Amortisation                                       (7)            (9)            (1)              —               —           (17)
Underlying operating profit/(loss)                 416             63            168           (17)               —            630
Special items                                     (55)           (27)           (18)              —               —          (100)
Operating segment assets                         4,274          1,543          1,831              7            (53)          7,602
Operating segment net assets                     3,714          1,295          1,523              3               —          6,535
Additions to non-current
non-financial assets                               588             42            129              —               —            759
Capital expenditure cash payments                  225             38             84              —               —            347
Underlying EBITDA margin (%)                      26.5           12.5           24.4              —               —           22.9
Return on capital employed (%)                    24.3           10.4           26.5              —               —           21.3
Average number of employees 
(thousands) 1                                     13.3            5.9            6.5            0.1               —           25.8

Six months ended 30 June 2017 (Restated)
                                                 Fibre       Consumer  Uncoated Fine     Corporate &   Intersegment
EUR million, unless otherwise stated         Packaging      Packaging          Paper          other     elimination          Total
Segment revenue                                  1,850            839            947              —            (54)          3,582
Internal revenue                                  (28)            (2)           (24)              —              54              —
External revenue                                 1,822            837            923              —               —          3,582
Underlying EBITDA                                  402            109            240           (21)               —            730
Depreciation and impairments                     (110)           (34)           (65)            (1)               —          (210)
Amortisation                                       (5)           (11)            (1)              —               —           (17)
Underlying operating profit/(loss)                 287             64            174           (22)               —            503
Special items                                        5              —              —              —               —              5
Operating segment assets                         3,662          1,570          1,822             10            (53)          7,011
Operating segment net assets                     3,152          1,327          1,508              7               —          5,994
Additions to non-current   
non-financial assets                               176             79             84              —               —            339
Capital expenditure cash payments                  169             36             49              —               —            254
Underlying EBITDA margin (%)                      21.7           13.0           25.3              —               —           20.4   
Return on capital employed (%)                    19.4            9.8           27.1              —               —           18.5
Average number of employees   
(thousands) 1                                     13.5            6.0            6.8            0.1               —           26.4

Year ended 31 December 2017 (Restated)   
                                                 Fibre       Consumer  Uncoated Fine    Corporate &    Intersegment
EUR million, unless otherwise stated         Packaging      Packaging          Paper          other     elimination          Total    
Segment revenue                                  3,735          1,646          1,832              —           (117)          7,096
Internal revenue                                  (64)            (5)           (48)              —             117              —
External revenue                                 3,671          1,641          1,784              —               —          7,096
Underlying EBITDA                                  833            222            464           (37)               —          1,482
Depreciation and impairments                     (227)           (67)          (125)            (1)               —          (420)
Amortisation                                      (10)           (21)            (2)              —               —           (33)
Underlying operating profit/(loss)                 596            134            337           (38)               —          1,029
Special items                                        3           (49)           (15)              —               —           (61)
Operating segment assets                         3,794          1,552          1,826             17            (67)          7,122
Operating segment net assets                     3,246          1,326          1,515              8               —          6,095
Additions to non-current   
non-financial assets                               451            146            191              —               —            788       
Capital expenditure cash payments                  398             91            122              —               —            611
Underlying EBITDA margin (%)                      22.3           13.5           25.3              —               —           20.9
Return on capital employed (%)                    20.6           10.4           26.6              —               —           19.3
Average number of employees   
(thousands) 1                                     13.4            6.0            6.8            0.1               —           26.3
Note:
1 Presented on a full time employee equivalent basis

Alternative Performance Measures
The Group presents certain measures of financial performance, position or cash flows in the condensed combined and
consolidated financial statements that are not defined or specified according to IFRS. These measures, referred to as Alternative
Performance Measures (APMs), are prepared on a consistent basis for all periods presented in this report.

The most significant APMs are:

Net debt (note 16c)
A measure comprising short, medium, and long-term interest-bearing borrowings and the fair value of debt-related derivatives less
cash and cash equivalents and current financial asset investments. Net debt provides a measure of the Group's net indebtedness
or overall leverage.

Return on capital employed (ROCE) (note 4)
Trailing 12-month underlying operating profit, including share of equity accounted investees' net profit/(loss), divided by trailing 
12-month average capital employed. Capital employed is adjusted for spend on those strategic projects which are not yet in
production. Segments' 12-month average capital employed has been extracted from management reports. ROCE provides a
measure of the efficient and effective use of capital in the business and is used for incentive purposes.

Special items (note 5)
Those financial items which the Group considers should be separately disclosed on the face of the condensed combined and
consolidated income statement to assist in understanding the underlying financial performance achieved by the Group. Such items
are generally material by nature and exceed EUR10 million and the Group, therefore, excludes these items when reporting underlying
earnings and related measures in order to provide a measure of the underlying performance of the Group on a basis that is
comparable from year to year.

Underlying EBITDA (note 4)
Operating profit before special items, depreciation, amortisation and impairments not recorded as special items. Underlying
EBITDA provides a measure of the absolute growth in the cash generating ability of the business and is used for incentive
purposes.

Underlying operating profit (condensed combined and consolidated income statement)
Operating profit before special items. Underlying operating profit provides a measure of operating performance and absolute
growth in profitability of the operations.

Underlying profit before tax (condensed combined and consolidated income statement)
Profit before tax and special items. Underlying profit before tax provides a measure of the absolute growth in profitability 
before tax.

Underlying earnings (and per share measure) (note 9)
Net profit after tax attributable to shareholders, before special items. Underlying earnings (and the related per share measure
based on the basic, weighted average number of ordinary shares outstanding), provides a measure of the Group's absolute growth
in earnings.

Underlying and headline EPS (note 9)
Underlying EPS excludes the impact of special items and is a non-IFRS measure. It is included to provide an additional basis on
which to measure the Group's earnings performance. The presentation of headline EPS is mandated under the Listings
Requirements of the JSE Limited and is calculated in accordance with Circular 4/2018, 'Headline Earnings', as issued by the South
African Institute of Chartered Accountants.

Cash flow generation
A measurement of the Group's cash generation before considering deployment of cash towards investment in property, plant and
equipment ('capex' or 'capital expenditure'), acquisitions and disposals, payment of dividends to shareholders and injection by or
outflow from purchase of non-controlling interests. Cash flow generation is a measure of the Group's ability to generate cash
through the cycle before considering deployment of such cash.

Underlying EBITDA margin (note 4)
Underlying EBITDA expressed as a percentage of revenue provides a measure of the cash generating ability relative to revenue.

Underlying operating profit margin
Underlying operating profit expressed as a percentage of revenue provides a measure of the profitability of the operations relative
to revenue.

Ordinary dividend cover
Basic underlying EPS divided by total ordinary dividend per share paid and proposed provides a measure of the Group's earnings
relative to its deployment towards ordinary dividend payments.

Net debt to 12-month trailing underlying EBITDA
Net debt divided by trailing 12-month underlying EBITDA. A measure of the Group's net indebtedness relative to its cash
generating ability.

Effective tax rate (note 8)
Underlying tax charge expressed as a percentage of underlying profit before tax. A measure of the Group's tax charge relative to
its profit before tax expressed on an underlying basis.

Working capital as a percentage of revenue
Working capital, defined as the sum of trade and other receivables and inventories less trade and other payables, expressed as a
percentage of trailing 12-month Group revenue. A measure of the Group's effective use of working capital relative to revenue.

Capex and investment in intangible assets as a percentage of depreciation, amortisation and impairments
Capex and investment in intangible assets divided by depreciation, amortisation and non-special impairments provides a measure
of reinvestment into the Group's asset base relative to depreciation, amortisation and impairments.

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
Mondi is a global leader in packaging and paper, delighting its customers and consumers with innovative and sustainable
packaging and paper solutions. Mondi is fully integrated across the packaging and paper value chain - from managing forests and
producing pulp, paper and plastic films, to developing and manufacturing effective industrial and consumer packaging solutions.
Sustainability is embedded in everything Mondi does. In 2017, Mondi had revenues of EUR7.10 billion and underlying EBITDA
of EUR1.48 billion.

Mondi has a dual listed company structure, with a primary listing on the JSE Limited for Mondi Limited under the ticker MND, and a
premium listing on the London Stock Exchange for Mondi plc, under the ticker MNDI. Mondi is a FTSE 100 constituent, and has
been included in the FTSE4Good Index Series since 2008 and the FTSE/JSE Responsible Investment Index Series since 2007.

Sponsor in South Africa: UBS South Africa Proprietary Limited.



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