Mondi Plc · LSE:MNDI
Mondi — Technical Presentation (November 2010)
16 slides from Mondi's technical presentation, Nov 4, 2010
Slide 1: Corrugated Business
Corrugated Business Peter Oswald Investor and Analyst site visit, Syktyvkar and Świecie 2 – 4 November 2010
Slide 2: Historical milestones and strategic focus
Historical milestones and strategic focus Improved cost position and refined geographic footprint 2007 Acquisition of 54% of Turkish corrugated packaging business Tire Kutsan 2009 Completion EUR 330m investment (EUR 20m below budget), new lightweight recycled containerboard machine ECO7, new-state-o
Slide 3: Mondi has a clear upstream focus
Mondi has a clear upstream focus Mondi covers 3 times the containerboard demand of its converting business Mondi Containerboard sales Total sales 535kt VCB, 526kt RCB 7kt VCB 33kt VCB 495kt VCB 2% 18% 80% 10kt RCB 160kt RCB 356kt RCB Mondi Mondi other converting business Corrugated Packaging Externa
Slide 4: Containerboard capacity overview
Containerboard capacity overview Mill Containerboard capacity Świecie (PL)* 1 360 kt Syktyvkar (RU) 280 kt Raubling (DE) 210 kt Tire Kutsan (TR) 140 kt Steti (CZ) 110 kt Total 2 100 kt Source: Mondi Information. *) including 470 kt of built capacity of PM7; Investor and Analyst site visit, Syktyvkar
Slide 5: Containerboard portfolio
Containerboard portfolio Sales volume LTM (in kt) 2 100 kt Recycled Containerboard Kraftliner White Top 387 (18%) 750 (36%) 473 (23%) Kraftliner 312 178 (15%) (8%) Kraftliner Substitute Semichemical Fluting Source: Mondi Information; LTM Jul 2009 – Jun 2010 Investor and Analyst site visit, Syktyvkar
Slide 6: Leading market positions
Leading market positions* WTKL (Europe) Brown kraftliner (Europe) Recycled CB (Poland) 1 200 kt 4 800 kt 1 400 kt Mondi Mondi Mondi 10% 22% 32% 78% 68% 90% Other Other Other WTKL (Russia only) SC Fluting (Europe) Corrugated Packaging CEE** 130kt 130 kt 1 600 kt 5.2 bn m2 Mondi Prinzhorn Other 11% 13
Slide 7: Leading position in corrugated packaging in Poland and Turkey
Leading position in corrugated packaging in Poland and Turkey Poland Turkey 2.9 bn m2 2.5 bn m2 Mondi Mondi 16% 15% Olmuksa (50% IP) 11% Stora Enso 13% incl DS Other 49% Smith Other 51% Turkey 9% 10% Modem Smurfit Kappa Karton 6% (Eren) 8% 6% DS Smith 6% TFP Kaplamin Dentas (SCA minority) Source: Mo
Slide 8: Mondi is focused on high growth corrugated packaging markets
Mondi is focused on high growth corrugated packaging markets 8 biggest European corrugated markets 2010 (size in bn m2 and growth) 8.4 6.4 5.4 4.3 3.9 3.0 2.9 2.7 CAGR 7.0% 6.8% 6.6% 2007-2010 2010-2014 4.5% 2.6% 1.9% 1.9% 0.9% 0.7% 0.8% 0.8% -1.7% -1.7% -2.4% -2.8% -4.4% Germany Italy France Spain
Slide 9: Growth rates Virgin Containerboard
Growth rates Virgin Containerboard VCB demand growth Europe 2006 – 2010 5.7% 5.8% 4.9% 0.2% -8.2% 2006 2007 2008 2009 2010e Source: RISI World Containerboard Forecast, 2010, 2007 | European Paper Packaging Forecast, 2010, 2007, 2006 Investor and Analyst site visit, Syktyvkar and Świecie, 2 – 4 Novem
Slide 10: Corrugated market is reasonably well balanced
Corrugated market is reasonably well balanced European demand back to pre-crisis levels, but further growth differs by region Western European demand growth likely to flatten in the short-term CEE & Russia demand growth of >5% expected European Virgin Containerboard (VCB) supply Net capacity contrac
Slide 11: ECO7
ECO7 Pros Poland was net exporter of recovered paper before ECO7, now balanced Poland is net importer of RCB (800 kt in 2009). ECO7 can sell over 50% into Poland with low transport costs ECO7 is well integrated downstream theoretically 56% into Mondi’s Polish box plants, de facto 33% theoretically 8
Slide 12: Mondi enjoys benefits in wood costs
Mondi enjoys benefits in wood costs Softwood pulpwood cost at mill (EUR/m3sub) 3Q 2009 4Q 2009 43 43 40 39 39 37 36 36 36 37 34 34 33 33 33 33 27 27 25 25 22 22 22 23 20 21 RUS WE US US South Brazil Slovakia Czech France Austria Poland Sweden Germany China South North Africa Northeast Source: Pöyry
Slide 13: Cost curve virgin containerboard
Cost curve virgin containerboard WTKL delivered costs Frankfurt Unbleached kraftliner delivered costs Frankfurt 700 EUR/t 2009/IV 600 EUR/t 2009/IV Delivered Costs 600 to Frankfurt 500 Delivered Costs 500 to Frankfurt 400 1 2 4 400 2 3 1 300 300 1. Richards Bay PM2 200 200 1. Swiecie PM5 2. Syktyvka
Slide 14: Cost curve recycled containerboard
Cost curve recycled containerboard Highly competitive with weighted average costs in first quartile EUR/t 2009/IV 500 450 Delivered costs to Frankfurt 400 350 4 300 3 2 250 Mondi weighted average 1 200 1. Swiecie PM7 2. Swiecie PM3 150 3. Raubling PM7 4. Raubling PM5 100 0 1.000 2.000 3.000 4.000 5.
Slide 15: FX-rates of PLN and RUB are important for the profitability of Containerboard
FX-rates of PLN and RUB are important for the profitability of Containerboard Swiecie CB Sales volume LTM Syktyvkar CB Sales volume LTM 1 145 kt 217 kt Domestic VCB Export VCB 81 Domestic RCB (7%) Domestic 285 (25%) Export 97 555 (45%) (48%) 120 (55%) 223 (20%) Export RCB Source: Mondi Information;
Slide 16: Mondi as the corrugated business of choice
Mondi as the corrugated business of choice Pros Focus on low cost virgin containerboard Where Europe is an importer And new capacities are not planned Marketing policy of Kraftliner substitutes as a growing niche Difficult to replicate for most competitors Well invested asset base with high free cas