Mondi Plc · LSE:MNDI
Mondi — Investor Day (September 2013)
15 slides from Mondi's investor day presentation, Sep 2, 2013
Slide 1: Mondi Capital Markets Day: Mondi South Africa Division (MSAD)
Mondi Capital Markets Day Mondi South Africa Division (MSAD) Ron Traill 2 September 2013
Slide 2: MSAD overview
MSAD overview The MSAD business manages upstream forestry operations and manufactures and sells a range of pulp, virgin containerboard, UFP and newsprint products. Value chain1 Products Applications / customers l Printing & writing paper 0.3 Pulp production l Tissue production Pulp Richards Bay l Ag
Slide 3: MSAD operations
MSAD operations MSAD operations Forestry overview l Forestry plantations along the eastern coastal belt and further inland l Forestry land holdings in Mpumalanga and KwaZulu-Natal l Approximately 300,000 ha under management (owned or leased land), of which approximately two thirds are commercial sof
Slide 4: Strong local market position
Strong local market position1 Hardwood pulp White Top Kraftliner UFP Newsprint Sole domestic supplier Sole domestic supplier Number one Number one market position market position million tonnes million tonnes million tonnes million tonnes CAGR -4.6% CAGR CAGR CAGR +31.2% +3.6% +4.4% 0.06 0.18 0.07 0
Slide 5: Richards Bay global competitiveness in export grades
Richards Bay global competitiveness in export grades Global BHKP delivered costs to Shanghai1 Global WTKL delivered costs to Frankfurt2 €/t €/t 700 650 1: Richards Bay 1: Richards Bay 600 600 550 Current exchange 500 500 rate3 1 450 400 1 400 350 300 1 300 250 200 200 150 100 100 50 0 0 35 mt 0 1,00
Slide 6: Focus on performance delivering strong results
Focus on performance delivering strong results Sales (€ million) and EBITDA margin (%) 1 Operating profit (€ million) and ROCE (%) 1 16.4% 25.0% 20.6% 12.8% 15.5% 19.0% 18.1% 17.8% 9.6% 8.9% 8.7% 5.3% 648 540 656 645 702 325 118 38 71 63 69 44 2008 2009 2010 2011 2012 H1 2013 2008 2009 2010 2011 201
Slide 7: Challenges and opportunities
Challenges and opportunities Challenges l Structural decline in newsprint l Rising labour costs and skills shortage l Electricity availability and escalating cost l Land ownership Opportunities l Leverage strong domestic market position and Richards Bay global competitiveness l Further productivity
Slide 8: Proactive response to labour cost pressures
Proactive response to labour cost pressures Challenge Response l Mill workers wages have increased by 30% over the l Significant improvements in productivity since 2009, past 4 years supported by: l Forestry workers wages have doubled over the past 4 ¡ Sales increase of 8% over the same period years
Slide 9: Targeted investment to protect against energy price escalation and supply shortages
Targeted investment will protect against further energy price escalation and supply shortages, and increase electricity self-sufficiency Challenge Security of supply l Recent generation shortages were primarily caused by delayed investment in new generation capacity l Construction delays for new pow
Slide 10: Land ownership
Land ownership Challenge l People historically dispossessed of their land under apartheid l Democratic government initiated land claims process to allow for restitution of land to the dispossessed l Approximately 50% of Mondi forests initially under claim (150,000 ha) through 101 claims Response l M
Slide 11: Potential for further operational efficiency improvement
Potential for further operational efficiency improvement Richards Bay and Merebank l Increase mill capacity to 800ktpa with minimal capex l Develop capability of linerboard manufacture l Merebank now correct size, focus on enhancing productivity, cost reduction and leveraging domestic market positio
Slide 12: Modernisation of forestry operations
Modernisation of forestry operations First class forestry operations l Rapid escalation of labour costs over past year l Mondi embarked on program to modernise outsourced forestry operations 5 years ago l Initial focus on high risk manual felling operations l Focus now on silviculture operations to
Slide 13: Clonal development
Clonal development l Invested in developing extensive breeding research l Development cycle decreased by 28% since 2008 l Growth increased by 30% since 1990 Current: commercial 2000: generation 1990: benchmark 30% 17% Packagi ng Paper | F i bre Packagi ng | Consum er Packagi ng | Uncoat ed F i ne Pa
Slide 14: Summary
Summary Group strategic framework MSAD value drivers l Strong local market position offering growth opportunities Achieve leading market positions l Global competitiveness in export grades l Well invested assets with no significant capex needs Maintain a high- quality, low-cost l First class forestr
Slide 15: Forward-looking statements
FORWARD - LOOKING STATEMENTS It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding expectations of market growth and developments; expectations of growth and profitability; and statements preceded by “believes”, “expects”, “an