Mondi Plc · LSE:MNDI

Mondi — Deutsche Bank Paper Conference 2007

32 slides from Mondi's conference presentation, Nov 14, 2007

  1. Slide 1: Deutsche Bank Paper Conference, London, 14 November 2007

    DEUTSCHE BANK PAPER CONFERENCE LONDON 14 NOVEMBER 2007

  2. Slide 2: Agenda

    AGENDA Strategic Overview Growth Markets Financials PAGE 1

  3. Slide 3: Agenda

    AGENDA Strategic Overview Growth Markets Financials PAGE 2

  4. Slide 4: Mondi at a Glance

    MONDI AT A GLANCE merchant /newsprint South Africa Sales H1 € 1.7B € 1.0B € 0.2B € 0.3B 2007 (1) Products z No. 1 Kraft Paper(2) z No. 1 Office Paper(2) z No. 1 Corrugated z No. 1 Newsprint in z No. 2 Kraftliner(2) z No. 2 UCWF(2) Packaging in SA(3) South Africa(2) Positions z No. 1 Rigid Plastics i

  5. Slide 5: Mondi Strategic Drivers

    MONDI STRATEGIC DRIVERS Mondi Group sales H1 2007 Mondi group net operating assets June 2007 { Leading market position — Leading market positions 45% 39% — High exposure to: 55% 61% – Attractive product segments – Attractive geographies Emerging markets Mature markets Emerging markets Mature markets

  6. Slide 6: UCWF and Corrugated demand growth per region

    UCWF and Corrugated demand growth per region Corrugated 2005 - 2010 demand growth (in UCWF 2006 - 2011 demand growth (in %)1 %)2 9,8 8,2 6,6 1,8 1,3 WE EE CIS WE EE Demand growth in %. 1Sources: EMGE Woodfree Forecast Report; October 2007 for Eastern and Western Europe. World Paper markets 2020, Pöy

  7. Slide 7: Upstream Production Cost Advantages Low-Cost Positions

    UPSTREAM PRODUCTION COST ADVANTAGES LOW- COST POSITIONS White-top Kraftliner Unbleached Kraftliner €/t 800 €/t 500 100% of Mondi 100% of Mondi Unbleached White-top Kraftliner Kraftliner capacity capacity 0 0 0 0 3,000 Cumulative capacity (Kt/a) 1,400 Cumulative capacity (Kt/a) Universal Office Paper

  8. Slide 8: Superior Access to Low-Cost Wood

    SUPERIOR ACCESS TO LOW-COST WOOD Average Hardwood and Softwood Costs (€/m3, Q2 2007) 47 42 39 37 33 30 30 25 25 26 le ia a l nd d Sw l en a ce zi a si ic an hi al ug So Bra an ed la us fr tr C nl Po rt A Fr us R Fi Po h A ut Source: Pöyry Forest Industry Consulting MAGENTA\ROADSHOW PRESENTATION\12 M

  9. Slide 9: Benefiting from Integrated Value Chain

    BENEFITING FROM INTEGRATED VALUE CHAIN Forestry Pulp Paper Mondi’s own 7.6mm3 5.8Mt 3.5Mt Packaging: 3.3Mt availability Mondi’s own 3.8Mt 2.1Mt(1) 14.8mm3 demand Potential self 51% 91% 154%(1) sufficiency (1) Refers to Mondi’s demand and self-sufficiency of packaging paper (including MP and MPSA). P

  10. Slide 10: Agenda

    AGENDA Strategic Overview Growth Markets Financials PAGE 9

  11. Slide 11: Growth

    GROWTH z At 30th June 2006 61% of asset base was deployed in emerging markets. z Estimated emerging market share of asset base will grow to 70% by close of 2010 z Major investments targeted at emerging markets: - Containerboard and box plant – Eastern Europe - Syktyvkar modernisation expansion – Rus

  12. Slide 12: Containerboard Expansion Project

    CONTAINERBOARD EXPANSION PROJECT z New 470,000 tons lightweight recycled containerboard machine plus a new corrugated box plant with capacity of approximately 250M m2/year corrugated board production z Clear cost leader in Europe z Investment cost of circa €350M z Order for main machinery was placed

  13. Slide 13: Containerboard Expansion Project – Project Rationale

    CONTAINERBOARD EXPANSION PROJECT – PROJECT RATIONALE z Target high-growth lightweight recycled containerboard market z Supported by growing manufacturing base in CEE region which has resulted in a recycled containerboard supply deficit (0.7M tons in 2006) z Efficient supply to state-of-the-art corru

  14. Slide 14: Syktyvkar Mill - Project Scope

    SYKTYVKAR MILL - PROJECT SCOPE z New and expanded z Benefits include { Wood handling facilities { Lower operating costs { Recovery boiler and { Improved efficiencies turbine { Expanded electricity { Evaporation of Black generating capacity Liquor { 190,000 tpa increase in { Limekiln pulp production

  15. Slide 15: Syktyvkar Project - Market Forecast

    SYKTYVKAR PROJECT - MARKET FORECAST z This Project will enable Mondi to benefit from the strong growth in demand for UCWF and containerboard in the domestic Russian market UCWF / Cut size Paper Demand Forecast White-top liner Demand Forecast CEE incl. Russia Russia (mt) (kt) 4 CAGR CIS Cutsize (C+ G

  16. Slide 16: Syktyvkar Operational Achievements

    SYKTYVKAR OPERATIONAL ACHIVEMENTS z The Russian operation Syktyvkar has been a success story for Mondi, outperforming in the areas of safety, productivity, costs and environmental management Syktyvkar (Russia)(²) 180 ( ) ¹ .a . 160 13 %p z Management % 140 control acquired in Volume per 2002 120 cap

  17. Slide 17: Syktyvkar - Milestones

    SYKTYVKAR - MILESTONES z Milestones of the Project: ¾ Main equipment vendors chosen July/August 2007 ¾ Start construction April 2008 ¾ Project completion mid-2010 PAGE 16

  18. Slide 18: Acquisition Tire Kutsan, Turkey

    ACQUISITION TIRE KUTSAN, TURKEY z On September 3, 2007 Mondi Packaging acquired 54% of Tire Kutsan, the leading Turkish corrugated packaging company z The company has one paper mill producing 120,000 tons of recycled containerboard plus 5 corrugated box plants in Turkey with a board production capac

  19. Slide 19: Acquisition Tire Kutsan Project Rationale

    ACQUISITION TIRE KUTSAN PROJECT RATIONALE z Turkey is forecasted to have the highest growth rates in corrugated packaging in Europe with 12% per annum or additional 1.6 M m2 between 2005 and 2010 Production in M m2 Growth 00-05 Growth 05-10 Pop Prod. / capita 2000 2005 2010 CAGR M m2 CAGR M m2 05 20

  20. Slide 20: Agenda

    AGENDA Strategic Overview Growth Markets Financials PAGE 19

  21. Slide 21: Industry Fundamentals: European Uncoated Fine Paper

    INDUSTRY FUNDAMENTALS: EUROPEAN UNCOATED FINE PAPER { Circa 12 million tonne market, growing at 1200 3% 1 pa 1100 — Western Europe 2% 2 — Eastern Europe 7% 2 1000 { European capacity closures in 2006/2007 €/tonne 900 of 720,000 tpa { Following these closures, capacity 800 utilisation anticipated to

  22. Slide 22: European Demand and Operating Rates Expected to Remain Strong for Uncoated Fine Paper

    EUROPEAN DEMAND AND OPERATING RATES EXPECTED TO REMAIN STRONG FOR UNCOATED FINE PAPER W. Europe 16 Demand (kt) Operating Rate (%) Europe 30 1,3% 10.000 100 Demand (kt) Operating Rate (%) 8.000 7.405 7.495 7.645 7.555 7.705 7.880 80 12.000 110 6.000 60 11.000 1,9% 100 10.000 90 4.000 40 8.640 8.590 8

  23. Slide 23: Industry Fundamentals: European Containerboard and Corrugated Packaging

    INDUSTRY FUNDAMENTALS: EUROPEAN CONTAINERBOARD AND CORRUGATED PACKAGING 750 { Circa 26 million tonne market growing at 700 Kraftliner 175 g Testliner 2 2.7% 1 pa 650 White top Kraftliner — Western Europe 1.4% 1 600 — Eastern Europe 11.0% 1 550 €/tonne { Good demand growth, particularly in 500 German

  24. Slide 24: Current USD makes Europe attractive for imports, overall threat limited

    While current USD makes Europe attractive for imports and pressures exports, overall threat limited z The impact on Mondi should be limited for the following reasons: o UCWF: – 8% of volume exposed to exports (about 4% for cut size) – Relative high entry barriers (distribution channels, Customer own

  25. Slide 25: Impact on Mondi's grades is limited except export-heavy Kraft paper

    Nevertheless with the exception of the export heavy Kraft paper, the impact on Mondi’s grades is limited Overview of Export dependence European Paper Business (Imports, Exports and Net Trade in % of Production) Exports in % of Production Imports in % of Production 34,4 Net Exports in % of Production

  26. Slide 26: Agenda

    AGENDA Strategic Overview Growth Markets Financials PAGE 25

  27. Slide 27: Interim Financial Highlights

    INTERIM FINANCIAL HIGHLIGHTS € millions, except for percentages H1 2007 H1 2006 %Change Group revenue 3,052 2,857 +7 1 EBITDA 421 343 + 23 2 Underlying operating profit 243 166 + 46 3 Underlying profit before tax 203 125 + 62 Reported profit before tax 250 64 4 Underlying pro forma earnings per shar

  28. Slide 28: Costs and Cost Saving Initiatives

    COSTS AND COST SAVING INITIATIVES COST STRUCTURE FIRST HALF 2007 COST SAVINGS - €73 MILLION 200 Depreciation and 2.8% 3.9% 3.6% 2.9% amortisation 180 6.3% 179 180 160 Other net operating 140 expenses Wood, pulp and 120 € million 7.0% fibre 127 33.7% Other variable 100 costs 15.2% 80 60 73 Maintenanc

  29. Slide 29: Interim Cash Flow

    INTERIM CASH FLOW € millions H1 2007 H1 2006 Change EBITDA 421 343 78 Working capital movements (59) (99) 40 Other operating cash flow adjustments (6) (15) 9 Cash inflows from operations 356 229 127 Dividends from associates 1 1 - Tax paid (40) (34) (6) Net cash inflow from operating activities 317

  30. Slide 30: Interim Management Statement (14th November)

    INTERIM MANAGEMENT STATEMENT (14TH NOVEMBER) Group ƒ Overall positive trends and trading momentum of first half have continued ƒ Weakness of US dollar is impacting trade flows ƒ External fibre cost inflation has eased Mondi Packaging ƒ Benefited from a favourable Packaging Paper trading environment

  31. Slide 31: Share Price Performance

    Share Price Performance 120.0 Relative Share Prices of Principal Comparitor Group 110.0 100.0 3July 2007 =100 90.0 80.0 70.0 60.0 Mondi DS Smith IP M-Real Norske Skog Sappi SCA Smurfit Stora Enso UPM 50.0 6-Nov 7-Aug 14-Aug 21-Aug 28-Aug 4-Sep 11-Sep 18-Sep 25-Sep 3-Jul 10-Jul 17-Jul 24-Jul 31-Jul 2

  32. Slide 32: © mondi

    © mondi

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