Mondi Plc · LSE:MNDI
Mondi — Investor Day (September 2013)
25 slides from Mondi's investor day presentation, Sep 2, 2013
Slide 1: Mondi Capital Markets Day: Packaging Paper
Mondi Capital Markets Day Packaging Paper Peter J. Oswald | Maciej Kunda 2 September 2013
Slide 2: Packaging Paper at a glance
Packaging Paper at a glance The Packaging Paper business manufactures and sells a wide range of virgin and recycled containerboard as well as kraft paper for conversion into corrugated board, trays and displays, industrial bags, consumer packaging and other paper based products. Product portfolio Kr
Slide 3: Solid financial performance
Solid financial performance Sales (€ million) and EBITDA margin (%)1 Operating profit (€ million) and ROCE (%)1 19.5% 16.9% 24.4% 15.5% 18.7% 15.9% 17.9% 20.1% 17.0% 9.1% 13.6% 3.5% 1,467 1,195 1,746 2,006 1,896 1,043 139 178 295 227 148 25 2008 2009 2010 2011 2012 H1 2013 2008 2009 2010 2011 2012 H
Slide 4: Focused on central Europe and Russia
Focused on central Europe and Russia Packaging Paper locations1 Kraft Paper Mill Containerboard Mill (1) Including Tire Kutsan. The financial results of Tire Kutsan are reported under the Fibre Packaging business segment. Packag i n g Pap er | F i bre Packagi ng | Consum er Packagi ng | Uncoat ed F
Slide 5: Integrated value chain
Integrated value chain Value chain1 Recovered paper Paper consumption (2012): Virgin & recycled 1.4 million tonnes containerboard Production (2012): 2.1 million tonnes 10 mills Pulp mill Paper mill Self-sufficient in pulp Wood Softwood consumption (2012): 6.5 million m3 Kraft paper Hardwood consumpt
Slide 6: Packaging Paper's integration with downstream businesses
Packaging Paper’s integration with downstream businesses1,2 Kraft Paper Recycled Containerboard Virgin Containerboard3 milion million million tonnes tonnes tonnes 1.6 1.6 1.6 ~ 20% integrated 1.4 1.4 1.4 ~ 60% 1.2 0.2 1.2 integrated 1.2 1.0 1.0 ~ 65% 1.0 integrated 0.8 0.8 0.8 0.6 1.4 0.6 0.6 0.6 1.
Slide 7: Kraft paper leading position in Europe
Kraft paper leading position in Europe Top 5 European kraft paper producers Overview (based on capacity)1 Mondi ● Kraft paper is used for a variety of industrial (cement, chemicals, agricultural products, Billerud animal feed), consumer (food, pet care, DIY- Korsnas building materials), medical and
Slide 8: Containerboard leading market positions in Europe
Containerboard leading market positions in Europe Top 5 emerging Europe regional containerboard Top 5 European VCB producers (based on sales)1 producers (based on capacity)1 Smurfit Kappa Mondi Mondi Billerud Modern SCA Korsnas Karton Prinzhorn Ilim Stora Enso Rubizhansky Cardboard #1 #2 #3 #4 #5 #1
Slide 9: A clear and consistent strategy that is delivering industry leading returns
A clear and consistent strategy that is delivering industry leading returns Packaging Paper Combined Packaging Paper & Fibre Packaging ROCE1 ROCE1 benchmark (%) benchmark (%) 30 25 25 20 20 15 15 10 10 5 5 0 0 2008 2009 2010 2011 2012 H1 2013 2008 2009 2010 2011 2012 H1 2013 Mondi PP&FP Mondi PP Key
Slide 10: Mondi sales outperforming the industry in key paper grades
Mondi sales outperforming the industry in key paper grades Mondi VCB sales growth vs. industry (%)1 Mondi sack kraft paper sales growth vs. industry (%)2 8% 4% 1% 3% 0% 2% 1% -4% 2012 vs. 2007 YTD June 2013 vs. June 2012 2012 vs. 2007 YTD June 2013 vs. June 2012 Industry Mondi Industry Mondi (1) Bas
Slide 11: Growth in European containerboard expected to be driven by emerging Europe and Russia
Growth in European containerboard expected to be driven by emerging Europe and Russia Containerboard growth forecast RISI (%)1 million tonnes -1.3% +3.7% +0.5% 22.0 21.3 21.1 +3.5% 10.9 20.6 9.1 7.7 7.9 2007 2008 2012 2017E 2007 2008 2012 2017E Western Europe Eastern Europe (including Russia) (1) RI
Slide 12: New containerboard capacity coming on stream
New containerboard capacity coming on stream Major RCB European future expansions Stora Enso SKG 2013 – 455kt 2014 – neutral Blue Paper 2013 – 280kt KIPAS 2013 – 400kt Prinzhorn 2013 – 80kt l Expansions represent 5% of estimated current European RCB demand (excluding Russia) Source: Mondi. Excludes
Slide 13: Product and service innovation - containerboard
Product and service innovation - containerboard l ProVantage Aqua Liner and Fluting: ¡ Water repellent containerboard grades to substitute wax coated products used in high humidity and cold storage applications, such as fish boxes and frozen foods ¡ Elimination of problems during conversion of wax c
Slide 14: Product innovation - kraft paper
Product innovation - kraft paper l Advantage Select: ¡ High porous sack kraft paper allowing 2-ply industrial bag constructions replacing perforated 3-ply bags ¡ Customer benefits from reduced paper consumption, dust-free filling, fewer breakages and excellent slip resistance l Fibromer®: ¡ Polymer
Slide 15: Low cost asset base (1/2)
Low cost asset base (1/2) Delivered costs to Frankfurt Global unbleached sack kraft paper European unbleached kraftliner (key mills) €/t €/t 800 1: Štětí PM5 550 1: Swiecie PM3 750 2: Stambolijski PM2 2: Swiecie PM2 500 700 3: Frantschach PM6 3: Swiecie PM5 650 4: Frantschach PM8 450 4: Swiecie PM1
Slide 16: Low cost asset base (2/2)
Low cost asset base (2/2) Delivered costs to Frankfurt European recycled fluting1 Global white top kraftliner2 €/t €/t 500 1: Swiecie PM7 700 1: Syktyvkar PM21 2: Raubling PM7 2: Richards Bay PM23 450 600 Current 400 exchange rate4 350 500 2 2 300 2 400 1 250 1 300 200 150 200 100 100 50 0 0 11 mt 0
Slide 17: Key capital projects
Key capital projects New bleached kraft paper machine l €70 million investment l 150,000 tonnes production capacity l Start up: 2014 Štětí l Project rationale: ¡ Bleached pulp integration ¡ Growing customer demand for bleached sack kraft paper in Europe (printability and POS) ¡ Immediate downstream
Slide 18: Continuous productivity improvements
Continuous productivity improvements Productivity per employee index (selected mills)1 Operational excellence overview Productivity (tonne / employee) l Continuous improvement approach focused Index, 2001 = 100 on improvement in: ¡ Profitability 300% ¡ Quality 280% ¡ Efficiency 260% l Progress is tr
Slide 19: Focus on performance highlights
Focus on performance highlights l Swiecie PM7: ¡ Built in 16 months (from earth works to start-up) ¡ Remarkable start-up curve with saleable quality production on the 3rd day and “A” quality on the 4th day (benchmark: 3-6 weeks) Superior capex execution l Frantschach recovery boiler: ¡ Built within
Slide 20: Challenges and opportunities
Challenges and opportunities Challenges l Timber constraints and competition from biomass l Low profitability of RCB industry in Europe Opportunities l Leverage unique low cost position of Kraft Top Liner arising from Mondi’s combined RCB and VCB capacity at Swiecie (Poland) to improve growth l Furt
Slide 21: Summary
Summary Group strategic framework Packaging Paper value drivers ● Leading market positions, emerging markets focus Achieve leading market positions ● Overall low-cost position ● Overall high-quality integrated asset base Maintain a high- quality, low-cost asset base ● Additional bleached kraft paper
Slide 22: Appendices
mondi Appendices
Slide 23: Packaging Paper market positions and market outlook sources and definitions
Packaging Paper market positions and market outlook sources and definitions Mondi market positions region definitions: Europe - Europe including Russia and Turkey. Emerging Europe - Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Geo
Slide 24: Packaging Paper ROCE benchmark notes
Packaging Paper ROCE benchmark notes Return on Capital Employed (ROCE) definitions: Mondi: ROCE: Trailing 12 month underlying operating profit (including share of associates’ net income) / 12 month trailing capital employed. Capital employed: net segment assets plus investment in associates, deferre
Slide 25: 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