Mondi Plc · LSE:MNDI
Mondi — Debt Investor Presentation (March 2020)
46 slides from Mondi's debt investor presentation, March 2020
Slide 1: Fixed income investor presentation
Fixed income investor presentation March 2020
Slide 2: Forward-looking statements disclaimer
Forward-looking statementsstatements Mondi: Forward-looking disclaimer disclaimer 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,
Slide 3: Agenda
AGENDA GROUP OVERVIEW AND STRATEGY CAPITAL STRUCTURE AND FINANCIAL POLICIES 2019 FINANCIAL RESULTS SUMMARY APPENDICES
Slide 4: Group overview and strategy
GROUP OVERVIEW AND STRATEGY
Slide 5: A unique platform to deliver sustainable growth
A unique platform to deliver sustainable growth ● Mondi recognised as a leader in sustainability with a unique platform to deliver customer-centric solutions ● Cost-advantaged operations combined with our relentless focus on driving performance ● Focused investments that deliver sustainable returns
Slide 6: Mondi at a glance
Mondi at a glance Corrugated Packaging Flexible Packaging Engineered Materials Uncoated Fine Paper Segment €2,014m €2,708m €979m €1,758m revenue1 Underlying €583 million €543 million €122 million €444 million EBITDA ROCE 24.9% 15.7% 13.8% 25.1% Products End Uses ● FMCG and consumer products ● FMCG p
Slide 7: Leading market positions
Leading market positions Corrugated Packaging Flexible Packaging Engineered Materials Uncoated Fine Paper Kraft paper Uncoated (global) fine paper Containerboard (Europe) Commerical (emerging Europe) release liner (Europe) Uncoated fine paper Virgin containerboard (Europe) Paper bags (Europe) Extrus
Slide 8: Our global footprint
Our global footprint Key Corrugated Packaging aMil ‘© Converting plant Group offices London .- Vienna = Production sites Austria Belgium Bulgaria China Céte divore CzechRepubic @ Ae Egypt Finland i es eerer Flexible Packaging Mill © Converting plant Germany Hungary iraq aly Jordan Lebanon Malaysia M
Slide 9: Strong global presence
Strong global presence Revenue by location of customer Revenue by location of production Net operating assets by location % % % 2% 4% 7% 4% 15% 22% 7% 12% 34% 37% 10% 12% 5% 13% 10% 38% 38% 30% Emerging Europe Western Europe Russia South Africa North America Other All figures for the year ended 31 D
Slide 10: Consistent strategy delivering industry leading performance
Consistent strategy delivering industry leading performance Underlying EBITDA and margin Basic underlying earnings per share € million and % € cents per share 23.6% 22.8% 20.5% 20.9% 19.4% 1,325 1,366 1,482 1,764 1,658 133.7 137.8 148.9 189.1 171.1 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 U
Slide 11: Strong cash generation through the cycle
Strong cash generation through the cycle Cash flow generation € million 648 538 705 516 648 549 715 796 1,039 1,061 972 1,226 1,215 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 More than €10 billion generated since listing Cash flow generation based on net cash generated before c
Slide 12: Strategic framework driving an industry leading performance
Strategic framework driving an industry leading performance 12
Slide 13: Our growth focus – packaging
Our growth focus – packaging Corrugated Flexible Engineered Uncoated Packaging Packaging Materials Fine Paper 13
Slide 14: Cost advantaged operations combined with our relentless focus on driving performance
Cost advantaged operations combined with our relentless focus on driving performance Cost advantaged asset base Focus on driving performance Mondi capacity by quartile of relevant industry cost curve (%) Ongoing processes ● Core organisation competence ● Ongoing process to set profit improvement ini
Slide 15: Integrated value chain (2019)
Integrated value chain (2019) Pulp3 0.2 mt Mondi managed forests Internally procured wood1 Pulp Annual allowable cut 4 million m3 4.4 mt Externally procured wood Containerboard3 8 million m3 14 million m3 1.6 mt Corrugated solutions 1.7 bn m2 Paper for Containerboard 2.5 mt Box plant recycling 1.3 m
Slide 16: Capital investment projects delivering growth
Capital investment projects delivering growth Capital expenditure € million ● Strong contribution: o €75 million in the past 3 years, including €30 million in 2019 187% o €40 million expected in 2020 174% 173% ● Focused capital investment project pipeline securing 147% 132% future organic growth ● K
Slide 17: Growing responsibly
Growing responsibly: Sustainable products Climate People • Our approach • Reduced specific CO2e emissions • 24-hour safety mind-set Paper where possible, plastic when useful by 39% since 2004 and 15.5% • Diversity and Inclusion initiatives: since 2014 o 30% women employed across • Actively developin
Slide 18: Mondi recognised as a leader in sustainability
Mondi recognised as a leader in sustainability Making a real contribution External recognition to the UN SDGs Advanced Reporter A- score for Climate Change ESG Rating AAA Joined The CEO Water and Sustainable Forestry Mandate in 2015 A score for Water Security Low risk rating Sustainability Yearbook
Slide 19: Mondi's approach to sustainable packaging solutions
Mondi’s approach to sustainable packaging solutions …less sustainable products with …the volume of raw material …packaging by developing solutions following our principle used through design, solutions that are designed paper where possible, operational efficiency and for recycling plastic when usef
Slide 20: A unique platform to deliver
A unique platform to deliver High Renewable Low High Recyclable Low Low Barrier functionality High Moisture Grease Mineral Oil Gas Added Barrier Aluminium Paper barriers Material films foil 20
Slide 21: Strong cash generation and balance sheet
Strong cash generation and balance sheet Maintain our strong and stable financial position and investment grade credit metrics • 1.3x net debt / underlying EBITDA • Solid investment grade credit ratings Grow through selective capital investment opportunities • Strong track record and pipeline in pro
Slide 22: Capital structure and financial policies
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Slide 23: Investing in our business and distributions to shareholders
Investing in our business and distributions to shareholders Cash flow generation since listing € billion Strong cash Investing in Taking Divesting Returning generation our cost advantage of non-core and capital to our through the advantaged opportunities underperforming shareholders cycle asset base
Slide 24: Capital structure & financial policies
Capital structure & financial policies Conservative approach to leverage ● Capital structure to maintain investment grade credit metrics ● Articulated as a key strategic objective Single bank facility covenant 3.5x Net Debt/underlying EBITDA ● Significant headroom on current ratio ● Net Debt/underly
Slide 25: Interest and net debt
Interest and net debt € million 2019 2018 % change Net debt 2,207 2,220 (1)% ● Net debt down €13 million reflecting strong cash Average net debt 2,243 1,979 13% generating capacity despite ongoing capital Net interest expense 95 83 14% expenditure programme Effective interest rate 4.2% 4.2% ● Cash g
Slide 26: Committed debt facilities
Committed debt facilities Maturity profile of committed facilities € million 1,000 750 86 500 750 600 250 500 500 - 2020 150 2021 2022 2023 2024 > 2024 Bond RCF facility Other facilities Mondi Group at 31 December 2019 In February 2020, the Group entered into a new €250 million facility maturing in
Slide 27: Credit ratings
Credit ratings Moody’s S&P Issuer Rating: Baa1 Long-Term Corporate Credit Rating: BBB+ Outlook Stable Outlook Stable “ …One of Mondi's key credit strengths is its high “Mondi Group (Mondi) has one of the highest EBITDA profitability, with a Moody's-adjusted EBITDA margin of margins among rated peers
Slide 28: Robust financial position
Robust financial position Net debt and net debt to 12-month trailing underlying EBITDA € million and times 2.4 2.0x 1.7x 1.9 1.5x 1.4x 1.3x 1.3x 1.4 1.1x 1.0x 0.9x 1.0x 0.9 0.4 -0.1 1,364 831 1,875 1,619 1,613 1,498 1,383 1,532 2,220 2,207 -0.6 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net d
Slide 29: 2019 financial results
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Slide 30: 2019 highlights
2019 highlights Underlying EBITDA and ROCE € million and % 23.6% ● Robust financial performance 20.5% 25.0% 20.3% 19.3% 19.8% o Strong margins, returns and cash generation 20.0% 15.0% 10.0% o Recommended full year ordinary dividend up 9% 5.0% 1,325 1,366 1,482 1,764 1,658 0.0% ● Strong cost control
Slide 31: Underlying EBITDA development
Underlying EBITDA development Underlying EBITDA development € million 1,764 (87) (103) 18 1,658 28 45 (14) 25 (18) 2018 Sales Sales Variable Cash fixed Currency Acquisitions Forestry Other 2019 volumes prices costs costs effects & disposals fair value gain Solid operational performance, strong cost
Slide 32: Business unit contribution
Business unit contribution Business unit underlying EBITDA development 2019 underlying EBITDA contribution by business unit¹ € million % (124) 10 (72) 82 (2) 26% 35% 1,764 7% 1,658 32% 2018 Corrugated Flexible Engineered Uncoated Corporate 2019 Corrugated Packaging Flexible Packaging Packaging Packa
Slide 33: Summary
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Slide 34: COVID-19 impact
COVID-19 impact ● The rapid spread of COVID-19 first identified in December 2019 has resulted in an acute deterioration of the political, socio-economic and financial situation globally. ● The Group continues to monitor the impact of COVID-19 on the markets in which it operates and more broadly on t
Slide 35: COVID-19 impact
COVID-19 impact ● Situation remains fluid. Impact to date is contained ● Healthy and safety of our people remains our top priority – various additional measures introduced across the Group ● Risk mitigation includes: ● Diversification ● Customers – Top 10 customers less than 15% of turnover ● Suppli
Slide 36: Key credit highlights
Key credit highlights Strong cash generation and industry leading margins Conservative credit profile and disciplined capital allocation ● Among the highest rated packaging credits ● Baa1 Stable Moody’s since Sept 2017 ● BBB+ Stable S&P since April 2018 ● Balancing leverage, capital investment, shar
Slide 37: Transaction summary
Transaction summary Issuer Mondi Finance Europe GmbH Guarantor Mondi plc Issuer ratings Baa1 / BBB+, both stable (Moody’s / S&P) Expected issue ratings Baa1 / BBB+ (Moody’s / S&P) Format Senior, Unsecured, Reg S, Bearer, NGN Maturity 8-years Size Euro benchmark Coupon Fixed rate, paid annually Docum
Slide 38: Appendices
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Slide 39: Financial review
Financial review € million 2019 2018 % change H2 2019 H2 2018 % change Underlying EBITDA 1,658 1,764 (6%) 764 912 (16%) Depreciation, amortisation and impairments (435) (446) 2% (220) (224) 2% Underlying operating profit 1,223 1,318 (7%) 544 688 (21%) Underlying net finance costs (104) (88) (18%) (5
Slide 40: Cash flow (reconciling to movement in net debt)
Cash flow (reconciling to movement in net debt) € million 2019 2018 % change Underlying EBITDA 1,658 1,764 (6%) Working capital movements 35 (117) Other operating cash flow items (58) 7 Cash generated from operations 1,635 1,654 (1%) Income tax paid (248) (248) – Dividends received from other invest
Slide 41: Statement of financial position
Statement of financial position December December € million 2019 2018 Property, plant and equipment 4,800 4,340 Goodwill 948 942 Working capital 952 972 Other assets 620 540 Other liabilities (728) (749) Net assets excluding net debt 6,592 6,045 Equity 4,015 3,485 Non-controlling interests in equity
Slide 42: Formable paper-based food tray solution
Formable paper-based food tray solution PerFORMing ● Conventional thermoformable trays are made of non-recyclable PET/PE ● A natural, brown or white, formable coated paper solution for food applications such as portion packs and trays ● Collaboration across Mondi’s paper, technical films and coating
Slide 43: Increasing recycled plastic in packaging
Increasing recycled plastic in packaging Film with recycled content ● Developing packaging solutions with increased recycled plastic content to help meet our and our customers’ sustainability pledges ● Consistent quality, product safety and legal compliance compared to existing solution ● A film wit
Slide 44: A premium reclosable and 100% recyclable solution
A premium reclosable and 100% recyclable solution FlexiBag ● Develop a more sustainable flexible plastic packaging bag without sacrificing convenience and shelf-attractiveness ● A premium reclosable and 100% recyclable side gusset plastic bag with a linear and curve tear with or without perforation
Slide 45: Sources and definitions
Sources and definitions Mondi region definitions Europe – Europe including Russia and Turkey Emerging Europe – Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Macedonia, Malta, Moldova, Montenegro
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