Mondi Plc · LSE:MNDI
Mondi — Investor Presentation (February 2017)
26 slides from Mondi's investor presentation, February 2017
Slide 1: Corporate investor presentation
Corporate investor presentation February 2017
Slide 2: We are Mondi: In touch every day
We are Mondi: IN TOUCH EVERY DAY ● Leading international packaging and paper Group ○ around 25,000 employees ○ present in more than 30 countries ○ key operations located in central Europe, Russia, North America and South Africa ● Offering over 100 packaging and paper products, customised into more t
Slide 3: Industries we serve
Industries we serve Agriculture Automotive Building and construction Chemical Food and beverages Home and personal care Medical and pharmaceutical Office and professional printing Packaging and paper converting Pet care Retail and eCommerce Shipping and transport 3
Slide 4: Our global footprint
Our global footprint Key Packaging paper Fibre packaging Consumer packaging Uncoated fine paper Pulp Forestry Corporate offices Production sites Johannesburg Austria Greece Morocco South Korea London Belgium Hungary Netherlands Spain Vienna Bulgaria Iraq Oman Sweden China Italy Poland Thailand Côte
Slide 5: Mondi at a glance
Mondi at a glance Packaging Paper Fibre Packaging Consumer Packaging Uncoated Fine Paper South Africa €2,056m €1,929m €1,562m €1,246m €594m 10% 8% 2016 30% 28% 23% 17% Revenue1 & 8% 21% 29% 26% ROCE 22.4% 13.5% 10.5% 36.0% 27.8% Products 1) Segment revenues, before elimination of inter-segment reven
Slide 6: Our key market positions
Our key market positions #1 #1 #1 Kraft paper and industrial bags Uncoated fine paper producer in Containerboard producer in producer in Europe Europe emerging Europe #2 #1 #3 Hardwood pulp, Virgin containerboard producer white-top kraftliner and Corrugated packaging producer in Europe uncoated fine
Slide 7: Consistent strategy delivering industry leading returns
Consistent strategy delivering industry leading returns Underlying operating profit and ROCE Underlying earnings per share € million Euro cents per share 25.0% CAGR 18.8% 20.5% 20.3% 20.0% 17.2% 15.3% 13.6% 15.0% 10.0% 5.0% 574 699 767 957 981 69.2 95.0 107.3 133.7 137.8 0.0% 2012 2013 2014 2015 201
Slide 8: Strong cash flow generation through the cycle…
Strong cash flow generation through the cycle… Cash flow generation1 € million 549 715 796 1,039 1,061 2012 2013 2014 2015 2016 €4.2 billion cash generated from 2012 - 2016 1) Net cash generated before capital expenditure, shareholder distributions, acquisitions and disposals 8
Slide 9: ...with a balance between reinvestment for growth and shareholder distributions
...with a balance between reinvestment for growth and shareholder distributions Cash flow bridge over 5 year period (2012 – 2016) € billion (2.3) 4.2 (0.9) (1.6) 0.6 Free cash flow Invested in Distributed to Spent on Change in generated asset base shareholders acquisitions net debt 9
Slide 10: Benefiting from an emerging market asset base
Benefiting from an emerging market asset base Asset base and sales by destination 2016 Net operating assets Group’s 2016 revenue by location (%) by destination (%) 21% 36% 36% 50% 29% 28% Emerging Europe €5.6 billion Other emerging markets €6.7 billion Mature markets ...with a balance in sales betwe
Slide 11: Strong track record of acquisitions
Strong track record of acquisitions Kutno facility Excelsior Swiecie Ascania Poland Intercell SIMET Lebedyan Technologies Minorities (Consumer (Consumer (Industrial Bags) (Corrugated) (Corrugated) (Consumer (Containerboard) Packaging) Packaging) Packaging) 2012 2014 2015 2016 2017 Graphic Nordenia 2
Slide 12: Consistent, clear strategic focus – growing our packaging business
Consistent, clear strategic focus – growing our packaging business Development of Capital Employed per business as a % of total 15% 35% 19% 25% 2012 2013 2014 2015 2016 Consumer packaging Fibre based packaging Packaging paper Uncoated fine paper Other 12
Slide 13: Underpinned by our strategic framework
Underpinned by our strategic framework Mondi Capital Markets Day 2015 13
Slide 14: Our low-cost asset base
Our low-cost asset base % capacity in cost quartile across main grades¹ Q4 12% 8% 12% Q3 57% 11% 30% 100% 24% 40% Q2 100% 70% 100% 11% 37% 100% Q1 Unbleached sack Unbleached NSSC fluting Recycled fluting White-top UFP² BHKP (pulp)³ kraftliner kraftliner kraft paper 1) Delivered to Frankfurt except w
Slide 15: And pulp and paper integration
And pulp and paper integration Pulp Virgin containerboard million million 4.2 1.6 tonnes Self tonnes ~ 15% 0.2 1.4 sufficient integration 4.0 0.2 Production Consumption Net position Production Consumption Net position Recycled containerboard Kraft paper million million tonnes ~ 85% tonnes ~ 70% inte
Slide 16: Investing in the business through the cycle while reacting to the 2008/2009 downturn
Investing in the business through the cycle while reacting to the 2008/2009 downturn Capital expenditure in € million and as % depreciation and amortisation 186% Average CAPEX 159% 164% as % D&A 147% 130% 124% 117% 113% 86% €600 - €650 million €800 - €850 million 78% 693 562 595 517 465 394 405 263
Slide 17: Major project pipeline delivering strongly
Major project pipeline delivering strongly 2013 2014 2015 2016 2017+ • €60m Frantschach • €70m Štĕti • €166m Świecie • €94m Świecie • €310m 300 ktpa kraft top white recovery boiler bleached kraft recovery boiler, phase II, increased machine at Ružomberok mill (Austria) (155 ktpa, Austria) turbine an
Slide 18: Continuing to strengthen our cost leadership position
Continuing to strengthen our cost leadership position by investing in our low-cost, high-quality asset base Cost per tonne produced (€/t) ● Cost reductions driven by: ○ Capital investment in major projects delivering cost and volume benefits -11% -23% -19% ○ Rationalisation of high-cost capacity ○ O
Slide 19: Innovating through customer cooperation
Innovating through customer cooperation ● Dedicated resources driving innovation ○ €19 million on R&D in 2016 ○ 6 business competence centres ● Close cooperation with customers, universities and research partners Advantage Kraft White Print and HYBRIDPRO SquareBag Advantage Semi Extensible White Pri
Slide 20: Twinings case study
Twinings case study • High shelf differentiation ▶ Excellent brand presentation • High-barrier properties ▶ Perfect protection Sold in over • High-barrier laminates ▶ Long shelf life without loss of flavour 115 countries • Transparent window ▶ Makes product visible Goal • Integrated zipper ▶ Keeps t
Slide 21: Our cash flow priorities remain unchanged
Our cash flow priorities remain unchanged Maintain our strong and stable financial position and investment grade credit metrics Grow through selective capital investment Free cash flow opportunities priorities Support payment of dividends to our shareholders Evaluate growth opportunities through M&A
Slide 22: Robust financial position
Robust financial position Net debt and Net debt / 12-month trailing EBITDA ● Financial policy focused on retaining investment grade ratings 2,000 € million 1,800 2.5 ● Provides confidence and ability to invest 2.0x 1,600 2.0 through the cycle ● Current credit ratings: 1,400 1.5x 1.4x 1.5 1,200 1,000
Slide 23: Strong growth in shareholder returns without sacrificing cover
Strong growth in shareholder returns without sacrificing cover Dividends declared per share and dividend cover ● 2-3x dividend cover policy across the cycle Euro cents per share 57 ● Compound annual growth rate in 60 52 3.1 50 dividend over past five years of 19% 42 ● Option to return excess capital
Slide 24: Growing responsibly
Growing responsibly Looking ahead to 2020: 16 commitments across 10 action areas ● Employee and contractor safety ○ Promote a safe and healthy workplace ○ Our goal is zero harm to employees and contractors ● A skilled and committed workforce ○ Engage with our people to create a better workplace ● Fa
Slide 25: Market positions sources and definitions
Market positions 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, M
Slide 26: Forward-looking statements disclaimer
Forward-looking statements 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, market growth and developments, expectation