Mondi Plc · LSE:MNDI
Mondi — Investor Day (September 2013)
20 slides from Mondi's investor day presentation, Sep 2, 2013
Slide 1: Mondi Capital Markets Day: Uncoated Fine Paper
Mondi Capital Markets Day Uncoated Fine Paper Peter Orisich 2 September 2013
Slide 2: UFP at a glance
UFP at a glance The UFP business manufactures and sells a wide range of quality papers for use in offices and professional printing across its four paper mills in Austria, Slovakia and Russia. It also produces newsprint for the Russian domestic market and generates energy during the production proce
Slide 3: UFP operations focused on emerging Europe
UFP operations focused on emerging Europe Mill locations Mill Paper capacity Syktyvkar 710ktpa Ružomberok 560ktpa Total capacity (million tonnes)1 Neusiedler 387ktpa Pulp Paper 1.5 1.7 (1) Including 204,000 tonnes newsprint capacity in Syktyvkar. Approximately 250,000 tonnes of pulp are used by the
Slide 4: Solid financial performance
Solid financial performance Sales (€ million) and EBITDA margin (%) 1 Operating profit (€ million) and ROCE (%) 1 21.6% 20.5% 21.2% 19.1% 16.7% 18.4% 16.9% 16.7% 17.4% 17.7% 14.1% 11.4% 1,565 1,351 1,516 1,429 1,466 740 126 146 179 205 191 102 2008 2009 2010 2011 2012 H1 2013 2008 2009 2010 2011 201
Slide 5: Leading industry return on capital employed
Leading industry return on capital employed UFP ROCE benchmark (%)1 30 25 20 15 10 5 0 2008 2009 2010 2011 2012 H1 2013 -5 -10 2 3 Mondi UFP Key competitor a Key competitor b Key competitor c Key competitor d (1) See appendix for definitions of ROCE. (2) Paper business. (3) 2008 – 2010 Fine Paper Di
Slide 6: UFP demand in structural decline in WE, EE and Russia offer moderate growth
UFP demand in structural decline in WE, EE and Russia offer moderate growth UFP demand growth (CAGR 2007-2012, 2012-2017E) Cutsize demand growth (CAGR 2012-2017E) 2.9% 07-12 CAGR 1.6% 1.4% 07-12 CAGR 12-17E CAGR 0.6% 12-17E CAGR -1.2% -0.6% -1.9% -1.9% -3.0% -3.8% ? -3.7% -5.1% Europe total Western
Slide 7: Mondi consistently outperforming the market
Mondi consistently outperforming the market Total UFP sales volume growth (%) 2% 2% -3% -4% -12% -16% 2012 vs. 2007 YTD Jun 2013 vs. Jun 2012 Industry sales to Europe Industry sales to Europe and overseas Mondi sales Source: Euro-graph deliveries (Euro-graph producers), Pyrabelisk, EMGE and Mondi es
Slide 8: Leading position in Europe, industry rationalisation needed
Leading position in Europe, industry rationalisation needed Top 5 European UFP producers1 European capacity and production (excl. Russia)2 million tonnes Mondi Portucel Stora 12 Enso IP UPM 10 8 6 4 2 0 #1 #2 #3 #4 #5 2012 2013E Production Capacity We believe Mondi is the leading player in Europe
Slide 9: New capacity in Russia to be absorbed by demand growth, market currently balanced
New capacity in Russia to be absorbed by demand growth, market currently balanced Supply / demand balance in Russia 2012 Paper demand and supply in 2013-2016 (forecast) million tonnes million tonnes -0.7 Demand Supply IP’s capacity expansion 0.1 0.82 Mondi 0.81 0.8 Mondi 0.1 0.2 0.7 0.7 IP Others 0.
Slide 10: Low cost operations delivering superior returns on capital
Low cost operations delivering superior returns on capital Delivered costs to Frankfurt of all European machines €/t Integrated Non integrated €/t Semi-integrated Mondi machines 1100 1000 900 800 700 600 500 400 300 200 100 0 Syktyvkar PM14 Ružomberok PM16 Ružomberok PM17 Kematen PM4 Syktyvkar PM11
Slide 11: Syktyvkar forestry operations
Syktyvkar forestry operations Overview 2.1 million hectares under concession, boreal forests, 100% FSC® certified Harvesting: 33 own harvesting units and 17 contractor units with an actual yearly performance of 60,000 m3 / unit (target 2015: 68,000 m3 in average / unit) 3.0+ million m3 harve
Slide 12: Key capital projects
Key capital projects Recovery boiler and improvements in chemical recovery and green energy €128 million and IRR ~ 40% Key benefits include: Increase pulp production (25,000 tonnes p.a.) Ružomberok Reduce the mill’s environmental footprint (dust, CO2, waste water) Improve overall cost posi
Slide 13: Customer led development
Customer led development High-speed inkjet Technical development of inkjet technology from the desktop to the print room New opportunities for transactional printers: digital print requirements for personalized documents (invoices, account statements, pre-filled forms) Lower total cost of prin
Slide 14: Focus on performance: productivity improvements in UFP
Focus on performance: productivity improvements in UFP Productivity per employee index (2008=100) Productivity (tonne / employee) Index, 2008 = 100 170 150 130 110 90 70 100 103 119 135 153 50 2008 2009 2010 2011 2012 Pac k aging Paper | F ibr e Pac k aging | Cons um er Pac k aging | Uncoat ed Fine
Slide 15: Challenges and opportunities
Challenges and opportunities Challenges Weak European economic environment, especially in Western Europe Structural demand decline in Western Europe Capacity restarts announced Reduction of import tariffs in Russia Availability of fibre and increased fibre cost pressures due to demand from
Slide 16: Summary
Summary Group strategic framework UFP value drivers Leading position in the European market, with a focus on emerging Achieve leading Europe and Russia market positions Focus on cutsize grades which enjoy slightly better fundamentals Maintain a high- Low-cost, high-quality asset base: quality,
Slide 17: Appendices
Appendices
Slide 18: UFP market position and market outlook sources and definitions
UFP market position and market outlook sources and definitions Market position estimates: Uncoated fine paper - based on sales volume of universal grades. Source: EMGE Woodfree Report, December 2011, Eurograph delivery statistics 2012, Pyrabelisk and management estimates. Europe defined as Europe in
Slide 19: UFP ROCE benchmark notes
UFP 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, deferred tax, and oth
Slide 20: 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