Mondi Group Fixed Income Investor Presentation · Fixed Income Investor Presentation April 2016 . 2...

Mondi Group

Fixed Income Investor Presentation

April 2016

2

Agenda

Group Overview and strategy

Capital structure and financial policies

2015 financial results

Operational overview

Summary

Appendices

3

#1 Kraft paper #1 Industrial bags2 #3 Release liner

#2 Virgin containerboard #1 Uncoated fine paper #2 Extrusion coatings Europe

Mondi at a glance

1) Segment revenues, before elimination of inter-segment revenues 2) Also #1 industrial bags producer in North America

2015

Revenue1

&

ROCE

Products

25.5% 13.9% 10.7% 25.6% 30.1%

30%

€2,156m

29% 8%

23%

10%

€2,031m €1,469m €1,233m €652m

South Africa

29%

27% 19%

16%

9%

Packaging Paper Fibre Packaging Uncoated Fine Paper Consumer Packaging

Market

positions

South Africa

#1 BHKP

#1 White-top kraftliner

#1 Uncoated fine paper #1 Containerboard #3 Corrugated packaging Emerging Europe

http://www.mondigroup.com/products/desktopdefault.aspx/tabid-135/

http://www.mondigroup.com/products/desktopdefault.aspx/tabid-75/

4

622 574 699 767 957

15.0% 13.6%

15.3%

17.2%

20.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2011 2012 2013 2014 2015

ROCE

68.1 69.2 95.0 107.3 133.7

2011 2012 2013 2014 2015

CAGR 18.4%

Underlying earnings per share

Consistent strategy delivering industry leading returns

Underlying operating profit and ROCE

€ million Euro cents per share

5

Robust financial position

● Financial policy focused on retaining

investment grade ratings

● Provides confidence and ability to invest

through the cycle

● Current credit ratings:

o Moody’s Baa2 (stable)

o S&P BBB (stable)

● Flexibility within current ratings

Strong cash flow generation and robust balance sheet provide financial flexibility

831 1,875 1,619 1,613 1,498

0.9x

2.0x

1.5x 1.4x

1.1x

(0.5)

-

0.5

1.0

1.5

2.0

2.5

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2011 2012 2013 2014 2015

Net debt Net debt / EBITDA

Net debt and Net debt / EBITDA

€ million

6

Strong cash flow generation through the cycle

1 Net cash generated before capital expenditure, shareholder distributions, acquisitions and disposals 2 Source: FOEX Indexes Ltd

0.3

(1.4)

Cash flow bridge over 5 year period

538 705 516 648 549 715 796 1,037 300

400

500

600

700

2008 2009 2010 2011 2012 2013 2014 2015

Virgin Containerboard

Cash flow generation1 and Virgin Containerboard selling price2

€ / tonne

€ million

€5 .5 b i l l ion cash generated over the las t 8 years

7

Benefiting from a low cost emerging market asset base ...

2015 Net operating assets

by location (%)

20%

29%

51%

Group’s 2015 revenue

by destination (%)

38%

22%

40%

€5.2 billion €6.8 billion Emerging Europe

Other emerging markets

Mature markets

Asset base and sales by destination

... with a balance in sales between higher growth emerging markets and more stable

mature markets

8

6%

19% 20% 21% 23% 17%

15% 16% 18% 19%

33%

32% 34%

34% 36%

41%

31% 29% 26%

21%

Consumer packaging Fibre based packaging Packaging paper Uncoated fine paper Other

Development of Capital Employed per business as a % of total

Consistent, clear strategic focus – growing our packaging

businesses ...

2015 2014 2013 2012 2011

... offering higher growth, diversification and less volatility though the cycle

9

100% 56% 100% 11% 77% 100%

44% 100% 23% 100%

58% 11%

8% 12% 12%

Wh

ite

-to

p k

raftlin

er

Un

ble

ach

ed

kra

ftlin

er

NS

SC

flu

tin

g

Re

cycle

d flu

tin

g

Un

ble

ach

ed

sa

ck

kra

ft p

ap

er

UF

P²

BH

KP

(p

ulp

)³

1) Delivered to Frankfurt except where noted 2) Includes specialities 3) Delivered to Rotterdam 4) Source: RISI and Mondi estimates, Q3 2015. EURRUB 70.46. Includes Varkaus

High quality, low-cost asset base

% capacity in cost quartile across main grades¹

Q4

Q3

Q2

Q1

10

1.7

0.3 1.4

Strong vertical integration

Note: Consumption represents total consumption by Mondi’s downstream operations, including consumption of externally produced paper.

Pulp

Recycled containerboard

Virgin containerboard

Kraft paper

Self

sufficient

~ 60%

integration

~ 20%

integration

~ 70%

integration

4.0

3.8

0.2

Net position Consumption Production Net position Production Consumption

0.7

0.5

0.2

Consumption Production Net position

1.2

0.7

0.5

Net position Consumption Production

m tonnes

m tonnes

m tonnes

m tonnes

11

Investing in our business through the cycle

€3.7 billion invested in capex since 2008

693

517

394

263 294

405

562 595

113%

2012

86%

2011

78%

2010

117%

2009

148%

2008

186%

2013 2014

159%

2015

164%

130%

CAPEX as a % of depreciation and amortisation

Average capex

as

% D&A

Capital expenditure in € million and as % depreciation and amortisation

12

Appro

ved

Under

consid

era

tion

• €310 million

300 ktpa kraft top

white machine at

Ružomberok mill

• Replacement of the

recovery boiler at

Štĕti mill

• Installation of a

90 ktpa kraft paper

machine at one of

our central European

operations

• Other

€121m

• €60m Frantschach

recovery boiler

• €16m Syktyvkar bark

boiler

• €13m Stambolijski

steam turbine and

economiser

• €32m Richards Bay

steam turbine

Major project pipeline delivering strongly

€100 million incremental operating profit delivered from major projects in 2014/2015

€60 million incremental operating profit benefit expected in 2016

2013 2014 2015 2016

€228m

• €70m Štĕti bleached

kraft (155 ktpa)

• €128m Ružomberok

recovery boiler

• €30m Syktyvkar pulp

dryer (100ktpa)

€296m

• €166m Świecie

recovery boiler, turbine

and biomass boiler

• €106m Packaging

Paper

• €24m Fibre Packaging

€124m

• €94m Świecie phase II,

increased softwood

pulp (100 ktpa) and

lightweight kraftliner

(80 ktpa)

• €30m South Africa

Division woodyard

upgrade

2017+

>€500m

13

2010 2015

Packaging Paper

Cost reductions driven by

● Capital investment programme

○ In excess of €650 million invested over past 5 years in

major projects delivering cost and volume benefits

● Rationalisation of high-cost capacity – 4 mills closed or

sold

● Ongoing focus on operational efficiency

○ Exceeded target of 2% reduction in cash cost base per

annum, offsetting inflationary pressures

● Currency benefits due to emerging market currency

weakness mainly in Uncoated Fine Paper and South Africa

Division

Continuing to strengthen our cost leadership position by

investing in our low-cost, high-quality asset base

2010 2015

Uncoated Fine Paper

2010 2015

South Africa Division

Cost per tonne produced (€/t)

-6% -22% -16%

14

Our cash flow priorities remain unchanged

Free cash flow

priorities

As appropriate

Maintain our strong and stable financial position

and investment grade credit metrics

Support payment of dividends to our shareholders

Evaluate growth opportunities through M&A and/or

increased shareholder distributions

Grow through selective capital

investment opportunities

15

Agenda





Summary

Appendices

16

Capital structure & financial policies

Conservative approach to leverage

● Capital structure to maintain investment grade ratings

● Articulated as a key strategic objective

Single bank facility covenant 3.5x Net Debt/EBITDA

● Significant headroom on current ratio

● Net Debt/EBITDA of 1.1x as at 31 December 2015

Rigorous asset management & capital deployment

● ROCE key internal and public management target

● Significant % of management performance indexed to ROCE

Group hedging policies

● Transactional FX exposures hedged

● Interest rate exposure hedged via fixed rate bonds

Dividend policy

● Dividend cover (underlying EPS / DPS) of 2 to 3 times on average through the cycle

17

● Strong balance sheet provides strategic flexibility

● Public credit ratings

○ Moody’s at Baa2 (stable outlook)

○ Standard & Poor’s at BBB (stable outlook)

● Minimal structural subordination of € 96m

Finance costs and net debt

€ million

2014 2015

%

change

Net debt 1,613 1,498 7%

Average net debt 1,675 1,650 2%

Net underlying finance costs 97 105 (8%)

Effective interest rate (before capitalised interest) 5.4% 6.3%

Committed facilities 2,134 2,002 (6%)

Of which undrawn 456 598

Net debt/12-month trailing EBITDA (times) 1.4 1.1

46%

19%

14%

4%

2% 1% 14% Euro

Polish zloty

Czech koruna

Russian rouble

Rand

Pounds sterling

Other

A robust financial position

Currency split of net debt €1,498 million

18 1 Mondi – at 31 December 2015

500 500 85

41

34 23

164

57

593

-

250

500

750

1,000

1,250

1,500

2016 2017 2018 2019 2020 > 2020

Bond Drawn Headroom

Committed debt facilities

● Largest facility is a €750m syndicated revolver maturing in July 2020 with an option to extend by a further year at the second

anniversary date of the facility

€593m was undrawn on the facility at 31 December 2015

● €500m 5.75% bond maturing in April 2017

Maturity profile of committed facilities (€ million)1

19

Credit Ratings

“The Baa2 issuer rating with a stable outlook reflects

Mondi’s well-diversified business profile in terms of

products and regions, underpinned by leading regional

market positions…

…track record of relatively stable and strong margins

compared with peers, owing to the majority of the

group's assets being located in higher-growth and

lower-cost emerging markets...

…strong vertical integration into cost competitive fibre

and energy…

...solid and fairly stable operating performance and

cash generation...

... balanced financial policy, as reflected in a moderate

debt-load…”

Moody’s 24 November 2015

Long-Term Corporate Credit Rating: BBB

Outlook Stable

Issuer Rating: Baa2

Outlook Stable

Moody’s S&P

“The upgrade primarily reflects Mondi's continuous

improvement in operating performance and cash flows and

our expectation that the group will continue to maintain

stable profitability.

It also reflects our view that Mondi's strategy of expanding in

the stable consumer packaging segment partly mitigates the

higher volatility inherent to its other business segments.

We believe that ............. the pipeline of Mondi’s capital

expenditure projects will help to cement strong profitability....

...we consider that Mondi's continued geographical diversity,

leading position in its core markets, customer focus, and

strong cost position, with well-invested production facilities

in emerging markets, remain credit-positive for the rating.”

S&P 11 May 2015

20

8.25 8.90 9.55 13.23 14.38

17.75 19.10

26.45

28.77

37.62

2.6

2.5

2.6 2.6

2.6

1.5

1.7

1.9

2.1

2.3

2.5

2.7

0

10

20

30

40

50

60

2011 2012 2013 2014 2015

Interim dividend Final dividend Dividend cover (times)

Dividends – growing in line with earnings

Dividends declared and dividend cover

Euro cents per share

21

Agenda





Summary

Appendices

22

622 574 699 767 957

15.0% 13.6% 15.3%

17.2% 20.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2011 2012 2013 2014 2015

ROCE

● Excellent results achieved

○ Underlying operating profit up 25%

○ Underlying earnings up 25%

○ ROCE of 20.5%

● Significant profit improvement across all business units

● Capital projects delivering growth

○ €50 million incremental contribution to underlying

operating profit in 2015 from completed investments

○ Strong capital investment pipeline

● €94 million in acquisitions to enhance product offering in

Consumer Packaging

● Recommended full year dividend of 52 euro cents per

share, up 24% on prior year 68.1 69.2 95.0 107.3 133.7

2011 2012 2013 2014 2015

CAGR 18.4%

Underlying earnings per share

Highlights

Strong results on all key metrics

Underlying operating profit and ROCE

€ million

Euro cents per share

23

Operating financial highlights

€ million

2014 2015

%

change

H2

2014

H1

2015

H2

2015

Group Revenue 6,402 6,819 7% 3,254 3,459 3,360

Underlying EBITDA

1,126 1,325 18% 573 671 654

% Margin 17.6% 19.4% 17.6% 19.4% 19.5%

Underlying operating profit

767 957 25% 390 490 467

% Margin 12.0% 14.0% 12.0% 14.2% 13.9%

Group ROCE

17.2% 20.5% 17.2% 19.0% 20.5%

25% increase in operating profit and ROCE of 20.5%

24

43%

13%

12%

18%

14%

2014

€212 million

1 Excludes Corporate costs of €35 million (2014: €33 million)

Divisional operating profit contribution

40%

12% 11%

21%

16%

2015

€102

million

€11

2

milli

on

€14

8

milli

on

€96

milli

on

Packaging Paper remains the largest contributor

EBIT contribution by segment¹

€342m

€102m

€96m

€148m

€112m

€391m

€120m €108m

€212m

€161m

Packaging Paper Fibre Packaging Consumer Packaging Uncoated Fine Paper South Africa Division

25

Agenda





Summary

Appendices

26

300 236 308 342 391

24.5%

17.8% 21.7%

23.7% 25.5%

14.6% 12.0% 14.9% 16.7% 18.1%

2011 2012 2013 2014 2015ROCE Underlying operating profit margin

● Another strong performance, ROCE of 25.5% and

underlying profit up 14% on prior year

● Supported by

○ Higher selling prices in Containerboard

○ Benefits of completed capital investments

- Higher sales volumes of kraft paper and pulp

- Lower energy costs

○ Positive currency effects

○ Strong cost control through cost savings initiatives and

lower average wood, chemicals and energy costs

0.70

0.80

0.90

1.00

1.10

1.20

1.30

2011 2012 2013 2014 2015

VCB RCB Kraft paper Market pulp

Volumes indexed to 2011

Packaging Paper

Underlying operating profit, margin and ROCE

€ million

Production volumes

27

200

300

400

500

600

700

800

2011 2012 2013 2014 2015

€/tonne

Source: FOEX Indexes Ltd

Virgin containerboard (VCB)

● European demand growth of 4.7% in 2015

● Average 2015 European benchmark selling prices

○ Kraftliner brown up 4.4%

○ White-top kraftliner marginally up

● Recent downward pressure on prices due to European capacity increases and competition from emerging markets enjoying weaker currencies

○ Average decline in unbleached kraftliner prices of around €20-€25/tonne in early 2016

○ White-top kraftliner down €10-€15/tonne

Recycled containerboard (RCB)

● European demand growth of 3.9% in 2015

● Average 2015 European benchmark selling prices up 0.9%

● Net capacity additions of ±800 ktpa in 2016, expected to be matched by demand growth

Packaging Paper | industry fundamentals

Selling prices

White-top kraftliner RCB VCB

28

37.2 3.3 2.0-3.0

● Overall containerboard capacity expected to grow in line with demand

● In VCB grades, announced capacity increase likely to be compensated by grade substitution and/or reduction in net imports

○ Net imports of 0.6 million tonnes estimated in 2015

○ US kraftliner can be sold domestically at €100-€140/t higher than in Southern Europe

Incremental containerboard supply expected

to be absorbed by demand in the medium term

Source: demand, capacity and net imports based on RISI European 5 year Packaging Forecast, announced capacity additions and Mondi estimates. Price differential based on RISI US East open market

price vs. US export price delivered to South Europe. Please refer to the disclaimer statement at the end of this presentation in respect of forward looking statements.

2016E-2018E demand and capacity growth estimates in Europe (in mt)

+2-3% CAGR +1-2% +2-3%

Containerboard VCB RCB

7.5 0.6 0.2-0.4

Demand

growth

Net capacity

additions

2015

Capacity

Demand

growth

Net capacity

additions 2015

Capacity

29.7 2.7 1.8-2.6

Demand

growth

Net capacity

additions 2015

Capacity

29

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

2011 2012 2013 2014 2015

Source: Mondi

Sack kraft paper

● European demand moderately weaker

● Softness in export markets

○ Slowdown in construction activity in south east Asia

○ Political instability in Middle East and North Africa

● Average selling prices down 5-6% in early 2016

Speciality kraft paper

● Good demand growth

● Higher average selling prices in 2015

● Selling prices remain stable in early 2016

Packaging Paper | industry fundamentals

Sack kraft paper - Europe

Selling prices

Price indexed to 2011

30

74 93 86 102 120

11.3%

13.9% 11.8%

13.4% 13.9%

4.6% 5.9% 5.1% 5.5% 5.9%


Corrugated Packaging

● 3.3% higher like-for-like sales volumes, good growth in Poland and Czech Republic

● Good cost control and benefits of restructuring in 2014

● Turkey impacted by weaker Turkish lira, political instability and domestic inflation

● Capital investments contributed to improved performance

Industrial Bags

● Sales volumes up 11%

○ US acquisition

○ Market share growth in MENA and Europe

● Higher average selling prices

● Benefits from stronger USD, product innovation, commercial excellence projects and productivity improvements

Extrusion Coatings

● Gains from improved product portfolio

0.700.800.90

1.001.101.201.30

2011 2012 2013 2014 2015


Fibre Packaging

Industrial bags Extrusion coatings Corrugated packaging


Production volumes

€ million

31

32 37 79 96 108

11.6%

9.0% 8.7%

10.4% 10.7%

5.1% 4.8% 5.6%

7.0% 7.4%

2011 2012¹ 2013 2014 2015

ROCE Underlying operating profit margin

1 Excludes €14 million one-off costs relating to Nordenia acquisition

● Underlying operating profit up 13% on prior year

● Margins supported by

○ Strong volume growth in higher value-added segments

○ Commercial excellence initiatives

- Improved sales infrastructure

- Material usage and efficiency

- Improving productivity

- Streamlining innovation process

● Steady progress in repositioning business

○ Exposure to lower value-added products reduced

- Closure of Spanish and Italian operations

- Sale of Malaysian and German plants

○ Ramp-up of Chinese plant and 2014 Polish acquisition

○ Acquisitions of Ascania (Germany) and KSP (South

Korea and Thailand)

- Broadens product portfolio and expands geographical reach

Consumer Packaging


€ million

32

205 186 164 148 212

16.7% 16.7% 16.0% 16.1% 25.6%

14.3% 13.1% 12.3% 11.9% 17.2%


● Strong performance with ROCE of 25.6% and 43%

increase in underlying operating profit

● Selling price increases in Russia

● European prices increased in second half of year

● Sales volumes up 1.7%

● Good cost control through commercial excellence

initiatives

○ Lower wood, energy and chemical costs

● Higher euro pulp costs (up 26%) impact Neusiedler

operations

● Full realisation of benefits from new recovery boiler at the

Ružomberok mill – providing energy efficiencies and

increased pulp production

0.90

0.95

1.00

1.05

2011 2012 2013 2014 2015

Uncoated Fine Paper


Production volumes – Uncoated fine paper

€ million


33

400

450

500

550

600

650

700

750

800

850

900

2011 2012 2013 2014 2015

A4 B-copy Pulp (BHKP)

€/tonne

Source: FOEX Indexes Ltd

Demand

● Europe stable

● Decline in CIS of approximately 4%

Supply

● Significant capacity rationalisation through closures and

conversions - ±720 ktpa over 2015/2016

Prices

● Average benchmark pricing in Europe down 0.7% on prior

year, but up 1.9% in second half

● Price increase in Europe of up to 4% implemented –

effective February 2016

● Price increases in Russia announced for implementation

during Q1 2016

Uncoated Fine Paper | industry fundamentals

Pulp and A4 B-copy prices

34

63 69 93 112 161

8.7% 9.6%

16.0%

21.9%

30.1%

9.8% 9.8% 14.9%

18.8%

24.7%

2011 2012 2013 2014 2015

ROCE Underlying operating profit margin

Comparatives for 2011 have not been restated to include 100% of Mondi Shanduka Newsprint in South Africa Division and consequently reflect a 58% portion

● Strong performance, underlying profit up 44% and ROCE

of 30.1%

● Benefited from

○ Higher average selling prices in pulp and white-top

kraftliner

○ Good cost control

- Focus on improving productivity, driving efficiencies and

reducing waste

○ Significant currency gains on export volumes

● Sales volumes marginally lower, impacted by extended

Richards Bay shut

0.80

0.90

1.00

1.10

1.20

2011 2012 2013 2014 2015

Uncoated fine paper White-top kraftliner Market pulp



Production volumes

€ million


35

Agenda





Summary

Appendices

36

Summary

● Robust business model with proven and clear strategy

● Conservative management committed to investment grade credit metrics

● Strong liquidity position supported by significant cash generation

● Recent credit rating upgrades received from Moody’s and S&P reflecting the improved business risk

37

Indicative terms for potential transaction

Terms and Conditions

Issuer Mondi Finance plc

Guarantor Mondi plc

Expected Note Rating Baa2 stable / BBB stable (Moody's / S&P)

Status Senior Unsecured

Currency EUR

Tenor [7-8] years

Size EUR500m no-grow

Use of Proceeds General Corporate Purposes

Denomination 100k + 1k

Governing Law English

Listing London

Covenants / Terms Negative Pledge, 3mth Par Call

Documentation EMTN Programme

Bookrunners BNP Paribas, Deutsche Bank, UniCredit

38

Q&A

39

Agenda





Summary

Appendices

40

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 than 100,000 different solutions for customers, consumers and industrial end users

● Integrated across the packaging and paper value chain from managing forests and producing pulp, paper and compound plastics, to developing effective and innovative industrial and consumer packaging solutions

Dual listed company structure

● JSE Limited for Mondi Limited (primary listing)

● London Stock Exchange for Mondi plc (premium listing)

● Our products protect and preserve the things that matter and touch the lives of millions everyday

41

Our global footprint

42

Currency

effects

0

Underlying operating profit development

Price, volume and input costs driving profitability

2014 Volume Price Variable

costs

Fixed

costs

Fair value

gains and other

Acquisitions

and

disposals

2015

767 26

142

95 (77) (7) 11 957

€ million

43

Net debt at

31 Dec 2015

Cash flow effects - movement in net debt

Significant cash generation

1,4986338

209

595

253

6

1,613 (1,279)

€ million

Net debt at

31 Dec 2014 Cash generated

from operations

Currency effects

(including

derivatives)

Tax and

financing costs

paid

Capex

investment Dividends paid

to equity holders

Acquisitions and

disposals

Other

44

Strong global presence

20%

10%

8%

7% 4%

40%

11%

Emerging Europe

Asia & Australia

Russia

South Africa

Other

Western Europe

North America

31%

10%

10%

1%

38%

10% Emerging Europe

Russia

South Africa

Other

Western Europe

North America

Sales by location of production €6,819 million

Emerging

Markets

Mature

Markets

48%

24%

18%

10% Consumer related packaging

Industrial packaging

Uncoated fine paper

Other

Product mix

Packaging

38%

10% 9%

3%

34%

6% Emerging Europe

South Africa

Russia

Other

Western Europe

North America

Operating net segment assets by geography €5,219 million

Emerging

Markets

Mature

Markets

Sales by location of customer €6,819 million

45

Financial review

€ million

2014 2015

%

change

H2

2014

H1

2015

H2

2015

Underlying operating profit

767 957 25% 390 490 467

Net underlying finance costs (97) (105) (8%) (47) (59) (46)

Net profit from associates 1 1 - - - 1

Underlying profit before tax 671 853 27% 343 431 422

Tax before special items (126) (161) (28%) (64) (82) (79)

Total non-controlling interests (26) (45) (73%) (11) (21) (24)

Underlying earnings 519 647 25% 268 328 319

Special items (after tax and non-controlling interests) (48) (47) 2% (32) (36) (11)

Reported profit after tax and non-controlling interests 471 600 27% 236 292 308

Basic earnings per share (euro cents) 97.4 124.0 27% 48.8 60.3 63.7

Underlying earnings per share (euro cents) 107.3 133.7 25% 55.4 67.8 65.9

Underlying earnings per share up 25%

46

575 764 711 811 794

10.0%

11.9%

11.0%

12.3% 11.6%

2011 2012¹ 2013 2014¹ 2015Working capital as a % of revenue

12%

1 Working capital as a % of revenue is based on annualised revenue from acquisitions

● Working capital as a percentage of revenue marginally

below revised target range of 12%-14% at year end

● Target range increased to reflect increased contribution

from more working capital intensive downstream

businesses

(68) (83)

(27)

(87)

9

2011 2012 2013 2014 2015

Working capital

Working capital cash flows

Working capital management

€ million

€ million

14%

47

Taxation

€ million

2014 2015

%

change

Tax charge 126 161 (28%)

Cash tax paid 106 160 (51%)

Effective tax rate 19% 19%

● Effective tax rate reflects underlying profit mix of Group plus

○ Benefits of tax incentives related to our capital investments

in Slovakia, Poland and Russia

○ Recognition of deferred tax assets on tax losses

● Expect tax rate to move towards 22% over next three years

○ Based on current geographic profit mix, prevailing tax rates

and

○ In the absence of further investment related tax incentives

Stable tax rate

48

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2011 2012 2013 2014 2015

Pulp Paper Wood Paper for recycling Energy Chemicals Plastics Other variable costs


Input costs

Variable costs

€ million

49

22.1%

22.7% 23.1%

22.8% 23.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

0

500

1,000

1,500

2,000

2,500

2011 2012 2013 2014 2015

Depreciation, amortisation and impairments Other net operating expenses

Personnel costs Maintenance and other indirect expenses

Fixed costs excluding depreciation, amortisation and impairments as a % of revenue


Fixed costs

Fixed costs composition

€ million

50

Further integrating sustainable development into our strategy

*excluding two climate-related commitments for the period 2004-2014

Progress against our 2015 commitments:

29 out of 35 commitments* achieved

Employee and contractor safety

A skilled and committed workforce

Fairness and diversity in the workplace

Sustainable fibre

Climate change

Constrained resources and environmental impacts

Biodiversity and ecosystems

Supplier conduct and responsible procurement

Relationships with communities

Solutions that create value for our customers

Securing access to sustainable fibre Highlight: 100% of owned and leased land is FSC®-certified

Contributing to our communities Highlight: Community engagement plans at all key operations

Minimising our contribution to climate change Highlight: 103% electrical self-sufficiency across our pulp and paper mills

Operating in a world of constrained resources Highlight: 25% of managed land set aside for conservation

Focusing on safety & health and securing talent Highlight: Industry-leading safety performance

Increasing the eco-efficiency of our products Highlight: 22% reduction of waste to landfill

Looking ahead to 2020:

16 commitments across 10 action areas

51

Track record of value accretive acquisitions

2 Duropack plants (Corrugated)

2007 2008 2010 2011 2012 2014

Tire Kutsan (Corrugated)

Loparex Europe &

Asia (Release Liner)

SKG plants (Industrial Bags)

Tekkote (Release Liner)

Swiecie Minorities (Containerboard)

Nordenia (Consumer

Packaging)

Graphic Packaging

plant (Kraft Paper &

Industrial Bags)

Intercell (Industrial Bags) Kutno facility

Poland (Consumer

Packaging)

2015

Ascania & KSP (Consumer

Packaging)

€1 .8bn invested in acquis i t ions s ince l is t ing (EV bas is ) , w hi ls t de leveraging and

achieving/mainta in ing Investment Grade cred i t ra t ing

52

New €310 million, 300 ktpa kraft top white machine investment

Ružomberok mill, Slovakia

Project description ● 300,000 tonne per annum kraft top white machine

● Debottlenecking pulp mill – increasing capacity by 100,000 tonnes per annum

Benefits ● Unique product offering

o targeted at fast growing white-top testliner and white-top kraftliner end uses

o virgin top layer provides higher brightness, printability and stability while recycled layer provides

a cost advantage for customer

o based on Mondi´s proven concept of unbleached kraft top liner grades

● Improves pulp production costs and the mill’s energy balance further benefiting Ružomberok’s overall

cost position

ROCE % Expected to be in excess of Group’s 13% hurdle rate for new investments within 3 years of start-up

Expected Start-up Mid 2019

Conditions ● Tax incentives

● Necessary permitting

53

Production volumes

2014 2015

%

change

Europe & International

Containerboard '000 tonnes 2,160 2,138 (1%)

Kraft paper '000 tonnes 1,130 1,162 3%

Softwood pulp '000 tonnes 2,085 2,108 1%

Corrugated board and boxes million m2 1,343 1,350 1%

Industrial bags million units 4,446 4,925 11%

Extrusion coatings million m2 1,401 1,389 (1%)

Consumer packaging¹ million m2 6,501 6,594 1%

Uncoated fine paper '000 tonnes 1,361 1,379 1%

Hardwood pulp '000 tonnes 1,127 1,161 3%

Newsprint '000 tonnes 202 197 (2%)


Containerboard '000 tonnes 253 247 (2%)

Uncoated fine paper '000 tonnes 258 240 (7%)

Hardwood pulp '000 tonnes 649 619 (5%)

Newsprint '000 tonnes 117 113 (3%)

Softwood pulp '000 tonnes 139 138 (1%)

1 2014 figure restated

54 Source: Bloomberg

Exchange rate development vs EUR

0.600.700.800.901.001.101.201.301.40

0.65

0.70

0.75

0.80

0.85

0.90

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

GBP (LHS) USD (RHS)

24.50

25.00

25.50

26.00

26.50

27.00

27.50

28.00

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

PLN (LHS) TRY (LHS) CZK (RHS)

Emerging markets

8.0

10.0

12.0

14.0

16.0

18.0

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

ZAR vs EUR ZAR vs USD

South African rand

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Aug2013

Dec2013

Apr2014

Aug2014

Dec2014

Apr2015

Aug2015

Dec2015

RUB

Russian rouble

Mature markets

55

Mondi: Forward-looking statements disclaimer

This document includes forward-looking statements. All statements other than statements of historical facts included herein, inc luding, without limitation, those regarding Mondi’s financial position, business strategy, market

growth and developments, expectations of growth and profitability and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements are sometimes identified by the use

of forward-looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”, “continues”, “assumes”, “positioned” or “anticipates” or the negative

thereof, other variations thereon or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements

of Mondi, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements and other statements

contained in this document regarding matters that are not historical facts involve predictions and are based on numerous assumptions regarding Mondi’s present and future business strategies and the environment in which

Mondi will operate in the future. These forward-looking statements speak only as of the date on which they are made.

No assurance can be given that such future results will be achieved; various factors could cause actual future results, performance or events to differ materially from those described in these statements. Such factors include in

particular but without any limitation: (1) operating factors, such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development plans and targets, changes

in the degree of protection created by Mondi’s patents and other intellectual property rights and the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition,

prevailing and future global market prices for Mondi’s products and raw materials and the pricing pressures thereto, financia l condition of the customers, suppliers and the competitors of Mondi and potential introduction of

competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in Mondi’s principal geographical markets or fluctuations of exchange rates and interest rates.

Mondi expressly disclaims

a) any warranty or liability as to accuracy or completeness of the information provided herein; and

b) any obligation or undertaking to review or confirm analysts’ expectations or estimates or to update any forward-looking statements to reflect any change in Mondi’s expectations or any events that occur or circumstances that

arise after the date of making any forward-looking statements,

unless required to do so by applicable law or any regulatory body applicable to Mondi, including the JSE Limited and the LSE.

Disclaimer

56

The information contained in this Information Presentation is only being distributed to and is only directed at (i) persons who are outside the United Kingdom; or (ii) to investment professionals falling within Article 19(5) of the

Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (iii) to high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the

Order (all such persons in (i), (ii) and (iii) above together being referred to as "relevant persons"). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such

securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on the Information or any of its contents.

In any EEA Member State that has implemented the Prospectus Directive, the Information is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. The

"Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in that Member State), and includes any relevant implementing measures in that Member

State.

The information contained in this Investor Presentation does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase the Notes in any jurisdiction or an

inducement to enter into investment activity, and nothing contained herein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding the

securities. Any decision to purchase the securities should be made solely on the basis of the information to be contained in the Prospectus and any supplements to the Prospectus (or equivalent disclosure documents) produced

in connection with the offering of the securities. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of Mondi and the nature of the securities

before taking any investment decision with respect to the securities. The Prospectus and any supplements to the Prospectus (or equivalent disclosure documents) may contain information which differs from the information

contained in this Investor Presentation. Any purchase of securities should be made solely on the basis of the Prospectus and any supplements to the Prospectus (or equivalent disclosure documents) prepared in connection with

the offering of the securities.

The Information has been prepared by Mondi. BNP Paribas, Deutsche Bank and UniCredit Bank AG (the “Managers”) acting in connection with the offering of the securities are acting exclusively for Mondi and no one else, and

will not be responsible for providing advice in connection with the information contained in this Investor Presentation to any party. Subject to applicable law, none of the Managers accepts any responsibility whatsoever and

makes no representation or warranty, express or implied, for the contents of the information contained in this Investor Presentation, including its accuracy, completeness or verification or for any other statement made or

purported to be made in connection with Mondi and nothing in this document or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. The Managers

accordingly disclaim all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred above) which any of them might otherwise have in respect of the information contained in this Investor

Presentation or any such statement.

Disclaimer

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