Mondi is an international packaging and paper Group, employing around 26,000 people in production facilities across 31 countries. In 2013, Mondi had revenues of €6.5 billion and a return on capital employed (ROCE) of 15.3%. The Group’s key operations are located in central Europe, Russia, the Americas and South Africa. It is fully integrated across the paper and packaging process – from growing of wood and the manufacture of pulp and paper (including recycled grades), to the conversion of packaging papers into corrugated packaging and industrial bags. It has primary listings on the Johannesburg Stock Exchange and the London Stock Exchange. It is a constituent of the FTSE 250 Index


Wood
Wood is Mondi’s most important raw material. It is therefore in our interest to ensure that we meet and support the requirements of sustainable forestry practices, from the management of our own forests right through to the procurement of our wood and fibre through the supply chain.


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Forestry
As a significant holder and manager of land, particularly in developing countries, and as an operator in an industry that potentially has a high impact on the natural environment, we recognise our stewardship role and responsibility in using natural forestry resources in a sustainable way.

Forests provide a range of goods and services. They serve as habitats for two-thirds of terrestrial animal and plant species; prevent soil erosion and water run-off; maintain the chemical balance of soil, air and water; recycle nutrients; break down pollutants; clean the air and water; are vital to watershed protection and soil formation; and play a major role in regulating climate.

The main factors contributing to deforestation and forest degradation are increased agriculture, illegal logging, population growth, poverty and urbanisation. Primary concerns include deforestation resulting from illegal logging in protected or high conservation value (HCV) areas, and timber obtained from controversial sources.

Although Mondi is involved in the felling of trees, we are not party to deforestation. For every tree felled in our plantation forests, at least one more tree is planted. In our natural forests, felled areas are left to regenerate naturally and poor regeneration is supplemented with plantings. Mondi is not involved in illegal logging, or logging in tropical rainforests, and has strict fibre sourcing controls.

Pulp
Wood is an essential raw material for all of our virgin fibre-based products. From wood fibre we produce pulp, the basic ingredient of all paper and paper-based packaging. We use pulp in our own production and also sell it wholesale to third parties. The pulp for paper-making may be produced from virgin fibre by either chemical or mechanical means, or it may be produced by the re-pulping of recovered paper. In the pulping process, the raw cellulose-bearing material is broken down into its individual fibres. In chemical pulping, chemicals are used to dissolve the lignin and free the fibres.

Recovered paper has become an indispensable raw material for our business and, in 2011, we consumed 1.5 million tonnes of recovered fibre, amounting to 30% of our total pulp consumed.

The pulp and paper manufacturing process also requires a large amount of process water and energy (in the form of steam and electrical power), which makes it an energy- and natural resource-intensive one.


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Simplification of corporate structure
PRN
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION
Mondi Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1967/013038/06)
JSE share code: MND ISIN: ZAE000156550
Mondi plc
(Incorporated in England and Wales)
(Registered number: 6209386)
LEI: 213800LOZA69QFDC9N34

JSE share code: MNP ISIN: GB00B1CRLC47
LSE share code: MNDI
As part of the dual listed company structure, Mondi Limited and Mondi plc (together Mondi Group, the Group or Mondi) notify both the JSE Limited and the London Stock Exchange of matters required to be disclosed under the Listings Requirements of the JSE Limited and/or the Disclosure Guidance and Transparency and Listing Rules of the United Kingdom Listing Authority.
This announcement contains inside information.
19 November 2018
Simplification of corporate structure
The Boards of Mondi plc and Mondi Limited (the Boards) announce that they are proposing to simplify the existing Mondi Group structure from the current dual listed company structure ("DLC") into a single holding company structure under Mondi plc. Mondi plc will continue to have a premium listing on the London Stock Exchange (LSE) and will have an inward secondary listing on the Johannesburg Stock Exchange (JSE) quoted in rand.
The simplification will be implemented by way of a South African scheme of arrangement whereby Mondi plc will acquire Mondi Limited. Mondi Limited shareholders will receive one new Mondi plc share in exchange for each Mondi Limited share held. Following the simplification, each Mondi plc shareholder will have the same voting and capital interests in the Group as each Mondi Limited and Mondi plc shareholder currently has.
Since its formation in 2007, Mondi has been an integrated corporate group established under a DLC structure with dual holding companies, Mondi plc, listed on the LSE with a secondary listing on the JSE holding the non-South African interests of the Group, and Mondi Limited, listed on the JSE holding the South African interests of the Group. Operating as a combined group, Mondi is governed by complex arrangements to maintain parity between the economic and voting rights of the Mondi plc and Mondi Limited shareholders. At the time of formation, this structure reflected the fact that the majority of Mondi's business was located in Europe, whilst recognising Mondi's South African heritage and its significant ongoing operations in the country. The shares in Mondi plc and Mondi Limited currently represent approximately 76% and 24%, respectively, of the Mondi Groups combined ordinary share capital.
Mondi has achieved very strong profit growth since listing and, as the Group has evolved, its non-South African interests have grown faster than its South African interests, reflecting the relative scale of opportunities in the respective markets. Today, over 90% of the Group's underlying earnings are generated outside South Africa. This results in an imbalance between the share of the Group dividend Mondi Limited is required to support (approximately 24%) and the contribution of Mondi Limited to Mondis profit available for distribution. The proposal will simplify cash and dividend flows.
Mondi remains fully committed to South Africa with the South African operations being an important part of Mondi, contributing to the Groups industry leading performance. Streamlining the corporate structure will facilitate continued investment in the South African operations, estimated at over R8 billion over the next five years, including the ongoing investment in forestry assets and modernisation of the Groups pulp, containerboard, and paper assets.
The simplification will also enhance strategic flexibility, increase transparency and remove the complexity associated with the current structure. The simplification will not result in any changes to the management, operations, locations, activities or staffing levels of the Mondi Group.
Mondi has received written approval from the Minister of Finance through the South African Reserve Bank (SARB) to simplify the existing Mondi Group structure and to operate under Mondi plc as a single holding company.
Mondi plc will continue to be incorporated in the UK and will remain UK tax resident. Mondi Limited will remain incorporated and tax resident in South Africa and will become a subsidiary of Mondi plc. Mondi plc will continue to have a pound sterling quote on the LSE and will have an inward secondary listing on the JSE quoted in rand. Dividends will continue to be declared in euros. Shareholders holding Mondi plc shares on the JSE will continue to receive payment in rand. The Groups dividend policy remains unchanged.
Mondi plc shares will continue to be included in the FTSE 100 index. Today Mondi Limited shares are not eligible for inclusion in the FTSE 100 index. Following the issue of Mondi plc shares in exchange for Mondi Limited shares as a result of the simplification, it is expected that Mondi plc's weighting in the FTSE 100 index will increase. Mondi plc shares are expected to continue to be eligible for inclusion in the key JSE indices.
The simplification is not expected to have any significant impact on the reported profits or net assets of the business.
The simplification is subject to certain conditions, including, among other things, the approval of the shareholders of Mondi plc and Mondi Limited. A shareholder circular, scheme document and prospectus are expected to be made available to shareholders in the first half of 2019, with implementation of the simplification currently expected in the second half of 2019.
Peter Oswald, Chief Executive of Mondi, commented, "Mondi has delivered a strong track record of value accretive growth since listing. While we have successfully operated as a DLC to date, the evolution of the Group since its formation in 2007 means that we need to consider the appropriate structure for the future. The proposed simplification is a natural step to remove the complexities around our structure and make our corporate framework more efficient. Our South African operations remain important to the Group and the proposed simplification facilitates the modernisation of our Richards Bay mill and ongoing capital expenditure in South Africa. Our strategy of delivering value accretive growth focused around innovative and sustainable packaging and paper solutions remains unchanged".

11:00 04/01/2019
Broker Forecast - Jefferies International issues a broker note on Mondi PLC
Jefferies International today reaffirms its buy investment rating on Mondi PLC (LON:MNDI) and cut its price target to 1950p (from 2250p). Story provided by StockMarketWire.com Broker Forecasts data provided by www.sharesmagazine.co.uk