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.


http://www.mondigroup.com/desktopdefault.aspx

27 Feb Deutsche Bank 1,490.00 Buy

5 Mar Credit Suisse 1,485.00 Outperform

7 Apr Deutsche Bank 1,510.00 Buy

Trading statement Wednesday 13 May

Interim management statement

13 May Davy Research N/A Outperform
13 May Goodbody N/A Hold
12 May Credit Suisse 1,485.00 Outperform

Mondi makes headway in first quarter; shares in paper maker top FTSE 100

By Andrew Neil

May 13 2015, 11:07am
Mike van Dulken, head of research at Accendo Markets, said Mondi’s results were packed full of positives.



Paper maker Mondi (LON:MNDI) pulled off a punchy performance in its first quarter, sending shares to the top of the FTSE 100 this morning.

Operating profit in the three months to March was €236mln the South African company said – that’s 29% above the comparable period last year.

Wood costs, paper for recycling, resin, energy and chemicals costs were all lower than last year, while currency movements also helped out.

The rise in underlying operating profit was also due to volume growth across most of the European businesses.

Contributions from capital projects and acquisitions, and higher selling prices in Russia and South Africa, aided the performance, it said.

On its outlook, the paper and packaging firm said much depends on the macroeconomic environment, but that it remained confident of making good progress for the year.

Mike van Dulken, head of research at Accendo Markets, said Mondi’s results were packed full of positives.

“Average paper selling prices holding up and comparable sales growth across most business, both sequentially and annually, is also welcome news at this stage of the year,” he said.

“While management says the ‘outlook remains macro-dependant’, its confidence in FY progress is going down well with the investment community this early in the year when other corporates are possibly more cautious.”

Shares were still trading 10% higher at 11am, priced at 1,441p.

Questor-share-tip-Mondi-shares-jump-10pc-on-strong-start

14 May Credit Suisse 1,630.00 Outperform
14 May Deutsche Bank 1,640.00 Buy

8 Jul Davy Research N/A Outperform

20 Jul Investec 1,650.00 Buy

28 July 2015

Mondi Group: Trading Statement

In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited, companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on next will differ by at least 20% from those of the previous corresponding period.

Mondi is currently finalising its results for the half year ended 30 June 2015, which will be released on 6 August 2015. It can now be confirmed that underlying operating profit for the half year ended 30 June 2015 is expected to be above that of the comparable prior year period of EUR377 million.

In the six months ended 30 June 2014, the Group recognised a net special item charge after tax of EUR16 million. The net special item charge for the six months ended 30 June 2015 is around EUR36 million, relating mainly to restructuring activities including the closure of a small kraft paper mill in Finland, the closure of a consumer packaging plant in Spain and further restructuring of the US bags business.

Accordingly, Mondi advises that it expects earnings per share (EPS) for the half year ended 30 June 2015 to be within the ranges shown below:

•basic underlying EPS (euro cents) 65 to 70 (2014 51.9), an increase of between 25% and 35%


•basic EPS (euro cents) 57 to 62 (2014 48.6), an increase of between 17% and 28%


•basic headline EPS (euro cents) 57 to 62 (2014 48.3), an increase of between 18% and 28%


Mondi has disclosed basic underlying EPS, which is defined as basic EPS excluding the impact of special items, as the directors believe this provides a useful additional measure of the Group?s underlying performance. Mondi has disclosed basic EPS which includes the effect of special items. The disclosure of basic headline EPS is required under the Listings Requirements of the JSE Limited and has been calculated in accordance with Circular 2/2013 as issued by the South African Institute of Chartered Accountants.

The above information has neither been reviewed nor audited by Mondi?s auditors.

Mondi PLC (MNDI:LSE) set a new 52-week high during today's trading session when it reached 1,544. Over this period, the share price is up 46.39%.

Half year report

Highlights

•Strong performance on all key financial metrics, with all business units delivering significantly improved results

◦Underlying operating profit of ?490 million, up 30%


◦Underlying earnings of 67.8 euro cents per share, up 31%


◦Cash generated from operations of ?538 million, up 23%


◦Return on capital employed of 19%



•Successful delivery on capital projects and acquisitions

◦Recently completed projects delivering ahead of plan


◦Current major projects on time and on budget


◦Turnaround of US Bags business acquired in 2014 on track



•Interim dividend of 14.38 euro cents per share, up 9%

Company News

Mondi profits up 30% off sales lift

Thu, 06 August 2015



(ShareCast News) - Packaging firm Mondi reported first half profits up 30% to €490m, following a boost in sales.
The dual-listed company said underlying earnings per share were up 31% compared with the same half last year to 67.8 euro cents, in line with the underlying profit lift.

Group revenue was up 10% due to higher sales volumes and prices, acquisitions and currency effects. Excluding the effects of acquisitions and disposals, this figure was up 3.9% compared with last year.

Mondi said like for like sales volumes were up across all Europe and international markets, but sales from South Africa were hit by extended annual maintenance at its Richard Bay mill in that region.

An interim dividend of 14.38 euro cents per share, up 9% on the prior year interim dividend of 13.23 euro cents per share was declared.

Management said it was confident about making good progress for the year.

7 Aug Investec 1,700.00 Buy
7 Aug Deutsche Bank 1,750.00 Buy

Shares - so where have investors made money among large caps? Packaging, housebuilders and insurance have been the stand out performers. The idea that you can achieve in excess of 50% profit from a FTSE 100 stock in just over 7 months would seem out of this world. Theoretically large caps are meant to be slow and steady , double digit returns are more the domain of the FTSE250 and lower. Yet international packaging group Mondi (MNDI) has surprised nearly everyone with a 52% gain year-to-date. Its no wonder investors have been clambering to own the stock.

Market Buzz

Mondi downgraded to 'sell' by Goldman Sachs

Wed, 16 September 2015

(ShareCast News) - Mondi, the paper and packaging group, has been downgraded to 'sell' by Goldman Sachs after a strong run in the shares and "stretched" growth expectations.
Goldman said it saw 12% downside to shares in the FTSE 100 group, which was spun-off from miner Anglo American in July 2007, after a 41% price rise since the start of the 2015.

The US bank said it believed growth expectations were stretched, given Mondi's high exposure to kraftliner packaging and near-50% sales exposure to emerging markets.

On publication, Mondi trades at 8.9 times 2016 expected EV/EBITDA on 3% expected EBITDA growth in 2016, versus Goldman's packaging average of 12% and 7.4 times expected EV/EBITDA.

A new target price of 1,300p was set, down from the previous 1,380p.

Last month Mondi reported first half profits up 30% to €490m, following a boost in sales, with the London- and Johannesburg-listed company enjoying said like for like sales volumes were up across almost all European and international markets.

Mondi-drops-on-worries-about-the-packaging-industry.

6 Oct Davy Research N/A Outperform
6 Oct Credit Suisse 1,960.00 Outperform