25
INVESTOR SITE PRESENTATION DAVID HATHORN 27/28 NOVEMBER 2007
INVESTOR SITE PRESENTATION
DAVID HATHORN
27/28 NOVEMBER 2007
PAGE 1
AGENDA
Mondi
Organisation
Safety & Sustainable Development
PAGE 2
AGENDA
Mondi
Organisation
Safety & Sustainable Development
PAGE 3
MONDI STRATEGIC DRIVERS
Leading market position— Leading market positions — High exposure to:
– Attractive product segments– Attractive geographies
Strong asset base— Upstream production cost advantages
– 100% of kraftliner and 91% of universaloffice paper in lowest cost quartile
— Vertically integrated– Up to 51% self-sufficient low cost wood
Focus on performance— Comprehensive Business Excellence
Programmes— Continuous cost reduction and productivity
improvement
Growth— Organic and through acquisition
Mondi Group sales
60%
40%
Emerging markets Mature markets
Mondi Group operating assets
70%
30%
Emerging markets Mature markets
Mondi Group sales H1 2007
45%
55%
Emerging markets Mature markets
Group net operating assets June 2007
61%
39%
Emerging markets Mature markets
Indicative Position 2010
PAGE 4
UCWF and Corrugated demand growth per region
Demand growth in %.1Sources: EMGE Woodfree Forecast Report; October 2007 for Eastern and Western Europe. World Paper markets 2020, Pöyry 2005 Edition for CIS. CIS market growth from 2004 –2010.2Source: ICCA.
CISEEWE
9,8
1,3
6,6
UCWF 2006 - 2011 demand growth (in %)1 Corrugated 2005 - 2010 demand growth (in %)2
EE
8,2
WE
1,8
PAGE 527/11/2007 14:29MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt
25 25 2630 30
3337 39
4247
BrazilSouth A
frica
RussiaChile
Australia
Poland
Portugal
SwedenFinlan
dFrance
SUPERIOR ACCESS TO LOW-COST WOOD
Average Hardwood and Softwood Costs (€/m3, Q2 2007)
Source: Pöyry Forest Industry Consulting
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BENEFITING FROM INTEGRATED VALUE CHAIN
(1) Refers to Mondi’s demand and self-sufficiency of packaging paper (including MP and MPSA). Paper is the end product for non-packaging businesses.Notes: 2006 figures. Forestry figures are based on annual allowable cut (excluding firewood).Source: Mondi
Mondi’s own availability
Mondi’s own demand
Forestry Pulp Paper
Potential self sufficiency 51%
7.6mm3
14.8mm3
91%
3.5Mt
3.8Mt
154%(1)
5.8MtPackaging: 3.3Mt
2.1Mt(1)
PAGE 7
GROWTH
At 30th June 2006 61% of asset base was deployed in emerging markets.
Estimated emerging market share of asset base will grow to 70% by close of 2010
Major investments targeted at emerging markets:- Containerboard and box plant – Eastern Europe- Syktyvkar modernisation expansion – Russia- Tire Kutsan acquisition - Turkey
PAGE 8
INTERIM FINANCIAL HIGHLIGHTS
ALL KEY INDICATORS UP
€ millions, except for percentages H1 2007 H1 2006 %Change
Group revenue 3,052 2,857 + 7EBITDA 1 421 343 + 23Underlying operating profit 2 243 166 + 46Underlying profit before tax 3 203 125 + 62Reported profit before tax 250 64 Underlying pro forma earnings per share (€ cents per share) 4 22.6 11.9 + 90Interim dividend per share (€ cents per share) 7.3 n/a n/aCash inflow from operations 356 229 + 55Group ROCE 5 10.0% 8.2% + 22
1 EBITDA is operating profit of subsidiaries and joint ventures before special items, depreciation and amortisation. 2 Underlying operating profit is operating profit of subsidiaries and joint ventures before special items. 3 Underlying profit before tax is reported profit before tax before special items. 4 Underlying earnings per share is before special items and based on shares issued on admission. 5 Group ROCE is an annualised measure based on underlying operating profit including share of associates' net earnings divided by average trading capital employed.
PAGE 9
INTERIM MANAGEMENT STATEMENT (14TH NOVEMBER)
GroupOverall positive trends and trading momentum of first half have continuedWeakness of US dollar is impacting trade flowsExternal fibre cost inflation has eased
Mondi PackagingBenefited from a favourable Packaging Paper trading environmentReturns in downstream converting still at unsatisfactory levels€25m restructuring programme announced to close/downsize 6 converting operations with loss of 350 jobs
Mondi Business PaperSecured further price increases of circa 3-4%Taken production downtime of circa 75,000 tonnes PM31 headbox successfully modified
SummaryMondi is benefiting from favourable product mix, emerging market exposure and competitivecost positionDespite booking €25m restructuring charge, expect earnings to be in line with managementexpectations
PAGE 10
INDUSTRY FUNDAMENTALS: EUROPEAN UNCOATED FINE PAPER
Circa 12 million tonne market, growing at 3% 1 pa— Western Europe 2% 2— Eastern Europe 7% 2European capacity closures in 2006/2007 of 720,000 tpaFollowing these closures, capacity utilisation anticipated to be attractiveFavourable demand supply balance forecast for foreseeable futureOnly confirmed major expansion in Europe is a new 500Ktpa machine at Portucel’s Setubal mill, planned for commissioning in Q3 2009
(1) Volume growth based on 2000 to 2006 demand estimates by Pöyry Forest Industry Consulting.
(2) 2005 - 2006(3) Demand estimates by Pöyry Forest Industry Consulting.(4) Q4 2001 – Q3 2007.
Sources: Mondi, Pöyry Forest Industry Consulting, CEPIFINE, RISI, PIX (FOEX Indexes Oy Ltd)
600
700
800
900
1000
1100
1200
2001 2004 2007
€/to
nne
PAGE 11
INDUSTRY FUNDAMENTALS: EUROPEAN CONTAINERBOARD AND CORRUGATED PACKAGING
Circa 26 million tonne market growing at 2.7% 1 pa— Western Europe 1.4% 1
— Eastern Europe 11.0% 1
Good demand growth, particularly in Germany and Emerging EuropeCapacity closures in recycled grades of 2.4 mtpa in 2005/2006 Now operating at attractive capacity utilisation levelsAside from Modern Karton in Turkey (400 ktpa), no new paper machine capacity scheduled until mid to late 2009
(1) Growth on tonnage basis 2000 to 2006 based on 2006 forecasts. (2) Q4 2001 – Q3 2007.
Sources: ICCA, RISI, Pöyry Forest Industry Consulting and PIX (FOEX Indexes Oy Ltd)
250
300
350
400
450
500
550
600
650
700
750
2001 2004 2007
€/to
nne
Kraftliner 175 gTestliner 2White top Kraftliner
PAGE 12
The impact on Mondi should be limited for the following reasons:o UCWF:
– 8% of volume exposed to exports (about 4% for cut size)– Relative high entry barriers (distribution channels, Customer own labels,
environmental standing of overseas suppliers)o Corrugated:
– Overall limited exposure to exchange rates as corrugated is largely traded on a regional level
Coated and graphic grades (which Mondi not exposed to) see much higher trade flows – circa 20% export dependency.
While current USD makes Europe attractive for imports and pressures exports, overall threat limited
PAGE 13
Nevertheless with the exception of the export heavy Kraft paper, the impact on Mondi’s grades is limited
Overview of Export dependence European Paper Business (Imports, Exports and Net Trade in % of Production)
Note: CEPI covers Austria, Belgium, Czech Republic, Finland, France, Germany, Hungary, Italy, the Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, United KingdomSource: CEPI European Pulp and Paper Industry Trade Statistics and Annual Statistics 2006; Cepifime for Uncoated Woodfree, Eurokraft/ Mondi Estimates for Kraftpaper)
Newsprint
21,5
-0,4
21,2
Uncoated Mechanical
23,5
-0,6
22,9
Coated Mechanical
8,6
-4,1
4,4
Uncoated Fine
27,1
-3,2
23,8
Coated Fine
6,6
-2,6
4,0
Sanitary and Household
9,0
-4,4
4,6
Container-board
29,0
-7,2
21,7
CartonBoards
24,4
-2,8
21,6
14,1
34,4
-7,4
27,0
WrappingsKraftpaper
Imports in % of ProductionNet Exports in % of Production
-9,3
4,9
Exports in % of Production
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Share Price Performance
35.0
45.0
55.0
65.0
75.0
85.0
95.0
105.0
115.03-
Jul
10-J
ul
17-J
ul
24-J
ul
31-J
ul
7-Au
g
14-A
ug
21-A
ug
28-A
ug
4-Se
p
11-S
ep
18-S
ep
25-S
ep
2-O
ct
9-O
ct
16-O
ct
23-O
ct
30-O
ct
6-N
ov
13-N
ov
20-N
ov
Mondi DS Smith IP M-Real Norske Skog Sappi SCA Smurfit Stora Enso UPM
Relative Share Prices of Principal Comparitor Group
3 Ju
ly 2
007
=10
0
PAGE 15
AGENDA
Mondi
Organisation
Safety & Sustainable Development
PAGE 16
ORGANISATIONAL CHANGE
The changes are designed to eliminate duplication, simplify process and align our business
model across the Group
In place of the current Mondi Packaging and Mondi Business Paper Business Units, there will be
a Europe & International Division and a South African Division
The new Europe and International Division will comprise the existing Mondi Packaging and
Mondi Business Paper units outside South Africa. This division is headed by Peter Oswald,
current CEO of Mondi Packaging
The new South Africa Division will be the existing Mondi Business Paper and South Africa
business. It will be headed by Ron Traill who has been running the Steti mill in the Czech
Republic
The reporting lines for Mondi Packaging South Africa, Mondi Shanduka Newsprint, Aylesford
Newsprint and Europapier will remain as present
PAGE 17
Mondi Group
South AfricaDivision
Mondi Packaging
South Africa
Mondi ShandukaNewsprint
Aylesford Newsprint Europapier Europe &
InternationalDivision
PAGE 18
AGENDA
Mondi
Organisation
Safety & Sustainable Development
PAGE 19
At Mondi, it is important that we
— Apply consistently good practice in the management of sustainability and that we are recognised as a leader in balancing ecological, social and economic values.
— Set the safety standard for the industry.— Subscribe to credible and recognised sustainable forest management
practices.— Reduce our environmental footprint.— Are a partner of choice for governments and communities.— Make public SD commitments and report performance progress openly
and transparently.
OUR SUSTAINABILITY AIMS
PAGE 20
SUSTAINABILITY ISSUES - SAFETY
Safety is a core value underpinned by clear operating standards.
One incident is one too many – Mondi is committed to the principles of zero harm and
safe workplaces.
LTIFR Trend 2001 to Q3 2007
1.2
0.67
0.52
0.41
0.27 0.270.18
0.310.3
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2001 2002 2003 2004 2005 2006 Q1 2007 Q2 2007 Q3 2007
LTIFR
Performance:o Track record of reductions in Lost-Time
Injuries.
o Two contractor fatalities in South Africa
in 2007, which is unacceptable.
The LTIFR is calculated for employees and contractors per 200,000 hours worked
PAGE 21
SUSTAINABILITY ISSUES - FORESTRY
All South African plantations are managed to independently certified sustainable forest
management standards.
All areas in Russia are public land, managed through forest management agreements that
involve public stakeholder processes and regular independent auditing.
Mondi has implemented a fibre tracing system that ensures that the wood and pulp we
source comes from acceptable sources.
.
PAGE 22
SUSTAINABILITY ISSUES - EMISSIONS
Mondi is a large energy consumer – 6 million tonnes of CO2e emitted annually with 45% of
energy produced from biomass
Target of 15% reduction for energy and CO2 from 2004 to 2014
Mondi sent 234,000 tonnes of non-hazardous waste to landfill in 2006 – target to reduce total
non-hazardous waste to landfill by 20% from 2005 to 2010.
.
PAGE 23
SUSTAINABILITY ISSUES - CSR
All Mondi’s significant sites have undertaken a socio-economic assessment of their operations with the focus on engaging with their communities and delivering on the commitments made to them.Corporate Social Investment programmes in place at our sitesHIV/Aids programmes and Black Economic Empowerment programmes in place in South Africa.
Q & A
