DEUTSCHE BANK PAPER CONFERENCE LONDON 14 NOVEMBER 2007 AGENDA - - PowerPoint PPT Presentation

DEUTSCHE BANK PAPER CONFERENCE LONDON 14 NOVEMBER 2007

PAGE 1

AGENDA

Strategic Overview Growth Markets Financials

PAGE 2

AGENDA

Strategic Overview Growth Markets Financials

PAGE 3

MONDI AT A GLANCE

Sales H1 2007 (1) Products Positions in Europe

€ 0.2B

South Africa South Africa

€ 0.3B

merchant /newsprint merchant /newsprint

€ 1.7B

• No. 1 Kraft Paper

(2)

• No. 2 Kraftliner

(2)

• No. 1 Bag Converting(3)
• No. 3 Corrugated

Packaging

(4)

• No. 1 Corrugated

Packaging in SA(3)

• No. 1 Rigid Plastics in SA
• No. 1 in Cartonboard

in SA

• No. 1 Newsprint in

South Africa

(2)

• Leading Positions in

Emerging Europe(5)

€ 1.0B

• No. 1 Office Paper(2)
• No. 2 UCWF

(2)

• .

. (1) Segment revenues, including inter-segment revenues, excluding associates. (2) Based on production capacity. (3) Based on sales. (4) Management estimate based on sales. Sources: RISI, Pöyry Forest Industry Consulting, Freedonia, BMI Foodpack, PAMSA, Mondi

PAGE 4

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 universal

• ffice 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 operating assets 70% 30% Emerging markets Mature markets

Mondi group net operating assets June 2007 61% 39% Emerging markets Mature markets

Indicative Position 2010

Mondi Group sales H1 2007 45% 55% Emerging markets Mature markets

Mondi Group sales 60% 40% Emerging markets Mature markets

PAGE 5

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.

CIS EE WE 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 6

13/11/2007 15:48 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt

UPSTREAM PRODUCTION COST ADVANTAGES LOW- COST POSITIONS

Universal Office Paper

Note: The graphs show delivered cost to Frankfurt, Germany European Producers Sources: Pöyry Forest Industry Consulting, Mondi Mondi Paper Machines

Unbleached Kraftliner White-top Kraftliner

Cumulative capacity (Kt/a) 3,000

100% of Mondi Unbleached Kraftliner capacity

€/t 1,500

91% of Mondi Universal Office Paper Capacity

3,500 Cumulative capacity (Kt/a) Cumulative capacity (Kt/a) €/t 800 1,400

100% of Mondi White-top Kraftliner capacity

€/t 500

PAGE 7

13/11/2007 15:48 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt

25 25 26 30 30 33 37 39 42 47 Brazil South Africa Russia Chile Australia Poland Portugal Sweden Finland France

SUPERIOR ACCESS TO LOW-COST WOOD

Average Hardwood and Softwood Costs (€/m3, Q2 2007)

Source: Pöyry Forest Industry Consulting

PAGE 8

13/11/2007 15:48 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt

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) 5.8Mt

Packaging: 3.3Mt

2.1Mt(1)

PAGE 9

AGENDA

Strategic Overview Growth Markets Financials

PAGE 10

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 11

CONTAINERBOARD EXPANSION PROJECT

• New 470,000 tons lightweight recycled containerboard machine plus a new

corrugated box plant with capacity of approximately 250M m2/year corrugated board production

• Clear cost leader in Europe
• Investment cost of circa €350M
• Order for main machinery was placed in September 2007
• Start-up expected in mid 2009
• Investigating option of investing in own recovered paper collection
• peration

Source: Mondi

PAGE 12

CONTAINERBOARD EXPANSION PROJECT – PROJECT RATIONALE

• Target high-growth lightweight recycled containerboard market
• Supported by growing manufacturing base in CEE region which has

resulted in a recycled containerboard supply deficit (0.7M tons in 2006)

• Efficient supply to state-of-the-art corrugators with 2.8m width
• Lower capital expenditure due to brownfield investment
• Leverage Mondi Packaging paper sales network in Europe
• Expand leading market position in strongly growing Polish

corrugated packaging market by adding a state-of-the-art box plant with favourable logistic costs due to location next to the RCB mill

100 150 200 250 300 350 2,000 4,000 6,000 8,000 10,000 Cumulative capacity (1 000 t/a) €/t

Recycled Fluting Cost Curve

PM CEE Light

Note: The graph shows manufacturing cost.Source: Mondi/Pöyry Forest Industry Consulting

PAGE 13

SYKTYVKAR MILL - PROJECT SCOPE

• New and expanded
• Wood handling facilities
• Recovery boiler and

turbine

• Evaporation of Black

Liquor

• Limekiln
• Pulp dryer
• Upgraded/Rebuilt
• Two chemical pulp lines
• PM14 UCWF machine
• PM21 containerboard

machine

• Benefits include
• Lower operating costs
• Improved efficiencies
• Expanded electricity

generating capacity

• 190,000 tpa increase in

pulp production capacity

• 52,000 tpa increase in

UCWF production capacity

• 46,000 tpa increase in

containerboard

• Reduced environmental

footprint

PAGE 14

SYKTYVKAR PROJECT - MARKET FORECAST

• This Project will enable Mondi to benefit from the strong growth in

demand for UCWF and containerboard in the domestic Russian market

(1) Based on Mondi Research Source: Pöyry (World Paper Markets up to 2020); Mondi Analysis

UCWF / Cut size Paper Demand Forecast

CEE incl. Russia

1.7 2.6 3.1

1 2 3 4

(mt) 2004 2010 2015

5,7%

CIS Cutsize (C+ Grade)(1)

0.6 0.7 0.7 0.8 0.0 0.2 0.4 0.6 0.8 1.0

(mt) ‘07 ‘08 ‘09

8,7%

‘10 CAGR CAGR

Russia

115 195 275

50 100 150 200 250 300 350 2010 (kt)

9,1%

2005 2015

White-top liner Demand Forecast

Source: Pöyry (White-top Kraftliner and White-top Testliner cost competitiveness and Market Outlook); February 2007

PAGE 15

SYKTYVKAR OPERATIONAL ACHIVEMENTS

• The Russian operation Syktyvkar has been a success story for

Mondi, outperforming in the areas of safety, productivity, costs and environmental management

100 120 140 160 180 2002 2003 2004 2005 2006

%

Syktyvkar (Russia)(²) Management control acquired in 2002 Integrated

• perations

13% p.a.(¹)

(1) CAGR. (2) Forestry workers included. Note: Tons per capita based on employees year average Source: Mondi

• In the process Mondi has developed highly valued relationships

with the local government and stakeholders, which in conjunction with the above, positions Mondi uniquely to fully optimise this attractive value creating opportunity

Volume per capita

PAGE 16

SYKTYVKAR - MILESTONES

• Milestones of the Project:
• Main equipment vendors chosen

July/August 2007

• Start construction

April 2008

• Project completion

mid-2010

PAGE 17

ACQUISITION TIRE KUTSAN, TURKEY

• On September 3, 2007 Mondi Packaging acquired 54% of Tire Kutsan, the

leading Turkish corrugated packaging company

• The company has one paper mill producing 120,000 tons of recycled

containerboard plus 5 corrugated box plants in Turkey with a board production capacity of approximately 450M m2/year

• The company was acquired from the Ülker Group, a leading Turkish family
• wned group with sales of USD 7B mainly in the food business. The Ülker

Group will keep 10% in Tire Kustan for 3 years and Mondi Packaging and the Ülker Group have signed a business cooperation agreement

• The acquisition price for 54% was USD 106M equivalent to a cash and debt free

enterprise value for 100% of c. €190M

• The remaining shares are traded on Istanbul Stock Exchange and Mondi

Packaging is currently in the process of making a mandatory tender offer

Source: Mondi

PAGE 18

2000 2005 2010 CAGR M m2 CAGR M m2 2005 2010E Poland 1.129 2.054 2.986 12,7% 925 7,8% 932 39 53 77 Russia 1.124 2.351 3.464 15,9% 1.227 8,1% 1.113 143 16 25 Turkey 1.400 2.111 3.701 8,6% 711 11,9% 1.590 73 29 47 Other EE 2.048 3.168 4.198 9,1% 1.120 5,8% 1.030 110 29 36 Total EE 5.701 9.684 14.349 11,2% 3.983 8,2% 4.665 375 26 38 Total WE 33.790 35.574 38.962 1,0% 1.784 1,8% 3.388 394 90 97

EUROPE

39.491 45.258 53.311 2,8% 5.767 3,3% 8.053 769 59 69

Source: ICCA

Production in M m2 Growth 00-05 Growth 05-10

• Prod. / capita

Pop 05

ACQUISITION TIRE KUTSAN PROJECT RATIONALE

• Turkey is forecasted to have the highest growth rates in corrugated

packaging in Europe with 12% per annum or additional 1.6 M m2 between 2005 and 2010

• Acquisition makes Mondi Packaging the market leader in Turkey and Emerging

Europe in corrugated

• Reinforces Mondi’s strategy of high emerging market exposure
• Strengthens Mondi Packaging’s position in the European corrugated market by

expanding its European footprint

Source: Mondi

PAGE 19

AGENDA

Strategic Overview Growth Markets Financials

PAGE 20

INDUSTRY FUNDAMENTALS: EUROPEAN UNCOATED FINE PAPER

Circa 12 million tonne market, growing at 3% 1 pa — Western Europe 2% 2 — Eastern Europe 7% 2 European capacity closures in 2006/2007

• f 720,000 tpa

Following these closures, capacity utilisation anticipated to be attractive Favourable demand supply balance forecast for foreseeable future Only 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 €/tonne

PAGE 21

EUROPEAN DEMAND AND OPERATING RATES EXPECTED TO REMAIN STRONG FOR UNCOATED FINE PAPER

10 20 30 40 50 60 70 80 90 100 110 2008 8.590 2009 8.815 2010 9.070 2011 Operating Rates Demand 1,9% 1.000 8.270 11.000 12.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 Demand (kt) Operating Rate (%) 2006 8.410 2007 8.640 10.000

Europe 30

Source: EMGE Woodfree Forecast Report; October 2007

20 40 60 80 100 7.405 2006 7.495 2007 7.645 2008 7.555 2009 7.705 2010 7.880 2011 1,3% 10.000 2.000 4.000 6.000 8.000 Demand (kt) Operating Rate (%)

• W. Europe 16

995 915 865 20 40 60 80 100 2006 2007 2008 1.035 2009 1.110 2010 1.190 2011 6,6% 1.000 1.500 2.000 2.500 500 Demand (kt) Operating Rate (%)

• E. Europe 14

Capacity closures of 180kt in 2006 and 540kt in 2007

(Source: CEPIFINE-March 2007)

PAGE 22

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 Europe Capacity closures in recycled grades of 2.4 mtpa in 2005/2006 Now operating at attractive capacity utilisation levels Aside 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 €/tonne Kraftliner 175 g Testliner 2 White top Kraftliner

PAGE 23

The impact on Mondi should be limited for the following reasons:

• 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)

• 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 24

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)

Newsprint 21,5

• 0,4

21,2 Uncoated Mechanical 23,5

• 0,6

22,9 Coated Mechanical 8,6

• 4,1

4,4 Uncoated Woodfree 27,1

• 3,2

23,8 Coated Woodfree 6,6

• 2,6

4,0 Sanitary and Household 9,0

• 4,4

4,6 Container- board 29,0

• 7,2

21,7 Carton Boards 24,4

• 2,8

21,6 14,1 34,4

• 7,4

27,0 Wrappings Kraftpaper Imports in % of Production Net Exports in % of Production

• 9,3

4,9 Exports 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 Kingdom Source: CEPI European Pulp and Paper Industry Trade Statistics and Annual Statistics 2006; Cepifime for Uncoated Woodfree, Eurokraft/ Mondi Estimates for Kraftpaper)

PAGE 25

AGENDA

Strategic Overview Growth Markets Financials

PAGE 26

INTERIM FINANCIAL HIGHLIGHTS

ALL KEY INDICATORS UP

€ millions, except for percentages H1 2007 H1 2006 %Change Group revenue 3,052 2,857 + 7 EBITDA 1 421 343 + 23 Underlying operating profit 2 243 166 + 46 Underlying profit before tax 3 203 125 + 62 Reported profit before tax 250 64 Underlying pro forma earnings per share (€ cents per share) 4 22.6 11.9 + 90 Interim dividend per share (€ cents per share) 7.3 n/a n/a Cash inflow from operations 356 229 + 55 Group 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

• n 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 27

COST SAVINGS - €73 MILLION

127 179 180 73 20 40 60 80 100 120 140 160 180 200 2004 FY 2005 FY 2006 FY 2007 HY € million

COST STRUCTURE FIRST HALF 2007

Wood, pulp and fibre 33.7% Personnel 15.9% Variable selling expenses 10.0% Energy 7.3% Maintenance 4.6% Other variable costs 15.2% Other net

• perating

expenses 7.0% Depreciation and amortisation 6.3%

COSTS AND COST SAVING INITIATIVES

COST SAVINGS OF €73 MILLION HELPED TO OFFSET COST INFLATION

2.8% 3.9% 3.6% 2.9%

• €37 million material input cost savings
• €18 million saving in energy costs
• Costs savings represent 2.9% of prior

year cash cost base

• External fibre cost inflation
• Mondi Packaging wood 27%, recycled paper 26%
• Mondi Business Paper 25%
• Some recent easing in prices
• Mitigated by own wood resources which account for

up to 50% of requirements

• Fixed costs flat in euros period on period

PAGE 28

INTERIM CASH FLOW

GENERATED €127 MILLION MORE IN CASH INFLOWS FROM OPERATIONS

€ millions H1 2007 H1 2006 Change EBITDA 421 343 78 Working capital movements (59) (99) 40 Other operating cash flow adjustments (6) (15) 9 Cash inflows from operations 356 229 127 Dividends from associates 1 1

• Tax paid

(40) (34) (6) Net cash inflow from operating activities 317 196 121 Capital expenditure (139) (209) 70 Investment in forestry assets (19) (26) 7 Acquisitions (7) (69) 62 Disposals 157 29 128 Interest received 9 22 (13) Other and proceeds on sale of fixed assets 12 17 (5) Net cash flow after investing activities 330 (40) 370

PAGE 29

INTERIM MANAGEMENT STATEMENT (14TH NOVEMBER)

Group

• Overall positive trends and trading momentum of first half have continued
• Weakness of US dollar is impacting trade flows
• External fibre cost inflation has eased

Mondi Packaging

• Benefited from a favourable Packaging Paper trading environment
• Returns in downstream converting still at unsatisfactory levels
• €25m restructuring programme announced to close/downsize 6 converting operations with

loss of 350 jobs Mondi Business Paper

• Secured further price increases of circa 3-4%
• Taken production downtime of circa 75,000 tonnes
• PM31 headbox successfully modified

Summary

• Mondi is benefiting from favourable product mix, emerging market exposure and competitive

cost position

• Despite booking €25m restructuring charge, expect earnings to be in line with management

expectations

PAGE 30

13/11/2007 15:48 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt

Share Price Performance

50.0 60.0 70.0 80.0 90.0 100.0 110.0 120.0 3

• J

u l 1

• J

u l 1 7

• J

u l 2 4

• J

u l 3 1

• J

u l 7

• A

u g 1 4

• A

u g 2 1

• A

u g 2 8

• A

u g 4

• S

e p 1 1

• S

e p 1 8

• S

e p 2 5

• S

e p 2

• O

c t 9

• O

c t 1 6

• O

c t 2 3

• O

c t 3

• O

c t 6

• N
• v

Mondi DS Smith IP M-Real Norske Skog Sappi SCA Smurfit Stora Enso UPM

Relative Share Prices of Principal Comparitor Group

3 J u ly 2 7 = 1

Q & A