DEUTSCHE BANK PAPER CONFERENCE LONDON 14 NOVEMBER 2007
AGENDA Strategic Overview Growth Markets Financials PAGE 1
AGENDA Strategic Overview Growth Markets Financials PAGE 2
MONDI AT A GLANCE merchant /newsprint merchant /newsprint South Africa South Africa Sales H1 € 1.7B € 1.0B € 0.2B € 0.3B 2007 (1) Products � (2) � No. 1 Office Paper (2) � � No. 1 Kraft Paper No. 1 Corrugated No. 1 Newsprint in Packaging in SA (3) (2) South Africa � (2) � (2) No. 2 Kraftliner No. 2 UCWF Positions � � � No. 1 Bag Converting (3) No. 1 Rigid Plastics in SA Leading Positions in in Europe Emerging Europe (5) � No. 3 Corrugated � No. 1 in Cartonboard (4) Packaging in SA - . . (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 3
MONDI STRATEGIC DRIVERS Mondi group net operating assets June 2007 Mondi Group sales H1 2007 � Leading market position — Leading market positions 39% 45% — High exposure to: 55% 61% – Attractive product segments – Attractive geographies Emerging markets Mature markets Emerging markets Mature markets � Strong asset base — Upstream production cost advantages – 100% of kraftliner and 91% of universal Indicative Position 2010 office paper in lowest cost quartile — Vertically integrated Mondi Group operating assets Mondi Group sales – Up to 51% self-sufficient low cost wood 30% � Focus on performance 40% — Comprehensive Business Excellence 60% 70% Programmes Emerging markets Mature markets Emerging markets Mature markets — Continuous cost reduction and productivity improvement � Growth — Organic and through acquisition PAGE 4
UCWF and Corrugated demand growth per region Corrugated 2005 - 2010 demand growth (in UCWF 2006 - 2011 demand growth (in %) 1 %) 2 9,8 8,2 6,6 1,8 1,3 WE EE CIS WE EE Demand growth in %. 1 Sources: 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. 2 Source: ICCA. PAGE 5
UPSTREAM PRODUCTION COST ADVANTAGES LOW- COST POSITIONS White-top Kraftliner Unbleached Kraftliner €/t 800 €/t 500 100% of Mondi Unbleached 100% of Mondi Kraftliner capacity White-top Kraftliner capacity 0 0 0 3,000 0 1,400 Cumulative capacity (Kt/a) Cumulative capacity (Kt/a) Universal Office Paper €/t 1,500 91% of Mondi Universal Office Paper Capacity 0 0 Cumulative capacity (Kt/a) 3,500 Mondi Paper Machines Note: The graphs show delivered cost to Frankfurt, Germany European Producers Sources: Pöyry Forest Industry Consulting, Mondi PAGE 6 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt 13/11/2007 15:48
SUPERIOR ACCESS TO LOW-COST WOOD Average Hardwood and Softwood Costs (€/m 3 , Q2 2007) 47 42 39 37 33 30 30 26 25 25 Chile Brazil South Africa Russia Australia Poland Portugal Sweden Finland France Source: Pöyry Forest Industry Consulting PAGE 7 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt 13/11/2007 15:48
BENEFITING FROM INTEGRATED VALUE CHAIN Paper Forestry Pulp 5.8Mt Mondi’s own 7.6mm 3 3.5Mt Packaging: 3.3Mt availability Mondi’s own 2.1Mt (1) 3.8Mt 14.8mm 3 demand Potential self 154% (1) 51% 91% sufficiency (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 PAGE 8 MAGENTA\ROADSHOW PRESENTATION\12 Magenta Roadshow Presentation.ppt 13/11/2007 15:48
AGENDA Strategic Overview Growth Markets Financials PAGE 9
GROWTH At 30 th 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 10
CONTAINERBOARD EXPANSION PROJECT � New 470,000 tons lightweight recycled containerboard machine plus a new corrugated box plant with capacity of approximately 250M m 2 /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 operation Source: Mondi PAGE 11
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 Recycled Fluting Cost Curve €/t 350 300 250 200 150 PM CEE Light 100 0 2,000 4,000 6,000 8,000 10,000 Cumulative capacity (1 000 t/a) � 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 Note: The graph shows manufacturing cost.Source: Mondi/Pöyry Forest Industry Consulting PAGE 12
SYKTYVKAR MILL - PROJECT SCOPE � � New and expanded Benefits include Lower operating costs Wood handling facilities � � Improved efficiencies Recovery boiler and � � turbine Expanded electricity � generating capacity Evaporation of Black � Liquor 190,000 tpa increase in � pulp production capacity Limekiln � Pulp dryer 52,000 tpa increase in � � UCWF production capacity � Upgraded/Rebuilt 46,000 tpa increase in � Two chemical pulp lines � containerboard PM14 UCWF machine � Reduced environmental � footprint PM21 containerboard � machine PAGE 13
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 White-top liner Demand Forecast UCWF / Cut size Paper Demand Forecast CEE incl. Russia Russia (mt) (kt) CIS Cutsize (C+ Grade) (1) CAGR 4 350 5,7% CAGR 9,1% (mt) 300 3 1.0 3.1 275 8,7% 250 0.8 2.6 0.8 200 0.7 0.7 195 2 0.6 0.6 150 1.7 0.4 100 115 1 0.2 50 0.0 ‘07 ‘08 ‘09 ‘10 0 0 2015 2005 2010 2004 2010 2015 Source: Pöyry (White-top Kraftliner and White-top Testliner (1) Based on Mondi Research cost competitiveness and Market Outlook); February 2007 Source: Pöyry (World Paper Markets up to 2020); Mondi Analysis PAGE 14
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 Syktyvkar (Russia) ( ² ) 180 13% p.a. ( ¹ ) � Management 160 control acquired in % 140 2002 Volume per 120 capita � Integrated 100 operations 2002 2003 2004 2005 2006 � 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 (1) CAGR. (2) Forestry workers included. Note: Tons per capita based on employees year average Source: Mondi PAGE 15
SYKTYVKAR - MILESTONES � Milestones of the Project: � Main equipment vendors chosen July/August 2007 � Start construction April 2008 � Project completion mid-2010 PAGE 16
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 m 2 /year � The company was acquired from the Ülker Group, a leading Turkish family owned 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 17
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