Well positioned Resilient Delivering Half-year results for the six months ended 30 June 2020 6 August 2020
Mondi: Forward-looking statements disclaimer This document includes forward-looking statements. All statements other than statements of historical facts included herein, inc luding, without limitation, those regarding Mondi’s financial position, business strategy, market growth and developments, expectations of growth and profitability and plans and objectives of management for future operations, are forward-looking statements. Forward- looking statements are sometimes identified by the use of forward- looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”, “continues”, “assumes”, “positioned” or “anticipates” or the negative thereof, other variations thereon or compar able terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Mondi, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions and are based on numerous assumptions regarding Mondi’s present and future business strategies and the en vironment in which Mondi will operate in the future. These forward- looking statements speak only as of the date on which they are made. No assurance can be given that such future results will be achieved; various factors could cause actual future results, performance or events to differ materially from those described in these statements. Such factors include in particular but without any limitation: (1) operating factors, such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development plans and targets, changes in the degree of protection created by Mondi’s patents an d other intellectual property rights and the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future g lobal market prices for Mondi’s products and raw materials and the pricing pressures thereto, financial condition of the customers, suppliers and the competitors of Mondi and potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in Mondi’s principal geographical markets or fluctuations of exchange r ates and interest rates. Mondi expressly disclaims a) any warranty or liability as to accuracy or completeness of the information provided herein; and b) any obligation or undertaking to review or confirm analysts’ expectations or estimates or to update any forward -looking state ments to reflect any change in Mondi’s expectations or any events that occur or circumstances that arise after the date of making any forward-looking statements, unless required to do so by applicable law or any regulatory body applicable to Mondi, including the JSE Limited and the LSE. 2
Introduction Financial review Operational review Delivering on our strategy Outlook and summary Q&A Appendices 3
Well positioned, resilient, delivering Fast and effective response to COVID-19, Resilient business, Well positioned for recovery – leveraging prioritising the health and providing essential safety of our people products and solutions global industry trends 5
Mondi’s decisive and effective COVID -19 response Uninterrupted supply Well-managed Cost control Delivery of essential Implemented best in supply chain infrastructure services class safety protocols Providing products for Slowed down capex essential businesses Limited operational Meaningful financial Protecting jobs Secured ample including food and disruptions and in-kind donations liquidity (~€3 million) and healthcare supply chains community relief Exceptional dedication and performance of our people, helping to successfully navigate unprecedented operating conditions 6
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Robust financial performance Underlying EBITDA and ROCE € million and % ● Robust financial performance in a challenging 23.2% 25.0% 19.8% environment 17.1% 20.0% 15.0% o Industry leading margins and returns 10.0% 5.0% o Strong cash generation and balance sheet 894 764 738 0.0% H1 2019 H2 2019 H1 2020 ROCE (%) ● Maintaining capital investment programme to deliver through the cycle growth Basic underlying earnings per share euro cents per share ● Resuming dividend payments in line with policy ● Well positioned when the recovery takes place 96.2 74.9 73.0 H1 2019 H2 2019 H1 2020 8
Resilient business model Underlying EBITDA development € million 46 (338) 894 14 (33) 170 (15) 738 H1 2019 Sales Sales Variable Currency Forestry Other H1 2020 volumes prices and cash effects fair value fixed costs gain Good volume growth in packaging businesses and strong cost control mitigating pricing pressures and lower forestry fair value gain 9
Strong cash generation Movement in net debt € million (602) 156 (80) 22 336 2,207 2,039 Net debt at Cash generated Capital Investment Tax and Other Net debt at 31 December from operations expenditure in forestry interest paid 30 June 2020 2019 assets …supporting ongoing investment in the business 10
Strong financial position providing strategic flexibility Net debt € million (net debt) and ratio (net debt to 12-month trailing underlying EBITDA) ● Strong balance sheet 1.4x o 1.4x net debt to trailing 12-month underlying 1.3x 1.3x EBITDA, well below our single bank debt covenant of 3.5x 1.1x 1.0x 1.0x ● Investment grade credit ratings reconfirmed (BBB+ / Baa1) ● Group’s maturity profile extended: Issued 2.375% €750 million 8 -year Eurobond o o Syndicated Revolving Credit Facility extended to July 2022 with core bank group ● Robust liquidity of around €1.4 billion at 30 June 2020 1,498 1,383 1,532 2,220 2,207 2,039 €500 million Eurobond maturing in September 2020 o 2015 2016 2017 2018 2019 H1 2020 o No other material short-term debt maturities Net debt to 12-month trailing underlying EBITDA (times) 11
Resuming dividend payments in line with our policy Dividends euro cents per share ● The Board is pleased to resume payment of dividends o 29.75 euro cents per share dividend relating to 2019 76 financial year declared. Full year dividend: 62 ‒ representing a dividend cover of 3x 57 57.03 52 ‒ in line with stated cover policy of average 2-3x underlying earnings over the business cycle 29.75 o Additionally, 19.00 euro cents per share 2020 interim 3x ordinary dividend declared 3.0x o Total payment of ~€236 million 2.6x 2.5x 2.4x 2.4x 27.28 2x ● Consistent with policy, while retaining optionality for 19.00 further value accretive growth 2015 2016 2017¹ 2018 2019 2020 ● Dividend policy unchanged Interim dividend paid Final dividend paid Current dividends declared Ordinary dividend cover (times) 1 Excludes the 2017 special dividend of 100 euro cents per share 12
Strong volume growth and cost control Corrugated Packaging Underlying EBITDA and margin € million and % ● Containerboard sales volumes up 29.5% 28.4% 27.6% ● Corrugated Solutions volumes up 4% o strong growth in core CEE markets o underpinned by innovative product portfolio and customer service 297 286 267 H1 2019 H2 2019 H1 2020 ● Demand during height of lockdown characterised by: Underlying EBITDA margin o strong demand in fast moving consumer goods European containerboard demand and e-commerce % growth (year-on-year) o weaker industrial end-uses 5% ● Significantly lower prices year-on-year 0% -5% ● Lower costs -10% ● Maintenance shuts scheduled for H2 -15% Q1 Q2 Q3 Q4 Q1 Apr May Jun 2019 2019 2019 2019 2020 2020 2020 2020 (forecast) Numera Analytics 14
Flexible Scale and integration benefits Packaging Underlying EBITDA and margin € million and % ● Higher sales volumes across all segments 21.8% 20.3% 18.2% ● Resilient European and North American kraft paper and paper bag demand, softer in other markets o supported by product development initiatives 304 239 280 ● Strong performance by Consumer Flexibles driven H1 2019 H2 2019 H1 2020 by FMCG exposure Underlying EBITDA margin ● Lower average kraft paper selling prices European paper bag deliveries % growth (year-on-year) ● Lower input costs and cost control initiatives 6% 3% ● Continued innovation to support our customers' 0% -3% transition to more sustainable packaging -6% ● Maintenance shuts scheduled for H2 -9% Q1 Q2 Q3 Q4 Q1 Apr May Jun 2019 2019 2019 2019 2020 2020 2020 2020* Eurosac paper bag deliveries * Mondi estimate based on industry statistics 15
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