Mondi reports EBITDA of Euro 923 million in 2012

Feb 22, 2013. /Lesprom Network/. Mondi reports full year 2012 revenue of Euro 5.8 billion, compared to Euro 5.7 billion in 2011. EBITDA was Euro 923 million in 2012, as the company said in a press release received by Lesprom Network. Packaging Paper segment delivered another good financial performance despite the more challenging trading environment, with a ROCE of 17.9% and underlying operating profit of Euro 227 million. Fibre Packaging segment realised a 17% increase in underlying operating profit to Euro 101 million in 2012. The improvement reflects the benefits of ongoing profit improvement initiatives and lower input costs. The ROCE of 12.5%, whilst still below 13% target, reflects a pleasing improvement on 2011 levels. Uncoated Fine Paper segment again delivered a strong operating performance with underlying operating profit of Euro 191 million and a ROCE of 16.7%. South Africa Division delivered an improved result with underlying operating profit increasing by 8% to Euro 68 million and ROCE to 9.9%. Fundamentals for each of the Group’s core businesses remain good, although recently announced capacity additions in segments that remain in oversupply are a concern. While the uncoated fine paper business remains in structural decline in the mature western European region, prices have remained stable due to continued supply side contraction in the face of poor profitability among the more marginal players. Such rationalisation will need to continue in order to ensure market stability. On the packaging side, fundamentals for growth in the medium term remain firmly in place with only the kraft paper/industrial bags value chain in western Europe suffering some secular demand decline, offset by strong export markets. The Group continued to be strongly cash generative with cash generated from operations of Euro 845 million. Working capital levels were maintained within the Group’s targeted level of 10-12% as a percentage of turnover, closing the year (based on the annualised sales of Nordenia) at 11.8%. During the year, capital expenditure amounted to Euro 298 million. Net debt at 31 December 2012 was Euro 1,864 million, an increase of Euro 1,033 million from 31 December 2011. The increase is attributable to the Euro 1.2 billion of strategic acquisitions completed during the year. The acquisitions were financed by the proceeds from an 8-year 3.375% Euro 500 million Eurobond and from existing borrowing facilities. Excluding the effects of acquisitions, net debt reduced by Euro 180 million. At the underlying earnings per share level, results were down only 3% on the comparable prior year figure, supported by lower interest charges and a reduction in the non-controlling interest charge, primarily due to the acquisition of the remaining minority interest in Mondi Swiecie in the first half of the year. This strong performance bears testament not only to the strength of our strategic positioning, but also the unrelenting focus on cost management and strong operating performance achieved across the Group. The Group is proposing to pay a final dividend of 19.1 euro cents per share, bringing the total dividend for the year to 28 euro cents per share, an increase of 8% on 2011 David Hathorn, Mondi Group chief executive, said: “Mondi delivered a solid financial performance in what remains an uncertain economic environment. While the early part of the year was particularly challenging, trading picked up as the year progressed, culminating in a strong final quarter. Continued strong profitability resulted in a return on capital employed (ROCE) of 13.7%, once again above our through-the-cycle target of 13%. Net debt finished the year at Euro 1,864 million, largely due to the Euro 1.2 billion of strategic acquisitions in higher growth packaging segments completed during the year. Our continued strong cash generation and underlying earnings per share of 69.6 euro cents per share has resulted in the directors recommending a final dividend of 19.1 euro cents per share, bringing the total dividend to 28.0 euro cents per share for the year, an increase of 8%. Our focus in the near term is on the integration and optimisation of the recent acquisitions and successful delivery of the significant capital investment projects we have initiated over the course of the past year. I am very pleased to see the progress we have already made in integrating our recent acquisitions, exemplified by the fact we have revised upwards by 33% our estimate of expected synergies to Euro 30 million per annum within two years. Fundamentals for our core segments remain sound, although recently announced capacity additions by various manufacturers in selected paper grades are a concern, exacerbated by the prevailing demand softness as Europe remains affected by the macroeconomic slowdown. However, with the strong finish to the year, coupled with the expected contribution from the recent acquisitions, we remain confident of making progress in the year ahead.” Mondi’s focus in the near term will be the integration and optimisation of the recent acquisitions and successful delivery of the significant capital investment projects initiated over the course of the past year. It is pleasing to see the progress that has already been made in integrating the recent acquisitions, exemplified by the fact that the Group has revised upwards by 33% its estimate of expected synergies to Euro 30 million per annum within two years. Mondi is an international packaging and paper Group, with production operations across 30 countries. The Group's key operations are located in central Europe, Russia and South Africa. Mondi Group is fully integrated across the packaging and paper value chain, from the growing of wood and the production of pulp and paper (packaging paper and uncoated fine paper), to the conversion of packaging paper into corrugated packaging, industrial bags, extrusion coatings and release liner.