Mondi (MNDI) H2 2023 earnings summary

Executive summary

• Resilient FY 2023 performance amid challenging trading conditions, with €1,201m underlying EBITDA and €1,312m cash generated from operations.

• Growth investments progressed and sustainability commitments advanced; the integrated packaging platform and broad customer and end-market mix supported resilience.

Financial highlights

• Underlying EBITDA was €1,201m, down from €1,848m in 2022; lower sales volumes reduced EBITDA by €277m and lower prices by €435m, partly offset by €106m from costs and other items.

• Cash generated from operations was €1,312m, supported by a €229m working capital inflow despite lower underlying EBITDA.

• Basic underlying EPS was 107.8 euro cents vs 195.6 cents in 2022; ROCE was 12.8% vs 23.7%.

• Ordinary DPS remained 70 euro cents; the recommended full-year dividend is subject to shareholder approval at the 2024 AGM.

Outlook and guidance

• 2024 capex guidance is €800–900m; depreciation and amortisation €425–450m, working capital 12–14% of revenue, effective tax rate 23–24%, and net finance costs ~€100m.

• ~80% of the current organic investment pipeline is expected to be spent by end-2024; projects are expected to contribute meaningfully to EBITDA from 2025 and deliver through-cycle mid-teen returns when fully operational.

• Corrugated Packaging containerboard price increases were announced in February 2024; kraft paper price increases are being implemented from Q2 2024, and European uncoated fine paper increases were implemented in early 2024.