30th Jul 2008 07:00
30 July 2008 Mondi Limited
(Incorporated in the Republic of South Africa) (Registration number: 1967/013038/06) JSE share code: MND ISIN: ZAE000097051
Mondi plc
(Incorporated in England and Wales) (Registration number: 6209386) JSE share code: MNP ISIN: GB00B1CRLC47
LSE share code: MNDI
As part of the dual listed company structure, Mondi Limited and Mondi plc (together 'Mondi Group') notify both the JSE Limited and the London Stock Exchange of matters required to be disclosed under the JSE listings
requirements and/or the Disclosure and Transparency and Listing Rules of the United Kingdom Listing Authority.
HALF-YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2008
Financial Summary 1
¢â€š¬ million, except for percentages and Six months Six months
Half yearper share measures June 2008 June 2007 change % Group revenue 3,263 3,052 +7 EBITDA 456 421 +8
Underlying operating profit 263 243
+8
Underlying profit before tax 210 203
+3 Reported profit before tax 171 250 -32
Basic earnings per share (¢â€š¬ cents per 17.1 31.9
-46share) 2
Underlying earnings per share (¢â€š¬ cents 24.8 22.6
+10per share) 2
Headline earnings per share (¢â€š¬ cents per 18.3 17.3
+6share) 2
Interim dividend per share (¢â€š¬ cents per 7.7 7.3
+5share) Cash inflow from operations 310 356 -13 Net debt 1,655 1,335 +24 Group ROCE 11.1% 10.0% +11 1 See Glossary of Financial Terms
2 2007 is pro forma and based on the number of shares admitted following the demerger from Anglo American plc on 2 July 2007.
Operational and Financial Highlights:
Underlying operating profit up 8% at ¢â€š¬263 million driven by a strong performance from the Europe & International Division
Improved profit trend in South Africa Division following a slow start to the year
Results continue to benefit from our low cost operations and our low cost wood resource in Russia and South Africa
Delivered cost savings of ¢â€š¬58 million, representing 2.1% of cost base
Underlying earnings per share up 10% and ROCE up 11%
Major projects in Poland and Russia are on schedule and within budgeted capital cost
Substantial cash inflow from operations of ¢â€š¬310 million which was lower than prior period due to working capital outflow on the back of higher trading activity
Strong financial position with ¢â€š¬1.1 billion of undrawn committed facilities as at end of June
Reported profit before taxation is down 32% because of a change in special items from a ¢â€š¬47 million gain in 2007 (mainly disposals) to a ¢â€š¬39 million charge in 2008 (mainly closure costs)
Half year dividend up 5% at 7.7 euro cents per share
David Hathorn, Mondi Group Chief executive, said:
"This is a good result achieved in a softening European market. It reflectsMondi's strategic positioning, in particular, our broad business base withleading market positions, emerging market focus, including major positions inSouth Africa and Russia (where demand is good), our continued push to drivedown costs and a willingness to respond quickly to changing market conditions.In the second half, South Africa should see a further improvement as actions toenhance profitability continue to take effect. This should help to offset asoftening trading environment in Europe. Overall Mondi expects to make progressfor the year as a whole."Contact details:Mondi Group David Hathorn +27 (0)11 9945418 Paul Hollingworth +44 (0)1932 826326
Lisa Attenborough +44 (0)1932 826380 / +44 (0)7872 672669
Financial Dynamics Sophie Kernon +44 (0)20 7269 7121/+44(0)7802 877 243 Louise Brugman +27 (0)11 214 2415 / +27 (0)83 504 1186
Conference call dial-in and audio cast details:
Please see below details of our dial-in conference call and audio cast that will be held at 10:00 (UK) and 11:00 (SA).
The conference call dial-in numbers are:
South Africa 0800 991 276 (toll-free)UK +44 20 7190 12320800 358 5260 (toll-free)
Europe & Other +44 20 7190 1232
An online audio cast facility will be available via: http://events.ctn.co.uk/ ec/mondi/547/
Password: HYResults08
The presentation will be available online via the above web site address before the audio cast commences. Questions can be submitted either via the dial-in conference call or by email via the audio cast.
Should you have any issues on the day with accessing the dial-in conference, please call +44 20 8901 5400.
Should you have any issues on the day with accessing the audio cast, please email [email protected] and you will be contacted immediately.
An audio recording of the presentation will be available on Mondi's website during the afternoon on 30 July 2008.
Editors' notes:
Mondi is an international paper and packaging group and in 2007 had revenues of¢â€š¬6.3 billion. Its key operations and interests are in western Europe, emergingEurope, Russia and South Africa.
The Group is principally involved in the manufacture of packaging paper and converted packaging products; uncoated fine paper; and speciality products and processes, including coating, release liner and consumer flexibles.
Mondi is fully integrated across the paper and packaging process, from the growing of wood and manufacture of pulp and paper (including recycled paper) to the converting of packaging papers into corrugated packaging and industrial bags.
Mondi has production operations across 35 countries and had an average of 35,000 employees in 2007.
Group performance overviewAs previously announced, from 1 January 2008, the former Mondi Packaging andMondi Business Paper Business units now operate as two divisions: Europe &International and South Africa. Accordingly, we have used this new reportingstructure for commenting on trading in this Half-yearly Report.The Group's underlying operating profit was 8% ahead of the comparable periodfor the prior year helped by a strong performance from the Europe &International Division. Within Europe & International there were goodperformances from the Bags & Specialities and Uncoated Fine Paper Businessunits. This was partially offset by reduced profits from Corrugated as pricescame under pressure. Measures to improve the South Africa Division'sprofitability started to bear fruit towards the end of the first half andoverall the Division recorded an increase in underlying operating profit. Merchant and Newsprint saw a significant decline in profits as our jointventure, Aylesford Newsprint, suffered from both a decline in selling pricesand an increase in input costs.The Group continued to benefit from its low cost base and its own fibre supplyfrom the emerging markets of Russia and South Africa, with circa 50% of theGroup's fibre demand available from these sources. Overall the Group delivereda further ¢â€š¬58 million in cost savings, representing circa 2.1% of the prioryear cash cost base, further contributing to the positive performance versusthe prior year. Mondi remains committed to targeting annual savings of at least2%.
Europe & International Division
Six months Six months Half year change % ¢â€š¬ million June 2008 June 2007 Segment revenue 2,742 2,544 +8
- of which inter-segment revenue 81 74
+9 EBITDA 364 321 +13 Underlying operating profit 215 182 +18 Bags & Specialities 109 80 +36 Uncoated Fine Paper 69 48 +44 Corrugated 37 54 -31 Capital expenditure 1 260 101 +157 Net segment assets 4,166 3,755 +11
Return on capital employed (%) 12.0% 9.8%
+22
1Capital expenditure is cash payments and excludes business combinations
Whilst the European business environment is increasingly challenging, our focuson driving down costs, leading market positions and exposure to the growthmarkets of emerging Europe and Russia (where demand is good), all contributedto underlying operating profit up 18% versus the prior period. The Divisiondelivered ¢â€š¬50 million in cost savings, with the benefits from thereorganisation of the Uncoated Fine Paper operations announced last year asignificant contributor.In the Bags & Specialities business underlying operating profits were up ¢â€š¬29million. The business has benefitted from significantly higher kraft paper andconverted bag prices (up around 6% since the year end), however convertingvolumes saw softness as demand from the building industry has started to slow.The results also benefit marginally from the acquisition of Unterland in thesecond half of 2007 which is now trading more in line with expectations.In the Uncoated Fine Paper (UFP) business underlying operating profits were up¢â€š¬21 million, with sales volumes only marginally down despite the closure of ourHungarian mill during the period. Selling prices are up on average 3% againstthe comparable period but are relatively unchanged since the year end. Thebusiness also benefited from the internal restructuring announced last year endas well as a better performance from all our mills including our Russian millwhere the local market continues to experience strong demand growth. In the Corrugated business, which represents 17% of divisional operatingprofit, underlying operating profits are down ¢â€š¬17 million at ¢â€š¬37 million asselling prices fell back following substantial increases achieved in 2007. Kraftliner prices are down 5% since the year end due to ongoing imports on theback of the weak US dollar. As expected, following a rapid rise during 2007,testliner prices have declined over 10% since the year end. The current pricedeclines are due to a substantial destocking combined with slowing demand. Boxprices, having increased since the year end, have now started to level off.Results were also impacted by cost inflation, particularly recycled waste fibrecosts up 20%, market related downtime and the timing of maintenance shuts.
We
will continue to monitor market conditions, in particular utilisation levels, and take action if appropriate.
The recent acquisition of Tire Kutsan in Turkey continues to underperform. This is mainly a result of softer demand coupled with new competitor capacitycoming on-stream and the resulting impact on prices in the local market. Anumber of small acquisitions were completed in the period, primarily focused onthe strengthening of the product mix and geographic coverage of our Bags &Specialities business. The enterprise value of all acquisitions in the periodtotalled ¢â€š¬36 million. The Division disposed of the remaining sheet feederplants in the United Kingdom for an enterprise value of ¢â€š¬23 million andcompleted the closure of the Szolnok mill in Hungary.The construction of the new 470,000 tonne recycled containerboard machine atSwiecie in Poland is progressing well (total cost of ¢â€š¬305 million). Orders forthe main machine have been placed and we remain on track for completion in thesecond half of 2009 within the budgeted cost. We anticipate this machine willhave the lowest operating cost of its type. The investment in the new boxplant and associated infrastructure (¢â€š¬45 million) has been delayed pendingagreement on the availability of subsidies.The project to modernise our Russian mill (total cost of ¢â€š¬525 million) is alsomaking good progress. All main equipment contracts have been agreed,construction has commenced and we remain on track for completion within thebudgeted cost by mid to late 2010. The key value drivers of this project areto improve efficiency and our cost base in Russia, increase energy productionand revenue by selling surplus energy to the grid and provide modest extracapacity (both pulp and paper) for the strongly growing domestic market.South AfricaDivision Six months Six months Half year change % ¢â€š¬ million June 2008 June 2007 Segment revenue 274 295 -7
- of which inter-segment revenue 174 168
+4 EBITDA 67 65 +3 Underlying operating profit 45 44 +2 Uncoated Fine Paper 30 32 -6 Corrugated 15 12 +25 Capital expenditure 1 23 11 +109 Net segment assets 789 981 -20
Return on capital employed (%) 10.6% 9.9%
+7
1Capital expenditure is cash payments and excludes business combinations
The South Africa Division recorded a small increase in underlying operatingprofits of ¢â€š¬1 million. An increase in profitability towards the end of theperiod followed a slow start due partially to the loss of more than three weeksof production at Richards Bay (largely as a result of an extensive maintenanceshut versus none in 2007). Throughout the period substantial progress was madeon the management of product mix to optimise margins as opposed to volumes. Results towards the end of the period benefited from product mix changes aswell as selling price increases for both domestic (5% increase effective 1 May)and export sales (following a 23% weakening of the rand). The Division has alsodelivered ¢â€š¬6 million in cost savings in the period.In the domestic market (which represents about one third of the Division's UFPvolume), further price increases of up to 15% have been announced forimplementation during August. This will more than compensate for risingdomestic input costs. The domestic market for UFP continues to grow at around6% per annum. Sales to Africa (which represent circa one third of thedivision's UFP volume) also continue to grow, where price increases (quoted inUS dollars) of around 5% are in progress. The remaining UFP volume, which isdestined for the international markets, will benefit from the weaker rand.
The corrugated operations consist of the white top linerboard machine at Richards Bay with approximately 80% of its production exported. The global supply/demand balance remained favourable and there have been no announcements of new capacity additions. Corrugated profits were up in the period with export sales benefiting from the weaker rand.
These factors should support the ongoing improvement in the South Africa Division's results on translation into euros for the full year.
Mondi Packaging South Africa (MPSA)
Six months Six months Half year change % ¢â€š¬ million June 2008 June 2007 Segment revenue 223 173 +29
- of which inter-segment revenue 14 17
-18 EBITDA 27 21 +29 Underlying operating profit 14 15 -7 Capital expenditure 1 25 14 +79 Net segment assets 308 207 +49
Return on capital employed (%) 11.1% 18.8%
-41
1Capital expenditure is cash payments and excludes business combinations
Demand and pricing remained positive with corrugated packaging and corrugatedcase material volumes up 7% and 3% respectively versus the comparator period. This performance was helped by good demand from the agricultural sector, whichrepresents half of MPSA's corrugated box revenue. The agriculture sector ishighly export driven and is expected to continue to enjoy good volumegrowth. Double digit price increases are targeted for the domesticcontainerboard market with effect from 1 October. The Lenco acquisition (rigidplastics manufacturer) completed in July 2007 contributed positively toprofits, in particular EBITDA, and is now performing better after a slowstart. The improved local performance is however impacted on translation intoeuros at the much weaker rand rate and a ¢â€š¬2 million charge for the amortisationof Lenco intangibles (2007: nil).
Progress on the execution of major projects has been good with the Felixton rebuild which was commissioned on time and within budget. This will increase containerboard production by 45,000 tonnes per annum to 155,000 tonnes per annum. This repositions Felixton to produce lightweight recycled containerboard to serve the fast growing domestic market.
Merchant and Newsprint Six months Six months Half year change % ¢â€š¬ million June 2008 June 2007 Segment revenue 293 286 +2
- of which inter-segment revenue - 1
n/a EBITDA 18 27 -33 Underlying operating profit 10 16 -38 Capital expenditure 1 5 8 -38 Net segment assets 248 265 -6
Return on capital employed (%) 15.0% 14.1%
+6
1 Capital expenditure is cash payments and excludes business combinations
At Europapier volumes and prices remained firm with good demand in emergingEurope and Russia. At Mondi Shanduka Newsprint earnings were up in localcurrency with volume and price increases largely eroded by a significantlyweaker rand exchange rate. Mondi's joint venture, Aylesford Newsprint (whichaccounted for just under half the Divisions 2007 full year operating profit),has seen a significant deterioration in profitability as a result of fallingselling prices, due to competition from imports, and rising energy andrecycled fibre input costs. The recent weakening of sterling should seecompetition from imports lessen.
Corporate and other
Net corporate costs are ¢â€š¬7 million higher than the comparable period in 2007due to the establishment of Mondi's own corporate capacity following thedemerger from Anglo American plc as well as the disposal of non-core businessesat the end of 2007 that contributed circa ¢â€š¬2 million of profits in thecomparable period. Input costs and currencyExternal wood cost pressures have continued to ease but waste-based fibre costswere up by circa 20% on the comparable period although they started to falltowards the end of the 2008 first half. Other input cost pressures remain aconcern and the rising oil price continues to feed through into rising energyand transport bills. Importantly, our results continued to benefit from Mondi'songoing focus on cost reductions, restructuring and productivity improvements,all of which help to mitigate the impact of cost inflation and delivered ¢â€š¬58million in cost savings during the period. The relatively modest levels of net export dependency of UFP and containerboard(circa 5% versus 20% for most coated and graphic paper grades) have helped tolimit the impact of the weak US dollar for Mondi. Whilst the profitability ofexport sales from South Africa have benefited from the weakness of the Rand,the strength of the emerging European currencies (up circa 5 to 10 % againstthe Euro) has impacted on the Polish, Czech and Slovakian operations' marginsfor Euro based exports.
Restructuring and operating special items
The previously announced closure of our 140,000 tonne uncoated fine paper millin Hungary was completed during the period (production ceased on 20 March2008). We also completed the restructuring and simplification of our EuropeanUFP divisional structure and are now beginning to see the benefits of theseactions coming through. The charge for impairment of the Hungarian site wasrecognised in the 2007 results and closure and other costs of ¢â€š¬26 million havebeen disclosed as a special item in the first half. In addition, we incurred a¢â€š¬5 million charge on the closure of the Nyborg Bags & Specialities plant inDenmark with certain of the volumes transferred within Mondi.
Loss on sale
The ¢â€š¬3 million loss on sale of the remaining United Kingdom Corrugated sheetfeeder plants for an enterprise value of ¢â€š¬23 million has been reflected as aspecial item. Net finance costsOverall finance charges were higher than the comparable period. For the firsthalf of 2007 Mondi was a subsidiary of Anglo American plc and operated under adifferent capital structure which resulted in lower finance charges.
Taxation
The effective tax rate before special items, of 29% is down one percentagepoint on the comparable period and is similar to the 2007 year end rate. Thisis mainly a result of lower tax rates in our key geographies. The reported taxrate after special items of 36% is 12 percentage points higher than thecomparator period in 2007, principally as disposals in the first half of 2007were realised in a tax efficient manner.
Minority interests
Minority interests for the half year were ¢â€š¬3 million lower than the comparator period as earnings were down at the significant operations where there are non-controlling interests particularly in our Corrugated operations within Europe & International.
Cash flow and borrowingsAs expected, Group borrowings have increased by ¢â€š¬148 million since the year endas the rate of capital expenditure increases due to the commencement of the twokey capital projects in Poland and Russia. In the period ¢â€š¬140 million wasspent on these two projects versus nil in the comparator period (full year2007: ¢â€š¬40 million). Mondi's other major primary production sites are wellinvested following major projects in recent years and, as such, capitalexpenditure going forward will reduce to levels below depreciation. Mondi enjoys a strong financial position and as at the end of June the Grouphad just under ¢â€š¬1.1 billion of undrawn committed debt facilities (¢â€š¬0.8 billionof which is available under a ¢â€š¬1.55 billion facility expiring on 22 June 2012).
Principal risks and uncertainties
It is in the nature of our business that Mondi is exposed to risks anduncertainties which may have an impact on future performance and financialresults, as well as upon our ability to meet certain social and environmentalobjectives. The Group believes that it has effective systems and controls inplace to manage the key risks identified below. The markets for paper and packaging products are highly competitive, with manyparticipants and prices determined by market conditions including industryoperating capacities and exchange rates. Prices of Mondi's key paper gradeshave experienced substantial fluctuations in the past; however, Mondi isflexible and responsive to changing market and operating conditions and theGroup's significant exposure to low cost emerging markets provides some measureof protection from market conditions.Materials, energy and consumables used by Mondi include significant amounts ofwood, pulp, recovered paper, packaging papers and chemicals. Increases in thecosts of any of these raw materials, or any difficulties in procuring wood incertain countries, could have an adverse effect on Mondi's business,operational performance or financial condition. However, Mondi's relativelyhigh level of integration and access to its own fibre in Russia and SouthAfrica, acts to help mitigate this risk.Mondi has announced two significant capital investments to expand and upgradeexisting facilities in Poland and Russia. These projects carry risks and Mondihas put in place dedicated teams to ensure delivery of the projects on time andwithin budget.
Board and Group Executive
As stated in the prospectus, a requirement of the South African Ministry ofFinance is that the Chief financial officer's role is based at the head officein South Africa from the beginning of 2009. Paul Hollingworth, our Chieffinancial officer, has decided not to relocate and as such, will step down fromthe Board as Chief financial officer during the fourth quarter. He will staywith Mondi until the end of December 2008. Mondi would like to thank Paul forhis significant contribution to the Group and also for helping to establishMondi as a separate listed Group following its demerger from Anglo Americanplc. We are pleased that we have an excellent replacement, Andrew King, whohas worked for Mondi for 7 years, latterly as Group strategy and businessdevelopment director, who will take up the position of Chief financial officerand will be based in South Africa. Andrew King will join the Board as Chieffinancial officer during the fourth quarter.
Interim dividend
An interim dividend of 7.7 euro cents per share, an increase of 5.5%, will bepaid on 16 September 2008 to those shareholders on the register of Mondi plc on29 August 2008. An equivalent interim dividend will be paid in South African rand on 16September 2008 to shareholders on the register of Mondi Limited on 29 August2008. Holders of Mondi Limited Depositary Interests who hold their intereststhrough Equiniti Corporate Nominee Ltd will receive their dividend in UKsterling on 23 September 2008.
Current year outlook
The 8% increase in first half underlying operating profits against a worseningeconomic backdrop is a good result. It is testament to Mondi's strategicpositioning, in particular, its broad business base with leading marketpositions, emerging market focus, including major positions in South Africa andRussia (where demand is good), continued push to drive down costs and awillingness to respond quickly to changing market conditions.In the second half, South Africa should see a further improvement as actions toenhance profitability continue to take effect. This should help to offset asoftening trading environment in Europe. Overall Mondi expects to make progressfor the year as a whole.
Directors' responsibility statement
The directors confirm that to the best of their knowledge:
* The condensed set of combined and consolidated financial statements has
been prepared in accordance with IAS 34, 'Interim Financial Reporting';
* The Half-yearly report includes a fair review of the important events
during the six months ended 30 June 2008 and a description of the principal
risks and uncertainties for the remaining six months of the year ending 31
December 2008;
* There have been no changes in the Group's related party relationships from
those reported in the Group's annual financial statements for the year
ended 31 December 2007; and
* The Half-yearly report includes a fair review of the Group's related party transactions.By order of the Boards, DavidHathorn Paul HollingworthDirector Director 29 July 2008
Independent review report to the members of Mondi Limited
Introduction
We have been instructed by the company to review the condensed financial information of the Mondi Group for the six months ended 30 June 2008 which comprises the condensed combined and consolidated income statement, the condensed combined and consolidated balance sheet, the condensed combined and consolidated cash flow statement, the condensed combined and consolidated statement of total recognised income and expense and related notes 1 to 20.
We
have read the other information contained in the Half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.
Directors' responsibilities
The Half-yearly report, including the financial information contained therein,is the responsibility of, and has been approved by, the directors. Thedirectors are responsible for preparing the Half-yearly report in accordancewith the basis of preparation set out in note 1, the JSE Listing Requirementsand the requirements of International Accounting Standard 34, "InterimFinancial Reporting", which require that the accounting policies andpresentation applied to the Half-yearly figures are consistent with thoseapplied in preparing the preceding audited financial information except whereany changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained inInternational Standards on Review Engagements 2410 - "Review of InterimFinancial Information performed by Independent Auditor of the Entity" issued bythe International Accounting Standards Board. A review consists principally ofmaking enquiries of group management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilitiesand transactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing and therefore provides alower level of assurance than an audit. Accordingly, we do not express anaudit opinion on the financial information.
Review conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half-yearly report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34.
Deloitte & TouchePer C SagarPartner29 July 2008
Note: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial information since firstpublished. These matters are the responsibility of the directors but nocontrol procedures can provide absolute assurance in this area.
Independent review report to the members of Mondi plc
We have been engaged by the company to review the condensed set of financialstatements in the Half-yearly report for the six months ended 30 June 2008which comprises the condensed combined and consolidated income statement, thecondensed combined and consolidated balance sheet, the condensed combined andconsolidated cash flow statement, the condensed combined and consolidatedstatement of recognised income and expense and related notes 1 to 20. We haveread the other information contained in the Half-yearly report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe information in the condensed set of financial statements.This report is made solely to the company in accordance with InternationalStandard on Review Engagements (UK and Ireland) 2410 issued by the AuditingPractices Board. Our work has been undertaken so that we might state to thecompany those matters we are required to state to them in an independent reviewreport and for no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the company, for ourreview work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The Half-yearly report is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the Half-yearly reportin accordance with the Disclosure and Transparency Rules of the UnitedKingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this Half-yearly report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the Half-yearly report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the Half-yearlyreport for the six months ended 30 June 2008 is not prepared, in all materialrespects, in accordance with International Accounting Standard 34 as adopted bythe European Union and the Disclosure and Transparency Rules of the UnitedKingdom's Financial Services Authority.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
29 July 2008
London, UK
Note: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial information since firstpublished. These matters are the responsibility of the directors but nocontrol procedures can provide absolute assurance in this area.
Condensed combined and consolidated income statement For the six months ended 30 June 2008
(Reviewed) (Reviewed) (Audited) Six months ended Six months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Special Special Special Before items Before items Before items special (note special (note special (note ¢â€š¬ million Note items 5) items 5) items 5) Group revenue 4 3,263 - 3,263 3,052 - 3,052 6,269 - 6,269 Materials, energy and consumables used (1,729) - (1,729) (1,577) - (1,577) (3,265) - (3,265) Variable selling expenses (281) - (281) (280) - (280) (558) - (558) Gross margin 1,253 - 1,253 1,195 - 1,195 2,446 - 2,446 Maintenance and other indirect expenses (143) - (143) (130) - (130) (289) - (289) Personnel costs (470) (17) (487) (446) (5) (451) (906) (17) (923) Other net operating expenses (184) (16) (200) (198) - (198) (381)
- (381) Depreciation and
amortisation (193) (3) (196) (178) (3) (181) (368)
(60) (428) Operating profit/ (loss) from subsidiaries and joint
ventures 4 263 (36) 227 243 (8) 235 502
(77) 425 Net (loss)/ profit on disposals 5 - (3) (3) - 84 84 - 83 83 Net income from associates 2 - 2 2 - 2 2 - 2 Total profit /(loss) from operations and associates 265 (39) 226 245 76 321 504 6 510 Investment income 19 - 19 21 - 21 44 - 44 Interest expense (74) - (74) (63) (29) (92) (143) (29) (172) Net finance costs 6 (55) - (55) (42) (29) (71) (99) (29) (128) Profit/ (loss) before tax 210 (39) 171 203 47 250 405 (23) 382 Taxation (charge)/ credit 7 (61) - (61) (61) 1 (60) (117) 15 (102) Profit/ (loss) for the financial period/year 149 (39) 110 142 48 190 288 (8) 280 Attributable to: Minority interests 23 - 23 26 - 26 47 - 47 Equity holders 126 (39) 87 116 48 164 241 (8) 233 Pro forma earnings per share ('EPS') for profit attributable to equity holders Basic EPS (¢â€š¬ cents) 8 17.1 31.9 45.4 Diluted EPS (¢â€š¬ cents) 8 16.9 31.9 45.1 Basic underlying EPS (¢â€š¬ cents) 8 24.8 22.6 46.9 Diluted underlying EPS (¢â€š¬ cents) 8 24.4 22.6 46.7 Basic headline EPS (¢â€š¬ cents) 8 18.3 17.3 39.5 Diluted headline EPS (¢â€š¬ cents) 8 18.0 17.3 39.3
There were no discontinued operations in any of the periods presented.
Condensed combined and consolidated balance sheetAs at 30 June 2008 (Audited) (Reviewed) (Reviewed) As at As at As at 30 June 30 June 31 December ¢â€š¬ million Note 2008 2007 2007 Intangible assets 524 381 520 Property, plant and equipment 3,750 3,594 3,731 Forestry assets 206 220 224 Investments in associates 7 7 6 Financial asset investments 25 25 25 Deferred tax assets 39 40 32 Retirement benefits surplus 15 8 11
Derivative financial instruments 5 -
- Total non-current assets 4,571 4,275 4,549 Inventories 759 710 760 Trade and other receivables 1,349 1,355 1,304 Current tax assets 24 33 52 Cash and cash equivalents 10 152 176 180
Derivative financial instruments 19 7
17 Total current assets 2,303 2,281 2,313 Assets held for sale - 2 - Total assets 6,874 6,558 6,862 Short-term borrowings 10 (406) (311) (453) Trade and other payables (1,095) (1,016) (1,150) Current tax liabilities (87) (87) (81) Provisions (14) (9) (14)
Derivative financial instruments (14) (2)
(3) Total current liabilities (1,616) (1,425) (1,701)
Medium and long-term borrowings 10 (1,401) (1,200)
(1,234)
Retirement benefits obligation (190) (212)
(200) Deferred tax liabilities (313) (317) (322) Provisions (46) (42) (50)
Other non-current liabilities (16) (15)
(17)
Derivative financial instruments - -
(2)
Total non-current liabilities (1,966) (1,786)
(1,825) Total liabilities (3,582) (3,211) (3,526) Net assets 3,292 3,347 3,336 Equity
Anglo American plc investment in the Group 11 - 2,051
- Ordinary share capital 11 114 - 114 Share premium 11 532 - 532
Retained earnings and other reserves 11 2,239 944
2,317
Total attributable to equity holders 2,885 2,995
2,963 Minority interests 407 352 373 3,292 3,347 3,336
Condensed combined and consolidated cash flow statement For the six months ended 30 June 2008
(Reviewed) (Reviewed) (Audited) Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million Note 2008 2007 2007 Cash inflows from operations 310 356 957 Dividends from associates - 1 1 Income tax paid (27) (40) (93)
Net cash inflows from operating activities 283 317
865
Cash flows from investing activities Acquisition of subsidiaries, net of cash and
cash equivalents (35) (7) (193)
Proceeds from disposal of subsidiaries, net of
cash and cash equivalents 2 103 112
Proceeds from disposal of associates - 54
54
Purchases of property, plant and equipment 12 (313) (139)
(406)
Proceeds from disposal of property, plant and
equipment 12 7 4 17
Investment in forestry assets (22) (19)
(41)
Purchase of available for sale investments - -
(2)
Purchase of intangible assets (4) (2)
(4)
Proceeds from disposal of available-for-sale
investments 2 - 2
Loan (advances to)/repayments from related
parties (2) 11 15 Interest received 9 9 18 Other investing activities 1 (1) (6)
Net cash (used in)/generated from investing
activities (355) 13 (434)
Cash flows from financing activities Repayment of short-term borrowings 10 (143) (889)
(945)
Proceeds from medium and long-term borrowings 10 285 548
564 Interest paid (69) (88) (139)
Dividends paid to minority interests (9) (21)
(47)
Dividends paid to equity holders 9,11 (80) -
(38)
Dividends paid to Anglo American plc group
companies 11 - (202) (202)
Increase in Anglo American plc invested
capital 11 - 120 120 Purchase of treasury shares 11 (15) - (33) Other financing activities 13 (10) 3
Net cash used in financing activities (18) (542)
(717)
Net decrease in cash and cash equivalents1 (90) (212)
(286)
Cash and cash equivalents1 at start of period/
year 10 59 358 358
Cash movements in the period/year 10 (90) (212)
(286) Reclassifications 10 - (3) (3)
Effects of changes in foreign exchange rates 10 1 (7)
(10)
Cash and cash equivalents1at end of period/
year (30) 136 59 Note:
1. Includes overdrafts and, for applicable periods, cash balances held in disposal groups.
Condensed combined and consolidated statement of recognised income and expense For the six months ended 30 June 2008
(Reviewed) (Reviewed) (Audited) Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007
Fair value gains/(losses) accreted on cash flow hedges, net of amounts recycled to the combined and
consolidated income statement 6 (4) (3)
Actuarial gains/(losses) on post-retirement benefit
schemes 2 (19) 12
Fair value losses on available-for-sale investments - -
(1) Exchange gains on demerger - - 9
Exchange losses on translation of foreign operations (64) (35)
(71) Other movements - 2 (1)
Total expense recognised directly in equity1 (56) (56)
(55) Profit for the period/year 110 190 280
Total recognised income for the period/year 54 134
225 Attributable to: Minority interests 46 32 56 Equity holders 8 102 169 Note:1 Net of related tax
Notes to the condensed combined and consolidated financial information
1.Basis of preparation
The Group has two separate legal parent entities, Mondi Limited and Mondi plc,which operate under a dual listed company (DLC) structure. The substance of theDLC structure is such that Mondi Limited, and its subsidiaries, and Mondi plc,and its subsidiaries, operate together as a single economic entity through asharing agreement, with neither parent entity assuming a dominant role.Accordingly, Mondi Limited and Mondi plc are reported on a combined andconsolidated basis as a single reporting entity.
During the six months ended 30 June 2007, the Group did not form a separate legal group. The equity reconciliation for this period shows the movement in the Anglo American plc equity interest in the Group.
The condensed combined and consolidated Half-yearly financial information forthe six months ended 30 June 2008 has been prepared in accordance with IAS34,'Interim Financial Reporting'. It should be read in conjunction with theGroup's annual financial statements for the year ended 31 December 2007, whichhave been prepared in accordance with all applicable International FinancialReporting Standards (IFRSs). There are no differences for the Group in applyingIFRSs as issued by the International Accounting Standards Board and as endorsedby the European Union (EU). Consequently, the Group's annual financialstatements for the year ended 31 December 2007 are also compliant with IFRSs asendorsed by the EU. The information for the year ended 31 December 2007 does not constitutestatutory accounts as defined by section 240 of the Companies Act 1985 of theUnited Kingdom. A copy of the statutory accounts for that year has beendelivered to the Registrar of Companies. The auditors' report was not qualifiedand did not contain statements under Section 237(2) or (3) of the Companies
Act1985. 2.Accounting policies
The same accounting policies, methods of computation and presentation have beenfollowed in the preparation of the condensed combined and consolidatedfinancial statements as were applied in the preparation of the Group's annualfinancial statements for the year ended 31 December 2007. In line with the transitional provisions of IFRIC 14, 'IAS 19 - The Limit on aDefined Benefit Asset, Minimum Funding Requirements and their Interaction' theGroup has retrospectively increased its surplus restriction as at 30 June 2007and a consequential decrease in the Group's combined and consolidated netassets of ¢â€š¬12 million has been recognised. The Group's retirement benefitssurplus as at the same date has decreased from ¢â€š¬25 million to ¢â€š¬8 million. TheGroup's reported earnings for the six months ended 30 June 2007 are unaffectedby this adjustment and there is therefore no impact on the Group's reported
EPSfor same period. 3.Seasonality
The seasonality and cyclicality of the Group's operations do not impact significantly on the condensed combined and consolidated financial statements.
4.Segmental informationAs described in the Group's annual financial statements for the year ended 31December 2007 and the Group's interim management statement for the period ended30 April 2008, from 1 January 2008, in place of the former business units ofMondi Packaging and Mondi Business Papers, the Group operates through twodivisions: Europe & International and South Africa. Segmental comparators havebeen retrospectively restated to conform to the new reporting structure.
Primary reporting format - by business segment
The Group's revenues are disclosed by business segment as follows:
(Restated) Six months ended Six months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Segment Inter-segment Group Segment Inter-segment Group Segment Inter-segment Group ¢â€š¬ million revenue revenue revenue revenue revenue revenue revenue revenue revenue Europe & International Bags & Specialities 1,121 (10) 1,111 994 (11) 983 2,005 (19) 1,986 Uncoated Fine Paper 846 (92) 754 837 (85) 752 1,666 (177) 1,489 Corrugated 830 (34) 796 756 (21) 735 1,616 (55) 1,561 Intra-segment elimination (55) 55 - (43) 43 - (98) 98 - 2,742 (81) 2,661 2,544 (74) 2,470 5,189 (153) 5,036 South Africa Uncoated Fine Paper 221 (122) 99 248 (121) 127 491 (267) 224 Corrugated 63 (62) 1 60 (60) - 125 (125) - Intra-segment elimination (10) 10 - (13) 13 - (25) 25 - 274 (174) 100 295 (168) 127 591 (367) 224 Mondi Packaging South Africa 223 (14) 209 173 (17) 156 419 (28) 391 Merchant and Newsprint 293 - 293 286 (1) 285 591 (1) 590 Corporate and other businesses - - - 14 - 14 28 - 28 Inter-segment revenue (269) 269 - (260) 260 - (549) 549 - Group total 3,263 - 3,263 3,052 - 3,052 6,269 - 6,269
4.Segmental information (continued)
The Group's operating result, both before and after operating special items, is disclosed by business segment as follows:
Segment operating profit Segment operating profit before special items1 after special items1 (Restated) (Restated) Six Year Six Six Year months Six months ended months months ended ended ended ended ended 31 Dec 31 Dec 30 June 30 June 30 June 30 June ¢â€š¬ million 2008 2007 2007 2008 2007 2007 Europe & International Bags & Specialities 109 80 154 103 80 153 Uncoated Fine Paper 69 48 99 42 48 36 Corrugated 37 54 133 35 54 128 215 182 386 180 182 317 South Africa Uncoated Fine Paper 30 32 53 30 28 48 Corrugated 15 12 25 15 12 25 45 44 78 45 40 73 Mondi Packaging South Africa 14 15 35 14 16 35 Merchant and Newsprint 10 16 40 10 16 40 Corporate and other businesses (21) (14) (37) (22) (19) (40) Group total2 263 243 502 227 235 425 Notes:
1.Special items are set out in note 5.
2.Stated after green energy sales and disposal of emissions credits totalling ¢â€š¬23million (30 June 2007: ¢â€š¬19 million; 31 December 2007: ¢â€š¬42 million), which areincluded within 'Other net operating expenses' in the Group's condensedcombined and consolidated income statement.
4.Segmental information (continued)
The Group's operating segment net assets are presented, and reconciled to 'Netassets' in the Group's condensed combined and consolidated balance sheet, asfollows: (Restated) As at 30 June 2008 As at 30 June 2007
As at 31 December 2007 Net Net Net Segment Segment segment Segment Segment segment Segment Segment segment¢â€š¬ million assets liabilities assets1 assets liabilities assets1 assets liabilities assets1 Europe & International Bags & Specialities 1,965 (313) 1,652 1,788 (271) 1,517 1,851 (305) 1,546 Uncoated Fine Paper 1,605 (200) 1,405 1,556 (197) 1,359 1,491 (203) 1,288 Corrugated 1,356 (247) 1,109 1,117 (238) 879 1,389 (316)16 1,073 Intra-segment elimination (30) 30 - (19) 19 - (45) 45 - 4,896 (730) 4,166 4,442 (687) 3,755 4,686 (779) 3,907 South Africa Uncoated Fine Paper 765 (99) 666 939 (114) 825 913 (100) 813 Containerboard 138 (15) 123 168 (12) 156 165 (12) 153 Intra-segment elimination (2) 2 - (4) 4 - (4) 4 - 901 (112) 789 1,103 (122) 981 1,074 (108) 966 Mondi Packaging South Africa 385 (77) 308 269 (62) 207 426 (92) 334 Merchant and Newsprint 330 (82) 248 349 (84) 265 337 (90) 247 Corporate and other businesses 5 (2) 3 25 (6) 19 12 (14) (2) Inter-segment elimination (110) 110 - (108) 108 - (157) 157 - Segments total 6,407 (893) 5,514 6,080 (853) 5,227 6,378 (926) 5,452 Unallocated: Investment in associates 7 - 7 7 - 7 6 - 6 Deferred tax assets/ (liabilities) 39 (313) (274) 40 (317) (277) 32 (322) (290) Other non-operating assets/ (liabilities)2 244 (569) (325) 230 (530) (300) 241 (591) (350) Group trading capital employed 6,697 (1,775) 4,922 6,357 (1,700) 4,657 6,657 (1,839) 4,818 Financial investments 25 - 25 25 - 25 25 - 25 Net debt 152 (1,807) (1,655) 176 (1,511) (1,335) 180 (1,687) (1,507) Group net assets 6,874 (3,582) 3,292 6,558 (3,211) 3,347 6,862 (3,526) 3,336 Notes:
1 Net segment assets are operating assets less operatingliabilities. Operating assets are intangible assets, tangible assets, forestryassets, retirement benefits surplus, inventories and operating receivables.Operating liabilities are non-interest bearing current liabilities, restorationand decommissioning provisions and provisions for post-retirement benefits.
2 Other non-operating assets consist of derivative assets, current income tax receivables, other non-operating receivables and assets held for sale. Other non-operating liabilities consist of derivative liabilities, non-operating provisions, current income tax liabilities and liabilities directly associated with assets held for sale.
4.Segmental information (continued)
Secondary reporting format - by geographical segment
The Group's revenues are presented by customer location as follows:
Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 2007 2007 South Africa 284 291 618 Rest of Africa 133 93 213 Western Europe 1,552 1,587 3,162 Eastern Europe 688 492 1,148 Russia 224 258 421 North America 97 98 194 South America 15 10 29 Asia and Australia 270 223 484 Group total 3,263 3,052 6,269
The Group's revenues are presented by geographical origin as follows:
Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 2007 2007 South Africa 470 469 995 Rest of Africa 6 5 12 Western Europe 1,475 1,376 2,840 Eastern Europe 895 797 1,615 Russia 282 270 546 North America 58 61 121 Asia and Australia 77 74 140 Group total 3,263 3,052 6,269
4.Segmental information (continued)
The Group's operating assets and liabilities are presented by geographical location as follows:
As at 30 June 2008 As at 30 June 2007 As at 31 December 2007 Net Net Net Segment Segment segment Segment Segment segment Segment Segment segment ¢â€š¬ million assets liabilities assets assets liabilities assets assets liabilities assets South Africa 1,266 (141) 1,125 1,411 (183) 1,228 1,444 (139) 1,305 Rest of Africa 12 (4) 8 11 (6) 5 19 (5) 14 Western Europe 2,204 (374) 1,830 2,310 (378) 1,932 2,376 (546) 1,830 Eastern Europe 2,132 (282) 1,850 1,676 (196) 1,480 1,855 (144) 1,711 Russia 576 (40) 536 446 (35) 411 446 (27) 419 North America 97 (12) 85 113 (16) 97 112 (20) 92 Asia and Australia 120 (40) 80 113 (39) 74 126 (45) 81 Group total 6,407 (893) 5,514 6,080 (853) 5,227 6,378 (926) 5,452 5.Special items Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007
Operating special items Asset impairments and closure costs
Uncoated Fine Paper (Europe & International) (26) - (57) Bags & Specialities (Europe & International) (5) - - Uncoated Fine Paper (South Africa) - (4) (4) (31) (4) (61)
Mondi Packaging South Africa negative goodwill - 1
1 Retention arrangements (5) (5) (9)
Accelerated charge on Anglo American plc
share-based award schemes - - (8) Total operating special items (36) (8) (77) Non-operating special items
Disposal of UK Corrugated sheet feeder business (3) -
-
Disposal of partial interest in Mondi Packaging
Paper Swiecie - 57 57
Disposal of interest in Bischof + Klein GmbH - 19
19
Sale of assets and other items - 8
7
Net (loss)/profit on disposal (3) 84
83 Financing cost - (29) (29)
Total non-operating special items (3) 55
54
Total special items before tax (39) 47
(23) Taxation - 1 15
Total special items after tax1 (39) 48
(8) Note:
1 Attributable to equity holders of the Group.
5.Special items (continued)Operating special items
The previously announced closure of the Group's 140,000 tonne uncoated finepaper mill in Hungary was completed during the period (production ceased on 20March 2008). The Group also completed the restructuring and simplification ofthe European Uncoated Fine Paper divisional structure and is now beginning tosee the benefits of these actions coming through. The charge for impairment ofthe Hungarian site was recognised in the 2007 results and closure and othercosts of ¢â€š¬26 million have been disclosed as a special item in the first half. In addition, the Group incurred a ¢â€š¬5 million charge on the closure of theNyborg Bags & Specialities plant in Denmark with certain of the volumestransferred within Mondi.
The equity-settled retention arrangements for the Group's senior management resulted in a share-based payments incremental fair value charge of ¢â€š¬5 million. It is expected that a further ¢â€š¬10 million will be incurred under these retention arrangements over the period ending 2 July 2009.
Non-operating special items The Group disposed of its equity interest in the Corrugated sheet feederbusiness in the United Kingdom for ¢â€š¬3 million and recorded an associated lossof ¢â€š¬3 million. 6.Net finance costs Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007 Investment income
Interest and other financial income 8 9
24
Expected return on defined benefit
arrangements 10 10 22
Foreign currency gains/(losses) 1 1 2
(2) Total investment income 19 21 44 Interest expense Interest on bank loans, overdrafts and finance leases 2 (67) (52) (119) Interest on defined benefit arrangements (13) (13) (28) (80) (65) (147) Less: interest capitalised 6 2 4
Total interest expense before special items (74) (63) (143)
Special items financing cost - (29)
(29)
Total interest expense after special items (74) (92) (172) Net finance costs (55) (71) (128) Notes:
1 Net of fair value movements attributable to forward foreign exchange contracts.
2 Net of fair value movements attributable to interest rateswap contracts 7. Income tax expense Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 2007 2007 United Kingdom - - (1) Overseas 55 58 88 55 58 87 Deferred taxation 6 2 15 61 60 102 The Group's estimated effective annual income tax rate applied to the Group'sunderlying interim pre tax earnings is 29% (six months ended 30 June 2007:30%). The Group's estimated effective annual income tax rate applied to theGroup's interim pre tax earnings is 36% (six months ended 30 June 2007: 24%). The Group's share of associated undertakings' taxation for the six months ended30 June 2008 is ¢â€š¬0.5 million (six months ended 30 June 2007: ¢â€š¬0.4 million, yearended 31 December 2007: ¢â€š¬1.0 million).
8.Pro forma EPS
The Group completed its demerger from the Anglo American plc group of companieson 2 July 2007 ('the demerger date'). The ordinary shares of Mondi Limited andMondi plc were then admitted to the Johannesburg Securities Exchange ('JSE')and the London Stock Exchange respectively on 3 July 2007 ('the listing date').In order to provide a meaningful comparison, the number of ordinary sharesissued on the listing date has been retrospectively applied to the earningsreported for the comparative Half-yearly period, which falls prior to thedemerger date. Six Six Year months months ended ended ended 30 30 31 June June December ¢â€š¬ cents per share 2008 2007 2007
Profit for the financial period/year attributable to equity holders
Basic EPS 17.1 31.9 45.4 Diluted EPS 16.9 31.9 45.1
Underlying earnings for the financial period/year1
Basic EPS 24.8 22.6 46.9 Diluted EPS 24.4 22.6 46.7
Headline earnings for the financial period/year2
Basic EPS 18.3 17.3 39.5 Diluted EPS 18.0 17.3 39.3 Notes:1.The Boards believe that underlying EPS provides a useful additional non-GAAPmeasure of the Group's underlying performance. Underlying EPS excludes theimpact of special items. Please see the reconciliation below.
2.The presentation of headline EPS is mandated under the JSE Listing Requirements. Headline earnings has been calculated in accordance with Circular 8/2007, 'Headline Earnings', as issued by the South African Institute of Chartered Accountants. Please see the reconciliation below.
8.Pro forma EPS (continued) Year Six Six months months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007
Profit for the financial period/year attributable
to equity holders 87 164 233 Special items: operating 36 8 77
Special items: financing costs - 29
29
Net loss/(profit) on disposals 3 (84) (83) Related tax - (1) (15)
Underlying earnings for the financial period/year 126 116 241
Special items: restructuring and closure costs (28) -
-
Special items: financing costs - (29)
(29)
Special items: retention arrangements (5) (5)
(9)
Special items: accelerated charges on exiting Anglo American plc share and option schemes - -
(8)
Loss on disposal of tangible fixed assets - 1
1 Related tax - 6 7 Headline earnings for the financial period/year 93 89 203 Year Six months Six months ended ended ended 31 30 June 30 June December Million 2008 2007 2007
Basic number of ordinary shares1
outstanding2 508 514 513
Effect of dilutive potential ordinary
shares3 8 - 4
Diluted number of ordinary shares
outstanding 516 514 517 Note: 1.The total number of ordinary shares in issue as at 30 June 2008 is 514,137,127,which is comprised of 146,896,322 Mondi Limited R0.20 ordinary shares listed onthe JSE Limited and 367,240,805 ¢â€š¬0.20 ordinary shares listed on the LondonStock Exchange. 2.The basic number of ordinary shares outstanding represents the weighted averagenumber in issue for Mondi Limited and Mondi plc, pro-rated for the year ended31 December 2007, as adjusted for the weighted average number of treasuryshares held. 3.Diluted EPS is calculated by adjusting the weighted average number of ordinaryshares in issue on the assumption of conversion of all potentially dilutiveordinary shares.9 Dividends Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007
Amounts recognised as distributions to
equity holders
Final and interim dividends paid 80 -
38
Amounts proposed as distributions to
equity holders1
Proposed interim and final dividends 40 38
80
Full year dividend paid and proposed
118 9 Dividends (continued) Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ cents 2008 2007 2007
Amounts recognised as distributions to
equity holders
Final and interim dividends paid 15.7 -
7.3
Amounts proposed as distributions to
equity holders1
Proposed interim and final dividends 7.7 7.3
15.7
Full year dividend paid and proposed
23.0 Note:
1.Proposed interim dividends are not accrued for until approved by the directors. Proposed final dividends are not accrued for until approved by the ordinary equity holders of Mondi Limited and Mondi plc, respectively.
The interim dividend for the year ending 31 December 2008 of 7.7 euro cents perordinary share will be paid on 16 September 2008 to Mondi Limited and Mondi plcordinary shareholders on the relevant registers on 29 August 2008. The dividendwill be paid from distributable reserves of Mondi Limited and of Mondi plc, aspresented in the respective company annual financial statements for the yearended 31 December 2007.
The interim dividend for the year ending 31 December 2008 will be paid in accordance with the following timetable:
Mondi Limited Mondi plc
Last date to trade shares cum-dividend
22 August 22 August JSE Limited 2008 2008 Not 26 August London Stock Exchange applicable 2008
Shares commence trading ex-dividend
25 August 25 August JSE Limited 2008 2008 Not 27 August London Stock Exchange applicable 2008 Record date 29 August 29 August JSE Limited 2008 2008 Not 29 August London Stock Exchange applicable 2008 2 2
Last date for Dividend Reinvestment Plan (DRIP) September September elections by Central Securities Depository Participants 2008 2008
Last date for DRIP elections to UK Registrar and South 3 3 African Transfer Secretaries by shareholders in Mondi September September Limited and Mondi plc 2008 2008 Payment date 16 Not September UK Register applicable 2008 16 16 September September South African Register 2008 2008 19 September Not Depositary Interest Holders (dematerialised DIs) 2008 applicable 23 September Not Holders within the Equiniti Corporate Nominee 2008
applicable Currency conversion dates 30 July 30 July ZAR/euro 2008 2008 8 Not September Euro/sterling applicable 2008 23 19 September September
DRIP purchase settlement dates 2008 20081
Note: 1 23 September 2008 for Mondi plc South African branch register.Share certificates on the South African registers of Mondi Limited and Mondiplc may not be dematerialised or rematerialised between 25 August 2008 and 31August 2008, both dates inclusive, nor may transfers between the UK and SouthAfrican registers of Mondi plc take place between 20 August 2008 and 31 August2008, both dates inclusive.10 Net debt The Group's net debt position, excluding disposal groups for relevantperiods, is as follows: Debt due Debt due Cash and cash within one after one Total¢â€š¬ million equivalents1 year2 year net debt Balance at 1 January 2007 358 (1,181) (656) (1,479) Cash flow (212) 889 (548) 129 Business combinations and disposal of businesses - 7 - 7 Reclassifications (3) 3 - - Currency movements (7) 11 4 8 Closing balance at 30 June 2007 136 (271) (1,200) (1,335) Cash flow (74) 56 (16) (34) Business combinations and disposal of businesses - (44) (122) (166) Reclassifications - (85) 85 - Currency movements (3) 12 19 28 Closing balance at 31 December 2007 59 (332) (1,234) (1,507) Cash flow (90) 143 (285) (232) Business combinations - (3) (5) (8) Disposal of businesses - 4 16 20 Reclassifications - (42) 42 - Currency movements 1 6 65 72 Closing balance at 30 June 2008 (30) (224) (1,401) (1,655) Notes:
1.The Group operates in certain countries (principally South Africa) where theexistence of exchange controls may restrict the use of certain cash balances.These restrictions are not expected to have any material effect on the Group'sability to meet its ongoing obligations. 2.Excludes overdrafts, which are included as cash and cash equivalents. As at 30June 2008, short-term borrowings on the balance sheet of ¢â€š¬406 million (30 June2007: ¢â€š¬311 million, 31 December 2007: ¢â€š¬453 million) include ¢â€š¬182 million ofoverdrafts (30 June 2007: ¢â€š¬40 million, 31 December 2007: ¢â€š¬121 million). The following table shows the undrawn amounts on the Group's committed loanfacilities: Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 20071 2007 Expiry date In one year or less 154 - 185 In more than one year 934 - 1,025 Total credit available 1,088 - 1,210 Note: 1 Credit lines available prior to the demerger from Anglo Americanplc are not considered to be representative of the Group's liquidity profilepost-demerger.11 Condensed statement of changes in equity Share capital Combined share Total Anglo Mondi Mondi Mondi capital equity investment Limited Limited plc and attributable in Mondi share share share share Retained Other to equity ¢â€š¬ million Group capital premium capital premium earnings reserves1 holders At 1 January 2007 1,899 ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 1,899 1,100 (33) 2,966 Anglo American plc contribution 120 ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 120 ¢â‚¬â€œ ¢â‚¬â€œ 120 Dividend in specie 32 ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 32 (32) ¢â‚¬â€œ ¢â‚¬â€œ Dividends paid to Anglo American plc ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (202) ¢â‚¬â€œ (202) Retained profit pre-demerger ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 164 ¢â‚¬â€œ 164 Currency translation adjustment ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ - (35) (35) Other movements ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ - (18) (18) At 30 June 2007 2,051 - - - 2,051 1,030 (86) 2,995 Termination of Anglo American plc equity interest (2,051) 3 540 ¢â‚¬â€œ (1,508) (832) 2,411 71 Dividend in specie to Anglo American plc shareholders ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 2,938 2,938 ¢â‚¬â€œ (2,938) ¢â‚¬â€œ Share issue expenses ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (74) ¢â‚¬â€œ (74) Share capital reduction ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (2,864) (2,864) 2,864 ¢â‚¬â€œ ¢â‚¬â€œ Dividend in specie to Mondi plc shareholders ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (794) 794 ¢â‚¬â€œ Issue of special converting shares ¢â‚¬â€œ 8 (8) 29 29 (29) ¢â‚¬â€œ ¢â‚¬â€œ Interim dividend ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (38) ¢â‚¬â€œ (38) Purchase of treasury shares ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (33) ¢â‚¬â€œ (33) Post-demerger retained profit ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 68 - 68 Share-based payments transfer ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (8) - (8) Currency translation adjustment ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ - (45) (45) Other movements ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 27 27 At 31 December 2007 ¢â‚¬â€œ 11 532 103 646 2,154 163 2,963 Retained profit ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 87 - 87 Prior year final dividend ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (80) - (80) Purchase of treasury shares ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (15) - (15) Share-based payments transfer ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ 1 (1) - Exit costs on legacy Anglo American plc scheme ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ (3) - (3) Currency translation adjustment ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ - (87) (87) Other movements ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ ¢â‚¬â€œ - 20 20 At 30 June 2008 - 11 532 103 646 2,144 95 2,885 Note:1 Includes the share-based payment, cumulative translation adjustment,available-for-sale, cash flow hedge, defined benefit obligation, merger andother sundry reserves.12 Capital expenditure1 Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 2007 2007 By business segment Europe & International Bags & Specialities 47 29 102 Uncoated Fine Paper 130 41 98 Corrugated 83 31 111 260 101 311 South Africa Uncoated Fine Paper 19 10 21 Corrugated 4 1 2 23 11 23
Mondi Packaging South Africa 25 14
47 Merchant and Newsprint 5 8 18
Corporate and other businesses - 5
7 313 139 406 Note:
1.Excludes the purchase of property, plant and equipment by way of businesscombination and accrued capital expenditure. The additions to property, plantand equipment during the six months ended 30 June 2008, including accruedexpenditure and purchases made by way of business combination, total ¢â€š¬317million (six months ended 30 June 2007: ¢â€š¬146 million; year ended 31 December2007: ¢â€š¬589 million). 13 Earnings before interest, tax, depreciation and amortisation (EBITDA) A reconciliation of cash inflows from operations to EBITDA is presented asfollows: Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007 Cash inflows from operations 310 356 957 Share option expense (6) (3) (6)
Fair value gains on forestry assets 24 13
32 Cost of felling (22) (26) (51) Decrease in provisions and post-employment benefits 11 10 14 Increase in inventories 11 52 69
Increase/(decrease) in operating
receivables 87 99 (25)
Decrease/(increase) in operating payables 28 (92)
(141) Other adjustments 13 12 21 EBITDA1 456 421 870 Note
1 EBITDA is operating profit before special items plus depreciation and amortisation in subsidiaries and joint ventures.
13 Earnings before interest, tax, depreciation and amortisation (EBITDA) (continued)
EBITDA by business segment is presented as follows:
Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 2007 2007 By business segment Europe & International Bags & Specialities 164 132 260 Uncoated Fine Paper 122 100 202 Corrugated 78 89 208 364 321 670 South Africa Uncoated Fine Paper 48 48 87 Corrugated 19 17 35 67 65 122
Mondi Packaging South Africa 27 21
53 Merchant and Newsprint 18 27 60 Corporate and other businesses (20) (13) (35) 456 421 870 EBITDA is stated before special items and is reconciled to "Total profit fromoperations and associates" in the Group's condensed combined and consolidatedincome statement, as follows: Year Six months Six months ended ended ended 31 30 June 30 June December ¢â€š¬ million 2008 2007 2007
Total profit from operations and associates 226 321 510
Operating special items (excluding
associates) 36 8 77
Net loss/(profit) on disposals (excluding
associates) 3 (84) (83)
Depreciation and amortisation: subsidiaries
and joint ventures 193 178 368 Share of associates' net income (2) (2) (2) EBITDA 456 421 870 14 Business combinations The Europe and International Bags & Specialities business acquired theHungarian and Ukraine bag converting operations of Dunapack for ¢â€š¬29 million on15 April 2008. ¢â€š¬14 million provisional goodwill has been recognised on thistransaction. The flexibles business of BSK Handling Ltd was acquired on 2 April2008 for ¢â€š¬6 million. ¢â€š¬5 million in provisional goodwill has been recognised onthis transaction. The purchase consideration and resultant goodwill on theGroup's other acquisitions in the six month period ended 30 June 2008 totalled¢â€š¬2 million and, provisionally, ¢â€š¬4 million respectively.
15 Write-down of inventories to net realisable value
The write-downs of inventories to net realisable value, recognised as anexpense for the six months ended 30 June 2008, total ¢â€š¬9 million (30 June 2007:¢â€š¬16 million; 31 December 2007: ¢â€š¬10 million). The reversals of previouswrite-downs, recognised as a reduction in the amount of inventories expensedfor the six months ended 30 June 2008, total ¢â€š¬1 million (30 June 2007: ¢â€š¬2million; 31 December 2007: ¢â€š¬8 million). 16 Retirement benefits
There were no significant curtailments, settlements, or other significant one-time events relating to the Group's defined benefit schemes, post-retirement medical plans or statutory retirement obligations during the half-year ended 30 June 2008.
Material schemes The Group's material defined benefit scheme and post-retirement medical planliabilities were actuarially assessed for the half-year ended 30 June 2008. Thenet change in certain actuarial and financial assumptions from those applied asat 31 December 2007 resulted in an immaterial impact on the present value ofthe liabilities. The assets backing the defined benefit scheme liabilities wereupdated to reflect their market values as at 30 June 2008. Any differencebetween the expected return on assets and the actual return on assets has beenrecognised as an actuarial experience movement within equity. Remaining Group defined benefit schemes and unfunded statutory obligations The remaining Group defined benefit schemes and unfunded statutory retirementobligations are calculated on a year-to-date basis. The calculations performedmake use of the actuarial and financial assumptions published in the Group'sannual financial statements for the year ended 31 December 2007. Althoughcertain of these assumptions require adjustment to reflect significant marketfluctuations during the half-year ended 30 June 2008, the net effect ofapplying these adjustments would have been immaterial. A full actuarialassessment of all of the Group's defined benefit schemes and unfunded statutoryretirement obligations will be carried out for the year ending 31 December
2008. 17 Capital commitments Year Six months ended Six months ended ended 30 June 30 June 31 December ¢â€š¬ million 2008 2007 2007
Contracted for but not provided 421 79
74
Approved, not yet contracted for 436 107
824
18 Related party transactions
The Group has a related party relationship with its associates and jointventures, and up to the demerger date, with certain Anglo American plc groupcompanies. Transactions between Mondi Limited, Mondi plc and their respectivesubsidiaries, which are deemed to be related parties, have been eliminated onconsolidation and are not disclosed in this note. The Group and its subsidiaries, in the ordinary course of business, enter intovarious sales, purchase and service transactions with associates and jointventures and others in which the Group has a material interest. Thesetransactions are under terms that are no less favourable than those arrangedwith third parties. These transactions, in total, are not considered to be
significant. Anglo American plc Joint ¢â€š¬ million group Ventures Associates
Half-year ended/as at 30 June
2008 Sales to related parties - 5 - Purchases from related parties - - (18) Net finance income/(costs) - - - Dividends paid to related parties - - -
Receivables due from related
parties - - - Loans to related parties - 13 -
Receivables due from related
parties - 5 -
Half-year ended/as at 30 June
2007 Sales to related parties - - 1 Purchases from related parties (6) - (68) Net finance income/(costs) 2 (2) - Dividends paid to related parties (202) - - Dividends in specie (32) - -
Receivables due from related
parties - 1 -
Cash held by related parties - 2 - Total borrowings from related
parties (4) (7) -
Year ended/as at 31 December
2007 Sales to related parties - 8 8 Purchases from related parties - (2) (1) Net finance costs (22) - - Dividends paid to related parties (202) - - Dividends in specie (32) - - Loans to related parties - 13 - Receivables due from related parties - 5 - 18 Related party transactions (continued)Mr Ramaphosa, joint chairman of Mondi, has a 39.96% stake in Shanduka Group(Pty) Limited, an entity that has controlling interests in Shanduka Advisors(Pty) Limited, Shanduka Resources (Pty) Limited, Shanduka Packaging (Pty)Limited and Shanduka Newsprint (Pty) Limited and participating interests inMondi Shanduka Newsprint (Pty) Limited, Kangra Coal (Pty) Limited, RenniesDistribution Services (Pty) Limited and Mondi Packaging South Africa (Pty)Limited. Fees of ¢â€š¬166,000 and ¢â€š¬303,000 were paid to Shanduka Advisors (Pty)Limited and Shanduka Resources (Pty) Limited respectively for managementservices provided to the Group during the six months ended 30 June 2008 (30June 2007: ¢â€š¬193,000 and ¢â€š¬345,000 respectively; 31 December 2007: ¢â€š¬379,000 and ¢â€š¬681,000 respectively). Shanduka Packaging (Pty) Limited and Shanduka Newsprint(Pty) Limited have also provided shareholder loans to the Group. The balancesoutstanding as at 30 June 2008 are ¢â€š¬14 million and ¢â€š¬7 million respectively (30June 2007: ¢â€š¬7 million and ¢â€š¬10 million respectively; 31 December 2007: ¢â€š¬17million and ¢â€š¬9 million respectively). In the normal course of business, and onan arm's length basis, during the six months ended 30 June 2008 the Grouppurchased supplies from Kangra Coal (Pty) Limited totalling ¢â€š¬6 million (30 June2007: ¢â€š¬8 million; 31 December 2007: ¢â€š¬9 million) and made use of transport andwarehousing services provided by Rennies Distribution Services (Pty) Limitedtotalling ¢â€š¬4 million (30 June 2007: ¢â€š¬6 million; 31 December 2007: ¢â€š¬13 million).
¢â€š¬1 million remains outstanding on these purchases as at 30 June 2008 (30 June 2007: ¢â€š¬1 million; 31 December 2007: ¢â€š¬1 million).
Dividends received from associates for the six months ended 30 June 2008 total¢â€š¬nil (six months ended 30 June 2007: ¢â€š¬1 million, 31 December 2007: ¢â€š¬1 million),as disclosed in the condensed combined and consolidated cash flow statement. 19 Asset values per share Asset values per share are disclosed in accordance with the JSE ListingRequirements. Net asset value per share is defined as net assets divided by thecombined number of ordinary shares in issue as at the reporting balance sheetdate, less treasury shares held as at the same date. Tangible net asset valueper share is defined as net assets less intangible assets divided by thecombined number of ordinary shares in issue as at the reporting balance sheetdate, less treasury shares held as at the same date. For the purposes of thecomparative Half-yearly balance sheet date, the total number of shares issuedon the listing date has been used to calculate the asset values per share.
As at 30 As at 30 As at 31 June June December 2008 2007 2007
Net asset value per share (¢â€š¬) 6.51 6.51
6.56
Tangible net asset value per share
(¢â€š¬) 5.47 5.77 5.54 20 Events occurring after 30 June 2008
With the exception of the proposed interim dividend for 2008, as disclosed in note 9, there have been no material reportable events since 30 June 2008.
Production statistics Year Six months Six months ended ended ended 31 30 June 30 June December 2008 2007 2007 Europe & International Containerboard tonnes 965,319 916,815 1,849,702 Kraft paper tonnes 461,754 444,625 891,385 Corrugated board and m m‚² boxes 1,143 985 2,088 Bag converting m units 1,902 1,910 3,642 Coating and release m m‚² liners 1,414 1,549 2,971 Uncoated fine paper tonnes 754,364 800,943 1,517,792 Newsprint tonnes 97,821 99,738 192,329 Total hardwood pulp tonnes 607,356 603,868 1,182,476 Total softwood pulp tonnes 970,356 875,019 1,748,294
External hardwood pulp tonnes 38,171 34,508
76,244
External softwood pulp tonnes 105,299 107,934 213,218 South Africa Containerboard tonnes 117,449 119,117 251,661 Uncoated wood free paper tonnes 229,938 238,202 469,782 bone dry Wood chips tonnes 364,247 362,089 690,447 Total hardwood pulp tonnes 264,003 326,019 630,210 Total softwood pulp tonnes 50,321 43,954 98,613
External hardwood pulp tonnes 13,214 34,719
86,802 Mondi Packaging South Africa Packaging papers tonnes 146,179 141,339 368,574 Corrugated board and m m‚² boxes 183 171 367 Total hardwood pulp tonnes 40,147 32,631 65,829 Total softwood pulp tonnes 34,090 28,967 64,274 Newsprint joint ventures Newsprint (attributable tonnes
share) 163,753 156,102 314,847
Aylesford (attributable tonnes
share) 99,639 94,354 185,990
Shanduka (attributable tonnes
share) 64,114 61,748 128,857 Total hardwood pulp tonnes Shanduka 40,816 40,715 86,469 Exchange rates Six months ended Year 30 Six months ended ended 31 30 June June December 2008 2007 2007
Closing rates against the euro
South African rand 12.34 9.53 10.03 Pounds sterling 0.79 0.67 0.73 Polish zloty 3.35 3.77 3.59 Russian rouble 36.95 34.83 35.99 Slovakian koruna 30.20 33.61 33.58 US dollar 1.58 1.35 1.47 Czech koruna 23.89 28.71 26.63 Average rates for the period against the euro South African rand 11.73 9.52 9.66 Pounds sterling 0.78 0.67 0.68 Polish zloty 3.49 3.84 3.78 Russian rouble 36.61 34.67 35.02 Slovakian koruna 32.24 34.05 33.77 US dollar 1.53 1.33 1.37 Czech koruna 25.21 28.16 27.76 Glossary of financial terms
EBITDA Operating profit of subsidiaries and joint ventures before
special items, depreciation and amortisation.
EBITDA EBITDA divided by net debt finance charges (before special interest financing items).
cover
Gearing The ratio of net debt to total capital employed. Group revenue Total turnover of subsidiaries and proportionate share of joint venture turnover. Headline JSE listing measure, calculated in accordance with Circular 8/ earnings 2007, 'Headline Earnings', as issued by the South African Institute of Chartered Accountants. Net debt A non-GAAP measure, comprising short and medium-term borrowings and bank overdrafts less cash and cash equivalents and current financial asset investments. Net segment Net segment assets are segment assets, consisting of property, assets plant and equipment, intangibles, forestry assets, retirement benefit surplus, inventories and operating receivables less segment liabilities consisting of non-interest-bearing current liabilities, restoration and decommissioning provisions and provisions for post-retirement benefits. Operating Underlying operating profit divided by Group revenue. margin Return on This is trailing twelve month underlying operating profit, capital including share of associates' net earnings, divided by average employed trading capital employed and for segments has been extracted from(ROCE) management reports. Capital employed is adjusted for the spend on the two strategic projects in Poland and Russia which are not yet in production. Shareholders' Share capital, share premium, retained profits and other reservesfunds attributable to equity holders.
Special items Those non-recurring financial items which the Group believes
should be separately disclosed on the face of the combined and consolidated income statement to assist in understanding the underlying financial performance achieved by the Group and its businesses.
Total equity Shareholders' funds and minority interests in equity.
Trading Net segment assets plus investment in associates, deferred tax, capital and other non-operating assets and liabilities excluding employed financial investments. Underlying Net profit after tax before special items attributable to equity earnings holders of the Group. Underlying Operating profit of subsidiaries and joint ventures before operating special items. profit
vendorRelated Shares:
Mondi