Half-yearly Report

10th Aug 2010 07:00

10 August 2010 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 results for the six months ended 30 June 2010

Financial summary Six months ended 30 Six months ended 30 Half-yearly€ million June 2010 June 2009 change % Group revenue 3,033 2,614 16 EBITDA1 405 308 31 Underlying operating profit2 222 138 61 Underlying profit before tax3 176 81 117 Profit/(loss) before tax6 177 (1) n/m7 Basic earnings/(loss) per share (€ cents)4 21.5 (7.1) n/m7 Underlying earnings per share (€ cents)4 20.3 8.3 145 Headline earnings/(loss) per share (€ cents)4 24.8 (0.8) n/m7

Interim dividend per share (€

cents) 3.5 2.5 40

Cash generated from operations 269 392

(31) Net debt 1,632 1,661 (2) Group Return on Capital Employed (ROCE)5 9.5% 7.4% 28 Notes:

1 EBITDA is operating profit of subsidiaries and joint ventures before special items, depreciation and amortisation.

2 Underlying operating profit is operating profit of subsidiaries and joint ventures before special items.

3 Underlying profit before tax is reported profit before tax before special items.

4 The Group has presented underlying earnings per share to exclude the impactof special items, and headline earnings per share in accordance with circular 3/2009 'Headline Earnings' as issued by the South African Institute of CharteredAccountants.5 Group return on capital employed (ROCE) is an annualised measure based ona 12 month trailing underlying operating profit plus share of associates netearnings divided by average trading capital employed before impairments andadjusted for major capital projects not yet commissioned.

6 Profit/(loss) before tax is reported after special items of €1 million.

7 n/m - not measureable.

Highlights

Underlying operating profit up 61%, driven by a strong performance from the Europe & International Division

Sustained improvement in order inflows, volumes and prices across all key paper grades

Improving performance in South Africa Division

Restructuring of European Corrugated business completed

Major capital project in Russia on schedule for completion in second half

Successful issuance of inaugural €500 million Eurobond, used to pay down existing debt

Interim dividend up 40% at 3.5 euro cents per share

David Hathorn, Mondi Group chief executive, said:

"Mondi achieved a pleasing result in the period against a backdrop of improving market conditions, supported by a particularly strong performance from the European Uncoated Fine Paper business. The outcome bears testament to our robust business model, which encompasses leading market positions in higher growth emerging markets, low-cost operations and a relentless focus on performance.

Despite cost pressures, the positive pricing momentum witnessed in Europe sincethe beginning of the fourth quarter of 2009 in most of the Group's key gradesshould see the business continue to deliver a strong performance in the secondhalf. The South Africa Division should benefit from the further managementactions taken to improve profitability, although much depends on the outlookfor the rand and export pulp prices. While the sustainability of the economicrecovery remains uncertain, we believe the Group is well positioned to continuebenefiting from the current positive trading environment." Contact detailsMondi Group David Hathorn +27 (0)11 994 5418 Andrew King +27 (0)11 994 5415 Lora Rossler +27 (0)31 451 2040 / +27 (0)83 627 0292 Financial Dynamics Richard Mountain +44 20 7269 7186 / +44 20 7909 684 466 Chloe Webb +27 (0)11 214 2421

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 200 648 (toll-free)UK 0800 917 8183 (toll-free)Europe & Other 0800 246 78 700 (toll-free)

An online audio cast facility will be available via: www.mondigroup.com/ HYResults10.

Password: HYResults10. The presentation will be available online via the above website address beforethe audio cast commences. Questions can be submitted via the dial-in conferencecall or by e-mail via the audio cast.

Should you have any issues on the day with accessing the dial-in conference call, please call +27 (0)11 535 3600.

Should you have any issues on the day with accessing the audio cast, please e-mail [email protected] and you will be contacted immediately.

An audio recording of the presentation will be available on Mondi's website during the afternoon of 10 August 2010.

Editors' notes

Mondi is an international paper and packaging company, with production operations across 31 countries and revenues of €5.3 billion in 2009. The Group's key operations are located in central Europe, Russia and South Africa and employed 31,000 people on average in 2009.

Mondi is fully integrated across the paper and packaging process, from the growing of wood and the manufacture of pulp and paper (including recycled paper), to the conversion of packaging papers into corrugated packaging and industrial bags.

The Group is principally involved in the manufacture of uncoated fine paper (UFP), packaging paper and converted packaging products, as well as speciality products.

Mondi has a dual listed company structure, with a primary listing on the JSELimited for Mondi Limited under the ticker code MND and a premium listing onthe London stock exchange for Mondi plc, under the ticker code MNDI. The Grouphas been recognised for its sustainability performance through its inclusion inthe FTSE4Good UK, Europe and Global indices in 2008 and 2009 and the JSE'sSocially Responsible Investment (SRI) Index in 2007, 2008 and 2009.

Forward-looking statements

This document includes forward-looking statements. All statements other thanstatements of historical facts included herein, including, without limitation,those regarding Mondi's financial position, business strategy, plans andobjectives of management for future operations, are forward-looking statements.Such forward-looking statements involve known and unknown risks, uncertaintiesand other factors which may cause the actual results, performance orachievements of Mondi, or industry results, to be materially different from anyfuture results, performance or achievements expressed or implied by suchforward-looking statements. Such forward-looking statements are based onnumerous assumptions regarding Mondi's present and future business strategiesand the environment in which Mondi will operate in the future. Among theimportant factors that could cause Mondi's actual results, performance orachievements to differ materially from those in the forward-looking statementsinclude, but are not limited to, those discussed under Principal risks anduncertainties, below. These forward-looking statements speak only as of thedate on which they are made. Mondi expressly disclaims any obligation orundertaking to release publicly any updates or revisions to any forward-lookingstatement contained herein to reflect any change in Mondi's expectations withregard thereto or any change in events, conditions or circumstances on whichany such statement is based. Group performance review

The Group's underlying operating profit of €222 million was 61% up on the comparable prior year period and 42% up on the result of the second half of the prior year.

Order inflows and sales volumes continue to improve and price increases wereachieved across all key paper grades. Furthermore, the benefits of thesignificant restructuring actions and cost reduction initiatives implementedthrough the economic downturn supported the strong recovery in profitability.Ongoing profit improvement initiatives have yielded a further €75 millionduring the first half which, at 2.9% of our cost base, continue to exceedtargets. Rising commodity input costs partially offset revenue gains. Currency movements had a mixed impact on the Group's results. The stronger randeroded export margins in South Africa whilst exports from Europe benefited fromthe weaker euro against the dollar. Other emerging European currenciesstrengthened against the euro in the first quarter of the year placing pressureon the export focussed operations in Poland and the Czech Republic, althoughthis trend reversed in the second quarter.

Underlying earnings per share was 20.3 cents, an increase of 145% on the comparable prior year period. An interim dividend of 3.5 euro cents, up 40% on the prior year interim dividend, will be paid.

During the first quarter, Mondi concluded the sale of the 170,000 tonneFrohnleiten recycled containerboard mill in Austria. During May, the Group'swestern European corrugated packaging and recycled containerboard restructuringprogramme concluded with the sale of its corrugated box plants in the UK toSmurfit Kappa. The Group also acquired Smurfit Kappa's industrial and consumerbag operations in Spain, France and Italy. These operations will berestructured and some of the plants may be rationalised with our existingplants.

The sale of the Europapier paper merchant business to the Heinzel Group announced in early May 2010 remains subject to approval by the relevant competition authorities.

Net debt at 30 June 2010 increased from 31 December 2009 by €115 million to €1.63 billion. Robust EBITDA generation was offset primarily by an increase inworking capital (in line with growth in revenue), ongoing funding for the €545million Russian expansion project and foreign exchange movements. In March2010, the Group issued a seven year Eurobond of €500 million at a coupon of5.75%, the proceeds of which were used to settle existing short and medium termdebt and consequently increased the average maturity of the Group's debt.

The Group's financial position remains robust with net assets increasing to € 3.1 billion on the back of higher working capital and exchange impacts on translation into euro. The Group retains adequate borrowing facilities.

Europe & International Division

Six months ended 30 Six months ended 30 Half-yearly€ million June 2010 June 2009 change % Segment revenue 2,372 2,063 15 - of which inter-segment revenue 61 53 15 EBITDA 336 238 41 Underlying operating profit 201 108 86 Uncoated Fine Paper 98 71 38 Corrugated 48 1 n/m Bags & Coatings 55 36 53 Capital expenditure 159 272 (42) Net segment assets 3,822 3,620 6 ROCE (%) 12.2% 7.3% 67

Underlying operating profit of €201 million was 86% higher than that of the comparable prior year period with ROCE, on a twelve month trailing basis, increasing to 12.2%. The improved result was due to good demand across all businesses, higher prices in all paper grades and the benefit of previously implemented profit improvement initiatives.

Profit improvement initiatives have yielded €59 million to date partially offsetting increased input costs, particularly wood, pulp and recovered paper.

The extended shut at the Syktyvkar plant in Russia as part of the final integration of the expansion project, together with the planned maintenance shuts at a number of the pulp and paper mills in the traditionally slower European summer months, will impact results in the second half of the year.

Uncoated Fine Paper

The operating profit of €98 million was 38% up on the comparable prior yearperiod, giving a very strong ROCE, on a twelve month trailing basis, of 17.5%.This excellent performance, following a strong second half in the previousyear, reflects a continued positive trading environment with both prices andvolumes increasing. This was supported by a pleasing operating performance withall mills achieving record production volumes. The Russian operation,Syktyvkar, performed particularly well, supported by a positive contributionfrom the recently rebuilt uncoated fine paper machine. Selling prices have increased with benchmark cut-size office paper pricesincreasing by around 5% from 31 December 2009 levels. Further price increaseshave been announced in the second half, supported by continued input costpressures particularly for the non-integrated producers, and the weakness ofthe euro relative to the dollar. With average pulp prices increasing during the period, by 24% for softwood and32% for hardwood in US dollar terms when compared to the second half of theprevious year, the larger mills benefited from their backward integration. Thenon-integrated mills, despite achieving price increases, could not entirelyoffset the higher pulp prices. The major capital project in Syktyvkar, Russia is expected to be completed andintegrated into the existing mill during an extended shut in the second half.The impact of the shut on the second half operating profit contribution fromSyktyvkar is estimated at around €20 million.

Corrugated

The Corrugated business achieved a significant improvement in underlying operating profit to €48 million, benefiting from the new recycled containerboard machine at šwiecie, restructuring and cost reduction initiatives, and improved product prices and volumes. Average increases of around 23% compared to the second half of the prior year were seen for benchmark recycled containerboard prices, supported by significant input cost pressures (recovered paper prices increased by 52% in the period).

Although sales volumes increased, price increases achieved in the corrugated box plants were not sufficient to recover the increased paper input costs. Further box price increases are anticipated in the second half of the year.

The restructuring of the Corrugated business was concluded during the firsthalf with the sale of the UK box plants to Smurfit Kappa in May 2010 and therecycled containerboard mill in Austria to the Prinzhorn Group. The business isnow well positioned to focus on its core central and south eastern Europeanmarkets, with leading market positions in the high growth markets of Poland andTurkey. The containerboard mills in Poland, Germany and Turkey provide theGroup with a competitive paper asset base serving the Group's integratedconverting network in these regions. Having started up in September 2009, the 470,000 tonne recycled containerboardmachine in šwiecie, Poland is performing ahead of plan, with production of197,000 tonnes in the first half, and full year production from this machineexpected to be around 400,000 to 410,000 tonnes including the impact of amaintenance shut in the second half.

Bags & Coatings

The Bags & Coatings business achieved an underlying operating profit of €55million, an increase of 53% on the comparable prior year period. This reflectsboth improved sales volumes and increased kraft paper prices. Significant kraft paper selling price increases of around 10% on averagecompared to the second half of the prior year were achieved in the period, morethan offsetting the sharp rise in input costs, particularly wood costs. Furtherselling price increases have been announced and are expected to be implementedduring the third quarter. While demand in the Group's core European markets hasrecovered from a low base, supported by some restocking, very strong demandgrowth is being seen in export markets. In response, the 80,000 tonneStambolijski kraft paper machine was restarted in June 2010, having beenmothballed during the previous year. Volumes remain strong in the bag converting segment, up 12% on the comparableperiod in the prior year. However, more than half of the sales volume is soldunder annual fixed price contracts, leading to short-term margin pressures inthis segment as paper input costs increase. The acquisition of the SmurfitKappa bag plants provides the Group with stronger market positions in Spain,France and Italy. Although these newly acquired plants are currently operatingat a loss, restructuring and potential rationalisation with our existing plantsis planned for the coming months and they are expected to contribute positivelyto the Group's performance from 2011. Robust volume increases in Coatings, Consumer Bags & Films have resulted in asignificant increase in underlying operating profit, although Consumer Bags &Films remains under some pressure from rising polymer prices. South Africa Division Six months ended 30 Six months ended 30 Half-yearly€ million June 2010 June 2009 change % Segment revenue 276 249 11 - of which inter-segment revenue 107 113 (5) EBITDA 44 48 (8) Underlying operating profit 18 28 (36) Uncoated Fine Paper 14 13 8 Containerboard 4 15 (73) Capital expenditure 9 13 (31) Net segment assets 932 868 7 ROCE (%) 3.1% 13.5% (77) A decrease of 36% in underlying operating profit on the comparable prior yearperiod reflects somewhat disappointing results partially due to the strength ofthe rand and consequently lower export margins. ROCE, on a twelve monthtrailing basis, at 3.1%, remains well below targeted levels. The results arehowever significantly better than the weak second half of 2009. Sales prices improved across all products with pulp being the main contributorduring the period. Increasing labour and input, particularly electricity, costswill impact results in the second half. The decision has been taken to exit the uncoated fine paper export market dueto poor profitability and to focus on the domestic and African markets. Themothballing of the 120,000 tonne uncoated fine paper machine and relatedequipment in Merebank, along with a restructuring programme, is expected to beconcluded during the second half of the year.

This restructuring and the associated increased sales of pulp are expected to result in an improved second half performance, notwithstanding an apparent weakening in global pulp markets.

Mondi Packaging South Africa (MPSA)

Six months ended 30 Six months ended 30 Half-yearly€ million June 2010 June 2009 change % Segment revenue 298 227 31 - of which inter-segment revenue 16 13 23 EBITDA 33 23 43 Underlying operating profit 18 11 64 Capital expenditure 14 6 133 Net segment assets 368 342 8 ROCE (%) 12.9% 7.3% 77 MPSA achieved a 64% increase in operating profit to €18 million off the lowbase of the comparable prior year period giving a ROCE, on a twelve monthtrailing basis, of 12.9%. The improvement reflects an approximately 10%increase in sales volumes and the benefits of significant cost savings. Theeuro result was also enhanced by translation at a stronger rand exchange rate.In local currency terms, the increase in underlying operating profit was 37%.With its exposure to the agricultural sector, coupled with price increasesexpected to take effect during the second half, the second half of the year isexpected to be stronger than the first. Newsprint Six months ended 30 Six months ended 30 Half-yearly€ million June 2010 June 2009 change % Segment revenue 271 254 7 - of which inter-segment revenue - - - EBITDA 8 16 (50) Underlying operating profit 1 8 (88) Capital expenditure 2 2 - Net segment assets1 108 218 (50) ROCE (%) 2.2% 2.9% (24) Note:

1 Excluding assets of Europapier business, classified as held for sale.

The Newsprint business reflected a significant decline in underlying operatingprofit to €1 million mainly due to a disappointing performance at AylesfordNewsprint. Aylesford Newsprint experienced reduced sales volumes and prices andan operating loss resulted. Sales price increases of around £20/tonne are beingimplemented during the second half of the year, although this is not likely tolead to a significant improvement in profitability due to ongoing input costpressures. Mondi Shanduka Newsprint's underlying operating profit wasmarginally lower than the comparable prior year period mainly resulting fromincreasing raw material costs. The European merchant business, Europapier,performed well, benefiting from increased selling prices and volumes. The saleof Europapier is expected to be concluded in the second half of the year,pending competition clearance.

Input costs and currency exposure

All fibre input costs have seen significant increases in the first half of the year.

Procured pulp wood prices in central Europe are up significantly versus the comparable prior year period on the back of increased demand from bio-mass energy producers and reduced supply due to the closure of sawmilling operations in the region.

Average pulp prices, exacerbated by supply disruptions due to the Chilean earthquake, have increased by 24% for softwood and 32% for hardwood during the period when compared to the second half of the prior year.

Strong Chinese demand in the first quarter drove rapid price escalations in European recovered paper markets. The average benchmark price of recovered paper increased by 52%, when compared to the second half of the previous year.

Mondi benefits from its structural position in South Africa and Russia due tointegration into wood supply. The Group's integrated pulp and paper millsreduce the impact of pulp price escalations, with the Group, on an annualisedbasis, being net short of around 135,000 tonnes of pulp following the recentrestructuring announcements. Restructuring initiatives and a relentless focuson cost reduction and productivity improvement further mitigate the impact

ofinput cost pressures. Financial reviewSpecial items

The special items, as more fully set out in the notes to the half-yearly financial statements, include:

closure of the paper machine and related restructuring provisions in South Africa;

reversal of previously recognised closure provisions no longer required following the sale of the Szolnok site;

reversal of impairment and related closure provisions of the Stambolijski mill following its start-up in June 2010;

partial impairment of underperforming kraft paper assets in Lohja and Ruzomberok;

gain on acquisition of the industrial bags plants in western Europe which will be subject to future restructuring;

loss on disposal of the corrugated packaging plants in the UK;

profit on sale of forestry assets in South Africa; and

write-down of assets and recognition of expected loss on disposal of the Europapier business.

Finance costsNet finance costs of €48 million were lower than those of the comparable prioryear period mainly due to exchange rate gains on foreign currency debt and areduction in interest rates in some locations. The higher interest rate of theEurobond when compared to existing short-term facilities, as well as areduction in interest capitalised to major projects, will increase financecosts in the second half of the year.

Tax

A reduction in the underlying effective tax rate from 32% to 26% is realised primarily due to the improved profitability enabling the use of previously unrecognised tax losses carried forward; increased profitability in regions with lower tax rates; and benefits of tax incentives granted in certain countries in which the Group operates, notably those related to the major Polish and Russian capital projects.

Cash flow

As expected, cash flow generated from operating activities was negativelyimpacted by an increase in working capital attributable to the significantlyincreased revenue. Working capital, as a percentage of annualised revenue,moved up from 10.0% at 31 December 2009 to 10.7% at 30 June 2010. Despite this,cash generated from operating activities amounted to €235 million. Capital expenditure of €184 million, including €75 million on our major projectin Russia, was incurred. Outside of our major projects in Russia and Poland,capital expenditure remains at 51% of depreciation reflecting a continuedconservative approach to investment.

Treasury and borrowings

Net debt at 30 June 2010 was €1.6 billion, an increase of €115 million from theprior year end. Excluding the impact of exchange rate movements, net debt waslargely unchanged from the year end position, despite the ongoing major capitalexpenditure project in Russia and the investment in working capital. The net debt to trailing 12 month EBITDA ratio was 2.2 times and the headroomin the Group's syndicated €1.55 billion facility increased to €1.2 billion.During March, Mondi successfully launched a €500 million, seven year Eurobond,further strengthening the Group's already robust financial position asevidenced by the long-term corporate credit ratings received of Baa3 fromMoody's Investor Service and BB+ from Standard & Poor's, both with a stableoutlook. Following the launch of the Eurobond, a large proportion of theGroup's debt, 78%, is at fixed rates of interest for varying terms. Interest rates have remained largely unchanged in the period under review.

The average maturity of committed debt facilities is 3.1 years (compared to 2.2 years at the end of the previous year) and drawn committed debt facilities maturing over the next 12 months amount to €83 million.

Dividend

A dividend of 3.5 euro cents per share has been declared by the directors andwill be paid on 14 September 2010 to those shareholders on the register ofMondi plc on 27 August 2010. An equivalent South African rand interim dividendwill be paid on 14 September 2010 to shareholders on the register of Mondi

Limited on 27 August 2010. OutlookDespite cost pressures, the positive pricing momentum witnessed in Europe sincethe beginning of the fourth quarter of 2009 in most of the Group's key gradesshould see the business continue to deliver a strong performance in the secondhalf. The South Africa Division should benefit from the further managementactions taken to improve profitability, although much depends on the outlookfor the rand and export pulp prices. While the sustainability of the economicrecovery remains uncertain, we believe the Group is well positioned to continuebenefiting from the current positive trading environment. Supplementary informationGoing concern

An improvement in trading conditions is evident although some risks remain inspecific locations and business segments. This is mitigated by Mondi'sgeographical spread, product diversity and large customer base. Through ongoinginitiatives of cost management, prudent capital investment, stringent workingcapital targets and restructuring and rationalisation of assets whereappropriate, Mondi has a leading cost position in its chosen markets. The Group maintains adequate undrawn borrowing facilities (€1.4 billion at 30June 2010) and the average maturity of its debt is approximately three years,thus providing sufficient short and medium term liquidity.

The Group's forecasts, taking into account reasonably possible changes in trading performance, show that Mondi will be able to operate well within the levels of its current facilities and related covenants.

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis continues to be adopted in preparing financial reports.

Principal risks and uncertainties

It is in the nature of its business that Mondi is exposed to risks anduncertainties that may have an impact on future performance and financialresults, as well as on its 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 key risks identified remainconsistent with those presented on pages 31 and 32 of the 2009 annual report.

Mondi operates in a highly competitive environment

The paper and packaging markets are highly competitive. Mondi is flexible andresponsive to changing market and operating conditions and the geographical andproduct diversification provides some measure of protection. Uncertain tradingconditions may impact the carrying value of goodwill and tangible assets andmay necessitate further restructuring.

Input costs are subject to significant fluctuations

Significant fluctuations in raw material costs, particularly wood, pulp and recovered paper, have been experienced during the first half of the year. The Group's relatively high level of integration and access to its own fibre in Russia and South Africa, coupled with the focus on operational performance, serve to mitigate these risks.

Significant capital investments including acquisitions carry project risk

The capital investment programme in Russia is largely completed and indicationsare that the project will be completed during the second half of 2010. Theacquisition of the industrial bag operations in Spain, France and Italy willrequire some restructuring in order to generate the required returns.

Directors' responsibility statement

The directors confirm that to the best of their knowledge:

the condensed set of combined and consolidated financial statements has beenprepared in accordance with International Financial Reporting Standards and inparticular with International Accounting Standard 34, 'Interim FinancialReporting';the half-yearly report includes a fair review of the important events duringthe six months ended 30 June 2010 and a description of the principal risks anduncertainties for the remaining six months of the year ending 31 December 2010;andthere have been no significant individual related party transactions during thefirst six months of the financial year and nor have there been any significantchanges in the Group's related party relationships from those reported in theGroup's annual financial statements for the year ended 31 December 2009. David Hathorn Andrew KingDirector Director 9 August 2010

Independent review report to the members of Mondi Limited

Introduction

We have reviewed the Group's condensed combined and consolidated financialstatements for the six months ended 30 June 2010 which comprise the condensedcombined and consolidated income statement, the condensed combined andconsolidated statement of comprehensive income, the condensed combined andconsolidated statement of financial position, the condensed combined andconsolidated statement of cash flows and the condensed combined andconsolidated statement of changes in equity, the summary of significantaccounting policies and other explanatory notes. Management is responsible forthe preparation and presentation of these condensed combined and consolidatedfinancial statements in accordance with International Accounting Standards onInterim Financial Reporting (IAS 34) and the Companies Act of South Africa. Ourresponsibility is to express a conclusion on these Group condensed combined andconsolidated financial statements based on our review. Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'.

A review consists of making enquiries, 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 and consequently does notenable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. Conclusion Based on our review, nothing has come to our attention that causes us tobelieve that the Group's interim condensed combined and consolidated financialstatements is not prepared, in all material respects, in accordance withInternational Accounting Standards on Interim Financial Reporting (IAS 34) andthe Companies Act of South Africa. Bronwyn KilpatrickPartnerSandton9 August 2010 Deloitte & ToucheRegistered Auditors

Buildings 1 and 2, Deloitte Place, The Woodlands

Woodlands Drive, Woodmead, Sandton

Republic of South Africa

National Executive G G Gelink Chief Executive A E Swiegers Chief Operating Officer G M Pinnock Audit DL Kennedy Tax, Legal and Risk Advisory L Geeringh Consulting L Bam Corporate Finance CR Beukman Finance T J Brown Clients & Markets N T Mtoba Chairman of the Board

A full list of partners and directors is available on request.

Independent review report to the members of Mondi plc

We have been engaged by the Company to review the condensed combined andconsolidated financial statements in the half-yearly financial report for thesix months ended 30 June 2010 which comprises the condensed combined andconsolidated income statement, the condensed combined and consolidatedstatement of comprehensive income, the condensed combined and consolidatedstatement of financial position, the condensed combined and consolidatedstatement of cash flows, the condensed combined and consolidated statement ofchanges in equity and related notes 1 to 19. We have read the other informationcontained in the half-yearly report and considered whether it contains anyapparent misstatements or material inconsistencies with the information in thecondensed financial statements. This report is made solely to the Company in accordance with InternationalStandard on Review Engagements (UK and Ireland) 2410, 'Review of InterimFinancial Information Performed by the Independent Auditor of the Entity',issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone otherthan the Company, for our review work, for this report, or for the conclusionswe have formed.

Respective responsibilities of directors and auditors

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Group areprepared in accordance with International Financial Reporting Standards asadopted by the European Union. The condensed set of financial statementsincluded in this half-yearly financial report has been prepared in accordancewith International Accounting Standard 34, 'Interim Financial Reporting', asadopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.

Scope of the review of the condensed financial statements

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-yearlyfinancial report for the six months ended 30 June 2010 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. Deloitte LLP

Chartered Accountants and Statutory Auditors

London, United Kingdom 9 August 2010

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 no controlprocedures can provide absolute assurance in this area.

Condensed combined and consolidated income statement for the six months ended 30 June 2010

(Reviewed) (Reviewed) (Audited) Six months ended 30 June Six months ended 30 June Year ended 31 December 2010 2009 2009 Before Special After Before Special After

Before Special After

special items special special items special special items special€ million Notes items (note 6) items items (note 6) items items (note 6) items Group revenue 4 3,033 - 3,033 2,614 - 2,614 5,257 - 5,257 Materials, energy and consumables used (1,624) - (1,624) (1,387) - (1,387) (2,768) - (2,768) Variable selling expenses (277) - (277) (225) - (225) (472) - (472) Gross margin 1,132 - 1,132 1,002 - 1,002 2,017 - 2,017 Maintenance and other indirect expenses (132) - (132) (111) - (111) (241) - (241) Personnel costs (458) (2) (460) (430) (11) (441) (838) (24) (862) Other net operating expenses (137) 56 (81) (153) (32) (185) (293) (14) (307) Depreciation, amortisation and impairments (183) (18) (201) (170) (36) (206) (351) (90) (441) Operating profit/(loss) 4/5 222 36 258 138 (79) 59 294 (128) 166 Net (loss)/ profit on disposals 6 - (22) (22) - 5 5 - 3 3 Impairment of assets held for sale 6 - (13) (13) - (8) (8) - (8) (8) Net income from associates 2 - 2 1 - 1 2 - 2 Total profit/ (loss) from operations and associates 224 1 225 139 (82) 57 296 (133) 163 Investment income 16 - 16 15 - 15 27 - 27 Foreign currency gains/ (losses) 11 - 11 (2) - (2) (1) - (1) Interest expense 7 (75) - (75) (71) - (71) (140) - (140) Net finance costs (48) - (48) (58) - (58) (114) - (114) Profit/(loss) before tax 176 1 177 81 (82) (1) 182 (133) 49 Tax (charge)/ credit 8 (46) 4 (42) (27) 4 (23) (58) 6 (52) Profit/(loss) from continuing operations 130 5 135 54 (78) (24) 124 (127) (3) Attributable to: Non-controlling interests 27 (1) 26 12 - 12 29 1 30 Equity holders of the parent companies 103 6 109 42 (78) (36) 95 (128) (33) Earnings per share (EPS) for profit /(loss) attributable to equity holders of the parent companies Basic EPS(€ cents) 9 21.5 (7.1) (6.5) Diluted EPS(€ cents)9 21.2 (7.1) (6.5)

Basic underlying EPS(€ cents)9 20.3 8.3 18.7 Diluted underlying EPS(€ cents)9 20.0 8.1

18.2

Basic headline EPS (€ cents)9 24.8 (0.8) 11.4 Diluted headline EPS(€ cents)9 24.5 (0.8)

11.1

Condensed combined and consolidated statement of comprehensive income for the six months ended 30 June 2010

(Reviewed) (Reviewed) (Audited) Six months Six months ended 30 June ended 30 June Year ended 31€ million 2010 2009 December 2009

Profit /(loss) for the financial period/

year 135 (24) (3) Other comprehensive income:

Fair value gains on cash flow hedges 6 14

26

Actuarial (losses)/ gains and surplus restriction on post-retirement benefit

schemes (9) 1 7

Fair value gains on available-for-sale

investments - - 1

Exchange gains on translation of foreign

operations 171 72 118

Share of other comprehensive income of

associates - 1 1

Tax relating to components of other

comprehensive income 2 (1) (7)

Other comprehensive income for the financial period/year, net of tax 170 87

146

Total comprehensive income for the

financial period/year 305 63 143 Attributable to:

Non-controlling interests 36 14

39

Equity holders of the parent companies 269 49

104 Condensed combined and consolidated statement of financial positionas at 30 June 2010 (Reviewed) (Reviewed) (Audited) As at 30 As at 30 As at 31 € million Notes June 2010 June 2009 December 2009 Intangible assets 314 321 308 Property, plant and equipment 3,990 3,769 3,847 Forestry assets 290 268 251 Investments in associates 6 8 6 Financial asset investments 33 24 27 Deferred tax assets 31 43 29 Retirement benefits surplus 11 13 - 8 Total non-current assets 4,677 4,433 4,476 Inventories 688 611 617 Trade and other receivables 1,083 1,075 933 Current tax assets 19 23 16 Cash and cash equivalents 15b-c 77 171 123

Derivative financial instruments 13 15

7 Total current assets 1,880 1,895 1,696 Assets held for sale 14 172 22 36 Total assets 6,729 6,350 6,208 Short-term borrowings 15c (217) (435) (219) Trade and other payables (1,123) (1,013) (1,023) Current tax liabilities (75) (46) (55) Provisions (50) (47) (40)

Derivative financial instruments (4) (40)

(32) Total current liabilities (1,469) (1,581) (1,369)

Medium and long-term borrowings 15c (1,492) (1,397)

(1,421)

Retirement benefits obligation 11 (202) (184)

(184) Deferred tax liabilities (334) (329) (316) Provisions (35) (48) (45)

Other non-current liabilities (21) (14)

(21)

Derivative financial instruments (23) (47)

(19) Total non-current liabilities (2,107) (2,019) (2,006)

Liabilities directly associated with assets classified as held for sale 14 (60) (3)

(9) Total liabilities (3,636) (3,603) (3,384) Net assets 3,093 2,747 2,824 Equity Ordinary share capital 114 114 114 Share premium 532 532 532

Retained earnings and other reserves 2,006 1,707

1,753

Total attributable to equity holders of

the parent companies 2,652 2,353 2,399

Non-controlling interests in equity 441 394

425 Total equity 3,093 2,747 2,824

The Group's condensed combined and consolidated financial statements, and related notes 1 to 19, were approved by the Boards and authorised for issue on 9 August 2010 and were signed on its behalf by:

David Hathorn Andrew KingDirector Director Mondi Limited company registration number: 1967/013038/06 Mondi plc company registration number: 6209386

Condensed combined and consolidated statement of cash flows for the six months ended 30 June 2010

(Reviewed) (Reviewed) (Audited) Six months Six months ended 30 June ended 30 June Year ended 31€ million Notes 2010 2009 December 2009

Cash generated from operations 15a 269 392

867 Dividends from associates 2 - 2 Income tax paid (36) (18) (32)

Net cash generated from operating

activities 235 374 837 Cash flows from investing activities

Acquisition of subsidiaries, net of

cash and cash equivalents 13 11 (2) (2)

Non-controlling interests bought

out (4) - - Proceeds from disposal of

subsidiaries, net of cash and cash

equivalents 64 47 54 Proceeds from disposal of associates - - 3

Investment in property, plant and

equipment (184) (293) (517)

Proceeds from the disposal of property, plant and equipment 6 7

11

Investment in forestry assets (21) (20)

(40)

Investment in intangible assets (1) (2)

(5) Investment in financial asset investments (1) - (7)

Proceeds from the sale of financial

asset investments 2 - -

Loan (advances to)/repayments from

related parties (4) (1) 1

Loan repayments from external

parties - - 1 Interest received 4 4 8 Other investing activities - - 1 Net cash used in investing activities (128) (260) (492) Cash flows from financing activities

Repayment of short-term borrowings 15c (95) (81)

(288)

Proceeds from medium and long-term

borrowings 15c 527 16 138

Repayment of medium and long-term

borrowings 15c (452) (22) (100) Interest paid (60) (93) (163)

Dividends paid to non-controlling

interests 10 (17) - (9)

Dividends paid to equity holders of

the parent companies 10 (36) (26) (39) Purchases of treasury shares (1) (1) (1)

Contribution by non-controlling

interests - 10 27

Net realised (loss)/gain on cash

and asset management swaps (61) 84 67 Other financing activities - (1) 4 Net cash used in financing activities (195) (114) (364) Net decrease in cash and cash equivalents (88) - (19) Cash and cash equivalents at

beginning of financial period/year1 15c 37 75

75

Cash movement in the financial

period/year 15c (88) - (19) Reclassification 15c (1) - (19)

Effects of changes in foreign

exchange rates 15c (6) 4 -

Cash and cash equivalents at end of

financial period/year1 (58) 79 37 Note:

1 'Cash and cash equivalents' includes overdrafts and cash flows from disposal groups and is reconciled to the statement of financial position in note 15c.

Condensed combined and consolidated statement of changes in equity for the six months ended 30 June 2010

Share capital Combined Total share attributable Mondi Mondi Mondi capital to equity Limited Limited plc and holders of share share share share Retained Other the parent Non-controlling Total € million capital premium capital premium earnings reserves1 companies interests equity At 1 January 2009 11 532 103 646 1,809 (132) 2,323 373 2,696 Dividends paid - - - - (26) - (26) - (26) Total comprehensive income for the financial period - - - - (36) 85 49 14 63 Issue of shares under employee share schemes - - - - 2 (2) - - - Purchases of treasury shares2 - - - - (1) - (1) - (1) Reclassification - - - - (14) 14 - - - Non-controlling interests buy in - - - - - - - 10 10 Non-controlling interests bought out - - - - - - - (3) (3) Other - - - - - 8 8 - 8 At 30 June 2009 11 532 103 646 1,734 (27) 2,353 394 2,747 Dividends paid - - - - (13) - (13) (9) (22) Total comprehensive income for the financial period - - - - 3 52 55 25 80 Issue of shares under employee share schemes - - - - 17 (17) - - - Reclassification - - - - 2 1 3 (3) - Non-controlling interests buy in - - - - - - - 17 17 Other - - - - - 1 1 1 2 At 31 December 2009 11 532 103 646 1,743 10 2,399 425 2,824 Dividends paid - - - - (36) - (36) (17) (53) Total comprehensive income for the financial period - - - - 109 160 269 36 305 Issue of shares under employee share schemes - - - - 5 (5) - - - Purchases of treasury shares2 - - - - (1) - (1) - (1) Disposal of businesses - - - - - 19 19 - 19 Non-controlling interests bought out - - - - (1) - (1) (3) (4) Other - - - - - 3 3 - 3 At 30 June 2010 11 532 103 646 1,819 187 2,652 441 3,093 Notes:

1 Other reserves include the share-based payment, cumulative translation adjustment, available-for-sale, cash flow hedge, post-retirement benefit, merger and other sundry reserves.

2 The treasury shares purchased represent the cost of shares in MondiLimited and Mondi plc purchased in the market and held by the Mondi IncentiveSchemes Trust and the Mondi Employee Share Trust respectively to satisfyoptions under the Group's share option schemes. The number of ordinary sharesheld by the Mondi Incentive Schemes Trust as at 30 June 2010 was 97,690 shares(as at 30 June 2009: 259,334; as at 31 December 2009: 53,700) at an averageprice of R43.75 per share (as at 30 June 2009: R33.24 per share; as at 31December 2009: R35.71 per share). The number of ordinary shares held by theMondi Employee Share Trust as at 30 June 2010 was 4,462,901 shares (as at 30June 2009: 7,113,962; as at 31 December 2009: 5,087,561) at an average price of₤4.05 per share (as at 30 June 2009: ₤4.03 per share; as at 31 December

2009: ₤4.05 per share).

Notes to the condensed combined and consolidated financial statements

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 under International FinancialReporting Standards (IFRS). The condensed combined and consolidated half-yearly financial information forthe six months ended 30 June 2010 has been prepared in accordance with IAS 34,'Interim Financial Reporting'. It should be read in conjunction with theGroup's annual financial statements for the year ended 31 December 2009,prepared in accordance with IFRS. The Group has also complied with SouthAfrican Statements and Interpretations of Statements of Generally AcceptedAccounting Practice. In addition, there are no differences for the Group inapplying IFRS as issued by the International Accounting Standards Board and asendorsed by the European Union (EU). As discussed in the Group performanceoverview under the heading 'Going concern', the condensed combined andconsolidated financial statements have been prepared on a going concern basis. The information for the year ended 31 December 2009 does not constitutestatutory accounts as defined by section 434 of the UK Companies Act 2006. Acopy of the statutory accounts for that year has been delivered to theRegistrar of Companies. The auditors' report on those accounts was unqualified,did not draw attention to any matters by way of emphasis and did not contain astatement under section 498(2) or (3) of the UK Companies Act 2006.

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 2009, except as describedbelow.

In the current financial year, the Group has adopted IFRS 3, 'Business Combinations' (revised 2008), and IAS 27, 'Consolidated and Separate Financial Statements' (revised 2008). Both standards became effective for annual reporting periods beginning on or after 1 July 2009.

The most significant changes, all of which are applied prospectively, to the Group's previous accounting policies for business combinations are as follows:

acquisition related costs which previously would have been included in the costof a business combination are included in administrative expenses as they areincurred;any pre-existing equity interest in the acquiree is remeasured to fair value atthe date of obtaining control (the acquisition date), with any resulting gainor loss recognised in profit or loss;

any changes in the Group's ownership interest subsequent to the acquisition date are recognised directly in equity, with no adjustment to goodwill; and

any changes to the cost of an acquisition, including contingent consideration,resulting from events after the acquisition date are recognised in profit orloss. Previously, such changes resulted in an adjustment to goodwill. Any adjustments to contingent consideration for acquisitions made prior to 1January 2010 which result in an adjustment to goodwill continue to be accountedfor under IFRS 3 (2004) and IAS 27 (2005), for which the accounting policiescan be found in the Group's annual financial statements for the year ended 31December 2009. Comprehensive details of changes to accounting policies will bepresented in the Group's annual financial statements for the year ended 31

December 2010. 3 Seasonality

The seasonality of the Group's operations has no significant impact on the condensed combined and consolidated financial statements.

4 Operating segments

Operating segment revenues

(Reviewed) (Reviewed) (Audited) Six months ended 30 June Six months ended 30 June Year ended 31 December 2010 2009 2009 Segment Internal External Segment Internal External Segment Internal External€ million revenue revenue1 revenue2 revenue revenue1 revenue2 revenue revenue1 revenue2 Europe & International Uncoated Fine Paper 762 (75) 687 680 (62) 618 1,351 (130) 1,221 Corrugated 610 (26) 584 527 (16) 511 1,041 (36) 1,005 Bags & Coatings 1,060 (20) 1,040 893 (12) 881 1,787 (24) 1,763 Intra-segment elimination (60) 60 - (37) 37 - (80) 80 - Total Europe & International 2,372 (61) 2,311 2,063 (53) 2,010 4,099 (110) 3,989 South Africa Uncoated Fine Paper 226 (58) 168 197 (64) 133 386 (120) 266 Containerboard 69 (68) 1 66 (63) 3 121 (119) 2 Intra-segment elimination (19) 19 - (14) 14 - (29) 29 - Total South Africa 276 (107) 169 249 (113) 136 478 (210) 268 Mondi Packaging South Africa 298 (16) 282 227 (13) 214 498 (25) 473 Merchant & Newsprint businesses 271 - 271 254 - 254 528 (1) 527 Segments total 3,217 (184) 3,033 2,793 (179) 2,614 5,603 (346) 5,257 Inter-segment elimination (184) 184 - (179) 179 - (346) 346 - Group total 3,033 - 3,033 2,614 - 2,614 5,257 - 5,257 Notes:

1 Inter-segment transactions are conducted on an arm's length basis.

2 The description of each business segment reflects the nature of the mainproducts they sell. In certain instances the business segments sell minorvolumes of other products and due to this reason the external segment revenueswill not necessarily reconcile to the external revenues by each type of productpresented below.

External revenue by product type

(Reviewed) (Reviewed) (Audited) Six months ended 30 Six months ended 30 Year ended 31 € million June 2010 June 2009 December 2009 Products Corrugated products 788 709 1,357 Uncoated fine paper 674 592 1,195 Kraft paper & bags 503 437 886 Coatings, consumer bags & films 431 374 731 Merchant sales 238 202 468 Newsprint 104 74 208 Pulp 104 68 129 Woodchips 39 35 61 Other1 152 123 222 Group total 3,033 2,614 5,257 Note:

1 Revenues derived from product types that are not material are classed as other.

External revenue by location of customer

(Reviewed) (Reviewed) (Audited) Six months ended 30 Six months ended 30 Year ended 31 € million June 2010 June 2009 December 2009 Revenue Africa South Africa1 379 291 644 Rest of Africa 129 103 196 Africa total 508 394 840 Western Europe Germany 375 317 641 United Kingdom1 169 184 367 Rest of Western Europe 727 684 1,292 Western Europe total 1,271 1,185 2,300 Emerging Europe 584 526 1,105 Russia 249 188 387 North America 111 79 157 South America 14 9 17 Asia and Australia 296 233 451 Group total 3,033 2,614 5,257 Note:

1 These revenues, which total €548 million (six months ended 30 June 2009:€475 million; year ended 31 December 2009: €1,011 million), are attributable tothe countries in which the Group's parent entities are domiciled.

External revenue by location of production

(Reviewed) (Reviewed) (Audited) Six months ended 30 Six months ended 30 Year ended 31 € million June 2010 June 2009

December 2009 Revenue Africa South Africa1 561 467 948 Rest of Africa 9 5 13 Africa total 570 472 961 Western Europe Austria 597 502 1,010 United Kingdom1 88 129 244 Rest of Western Europe 463 440 855 Western Europe total 1,148 1,071 2,109 Emerging Europe Poland 335 216 486 Rest of Emerging Europe 512 471 927 Emerging Europe total 847 687 1,413 Russia 322 251 519 North America 62 54 104 Asia and Australia 84 79 151 Group total 3,033 2,614 5,257 Note:1 These revenues, which total €649 million (six months ended 30 June 2009: €596 million; year ended 31 December 2009: €1,192 million), are attributable tothe countries in which the Group's parent entities are domiciled.

There are no external customers which account for more than 10% of the Group's total external revenue.

Operating segment operating profit/(loss)

Segment operating profit before Segment operating profit/(loss) special items after special items (Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited) Year ended Year ended Six months Six months 31 Six months Six months 31 ended 30 ended 30 December ended 30 ended 30 December € million June 2010 June 2009 2009 June 2010 June 2009 2009 Europe & International Uncoated Fine Paper 98 71 146 108 71 144 Corrugated 48 1 23 48 (10) (27) Bags & Coatings 55 36 82 103 (13) 34 Total Europe & International 201 108 251 259 48 151 South Africa Uncoated Fine Paper 14 13 16 (7) (6) (6) Containerboard 4 15 16 4 15 16 Total South Africa 18 28 32 (3) 9 10 Mondi Packaging South Africa 18 11 36 17 11 43 Merchant & Newsprint businesses 1 8 12 1 8 - Corporate & other businesses (16) (17) (37) (16) (17) (38) Segments total 222 138 294 258 59 166 Net (loss)/profit on disposals (see note 6) - - - (22) 5 3 Impairment of assets held for sale (see note 6) - - - (13) (8) (8) Net income from associates 2 1 2 2 1 2 Net finance costs (48) (58) (114) (48) (58) (114) Group profit/ (loss) before tax 176 81 182 177 (1) 49 EBITDA by operating segment (Reviewed) (Reviewed) (Audited) Six months ended 30 Six months ended 30 Year ended 31 € million June 2010 June 2009 December 2009 Europe & International Uncoated Fine Paper 146 117 239 Corrugated 82 32 87 Bags & Coatings 108 89 189 Total Europe & International 336 238 515 South Africa Uncoated Fine Paper 35 29 52 Containerboard 9 19 24 Total South Africa 44 48 76 Mondi Packaging South Africa 33 23 62 Merchant & Newsprint businesses 8 16 28 Corporate & other businesses (16) (17) (36) EBITDA 405 308 645

Segment assets and liabilities

(Reviewed) (Reviewed) (Audited) As at 30 June 2010 As at 30 June 2009 As at 31 December 2009 Net Net Net Segment Segment segment Segment Segment segment Segment Segment segment€ million assets1 liabilities2 assets assets1 liabilities2 assets assets1 liabilities2 assets Europe & International Uncoated Fine Paper 1,862 (220) 1,642 1,640 (174) 1,466 1,671 (177) 1,494 Corrugated 1,074 (212) 862 1,044 (207) 837 1,071 (199) 872 Bags & Coatings 1,720 (402) 1,318 1,585 (268) 1,317 1,531 (309) 1,222 Intra-segment elimination (67) 67 - (25) 25 - (33) 33 - Total Europe & International 4,589 (767) 3,822 4,244 (624) 3,620 4,240 (652) 3,588 South Africa Uncoated Fine Paper 897 (101) 796 834 (100) 734 804 (92) 712 Containerboard 159 (23) 136 152 (18) 134 150 (22) 128 Intra-segment elimination (4) 4 - (3) 3 - (6) 6 - Total South Africa 1,052 (120) 932 983 (115) 868 948 (108) 840 Mondi Packaging South Africa 475 (107) 368 438 (96) 342 432 (97) 335 Merchant & Newsprint businesses 148 (40) 108 290 (72) 218 263 (69) 194 Corporate & other businesses 18 - 18 7 (1) 6 3 1 4 Inter-segment elimination (71) 71 - (97) 97 - (74) 74 - Segments total 6,211 (963) 5,248 5,865 (811) 5,054 5,812 (851) 4,961 Unallocated: Investments in associates 6 - 6 8 - 8 6 - 6 Deferred tax assets/ (liabilities) 31 (334) (303) 43 (329) (286) 29 (316) (287) Other non-operating assets/ (liabilities)3 371 (630) (259) 239 (631) (392) 211 (577) (366) Group trading capital

employed 6,619 (1,927) 4,692 6,155 (1,771) 4,384

6,058 (1,744) 4,314 Financial asset investments 33 - 33 24 - 24 27 - 27 Net debt 77 (1,709) (1,632) 171 (1,832) (1,661) 123 (1,640) (1,517) Group net assets 6,729 (3,636) 3,093 6,350 (3,603) 2,747

6,208 (3,384) 2,824 Notes:

1 Segment assets are operating assets and consist of property, plant and equipment, intangible assets, forestry assets, retirement benefits surplus, inventories and operating receivables.

2 Segment liabilities are operating liabilities and consist of non-interest bearing current liabilities, restoration and environmental provisions and provisions for post-retirement benefits.

3 Other non-operating assets consist of derivative assets, current income taxreceivables, other non-operating receivables and assets held for sale. Othernon-operating liabilities consist of derivative liabilities, non-operatingprovisions, current income tax liabilities and liabilities directly associatedwith assets classified as held for sale. Capital expenditure cash payments and the additions to the Group's non-currentnon-financial assets, other than deferred tax assets and retirement benefitssurplus, are presented by operating segment as follows: Additions to non-current Capital expenditure cash payments non-financial assets1 (Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed)

(Audited)

Six months Six months Year ended Six months Six months

Year ended

ended 30 ended 30 31 December ended 30 ended 30 31 December€ million June 2010 June 2009 2009 June 2010 June 2009 2009 Europe & International Uncoated Fine Paper 82 122 191 74 159 257 Corrugated 42 108 195 38 106 178 Bags & Coatings 35 42 81 45 39 83 Total Europe & International 159 272 467 157 304 518 South Africa Uncoated Fine Paper 7 12 22 26 30 59 Containerboard 2 1 4 2 1 4 Total South Africa 9 13 26 28 31 63 Mondi Packaging South Africa 14 6 17 14 6 17 Merchant & Newsprint businesses 2 2 7 4 2 10 Corporate & other businesses - - - - 2 6 Group and segments total 184 293 517 203 345 614 Note:1 Additions to non-current non-financial assets reflect cash payments andaccruals in respect of additions to property, plant and equipment, intangibleassets and forestry assets and include interest capitalised as well asadditions resulting from acquisitions through business combinations.

5 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 2010, total €11 million (six monthsended 30 June 2009: €11 million; year ended 31 December 2009: €18 million). Theaggregate reversal of previous write-downs, recognised as a reduction in theamount of inventories expensed for the six months ended 30 June 2010, total €2million (six months ended 30 June 2009: €2 million; year ended 31 December2009: €3 million). 6 Special items (Reviewed) (Reviewed) (Audited) Six months Six months ended 30 June ended 30 June Year ended 31 € million 2010 2009 December 2009 Operating special items Goodwill impairments - - (12) Asset impairments (26) (36) (78) Reversal of asset impairments 8 - -

Restructuring and closure costs Restructuring and closure costs excluding related personnel costs (1) (29)

(22)

Personnel costs relating to

restructuring (2) (11) (21)

Reversal of restructuring and closure

costs 26 - - Demerger arrangements - (3) (3) Proceeds on insurance - - 8

Gain on acquisition of business 31 -

- Total operating special items 36 (79) (128) Non-operating special items Net (loss)/profit on disposal (22) 5 3

Asset impairment of assets held for

sale (13) (8) (8)

Total non-operating special items (35) (3)

(5)

Total special items before tax and

non-controlling interests 1 (82) (133) Tax 4 4 6 Non-controlling interests 1 - (1)

Total special items attributable to equity holders of the parent companies 6 (78)

(128) Operating special items

A 120,000 tonne uncoated fine paper machine and related converting capacity inthe Merebank plant will be mothballed in September 2010 and the businessrestructured. This has led to an asset impairment of €18 million and relatedrestructuring costs of €3 million being recognised. The completion of the sale of the Szolnok site has resulted in the reversal ofpreviously recognised restructuring and closure provisions and the realisationof the cumulative translation adjustment reserve, amounting to €10 million. The restarting of the Stambolijski kraft paper line during June 2010 hasresulted in a reversal of impairment (€8 million) and related provisions (€17million) recognised for the closure that are no longer required, amounting

to €25 million.

Underperforming non-integrated kraft paper assets in Lohja and Ruzomberok have been partially impaired by €8 million.

The acquisition of the industrial bag businesses in western Europe resulted ina gain of €31 million being recognised. These plants will be subject to futurerestructuring. Non-operating special items

The sale of the corrugated plants in the UK to Smurfit Kappa resulted in a loss on disposal (including realisation of the cumulative translation adjustment reserve) of €17 million.

Sale of forestry assets in South Africa realised a gain of €7 million.

The expected sale of the Europapier business resulted in a write-down of assetsof €13 million and recognition of the expected loss on sale of €12 million,amounting in total to €25 million. 7 Finance costs (Reviewed) (Reviewed) (Audited) Six months ended 30 Six months ended 30 Year ended 31 € million June 2010 June 2009 December 2009 Total interest expense (82) (102) (185) Less: interest capitalised 7 31 45 Total financing costs (75) (71) (140) 8 Tax charge (Reviewed) (Reviewed) (Audited) Six months ended Six months ended Year ended 31 € million 30 June 2010 30 June 2009 December 2009 UK corporation tax (1) - 1 Overseas tax 55 23 52 Current tax (including tax on special items) 54 23 53 Deferred tax (12) - (1) Total tax charge 42 23 52

The Group's estimated effective annual rate of tax before special items for thesix months ended 30 June 2010, calculated on profit before tax before specialitems and including net income from associates, is 26% (six months ended 30June 2009: 34%; year ended 31 December 2009: 32%). The reduction in theeffective tax rate from 32% to 26% is realised primarily due to the improvedprofitability enabling the use of previously unrecognised tax losses carriedforward; increased profitability in regions with lower tax rates; and benefitsof tax incentives granted in certain countries in which the Group operates,notably those related to the major Polish and Russian capital projects. 9 Earnings per share (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December € cents per share 2010 2009 2009

Profit/(loss) for the financial period/year attributable to equity holders of the parent

companies Basic EPS 21.5 (7.1) (6.5) Diluted EPS 21.2 (7.1)3 (6.5)3

Underlying earnings for the financial period

/year1 Basic EPS 20.3 8.3 18.7 Diluted EPS 20.0 8.1 18.2

Headline earnings/(loss) for the financial

period/year2 Basic EPS 24.8 (0.8) 11.4 Diluted EPS 24.5 (0.8) 11.1 Notes:

1 Underlying EPS excludes the impact of special items.

2 The presentation of Headline EPS is mandated under the JSE Listings Requirements. Headline earnings has been calculated in accordance with Circular 3/2009, 'Headline Earnings', as issued by the South African Institute of Chartered Accountants.

3 Diluted EPS is consistent with Basic EPS as the impact of potential ordinary shares is anti-dilutive.

The calculation of basic and diluted EPS, basic and diluted underlying EPS, and basic and diluted headline EPS is based on the following data:

Earnings (Reviewed) (Reviewed) (Audited) Six months Six months Year ended ended 30 June ended 30 June 31 December € million 2010 2009 2009

Profit/(loss) for the financial period/year attributable to equity holders of the parent

companies 109 (36) (33) Special items: operating (36) 79 128

Net loss/(profit) on disposals 22 (5)

(3)

Impairment of assets held for sale 13 8

8 Related tax (4) (4) (6)

Related non-controlling interests (1) -

1

Underlying earnings for the financial period

/year 103 42 95

Profit on disposal of tangible and

intangible assets (1) (4) (4)

Special items: demerger arrangements - (3)

(3)

Special items: restructuring and closure

costs 23 (40) (43)

Impairments not included in special items - -

10 Related tax 1 1 3

Headline earnings/(loss) for the financial

period/year 126 (4) 58 Number of shares (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31 December million 2010 2009 2009

Basic number of ordinary shares

outstanding1 508 507 508 Effect of dilutive potential ordinary shares2 7 12 13

Diluted number of ordinary shares

outstanding 515 519 521 Notes:

1 The basic number of ordinary shares outstanding represents the weighted average number in issue for Mondi Limited and Mondi plc for the period/year, as adjusted for the weighted average number of treasury shares held during the period/year.

2 Diluted EPS is calculated by adjusting the weighted average number of ordinary shares in issue, net of treasury shares, on the assumption of conversion of all potentially dilutive ordinary shares.

10 Dividends

The interim dividend for the year ending 31 December 2010 of 3.5 euro cents perordinary share will be paid on 14 September 2010 to Mondi Limited and Mondi plcordinary shareholders on the relevant registers on 27 August 2010. 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 2009.

The interim dividend for the year ending 31 December 2010 will be paid in accordance with the following timetable:

Mondi Mondi plc Limited

Last date to trade shares cum-dividend

JSE Limited 20 August 20 August 2010 2010 London Stock Exchange Not 24 August applicable 2010

Shares commence trading ex-dividend

JSE Limited 23 August 23 August 2010 2010 London Stock Exchange Not 25 August applicable 2010 Record date JSE Limited 27 August 27 August 2010 2010 London Stock Exchange Not 27 August applicable 2010 Last date for receipt of Dividend Reinvestment Plan (DRIP) 1 1 elections by Central Securities Depository Participants September September 2010 2010

Last date for DRIP elections to UK Registrar and South African 2 27 August Transfer Secretaries by shareholders of Mondi Limited and Mondi September

2010* plc 2010 Payment Date South African Register 14 14 September September 2010 2010 UK Register Not 14 applicable September 2010 Depositary Interest holders 20 Not September applicable(dematerialised DIs) 2010

Holders within the Corporate Nominee 20

Not September applicable 2010

DRIP purchase settlement dates 21

17 September September 2010 2010** Currency conversion dates ZAR/euro 10 August 10 August 2010 2010 Euro/sterling Not 27 August applicable 2010

* 2 September 2010 for Mondi plc South African branch register shareholders

** 21 September 2010 for Mondi plc South African branch register shareholders

Please note that the DRIP plan is not available to Depositary Interest holders and holders within the Corporate Nominee.

Share certificates on the South African registers of Mondi Limited and Mondiplc may not be dematerialised or rematerialised between 23 August 2010 and 29August 2010, both dates inclusive, nor may transfers between the UK and SouthAfrican registers of Mondi plc take place between 18 August 2010 and 30 August2010, both dates inclusive. 11 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 six months ended 30 June 2010.

All assumptions of the Group's material defined benefit schemes andpost-retirement medical plan liabilities were re-assessed individually and theremaining Group defined benefit schemes and unfunded statutory retirementobligations were re-assessed in aggregate for the six months ended 30 June2010. The net change in assumptions from those applied as at 31 December 2009resulted in a €13 million increase in the net retirement benefit obligationsrecorded on the condensed combined and consolidated statement of financialposition. The assets backing the defined benefit scheme liabilities reflecttheir market values as at 30 June 2010. Any movements in the assumptions havebeen recognised as an actuarial movement in the condensed combined andconsolidated statement of comprehensive income. €11 million of the movement innet retirement benefits is due to the decrease in the discount rate from 5.25%at 31 December 2009 to 4.50% at 30 June 2010 in the European defined benefitschemes and unfunded statutory retirement obligations.

12 Asset values per share

Net asset value per share is defined as net assets divided by the combinednumber of ordinary shares in issue as at the reporting dates presented, lesstreasury shares held. Tangible net asset value per share is defined as the netassets less intangible assets divided by the combined number of ordinary sharesin issue as at the reporting dates presented, less treasury shares held. (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31 December 2010 2009 2009

Net asset value per share (€) 6.07 5.42

5.55 Tangible net asset value per share (€) 5.45 4.79 4.94 13 Business combinationsIn line with Mondi's strategy to strengthen its leading market position inindustrial and consumer bags in Europe an agreement was concluded in April 2010with Smurfit Kappa for the acquisition of its western European industrial andconsumer bag operations in Spain, France and Italy. The businesses acquired have incurred operating losses prior to theiracquisition by Mondi and will be subject to future restructuring activities. Asa result of this and the cash in the business on date of acquisition, a gain onacquisition has been recognised in operating special items in the incomestatement. The fair value accounting reflected in these results is provisionalin nature as the transaction was only concluded on 4 May 2010. If necessary,adjustments will be made to these carrying values, and to the gain onacquisition, within 12 months of the acquisition date. Prior to any planned restructuring activities, the acquired industrial bagplants generate turnover of approximately €7 million per month and operatinglosses of €0.8 million per month. Had the acquisition occurred on 1 January2010, the increase in revenue would have been €50 million with an operatingloss of €5 million. Transaction costs related to the acquisition are estimatedat €1 million.

There were no other acquisitions made for the six months ended 30 June 2010.

Details of the aggregate net assets acquired, as adjusted from book to fair value, are presented as follows:

€ million Book value Revaluation Fair value Net assets acquired:

Property, plant and equipment 27 (14)

13 Inventories 15 - 15 Trade and other receivables 21 (1) 20 Cash and cash equivalents 18 - 18 Trade and other payables (22) - (22) Short-term borrowings (1) - (1)

Retirement benefits obligation (2) -

(2) Provisions (3) - (3) Net assets acquired 53 (15) 38 Gain arising on acquisition (31) Total cost of acquisition 7

Cash acquired net of overdrafts

(18) Net cash received 11 14 Disposal groups and assets held for saleOn 5 May 2010, Mondi signed an agreement with the Heinzel Group for the sale of100% of its shares in Europapier, a paper merchant business selling graphic,packaging and office papers, as well as other office supplies to customersacross central Europe and Russia. The loss on disposal of the business will beapproximately €25 million. As part of the reclassification of the underlyingassets as held for sale, the tangible fixed assets were fully impaired. Thesale is subject to approval by various competition authorities and is expectedto be completed in the second half of 2010. Accordingly the assets andassociated liabilities are classified as held for sale at 30 June 2010. 15 Consolidated cash flow analysis(a) Reconciliation of profit/(loss) before tax to cash generated fromoperations (Reviewed) (Reviewed) (Audited) Six months ended Six months ended Year ended 31 € million 30 June 2010 30 June 2009 December 2009 Profit/(loss) before tax 177 (1) 49

Depreciation and amortisation 183 170

351 Share-based payments 3 4 5 Non-cash effect of special 64 items (8) 98 Net finance costs 48 58 114 Net income from associates (2) (1) (2) Decrease in provisions and (9) post-employment benefits (4) (16) (Increase)/decrease in 81 inventories (64) 80 (Increase)/decrease in 19 operating receivables (192) 170 Increase/(decrease) in (1) operating payables 115 (2)

Fair value gains on forestry (15)

assets (16) (28) Felling costs 32 26 50

Profit on disposal of tangible (4)

and intangible assets (1) (4) Other adjustments (2) 1 2

Cash generated from operations 269 392 867 (b) Cash and cash equivalents (Reviewed) (Reviewed) (Audited) As at 30 As at 30 As at 31 € million June 2010 June 2009 December 2009

Cash and cash equivalents per statement of 77 171

123financial position

Bank overdrafts included in short-term (135) (92)

(86) borrowings

Net cash and cash equivalents per

statement of cash flows (58) 79 37 (c) Movement in net debt

The Group's net debt position, excluding disposal groups is as follows:

Cash and Debt due Debt due cash within one after one Total net € million equivalents1 year2 year debt At 1 January 2009 75 (298) (1,467) (1,690) Cash flow - 81 6 87 Business combinations - - 2 2 Disposal of businesses - 8 - 8 Reclassification - (112) 112 - Currency movements 4 (22) (50) (68) At 30 June 2009 79 (343) (1,397) (1,661) Cash flow (19) 207 (44) 144 Reclassification (19) (7) 41 15 Currency movements (4) 10 (21) (15) At 31 December 2009 37 (133) (1,421) (1,517) Cash flow (88) 95 (75) (68) Business combinations - (1) - (1) Disposal of businesses - 5 - 5

Movement in unamortised loan costs - - (2)

(2) Reclassification (1) (33) 40 6 Currency movements (6) (15) (34) (55) At 30 June 2010 (58) (82) (1,492) (1,632) Notes:1 The Group operates in certain countries (principally South Africa) wherethe existence of exchange controls may restrict the use of certain cashbalances. These restrictions are not expected to have any material effect onthe Group's ability to meet its ongoing obligations.2 Excludes overdrafts, which are included as cash and cash equivalents. As at30 June 2010, short-term borrowings on the condensed combined and consolidatedstatement of financial position of €217 million (as at 30 June 2009: €435 million; as at 31 December 2009: €219 million) include €135 million ofoverdrafts (as at 30 June 2009: €92 million; as at 31 December 2009: €86million).

The Group launched its inaugural publicly traded bond on 26 March 2010. The €500 million bond, which matures on 3 April 2017, was issued at a discount of €5.63 million and pays a fixed coupon of 5.75% per annum. The bond contains acoupon step up clause whereby the coupon will be increased by 1.25% per annumwhilst Mondi fails to maintain at least one investment grade credit rating fromeither Moody's or Standard & Poor's.

The following table shows the amounts available to draw down on the Group's committed loan facilities:

(Reviewed) (Reviewed) (Audited) € million As at 30 June 2010 As at 30 June 2009 As at 31 December 2009 Expiry date In one year or less 211 178 141 In more than one year 1,147 895 849 Total credit available 1,358 1,073 990 16 Capital commitments (Reviewed) (Reviewed) (Audited) As at 30 June As at 30 June As at 31 December € million 2010 2009 2009 Contracted for but not provided 184 258 214

Approved, not yet contracted

for 200 136 291 17 Contingent liabilities and contingent assetsContingent liabilities comprise aggregate amounts as at 30 June 2010 of €20million (as at 30 June 2009: €16 million; as at 31 December 2009: €21 million)in respect of loans and guarantees given to banks and other third parties.Acquired contingent liabilities of €nil (six months ended 30 June 2009: €nil;year ended 31 December 2009: €nil) have been recorded on the Group's combinedand consolidated statement of financial position.

There are a number of legal and tax claims against the Group. Provision is made for all liabilities that are expected to materialise.

Contingent assets comprise aggregate amounts as at 30 June 2010 of €5 million(as at 30 June 2009: €nil; as at 31 December 2009: €nil) and mainly relate toenergy credits to be received.

18 Related party transactions

The Group has related party relationships with its associates and joint ventures. Transactions between Mondi Limited, Mondi plc and their respective subsidiaries, which are related parties, have been eliminated on consolidation.

The Group and its subsidiaries, in the ordinary course of business, enter intovarious sale, purchase and service transactions with joint ventures andassociates and other related parties. These transactions are entered into on anarm's length basis at market rates.

There have been no significant changes to the related parties as disclosed in note 39 of the Group's annual financial statements for the year ended 31 December 2009.

Dividends received from associates for the six months ended 30 June 2010 amountto €2 million (six months ended 30 June 2009: €0.4 million; year ended

31December 2009: €2 million).

19 Events occurring after 30 June 2010

With the exception of the proposed interim dividend for 2010, as disclosed in note 10, there have been no material reportable events since 30 June 2010.

Production statisticsProduction statistics Six months ended Six months ended Year ended 31 30 June 2010 30 June 2009 December 2009 Europe & International Uncoated fine paper Tonnes 790,748 709,433 1,470,381 Containerboard Tonnes 1,008,305 836,456 1,768,696 Kraft paper Tonnes 466,156 383,373 841,378 Hardwood pulp Tonnes 474,700 425,533 873,844 Internal consumption Tonnes 451,524 408,527 833,803 External Tonnes 23,176 17,006 40,041 Softwood pulp Tonnes 935,783 845,093 1,773,265 Internal consumption Tonnes 856,279 746,122 1,568,189 External Tonnes 79,504 98,971 205,076 Corrugated board and boxes Mm² 713 924 1,697 Industrial bags M units 1,858 1,655 3,303 Coating and release liners Mm² 1,601 1,258 2,672 Newsprint Tonnes 98,051 99,390 194,564 South Africa Uncoated fine paper Tonnes 152,663 179,325 353,707 Containerboard Tonnes 128,830 120,989 238,915 Hardwood pulp Tonnes 287,417 305,763 578,032 Internal consumption Tonnes 162,785 204,476 407,641 External Tonnes 124,632 101,287 170,391 Softwood pulp Tonnes 56,885 55,394 109,142 Woodchips Bone dry tonnes 129,516 197,436 273,526 Mondi Packaging South Africa Packaging papers Tonnes 197,023 177,796 367,741 Corrugated board and boxes Mm² 185 177 369 Newsprint Joint Ventures (attributable share) Aylesford Tonnes 92,575 96,262 191,035 Mondi Shanduka Newsprint (MSN) Tonnes 64,976 62,221 121,701 Note:Comparative figures have been restated where necessary to afford a bettercomparison. Exchange rates Six months ended Six months ended Year ended 31 30 June 2010 30 June 2009 December 2009 Closing rates against the euro South African rand 9.38 10.89 10.67 Pounds sterling 0.82 0.85 0.89 Polish zloty 4.15 4.45 4.10 Russian rouble 38.28 43.88 43.15 US dollar 1.23 1.41 1.44 Czech koruna 25.69 25.88 26.47

Average rates for the period

against the euro South African rand 9.99 12.25 11.68 Pounds sterling 0.87 0.89 0.89 Polish zloty 4.00 4.47 4.33 Russian rouble 39.88 44.08 44.12 US dollar 1.33 1.33 1.39 Czech koruna 25.72 27.13 26.44

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