Mondi (MNDI) H1 2024 earnings summary

Executive summary

• Delivered robust H1 2024 performance with sequential profitability improvement, supported by organic growth investments, stronger volumes, and price increases, especially in flexibles and paper grades, amid challenging but improving market conditions.

• Maintained strong balance sheet and strategic flexibility, enabling continued investment, shareholder returns, and a focus on sustainability and innovation.

• Significant progress on capital investment projects, with meaningful EBITDA contribution expected from 2025 onwards; special dividend paid following the sale of Russian assets.

Financial highlights

• Underlying EBITDA for H1 2024 was €565 million, down from H1 2023 but up from H2 2023, with sequential improvement driven by higher sales volumes and improved market demand.

• Basic underlying EPS was 50.5 euro cents; cash generated from operations was €372 million, with net debt rising to €1.6 billion (1.5x net debt/EBITDA).

• Average sales prices were lower year-over-year due to 2023 declines, but price increases were implemented across all paper grades during H1 2024.

• Significant reduction in input costs, mainly from lower wood and energy prices, offset by increased personnel and inflationary costs and absence of prior year insurance income.

• One-off currency losses from Egyptian pound devaluation (€32–42 million); maintenance shutdown at Richards Bay rescheduled to H2, shifting EBITDA impact.

Outlook and guidance

• Sequential improvement expected to continue into H2 2024, with full benefit of recent price increases for packaging businesses.

• Working capital levels anticipated to normalize by year-end; capital expenditure for 2024 expected at the top end of €800–900 million.

• Capital expansion program (~€1.2 billion) on track, with 80% completion expected by year-end and significant EBITDA contribution from 2025.

• Effective tax rate expected at 22–23%; net finance costs revised to ~€80 million.

• Cautious optimism on underlying demand recovery, with restocking effects fading and macroeconomic growth in core markets seen as supportive.