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Packaging And Design

Mondi Group Posts Slight Dip In 2016 Revenue

Packaging and paper company Mondi Group saw volatility in foreign exchange rates cause its group revenue to dip slightly in 2016, falling 2% to €6.6 billion.

However, its underlying EBITDA grew 3%, to €1.4 billion, and its operating profit also saw a 3% increase, to €981 million.

Positive volume growth in its packaging paper and consumer packaging segments, as well as increased prices in South Africa and Russia, were affected by diminished price points in the packaging paper and fibre packaging segments.

European input costs generally dropped in 2016, with materials such as wood and fuel declining in price.

Capital Projects

During the year, Mondi Group completed several major capital projects, which added an incremental €50 million to the underlying operating profit.

The company approved more than €800 million of investment in approved and upcoming projects, such as a boiler replacement at its Štětí mill in the Czech Republic, and implementation of a machine-glazed specialty kraft paper machine for €470 million.

It also completed four acquisitions in 2016, equalling €185 million: two corrugated packaging companies (SIMET in Poland and Lebedyan in Russia), and two consumer packaging companies (Kalenobel in Turkey and Uralplastic in Russia).

It announced its takeover of flexible packaging company Excelsior Technologies in February 2017.

"Industry Leading Returns"

Chief executive David Hathorn commented on the year, "We saw good contributions from all our businesses despite pricing headwinds in a number of key paper grades".

"Our outlook for the business is positive. We have implemented or announced price increases in containerboard, sack kraft and uncoated fine paper grades, supported by good demand. We expect some inflationary cost pressures across the Group and a lower forestry fair value gain.

"Furthermore, we anticipate a more challenging trading environment in certain uncoated fine paper markets following price erosion in Europe over the course of 2016, combined with emerging market currency volatility.

"However, we expect to continue to benefit from contributions from our recently completed capital projects and acquisitions, together with steady organic growth in our downstream converting businesses."

He said Mondi Group is confident of delivering "industry-leading returns", despite future expected increases to commodity costs.

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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