Chairmen’s letter

Dear shareholder

A year of consolidation and development

2013 has been another successful year for Mondi despite global economic uncertainty and increased competition in some areas of the business. The Group delivered record results and made significant headway on its strategic initiatives. A full year’s contribution and synergies from the large acquisitions made in 2012, ongoing cost containment, as well as the benefits from the capital expenditure programme all contributed to what was a great year for consolidating and building on the inherent strengths of the organisation. The Group’s strong profitability and continued focus on performance is reflected in a ROCE of 15.3%.

Mondi’s focus is increasingly on the development of our packaging businesses, with a bias towards emerging markets. We continue to work with customers to develop smarter, more cost-effective processes and to find inventive, innovative, advanced solutions that deliver exceptional value. Investing in green energy is important to the Group’s ongoing success and we have committed to various related projects at several of our large operations. In 2013, we made good progress with integrating and optimising the significant acquisitions made towards the end of 2012.

Regular dialogue with shareholders is intended to facilitate a clear understanding of the progress we are making on our strategic imperatives. In 2013 Mondi held a number of investor and analyst events, including results presentations, road shows and one-on-one meetings. The Group also hosted a well-received Capital Markets Day in London in September where the executive directors, together with other key senior management (including business unit heads and innovation managers) shared insights into the Mondi business.

Creating sustainable value

The Boards are committed to delivering shareholder value. We are confident in Mondi’s strategy and in the executive team’s ability to execute it. The Group’s financial results and strong share price performance serve to reinforce the validity of our strategic decisions.

It is also encouraging that Mondi’s share price has performed favourably over the past five years, both in absolute terms and against our peers.

Five year Total Shareholder Return (TSR) [graph]

The record financial performance and strong cash generation enabled the Group to further strengthen its financial position in 2013. In line with the Boards’ aim to offer shareholders long-term dividend growth within a targeted dividend cover range of two to three times, on average, over the cycle, we are pleased to recommend an increase in the final dividend. The boards of Mondi Limited and Mondi plc have recommended a final dividend of 26.45 euro cents per share (2012: 19.1 euro cents per share). Together with the interim dividend of 9.55 euro cents per share, this amounts to a total dividend for the year of 36 euro cents per share.

The boards of Mondi Limited and Mondi plc strive to achieve the highest standards of corporate governance and best practice, and are committed to the principles of transparency, integrity and accountability.

The financial statements included in this report are audited by independent auditors Deloitte and selected key performance indicators assured by ERM CVS.

Mondi is committed to creating sustainable value in the following ways:

  • investing in the long-term growth and development of our business;
  • finding inventive, innovative, advanced solutions that meet our customers’ needs;
  • following our customers into high-growth emerging markets, where together we can offer cutting-edge products that deliver exceptional value;
  • focusing on achieving best practice and complying with regulatory standards;
  • creating and sustaining valuable and meaningful employment, recognising diversity and creating a working environment where opportunities unfold for our people;
  • working diligently to ensure the safety and well-being of our employees and contractors;
  • minimising our contribution to climate change;
  • active stewardship of our land and freshwater ecosystems to maintain biodiversity;
  • sustainable forest management through credible certification and chain-of-custody along the supply chain;
  • enhancing the eco-efficiency of Mondi products through resource efficiency and responsible use of materials throughout their life-cycles; and
  • contributing to the development of people and communities at and around our operations.

An outstanding team of people

People make Mondi – their talent, knowledge, integrity, commitment and passion for performance shines through at all levels of the organisation. Considering the challenging economic environments many of our businesses continue to face, Mondi’s leaders are truly inspirational in the way they find solutions and deliver value in a responsible way. On behalf of the Boards, we extend heartfelt thanks to the executive committee and all of Mondi’s people for being so determined, innovative and willing to go the extra mile.

Fred Phaswana
Joint chairman

David Williams
Joint chairman



Cyril Ramaphosa stepped down as joint chairman at the conclusion of the Group’s annual general meetings on 3 May 2013. On behalf of the Boards, I would like to thank Cyril for his significant contribution to the Mondi Group and wish him well with his future plans. Fred Phaswana was appointed as the joint chairman of the Mondi Group and a member of the DLC nominations committee on 1 June 2013. The Mondi Group Boards and I are delighted that Fred has joined us. He brings extensive experience in board and senior business leadership roles and his knowledge of the South African business environment is of particular benefit to Mondi.