Mondi : JAWS version for the visually impaired (16 MB)

A market leader in sustainable packaging and paper

Mondi is a leading producer of corrugated packaging in Europe and a global leader in the production of kraft paper and paper bags as well as a regional leader in uncoated fine paper.

Broad product range drives innovation and strengthens long-term customer relationships

One of Mondi's strengths is our ability to offer customers a choice of paper, plastic or hybrid solutions using barrier technology to deliver sustainable packaging for our customers.

Robust financial position

Our strong cash generation through-cycle and robust balance sheet with investment grade credit rating provides strategic flexibility.

Investment through-cycle for value accretive organic growth

Mondi invests to deliver value for all our stakeholders whether through new capacity expansion projects, to improve productivity and operational excellence, or to deliver our sustainability targets.

Structurally growing markets underpinned by increasing demand for eCommerce and sustainable packaging

We operate in long-term structurally growing markets driven by consumption and industrial production growth underpinned by increasing demand for eCommerce and sustainable packaging.

Disciplined capital allocation strategy focused on returns

We have a balanced strategy of investing in both organic and inorganic growth opportunities alongside returning capital to shareholders.

Competitive advantage and resilience from quality asset base and integrated business model

Mondi operates high-quality, integrated assets which are well invested with close proximity to low-cost sustainable fibre and biomass, delivering significant cost advantages and reduced volatility.

Contributing to a better world

Mondi is a recognised leader in sustainability.

Our MAP2030 framework is focused on delivering circular driven solutions, created by empowered people, taking action on climate supported by responsible business practices.

Welcome to Mondi's Integrated report for 2023. I have written in the past about the resilience of Mondi, and it was evident again in the past year in the face of external challenges, most significantly the uncertain global economic environment where central banks and financial markets were torn between the steps required

to reduce inflation and the risk of self-inflicted recession. The geopolitical environment became even more uncertain given the continuing conflict in Ukraine and the shocking and polarising events in the Middle East in the last quarter.

Following the reversal of the energy squeeze the industry faced in 2022, many of our input costs have fallen, yet overall the economic uncertainties have had a significant impact on our margins as some producers have chosen to reopen their temporarily mothballed production facilities in an environment where overall demand has been cyclically soft. Market pricing has generally been at significantly lower levels than in 2022, falling more than input costs, in part due to new capacity being brought on stream at this relatively weak point

in the cycle.

A resilient performance

Mondi's resilience is based on our scale, our quality asset base, our integrated model and the breadth and depth of our customers and end-markets. So our continuing businesses remained appropriately profitable, although the slowdown in global demand for goods throughout 2023 put pressure on Mondi's performance, resulting in underlying EBITDA of €1,201 million

(2022: €1,848 million). Cash flow remains

strong and our balance sheet robust, enabling us to continue our capacity expansion projects which remain on track and on budget. ROCE was 12.8% (2022: 23.7%).

Together with the Board, I would like to thank all our colleagues who have worked hard to continue delivering value for

all Mondi's stakeholders against this challenging backdrop. Thanks to them we have continued to build strong relationships with customers, improve efficiency and productivity across our extensive asset base, and make excellent progress with our significant investment projects. I have no doubt that their efforts ensure Mondi is well positioned for a sustainable future.

Capital allocation focused on returns

One of Mondi's key strengths is the quality of our through-cycle cash generation, which remained strong with cash generated from operations at €1,312 million

(2022: €1,292 million). Our robust financial position, with leverage (net debt to underlying EBITDA) of 0.3 times, and disciplined capital allocation provide

us with strategic flexibility to continue investing through-cycle for sustainable growth and deliver attractive returns, while supporting the ordinary dividend.

With our confidence in Mondi's future, the Board has recommended a final dividend of 46.67 euro cents per share. The final dividend, together with the interim dividend, amounts to a total ordinary dividend for the year of

70.0 euro cents per share.

It was a disappointment that the conditional agreement to dispose of our operation in Syktyvkar in Russia announced in August 2022 did not receive the requisite regulatory approvals within the target timetable. However, our management are to be congratulated on delivering an acceptable alternative. This, together with the sale of the converting operations, created a loss on disposal of €756 million which mainly comprised the reclassification of the foreign currency translation reserves and contributed to an overall loss after tax for the Group, attributable to shareholders, of €153 million.

Total cash proceeds of €806 million were received before year end. Following approval by shareholders, the net proceeds were distributed by way of a special dividend of €1.60 per share on 13 February 2024. Further details of the transaction can be found in note 28 in the notes to

the consolidated financial statements.

Investing through-cycle for value accretive growth

The Board is pleased with the progress made in 2023 on our growth capital investment programme, which will support an increase in our capacity, lower our cost base and reduce our environmental footprint.

As part of our capacity expansion pipeline, we are making excellent progress on the project to install our new kraft paper machine at Štětí (Czech Republic) to increase our kraft paper capacity and are on track to commence operations in 2025. Our two containerboard debottlenecking projects in Kuopio (Finland) and Świecie (Poland) will be contributing additional capacity from 2024.

Acquisitions continue to be a key part

of our investment strategy. Opportunities are rigorously assessed in terms of both financial metrics and strategic fit, with

a focus on those opportunities that complement our existing footprint and capabilities. An important new opportunity for us comes through the acquisition of the Hinton Pulp mill in Alberta (Canada) in early 2024 which is now part of our Flexible Packaging business unit. After the intended investment in a new kraft paper machine, Hinton will be capable of producing low-cost,high-quality kraft paper for industrial and eCommerce bags, and fully integrate our North American paper bag operations, strengthening our competitive advantage and providing our customers with security of supply (see page 41).

Contributing to a better world

Mondi has an ambitious purpose that guides our decisions: to contribute to a better world by making packaging and paper solutions that are sustainable by design. We are committed to leading the way in circular driven solutions and are focused on ensuring our customers have sustainable packaging that is reusable, recyclable or compostable.

Consequently, sustainability is at the heart of our strategy. The Mondi Action Plan 2030 (MAP2030), our sustainability framework, sets out how progress in our three key action areas - Circular Driven Solutions, Created by Empowered People,

Taking Action on Climate - can drive the prosperity of the people, places and ecosystems that matter to our business and stakeholders.

Since the launch of MAP2030, Mondi has continued to make good progress in our commitments, and ownership of our sustainability goals is widely shared across the business.

Since 2019, the base year for our Net-Zero targets, we have reduced our absolute Scope 1 and 2 greenhouse gas (GHG)

packaging requirements, creating partnerships with our customers on their journey towards a circular economy. Today, 85% of our paper and packaging products are reusable, recyclable or compostable and we continue the necessary work towards our target

of 100%.

We are excited about the range of innovative products released during the year; for example, our paper MailerBAGs support eCommerce customers looking to transition away from plastic when shipping goods worldwide, while Hug&Hold is a paper-based solution that aims to replace plastic shrink wrap for PET bottle bundle packs (see page 28).

Empowering our people

Delivering value for our stakeholders relies on a talented and motivated workforce and, together with other members of the Board, I have greatly benefitted from visiting our operations during the year, including the Richards Bay mill (South Africa) in February 2023 and Świecie mill (Poland)

in June 2023, seeing first hand the commitment and energy of our colleagues. As part of her role leading employee engagement on behalf of the Board, non-executive director Sue Clark participated in Mondi's European Communication Forum, alongside representatives from our European plant network, where she discussed Group priorities and performance. We have 22,000 colleagues across more than

30 countries and we aim to be an employer of choice, supporting our people

to realise their potential and contribute to Mondi's ongoing success.

The results of our Employee Survey in 2023 reiterated the feedback given to us on our site visits. Colleagues across the Group particularly value the sense of meaning and purpose their jobs give them, and the opportunities offered to learn and grow. We know this as we measure progress against our MAP2030 commitments,

towards the end of the year at our Ružomberok mill (Slovakia), which has left the Board deeply saddened. A key part of our philosophy is to ensure that every incident is fully investigated and procedures and practices further revised if we can avoid the same or similar

situation recurring.

Board developments

The Board is committed to the highest standards of corporate governance, a key factor being the effective combination of skills, experience and judgement

of our directors. In April, we welcomed Anke Groth as an independent non- executive director. Anke has a strong financial and commercial background, having operated in large international listed companies across the energy and industrial sectors. She brings valuable new insights to the Board and strengthens the

Audit Committee.

Looking ahead

As we enter 2024, it is clear that geopolitical uncertainties remain high and that it is going to be another challenging year for the world economy. However, I am confident that Mondi has the resilience

to navigate these challenges. We intend to push through the tough macroeconomic environment relying on our scale, quality asset base, integrated operations and excellent customer proposition. Our strong balance sheet provides the opportunity

to continue investing through-cycle, staying alert to growth opportunities and ensuring Mondi is well positioned to deliver attractive returns long into the future.

Philip Yea

Chair

Ordinary dividend per share 70.0 (euro cents)

emissions by 22% and our absolute Scope 3 GHG emissions by 21%. In the near term, our targets commit us to reduce absolute Scope 1 and 2 GHG emissions by 46.2% and Scope 3 GHG emissions by 27.5% by 2030 from a 2019 base year.

represented by the Purposeful Workplace Index (79%), Inclusiveness Index (77%) and - for the first time in 2023 - our Wellbeing Index (77%).

Keeping people safe is our top priority and we have been building on our

57 60

65 70 70

Advancing our offering of sustainable products

One of Mondi's strengths is our ability to offer our customers a choice of paper, plastic or hybrid solutions for their

traditional safety focus to address the social psychology of risk, as well as deepening our engagement with our contractors. Although we are among the safety leaders in our industry, most regrettably we experienced a fatality

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2023 ordinary dividend includes proposed final ordinary dividend of 46.67 euro cents per share.