Mondi’s profit before tax grew 28% to €983m in 2021 as growth accelerated for their sustainable packaging offering.
The group’s revenue saw a rise of 16% from €6.6bn in 2020 to €7.7bn in 2021. Underlying EBITDA increased to €1.5bn from €1.3bn YoY.
The groups financial performance was a reflection of higher sales volumes due to growth in demand for corrugated packing and flexible packing. Selling prices of the products were also increased to compete with inflationary cost burdens. The highest result in new selling prices came from corrugated packaging.
To encourage the growth trend in the packaging markets, a significant lineup for capital investments have been set up, including €1 billion in expansionary projects that have been authorised or are being evaluated.
Strong financials of the group lead the board to recommend an increase in full year dividends grew 8% from €0.60 to €0.65 YoY.
ESG
ESG measures launched Mondi Action Plan 2030, which is a sustainability roadmap. The company will continue to focus on climate resilience, zero deforestation in its wood supply, procuring wood sustainably from healthy and resilient forests, and protecting biodiversity and water resources in its activities and beyond as part of the MAP2030 strategy.
The group has committed to working towards the 1.5°C event with the goal of Net-Zero by 2050.
Sale of Business
Divestment of their business, personal care components (PCC), created an enterprise value of €615m. Due to Mondi’s strategic approach on packaging and PCC’s low overlap with the rest of the company, they felt that the next phase of PCC’s development will be best carried out from outside the Group.
The group has major activities in Russia, which will account for roughly 12% of Mondi’s sales in 2021. They also have a plant in Syktyvkar, which is a high-margin, cost-competitive integrated pulp, packaging paper, and uncoated fine paper mill. Russia accounts for 20% of group EBITDA.
“Mondi delivered strongly in 2021 and we see good opportunity to accelerate growth in sustainable packaging. Underlying EBITDA of €1,503 million was up 11% and ROCE up at 16.9%. We grew our packaging businesses and saw a recovery in uncoated fine paper markets. Our vertical integration, the agility of our operations and collaboration with our customers ensured we met surging demand at a time when supply chains were under pressure around the world. We implemented price increases across all our businesses and, against a backdrop of rising commodity input costs, we exhibited good cost control. Our focus on safety and protecting the wellbeing of our people remains our priority,” commented Andrew King, Chief Executive Officer, Mondi Group.
Mondi shares are trading down 1.9% at 1491p post the open on Thursday morning.