Packaging and paper group Mondi has reported a 13% year-on-year decrease in underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) to €1.05-billion for the year ended December 31, achieved against a backdrop of softness in demand and a challenging pricing environment.

The company explains that the decrease in Ebitda was primarily owing to the significantly lower forestry fair value gain of €7-million and a €32-million one-off currency loss recognised in the first half from the devaluation of the Egyptian pound.

It notes that volume growth and lower wood, energy and chemical costs offset lower average prices and inflationary increases in operating costs.

“Mondi demonstrated resilience through the year in the face of ongoing difficult trading conditions, characterised by soft demand and a challenging pricing environment. This resilience highlights the strength of our cost-competitive, strategically located integrated assets and our great people.

“Furthermore, our ability to adapt with agility and flexibility to market uncertainties, combined with our unwavering focus on product quality, reliability and innovation in offering a diverse portfolio of sustainable packaging and paper solutions, has been central to delivering value to our stakeholders,” says CEO Andrew King.

Group revenue of €7.42-billion was up on the prior year as a result of higher sales volumes and despite lower average selling prices.

Cash generated from operations was €970-million, a reduction on the prior year’s €1.31-billion owing to working capital movements in the year of €108-million compared with an inflow in 2023 of €229-million, impacted in part by an increase in inventory levels following the startup of major capacity expansion projects.

Mondi says capital expenditure (capex) cash payments were €933-million as the company continued to invest in its meaningful capex programme alongside investing to improve efficiency, reduce environmental impacts and increase energy self-sufficiency.

In 2025, Mondi says it expects capex to be between €750-million and €850-million, which, in addition to regular stay-in-business capex, includes the final payments associated with its €1.2-billion capex programme, and the ongoing investments to replace the boilers in both Richards Bay, South Africa, and Dynäs, Sweden.

Meanwhile, King points out that Mondi successfully started up five major capacity expansion projects on time and within budget, building a strong platform for growth.

The largest of these, the new paper machine at Štětí in the Czech Republic, commenced operations ahead of schedule in December.

“We are very appreciative of the commitment of our colleagues who have worked tirelessly over the last few years to deliver these projects. Our focus now turns to executing our operational and commercial strategy and leveraging our expanded product offering,” says King.

Additionally, Mondi says it is on track to complete the acquisition of the Western Europe Packaging Assets of Schumacher Packaging, for an enterprise value of €634-million, in the first half of 2025, which will increase leverage in the short term.

King notes that disciplined capital allocation to deliver value-accretive growth remains a strategic priority for the company and, alongside its investment in organic growth opportunities, the company announced the acquisition of the Western Europe Packaging Assets of Schumacher Packaging, which will expand its geographic reach and deliver integration benefits in its Corrugated Packaging business.

"As we move into 2025, while significant macroeconomic and geopolitical uncertainties remain, we are currently seeing improving order books across our packaging businesses and are implementing price increases across our range of packaging paper grades. With our culture of continuous improvement, we are focused on managing costs and driving productivity, alongside ramping up our new capacity expansion projects.

“The demand for sustainable products is providing many opportunities for Mondi and is a key driver of our growth. Our investments over the last few years, enhancing our unique packaging and paper platform and product offering for our customers, will support this growth,” says King.