Paper and packaging group Mondi achieved underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) of €1.2-billion for the year ended December 31, 2023, compared with Ebitda of €1.85-billion in 2022.

The Group's underlying Ebitda margin was 16.4%, compared with 20.8% in 2022.

Group revenue was down on the back of lower selling prices and sales volumes as a result of softer market demand and the impact of customer destocking, which abated over the course of the year.

"Mondi delivered a resilient performance in 2023 as a result of our compelling customer service and delivery, supported by our scale, quality asset base, integrated model and breadth of products, customers and end-markets. While underlying Ebitda . . . was lower than the very strong performance in the prior year, our cash generation remained ahead of last year at €1.3-billion.

"This strong cash generation gives us the strategic flexibility to continue investing in our business through-cycle, supported by our confidence in the long-term structural growth of the markets we operate in and our leading positions within them. We continue to make good progress in delivering our organic growth projects, which remain on track and on budget. We expect these projects to deliver a meaningful Ebitda contribution from 2025,” says CEO Andrew King.

The company says it is making good progress on its €1.2-billion of approved investments in organic growth projects, which remain on track and on budget.

These projects are diversified across the company’s value chain, products and geographic reach and comprise €600-million of investments in Corrugated Packaging and €600-million of investments in Flexible Packaging.

In corrugated packaging, most of these projects are at, or close to, start-up, including investments at the company’s Kuopio mill, in Finland; the Świecie mill, in Poland; and the Polish corrugated solutions plants.

Moreover, the company’s Duino mill, in Italy, is expected to start up in 2025 as planned. In Flexible Packaging, the company continues to make progress on its pipeline, with most projects, including the new paper machine at Štětí, in Czech Republic, expected to ramp up from 2025.

The company anticipates its projects to take two to three years to achieve full production following their commissioning, delivering mid-teen returns through-cycle when fully operational.

Additionally, at the end of 2023, Mondi started up the €125-million investment project at its Kuopio mill. This project will increase semi-chemical fluting capacity by 55 000 t when fully ramped up, enhance product quality, drive cost competitiveness, and strengthen the mill’s environmental performance.

The company also has several other capital investment projects that are expected to start up during this year

These projects include the €95-million debottlenecking project at Świecie, which will increase capacity by 55 000 t/y when fully ramped up, together with expansion projects at its Simet and Warsaw corrugated solutions plants in Poland that will support growth and enhance product and service offering.

The company’s €200-million investment at Duino to convert the existing paper machine into a high-quality, cost-competitive recycled containerboard machine with a yearly capacity of 420 000 t is ongoing.

“We continue to invest across our platform. We are making good progress with our €400-million investment in a new 210 000 t/y kraft paper machine at Štětí with start-up expected in 2025 and ramp up to 2027, together with a number of investments across our converting plant network which remain on track and on budget,” the company says.

These projects include expanding and upgrading the global reach of the company’s paper bag network, investments to consolidate its leading position in European pet food packaging, and projects to enhance its European coating capabilities.

Capital expenditure (capex) for 2023 was in line with expectations, at €830-million, as a result of investing in organic growth projects directed towards growing the packaging businesses.

The company expects its total capex for this year to be between €800-million and €900-million as it continues to invest in organic growth projects. Thereafter, in the absence of further significant organic growth opportunities, the company expects capex to trend towards depreciation levels following the completion of its current approved projects.

"We remain well positioned to capitalise as demand improves with our strong operational leverage and organic growth investment projects,” says King.

Meanwhile, with the completion of the disposal of its Russian packaging converting operations and its Syktyvkar mill on June 30, 2023, and October 4, 2023, respectively, Mondi has concluded its exit from Russia, with the net proceeds from the sale of its Russian assets distributed to shareholders on February 13 by way of a special dividend.

The net proceeds, comprising total proceeds of €806-million, less the associated transaction and other costs, were distributed to shareholders by way of a special dividend of €1.60 a share.

Following the approval of the special dividend in early 2024, and in order to maintain comparability of Mondi’s share price before and after payment so far as possible, the group completed a share consolidation on January 29 whereby shareholders received ten new ordinary shares for every 11 existing ordinary shares held.