Mondi Group Integrated Report and Financial Statements 2015 Welcome

Mondi Group Mondi Integrated report and financial statements 2015 Mondi Group Integrated report and financial statements 2015 Welcome We are Mondi: IN TOUCH EVERY DAY At Mondi, our products protect and preserve the things that matter. We offer over 100 packaging and paper products, customised into more than 100,000 different solutions for customers, consumers and industrial end users – touching the lives of millions of people every day. And we’re determined to deliver the highest quality in everything we do, from managing forests and producing pulp, paper and compound plastics, to developing effective and innovative industrial and consumer packaging solutions. We work closely with our customers and other strategic partners to develop cutting edge solutions; while also prioritising the sustainable management of our resources. We are committed to delivering value to our stakeholders. This integrated report provides an overview of how our strategy, governance, people and performance combine to generate this value in a sustainable way. Front cover: Polywoven material from our Consumer Goods Packaging business. Strong, durable, tear-resistant and recyclable – ideal for packaging products such as pet food, fertiliser, seeds, flour, sugar and rice. Mondi Group Integrated report and financial statements 2015 Our 2015 performance Contents Underlying operating profit Underlying earnings per share Overview € million euro cents 2 – 11 euro €957m 133.7 cents Dividend per share Return on capital employed euro cents % euro 52 cents 20.5% • Significant profit improvements across Strategic report all business units 12 – 69 • Completed major projects delivering to plan: contributing incremental €50 million to underlying operating profit in 2015 • Strong capital investment pipeline: €450 million in major projects approved and in progress • Considerable progress made against our five-year sustainable development commitments Governance 70 – 133 Scope Materiality statements Financial Mondi’s Integrated report and financial statements Mondi’s Integrated report and financial statements 134 – 216 2015 is our primary report to shareholders. 2015 aims to provide a fair, balanced and The scope of this report covers the Group’s main understandable assessment of our business model, business and operations and provides an overview strategy, performance and prospects in relation of the performance of the Group for the year ended to material financial, economic, social, environmental 31 December 2015. and governance issues. All significant items are reported on a like-for-like basis. The material focus areas were determined considering the following: Our integrated report is prepared in accordance with • Specific quantitative and qualitative criteria the requirements of both the Listings Requirements of the JSE Limited and the Disclosure and • Matters critical in relation to achieving Transparency and Listing Rules of the United Kingdom our strategic objectives Listing Authority. • Key risks identified through our risk management process We also prepare a detailed sustainable development report, in accordance with the GRI G4 core • Feedback from key stakeholders during requirements, and externally assured, which is the course of the year available at www.mondigroup.com/sd15 Mondi Group Integrated report and financial statements 2015 1 Contents Overview Who we are 4 Where we operate 6 Our products 8 Strategic report Joint chairmen’s statement 14 Our key performance indicators 18 Chief executive’s review 20 Chief financial officer’s review 26 Our business model 32 Our strategy 34 Our external context 36 Our principal risks 38 Sustainability at Mondi 44 Business reviews 52 Governance Introduction from joint chairmen 72 Board of directors 74 Corporate governance report 76 DLC nominations committee 88 DLC audit committee 92 DLC sustainable development committee 106 Mondi Limited social and ethics committee 108 DLC executive committee 110 Remuneration report 115 Other statutory information 132 Financial statements Directors’ responsibility statement 137 Independent auditors’ reports 138 Financial statements 146 Group financial record 206 Production statistics 208 Exchange rates 208 Additional information for Mondi plc shareholders 209 Shareholder information 212 Glossary of terms IBC For more information www.mondigroup.com Overview Mondi is a leading integrated packaging and paper Group with operations across more than 30 countries, offering over 100,000 solutions to our customers. Who we are 4 Where we operate 6 Our products 8 2 Mondi Group Integrated report and financial statements 2015 Overview Strategic report Strategic Governance Financial statements Financial Mondi Group Integrated report and financial statements 2015 3 Who we are Integrated packaging and paper Group Mondi is an integrated packaging and paper Group with a dual listed company structure – primary listing on the JSE Limited for Mondi Limited and premium listing on the London Stock Exchange for Mondi plc. Group structure Business unit % of Group revenue Return on capital employed Products Packaging Paper • Containerboard Europe & • Sack kraft paper International Division 29% 25.5% • Speciality kraft paper Read more on pages 52 to 55 • Pulp Fibre Packaging • Corrugated packaging Europe & • Industrial bags International Division 27% 13.9% • Extrusion coatings Read more on pages 56 to 58 Consumer Packaging • Advanced materials Europe & • Consumer goods International Division 19% 10.7% packaging Read more on pages 59 to 61 Uncoated Fine Paper • Uncoated fine paper Europe & • Pulp International Division 16% 25.6% Read more on pages 62 to 65 South Africa Division • Pulp Read more on pages 66 to 69 • Uncoated fine paper 9% 30.1% • White-top kraftliner 4 Mondi Group Integrated report and financial statements 2015 What we do Overview Mondi is integrated across the packaging and paper value chain – from managing forests and producing pulp, paper and compound plastics, to developing effective and innovative industrial and consumer packaging solutions. Culture and values With around 25,000 employees and operations across more than 30 countries, our people and our culture really matter. We’re connected, guided and inspired by our culture and values. Our people are dynamic, entrepreneurial and empowered, with a real passion for performance. We show we care by being respectful and responsible. We act with integrity, encouraging honesty and transparency in all that we do. Our approach to sustainability Read more about our approach For us, sustainable development makes good business sense and is part of the way to sustainable development on we work every day. We have a clear approach to sustainable development, which report Strategic pages 44 to 51 links our material issues to a comprehensive set of commitments, against which we measure our progress. Our future relies on the responsible stewardship of the natural resources we need to source, manufacture and market our products. That’s why we believe in engaging proactively and collaborating with key stakeholders on global issues and their local consequences. We play our part by creating value in our communities, looking for ways to achieve more from less, increasing resource and process efficiencies and communicating the value of the sustainable product solutions we offer. We have been included in the FTSE4Good Index Series since 2008 and the JSE’s Socially Responsible Investment (SRI) Index since 2007. Our customers and the industries we work in Read more about our products on Many of our customers are leaders in their industries and their products are household pages 8 to 11 names around the world. Governanc Our innovative technologies and products can be found in a variety of applications including hygiene components, stand-up pouches, super-strong cement bags, clever retail boxes and office paper. e Our key customers are in industries such as automotive; building and construction; chemicals; food and beverage; home and personal care; medical and pharmaceutical; packaging and paper converting; pet care; and office and professional printing. Market positions #1 #1 #2 Kraft paper and Industrial bags Virgin containerboard industrial bags producer in producer in Europe producer in Europe North America Financial #1 #3 #1 Containerboard Corrugated Commercial release producer in packaging producer liner producer in Europe statements emerging Europe in emerging Europe #1 #2 #1 Uncoated fine paper Extrusion coatings Hardwood pulp, white- producer in Europe producer in Europe top kraftliner and uncoated fine paper producer in South Africa Mondi Group Integrated report and financial statements 2015 5 Where we operate Our global presence Mondi has around 100 production sites across more than 30 countries, with key operations located in central Europe, Russia, North America and South Africa. North America Africa Corporate offices Johannesburg London South Vienna America Production sites Austria Jordan South Africa Belgium Lebanon South Korea Bulgaria Malaysia Spain China Mexico Sweden Czech Republic Morocco Thailand France Netherlands Turkey Germany Oman Ukraine Greece Poland UK Hungary Russia USA Iraq Serbia Italy Slovakia 6 Overview Europe Strategic report Strategic Asia Governanc e Revenue by location of production % €6,819m Emerging Mature Emerging Europe Financial 31% North America Australasia 10% statements Russia 10% Western Europe 38% Other 1% South Africa 10% Key Packaging paper Consumer packaging Pulp Fibre packaging Uncoated fine paper Forestry Mondi Group

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