David Hathorn, Mondi Group chief executive, said:
“I am pleased to report a record financial performance, driven by our low cost position, exposure to higher growth markets and ongoing focus on operational excellence. While growth in demand for the Group’s key products has remained generally subdued, supply-side constraint has been supportive of pricing.
It is particularly pleasing to see how well the integration of the businesses acquired in late 2012 has gone, with synergies delivered in line with target. Despite a difficult trading environment, the new business segment of Consumer Packaging has demonstrated its resilience. With order books strengthening in the new year and the structural growth dynamics still very much in place, we remain confident in the future development of this business.
A further priority in 2013 was the successful development of the various capital expenditure projects initiated over the past two years. It is again pleasing to report that a number of these were delivered during the year, all within budget. The projects that are still in progress remain within budget and on target for their scheduled completion dates over the coming two years.
The trading environment in the Group’s main markets remains mixed. The increase in the price of recycled containerboard in the second half of 2013 on solid demand growth is encouraging, and should lend support to our other key containerboard grades. However, price pressure in most virgin paper grades in the second half of 2013 means that we start the new year with lower pricing than the average for 2013. The near-term outlook for pricing is largely dependent on the strength of the European macroeconomic recovery. In this regard it is encouraging to see a recent pick-up in orders in some of our main product segments and we are in discussions with customers on price increases in certain virgin packaging grades.
Recent exchange rate volatility in several of the emerging markets in which we operate does create its challenges. However, the Group’s positioning as a net exporter from most of these markets typically allows us to benefit from the devaluation of these currencies relative to the euro.
We are confident that the ongoing capital investment programme will contribute meaningfully to our performance going forward. Our proven ability to generate strong cash flow through the cycle provides valuable optionality. As such, we remain confident in the Group’s ability to continue delivering industry-leading performance.”