Update on Russian business activities
Background
As a global leader in packaging and paper, Mondi operates across more than 30 countries, generating revenues of €7.7 billion and underlying EBITDA of €1.5 billion in 2021.
As previously announced, Mondi’s operations in Russia represented c. 12% of the Group’s revenue by location of production in 2021 and, over the last three years, generated c. 20% of the Group’s underlying EBITDA. Mondi has operated in Russia for over 22 years.
The most significant facility is a wholly owned integrated pulp, packaging paper and uncoated fine paper mill located in Syktyvkar (Komi Republic). The Group also has three converting plants in Russia. All these facilities primarily serve the domestic market and have continued to operate through this time of heightened geopolitical tension. Mondi employs c. 5,300 people in these operations.
In Ukraine, Mondi has one paper bag plant located in Lviv, west of the country, employing c. 100 people. Production is currently suspended.
Situation update
The Syktyvkar mill, which does not receive any direct funding from Mondi, operates an integrated power plant providing a portion of the Komi Republic’s energy demand, and is the primary source of heat and warm water for the Ezhva district of Syktyvkar, which has a population of c. 60,000 people. It also provides other local community services such as waste water treatment. The mill is legally required by the Russian authorities to provide the energy supply.
Syktyvkar is currently operating, but the mill is starting to see a number of operational constraints, including in the importing of process chemicals, spare parts and other critical supplies. While difficult to assess the ramifications in what remains a fast-moving situation, this may significantly impact the operation of the mill.
Assessing options for Russian operations
Mondi is profoundly concerned about the crisis unfolding in Ukraine and is shocked by the humanitarian impact. We express our deepest sympathy to all those impacted by the ongoing hostilities, adding our voice to those calling for an urgent cessation.
Recognising its corporate values and broader stakeholder responsibilities, the Board is assessing all options for the Group’s interests in Russia, including any form of legal separation. This does not mean, or imply, that Mondi is planning, or initiating, any liquidation or bankruptcy proceedings in relation to any of its Russian subsidiaries or assets.
Support to humanitarian relief effort
In addition to the direct support the Group is providing to colleagues in Ukraine, Mondi has recently pledged €1 million to support the United Nations World Food Programme’s emergency operation to provide food assistance for people impacted by the conflict.
Enquiries
Investors/analysts:
Clara Valera
Mondi Group Head of Strategy and Investor Relations
+44 193 282 6357
Media:
Sara Sizer
Mondi Group Communication & Marketing Director
+44 193 282 6320
Richard Mountain (FTI Consulting)
+44 790 968 4466
About Mondi
Mondi is a global leader in packaging and paper, contributing to a better world by making innovative packaging and paper solutions that are sustainable by design. Our business is integrated across the value chain – from managing forests and producing pulp, paper and plastic films, to developing and manufacturing effective industrial and consumer packaging solutions. Sustainability is at the centre of our strategy and intrinsic in the way we do business. We lead the industry with our customer-centric approach, EcoSolutions, where we ask the right questions to find the most sustainable solution. In 2021, Mondi had revenues of €7.7 billion and underlying EBITDA of €1.5 billion.
Mondi has a premium listing on the London Stock Exchange (MNDI), and a secondary listing on the JSE Limited (MNP). Mondi is a FTSE 100 constituent, and has been included in the FTSE4Good Index Series since 2008 and the FTSE/JSE Responsible Investment Index Series since 2007.
Sponsor in South Africa: Merrill Lynch South Africa Proprietary Limited t/a BofA Securities.