Mondi saw another solid performance for the year ended December 2016, pushing underlying operating profit up 3% to €981m. Cash generated from operations of €1.4m rose 10%.
This reflected the international packaging and paper group’s €800m pipeline of expansionary capital investment. Completed major projects contributed €50m to underlying operating profit in 2016.
“Our strategy is all about growth in packaging paper and converted products,” departing CEO David Hathorn said on Thursday.
Peter Oswald, an executive director and CEO of the Europe and international division since 2008, will take over the reins at Mondi’s annual general meeting in May.
Hathorn highlighted a 20.3% return on capital employed for the year, slightly down from 20.5% in 2015.
This had steadily risen from 13.6% in 2012, as capital projects delivered growth. The group had made four acquisitions totalling €185m in the year.
This had enhanced its product offering and geographic reach in corrugated and consumer packaging, it said.
Kagiso Asset Management associate portfolio manager Dirk van Vlaanderen said much of Mondi’s growth had come from investing in optimising its manufacturing capacity, ensuring cost competitiveness.
“These cost savings have more than offset significant headwinds in the price of paper in Europe along with fairly benign industry growth,” he said. Van Vlaanderen added 2016 was a tough year for pricing in most categories and Mondi had done well to increase profits, and this would provide a boost to growth in the year ahead.
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