Packaging and paper group Mondi had a challenging this quarter and has reorganised its business units to facilitate a more streamlined organisation.
“Trading conditions in the third quarter were challenging, with softer volumes and declining prices across most pulp and paper grades,” CEO Andrew King said in a statement on Monday.
The group reported underlying earnings before interest, tax, depreciation and amortisation (ebitda) of €223m, including €20m of forestry fair value gain, in the quarter ended September.
Volumes were affected by subdued demand, and paper selling prices declined during the quarter. To mitigate the effects of the softer markets, Mondi proactively extended certain scheduled annual maintenance shuts.
Underlying ebitda was lower than the second quarter in both its corrugated and flexible packaging businesses as a result of lower sales volumes and the impact of planned maintenance shuts in the upstream pulp and paper businesses.
Selling prices declined during the period, largely reversing the increases implemented during the first half of 2025.
“Our packaging converting businesses delivered a stable performance compared to the second quarter. Uncoated fine paper performance was significantly impacted by lower sales volumes due to weak demand and intense competition, planned maintenance shuts and declining selling prices for uncoated fine paper and pulp,” it said.
Mondi said the integration of the Schumacher business, is progressing well.
Mondi completed the acquisition of the Western Europe packaging assets of Schumacher Packaging in April. The acquisition significantly strengthened the group’s corrugated packaging business, extended its footprint in Western Europe and offered strong vertical integration opportunities.
“We remain confident in the opportunities arising from the broader geographic reach, vertical integration and synergy benefits,” it said.
In the six months since completion, Mondi focused on integrating the business while driving the commercial strategy, and have identified an additional €10m cost synergies, taking the total to €32m, to be realised over the three years from completion.
With effect from October 1, the group has been organised into two business units — corrugated packaging and flexible packaging.
Uncoated fine paper has been combined with corrugated packaging to form an enlarged corrugated packaging business unit. Flexible packaging remains unchanged.
“These changes will facilitate a more streamlined organisation supporting faster decision making, cost takeout and delivery of operational synergies across our pulp and paper mills, while retaining our customer focused value chain orientation,” it said.
After a period of investment, Mondi is reaching the end of its current investment cycle with all major capacity expansion projects built on time, on budget and operational.
“Our focus is now on achieving full productivity ramp-up, executing our commercial strategy, driving cash generation and delivering returns,” it said.
Current profitability from these projects is heavily influenced by prevailing market conditions and, as such, it is now expected the net incremental contribution to ebitda in 2025 will be around €30m.
“We remain confident that our expansionary projects are cost competitive, deliver significant integration benefits and, once fully optimised, will deliver mid-teen returns on a through cycle basis,” it said.
Mondi added that good progress has been made with the feasibility study to build a new sack kraft paper machine at its pulp mill in Hinton (Canada). While this project remains strategically attractive, the group has taken the decision to delay the investment due to the current market environment.
“We retain full optionality to invest and are well positioned to accelerate when favourable conditions return.”
King said across the group there had been a focus on managing the controllables.
“We have sharpened our emphasis on margin management, rigorous cost optimisation and continuous improvement. These initiatives enable us to navigate current headwinds, build a stronger, more efficient operating platform and drive free cash flow. This will protect value today and deliver enhanced returns when market conditions improve,” he said.
Mondi said it expected the challenging trading conditions to persist for the remainder of the year as demand-side confidence remained fragile, key markets remained in oversupply and current selling prices were lower than third quarter average selling prices.
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