MONDI PLC: Final Results

 28 February 2014  Mondi Limited  (Incorporated in the Republic of South Africa)  (Registration number: 1967/013038/06)  JSE share code: MND ISIN: ZAE000156550  Mondi plc  (Incorporated in England and Wales)  (Registered number: 6209386)  JSE share code: MNP ISIN: GB00B1CRLC47  LSE share code: MNDI  As part of the dual listed company structure, Mondi Limited and Mondi plc (together `Mondi Group') notify both the JSE Limited and the London Stock Exchange of matters required to be disclosed under the Listings Requirements of the JSE Limited and/or the Disclosure and Transparency and Listing Rules of the United Kingdom Listing Authority.  Full year results for the year ended 31 December 2013  Highlights  * Record financial performance          *        + Underlying operating profit of €699 million, up 22%               + Underlying earnings of 95 euro cents per share, up 37%               + ROCE of 15.3%, up 170 basis points         * 2012 packaging acquisitions integrated and synergies on track    * Strategic capital investments on track, with a number of projects completed    * Strong de-leveraging with net debt down by €251 million to €1,621  million          *        + Cash generated from operations exceeded €1 billion for the first time         * Total dividend proposed of 36 euro cents per share, up 29%  Financial Summary  € million, except for                 (Restated)                   (Restated)      percentages and per share                      4                            4      measures                                                                                                            Year ended Year ended        Six months Six months                                            31         31          ended 31   ended 31                                    December   December Change   December   December  Change                               2013       2012      %       2013       2012     %                                                                                 Group revenue                   6,476      5,790     12      3,134      2,971     5                                                                                 Underlying EBITDA1              1,068        927     15        514        490     5                                                                                 Underlying operating              699        574     22        333        302      10 profit1                                                                                                                                                                      Operating profit                  605        547     11        320        275      16                                                                                 Profit before tax                 499        368     36        270        146      85                                                                                 Per share measures                                                                                                                                                           Basic underlying earnings        95.0       69.2     37                            per share2 (€ cents)                                                                                                                                                         Basic earnings per share         79.8       50.1     59                            (€ cents)                                                                                                                                                                    Total dividend per share         36.0       28.0     29                            (€ cents)                                                                                                                                                                    Free cash flow per share2        64.1       52.7     22                            (€ cents)                                                                                                                                                                    Cash generated from             1,036        849     22                            operations                                                                                                                                                                   Net debt                        1,621      1,872                                                                                                                             Group return on capital         15.3%      13.6%                                   employed (ROCE)3                                                                  Notes:  1 The Group presents underlying EBITDA, operating profit and related per share information as measures which exclude special items in order to provide a more effective comparison of the underlying financial performance of the Group between financial reporting periods. A reconciliation of underlying operating profit to profit before tax is provided in note 3 of the condensed financial statements.  2 Free cash flow per share is the net increase in cash and cash equivalents before the effects of acquisitions and disposals of businesses, changes in net debt and dividends paid divided by the net number of shares in issue at year end.  3 ROCE is underlying profit expressed as a percentage of the average capital employed for the year, adjusted for impairments and spend on strategic projects which are not yet in operation.  4 The Group has restated comparative information following the adoption of revised IFRS standards. Full details of the restatements are set out in note 2b of the condensed financial statements.  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."  Contact details  Mondi Group                                                                                                                                              David Hathorn                               +27 11 994 5418                                                                                              Andrew King                                 +27 11 994 5415                                                                                              Lora Rossler                                +27 83 627 0292                                                                                              FTI Consulting                                                                                                                                           Richard Mountain / Sophie McMillan          +44 20 7269 7186 / +44 20 7909 684  466                                                                             Bheki Mpofu / Lerato Matsaneng              +27 88 552 2109 / +27 11 214 2407  Conference call dial-in and audio cast details  Please see below details of our dial-in conference call and audio cast that will be held at 09:00 (UK) and 11:00 (SA).  The conference call dial-in numbers are:  South Africa 0800 200 648 (toll-free)  UK 0808 162 4061 (toll-free)  Europe 00800 246 78 700 (toll-free)  Alternate +27 11 535 3600  An online audio cast facility will be available via: www.mondigroup.com/ FYResults13.  The presentation will be available online via the above website address an hour before the audio cast commences. Questions can be submitted via the dial-in conference call or by e-mail via the audio cast.  Should you have any issues on the day with accessing the dial-in conference call, please call +27 11 535 3600.   Should you have any issues on the day with accessing the audio cast, please e-mail mondi@kraftwerk.co.at and you will be contacted immediately.  An audio recording of the presentation will be available on Mondi's website during the afternoon of 28 February 2014.  Editors' notes  Mondi is an international packaging and paper Group, employing around 24,000 people in production facilities across 30 countries. In 2013, Mondi had revenues of €6.5 billion and a ROCE of 15.3%. The Group's key operations are located in central Europe, Russia, the Americas and South Africa.  The Mondi Group is fully integrated across the packaging and paper value chain - from the management of its own forests and the production of pulp and paper (packaging paper and uncoated fine paper), to the conversion of packaging paper into corrugated packaging, industrial bags, extrusion coatings and release liner. Mondi is also a supplier of innovative consumer packaging solutions, advanced films and hygiene products components.  Mondi has a dual listed company structure, with a primary listing on the JSE Limited for Mondi Limited under the ticker code MND and a premium listing on the London Stock Exchange for Mondi plc, under the ticker code MNDI. The Group's performance, and the responsible approach it takes to good business practice, has been recognised by its inclusion in the FTSE4Good Global, European and UK Index Series (since 2008) and the JSE's Socially Responsible Investment (SRI) Index since 2007.  Forward-looking statements  This document includes forward-looking statements. All statements other than statements of historical facts included herein, including, without limitation, those regarding Mondi's financial position, business strategy, market growth and developments, expectations of growth and profitability and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believe", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Mondi, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions and are based on numerous assumptions regarding Mondi's present and future business strategies and the environment in which Mondi will operate in the future. These forward-looking statements speak only as of the date on which they are made.  No assurance can be given that such future results will be achieved; various factors could cause actual future results, performance or events to differ materially from those described in these statements. Such factors include in particular but without any limitation: (1) operating factors, such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development plans and targets, changes in the degree of protection created by Mondi's patents and other intellectual property rights and the availability of capital on acceptable terms; (2) industry conditions, such as strength of product demand, intensity of competition, prevailing and future global market prices for Mondi's products and raw materials and the pricing pressures thereto, financial condition of the customers, suppliers and the competitors of Mondi and potential introduction of competing products and technologies by competitors; and (3) general economic conditions, such as rates of economic growth in Mondi's principal geographical markets or fluctuations of exchange rates and interest rates.  Mondi expressly disclaims a) any warranty or liability as to accuracy or completeness of the information provided herein; and b) any obligation or undertaking to review or confirm analysts' expectations or estimates or to update any forward-looking statements to reflect any change in Mondi's expectations or any events that occur or circumstances that arise after the date of making any forward-looking statements, unless required to do so by applicable law or any regulatory body applicable to Mondi, including the JSE Limited and the LSE.  Any reference to future financial performance included in this announcement has not been reviewed or reported on by the Group's auditors.  Overview  Mondi delivered a record financial performance in 2013, benefiting from a strong operating performance and the strategic acquisitions completed in the latter part of 2012.  Underlying operating profit of €699 million was up 22% on that achieved in 2012. Excluding the effects of acquisitions made in the prior year, underlying operating profit was still up 11%, driven by particularly strong performances from Packaging Paper and the South Africa Division.  Return on capital employed (ROCE), a key performance metric for the Group, was 15.3%, a record for the Group despite the dilutive effect of the acquisitions made in 2012. ROCE over the past three years, averaging 14.6%, has been consistently above the Group's through-the-cycle hurdle rate of 13%.  The focus over the last year has been on integrating and optimising the significant acquisitions made towards the end of 2012 and delivering the major capital projects initiated over the past two years. Excellent progress has been made in this regard, with synergy targets delivered, a number of the capital projects having been completed in the latter part of 2013, and the remaining projects on track for completion within budget and on schedule over the next two years.  The Packaging Paper business was the standout performer, benefiting from higher average pricing in all key grades and good volume growth. The downstream Fibre Packaging business was challenged by rising paper prices, but generally made good progress in recovering margins. The Uncoated Fine Paper business continued to deliver strong results despite the structural demand decline seen in mature western European markets, a testament to the business' superior cost and market positioning. The South Africa Division made very good progress during the year and is now delivering well in excess of the Group's 13% through-the-cycle hurdle rate.  The Group benefited from currency weakness in certain of the emerging markets in which it operates, most significantly in the South Africa Division from the rand's devaluation relative to the euro and US dollar.  The strong culture of continuous productivity improvement, relentless focus on cost management and the benefits of restructuring activities completed during the year ensured that fixed cost increases were contained to well below inflationary levels.  The Group remains strongly cash generative with net debt reducing to  €1,621 million, compared to €1,872 million at 31 December 2012,  notwithstanding the €405 million (2012:€294 million) invested in capital expenditure  projects during the year. Cash generated from operating activities exceeded €1 billion for the first time.  Underlying earnings of 95 euro cents per share grew 37% compared to 2012, with higher finance charges offset by a lower effective tax rate and reduced non-controlling interest charges.  We continue to refine our product and geographic mix in line with our strategic focus. Our emphasis is on growing our packaging interests, which currently account for around 70% of the Group's revenues, while at the same time continuing to invest appropriately to maintain and improve the competitiveness of our uncoated fine paper business. Within the broader packaging sphere, we see greater opportunities to develop those segments offering exposure to consumer related packaging. This includes both our Consumer Packaging business, and the corrugated packaging value chain. We continue to develop our presence in emerging markets, which offer us inherent cost and growth benefits, while recognising in some areas, most notably Consumer Packaging, that there are also opportunities to develop and leverage our competencies in mature markets. Overall, approximately 62% of the Group's net operating assets and 51% of revenue by destination are currently in emerging markets.  The Boards are recommending payment of a final dividend of 26.45 euro cents per share, bringing the total dividend for the year to 36 euro cents per share, an increase of 29% on 2012.  Europe & International - Packaging Paper  € million                                                  Six      Six                                             Year     Year           months   months                                     ended 31 ended 31         ended 31 ended 31                                     December December  Change December December  Change                                 2013     2012       %     2013     2012       %                                                                               Segment revenue                2,000    1,896       5      957      936       2                                                                              Underlying EBITDA                394      321      23      199      171      16                                                                              Underlying operating profit      298      227      31      150      123      22                                                                              Underlying operating profit    14.9%    12.0%            15.7%    13.1%         margin                                                                                                                                                       Capital expenditure              139       89               84       55                                                                                      Net segment assets             1,484    1,466                                                                                                                ROCE                           21.9%    17.9%                                    Packaging Paper benefited from positive trading conditions in all key paper grades and a strong operating performance, resulting in an underlying operating profit of €298 million, an increase of 31%, and ROCE of 21.9%.  The average benchmark selling price for recycled containerboard was 4% higher than the comparable prior year period, and by December was 14% up on the same stage in the prior year, with increases being implemented at various stages throughout the year. Price increases were driven by reasonable demand growth supported by limited net capacity additions, with new capacity brought on stream during the year largely offset by closures.  Selling prices for the virgin containerboard grades increased modestly over the first half of the year before coming under some pressure during the second half. At year-end benchmark selling prices were around 2% lower than the average levels during the year. The price weakness in the second half was seen as a reaction to increased substitution towards recycled grades due to the abnormally high price differential that developed between virgin and recycled containerboard grades, competition from imports due to the weaker US dollar and an increase in supply as producers converted production from less profitable grades. The price differential has now reduced to levels towards the lower half of the historic trading range, typically seen as supportive of virgin containerboard pricing. With improving demand seen in early 2014, discussions are underway with customers around price increases in unbleached kraftliner grades.  Kraft paper prices were relatively stable for much of the year while volumes were up on the prior year, supported by stable European markets and strong gains in export markets. As anticipated, there was some price erosion seen towards the end of the fourth quarter and into early 2014 on the back of seasonally weaker demand in Europe and increased competition in key export markets. By the end of the year, average selling prices had declined by around 9% from their highs in mid-2013. It is, however, encouraging to note a recent pick-up in orders. Sack kraft paper price increases are currently under discussion with customers.  The uncertain regulatory environment surrounding renewable energy in Poland led to a significant decline in market prices for green energy in the first quarter of the year. As a consequence, the Group recognised an €11 million write down in the value of its existing green energy credits in the first quarter. The lower market prices prevailed throughout the year and income from the sale of green energy credits in the Packaging Paper business was €17 million lower  than in 2012 (excluding the impact of the one-off write-down).  Input costs were well contained. The cost of paper for recycling was relatively stable throughout the year following a sharp drop in prices seen in the second half of 2012, although there was some regional pressure in Poland following the start-up of new competitor capacity. The average benchmark price was approximately 7% lower than in 2012. Wood costs in central Europe were generally well contained.  Following the acquisitions, in Fibre Packaging, of the Duropack corrugated packaging plants in the latter part of 2012, Packaging Paper benefited from the realisation of supply chain synergies.  A strong operating performance and significant productivity improvements, most notably in Syktyvkar, ensured that increases in fixed costs were contained well within inflation.  Europe & International - Fibre Packaging  € million                                                 Six      Six                                           Year     Year          months   months                                    ended 31 ended 31        ended 31 ended 31                                    December December Change December December Change                                 2013     2012      %     2013     2012      %                                                                             Segment revenue                1,967    1,860      6      965      914      6                                                                            Underlying EBITDA                163      168    (3)       80       88    (9)                                                                            Underlying operating profit       93      101    (8)       45       54   (17)                                                                            Underlying operating profit     4.7%     5.4%            4.7%     5.9%        margin                                                                                                                                                   Special items                    (3)     (16)             (3)     (16)                                                                                   Capital expenditure               78       76              43       48                                                                                   Net segment assets               903      958                                                                                                            ROCE                           10.8%    12.5%                                  Underlying operating profit declined by 8% to €93 million as the business was impacted by rising input costs, adverse currency movements and market and operational challenges in the coatings segment.  Corrugated packaging benefited from higher sales volumes and higher prices, although margins were squeezed by the lag in passing on increasing paper input costs to customers, currency effects and aggressive competitor activity in certain markets. The business benefited from the successful integration of the acquisitions of the Duropack corrugated plants in Germany and the Czech Republic in the latter part of 2012.  Industrial bags continued to deliver solid results. Selling prices and paper input costs were at similar levels to 2012, while the business realised the benefits of its restructuring activities, mainly in western Europe, with fixed costs reducing significantly compared to 2012. Sales volumes increased with good demand in Russia and the CIS as well as in Africa, Middle East and north and central America. Sales volumes in Europe were marginally down on the previous year. The weaker export currencies relative to the euro had a negative impact on margins.  The coatings business experienced volume declines and margin pressures, mainly due to weak demand in the industrial and automotive markets and increased competitor activity in the main European markets.  Europe & International - Consumer Packaging  € million                                                                                                          Year     Year      Six months Six months                                   ended 31 ended 31        ended 31   ended 31                                   December December        December   December                                       2013     2012            2013       2012                                                                                   Segment revenue                 1,153      502             571        352                                                                                  Underlying EBITDA                 129       45              63         30                                                                                  Underlying operating profit        74       19              35          9                                                                                  Underlying operating profit      6.4%     3.8%            6.1%       2.6%      margin                                                                                                                                                     Special items                    (13)     (11)               -       (11)                                                                                  Capital expenditure                56       28              32         21                                                                                  Net segment assets                855      872                                                                                                             ROCE - adjusted                  9.1%    10.8%                                  ROCE for 2012 has been adjusted to exclude one-off costs related to the acquisition of Nordenia.  The benefits of the acquisition of Nordenia in October 2012 are reflected in the increase in underlying operating profit of €55 million to €74 million.  On a pro-forma basis, assuming Nordenia was acquired at the beginning of 2012, and excluding the effects of acquisition accounting, the underlying operating profit of the combined business was in line with the prior year, with synergy gains offset by a weaker trading performance, the impact of some one-off costs, and higher fixed costs.  Synergies related to the Nordenia acquisition of €16 million were realised during the year, well on track to achieve the targeted €20 million in 2014. One-off costs of €5 million were incurred in achieving these synergies.  Sales volumes in the commoditised segments of the films business were lower than the previous year. With focus on higher value added products, it is pleasing to see volumes for fully converted packaging products held up well, up 2%, with good performances from the emerging European and north American operations. It is encouraging to note a pick-up in order intake in early 2014 following a weak finish to 2013.  An increase in fixed costs, excluding synergy effects, due in part to costs incurred on new product launches and a new plant start-up further impacted the underlying result.  The closure of the Lindlar operation and redirection of production to existing Consumer Packaging facilities in Germany and Hungary and to the Fibre Packaging business in the Czech Republic was completed.  Europe & International - Uncoated Fine Paper  € million                                                 Six      Six                                           Year     Year          months   months                                    ended 31 ended 31        ended 31 ended 31                                    December December Change December December Change                                 2013     2012      %     2013     2012      %                                                                             Segment revenue                1,388    1,466    (5)      648      717   (10)                                                                            Underlying EBITDA                277      300    (8)      120      146   (18)                                                                            Underlying operating profit      172      191   (10)       70       91   (23)                                                                            Underlying operating profit    12.4%    13.0%           10.8%    12.7%        margin                                                                                                                                                   Special items                   (60)        -            (10)        -                                                                                   Capital expenditure               80       58              44       34                                                                                   Net segment assets             1,135    1,248                                                                                                            ROCE                           16.2%    16.7%                                  Uncoated Fine Paper continued to deliver robust results, with underlying operating profit of €172 million and a ROCE of 16.2%.  Sales volumes in uncoated fine paper were around 1.5% down on the prior year, reflecting mainly the effects of the decision to restructure the Neusiedler mill. In May 2013, Mondi announced plans to restructure the non-integrated Neusiedler operation to improve the competitiveness of the mill. The restructuring was successfully completed and the mill is now focused on production of speciality paper grades enjoying higher margins.  Selling prices were largely unchanged in the first part of the year compared to the levels at the end of 2012, but decreased in the second half in the face of continuing weak demand and the introduction of additional capacity from industry competitors in an already oversupplied market. Average benchmark selling prices for uncoated fine paper were around 2% lower than the prior year, while prices at the year-end were around 1% below the average for the year.  Input costs increased, with higher wood costs in Ruzomberok, higher pulp input costs at the unintegrated Neusiedler mill in Austria and higher gas and transportation costs in Syktyvkar. In Syktyvkar, wood costs reduced as a result of a number of cost reduction initiatives. On average, own wood costs in Syktyvkar have decreased by more than 10% from 2012 average costs.  Profit improvement initiatives and productivity improvements more than offset inflationary fixed cost increases, enabling the business to realise a net reduction in fixed costs compared to 2012.  South Africa Division                               (Restated)                    (Restated)                                                                                         € million                                                                                                   Year ended Year ended         Six months Six months                                        31         31           ended 31   ended 31                                December   December  Change   December   December   Change                          2013       2012       %       2013       2012        %                                                                                Segment revenue              624        702    (11)        299        354     (16)                                                                                Underlying EBITDA            135        125       8         68         69      (1)                                                                                Underlying operating          93         69      35         49         40       23 profit                                                                                                                                                            Underlying operating       14.9%       9.8%              16.4%      11.3%         profit margin                                                                                                                                                     Special items               (11)          6                  7          -                                                                                         Capital expenditure           52         43                 38         26                                                                                         Net segment assets           622        821                                                                                                                       ROCE                       16.0%       9.6%                                       The South Africa Division delivered a very strong performance. Underlying operating profit was €93 million, an increase of 35%, and ROCE was 16.0%, despite net fair value gains from the revaluation of the Division's forestry assets being around €23 million lower than those realised in the prior year.  The business benefited from higher domestic selling prices, good domestic containerboard volume growth, and improved export margins due to the weaker South African rand coupled with higher average export pulp prices.  In May 2013, the closure of one of the two newsprint machines located in Merebank was announced as a result of the continued decline in demand for newsprint in South Africa. The machine stopped production with effect from 1 July 2013.  The South African rand came under significant pressure during the year, closing the year more than 30% weaker against the euro than in December 2012. The Division generates approximately 40% of its revenue from exports, with a predominantly rand cost base and thus benefited from the weakening currency.  The Division has continued to invest in the modernisation of its forestry operations, with a focus on silviculture and harvesting in the current year. The benefits of these investments, further productivity improvements and strong cost management ensured that fixed costs were contained to well within inflationary levels.  Tax  The Group's underlying effective tax rate of 17% is below that of the prior year, and reflects a favourable underlying profit mix, the continued benefits arising from the utilisation of certain tax incentives available to the Group, most notably in Poland, and further tax incentives received during the year related to the recovery boiler investment project in Slovakia.  Non-controlling interests  The non-controlling interest charge of €28 million is €7 million lower than  the previous year, primarily due to the impact of the acquisition of the remaining minority interest in Mondi Swiecie during the first half of 2012.  Special items  Special items are those items of financial performance that the Group believes should be separately disclosed to assist in the understanding of the underlying financial performance achieved by the Group and its businesses. These items are considered to be material either in nature or in amount.  The net special item charge of €87 million before tax, the cash component of which amounted to €20 million, included the following:  * Closure of Consumer Packaging's Lindlar operation in Germany (€13  million);          * Closure of the Newsprint machine in Merebank, South Africa and related     restructuring activities (€18 million);       * Impairment of Uncoated Fine Paper's Neusiedler mill in Austria and related     restructuring costs (€51 million);       * Write-down of unutilised assets in Uncoated Fine Paper's Syktyvkar mill in     Russia (€9 million);       * Gain from the sale of land in South Africa Division (€7 million); and       * Further restructuring and impairment costs in the Industrial Bags segment     of Fibre Packaging in France and Mexico (€3 million).     Further detail is provided in note 5 of the condensed financial statements.  After taking special items into consideration, earnings of €386 million (79.8 euro cents per share) were 59% higher than the previous year (€242 million, 50.1 euro cents per share).  Cash flow  The Group is strongly cash generative with EBITDA of €1,068 million,  reflecting an increase of 15% compared to the prior year. The Group generated  €1,036 million of cash from operations (2012: €849 million) after taking  into account a net increase in working capital of €27 million. Working capital as  a percentage of revenue was 11%, in line with the target of 10-12% of turnover, and represents a reduction on the prior year comparable figure of 11.9% (adjusted for acquisitions).  The strong cash flow generation was applied to fund the Group's capital expenditure of €405 million, the payment of finance charges of €124  million, and the payment of dividends to holders of non-controlling interests of  €60 million and to shareholders of €138 million. The net cash flow  generated by the Group of €174 million was applied to reduce the Group's net debt.  Capital investments  Capital expenditure of €405 million was €111 million higher than the prior  year as expenditure on a number of the Group's previously announced energy and debottlenecking investments ramped up. The capital expenditure to depreciation ratio was 113%.  The major strategic investments initiated over the past two years and completed during 2013 include the rebuild of the bark boiler at the Syktyvkar uncoated fine paper and containerboard mill in Russia, a new recovery boiler at the Group's Frantschach kraft paper mill in Austria, a recovery boiler economiser and turbine at the Stambolijski kraft paper mill in Bulgaria and a new steam turbine at the Richards Bay pulp and containerboard mill in South Africa. With the exception of the bark boiler, completed in the first half of 2013, these projects were completed in the second half of the year, with the benefits of reduced energy costs, improved efficiencies and improved electricity self-sufficiency expected to be realised from 2014 onwards. In total, approximately €140 million has been invested in these, and other smaller  energy related projects.  Early in 2013, the construction of a 150,000 tonne bleached kraft paper machine at the Steti kraft paper mill in the Czech Republic was approved. This will enable the mill to integrate its remaining open market pulp production on site, providing further growth opportunities for this business. The €70 million project is expected to be completed in the first half of 2014.  Good progress is being made on the €30 million investment in a 100,000 tonne pulp dryer in the Syktyvkar mill and the project is on schedule for completion in the second half of 2014.  In the first half of the year, a €128 million project to replace the recovery boiler at the Ruzomberok uncoated fine paper mill in Slovakia commenced. Completion is scheduled towards the end of 2014. The project will reduce the mill's environmental footprint and improve its overall cost position. Some of the benefits from this project also result from avoiding otherwise essential stay-in-business capital expenditure.  In the second half of the year, the Boards approved a €166 million investment at the Mondi Swiecie containerboard mill in Poland, bringing forward the planned replacement of the recovery boiler and the mill's coal fired boilers. The investment will result in a reduction of ongoing maintenance costs, an improvement in overall energy efficiency and a reduction in CO2e emissions. The project is expected to be completed towards the end of 2015.  These investments are all proceeding according to schedule.  As a consequence of the major capital projects approved during 2013, coupled with some delay in the expected spend on previously approved projects, capital expenditure is expected to increase to around €500 million per annum, on average, over the next two years.  Treasury and borrowings  Net debt at 31 December of €1,621 million decreased by €251 million from 31 December 2012 as a consequence of the Group's strong cash flow generation and currency effects. The weakening of a number of the emerging market currencies in which the Group's debt is denominated resulted in a net currency gain of  €59 million being recorded.  Gearing reduced to 36.3% at the end of 2013, down from 39.5% at the end of 2012. The net debt to 12 month trailing EBITDA ratio was 1.5 times, well within the Group's key financial covenant requirement of 3.5 times.  Finance charges of €115 million were €5 million higher than the previous  year, with higher average net debt as a consequence of the acquisitions made at the end of 2012 offset by a lower effective interest rate.  Mondi's public credit ratings, first issued in March 2010, were again reaffirmed during the year at BBB- (Standard and Poor's) and Baa3 (Moody's Investors Service).  The Group actively manages its liquidity risk by ensuring it maintains diversified sources of funding and debt maturities. The weighted average maturity of the Eurobonds and committed debt facilities was 3.7 years at 31 December 2013. At the end of the year €792 million of the Group's  €2.5 billion committed debt facilities remained undrawn.  Dividend  The Boards' aim is to offer shareholders long-term dividend growth within a targeted dividend cover range of two to three times over the business cycle. Given the Group's strong financial position and the Boards' stated objective to increase distributions to shareholders through the ordinary dividend, the Boards have recommended an increase in the final dividend.  The Boards of Mondi Limited and Mondi plc have recommended a final dividend of 26.45 euro cents per share (2012: 19.1 euro cents per share), payable on 22 May 2014 to shareholders on the register on 25 April 2014. Together with the interim dividend of 9.55 euro cents per share, paid on 17 September 2013, this amounts to a total dividend for the year of 36.0 euro cents per share. In 2012, the total dividend for the year was 28.0 euro cents per share. The final dividend is subject to the approval of the shareholders of Mondi Limited and Mondi plc at the respective annual general meetings scheduled for 14 May 2014.  Outlook  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 the other key containerboard grades. However, price pressure in most virgin paper grades in the second half of 2013 means that the new year started 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 the Group's main product segments and discussions are underway with customers on price increases in certain virgin packaging grades.  Recent exchange rate volatility in several of the emerging markets in which the Group operates does create some challenges. However, the Group's positioning as a net exporter from most of these markets typically allows it to benefit from the devaluation of these currencies relative to the euro.  The Group is confident that its ongoing capital investment programme will contribute meaningfully to Mondi's performance going forward. Mondi's proven ability to generate strong cash flows through the cycle provides valuable optionality. As such, the Group remains confident in its ability to continue delivering industry-leading performance.  Principal risks and uncertainties  It is in the nature of Mondi's business that the Group is exposed to risks and uncertainties which may have an impact on future performance and financial results, as well as on its ability to meet certain social and environmental objectives.  The executive committee, mandated by the Boards, has established a Group-wide system of internal control to manage Group risks. The Group-wide system, which complies with corporate governance codes in South Africa and the UK, supports the Boards in discharging their responsibility for ensuring that the wide range of risks associated with Mondi's diverse international operations is effectively managed.  Continuous monitoring of risk and control processes across all key risk areas provides the basis for regular reports to management, the executive committee and the Boards. On an annual basis, the executive committee, the audit committee and the Boards conduct a formal systematic review of the Group's most significant risks and uncertainties and the monitoring of and response to those risks. These risks are assessed against pre-determined risk tolerance limits, established by the Boards, taking both the likelihood and severity of the risk factors into consideration.  The risk management framework addresses all significant strategic, sustainability, financial, operational and compliance-related risks which could undermine the Group's ability to achieve its business objectives in a sustainable manner. The risk management framework is designed to be flexible, to ensure that it remains relevant at all levels of the business given the diversity of the Group's locations, markets and production processes; and dynamic, to ensure that it remains current and responsive to changing business conditions.  The directors are satisfied that the Group has effective systems and controls in place to manage its key risks within the risk tolerance levels established by the Boards.  Competitive environment in which Mondi operates  The industry in which Mondi operates is highly competitive and selling prices are subject to significant volatility. New capacity additions are usually in large increments which, combined with product substitution towards lighter weight products, electronic substitution, alternative packaging solutions and increasing environmental considerations, have a significant impact on the supply-demand balance and hence on market prices.  The Group monitors industry developments in terms of changes in capacity as well as trends and developments in its product markets and potential substitutes. Mondi's strategic focus on low-cost production in growing markets with consistent investment in its operating capacity ensures that the Group remains competitive. Mondi invests in research and development activities to improve existing processes and to identify new markets and new products.  The locations in which the Group operates  The Group operates in a number of geographical locations in countries with differing levels of political, economic and legal systems.  The Group continues to actively monitor and adapt to changes in the environments in which it operates. Management engages in regular formal and informal interaction with the authorities to ensure they remain abreast of new developments. Thorough country risk assessments are conducted and return requirements adjusted to take country risk into consideration.  The Group's geographical diversity and decentralised management structure, utilising local resources in countries in which it operates, reduces exposure to any specific jurisdiction. The Boards have established limits on exposure to any particular geographic environment and new investments are subject to rigorous strategic and commercial evaluation.  Capital intensive operations  Mondi operates large facilities, often in remote locations. The ongoing safety and sustainable operation of all its facilities is critical to the success of the Group.  The management systems in place ensure ongoing monitoring of all operations to ensure they meet the requisite standards and performance requirements. The Group has adequate insurance in place to cover material property damage, business interruption and liability risks. A structured maintenance programme is in place under the auspices of the Group technical director. Emergency preparedness and response procedures are in place and subject to periodic drills.  Cost and availability of a sustainable supply of fibre  Paper for recycling and wood account for approximately one-third of input costs. It is the Group's objective to acquire fibre from sustainable sources and to avoid the use of any illegal or controversial supply.  International market prices are constantly monitored and, where possible, cost pass through mechanisms are in place with customers.  The Group maintains strong forestry management teams in Russia and South Africa to actively monitor environmental influences impacting its owned sources of fibre. Mondi's relatively high levels of integration and access to own FSCTM certified wood in Russia and South Africa serve to mitigate this risk. All the Group's mills have chain-of-custody certificates in place ensuring that wood procured is from non-controversial sources.  Cost of energy and related input costs  Energy and related input costs comprise approximately a third of the Group's variable costs. Increasing energy costs, and the consequential impact thereof on both chemical and transport costs, may impact profit margins.  Energy usage levels, emission levels and usage of renewable energy are monitored and energy costs are benchmarked against external sources. The Group continues to invest in energy infrastructure at its key operating facilities in order to improve energy efficiency and electricity self-sufficiency as well as to reduce its environmental footprint.  Attraction and retention of key skills and talent  The complexity of operations and geographic diversity of the Group is such that high-quality, experienced employees are required in all locations.  The Group monitors its staff turnover levels, diversity and training activities and conducts regular employee surveys. Appropriate reward and retention strategies are in place to attract and retain talent across the organisation. At more senior levels, these include a share based incentive scheme.  Employee and contractor safety  The Group's employees work in potentially dangerous environments where hazards are ever-present and must be managed.  The Group engages in extensive safety communication sessions, involving employees and contractors, at all operations. The Nine Safety Rules to Live By, applied across the Group, are integral to the safety strategy. Operations conduct statutory safety committee meetings where management and employees are represented.  A risk-based approach underpins all safety and health programmes. All business units and operations are required to have safety improvement plans in place.  Governance risks  The Group operates in a number of legal jurisdictions and non-compliance with legal and governance requirements in these jurisdictions could expose the Group to significant risk if not adequately managed.  The Group operates a comprehensive training and compliance programme, supported by regular self-certification and reporting as well as its confidential reporting hotline for all stakeholders, Speakout.  Financial risks  Mondi's trading and financing activities expose the Group to financial risks that, if left unmanaged, could adversely impact current or future earnings. These risks relate to the currencies in which the Group conducts its activities, interest rate and liquidity risks as well as exposure to customer credit risk.  Going concern  The Group's business activities, together with the factors likely to affect its future development, performance and position, the most significant risks and the Group's related management and mitigating actions are set out above. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the condensed financial statements.  Mondi's geographical spread, product diversity and large customer base mitigate potential risks of customer or supplier liquidity issues. Ongoing initiatives by management in implementing profit improvement initiatives which include ongoing investment in its operations, plant optimisation, cost-cutting, and restructuring and rationalisation activities have consolidated the Group's leading cost position in its chosen markets. Working capital levels and capital expenditure programmes are strictly monitored and controlled.  The Group meets its funding requirements from a variety of sources as more fully described in note 11 of the condensed financial statements. The availability of some of these facilities is dependent on the Group meeting certain financial covenants all of which have been complied with. Mondi had  €792 million of undrawn committed debt facilities as at 31 December 2013  which should provide sufficient liquidity in the medium term. The Group's debt facilities have maturity dates of between 1 and 12 years, with a weighted average maturity of 3.7 years.  The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, including an assessment of the current macroeconomic environment indicate that the Group should be able to operate well within the level of its current facilities and related covenants.  The directors have reviewed the overall Group strategy, the budget for 2014 and subsequent years, considered the assumptions contained in the budget and reviewed the critical risks which may impact the Group's performance. After making such enquiries, the directors are satisfied that the Group remains solvent and has adequate liquidity in order to meet its obligations and continue in operational existence for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparing this report.  Directors' responsibility statement  These financial statements have been prepared under the supervision of the Group chief financial officer, Andrew King CA (SA), and have been audited in compliance with the applicable requirements of the Companies Act of South Africa 2008 and the UK Companies Act 2006.  The directors confirm that to the best of their knowledge:    * the condensed set of combined and consolidated financial statements has     been prepared in accordance with International Financial Reporting     Standards and in particular with International Accounting Standard 34,     `Interim Financial Reporting';       * the full year results report includes a fair review of the important events     during the year ended 31 December 2013 and a description of the principal     risks and uncertainties; and       * there have been no significant changes in the Group's related party     relationships from that reported in the half yearly results for the six     months ended 30 June 2013.   The Group's condensed combined and consolidated financial statements, and related notes, were approved by the Boards and authorised for issue on 27 February 2014 and were signed on its behalf by:  David Hathorn    Andrew King  Director         Director  27 February 2014 27 February 2014  Audited financial information  The condensed combined and consolidated financial statements for the year ended 31 December 2013 have been audited by the Group's auditors, Deloitte LLP and Deloitte & Touche. Their unqualified audit reports are available for inspection at the Group's registered offices.  Condensed combined and consolidated income statement for the year ended 31 December 2013                                                                       (Restated)                                                                                                                                               2013                       2012                                                                                               € million                   Notes  Before  Special   After  Before    Special    After                                special    items special special      items  special                                  items (note 5)   items   items   (note 5)    items                                                                                  Group revenue                   3   6,476        -   6,476   5,790          -    5,790                                                                                  Materials, energy and             (3,391)        - (3,391) (3,024)          -  (3,024) consumables used                                                                                                                                                               Variable selling expenses           (523)        -   (523)   (527)          -    (527)                                                                                  Gross margin                        2,562        -   2,562   2,239          -    2,239                                                                                  Maintenance and other               (278)        -   (278)   (279)          -    (279) indirect expenses                                                                                                                                                              Personnel costs                     (940)     (17)   (957)   (834)       (16)    (850)                                                                                  Other net operating                 (276)     (10)   (286)   (199)       (10)    (209) expenses                                                                                                                                                                       Depreciation, amortisation          (369)     (67)   (436)   (353)        (1)    (354) and impairments                                                                                                                                                                Operating profit/(loss)         3     699     (94)     605     574       (27)      547                                                                                  Non-operating special items     5       -        7       7       -       (64)     (64)                                                                                  Net profit/(loss) from                  2        -       2     (5)          -      (5) associates                                                                                                                                                                     Total profit/(loss) from              701     (87)     614     569       (91)      478 operations and associates                                                                                                                                                      Net finance costs               6   (115)        -   (115)   (110)          -    (110)                                                                                  Investment income                       3        -       3       4          -           4                                                                                      Foreign currency losses               (1)        -     (1)     (2)          -      (2)                                                                                  Finance costs                       (117)        -   (117)   (112)          -    (112)                                                                                  Profit/(loss) before tax              586     (87)     499     459       (91)      368                                                                                  Tax (charge)/credit             7    (98)       13    (85)    (90)        (1)     (91)                                                                                  Profit/(loss) for the year            488     (74)     414     369       (92)      277                                                                                  Attributable to:                                                                                                                                                               Non-controlling interests                               28                        35                                                                                  Shareholders                                           386                         242                                                                                  Earnings per share (EPS)                                                            for profit attributable to                                                          shareholders                                                                                                                                                                   Basic EPS (€ cents)             8                     79.8                      50.1                                                                                  Diluted EPS (€ cents)           8                     79.6                      49.9                                                                                  Basic underlying EPS (€         8                     95.0                      69.2 cents)                                                                                                                                                                         Diluted underlying EPS (€       8                     94.8                      68.9 cents)                                                                                                                                                                         Basic headline EPS (€           8                     91.3                      62.9 cents)                                                                                                                                                                         Diluted headline EPS (€         8                     91.1                      62.7 cents)                                                                                                                                                                            Condensed combined and consolidated statement of comprehensive income for the year ended 31 December 2013                                                               (Restated)                                                                                                                                 2013                         2012                                                                                           € million                   Before            Net of   Before             Net  of                              tax      Tax      tax      tax        Tax      tax                          amount  expense   amount   amount    benefit   amount                                                                                Profit for the year                              414                          277                                                                                Other comprehensive                                                               (expense)/income                                                                                                                                                Items that may                                                                    subsequently be                                                                   reclassified to the                                                               combined and consolidated                                                         income statement:                                                                                                                                               Effect of cash flow            (2)        -      (2)        2          -        2 hedges:                                                                                                                                                         Gains on                         2        -        2        1          -        1 available-for-sale                                                                investments                                                                                                                                                     Exchange differences on      (233)        -    (233)       49          -       49 translation of foreign                                                            operations                                                                                                                                                      Share of other                 (1)        -      (1)        -          -       -  comprehensive income of                                                           associates1                                                                                                                                                     Items that will not                                                               subsequently be                                                                   reclassified to the                                                               combined and consolidated                                                         income statement:                                                                                                                                               Remeasurements on               19      (6)       13     (33)          8     (25) retirement benefits plans                                                                                                                                       Other comprehensive          (215)      (6)    (221)       19          8       27 (expense)/income for the                                                          year                                                                                                                                                            Other comprehensive                                                               (expense)/income                                                                  attributable to:                                                                                                                                                Non-controlling interests     (11)        -     (11)        7          -        7                                                                                Shareholders                 (204)      (6)    (210)       12          8       20                                                                                Total comprehensive                              193                          304 income for the year                                                                                                                                             Total comprehensive                                                               income attributable to:                                                                                                                                         Non-controlling interests                         17                           42                                                                                Shareholders                                     176                          262                                                                                Note:  1 Associates' share of exchange differences on translation of foreign operations.  Condensed combined and consolidated statement of financial position as at 31 December 2013                                                          (Restated)  (Restated)                                                                                € million                                    Notes     2013       2012        At 1                                                                         January                                                                            2012                                                                                Intangible assets                                       675        695         238                                                                                Property, plant and equipment                         3,428      3,709       3,355                                                                                Forestry assets                                 10      233        311         309                                                                                Investments in associates                                 6          6          19                                                                                Financial asset investments                              27         26          22                                                                                Deferred tax assets                                       4         10           5                                                                                Net retirement benefits asset                             -          -           8                                                                                Derivative financial instruments                          1          -           3                                                                                Total non-current assets                              4,374      4,757       3,959                                                                                Inventories                                             746        783         633                                                                                Trade and other receivables                             954      1,010         814                                                                                Current tax assets                                       26         10           6                                                                                Financial asset investments                               1          1           1                                                                                Cash and cash equivalents                      13b      130         56         193                                                                                Derivative financial instruments                          5          4          10                                                                                Assets held for sale                                      4          2           -                                                                                Total current assets                                  1,866      1,866       1,657                                                                                Total assets                                          6,240      6,623       5,616                                                                                Short-term borrowings                           11    (181)      (281)       (268)                                                                                Trade and other payables                              (989)    (1,029)       (877)                                                                                Current tax liabilities                                (76)       (66)        (78)                                                                                Provisions                                             (46)       (67)        (44)                                                                                Derivative financial instruments                        (4)        (4)         (8)                                                                                Total current liabilities                           (1,296)    (1,447)     (1,275)                                                                                Medium and long-term borrowings                 11  (1,571)    (1,648)       (746)                                                                                Net retirement benefits liability               12    (211)      (253)       (202)                                                                                Deferred tax liabilities                              (264)      (344)       (313)                                                                                Provisions                                             (32)       (33)        (30)                                                                                Derivative financial instruments                        (1)        (1)           -                                                                                Other non-current liabilities                          (19)       (24)        (18)                                                                                Total non-current liabilities                       (2,098)    (2,303)     (1,309)                                                                                Total liabilities                                   (3,394)    (3,750)     (2,584)                                                                                Net assets                                            2,846      2,873       3,032                                                                                Equity                                                                                                                                                            Share capital and stated capital                        542        542         542                                                                                Retained earnings and other reserves                  2,049      2,030       2,044                                                                                Total attributable to shareholders                    2,591      2,572       2,586                                                                                Non-controlling interests in equity                     255        301         446                                                                                Total equity                                          2,846      2,873       3,032                                                                                The Group's condensed combined and consolidated financial statements, and related notes, were approved by the Boards and authorised for issue on 27 February 2014 and were signed on its behalf by:  David Hathorn Andrew King  Director      Director  Mondi Limited company registration number: 1967/013038/06  Mondi plc company registered number: 6209386  Condensed combined and consolidated statement of cash flows for the year ended 31 December 2013                                                                     (Restated)                                                                                € million                                              Notes     2013        2012                                                                                Cash generated from operations                           13a    1,036         849                                                                                Dividends from associates                                           1           1                                                                                Dividends from other investments                                    -           1                                                                                Income tax paid                                                 (126)       (109)                                                                                Net cash generated from operating activities                      911         742                                                                                Cash flows from investing activities                                                                                                                            Investment in property, plant and equipment                     (405)       (294)                                                                                Investment in intangible assets                                  (12)         (9)                                                                                Investment in forestry assets                             10     (41)        (51)                                                                                Investment in financial asset investments                         (4)         (7)                                                                                Proceeds from the disposal of tangible and intangible              36          15 assets                                                                                                                                                          Proceeds from the disposal of financial asset                       1           4 investments                                                                                                                                                     Acquisition of subsidiaries, net of cash and cash                   -       (381) equivalents                                                                                                                                                     Investment in associates                                            -        (43)                                                                                Proceeds from disposal of associates                                4          -                                                                                Proceeds from the disposal of businesses, net of cash               2           1 and cash equivalents                                                                                                                                            Loan repayments from related parties                                1          -                                                                                Loan repayments from external parties                               2          16                                                                                Interest received                                                   3           3                                                                                Net cash used in investing activities                           (413)       (746)                                                                                Cash flows from financing activities                                                                                                                            Repayment of short-term borrowings                       13c     (77)       (114)                                                                                Proceeds from medium and long-term borrowings            13c      107         613                                                                                Repayment of medium and long-term borrowings             13c    (117)        (65)                                                                                Interest paid                                                   (124)        (92)                                                                                Dividends paid to shareholders                                  (138)       (128)                                                                                Purchases of treasury shares                                     (30)        (34)                                                                                Dividends paid to non-controlling interests                      (60)        (29)                                                                                Non-controlling interests bought out                              (4)       (298)                                                                                Net realised gain/(loss) on held-for-trading                       30         (9) derivatives                                                                                                                                                     Government grants received                                          2          -                                                                                Net cash used in financing activities                           (411)       (156)                                                                                Net increase/(decrease) in cash and cash equivalents               87       (160)                                                                                Cash and cash equivalents at beginning of year                   (37)         119                                                                                Cash movement in the year                                13c       87       (160)                                                                                Effects of changes in foreign exchange rates             13c       14           4                                                                                Cash and cash equivalents at end of year                 13b       64        (37)                                                                                       Condensed combined and consolidated statement of changes in equity for the year ended 31 December 2013  € million              Combined                                                                               share                                                                             capital                          Total                                                  and                   attributable        Non-                                 stated Retained    Other           to controlling    Total                      capital earnings reserves shareholders   interests   equity                                                                                At 31 December 2011,        542    2,041        3        2,586         449    3,035 as previously reported                                                                                                                                             Effect of restatement         -        -        -            -         (3)      (3)                                                                                At 1 January 2012           542    2,041        3        2,586         446    3,032 (restated)                                                                                                                                                         Total comprehensive           -      242       20          262          42      304 income for the year                                                                                                                                                Dividends paid                -    (128)        -        (128)        (29)    (157)                                                                                Issue of shares under         -        9      (9)            -           -        - employee share schemes                                                                                                                                             Purchases of treasury         -     (34)        -         (34)           -     (34) shares                                                                                                                                                             Non-controlling               -    (141)        -        (141)       (157)    (298) interests bought out                                                                                                                                               Disposal of businesses        -        -       15           15           -       15                                                                                Reclassification              -     (12)       12            -           -        -                                                                                Other                         -        2       10           12         (1)       11                                                                                At 31 December 2012         542    1,979       51        2,572         301    2,873 (restated)                                                                                                                                                         Total comprehensive           -      386    (210)          176          17      193 income/(expense) for                                                              the year                                                                                                                                                           Dividends paid                -    (138)        -        (138)        (60)    (198)                                                                                Issue of shares under         -       12     (11)            1           -        1 employee share schemes                                                                                                                                             Purchases of treasury         -     (30)        -         (30)           -     (30) shares                                                                                                                                                             Non-controlling               -      (1)        -          (1)         (3)      (4) interests bought out                                                                                                                                               Reclassification              -        1      (1)            -           -        -                                                                                Other                         -        -       11           11           -       11                                                                                At 31 December 2013         542    2,209    (160)        2,591         255    2,846                                                                                Other reserves1                                                                   (restated)                                                                                                                                                        € million                Share-  Cumulative     Cash      Post-                                                 based translation     flow retirement                                            payment  adjustment    hedge   benefits Statutory                                reserve     reserve  reserve    reserve reserves2    Total                                                                                At 1 January 2012            17       (208)      (2)       (56)       252        3                                                                                Total comprehensive           -          42        2       (25)         1       20 income/(expense) for                                                              the year                                                                                                                                                          Mondi share schemes'         10           -        -          -         -       10 charge                                                                                                                                                            Issue of shares under       (9)           -        -          -         -      (9) employee share schemes                                                                                                                                            Disposal of businesses        -          15        -          -         -       15                                                                                Reclassification              -           -        -         12         -       12                                                                                At 31 December 2012          18       (151)        -       (69)       253       51                                                                                Total comprehensive           -       (223)      (2)         13         2    (210) income/(expense) for                                                              the year                                                                                                                                                          Mondi share schemes'         11           -        -          -         -       11 charge                                                                                                                                                            Issue of shares under      (11)           -        -          -         -     (11) employee share schemes                                                                                                                                            Reclassification              -           -        -        (1)         -      (1)                                                                                At 31 December 2013          18       (374)      (2)       (57)       255    (160)                                                                                Notes:  1 All movements in other reserves are disclosed net of non-controlling interests. The movement in non-controlling interests as a direct result of the movement in other reserves for the year ended 31 December 2013 was a decrease in non-controlling interests related to total comprehensive income for the year of €11 million (2012: increase of €7 million).  2 Statutory reserves consist of the merger reserve of €259 million (2012:  €259 million) and other sundry reserves in deficit of €4 million (2012: deficit of  € 6 million).  Notes to the condensed combined and consolidated financial statements for the year ended 31 December 2013  1 Basis of preparation  The Group has two separate legal parent entities, Mondi Limited and Mondi plc, which operate under a dual listed company (DLC) structure. The substance of the DLC structure is such that Mondi Limited and its subsidiaries, and Mondi plc and its subsidiaries, operate together as a single economic entity through a sharing agreement, with neither parent entity assuming a dominant role. Accordingly, Mondi Limited and Mondi plc are reported on a combined and consolidated basis as a single reporting entity.  The Group's condensed combined and consolidated financial statements included in this preliminary announcement have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and contain the information required by IAS 34, `Interim Financial Reporting'. There are no differences for the Group in applying IFRS as issued by the IASB and IFRS as adopted by the European Union (EU) and therefore the Group also complies with Article 4 of the EU IAS Regulation. The Group has also complied with the South African Institute of Chartered Accountants Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Reporting Standards Council of South Africa. The condensed combined and consolidated financial statements have been prepared on a going concern basis as set out above.  The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2013, 2012 or 2011 but is derived from those accounts. Statutory accounts for 2011 and 2012 have been delivered to the registrar of companies, and those for 2013 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the UK Companies Act 2006. Copies of their unqualified auditors' reports on the Integrated report and financial statements 2013 as well as the condensed combined and consolidated financial statements are available for inspection at the Mondi Limited and Mondi plc registered offices.  These condensed combined and consolidated financial statements have been prepared on the historical cost basis, except for the fair valuing of financial instruments and forestry assets.  2a Accounting policies  The same accounting policies, methods of computation and presentation have been followed in the preparation of the condensed combined and consolidated financial statements as were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2012, except as set out below.  Standards and Interpretations early adopted by the Group  There were no Standards or Interpretations early adopted by the Group in the current year. An amendment to IAS 36 - Impairment of Assets which clarifies certain disclosure requirements, was adopted with effect from 1 January 2013.  Standards, amendments to published Standards and Interpretation effective during 2013  The Group has adopted the following Standards and amendments to published Standards during the current year, and their impact on the Group's results are detailed in note 2b:  * IFRS 10 - Consolidated Financial Statements          * IFRS 11 - Joint Arrangements       * IAS 19 (revised) - Employee Benefits   The following Standards, amendments to published Standards and Interpretation which the Group has adopted during the current year, had no significant impact on the Group's results except for the addition of certain disclosures:  * IFRS 1 - First-time Adoption of International Financial Reporting Standards          * IFRS 7 - Financial Instruments: Disclosure       * IFRS 12 - Disclosure of Interests in Other Entities       * IFRS 13 - Fair Value Measurement       * IAS 1 - Presentation of Financial Statements       * IAS 16 - Property, Plant and Equipment       * IAS 27 - Separate Financial Statements       * IAS 28 - Investments in Associates and Joint Ventures       * IAS 32 - Financial Instruments: Presentation       * IAS 34 - Interim Financial Reporting       * IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine     2b Restatement of comparative information  IFRS 10 and IFRS 11 broadened the concept of control and eliminated the option of proportionate consolidation for joint ventures, except in certain circumstances. The impact of these Standards has been that Mondi Shanduka Newsprint Proprietary Limited has been consolidated whilst Aylesford Newsprint Limited has been accounted for using the equity method up to the date of sale in 2012. Comparative information has been restated.  IAS 19 (revised) impacted the measurement of the various components representing movements in the defined benefit pension obligation and associated disclosures. As the Group has always recognised actuarial gains and losses immediately, the Group's total obligation was unchanged. This Standard has been adopted with effect from 1 January 2012 as it was impractical to complete revised actuarial valuations prior to that date. Following the replacement of expected returns on plan assets with a net finance cost in the combined and consolidated income statement, the profit for the period was reduced and accordingly other comprehensive income increased in 2012. Comparative information for the year ended 31 December 2012 has been restated.  The following tables summarise the impacts resulting from the changes in accounting policies above on the Group's financial position, comprehensive income and cash flows.  Combined and consolidated income statement                                                                                                                                                                            Year ended 31 December      2012                                                                                € million                                                 As                                                                      previously   Effect of        As                                                  reported restatement  restated                                                                                Group revenue                                          5,807        (17)     5,790                                                                                Gross margin                                           2,235           4     2,239                                                                                Operating profit                                         541           6       547                                                                                Non-operating special items                             (64)           -      (64)                                                                                Net profit/(loss) from associates                          1         (6)       (5)                                                                                Total profit from operations and associates              478           -       478                                                                                Net finance costs                                      (107)         (3)     (110)                                                                                Investment income                                         10         (6)         4                                                                                Foreign currency losses                                  (2)           -       (2)                                                                                Finance costs                                          (115)           3     (112)                                                                                Profit before tax                                        371         (3)       368                                                                                Tax charge                                              (92)           1      (91)                                                                                Profit for the year                                      279         (2)       277                                                                                Attributable to:                                                                                                                                                  Non-controlling interests                                 35           -        35                                                                                Shareholders                                             244         (2)       242                                                                                The restatement had no impact on special items.  Earnings per share (EPS) for profit attributable          As                      to shareholders                                   previously   Effect of        As                                                  reported restatement  restated                                                                                Basic EPS      (€ cents)                                50.5       (0.4)      50.1                                                                                Diluted EPS    (€ cents)                                50.3       (0.4)      49.9                                                                                Basic          (€ cents)                                69.6       (0.4)      69.2 underlying EPS                                                                                                                                                    Diluted        (€ cents)                                69.3       (0.4)      68.9 underlying EPS                                                                                                                                                    Basic headline (€ cents)                                63.4       (0.5)      62.9 EPS                                                                                                                                                               Diluted        (€ cents)                                63.1       (0.4)      62.7 headline EPS                                                                                                                                                      Combined and consolidated statement of                                            comprehensive income                                                                                                                                                                                              Year ended 31 December      2012                                                                                € million                                                 As                                                                      previously   Effect of        As                                                  reported restatement  restated                                                                                Profit for the year                                      279         (2)       277                                                                                Other comprehensive income/(expense):                                                                                                                             Items that may subsequently be reclassified to            52           -        52 the combined and consolidated income statement                                                                                                                    Items that will not subsequently be reclassified        (27)           2      (25) to the combined and consolidated income statement                                                                                                                 Other comprehensive income for the year, net of           25           2        27 tax                                                                                                                                                               Total comprehensive income for the year                  304           -       304                                                                                Attributable to:                                                                                                                                                  Non-controlling interests                                 42           -        42                                                                                Shareholders                                             262           -       262                                                                                Combined and                                                                          consolidated statement                                                                of financial position                                                                                                                                                                                        As at 31    December     2012    As at 1     January    2012                                                                                    € million                       As                              As                                                  previously   Effect of       As previously   Effect of        As                         reported restatement restated   reported restatement  restated                                                                                    Non-current assets           4,755           2    4,757      3,971        (12)     3,959                                                                                    Current assets               1,859           7    1,866      1,674        (17)     1,657                                                                                    Total assets                 6,614           9    6,623      5,645        (29)     5,616                                                                                    Current liabilities        (1,443)         (4)  (1,447)    (1,306)          31   (1,275)                                                                                    Non-current liabilities    (2,295)         (8)  (2,303)    (1,304)         (5)   (1,309)                                                                                    Total liabilities          (3,738)        (12)  (3,750)    (2,610)          26   (2,584)                                                                                    Net assets                   2,876         (3)    2,873      3,035         (3)     3,032                                                                                                                                                                                                                                                                             Equity                                                                                                                                                                             Share capital and              542           -      542        542           -    542 stated capital                                                                                                                                                                     Retained earnings and        2,030           -    2,030      2,044           -     2,044 other reserves                                                                                                                                                                     Total attributable to        2,572           -    2,572      2,586           -     2,586 shareholders                                                                                                                                                                       Non-controlling                304         (3)      301        449         (3)    446 interests in equity                                                                                                                                                                Total equity                 2,876         (3)    2,873      3,035         (3)     3,032                                                                                    Net debt                   (1,864)         (8)  (1,872)      (831)          11     (820)                                                                                           Combined and consolidated statement of cash                                         flows                                                                                                                                                                                                                 Year ended 31    December      2012                                                                                € million                                       As previously                                                                    reported   Effect of        As                                                            restatement  restated                                                                                Net cash generated from operating activities              740           2       742                                                                                Net cash used in investing activities                   (725)        (21)     (746)                                                                                Net cash used in financing activities                   (173)          17     (156)                                                                                Net decrease in cash and cash equivalents               (158)         (2)     (160)                                                                                Cash and cash equivalents at beginning of year            117           2       119                                                                                Cash movement in the year                               (158)         (2)     (160)                                                                                Effects of changes in foreign exchange rates                4           -         4                                                                                Cash and cash equivalents at end of year                 (37)           -      (37)                                                                                3 Operating segments  Mondi Shanduka Newsprint was incorporated into the South Africa Division during 2012 due to similarities in geographical location, production processes and the integrated nature of the production facilities and is now consolidated as a subsidiary. The effects of this change on the comparative periods are set out in note 2b. The Group's segmental information for the comparative periods has been restated to reflect this change in accounting policy.  Year ended 31 December 2013                              Europe & International             South  Corporate Intersegment Segments                                                                Africa   &  other  elimination    total                                                                    Division                                                                                                                                          € million, unless                                      Uncoated                                        otherwise stated     Packaging     Fibre      Consumer     Fine                                                                       Paper Packaging     Packaging    Paper                                                                                                                                                   Segment revenue          2,000     1,967         1,153    1,388      624          -        (656)    6,476                                                                                                     Internal revenue         (503)      (33)           (5)     (14)    (101)          -          656        -                                                                                                     External revenue         1,497     1,934         1,148    1,374      523          -            -    6,476                                                                                                     EBITDA                     394       163           129      277      135       (30)            -    1,068                                                                                                     Depreciation,             (96)      (70)          (55)    (105)     (42)        (1)            -    (369) amortisation and                                                                                       impairments1                                                                                                                                                                                                         Operating profit/          298        93            74      172       93       (31)            -      699 (loss) from                                                                                            operations before                                                                                      special items                                                                                                                                                                                                        Special items                -       (3)          (13)     (60)     (11)          -            -     (87)                                                                                                     Operating segment        1,837     1,156           993    1,311      731          2        (140)    5,890 assets                                                                                                                                                                                                               Operating net            1,484       903           855    1,135      622          1            -    5,000 segment assets                                                                                                                                                                                                       Additions to               155        72            60       94       93          -            -      474 non-current                                                                                            non-financial assets                                                                                                                                                                                                 Capital expenditure        139        78            56       80       52          -            -      405 cash payments                                                                                                                                                                                                        Operating margin (%)      14.9       4.7           6.4     12.4     14.9          -            -     10.8                                                                                                         Return on capital         21.9      10.8           9.1     16.2     16.0          -            -     15.3     employed (%)                                                                                                                                                                                                            Note:  1 Excluding impairments included in special items (see note 5).  Year ended 31 December 2012 (restated)                               Europe & International             South  Corporate Intersegment Segments                                                                Africa   &  other  elimination    total                                                                    Division                                                                                                                                          € million, unless                                      Uncoated                                        otherwise stated     Packaging     Fibre      Consumer     Fine                                                                       Paper Packaging     Packaging    Paper                                                                                                                                                   Segment revenue          1,896     1,860           502    1,466      702          -        (636)    5,790                                                                                                     Internal revenue         (469)      (42)           (4)     (13)    (108)          -          636        -                                                                                                     External revenue         1,427     1,818           498    1,453      594          -            -    5,790                                                                                                     EBITDA                     321       168            45      300      125       (32)            -      927                                                                                                     Depreciation,             (94)      (67)          (26)    (109)     (56)        (1)            -    (353) amortisation and                                                                                       impairments1                                                                                                                                                                                                         Operating profit/          227       101            19      191       69       (33)            -      574 (loss) from                                                                                            operations before                                                                                      special items                                                                                                                                                                                                        Special items                -      (16)          (11)        -        6       (70)            -     (91)                                                                                                     Operating segment        1,829     1,229         1,019    1,450      975          5        (150)    6,357 assets                                                                                                                                                                                                               Operating net            1,466       958           872    1,248      821          1            -    5,366 segment assets                                                                                                                                                                                                       Additions to               249       144           621       60       94          -            -    1,168 non-current                                                                                            non-financial assets                                                                                                                                                                                                 Capital expenditure         89        76            28       58       43          -            -      294 cash payments                                                                                                                                                                                                        Operating margin (%)      12.0       5.4           3.8     13.0      9.8          -            -      9.9                                                                                                     Return on capital         17.9      12.5           6.2     16.7      9.6          -            -     13.6 employed (%)                                                                                                                                                                                                            Note:  1 Excluding impairments included in special items (see note 5).  The description of each business segment reflects the nature of the main products they sell. In certain instances the business segments sell minor volumes of other products and due to this reason the external segment revenues will not necessarily reconcile to the external revenues by product type presented below.  External revenue by product type                                                                      (Restated)                                                                                € million                                                        2013        2012                                                                                Products                                                                                                                                                        Fibre packaging products                                        1,891       1,785                                                                                Packaging paper products                                        1,482       1,393                                                                                Uncoated fine paper                                             1,284       1,355                                                                                Consumer packaging products                                     1,148         498                                                                                Pulp                                                              269         276                                                                                Newsprint                                                         177         215                                                                                Other                                                             225         268                                                                                      Group total                                                     6,476       5,790                                                                                                                         External revenue by    External  revenue by                                                                                                                      Location of   customer Location of  production                                                                                                                                  (Restated)              (Restated)                                                                                € million                                    2013       2012        2013        2012                                                                                         Revenue                                                                                                                                                                   Africa                                                                                                                                                                  South Africa                                  432        448         623         702                                                                                Rest of Africa                                231        242          11           8                                                                                Africa total                                  663        690         634         710                                                                                         Western Europe                                                                                                                                                          Austria                                       161        145         958       1,025                                                                                Germany                                     1,003        783         993         486                                                                                United Kingdom                                262        230          48          53                                                                                Rest of western Europe                      1,390      1,287         720         693                                                                                Western Europe total                        2,816      2,445       2,719       2,257                                                                                         Emerging Europe                                                                                                                                                         Poland                                        450        364         877         766                                                                                Rest of emerging Europe                       893        816       1,168       1,086                                                                                Emerging Europe total                       1,343      1,180       2,045       1,852                                                                                Russia                                        608        592         741         729                                                                                North America                                 349        270         274         196                                                                                South America                                  57         41           -           -                                                                                Asia and Australia                            640        572          63          46                                                                                Group total                                 6,476      5,790       6,476       5,790                                                                                 Reconciliation of operating profit before special items                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Operating profit before special items                             699         574                                                                                Special items (see note 5)                                       (87)        (91)                                                                                Net profit/(loss) from associates                                   2         (5)                                                                                Net finance costs                                               (115)       (110)                                                                                Group profit before tax                                           499         368                                                                                Reconciliation of operating segment assets                                                         (Restated)  (Restated)                                                                                                                         2013     2013       2012        2012                                                                                € million                                              Net                    Net                                        Segment  segment    Segment     segment                                         assets   assets     assets      assets                                                                                Segments total                              5,890    5,000      6,357       5,366                                                                                Unallocated:                                                                                                                                                    Investments in associates                       6        6          6           6                                                                                Deferred tax assets/(liabilities)               4    (260)         10       (334)                                                                                Other non-operating assets/(liabilities)      182    (306)        167       (319)                                                                                Group capital employed                      6,082    4,440      6,540       4,719                                                                                Financial asset investments                    27       27         26          26 (non-current)                                                                                                                                                   Cash and current financial asset              131  (1,621)         57     (1,872) investments/(net debt)                                                                                                                                          Group                                       6,240    2,846      6,623       2,873                                                                                4 Write-down of inventories to net realisable value                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Write-down of inventories to net realisable value                (21)        (19)                                                                                Aggregate reversal of previous write-down of inventories           12          13                                                                                5 Special items  € million                                                        2013      2012                                                                             Operating special items                                                                                                                                    Asset impairments                                                (67)      (1)                                                                             Restructuring and closure costs:                                                                                                                           Restructuring and closure costs excluding related personnel      (10)      (4) costs                                                                                                                                                      Personnel costs relating to restructuring                        (17)     (16)                                                                             Transaction costs incurred on the acquisition of Nordenia           -     (11)                                                                             Gain on insurance settlement                                        -        5                                                                             Total operating special items                                    (94)     (27)                                                                             Non-operating special items                                                                                                                                Loss on disposals                                                   -     (70)                                                                             Gain on sale of land                                                7        6                                                                             Total non-operating special items                                   7     (64)                                                                             Total special items before tax and non-controlling interests     (87)     (91)                                                                             Tax (see note 7)                                                   13      (1)                                                                             Total special items attributable to shareholders                 (74)     (92)                                                                              Operating special items During the first quarter of the year a decision was taken to close the Lindlar operation in Germany and redirect production to existing plants in Germany, Hungary and the Czech Republic. An impairment charge of €2 million and restructuring and closure costs amounting to €11 million were recognised.  In May 2013, Mondi announced the closure of one of the two newsprint machines located in Merebank, South Africa. Further restructuring activities in the Merebank mill as a result of the closure of the newsprint machine were also implemented. An impairment charge of €13 million and associated closure and restructuring costs of €5 million were recognised.  In May 2013, Mondi announced plans to restructure the Neusiedler operation in Austria to improve the cost base of this mill. An impairment charge of €42 million and restructuring costs of €9 million were recognised.  During the third quarter of the year, unutilised assets amounting to €9  million in the Syktyvkar mill, Russia were written off.  Additional impairment charges of €1 million, and restructuring costs of €2 million were recognised in the Industrial Bags segment of the Fibre Packaging business in France and Mexico.  Non-operating special items  In December 2013, land in the South Africa Division with a carrying value of  €1 million was sold for €8 million, realising a gain of €7 million.  6 Net finance costs                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Total investment income                                             3           4                                                                                Foreign currency losses                                           (1)         (2)                                                                                Finance costs                                                                                                                                                   Interest expense                                                                                                                                                Interest on bank overdrafts and loans                           (108)        (98)                                                                                Net interest expense on net retirement benefits liability        (11)        (15)                                                                                Total interest expense                                          (119)       (113)                                                                                Less: interest capitalised                                          2           1                                                                                Total finance costs                                             (117)       (112)                                                                                Net finance costs                                               (115)       (110)                                                                                7 Tax charge                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                UK corporation tax at 23.25% (2012: 24.5%)                          1          -                                                                                SA corporation tax at 28% (2012: 28%)                              21          19                                                                                Overseas tax                                                      105          66                                                                                Current tax                                                       127          85                                                                                Deferred tax in respect of the current period                     (1)          13                                                                                Deferred tax in respect of prior period over provision           (28)         (8)                                                                                Total tax charge before special items                              98          90                                                                                Current tax on special items                                      (5)           2                                                                                Deferred tax on special items                                     (8)         (1)                                                                                Total tax (credit)/charge on special items (see note 5)          (13)           1                                                                                Total tax charge                                                   85          91                                                                                The Group's effective rate of tax before special items for the year ended 31 December 2013, calculated on profit before tax before special items and including net profit from associates, is 17% (2012: 20%).  8 Earnings per share                                                                     (Restated)                                                                                € cents per share                                                2013        2012                                                                                Profit for the year attributable to shareholders                                                                                                                Basic EPS                                                        79.8        50.1                                                                                Diluted EPS                                                      79.6        49.9                                                                                Underlying earnings for the year                                                                                                                                Basic EPS                                                        95.0        69.2                                                                                Diluted EPS                                                      94.8        68.9                                                                                Headline earnings for the year                                                                                                                                  Basic EPS                                                        91.3        62.9                                                                                Diluted EPS                                                      91.1        62.7                                                                                The calculation of basic and diluted EPS, basic and diluted underlying EPS and basic and diluted headline EPS is based on the following data:                                                                       Earnings                                                                                                                                                   (Restated)                                                                                € million                                                        2013        2012                                                                                Profit for the year attributable to shareholders                  386         242                                                                                Special items (see note 5)                                         87          91                                                                                Related tax (see note 5)                                         (13)           1                                                                                Underlying earnings for the year                                  460         334                                                                                Special items: restructuring and closure costs                   (27)        (20)                                                                                Transaction costs incurred on the acquisition of Nordenia           -        (11)                                                                                Profit on disposal of tangible and intangible assets              (2)         (4)                                                                                Impairments not included in special items                           4           4                                                                                Related tax                                                         7           1                                                                                      Headline earnings for the year                                    442         304                                                                                                                                                Weighted  average                                                                                                                                              number of   shares                                                                               million                                                           2013     2012                                                                              Basic number of ordinary shares outstanding                        484      483                                                                              Effect of dilutive potential ordinary shares                         1        2                                                                              Diluted number of ordinary shares outstanding                      485      485                                                                                     9 Dividends  An interim dividend for the year ended 31 December 2013 of 126.03689 rand cents /9.55 euro cents per share was paid on 17 September 2013 to all Mondi Limited and Mondi plc ordinary shareholders on the relevant registers on 23 August 2013.  A proposed final dividend for the year ended 31 December 2013 of 26.45 euro cents per ordinary share will be paid on 22 May 2014 to those shareholders on the register of Mondi plc on 25 April 2014. An equivalent South African rand final dividend will be paid on 22 May 2014 to shareholders on the register of Mondi Limited on 25 April 2014. The final dividend is subject to the approval of the shareholders of Mondi Limited and Mondi plc at the respective annual general meetings scheduled for 14 May 2014.  The proposed final dividend for the year ended 31 December 2013 of 26.45 euro cents per share will be paid in accordance with the following timetable:                                     Mondi Limited     Mondi plc                                                                               Last date to trade shares                                               cum-dividend                                                                                                                                 JSE Limited                         16 April 2014     16 April 2014                                                                          London Stock Exchange               Not applicable    22 April 2014                                                                          Shares commence trading ex-dividend                                                                                                          JSE Limited                         17 April 2014     17 April 2014                                                                          London Stock Exchange               Not applicable    23 April 2014                                                                          Record date                                                                                                                                  JSE Limited                         25 April 2014     25 April 2014                                                                          London Stock Exchange               Not applicable    25 April 2014                                                                          Last date for receipt of Dividend   2 May 2014        2 May 2014        Reinvestment Plan (DRIP) elections                                      by Central Securities Depository                                        Participants                                                                                                                                 Last date for DRIP elections to UK  5 May 2014        27 April 2014*    Registrar and South African                                             Transfer Secretaries by                                                 shareholders of Mondi Limited and                                       Mondi plc                                                                                                                                    Payment Date                                                                                                                                 South African Register              22 May 2014       22 May 2014                                                                            UK Register                         Not applicable    22 May 2014                                                                            DRIP purchase settlement dates      30 May 2014       27 May 2014**                                                                          Currency conversion date                                                                                     ZAR/euro                            28 February 2014   28 February 2014                                                                              Euro/sterling                       Not applicable     6 May 2014                              *5 May 2014 for Mondi plc South African branch register shareholders  **30 May 2014 for Mondi plc South African branch register shareholders  Share certificates on the South African registers of Mondi Limited and Mondi plc may not be dematerialised or rematerialised between 17 April 2014 and 28 April 2014, both dates inclusive, nor may transfers between the UK and South African registers of Mondi plc take place between 16 April 2014 and 28 April 2014, both dates inclusive.  Information relating to the dividend tax to be withheld from Mondi Limited shareholders and Mondi plc shareholders on the South African branch register will be announced separately, together with the ZAR/euro exchange rate to be applied, on or shortly after 28 February 2014.  10 Forestry assets                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                At 31 December 2011, as previously reported                                   297                                                                                Effect of restatement                                                          12                                                                                At 1 January (restated)                                           311         309                                                                                Capitalised expenditure                                            39          42                                                                                Acquisition of assets                                               2           9                                                                                Fair value gains                                                   17          40                                                                                Disposal of assets                                                (9)         (3)                                                                                Felling costs                                                    (55)        (66)                                                                                Currency movements                                               (72)        (20)                                                                                At 31 December                                                    233         311                                                                                       The fair value of forestry assets is a level 3 measure in terms of the fair value measurement hierarchy and this category is consistent with prior years. The fair value of forestry assets is calculated on the basis of future expected net cash flows arising on the Group's owned forestry assets, discounted using a discount rate relevant in the local country, based on a pre tax real yield on long-term bonds over the last five years. All fair value gains originate from South Africa.  11 Borrowings                                                                (Restated)                                                                                                                                    2013                          2012                                                                                          € million               Current Non-current   Total   Current Non-current    Total                                                                                Secured                                                                                                                                                           Bank loans and                4           2       6         5           3        8 overdrafts                                                                                                                                                        Obligations under             1           6       7         2           9       11 finance leases                                                                                                                                                    Total secured                 5           8      13         7          12       19                                                                                Unsecured                                                                                                                                                         Bank loans and              156         216     372       253         251      504 overdrafts                                                                                                                                                        Bonds                         -       1,289   1,289         -       1,310    1,310                                                                                                                                                                                                                                                          Bonds                         -       1,340   1,340         -       1,357    1,357                                                                                Call option derivative        -        (51)    (51)         -        (47)     (47)                                                                                Other loans                  20          58      78        21          75       96                                                                                Total unsecured             176       1,563   1,739       274       1,636    1,910                                                                                Total borrowings            181       1,571   1,752       281       1,648    1,929                                                                                                                                                                Financing facilities  Group liquidity is provided through a range of committed debt facilities. The principal loan arrangements in place include the following:  €750 million Syndicated Revolving Credit Facility (RCF)  The RCF is a five year multi-currency revolving credit facility which was signed on 14 April 2011. Interest is charged on the balance outstanding at market-related rates linked to EURIBOR/LIBOR.  €500 million 2017 Eurobond  Mondi Finance plc launched a seven year publicly traded bond, guaranteed by Mondi plc, in March 2010. The €500 million bond, which matures on 3 April  2017, was issued at a discount of €5.63 million and pays a fixed coupon of 5.75%  per annum. The bond contains a coupon step-up clause whereby the coupon will be increased by 1.25% per annum if Mondi fails to maintain at least one investment grade credit rating from either Moody's Investors Service or Standard & Poor's. Mondi currently has investment grade credit ratings from both Moody's Investors Service (Baa3, outlook stable) and Standard & Poor's (BBB-, outlook stable).  €500 million 2020 Eurobond  In September 2012 Mondi Finance plc launched an eight year publicly traded bond, guaranteed by Mondi plc. The €500 million bond, which matures on 28 September 2020, was issued at a discount of €0.1 million and pays a fixed coupon of 3.375% per annum. The bond contains the same 1.25% per annum coupon step-up clause as the €500 million 2017 Eurobond.  €280 million Eurobond  As part of the acquisition of Nordenia in 2012 Mondi assumed Nordenia's €280 million Eurobond, paying a coupon of 9.75% per annum and maturing on 15 July 2017. The bond was recognised at its fair value of €324 million at date of acquisition. The value of the bond includes the fair value of an option to call the bond early at the following redemption rates:  %                                                                    Redemption                                                                         rate                                                                              Redemption date                                                                                                                                              15 July 2014                                                            104.875                                                                              15 July 2015                                                            102.438                                                                              15 July 2016 and thereafter                                             100.000                                                                                     The option is valued at €51 million at 31 December 2013 (2012: €47  million).  €160 million Export Credit Agency Facility (ECAF)  The ECAF is used to part finance expansionary capital expenditure in Russia. The facility has an amortising repayment until 2020 and interest is charged on the balance outstanding at a market-related rate linked to EURIBOR.  PLN 474 million European Investment Bank Facility (EIBF1)  The EIBF1 is used to part finance expansionary capital expenditure at Mondi Swiecie in Poland. The facility has an amortising repayment until 2017 and interest is charged at a market-related rate linked to WIBOR (Warsaw Interbank Offered Rate).  €100 million European Investment Bank Facility (EIBF2)  The EIBF2 facility was fully drawn on 28 June 2013 and is used to part finance expansionary capital expenditure in Russia. The facility amortises over 12 years with a two year grace period and interest is charged on the balance outstanding at a market-related rate linked to EURIBOR.  RUB 1.6 billion European Bank for Reconstruction and Development Facility (EBRDF)  The EBRDF is used to part finance expansionary capital expenditure in Russia. The facility has an amortising repayment until 2019 and interest is charged on the balance outstanding at a market-related rate linked to MOSPRIME (Moscow Prime Offered Rate).  In addition to the facilities above, the Group has a revolving committed bank facility amounting to ZAR500 million in South Africa. This facility is repayable on its maturity date of 11 June 2014 and bears interest at one month JIBAR plus a margin. On 31 October 2013 the Group repaid and cancelled a ZAR700 million revolving loan that was outstanding at 31 December 2012.  The Group's borrowings as at 31 December are analysed by nature and underlying currency as follows:  2013/€ million                   Floating            Non-interest    Total                                             rate Fixed rate      bearing carrying     Fair                             borrowings borrowings   borrowings    value    value                                                                                Euro                                  208      1,299            -    1,507    1,591                                                                                South African rand                     79          -            6       85       85                                                                                Polish zloty                           64          -            -       64       64                                                                                Russian rouble                         30          -            -       30       30                                                                                Turkish lira                           33          -            -       33       33                                                                                Other currencies                       25          2            6       33       33                                                                                Carrying value                        439      1,301           12    1,752                                                                                         Fair value                            439      1,385           12             1,836                                                                                         2012/€ million (restated)        Floating            Non-interest    Total                                             rate Fixed rate      bearing carrying     Fair                             borrowings borrowings   borrowings    value    value                                                                                Euro                                  126      1,322            -    1,448    1,559                                                                                South African rand                    180          -            8      188      188                                                                                Pounds sterling                       116          -            -      116      116                                                                                Polish zloty                           84          -            -       84       84                                                                                Russian rouble                         41          -            -       41       41                                                                                Turkish lira                           29          -            -       29       29                                                                                Other currencies                       22          1            -       23       23                                                                                Carrying value                        598      1,323            8    1,929                                                                                         Fair value                            598      1,434            8             2,040                                                                                In addition to the above, the Group swaps euro debt into other currencies through the foreign exchange market. The currencies swapped into/(out of) and the amounts as at 31 December were as follows:  € million                                                        2013      2012                                                                             Long-dated contracts with tenures of more than 12 months                                                                                                   Russian rouble                                                     27       59                                                                             Short-dated contracts with tenures of less than 12 months                                                                                                  Russian rouble                                                    179      127                                                                             Czech koruna                                                       81       51                                                                             US dollar                                                          80       62                                                                             Pounds sterling                                                    62     (59)                                                                             Swedish krona                                                      34       13                                                                             Polish zloty                                                       94      128                                                                             Other                                                              57       29                                                                             Total swapped                                                     614      410                                                                              The fair values of the €500 million 2017 Eurobond, €500 million 2020  Eurobond and €280 million Eurobond are estimated with reference to the last price  quoted in the secondary market. All other financial liabilities are estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.  12 Retirement benefits  All assumptions related to the Group's defined benefit schemes and post-retirement medical plan liabilities were re-assessed individually for the year ended 31 December 2013.  The net retirement benefit liability decreased by €42 million mainly due to changes in assumptions and an exchange rate impact of €22 million. The assets backing the defined benefit scheme liabilities reflect their market values as at 31 December 2013. Any movements in the assumptions have been recognised as a remeasurement in the condensed combined and consolidated statement of comprehensive income.  13 Consolidated cash flow analysis  (a) Reconciliation of profit before tax to cash generated from operations                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Profit before tax                                                 499         368                                                                                Depreciation and amortisation                                     365         349                                                                                Impairment of tangible and intangible assets (not included          4           4 in special items)                                                                                                                                               Share-based payments                                               11          10                                                                                Non-cash effect of special items                                   60          91                                                                                Net finance costs                                                 115         110                                                                                Net (profit)/loss from associates                                 (2)           5                                                                                Decrease in provisions and net retirement benefits               (25)        (22)                                                                                Increase in inventories                                           (7)        (16)                                                                                Increase in operating receivables                                (14)        (38)                                                                                Decrease in operating payables                                    (6)        (29)                                                                                Fair value gains on forestry assets                              (17)        (40)                                                                                Felling costs                                                      55          66                                                                                Profit on disposal of tangible and intangible assets              (2)         (4)                                                                                Other adjustments                                                   -         (5)                                                                                Cash generated from operations                                  1,036         849                                                                                (b) Cash and cash equivalents                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Cash and cash equivalents per combined and consolidated           130          56 statement of financial position                                                                                                                                 Bank overdrafts included in short-term borrowings                (66)        (93)                                                                                Net cash and cash equivalents per combined and consolidated        64        (37) statement of cash flows                                                                                                                                                The fair value of cash and cash equivalents approximate the carrying values presented.  (c) Movement in net debt (restated)  The Group's net debt position is as follows:  € million                                   Debt due               Current                                           Cash and   within  Debt due   financial    Total                                     cash      one after one       asset      net                             equivalents1     year      year investments     debt                                                                                At 31 December 2011, as                 117    (212)     (737)           1    (831) previously reported                                                                                                                                                Effect of restatement                     2       18       (9)           -       11                                                                                At 1 January 2012 (restated)            119    (194)     (746)           1    (820)                                                                                Cash flow                             (160)      114     (548)           -    (594)                                                                                Business combinations                     -     (67)     (393)           -    (460)                                                                                Movement in unamortised loan              -        -         3           -        3 costs                                                                                                                                                              Reclassification                          -     (46)        46           -        -                                                                                Currency movements                        4        5      (10)           -      (1)                                                                                At 31 December 2012 (restated)         (37)    (188)   (1,648)           1  (1,872)                                                                                Cash flow                                87       77        10           -      174                                                                                Movement in unamortised loan              -        -        18           -       18 costs                                                                                                                                                              Reclassification                          -     (34)        34           -        -                                                                                Currency movements                       14       30        15           -       59                                                                                At 31 December 2013                      64    (115)   (1,571)           1  (1,621)                                                                                Note:  1 The Group operates in certain countries (principally South Africa) where the existence of exchange controls may restrict the use of certain cash balances. These restrictions are not expected to have any material effect on the Group's ability to meet its ongoing obligations.  The following table shows the amounts available to draw down on the Group's committed loan facilities:  € million                                                        2013      2012                                                                             Expiry date                                                                                                                                                In one year or less                                                42       27                                                                             In more than one year                                             750      735                                                                             Total credit available                                            792      762                                                                              14 Capital commitments                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Contracted for but not provided                                   366         129                                                                                Approved, not yet contracted for                                  625         589                                                                                These capital commitments relate to the following categories of non-current non-financial assets:                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Intangible assets                                                   4           9                                                                                Property, plant and equipment                                     987         709                                                                                Total capital commitments                                         991         718                                                                                The expected maturity of these capital commitments is:                                                                     (Restated)                                                                                € million                                                        2013        2012                                                                                Within one year                                                   544         445                                                                                One to two years                                                  392         263                                                                                Two to five years                                                  55          10                                                                                Total capital commitments                                         991         718                                                                                       Capital commitments are based on capital projects approved to date and the budget approved by the Boards.  Major capital projects still require further approval before they commence. These capital commitments are expected to be financed from existing cash resources and borrowing facilities.  15 Contingent liabilities  Contingent liabilities comprise aggregate amounts as at 31 December 2013 of  €25 million (2012: €15 million) in respect of loans and guarantees given to banks and other third parties. No acquired contingent liabilities have been recorded in the Group's combined and consolidated statement of financial position for both years presented.  16 Financial instruments' fair value disclosures  Financial instruments that are measured in the combined and consolidated statement of financial position at fair value or where the fair value of financial instruments have been disclosed in notes to the combined and consolidated financial statements require disclosure of fair value measurements by level based on the following fair value measurement hierarchy:    * level 1 - quoted prices (unadjusted) in active markets for identical assets     or liabilities;       * level 2 - inputs other than quoted prices included within level 1 that are     observable for the asset or liability, either directly (that is, as prices)     or indirectly (that is, derived from prices); and       * level 3 - inputs for the asset or liability that are not based on     observable market data (that is, unobservable inputs).   The fair values of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined using standard valuation techniques. These valuation techniques maximise the use of observable market data where available and rely as little as possible on Group specific estimates.  The significant inputs required to fair value all of the Group's financial instruments are either quoted prices or are observable. The Group only holds level 1 and 2 financial instruments and therefore does not hold any financial instruments categorised as level 3 financial instruments. There have also been no transfers of assets or liabilities between levels of the fair value hierarchy during the year.  Specific valuation methodologies used to value financial instruments include:  * the fair values of interest rate swaps and foreign exchange contracts are        calculated as the present value of expected future cash flows based on     observable yield curves and exchange rates;       * the Group's commodity price derivatives are fair valued by independent     third parties, who in turn calculate the fair values as the present value     of expected future cash flows based on observable market data; and       * other techniques, including discounted cash flow analysis, are used to     determine the fair values of other financial instruments.   The only assets or liabilities measured at fair value on level 3 of the fair value measurement hierarchy represent forestry assets. Refer to note 10 for more details on fair value measurement.  Except as detailed in the following table, the directors consider that the carrying values of financial assets and financial liabilities recorded at amortised cost in the combined and consolidated financial statements are approximately equal to their fair values.                                       Carrying     amount     Fair       value                                                                                                                              (Restated)           (Restated)                                                                                € million                                    2013       2012     2013        2012                                                                                Financial liabilities                                                                                                                                           Borrowings                                  1,752      1,929    1,836       2,040                                                                                       17 Related party transactions  The Group and its subsidiaries, in the ordinary course of business, enter into various sale, purchase and service transactions with equity accounted investees and others in which the Group has a material interest. These transactions are under terms that are no less favourable than those arranged with third parties. These transactions, in total, are not considered to be significant.  The Group has a related party relationship with its equity accounted investees. Transactions between Mondi Limited, Mondi plc and their respective subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.  With effect from 3 May 2013, Cyril Ramaphosa ceased to be a director of Mondi Limited and Mondi plc. As a result, all transactions with the Shanduka Group Proprietary Limited, in which Mr Ramaphosa held a 29.6% interest, and its subsidiaries are no longer classified as related party transactions from that date.  Other than the paragraph above, there have been no significant changes to the related parties as disclosed in note 39 of the Group's annual financial statements for the year ended 31 December 2012.  18 Events occurring after 31 December 2013  With the exception of the proposed final dividend for 2013, included in note 9, there have been no material reportable events since 31 December 2013.  Production statistics                                                                      (Restated)                                                                                                                                                 2013       2012                                                                               Europe & International                                                                                                                                       Containerboard                                     Tonnes  2,138,714  2,079,005                                                                              Kraft paper                                        Tonnes  1,010,885    980,637                                                                              Softwood pulp                                      Tonnes  2,007,959  1,978,583                                                                              Internal consumption                               Tonnes  1,859,597  1,825,916                                                                              External                                           Tonnes    148,362    152,667                                                                              Corrugated board and boxes                         Mm²         1,344       1,213                                                                              Industrial bags                                    M units     3,997      3,829                                                                              Coating and release liners                         Mm²         3,348       3,352                                                                              Consumer packaging1                                Tonnes    283,161    121,127                                                                              Uncoated fine paper                                Tonnes  1,381,141  1,417,709                                                                              Newsprint                                          Tonnes    207,228    201,278                                                                              Hardwood pulp                                      Tonnes  1,087,615  1,059,140                                                                              Internal consumption                               Tonnes  1,013,790    972,883                                                                              External                                           Tonnes     73,825     86,257                                                                              South Africa Division                                                                                                                                        Containerboard                                     Tonnes    254,714    263,468                                                                              Uncoated fine paper                                Tonnes    258,751    257,747                                                                              Hardwood pulp                                      Tonnes    645,611    658,368                                                                              Internal consumption                               Tonnes    331,928    337,596                                                                              External                                           Tonnes    313,683    320,772                                                                              Softwood pulp2 - internal consumption              Tonnes    166,101    215,828                                                                              Newsprint2                                         Tonnes    145,498    198,024                                                                                     Notes:  1 Includes Nordenia from October 2012.  2 Restated to include 100% of the Mondi Shanduka Newsprint production.  Exchange rates                                                                  2013      2012                                                                               Closing rates against the euro                                                                                                                               South African rand                                              14.57     11.17                                                                              Czech koruna                                                    27.43     25.15                                                                              Polish zloty                                                     4.15      4.07                                                                              Pounds sterling                                                  0.83      0.82                                                                              Russian rouble                                                  45.32     40.33                                                                              Turkish lira                                                     2.96      2.36                                                                              US dollar                                                        1.38      1.32                                                                              Average rates for the period against the euro                                                                                                                South African rand                                              12.83     10.55                                                                              Czech koruna                                                    25.99     25.14                                                                              Polish zloty                                                     4.20      4.18                                                                              Pounds sterling                                                  0.85      0.81                                                                              Russian rouble                                                  42.32     39.91                                                                              Turkish lira                                                     2.53      2.31                                                                              US dollar                                                        1.33      1.29                                                                               Sponsor in South Africa: UBS South Africa Proprietary Limited  END 
Press spacebar to pause and continue. Press esc to stop.