# Sustainable

by

# Design

#### Mondi Group

#### Integrated report and financial statements

2023

![Mondi_logo_A3_RGB_white.svg]()

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Mondi’s Integrated report  and financial statements  2023 is our primary report  to shareholders, providing  an overview of the Group's  performance for the year  ended 31 December 2023. |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  | Alternative Performance Measures  The Group presents certain measures of  financial performance, position or cash flows  in this report that are not defined or specified  according to International Financial Reporting  Standards (IFRS) and UK-adopted International  Accounting Standards. Refer to pages [238](#i47a6727b8bad4fe28addb4dae187e293_238)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579)  for further details.  SASB_orange.svg  This report is prepared in accordance with  the Sustainability Accounting Standards Board  (SASB): Containers & Packaging Industry  Standard. Relevant disclosures are highlighted  by the icon above with further disclosures  made in our Sustainable Development report  and GRI & SASB Index as part of our 2023  suite of reports. |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |
|  | Our reporting suite |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |

|  |  |
| --- | --- |
|  |  |
| Strategic report | |
|  | |
| Welcome | i |
| Introduction | 1 |
| 2023 at a glance | [2](#i47a6727b8bad4fe28addb4dae187e293_2481) |
| The Mondi Way | [4](#i47a6727b8bad4fe28addb4dae187e293_5663) |
| Reasons to invest | [5](#i47a6727b8bad4fe28addb4dae187e293_8104) |
| Letter from the Chair | [6](#i47a6727b8bad4fe28addb4dae187e293_2542) |
| Our businesses | [8](#i47a6727b8bad4fe28addb4dae187e293_2502) |
| Where we operate | [10](#i47a6727b8bad4fe28addb4dae187e293_2522) |
| Market context | [12](#i47a6727b8bad4fe28addb4dae187e293_2604) |
| Our business model | [14](#i47a6727b8bad4fe28addb4dae187e293_2583) |
| Our strategy | [20](#i47a6727b8bad4fe28addb4dae187e293_2624) |
| Key performance indicators | [22](#i47a6727b8bad4fe28addb4dae187e293_2685) |
| Strategic review | [24](#i47a6727b8bad4fe28addb4dae187e293_2665) |
| Business unit trading review | [30](#i47a6727b8bad4fe28addb4dae187e293_2753) |
| Financial review | [34](#i47a6727b8bad4fe28addb4dae187e293_2774) |
| Stakeholder engagement and  Section 172 | [38](#i47a6727b8bad4fe28addb4dae187e293_2707) |
| Mondi Action Plan 2030 (including  our TCFD disclosure) | [42](#i47a6727b8bad4fe28addb4dae187e293_2727) |
| Principal risks | [69](#i47a6727b8bad4fe28addb4dae187e293_2795) |
| Viability statement | [80](#i47a6727b8bad4fe28addb4dae187e293_2816) |
|  |  |
| The Strategic report was approved by the  Board on 21 February 2024 and is signed  on its behalf by:  Andrew King        Mike Powell  Group CEO        Group CFO | |
|  | |
|  | |
|  | |

|  |  |
| --- | --- |
|  |  |
| Governance |  |
| Chair’s introduction | [82](#i47a6727b8bad4fe28addb4dae187e293_2859) |
| Board of directors | [85](#i47a6727b8bad4fe28addb4dae187e293_2881) |
| Executive Committee  and Company Secretary | [88](#i47a6727b8bad4fe28addb4dae187e293_2902) |
| Corporate governance report | [90](#i47a6727b8bad4fe28addb4dae187e293_2923) |
| Nominations Committee | [105](#i47a6727b8bad4fe28addb4dae187e293_2944) |
| Audit Committee | [110](#i47a6727b8bad4fe28addb4dae187e293_2965) |
| Sustainable Development  Committee | [119](#i47a6727b8bad4fe28addb4dae187e293_2986) |
| Remuneration report | [122](#i47a6727b8bad4fe28addb4dae187e293_3019) |
| Other statutory information | [150](#i47a6727b8bad4fe28addb4dae187e293_3041) |

|  |  |
| --- | --- |
|  |  |
| Financial  statements | |
|  | |
|  | |
|  | |
| Financial statements introduction | [152](#i47a6727b8bad4fe28addb4dae187e293_3062) |
| Directors’ responsibility statement | [153](#i47a6727b8bad4fe28addb4dae187e293_3088) |
| Independent auditors’ report | [154](#i47a6727b8bad4fe28addb4dae187e293_3110) |
| Financial statements (audited) | [166](#i47a6727b8bad4fe28addb4dae187e293_13) |
| Production statistics  and exchange rates | [235](#i47a6727b8bad4fe28addb4dae187e293_229) |
| Group financial record | [236](#i47a6727b8bad4fe28addb4dae187e293_235) |
| Alternative Performance Measures | [238](#i47a6727b8bad4fe28addb4dae187e293_238) |
| Additional information  for shareholders | [242](#i47a6727b8bad4fe28addb4dae187e293_3131) |
| Shareholder information | [244](#i47a6727b8bad4fe28addb4dae187e293_3152) |
| About this report | [248](#i47a6727b8bad4fe28addb4dae187e293_7158) |

#### Welcome

## Integrated report

2023

|  |  |
| --- | --- |
|  |  |
|  | Visit our website for Mondi’s  complete 2023 Integrated  and Sustainable Development  reporting suite  [www.mondigroup.com](https://www.mondigroup.com/) |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  | Non-financial and sustainability information statement  In accordance with Sections 414CA and 414CB of the Companies Act 2006 (as amended by  The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022), the  required non-financial and sustainability information disclosures, including the new requirements  to incorporate specific climate disclosures, can be found integrated throughout the Strategic  report. The table below sets out where our stakeholders can find more information about the  outcomes and related non-financial KPIs of the matters listed. Our policies can be found on  pages 42-68 and 119. A summary of key areas of disclosure is set out below: | |  |
|  | Reporting requirement | Further information |  |
|  | Business model | Page [14](#i47a6727b8bad4fe28addb4dae187e293_2583)-[19](#ife39ad51f55c438e892c01a643cc64ca_13946) |  |
|  | Climate-related disclosures | Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i8eb60d69ace440a9b8dac4ed7f61c7cf_2387) |  |
|  | Information relating to environmental matters | Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[67](#i026d0d563cbc4a4faa605472691dcead_1-1-1-1-480040) |  |
|  | Information relating to employees | Page [48](#i47a6727b8bad4fe28addb4dae187e293_5795)-[50](#i989e19b834f344c0aff2915d48a2e7d3_146686) |  |
|  | Information relating to social matters | Page [68](#id5b39e30fcb7438c9cb55e47e15b3dae_182788) |  |
|  | Information relating to respect for human rights | Page [67](#i026d0d563cbc4a4faa605472691dcead_1-1-1-1-480040)-[68](#id5b39e30fcb7438c9cb55e47e15b3dae_182788) |  |
|  | Information relating to anti-corruption and anti-bribery matters | Page [68](#id5b39e30fcb7438c9cb55e47e15b3dae_182788) |  |
|  | Principal risks | Page [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) |  |
|  | Non-financial key performance indicators | Page [22](#i47a6727b8bad4fe28addb4dae187e293_2685)-[23](#i81fa069a94a6467fbc23de6c6859fc5d_7-4-1-1-453663), [44](#i47a6727b8bad4fe28addb4dae187e293_7469)-[68](#id5b39e30fcb7438c9cb55e47e15b3dae_182788) |  |
|  |  |  |  |

![02-iPad-Air-Landscape-Mock-up_Mondi_SDr_Cover_2023_crop.png]()

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| We are a global leader in  sustainable packaging  and paper | | | |
|  | Mondi makes packaging and paper solutions that are sustainable  by design. We operate an integrated business with expertise  spanning the entire value chain. With sustainability firmly  embedded in everything we do, our products and production  processes contribute towards the transition  to a circular economy. | |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 1 |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | | | | |

|  |  |
| --- | --- |
|  |  |
| Quotemark_085164svg.svg  Mondi delivered a resilient  performance against the  backdrop of an uncertain  global economic environment.  We remain well positioned  to capitalise on the  expected future growth  in the packaging markets  we serve, supported by our  leading market positions,  compelling sustainable  product portfolio and  through-cycle investment  in the business.  Andrew King  Group CEO | |
|  | Strategic review  Page [24](#i47a6727b8bad4fe28addb4dae187e293_2665)-[29](#icb8bf874b39c4fe8ae1af08aa9f0b1fe_0-0-1-1-478918) |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Investing for value  accretive growth | | |  |
| mondi-sw-mp7-11_crop.jpg | | | |
|  |  |  |  |
|  | €1.2 billion  of organic growth investments  Good progress made towards delivering these  investments on time and on budget. Our projects are  diversified across our packaging businesses and their value  chains, products and geographic reach. We expect our  projects to deliver through-cycle mid-teen returns when  fully operational. | |  |
|  |  | Investing for value accretive growth  Page [26](#i8bec3ed01d1c44dd980f5630c6205064_95) |  |
|  |  |  |  |
|  |  | |  |
| Completed sale of Russian assets, concluding  the Group's exit from Russia. Net proceeds  distributed to shareholders on 13 February 2024  by way of a special dividend of €1.60 per share  and associated share consolidation. | | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 2 |
|  |  |  |

2023

#### at a glance

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
| A resilient performance with strong cash flow | | | | |  |
|  |  |  |  |  |  |
| Underlying EBITDA | | |  | Cash generated from operations |  |
| €1,201 million | | |  | €1,312 million |  |
| 2022: €1,848 million | | |  | 2022: €1,292 million |  |
|  | | |  |  |  |
| Return on capital employed | | |  | Leverage (net debt to underlying EBITDA) |  |
| 12.8% | | |  | 0.3 times |  |
| 2022: 23.7% | | |  | 2022: 0.5 times |  |
|  | | |  |  |  |
| Basic underlying earnings per share | | |  | Ordinary dividend per share |  |
| 107.8 euro cents | | |  | 70.0 euro cents |  |
| 2022: 195.6 euro cents | | |  | 2022: 70.0 euro cents |  |
|  |  |  |  |  |  |
|  | | Financial review  Page  [34](#i47a6727b8bad4fe28addb4dae187e293_2774)-[37](#iea498ba6d54a486cb963a85035279c8b_36041) |  |  |  |
|  |  |  |  |  |  |
| This section includes Alternative Performance Measures which are defined on pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178) - [241](#ia0373627cbfb4cb0bf69a34809b7651c_4579) .  All figures presented and commentary provided in this section are related to the Group’s continuing operations only unless otherwise specified. | | | | |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |

### Delivering on our sustainability commitments

### through our MAP2030 framework

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | |  |  |  |  | |  |  |  |  | |  |
|  |  | |  |  |  | Created_by_empowered_people_crop.svg | |  |  |  |  | |  |
|  | 85% | |  |  |  | 0.64 | |  |  |  | 22% | |  |
|  | of our packaging and paper  revenue is from products that are  reusable, recyclable or compostable | |  |  |  | Total Recordable Case Rate, safety  performance among industry  leaders | |  |  |  | reduction of our absolute Scope 1  and 2 GHG emissions against our  2019 baseline | |  |
| BcoolBox_Main_HG_shadow+mondi_brush_blue-violet-1-hires_1_crop.png | | | |  |  |  |  |  |  |  | | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 3 |
|  |  |  |

![mondi_retouched_13_ICv2+mondi_brush_mint-1_crop.png]()

|  |  |
| --- | --- |
|  |  |
|  |  |

|  |  |
| --- | --- |
|  |  |
|  | MAP2030  Page [42](#i47a6727b8bad4fe28addb4dae187e293_2727)-[68](#icca9faf6cff54b858334ac669229ec81_9-2-1-1-470030) |

![Paulina Piorkowska2+mondi_brush_cerise-1-hires_crop.png]()

![TMW_mondi_brush_orange-yellow-4-hires_crop.png]()

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  | |  |  |  |
|  | Our shared purpose, consistent strategy and  entrepreneurial culture drive value for our stakeholders  The Mondi Way connects our 22,000 people around the world. Through our approach,  we nurture an environment in which high performance and collaboration thrives, empowering  us to drive progress against our strategic priorities in line with our purpose. | | | |  |
|  |  |  |  |  |  |
|  |  | Strategic review  Page [24](#i47a6727b8bad4fe28addb4dae187e293_2665)-29 |  | MAP2030  Page [42](#i47a6727b8bad4fe28addb4dae187e293_2727) -68 |  |
|  |  |  |  |  |  |
|  | Mondi Way FINAL 110220_DP_outlined.svg | | | |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 4 |
|  |  |  |

#### The Mondi Way

![Reasons_to_invest_image_collage_crop.png]()

### Mondi is a returns focused, cash generative business

### delivering through-cycle value accretive growth

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | A market leader in sustainable  packaging and paper  Mondi is a leading producer of corrugated packaging in  Europe and a global leader in the production of kraft paper  and paper bags as well as a regional leader in uncoated  fine paper. |  |  |  |  | Robust financial position  Our strong cash generation through-cycle and robust  balance sheet with investment grade credit rating provides  strategic flexibility. |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Broad product range drives innovation  and strengthens long-term customer  relationships  One of Mondi’s strengths is our ability to offer  customers a choice of paper, plastic or hybrid solutions  using barrier technology to deliver sustainable packaging  for our customers. |  |  |  |  | Investment through-cycle for value  accretive organic growth  Mondi invests to deliver value for all our stakeholders  whether through new capacity expansion projects,  to improve productivity and operational excellence,  or to deliver our sustainability targets. |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Structurally growing markets underpinned  by increasing demand for eCommerce and  sustainable packaging  We operate in long-term structurally growing markets  driven by consumption and industrial production growth  underpinned by increasing demand for eCommerce  and sustainable packaging. |  |  |  |  | Disciplined capital allocation strategy  focused on returns  We have a balanced strategy of investing in both organic  and inorganic growth opportunities alongside returning  capital to shareholders. |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Competitive advantage and resilience  from quality asset base and integrated  business model  Mondi operates high-quality, integrated assets which are  well invested with close proximity to low-cost sustainable  fibre and biomass, delivering significant cost advantages  and reduced volatility. |  |  |  |  | Contributing to a better world  Mondi is a recognised leader in sustainability.  Our MAP2030 framework is focused on delivering  circular driven solutions, created by empowered people,  taking action on climate supported by responsible  business practices. |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
| Award winning product innovations  WorldStar Packaging Awards 2024 | |  |  |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
| Hug&Hold  Category: non-alcoholic  beverages |  | Statorfold  Category: transit |
|  |  |  |
| Protector Bag  ExpandForm  Category: packaging  materials and components |  | MixBerry  Category: fresh fruits  and vegetables |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 5 |
|  |  |  |

R

#### easons to invest

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| PhilipYea_LetterFromChair.jpg | | | | |  |  |  |
|  | Quotemark_WHITE.svg  2023 was a year of continued geopolitical  instability and macroeconomic challenges.  More than ever, companies need to  build resilient business models, manage  supply chain risks and stay agile  in fast‑changing environments.  Philip Yea  Chair |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |  |  |  |  |  |

Welcome to Mondi’s Integrated report

for 2023. I have written in the past about

the resilience of Mondi, and it was evident

again in the past year in the face of

external challenges, most significantly the

uncertain global economic environment

where central banks and financial markets

were torn between the steps required

to reduce inflation and the risk of

self‑inflicted recession. The geopolitical

environment became even more uncertain

given the continuing conflict in Ukraine

and the shocking and polarising events

in the Middle East in the last quarter.

Following the reversal of the energy

squeeze the industry faced in 2022, many

of our input costs have fallen, yet overall

the economic uncertainties have had a

significant impact on our margins as some

producers have chosen to reopen their

temporarily mothballed production facilities

in an environment where overall demand

has been cyclically soft. Market pricing has

generally been at significantly lower levels

than in 2022, falling more than input costs,

in part due to new capacity being brought

on stream at this relatively weak point

in the cycle.

A

#### resilient performance

Mondi’s resilience is based on our scale,

our quality asset base, our integrated

model and the breadth and depth of our

customers and end-markets. So our

continuing businesses remained

appropriately profitable, although the

slowdown in global demand for goods

throughout 2023 put pressure on Mondi’s

performance, resulting in underlying

EBITDA of €1,201 million

(2022: €1,848 million). Cash flow remains

strong and our balance sheet robust,

enabling us to continue our capacity

expansion projects which remain on

track and on budget. ROCE was 12.8%

(2022: 23.7%).

Together with the Board, I would like to

thank all our colleagues who have worked

hard to continue delivering value for

all Mondi’s stakeholders against this

challenging backdrop. Thanks to them we

have continued to build strong relationships

with customers, improve efficiency and

productivity across our extensive asset

base, and make excellent progress with our

significant investment projects. I have no

doubt that their efforts ensure Mondi is

well positioned for a sustainable future.

#### Capital allocation focused

#### on returns

One of Mondi’s key strengths is the quality

of our through-cycle cash generation,

which remained strong with cash generated

from operations at €1,312 million

(2022: €1,292 million). Our robust financial

position, with leverage (net debt to

underlying EBITDA) of 0.3 times, and

disciplined capital allocation provide

us with strategic flexibility to continue

investing through-cycle for sustainable

growth and deliver attractive returns,

while supporting the ordinary dividend.

With our confidence in Mondi’s future,

the Board has recommended a final

dividend of 46.67 euro cents per share.

The final dividend, together with the

interim dividend, amounts to a total

ordinary dividend for the year of

70.0 euro cents per share.

It was a disappointment that the conditional

agreement to dispose of our operation in

Syktyvkar in Russia announced in August

2022 did not receive the requisite regulatory

approvals within the target timetable.

However, our management are to be

congratulated on delivering an acceptable

alternative. This, together with the sale of the

converting operations, created a loss on

disposal of €756 million which mainly

comprised the reclassification of the foreign

currency translation reserves and contributed

to an overall loss after tax for the Group,

attributable to shareholders, of €153 million.

Total cash proceeds of €806 million were

received before year end. Following

approval by shareholders, the net proceeds

were distributed by way of a special

dividend of €1.60 per share on 13 February

2024. Further details of the transaction can

be found in note 28 in the notes to

the consolidated financial statements.

Investing through-cycle for

#### value accretive growth

The Board is pleased with the progress made

in 2023 on our growth capital investment

programme, which will support an increase in

our capacity, lower our cost base and reduce

our environmental footprint.

As part of our capacity expansion pipeline,

we are making excellent progress on the

project to install our new kraft paper

machine at Štětí (Czech Republic) to

increase our kraft paper capacity and are

on track to commence operations in 2025.

Our two containerboard debottlenecking

projects in Kuopio (Finland) and Świecie

(Poland) will be contributing additional

capacity from 2024.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 6 |
|  |  |  |

Letter from the

#### Chair

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Ordinary dividend per share |  |
|  | 70.0 (euro cents) |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  | 2023 ordinary dividend includes proposed  final ordinary dividend of 46.67 euro cents  per share. |  |
|  |  |  |

Acquisitions continue to be a key part

of our investment strategy. Opportunities

are rigorously assessed in terms of both

financial metrics and strategic fit, with

a focus on those opportunities that

complement our existing footprint and

capabilities. An important new opportunity

for us comes through the acquisition of the

Hinton Pulp mill in Alberta (Canada) in early

2024 which is now part of our Flexible

Packaging business unit. After the intended

investment in a new kraft paper machine,

Hinton will be capable of producing

low‑cost, high-quality kraft paper for

industrial and eCommerce bags, and fully

integrate our North American paper bag

operations, strengthening our competitive

advantage and providing our customers

with security of supply (see page [41](#i2eb1d609446c4463b20fb8dfc6eb8ad7_74314)).

#### Contributing to a better world

Mondi has an ambitious purpose that

guides our decisions: to contribute to a

better world by making packaging and

paper solutions that are sustainable by

design. We are committed to leading the

way in circular driven solutions and are

focused on ensuring our customers have

sustainable packaging that is reusable,

recyclable or compostable.

Consequently, sustainability is at the heart

of our strategy. The Mondi Action Plan

2030 (MAP2030), our sustainability framework,

sets out how progress in our three key

action areas - Circular Driven Solutions,

Created by Empowered People,

Taking Action on Climate - can drive

the prosperity of the people, places and

ecosystems that matter to our business

and stakeholders.

Since the launch of MAP2030, Mondi

has continued to make good progress

in our commitments, and ownership of

our sustainability goals is widely shared

across the business.

Since 2019, the base year for our Net-Zero

targets, we have reduced our absolute

Scope 1 and 2 greenhouse gas (GHG)

emissions by 22% and our absolute Scope

3 GHG emissions by 21%. In the near term,

our targets commit us to reduce absolute

Scope 1 and 2 GHG emissions by 46.2%

and Scope 3 GHG emissions by 27.5%

by 2030 from a 2019 base year.

Advancing our offering of

#### sustainable products

One of Mondi’s strengths is our ability to

offer our customers a choice of paper,

plastic or hybrid solutions for their

packaging requirements, creating

partnerships with our customers on their

journey towards a circular economy.

Today, 85% of our paper and packaging

products are reusable, recyclable or

compostable and we continue the

necessary work towards our target

of 100%.

We are excited about the range of

innovative products released during the

year; for example, our paper MailerBAGs

support eCommerce customers looking to

transition away from plastic when shipping

goods worldwide, while Hug&Hold is a

paper-based solution that aims to replace

plastic shrink wrap for PET bottle bundle

packs (see page [28](#i86b6af362b624a1daa7269cee55c6297_1-1-1-1-474746)).

#### Empowering our people

Delivering value for our stakeholders relies

on a talented and motivated workforce and,

together with other members of the Board,

I have greatly benefitted from visiting our

operations during the year, including the

Richards Bay mill (South Africa) in

February 2023 and Świecie mill (Poland)

in June 2023, seeing first hand the

commitment and energy of our colleagues.

As part of her role leading employee

engagement on behalf of the Board,

non‑executive director Sue Clark

participated in Mondi’s European

Communication Forum, alongside

representatives from our European plant

network, where she discussed Group

priorities and performance. We have

22,000 colleagues across more than

30 countries and we aim to be an employer

of choice, supporting our people

to realise their potential and contribute

to Mondi’s ongoing success.

The results of our Employee Survey in 2023

reiterated the feedback given to us on our

site visits. Colleagues across the Group

particularly value the sense of meaning

and purpose their jobs give them, and the

opportunities offered to learn and grow.

We know this as we measure progress

against our MAP2030 commitments,

represented by the Purposeful Workplace

Index (79%), Inclusiveness Index (77%)

and – for the first time in 2023 – our

Wellbeing Index (77%).

Keeping people safe is our top priority

and we have been building on our

traditional safety focus to address the

social psychology of risk, as well as

deepening our engagement with our

contractors. Although we are among the

safety leaders in our industry, most

regrettably we experienced a fatality

towards the end of the year at our

Ružomberok mill (Slovakia), which has left

the Board deeply saddened. A key part of

our philosophy is to ensure that every

incident is fully investigated and procedures

and practices further revised if we can

avoid the same or similar

situation recurring.

#### Board developments

The Board is committed to the highest

standards of corporate governance, a key

factor being the effective combination

of skills, experience and judgement

of our directors. In April, we welcomed

Anke Groth as an independent non-

executive director. Anke has a strong

financial and commercial background,

having operated in large international listed

companies across the energy and industrial

sectors. She brings valuable new insights

to the Board and strengthens the

Audit Committee.

#### Looking ahead

As we enter 2024, it is clear that

geopolitical uncertainties remain high and

that it is going to be another challenging

year for the world economy. However, I am

confident that Mondi has the resilience

to navigate these challenges. We intend

to push through the tough macroeconomic

environment relying on our scale, quality

asset base, integrated operations and

excellent customer proposition. Our strong

balance sheet provides the opportunity

to continue investing through-cycle, staying

alert to growth opportunities and ensuring

Mondi is well positioned to deliver

attractive returns long into the future.

#### Philip Yea

Chair

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 7 |
|  |  |  |

![1649267441892]()

|  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |
|  | Our business units | | | | |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  | Corrugated Packaging | | Mondi is a leading producer of corrugated  packaging with a cost-competitive asset  base and strong customer offering focused  on quality and reliability. We are the leading  virgin containerboard producer in Europe  and the largest containerboard producer in  emerging Europe. Our virgin containerboard  is a high-quality product with excellent  properties for specialised end-use  applications, ideal to meet our customers'  needs around the globe.  We are also a leading corrugated solutions  producer across central and emerging  Europe. We leverage our integrated  production network and partner with  our customers to create fully recyclable  corrugated boxes and packaging. | |  | Leading positions  #1  virgin containerboard producer in  Europe  #1  containerboard producer in emerging  Europe  #1  corrugated solutions producer in  emerging Europe |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Corrugated Packaging  Page [17](#i8e66baab2e0b4ce892b751aef87971fd_17984) and [30](#ib9a8fea7692348ab8dc63057e54f44c5_159583) |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  | Flexible Packaging | | We are a global flexible packaging producer,  integrated across the value chain with a  unique portfolio of solutions. As a global  leader in the production of kraft paper and  paper bags, our well-invested mills produce  high-quality kraft paper that is converted into  strong, lightweight paper-based packaging.  With our high level of integration across the  value chain, our customers come to us for  scale, security of supply and global reach.  We are also a leading producer of consumer  flexible packaging in Europe and have broad  coating capabilities which together provide  an extensive and unique range of paper,  plastic and hybrid packaging solutions. | |  | Leading positions  #1  kraft paper producer globally  #1  paper bags producer in Europe  and a global leader  #3  consumer flexible packaging  producer in Europe |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Flexible Packaging  Page  [18](#i0a36a1b5f68f4d6cba824bee34a6311a_26449) and [31](#ib9a8fea7692348ab8dc63057e54f44c5_159584) |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  | Uncoated Fine Paper | | Our Uncoated Fine Paper business  produces a wide range of home, office,  converting and professional printing papers  at our mills in central Europe and South  Africa. We are the supplier of choice for our  customers, leveraging our leading positions  in these regions. In South Africa, we also  produce and sell market pulp to customers  around the world. | |  | Leading positions  #2  uncoated fine paper producer  in Europe  #1  uncoated fine paper producer  in South Africa |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Uncoated Fine Paper  Page [19](#ife39ad51f55c438e892c01a643cc64ca_12976) and  [32](#ib9a8fea7692348ab8dc63057e54f44c5_159585) |  |  |  |
|  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 8 |
|  |  |  |

#### Our businesses

## Packaging and paper that

## is sustainable by design

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  | The markets we serve  We offer our customers a unique and broad range  of sustainable packaging and paper products across  several end‑markets. | | |
|  | Business unit proportion  of Group total | |  |  |
|  | Key.svg | Corrugated Packaging |  |
|  | Flexible Packaging |  |
|  | Uncoated Fine Paper |  |  |
|  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Revenue | |  |  | Consumer and retail (around 50% of Group revenue) | | |
|  |  |  |  |  | Semi_Chem_Powerflute_Lifestyle3_crop.jpg |  | Product examples  – Food and beverage packaging  – Pet food packaging  – eCommerce packaging  – Retail shopper bags  Relevant business units |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  | Building and construction (around 15% of Group revenue) | | |
|  |  |  |  |  | Optimizely_industrial-bags_crop.jpg |  | Product examples  – Cement bags  – Other paper-based building  material bags  Relevant business units  Flexible_packaging_icons.svg |
|  |  |  |  |  |  |
|  | Underlying EBITDA | |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  | Industrial and agriculture (around 20% of Group revenue) | | |
|  |  |  |  |  | 2020-06-08 JG 047 id363366_crop.jpg |  | Product examples  – Packaging for the chemical industry  – Dairy powder, feed and seed packaging  – Automotive logistics packaging  – Industrial and pallet wrapping  Relevant business units |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | Capital employed | |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  | Paper for printing (around 15% of Group revenue) | | |
|  |  |  |  |  | MONDI PD 2  0616_crop.jpg |  | Product examples  – Color Copy  – Pergraphica®  Relevant business units  mondi_icons_rgb_paper_blue.svg |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 9 |
|  |  |  |

![21440476742428]()

![1649267442337]()

![1649267442371]()

€7.3

#### billion

€1.2

#### billion

€6.5

#### billion

![WWO_Europe_Text_silver_NBG_updated.svg]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 10 |
|  |  |  |

#### Where we operate

## Global

## network delivering for our

## customers

![WWO_Europe_Map.svg]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 11 |
|  |  |  |

![22539988370736]()

![1649267441913]()

![22539988370758]()

Operating

segment

net assets

Employees

![1649267442029]()

Revenue by

customer

location

Revenue by

production

location

![WWO_Africa_Text.svg]()

![WWO_Americas_Text.svg]()

![WWO_Am_Af_Map.svg]()

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| 221122_SWIECIE_2_OPS_2449_edit_crop.jpg | | | | | | |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | The global packaging market | | | | |  |
|  |  |  |  |  |  |  |
|  | Global packaging demand is estimated  at around $1 trillion per annum, roughly  half of which is accounted for by  Europe and North America. From a  materials perspective, paper-based  packaging comprises about 40% of  the global market, while plastic-based  packaging represents another 40%.  Metal and glass make up most of the  remaining portion. Around 60% of the  global packaging market is directed  at consumer end-uses (including food,  drink, healthcare and cosmetics)  with the remaining 40% comprising  industrial, transport and other  applications. |  | Packaging demand is linked to  macroeconomic indicators such as  GDP and consumption trends which  form the majority of GDP in developed  markets. In addition, the increase  in demand for sustainable products  and the growth in eCommerce also  contribute to growth in the packaging  market, resulting in structural growth  through-cycle in the region of 2-4%.  In the past few years, growth has been  volatile. It was positive in 2020 and 2021  during the COVID-19 outbreak and  subsequent lockdowns when packaging  demand grew substantially, primarily as  a result of consumers prioritising the  purchase of goods over services and  inventory levels increasing following |  | heightened availability risks. After a  short period of normalised consumer  spending, the recent slowdown in  macroeconomic activity and customer  destocking have contributed to  weaker demand.  As a Group, we are strongly positioned.  We operate in faster growing  packaging segments of corrugated  (paper-based) and flexible (paper,  plastic and hybrid-based) packaging,  which benefit from structural growth  drivers, including the growing demand  for sustainable packaging. We see  opportunities to leverage our leading  market positions and innovation  capabilities to deliver sustainable  packaging solutions for our customers. |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Market sources: Smithers - The Future of Sustainable Packaging: Long-term Strategic Forecasts to 2032. | | | | |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 12 |
|  |  |  |

#### Market context

## Our structurally

## growing

## packaging markets

![32435593020083]()

|  |
| --- |
|  |
| 24% |
| 23% |
| 45% |
| 8% |

![29137058136792]()

|  |
| --- |
|  |
| 33% |
| 7% |
| 16% |
| 21% |
| 12% |
| 4% |
| 7% |

#### Global packaging by material (%)

#### Global packaging by region (%)

|  |
| --- |
|  |
|  |

|  |
| --- |
|  |
|  |

### Growing

### demand for sustainable solutions

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Population growth and  economic development  are increasing  consumption, adding  pressure on natural  resources and driving  efforts to build circular  models. Climate change-  related concerns are  fuelling demand for  alternative solutions with  lower carbon emissions.  Consumer awareness  about how their choices  impact the environment  is pressuring companies  to deliver positive change.  These developments are  supporting the growing  demand for sustainable  products and practices  as our customers and  end‑consumers make  more sustainable choices. |  |
|  | | |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
| Recent developments |  |  | Our response |
| 1. Rapidly evolving legislation | | | |
|  |  |  |  |
| A number of legislative initiatives  under the EU Green Deal and  which are highly relevant to our  industry are driving the transition  to more sustainable products,  including the Packaging and  Packaging Waste Regulation  and Green Claims guidance. |  |  | With a focus on circular driven  solutions and delivering products  that are sustainable by design, we  remain well positioned to respond  to regulatory changes and continue  to help our customers make more  sustainable choices. |
|  |  |  |  |
| 2. Responsible and efficient production | | | |
|  |  |  |  |
| Through Scope 3 emissions reporting  and the increased use of life  cycle‑based product assessments,  the scrutiny of products will continue  to grow as suppliers and customers  demand responsibly sourced, carbon  efficient manufacturing across their  value chains. |  |  | We have a long track record of  delivering against our sustainability  targets. As part of MAP2030, we  remain focused on keeping materials  in circulation, preventing waste and  reducing our emissions along the value  chain. Together with our innovation  efforts, we develop solutions with  superior sustainability credentials  as seen in our life cycle-based  product assessments. |
|  |  |  |  |
| 3. Demand for renewable and recyclable materials | | | |
|  |  |  |  |
| The demand for products containing  recycled content continues to grow.  However, in paper-based packaging,  some applications require a fresh fibre  (virgin) product due to its superior  strength and purity properties. For  other applications, recycled solutions  can be used which are more cost  effective. For plastic-based solutions,  most products are virgin based as the  availability of recycled plastic is limited. |  |  | We offer a broad range of solutions  including virgin and recycled  paper‑based packaging, as well as  hybrid- and plastic-based packaging.  Our paper-based solutions are either  from renewable sources (fresh fibre  products) or contain recycled content  (recycled-based products). We are  also continuing our efforts to develop  mono-material plastic-based solutions  in order to increase recyclability. |
|  |  |  |  |
| 4. Fit-for-purpose packaging | | | |
|  |  |  |  |
| Optimal packaging is dependent  on the packaged goods' required  properties including shelf life, durability,  barrier properties and quality, which  in many cases can only be provided  by producers with the knowledge,  expertise and capacity to manufacture  at scale. In addition, overpacking  continues to be a challenge as goods  of varying sizes are packaged in  standardised solutions. |  |  | With a broad range of solutions,  we provide our customers with the  optimal solution that avoids waste  and protects the packaged goods.  Our innovation efforts are driving  the development of adaptable  and adjustable solutions to ensure  right-sizing of packaging. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 13 |
|  |  |  |

![DSC_1442_shadow+350610_Packshot_12kg (3)_shadow+mondi_brush_orange-yellow-4-hires_V2_crop.png]()

![BM_mondi_brush_blue-4-hires_transparent_crop_2.png]()

We are a global leader in sustainable packaging and paper,

operating an integrated business across the value chain, producing

innovative solutions for consumer and industrial applications.

We support the

#### circular economy at

#### each stage of our

#### integrated value chain…

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Sustainable by design |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |
|  |  |
|  |  |
|  | Responsibly sourced  raw materials |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |
|  |  |
|  |  |
|  | Efficient  production |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |
|  |  |
|  |  |
|  | Sustainable packaging  and paper solutions |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |
|  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  | Integrated value chain  Page [16](#i86ccedf2f437415a9194fa9554619cef_147) |

#### And build on

#### the competitive

#### advantages of our

#### three businesses…

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| BikeBox_05b+e-shopSupremeBox_Gesamt_shadow+VinoSprintBox_A08_B07_3000px_72dpi_sRGB_recrop[83].png | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | Corrugated Packaging |  |
|  |  |
|  |  |  |
|  |  |  |
|  | EcoVantage_Tasche_Montage_2020_HIGH_shadow+Advantage_Smooth_White_Strong_cut_out_shadow+FlexiBag Recyclable_shadow+EcoWicketBag_Brown_Front_shadow_recrop.png |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  | Flexible Packaging |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |
| PERGRAPHICA_Rough_70_3D_LIEGEND+PERGRAPHICA_Smooth_3D_LIEGEND_RGB_cut_out+Color Copy original A4 100 with C2C sticker vertical_shadow_recrop[9].png | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | | |
|  | Uncoated Fine Paper |  |
|  |  |
|  |  |
|  |  |
|  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  | Business unit value chains  Page  [17](#i47a6727b8bad4fe28addb4dae187e293_8016)-[19](#i47a6727b8bad4fe28addb4dae187e293_7997) |

To

#### deliver on our

#### purpose

#### and create

sustainable value for

#### our stakeholders.

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  | Employees  We invest in the development  of our people, provide an inclusive,  safe working environment and  support a diverse, skilled and  committed workforce.  Customers  We deliver innovative sustainable  packaging and paper solutions to  our customers, with our continuous  focus on customer centricity.  Suppliers and contractors  We engage with our suppliers,  encouraging supply chain  transparency and fair working  conditions, and take action to  mitigate our risks.  Communities  We invest in local community  initiatives supporting health,  environmental protection,  education, local enterprise  and infrastructure development.  Investors  We offer our shareholders  long‑term value accretion with  our disciplined approach to  capital allocation.  Partners and industry  associations  We collaborate with industry  associations and partners across  our value chain to find sustainable  solutions to the collective challenges  we face and bring about meaningful  change at scale. |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  | Stakeholder engagement  Page [38](#i47a6727b8bad4fe28addb4dae187e293_2707)-[40](#i5551cd485bd640a0b170bc92dc81c138_1-5-11-1-361882) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 14 |
|  |  |  |

#### Our business model

## Creating value for all our stakeholders

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  | What we do |  | What makes us sustainable by design |
|  |  |  |  |  |
| Responsibly sourced  raw materials |  | – We require materials such as wood,  paper for recycling, chemicals and  resins, access to natural resources  (most notably water), and energy  in our manufacturing processes.  – Based on revenue, over 80% of our  packaging and paper solutions are  fibre based with wood as the primary  raw material.  – More than 90% of our wood is sourced in  the countries where our mills are located.  Our European mills procure wood  regionally from responsible external  sources while our South African mills  primarily source wood from our own  sustainably managed certified plantations.  – We use around 1.3 million tonnes  of paper for recycling for our recycled  fibre-based products. |  | – 100% of our wood is responsibly sourced  with  75% FSCTM- or PEFC-certified fibre  and the remainder meeting FSC's  Controlled Wood standard.  – We partner with scientific organisations  to promote climate-fit, resilient forests.  – We conduct water stewardship and  biodiversity assessments providing  insights on our impact and information  for developing subsequent action plans.  – 92% of the water we use is returned  back to the ocean or rivers after use  and treated in compliance with  regulatory quality standards.  – We engage with suppliers to promote  greater transparency, mitigate risk  and reduce our Scope 3 emissions  in our supply chain. |
|  |  |  |  |  |
|  |  |  |  |  |
| Efficient production |  | – Our pulp and paper mills produce pulp,  containerboard, kraft paper and  uncoated fine paper.  – All of our key mills have integrated pulp  and paper processes which provide  efficient and cost-competitive  production as well as energy generation.  – Our box plants and other converting  operations use containerboard and kraft  paper respectively (sourced internally  and externally) together with resins,  chemicals and other raw materials to  produce a broad range of corrugated  and flexible packaging products. |  | – 78% of fuels used by our mills are  biomass based, a renewable fuel  generated on site by our mills (63%)  and purchased externally (15%).  – Our training and upskilling programmes  support our employees to reach their  full potential and drive productivity  and efficiency gains.  – We remain focused on safety with  our Social Psychology of Risk approach  to drive continuous improvement in  our safety performance.  – We engage and support surrounding  communities to understand their  concerns and partner with them to find  solutions for our joint success.  – Our focus is on reducing air, water and  greenhouse gas emissions across our  production processes and supply chain  and eliminating waste. |
|  |  |  |  |  |
|  |  |  |  |  |
| Sustainable packaging  and paper solutions |  | – We produce a broad and unique  range of packaging and paper solutions  for consumer and industrial end-uses  including paper, plastic and hybrid  products.  – We partner with our customers to  understand their needs, providing an  opportunity to innovate and develop  new, fit-for-purpose solutions that  contribute to a circular economy.  – Our converted corrugated solutions and  flexible packaging products are  predominantly delivered to customers  regionally while the majority of our pulp,  containerboard, kraft paper and  uncoated fine paper is sold globally. |  | – We design products to have a  sustainable end-of-life.  – As a Group, we continue to increase  the proportion of our products that are  reusable, recyclable or compostable,  achieving 85%  in 2023.  – Our continued engagement in  cross‑value chain initiatives provides  an opportunity for us to contribute  towards the development of  industry‑wide guidelines for recycling  and design for circularity.  – We identify opportunities to use waste  as a secondary raw material for other  industrial applications such as in the  cement industry and agricultural sector. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 15 |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 16 |
|  |  |  |

#### Our business model

#### continued

#### Integrated

#### value chain

1

#### Corrugated Packaging

#### Flexible Packaging

#### Uncoated Fine Paper

Our three business units produce a distinct range of sustainable products. Our collective strength provides competitive advantage including a

centralised cost-effective approach to responsible raw material sourcing, benchmarking performance and sharing best practice to optimise

productivity and performance, and offering our customers a unique and broad range of sustainable packaging and paper products.

![mondi_icons_cmyk_consumer_flexibles_bluecircle.svg]()

![mondi_icons_cmyk_containerboard_bluecircle.svg]()

![mondi_icons_cmyk_durable-consumer-goods_bluecircle.svg]()

![mondi_icons_cmyk_extrusion-paper_bluecircle.svg]()

![mondi_icons_cmyk_pulp-mills_orangecircle.svg]()

![mondi_icons_cmyk_resins_bluecircle.svg]()

![mondi_icons_cmyk_paper_bluecircle.svg]()

![mondi_icons_cmyk_kraft-paper_bluecircle.svg]()

|  |  |  |
| --- | --- | --- |
|  |  |  |
| 1 Integrated value chain based on 2023 statistics.  2 While the Group procures some pulp, containerboard and kraft paper externally for commercial and logistic reasons, we continue to produce more than we consume.  3 Net exposure (calculated as the total volume produced that exceeds the total volume consumed by the Group). | | |
|  |  |  |
|  |  |  |
| n Responsibly sourced raw materials | n Efficient production | n Sustainable solutions |
|  |  |  |

Wood

12.8 million m3

Other

materials2

Resins

and films

Containerboard

2.3 mt

Kraft paper

1.1 mt

Uncoated fine paper

0.9 mt

Pulp

3.2 mt

Box plants

Converting plants

Containerboard3

1.3 mt

Corrugated

solutions

1.9 billion m2

Uncoated fine

paper

0.9 mt

Kraft paper3

0.4 mt

Paper bags

5.4 billion bags

Market pulp3

0.3 mt

Consumer

flexibles

1.8 billion m2

Functional paper

and films

2.7 billion m2

![mondi_rgb_chemicals_raw_materials.svg]()

![mondi_icons_rgb_pulp_mintcircle.svg]()

![mondi_icons_rgb_recycling_mintcircle_.svg]()

Paper for recycling

1.3 million tonnes (mt)

![BM_Corrugated_packaging_collage_recrop.png]()

![BM_Flexible_packaging_collage_V2_recrop.png]()

|  |
| --- |
|  |
|  |

#### Corrugated Packaging

#### Virgin containerboard

Mondi is the leading virgin

containerboard producer in Europe

with around 80% of our overall

containerboard production virgin based.

The European market is however

predominately recycled based with only

around 20% derived from virgin grades.

Virgin containerboard is made from

fresh fibres, and used for applications

requiring strength, moisture resistance,

hygiene and other unique properties

such as fresh fruit packaging and

transport packaging for heavy and

fragile goods. Most of our offering is

produced at our European mills which

are extremely cost competitive.

Our virgin containerboard product

offering is diverse with a range of

high‑quality grades including unbleached

kraftliner, white top kraftliner and

semi‑chemical fluting.

While the majority of our customer

base is in Europe, a significant amount

of our virgin containerboard is sold

to customers around the globe and

converted into a range of packaging

solutions by regional players.

We produce virgin containerboard at our

mills in Świecie (Poland), Kuopio (Finland),

Richards Bay (South Africa) and

Ružomberok (Slovakia).

#### Recycled containerboard

Around 20% of our containerboard

production is recycled with most

production at our cost-competitive mill

in Świecie (Poland). We are integrated

with our corrugated solutions plants as

we produce the majority of the recycled

containerboard they need for converting,

which secures supply. Our ongoing capital

investment project at Duino (Italy) will

increase our recycled containerboard

production and integration to meet the

growing demand from our plant network

for sustainably produced recycled

containerboard in the region.

#### Corrugated solutions

We are a leading corrugated solutions

producer in the faster growing emerging

European region. Together with our

strong customer relationships and security

of supply, we create fully recyclable,

paper‑based corrugated boxes and

packaging (made from virgin and recycled

containerboard) for our customers’

consumer, eCommerce, transit and

industrial packaging needs in the region.

We utilise a high percentage of recycled

content in our products.

|  |
| --- |
|  |
| Virgin containerboard  (million tonnes) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |
| --- |
|  |
| Recycled containerboard  (million tonnes) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |  |
| --- | --- |
|  |  |
|  | Corrugated Packaging trading review  Page [30](#ib9a8fea7692348ab8dc63057e54f44c5_159583) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 17 |
|  |  |  |

![38482906972208]()

![38482906972265]()

![BM_Flexible_packaging_collage_V2_recrop.png]()

|  |
| --- |
|  |
|  |

#### Flexible Packaging

Our Flexible Packaging business unit

produces kraft paper and paper bags

(which together contribute around 60%

of the business unit’s revenue) as well

as consumer flexibles and functional

paper and films. Kraft paper, which

comprises sack kraft and speciality

kraft, is produced at our mills in

Štětí (Czech Republic), Frantschach

(Austria), Dynäs (Sweden), Stambolijski

(Bulgaria) and Ružomberok (Slovakia).

Our converting operations are located

across the globe and have leading

positions in the regions where

we operate.

#### Sack kraft paper and paper bags

We are the global leader in the sack

kraft paper and paper bag value chain.

Our well-invested European mills

produce kraft paper of which around

two-thirds is sack kraft paper, a niche

and high-quality product made from

fresh fibres that is strong, porous

and with high elasticity and high tear

resistance. These properties make it

an ideal solution for packaging of

medium to large goods which demand

strength and durability such as cement

and other building materials as well

as animal food, feed and seed.

More recently, the growth in

eCommerce has increased demand

for our MailerBAGs, a paper-based

flexible packaging solution for consumer

eCommerce packaging made of sack

kraft paper, which is providing an

additional growth driver for our business

as it replaces traditional plastic mailers.

Sack kraft paper is a globally traded

product which is converted by paper

bag plants located in close proximity

to their customers around the world.

As a Group, we have a global paper bag

plant footprint, with leading positions in

Europe, North America, the Middle East

and North Africa.

As a global leader in both sack kraft

paper and paper bag production,

and with our high level of integration

across the value chain, our customers

come to us for scale, security of supply,

in‑depth paper making expertise, quality,

reliability and global reach.

#### Speciality kraft paper

We produce a broad range of speciality

kraft paper that is versatile and strong,

and used in a wide range of end-uses

including paper-based consumer

products, retail shopper bags, pallet

wrapping and other industrial solutions.

Some of this paper is used in our

consumer-focused converting

operations (as outlined below);

however, the majority of our speciality

kraft paper is converted by our

customers across Europe.

Consumer flexibles and

#### functional paper and films

We are a leading producer of flexible

packaging products for consumer

end‑uses with leading positions

in food and pet food applications

across Europe, and extensive customer

relationships with large FMCGs

and major retailers.

We are well positioned to meet our

customers’ needs and take advantage

of the growing demand for sustainable

packaging solutions with our unique

product portfolio. We can provide

paper- or hybrid-based products by

leveraging our paper making expertise

and extensive coating capabilities, or

mono-material plastic-based solutions,

ensuring we can deliver the optimal

solution that is sustainable by design.

|  |
| --- |
|  |
| Sack kraft paper  (million tonnes) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |
| --- |
|  |
| Speciality kraft paper  (million tonnes) |
|  |
|  |
|  |
|  |
|  |
|  |

|  |  |
| --- | --- |
|  |  |
|  | Flexible Packaging trading review  Page  [31](#ib9a8fea7692348ab8dc63057e54f44c5_159584) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 18 |
|  |  |  |

#### Our business model

#### continued

![38482906972229]()

![38482906972280]()

![BM_Uncoated_Fine_Paper_collage_V2_crop.png]()

|  |
| --- |
|  |
|  |

#### Uncoated Fine Paper

#### Uncoated fine paper

(

#### Europe

)

We are the second largest uncoated

fine paper producer in Europe.

The majority of our uncoated fine paper

production in this region is from our

integrated mill in Ružomberok (Slovakia).

As an integrated producer, we benefit

from a lower cost of production and

higher energy self-generation, which

provides cost competitiveness

compared to non-integrated producers.

Our Neusiedler operations (Austria)

complement our offering with highly

diversified, value added and sustainable

paper options enabling us to offer a full

range of products to our customers.

Together, and with our scale, reliability,

extensive operational capabilities and

financial strength, we continue to

be the supplier of choice with our

comprehensive customer offering.

#### Uncoated fine paper

#### (Southern Africa)

We are the leading uncoated fine

paper producer in the region, with

most competition coming from

import volumes. We operate one

paper machine at our Merebank mill

(South Africa) which produces

uncoated fine paper for our customers

in the region.

#### Market pulp

We produce and sell market pulp

to our customers around the world.

The majority of the Group’s market

pulp is produced at our mill in Richards

Bay (South Africa) which is accounted

for in the Uncoated Fine Paper business

unit. In addition to providing pulp

for packaging and paper production

to our South African operations, the

mill produces market pulp for sale both

into domestic and export markets.

#### Forestry assets

We own and manage forestry

landholdings in South Africa that

produce sufficient wood volumes

to meet our own requirements for

production in the country, thereby

securing our supply. We recognise

changes in the fair value of these

assets in the consolidated income

statement through the fair value gain

or loss on forestry assets.

|  |
| --- |
|  |
| Market pulp1  (million tonnes) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
| 1   Based on the Group's market pulp volumes. |

|  |  |
| --- | --- |
|  |  |
|  | Uncoated Fine Paper trading review  Page [32](#ib9a8fea7692348ab8dc63057e54f44c5_159585) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 19 |
|  |  |  |

![8796093022238]()

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  |  | | We drive value accretive  growth, sustainably |  |  |  | Drive performance  along the value chain |
|  | We prioritise profitable growth in our packaging businesses and leverage  our four strategic value drivers to create value for all of our stakeholders.  Sustainability is at the centre of our strategy and is embedded in  our investment and operational decisions. Our current sustainability  commitments and targets are set out in the  Mondi Action Plan 2030  (MAP2030) which focuses on three action areas: Circular Driven Solutions,  Created by Empowered People, Taking Action on Climate. | | |  |  | We continually look for ways to optimise  productivity, enhance our efficiency and prevent  waste. Our initiatives span our entire business  and include continuous improvement and  operational excellence programmes, together  with keeping our processes lean, and focusing  on commercial excellence. We also invest in  rigorous benchmarking exercises across our  operations to share best practice and identify  emerging issues. | |
|  |  |  | |  |  |
|  |  |  |  |  |  |  |  |
|  | 2023 achievements  – Delivered a resilient performance in the year against an uncertain global  economic environment backdrop with underlying EBITDA of €1,201 million  and cash generated from operations of €1,312 million.  – Progressed against our  MAP2030  commitments, including the reduction  of our absolute Scope 1 and 2 greenhouse gas emissions by 22%  against  our 2019 baseline.  – Completed sale of previously owned Russian assets, concluding the Group’s exit  from Russia. Net proceeds distributed to shareholders in February 2024 by way of  a special dividend of €1.60 per share and associated share consolidation. | | |  |  | 2023 achievements  – Continued to drive operational and  commercial excellence initiatives across the  value chain.  – Reduced our specific waste to landfill by 44%  compared to our 2020 baseline.  – Progressed on a number of digital and  operational initiatives to drive productivity  gains across the organisation. | |
|  |  |  |  |  |  |  |  |
|  | Medium-term priorities  – Deliver attractive returns over the long term supported by our strong  operational leverage, balance sheet and cash generation.  – Complete and ramp up new capacity from our organic growth  investments together with evaluating further organic and selective  inorganic growth opportunities.  – Progress on our MAP2030 commitments and targets.  – Continue to engage with our stakeholders to build trust and drive  positive change. | | |  |  | Medium-term priorities  – Continue to evaluate, invest in and roll out  initiatives across our production network  to drive productivity and efficiency gains.  – Reduce costs, waste and emissions generated  during our production processes.  – Maintain quality standards and enhance  operational performance. | |
|  |  |  |
|  |  |  |  |  |  |  |  |
|  | We identify and mitigate the potential impact of risks on our ability to  deliver our strategy by setting appropriate risk appetites. Our KPIs, outlined  in the pages that follow together with our MAP2030 targets, provide  a measure of our performance against our strategic objectives. | | |  |  | Relevant KPIs  – Underlying EBITDA  – Return on capital employed (ROCE)  – Total shareholder return (TSR)  – Scope 1 and 2 GHG emissions  – Waste to landfill | |
|  |  | Principal risks  Page [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) | |  |  |
|  |  | Key performance indicators  Page [22](#i47a6727b8bad4fe28addb4dae187e293_2685) -[23](#i81fa069a94a6467fbc23de6c6859fc5d_7-4-1-1-453663) | |  |  |
|  |  | MAP2030  Page [42](#i47a6727b8bad4fe28addb4dae187e293_2727)-[68](#icca9faf6cff54b858334ac669229ec81_9-2-1-1-470030) | |  |  |  |  |
|  |  |  | Related principal risks | |
|  |  |  |  |  |  |  | |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 20 |
|  |  |  |

#### Our strategy

## Driving value accretive growth, sustainably

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Invest in assets with  cost advantage |  |  | Inspire our people |  |  | Partner with  customers for  innovation |
| We invest in our asset base through-cycle  to drive organic growth, strengthen cost  competitiveness, improve environmental  performance, and enhance our product  offering, quality and service to customers.  Our organic growth investments are directed  towards our packaging businesses which  operate in structurally growing markets.  In addition, and where appropriate, we  look to acquire businesses that produce  high‑quality products with sustainable  competitive advantages. | |  | We are committed to providing an inspiring,  inclusive, diverse and safe working  environment for our employees. We want  them to develop their skills and grow in  confidence which will unlock potential and  contribute to our success in line with our  values of performance, care and integrity.  The safety, health and mental wellbeing of  our people is a priority for us. We embed  clearly defined methodologies, procedures  and robust controls to keep our people safe. | |  | We collaborate along the value chain to  produce high-quality sustainable packaging  and paper solutions for our customers.  Our efforts help us contribute towards a  circular economy, prevent waste and grow  with our customers by leveraging our strong  and long standing relationships with them.  Our unique range of products, together with  our paper making expertise and rigorous  quality management, positions us strongly  to be the supplier and partner of choice. | |
|  |  |  |  |  |  |  |  |
| 2023 achievements  – Good progress made towards delivering  our €1.2 billion organic growth project  pipeline on time and on budget.  – Key projects within our pipeline include  starting up the Kuopio mill (Finland)  investment towards the end of the year and  making good progress on the €400 million  investment in a new kraft paper machine  at Štětí (Czech Republic). | |  | 2023 achievements  – Developed our people’s skills through  training programmes and upskilling initiatives.  – Engaged with colleagues across the  organisation including the Group-wide  Employee Survey to provide insight into our  employee engagement and performance.  – Among industry leaders with a 0.64 Total  Recordable Case Rate performance. | |  | 2023 achievements  – Increased the proportion of our product  portfolio that is reusable, recyclable or  compostable, achieving 85% in the year.  – Ongoing product development and  continuing to be externally recognised for  our award-winning sustainable solutions.  – Customer survey conducted with over 1,700  customers taking part. Maintained 'best in  class' scores for being trustworthy, easy to  do business with and build relationships. | |
|  |  |  |  |  |  |  |  |
| Medium-term priorities  – On-time and on-budget execution and ramp  up to full production of our organic growth  investments.  – Integrate the recently acquired Hinton Pulp  mill into our Flexible Packaging business  unit and further evaluate investment  opportunities to expand the mill.  – Continue to evaluate further organic and  selective inorganic investment opportunities. | |  | Medium-term priorities  – Continuous focus on improving our  safety performance and embedding a  behaviour-based safety mindset.  – Review and develop action plans to tackle  areas identified as requiring improvement  in our 2023 Group-wide Employee Survey.  – Focus on talent attraction, retention and  diversity and inclusion initiatives to provide  a purposeful and inclusive environment  for all our employees. | |  | Medium-term priorities  – Continue to partner with our customers  to develop innovative and sustainable  packaging solutions.  – Increase the proportion of products that  are reusable, recyclable or compostable.  – Ongoing engagement with customers  to improve quality standards and overall  customer satisfaction. | |
|  |  |  |  |  |  |  |  |
| Relevant KPIs  – Underlying EBITDA  – Return on capital employed (ROCE)  – Investment grade credit ratings  – Total shareholder return (TSR)  – Scope 1 and 2 GHG emissions | |  | Relevant KPIs  – Total shareholder return (TSR)  – MAP2030 Empowered people targets  including Total Recordable Case Rate  (TRCR) | |  | Relevant KPIs  – Underlying EBITDA  – Total shareholder return (TSR)  – MAP2030 Circular driven solutions targets  including the proportion of reusable,  recyclable or compostable products | |
|  |  |  |  |  |  |  |  |
| Related principal risks | |  | Related principal risks | |  | Related principal risks | |
| Risk_icon_4.svg | | |  | |  |  | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 21 |
|  |  |  |

#### Our key performance indicators (KPIs) provide

a broad measure of the

#### Group’s

#### performance.

#### We set individual targets for each of our

#### business units in support of these

#### Group

#### KPIs.

#### Presentation basis

Financial KPIs are presented for a five-year period and based on

the Group’s continuing operations from 2021, while sustainability

metrics are presented from their respective baseline years and

therefore either cover a four- or five-year period (with all years,

including baselines, based on the Group’s continuing operations).

|  |  |
| --- | --- |
|  |  |
|  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
| Underlying EBITDA  (€ million) |  | Why this is a KPI  Underlying EBITDA provides a measure  of the cash-generating ability of the Group  that is comparable from year to year.  Tracking our cash generation is one of the  components we measure when we assess  our value creation through the cycle. |  | 2023 performance  Underlying EBITDA was lower at  €1,201 million  due to lower sales volumes and selling prices  falling more than input costs. The Group’s  underlying EBITDA margin was 16.4% .  Link to strategy |
|  |  |  |  |  |
| Return on capital employed (ROCE)  % (12-month trailing) |  | Why this is a KPI  ROCE provides a measure of the efficient  and effective use of capital in our operations.  We compare ROCE to our current estimated  Group pre-tax weighted average cost of  capital to measure the value we create. |  | 2023 performance  The Group achieved a ROCE of  12.8%, ahead  of cost of capital although lower than 2022,  reflecting the lower profitability in the year.  Link to strategy |
|  |  |  |  |  |
| Investment grade credit rating  (at 31 December 2023) |  | Why this is a KPI  We aim to maintain investment grade credit  ratings to ensure we have access to funding  for value accretive investment opportunities  through the business cycle. |  | 2023 performance  The Group maintained its investment grade  credit ratings. In May 2023, Standard & Poor’s  upgraded the Group's credit rating from BBB+  to A- (stable outlook). Moody’s Investors  Service reaffirmed the Group's credit rating  at  Baa1 (stable outlook) during the year.  Link to strategy |
|  |  |  |  |  |
| Total shareholder return (TSR)  (%) |  | Why this is a KPI  TSR provides a market-related measure of  the Group’s progress against our objective  of delivering long-term value for our  shareholders.  TSR measures the total return to Mondi’s  shareholders, including both share price  movement and dividends paid. |  | 2023 performance  The Group achieved a TSR of 14% in the year  and recommended a total ordinary dividend  per share for the year of 70.0 euro cents,  in line with last year.  Link to strategy |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 22 |
|  |  |  |

K

#### ey performance indicators

## Tracking our performance

![1649267442968]()

![1649267443010]()

![2199023257310]()

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Standard & Poor’s | | | | | |
|  | | | | | |
|  |  |  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  | | | | |  |
| A+ | A | A- | BBB+ | BBB | BBB- |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Moody’s Investors Service | | | | | |
|  | | | | | |
|  |  |  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  | | | | | |
| A1 | A2 | A3 | Baa1 | Baa2 | Baa3 |

#### Using KPIs to measure the success of our strategy

Our strategy is to deliver value accretive growth, sustainably.

This is underpinned by four strategic value drivers which build

on the competitive advantages we enjoy today and set a clear

roadmap for investment and operational decisions into the

future. We use KPIs to provide a measure of Mondi’s strategic

performance and value creation. Each KPI has been linked

to the relevant strategic value drivers below.

|  |  |
| --- | --- |
|  |  |
|  | Our strategy  Page [20](#i47a6727b8bad4fe28addb4dae187e293_2624)-[21](#ifeb9b1d4729d41d5a093f58dac7dfc15_11-6-2-2-466776) |

#### Aligning KPIs to remuneration

Our executive directors are assessed against specific performance

targets. For the LTIP, these performance measures, assessed over

a three-year period, are ROCE and TSR (and basic underlying

earnings per share from the performance period ending in 2025).

For the Group annual bonus, in which more than 3,000 employees

participate (including the Group CEO and Group CFO), performance is

assessed against ROCE, underlying EBITDA, sustainability metrics

(safety, GHG emissions and waste to landfill) and personal objectives.

|  |  |
| --- | --- |
|  |  |
|  | Remuneration report  Page [122](#i47a6727b8bad4fe28addb4dae187e293_3019)-[149](#i3303ad506f594d9f922659fb3ad314ff_14660) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
| Scope 1 and 2 GHG emissions  (million tonnes CO2e) |  | Why this is a KPI  Our focus is to reduce our GHG emissions  to address climate-related impacts and secure  the long-term success of our business. |  | 2023 performance  We have reduced our absolute Scope 1 and 2  GHG emissions by 22% compared to our  2019 baseline and remain on track to meet  our targets. Our GHG emission intensity  from our pulp and paper mills was higher at  0.39 t/t (or 0.43 t/t for the Group including  converters) mainly due to market-related  lower production volumes.  Link to strategy |
|  |  |  |  |  |
| Waste to landfill  (thousand tonnes) |  | Why this is a KPI  Our goal is to keep materials in circulation.  We are focused on reducing our waste  and reusing or recycling unavoidable waste  generated in our production processes  instead of disposing of it to landfill. |  | 2023 performance  We continue to make progress against  our ambition to eliminate waste to landfill  and have successfully reduced our specific  waste to landfill by 44% compared to our  2020 baseline.  Link to strategy |
|  |  |  |  |  |
| Reusable, recyclable or compostable  products  (% of Group revenue) |  | Why this is a KPI  The demand for sustainable packaging  continues to rise, with brands and consumers  looking for solutions to help meet their  sustainability pledges and support the  transition to a circular economy. |  | 2023 performance  We continue to make progress on our  ambitious target. In 2023, 85% of our revenue  was from products that were reusable,  recyclable or compostable, up from  74%  in 2020, our baseline year for this target.  Link to strategy |
|  |  |  |  |  |
| Total Recordable Case Rate (TRCR)  (per 200,000 hours worked) |  | Why this is a KPI  Keeping people safe and healthy is a moral  and a business imperative that applies  to all who work for and on behalf of Mondi.  Our Social Psychology of Risk approach  supports our goal of sending everybody  home safely, every day. |  | 2023 performance  Among industry leaders with a 0.64  Total  Recordable Case Rate performance. We  however deeply regret the fatality at our  Ružomberok facility (Slovakia) and in addition,  the four life-altering injuries at our operations  in the year.  Link to strategy |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 23 |
|  |  |  |

![1649267443112]()

![1649267443223]()

![1649267443263]()

baseline

baseline

![21440476743964]()

2020 baseline figure corrected and restated.

baseline

baseline

(tonnes CO2e per tonne of saleable production)

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| CEO_WEB23_Andrew King 1.jpg |  |  |  |
|  | Mondi delivered a resilient performance in  2023 as a result of our compelling  customer service and delivery, supported  by our scale, quality asset base, integrated  model and breadth of products, customers  and end-markets. As always, my thanks  to colleagues around the world for  their commitment. |  |
|  |  |  |

|  |
| --- |
|  |
|  |
| Underlying EBITDA  €1.2 billion |
|  |
| Cash generated from operations  €1.3 billion |
|  |
| Ordinary dividend per share  70.0 euro cents |

#### Strong cash generation

While underlying EBITDA of €1,201 million

was lower than the very strong performance

in the prior year, our cash generation

remained ahead of last year at €1,312 million.

#### Investing for value accretive growth

This strong cash generation gives us the

strategic flexibility to continue investing in

our business through-cycle, supported by

our confidence in the long-term structural

growth of the markets we operate in and

our leading positions within them. We

continue to make good progress in

delivering our organic growth projects,

which remain on track and on budget. We

expect these projects to deliver a

meaningful EBITDA contribution from 2025.

#### Outlook

In the first quarter of 2024, selling prices

are generally lower than the averages

achieved in the second half of 2023.

However, we are seeing improvements in

our order books and are implementing

price increases across our range of paper

grades. Input costs remain elevated

compared to historical levels but have

broadly stabilised since the end of 2023.

We remain well positioned to capitalise as

demand improves with our strong

operational leverage and organic growth

investment projects.

#### Shareholder returns

It is our continued confidence in the future

of our business which has resulted in the

Board recommending a total ordinary

dividend for the year of 70.0 euro cents per

share, in line with 2022.

#### Andrew King

Group CEO

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 24 |
|  |  |  |

S

#### trategic

#### review

![Strategic_review_letter_collage_crop.png]()

#### Group performance review

Mondi delivered underlying EBITDA of

€1,201 million in the year (2022:

€1,848 million). Group revenue was down

on lower selling prices and sales volumes

as a result of softer market demand and

the impact of customer destocking, which

abated over the course of the year. The

Group's underlying EBITDA margin was

16.4% (2022: 20.8%).

Corrugated Packaging delivered underlying

EBITDA of €310 million in the year, down

53% on the prior year (2022: €662 million).

Underlying EBITDA margin was lower at

13.6% as a result of selling prices declining

more than input costs. Containerboard

sales volumes were broadly stable despite

the backdrop of softer market demand,

while in Corrugated Solutions, good margin

management supported a stable year on

year financial performance.

Flexible Packaging's underlying EBITDA

was €637 million, 20% lower than the

previous year (2022: €797 million), mainly

as a result of lower sales volumes.

Underlying EBITDA margin was 16.5%.

Although profitability was lower than the

very strong performance in 2022, the

business showed resilience due to its high

level of integration across the kraft paper

and paper bag value chain together with its

exposure to consumer-focused markets.

Uncoated Fine Paper delivered underlying

EBITDA of €289 million in the year, down

32% (2022: €427 million) largely due to

lower selling prices. Underlying EBITDA

margin was 22.4%. Our geographic and

product diversification supported our

performance with higher uncoated fine

paper and pulp sales volumes in South

Africa mitigating lower European volumes.

Return on capital employed (ROCE) was

lower at 12.8% (2022: 23.7%), reflecting the

lower profitability in the year. This lower

profitability, together with lower net finance

costs, resulted in basic underlying earnings

per share of 107.8 euro cents (2022: 195.6

euro cents).

The Group continued to exhibit its strong

cash-generative characteristics with cash

generated from operations increasing in the

year to €1,312 million (2022: €1,292 million).

This strong through-cycle cash generation

continues to support our ongoing

investment in the business and ensures we

are well positioned to meet future demand

for sustainable packaging and paper

products.

|  |  |
| --- | --- |
|  |  |
|  | Business unit trading review  Page [30](#i47a6727b8bad4fe28addb4dae187e293_2753)-[33](#i4ef24c9100464376b51a2385f61d0e7e_10-1-1-1-452644) |

|  |  |
| --- | --- |
|  |  |
|  | Financial review  Page  [34](#ia35a0c08e6d04d9494405ad16f63c658_0-3-1-4-359903) -[37](#iea498ba6d54a486cb963a85035279c8b_36041) |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
| 5186-k-36_retouched_crop.png |  |  |  |
|  | Investing at Kuopio for  sustainable growth  We recently started up our  €125 million modernisation  investment at our Kuopio mill in  Finland. The investment will increase  semi-chemical fluting capacity  by 55,000 tonnes per annum  and meet the growing demand  for the high‑performing, top quality  containerboard grade produced  at the mill which is used in fresh  fruit and vegetable boxes and trays.  It will furthermore enhance product  quality and cost competitiveness.  The investment will also contribute  towards our ambitious MAP2030  sustainability commitments including  reduced greenhouse gas, noise,  odour and effluent emissions,  enhancing resource and energy  efficiency, and improving  occupational safety. |  |
|  |  |  |
|  |  |  |
|  | €125 million  modernisation investment |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 25 |
|  |  |  |

#### Investing for value accretive

#### growth

Our capital investment programme is focused

on meeting the growing demand for

sustainable packaging; enhancing our product

offering, quality and service to customers;

strengthening our cost competitiveness; and

improving our environmental footprint. Given

our confidence in the long-term structural

growth of the packaging markets we operate

in, and our leading positions within them, we

seek to invest through the cycle to deliver

value accretive growth.

We are making good progress on our €1.2

billion of approved investments in organic

growth projects, which remain on track and on

budget. These projects are diversified across

our value chain, products and geographic reach

and comprise €0.6 billion of investments in

Corrugated Packaging and €0.6 billion of

investments in Flexible Packaging. By the end

of 2024, we expect to have invested around

80% of the approved amount. We expect

these projects to deliver a meaningful EBITDA

contribution from 2025.

|  |  |
| --- | --- |
|  |  |
|  | Investing for growth  Page [30](#ib9a8fea7692348ab8dc63057e54f44c5_159583)- [31](#ib9a8fea7692348ab8dc63057e54f44c5_159584) |

In Corrugated Packaging, most of these

projects are at, or close to, start up including

investments at our Kuopio mill (Finland),

Świecie mill (Poland) and Polish corrugated

solutions plants. Our Duino mill (Italy) is

expected to start up in 2025 as planned. In

Flexible Packaging, we continue to make

progress on our pipeline, with most projects,

including the new paper machine at Štětí

(Czech Republic), expected to ramp up from

2025. We expect our projects to take two to

three years to achieve full production

following their commissioning, delivering mid-

teen returns through-cycle when fully

operational.

In addition, we have recently completed the

acquisition of the Hinton Pulp mill in Alberta

(Canada) for a total consideration of USD 5

million. The mill has the capacity to produce

around 250,000 tonnes of pulp per annum

and will provide the Group with access to

local, high-quality fibre from a well-established

wood basket. We intend to invest in the mill

to improve productivity and sustainability

performance and, subject to pre-engineering

and permitting, expand the facility primarily

with a new kraft paper machine which will

integrate our paper bag operations in the

Americas and support future growth.

|  |  |
| --- | --- |
|  |  |
|  | Section 172: Hinton Pulp mill  Page [41](#i2eb1d609446c4463b20fb8dfc6eb8ad7_73161) |

|  |
| --- |
|  |
|  |
|  |

|  |
| --- |
|  |
| Given our confidence in the  long-term structural growth  of the packaging markets we  operate in, and our leading  positions within them, we seek  to invest through the cycle to  deliver value accretive growth. |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |
| --- |
|  |
|  |
|  |

|  |
| --- |
|  |
| Organic growth investment pipeline  (€ billion) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 26 |
|  |  |  |

#### Strategic review

#### continued

![1]()

Corrugated Packaging

Flexible Packaging

€1.2

#### billion

|  |
| --- |
|  |
| 0.4 |
| 0.2 |

|  |
| --- |
|  |
| 0.4 |
| 0.2 |

![SR_mondi_brush_yellow-mint-5_crop.png]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Prioritising growth in our  packaging businesses  In 2023, our packaging businesses  contributed 77% of the Group’s underlying  EBITDA (excluding corporate costs).  These businesses operate in structurally  growing packaging markets and are  supported by increasing demand for more  sustainable packaging solutions. To  capture this future growth, and build on  our leading market positions where  we operate, we invest in our asset  base through-cycle with our growth  investments directed towards packaging.  Over the past five years in our continuing  operations, total capital expenditure and  acquisitions have exceeded depreciation  and disposals by €1.2 billion. Over this  period, capital expenditure as a  percentage of depreciation was 163%,  with our organic growth capital  expenditure and all acquisitions focused  on the Group’s packaging businesses.  Acquisitions continue to be a key part  of our investment strategy. Opportunities  are rigorously assessed in terms of both  financial metrics and strategic fit, with  a focus on those opportunities that  complement our existing footprint  and capabilities.  Our current organic growth pipeline  is outlined on the previous page. |  | SR_MONDI_SchneeAufMoss_Mondi_12_2021_Tag20077_FAV Gabi Lena_recrop.png | | |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |  |  |  |
|  | SR_211221_FloralBox_1_CorrS_edit_recrop.png | | |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |  |
| Capital expenditure as a  percentage of depreciation  2019-2023 (average) |  |
|  |
|  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 27 |
|  |  |  |

![22539988369624]()

![Strategic_review_background_transparent_crop.png]()

#### Progressing towards achieving

#### our MAP2030 sustainability

#### commitments

The Mondi Action Plan 2030 (MAP2030) is

our sustainability framework to 2030,

focusing on three action areas, and built on

our purpose of contributing to a better

world by making innovative packaging and

paper solutions that are sustainable by

design.

|  |
| --- |
|  |
|  |
|  |
| Reduction in specific waste to landfill  compared to 2020 baseline  44% |
|  |
| Total Recordable Case Rate  0.64 |
|  |
| Reduction in absolute Scope 1  and 2 GHG emissions compared  to 2019 baseline  22% |
|  |
| Reduction in absolute Scope 3 GHG  emissions compared to 2019 baseline  21% |
|  |
| We continue to advance  our sustainability performance  and make good progress  on meeting our MAP2030  commitments and targets. |

|  |  |
| --- | --- |
|  |  |
|  |  |
|  | Circular Driven Solutions  We offer our customers a broad range  of sustainable packaging and paper  products. These contribute towards  addressing the global challenges of  climate change and plastic pollution  with the efficient use of natural  resources, to keep materials in  circulation and eliminate waste in a  circular bioeconomy. In 2023, 85% of  our packaging and paper revenue was  from reusable, recyclable or  compostable products, up from 74%  in  2020, our baseline year for this target.  Our Corrugated Packaging and  Uncoated Fine Paper product portfolios  are already at 100%, while in Flexible  Packaging we currently have  sustainable packaging solutions  available, or identified and in  development, for 94% of their product  portfolio based on revenue, and are  continuing our efforts to develop  sustainable solutions for the small  number of remaining products.  In addition, we collaborate across our  business to identify opportunities to  achieve our long-term target of  eliminating waste to landfill from our  manufacturing processes. In 2023, we  successfully reduced our specific  waste to landfill by 44% compared to  the 2020 baseline mainly by finding  alternative uses for waste that was  previously landfilled. |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  | Circular Driven Solutions  Page [45](#i47a6727b8bad4fe28addb4dae187e293_5771) -[47](#iee65342b54cb43a2aa5399ec76ec1ddb_2-1-1-1-467371) |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Innovating to deliver  sustainable solutions  Our product innovation initiatives  focus on developing fit-for-purpose  packaging solutions for our  customers. We continue to receive  recognition for our products,  including being awarded four 2024  WorldStar Packaging Awards.  As one of our award-winning  products, Hug&Hold is a paper-  based and fully recyclable  packaging solution that replaces  plastic shrink wrap for PET  beverage bottle bundle packs. It  comprises a kraft paper sleeve and  a corrugated clip to secure the  bottles and offer a comfortable  handle for transportation.  As part of a critically reviewed life  cycle assessment, the carbon  footprint of Hug&Hold was 43%  less than plastic shrink wrap made  without recycled material and 15%  less than plastic shrink wrap made  from 100% recycled content. |  |
|  |  |  |
|  |  |  |
|  | 43%  lower carbon footprint  from Hug&Hold |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 28 |
|  |  |  |

#### Strategic review

#### continued

![SR_Strategic_Review_BG5_transparent_crop.png]()

![21990232555577]()

|  |  |
| --- | --- |
|  |  |
|  |  |
|  | Created by Empowered People  Our goal is to be an employer of  choice by empowering our people to  realise their potential and contribute to  Mondi's ongoing success. Through  engagement, such as the Group-wide  Employee Survey and development  initiatives, including training and  upskilling programmes, we support our  employees to build skills that support  long-term employability and provide  purposeful employment in a diverse  and inclusive workplace. |

|  |  |
| --- | --- |
|  |  |
|  |  |
| The safety and health of our people  always comes first. We have  committed to reduce our Total  Recordable Case Rate (TRCR) by 15%  by 2030 against a 2020 baseline, along  with targets for zero fatalities and life-  altering injuries. We continue to be  among industry leaders with a 0.64  TRCR performance in 2023, which  represents a 4%  improvement on our  2020 baseline. We however deeply  regret the fatality at our Ružomberok  facility (Slovakia) in late November. In  addition, there were four life-altering  injuries at our operations in the year.  Our thoughts go out to those involved,  and to their families, friends and work  colleagues. All incidents are  investigated and actions taken where  necessary to prevent reoccurrence. |  |

|  |  |
| --- | --- |
|  |  |
|  | Empowered People  Page [48](#i47a6727b8bad4fe28addb4dae187e293_5795) -[50](#i989e19b834f344c0aff2915d48a2e7d3_146686) |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Taking Action on Climate  We have a long track record of  delivering on climate action and  continue to make good progress  towards achieving our Net-Zero  commitment by 2050. In the near  term, our targets, approved by the  Science Based Targets initiative,  commit us to reduce absolute  Scope 1 and 2 greenhouse gas  (GHG) emissions by 46.2% and  Scope 3 GHG emissions by 27.5%  by 2030 from a 2019 base year. In  2023, compared to our 2019  baseline, we have reduced our  absolute Scope 1 and 2 GHG  emissions by  22% and our Scope 3  emissions by 21%, on track to meet  our 2030 targets.  We continue to focus on climate  resilience, maintaining zero  deforestation in our wood supply,  sourcing wood responsibly, and  safeguarding biodiversity and water  resources in our operations and  beyond. |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)- [64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Scope 3 GHG emissions  (thousand tonnes CO 2e) |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 29 |
|  |  |  |

|  |
| --- |
|  |
| 1,759 |
| 201 |
| 330 |
| 158 |
| 18 |
| 5 |
| 55 |
| 2,526 |

\*   Other Scope 3 categories include capital

goods; waste generated in operations;

investments; processing, use and end-of-life

treatment of sold products.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
|  | Engaging with our employees | | |  |
|  | During the year we completed our  latest Group-wide Employee Survey.  Conducted every two years, this survey  provides an opportunity to engage  with our employees and understand their  experiences and feelings towards Mondi.  We achieved an 80% response rate,  with feedback helping to measure and  support progress against our MAP2030  commitments and other aspects like  employee engagement. |  | Listening to our employees’ views helps  us to shape our culture by strengthening  efforts in the areas we are doing well  and taking action where we need  to improve. |  |
|  |  |  |  |
|  |  |  |  |
|  |  | Over 16,800  employees participated in the  2023 survey |  |
|  |  |  |  |  |

### Corrugated

### Packaging

|  |  |  |
| --- | --- | --- |
|  |  |  |
| Underlying EBITDA  (€ million)  €310 million  (2022: €662 million) | | |

#### What we produce

Mondi is a leading producer of corrugated

packaging with a cost-competitive asset

base and strong customer offering focused

on quality and reliability. We are the leading

virgin containerboard producer in Europe

and the largest containerboard producer in

emerging Europe. Our virgin

containerboard is a high-quality product

with excellent properties for specialised

end-use applications, ideal to meet our

customers' needs around the globe.

We are also a leading corrugated solutions

producer across central and emerging

Europe. We leverage our integrated

production network and partner with

our customers to create fully recyclable

corrugated boxes and packaging.

#### Performance during the year

Corrugated Packaging delivered underlying

EBITDA of €310 million in the year, down

53% on the prior year (2022: €662 million).

Underlying EBITDA margin was lower at

13.6% as a result of selling prices declining

more than input costs.

Containerboard sales volumes were broadly

stable despite the backdrop of softer

market demand and the impact from our

project-related shuts in the fourth quarter

of the year, a reflection of our strong cost

position, strength in niche products, and

global reach of our sales infrastructure.

Selling prices were lower in the year with

sharp declines during the first half followed

by a period of stabilisation in the second

half. In response to improved demand

reflected in strong order books, we

announced price increases in February

2024 across our range of containerboard

grades.

In Corrugated Solutions, good margin

management supported a stable year on

year financial performance despite 3%

lower box volumes compared to the prior

year in the face of lower demand.

#### Investi

#### ng for growth

At the end of the year, we started up the

€125 million investment project at our

Kuopio mill (Finland). This project will

increase semi-chemical fluting capacity by

55,000 tonnes when fully ramped up,

enhance product quality, drive cost

competitiveness, and strengthen the mill’s

environmental performance.

We also have several other capital investment

projects that are expected to start up during

2024. These projects include our €95 million

debottlenecking project at Świecie (Poland)

which will increase capacity by 55,000 tonnes

per annum when fully ramped up, together

with expansion projects at our Simet and

Warsaw corrugated solutions plants in Poland

that will support growth and enhance our

product and service offering.

Our €200 million investment at Duino

(Italy) to convert the existing paper

machine into a high-quality, cost-

competitive recycled containerboard

machine with an annual capacity of 420,000

tonnes is ongoing. Start-up of the machine

is expected, as planned, for 2025.

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |

This section includes Alternative Performance Measures

which are defined on pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 30 |
|  |  |  |

#### Business unit trading review

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
|  | Examples of our products |  |  |  |
|  | Snug&Strong  A custom-made, fit-for-purpose  corrugated solution designed to  replace expanded polystyrene (EPS)  components in household appliance  packaging with a more sustainable  alternative. |  | ProVantage KraftTop LinerX  A recyclable, lightweight and high-  strength containerboard solution with  a wide range of end-uses, from food  and beverage to luxury packaging. |  |
| Kraft_KraftTop_LinerX_shadow+snug-strong_shadow_crop.png | | | | |
|  | | | | |

![45079976739351]()

Share of Group

underlying

EBITDA

### Flexible

### Packaging

|  |
| --- |
|  |
| Underlying EBITDA  (€ million)  €637 million  (2022: €797 million) |

#### What we produce

We are a global flexible packaging

producer, integrated across the value chain

with a unique portfolio of solutions. As a

global leader in the production of kraft

paper and paper bags, our well-invested

mills produce high-quality kraft paper that

is converted into strong, lightweight paper-

based packaging. With our high level of

integration across the value chain, our

customers come to us for scale, security of

supply and global reach.

We are also a leading producer of

consumer flexible packaging in Europe and

have broad coating capabilities which

together provide an extensive and unique

range of paper, plastic and hybrid

packaging solutions.

#### Performance during the year

Flexible Packaging's underlying EBITDA

was €637 million, 20% lower than the

previous year (2022: €797 million), mainly

as a result of lower sales volumes.

Underlying EBITDA margin was 16.5%.

Although profitability was lower than the

very strong performance in 2022, the

business showed resilience due to its high

level of integration across the kraft paper

and paper bag value chain together with its

exposure to consumer-focused markets.

Sales volumes across our kraft paper and

paper bag value chain were lower in the

year as a result of weaker demand in line

with softer economic conditions. While

prices declined over the course of the year,

our service and product offering, and high

level of integration resulted in 2023 pricing

remaining, on average, similar to 2022

levels. Current pricing is below average

2023 price levels. In kraft paper, we are

implementing price increases on the back

of improving order books which we expect

to take effect from the second quarter of

2024.

Consumer Flexibles and Functional Paper

and Films delivered a stable financial

performance as we continue to offer our

customers a broad range of innovative

packaging solutions.

#### Investing for growth

We continue to invest across our platform.

We are making good progress with our

€400 million investment in a new 210,000

tonne per annum kraft paper machine at

Štětí (Czech Republic) with start-up

expected in 2025 and ramp up to 2027,

together with a number of investments

across our converting plant network which

remain on track and on budget. These

projects include expanding and upgrading

the global reach of our paper bag network,

investments to consolidate our leading

position in European pet food packaging,

and projects to enhance our European

coating capabilities.

In addition, we have recently completed the

acquisition of the Hinton Pulp mill in Alberta

(Canada) for a total consideration of USD 5

million. The mill has the capacity to produce

around 250,000 tonnes of pulp per annum

and will provide the Group with access to

local, high-quality fibre from a well-

established wood basket.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 31 |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
|  | Examples of our products |  |  |  |
|  | MailerBAG  A sustainability-focused, patented  paper bag for eCommerce shipments  that offers cost efficiency and  customer experience. Available in  a wide range of designs and sizes. |  | FlexiBag Recyclable  A fully recyclable, mono-material bag  with convenient features and barrier  properties suited for dry food and  pet food. |  |
|  | e-shopMailerBag_03_FullRes_300dpi_AdobeRGB_retouched_crop.png |  | FlexiBag Recyclable_shadow_crop.png |  |
|  |  |  |  |  |

![45079976739330]()

Share of Group

underlying

EBITDA

### Uncoated Fine

### Paper

|  |
| --- |
|  |
| Underlying EBITDA  (€ million)  €289 million  (2022: €427 million) |

#### What we produce

Our Uncoated Fine Paper business

produces a wide range of home, office,

converting and professional printing papers

at our mills in central Europe and South

Africa. We are the supplier of choice for

our customers, leveraging our leading

positions in these regions. In South Africa,

we also produce and sell market pulp to

customers around the world.

#### Performance during the year

Uncoated Fine Paper delivered underlying

EBITDA of €289 million in the year, down

32% (2022: €427 million) largely due to

lower selling prices. Underlying EBITDA

margin was 22.4%. Our geographic and

product diversification supported our

performance with higher uncoated fine

paper and pulp sales volumes in South

Africa mitigating lower European volumes.

European uncoated fine paper market

demand was significantly lower compared

to the prior year driven by weak economic

conditions. Selling prices declined during

the year, however the rate of decline

slowed as we progressed through the

period. We successfully implemented price

increases in early 2024.

In response to the ongoing structural

decline in demand for uncoated fine paper

in Europe, we streamlined production by

permanently closing an uncoated fine

paper machine at our unintegrated

Neusiedler operations in Austria during the

year.

In South Africa, uncoated fine paper market

conditions were broadly stable on the prior

year. The business received income from

an insurance claim in the year relating to

the floods in South Africa during 2022.

Pulp sales volumes were higher following

the start-up of the rebuilt recovery boiler at

our integrated Richards Bay mill (South

Africa) in the prior year. Market pulp prices

declined sharply during the year followed

by modest increases towards the end of

the year.

The non-cash forestry fair value gain was

lower in the year at €128 million (2022:

€169 million).

Our Uncoated Fine Paper business remains

well placed, with our customers valuing us

as a supplier of choice and recognising the

strength of our leadership positions,

underpinned by a broad product portfolio,

integrated asset base and excellent service.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 32 |
|  |  |  |

#### Business unit trading review

#### continued

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
|  | Examples of our products |  |  |  |
|  | Color Copy original  The leading digital colour printing  paper, with an exceptional  environmental profile, offering  unbeatable quality from A4 to extra  long digital formats enabling endless  creative possibilities. |  | IQ ALLROUND ENVELOPE  Sustainably produced paper with  perfect runnability and consistent  quality, ideal for high-volume envelope  production. |  |
|  | Color Copy original A4 100 with C2C sticker_3_recrop.png |  | kuvert_allround_shadow+PACKSHOT-PRO-Rolle ALLROUND_shadow_comp_crop.png |  |
|  |  |  |  |  |

![45079976739292]()

Share of Group

underlying

EBITDA

### Embedding sustainability across our

### business units

Sustainability is central to our strategy and intrinsic in the way we operate. We promote an entrepreneurial culture that empowers each

business unit to take the necessary actions to contribute towards meeting our ambitious  MAP2030 sustainability targets. Some of our

recent initiatives include:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  |  |  | DR2908_18_crop.jpg |
|  | Turning residues into resources  Corrugated Packaging  We have an ambition to eliminate waste to landfill.  We aim to find alternative uses for by-products from  our manufacturing processes including as secondary raw  materials. At our Kuopio mill in Finland, we partnered with  Soilfood, a manufacturer of soil improvement products for  agriculture, to utilise the fibre residues produced by the mill  for landscaping, with around 42,000 tonnes of fibre residues  used in 2023. |  |
|  |  |  |
|  |  |  |  |
|  |  |  | 221118_STETI_2_PM5-7_1177.jpg |
|  | Fo(u)r Safety programme at Štětí  Flexible Packaging  Our approach to safety includes physical, psychological  and cultural elements, ensuring we can anticipate,  prepare and react accordingly through balancing safety  controls, people and culture. During the year, our Štětí mill  in Czech Republic reviewed and updated its Fo(u)r Safety  programme by engaging with young colleagues from our  future leaders programme and selected line managers to  promote the programme and increase awareness of it.  Since the update, the participation rate in group intervention  and stopping each other from unsafe acts almost doubled,  contributing to an improvement in our culture across the mill. |  |
|  |  |  |
|  |  |  |  |
|  |  |  | 221130_HILTON_FOREST_0171_edit_crop.jpg |
|  | Promoting sustainable forestry  in South Africa  Uncoated Fine Paper  In South Africa, we continue to maintain our FSC and PEFC  certification for  100% of our forestry landholdings and have  an opportunity to lead the way in developing best practice  silviculture and other forest management practices to  promote tree growth and resilience. We go beyond our  own landholdings and empower other landowners, especially  smallholders, through our Mondi Zimele programme. In 2023,  192,801 tonnes of wood were sourced from small growers  (1-10 ha. landholdings) and 2.4 million seedlings distributed  in the planting season. |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 33 |
|  |  |  |

![Empowered_people_rgb_white_pin-01.svg]()

![Taking_action_on_climate_rgb_white_pin.svg]()

![Circular_driven_solutions_rgb_white_pin-01.svg]()

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| SR_Fin_Review_MikePowell.jpg | |  | Financial performance | | |
|  | € million, except for percentages and per share measures | 2023 | 2022 |
|  | Group revenue | 7,330 | 8,902 |
|  | Underlying EBITDA | 1,201 | 1,848 |
|  | Underlying EBITDA margin (%) | 16.4% | 20.8% |
|  | Depreciation, amortisation and impairments (underlying) | (411) | (405) |
|  | Underlying operating profit | 790 | 1,443 |
|  | Special items (pre-tax) | (27) | 242 |
|  | Operating profit | 763 | 1,685 |
|  |  |  |  |
|  | Underlying operating profit | 790 | 1,443 |
|  | Net (loss)/profit from joint ventures | (5) | 1 |
|  | Impairment of investments in joint ventures | (5) | — |
|  | Net monetary gain arising from hyperinflationary economies | 2 | 17 |
|  | Mike Powell  Group  CFO |  | Net finance costs | (73) | (143) |
|  | Underlying profit before tax | 709 | 1,318 |
|  | Underlying tax charge | (167) | (296) |
|  |  |  | Effective tax rate (%) | 23.6% | 22.5% |
|  |  |  | Non-controlling interests | (19) | (73) |
|  |  |  | Underlying earnings attributable to shareholders | 523 | 949 |
|  |  |  | Basic earnings per share (euro cents) | 103.5 | 244.5 |
|  |  |  | Basic underlying earnings per share (euro cents) | 107.8 | 195.6 |
|  |  |  | ROCE (%) | 12.8% | 23.7% |
|  |  |  |  |  |  |
|  |  |  | Financial position |  |  |
|  |  |  | € million | 2023 | 2022 |
|  |  |  | Property, plant and equipment | 4,619 | 4,167 |
|  |  |  | Goodwill | 765 | 769 |
|  |  |  | Working capital | 1,084 | 1,282 |
|  |  |  | Other assets1 | 673 | 2,034 |
|  |  |  | Other liabilities2 | (626) | (987) |
|  |  |  | Net assets excluding net debt | 6,515 | 7,265 |
|  |  |  | Equity | 5,655 | 5,794 |
|  |  |  | Non-controlling interests in equity | 441 | 460 |
|  |  |  | Net debt | 419 | 1,011 |
|  |  |  | Capital employed | 6,515 | 7,265 |
|  |  |  |  | | |
|  |  |  | Notes: |  |  |
|  |  |  | 1 Includes assets held for sale of €nil (2022: €1,382 million).  2 Includes liabilities directly associated with assets held for sale of €nil  (2022: €325 million).  This section includes Alternative Performance Measures which are defined on pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579). | | |
|  |  |  | All figures presented and commentary provided in this section are related to the Group’s continuing operations  only unless otherwise specified. | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 34 |
|  |  |  |

#### Financial review

## Strong cash generation and robust balance sheet

#### Group performance

Mondi delivered Group revenue of €7,330

million (2022: €8,902 million) and

underlying EBITDA of €1,201 million (2022:

€1,848 million) resulting in a lower

underlying EBITDA margin at 16.4% (2022:

20.8%).

Overall sales volumes and selling prices

were lower compared to the previous year.

So far in 2024, selling prices are lower than

average 2023 prices levels. We are seeing

improvements in our order books and

implementing price increases across our

range of paper grades.

Input costs were lower compared to the

prior year with higher wood unit costs more

than offset by lower energy and paper for

recycling costs. Wood prices declined over

the course of the year from their peak

levels recorded in early 2023 but remained,

on average, higher than the prior year.

Following record levels in 2022, energy

prices in Europe reduced and remained

materially lower in 2023. Paper for recycling

prices were also significantly lower. As we

enter 2024, input costs are broadly stable

compared to the end of 2023, and below

average 2023 price levels.

Personnel, maintenance and other net

operating expenses were lower in the year

with ongoing cost reduction initiatives and

insurance income more than offsetting

inflationary cost pressures. The non-cash

forestry fair value gain was €128 million

(2022: €169 million).

Depreciation, amortisation and impairment

underlying charges of €411 million were

broadly similar to the prior year (2022:

€405 million). We expect a charge in 2024

of around €425-450 million.

Net finance costs of €73 million were lower

than the prior year (2022: €143 million)

driven by an increase in investment income

as a result of higher cash balances and

interest rates, and currency mix effects. In

2024, following the special dividend

distribution and related decrease in

investment income, we expect net finance

costs of around €100 million.

The Group recognised a €27 million special

item charge (before tax) in the year in

respect of the closure of a paper machine

and streamlining capacity of the finishing

lines at the Neusiedler operations in Austria

(2022: €242 million gain before tax in

respect of the sale of the Personal Care

Components business).

The underlying tax charge for the year was

€167 million (2022: €296 million) giving an

effective tax rate of 23.6% (2022: 22.5%). In

2024, we expect an effective tax rate of

around 23-24%.

Basic underlying earnings per share were

107.8 euro cents (2022: 195.6 euro cents)

reflecting the lower profitability in the year

mitigated by lower net finance costs. After

taking the effect of special items into account,

basic earnings per share were 103.5 euro

cents (2022: 244.5 euro cents).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Underlying EBITDA development  (€ million) | | | | |
|  |  |  |  |  |
| Movement in net debt  (€ million) | | | | |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 35 |
|  |  |  |

![1649267441762]()

![1649267441790]()

0.5x

Net debt to

underlying

EBITDA

0.3x

Net debt to

underlying

EBITDA

Investment in the business comprises capital expenditure (including forestry assets and intangible assets) and the Duino mill acquisition.

#### Cash flow

Cash generated from operations was

€1,312 million (2022: €1,292 million),

reflecting the Group's continued strong

cash-generating capability. Working capital

improved with a net inflow of €229 million

in the year on the back of lower inventory

levels (2022: outflow of €419 million). As a

percentage of revenue, working capital

ended the year at 14.8% (2022: 14.4%),

slightly above our 12-14% through-cycle

range, as expected at this point in the

cycle.

Capital expenditure was in line with our

expectations, at €830 million (2022:

€508 million) as a result of investing in our

organic growth projects directed towards

growing our packaging businesses. We

expect our total capital expenditure in 2024

to be €800-900 million as we continue to

invest in our organic growth projects.

Thereafter, in the absence of further

significant organic growth opportunities, we

would expect capital expenditure to trend

towards depreciation levels following the

completion of our current approved

projects.

Tax paid was €178 million (2022: €196

million) and total interest paid was €103

million (2022: €127 million) including

derivative interest. We paid ordinary

dividends to shareholders of €345 million

(2022: €321 million) in the year.

The Group received proceeds of

€806 million from the disposal of its

Russian operations in the year. After taking

into account the associated transaction and

other costs, the Group distributed the net

proceeds by way of a €1.60 per share

special dividend to shareholders on 13

February 2024.

#### Discontinued operations'

#### disposal and distribution of net

#### proceeds with share

#### consolidation

The Group's previously owned Russian

operations were, since June 2022,

accounted for as discontinued operations.

In June 2023, the Group received proceeds

of €30 million following the completion of

the sale of its three Russian packaging

converting operations and in October 2023,

the Group completed the sale of the

Syktyvkar mill, its most significant facility in

the country, and received proceeds of

€776 million from the disposal. These

disposals concluded the Group's exit from

Russia.

The loss after tax from discontinued

operations was €655 million in the year.

This included a loss on disposal, net of

related transaction costs and tax, of

€756 million, of which €633 million related

to the reclassification of the foreign

currency translation reserve, which was

recycled through the income statement on

the date of disposal.

The net proceeds, comprising total

proceeds as outlined above of

€806 million, less the associated

transaction and other costs, were

distributed to shareholders on 13 February

2024 by way of a special dividend of €1.60

per share.

Refer to note 28 in the notes to the

consolidated financial statements for

further information.

Following the approval of the special

dividend in early 2024, and in order to

maintain comparability of Mondi’s share

price before and after payment so far as

possible, the Group completed a share

consolidation on 29 January 2024 whereby

shareholders received 10 new ordinary

shares for every 11 existing ordinary shares

held.

#### Disciplined capital allocation

#### Strategic financial priorities

We believe that a strong and stable

financial position, supported by an

investment grade credit rating, increases

our flexibility and provides access to capital

markets through the business cycle. This in

turn allows us to invest through the cycle

and take advantage of strategic

opportunities when they arise. To deliver on

our strategy, we maintain an appropriate

capital structure with a balance between

equity and net debt.

We are focused on undertaking selective

organic capital investment opportunities in our

packaging businesses and supporting the

ordinary dividend. To the extent we have

capacity beyond these requirements, we are

able to consider acquisitions and/or additional

shareholder distributions. We remain focused

on allocating capital while maintaining solid

investment grade credit metrics.

#### Ordinary dividend

We have a disciplined capital allocation

policy ensuring we can invest in the

business through the cycle for long-term

growth and deliver attractive returns, while

supporting the ordinary dividend.

The Board has recommended a final 2023

ordinary dividend of 46.67 euro cents

per share. The final dividend, together with

the interim dividend, amount to a total

dividend for the year of 70.0 euro cents

per share, in line with 2022 (70.0 euro cents

per share). Maintaining the dividend per

share in line with last year reflects our

strong cash flow, robust balance sheet and

the Board’s confidence in the future of the

business.

The final dividend is subject to the approval

of the shareholders of Mondi plc at the

Annual General Meeting scheduled for

Friday 3 May 2024 and, if approved, will be

paid on Tuesday 14 May 2024 to

shareholders on the register at the close of

business on Friday 5 April 2024.

#### Managing our financial risks

#### Our capital structure

Capital employed is used to fund our

business and is managed on a basis that

enables the Group to continue trading as

a going concern, while delivering attractive

returns to shareholders.

We maintain an appropriate capital

structure, with a balance between equity

and net debt, in order to sustain our

investment grade credit rating. We have

diverse sources of funding with various

debt maturities.

The primary sources of the Group’s liquidity

include our €3 billion Guaranteed Euro

Medium Term Note Programme, our €750

million syndicated revolving credit facility

and financing from various banks and other

credit agencies, thus providing us with

access to diverse sources of debt financing

with varying debt maturities.

#### Liquidity, treasury and borrowings

Mondi retains a strong financial position.

Including receipt of the proceeds from the

disposal of the Group's Russian operations,

net debt at 31 December 2023 was

€419 million, with net debt to underlying

EBITDA at 0.3 times (31 December 2022:

€1,011 million, 0.5 times). Adjusting for the

special dividend paid in February 2024, the

pro-forma net debt and net debt to

underlying EBITDA was €1,195 million and

1.0 times, respectively.

At 31 December 2023, Mondi's liquidity

position was €2.3 billion, comprising €754

million of undrawn committed debt facilities

and cash and cash equivalents of €1,592

million. Adjusting for the special dividend

paid in February 2024, the Group retains a

strong liquidity position of €1.6 billion. The

weighted average maturity of the Group's

committed debt facilities was 2.8 years at

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 36 |
|  |  |  |

#### Financial review

#### continued

the end of the year with the only significant

short-term repayment relating to the

Group's €500 million Eurobond that

matures in April 2024. Our financing

agreements do not contain financial

covenants.

The Group maintained its investment grade

credit ratings. In May 2023, Standard &

Poor’s upgraded the Group's credit rating

from BBB+ to A- (stable outlook). Moody’s

Investors Service reaffirmed the Group's

credit rating at Baa1 (stable outlook) during

the year.

#### Currencies

Our global presence results in exposure to

foreign exchange risk in the ordinary course

of business. Currency exposures arise from

commercial transactions denominated in

foreign currencies, financial assets and

liabilities denominated in foreign currencies

and translational exposure on our net

investments in foreign operations.

Our policy is to fund subsidiaries in their

local functional currency wherever practical.

External funding is obtained in a range of

currencies and, where required, converted

into the subsidiaries’ functional currencies

through the swap market.

We hedge material net balance sheet

exposures and committed capital

expenditure. We do not hedge our

exposures to projected future sales or

purchases. We do not take speculative

positions with derivative contracts.

#### Tax

We aim to manage our tax affairs in

accordance with national legislative

provisions and within the guidelines set

down by the Organisation for Economic

Co-operation and Development (OECD).

Our objective is to structure our operations

tax efficiently and take advantage of

available incentives and exemptions

provided by governments for eligible

capital investments, R&D and similar

expenditure. We do not enter into any

artificial arrangements and tax decisions

are made in response to business

transactions and activities.

Our approach to tax is formalised in our

publicly available tax strategy, which the

Board reviews and approves each year.

While ultimate responsibility for the tax

affairs of the Group rests with the Board,

the Executive Committee ensures that the

tax governance framework is aligned with

the principles of financial management

applied throughout the Group. At both

Board and Executive Committee level, the

Group CFO is accountable for the Group’s

tax affairs.

We have dedicated internal tax resources

throughout the organisation, supported by

a centralised Group Tax function that takes

day-to-day responsibility for management

of the Group’s tax affairs. We maintain

a detailed set of operational guidelines

aimed at ensuring a robust tax control

environment. In addition, we seek regular

professional advice to ensure that we

remain up to date with changes in tax

legislation, disclosure requirements and

best practice.

Tax risks are monitored on a continuous

basis and are more formally reviewed on a

half-yearly basis by the Audit Committee

as part of our half-yearly reporting

process. The Board formally reviews tax

management activities on an annual basis.

As Mondi operates in a number of

countries, each with a different tax system,

the Group is regularly subject to routine tax

audits and tax authority reviews which

may take a considerable period of time

to conclude. We maintain a constructive

dialogue with tax authorities, working in

a transparent manner to resolve disputes.

Where necessary, provision is made for

known issues and the expected outcomes

of any negotiations or settlements.

|  |
| --- |
|  |
| Debt maturity profile  at 31 December 2023 (€ million) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |
| --- |
|  |
|  |
| Debt composition  at  31 December 2023 (€ million) |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |
| --- |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |
|  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 37 |
|  |  |  |

![1649267441808]()

|  |
| --- |
|  |
| 559 |
| 24 |
| 1,386 |
| 50 |

![1649267441876]()

|  |
| --- |
|  |
| 1,845 |
| 49 |
| 125 |

|  |
| --- |
|  |
| Listening to and partnering with our diverse stakeholder groups helps us to better understand  external developments and market expectations as well as to identify opportunities and risks.  Our ongoing engagements support transparency and enable us to build strong, trusting relationships. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
| SR_Stakeholder_S172_employees.jpg |  | More than 16,800 employees participated  in our 2023 Employee Survey, providing  feedback on positive experiences and  areas for improvement. We continued  supporting individual career development,  with programmes such as the  International Graduate Programme,  NEXGEN and Mondi Academy.  Employees and contractors across Mondi  completed 503,000 hours of training.  Around 31% of all employees took part  in the Performance and Development  Review process. |  | We continued with D&I initiatives, such  as Curious Community and launched  Employee Resource Groups. Making a  Difference Day took place again across  most of Mondi’s locations. 94% of our  employees worldwide were able to access  the Employee Assistance Programme or  equivalent for support. Safety continued  to be a key priority, but sadly an employee  in our Świecie Corrugated plant (Poland)  and an employee in our Frantschach mill  (Austria) experienced a life-altering injury  this year. |
| Our employees  Key topics raised in 2023  and our response  Themes highlighted centred around  feedback and recognition, diversity  and inclusion, personal development  opportunities, and mental health. |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| iStock-1356386941_crop.jpg |  | In 2023, we conducted Product Impact  Assessments on 1,145 products and  calculated 146 product carbon footprints.  To deepen our understanding of our  customers’ expectations, over 1,700  customers took part in our Customer  Survey. Mondi hosted the ‘Let’s Paper the  World 2023 Summit’ in Sofia (Bulgaria),  with over 110 guests (including industry  professionals, equipment manufacturers,  brand owners, retailers and suppliers). |  | Mondi also convened the first ever  Roundtable for the Circularity of  Paper Bags in Madrid (Spain), with  representatives from the industry  and value chain. We continued our  customer collaboration to develop  solutions to meet customers’ sustainability  goals and maintained our ongoing  collaborations with multi-stakeholder  initiatives, such as 4evergreen, CEFLEX,  and the Ellen MacArthur Foundation. |
| Our customers  Key topics raised in 2023  and our response  Our customer engagement continued  to focus on topics including security  of supply, product quality, the circular  economy, legislative developments,  competitive advantage, carbon emissions  and life cycle-based assessments. |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| iStock-1455755205_crop.png |  | In 2023, we ran the Responsible  Procurement campaign with a pilot group  of 460 Mondi suppliers using EcoVadis.  We hosted our first Supplier Virtual Event  on Net-Zero and our Flexible Packaging  business organised an event on the  future for barrier materials. The safety  of our contractors remained a priority,  particularly during maintenance shuts.  Annual maintenance shuts saw over  22,000 contractors working on our sites,  during which we reported zero  life‑altering injuries and more than  2.2 million hours worked. |  | We sadly report that during normal  operation, we experienced a fatality of a  contractor at Ružomberok (Slovakia) while  operating mobile equipment. A contractor  in our Świecie Corrugated plant (Poland)  and a contractor in our Ružomberok mill  (Slovakia) experienced a life-altering injury  during normal operation. |
| Our suppliers and contractors  Key topics raised in 2023  and our response  Local sourcing, secure contracts and fair  and transparent tender processes are key  topics for our supplier engagement.  There is increasing attention on the  environmental and social performance of  suppliers and contractors. |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 38 |
|  |  |  |

#### Stakeholder engagement and Section 172

H

## ow stakeholder considerations

## shape

## decision-making

![SR_Stakeholder_S172_BG.jpg]()

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  | Stakeholder Engagement Index  In this index, we offer further insights into how we have engaged with different  stakeholder groups, the topics raised and our response. | |  |
|  |  | Visit our website to download  <www.mondigroup.com> |  |
|  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
| _MG_0436_crop.jpg |  | Our mills continued to serve local  communities with power supply,  wastewater treatment and waste disposal  services. In 2023, following earthquakes in  Türkiye and Syria, Mondi produced over  200,000 corrugated boxes to help  governmental organisations providing  relief aid. We also donated €500,000  to help the UN World Food Programme’s  humanitarian aid work in affected areas.  In South Africa, Mondi Zimele continues  to support livelihoods, having helped  34 small and medium enterprises  and supported over 2,240 jobs to date. |  | Mondi Świecie (Poland) established a  programme in which 36 local projects  received a grant. Together with the  Austrian Development Agency and other  partners, we supported the development  of a dual educational programme in  Côte d’Ivoire that combines theoretical  school education with practical training  in companies. We also hosted open  Stakeholder Engagement Conversations  with various local stakeholder groups  in our mill in Ružomberok (Slovakia). |
| Our communities  Key topics raised in  2023  and our response  We invested €7.3 million in social initiatives  supporting health, environmental protection,  education, local enterprise and  infrastructure. |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| iStock-1224381160_crop.png |  | In addition, the divestment of the Group’s  previously owned Russian assets were  discussed. The Group completed the  sale of its operations in the country  in October 2023 with net proceeds  distributed to shareholders in  February 2024 by way of a special  dividend of €1.60 per share.  The Board recommended a final ordinary  dividend for the year which, together with  the interim dividend was in line with last  year at 70.0 euro cents per share. |  | Our discussions included the Group’s  organic investment projects to capture  future growth through capacity expansion  together with investments to improve  our sustainability performance and drive  productivity and efficiency gains. |
| Our investors  Key topics raised in 2023  and our response  During investor meetings, discussions  focused on strategy, capital allocation,  the investment in new capacity expansion  projects and returns. |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
| WEB23_background+Jessica-headshot+Alexander Buck IUFRO_recrop.png |  | We maintained our membership of  the WBCSD’s Forest Solutions Group  and actively supported the development  of the forest sector nature positive  roadmap and catalogue of key  carbonisation actions.  We continued to engage with IUFRO,  focusing on a joint synthesis study on the  drivers for the future supply of forest  goods and services. In 2023, Mondi South  Africa launched a partnership with the  EWT and together worked on an initial  assessment of the biodiversity footprint  of Mondi’s South African plantations. |  | The second version of 4evergreen’s  Circularity by Design Guideline for  fibre‑based packaging was released,  which informed our Path to Circularity  Scorecard update, as well as its updated  Guidance on Collection and Sorting.  Together with industry associations such  as Cepi, FPE and FEFCO, we worked to  shape the industry position and advocacy  strategy towards the Packaging and  Packaging Waste Regulation. |
| Partners and industry  associations  Key topics raised in 2023  and our response  Our partnerships aim to promote solutions  for climate change, biodiversity and water  stewardship, responsible sourcing, circular  economy and food waste. |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 39 |
|  |  |  |

![02-iPad-Air-Landscape-Mock-up_Mondi_SEI_placeholder_crop.png]()

Mondi’s strategic decision-making framework focuses on delivering sustainable value for key

stakeholders, and relies on the quality of the relationships it has with them. The Board’s deliberations

take into account the long-term interests of our stakeholders, along with the impact of our business

and the balance of actions required to deliver sustainable growth.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | Our approach  Mondi  categorises its stakeholders into six key groups  described in the preceding pages and reviews these annually.  As part of the Board’s responsibilities and as a methodology  for maximising the effectiveness of their decisions, the directors  debate stakeholder considerations in the short, medium and  long term, taking account of four key principles:  1. Local and personal engagement  The Board  has determined the most effective and scalable way  of engaging stakeholders is to embed responsibilities throughout  the organisation, while facilitating regular feedback from  colleagues who maintain strong day-to-day relationships with  our stakeholders. The Executive Committee and Sustainable  Development Committee are important mechanisms for  reporting these insights to the Board on a regular basis.  2. Informed decision-making  The Board  seeks to understand the material issues relevant  to stakeholders as they evolve. In addition to the regular  feedback it receives from stakeholders and colleagues, the  Group carries out an established materiality assessment,  which is conducted every three years or more often if needed. |  |  | Two-way dialogue  Understanding the experience and views of employees  and keeping them abreast of the latest business  developments is a key area of focus for the Board.  Mondi’s biennial Employee Survey is the primary tool for  the Board to gain cross-sectional, Company-wide insights  on employee views and issues. This is supported by a  number of engagement mechanisms at more regular  touchpoints which include: employee forums, site visits,  SpeakOut reports from the Group's anonymous  whistleblowing and grievance platform, a rolling programme  of Board presentations and safety reports. In addition  to this, and to further facilitate engagement, independent  non-executive director Sue Clark is responsible for leading  employee engagement on behalf of the Board.  As an example of our approach, during the year Sue Clark  participated in Mondi’s European Communication Forum,  a yearly event that includes employee representatives from  across our plant network in Europe. Senior management  gives presentations on key focus areas and answers  colleagues' questions on the priorities and performance  of the Group.  Topics of interest included the Group's:  – Russian operations (which were divested in 2023)  – Future growth prospects  – Focus on safety  – Approach to sustainability  Sue Clark attended the meeting to understand the views  of employees, later sharing these insights with other non-  executive directors to identify priority areas going forward.  Ongoing meetings were held throughout the year to monitor  developments and gauge progress.  Further details of how the Board approaches stakeholder  engagement can be found on pages [92](#i7e8411646eff4bc0adb55b69313ae28d_467526)-[95](#i7e8411646eff4bc0adb55b69313ae28d_467527) of the  Integrated report 2023 and on page 93 of the Sustainable  Development report 2023. |  |
|  |  |  |  |
|  |  |  |  |  |
|  | 3. Long-term horizons  To grow and protect value, the  Board maintains a long-term  view that stretches beyond the projected tenure of the  directors and considers impacts far into the future. This can be  seen with the longer-term focus of our MAP2030  framework,  the Group's investment pipeline and approach to acquisitions. |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  | 4. Two-way dialogue  Long-term decision-making, trade-offs and the nuances  of local relationships mean it is important not only to take  stakeholders into account at Board level, but to effectively  communicate our actions to them. This is integral to how  Mondi communicates and manages its reputation, supporting  the Board’s focus on promoting the strongest standards  of business ethics and governance. |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Pages 38-41 of this report aim to provide a snapshot of how this approach works and, in doing so, serve as a statement  summarising how  Mondi ’s directors have fulfilled their Section 172 duty in 2023. This includes a summary of who our key  stakeholders are, how we engage with them and how we respond to their interests. |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 40 |
|  |  |  |

#### Stakeholder engagement and Section 172

#### continued

|  |  |
| --- | --- |
|  |  |
|  | Sue Clark's biography  Page [87](#id6f470efcf9445d6be6ab0a9907fd201_19-1-1-1-345044) |

|  |  |
| --- | --- |
|  |  |
|  | Corporate governance report – Stakeholder engagement  Page [92](#i7e8411646eff4bc0adb55b69313ae28d_467526)-[95](#i7e8411646eff4bc0adb55b69313ae28d_467527) |

|  |
| --- |
|  |
|  |
|  |

![Hinton Pulp mill acquisition supports growth in Mondi’s Americas paper bags business_Banner_edited_retouched_crop.png]()

S

### upporting

### growth in Mon

di's

### Americas paper bags business

#### What

 did the

#### Board’s

#### decisio

#### n entail?

In June 2023, the Mondi Board approved

the acquisition of the 250,000 tonne

per annum Hinton Pulp mill in Alberta,

Canada, from West Fraser Timber Co. Ltd.

The Group intends to invest in the mill

to improve productivity and sustainability

performance and, subject to

pre‑engineering and permitting, expand

the facility primarily with a new kraft

paper machine which will integrate our

paper bag operations in the Americas

and support future growth.

#### What was the context

#### for the decision?

– Mondi operates in structurally growing

packaging markets underpinned by demand

for sustainable packaging including industrial

bags for building materials, cement and food

products, and eCommerce MailerBAGs.

– Mondi is a global leader in the production of

paper bags. In the Americas, the Group has a

network of 10 paper bag plants which source

kraft paper from the Group's European mill

network and externally.

– Access to responsibly sourced and

cost‑competitive fibre is a key strategic

focus for the Group to ensure it has security

of supply and remains competitive.

|  |  |
| --- | --- |
|  |  |
|  | Our strategy  Page 20-21 |
|  |  |

#### How did the decision account

#### for stakeholder interests?

The Board based its decision on an in-depth

review of the benefits expected:

– Customers: Increased security of supply from

a reliable partner as well as shorter supply

chains that reduce the carbon footprint of

Mondi’s packaging products in the region.

Kraft paper produced at Hinton will have

the highest quality and strength parameters,

which, in combination with Mondi’s expertise,

helps meet customer demand for sustainable

packaging solutions.

– Employees: The acquisition and intended

investment provide employees and potential

new hires with a clear strategic vision for

the future, career development and training

opportunities.

– Investors: The acquisition and intended

investment will grow the business, deliver

attractive mid-teen returns through the cycle

and unlock growth opportunities for Mondi’s

paper bag operations in the Americas.

– Communities: As one of the largest

employers in the region, the intended

investment offers additional business

and job opportunities.

– Suppliers: Benefit from the continued

procurement of raw materials and services

by the mill to support production.

What were the

#### trade-offs

?

– Investment at Hinton diverts capital from

other potential projects due to the Board's

assessment of the benefits.

– Consideration of changes in demand and

supply market dynamics and their impact

on prices.

– The intended investment will reduce

the amount of market pulp that is sold

to customers as the majority of pulp

produced will be consumed in the

production of kraft paper.

– The additional workload for employees

and resources available to execute the

project in a remote area.

#### What was the outcome

#### of the decision?

The directors approved the acquisition of the

Hinton pulp mill. The acquisition and intended

investment secure Hinton’s long-term future

through capital investment, expanded capacity,

enhanced product quality, and environmental

improvements. These benefits will contribute

positively to the Group’s overall performance,

and strengthen its position as the global leader

in kraft paper and paper bags.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 41 |
|  |  |  |

![Advantage Speed_Advantage_One_e-shopMailerBag_MAIN_3000px_300dpi_AdobeRGB_shadow_crop.png]()

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| The Mondi Action Plan 2030 (MAP2030) sets out the actions, targets and milestones we need  to achieve to meet our ambitious 2030 sustainability commitments. It is a framework built on our  purpose of contributing to a better world by making innovative packaging and paper solutions  that are sustainable by design. | | | | | |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | Our approach  By concentrating on circular driven solutions,  created by empowered people, taking action  on climate we can have the most positive  impact through our business.  These three action areas are supported  by a set of responsible business practices  covering human rights, communities,  responsible procurement and  environmental performance. Each area  has commitments and targets for 2030,  with some milestones set for 2025.  We engage with our stakeholders  to ensure we remain focused on the  most important topics, including through  our materiality process.  We conducted our most recent materiality  assessment in 2023, details of which can  be found on the next page. | | 03_MAP2030 visualisation artwork_IR23_outline.svg | |  |
|  |  | Circular Driven Solutions  Page [45](#i47a6727b8bad4fe28addb4dae187e293_5771)-[47](#iee65342b54cb43a2aa5399ec76ec1ddb_2-1-1-1-467371) |  |
|  |  | Empowered People  Page [48](#i47a6727b8bad4fe28addb4dae187e293_5795)-[50](#i989e19b834f344c0aff2915d48a2e7d3_146686) |  |
|  |  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) | Built on responsible business practices  Human Rights | Communities | Procurement | Environmental Performance | |  |
|  |  |  |  |  |  |

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  | We are recognised as a leader in sustainability by external corporate ratings and indices | | | | | | | |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  | Forests AND Water A List stamp 2023_crop_RS.png |  | MSCI_ESG_AAA__crop.png |  | Prime Label_Corporate Responsiblity 2.png |  | sustainalytics-badge.png |  |
|  | CDP  A list, with double 'A' score for  forests and water security and  an 'A-' score for climate change |  | MSCI ESG Rating  Top 'AAA' score for strong  resilience to environmental,  social and governance risks |  | ISS ESG  'Prime' rating as the highest  sector-specific score for ESG  performance |  | Sustainalytics  Ranked #1 in Paper and Forestry  industry out of 81 companies in  the sector (September 2023) |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  | FTSE4Good Logo cutout.png |  | EcoVadis Medal 2023.png |  |  |  | Transition Pathway Initiative  Highest climate change score in  the paper sector  – Management Quality:  Level 4 rating  – Carbon performance aligned  with Paris Pledges |  |
|  | FTSE4Good Index Series  Member of Index Series,  demonstrating strong  ESG practices |  | EcoVadis  Platinum status as one  of the top 1% globally  in EcoVadis Corporate Social  Responsibility ratings |  | WBCSD's Reporting Matters  Included in ‘Top performer’  category since 2018 by WBCSD  and Radley Yeldar |  |  |
|  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 42 |
|  |  |  |

#### Mondi Action Plan 2030

## Our sustainability framework

![MAP2030_mondi_brush_yellow-mint-5_crop.png]()

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Our double materiality assessment | | | | | |  |
|  | Focusing on what matters most  Our materiality approach helps us  to gain insights on our stakeholders’  views on key environmental, social  and governance topics. We respond  to and report on the most important  sustainability risks and opportunities  across our business.  In 2023, we conducted a double  materiality assessment to prepare  for the reporting requirements of  the European Union’s Corporate  Sustainability Reporting Directive  (CSRD). This new framework, based  on the European Sustainability  Reporting Standards (ESRS),  significantly expands the scope of  topics that companies must report  on and aligns with our longstanding  commitment to comprehensive  and transparent disclosure.  We consider sustainability topics as  material when they meet the criteria  under the double materiality concept  of being either or both:  – Impact material: our actual or  potential impacts on people  or the environment.  – Financially material: sustainability  information, risks and opportunities  which, if left out, misrepresented  or hidden, could influence  financial decisions. | |  | Methodology  The double materiality process involved  compiling an issues list, conducting  desk-based research, and engaging  with stakeholders to validate topics.  This included interviews with external  stakeholders and a survey with a  77% response rate from internal  and external parties. We conducted  a financial materiality assessment  to identify material effects for each  topic, considering impacts on our  resources and relationships. Outcomes  were reviewed with Mondi experts  to ensure they are aligned with their  understanding of our business.  Outcomes  Our material topics are relatively  consistent with our 2021 assessment,  but several have grown in importance,  such as working conditions and human  rights, and water.  We have identified 10 material topics:  six are environmental; the remaining  four are: working conditions  and human rights; diversity, equity  and inclusion; product safety  and quality; and business conduct.  Environmental topics are highlighted  in our outward impacts, given our  reliance on natural resources and  energy consumption in manufacturing.  Climate change mitigation was the top  priority, particularly for customers  and investors paying close attention  to our Net-Zero progress. |  | Circularity was most important topic  for our customers. They see Mondi as a  trusted supplier of fibre-based products  and rely on our policies for responsible  sourcing and human rights practices.  Material topics  Circular_driven_solutions_icon.svg  Circular-Driven Solutions  – Circular economy  – Product quality and safety  Empowered_people_icon.svg  Created by Empowered People  – Diversity, equity and inclusion  – Working conditions and human rights  Taking_action_on_climate_icon.svg  Taking Action on Climate  – Climate change mitigation  – Climate change adaptation 1  – Energy  – Biodiversity and fibre sourcing  – Water  Responsible Business Practices  – Business conduct1  1  Only financially material. |  |
|  |  | Read more about our double  materiality process in our 2023  Sustainable Development report  [www.mondigroup.com/sd23](https://www.mondigroup.com/sd23) |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  | External assurance  Environmental Resources Management  Certification and Verification Services  (ERM CVS) provides assurance on  selected information and KPIs, as  well as checking that our Sustainable  Development report is in accordance  with the GRI Universal Standards (2021)  and the SASB: Containers & Packaging  Industry Standard, and that information  included in our Integrated report is  consistent and comparable.  The signed ERM CVS Independent  Assurance Report will be found in our  2023 Sustainable Development report. |  |  |  | Our Sustainable Development  reporting suite  Visit our website to find our full suite of detailed  sustainability insights, including our 2023:  – Sustainable Development report  – Consolidated Performance data (pdf)  – Consolidated Performance data (spreadsheet)  – Sustainable Development Goals (SDGs) index  – GRI & SASB index  – GRI Biodiversity disclosures  – Stakeholder Engagement index | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  | 02-iPad-Air-Landscape-Mock-up_Mondi_SDr_Cover_2023_crop.png |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  | Link_White_icon.svg | Sustainability reports and publications  [www.mondigroup.com/sustainability/reports-and-](https://www.mondigroup.com/sustainability/reports-and-publications)  [publications](https://www.mondigroup.com/sustainability/reports-and-publications) |  |
|  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 43 |
|  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | | |
| Innovative packaging and paper  solutions that keep materials  in circulation and prevent waste | | |
|  | 2023 performance | |
| Make our packaging and paper  solutions reusable, recyclable  or compostable | |  |
| – 100% of our packaging and paper  products are reusable, recyclable  or compostable by 2025 | |  |
|  |  |  |
|  |  |  |
| Avoid waste by keeping materials  in circulation | |  |
| – Eliminate waste to landfill from  our manufacturing processes | |  |
|  |  |  |
|  |  |  |
| Work with others to eliminate  unsustainable packaging | |  |
| – Progress made through our  partnerships and stakeholder  engagement activities every year | |  |
|  |  |  |
|  |  |  |
|  | Circular Driven Solutions  Page [45](#i47a6727b8bad4fe28addb4dae187e293_5771)-[47](#iee65342b54cb43a2aa5399ec76ec1ddb_2-1-1-1-467371) |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
| People.svg | | |
| An empowered and inclusive  team that contributes to a  better world | | |
|  | 2023 performance | |
| Build skills that support long-term  employability | |  |
| – Enable our employees to  participate in upskilling  programmes | |  |
|  |  |  |
|  |  |  |
| Provide purposeful employment  for all our employees in a diverse  and inclusive workplace | |  |
| – Achieve 90% Purpose Satisfaction  score in our Employee Survey | |  |
| – Achieve 90% Inclusiveness score  in our Employee Survey | |  |
| – Employ 30% women across Mondi | |  |
|  |  |  |
|  |  |  |
| Create an environment that enables  a positive work-life experience,  valuing our safety, health and  mental wellbeing | |  |
| – Zero fatalities | |  |
| – Zero life-altering injuries | |  |
| – 15% reduction of Total Recordable  Case Rate | |  |
| – Support our employees in pursuit  of a work-life experience that  enhances their wellbeing | |  |
| – Our operations drive awareness  of and take measures to improve  health and mental wellbeing | |  |
|  |  |  |
|  |  |  |
|  | Empowered People  Page  [48](#i47a6727b8bad4fe28addb4dae187e293_5795)-[50](#i989e19b834f344c0aff2915d48a2e7d3_146686) |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | | |
| Climate resilience through our  forests and operations for the  future of the planet | | |
|  | 2023 performance | |
| Reduce our greenhouse gas emissions  in line with science-based Net-Zero  targets | |  |
| – Reduce Scope 1 and 2 GHG  emissions by 46.2% by 2030  from a 2019 baseline | |  |
| – Reduce Scope 3 GHG emissions by  27.5%  by 2030 from a 2019 baseline | |  |
| – Reduce Scope 1, 2 and 3 GHG  emissions by 90% by 2050 from  a 2019 baseline | |  |
|  |  |  |
|  |  |  |
| Maintain zero deforestation in  our wood supply, sourcing from  resilient forests | |  |
| – Maintain 100% FSCTM  certification  in our own forest landholdings | |  |
| – 100% responsibly sourced fibre with  75% FSCTM - or PEFC-certified  fibre procured by 2025 and the  remainder meeting the FSC  Controlled Wood standard | |  |
| – Implement leading forestry  measures to ensure productive  and resilient forests | |  |
|  |  |  |
|  |  |  |
| Safeguard biodiversity and  water resources in our operations  and beyond | |  |
| – Conduct water stewardship  assessments at our mills and  forestry operations by 2025, and  implement required actions to  address the findings by 2030 | |  |
| – Conduct biodiversity assessments  at our mills and forestry operations,  introducing biodiversity action plans  where necessary by 2025 | |  |
|  |  |  |
|  |  |  |
|  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |  |

|  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |
| Key |  | Completed |  | On track |  | Behind target |  | Not on track |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 44 |
|  |  |  |

#### Mondi Action Plan 2030



#### continued

2023

## performance at a glance

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  | Mondi_e-shop_EnvelopeMailer_crop.jpg |
|  | Circular_White.svg | |  |
|  |  | |  |
|  | Our ambition is to keep materials in  circulation, eliminate waste and support a  regenerative, low-carbon circular economy.  We innovate and design products that  navigate the complexity of transitioning  to sustainable packaging. | |  |
|  |  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Commitment: Make our packaging and paper solutions reusable, recyclable or compostable | | | | | |  |
| Target | Performance against baseline | | | This year at a glance | | |
| 2021 | 2022 | 2023 |
| 100% of our packaging and paper products  are reusable, recyclable or compostable  by 2025 |  |  |  | The percentage of reusable, recyclable or compostable  products based on revenue has increased to 85%, up  from 74% in 2020, our baseline year. | | |

Sustainability is at the centre of our

innovation and R&D. We develop

packaging and paper solutions with

a sustainable end-of-life to address

the global challenges of climate change

and plastic pollution by using natural

resources wisely, keeping materials

in circulation and eliminating waste.

As increasing regulation and customer

demand accelerate the transition to circular

solutions, we are doing everything in

our power to support this evolution.

We believe we can help drive a circular

economy for packaging and maximise our

impact by focusing on areas in our control.

In 2023, 85% of our products were

reusable, recyclable or compostable, based

on revenue (82% in 2022). Our focus is

on our Flexible Packaging business, as

our Corrugated Packaging and Uncoated

Fine Paper businesses are already at 100%.

By the end of 2023, we had a sustainable

alternative in place, or identified and

undergoing development, for 94% of

our Flexible Packaging products based on

revenue.

Nevertheless, several challenges remain,

and the speed of conversion to more

sustainable solutions in the market make

it challenging to achieve our target in 2025.

Contributing factors are: long qualification

times, such as shelf life testing for food

packaging, uncertainty related to evolving

legislation slowing down the adoption

of circular solutions and necessary

investments or retrofits to update older

packaging lines for circular alternatives

are slow in the face of high inflation

and slow economic growth.

For a Mondi product to be ‘circular,’ it must be

designed with a sustainable end-of-life, and

meet defined parameters. Our Sustainable

Design Principles support our innovation.

Our Path to Circularity Scorecard

measures our progress against our

reusable, recyclable or compostable

product commitment. We review and

update the scorecard annually to reflect

developments in technologies, industry

guidelines and legislation. We also

assess product impacts through our life

cycle‑based tools.

|  |
| --- |
|  |
|  |
|  |
| Products assessed in our Product  Impact Assessment life cycle tool  1,145 |

The ‘European Green Deal’ action plan,

including  the Packaging and Packaging

Waste Regulation and the Eco-Design

for Sustainable Products Regulation, aims

to make sustainable goods, services and

business models the norm. We believe

that a harmonised legal framework levels

the playing field and benefits companies

whose strategies integrate sustainability

into their business model, to create value

in a resilient, low-carbon circular economy.

#### Key initiatives and progress in

2023

– In 2023, the percentage of reusable,

recyclable or compostable products

based on revenue increased to 85%

(82% in 2022). Read more about our

Scorecard on page 25 of our 2023

Sustainable Development report.

|  |
| --- |
|  |
|  |
| Reusable, recyclable or compostable  products  (% of Group revenue) |
|  |
|  |
|  |
|  |
|  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 45 |
|  |  |  |

![21440476741767]()

baseline

#### Key initiatives and progress in

2023

– We are enhancing our life cycle-based

tools to help our customers make

sustainable packaging choices. In 2023,

we conducted impact assessments (PIA)

on 1,145 products and calculated

146 product carbon footprints (PCF), a

significant increase to the previous year.

– In 2023, we engaged an independent

third-party organisation to critically

review our PCF and PIA tools, including

our calculation, data sources and process

approach. Our tools are confirmed to

be in accordance with ISO 14040/44,

ISO 14067 and the Greenhouse Gas

Protocol Product. Life Cycle Accounting

and Reporting Standard.

– We invested €21 million in research

and development to improve our

process technologies, energy and

material efficiency. We also benefit

from innovative research infrastructure

and capabilities at the Mondi Labs Food

Safety Laboratory and our in-house

recyclability testing laboratory at

Mondi Frantschach.

– In our 2023 Customer Survey, over

1,700 customers took part. Topics

perceived as important included

renewable materials, plastic reduction

and recyclability. Among the reasons

why customers value Mondi were quality,

reliability, product performance and

sustainability.

– We continue to support skills

development through our

sustainability‑targeted training

programme, with 1,624 participants

(2022: 1,152) joining sustainability training

sessions in the Sustainable Development

Academy and the new Growth Gym

initiative within Flexible Packaging.

Our employees completed 3,141 hours

of training (2022: 2,122) on topics such

as recyclability of paper and plastic,

assessing product impacts, human

rights and our Net-Zero journey.

Read more on page 27 in our

Sustainable Development report.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Commitment: Avoid waste by keeping materials in circulation | | | | | |
| Target | Performance against baseline | | | This year at a glance |  |
| 2021 | 2022 | 2023 |
| Eliminate waste to landfill from  our manufacturing processes |  |  |  | In 2023, we achieved an exceptional performance to reduce  our total waste to landfill by around 50,600  tonnes, a 44%  reduction in specific waste to landfill since 2020. | |

We view waste disposed to landfill

as a lost resource and have developed

a sophisticated waste management

system to avoid waste. This encompasses

a  review of how we design our products,

to the selection of raw materials, to reuse

or recycling of by-products.

We are making progress towards our

ambition of eliminating waste to landfill

from our manufacturing. In 2023, we

achieved an exceptional performance and

reduced our total waste to landfill by

around 50,600 tonnes. Since 2020, we have

achieved a reduction of specific waste to

landfill of 44%, mainly by reusing the

effluent fibre from our Richards Bay mill

as landfill cover. We also adjusted

our lime kiln and recovery process

at our Ružomberok mill to avoid

landfilling lime mud and instead allow

reuse of the secondary raw material

by a cement producer.

The reuse of waste generated in our

production processes includes using

secondary raw materials within our own

organisation and through collaboration

with our customers.

During production, we investigate how

we can reuse secondary by-products as

potential raw materials, rather than sending

them to landfill and thus losing their value.

For example, biomass-based chemicals

such as tall oil (a by-product from the

wood pulp manufacturing process) can

be used as bio-based fuel for our own

energy generation or sold to other

industries. Tall oil is a renewable-based

chemical for biodiesel for energy

generation and can substitute fossil fuels.

We also explore and use alternatives

for the disposal of waste to landfill, such

as using ash from our bark boilers as a

secondary raw material in the production

of bricks.

In 2023, we completed our studies on

alternative raw material sources from

residues. Unfortunately, none of the new

raw materials investigated offered equal

or better performance with an improved

environmental impact; however, we will

continue our efforts to find ways to keep

materials in circulation and avoid waste.

#### Key initiatives and progress in

2023

– Our R&D teams have worked on a new

conversion technology to turn biogenic

residues into process energy, replacing

fossil fuels and reducing GHG emissions.

In 2023, we conducted pilot trials to

integrate this into a mill process.

– Reducing and eliminating green liquor

dregs is an ongoing challenge at our

mills. We have engineered calcium

carbonate-free filtration technologies for

two mills, which will reduce by half the

amount of green liquor dregs produced.

– We reuse fibre residues from the

wastewater treatment plant of our mill

in Richards Bay (South Africa) as landfill

cover and have found an alternative

use for waste lime mud from our mill

in Ružomberok (Slovakia) in the cement

production process.

|  |
| --- |
|  |
|  |
|  |
| Reduction of specific waste to  landfill from our manufacturing  processes since 2020  44% |

|  |  |
| --- | --- |
|  |  |
|  | Environmental performance  Page [65](#id5b39e30fcb7438c9cb55e47e15b3dae_178070) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 46 |
|  |  |  |

#### Mondi Action Plan 2030

## Circular

## Driven Solutions

#### continued

![CDS_mondi_brush_blue-violet-2-hires_1_crop.png]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Commitment: Work with others to eliminate unsustainable packaging | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| Progress made through our partnerships  and stakeholder engagement activities  every year |  |  |  | Collaborated in cross-value chain initiatives on design  guidelines for circularity, and with our industry association  partners on evolving legislation |

Through collaboration with industry

associations and cross-value chain alliances,

we can drive progress at scale and support

the development of a circular economy.

We collaborate with customers and others

across the value chain to support the

transition to sustainable packaging.

We work together with our customers

to create packaging solutions that are

fit‑for‑purpose and sustainable by design,

leading the way in resource efficiency,

waste reduction and recyclability.

Eliminating food waste is key to this

commitment, and we are developing

suitable packaging to boost food shelf

life without compromising packaging

recyclability, preventing food from

spoiling before it is consumed.

We support and participate in many

external benchmarking initiatives to

promote transparency and improve our

performance. In 2023, Mondi was once

again recognised on CDP’s A List for

leading practices in forestry and water

security, and achieved an A– score in

climate change. We also retained our

platinum rating in the top 1% globally

for EcoVadis.

![IMG_5318_crop.jpg]()

#### Key initiatives and progress in

2023

– We are piloting a new collection and

recycling system for used paper bags

from construction sites in Spain. In

November 2023, Mondi convened the

first ever Roundtable for the Circularity

of Paper Bags, with representatives

from OHLA, Arpada, Saint Gobain, Alier

and others.

– In 2023, the third year of our partnership

with the World Food Programme (WFP),

we developed a Life Cycle Decision

Framework, which will help WFP to

make packaging decisions based on

both effectiveness and sustainability.

– We continued our active engagement

with the 4evergreen cross-value chain

alliance to boost the recyclability of

fibre-based packaging, and supported

the development of the updated

Design for Circularity Guidelines

and the guidance on improved collection

and sorting. Learnings have informed

our Path to Circularity Scorecard

update and our work in our

recyclability testing laboratory at

Mondi Frantschach (Austria).

– The Confederation of European Paper

Industries (Cepi) represents the forest

fibre and paper industry. Our CEO is part

of the Cepi Board and Mondi experts

engage in Cepi's committees, issue

groups and taskforce initiatives. In 2023,

we fed into evolving legislative drafts

and supported development of Cepi

positioning papers for legislative

engagement.

– FEFCO (European Federation of

Corrugated Board Manufacturers)

investigates and analyses economic,

financial, technical and policy issues

relevant to the corrugated packaging

industry. In 2023, Mondi was an active

member of the FEFCO Board, we joined

FEFCO’s Communications Committee

and actively engaged with FEFCO

on evolving the draft of the Packaging

and Packaging Waste Regulation.

– We are a a member of the Ellen

MacArthur Foundation and a signatory

of The Global Commitment, working

to eliminate plastic pollution and

create 100% reusable, recyclable or

compostable packaging by 2025.

Under The Global Commitment we

reported 29% (2022: 31%) of our plastic

packaging (based on weight) as

designed for recycling according

to the CEFLEX design guideline and

our Path to Circularity Scorecard.

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | What’s next in Circular Driven  Solutions? |  |
|  | – Work with our customers and  across our value chain to  accelerate the transition to more  sustainable solutions with our wide  portfolio of paper-based, flexible  plastic and hybrid products.  – Ensure sustainable alternatives are  in place for all packaging solutions  that are not yet recyclable or  compostable, using industry-wide  Design for Circularity Guidelines.  – Explore ways to eliminate waste  from production processes,  improve recyclability of hybrid  packaging solutions and valorise  waste for secondary raw materials.  – Work with cross-value chain  collaborators, industry associations  and other partners to develop  harmonised and improved  collection, sorting and recycling. |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 47 |
|  |  |  |

![MAP2030_2_mondi_brush_cerise-1-hires_1_crop.png]()

![CBEP_mondi_brush_cerise-1-hires_1_crop.jpg]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  | Mirka 2_edit_crop.jpg |
|  | Created_People White.svg | |  |
|  |  | |  |
|  | Mondi employs 22,000 people working in  more than 30 countries. We support our  people in realising their full potential through  upskilling programmes and career  development opportunities, equipping them  for our evolving industry and society. | |  |
|  |  |  |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Commitment: Build skills that support long-term employability | | | | |  |
| Target | Performance against baseline | | | This year at a glance |  |
| 2021 | 2022 | 2023 |  |
| Enable our employees to participate  in upskilling programmes |  |  |  | Mondi colleagues participated in multiple people development  initiatives, including Mondi Academy, talent and graduate  programmes, and performance and development reviews | |

We aim to attract, develop and retain

the right people for each job and make

them feel respected, fairly treated

and empowered to excel in their careers.

Creating and providing lifelong learning

opportunities is part of our responsibility

as a global employer.

The Mondi Academy is our Group-wide

learning hub, featuring expert communities,

functional academies, internal trainers and

mentors. To support our employees’ job

fulfilment and long-term employability,

we provide access to tailored, on-demand

learning in digital, hybrid and face-to-face

formats, and upskilling opportunities

with external education, on-site and

on‑the-job training.

Our learning and development

opportunities cover product portfolios,

business insights, people skills, innovation

and sustainability and we are continuously

increasing our pool of internal trainers and

mentors and updating our learning offering.

We are committed to offering consistent

and fair training, career development

and promotions, including for people

with disabilities.

We create different career opportunities

and targeted development programmes

to everyone at Mondi, irrespective

of position or career level.

As well as a range of development

programmes for employees in the early

stages of their career, we provide

development opportunities for experienced

specialists, targeted training to develop

the required leadership skills for managers

at all levels, and specialised customer

engagement training.

We believe positive engagement,

transparency, assessment and feedback are

key to supporting personal development,

and we encourage a feedback culture

and proactive exchange with our

employees on individual strengths

and areas for improvement.

Performance and Development Reviews

and 360° feedback enable our employees

and their managers to reflect on

individual performance, give structured

feedback and set goals. There are a

number of performance-related pay

schemes that reward employees for the

pursuits and achievement of business

objectives, in which the majority of our

employees participate.

|  |  |
| --- | --- |
|  |  |
|  | Stakeholder engagement  Page [38](#i47a6727b8bad4fe28addb4dae187e293_2707)-[40](#i5551cd485bd640a0b170bc92dc81c138_1-5-11-1-361882) |

Key initiatives and

#### progress

 in 2023

– Employees and contractors across

Mondi completed 503,000 hours

of training (2022: 443,000) with 45%

of hours dedicated to safety.

– Our Sustainable Development Academy

includes new deep-dive sessions and

our Flexible Packaging business unit

launched the ‘Growth Gym’ initiative,

with sustainability as a core pillar.

– In 2023, 31% of our employees took

part in the online Performance

and Development Review process

(2022: 31%).

– Strengthened our talent pipeline through

a range of early career development

programmes including our 18-month

International Graduate Programme (IGP)

and NEXGEN which aims to identify,

connect, develop and inspire the next

generation of Mondi leaders.

– The 12-month Leadership Expedition

and Development Programme equips

mid-level managers with the tools

needed for new ways of working and

to address the challenges of leadership.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 48 |
|  |  |  |

#### Mondi Action Plan 2030



#### continued

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Commitment: Provide purposeful employment for all our employees in a diverse and inclusive workplace | | | | | |
| Target | Performance against baseline | | | This year at a glance |  |
| 2021 | 2022 | 2023 |
| Achieve 90% Purpose Satisfaction score  in our Employee Survey |  |  |  | A 79% score on the Purposeful Workplace Index was achieved  in our 2023 Employee Survey | |
| Achieve 90% Inclusiveness score in our  Employee Survey |  |  |  | A 77% score on the Inclusiveness Index was achieved in our  2023 Employee Survey | |
| Employ 30% women across Mondi |  |  |  | 22.6%  women employed across Mondi, representing a small  improvement since last year (2022: 22.1%) | |

At Mondi, a diverse and inclusive

workplace includes understanding,

accepting and valuing differences

between people. We promote a diverse

and inclusive work culture so our

employees feel they belong.

We engage regularly with our employees,

using formal and informal processes including

our intranet, local engagement sessions,

virtual events for all colleagues, management

dialogues and pulse surveys. We redesigned

our Group-wide Employee Survey to better

capture employee views through more

relatable questions and more effective

measurement indices. We have a new

baseline for our Purposeful Workplace Index,

Inclusiveness Index and – for the first time –

Wellbeing Index which support us in

measuring our progress towards our

MAP2030 commitments.

Our recruitment activities and our Diversity

and Inclusion (D&I) Policy are aligned to

promote diversity and maintain fair and

non‑discriminatory work practices for

recruitment and succession planning.

Recruitment is based on skills and future

development potential, with conscious

reflection on biases and hidden talents

to give fair consideration to all applicants.

We aim to offer opportunities for

development that match individual

aspirations and the future needs

of our organisation.

There are significant variations in the

percentage of female colleagues and rate

of female hires across our different operations

and functions. We are at the beginning of

an ambitious journey to become a more

attractive employer for women, and our

initiatives will take time to show results.

Employee behaviour does not necessarily

change with one global standardised

approach, so we integrate D&I guidance

and awareness raising into all aspects of

work and encourage continuous learning

for all employees. The momentum across

Mondi to create a diverse workforce and

inclusive culture needs to involve everyone,

at every level.

#### Key initiatives and progress in

2023

– We achieved a 79% score in our Purposeful

Workplace Index covering questions about

development opportunities, recognition

and personal accomplishment.

– Our Inclusiveness Index covers respect,

fairness and trust and we achieved a score

of 77%. The majority of employees confirm

that we listen and care about what others

have to say. However, fewer employees felt

able to speak their minds or recognised for

their efforts and achievements. We have

identified psychological safety as a common

theme which we will work on in 2024.

– We launched eight Employee Resource

Groups in 2023. These are voluntary,

employee-led groups based on shared

identity, experiences, characteristics or

interests, which aim to support people

and be a positive resource at Mondi.

– The 'Curious Community' is an evolving

online community that connects more

than 350 members from 27 countries

to learn, grow and discuss their shared

interest in D&I.

– In 2023, we ran two workshops called

'Men Advocating Real Change'. The

approach supports the principle that all

genders benefit from more gender equity,

while men in particular have an important

role in making equality a reality.

– In 2023, we had 22.6% female employees

(2022: 22.1%) and 28.4% of all new

hires were women (2022: 30.9%).

The female representation on our

Executive Committee was 17%

(2022: 25%). This percentage of women

will increase to 29% with the new female

Chief People Officer joining in April

2024. The percentage of female direct

reports to the Executive Committee

was 30% (2022: 25%) and we had

4 (40%) female directors on the

Mondi Board (2022: 33%)

|  |  |
| --- | --- |
|  |  |
|  | Nominations Committee  Page [105](#i47a6727b8bad4fe28addb4dae187e293_2944)-[109](#i5ea58ed7a01b4ae8a1791f861d018ea2_7-5-1-1-358049) |

#### Gender diversity

2023

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | Male | % | Female | % | Other\*\* | % |
| Directors | 6 | 60.0% | 4 | 40.0% | 0 | 0% |
| Senior managers\* | 188 | 81.4% | 43 | 18.6% | 0 | 0% |
| Employees\*\*\* | 16,856 | 77.4% | 4,917 | 22.6% | 1 | 0% |

\*As at 31 December 2023. Senior managers as defined by Mondi and including directors of all subsidiaries in

accordance with the definition set out in Section 414C of the UK Companies Act 2006.

\*\*Not specified/prefer not to say.

\*\*\* Headcount of employees that are active or on leave as at 31 December 2023.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 49 |
|  |  |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Commitment: Create an environment that enables a positive work-life  experience, valuing our safety, health and mental wellbeing | | | | |  |
| Target | Performance against baseline | | | This year at a glance |  |
| 2021 | 2022 | 2023 |  |
| Zero fatalities |  |  |  | Sadly, a contractor was fatally injured at our Ružomberok mill  (Slovakia) while operating mobile equipment | |
| Zero life-altering injuries |  |  |  | We sadly had four life-altering injuries in 2023, with two in  our Świecie Corrugated plant (Poland) and one each in our  Ružomberok (Slovakia) and our Frantschach (Austria) mills | |
| 15% reduction of Total Recordable Case Rate |  |  |  | Among industry leaders with a 0.64 Total Recordable Case  Rate performance, a 4% reduction compared with our 2020  baseline, but an increase of  2% since last year | |
| Support our employees in pursuit of  a work‑life experience that enhances  their wellbeing |  |  |  | A 77% score for our new Wellbeing Index in the 2023  Employee Survey, reflecting our focus on developing a culture  where everyone feels safe to speak openly, and supporting  a positive work-life experience | |
| Our operations drive awareness  of and take measures to improve  health and mental wellbeing |  |  |  | Professional counselling accessible for 94% of our employees  through our Employee Assistance Programme (EAP) and  EAP‑equivalent system for support and help | |

We prioritise a working environment that

values safety, health and mental wellbeing,

with clear targets to hold us accountable.

Our operations involve high-risk activities,

and keeping people safe and healthy is

a moral and a business imperative for

everyone who works for and on behalf

of Mondi.

While we are one of the safety leaders

in our industry, we sadly experienced a

fatality of a contractor in our Ružomberok

mill (Slovakia) in November 2023. Relevant

details have been shared with all operations

to prevent reoccurrences.

Many injuries at our operations are related

to the unconscious mind of our employees

and contractors. We continuously promote

our ‘Work safe. Home safe. Everybody,

every day.’ slogan and strive to bring the

unconscious to the conscious – thinking

about the work we do before starting,

so that it is done safely.

To drive continuous improvement in our

culture and safety performance, we are

shifting our traditional safety approach

(based on controls) to the Social

Psychology of Risk (SPoR), which includes

psychological and cultural elements.

In 2023, we conducted 29,485 safety audits

to identify areas for safety improvements.

All our mills have scheduled annual

maintenance shuts when we maintain

and upgrade machinery and equipment.

Our learning and skills development

programmes cover safety and health in

different formats, from formal to on‑the‑job

training to engagement sessions, and also

feature relevant experts.

Our aim is to build the best possible working

environment, processes and structures

to enhance people safety and wellbeing.

We are developing flexible working models

and offer employees access to assistance

programmes and support, with a strong focus

on mental wellbeing.

If an employee suffers a life-altering injury

at work, we facilitate appropriate medical

treatment and ongoing rehabilitation, and

support their continued employment by

finding alternative equivalent jobs for them,

where required.

#### Key initiatives and progress in

2023

– We had 200 total recordable cases:

143 related to employees and 57

to contractors (2022: 189; 132 related

to employees and 57 to contractors).

– Our new Engagement Board is a platform

for our employees and contractors to

discuss safety and health issues, including

high-risk activities conducted by

contractors during annual shuts, and

major safety and health projects.

– In 2023, we had an average of 12,411

contractors across the Group (2022: 11,629).

We are deepening our engagement with

contractors to eliminate fatalities and

life‑altering injuries.

– At Mondi Bags Ukraine, we are prioritising

the physical and mental safety of our

colleagues, including regular check-ins

and communication about safety, so our

employees feel supported, connected

and involved in a purposeful and engaging

environment.

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | What’s next in  Empowered People? |  |
|  | – Encourage an inclusive leadership  approach and a sense of shared  ownership.  – Share good practices and  guidance for inclusive recruitment  and retention of women.  – Invest in activities to attract,  retain and develop employees,  focusing on expert career  development, and opportunities  to learn and exchange.  – Focus on shaping a culture  where employees feel it is  safe to speak up.  – Continue industry-leading Social  Psychology of Risk approach,  run training programmes and  build on modular safety and  health learning programme. |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 50 |
|  |  |  |

#### Mondi Action Plan 2030

## Created by Empowered People

#### continued

![TAOC_mondi_brush_mint-1-hires_crop.jpg]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  | Mondi Frantschach_Werksansicht groß_crop.jpg |
|  | SR_Taking_Action_on_Climate.svg | |  |
|  |  |
|  | With the rise in average global temperature,  companies play a key role in delivering  tangible plans to phase out fossil fuels, cut  greenhouse gas (GHG) emissions, modernise  operations and invest in energy efficiency. | |  |
|  | SR_Arrow_icon_White.svg | TCFD  Page [55](#i47a6727b8bad4fe28addb4dae187e293_3224)-[64](#i8eb60d69ace440a9b8dac4ed7f61c7cf_2387) |  |
|  |  |  |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Commitment: Reduce our greenhouse gas emissions in line with science-based Net-Zero targets | | | | | |
| Targets\* | Performance against baseline | | | This year at a glance |  |
| 2021 | 2022 | 2023 |
| Reduce our Scope 1 and 2 GHG emissions  by 46.2% by 2030 from a 2019 baseline |  |  |  | Absolute Scope 1 and 2 emissions decreased by 22%  compared with our 2019 baseline, and 4% since last year | |
| Reduce Scope 3 GHG emissions by 27.5%  by 2030 from a 2019 baseline |  |  |  | Absolute Scope 3 emissions decreased by 21% compared  with our 2019 baseline, and 9% since last year | |
| Reduce Scope 1, 2 and 3 emissions by 90%  by 2050 from a 2019 baseline |  |  |  | Absolute Scope 1, 2 and 3 emissions decreased by 21%  compared with our 2019 baseline, and 7% since last year | |

\*  We are updating our Net-Zero targets following the disposal of our Russian operations and including recent acquisitions.

We have ambitious Net-Zero targets

to drive down GHG emissions throughout

our operations and our supply chain.

We were one of the first packaging and

paper companies with validated Net-Zero

targets and compared to our 2019 baseline

we have reduced our absolute Scope 1, 2

and 3 GHG emissions by 21%.

Our Scope 1 GHG emissions occur through

the combustion of fuels to generate energy

required for our manufacturing processes,

while our Scope 2 GHG emissions are

related to energy we purchase. Our Scope

3 indirect GHG emissions mainly arise from

purchased raw materials and logistics.

Our MAP2030 Climate and Environment

Working Groups have developed a

roadmap of action plans to deliver on

our Net-Zero targets. They keep track

of projects that support our transition

to a low-carbon economy and reduce

GHG emissions from our energy and

manufacturing facilities. We consider the

potential consequences of climate change

on nature by including biodiversity and

water stewardship in our action plans.

#### Actions to reduce our GHG emissions

#### Scope 1 and 2

– Continue to invest in our operational

infrastructure.

– Invest in energy and process efficiency

projects across our production sites.

Key projects that will contribute

towards meeting our GHG emissions

reduction targets include the installation

of a new recovery boiler at Richards Bay

(South Africa); an energy efficiency

project at Merebank (South Africa);

a new heat exchanger at Ružomberok

(Slovakia); and a modernisation project

at Dynäs (Sweden).

– Increase the share of renewables used

for energy generation and purchase

electricity from green energy providers.

#### Scope 3

– Collaborate with key suppliers on

decarbonisation and support them in

addressing their GHG reduction targets

and Net-Zero transition plans through

workshops and one-to-one meetings.

– Focus on raw material and fuel suppliers,

as well as logistics partners, to replace

carbon-intensive practices and materials

with innovative solutions.

– By increasing primary GHG emissions

data from our suppliers, improve the

quality and accuracy of our Scope 3

GHG emissions reporting.

– Promote the role of sustainable working

forests for carbon sequestration and

provision of renewable raw materials, in line

with our commitment to zero deforestation.

#### Key initiatives

#### and progre

ss in 2023

– At Mondi Corrugated Turkey, we installed

a new gas turbine and co‑generation plant,

operating from 2022. The site is now

100% energy self‑sufficient, significantly

reducing costs.

– We are continuing to reduce our GHG

emissions through energy efficiency.

A new back-pressure turbine at

Merebank will reduce Scope 2 GHG

emissions on site by 24% and effectively

double power generation.

– Our first Supplier Virtual Event

welcomed key suppliers and highlighted

their pivotal role in supporting us to

deliver against our Net-Zero targets.

We are intensifying our supply chain

collaboration on GHG reduction targets

and increasing the share of primary

GHG emissions data from our suppliers.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 51 |
|  |  |  |

In 2023, our performance included:

– GHG emissions increase of Scope 1

by 0.03 million tonnes and reduction of

Scope 2 by 0.11 million tonnes compared

to 2022. This is a 4% decrease in

absolute Scope 1 and 2 GHG emissions

and a 22% reduction since a 2019

baseline. Since 2004, we have reduced

our absolute Scope 1 and Scope 2

GHG emissions by 2.57 million tonnes

CO2e, a 55% reduction.

– We reduced the Group’s Scope 3

emissions by around 260,000 tonnes

CO2e, which is a reduction of 9% against

last year and a 21% reduction against

the 2019 baseline. The reduction is

mainly due to market-related lower

production volumes requiring fewer raw

materials. We recognise that making

progress in our Scope 3 emissions will

be a challenge. We will continue to work

with our suppliers to identify

opportunities to reduce GHG emissions

in our supply chain.

– As a member of the World Business

Council for Sustainable Development

(WBCSD) Forest Solutions Group,

we contributed to the development

of a catalogue of decarbonisation

actions for the forest sector.

|  |  |
| --- | --- |
|  |  |
|  | TCFD  Page 55-64 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| GHG emissions of our pulp and paper mills |  |  |  |
|  | 2023 | 2022 | % change  2022-2023 |
| Absolute Scope 1 emissions (million tonnes CO2e) | 1.63 | 1.59 | 3% |
| Absolute Scope 2 emissions (million tonnes CO2e) | 0.29 | 0.33 | -12% |
| Specific GHG emissions (tonnes CO2e per tonne  of saleable production)\* | 0.39 | 0.36 | 8% |
| Specific Scope 1 emissions (tonnes CO2e per tonne  of saleable production) | 0.33 | 0.30 | 10% |
| Specific Scope 2 emissions (tonnes CO2e per tonne  of saleable production) | 0.06 | 0.06 | —% |
| We report our GHG emissions according to the Greenhouse Gas Protocol, published by the WBCSD and the WRI,  and have reported our Scope 1 and 2 GHG data in compliance with ISO 14064:1-2006. ERM CVS has assured,  to a reasonable level of assurance, our  2023 absolute Scope 1 and absolute Scope 2 GHG emissions data,  in accordance with ISO 14064-3.  \* The specific GHG emissions of our mills per tonne of saleable production includes GHG emissions related  to manufacturing (0.36 t/t) and to energy sales ( 0.03 t/t). | | | |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Energy consumption of our pulp and paper mills | | | |
|  | 2023 | 2022 | % change  2022-2023 |
| Energy consumed by pulp and paper core processes  in the form of heat and electricity at our operations  (billion kWh) | 18.45 | 19.72 | -6% |
| Energy purchased by our mills from external sources  (billion kWh) | 1.18 | 1.15 | 3% |
| Total electricity requirements for producing pulp  and paper (billion kWh) | 3.93 | 4.24 | -7% |
| Total heat requirements for producing pulp and paper  (billion kWh) | 14.52 | 15.48 | -6% |
| Energy sold to the local grids (billion kWh) | 0.44 | 0.52 | -15% |
| Total energy sales including green fuel sales (billion kWh) | 0.72 | 0.84 | -14% |
| Our mills’ electricity self-sufficiency\*\* | 78% | 81% | -3% |
| \*\* Including energy generated for sale. |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Energy consumption of Group (including converting plants and mills)‡ | | | | |
|  | 2023 | | 2022 | |
|  | Mondi  Group | UK  operations† | Mondi  Group | UK  operations† |
| Total energy use (billion kWh) | 27.15 | — | 29.05 | — |
| Energy purchased (billion kWh) | 1.58 | — | 1.61 | — |
| Scope 1 emissions (million tonnes CO2 e) | 1.75 | — | 1.72 | — |
| Scope 2 emissions (million tonnes CO2 e) | 0.35 | — | 0.46 | — |
| † The Group did not own or operate any production sites in the UK in 2022 and 2023.  ‡ This table fulfils the Group’s Streamlined Energy and Carbon Reporting (SECR) disclosure requirements. | | | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 52 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate

#### continued

![SR_MAP2030_TakingAction_Commitment_BG_v2.jpg]()

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Commitment: Maintain zero deforestation in our wood supply, sourcing from resilient forests | | | | | |
| Target | Performance against baseline | | | This year at a glance |  |
| 2021 | 2022 | 2023 |  |
| Maintain 100% FSCTM certification in our  own forest landholdings |  |  |  | Maintained all certifications in our South African forestry  landholdings | |
| Procure 100% responsibly sourced fibre with  75% FSC- or PEFC-certified fibre procured  by 2025 and the remainder meeting the FSC  Controlled Wood standard |  |  |  | The share of certified wood for all mills was 75%, with the  remainder being FSC Controlled Wood | |
| Implement leading forestry measures to  ensure productive and resilient forests |  |  |  | Continued implementation of best management practices  in our plantation forests to support improved growth  and minimise disturbances | |

Resilient forests are vital as a key source

of renewable, recyclable and compostable

material, and home to the vast majority

of the planet’s terrestrial biodiversity,

while absorbing carbon.

Wood fibre is our most important raw material

for producing our paper and packaging

solutions. We believe that the active and

sustainable management of forests, and

increasing the use of wood‑based products,

will have a fundamental role in addressing

the climate crisis and in securing long-term

benefits for society.

In 2023, 100% of our wood fibre was

responsibly sourced, with 75% FSC\*

(Forest Stewardship CouncilTM) or PEFC

(Programme for the Endorsement of Forest

Certification) certified, and the remainder

meeting the FSC Controlled Wood

standard. We source over 90% of our

wood fibre from countries where our pulp

and paper mills are located and aim to

make the best use of certified wood

from domestic markets.

We enable the uptake of sustainable forest

management practices and development

of resilient forest landscapes by collaborating

with partners, engaging with suppliers and

forest owners, and scaling up development

of forest certification. With significant debate

about the long‑term forest strategy for

mitigating climate change and reversing

nature loss, between policymakers, the forest

sector, NGOs and scientific organisations, we

believe scientific research is crucial to inform

effective policies and management practices

in the EU and globally.

\*  The license number of Mondi Paper Sales GmbH –

Fibre Packaging/Paper is FSC-C012179 and Mondi

Paper Sales – Uncoated Fine Paper is FSC-C015522.

#### Key initiatives and progress in

2023

– Forest certification schemes, such as

PEFC and FSC, aim to increase

availability of sustainable fibre sources

and address emerging challenges in

forestry. We are enhancing certification

in our own forestry operations and in our

global wood fibre sourcing, as well as

proactively sharing our insights with

suppliers and partners in the forest

products value chain.

– The main threat to our forest landholdings

is from wildfires, which can occur as

frequent, high-intensity, small‑scale fires

in South Africa. We mitigate the risk

of large-scale fires with a robust fire

prevention and management system.

We have developed a comprehensive

tree improvement programme, as

well as silviculture techniques, to

maintain healthy, resilient and productive

tree plantations.

– TEAMING UP 4 FORESTS, a platform

founded by the International Union for

Forest Research Organizations (IUFRO)

and Mondi, is now a professional

network of 100+ scientists, business

representatives and policymakers along

the forest sector. We aim to translate

scientific findings into practical solutions

for the sustainable provision of wood-

based products. In 2023, the preliminary

results of an IUFRO-Mondi synthesis

study were presented at the latest

Think Tank meeting. The study explores

ecological, policy, socio-economic

and technological drivers for the future

supply of fibre and other forest goods

and services.

|  |
| --- |
|  |
|  |
| Mondi's total wood consumption  12.8 million m3 |

|  |  |
| --- | --- |
|  |  |
|  | Procurement  Page  [66](#id5b39e30fcb7438c9cb55e47e15b3dae_178071)-[68](#id5b39e30fcb7438c9cb55e47e15b3dae_178072) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 53 |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Commitment: Safeguard biodiversity and water resources in our operations and beyond | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| Conduct water stewardship assessments at  our mills and forestry operations by 2025,  and implement required actions to address  the findings by 2030 |  |  |  | Completed assessments for 54% of our mills and forestry  operations, up from 38% in 2022 |
| Conduct biodiversity assessments at our  mills and forestry operations, introducing  biodiversity action plans where necessary  by 2025 |  |  |  | With all assessments finalised in 2021, we have developed  action plans for 54% of our mills and forestry operations,  up from 46% in 2022 |

We depend on well-functioning terrestrial

and freshwater ecosystems to operate

effectively. As part of our manufacturing

processes, we require access to natural

resources including wood and water.

Within our MAP2030 framework, we have

a comprehensive approach to climate

action and conserving natural resources.

In the forest sector, the most significant

biodiversity and water impacts and

dependencies occur upstream in forestry

landscapes and primary processing

facilities. We are committed to improving

our approach to biodiversity and water

management in our forestry operations

and mills, to limit our impacts and manage

our dependencies on natural resources.

We are conducting biodiversity status

reviews for all our pulp and paper mills

and forestry operations. Supported by

external experts, we have identified

important biodiversity sites around our

operations and evaluated environmental

aspects that potentially have an impact

on biodiversity.

We aim to manage water cycles effectively

and maintain the resilience of freshwater

ecosystems, especially in water-stressed

and water-scarce regions. Our Group

Water Stewardship Standard lists

all requirements related to our water

stewardship policy, plans and strategy,

as well as in relation to water, sanitation

and hygiene.

We collaborate with local environmental

NGOs and scientific institutions to increase

access to best available knowledge on

ecosystem stewardship, as well as to promote

communication and implementation of

effective science-based approaches

to manage biodiversity and natural capital

in our operational landscapes.

#### Key initiatives and progress in

2023

– We are collaborating with our partners

to implement biodiversity action plans

(by 2025) and water impact assessments

(by 2030), developing context-specific

measures to address the most material

aspects in our operations, depending

on geographic location and value chain

position. In 2023, we conducted water

stewardship assessments for Mondi

mills in Tire (Türkiye) and Stambolijski

(Bulgaria). We have also assessed our

biodiversity impacts at Mondi mills

and have worked to develop action

plans, for example at Mondi Dynäs

(Sweden).

– As a member and co-chair of the

World Business Council for Sustainable

Development’s Forest Solutions Group,

we engage with major nature-related

frameworks, including the Taskforce

on Nature-related Financial Disclosures

(TNFD) and Science Based Targets

Network. In 2023, we engaged on the

development of the TNFD Additional

Forest Sector Guidance. The guidance,

which includes proposed disclosure

metrics, will support forest companies in

implementing the TNFD recommendations.

– Mondi South Africa’s three-year

partnership with the Endangered Wildlife

Trust aims to map biodiversity footprints

in our South African forestry operations.

We conducted ‘Species Field Days’

to track species using the ‘iNaturalist’ app

as one of the first partnership activities.

We also conducted a desk-based pilot

assessment of the biodiversity footprint

of our South African forestry landholdings.

|  |  |
| --- | --- |
|  |  |
|  | GRI Biodiversity disclosure  <www.mondigroup.com/en/sustainability> |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | What’s next in Taking  Action on Climate?  – Continue to develop and  implement our biodiversity action  plans and water stewardship  assessments across our  operations.  – Continue to develop metrics  to measure our impacts on  biodiversity and ecosystems.  – Invest in projects that help to  achieve our science-based  Net‑Zero GHG reduction targets  and improve our sustainability  performance.  – Scale up our engagement  with our suppliers and service  providers, such as logistics  companies, to drive progress  on Scope 3 GHG emissions. |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 54 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate

#### continued

![SR_TCFD_OurJourney_Table_BG_v2.svg]()

We  co

#### ntinue to make progress

against our commitment to

#### reduce carbon emissions.

#### Our TCFD journey

We invest to drive more responsible and

sustainable practices and our ambitious

targets have paved the way for our success

over a number of years and set a platform

for our future plans and investments as we

continue our drive to transition to a circular

economy and further reduce our emissions.

We recognise that the impact of climate

change gives rise to physical and transition

risks. We also recognise clear opportunities

for our business to drive value accretive

growth with sustainability at the centre

of our strategy.

At Mondi , we are striving to reduce our

emissions in line with a 1.5°C scenario

by committing to achieve Net-Zero

greenhouse gas (GHG) emissions reduction

targets by 2050. In 2022, the Science

Based Targets initiative (SBTi) validated

our  targets as science-based Scope 1, 2

and 3 Net-Zero targets. We are updating

our Net-Zero targets following the sale

of our Russian operations.

The Financial Stability Board’s Task Force

on Climate-Related Financial Disclosures

(TCFD) recommendations facilitate clear

disclosure of our governance, strategy,

risk management and metrics and targets

in relation to our climate change-related

risks and opportunities, enabling transparent

disclosure on how we are taking action

on climate.

The Group’s focus remains on risk

management and mitigation of our climate

change-related risks and maximising our

opportunities.

The timeline below shows how we have

integrated the TCFD recommendations

into our journey of taking action on climate,

and how we continue to reduce our

emissions since setting our first Group-

wide GHG reduction target in 2005 against

a 2004 baseline.

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Taking Action on Climate | | | | | | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | SR_TCFD_icon_2005.svg | SR_TCFD_icon_2018.svg | SR_TCFD_icon_2019.svg | SR_TCFD_icon_2020.svg | SR_TCFD_icon_2021.svg | SR_TCFD_icon_2022.svg | SR_TCFD_icon_2023.svg | SR_TCFD_icon_2030.svg | SR_TCFD_icon_2050.svg |  |
|  | First Group ‑wide  GHG emissions  reduction target  set in 2005  against a 2004  baseline | Voluntary  disclosure in  line with TCFD  recommendations | Approval of  science-based  GHG reduction  targets by  SBTi, aligned  with a below  2.0°C scenario | ‘Triple A’ CDP  score (Climate,  Forest, Water) | First  Sustainability-  Linked Loan  signed | Approval of  science-based  Net-Zero targets  by the SBTi in  line with a 1.5°C  scenario | Expanded  supplier  engagement  to support our  Scope 3  emissions  reduction | Science-based  Net-Zero  targets:  Reduce our  Scope 1 and 2  emissions by  46.2% by 2030  from a 2019  baseline | Science-based  Net-Zero  target:  Reduce Scope 1,  2 and 3  emissions by  90.0% by 2050  from a 2019  baseline |  |
|  |  |  |
|  | ‘Triple A’ CDP  score (Climate,  Forest, Water) |  |
|  | CDP’s ‘A  List’ (A score for  Water and Forest  and A- score  for Climate) |  |
|  | Climate change  risks identified  as a standalone  Group principal  risk | Launched our  Sustainability-  Linked Bond  Framework |  |
|  | Reduce Scope 3  emissions by  27.5% by 2030  from a 2019  baseline |  |
|  |  |
|  | CDP’s  ‘A List’ (A score  for Water and  Forest and A-  score for  Climate) |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
|  | 2.57 million tonnes of CO2e reduction of absolute  Scope 1 and 2 emissions (2004 baseline)1 | | | | | | | Long term: Reduce  absolute Scope 1, 2 and  3 by 90% by 2050 | |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | 1 The absolute Scope 1 and 2 emissions exclude the impact of our disposed Russian operations. | | | | | | | | |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Consistency statement  In line with the UK Listing Rules, we confirm that the disclosures included in the Integrated report and financial statements 2023  are consistent with the four TCFD recommendations and 11 recommended disclosures and all-sector guidance. The table on  the following page contains the relevant disclosure locations. |  |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 55 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate: TCFD

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| TCFD recommendations and recommended disclosures | Disclosure location | | Further information | | |
| Governance |  |  |  |  |  |
| a) Describe the Board’s oversight of climate-related risks and opportunities |  | Page 57 |  |  | Corporate governance report  Page  [90](#i47a6727b8bad4fe28addb4dae187e293_2923)-[121](#i6f6f8967ed114bb99dfbf771b4af9713_3-5-1-1-328026) |
| b) Describe management’s role in assessing and managing climate-related  risks and opportunities |  | Page 57 |  |  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |
| Strategy |  |  |  |  |  |
| a) Describe the climate-related risks and opportunities the organisation  has identified over the short, medium and long term |  | Page 59-62 |  |  | Principal risks  Page  [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) |
| b) Describe the impact of climate-related risks and opportunities on the  organisation’s businesses, strategy and financial planning |  | Page 58-59 |  |  | Our strategy  Page  [20](#i47a6727b8bad4fe28addb4dae187e293_2624)-[21](#ifeb9b1d4729d41d5a093f58dac7dfc15_11-6-2-2-466776) |
|  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |
| c) Describe the resilience of the organisation’s strategy, taking into  consideration different climate-related scenarios, including a 2°C  or lower scenario |  | Page 58-59 |  |  | Our strategy  Page [20](#i47a6727b8bad4fe28addb4dae187e293_2624)-[21](#ifeb9b1d4729d41d5a093f58dac7dfc15_11-6-2-2-466776) |
|  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |
| Risk management |  |  |  |  |  |
| a) Describe the organisation’s processes for identifying and assessing  climate-related risks |  | Page 63 |  |  | Principal risks  Page [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) |
| b) Describe the organisation’s processes for managing climate-related risks |  | Page 63 |  |  | Principal risks  Page [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) |
| c) Describe how processes for identifying, assessing and managing climate-  related risks are integrated into the organisation’s overall risk management |  | Page 63 |  |  | Principal risks  Page [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) |
| Metrics and targets |  |  |  |  |  |
| a) Disclose the metrics used by the organisation to assess climate-related  risks and opportunities in line with its strategy and risk management process |  | Page 64 |  |  | Key performance indicators  Page  [22](#i47a6727b8bad4fe28addb4dae187e293_2685)-[23](#i81fa069a94a6467fbc23de6c6859fc5d_7-4-1-1-453663) |
|  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |
|  | Environmental performance  Page [65](#id5b39e30fcb7438c9cb55e47e15b3dae_178070) |
| b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions,  and the related risks |  | Page 52 |  |  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |
| c) Describe the targets used by the organisation to manage climate-related  risks and opportunities and performance against targets |  | Page 51 |  |  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |
|  | Remuneration report  Page [122](#i47a6727b8bad4fe28addb4dae187e293_3019)-[149](#i3303ad506f594d9f922659fb3ad314ff_14660) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 56 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate: TCFD

#### continued

#### Governance

#### The

#### Board

While the Board as a whole has

responsibility for overseeing our approach to

sustainability, the Sustainable Development

Committee (SD Committee), on behalf

of the Board, oversees and monitors our

sustainable development policies, practices

and progress against our MAP2030

commitments and targets. It provides

guidance in relation to sustainability matters,

including climate change-related issues,

and reviews updates of the Group’s

framework of sustainability policies and

strategies, taking into account global best

practice. The Board considers the impact

of climate change-related matters as

part of its decision-making in relation to

major capital expenditure, acquisitions

and disposals.

#### The relevant

#### Board

#### committees

The SD Committee met seven times during

2023 , with climate change-related matters

discussed by the committee at all of these

meetings. Every Board member normally

attends each meeting of the SD Committee,

even if they are not a member of the

committee, providing context for

Board discussions.

The Chair of the SD Committee also reports

back to the Board after every meeting.

Read our Board members' biographies for

more information on their sustainability

skills and experience on pages [86](#id6f470efcf9445d6be6ab0a9907fd201_1-1-1-1-311571)-[87](#id6f470efcf9445d6be6ab0a9907fd201_22-1-1-1-322065).

Progress against our sustainability

commitments and targets, outlined in

MAP2030, was an integral part of the

SD Committee’s agenda throughout the

year, with each of the key action areas

reviewed and focus given not only to the

current status of each commitment, but

also to the actions being taken towards

achieving these commitments.

Further details of our performance in this

regard can be found on pages [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[54](#i1e5fae208f7c489fadc83a4407f63620_1-1-1-1-405554).

Alongside this, the SD Committee also

spent time considering the climate

change‑related risks and opportunities

facing the Group in the context of the

TCFD recommendations.

Each risk and opportunity was reviewed

and discussed, considering in particular

the potential impact in each case.

The SD Committee acknowledges that

this is an iterative process, with the

quantification of the financial impact

and the methodologies applied being

continually refined, and that these

discussions support the development

of the committee’s understanding of these

risks and opportunities and provide context

not only for Mondi’s plans for addressing

climate change, but also for its wider

decision-making.

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Our Sustainability Governance Framework | | | | | | | | | | | | | | | | | |  |
|  | Consisting of management frameworks, including the Sustainable Development Management System,  Corporate Governance Code and other management systems, policies and standards | | | | | | | | | | | | | | | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Mondi Board | | | | | | | |  |  |  |  |  |  |  |  |  |
|  |  |  | Relevant Board  committees | | | | | | | |  |  |  |  | Executive Committee | | | |  |
|  |  |  | Chaired by independent non-executive directors | | | | | | | |  |  |  |  | Chaired by the Group CEO | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | SD Committee | |  | Audit Committee | |  | Remuneration Committee | |  |  |  |  |  |  |  |  |  |
|  |  |  |  | |  |  | |  |  | |  |  |  |  |  |  |  |  |  |
|  | Purpose |  | Oversees the Group’s  sustainability approach,  policies, performance and  commitments | |  | Oversees the Group's  corporate financial reporting,  the internal control system,  risk management and the  relationship with the  external auditor | |  | Responsible for  recommending overall  remuneration policy  and setting of executive  and senior management  remuneration | |  |  |  |  | Management responsibility  for sustainability performance  within operations guided by  the SD Committee | | | |  |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Responsibilities |  | Responsible for the  governance of matters related  to environment, climate  change, labour, human rights,  biodiversity and product  stewardship  Ensures alignment with  global best practice | |  | Oversees the Group’s  corporate financial reporting  and the risk assessment  process, including  sustainability risks  Monitors the effectiveness  of the internal control  systems, including the  SpeakOut platform | |  | Responsible for remuneration  being appropriately aligned to  our MAP2030 commitments | |  |  |  |  | Ensures that business unit  line management holds  primary responsibility  and accountability for  sustainability performance | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | |  |
|  |  |  | Group functions and expert networks | | | | | | | | | | | | |  | Business  unit and  operational  level  responsibilities | |  |
|  |  |  | Provide expert insights and support to business on topics such as sustainable development, legal, human resources,  communications, procurement and internal audit  Networks: Safety and occupational health; Social sustainability; Energy; Fire safety;  Environment; Product stewardship; Kraft recovery boiler; and Wood supply | | | | | | | | | | | | |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 57 |
|  |  |  |

![Taking Action on Climate_p58.png]()

#### Governance

#### continued

During 2023, the SD Committee also

addressed a number of other key matters

including safety performance and serious

incidents, sustainable development

governance and risks, stakeholder

relationships, environmental performance

and climate change, forestry, product

stewardship, responsible procurement

and people development and diversity.

Further details on the key matters

considered by the SD Committee during

the year can be found on page [121](#i47a6727b8bad4fe28addb4dae187e293_5527).

Additional governance oversight is provided

by the Audit Committee and Remuneration

Committee. The Audit Committee oversees

the Group’s corporate financial reporting,

annual planning process and the Group’s

risk assessment process, which includes

climate change risks. Details on the

key matters considered by the Audit

Committee during the year can be found

on page [112](#i47a6727b8bad4fe28addb4dae187e293_5469). The Remuneration Committee

is responsible for ensuring that our incentive

arrangements drive the appropriate

behaviours that deliver our strategy,

including the alignment of remuneration

to performance against our MAP2030

focus areas. Details on the key matters

considered by the Remuneration

Committee during the year can be

found on page [126](#i47a6727b8bad4fe28addb4dae187e293_5497558142205).

#### The

#### Executive Committee

The Executive Committee, chaired by the

Group CEO, and operational management

teams consisting of senior executives from

across the Group monitor our approach

to sustainability. The Executive Committee

regularly reviews progress against our

sustainability commitments and targets.

In addition, all papers and updates

prepared for the SD Committee, including

those relating to climate change, are

reviewed and discussed by the Executive

Committee, prior to submission to the

SD Committee, allowing the Executive

Committee to develop its understanding

and awareness of sustainability matters

and to provide relevant input.

The Group Technical & Sustainability

Director and the Group Head of

Sustainable Development are responsible

for coordinating actions related to the

Group’s climate change-related risks

and opportunities and providing reports

to the Executive Committee to enable

it to discharge its responsibility.

#### Strategy

Sustainability is at the core of Mondi’s

strategy and values and we have a

long‑standing focus on reducing

greenhouse gas emissions. Since 2004,

the baseline year for our first Group-wide

GHG target, we have reduced our absolute

GHG emissions by 2.57 million tonnes

CO2e, which is a 55% reduction. This

has been achieved through targeted

investments to reduce our reliance on

fossil fuels and a focus on improving

energy efficiency across our operations.

We believe that we have the right

strategy, including our climate transition

plan to Net-Zero by 2050, to address the

challenges and opportunities arising from

climate change.

We recognise that there are many

uncertainties around the potential impacts

of climate change and continue to enhance

the quality of our scenario modelling

to further understand these impacts.

We consider that, based on our current

understanding, our strategy is resilient.

The Group’s climate change-related risks

and opportunities are routinely considered

in our strategic and financial planning,

our capital allocation decisions and our

operational management. Climate change

risks have been identified as one of

our strategic principal risks and are

reflected in our accounting policies

and financial reporting.

#### Climate change in our financial

#### statements

The impact of climate change is considered

in the estimates of future cash flows used

in the impairment assessment of goodwill, as

detailed on pages [186](#i47a6727b8bad4fe28addb4dae187e293_82)-[187](#i47a6727b8bad4fe28addb4dae187e293_91). Climate change

is, as detailed on page [188](#i47a6727b8bad4fe28addb4dae187e293_94), included as a

factor that impacts the conversion factor

used in the assumptions for valuation of

the Group’s forestry assets and as a factor

incorporated into the risk premium applied

to mature and immature timber. Climate

change was considered in the assessment

of fair value of assets and liabilities acquired

in business combinations, as detailed

on page [202](#i47a6727b8bad4fe28addb4dae187e293_127).

The Group accounting policies reflect the

impact of climate change considerations

in relation to the assessment of the residual

values and estimated useful economic lives

of property, plant and equipment, as

detailed on pages [220](#i0d030c6e765d4e9e928a38f1dae37eb5_158716)-[221](#i0d030c6e765d4e9e928a38f1dae37eb5_221810), and in relation

to the accounting policy applied for the

valuation of forestry assets and the

assessment of goodwill for impairment.

#### Sustainability-linked financing

The Group’s €750 million five-year

revolving multi-currency credit facility

agreement (RCF), entered into in 2021,

incorporates key sustainability targets

linked to MAP2030, classifying the facility

as a Sustainability-Linked Loan. Linking

our access to capital to our sustainability

performance reflects our commitment to

meeting our strategic sustainability targets.

During 2023, the Group launched its

Sustainability-Linked Bond Framework

(the SLB Framework). The SLB Framework

supports the future issuance of

Sustainability-Linked Bond transactions

and aligns bonds issued under it with our

ambitious sustainability targets which are:

– reduce absolute Scope 1 and 2 GHG

emissions by 46.2% in aggregate by

2030 compared to 2019; and

– reduce absolute Scope 3 GHG emissions

by 27.5% by 2030 compared to 2019.

#### Capital investments

Energy-related investments can drive

decarbonisation and enhance our asset

base. Since 2019, we have invested in and

approved around €500 million in energy

and process efficiency, including a new

stand-by boiler at Świecie (Poland), the

installation of a new recovery boiler and

power boiler at Richards Bay (South Africa),

an energy efficiency project at Merebank

(South Africa), a new heat exchanger at

Ružomberok (Slovakia) and a

modernisation project at Dynäs (Sweden).

Our investments aim to optimise energy

and process efficiency and replace fossil

fuel-based energy with renewable sources.

Our current commitments, outlined in

MAP2030, build on the progress we have

achieved so far and set ambitious near-

and long-term Net-Zero targets into

the future.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 58 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate: TCFD

#### continued

![mondi_retouched_20_ICv2_crop.png]()

#### Our risks and opportunities

We identified seven climate change‑related

risks and three climate change‑related

opportunities that we have assessed as

material to our business. Materiality

considers both financial impacts and other

considerations such as the importance

of key climate change‑related topics

to internal and external stakeholders.

Further details on how the Group defines

what is material are detailed on page [43](#ic9ee50e9083a4e688a2c9cd6f0eaffc2_1-1-1-6-478380).

We evaluate and report on our short-

(up to three years), medium- (three to

seven years) and long-term (more than

seven years) climate-related transition

and physical risks and opportunities, and

their financial implications.

Transition risks may occur when moving

towards a less polluting, low-carbon

economy. Such transitions could mean

that some sectors of the economy face

big shifts in asset values or higher costs

of doing business. Climate change means

we may face more frequent or severe

weather events like flooding, droughts

and storms. These events bring physical

risks that impact our business and society

directly and have the potential to affect

the economy.

The TCFD recommends applying widely

used reference scenarios that are publicly

available and peer reviewed. For 2023,

our assessment of the financial implications

of our climate change-related risks and

opportunities was prepared considering

1.5°C, 2°C and business-as-usual

(BAU) scenarios1, 2, 3.

Physical risks and opportunities are

considered more severe under the BAU

scenario, as under this scenario, physical

climate change-related events will be more

frequent and severe with an increased

likelihood of impact on our business.

Under the 1.5°C and 2°C scenarios we still

observe some impacts of physical climate

risks. Our mitigation measures are designed

to reduce the impact of these risks under

the three presented scenarios.

In contrast to physical risks, transition risks and

opportunities increase in likelihood under the

2°C scenario compared with BAU, with earlier

policy action and a more aggressive transition,

and are further amplified under the 1.5°C

scenario. This is driven by an increase in

stricter regulations around carbon and energy

as well as the increased scrutiny of target

achievements through increased market

and customer pressure.

Given the nature of transition risks, the

likelihood of occurrence is lower under

the BAU scenario, as there is limited

change projected to current regulation

and litigation pressures.

During the year, we assessed our climate

change-related risks and opportunities and

have specified the estimated financial impact,

outlining a potential reduction in operating

profit for risks and a potential increase in

operating profit for opportunities, as disclosed

in the tables below and on pages [60](#i5d04415564ad44f89b4cf7f05feba160_117181)-[62](#i5d04415564ad44f89b4cf7f05feba160_162329),

taking into consideration mitigation measures

implemented by the Group. These risks and

opportunities only reflect our climate

change‑related risks and opportunities

and reflect an update of the risks and

opportunities presented in our 2022

Integrated report and our 2023 CDP

submission. For an overview of all our Group

principal risks, please refer to page [72](#i47a6727b8bad4fe28addb4dae187e293_6531).

1The IPCC’s most optimistic scenario describes a

world where global CO2 emissions are cut to

Net‑Zero by around 2050. The scenario meets the

Paris Agreement’s goal of keeping global warming

to around 1.5°C above pre-industrial temperatures,

with warming hitting 1.5°C but then dipping back

down and stabilising around 1.4°C by the end of

the century.

2The International Energy Agency’s 2°C scenario is

based on limiting global temperature rise to below

2°C above pre-industrial levels under an emissions

trajectory that allows CO2 emissions to be reduced

by almost 60% by 2050 compared with 2013.

Under this scenario emissions are projected to

decline from 2020 and they continue their decline

after 2050 to reach carbon neutrality.

3The Representative Concentration Pathway’s 8.5

(RCP8.5) scenario is a business-as-usual (BAU)

scenario, which projects the global mean

temperature to rise by 2.6°C to 4.8°C and the

global mean sea level to rise by 0.45 metres to 0.82

metres by the late 21st century.

|  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Climate change-related risks and opportunities | | | | | | | | | | |  |
|  | Climate change-related risks | | Estimated financial  impact (€m) |  | Timeframe | | |  | Scenario sensitivity | | |  |
|  |  | Short | Medium | Long |  | 1.5°C | 2°C | BAU |  |
|  | Physical  risks | 1. Higher wood procurement costs | 90-180 |  |  | | |  |  |  |  |  |
|  | 2. Risk of flooding | 15-85 |  |  | | |  |  |  |  |  |
|  | 3. South African plantation yield loss | 15-20 |  |  | | |  |  |  |  |  |
|  | 4. Chronic changes in precipitation | 10-15 |  |  | | |  |  |  |  |  |
|  | Transition  risks | 5. Energy supply costs | 60-150 |  |  | | |  |  |  |  |  |
|  | 6. GHG emissions regulatory changes  (net impact) | 30-85 |  |  | | |  |  |  |  |  |
|  | 7. Asset impairment risk | 10-30 |  |  | | |  |  |  |  |  |
|  | Total climate change-related risks | | 230-565 |  |  | | |  |  |  |  |  |
|  | Climate change-related opportunities | |  |  |  | | |  |  | | |  |
|  | 1. Changing customer behaviour | | 120-240 |  |  | | |  |  |  |  |  |
|  | 2. Reduced operating costs through energy efficiency | | 15-25 |  |  | | |  |  |  |  |  |
|  | 3. Sale of by-products | | 15-20 |  | Orange line with dot_left.svg | | |  |  |  |  |  |
|  | Total climate change-related opportunities | | 150-285 |  |  | | |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Orange line_short.svg  97_97_96_Circle_100%.svg | Anticipated onset of  risk or opportunity  Estimated full impact  of risk or opportunity | |  |  | High likelihood  Low likelihood | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 59 |
|  |  |  |

#### Climate change-related risks: Physical risks

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Risk | Risk description | How we manage and mitigate this risk | Estimated  financial  impact  (€m) |
| 1. Higher wood  procurement  costs  Timeframe:  Long term | Temperature increase, changes in rainfall patterns  and windstorms can result in large-scale forest damage.  In Europe , at lower altitudes, fibre losses from pests  (e.g. bark beetles) and diseases are expected  to continue unless precipitation increases.  A reduction in the cutting capacity of the sawmilling  industry due to a lack of spruce saw logs could lead  to a change in the mix of available pulpwood  and sawmill chips.  Increasing competition for wood is being driven  by demand for renewable raw materials and timber  for green energy generation to achieve EU GHG  reduction and Net-Zero targets. At the same time,  there is a call to increase forest areas set aside  for conservation, which is reflected in the 2030  EU Forest Strategy. | In mountainous regions, we expect an increase in yearly  forest growth due to rising temperatures. At lower altitudes,  spruce will be mainly replaced with other softwood species.  We are investigating alternatives to support flexibility in  species mix for our future pulp production.  We invest in research and development projects and are  building strategic partnerships with forest owners and  industries, NGOs and scientific institutions to foster  sustainable forest management.  This is supported by the sustainable working forest model  and fit-for-purpose certification concepts, which we  developed and promote with our partners. We have started  to explore approaches to climate-fit forestry to enhance  forest ecosystems’ resilience.  We also promote the cascading use of wood nationally  and via Cepi on a European level. | 90-180 |
| 2. Risk of  flooding  Timeframe:  Long term | Our mills are often located close to rivers which provide  the water needed for our operations.  Climate change may increase the frequency and extent  of flooding events through surface water flooding  (e.g. after extreme rainfall or rapid snow melting) or  flooding of low-lying coastal regions (due to sea level  rise) which may cause damage to our operations.  While taking into account the investments we have  made at our operations to mitigate the potential impact  of flooding, our risk quantification considers mill  downtime due to wider local infrastructure damage  in the event of a significant flooding event. | Our operations regularly review their flood prevention plans,  collaborate with governments and hydropower energy  providers in the regions where we operate and invest in  flood protection solutions where necessary.  Our current flooding assessments show the measures  implemented are generally sufficient to mitigate this risk  to an acceptable level, with only a few additional measures  required such as the elevation of motors and vulnerable  equipment, additional pumps and water-level sensors.  Our geographic diversification enables operational flexibility  to meet customer orders if flooding were to occur at a mill. | 15-85 |
| 3. South  African  plantation  yield loss  Timeframe:  Medium term | Increased severity and frequency of extreme weather  events may result in disruptions and decreased  harvesting capacity of our managed plantation forests.  Extreme weather conditions may impact plantations  through sustained higher temperatures, which can lead  to stronger winds and increased windfalls. Plantations  may be vulnerable to changes in rainfall patterns and  erosion. Higher temperatures may increase vulnerability  of trees to pests and diseases. Fire remains a challenge  for our South African plantations, exacerbated in years  when drought conditions occur. | Our tree improvement programme aims to produce stronger,  more robust trees that can resist disturbances such as  drought, pests and diseases. We mitigate fire risks with  naturally vegetated open corridors acting as fire-breaks  between forest plantations, under canopy biomass  management and investment in a modern firefighting fleet  and professional firefighters.  We have improved pre- and post-burning assessments at  harvesting sites. These aim to mitigate the risks of erosion  and nutrient loss after prescribed burning to ensure healthy  soils, which are critical for productive plantation forests. | 15-20 |
| 4. Chronic  changes in  precipitation  Timeframe:  Long term | Water is a key natural resource used in our production  process. Extended water shortages are a concern as  they could disrupt production at our operations. This is  especially relevant in water scarce regions and locations  dependent on small catchment areas. Water supply  is identified as a risk at our Richards Bay (South Africa),  Frantschach (Austria) and Stambolijski (Bulgaria) mills.  Our risk quantification considers mitigation measures  in place at the mills and is based on lower production  at the mills as a result of water shortages. | We conduct water stewardship assessments and develop  methods to significantly reduce water use by implementing  closed loops and recycling water used in our processes.  We continue to investigate cost-effective improvements  to local water management systems. We work with local  authorities and other industries to identify solutions  to enhance water stewardship around our mills. | 10-15 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 60 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate: TCFD

#### continued

#### Climate change-related risks: Transition risks

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Risk | Risk description | How we manage and mitigate this risk | Estimated  financial  impact  (€m) |
| 5. Energy  supply  costs  Timeframe:  Medium term | Due to increasing regulation on fossil-based energy  sources, increased demand for renewable energy and  the shifting energy supply mix, the Group  estimates that  our total energy costs could increase in the medium  term, estimated by up to 10-20%.  In the medium to long term, the energy supply mix  transition in Europe  includes the closing of coal-fired  power plants, selective closure of nuclear power  capacity and increased reliance on renewable sources  of energy such as onshore and offshore wind, solar  and biomass. Wind and solar energy supply can be  inconsistent due to weather patterns leading to reliance  on fossil fuels during the energy transition period.  The energy supply costs risk quantification uses the  Group’s energy cost structure as a basis for calculation. | We continue to focus on energy efficiency and to deliver  incremental improvements through operational  enhancements and our ongoing capital investment  programme. Biomass accounts for around 78% of our mills’  fuel needs, with only around 10% of our fuel sourced from  natural gas. This has been made possible through significant  investments over a number of years in making our facilities  more energy efficient and increasing backward integration,  primarily into biomass-based energy generation. Investment  in improvements to our sourcing of energy and increased  electricity self-sufficiency, including the use of renewable  energy sources, strengthens the energy efficiency of our  operations while reducing operating costs. Where we  generate electricity surplus to our own requirements,  we may sell such surplus. | 60-150 |
| 6. GHG  emissions  regulatory  changes (net  impact)  Timeframe:  Medium term  SASB_mint.svg | 10 of Mondi’s 13 pulp and paper mills fall under the  EU Emissions Trading Scheme (EU ETS). Some of our  mills have sufficient EU ETS allowances, while there is  potential that five will face a deficit in the medium term,  resulting in the potential for the  Group to be in a net  deficit position. There is a South African carbon tax  on emissions from fossil fuels, which includes fossil fuel  combustion at our Richards Bay and Merebank  operations. The South African carbon tax is currently  offset by our forestry-related sequestration allowance;  however, a small cost is anticipated from 2025 onwards.  Our risk quantification considered an EU ETS carbon  price range of €50 to €150 per tonne CO2 and includes  the anticipated South African carbon tax. | We collect detailed information on GHG emissions from  our mills and consider the cost of carbon when making  investment decisions.  Our ongoing investments reduce our reliance on fossil fuels,  improve energy efficiency and help to mitigate the risk of  insufficient CO2 allowances for our EU-based operations,  and reduce CO2 emissions for our South African operations. | 30-85 |
| 7. Asset  impairment  risk  Timeframe:  Long term | Driven by evolving regulation, there is a risk that certain  of the Group’s  assets may be susceptible to impairment  if regulations require fossil-based energy plants to be  decommissioned by a certain date.  Our risk quantification considers the estimated carrying  value of fossil fuel-based energy plants in our mills  based within the EU at 2030 and their potential  impairment. An impairment is a one-off write-down of  an asset. The mill’s remaining carrying value is excluded  from our quantification as our medium- to long-term  capital investment programme aims to replace fossil  fuel-based energy with renewable sources. | The Group aims to keep abreast of new and evolving  regulation and takes actions to mitigate the impact  of changes either in our own operations or through  participation in cross-value chain partnerships. We also  have the resources and capacity to accelerate low-carbon  energy‑related investments to achieve base load capacity  in the instance of regulatory and/or other required changes. | 10-30 |
| Total estimated financial impact of climate change-related risks | | | 230-565 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 61 |
|  |  |  |

#### Climate change-related opportunities

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Opportunity | Opportunity description | How we realise this opportunity | Estimated  financial  impact  (€m) |
| 1. Changing  customer  behaviour  Timeframe:  Short to  long term | The growing demand for sustainable packaging is  driving investment, collaboration and innovation to meet  evolving customer needs. Paper-based packaging is  renewable and generally recyclable making it an ideal  alternative to less sustainable solutions. Where certain  barriers are required, flexible plastic packaging can be  a better alternative when manufactured, used and  disposed of appropriately. Leveraging our unique  portfolio of paper-based, hybrid and flexible plastic  solutions, we see an opportunity to meet the demand  for more sustainable products, using our leading  corrugated packaging and flexible packaging footprint  and increasing the focus on recyclability and the amount  of recycled content used within our solutions.  While we continue to enhance our understanding  around this opportunity, our estimated quantification  is based on revenue growth of 1-2% per annum for  our packaging businesses in the long term. | As a leading packaging producer, Mondi is well positioned  to leverage the Group’s innovation capabilities, leading  market positions and strong customer base.  We actively collaborate with our customers to develop  innovative solutions that are sustainable by design, taking  industry-wide design for circularity guidelines into  consideration.  We are also investing in our asset base to increase our  cost‑advantaged packaging capacity to meet growing demand.  We are leveraging strong partnerships to bring about positive  change and drive the transition to a circular economy. | 120-240 |
| 2. Reduced  operating  costs through  energy  efficiency  Timeframe:  Medium term | The production of pulp, paper and packaging is energy  intensive and energy generation is the major source  of our GHG emissions. By improving the efficiency  of our energy plants and manufacturing operations,  we have the opportunity to realise cost savings. | Investing in optimising energy and process efficiencies  in our operations has been a long-standing focus.  The Group’s current capital investment programme  continues to prioritise investments in energy efficiency  measures and in increasing biomass-based energy in  our mills.  Further investment projects are planned to meet our  science-based Net-Zero GHG emission reduction targets  over the coming years, which is also expected to reduce  our specific energy costs and improve energy efficiency. | 15-25 |
| 3. Sale of  by-products  Timeframe:  Short term | Renewable by-products of the kraft pulping process  include products such as tall oil. Renewable by-products  are highly valued as substitutes for fossil fuel-based  materials. They can be used internally for energy  generation or extracted, purified and sold as higher  value secondary raw materials.  We are investigating additional opportunities to use  other by-products (e.g. lignin from black liquor and  eucalyptol extraction) to create additional revenue  streams in the future. | The extraction and sale of renewable by-products from the  kraft pulping process is part of our circular economy approach.  We continue to invest in our mills to realise this opportunity,  which is dependent on the existing infrastructure. | 15-20 |
| Total estimated financial impact of climate change-related opportunities | | | 150-285 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 62 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate: TCFD

#### continued

#### Risk management

Climate change is specifically identified

as a standalone Group principal risk, as

detailed on page  [75](#i59401be48aff422ca3ff72ccccacb8fe_1-2-1-4-415973) . Climate change risks,

and the related mitigating actions, are

reviewed and updated annually using

the input of the content reviewed by

the SD Committee and presented to

the Audit Committee along with all Group

principal risks. Read about the Group’s  risk

management framework on pages [69](#i816de67e575b4fc8bb04900680f66329_229639)-[70](#i84a00851d50b4e61a9c13ac6f75dac9e_2-3-1-1-370767) .

A cross-functional climate risk  team

identifies and assesses our material climate

change-related risks and opportunities

through an iterative continuous

improvement process. The annual review

considers the breadth of our business,

across operating locations and our product

portfolio, including consultations with

internal and external technical subject

experts and senior operational

management. Our climate change-related

risks and opportunities are reviewed

and approved by the Executive Committee

and the SD Committee annually.

Climate change-related risks and

opportunities are managed and where

possible mitigated by our operational

management team and through our capital

investment programme. The climate

change-related risks and opportunities

are considered in the preparation of,

and integrated in, the Group’s three-year

2024-2026 plan (budget period).

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  | Climate-related risk integration into our risk  management framework | |  |
|  | TCFD risk management graphic)_V11.svg | |  |
|  | Group risk  – Climate change is specifically identified as a standalone Group  principal risk  – Detailed annual risk assessments performed across the  Group  – Regular review of climate change-related matters by the SDC  Risk monitoring  – Monitor progress against our science-based Net-Zero targets for Scope 1, 2 and 3  emissions based on a 1.5°C global warming scenario  – Review of climate change-related risks and opportunities impact on budget planning  Operational mitigation and controls  – Invest to optimise energy and process efficiency and replace fossil fuel-based energy with  renewable sources  – Risk mitigation tools such as detailed flood management plans | |  |
|  |  | Risk management framework  Page [69](#i816de67e575b4fc8bb04900680f66329_229639)-[70](#i84a00851d50b4e61a9c13ac6f75dac9e_2-3-1-1-370767) |  |
|  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 63 |
|  |  |  |

Metrics and

#### targets

The Group uses a variety of metrics to

measure the current and potential impact

of our climate change-related risks and

opportunities, including GHG emissions,

sustainable fibre metrics, waste to landfill,

NOx emissions, water use and effluent

load (COD) in waste water.

The targets covering GHG emissions

from Mondi’s  operations and value chain

(Scope 1, 2 and 3) are consistent with a

reduction required to keep global warming

to 1.5°C by 2050 and prevent the most

damaging effects of climate change

according to the latest climate science.

|  |
| --- |
|  |
| Quotemark_MINT.svg  Given the strategic importance  of sustainability, the Group’s  executive directors’ and the  wider senior management’s  remuneration is linked to their  contribution to the overall  success of MAP2030, including  our GHG reduction targets. |

Direct GHG emissions are from our energy

plants through combustion of fuels to

generate the energy required for our

manufacturing (Scope 1). We also purchase

energy from the grid (Scope 2) and have

indirect GHG emissions throughout the value

chain, mainly as a result of our purchase of

raw materials, fuel and transportation, which

together make up more than 95% of our

total Scope 3 emissions. We are acting

across all three Scopes and working closely

with our partners to reduce GHG emissions

for our business and our value chain.

Our science-based Net-Zero targets

include both short-term and long-term

GHG emissions reduction targets and are

approved by the SBTi. Our existing Scope

1, Scope 2 and Scope 3 science-based

targets are ambitious and in line with a

1.5°C scenario.

We remain committed to zero

deforestation in our wood fibre supply

chains and to maintaining carbon sinks

in forestry through implementation

of best forest management and

silviculture practices.

|  |  |
| --- | --- |
|  |  |
|  | Taking Action on Climate  Page [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489) |

We report our GHG emissions according

to the Greenhouse Gas Protocol, published

by the WBCSD and the WRI, and have

reported our Scope 1, 2 and 3 GHG data

in compliance with ISO 14064:1-2006.

ERM CVS has assured, to a reasonable level

of assurance, our 2023 absolute Scope 1

and absolute Scope 2 GHG emissions data,

in accordance with ISO 14064-3, and to

a limited level of assurance our Scope 3

GHG data.

Given the strategic importance

of sustainability, the Group’s executive

directors' and the wider senior

management's remuneration is linked

to their contribution to the overall success

of MAP2030, including our GHG reduction

targets. 20% of the annual bonus awarded

to members of the Executive Committee,

which includes the Group CEO

and the Group CFO, and more than

3,000 employees across the Group,

is linked to sustainability objectives.

|  |  |
| --- | --- |
|  |  |
|  | Remuneration report  Page [122](#i47a6727b8bad4fe28addb4dae187e293_3019) - [149](#i3303ad506f594d9f922659fb3ad314ff_14660) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
| We are developing our climate-related metrics in accordance with the revised guidance provided by the TCFD in October 2021.  The table below describes these metrics in more detail. | | | | |
| Cross-industry, climate-related  metric category | Our approach | Climate-related  risk/opportunity | Further  information | |
| GHG emissions | We report our performance against Scope 1, 2 and 3 emissions | Risk 6 |  | Page [61](#i5d04415564ad44f89b4cf7f05feba160_200533) |
| Transition risks | We report the potential financial impact for three transition risks,  as well as the mitigation measures in place | Risks 5, 6, 7 |  | Page [61](#i5d04415564ad44f89b4cf7f05feba160_200533) |
| Physical risks | We report the potential financial impact for four physical risks,  as well as the mitigation measures in place | Risks 1, 2, 3, 4 |  | Page [60](#i5d04415564ad44f89b4cf7f05feba160_117181) |
| Climate-related  opportunities | We report the potential financial impact for three opportunities  arising from climate change, including the impact on demand  for our products | Opportunities 1, 2, 3 |  | Page [62](#i5d04415564ad44f89b4cf7f05feba160_162329) |
| Capital deployment | We discuss our capital investment strategy deployed to mitigate  the impact of climate change | Risks 2, 5, 6, 7 |  | Page [58](#i5d04415564ad44f89b4cf7f05feba160_201184)-[61](#i5d04415564ad44f89b4cf7f05feba160_200533) |
| Internal carbon prices | We consider the impact and cost of the Group’s GHG emissions  when evaluating our capital investment projects | Risk 6 |  | Page [61](#i5d04415564ad44f89b4cf7f05feba160_200533) |
| Remuneration | Annual bonus incentives include a proportion associated  with GHG emissions |  |  | Page [64](#i712edf6be865411383dc1ae4d312326d_0-0-1-1-469623) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 64 |
|  |  |  |

#### Mondi Action Plan 2030

## Taking Action on Climate: TCFD

#### continued

#### Our

#### responsible business practices e

n

#### compass environmental performance, human rights, community

and responsible procurement. Each area has its own commitments and targets to guide our actions.

### Environmental performance

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Commitment: We will continually work on improving the environmental performance of our  operations to minimise environmental impacts | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| Reduce specific contact water consumption  by 10% by 2030 from a 2020 baseline |  |  |  | Specific contact water consumption decreased by 4%  compared with our 2020 baseline. We reported a slight 1%  decrease against 2022 |
| Reduce specific effluent load (measure  COD) by  15%  by 2030 from a 2020 baseline |  |  |  | Specific COD emissions increased by 2% compared with  our 2020 baseline, and  increased by  10%  since last year,  due to operational challenges at the wastewater treatment  plants of two mills |
| Reduce specific NOx emissions from our  pulp and paper mills by 10% by 2030 from  a 2020 baseline |  |  |  | Our specific NOx emissions were 10% lower compared  with our 2020 baseline, and  5%  lower than last year.  This is mainly due to investments in energy efficiency  and modernisation of our energy plants at our mills |
| Reduce specific waste to landfill by 30%  by 2030 from a 2020 baseline |  |  |  | Specific waste to landfill decreased by 44%  compared  with our 2020 baseline, and 39%  compared to last year,  mainly due to projects in Richards Bay (South Africa)  and Ružomberok (Slovakia) |
| 100% of our operations will be certified  according to globally accepted  environmental standards equivalent to  ISO 14001 by 2025 |  |  |  | 100% of our pulp and paper mills and 76% of our  converting operations are ISO 14001 certified. This is an  increase from 74%  in 2022 to  79%  across the  Group |

### Human rights

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Commitment: Strengthen governance systems to prevent human rights violations and remedy any  adverse impacts | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| Develop the due diligence and risk  assessment methodology and guidance  with the support of the Danish Institute  for Human Rights (DIHR) by the end of 2021 |  |  |  | Completed this target in 2021 and continuously integrate  the learnings from the due diligence process to improve  our methodology |
| 100% of operations with a completed Human  Rights Due Diligence and risk assessment  and action plan in place to address findings  by 2025 |  |  |  | Implementation of the Human Rights Due Diligence  approach initiated in all our operations, through detailed  risk identification as a baseline for our action plan and  roadmap going forward |
| 100% of operations to have addressed their  human rights impacts (investigate, prevent  future occurrences and remedy adverse  impacts) by 2030 |  |  |  | No adverse impacts identified in our operations. We will  continue to work on the improvement areas defined  to further mitigate our human rights risks |

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
| Key |  | Completed |  | On track |  | Behind target |  | Not on track |  | In development |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 65 |
|  |  |  |

#### Responsible business practices

## Delivering on responsible

## business commitments

![RBP_mondi_brush_orange-yellow-4-hires_1_crop.png]()

### Communities

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Commitment: Maintain social investments in our communities to support sustainable development  aligned with local needs | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| Report on our total social investment annually |  |  |  | In 2023 we spent €7.3 million on social investments |

### Procurement

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Commitment: We mitigate risks and create greater transparency in our supply chains through our  Responsible Procurement process | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| We will minimise the supplier risk ratio\*  year‑on‑year |  |  |  | We introduced a robust third-party sustainability rating  tool, improving transparency and risk management in  our supply chain and strengthening our Responsible  Procurement process for scale up across our supply chain.  At year end, 1.1% of the 460 supplier production sites  screened in the pilot remain potential high-risk with clear  actions for risk mitigation defined. |
|  |  |  |  |  |
| Commitment: Ensure that all our wood fibre (round wood, wood chips and market pulp) is sourced  solely from credible wood sources | | | | |
| Target | Performance against baseline | | | This year at a glance |
| 2021 | 2022 | 2023 |
| Maintain 100% of wood fibre compliant  with credible standards (FSC, PEFC,  or controlled wood) |  |  |  | Achieved in 2023 |
| For high-risk countries, maintain 100% FSC-  certified fibre sourcing or implement  additional risk mitigation measures |  |  |  | Achieved in 2023 |
| 100% PEFC- or FSC-certified market pulp |  |  |  | Achieved in 2023 |
| 100% PEFC or FSC Chain-of-Custody  certification for our pulp and paper mills |  |  |  | Achieved in 2023 |
| We will continue to work with certification  bodies to ensure credibility of the  certification and controlled wood systems |  |  |  | Mondi participated in the PEFC/SFI Joint Conference in  Canada, where members approved the PEFC strategy |

\*Total number of residual high-risk suppliers divided by the total number of suppliers screened.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 66 |
|  |  |  |

#### Responsible business practices

## Delivering on responsible

## business commitments

#### continued

![BORBP_mondi_brush_orange-yellow-4-hires_1_crop.jpg]()

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | Built on Responsible white.svg |  |
|  | MAP2030, our  sustainability framework,  is built on a foundation  of responsible business  practices and created  around our purpose  of contributing to a  better world by making  innovative paper and  packaging solutions that  are sustainable by design. |  |
|  |  |  |

En

#### vironmental performance

Our manufacturing processes depend

on natural resources, with environmental

impacts primarily from our pulp and paper

mills. We generate most of the energy we

use from biomass-based by-products, in

pulp manufacturing and from fossil fuels,

which result in greenhouse gases and other

air emissions. Our manufacturing processes

also use significant amounts of water

and generate waste.

By investing in our operations, efficiently

using water resources, working towards

zero waste and reducing air emissions,

we reduce our environmental impacts

and prevent environmental degradation.

We are implementing best available

techniques, modernising our energy

sources and manufacturing facilities to

reduce our water and air emissions. In turn,

this is helping us to run resource-efficient

operations, avoid disturbances and protect

the rights of our stakeholders. We engage

with external stakeholders to reduce our

environmental impacts, finding alternative

solutions in collaboration with industry

partners and innovating together

to support a circular economy.

Our Environment Policy outlines the

requirement for cleaner production and

the drivers for our commitments. Our

Sustainable Development Management

System has environmental management

systems that support us to: meet

environmental protection standards;

comply with legislation; improve reporting

and transparency; and adhere to the

principles of resource efficiency.

#### Water

We aim to reduce our water consumption

and increase water recycling in our

operations. Managing water resources in an

efficient and sustainable way, and investing

in up-to-date water infrastructure, is a

priority – particularly in regions with high

water-related risks. In 2023, we reduced

our specific contact water consumption

by 4% from our 2020 baseline.

We monitor the water we withdraw by

source and report on water use in our

manufacturing and energy generation.

In 2023, we conducted water stewardship

assessments, focused on regions with

higher water risk. We have a focus at

each mill to tackle water consumption,

supported by experts in our Group

Technical & Sustainability teams.

#### Air emission

s

Our main source of air emissions is on-site

energy generation in our boilers and lime

kilns. Air emissions associated with

combustion of fuels for energy production

include nitrogen oxide (NOx) emissions,

generated by fossil fuels and biomass

incineration. These substances can damage

forests, crops and other vegetation by

acidification of soils. We regularly monitor

SO2, NOx, total reduced sulphides (TRS)

and dust, and we calculate our GHG

emissions based on fuel consumption.

We strictly adhere to permitted limits

and are continuously investing in our

operations to minimise our air emissions.

For more information on our air emissions,

please see our GRI & SASB Index and

Consolidated Performance data

documents, available on our website.

|  |  |
| --- | --- |
|  |  |
|  | Sustainability reports and publications  [www.mondigroup.com](https://www.mondigroup.com/) /sustainability/  reports-and-publications |

#### Waste

To reduce our waste sent to landfill and

increase the circularity of our material flows,

we are exploring alternative solutions

involving recycling and reuse.

We monitor the volume of our operational

waste (by waste type and waste routes)

across all operations and are investigating

alternative routes to divert unavoidable

waste from going to landfill. In 2023, we

generated about 0.8 million tonnes of

waste in our manufacturing operations,

of which 74% was brought back into value

creation processes by recycling and reuse

of secondary raw materials. We disposed

of 65,000 tonnes of waste to landfill

(2022: 116,000 tonnes). Approximately 2%

of our total waste streams is hazardous

waste and in 2023, we sent around

600 tonnes of hazardous waste to landfill –

approximately 1% of our total waste

to landfill (2022: 4%).

#### Human rights

We respect human rights in our operations

and across our supply chain, and our human

rights approach is embedded into our

relevant practices and policies. We report

against the ten principles of the United

Nations Global Compact and publish a

Human Trafficking and Modern Slavery

Statement according to the UK Modern

Slavery Act annually. We have robust

internal processes and tools to facilitate

the reporting, investigation and resolution

of potential human rights violations.

Our priority human rights risk areas are

determined by and take into consideration

any inherent geographical risk, as well as

business processes, industry risks and

legislative requirements. We focus on

the most significant topics: fair working

conditions, freedom of association and

collective bargaining, indigenous and land

rights, modern slavery, child labour

and safeguarding our environment.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 67 |
|  |  |  |

Our Human Rights Due Diligence approach

is a continuous management process,

and we review our operational impacts

through regular stakeholder engagement,

collaborating with external human rights

experts, and engaging with our partners and

in our communities. We conducted in‑depth

risk assessments across all operations in

2023, reflecting our prioritised human rights

risk focus areas and highlighting areas

to improve. The established baseline of

identified risk areas and mitigation processes

sets the foundation for our human rights

action plan and roadmap.

Through our anonymous whistleblowing

and grievance platform SpeakOut and

other channels, we received messages

relating to 90 incidents (2022: 47 incidents).

Topics encompassed allegations

concerning work-related harassment

and unfair treatment, labour rights and

safety and health matters.

#### Communities

We aim to maximise our positive impact

in local communities by supporting their

sustainable development. We engage

with our local stakeholders to understand

the needs of our communities and how

we impact them.

In 2023, we conducted Stakeholder

Engagement Conversations in our

Ružomberok (Slovakia) mill. These open

dialogues with a variety of stakeholders,

facilitated by an independent third party

inform our understanding and actions

in relation to our local impact.

Our voluntary investments include

contributions where we can make the

greatest difference, as well as employees

sharing their skills, time and networks.

We focus on initiatives related to education,

environmental protection, enterprise support

and job creation, as well as support for

community health care and infrastructure

development. Our social investments in

2023 were €7.3 million (2022: €8.9 million).

In times of crisis we provide special

donations to credible NGOs and aid

organisations to help their efforts.

#### Procurement

Continuously improving transparency and

sustainability in our supply chain is an

essential part of our responsible business

practice. We collaborate with our suppliers

to support responsible procurement,

manage supply chain risk and enhance our

suppliers’ own sustainability practices.

In 2023, our global supply chain included

around 12,000 suppliers in 69 countries.

We procured €6.2 billion worth of

goods and services from these suppliers

(2022: €7 billion), with 57% sourced

locally (2022: 58%).

To address specific wood and pulp

procurement requirements, our dedicated

Due Diligence Management System

(DDMS) verifies that we purchase all our

wood fibre from responsible sources in line

with our commitment to zero deforestation.

In 2023, 100% of our wood fibre was

compliant with FSC, PEFC or Controlled

Wood requirements.

For all other materials and services, we

identify sustainability risks and assess

supplier performance through our

Responsible Procurement process,

which improves transparency and supports

supplier engagement. In 2023, we began

collaborating with the global sustainability

rating company EcoVadis with a selected

pilot group of 460 Mondi suppliers:

36 suppliers with high sustainability

risk were invited to participate in an

individual assessment. From this,

5 suppliers were unresponsive or

declined our assessment invitation

and remain potential high-risk (1.1%).

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  | Sustainability governance  The Board is responsible for  sustainability governance and  delegates different areas of  responsibility to specific committees  and functions, including the  Sustainable Development  Committee, Audit Committee,  Remuneration Committee,  Executive Committee, Operational  Management team as well as  different Group functions and  networks. Our Sustainable  Development Management  System (SDMS) guides effective  governance of our activities and  the implementation of policies.  Our Business Code of Ethics  supports high ethical standards  across our organisation. The Business  Integrity Policy outlines Mondi’s zero  tolerance of bribery and corruption.  It forms part of the annual Group  risk assessment process and  outcomes are reviewed by the  Audit Committee and the Board.  All relevant employees must  complete mandatory business  integrity training each year, which  covers anti-corruption topics.  We follow strict guidelines and  procedures to ensure compliance  with applicable laws and regulations. | |  |
|  |  |  |  |
|  |  | Read online  [www.mondigroup.com/](https://www.mondigroup.com/sustainability/approach/governance)  [sustainability/approach/governance](https://www.mondigroup.com/sustainability/approach/governance) |  |
|  |  |  |  |
|  | Sustainability-related  performance in remuneration  20% of the annual bonus awarded  to members of the Executive  Committee, which includes the  Group CEO and the Group CFO,  and more than 3,000 employees  across the Group, is linked to  sustainability targets. The  sustainability KPIs cover all three  MAP2030 action areas: reduction  of specific GHG emissions (5%);  reduction of specific waste to  landfill (5%); and safety (10%). | |  |
|  |  |  |  |
|  |  | Remuneration report  Page [122](#i47a6727b8bad4fe28addb4dae187e293_3019)-[149](#i3303ad506f594d9f922659fb3ad314ff_14660) |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 68 |
|  |  |  |

#### Responsible business practices

## Delivering on responsible

## business commitments

#### continued

|  |  |
| --- | --- |
|  |  |
|  | Sustainable Development  report 2023  <www.mondigroup.com/sd23> |

![02-iPad-Air-Landscape-Mock-up_Mondi_SDr_Cover_2023_crop.png]()

#### Our



#### Group

#### risk management

#### framework

#### and internal control

environment are designed to

#### address the risks that could

#### undermine our business model

#### and ability to execute our

#### strategy into the future.

#### Our risk management

#### framework

The Board has overall responsibility

for setting the  Group’s strategy and is

responsible for monitoring and maintaining

the effectiveness of the Group’s risk

management activities and internal control

processes. The Board has put in place

procedures for identifying, evaluating and

managing the risks faced by the Group.

The Board has determined the Group’s

residual risk exposure and related risk

appetite, using a risk rating matrix

which takes into consideration both the

likelihood of the risk event occurring and

the magnitude of the impact in the event

that the risk event occurs. The risk rating

matrix is based on the residual risk

that the Group faces after taking into

consideration the internal control

environment and related mitigating actions

and controls. The Board has established

specific appetite levels for each principal

risk, ensuring that our risk exposure

remains appropriate at all times. The Board

considers changes in principal risks and

reviews emerging risks during the year.

The Audit Committee performs an annual

review of the Group’s principal risks and

related mitigation, including consideration

of acceptable risk appetite levels for the

Group. Each of the Group’s principal and

emerging risks is reviewed in detail by

either the Board, the Audit Committee or

the Sustainable Development Committee

through the course of the year, considering

the detailed risk description, the controls

and mitigating actions in place, the level

of internal and external assurance obtained,

and the resultant residual risk exposure.

Business units are required to conduct

an annual, detailed review of their risks

and compile a risk register which is

reviewed and approved by the business

unit operating committees. The risk

management process ensures that the

various business unit operating committees

review the principal and emerging risks

in their respective businesses and identify

the actions and controls to mitigate these

risks. Management assurance is provided

on both a formal and informal basis.

Risk management is embedded in all

decision‑making processes and captured

in our policies, procedures and delegated

authorities, with ongoing review by the

Board and risk assessments forming part

of all investment decisions.

In combination with the Audit Committee,

the Board conducted, over the course

of the year, a robust assessment of the

Group’s principal and emerging risks to

which Mondi is exposed and it is satisfied

that the Group has effective systems and

controls in place to manage these risks

within the risk appetite levels established.

#### Our internal control

#### environment

Our internal controls aim to provide

reasonable assurance as to the accuracy,

reliability and integrity of our financial

information and non-financial disclosures

and the  Group’s compliance with

applicable laws, regulations and internal

policies, as well as the effectiveness

of internal processes.

Through our structured approach, the

control environment is subject to regular

monitoring and review to reduce the

likelihood of any significant deficiencies

arising, control weaknesses are identified

and addressed, and new or emerging risks

are identified early and monitored regularly.

The Group’s internal control systems have

been in place for the year under review and

up to the date of approval of the Integrated

report and financial statements 2023 and

are in accordance with the Guidance on

Risk Management, Internal Control and

Related Financial and Business Reporting

issued by the Financial Reporting Council.

No significant failings or weaknesses were

identified in the internal control systems

for the year under review.

The Board and its committees have

approved the Group’s financial, business

conduct, operating and administrative

policies, including those relating to

delegation of signing authorities and

information security. The policies provide

a framework for the Group’s internal

control environment and outline required

standards of behaviour. Business units are

required to ensure that they adhere to

approved Group policies and that they

have implemented their own supporting

policies where appropriate. In line with the

approved delegation of authorities, specific

matters are reserved for Executive

Committee or Board approval, including

the approval of major capital investments,

acquisitions and disposals.

Management is responsible for regularly

reviewing the Group’s financial

performance, and it is the responsibility

of management at all operational levels

to ensure that risks are appropriately

managed and a proper internal control

environment is in place to anticipate and

respond to risks. The Group’s financial

reporting process includes the monthly

results and management reports, an annual

three-year plan (budget period), and three

updates to the first budget year during

the course of that budget year. Detailed

monthly management reports and variance

analyses comparing actual with planned

results are prepared. In-depth reviews of

business units and market developments

are performed regularly, and are designed

to ensure ongoing monitoring of financial

and sustainability performance and early

identification of potential issues and/or

emerging risks. In addition, the Board

reviews the Integrated report and financial

statements to ensure it is fair, balanced and

understandable, and the Audit Committee

reviews and approves the accounting

policies for each financial year.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 69 |
|  |  |  |

#### Principal risks

## Managing our risks

|  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |
|  | Our risk management framework and internal control environment | | | | | | |  |  |
|  | External audit  External assurance  is provided through  external audit which  is designed to detect  material errors and  material irregularities  that impact the  financial statements |  | Board | | | | | |  |
|  |  |  | Overall responsibility for the Group’s strategy and risk management | | | |  |  |
|  |  |  | Determines risk appetite in line with Group strategy, and approves the Group’s  risk management framework | | | |  |  |
|  |  |  | Approves the annual three-year plan | | | |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  | Sustainable Development Committee | |  | Audit Committee | | |  |
|  |  | Monitors and reviews material safety, health, environmental  and other sustainable development risks, including climate  change risks and opportunities | |  |  | Reviews and monitors the adequacy and  effectiveness of the Group’s  internal control and risk  management processes |  |  |
|  |  |  |  |  |  | Ongoing review of the principal risks through the course of the year |  |  |
|  | Double Grey arrows.svg |  |  |  |  |  | Approves the annual internal audit plan |  |  |
|  |  |  |  |  |  |  |  |  |
|  | Internal audit  The  Group  has a  centrally coordinated  Internal Audit function  that reports directly  to the Audit  Committee and is  mandated to perform  Group-wide reviews  of key processes,  projects and systems,  based on the  Group’s  strategy  and principal risks |  | Executive Committee | | | | | |  |
|  |  |  | Formulates risk management policies in terms of the approved risk management framework to ensure risks are managed considering  established risk appetite levels | | | |  |  |
|  |  |  | Assesses and monitors risks on an ongoing basis | | | |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  | Business units | |  | Group functions | | |  |
|  |  | Hold the ownership, responsibility and accountability for assessing  and mitigating risks as well as implementing risk management  policies and procedures | |  |  | Responsible for oversight of adherence to the Group’s policies,  procedures and controls; facilitation of the implementation of  risk management practices; and management of specific risk  areas that benefit from central coordination (e.g. controlling,  information technology, legal, procurement, safety and health,  sustainable development, tax and treasury) |  |  |
|  |  |  |  |  |  | Work closely with the business units to manage and monitor these risk areas |  |  |
|  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | The three levels of assurance in our internal control environment | | | | | |  |
|  | Operational management  – Key policies and procedures covering all main areas  of business conduct are approved by the Board  and each business unit and Group function is required  to adhere to these overall Group  policies.  – Management is responsible for regularly reviewing  its entity’s operating, financial and sustainability  performance and for preparing and reviewing  monthly management accounts and business  reports as appropriate.  – Twice a year, all financial managers are required  to complete an internal control assessment  and provide written confirmation of compliance  with Group policies and procedures. This formal  confirmation highlights any control weaknesses  or deficiencies identified. |  | Management review  – Management is responsible for regularly reviewing  the  Group’s operating, financial and sustainability  performance, including monthly management  accounts, and the progress of significant capital  investment projects.  – Management at  Group level and, in more depth,  at business unit level is responsible for a detailed  assessment of current market conditions.  – The Group  functions (controlling, information  technology, safety and health, sustainable  development, tax and treasury) each have  Board‑approved policies in place against which  conduct is regularly assessed. |  | Independent assurance  – Internal and external audit.  – Regular reviews and vetting by external regulatory  and non-regulatory parties, as required and as part  of our operational management, including ISO  certification, Sustainable Development report  assurance and information security programmes.  – The  Group  sustainable development key  performance indicators are externally verified. | |  |
|  |  |  |  | Sustainable Development report  <www.mondigroup.com/sd23> |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  | Grey_arrow_1.svg | Risk management process |  |
|  | Continuous  improvement  strengthens our  processes in line with  our risk management  framework | Risk Management Process_v5.svg |  |
|  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 70 |
|  |  |  |

#### Principal risks

#### continued

#### Principal risks in

2023

Over the course of the past year, the  Board

and the Audit Committee have reviewed

the  Group’s  principal and emerging risks.

In evaluating the Group’s  risk management

and internal control processes, the Audit

Committee has considered both internal

and external audit reports and received

confirmation from the finance directors

of the business units that the Group’s

control frameworks have operated

satisfactorily. The sustainable development

risks considered throughout our business

have been reviewed by the Sustainable

Development Committee during the year.

Sustainable development risks that are

considered to be principal risks are

reviewed by the Audit Committee as

part of the annual review process.

A detailed risk assurance map is used

to present our principal risks to the Board,

Audit Committee and Sustainable

Development Committee, facilitating

comprehensive discussions on risk.

The Group remains committed to

the continuous improvement of risk

assessment, risk management and

risk reporting.

#### Key changes in the year

The Group’s most significant risks are

long term in nature. The assessment

of the principal risks is updated annually

to reflect the developments in our

strategic priorities and Board discussions

on principal and emerging risks.

The pandemic risk has been removed

as a separate Group principal risk and

incorporated as part of the employee

and contractor health and safety risk,

though it is part of the risk consideration

embedded in all the principal risks.

The Group is making progress towards

our MAP2030 commitments. Further details

of our performance in this regard can be

found on page 44. Consequently, the

climate change risk was derated due to

the assessed impact on Mondi after climate

mitigation and adaptation initiatives are

considered. The assessment is supported

by the Group’s capital investment

programme which is focused on growing

capacity through more sustainable means

of production and is designed to help us

meet our science-based Net-Zero targets.

The tax risk was derated with an assessed

decrease in both impact and likelihood.

The assessed derating is supported by

initiatives taken in recent years to reduce

complexity in our legal structure and the

Group's risk occurrence track record.

During the year, the risk to energy security

and related input costs was derated with

an assessed decrease in both impact and

likelihood. Stabilisation of European energy

markets, which are adapting to the impact

of the war in Ukraine and a high inflationary

environment, and a proven operational and

financial performance through a period of

energy price and supply volatility in 2022

and 2023 support confidence in the

Group’s risk mitigating and planning

activities. Additionally, during the year

the Group implemented initiatives to

further reduce dependence on natural gas

to operate our mills.

#### Emerging risks

The Board continues to highlight the

execution of major capital expenditure

projects as an emerging risk. The emerging

risk is managed through mitigating

activities, such that the residual risk

exposure is not considered significant.

All capital expenditure projects are planned

in detail with contingency plans in place

in order to avoid cost overruns and

design and building defects, and to

ensure employee and contractor safety.

Post‑investment reviews are conducted

on major capital expenditure projects

to evaluate the project execution against

the original plan and identify lessons learnt.

We will continue to monitor potential

risks relating to executing major capital

expenditure projects in the year ahead.

#### Risk appetite

A review of the Group’s approach to the

assessment of risk appetite was performed

during the year. The review considered

various risk appetite methodologies

and settled on an optimal approach which

enables risk owners to use and own

the risk appetite in a practical manner.

The Group utilises a four-point

risk appetite rating scale against which

the residual risk of each principal risk

can be considered. Where a difference is

identified between the risk appetite and

residual risk rating, the risk owner provides

an explanation for and a chosen approach

to address the differential to the Executive

Committee and the Board.

The Board, in combination with the Audit

Committee, is satisfied that the review

performed has enhanced the Group’s

approach to risk management.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 71 |
|  |  |  |

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Our principal risks | | | |  |  |  | Link to strategy | | | | |  |
|  |  |  | Risk owner |  |  |  |  |  |  |
|  | Strategic | |  | Industry productive capacity | | | Executive Committee |  | ● | ● |  |  |  |
|  |  | Product substitution | | | ● |  | ● |  | ● |  |
|  |  | Fluctuations and variability in selling prices  or gross margins | | |  | ● | ● |  | ● |  |
|  |  | Country risk | | | ● |  | ● |  |  |  |
|  |  | Climate change risks | | | Group Head of Sustainable Development | ● | ● | ● |  | ● |  |
|  | Financial | |  | Capital structure | | | Group CFO | ● | ● | ● |  |  |  |
|  |  | Currency risk | | | Group Treasurer | ● | ● | ● |  |  |  |
|  |  | Tax risk | | | Group Head of Tax | ● | ● | ● |  |  |  |
|  | Operational | |  | Cost and availability of raw materials | | | Executive Committee | ● | ● |  |  |  |  |
|  |  | Energy security and related input costs | | | Group Head of Operations | ● | ● | ● |  |  |  |
|  |  | Technical integrity of our operating assets | | | ● | ● | ● |  |  |  |
|  |  | Environmental impact | | | Group Head of Sustainable Development | ● |  |  |  |  |  |
|  |  | Employment and contractor health and safety | | | Group Head of Safety & Health | ● |  |  | ● |  |  |
|  |  | Attraction and retention of key skills and talent | | | Group HR Director | ● |  |  | ● |  |  |
|  |  | Cyber security risk | | | Chief Information Officer | ● | ● | ● | ● | ● |  |
|  | Compliance | |  | Reputational risk | | | Executive Committee | ● |  | ● | ● | ● |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Link to strategy  Our principal risks, independently or in combination, may impact the Group’s ability to deliver on its strategy. The above table  indicates the components of our strategy that are most likely to be impacted as a result of each principal risk and are defined below: | | | | | | | | | | | |  |
|  |  | | | | | | | | | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Group risk map  The risk map presents our principal  risks based on a risk exposure score  which assigns a higher weighting  to the impact of a risk event than  to the perceived likelihood. This  emphasises the prioritisation and  escalation of risks that could have  the greatest impact to our business.  The principal risks reflected on the risk  map are updated annually, with the  movement of risks reflecting changes  to principal risks during the year. | | | | |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Risk movement in the year: | | | |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 72 |
|  |  |  |

#### Principal risks

#### continued

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Drive value accretive growth, sustainably | | | | | | | | | |  | Drive performance along the value chain | | | | | | | | | |  |  |  |  |  |  |
|  | Invest in assets with cost advantage | | | | | | | | |  |  | Inspire our people | | | |  |  |  | Partner with customers for innovation | | | | | | | | |

![Heat_map_v6.svg]()

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  | Strategy key |  |  |  |  | Risk trend key | |  |
|  | Driving value accretive  growth, sustainably | Drive performance  along the value chain | Invest in assets  with cost advantage | Inspire  our people | Partner with customers  for innovation | Increase_arrow_red.svg | Increased  No change  Decreased |  |
|  | | | | | | | | |
|  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  | Strategic risks | |  |  |  |  |  |  |
|  |  | Industry productive capacity |  |  |  |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Executive  Committee  (oversight CEO)  Risk trend    Link to  strategy |  |
|  | – Market supply/demand balance is impacted by large incremental  new capacity additions.  – Unless market growth exceeds capacity additions, excess capacity  may lead to lower selling prices.  – Plant utilisation levels are the main driver of profitability in  paper mills.  – Investments in newer technology may lower operating costs  and provide increased product functionality, particularly relevant  in the converting businesses, which can increase competition  and impact margins. | |  | – Monitor industry developments in terms of changes in capacity and  utilisation levels both short and long term, as well as market trends  and trade flows in our product markets, enabling us to establish  target capacity utilisation levels in the short term and to evaluate  capital investment projects in the long term.  – Strategic focus on owning cost-advantaged assets, with consistent  investment to secure our competitiveness, coupled with increasing  our exposure to structurally growing packaging markets.  – Partnering with our customers for innovation, developing sustainable  and responsibly produced products.  – Continuous focus on operational performance, quality, customer  relationships and service, including developing and applying digital  platforms to drive performance in our operations and improve  customer reach.  – Maintaining strong relationships with machine suppliers to identify  current market developments and technologies, coupled with a  routine review of our asset portfolio and capacity utilisation levels  to identify underperforming assets and take decisive action to  drive performance. | |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  | Product substitution |  |  |  |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Executive  Committee  (oversight CEO)  Risk trend    Link to  strategy |  |
|  | – Changes in consumer preferences and socio-economic and  demographic trends can affect the demand for packaging  and paper products in general, and demand for specific grades  of our products in particular.  – Substitution can be to a different packaging or paper substrate  or to a different solution meeting the same need.  – With increased public awareness of sustainability challenges  and our customers’ focus on sustainable packaging, on balance,  our business faces more opportunities than risks, underpinned  by the transition to more sustainable solutions, although there  could be pressures on certain areas of our portfolio.  – Product substitution trends, many of which benefit Mondi, are,  for example: replacing plastic-based with paper-based packaging,  moving to mono-material recyclable plastic packaging solutions,  lighter weighting of products, increasing the recycled content in  packaging, demand for certified and responsibly produced materials  and the impact of digital media on uncoated fine paper demand.  – The EU's Packaging and Packaging Waste Regulation (PPWR)  might further influence product substitution. | |  | – A wide portfolio of paper-based and flexible plastic-based solutions  provides protection from the effects of substitution.  – Engagement with customers and consumers to help understand and  drive a more sustainable approach to their packaging requirements.  – Development of sustainable, competitive and cost-effective  products.  – Continuous focus on products enjoying positive substitution  dynamics and growing regional markets.  – Regular monitoring of trends and new developments in our product  markets.  – Continued collaboration with stakeholders across the value chain  such as the Ellen MacArthur Foundation, CEFLEX and Cepi.  – Providing product impact and life cycle analysis insights to  customers through our Product Impact Assessment tool, product  carbon footprints and other expert analysis on trade-offs. | |  |  |
|  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 73 |
|  |  |  |

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  | Strategic risks continued | |  |  |  |  |  |  |
|  |  | Fluctuations and variability in selling prices or gross margins | | | |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Executive  Committee  (oversight CEO)  Risk trend    Link to  strategy |  |
|  | – Price fluctuations in our key paper products can have material profit  and cash flow implications.  – Selling prices are determined by changes in capacity and demand  for our products, which are, in turn, influenced by macroeconomic  conditions, competitive behaviour, consumer spending preferences  and inventory levels maintained by our customers.  – Changes in prices differ between products and geographic regions,  and the timing and magnitude of such changes have varied  significantly over time.  – Gross margins in our converting operations are impacted by  fluctuations in key input costs, such as paper, which cannot be  passed on to customers in all cases. | |  | – Strategic focus on higher growth markets and products where we  enjoy a competitive advantage through innovation, proximity or  production cost.  – Continued investment in our high-quality, cost-advantaged asset  base, ensuring we maintain our competitive cost position while  developing businesses in higher growth markets with better long-  term fundamentals.  – Exposure to price volatility of key input costs is reduced by our high  levels of vertical integration.  – Financial policies and contract structures take the inherent price  volatility of the markets in which we operate into consideration.  – Ongoing monitoring of current market fundamentals, market demand  trends and market prices, enabling evaluation of price expectations  in the short term and increased understanding of long-term trends.  – Continuous monitoring of our order intake to identify changing  trends and developments in our own product markets.  – Frequent review of gross margin development in order to monitor  price pass through to customers. | |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  | Country risk |  |  |  |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Executive  Committee  (oversight CEO)  Risk trend    Link to  strategy |  |
|  | – The Group  operates in a number of countries with differing political,  economic and legal systems. In some countries, such systems are  less predictable than in countries with more developed institutional  structures. Political or economic upheaval, changes in laws,  nationalisation, or expropriation of assets may have a material effect  on our operations in those countries.  – The current macroeconomic environment is impacted by a number  of uncertainties, including the effects of increased protectionism,  use of trade tariffs and economic sanctions.  – In South Africa , the  Group is subject to land claims and could face  adverse land claim rulings.  – Sustained higher inflation is evident in many economies. Türkiye  is experiencing a hyperinflationary economic environment.  – In Egypt, foreign currency is prioritised to pay for essential goods  resulting in difficulties to source foreign currency to pay our foreign  suppliers. | |  | – Our geographic diversification and decentralised management  structure reduce our exposure to any specific jurisdiction.  Our operational management teams have strong localised  operational experience.  – Capital and debt are structured in each country based on assessed  risks and exposures in order to mitigate the effect of country  specific risks.  – Regular review of our sales strategies to ensure compliance with  trade restrictions and sanctions and to mitigate export risk in  countries with less predictable environments and, where possible,  obtaining credit insurance.  – Country specific risk premiums are approved by the Board to be  added to the required returns on investment projects in those  countries where risks are deemed to be higher; new investments  are subject to rigorous strategic and commercial evaluation.  – Maintain a permanent internal audit presence and operate asset  protection units in large operations in higher risk locations.  – In South Africa, we continue to engage with government on land  matters and monitor how the expropriation bill will be implemented.  The Group has settled a number of land claims structured as sale  and leaseback arrangements, which provide a framework for settling  future land claims.  – Regular formal and informal interaction with government officials,  local communities and business partners helps us to remain abreast  of changes and new developments. | |  |  |
|  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 74 |
|  |  |  |

#### Principal risks

#### continued

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  | Strategic risks continued | |  |  |  |  |  |  |
|  |  | Climate change risks | | | |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Group Head of  Sustainable  Development  Risk trend    Link to  strategy |  |
|  | – Climate change risks will likely impact our business in the medium  and long term.  – The energy we require to manufacture our products results in  Scope 1 and Scope 2 greenhouse gas (GHG) emissions. Our value  chain emissions contribute to our Scope 3 emissions.  – Fibre is the main raw material for our products and forests are an  important carbon store, with sustainably managed forests  supporting a circular bioeconomy.  – Customers and consumers are concerned about the consequences  of climate change and are looking for solutions produced from  renewable materials and reduced carbon footprints. Investors  are increasingly focused on the climate impact of their portfolios.  – Our climate change risks include transition and physical risks.  Transition risks include regulatory risks, for example GHG emissions,  regulatory changes and energy supply cost volatility due to  changes in future energy supply mix. Physical risks include the  impact of water shortages due to drought or changing precipitation  patterns and increased costs driven by a shortage of wood supply  in the long term due to physical impacts such as droughts, pests  and diseases. | |  | – Reducing our GHG emissions through a combination of capital  investment and ongoing efficiency programmes to improve  our energy efficiency, increasing the use of biomass-based fuels  and decreasing carbon-intensive energy sources.  – Sourcing our wood from diverse regions and forest types mitigates  the potential impacts of climate change on our wood fibre raw  material, particularly in Europe. In South Africa, we continue to  investigate and select trees which require less water and are more  resistant to pests and disease.  – Monitoring and measuring our impact on climate change, reporting  and having our GHG emissions and energy usage independently  assured.  – Committing to transition to Net-Zero in line with a 1.5°C scenario  by 2050 and working on reducing our emissions in line with our  approved SBTi targets across Scope 1, 2 and 3 emissions.  – Investigating and reporting on climate change risks and opportunities  in adherence to internationally accepted recommendations, such as  those published by the FSB’s TCFD. | |  |  |
|  |  |  |  |  | TCFD  Pages [55](#i47a6727b8bad4fe28addb4dae187e293_3224)-[64](#i8eb60d69ace440a9b8dac4ed7f61c7cf_2387) |  |  |  |
|  |  |  |  |  |  |  |  |  |
|  | Financial risks | |  |  |  |  |  |  |
|  |  | Capital structure |  |  |  |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Group CFO  Risk trend    Link to  strategy |  |
|  | – A strong and stable financial position enables strategic flexibility  and provides the ability to take advantage of opportunities.  – Our ability to raise debt and/or equity financing is significantly  influenced by general economic conditions, developments in  credit markets, equity market volatility and our credit rating.  – Failure to obtain financing at reasonable rates could prevent us  from realising our strategy and have a negative impact on our  competitive position. | |  | – Maintaining strong investment grade credit metrics provides access  to global debt capital markets.  – Our central Treasury function operates under a Board -approved  treasury policy, targeting investment grade credit ratings and with  access to diverse sources of funding with varying maturities.  – The majority of our external debt is issued centrally.  – Regular reporting to the Board on our treasury management policies.  – Compliance with treasury policies is monitored and we engage  external advisers to review the Treasury function at regular intervals. | |  |  |
|  |  |  |  |  |  |  |  |  |
|  |  | Currency risk |  |  |  |  |  |  |
|  | Description | |  | Key mitigation | |  | Risk owner  Group Treasurer  Risk trend    Link to  strategy |  |
|  | – We are exposed to the effect of changes in foreign currency rates;  the impact of currency fluctuations affects us because of  mismatches between the currencies in which our operating costs  are incurred and those in which revenues are received.  – Key operating cost currencies that are not fully offset by local  currency denominated revenues include the South African rand,  Polish zloty, Czech koruna and Swedish krona, while the  fluctuations in the US dollar, British pound and Turkish lira can also  have a material impact as our revenues in these currencies are  greater than operating costs incurred.  – Appreciation of the euro compared with the currencies of the other  key paper-producing regions or paper pricing currencies, notably  the US dollar, reduces the competitiveness of Mondi products in  Europe compared with imports, which can result in lower revenues  and earnings. | |  | – Hedging is utilised for balance sheet exposures and material  forecasted capital expenditures upon identification.  – Diversification of the Group’s  currency exposure creates natural  hedges, and as such we do not hedge our exposure to projected  future sales or operating costs and our businesses respond  to adverse currency fluctuations by increasing selling prices or  increasing exports where competitiveness improves as operating  currencies weaken; entities also borrow in their local currencies  to minimise translation risk.  – Continuous monitoring of exchange rate movements and  sensitivities, and evaluation of the impact of exchange variances  on our results.  – Regular review of our prices and monitoring of import and export  trade flows. | |  |  |
|  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 75 |
|  |  |  |

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  | Financial risks continued | |  |  |  |  |  |
|  |  | Tax risk |  |  |  |  |  |
|  | Description | |  | Key mitigation | | Risk owner  Group Head of Tax  Risk trend    Link to  strategy | |
|  | – There is an increasing disclosure compliance burden in the  international tax environment, requiring increasing transparency  and reporting and in-depth scrutiny of the tax affairs of  multinational companies, such as the Global Reporting Initiative’s  tax reporting standard.  – We make significant intra-group charges, the basis for which  is subject to review during tax audits. | |  | – A  Board -approved  Group tax strategy is reviewed annually.  – Appropriate and attentive management of our affairs, with  operations structured tax efficiently to benefit from available  incentives and exemptions.  – Dedicated tax resources throughout the Group supported by a  centralised  Group tax team.  – Arm’s length principles are applied in the pricing of all intra-group  transactions in accordance with Organisation for Economic  Co‑operation and Development (OECD) guidelines.  – External advisory opinions are obtained where relevant, including  major projects such as acquisitions and restructuring activities.  – Regular engagement with external advisers to stay up to date with  changes in tax legislation and tax practice. |  |
|  |  |  |  |  |  |  |  |
|  | Operational risks | |  |  |  |  |  |
|  |  | Cost and availability of raw materials |  |  |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Executive  Committee  (oversight CEO)  Risk trend    Link to  strategy |  |
|  | – We use significant amounts of wood, pulp, paper for recycling,  polymers and chemicals in our production processes, meaning  access to these raw materials is essential to our operations.  – The prices for many raw material inputs fluctuate in correlation  with global commodity cycles.  – Wood prices and availability may be adversely affected by reduced  quantities of available suitable wood supply due to increased  frequency of severe weather events, changes in rainfall, increased  pest and disease outbreaks, increased use of wood as biofuel,  alternative use of wood for heating and changes in demand for  wood as a building material.  – Climate change will create long-term structural changes to the  pricing and availability of wood, with temperature and precipitation  changes resulting in a geographic shift of optimal forest growth  areas, and an impact from forest-related legislative policies,  particularly in the EU.  – Force majeure events can influence raw material supply and pricing,  directly affecting the market production and supply balance. | |  | – We are committed to acquiring our raw materials from responsible  sources and avoiding the use of any controversial or illegal supply.  Our Responsible Procurement process helps us to assess and  evaluate the performance of our suppliers and their adherence  to our policies.  – Multi-stakeholder processes address challenges in meeting demand  for sustainable fibre; we encourage legislation for the local collection  of recycled materials.  – Our operations use multiple suppliers and a centralised procurement  team works closely with our operations in actively pursuing  longer‑term agreements with strategic suppliers; in Europe, wood  is sourced from diverse regions and forest types to mitigate the  potential supply impacts of unforeseen events. We source wood  from our own managed forests in South Africa.  – Strong relationships with suppliers of critical raw materials  enable higher volume allocation in times of shortages, and a safety  stock programme facilitates exchange of raw materials within  our plant network.  – Where relevant, indexation clauses in revenue contracts allow  the pass-through of major raw material price movements.  – Wood and pulp suppliers are assessed as part of our Due Diligence  Management System which addresses the main legal and  sustainability risks.  – In South Africa, we have tree improvement programmes to  produce stronger trees; fire prevention and firefighting capacity  are integrated into a fire management system with local  Fire Protection Associations and neighbouring operations. |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 76 |
|  |  |  |

#### Principal risks

#### continued

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  | Operational risks continued | |  |  |  |  |  |
|  |  | Energy security and related input costs | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Group Head of  Operations  Risk trend    Link to  strategy |  |
|  | – Availability of sufficient and reliable energy supply is a key focus  area; as the transition to cleaner energy sources accelerates,  accompanied by increased regulation, the energy supply portfolio  is undergoing long-term changes, such as an increase in demand  for renewable energy and an increase in carbon taxes, which  increases the risk of more volatile pricing as well as potential  for severe energy interruptions.  – Security of supply of gas is subject to political pressures and  could be intermittent, while renewable energy sources, such  as wind and solar, are subject to unpredictable physical weather  patterns. Competition for sources of renewable energy, such  as biomass, causes cost and availability pressures.  – Rapid increases in fuel and energy costs represent higher direct  costs to the Group as well as for our suppliers, which in turn may  seek to increase prices which may be difficult to pass on to  customers and could cause a contraction of gross margins.  – Income from the sale of renewable energy, either from sales  of certificates, subsidies or sales of renewable energy to the grid,  represents a source of income for various pulp and paper mills  and is subject to both volatility in price and regulatory changes.  – Availability of sufficient and reliable electricity supply in South Africa  remains a concern and above inflationary increases are virtually  certain. | |  | – Investment in improvements to our energy profile and increased  electricity self-sufficiency, including the use of renewable energy  sources, strengthens the energy efficiency of our operations while  reducing ongoing operating costs and carbon emission levels.  – Where we generate electricity surplus to our own requirements,  we may sell such surplus externally; we also generate income  from the sale of green energy credits in certain of our operations  at prices determined in the open market.  – Optimised use of biomass-based fuels enables reduced use of  fossil-based energy sources, such as carbon-intensive coal.  – Energy costs are closely monitored and benchmarked against  external sources and we monitor our electricity usage, carbon  emission levels and use of renewable energy; most of our larger  operations have high levels of electricity self-sufficiency.  – Monitoring of renewable energy market fundamentals and changes  in legislation supported by contact with local energy regulators.  – Detailed compliance assessments regarding Industry Emissions  and Energy Efficiency Directives to determine future investment  requirements. |  |  |
|  |  |  |  |  |  |  |  |
|  |  | Technical integrity of our operating assets | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Group Head of  Operations  Risk trend    Link to  strategy |  |
|  | – Our four major mills, Świecie ( Poland),  Štětí  (Czech Republic),  Ružomberok ( Slovakia) and Richards Bay  (South Africa ), account  for approximately 70% of our total pulp and paper production  capacity. If operations at any of these key facilities are interrupted  for any significant length of time, it could have a material effect  on our financial position or performance. Our converting operations  are spread over a considerably larger number of plants, providing  risk diversification.  – Incidents such as fires, explosions or large machinery breakdowns,  or the inability of our assets to perform the required function  effectively and efficiently while protecting our people, the business,  the environment and stakeholders, could result in property damage,  loss of production, reputational damage, and/or safety and  environmental incidents.  – Regular maintenance and project-related shuts can experience  delays in start-up and ramp-up due to reliance on external suppliers  and contractors for engineering services and equipment supplies. | |  | – A capital investment programme supports the replacement of older  equipment to improve both reliability and integrity, and our proactive  repair and maintenance approach is designed to improve production  reliability and minimise breakdown risks.  – Detailed risk assessments of high-priority equipment are conducted  with specific processes and procedures in place for the ongoing  management and maintenance of such equipment.  – Production optimisation throughout the organisation by learning from  our best performing operations and identifying emerging issues early.  – Digital initiatives utilising advanced analytics, machine sensors and  process automation enable improved operational efficiency and  asset utilisation.  – All incidents are actively monitored with a formal reporting process  which allows us to share lessons learned across our operations,  identify emerging issues, conduct benchmarking, and evaluate  the effectiveness of our risk reduction activities.  – External experts perform technical integrity assessments at our  major sites and enhance our engineering and loss prevention  competencies and capabilities.  – A Fire Protection programme supported by external experts and  independent loss prevention audits with property insurance cover  for key risks. |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 77 |
|  |  |  |

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  | Operational risks continued | |  |  |  |  |  |
|  |  | Environmental impact | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Group Head of  Sustainable  Development  Risk trend    Link to  strategy |  |
|  | – Our operations require water and energy and generate emissions  to air, water and land. We are subject to a wide range of  environmental laws and regulations, as well as the requirements  of our customers and expectations of our broader stakeholders.  Costs to meet compliance requirements, such as Best Available  Techniques (BAT), potential restoration and soil and groundwater  clean-up activities, and increasing costs from the effects of  emissions could have an adverse impact on our profitability.  – The availability of water in water scarce and stressed areas could  pose a risk to continuing to operate our production facilities  to their full potential.  – As we purchase significant amounts of wood and fibre on the  market and manage plantation forestry landholdings in  South Africa,  a decline in ecosystem functions and loss of biodiversity could  impact the natural resources that we rely on. | |  | – Compliance with all applicable environmental requirements where  we operate and with our own policies and procedures, at or above  local policy requirements, supported by externally accredited  environmental management systems.  – A clean production philosophy to address the impact from emissions,  discharge and waste.  – Conducting water stewardship assessments to address risks related  to water scarcity, and promotion of equitable use of water resources  among local stakeholders wherever we operate.  – Specialist internal networks share best practices and  comprehensively report and investigate major environmental  incidents to avoid reoccurrence.  – Monitoring and reporting of our environmental performance  indicators against our targets, with our Scope 1 and 2 GHG  emissions independently assured to a reasonable assurance level  and Scope 3 receiving limited assurance.  – Biodiversity assessments at our manufacturing and forestry  operations to evaluate our impact on biodiversity and ecosystems,  and action plans to manage impacts. |  |  |
|  |  |  |  |  |  |  |  |
|  |  | Employee and contractor health and safety | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Group Head of  Safety & Health  Risk trend    Link to  strategy |  |
|  | – Accidents, incidents and exposure to occupational health hazards,  such as noise and stress, may cause injury or harm to employees  and contractors, property damage, lost production time, and/or  harm to our reputation.  – Risks include fatalities, serious injuries, occupational diseases,  substance abuse and instances of violent crime in some  jurisdictions.  – General health and mental health risks were heightened by  the pandemic. | |  | – Continuous improvement of safety standards through monitoring  incidents, major close calls and recordable case rates to transfer  learnings across our operations with the goal of sending everybody  home safely every day.  – Embedded safety management systems including, among others,  risk assessments, safety procedures and controls.  – Continuous focus on improving our 24-hour safety mindset  and developing the desired safety culture as well as focusing  on the Social Psychology of Risk.  – An Employee Assistance Programme and wellness initiatives are  offered across the countries in which the Group operates in order  to help employees with general health and mental health concerns.  – Continuously engineer out the most significant risks in our  operations, supported by robust controls and procedures  for operating those assets and conducting related tasks.  – Our Permit to Work methodology across the Group supports us  to achieve our safety targets.  – Extensive training to ensure that performance standards and  practice notes are communicated and understood and our incentives  are impacted by the non-achievement of safety milestones  (lag indicators) as well as achievement of lead indicators.  – We apply externally accredited safety management systems, with  continuous benchmarking against global safety standards, and  conduct regular audits of our operations to ensure our facilities  remain fit-for-purpose. |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 78 |
|  |  |  |

#### Principal risks

#### continued

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  | Operational risks continued | |  |  |  |  |  |
|  |  | Attraction and retention of key skills and talent | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Group HR Director  Risk trend    Link to  strategy |  |
|  | – Access to the right skills, particularly management and technical  skills, is critical to support the performance and growth of  our business.  – Operations in remote locations or highly competitive markets  make attracting and retaining skilled employees challenging.  – Losing skills or failing to attract new talent to our business  has the potential to undermine our ability to drive performance  and deliver on our strategic objectives.  – The economies of  Western Europe and the United States are  seeing an ageing workforce which could present challenges in  the future. Socio-political issues in South Africa result in skilled  workers looking to emigrate. | |  | – Our culture and values play a key role in empowering and inspiring  our people throughout our operations.  – We have a zero tolerance policy towards discrimination and we  provide equal opportunities for all employees.  – The setting of ambitious sustainability commitments which supports  our reputation and which assists in attracting and retaining our people.  – Investment in employer branding, fair and transparent recruitment  practices and having diversity and inclusion, labour and human rights  policies in place.  – Competitive compensation levels are maintained through  benchmarking and we continue to support and invest in  Group-wide  as well as local training programmes.  – Implemented measures to monitor and manage succession planning,  staff turnover, internal placements and training.  – Performed 360° feedback at a management level and regularly  conduct performance and development reviews at a local level.  – A Group-wide Employee Survey approximately every two years and  regular pulse surveys provide employee engagement and feedback.  – Through a confidential reporting platform, SpeakOut, employees  and external stakeholders can raise concerns about conduct that  may be contrary to our values. |  |  |
|  |  |  |  |  |  |  |  |
|  |  | Cyber security risk | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Chief Information  Officer  Risk trend    Link to  strategy |  |
|  | – The Group  could experience targeted and untargeted cyber‑attacks  as cybercrime continues to increase and attempts are increasingly  sophisticated.  – More employees are working remotely, placing pressure and further  reliance on our IT systems, increasing data processing requirements  and providing new channels for cyber-attacks.  – The consequences of successful attacks include compromised  data, financial fraud and system shutdowns. | |  | – A comprehensive IT Security Policy approved by the Board .  – Extensive training and awareness programmes are provided for all  our users.  – IT infrastructure is regularly tested and our systems are based on  well-proven products.  – Regular threat assessments utilising external providers.  – The Group’s core IT services are ISO 27001 certified.  – Established incident response and business contingency plans  are in place. |  |  |
|  |  |  |  |  |  |  |  |
|  | Compliance risk | |  |  |  |  |  |
|  |  | Reputational risk | | |  |  |  |
|  | Description | |  | Key mitigation |  | Risk owner  Executive  Committee  (oversight CEO)  Risk trend    Link to  strategy |  |
|  | – Non-compliance with the legal and governance requirements  and globally established responsible business conduct in any of the  jurisdictions in which we operate and within our supply chain could  expose us to significant risk if not actively managed.  – Failure to successfully manage relationships with our stakeholders  could disrupt our operations and adversely impact the  Group’s  reputation.  – Fines imposed by authorities for non-compliance are severe and,  in some cases, legislation can result in criminal sanction for entities  and individuals found guilty.  – Areas of weaker governance present the challenge of addressing  potential human rights issues in our operations and supply chain;  human rights legislation further highlights the need to identify  and address potential risks of child labour, forced or bonded labour,  modern slavery, human trafficking and other human rights risks  in our supply chain. | |  | – A comprehensive training and compliance programme, supported  by self-certification and reporting, with personal sanction for failure  to comply with  Group  policies.  – Engagement with local stakeholders through formal and informal processes.  – Perform screening of our suppliers for sustainability risk in accordance  with our Code of Conduct for Suppliers to better align with our risk criteria.  – Continuous assessment of our governance of human rights issues  and any potential risks in our operations and supply chain.  – Compliance committees are established at a  Group  level to monitor  the risk relating to trade controls, data protection, competition  compliance and business integrity – chaired by the Group CFO with  representatives from across the business. Our legal and governance  compliance is supported by a centralised legal compliance team  and is subject to regular internal audit review.  – We have a confidential reporting platform (SpeakOut), enabling  employees, customers, suppliers, communities and other stakeholders  to raise concerns about conduct that may be contrary to our values. |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 79 |
|  |  |  |

#### As part of the approval of this

Integrated report, the

#### Board

#### has

assessed the

#### Group’s

#### prospects

#### and viability.

#### Factors in assessing long-term

#### prospects

The Group’s business model and strategy

are described in detail on pages [14](#i47a6727b8bad4fe28addb4dae187e293_2583)-[19](#i47a6727b8bad4fe28addb4dae187e293_7997)

and  [20](#i47a6727b8bad4fe28addb4dae187e293_2624)-[21](#i47a6727b8bad4fe28addb4dae187e293_2644) respectively. Our strategy is to

deliver value accretive growth sustainably.

We do this by building on the competitive

advantages we enjoy today, setting a clear

roadmap for investment and operational

decisions into the future. Our performance

against our strategic objectives is

discussed in more detail on pages  [22](#i47a6727b8bad4fe28addb4dae187e293_2685)-[29](#i47a6727b8bad4fe28addb4dae187e293_8784).

Mondi’s geographical footprint, with around

100 production sites across more than

30 countries, and broad product range help

mitigate potential risks of customer or

supplier liquidity issues. With our scale,

quality asset base, integrated operations

and excellent customer proposition, we

create value for our stakeholders in line

with the Mondi Way.

The Group’s financial position, cash flows,

liquidity position and borrowing facilities

are described in the financial statements.

At 31 December 2023, the Group had

€754 million of undrawn, committed debt

facilities. The weighted average maturity of

the Group’s committed debt facilities was

2.8 years. The principal loan arrangements

are disclosed in note 20 of the financial

statements. In addition, the Group had

€1,592 million of cash and cash equivalents

available, which include proceeds from

the disposal of discontinued operations

of €806 million.

#### Assessment of viability

The Board believes that the three years to

December 2026 is an appropriate period

over which a reasonable expectation of

the Group’s longer-term viability can be

evaluated. In coming to this view, the Board

has considered the inherent volatility in selling

prices, input costs and exchange rates, the

time taken for new investments in pulp and

paper production capacity to be introduced

into the market, typical new product

development cycles, and the Group’s capital

structure. Given our principal risks, the Board

believes that the ability to assess the Group’s

longer-term viability beyond this period

becomes increasingly reduced. For these

reasons, three years also represents the period

of the Group’s formal planning horizon.

The assessment of viability has been based

on the Group’s continuing operations.

Any impact from discontinued operations

or proceeds from disposal are fully

excluded from the assessment. The net

proceeds from the sale of the Group's

Russian assets have been returned to the

shareholders by way of a special dividend

on 13 February 2024 and are hence

excluded from the viability assessment.

The Board has considered the Group’s

current financial position, strategy and

plans for the next three years.

The Group’s principal risks identified on

pages [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057) have been assessed for their

potential impact on the Group’s viability

over the next three years as part of the

risk assessment. Our structurally growing

packaging markets are described in

more detail on pages [12](#i47a6727b8bad4fe28addb4dae187e293_2604)-[13](#i47a6727b8bad4fe28addb4dae187e293_7007).

The Group’s three-year 2024-2026 plan

(“budget period”) has been tested for

severe but plausible downside scenarios.

These are summarised in the table at

the bottom of this page.

While linked to the Group’s principal risks,

the scenarios detailed in the table below

are hypothetical and designed to test the

ability of the Group to withstand such severe

outcomes. In an event that a scenario partly

or fully takes place, the Group has various

options available to maintain liquidity

and continue operations. The scenarios

modelled are linked to those principal risks

which are most likely to occur and have

the most significant impact.

The sales volume compression scenario

(Scenario 1) was calculated with assumed

reductions of up to 11% depending on

the relevant product compared with the

assumptions in each year of the budget period.

The margin compression scenario (Scenario 2)

was calculated with assumed reductions

of up to 3% depending on the relevant

product compared with the assumptions

in each year of the budget period.

Both margin and volume sensitivities have

been modelled considering current and

potential future market developments.

Wood, gas and electricity prices in our major

European operations have been tested in

Scenario 3, based on internal management

assumptions. The impact of the other

input costs, which are usually passed on

through higher sales prices in the converting

operations, have been excluded from the

downside sensitivities, similar to prior years.

Furthermore, in Scenario 4 the currency risk

was tested as the wide geographic spread

exposes the Group to the potential impact

of exchange rate fluctuations. We have

evaluated the impact of a weaker US dollar

and Turkish lira exchange rates, and stronger

other emerging market currencies including

the South African rand, relative to the euro.

These currencies were chosen as the Group

has a significant exposure in them. A 10%

weakening and a 10% strengthening of the

respective currencies against the euro

was applied, based on historical exchange

rate developments.

#### Scenario

#### testing

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Scenario modelled | | Link to principal risks | |
| Scenario 1 | Volume compression  Sales volume reduction across pulp and paper mills  and converting operations |  | Industry productive capacity |
|  |  | Product substitution |
|  |  | Technical integrity of our operating assets |
| Scenario 2 | Margin compression  Sales prices reduction in pulp and paper mills and gross  margin reduction in converting operations |  | Fluctuations and variability in selling prices  or gross margins |
|  |  |
|  |  |
| Scenario 3 | Input costs inflation  Increase in materials, energy, consumables used  and variable selling expenses |  | Costs and availability of raw materials |
|  |  | Energy security and related input costs |
|  |  |  |
| Scenario 4 | Currency risk  Volatility in foreign exchange rates |  | Currency risk |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 80 |
|  |  |  |

#### Viability statement

While the assumptions we have applied in

all four scenarios are possible, they do not

represent our view of the likely outcome.

Testing was performed for Scenarios 1

and 2 individually and in combination for

a duration of three years, as these two

scenarios are the ones we consider are

most likely to happen in combination.

The likelihood of other scenarios happening

in combination is considered remote.

We have assessed the impact of these

assumptions on the Group’s key financial

metrics over the assessment period, including

profitability, net debt, and net debt to

underlying EBITDA.

Based on the results of these scenarios

individually and in combination for Scenarios 1

and 2, the Board is satisfied that the

Group would be able to respond to such

circumstances through various means which

could include a reduction and deferral of

capital expenditure and further rationalisation

and/or restructuring of operations, to

ensure that the Group continues to meet

its ongoing obligations.

The Group meets its funding requirements

from a variety of sources, as more fully

described in the financial statements in note

20. The Board is satisfied that the Group will

have sufficient liquidity to meet its needs over

the Group’s formal planning horizon. Testing

compliance with financial covenants continues

not to be needed as none of the Group’s loan

agreements has a financial covenant.

While the Group’s going concern assessment

(as set out below) takes what the directors

consider to be a very cautious approach in

not assuming any renewal of the Group’s

Eurobond maturing in April 2024, in part in the

context of the short timeframe for that going

concern assessment, the Board notes that

the Group has a track record of successfully

accessing both the bank and debt capital

markets for funding, and the Group’s

management is expecting to be able

to refinance the facilities maturing during

the viability assessment period. The Board

believes that the strong and stable financial

position of the Group, supported by a

continued strong investment grade credit

rating from both Moody’s Investors Service

(Baa1, outlook stable) and Standard & Poor’s

(A-, outlook stable), ensures the Group has

access to funding through the business cycle.

For this reason, for the purposes of assessing

viability over a longer period, the assessment

was carried out against the Group’s

committed debt facilities on the assumption

that the Group’s €500 million Eurobond

maturing in April 2024 and €600 million

Eurobond maturing in April 2026 will

be refinanced.

Taking into account the Group’s strategy,

principal risks and the results of the downside

scenario assessments, and on the assumption

that over the extended viability assessment

the Group will continue to be able to

successfully refinance its debt as it has done

it historically, the directors have a reasonable

expectation that the Group will be able to

continue in operation and meet its liabilities

as they fall due over the three year period

of the viability assessment.

#### Going concern

The directors have reviewed the Group’s

budget and considered the assumptions

contained in the budget, including

consideration of the principal risks which may

impact the Group’s performance in the 18

months following the balance sheet date and

considerations of the period immediately

thereafter.

The assessment of going concern has been

based on the Group’s continuing operations.

Any impact from discontinued operations or

proceeds from disposal are fully excluded

from the assessment. The net proceeds from

the sale of the Group's Russian assets have

been returned to shareholders by way of a

special dividend on 13 February 2024 and are

hence excluded from the going concern

assessment.

The Group has a strong balance sheet. At

31 December 2023, the Group had a liquidity

position of €2,346 million, comprising €754

million of undrawn committed debt facilities

and cash and cash equivalents of €1,592

million available, which included proceeds

from the disposal of discontinued operations

of €806 million. As the Group’s debt facilities

and loan agreements contain no financial

covenants, in performing its going concern

assessment the directors have focused on

liquidity, which was adjusted to exclude the

net proceeds from the disposal of

discontinued operations, given that these

were distributed to shareholders by way of

a special dividend in February 2024.

The current and possible future impact from

the macroeconomic environment on the

Group’s activities and performance has been

considered by the Board in preparing its going

concern assessment. The base case forecasts

for the Group, being those arising over the 18

month going concern assessment period as

reflected in the Group’s 2024-2026 plan, were

sensitised to reflect a severe but plausible

downside scenario on Group performance.

The scenario testing assumed severe but

plausible volume and margin reductions

happening in combination (consistent with the

sensitivities described in Scenarios 1 and 2 in

the viability statement) and was carried out

against Mondi’s current committed debt

facilities, and on the assumption that the

Group’s €500 million Eurobond maturing in

April 2024 will not be refinanced. However,

the Group has a track record of successfully

accessing both the bank and debt capital

markets for funding and is expecting to be

able to refinance the facilities if needed (which

is consistent with the assumption applied in

the longer-term viability assessment).

In the severe but plausible downside scenario,

including no assumed refinancing of the

Group’s debt, the Group has sufficient liquidity

headroom through the whole period covered

by the going concern assessment.

In addition to its modelled downside going

concern scenario, the Board has reverse

stress tested the model to determine the

extent of downturn which would result in no

liquidity headroom. A decline of 48% to the

planned underlying EBITDA in the period until

30 June 2025, well in excess of that

contemplated in the severe but plausible

downside scenario, would need to persist

throughout the observed period to result in no

liquidity headroom, which is considered very

unlikely. This reverse stress test also does not

incorporate mitigating actions such as

reductions and deferrals of capital and

operational expenditure or cash preservation

responses, which the Group would implement

in the event of a severe and extended

revenue decline.

Following its assessment, the directors have

formed a judgement, at the time of approving

the Integrated report and consolidated

financial statements, that there are no material

uncertainties that cast doubt on the Group’s

going concern status and that it is a

reasonable expectation that the Group has

adequate resources to continue in operational

existence for the foreseeable future. For this

reason, the Group continues to adopt the

going concern basis in preparing the

Integrated report and financial statements

2023.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 81 |
|  |  |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |  |  |  | WEB23_Philip Yea 2_retouched_crop.png |
|  | Governance |  |  |  |
|  | Chair’s introduction | [82](#i47a6727b8bad4fe28addb4dae187e293_2859) |  |  |
|  | Board of directors | [85](#i47a6727b8bad4fe28addb4dae187e293_2881) |  |  |
|  | Executive Committee and  Company Secretary | [88](#i47a6727b8bad4fe28addb4dae187e293_2902) |  |  |
|  | Corporate governance report | [90](#i47a6727b8bad4fe28addb4dae187e293_2923) |  |  |
|  | Nominations Committee | [105](#i47a6727b8bad4fe28addb4dae187e293_2944) |  |  |
|  | Audit Committee | [110](#i47a6727b8bad4fe28addb4dae187e293_2965) |  |  |
|  | Sustainable Development  Committee | [119](#i47a6727b8bad4fe28addb4dae187e293_2986) |  |  |
|  | Remuneration report | [122](#i47a6727b8bad4fe28addb4dae187e293_3019) |  |  |
|  | Other statutory information | [150](#i47a6727b8bad4fe28addb4dae187e293_3041) |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |  |

#### Dear fellow shareholder

This report provides you with a more

detailed look at our approach to

governance, how it facilitates the

achievement of our purpose and strategy,

and the  Board’s key focus areas during

the year.

While 2023 was a year of ongoing

economic and geopolitical uncertainty,

Mondi’s well-established and robust

governance framework continued to

support the Board in its decision-making,

allowing it to lead the Group with integrity

and to keep our purpose and values at the

forefront, addressing the challenges this

uncertainty presented.

Effective governance and a culture of

transparency, openness and respect among

Board members and senior managers

continued to provide the foundation for

discussions and decision-making in the

boardroom. They remain key to ensuring

the long-term sustainable success of our

business, ensuring that the Board operates

effectively and that the voices of our

stakeholders are heard during the Board’s

deliberations.

#### Board

#### composition

Ensuring that the composition of the

Board continues to give us the breadth

and diversity of knowledge, skills and

experience we need to achieve our

purpose and deliver our strategy is crucial

and remains under the constant scrutiny

of the Nominations Committee.

As outlined in last year's report, I am

pleased to confirm that Anke Groth joined

the Board as an independent non-

executive director in April 2023. Anke's

appointment followed a search focused on

strengthening the level of relevant financial

experience on the Audit Committee,

and it is already clear that Anke has been

a strong addition to the Board, bringing

new perspectives and insight.

The Nominations Committee continues

to focus on succession planning, not

only at Board level, but also at senior

management level, assessing the critical

skills required by the Group and how

we prepare for succession to key roles.

More information on the Nominations

Committee's work in this respect can

be found on page [106](#i4e19d81f21fc44298a94587c44bbce82_375481).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 82 |
|  |  |  |

#### Chair’s introduction

## How has our governance framework

## supported our progress in

2023?

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Quotemark_PURPLE.svg  Effective governance and a culture  of transparency, openness and respect  remain key to ensuring the long-term,  sustainable success of our business.  Philip Yea  Chair | | |  |  |  |  |
|  |  | How we comply with the  UK Corporate Governance Code  Mondi aims to comply with the  principles and provisions of the  July 2018 edition of the UK Corporate  Governance Code issued by the  Financial Reporting Council  (available at  <www.frc.org.uk> ).  It is the view of the  Board  that  Mondi  has applied the principles,  and complied with the provisions,  of the UK Corporate Governance  Code throughout the year.  The Governance report is structured  according to the sections of the  UK Corporate Governance Code 2018  in order to clearly demonstrate how  we have applied the principles.  The Board notes the publication  of revisions to the UK Corporate  Governance Code in January 2024.  Consideration is being given to the  revisions and any changes to our  practices required as a result. |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |
|  |  |  |  |  |  |
| Our people  The safety and health of our workforce  continues to be a priority for the Board  and is always high on the agenda at  every meeting. While Mondi’s  strong  safety culture is deeply embedded  across the organisation, we were deeply  saddened by the fatality of a contractor  at our Ružomberok mill (Slovakia) during  the second half of the year, and the four  life-altering injuries we experienced  in our operations.  Our thoughts go out to those involved,  and to their families, friends and work  colleagues. Every effort is made to  understand the circumstances, identify  root causes and implement actions to  minimise the risk of a reoccurrence of  such tragic incidents. We also look to  ensure that all the necessary support is  provided following any serious safety  incident, whether that be support to the  families and work colleagues of those  affected, or to enable those injured  to return to work.  Acknowledging the role that mindset  and culture play in many of the safety  incidents that occur, our approach  to safety is increasingly focused on  the Social Psychology of Risk, and  the measures we can take to drive  continuous improvement in our safety  performance. This is a key focus for the  Sustainable Development Committee,  and it is pleasing to hear that safety is  regularly raised by employees as a topic  for discussion during the employee  engagement meetings undertaken  by Sue Clark, our nominated Board  member for employee engagement,  underlining the prominence given to  safe behaviour across the business.  More information regarding the actions  we are taking to improve safety can  be found on page [50](#i989e19b834f344c0aff2915d48a2e7d3_146686). |  | More broadly, the Board continued  in its efforts to further its understanding  of the views of Mondi's employees,  taking the opportunity to engage with  a cross-section of employees during  site visits, and using the results of our  latest Group-wide Employee Survey  to give us insight into current sentiment  across the organisation.  Sue continued to undertake  engagement in a variety of formats,  using these opportunities to discuss  a wide range of issues, including safety,  culture, innovation, talent development  and retention. The insights we get from  such face-to-face engagement with  employees are valuable and we will  continue to focus on offering transparent  and open forums in which employees  can express their views. More  information relating to engagement  undertaken during the year can be  found on pages [92](#i7e8411646eff4bc0adb55b69313ae28d_611296)-[93](#i7e8411646eff4bc0adb55b69313ae28d_591753).  Details of our engagement with our  key stakeholders more broadly, and  how we consider their interests during  decision-making, recognising the  responsibility we have as a Board in this  respect, can be found on pages [38](#i47a6727b8bad4fe28addb4dae187e293_2707)-[41](#i2eb1d609446c4463b20fb8dfc6eb8ad7_73161)  in our Section 172 statement. |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 83 |
|  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
|  | SpeakOut  The Group  has an anonymous  whistleblowing and grievance  platform called ‘SpeakOut’,  operated by an independent  third party.  SpeakOut, monitored by the  Internal Audit function and  overseen by the Board and Audit  Committee, is a simple, accessible  and confidential platform through  which our employees, customers,  suppliers and other stakeholders can  raise concerns about any unethical  practices and conduct contrary  to Mondi’s values. The service  is fundamental to ensuring the  confidence of our employees  and other stakeholders in our  culture and values.  Any type of concern can be raised  via SpeakOut. The Board and  Audit Committee receive regular  reports of SpeakOut messages  received and ensure that  appropriate investigation into  each message has been undertaken  and responses given, with actions  taken where any allegation proves  to have some foundation.  The reports allow the Board  to identify any particular trends  and common issues, with messages  classified into categories including  HR-related concerns, business  integrity issues and environmental  and safety topics, and to consider  whether any changes to Mondi’s  risk management processes are  required as a result.  The effectiveness of the SpeakOut  platform is kept under regular  review. More information about  SpeakOut and Mondi’s approach  to anti-bribery and corruption in  particular can be found on page [68](#id5b39e30fcb7438c9cb55e47e15b3dae_182788). |  |
|  |  |  |

#### Strategy and long-term

#### sustainability

The long-term sustainability of Mondi's

strategy and the ability to achieve our

purpose continued to provide the central

tenets of the Board's discussions during the

year. The strategy is regularly challenged,

particularly during times of uncertainty,

to ensure it remains appropriate for our

stakeholders and is achievable in the long

term. We are conscious that our strategy

needs to evolve as external conditions

change and our understanding of the

impacts of our business is refined.

The Board's annual in-depth review

of Mondi's strategy was undertaken in this

context, with discussions focusing on

key drivers, including changing demand

for sustainable packaging and eCommerce

solutions. There was also particular focus

on our growth capital investment

programme, with the Board closely

monitoring the progress of a number

of our large capital expenditure projects

during the year, more details of which

can be found on page [26](#i8bec3ed01d1c44dd980f5630c6205064_95).

Sustainability remains at the centre of

Mondi's strategy and so these discussions

were undertaken with this in mind. During

the year, the Sustainable Development

Committee, on behalf of the  Board, spent

time considering a wide range of issues,

including safety, diversity and inclusion,

climate-related risks and opportunities,

our progress towards science-based

greenhouse gas emissions reduction

targets, product stewardship and our

Responsible Procurement process.

The work being undertaken across the

organisation aimed at understanding and

managing these issues is extensive, and a

thorough understanding of this at Board

level is central to good decision‑making.

The deliberations of the Sustainable

Development Committee, the meetings

of which are normally attended by every

Board member, provide the Board with

valuable insight, and ensure the Board

is in the best position possible to take

decisions that may affect our broad

range of stakeholders.

Further information on the strategy review

can be found on page [99](#ib23b84522ac84ca194b5a44e68b2897f_1-3-3-1-486963), and details of

the work of the Sustainable Development

Committee can be found on pages [119](#i47a6727b8bad4fe28addb4dae187e293_2986)- [121](#i6f6f8967ed114bb99dfbf771b4af9713_3-5-1-1-328026).

#### Looking forward

As we go into 2024, it is clear that the

external challenges facing businesses will

continue, and that scrutiny of the impact

we have on our environment and society

will only increase. The duty we have as a

Board to ensure that we take action to

manage these impacts therefore remains

as important as ever. I am confident that

Mondi has the right governance framework

and culture in place to meet this duty,

while, at the same time, supporting the

achievement of our strategy and purpose,

to enable our stakeholders to achieve their

ambitions, and to secure the long-term

sustainable success of the business.

I would like to thank everyone across

the organisation for their work during

2023, and I look forward to discussions

and engagement with our stakeholders

during 2024.

#### Philip Yea

Chair

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 84 |
|  |  |  |

#### Chair’s introduction

#### continued

|  |
| --- |
|  |
| Composition of the Board |
|  |
| Diversity of the Board |
|  |
| Independent non-executive  director tenure |
|  |
| Nationalities represented on the Board |
|  |

The directors holding office at the date of this report, together with their biographical details

and an explanation of the skills and experience they bring to the Board, are set out below.

|  |  |
| --- | --- |
|  |  |
|  | See biographies  Page  [86](#id6f470efcf9445d6be6ab0a9907fd201_1-1-1-1-311571) |

![BoD_Experienced_Leadership.jpg]()

![BoD_Experienced_Leadership3.jpg]()

![BoD_Experienced_Leadership5.jpg]()

![BoD_Experienced_Leadership7.jpg]()

![BoD_Experienced_Leadership9.jpg]()

![BoD_Experienced_Leadership2.jpg]()

![D REINICHE 0080_background_1_edit_crop.jpg]()

![BoD_Experienced_Leadership6.jpg]()

![BoD_WEB23_Saki_Maczoma 1_edit_crop.jpg]()

![BoD_WEB23_Stephen Young 1_retouched_crop.png]()

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 85 |
|  |  |  |

#### Board of directors

![21440476741873]()

![21440476741884]()

![22539988369690]()

|  |
| --- |
|  |
| 10% |
| 20% |
| 70% |

![2199023256457]()

|  |
| --- |
|  |
| 60% |
| 40% |

|  |
| --- |
|  |
| 2 |
| 5 |
| 1 |
| 1 |
| 1 |

|  |
| --- |
|  |
| 5 |
| 1 |
| 1 |

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Philip Yea  Chair  Appointed to the Board  April 2020 and as Chair in May 2020  Independent  Yes (on appointment)  Committee memberships  Nominations (Chair), Remuneration  Qualifications  Graduated with an MA in Modern  Languages from Oxford University,  Fellow of the Chartered Institute  of Management Accountants (UK) |  | Skills and experience  Philip has extensive listed company  experience, both as an executive  and non-executive director, across  a range of sectors. His broad industry  background and knowledge of operating  within large, international corporates,  as well as his significant leadership  experience, bring valuable insight to the  Board and are relevant to the future  growth and development of Mondi. |  | Philip’s experience and knowledge  of UK listed companies underpins  the Board’s commitment to delivering  best practice corporate governance.  Philip started his career as a graduate  trainee at Perkins Engines before  holding a range of finance roles at  companies including Mars Ltd and  Guinness plc, becoming Group Finance  Director of Diageo plc on its creation  in 1997. He was a managing director  at Investcorp from 1999 to 2004, leaving  to become CEO of 3i Group plc, a role  he held until 2009. |  | He has held a number of non-executive  roles, including Chair at Equiniti Group  plc, Greene King plc and bwin.party  digital entertainment plc; Senior  Independent Director at Vodafone  Group plc, Manchester United plc and  Computacenter plc; and non-executive  director at Marshall of Cambridge  (Holdings) Ltd, Aberdeen Standard Asia  Focus plc, Rocket Internet SE and  HBOS plc.  Current external appointments  None. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Andrew King  Group  CEO  Appointed to the Board  October 2008 and as Group CEO  in April 2020  Independent  No  Committee memberships  Executive (Chair), Sustainable  Development  Qualifications  Graduated in Commerce from the  University of Cape Town, Chartered  Accountant (South Africa) |  | Skills and experience  Andrew has more than 20 years’  experience with Mondi in various  strategy, business development and  leadership roles, giving him a detailed  understanding of Mondi’s strategy,  capital allocation priorities, financial  structure and the environment in which  the Group operates. He has played a  key role in defining the Group’s strategic  direction and re-shaping the capital  structure since listing. Andrew’s long  and varied experience with Mondi brings  extensive knowledge of the markets and  conditions in which the Group operates,  providing a key contribution in |  | developing and executing Mondi’s  strategy to enhance competitiveness  and deliver sustainably into the future.  Andrew completed articles with  Deloitte & Touche in Johannesburg  in 1994. In 1995 he joined Minorco, part  of Anglo American, as a financial analyst,  before assuming responsibility for the  group’s investment management  activities, and transferring to its  corporate finance department in 1998.  He worked on a number of group M&A  activities before being appointed a vice  president of Anglo American Corporate  Finance in 1999. |  | He was appointed Mondi’s  Vice  President of Business Development  in 2002 and Corporate Development  Director in 2004. He served as CFO  of Mondi from June 2005 to May 2006.  He was then appointed as Group  Strategy and Business Development  Director before becoming the CFO  of the Mondi Group in 2008.  Andrew was appointed CEO  of the  Mondi Group on 1 April 2020.  Current external appointments  None. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Mike Powell  Group  CFO  Appointed to the Board  November 2020  Independent  No  Committee membership  Executive  Qualifications  Graduated in Computer Science &  Accounting from the University of  Manchester, member of the Chartered  Institute of Management Accountants (UK) |  | Skills and experience  Mike has significant financial and  strategic experience and extensive  experience leading finance teams, having  been chief financial officer and an  executive director of a number of large  international listed companies.  He brings a clear operational focus, strong  leadership experience and knowledge of  operating in large industrial groups across  a variety of geographies. The strategic  financial insight Mike brings drives  Mondi’s strong financial performance  and culture of continuous improvement. |  | Mike started his career at Pilkington plc,  spending 15 years in a variety of finance  and operational roles. He went on  to become Chief Financial Officer  at Nippon Sheet Glass and then  AZ Electronic Materials plc.  He was subsequently appointed Group  Finance Director at BBA Aviation plc,  before being appointed Group Chief  Financial Officer at Ferguson plc, a  multinational distributor of plumbing and  heating products. Mike also served as a  non-executive director of Low & Bonar  from December 2016 to May 2020. |  | Mike joined Mondi as Group  CFO  in November 2020.  Current external appointments  None. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Dominique Reiniche  Senior Independent Director  Appointed to the Board  October 2015  Independent  Yes  Committee memberships  Nominations, Remuneration,  Sustainable Development (Chair)  Qualifications  MBA from ESSEC Business School  in Paris |  | Skills and experience  Dominique’s extensive experience in  senior business leadership positions  in Europe, as well as in international  strategic consumer marketing and  innovation, provides valuable insight  to the Board. Her global leadership  exposure brings rounded insight to  Mondi’s sustainability goals and drives  progress to meet the Group’s  ambitious targets.  Her career began with Procter &  Gamble before moving to Kraft Jacobs  Suchard as Director of Marketing and |  | Strategy and a member of its executive  committee. After helping Jacobs  Suchard through its acquisition by  Kraft-Mondelez, Dominique joined  The Coca-Cola System in 1992 as  Marketing and Sales Director and  then held various roles of increasing  responsibility up to General Manager  France. From 2002 to early 2005,  she was CEO Europe for Coca-Cola  Enterprises and subsequently CEO  Europe for the Coca-Cola Company,  then Chair from 2013 until stepping  down in 2014. |  | Dominique was a non-executive  director of Peugeot-Citroen SA  between 2012 and 2015, AXA SA  between 2005 and 2017 and Severn  Trent Plc between 2016 and 2021. She  was also Chair of Eurostar International  Limited from July 2019 until April 2022.  Current external appointments  Non-executive director and Chair of  Chr. Hansen Holding A/S and a non-  executive director of Deliveroo plc and  PayPal (Europe). |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Svein Richard Brandtzaeg  Non-executive director  Appointed to the Board  April 2021  Independent  Yes  Committee memberships  Audit, Nominations, Sustainable  Development  Qualifications  PhD in Chemical Engineering from  the Norwegian University of Science  and Technology |  | Skills and experience  Svein Richard  has a strong commercial  and strategic background as a former  chief executive of Norsk Hydro ASA  and more recently as a non-executive  director on a number of boards.  His experience of leading a global  industrial group brings valuable insight  to the Board’s  strategic planning and  driving growth in key geographies.  His leadership experience in developing  business synergies and harnessing  sustainable opportunities is a valuable  addition to Board discussions. |  | He started his career at Ardal og  Sunndal Verk AS, the Norwegian  state‑owned aluminium business,  before it merged with Norsk Hydro  ASA.  Svein Richard  went on to hold  a variety of management roles at  Norsk Hydro, leading a number of its  businesses, before being appointed  chief executive in 2009, a position he  held until retiring in 2019. Svein Richard  was also Chair of Veidekke ASA from  2019 until May 2022, Vice Chair of  Den Norske Bank ASA until April 2023  and Vice Chair of Swiss Steel Holding  AG until October 2023. |  | Current external appointments  Chair of dormakaba Holding AG and  non-executive director of Eramet  Norway. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 86 |
|  |  |  |

#### Board of directors

#### continued

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Sue Clark  Non-executive director  Appointed to the Board  April 2021  Independent  Yes  Committee memberships  Audit, Nominations, Remuneration  Qualifications  BSc in Biological Sciences from the  University of Manchester and an MBA  from Heriot Watt University |  | Skills and experience  Sue  brings to the Board significant  commercial and strategic experience  gained across a range of industries,  with exposure to a broad range of  stakeholders in both an executive and  non-executive capacity. Sue has  significant experience in the consumer  goods sector and understands the  challenges of changing customer  and consumer preferences and the  need to build and protect the Group's  reputation with all its stakeholders. |  | Sue started her career with the Central  Electricity Generating Board before  holding a variety of communication roles  at National Power plc. She went on  to join Scottish Power plc, where she  became Director of Corporate Affairs.  In 2000, Sue joined Railtrack Group plc,  before moving to SABMiller plc in 2003,  where she was a member of the  executive management team, and  Director of Corporate Affairs until 2012  and then Managing Director, Europe,  until the business was acquired in 2016. |  | Sue was a non-executive director  of Bakkavor Group plc until 2020 and  Tulchan Communications LLP until 2023,  and a member of the Supervisory Board  of AkzoNobel NV until April 2021.  Sue is the non-executive director  responsible for understanding the views  of employees.  Current external appointments  Senior Independent Director at Imperial  Brands plc and easyJet plc, and a  non‑executive director of Britvic plc. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Anke Groth  Non-executive director  Appointed to the Board  April 2023  Independent  Yes  Committee memberships  Audit, Nominations  Qualifications  Degree in Business Economics from  the University of Dortmund |  | Skills and experience  Anke has a strong financial and  commercial background and extensive  leadership experience. Her experience  operating in large international listed  companies covering energy and  industrial sectors, and her strategic  and operationally focused knowledge  bring valuable insight and perspective  to the Board.  Anke began her career in the energy  industry, initially in business development  and mergers and acquisitions in two  regional energy companies, before |  | working for E.ON SE from 2001 to 2018.  Her roles at E.ON SE included Vice  President of Mergers & Acquisitions;  Chief Financial Officer, Spain; Senior  Vice President Investor Relations;  and, from 2016 to 2018, Chief Financial  Officer of E.ON UK plc. In 2018 Anke  decided to join KION Group AG, active  in the capital goods sector and publicly  listed on the German stock exchange,  as Group Chief Financial Officer & HR  Director, a role she held until stepping  down in 2022. |  | Current external appointments  Member of the Supervisory Board at  E.ON SE and the Administrative Board  at DKV Mobility Group SE. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Saki Macozoma Purple_icon_8.svg  Non-executive director  Appointed to the Board  May 2022  Independent  Yes  Committee memberships  Audit, Nominations  Qualifications  BA in Economics and Politics from  the University of South Africa |  | Skills and experience  Saki has a strong track record as a chair  and non-executive director across  a number of listed and private entities  and brings to the Board significant  experience from a range of industries.  He also brings extensive insight into  the South African business environment,  including into key regulatory and  sustainability considerations for  Mondi’s operations in South Africa. |  | From 1993 to 1994, Saki worked for  South African Breweries as Business  Development Manager, before being  elected a member of South African  Parliament in 1994, a position he held  until 1996. Saki went on to be appointed  a managing director at Transnet Limited,  the company responsible at that time  for South Africa’s rail network and  harbours and South African Airways.  In 2001, he joined New African  Investments Limited, a publicly listed |  | investment company, as Chief Executive  Officer, a role he held until 2004. He  was also previously chair of MTN Group  Limited and a non-executive director of  Standard Bank Group Limited, Liberty  Holdings and Murray and Roberts  Holdings Limited.  Current external appointments  Chair of Vodacom Group Limited, Safika  Holdings (Pty) Ltd, Tshipi é Ntle  Manganese Mining (Pty) Ltd and  Ntsimbintle Mining (Pty) Ltd. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Dame Angela Strank Purple_icon_9.svg  Non-executive director  Appointed to the Board  April 2021  Independent  Yes  Committee memberships  Nominations, Remuneration (Chair),  Sustainable Development  Qualifications  BSc and PhD in Geology from the  University of Manchester and a  Chartered Engineer |  | Skills and experience  Angela has extensive experience of  operating in large, international  companies in both executive and non-  executive roles, with expertise including  operations, technology and sustainability.  Her valuable knowledge of combining  technology, sustainability and low-  carbon energy brings key insight into  innovation for circular driven solutions  and business growth, and her experience  of international executive leadership in  the UK listed environment enables her to  bring guidance and challenge to her role  as Remuneration Committee Chair. |  | Angela started her career with the  Institute of Geological Sciences before  joining BP plc in 1982, where she held  various international senior leadership  and strategic technology/engineering-  focused roles. She was appointed  BP Chief Scientist and Head of  Downstream Technology in 2014 and  was appointed to the group executive  committee in 2018, a position she held  until her retirement in 2020. Angela  was honoured with a Damehood (DBE)  in 2017, and is a Fellow of the Royal  Society, the Royal Academy of  Engineers and the Institute of Chemical |  | Engineers, as well as an honorary Fellow  of the UK Energy Institute.  Angela holds honorary DSc degrees  from Royal Holloway University and  the University of Bradford, and is an  honorary professor of the University  of Manchester.  Angela was also a non-executive  director of Severn Trent plc until  March 2022.  Current external appointments  Non-executive director of SSE plc and  Rolls-Royce Holdings plc. |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  | Stephen Young Purple_icon_10.svg  Non-executive director  Appointed to the Board  May 2018  Independent  Yes  Committee memberships  Audit ( Chair ), Nominations,  Sustainable Development  Qualifications  Graduated in Mathematics from  Southampton University, member  of the Chartered Institute of  Management Accountants (UK) |  | Skills and experience  Stephen  brings a strong financial  and general management background  to the  Board with experience gained  internationally across a variety of sectors,  including industrial and engineering.  Stephen’s experience brings crucial  insight to maintaining and developing  Mondi’s  robust risk management system  and allows him to act as an experienced  sounding board for executive  management.  He spent his early career in commercial  accounting and finance roles at  companies including Ford Motor  Company, Mars, Inc and Grand  Metropolitan plc (now Diageo plc). |  | He was Group Finance Director of  the Automobile Association until its  acquisition by Centrica in 2000 before  becoming Group Finance Director  at Thistle Hotels plc.  In 2004 Stephen was appointed Group  Finance Director at Meggitt plc, an  international engineering business  specialising in aerospace equipment.  He held this role for nine years, before  being appointed CEO in 2013.  Stephen  stepped down from the board of  Meggitt plc on 31 December 2017.  He was also a non-executive director  of Derwent London plc from 2010 until  May 2019. |  | Stephen was appointed as Senior  Independent Director of Mondi plc  on 6 May 2021, a role he relinquished  in 2023 to support Mondi’s compliance  with new diversity requirements in the  UK Listing Rules.  Current external appointments  Non-executive director and Audit  Committee Chair at Weir Group plc. |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 87 |
|  |  |  |

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
| ExCo_Secretary_.jpg | | |  | ExCo_Secretary_2.jpg | | |  | Diversity of the  Executive Committee | | |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  | Andrew King biography  Page  [86](#id6f470efcf9445d6be6ab0a9907fd201_1-1-1-1-311571) |  |  |  | Mike Powell biography  Page  [86](#id6f470efcf9445d6be6ab0a9907fd201_1-1-1-1-311571) |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
| WEB23_Markus Gartner 1_edit_retouched_crop.png | | |  | ExCo_Secretary_4.jpg | | |  |  | | |
|  |  |  |  |  |  |  |  |  |  |  |
| WEB23_Vivien McMenamin 1_retouched_crop.png | | |  | ExCo_Secretary_6.jpg | | |  |  |  | |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  | | |  |  | | |
| WEB23_Jenny Hampshire 1 copy_retouched_crop.png | | |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 88 |
|  |  |  |

#### Executive Committee and Company Secretary

![21990232555680]()

![21990232555741]()

|  |
| --- |
|  |
| 2 |
| 1 |
| 1 |
| 1 |
| 1 |

|  |
| --- |
|  |
| 83% |
| 17% |

|  |
| --- |
|  |
| Nationalities represented on  the Executive Committee |

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Markus Gärtner  CEO, Corrugated Packaging  Appointed to the Executive  Committee  October 2018  Qualifications  Doctorate of Technical Sciences from  ETH Zürich and a Master of Science  in Electrical Engineering from  Stanford University | |  | Skills and experience  Markus has significant industrial and  international business experience.  He started his career at McKinsey &  Company, working on numerous  operational and strategic projects  across a variety of industries.  Markus went on to join Novelis AG,  a leading producer of rolled aluminium  products, where he held various roles  in strategy and sales with growing  responsibility, until he eventually  became the head of one of Novelis’  three businesses as Vice President &  General Manager Specialities. |  | In this capacity, he was responsible for  a diverse range of applications, including  consumer packaging solutions and  industrial products.  Markus  joined Mondi in September 2018  as CEO, Fibre Packaging/Paper and was  appointed to the Executive Committee  in October that year. He subsequently  became CEO, Corrugated Packaging  in October 2019.  Current external appointments  None. |  |  | | |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Lars Mallasch  Group Technical & Sustainability  Director  Appointed to the Executive  Committee  September 2020  Qualifications  Graduated in Paper Technology  from the University of Applied Science  in Munich | |  | Skills and experience  Lars has extensive experience in the  pulp and paper industry, having worked  in the industry for over 25 years.  Lars began his career with a paper  making apprenticeship and then  studied Paper Technology in Munich.  He joined Voith, the global technology  company, in 1997 as Commissioning  Engineer for Capital Projects. Lars  subsequently held a variety of  management roles in Voith Paper’s  board and packaging division, gaining  a wide range of experience and  working internationally in a number  of different countries. |  | After 14 years with Voith, Lars joined  Mondi in 2011 as Group Head of Capital  Expenditure, a role he held for six years.  Alongside this, he held the role of  Technical Director Containerboard  between 2012 and 2014 and Technical  Director Packaging Paper from 2014  until 2018. He also held the role of  Operations Director at Mondi’s Štětí mill  between 2017 and 2019. |  | In 2019, Lars was appointed as Mondi’s  Corrugated Packaging Technology  and Capex Director, and alongside this,  was appointed as Director of  Containerboard Operations at  Mondi’s  Syktyvkar and Richards Bay mills in  February 2020.  Lars was appointed to his current role,  and as a member of the Executive  Committee, in September 2020.  Current external appointments  None. | | |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Vivien McMenamin  CEO, Uncoated Fine Paper &  South Africa  Appointed to the Executive  Committee  October 2017  Qualifications  MSc in Economics from the University  of London and Advanced High  Performance Leadership Certificate  from IMD Switzerland | |  | Skills and experience  Viv has over 20 years’ experience in  the pulp and paper industry, having  held executive responsibility in  Mondi  South Africa  for marketing and sales,  human resources, corporate affairs and  transformation. Viv’s roles have included  Mondi  Group Head of Sustainable  Development and Director Land and  Forestry, giving her significant  sustainability experience and insight. In  October 2017 , she was appointed CEO  of Mondi South Africa and in October |  | 2023, she was appointed CEO,  Uncoated Fine Paper.  Viv was instrumental in the  establishment of  Mondi  Zimele,  Mondi’s  small business development  organisation, and crafting  Mondi’s  innovative approach to land reform.  Prior to  Mondi , Viv worked in  government and the anti‑apartheid  movement in South Africa, serving  Nelson Mandela as a member of the  President’s Task Force on Local  Economic Development and as a |  | member of President Thabo Mbeki’s  Economic Advisory Panel.  Viv previously served on the boards  of SiyaQhubeka Forests, the  South African Association for Marine  Biological Research (SAAMBR)  and Durban Girls College.  Current external appointments  Non-executive director of KAP  Industrial Holdings Limited and of  Business Leadership South Africa. | | |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Thomas Ott  CEO, Flexible Packaging  Appointed to the Executive  Committee  January 2022  Qualifications  Graduated in Business Administration  from the WU-Vienna business school | |  | Skills and experience  Thomas  has extensive experience  in the industrial bags and consumer  packaging industries, having held  a variety of roles with Mondi  for  more than 25 years, building  Mondi’s  Industrial Bags business and shaping  Mondi’s portfolio in  Europe .  Thomas  started his career with Deloitte  & Touche in 1992, before joining Mondi  in 1995 as a financial controller. |  | He went on to hold a number of  leadership roles within  Mondi before  becoming COO Industrial Bags in 2012,  a role he held until 2019. During this time,  he successfully restructured  Western  Europe  and supported Mondi’s growth  in North America, the Middle East  and Africa.  Thomas briefly moved to Amcor EMEA,  focusing on consumer packaging as a  member of the EMEA executive team |  | in the role VP Food, Snacks and  Confectionery, before returning to  Mondi  in March 2021 as COO Kraft  Paper & Paper Bags.  In January 2022, he was appointed CEO  of  Mondi’s  Flexible Packaging business.  Current external appointments  None. | | |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Jenny Hampshire  Company Secretary | |  | Skills and experience  Jenny, a fellow of the Chartered  Governance Institute, joined Mondi  in  May 2007 and has held various roles  in the company secretariat, including  five years as Assistant Company  Secretary. She was appointed  Company Secretary of  Mondi plc in  December 2016 . Prior to joining Mondi ,  Jenny  worked for The BOC Group plc  in its company secretariat. |  |  |  |  | | |
|  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 89 |
|  |  |  |

#### Promoting long-term

#### sustainable success

The role businesses play in society

remained firmly in focus during the year,

with continued scrutiny of the impacts

they have on the environment in which they

operate and on wider stakeholders, and

the measures companies are taking to

manage and mitigate these impacts.

Having an effective board in place,

consisting of directors with the necessary

skills, knowledge and integrity, is crucial

in understanding and managing these

impacts, and ensuring that Mondi operates

both understanding and fulfilling its

responsibility to society. The Board

provides leadership to the  Group,

establishing its strategy with the aim

of achieving long-term sustainable success

for the  Group, our shareholders and our

other stakeholders. The biographies for

Mondi’s Board members, setting out the

competencies we believe they bring to the

Board and the skills and experience that

allow them to contribute to the long-term

success of Mondi, can be found on

pages [86](#id6f470efcf9445d6be6ab0a9907fd201_1-1-1-1-311571)-[87](#id6f470efcf9445d6be6ab0a9907fd201_31-7-1-1-345052).

Mondi’s purpose, strategy and culture

define The Mondi Way and how we run

our business. This is illustrated in our

business model, set out on pages [14](#i47a6727b8bad4fe28addb4dae187e293_2583)-[19](#ife39ad51f55c438e892c01a643cc64ca_13946),

which explains how we achieve our

purpose and deliver value for stakeholders

while ensuring sustainability is at the

centre of everything we do. Strong,

ethical leadership, supported by a robust

corporate governance framework, is

crucial to the achievement of our purpose

and strategy in a way that balances the

interests of our key stakeholders while

creating long-term sustainable value.

Supported by its committees, the Board

has responsibility for setting

and overseeing the implementation

of the Group’s strategy, ensuring the

implementation of an appropriate

risk management framework and

overseeing sustainable financial

performance. Mondi’s governance

framework and our culture of transparency

ensure that the  Board has the information

it needs to assess the risks and

opportunities facing the Group and

the sustainability of the business model.

The structure of the Board and its

committees, the division of responsibilities

and the policies and procedures in place

to facilitate the effective operation of

the Board are detailed on pages  [96](#i56e8da62c9a2477786de115d5e7cc4a8_125010)-[97](#i156da1984e3d4529a243ee6b1278438c_29-21-1-8-489511).

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |

#### How the Board

#### monitors culture

Mondi’s culture defines our behaviour

and the way we do business, across

the Group, within our operations and in

the boardroom. It is critical to fulfilling

our purpose and achieving long-term

sustainable success. The Mondi Way sets

out the key values that form the foundation

of our culture, reinforced by our Code of

Business Ethics which comprises the

principles governing the way we behave

and conduct business – legal compliance,

behaving with honesty and integrity,

respect for human rights, consideration of

stakeholders and sustainability. The Board’s

responsibility for assessing and monitoring

the culture of the Group is embedded in

the Matters Reserved for the Board.

There are a number of ways in which the

Board monitors and assesses culture, with

the insight acquired used as context for

discussions and decision-making, including:

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |

![Site_Visit_icon.svg]()

#### Site visits

The directors are encouraged to visit

Mondi’s key assets and operations

so that they can get a more in-depth

understanding of the business. Such

visits offer directors the opportunity

to see for themselves how our safety

and sustainability culture is working in

practice, to talk to local management

and employees and to see how Mondi’s

values are communicated at a local level.

During 2023, in addition to visits to sites

by individual directors, the Board visited

Mondi’s mill in Świecie (Poland), more

details of which can be found on page [94](#ia559d9ce3a2a4113b410c2cb911d3d05_1-1-5-1-472681).

|  |  |
| --- | --- |
|  |  |
|  | Corporate governance report  Pages  [90](#i47a6727b8bad4fe28addb4dae187e293_2923)-[121](#i6f6f8967ed114bb99dfbf771b4af9713_3-5-1-1-328026) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 90 |
|  |  |  |

#### Corporate governance report

## Board

## leadership and company purpose

![Corp_Gov_Monitoring_Culture.svg]()

![Speak_Out_icon.svg]()

#### SpeakOut

Mondi has an anonymous whistleblowing

and grievance platform called ‘SpeakOut’

operated by an independent third party.

Any type of concern can be raised via

SpeakOut, and the Board and Audit

Committee receive regular reports of the

messages received. These reports provide

insight into matters of concern to our

employees and other stakeholders and

draw out behaviour that is contrary to

Mondi’s values. More information relating

to SpeakOut can be found on page [84](#i2d0107ad6556412f8eb0580d15dbef60_1-1-1-1-327608).

|  |  |
| --- | --- |
|  |  |
|  | SpeakOut  Page [84](#i47a6727b8bad4fe28addb4dae187e293_5381) |

![Board_presentations_icon.svg]()

#### Board

#### presentations

The Board has in place a rolling programme

of presentations from members of the

Executive Committee and other senior

management. These presentations give the

directors direct exposure to members of

senior management beyond the executive

directors, allowing directors the opportunity

to ask questions and hear their views.

The directors also gain valuable additional

insight helpful to succession planning

discussions. Presenters and members

of local management are also invited

to attend Board dinners, which offer a

more informal setting for discussion. More

information can be found on page [100](#i855bb2c99e6e4494946cf9cdd2dbae89_1-1-1-5-472731).

|  |  |
| --- | --- |
|  |  |
|  | Division of responsibilities  Page  [96](#i47a6727b8bad4fe28addb4dae187e293_5090)-[101](#i518f56fbae5940d5b7faf1f1ece0b7c0_2-3-1-1-327341) |

|  |
| --- |
|  |
|  |
|  |
| Employee Survey response rate  80% |
|  |
| Inclusiveness Index  77% |
|  |
| Purposeful Workplace Index  79% |

![Employee_results_icon.svg]()

#### Employee Survey results

The Board receives regular reports on the

results of our Employee Surveys, the issues

raised and the follow-up actions being

taken, giving the Board an insight into how

employees feel about the culture of the

Group and particular areas that may need

addressing. Our global Employee Surveys

also help us to measure progress towards

our MAP2030 Created by Empowered

People commitments. The last Group-wide

survey, undertaken in the first half of 2023,

achieved an 80% response rate, with

more than 16,800 employees participating.

The results were used to calculate our

Purposeful Workplace Index, Inclusiveness

Index and Wellbeing scores, which provide

the Board with an objective way to assess

employee views in relation to, among other

things, respect, fairness, trust, recognition,

the working environment and mental

wellbeing. These indices also give us a way

of directly measuring and monitoring

aspects of culture over time, with targets in

respect of the Purposeful Workplace Index

and Inclusiveness Index scores forming part

of our MAP2030 Created by Empowered

People commitments. More information can

be found on pages [48](#i47a6727b8bad4fe28addb4dae187e293_5795)-[50](#i989e19b834f344c0aff2915d48a2e7d3_146686).

|  |  |
| --- | --- |
|  |  |
|  | Empowered People  Page  [48](#i47a6727b8bad4fe28addb4dae187e293_5795)-[50](#i989e19b834f344c0aff2915d48a2e7d3_146686) |

![Safety_reports_icon.svg]()

#### Safety reports and statistics

The Board reviews safety statistics and key

safety focus areas at every meeting.

Caring for our employees is fundamental

to Mondi’s culture and this includes ensuring

safe behaviour. Reviewing the safety reports

highlights to the Board any concerns

around the approach to safety specifically

or indications of wider leadership issues

at particular plants or mills.

![Review of key policies_icon.svg]()

#### Review of key policies

The Board undertakes an annual review

of Mondi’s key policies. This gives the Board

the opportunity to assess whether policies

remain suitable for Mondi, reflect the Group's

culture and values and support its long-term

sustainable success. While there were

no material changes to Mondi’s policies

as a result of this review during 2023, the

opportunity was taken to update Mondi's

Diversity & Inclusion Policy to align with

current practice.

![Feedback_icon.svg]()

#### Feedback from non-executive

#### director responsible for understanding

#### the views of employees

During 2021, Sue Clark was appointed as

the independent non-executive director

responsible for understanding and feeding

back to the Board the views and concerns

of our employees. Sue’s engagement with

our employees provides the Board with

valuable insight into how groups of our

employees are feeling about Mondi and

any matters of concern to them, giving the

Board helpful information concerning how

well the Group’s culture is embedded across

the organisation and any issues that might

need greater attention. Information relating

to the outcomes of this engagement during

2023 can be found on pages [92](#i749b46579a4249e1855257d2cf9393d9_4-1-1-3-472586)-[93](#i7e8411646eff4bc0adb55b69313ae28d_591753).

|  |  |
| --- | --- |
|  |  |
|  | Corporate governance report  Page  [90](#i47a6727b8bad4fe28addb4dae187e293_2923)-[121](#i6f6f8967ed114bb99dfbf771b4af9713_3-5-1-1-328026) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 91 |
|  |  |  |

#### Stakeholder

#### engagement

Understanding the impact of our business

on our key stakeholders, and the

environment in which we operate, is

central to the Board’s deliberations and

decision‑making. This is reflected in Mondi’s

Code of Business Ethics, recognising the

fact that engagement and collaboration

with our stakeholders is essential if we are

to fulfil our purpose, deliver our strategy

and create long-term, sustainable value

for our shareholders in a manner that

reflects our high standards of business

conduct. Understanding what matters most

to all our stakeholders allows us to make

balanced judgements.

While the Board undertakes a level of

direct engagement, there is also a

significant amount of indirect engagement

that takes place across the Group. Through

our delegation framework, the output from

this engagement is relayed to the Board,

through the Executive and other

committees of the Board, members

of senior management and those closest

to the stakeholders in question. Details

of our key stakeholders, engagement

activities undertaken during the year and

the outcome of these activities can be

found in our Section 172 statement on

pages [38](#i47a6727b8bad4fe28addb4dae187e293_2707)-[41](#i2eb1d609446c4463b20fb8dfc6eb8ad7_74314).

The information provided over the next

few pages and in our Section 172

statement explains how the feedback

from this engagement influences the

Board’s decision-making.

Information enabling the Board to assess

and understand the views and priorities

of our key stakeholders comes from

a number of different sources, including:

– presentations from the CEO of each

business unit, and other members of

senior management, highlighting those

stakeholder issues that are of specific

relevance to their business or area

of responsibility, including the views

of our customers and how these

influence product development

and key sustainability considerations

(see page [100](#i855bb2c99e6e4494946cf9cdd2dbae89_1-1-1-5-472731) for more information);

– updates on the global initiatives Mondi

participates in, primarily related to

sustainability matters, and collaboration

with external bodies;

– regular environmental performance

reviews, including metrics on our

greenhouse gas emissions, given

at meetings of the Sustainable

Development Committee, which all

Board members usually attend;

– the outcome of the double materiality

assessment undertaken during the year,

which, among other things, identified

the sustainability issues of greatest

importance to our stakeholders.

The results were driven by inputs from

a range of sources, including surveys and

interviews with both internal and external

stakeholders, and will be used to guide

our key focus areas in the coming years.

Further details can be found on page [43](#ic9ee50e9083a4e688a2c9cd6f0eaffc2_1-1-1-6-478380);

– detailed review of the results of the

latest customer satisfaction survey; and

– updates and briefings in relation to

matters impacting the environment in

which we operate, including regulatory

changes and market developments.

In 2023, these included a briefing on

Mondi's approach to public affairs, the

key regulatory developments currently

impacting our customers and how we

engage in this respect, both directly

and via trade associations.

On the following pages, we focus more

specifically on how we have engaged with

employees and investors.

#### How does the Board consider our

#### stakeholders when taking decisions?

Understanding the views and issues

raised by our stakeholders through the

engagement methods highlighted forms

a key part of the Board’s decision-making

process. The regular flow of information

to the Board provides context and ensures

that the directors are made aware of the

issues that matter most to our stakeholders

when directors consider the Group’s

strategy and take decisions.

To assist the Board, all papers requiring

material decisions include clear explanation

as to the expected impact on those

stakeholders relevant to the decision,

whether positive or negative. For capital

expenditure decisions in particular, a more

comprehensive review of the impact on

our stakeholders is part of the established

process we have for developing the

necessary business case.

Examples of the ways in which stakeholder

interests and views have influenced the

Board’s decision-making during the year

can be found on pages [92](#i7e8411646eff4bc0adb55b69313ae28d_467526)-[95](#i3cf57d589ddf4c9f8a96df0dbcef0eaa_1-1-1-4-474284).

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  | IMG_7491_cropped_retouched_crop.png | | |
|  |
|  |
|  |  | | |
|  | How the Board has engaged  with employees  Our employees are core to Mondi’s  long-term sustainable success, and as  a global employer, employing around  22,000 people across more than  30 countries, we have a responsibility  to provide a safe and healthy working  environment, to operate with integrity  and to instil a culture that supports  our people in fulfilling their potential.  Understanding the experiences and  views of our employees, and the issues  that matter most to them, is an area  of focus for the Board , with this insight  allowing the directors to assess the  impact of their decisions on our  workforce. Rather than use only one  method to engage with employees, we  use a combination of different methods.  Some of our people are office-based  but many work in our production facilities  and so no single method is suitable.  By using a range of methods, we aim  to reach as many people as we can,  engaging with them in the manner most  suitable for them.  In 2021, the Board agreed that Sue Clark, an  independent non-executive director, would  be responsible for undertaking engagement  with Mondi’s employees on behalf of the  Board and for understanding and feeding  back their views and concerns. Sue’s  exposure to a broad range of stakeholders  in both an executive and non-executive  capacity and her previous communication-  focused roles mean she is well positioned  to take on this responsibility. Each year, Sue  undertakes a number of engagements with  a broad range of employees, the format of  which varies depending upon the location  and audience to ensure the sessions are  as productive and valuable as possible.  The subject matter is usually driven by the  employees and can cover topics ranging  from safety and strategy, to sustainability  and remuneration. Sue reports back to the  Board on the matters raised and the themes  emerging during these engagements. | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 92 |
|  |  |  |

#### Corporate governance report

## Board

## leadership and company purpose

#### continued

As an example, in February 2023 during

a visit to Mondi's Richards Bay mill

(South Africa), Sue facilitated a roundtable

session with a cross-section of employees,

offering a forum for an open, two-way

discussion in relation to a broad range of

topics including safety, culture, innovation,

talent development and retention, diversity

and inclusivity. Particular insight was given

into the perceived barriers to increasing

diversity, within Mondi and across the

industry more broadly. The session was

also attended by Philip Yea, Chair of

the Board, Dame Angela Strank, Chair of

the Remuneration Committee, and Saki

Macozoma, a non-executive director, giving

attendees the opportunity to engage

directly with a number of Board members.

The discussions reinforced, among other

things, the need for the Board to continue

its focus on the promotion of diversity

and inclusion across the organisation

and the challenges faced in attracting

and retaining critical skills, matters that

will continue to form part of the Board's,

and its committees', agendas during

the coming year.

The level of engagement and open and

honest dialogue during these meetings

results in valuable feedback for the Board,

and the topics discussed and views

expressed provide important context

for Board discussions and key decisions.

The output reaffirmed that the desired

culture is felt throughout the organisation

and that leadership in this regard

is effective.

Alongside this, Mondi has a European

Communication Forum, a formally

constituted body designed to facilitate

communication between Mondi and its

employees. At least once a year, employee

representatives from plants across Europe

attend the Forum, at which a number

of presentations are given by senior

management. The meetings offer employee

representatives an opportunity to hear about

developments across the business, while

also providing an open forum for employees

to ask questions and to express their views

directly to members of senior management.

The meetings are usually attended by the

Group CEO and other Executive Committee

members and members of senior

management as appropriate.

The last meeting of the European

Communication Forum was held in

October 2023. The meeting was attended

by representatives from across Mondi’s

European operations, as well as the

Group CEO, the Group Head of Safety &

Health and senior representatives from the

Group HR and Legal functions. Sue Clark

also attended the meeting, further

reinforcing the value of these meetings and

providing employee representatives with

a direct channel of communication to the

non-executive members of the Board.

The meeting consisted of presentations

relating to matters including financial

performance, HR initiatives and safety and

health, providing attendees with a wide range

of information on the operation of the business.

The formal presentations were followed by

a question and answer session, allowing

participants to openly engage and to raise

questions and comments on a broad range

of topics. Of particular focus for participants

were the divestment of Mondi’s Russian

operations; future growth prospects; safety;

and Mondi's approach to sustainability.

Matters raised during these meetings are

subject to subsequent follow-up where

appropriate, with further information provided

to participants where required.

A dinner was also held for participants,

allowing further opportunity for more informal

engagement outside of the meeting.

In addition to the above, the full Board

undertook visits to Mondi’s Świecie mill

(Poland) and the Group office in Vienna

(Austria) in June 2023 and January 2024

respectively, more details of which can

be found on page [94](#ia559d9ce3a2a4113b410c2cb911d3d05_1-1-5-1-472681).

The Board also uses the following

mechanisms to ensure it has a broad view

of the issues affecting our employees

and their views on key matters:

– regular presentations from the Group HR

function, providing detailed updates on

engagement activities undertaken, the

views expressed by employees and any

actions being taken in response;

– feedback from the CEO and other

Executive Committee members, who are

in regular contact with a wide spectrum

of employees from across the Group;

– results of global and local Employee

Surveys, providing insight into the issues

that matter most to our employees and

how they feel about working for Mondi,

guiding decisions that might impact

employees and allowing the Board to

identify areas for future focus. A number

of the questions are also designed to

test the culture in the organisation and

to allow the Board to judge how well

the desired culture is embedded;

– leadership forums, incorporating the

Mondi Diamond Awards, usually

attended by the Chair of the Board

and held approximately every two

years, providing the opportunity for

engagement with a wider range

of senior employees from across

all areas of the business;

– SpeakOut reports, which are presented

to the Audit Committee and Board at

meetings throughout the year. The reports

provide details of the messages received

via our whistleblowing and grievance

platform, SpeakOut, giving the Board

insight into specific issues affecting

our employees and allowing the Board

to identify any trends. Further details on

SpeakOut can be found on page [84](#i47a6727b8bad4fe28addb4dae187e293_5381); and

– review of usage rates for Mondi’s

Employee Assistance Programme

which offers an anonymous counselling

service for employees. The programme

is available to approximately 94%

of Mondi’s workforce.

The Board continues to believe that

this combination of methods remains

appropriate and effective, providing

insight into the views of a broad range

of employees from across Mondi’s

locations and allowing for two-way

engagement, with employees having

direct access to members of the Board

and senior management.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 93 |
|  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
| VS1_0424_crop.jpg | | |
|  | | |
|  | | |

How the

#### Board

#### has engaged

#### with investors

How the

#### Board

#### has engaged

#### with investors

Understanding the views of our investors

is fundamental to the way we run the

business, the development of our strategy

and how we shape our priorities. These are

taken into consideration with every decision

the Board makes. The engagement we have

with investors, both directly and indirectly,

allows the Board to determine which issues

are of most importance to them and

to understand what long-term, sustainable

value means from their perspective.

While recognising that every investor has

their own rationale for investing in Mondi

and that their investment goals vary, ongoing

engagement allows the Board to take fully

informed decisions, with an understanding

of how different groups of investors may

be impacted.

While the Chair is responsible for ensuring

effective communication with shareholders,

day-to-day management of this

engagement is delegated to the Group

CEO and Group CFO. They undertake

active engagement with investors on a

regular basis, meeting with Mondi’s largest

shareholders, analysts and other fund

managers. Meetings with the Chair are

offered on a regular basis and the Senior

Independent Director is available to meet

with shareholders as required, should any

issues arise that are not resolved through

the more regular channels. The committee

chairs are also available for engagement

with investors and other stakeholders

where appropriate.

In addition, the executive directors and

the Head of Investor Relations make

themselves available to investors on an

ongoing basis in order to maintain an

open dialogue, resulting in a number of

ad hoc meetings and calls taking place

throughout the year.

The Company Secretary’s office is

the focus for private shareholder

communications, responding to

individual shareholder correspondence,

and coordinating our engagement on

corporate governance matters.

We also maintain ongoing contact with

our debt providers, and the Group CFO

and Group Treasurer hold regular meetings

with the credit rating agencies, relationship

banks and debt investors.

The directors are kept informed of the

views raised, with feedback from investors,

particularly from the full- and half-year

investor roadshows, presented and

discussed at Board meetings. Details of the

key investor events that took place during

2023 can be found on page [95](#i3cf57d589ddf4c9f8a96df0dbcef0eaa_1-1-1-4-474284),

with feedback from these events covering

investor views on a range of topics, including

Mondi's strategy, market developments and

the approach to sustainability. Analyst

reports are also shared regularly with the

Board and consideration given to any views,

both positive and negative, regarding the

Group’s performance and future direction

and the perceptions of the management

team. These views provide context for,

and feed into, the Board’s discussions

around strategy, capital allocation and

succession planning.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 94 |
|  |  |  |

#### Corporate governance report

## Board

## leadership and company purpose

#### continued

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  |  |  |  |
|  | Board site visits  The June 2023 Board programme  was held at our Świecie mill (Poland).  The two-day visit incorporated the  scheduled Board and committee  meetings but also provided the  opportunity for the Board to listen  to presentations from the local  management team and to tour the  mill. The Board was given insight into  the mill's product portfolio, financial  performance, sustainability initiatives  and measures taken to support the  local community, and was able to  see the progress made in respect  of recent investment at the mill.  Such visits are invaluable to the Board,  allowing the directors to experience  the culture and safety approach first  hand and to engage directly with  those on the ground in the operations.  A dinner with representatives from  the mill was also held, offering the  opportunity for direct and more informal  engagement with Board members.  In addition, a number of Board  members visited the Richards Bay mill  (South Africa) in February 2023, which  included tours of the mill, nursery and  harvesting operations, presentations  from local management and the  opportunity to see the results of  recent investment at the mill. |  | Sue Clark also facilitated a roundtable  discussion with employees, details  of which can be found on page [93](#i7e8411646eff4bc0adb55b69313ae28d_590831).  In January 2024, the Board programme  was held at our Group office in Vienna  (Austria), facilitating in-person  engagement between the Board and  members of senior management based  in Vienna. In particular, an invitation  to attend a Board dinner was extended  to a wide group of people, with  attendees ranging from function heads  to HR business partners to key members  of operational management. Such events  offer valuable insight for the purposes of  succession planning and monitoring and  assessment of the organisational culture. |  |
|  |  |  |  |
|  |  | IMG_7506_cropped_edit_retouched_crop.png |  |
|  |  |  |  |
|  |  | DSC_6253_D850_retouched_crop.png |  |
|  |  |  |  |  |

Alongside this, Philip Yea held meetings

with a number of Mondi’s major

shareholders during the year. There was

no specific agenda for these meetings, but

instead they were designed to offer open

discussion and engagement. Topics covered

included capital allocation, the disposal of

Mondi's Russian assets, Mondi's approach

to governance and culture, diversity and

progress against Mondi's MAP2030 targets.

In 2023, our Board also continued to engage

with a cross-section of shareholders on

developments and external expectations

relating to executive pay. As a consequence,

further meetings with investors were held

to discuss particular features of the Directors'

Remuneration Policy. Constructive feedback

from investors is taken into account in

determining the structure and operation

of our remuneration policy.

Mondi’s Annual General Meeting (AGM) also

presents an opportunity for shareholders

to question the directors about our activities,

performance and prospects and continues

to be a valuable opportunity for direct

engagement between the Board

and shareholders.

The AGM in 2023 was held as a fully

hybrid meeting. Those shareholders joining

virtually were able to hear the meeting,

ask questions both verbally and in written

form and vote live during the meeting.

To maximise engagement, shareholders

were also able to submit their questions

in advance of the meeting, with written

answers provided in advance of the

proxy voting deadline wherever possible.

All resolutions were passed, with

approximately 76% of the total Group

shares voted, indicating high levels

of engagement.

While we were pleased with the success

of the AGM in 2023, and we intend to

retain the hybrid format in 2024, given the

cost and complexity involved, we continue

to look for ways in which we can simplify

the arrangements while continuing

to maximise levels of engagement.

Full details of the arrangements for the

2024 AGM, and explanations of each

resolution to be proposed at the AGM,

can be found in the 2024 AGM notice,

which is contained in a separate circular

to be made available to all shareholders

in advance of the meeting.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | 2023 investor events | | | |  |
|  |  |  |  |  |  |
|  |  | February | |  |  |
|  | Preliminary results announcement  Johannesburg and Cape Town full-year results roadshow | | | |  |
|  |  |  |  |  |  |
|  |  | March | |  |  |
|  | UK full-year results roadshow  UBS Global Pulp & Paper Tour | | | |  |
|  |  |  |  |  |  |
|  |  | April | |  |  |
|  | Discussions with investors and advisory bodies  prior to Annual General Meeting | | | |  |
|  |  |  |  |  |  |
|  |  | May | |  |  |
|  | Annual General Meeting and trading update  US investor roadshow  BNP Paribas Exane Future of Packaging Conference | | | |  |
|  |  |  |  |  |  |
|  |  | June | |  |  |
|  | London investor roadshow | | | |  |
|  |  |  |  |  |  |
|  |  | August | |  |  |
|  | Half-year results announcement  Johannesburg and Cape Town half-year results roadshow | | | |  |
|  |  |  |  |  |  |
|  |  | September | |  |  |
|  | London half-year results roadshow | | | |  |
|  |  |  |  |  |  |
|  |  | October | |  |  |
|  | Trading update | | | |  |
|  |  |  |  |  |  |
|  |  | November | |  |  |
|  | UBS European Conference  Bank of America European Materials Conference | | | |  |
|  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 95 |
|  |  |  |

#### Composition

#### and independence

#### of the Board

The directors holding office during the

year ended 31 December 2023 are listed

below, together with their attendance

at  Board meetings. Biographical details

for those in office at the date of this report

can be found on pages  [86](#id6f470efcf9445d6be6ab0a9907fd201_1-1-1-1-311571)-[87](#id6f470efcf9445d6be6ab0a9907fd201_22-1-1-1-322065).

The size and composition of the Board

and its committees are kept under review

by the Nominations Committee. While

we are of the view that collectively there

is an appropriate balance of capabilities,

business experience, independence

and skills diversity on the Board to meet

the Group’s current business needs,

we are constantly assessing the mix

of competencies on the Board and its

committees and considering succession

planning requirements.

Meetings between the Chair and

non‑executive directors without

management present are held prior to

every Board meeting. Dominique Reiniche

as Senior Independent Director also

met with the other directors without

the Chair present to lead the review

of the Chair’s performance.

#### Board policies and procedures

There are a number of policies in place

designed to ensure that the Board can

function effectively. These include:

#### Professional advice

A policy is in place pursuant to which

each director may obtain independent

professional advice at Mondi’s expense in

the furtherance of their duties as a director

of Mondi plc. No requests were received

during the year.

In addition, each of the committees is

empowered, through its terms of reference,

to seek independent professional advice

at Mondi’s expense in the furtherance of

its duties.

#### Directors’ and officers’ liability

#### insurance

Throughout the year to 31 December

2023, in line with market practice,

Mondi maintained directors’ and officers’

liability insurance.

#### Procedure for conflicts of interest

Company law and the articles of

association of Mondi plc allow directors

to manage potential conflicts. A formal

procedure is in place for the reporting and

review of any potential conflicts of interest.

This requires any potential conflicts to be

reported to the Company Secretary so that

the conflict can be discussed by the Board

and authorised if appropriate. The Board

may impose any restrictions on the

authorisation that it thinks appropriate.

Conflict authorisations are reviewed on an

annual basis. Directors are also obliged to

confirm their directorships annually as a

matter of course for review by the Board.

#### External directorships policy

To ensure that our directors are able to

dedicate sufficient time to Mondi, Mondi

has a policy setting out the parameters

regarding external appointments. Executive

directors must notify and obtain agreement

from the Nominations Committee before

accepting external positions. They are

permitted to retain any fee paid to them in

respect of directorships external to Mondi.

Neither of Mondi’s executive directors

currently holds a directorship external to

Mondi.

The policy also covers non-executive

directors, who are required to notify the

Chair of any proposed appointments,

including the time commitment and any

potential conflicts of interest, so that the

Nominations Committee can consider

and, if appropriate, agree to the

appointment. No significant new

appointments were taken on by any

of Mondi’s directors during 2023.

#### Division of responsibilities

The division of responsibilities between

the Chair and the Group CEO has been

clearly defined and approved by the Board.

The functions and duties of the Senior

Independent Director are also set out

in a separate statement.

The primary role of the Board, led by

the Chair, is to ensure the long-term

sustainable success of the Group, taking

into consideration the views and interests

of our key stakeholders. Our governance

processes and procedures provide a

framework to support the Board in the

fulfilment of this role.

There is a clearly defined Schedule of

Matters Reserved for the Board, setting

out those key matters that require Board

approval. The Board meets at least

seven times a year and an annual rolling

agenda is agreed with the Board to ensure

that all key matters reserved for its

consideration are covered in the annual

cycle of meetings. The Board is supported

by a number of committees, each of which

has its own terms of reference and annual

work programme. The Matters Reserved

for the Board and the terms of reference

are reviewed at least annually and are

available on the Group’s website.

The Chair, with support from the Company

Secretary, ensures the distribution of

appropriate, accurate and well-presented

materials, with meeting packs being

circulated electronically a week before each

meeting. Each Board programme is usually

held over two days, enabling the directors

to spend more time together and form

a greater understanding of each other,

developing a culture of trust and openness

in the boardroom.

Where appropriate, other senior executives

and advisers are invited to attend and

present at meetings, providing the

non‑executive directors with a broader

perspective on matters under consideration

and assisting the Board with monitoring

performance and achieving its objectives

(see page [100](#i855bb2c99e6e4494946cf9cdd2dbae89_1-1-1-5-472731) for more information).

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
| Board attendance1 |  |  |  |  |  |
| Directors |  |  |  |  |  |
| Philip Yea | 9/9 |  | Saki Macozoma | 9/9 |  |
| Svein Richard Brandtzaeg | 9/9 |  | Mike Powell | 9/9 |  |
| Sue Clark | 9/9 |  | Dominique Reiniche | 9/9 |  |
| Anke Groth2 | 7/7 |  | Dame Angela Strank | 9/9 |  |
| Andrew King | 9/9 |  | Stephen Young | 9/9 |  |

1The maximum number of meetings held during the year that each director could attend is shown next to the

number attended.

2Anke Groth joined the Board on 1 April 2023. Anke attended all meetings following her appointment.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 96 |
|  |  |  |

#### Corporate governance report

## Division of responsibilities

#### Board leadership and governance

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | The Board | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Chair Philip Yea | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | – Leads and manages the Board, setting the agenda,  providing direction and focus and ensuring effectiveness  and open and transparent debate  – Undertakes regular engagement with the  Group CEO  in between meetings | | | | | | | | |  |  | – Ensures there is a constructive relationship between  the executive and non-executive directors  – Ensures high standards of corporate governance  and ethical behaviour and oversees the culture  of the Group | | | | | | | |  | – Oversees the induction, training and  development of directors and the consideration  of succession  – Ensures effective communication with  shareholders and other stakeholders  – Ensures the Board receives accurate, timely  and clear information to support discussion  and decision-making | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Group CEO Andrew King | | | | | | | | | | | | | | | | | | | | |  | Group CFO Mike Powell | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | – Leads and manages the business  with day-to-day responsibility for  running the operations and, in  particular, the execution of strategy  within the delegated authority from  the Board  – Ensures the communication of  Mondi’s values and goals  throughout the organisation,  leading by example | | | |  |  | – Chairs the Executive Committee  and leads and motivates the  management team  – Ensures the Group  has effective  processes, controls and risk  management systems | | | | | | |  |  | – Develops and implements Group  policies, including with regard to  safety and sustainability  – Together with the  Group CFO , leads  the relationship with institutional  shareholders | | | | | |  |  | – Manages the day-to-day  operations of the Group, in this  case within his remit as  Group  CFO , in accordance with authority  delegated by the  Board  – Together with the  Group   CEO,  leads the relationship with  institutional shareholders | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Senior Independent Director  Dominique Reiniche | | | | | | | | |  | Independent non-executive directors  Svein Richard Brandtzaeg, Sue Clark ,  Anke Groth,  Saki Macozoma ,  Dame Angela Strank ,  Stephen Young | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | – Provides support to, and acts as a sounding board for,  the Chair and the non-executive directors  – Acts as a point of contact for shareholders  – Available as a trusted intermediary for other directors,  as necessary  – Manages chair succession | | | | | | | | |  |  | – Provide independent oversight of the  Group’s activities  – Offer an external perspective to, and  constructively challenge, management  – Provide to the Board a diversity of  knowledge and experience  – Monitor management performance and the  development of the organisational culture | | | | | | | |  | – Review and agree strategic priorities and  monitor the delivery of the Group’s strategy  – Ensure the integrity of financial reporting  and the effectiveness of internal controls  and risk management  – Determine executive director remuneration | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Board committees | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Nominations Committee  Philip Yea, Svein Richard Brandtzaeg,  Sue Clark, Anke Groth, Saki  Macozoma, Dominique Reiniche, Dame  Angela Strank, Stephen Young  Oversees the composition of  the Board and committees and  considers succession planning and  diversity, making recommendations  to the  Board | | | |  |  | Audit Committee  Stephen Young, Svein Richard  Brandtzaeg, Sue Clark, Anke Groth, Saki  Macozoma  Oversees the Group’s corporate  financial reporting, the internal control  system, risk management and the  relationship with the external auditor | | | | | | |  |  | Remuneration Committee  Dame Angela Strank, Sue Clark,  Dominique Reiniche, Philip Yea  Responsible for recommending overall  remuneration policy and the setting  of executive and senior management  remuneration | | | | | |  |  | Sustainable Development Committee  Dominique Reiniche, Svein Richard  Brandtzaeg, Andrew King, Dame Angela  Strank, Stephen Young  Oversees the Group’s strategy,  commitments, targets and performance  relating to safety, the environment,  climate-related matters and other  sustainable development issues | | | |  |
|  |  | Nominations Committee report  Page [105](#i47a6727b8bad4fe28addb4dae187e293_2944) | | |  |  |  | Audit Committee report  Page [110](#i47a6727b8bad4fe28addb4dae187e293_2965) | | | | | |  |  |  | Remuneration report  Page [122](#i47a6727b8bad4fe28addb4dae187e293_5497558142173) | | | | |  |  |  | Sustainable Development  Committee report  Page [119](#i47a6727b8bad4fe28addb4dae187e293_2986) | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Executive Committee | | | | | | | | | | | | | |  | Disclosure Committee | | | | | | | | | | | | | |
|  | Day-to-day management of the Group | | | | | | | | | | | | |  |  | Responsible for classifying and overseeing the prompt disclosure of inside  information and overseeing the creation of insider lists | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Company Secretary Jenny Hampshire | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | – Supports the Chair in the delivery of accurate  and timely information ahead of each meeting  – Ensures compliance with Board and  committee procedures | | | | | | | |  |  | – Acts as a key point of contact for the Chair and  non‑executive directors  – Provides support to the  Board  and committees,  and advises on governance, statutory and  regulatory requirements | | | | | | | | |  | – Provides advice on legal, governance and listing  requirements, in particular relating to continuing  obligations and directors’ duties | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 97 |
|  |  |  |

![DoR_mondi_brush_blue-violet-1-hires_1_crop.png]()

#### Board



#### activity

The key matters considered by the Board during the year are set out below. While this is not an exhaustive list, it provides insight into the

discussions of the Board and how it aims to promote the long-term success of the Group and achieve its key objectives. In addition to

the matters set out, each meeting includes a report from the Group  CEO providing an operational update; a report from the Group CFO

on the Group’s financial performance; an update on safety performance; and a report from the Company Secretary on recent

governance and regulatory matters.

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Strategy key | | |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | We drive value accretive  growth, sustainably |  | Drive performance  along the value chain |  | Invest in assets  with cost advantage |  | Inspire  our people |  | Partner with customers  for innovation |  |
|  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Topic |  | Activity |  |
|  | Operational  performance  Link to strategy    Stakeholders  impacted  – Investors  – Employees  – Customers |  | – Received regular updates from the Group CEO and detailed reports from the CEOs of the business units,  enabling the Board to monitor operational performance.  – Monitored the implementation of a number of large capital expenditure projects, including ongoing projects  at our mills in  Kuopio (Finland), Štětí (Czech Republic) and Świecie (Poland), and at a number of our  converting sites (see page [26](#i8bec3ed01d1c44dd980f5630c6205064_95) for more information).  – Received presentations in relation to pulp and paper technology developments, and detailed insights into  research and development activities, improving the Board’s knowledge and providing context for capital  investment decisions. |  |
|  | Strategy  formulation  and monitoring  Link to strategy    Stakeholders  impacted  – Investors  – Customers  – Communities |  | – Concluded a strategy review session resulting in continued support for Mondi’s strategic direction and  confidence that Mondi’s strategy is sustainable in the long term (see page [99](#ib23b84522ac84ca194b5a44e68b2897f_1-3-3-1-486963) for more information).  – Considered and approved the acquisition of the Hinton pulp mill (Canada), with the intention, subject to  pre‑engineering and permitting, to invest in the expansion of the mill, primarily in a new kraft paper machine  which will fully integrate our paper bag operations in the Americas and support growth. Stakeholder interests  were core to this decision, more details of which can be found on page [41](#i2eb1d609446c4463b20fb8dfc6eb8ad7_74314).  – In line with the decision taken in 2022 to divest the Group's Russian assets, approved the sale of the  Syktyvkar mill for a total cash consideration of RUB 80 billion. The sale was completed in October 2023,  concluding Mondi’s exit from Russia.  – Considered and approved a number of capital expenditure projects, including a €200 million investment  at our Duino mill (Italy) to convert the existing paper machine into a 420,000 tonne per annum recycled  containerboard machine, taking into account the sustainability impact of such investments and the interests  of Mondi’s key stakeholders (see page [26](#i47a6727b8bad4fe28addb4dae187e293_8748) for more information). |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 98 |
|  |  |  |

#### Corporate governance report

## Division of responsibilities

#### continued

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Topic |  | Activity |  |
|  | Financial  performance,  funding and  capital  Link to strategy    Stakeholders  impacted  – Investors |  | – Reviewed and approved the full- and half-year results and trading updates.  – Reviewed and approved the Mondi Group Integrated report and financial statements, ensuring it is fair,  balanced and understandable (see page [116](#id9ad3f422dd44a5da742e5e2ca0f2edb_0-0-13-2-475941) for more information).  – Considered dividend recommendations and declarations in light of the Group’s stated dividend policy.  This resulted in the decisions to pay an interim ordinary dividend for 2023 in September 2023 and to  recommend a final ordinary dividend for payment in May 2024 (see page [36](#iea498ba6d54a486cb963a85035279c8b_36046) for more information).  – Following completion of the sale of all our Russian operations, considered potential capital return options,  concluding that the net proceeds should be returned to shareholders by way of a special dividend, with  an associated share consolidation (see page [36](#iea498ba6d54a486cb963a85035279c8b_36046) for more information).  – Reviewed and approved the Group business plan for 2024–2026, including the budget for 2024, considering  assumptions made and the reasonableness of the plan and focusing on the operational overviews, cash flow  management and capital allocation.  – Annual reviews of the Group Treasury and Group Tax functions and performance, including funding, liquidity  and insurance. |  |
|  | Governance and  stakeholders  Link to strategy    Stakeholders  impacted  – Investors  – Employees  – Partners and  industry  associations  – Customers |  | – Reviewed the Group’s  corporate governance framework in light of governance and regulatory developments.  – Reviewed investor feedback following the full- and half-year results announcements.  – Considered the results of the customer satisfaction survey undertaken during the year, identifying the key  areas of focus and actions required.  – Reviewed the interests of key stakeholders, agreeing that the current stakeholder groups remain appropriate  (see pages [38](#i47a6727b8bad4fe28addb4dae187e293_2707)-[39](#ie80eb4a50b914975a4e8edba327f5926_1-1-1-2-489710) for more information).  – Reviewed the output from the Board evaluation process and agreed an action plan (see page [104](#if266c99031a146be8d7f4accd32f9a9f_0-0-5-3-489722) for  more information). |  |

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| 221114_RUZ_PM19_0563_crop.jpg | |  |  |  |  |  |  |
|  | Strategy review  The Board’s annual in-depth review  of Mondi’s strategy considered where  Mondi is today, its strategic focus,  options for future growth and detailed  business unit strategic initiatives.  At the forefront was whether the  strategy remains capable of delivering  Mondi’s purpose to contribute to  a better world by making innovative  packaging and paper solutions that  are sustainable by design.  The strategy review is never an isolated,  one-off review. The discussions of the  Board and its committees during the  previous 12 months provide important  context and insight to the deliberations,  with this annual in-depth review a  culmination of the work undertaken  by the Board throughout the year.  The existing strategy was reviewed  in the context of key demand drivers,  including developing macroeconomic  conditions, demand for sustainable  packaging and eCommerce. |  | Of particular focus were the growth  opportunities available to the Group,  including the Group’s pipeline of  new projects.  The Group’s principal risks were also  factored into the Board’s discussions, with  consideration given to whether there had  been any material changes in the Group’s  risk profile that might impact Mondi’s  strategy. Alongside this, the evolving  regulatory landscape, particularly across  Europe from a sustainability perspective,  was considered.  The Board ultimately confirmed its  continued support for Mondi’s strategic  direction, confirming the need to ensure  that sustainability continues to be at the  core of Mondi’s strategy. | |  |
|  |  |  | More information on Mondi’s strategy  can be found on pages [20](#i47a6727b8bad4fe28addb4dae187e293_2624)-[21](#ifeb9b1d4729d41d5a093f58dac7dfc15_11-6-2-2-466776). |  |
|  |  |  |  |
|  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 99 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Presentations from senior management | | | | |  |
|  | During the year, members of Mondi’s  senior management presented  to the Board on a variety of topics.  These presentations not only provide  insight into the business directly from  those on the ground but also support  the Board’s focus on succession  planning, allowing Board members  to hear from, speak to and get  to know potential future leaders.  Each of the business unit CEOs  provided updates on their areas  of responsibility within Mondi, focusing  on safety performance, market position  and dynamics, evolving customer  demands and financial performance  and people development. |  | The specific impacts on each business  of developing trends and key strategic  drivers were also reviewed, including  sustainability, eCommerce and  digitalisation. The other members  of the Executive Committee also  presented to the Board in relation  to their areas of responsibility.  These presentations included updates  on technology developments in  Mondi’s core manufacturing processes,  operational excellence and Mondi’s  strategy in respect of energy usage  and security. |  | In addition, the Group Head of Fibre  Sourcing presented Mondi’s  wood sourcing strategy, the Group  Head of Digital Excellence provided  an update on the Group’s digitalisation  journey, and the Group Communication  Director and Head of Public Affairs  provided insight into the Group’s  approach to public affairs.  The Group Heads of Tax and Treasury  also updated the Board on their current  focus areas.  These presentations provided insight  into the priorities of a number of  Mondi’s key stakeholders and current  risk areas, and formed the backdrop  to other discussions, including the  annual strategy review. |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Topic |  | Activity |  |
|  | Safety and  sustainability  Link to strategy    Stakeholders  impacted  – Employees  – Suppliers and  contractors  – Customers  – Our communities |  | – Monitored safety performance across the Group, including the number, type and severity of incidents. There  was particular focus on understanding the events that tragically resulted in a fatality at Mondi’s Ružomberok  mill (Slovakia) and the four life-altering injuries in our operations (see page [50](#i989e19b834f344c0aff2915d48a2e7d3_146686) for more information).  – Received updates on key sustainability regulatory and best practice developments from the Group Head  of Sustainable Development through the Sustainable Development Committee, and via regular business  unit reviews.  – Monitored the work of the Sustainable Development Committee, focusing in particular on progress  against Mondi’s MAP2030 sustainability commitments and the Group’s most material sustainability risks  and opportunities. A detailed explanation of the work of the Sustainable Development Committee can  be found on pages [119](#i47a6727b8bad4fe28addb4dae187e293_2986)-[121](#i6f6f8967ed114bb99dfbf771b4af9713_3-5-1-1-328026). |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 100 |
|  |  |  |

#### Corporate governance report

## Division of responsibilities

#### continued

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Topic |  | Activity |  |
|  | Risk  management  Link to strategy    Stakeholders  impacted  – Employees  – Customers  – Investors |  | – Reviewed the Group’s risk management processes, plan and risk appetite levels and internal controls, with  consideration of risk monitoring, activities to ensure risk mitigation and independent assurance processes.  This resulted in a number of changes, following consideration by the Audit Committee and approval by the  Board, including the removal of pandemic risk as a standalone risk (given its incorporation into our wider  employee and contractor health and safety risk), and the derating of a number of principal risks in light  of the mitigation measures in place and changes in external conditions (see page [71](#i47a6727b8bad4fe28addb4dae187e293_6603) for more information).  – Received half-yearly presentations on IT risks and cyber security (see page [111](#if6287605ad99484691214e11d522b0ea_276497) for more information).  – Reviewed the Group's insurances, ensuring an appropriate balance of risk between the Group and our  external insurers. |  |
|  | People and  culture  Link to strategy    Stakeholders  impacted  – Employees  – Customers  – Suppliers and  contractors |  | – Received updates from Sue Clark, through the Sustainable Development Committee, in her role as the  non‑executive director responsible for understanding the views of employees, providing insight into the  culture and key employee issues gained during site visits undertaken throughout the year (see pages  [92](#i749b46579a4249e1855257d2cf9393d9_4-1-1-3-472586)-[93](#i7e8411646eff4bc0adb55b69313ae28d_590831)  for more information).  – Reviewed reports received via  Mondi’s anonymous whistleblowing and grievance platform, SpeakOut  (see page [84](#i47a6727b8bad4fe28addb4dae187e293_5381) for more information).  – Reviewed and approved the Group’s Human Trafficking and Modern Slavery Statement. |  |
|  | Leadership  Link to strategy    Stakeholders  impacted  – Employees  – Investors |  | – Considered and approved the appointment of Anke Groth as an independent non-executive director (see page [107](#id233ee6df86d41d9af4900bb15639dcb_0-4-28-2-475377)  for more information).  – Considered and approved the appointment of a new Chief People Officer and their appointment as a member  of the Executive Committee with effect from April 2024.  – Agreed the appointment of Dominique Reiniche as Senior Independent Director with effect from the conclusion  of the 2023 AGM in response to the new Listing Rule requirement to have a woman in one of the senior positions  on the Board (see page [108](#i4e19d81f21fc44298a94587c44bbce82_375482) for more information).  – Monitored the work of the Nominations Committee in relation to succession and talent management plans,  particularly in relation to the Group CEO and CFO. |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 101 |
|  |  |  |

#### Induction, training

#### and development

Training and development are important

in ensuring the ongoing effectiveness

of the  Board and that we have the right

combination of skills and knowledge.

This begins with an induction for all

new directors. While there is an outline

induction programme in place, this is

discussed with each new director and is

tailored to meet any specific requirements.

The aim is to familiarise a new director with

the nature of the  Group’s business and

operations, highlighting the key challenges

and opportunities as well as the regulatory

environment in which the Group operates,

the key duties of the director, including

in relation to Section 172 and stakeholder

interests, and the culture and values of

the Group. All directors are given access

to an online director handbook containing

documents including key policies and the

terms of reference for each committee.

Details of the induction programme

for Anke Groth, who joined the Board

in April 2023, are provided below.

We also aim to ensure that existing

directors receive ongoing training and

development opportunities. We offer

the directors the opportunity to keep

up to date with regulatory, governance

and economic changes as well as

developments in the markets and

environments in which we operate. We do

this through Board presentations, both from

internal and external presenters, site visits,

updates aimed at providing wider context

to the Group’s activities and position in

the market, and regular reports from the

Company Secretary highlighting developing

trends and future changes in governance

and regulation.

In addition, we aim to hold at least

one Board meeting a year at one of

Mondi’s sites, giving Board members the

opportunity to refresh and develop their

understanding of Mondi’s operations.

Further details can be found on page [94](#ia559d9ce3a2a4113b410c2cb911d3d05_1-1-5-1-472681).

Each director can discuss any development

needs with the Chair at any time, but the

opportunity arises more formally during the

annual review process, when discussions

regarding individual performance are held.

In addition, all directors are encouraged

to strengthen and refresh their knowledge

by attending any workshops, seminars

and courses relevant to their respective

roles, and details of the availability

of these are provided regularly.

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Director induction process | | | | | | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  | Inform |  |  | Engage |  |  |  | Support |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | Anke Groth's  induction  Following Anke's appointment to the  Board in April 2023, a number of  meetings and briefings were organised  in order to provide her with a detailed  overview of the Group, and to give  her the insight and knowledge  required to make as full and effective  a contribution as possible. | |  | Meetings were held with each of the  Executive Committee members,  allowing Anke the opportunity to gain  an understanding of the Group's business  units, culture, risk areas and priorities,  and providing the context necessary  for matters discussed at Board and  committee meetings. Anke also met  with the Company Secretary early  on in the induction process, with the  session covering matters including  directors' duties, share dealing  procedures, Mondi's approach to  managing conflicts of interest and  key policies.  Given the increasing focus on  sustainability and the relevance  of such matters to Board decisions,  meetings were also arranged with  the Group Heads of Sustainable  Development and Safety & Health. | | |  | In addition, Anke met with other  members of senior management  during an induction visit to Mondi's  Group office in Vienna (Austria),  including the Group Controller and  Group Head of Internal Audit, both  directly relevant to her membership  of the Audit Committee, the  Chief Information Officer, given the  continued focus on cyber security  across the organisation, and Mondi's  General Counsel.  Site visits are also a crucial element  of the induction process, and early  on in her tenure, Anke was able to visit  Mondi's Świecie mill (Poland) as part  of the wider Board visit in June 2023.  Further information can be found  on page [94](#ia559d9ce3a2a4113b410c2cb911d3d05_1-1-5-1-472681). Anke also visited Mondi's  Korneuburg plant (Austria) and Štětí  mill (Czech Republic) following her  appointment. | |  |
|  |  | |  |  | |  |  |  | |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 102 |
|  |  |  |

#### Corporate governance report

## Composition, succession and evaluation

![A GROTH 0002_crop.png]()

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Board evaluation process | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Year 1 (2022)  External assessment  – Independent external evaluation  firm selected and appointed.  – Scope refined and agreed between  the Chair and evaluation firm.  – Questionnaires issued and one-  to-one interviews undertaken by  the evaluator with each director  and the Company Secretary.  – One-to-one calls between  the Chair and each director  to discuss the results.  – Results and actions discussed by  the Nominations Committee and  action plan agreed by the Board. | |  |  |  | Years 2 and 3 (2023 and 2024)  Internal assessments  – Outcome from previous evaluation  and progress against each action  reviewed.  – External evaluation firm used for  the external evaluation appointed  to facilitate internal assessments,  providing continuity. | | |  |  | – Questionnaires issued to  directors, Company Secretary  and other regular Board  attendees.  – One-to-one calls between Chair  and directors to discuss results.  – Results and actions discussed by  the Nominations Committee and  action plan agreed by the Board. | |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |

In line with best practice, in 2022 we conducted an external Board evaluation. The process was facilitated by Lintstock, an independent

governance advisory firm. Below are the key actions reported last year, and details of the progress we have made against those actions:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  | Action agreed from 2022 evaluation |  | Progress achieved |
|  | To expand the Board's regular reviews of the business units  to include greater detail concerning consumer trends and their  impact on Mondi's customers. |  | Each of the business unit reviews undertaken by the Board in  2023 has included discussion of key consumer trends, including  eCommerce and sustainability, the impact of these trends on  demand and market dynamics, and the resulting actions being  taken in response, including the impact on the types of products  being produced. |
|  | To expand the scope of the Board's review of the development  of major competitors and their strategies. |  | Relevant deep dives have been introduced into the rolling agenda. |
|  | To increase the Board's visibility and understanding of key  regulatory developments, particularly in relation to sustainability. |  | Regular regulatory updates from a sustainability perspective are  provided at meetings of the Sustainable Development Committee,  which all Board members usually attend. Updates during 2023  have included a detailed overview of the Packaging & Packaging  Waste Regulation. An update on Mondi’s approach to public  affairs and the developing EU regulatory landscape in particular  was also provided to the Board in December 2023. |
|  | To maintain the strong focus on diversity and inclusion, with the  Board to review steps taken to operationalise the tools that have  been developed across the business to support improvements  in this regard. |  | A review of diversity and inclusion initiatives, and developments  and trends in a range of diversity statistics, was undertaken in  June 2023 and remains high on the Board's agenda. More details  can be found on pages [107](#id233ee6df86d41d9af4900bb15639dcb_0-4-28-2-475377)-[109](#i5ea58ed7a01b4ae8a1791f861d018ea2_7-5-1-1-358049). |
|  | To continue to give in-depth consideration to executive director  succession. |  | Detailed discussions were undertaken during the year to consider  potential internal successors for the Group CEO and CFO, their  development needs, and actions that can be taken to provide  further progression and development opportunities. Succession  plans for other key roles were also reviewed. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 103 |
|  |  |  |

![Purple_Tint_arrow_down.svg]()

![Purple_Tint_arrow_up.svg]()

![Purple_Tint_arrow_left.svg]()

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| 2023 Board evaluation process  In 2023, the Board took the decision to undertake a questionnaire-based evaluation  facilitated by Lintstock. Given Lintstock carried out Mondi's external evaluation in 2022,  it was agreed that the follow-up support and insight Lintstock could offer would be  valuable. Lintstock has no other connection to Mondi beyond the provision of board  evaluation services. Anonymity was ensured throughout the process to allow for the  provision of candid and open feedback by participants. The evaluation process was led  by Philip Yea in conjunction with the Nominations Committee and is set out below.  The review of the Chair was led by Dominique Reiniche as Senior Independent Director. | | |  | As a result of the process, the Board  concluded that it continues to operate  in an effective manner, benefitting from  positive dynamics, strong engagement  and relationships with senior  management and a boardroom culture  that allows for open and constructive  challenge. Each director continues to  contribute effectively to the Board.  There was consensus around the  priorities for the forthcoming year, and  the key actions agreed by the Board  as a result of the evaluation include  the following:  – to arrange for the Board to hear  directly from major customers,  to supplement the insight already  provided to the Board in respect  of customer requirements through  presentations from management;  – to further develop and enhance the  Nominations Committee’s approach  to succession planning, particularly  in respect of the executive directors,  with support from the newly appointed  Chief People Officer; and  – to continue to identify opportunities  for interaction between the Board and  senior management on a less formal  basis, with the aim of supporting  succession planning discussions and  giving Board members deeper insight  into the organisation from both an  operational and cultural perspective.  The Board considers that it continues  to benefit from the annual review  process, the results of which help  guide the future focus of meeting  agendas and behaviours. |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |  |  |  |
| Engagement | | |  |  |
| Decision to engage Lintstock to conduct the evaluation | | |  |  |
|  | | |  |  |
| Questionnaires completed | | |  |  |
| Questionnaires relating to the Board, committees and individual performance  completed by directors, the Company Secretary and other regular attendees  at Board  and committee meetings | | |  |  |
|  | | |  |  |
| Report issued | | |  |  |
| Detailed report from Lintstock setting out the questionnaire findings issued and  reviewed with the Chair | | |  |  |
|  | | |  |  |
| One-to-one calls with directors | | |  |  |
| One-to-one calls undertaken by the Chair with each director to discuss findings  and individual performance and findings related to individual committees reviewed  and considered by committee chairs | | |  |  |
|  | | |  |  |
| Report considered | | |  |  |
| Report considered at a meeting of the Nominations Committee | | |  |  |
|  | | |  |  |
| Action plan recommended | | |  |  |
| Action plan recommended by the Nominations Committee and agreed by the Board | | |  |  |
|  |  |  |  |  |
|  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 104 |
|  |  |  |

#### Corporate governance report

## Composition, succession and evaluation

#### continued

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| WEB23_Philip Yea 2_content_aware_retouched_crop.png | | | | |  | Dear Shareholder  I am pleased to present this report,  which provides an overview of the areas  of focus for the committee during  the year, and those for the year ahead,  as well as its key activities and the  framework within which it operates.  Composition  To ensure the committee has access  to as wide a range of knowledge  and experience as possible, each  non‑executive director is a member. In  line with this practice, Anke Groth joined  the committee upon her appointment  to the Board in April 2023.  Areas of focus  The key focus of the committee is  to ensure that the composition of the Board  and its committees is appropriate and  relevant to the Group and that the Board  continues to be in the best position to  deliver the Group’s strategy, and to ensure  that the business operates in line with  Mondi’s purpose, culture and values.  This includes overseeing Board diversity  and succession matters.  In April 2023, following a recruitment  process conducted through an external  search agency, and in line with our  commitment to strengthen the level of  relevant financial experience on the Audit  Committee, Anke Groth joined the Board  as an independent non-executive director.  Anke was appointed to the Audit Committee  at the same time, and I am pleased to  confirm that Anke has brought valuable  insight and experience to discussions.  In preparation for Dominique Reiniche  completing her nine-year term on the  Board during 2024, the committee has  now turned its attention to succession  planning for Dominique and how the  Board and committee memberships  may need to evolve as a result. This  will continue to be a priority for the  committee in 2024. There is particular  focus on Dominique's role as both  Senior Independent Director and  Chair of the Sustainable Development  Committee and the skills and experience  required to fulfil these roles. While the  committee remains confident that  the Board has the broad range of  knowledge and perspectives it needs,  it is constantly assessing ways in which  to further strengthen its composition  to ensure it has the capability to fulfil  its responsibilities. |
|  |  |  |  |  |  |
|  | Philip Yea  Chair of the Nominations Committee | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | While the committee remains confident that the  Board has the broad range of knowledge and  perspectives it needs, it is constantly assessing ways  in which to further strengthen its composition to  ensure it has the capability to fulfil its responsibilities. | | |  |  |
|  |  |  |  |  |  |
|  | Composition and attendance1 | | |  |  |
|  | Members throughout the year | Committee member since | Meeting attendance |  |  |
|  | Philip Yea, Chair | April 2020 | 4/4 |  |  |
|  | Svein Richard Brandtzaeg | April 2021 | 4/4 |  |  |
|  | Sue Clark2 | April 2021 | 3/4 |  |  |
|  | Anke Groth3 | April 2023 | 3/3 |  |  |
|  | Saki Macozoma | May 2022 | 4/4 |  |  |
|  | Dominique Reiniche | October 2015 | 4/4 |  |  |
|  | Dame Angela Strank | April 2021 | 4/4 |  |  |
|  | Stephen Young | May 2018 | 4/4 |  |  |
|  |  |  |  |  |  |
|  | 1 The maximum number of meetings held during the year that each director could attend  is shown next to the number attended.  2 Sue Clark was unable to attend one meeting during the year due to an unavoidable  commitment.  3 Anke Groth joined the committee on 1 April 2023. Anke attended all meetings following  her appointment. | | |  |  |
|  |  |  |  |  |  |
|  | Other regular attendees | | |  |  |
|  | – Group CEO | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 105 |
|  |  |  |

#### Corporate governance report

## Nominations Committee

Alongside this, the committee continued

to consider succession planning in relation

to the Group CEO and CFO specifically,

as well as those in key management and

operational roles. While the committee

routinely reviews succession plans in this

regard, it is particularly focused on actions

required in the short and medium term

to develop and prepare potential internal

candidates for some of these critical roles.

While external candidates will always

be considered where appropriate, there

is a clear desire to identify opportunities

for Mondi employees to progress, and

to provide the support and encouragement

they need to succeed within the

organisation. Development actions discussed

by the committee included mentoring and

coaching, rotation into other roles within

the Group and external training.

The Group's commitment to increasing

levels of diversity across the organisation

was a key factor in these succession

planning discussions, with the committee

paying particular attention to where there

might be opportunities to create a more

diverse pipeline up to some of the key

roles discussed. While it is clear that there

is still a long way to go in this respect, and

that the MAP2030 target of 30% women

across the organisation by 2030 remains

challenging, it was encouraging to see the

significant work being undertaken in this

regard through the presentations given to

the Sustainable Development Committee.

More information can be found on pages

[107](#id233ee6df86d41d9af4900bb15639dcb_0-4-28-2-475377)-[109](#i5ea58ed7a01b4ae8a1791f861d018ea2_7-5-1-1-358049). These insights will continue to

feed into the committee's succession

planning discussions in 2024.

A more detailed overview of the key

matters considered by the committee

during the year can be found below.

#### Committee effectiveness

The committee’s performance and

effectiveness were reviewed as part

of the Board evaluation undertaken

during the year, more details of which

can be found on page  [104](#if266c99031a146be8d7f4accd32f9a9f_0-0-5-3-489722). I am pleased

to confirm that the committee is seen to

be operating effectively and fulfilling the

duties delegated to it by the Board.

#### Philip Yea

Chair, Nominations Committee

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Nominations Committee activity  Set out below are some of the key matters addressed by the committee. | | | | |  |
|  | Board and committee composition  – Following the conclusion of a  recruitment process facilitated by an  external search agency, recommended  to the Board the appointment of  Anke Groth as an independent  non‑executive director.  – Considered and recommended to  the Board the proposed appointment  of a new Chief People Officer and  their appointment as a member of  the Executive Committee with effect  from April 2024.  – Reviewed the continued independence  of each non-executive director,  including consideration of their term  in office and any potential conflicts  of interest, concluding that each  non‑executive director remained  independent.  – Reviewed the time commitment  required of each non-executive  director, concluding that all  non‑executive directors continued  to devote appropriate time to fulfil  their duties to Mondi. |  | Succession planning  – Considered the Board’s succession  plans, in relation to existing directors,  the requirements of the Board and  committees in the longer term and  the skills and experience required  to support the Group’s future  growth strategy.  – Reviewed the succession plans in  place for members of the Executive  Committee and other key positions,  both in the short and long term.  – Discussed the new Listing Rule  requirement for boards to disclose  whether they have met the target of  having a woman in the role of CEO,  CFO, Chair or Senior Independent  Director, with the committee  considering the actions required to  achieve this and the views of Mondi’s  major shareholders. This resulted in  a recommendation to the  Board that  Dominique Reiniche be appointed  as Senior Independent Director with  effect from the conclusion of the  2023 AGM. |  | Board evaluation  – Monitored progress against the agreed  action plan from the prior year’s  evaluation process (see page  [103](#i7ca0b867de2a47b4ad0a5cf0e7ce20e0_0-0-1-14-432407) for  more information).  – Considered and agreed the process  for the 2023 internal evaluation of  the Board, committees and individual  directors, to be facilitated by Lintstock  (see page [104](#if266c99031a146be8d7f4accd32f9a9f_0-0-5-3-489722) for more information).  Corporate governance and  other matters  – Considered, and recommended to the  Board, the re-election of the directors  at the AGM.  – Reviewed the committee’s terms  of reference, performance and work  programme for  2024.  – Considered, and agreed to, the  committee’s report for inclusion  in the Group’s Integrated report  and financial statements. |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 106 |
|  |  |  |

#### Corporate governance report

## Nominations Committee

#### continued

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Board appointments  Mondi  has a rigorous and transparent process in place for the recruitment and  appointment of directors, led by the committee. This process was followed in relation  to the appointment of  Anke Groth as an independent non-executive director in 2023  and is set out below. | | |  | Russell Reynolds Associates, an external  search agency and signatory to the  Voluntary Code of Conduct for Executive  Search Firms, was engaged to assist  with the recruitment of an additional  independent non-executive director,  following the retirement of Tanya Fratto  in May 2022. This led to the  appointment of Anke Groth with  effect from 1 April 2023.  Russell Reynolds Associates does not  provide any services to the Mondi Group  other than Board-level recruitment.  On appointment, each non-executive  director receives a letter of appointment  setting out, among other things, their  term of appointment, the expected  time commitment for their duties to  Mondi and details of any committee  memberships. Non-executive directors  are initially appointed for a three-year  term, subject to annual re-election by  shareholders, after which a review is  undertaken to consider renewal of the  term for a further three years.  Diversity and inclusion  Mondi has a well-established  commitment to encouraging and  promoting diversity and inclusion (D&I).  This is reflected in our behaviour and  in our culture and values.  As a global organisation operating in more  than 30 countries, D&I is integral to how  we do business. We are committed to  creating an inclusive working environment  that is fair and non‑discriminatory, from  recruitment and people development  to reward and our approach to  talent management.  The Group’s D&I Policy, which was  approved by the Board, and updated  in January 2024, is intended to help  us meet these goals and support the  development of a diverse workforce.  It sets out guidelines for matters such  as recruitment, the use of search firms,  succession and annual reviews. You can  read the full policy on our website. | |  |
|  |  |
|  |  |
| Key requirements agreed and candidate specification drawn up | | |  |  |
| taking into account succession planning requirements, gender, ethnic and other  forms of diversity and the key skills and experience required to strengthen  Board and committee capabilities and to ensure they have the competencies  necessary to manage the impacts of the business | | |  |  |
|  | | |  |  |
| External independent search agent engaged | | |  |  |
| to assist with the selection process | | |  |  |
|  | | |  |  |
| Search conducted and longlist of potential  candidates provided for consideration | | |  |  |
| which should include male and female candidates from a variety of backgrounds | | |  |  |
|  | | |  |  |
| Shortlist chosen from longlist | | |  |  |
| for interview by the Chair and at least one other appropriate director | | |  |  |
|  | | |  |  |
| Shortlist reduced to an agreed number of candidates | | |  |  |
| for interview by other executive and non-executive directors | | |  |  |
|  | | |  |  |
| Nominations Committee considers the preferred candidates | | |  |  |
| including ability to commit time to the role, confirmation that each individual  would be deemed independent on appointment and the likely views of key  stakeholders, including major shareholders and regulatory bodies and in relation  to financial, sustainability, strategy and risk management experience.  A recommendation is made to the Board | | |  |  |
|  | | |  |  |
| Board considers the recommendation | | |  |  |
| and whether to proceed with the appointment | | |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  | The policy can be found on  Mondi’s website  [www.mondigroup.com/en/sustainability/](https://www.mondigroup.com/sustainability/approach/governance)  [governance-of-sustainability](https://www.mondigroup.com/sustainability/approach/governance) |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 107 |
|  |  |  |

#### Diversity and inclusion

#### continued

Key elements of the policy include:

At

#### Board

 and committee level:

– The Board supports the

recommendations and targets outlined

in the FTSE Women Leaders Review,

and is committed to ensuring gender

diversity on the Board and its

committees, and among the Executive

Committee and its direct reports.

– The Board supports the Parker Review

principles in relation to ethnic diversity

on boards and among senior

management.

– For Board appointments, we will, where

possible, engage executive search firms

signed up to the Voluntary Code of

Conduct for Executive Search Firms.

– Search firms will be asked to include

a sufficient number of qualified female

candidates and candidates from a variety

of ethnic backgrounds.

– At least annually, the Nominations

Committee will review succession plans

for the Board, Executive Committee

and other senior managers in light

of Group D&I levels, skills, experience

and diversity requirements.

– Mondi commits to the UN ‘Women

Empowerment Principles’.

At employee level:

– Recruitment activities are aligned with

our D&I Policy and applicable legislation

in jurisdictions in which we operate,

including to promote diversity of all types

and to ensure fair and non-discriminatory

working practices.

– We aim to ensure that a pipeline

of diverse candidates is considered

during succession planning.

– We aim to ensure that the nationalities

of candidates at long and shortlist stages

are appropriately representative of our

international footprint, subject to the

availability of suitable candidates.

– We aim to ensure fair and equal training

and development opportunities.

– We set targets where meaningful

and report on them as appropriate.

While appointments at all levels will

continue to be made based on skill and

ability, it is clear that all forms of diversity

are key to ensuring that we have the right

mix of backgrounds, knowledge and

experience to meet our future business

needs and to manage the impacts of

our business. D&I is therefore central

to our succession planning discussions

and is critical to the long-term sustainable

success of our business. Additional

information on the specific process

followed for Board-level appointments

can be found on page [107](#id233ee6df86d41d9af4900bb15639dcb_0-4-28-2-475377).

In 2023, we reported to the FTSE Women

Leaders Review that as at 31 October 2023,

we had 17% female representation on our

Executive Committee and 30% in the

direct reports to the Executive Committee,

giving a combined total of 27%. As at

31 December 2023, our combined total

had marginally increased to 28%. While the

percentage of women on the Executive

Committee and in its direct reports has

increased compared to 2022 (2022: 25%),

indicating we are moving in the right

direction, we are not where we would

like to be. We have a diverse pool of

high‑calibre employees who have been

identified as having the potential to be

appointed to Executive Committee roles

in the future and every effort is being

made to prepare these employees for

progression within Mondi. This is a key

focus during the committee's succession

planning discussions. The percentage of

women on the Executive Committee will

increase from 17% to 29% when our new

Chief People Officer joins in April 2024.

As at 31 December 2023, Mondi was in

compliance with the diversity targets set

out in Listing Rule 9.8.6(R)(9). There were

four female directors, representing 40%

of the composition of the Board, and

one director from an ethnic minority

background. Dominique Reiniche was

appointed as Senior Independent Director

in May 2023, satisfying the requirement

for one of the senior positions on the

Board to be held by a woman. Mondi

remained in compliance with the relevant

targets at the date of this report.

More detailed information relating to the

gender and ethnic diversity of Mondi’s

Board and executive management can be

found in the tables on page [109](#i5ea58ed7a01b4ae8a1791f861d018ea2_7-5-1-1-358049). The data

is provided in the form specified under

Listing Rule 9.8.6(R)(10) and was collected

directly from the individuals concerned.

In line with the Listing Rule definition,

'executive management' in this case

consists of Mondi's Executive Committee

members and the Company Secretary.

During 2023, we also reported to the

Parker Review that Mondi was in

compliance with the existing target of

having at least one ethnic minority director

on the Board. Mondi is fully supportive of

the objectives of the Parker Review and

the ambition to improve the diversity of

businesses. However, as a new initiative for

2023, the Parker Review has also requested

companies to set, and in due course report

progress against, an internal target in

relation to the ethnic diversity of our senior

management population. The Board has

carefully considered this new initiative

and, for a number of practical reasons,

will not be reporting a target, but instead

will continue to promote the recruitment

and development of a diverse workforce

through programmes suited to the

locations where we operate.

Mondi is a global organisation, with only

around 50 of our 22,000 people based

in the UK. The definition of 'ethnic minority'

used in the UK, and by the Parker Review,

is not appropriate for every country

in which we operate, with different

countries applying different definitions.

The availability of reliable census data in

relation to ethnicity (as defined in the UK

and by the Parker Review) also varies

significantly by country, with limited or no

reliable data available in some of our largest

jurisdictions. This means that setting

a realistic target reflecting the ethnic

make‑up of the populations from which we

draw our employees is not practical. Legal

restrictions around the collection of data

relating to the ethnicity of our employees

also exist in a number of the more

significant countries in which we operate.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 108 |
|  |  |  |

#### Corporate governance report

## Nominations Committee

#### continued

Instead, we continue to focus on promoting

all forms of diversity, including ethnicity,

and inclusiveness in order to build a diverse

pipeline up to senior management and

Board level. There are a number of ongoing

initiatives in this respect, many of which are

implemented at a local level to allow them

to be tailored to specific circumstances

and country requirements. Notably, in

South Africa, we have taken active steps

to meet the requirements of Broad-Based

Black Economic Empowerment (BBBEE),

including establishing transformation

committees in our South African operations

to allow our employees to discuss equity

and training-related issues and ideas.

|  |  |
| --- | --- |
|  |  |
|  | Our current BBBEE certificate can be  found on our website  [www.mondigroup.com/investors/](https://www.mondigroup.com/investors/corporate-governance/regulatory-reports)  [corporate-governance/regulatory-](https://www.mondigroup.com/investors/corporate-governance/regulatory-reports)  [reports](https://www.mondigroup.com/investors/corporate-governance/regulatory-reports) |

More broadly, a governance framework

around D&I has been established in order

to focus our efforts. The Group D&I

function, forming part of the Group HR

function, supports the D&I agenda across

Mondi's operations, while a D&I Steering

Committee provides policy oversight

and facilitates the necessary stakeholder

engagement to ensure D&I is firmly

embedded across the organisation.

Mondi’s approach to D&I is focused on

community development, as well as creating

cultures that are welcoming and foster

belonging. In line with this, initiatives

have been started, such as the Curious

Community, a group consisting of more

than 350 members from 27 countries

who span all levels of seniority. It provides

a safe space for employees to connect,

learn and find inspiration and ideas to

implement at a local level. Key activities

in 2023 included monthly virtual events

with speakers, discussions relating to

a broad range of topics and listening

and reflection exercises.

We offer a broad range of leadership

development programmes and initiatives,

and we have made D&I a part of all

of them. Through training, coaching,

mentoring and reverse mentoring

programmes, we support our female

talent in their development and growth

throughout their careers.

In support of our commitment to D&I, a D&I

target is included in the Mondi Action Plan

2030 (MAP2030), and we have committed

to providing purposeful employment for all,

in a diverse and inclusive workplace.

Progress is measured by the Purposeful

Workplace Index and Inclusiveness Index

scores in our global Employee Survey

(each to reach 90% by 2030) and by the

overall percentage of women that we

employ across Mondi (to reach a minimum

of 30% women globally by 2030, against

a 2020 baseline of 21%). In many of the

countries in which we operate, a cultural

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Gender identity/sex of members of the Board and executive management  as at 31 December 20231 | | | | | |
|  | Board  members | Percentage  of the Board | Senior  Board  positions  (CEO, CFO,  SID and Chair) | Executive  management | Percentage  of executive  management |
| Men | 6 | 60% | 3 | 5 | 71% |
| Women | 4 | 40% | 1 | 2 | 29% |
| Not specified/prefer not to say | — | —% | — | — | —% |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Ethnic background of members of the Board and executive management  as at 31 December 20231 | | | | | |
|  | Board  members | Percentage  of the Board | Senior Board  positions  (CEO, CFO,  SID and Chair) | Executive  management | Percentage  of executive  management |
| White British or other White  (including minority White  groups) | 9 | 90% | 4 | 7 | 100% |
| Mixed/multiple ethnic groups | — | —% | — | — | —% |
| Asian/Asian British | — | —% | — | — | —% |
| Black/African/Caribbean/  Black British | 1 | 10% | — | — | —% |
| Other ethnic group, inc. Arab | — | —% | — | — | —% |
| Not specified/prefer not to say | — | —% | — | — | —% |
| 1 In line with the Listing Rule definition, 'executive management' consists of Mondi's Executive Committee members and  the Company Secretary. | | | | | |

shift is required, with education and

a change of mindset needed, as well

as changes to underlying recruitment

processes, to remove the barriers that

discourage women from entering our

workforce. We therefore acknowledge that

meeting the target of 30% women will be

challenging. The Board and the organisation

as a whole are committed, however,

to making the changes required. Read

more about our MAP2030 commitments

and our progress in this regard on page [49](#i989e19b834f344c0aff2915d48a2e7d3_146790).

While it is recognised that there are many

challenges and there is more work to do,

management and the Board are fully

committed to our diversity journey and

we believe that our ambitious goals will

be achieved by working across the

business and engaging our stakeholders

on our 2030 commitments, sharing good

practice, and collaborating both internally

and externally.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 109 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| WEB23_Stephen Young 2_retouched_crop.png | | | | |  | Dear Shareholder  I am pleased to present this report,  which provides an overview of the areas  of focus for the committee during the  year, as well as its key activities and the  framework within which it operates.  Composition  In April 2023, Anke Groth was appointed  as a member of the committee. Anke  has significant financial and commercial  experience, making her well placed to  provide valuable knowledge and insight  to the committee.  The Board remains comfortable that  the committee members have the  appropriate knowledge, skills and  experience to fulfil the duties delegated  to the committee. Each member  has appropriate knowledge and  understanding of financial matters  and commercial expertise gained from  industries with similar manufacturing,  engineering and technology-focused  international operations, to give the  committee as a whole competence  relevant to the sector in which the  Group operates.  We continue to keep the composition  of the committee under review to ensure  that, in the long term, it continues to have  the breadth of knowledge it requires.  Areas of focus  The committee’s primary responsibilities  are to oversee the Group’s corporate  financial reporting, including the  relationship with the external auditor,  to assist the Board with any judgements  required and to monitor the effectiveness  of the Group's risk management  processes. These remained the key focus  areas of the committee during the year. |
|  |  |  |  |  |  |
|  | Stephen Young  Chair of the Audit Committee | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | The committee continued to monitor the approach to  risk management, and the identification, assessment  and mitigation of the Group's principal risks. It was  particularly focused on the appetite level for each risk,  the actual risk exposure in each case and whether any  actions were required to close any gaps. | | |  |  |
|  |  |  |  |  |  |
|  | Composition and attendance1 | | |  |  |
|  | Members throughout the year | Committee member since | Meeting attendance |  |  |
|  | Stephen Young, Chair2 | May 2018 | 5/5 |  |  |
|  | Svein Richard Brandtzaeg | April 2021 | 5/5 |  |  |
|  | Sue Clark | April 2021 | 5/5 |  |  |
|  | Anke Groth3 | April 2023 | 4/4 |  |  |
|  | Saki Macozoma | May 2022 | 5/5 |  |  |
|  |  |  |  |  |  |
|  | 1 The maximum number of meetings held during the year that each director could attend  is shown next to the number attended.  2 Stephen Young satisfies the requirement for the committee to have a member with  recent and relevant financial experience given his previous role as Group Finance Director  at Meggitt plc and the other commercial accounting and finance roles he has held during  his career. Stephen is a member of the Chartered Institute of Management Accountants.  3 Anke Groth joined the committee on 1 April 2023. Anke attended all meetings following  her appointment. | | |  |  |
|  |  |  |  |  |  |
|  | Other regular attendees | | |  |  |
|  | – Group CEO  – Group CFO  – Chair and non-executive directors who are not members  of the committee  – Group Controller  – Group Head of Internal Audit  – Representatives from PricewaterhouseCoopers LLP  as external auditor | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 110 |
|  |  |  |

#### Corporate governance report

## Audit Committee

#### Areas of focus

#### continued

In particular, the committee continued

to monitor the accounting implications

of the  Board’s decision in 2022 to divest

the Group’s Russian assets and the

continuation and conclusion of the sales

process in 2023.

In the prior year, after consideration of the

detailed accounting rules, and with input

from management and Mondi’s external

auditor, PricewaterhouseCoopers LLP

(PwC), it was concluded in June 2022

that Mondi retained control of the

Russian businesses, resulting in continued

consolidation of the businesses, and that

they should be classified as held for sale

and, as a separate major geography, also

presented as discontinued operations.

The committee remained comfortable

that these conclusions were appropriate

until completion of the sale of the

Russian assets, with the sale of the three

packaging converting operations completed

in June 2023 and the Syktyvkar mill

in October 2023. The committee also

concluded, prior to completion of the

sale of the Syktyvkar mill, that in light of

developments relating to the sale process

at the time, the assets of the Syktyvkar mill

in the six months to 30 June 2023 should

be impaired. A more detailed explanation

of the accounting treatment applied can

be found on pages [206](#i39c735e7b1164ae2958cc4d70ff33c27_16065)-[209](#i39c735e7b1164ae2958cc4d70ff33c27_79444).

The committee was required to consider

a number of other critical accounting

judgements during the year, including in

respect of the acquisition of the Duino mill

(Italy) in January 2023, and the continued

impact of hyperinflation in Türkiye. A more

detailed explanation of the significant

issues considered by the committee in

respect of the financial statements can

be found on pages [113](#i47a6727b8bad4fe28addb4dae187e293_5496)-115.

The continued evolution of the Group's

Internal Audit function following the

appointment of a new Group Head of

Internal Audit towards the end of 2022 was

also high on the committee's agenda during

the year. While the committee has always

been satisfied with the effectiveness of the

Internal Audit function, the appointment

represented an opportunity to further

develop the function to ensure it remains

fit for purpose and is in the best position

possible to support the management of

the Group's risks and the achievement

of our strategy in the long term.

Developments have included the

appointment of relevant specialists to

the Internal Audit team, strengthening

the team's ability to respond to new and

evolving risks facing the Group, and

a refresh of the approach to reporting

to the committee, giving the committee

further comfort that the Internal Audit

function is focusing on key areas of risk

and responding appropriately to any issues

identified. More information relating to

Mondi's approach to internal audit can

be found on page [118](#i4ad441bc6e8047a28b1f1c484935c603_4794).

Cyber security remained a notable focus

for the committee during the year, given

the increasing number and sophistication

of the methods being employed by cyber

attackers. The committee continued to

receive half-yearly updates from the

Chief Information Officer covering matters

including measures taken in response to

the evolving risk landscape, the findings

of internal and external audits of Mondi's

IT infrastructure and the ongoing

strengthening and development of Mondi's

cyber defences. The Group continues

to undertake significant work in this regard

and the committee was pleased to

hear that external testing of Mondi’s

infrastructure, which is undertaken regularly,

indicated that the measures we have in

place remain effective and robust in this

developing landscape. More information

on Mondi’s approach to cyber security

can be found on page [79](#i0774f734fb124eedadc42c59522353b7_5-2-1-3-475028).

Alongside this, the committee continued to

monitor the approach to risk management,

and the identification, assessment and

mitigation of the Group's principal risks.

It particularly focused on the appetite level

for each risk, the actual risk exposure in

each case and whether any actions were

required to close any gaps that might exist.

After detailed discussion in this regard,

the committee was comfortable that there

are robust processes in place to identify,

measure and manage the Group's risk

exposure. More information relating to

Mondi's risk management framework can

be found on pages [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[70](#i84a00851d50b4e61a9c13ac6f75dac9e_2-3-1-1-370767).

A more detailed overview of the key

matters considered by the committee

during the year can be found on page [112](#i47a6727b8bad4fe28addb4dae187e293_5469).

This report also aims to provide the

disclosures required by the new Minimum

Standard for Audit Committees introduced

by the Financial Reporting Council during

2023, and to demonstrate how we have

complied with the Minimum Standard.

#### Committee effectiveness

The committee’s performance and

effectiveness were reviewed as part of the

Board evaluation undertaken during the

year, more details of which can be found

on page [104](#if266c99031a146be8d7f4accd32f9a9f_0-0-5-3-489722). I am pleased to confirm that

the committee is seen to be operating

effectively and fulfilling the duties

delegated to it by the Board.

#### Stephen Young

Chair, Audit Committee

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 111 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Audit Committee activity  Set out below are some of the key matters addressed by this committee. | | | | |  |
|  |  |  |  |  |  |  |
|  | Financial reporting  – Reviewed the integrity of all financial  announcements with input provided  by the Group CFO, the Group  Controlling team and PwC as  appropriate.  – Reviewed the  Mondi Group  Integrated report and financial  statements for tone and consistency,  agreed the application of critical  accounting policies and key  judgements, and considered whether  the report as a whole was fair,  balanced and understandable  (see page [116](#id9ad3f422dd44a5da742e5e2ca0f2edb_0-0-13-2-475941) for more information).  – Reviewed and discussed PwC’s  reports to the committee.  – Considered in detail the accounting  implications of the decision to divest  the Group’s Russian operations,  Mondi's withdrawal from the  agreement to sell the Syktyvkar mill  to Augment Investments Limited and  the ultimate disposal of the mill  to Sezar Invest LLC (see pages  [206](#i39c735e7b1164ae2958cc4d70ff33c27_16065)- [209](#i39c735e7b1164ae2958cc4d70ff33c27_79444) for more information).  – Considered the accounting  implications of the acquisition of the  Duino mill (Italy) (see page [202](#i40e0beffbeb247b18785b2da6bc493dd_45519) for  more information) and the impact of  hyperinflation in Türkiye (see page [172](#i47a6727b8bad4fe28addb4dae187e293_34)  for more information).  – Reviewed and agreed the accounting  policies to be applied for the year  ending 31 December 2023.  – Reviewed new accounting  pronouncements and any impact  for the Group’s financial reporting.  – Reviewed the going concern basis  of accounting and the longer-term  viability statement (see pages [80](#i47a6727b8bad4fe28addb4dae187e293_2816)-[81](#i3fce26f9c2c6487a8a912e195c1d5e31_111309)  for more information). |  | External audit matters  – Recommended to the Board that the  appointment of PwC for the 2023  audit be put to shareholders at the  Annual General Meeting.  – Reviewed the independence,  objectivity and effectiveness of PwC  (see page  [117](#ibab6d9a706e3430b8ab4564cc09afbf3_3-1-1-5-475950) for more information).  – Reviewed and approved the external  audit plan, taking account of the  scope, materiality and audit risks  and agreeing the audit fees.  – Reviewed and agreed the  engagement and representation  letters.  – Considered the implications of  Simon Morley's forthcoming rotation  as lead audit partner and agreed  the appointment of his replacement  for the 2024 audit (see page [117](#ibab6d9a706e3430b8ab4564cc09afbf3_3-1-1-5-475950)  for more information).  – Held two meetings with PwC without  management present; the committee  Chair also engaged regularly with  the lead audit partner.  Risk management and  internal controls  – Undertook a detailed review of the  Group’s risk management policy  and plan, risk appetite levels and  principal risks. This resulted in the  recommendation of changes to  the Board, including the removal  of pandemic risk as a standalone risk  (given its incorporation into our wider  employee and contractor health  and safety risk), and the derating of  a number of principal risks. Emerging  risks were also considered, with  a particular focus on the execution  of major capital expenditure projects  given  Mondi’s extensive capital  expenditure programme. Further  information can be found on page [71](#i47a6727b8bad4fe28addb4dae187e293_6603).  – Undertook a more in-depth review  of a number of the most significant  Group risks, with presentations  from relevant members of senior  management considering the level  of risk and the monitoring and  mitigation measures in place. |  | – Received half-yearly presentations  on IT risk management and cyber  security, focusing in particular on  key measures taken to continuously  strengthen Mondi’s protection  against IT risk and cyber attacks  and internal and external testing  undertaken to assess the robustness  of the IT infrastructure.  Internal audit matters  – Reviewed and agreed the internal  audit plan, confirming the focus on  key risk areas and adequate cover  of all material operations.  – Received reports from the Group  Head of Internal Audit (see page [118](#i4ad441bc6e8047a28b1f1c484935c603_4794)  for more information).  – Undertook a review of the  effectiveness of the Internal Audit  function (see page [118](#i4ad441bc6e8047a28b1f1c484935c603_4794) for more  information).  – Reviewed summaries of messages  from SpeakOut, providing insight into  the culture of the Group and issues  of particular concern to stakeholders.  – Held two meetings with the Group  Head of Internal Audit without  management present.  Governance and other  – Monitored the continued  implementation of those elements  of the  Group’s Code of Business  Ethics reserved for review by  the committee.  – Undertook the annual review of  Mondi's Business Integrity Policy,  which, among other things, outlines  Mondi's zero tolerance approach to  bribery and corruption.  – Reviewed the compliance risks faced  by the Group, including in relation  to competition compliance.  – Considered the implications of  proposed governance and audit  reform in the UK, particularly in  respect of internal controls.  – Reviewed the committee’s terms  of reference, performance and  work programme. |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 112 |
|  |  |  |

#### Corporate governance report

## Audit Committee

#### continued

#### Internal control

The Group’s internal control and risk management framework, embedded in all key operations, is designed to address all the significant

strategic, financial, operational and compliance risks that could undermine our ability to achieve our business objectives in the future and

is managed within risk tolerance levels defined by the Board. In accordance with the provisions of the UK Corporate Governance Code,

the Group has in place an internal control environment to protect the business from principal risks which have been identified.

Management is responsible for establishing and maintaining adequate internal controls over financial reporting and we have responsibility

for ensuring the effectiveness of these controls. Full details of Mondi’s internal control and risk management framework can be found

in the Strategic report on pages [69](#i816de67e575b4fc8bb04900680f66329_229639)-[70](#i84a00851d50b4e61a9c13ac6f75dac9e_2-3-1-1-370767).

The committee has reviewed the risk management process and the Group’s system of internal controls. The committee considers that

the system of internal controls operated effectively throughout the financial year and up to the date on which the financial statements

were signed.

#### Significant issues related to the financial statements

The committee has considered each of the following items based on discussions with, and submissions by, management and satisfied

itself as to the accounting treatment and presentation thereof. These significant items were discussed with the external auditor

during the planning stage and on completion of the audit.

The key considerations in relation to the 2023 financial statements were:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  | Matter considered |  | Action |
|  | Special items are those financial items which the Group  considers  should be separately disclosed on the face of the income  statement to assist in understanding the underlying financial  performance achieved by the Group  as special items affect  year‑on‑year comparability. The classification of an item as special  is based on materiality in the context of the current year’s financial  performance and generally must exceed €10 million. Subsequent  adjustments to items previously reported as special items  continue to be reflected as special items in future periods even  if they do not exceed the quantitative reporting threshold.  The net special item expense (before tax) for the year was €27  million (2022: income of €242 million), consisting of a closure of  a paper machine and streamlining of the capacity of the finishing  lines at the Neusiedler operations in Austria. Details of the special  items are included in note 3 of the financial statements. |  | The committee has:  – critically reviewed the item presented by management as being  special to ensure that the item is in line with the Group’s  accounting policy;  – considered both the quantification and presentation of the  special item;  – reviewed the adequacy of the description of the special item  in the financial statements and the Strategic report; and  – considered whether any significant transactions that were not  classified as special were appropriately classified in the financial  statements and appropriately described in the Strategic report. |
|  | On 12 January 2023, the Group completed the acquisition of the  Duino mill near Trieste (Italy) from the Burgo Group for total net  cash paid of €37 million. The purchase price allocation resulted  in a gain on bargain purchase of €2 million as the fair value of net  assets acquired was in excess of the consideration paid. The gain  on bargain purchase is attributable to the need for investment,  which corresponds with the Group’s investment plans to convert  the paper machine and the limited reusability of certain assets  after the conversion and the future costs associated with the mill  while the conversion is pending.  Details of the fair value of assets acquired and liabilities assumed  as a result of the business combination are included in note 25  of the financial statements. |  | The committee has:  – considered reports from management in relation to the acquisition;  – evaluated the management reports of the purchase price  allocation; and  – satisfied itself that the fair value of assets acquired and liabilities  assumed in the business combination are appropriate and  considered according to the Group’s accounting policy. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 113 |
|  |  |  |

![AC_mondi_brush_cerise-violet-1-hires_crop2.png]()

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  | Matter considered |  | Action |
|  | In addition to property, plant and equipment of €4,619 million,  intangible assets of €68 million and goodwill of €765 million  are included as assets in the statement of financial position.  As set out in the accounting policies, the goodwill is tested for  impairment annually and property, plant and equipment and  intangible assets whenever there is any indication that those  assets are impaired.  Details of goodwill impairment tests and impairments of property,  plant and equipment are included in notes  10 and 12 of the  financial statements. |  | The committee has:  – considered a report from management describing potential  impairment indicators for tangible and intangible assets and  the outcomes of related impairment tests where performed;  – considered a report from management on the outcomes  of the annual goodwill impairment test;  – reviewed the underlying assumptions applied and compared  them with the  Group’s  three-year 2024-2026 plan (budget  period) and the current macroeconomic environment;  – considered the sensitivities underlying the primary assumptions  to determine the consequences that reasonably possible  changes in such assumptions may have on the recoverable  amount of the underlying assets; and  – satisfied itself that no impairments related to goodwill or  intangible assets were required and impairments of property,  plant and equipment were justified. |
|  | The Group has applied IAS 29, 'Financial Reporting in  Hyperinflationary Economies', for its subsidiaries in Türkiye  and Lebanon (2022: Türkiye).  IAS 29 requires judgement to determine when to apply  hyperinflationary accounting and which general price index  to select and other approximations to be made in order  to restate the financial statements of subsidiaries operating  in a hyperinflationary economy.  For the year ended  31 December 2023 , the adjustments from  hyperinflationary accounting have resulted in an accumulated  increase in total assets of €115 million, an  increase in  Group  revenue of  €116 million, a decrease in underlying EBITDA  of €16 million and a net monetary gain of  €2 million. |  | The committee has:  – considered reports from management; and  – satisfied itself that the judgements and adjustments applied  are appropriate and considered according to the Group’s  accounting policy. |
|  | Significant estimation is required in determining the assumptions  to be applied for the valuation of the  Group’s forestry assets  and retirement benefit obligations. Such assumptions are based,  as far as possible, on observable market data and, in the case  of the retirement benefit obligations, on the input and advice  of actuaries.  Details are included in the financial statements (forestry assets  in note 14 and retirement benefits in note 24). |  | The committee has:  – considered reports from management;  – reviewed the assumptions applied in the valuation of the  forestry assets and retirement benefits;  – considered the basis on which these assumptions were  determined, and evaluated the assumptions by comparing  them with prior years and considering market developments  during 2023; and  – satisfied itself that the assumptions, and the changes to  those assumptions when compared with the year ended  31 December 2022, were appropriate. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 114 |
|  |  |  |

#### Corporate governance report

## Audit Committee

#### continued

![AC_mondi_brush_blue-violet-1-hires_crop.png]()

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  | Matter considered |  | Action |
|  | The Group has operations in a number of countries, each with  a different tax system.  The  Group  is regularly subject to routine tax audits and provisions  are made based on the tax laws in the relevant country and the  expected outcomes of any negotiations or settlements.  The Group’s  recognition of deferred tax assets, relating to future  utilisation of accumulated tax losses, is dependent on the future  profitability and performance of the underlying businesses. |  | The committee has:  – received regular reports from management about new  legislative developments that may impact the Group’s  tax positions;  – considered reports from management outlining the  Group’s  most significant tax exposures, including ongoing tax audits  and litigation, and has reviewed the related tax provisions  recognised by management, satisfying itself these are  appropriate and the risk of new unexpected exposures  arising is low; and  – considered a report from management outlining the key  assumptions relating to the recognition of deferred tax assets  and satisfied itself that the assumptions made are reasonable  and consistent from year to year. |
|  | Understanding of the Group’s risks and implications related  to climate change is continuously being enhanced. While the  Group’s  assessments still reflect that these may not be severe  in the short term, it is believed that climate change risks are likely  to have a medium- and long-term impact on business.  The financial statement disclosures consider the impact of climate  change, notably in the estimates used to calculate the fair value  of our forestry assets. The Group continues to assess accounting  policies, judgements and estimates to consider the impact  of climate change. |  | The committee has:  – participated in overseeing the  Group’s  approach to  sustainability;  – received regular reports from management about climate  change and related legislative developments that may impact  the  Group’s disclosure;  – reviewed the Integrated report (including the TCFD section)  and the financial statements for consistency with respect  to climate change risks;  – reviewed the assumptions applied in the valuation of the  forestry assets;  – considered accounting policies, judgements and estimates  on the basis of expected climate change impacts; and  – satisfied itself that the assumptions, and the changes  to those assumptions when compared with the year  ended  31 December 2022 , were appropriate. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 115 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Fair, balanced and  understandable  In line with the committee’s responsibility  for ensuring there are robust financial  reporting procedures and internal controls  in place, and the UK Corporate Governance  Code requirement for the committee to  advise the Board in relation to the annual  report and accounts, in particular whether,  taken as a whole, it is fair, balanced and  understandable, the committee undertook  an assessment of the Integrated report  and financial statements 2023. This  incorporated the work undertaken by  the committee throughout the year to  monitor financial reporting. The process  and outcome are set out opposite. | |  | Oversight through the year | | | |
|  |  |  |  |  |
|  |  | – Review of applicable accounting policies and pronouncements and their application.  – Review of regular financial results and announcements.  – Reports from the Group CFO, the Group controlling team and PwC.  – Reports from the Group Head of Internal Audit. | | |
|  |  |  |  |  |
|  |  | | | |
|  | Review included | | | |
|  |  |  |  |  |
|  |  | – Provision of an outline plan including content and structure, design concepts and timetable.  – Consideration of regulatory and governance requirements for reporting.  – Review of detailed reports from the Group CFO, the  Group  controlling team and PwC  providing the opportunity for debate and challenge.  – Summaries of areas where management judgements or significant accounting estimates  had been made.  – Consideration of going concern and longer-term viability.  – Separate meetings with PwC without management present. | | |
|  |  |  |  |  |
|  |  | | | |
|  | Review confirmed | | | |
|  |  |  |  |  |
|  |  | – Well documented planning and procedures for the preparation of the report.  – Collaborative approach between all parties required to contribute to the report.  – Basis of preparation consistent with financial reporting throughout the year.  – All significant issues had been considered.  – Messaging was consistent, particularly the narrative reflecting the financials. | | |
|  |  |  |  |  |  |  |
|  |  |  |  | | | |
|  |  |  | Conclusion | | | |
|  |  |  |  |  |  |  |
|  |  |  |  | – After completion of the detailed review, the committee was satisfied that:  – taken as a whole, the Group’s Integrated report and financial statements  2023 , were fair,  balanced and understandable;  – the report accurately reflected the information shareholders would require in order  to assess the Group’s  position and performance, business model and strategy; and  – the use of alternative performance measures contained in the report assists in presenting  a fair review of the Group’s business. | | |
|  |  |  |  |  |  |  |
|  |  |  |  | | | |
|  |  |  | Recommendation | | | |
|  |  |  |  |  |  |  |
|  |  |  |  | – The committee reported its findings to the Board, and recommended its conclusions to the  Board  for approval. | | |
|  |  |  |  |  |  |  |
|  |  |  |  |  | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 116 |
|  |  |  |

#### Corporate governance report

## Audit Committee

#### continued

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| External audit  PricewaterhouseCoopers LLP (PwC) was  first appointed as auditor by shareholders  at the Annual General Meeting in May 2017,  replacing Deloitte LLP following a tender  process. The 2023  audit was PwC’s seventh  for Mondi  and Simon Morley’s fourth as lead  audit partner. Given Simon was previously  a Key Partner Involved in the Engagement  since 2017, his maximum tenure was  a combined seven years. The 2023 audit  was therefore his last for Mondi.  Andrew Hammond will replace Simon as  the lead audit partner for the 2024 audit. | |  | We are required to undertake a  mandatory audit tender process after  10 years and the decision on precisely  when to undertake such a process will  be taken by the committee. Following  an assessment of the independence,  objectivity and effectiveness of the  external auditor, details of which can  be found below, the committee has  concluded that it remains satisfied  with the effectiveness and quality  of the audit work. |  | The committee also remains satisfied with  PwC’s capabilities and the relationship  with  Mondi. In light of this, it is not  currently anticipated that a tender  process will be conducted before such  a process is required, in respect of the  31 December 2027 year-end.  The committee confirms its compliance for  the financial year ended  31 December 2023  with the provisions of The Statutory Audit  Services for Large Companies Market  Investigation (Mandatory Use of  Competitive Tender Processes and Audit  Committee Responsibilities) Order 2014. | |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | External audit independence, objectivity and effectiveness  A formal framework for the assessment of the effectiveness of the external audit process and quality of the audit has been  adopted by the committee, covering all aspects of the audit service provided by PwC. While part of the assessment is managed  annually, it is treated as an ongoing review throughout the cycle. | | | | |  |
|  |  |  |  |  |  |  |
|  | Evaluation focus  – Robustness of audit process.  – Audit quality, including quality  controls.  – Audit partners and team, including  skills, character and knowledge.  – Independence and objectivity.  – Formal reporting. |  | – Met with PwC twice during  the year without executive  management present.  Management  – Feedback from engagement with the  Group CFO, Group Controlling team  and Group Head of Internal Audit.  – Feedback from questionnaires issued  at corporate and business unit levels  to those personnel involved with  the audit.  PwC  – Provided the committee with  confirmation that it operates in  accordance with the ethical standards  required of audit firms.  – Confirmed the policies and  procedures it has in place to maintain  its independence.  Regulators  – The UK Financial Reporting Council’s  (FRC) 2022/23 report on Audit  Quality Inspections included a review  of audits carried out by PwC. |  | – PwC demonstrated a good  understanding of the Group and its  internal control systems, and had  identified and focused on the areas  of greatest financial reporting risk.  – PwC’s reporting to the committee  was clear, open and thorough,  including explanations of the  rationale for particular conclusions  as appropriate.  – It was confirmed that, through  the review of management papers  and analyses and the discussion  of key matters with management  and the auditor, there had been  an appropriate level of challenge  during the course of the audit,  with the external auditor and the  Audit Committee challenging  management’s judgements and  assertions on matters including  critical accounting judgements  and key sources of estimation  uncertainty; impairment of property,  plant and equipment and goodwill;  and assumptions underlying the  going concern basis of accounting  in preparing the financial statements  and the viability statement. |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  | Key inputs  Audit Committee  – Continually monitored audit  performance throughout the year.  – Reviewed and agreed the audit plan.  – Reviewed the quality of reporting to  the committee, the level of challenge  and professional scepticism and the  understanding demonstrated by PwC  of the business of the Group.  – Reviewed the quality of the audit  team, technical skills and experience  and the allocation of resources  during the audit.  – Considered the interaction with  management and the level of  challenge.  – Regular meetings held between  the Chair of the committee and  the audit engagement partner.  – Reviewed feedback from committee  members including views on how  PwC has supported the work of  the committee and communicated  with the committee.  – Considered the effectiveness of  Mondi’s policies and procedures for  maintaining auditor independence. |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  | Key outputs  – The quality of the audit partners  and team was confirmed, with  no material issues raised in the  feedback received.  – The audit had been well planned  and delivered, with work completed  on schedule and management  comfortable that any key findings  had been raised appropriately, as  well as active engagement on  misstatements and appropriate  judgements on materiality. |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |  |
|  |  |  | Conclusion  The committee, having considered  all relevant matters, has concluded that  it is satisfied that auditor independence,  objectivity and effectiveness have  been maintained. |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 117 |
|  |  |  |

#### Non-audit services

A policy is in place that governs the

provision of non-audit services provided

by PwC to Mondi , setting out those services

that are permissible and the process to be

followed to obtain approval for such services.

All such services must be approved – there

are no pre-approvals in place. Authority is

delegated by the committee to the Chair

of the committee to approve such services.

The policy, which is regularly reviewed,

was last updated in 2020 to reflect the

changes introduced by the Revised Ethical

Standard 2019.

For all non-audit services, the business

must submit a formal request setting out

the objectives, scope of work, likely fee

level and the rationale for requiring the

work to be carried out by the Group’s

external auditor.

The committee monitors compliance

with the policy and the monetary cap

on non-audit fees, receiving reports at

each meeting detailing all approved

non‑audit services.

Total fees for non-audit services amounted

to €0.6 million, representing 9.8% of the

audit fee, with the vast majority of the

non‑audit fees incurred relating to the

half‑year review and other audit-related

assurance services.

#### Internal audit

Mondi’s Internal Audit function forms

an integral part of Mondi’s governance

and risk management and internal control

frameworks. The primary purpose of the

Internal Audit function is to help the

Board and executive management to protect

the assets, reputation and sustainability of

the organisation and to manage and mitigate

its risks effectively. This includes assessing

whether all significant risks are identified

and appropriately reported by management

to the Board and executive management,

and whether they are adequately controlled.

The Audit Committee has primary

responsibility for monitoring and reviewing

the scope and effectiveness of the Group’s

Internal Audit function. The Group Head

of Internal Audit has direct access and

responsibility to the committee, as well

as regular access to Mondi’s  executive

management.

An Internal Audit Charter, approved by

the committee, is in place. The charter

sets out the purpose, remit and authority

of the Internal Audit function. Each year,

the committee considers and approves

the internal audit plan, which is designed

to focus on the Group’s key risks to

ensure that they are managed effectively

within the context of our business

objectives and that appropriate internal

controls are in place.

The committee ensures that all material

operations and relevant business

processes are covered and that there

is an appropriate degree of financial

and geographical coverage. Every Mondi

operation is visited at least once every five

years, with all major plants audited annually.

Reports are given at each committee

meeting, providing an update on activities,

resourcing levels, progress against plan,

results from audits carried out and

management’s response to address

any areas highlighted for improvement.

The committee will consider deviations

from plan as the need arises during the

year, usually in response to a material

acquisition or change in the Group’s  risk

profile, highlighted through audit reports

and through matters raised via the

anonymous whistleblowing and grievance

platform, SpeakOut.

The effectiveness of the Group's Internal

Audit function is kept under close

review by the committee, with a formal

review undertaken annually. The last

comprehensive, external review of the

Internal Audit function was carried out in

2020 by Independent Audit (a consultancy

firm specialising in board evaluations

and effectiveness reviews). The overall

conclusions in respect of the effectiveness

of the Internal Audit function, its leadership

and its relationship with the Audit

Committee were positive, and all

recommendations have been addressed.

Towards the end of 2022, upon retirement

of the previous Group Head of Internal

Audit, a new Group Head of Internal

Audit was appointed. This change was

complemented by the recruitment of a

number of specialists into the department

and the development of a four-year

roadmap for the Internal Audit function.

An internal review was undertaken in 2023.

The committee has concluded following

the review that the Internal Audit function

remains effective in carrying out its remit.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 118 |
|  |  |  |

#### Corporate governance report

## Audit Committee

#### continued

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| D REINICHE 0080_background_2_edit_retouched_crop.png | | | | |  | Dear Shareholder  I am pleased to present this report,  which provides an overview of the areas  of focus for the committee during the  year, as well as its key activities and the  framework within which it operates.  While the Board as a whole has  responsibility for overseeing Mondi’s  approach to sustainability, the committee,  on behalf of the Board, oversees  and monitors Mondi’s sustainable  development policies and practices  and progress against our sustainability  commitments and targets. It provides  guidance in relation to sustainability  matters, including climate change-related  issues and reviewing and approving  updates to the Group’s framework  of sustainability policies and strategies,  ensuring they are aligned with global  best practice.  Our sustainability policies include: Safety  and Occupational Health; Labour and  Human Rights; Sustainable Forestry;  Energy and Climate Change;  Environment; Supply Chain and  Responsible Procurement; Product  Stewardship; and Communities.  A summary report from the directors  on the Group’s sustainability practices  is set out on pages [42](#i47a6727b8bad4fe28addb4dae187e293_2727)-[68](#icca9faf6cff54b858334ac669229ec81_9-2-1-1-470030).  Areas of focus  The safety of all our employees  and contractors is a priority for the  committee. Safety performance  continues to be a focus at every meeting  to ensure our high standards are  maintained. We were deeply saddened  by the fatality of a contractor at our  Ružomberok mill (Slovakia) in November.  Unfortunately we also experienced four  life-altering injuries at our operations  during the year. Full investigations were  undertaken and the committee was kept  informed throughout. We understand  the significant impact that such incidents  have on families, friends and colleagues  and we look to take any lessons we can  to minimise the risk of a reoccurrence.  It was highly important that we spent  time understanding these events and  the underlying causes and actions to  be taken in response. Further details  of the actions being undertaken can  be found on page 50. |
|  |  |  |  |  |  |
|  | Dominique Reiniche  Chair of the Sustainable Development Committee | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | The committee critically reviewed the progress  against our target of making 100% of our packaging  and paper solutions reusable, recyclable or  compostable. The complexity in navigating the  transition to a circular economy was considered,  with a focus on the efforts that are being made  to ensure that a sustainable alternative is in place. | | |  |  |
|  |  |  |  |  |  |
|  | Composition and attendance1 | | |  |  |
|  | Members throughout the year | Committee member since | Meeting attendance |  |  |
|  | Dominique Reiniche, Chair | May 2017 | 7/7 |  |  |
|  | Svein Richard Brandtzaeg | April 2021 | 7/7 |  |  |
|  | Andrew King | May 2020 | 7/7 |  |  |
|  | Dame Angela Strank2 | April 2021 | 6/7 |  |  |
|  | Stephen Young | May 2018 | 7/7 |  |  |
|  |  |  |  |  |  |
|  | 1 The maximum number of scheduled meetings held during the year that each director  could attend is shown next to the number attended.  2 Dame Angela Strank was unable to attend one meeting of the committee during the year  due to an unavoidable commitment. | | |  |  |
|  |  |  |  |  |  |
|  | Other regular attendees | | |  |  |
|  | – Group CFO  – Chair and non-executive directors who are not members  of the committee  – Group Technical & Sustainability Director  – Group Head of Sustainable Development  – Group Head of Safety & Health | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 119 |
|  |  |  |

#### Corporate governance report

## Sustainable Development Committee

#### Areas of focus

#### continued

We continue to work hard to proactively

embed our safety culture across the Group.

During the year, priority safety focus areas

were reviewed. These included safety

support for annual maintenance shuts and

major capex projects, safety campaigns

and focused site visits. The Social

Psychology of Risk was reconfirmed as a

safety focus area, with the aim of focusing

on the psychological and cultural elements

that can pose a risk to safety, the

promotion of engagement across our sites

and increasing general personal awareness.

The safety of our people will remain at the

top of our agenda in 2024.

The committee also spent time reviewing

the double materiality assessment

undertaken in preparation for the

implementation of reporting requirements

under the European Union's Corporate

Sustainability Reporting Directive (CSRD).

The committee reviewed both the outcome

of the materiality assessment, which was

focused on the impact our business has

on the environment in which we operate

and the issues of greatest importance

to our stakeholders, and on the financial

materiality, which considered the potential

impact of key sustainability issues on

Mondi's business. The resulting double

materiality outcome was reviewed and

10 material topics were identified which are

aligned with our Mondi Action Plan 2030

(MAP2030) action areas. Further details

can be found on pages [42](#i47a6727b8bad4fe28addb4dae187e293_2727)-[43](#ic9ee50e9083a4e688a2c9cd6f0eaffc2_1-1-1-6-478380).

In January 2023, relevant MAP2030 targets

were updated to exclude Russian

operations. Progress made against the

MAP2030 commitments and targets

continued to be an area of focus for the

committee, and particular attention was

paid to upcoming investment projects

and their contribution to a reduction in

greenhouse gas (GHG) emissions. While

this will be a journey for Mondi, and

we acknowledge the extent of the work

required to achieve Net-Zero, the

committee was pleased to see the actions

being taken and progress made during

2023. More information can be found

on pages [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489).

Alongside this, the committee reviewed

sustainability risks and opportunities.

Climate change mitigation remained

a priority and climate change risks and

opportunities were considered in detail.

Further information, including Mondi’s

disclosures in line with the

recommendations of the Task Force

on Climate-Related Financial Disclosures,

can be found on pages [55](#i47a6727b8bad4fe28addb4dae187e293_3224)-[64](#i8eb60d69ace440a9b8dac4ed7f61c7cf_2387). Mondi

is determined to minimise the impact

of its business on climate change through

robust governance combined with a

rigorous approach to reducing GHG

emissions across the value chain.

In 2022, the committee took over

responsibility for the people-related targets

from the Nominations Committee, and

discussions in this respect formed a key

part of the committee's agenda in 2023.

The committee reviewed the employee

statistics and the progress in respect

of diversity and inclusion targets, with

increasing the representation of females

in our workforce remaining a focus area.

The committee acknowledged that local

factors play a role and impact the

performance against our targets in this

respect. The Board, the committee and

the organisation as a whole remain

committed to making the changes

required. Further information on our

diversity and inclusion initiatives can

be found on pages 49 and [107](#id233ee6df86d41d9af4900bb15639dcb_0-4-28-2-475377)-[109](#i5ea58ed7a01b4ae8a1791f861d018ea2_7-5-1-1-358049).

The committee was pleased to see the

results of the 2023 Employee Survey, with

one of the highlights being that 80% of

respondents find meaning and purpose

in their job. The committee also discussed

potential areas for improvement, such as

promoting psychological safety to speak

up. Sue Clark, in her role as non-executive

director responsible for understanding

the views of employees, also provided an

overview of engagement undertaken during

the year and further insight into views of

a cross-section of our employees. More

information can be found on pages [92](#i7e8411646eff4bc0adb55b69313ae28d_467526)-[93](#i7e8411646eff4bc0adb55b69313ae28d_590831).

The committee critically reviewed the

progress against our target of making 100%

of our packaging and paper solutions

reusable, recyclable or compostable.

The complexity in navigating the transition

to a circular economy was considered, with

a focus on the efforts that are being made

to ensure that a sustainable alternative is

in place, in particular to accelerate progress

in the flexible packaging business. More

information can be found on pages 45-47.

A more detailed overview of the matters

considered by the committee during

the year can be found opposite.

#### Committee effectiveness

The committee’s performance and

effectiveness were reviewed as part

of the Board evaluation undertaken during

the year, more details of which can be

found on page [104](#if266c99031a146be8d7f4accd32f9a9f_0-0-5-3-489722). I am pleased to

confirm that the committee is seen to

be operating effectively and fulfilling

the duties delegated to it by the Board.

#### Dominique Reiniche

Chair, Sustainable

Development Committee

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 120 |
|  |  |  |

#### Corporate governance report

## Sustainable Development Committee

#### continued

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Sustainable Development Committee activity  Set out below are some of the key matters addressed by this committee. | | | | |  |
|  |  |  |  |  |  |  |
|  | Safety performance and  serious incidents  – Received detailed reports on the fatality  at the Ružomberok mill (Slovakia) and  the life-altering injuries, and follow-up  reports on the outcomes of the  investigations into these incidents.  – Received regular reports on safety  performance at Group  and business  unit level, including individual mill  performance, classification of incidents  and peer comparisons, giving the  committee insight into the safety  culture and specific sites that required  further focus. Annual maintenance  shuts remained a key focus.  – Received an update on the Social  Psychology of Risk, with a continued  focus on bringing the unconscious to  the conscious, and the ways in which  culture can be influenced to promote  safe behaviour in the workplace.  – Considered and agreed the safety  milestones and leading and lagging  indicators for the next reporting period.  Product stewardship  – Received an update on the Group’s  approach to product stewardship  practices in the context of the MAP2030  Circular Driven Solutions commitments,  focusing on the tools to assess the impact  of Mondi’s products and the partnerships  designed to support the achievement  of Mondi’s commitments. The committee  spent time understanding the challenges  that we face, along with our customers,  to transition to a circular economy.  – Reviewed the developing regulatory  landscape from a sustainability  perspective, focusing on those areas  of regulations likely to have the greatest  impact on Mondi and its stakeholders.  People development and diversity  – Received an update on the Group’s  approach to people management and  diversity in the context of the MAP2030  Created by Empowered People  commitments.  – Reviewed the performance against  MAP2030 KPIs and diversity statistics  and initiatives for the Group, discussing,  in particular, actions to make progress  against the target of employing 30%  women by 2030. |  | – Considered the results of the 2023  Employee Survey, looking at the areas  that received positive scores, those that  needed improvement and the resulting  actions being taken both on a global  and local level.  Environmental performance and  climate change  – Reviewed climate-related risks and  opportunities and the potential impacts  on the business in line with the TCFD  recommendations (see pages [55](#i47a6727b8bad4fe28addb4dae187e293_3224)-[64](#i8eb60d69ace440a9b8dac4ed7f61c7cf_2387)  for more information).  – Reviewed performance against each  of the environmental key performance  indicators and commitments, including  progress in reducing GHG emissions  in line with science-based targets.,  – Reviewed the Group’s performance  and progress to meet the MAP2030  milestones and key contributing factors.  – Discussed and agreed the sustainability  KPIs for inclusion in the 2024 cash  bonus (See page [68](#icca9faf6cff54b858334ac669229ec81_5-1-1-2-475324) for more details).  Nature and responsible wood  sourcing  – Received an update on forestry-related  sustainability topics, focusing in  particular on the MAP2030 forestry  and nature-related commitments and  targets and progress to date.  – Reviewed focus areas and actions being  taken to promote resilient forests in  Europe and South Africa.  Responsible procurement  – Reviewed the development of Mondi’s  Responsible Procurement process,  including the progress on rolling out a  supplier screening process designed to  identify and manage high-risk suppliers.  – Received an overview of supplier  engagement activities, particularly  focused on the work being undertaken  to increase awareness around GHG  emissions and reduction plans and  the data Mondi requires in this respect  to support progress on our Scope 3  GHG target.  Stakeholder relationships  – Reviewed the Group’s relationships  and engagement with key stakeholders,  including governments and  non‑governmental organisations, |  | focusing on the partnerships that  will be required to support Mondi in  achieving MAP2030 and the primary  areas for engagement.  – Review of the Socio-Economic  Assessment Toolbox (SEAT) process  and proposals to transition to  Stakeholder Engagement Conversations,  allowing, among other things, greater  focus on site-specific topics. The  approach has been successfully piloted  at the Ružomberok mill (Slovakia).  – Reviewed Mondi’s ESG ratings in order  to understand which ratings are most  important to our stakeholders, how we  perform and where there is potential  for improvement.  Sustainable development  governance and risks  – Reviewed the material sustainability  issues, risks and opportunities and the  double materiality assessment undertaken.  – Reviewed the annual Sustainable  Development report, and approved  the report for publication.  – Reviewed and approved the Group’s  Human Trafficking and Modern Slavery  Statement, giving consideration to  the actions being taken to minimise  such risks in our organisation and  supply chain.  – Received an update on the MAP2030  human rights commitment, which  confirmed that no human rights adverse  impacts or severe risks had been  reported by the operations through  the risk identification process. Areas  for improvement were reviewed and  action plans presented.  – Reviewed Group sustainable  development policies and approved  amendments to reflect best practice  and align with Mondi’s MAP2030  approach.  – Approved updates to relevant  MAP2030 targets to exclude the  Russian operations.  – Reviewed the committee’s terms of  reference and performance resulting  in minor changes to align the terms  with existing practice.  – Considered and agreed the committee’s  annual work programme. |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 121 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Angela Strank WEB23_2_retouched_crop.png | | | | |  | Dear Shareholder  I am pleased to present this report  on directors' remuneration as Chair  of the Remuneration Committee  (the committee).  Compliance statement  This report has been prepared on  behalf of, and has been approved by,  the Board. It complies with the Large  and Medium-sized Companies and  Groups (Accounts and Reports)  Regulations 2008 (as amended in 2018)  (the Regulations), the UK Corporate  Governance Code and the UK Listing  Rules, and takes into account the  Directors' Remuneration Reporting  Guidance and the relevant policies  of shareholder representative bodies.  In accordance with the UK Companies  Act, shareholders will be asked to vote  on the following resolution at the 2024  Annual General Meeting (AGM):  – an advisory vote on the Directors'  remuneration report excluding the  Directors' Remuneration Policy (DRP),  which provides details of the  remuneration earned by directors  for performance in the year ended  31 December 2023, and how the DRP  will be implemented for 2024.  The committee continues to focus  on performance driven reward that  aligns the remuneration of our executives  to the interests of our shareholders.  We are confident that the DRP and  our approach to its implementation will  continue to support Mondi’s success,  incentivising the management team  to deliver long-term sustainable  shareholder value. |
|  |  |  |  |  |  |
|  | Dame Angela Strank  Chair  of the Remuneration Committee | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | The remuneration strategy is intended to be simple,  fair and transparent, leading to reward outcomes that  are reflective of wider business performance. | | |  |  |
|  |  |  |  |  |  |
|  | Composition and attendance | | |  |  |
|  | Members throughout the year | Committee member since | Meeting attendance1 |  |  |
|  | Dame Angela Strank,  Chair | April 2021 | 4/4 |  |  |
|  | Sue Clark | April 2021 | 4/4 |  |  |
|  | Dominique Reiniche | October 2015 | 4/4 |  |  |
|  | Philip Yea | April 2020 | 4/4 |  |  |
|  |  |  |  |  |  |
|  | 1 The maximum number of scheduled meetings held during the year that each director  could attend is shown next to the number attended. | | |  |  |
|  | Other regular attendees | | |  |  |
|  | – Non-executive directors who are not members of the committee  – Group CEO  – Group HR Director  – Group Head of Reward  – Head of Executive Reward  – External remuneration consultant | | |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 122 |
|  |  |  |

#### Remuneration report

Statement from the Chair of the

## Remuneration Committee

#### Performance in

2023

Context of

#### remuneration

Mondi’s performance in 2023 reflected

the uncertain global economic environment

and its impact on the markets in which

we operate. Against this backdrop,

we delivered a resilient performance.

Underlying EBITDA was €1,201 million.

Cash generation remained strong at €1,312

million, and ahead of last year. We continue

to make good progress in delivering on our

growth projects.

Sustainability is at the heart of the strategy

and embedded into Mondi’s actions and

decisions. Clear and measurable progress

continued to be made over the course

of 2023 against the ambitious targets of

the Mondi Action Plan 2030 (MAP2030).

The strategic importance of our sustainability

agenda is reflected in the remuneration

structure and is a key component of

the Group's annual bonus, embedding

sustainability goals into the organisation.

Safety is our highest priority. We continue

to build on our Social Psychology of Risk

approach to safety, culture and behaviours,

in addition to our traditional assessment of

safety performance using Total Recordable

Case Rate (TRCR). Although we are

among the leading performers in safety

in our industry, we tragically experienced

a fatality towards the end of 2023 at our

Ružomberok mill (Slovakia). We ensure

that every incident is fully investigated, that

learnings are shared, and procedures

and practices revised, if appropriate,

to avoid the same or a similar situation

happening in the future.

The Board has recommended a total

ordinary dividend for the year of 70.00 euro

cents per share in line with 2022.

This reflects the Board’s confidence

in the future of the business.

Further details on performance in 2023

are set out on pages 2-[3](#i47a6727b8bad4fe28addb4dae187e293_8476).

#### Remuneration outcomes

#### aligned to performance

#### Annual bonus

For the 2023 annual bonus, performance

was assessed against financial (60%), safety

(10%), greenhouse gas (GHG) emissions

(5%), waste to landfill (WtL) (5%) and

personal (20%) targets.

Annual bonuses of 29% and 30% of

maximum have been awarded in respect of

performance in 2023 for Andrew King and

Mike Powell respectively. The outturn, as a

percentage of the maximum opportunity, is

a fair reflection of the performance against

the components of the bonus scorecard.

– The majority of the bonus is assessed

against financial measures. Threshold

levels of financial performance were not

achieved (underlying EBITDA of €1,201

million and ROCE of 12.8%), resulting in

0% of the financial elements being

received.

– The Group's annual bonus is linked

to sustainability objectives, including

the binary targets of reduction in GHG

emissions and elimination of waste to

landfill, each accounting for 5% of the

total bonus opportunity. While the waste

to landfill target was achieved, the

GHG emissions target was not, due to

loss of production as a consequence of

market conditions, and this element of

the bonus was forfeited. As a result, the

bonus outturn for GHG and waste to

landfill was 5% out of a maximum of 10%.

Details are given on pages [140](#i35a183d9445545de8782edc2ff7acf30_23547)-[141](#i35a183d9445545de8782edc2ff7acf30_62638). We

continue to make good progress

towards achieving our MAP2030

commitments.

– The sustainability scorecard includes

safety targets. Lead and lag indicators

are used to monitor and improve safety

performance, with the intention to

mitigate risks proactively. The lead and

lag indicator each account for 5% of the

total bonus opportunity. The lag indicator

assesses the Total Recordable Case

Rate (TRCR). The TRCR outcome of

0.64 reflected fewer safety incidents

than the target of 0.65. The Executive

Committee individually and collectively

achieved all of the lead indicators, aimed

at reinforcing safety as our highest

priority, and our Social Psychology of

Risk approach. A formulaic assessment

of the safety performance against the

lead and lag indicators would have

resulted in 10% of the maximum bonus

being delivered.

– However, there was a fatality in 2023. This

was independently reviewed by the

Sustainable Development Committee and

the Remuneration Committee.

After careful deliberation of the specific

circumstances, the Remuneration

Committee determined that a downward

adjustment of three percentage points of

the lag indicator metric should be applied.

This resulted in 60% of the lag indicator

metric being forfeited. As a result, the

safety component of the scorecard

contributed 7% to the bonus outturn.

– The personal element of the bonus

(20% of maximum) reflected specific

operational and strategic objectives.

Excellent progress was made against

these objectives, set in the context

of the challenges of 2023. As a result

of this strong delivery, Andrew King and

Mike Powell were awarded 17% and 18%

respectively.

Further details are set out on pages [140](#i35a183d9445545de8782edc2ff7acf30_23547) to [143](#i35a183d9445545de8782edc2ff7acf30_23548).

The committee considered the

appropriateness of the overall bonus outturn,

in the context of the financial and operational

performance against targets. In challenging

markets, the business delivered strong cash

flow, and management made excellent

progress against their strategic objectives.

While other key metrics of financial

performance were below expectations, our

progress on long-term investment projects

will ensure that Mondi is well positioned for

a sustainable future. The committee considers

that annual bonus outturns for Andrew and

Mike of 29% and 30% of maximum respectively

are a fair reflection of the performance

of the business and their individual

performance against personal objectives.

In accordance with the DRP, half of these

annual bonus awards will be delivered in

deferred shares which vest after three years.

#### LTIP

The performance period for the 2021

Long‑Term Incentive Plan (LTIP) ended

on 31 December 2023. Half of the award

was based on average ROCE performance

and half on relative TSR performance over

the three-year performance period.

The ROCE performance range, originally

determined by the committee in 2021, was

set at 12% to 18%. The average ROCE for

the three-year performance period was

17.8%, which resulted in performance

between threshold and stretch targets.

This resulted in vesting of 97.5% of this

element, which contributed to 48.75%

of the total LTIP outcome.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 123 |
|  |  |  |

The Group’s TSR over the period was 2.17%,

which was at median performance among

the comparator group. This performance

resulted in 25% vesting for this element,

which contributed to 12.50% of the total

LTIP outcome.

As a result, 61.25% of the overall LTIP

award will vest in March 2024. For our

executive directors, their vested shares

will be subject to a two-year post-vesting

holding period until 2026. Further details

are set out on page [144](#i47a6727b8bad4fe28addb4dae187e293_5497558142335).

#### Summary

The committee considers that the annual

bonus, taking into account the application

of downward discretion in respect of the

safety element, and LTIP outcomes, are

a fair reflection of the wider business

performance for the 2023 financial year and

over the longer term. These outcomes are

aligned to the shareholder experience.

Further information about the levels of

executive remuneration earned in 2023,

including details of performance against

the relevant targets for both bonus

and LTIP, is given on pages [139](#i47a6727b8bad4fe28addb4dae187e293_5497558142320)-145.

#### Remuneration in

2024

#### Base salary

At Mondi, the philosophy is to pay our

executive directors a total remuneration

package that attracts and retains the best

people, with salaries intended to be fair

and well positioned to the external market

and the wider workforce.

Acknowledging the need for appropriate

restraint for executive directors, Andrew King

and Mike Powell’s base salaries were

increased by 2.5% to £1,100,338 and £701,613

respectively, effective from 1 January 2024.

These were in line with, or below the

increases applied to the wider UK workforce

(typically 2.5% to 5%). As part of determining

the salary increases for our executive

directors, the committee was updated

and received a report on the pay and pay

practices for both senior management

and the wider workforce across all

of Mondi's key markets.

The committee considers that the salaries

for the executive directors are appropriate

for a global organisation of Mondi’s size

and complexity.

#### Pension

Andrew King, Mike Powell and the majority

of Mondi plc's workforce receive a pension

allowance of 8% of base salary.

#### Variable pay

There are no proposed changes to the

structure or quantum of the annual bonus

and LTIP awards. For 2024, Andrew King

will be eligible for a maximum bonus

of 185% of base salary and an LTIP award

of 230% of base salary. Mike Powell will

be eligible for a maximum bonus of 170%

of base salary and an LTIP award of 210%

of base salary. Actual award levels for both

the annual bonus and LTIP remain below

the policy maxima.

#### Annual bonus

The majority of the annual bonus is

assessed against financial measures.

ROCE and underlying EBITDA are key

performance indicators.

Given the strategic importance of

sustainability, 20% of the total bonus

opportunity is assessed against

sustainability measures (pages [42](#i47a6727b8bad4fe28addb4dae187e293_2727)-[68](#icca9faf6cff54b858334ac669229ec81_9-2-1-1-470030)

of this report for further detail on our

MAP2030 framework). Half of the

sustainability metrics are assessed against

safety performance. The scorecard also

includes reduction in GHG emissions

and elimination of waste to landfill, each

with a weighting of 5% of maximum

bonus opportunity. These are assessed

against robust, quantifiable targets. These

scorecard metrics address the key focus

areas of MAP2030. In Mondi, we have

chosen to include the sustainability metrics

in the Group annual bonus plan rather than

the LTIP, as the annual bonus plan extends

deeper into the organisation.

The sustainability metrics are at the heart

of Mondi’s strategy. Together with ROCE

and underlying EBITDA, this provides a

well-rounded assessment of performance.

Details of the performance measures

and weightings are on page [129](#i47a6727b8bad4fe28addb4dae187e293_5497558142254).

#### LTIP

For the 2024 LTIP grant, performance

will be assessed against ROCE, relative

TSR and cumulative EPS. Details of the

performance measures, weightings

and targets are on pages [129](#i47a6727b8bad4fe28addb4dae187e293_5497558142254)-130.

In 2023, we completed the sale of all

our Russian assets following the Board's

decision to exit Russia. The committee took

account of this in setting the targets for the

2024 LTIP awards, noting that the Russian

operations had typically contributed

approximately an additional 300 basis

points towards ROCE. The committee

determined that the threshold ROCE

performance level should be maintained

at 12% and the stretch performance level

should be set at 16%. This adjustment

of 200 basis points to the stretch target

does not fully reflect the lost contribution

from the Russian assets and the

committee therefore considers this target

to be stretching.

The EPS targets have been set on a

cumulative basis in the context of the

long‑term financial plan and reflect the

basic underlying EPS, post-share

consolidation. The targets are considered

to be stretching against the backdrop of a

challenging global economic environment.

We will continue to review the opportunity,

performance measures, weightings

and targets of our variable pay plans

periodically, within the parameters of the

prevailing approved DRP. We appreciate

feedback from investors and have carefully

considered their comments at the

Remuneration Committee, as we

determined the 2024 performance targets.

Further details on the implementation of

the DRP for the 2024 financial year are

provided on page [129](#i47a6727b8bad4fe28addb4dae187e293_5497558142254)-[130](#ia7d4074c721b4c67865df96299b31ef3_7007).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 124 |
|  |  |  |

#### Remuneration report

Statement from the Chair of the

## Remuneration Committee

#### continued

![RC_mondi_brush_blue-violet-1-hires_crop.png]()

Executive director pay and the

#### wid

#### er workforce

Every year, the committee is presented

with an analysis of pay practices and

incentives across the Group. This review

extends across the global workforce in

all geographies and business units, and

includes details of the discretionary

pay increases being applied to senior

management and the wider workforce.

The majority of Mondi employees’ pay is

negotiated under local collective bargaining

agreements, details of which are shared

with the committee. This workforce salary

review ensures the committee understands

the wider workforce pay and practices.

This discussion precedes the consideration

of the discretionary pay increases for the

executive directors. The committee is well

positioned when determining executive

director pay, to take into account reward

for the wider workforce and all other

relevant information.

The key difference in the remuneration

of executive directors and employees

in general is the proportion of the

remuneration package that is performance

related and 'at-risk'. The variable pay,

delivered under the short- and long-term

incentive plans is higher for executive

directors. The remuneration is also realised

over an extended time horizon.

The Board has designated a non-executive

director, Sue Clark, responsible for

engaging with employees and reporting

back to the Board on the relevant insights

and discussions. During these discussions

a variety of subjects were discussed, not

limited to remuneration-related topics.

The views of employees, shared with the

Board, contribute to the wider discussions

of the committee. We will continue to

engage with employees, both formally and

informally, to bring their views to the Board

and the Remuneration Committee.

For further details on wider employee

engagement, see pages [92](#i7e8411646eff4bc0adb55b69313ae28d_467526)-[93](#i7e8411646eff4bc0adb55b69313ae28d_590831).

#### Special dividend and s

#### hare

#### consolidation

Over the course of 2023, we completed

the sale of all our Russian assets following

the Board's decision to exit Russia.

Following approval by shareholders, the net

proceeds from the sale were distributed to

shareholders on 13 February 2024 by way

of a special dividend of €1.60 per share,

with an associated share consolidation

taking effect on 29 January 2024. Further

information can be found on page [216](#i47a6727b8bad4fe28addb4dae187e293_172).

It was agreed by the committee that

participants in the Bonus Share Plan (BSP)

and LTIP would not receive the special

dividend on unvested share awards, and

that the share consolidation would not

apply to their unvested awards/options.

This meant that there were no adjustments

to the number of shares these participants

may acquire under their current awards/

options, keeping the overall value of their

awards/options at a broadly similar level.

#### Shareholder engagement

In 2023, our Board continued to engage

with a cross-section of shareholders on

developments and external expectations

relating to executive pay. Early in the year,

we consulted with shareholders and proxy

agencies in relation to our revised DRP

and its implementation. This engagement

continued throughout the year. Feedback

from investors is welcome and has been

carefully considered by the Remuneration

Committee in determining the structure

and operation of our remuneration policy.

#### Conclusion

I should like to thank you for the

constructive feedback and strong support

you gave at last year's AGM for our DRP

and implementation of the policy. I very

much hope that you will continue to give

your support to the remuneration resolution

proposed at the 2024 AGM.

Finally, I should like to thank my fellow

committee members for their support

throughout the year.

#### Dame Angela Strank

Chair, Remuneration Committee

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 125 |
|  |  |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  | Summary of our executive directors' remuneration policy and implementation for 2024 | | | |  |
|  | Implementation of DRP in 2024 | | | |  |
|  | Fixed pay | | | |  |
|  | Base salary, pension  and benefits | Salary  Group CEO :  £1,100,338 ( 2.5% increase);  Group CFO:  £701,613  (2.5% increase);  (in line with, or below the increases  applied to the wider UK workforce;  typically 2.5% to 5%). | Pension  8% of salary, aligned to the majority  of Mondi plc's workforce. | Benefits  Executive directors will continue to receive  benefits in line with policy, which include  car allowance, medical insurance, death  and disability insurance, and employment  taxation advice. |  |
|  |  |
|  |  |  | | |  |
|  | Annual bonus | | | |  |
|  | Short-term variable  remuneration | Annual_Bonus_Arrows.svg | | |  |
|  | – To incentivise and reward the achievement of stretching annual performance targets.  – Maximum opportunity unchanged from prior year at 185%  of base salary ( Group CEO) and  170% of base salary (Group CFO).  – Performance measures for  2024 will be underlying EBITDA (35%), ROCE (25%), safety ( 10%), reduction in greenhouse gas  emissions (5%), elimination of waste to landfill (5%) and personal objectives (20%). | | |  |
|  |  |  | | |  |
|  | Long-Term Incentive Plan | | | |  |
|  | Long-term variable  remuneration | LTIP_Arrows.svg | | |  |
|  | – To incentivise and reward the delivery of the Group’s long-term strategic objectives, and provide alignment with shareholders.  – Maximum opportunity unchanged from prior year at 230%  of base salary (Group CEO) and 210%  of base salary (Group CFO).  – Performance measures for  2024 will be ROCE (50%), relative TSR (25%) and cumulative EPS (25%). | | |  |
|  |  |  | | |  |
|  | Share ownership policy | | | |  |
|  |  | – To align the interests of executive directors with those of shareholders.  – Minimum Shareholding Requirement (MSR) of  300% of base salary for the  Group  CEO and  250% of base salary for the  Group CFO.  – A post-employment shareholding requirement applies – equal to the full in-employment shareholding requirement  (or actual shareholding, if lower) for a period of two years. | | |  |
|  |  |  |  |  |  |

### Key decisions concerning directors' remuneration

Conclusion of DRP, following

shareholder consultation

Further to the consultation with our key

shareholders and proxy agencies, our

revised DRP was taken to shareholders

and strongly supported at the 2023 AGM.

Impact of the fatality on 2023 annual

bonus outcomes

As a consequence of the fatality that

occurred during the year, the committee

determined that a downward adjustment

of three percentage points to the annual

bonus outcome for the executive directors

and the wider Group Executive Committee

was appropriate.

Vesting of 2021 LTIP award

As part of determining the vesting

outcomes, the committee considered the

formulaic outturns in the context of Mondi's

wider business performance.

Review of executive director salaries

Andrew King and Mike Powell's base

salaries increased by 2.5% on 1 January

2024. These increases were in line with,

or below the increases applied to the wider

UK workforce (typically 2.5% to 5%).

Determination of remuneration for

new Executive Committee roles

The remuneration structure and quantum

were determined and approved for the

CEO Uncoated Fine Paper, following an

internal promotion, and the new Chief

People Officer, joining Mondi in April 2024.

#### Review of non-executive director fees

No increases are being applied to

non‑executive directors, in respect

of base fees, committee Chair fees,

the attendance fee outside country

of residence (per meeting) or any

other supplemental fees.

2024 LTIP targets

The committee considered the impact

of the sale of the Russian operations on

the ROCE target range, and the impact

of the share consolidation on EPS targets

(page [130](#ia7d4074c721b4c67865df96299b31ef3_7007)).

Return of net proceeds from disposal

of Russian assets

It was agreed by the committee that

participants in the BSP and LTIP would

not receive the special dividend on

unvested awards, and that the share

consolidation would not apply to their

unvested awards/options.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 126 |
|  |  |  |

#### Remuneration report

## Remuneration at a glance

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Linking our reward and strategy | | | | | | | | | | |  |  |
|  |  |  |  |  | Annual bonus | | | | | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Our strategy:  Drive value accretive growth, sustainably  Underpinned by our four strategic value drivers:  Drive performance along the value chain  Invest in assets with cost advantage  Inspire our people  Partner with customers for innovation | |  |  | Underlying  EBITDA  35 % |  | ROCE  25 % |  | Sustainability  scorecard  20% |  | Personal  20% |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Outturn  0% |  | Outturn  0% |  | Outturn  12% |  | Outturn  17%/ 18% |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | LTIP | | | | | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | TSR  50% | | |  | Average 3-year ROCE  50% | | |  |  |
|  |  |  |  |  |  | | |  |  | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Traffic Light - Green.svg | At or above maximum |  |  | Outturn  12.50% | | |  | Outturn  48.75% | | |  |  |
|  |  | Between threshold and maximum |  |  |  |  |  |
|  |  | Below threshold |  |  |  | | |  |  | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Remuneration outcomes | | | | |  |  |  |  |  |  |  |  |  |  |
|  |  | Andrew King  Base salary | | | | |  |  |  | Mike Powell  Base salary | | | | |  |  |
|  | £1,073,500 | | | | | | |  | £684,500 | | | | | | |  |
|  |  |  | | | | |  |  |  |  | | | | |  |  |
|  |  | Annual bonus | | | | |  |  |  | Annual bonus | | | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Underlying  EBITDA  35% | | ROCE  25% | Sustainability  scorecard  20% | Personal  20% |  |  |  | Underlying  EBITDA  35% | | ROCE  25% | Sustainability  scorecard  20% | Personal  20% |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Outturn  0% | | Outturn  0% | Outturn  12% | Outturn  17% |  |  |  | Outturn  0% | | Outturn  0% | Outturn  12% | Outturn  18% |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | | | | |  |  |  |  | | | | |  |  |
|  |  | 29%  Total outturn  £575,934  50% deferred in shares | | | | |  |  |  | 30%  Total outturn  £349,096  50% deferred in shares | | | | |  |  |
|  |  | 2021 LTIP | | | | |  |  |  | 2021 LTIP | | | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | TSR  50% | | | ROCE  50% | |  |  |  | TSR  50% | | | ROCE  50% | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Outturn  12.50% | | | Outturn  48.75% | |  |  |  | Outturn  12.50% | | | Outturn  48.75% | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | | | | |  |  |  |  | | | | |  |  |
|  |  | 61.25%  Total outturn  £1,233,525  two-year holding period | | | | |  |  |  | 61.25%  Total outturn  £718,209  two-year holding period | | | | |  |  |
|  |  | Benefits, pension contributions and other | | | | |  |  |  |  | Benefits, pension contributions and other | | | |  |  |
|  | £343,318 | | | | | | |  | £129,538 | | | | | | |  |
|  |  |  | | | | |  |  |  |  | | | | |  |  |
|  |  | Total remuneration 2023  £3,226,277 | | | | |  |  |  | Total remuneration 2023  £1,881,343 | | | | |  |  |
|  |  |  | Annual bonus  Page [140](#i35a183d9445545de8782edc2ff7acf30_23547)-[143](#i35a183d9445545de8782edc2ff7acf30_23548) | | | |  |  |  |  | Long-Term Incentive Plan (LTIP)  Page [144](#i47a6727b8bad4fe28addb4dae187e293_5497558142335)-145 | | | |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 127 |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  | | |  |
|  | Fixed vs variable remuneration outcomes |  |  |  |
|  |  |  |  |  |
|  | Andrew King, Group CEO |  | Mike Powell, Group CFO |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  | | |  |
|  |  |  |  |  |

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | | | | | |  |  |  |
|  | Time horizons of realised pay | | | |  | Actual shareholding against Minimum  Shareholding Requirement (MSR) | | | |  |
|  | The structure of the remuneration is to underpin the focus on  long‑term performance that drives sustainable value for shareholders. | | | |  | As at 31 December 2023, Andrew King exceeded the MSR. Mike  Powell is on track to meet the MSR  within the timeframe permitted1. | | | |  |
|  | The time period to realise each element of pay is illustrated below: | | | |  |  | | | |  |
|  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |
|  | 1  Including Base Salary, Benefits and Pension.  Executive directors are required to hold shares equivalent to 300% and 250%  of salary respectively for the CEO and CFO. This requirement continues  for two-years post-employment. | | | |  | 1  Mike Powell joined the Board in November 2020. New appointees are  required to meet the relevant shareholding requirements within five years  from appointment.  The shares that are included for the purposes of the MSR include deferred BSP  shares, net of tax, and vested LTIP shares subject to a post-vesting holding  requirement. Unvested LTIP awards do not count towards the MSR. | | | |  |
|  |  |  |  |  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 128 |
|  |  |  |

#### Remuneration report

## Remuneration at a glance

#### continued

![21440476742729]()

![6047313952788]()

![6047313952833]()

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  | Year 1 |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Fixed pay1 |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | Annual  bonus | 50% cash | 50% in shares – deferred for three  years | | |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |
|  | LTIP | Three-year performance period | | | Two-year post-vesting  holding period | |

#### Mike Powell

1

#### , Group CFO

#### Andrew King, Group CEO

£3,226,277

£4,196,451

£3,497,506

£2,101,525

£2,189,834

£1,881,343

Base salary for 2024

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Name | Base salary  effective  1 Jan 2024 | Previous  base salary | % change |
| Andrew King | £1,100,338 | £1,073,500 | 2.5% |
| Mike Powell | £701,613 | £684,500 | 2.5% |

Andrew King’s and Mike Powell's base salaries were each increased by 2.5%; increases for the executive directors were in line with,

or below the increases applied to the wider UK workforce (typically 2.5% to 5%).

Bonus Share Plan (BSP) for 2024

The bonus structure for 2024 is shown below. Andrew King’s and Mike Powell’s maximum bonus opportunities will be 185% of base

salary and 170% of base salary respectively.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Measure | | Weighting (%) | Why chosen? | How targets are set |
| Underlying EBITDA | | 35% | Underlying EBITDA provides a measure  of the cash-generating ability of the business  that is comparable from year to year. | Targets and ranges are set each year by  the committee taking account of required  progress towards strategic goals, and the  prevailing market conditions. |
| ROCE | | 25% | ROCE provides a measure of the efficient  and effective use of capital in our operations. |
| Sustainability scorecard | |  | Reflects the strategic importance of progress  towards our MAP2030 framework. | Both lead and lag targets are set each year by  the committee, based on the specific priorities  in our MAP2030 framework.  The committee considers input from the  Sustainable Development Committee, and sets  appropriate standards and goals to reduce waste  and GHG emissions. |
|  | Safety | 10% | One of the key indicators of whether the  business is meeting its sustainability goal  of zero harm. |
|  | Greenhouse gas  emissions | 5% | One of our key Taking action on Climate  indicators in our MAP2030 framework. |
|  | Waste to landfill | 5% | One of our key circular driven solution  indicators in our MAP2030 framework. |
| Personal objectives | | 20% | An indicator of the contribution and impact  that each executive director is making to the  overall success of the management team. | Targets are set each year by the committee,  based on the specific priorities, milestones  and areas of responsibility of the role. |

Targets for the annual bonus will be disclosed collectively in next year’s report as the committee considers the financial targets

to be commercially sensitive. Half of any bonus earned in respect of 2024 performance will be paid out in cash and the other half

will be deferred into shares for three years as nil cost options.

Long-Term Incentive Plan (LTIP) for 2024

LTIP awards that are to be made in  2024 will be assessed against three performance measures: ROCE, TSR and EPS, weighted 50%,

25% and 25% respectively and measured over the three-year performance period commencing on 1 January 2024. The awards will be

subject to a two-year holding period from the date of vesting. The committee’s intention is to grant at the level of 230% of base salary

and 210% of base salary for Andrew King and Mike Powell respectively. The committee continues to exercise restraint by granting awards

below the policy maxima.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| Metric | Why chosen? | How targets are set |
| Average 3-year ROCE (50%) | A key indicator of the  efficient and effective use  of capital. | The committee sets threshold and stretch levels, aligned  to the Group’s strategic targets. ROCE targets for the LTIP  are detailed on the next page. |
| TSR, relative to a peer group of competitors  (25%) | TSR measures the total  returns to Mondi’s  shareholders, so provides  close alignment with  shareholder interests. | The committee sets the performance requirements for each  grant. A bespoke peer group of packaging and paper sector  companies is used. TSR targets with respect to the LTIP  are detailed on the next page. |
| Basic underlying EPS, measured on a  3‑year cumulative basis (25%) | A key growth measure that  represents the bottom-line  return and provides a  balance to the ROCE  and TSR metrics. | EPS targets are set in the context of the long-term financial  plan, reflecting basic underlying EPS. The EPS figures for  each year in the performance period are added together  to form a cumulative 3-year target. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 129 |
|  |  |  |

#### Remuneration report

## Statement of implementation of Directors’

## Remuneration Policy in

2024

The targets for the three-year performance period for the 2024 LTIP awards are as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Measure | Weighting  (%) | Threshold  (25% vesting) | Maximum  (100% vesting) |
| ROCE (average) | 50% | 12% | 16% |
| Mondi’s TSR relative to bespoke peer group | 25% | Median | Upper quartile |
| Cumulative EPS (euro cents per share) | 25% | 365 | 446 |

Between threshold and maximum, the LTIP awards will vest on a straight-line basis.

In setting the targets for the 2024 LTIP, the committee noted that the Russian operations had typically contributed approximately an

additional 300 basis points towards ROCE. The committee determined that the threshold ROCE performance level should be maintained

at 12% and the stretch performance level should be set at 16%. This adjustment of 200 basis points does not fully reflect the lost

contribution from the Russian assets. Therefore the committee considers the 16% ROCE target to be stretching.

The EPS targets are considered to be stretching in a macroeconomic environment going into 2024 that remains challenging.

The TSR peer group for the 2024 LTIP awards consists of the following companies. These are peers who are subject to broadly the same

market forces and trading environment as Mondi.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| BillerudKorsnäs | Huhtamaki | Mayr-Melnhof | Sappi | The Navigator Company |
| DS Smith | International Paper | Metsä Board | Smurfit Kappa | UPM |
| Holmen | Klabin | PCA | Stora Enso | WestRock |

The committee has discretion to amend the vesting outturn should any formulaic output be inappropriate (e.g. unreflective of underlying

performance). Where the provision is utilised, the committee will explain clearly the basis for this decision.

#### Non-executive directors’ remuneration

Fee levels are reviewed annually and, if appropriate, increased. Effective 1 January 2023, the non-executive director base fees, the

attendance fee for meetings outside country of residence (per meeting) and all supplemental fees were increased by 5%. For 2024,

the fee levels are as set out in the table below and are being held at 2023 levels.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| Role | Fees from  1 January 2024 | Fees from  1 January 2023 |
| Board Chair fee | £484,313 | £484,313 |
| Non-executive base fee | £81,870 | £81,870 |
| Additional fees: |  |  |
| Supplement for Senior Independent Director | £21,000 | £21,000 |
| Supplement for Audit Committee Chair | £22,000 | £22,000 |
| Supplement for Remuneration Committee Chair | £21,000 | £21,000 |
| Supplement for Sustainable Development Committee Chair | £21,000 | £21,000 |
| Supplement for the non-executive director responsible for understanding the views of employees | £11,000 | £11,000 |
| Attendance fee for meetings outside country of residence (per meeting) | £2,680 | £2,680 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 130 |
|  |  |  |

#### Remuneration report

## Statement of implementation of Directors’

## Remuneration

## Policy in

2024

#### continued

This part of the Directors’ Remuneration Report sets out the Directors’ Remuneration Policy (DRP) for the Group and has been prepared

in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended).

#### Remuneration Policy principles

Mondi’s approach is that remuneration should underpin the Group’s strategy. The remuneration is intended to attract, incentivise and retain

high calibre individuals.

The committee considers the principles set out in Provision 40 of the UK Corporate Governance Code when determining the design,

implementation and assessment of remuneration.

|  |  |
| --- | --- |
|  |  |
| Simplicity | We operate a simple remuneration structure of fixed pay + short-term incentive + long-term incentive,  avoiding undue complexity or the potential to deliver unintended outcomes. |
| Clarity | The committee is committed to transparency regarding the components of the remuneration structure,  the potential outcome and the rationale for the quantum of awards made. The choice of metrics and the  targets set for the assessment of performance under our variable pay plans underpin the overall strategy. |
| Risk | The remuneration structure and the variable pay plans reflect the risk appetite set by the Board.  The performance measures, and the targets set, do not encourage inappropriate behaviours or excessive  risk-taking. Holding periods are in place for the LTIP. Mitigation is provided through the application  of market practice aligned recovery provisions (both malus and clawback). The committee also retains  discretion to override formulaic vesting outcomes, where pay outcomes do not reflect the wider business  performance. The post-employment Minimum Shareholding Requirement (MSR) has been extended such  that 100% of the in-employment shareholding guideline must be held for two years post-employment,  further promoting the delivery of sustainable share price performance. |
| Predictability | The committee is confident that the remuneration structure and its operation are well understood  by participants, including potential outcomes driven by performance levels achieved. |
| Proportionality | The potential outcomes under the remuneration structure at threshold, target and maximum performance  levels have been assessed and are understood. The committee carefully considers the targets set for the  variable pay elements to ensure reward is appropriately linked to performance and to minimise the risk  of excessive outturns. The annual bonus and LTIP outturns are at the discretion of the committee. |
| Alignment to Culture | The committee considers that the remuneration strategy supports the wider strategy. The approach to pay  positioning, pension contribution levels and variable pay participation is applied consistently and underpins  the Mondi Group values. |

#### Remuneration policy for executive directors compared to other employees

The remuneration of the executive directors is higher than that of senior management and the wider workforce of the Group, reflecting

their market value. Salaries are paid fairly in relation to the market value of the role, recognising local markets and collective bargaining

agreements for the wider workforce. Executive salary increases are made in line with, or below those of the wider Mondi plc workforce,

taking into account salary increases across the wider Mondi Group. Pensions and benefits are offered to employees across the Group

according to the country, and the seniority of the role. The senior management participate in an annual cash bonus on similar terms to

the executive directors in terms of structure and metrics. The majority of the wider workforce participate in an annual bonus programme.

The main difference between the structure of reward for executive directors and employees in general is the proportion of the total

remuneration that is at risk and subject to performance. Executive directors and the most senior management participate in the LTIP,

in addition to the annual bonus.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 131 |
|  |  |  |

#### Remuneration report

## Directors’ Remuneration Policy

#### Executive directors’ remuneration policy table

The tables below set out the DRP (available on the Group website at [www.mondigroup.com/investors/results-reports-and-](https://www.mondigroup.com/investors/results-reports-and-presentations/?year=2022)

[presentations/?year=2022](https://www.mondigroup.com/investors/results-reports-and-presentations/?year=2022) in the Integrated report and financial statements 2022) for executive directors and non-executive directors

approved by shareholders on 4 May 2023 at the 2023 AGM. Awards made prior to the approval of this policy remain subject to the

prevailing approved policy at grant.

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Base salary | | | | | | |
| Purpose and link to strategy | | | To recruit and reward executives of a suitable calibre for the role and duties required. | | | |
| Operation | | | Ordinarily reviewed annually by the committee, taking account of a number of factors including (but not limited  to) Group and individual performance, the skills and experience of the individual and changes in role scope  and responsibilities. The committee also takes into consideration the levels of increase for the broader  employee population.  Reference is also made to remuneration levels in companies of similar size and complexity to Mondi.  The committee considers the impact of any base salary increase on the total remuneration package.  Salaries (and other elements of the remuneration package) may be paid in different currencies as appropriate  to reflect their geographic location. | | | |
| Performance measures | | | Whilst no formal performance conditions apply, an individual’s performance in role is taken into account when  determining any salary increase. | | | |
| Maximum opportunity | | | There is no prescribed maximum base salary or annual increase.  However, increases will normally not exceed the general level of increase awarded in the UK or the location  in which the executive is based (in percentage of salary terms). On occasion a higher increase may be awarded  in appropriate circumstances, for example:  – on promotion or development in role or change in responsibilities of the individual;  – where an individual has been appointed to the Board at lower than typical market salary to allow for growth  in the role, in which case larger increases may be awarded to move salary positioning to a typical market  level as the individual gains experience;  – change in size and/or complexity of the Group; and/or  – significant market movement. | | | |
|  | | |  | | | |
| Benefits | | | | | | |
| Purpose and link to strategy | | | To provide market competitive benefits. | | | |
| Operation | | | The Group typically provides:  – car allowance or company car;  – medical insurance;  – death and disability insurance;  – limited and specific personal taxation and financial advice; and  – other ancillary benefits based on individual circumstances, including relocation and assistance with expatriate  expenses.  Other benefits may be introduced from time to time to ensure the benefits package is appropriately  competitive and reflects the circumstances of the individual director. | | | |
| Performance measures | | | Not applicable. | | | |
| Maximum opportunity | | | While the committee has not set an absolute maximum on the level of benefits executive directors may  receive, the value is set at a level which the committee considers to be appropriately positioned taking into  account relevant market levels based on the nature and location of the role, and individual circumstances. | | | |
|  | | |  | | | |
| Pension | | | | | | |
| Purpose and link to strategy | | | To provide market competitive pension contributions or allowances. | | | |
| Operation | | | Defined contribution to pension, or cash allowance of equivalent value. Only base salary is pensionable. | | | |
| Performance measure | | | Not applicable. | | | |
| Maximum opportunity | | | Executive directors receive a company contribution and/or equivalent cash allowance not exceeding the contribution  available to the majority of the workforce in the relevant country (currently 8% of salary for the UK workforce).  Benefits under any non-UK pension arrangement may be provided in accordance with the terms of the applicable scheme. | | | |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 132 |
|  |  |  |

#### Remuneration report

## Directors’ Remuneration Policy

#### continued

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Bonus Share Plan (BSP) | | | | | | |
| Purpose and link to strategy | | | To provide incentive and reward for annual performance achievements. To also provide sustained alignment with  shareholders through a deferred component. | | | |
| Operation | | | Awards are based on annual performance against stretching financial and non-financial targets. Targets are  reviewed annually and any pay-out is determined by the committee after the year end based on targets set for  the financial period. For  2024, the table on page [129](#i47a6727b8bad4fe28addb4dae187e293_5497558142254) provides details of performance metrics, weightings, the  rationale and how targets are set.  The policy gives the committee the authority to select suitable performance metrics, aligned to Mondi’s strategy  and shareholders’ interests, and to assess the performance outcome.  The committee has discretion to amend the pay-out should any formulaic output not reflect the committee’s  assessment of overall business performance, or if the committee considers the formulaic outturn is not  appropriate in the context of other factors considered by the committee to be relevant.  Ordinarily, half of the award is delivered in cash and half is deferred into a conditional share award or a nil  (or nominal) cost option which normally vests following a three-year service period. Any dividend equivalents  accruing on shares between the date when the award was granted and when it vests, will be delivered in shares.  Malus and clawback provisions apply (page [134](#i94d37530b48645febc2d968dbcfb95e5_34789)). | | | |
| Performance measures | | | Performance is normally assessed against a balanced scorecard of metrics as determined by the committee from time  to time, such as underlying EBITDA, ROCE and sustainability. Individual performance may also be assessed against  suitable objectives aligned to the delivery of Mondi’s strategy. The majority of the bonus is assessed against  quantifiable financial and science-based sustainability measures, with over 50% assessed against financial targets.  The on-target bonus, as a percentage of maximum, has been reduced from 53% to 50% for non-financial targets,  aligned to the approach for financial targets for performance awards made in, and after 2023. Subject to the  committee’s discretion to override formulaic outturns, for financial measures and non-financial measures, no more  than 25% of maximum is earned for threshold performance, 50% of maximum is earned for on-target performance  and 100% of maximum is earned for maximum performance. | | | |
| Maximum opportunity | | | The maximum annual bonus opportunity for executive directors is 200% of base salary.  The committee retains discretion to set the actual maximum below the policy maximum. | | | |
|  | | |  | | | |
| Long-Term Incentive Plan (LTIP) | | | | | | |
| Purpose and link to strategy | | | To provide incentive and reward for the delivery of the Group’s strategic objectives, and provide further  alignment with shareholders through the use of shares. | | | |
| Operation | | | The committee may grant awards annually as conditional shares or as nil (or nominal) cost options.  Awards will usually vest to the extent that performance conditions are met, typically measured over three years.  A two-year post-vesting holding period normally applies to LTIP shares that vest (net of tax). The two-year  holding requirement will normally continue if the director leaves employment during the holding period or is  permitted to retain any part of the award as a good leaver. The shares held will count towards the executive  director’s normal shareholding requirement. For 2024, the tables on pages [129](#i47a6727b8bad4fe28addb4dae187e293_5497558142254) to [130](#ia7d4074c721b4c67865df96299b31ef3_7007) provide details of  performance metrics, weightings, the rationale and how targets are set.  The committee has discretion to vary the formulaic vesting outturn if it considers that the outturn does not  reflect the committee’s assessment of performance or is not appropriate in the context of other factors  considered by the committee to be relevant.  Dividend equivalents will accrue to the first date shares can be acquired and will be delivered in shares, based  on the proportion of the award that vests.  Under the plan rules, in exceptional circumstances, the committee has the ability to cash-settle awards, if  necessary. There is no current intention for awards for the executive directors to be delivered in this way.  Malus and clawback provisions apply (page [134](#i94d37530b48645febc2d968dbcfb95e5_34789)). | | | |
| Performance measures | | | Performance measures and targets are set each year by the committee, before the grant. The committee  annually reviews the performance measures, and in line with the rules of the LTIP, reserves the right to change  the measures and/or set different targets for future grants to ensure they remain appropriately challenging  in the prevailing economic environment.  Performance measures under the LTIP will be based on financial measures (which may include, but not be  limited to, total shareholder return, return on capital employed, and earnings per share) and may include  non‑financial measures (such as ESG measures). For awards granted in 2024, metrics comprise ROCE  (50% weighting), relative TSR (25% weighting) and cumulative EPS (25% weighting).  Subject to the committee’s discretion to override formulaic outturns, no more than 25% of the awards will  vest at threshold performance, increasing to 100% for maximum performance. | | | |
| Maximum opportunity | | | The maximum award level under the LTIP in respect of any financial year is 250% of base salary. | | | |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 133 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Executive directors’ remuneration policy table continued | | | | | | |
| Share ownership policy | | | | | | |
| Purpose and link to strategy | | | To further align the interests of executive directors with those of shareholders. | | | |
| Operation | | | The Minimum Shareholding Requirement (MSR) for the CEO is 300% of base salary and 250% for the CFO.  On appointment, an executive director is normally required to meet the MSR within five years from the date of  appointment.  While the executive director is building to the required shareholding level, deferred bonus awards under the BSP, net  of the expected tax liability, will count towards the requirement. Once the required shareholding has been met, such  shares will not count unless the committee, at its sole discretion, determines that a number of deferred shares may  count towards the holding requirement of a director.  Unvested LTIP awards (i.e. those awards where performance targets and/or a service requirement must still be met  for awards to vest) will not count towards the holding requirement. LTIP shares that have vested and on which tax has  been paid and that are within the two-year post-vesting holding period will count towards the holding requirement.  Previously compliant directors who do not meet the minimum requirement on annual assessment are normally  expected to achieve compliance by 31 December of the same year.  The executive directors are entitled to participate in the Company's all-employee share plans on the same basis  as all other employees.  Post-employment MSR:  A post-employment shareholding requirement applies. Under the policy, executive directors will be expected  to retain a shareholding for two-years post-employment.  For both years post-employment, the full in-employment MSR level applies. New executive directors who have not  achieved the necessary in-employment MSR level at date of exit, will be required to retain the actual level of shares  held at date of exit.  In order to allow the committee to deal with unexpected circumstances, the committee retains discretion on how  to operate the policy and may make exceptions and allowances as it sees fit. | | | |

#### Recovery provisions (Malus and Clawback)

The committee may operate malus and clawback (i) for a period of three years from the payment of the BSP cash award or (ii) until the date

of release for BSP share awards, and for a period of three years following the vesting date of LTIP awards.

The malus and clawback provisions for the BSP and LTIP are set out in the rules for each plan but, in summary, may be applied in the event of:

– misstatement of financial results;

– error or misstatement of performance;

– gross or serious misconduct;

– corporate failure;

– severe downturn in financial or operational performance; or

– severe reputational damage.

#### Committee discretion

The committee, consistent with market practice, retains discretion over a number of areas relating to the operation and administration of the DRP.

These include (but are not limited to) the following:

– who participates in the incentive plans;

– the timing of award grants and/or payments;

– the size of an award and/or a payment (within the limits set out in the DRP table on pages [132](#i94d37530b48645febc2d968dbcfb95e5_34790) to [134](#i94d37530b48645febc2d968dbcfb95e5_106878));

– the choice and weighting of performance metrics (in accordance with the statements made in the DRP table on pages [132](#i94d37530b48645febc2d968dbcfb95e5_34790) to [134](#i94d37530b48645febc2d968dbcfb95e5_106878));

– in exceptional circumstances, determining that any share-based award (or any dividend equivalent) shall be settled (in full or in part) in cash;

– discretion relating to the measurement of performance and pro-rating for time for LTIP awards in the event of a change of control or

restructuring;

– determination of a good leaver (in addition to any specified categories) for incentive plan purposes based on the rules of each plan and the

appropriate treatment in such circumstances;

– determining the extent of payment or vesting of an award based on the assessment of any performance conditions, including discretion

as to the basis on which performance is to be measured if an award vests in advance of normal timetable (on cessation of employment as

a good leaver or on the occurrence of a corporate event) and whether (and to what extent) pro-ration shall apply in such circumstances;

– whether (and to what extent) malus and/or clawback shall apply to any award;

– adjustments required in certain circumstances (e.g. rights issues, corporate restructuring, on a change of control and special dividends); and

– the ability to adjust existing performance conditions for exceptional events so that they can still fulfil their original purpose whilst being

no less stretching.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 134 |
|  |  |  |

#### Remuneration report

## Directors’ Remuneration Policy

#### continued

#### Remuneration scenarios at different

#### performance level

s

|  |
| --- |
|  |
| CEO – Andrew King |
|  |
| n Fixed pay  n BSP cash   n BSP shares   n LTIP |

![5497558144965]()

|  |
| --- |
|  |
| CFO – Mike Powell |
|  |
| n Fixed pay  n  BSP cash    n   BSP shares   n  LTIP |

![5497558144987]()

The charts above illustrate the total potential remuneration for each executive director at three performance levels.

Assumptions1:

Minimum = fixed pay only (salary + benefits + pension), resulting in £1,444,003 and £830,720 respectively.

On-target = 50% vesting of the annual bonus and LTIP awards, resulting in £3,727,205 and £2,163,783 respectively.

Maximum = 100% vesting of the annual bonus and LTIP awards, resulting in £6,010,406 and £3,496,847 respectively.

Share Price Growth = to reflect the impact of a share price increase between award and vesting, the LTIP value in the ‘Maximum’ column has been increased by 50%, resulting

in £7,275,795 and £4,233,540 respectively.

Salary levels (on which other elements of the package are calculated) are based on those applying on 1 January 2024.

#### Remuneration policy for non-executive directors

|  |  |  |
| --- | --- | --- |
|  |  |  |
| Element | Non-executive board chair fee | Other non-executive fees |
| Purpose and link to strategy | To attract and retain a high-calibre Chair and non-executives, with the necessary experience and skills.  To provide fees which take account of the time commitment and responsibilities of the role. | |
| Operation | The Chair receives an all-inclusive fee. The Chair’s  fee is reviewed periodically by the committee. | The non-executives are paid a basic fee.  Attendance fees are also paid to reflect the  requirement for non-executive directors to attend  meetings in various international locations.  Additional fees may be paid to reflect the extra  responsibilities and time commitments, including  but not limited to chairing main Board committees,  and in respect of the role of non-executive  director responsible for understanding the views  of employees. Non-executive directors’ fees  are reviewed periodically by the Chair and  executive directors. |
| Non-executive directors are not eligible to participate in any of the Group’s share schemes, incentive  schemes or pension schemes.  The Group may reimburse the reasonable expenses of Board directors that relate to their duties on behalf  of Mondi (including tax thereon if applicable). The Group may also provide advice and assistance with  Board directors’ tax returns where these are impacted by the duties they undertake on behalf of Mondi. | |
| Maximum opportunity | While there is not a maximum fee level, fees are set by reference to market median data for companies  of similar size and complexity to Mondi. | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 135 |
|  |  |  |

1

1

1

1

1

1

1

1

100%

38%

14%

14%

34%

24%

20%

17%

14%

17%

42%

52%

14%

100%

38%

14%

14%

34%

24%

20%

17%

14%

17%

42%

52%

14%

#### Remuneration policy for executive directors compared to the wider workforce

The remuneration policy for executive directors reflects the different levels of responsibility and market practices. The key difference

to the remuneration of the wider workforce is the proportion of remuneration that is 'at risk'. For senior roles, a higher proportion of the

remuneration package is comprised of variable pay which drives an increased emphasis on pay for performance. Only a small number

of the most senior colleagues participate in the LTIP and the BSP. Participation in these plans is focused on those individuals who have

the greatest accountability for the performance of the Group.

#### Directors' contracts and notice periods

#### Executive Directors

Andrew King's and Mike Powell's service contracts provide for termination on one year’s notice by either party. The Group may elect

to make a payment in lieu of notice and, if it does so, to apply mitigation. Payment in lieu of notice would comprise base salary, benefits

and pension contributions for the notice period (or, if applicable, the balance of the notice period).

A director’s service contract may be terminated without notice and without any further payment or compensation, except for sums

accrued up to the date of termination, on the occurrence of certain events such as gross misconduct.

#### Non-executive directors

All non-executive directors have letters of appointment with Mondi plc for an initial period of three years. In accordance with best

practice, non-executive directors are subject to annual re-election at the Annual General Meeting. Appointments may be terminated

by either party with six months’ notice. No compensation is payable on termination, other than accrued fees and expenses.

#### Service contracts for new appointments

Normally, for any new executive director appointments, the Group’s policy is that the service contracts should provide for one year’s

notice by either party. The contract would provide that, in the event of termination by the company, other than for ‘cause’, the executive

would be eligible for payment of the base salary, pension contribution and benefits in respect of the unexpired portion of the 12-month

notice period.

The committee would take account of the remuneration and contract features that the executive may be forgoing or relinquishing

in order to join Mondi, in comparison with the overall remuneration package that Mondi is able to offer.

The committee may consider compensating a newly-appointed executive director for other relevant contractual rights forfeited when

leaving their previous employer and/or remuneration foregone as a result of leaving their previous employer.

#### Approach to remuneration on recruitment

The appointment of high calibre executives to the Board, whether by internal promotion or external recruitment is important for the

success of the Group. The remuneration package for a newly appointed executive director would be set in accordance with the prevailing

approved remuneration policy at the time of appointment. Base salary would be set at an appropriate level taking into consideration the

skills and experiences of the individual, the complexity of the role and the individual's current remuneration. The variable pay would be

considered consistent with that of existing executive directors and would be subject to the maximum limits of the policy. Certain relocation

expenses may be met, as appropriate.

For an internal appointment, any existing pay components awarded in respect of the prior role would be allowed to pay out in accordance

with the terms of the award.

For external appointments, the committee may offer additional cash and/or share-based payments to replace any variable pay awards an

individual may have forgone to join Mondi, if it considers these to be in the best interests of the Group and its shareholders. This includes

awards made under Section 9.4.2 of the UK Listing Rules. Any such payments would take account of the remuneration forgone including

the nature of the award, the time horizons and any performance conditions attached to the award. The key terms and an explanation

of the rationale for such a component would be disclosed in the remuneration report for the relevant year.

Depending on the timing of the appointment, the committee may consider it appropriate to set different annual performance conditions

for the first performance year of appointment.  An LTIP award may be made shortly after appointment, or as soon as practical following

a closed period.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 136 |
|  |  |  |

#### Remuneration report

## Directors’ Remuneration Policy

#### continued

#### Policy on loss of office

Notice periods will not normally exceed 12 months. The Group may elect to make a payment in lieu of notice as determined by the

respective contract of employment, taking account of local employment law, and, if it does, to apply mitigation. The committee reserves

the right to make any other payments in connection with an executive director’s cessation of office or employment where the payments

are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of

settlement of any claim arising in connection with the cessation of a director’s office or employment. Any such payments may include but

are not limited to paying any fees for outplacement assistance and/or the director’s legal and/or professional advice fees in connection

with their cessation of office or employment.

The Group would seek to apply the principles of mitigation to any payment in lieu of notice by, for example, making payments in

instalments that can be reduced or ended if the former executive wishes to commence alternative employment during the payment

period. An executive director’s eligibility for bonus on cessation of employment will be determined by the committee in accordance with

the relevant plan rules, taking into account the reason for their departure and prevailing local legislation. Where eligible, the departing

director’s bonus would typically be determined in the normal way after the relevant year end, i.e. based on the applicable performance

conditions, pro-rated for the period worked in that year, save that no portion would be required to be deferred into a BSP award.

However, the committee has the discretion to apply different treatment. Any share-based entitlements granted to an executive director

under the Group’s share plans will be determined based on the relevant plan rules. The default treatment is that any outstanding

awards lapse on cessation of employment. However, in certain prescribed circumstances, such as death, disability, retirement or other

circumstances at the discretion of the committee (taking into account the individual’s performance and the reasons for their departure)

‘good leaver’ status can be applied. For good leavers, vesting of BSP awards is accelerated to as soon as practical after employment

termination (as they are not subject to performance conditions). Typically, LTIP awards remain subject to performance conditions

(measured over the original time period) and are reduced pro rata to reflect the proportion of the performance period actually served.

The committee has the discretion to apply different treatment (including to disapply the application of performance conditions and/or

time pro rating) if it considers it appropriate to do so. However, it is envisaged that this would only be applied in exceptional

circumstances. Post-vesting holding periods will normally continue to apply, notwithstanding any cessation of employment.

#### Statement of consideration of employment conditions elsewhere in the Group

The remuneration of the executive directors and other senior colleagues is set, taking into appropriate account the pay, pay practices

and employment conditions of the wider workforce, on which the committee receives regular detailed updates. In determining the

proposed salary increases for the executive directors and individuals within the remit of the committee, the committee is well positioned

to consider the wider workforce increases as part of their decision-making.

There is no formal consultation with employees on the DRP; however, employees are encouraged to provide feedback, on remuneration

and wider topics, across a number of channels. A purposeful workplace is a key theme of MAP2030 and understanding the views of our

employees to address the things that matter to them is at the core.

During the year we completed our latest Group-wide Employee Survey, conducted every two years. The Board received reports on the

results of our Employee Survey, the issues raised and the follow-up actions being taken, giving the Board an insight into how employees

feel about the culture of the Group and particular areas that may need addressing. The results were used to calculate our Purposeful

Workplace, Inclusiveness and Wellbeing scores, which provide the Board with an objective way to assess employee views. These

activities provide targeted insights and create further opportunities to engage with our global workforce.

During 2023, Sue Clark, our NED responsible for understanding the views of employees, participated in Mondi's annual European

Communication Forum meeting, alongside representatives from our European plant network. She also engaged with a cross-section

of employees during a number of site visits, more details of which can be found on page [94](#ia559d9ce3a2a4113b410c2cb911d3d05_1-1-5-1-472681).

Over the course of the year, a session was run where the Remuneration Committee Chair engaged with employees from most of the

countries we operate in to discuss the role and responsibility of the Board at Mondi, and specifically the role of the Remuneration

Committee. Employees had the opportunity, and were encouraged, to ask questions and share their views.

The Board receives feedback from these, and other activities, to better understand the experience of a Mondi employee and to support

their decision making.

#### Statement of consideration of shareholder views

The committee takes into account the views of shareholders in the formulation of the Directors' Remuneration Policy and the

implementation of the policy. In early 2023 we consulted with our major shareholders as part of the process of updating our DRP

which shareholders voted in favour of at our 2023 AGM. Over the course of the year, the Chair, the Remuneration Committee Chair

and executive directors engaged with shareholders on a number of matters including remuneration with feedback presented to the

Board. Feedback received from shareholders at the Annual General Meeting is also considered. In the event that either the DRP

or implementation resolutions receive a significant proportion of votes against, the committee will seek to engage further with

shareholders to understand better the reasons for their voting decision.

#### Legacy arrangements

For the avoidance of doubt, in approving this policy report, authority is given to the Group to honour any commitments entered into

with current or former directors that have been disclosed to shareholders in previous remuneration reports. Details of any payments

to former directors will be set out in the annual report on remuneration as they arise.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 137 |
|  |  |  |

#### Mondi’s TSR performance over the last ten years

The following graph sets out the comparative TSR of Mondi plc relative to the FTSE 100 Index, for the period between 31 December

2013 and 31 December 2023. The FTSE-All-Share Index had been used in previous reports. Mondi plc is a constituent of the FTSE 100

Index, which is why this index was considered a more appropriate Index for this report.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  |  | | |  |
|  | Total shareholder return – Mondi  vs FTSE 100 | | |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |

This graph shows the value, by 31 December 2023 of £100 invested in Mondi plc on 31 December 2013, compared with the value of £100

invested in the FTSE 100 Index on the same date. TSR has been calculated on a three-month average basis.

#### Historical CEO remuneration

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Year | CEO | Total remuneration | % of maximum  bonus earned | % of LTI  vested |
| 2023 | Andrew King | £3,226,277 | 29% | 61.25% |
| 20221 | Andrew King | £4,196,451 | 96% | 50.0% |
| 2021 | Andrew King | £3,497,506 | 97% | 45.6% |
| 20202 | Andrew King / Peter Oswald | £3,559,580 | 42% | 50.0% |
| 2019 | Peter Oswald | £3,322,216 | 44% | 67.2% |
| 2018 | Peter Oswald | £3,906,849 | 88% | 76.6% |
| 20173 | Peter Oswald / David Hathorn | £3,354,544 | 63% | 72.5% |
| 2016 | David Hathorn | £4,867,142 | 69% | 92.5% |
| 2015 | David Hathorn | £5,255,561 | 90% | 100.0% |
| 2014 | David Hathorn | £5,859,585 | 92% | 100.0% |

1 The three-year performance cycle of the 2020 LTIP award ended on 31 December 2022. The award value shown in the 2022 Remuneration report was calculated using

the average share price, being £14.78. The actual share price on vesting was £14.17. The award values for 2022 have been restated on this basis.

2 Andrew King’s and Peter Oswald's 2020 total remuneration of £1,995,465 and £1,564,115 respectively is in respect of their tenure as Group CEO. Their salary and bonus have

been subject to a pro-rata time reduction. The bonus earned and LTIP vested were based on their remuneration in the role as Group CEO. Peter's bonus earned was 41%

of maximum bonus opportunity.

3 For 2017 the CEO remuneration reflects David Hathorn’s total remuneration of £991,584 up to his retirement from the Boards (the simplification of Mondi's corporate

structure into a single holding company structure under Mondi plc became effective in 2019) on 11 May 2017, including the pro-rata CEO annual bonus, and Peter Oswald’s

total remuneration of £2,362,960, including base salary, pension, benefits and pro-rata CEO annual bonus, as well as the 2015 LTIP vesting amount, with effect from

11 May 2017.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 138 |
|  |  |  |

#### Remuneration report

## Annual report on remuneration

![21440476741657]()

2023

#### remuneration of directors (audited)

The remuneration policy operated as intended in 2023. The provisions of malus and clawback have not been applied in 2023.

The table below sets out the total remuneration for each person who served as a director in the years ended 31 December 2023

and 31 December 2022. A full breakdown of fixed pay and pay for performance in 2023 is detailed below.

#### Executive

#### directors

|  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Fixed pay | | | |  | Pay for performance | | | | | |  |
|  | Base salary | Benefits1 | Pension  contribution7 | Total fixed  remuneration |  | Annual bonus  including  grant value of  BSP award2 | Value of LTIP  vesting in  respect of the  performance  period ended  in the year  3 4 | Value of LTIP  vesting at  date of grant | Share price  gain on  vesting  LTIP award  between  grant and  vest dates | Other1 | Total variable  remuneration | Total |
| 2023 |  |  |  |  |  |  |  |  |  |  |  |  |
| Andrew  King | £1,073,500 | £255,638 | £85,880 | £1,415,018 |  | £575,934 | £1,233,525 | £1,391,855 | — | £1,800 | £1,811,259 | £3,226,277 |
| Mike  Powell | £684,500 | £72,978 | £54,760 | £812,238 |  | £349,096 | £718,209 | £810,364 | — | £1,800 | £1,069,105 | £1,881,343 |
| 2022 |  |  |  |  |  |  |  |  |  |  |  |  |
| Andrew  King | £1,012,700 | £207,865 | £81,016 | £1,301,581 |  | £1,798,556 | £1,094,514 | £1,115,507 | — | £1,800 | £2,894,870 | £4,196,451 |
| Mike  Powell | £645,750 | £39,124 | £51,660 | £736,534 |  | £1,064,842 | £298,349 | £273,630 | £5,690 | £1,800 | £1,364,991 | £2,101,525 |

#### Non-executive

#### directors

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | Year ended 31 December 2023 | | | Year ended 31 December 2022 | | |
|  | Fees | Other5 | Total | Fees | Other5 | Total |
| Philip Yea | £484,313 | — | £484,313 | £461,250 | — | £461,250 |
| Svein Richard Brandtzaeg | £100,630 | £8,214 | £108,844 | £95,836 | £3,456 | £99,292 |
| Sue Clark | £95,550 | — | £95,550 | £83,076 | — | £83,076 |
| Anke Groth6 | £74,803 | £2,200 | £77,003 | — | — | — |
| Saki Macozoma | £95,270 | £495 | £95,765 | £61,477 | £3,672 | £65,149 |
| Dominique Reiniche | £132,873 | £4,521 | £137,394 | £108,180 | £2,971 | £111,151 |
| Dame Angela Strank | £105,550 | — | £105,550 | £96,281 | — | £96,281 |
| Stephen Young | £111,004 | — | £111,004 | £124,076 | — | £124,076 |

1 Included in this column are accommodation costs, car allowance, life and health cover. For Andrew King, this figure also includes accommodation costs in Vienna for his

business travel of £48,614, a total of £32,454 for UK, South African and Austrian tax advice benefit, a total tax equalisation and other benefit gross-ups of £146,221 and a car

allowance of £19,300. For Mike Powell, this figure includes tax advice benefit of £21,962, a total tax equalisation and other benefit gross-ups of £24,955 and a car allowance

of £19,300.The column 'Other' shows matching SIP shares.

2 This is the total annual bonus amount awarded in respect of the financial year 2023, and includes both the upfront cash element and the deferred share award (pages [140](#i35a183d9445545de8782edc2ff7acf30_23547) to [143](#i35a183d9445545de8782edc2ff7acf30_23548)).

3 For 2023, the three-year performance cycle of the 2021 LTIP ended on 31 December 2023 and the awards will vest in Q1 2024 and be subject to a two-year post vesting

holding period until 2026. The award value (including equivalent dividends on LTIP shares due to vest in March 2024 set out on page [144](#i47a6727b8bad4fe28addb4dae187e293_5497558142335)) shown is based on the average

share price over the last three months of the financial year ended  31 December 2023 of £13.98. The 2021 LTIP awards were granted on 12 March 2021, when the share price

was £17.66. This equated to a decrease in value of £3.68 per share. As a consequence a zero gain is shown. Andrew’s and Mike's loss due to share price depreciation was

£290,036 and £168,864 respectively.

4 In the 2022 remuneration report, the value of the 2020 LTIP awards vesting for which the three-year performance cycle ended on 31 December 2022 was calculated using

the average share price for the three months ended 31 December 2022, being £14.78 (including equivalent dividends on LTIP shares vested in March 2023). The actual share

price on vesting was £14.17. The award values for 2022 have been restated on this basis.  Andrew King's award was granted on 11 May 2020, when the share price was

£15.85. This equated to a decrease in value of £1.68 per share. As a consequence a zero gain is shown for Andrew King. Andrew’s loss due to share price depreciation was

£118,332 (excluding dividend equivalents). As disclosed in the 2020 remuneration report, Mike Powell’s 2020 LTIP award was granted on 2 December 2020, with a grant share

price of £13.88, in respect of incentives forgone as a result of leaving his former employer. This equated to an increase in value of £0.29 per share.

5 Svein Richard Brandtzaeg, Anke Groth, Saki Macozoma and Dominique Reiniche received tax advice in the year, constituting taxable benefits to the gross values shown

in this column.

6 Anke Groth was appointed as non-executive director on 1 April 2023. The 2023 figures reflect her remuneration as a non-executive director from 1 April 2023

to 31 December 2023.

7 None of the non-executive directors have entitlements to pension-related benefits. Pension benefits of 8% of salary respectively are delivered as pension contribution

of £8,500 and cash allowance of £77,380 to Andrew King and as cash allowance of £54,760 to Mike Powell.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 139 |
|  |  |  |

#### Annual bonus

2023

#### bonus outcomes

#### (audited)

For the annual bonus in respect of 2023 performance, the performance measures and total outcomes for each executive director were:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | BSP performance measures | | | | |
|  | Underlying EBITDA | ROCE | Sustainability  scorecard | Personal objectives | Total |
| Weight (% max) | 35 | 25 | 20 | 20 | 100 |
| Outcomes: |  |  |  |  |  |
| Andrew King (% of max) | — | — | 12 | 17 | 29 |
| Mike Powell (% of max) | — | — | 12 | 18 | 30 |

The majority of the 2023 annual bonus was assessed against financial measures; underlying EBITDA and ROCE.

The sustainability scorecard includes safety (10/20), reduction in GHG emissions (5/20) and elimination of waste to landfill (WtL) (5/20) measures.

The safety element of the scorecard includes lead and lag indicators:

– Five points relate to the achievement of lead indicators. This is reflective of Mondi’s values and proactive approach to safety.

This is a shared objective requiring individual involvement of all members of the Executive Committee. All the individual activities must

be completed by the Executive Committee members to achieve the five points. If all the activities in their entirety are not achieved,

then these five points lapse in full for all.

– A further five points relate to the lag indicator, assessed against an annually defined Total Recordable Case Rate. In the event of any

work-related fatality, the Remuneration Committee makes an assessment on a case-by-case basis and will utilise its discretion to

adjust any pay-outs under the bonus, if appropriate.

The remaining 20 points of the annual bonus are assessed against personal objectives (pages [142](#i35a183d9445545de8782edc2ff7acf30_68170)-[143](#i35a183d9445545de8782edc2ff7acf30_23548)).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 140 |
|  |  |  |

#### Remuneration report

## Annual report on remuneration

#### continued

Financial and Sustainability elements and outcomes of the 2023 annual bonus (audited):

Threshold levels of performance were not met for either of the financial metrics, resulting in 0% of these elements being achieved.

The performance against the sustainability scorecard was partially achieved. While the waste to landfill target was achieved, contributing

5% to the bonus outturn, the GHG emissions target was not and this element of the bonus was forfeited. These outcomes contributed

to 5% out of a maximum of 10% to the bonus.

Performance against the safety lead and lag indicators would have resulted in the full 10% of the bonus being achieved.  The Executive

Committee individually and collectively achieved all of the lead indicators, aimed at reinforcing safety as our highest priority, and our

Social Psychology of Risk approach.

There was a work-related fatality in 2023 at the Ružomberok mill in Slovakia. The Remuneration Committee and Sustainable Development

Committee independently reviewed the detailed investigation report of the incident and agreed with the findings. After careful deliberation

and discussion, the Remuneration Committee concluded that a downward adjustment of three percentage points of the lag indicator metric

was appropriate. This resulted in 60% of the lag indicator metric being forfeited.

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| Performance measure | Weighting | Threshold | % of bonus payable  for threshold  performance | Maximum | Outcome | % of bonus  opportunity  achieved | | |
| Underlying EBITDA | 35% | €1,239m | 8.75% | €1,677m | €1,201m | 0% |  |  |
| ROCE | 25% | 14.6% | 6.25% | 19.8% | 12.8% | 0% |  |  |
| Sustainability scorecard |  |  |  |  |  |  |  |  |
| Safety lead indicators (SLI) | 5% |  | Binary | Binary | Achieved in full | 5% |  |  |
| Safety lag (TRCR) | 5% | 0.72 | 1% | 0.65 | 0.64 | 2% |  |  |
| Greenhouse gas (GHG) emissions | 5% |  | Binary | 0.40 t/t | 0.43 t/t | 0% |  |  |
| Waste to landfill (WtL) | 5% |  | Binary | 20.40 kg/t | 13.28 kg/t | 5% |  |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | At or above maximum |  | Between threshold and maximum |  | Below threshold |

#### CEO

Bonus outcome as percentage of maximum opportunity: 29%

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Underlying EBITDA | | | | | 35%  (Max) | | ROCE | | | 25%  (Max) | | Sustainability scorecard | | | | 20%  (Max) | Personal objectives | | | 20%  (Max) |
|  | | | | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  | 5% | 2% |  |  | 5% | 17% | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  | SLI | TRCR | | GHG | WTL |  | | |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | Performance measure achieved |  | Sustainability performance measure achieved |  | Performance measure not achieved |

#### CFO

Bonus outcome as percentage of maximum opportunity: 30%

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Underlying EBITDA | | | | | 35%  (Max) | | ROCE | | | 25%  (Max) | | Sustainability scorecard | | | | 20%  (Max) | Personal objectives | | | 20%  (Max) |
|  | | | | | | | | | | | | | | | | | | | | |
|  |  |  |  |  |  |  |  |  |  |  |  | 5% | 2% |  |  | 5% | 18% | | |  |
|  |  |  |  |  |  |  |  |  |  |  |  | SLI | TRCR | | GHG | WTL |  | | |  |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | Performance measure achieved |  | Sustainability performance measure achieved |  | Performance measure not achieved |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 141 |
|  |  |  |

#### Achievement against personal objectives

 of executives for 2023

#### bonus (audited)

|  |  |
| --- | --- |
|  |  |
| Key personal objectives and achievements | |
| The executive directors share many key objectives and also have individual objectives that are specific to their roles. Key objectives,  and achievements against these objectives during  2023 , included: | |
| Strategy development  and execution | – Continued investment in our business to drive profitable growth, enhance our product offering,  quality and service to customers, strengthen our cost competitiveness and improve our  environmental footprint including:  – Good progress with our €1.2 billion of organic growth investment projects which remain  on track and on budget including:  ◦ Completed the acquisition of the Duino mill (Italy) in January 2023 and subsequently  approved plans to convert the existing paper machine into a high-quality, cost-competitive  recycled containerboard machine with an annual capacity of around 420,000 tonnes.  ◦ Completed the €125 million project at Kuopio (Finland) in the fourth quarter of the year.  ◦ Excellent progress on the €400 million investment in a new kraft paper machine at Štětí  (Czech Republic).  – Completed the acquisition of the Hinton Pulp mill in Alberta, Canada, with the intention to  invest in the mill to improve productivity and sustainability performance and, subject to pre-  engineering and permitting, invest in expanding the facility primarily with a new kraft paper  machine to integrate our paper bag operations in the Americas.  – Progressed against our MAP2030 sustainability targets and commitments, including:  – Increased the proportion of our products that are reusable, recyclable or compostable with  85% of our packaging and paper revenue meeting our requirements in 2023.  – Continued to reduce our greenhouse gas emissions and remain on target to achieve our  Net‑Zero GHG emissions reduction targets. In 2023, we reduced our Scope 1 and 2  greenhouse gas emissions by 22% against our 2019 baseline.  – Continued product development and innovation activities, supporting customers transition  to more sustainable packaging solutions.  – Examples of our recent customer product launches include:  ◦ A recyclable, premium protective packaging for NKE’s wind turbine components, designed  to eliminate damage during transport with integrated shock sensors providing real-time  feedback on the product’s condition before installation.  ◦ A recyclable, mono-material plastic solution for Fressnapf’s dry pet food packaging with  strong barrier properties, designed to offer premium brand appeal and product protection.  ◦ External validation of our product innovations including being awarded four of  the prestigious global 2024 WorldStar Packaging Awards and a number of other  national awards. |
| Operational and financial  performance | – Resilient performance with strong cash flow in challenging markets.  – Underlying EBITDA of €1,201 million, cash generation from operations of €1,312 million, basic  underlying earnings per share of 107.8 euro cents, and ROCE of 12.8%.  – Continued to drive operational and commercial excellence initiatives across the value chain.  – Increased the proportion of our product portfolio that is reusable, recyclable or compostable,  achieving 85% in the year.  – Ongoing product development and continuing to be externally recognised for our award-winning  sustainable solutions.  – Focus on continuous improvement initiatives to enhance productivity and efficiency, improve  quality standards and reduce costs across the business, including the use of digital initiatives.  – Maintained high levels of engagement with colleagues including the Group-wide  Employee Survey. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 142 |
|  |  |  |

#### Remuneration report

## Annual report on remuneration

#### continued

|  |  |
| --- | --- |
|  |  |
| Financial efficiency  and financing | – Maintained strong financial position.  – Including receipt of the proceeds from the disposal of the Group's Russian operations, net debt  at 31 December 2023 was €419 million, with net debt to underlying EBITDA at 0.3 times  (31 December 2022:€1,011 million, 0.5 times). Adjusting for the special dividend paid in February  2024, the pro-forma net debt and net debt to underlying EBITDA was €1,195 million and 1.0  times, respectively.  – At  31 December 2023, Mondi's liquidity position was €2.3 billion, comprising €754 million of  undrawn committed debt facilities and cash and cash equivalents of €1,592 million. Adjusting  for the special dividend paid in February 2024, the Group retains a strong liquidity position of  €1.6 billion.  – The Group maintained its investment grade credit ratings. In May 2023, Standard & Poor’s  upgraded the Group's credit rating from BBB+ to A- (stable outlook). Moody’s Investors  Service reaffirmed the Group's credit rating at Baa1 (stable outlook) during the year. |
| Completed the divestiture of all  the Group’s Russian assets | – In June 2023, the Group received proceeds of €30 million following the completion of the sale  of its three Russian packaging converting operations.  – In October 2023, the Group completed the sale of the Syktyvkar  mill, its most significant facility  in the country, and received proceeds of  €776 million  from the disposal.  – Following these disposals, the Group concluded its exit from Russia and announced the net  proceeds of both sales would be returned to shareholders by way of a Special Dividend valued  at €1.60 per share with an associated share consolidation.  – The Share Consolidation and Special Dividend payments were both completed early in 2024. |
| The overall personal ratings of  the executive directors were: | – Andrew King 17/20  – Mike Powell 18 /20 |
|  |  |

#### Detail of annual bonus awarded for the year (audited)

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| Name | Maximum bonus  (% of salary) | Maximum  bonus | % of maximum | Awarded  in cash | Awarded  in shares | Total |
| Andrew King | 185% of salary | £1,985,975 | 29% | £287,967 | £287,967 | £575,934 |
| Mike Powell | 170% of salary | £1,163,650 | 30% | £174,548 | £174,548 | £349,096 |

The committee reviewed performance against the targets of each scorecard measure. In addition, the overall bonus outturn was

considered in the context of the wider performance of the Group. In challenging markets, strong cash flow was delivered and excellent

progress was made against strategic objectives. The progress of long-term investment projects will ensure that Mondi is well-positioned

for a sustainable future.

As a consequence of the circumstances of the fatality, the committee applied its discretion and a three percentage points downward

adjustment to the bonus outcome was made. Overall, the committee considers that annual bonus outturns for Andrew and Mike of 29%

and 30% of maximum respectively, are a fair reflection of the performance of the business and their individual performance against

personal objectives.

In accordance with our DRP, 50% of the bonuses earned are paid in cash, the remaining 50% is deferred into shares which are released

after three years. No further conditions are attached to these shares, except for being in service at date of vesting.

#### BSP awards granted in

2023

#### (audited)

On 6 March 2023 the committee made the following awards under the Group’s BSP to the following executive directors in relation

to the 2022 bonus outcome.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Name | Type of award | Relating to FY | Number of shares | Share price at grant1 | Face value of shares |
| Andrew King | Nil-cost option | 2022 | 63,779 | £14.10 | £899,284 |
| Mike Powell | Nil-cost option | 2022 | 37,761 | £14.10 | £532,430 |

1 Being a three-day average share price commencing on the day of announcement of financial results.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 143 |
|  |  |  |

#### Long-Term Incentive Plan (LTIP) (audited)

Vesting of the 2021

#### awards

The LTIP awards that were granted in 2021, with a three-year performance period ending on 31 December 2023, will vest in Q1 2024

at 61.25% of maximum against the (equally weighted) relative TSR and ROCE performance conditions, as shown in the table below.

The committee considered the level of pay-out to be reflective of the overall performance of the Group. No discretion was exercised

by the committee in determining the vesting outcomes.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Measure | Weighting (%) | Threshold  (25% vesting) | Maximum  (100% vesting) | Actual | Actual vesting  (% of max. LTIP  opportunity) |
| Mondi’s TSR relative to bespoke peer group | 50% | Median | Upper quartile | Median | 12.50% |
| ROCE (average) | 50% | 12% p.a. | 18% p.a. | 17.8% p.a.1 | 48.75% |
|  |  |  |  | Total vesting  (% of max) | 61.25% |

1 The three-year average ROCE that was achieved was 17.8% (16.9% in 2021, 23.7% in 2022 and 12.8% in 2023).

Mondi plc achieved a TSR of 2.17%, over the three-year performance period, ranking 8th in the TSR peer group, equivalent to median

TSR performance and 25% vesting. Therefore 12.50% of the maximum 2021 LTIP award will vest as a result of the TSR performance.

Mondi plc achieved a three-year average ROCE of 17.8%. This resulted in vesting of 97.50% of this element. Therefore 48.75% of the

maximum 2021 LTIP award will vest as a result of the ROCE performance.

Taking into account both ROCE and TSR performance, in total, 61.25% of the maximum 2021 LTIP award will vest.

Details of 2021

#### LTIP vesting

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| Name | Number of  awards granted | Vesting  performance | Shares vesting | Dividend  equivalents | Total number of  shares vesting | Average share  price | Total estimate  value of award  on vesting |
| Andrew King | 128,675 | 61.25% | 78,814 | 9,421 | 88,235 | £13.98 | £1,233,525 |
| Mike Powell | 74,916 | 61.25% | 45,887 | 5,487 | 51,374 | £13.98 | £718,209 |

In accordance with the DRP, vested awards are subject to a two-year holding period whereby the executive (including those who have

left employment) must retain the number of vested shares net of tax for a minimum of two years from the point of vesting.

#### Awards granted in

2023

#### (audited)

On 6 March 2023, the committee made the following awards under the Group’s LTIP to the following executive directors:

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| Name | Type of award | Basis of award | Number of shares | Share price at  grant1 | Face value of  shares | Vesting at  minimum  performance | End of performance  period |
| Andrew King | Nil-cost option | 230% of salary | 175,110 | £14.10 | £2,469,051 | 25% | 31/12/25 |
| Mike Powell | Nil-cost option | 210% of salary | 101,947 | £14.10 | £1,437,453 | 25% | 31/12/25 |

1 Being a three-day average share price commencing on the date of the announcement of the financial results.

The performance conditions, as summarised in the table below, are based on three performance measures – ROCE (50%), TSR, relative

to a peer group (25%) and cumulative EPS (25%) – measured over a three-year performance period ending on 31 December 2025.

This combination of metrics provides an appropriate means of aligning the operation of the LTIP with shareholders’ interests and the

Group’s strategy.

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Measure | Weighting  (%) | Threshold  (25% vesting) | Maximum  (100% vesting) |
| ROCE (average) | 50% | 12% | 18% |
| Mondi’s TSR relative to bespoke peer group | 25% | Median | Upper quartile |
| Cumulative EPS (euro cents per share) | 25% | 443 | 541 |

Between threshold and maximum the LTIP awards will vest on a straight-line basis.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 144 |
|  |  |  |

#### Remuneration report

## Annual report on remuneration

#### continued

The TSR performance condition is based on the Group’s TSR relative to a group of competitor companies. The following companies

were selected:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| BillerudKorsnäs | Huhtamaki | Mayr-Melnhof | Sappi | The Navigator Company |
| DS Smith | International Paper | Metsä Board | Smurfit Kappa | UPM |
| Holmen | Klabin | PCA | Stora Enso | WestRock |

The committee has discretion to amend the vesting outturn should the formulaic assessment not be reflective of the underlying business

performance. Where the provision is utilised the committee will seek to explain clearly the basis for this decision.

#### Payments to past directors (audited)

There were no payments made to past directors during the period.

#### Payments for loss of office (audited)

There were no payments for loss of office made to directors or past directors during the period.

#### CEO

#### pay ratio

Mondi is not required to report the CEO pay ratio, employing fewer than the threshold 250 people in the UK. However, in line with our

commitment to fairness and transparency, a voluntary disclosure is being made for the three years 2021, 2022 and 2023.

The table below sets out the pay ratio of the Group CEO compared to the 25th, 50th (median) and 75th percentile employee, based

on total remuneration of all permanent Mondi plc employees. A snapshot date of 31 December 2023 was used. This group of employees

represents less than 1% of our global workforce.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Year | Method | 25th percentile  pay ratio | Median  pay ratio | 75th percentile  pay ratio |
| 2023 | Option A | 41:1 | 22:1 | 14:1 |
| 2022 | Option A | 51:1 | 35:1 | 20:1 |
| 2021 | Option A | 50:1 | 36:1 | 24:1 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2023 | CEO | 25th percentile | Median | 75th percentile |
| Salary | £1,073,500 | £61,449 | £105,078 | £210,000 |
| Total remuneration | £3,226,277 | £78,436 | £145,699 | £237,616 |

The Option A methodology, where the total annual pay for Mondi plc colleagues is calculated to identify the employee at the median,

25th and 75th percentile, has been applied. This calculation methodology was selected as being the most accurate way of identifying the

respective percentiles. No element of remuneration was excluded for the purposes of calculating the CEO pay ratio. The total full-time

equivalent remuneration for the relevant employees has been calculated based on the amount paid in respect of the financial year

(unless stated otherwise). The bonus, BSP and LTIP values used are those received during the year ended 31 December 2023.

Throughout the Group, the approach is that remuneration is fair and market competitive in the context of the talent market for the

relevant role reflecting local market and other relevant benchmarks. The committee notes the limited comparability of pay ratios across

companies and sectors, given the diverse range of business models and employee population profiles which exist across the market.

A significant proportion of the CEO’s total remuneration is delivered in variable remuneration, and particularly via long-term share awards,

to drive alignment with shareholders. As a result, the pay ratio is strongly influenced by variable pay outcomes, and the share price for

equity settled awards, and may fluctuate significantly on a year-to-year basis. The ratio has fallen in 2023, as a consequence of the CEO

pay increase in 2023 being discounted by a third of that applied to the wider workforce, pension levels being aligned to the workforce,

LTIP and bonus opportunity levels being held and bonus outturns for 2023 being significantly lower than those of the previous two cycles.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 145 |
|  |  |  |

#### Percentage change in directors' remuneration

The table below shows the percentage change in each director’s salary/fees, benefits and bonus between the year ended 31 December 2023

and the three preceding years, and the average percentage change in the same remuneration over the same period in respect of the

employees of the listed parent entity and the Group on a full time equivalent basis.

The Chair fee, NED base fees, the attendance fee for meetings outside the country of residence (per meeting) and all supplemental fees

were increased by 5%, effective 1 January 2023. A supplemental fee for the role of the NED responsible for understanding the views

of employees was introduced.

|  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Average  employee  Mondi plc1 | Average  employee  Mondi  Group | Andrew  King3 | Mike  Powell3 | Philip Yea4 | Svein  Richard  Brandtzaeg5 | Sue Clark5 | Saki  Macozoma6 | Dominique  Reiniche7 | Dame  Angela  Strank8 | Stephen  Young9 |
| Salary/fees | 2023 | 7.8% | 9.2% | 6.0% | 6.0% | 5.0% | 5.0% | 15.0% | 1.9% | 22.8% | 9.6% | -10.5% |
|  | 2022 | -1.3% | 4.5% | 2.5% | 2.5% | 2.5% | 20.3% | 9.2% | — | 7.1% | 26.6% | 12.6% |
|  | 2021 | 14.5% | 3.6% | 1.9% | 0.0% | 12.8% | — | — | — | 8.0% | — | 23.6% |
|  | 2020 | -11.2% | 0.6% | 0.0% | — | — | — | — | — | -8.1% | — | -6.2% |
| Taxable  benefits2 | 2023 | -7.5% | N/A | 23.0% | 86.5% | — | 137.7% | — | -91.1% | 52.2% | — | — |
|  | 2022 | 1.2% | N/A | 55.3% | 59.7% | — | 11.3% | — | — | -71.0% | — | — |
|  | 2021 | 3.2% | N/A | -26.4% | -78.7% | — | — | — | — | 374.8% | — | — |
|  | 2020 | -0.6% | N/A | 238.3% | — | — | — | — | — | 20.0% | — | — |
| Annual  bonus | 2023 | -9.1% | -18.8% | -68.0% | -67.2% | — | — | — | — | — | — | — |
|  | 2022 | 82.9% | 22.3% | 1.4% | 3.6% | — | — | — | — | — | — | — |
|  | 2021 | -28.9% | 18.1% | 164.6% | 138.1% | — | — | — | — | — | — | — |
|  | 2020 | -58.1% | 5.2% | -5.5% | — | — | — | — | — | — | — | — |

Data for executive directors, joiners and leavers have been excluded in the relevant year. Anke Groth was appointed to the Board during

the year ended 31 December 2023 and, accordingly, has been excluded from the table above.

1 The number of employees of the listed parent company is substantially less than 1% of the Group and as a consequence any changes to the remuneration of an Executive

Committee member or a particular single individual, or a change in the profile of the employee group e.g leavers or new hires can have a marked effect on the year-on-year

comparison. Consequently, the percentage changes may be highly variable. The percentage for the Mondi plc employees reflects a 9% salary increase for 2023, noting that for new

hires in 2022 Q4, no further increase was applied for 2023.

2 Non UK tax resident non-executive directors receive tax return support. Taxable benefits for plc employees include healthcare, car allowance and SIP matching shares.

The majority of employees in the Group receive no taxable benefits beyond those provided through the local social security regime. Additional benefits represent less than

5% of the total remuneration.

3 To provide a meaningful year-on-year comparison, the salaries for Andrew King and Mike Powell were annualised in 2020. Andrew was appointed Group CEO from

1 April 2020 and Mike Powell joined Mondi on 1 November 2020.

4 Philip Yea was appointed to the Board on 1 April 2020. To enable comparison and to provide meaningful reflection of the annual percentage change, his fees for the year ended

31 December 2020 have been annualised. The 2020 annualised figure includes a period as NED, prior to being appointed Chair. The 2021 figure represents a full year as Chair.

5 Svein Richard Brandtzaeg and Sue Clark were appointed as non-executive directors on 22 April 2021. Respective fees in the year of appointment have been annualised. Sue

Clark's 2023 increase includes the introduction of a supplemental fee in relation to the role of the non-executive director responsible for understanding the views

of employees. Svein Richard Brandtzaeg is not resident in the UK and receives an additional fee for attendance at Board meetings outside his country of residence.

The increase in taxable benefits in 2023 for Svein Richard Brandtzaeg includes tax advice on the amendment of the 2021/22 UK tax return, 2022/23 UK tax return preparation

and foreign tax credit claim.

6 Saki Macozoma was appointed as non-executive director on 6 May 2022. To enable comparison and to provide meaningful reflection of the annual percentage change, the

fees shown for the year ended 31 December 2022 and the taxable benefits are annualised.

7 The percentage change for 2023 for Dominique Reiniche reflects the increases in NED fees and appointment to the role of the SID in May 2023.  The increases in taxable

benefits for 2023 includes French social security notification review.

8 Dame Angela Strank was appointed as non-executive director on 22 April 2021 and as Chair of the committee in May 2022. Respective fees in the year of appointment have

been annualised.

9 The percentage change for 2023 for Stephen Young reflects his stepping down from the role of the SID in May 2023.

#### Relative importance of spend on pay

The table below shows the total remuneration paid across the Group together with the total dividends paid in 2023 and 2022. There have

been no share buybacks during 2023 and 2022.

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| € million | 2023 | 2022 | % change |
| Overall remuneration expenditure1 | 1,087 | 1,077 | 0.9% |
| Ordinary dividends paid to shareholders | 345 | 321 | 7.5% |

1 Remuneration expenditure for all Mondi Group employees, reported as Personnel Costs in the Consolidated Income Statement.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 146 |
|  |  |  |

#### Remuneration report

## Annual report on remuneration

#### continued

#### Statement of directors’ shareholdings and share interests (audited)

The CEO and CFO are required to build and maintain a Minimum Shareholding Requirement (MSR) equivalent to 300% and 250% of

base salary respectively. New appointees are required to meet the relevant requirement within five years from appointment. Therefore,

Andrew King and Mike Powell have until 31 March 2025 and 31 October 2025 to meet their respective shareholding requirements.

Deferred bonus awards under the BSP (net of tax) and vested LTIP shares that are subject to the two-year post-vesting holding period

will count towards the holding requirement. As at 31 December 2023, Andrew King exceeded the MSR and Mike Powell, who joined

Mondi in November 2020, is on track to meet the requirement in the five-year timeframe.

The beneficial and non-beneficial share interests of the directors and their connected persons as at 1 January 2023, and as at

31 December 2023 were as follows:

#### Executive directors (audited)

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  | Shares held  outright at  1 Jan 2023 | Shares held  outright at  31 Dec 2023 | Deferred BSP  shares net of tax  at 31 Dec 2023 2 | Total  shareholding  attributed to  MSR | Total  shareholding as  multiple of base  salary1 (%) | Deferred LTIP  shares  outstanding at  31 Dec 20233 | Deferred LTIP  shares as multiple  of base salary1  (%) |
| Andrew King | 156,734 | 203,327 | 81,179 | 284,506 | 396% | 474,174 | 659% |
| Mike Powell | 28,351 | 39,510 | 42,573 | 82,083 | 179% | 276,064 | 602% |

1 The one-month volume weighted average share price of £14.93 as at 31 December 2023 was used in calculating the percentage figures shown above divided

by the executive's respective salary as at 31 December 2023. Total shareholding as a multiple of base salary includes BSP shares net of estimated tax of 45%.

2 BSP shares subject to service condition, net of estimated tax of 45%. All shares shown in this column were awarded as nil-cost options.

3 LTIP shares subject to service and performance conditions. All shares shown in this column were awarded as nil-cost options.

#### Non-executive directors (audited)

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Shareholding at  1 Jan  2023  (or, if later,  on appointment) | Shareholding  at 31 Dec  2023  (or, at the date  of resignation,  if earlier) |
| Philip Yea | 25,000 | 27,500 |
| Svein Richard Brandtzaeg | 1,250 | 1,250 |
| Sue Clark1 | 4,096 | 4,229 |
| Anke Groth2 | — | — |
| Saki Macozoma3 | — | 441 |
| Dominique Reiniche | 1,000 | 1,000 |
| Dame Angela Strank | 899 | 899 |
| Stephen Young | 2,026 | 2,026 |

1 The shareholding shown at 1 January 2023 includes dividends reinvested into shares, personally by Sue Clark. The shareholding as at 1 January 2023 disclosed in the 2022

Integrated report (4,000 shares) did not include the shares calculated by dividend reinvestment. The shareholding as at 1 January 2023 has been adjusted to reflect the full

shareholding, including dividends reinvested.

2 Appointed to the Board on 1 April 2023.

3 A restated shareholding of zero shares at 1 January 2023. The shareholding disclosed in the 2022 Integrated report (500 shares) did not reflect the sale of the entire

shareholding by a person closely associated with Mr. Macozoma prior to appointment to the Mondi Board in May 2022.

There has been no change in the interests of the directors and their connected persons between 31 December 2023 and the date of this

report other than as a result of the share consolidation which took place on 29 January 2024 and the amounts shown in the footnote to

the 'SIP' table on page [148](#id56cda610a2a409cb908c770441e14eb_2903).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 147 |
|  |  |  |

#### Share awards granted to executive directors (audited)

The following tables set out the share awards granted as nil-cost options to the executive directors. All share awards are determined by

the three-day average share price commencing the day Mondi announces its results, unless stated otherwise. The vested and exercised

shares in the table below are pre-consolidation effective 29 January 2024 (page [36](#iea498ba6d54a486cb963a85035279c8b_39136)).

#### Awards under BSP and LTIP

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
| Andrew King | |  |  |  |  |  |  |  |  |  |
| Type of award | Awards  held at  beginning  of year | Awards  granted  during year | Shares  lapsed | Awards  exercised  during year | Dividend  equivalents | Share price  at the date  of exercise | Date of award | Awards  held as at  31 December  2023 | Release date | Status |
| BSP | 11,220 | — | — | 11,220 | 1,099 | £14.17 | Mar 2020 | 0 | Mar 2023 | Vested and  exercised |
| BSP | 18,970 | — | — | — | — | — | Mar 2021 | 18,970 | Mar 2024 | Unvested |
| BSP | 64,849 | — | — | — | — | — | Mar 2022 | 64,849 | Mar 2025 | Unvested |
| BSP | — | 63,779 | — | — | — | — | Mar 2023 | 63,779 | Mar 2026 | Unvested |
| LTIP1 | 140,758 | — | 70,379 | 70,379 | 6,870 | £14.17 | May 2020 | 0 | Mar 2023 | Vested and  exercised |
| LTIP2 | 128,675 | — | — | — | — | — | Mar 2021 | 128,675 | Mar 2024 | Unvested |
| LTIP3 | 170,389 | — | — | — | — | — | Mar 2022 | 170,389 | Mar 2025 | Unvested |
| LTIP4 | — | 175,110 | — | — | — | — | Mar 2023 | 175,110 | Mar 2026 | Unvested |
| Mike Powell | |  |  |  |  |  |  |  |  |  |
| Type of award | Awards  held at  beginning  of year | Awards  granted  during year | Shares  lapsed | Awards  exercised  during year | Dividend  equivalents | Share price  at the date  of exercise | Date of award | Awards  held as at  31 December  2023 | Release date | Status |
| Buy-out LTIP5 | 39,427 | — | 19,713 | 19,714 | 1,343 | £14.17 | Dec 2020 | 0 | Mar 2023 | Vested and  exercised |
| BSP | 2,038 | — | — | — | — | — | Mar 2021 | 2,038 | Mar 2024 | Unvested |
| BSP | 37,607 | — | — | — | — | — | Mar 2022 | 37,607 | Mar 2025 | Unvested |
| BSP | — | 37,761 | — | — | — | — | Mar 2023 | 37,761 | Mar 2026 | Unvested |
| LTIP2 | 74,916 | — | — | — | — | — | Mar 2021 | 74,916 | Mar 2024 | Unvested |
| LTIP3 | 99,201 | — | — | — | — | — | Mar 2022 | 99,201 | Mar 2025 | Unvested |
| LTIP4 | — | 101,947 | — | — | — | — | Mar 2023 | 101,947 | Mar 2026 | Unvested |

1 The performance conditions applying to the 2020 LTIP are set out on page 146 of the 2022 Integrated report.

2 The performance conditions applying to the 2021 LTIP are set out on page [144](#i47a6727b8bad4fe28addb4dae187e293_5497558142335).

3 The performance conditions applying to the 2022 LTIP are set out on page 147 of the 2022 Integrated report.

4 The performance conditions applying to the 2023 LTIP are set out on pages [144](#i47a6727b8bad4fe28addb4dae187e293_5497558142335)-[145](#i47a6727b8bad4fe28addb4dae187e293_5497558142350).

5 Details of the buyout awards granted to Mike Powell are set out on page 142 of the 2020 Integrated report.

#### All-employee share plans (audited)

The Group currently operates one HM Revenue & Customs approved all-employee share plan in the UK (the SIP).

#### Share Incentive Plan (SIP)

Employees resident in the UK are eligible to participate in the SIP. Contributions of up to £150 per month, are taken from participants’

gross salary and used to purchase ordinary shares in Mondi plc each month (partnership shares). Participants receive one matching

Mondi plc ordinary share free of charge for each share purchased (matching shares). The shares are placed in trust and the matching

shares are forfeited if participants resign from the Group’s employment within three years. If the shares remain in the trust for at least

five years, they can be removed free of UK income tax and National Insurance contributions.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | Shares held at  beginning of year | Partnership shares  acquired during  the year | Matching shares  awarded during  the year | Shares released  during year | Total shares held as  at 31 December 2023 |
| Andrew King1 | 6,634 | 133 | 133 | — | 6,900 |
| Mike Powell1 | 346 | 133 | 133 | — | 612 |

1 Since 1 January 2024 up to the date of this report Andrew King acquired 21 partnership shares and was awarded 21 matching shares and Mike Powell acquired 21 partnership

shares and was awarded 21 matching shares.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 148 |
|  |  |  |

#### Remuneration report

## Annual report on remuneration

#### continued

#### Statement of voting at Annual General Meeting

The Annual General Meeting was held on 4 May 2023. All resolutions were passed. The voting result in respect of the DRP and the

remuneration report is given below. Overall in excess of 75% of the total Group shares were voted.

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| Resolution | Votes for | % | Votes against | % | Votes total | % of ISC voted | Votes withheld |
| To approve the DRP | 324,176,751 | 87.71 | 45,432,126 | 12.29 | 369,608,877 | 76.12% | 896,082 |
| To approve the remuneration report  (other than the DRP) | 330,156,268 | 90.17 | 36,010,448 | 9.83 | 366,166,716 | 75.41% | 4,338,243 |

#### Remuneration Committee governance

#### The Remuneration Committee

The Remuneration Committee is a formal committee of the Board (composition of the Remuneration Committee on page [122](#ie5fb464260464bda8fc80d274dfe2167_0-0-1-3-301365)). Its remit

is set out in terms of reference adopted by the Board. A copy of the terms of reference is available on the Group’s website at

<www.mondigroup.com>. The committee’s performance against these terms of reference is reviewed on an annual basis and the

committee is satisfied that it has acted in accordance with its terms of reference during the year.

The primary purposes of the committee, as set out in its terms of reference, are:

– to determine and agree with the Board, the Group’s remuneration policy and the framework of executive and senior management

remuneration;

– to determine individual remuneration packages within that framework for the executive directors and certain other senior management;

– to determine the remuneration of the Board Chair;

– to determine the targets for any performance-related pay schemes in which the executive directors and senior management of the

Group participate;

– to oversee the operation of the Group’s share schemes; and.

– to agree the policy on shareholding requirements for executive directors, including post-employment requirements.

No director or other attendee takes part in any discussion regarding his or her personal remuneration.

The committee is authorised to seek information from any director and employee of the Group and to obtain external advice.

The committee is solely responsible for the appointment of external remuneration advisers and for the approval of their fees and

other terms.

Deloitte was appointed by the Remuneration Committee as its independent remuneration consultant with effect from 29 September 2020,

following a competitive tender process. Total fees paid to Deloitte for providing remuneration advice to the committee were determined

based on time and materials and amounted to £87,225 for the year ended 31 December 2023 (£161,100 for 2022, which included advice

for the new DRP). Deloitte also provided other tax and payroll services to the Mondi Group during the year. All advice to the Remuneration

Committee, received from Deloitte, was objective and independent. Deloitte is a founder member of the Remuneration Consultants

Group and, as such, voluntarily operates under the Code of Conduct in relation to executive remuneration consulting in the UK.

The committee reviews the appointment of its advisers annually and is satisfied that the advice it receives is objective and independent.

#### Sums paid to third parties in respect of a director’s services

No consideration was paid or became receivable by third parties for making available the services of any person as a director

of Mondi plc (‘the Company’), or while a director of the Company, as a director of any of the Company’s subsidiary undertakings,

or as a director of any other undertaking of which he/she was (while a director of the Company) a director by virtue of the Company’s

nomination, or otherwise in connection with the management of the Company or any undertaking during the year to 31 December 2023.

#### Dame Angela Strank

Chair, Remuneration Committee

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 149 |
|  |  |  |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  |  |  |
|  | For the purposes of the Companies Act 2006, the disclosures below, including those incorporated by reference, together with  the Corporate governance report set out on pages 82-121, form the Directors’ report.  In addition, disclosures relating to the following items, which also form part of the Directors’ report, have been included in the  Strategic report which starts on the inside front cover of this Integrated report and finishes on page 81: | |  |
|  | – Dividends, page 36  – Financial risk management objectives and policies, pages [36](#iea498ba6d54a486cb963a85035279c8b_36046)-[37](#iea498ba6d54a486cb963a85035279c8b_36041)  – Principal risks, pages [69](#i47a6727b8bad4fe28addb4dae187e293_2795)-[79](#i0774f734fb124eedadc42c59522353b7_12-1-1-2-480057)  – Likely future developments in the business, pages [12](#i47a6727b8bad4fe28addb4dae187e293_2604)-[13](#i47a6727b8bad4fe28addb4dae187e293_7007) | – Research and development activities, pages [13](#i47a6727b8bad4fe28addb4dae187e293_7007), [21](#i47a6727b8bad4fe28addb4dae187e293_2644), [28](#i47a6727b8bad4fe28addb4dae187e293_7812), [45](#i47a6727b8bad4fe28addb4dae187e293_5771)-47  – Greenhouse gas (GHG) emissions and energy consumption,  page [52](#ie1c7b22776c646ffbd7d173cc440fbf4_0-0-1-1-418750)  – Employees, pages [48](#i47a6727b8bad4fe28addb4dae187e293_5795)-[50](#i989e19b834f344c0aff2915d48a2e7d3_146686) |  |
|  |  |  |  |

#### Information required to be disclosed under UK Listing Rule 9.8.4 R

The UK Listing Authority Listing Rules require the disclosure of certain specified information in the annual financial report of Mondi plc.

The information required under rule 9.8.4 (1) in relation to interest capitalised and related tax relief can be found on page [178](#i47a6727b8bad4fe28addb4dae187e293_61).

The information required under rules 9.8.4 (12) and (13) in relation to dividend waivers can be found on page [194](#i47a6727b8bad4fe28addb4dae187e293_118). This information

is incorporated by reference into this Directors’ report.

Besides the above, the information required to be disclosed under rule 9.8.4 R is not applicable to Mondi plc, and therefore no disclosures

have been made in this regard.

#### Employee and stakeholder engagement

Information relating to engagement with employees and other stakeholders, including customers and suppliers, can be found in the

Strategic report on pages [38](#i47a6727b8bad4fe28addb4dae187e293_2707)-[41](#i47a6727b8bad4fe28addb4dae187e293_6376) and in the Corporate governance report on pages [92](#i7e8411646eff4bc0adb55b69313ae28d_467526)-[95](#i7e8411646eff4bc0adb55b69313ae28d_467527).

#### Share capital

Full details of Mondi’s share capital can be found in note  22 to the financial statements.

#### Substantial interests

As at 31 December 2023,  Mondi plc had received notifications from the following parties in the voting rights of Mondi plc. The number

of voting rights and percentage interests shown are as disclosed at the date on which the holding was notified.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| Shareholder | Number of voting rights | %1 |
| Public Investment Corporation Limited | 48,760,707 | 10.04 |
| BlackRock Inc | 32,794,248 | 6.74 |
| Allan Gray Proprietary Limited | 29,173,827 | 6.01 |
| Coronation Fund Managers | 28,872,418 | 5.95 |
| Ninety One UK Ltd | 23,972,407 | 4.94 |
| AXA S.A. | 17,210,471 | 4.69 |
| Standard Life Investments Limited | 16,476,021 | 4.49 |
| Old Mutual plc | 11,978,984 | 3.26 |
| Sanlam Investment Management Proprietary Limited | 10,936,128 | 3.00 |

1Percentage provided was correct at the date of notification. No further notifications have been received under DTR Rule 5 as at the date of this report, except as detailed below.

The following changes in interests have been notified between 1 January 2024 and the date of this report.

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Date | Shareholder | Number of voting rights | % |
| 5 January 2024 | BlackRock Inc | 34,157,102 | 7.02 |
| 8 January 2024 | BlackRock Inc | 34,135,128 | 7.01 |
| 10 January 2024 | BlackRock Inc | 34,144,438 | 7.02 |
| 15 January 2024 | BlackRock Inc | 34,340,777 | 7.06 |
| 18 January 2024 | Coronation Fund Managers | 24,224,004 | 4.99 |
| 19 January 2024 | BlackRock Inc | 34,388,089 | 7.06 |
| 31 January 2024 | Public Investment Corporation Soc Limited | 53,650,993 | 12.15 |
| 12 February 2024 | Coronation Fund Managers | 22,587,325 | 5.12 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 150 |
|  |  |  |

#### Other statutory information

#### Additional information for shareholders

The information for shareholders required pursuant to the Companies Act 2006 can be found on pages [242](#i47a6727b8bad4fe28addb4dae187e293_3131)-[243](#i45594d4eba3842eebb0b7261fbb9c32d_90877) of this report.

#### Political donations

No political donations were made during 2023, and it is Mondi’s policy not to make such donations.

Auditor

Each of the directors of Mondi plc at the date when this report was approved confirms that:

– so far as each of the directors is aware, there is no relevant audit information of which the Group’s auditor is unaware; and

– each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware

of any relevant audit information and to establish that the Group’s auditor is aware of that information.

PricewaterhouseCoopers LLP (PwC) has indicated its willingness to continue as auditor of Mondi plc. The Board has decided that

a resolution to reappoint PwC will be proposed at the Annual General Meeting scheduled to be held on 3 May 2024.

The reappointment of PwC has the support of the Audit Committee, which will be responsible for determining its audit fee on behalf

of the directors (see page [112](#i5c7a5abeff584c76b7d40e6da0bab8a3_1-1-1-5-475737) for more information).

Note 4 to the financial statements sets out the auditor’s fees, both for audit and non-audit work.

#### Events occurring after

#### 31 December 2023

Aside from the final ordinary dividend proposed for 2023 (see note 9), there have been the following material reportable events since

31 December 2023:

On 5 February 2024, the Group announced the completion of the acquisition of Hinton Pulp mill in Alberta (Canada) from West Fraser

Timber Co. Ltd (West Fraser) for a total consideration of USD 5 million. The mill has the capacity to produce around 250,000 tonnes

of pulp per annum and will provide the Group with access to local, high-quality fibre from a well-established wood basket as part of a

long-term partnership with West Fraser. The Group intends to invest in the mill to improve productivity and sustainability performance

and, subject to pre-engineering and permitting, expand the facility primarily with a new kraft paper machine which will integrate its paper

bag operations in the Americas and support future growth.

On 13 February 2024, the Group returned the net proceeds from the sale of the Group's Russian assets to shareholders by way of

a special dividend of €1.60 per existing ordinary share. In addition, in order to maintain the comparability, so far as possible, of Mondi plc’s

share price before and after the special dividend, the special dividend was accompanied by a share consolidation, which took effect on

29 January 2024, resulting in shareholders receiving 10 new ordinary shares for every 11 existing ordinary shares. See notes 9 and 22 for

further details.

#### Annual General Meeting

The Annual General Meeting will be held at 10:30 (UK time) on Friday 3 May 2024 at Mercedes-Benz World, Brooklands Drive,

Weybridge KT13 0SL, UK. The notice convening the meeting, which is sent separately to shareholders, provides further details including

the business to be considered and explanatory notes for each resolution. The notice is available on the Mondi Group website at:

[www.mondigroup.com](https://www.mondigroup.com/).

This Directors’ report was approved by the Board on 21 February 2024 and is signed on its behalf.

#### Jenny Hampshire

Company Secretary

Mondi plc

Ground Floor, Building 5

The Heights

Brooklands

Weybridge

Surrey

KT13 0NY

Registered No. 6209386

21 February 2024

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 151 |
|  |  |  |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  |  |  |  |  |  | operational - 119473_crop.jpg |
|  | Financial statements | | |  |  |
|  | Directors’ responsibility statement | | [153](#i47a6727b8bad4fe28addb4dae187e293_3088) |  |  |
|  | Independent auditors' report to the  members of Mondi plc | | [154](#i47a6727b8bad4fe28addb4dae187e293_3110) |  |  |
|  | Financial statements | |  |  |  |
|  | Consolidated income statement | | [166](#i47a6727b8bad4fe28addb4dae187e293_13) |  |  |
|  | Consolidated statement  of comprehensive income | | [167](#i47a6727b8bad4fe28addb4dae187e293_16) |  |  |
|  | Consolidated statement  of financial position | | [168](#i47a6727b8bad4fe28addb4dae187e293_19) |  |  |
|  | Consolidated statement  of changes in equity | | [169](#i47a6727b8bad4fe28addb4dae187e293_22) |  |  |
|  | Consolidated statement  of cash flows | | [170](#i47a6727b8bad4fe28addb4dae187e293_25) |  |  |
|  |  |  |
|  | Notes to the consolidated financial  statements: | |  |  |  |
|  |  | Note 1 Basis of preparation | [171](#i47a6727b8bad4fe28addb4dae187e293_31) |  |  |
|  |  | Note 2 Operating segments | [172](#i47a6727b8bad4fe28addb4dae187e293_34) |  |  |
|  |  | Notes 3–7 Notes to the  consolidated income statement | [177](#i47a6727b8bad4fe28addb4dae187e293_55) |  |  |
|  |  | Notes 8–9 Per share measures | [182](#i47a6727b8bad4fe28addb4dae187e293_70) |  |  |  |
|  |  | Notes 10–19 Notes to the  consolidated statement of  financial position | [184](#i47a6727b8bad4fe28addb4dae187e293_76) |  |  | Quotemark_ORANGE.svg  Our strong through-cycle cash  generation and robust balance  sheet provides strategic  flexibility.  Mike Powell  Group   CFO |
|  |  | Notes 20–23 Capital management | [192](#i47a6727b8bad4fe28addb4dae187e293_112) |  |  |
|  |  | Note 24 Retirement benefits | [197](#i47a6727b8bad4fe28addb4dae187e293_124) |  |  |
|  |  | Notes 25–27 Notes to the  consolidated statement of cash flows | [202](#i47a6727b8bad4fe28addb4dae187e293_127) |  |  |
|  |  | Note 28 Russian operations  (discontinued operations) | [206](#i47a6727b8bad4fe28addb4dae187e293_130) |  |  |
|  |  | Notes 29–34 Other disclosures | [209](#i47a6727b8bad4fe28addb4dae187e293_148) |  |  |
|  |  | Note 35 Accounting policies | [217](#i47a6727b8bad4fe28addb4dae187e293_175) |  |  |
|  | Mondi plc parent company balance sheet | | [225](#i47a6727b8bad4fe28addb4dae187e293_181) |  |  |
|  | Mondi plc parent company  statement of changes in equity | | [226](#i47a6727b8bad4fe28addb4dae187e293_184) |  |  |
|  | Notes to the Mondi plc parent  company financial statements | | [227](#i47a6727b8bad4fe28addb4dae187e293_190) |  |  |
|  | Production statistics and exchange rates | | [235](#i47a6727b8bad4fe28addb4dae187e293_229) |  |  |
|  | Group financial record | | [236](#i47a6727b8bad4fe28addb4dae187e293_235) |  |  |
|  | Alternative Performance Measures | | [238](#i47a6727b8bad4fe28addb4dae187e293_238) |  |  |  |
|  | Additional information for shareholders | | [242](#i47a6727b8bad4fe28addb4dae187e293_3131) |  |  |  |
|  | Shareholder information | | [244](#i47a6727b8bad4fe28addb4dae187e293_3152) |  |  |  |
|  |  |  |  |  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 152 |
|  |  |  |

#### Financial statements introduction

The directors are responsible for preparing the Integrated report and financial statements 2023 in accordance with applicable law

and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared

the Group financial statements in accordance with UK-adopted international accounting standards and the  Mondi plc parent company

financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting

Standards, comprising  FRS 101 “Reduced Disclosure Framework”, and applicable law). In preparing the Group financial statements, the

directors have also elected to comply with International Financial Reporting Standards issued by the International Accounting Standards

Board (IFRSs issued by IASB).

Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view

of the state of affairs of the Group and parent company and of the profit or loss of the Group for that period. In preparing the financial

statements, the directors are required to:

– select suitable accounting policies and then apply them consistently;

– state whether applicable UK-adopted international accounting standards and IFRSs issued by IASB have been followed for the Group

financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the parent company

financial statements, subject to any material departures disclosed and explained in the financial statements;

– make judgements and accounting estimates that are reasonable and prudent; and

– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and parent company

will continue in business.

The directors are also responsible for safeguarding the assets of the Group and parent company and hence for taking reasonable steps

for the prevention and detection of fraud and other irregularities.

The directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and

parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent company

and enable them to ensure that the financial statements and the Remuneration report comply with the Companies Act 2006.

The directors are responsible for the maintenance and integrity of the Group’s website. Legislation in the United Kingdom governing the

preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

#### Directors' confirmations

The directors consider that the Integrated report and financial statements 2023, taken as a whole, is fair, balanced and understandable

and provides the information necessary for shareholders to assess the Group’s and parent company’s position and performance, business

model and strategy.

Each of the directors, whose names and functions are listed in the Governance section of the Integrated report confirm that, to the best

of their knowledge:

– the Group financial statements, which have been prepared in accordance with UK-adopted international accounting standards

and IFRSs issued by IASB, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

– the parent company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards,

comprising FRS 101, give a true and fair view of the assets, liabilities and financial position of the Mondi plc parent company; and

– the Strategic report includes a fair review of the development and performance of the business and the position of the Group

and parent company, together with a description of the principal risks and uncertainties that they face.

The Directors’ responsibility statement was approved by the Board on 21 February 2024 and is signed on its behalf by:

#### Andrew King

#### Mike Powell

DirectorDirector

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 153 |
|  |  |  |

#### Directors’ responsibility statement

#### Report on the audit of the financial statements

#### Opinion

In our opinion:

– Mondi plc’s group financial statements and parent company financial statements (the “financial statements”) give a true and fair view

of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s loss and the group’s cash

flows for the year then ended;

– the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards

as applied in accordance with the provisions of the Companies Act 2006;

– the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and

– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Integrated report and financial statements 2023 (the “Integrated Report”),

which comprise: the consolidated statement of financial position and the Mondi plc parent company balance sheet as at 31 December

2023; the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash

flows and the consolidated and Mondi plc parent company statements of changes in equity for the year then ended; and the notes

to the financial statements, which include a description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

#### Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities

under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.

Other than those disclosed in note 4, we have provided no non-audit services to the parent company or its controlled undertakings

in the period under audit.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 154 |
|  |  |  |

Independent auditors’ report to the members of

#### Mondi plc

#### Our audit approach

Overview

Audit scope

– We identified one component (2022: three) as an individually significant component, which required an audit of its complete financial

information due to its financial significance to the group, and a further seven components (2022: five) where we have concluded that

the component engagement leader is a Key Audit Partner (as defined under ISAs (UK)). These eight components (2022: eight) are

located in Austria, the Czech Republic, Poland, South Africa, Sweden and Russia (2022: Austria, the Czech Republic, Poland, Russia,

Slovakia, South Africa and Sweden). We obtained full scope audit reporting from an additional twenty components (2022: nineteen), including

operating units and treasury operations. An audit of specific financial statement line items was performed at a further ten components

(2022: five) and group level procedures on selected transactions or balances were performed at four components (2022: three).

– In aggregate, the locations subject to audit procedures represented 77% (2022: 72%) of the group’s revenue and 67% (2022: 76%)

of the group’s absolute profit before tax adjusted for special items from continuing operations. In addition, we received full scope

reporting on JSC Mondi Syktyvkar, the main component included in discontinued operations.

Key audit matters

– Divestment of Russian operations (group)

– Audit of the fair value of forestry assets (group)

– Application of hyperinflation accounting related to subsidiaries in Türkiye (group)

– Valuation of property, plant and equipment (group)

– Impairment indicator assessment of the parent company investment in subsidiaries (parent)

Materiality

– Overall group materiality: €35 million (2022: €65 million) based on approximately 5% of profit before tax (‘PBT’) from continuing

operations adjusted for special items (2022: based on approximately 5% of profit before tax ('PBT') from continuing operations

adjusted for special items).

– Overall parent company materiality: €47 million (2022: €40 million) based on approximately 1% of total assets.

– Performance materiality: €26 million (2022: €49 million) (group) and €35 million (2022: €30 million) (parent company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)

identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the

audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures

thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we

do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Valuation of property, plant and equipment is a new key audit matter this year. Disposal of Personal Care Components ("PCC") (group),

which was a key audit matter last year, is no longer included because of the disposal being completed in the prior year. Otherwise,

the key audit matters below are consistent with last year.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 155 |
|  |  |  |

|  |  |
| --- | --- |
|  |  |
| Key audit matter | How our audit addressed the key audit matter |
| Divestment of Russian operations (group) |  |
|  |  |
| On 30 June 2023, the group completed the sale of its three  Russian packaging converting operations to the Gotek Group for  a cash consideration of RUB 1.6 billion, resulting in cash proceeds  of €30 million, and a loss on disposal of €46 million.  Subsequently, on 4 October 2023, the group completed the sale  of its Syktyvkar mill ‘JSC Mondi Syktyvkar’ and two affiliated  entities to Sezar Invest LLC (Sezar Invest) for a total cash  consideration of RUB 80 billion, resulting in cash proceeds  of €776 million, and a loss on disposal of €710 million.  Given the quantum of the consideration received for the disposal  of the group’s Russian operations and the associated complexity  of the accounting for the disposal, we identified a significant audit  risk in relation to the accuracy of the calculation of the loss on  disposal, as well as the presentation and disclosure of the various  elements of the disposal in the financial statements, specifically  focused on the carrying amount of the net assets disposed and  the recycling of the foreign currency translation reserve.  Accordingly, this had a significant effect on our overall audit  strategy and allocation of resources in the planning for and  completion of our audit, and was, therefore, determined to  be a key audit matter.  Refer to notes 28 and 35 of the group financial statements,  and the Audit Committee’s views set out on page 111. | We tested the loss on disposal calculation by verifying the cash  received to bank statements, reading the signed sale and purchase  agreements (“SPAs”), and agreeing the carrying value of the  Russian businesses prior to disposal to the underlying accounting  records of the group.  We also tested the associated transaction costs and performed  a proof of the cumulative translation reserve, which was recycled  to the consolidated income statement on disposal, to the  underlying accounting records.  Given the quantum of profits, up to the date of disposal, and  the net assets disposed of in relation to JSC Mondi Syktyvkar, we  issued instructions to, and obtained reporting as at and for the  nine month period ended 30 September 2023 from, a third party  component auditor in Russia, who audited the assets and liabilities  of the Syktyvkar mill. We performed oversight procedures (including  a review, performed remotely, of certain working papers of the  component audit team) to satisfy ourselves as to the nature,  timing and extent of the audit procedures performed. We also  considered potential movements between the component auditor’s  period end reporting date (30 September 2023) and the date of  completion of the disposal (4 October 2023) to satisfy ourselves  that the movement in the net asset position between the two  dates could not be material.  We considered the adequacy of the group’s disclosures in respect  of the disposed Russian operations and confirmed the resulting  loss on disposals had been recorded appropriately.  Based on the procedures performed, we noted no material issues  from our work. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 156 |
|  |  |  |

Independent auditors’ report to the members of

#### Mondi plc



#### continued

|  |  |
| --- | --- |
|  |  |
| Key audit matter | How our audit addressed the key audit matter |
| Audit of the fair value of forestry assets (group) |  |
|  |  |
| The valuation of the group’s forestry assets, amounting to  €519 million as at 31 December 2023 (2022: €485 million),  is dependent upon various assumptions that are subject to  significant estimation, and the fair value gain recorded in  the year is material.  The most significant assumptions included in the valuation  model relate to the determination of the estimated net selling  prices to be applied to the forestry assets, the conversion factor  used to convert hectares of land under afforestation to tonnes of  standing timber and the risk premium applied to immature timber,  alongside any manual adjustments that are made outside the  underlying model.  The fair value gain in the year ended 31 December 2023  of €128 million (2022: €169 million), which is recorded in the  consolidated income statement, has been primarily driven  by the increase in net selling prices.  Given the quantum of the gain and the estimation inherent  in the determination of fair value, this was determined to be  a key audit matter.  Refer to notes 14 and 35, and the Audit Committee’s views set  out on page 114. | We evaluated the group’s valuation model used for calculating  the fair value of the forestry assets against the criteria in IAS 41,  ‘Agriculture’ and IFRS 13, ‘Fair Value Measurement’.  In assessing the valuation of the forestry assets, our procedures  (which were performed by our component team in South Africa,  with oversight from the group audit team in the UK) primarily  consisted of substantive tests of detail, where we assessed the  appropriateness of the inputs and the assumptions used in the  valuation model taking into account supporting evidence (where  available), and analytical procedures. We also compared the inputs  and assumptions in the 31 December 2022 valuation with the  31 December 2023 valuation to identify, and subsequently investigate,  any unexpected variances. Our analytical procedures also focused  on comparisons of the assumptions and inputs with industry  averages. In addition, we performed procedures over the  mathematical accuracy of the valuation model.  We compared the estimated net selling prices used in the model  with third party evidence and the inputs used in the conversion  factor to convert hectares of land under afforestation to tonnes  of standing timber with historical evidence, as well as benchmarking  the conversion factor against industry data. Forestry assets were  physically verified on a sample basis in addition to using geospatial  imaging. We also assessed the risk premium applied in the  valuation model to immature and mature timber by comparing the  factors taken into account in the risk adjustment with historical  experience, industry data and other evidence provided by  management. We evaluated whether the climate change risks  relevant to the valuation of the forestry assets were appropriately  included within the model, by comparison with historical data and  the climate risk assessments performed by group management.  Adjustments outside the underlying model have been tested  through challenging assumptions made by management,  independently reperforming the calculations and obtaining  supporting evidence, on a sample basis.  We evaluated the director’s assessment of the sensitivity of  the valuation to reasonably possible changes in assumptions  and we considered the appropriateness of the related disclosures  in note 14 and note 35 to the financial statements.  Based on the procedures performed, we noted no material issues  from our work. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 157 |
|  |  |  |

|  |  |
| --- | --- |
|  |  |
| Key audit matter | How our audit addressed the key audit matter |
| Application of hyperinflation accounting related to subsidiaries in Türkiye (group) | |
|  |  |
| In the year ended 31 December 2023, the group has applied  IAS 29, 'Financial Reporting in Hyperinflationary Economies', for  its subsidiaries in Türkiye and Lebanon (2022: Türkiye), whose  functional currencies have experienced a cumulative inflation  rate of more than 100% over the past three years.  The application of IAS 29 required the financial information  of these subsidiaries of the group to be restated for changes  in the general purchasing power of the local currency, being  the functional currency of those subsidiaries.  The effect of IAS 29 is pervasive to the consolidated income  statement and applicable to all non-monetary assets and liabilities  in the consolidated statement of financial position.  For the year ended 31 December 2023, the adjustments from  hyperinflationary accounting have resulted in an increase in group  revenue of €116 million (2022: €125 million), a decrease in underlying  EBITDA of €16 million (2022: €44 million) and a net monetary gain  of €2 million (2022: €17 million) and an accumulated increase in  total assets of €115 million (31 December 2022: €91 million) from  the date of initial application to 31 December 2023.  IAS 29 requires judgement to determine which general price index  to select and other approximations to be made in order to prepare  the financial statements of affected subsidiaries and complex  calculations to determine the impact of IAS 29. Given the  complexity of the accounting and the size of the group’s businesses  in Türkiye, this was determined to be a key audit matter.  Refer to notes 1, 7, 10, 12, 13, 22, 27 and 35 of the group financial  statements, and the Audit Committee’s views set out on page 114. | Given the relative size of the group’s businesses in Türkiye  and Lebanon, we focused our testing on the impact of IAS 29  on the operations in Türkiye.  We assessed the consistency of the application of the  methodology in the calculation of the IAS 29 related adjustments  to the group’s accounting policies as well as to the prior year for  all subsidiaries that were impacted materially.  We verified the appropriateness of the index used to calculate  the IAS 29 impact to publicly available market data.  We tested a sample of items in the underlying data used in the  calculations of the IAS 29 adjustments, as well as the accuracy  of the calculations. These procedures were performed by our  component teams in Türkiye, with oversight from the group audit  team in the UK.  We assessed changes made to the configuration of the group’s  consolidation system during the year ended 31 December 2023  to validate that the newly implemented automation of certain  areas of hyperinflation accounting was in line with the group’s  established accounting policies and UK-adopted international  accounting standards. We also tested the exchange rates used by  management to translate the local currency results into Euros, the  group’s presentation currency, to publicly available information.  We also considered the appropriateness of the disclosures  in the group financial statements.  Based on the procedures performed, we noted no material issues  from our work. |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 158 |
|  |  |  |

Independent auditors’ report to the members of

#### Mondi plc



#### continued

|  |  |
| --- | --- |
|  |  |
| Key audit matter | How our audit addressed the key audit matter |
| Valuation of property, plant and equipment (group) |  |
|  |  |
| The group has property, plant and equipment (“PPE”) of  €4,619 million (2022: €4,167 million). Management has assessed  whether indicators of impairment or impairment reversal existed  in relation to PPE as at 31 December 2023, performed at the cash  generating units (“CGUs”) level, being the lowest level at which  largely independent cash inflows are generated.  The determination of appropriate CGUs is judgemental in nature.  Once the CGUs are identified, the determination of whether an  indicator of impairment or impairment reversal exists for a specific  CGU is also judgemental. Where an indicator of impairment or  impairment reversal is identified, management must estimate the  recoverable amount of the relevant CGU in order to assess the  recoverability of the carrying value of the CGU.  The determination of the recoverable amount, being the higher of  value in use (“VIU”) and fair value less costs to dispose (“FVLCD”),  requires judgement and estimation by management. This is because  the determination of recoverable amount reflects management’s  consideration of key internal inputs and external market conditions,  such as future paper prices, customer demand and forecast growth  rates, which all impact future cash flows, and the determination  of the most appropriate discount rate. Therefore, we considered  it to be a key audit matter.  Refer to notes 10 and 35 of the group financial statements,  and the Audit Committee’s views set out on page 114. | We satisfied ourselves as to the appropriateness of the  judgement related to the level at which impairment of these  assets is assessed, being the lowest level at which largely  independent cash inflows can be identified (the “CGU”).  We evaluated management’s assessment of impairment and  impairment reversal indicators by comparing actual performance  with the budget and considering other internal and external  factors, including those set out in IAS 36 ‘Impairment of Assets’.  In relation to the CGUs where impairment indicators were  identified, for certain CGUs we engaged our component teams  with oversight from the group audit team in the UK, and challenged  the basis for management’s estimates of growth rates and future  cash flows with reference to historical trading performance,  market expectations and management forecasts.  We used our internal valuation experts to independently  recalculate the discount rates and evaluate the long-term growth  assumptions applied by management. We also checked the  mathematical accuracy of management’s valuation models. Where  management had obtained independent, third party valuations to  determine the fair value less costs to dispose of individual assets  or specific CGUs, we assessed the external valuation reports  and the professional qualifications of these third party valuers.  Based on the procedures performed, we noted no material issues  from our work. |
| Impairment indicator assessment of the parent company investment in subsidiaries (parent) | |
|  |  |
| The investment in Mondi South Africa (Pty) Limited held by  Mondi plc at 31 December 2023 amounts to €666 million  (FY22: €666 million), with an accumulated impairment of  €117 million. No further impairment charges have been recorded  in the year as there was no impairment trigger identified.  Management has also considered whether an indicator of  impairment reversal has arisen during 2023 but concluded  that this was not the case.  Management has considered various internal and external  indicators of impairment in assessing whether the investment  might be impaired in 2023. No indicator of impairment or  impairment reversal was identified based on consideration  of the qualitative and quantitative factors outlined in IAS 36  ‘Impairment of Assets’.  Given the inherent judgement required and the quantum of  the balances in the parent company’s balance sheet, this matter  was determined to be a key audit matter.  Refer to notes 1 and 6 of the parent company financial statements. | We considered the adequacy and completeness of management’s  impairment and impairment reversal indicator analysis as at  31 December 2023 by assessing it against the requirements  of IAS 36 ‘Impairment of Assets’. We also validated the accuracy  of the data supporting the assessment.  We considered the appropriateness of the disclosures in the  parent company financial statements.  Based on the procedures performed, we noted no material issues  from our work. |
|  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 159 |
|  |  |  |

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements

as a whole, taking into account the structure of the group and the parent company, the accounting processes and controls, and the

industry in which they operate.

In establishing the overall approach to the group audit, we determined the type of work that needed to be performed at components

by us, as the group engagement team, or component auditors operating under our instruction.

We identified one component (2022: three) as a significant component (as defined within ISAs (UK)) which, in our view, required an audit

of its complete financial information, due to its financial significance to the group. Outside of this component, we obtained full scope

audit reporting from a further seven components (2022: five), where we concluded that the component engagement leader is a Key

Audit Partner (as defined under ISAs (UK)), and an additional 20 components where full scope audits were performed (2022: 19).

Together, these components were in 11 countries (2022: 11), representing the group’s principal businesses. The group engagement team

performed work at two of these components, with component auditors operating under our instruction performing the work on the other

full scope components.

An audit of specific financial statement line items was performed at a further ten (2022: five) components, with the component auditors

operating under our instruction. In addition, the group engagement team performed specified procedures at four components (2022:

three) related to transactions or balances. Central testing was also performed on selected items, such as goodwill, primarily to ensure

appropriate audit coverage. In aggregate, the locations subject to audit procedures represented 77% (2022: 72%) of the group’s revenue

from continuing operations.

The components included within the scope of our audit were determined based on the individual component's contribution to the

group’s key financial statement line items (in particular revenue and profit before tax adjusted for special items), and considerations

relating to aggregation risk within the group.

Where work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at

those components to be able to conclude on whether sufficient appropriate audit evidence had been obtained as a basis for our opinion

on the group financial statements as a whole.

We issued formal written instructions to all component auditors setting out the audit work to be performed by each of them and

maintained regular communication with them throughout the audit cycle. These interactions included attending certain component audit

clearance meetings, in person or by video conferencing, as well as reviewing and assessing any matters reported. We also held a virtual

planning meeting with component auditors ahead of the year-end audit to agree on effective working arrangements and key areas of

audit focus.

We issued separate instructions and held virtual meetings with the third party component team in Russia, to ensure effective remote

working arrangements. We reviewed selected audit working papers for certain in-scope component teams, including the significant

component and the seven components where we concluded that the component engagement leader is a Key Audit Partner.

In addition, senior members of the group engagement team visited component teams in Austria, the Czech Republic, Poland, Sweden,

South Africa and Türkiye. These visits included meetings with local management and with the component auditors, and typically involved

operating site tours.

The impact of climate risk on our audit

In planning our work, including identifying areas of audit risk and determining an appropriate response, we were mindful of the increased

focus on the impact of climate change risk on companies and their financial reporting, and also that the group has identified climate change

as a principal risk. Climate change risk is expected to have a significant impact on the group’s business as the operations and strategy of the

group evolve to address the potential physical and transition risks that could arise and the opportunities associated with climate change.

Climate change initiatives and commitments impact the group in a variety of ways, as described within the Integrated Report.

The Board has made commitments to achieve Net-Zero GHG emissions reduction targets by 2050. As part of our audit we made

enquiries of management to understand the process management adopted to assess the extent of the potential impact of climate

change risk on the group’s financial statements, including considering the Mondi Action Plan 2030 (“MAP2030”) science-based targets

as detailed within the Integrated Report, which are in the process of being re-submitted for validation following the divestment of the

Russian operations.

We challenged the completeness of management’s climate risk assessment by reading external reporting made by management,

including the Sustainable Development Report and Carbon Disclosure Project submissions, and making management aware of any

apparent internal inconsistencies there may be in its climate reporting.

We also considered the key financial statement line items and estimates that are most likely to be impacted by climate risks, as set out

in note 1 of the group financial statements. Given that the impact of climate change on the group is likely, principally, to crystallise in the

medium to long-term, we concluded that the risks of material misstatement in the financial statements associated with climate change

related primarily to the valuation of forestry assets and estimates of future cash flows, which are used, for example, when testing assets

for impairment. Management considers that the impact of climate change does not give rise to a material financial statement impact.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 160 |
|  |  |  |

Independent auditors’ report to the members of

#### Mondi plc



#### continued

We also considered the consistency of the disclosures in relation to climate change (including the disclosures in relation to the

Task Force on Climate-related Financial Disclosures (TCFD)) made in the other information within the Integrated Report with the financial

statements and our knowledge from our audit. This included:

– Understanding which models management has used in the TCFD scenario analysis and considering whether the assumptions in the

models are consistent with the assumptions used in the financial statements; and

– Challenging the consistency of the disclosures given in the narrative reporting within the other information with the impact disclosed

within the financial statements.

Where applicable, our audit response to climate change risk is included in relevant key audit matters above. Refer also to notes 1, 12, 14, 25

and 35 of the group financial statements for disclosures related to climate change. Our procedures did not identify any material impact in

the context of our audit of the financial statements as a whole, or our key audit matters for the year ended 31 December 2023.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,

together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit

procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually

and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Financial statements – group | Financial statements – parent company |
| Overall materiality | €35 million (2022: €65 million). | €47 million (2022: €40 million). |
| How we  determined it | based on approximately 5% of profit before tax (‘PBT’)  from continuing operations adjusted for special items  (2022: based on approximately 5% of profit before tax  ('PBT') from continuing operations adjusted for  special items) | based on approximately 1% of total assets (2022: based  on approximately 1% of total assets) |
| Rationale for  benchmark applied | For overall group materiality, we chose profit before tax  from continuing operations adjusted for special items as  the benchmark. The adjusted profit before tax measure  removes the impact of significant items which do not  recur from year to year or otherwise significantly affect  the underlying trend of performance from continuing  operations. This is the metric against which the  performance of the group is most commonly  assessed by management and reported to members.  We chose 5% as this is consistent with the  quantitative materiality threshold typically used  for other profit‑oriented companies. | For overall Mondi plc parent company materiality,  we determined the materiality based on total assets,  which is more appropriate than a performance-related  measure as the parent company is an investment  holding company for the group. Using professional  judgement, we determined materiality for this year at  €47 million (2022: €40 million), which equates to  approximately 1% of the current year’s total assets. |

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range

of materiality allocated across components was between €2 million and €31.5 million.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and

undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit

and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample

sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to €26 million (2022: €49 million) for the group

financial statements and €35 million (2022: €30 million) for the parent company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and

aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €3 million (group audit)

(2022: €3.5 million) and €3 million (parent company audit) (2022: €3.5 million) as well as misstatements below those amounts that, in our

view, warranted reporting for qualitative reasons.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 161 |
|  |  |  |

#### Conclusions relating to going conce

rn

Our evaluation of the directors’ assessment of the group's and the parent company’s ability to continue to adopt the going concern basis

of accounting included:

– We assessed management’s going concern cash flow projections, agreeing them to the latest Board approved forecasts;

– We evaluated management’s future cash flows with reference to historical trading performance, market expectations from industry

or economic reports and management capital investment plans;

– We tested the available committed debt facilities to our year end audit work, including checking that the key terms were applied

appropriately in the going concern assessment related to the maturity dates of available committed debt facilities and satisfied

ourselves that there are no financial covenants in these facilities;

– We considered the potential downside sensitivities that management had applied and considered their likelihood and whether more

severe scenarios could arise and the associated impact on available liquidity;

– We assessed management’s reverse stress test and considered the likelihood of events arising that could erode liquidity within the

forecast period;

– We assessed the performance of the group since year end and compared it with the Board approved cash flow forecast;

– We read the basis of preparation note to the financial statements and validated that it accurately described management’s going

concern considerations; and

– We tested the assumption that management's assessment is performed on the basis of continuing operations only, ensuring that

it excluded any proceeds from the Russian disposal.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually

or collectively, may cast significant doubt on the group's and the parent company’s ability to continue as a going concern for a period

of at least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and the

parent company's ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or

draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate

to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

#### Reporting on other information

The other information comprises all of the information in the Integrated Report other than the financial statements and our auditors’

report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other

information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any

form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise

appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform

procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other

information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies

Act 2006 have been included.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 162 |
|  |  |  |

Independent auditors’ report to the members of

#### Mondi plc



#### continued

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions

and matters as described below.

Strategic report and Directors’ report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors'

report for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit,

we did not identify any material misstatements in the Strategic report and Directors' report.

Directors’ Remuneration

In our opinion, the part of the Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

#### Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the

corporate governance statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance

Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information

are described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance

statement, included within the Strategic report and the Corporate governance report, is materially consistent with the financial

statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:

– The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

– The disclosures in the Integrated Report that describe those principal risks, what procedures are in place to identify emerging risks

and an explanation of how these are being managed or mitigated;

– The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis

of accounting in preparing them, and their identification of any material uncertainties to the group’s and parent company’s ability to

continue to do so over a period of at least twelve months from the date of approval of the financial statements;

– The directors’ explanation as to their assessment of the group's and parent company’s prospects, the period this assessment covers

and why the period is appropriate; and

– The directors’ statement as to whether they have a reasonable expectation that the parent company will be able to continue in

operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention

to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and parent company was substantially less in

scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking

that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the

statement is consistent with the financial statements and our knowledge and understanding of the group and parent company and their

environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate

governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:

– The directors’ statement that they consider the Integrated Report, taken as a whole, is fair, balanced and understandable, and provides the

information necessary for the members to assess the group’s and parent company's position, performance, business model and strategy;

– The section of the Integrated Report that describes the review of effectiveness of risk management and internal control systems; and

– The section of the Integrated Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the parent company’s

compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules

for review by the auditors.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 163 |
|  |  |  |

#### Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Directors' responsibility statement, the directors are responsible for the preparation of the financial

statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also

responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the

directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which

our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations

related to breaches of environmental regulations and breaches of sanctions in relation to Russia, and we considered the extent to which

non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a

direct impact on the financial statements such as the Companies Act 2006 and relevant tax legislation. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and

determined that the principal risks were related to posting inappropriate journal entries to increase revenue and management bias in

accounting estimates and judgements. The group engagement team shared this risk assessment with the component auditors so that

they could include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the group

engagement team and/or component auditors included:

– Discussions with management, Internal Audit and the group’s internal legal counsel, including consideration of potential instances

of non-compliance with laws and regulation and fraud and the group's processes for addressing sanctions risk in Russia;

– Assessment of matters reported through the group’s whistleblowing helpline and the results of management’s investigation of such

matters;

– Testing controls in relation to IT systems within the group, in part to identify whether opportunities exist to carry out fraud through

inappropriate access to systems and data;

– Testing a sample of journal entries posted to revenue based on specific risk criteria; and

– Challenging assumptions and judgements made by management in its accounting estimates or judgements as a whole and assessing

whether there has been any management bias in aggregate.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of

non‑compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.

Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,

as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing

techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will

often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to

enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: [www.frc.org.uk/](www.frc.org.uk/auditorsresponsibilities)

[auditorsresponsibilities](www.frc.org.uk/auditorsresponsibilities). This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the parent company’s members as a body in accordance with

Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume

responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where

expressly agreed by our prior consent in writing.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 164 |
|  |  |  |

Independent auditors’ report to the members of

#### Mondi plc



#### continued

#### Other required reporting

#### Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

– we have not obtained all the information and explanations we require for our audit; or

– adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received

from branches not visited by us; or

– certain disclosures of directors’ remuneration specified by law are not made; or

– the parent company financial statements and the part of the Remuneration Report to be audited are not in agreement with the

accounting records and returns.

We have no exceptions to report arising from this responsibility.

#### Appointment

Following the recommendation of the Audit Committee, we were appointed by the members on 11 May 2017 to audit the financial

statements for the year ended 31 December 2017 and subsequent financial periods. The period of total uninterrupted engagement

is seven years, covering the years ended 31 December 2017 to 31 December 2023.

#### Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial

statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct

Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over

whether the annual financial report will be prepared using the single electronic format specified in the ESEF RTS.

#### Simon Morley

(Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

21 February 2024

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 165 |
|  |  |  |

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
|  |  | 2023 | | | 2022 | | |
| € million | Notes | Underlying | Special items  (note 3) | Total | Underlying | Special items  (note 3) | Total |
| From continuing operations |  |  |  |  |  |  |  |
| Group revenue | 2 | 7,330 | — | 7,330 | 8,902 | — | 8,902 |
| Materials, energy and consumables used |  | (3,971) | — | (3,971) | (4,728) | — | (4,728) |
| Variable selling expenses |  | (618) | — | (618) | (741) | — | (741) |
| Gross margin |  | 2,741 | — | 2,741 | 3,433 | — | 3,433 |
| Maintenance and other indirect expenses |  | (374) | — | (374) | (346) | — | (346) |
| Personnel costs | 5 | (1,087) | (9) | (1,096) | (1,077) | — | (1,077) |
| Other net operating expenses |  | (79) | (14) | (93) | (162) | — | (162) |
| Gain on disposal of businesses, net of related  transaction costs | 26 | — | — | — | — | 242 | 242 |
| EBITDA | 2 | 1,201 | (23) | 1,178 | 1,848 | 242 | 2,090 |
| Depreciation, amortisation and impairments |  | (411) | (4) | (415) | (405) | — | (405) |
| Operating profit | 2 | 790 | (27) | 763 | 1,443 | 242 | 1,685 |
| Net (loss)/profit from joint ventures | 15 | (5) | — | (5) | 1 | — | 1 |
| Impairment of investments in joint ventures | 15 | (5) | — | (5) | — | — | — |
| Net monetary gain arising from hyperinflationary  economies | 1 | 2 | — | 2 | 17 | — | 17 |
| Investment income | 6 | 45 | — | 45 | 6 | — | 6 |
| Foreign currency gains/(losses) | 6 | 1 | — | 1 | (5) | — | (5) |
| Finance costs | 6 | (119) | — | (119) | (144) | — | (144) |
| Profit before tax |  | 709 | (27) | 682 | 1,318 | 242 | 1,560 |
| Tax (charge)/credit | 7a | (167) | 6 | (161) | (296) | (5) | (301) |
| Profit from continuing operations |  | 542 | (21) | 521 | 1,022 | 237 | 1,259 |
| From discontinued operations |  |  |  |  |  |  |  |
| (Loss)/profit from discontinued operations | 28 |  |  | (655) |  |  | 266 |
| (Loss)/profit for the year |  |  |  | (134) |  |  | 1,525 |
| Attributable to: |  |  |  |  |  |  |  |
| Non-controlling interests | 33 |  |  | 19 |  |  | 73 |
| Shareholders |  |  |  | (153) |  |  | 1,452 |
|  |  |  |  |  |  |  |  |
| Earnings per share (EPS) attributable to  shareholders |  |  |  |  |  |  |  |
| euro cents |  |  |  |  |  |  |  |
| From continuing operations |  |  | | |  | | |
| Basic EPS | 8 | 103.5 | | | 244.5 | | |
| Diluted EPS | 8 | 103.5 | | | 244.4 | | |
| Basic underlying EPS | 8 | 107.8 | | | 195.6 | | |
| Diluted underlying EPS | 8 | 107.8 | | | 195.6 | | |
| From continuing and discontinued operations |  |  | | |  | | |
| Basic EPS | 8 | (31.5) | | | 299.3 | | |
| Diluted EPS | 8 | (31.5) | | | 299.2 | | |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 166 |
|  |  |  |

#### Consolidated income statement

#### for the year ended

#### 31 December 2023

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| € million | Before tax  amount | Tax  credit | Net of tax  amount | Before tax  amount | Tax  charge | Net of tax  amount |
| (Loss)/profit for the year |  |  | (134) |  |  | 1,525 |
| Items that may subsequently be or have been reclassified to the  consolidated income statement |  |  |  |  |  |  |
| Fair value gains arising from cash flow hedges of continuing operations | — | — | — | 1 | — | 1 |
| Fair value gains arising from cash flow hedges of discontinued  operations (see note 28) | — | — | — | 1 | — | 1 |
| Exchange differences on translation of continuing non-euro operations | (70) | — | (70) | 35 | — | 35 |
| Exchange differences on translation of discontinued non-euro  operations (see note 28) | (227) | — | (227) | 72 | — | 72 |
| Reclassification of foreign currency translation reserve to the  consolidated income statement on disposal of businesses of continuing  operations (see note 26) | — | — | — | (4) | — | (4) |
| Reclassification of foreign currency translation reserve to the  consolidated income statement on disposal of businesses of  discontinued operations (see note 28) | 633 | — | 633 | — | — | — |
| Items that will not subsequently be reclassified to the consolidated  income statement |  |  |  |  |  |  |
| Remeasurements of retirement benefits plans of continuing operations: | (23) | 7 | (16) | 8 | (3) | 5 |
| Return on plan assets | (3) |  |  | (43) |  |  |
| Actuarial gains arising from changes in demographic assumptions | 1 |  |  | 7 |  |  |
| Actuarial (losses)/gains arising from changes in financial assumptions | (4) |  |  | 58 |  |  |
| Actuarial losses arising from experience adjustments | (17) |  |  | (14) |  |  |
| Remeasurements of retirement benefits plans of discontinued  operations (see note 28) | — | — | — | 1 | — | 1 |
| Other comprehensive income/(expense) for the year | 313 | 7 | 320 | 114 | (3) | 111 |
| Other comprehensive income/(expense) attributable to: |  |  |  |  |  |  |
| Non-controlling interests |  |  | (3) |  |  | 6 |
| Shareholders |  |  | 323 |  |  | 105 |
| Total comprehensive income attributable to: |  |  |  |  |  |  |
| Non-controlling interests |  |  | 16 |  |  | 79 |
| Shareholders |  |  | 170 |  |  | 1,557 |
|  |  |  |  |  |  |  |
| Total comprehensive income/(expense) attributable to shareholders  arises from: |  |  |  |  |  |  |
| Continuing operations |  |  | 419 |  |  | 1,217 |
| Discontinued operations |  |  | (249) |  |  | 340 |
|  |  |  |  |  |  |  |
| Total comprehensive income for the year |  |  | 186 |  |  | 1,636 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 167 |
|  |  |  |

#### Consolidated statement of comprehensive income

#### for the year ended

#### 31 December 2023

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| € million | Notes | 2023 | 2022 |
| Property, plant and equipment | 10 | 4,619 | 4,167 |
| Goodwill | 12 | 765 | 769 |
| Intangible assets | 13 | 68 | 64 |
| Forestry assets | 14 | 519 | 485 |
| Investments in joint ventures | 15 | 8 | 18 |
| Financial instruments |  | 28 | 25 |
| Deferred tax assets | 7b | 24 | 34 |
| Net retirement benefits asset | 24 | 5 | 8 |
| Other non-current assets |  | 5 | 8 |
| Total non-current assets |  | 6,041 | 5,578 |
| Inventories | 16 | 1,049 | 1,359 |
| Trade and other receivables | 17 | 1,254 | 1,448 |
| Current tax assets |  | 14 | 9 |
| Financial instruments |  | 14 | 4 |
| Cash and cash equivalents | 27b | 1,592 | 1,067 |
|  |  | 3,923 | 3,887 |
| Assets held for sale | 28 | — | 1,382 |
| Total current assets |  | 3,923 | 5,269 |
| Total assets |  | 9,964 | 10,847 |
|  |  |  |  |
| Short-term borrowings | 21 | (559) | (102) |
| Trade and other payables | 18 | (1,219) | (1,525) |
| Current tax liabilities |  | (78) | (137) |
| Provisions | 19 | (21) | (22) |
| Financial instruments |  | (4) | (10) |
|  |  | (1,881) | (1,796) |
| Liabilities directly associated with assets held for sale | 28 | — | (325) |
| Total current liabilities |  | (1,881) | (2,121) |
| Medium- and long-term borrowings | 21 | (1,460) | (1,970) |
| Net retirement benefits liability | 24 | (159) | (155) |
| Deferred tax liabilities | 7b | (322) | (307) |
| Provisions | 19 | (27) | (27) |
| Other non-current liabilities |  | (19) | (13) |
| Total non-current liabilities |  | (1,987) | (2,472) |
| Total liabilities |  | (3,868) | (4,593) |
|  |  |  |  |
| Net assets |  | 6,096 | 6,254 |
|  |  |  |  |
| Equity |  |  |  |
| Share capital | 22 | 97 | 97 |
| Own shares | 22 | (17) | (16) |
| Retained earnings |  | 5,434 | 5,895 |
| Other reserves | 22 | 141 | (182) |
| Total attributable to shareholders |  | 5,655 | 5,794 |
| Non-controlling interests in equity | 33 | 441 | 460 |
| Total equity |  | 6,096 | 6,254 |

The Group’s  consolidated financial statements on pages [166](#i47a6727b8bad4fe28addb4dae187e293_13)-[224](#i47a6727b8bad4fe28addb4dae187e293_178), including related notes  1 to  35 , were approved by the  Board

and authorised for issue on 21 February 2024  and were signed on its behalf by:

#### Andrew King

#### Mike Powell

Director Director

Mondi plc company registered number: 6209386

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 168 |
|  |  |  |

#### Consolidated statement of financial position

as at

#### 31 December 2023

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| € million | Share  capital | Own shares | Retained  earnings | Other  reserves | Equity  attributable to  shareholders | Non-  controlling  interests | Total  equity |
| At 1 January 2022 | 97 | (18) | 4,749 | (284) | 4,544 | 386 | 4,930 |
| Total comprehensive income for the year: | — | — | 1,452 | 105 | 1,557 | 79 | 1,636 |
| Profit for the year | — | — | 1,452 | — | 1,452 | 73 | 1,525 |
| Other comprehensive income | — | — | — | 105 | 105 | 6 | 111 |
| Hyperinflation monetary adjustment | — | — | 16 | — | 16 | 1 | 17 |
| Transactions with shareholders in their capacity  as shareholders |  |  |  |  |  |  |  |
| Dividends | — | — | (321) | — | (321) | (9) | (330) |
| Purchases of own shares | — | (7) | — | — | (7) | — | (7) |
| Distribution of own shares | — | 9 | (9) | — | — | — | — |
| Mondi share schemes’ charge | — | — | — | 11 | 11 | — | 11 |
| Issue of shares under employee share schemes | — | — | 10 | (10) | — | — | — |
| Disposal of businesses | — | — | — | (4) | (4) | — | (4) |
| Other movements in non-controlling interests | — | — | (2) | — | (2) | 3 | 1 |
| At 31 December 2022 | 97 | (16) | 5,895 | (182) | 5,794 | 460 | 6,254 |
| Total comprehensive income for the year: | — | — | (153) | 323 | 170 | 16 | 186 |
| (Loss)/profit for the year | — | — | (153) | — | (153) | 19 | (134) |
| Other comprehensive income/(expense) | — | — | — | 323 | 323 | (3) | 320 |
| Hyperinflation monetary adjustment (see note 1) | — | — | 16 | (2) | 14 | 1 | 15 |
| Transactions with shareholders in their capacity  as shareholders |  |  |  |  |  |  |  |
| Dividends (see note 9) | — | — | (345) | — | (345) | (7) | (352) |
| Purchases of own shares | — | (8) | — | — | (8) | — | (8) |
| Distribution of own shares | — | 7 | (7) | — | — | — | — |
| Mondi share schemes’ charge (see note 23) | — | — | — | 9 | 9 | — | 9 |
| Issue of shares under employee share schemes | — | — | 7 | (7) | — | — | — |
| Non-controlling interests bought out | — | — | 21 | — | 21 | (29) | (8) |
| At 31 December 2023 | 97 | (17) | 5,434 | 141 | 5,655 | 441 | 6,096 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 169 |
|  |  |  |

#### Consolidated statement of changes in equity

#### for the year ended

#### 31 December 2023

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| € million | Notes | 2023 | 2022 |
| Cash flows from operating activities |  |  |  |
| Cash generated from continuing operations | 27a | 1,312 | 1,292 |
| Dividends received from other investments |  | 2 | 2 |
| Income tax paid |  | (178) | (196) |
| Net cash generated from operating activities of discontinued operations | 28 | 223 | 350 |
| Net cash generated from operating activities |  | 1,359 | 1,448 |
|  |  |  |  |
| Cash flows from investing activities |  |  |  |
| Investment in property, plant and equipment | 2 | (830) | (508) |
| Investment in intangible assets | 13 | (16) | (12) |
| Investment in forestry assets | 14 | (48) | (49) |
| Proceeds from the disposal of property, plant and equipment |  | 25 | 7 |
| Proceeds from the disposal of financial asset investments |  | 2 | 5 |
| Acquisition of businesses, net of cash and cash equivalents | 25 | (37) | — |
| Proceeds from the disposal of businesses, net of cash and cash equivalents | 26 | — | 642 |
| Loans advanced to related and external parties |  | (1) | — |
| Interest received |  | 38 | 6 |
| Other investing activities |  | 17 | 9 |
| Net cash generated from/(used in) investing activities of discontinued operations | 28 | 368 | (68) |
| Net cash (used in)/generated from investing activities |  | (482) | 32 |
|  |  |  |  |
| Cash flows from financing activities |  |  |  |
| Repayment of other medium- and long-term borrowings | 27c | — | (53) |
| Proceeds from short-term borrowings1 | 27c | 16 | 44 |
| Repayment of short-term borrowings1 | 27c | (33) | (53) |
| Repayment of lease liabilities | 27c | (22) | (21) |
| Interest paid | 27c | (50) | (60) |
| Dividends paid to shareholders | 9 | (345) | (321) |
| Dividends paid to non-controlling interests |  | (7) | (9) |
| Purchases of own shares |  | (8) | (7) |
| Non-controlling interests bought out |  | (8) | — |
| Net cash outflow from debt-related derivative financial instruments | 27c | (77) | (83) |
| Other financing activities |  | — | 1 |
| Net cash used in financing activities of discontinued operations | 28 | (7) | (10) |
| Net cash used in financing activities |  | (541) | (572) |
|  |  |  |  |
| Net increase in cash and cash equivalents |  | 336 | 908 |
|  |  |  |  |
| Cash and cash equivalents at beginning of year |  | 1,381 | 455 |
| Cash movement in the year | 27c | 336 | 908 |
| Effects of changes in foreign exchange rates | 27c | (125) | 18 |
| Cash and cash equivalents at end of year | 27b | 1,592 | 1,381 |

Note:

1 Net repayment of short-term borrowings as presented previously has been further analysed to separately show proceeds from, and repayment of, short-term borrowings.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 170 |
|  |  |  |

#### Consolidated statement of cash flows

#### for the year ended

#### 31 December 2023

#### 1 Basis of preparation

These consolidated financial statements as at and for the year ended 31 December 2023 comprise  Mondi plc and its subsidiaries

(referred to as 'the  Group’), and the  Group’s share of the results and net assets of its associates and joint ventures.

The Group’s consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards

and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The principal

accounting policies adopted are set out in note 35 and were applied consistently throughout the year and preceding year.

The Group also applies International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board

(IASB), and there are no differences with applying IFRSs adopted for use in the UK which may significantly or materially affect the

Group’s  accounting policies.

The consolidated financial statements have been prepared on a going concern basis. The directors have reviewed the Group’s budget

and considered the assumptions contained in the budget, including the principal and emerging risks which may impact the  Group’s

performance in the near term. The Group has a strong balance sheet. At 31 December 2023, the Group had a liquidity position of

€2,346 million, comprising €754 million of undrawn committed debt facilities and cash and cash equivalents of €1,592 million, which

include proceeds from the disposal of discontinued operations of €806 million. As the Group’s debt facilities and loan agreements

contain no financial covenants, in performing its going concern assessment the directors have focused on liquidity, which was adjusted

to exclude the net proceeds from the disposal of discontinued operations, given that these were distributed to shareholders by way of

a special dividend in February 2024 (see notes 9 and 22). The assessment of going concern is further described in the Strategic report

under the heading Going concern on page [81](#i3fce26f9c2c6487a8a912e195c1d5e31_104605),  which is incorporated by reference into these financial statements. Based on this

evaluation, the Board considered it appropriate to prepare the consolidated financial statements on the going concern basis.

The consolidated financial statements have been prepared under the historical cost basis of accounting, as modified by forestry assets,

pension assets, certain financial assets and financial liabilities held at fair value through profit and loss, assets acquired and liabilities

assumed in a business combination and accounting in hyperinflationary economies.

The Group presents certain measures of financial performance, position or cash flows that are not defined or specified according to

IFRSs and UK-adopted International Accounting Standards. These measures, referred to as Alternative Performance Measures (APMs),

are defined on pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579).

#### Critical accounting judgements and significant accounting estimates

The preparation of the Group’s consolidated financial statements includes the use of estimates and assumptions. Although the estimates

used are based on management’s best information about current circumstances and future events and actions, actual results may differ

from those estimates. The critical accounting judgements and significant accounting estimates with a significant risk of a material change

to the carrying value of assets and liabilities within the next year in terms of IAS 1, 'Presentation of Financial Statements', are:

Significant accounting estimates

– Fair value of forestry assets – refer to note 14

– Actuarial valuations of retirement benefit obligations – refer to note 24

Other areas of judgement and accounting estimates

The consolidated financial statements include other areas of judgement and accounting estimates. While these areas do not meet the

definition under IAS 1 of significant accounting estimates or critical accounting judgements, the recognition and measurement of certain

material assets and liabilities are based on assumptions and/or are subject to longer-term uncertainties. The other areas of judgement

and accounting estimates include:

– Hyperinflation accounting – refer to notes 1 and 35

– Climate change – refer to note 1

– Taxation – refer to notes 7 and 35

– Residual values and useful economic lives of property, plant and equipment – refer to notes 10 and 35

– Fair value of assets acquired and liabilities assumed in business combinations - refer to notes 25 and 35

#### Climate change

Management has considered the impact of climate change in preparing these consolidated financial statements, in particular in the context

of the disclosures included in the Strategic report, including the Group’s science-based Net-Zero GHG emission reduction targets

as detailed in the Mondi Action Plan 2030 (MAP2030) Taking Action on Climate section on pages [51](#i47a6727b8bad4fe28addb4dae187e293_5818)-[64](#i4ac15be5956442469b5aca6f9a6648f1_9-4-1-1-471489). These considerations, which

are integral to the Group’s strategy, did not have a material impact on the accounting estimates and judgements, including the

following areas:

– Estimates of future cash flows used in the impairment assessment of goodwill – refer to note 12

– Assumptions used in the fair value measurement of forestry assets – refer to note 14

– Residual values and useful economic lives of property, plant and equipment – refer to note 35

– Fair value of assets acquired and liabilities assumed in business combinations – refer to note 25

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 171 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023

#### 1 Basis of preparation



#### continued

While these considerations did not have a material impact on the areas set out above, this may change in future periods as management

evolves its understanding of climate change-related impacts on the Group.

#### Hyperinflation accounting (see note

35)

The Group has applied IAS 29, 'Financial Reporting in Hyperinflationary Economies', for its subsidiaries in Türkiye and Lebanon

(2022: Türkiye), whose functional currencies have experienced a cumulative inflation rate of more than 100% over the past three years,

respectively. The consumer price index increased in Türkiye by 65% from 1,128 at 31 December 2022 to 1,859 at 31 December 2023

and in Lebanon by 212% from 1,917 at 31 December 2022 to 5,978 at 31 December 2023. For the year ended 31 December 2023,

the adjustments from hyperinflationary accounting have resulted in an increase in Group revenue of €116 million (2022: €125 million),

a decrease in underlying EBITDA of €16 million (2022: €44 million) and a net monetary gain of €2 million (2022: €17 million). As at

31 December 2023, the adjustments from hyperinflationary accounting have resulted in an accumulated increase in total assets of

€115 million (2022: €91 million). Comparative amounts presented in euro were not restated for subsequent changes in the price level

or exchange rates.

IAS 29 requires judgement to determine when to apply hyperinflationary accounting and which general price index to select and other

approximations to be made in order to restate the financial statements of subsidiaries operating in a hyperinflationary economy.

#### 2 Operating segments

The Group generates revenue from the sale of manufactured products across the packaging and paper value chain. Revenue is generally

recognised at a point in time, typically when the goods have been delivered to a contractually agreed location in line with the shipment

terms agreed with customers. Customer payment terms vary within the Group due to its global operations and do not contain significant

financing components.

The Group provides transport services after control of certain goods has passed to the customer. The  Group generated transport

revenue of €91 million  (2022: €139 million), which was recognised over time. The stage of completion is used to determine the amount

of revenue recognised, which is based on the transportation days completed at the reporting date relative to the total expected delivery

days.

The Group’s  operating segments are reported in a manner consistent with the internal reporting provided to the Executive Committee,

the chief operating decision-making body. The operating segments are managed based on the nature of the underlying products

produced by those businesses and, consistent with prior year, comprise three distinct segments. In 2022, the Group disposed of its

Personal Care Components business.

The material product types from which the Group’s operating segments derive their internal and external revenues are as follows:

|  |  |
| --- | --- |
|  |  |
| Operating segments | Product types |
| Corrugated Packaging | Containerboard |
|  | Corrugated solutions |
| Flexible Packaging | Kraft paper |
|  | Paper bags |
|  | Consumer flexibles |
|  | Functional paper and films |
|  | Pulp |
| Uncoated Fine Paper | Uncoated fine paper |
|  | Pulp |

The Group’s previously owned operations in Russia are reported as discontinued operations and no longer reported to the

Executive Committee, and hence not disclosed for all periods presented in this note. The discontinued operations' net (loss)/profit

and cash flows are presented separately in the consolidated income statement and consolidated statement of cash flows for all periods

presented. Financial information relating to the discontinued operations is provided in note 28.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 172 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Year ended

#### 31 December 2023

1

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| € million, unless otherwise stated | Corrugated  Packaging | Flexible  Packaging | Uncoated  Fine Paper | Corporate | Personal Care  Components  (divested) | Intersegment  elimination | Total  continuing  operations |
| Segment revenue | 2,280 | 3,866 | 1,292 | — | — | (104) | 7,334 |
| Internal revenue2 | (23) | (33) | (52) | — | — | 104 | (4) |
| External revenue | 2,257 | 3,833 | 1,240 | — | — | — | 7,330 |
| Underlying EBITDA | 310 | 637 | 289 | (35) | — | — | 1,201 |
| Depreciation and impairments3 | (144) | (183) | (66) | (1) | — | — | (394) |
| Amortisation | (7) | (8) | (2) | — | — | — | (17) |
| Underlying operating profit/(loss) | 159 | 446 | 221 | (36) | — | — | 790 |
| Special items before tax | — | — | (27) | — | — | — | (27) |
| Capital employed | 2,318 | 3,167 | 1,095 | (65) | — | — | 6,515 |
| Trailing 12-month average capital employed | 2,057 | 3,068 | 1,075 | (65) | — | — | 6,135 |
| Additions to non-current non-financial assets | 379 | 427 | 129 | — | — | — | 935 |
| Capital expenditure cash payments | 326 | 425 | 79 | — | — | — | 830 |
| Underlying EBITDA margin (%) | 13.6 | 16.5 | 22.4 | — | — | — | 16.4 |
| Return on capital employed (%) | 7.7 | 14.4 | 20.6 | — | — | — | 12.8 |
| Average number of employees (thousands)4 | 6.5 | 11.6 | 2.8 | 0.1 | — | — | 21.0 |

#### Year ended

#### 31 December 2022

1

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| € million, unless otherwise stated | Corrugated  Packaging | Flexible  Packaging | Uncoated  Fine Paper | Corporate | Personal Care  Components  (divested) | Intersegment  elimination | Total  continuing  operations |
| Segment revenue | 2,991 | 4,299 | 1,613 | — | 181 | (143) | 8,941 |
| Internal revenue2 | (51) | (51) | (68) | — | (12) | 143 | (39) |
| External revenue | 2,940 | 4,248 | 1,545 | — | 169 | — | 8,902 |
| Underlying EBITDA | 662 | 797 | 427 | (39) | 1 | — | 1,848 |
| Depreciation and impairments3 | (133) | (181) | (70) | (1) | (3) | — | (388) |
| Amortisation | (7) | (8) | (2) | — | — | — | (17) |
| Underlying operating profit/(loss) | 522 | 608 | 355 | (40) | (2) | — | 1,443 |
| Special items before tax | — | — | — | — | 242 | — | 242 |
| Capital employed | 2,162 | 3,035 | 1,091 | (67) | — | — | 6,221 |
| Trailing 12-month average capital employed | 2,062 | 2,916 | 1,022 | (78) | 175 | — | 6,097 |
| Additions to non-current non-financial assets | 235 | 242 | 115 | — | 9 | — | 601 |
| Capital expenditure cash payments | 212 | 223 | 64 | — | 9 | — | 508 |
| Underlying EBITDA margin (%) | 22.1 | 18.5 | 26.5 | — | 0.6 | — | 20.8 |
| Return on capital employed (%) | 25.3 | 20.9 | 34.7 | — | (1.1) | — | 23.7 |
| Average number of employees (thousands)4 | 6.4 | 11.5 | 2.9 | 0.1 | 0.5 | — | 21.4 |

Notes:

1 See pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579) for definitions of APMs.

2 Total continuing operations' internal revenue relates to transactions with discontinued operations.

3 Includes only impairments not classified as special items.

4 Presented on a full-time employee equivalent basis.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 173 |
|  |  |  |

#### 2 Operating segments



#### continued

#### External revenue by location of production and by location of customer

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | External revenue  by location of production | | External revenue  by location of customer | |
| € million | 2023 | 2022 | 2023 | 2022 |
| Africa |  |  |  |  |
| South Africa | 656 | 667 | 495 | 498 |
| Rest of Africa | 95 | 74 | 395 | 436 |
| Africa total | 751 | 741 | 890 | 934 |
| Western Europe |  |  |  |  |
| Austria | 1,301 | 1,640 | 159 | 203 |
| Germany | 579 | 808 | 954 | 1,188 |
| UK | 3 | 3 | 192 | 230 |
| Rest of Western Europe | 792 | 888 | 1,691 | 1,988 |
| Western Europe total | 2,675 | 3,339 | 2,996 | 3,609 |
| Emerging Europe |  |  |  |  |
| Czech Republic | 657 | 820 | 252 | 286 |
| Poland | 1,275 | 1,587 | 722 | 851 |
| Türkiye | 426 | 589 | 486 | 693 |
| Rest of emerging Europe | 887 | 1,089 | 521 | 629 |
| Emerging Europe total | 3,245 | 4,085 | 1,981 | 2,459 |
| Russia | — | — | 5 | 30 |
| North America | 561 | 634 | 825 | 1,000 |
| South America | 3 | 2 | 94 | 157 |
| Asia and Australia | 95 | 101 | 539 | 713 |
| Total Group revenue from continuing operations | 7,330 | 8,902 | 7,330 | 8,902 |

There were no external customers which account for more than 10% of the Group’s total external revenue in either year.

There are no material contract assets or contract liabilities as at 31 December 2023  and 31 December 2022. No contract costs were

capitalised in either year presented.

The  Group  does not disclose information about remaining performance obligations that have original expected durations of one year

or less, as permitted under IFRS 15.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 174 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Net assets by location

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| € million | Non-current  non-financial  assets | Segment  assets | Segment  net assets | Non-current  non-financial  assets | Segment  assets | Segment  net assets |
| Africa |  |  |  |  |  |  |
| South Africa | 931 | 1,135 | 1,030 | 922 | 1,133 | 1,015 |
| Rest of Africa | 60 | 158 | 155 | 68 | 176 | 170 |
| Africa total | 991 | 1,293 | 1,185 | 990 | 1,309 | 1,185 |
| Western Europe |  |  |  |  |  |  |
| Austria | 462 | 902 | 671 | 470 | 1,070 | 797 |
| Germany | 522 | 689 | 627 | 347 | 571 | 488 |
| UK | 31 | 37 | 34 | 33 | 41 | 40 |
| Rest of Western Europe | 782 | 1,015 | 922 | 631 | 868 | 763 |
| Western Europe total | 1,797 | 2,643 | 2,254 | 1,481 | 2,550 | 2,088 |
| Emerging Europe |  |  |  |  |  |  |
| Czech Republic | 965 | 1,063 | 927 | 926 | 1,044 | 843 |
| Poland | 929 | 1,215 | 1,047 | 759 | 1,112 | 933 |
| Türkiye | 168 | 328 | 254 | 182 | 420 | 320 |
| Rest of emerging Europe | 857 | 1,014 | 853 | 873 | 1,087 | 847 |
| Emerging Europe total | 2,919 | 3,620 | 3,081 | 2,740 | 3,663 | 2,943 |
| North America | 174 | 350 | 317 | 181 | 421 | 368 |
| South America | 17 | 27 | 27 | 13 | 19 | 19 |
| Asia and Australia | 78 | 159 | 147 | 87 | 170 | 157 |
| Total | 5,976 | 8,092 | 7,011 | 5,492 | 8,132 | 6,760 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 175 |
|  |  |  |

#### 2 Operating segments



#### continued

#### Reconciliation of operating segment assets

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | 2023 | | 2022 | |
| € million | Segment  assets | Segment  net assets/  (liabilities) | Segment  assets | Segment  net assets/  (liabilities) |
| Group total | 8,092 | 7,011 | 8,132 | 6,760 |
| Unallocated |  |  |  |  |
| Investments in joint ventures | 8 | 8 | 18 | 18 |
| Deferred tax assets/(liabilities) | 24 | (298) | 34 | (273) |
| Other non-operating assets/(liabilities) | 236 | (206) | 212 | (297) |
| Intra-group balances with discontinued operations | — | — | 13 | 13 |
| Capital employed of continuing operations | 8,360 | 6,515 | 8,409 | 6,221 |
| Assets held for sale and liabilities directly associated with assets held for sale  (see note 28) | — | — | 1,382 | 1,057 |
| Intra-group balances with discontinued operations | — | — | (13) | (13) |
| Group capital employed | 8,360 | 6,515 | 9,778 | 7,265 |
| Financial instruments/(net debt) | 1,604 | (419) | 1,069 | (1,011) |
| Total assets/equity | 9,964 | 6,096 | 10,847 | 6,254 |

Other non-operating assets/(liabilities) include non-current financial instruments and current tax assets/(liabilities) as presented in the

consolidated statement of financial position, provisions for restructuring costs, employee-related and other provisions (see note 19),

derivative financial instruments (see note 31d) and other non-operating receivables/(payables) of €181 million and €316 million,

respectively, as at 31 December 2023 (2022: €175 million and €317 million).

#### Average number of employees by principal location of employment

1

|  |  |  |
| --- | --- | --- |
|  |  |  |
| thousands | 2023 | 2022 |
| Africa2 | 1.9 | 1.9 |
| Western Europe | 6.5 | 6.7 |
| Emerging Europe | 10.4 | 10.5 |
| North America | 1.6 | 1.6 |
| Asia and Australia | 0.6 | 0.7 |
| Total average number of employees of continuing operations | 21.0 | 21.4 |

Notes:

1 Presented on a full-time employee equivalent basis.

2 South Africa and Rest of Africa, previously disclosed separately, are disclosed in aggregate under Africa.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 176 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 3 Special items

The Group separately discloses special items, an APM as defined on page [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178), on the face of the consolidated income statement  to

assist its stakeholders in understanding the underlying financial performance achieved by the  Group on a basis that is comparable from

year to year.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Operating special items |  |  |
| Impairment of assets | (4) | — |
| Restructuring and closure costs: |  |  |
| Personnel costs | (9) | — |
| Other restructuring and closure costs | (14) | — |
| Gain on disposal of businesses, net of related transaction costs (see note 26) | — | 242 |
| Total special items before tax | (27) | 242 |
| Tax credit/(charge) (see note 7) | 6 | (5) |
| Total special items | (21) | 237 |

The operating special items resulted in a cash outflow from operating activities of  € 10 million for the year ended 31 December 2023

( 2022:  €8 million). In the prior year, the net cash received from the sale of the Personal Care Components business totalled €642 million

and was presented within cash flows from investing activities.

To

#### 31 December 2023

The special items during the year ended 31 December 2023  comprised:

– Uncoated Fine Paper

– Closure of a paper machine and streamlining the capacity of the finishing lines at the Neusiedler operations in Austria. Restructuring

and closure costs of €23 million and related impairment of assets of €4 million were recognised.

To

#### 31 December 2022

The special items during the year ended 31 December 2022 comprised:

– Personal Care Components (divested)

– €242 million gain on the sale of the PCC business to Nitto Denko Corporation. Transaction costs of €6 million were also

recognised in the prior year and were not treated as a special item. Further detail is provided in note 26.

#### 4 Auditors' remuneration

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Fees payable to the auditors for the audit of Mondi plc’s annual financial statements | 2.0 | 1.9 |
| Fees payable to the auditors and their associates for the audit of Mondi plc’s subsidiaries | 4.1 | 4.1 |
| Total audit fees | 6.1 | 6.0 |
| Audit-related services | 0.6 | 0.4 |
| Other assurance services | — | 0.7 |
| Other services | — | — |
| Total non-audit fees | 0.6 | 1.1 |
| Total fees | 6.7 | 7.1 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 177 |
|  |  |  |

#### 5 Personnel costs

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Within underlying operating costs |  |  |
| Wages and salaries | 878 | 873 |
| Social security costs | 181 | 175 |
| Defined contribution retirement plan contributions (see note 24) | 14 | 14 |
| Defined benefit retirement plan service costs net of loss from settlement (see note 24) | 5 | 4 |
| Share-based payments (see note 23) | 9 | 11 |
| Total within underlying operating costs | 1,087 | 1,077 |
| Within special items |  |  |
| Personnel costs relating to restructuring (see note 3) | 9 | — |
| Within net finance costs |  |  |
| Retirement benefit medical plan net interest costs | 3 | 4 |
| Retirement benefit pension plan net interest costs | 5 | 2 |
| Total within net finance costs (see note 6) | 8 | 6 |
| Total personnel costs | 1,104 | 1,083 |
|  |  |  |
| Continuing operations' average number of employees (thousands)1 | 21.0 | 21.4 |

Note:

1 Presented on a full-time employee equivalent basis.

#### 6 Net finance costs

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Investment income |  |  |
| Investment income | 45 | 6 |
| Net foreign currency gains/(losses) |  |  |
| Net foreign currency gains/(losses) | 1 | (5) |
| Finance costs |  |  |
| Interest expense |  |  |
| Interest on bank overdrafts and loans | (115) | (133) |
| Interest on lease liabilities (see note 11) | (7) | (7) |
| Net interest expense on net retirement benefits liability (see note 24) | (8) | (6) |
| Total interest expense | (130) | (146) |
| Less: Interest capitalised | 11 | 2 |
| Total finance costs | (119) | (144) |
| Net finance costs | (73) | (143) |

The weighted average interest rate applicable to capitalised interest on general borrowings for the  year ended 31 December 2023

was 4.9%  ( 2022: 6.7%) and was mainly related to qualifying assets in Czech Republic (2022:  Finland and Poland).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 178 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 7 Taxation

#### (a) Analysis of tax charge for the year

The Group’s  effective rate of tax before special items for the year ended 31 December 2023 was  23.6%  (2022:  22.5% ).

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| UK corporation tax at 23.5% (2022: 19%) | — | — |
| Overseas tax | 135 | 248 |
| Current tax in respect of prior years | (13) | (8) |
| Current tax | 122 | 240 |
| Deferred tax in respect of the current year | 62 | 64 |
| Deferred tax in respect of prior years | (24) | (4) |
| Deferred tax attributable to a change in the rate of domestic income tax | 7 | (4) |
| Tax charge before special items | 167 | 296 |
| Current tax on special items | (6) | 5 |
| Tax (credit)/charge on special items (see note 3) | (6) | 5 |
| Tax charge for the year | 161 | 301 |
| Current tax charge | 116 | 245 |
| Deferred tax charge | 45 | 56 |
|  |  |  |

On 24 May 2021, legislation was substantively enacted in the UK to increase the corporate tax rate from 19% to 25% with effect from

1 April 2023. The 23.5% UK corporation tax rate referenced in the table above reflects the average tax rate that has applied during 2023.

As the Group operates in a number of countries, each with different tax systems, a degree of tax risk is inevitable, as tax laws are

complex and subject to changes in legislation and to differing interpretations. Consequently, provision has been made for such tax risk

exposures within current tax liabilities of €38 million (2022: €41 million), mainly in relation to transfer pricing risks arising from cross

border transactions. There is not expected to be any material change to the tax risk exposures or associated provisions within the next

12 months.

The Group is within the scope of the OECD Pillar 2 model rules. As of 31 December 2023, the effective tax rate in the majority of

countries in which the Group operates exceeds the 15% minimum tax rate threshold required under Pillar 2. In certain jurisdictions, notably

in Bulgaria and Hungary, there are potential impacts from this tax, given their current statutory tax rates are 10% and 9% respectively. In

addition, it is expected that additional Pillar 2 tax may be triggered in jurisdictions in which the Group benefits from tax incentives on

capital investments or tax holidays but this will ultimately depend year on year on the quantum of tax incentives available to the Group.

Therefore, quantitative information to indicate potential exposure to Pillar 2 is currently not reasonably estimable. The Group continues

to progress on the assessment and expects to complete it in 2024.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 179 |
|  |  |  |

#### 7 Taxation



#### continued

#### Factors affecting tax charge for the year

The Group’s total tax charge for the year can be reconciled to the tax on the Group’s profit before tax at the UK corporation tax rate

of 23.5% (2022: 19%), as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Profit before tax | 682 | 1,560 |
| Tax on profit before tax, calculated at the UK corporation tax rate of 23.5% (2022: 19%) | 160 | 296 |
| Tax effects of: |  |  |
| Expenses/(income) not deductible/(taxable) for tax purposes | 2 | (36) |
| Special items not taxable | — | (43) |
| Other non-deductible expenses | 2 | 7 |
| Temporary difference adjustments | (13) | (14) |
| Fixed asset revaluation | (10) | (16) |
| Changes in local tax rates1 | 7 | (4) |
| Current year tax losses and other temporary differences not recognised | 14 | 10 |
| Prior year tax losses and other temporary differences not previously recognised | (24) | (4) |
| Other adjustments | 12 | 55 |
| Current tax prior year adjustments | (13) | (8) |
| Tax incentives2 | (5) | (18) |
| Effect of differences between local rates and UK rate | (1) | 45 |
| Hyperinflation monetary adjustments (see note 1) | 19 | 15 |
| Other adjustments | 12 | 21 |
|  |  |  |
| Tax charge for the year | 161 | 301 |

Notes:

1 There have been changes in tax rates in Czech Republic, Türkiye and Austria (2022: South Africa, Türkiye and Austria).

2 The tax incentives relate to a number of countries including Poland and Serbia (2022: Slovakia and Czech Republic).

#### (b) Deferred tax

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Deferred tax assets | | Deferred tax liabilities | |
| € million | 2023 | 2022 | 2023 | 2022 |
| At 1 January | 34 | 43 | (307) | (290) |
| (Charged)/credited to the consolidated income statement | (10) | 5 | (35) | (61) |
| Credited/(charged) to the consolidated statement of comprehensive  income | 3 | (2) | 4 | (1) |
| Disposal of businesses (see note 26) | — | — | — | 8 |
| Reclassification to assets held for sale and liabilities directly associated  with assets held for sale | — | — | — | 42 |
| Reclassification | (1) | (6) | 1 | 6 |
| Hyperinflation monetary adjustment (see note 1) | (1) | (4) | — | (1) |
| Currency movements | (1) | (2) | 15 | (10) |
| At 31 December | 24 | 34 | (322) | (307) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 180 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

The amount of deferred tax (charged)/credited to the consolidated income statement comprises:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Capital allowances in excess of depreciation | (27) | (16) |
| Fair value adjustments | (23) | (33) |
| Tax losses recognised/(utilised) | 24 | (25) |
| Other temporary differences | (19) | 18 |
| Total deferred tax charge | (45) | (56) |

Deferred tax comprises:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Deferred tax assets | | Deferred tax liabilities | |
| € million | 2023 | 2022 | 2023 | 2022 |
| Capital allowances in excess of depreciation | (34) | (26) | (265) | (249) |
| Fair value adjustments | — | — | (135) | (127) |
| Tax losses | 17 | 4 | 19 | 8 |
| Other temporary differences | 41 | 56 | 59 | 61 |
| Total | 24 | 34 | (322) | (307) |

The key items within other temporary differences include retirement benefit obligations, inventory write-downs, other provisions

and accruals and elimination of intercompany profit in inventory.

Based on forecast data, the Group considers it probable that there will be sufficient future taxable profits available in the relevant

jurisdictions to utilise the tax losses and other temporary differences presented in the table above.

Deferred tax balances have been shown after offset when they relate to income taxes levied by the same tax authority and it is intended

to settle current assets and liabilities on a net basis.

The current expectation regarding the maturity of deferred tax balances is:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Deferred tax assets | | Deferred tax liabilities | |
| € million | 2023 | 2022 | 2023 | 2022 |
| Recoverable/(payable) within 12 months | 13 | 23 | — | (1) |
| Recoverable/(payable) after 12 months | 11 | 11 | (322) | (306) |
| Total | 24 | 34 | (322) | (307) |

The Group has the following amounts in respect of which no deferred tax asset has been recognised, as it is not considered probable

that there will be future profit streams or gains against which these could be utilised:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Tax losses - revenue | 1,401 | 1,443 |
| Tax losses - capital | 16 | 16 |
| Other temporary differences | 56 | 27 |
| Total | 1,473 | 1,486 |

Of the total of  €1,473 million (2022: €1,486 million), €1,248 million (2022: €1,269 million) relates to tax losses (with no expiry date)

and other timing differences not recognised in the UK and Luxembourg due to lack of future profit streams.

There were no significant changes during the year in the expected future profit streams or gains.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 181 |
|  |  |  |

#### 7 Taxation



#### continued

Included in unrecognised tax losses are losses that will expire as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Expiry date |  |  |
| Within one year | 7 | 5 |
| One to five years | 42 | 22 |
| After five years | 45 | 48 |
| No expiry date | 1,323 | 1,384 |
| Total unrecognised tax losses | 1,417 | 1,459 |

No deferred tax liability is recognised on gross temporary differences of €622 million (2022: €679 million) relating to the unremitted

earnings of overseas subsidiaries, as the Group is able to control the timing of the reversal of these temporary differences and it is

probable that they will not reverse in the foreseeable future. UK tax legislation largely exempts, from UK tax, overseas dividends received.

As a result, the gross temporary differences at 31 December 2023 represent only the unremitted earnings of those overseas subsidiaries

where remittance to the UK of those earnings would still result in a tax liability, principally as a result of dividend withholding taxes levied

by the overseas tax jurisdictions in which these subsidiaries operate and non-UK corporate taxes on dividends.

#### 8 Earnings per share

#### (EPS)

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | EPS attributable to shareholders | |
| euro cents | 2023 | 2022 |
| From continuing operations |  |  |
| Basic EPS | 103.5 | 244.5 |
| Diluted EPS | 103.5 | 244.4 |
| Basic underlying EPS | 107.8 | 195.6 |
| Diluted underlying EPS | 107.8 | 195.6 |
| From continuing and discontinued operations |  |  |
| Basic EPS | (31.5) | 299.3 |
| Diluted EPS | (31.5) | 299.2 |
| Basic headline EPS | 145.3 | 264.3 |
| Diluted headline EPS | 145.3 | 264.2 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 182 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

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 | |
| € million | 2023 | 2022 |
| (Loss)/profit for the year attributable to shareholders | (153) | 1,452 |
| Arises from: |  |  |
| Continuing operations | 502 | 1,186 |
| Discontinued operations (see note 28) | (655) | 266 |
| Special items attributable to shareholders (see note 3) | 27 | (242) |
| Related tax (see note 3) | (6) | 5 |
| Total earnings for the year (prior to special items) | (132) | 1,215 |
| Arises from: |  |  |
| Continuing operations | 523 | 949 |
| Discontinued operations (see note 28) | (655) | 266 |
| Gain on disposal of property, plant and equipment | (13) | (2) |
| Insurance reimbursements for property damages | (27) | — |
| Restructuring and closure costs (see note 3) | (23) | — |
| Impairments not included in special items (see note 10) | 3 | 11 |
| Loss on disposal of businesses from discontinued operations (see note 28) | 756 | — |
| Impairments included in loss/profit from discontinued operations (see note 28) | 113 | 57 |
| Related tax | 28 | 1 |
| Headline earnings for the year | 705 | 1,282 |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Weighted average number of shares | |
| million | 2023 | 2022 |
| Basic number of ordinary shares outstanding | 485.1 | 485.1 |
| Effect of dilutive potential ordinary shares | — | 0.1 |
| Diluted number of ordinary shares outstanding | 485.1 | 485.2 |

Underlying earnings, total earnings (prior to special items) and headline earnings represent APMs which are defined on pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579).

On 13 February 2024, the Group returned the net proceeds from the sale of the Group's Russian assets to its shareholders by way of

a special dividend (see note 9). In addition, in order to maintain the comparability, so far as possible, of Mondi plc’s share price before

and after the special dividend, the special dividend was accompanied by a share consolidation, which took effect on 29 January 2024,

resulting in shareholders receiving 10 new ordinary shares for every 11 existing ordinary shares (see note 22). The weighted average

number of ordinary shares outstanding for 2023 and 2022, respectively, is based on the number of existing ordinary shares throughout

the relevant years (i.e. before share consolidation).

#### 9 Dividends

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | 2023 | | 2022 | |
|  | euro cents  per share | € million | euro cents  per share | € million |
| Final ordinary dividend paid in respect of the prior year | 48.33 | 231 | 45.00 | 218 |
| Interim ordinary dividend paid in respect of the current year | 23.33 | 114 | 21.67 | 103 |
| Total ordinary dividends paid |  | 345 |  | 321 |
|  |  |  |  |  |
| Final ordinary dividend proposed to shareholders1 | 46.67 | 206 | 48.33 | 234 |

Note:

1 The 2023 final ordinary dividend proposed of 46.67 euro cents per share is based on the new ordinary shares issued after share consolidation, as described below.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 183 |
|  |  |  |

#### 9 Dividends

#### continued

The final ordinary dividend proposed in respect of the financial  year ended 31 December 2023 has been recommended by the Board

and is subject to the approval of the shareholders of  Mondi plc at the Annual General Meeting scheduled for  3 May 2024 .

On 13 February 2024, the Group returned the net proceeds from the sale of the Group's Russian assets to shareholders by way of a

special dividend of €1.60 per existing ordinary share. In addition, in order to maintain the comparability, so far as possible, of Mondi plc’s

share price before and after the special dividend, the special dividend was accompanied by a share consolidation, which took effect

on 29 January 2024, resulting in shareholders receiving 10 new ordinary shares for every 11 existing ordinary shares (see note 22).

#### 10 Property, plant and equipment

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| € million | Land and  buildings1 | Plant and  equipment | Assets under  construction | Other | Total |
| Net carrying value |  |  |  |  |  |
| At 1 January 2022 | 1,436 | 2,971 | 337 | 160 | 4,904 |
| Additions | 43 | 100 | 393 | 39 | 575 |
| Disposal of assets | (4) | (2) | (3) | (2) | (11) |
| Disposal of businesses | (44) | (108) | (9) | (13) | (174) |
| Reclassification to assets held for sale | (323) | (496) | (75) | (47) | (941) |
| Depreciation charge for the year | (68) | (296) | — | (41) | (405) |
| Impairment losses recognised | (4) | (7) | — | — | (11) |
| Reclassification | 45 | 207 | (266) | 11 | (3) |
| Hyperinflation monetary adjustment | 26 | 20 | 2 | 2 | 50 |
| Currency movements | 60 | 94 | 19 | 10 | 183 |
| At 31 December 2022 | 1,167 | 2,483 | 398 | 119 | 4,167 |
| Cost | 2,031 | 7,077 | 415 | 386 | 9,909 |
| Accumulated depreciation and impairments | (864) | (4,594) | (17) | (267) | (5,742) |
| Additions | 50 | 169 | 576 | 38 | 833 |
| Disposal of assets | (7) | (4) | — | (7) | (18) |
| Acquired through business combinations (see note 25) | 17 | 20 | — | — | 37 |
| Depreciation charge for the year | (65) | (292) | — | (34) | (391) |
| Impairment losses recognised | (1) | (6) | — | — | (7) |
| Reclassification | 51 | 168 | (234) | 13 | (2) |
| Hyperinflation monetary adjustment (see note 1) | 28 | 31 | 6 | 3 | 68 |
| Currency movements | (22) | (41) | (2) | (3) | (68) |
| At 31 December 2023 | 1,218 | 2,528 | 744 | 129 | 4,619 |
| Cost | 2,139 | 7,216 | 761 | 409 | 10,525 |
| Accumulated depreciation and impairments | (921) | (4,688) | (17) | (280) | (5,906) |
|  |  |  |  |  |  |

Note:

1 The land carrying value included in land and buildings is € 227 million  ( 2022:  € 211 million ).

Included in the additions above is  €11 million (2022: € 2 million ) of interest incurred on qualifying assets which has been capitalised during

the year. The amount is deductible for tax purposes either when incurred or included in the amount permitted to be deducted for capital

expenditure, depending on the jurisdiction in which they are capitalised.

The Group recognised income from insurance reimbursements relating to damages of property, plant and equipment of  € 27 million

(2022 : €7 million) in other net operating expenses in the consolidated income statement with reimbursements received in cash

of €17 million (2022: €8 million) classified as other investing activities within the consolidated statement of cash flows.

The recoverable amount of property, plant and equipment is determined based on the use of the asset within the current business plans.

Any change in future intentions could result in an impairment of varying magnitude, depending on the assets affected.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 184 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 11 Leases

The Group has entered into various lease agreements. Leases over land and buildings have a weighted average term of 35 years

( 2022: 35 years), plant and equipment a weighted average term of  12 years ( 2022 : 12 years) and other assets a weighted average term

of 5 years (2022: 5  years).

The principal lease agreements in place include the following:

#### South African land lease

The Group entered into a land lease agreement on 1 January 2001 for a total term of  70 years. The lease commitment and annual

escalation rate are renegotiated every five years. The lease does not contain any clauses with regard to contingent rent or an option

to purchase the land at the end of the lease term, and does not impose any significant restrictions on the  Group as a lessee.

#### Office building

The Group entered into an office building lease agreement in Vienna (Austria) for a total term of 20 years from October 2013. The lease

may only be terminated by the Group, after six months’ notice, in September 2023 (which did not occur) and again in September 2028.

Rent escalates on an annual basis by the consumer price index of the local jurisdiction. The lease does not contain any option to

purchase the building at the end of the lease term, and does not impose any significant restrictions on the  Group as a lessee. Variable

lease payments are included in the lease liability and calculated at the consumer price index. The Group does not intend to exercise

the termination option in September 2028, and thus it was not considered in the calculation of the right-of-use asset.

#### Right-of-use assets

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Right-of-use assets | | Depreciation charge | |
| € million | 2023 | 2022 | 2023 | 2022 |
| Land and buildings | 61 | 61 | (10) | (11) |
| Plant and equipment | 39 | 43 | (9) | (8) |
| Other | 16 | 15 | (7) | (6) |
| Total | 116 | 119 | (26) | (25) |

Additions to the right-of-use assets during 2023 were €34 million (2022: €36 million).

#### Lease liabilities

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Maturity analysis - contractual undiscounted cash flows |  |  |
| Less than one year | 28 | 25 |
| One to two years | 24 | 22 |
| Two to five years | 49 | 47 |
| More than five years | 89 | 99 |
| Total undiscounted cash flows | 190 | 193 |
| Total lease liabilities | 125 | 128 |
| Current | 21 | 19 |
| Non-current | 104 | 109 |
|  |  |  |

Lease liabilities are effectively secured as the rights to the leased assets recognised in the consolidated financial statements revert to the

lessor in the event of default. The continuing operations' total cash outflow for leases during 2023 was €31 million  (2022: €32 million).

Amounts recognised in the

#### consolidated



#### income statement

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Depreciation charge in respect of leases | (26) | (25) |
| Interest on lease liabilities | (7) | (7) |
| Expenses relating to short-term leases | (1) | (3) |
| Expenses relating to leases of low-value assets | (1) | (1) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 185 |
|  |  |  |

#### 12 Goodwill

#### (a) Reconciliation

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Net carrying value |  |  |
| At 1 January | 769 | 936 |
| Disposal of businesses (see note 26) | — | (141) |
| Reclassification to assets held for sale (see note 28) | — | (34) |
| Hyperinflation monetary adjustment (see note 1) | 11 | 11 |
| Currency movements | (15) | (3) |
| At 31 December | 765 | 769 |

#### (b) Assumptions

Goodwill acquired through business combinations is allocated to the group of cash-generating units (CGUs) that are expected to benefit

from the synergies of the combination and represents the lowest level at which goodwill is monitored for internal management purposes.

Goodwill is assessed for impairment at least annually. In performing this impairment test, the recoverable amounts of these groups of

CGUs are the higher of fair value less costs to dispose and value in use (see note 35 for further details).

Goodwill is allocated to three groups of CGUs, as follows:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | Weighted average  pre-tax discount rate | | Growth rate  beyond year 3 | | Carrying value | |
| € million, unless otherwise stated | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Corrugated Packaging | 10.2% | 9.9% | 3% | 3% | 328 | 329 |
| Flexible Packaging | 9.2% | 9.2% | 2% | 2% | 422 | 425 |
| Uncoated Fine Paper | 11.1% | 10.2% | —% | —% | 15 | 15 |
| Total goodwill |  |  |  |  | 765 | 769 |

Key assumptions for 2023

The key assumptions in the value-in-use calculations are as follows:

– Cash flow forecasts are derived from the budget most recently approved by the Board covering the three-year period

to 31 December 2026.

– Sales volumes, sales prices and input cost assumptions in the budget period are derived from a combination of economic forecasts

for the regions in which the Group operates, industry forecasts for individual product lines, internal management projections, historical

performance and announced and expected industry capacity changes.

– The impact of climate change such as regulatory risks on carbon pricing, yield losses on plantations or the effects of droughts as well

as climate-change related opportunities in the budget period are considered in the cash flow forecasts. The Group’s climate change

risks and opportunities identified according to the TCFD recommendations are disclosed on pages [55](#i47a6727b8bad4fe28addb4dae187e293_3224)-[64](#i8eb60d69ace440a9b8dac4ed7f61c7cf_2387) of this report.

– Cash flow projections in year four are based on internal management projections taking into consideration industry forecasts and

growth rates in the regions in which the Group operates. Growth rates are applied to the groups of CGUs for all years from year four

onwards (as per the table above).

– Capital expenditure forecasts are based on historical experience and include expenditure necessary to maintain the assets in their

current condition.

The pre-tax discount rate is derived from the Group’s weighted average cost of capital. In determining the discount rate applicable

to each group of CGUs, adjustments are made to reflect the impacts of country risk.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 186 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Sensitivity analyses

Expected future cash flows are inherently uncertain and could change materially over time. They are affected by a number of factors,

including market and production estimates, together with economic factors such as prices, discount rates, currency exchange rates,

estimates of production costs and future capital expenditure. Risks associated with increased operating costs such as carbon pricing

mechanisms have also been considered.

Sensitivity analyses of reasonably possible changes in the underlying assumptions for each group of CGUs included:

– 100 bps increase in discount rate;

– 0% growth rate assumed for cash flow projections beyond three years in the Corrugated Packaging and Flexible Packaging groups

of CGUs;

– 2% decrease in sales prices of paper in all years in the Corrugated Packaging group of CGUs;

– 1% decrease in sales prices of paper in 2024 in the Flexible Packaging group of CGUs; and

– 3% decrease in sales prices of paper in all years in the Uncoated Fine Paper group of CGUs.

None of these downside sensitivity analyses, in isolation, indicated the need for an impairment.

#### 13 Intangible assets

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Net carrying value |  |  |
| At 1 January | 64 | 78 |
| Additions | 16 | 12 |
| Acquired through business combinations (see note 25) | 1 | — |
| Disposal of businesses (see note 26) | — | (2) |
| Reclassification to assets held for sale (see note 28) | — | (7) |
| Impairment charge for the year | — | (2) |
| Amortisation charge for the year | (17) | (18) |
| Reclassification | 2 | 3 |
| Hyperinflation monetary adjustment (see note 1) | 4 | 3 |
| Currency movements | (2) | (3) |
| At 31 December | 68 | 64 |
| Cost | 251 | 235 |
| Accumulated amortisation and impairments | (183) | (171) |
|  |  |  |

The intangible assets comprise mainly software development costs.

R&D expenditure incurred by the  Group and charged to the  consolidated   income statement during the year amounted to €21 million

(2022 : €22 million).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 187 |
|  |  |  |

#### 14 Forestry assets

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| At 1 January | 485 | 348 |
| Investment in forestry assets | 48 | 49 |
| Fair value gains | 128 | 169 |
| Felling costs | (87) | (78) |
| Currency movements | (55) | (3) |
| At 31 December | 519 | 485 |
| Mature | 359 | 309 |
| Immature | 160 | 176 |
|  |  |  |

The  Group has 254,858  hectares ( 2022:  252,857 hectares) of owned and leased land available for forestry activities, all of which is in

South Africa. 80,614  hectares (2022 :  80,227  hectares) are set aside for conservation activities and infrastructure needs.  1,044 hectares

( 2022: 1,045 hectares) relate to non-core activities. The balance of 173,200 hectares (2022: 171,585  hectares) are under afforestation,

which forms the basis of the valuation set out above.

Mature forestry assets are those plantations that are harvestable, while immature forestry assets have not yet reached that stage of

growth. Timber is harvested according to a rotation plan, once trees reach maturity. The maturity period ranges from 6.5 to 14.5 years

(2022: 6.5 to 14.5 years) depending on species, climate and location.

The fair value of forestry assets is a level 3 measure in terms of the fair value measurement hierarchy, consistent with prior years.

The following assumptions have a significant impact on the valuation of the  Group’s forestry assets:

– The net selling price is defined as the selling price less the costs of transport, harvesting, extraction and loading, and all selling prices

and costs are denominated in South African rand. The net selling price is based on third-party transactions and is influenced by the

species, maturity profile and location of timber. In 2023, the net selling price used ranged from the South African rand equivalent

of €15 per tonne to €53 per tonne (2022: €14 per tonne to €47 per tonne), with a weighted average of €34 per tonne

(2022: €33 per tonne).

– The conversion factor, which is used to convert hectares of land under afforestation to tonnes of standing timber, is dependent on the

species, the maturity profile of the timber, the geographic location and a variety of other environmental factors, such as the anticipated

impact of climate change on water scarcity and fire risks. In 2023, the conversion factors ranged from 7.6 to 25.0 (2022: 7.9 to 23.9).

– The risk premium on immature timber of 12.4% (2022: 12.5%) is based on an assessment of the risks associated with forestry assets

in  South Africa and is applied for the years the immature timber has left to reach maturity. A risk premium on mature timber of  4.0%

(2022: 4.0%) was applied. The risk premium applied to immature and mature timber includes factors for the anticipated impact of

climate change on water scarcity and fire risks. An increase in the severity and frequency of extreme weather events, such as higher

temperatures, changes in rainfall patterns and drought conditions, may result in higher timber losses in future years caused by stronger

winds, erosion, fires, pests and diseases.

The valuation of the Group’s forestry assets is determined in South African rand and converted to euro at the closing exchange rate

on 31 December of each year.

Management has performed sensitivity analyses of reasonably possible changes in the significant assumptions and the EUR/ZAR

exchange rate. The sensitivity table is based on historical experience; however, the estimates may vary by greater amounts. Therefore,

the Board considers the forestry assets valuation to be a significant accounting estimate. The reported value of owned forestry assets

would change as follows should there be a change in these underlying assumptions on the basis that all other factors remain unchanged:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Effect of €5/tonne increase in net selling price | 79 | 75 |
| Effect of 1% increase in conversion factor (hectares to tonnes) | 6 | 5 |
| Effect of 1% increase in risk premium | (8) | (7) |
| Effect of 10% increase in EUR/ZAR exchange rate | (47) | (44) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 188 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 15 Investments in joint ventures

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| At 1 January | 18 | 17 |
| Net (loss)/profit from joint ventures | (5) | 1 |
| Impairment losses recognised | (5) | — |
| At 31 December | 8 | 18 |

The joint ventures of the Group as at 31 December 2023 are set out in note 11 of the Mondi plc parent company financial statements.

All of these interests are accounted for using the equity method. None of the joint ventures are assessed as being individually material

to the Group.

#### 16 Inventories

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Valued using the first-in, first-out cost formula |  |  |
| Raw materials and consumables | 16 | 18 |
| Work in progress | 5 | 7 |
| Finished products | 28 | 35 |
| Total valued using the first-in, first-out cost formula | 49 | 60 |
| Valued using the weighted average cost formula |  |  |
| Raw materials and consumables | 509 | 639 |
| Work in progress | 86 | 153 |
| Finished products | 405 | 507 |
| Total valued using the weighted average cost formula | 1,000 | 1,299 |
| Total inventories | 1,049 | 1,359 |
|  |  |  |
| Of which, held at net realisable value | 141 | 174 |

#### Consolidated income statement

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Within materials, energy and consumables used |  |  |
| Cost of inventories recognised as an expense | (3,575) | (3,928) |
| Write-down of inventories to net realisable value | (77) | (65) |
| Aggregate reversal of previous write-downs of inventories | 45 | 40 |
| Within other net operating expenses |  |  |
| Green energy sales and disposal of emissions credits | 92 | 50 |

The reversal of previous write-downs of inventories relates to goods that had been written down to their estimated net realisable value

and were subsequently sold above their carrying value.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 189 |
|  |  |  |

#### 17 Trade and other receivables

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Trade receivables | 995 | 1,250 |
| Credit loss allowance | (25) | (26) |
| Net trade receivables | 970 | 1,224 |
| Other receivables | 45 | 20 |
| Tax and social security | 148 | 158 |
| Prepayments | 91 | 46 |
| Total trade and other receivables | 1,254 | 1,448 |

#### Trade receivables: credit risk

The Group  has a large number of unrelated customers and does not have significant credit risk exposure to any particular customer.

The Group considers that there is no significant geographical or customer concentration of credit risk.

Each business segment manages its own exposure to credit risk according to the economic circumstances and characteristics of the

relevant markets that it serves. The Group  considers that management of credit risk on a decentralised basis enables it to assess and

manage credit risk more effectively. However, broad principles of credit risk management are observed across all business segments,

such as the use of credit rating agencies, credit guarantee insurance, where appropriate, and the maintenance of a credit control function.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Credit risk exposure |  |  |
| Gross trade receivables | 995 | 1,250 |
| Credit insurance | (837) | (995) |
| Net exposure to credit risk | 158 | 255 |

In addition, the  Group is in possession of bank guarantees and letters of credit securing trade and other receivables to the value

of €6 million (2022: €17 million).

Credit periods offered to customers vary according to the credit risk profiles of participants and invoicing conventions established in the

various markets in which the Group operates. Interest is charged at appropriate market rates on balances which are considered overdue

in the relevant market.

To the extent that recoverable amounts are expected to be less than their associated carrying values, impairment charges have been

recorded in the consolidated income statement and the carrying values have been written down to their expected recoverable amounts.

The total gross carrying value of trade receivables that were subject to credit loss allowance during the year was €36 million

(2022: € 42 million).

Included within the Group’s aggregate trade receivables balance are specific debtor balances with customers totalling €140 million

(2022: €173 million) which are past due and where the Group considers that their credit quality remains intact.

The expected credit loss allowance for trade receivables was determined as follows:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| 2023/€ million, unless otherwise stated | Within terms | Past due by | | | | Total |
| <1 month | 1-2 months | 2-3 months | >3 months |
| Expected loss rate % | 1 | 3 | 4 | 14 | 68 |  |
| Trade receivables | 837 | 108 | 24 | 7 | 19 | 995 |
| Credit loss allowance | (7) | (3) | (1) | (1) | (13) | (25) |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| 2022/€ million, unless otherwise stated | Within terms | Past due by | | | | Total |
| <1 month | 1-2 months | 2-3 months | >3 months |
| Expected loss rate % | 1 | 2 | 6 | 14 | 67 |  |
| Trade receivables | 1,059 | 135 | 31 | 7 | 18 | 1,250 |
| Credit loss allowance | (8) | (3) | (2) | (1) | (12) | (26) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 190 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Movement in the credit loss allowance

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| At 1 January | 26 | 29 |
| Increase in allowance recognised in consolidated income statement | 7 | 10 |
| Amounts written off or recovered | (6) | (8) |
| Reclassification to assets held for sale (see note 28) | — | (2) |
| Currency movements | (2) | (3) |
| At 31 December | 25 | 26 |

#### 18 Trade and other payables

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Trade payables | 633 | 879 |
| Capital expenditure payables | 60 | 48 |
| Tax and social security | 59 | 68 |
| Other payables | 66 | 59 |
| Accruals | 387 | 454 |
| Deferred income | 14 | 17 |
| Total trade and other payables | 1,219 | 1,525 |

#### 19 Provisions

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| € million | Restructuring  costs | Employee-  related provisions | Environmental  restoration | Other | Total |
| At 1 January 2023 | 3 | 29 | 4 | 13 | 49 |
| Charged to consolidated income statement | 16 | 6 | — | 9 | 31 |
| Released to consolidated income statement | — | (1) | — | (3) | (4) |
| Amounts used | (12) | (7) | — | (21) | (40) |
| Acquired through business combinations (see note 25) | — | — | — | 13 | 13 |
| Currency movements | — | (1) | — | — | (1) |
| At 31 December 2023 | 7 | 26 | 4 | 11 | 48 |
| Current | 7 | 6 | — | 8 | 21 |
| Non-current | — | 20 | 4 | 3 | 27 |
|  |  |  |  |  |  |

The provisions for restructuring costs are expected to be settled over the next year. Restructuring provisions include severance costs,

when management has made a formal decision to eliminate certain positions and this has been communicated to the groups of

employees affected, and other related costs that are typically expected to be incurred in the course of a restructuring programme.

Employee-related provisions comprise provisions for jubilee awards and other short-term benefits. Given the nature of jubilee provisions,

the amounts are likely to be settled over many years.

The Group provides for the costs of environmental remediation that have been identified at the time of plant closure, as part

of acquisition due diligence or in other circumstances where remediation by the Group is required and a probable outflow of

economic resources is identified. Judgement and experience are used by management in determining the expected timing, closure

and decommissioning methods, which can vary over time and between locations in response to the relevant legal requirements in each

territory or the impact of applying new technologies. As of 31 December 2023, such provisions totalled €4 million (2022: €4 million).

The Group does not provide for any potential future environmental remediation or asset retirement obligations in respect of plants

that the Group continues to own and operate into the foreseeable future based on the existing strategy of the Group, unless a legal

or constructive obligation exists at the reporting date.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 191 |
|  |  |  |

#### 19 Provisions



#### continued

Provisions may be identified at a future date if a change in strategy results in planned plant closure or disposal and the Group identifies

the need for future environmental remediation subject to the existence of a legal or constructive obligation.

Other provisions are mainly attributable to potential claims against the Group and onerous contracts, none of which are individually

material to the Group. The Group expects to settle the majority of the provisions over the next year.

All non-current provisions are discounted using a discount rate relevant in the local countries, based on a pre-tax yield on

long‑term bonds.

#### 20 Capital management

The Group defines its capital employed as equity, as presented in the consolidated  statement of financial position , plus net debt.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Equity attributable to shareholders | 5,655 | 5,794 |
| Equity attributable to non-controlling interests | 441 | 460 |
| Total equity | 6,096 | 6,254 |
| Net debt (see note 27c) | 419 | 1,011 |
| Capital employed (see page 240) | 6,515 | 7,265 |

Capital employed is managed on a basis that enables the  Group to continue trading as a going concern, while delivering acceptable

returns to shareholders. The Group is committed to managing its cost of capital by maintaining an appropriate capital structure, with

a balance between equity and net debt.

The Group utilises its capital employed to fund its business.

The primary sources of the Group’s  liquidity include its Guaranteed Euro Medium Term Note Programme, which the Group increased

from €2.5 billion to €3.0 billion in June 2023, its € 750 million Syndicated Revolving Credit Facility and financing from various banks

and other credit agencies, thus providing the Group with access to diverse sources of debt financing.

The principal loan arrangements in place are the following:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| € million | Maturity | Interest rate % | 2023 | 2022 |
| Financing facilities |  |  |  |  |
| Syndicated Revolving Credit Facility | June 20281 | EURIBOR + margin | 750 | 750 |
| €500 million Eurobond | April 2024 | 1.500% | 500 | 500 |
| €600 million Eurobond | April 2026 | 1.625% | 600 | 600 |
| €750 million Eurobond | April 2028 | 2.375% | 750 | 750 |
| Long Term Facility Agreement | December 2026 | EURIBOR + margin | 20 | 27 |
| Other | Various | Various | 4 | 8 |
| Total committed facilities |  |  | 2,624 | 2,635 |
| Drawn |  |  | (1,870) | (1,878) |
| Total committed facilities available |  |  | 754 | 757 |

Note:

1 In April 2023 the Group opted for a one-year extension on the facility, which moved the maturity from June 2027 to June 2028.

The Group’s Eurobonds incur a fixed rate of interest. Swap agreements are utilised by the Group to raise non-euro-denominated

currency to fund subsidiaries' liquidity needs, thereby exposing the Group to floating interest rates.

The € 750 million 5-year revolving multi-currency credit facility agreement (RCF) incorporates key sustainability targets linked to

MAP2030, classifying the facility as a Sustainability Linked Loan. Under the terms of the agreement, the margin will be adjusted according

to the Group’s performance against specified sustainability targets.

Short-term liquidity needs are met by cash and the RCF. As at 31 December 2023, the Group had no financial covenants in any of its

financing facilities.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 192 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

The Group reviews its capital employed on a regular basis and makes use of several indicative ratios which are appropriate to the nature

of its operations and consistent with conventional industry measures. The principal ratios used include:

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | 2023 | 2022 |
| Pre-tax weighted average cost of capital (%) | 10.5 | 10.0 |
| Gearing (%) (see page 241) | 6.4 | 16.3 |
| Net debt to underlying EBITDA (times) (see page 240) | 0.3 | 0.5 |
| Return on capital employed (%) (see page 240) | 12.8 | 23.7 |

In order to manage its cost of capital, maintain an appropriate capital structure and meet its ongoing cash flow needs, the Group  may

issue new debt instruments; adjust the level of dividends paid to shareholders; issue new shares to, or repurchase shares from, investors;

or dispose of assets to reduce its net debt exposure.

#### 21 Borrowings

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| € million | Current | Non-current | Total | Current | Non-current | Total |
| Secured |  |  |  |  |  |  |
| Bank loans and overdrafts | — | — | — | 1 | — | 1 |
| Lease liabilities (see note 11) | 21 | 104 | 125 | 19 | 109 | 128 |
| Total secured | 21 | 104 | 125 | 20 | 109 | 129 |
| Unsecured |  |  |  |  |  |  |
| Bonds | 500 | 1,345 | 1,845 | — | 1,843 | 1,843 |
| Bank loans and overdrafts | 38 | 11 | 49 | 82 | 18 | 100 |
| Total unsecured | 538 | 1,356 | 1,894 | 82 | 1,861 | 1,943 |
| Total borrowings | 559 | 1,460 | 2,019 | 102 | 1,970 | 2,072 |
| Committed facilities drawn |  |  | 1,870 |  |  | 1,878 |
| Uncommitted facilities drawn |  |  | 149 |  |  | 194 |
|  |  |  |  |  |  |  |

The  Group’s borrowings as at 31 December are analysed by nature and underlying currency as follows:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2023/€ million | Floating rate  borrowings | Fixed rate  borrowings | Total carrying  value | Fair value |
| Euro | 20 | 1,911 | 1,931 | 1,895 |
| South African rand | — | 23 | 23 | 23 |
| Turkish lira | 5 | 28 | 33 | 33 |
| US dollar | — | 12 | 12 | 12 |
| Other currencies | — | 20 | 20 | 20 |
| Carrying value | 25 | 1,994 | 2,019 |  |
| Fair value | 25 | 1,958 |  | 1,983 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2022/€ million | Floating rate  borrowings | Fixed rate  borrowings | Total carrying  value | Fair value |
| Euro | 30 | 1,906 | 1,936 | 1,820 |
| South African rand | — | 23 | 23 | 23 |
| Turkish lira | 33 | 41 | 74 | 74 |
| US dollar | — | 14 | 14 | 14 |
| Other currencies | 2 | 23 | 25 | 25 |
| Carrying value | 65 | 2,007 | 2,072 |  |
| Fair value | 65 | 1,891 |  | 1,956 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 193 |
|  |  |  |

#### 21 Borrowings



#### continued

The fair values of the Eurobonds 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.

The maturity analysis of the Group’s  borrowings, presented net of interest, is as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| 2023/€ million | <1 year | 1–2 years | 2–5 years | >5 years | Total1 |
| Bonds | 500 | — | 1,345 | — | 1,845 |
| Bank loans and overdrafts | 38 | 6 | 5 | — | 49 |
| Lease liabilities (see note 11) | 21 | 18 | 36 | 50 | 125 |
| Total borrowings | 559 | 24 | 1,386 | 50 | 2,019 |
| Effective interest on borrowings net of amortised costs  and discounts | 45 | 33 | 62 | 40 | 180 |
| Total undiscounted cash flows | 604 | 57 | 1,448 | 90 | 2,199 |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| 2022/€ million | <1 year | 1–2 years | 2–5 years | >5 years | Total1 |
| Bonds | — | 499 | 598 | 746 | 1,843 |
| Bank loans and overdrafts | 83 | 7 | 11 | — | 101 |
| Lease liabilities | 19 | 17 | 35 | 57 | 128 |
| Total borrowings | 102 | 523 | 644 | 803 | 2,072 |
| Effective interest on borrowings net of amortised costs  and discounts | 51 | 37 | 80 | 51 | 219 |
| Total undiscounted cash flows | 153 | 560 | 724 | 854 | 2,291 |

Note:

1 It has been assumed that, where applicable, interest and foreign exchange rates prevailing at the reporting date will not vary over the time periods remaining for future cash outflows.

In addition to the above, the Group swaps euro debt into other currencies through the foreign exchange market, as disclosed in note 31,

which has the effect of exposing the Group to the floating interest rate of those currencies.

#### 22 Share capital and other reserves

Mondi plc is not restricted in the number of shares that can be issued. Any issue of shares is subject to shareholder approval.  Mondi plc

ordinary shares issued on the London Stock Exchange and Johannesburg Stock Exchange have a nominal value of  €0.20. All ordinary

shares are called up, allotted and fully paid.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| 2023 & 2022 | Number of  shares | Share capital  in € million |
| Mondi plc €0.20 ordinary shares issued | 485,553,780 | 97 |

On 13 February 2024, the Group returned the net proceeds from the sale of the Group's Russian assets to shareholders by way of a special

dividend of €1.60 per existing ordinary share. In addition, in order to maintain the comparability, so far as possible, of Mondi plc’s share price

before and after the special dividend, the special dividend was accompanied by a share consolidation, which took effect on 29 January 2024,

resulting in shareholders receiving 10 new ordinary shares with a nominal value of €0.22 each for every 11 existing ordinary shares with a nominal

value of €0.20 each. To effect the share consolidation, the Group issued 3 additional ordinary shares prior to the record date for the share

consolidation, increasing the number of ordinary shares from 485,553,780 ordinary shares to 485,553,783 ordinary shares, so that the number

of the existing ordinary shares in issue at the time of the consolidation was exactly divisible by 11, such that there was no remaining fraction of

a share. Following the share consolidation, the total number of ordinary shares issued decreased by 44,141,253 ordinary shares from 485,553,783

ordinary shares to 441,412,530 ordinary shares, while the total nominal value of the share capital of the Group remained unchanged at €97 million.

#### Own shares

Own shares represent the cost of shares in  Mondi plc  purchased in the market to satisfy share awards under the Group’s employee share

schemes (see note  23). These costs are reflected in the consolidated  statement of changes in equity.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Own shares held | | | |
|  | 2023 | | 2022 | |
| at 31 December | Number of  shares held | Average price  per share | Number of  shares held | Average price  per share |
| Mondi Incentive Schemes Trust | 128,478 | ZAR201.84 | 147,357 | ZAR206.88 |
| Mondi Employee Share Trust | 492,184 | GBP14.10 | 401,802 | GBP14.69 |

Dividend waivers are in place in respect of the shares held by the Mondi Incentive Schemes Trust and the Mondi Employee Share Trust.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 194 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Other reserves

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |
| € million | Cumulative  translation  adjustment  reserve | Post-  retirement  benefits  reserve | Share-based  payment  reserve | Cash flow  hedge  reserve | Merger  reserve | Other  sundry  reserves | Total |
| At 1 January 2022 | (953) | (40) | 16 | (1) | 667 | 27 | (284) |
| Other comprehensive income for the year | 98 | 5 | — | 2 | — | — | 105 |
| Mondi share schemes’ charge | — | — | 11 | — | — | — | 11 |
| Issue of shares under employee share schemes | — | — | (10) | — | — | — | (10) |
| Disposal of businesses | (4) | — | — | — | — | — | (4) |
| At 31 December 2022 | (859) | (35) | 17 | 1 | 667 | 27 | (182) |
| Other comprehensive income/(expense) for the  year | 339 | (16) | — | — | — | — | 323 |
| Hyperinflation monetary adjustment (see note 1) | — | (2) | — | — | — | — | (2) |
| Mondi share schemes’ charge (see note 23) | — | — | 9 | — | — | — | 9 |
| Issue of shares under employee share schemes | — | — | (7) | — | — | — | (7) |
| At 31 December 2023 | (520) | (53) | 19 | 1 | 667 | 27 | 141 |

A description of the nature and purpose of each reserve is provided below. The accounting policies applied to each reserve are further

described in note 35.

Cumulative translation adjustment reserve

Exchange differences arising on the translation of the Group’s non-euro operations into the presentation currency of the  Group are

recognised in other comprehensive income and accumulated in the cumulative translation adjustment reserve. The cumulative amount

is reclassified to profit or loss only on disposal or partial disposal of the non-euro operation.

Post-retirement benefits reserve

Actuarial gains and losses and the return on plan assets arising from the Group’s defined benefit pension and post-retirement medical

plans are recognised in other comprehensive income and accumulated in the post-retirement benefits reserve. Remeasurements recorded

in other comprehensive income are not recycled to the consolidated income statement, but those amounts recognised in other

comprehensive income may be transferred to retained earnings within equity.

Share-based payment reserve

The share-based payment reserve is used to recognise the grant date fair value of options issued to employees but not exercised

and the grant date fair value of shares awarded to employees but not yet vested.

Cash flow hedge reserve

The cash flow hedge reserve is used to recognise the effective portion of changes in the fair value of derivative financial instruments

that are designated as hedges of future cash flows.

Merger reserve

The merger reserve was recognised in respect of the demerger from Anglo American plc in 2007 and the simplification of the dual-listed

company structure in 2019.

Other sundry reserves

The other sundry reserves comprise various other reserves, which individually are not material and typically are not subject

to material changes.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 195 |
|  |  |  |

#### 23 Share-based payments

#### Mondi

#### share awards

The  Group has established its own share-based payment arrangements to incentivise employees. Further details of the  Group’s  share

schemes are set out in the Remuneration report on page [133](#i63c331e8b4ce4bbc9a86a9a7102f9110_19-0-1-7-490653).

The fair values of the share awards granted under the  Mondi  schemes are calculated with reference to the facts and assumptions

presented below:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  | BSP 2023 | BSP 2022 | BSP 2021 |
| Date of grant | 6 March 2023 | 10 March 2022 | 12 March 2021 |
| Vesting period (years) | 3 | 3 | 3 |
| Expected leavers p.a. (%) | 5 | 5 | 5 |
| Grant date fair value per instrument (GBP) | 13.98 | 14.03 | 18.46 |
| Grant date fair value per instrument (ZAR) | 306.00 | 281.55 | 383.47 |
| Number of shares conditionally awarded | 596,448 | 541,730 | 234,516 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  | LTIP 2023 | LTIP 2022 | LTIP 2021 |
| Date of grant | 6 March 2023 | 10 March 2022 | 12 March 2021 |
| Vesting period (years) | 3 | 3 | 3 |
| Expected leavers p.a. (%) | 5 | 5 | 5 |
| Grant date fair value per instrument (GBP) |  |  |  |
| ROCE component | 13.98 | 14.03 | 18.46 |
| TSR component1 | 3.50 | 3.51 | 4.62 |
| EPS component | 13.98 | — | — |
| Grant date fair value per instrument (ZAR) |  |  |  |
| ROCE component | 306.00 | 281.55 | 383.47 |
| TSR component1 | 76.50 | 70.39 | 95.87 |
| EPS component | 306.00 | — | — |
| Number of shares conditionally awarded | 613,826 | 614,253 | 506,519 |

Note:

1 The base fair value has been adjusted for contractually determined market-based performance conditions.

For the 2023 LTIP grant, performance was assessed against ROCE, relative TSR and an additional EPS metric. The inclusion of this

growth metric, together with ROCE and relative TSR, provides a more rounded assessment of performance.

All of these scheme awards will be settled at the end of the vesting cycle in either the award of ordinary shares in Mondi plc  or the award

of nil-cost options to ordinary shares in  Mondi plc. The  Group has no obligation to settle the awards made under these schemes in cash.

An amount equal to the dividends that would have been paid on Bonus Share Plan (BSP) and Long-Term Incentive Plan (LTIP) share

awards during the holding period is paid to participants upon vesting.

The total fair value charge in respect of all the Mondi share awards for the year ended 31 December is made up as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Bonus Share Plan | 6 | 5 |
| Long-Term Incentive Plan | 3 | 6 |
| Total share-based payment expense | 9 | 11 |

The weighted average share price of share awards that vested during the period is as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | 2023 | 2022 |
| Mondi plc – Johannesburg Stock Exchange | ZAR308.52 | ZAR280.33 |
| Mondi plc – London Stock Exchange | GBP14.00 | GBP14.36 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 196 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

A reconciliation of share award movements for the Mondi  share schemes is shown below:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| number of shares | BSP | LTIP |
| At 1 January 2022 | 621,534 | 1,327,607 |
| Shares conditionally awarded | 541,730 | 614,253 |
| Shares vested | (257,041) | (186,227) |
| Shares lapsed | (27,140) | (257,295) |
| At 31 December 2022 | 879,083 | 1,498,338 |
| Shares conditionally awarded | 596,448 | 613,826 |
| Shares vested | (159,633) | (226,044) |
| Shares lapsed | (85,841) | (389,797) |
| At 31 December 2023 | 1,230,057 | 1,496,323 |

#### 24 Retirement benefits

The Group operates post-retirement defined contribution, post-retirement defined benefit pension plans and post-retirement

medical plans.

#### Defined contribution plans

The assets of the defined contribution plans are held separately in independently administered funds. The charge in respect of

these plans of €14 million  ( 2022: €14 million ) is calculated on the basis of the contribution payable by the Group  in the financial year.

There were no material outstanding or prepaid contributions recognised in relation to these plans as at the reporting dates presented.

The expected contributions to be paid to defined contribution plans during  2024 are € 15 million .

#### Defined benefit pension plans and post-retirement medical plans

The Group operates in excess of 100 defined benefit retirement plans across its global operations. A large proportion of the Group’s

defined benefit plans are closed to new members.

The majority of these plans are unfunded and provide pensions and severance benefits to members of those plans.

The most significant unfunded defined benefit plans are operated in Austria and Germany, and funded plans are operated primarily

in the UK. These plans are established in accordance with applicable local labour legislation and/or collective agreements with

participating employees.

The benefits are based on a variety of factors, the most significant of which are a combination of pensionable service and final salary.

A number of these plans also provide additional benefits in the event of death in service, disability or ill-health retirement, which are

derived from the final salary benefit formula.

The assets of the funded plans are held separately in independently administered funds, in accordance with statutory requirements or

local practice where those funds are operated. The boards of trustees of these plans are required to act in the best interests of the plans

and all relevant stakeholders of the plans (active employees, inactive employees, retirees and employers), and are responsible for the

Investment policy with regard to the assets of the plans.

The post-retirement medical plans provide health benefits to retired employees and certain of their dependants. Eligibility for cover

is dependent upon certain criteria. The South African plan is unfunded and has been closed to new participants since 1 January 1999.

Except for the actuarial risks set out below, the Group has not identified any additional specific risks in respect of these plans.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 197 |
|  |  |  |

#### 24 Retirement benefits



#### continued

Defined benefit plans typically expose the Group to the following actuarial risks:

|  |  |
| --- | --- |
|  |  |
| Investment risk (asset volatility) | The present value of the net retirement benefit liability/asset is calculated using a discount rate  determined by reference to high-quality bond yields. If the return on plan assets is below this  rate, it will create a plan deficit that needs to be funded/guaranteed by the employer. |
| Interest risk | A decrease in the bond interest rate will increase plan liabilities; however, this will be partially  offset by an increase in the value of the plan’s fixed rate debt instruments. |
| Longevity risk | The present value of the net retirement benefit liability/asset is calculated by reference to the  best estimate of the mortality of plan participants both during and after their employment.  An increase in the life expectancy of the plan participants will increase the plan liabilities. |
| Salary risk | The present value of the net retirement benefit liability/asset is calculated by reference to the  expected future salaries of plan participants. An increase in the salary of the plan participants will  increase the plan liabilities. |
| Medical cost inflation risk | The present value of the post-retirement medical plans is calculated by reference to expected  future medical costs. An increase in medical cost inflation will increase the plan liabilities. |

Independent qualified actuaries carry out full valuations every year using the projected unit credit method.

#### Actuarial assumptions

The weighted average principal assumptions used in the actuarial valuations are detailed below:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| % | South  Africa | Europe | Other  regions | South  Africa | Europe | Other  regions |
| Discount rate | 10.8 | 3.6 | 18.1 | 11.3 | 4.1 | 10.1 |
| Rate of inflation | 6.1 | 2.5 | 14.8 | 6.6 | 2.5 | 8.3 |
| Rate of increase in salaries | 7.1 | 2.7 | 15.9 | 7.6 | 2.6 | 8.8 |
| Rate of increase of pensions in payment | — | 2.7 | — | — | 2.6 | — |
| Expected average increase of medical costs | 8.7 | — | — | 8.7 | — | — |

The assumption for the discount rate for plan liabilities is based on AA corporate bonds which are of a suitable duration and currency.

In South Africa, the discount rate assumption has been based on the zero coupon government bond yield curve.

#### Mortality assumptions

The assumed remaining life expectancies on retirement at age 65 are:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| years | South  Africa | Europe | Other  regions | South  Africa | Europe | Other  regions |
| Retiring today |  |  |  |  |  |  |
| Males | 16.3 | 13.6-23.3 | 15.3-20.7 | 16.3 | 13.6-23.2 | 15.0-20.7 |
| Females | 20.4 | 17.5-25.8 | 17.7-25.3 | 20.4 | 17.5-25.5 | 17.0-25.3 |
| Retiring in 20 years |  |  |  |  |  |  |
| Males | 18.7 | 13.6-26.6 | 15.3-20.0 | 18.7 | 13.6-25.4 | 15.3-20.0 |
| Females | 23.0 | 17.5-28.8 | 17.7-25.3 | 23.0 | 17.5-26.1 | 17.7-25.3 |

The mortality assumptions have been based on published mortality tables in the relevant jurisdictions.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 198 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

The amounts recognised in the consolidated  statement of financial position are determined as follows:

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  | 2023 | | | | 2022 | | | |
| € million | South  Africa | Europe | Other  regions | Total | South  Africa | Europe | Other  regions | Total |
| Present value of unfunded liabilities | (29) | (97) | (14) | (140) | (33) | (91) | (16) | (140) |
| Present value of funded liabilities | — | (84) | — | (84) | — | (80) | — | (80) |
| Present value of plan liabilities | (29) | (181) | (14) | (224) | (33) | (171) | (16) | (220) |
| Fair value of plan assets | — | 70 | — | 70 | — | 73 | — | 73 |
| Plan liabilities net of plan assets | (29) | (111) | (14) | (154) | (33) | (98) | (16) | (147) |
|  |  |  |  |  |  |  |  |  |
| Amounts reported in consolidated  statement of financial position |  |  |  |  |  |  |  |  |
| Defined benefit pension plans | — | 5 | — | 5 | — | 8 | — | 8 |
| Net retirement benefits asset | — | 5 | — | 5 | — | 8 | — | 8 |
| Defined benefit pension plans | — | (116) | (14) | (130) | — | (106) | (16) | (122) |
| Post-retirement medical plans | (29) | — | — | (29) | (33) | — | — | (33) |
| Net retirement benefits liability | (29) | (116) | (14) | (159) | (33) | (106) | (16) | (155) |

The changes in the present value of defined benefit liabilities and fair value of plan assets are as follows:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | Defined benefit liabilities | | Fair value of plan assets | | Net liability | |
| € million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| At 1 January | (220) | (302) | 73 | 131 | (147) | (171) |
| Included in consolidated income statement |  |  |  |  |  |  |
| Current service cost | (4) | (4) | — | — | (4) | (4) |
| (Loss)/gain from settlement | (1) | 6 | — | (6) | (1) | — |
| Interest | (11) | (8) | 3 | 2 | (8) | (6) |
| Included in consolidated statement of comprehensive income |  |  |  |  |  |  |
| Remeasurement (losses)/gains | (20) | 51 | — | — | (20) | 51 |
| Return on plan assets | — | — | (3) | (43) | (3) | (43) |
| Acquired through business combinations (see note 25) | (3) | — | — | — | (3) | — |
| Reclassification to assets held for sale and liabilities directly  associated with assets held for sale (see note 28) | — | 14 | — | — | — | 14 |
| Contributions paid by employer | — | — | 2 | 1 | 2 | 1 |
| Benefits paid | 28 | 20 | (6) | (7) | 22 | 13 |
| Currency movements | 7 | 3 | 1 | (5) | 8 | (2) |
| At 31 December | (224) | (220) | 70 | 73 | (154) | (147) |

The expected maturity analysis of undiscounted retirement benefits is as follows:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| € million | Defined benefit  pension plans | Post-retirement  medical plans | Total | Defined benefit  pension plans | Post-retirement  medical plans | Total |
| Less than a year | 10 | 3 | 13 | 9 | 4 | 13 |
| Between one and two years | 10 | 3 | 13 | 9 | 4 | 13 |
| Between two to five years | 29 | 11 | 40 | 25 | 13 | 38 |
| After five years | 148 | 135 | 283 | 138 | 182 | 320 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 199 |
|  |  |  |

#### 24 Retirement benefits



#### continued

The weighted average duration of the defined retirement benefits liability for South Africa is 7 years (2022: 7 years), Europe 10 years

(2022: 10 years) and other regions 15  years (2022: 12 years).

It is expected that the Group’s share of contributions will increase as the schemes’ members age. The expected contributions to be paid

to defined benefit pension plans and post-retirement medical plans during  2024 are €14 million.

The market values of the plan assets in these plans are detailed below:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | 2023 | | | 2022 | | |
| € million | Quoted | Unquoted | Total | Quoted | Unquoted | Total |
| Bonds | — | 3 | 3 | — | 15 | 15 |
| Insurance contracts | — | 64 | 64 | — | 51 | 51 |
| Cash | 3 | — | 3 | 6 | — | 6 |
| Liability-driven investment (LDI) portfolio | — | — | — | — | 1 | 1 |
| Fair value of plan assets | 3 | 67 | 70 | 6 | 67 | 73 |

The majority of the Group’s plan assets are located in two UK pension schemes. These schemes are closed, have no active members

and have undertaken ‘buy-ins’ in 2022 and 2023 by purchasing insured annuity contracts to fund their future liabilities. The next stage

for these two schemes is to complete buy-outs by transferring their liabilities to third parties, followed by the closure of these schemes.

The purchased insured annuity contracts exactly fund the future payment benefits of the scheme, eliminating the risks for future

scheme deficits.

The fair values of plan assets are determined in accordance with IAS 19.

The actual return on plan assets in respect of defined benefit plans was €nil (2022: loss of €41 million).

The market value of assets is used to determine the funding level of the plans and is sufficient to cover 83% (2022: 91%) of the benefits which

have accrued to members, after allowing for expected increases in future earnings and pensions. Companies within the Group are paying

contributions at rates agreed with the plans’ trustees and in accordance with local independent actuarial advice and statutory provisions.

In certain jurisdictions, Group plans are subject to minimum funding requirements. At 31 December 2023, these minimum funding

requirements did not give rise to the recognition of any additional liabilities.

#### Sensitivity analyses

The sensitivity analyses below have been determined based on reasonably possible changes to the respective assumptions occurring

at the end of the financial year, while holding all other assumptions constant.

The sensitivity analyses may not be representative of the actual changes in the net retirement benefits asset/(liability), as it is unlikely that

the changes in assumptions would occur in isolation of one another and some of the assumptions may be inter-related. The projected

unit credit method was used to calculate the sensitivity analyses below.

The sensitivity table is based on a 1% change by reference to the movement in actuarial assumptions in the tables above; however,

the estimates may vary by greater amounts. Therefore, the Board considers the retirement benefit obligations a significant

accounting estimate.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 200 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 1% increase | 1% decrease |
| Discount rate |  |  |
| (Decrease)/increase in current service cost | (1) | 1 |
| (Decrease)/increase in net retirement benefits liability | (19) | 22 |
| Rate of inflation |  |  |
| Increase/(decrease) in current service cost | — | (1) |
| Increase/(decrease) in net retirement benefits liability | 12 | (13) |
| Rate of increase in salaries |  |  |
| Increase/(decrease) in current service cost | — | (1) |
| Increase/(decrease) in net retirement benefits liability | 5 | (7) |
| Rate of increase of pensions in payment |  |  |
| Decrease in current service cost | — | — |
| Increase/(decrease) in net retirement benefits liability | 8 | (7) |
| Medical cost trend rate |  |  |
| Decrease in aggregate of the current service cost and interest cost | — | — |
| Increase/(decrease) in net retirement benefits liability | 2 | (2) |
| Mortality rates | 1-year increase |  |
| Decrease in current service cost | — |  |
| Increase in net retirement benefits liability | — |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 201 |
|  |  |  |

#### 25 Business combinations

To

#### 31 December 2023

On 12 January 2023, the Group completed the acquisition of the Duino mill near Trieste (Italy) from the Burgo Group. The mill operated

one paper machine producing lightweight coated mechanical paper. During the year, production was permanently stopped and a

€200 million investment to convert the existing paper machine into a 420,000 tonne per annum high-quality, cost-competitive recycled

containerboard machine commenced, with start-up expected in 2025. For the year ended 31 December 2023, the mill generated revenue

of €21 million and a loss after tax of €11 million, which have been included in the consolidated income statement. The loss is primarily

attributable to the annual depreciation of property, plant and equipment and expenses for the integration of the mill into the

Group’s structure.

Details of the net assets acquired, as adjusted from book to fair value, are as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| € million | Book value | Revaluation | Fair value |
| Net assets acquired |  |  |  |
| Property, plant and equipment | 39 | (2) | 37 |
| Intangible assets | 1 | — | 1 |
| Deferred tax asset | 1 | (1) | — |
| Inventories | 4 | 13 | 17 |
| Total assets | 45 | 10 | 55 |
| Net retirement benefits liability | (3) | — | (3) |
| Other provisions | — | (13) | (13) |
| Total liabilities | (3) | (13) | (16) |
|  |  |  |  |
| Net assets acquired | 42 | (3) | 39 |
| Gain on bargain purchase |  |  | (2) |
| Net cash paid per consolidated statement of cash flows |  |  | 37 |

Transaction costs of €2 million were charged to other net operating expenses in the consolidated income statement.

The purchase price allocation resulted in a gain on bargain purchase of €2 million as the fair value of net assets acquired was in excess

of the consideration paid. The gain on bargain purchase is attributable to the need for investment. This corresponds with the Group’s

investment plans to convert the paper machine and the limited reusability of certain assets after the conversion and the future costs

associated with the mill while the conversion is pending. The gain was recognised in other net operating expenses in the consolidated

income statement.

The fair values of assets acquired and liabilities assumed in business combinations are level 3 measures in terms of the fair value

measurement hierarchy. Property, plant and equipment has been measured at fair value using relevant valuation methods accepted under

IFRS 13, 'Fair Value Measurement', with related deferred tax adjustments. Management has considered the impact of environmental and

climate risks on the estimated fair values of Duino's property, plant and equipment. These considerations did not have a material impact.

To

#### 31 December 2022

There were no business combinations during the year ended 31 December 2022.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 202 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 26 Disposal of businesses

To

#### 31 December 2023

There were no disposals of businesses from continuing operations during the year ended 31 December 2023. Refer to note 28 for

disclosures on the disposal of the Russian discontinued operations.

To

#### 31 December 2022

On 30 June 2022, the Group sold its Personal Care Components (PCC) business to Nitto Denko Corporation for an enterprise value of

€ 615 million. The sale enabled the Group to simplify its portfolio and focus on its strategic priority to grow in sustainable packaging. PCC

manufactured a range of components for personal and home care products needed in everyday life such as diapers, feminine care, adult

incontinence and wipes.

|  |  |
| --- | --- |
|  |  |
| € million | 2022 |
| Proceeds from the disposal of business per the consolidated statement of cash flows | 642 |
| Cash and cash equivalents disposed | 15 |
| Consideration in cash | 657 |
| Carrying amount of net assets disposed | (412) |
| Gain on reclassification of foreign currency translation reserve | 4 |
| Related transaction costs1 | (7) |
| Gain on disposal of business, net of related transaction costs | 242 |
| Tax charge | (5) |
| Gain on disposal of business, net of related tax | 237 |

Note:

1 Excludes transaction costs of €6 million recognised in 2021, which were not treated as a special item.

The carrying amounts of assets and liabilities as at the date of sale (30 June 2022) were:

|  |  |
| --- | --- |
|  |  |
| € million | 30 June 2022 |
| Property, plant and equipment | 174 |
| Goodwill | 141 |
| Intangible assets | 2 |
| Inventories | 58 |
| Trade and other receivables | 88 |
| Cash and cash equivalents | 15 |
| Total assets | 478 |
| Trade and other payables | (49) |
| Provisions | (4) |
| Deferred tax liabilities | (8) |
| Other liabilities | (5) |
| Total liabilities | (66) |
| Carrying amount of net assets disposed | 412 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 203 |
|  |  |  |

#### 27 Consolidated cash flow analysis

#### (a) Reconciliation of profit before tax to cash generated from operations

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Profit before tax from continuing operations | 682 | 1,560 |
| Depreciation and amortisation | 408 | 394 |
| Impairment of property, plant and equipment (not included in special items) | 3 | 11 |
| Share-based payments | 9 | 11 |
| Net cash flow effect of current and prior year special items | 17 | (253) |
| Net finance costs | 73 | 143 |
| Net monetary gain arising from hyperinflationary economies | (2) | (17) |
| Net loss/(profit) from joint ventures | 5 | (1) |
| Impairment of investments in joint ventures | 5 | — |
| Decrease in provisions | (17) | (1) |
| Decrease in net retirement benefits | (19) | (12) |
| Net movement in working capital | 229 | (419) |
| Decrease/(increase) in inventories | 389 | (254) |
| Decrease/(increase) in operating receivables | 56 | (472) |
| (Decrease)/increase in operating payables | (216) | 307 |
| Fair value gains on forestry assets | (128) | (169) |
| Felling costs | 87 | 78 |
| Net gain on disposal of property, plant and equipment | (13) | (2) |
| Insurance reimbursements for property damages | (17) | (8) |
| Other adjustments | (10) | (23) |
| Cash generated from continuing operations | 1,312 | 1,292 |

#### (b) Cash and cash equivalents

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Cash and cash equivalents per consolidated statement of financial position | 1,592 | 1,067 |
| Bank overdrafts included in short-term borrowings | — | (6) |
| Cash and cash equivalents held by continuing operations (see note 27c) | 1,592 | 1,061 |
| Cash and cash equivalents classified as assets held for sale (see note 28) | — | 320 |
| Cash and cash equivalents per consolidated statement of cash flows | 1,592 | 1,381 |

The cash and cash equivalents of  €1,592 million  (2022 :  €1,067 million ) include money market funds of €840 million ( 2022 : € 595 million)

valued at fair value through profit and loss, with the remaining balance carried at amortised cost.

The Group operates in certain countries where the existence of exchange controls or access to hard currency may restrict the use

of certain cash balances outside of those countries. These restrictions are not expected to have any material effect on the Group’s ability

to meet its ongoing obligations.

The fair values of cash and cash equivalents carried at amortised cost approximate their carrying values presented.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 204 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### (c) Movement in net debt

The Group’s net debt position is as follows:

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| € million | Cash and  cash  equivalents | Current  financial  asset  investments1 | Subtotal | Debt due  within 1 year 2 | Debt due  after 1 year | Debt-related  derivative  financial  instruments1 | Subtotal | Total net  debt |
| At 1 January 2022 | 455 | 1 | 456 | (106) | (2,104) | (9) | (2,219) | (1,763) |
| Cash flow | 908 | — | 908 | 32 | 53 | 82 | 167 | 1,075 |
| Cash movement from continuing  operations | 636 | — | 636 | — | — | — | — | 636 |
| Proceeds from borrowings | — | — | — | (44) | — | — | (44) | (44) |
| Repayment of borrowings | — | — | — | 53 | 53 | — | 106 | 106 |
| Repayment of lease liabilities | — | — | — | 21 | — | — | 21 | 21 |
| Net cash outflow from debt-related  derivative financial instruments | — | — | — | — | — | 83 | 83 | 83 |
| Discontinued operations | 272 | — | 272 | 2 | — | (1) | 1 | 273 |
| Additions to lease liabilities | — | — | — | (15) | (35) | — | (50) | (50) |
| Disposal of lease liabilities | — | — | — | 1 | 4 | — | 5 | 5 |
| Movement in unamortised loan costs | — | — | — | — | (2) | — | (2) | (2) |
| Net movement in fair value of  derivative financial instruments | — | — | — | — | — | (80) | (80) | (80) |
| Reclassification | — | — | — | (21) | 21 | — | — | — |
| Assets and liabilities classified as held  for sale | (320) | — | (320) | 3 | 99 | — | 102 | (218) |
| Currency movements | 18 | — | 18 | 10 | (6) | — | 4 | 22 |
| At 31 December 2022 | 1,061 | 1 | 1,062 | (96) | (1,970) | (7) | (2,073) | (1,011) |
| Cash flow | 336 | — | 336 | 40 | — | 77 | 117 | 453 |
| Cash movement from continuing  operations | (248) | — | (248) | — | — | — | — | (248) |
| Proceeds from borrowings | — | — | — | (16) | — | — | (16) | (16) |
| Repayment of borrowings | — | — | — | 33 | — | — | 33 | 33 |
| Repayment of lease liabilities | — | — | — | 22 | — | — | 22 | 22 |
| Net cash outflow from debt-related  derivative financial instruments | — | — | — | — | — | 77 | 77 | 77 |
| Discontinued operations | 584 | — | 584 | 1 | — | — | 1 | 585 |
| Additions to lease liabilities | — | — | — | (14) | (18) | — | (32) | (32) |
| Disposal of lease liabilities | — | — | — | 2 | 6 | — | 8 | 8 |
| Movement in unamortised loan costs | — | — | — | (1) | (2) | — | (3) | (3) |
| Net movement in fair value of  derivative financial instruments | — | — | — | — | — | (63) | (63) | (63) |
| Reclassification | — | — | — | (519) | 519 | — | — | — |
| Elimination of assets and liabilities  previously classified as held for sale | 320 | — | 320 | (1) | (23) | — | (24) | 296 |
| Currency movements | (125) | — | (125) | 30 | 28 | — | 58 | (67) |
| At 31 December 2023 | 1,592 | 1 | 1,593 | (559) | (1,460) | 7 | (2,012) | (419) |

Notes:

1 Included in financial instruments in the consolidated statement of financial position.

2 Excludes bank overdrafts of €nil (2022: €6 million), which are included in cash and cash equivalents (see note 27b).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 205 |
|  |  |  |

#### 27 Consolidated cash flow analysis



#### continued

The Group incurred interest expense of €122 million  (2022: €140 million) in relation to bank overdrafts, loans and lease liabilities. Included

in this expense is  €53 million ( 2022: €67 million) relating to forward exchange rates on derivative contracts and interest paid on

borrowings of  € 50 million (2022 : €60 million).

#### 28 Russian operations (discontinued operations)

On 4 May 2022, the Board decided to divest the Group’s Russian assets and subsequently concluded, in June 2022, that the Russian

operations satisfied the criteria to be classified as held for sale and that they should also be classified as discontinued operations.

With the completion of the disposal of its Russian packaging converting operations and its Syktyvkar mill on 30 June 2023 and

4 October 2023 respectively, as further described below, the Group has concluded its exit from Russia and the net proceeds from the

sale of its Russian assets were distributed to shareholders on 13 February 2024 by way of a special dividend (see notes 9, 22 and 34

for further details).

#### Syktyvkar

#### mill

On 12 August 2022, the Group entered into an agreement to sell its Syktyvkar mill, comprising JSC Mondi Syktyvkar together with two

affiliated entities, to Augment Investments Limited (Augment).

On 5 June 2023, following discussions with Augment on its lack of progress in gaining the necessary approval from the Russian

Federation’s Government Sub-Commission for the Control of Foreign Investments to complete this transaction, the Group withdrew

from the agreement with Augment.

At that time, the Board remained committed to the divestment of the Syktyvkar mill. Following the withdrawal, the Group entered into

dialogue with a number of potential buyers and the Group had received conditional offers for the Syktyvkar mill. In approximating a fair

value less costs to sell as at 30 June 2023 in the context of the Group’s half-year results for the period then ended, the Board considered

the offers received to date and also obtained an independent valuation by an authorised valuer in Russia. As reported at the half year,

the available information suggested a range of fair values, and there were ongoing negotiations with the potential buyers about various

aspects of their offers which meant that the final offer price and the associated assets within the perimeter of the transaction were not,

in the case of all offers, clearly defined. Based on all information available at the time of the half-year results being published, the Group

impaired the Syktyvkar mill by €97 million, net of related tax, to its estimated fair value less costs to sell as at 30 June 2023.

On 17 September 2023, the Group announced that it had entered into an agreement to sell its Syktyvkar mill to Sezar Invest LLC (Sezar

Invest) for a total cash consideration of RUB 80 billion. The disposal was completed and ownership of the Syktyvkar mill was transferred

to Sezar Invest on 4 October 2023 after the Group had received RUB 57 billion (€547 million) into its London bank account and a letter

of credit for the remaining RUB 23 billion. The final two instalments of the consideration for RUB 23 billion (€229 million) were received

in November and December 2023 respectively, resulting in total proceeds received in cash of €776 million.

|  |  |
| --- | --- |
|  |  |
| € million | 2023 |
| Proceeds from the disposal of business, net of cash and cash equivalents | 389 |
| Cash and cash equivalents disposed | 387 |
| Consideration in cash | 776 |
| Carrying amount of net assets disposed | (875) |
| Loss on reclassification of foreign currency translation reserve | (599) |
| Related transaction costs1 | (12) |
| Loss on disposal of business, net of related transaction costs and tax | (710) |

Note:

1 Excludes transaction costs of €4 million already recognised in the prior year.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 206 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

The carrying amounts of assets and liabilities of the Syktyvkar mill as at the date of sale (4 October 2023) were:

|  |  |
| --- | --- |
|  |  |
| € million | 4 October 2023 |
| Property, plant and equipment | 584 |
| Intangible assets | 4 |
| Inventories | 93 |
| Trade and other receivables | 47 |
| Cash and cash equivalents | 387 |
| Total assets | 1,115 |
| Borrowings | (77) |
| Trade and other payables | (94) |
| Current tax liabilities | (17) |
| Provisions | (9) |
| Net retirement benefits liability | (10) |
| Deferred tax liabilities | (33) |
| Total liabilities | (240) |
| Carrying amount of net assets disposed | 875 |

#### Packaging converting operations

On 30 June 2023, the Group completed the sale of its three Russian packaging converting operations to the Gotek Group for a

consideration of RUB 1.6 billion resulting in proceeds of €30 million. The three packaging converting operations comprise a corrugated

solutions plant, LLC Mondi Lebedyan, and two consumer flexibles plants, LLC Mondi Aramil and LLC Mondi Pereslavl.

|  |  |
| --- | --- |
|  |  |
| € million | 2023 |
| Proceeds from the disposal of business, net of cash and cash equivalents | 12 |
| Cash and cash equivalents disposed | 18 |
| Consideration in cash | 30 |
| Carrying amount of net assets disposed | (40) |
| Loss on reclassification of foreign currency translation reserve | (34) |
| Related transaction costs | (2) |
| Loss on disposal of business, net of related transaction costs and tax | (46) |

The carrying amounts of assets and liabilities of the Russian packaging converting operations as at the date of sale (30 June 2023) were:

|  |  |
| --- | --- |
|  |  |
| € million | 30 June 2023 |
| Inventories | 18 |
| Trade and other receivables | 33 |
| Cash and cash equivalents | 18 |
| Total assets | 69 |
| Trade and other payables | (24) |
| Current tax liabilities | (2) |
| Deferred tax liabilities | (3) |
| Total liabilities | (29) |
| Carrying amount of net assets disposed | 40 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 207 |
|  |  |  |

#### 28 Russian operations (discontinued operations)



#### continued

#### Financial performance

The financial performance and cash flow information of the discontinued operations are set out in the tables below and cover the period

until the respective dates of disposal in 2023:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| External revenue | 709 | 1,178 |
| Expenses1 | (561) | (820) |
| Profit before tax | 148 | 358 |
| Related tax charge1 | (47) | (92) |
| Profit for the year of discontinued operations | 101 | 266 |
| Loss on sale of business, net of related transaction costs and tax | (756) | — |
| (Loss)/profit from discontinued operations attributable to shareholders | (655) | 266 |
| Fair value gains arising from cash flow hedges of discontinued operations | — | 1 |
| Exchange differences on translation of discontinued non-euro operations | (227) | 72 |
| Reclassification of foreign currency translation reserve to consolidated income statement on disposal of  businesses of discontinued operations | 633 | — |
| Remeasurements of retirement benefits plans of discontinued operations | — | 1 |
| Other comprehensive income from discontinued operations attributable  to shareholders | 406 | 74 |
| Total comprehensive (expense)/income from discontinued operations attributable  to shareholders | (249) | 340 |

Note:

1 Includes impairment of assets of €97 million (2022: €57 million), comprising impairment of €113 million (2022: €57 million) and related deferred tax credit of €16 million (2022: €nil).

#### Earnings per share (EPS) from discontinued operations attributable to shareholders

|  |  |  |
| --- | --- | --- |
|  |  |  |
| euro cents | 2023 | 2022 |
| Basic EPS | (135.0) | 54.8 |
| Diluted EPS | (135.0) | 54.8 |

#### Cash flow statement

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Net cash generated from operating activities | 223 | 350 |
| Net cash generated from/(used in) investing activities1 | 368 | (68) |
| Net cash used in financing activities | (7) | (10) |
| Net increase in cash and cash equivalents of discontinued operations | 584 | 272 |

Note:

1 Includes proceeds from the sale of the Russian operations of €806 million (2022: €nil) less cash disposed of €405 million (2022: €nil).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 208 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Assets and liabilities classified as held for sale

The following assets and liabilities were classified as held for sale in relation to the discontinued operations:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Property, plant and equipment | — | 805 |
| Goodwill | — | 34 |
| Intangible assets | — | 4 |
| Deferred tax assets | — | 1 |
| Inventories | — | 131 |
| Trade and other receivables | — | 87 |
| Cash and cash equivalents | — | 320 |
| Total assets held for sale | — | 1,382 |
| Borrowings | — | (102) |
| Trade and other payables | — | (131) |
| Current tax liabilities | — | (14) |
| Provisions | — | (14) |
| Net retirement benefits liability | — | (12) |
| Deferred tax liabilities | — | (52) |
| Total liabilities directly associated with assets classified as held for sale | — | (325) |

The cumulative foreign exchange loss recognised in other comprehensive income in relation to the discontinued operations as at

31 December 2023 was €nil (2022: loss of €405 million).

#### 29 Capital commitments

Capital expenditure contracted for at the end of the financial year but not recognised as liabilities is as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Intangible assets | 2 | 2 |
| Property, plant and equipment | 632 | 441 |
| Total capital commitments | 634 | 443 |

#### 30 Contingent liabilities

The Group’s contingent liabilities as at 31 December 2023 were € 3 million  ( 2022 :  €11 million ). No acquired contingent liabilities have been

recorded in the Group’s consolidated  statement of financial position for either year presented.

#### 31 Financial instruments

The Group’s trading and financing activities expose it to various financial risks that, if left unmanaged, could adversely impact current or

future earnings. Although not necessarily mutually exclusive, these financial risks are categorised separately according to their different

generic risk characteristics and include market risk (foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group

manages all of these financial risks in order to minimise their potential adverse impact on the Group’s financial performance.

The principles, practices and procedures governing the  Group-wide financial risk management process have been approved by the

Board and are overseen by the Executive Committee. In turn, the Executive Committee delegates authority to a central Treasury function

(Group Treasury) for the practical implementation of the financial risk management process across the  Group and for ensuring that

the Group’s  entities adhere to specified financial risk management policies. Group Treasury continually reassesses and reports on the

financial risk environment, identifying, evaluating and hedging financial risks by entering into derivative contracts with counterparties

where appropriate. The Group does not take speculative positions on derivative contracts.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 209 |
|  |  |  |

#### 31 Financial instruments



#### continued

#### (a) Financial instruments by category

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2023/€ million | Fair value  hierarchy1 | At amortised  cost | At fair value  through profit or  loss | Total |
| Financial assets |  |  |  |  |
| Trade and other receivables2 |  | 1,015 | — | 1,015 |
| Financial asset investments | Level 2 | 16 | 13 | 29 |
| Derivative financial instruments | Level 2 | — | 13 | 13 |
| Cash and cash equivalents | Level 1 | 752 | 840 | 1,592 |
| Total |  | 1,783 | 866 | 2,649 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2022/€ million | Fair value  hierarchy1 | At amortised  cost | At fair value  through profit or  loss | Total |
| Financial assets |  |  |  |  |
| Trade and other receivables2 |  | 1,244 | — | 1,244 |
| Financial asset investments | Level 2 | 14 | 12 | 26 |
| Derivative financial instruments | Level 2 | — | 3 | 3 |
| Cash and cash equivalents | Level 1 | 472 | 595 | 1,067 |
| Total |  | 1,730 | 610 | 2,340 |

Notes:

1 Fair value hierarchy level is disclosed for financial assets measured at fair value through profit or loss.

2 Excludes tax, social security and prepayments.

The fair values of financial assets investments represent the published prices of the securities concerned.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2023/€ million | Fair value  hierarchy1 | At amortised  cost | At fair value  through profit or  loss | Total |
| Financial liabilities |  |  |  |  |
| Borrowings – bonds |  | (1,845) | — | (1,845) |
| Borrowings – loans and overdrafts |  | (49) | — | (49) |
| Borrowings – lease liabilities2 |  | (125) | — | (125) |
| Trade and other payables3 |  | (1,146) | — | (1,146) |
| Derivative financial instruments | Level 2 | — | (4) | (4) |
| Total |  | (3,165) | (4) | (3,169) |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 2022/€ million | Fair value  hierarchy1 | At amortised  cost | At fair value  through profit or  loss | Total |
| Financial liabilities |  |  |  |  |
| Borrowings – bonds |  | (1,843) | — | (1,843) |
| Borrowings – loans and overdrafts |  | (101) | — | (101) |
| Borrowings – lease liabilities2 |  | (128) | — | (128) |
| Trade and other payables3 |  | (1,440) | — | (1,440) |
| Derivative financial instruments | Level 2 | — | (10) | (10) |
| Total |  | (3,512) | (10) | (3,522) |

Notes:

1 Fair value hierarchy level is disclosed for financial liabilities measured at fair value through profit or loss.

2 Lease liabilities are financial instruments outside of scope of IFRS 9, 'Financial Instruments', and are accounted for under IFRS 16, 'Leases' (see note 35).

3 Excludes tax, social security and deferred income.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 210 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### (b) Fair value measurement

There have been no transfers of assets or liabilities between levels of the fair value hierarchy during the year.

Except as detailed below, the carrying values of financial instruments at amortised cost as presented in the consolidated financial

statements approximate their fair values.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Carrying amount | | Fair value | |
| € million | 2023 | 2022 | 2023 | 2022 |
| Financial liabilities |  |  |  |  |
| Borrowings | 2,019 | 2,072 | 1,983 | 1,956 |

The fair values of the Eurobonds represent level 1 fair values and are estimated with reference to the last price quoted in the secondary

market. The fair values of all other borrowings represent level 3 fair values and 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.

#### (c) Financial risk management

Market risk

The Group’s activities expose it primarily to foreign exchange and interest rate risk. Both risks are actively monitored on a regular basis

and managed through the use of foreign exchange contracts and interest rate swaps as appropriate. Although the Group’s cash flows are

exposed to movements in key input and output prices, such movements represent the commercial rather than financial risks inherent

to the Group.

Foreign exchange risk

The Group operates globally and is exposed to foreign exchange risk in the normal course of its business. Multiple currency exposures

arise from commercial transactions denominated in foreign currencies, recognised financial assets and liabilities (monetary items)

denominated in foreign currencies and translational exposure on net investments in non-euro operations.

Foreign exchange contracts

The Group’s Treasury policy requires subsidiaries to actively manage foreign currency transactional exposures against their functional

currencies by entering into foreign exchange contracts. For segmental reporting purposes, each subsidiary enters into, and accounts

for, foreign exchange contracts with Group treasury or with counterparties that are external to the Group, whichever is more

commercially appropriate.

Only material balance sheet exposures and highly probable forecast capital expenditure transactions are hedged.

Foreign currency sensitivity analysis

Foreign exchange risk sensitivity analysis has been performed on the foreign currency exposures inherent in the Group’s financial assets

and financial liabilities at the reporting dates presented, net of related foreign exchange contracts. The sensitivity analysis provides an

indication of the impact on the Group’s reported earnings of reasonably possible changes in the currency exposures embedded within

the functional currency environments that the Group operates in. In addition, an indication is provided of how reasonably possible

changes in foreign exchange rates might impact on the Group’s equity, as a result of fair value adjustments to foreign exchange

contracts designated as cash flow hedges. Reasonably possible changes are based on an analysis of historical currency volatility,

together with any relevant assumptions regarding near-term future volatility.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 211 |
|  |  |  |

#### 31 Financial instruments



#### continued

Net monetary foreign currency exposures by functional currency zone for continuing operations

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Net monetary foreign currency exposures – assets/(liabilities)1 | | | |
|  | 2023 | | 2022 | |
| € million | EUR | Other | EUR | Other |
| Functional currency zones2 |  |  |  |  |
| Euro3 | — | (17) | — | 135 |
| South African rand | 1 | (7) | 1 | (6) |
| Egyptian pound | (79) | 1 | (56) | (4) |
| Czech koruna | (3) | — | (14) | (2) |
| Polish zloty | (5) | 2 | 2 | 2 |
| Swedish krona | (11) | 2 | (3) | — |
| Turkish lira | 6 | 1 | — | 1 |
| Other | (42) | (2) | (28) | 7 |

Notes:

1 Presented in euro, the presentation currency of the Group.

2 Net monetary exposures represent financial assets less financial liabilities denominated in currencies other than the applicable functional currency, adjusted for the effects of

foreign exchange risk hedging, excluding cash flow hedging of non-monetary assets and liabilities.

3 Included in the other net monetary exposure is €nil (2022: €148 million) worth of Russian rouble dividend receivable.

Functional to foreign currency net monetary exposure sensitivity

Functional to foreign currency net monetary exposure sensitivity is €1 million or less for each major currency assuming a 5% appreciation

and/or depreciation of functional currency, with the exception of euro which has an exposure sensitivity of €1 million (2022: €7 million)

and Egyptian pound of €4 million (2022: €3 million).

#### Interest rate risk

The Group holds cash and cash equivalents, which earn interest at a variable rate, and has variable and fixed rate debt in issue.

Consequently, the Group is exposed to interest rate risk. Although the Group has fixed rate debt in issue, the Group’s Accounting policy

stipulates that all borrowings are held at amortised cost. As a result, the carrying value of fixed rate debt is not sensitive to changes in

credit conditions in the relevant debt markets, and there is, therefore, no exposure to fair value interest rate risk.

Management of cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with short-term highly liquid investments which have

a maturity of three months or less from the date of acquisition. Centralised cash pooling arrangements are in place, which ensure that

cash is utilised most efficiently for the ongoing working capital needs of the Group’s operating units and, in addition, to ensure that the

Group earns the most advantageous rates of interest available.

Management of variable rate debt

The Group has multiple variable rate debt facilities, of which the most significant is the Syndicated Revolving Credit Facility (see note 20).

The Group’s cash and cash equivalents act as a natural hedge to movements in the relevant interbank lending rates on its variable rate

debt, subject to any interest rate differentials that exist between the Group’s corporate saving and lending rates.

Net variable rate debt sensitivity analysis

The net variable rate exposure represents variable rate debt less the future cash outflows swapped from variable to fixed via interest

rate swap instruments and cash and cash equivalents. Reasonably possible changes in interest rates have been applied to the net

variable rate exposure, denominated by currency, in order to provide an indication of the possible impact on the Group’s consolidated

income statement.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 212 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

Interest rate risk sensitivities on variable rate debt

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | Interest rate risk exposures | | | | | |
|  | 2023 | | | 2022 | | |
| € million | EUR | Other | Total | EUR | Other | Total |
| Total borrowings | 1,931 | 88 | 2,019 | 1,936 | 136 | 2,072 |
| Less: |  |  |  |  |  |  |
| Fixed rate borrowings | (1,844) | (25) | (1,869) | (1,842) | (37) | (1,879) |
| Lease liabilities | (67) | (58) | (125) | (64) | (64) | (128) |
| Cash and cash equivalents | (985) | (607) | (1,592) | (887) | (180) | (1,067) |
| Net variable rate debt and exposure | (965) | (602) | (1,567) | (857) | (145) | (1,002) |

Included in other is net variable exposure to various currencies, the most significant of which is Turkish lira (2022: Turkish lira and

South African rand).

The potential impact on the Group’s consolidated equity resulting from the application of a 50 basis point increase to the variable interest

rate exposure would be a profit of €8 million and vice versa for a 50 basis point reduction.

In addition to the above, the Group swaps euro debt into other currencies through the foreign exchange market using foreign exchange

contracts, which has the effect of exposing the Group to the interest rates of these currencies. The currencies swapped into/(out of)

and the amounts as at 31 December were as follows:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Short-dated contracts with tenures of less than 12 months |  |  |
| Czech koruna | 514 | 304 |
| Great British pound | 107 | 8 |
| Polish zloty | 552 | 303 |
| South African rand | 212 | 191 |
| Swedish krona | 61 | (18) |
| Thai baht | 70 | 70 |
| US dollar | 413 | 101 |
| Other | 160 | 140 |
| Total swapped against the euro | 2,089 | 1,099 |

#### Credit risk

The Group’s principal credit risk is the risk of customers defaulting on sales invoices raised. The Group’s exposure to the credit risk

inherent in its trade receivables and the associated risk management techniques that the Group deploys in order to mitigate this risk

are discussed in note 17. Additionally, the Group has credit risk on the investment of cash with certain financial institutions. The Group

Treasury manages the risk on these investments within approved credit limits.

Several Group entities have also issued certain financial guarantees to external counterparties in order to achieve competitive funding

rates for specific debt agreements entered into by other Group entities. None of these financial guarantees contractually obligates the

Group to pay more than the recognised financial liabilities in the entities concerned. As a result, these financial guarantee contracts have

no bearing on the credit risk profile of the Group as a whole.

#### Liquidity risk

Liquidity risk is the risk that the Group could experience difficulties in meeting its commitments to creditors as financial liabilities fall due

for payment. The Group manages its liquidity risk by using reasonable and retrospectively assessed assumptions to forecast the future

cash-generative capabilities and working capital requirements of the businesses it operates and by maintaining sufficient reserves,

committed borrowing facilities and other credit lines as appropriate.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 213 |
|  |  |  |

#### 31 Financial instruments



#### continued

The following table shows the amounts available to draw down on the Group’s committed loan facilities:

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Expiry date |  |  |
| Within one year | — | 3 |
| Two to five years | 750 | 750 |
| Above five years | 4 | 4 |
| Total committed facilities available (see note 20) | 754 | 757 |

Forecast liquidity represents the Group’s expected cash inflows, generated principally from sales made to customers, less the Group’s

expected cash outflows, related principally to the payment of employees, supplier payments and the repayment of borrowings plus the

payment of any interest accruing thereon. The matching of these cash inflows and outflows rests on the expected ageing profiles of the

underlying assets and liabilities.

Short-term financial assets and financial liabilities are represented primarily by the Group’s trade receivables and trade payables.

The matching of the cash flows that result from trade receivables and trade payables typically takes place over a period of three to four

months from recognition in the consolidated statement of financial position and is managed to ensure the ongoing operating liquidity

of the Group.

Financing cash outflows may be longer-term in nature. The Group does not hold long-term financial assets to match against these

commitments, but is significantly invested in long-term non-financial assets which generate the sustainable future cash inflows, net of

future capital expenditure requirements, needed to service and repay the Group’s borrowings.

#### (d) Derivative financial instruments

At 31 December 2023, the Group recognised total derivative assets of €13 million (2022: €3 million) and derivative liabilities of €4 million

(2022: €10 million). The net asset of €9 million (2022: net liability of €7 million) will mature within one year.

The notional amount of €2,678 million (2022: €1,710 million) is the aggregate face value of all derivatives outstanding at the reporting

date. They do not indicate the contractual future cash flows of the derivative instruments held or their current fair value and, therefore,

do not indicate the Group’s exposure to credit or market risks. Of the €2,678 million (2022: €1,710 million) aggregate notional amount,

€2,643 million (2022: €1,698 million) relates primarily to the economic hedging of foreign exchange exposures on short-term

inter‑company funding balances, which are fully eliminated on consolidation.

Derivative financial instruments are subject to International Swaps and Derivatives Association (ISDA) master netting agreements.

The amounts are not offset in the consolidated statement of financial position. The amount subject to an enforceable master netting

arrangement or similar agreement that is not netted off is €4 million (2022: €3 million).

Hedging

The Group designates certain derivative financial instruments as cash flow hedges. The fair value gains/(losses) are reclassified from

the cash flow hedge reserve to the consolidated income statement in the period when the hedged transaction affects profit and loss.

For non-current non-financial assets, these gains/(losses) are included in the carrying value of the asset and depreciated over the same

useful life as the cost of the asset.

The Group designates both the spot and forward elements of forward foreign exchange contracts to hedge its currency risk and applies

a hedge ratio of 1:1. The Group determines the existence of an economic relationship between the hedging instrument and hedged item

based on the currency, amount and timing of their respective cash flows. The Group’s policy is for critical terms of the forward exchange

contracts to align with the hedged items and uses the same method to determine hedge ineffectiveness.

Fair value losses of €1 million (2022: gains of €1 million) were reclassified from the cash flow hedge reserve to property, plant

and equipment during the current year. There were no fair value losses in the current year (2022: losses of €4 million) arising on

cash flow hedges due to ineffectiveness which were charged to the (loss)/profit from discontinued operations in the consolidated

income statement.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 214 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 32 Related party transactions

The Group and its subsidiaries, in the ordinary course of business, enter into various sale, purchase and service transactions with

associated undertakings in which the  Group has a material interest. These related party transactions have been contracted on an

arm's‑length basis.

Transactions between  Mondi plc and its subsidiaries, which are related parties, and transactions between its subsidiaries have been

eliminated on consolidation and are not disclosed in this note.

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Joint ventures | |
| € million | 2023 | 2022 |
| Sales to related parties | 7 | 8 |
| Purchases from related parties | 663 | 715 |
| Trade and other receivables from related parties | 1 | 1 |
| Trade and other payables due to related parties | 86 | 112 |
| Loans receivable from related parties | 11 | 10 |

Compensation for the

#### Board

#### and key management

In accordance with IAS 24, ‘Related Party Disclosures’, key management personnel are those persons having authority and responsibility

for planning, directing and controlling the activities of the Group , directly or indirectly, and includes directors (both executive and

non‑executive) of Mondi plc. The Board  and those members of the Group Executive Committee who are not directors comprise

the key management personnel of the Group. The remuneration of the directors is disclosed in the Remuneration report.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Salaries and short-term employee benefits | 6.1 | 8.4 |
| Non-executive directors | 1.4 | 1.2 |
| Defined contribution plan payments | 0.5 | 0.6 |
| Social security costs | 1.1 | 1.1 |
| Share-based payments | 3.6 | 5.6 |
| Total | 12.7 | 16.9 |

Details of the transactions between the Group and its pension and post-retirement medical plans are disclosed in note 24.

#### 33 Group companies

Composition of the

#### Group

The subsidiaries of the Group as at 31 December 2023  are set out in note 11  of the  Mondi plc  parent company financial statements.

All of these interests are  consolidated  within the Group’s financial statements.

Refer to Mondi’s global footprint on pages  [10](#i47a6727b8bad4fe28addb4dae187e293_2522)-[11](#i47a6727b8bad4fe28addb4dae187e293_7065) of the overview to the Integrated report for more information on the places of operation.

A list of subsidiaries taking advantage of an exemption from audit under Section 479A of the  Companies Act 2006 is disclosed in note 9

of the Mondi plc  parent company financial statements.

#### Details of non-wholly-owned subsidiaries

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | Proportion of ownership interests  and voting rights held by  non-controlling interests (%) | | Profit attributable to  non-controlling interests | | Equity attributable to  non-controlling interests | |
| € million, unless otherwise stated | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
| Mondi SCP, a.s. and its subsidiaries | 49 | 49 | 3 | 41 | 328 | 349 |
| Individually immaterial subsidiaries with  non-controlling interests |  |  | 16 | 32 | 113 | 111 |
| Total |  |  | 19 | 73 | 441 | 460 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 215 |
|  |  |  |

#### 33 Group companies



#### continued

Summarised financial information on the Group’s material non-wholly-owned subsidiaries is as follows:

Mondi SCP, a.s. and its subsidiaries

The summarised financial information represents amounts before elimination of intra-group transactions conducted in the ordinary course

of business. The results of the subsidiary on the stand-alone basis may differ from those included in the Group. The subsidiary's

registered office as disclosed in note 11 of the Mondi plc parent company financial statements is also its principal place of business.

Statement of financial position

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Non-current assets | 676 | 753 |
| Current assets | 230 | 409 |
| Current liabilities | (150) | (313) |
| Non-current liabilities | (79) | (129) |
| Net assets | 677 | 720 |
| Equity attributable to non-controlling interests | 328 | 349 |

Income statement and statement of comprehensive income

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Revenue | 735 | 1,232 |
| Operating costs (including taxation) | (733) | (1,148) |
| Profit for the year | 2 | 84 |
| Attributable to non-controlling interests | 3 | 41 |
| Total comprehensive income for the year | 2 | 87 |
| Attributable to non-controlling interests | 3 | 43 |

Statement of cash flows

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Net cash inflow from operating activities | 29 | 115 |
| Net cash outflow from investing activities | (34) | (31) |
| Net cash outflow from financing activities | (31) | (23) |
| Net cash (outflow)/inflow | (36) | 61 |

Mondi AG acquired 100% of the shares in Mondi Neusiedler GmbH and Ybbstaler Zellstoff GmbH for a purchase price of €10 each from

Mondi SCP, a.s. and Obaly SOLO, s.r.o. respectively on 27 February 2023, thereby increasing the Group's effective ownership from 51%

to 100% with no changes in the Group's ownership of Mondi SCP, a.s. and Obaly SOLO, s.r.o.

#### 34 Events occurring after 31 December 2023

Aside from the final ordinary dividend proposed for 2023  (see note 9), there have been the following material reportable events since

31 December 2023:

– On 5 February 2024, the Group announced the completion of the acquisition of Hinton Pulp mill in Alberta (Canada) from West Fraser

Timber Co. Ltd (West Fraser) for a total consideration of USD 5 million. The mill has the capacity to produce around 250,000 tonnes

of pulp per annum and will provide the Group with access to local, high-quality fibre from a well-established wood basket as part of a

long-term partnership with West Fraser. The Group intends to invest in the mill to improve productivity and sustainability performance

and, subject to pre-engineering and permitting, expand the facility primarily with a new kraft paper machine which will integrate its

paper bag operations in the Americas and support future growth.

– On 13 February 2024, the Group returned the net proceeds from the sale of the Group's Russian assets to shareholders by way of

a special dividend of €1.60 per existing ordinary share. In addition, in order to maintain the comparability, so far as possible, of

Mondi plc’s share price before and after the special dividend, the special dividend was accompanied by a share consolidation, which

took effect on 29 January 2024, resulting in shareholders receiving 10 new ordinary shares for every 11 existing ordinary shares.

See notes 9 and 22 for further details.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 216 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### 35 Accounting policies

#### Basis of consolidation

The consolidated financial statements incorporate the revenues, expenses, assets, liabilities, equity and cash flows of Mondi plc  and its

subsidiaries (the  Group ), and the Group’s share of associates and joint ventures drawn up to 31 December  each year. All intra-group

balances and transactions are eliminated.

A subsidiary is an entity over which the Group has control. Control is evident where the Group is exposed to, or has rights to, variable

returns from its involvement with that entity and has the ability to affect those returns through its power over that entity.

The results of subsidiaries acquired or disposed of during the years presented are included in the consolidated income statement  from

the effective date of acquiring control or up to the effective date of disposal.

Non-controlling interests are measured, at initial recognition, as the non-controlling proportion of the fair values of the assets and

liabilities recognised at acquisition.

After initial recognition, non-controlling interests are measured as the aggregate of the value at initial recognition and their subsequent

proportionate share of profits and losses less any distributions made.

Changes in the Group’s interests in subsidiaries that do not result in a change in control are accounted for as equity transactions.

Any resulting difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration

payable or receivable is recognised directly in equity and attributed to the shareholders.

#### Foreign currency transactions and translation

Foreign currency transactions

Foreign currency transactions are translated into the functional currency of the entity that has undertaken the transaction, using the

exchange rates ruling on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in

foreign currencies are translated at the rates prevailing on the reporting date. Gains and losses arising on translation are included in the

consolidated  income statement and are classified as either operating or financing consistent with the nature of the monetary item giving

rise to them.

Translation of non-euro operations

The Group’s results are presented in euro, the currency in which most of its business is conducted. On consolidation, the assets and

liabilities of the Group’s non-euro operations are translated into the presentation currency of the Group at exchange rates prevailing on

the reporting date. Income and expense items, except those which arise in countries with hyperinflationary economies (see note 1), are

translated at the average exchange rates for the month in which they occur, where these approximate the rates on the dates of the

underlying transactions. Exchange differences, if any, are recognised directly in other comprehensive income, and accumulated in the

Group’s currency translation adjustment reserve in equity. Such translation differences are reclassified to profit or loss only on disposal

or partial disposal of the non-euro operation.

#### Hyperinflation accounting (note

1)

The Group has applied IAS 29, 'Financial Reporting in Hyperinflationary Economies', to its subsidiaries in Türkiye and Lebanon, whose

functional currencies have experienced a cumulative inflation rate of more than 100% over the past three years. Assets, liabilities, the

financial position and results of non-euro operations in hyperinflationary economies are translated to euro at the exchange rates

prevailing on the reporting date. The exchange differences are recognised directly in other comprehensive income or expense, and

accumulated in the Group’s cumulative translation adjustment reserve in equity. Such translation differences are reclassified to profit

or loss only on disposal or partial disposal of the non-euro operation.

Prior to translating the financial statements of the Turkish and Lebanese operations, the non-monetary assets and liabilities stated at

historical cost are restated to account for changes in the general purchasing power of the local currencies based on the consumer price

index (Turkish operations: TÜFE, 2003=100; Lebanese operations: CPI 2013=100) published by the Turkish Statistical Institute (TURKSTAT)

and Central Administration of Statistics of the Lebanese Republic, respectively. Gains or losses resulting from the restatement of

non‑monetary assets and liabilities are recorded in the consolidated income statement as a net monetary gain or loss arising from

hyperinflationary economies. Comparative amounts presented in euro are not restated for subsequent changes in the price level or

exchange rates. The results of the Turkish and Lebanese operations are restated to the index level at the end of the period, with

hyperinflationary gains and losses being reported in net monetary gain or loss arising from hyperinflationary economies.

#### Fair value measurement

Assets and liabilities that are measured at fair value, or where the fair value of financial instruments has been disclosed in notes

to the consolidated financial statements, are 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)

– Level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 217 |
|  |  |  |

#### 35 Accounting policies



#### continued

The assets measured at fair value on level 3 of the fair value measurement hierarchy are the Group’s forestry assets, as set out in note 14,

and certain assets acquired and liabilities assumed in a business combination (see note 25).

The fair values of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) require a

degree of estimation and judgement and are determined using generally accepted valuation techniques. These valuation techniques

maximise the use of observable market data and rely as little as possible on Group-specific estimates.

Specific valuation methodologies used to value financial instruments include the following:

– The fair values of foreign exchange contracts are calculated as the present value of expected future cash flows based on observable

yield curves and exchange rates.

– The fair values of the Group’s commodity price derivatives are calculated as the present value of expected future cash flows based

on observable market data.

– Other techniques, including discounted cash flow analysis, are used to determine the fair values of other financial instruments.

#### Segmental reporting (note

2)

The Group’s operating segments are reported in a manner consistent with the internal reporting provided to the Executive Committee,

the chief operating decision-making body. The operating segments are managed based on the nature of the underlying products

produced by those businesses and comprise three distinct segments. The number of reportable segments is the same as the number

of identified operating segments.

Measurement of operating segment revenues, profit or loss, assets and non-current non-financial assets

Each of the operating segments derives its income from the sale of manufactured products.

The operating segment measures adhere to the recognition and measurement criteria presented in the Group’s accounting policies

and are presented on an underlying basis, excluding special items. The Group has presented certain non-IFRS measures (Alternative

Performance Measures), as defined on pages [238](#ia0373627cbfb4cb0bf69a34809b7651c_7178)-[241](#ia0373627cbfb4cb0bf69a34809b7651c_4579), by segment to supplement the user’s understanding. All intra-group transactions

are conducted on an arm’s-length basis.

#### Revenue from contracts with customers (note

2)

Sale of goods

Revenue is recognised from the sale of goods and is measured at the amount of the transaction price received or receivable in exchange

for transferring goods. The transaction price is the expected consideration to be received, to the extent that it is highly probable that

there will not be a significant reversal of revenue in future, after deducting discounts, volume rebates, value added tax and other sales

taxes. When the period of time between delivery of goods and subsequent payment by the customer is less than one year, no

adjustment for a financing component is made.

Control of goods is passed when title and insurance risk have passed to the customer, which is typically when the goods have been

delivered to a contractually agreed location.

The incremental costs of obtaining a contract are recognised as an expense when the period of amortisation over which the costs would

have been recognised is one year or less. If not, these costs are capitalised and amortised on a basis consistent with the transfer of

goods to the customer to which the asset relates.

Transport revenue

Transport revenue is considered distinct when the Group provides transport services after the point in time when control of goods

has passed to the customer. Such revenue is recognised over time.

#### Other income

Sale of green energy and CO2e credits (note 16)

Income generated from the sale of green energy and CO2e credits issued under international trading schemes are accounted for as

government grants and are measured at the consideration received in exchange for transferring such credits. The income is recorded

within other net operating expenses in the consolidated income statement when ownership rights pass to the buyer. Any unsold green

energy credits are recorded in inventory at cost, which is often at nil value.

Insurance reimbursements (note 10)

Compensation for insurance reimbursements, including compensation for business interruptions and for the loss or impairment of property, plant

and equipment, is recognised within other net operating expenses in the consolidated income statement when receipt is virtually certain.

Fair value gains/(losses) from forestry assets (note 14)

Changes in the fair value of forestry assets are recognised within other net operating expenses in the consolidated income statement.

Investment income (note 6)

Interest income, which is derived from cash and cash equivalents and other interest-bearing financial assets, is accrued on a time

proportion basis, by reference to the principal outstanding and at the applicable effective interest rate.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 218 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

#### Taxation (note

7)

The tax expense represents the sum of the current tax charge and the deferred tax charge.

Current tax

The current tax charge is based on taxable profit for the year. The Group’s asset/liability for current tax is calculated using tax rates that

have been enacted or substantively enacted by the reporting date. The Group is regularly subject to routine tax audits. Provision is made

based on the tax laws in the relevant country and the expected outcomes of any negotiations or settlements. Current tax is presented as

a special item if the corresponding taxable income/expense is accounted for as a special item.

The Group is subject to corporate taxes in a number of jurisdictions and a degree of estimation and judgement is required in determining

the appropriate tax provision for transactions where the tax treatment is uncertain. In these circumstances, the Group recognises

provisions for taxes based on information available where the anticipated liability is both probable and estimable.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amount of assets and

liabilities in the Group’s consolidated financial statements and the corresponding tax bases used in the computation of taxable profits and

is accounted for using the balance sheet liability method. Deferred tax is presented as a special item if the corresponding temporary

difference arises from a special item.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent

that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Such assets

and liabilities are not recognised if the temporary differences arise from the initial recognition of goodwill or from the initial recognition,

other than in a business combination, of other assets and liabilities in a transaction that affects neither the tax profit nor accounting profit

and does not give rise to equal taxable and deductible temporary differences.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except

where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not

reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date. In considering their recoverability, the Group assesses

the likelihood of the assets being recoverable within a reasonably foreseeable timeframe, typically a three-year period consistent with

the period applied to the Group’s viability assessment. The carrying amount is reduced to the extent that it is no longer probable that

sufficient taxable profit will be available to allow all or part of the asset to be recovered. Similarly, it is increased to the extent that it

becomes probable that sufficient taxable profit will be available in the future for all or part of the deferred tax asset to be recovered.

Deferred tax is calculated at the tax rates that have been enacted or substantively enacted and which are expected to apply in the year

when the liability is settled or the asset is realised. Deferred tax is charged or credited to the consolidated income statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised

in other comprehensive income or directly in equity, respectively.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority and the Group intends

to settle its current tax assets and liabilities on a net basis.

The Group applies the initial recognition exemption model to account for any investment tax credits. Deferred tax is not recognised

for temporary differences relating to investment tax credits due to the availability of the initial recognition exemption.

The OECD Pillar 2 rules have been enacted in the United Kingdom and are effective for accounting periods beginning on or after

31 December 2023, except for the Undertaxed Payments Rule (UTPR) which is still in draft and expected to be effective after

31 December 2024 at the earliest. The Group is therefore within the enacted Pillar 2 rules from 1 January 2024. In light of recent

amendments to IAS 12, 'Income Taxes', which clarify that Pillar 2 related balances are not within the scope of IAS 12 for deferred tax

purposes, the Group has applied the exemption to recognising and disclosing information about deferred tax assets and liabilities arising

from the implementation of the Pillar 2 rules. The Group’s ongoing assessment of the OECD Pillar 2 rules is provided in note 7.

#### Earnings per share (EPS) (note

8)

Basic EPS

The basic EPS is calculated by dividing net profit attributable to ordinary shareholders by the weighted average number of Mondi plc

shares in issue during the year, net of own shares.

Diluted EPS

For diluted EPS, the weighted average number of Mondi plc ordinary shares in issue, net of own shares, is adjusted to assume conversion

of all dilutive potential ordinary shares. At present these only include share awards granted to employees. Potential or contingent share

issues are treated as dilutive when their conversion to shares would decrease EPS.

The weighted average number of ordinary shares in issue is the weighted number of shares in issue throughout the year and excludes

own shares held by employee benefit trusts. A share consolidation combined with a special dividend reduces the weighted average

number of ordinary shares in issue in the period when the transaction occurs from the date the special dividend is recognised.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 219 |
|  |  |  |

#### 35 Accounting policies



#### continued

EPS, if relevant, is presented separately for continuing operations and in total from continuing and discontinued operations on the face

of the consolidated income statement.

#### Non-current non-financial assets excluding goodwill, deferred tax and net retirement benefit assets

Property, plant and equipment (note 10)

Property, plant and equipment principally comprise land and buildings, plant and equipment, assets under construction and other.

Property, plant and equipment is stated at cost less accumulated depreciation and impairment. Land and assets under construction are

carried at cost less impairment. Cost includes site preparation, the purchase price of the equipment and directly attributable labour and

installation costs. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency

purchases of property, plant and equipment. Borrowing costs are capitalised on qualifying assets. The capitalisation of costs ceases when

the asset is in the location and condition necessary for it to be capable of operating in the manner intended by management. Start-up

and ongoing maintenance costs are recognised immediately as an expense.

Depreciation is charged to the consolidated income statement so as to write off the cost of assets, other than freehold land and assets

under construction, over their estimated useful lives on a straight-line basis to their estimated residual values of nil or scrap value.

Depreciation commences when the assets are ready for their intended use.

Residual values and useful lives are reviewed and adjusted, if appropriate, at least annually. An adjustment is made to the estimated useful

lives of assets where climate change is anticipated to have a material impact. Estimated useful lives range from 3 years to 25 years for

items of plant and equipment and other categories and up to a maximum of 40 years for buildings.

Insurance reimbursements for the loss or impairment of property, plant and equipment are recognised within other net operating

expenses in the consolidated income statement when receipt is virtually certain.

Leases (note 11)

To the extent that a right of control exists over an identified asset subject to a lease, a right-of-use asset, representing the Group’s  right

to use the underlying leased asset, is recognised within property, plant and equipment in the consolidated statement of financial position.

A corresponding lease liability, representing the Group’s obligation to make lease payments, is recognised, depending on the maturity

of the underlying lease payments, within short-term borrowings or medium- and long-term borrowings in the consolidated statement

of financial position at the commencement of the lease.

The right-of-use asset is measured initially at cost and includes the amount of initial measurement of the lease liability, any initial direct

costs incurred, including advance lease payments, and an estimate of the dismantling, removal and restoration costs required in terms

of the lease. Depreciation is charged to the consolidated income statement so as to depreciate the right-of-use asset from the

commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The lease term

shall include the period of an extension option where it is reasonably certain that the option will be exercised. Where the lease contains

a purchase option, the asset is written off over the useful life of the asset when it is reasonably certain that the purchase option will

be exercised.

The lease liability is measured at the present value of the future lease payments, including variable lease payments that depend on an index and

the exercise price of purchase options where it is reasonably certain that the option will be exercised, discounted using the interest rate implicit in

the lease, if readily determinable. If the implicit interest rate cannot be readily determined, the lessee’s incremental borrowing rate is used. Finance

charges are recognised within finance costs in the consolidated income statement over the period of the lease.

Lease expenses for leases with a duration of one year or less and low-value assets are not recognised in the consolidated statement of

financial position, and are charged to the consolidated income statement when incurred. Low-value assets are determined based on

quantitative criteria.

Intangible assets and R&D expenditure (note 13)

Intangible assets are measured initially at purchase consideration and are amortised on a straight-line basis over their estimated useful

lives. Estimated useful lives vary between 3 years and 10 years and are reviewed at least annually.

Research expenditure is expensed in the year in which it is incurred. Development costs are capitalised when the completion of the asset

is both commercially and technically feasible and are amortised on a systematic basis over the economic life of the related development.

Development costs are recognised immediately as an expense if they do not qualify for capitalisation.

Impairment of property, plant and equipment and intangible assets

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine

whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is

estimated. If the recoverable amount of an asset, or cash-generating unit (CGU) to which the asset relates, is less than its carrying

amount, the carrying amount of the asset, or CGU, is reduced to its recoverable amount and an impairment recognised as an expense.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 220 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

The recoverable amount of the asset, or CGU, is the higher of its fair value less costs to dispose and its value in use. In assessing value

in use, the estimated future cash flows generated by the asset are discounted to their present value using a pre-tax discount rate that

reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash

flows have not been adjusted. Where the asset does not generate cash flows that are independent from other assets, the Group

estimates the recoverable amount of the smallest CGU to which the asset belongs.

Where the underlying circumstances change such that a previously recognised impairment subsequently reverses, the carrying amount

of the asset, or CGU, is increased to the revised estimate of its recoverable amount. Such a reversal is limited to the carrying amount

that would have been determined (taking into account depreciation or amortisation in the intervening period) had no impairment been

recognised for the asset, or CGU, in prior years. A reversal of an impairment is recognised in the consolidated income statement.

Agriculture – owned forestry assets (note 14)

Owned forestry assets are biological assets measured at fair value less costs to sell, calculated by applying the expected selling price,

less costs to harvest and deliver, to the estimated volume of timber on hand at each reporting date. The fair value less costs to sell is

determined using a market-based approach. The estimated volume of timber on hand is determined based on the maturity profile of

the area under afforestation, the species, the geographic location, climate and other environmental considerations and excludes future

growth. The product of these is then adjusted for risks associated with forestry assets.

Changes in fair value are recognised in the consolidated income statement within other net operating expenses. At point of harvest, the

carrying value of forestry assets is transferred to inventory and recorded as a felling cost reduction to the fair value of forestry assets.

Directly attributable costs incurred during the year of biological growth and investments in standing timber are capitalised and presented

within cash flows from investing activities.

Investments in joint ventures (note 15)

A joint venture is an entity in which the Group holds a long-term interest with contractually agreed sharing of control over the strategic,

financial and operating decisions with one or more other venturers. Typically, the Group owns between 20% and 50% of the voting equity

of its joint ventures. Investments in joint ventures are accounted for using the equity method, after initially being recognised at cost in the

consolidated statement of financial position.

The Group’s share of the profit or loss of joint ventures is recognised in net profit/(loss) from joint ventures. Any impairment is presented

adjacent to the share of the joint venture’s results in impairment of investments in joint ventures in the consolidated income statement.

Non-current assets held for sale and discontinued operations (note 28)

Non-current assets, and disposal groups, are classified as held for sale if their carrying amount will be recovered through a sale

transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale

in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups), and its sale must

be highly probable. Non-current assets, and disposal groups, classified as held for sale are measured at the lower of carrying amount

and fair value less costs to sell from the date on which these conditions are met. The deferred tax assets, assets arising from employee

benefits and financial assets are specifically exempt from this requirement.

Any resulting impairment is reported through the consolidated income statement. From the time of classification as held for sale, the

assets are no longer depreciated or amortised. Interest and other expenses attributable to the liabilities of a disposal group classified

as held for sale continue to be recognised. Comparative amounts in the consolidated statement of financial position are not adjusted.

Discontinued operations are either a separate major line of business or geographical area of operations that have been disposed of or

are part of a single coordinated plan for disposal which satisfy the held for sale criteria. The discontinued operations' net profit or loss,

other comprehensive income or expense and cash flows for current and comparative periods are presented separately in the consolidated

income statement, the consolidated statement of comprehensive income and the consolidated statement of cash flows, including related

notes to these statements. Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are

presented separately from the other assets in the consolidated statement of financial position. The liabilities of a disposal group classified

as held for sale are presented separately from other liabilities in the consolidated statement of financial position.

#### Business combinations (note

25)

Identifiable net assets

The identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,

measured initially at their fair values on the acquisition date. If the initial accounting for assets and liabilities is incomplete by the end of

the reporting period in which the combination occurs, the Group reports provisional fair values. The measurement period ends no later

than 12 months from the acquisition date. Any non-controlling interest in the acquiree is recorded at the non-controlling interest’s

proportionate share of the acquired net assets.

Cost of a business combination

The cost of a business combination includes the fair value of assets provided, liabilities incurred or assumed and any equity instruments

issued by a Group entity, in exchange for control of an acquiree. The directly attributable costs associated with a business combination

are expensed as incurred and recognised within other net operating expenses into the consolidated income statement.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 221 |
|  |  |  |

#### 35 Accounting policies



#### continued

Goodwill (note 12)

Any excess of the consideration of the acquisition over the fair values of the identifiable net assets acquired is attributed to goodwill.

Goodwill is subsequently measured at cost less any impairment.

Impairment of goodwill

Goodwill acquired through business combinations is allocated to the group of CGUs that is expected to benefit from the synergies of the

combination and represents the lowest level at which goodwill is monitored for internal management purposes. The recoverable amount

of the group of CGUs to which goodwill has been allocated is tested for impairment annually in the fourth quarter of each financial year

and when events or changes in circumstances indicate that it may be impaired.

The recoverable amount of a group of CGUs is determined based on the higher of value in use or its fair value less costs of disposal.

Value-in-use calculations use cash flow projections based on financial budgets covering a three-year period that are based on the latest

forecasts for revenue and costs as approved by the Board. Projected revenues and costs are determined taking into consideration

relevant industry forecasts for individual product lines, climate change, internal management projections, historical performance and

announced industry capacity changes.

Cash flow projections beyond three years are based on internal management projections. Growth rates in the countries in which the

Group operates are determined with reference to published gross domestic product information, and for specific product lines are

determined with reference to published industry studies.

The discount rate is derived from the Group’s weighted average cost of capital using published market data and published borrowing

rates and adjusted for country risk and tax.

Any impairment is recognised in the consolidated income statement. Impairments of goodwill are not subsequently reversed.

#### Current non-financial assets

Inventories (note 16)

Inventories are valued at the lower of cost and net realisable value. Cost is determined on the first-in, first-out (FIFO) or weighted

average cost basis, as appropriate. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that

have been incurred in bringing the inventories to their present location and condition. Net realisable value is defined as the selling price

less any estimated costs to sell.

#### Equity instruments

Own shares (note 22)

The purchase by any Group entity of Mondi plc’s equity instruments results in the recognition of own shares. The consideration paid or

payable is deducted from equity. Where own shares are subsequently sold, reissued or otherwise disposed of, any consideration received

or receivable is included in equity attributable to the shareholders of Mondi plc, net of any directly attributable incremental transaction

costs and the related tax effects.

Dividend payments (note 9)

The dividend distributions to Mondi plc’s ordinary shareholders are recognised as a liability when the dividends are declared and

approved. Final dividends are accrued when approved by Mondi plc’s ordinary shareholders at its Annual General Meeting and interim

dividends are recognised when paid.

Share-based payments (note 23)

The Group operates a number of equity-settled, share-based compensation schemes. The fair value of the employee services received

in exchange for the grant of share awards is recognised concurrently as an expense and an adjustment to equity. The total amount to

be expensed over the vesting period is determined by reference to the fair value of the share awards granted, as adjusted for market

performance conditions and non-market vesting conditions. Vesting conditions are included in assumptions about the number of awards

that are expected to vest. At each reporting date, the Group revises its estimates of the number of share awards that are expected

to vest as a result of changes in non-market vesting conditions. It recognises the impact of the revision to original estimates, if any,

in the consolidated income statement, with a corresponding adjustment to equity.

#### Financial instruments (note

31)

Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the Group

becomes party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition

or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are

added to or deducted from the fair value of the financial assets or financial liabilities on initial recognition. Transaction costs directly

attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately

in the consolidated income statement.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 222 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

Cash and cash equivalents (note 27b)

Cash and cash equivalents comprise cash on hand, money market funds, demand deposits and short-term, highly liquid investments of a

maturity of three months or less from the date of acquisition that are readily convertible to a known amount of cash and that are subject

to an insignificant risk of changes in value. The money market funds are held at fair value through profit and loss, with the remaining

balance of cash and cash equivalents carried at amortised cost. Bank overdrafts are shown within short-term borrowings in current

liabilities in the consolidated statement of financial position. Cash and cash equivalents presented in the consolidated statement of cash

flows are net of overdrafts and include cash and cash equivalents classified as assets held for sale.

Trade receivables (note 17)

Trade receivables are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest rate

method, less an allowance for impairment.

Impairment of trade receivables (note 17)

A simplified lifetime expected credit loss (ECL) model is used to assess trade receivables for impairment. ECL is the present value of

all cash shortfalls over the expected life of a trade receivable. Expected credit losses are based on historical loss experience on trade

receivables, adjusted to reflect information about current economic conditions and reasonable and supportable forecasts of future

economic conditions. At the date of initial recognition, the credit losses expected to arise over the lifetime of a trade receivable are

recognised as an impairment.

Trade payables (note 18)

Trade payables are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest rate

method.

Borrowings (note 21)

Interest-bearing loans and overdrafts are initially recognised at fair value, net of direct transaction costs. Borrowings are subsequently

measured at amortised cost. Any difference between the proceeds, net of transaction costs, and the redemption value is recognised

in the consolidated income statement over the term of the borrowings using the effective interest rate method.

Borrowing costs (note 6)

Interest on borrowings directly relating to the acquisition, construction or production of qualifying assets is capitalised until such time as

the assets are substantially ready for their intended use. Where funds have been borrowed specifically to finance a project, the amount

capitalised represents the actual borrowing costs incurred. Where the funds used to finance a project form part of general borrowings,

the amount capitalised is calculated using a weighted average of rates applicable to relevant general borrowings of the Group during

the construction period.

All other borrowing costs are recognised in the consolidated income statement in the period in which they are incurred.

#### Derivative financial instruments and hedge accounting (note

31d)

The Group enters into forward and swap contracts in order to hedge its exposure to foreign exchange, interest rate and commodity

price risks.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and subsequently measured at fair value

in the consolidated statement of financial position within financial instruments, and are classified as current or non-current depending

on the maturity of the derivative.

Changes in the fair value of derivative financial instruments that are not formally designated in hedge relationships are recognised

immediately in the consolidated income statement and are classified within operating profit or net finance costs, depending on the type

of risk to which the derivative relates.

Cash flow hedges

The effective portion of changes in the fair value of derivative financial instruments that are designated as hedges of future cash flows

are recognised directly in other comprehensive income and accumulated in equity. The gain or loss relating to the ineffective portion is

recognised immediately in the consolidated income statement. If the cash flow hedge of a forecast transaction results in the recognition

of a non-financial asset, then, at the time the asset is recognised, the associated gains or losses on the derivative that had previously

been recognised in the Group’s cash flow hedge reserve in equity are included in the initial measurement of the asset. For hedges that

do not result in the recognition of a non-financial asset, amounts deferred in the Group’s cash flow hedge reserve in equity are recognised in

the consolidated income statement in the same period in which the hedged item affects profit or loss on a proportionate basis.

Hedge accounting is discontinued when the hedge relationship is revoked or the hedging instrument expires, is sold, terminated or

exercised or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss deferred in equity remains in equity and

is recognised in the consolidated income statement when the forecast transaction is ultimately recognised. If a hedge transaction is no

longer expected to occur, the net cumulative gain or loss deferred in equity is included immediately in the consolidated income statement.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 223 |
|  |  |  |

#### 35 Accounting policies



#### continued

#### Retirement benefits (note

24)

The Group operates post-retirement defined contribution plans, post-retirement defined benefit pension plans and post-retirement

medical plans for many of its employees.

Defined contribution plans

For defined contribution plans, the amount charged to the consolidated income statement is the contributions paid or payable during

the financial year.

Defined benefit pension plans and post-retirement medical plans

For defined benefit pension and post-retirement medical plans, actuarial valuations are performed at each financial year end using the

projected unit credit method. The average discount rate for the plans’ liabilities is based on investment-grade-rated corporate bonds or

similar government bonds of a suitable duration and currency. Plans’ assets are measured using market values at the end of the financial year.

The net retirement benefits liability recognised in the consolidated statement of financial position represents the present value of the

defined benefit liability as reduced by the fair value of any plan assets.

Any increase in the present value of plan liabilities expected to arise from employee service during the year is charged to personnel costs

as service costs. Past service costs resulting from plan amendments or curtailments and gains or losses on settlements are charged to

personnel costs. A net interest expense or net interest income is calculated by applying the discount rate, on a per plan basis, to the net

defined benefit liability or asset and recognised in the consolidated income statement within finance costs.

Remeasurements comprising actuarial gains and losses and the return on plan assets (after recognising the net finance charge) are

charged or credited to equity in other comprehensive income, net of deferred tax, in the financial year in which they occur.

Remeasurements recorded in other comprehensive income are not recycled to the consolidated income statement, but those amounts

recognised in other comprehensive income may be transferred within equity.

#### Provisions (note

19)

Provisions are recognised when the Group has a present obligation as a result of a past event, which it is probable it will be required to

settle. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the reporting date,

and are discounted to present value using country-specific discount rates for periods matching the duration of the underlying liability

where the effect of discounting is material.

#### New accounting policies, early adoption and future requirements

Amendments to published Standards effective during 2023

The following new Standards and the amendments to Standards have been adopted for the financial year beginning on 1 January 2023,

and have had no significant impact on the Group’s results:

– IFRS 17 – Insurance Contracts, including Amendments to IFRS 17

– Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

– Amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2 – Disclosure of Accounting Policies

– Amendments to IAS 12 – Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction

– Amendments to IAS 12 – Income Taxes – International Tax Reform – Pillar 2 Model Rules

Amendments to published Standards effective for the financial year beginning on 1 January 2024

The following amendments to Standards will be effective for the financial year beginning on 1 January 2024. The amendments are not

expected to have a significant impact on the Group’s results:

– Amendments to IAS 1 – Presentation of Financial Statements – Non-current Liabilities with Covenants

– Amendments to IAS 1 – Presentation of Financial Statements – Classification of Liabilities as Current or Non-current

– Amendments to IFRS 16 – Leases – Lease Liability in a Sale and Leaseback

– Amendments to IAS 7 and IFRS 7 – Statement of Cash Flows and Financial instruments: Disclosures - Supplier Finance Arrangements

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 224 |
|  |  |  |

#### Notes to the consolidated financial statements

for the

#### year ended 31 December 2023



#### continued

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| € million | Notes | 2023 | 2022 |
| Fixed assets |  |  |  |
| Tangible assets | 5 | 3 | 3 |
| Shares in Group undertakings | 6 | 3,604 | 3,604 |
| Current assets |  |  |  |
| Debtors: due within one year | 7 | 1,138 | 606 |
| Current liabilities |  |  |  |
| Creditors: amounts falling due within one year |  | (10) | (10) |
| Net current assets |  | 1,128 | 596 |
| Total assets less current liabilities |  | 4,735 | 4,203 |
| Creditors: amounts falling due after more than one year |  | (3) | (4) |
| Provisions for liabilities |  | (2) | (1) |
| Net assets |  | 4,730 | 4,198 |
|  |  |  |  |
| Capital and reserves |  |  |  |
| Called-up share capital | 8 | 97 | 97 |
| Profit and loss account |  | 3,951 | 3,421 |
| Merger reserve | 8 | 637 | 637 |
| Capital redemption reserve | 8 | 29 | 29 |
| Share-based payments reserve | 8 | 16 | 14 |
| Total shareholders’ funds |  | 4,730 | 4,198 |

Mondi plc reported a  profit  of €876 million (2022 : profit  of  € 550 million) for the year ended 31 December 2023.

The balance sheet and statement of changes in equity of  Mondi plc  and related notes 1  to  11  on pages [225](#i47a6727b8bad4fe28addb4dae187e293_181)-[234](#ibcbad7ae258f4253ae62fddefece0041_5049) were approved

by the Board  and authorised for issue on 21 February 2024 and were signed on its behalf by:

#### Andrew King

#### Mike Powell

Director Director

Mondi plc  company registered number: 6209386

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 225 |
|  |  |  |

#### Mondi plc parent company balance sheet

as at

#### 31 December 2023

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
| € million | Called-up  share capital | Profit and loss  account | Merger  reserve | Capital  redemption  reserve | Share-based  payments reserve | Total  equity |
| At 1 January 2022 | 97 | 3,189 | 637 | 29 | 13 | 3,965 |
| Total comprehensive income for the year | — | 550 | — | — | — | 550 |
| Dividends | — | (321) | — | — | — | (321) |
| Mondi share schemes’ charge | — | — | — | — | 11 | 11 |
| Issue of shares under employee share  schemes | — | 10 | — | — | (10) | — |
| Purchases of own shares | — | (7) | — | — | — | (7) |
| At 31 December 2022 | 97 | 3,421 | 637 | 29 | 14 | 4,198 |
| Total comprehensive income for the year | — | 876 | — | — | — | 876 |
| Dividends (see note 9 of the Group's  consolidated financial statements) | — | (345) | — | — | — | (345) |
| Mondi share schemes’ charge (see note 3) | — | — | — | — | 9 | 9 |
| Issue of shares under employee share  schemes | — | 7 | — | — | (7) | — |
| Purchases of own shares | — | (8) | — | — | — | (8) |
| At 31 December 2023 | 97 | 3,951 | 637 | 29 | 16 | 4,730 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 226 |
|  |  |  |

#### Mondi plc parent company statement of changes in equity

#### for the year ended

#### 31 December 2023

#### 1 Accounting policies

#### Basis of preparation

Mondi plc meets the definition of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by the Financial Reporting

Council. Accordingly, the financial statements have been prepared in accordance with  Financial Reporting Standard 101, ‘Reduced

Disclosure Framework’ (FRS 101 ), as issued by the Financial Reporting Council and the  Companies Act 2006.

As permitted by  FRS 101 ,  Mondi plc  has taken advantage of the disclosure exemptions available under that standard in relation to

share‑based payments, financial instruments, capital management, presentation of comparative information in respect of certain items,

presentation of a cash flow statement, standards not yet effective, impairment of assets and related party transactions.

Where required, equivalent disclosures are given in the consolidated Group financial statements of Mondi plc, which are publicly available.

The results, assets and liabilities of Mondi plc  are included in the publicly available consolidated Group financial statements.

Mondi plc has made use of the exemption from presenting a profit and loss account, in accordance with Section 408 of the Companies

Act 2006.

The financial statements have been prepared on a going concern basis. The assessment of going concern is disclosed in the Strategic

report as part of the viability statement under the heading Going concern on page [81](#i3fce26f9c2c6487a8a912e195c1d5e31_104605), which is incorporated by reference into these

financial statements.

The financial statements are prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration

given in exchange for the assets. The principal accounting policies adopted are described below. They have all been applied consistently

throughout the year and the preceding year.

#### Principal accounting policies

The principal accounting policies applied by Mondi plc are the same as those presented in notes 1 and 35 to the Group’s consolidated

financial statements, to the extent that the Group’s transactions and balances are applicable to the company financial statements.

Principally, the accounting policies which are not directly relevant to the Mondi plc parent company financial statements are those relating

to consolidation accounting, the recognition and subsequent measurement of goodwill and accounting in hyperinflationary economies.

The accounting policy, which is additional to those applied by the Group, is stated as follows:

Shares in Group undertakings

Shares in Group undertakings are stated at cost, less, where appropriate, provisions for impairment.

Impairment reviews are performed when there is an indicator that the carrying value of the shares in Group undertakings could exceed

their recoverable amounts based on their value in use or fair value less costs to dispose. Value in use is calculated by discounting future

expected cash flows. These calculations use cash flow projections based on Board-approved budgets and forecasts which reflect

management’s current experience and future expectations of the markets in which the Group undertaking operates.

Costs incremental and directly attributable to the acquisition of investments are capitalised.

Critical accounting judgements and significant accounting estimates

The preparation of the financial statements of Mondi plc includes the use of estimates and assumptions. Although the estimates used are

based on management’s best information about current circumstances and future events and actions, actual results may differ from those

estimates. No critical accounting judgements or significant accounting estimates were identified.

#### 2 Auditors' remuneration and employee information

Disclosure of the audit fees payable to the auditors for the audit of Mondi plc’s  financial statements is set out in note 4 of the Group’s

consolidated  financial statements.

Mondi plc  had 28 employees during the year ( 2022: 27).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 227 |
|  |  |  |

#### Notes to the Mondi plc parent company financial statements

#### for the year ended

#### 31 December 2023

#### 3 Share-based payments

The share schemes and the underlying assumptions used to estimate the associated fair value charge are set out in note 23

of the  Group’s   consolidated  financial statements.

#### 4 Deferred tax

No deferred tax asset is recognised on gross temporary differences of € 21 million ( 2022 :  € 15 million ) relating to share-based payment

arrangements. Mondi plc  has tax losses of € 197 million  (2022 : €198 million) in respect of which no deferred tax asset has been

recognised due to the low probability of future taxable profit streams or gains against which these could be utilised. Although Mondi plc

receives dividend income from its subsidiaries, this dividend income is exempt from corporation tax.

#### 5 Tangible assets

Mondi plc entered into an office building lease agreement for a total term of 10 years from 2 August 2021 and recognised a right-of-use

asset of  €3 million  (2022 : € 3 million ) accordingly. Corresponding lease liabilities are included in creditors and further split by maturity as

presented in the balance sheet. The lease may only be terminated by Mondi plc after 5 years.  Mondi plc  does not intend to exercise the

termination option, and thus it was not considered in the calculation of the right-of-use asset.

#### 6 Shares in Group undertakings

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Unlisted |  |  |
| Shares at cost | 3,721 | 3,721 |
| Accumulated impairment | (117) | (117) |
| Total shares in Group undertakings | 3,604 | 3,604 |

The shares in Group undertakings are in Mondi Investments Limited (incorporated in the UK), a wholly owned subsidiary which acts as an

investment holding company, and Mondi South Africa (Pty) Limited (incorporated in South Africa), a wholly owned subsidiary which

manages forestry operations and manufactures pulp, uncoated fine paper and containerboard.

#### 7 Debtors: due within one year

Amounts held on deposit in a cash pool facility with a subsidiary of € 1,131 million (2022 :  € 600 million) are included in debtors: due within

one year. No provision on expected credit losses is recognised  at 31 December 2023 (2022:  €nil).  The carrying amount of such deposits

held at amortised cost approximated their fair value at 31 December 2023 and at 31 December 2022.

#### 8 Capital and reserves

Full disclosure of the called-up share capital of Mondi plc  is set out in note 22 of the  Group’s   consolidated  financial statements.

The merger reserve was recognised in respect of the simplification of the dual-listed company structure in 2019.

The capital redemption reserve is a statutory, non-distributable reserve into which amounts are transferred following the redemption

or purchase of own shares out of distributable profits or, in certain circumstances, from the proceeds of a fresh issue of shares.

The share-based payment reserve is used to recognise the grant date fair value of options issued to employees but not exercised

and the grant date fair value of shares awarded to employees but not yet vested.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 228 |
|  |  |  |

#### Notes to the Mondi plc parent company financial statements

#### for the year ended

#### 31 December 2023



#### continued

#### 9 Financial guarantees

Mondi plc has issued financial guarantees in respect of the UK pension schemes of its subsidiaries, obligations incurred in the ordinary course of

business and the borrowings of other  Group undertakings. The likelihood of these financial guarantees being called is considered to be remote, and

therefore the estimated financial effect of issuance is € nil (2022: € nil ). The fair value of these issued financial guarantees is deemed to be immaterial.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| € million | 2023 | 2022 |
| Pension scheme guarantees | 69 | 79 |
| Guarantees of obligations of subsidiaries of Mondi plc |  |  |
| Incurred in the ordinary course of business | 4 | 4 |
| In favour of banks and bondholders | 3,061 | 3,037 |
| Total exposure from financial guarantees | 3,134 | 3,120 |

The following subsidiaries have taken advantage of an exemption from audit under Section 479A of the Companies Act 2006.

As the ultimate parent,  Mondi plc has provided a statutory guarantee for any outstanding liabilities of those subsidiaries. All subsidiary

undertakings have been included in the consolidation of the Group.

– Mondi Consumer Goods Packaging UK Limited (registered number: 05188170)

– Mondi Packaging Limited (registered number: 01846191)

– Mondi Packaging UK Holdings Limited (registered number: 03714255)

– Mondi Scunthorpe Limited (registered number: 01446927)

#### 10 Events occurring after 31 December 2023

Aside from the final ordinary dividend proposed for 2023 , included in note 9  of the  Group’s   consolidated  financial statements, there has

been the following material reportable event since 31 December 2023:

On 13 February 2024, the Group returned the net proceeds from the sale of the Group's Russian assets to shareholders by way of

a special dividend of €1.60 per existing ordinary share. In addition, in order to maintain the comparability, so far as possible, of Mondi plc’s

share price before and after the special dividend, the special dividend was accompanied by a share consolidation, which took effect on

29 January 2024, resulting in shareholders receiving 10 new ordinary shares for every 11 existing ordinary shares. See notes 9 and 22

of the Group’s consolidated financial statements for further details.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 229 |
|  |  |  |

#### 11 List of subsidiaries, associated undertakings and other significant holdings

The subsidiaries, associated undertakings and other significant holdings of Mondi plc at 31 December 2023 are set out below.

Except where noted, all shares are held indirectly through a subsidiary or associated undertaking and the shares held are ordinary shares.

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| Austria | | | |
| Mondi AG | Marxergasse 4A, 1030  Vienna | Holding, Corporate | 100.00 |
| Mondi Coating  Zeltweg GmbH | Bahnhofstrasse 3,  8740 Zeltweg | Production, Flexible  Packaging | 100.00 |
| Mondi Consumer  Packaging GmbH | Marxergasse 4A, 1030  Vienna | Holding, Flexible  Packaging | 100.00 |
| Mondi Corrugated  Holding Österreich  GmbH | Marxergasse 4A, 1030  Vienna | Holding, Corrugated  Packaging | 100.00 |
| Mondi Corrugated  Services GmbH | Marxergasse 4A, 1030  Vienna | Service, Corrugated  Packaging | 100.00 |
| Mondi Engineered  Materials GmbH | Marxergasse 4A, 1030  Vienna | Holding, Flexible  Packaging | 100.00 |
| Mondi Finance  Europe GmbH | Marxergasse 4A, 1030  Vienna | Service, Corporate | 100.00 |
| Mondi FlexPack  Trading GmbH | Marxergasse 4A, 1030  Vienna | Distribution, Flexible  Packaging | 100.00 |
| Mondi Frantschach  GmbH | Frantschach 5,  9413 St. Gertraud | Production, Flexible  Packaging | 100.00 |
| Mondi Grünburg  GmbH | Steyrtalstrasse 5,  4594 Grünburg | Production, Corrugated  Packaging | 100.00 |
| Mondi Holdings  Austria GmbH | Marxergasse 4A, 1030  Vienna | Holding, Corporate | 100.00 |
| Mondi Industrial  Bags GmbH | Marxergasse 4A, 1030  Vienna | Holding, Flexible  Packaging | 100.00 |
| Mondi Korneuburg  GmbH | Erwin Schrödinger  Strasse 2, 2100,  Korneuburg | Production, Flexible  Packaging | 100.00 |
| Mondi Neusiedler  GmbH & Co KG1 | Theresienthalstrasse 50,  3363 Ulmerfeld-  Hausmening | Production, Uncoated  Fine Paper | 100.00 |
| Mondi Neusiedler  Verwaltungs GmbH2 | Theresienthalstrasse 50,  3363 Ulmerfeld-  Hausmening, Austria | Service, Uncoated Fine  Paper | 100.00 |
| Mondi Oman  Holding GmbH | Marxergasse 4A, 1030  Vienna | Holding, Flexible  Packaging | 70.00 |
| Mondi Paper Sack  Zeltweg GmbH | Bahnhofstrasse 3,  8740 Zeltweg | Distribution, Flexible  Packaging | 100.00 |
| Mondi Paper Sales  GmbH | Marxergasse 4A, 1030  Vienna | Distribution, Corrugated  Packaging, Flexible  Packaging, Uncoated  Fine Paper | 100.00 |
| Mondi Release Liner  Austria GmbH | Waidhofnerstrasse 11,  3331 Hilm | Production, Flexible  Packaging | 100.00 |
| Mondi Styria GmbH | Bahnhofstrasse 3,  8740 Zeltweg | Production, Flexible  Packaging | 100.00 |
| Mondi Uncoated  Fine & Kraft Paper  GmbH | Marxergasse 4A, 1030  Vienna | Holding, Corrugated  Packaging, Flexible  Packaging, Uncoated  Fine Paper | 100.00 |
| Papierholz Austria  GmbH | Frantschach 5,  9413 St. Gertraud | Service, Flexible  Packaging | 25.00 |
| Belgium | | | |
| Mondi Poperinge  N.V. | Nijverheidslaan 11,  8970 Poperinge | Production, Flexible  Packaging | 100.00 |
|  |  |  |  |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| Bulgaria | | | |
| Mondi Stambolijski  E.A.D | 1 Zavodska Street,  Stambolijski 4210,  Plovdiv Region | Production, Flexible  Packaging | 100.00 |
| Canada | | | |
| Mondi Hinton Inc. | 600-12220 Stony Plain Rd  NW, Edmonton AB T5N  3Y4 | Dormant, Flexible  Packaging | 100.00 |
| Colombia | | | |
| Mondi Cartagena  SAS | LT No CA-4 Zona Franca  la Candelaria, Sector  Cospique, Zona Industrial  Mamonal, Cartagena,  Bolivar | Production, Flexible  Packaging | 100.00 |
| Côte d'Ivoire | | | |
| Mondi Abidjan S.A. | Zone Industrielle de  Yopougon 01, Abidjan,  BP 5676 | Production, Flexible  Packaging | 50.00 |
| Czech Republic | | | |
| EURO WASTE a.s. | Litoměřická 272, 41108  Štětí | Service, Flexible  Packaging | 100.00 |
| Labe Wood s.r.o.3 | Litoměřická 272, 41108  Štětí | Production, Flexible  Packaging | 24.99 |
| Mondi Bags Štětí  a.s. | Litoměřická 272, 41108  Štětí | Production, Flexible  Packaging | 100.00 |
| Mondi Bupak s.r.o. | Papírenská 41, 37052  České Budějovice | Production, Corrugated  Packaging | 100.00 |
| Mondi Coating Štětí  a.s. | Litoměřická 272, 41108  Štětí | Production, Flexible  Packaging | 100.00 |
| Mondi Štětí a.s. | Litoměřická 272, 41108  Štětí | Production, Flexible  Packaging | 100.00 |
| Mondi Štětí White  Paper s.r.o | Litoměřická 272, 41108  Štětí | Production, Flexible  Packaging | 100.00 |
| Wood & Paper a.s.3 | c.p. 138, 66491 Hlína | Service, Flexible  Packaging | 46.50 |
| Egypt | | | |
| Mondi Cairo for  Packaging Material  S.A.E. | El-motawer El-turky  (Polaris) Plots No. 7, 6th  of October, Giza | Production, Flexible  Packaging | 100.00 |
| Suez Bags  Company (S.A.E.) | K30 Maadi, Ein Soukhna  Road, 1002 Cairo | Production, Flexible  Packaging | 98.30 |
| Finland | | | |
| Harvestia Oy | Selluntie 142, 70420  Kuopio | Service, Corrugated  Packaging | 100.00 |
| Mondi Finland  Services Oy | Selluntie 142, 70420  Kuopio | Holding, Corrugated  Packaging | 100.00 |
| Mondi Powerflute  Oy | Selluntie 142, 70420  Kuopio | Production, Corrugated  Packaging | 100.00 |
| France | | | |
| Mondi Gournay Sarl | 22 Avenue Pierre 1er de  Serbie 75016 Paris | Service, Flexible  Packaging | 100.00 |
| Mondi Lembacel  SAS | 11 rue de Reims,  51490 Bétheniville | Production, Flexible  Packaging | 100.00 |
| Mondi Paper Sales  France Sarl | 22 Avenue Pierre 1er de  Serbie, 75016 Paris | Distribution, Corrugated  Packaging | 100.00 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 230 |
|  |  |  |

#### Notes to the Mondi plc parent company financial statements

#### for the year ended

#### 31 December 2023



#### continued

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| Germany | | | |
| Mondi Bad  Rappenau GmbH | Wilhelm-Hauff-Strasse  41, 74906 Bad Rappenau | Production, Corrugated  Packaging | 100.00 |
| Mondi Consumer  Packaging  International GmbH | Wielandstrasse 2,  33790 Halle | Holding, Flexible  Packaging | 100.00 |
| Mondi Eschenbach  GmbH | Am Stadtwald 14,  92676 Eschenbach | Production, Corrugated  Packaging | 100.00 |
| Mondi Estonteco  GmbH | Wielandstrasse 2,  33790 Halle | Dormant, Corrugated  Packaging | 100.00 |
| Mondi Halle GmbH | Wielandstrasse 2,  33790 Halle | Production, Flexible  Packaging | 100.00 |
| Mondi Hammelburg  GmbH | Thüringenstrasse 1-3,  97762 Hammelburg | Production, Flexible  Packaging | 100.00 |
| Mondi Holding  Deutschland GmbH | Wielandstrasse 2,  33790 Halle | Holding, Corporate | 100.00 |
| Mondi Inncoat  GmbH | Angererstrasse 25,  83064 Raubling | Production, Flexible  Packaging | 100.00 |
| Mondi Jülich GmbH | Rathausstrasse 29,  52428 Jülich | Production, Flexible  Packaging | 100.00 |
| Mondi Paper Sales  Deutschland GmbH | Schauenburgerstraße 49,  20095, Hamburg,  Germany | Distribution, Corrugated  Packaging | 100.00 |
| Mondi Sendenhorst  GmbH | Thüringenstrasse 1-3,  97762 Hammelburg | Distribution, Flexible  Packaging | 100.00 |
| Mondi Trebsen  GmbH | Erich-Hausmann-Strasse  1, 04687 Trebsen | Production, Flexible  Packaging | 100.00 |
| Mondi Wellpappe  Ansbach GmbH | Robert-Bosch-Strasse 3,  91522 Ansbach | Production, Corrugated  Packaging | 100.00 |
| wood2M GmbH3 | Hauptstrasse 16, 07366  Rosenthal am Rennsteig | Service, Corporate | 50.00 |
| Greece | | | |
| Mondi Thessaloniki  A.E. | Sindos Industrial Zone –  Block 18, 57022  Thessaloniki | Distribution, Flexible  Packaging | 100.00 |
| Hungary | | | |
| Mondi Bags  Hungária Kft. | Tünde u. 2, 4400  Nyíregyháza | Production, Flexible  Packaging | 100.00 |
| Mondi Békéscsaba  Kft. | Tevan Andor u. 2, 5600  Békéscsaba | Production, Flexible  Packaging | 100.00 |
| Mondi Szada Kft. | Vasút u. 13, 2111 Szada | Production, Flexible  Packaging | 100.00 |
| Iraq | | | |
| Mondi Kaso Iraq  Industrial Bags Ltd. | Takya, Bazian,  Sulaimaniyah | Production, Flexible  Packaging | 34.55 |
| Italy | | | |
| Mondi Duino S.r.l.2 | S.Giovanni di Duino, 24/  D, 34011, Duino Aurisina  (TS) | Production, Corrugated  Packaging | 100.00 |
| Mondi Gradisac S.r.l. | Via dell´Industria 11, 34072  Gradisca d´Isonzo, Gorizia | Production, Flexible  Packaging | 100.00 |
| Mondi Italia S.r.l. | Via Balilla 32, 24058  Romano di Lombardia,  Bergamo | Production, Flexible  Packaging | 100.00 |
| Mondi Padova S.r.l. | Via Mazzini 21, 35010 San  Pietro in Gu, Padua | Production, Flexible  Packaging | 100.00 |
| Mondi Paper Sales  Italia S.r.l. | Via A. Locatelli 2,  20124 Milano | Distribution, Corrugated  Packaging, Flexible  Packaging, Uncoated  Fine Paper | 100.00 |
| Mondi Silicart S.r.l. | Via Mazzini 21, 35010 San  Pietro in Gu, Padua | Service, Flexible  Packaging | 100.00 |
| Mondi Tolentino  S.r.l. | Via Giovanni Falcone 1,  62029 Tolentino,  Macerata | Production, Flexible  Packaging | 100.00 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| NATRO TECH S.r.l. | Via Copernico snc, 24053  Brignano Gera d'Adda | Service, Flexible  Packaging | 100.00 |
| Powerflute Italia S.r.l.  in liquidazione | Via Giacomo Matteotti 2,  21013 Gallarate | Dormant, Corrugated  Packaging | 100.00 |
| Japan | | | |
| Mondi Tokyo KK | 7th floor 14-5, Akasaka  2-chrome, Minato-ku,  Tokyo | Service, Flexible  Packaging | 100.00 |
| Jordan | | | |
| Jordan Paper Sacks  Co. Ltd. | Al Salt, Industrial Area,  P.O. Box 119, 19374, Ain  Al Basha | Production, Flexible  Packaging | 67.74 |
| Republic of Korea | | | |
| Krauzen Co., Ltd. | 48-29, 439 Hongandaero,  Dongang-gu, Anyang-si,  Gyunggi-do | Dormant, Flexible  Packaging | 100.00 |
| Mondi KSP Co., Ltd. | 48-29, 439 Hongandaero,  Dongang-gu, Anyang-si,  Gyunggi-do | Distribution, Flexible  Packaging | 95.00 |
| Lebanon | | | |
| Mondi Lebanon SAL | 7th Floor, Bloc C, Kassis  Building, Antelias  Highway, Antelias | Production, Flexible  Packaging | 66.00 |
| Luxembourg | | | |
| Mondi Packaging  S.à r.l. | 1, rue Hildegard von  Bingen, 1282 | Holding, Corporate | 100.00 |
| Mondi S.à r.l. | 1, rue Hildegard von  Bingen, 1282 | Holding, Corporate | 100.00 |
| Mondi Services S.à r.l. | 1, rue Hildegard von  Bingen, 1282 | Holding, Corporate | 100.00 |
| Malaysia | | | |
| Mondi Kuala Lumpur  Sdn. Bhd.4 | Lot Nos. PT 5034 &  5036, Jalan Teluk Datuk  28/40, 40000 Shah Alam,  Selangor | Production, Flexible  Packaging | 100.00 |
| Mexico | | | |
| Caja de Ahorro de  Personal de Mondi  Mexico Servicios  A.C. | Av. San Nicolás No. 249,  Colonia Cuauhtémoc,  San Nicolás de los Garza,  Nuevo Léon, 66450 | Service, Flexible  Packaging | 100.00 |
| Mondi Mexico S. de  R.L. de C.V. | Av. San Nicolás No. 249,  Colonia Cuauhtémoc,  San Nicolás de los Garza,  Nuevo Léon, 66450 | Production, Flexible  Packaging | 100.00 |
| Morocco | | | |
| Ensachage Moderne  Sarl | Km 16, Route d´El Jadida,  Casablanca | Dormant, Flexible  Packaging | 80.64 |
| Mondi Tanger S.A. | Lot N 28 Zone  D'exploitation de la Zone  Franche, D.Exploitation  de Tanger Automobile  Cite Dite Tac 2, Tanger,  Jouamaa Province  Fahsanjra | Production, Flexible  Packaging | 100.00 |
| Pap Sac Maghreb  SA | Km 16, Route d´El Jadida,  Casablanca | Production, Flexible  Packaging | 80.64 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 231 |
|  |  |  |

#### 11 List of subsidiaries, associated undertakings and other significant holdings



#### continued

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| Netherlands | | | |
| Mondi Coating B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Flexible  Packaging | 100.00 |
| Mondi Consumer  Bags & Films B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Flexible  Packaging | 100.00 |
| Mondi Consumer  Bags & Films  Benelux B.V. | Fort Willemweg 1, 6219  PA Maastricht | Distribution, Flexible  Packaging | 100.00 |
| Mondi Corrugated  B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Corrugated  Packaging | 100.00 |
| Mondi Corrugated  Poland B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Corrugated  Packaging | 100.00 |
| Mondi Heerlen B.V. | Imstenraderweg 15, 6422  PM Heerlen | Production, Flexible  Packaging | 100.00 |
| Mondi Industrial  Bags B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Flexible  Packaging | 100.00 |
| Mondi International  Holdings B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Corrugated  Packaging | 100.00 |
| Mondi Maastricht  N.V. | Fort Willemweg 1, 6219  PA Maastricht | Production, Flexible  Packaging | 100.00 |
| Mondi MENA B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Flexible  Packaging | 70.00 |
| Mondi Packaging  Paper B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Flexible  Packaging | 100.00 |
| Mondi Paper Sales  Netherlands B.V. | Bruynvisweg 14, 1531 AZ  Wormer | Distribution, Corrugated  Packaging, Flexible  Packaging, Uncoated  Fine Paper | 100.00 |
| Mondi SCP  Holdings B.V. | Fort Willemweg 1, 6219  PA Maastricht | Holding, Uncoated  Fine Paper | 100.00 |
| Norway | | | |
| Mondi Moss AS | Rådmann Sirasvei 1,  1712 Grålum | Distribution, Flexible  Packaging | 100.00 |
| Oman | | | |
| Mondi Oman LLC | Rusayl Industrial Estate,  Road 20, P.O. Box 20,  124, Muscat Governorate,  Rusayl | Production, Flexible  Packaging | 49.00 |
| Poland | | | |
| Agromasa Sp. z o.o. | ul. Bydgoska 1, 86-100  Świecie | Service, Corrugated  Packaging | 100.00 |
| Fredonia  Investments Sp.  z o.o. | ul. Bydgoska 1, 86-100  Świecie | Service, Corrugated  Packaging | 100.00 |
| Mondi Bags Mielec  Sp. z o.o. | ul. Wojska Polskiego 12,  39-300 Mielec | Production, Flexible  Packaging | 100.00 |
| Mondi Bags Świecie  Sp. z o.o. | ul. Bydgoska 12, 86-100  Świecie | Production, Flexible  Packaging | 100.00 |
| Mondi BZWP Sp.  z o.o. | ul. Zamenhofa 36, 57-500  Bystrzyca Kłodzka | Production, Corrugated  Packaging | 100.00 |
| Mondi Corrugated  Świecie Sp. z o.o. | ul. Tucholska 9, 86-100  Świecie | Production, Corrugated  Packaging | 100.00 |
| Mondi Dorohusk Sp.  z o.o. | ul. Swierkowa 8, 22-174  Brzezno | Production, Corrugated  Packaging | 100.00 |
| Mondi Krapkowice  Sp. z o.o. | ul. Opolska 103, 47-300,  Krapkowice | Production, Flexible  Packaging | 100.00 |
| Mondi Poznań Sp.  z o.o. | ul. Wyzwolenia 34/36,  62-070 Dopiewo | Production, Flexible  Packaging | 100.00 |
| Mondi Recykling  Polska Sp. z o.o. | ul. Bydgoska 1, 86-100  Świecie | Service, Corrugated  Packaging | 100.00 |
| Mondi Simet Sp.  z o.o. | Grabonóg 77, 63-820  Piaski | Production, Corrugated  Packaging | 100.00 |
| Mondi Solec Sp.  z o.o. | Solec 143, 05-532  Baniocha | Production, Flexible  Packaging | 100.00 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| Mondi Świecie S.A. | ul. Bydgoska 1, 86-100  Świecie | Production, Corrugated  Packaging | 100.00 |
| Mondi Szczecin Sp.  z o.o. | ul. Sloneczna 20, 72-123  Kliniska Wielkie | Production, Corrugated  Packaging | 100.00 |
| Mondi Warszawa  Sp. z o.o. | ul. Tarczyńska 98, 96-320  Mszczonów | Production, Corrugated  Packaging | 100.00 |
| Mondi Wierzbica  Sp. z o.o. | Kolonia Rzecków 76,  26-680 Wierzbica | Production, Flexible  Packaging | 100.00 |
| PLWD Sp. z o.o.3 | ul. Bydgoska 1, 86-100  Świecie | Service, Corrugated  Packaging | 50.67 |
| Świecie Rail Sp.  z o.o. | ul. Bydgoska 1, 86-100  Świecie | Service, Corrugated  Packaging | 100.00 |
| Romania | | | |
| Mondi Bucharest  S.R.L. | Olympia Tower, 25-29,  Decebal Blvd, 3rd Floor  (Level 4), 030971  Bucharest | Distribution, Flexible  Packaging | 100.00 |
| Senegal | | | |
| Mondi Senegal S.A.2 | Zone Economique  speciale integree.  Commune de Diass.  Thies - Senegal | Production, Flexible  Packaging | 70.00 |
| Serbia | | | |
| Mondi Šabac d.o.o.  Šabac | Severna 4 No.2, 15000  Šabac | Production, Flexible  Packaging | 100.00 |
| Singapore | | | |
| Mondi Packaging  Paper Sales Asia  Pte. Ltd. | 77 Robinson Road,  #13-00, Robinson 77,  Singapore, 068896 | Distribution, Flexible  Packaging | 100.00 |
| Slovakia | | | |
| East Paper, spol.  s.r.o. 3 | Rastislavova 98,  04346 Kosice | Service, Corrugated  Packaging | 26.01 |
| Mondi SCP, a.s. | Tatranská cesta 3,  03417 Ružomberok | Production, Corrugated  Packaging, Flexible  Packaging, Uncoated  Fine Paper | 51.00 |
| Obaly SOLO, s.r.o | Tatranská cesta 3,  03417 Ružomberok | Holding, Uncoated Fine  Paper | 51.00 |
| RECOPAP, s.r.o.3 | Bratislavska 18, 90051  Zohor | Service, Corrugated  Packaging | 25.50 |
| Slovpaper  Collection s.r.o. | Tatranská cesta 3,  03417 Ružomberok | Service, Corrugated  Packaging | 51.00 |
| Slovpaper Recycling  s.r.o. | Tatranská cesta 3,  03417 Ružomberok | Service, Corrugated  Packaging | 51.00 |
| SLOVWOOD  Ružomberok a.s. | Tatranská cesta 3,  03417 Ružomberok | Service, Uncoated Fine  Paper | 33.66 |
| STRÁŽNA SLUŽBA  VLA-STA s.r.o. | Tatranská cesta 3,  03417 Ružomberok | Service, Uncoated  Fine Paper | 51.00 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 232 |
|  |  |  |

#### Notes to the Mondi plc parent company financial statements

#### for the year ended

#### 31 December 2023



#### continued

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| South Africa | | | |
| Arctic Sun Trading  17 Proprietary  Limited5 | 380 Old Howick Road,  Mondi House, Hilton,  3245 | Distribution, Uncoated  Fine Paper | 66.67 |
| Bongani  Development Close  Corporation | Merebank Mill,  Travencore Drive,  Merebank, 4052 | Dormant, Uncoated  Fine Paper | 100.00 |
| Mondi Forests  Partners Programme  Proprietary Limited | 380 Old Howick Road,  Mondi House, Hilton,  3245 | Service, Uncoated  Fine Paper | 100.00 |
| Mondi Sacherie  Moderne Holdings  Proprietary Limited | Merebank Mill,  Travencore Drive,  Merebank, 4052 | Holding, Uncoated  Fine Paper | 100.00 |
| Mondi Sahel  Holdings (Pty) Ltd | Merebank Mill,  Travencore Drive,  Merebank, 4052 | Holding, Corporate | 100.00 |
| Mondi South Africa  (Pty) Limited6 | Merebank Mill,  Travencore Drive,  Merebank, 4052 | Production, Corrugated  Packaging, Uncoated  Fine Paper | 100.00 |
| Mondi Timber  (Wood Products)  Proprietary Limited | Merebank Mill,  Travencore Drive,  Merebank, 4052 | Holding, Uncoated  Fine Paper | 100.00 |
| Mondi Zimele Job  Funds Proprietary  Limited | 380 Old Howick Road,  Mondi House, Hilton,  3245 | Service, Uncoated  Fine Paper | 100.00 |
| Mondi Zimele  Proprietary Limited | 380 Old Howick Road,  Mondi House, Hilton,  3245 | Service, Uncoated  Fine Paper | 100.00 |
| MZ Technical  Services Proprietary  Limited | 128 Lansdowne Road,  Jacobs, 4052 | In liquidation, Uncoated  Fine Paper | 56.00 |
| Professional Starch  Proprietary Limited | 380 Old Howick Road,  Mondi House, Hilton,  3245 | In liquidation, Uncoated  Fine Paper | 100.00 |
| Siyaqhubeka  Forests Proprietary  Limited | Merebank Mill,  Travencore Drive,  Merebank, 4052 | Service, Uncoated  Fine Paper | 51.00 |
| Zimshelf Eight  Investment Holdings  Proprietary Limited | 4th Floor, No 3 Melrose  Boulevard, Melrose Arch,  2196 | In liquidation, Uncoated  Fine Paper | 100.00 |
| Spain | | | |
| Mondi Bags Ibérica  S.L.U. | Autovía A-2, Km 582,  08630 Abrera | Production, Flexible  Packaging | 100.00 |
| Mondi Ibersac S.L.U. | Calle La Perenal 4,  48840 Güeñes, Bizcaia | Production, Flexible  Packaging | 100.00 |
| Mondi Sales Ibérica  S.L. | Calle Blasco Garay nº94  5D, 28003 Madrid | Distribution, Flexible  Packaging | 100.00 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| Sweden | | | |
| Mondi Dynäs AB | 87381 Väja | Production, Flexible  Packaging | 100.00 |
| Mondi Örebro AB | Papersbruksallen 3A,  Box 926, 70130 Örebro | Production, Flexible  Packaging | 100.00 |
| Switzerland | | | |
| Dipeco AG | Bruehlstrasse 5,  4800 Zofingen | Distribution, Flexible  Packaging | 100.00 |
| Thailand | | | |
| Mondi Bangkok  Company, Limited | 789/10 Moo 9 Bang Pla  Sub-District, Bang Phli  District, Bangkok, Samut  Prakan Province | Production, Flexible  Packaging | 100.00 |
| Mondi Coating  (Thailand) Co. Ltd. | Nr 888/100-101 Soi  Yingcharoen Moo 19,  Bangplee-Tamru Road,  Bangpleeyai, Bangplee,  Samutprakam 10540 | Production, Flexible  Packaging | 100.00 |
| Mondi TSP  Company Limited | 110, Moo 3, Nong  Chumphon Nuea, Khao  Yoi District, Petchaburi  Province, 76140 | Production, Flexible  Packaging | 97.55 |
| Türkiye | | | |
| Doğal Kağıt  Hammaddeleri  Sanayi ve Ticaret  Limited Şirketi | Esentepe Mahallesi  Harman 1 sk.Nida Kule  Levent Ap. No:7/9/54  Şişli, İstanbul | Service, Corrugated  Packaging | 84.65 |
| Mondi Istanbul  Ambalaj Limited Şti. | No. 12A Türkgücü OSB  Mah. Yilmaz Alpaslan  Caddesi Corlu, Tekirdag,  59870 | Production, Flexible  Packaging | 100.00 |
| Mondi Kale Nobel  Ambalaj Sanayi Ve  Ticaret A.Ş. | Sevketiye Cobancesme  Kavsagi, A2 Blok, No.  229/230 Yeşilköy,  Bakirköy/Istanbul | Production, Flexible  Packaging | 100.00 |
| Mondi Turkey Oluklu  Mukavva Kağıt ve  Ambalaj Sanayi  Anonim Şirketi | Toki Mahallesi, Hasan  Tahsin Caddesi, No. 28,  Tire, Izmir 35900 | Production, Corrugated  Packaging | 84.65 |
| Ukraine | | | |
| Mondi Packaging  Bags Ukraine LLC | Fabrychna Street 20,  Zhydachiv, Lviv Region,  81700 | Production, Flexible  Packaging | 100.00 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 233 |
|  |  |  |

#### 11 List of subsidiaries, associated undertakings and other significant holdings



#### continued

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| UK | | | |
| Frantschach  Holdings UK  Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Flexible  Packaging | 100.00 |
| Medway Packaging  Pension Trustee  Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Service, Flexible  Packaging | 100.00 |
| Mondi Aberdeen  Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Distribution, Flexible  Packaging | 100.00 |
| Mondi Consumer  Goods Packaging  UK Ltd | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Flexible  Packaging | 100.00 |
| Mondi Finance plc | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Service, Corporate | 100.00 |
| Mondi Holcombe  Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Corrugated  Packaging | 100.00 |
| Mondi Investments  Limited 6 | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Holding, Corporate | 100.00 |
| Mondi Packaging  (Delta) Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Corrugated  Packaging | 100.00 |
| Mondi Packaging  Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Corrugated  Packaging | 100.00 |
| Mondi Packaging  UK Holdings  Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Corrugated  Packaging | 100.00 |
| Mondi Pension  Trustee Limited6 | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Service, Corporate | 100.00 |
| Mondi Scunthorpe  Limited7 | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Flexible  Packaging | 100.00 |
| Mondi Services  (UK) Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Service, Corporate | 100.00 |
| Powerflute Group  Holdings Limited | Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13  0NY | Dormant, Corrugated  Packaging | 100.00 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
| Company | Registered office | Principal activities | % of  shares  held by  Group |
| USA | | | |
| Mondi Bags USA,  LLC | 251 Little Falls Drive,  Wilmington DE 19808 | Production, Flexible  Packaging | 100.00 |
| Mondi Jackson  LLC | 251 Little Falls Drive,  Wilmington DE 19808 | Production, Flexible  Packaging | 100.00 |
| Mondi Minneapolis,  Inc. | 220 South Sixth Street,  Suite 2200, Minneapolis  55402 | Service, Flexible  Packaging | 100.00 |
| Mondi Romeoville  LLC | 251 Little Falls Drive,  Wilmington DE 19808 | Production, Flexible  Packaging | 100.00 |
| Mondi Tekkote  LLC | 251 Little Falls Drive,  Wilmington DE 19808 | Production, Flexible  Packaging | 100.00 |
| Mondi U.S.  Holdings LLC | 251 Little Falls Drive,  Wilmington DE 19808 | Holding, Corporate | 100.00 |
|  |  |  |  |

Notes:

1 % of shares held by the Group in 2022: 51%.

2 % of shares held by the Group in 2022: nil.

3 Joint venture accounted for using the equity method.

4 % of shares held by the Group in 2022: 62%.

5 Associate accounted for using the equity method.

6 These companies are held directly.

7 These companies have ordinary and preference shares.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 234 |
|  |  |  |

#### Notes to the Mondi plc parent company financial statements

#### for the year ended

#### 31 December 2023



#### continued

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  |  |
|  |  | 2023 | 2022 |
| Continuing operations |  |  |  |
| Containerboard | 000 tonnes | 2,312 | 2,383 |
| Kraft paper | 000 tonnes | 1,085 | 1,309 |
| Uncoated fine paper | 000 tonnes | 855 | 913 |
| Pulp | 000 tonnes | 3,218 | 3,566 |
| Internal consumption | 000 tonnes | 2,741 | 3,103 |
| Market pulp | 000 tonnes | 477 | 463 |
| Corrugated solutions | million m2 | 1,880 | 1,937 |
| Paper bags | million units | 5,414 | 5,994 |
| Consumer flexibles | million m2 | 1,818 | 2,039 |
| Functional paper and films | million m2 | 2,667 | 3,279 |

#### Exchange rates

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
|  | Average | | Closing | |
| Versus euro | 2023 | 2022 | 2023 | 2022 |
| South African rand (ZAR) | 19.96 | 17.21 | 20.35 | 18.10 |
| Czech koruna (CZK) | 24.00 | 24.57 | 24.72 | 24.12 |
| Polish zloty (PLN) | 4.54 | 4.69 | 4.34 | 4.68 |
| Pound sterling (GBP) | 0.87 | 0.85 | 0.87 | 0.89 |
| Russian rouble (RUB) | 92.47 | 73.94 | 100.00 | 78.43 |
| Turkish lira (TRY)1 | 25.76 | 17.41 | 32.65 | 19.96 |
| US dollar (USD) | 1.08 | 1.05 | 1.11 | 1.07 |

Note:

1 The Group has applied hyperinflation accounting for its subsidiaries in Türkiye (see notes 1 and 35).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 235 |
|  |  |  |

#### Production statistics

#### Financial performance

2014– 2023

On 4 May 2022, the Board decided to divest the Group’s Russian assets and subsequently concluded, in June 2022, that the Russian

operations satisfied the criteria to be classified as held for sale and that they should also be classified as discontinued operations

(see note 28). Income, expenses and cash flows for the years ended 2021 and thereafter are presented on a continuing basis and exclude

the results from the Russian discontinued operations. Profit and cash flow measures for the years ended 2014 to 2020 include the results

from Russian discontinued operations.

#### Consolidated



#### income statement

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
| € million, unless otherwise stated | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
| Group revenue | 7,330 | 8,902 | 6,974 | 6,663 | 7,268 | 7,481 | 7,096 | 6,662 | 6,819 | 6,402 |
| Underlying EBITDA | 1,201 | 1,848 | 1,157 | 1,353 | 1,658 | 1,764 | 1,482 | 1,366 | 1,325 | 1,126 |
| Corrugated Packaging | 310 | 662 | 543 | 518 | 583 | 707 | 477 | 408 | 427 | 381 |
| Flexible Packaging | 637 | 797 | 567 | 557 | 589 | 495 | 480 | 419 | 400 | 353 |
| Uncoated Fine Paper | 289 | 427 | 55 | 266 | 444 | 516 | 464 | 481 | 448 | 349 |
| Corporate | (35) | (39) | (34) | (30) | (34) | (32) | (37) | (34) | (34) | (32) |
| Personal Care Components  (divested) | — | 1 | 26 | 42 | 76 | 78 | 98 | 92 | 84 | 75 |
| Underlying operating profit | 790 | 1,443 | 782 | 925 | 1,223 | 1,318 | 1,029 | 981 | 957 | 767 |
| Special items before tax | (27) | 242 | 7 | (57) | (16) | (126) | (61) | (38) | (57) | (52) |
| Net finance costs (excluding financing  special item) | (73) | (143) | (83) | (95) | (104) | (88) | (85) | (101) | (105) | (97) |
| Underlying earnings | 523 | 949 | 534 | 627 | 829 | 916 | 721 | 667 | 647 | 519 |
| Basic earnings | 502 | 1,186 | 543 | 582 | 812 | 824 | 668 | 638 | 600 | 471 |
| Basic underlying EPS (euro cents) | 107.8 | 195.6 | 110.1 | 129.3 | 171.1 | 189.1 | 148.9 | 137.8 | 133.7 | 107.3 |
| Basic EPS (euro cents) | 103.5 | 244.5 | 112.0 | 120.0 | 167.6 | 170.1 | 137.9 | 131.8 | 124.0 | 97.4 |
| Total ordinary dividend per share  paid and proposed (euro cents)1 | 70.00 | 70.00 | 65.00 | 60.00 | 57.03 | 76.00 | 62.00 | 57.00 | 52.00 | 42.00 |

Note:

1 A special dividend of €1.60 per existing ordinary share was paid on 13 February 2024 to return the net proceeds from the sale of the Russian assets to the Group’s

shareholders (see notes 9, 22 and 34 for further details).

#### Significant ratios

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
|  | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
| Underlying EBITDA (decline)/growth (%)1 | (35.0) | 59.7 | n/a | (18.4) | (6.0) | 19.0 | 8.5 | 3.1 | 17.7 | 5.4 |
| Underlying EBITDA margin (%) | 16.4 | 20.8 | 16.6 | 20.3 | 22.8 | 23.6 | 20.9 | 20.5 | 19.4 | 17.6 |
| Underlying operating profit margin (%) | 10.8 | 16.2 | 11.2 | 13.9 | 16.8 | 17.6 | 14.5 | 14.7 | 14.0 | 12.0 |
| ROCE (%) | 12.8 | 23.7 | 13.9 | 15.2 | 19.8 | 23.6 | 19.3 | 20.3 | 20.5 | 17.2 |
| Net debt to underlying EBITDA (times) | 0.3 | 0.5 | 1.5 | 1.3 | 1.3 | 1.3 | 1.0 | 1.0 | 1.1 | 1.4 |
| Dividend cover (times) | 1.5 | 2.8 | 2.4 | 2.2 | 3.0 | 2.5 | 2.4 | 2.4 | 2.6 | 2.6 |
| PE ratio | 16.4 | 8.1 | 14.1 | 14.8 | 12.2 | 9.6 | 14.6 | 14.2 | 13.5 | 12.6 |
| Mondi plc (LSE) – share price at end  of year (GBP pence per share) | 1,538 | 1,410 | 1,826 | 1,720 | 1,773 | 1,634 | 1,931 | 1,666 | 1,334 | 1,050 |
| Mondi plc (JSE) – share price at end  of year (ZAR per share) | 363 | 291 | 395 | 343 | 326 | 304 | 319 | 279 | 309 | 190 |
| Market capitalisation (€ million) | 8,590 | 7,738 | 10,555 | 9,342 | 10,165 | 8,901 | 10,523 | 9,457 | 8,803 | 6,563 |

Note:

1 EBITDA change (%) 2021 is not applicable as 2021 EBITDA is presented on a continuing basis while 2020 EBITDA includes the result from Russian discontinued operations.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 236 |
|  |  |  |

#### Group financial record

#### Significant cash flows

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
| € million | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
| Cash generated from continuing  operations | 1,312 | 1,292 | 1,001 | 1,485 | 1,635 | 1,654 | 1,363 | 1,401 | 1,279 | 1,033 |
| Working capital cash flows | 229 | (419) | (195) | 125 | 35 | (117) | (122) | 68 | 9 | (87) |
| Income tax paid | (178) | (196) | (138) | (168) | (248) | (248) | (151) | (173) | (160) | (106) |
| Capital expenditure cash payments | (830) | (508) | (481) | (630) | (757) | (709) | (611) | (465) | (595) | (562) |
| Interest paid | (50) | (60) | (67) | (82) | (96) | (73) | (97) | (82) | (93) | (125) |
| Ordinary dividends paid to  shareholders1 | (345) | (321) | (298) | (237) | (396) | (309) | (273) | (274) | (209) | (193) |

Note:

1 A special dividend of €1.60 per existing ordinary share was paid on 13 February 2024 to return the net proceeds from the sale of the Russian assets to the Group’s

shareholders (see notes 9, 22 and 34 for further details).

#### Consolidated



#### statement of financial position

|  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |
| € million | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
| Property, plant and equipment | 4,619 | 4,167 | 4,870 | 4,641 | 4,800 | 4,340 | 4,128 | 3,788 | 3,554 | 3,432 |
| Goodwill | 765 | 769 | 926 | 923 | 948 | 942 | 698 | 681 | 590 | 545 |
| Working capital | 1,084 | 1,282 | 988 | 739 | 952 | 972 | 899 | 799 | 794 | 811 |
| Other assets1 | 673 | 2,034 | 558 | 557 | 620 | 540 | 530 | 532 | 422 | 434 |
| Other liabilities2 | (626) | (987) | (690) | (687) | (728) | (749) | (716) | (721) | (675) | (715) |
| Net assets excluding net debt | 6,515 | 7,265 | 6,652 | 6,173 | 6,592 | 6,045 | 5,539 | 5,079 | 4,685 | 4,507 |
| Equity | 5,655 | 5,794 | 4,498 | 4,002 | 4,015 | 3,485 | 3,683 | 3,392 | 2,905 | 2,628 |
| Non-controlling interests in equity | 441 | 460 | 391 | 380 | 370 | 340 | 324 | 304 | 282 | 266 |
| Net debt | 419 | 1,011 | 1,763 | 1,791 | 2,207 | 2,220 | 1,532 | 1,383 | 1,498 | 1,613 |
| Capital employed | 6,515 | 7,265 | 6,652 | 6,173 | 6,592 | 6,045 | 5,539 | 5,079 | 4,685 | 4,507 |

Notes:

1 Includes assets held for sale of €nil (2022: €1,382 million).

2 Includes liabilities directly associated with assets held for sale of €nil (2022: €325 million).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 237 |
|  |  |  |

The Group presents certain measures of financial performance, position or cash flows in the consolidated financial statements that

are not defined or specified according to IFRSs and UK-adopted International Accounting Standards in order to provide additional

performance-related measures to its stakeholders. These measures, referred to as  Alternative Performance Measures (APMs),

are prepared on a consistent basis for all periods presented in this report.

By their nature, the APMs used by the  Group are not necessarily uniformly applied by peer companies and therefore may not be

comparable with similarly defined measures and disclosures applied by other companies. Such measures should not be viewed in

isolation or as a substitute to the equivalent IFRSs measure.

Internally, the Group and its operating segments apply the same APMs in a consistent manner in planning and reporting on performance

to management, the Executive Committee and the Board. Three of the Group’s APMs, underlying EBITDA, basic underlying EPS and

ROCE, link to the Group’s strategy, as described on pages [22](#i47a6727b8bad4fe28addb4dae187e293_2685)-[23](#i81fa069a94a6467fbc23de6c6859fc5d_7-4-1-1-453663), and form part of the executive directors' and senior management's

remuneration targets.

The most significant APMs used by the Group are described below, together with a reconciliation to the equivalent IFRSs.

The reconciliations are based on Group figures and represent the continuing operations of the Group, unless otherwise stated.

The reporting segment equivalent APMs are measured in a consistent manner.

|  |  |  |
| --- | --- | --- |
|  |  |  |
| APM description and purpose | Financial  statement  reference | Closest IFRS  equivalent  measure |
| Special items | | |
| Special items are generally material, non-recurring items from continuing operations that exceed  €10 million. The Audit Committee regularly assesses the monetary threshold of €10 million on a net  basis and considers the threshold in the context of both the Group as a whole and individual operating  segment performance.  The Group separately discloses special items on the face of the consolidated income statement to  assist its stakeholders in understanding the underlying financial performance achieved by the Group  on a basis that is comparable from year to year.  Examples of special item charges or credits include, but are not limited to, significant restructuring  programmes, impairment of assets or cash-generating units, profits or losses from the disposal of  businesses, and the settlement of significant litigation or claims.  Subsequent adjustments to items previously recognised as special items, including any related credits  received subsequently, continue to be reflected as special items in future periods even if they do not  exceed the quantitative reporting threshold. Subsequent adjustments to items, or charges and credits  on items that are closely related, which previously did not qualify for reporting as special items, continue  to be reported in the underlying result even if the cumulative net charge/credit over the years exceeds  the €10 million quantitative reporting threshold. | Note 3 | None |
|  |  |  |
| Underlying EBITDA | | |
| Operating profit before special items, depreciation, amortisation and impairments not recorded as  special items provides a measure of the cash-generating ability of the Group's continuing operations  that is comparable from year to year. | Consolidated  income  statement | Operating  profit |
|  |  |  |
| Underlying EBITDA margin | | |
| Underlying EBITDA expressed as a percentage of Group revenue (segment revenue for operating  segments) provides a measure of the cash-generating ability of the Group's continuing operations  relative to revenue. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Underlying EBITDA (see consolidated income statement) | 1,201 | 1,848 |
| Group revenue (see consolidated income statement) | 7,330 | 8,902 |
| Underlying EBITDA margin (%) | 16.4 | 20.8 |
|  |  |  |
| Underlying operating profit | | |
| Operating profit before special items provides a measure of operating performance of the Group's  continuing operations that is comparable from year to year. | Consolidated  income  statement | Operating  profit |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 238 |
|  |  |  |

#### Alternative Performance Measures

|  |  |  |
| --- | --- | --- |
|  |  |  |
| APM description and purpose | Financial  statement  reference | Closest IFRS  equivalent  measure |
| Underlying operating profit margin | | |
| Underlying operating profit expressed as a percentage of Group revenue (segment revenue for  operating segments) provides a measure of the profitability of the Group's continuing operations relative  to revenue. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Underlying operating profit (see consolidated income statement) | 790 | 1,443 |
| Group revenue (see consolidated income statement) | 7,330 | 8,902 |
| Underlying operating profit margin (%) | 10.8 | 16.2 |
|  |  |  |
| Underlying profit before tax | | |
| Profit before tax and special items. Underlying profit before tax provides a measure of the Group’s  continuing operations' profitability before tax that is comparable from year to year. | Consolidated  income  statement | Profit before  tax |
|  |  |  |
| Effective tax rate | | |
| Underlying tax charge expressed as a percentage of underlying profit before tax.  A measure of the tax charge of the Group's continuing operations relative to its profit before tax  expressed on an underlying basis. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Tax charge before special items (see note 7a) | 167 | 296 |
| Underlying profit before tax (see consolidated income statement) | 709 | 1,318 |
| Effective tax rate (%) | 23.6 | 22.5 |
|  |  |  |
| Underlying earnings (and per share measure) | | |
| Net profit after tax before special items arising from the Group's continuing operations  that is attributable to shareholders.  Underlying earnings (and the related per share measure based on the basic, weighted average number  of ordinary shares outstanding) provides a measure of the Group's continuing operations’ earnings. | Note 8 | Profit for the  period  attributable to  shareholders  (and per  share  measure) |
|  |  |  |
| Total earnings (prior to special items) | | |
| Net profit after tax before special items arising from the Group's continuing and discontinued operations  that is attributable to shareholders.  Total earnings provides a measure of the Group’s earnings. | Note 8 | Profit for the  period  attributable to  shareholders |
|  |  |  |
| Headline earnings (and per share measure) | | |
| The presentation of headline earnings (and the related per share measure based on the basic, weighted  average number of ordinary shares outstanding) is mandated under the Listings Requirements of the  JSE Limited and is calculated in accordance with Circular 1/2023, ‘Headline Earnings’, as issued by the  South African Institute of Chartered Accountants. | Note 8 | Profit for the  period  attributable to  shareholders  (and per share  measure) |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 239 |
|  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
| APM description and purpose | Financial  statement  reference | Closest IFRS  equivalent  measure |
| Dividend cover | | |
| Basic underlying EPS from continuing operations divided by total ordinary dividend per share paid  and proposed provides a measure of the Group’s earnings relative to ordinary dividend payments.  The final ordinary dividend per share proposed in respect of the financial year ended 31 December 2023  is based on the new ordinary shares after the share consolidation which took effect on 29 January 2024,  whereas basic underlying EPS, the interim dividend per share paid in respect of the current year and the  comparative information are based on the existing ordinary shares before the share consolidation  (see note 9). |  | None |
|  |  |  |
| APM calculation: |  |  |
| euro cents, unless otherwise stated | 2023 | 2022 |
| Basic underlying EPS (see note 8) | 107.8 | 195.6 |
| Total ordinary dividend per share (see note 9) | 70.0 | 70.0 |
| Dividend cover (times) | 1.5 | 2.8 |
|  |  |  |
| Capital employed (and related trailing 12-month average capital employed) | | |
| Capital employed comprises total equity and net debt. Trailing 12-month average capital employed  is the average monthly capital employed over the last 12 months adjusted for spend on major capital  expenditure projects which are not yet in production.  These measures provide the level of invested capital in the business. Trailing 12-month average capital  employed is used in the calculation of return on capital employed. | Note 20 | Total equity |
|  |  |  |
| Return on capital employed (ROCE) | | |
| Trailing 12-month underlying operating profit, including share of associates' and joint ventures' net  profit/(loss), divided by trailing 12-month average capital employed. ROCE provides a measure of the  efficient and effective use of capital in the business and is presented on the basis of the Group's  continuing operations for comparability. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Underlying operating profit (see consolidated income statement) | 790 | 1,443 |
| Underlying net (loss)/profit from joint ventures (see consolidated income statement) | (5) | 1 |
| Underlying profit from operations and joint ventures | 785 | 1,444 |
| Trailing 12-month average capital employed of continuing operations (see note 2) | 6,135 | 6,097 |
| ROCE (%) | 12.8 | 23.7 |
|  |  |  |
| Net debt | | |
| A measure comprising short-, medium- and long-term interest-bearing borrowings and the fair value  of debt-related derivatives less cash and cash equivalents, net of overdrafts, and current financial  asset investments.  Net debt provides a measure of the Group’s net indebtedness or overall leverage. | Note 27c | None |
|  |  |  |
| Net debt to underlying EBITDA | | |
| Net debt divided by trailing 12-month underlying EBITDA. A measure of the Group’s net indebtedness  relative to its cash-generating ability. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Net debt (see note 27c) | 419 | 1,011 |
| Underlying EBITDA (see consolidated income statement) | 1,201 | 1,848 |
| Net debt to underlying EBITDA (times) | 0.3 | 0.5 |
|  |  |  |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 240 |
|  |  |  |

#### Alternative Performance Measures



#### continued

|  |  |  |
| --- | --- | --- |
|  |  |  |
| APM description and purpose | Financial  statement  reference | Closest IFRS  equivalent  measure |
| Net debt and net debt to underlying EBITDA at 31 December 2023 include the proceeds received  from the disposal of the Group's previously owned Russian operations in 2023 but exclude the special  dividend distributed on 13 February 2024. The Group therefore presents pro-forma net debt  and net debt to underlying EBITDA for 2023 which is calculated as follows: |  |  |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated |  | 2023 |
| Net debt (see note 27c) |  | 419 |
| Net proceeds on disposal of discontinued operations |  | 776 |
| Pro-forma net debt |  | 1,195 |
| Underlying EBITDA (see consolidated income statement) |  | 1,201 |
| Pro-forma net debt to underlying EBITDA (times) |  | 1.0 |
|  |  |  |
| Working capital as a percentage of revenue | | |
| Working capital, defined as the sum of trade and other receivables and inventories less trade and  other payables, expressed as a percentage of annualised Group revenue, which is calculated based  on an extrapolation of average monthly year-to-date revenue. A measure of the Group’s continuing  operations' effective use of working capital relative to revenue. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Inventories (see note 16) | 1,049 | 1,359 |
| Trade and other receivables (see note 17) | 1,254 | 1,448 |
| Trade and other payables (see note 18) | (1,219) | (1,525) |
| Working capital | 1,084 | 1,282 |
| Group revenue (see consolidated income statement) | 7,330 | 8,902 |
| Working capital as a percentage of revenue (%) | 14.8 | 14.4 |
|  |  |  |
| Gearing | | |
| Net debt expressed as a percentage of capital employed of continuing operations provides a measure  of the financial leverage of the Group's continuing operations. |  | None |
|  |  |  |
| APM calculation: |  |  |
| € million, unless otherwise stated | 2023 | 2022 |
| Net debt (see note 27c) | 419 | 1,011 |
| Capital employed of continuing operations | 6,515 | 6,221 |
| Gearing (%) | 6.4 | 16.3 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 241 |
|  |  |  |

The disclosures below form part of the Directors’ report on pages  [150](#i47a6727b8bad4fe28addb4dae187e293_3041)-[151](#i3311f27c54674971aa63d4b0730d466d_148410) of this report.

#### Introduction

Set out below is a summary of certain provisions of Mondi’s articles of association (Articles) and applicable English law concerning

companies (the Companies Act 2006). This is a summary only, and the relevant provisions of the Articles and/or the Companies Act 2006

should be consulted (as applicable) if further information is required.

#### Share capital

Mondi’s issued share capital as at  31 December 2023 comprised 485,553,780 ordinary shares of 20 euro cents each (the Ordinary Shares)

representing 100% of the total share capital. As at the date of this Integrated report, the issued share capital comprised 441,412,530

ordinary shares of 22 euro cents each, following implementation of the share consolidation approved by shareholders at the General

Meeting held on 15 January 2024. The share consolidation took effect on 29 January 2024.

#### Purchase of own shares

Subject to the provisions of the Articles and the Companies Act 2006, Mondi may purchase, or may enter into a contract under which it will or may

purchase, any of its own shares of any class, including any redeemable shares. At the Annual General Meeting held on 4 May 2023, authority was

given for Mondi to purchase, in the market, up to 24,277,689 Ordinary Shares. At the General Meeting held on 15 January 2024 to approve the

payment of a special dividend and implementation of an associated share consolidation, this authority was replaced with a new authority allowing

Mondi to purchase, in the market, up to 22,070,626 Ordinary Shares. This authority will expire at the conclusion of the Annual General Meeting

to be held in 2024 and, in accordance with usual practice, a resolution to renew such authority for the next year will be proposed.

#### Ordinary Shares

#### Dividends and distributions

Subject to the provisions of the Companies Act 2006, Mondi may, by ordinary resolution, from time to time declare dividends not

exceeding the amount recommended by the Board. The Board may pay interim dividends whenever the financial position of Mondi,

in the opinion of the Board, justifies such payment.

The Board may withhold payment of all, or any part of any dividends or other monies payable in respect of Mondi’s shares, from a person

with a 0.25% interest or more in nominal value of the issued shares, if such a person has been served with a notice after failure to provide

Mondi with information concerning interest in those shares required to be provided under the Companies Act 2006.

#### Voting rights and restrictions

Subject to the Articles generally and to any special rights or restrictions as to voting attached by or in accordance with the Articles to any

class of shares, at a general meeting, every member present in person has, upon a show of hands, one vote. Every duly appointed proxy

has, upon a show of hands, one vote unless the proxy is appointed by more than one member, in which case the proxy has one vote for

and one vote against if (i) the proxy has been instructed by one or more members to vote for the resolution and by one or more

members to vote against the resolution or (ii) the proxy has been instructed by one or more members to vote either for or against the

resolution and by one or more members to use their discretion as to how to vote. On a poll, every member who is present in person or

by proxy has one vote for every fully paid share of which they are the holder.

In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the

exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand

in the register of members in respect of the shares.

Under the Companies Act 2006, members are entitled to appoint a proxy, who need not be a member of Mondi, to exercise all or any

of their rights to attend and to speak and vote on their behalf at a general meeting or class meeting.

A member may appoint more than one proxy in relation to a general meeting or class meeting provided that each proxy is appointed to

exercise the rights attached to a different share or shares held by that member. A proxy is not entitled to delegate the proxy’s authority

to act on behalf of a member to another person. A member that is a corporation may appoint one or more individuals to act on its behalf

at a general meeting or class meeting as a corporate representative. Where a shareholder appoints more than one corporate

representative in respect of its shareholding, but in respect of different shares, those corporate representatives can act independently

of each other, and validly vote in different ways.

No member shall be entitled to vote either in person or by proxy at any general meeting or class meeting, or to exercise any other right

conferred by membership in relation to such meetings, in respect of any shares held by them, if any call or other sum then payable by them to

Mondi in respect of that share remains unpaid. In addition, no member shall be entitled to vote if they have been served with a notice

after failing to provide Mondi with information concerning interests in those shares required to be provided under the Companies Act 2006.

The Articles provide a deadline for submission of proxy forms of not less than 48 hours before the time appointed for the holding of

the meeting or adjourned meeting.

#### Variation of rights

Subject to the Companies Act 2006, the Articles specify that rights attached to any class of shares may be varied with the written

consent of the holders of not less than three-quarters in nominal value of the issued shares of that class, or with the sanction of a special

resolution passed at a separate general meeting of the holders of those shares. At every such separate general meeting, the quorum shall

be two persons holding, or representing by proxy, at least one-third in nominal value of the issued shares of the class (calculated

excluding any shares held as treasury shares).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 242 |
|  |  |  |

#### Additional information for shareholders

The rights conferred upon the holders of any shares shall not, unless otherwise expressly provided in the rights attaching to those shares,

be deemed to be varied by the creation or issue of further shares ranking pari passu with them. Notwithstanding this, the relevant plan

rules provide that any shares held by the trustee of the Mondi Share Incentive Plan from time to time will not be voted.

#### Transfer of shares

All transfers of shares which are in certificated form may be effected by transfer in writing in any usual or common form or in any other

form acceptable to the directors. The instrument of transfer shall be signed by, or on behalf of, the transferor and (except in the case

of fully paid shares) by, or on behalf of, the transferee and shall specify the name of the transferor, the name of the transferee and the

number of shares being transferred. The transferor shall remain the holder of the shares concerned until the name of the transferee is

entered into the register of members in respect of those shares. Transfers of shares which are in uncertificated form are effected by

means of the CREST system.

The directors may refuse to register an allotment or transfer of shares (whether fully paid or not) in favour of more than four persons

jointly. If the directors refuse to register an allotment or transfer they shall, within two months after the date on which the letter of

allotment or transfer was lodged with Mondi, send to the allottee or transferee a notice of the refusal.

The directors may decline to register any instrument of transfer unless the instrument of the transfer: (i) is in respect of only one class

of share; (ii) is lodged at the transfer office (duly stamped if required), accompanied by the relevant share certificate(s) and such other

evidence as the directors may reasonably require to show the right of the transferor to make the transfer (and, if the instrument

of transfer is executed by some other person on their behalf, the authority of that person to do so); and (iii) is fully paid.

Subject to the Companies Act 2006 and regulations and applicable CREST rules, the directors may determine that any class of shares

may be held in uncertificated form and that title to such shares may be transferred by means of the CREST system, or that shares of any

class should cease to be so held and transferred.

A shareholder does not need to obtain the approval of Mondi, or of other shareholders of Mondi, for a transfer of shares to take place.

Notwithstanding the above, some of the Mondi employee share plans include restrictions on transfer of shares while the shares are

subject to such plan.

#### Directors

Directors shall be no less than four and no more than 20 in number. A director is not required to hold any shares of Mondi by way of

qualification. Mondi may by special resolution increase or reduce the maximum or minimum number of directors. Each director shall retire

at the Annual General Meeting held in the third calendar year following the year in which the director was elected or last re-elected by

Mondi, or at such earlier Annual General Meeting as the directors resolve. A retiring director shall be eligible for re-election.

The Board may appoint any person to be a director (so long as the total number of directors does not exceed the limit prescribed in

the Articles). Any such director shall hold office only until the next Annual General Meeting (or if the notice of the next Annual General

Meeting has already been sent at the time of such person’s appointment, the Annual General Meeting following that one) and shall then

be eligible for re-election.

Subject to the Articles, the Companies Act 2006 and any directions given by special resolution, the business of Mondi will be managed

by the Board which may exercise all the powers of Mondi.

The Board may exercise all the powers of Mondi to borrow money and to mortgage or charge any of its undertaking, property and

uncalled capital and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation

of Mondi or of any third party.

#### Indemnities

As at the date of this report, indemnities are in force under which Mondi has agreed to indemnify its directors, to the extent permitted by

law and the Articles in respect of all losses arising out of, or in connection with, the execution of their powers, duties and responsibilities,

as directors of Mondi or any of its subsidiaries.

#### Significant agreements: change of control

All of Mondi’s employee share plans contain provisions relating to a change of control. Outstanding awards and options would normally

vest and become exercisable on a change of control, subject to the satisfaction of any performance conditions at that time and under

certain plans, time pro-rating. The Group also has in place certain borrowing facilities and banking arrangements, some of which could be

cancelled, become immediately payable or subject to acceleration upon a change of control of Mondi. Of these arrangements, only one

facility agreement is considered to be significant to the Group. In addition, a subsidiary of the Company is a party to a significant

agreement (being a supply agreement) entitling the counterparty to terminate such agreement in certain circumstances if there is a

change of control of the Company following a takeover. There are no other significant agreements that would take effect, alter or

terminate upon a change of control following a takeover bid.

#### Amendment of the Articles

Any amendments to the Articles may be made in accordance with the provisions of the Companies Act 2006 by way of special resolution.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 243 |
|  |  |  |

Mondi plc is a company registered in the UK. It has a premium listing on the London Stock Exchange and a secondary listing on the JSE Limited.

Any shareholders still in possession of an old Mondi Limited share certificate should contact JSE Investor Services using the details below.

#### Financial calendar

|  |  |
| --- | --- |
|  |  |
| May 2024 | 2024 Annual General Meeting |
| May 2024 | Trading update |
| May 2024 | Payment date for 2023 final dividend |
| August 2024 | 2024 half-year results announcement |
| September/October 2024 | 2024 interim dividend payment1 |
| October 2024 | Trading update |

1If one is declared.

Please go to [www.mondigroup.com](https://www.mondigroup.com/) for the most up-to-date calendar.

#### Analysis of shareholders

As at 31 December 2023, Mondi plc had 485,553,780 ordinary shares in issue, of which 220,945,651 were held on the South African branch register.

#### By size of holding

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Number of shareholders | % of shareholders | Size of shareholding | Number of shares | % of shares |
| 1,687 | 52.32 | 1–500 | 330,642 | 0.07 |
| 345 | 10.70 | 501–1,000 | 249,156 | 0.05 |
| 453 | 14.05 | 1,001–5,000 | 1,084,043 | 0.22 |
| 411 | 12.75 | 5,001–50,000 | 7,947,060 | 1.64 |
| 282 | 8.75 | 50,001–1,000,000 | 71,052,992 | 14.63 |
| 46 | 1.43 | 1,000,001–highest | 404,889,887 | 83.39 |
| 3,224 | 100.00 |  | 485,553,780 | 100.00 |

#### Managing your shares

#### Registrars

To manage your shares or if you have any queries, please contact the relevant Registrar:

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Shares held on the UK register | Shares held on the South African branch register |
| Registrar | Equiniti Limited | JSE Investor Services (Pty) Limited (JSE Investor  Services) |
| Postal address | Equiniti  Aspect House  Spencer Road  Lancing  West Sussex  BN99 6DA | PO Box 4844  Johannesburg, 2000  South Africa |
| Helpline number | '+44 (0)371 384 2576 (lines are open  08.30 to 17.30 (UK time), Monday to Friday  (excluding public holidays in England  and Wales)) | 011 713 0800  (if calling from South Africa)  +27 11 713 0800  (if calling from outside South Africa) |
| Email | customer@equiniti.com | info@jseinvestorservices.co.za |
| Online | <www.shareview.co.uk> | Not available |

#### Sign up to email communications

Receiving shareholder information electronically is a faster way to stay informed and more environmentally friendly.

Shareholders on the UK register can sign up to email communications by contacting Equiniti or via its online portal, ShareView.

Shareholders on the South African branch register holding their shares in certificated form can sign up to email communications by

contacting JSE Investor Services or by emailing ecomms@jseinvestorservices.co.za. Shareholders on the South African branch register

with dematerialised shares should contact their Central Securities Depository Participant (CSDP) or broker.

You will be notified by email each time new financial reports, notices of shareholder meetings and other shareholder communications

are published on our website at: [www.mondigroup.com](https://www.mondigroup.com/).

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 244 |
|  |  |  |

#### Shareholder information

#### Manage your shares online

Shareholders on the UK register can sign up to ShareView, a free secure online site provided by Equiniti, where you can manage your

shareholding quickly and easily. You can do the following:

– view your holding and get an indicative valuation;

– change your address;

– arrange to have dividends paid into your bank account;

– request to receive shareholder communications by email rather than post;

– view your dividend payment history;

– make dividend payment choices;

– buy and sell shares and access stock market news and information;

– register your proxy voting instruction; and

– download a Stock Transfer form.

To register for ShareView just visit <www.shareview.co.uk>. All you need is your shareholder reference number, which can be found on your

latest dividend statement. Please note the shareholder reference number found on your share certificate may have been issued by the

previous Registrar.

Shareholders on the South African branch register can sign up to ShareHub, the JSE’s new platform designed to enhance the

shareholder experience. ShareHub allows you to access your dividend payment confirmations in real time and enables you to view,

download or print the document from the ShareHub box at your convenience. You will have the option to opt out if you wish to continue

receiving dividend payment confirmations via normal post. As electronic post boxes will be opened for all certificated shareholders on the

ShareHub platform, we would encourage you to use these existing post boxes to receive all future shareholder communications, including

financial statements and meeting notices. For more information and to sign up, contact JSE Investor Services at

sharehubqueries@jseinvestorservices.co.za.

#### Dividends

A proposed final dividend for the year ended 31 December 2023 of 46.67 euro cents per ordinary share will be paid to shareholders

in accordance with the below timetable.

Payment of the final dividend is subject to the approval of shareholders at the Annual General Meeting scheduled for 3 May 2024.

|  |  |
| --- | --- |
|  |  |
| Last date to trade shares cum-dividend |  |
| JSE Limited | Tuesday 2 April |
| London Stock Exchange | Wednesday 3 April |
| Shares commence trading ex-dividend |  |
| JSE Limited | Wednesday 3 April |
| London Stock Exchange | Thursday 4 April |
| Record date | Friday 5 April |
| Last date for receipt of Dividend Reinvestment Plan (DRIP) elections by Central Securities Depository  Participants | Thursday 11 April |
| Last date for DRIP elections to South African Transfer Secretaries by shareholders | Friday 12 April |
| Last date for DRIP elections to UK Registrar by shareholders | Friday 19 April |
| Annual General Meeting | Friday 3 May |
| Payment date | Tuesday 14 May |
| DRIP purchase settlement dates (subject to the purchase of shares in the open market): |  |
| UK Register | Thursday 16 May |
| South African Register | Monday 20 May |
| Currency conversion dates |  |
| ZAR/euro | Thursday 22 February |
| Euro/sterling | Tuesday 23 April |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 245 |
|  |  |  |

#### Dividends

#### continued

Share certificates on Mondi plc’s South African register may not be dematerialised or rematerialised between Wednesday 3 April 2024

and Friday 5 April 2024, both dates inclusive, nor may transfers between the UK and South African registers of Mondi plc take place

between Wednesday 27 March 2024 and Friday 5 April 2024, both dates inclusive.

Dividend tax will be withheld from the amount of the gross final dividend paid to shareholders on the South African branch register

at the rate of 20%, unless a shareholder qualifies for an exemption.

#### Your dividend currency

All dividends are declared in euro. Dividends are paid in euro with the following exceptions:

|  |  |
| --- | --- |
|  |  |
| UK residents | pound sterling |
| South African residents | South African rand |

Shareholders on the UK register resident in the UK may, however, elect to receive their dividends in euro, and shareholders on the UK

register resident outside the UK may elect to receive their dividends in pound sterling.

Shareholders on the UK register wishing to elect to receive their dividends in an alternative currency should contact Equiniti using

the details provided.

#### Payment of your dividends

Mondi encourages shareholders to have dividends paid directly into their bank accounts, meaning the payment will reach you more

securely and on the payment date, without the inconvenience of depositing a cheque.

Shareholders on the UK register:

– Shareholders wishing to receive dividends in euro or sterling can elect to receive dividends directly into their bank account via

ShareView or by contacting Equiniti.

– Shareholders wishing to receive another local currency may be able to take advantage of the Overseas Payment Service offered

by Equiniti. Find out more via ShareView or by contacting Equiniti.

Shareholders on the South African branch register:

– The 2019 interim dividend was the last dividend to be paid by cheque. Shareholders who previously received cheques should

contact JSE Investor Services, if they have not already done so, to provide their bank details and ensure they continue to receive

their dividends.

– Shareholders without a South African bank account are encouraged to dematerialise their shares with a CSDP in South Africa, as

a CSDP is often able to pay dividends into foreign bank accounts. Find out more by contacting JSE Investor Services or any CSDP.

#### Reinvest your dividends

The dividend reinvestment plans (DRIPs) provide an opportunity for shareholders to have their cash dividends reinvested in Mondi plc

ordinary shares.

The plans are available to all ordinary shareholders (excluding those in certain restricted jurisdictions). Fees may apply.

If you wish to participate in the DRIPs, you can sign up via ShareView or by contacting either Equiniti in the UK or JSE Investor Services

in South Africa as appropriate.

#### South African dematerialisation

Mondi encourages shareholders on the South African branch register to consider dematerialising their shares. By surrendering your

share certificate, you will hold your shares electronically with a CSDP in South Africa, helping to prevent share fraud, theft and loss

of share certificates.

Find out more by contacting JSE Investor Services or any CSDP.

#### Taxation

Mondi is unable to advise shareholders on taxation. Your tax obligations will vary depending on your jurisdiction and financial

circumstances. With regard to your Mondi shareholding, we recommend all shareholders maintain records of dividend payments,

share purchases and sales. A dividend confirmation will be sent with all dividend payments. For further assistance, please speak

to an independent professional tax or financial adviser.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 246 |
|  |  |  |

#### Shareholder information

#### continued

#### Donating shares to charity

If you have a small number of shares which would cost you more to sell than they are worth, there is the option to donate these

unwanted shares to charity free of charge. These shares are then aggregated and sold and the proceeds distributed to various charities.

Donate your shares or find out more using the relevant contact details below:

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  | Shares held on the UK register | Shares held on the South African branch register |
|  | ShareGift | Strate Charity Shares |
| Postal address | PO Box 72253  London  SW1P 9LQ  UK | PO Box 78608  Sandton, 2146  South Africa |
| Helpline number | +44 (0)20 7930 3737 | 0800 202 363  (if calling from South Africa)  +27 11 870 8207  (if calling from outside South Africa) |
| Email | help@sharegift.org | charityshares@computershare.co.za |
| Online | <www.sharegift.org> | [http://www.strate.co.za/wp-content/uploads/2020/11/](http://www.strate.co.za/wp-content/uploads/2020/11/strate_charity_shares_donation_form_2020-1.pdf)  [strate\_charity\_shares\_donation\_form\_2020-1.pdf](http://www.strate.co.za/wp-content/uploads/2020/11/strate_charity_shares_donation_form_2020-1.pdf) |

#### Fraud

Shareholders should be aware that they may be targeted by certain organisations offering unsolicited investment advice or the

opportunity to buy or sell worthless or non-existent shares. Should you receive any unsolicited calls or documents to this effect, you are

advised not to give out any personal details or to hand over any money without ensuring that the organisation is authorised by the UK

Financial Conduct Authority (FCA) and doing further research.

If you are unsure or think you may have been targeted you should report the organisation to the FCA. For further information, please visit

the FCA’s website at [www.fca.org.uk](https://www.fca.org.uk/), email consumer.queries@fca.org.uk or call the FCA consumer helpline on 0800 111 6768 if calling

from the UK or +44 20 7066 1000 if calling from outside the UK.

Shareholders can also contact Equiniti in the UK or JSE Investor Services in South Africa using the contact details found above, or

Mondi’s company secretarial department on +44 (0) 1932 826300.

#### Account amalgamations

If you receive more than one copy of any documents sent out by Mondi or for any other reason you believe you may have more than one

Mondi plc account, please contact the relevant Registrar who will be able to confirm and, if necessary, arrange for the accounts to be

amalgamated into one.

#### Alternative formats

If you would like to receive this report in an alternative format, such as in large print, Braille or audio format, please contact Mondi’s

company secretarial department on +44 (0) 1932 826300.

#### Mondi plc

Registered office

Ground Floor, Building 5

The Heights, Brooklands

Weybridge

Surrey

KT13 0NY

UK

Tel. +44 (0) 1932 826300

Registered in England and Wales

Registered No. 6209386

Website: [www.mondigroup.com](https://www.mondigroup.com/)

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 247 |
|  |  |  |

The report is prepared in accordance

with the requirements of the Disclosure

Guidance and Transparency and Listing

Rules of the United Kingdom Listing

Authority and the Listings Requirements

of the JSE Limited where applicable.

The report aims to provide a fair, balanced

and understandable assessment of our

business model, strategy, performance and

prospects in relation to material financial,

economic, social, environmental and

governance issues.

#### 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.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Mondi Group Integrated report and financial statements 2023 |  |  |  |  |

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |  |  |
| 248 |
|  |  |  |

#### About this

#### report

This document includes market position estimates prepared by the Group based on industry publications and management estimates. Main industry publication sources are:

Fastmarkets RISI, Eurosac, Freedonia, Alexander Watson Associates, PCI Wood Mackenzie, EMGE, EURO-GRAPH, and Pulp and Paper Products Council.

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |
|  | OUR REPORTING SUITE | | | | |  |
|  | 16.02.24_Mondi_IR23_Visual_Cover_shadow_crop.png | |  | 02-iPad-Air-Landscape-Mock-up_Mondi_SDr_Cover_2023_v2.png | |  |
|  | Integrated report  Our Integrated report provides a clear, consistent and  comprehensive overview of our financial and non-financial  performance against our strategy, sustainable development  commitments, policies and governance framework. | |  | Sustainable Development report  We prepare a detailed, externally assured Sustainable  Development report in accordance with the Global  Reporting Initiative (GRI) Universal Standards (2021)  and SASB. | |  |
|  |  | Integrated Report 2023  [www.mondigroup.com/ir23](https://www.mondigroup.com/ir23) |  |  | Sustainable Development Report 2023  <www.mondigroup.com/sd23> |  |
|  |  |  |  |  |  |  |
|  | 02-iPad-Air-Landscape-Mock-up_Mondi_GRI_Cover_2023_V2_crop.png | |  | 02-iPad-Air-Landscape-Mock-up_Mondi_Cons_Performance_Cover_2023_v2.png | |  |
|  | GRI & SASB Index  The report has been produced in accordance with the GRI  Universal Standards and the SASB Containers & Packaging  Industry Standard. | |  | Consolidated Performance data  A comprehensive data file is available in excel or pdf for  download, which shows our sustainability key performance  indicators in line with MAP2030 for the period 2019 to 2023  (unless otherwise indicated). | |  |
|  |  |  |  |  |  |  |
|  | 02-iPad-Air-Landscape-Mock-up_Mondi_SEI_Cover_2023_v2.png | |  | 02-iPad-Air-Landscape-Mock-up_Mondi_SDG_Index_Cover_2023_V2_crop.png | |  |
|  | Stakeholder Engagement Index  This index provides detailed information about our  stakeholder engagement, including why we engage  different groups, how we engage with them, what topics  we engage on and the action we have taken. | |  | Sustainable Development Goals Index  This index maps the UN Sustainable Development Goals  (SDGs) and their respective targets against the contents  of the Sustainable Development report, where further  information about our contribution can be found. | |  |
|  |  |  |  |  |  |  |
|  | 02-iPad-Air-Landscape-Mock-up_Mondi_GRI_Biodiversity_Cover_2023_crop.png | |  |  |  |  |
|  | GRI Biodiversity disclosures  We provide a separate GRI biodiversity disclosure document. | |  |  | Reports and publications  [www.mondigroup.com/investors/results-reports-and-](www.mondigroup.com/investors/results-reports-and-presentations)  [presentations](www.mondigroup.com/investors/results-reports-and-presentations) |  |

|  |  |
| --- | --- |
|  |  |
| Mondi Group  Ground Floor, Building 5,  The Heights, Brooklands,  Weybridge, Surrey, KT13 0NY,  United Kingdom  +44 1932 826 300  [www.mondigroup.com](https://www.mondigroup.com/) | |
|  | |
|  |  |
|  |
|  |
|  |  |
| Mondi_Pergraphica-Logo_Black.svg | |
| Printed on certified Mondi PERGRAPHICA® Classic Rough in 300gsm,  120gsm and 90gsm  Design and production: Design Portfolio |  <www.design-portfolio.co.uk>  Printing: Park Communications |  <www.parkcom.co.uk> | |