Mondi | Diversification to defend returns
Mondi delivered robust FY '18 results. However, 2019 appears likely to be plagued by oversupplied containerboard markets weighing on prices. To its credit, Mondi has not hidden from the realities that containerboard markets are cyclical. Instead, Mondi strives to insulate earnings through cost leadership, diligent capital allocation (organic and acquisitive growth) and product slate diversification. We believe that Mondi's 2019 to 2021 project pipeline personifies efforts to drive sustainable value creation. Accordingly, we continue to expect Mondi to report hurdle beating ROCE's of >13% despite short-term containerboard price volatility.Mondi is a packaging and paper company. Co. is structured into two divisions. Co.'s Europe & International division include: packaging paper, which manufactures and sells a range containerboard and sack and kraft paper; fiber packaging, which manufactures and sells a range of corrugated packaging products, industrial bags and extrusion coatings; consumer packaging, which develops, manufactures and sells consumer packaging solutions, films and release liner; and uncoated fine paper, which manufactures and sells papers for use in printing. Co.'s South Africa division manages forestry operations and manufactures and sells pulp, containerboard, uncoated fine paper and newsprint products.
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