Mondi and DS Smith agreed the financial terms of a possible all-share combination on Mar 7, 2024. The £5.14 billion proposal valued DS Smith at about 373 pence per share, a 33% premium to its Feb 7 closing price. The British packaging companies still needed to agree other conditions, including regulatory matters and mutual confirmatory due diligence. DS Smith shares rose more than 7% the following morning, reaching 350 pence in early trading, while Mondi fell 2.5%.
The proposed ownership split was 54% for Mondi shareholders and 46% for DS Smith shareholders. Philip Yea would chair the enlarged group, with Andrew King as chief executive and Mike Powell as finance chief. The proposed combined business was valued at more than £11 billion. Davy Research analyst Justin Jordan judged the proposal beneficial to both shareholder groups, anticipating limited regulatory hurdles or risks from a competing bidder.
The financial base for expansion
Mondi entered those discussions after a weaker earnings year but higher operating cash generation. Its continuing operations produced revenue of €7.33 billion in 2023, compared with €8.90 billion in 2022. Underlying earnings before interest, tax, depreciation and amortisation fell from €1.85 billion to €1.20 billion, and the corresponding margin declined from 20.8% to 16.4%. Cash generated from operations nevertheless increased to €1.31 billion from €1.29 billion. Return on capital employed was 12.8%, against 23.7% a year earlier. Basic underlying earnings were 107.8 euro cents per share, compared with 195.6 euro cents in 2022. The board recommended an ordinary dividend of 70 euro cents per share, unchanged from the previous year. In February 2024, King said cash generation supported continued investment through the business cycle. Mondi had €1.2 billion of organic growth projects under way and expected a meaningful earnings contribution from them from 2025. The reported year-end net-debt-to-underlying-EBITDA ratio was 0.3 times; the pro forma measure, allowing for a subsequent special shareholder distribution, was 1.0 times.
The DS Smith proposal ends
On Apr 19, 2024, Mondi announced that it would not make an offer for DS Smith. Its board had undertaken due diligence and assessed the value a combination would deliver to Mondi shareholders. The board concluded that the transaction would not be in their best interests. Mondi also noted the recommended combination of International Paper and DS Smith announced three days earlier. Its withdrawal statement retained the board’s confidence in Mondi’s own packaging and paper portfolio, asset base and organic investment pipeline. The statement fell under Rule 2.8 of the Takeover Code and reserved specified circumstances in which restrictions could be set aside. The March agreement in principle therefore remained a proposal that Mondi did not take forward.
Orders and prices in early 2024
The trading update released on May 3, 2024 covered the three months to Mar 31. Stronger order books supported higher sales volumes across paper grades compared with the final quarter of 2023, while downstream converting operations also performed solidly. Average selling prices were lower and costs broadly stable. Underlying EBITDA was €214 million, compared with €260 million in the preceding quarter, including a one-off €32 million loss from the Egyptian pound’s devaluation. Containerboard volumes increased, while corrugated solutions remained stable. In Flexible Packaging, volume growth was largely offset by lower average prices. Uncoated Fine Paper benefited from price increases, although a lower forestry fair value gain affected the comparison. Mondi said recently announced paper price increases were beginning to come through in the second quarter.
Converting the Duino paper machine
At Duino, near Trieste in Italy, Mondi laid a cornerstone for a €200 million investment on May 23, 2024. It had acquired the mill in January 2023 and was converting the existing paper machine to recycled containerboard. The machine’s planned annual capacity was 420,000 tonnes once fully operational, with a width of 8.5 metres. The project also involved a recycled fibre plant, wastewater treatment, infrastructure and warehousing. Start-up was then expected in 2025. Mondi intended to source materials locally where possible, citing shorter transport distances and supply-chain resilience. King associated the investment with greater backward integration and security of supply. Markus Gärtner, chief executive of Corrugated Packaging, identified Central Europe, the Mediterranean and the Italian market as intended customers.
Semi-chemical fluting in Finland
Mondi celebrated completion of a €125 million modernisation project at Kuopio, Finland, on Jun 19, 2024. The investment upgraded the wood yard, fibre line, evaporation plant and paper machine. It added 55,000 tonnes of annual production capacity for semi-chemical fluting, a material used predominantly in fresh fruit and vegetable trays and boxes. The mill makes Mondi’s ProVantage Powerflute product. The company expected the upgrades to improve product quality and resource and energy efficiency, while reducing greenhouse gas emissions per tonne of paper. The inauguration brought together local politicians and partners. Gärtner, Kuopio mayor Soile Lahti and mill managing director Juha Koukka attended. King linked the investment to the mill’s long-term viability and the region’s economy. The June celebration marked completion of the investment programme.
By the first-half results published on Aug 1, 2024, Mondi was ramping up operations after modernising Kuopio, removing bottlenecks at Świecie and expanding two box plants in Poland. King expected about 80% of the €1.2 billion organic growth investment programme to have been spent by the end of 2024. Underlying EBITDA for the six months to Jun 30 was €565 million. Rescheduled maintenance shutdowns and a higher-than-expected forestry fair value gain together benefited the second quarter by approximately €40 million. King attributed the half-year performance to stronger orders and volumes, improving market conditions, paper price increases and lower input costs. He expected the price benefits to continue into the second half, alongside more planned maintenance shutdowns and a likely forestry fair value loss. The anticipated contribution from the investment programme remained a forecast for 2025.
Acquiring converting operations in Western Europe
On Oct 9, 2024, Mondi agreed to buy Schumacher Packaging’s German, Benelux and UK corrugated converting and solid board operations. The enterprise value was €634 million, to be financed from existing facilities. The acquisition agreement covered seven corrugated converting plants, two solid board mills and four solid board converting plants. They included the Ebersdorf and Greven mega-box plants in Germany. Mondi expected more than one billion square metres of additional converting capacity when fully operational, complementing its Central and Eastern European network.
The assets had generated adjusted EBITDA of €66 million in 2023. Mondi forecast €22 million of cost synergies over three years after completion, excluding approximately €18 million of one-off cash costs to achieve them. Closing was expected in the first half of 2025, subject to customary regulatory approvals. Bjoern Schumacher was to remain as a strategic adviser and Hendrik Schumacher as chief operating officer for Solid Board.
Kraftliner capacity at Świecie
A separate €95 million investment at Mondi’s Świecie containerboard mill in Poland was completed in June 2024 and detailed in an October release. It increased annual kraftliner capacity by 55,000 tonnes. The work included extensive rebuilds of paper machines PM2 and PM5, a new anaerobic treatment plant with integrated cooling, and upgrades to the pulp mill, recycled fibre line and energy recovery system. Mondi said the changes would improve product quality, lower water use and wastewater emissions, and increase energy efficiency. The mill also broadened the grammage range of its ProVantage SmartKraft Brown kraftliner following completion. The product serves packaging requirements for large and heavy goods. Managing director Tomasz Katewicz credited the mill team with delivering the project and improving its offering to customers.
Mondi’s third-quarter update, published on Oct 17, 2024, put underlying EBITDA at €223 million for the three months to Sep 30, against €351 million in the second quarter. More planned maintenance shutdowns and a forestry fair value loss together accounted for approximately €90 million of the difference. Softer seasonal demand and higher input costs also affected the quarter. Corrugated Packaging and Flexible Packaging selling prices were higher than in the preceding quarter following earlier paper price increases. In Uncoated Fine Paper, pulp and paper prices declined after recovering earlier in the year. King described trading conditions as muted and expected fewer maintenance shutdowns and the normal seasonal demand improvement in the fourth quarter. He also said the Štětí and Duino paper-machine projects remained on track.
Five projects start during 2024
The full-year results released on Feb 20, 2025 recorded underlying EBITDA of €1.049 billion for 2024, including a €7 million forestry fair value gain. The comparable 2023 total was €1.201 billion, including a €128 million forestry fair value gain. Mondi said five major capacity expansion projects had started on time and within budget during 2024. The largest, a new paper machine at Štětí in the Czech Republic, began operating in December, ahead of plan. The group also completed its acquisition of the Hinton pulp mill in Canada. King described soft demand and a difficult pricing environment, while maintaining the group’s focus on productivity, ramping up capacity and the expanded product range. The proposed ordinary dividend was 70 euro cents per share, unchanged from 2023. At that reporting date, the Schumacher transaction was still expected to close in the first half of 2025.
Mondi announced completion of the Schumacher Western European acquisition on Apr 1, 2025, following the transaction’s closing on Mar 31. The acquired operations added solid board solutions to its product portfolio as well as the Ebersdorf and Greven mega-box plants. King said the combination would broaden Mondi’s eCommerce and fast-moving consumer goods offering, particularly in Western Europe. Gärtner associated the purchase with greater capacity, supply security and opportunities for innovation. These were the company’s expectations for the enlarged business. The completion brought the acquired production and converting operations into Mondi’s network, while the integration work continued. Customers transferring from Schumacher gained access to Mondi’s wider portfolio and services. Existing Mondi customers gained the additional product range.
Production and integration in early 2025
Underlying EBITDA for the first quarter of 2025 was €290 million, including a €2 million forestry fair value gain. The final quarter of 2024 had produced €261 million, including a €27 million forestry fair value loss. Higher volumes, good cost control and fewer planned maintenance shutdowns offset lower average selling prices. Order books strengthened across the paper grades, supported by downstream converting operations.
In the May 8 update, Mondi also confirmed that the converted Duino paper machine had started in April. The Štětí machine, operating since December 2024, was ramping up, while the group was optimising its broader kraft paper mill network. Mondi welcomed 2,200 colleagues through the Schumacher acquisition and was integrating the assets. King said direct tariff exposure was limited, while highlighting potential indirect effects on trade, consumer confidence and supply chains.
The first-half results after completion
For the six months to Jun 30, 2025, Mondi recorded underlying EBITDA of €564 million, including an €18 million forestry fair value gain. The prior first-half total was €565 million, including a €49 million gain. Corrugated Packaging contributed €203 million, compared with €143 million; Flexible Packaging contributed €302 million, compared with €276 million. Uncoated Fine Paper generated €81 million, including the €18 million forestry gain, against €166 million including €49 million a year earlier. Cash generated from operations increased from €372 million to €416 million. Net debt to underlying EBITDA stood at 2.5 times, compared with 1.7 times at the end of 2024. King said all major expansion projects were operational and increasing production and sales, while Schumacher integration and synergy delivery remained on track. Mondi declared an interim ordinary dividend of 23.33 euro cents per share.
Duino’s product range after start-up
More than 70 representatives from corrugators across Europe, the Middle East and North Africa had joined Mondi at Duino to mark the machine’s April start-up by Sep 22, 2025. The mill’s recycled containerboard range included:
- Waste-based fluting starting at 80 grams per square metre.
- Testliner starting at 90 grams per square metre.
- Paper reels with widths from 0.95 to 3.35 metres.
The mill’s annual capacity remained 420,000 tonnes once fully ramped up. Nearby ports supported international deliveries, alongside shorter supply routes to local and neighbouring markets. Klaus Peller, Mondi’s containerboard chief operating officer, associated the investment with reliable supply and customer growth. At that date, Mondi’s integrated network included six containerboard mills worldwide, offering recovered-fibre and virgin-fibre grades for different applications.
Capital priorities reported in 2026
By the full-year 2025 results, published on Feb 19, 2026, underlying EBITDA was €1.001 billion. King described a prolonged industry downturn and a stronger focus on operating costs. Mondi had combined Corrugated Packaging and Uncoated Fine Paper organisationally and was capturing further Schumacher integration synergies. It had also announced three plant closures across paper bags and corrugated solutions. After the expansion phase, management prioritised maintenance capital expenditure and cost-optimisation opportunities. The board proposed returning the dividend to its cover policy. King said average paper prices entering 2026 were modestly below the final quarter of 2025 and that the timing of better macroeconomic conditions remained unclear. The group’s stated priorities were disciplined volume growth, margin management and cost control, alongside making use of the capacity added through its investment programme.
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