Mondi plc

Everyone, it's Andrew King here, Group CEO, and with me is Mike Powell, our CFO. I'm sure you've all read today's announcement, so I'm just going to pick up a few points before we go into questions. The weak macroeconomic environment continued through the third quarter, resulting in a continuation of the challenging market conditions we've seen throughout the year. Market demand has generally remained subdued, with lower average selling prices largely mitigated in the third quarter by a low and tight fixed cost control. You will have seen that the forestry fair value gain was 14 million in the quarter, significantly lower than the 72 million euros recorded in the second quarter of the year. All of this then resulted in the group delivering underlying EBITDA of 261 million euros for the quarter compared to the 320 million euros for the second quarter of the year. We do anticipate the trends seen in the third quarter will continue to the final quarter of the year, but without further significant cost relief as wood and other costs are now stabilizing. We will be seeing a greater impact from maintenance and project-related shuts into the final quarter as well. Despite these short-term challenging markets, we do remain very well positioned to benefit when market conditions improve. with our very low cost base, broad product offering, and fully integrated business model, which continues to provide resilience in these current environments. With that, Mike and I are very happy to take your questions.

Excuse me. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 1 on their touchtone telephone, then pick up the receiver when asking questions. Anyone who has a question may press 311 at this time. We will pause for a moment as callers join the queue. And the first question comes from the line of Cole Hawthorne from Jefferies. The line is open. Please ask your question.

Morning, Andrew. Morning, Mike. Can I just start off firstly with the cost relief? You know, I think expectations were hopeful that we'd continue to see some further kind of wood cost relief into the fourth quarter and into 2024. So I'm just hoping you can give a little bit of color on what you're seeing regionally on kind of wood costs and expectations into 2024, and if there are any other major cost buckets that are worth calling out besides the wood cost. And then, secondly, on craft paper, I'd like to ask something around kind of the cyclical versus the structural side of that. paper side, you know, Mondi's a leader in sack and craft paper. You know, you're forward integrated into your bags. You've got visibility on the supply chain, medium term of what customers are doing and planning. Yes, right now it's very cyclical in this destocking in a number of regions and markets. But, you know, have you seen any changes to your medium term kind of growth prospects of 2% to 4% given the tailwinds of plastic to paper versus potentially, you know, some reductions in demand from other items and linking this to, you know, the supply and demand of SAC paper, which is, you know, different to container board. It's, you know, 20th the size. What does this mean for supply and demand over the next few years?