Mondi plc

Good morning, everyone, and thank you for joining today's call at short notice. As said, I'm Andrew King, Group CEO, and with me is Mike Powell, our Group CFO. As you all have seen from our statement, the challenging market environment we spoke about at our half-year results in July has continued through the third quarter. This resulted in an underlying EBITDA of $223 million for the quarter. Across the period, we saw subdued market demand impacting sales volumes in the upstream pulp and paper businesses in particular. And since we last reported results at the end of July, we've also seen further pulp and paper price declines across most grades. Our packaging converting operations delivered a stable performance when compared to the prior quarter, despite this difficult backdrop. Challenging trading conditions are expected to persist for the remainder of this year as demand side confidence remains fragile. Furthermore, key markets remain in oversupply and current selling prices are lower than the third quarter averages. While we remain confident in the structural drivers underpinning through cycle growth in our packaging solutions, we are equally cognizant of the impact of the current prolonged cyclical downturn on near-term performance. In response, we have intensified our focus on operational efficiency, cost control, and cash generation, mitigating impact of the current softer markets while ensuring we are well-positioned to capture growth and deliver enhanced returns when favorable conditions return. In this context, in the six months since completing the acquisition of Schumacher, we have identified an additional 10 million of cost synergies taking the total identified synergies to 32 million euros. As a further step to streamline our organization, facilitate cost takeout and drive synergies across our pulp and paper businesses in particular, we are combining our uncoated fine paper business with our corrugated packaging business unit. Going forward then, we'll be organized into two business units in large corrugated packaging and flexible packaging, which remains unchanged. All our capacity expansion projects are ramping up and we remain confident that they are cost competitive, deliver significant integration benefits, and once fully optimized will deliver mid-teen, mid-cycle returns. However, near-term profitability is heavily influenced by prevailing market conditions, meaning the net incremental contribution to full year 2025 EBITDA is now expected to be around 30 million euros. We are ensuring that all ongoing capital expenditure is focused on stay-in-business CapEx and cost optimization opportunities. As you will know, the remaining major capacity expansion project we have been working on is the new SAC craft paper machine at our Hinton Mill in Canada. We have decided to put this project on hold, but we retain the full optionality to invest when market conditions improve. We are confident these steps will enable us to navigate current headwinds, build a stronger, more efficient operating platform, and drive free cash flow. This will protect value today and enhance returns when market conditions improve. With that short introduction, I'm happy to take questions. Mike and I are both here to take questions, so we'll hand back to the operator. Thank you.

Thank you. Just to remind our audience, please, if you wish to ask a question, use the raise hand function and be invited to unmute and ask your question live. Our first question for you comes from Charlie Muir Sounds. Charlie, please unmute and go ahead and ask your question.

Good morning, guys. Can you hear me OK? We can. Thank you, Charlie. Great. Yeah. Thank you very much for taking my questions. So I had two, please. Firstly, you talk about increased focus on cost and efficiency. actions in that regard. I just wondered at this stage whether you had any particular program in mind and whether there was going to be any specific quantum of additional cost savings that you would be aiming to target and if there would be any kind of one-time charges in order to implement those changes. And then the second question relates to the weakness of demand. I think you said earlier demand in your packaging operations was stable. So it sounds like it's weakness in, you obviously mentioned pulp and paper, but also packaging materials, packaging papers themselves. So Do you get the sense that there was an element of destocking amongst your customer base going on, or are they exposed to end markets which are different to own converting operations, and therefore there's sort of uneven weakness out there? Thank you.