Full directors report - Mondi

notwithstanding the difficulties
encountered during 2009 and the
significant capital expenditure to develop
low-cost operations for the future, we
have been able to adhere to our longterm
dividend policy.
The Boards aim to offer shareholders
long-term dividend growth within a
targeted dividend cover range of two to
three times on average over the cycle.
The decision was taken in the prior year
to pay a reduced full-year dividend in
light of the uncertain economic outlook
and lack of liquidity in the financial
markets. This also served to ensure that
dividend cover was maintained within
the targeted range. Given the Group’s
strong balance sheet and healthy
operating cash flows, coupled with an
improving outlook, it is proposed to pay
a final dividend that reflects an increase
on the prior year final dividend, while
remaining within the Group’s targeted
cover range.
Accordingly the boards of Mondi
Limited and Mondi plc have
recommended a final dividend of
7.0 euro cents per share (2008:
5.0 euro cents per share), payable on
19 May 2010 to shareholders on the
register at 23 April 2010. Together with
the interim dividend of 2.5 euro cents
per share, paid on 15 September 2009,
this represents a total dividend for the
year of 9.5 euro cents per share. In
2008, the total dividend for the year was
12.7 euro cents per share. To
shareholders on the South African
registers of Mondi Limited and Mondi
plc, an equivalent dividend of 28.41150
South African rand cents per share
was paid on 15 September 2009
and, together with a final dividend of
73.54690 South African rand cents
per share payable on 19 May 2010,
the total dividend amounts to
101.95840 South African rand
cents per share.
In July 2009, the South African
Treasury approved the reclassification
of the secondary listing of Mondi plc’s
ordinary shares on the JSE as
domestic assets in the hands of
South African investors. This had the
effect of all but eliminating the price
differential that had existed between
the Mondi Limited and Mondi plc
shares trading on the JSE.
Importantly, the reclassification had
the effect of allowing a new group of
potential shareholders access to the
Mondi plc shares, and this, we believe,
has contributed to the share’s strong
performance in the second half of 2009.
Thanks
Operating in 31 countries across the
globe, the people of Mondi have
shown resilience and commitment.
Their contribution has underpinned
the Group’s resilient performance.
Management, and in particular the
chief executive and senior leadership,
have been quick to react and
wholehearted in their response to a
rapidly changing and uncertain global
environment. On behalf of the Boards
we thank them.
Mondi’s strategy
remains valid: a focus
on low-cost production
and emerging markets,
combined with ingrained
cost-consciousness and
a decisive response to
market circumstances
Strategy and outlook
The current financial year will, no doubt,
continue to present challenges to the
Mondi Group. These will continue to be
met with enthusiasm and dedication.
Mondi’s strategy remains valid: a focus
on low-cost production and emerging
markets, combined with ingrained
cost-consciousness and a decisive
response to market circumstances.
These will continue to serve as our
guidelines, and provide a platform for
organic growth in our target markets.
The Group’s solid foundation, built on
operational efficiency and market
leadership, will continue to underpin
both operational and financial
performance. The measures we have
taken prior to and during the global
financial crisis mean that the Group is
better positioned at the end of 2009
than it was at the beginning of the year
to deliver returns to shareholders in the
longer term. While we remain cautious
about the macroeconomic outlook and
the potential impact this will have on
our business in 2010, it is encouraging
that both volumes and pricing in most
of our key markets continue to improve.
Cyril Ramaphosa
Joint chairman
David Williams
Joint chairman
Directors’ report
Annual report and accounts 2009 Mondi Group 15