Full directors report - Mondi

Turkish corrugated business) and
Mondi Packaging South Africa
(70% owned).
Cash flow and
borrowings
E million 2009 2008
EBITDA
Fair value adjustments
and other non-cash
645 814
movements
Cash flow from working
(26) (46)
capital
Cash generated from
248 27
operations
Taxes paid and
dividends from
867 795
associates
Net cash generated
from operating
(30) (69)
activities (837) 726
Capital expenditure
Investment in forestry
(517) (693)
assets
Acquisitions of
subsidiaries and
(40) (43)
associates (2) (49)
Disposals of businesses 57 17
Other investing activities
including interest
received
Net cash used in
10 58
investing activities
Cash (used)/generated
from financing
(492) (710)
activities (364) 8
Net cash flow (19) 24
EBITDA of E645 million for the year
was 21%, or E169 million, lower than
in 2008, reflecting the more difficult
trading environment. Cash generated
from operations of E867 million
increased by E72 million, or 9%,
compared with the previous year,
mainly because of significantly higher
inflows from working capital than
were achieved in 2008, offset by the
lower EBITDA. Cash inflow from
working capital of E248 million was
achieved despite an already strong
performance in the 2007 and 2008
financial years (E124 million
cumulative inflow).
Capital expenditure, including
purchase of intangible assets, of
E222 million (excluding spend on the
two major strategic projects of around
E300 million), was significantly lower
than depreciation and amortisation of
E351 million, reflecting the decision
taken in the fourth quarter of 2008 to
limit new capital expenditure
approvals to below 40% of
depreciation. The remaining
expenditure on the two major projects
is estimated at around E210 million,
the bulk of which will be spent in
2010 with minimal flow through to
2011. There were no major business
acquisitions during the year.
Cash generated from
operations increased
by 9% to E867 million
Balance sheet
E million 2009 2008
Trading capital
employed 4,314 4,367
ROCE
(pre taxation) (%) 7.6% 9.5%
Shareholders funds 2,399 2,323
Return on shareholders
funds (%) 4.0% 6.5%
Net debt 1,517 1,690
Gearing (Net debt/
trading capital
employed) (%) 35.1% 38.7%
Net debt to EBITDA
(times) 2.4 2.1
Trading capital employed at year
end was E4,314 million, E53 million
lower than in 2008, mainly because
of working capital inflows of
E248 million, special item impairments
of E98 million and disposals of
E59 million, partially offset by capital
expenditure including purchases of
intangible assets of E522 million
(E171 million in excess of
depreciation) and foreign exchange
movements of E195 million.
Treasury and borrowings
The Group’s treasury function operates
within clearly defined Board-approved
policies and limits, follows controlled
Directors’ report
Annual report and accounts 2009 Mondi Group 29