DAVY VIEW

Following the Russian exit, Mondi shareholders have approved a €1.60 special dividend, with 10 for 11 share consolidation as of January 29th. Mondi will issue 2023e results on February 22nd. While our €1.19bn 2023E EBITDA sits in line with the street, modelling subdued 2024e paper bag (Flexible Packaging) demand from industrial and cement markets (c.50% Mondi paper bag exposure), our €1,153m 2024E EBITDA sits 4% below consensus. Post the recent re-rating, Mondi trades at over a 40% prospective EV/EBITDA premium to packaging sector peers. We reaffirm our ‘Neutral’ rating and £15.50 price target, preferring packaging peers DS Smith and Smurfit Kappa Group.