Mondi

Re-initiation: turning the page

After a period of investment for growth and significant shareholder returns, Mondi is now focused on delivery against existing assets and reduction of net debt (net debt to adjusted EBITDA ratio of 2.6x).

Davy expects adjusted EBITDA to decline by c.€80m, or 8%, in FY 2026, driven by what was the Uncoated Fine Paper division (now part of Corrugated Packaging). This division is significantly less important (c.7% of adjusted EBITDA in FY 2026) than it once was.

In 2022, the last time energy costs spiked, the group was able to more than pass on the cost – growing its adjusted EBITDA margin. We note that while Mondi does not hedge its energy cost exposure, 77% of its energy was generated from renewable sources in FY 2025 (mainly internally produced black liquor). We value the shares at £8.50 and move our rating to ‘Neutral’.

• Ciaran Mulqueen
• Morning briefing
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Economics weekly

US household spending in a precarious position into Q2

Ireland’s flash inflation reading for May is due later this week, and we expect it to moderate to 3.5%. This is based on energy inflation remaining high, an increase in food inflation and relatively moderate price pressure for services and core goods. Elsewhere, last week’s US consumer sentiment index plunged to a new record low, with inflation expectations picking up again; household spending looks quite precarious ahead of November’s mid-term elections; and the latest polls suggest a strong Democrat lead.

• Kevin Timoney
• Morning briefing
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