Mondi LON: MNDI reported underlying EBITDA of EUR 212 million for the first quarter of 2026, which Group CEO Andrew King said was “broadly in line with the fourth quarter of 2025” as the company navigated what he described as a challenging market environment.
King said sales volumes increased sequentially across the company’s paper grades, helped by the absence of planned maintenance shutdowns in the quarter. However, those volume gains were offset by lower average selling prices and, later in the quarter, higher energy-related input costs. He added that Mondi’s converting operations saw mixed trends, with corrugated solutions and paper bags facing margin pressure, while consumer flexibles delivered a “broadly stable performance supported by resilient end markets.”
Pricing actions as costs rise
Mondi executives repeatedly pointed to sharp cost inflation tied to geopolitical tensions in the Middle East. King said the company had seen higher energy, raw material, and logistics costs and responded with pricing actions, noting there is “an inherent time lag” but that Mondi expects these measures “to take full effect by the third quarter.”
In response to questions about the pace of pass-through, King suggested the lag could shorten in the current environment due to the speed and magnitude of inflation, particularly in resin-based applications. “The normal lag is going to be shortened,” he said of resin-linked products, adding that customers were acknowledging the need for faster adjustments given the scale of increases.
On corrugated packaging, King said there remains a meaningful amount of index-linked business, which takes time to move through, but he expects faster pass-through given the size of recent paper price increases. He characterized the traditional timing in boxes as “3-6 months,” but said it could be shorter now.
Energy credits and cost-control measures
Chief Financial Officer Mike Powell addressed questions about energy credits, stating he had been “pretty clear at the year end” that the year-over-year impact would be about EUR 60 million adverse, which he said could be averaged simply across quarters.
On cost reduction efforts, Powell emphasized that Mondi’s actions are focused on fixed costs and overheads rather than direct materials. He pointed to the company’s decision to close “another three converting sites” since the last update as part of ongoing steps to control overhead and improve efficiency by shifting production from “less sustainable converting plants into the more efficient ones.” Powell reiterated his full-year view that the company can hold its fixed cost base flat, while acknowledging that input costs are being driven by external factors.
King added that the outlook for Mondi’s cost base had changed materially since the start of the year due to the conflict-driven spike in energy and knock-on effects across other inputs, making mitigation, security of supply, and pricing actions key priorities.
Demand trends and order book commentary
Asked about whether volume improvements reflected restocking or pre-buying, King distinguished between Mondi’s own volume growth—supported by ramping up investments and gaining share in certain markets—and broader industry demand. He said the year began softly, with January and February “pretty soft year-over-year” based on industry statistics, but conditions improved sequentially as the quarter progressed.
King said Mondi’s paper order books were “strong,” reflecting a combination of factors including some pre-buying ahead of expected price increases and supply-side tightening. He cited reduced U.S. exports into Europe, containerboard stock levels that have “come off quite materially,” and industry downtime as producers struggled to make money at prevailing price levels. “The market’s tightened up,” he said, describing a “confluence of those things” supporting current price initiatives.
He also highlighted demand for kraft paper from “non-traditional sources,” particularly e-commerce, which he said was tightening the market and supporting price increase efforts.
Input costs: gas, biomass, and resins
Powell said Mondi has what he called a “very good natural hedge” from its use of biomass for a large portion of its energy needs, and described the group’s gas consumption as “super low” relative to the industry. He estimated gas spend in Europe at about EUR 100 million, noting that gas prices doubled in March before easing somewhat afterward.
On plastics, Powell said resin costs had moved “materially,” rising “40%, 50%, 60%,” but noted many contracts are index-based and that the industry is pushing through increases. He added that Mondi was not seeing availability issues “across all the categories” at the time of the call, while stressing the importance of strong supplier and customer relationships in a volatile environment.
Maintenance, forestry fair value, and capacity updates
Powell said there were no maintenance shutdowns in the first quarter and reiterated guidance for maintenance impacts broadly similar year-on-year at about EUR 100 (as referenced by management on the call). He said he would expect about EUR 20 in the second quarter and about EUR 80 in the second half.
On forestry fair value, Powell said declining wood chip prices in South Africa would affect valuation. He guided to EUR 0 for the full year, explaining that while the company typically sees roughly EUR 10 per quarter from growth, the price element would likely be negative in the second quarter. He said he would expect a price-related impact of about EUR -40 in Q2, alongside about EUR 10 of growth, resulting in roughly EUR -30 fair value for the quarter before subsequent quarters return to growth-only effects—assuming prices remain flat. He cautioned that volatility could change outcomes.
On capacity ramp-up, King said volume growth reflected ongoing ramp-up of investments made in recent years, including recycled capacity from the company’s Świecie build and increased virgin capacity. He also said the recycled containerboard market still likely requires capacity closures to balance supply and demand, adding that capacity appears to be running “well below” full rates and that sustained underutilization is “extremely expensive” given fixed cost structures.
In response to a question about the company’s Duino optimization, King said Duino remains in ramp-up and that unit costs improve as volumes rise. However, he noted Duino is exposed to higher Italian gas costs and has been “in the eye of the storm” after recent increases, describing the asset as “loss-making” at present. He said meaningful price increases underway should help mitigate that headwind and expressed confidence improvements would come through into the second half of the year.
In closing remarks, King said the outlook remains uncertain but emphasized “good pricing momentum” supported by a strong order situation. He said Mondi is seeing some improvement into the second quarter on an underlying basis and expects a broader improvement in operating profitability into the third quarter and beyond as pricing actions take full effect.
About Mondi LON: MNDI
Mondi plc, together with its subsidiaries, engages in the manufacture and sale of packaging and paper solutions in Africa, Western Europe, Emerging Europe, North America, South America, Asia, Australia, and internationally. The company operates in three segments: Corrugated Packaging, Flexible Packaging, and Uncoated Fine Paper. The Corrugated Packaging segment provides virgin and recycled containerboards for fresh fruit packaging and heavy and fragile goods transport packaging applications; and corrugated solutions, such as corrugated boxes and packaging products.
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