Gruppe

Page 1

Gruppe Kennzahlen Karton Packaging

1st HALF-YEAR 2002 August 28, 2002

MAYR-MELNHOF KARTON AG

Page 2

# 1 in recycled cartonboard

Largest producer of folding cartons

Market Position in Europe

Group Key figures Cartonboard Packaging

Page 3

MM GROUP (before Graphia acquisition)

Mayr-Melnhof Group

MM-Karton 9 Mills in 6 Countries

MM-Packaging 21 Facilities in 8 Countries

Basis: 1. HJ 2002


Page 4

Concentration on core business(Cartonboard, Packaging)

Market AND cost leadership

Long-term profit orientation

- Continuous increase of earnings and dividend per share

- Increasing net value-added

Strategy and Corporate Conception


Page 5

245

282299 301

345364

0

100

200

300

400

1996 1997 1998 1999 2000 2001

Development: Net value-added

CAGR: ~ 8%

in EUR millions


Page 6

Concentration on core business(Cartonboard, Packaging)

Market AND cost leadership

Long-term profit orientation

- Continuous increase of earnings and dividend per share

- Increasing net value-added

Transparent accounting - solid balance sheet

- No „off-balance sheet“ liabilities

- High equity ratio - currently no net debt

- Low share of intangible assets



Page 7

-60

40

140

240

340

440

540

640

740

1994 1995 1996 1997 1998 1999 2000 2001 1st HY 20020%

10%

20%

30%

40%

50%

60%

Shareholders' equity Net debt Equity to total assets

in EUR millions, US GAAPin EUR millions, US GAAPin EUR millions, US GAAP

High equity ratio - currently no net debt

% Total assets


Page 8

0

200

400

600

800

1000

1200

1994 1995 1996 1997 1998 1999 2000 2001 1st HY 2002-1%

1%

2%

3%

4%

5%

6%

7%

Total assets Intangible assets % intangible assets

in EUR millionms, US GAAP

Low share of intangible assets- Low amortization risk

% Total assets


Page 9

0

20

40

60

80

100

120

140

160

180

1999 2000 2001 1st HY 2001 1st HY 2002

Capex Depreciation Cash earnings

Capex - Depreciation

In EUR millions

Target: Capex ~ 50% CE


Page 10

Best Practice in Corporate Governance- Transparent Company management and disclosure- Independent supervisory board (family shareholders not in management)- Independent auditors

(auditors no business consultants, max. 1/3 of advisory expenses for a single auditing company)

- Performance based compensation of management

Expansion will be continued Decentralized - lean organization - profit centers

Management has for long pursued the principles of the „honorable businessman“



Page 11

Increase of the Company‘s value

„A company‘s share price is justified on 10 to 20 years of value creating cash flow. Those who want to create value cannot only plan short-time. “

(Alfred Rappaport)



Page 12

MM GROUP (before Graphia acquisition)

New Management Board (since May 14, 2002)

Wilhelm Hörmanseder (48), CEO

Herbert Noichl (36), CFO

Andreas Blaschke (41), COO Consumer Packaging

Franz Rappold (49), Member of the Board


Page 13

Very successful development of business

- High capacity utilization in both Divisions

- Sharp incraese of waste paper prices necessitated price increase for cartonboard and cartons

- As expected, half-year net income slightly below

the previous year‘s record level

- Expansion continued

Acquisition of the Graphia Folding Carton Group andthe Nikopol Board Mill

Overview 1st Half-year 2002


Page 14

Consolidated Results 1st Half-year

In EUR millions, US GAAP 1-6/2002 1-6/2001 +/-

Sales 600.0 558.9 +7.4%

Operating profit 67.8 70.6 -4.0%Operating margin 11.3% 12.6%

Income before income taxesand minority interests 68.1 74.7 -8.8%

Net income 43.5 48.5 -10.3%in % of sales 7.3% 8.7%

Basic and diluted EPS (in EUR) 3.94 4.06

Cash earnings 85.8 86.5 -0.8%in % of sales 14.3% 15.5%


Page 15

(1st HY 2002)

Sales

43%

Cartonboard

Packaging

57%

Operating Profit

26%

Packaging

Cartonboard

74%

Sales & Operating Profit by Division


Page 16

Eastern Europe13.8%

Asia7.6%

Others10.0%

EU68.6%

EU79.6%

Others1.7%

Asia 2.6%

Eastern Europe 16.1%

CARTONBOARD PACKAGING

Divisional Sales by Region


(1st HY 2002)

Page 17

MM GROUP: Quarters 2001/2002


(consolidated in EUR millions) I/2001 II/2001 III/2001 IV/2001 I/2002 II/2002

Sales 277.8 281.1 287.6 276.4 294.4 305.6Operating profit 36.9 33.7 28.4 21.2 34.5 33.3Operating margin 13.3% 12.0% 9.9% 7.7% 11.7% 10.9%

Net interest expense (0.6) (0.5) (0.5) 0.1 (0.3) (0.2)Income before income taxes and minority interests 37.0 37.7 27.5 21.1 34.2 33.9

Income taxes (13.0) (12.6) (9.3) (9.3) (12.2) (12.2)Net income 23.6 24.9 18.0 11.4 21.9 21.6in % of sales 8.5% 8.9% 6.3% 4.1% 7.4% 7.1%Basic and diluted earnings per share (in EUR) 1.97 2.09 1.55 1.05 1.98 1.96

Page 18

0

40

80

120

160

200

240

280

I /99 II /99 II I /99 IV/99 I/00 II /00 II I /00 IV/00 I/01 II /01 II I /01 IV/01 I/02 II /020%

2%

4%

6%

8%

10%

12%

14%

Sales Operating margin

in EUR millions, US GAAP % of sales

MM GROUP: Quarters


Page 19

consolidated in EUR millions, US GAAP Jun 30, 2002 Dec 31, 2001

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Minority interests

Sockholders‘ equity

487.0 498.6

621.9 577.3

1,108.9 1,075.9

336.8 315.2

227.5 233.5

3.3 3.7

523.5

1,108.9 1,075.9

541.3

Total liabilities and stockholders‘ equity

Group Balance Sheets

Liquid funds and securities 192 247


Page 20

13.4%

9.9%

15.0%14.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

1999 2000 2001 1st HY 2002

Development ROE

Ø 13.7 %


Defined: Net income / average stockholders‘ equity

Page 21

24.8% 24.3%

15.2%

19.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

26%

1999 2000 2001 1st HY 2002

Development ROCE

Ø 20.9 %


Defined: Net income before minority interests, income taxes and net interest expense / average stockholders‘ equity, minority interests and net debt

Page 22

CARTONBOARD - Overview 1st HY 2002

• Positive development of sales in Europe and overseas

• High capacity utilization

97 % in 1Q , 99 % in 2Q

• Decrease of average board price

Increased share of overseas business with structurally lower prices

• Sharp rise in waster paper prices in 2Q necessitated 10% cartonboard price increase

• Higher raw material prices only put pressure on end 2Q

Cartonboard price increase has become effective at the beginning of July


Page 23

in EUR millions, US GAAP 1-6/2002 1-6/2001 +/-

Sales 396.7 359.0 +10.5%

Operating profit 50.1 54.6 -8.2%

Operating margin 12.6% 15.2%

Tonnage produced

(in 000‘s ) 742 619 +19.9%

CARTONBOARD: 1st Half-year 2002


Page 24

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

1994 1995 1996 1997 1998 1999 2000 2001 1. HY2001

1. HY2002

Europe Overseas

CARTONBOARD: Tons soldTons

70%75%

77% 83%

87% 83%

85% 81%

30%

25% 23%

17%

13% 17%

15% 19%

79%

21%

82%

18%

+ 20.9%


Page 25

0

30

60

90

120

150

180

210


2%

4%

6%

8%

10%

12%

14%

16%



CARTONBOARD: Quarters


Page 26

CARTONBOARD: Quarters 2001/2002

(in EUR millions) I/2001 II/2001 III/2001 IV/2001 I/2002 II/2002

Sales1) 177.5 181.5 185.5 179.6 189.5 207.2Operating profit 29.3 25.3 19.4 16.4 25.4 24.7Operating margin 16.5% 13.9% 10.5% 9.1% 13.4% 11.9%

Tonnage produced (in 000's) 311 308 335 321 362 3801) incl. interdivisional sales


Page 27

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1.HY

2002

0

2

4

6

8

10

12

14

16# MachinesTons

CARTONBOARD: Production

1 Board machine built 15 Board machines acquired 7 Board machines closed


Page 28

• 9 Mills in 6 Countries

• 14 Machines

• Capacity: approx. 1.5 million tons

• 91% Recycled fiber based board

• Worldwide sales organization

• 2,453 Employees (excl. Nikopol)

Basis: 1st HY 2002

CARTONBOARD: Mills

- Acquisition NIKOPOL mill


Page 29

Acquisition MM - NIKOPOL, Bulgaria

• Mill in a growth market (Central Europe, Russia, Turkey)

• Machine with high potential (4,4m trim)• Daily tonnage 200 tons (FL 800, KK 440)

• 285 employees (number decreasing)

• Dynamic management

Further Steps:

Start-up of production (expected for Sept. 02) Production of European standard quality

Positive earnings contribution not before 2003


Page 30

Source: EUWID

Development of waste paper price

0102030405060708090

100110120130140

Mixed waste paper in EUR / ton 2001 2002


Page 31

Source: EUWID

Development of board price

300

350

400

450

500

550

600

650

700

750

800

850

900GD II in EUR/ Ton

2001 2002


Page 32

MM PACKAGING - 1st Half-year 2002

• Stable demand

• Resulting from acquisitions, tonnage processed rose by 7,3 %

• Solid earnings development in „Consumer Packaging“ as well as in „Cigarette Packaging“

• Acquisition of the Graphia Group

• Site optimization continued

Production in the French facility Copacarton was ceased, as thecompany could not reach a profitable size - order volumes willbe transferred to more efficient MMP-facilities


Page 33

in EUR millions, US GAAP 1-6/2002 1-6/2001 +/-

Sales 256.8 249.3 +3.0%

Operating profit 17.7 16.0 +10.6%

Operating margin 6.9% 6.4%

Tonnage processed

(in 1.000 t) 177 165 +7.3%

MM PACKAGING: 1st Half-year 2002


Page 34

0

50

100

150

200

250

300

1993 1994 1995 1996 1997 1998 1999 2000 2001 1st HY2001

1st HY2002

MM PACKAGING: Tonnage processedin 1.000 t

177.000+ 7,3%


Page 35

0

20

40

60

80

100

120

140


2%

4%

6%

8%

10%

12%



MM PACKAGING: Quarters


Page 36

MM PACKAGING: Quarters 2001/2002

(in EUR millions) I/2001 II/2001 III/2001 IV/2001 I/2002 II/2002

Sales1) 127.0 122.3 126.2 119.2 130.9 125.9Operating profit 7.6 8.4 9.0 4.8 9.1 8.6Operating margin 6.0% 6.9% 7.1% 4.0% 7.0% 6.8%

Tonnage processed (in 000's) 87 78 80 75 88 891) incl. interdivisional sales


Page 37

• 21 Facilities in 8 Countries

• Tonnage processed 390.000 t

• approx. 4,000 employees

MM PACKAGING: Facilities

Basis: 1st HY 2002 Graphia

Incl. Graphia Group

- Closure of Copacarton


Page 38

Integration of the Graphia Group

• Rotogravure, offset- and flexo printing technologies

- An ideal strategic expansion in connection with Mayr-Melnhof’s existing cigarette packaging business

• Integration process will last until the end of 2002

• Integration costs are expected to be entirely covered by the companies‘ earnings

• Included in MM‘s consolidated accounts as from 3Q- in 2001: Sales approx. EUR 150 million; Tonnage processed 50,000 tons- approx. 1,000 employees


Page 39

Divisionalization: Consumer and Cigarette Packaging

15 Facilities A,GER,GB,F,PL,HUN,RO ~ 2,700 Employees

5 Facilities (incl. Graphia)

4 GER, 1 UKR ~ 1,300 Employees

Consumer Packaging Cigarette Packaging

Basis: 2002e

S e p a r a t e M a n a g e m e n t


Page 40

OUTLOOK • Price increases will become effective for the Cartonboard as well as the Packaging Division during 3Q

• Far reaching compensation for the strong rise in raw material costs can already be expected for 3Q especially in the Cartonboard Division

• Waste paper prices - stable on a high level

• Economic environment remains uncertain

- Customers plan on a more cautious and short-term basis

- Order backlog of the Cartonboard Division points to a continued satisfactory utilization rate also in the month of August


Page 41

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

Aug 9

7

Okt

97

Dez 9

7

Feb 9

8

Apr 9

8

Jun

98

Aug 9

8

Okt

98

Dez 9

8

Feb 9

9

Apr 9

9

Jun

99

Aug 9

9

Okt

99

Dez 9

9

Feb 0

0

Apr 0

0

Jun

00

Aug 0

0

Okt

00

Dez 0

0

Feb 0

1

Apr 0

1

Jun

01

Aug 0

1

Okt

01

Dez 0

1

Feb 0

2

Apr 0

2

Jun

02

Aug 0

2

Tons

CARTONBOARD: Order Backlog

60.000


Page 42

OUTLOOK • Further development of business highly dependent

on the dynamics of private consumption

• MM will adjust production to demand, if necessary

• Current limitations to visibility allow us to expect a continuation of the positive business trend

first of all in the third quarter


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