MAYR-MELNHOF Results for the 2001 FIRST HALF-YEAR August 28, 2001 Page 1
MM MM - GROUP MAYR-MELNHOF CARTONBOARD 8 Mills 5 Countries 2,485 Employees * PACKAGING 17 Facilities 7 Countries 2,802 Employees * TWO PROFIT CENTERS B a s is 8 /2 0 0 1 st * 1 H Y 2001 Page 2
MM GROUP Overview 1 st HY 2001 Best ever half-year results - Net income of EUR 48.5 million - a 47 % increase - Scheduled downtime adjusted cartonboard production to decrease in market demand - Satisfactory capacity utilization in the Packaging Division - 2 nd quarter net income exceeded expectations due to the disposal of Wall- Shareholdings Page 3
Strategic Position Concentration on core business (Cartonboard, Packaging) Leadership - Market and cost leadership - Best Practice in all areas of the Company Profit orientation Profit centers, ROCE, ROE, Dividend Expansion à Increase the Company s value à Consolidate market leadership Page 4
Consolidated Results 1 st HY 2001 in EUR millions 1-6/2001 1-6/2000 +/- Sales 558.9 527.0 +6.1% Operating profit 70.6 55.5 +27.2% Operating margin 12.6% 10.5% Other - net (including equity income) 5.2 (0.3) Income before income taxes and minority interests 74.7 52.7 +41.7% Net income 48.5 33.0 +47.0% in % of sales 8.7% 6.3% Basic and diluted earnings per share (in EUR) 4.04 2.75 Cash earnings 86.5 71.6 +20.8% in % of sales 15.5% 13.6% Page 5
MM GROUP: Quarters consolidated in EUR millions II/2000 III/2000 IV/2000 I/2001 II/2001 Sales 272.3 275.4 275.9 277.8 281.1 Operating profit 28.1 28.7 20.0 36.9 33.7 Operating margin 10.3% 10.4% 7.2% 13.3% 12.0% Net interest expense (1.2) (1.3) 0.4 (0.6) (0.5) Income before income taxes and minority interests 26.8 29.1 17.4 37.0 37.7 Income taxes (9.5) (9.5) (2.7) (13.0) (12.6) Net income 16.9 19.0 14.7 23.6 24.9 in % of sales 6.2% 6.9% 5.3% 8.5% 8.9% Basic and diluted earnings per share (in EUR) 1.41 1.58 1.23 1.97 2.07 Page 6
MM GROUP: Quarters in EUR millions, US GAAP % of sales 280 240 200 160 120 80 40 0 I/99 II/99 III/99 IV/99 I/00 II/00 III/00 IV/00 I/01 II/01 14% 12% 10% 8% 6% 4% 2% 0% Sales Operating margin Page 7
Sales & Operating Profit by Division Packaging Packaging Cartonboard 45% Cartonboard 23% 55% 77% Sales Operating Profit (1 st HY 2001) Page 8
Divisional Sales by Region Eastern Europe 12.2% Asia 6.6% Others 11.0% Eastern Europe 18.0% Asia 2.2% Others 1.2% EU 70.2% EU 78.6% CARTONBOARD PACKAGING (1 st HY 2001) Page 9
Group Balance Sheet as of June 30, 2001 consolidated in EUR millions, US GAAP Current assets Non-current assets Total assets Current liabilities Non-current liabilities Minority interests Stockholders equity Total liabilities and stockholders equity Liquid funds + securities Investments in fixed assets June 30, 2001 524.6 584.2 1,108.8 327.4 239.8 3.4 538.2 1,108.8 247.3 24.6 Dec. 31, 2000 485.8 564.7 1,050.5 280.0 246.9 3.4 520.2 1,050.5 235.9 70.3 Page 10
Equity to total assets 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 49.5% 48.5% 46.4% 42.5% 39.2% 1997 1998 1999 US GAAP 2000 US GAAP 1st HY 2001 US GAAP Page 11
Development ROE 18% 16.8% 16% 14% 13.9% 13.4% 12% 10% 8% 6% 4% 2% 11.3% 9.9% 0% 1997 1998 1999 US GAAP 2000 US GAAP 1st HY 2001 US GAAP* Defined: Net income / average stockholders equity * annualized Page 12
Development ROCE 28% 26% 24% 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 26.8% (incl. other - net) 19.4% 18.0% 18.1% 15.2% 1997 1998 1999 US GAAP 2000 US GAAP 1st HY 2001 US GAAP* Defined: Net income before minority interests, income taxes and net interest expense / average shareholders equity, minority interests and net debt * annualized Page 13
CARTONBOARD Overview 1 st HY 2001 Weaker demand due to persistent reduction of cartonboard customers stocks and an evident slowdown of economic growth Production was adapted to lower demand by taking downtime during the second quarter resulting in a 17 % reduction in capacity utilization (approximately 64,000 tons) - Capacity utilization decreased from 98% in Q1 to 83% in Q2 Generally stable raw materials prices allowed for stable European cartonboard prices Page 14
CARTONBOARD Overview 1 st HY 2001 Acquisition of the German board mill, Gruber+Weber Karton Acquisition and shutdown of the Swiss cartonboard producer Christ - Concentration of production and sales at the MM Deisswil mill E-commerce - MM-Community - available to all customers since June 2001 Page 15
CARTONBOARD: Mills Europe: 8 Mills in 5 Countries 13 machines Capacity: 1.5 million tons 90% Recycled Board World-wide selling organization 2,485 Employees * - Gruber+Weber Karton - Emil Christ to be closed Basis: 8/2001 * 1 st HY 2001 Page 16
CARTONBOARD Sales in nearly 100 countries Albania Denmark Indonesia Madagascar Romania Ukraine Algeria Dem.Rep. Congo Iran Malaysia Russia United Arab Emirat Argentina Dom. Republic Ireland Mali Saudi-Arabia USA Australia Egypt Iceland Malta Senegal Venezuela Austria El Salvador Israel Mauritius Singapore Vietnam Auto. Gaza a. Jericho Equador Italy Mexico Slovakia White Russia Bahrain Eritrea Ivory Coast Moldova Slovenia Belgium Estonia Jemen Morocco South Africa Benin Ethiopia Jordan Mosambique Spain Bosnia-Herzegowina Finland Yugoslavia Netherlands Sri Lanka Brazil France Kasachstan Nigeria Sudan Bulgaria Georgia Kenya Norway Sweden Burundi Germany Kirgisistan Pakistan Switzerland Cameroon Ghana Kuwait Panama Syria China Great Britain Latvia Peru Taiwan Columbia Greece Liberia Philippines Tanzania Costa Rica Guatemala Lith Poland Trinidad u. Tobago Croatia Hong Kong Luxembourg Portugal Tunisia Cyprus Hungary Lybia Rep. Honduras Turkey Czech Republic India Macedonia Reunion Uganda Page 17
CARTONBOARD : Results 1 st HY 2001 in EUR millions, US GAAP 1-6/2001 1-6/2000 +/- Sales 359.0 347.7 +3.2% Operating profit 54.6 41.6 +31.3% Operating margin 15.2% 12.0% Tonnage produced (in 000 s of tons) 619 648-4.5% Page 18
CARTONBOARD : Quarters in EUR millions, US GAAP % of sales 210 180 150 120 90 60 30 0 I/99 II/99 III/99 IV/99 I/00 II/00 III/00 IV/00 I/01 II/01 16% 14% 12% 10% 8% 6% 4% 2% 0% Sales Operating margin Page 19
CARTONBOARD : Quarters in EUR millions, US GAAP, unaudited II/2000 III/2000 IV/2000 I/2001 II/2001 Sales 1) 181.5 175.4 178.2 177.5 181.5 Operating profit 20.9 19.3 11.5 29.3 25.3 Operating margin 11.5% 11.0% 6.5% 16.5% 13.9% Tonnage produced (in thousands of tons) 319 319 283 311 308 1) incl. interdivisional sales Page 20
CARTONBOARD : Production 1 Board machine built 14 Board machines acquired 7 Board machines closed Tons 1200000 1000000 800000 600000 400000 200000 0 # of machines 16 14 12 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1st HY 2001 10 8 6 4 2 0 Page 21
CARTONBOARD: Sales Tons 1200000 1000000 800000 600000 30% 70% 25% 75% 23% 77% 17% 83% 13% 87% 17% 83% 15% 85% 17% 400000 83% 200000 0 1994 1995 1996 1997 1998 1999 2000 1st HY 2001 Europe Overseas Page 22
Waste paper price 1999 2000 2001 24 22 20 18 16 14 12 10 8 6 4 2 0-2 Page 23 Mixed waste paper in DEM / 100kg Jan 99 Feb 99 Mar 99 Apr 99 May 99 June 99 July 99 Aug 99 Sep 99 Oct 99 Nov 99 Dec 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 June 00 July 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01 Apr 01 Source: EUWID May 01 June 01 July 01 Aug 01
Pulp price 750 700 650 600 550 500 450 400 350 300 Page 24 1999 2000 2001 Bleached softwood pulp in USD / metric ton Jan 99 Feb 99 Mar 99 Apr 99 May 99 June 99 July 99 Aug 99 Sep 99 Oct 99 Nov 99 Dec 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 June 00 July 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01 Apr 01 Mai 01 June 01 July 01 Aug 01 Source: EUWID
Average price of recycled cartonboard GD II in DEM / 100 kg 1999 2000 2001 150 140 130 120 110 100 Page 25 Jan 00 Feb 99 Mar 99 Apr 99 May 99 June 99 July 99 Aug 99 Sep 99 Oct 99 Nov 99 Dec 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 June 00 July 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 Jan 01 Feb 01 Mar 01 Apr 01 May 01 June 01 July 01 Aug 01 Source: EUWID
MM PACKAGING: Overview 1 st HY 2001 Good demand in Western and Eastern Europe resulting in a generally satisfactory utilization of capacities Disposal of Wall- Shareholdings - Target of further developing the Cigarette Packaging business has not changed Site optimization continued - Concentration of the folding carton production on the most efficient sites - Closing of the German Schött printing plant at the beginning of 2002 Page 26
MM PACKAGING: Facilities 17 facilities in 7 countries 320,000 tons processed 2,802 employees * - Wall MM Gravure sold - Schött printing plant to be closed Basis: 8/2001 * 1 st HY 2001 Page 27
MM PACKAGING: Results 1 st HY 2001 in EUR millions, US GAAP 1-6/2001 1-6/2000 +/- Sales 249.3 226.2 +10.2% Operating profit 16.0 13.9 +15.1% Operating margin 6.4% 6.1% Tonnage processed (in thousands of tons) 165 162 +1.9% Page 28
MM PACKAGING: Quarters in EUR millions, US GAAP 140 120 100 80 60 40 20 % of sales 12% 10% 8% 6% 4% 2% 0 I/99 II/99 III/99 IV/99 I/00 II/00 III/00 IV/00 I/01 II/01 0% Sales Operating margin Page 29
MM PACKAGING: Quarters in EUR millions, US GAAP, unaudited II/2000 III/2000 IV/2000 I/2001 II/2001 Sales 1) 116.0 126.1 124.8 127.0 122.3 Operating profit 7.2 9.4 8.5 7.6 8.4 Operating margin 6.2% 7.5% 6.8% 6.0% 6.9% Tonnage processed (in thousands of tons) 84 78 80 87 78 1) incl. interdivisional sales Page 30
MM PACKAGING: Tonnage processed in 000's of tons 300 250 200 150 100 50 0 1993 1994 1995 1996 1997 1998 1999 2000 1st HY 2001 Page 31
MM GROUP: Outlook Demand in Q3 and Q4 highly dependent on economic development Cartonboard Division - reduction of cartonboard customers stocks came to a halt - order backlog remains at low level due to a weak economic development Page 32
CARTONBOARD: Order Backlog Tons 60,000 160000 140000 120000 100000 80000 60000 40000 20000 0 Page 33 May 97 Jul 97 Sep 97 Nov 97 Jan 98 Mar 98 May 98 Jul 98 Sep 98 Nov 98 Jan 99 Mar 99 May 99 Jul 99 Sep 99 Nov 99 Jan 00 Mar 00 May 00 Jul 00 Sep 00 Nov 00 Jan 01 Mar 01 May 01 July 01
MM GROUP: Outlook Demand in Q3 and Q4 highly dependent on economic development Cartonboard Division - reduction of cartonboard customers stocks came to a halt - order backlog remains at low level due to weak economic development - production will be adjusted to demand - raw materials prices expected to remain stable - Target: Stability of cartonboard prices in West. and East. Europe Packaging Division - slowing economy is expected to affect demand and capacity utilization Group operating profit in 2 nd HY will fall below 1 st HY Very satisfactory results expected for the 2001 year Page 34