NORDENIA HOLDINGS GmbH

Transcription

Mondi Consumer Packaging International AG
ANNUAL REPORT FOR
THE
PERIOD ENDED
SEPTEMBER 30, 2013
Prepared and Delivered Pursuant to Section 4.03(a) of the Indenture
Governing the 9¾% Senior Second Priority Notes due 2017
MONDI CONSUMER PACKAGING
INTERNATIONAL AG
JANUARY 28, 2014
(formerly NORDENIA International AG)
Annual Report for the Period
Ended September 30, 2013
Prepared and Delivered Pursuant to Section 4.03(a) of the Indenture Governing the 9¾% Senior Second
Priority Notes due 2017
INTRODUCTION
On July 9, 2010, Mondi Consumer Packaging International AG (formerly NORDENIA International AG)
(the “Issuer”) issued its 9¾% Senior Second Priority Notes due 2017 (the “Notes”) pursuant to an Indenture,
dated July 9, 2010 (the “Indenture”), by and among the Issuer, as issuer of the Notes, Deutsche Bank AG,
London Branch, as Transfer Agent, Principal Paying Agent and Security Agent, Deutsche Bank Luxembourg
S.A., as Luxembourg Paying Agent and Registrar, and Deutsche Trustee Company Limited, as Trustee (the
“Trustee”). Capitalized terms used herein that are not otherwise defined have the meanings assigned to such
terms in the Indenture.
Section 4.03(a) of the Indenture requires, among other things, so long as any Notes are outstanding, that
the Issuer furnish to the Trustee, within 120 days after the end of the Issuer’s business year beginning with
the business year ending December 31, 2010 annual reports containing the following information with a level
of detail that is substantially comparable to the Offering Memorandum: (1) audited consolidated balance
sheet of the Issuer as of the end of the two most recent business years and audited consolidated income
statements and statements of cash flow of the Issuer for the three most recent business years, including
complete footnotes to such financial statements and the report of the independent auditors on the financial
statements; (2) pro forma income statement and balance sheet information of the Issuer, together with
explanatory footnotes, for any material acquisitions, dispositions or recapitalizations that have occurred since
the beginning of the most recently completed business year as to which such annual report relates (unless
such pro forma information has been provided in a previous report pursuant to the indenture); (3) an
operating and financial review of the audited financial statements, including a discussion of the results of
operations, financial condition and liquidity and capital resources, and a discussion of material commitments
and contingencies and critical accounting policies; (4) a description of the business, management and
shareholders of the Issuer, material affiliate transactions and material debt instruments and (5) material risk
factors and material recent developments.
Section 4.03(f) of the Indenture further requires that, contemporaneously with the furnishing of the report
discussed above to the Trustee, the Issuer will also post such report on the Issuer’s website. The Issuer will
also make available copies of such reports, if and so long as the Notes are listed on the Official List of the
Luxembourg Stock Exchange and admitted for trading on the Euro MTF market and the rules of the
Luxembourg Stock Exchange so require, at the offices of the Paying Agent in Luxembourg or, to the extent
and in the manner permitted by such rules, post such reports on the official website of the Luxembourg Stock
Exchange.
This Annual Report has been prepared, distributed to the Trustee, posted on the Issuer’s website and
posted on the official website of the Luxembourg Stock Exchange pursuant to the requirements of
Section 4.03 of the Indenture. The Issuer does not file reports with the Securities and Exchange Commission
and the preparation of this report and the posting of this Annual Report pursuant to the requirements of the
Indenture shall in no way be interpreted as an undertaking on the part of the Issuer to otherwise comply with
all of the rules and regulations that are applicable to a company subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended.
The date of this Annual Report is January 28, 2014.
(formerly NORDENIA International AG)
Annual Report for the Period
Ended September 30, 2013
TABLE OF CONTENTS
CERTAIN DEFINED TERMS USED IN THIS ANNUAL REPORT
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
PRESENTATION OF FINANCIAL INFORMATION
IMPORTANT NOTE REGARDING CONFIDENTIALITY
CONSOLIDATED FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2013 OF NORDENIA
GROUP:
AUDITED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2013
AUDITED CONSOLIDATED INCOME STATEMENT FOR THE PERIOD FROM
OCTOBER 1, 2012 TO SEPTEMBER 30, 2013
AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
PERIOD FROM OCTOBER 1, 2012 TO SEPTEMBER 30, 2013
AUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD
UNAUDITED CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013
SELECTED HISTORICAL FINANCIAL DATA
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
BUSINESS
MANAGEMENT
PRINCIPAL SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
NON-IFRS-EU FINANCIAL INFORMATION
RISK FACTORS
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT AUDITORS OF THE FINANCIAL STATEMENTS AS OF
SEPTEMBER 30, 2013
SEPTEMBER 30, 2012
DECEMBER 31, 2011
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F-73
F-148
Mondi Consumer Packaging International AG | FINANCIAL REPORT FISCAL YEAR 2013
CERTAIN DEFINED TERMS USED IN THIS ANNUAL REPORT
The following terms used in this Annual Report have the meanings assigned to them below:
“Bilateral Facilities”
The EUR 244.3 million of committed bilateral facilities (as of
June 30, 2010) that NIAG or one of its subsidiaries had with
various banks, which commitments there under nearly all were
terminated upon completion of the Refinancing Transactions.
“Consolidation Merger”
The merger of NIAG with and into the Issuer pursuant to which
the Issuer is the surviving corporation and has assumed by
operation of law all of the assets and obligations of NIAG. Any
shares of capital stock of NIAG not otherwise owned by the
Issuer or NIAG prior to such merger were converted into
shares of capital stock of the Issuer. The Consolidation Merger
has been registered in the commercial register on May 26,
2011 and has thereby become effective.
“Equity Distribution”
Collectively refers to the following payments made to the
existing equity holders of the Issuer or NIAG, as applicable,
following the completion of the Offering: (i) the purchase for
cash of shares of NIAG from certain existing shareholders that
elected to have their shares purchased by the Issuer in lieu of
exchanging them for shares of the Issuer in connection with the
Formation Transactions, (ii) a capital distribution to
shareholders of the Issuer, (iii) payments to our existing option
holders participating in our management option plan to permit
them to participate on a pro rata basis in the capital
distribution, which payments will be recorded as a reduction to
our accrued liability for our management option plan, and
(iv) the reimbursement of certain costs incurred by the Oaktree
Investment Entities in connection with their investment in
NIAG, including the Formation Transactions.
"Financial Period 2011"
The fiscal year beginning on January 1, 2011 and ending on
December 31, 2011.
"Comparison Period 2011“
The twelve months from October 1, 2010 to September 30,
2011 to be used as comparison period to the Comparison
Period 2012 and the Financial Period and 2013.
The short fiscal year beginning on January 1, 2012 and ending
on September 30, 2012.
"Comparison Period 2012“
The twelve months from October 1, 2011 to September 30,
2012 to be used as comparison period to the Financial Period
2013.
The fiscal year beginning on October 1, 2012 and ending on
September 30, 2013.
“Formation Transactions”
Collectively refers to: (i) the contribution by the Oaktree
Investment Entities of all of their shares of NIAG to the Issuer
in exchange for shares of the Issuer, which contribution was
completed on May 27, 2010, (ii) the exchange by other existing
shareholders of NIAG, who collectively held approximately
3.47 % of the outstanding capital stock of NIAG, of all of their
shares of capital stock of NIAG for an identical number of
2
shares of the Issuer upon completion of the Offering and
(iii) the purchase by the Issuer of an aggregate of
approximately 0.39 % of the outstanding capital stock of NIAG
from certain existing shareholders that elected to have their
shares purchased in lieu of exchanging them for shares of the
Issuer in connection with the Formation Transactions upon
completion of the Offering.
“Group,” “we,” “us” or “our”
Collectively refers to NIAG and its subsidiaries (including any
of their respective predecessors) for periods prior to May 27,
2010, and to the Issuer and its subsidiaries for periods
thereafter, except in each case where the context otherwise
requires.
"MCPIAG“
NORDENIA International AG)
"Mondi Group"
The group of companies comprising Mondi Limited, Mondi plc
and their respective subsidiaries, operating as a single
economic entity under a dual listed company structure.
“New Bank Facility”
The new revolving bank credit facility entered into by NIAG,
those subsidiaries of NIAG named therein, and WGZ Bank AG,
as lead arranger and administrative agent, and the other
lenders named therein, upon the completion of the Offering
that provides for aggregate borrowings of up to
EUR 100.0 million for working capital purposes and other
general corporate purposes.
“New Intercompany Facilities”
The intra group loans between Mondi Finance plc and
MCPIAG and various of its subsidiaries.
"NIAG“
Mondi Consumer Packaging International AG, formerly
NORDENIA International AG, the parent company of the
NORDENIA Group until the Issuer was founded and Oaktree
distributed its shares of NIAG into the Issuer, which became
the parent company of the NORDENIA Group at this time.
“Oaktree Capital Management”
Oaktree Capital Management, L.P., a global investment
management partnership.
“Oaktree Investment Entities”
Collectively refers to OCM Luxembourg Nordenia POF Sarl
(formerly OCM/NORDENIA POF Luxembourg S.C.A) and
OCM
Luxembourg
Nordenia
Opps
Sarl
(formerly
OCM/NORDENIA Opps Luxembourg S.C.A.), each of which is
organized under the laws of Luxembourg and controlled by
Oaktree Capital Management, and collectively own
approximately 96.2 % of the outstanding share capital of the
Issuer following completion of the Formation Transactions.
“Offering”
The offering of the Notes by the Issuer.
“Pari Passu Bank Facility”
Collectively refers to the loan agreements that NIAG had prior
to the completion of the Offering with each of Landessparkasse
zu Oldenburg and Sparkasse Bremen that provided for
aggregate borrowings of EUR 50.0 million, of which all of the
outstanding borrowings thereunder were repaid and the related
commitments terminated upon completion of the Refinancing
3
(formerly
Transactions, and thereafter to a new loan agreement that
NIAG entered into with Landessparkasse zu Oldenburg upon
the completion of the Offering that provides for aggregate
borrowings of up to EUR 10.0 million.
“RCF”
The revolving bank credit facility entered into by the Issuer
(originally by NIAG) and those subsidiaries of NHAG named
therein, and WGZ Bank AG as lead arranger and
administrative agent, and the other lenders named therein,
upon the completion of the Offering that provides for aggregate
borrowings of up to EUR 100.0 million for working capital
purposes and other general corporate purposes.
“Refinancing Transactions”
Collectively refers to: (i) the use of the proceeds from the
Offering by the Issuer to (a) make an intercompany loan to
NIAG, the proceeds of which, together with borrowings under
the New Bank Facility and the Pari Passu Bank Facility and
available cash, were used by NIAG to repay substantially all of
its existing indebtedness and to correspondingly terminate the
related commitments thereunder, (b) fund the Equity
Distribution and (c) pay the fees and expenses associated with
the foregoing transactions, and (ii) the execution and
effectiveness of the agreements related thereto.
4
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Annual Report includes forward looking statements regarding, among other things, our plans,
strategies and prospects, both business and financial. These statements are based on the beliefs and
assumptions of our management. Although we believe that our plans, intentions and expectations reflected
in or suggested by these forward looking statements are reasonable, we cannot assure you that we will
achieve or realize these plans, intentions or expectations. Forward looking statements are inherently subject
to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including
statements concerning our possible or assumed future actions, business strategies, events or results of
operations, are forward looking statements. These statements may be preceded by, followed by or include
the words “believes,” “expects,” “may,” “is expected to,” “will,” “will continue,” “should,” “would be,” “seeks,”
“anticipates,” “intends,” “plans,” “estimates” or similar expressions or the negative thereof. These statements
are based on management’s current views and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or events to differ materially from those
anticipated by such statements. Factors that could cause differences in actual results include:
•
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•
•
•
•
•
•
•
•
•
•
•
•
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•
•
•
•
our substantial leverage and our ability to meet our debt service obligations;
changes in the market conditions for our products;
competition within our industry or from products with lower cost of production;
loss of a major customer;
commoditization of our products or product substitution;
consolidation of our customers or our competitors;
price fluctuations in raw materials and energy costs;
our ability to stay abreast of changing technology in our industry;
our ability to successfully implement our business strategy of maximizing cash flow and
profitability;
the costs and difficulties of acquiring and integrating complementary businesses and technologies;
fluctuations in currency rates;
material disruptions at our manufacturing facilities;
the cost of compliance with, and any liabilities under, current and future environmental, health and
safety laws and regulations;
delays or increased costs in the production or delivery of our products and services due to our
international operations;
anti-trust and similar legislation;
our ability to protect our intellectual property, including our proprietary technology;
claims that our products or processes infringe the intellectual property rights of others;
difficulties in expanding our operations;
our ability to maintain good employee relations; and
challenges by taxing authorities to our historical or future tax positions or our allocation of taxable
income among our subsidiaries, or changes in the tax laws to which we are subject.
These risks and uncertainties, as well as other risks of which we are not aware or which we currently do
not believe to be material, may cause our actual results to be materially different than those expressed in our
forward-looking statements. We caution you not to place undue reliance on these forward-looking
statements. All forward looking statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the foregoing cautionary statements. Forward looking statements speak only as
of the date they were made. We do not undertake any obligation to make any revisions to these forwardlooking statements to reflect events or circumstances after the date of this Annual Report or to reflect the
occurrence of unanticipated events, except as required by law, including the securities laws of the United
States and rules and regulations of the Securities and Exchange Commission.
5
PRESENTATION OF FINANCIAL INFORMATION
This Annual Report contains audited consolidated financial statements of the Issuer and its subsidiaries
for the Fiscal year 2011 and the Financial Periods 2012 and 2013.
The audited financial statements of the Issuer have been prepared in accordance with IFRS-EU and, in
the opinion of management, include all adjustments, consisting of normal and recurring adjustments,
necessary for a fair presentation of results.
The audited consolidated financial statements for the Financial Period 2013 were prepared with the
Issuer as the parent company of the Group.
The fiscal year of the Issuer ends at September 30, 2013. The previous year was a short fiscal year,
beginning at Jan 1, 2012 and ending on September 30, 2012. The year before was a calendar year (Jan 1,
2011 to Dec 31, 2011) Due to the 9-month previous year period in the consolidated income statement and
the consolidated cash flow statement the disclosed information is comparative to previous year’s information
to a limited extent only. Therefore, for the purpose of comparativeness, previous year’s information provided
in this report have been adjusted to a comparable reporting period.
The preparation of financial statements in conformity with IFRS-EU requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in the financial
statements.
The financial statements are presented in euro rounded to the nearest thousand. Therefore,
discrepancies in the tables between totals and the sums of the amounts listed may occur due to such
rounding. The financial statements have been prepared under the historical cost convention.
6
IMPORTANT NOTE REGARDING CONFIDENTIALITY
This Annual Report is confidential and has been prepared exclusively for use by any holder of the Notes
or any prospective investor, securities analyst, broker-dealer or any market maker in the Notes in
accordance with Section 4.03 of the Indenture. You are authorized to use this Annual Report solely for the
purpose of evaluating your investment in, or considering the purchase of, the Notes. We have provided the
information contained in this Annual Report. Neither the delivery of or access to this Annual Report implies
that any information set forth in this Annual Report is correct as of any date after the date of this Annual
Report. You may not reproduce or distribute this Annual Report, in whole or in part, and you may not
disclose any of the contents of this Annual Report or use any information herein for any purpose other than
evaluating your investment in, or considering the purchase of, the Notes. You agree to the foregoing by
accepting delivery of, or access to, this Annual Report.
7
FINANCIAL STATEMENTS
Audited consolidated balance sheet as of September 30, 2013
Financial
period
ending
09/30/2013
kEUR
Financial
period
ending
09/30/2012
kEUR
Financial
period
ending
12/31/2011
kEUR
ASSETS
Non-current assets:
Intangible assets
Property, plant and equipment
Other financial investments
Deferred tax assets
Other financial assets
Other assets
Current assets:
Inventories
Trade receivables
Other assets
Current income tax assets
Cash and cash equivalents
Assets hold for sale
TOTAL ASSETS
8
6,632
223,926
53,294
2,953
0
79
286,883
8,381
215,925
24,788
10,715
14
244
260,067
9,395
217,329
21,067
12,429
68
243
260,531
114,554
132,131
92,343
11,152
14,739
5,694
370,612
113,139
94,151
26,893
6,622
390
33,068
274,263
104,920
85,275
15,385
5,142
500
27,336
238,557
0
0
5,326
657,496
534,330
504,415
Financial
period
ending
09/30/2013
kEUR
Financial
period
ending
09/30/2012
kEUR
Financial
period
ending
12/31/2011
kEUR
EQUITY AND LIABILITIES
Equity:
Subscribed capital
Revenue reserves
Profit attributable to shareholder of the parent
Other reserves
Equity attributable to the shareholder of the parent
Non controlling interest
Non-current liabilities:
Subordinated loans
Liabilities from bonds
Liabilities to banks
Provisions for pensions and similar obligations
Trade payables
Deferred tax liabilities
Other provisions
Other financial liabilities
Other liabilities
Current liabilities:
Liabilities to banks
Notes payables
Trade payables
Current income tax liabilities
Other provisions
Other liabilities
Liabilities for sale
TOTAL EQUITY AND LIABILITIES
9
29,190
-66,722
42,926
-6,648
-1,254
120
29,190
-79.145
13,070
-1,609
-38,494
167
29,190
-89,458
14,301
-5,360
-51.327
200
0
280,566
2,173
18,524
0
6,666
2,285
64,858
346
375,416
9,988
280,687
3,199
19,819
0
17,406
1,492
20,708
650
353,949
9,984
280,770
1,820
14,307
11
17,461
1,573
13,016
304
339,246
2,446
431
75,138
13,437
10,118
176,518
5,127
283,213
39,417
909
80,042
5,552
31,226
56,316
5,247
218,709
33,239
732
83,638
1,135
33,915
57,955
3,488
214,102
0
0
2,194
657,496
534,330
504,415
Audited consolidated income statement
for the period from October 1, 2012 to September 30, 2013
Financial
period 2012
(01/01 - 09/30
2012)
kEUR
Financial
period 2011
(01/01 - 12/31
2011)
kEUR
866,413
716,573
149,840
49,593
38,068
5,814
12,809
2,907
666,441
557,191
109,250
34,223
15,778
4,190
4,031
6,722
880,783
736,360
144,423
43,783
31,549
5,264
5,415
1,323
-243
66,024
4,192
70,216
-1,745
-25.589
42,882
0
42,882
-44
-361
52,008
-23,665
28,343
-15,298
0
13,045
0
13,045
-25
1,163
69,082
-45,845
23,238
-8,978
0
14,259
0
14,259
-40
42,926
13,070
14,299
Financial
period 2013
(10/01/201209/30/2013)
kEUR
Sales
Cost of sales
Gross profit
Selling costs
Administrative costs
Research and development costs
Other operating income
Other operating expenses
Exchange rate differences from business
operations
Operating profit
Financial result
Profit before income taxes
Income tax expenses
Profit transfer
Result from continued operations
Result from discontinued operations
Consolidated net profit
Profit attributable to non-controlling interest
Profit attributable to shareholder of the
parent
10
Audited consolidated statement of comprehensive income
Financial
period 2012
(01/01 - 09/30
2012)
kEUR
Financial
period 2011
(01/01 - 12/31
2011)
kEUR
42,882
13,045
14,259
1,116
-5,705
-1,041
-1,763
1,708
313
-5,039
3,565
-1,998
0
0
0
295
-295
0
0
0
0
0
0
-109
109
-5,686
-246
-2,912
37,196
12,799
11,347
37,240
-44
12,832
-33
11,389
-42
Financial
period 2013
(10/01/201209/30/2013)
kEUR
Items that will not be reclassified to profit or
loss:
Actuarial gains and losses from defined benefit
obligations
Income tax relating to items that will not be
reclassified to profit or loss
Items that may be reclassified subsequently to
profit or loss:
Exchange rate differences on translating
foreign operations
Result from available for sale financial assets
Affecting net profit
Not affecting net profit
Result from cash flow-hedging
Affecting net profit
Not affecting net profit
Income tax relating to items that may be
reclassified subsequently to profit or loss
Other comprehensive income, net of tax
Total comprehensive income
thereof attributable to
Shareholder of the parent
Non-controlling shareholder
11
Audited consolidated cash flow statement
Financial
period 2012
(01/01 - 09/30
2012)
kEUR
Financial
period 2011
(01/01 - 12/31
2011)
kEUR
66,024
52,006
69,082
30,444
-12,846
-38,102
1,643
25,446
-7,173
-32,448
900
28,540
-14,449
-35,415
2,449
-1,309
-331
56
524
-916
-44,940
319
-4,417
-14,763
-1,447
1,136
-9,458
129
-983
-1,033
-26,264
-25,613
379
18,935
-3,948
35,513
392
2,059
4,543
-43,638
113
-656
943
-69
-26,829
0
-495
222
-23
-36,497
1
-1,014
979
-1,267
1,866
3,643
0
0
-41,049
0
0
0
-21,423
0
0
-33,255
0
0
0
0
-10,000
-1,768
0
0
0
-1,297
0
0
0
-1,374
59,589
2,222
2,000
0
-1,220
Financial
period 2013
(10/01/201209/30/2013)
kEUR
Operating profit (EBIT including discontinued
operations)
Depreciation on intangible assets and property, plant
and equipment
Income taxes paid
Interest paid
Interest received
Financial expenses paid (less financial income
received)
Profit from the disposal of property, plant and
equipment
Other non cash-relevant income/expenditure
Changes in working capital
Change in other assets not allocated to investing or
financing activities
Change of provisions and other liabilities not allocated
to investing or financing activities
Cash flow from operating activities
Cash received from disposals of property, plant and
equipment
Cash paid for investments in property, plant and
equipment
Cash received from disposals of intangible assets
Cash paid for investments in intangible assets
Cash received from disposals of financial assets
Cash paid for investments in financial assets
Cash received from the disposal of consolidated entities
and other business units
Cash paid for investments in consolidated entities and
other business units
Cash flow from investing activities
Cash received from the supply of equity
Dividends
Cash paid for purchases of shares of other
shareholders
Cash received from the borrowing of subordinated loans
Cash paid for repayments of subordinated loans
Cash paid for repayments of non-current financial loans
Cash received from the borrowing of non-current
financial loans and bonds
Transaction costs paid in economic relation to the
borrowing of bonds
Cash received from the borrowing of current financial
loans
196,592
43,413
103,071
Cash paid from the repayment of current financial loans
Cash flow from financing activities
-206,988
37,425
-37,497
6,841
-112,950
-10,473
-29,237
4,353
-8,215
Change in cash
12
0
Audited consolidated statement of changes in equity
available
for sale
assets
kEUR
0
0
Hedging
instruments
for cash
flow
hedges
kEUR
0
0
Subscribed
capital
kEUR
29,190
0
Capital
reserve
kEUR
-177,183
0
Revenue
Reserves
kEUR
84,362
5,438
Profit
attributable
to the
shareholder
of the parent
kEUR
5,438
-5,438
0
-1,346
0
0
0
0
0
0
-1,346
843
-503
0
0
29,190
0
0
-178,026
-726
-1
89,073
14,299
0
14,299
-1,998
0
-5,174
0
0
0
-295
0
-295
109
0
109
11,389
-1
-51,327
-42
0
200
11,347
-1
-51,127
Status at 01/01/2012
Profit carried forward
Change in group of
consolidated companies
Consolidated comprehensive
income
Others
29,190
0
-178,026
0
89,073
14,299
14,299
-14,299
-5,174
0
0
0
-295
0
109
0
-51,327
0
200
0
-51,127
0
0
3,441
-3,441
0
0
0
0
0
0
0
0
0
0
29,190
0
0
-175,088
-3,989
1
95,943
13,070
0
13,070
3,565
0
-1,609
0
0
0
295
0
0
-109
0
0
12,832
1
-38,494
-33
0
167
12,799
1
-38,327
Change in group of
income
29,190
0
-175,088
0
95,943
13,070
13,070
-13,070
-1,609
0
0
0
0
0
0
0
-38,494
0
167
0
-38,327
0
0
440
-440
0
0
0
0
0
0
-3
-3
0
29,190
0
-174,648
-647
107,926
42,926
42,926
-5,039
-6,648
0
0
0
0
0
0
-37,240
-1,254
-44
120
37,196
-1,134
Acquisition of non-controlling
shares resulting from a merger
income
Others
13
Other
reserves
kEUR
-3,176
0
Taxes
kEUR
0
0
Equity
attributable
to the
shareholder
of the parent
kEUR
-61.369
0
Equity
attributable to
noncontrolling
shareholders
kEUR
-601
0
Total
Group
equity
kEUR
-61.970
0
Unaudited condensed notes to the consolidated financial statements
as of September 30, 2013
1.
Corporate information
The Group is a leading developer, producer and marketer of value-added solutions in specialty films, flexible
consumer packaging, film-based components and industrial packaging with operations in Europe, the United
States and Asia. Mondi Consumer Packaging International AG, formerly NORDENIA International AG is a
limited company incorporated and domiciled in Greven, Germany, whose shares are privately held.
The business of the Group is not significantly affected by seasonal influence. Therefore, the additional
disclosure of financial information as referred to in IAS 34.21 is not provided.
The condensed consolidated financial statements of the Group for the Financial Period 2013 were authorized
for issue in accordance with a resolution of the Board of Directors on January 24, 2014.
2.
Basis of preparation and accounting policies
Basis of preparation
The condensed consolidated financial statements for the Financial Period 2013 have been prepared in
accordance with IAS 34, as adopted in the EU.
The condensed consolidated financial statements do not include all the information and disclosures required in
the annual financial statements, and should be read in conjunction with the Group’s annual financial statements
as at September 30, 2013.
All stated amounts have been individually rounded, which may give rise to minor discrepancies when these
amounts are aggregated.
Significant accounting policies
Our consolidated financial statement are prepared in accordance with the International Financial Reporting
Standards as adopted by the European Union (“IFRS-EU”) in conformity with Regulation (EC) no. 1606/2002 of
the European Parliament and of the Council.
Detailed information regarding our accounting policies is provided in Note 2.1.2 to our consolidated financial
statements for the Financial Period 2013.
14
3.
Income/losses from held-for-sale assets (disposal groups)
The assets and debt of NORDENIA Emsdetten GmbH, Emsdetten, including the company's investment in
NORDENIA Polska Starogard GD sp. z o. o., Starogard/Poland (both part of the AFC segment) were disclosed
as held for sale as a result of the management's resolution to sell the company's assets and debt and the
approving acknowledgment by the Supervisory Board dated November 30, 2011. The sale was completed in the
financial period 2012.
Assets held for sale
Intangible assets
Deferred tax assets
Other non-current assets
Inventories
Other current assets
Liabilities relating to the assets held for sale
Pension obligations
Other non-current liabilities
Trade payables
Other current liabilities
Provisions
Accumulated income or expenses that are recorded
directly in equity and relating to the group of assets
classified as held for sale
Revenue reserves
15
2013
kEUR
2012
kEUR
2011
kEUR
0
0
0
0
0
0
0
0
0
0
0
0
0
0
177
2,046
211
98
1,797
997
5,326
0
0
0
0
0
0
0
0
0
0
0
0
725
26
800
492
151
2,194
0
0
-269
4.
Disclosures and explanatory comments on the consolidated balance sheet
a.
Financial Instruments
Within the fiscal year 2013 an amount of kEUR 1.439 (2012: kEUR 2,902, 2011: kEUR 3,893) was recognized
as expense in profit and loss for fair value changes of interest swaps that do not qualify as cash flow hedging
instruments.
The financial instruments of the Group that are carried at fair value are interest swaps, foreign currency forward
contracts, the repurchase option for the corporate bond and available for sale securities. The interest swaps and
the foreign currency forward contracts are categorized as “Level 2” financial instruments according IAS 39, i.e.
their fair value is based on valuation techniques that use observable market data. Due to the Mondi takeover the
repurchase option for the corporate bond is categorized as “Level 2” financial instrument in contrast to previous
years, where the repurchase option has been categorized as “Level 3” as observable Level 2 inputs were not
available. The available for sale securities are “Level 1” as for those financial instruments quoted marked prices
were available.
Assets/Liabilities measured at fair value:
Category
Repurchase option for corporate
bond
Foreign currency forward –
not hedged
Total financial assets
Interest swaps – not hedged
not hedged
Total financial liabilities
FAHfT
49,959
FAHfT
151
50,110
0
FLHfT
FLHfT
Category
bond
not hedged
not hedged
16
September 30,
2012
7,429
FAHfT
15
7,444
-8,562
FLHfT
FLHfT
Level 1
Level 3
49,959
0
0
0
151
50,110
0
0
0
0
0
0
-16
-16
0
0
0
Level 1
Level 2
0
Level 3
0
7,429
0
0
15
15
-8,562
0
7,429
0
0
0
-240
-8,802
0
0
0
-240
-8,802
December 31,
2011
Level 2
0
-16
-16
FAHfT
Category
bond
not hedged
not hedged
September 30,
2013
Level 1
Level 2
Level 3
FAHfT
FAHfT
FLHfT
FLHfT
2,262
0
0
2,262
234
2,496
-5,660
0
0
0
234
234
-5,660
0
2,262
0
-332
-5,992
0
0
-332
-5,992
0
0
b.
Cash, Cash equivalents and Financial Liabilities
From January 1, 2012 to September 30, 2012 the level of cash and cash equivalents increased from
kEUR 27,336 to kEUR 33,068. The major financial liabilities are the EUR 280m Notes of 9 July 2010, the Pari
Passu Bank Facility of kEUR 10,000 and the New Bank Facility which provides for aggregate borrowings of up
to kEUR 100,000. The New Bank Facility is used for short term borrowings. As of September 30, 2012
kEUR 38,154 (kEUR 35,000 for main drawing and kEUR 3,154 for drawings under ancillaries) and together with
local short term financing this aggregates to kEUR 39,417 of short term interest-bearing loans and borrowings.
Additionally, two subsidiaries financed their machinery purchases with long term KfW loans with a nominal
value of kEUR 4,490 with annual repayments, which were entered at the end of 2011/beginning of 2012.
From September 30, 2012 to September 30, 2013 the level of cash and cash equivalents decreased from
kEUR 33,068 to kEUR 5,694. In this period were major changes in the general financing structure of the Group.
The Issuer was still financed by the EUR 280m Notes. The Pari Passu Bank Facility of kEUR 10,000 and the
New Bank Facility which provides for aggregate borrowings of up to kEUR 100,000 were paid back. As of
September 30, 2013 a remaining aggregated amount of kEUR 5,050 of local financing (including KfW loans)
were outstanding.
The following charts set our debt position:
Net financial debt
09/30/2013
kEUR
Non-current financial debt
Debentures
Interest-bearing loans and borrowings against
financial institutions and financing companies of the
Mondi-Group
Liabilities from finance leases
Current financial debt
Debentures
Interest-bearing loans and borrowings against
financial institutions and financing companies of the
Mondi-Group
Current financial assets
09/30/2012
kEUR
12/31/2011
kEUR
230,606
273,258
278,508
61,762
13,188
11,804
5,147
0
6,428
0
6,960
0
0
0
0
29,217
39,417
33,239
431
530
795
909
962
732
5,694
321,999
33,068
300,927
27,336
304,868
Our net financial debt of kEUR 321,999 million as of September 30, 2013 is higher than the net financial debt of
kEUR 300,927 as of September 30, 2012. The increase was mainly caused by a change of the fair value for
NORDENIA’s redemption options for the EUR 280m Notes. The change in the fair value of the redemption
options is at kEUR 42,531 (September 30, 2013: kEUR 49,960; September 30, 2012: kEUR 7,429).
Sale & Lease back Mondi Jackson Inc. (formerly NORDENIA U.S.A., Inc.)
Net Financial Debt does neither include the finance lease obligations under a sale and lease back agreement
nor the Industrial Revenue Bonds in respect to Mondi Jackson Inc., Jackson, Missouri (U.S.A.) (JAC).
In December 2000, JAC entered into an agreement with the County of Cape Girardeau, Missouri. As part of the
agreement, JAC sold to the County approximately USD 17 million in property and equipment, and then agreed
17
to lease such assets from the County. No gain or loss was recorded on the sale. The County paid JAC for the
assets by issuing 9.5 % Industrial Revenue Bonds to JAC for the same amounts. JAC accounted for this
transaction as a financing agreement and recorded a finance lease obligation. Under the agreement JAC makes
annual lease interest payments equal to the amount of interest earned annually on the bonds. The Industrial
Revenue Bonds matured on December 1, 2012. At this time JAC returned the Bonds to the County in payment
of the principal balance outstanding on the finance lease obligation and repurchased the assets for USD 10, as
provided for in the agreement. The agreement related to the equipment includes fixed lease payments over the
term of the lease and is non-cancellable.
At September 30, 2013 this obligation amounted to kEUR 0 (at September 30, 2012: kEUR 13,148; at
December 31, 2011 kEUR 13,146).
5.
Segment information
The reporting of the Group for management purposes is structured by type of product in divisions and
geographic regions. According to internal controlling, the divisions are divided into Advanced Films &
Components (AFC), Consumer Goods Packaging (previously named Consumer Flexible Packaging) (CGP),
and Services (for service providers). This classification is based on the fixed allocation of the individual
companies. The AFC division manufactures and sells a variety of specialty films and film-based components,
including components for diapers and feminine hygiene products, specialty films such as laminating films, label
films and surface protection films, and industrial packaging. The CGP division is a fully integrated manufacturer
of flexible consumer packaging and it focuses on meeting the flexible packaging requirements of multinational
and regional customers. Both operating divisions operate in the endmarkets “Hygiene”, “Converting FMCG”,
“Food”, “Petcare&Garden Products”, “Beauty & Healthcare, Detergent & Cleansing Agents” and “Industrial”.
The companies of the Service division primarily render intercompany services.
18
The following table presents a summary of our segment information generated by our two operating divisions for
the periods, including reconciliation to total group numbers:
Financial period
2013
Financial period
2012
Financial period
2011
Sales volume in ktons
AFC
CGP
Total AFC&CGP
Services
Reconciliation
Group
155.0
84.9
240.0
0.0
-9.0
230.9
64.6%
35.4%
100.0%
126.6
60.2
186.8
0.0
-5.9
180.9
67.8%
32.2%
100.0%
170.5
66.9%
84.2
33.1%
254.6 100.0%
0.0
-10.0
244.7
Net sales in EUR million
AFC
CGP
Total AFC&CGP
Services
Reconciliation
Group
521.6
380.4
902.0
9.6
-45.2
866.4
57.8%
42.2%
100.0
422.0
269.1
691.1
7.9
-32.6
666.4
61.1%
38.9%
100.0%
566.7
61.7%
352.0
38.3%
918.7 100.0%
10.8
-48.7
880.8
EBITDA in EUR million
AFC
CGP
Total AFC&CGP
Services
Reconciliation
Group
64.1
36.7
100.9
-3.6
-0.7
96.5
66.4%
38.1%
104.5%
-3.8%
-0.7%
100.0%
54.6
24.0
78.6
-1.2
0.1
77.5
70.4%
31.0%
101.4%
-1.5%
0.1%
100.0%
76.3
78.2%
30.9
31.7%
107.2 109.8%
-8.5
-8.7%
-1.1
-1.1%
97.6 100.0%
adj. EBITDA according to RCF in
EUR million *)
AFC
CGP
Total AFC&CGP
Services
Reconciliation
Group
64.4
36.7
101.1
0.5
0.1
101.6
63.4%
36.1%
99.5%
0.4%
0.1%
100.0%
54.5
25.4
80.0
-4.2
0.1
75.9
71.9%
33.5%
105.4%
-5.6%
0.2%
100.0%
75.9
74.2%
32.1
31.4%
108.0 105.6%
-5.0
-4.8%
-0.8
-0.7%
102.3 100.0%
20.3
23.0
43.3
0.7
-0.1
43.9
46.2%
52.4%
98.6%
1.6%
-0.2%
100.0%
11.9
11.4
23.3
0.5
-0.0
23.7
50.0%
48.1%
98.0%
2.0%
0.0%
100.0%
20.0
50.2%
18.7
46.9%
38.6
97.2%
1.1
2.8%
-0.0
0.0%
39.8 100.0%
Capital Expenditures in EUR million
AFC
CGP
Total AFC&CGP
Services
Reconciliation
Group
19
6.
Contingent liabilities and other financial obligations
a.
Contingent liabilities
09/30/2013
kEUR
Guarantees on customer line of credits
b.
0
09/30/2012
kEUR
187
12/31/2011
kEUR
319
09/30/2012
kEUR
12/31/2011
kEUR
Other financial obligations
09/30/2013
kEUR
Purchase commitments for investments including
commitments for future expenses
Obligations from non-cancelable operate leasing
agreements
thereof due within 1 year
thereof due between 1 - 5 years
thereof due within more than 5 years
Total
11,807
12,552
15,776
17,688
4,060
10,834
2,794
29,495
18,628
4,128
10,551
3,949
31,180
21,790
3,603
10,206
7,981
37,566
Other financial obligations mainly relate to obligations from maintenance contracts.
7.
Factoring Facility
There was an off-balance sheet receivables factoring arrangement under a Receivables Purchase Agreement,
dated November 8, 2001 (and last amended on December 20, 2006), between NORDENIA International AG, as
assignor, and Kaiserplatz No. 5 Limited, as assignee. The maximum aggregate purchase amount under the
Factoring Facility at any one time is limited to EUR 70 million and US$10 million.
Under the terms of this Factoring Facility, the Issuer may sell and assign certain of its receivables that are
denominated in Euros or U.S. dollars to the counterparty thereto, who is, subject to customary conditions,
obligated to buy and accept such receivables at a purchase price of approximately 90.5 % of the nominal
amount of such receivables. The outstanding amounts sold under the Factoring Facility amounted on
December 31, 2008 to kEUR 46,294, on December 31, 2009 to kEUR 37,365, on December 31, 2010 to
kEUR 42,403, on December 31, 2011 to kEUR 49,571 and on September 30, 2012 to kEUR 52,691 in total.
During the Financial Period 2013 the factoring facility was cancelled.
8.
Taxes
At September 30, 2012, Mondi Consumer Packaging International AG was the controlling company of major
German subsidiaries for income tax purposes. Upon conclusion of a profit transfer agreement with its parent
Mondi Holding Deutschland GmbH, the Company became a controlled company itself effective October 1, 2012.
Now therefore and due to the fact that a tax redebiting agreement was not entered into with the controlling
company, neither current tax expenses nor deferred tax assets or liabilities are disclosed in the consolidated
financial statements as at September 30, 2013 for the German companies that are part of the fiscal unit.
Therefore our income tax expenses include non-periodic expenses for German companies only.
Foreign income taxes are based on pre-tax income or loss. For the Financial Period 2013, the income tax rate
for foreign jurisdictions ranged from 10.0 % to 37.0 %. Our Group effective tax rate was 15.7 % for the year
ended September 30, 2013.
20
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth our selected audited historical financial data for the periods ended and at the dates
indicated below. We have derived the historical consolidated financial data for the fiscal periods ended
September 30, 2013, September 30, 2012 and December 31, 2011 from the consolidated financial statements
of NIAG respectively the Issuer, which are included elsewhere in this financial report. The historical consolidated
financial statements of NIAG respectively the Issuer were prepared in accordance with IFRS-EU.
The following summary financial data set forth below should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial
statements of NIAG respectively the Issuer and notes thereto, included elsewhere in this financial report.
Financial Period Ended
September 30, / December 31,
2013
2012
2011
(in thousands of euros)
Consolidated Income Statement Data:
Sales
Cost of sales
Gross profit
Selling costs
Exchange rate differences from business operations
Operating profit
Financial result
Income tax expenses
Profit transfer
Profit attributable to non-controlling interest
Profit attributable to shareholder of the parent
866,413
716,573
149,840
49,593
38,068
5,814
12,809
2,907
666,441
557,191
109,250
34,223
15,778
4,190
4,031
6,722
880,783
736,360
144,423
43,783
31,549
5,264
5,415
1,323
-243
66,024
4,192
70,216
-1,745
-25,589
42,882
0
42,882
-44
42,926
-361
52,008
-23,665
28,343
-15,298
0
13,045
0
13,045
-25
13,070
1,163
69,082
-45,845
23,238
-8,978
0
14,259
0
14,259
-42
14,301
As of September 30, / December 31,
2013
2012
2011
Consolidated Balance Sheet Data:
(1)
Working capital
Total assets
(2)
Net debt
Total equity
21
5,694
171,845
223,926
657,496
321,999
-1,134
33,068
128,973
215,925
534,330
300,927
-38,327
27,336
109,468
217,329
504,415
304,868
-51,127
Financial Period ended
2013
2012
2011
Other Financial Data:
(3)
Capital expenditures
(4)
EBITDA
(4)
Adjusted EBITDA according to RCF
(5)
Gross Cash flow
43,908
96,502
101,633
57,725
23,773
77,453
75,853
52,080
39,776
97,624
102,305
62,529
(1)
We define working capital as the sum of inventories and trade receivables less trade payables. For this purpose, we adjust trade
receivables and payables as recorded on our consolidated balance sheet to reflect certain items. See “Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Working Capital” for additional
information with respect to these adjustments and how we calculate working capital.
(2)
We define net debt as the sum of financial debt (subordinated loans (including shareholder loans), liabilities to banks (both current
and noncurrent) and notes payable) and finance lease obligations, less cash and cash equivalents and the aggregate principal
amount of industrial revenue bonds that we received as consideration in connection with a sale and leaseback of our facility
located in Jackson, Missouri (U.S.A.), in each case as such amounts are recorded on our consolidated balance sheet. We
currently do not have any outstanding shareholder loans. Net debt does not include any amounts utilized under the Factoring
Facility.
(3)
We define capital expenditures as gross additions to our property, plant and equipment and intangible assets for the applicable
period as reflected on our consolidated balance sheet as of the end of such period.
(4)
EBITDA and Adjusted EBITDA according to RCF are included in this Annual report because they are key performance indicators
relevant for the covenants in the RCF financing contracts. See “Presentation of Financial and Other Data-Non-IFRS-EU Financial
Information” for information on how we calculate EBITDA and Adjusted EBITDA according to RCF and the limitations of these
measures as analytical tools.
(5)
We define gross cash flow as Adjusted EBITDA according to RCF less Capital expenditures. We believe that gross cash flow is
most appropriate to reflect the performance of our conversion business not considering swings in working capital due to raw
material price changes.
22
The following is a reconciliation of EBITDA and Adjusted EBITDA according to RCF to consolidated net profit,
the most directly comparable IFRS-EU measure:
Income tax expenses
Financial result
(a)
Depreciation and amortization
EBITDA
(b)
Implied interest expenses on Factoring Facility
(c)
Management option plan expenses
(d)
Management fees
(e)
Restructuring expenses (income)
Severance payments
(f)
Gain/loss on disposal of assets
(g)
Unusual and other items
Extraordinary expenses from capital market projects
Extraordinary expenses from Post Merger Integration
Mondi/Nordenia
(h)
Structuring expenses Issuer/Merger related costs
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Fiscal Period Ended
2013
2012
2011
42,882
1,745
21,397
30,478
96,502
269
-287
0
779
-165
18
-51
0
13,045
15,298
23,665
25,446
77,453
1,117
-5,364
0
842
957
13
403
-36
14,259
8,978
45,845
28,541
97,624
1,235
511
156
406
797
-1,359
13
1,978
4,568
0
101,633
468
0
75,853
0
945
102,305
Includes depreciations on fixed assets (property, plant and equipment) and amortization of intangible assets.
Represents the implied interest component of the discount from the sale of receivables under the Factoring Facility. This implied
interest is not otherwise recorded in our consolidated income statement as interest expense. This amount relates to actual funding
costs incurred by the counterparty to the Factoring Facility.
Represents non-cash compensation charges recorded in connection with the vesting of stock options issued under NIAG’s
respectively the Issuer’s management stock option plan.
Represents advisory fees paid to Oaktree Capital Management pursuant to an advisory agreement between Oaktree Capital
Management and NIAG respectively the Issuer.
Represents the effects of reorganization and restructuring expenses or income incurred in connection with the sale or closure of
certain operations and final consolidation effects.
Represents the net gain or loss from the disposal of assets by certain operating subsidiaries.
Relates primarily to the release of accruals from prior years and the revaluation of pension provisions. In 2010 the major effect
results from professional fees in connection with the evaluation of an acquisition project.
Relates to consulting and notary costs incurred in connection with the formation of the Issuer and the preparation of the merger
NIAG/Issuer.
23
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion together with the audited financial statements and related notes
thereto included elsewhere in this Annual Report. The statements in this discussion regarding industry outlook,
our expectations regarding our future performance, liquidity and capital resources and other non-historical
statements in this discussion are forward-looking statements. These forward-looking statements are subject to
numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in the
section “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report. Our actual results may
differ materially from those contained in or implied by any forward-looking statements.
Overview
We are a leading developer, producer and marketer of value-added solutions in specialty films, flexible
consumer packaging, film-based components and industrial packaging with operations in Europe, the United
States and Asia. We focus on the production of technologically advanced flexible packaging solutions and films,
with an emphasis on innovation and customization. We operate fully-invested manufacturing facilities with
advanced production capabilities covering the entire production process, including resin compounding, blown
and cast film extrusion, flexographic and rotogravure printing, laminating, coating, roll-slitting, bag making, laser
cutting, incorporation of specialty features and recycling. On September 30, 2013, we had 2.800 employees.
We operate primarily through two divisions: AFC and CGP. The AFC division manufactures and sells a
variety of specialty films and film-based components, including components for diapers and feminine hygiene
products, specialty films such as laminating films, label films and surface protection films, and industrial
packaging. The CGP division is a fully integrated manufacturer of flexible consumer packaging and it focuses on
meeting the flexible packaging requirements of multinational and regional customers in the following end-market
segments: Hygiene, Converting FMCG, Food, Petcare & Garden Products, Beauty & Healthcare, Detergent &
Cleansing Agents and Industrial.
The following table presents a summary of our sales generated by our two operating divisions for the
periods presented as a percentage of the total unconsolidated sales of those divisions:
Comparable Period
ended September 30, / December 31,
2013
2012
2011
%
%
%
Division
Advanced Films &Components
Consumer Goods Packaging
Total
57.8%
42.2%
100.0%
61.1%
38.9%
100.0%
61.7
38.3
100.0
For accounting purposes, we report the results of each of our divisions as a separate division. In addition,
we report our IT services and research and development, financing and administration activities as an additional
division that we refer to as “Services.” Historically, our sales generated by our Services division have not been
material.
We conduct all of our operations through subsidiaries. As of September 30, 2013, we had an aggregate of
11 subsidiaries, of which 4 were located in Germany. In general, each of our principal manufacturing facilities is
held by a separate subsidiary. As of September 30, 2013, all of our significant subsidiaries were wholly owned
by us, except for outstanding minority interests of a subsidiary that owns our facility in Barcelona, Spain. For
accounting purposes, we consolidate the results of operations of these subsidiaries with our results of
operations and reflect these minority interests on our consolidated income statements as profit attributable to
non-controlling interest. In addition, we owned a 50.0 % interest in a joint venture located in Dalian, China, until
26 September 2012 and for accounting purposes consolidate its results of operations with our results of
operations only to the extent of our pro rata 50.0 % ownership interest.
24
Our global platform is currently comprised of 13 operating facilities located in eight countries across Europe,
North America and Asia. We actively manage our portfolio of manufacturing facilities to optimize our overall
operating efficiency and allocation of resources. In that regard, we have made significant investments to expand
our production capacity at certain of our facilities located in Germany, Poland, Hungary, USA and Russia. From
2007 to 2013, we made an aggregate of EUR 239 million of capital expenditures across all of our facilities, of
which more than half increased our production capacity.
During the same period, we also divested a number of under-performing facilities and businesses, including
our 50.0 % ownership interest in Coronor Composites GmbH in 2009 and our facilities located in the
Netherlands and France in 2007. We sold our facility located in Morocco in February 2010, the assets and the
operative business of our facility in Emsdetten, and our facility in Starogard/Poland and our 50 % interest in a
facility in Dalian/China in 2012. The results of operations from these asset dispositions are reflected in our
consolidated income statements as results from discontinued operations as of the beginning of the fiscal year in
which they were offered for sale by us. In some cases, these asset dispositions affect the comparability of our
results of operations from period to period.
Factors Affecting Our Results of Operations
Our results of operations are affected by a number of external factors, including changes in prices of raw
materials, foreign currency exchange rates, general economic conditions in our principal markets and changes
in our product mix. Each of these factors is briefly discussed below.
Changes in Prices of Raw Materials
Raw materials comprise a significant portion of our sales. For the Financial Period 2013 our raw material
costs represented 73.1 % of our cost of sales. The principal raw materials we use to manufacture our products
are polyethylene resins; other raw materials include non-wovens, purchased films, fabrics, inks, adhesives and
transit packaging materials. We purchase raw materials from a range of suppliers with the objective of
optimizing quality, service and price and securing a stable supply. We generally purchase most of our raw
materials at spot market prices and, for the most part, do not maintain large inventories of raw materials beyond
the amounts we need to meet actual orders from customers. For the financial year ended September 30, 2013,
we purchased approximately 169,000 tons of resins for use in our operations. As a significant buyer of resins,
we have historically been able to negotiate attractive and flexible terms with our suppliers, such as volume
discounts and annual rebates.
All of the raw materials we use in our manufacturing processes are commodities and subject to significant
price volatility. A significant driver of the volatility of the raw materials we use is, amongst others, the price of
crude oil, as the production of most of our products require crude oil based raw materials. Despite significant
fluctuation in prices of polyethylene resins in recent years, we have been successful in substantially mitigating
the effect of rising resin prices due to the resin cost pass-through provisions in our framework agreements that
cover a substantial proportion of our sales. In 2013, approximately 81.9 % of our sales were made under
framework agreements with our customers that include a resin cost pass-through provision. These provisions
generally operate to automatically adjust our selling prices, subject to a one to six month time lag (with an
average time lag of three months), as a result of changes in spot prices in the resin market. Over the three-year
period from 2011 to 2013, our gross profit per kg sold stayed relatively stable around EUR 0.59-0.65 per kg
while polyethylene resin prices experienced sharp fluctuations.
In the short term, our results of operations are significantly impacted by fluctuations in polyethylene resin
prices due to the time lag between changes in the spot prices in the resin market and the corresponding
changes to our selling prices under our framework agreements. In periods in which polyethylene resin prices are
increasing, our gross margin will be negatively impacted during the time lag period. Conversely, during periods
where polyethylene resin prices are decreasing, our gross margin will be favorably impacted during the time lag
period.
25
Foreign Currency Exchange Rates
As a result of our global operations, we generate a significant portion of our sales and incur a significant
portion of our expenses in currencies other than the euro, including the Chinese yuan, Hungarian forint,
Malaysian ringgit, Polish zloty, Russian ruble and U.S. dollar. Our results of operations are impacted by
currency exchange rate fluctuations to the extent we are unable to match revenues received in foreign
currencies with expenses incurred in the same currency. For example, where we have significantly more
expenses than sales generated in a foreign currency, our profit from operations in that location would be
adversely affected in the event that the euro depreciates against that foreign currency. We did in the past and
will from time to time, as and when we determine it is appropriate and advisable to do so, seek to mitigate the
effect of exchange rate fluctuations through the use of derivative financial instruments.
We present our consolidated financial statements in euros. As a result, we must translate the assets,
liabilities, revenue and expenses of all of our operations into euros at then-applicable exchange rates.
Consequently, increases or decreases in the value of the euro may affect the value of these items with respect
to our non-euro businesses in our consolidated financial statements, even if their value has not changed in their
original currency. For example, a stronger euro will reduce the reported results of operations of the non-euro
businesses and conversely a weaker euro will increase the reported results of operations of the non-euro
businesses. These translations could significantly affect the comparability of our results between financial
periods and/or result in significant changes to the carrying value of our assets, liabilities and stockholders’
equity. We record the effects of these translations in our consolidated income statements as “Exchange rate
differences from business operations.”
Consumer Spending
The principal factor affecting the demand for our products, both globally and regionally, is the general level
of economic growth and the level of consumer spending, in particular with regard to discretionary consumer
spending. Since the markets for plastic-based films and flexible packaging products in many industrialized
countries are generally maturing, there is a close correlation between consumer consumption growth and
demand for film and packaging products.
Changes in Product Mix
Our results of operations have in the past been, and will continue to be in the future, impacted by changes
in our product mix. We manufacture and sell a wide variety of packaging products to meet the diverse needs of
our multinational and regional customers with a focus on the production of technologically advanced flexible
packaging solutions and films and on innovation and customization. Our products have different average selling
prices and gross margins. In general, our products in technically demanding product areas have higher average
selling prices and gross margins as compared to our products used in less demanding applications. Our
strategy is to continue to innovate and improve existing products and technologies, as well as to develop new
products to prevent commoditization and replace our existing lower valued-added products with more
technically advanced products. Factors that influence our product mix in a particular period include the timing
and roll-out of new products and the demand for existing products.
Changes in the prices for energy
Our results of operations are affected by fluctuations in the prices for energy as our production processes
and transportation of our products require significant quantities of energy. When energy prices rise, we may, in
many cases, not be able to off-set or pass on our increased energy costs to our customers under the existing
agreements. In addition, we do not actively hedge against the risk of rising energy prices by using derivative
financial instruments. Therefore, price increases directly result in increased costs for our divisions. We have
contracts with energy suppliers for German subsidiaries which fix energy prices for 2013 and 2014 to mitigate
the medium-term risk of energy price increases. A new contract for 2015 has not yet finished.
26
Comparability of operating results
Our divestments and the translation of our foreign assets affect the comparability of our operating results.
We divested a number of under-performing facilities and businesses in the last seven years. The results of
operations from these asset dispositions are reflected in our consolidated income statements as results from
discontinued operations as of the beginning of the fiscal year in which they were offered for sale by us. In some
cases, these asset dispositions affect the comparability of our results of operations from period to period.
In addition, we present our consolidated financial statements in euros and must translate the assets,
liabilities, revenue and expenses of all of our operations into euros at then-applicable exchange rates.
Translations could significantly affect the comparability of our results between financial periods.
Furthermore, the consolidated financial statements and the notes thereto of Mondi Consumer Packaging
International AG (former Nordenia International AG) as of and for the fiscal year ended on September 30, 2013
contain additional audited financial information for the same period of the year 2012 (previous year information)
for reasons of comparability (see “General Information—Presentation of Financial Information”).
Components of Revenue and Expenses
Sales
We generate our sales principally from the manufacture and sale of customized, plastic flexible packaging,
films and hygiene components. During the Financial Period 2013, approximately 91.3 % of our sales were
generated from sales of products used as either packaging for, or components in, FMCG. The remainder of our
sales were generated from other products for applications across multiple industries. The most significant end
users of our products include customers in the following end-market segments: Hygiene, Converting FMCG,
Food, Petcare & Garden Products, Beauty & Healthcare, Detergent & Cleansing Agents and Industrial.
Sales include revenues from the sale of products and services less trade discounts and rebates, as well as
incidental revenues from the sale of waste materials, commissions and revenues from the re-debiting of setup
costs, engravings and cliches. Revenue from sales of products is recognized upon transfer of ownership and
risks to the customer if the consideration is stipulated or determinable and it is probable that the corresponding
receivable will be settled.
During the fiscal years ended September 30, 2013 and 2012 and December 31, 2011, our 10 largest
customers represented approximately 65.9 %; 65.7 % and 62.8 % of our sales, respectively. During the same
three years, P&G accounted for approximately 39.4 %, 39.1 % and 37.4 % of our sales, respectively. No other
customer accounted for more than 10 % of our total sales during these years.
During the fiscal years ended September 30, 2013 and 2012 and December 31, 2011, our Advanced Films
& Components division accounted for 57.8 %; 61.1 % and 61.7 % of our sales, respectively. Our Consumer
Flexible Packaging division accounted for 42.2 %; 38.9 % and 38.3 % of our sales, in each case of the total
unconsolidated sales of those two divisions.
27
Expenses
Our operating expenses primarily consist of:
•
•
•
•
•
•
cost of sales;
selling costs;
administrative costs;
research and development costs;
other operating expenses; and
exchange rate differences from business operations.
Of the foregoing, cost of sales, selling costs and administrative costs are our primary operating expenses,
accounting collectively for 92.8 %, 91.1 % and 92.2 % of our sales during the fiscal ended September 30, 2013
and 2012 and December 31, 2011, respectively. Each component of our operating expenses is described in
further detail below.
Cost of Sales. Cost of sales comprises costs of sold products and services. Cost of sales includes directly
attributable costs such as material, manufacturing personnel, energy, warranty costs, depreciation and
amortization, maintenance and consumables. Our costs of sales are primarily variable in nature. Cost of sales
accounted for approximately 82.7 %, 83.6 %, and 83.6 % of our sales for the fiscal years ended September 30,
2013 and 2012 and December 31, 2011, respectively.
Our raw material costs are the primary driver of our cost of sales, accounting for approximately 73.1 %,
72.6 % and 74.7 % of our cost of sales for the fiscal years ended September 30, 2013 and 2012 and
December 31, 2011, respectively. Manufacturing personnel expenses also significantly impact our cost of sales,
accounting for approximately 13.1 %, 13.1 %, and 12.9 % of our cost of sales for the fiscal years ended
September 30, 2013 and 2012 and December 31, 2011, respectively. Our raw material costs and personnel
expenses are expected to continue to be key components of operating expenses.
As previously discussed, we attempt to mitigate the risk of volatile resin prices by seeking to include resin
cost pass-through provisions in our customer framework agreements. These provisions generally operate to
automatically adjust our selling prices, subject to a one to six month time lag (with an average time lag of three
months), as a result of changes in spot prices in the resin market. During 2013, we estimate that approximately
81.9 % of our sales were covered by framework agreements that contained a resin cost pass-through provision
and that the effective time lag for resin pass-through on these sales was approximately three months.
Selling Costs. Selling costs represent the costs associated with the marketing and shipping of our products
and services. These costs include freight and commissions, personnel expenses, depreciation and amortization
and other selling costs. Selling costs accounted for approximately 5.7 %, 5.1 %, and 5.0 % of our sales for the
fiscal years ended September 30, 2013 and 2012 and December 31, 2011, respectively.
Administrative Costs. Administrative costs represent overhead costs associated with support functions,
such as finance, human resources, IT, outside professional fees (legal and accounting) and senior
management. Typically, costs of these support functions are wages and benefits, systems costs, insurance and
professional services. Administrative costs are generally fixed in nature and were approximately 4.4 %, 2.4 %,
and 3.6 % of our sales for the fiscal years ended September 30, 2013 and 2012 and December 31, 2011,
respectively.
Research and Development Costs. Research and development costs that are not capitalized are directly
recorded in profit or loss when they occur. These costs represent expenses related to the development of new
products, processes or technologies, including expenses of our application technique departments and testing
costs. Research and development costs also include personnel costs, material costs, license costs, rental and
leasing fees and depreciation related to our research and development activities. Research and development
costs accounted for approximately 0.7 %, 0.6 %, and 0.6 % of our sales for the fiscal years ended September
30, 2013 and 2012 and December 31, 2011, respectively.
28
Other Operating Income. Other operating income consists of income from asset sales, incidental
transactions, rental contracts, reversal of allowances on bad debt, provisions and accrued liabilities (until 2010
only, see chapter 2 Changes in accounting methods), insurance refunds, compensation of damages, cost
transfers and income related to other accounting periods.
Other Operating Expenses. Other operating expenses represent a collection of all expenses which are not
allocated to other functional areas. These costs include losses from the disposal of property, plant and
equipment and intangible assets, depreciation of receivables, expenses from allowances on bad debt and
certain non-periodic expenses, such as expenses from tax audits and tax penalties.
Exchange Rate Differences from Business Operations. Exchange rate differences from business
operations represent expenses and income from the translation of foreign currency items from business
operations. In this respect, business operations include all of our activities that are not attributed to financing
activities. Exchange rate differences from business operations includes exchange rate differences from: trade
receivables and payables; intercompany cash accounts; foreign currency hedging of business transactions;
and payments in foreign currency related to other receives and payables, such as payments to supervisory
board members and auditing companies.
Financial Result
We generally classify those items that are recorded in financial result in the following categories:
Interest Income from Loans. Interest income from loans consists primarily of interest we receive on account
of industrial revenue bonds that we received as consideration in connection with a sale and leaseback of our
facility located in Jackson, Missouri (U.S.A.) that was completed in December 2000. These industrial revenue
bonds bear interest at 9.5 % and matured on December 1, 2012. Also included in this category is interest from
loans to lessors in relation to leasing contracts and, to a lesser extent, loans to employees.
Interest Income/Expense. Interest income includes interest that we earn from current bank accounts,
interest swaps, pension commitments and short term employee loans. Interest expense consists primarily of
interest expense on financial debt, interest rate swaps, capital lease and other financing obligations. In addition,
the interest expense from pension provisions and tax payments is reported as interest expense.
Other Financial Income/Expense. Other financial income/expense includes gains or losses from the sale of
financial assets, changes in the market value of interest rate swaps and of the repurchase option of the
corporate bond, gains or losses from the sale of investment properties In addition, other financial
income/expense includes realized and unrealized foreign exchange rate gains and losses resulting from loans
and hedging transactions.
Income Tax Expenses
Our income tax provision at September 30, 2013 includes non-periodic German and foreign income taxes
and is based on pre-tax income or loss. For the Financial Period 2013, the income tax rate of applicable foreign
jurisdictions ranged from 10.0 % to 37.0 %. Our aggregate effective tax rate was 15.7%, 54.0 % and 33.4 % for
the financial years ended September 30, 2013, September 30, 2012 and December 31, 2011, respectively.
Recent Developments
The Issuer is a newly formed company initially formed as a limited liability company and later converted to a
German stock corporation. The Issuer serves as the ultimate parent company of the Group. On May 27, 2010,
the Oaktree Investment Entities contributed all of their shares of capital stock of NIAG to the Issuer in exchange
for shares of capital stock of the Issuer.
On July 9, 2010, the Issuer issued EUR 280.0 million in aggregate principal amount its 9¾ % Senior Second
Priority Notes due 2017 (the “Notes”) in a private placement in reliance upon Rule 144A and Regulation S under
the Securities Act of 1933, as amended (the “Securities Act”). On the same day, NIAG entered into the New
29
Bank Facility and the Pari Passu Bank Facility, which provide for aggregate borrowings of up to
EUR 100.0 million and EUR 10.0 million, respectively.
On July 9, 2010, we used the net proceeds from the sale of Notes, together with our available cash and
borrowings under the New Bank Facility and the Pari Passu Bank Facility, to (1) repay nearly all of the
outstanding indebtedness under the Bilateral Facilities (EUR 9 million remaining debt) and the Pari Passu Bank
Facility and the fees and expenses associated therewith, (2) fund the Equity Distribution and (3) pay fees and
expenses associated with the Offering. As of July 9, 2010, EUR 56.0 million and EUR 10.0 million were
outstanding under the New Bank Facility and the Pari Passu Bank Facility, respectively.
The following tables set forth the estimated sources and uses of cash in the Refinancing Transactions.
Sources of Funds
Uses of Funds
(in millions of euros)
New Bank Facility
56.0
Pari Passu Bank Facility
Notes offered hereby
(1)
Available cash
Total sources of funds
(1)
(2)
(3)
(4)
10.0
280.0
32.6
EUR 378.6
(2)
Repayment of Bilateral Facilities
Repayment of Pari Passu Bank
(2)
Facility
(3)
Equity Distribution
(4)
Fees and expenses
Total uses of funds
123.0
50.0
192.4
13.2
EUR 378.6
Reflects our available cash from the EUR 32.6million of cash or cash equivalents we had as of July 9, 2010.
The Issuer made an intercompany loan to NIAG in an amount of EUR 75.8 million. The intercompany loan, together with
borrowings by NIAG under the New Bank Facility and Pari Passu Bank Facility and available cash, was sufficient to repay nearly
all of our outstanding borrowings under the Bilateral Facilities and the Pari Passu Bank Facility and the fees and expenses
associated therewith.
The Equity Distribution does include the distribution already paid, fees to be paid past merger, payments to options holders and
the purchase from minority shareholders.
Includes original issue discount on the Notes together with estimated expenses, initial purchasers’ discounts and commissions
related to the Notes and underwriting fees in connection with the Refinancing Transactions.
In the scope of the New Bank Facility, some standard banking covenants need to be taken into account.
Two leverage ratios are included among these, and they indicate the theoretical debt reduction period based on
the proportion of (senior) financial debt to the operating profit. An interest cover shall be maintained together
with that, and it will indicate the relative excess coverage of the interest expense by the operating profit. Until
repayment, there was sufficient headroom for all financial covenants.
In connection with the Offering, on July 15, 2010 certain of the minority shareholders of NIAG exchanged
shares of capital stock of NIAG for an identical number of shares of the Issuer. Following these transactions, the
Issuer owned approximately 91.8 % of the outstanding capital stock of NIAG.
The Issuer purchased further shares of capital stock of NIAG in August 2010 from minority shareholders.
Following these transactions, the Issuer owned approximately 92.2 % of the outstanding capital stock of NIAG
pre Consolidation Merger.
The conversion of the Issuer from a limited liability company (GmbH) to a stock corporation (AG) under
German law was transacted by notarial deed on September 6, 2010 and registered with the commercial register
on September 29, 2010. The Issuer changed its name accordingly to Nordenia Holdings AG. On October 28,
2010, the Issuer and NIAG concluded a notarized agreement governing the Consolidation Merger with
retrospective effect from July 1, 2010. The general meetings of the Issuer and of NIAG approved the merger
agreement on December 8, 2010, and December 15, 2010, respectively. The Consolidation Merger has been
30
registered in the commercial register on May 26, 2011 and has thereby become effective. Simultaneously
Nordenia Holdings AG has changed its name to NORDENIA International AG.
On March 30, 2012 the company sold the operative business of NORDENIA Deutschland Emsdetten GmbH
by way of an asset deal and the shares of NORDENIA Polska Starogard GD Sp. z o. o. in a management-buyout. NORDENIA Deutschland Emsdetten GmbH was thereafter renamed to NORDENIA International
Beteiligungs GmbH.
On September 26, 2012 the Group sold its 50 % interest in a facility in Dalian, China.
Based on a Share Purchase Agreement dated July 10, 2012, certain shareholders of the Issuer agreed to
transfer the majority of the shares in the Issuer to Blitz 12-403 AG (now Mondi Consumer Packaging AG). Blitz
12-403 AG is a company of the Mondi Group. On October 1, 2012, Mondi Group confirmed that all requirements
were met and the transfer of the outstanding capital stock in the amount of 99.93 % of the Issuer for a cash
consideration of EUR 259m was completed. The Issuer was renamed from NORDENIA International AG to
Mondi Consumer Packaging International AG.
The transfer offers to the Group a unique opportunity to create a leading consumer packaging business,
expand the long-term customer relations of both companies and create a platform for the further expansion of
the markets into fast-growing emerging markets under the umbrella of Mondi Group.
In order to establish a fiscal unity for income tax purposes comprising Blitz 12-403 AG and the Issuer,
including its subsidiaries, effective October 1, 2012, the financial year of the Issuer was changed pursuant to a
shareholders' resolution dated September 11, 2012. The fiscal year now commences on October 1 and ends on
September 30 of the following year.
On October 1, 2012, Mondi Group completed the acquisition of 99.93% of the outstanding share capital of
NIAG and effective as of October 1, 2012 NIAG was renamed Mondi Consumer Packaging International AG.
On October 2, 2012 Moody’s Investors Service upgraded the Notes to Ba1 from B2. On the same date,
Standard & Poor’s Ratings Services raised its issue rating on the Notes to ‘BBB-‘ from ‘B’.
On October 15, 2012, Mondi Consumer Packaging International AG made an offer to purchase for cash all
of the outstanding Notes validly tendered by any holder pursuant to the Change of Control provisions in the
Indenture dated as of July 9, 2010. The offer expired on November 13, 2012 and no Notes were tendered.
Pursuant to a Deed of Guarantee dated 29 October 2012 Mondi plc has agreed to unconditionally and
irrevocably guarantee the payment of any sum payable by the Issuer under the Notes.
On October 29, 2012 Moody’s Investors Service upgraded the Notes to Baa3 from Ba1. Therefore on this
same date the Notes achieved Investment Grade Status as defined in the Indenture dated as of July 9, 2010.
On February 28, 2013 the Issuer sold its shares in Mondi Lohne GmbH (formerly NORDENA Deutschland
Lohne GmbH) and on September 30, 2013 Mondi Gronau GmbH sold its shares in Mondi IT Services Barleben
GmbH (formerly Nordenia IT Services GmbH).
The Annual General Meeting on April 12, 2013 resolved on a squeeze out whereby the remaining
outstanding shares were transferred to Mondi Holding Deutschland GmbH which is now the sole shareholder of
the Issuer. The leaving shareholders received a compensation of EUR 11,68.
On June 7, 2013 the Issuer concluded a profit transfer agreement with Mondi Holding Deutschland GmbH
effective as of October 1, 2012 which was approved by the Shareholders Meeting on the same day.
Mondi Consumer Packaging Development GmbH that was merged onto the Issuer on June 24, 2013
effectively January 1, 2013; and Nordenia International Beteiligungs GmbH & Co. KG merged onto the Issuer as
a result of the withdrawal of its general partner on August 1, 2013, and the merger of the former general partner
31
Nordenia International Geschäftsführungs GmbH (formerly Nordenia International Beteiligungs GmbH) onto the
Issuer on September 1, 2013.
Subsequent Events
On November 5, 2013 Thomas Schäbinger resigned as member of the Supervisory Board. The
Shareholders appointed Markus Fürst, Managing Director of Mondi Inncoat GmbH, as successor.
On a shareholder meeting on Nov 14, 2013 the shareholders resolved to change the business year back to
calender year. The period from Oct 1 to Dec 31, 2013 is a short fiscal year.
32
Results of Operations
For purposes of annotation of results and business development comparable periods of previous years have
been selected.
Twelve Months Ended September 30, 2013 Compared to Twelve months Ended September 30, 2012
The table below presents consolidated income statement data, including the amount and percentage
changes for the periods indicated:
Consolidated Income Statement
Data:
Sales
Cost of sales
Gross profit
Selling costs
Exchange rate differences from
business operations
Operating profit
Financial result
Income tax expenses
Profit attributable to non-controlling
interest
Profit attributable to shareholder of
the parent
Comparable periods Ended September 30,
(in thousands of euro; unaudited)
Amount of
Percentage
2013
2012
change
Change
866,413
716,573
149,840
49,593
38,068
5,814
12,809
2,907
882,522
737,272
145,250
45,500
23,580
5,558
2,356
6,938
-16,108
-20,699
4,590
4,093
14,489
256
10,454
-4,031
-1.8%
-2.8%
3.2%
9.0%
61.4%
4.6%
443.8%
-58.1%
243
66,024
4,192
70,217
1,745
68,472
0
42,882
137
65,893
-31,269
34,623
17,027
17,596
0
17,596
106
132
35,462
35,593
-15,282
50,876
0
25,286
77.3%
0.2%
113.4%
102.8%
-89.8%
289.1%
143.7%
-44
-175
131
-74.9%
42,926
17,771
25,155
141.5%
Sales
Sales decreased by EUR 16.1 million, or 1.8 %, to EUR 866.4 million for the twelve months ended
September 30, 2013 as compared to EUR 882.5 million for the twelve months ended September 30, 2012. Our
sales volumes in 2013 were negatively impacted by the worldwide economic development. Sales volumes
decreased by approximately 3.3 % from 2012 to 2013. In particular, our sales volume with respect to the
Converting FMCG, Hygiene, Industrial and Other endmarkets decreased, while our sales volumes in the other
endmarkets increased. Our average selling prices increased by approximately 1.6 % in 2013 as compared to
2012 as a result of higher resin prices being passed through to our customers and changes in our product mix.
33
Cost of Sales
Cost of sales decreased EUR 20.7 million, or 2.8 %, to EUR 716.6 million for the twelve months ended
September 30, 2013 as compared to EUR 737.3 million for the twelve months ended September 30, 2012.
Average cost of sales per kg increased by 0.02 EUR/kg, or 0.1 % to 3.10 EUR/kg for the twelve months ended
September 30, 2013 as compared to 3.08 EUR/kg for the twelve months ended September 30, 2012. Main
reason for the increase are higher resin prices being passed through to our customers and changes in product
mix. The average gross profit per kg increased by 0.04 EUR/kg or 6.7 % to 0.65 EUR/kg for the year twelve
months September 30, 2013 as compared to 0.61 EUR/kg for the twelve months ended September 30, 2012.
Selling Costs
Selling costs increased EUR 4.0 million, or 9.0 %, to EUR 49.6 million for the twelve months ended
September 30, 2013 as compared to EUR 45.5 million for the twelve months ended September 30, 2012. This
increase in selling costs was primarily the result of the centralization in the CGP selling organization. From 2013
onwards all costs for the sales force are collected centrally and redistributed to the companies. Redistribution is
partially done in other operating income, which to some extent offsets the total increase. Increases in personnel
expenses and fair and advertising cost also have an impact on the total cost increase.
Administrative Costs
Administrative costs increased EUR 14.5 million, or 61.4 %, to EUR 38.1 million for the twelve months
ended September 30, 2013 as compared to EUR 23.6 million for the twelve months ended September 30, 2012.
The increase in administrative costs was primarily the result of lower releases of accruals for our stock option
program. In the prior period EUR 5.1 million were released, while in the reporting period only EUR 0.3 million
were released. On the other side operating expenses increased due to license fees which have to be paid to
Mondi AG.
Research and Development Costs
Research and development costs increased EUR 0.2 million, or 4.6 %, to EUR 5.8 million for the twelve
months ended September 30, 2013 as compared to EUR 5.6 million for the twelve months ended September
30, 2012.
Other Operating Income
Other operating income increased EUR 10.5 million, or 443.8 %, to EUR 12.8 million for the twelve months
This increase is mainly related to changes in cost allocations due to the integration into the Mondi Group.
Other Operating Expenses
Other operating expenses decreased EUR 4.0 million, or 58.1 %, to EUR 2.9 million for the twelve months
This decrease was basically the result of a fair value evaluation of our assets in Russia which resulted in an
impairment of EUR 3.4 million in the prior year period. Additionally in the prior year period we recorded
expenses in relation to the sale of a subsidiary of EUR 2.1 million.
Exchange Rate Differences from Business Operations
Exchange rate differences from business operations resulted in a loss of EUR 0.2 million for the twelve
months ended September 30, 2013 as compared to a loss of EUR 0.1 million for the twelve months ended
September 30, 2012 due primarily to volatility in the value of the U.S. dollar, Russian rubel and the Polish zloty
as compared to the euro.
34
Financial Result
Financial result improved by EUR 35.5 million, or 113.4 %, to EUR 4.2 million for the twelve months ended
September 30, 2013 as compared to EUR -31.3 million for the twelve months ended September 30, 2012. The
improvement in financial result was primarily attributable to:
• a favorable increase of EUR 36.5 million to EUR 42.5 million total income due to the evaluation of buyback options associated with the corporate bond,
• a favorable EUR 0.4 million change in exchange rate differences. In the period ended September 30,
2011 we recorded a loss of EUR 1.0 million, while in the period ended September 30, 2012 we recorded a
loss of EUR 0.7 million,
• a favorable decrease of about EUR 2.2 million due to market valuation of interest rate hedges. In the
period ended September 30, 2012 we recorded an expense of EUR 3.6 million, while in the year ended
September 30, 2013 we recorded an expense of EUR 1.4 million.
Income Tax Expenses
Income tax expenses decreased EUR 15.3 million, or 89.8 %, to EUR 1.7 million for the twelve months
The decrease in income tax expenses and the decrease in effective tax rate from 49.2 to 15.7 % are a result of
the derecognition of deferred taxes through profit and loss due to the establishment of the fiscal unit for income
tax purposes with Mondi Holding Deutschland GmbH.
35
Twelve Months Ended September 30, 2012 Compared to Twelve months Ended September 30, 2011
The table below presents consolidated income statement data, including the amount and percentage
changes for the periods indicated:
Data:
Sales
Cost of sales
Gross profit
Selling costs
Exchange rate differences from
business operations
Operating profit
Financial result
Income tax expenses
Profit attributable to non-controlling
interest
Profit attributable to shareholder of
the parent
Comparable periods Ended September 30,
Amount of Percentage
2012
2011
change
Change
882,522
737,272
145,250
45,500
23,580
5,558
2,356
6,938
864,696
723,193
141,503
42,863
37,524
5,290
9,411
3,299
17,825
14,078
3,747
2,637
-13,945
268
-7,056
3,639
2.1%
1.9%
2.6%
6.2%
-37.2%
5.1%
-75.0%
110.3%
-137
65,893
-31,269
34,623
17,027
17,596
0
17,596
1,002
62,940
-46,323
16,617
6,048
10,569
0
10,569
-1,139
2,953
15,053
18,006
10,979
7,027
0
7,027
-113.7%
4.7%
32.5%
108,4%
181.5%
66.5%
66.5%
-175
-983
808
82.2%
17,771
11,552
6,219
53.8%
Sales
Sales increased by EUR 17.8 million, or 2.1 %, to EUR 882.5 million for the twelve months ended
September 30, 2012 as compared to EUR 864.7 million for the twelve months ended September 30, 2011. Our
sales volumes in 2012 were negatively impacted by the worldwide economic development. Sales volumes
decreased by approximately 2.4 % from 2011 to 2012. In particular, our sales volume with respect to the
Hygiene, Petcare & Garden Products, Beauty & Healthcare, Detergent & Cleansing Agents and Industrial
experienced the most significant decreases as compared to our other endmarkets. Our average selling prices
increased by approximately 4.6 % in 2012 as compared to 2011 as a result of higher resin prices being passed
through to our customers and changes in our product mix.
36
Cost of Sales
Cost of sales increased EUR 14.1 million, or 1.9 %, to EUR 737.3 million for the twelve months ended
September 30, 2012 as compared to EUR 723.2 million for the twelve months ended September 30, 2011.
Average cost of sales per kg increased by 0.13 EUR/kg, or 4.5 % to 3.08 EUR/kg for the twelve months ended
September 30, 2012 as compared to 2.95 EUR/kg for the twelve months ended September 30, 2011. Main
reason for the increase are higher resin prices being passed through to our customers and changes in product
mix. The average gross profit per kg increased by 0.03 EUR/kg or 5.2 % to 0.61 EUR/kg for the year twelve
months September 30, 2012 as compared to 0.58 EUR/kg for the twelve months ended September 30, 2011.
Selling Costs
Selling costs increased EUR 2.6 million, or 6.2 %, to EUR 45.5 million for the twelve months ended
September 30, 2012 as compared to EUR 42.9 million for the twelve months ended September 30, 2011. The
increase in selling costs was primarily the result of a EUR 0.8 million increase in freight and commission
expenses resulting from higher fuel prices and a EUR 1.8 million increase in other selling expenses, mainly
higher personnel expenses.
Administrative Costs
Administrative costs decreased EUR 13.9 million, or 37.2 %, to EUR 23.6 million for the twelve months
The decrease in administrative costs was primarily the result of a EUR 9.3 million decrease in personnel
expenses, which is mainly attributable to lower non-cash charges that we recorded under our stock option
program. Lower audit and consulting fees also attributed to the decrease in administrative costs.
Research and Development Costs
Research and development costs increased EUR 0.3 million, or 5.1 %, to EUR 5.6 million for the twelve
30, 2011.
Other Operating Income
Other operating income decreased EUR 7.1 million, or 75.0 %, to EUR 2.4 million for the twelve months
This decrease is mainly caused by lower income from the reversal of provisions and accruals which from Q4
2011 onwards is offset against the corresponding expense items for which the provision/accrual was originally
recorded (“Changes in accounting methods”). Additionally we did not record income from fixed assets sales in
2012 as compared to 2011 were we recorded income from asset sales (EUR 2.0 million), mainly resulting from
the sale of disposal of developed real property in Emsdetten.
Other Operating Expenses
Other operating expenses increased EUR 3.6 million, or 110.3 %, to EUR 6.9 million for the twelve months
This increase was basically the result of a fair value evaluation of our assets in Russia which resulted in an
impairment of EUR 3.4 million.
Exchange Rate Differences from Business Operations
Exchange rate differences from business operations resulted in a loss of EUR 0.1 million for the twelve
months ended September 30, 2012 as compared to a gain of EUR 1.0 million for the twelve months ended
September 30, 2011 due primarily to volatility in the value of the U.S. dollar and the Polish zloty as compared to
the euro.
37
Financial Result
Financial result improved by EUR 15.1 million, or 32.5 %, to EUR -31.3 million for the twelve months ended
September 30, 2012 as compared to EUR -46.3 million for the twelve months ended September 30, 2011. The
improvement in financial result was primarily attributable to:
• a favorable change of EUR 18.1 million due to the evaluation of buy-back options associated with the
corporate bond. In the period ended September 30, 2011 we recorded a loss of EUR 12.1 million and in
the period ended September 30, 2012 we recorded a gain of EUR 6.0 million
• a unfavorable increase of about EUR 3.6 million due to market valuation of interest rate hedges. In the
period ended September 30, 2011 we recorded an expense of EUR 0.04 million, while in the year ended
September 30, 2012 we recorded an expense of EUR 3.6 million, and
• an unfavorable increase of EUR 0.9 million in interest expense due to higher interest rates and financial
debt
• a favorable EUR 0.9 million change in exchange rate differences. In the period ended September 30,
2011 we recorded a loss of EUR 1.0 million, while in the period ended September 30, 2012 we recorded a
loss of EUR 0.1 million,
Income Tax Expenses
Income tax expenses increased EUR 11.0 million, or 181.5 %, to EUR 17.0 million for the twelve
30, 2011. The increase in income tax expenses was a result of a higher taxable income. The effective tax rate
increased from 36.4 to 49.2 % as a result of non-periodic tax postings resulting from a tax audit and the disposal
of deferred tax on interest carried forward resulting from the change in ownership structure.
38
Liquidity and Capital Resources
Overview
Our principal uses of cash have been to finance working capital, capital expenditures, debt service and
repayments and acquisitions. Our principal sources of liquidity have historically been net cash provided by
operating activities and borrowings under the bank facilities and funds provided under the Factoring Facility.
Following the acquisition of the Group by Mondi Group, the financing strategy has been changed and
MCPIAG and its subsidiaries are funded by Mondi Finance plc.
As of September 30, 2013, we had approximately EUR 5,694 million of cash and cash equivalents. The Pari
Passu Bank Facility of kEUR 10,000 as well as the New Bank Facility which provides for aggregate borrowings
of up to kEUR 100,000 were generally used to finance our working capital needs. In the meantime, both
facilities were cancelled and paid completely back within the fourth quarter of 2012, by funds drawn out from the
New Intercompany Facilities.
Under the terms of our Factoring Facility, we may sell and assign certain of our receivables that are
denominated in Euros or U.S. Dollars to the counterparty thereto, who is, subject to customary conditions,
obligated to buy and accept such receivables at a purchase price of approximately 90.5 % of the nominal
amount of such receivables. The maximum aggregate funded amount under the Factoring Facility at any one
time is limited to EUR 70 million and USD 10 million. The Factoring Facility remained in place following the
Refinancing Transactions. The Factoring Facility was cancelled and completely repaid on December 18, 2012.
On July 9, 2010, the Company issued EUR 280.0 million in aggregate principal amount of the Notes. The
Notes bear interest at 9.75 % per annum, payable semi-annually on January 15 and July 15 of each year. The
Notes will mature on July 15, 2017.
For further information regarding the terms of the Syndicated Revolving Credit Facility, the Pari Passu Bank
Facility, the Factoring Facility and the Notes, see “Material Contracts—Financing Arrangements” in the Offering
Memorandum.
Based upon our current level of operations, anticipated sales growth and operating improvements, we
believe our cash generated from operations together with borrowings under the New Intercompany Facilities will
be sufficient to meet our working capital requirements, anticipated capital expenditures and scheduled debt
payments for at least the next twelve months. This belief, however, is subject to our operating performance,
which if significantly adversely affected, would adversely affect the availability of funds. See “Risk Factors—
Risks relating to our Financial Profile—To service our indebtedness, we will require a significant amount of
cash, which we may not be able to raise or generate. Our ability to generate cash depends upon many factors,
some of which are beyond our control” in the Offering Memorandum.
We are a holding company and are wholly dependent on payments or dividends from our subsidiaries to
meet our cash requirements. The payment of dividends and the making of loans and advances to us by our
subsidiaries are subject to various restrictions. The ability of our subsidiaries to make payments, loans or
advances to it may be limited by the laws of the relevant jurisdictions in which such subsidiaries are organized
or located. Under applicable German law, for example, a subsidiary in the legal form of a limited liability
company (GmbH) or, in certain circumstances, a limited partnership is generally prohibited from paying
distributions to its shareholders if and to the extent that such distributions would affect the preservation of its
registered share capital. If applicable, this would mean that we would be unable to use the earnings of these
subsidiaries to the extent they face restrictions in such jurisdictions on distributing funds or making payments to
parent organizations. In addition, existing and future debt of certain of these subsidiaries may prohibit the
payment of dividends or the making of loans or advances to us. Any of the situations described above could
make it more difficult for us to service our obligations or pay dividends.
39
Cash Flows
Twelve Months Ended September 30, 2013 Compared to Twelve Months Ended September 30, 2012
The following summarizes our primary sources of cash in the periods presented:
Comparable periods Ended
September 30
(in thousands of euro)
2013
2012
Cash provided by (used in):
Operating activities
Investing activities
Financing activities
Total
-25,613
-41,049
37,425
-29,237
55,788
-33,086
-18,805
3,897
Change to
Net Cash Flow
Amount
-81,401
-7,963
56,230
-33,134
Operating Activities. The cash flow from current operating activities decreased by EUR 81.4 million from
EUR 55.8 million accumulated in the previous period to EUR -25,6 million in the reporting period. While EBIT
increased slightly by EUR 0.1 million, higher interest and tax payments had a negative impact on operating cash
flow. Main reason for the negative development is the cessation of the ABS program with an impact of about
EUR 40.0 million, the cessation of interest swaps with an impact of EUR 10.0 million and payments under the
management option program of EUR 18.5 million.
Investing Activities. Compared to the 2012 period, the outflow for investing activities increased by EUR 7.9
million from EUR 33.1 million to EUR 41.0 million. The investments in property, plant and equipment and in
intangible assets increased by EUR 6.4 million from EUR 37.9 million in the twelve months ended September
30, 2012 to EUR 44.3 million in the twelve months ended September 30, 2013. Additionally we recorded lower
inflows from disposal of fixed assets and from the sale of consolidated companies .
Financing Activities. During 2013 cash in financing activities of EUR 37.4 million was generated compared
to a spending of EUR 18.8 million during 2012. Due to the integration into the Mondi Group the financing
structure has been changed.
40
Twelve Months Ended September 30, 2012 Compared to Twelve Months Ended September 30, 2011
The following summarizes our primary sources and uses of cash in the periods presented:
Twelve Months Ended
September 30
2012
2011
Cash provided by (used in):
Operating activities
Investing activities
Financing activities
Total
55,788
-33,086
-18,805
3,897
23,898
-29,348
5,399
-51
Change to
Net Cash Flow
Amount
31,890
-3,738
-24,204
3,948
Operating Activities. We generated a cash flow from operating activities of EUR 55.8 million in the twelve
months ended September 30, 2012 compared to EUR 23.9 million in the twelve months ended September 30,
2011. In the 2012 period, operating profit increased by EUR 3.0 million compared to the 2011 period. Cash flow
was negatively influenced by higherr income tax and interest payments compared to the 2011 period. Main
reason for the increase in cash flow from operating activities is less cash used for working capital. In the 2011
period we have used EUR 21.2 million for increasing working capital, while in the 2012 period we have used
only EUR 4.9 million for working capital. Another positive impact is related to factorization cash flows, due to a
change in the amount of receivables sold.
Investing Activities. We used cash in investing activities of EUR 33.1 million during the twelve months
ended September 30, 2012 compared to EUR 29.3 million during the twelve months ended September 30,
2011. Cash used for investments in intangible and tangible assets was increased by EUR 3.2 million from
EUR 34.7 million in the twelve months ended September 30, 2011 to EUR 37.9 million in the twelve months
ended September 30, 2012. Cash flow from investing activities was positively impacted by higher cash from the
sale of consolidated companies of EUR 3.6 million as compared to the prior year period, while cash flows from
asset sales decreased by EUR 2.2 million.
Financing Activities. We generated cash in financing activities of EUR 5.4 million during the twelve months
ended September 30, 2011 compared to repayments of EUR 18.8 million during the twelve months ended
September 30, 2012. Less cash needed for financing of working capital allowed to reduce financial debt.
Capital Expenditures
We calculate the amount of our capital expenditures for any particular period by reference to the gross
additions to our property, plant and equipment and intangible assets for such period as reflected on our
consolidated balance sheet as of the end of such period. During the fiscal years ended September 30, 2013,
September 30, 2012 and December 31, 2011, our capital expenditures were EUR 43.9 million, EUR 23.7 million
and EUR 39.8 million, respectively.
Our capital expenditures during the Financial Period 2013 related primarily to investments in inline printing
and embossing capacities at our plant in Gronau, Germany and in building investments at our new plant in
China. Additionally we have completed investments for new machines for our FlexZiBox business at our plant in
Steinfeld, Germany. In Halle, Germany, Hungary and Malaysia we invested in new printing capacities. We
estimate that our aggregate capital expenditures for the next 12 month will be approximately EUR 35-40 million.
41
Working Capital
In general, we define working capital as the sum of inventories and trade receivables less trade payables.
For this purpose, we adjust the total amount of trade receivables as recorded on our consolidated balance sheet
to deduct the amount of debtors with credit balances and working capital related provisions and adjust the total
amount of trade payables as recorded on our consolidated balance sheet to add prepayments we have received
on orders and deduct the amount of vendors with debit balances and supplier rebates.
The table below sets forth our calculation of working capital for each of the periods presented:
September 30, / December 31
(1)
2013
2012
2011
Inventories
Total trade receivables
Debtors with credit balances
(2)
Working capital related provisions
Adjusted receivables
Total trade payables
Prepayments received on orders
Vendors with debit balances and
supplier rebates
Adjusted payables
Working Capital
(3)
114,554
132,131
243
4,556
127,331
75,138
1,755
113,139
94,151
141
4,429
89,581
80,042
1,855
104,920
85,275
-677
-3,059
81,538
83,638
143
6,853
70,040
8,151
73,746
-6,792
76,990
171,845
128,973
109,468
____________________________________________
1)
The fiscal year 2012 ended on September 30, while previous years ended on December 31.
(2)
Refers to customer rebates that we have not yet paid.
(3)
The amounts set forth herein do not correspond to the amounts set forth in our consolidated cash flow
statement for the applicable period as those amounts have been adjusted to reflect changes in foreign
currency exchange rates on the opening balance and changes in the number of consolidated companies.
Liquidity Arrangements
Our principal uses of cash have been to finance working capital, capital expenditures, debt service and
repayments and acquisitions. Our principal sources of liquidity have historically been net cash provided by
operating activities and borrowings under the Bilateral Facilities and the Pari Passu Bank Facility and funds
provided under the Factoring Facility (as defined below). As part of the Refinancing Transactions, on July 9,
2010, our principal sources of liquidity were the New Bank Facility, the Pari Passu Bank Facility, the Notes and
the funds provided under the Factoring Facility. Following the acquisition of the Group by the Mondi Group the
financing strategy has been changed and MCPIAG and its subsidiaries are funded by Mondi Finance plc.
Former Bilateral Facilities and Pari Passu Bank Facility
Until July 9, 2010, we had committed Bilateral Facilities of EUR 244.3 million (as of June 30, 2010) which
we generally used for borrowings to finance our working capital needs. On July 9, 2010, we used a portion of
the net proceeds from the Offering, together with borrowings under the New Bank Facility and the Pari Passu
Bank Facility and available cash, to repay most of our outstanding borrowings under the former Bilateral
Facilities and the former Pari Passu Bank Facility and terminate the commitments thereunder. The remaining
debt on July 9, 2010, was EUR 9.0 million.
42
New Bank Facility and Pari Passu Bank Facility
As part of the Refinancing Transactions, on July 9, 2010, NIAG entered into the New Bank Facility which
provides for aggregate borrowings of up to EUR 100.0 million to be used for working capital and other general
corporate purposes. In connection with the Refinancing Transactions, we borrowed on July 9, 2010,
approximately EUR 56.0 million under the New Bank Facility. As of September 30, 2012, we could reduce the
borrowings under the New Bank Facility to EUR 38.2 million and had approximately EUR 33.1 million of cash
and cash equivalents. The margin is dependent on specified leverage ratios and is between 1.25 % and 2.0 %.
On September 30, 2012, borrowings under the New Bank Facility accrue interest at EURIBOR plus a 2.00 %
margin. As part of the Refinancing Transactions, on July 9, 2010, NIAG entered into a new Pari Passu Bank
Facility with Landessparkasse zu Oldenburg which provides for aggregate borrowings of up to EUR 10.0 million,
all of which was outstanding as of July 9, 2010. The Pari Passu Bank Facility accrues interest at EURIBOR plus
a 4.5 % margin. Borrowings under our New Bank Facility and Pari Passu Bank Facility had an interest rate of
2.12% and 5.42%, respectively, as of September 30, 2012. We have generally used borrowings under these
facilities to finance our working capital needs. Both facilities were repaid within the fourth quarter of 2012.
Factoring Facility
We are a party to a receivables factoring arrangement under a Receivables Purchase Agreement, dated
November 8, 2001 (and last amended December 20, 2006) (the “Factoring Facility”) pursuant to which we may
sell and assign certain of our receivables that are denominated in Euros or U.S. dollars to the counterparty
thereto, who is, subject to customary conditions, obligated to buy and accept such receivables at a purchase
price of approximately 90.5 % of the nominal amount of such receivables. The maximum aggregate funded
amount under the Factoring Facility at any one time is limited to EUR 70 million and US$10 million. As of Sep
30, 2012, the nominal amount of receivables purchased under the Factoring Facility amounted to approximately
EUR 49.0 million and approximately US$ 4.7 million. The Factoring Facility was cancelled and completely
repaid on December 18, 2012
Availability of Funds
We believe that cash generated from operations together with borrowings under the New Intercompany
Facilities will be sufficient to meet our working capital requirements, anticipated capital expenditures and
scheduled debt payments for at least the next twelve months. This belief, however, is subject to our operating
performance, which if significantly adversely affected, would adversely affect the availability of funds.
9¾ % Senior Second Priority Notes
On July 9, 2010, we issued EUR 280.0 million in aggregate principal amount of the Notes. The Notes bear
interest at 9.75 % per annum, payable semi-annually on January 15 and July 15 of each year. The first such
payment was made on January 15, 2011. The Notes will mature on July 15, 2017. Prior to July 15, 2014, we will
be entitled, at our option, to redeem all or a portion of the Notes by paying the relevant “make-whole” premium,
plus accrued and unpaid interest to the redemption date. Prior to July 15, 2013, we might have redeemed at
our option up to 35 % of the Notes with the net proceeds from certain equity offerings at a redemption price of
109.75 % of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption
date.
43
At any time on or after July 15, 2014, we may redeem all or part of the Notes at the redemption prices set
forth below, plus accrued and unpaid interest to the redemption date:
Year
2014 ....................................................................................
2015 ....................................................................................
2016 and thereafter ............................................................
Redemption
Price
104.875%
102.438%
100.000%
If we undergo a change of control or sell certain of our assets, we may be required to make an offer to
purchase the Notes at a purchase price equal to 101 % of the principal amount of the Notes repurchased, plus
accrued and unpaid interest to the date of repurchase. In the event of certain developments affecting taxation,
we may redeem all, but not less than all, of the Notes at a redemption price equal to 100 % of the principal
amount of the Notes, plus accrued and unpaid interest to the date of redemption.
Prior to completion of the Consolidation Merger, the Notes are secured by a pledge of all of the capital stock
held by the Issuer of NIAG, and an assignment of the intercompany loan made by the Issuer to NIAG with a
portion of the net proceeds from the Offering. Following completion of the Consolidation Merger, the Notes will
be unsecured and guaranteed jointly and severally by substantially all of the Issuer’s wholly owned subsidiaries
with operations in Germany, Poland and the United States.
The indenture governing the Notes imposes significant operating and financial restrictions on the Issuer and
its restricted subsidiaries. These restrictions limit its ability, among other things, to:
•
•
•
•
•
•
•
•
incur additional indebtedness or issue preferred stock;
pay certain dividends or make certain distributions on its capital stock or repurchase its capital
stock;
make certain investments or other restricted payments;
place restrictions on the ability of subsidiaries to pay dividends or make other payments to the
Issuer;
engage in transactions with affiliates;
sell certain assets or merge with or into other companies;
guarantee indebtedness; and
create liens.
Certain of these covenants will be suspended if the Notes are assigned an investment grade rating by both
Standard & Poor’s Rating Services and Moody’s Investors Service, Inc. and no default has occurred or is
continuing. If either rating on the Notes should subsequently decline to below investment grade, the suspended
covenants will be reinstated. The covenants are subject to important exceptions and qualifications.
The Issuer is not required to, nor does it intend to, register the Notes for resale under the Securities Act or
to offer to exchange the Notes for Notes registered under the Securities Act or the securities laws of any
jurisdiction.
We used the net proceeds from the issuance and sale of the Notes, together with our available cash and
borrowings under the New Bank Facility and the Pari Passu Bank Facility, to fund the Refinancing Transactions.
See “-Recent Developments.”
Subject to the limits contained in the indenture governing the Notes and the New Bank Facility, we may be
able to incur additional debt from time to time to finance working capital, capital expenditures, investments or
acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Our
ability to make payments on and to refinance our indebtedness, including the Notes, and to fund working capital
needs and planned capital expenditures will depend on our ability to generate cash in the future. This, to a
certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other
factors that are beyond our control.
44
If our business does not generate sufficient cash flow from operations or if future borrowings are not
available to us in an amount sufficient to enable us to pay our indebtedness, including the Notes, or to fund our
other liquidity needs, we may need to refinance all or a portion of our indebtedness, including the Notes, on or
before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital,
any of which could have a material adverse effect on our operations. In addition, we may not be able to affect
any of these actions, if necessary, on commercially reasonable terms or at all. Our ability to restructure or
refinance our indebtedness, including the Notes, will depend on the condition of the capital markets and our
financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us
to comply with more onerous covenants, which could further restrict our business operations. The terms of
existing or future debt instruments, including the indenture governing the Notes, may limit or prevent us from
taking any of these actions. In addition, any failure to make scheduled payments of interest and principal on our
outstanding indebtedness would likely result in a reduction of our credit rating, which could harm our ability to
incur additional indebtedness on commercially reasonable terms or at all. Our inability to generate sufficient
cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially
reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial
condition and results of operations, as well as on our ability to satisfy our obligations in respect of the Notes.
Intercompany Distributions
The Issuer is a holding company and will be wholly dependent on payments or dividends from its
subsidiaries to service its obligations under the Notes and meet its other cash requirements. The payment of
dividends and the making of loans and advances to the Issuer by its subsidiaries are subject to various
restrictions. The ability of the Issuer’s subsidiaries to make payments, loans or advances to it may be limited by
the laws of the relevant jurisdictions in which such subsidiaries are organized or located. Under applicable
German law, for example, a subsidiary in the legal form of a limited liability company (GmbH) or, in certain
circumstances, a limited partnership is generally prohibited from paying distributions to its shareholders if and to
the extent that such distributions would affect the preservation of its registered share capital. If applicable, this
would mean that the Issuer would be unable to use the earnings of these subsidiaries to the extent they face
restrictions in such jurisdictions on distributing funds or making payments to parent organizations. In addition,
existing and future debt of certain of these subsidiaries may prohibit the payment of dividends or the making of
loans or advances to the Issuer. Any of the situations described above could make it more difficult for the Issuer
to service its obligations, including the Notes.
The Issuer has entered into profit and loss pooling agreements with certain of its subsidiaries pursuant to
which such subsidiaries must transfer to the Issuer their annual profits to the extent not otherwise retained as
voluntary reserves. In the event a subsidiary incurs a net loss, the Issuer must compensate the subsidiary for
such net loss. Instead of a cash payment by the Issuer to the subsidiary for the compensation of any such loss,
a set-off of such compensation claims of the subsidiary against the Issuer against any loans, notes or other
instruments or agreements may be permitted. As a result of the effectiveness of the Consolidation Merger, the
Issuer has the benefit of the profit and loss pooling agreements. A compensation claim of a subsidiary against
the Issuer in the event of a loss will rank pari passu with the rights of the holders of the Notes.
Contractual Obligations and Commercial Commitments
The following table represents our contractual commitments associated with our financial debt and other
contractual obligations as of September 30, 2013, on a pro forma basis after giving effect to the Refinancing
Transactions as if those transactions had occurred as of that date.
45
Contractual Obligations
Pro forma financial debt
(1)
obligations
(2)
Finance lease obligations
Operating lease
(3)
obligations
(4)
(5)
Purchase commitments
Total
(1)
(2)
(3)
(4)
(5)
Payments Due By Period (in thousands of euros)
Less than
More than
Total
1 Year
1-5 Years
5 Years
466,346
20,371
28,449
13,942
144,247
2,180
293,650
4,249
18,628
801
11,751
517,897
4,128
715
11,751
58,985
10,551
86
0
157,064
3,949
0
0
301,848
Represents principal and cash interest payments on the New Bank Facility, the Pari Passu Bank Facility and the Notes. Variable
interest rates under the New Bank Facility (which amounted to EUR 60 million in the pro formas) and Pari Passu Bank Facility
have been assumed to remain constant through the end of their respective terms.
Consists of payments under our finance leases for property, plant and equipment.
Represents payments under our operating leases for various property and equipment.
Consists of obligations under maintenance and power supply contracts.
Consists of obligations to purchase goods or services, primarily fixed assets, which are enforceable and legally binding on us.
Excludes purchase orders made in the ordinary course of business that are short-term or cancellable.
Off Balance Sheet Arrangements
Our off balance sheet arrangements primarily consisted of our Factoring Facility which was cancelled due to
a change of financing strategy after the acquisition by the Mondi Group in the financial period 2013.
Inflation
We believe inflation has not had a material effect on our financial condition or results of operations in recent
years. However, there can be no assurance that we will not be affected by inflation in the future.
Seasonality
Historically, our business has not been subject to significant seasonality.
Critical Accounting Policies and Pronouncements
Our discussion and analysis of results of operations and financial condition are based upon our audited
financial statements. These audited financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as applied in the European Union. The preparation of these financial
statements requires us to make estimates and judgments that affect the amounts reported in those financial
statements. On an ongoing basis, we evaluate estimates. We base our estimates on historical experiences and
assumptions believed to be reasonable under the circumstances. Those estimates form the basis for our
judgments that affect the amounts reported in the financial statements. Actual results could differ from our
estimates under different assumptions or conditions.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are addressed below:
46
Estimates are in particular required in the following cases
-
Determination of necessity and measurement of impairment losses on intangible assets, items of
property, plant and equipment, as well as inventories and financial assets;
Recognition and measurement of pension obligations, anniversary bonuses, and the provision for
stock options;
Assessment of potential deferred tax assets;
Recognition of asset backed securities.
Property, plant and equipment, as well as intangible assets is measured based on estimates of the fair
value at the acquisition date, if those items were acquired in the course of a business combination. Furthermore,
the useful life of the assets has to be estimated. The fair value of assets and liabilities, as well as the useful life
of assets are determined based on management's estimates.
When determining impairment losses on items of property, plant and equipment and intangible assets,
estimates are made as well that relate - among others - to the cause, date and amount of impairment.
Impairment results from a number of factors. On principle, changes in current competition, expectations
regarding the growth in the packaging industry, increases in capital costs, changes in the availability of financial
resources, technological obsolescence, discontinuation of services, current replacement costs, purchase prices
paid in similar transactions, and other changes affecting the circumstances that indicate that impairment
occurred are accounted for. The net realizable amount and fair values are usually determined using the
discounted cash flow method (DCF method) which also involves appropriate assumptions of market
participants. When identifying aspects that indicate that there is an impairment, management has to make
significant estimates of future cash flows and the fair values of assets (or groups of assets).
The Group tests annually – in accordance with the accounting policy described in note 2.10a of the financial
statements at September 30, 2013 - whether the goodwill is impaired. The recoverable amounts of cashgenerating units have been determined based on value-in-use calculations. These calculations require the use
of estimates.
Management records impairment losses on doubtful accounts in order to account for expected losses that
result from customer’s insolvency. The bases used by management in order to assess the appropriateness of
the impairment losses on doubtful accounts are the maturity structure of the receivables and past experience in
respect to the derecognition of receivables, the customer’s credit rating, and changes in terms of payment. In
the event the customer’s financial situation worsens, the scope of the actual amount to be derecognized may
exceed the expected derecognition.
Since 2001 and prior to December 18, 2012, trade receivables of subsidiaries have been sold and assigned
to Kaiserplatz Purchaser No. 5 Ltd., Jersey, (KP5) in ABS transactions (asset backed securities). When
recognizing the disposal of trade receivables, management must evaluate whether the transferee (KP5) should
be included in the consolidated group of the NORDENIA Group and whether the disposal is deemed a disposal
of receivables as defined in IAS 39. Whether the transferee should be consolidated shall be determined based
on the criteria of SIC-12 “Consolidation of Special-Purpose Entities”. The basis used by management with
respect to the criteria of SIC-12 and IAS 39 are the agreements with KP5, the credit standing of the customers,
the estimated future cash flows from the receivables sold (timing and amount), as well as a forecast of future
interest and exchange rate trends in the financial markets. Hence, management has to make estimates and
forecasts with respect to the criteria of SIC-12 and IAS 39.
Income taxes have to be estimated for each tax jurisdiction in which the Group operates. The expected
actual income tax for each taxable unit has to be calculated and temporary differences resulting from different
treatment of certain balance sheet items in the consolidated IFRS financial statements and the tax base have to
be evaluated. If temporary differences occur, those differences basically result in the recognition of deferred tax
assets and liabilities in the consolidated financial statements. Management has to make estimates when
calculating actual and deferred taxes. Deferred tax assets are recognized to the extent that it is probable that
the assets will be utilized. The utilization of deferred tax assets depends on the possibility to generate sufficient
taxable income in the respective tax category and tax jurisdiction; legal restrictions regarding maximum loss
47
carryforward periods have to be taken into account. When assessing whether a future utilization of deferred tax
assets is probable, various factors have to be taken into account, e.g. earnings position in the past, operational
plans, loss carryforward periods, tax plan strategies. If the actual results deviate from those estimates or if the
estimates have to be adjusted in the future, adverse effects on the net assets, financial and earnings position
may occur. In the event the impairment test of deferred tax assets results in a change in the assessment,
impairment losses shall be recognized on the recognized deferred tax assets through profit and loss.
Pension obligations relating to employee benefits are, on principle, covered by plans that are classified and
recognized as defined benefit plans. Expenses for old-age pensions are determined using actuarial methods
that are based on assumptions regarding the interest rate, life expectancy, and - to a limited extent - the
expected earnings from plan assets. The estimates of the expected earnings from plan assets do only affect the
expenses for old-age pensions to a limited extent. They are in part based on actuarial evaluations that in turn
are based on assumptions such as the interest rates that are used to calculate the pension obligation. The
assumptions regarding the expected earnings from plan assets are made on a standard basis of long-term
historical yields in the past, the asset strategy, as well as estimates of non-current income from assets. In the
event other modifications of the assumptions regarding interest rates or expected earnings from plan benefits
are required, such modification may have material impact on the amount of expenses for old-age pensions in
the future.
The recognition and measurement of the provisions and the amount of contingent liabilities relating to
pending legal proceedings or other pending claims from out-of-court settlements, mediation, arbitration or
government proceedings and other contingent liabilities, respectively, require major estimates by the Issuer.
Hence, the assessment of whether it is probable that pending proceedings will be successful or a liability will be
incurred and the amount of the respective obligation is based on the assessment of the respective situation and
circumstances. Provisions are recognized for liabilities, if losses from pending transactions are expected, it is
probable that a loss will be incurred, and this loss can be estimated reliably. Due to the uncertainties related to
such assessment, the actual losses may deviate from the original estimates and thus from the amount accrued.
In addition, major estimates have to be made when determining the provisions for taxes, environmental liabilities
and legal risks. Those estimates may change due to new information. The Issuer obtains new information
primarily from services of internal experts or external experts such as actuarians or legal consultants. Changes
in the estimates of those impending losses from pending transactions may have a significant impact on the
future earnings position.
The recognition and measurement of other provisions is based on the estimated probability of possible
outflows of economic benefits and on experience and the circumstances known at the balance sheet date. The
actual outflow of economic benefits may therefore deviate from the other provisions.
Recent Accounting Pronouncements
Standards, interpretations and revised standards and interpretations adopted for the first time in the financial year
The following standards, interpretations and changes of standards and interpretations had to be applied for the
first time in the financial year beginning October 01, 2012:
•
IAS 1 - Statement of comprehensive income
The changes in IAS 1 relate to renaming the statement of comprehensive income into statement of
profit or loss and other comprehensive income and the reorganization of the other comprehensive
income. Accordingly, the other comprehensive income will be divided into two sections: one section that
contains those elements that will be "recycled" into the statement of profit or loss in future periods and
one section that comprises all those elements that will not be "recycled" in the following periods. The
changes in IAS 1 shall be applied in financial years beginning on or after July 1, 2012. The Group
applied the changes retroactively and adjusted the items of the other comprehensive income
accordingly. Except for the above-described changes in the presentation, the adoption of the revised
IAS 1 will not have any impact on the presentation in the income statement and the other
comprehensive income.
48
Published but not yet adopted standards, interpretations and revisions
The following standards, interpretations and changes in standards and interpretations shall be applied to
financial years that begin on or after October 1, 2012 or January 1, 2013, respectively. The Group has not
adopted these standards, interpretations and changes of standards and interpretations early:
•
IAS 19 - Employee benefits
The changes of IAS 19 adopted by the IASB abolish the currently existing corridor approach and require
the recording of actuarial gains and losses in other comprehensive income. In addition, the gains from
plan assets and the interest expense on the existing pension obligations expected to result from the
revised IAS 19 are replaced by a standard net interest component. In the future, the past service costs
will be recorded in full in the period in which the corresponding plan changes. In the course of the
revision of IAS 19, the requirements regarding post-termination benefits were changed. The disclosure
and the required explanatory comments have been subject to an extension. The changes in IAS 19
shall be applied in financial years beginning on or after January 1, 2013; earlier adoption is permitted.
The revision of IAS 19 is primarily expected to affect the determination of the net interest
expenses/income of the Group. In addition, the first-time adoption of the revised standard will result in
extended disclosures.
•
IFRS 10 - Consolidated financial statements
IFRS 10 replaces the provisions regarding consolidated financial statements in IAS 27 Consolidated
and separate financial statements and SIC 12—Consolidation - special-purpose entities. The standard
provides a uniform definition for the term control for all companies thus also ensuring a uniform basis for
the determination of whether there is a parent-subsidiary relationship and of the consolidation of the
company. The standard contains comprehensive user guidelines for the determination of a control
relationship. According to the IASB, the provisions are mandatory to all financial years that begin on or
after January 1, 2013 (first mandatory adoption in the EU: financial years that begin on or after January
1, 2014). Earlier adoption is permitted; however, it does not only require the disclosure of the early
adoption but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also
adopted early. The Group is currently researching the potential impact on the presentation of its net
worth, financial and earnings position, as well as its cash flows.
•
IFRS 11 - Joint arrangements
The standard published by the IASB in May 2011 removes the current option to consolidate joint
ventures on a pro rata basis. The mandatory application of the equity method to joint ventures will be
subject to the provisions of IAS 28 Investments in associates and joint ventures in the future. According
to the IASB, the provisions are mandatory to all financial years that begin on or after January 1, 2013
(mandatory adoption in the EU: financial years that begin on or after January 1, 2014). Earlier adoption
is permitted; however, it does not only require the disclosure of the early adoption but also that IFRS 10,
IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. The Group is
currently researching the potential impact on its net worth, financial and earnings position, as well as its
cash flows.
•
IFRS 12 - Disclosure of interests in other entities
IFRS 12 replaces the current provisions regarding the disclosure obligations set forth in IAS 27
Consolidated and separate financial statements, IAS 28 Investments in associates, IAS 31 Investments
in joint ventures and SIC-12 Consolidation—special-purpose entities. Hence, the standard governs the
disclosures of all types of investments in other entities, including joint arrangements, associates,
structured entities and units outside the balance sheet. According to the IASB, IFRS 12 is mandatory for
all financial years that begin on or after January 1, 2013 (first-time mandatory adoption in the EU:
financial years beginning on or after January 1, 2014); earlier adoption is permitted. The Group expects
that the first-time adoption will result in additional disclosures.
49
•
IFRS 10, IFRS 11 and IFRS 12 -Transition guidance amendments
In the course of the amendment of the transition provisions in IFRS 10, 11 and 12, exemptions are
granted by limiting the adjusted comparative figures to be disclosed to the closest comparative previous
period upon first-time adoption and eliminating the obligation to disclose comparative information
regarding non-consolidated structured entities when adopting IFRS 12 for the first time. According to the
IASB, the changes shall be applied to all financial years that begin on or after January 1, 2013 (first-time
mandatory adoption in the EU: financial years that begin on or after January 1, 2014).
•
IFRS 10, IFRS 12 and IAS 27 - Investment entities amendments
The IASB adopted changes of the standards IFRS 10, IFRS 12 and IAS 27 on October 31, 2012. Those
amendments shall be adopted to companies that fulfill the definition of investment entities (e.g. certain
investment funds). Investment entities consolidate the entities they control not in their consolidated
financial statements, but measure the investments held for investment at fair value. Unlike as proposed
in the Exposure Draft of 2001, the definition of an investment entity is not less restrictive. The changes
shall be applied to all financial years that begin on or after January 1, 2014. Earlier adoption is
permitted. The changes do not have any impact on the Group since the definition criteria for investment
entities are not met.
•
IAS 27 - Separate financial statements
As a result of the publication of the new announcements regarding IFRS 10, the revised IAS 27 contains
only provisions regarding the recognition and disclosures of subsidiaries, joint ventures and associates
that are relevant to the separate financial statements compiled in accordance with the IFRS. According
to the IASB, the provisions are mandatory to all financial years that begin on or after January 1, 2013
(first-time mandatory adoption in the EU: financial years that begin on or after January 1, 2014). Earlier
adoption is permitted; however, it does not only require the disclosure of the early adoption but also that
IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. Since
the revised IAS 27 now exclusively applies to separate financial statements, the changes will not affect
the consolidated financial statements.
•
IAS 28 - Investments in associates and joint ventures
The changes in IAS 28 include subsequent amendments to the new IFRS 10, IFRS 11 and IFRS 12 and
expand the scope of the current standard to the recognition of joint ventures. According to the revised
IAS 28, an entity must recognize an investment or part of an investment in an associate or a joint
venture as held for sale when and if the applicable criteria are met. The remaining portion of the
investment in an associate or joint venture that is not classified as held for sale must be recognized
using the equity method until its disposal. According to the IASB, the provisions are mandatory to all
financial years that begin on or after January 1, 2013 (first-time mandatory adoption in the EU: financial
years that begin on or after January 1, 2014). Earlier adoption is permitted; however, it does not only
require the disclosure of the early adoption but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and
IAS 28 (2011) together are also adopted early. The Group is currently researching the impact of the
amendments to IAS 28.
•
IFRS 13 - Fair value measurement
IFRS 13 provides cross-standard uniform measurement guidelines for fair value measurement by
defining and specifying which methods may be used for the determination of the fair value. In addition,
the disclosures of assets and debts measured at fair value are expanded. IFRS 13 itself does not
contain any provisions as to when fair value measurement should be used. The standard shall be
applied prospectively to financial years beginning on or after January 1, 2013; earlier adoption is
permitted. When adopting the standard for the first time, no comparative figures are required. Currently,
the Group expects that the adoption of the new standard will result in additional disclosures.
50
•
IAS 12 - Deferred taxes: Recovery of underlying assets
The amendment will result in the introduction of a mandatory exemption insofar as the company must
deviate from the basic provision of IAS 12.51—according to which the deferred taxes must be measured
in the amount of the expected tax consequence relating to the expected manner of recovery of the
underlying asset (or debt)—when measuring investment properties at fair value. In the future, deferred
tax assets and liabilities must be measured based on the tax consequences of a sale unless the
accounting party provides clear evidence that the carrying amount of the asset will be realized in full as
a result of the use. This new provision is primarily of significance in countries in which the use and the
sale of such assets are taxes in a different manner. The exemption provision also applies to investment
properties recognized for the first time in the course of a business acquisition when and if they shall also
be measured at fair value in subsequent recognition. According to the IASB, the change shall be applied
to all financial years that begin on or after January 1, 2012 (first-time mandatory adoption in the EU:
financial years beginning on or after January 1, 2013); earlier adoption is permitted. The Group is
currently researching the corresponding effects of the amendments on the presentation of the net worth,
financial and earnings position, as well as the cash flows.
•
IAS 32 - Offsetting financial assets and liabilities
In December 2011, the IASB published revised offset requirements. In order to meet the requirements
for offsetting in accordance with IAS 32, the currently legally enforceable right of set-off shall not be
subject to a future event and must apply both in the ordinary business transactions and in case of
default and insolvency of a party. Furthermore, the revised standard prescribes that a gross offset
mechanism meets the offsetting requirements under IAS 32 when and if there are no major credit and
liquidity risks, receivables and liabilities are processed in one and the same offsetting procedure and
thus the offsetting eventually equals netting. The changes shall be applied to all financial years that
begin on or after January 1, 2014. The Group is currently researching the potential impact on the
presentation of its net worth, financial and earnings position, as well as its cash flows.
•
IRS 7 - Disclosures - Offsetting financial assets and liabilities
The IASB also published in December 2011 additional requirements for the disclosure of rights to offset.
In addition to more comprehensive disclosures regarding offsets actually made in accordance with IAS
32, disclosure requirements are introduced for existing rights to offset depending on whether the offset
in accordance with IAS 32 is actually made. The new provisions shall be applied to all financial years
that begin on or after January 01, 2013. The Group is currently researching the potential impact on the
•
IFRS 1 - Government loans
The change affects the recognition of public loans when adopting the IFRS for the first time and the
loans are granted at an interest rate that is lower than the market interest rate. The change provides for
another exemption for the retrospective adoption of the IFRS. Accordingly, the same provisions apply as
those that applied when IAS 20 was introduced in 2008 for first-time adopters. The changes shall be
applied for the first time to all financial years that begin on or after January 01, 2013. The changes do
not affect the Group's net worth, financial and earnings position.
•
IFRS 1 - Severe hyperinflation and removal of fixed dates for first-time adopters
The change of IFRS regarding severe hyperinflation sets forth adoption guidelines as to how to proceed
when presenting financial statements in accordance with IFRS when and if an entity was not able to
meet the IFRS standards for some time due to the fact that its functional currency was subject to severe
hyperinflation. As a result of the change which aims at removing the fixed dates for the transition to
IFRS the original references regarding the fixed transition date "January 1, 2004" are replaced by the
wording "date of transition to IFRS". Therefore, first-time IFRS adopters do not have to recognize and
thus restate any derecognition of transactions that occurred prior to the date of transition to IFRS.
According to the IASB, the changes shall be applied to all financial years that begin on or after July 1,
2011; earlier adoption is permitted (first-time mandatory adoption in the EU: financial years that begin
51
on or after January 1, 2013). The changes do not affect the Group's net worth, financial and earnings
position.
•
Improvement of the IFRS
On May 17, 2012, the IASB adopted the annual improvements of the IFRS. Among others, the following
standards were revised:
•
IFRS 1-First-time adoption of the IFRS Admissibility of repeated application of IFRS 1: Disclosure of
comparative information of previous year with respect to borrowing costs relating to qualifying
assets whose capitalization date is prior to the date of the transition to IFRS
•
IAS 1-Presentation of the financial statements: Clarification regarding the requirement to disclose
comparative information of previous years
•
IAS 16-Property, plant and equipment: Clarification of the classification of maintenance and
servicing equipment
•
IAS 32-Financial instruments: Disclosure: Recognition of income tax effects of distributions to the
owner of an equity instrument must be in compliance with IAS 12 Income taxes
•
IAS 34-Interim reports: Consistency of the disclosures with regard to the total segment assets in
order to improve consistency with IFRS 8 Business segments
The amendments shall be applied to reporting periods beginning on or after January 1, 2013; earlier
adoption is permitted. The changes will not have any significant impact on the presentation of the net
worth, financial and earnings position of the Group.
•
IFRIC 20-Removal costs in the production phase of a cast on day mine
IFRIC 20 exclusively governs the recognition of removal costs incurred in the course of the production
phase in a cast on day mine. The interpretation applies for the first time to all financial years that begin
on or after January 1, 2013. The first-time adoption does not have any impact on the Group.
Published but not yet adopted standards, interpretations and revisions not yet endorsed by the EU
•
IFRS 9 - Financial instruments
IFRS 9 introduces new provisions regarding the classification and measurement of financial assets and
liabilities. IFRS reflects the first stage of the IASB project for the replacement of IAS 39 and discusses
the classification and measurement of financial assets and financial liabilities in accordance with IAS 39.
In the next project stages, the IASB will discuss the recognition of hedges and the impairment of
financial assets. The adoption of the amendments resulting from the first stage of IFRS 9 will affect the
classification and measurement of the Group's financial assets; however, the Group does not expect
any impact on the classification and measurement of its financial liabilities. It is the announced goal of
the IASB to adopt all three drafts in IFRS 9 after final discussion and thus replace IAS 39. In a meeting
in 2013, the IASB resolved to once again eliminate the currently applicable first-time adoption date
January 1, 2015 and decided that a new date would depend in particular on the outcome of the stages
regarding classification and measurement and those regarding impairment losses. Upon first-time
adoption of IFRS 9, additional disclosures in accordance with IFRS 7-Financial instruments: Disclosures
are required. The Group is currently researching the potential impact on the presentation of its net
•
IFRIC 21 - Disclosures
In May 2013, the IASB published IFRIC 31—Levies, an interpretation of IAS 37. The interpretation
governs the recognition of levies that are not deemed income taxes as defined in IAS 12 and states in
52
particular when an obligation for the payment of such levies would have to be recorded as a liability.
The interpretation shall be applied in financial years beginning on or after January 1, 2014; earlier
adoption is permitted. At this time, the Group does not expect that the interpretation, if adopted by the
EU as is, will have a major impact on the representations in the financial statements.
•
IAS 39 - Disclosures for non-financial assets
In May 2013, the IASB implemented revised disclosure requirements in IAS 39 by publishing
"Recoverable Amount for Disclosures for Non-Financial Assets (Amendments to IAS 36)". Disclosures
of the recoverable amount that was determined based on the fair value less the costs to sell shall only
be made for non-financial instruments for which impairment losses were recorded or reversed in the
current reporting period. In addition, the disclosures were revised that must be made if the recoverable
amount was determined based on the fair value less costs to sell. The changes shall be applied
retrospectively all financial years that begin on or after January 1, 2014. An early adoption is permitted
when and if IFRS 13 has been adopted. At this time, the Group does not expect that the changes, if
adopted by the EU as is, will have a major impact on the representations in the financial statements.
•
IAS 39 - Novation of derivatives and continuation of hedge accounting
In June 2013, the IASB published revisions of IAS 39 Financial instruments. Due to this change, a
contractual party of a hedge instrument changes over to a central counter-party due to legal or
regulatory requirements does not trigger a discontinuation of the hedge if certain requirements are met.
The changes shall be applied retrospectively in financial years beginning on or after January 1, 2014;
earlier adoption is permitted. At this time, the Group does not expect that the changes, if adopted by the
EU as is, will have a major impact on the representations in the financial statements.
These standards and interpretations will be applied subject to the adoption by the EU at the date at which their
application is mandatory for the first time.
53
Qualitative and Quantitative Disclosures about Market Risk
We monitor market risks on an ongoing basis in order to develop mitigation measures. Our operations are
exposed to market risks primarily as a result of changes in interest rates, foreign currency exchange rates and
commodity prices. We use financial instruments to hedge financial exposure arising from the financing of
business operations and liquidity management. Derivatives that we use are primarily foreign currency forward
contracts and interest rate swaps. Our derivative activities are subject to the management, direction, and control
of our senior financial officers.
Interest Rate Risk
We are exposed to market risk from fluctuations in interest rates. At September 30, 2013, we had
approximately EUR 1.9 million (at September 30, 2012 EUR 49.3 million) of external variable rate debt. Holding
other variables constant (such as foreign exchange rates and debt levels), a one percentage point change in
interest rates would have expected to increase interest expense by approximately EUR 0.02 million for the year
ended September 30, 2013. Interest rate swaps were paid back as of December 11, 2012 due to changed
Treasury policy.
As of September 30, 2013 we had no interest rate swap exposure due to the new Treasury guidelines of
Mondi Group. For an aggregated amount of approximately EUR 10.0 million, the interest rate swaps were paid
back as of December 11, 2012. At September 30, 2012, the interest rate swaps had an outstanding notional
amount of EUR 60.0 million and a negative fair value of EUR 8.6 million. Under the terms of these interest rate
swap agreements, we made payments to a number of banking partners at an average fixed rate of 3.5 % on a
and we received a variable rate of six month EURIBOR.
Foreign Currency Risk
We conduct our business on a global basis in several international currencies, although the primary
currency in which we conduct our business is the euro, which is also our reporting currency. As a result of our
global operations, we are exposed to risk from fluctuations in currencies of foreign denominated sales and profit.
Where it is feasible, we reduce risk by denominating transactions in euros. However, material portions of our
sales and expenses have been generated by our operations in jurisdictions that have a currency other than the
euro, and we expect that these operations will account for a material portion of our sales and expenses in the
future. As a result, our financial results could be affected by factors such as changes in foreign currency
exchange rate or weak economic conditions in foreign markets in which we have operations.
Although our operations around the world are managed on a sufficiently local basis, these currency
translations can have a considerable impact on the Group’s consolidated financials, which are reported in euro.
A substantial part of expenses and sales of our operations in the USA and in Asia are denominated in
currencies other than the euro, principally the U.S. dollar. On the basis of unconsolidated group figures
approximately 16 % of our net sales for the last twelve month ended September 30, 2013 are associated with
operations in jurisdictions that have a currency other than the euro. Translational currency risk occurs also for
conversions of operating results in non-euro zone countries in euro at the end of the reporting periods. In the
event of a decline in the value of the U.S. dollar compared to the euro, it cannot be ruled out that we would
generate lower revenues translated into euros. Based on the assumption that the euro had a 10 % appreciation
relative to actual market development against our dollar denominated business for the Financial Period 2013,
sales would have been reduced by approximately EUR 11.6 million and operating income would have
decreased by approximately EUR 0.9 million before giving effect to the forward contracts described below.
Exchange rate changes also affect our consolidated balance sheet. Changes in the euro values of our
consolidated assets and liabilities resulting from exchange rate movements may cause us to record foreign
currency gains and losses. On September 30, 2013, on the basis of unconsolidated group figures approximately
37% of our tangible assets were associated with operations in jurisdictions that have a currency other than the
euro.
Foreign exchange transaction risks are hedged to the extent that they affect the Group’s cash flow. Our
exchange rate hedges are typically for periods of one year or less. Foreign exchange risks resulting from the
54
translation of the assets and liabilities accounts of foreign operations into the reporting currency of the Group
are not hedged. Receivables and liabilities of the Group are hedged by way of foreign exchange forwards to
cover risks from changes in exchange rates. As of September 30, 2012, our foreign exchange hedges had an
outstanding notional amount of EUR 35.7 million and a fair value of negative EUR 0.2 million. As of September
30, 2013, our foreign exchange hedges had an outstanding notional amount of EUR 16.9 milliion and a fair
value of positive EUR 0.1 million.
Commodity Price Risk
Raw materials account for a significant portion of our sales and are subject to significant price volatility. The
principal raw materials we use in our manufacturing processes are polyethylene resins. Since a sufficiently
liquid market for financial products for resins does not exist, we are unable to enact a hedging strategy to
minimize our exposure to resin price volatility. However, approximately 81.9 % of our sales in 2013 were made
under framework agreements with customers that include a resin cost pass-through provision. These provisions
generally operate to automatically adjust our selling prices by the respective resin price change, subject to an
average 3 month time lag. Gains and losses due to the time lag are generally offset during a calendar year
under normal volatility. In addition, we manage our exposure to resin price movements by actively working with
our customers to revise product prices on an ongoing basis.
55
BUSINESS
Overview
We are a leading developer, producer and marketer of highly developed specialty films, film-based
components, industrial packaging solutions and customized flexible consumer packaging products and operate
13 facilities located in eight countries across Europe, North America and Asia. We focus on the production of
technologically advanced film and film-based products, with an emphasis on innovation and customization. We
operate fully invested manufacturing facilities with advanced production capabilities covering the entire
production process. As of September 30, 2013, we had 2,800 employees.
In the financial period ended September 30, 2013, we generated sales of EUR 866.4 million and Adjusted
EBITDA as defined in the RCF of EUR 101.6 million, representing a 11.7 % Adjusted EBITDA as defined in the
RCF margin.
We operate primarily through two divisions: AFC and CGP (previously named CFP). The AFC division
manufactures and sells a variety of value added specialty films, film-based components and industrial
packaging solutions. The CGP division is a fully integrated manufacturer of customized flexible consumer
packaging products. In the financial period ended September 30, 2013, our AFC division accounted for 57.8 %
and our CGP division accounted for 42.2 % of the total unconsolidated sales of those divisions. Both divisions
operate in the following six endmarkets :
•
•
•
•
•
•
Hygiene,
Converting FMCG,
Food,
Petcare & Garden Products,
Beauty & Healthcare, Detergent & Cleansing Agents, and
Industrial.
The following diagram shows a breakdown of our sales per endmarket for the Financial Period 2013 (in %):
(1)
(2)
Beauty & Healthcare, Detergent & Cleansing Agents
Includes Disposals, Office Promotion and Art, Glass Industry, other endmarkets.
56
We are a leader in film and flexible packaging technology. We focus substantial resources on our research
and development platform to maintain our competitive advantage. We employed a total of 60 scientists,
engineers and technical personnel as of September 30, 2013 and maintain a centralized research and
development centre in Gronau, Germany, which houses state-of-the-art equipment to support the activities of
these professionals. We currently have more than 150 new products under development and we believe that
our technology and innovation capabilities enable us to establish leading positions in technically demanding
product areas. We believe that both our end-product differentiation and production optimization are key factors
in sustaining a pipeline of products with significant growth and attractive margins. Our ability to innovate and
upgrade existing products helps to extend the lifecycle of higher margin, technically demanding products.
Our diversified customer base comprises mid sized and large companies, as well as multinational blue- chip
companies with global sourcing and production. We have established strong relationships with our customers by
offering from our view industry leading quality standards and excellent product performance. We target
customers in technically demanding niche product areas and we enjoy long-standing, strong and expanding
relationships especially with a number of leading companies in the FMCG sector, such as P&G, Mars, Nestlé
and Tyson. In 2013, approximately 91.3 % of our sales were generated from sales of products used as either
packaging for, or films and film-based components in, FMCG. The remainder of our sales was generated from
other products for applications across multiple industries.
The following diagram shows a geographical breakdown of our sales for the Financial Period 2013 (in %):
Strengths
We believe we have a number of competitive strengths that differentiate us from our competitors. These
include:
Attractive positions in growing markets. We believe we have attractive market positions within each of
our principal product areas. We are among the largest manufacturers in the fragmented European flexible
plastic consumer packaging market, with leading positions in the specific segments on which we are focused.
Within Hygiene, we are the leading manufacturer of diaper closure systems globally, as well as the leading
producer of silicone coated films for individual sanitary napkins and we estimate that we account for
approximately 70 % of P&G’s supplies with regard to their diaper closure systems.
Superior relationships with globally leading manufacturers. We conduct substantial business with the
leading, global manufacturers of branded consumer goods, such as P&G, Nestlé, Mars and Tyson. We have
established strong and long-standing relationships with these blue chip customers by offering from our view
industry-leading quality, sophisticated technical solutions and outstanding product performance. We focus on
understanding customer needs and addressing them through product quality, innovation, technical support and
57
service. Therefore, we strongly link our research and development efforts with customer requests and
innovation. We develop new ideas and convert them into value-added products by working closely with our
customers to meet their specific needs, thus resulting in significant switching costs in terms of investment and
time for our customers. We generally enter into comprehensive framework agreements with our major
customers that range in length from one to three years or sometimes even longer or are concluded for an
indefinite period. Over the last ten years we have not lost any major customers.
For the Financial Period 2013, our top ten customers accounted for approximately EUR 561.4 million, or
64.8 %, of our sales. The table below presents information on our top 10 customers for 2013 in terms of sales.
Customer
Huhtamaki
Procter & Gamble
Avery Dennison
Svenska Cellulosa
Aktiebolaget (“SCA”)
Mars
Nestle
Tyson
Bento/Ontex
Royal Canin
Clorox
Length of
relationship
(in years)
39
31
Endmarkets
23
Converting FMCG
Hygiene, Beauty & Healthcare,
Detergent & Cleansing Agents
Converting FMCG
21
21
15
15
8
7
5
Hygiene
Petcare & Garden Products, Food
Petcare & Garden Products, Food
Food
Hygiene
Petcare & Garden Products
Petcare & Garden Products
Vertically integrated world-class facilities with a global footprint. Our global platform is comprised of
13 fully invested facilities located in eight countries across Europe, North America and Asia. Many of these
facilities are strategically located close to raw material access, connected to well developed infrastructure and
near the operations of key customers, enhancing our ability to provide a high level of customer service, which
establishes a competitive advantage in certain products and end-uses. We have made significant investments in
modern equipment to satisfy growing demand for products based on our advanced technologies. Our capital
expenditures totaled €239 million from 2007 to 2013, of which more than half were used to expand our
production capacity. We have concentrated capital expenditures on product areas in which we have leading
positions, technological advantages and high quality customer relationships. We believe that our global footprint
and high quality production capabilities will enable us to continue to take advantage of attractive organic growth
opportunities. Our key facilities in Gronau, Halle, Jackson, Poznan, Barcelona and Szada have fully integrated
SAP management operation systems. All manufacturing facilities of the Group are certified to ISO 9001
standard and to ISO 14001 standard. The construction of our site in China (Taicang) is already finished and the
implementation and initial certifications of management systems (according to ISO standards) is scheduled for
2014. The ISO 50001 initial certification is already successfully carried out in Gronau, Osterburken and in Halle
(plants Halle and Steinfeld). In 2013 the ethical audits SMETA (Sedex Members Ethical Trade Audit) has been
carried out on following sites: Osterburken, Poznan and Mondi Consumer Packaging Technologies GmbH. The
SMETA auditing of each facility will be finalized by 2014. SMETA is designed to benefit retailers and consumer
brands and their suppliers, reducing duplication of effort in ethical trade auditing. As manufacturer of packaging
for among others food and hygiene markets, we have implemented and certified hygiene management system
at all of our European facilities in accordance with DIN EN 15593 Packaging-Management of Hygiene in the
Production of Packaging for Foodstuffs Standard, in Malaysia in accordance with Hazard Analysis and Critical
Control Points standard and in USA in accordance with AIB International standard. In addition, many of our
proprietary technological and manufacturing processes make it difficult for competitors to replicate our product
features. We believe we have also improved our cost position through several project and activities of our
continuous improvement across all of our facilities and is monitored via production key figures.
58
Technology and innovation leadership. We believe we are a leader in film, in particular in high
performance films, as well as flexible packaging technology, focusing substantial resources on our research and
development platform to maintain our competitive advantage. We currently have more than 175 new or modified
products or product optimizations under development. We operate a centralized research and development
centre in Gronau, Germany, which houses state-of-the-art equipment to support the activities of our scientists,
engineers and technical personnel. our technology and innovation capabilities enable us to establish leading
positions in technically demanding product areas, including diaper components, siliconized film used in femcare
hygiene products and free-standing, four-walled pouches (FlexZiBox). Our ability to provide our customers with
end-product differentiation and production optimization is a key factor in enabling us to sustain a pipeline of
products with significant growth potential and attractive margins. Although our components and packaging form
an integral part of our customers’ end products, they typically account for a relatively small portion of the total
cost of the end product. In general, we believe the cost of our products accounts for approximately 3 to 7 %of
the retail price of our customers’ end products. We believe our product development capabilities, high quality
products and business continuity are key factors in our ability to maintain long term customer relationships.
Track record of EBITDA growth and cash generation. Historically, our business has generated a
significant amount of cash, with our gross cash flow (Adjusted EBITDA less total capital expenditures)
decreased on a high level with a peak in 2010. In 2011 we increased our capital expenditures due to necessary
capacity expansion. In addition, we eliminated low-margin products from our portfolio and divested
underperforming and non-core facilities. Despite our focus on improving our working capital metrics we incurred
more working capital during 2011 due to higher resin prices and higher volumes. In 2012 our overall profitability
was slightly depressed due to competitive pressure and uncertain market conditions (sovereign debt crisis). We
have reduced the amount of capital expenditures due to capacity expansions done in 2011, the resulting gross
cash flow remained on a stable level. In the 2013 period we have increased our profitability compared to the
2012 period. Gross cash flow was slightly lower due to higher capital expenditures in the 2013 period compared
to the 2012 period. Despite significant fluctuation in prices of polyethylene resins (our main raw material) in
recent years, we have been successful in substantially mitigating the effect of rising resin prices due to the resin
cost pass-through provisions in our framework agreements that cover a substantial proportion of our sales. In
2013, approximately 81.9 % of our sales were made under framework agreements that include a resin cost
pass-through provision. These provisions automatically adjust our selling prices, subject to a one to six month
time lag (with an average time lag of three months), as a result of changes in spot prices in the resin market.
Over the three-year period from 2011 to 2013, our gross profit per kg sold remained stable at around EUR 0.590.64 per kg while polyethylene resin prices experienced sharp fluctuations.
Strong future sales visibility and profit growth potential. Given our significant number of framework
agreements and strong long-term customer relationships, our prediction of future sales in the past has been
accurate. Historically, volumes with our long-term customers have generally exceeded contractual volume
commitments. We believe we are well positioned to achieve attractive sales growth due to: (i) our established
platforms in growing markets, including Eastern Europe and Asia; (ii) our strong existing relationships with key
customers; (iii) our recently installed capacity and additional near-term expansion projects that address specific
customer and product opportunities; and (iv) anticipated global market share growth of certain of our existing
customers and (v) value accretive acquisitions in niche, non-consolidated segments.
Experienced and committed management team. Our management team has extensive experience in
specialty films, film-based components, industrial packaging and flexible consumer packaging and a proven
track record of successfully developing and expanding our operations. Each member of our senior management
team has been with us between 15 and 20 years. Our management team has demonstrated both an
entrepreneurial mindset in implementing a number of growth initiatives and an ability to execute operational
improvements to enhance profitability. Furthermore, our senior management is complemented by a strong team
of local operating managers with extensive experience and in-depth knowledge of the packaging industry,
together with customer relationships at the local and country level. Senior and local management, together with
employees, have developed seven shared values that frame our corporate culture: partnership, global,
independence, quality, innovation, flexibility and passion for excellence.
59
Strategy
We have leveraged our competitive strengths to pursue attractive product areas. Our product innovation
expertise, high quality customer base and manufacturing excellence have enabled us to successfully enter new
markets and achieve attractive volume growth in core markets. The key elements of our business strategy
aligned with the overall Mondi strategy are:
Continue to focus on technology and innovation. We believe our team of research and development
professionals, with state-of-the-art laboratory facilities and deep materials science and process know-how,
enables us to work closely with technical specialists in our plants and with customers to develop new products
and technologies. We intend to seek opportunities to supply technically demanding solutions in order to
capitalize on our manufacturing capabilities and concentrate on segments in which expertise and quality are
highly valued by customers. We will supplement our in-house developments with technological capabilities
obtained from third parties through corporate acquisitions or by licensing technologies. We currently have over
150 new or significantly modified products under development. In addition, we will continue to innovate and
improve existing products and technologies to prevent commoditization and we closely monitor and respond to
current market trends, such as shift of rigid packaging to flexible solutions, paper packaging to plastic packaging
and the market request for high sophisticated packaging solutions with a strong focus on convenience features
to simplify the handling of the packaging as well as to support the usage of the product itself. For example, we
recently introduced NorCell to the market, an innovative foamed film with a very attractive cost/performance
profile. Further, we believe we can extend our product lifecycles by migrating mature product lines to facilities in
low cost countries and introducing them to emerging market economies.
Maximize opportunities with existing customers by replicating the relationship model with
worldwide leading FMCG companies. We believe our technical expertise and global reach enables us to
capture incremental product and geographic opportunities with multinational customers, including expanding
into new regions with our global customers. For example, P&G has grown to be our largest customer over the
past two decades, with our sales to P&G increasing nearly 3.0-fold (annual basis) from approximately EUR
114.0 million in 2000 to EUR 329.3 million in 2011 and EUR 345.5 million respectivey EUR 341.0 million for the
comparable periods of 2012 and 2013. The growth and development of our relationship with P&G is derived
from our focus on four areas: (i) product differentiation and joint development efforts; (ii) the expansion of our
global manufacturing capabilities; (iii) the ability and technical expertise to follow P&G into new product areas;
and (iv) the extension of product life cycles through the development of multiple generations of products. We are
translating this model to our existing relationships with other blue-chip multinational customers, such as Mars,
Nestlé and Tyson.
Continue expansion into strategic markets. We will continue to extend our operations in strategic
markets based upon an analysis of the market opportunities, competitive landscape and the needs of our
existing blue chip customers. We are currently building up our company Mondi (China) Film Technology Co.
(previously NORDENIA (China) Film Technology Co.), Taicang/China to meet our customer’s requirements in
China. In addition, we have a world-class facility in Poznan (Dopiewo), Poland in which we continue to invest in
order to address an increasing flow of attractive opportunities with local and multinational customers.
Furthermore, we also currently operate facilities in Hungary, Russia and Malaysia. We decided to increase our
commitment within the Asia Pacific region by entering selected markets with technically demanding, high-margin
products, such as hygiene product components, in order to benefit from regional market growth and
demographic developments.
Maximize profitability and cash flow generation. We intend to pursue various initiatives designed to
continue to reduce costs, increase sales and improve working capital in order to maximize our profitability and
cash flow generation. Our competitiveness and long-term profitability are, to a significant degree, dependent
upon our ability to keep costs under control (including the costs of raw materials, labour, consumables such as
power and transport) and maintain efficient operations. As part of those initiatives, we plan to continue to work
to reduce our overhead costs, improve our procurement process and realize operating efficiencies. Our
production costs are also significantly affected by production volumes and, therefore, we also plan to pursue
increased production levels and maximize capacity utilization. With respect to sales, we intend to focus on
manufacturing technologically demanding products, which generate higher margins, and progressively reduce
60
the manufacturing of less profitable commoditized products. With respect to working capital, we will continue to
seek to improve payment terms, collections and inventory management.
Pursue strategic acquisitions. We intend to opportunistically pursue selective acquisitions which provide
new customers and/or new technologies, and which are operationally compatible with our business. We will
continue to maintain an active dialogue with a number of family-owned businesses known to our management
that would be good strategic fits for our business, particularly in the fragmented packaging segments in parts of
Europe, Russia, Asia, North America and Latin America.
History
Our business was founded in Steinfeld, Germany in 1966. For the next two decades, we focused on
developing products for our domestic market, building technical expertise and developing a strategy to expand
internationally. In 1987, we acquired our manufacturing facilities in Halle and Gronau, Germany, which
significantly increased our geographic scope and production capabilities.
In 1988, we launched our international expansion efforts with our first overseas manufacturing facility in the
United States in Jackson, Missouri. Over the next two decades, we significantly expanded our international
presence through greenfield investments and acquisitions. In 1993, we opened manufacturing facilities in Spain
and Hungary, which represented our first European manufacturing facilities outside of Germany. In 1996, we
established a new manufacturing facility in Poland, and in the following year we entered into a joint venture in
China. In 1998, we opened a second manufacturing facility in Poland and acquired a 50 % interest in a
Malaysian entity. We further expanded our global reach in 2003 with the acquisition of our Russian facility. In
2007, we acquired 100 % control of our Malaysian operations from our joint venture partner. In 2011 the Issuer
established a wholly owned new facility in the Peoples Republic of China, Taicang.
From 2006 to September 30, 2012, we have been majority owned by the Oaktree entities. Since that time,
we have made significant investments to expand our manufacturing facilities in Germany, Poland and Russia,
and refocused and refined our global footprint by divesting a number of under-performing facilities and
businesses, including those in Canada, France, the Netherlands and Morocco. Throughout our expansion, we
have continued to apply our technical and manufacturing expertise across all of our global operations. We
believe we have developed a global footprint of high-class facilities throughout Western and Eastern Europe,
North America and Asia. We benefit today from the rigorous and consistent application of our technical and
manufacturing expertise throughout our global operations.
On October 1, 2012 Mondi Group completed the transfer of 99.93% of the outstanding capital stock of the
Issuer. Resulting from a squeeze-out transaction in April 2013 Mondi Holding Deutschland GmbH acquired
further shares of non-controlling interest and finally holds 100 % of the shares of the company.
Operations
We act as holding companies for 13 sites located in eight countries across Europe, North America and Asia.
Four facilities are located in Germany, one in Spain, one in Hungary, one in Poland, one in Russia, one in
China, two in the United States and two in Malaysia. The manufacturing facilities in Europe are located in close
proximity to numerous customers, while the facilities in Eastern Europe and Asia provide access to low cost
production and high growth markets. We believe we are well positioned to service the geographic growth of
existing customers and access new customer demand in local markets while maintaining a production cost
advantage. The facilities have advanced capabilities enabling us to concentrate on highly developed specialty
films, film-based components, industrial packaging and customized packaging solutions for the most attractive
segments of the market. For operational and management purposes, our operating companies are grouped into
two divisions based on product focus: the AFC division and the CGP division. The activities of both divisions are
based primarily on our core technology and production capabilities in film and film-based products for
multinational and regional customers manufacturing products for a variety of end uses.
61
The following diagram shows a geographical breakdown of our sales for the Financial Period 2013:
Our Endmarkets
Our divisions operate in the following endmarkets.
Hygiene. In the Hygiene endmarket we supply film-based hygiene components to multinational producers
of diapers and sanitary napkins. We specialize in elastic diaper components and mechanical diaper fastening
systems where we both hold a global leading position. Our technological advanced films provide our customers
with the needed characteristics to optimize their products and maximize processing speed. In addition, we
supply siliconized films for individual sanitary napkins. We also provide wicket bags and bundle films for the
outer packaging of hygiene products, especially for baby and femcare applications. Our key customers are
P&G, SCA, Bento and Ontex and our key competitors in this endmarket are 3M, Aplix and Clopay.
During the Financial Period 2013 volumes and net sales have been decreasing. Within the product
segment of diaper components comprising elastic diaper components and mechanical diaper closure systems
volume and net sales were decreasing due to downgauging initiatives and a switch in product technology.
Siliconized films for individual sanitary napkins were stable regarding net sales with parallel decreases in sales
volume. Other diaper components consisting mainly of elastic films performed well compared to the previous
financial period. Wicket bags sales showed a slight increase in volume and in net sales, respectively. In the
Hygiene endmarket, we plan to maintain our market position in Europe and North America and to increase
penetration in key growth markets like Asia and Eastern Europe. For the Asian region, the construction works
of our new Chinese plant for diaper components in Taicang have started and are in progress.
Converting FMCG. In the endmarket Converting FMCG, Nordenia mainly supplies label films, primarily
used for labelling consumer packaging products such as shampoo bottles, soap packaging and deodorants, and
laminating films for use in consumer packaging products. Our label films are made out of polyolefins and are
delivered as roll-stock. In order to improve printability, our labels can additionally be top coated. A special kind
of label film is the “VIP” label (variable information printing) which can be printed using thermo transfer method
and thus offer the opportunity to provide each label with individual additional information, e.g. logistic
information. Customers of our label films are printers and producers of label stock. Our coextruded laminating
films provide different characteristics based on the designed purpose: barrier films protect products from drying
out, prevent the intrusion of moisture, oxygen, light, smells and the loss of flavor. Barrier films are also used as
tube laminating films and as anti-fog surfaces to avoid condensation. Bag-in-box films are converted by our
customers to packagings for liquids. Peel films guarantee a safe and, at the same time, easy-to-open
62
packaging. With re-closeable films, customers can open and reclose the packaging in a convenient way and
keep the products longer fresh. Customers of our laminating films are mainly packaging converters which
produce complete packaging solutions. Our key customers are Avery Dennison, Huhtamaki and UPM/Raflatac
and our key competitors in this endmarket are Polifilm, RKW and Buergofol.
The Converting FMCG endmarket was decreased with regard to volume and net sales. For both main
product segments laminating films and label films we face a tough competition especially for commodity
products. Especially on the European market for laminating films, customers tend to reduce volumes after the
merger of Nordenia and Mondi due to the competition in other product segments like flexible packaging. On the
other hand, the intercompany business opportunities were extended and showed first successes. An important
topic for the future to manage profitability will be margin and cost management as well as the concentration on a
competitive product portfolio. Within the label film segment, we already obtain a strong position and further
intend to grow in the Asian and Latin American markets.
Food. Within the Food endmarket, we are supplying multilayer laminates as well as mono layer packaging.
The material used depends on the different needs such as barrier or mechanical properties related to filling
goods as well as to the filling line equipment of the customer. The structures we produce cover a very broad
range of applications. From triplex laminates for coffee or culinary applications to duplex structures for
dehydrated products and snack food applications as well as mono materials with or without cold seal for the
confectionary business. Almost all products are printed in either rotogravure or flexographic printing. The
biggest part of the food business is supplied as roll-stock material and will be converted into the final packaging
during the filling process at the customers premises (form, fill and seal technology). In addition, we also produce
pre-made bag solutions such as stand-up pouches, FlexZiBoxes with different easy-opening and re-closure
systems for the chicken industry and dry food applications as well as spouted pouches for culinary applications.
Due to the merger Mondi became a very relevant player in the food segment and did receive high recognition in
regard to development projects and new business opportunities. This effect is clearly visible in our innovation
project pipeline in which an important number of projects are dedicated to food which gives a quite promising
outlook for this highly attractive market segment. On the other hand due to long development and qualification
process we report a rather flat development compared to last year period (only slightly above last year period).
Nevertheless we continues our growth strategy with our existing multinational accounts. Our key customers in
this endmarket are Nestlé, Perdue and Tyson and our main competitors are Amcor, Huhtamaki, Constantia and
Printpack.
Petcare & Garden Products. In the endmarket Petcare & Garden Products, Mondi produces printed
laminates delivered as roll-stock and premade bags (FlexZiBox, FlexBox as well as SUP) with different features
such as easy opening and re-closure systems (slider, zipper) as well as handle applications. With the merger
with Mondi we became full range supplier within the petcare market, we are able to serve the dry and wet
petfood market, the snacks and treats segments as well as cat litter products. For garden products we mainly
supply stand-up pouch solutions. In all cases, the products for this segment are printed. Our key customers are
Clorox, Mars, Nestlé Purina, Royal Canin and Deurer. The key competitors in that endmarket are Bischof &
Klein, Britton Group, Exopack and Peel Plastics. The demand for packaging for petcare in the Petcare & Garden
Products endmarket was still high and with our latest product development Polywoven bags, Mondi could once
again underline their strong market positions by offering an attractive packaging solution for content typs of 5 kg
and more which is also seen as a promising alternative to paper bags.
Beauty & Healthcare, Detergent & Cleansing Agents. Our key products within the Beauty & Healthcare,
Detergent & Cleansing Agents endmarket are printed packaging for wet wipe applications (babycare and facial),
as well as triplex structures for sachet applications for hair coloration. Due to the very demanding product
content (oil wipes, aggressive coloration), these products require special barrier properties and high resistance.
Mondi’s customized PE solutions fulfill those requirements along with customer filling line needs. We supply the
Beauty & Healthcare, Detergent & Cleansing Agents endmarket with printed roll-stock laminates for refill
packaging for detergent powder as well as with mono web packaging with or without cold seal for dish washing
and textile washing tablets. Furthermore, Mondi produces lid film packaging for blister applications (toilette
blocks) as well as printed laminates for floor wipes and refill packaging for liquid soap. Our key customers are
Henkel, Johnson & Johnson and P&G and the main competitors in that segment are Amcor, Bischof & Klein
Korozo and Safta. The Beauty & Healthcare, Detergent & Cleansing Agents endmarket performed very
positively in the reporting period on a value and volume base. This is mainly the result of strong sales in the
63
North American market as well as a very promising product launch in the area of detergent & cleansing agents
from our German facility Halle. It is encouraging that this growth is almost exclusively based on the expansion of
existing business relations.
Industrial and Other. Within the Industrial endmarket, we produce temporary surface protection films,
which protect sensitive surfaces (plastic sheets, aluminium, steel, displays & optical applications) during
production, transportation and storage against dirt, moisture and scratches. These films can be delivered with
several adhesion systems for residue-free removal. Permanent surface protection films are used as decorative
finishings, floorings or substitute primer coatings. Our industrial packaging solutions are delivered as form, fill &
seal films (FFS) or preconverted packaging solutions for the packaging of bulk material such as resins or
powdery chemicals. Transport and pallet protection ensure a safe and easy packaging for pallets. Our key
customers are Tesa, Exxon and Nitto and our key competitors in this endmarket are Bischof+Klein, Klang Hock
Plastic and Novacel.
Compared to previous year, during the reporting period volume slightly decreased and net sales
development was positive, showing the change in the product mix towards higher value added products.
Surface protection films and preconverted sacks developed positive, whereas more commoditised products like
shrink and stretch hoods and form, fill and seal (FFS) films could not reach the result of the previos period. For
the future we plan to focus on product portfolio management and the development of innovative value added
film based solutions for industrial applications.
The tables below present the sales volumes by endmarkets, the percentage of sales volumes by
endmarkets the sales by endmarkets, the percentage of sales by endmarkets and geographic regions for our
Group for each of the periods presented:
Sales volume in tons by endmarkets
Comparable Period ended September 30,
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Petcare & Garden Products ...................
Beauty & Healthcare, Detergents &
Cleansing Agents ...................................
Industrial.................................................
Other ......................................................
Total.......................................................
64
2013
2012
2010
74,173
60,168
20,996
15,299
77,252
66,023
20,803
13,907
80,120
66,490
21,100
14,295
13,420
16,701
30,179
230,936
12,923
16,864
31,168
238,940
13,653
17,383
31,897
244,938
Percentages of sales volume by endmarkets
(unaudited)
Endmarkets
2013
2012
2010
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
32.1
26.1
9.1
6.6
32.3
27.6
8.7
5.8
32.7
27.1
8.6
5.8
5.8
7.2
13.1
100.0
5.4
7.1
13.0
100.0
5.6
7.1
13.0
100.0
Sales in thousands of euros by endmarkets
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
2013
2012
2010
394,408
134,314
100,609
103,132
410,634
149,673
99,852
94.916
387,070
156,080
96,522
96,402
58,973
52,848
22,130
866,413
56.527
51,286
19,635
882,522
55,210
51,075
22,840
865,200
Percentages of sales by endmarkets
(unaudited)
Endmarkets
2013
2012
2010
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
45.5
15.5
11.6
11.9
46.5
17.0
11.3
10.8
44.7
18.0
11.2
11.1
6.8
6.1
2.6
100.0
6.4
5.8
2.2
100.0
6.4
5.9
2.6
100.0
65
Geographic Region
Germany ................................................
Western Europe (excluding Germany) ..
Eastern Europe ......................................
North America ........................................
Asia/Pacific ............................................
Other ......................................................
Total.......................................................
Percentage of sales by endmarkets
2013
2012
2011
23.4
25.5
22.5
11.5
12.5
4.6
100.0
31.1
24.8
17.2
10.8
12.5
3.6
100.0
32.7
24.4
15.8
13.3
11.1
2.7
100.0
Advanced Films & Components Division
The AFC division currently operates four facilities: two in Germany, and two in Malaysia. Aditionally, one
facility is under construction in China. This geographic footprint with focus on Europe and Asia provides a
flexible and balanced manufacturing platform. The AFC division has developed long-term relationships with its
key customers, developing these relationships through a consistent focus on customized solutions to help
customers differentiate their products. Our largest customer for the AFC division is P&G, accounting for 45,0 %
of its sales for the Financial Period 2013.
The AFC division manufactures value added specialty films, film-based components and industrial
packaging solutions mainly for the Hygiene, Converting FMCG and Industrial endmarkets. For the Financial
Period 2013, 60.1 % of sales were attributable to sales in the Hygiene endmarket with another 23.4 % of sales
being attributable to sales in the Converting FMCG endmarket while 8.8 % of sales result from the Industrial
endmarket.
The tables below present the sales volumes by endmarkets, the sales by endmarkets, the percentage of
sales by endmarkets and geographic regions for the AFC division for each of the periods presented:
Sales volume in tons by
endmarkets in AFC
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
66
2013
2012
2011
56,904
54,091
1,938
2,811
61,521
61,138
2,091
2,959
64,526
61,165
2,623
3,051
1,740
14,180
23,368
155,032
1,271
14,533
22,659
166,172
2,139
14,603
23,138
171,244
in AFC
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
2013
2012
2011
36.7%
34.9%
1.2%
1.8%
37.0%
36.8%
1.3%
1.8%
37.7%
35.7%
1.5%
1.8%
1.1%
9.1%
15.1%
100.0%
0.8%
8.7%
13.6%
100.0%
1.2%
8.5%
13.5%
100.0%
Sales in thousands of euro by
endmarkets in AFC
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
2013
2012
2011
313,487
121,836
5,983
8,400
339,281
139,710
6,868
8,582
324,147
146,155
7,794
8,433
4,912
46,151
20,807
521,576
2,606
44,754
16,166
557,967
4,439
43,475
22,316
556,759
Percentage of sales by endmarkets in AFC
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
67
2013
2012
2011
60.1%
23.4%
1.1%
1.6%
60.8%
25.0%
1.2%
1.5%
58.2%
26.3%
1.4%
1.5%
0.9%
8.8%
4.0%
100.0%
0.5%
8.0%
2.9%
100.0%
0.8%
7.8%
4.0%
100.0%
Geographic Region
Germany ................................................
Eastern Europe ......................................
North America ........................................
Asia/Pacific ............................................
Other ......................................................
Total.......................................................
Percentage of sales by geographic region in
AFC
2013
2012
2011
31.1%
22.3%
20.6%
2.5%
18.1%
5.4%
100.0%
42.9%
20.2%
13.8%
2.2%
17.1%
3.8%
100.0%
45.7%
18.8%
11.4%
4.0%
17.1%
3.0%
100.0%
Consumer Flexible Packaging Division
The Consumer Flexible Packaging Division manufactures flexible plastic packaging for the consumer goods
industry at eight locations domestically and abroad. The major endmarkets are Hygiene, Food, Petcare &
Garden Products, as well as Beauty & Healthcare, Detergent & Cleansing Agents. The companies of this
segment include Mondi Halle GmbH with plants in Halle and Steinfeld, Mondi Consumer Packaging Iberica
S.A., Mondi Poznań Sp. z o. o., Mondi Szada Kft., ZAO Mondi Slavnika, and Mondi Jackson Inc., with one plant
in Jackson and one in Hubble Creek.The companies in North America, Poland and Russia are among the
strategic companies in the food packaging industry. In the field of petcare, the following companies are of
particular strategic significance: Mondi Halle GmbH with its production sites in Halle and Steinfeld, the North
American location Mondi Jackson., Inc., and the Polish plant Mondi Poznań Sp. z o. o. The product portfolio
ranges from single layer films to multilayer structures that are delivered to customers as roll-stock or premade
bags. The products are usually used directly in the customer's filling process without further processing; they are
therefore the final product packaging. The products address both the needs of international, market leading
consumer goods manufacturers, as well as the needs of national producers. We enjoy long-standing
relationships with many of our key customers, many of whom have been customers for more than 20 years.
Due to the well balanced product portfolio within the CGP business risks related to market dependencies
are limited. The CGP division manufactures a wide variety of packaging products primarily for use in four
endmarkets: Hygiene, Food, Petcare & Garden Products, Beauty & Healthcare, Detergent & Cleansing Agents.
For the reporting period, 27,3 % of sales were attributable to the Hygiene endmarket, 27,1 % to Petcare &
Garden Products endmarket, 25 % to the Food endmarket and 14,2 % to the Beauty & Healthcare, Detergent &
Cleansing Agents endmarket.
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The tables below present the sales volume by endmarkets, the sales by endmarkets, the percentage of
sales by endmarkets and the geographic regions for the CGP division for each of the periods presented:
Sales volume in tons by
endmarkets in CGP
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
2013
2012
2011
21,198
6,344
19,250
15,251
19,396
5,192
18,894
13,506
19,922
5,824
18,655
14,292
11,680
2,798
8,398
84,919
11,653
2,839
9,031
80,511
11,514
3,388
10,524
84,118
in CGP
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
2013
2012
2011
25.0%
7.5%
22.7%
18.0%
24.1%
6.4%
23.5%
16.8%
23.7%
6.9%
22.2%
17.0%
13.8%
3.3%
9.9%
100.0%
14.5%
3.5%
11.2%
100.0%
13.7%
4.0%
12.5%
100.0%
Sales in thousands of euro by
endmarkets in CGP
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
69
2013
2012
2011
103,952
13,755
95,264
102,934
92,265
11,834
93,619
93,969
86,819
12,725
89,204
96,426
54,055
7,333
3,100
380,392
53,920
7,333
3,497
356,437
50,801
8,659
3,212
347,846
Percentage of sales by endmarkets in CGP
(unaudited)
Endmarkets
Hygiene ..................................................
Converting FMCG ..................................
Food .......................................................
Industrial.................................................
Other ......................................................
Total.......................................................
Geographic Region
Germany ................................................
Eastern Europe ......................................
North America ........................................
Asia/Pacific ............................................
Other ......................................................
Total.......................................................
2013
2012
2011
27.3%
3.6%
25.0%
27.1%
25.9%
3.3%
26.3%
26.4%
25.0%
3.7%
25.6%
27.7%
14.2%
1.9%
0.8%
100.0%
15.1%
2.1%
1.0%
100.0%
14.6%
2.5%
0.9%
100.0%
Percentage of sales by geographic region in
CGP
2013
2012
2011
13.7%
30.8%
23.2%
25.6%
3.7%
3.1%
100.0%
12.6%
33.2%
21.3%
25.7%
4.3%
2.9%
100.0%
12.6%
34.1%
21.4%
29.7%
0.3%
1.9%
100.0%
Manufacturing Processes
The principal manufacturing processes that we utilize in the production of our products are summarized
below.
Compounding and blending. Compounding and blending is the addition of two or more resins, materials or
ingredients to a resin. This process changes the characteristics of a given resin and differentiates resins for the
end-use products for which they are used. We are able to create proprietary resin recipes through the
compounding and blending process due to our research and development capabilities, raw materials know-how
and sophisticated manufacturing infrastructure. We monitor the quality of raw materials in our facilities, and if
sufficiently high quality base materials are not available on the open market, we make use of our own laboratory
facilities to compound and blend resins.
Extrusion. Extrusion involves melting resins and forcing the molten polymer through a die to form plastic
film. The film can be single-layer or multi-layer and can be in the form of a tube in the case of blown extrusion
or in the form of a sheet in the case of cast extrusion. The film produced in the blowing and casting process is
rapidly cooled and wound onto reels ready for printing, converting and finishing. We believe we operate some
of the packaging industry’s largest and most sophisticated extruders. Our extruders incorporate continuous
measurement of film composition and thickness with the ability to make real-time adjustments to critical
extrusion process parameters.
Conversion. Following the extrusion process, we convert the plastic film into the form required by our
customers by performing one or more of the following actions: printing, coating, laminating or roll-slitting the film,
70
or producing bags or pouches using the film. Printing can involve either flexographic printing or rotogravure
printing. Flexographic printing uses a roller with a rubber-like surface coated with quick-drying ink and is
typically used in connection with printing flexible packaging for confectionary, frozen food and household
products. Rotogravure printing uses etched metal cylinders to apply ink directly to plastic film to reproduce a
high-quality printed image and is typically used on high-quality flexible packaging. Coating is a process in which
a thin chemical layer is applied to a film surface. We have developed a cost effective way of coating large
surfaces with silicone, which is a key technology for femcare hygiene products. In many of our products, we
laminate base films onto a variety of other materials, such as polyester, polyamide, polypropylene, woven and
non-woven materials and aluminum. Roll-slitting involves cutting roll-stock into smaller rolls for use by
customers. This allows for efficient manufacturing of larger master rolls and a high degree of customization by
adjusting roll dimensions to customers’ packaging requirements. We also produce bags and pouches to
customer specifications in a variety of formats, including the FlexZiBox. Bags and pouches can be customized
by adding zippers, sliders, handles, laser cuts and other features. Finally, unused or residual film is recycled to
reduce our raw materials consumption.
Marketing, Sales and Competitors
As of September 30, 2013, we employed approximately 205 sales and marketing professionals, 75 of whom
worked within the Advanced Films & Components division and 116 of whom worked within the Consumer
Flexible Packaging division and 14 of whom worked within the Services division. We utilize key account
managers who act as central contacts for multinational customers to which we supply large volumes of products
from multiple facilities or which represent potential development opportunities for future business. With respect
to our relationship with P&G, our sales and marketing activities are managed by our CEO and a senior account
manager based in Cincinnati, Ohio. Our other sales and marketing activities are generally decentralized and
supervised at the individual plant level, where our local sales force serves customers by end-product and
reports to the country manager for the particular facility.
Competitors to our business are specific to each of the markets in which we operate. There is no single
competitor with which we compete across all of our markets. Competition in the markets in which we operate is
based principally on quality, product performance and characteristics, service and price. There are additional
competitive pressures in some sectors due to increasing consolidation among our customers.
With respect to higher margin value-added products, we believe that our competitive strength derives from
factors such as technological competence and support capability, product innovation and diversity, and our
ability to produce sophisticated products tailored to the specific needs of our customers and to deliver timesensitive products in an efficient manner. In addition, we work closely with our customers in developing their
products and it can often be costly for them to change suppliers. With respect to higher volume products, our
focus is on service, quality and price. This creates market entry barriers for competitors.
Raw Materials
The principal raw material used in our products is polyethylene resin. Other raw materials include nonwovens, purchased films, fabrics, inks, adhesives and transit packaging materials. Most of our raw materials
requirements are sourced on the open market from global leading and high quality suppliers. Although each of
our operating subsidiaries is responsible for its own raw material purchases, a lead buying organization
coordinates the group-wide purchasing of key raw materials and is responsible for consolidating and negotiating
terms and conditions with suppliers. Over the last three years, we purchased an average of 175,000 tonnes per
year of resin for our operations. As a significant buyer of resins, we are able to negotiate attractive and flexible
terms with our suppliers, such as volume discounts and annual rebates. We generally do not enter into supply
contracts for raw materials or purchasing obligations, however, some of our businesses enter into framework
purchase arrangements to secure volume discounts. Raw materials comprise a significant portion of our cost.
For the Financial Period 2013, our raw material cost represented 73.1 % of our cost of sales.
The raw materials we use are mainly commodity materials with readily available supply, provided by a large
number of suppliers. Accordingly, although we promote long-term partnership relationships with suppliers, we
71
do not have significant supplier dependencies. For the Financial Period 2013, our largest supplier represented
7.4 % of our total cost of sales.
The following diagram shows our material expenses breakdown in the Financial Period 2013:
Framework Agreements
Across each of our divisions, we typically enter into framework agreements with our customers that provide
for specific pricing, quality standards and other commercial terms. These framework agreements generally
have terms ranging from one to three years, with certain agreements with significant customers having longer
periods. These agreements do not obligate our customers to purchase any minimum number of our products or
to continue to purchase some or all of their requirements from us for any specific period of time. Historically, we
have generally entered into similar agreements with updated terms upon the expiration of the existing
agreements.
In each of these framework agreements, we seek to include a resin cost pass-through provision, which
automatically adjusts our selling prices as a result of changes in the price we pay for polyethylene resin. There
is typically a time lag between changes in the market price for resin and the corresponding changes in our
selling prices under contracts containing pass-through provisions, which time lag ranges from one to six months.
During the Financial Period 2013, approximately 81.9 % of our sales were made under agreements that contain
a resin cost pass-through provision, which had an average time lag of approximately three months. As a result
of these resin cost pass-through provisions, we have been successful in mitigating to a significant degree the
effect of volatile resin costs that has occurred over the last couple of years. From 2011 to 2013, our annual
gross margin ranged from 16.4 % to 17.3 % while polyethylene resin prices experienced significant fluctuations.
With respect to sales made under agreements that do not contain resin cost pass-through provisions, our ability
to pass through changes in the market price for resin is generally subject to competitive market conditions at
that time.
Research and Development, Patents and Licenses
Each of our divisions is supported by Mondi Consumer Packaging Technologies GmbH (Formerly Nordenia
Technologies GmbH), our research and development unit. We have 56 professionals dedicated to research and
development. Our strong research and development capabilities allow us to undertake development projects for
and/or together with our customers, which in turn continues our drive toward more advanced, higher valueadded projects and ensures strong relationships with our customers.
We own 190 patents, 282 patent applications and 33 utility models. Our patents are granted in approximately 24
different countries worldwide, including Germany, the United States, Japan, the United Kingdom and several
other European countries.
72
When appropriate, we license a portion of the technology that we use in certain of our products. Our most
significant license agreements are with P&G and Clopay and relate to technology that we use in the
manufacture of products we produce for those customers, which include our diaper components. In addition, we
have two license agreements with Hudson-Sharp with respect to our FlexZiBox packaging product. Of our four
principal license agreements, all of them continue for the life of the underlying patent.
Property, Plant and Equipment
At present our manufacturing facilities are located in Germany, Hungary, Malaysia, Poland, Russia, China,
Spain and the United States. We occupy 13 principal facilities totalling approximately 519,452 square meters.
We own substantially all of our principal facilities. We believe that our facilities are suitable and adequate for
our business purposes for the foreseeable future.
Our corporate headquarters is located in Greven, Germany and we maintain information technology
facilities in Steinfeld, Germany. Our most significant manufacturing facility is located in Gronau, Germany, with
sales from this facility accounting for approximately 51.5 % of our sales for the Financial Period 2013. We also
maintain administrative offices at our Gronau facility. The table below lists certain information about our
principal manufacturing facilities.
Location
Leased/Owned
Division
Endmarkets
Owned/Leased
Advanced Films &
Components
119.528
Osterburken
Owned
Halle
Owned
Advanced Films &
Components
Consumer Goods
Packaging
Hygiene, Converting FMCG, Petcare &
Garden Products, Beauty & Healthcare,
Detergent & Cleansing Agents, Industrial,
Other
Converting FMCG, Other
21,995
Steinfeld
Owned
Consumer Goods
Packaging
Hygiene, Food, Petcare & Garden Products,
Beauty & Healthcare, Detergent & Cleansing
Agents, Industrial
Food, Petcare & Garden Products
Owned/Leased
Consumer Goods
Packaging
Hygiene, Converting FMCG, Food, Petcare &
Detergent & Cleasing Agents
119,728
Owned
Advanced Films &
Components
Advanced Films &
Components
Industrial
18,525
Hygiene, Food, Other
8,852
Germany
Gronau
Hungary
Szada
Malaysia
Chemor
Siput
Owned
Approximate
square meters
24,002
32,709
Poland
Poznan
Owned
Consumer Goods
Packaging
Food, Petcare & Garden Products, Beauty &
Healthcare, Detergent & Cleansing Agents
34,068
China
Taicang
Owned
Advanced Films &
Components
Hygiene, Converting FMCG, Industrial, Other
34,068
Russia
Pereslavl
Owned
Consumer Goods
Packaging
Food, Petcare & Garden Products, Beauty &
Healthcare, Detergent & Cleansing Agents
42,673
Spain
Barcelona
Owned
Consumer Goods
Packaging
Hygiene, Converting FMCG, Food, Beauty &
Healthcare, Detergent & Cleasing Agents
35,030
Leased
Consumer Goods
Packaging
17,016
Owned
Consumer Goods
Packaging
United States
Jackson
(Hubble
Creek)
Jackson
(Indian
Creek)
73
25,994
We develop and maintain our facilities with modern equipment and extensive technical capabilities. Our
production lines are developed with industry leading machine suppliers and assemblers, and in many cases, our
own specialist engineers carry out extensive customization of the base equipment to create a proprietary
manufacturing process. We perform ongoing and regularly scheduled maintenance on each of our facilities and
we have never experienced an unplanned plant shut-down or material interruption in our operations due to
equipment failures.
All manufacturing facilities of the Group are certified to ISO 9001 standards and to ISO 14001 standards.
The construction of our site in China (Taicang) is already finished and the implementation and initial
certifications of management systems (according to ISO standards) is scheduled for 2014. The ISO 9001
standard sets provisions for developing, implementing and maintaining an effective quality management system.
The ISO 14001 standard sets provisions for compliance with applicable environmental and safety requirements
and ensure efficient handling of resources. In addition, those facilities located in the European Union that
manufacture and process consumer packaging have received operational hygiene management certification in
accordance with the Packaging Management of Hygiene in the Production of Packaging for Foodstuffs Standard
DIN EN 15593. Subsidiaries outside European Union are certified in accordance to local hygiene standards
(e.g. in USA an AIB standard, in Malaysia a HACCP standard). Hygiene management systems are used in
connection with preventive food safety. Our subsidiaries located in Germany (Osterburken, Gronau and Halle)
received certificates for an implemented Energy Management System in accordance with ISO 50001.
Insurance
We hold a number of insurance policies centrally managed and adjust on an ongoing basis according to the
current circumstances. We obtain insurance based on internal risk management analyses and maintain
comprehensive insurance policies with respect to property damage, business interruption, employers’ liability,
public and product liability, workers’ compensation and contract works. We believe that we maintain a level of
insurance that is appropriate for the risks of our business and is comparable to that maintained by other
companies in the packaging industry.
Employees and Pension Obligations
As of September 30, 2013, we had 2,800 employees.
Employees in certain of our facilities in Germany, Poland and Spain have established works councils or
employee representatives who have similar functions and entitlements to a works council, in accordance with
applicable local laws. Except for our facilities located in Barcelona/Spain and Ipoh/Malaysia, none of our
employees are bound by collective bargaining agreements. The collective bargaining agreements for
Barcelona/Spain and Ipoh/Malaysia encompass at September 30, 2013 approximately 439 employees, or
15.7 % of our employees worldwide. We have not experienced a strike or similar work stoppage in our facilities
since 2003. We believe that our relations with our employees are good. There have been no large-scale
redundancies in the Group in the last few years.
In some of our companies, performance related bonus schemes are in place. The Company and its
subsidiaries also provide for defined contribution plans for the employees of our Group and for individual defined
benefit pension commitments for certain employees of our Group. A deferred compensation scheme is in place
that all Nordenia Group Companies in Germany have joined. The scheme is administered through a relief fund
(Unterstützungskasse) which has taken out insurance coverage. In Mondi Jackson Inc., (formerly Nordenia
U.S.A., Inc.), a 401(k) plan is in place.
According to actuarial calculations based on IAS19 as of September 30, 2013 and September 30, 2012, we
had pension obligations of EUR 26.1 million and 27.0 million, respectively, and pension related assets of
EUR 7.6 and EUR 7.2 million, respectively. As a result, our balance sheet as of this date contained pension
liabilities of EUR 18.5 million and EUR 19.8 million, respectively. For the fiscal periods ended September 30,
2013 and September 30, 2012, we made contributions to the 401(k) plan on the employer’s part of
approximately EUR 186,000 and EUR 185,000, respectively.
74
For additional information regarding our pension liabilities see Note 2.18 (Provision for pensions and similar
obligations – Rückstellungen für Pensionen und ähnliche Verpflichtungen) to our financial statements as of and
for the fiscal period ended September 30, 2013.
Legal Proceedings
We are involved in a limited number of legal proceedings that have arisen in the ordinary course of our
business. We do not expect the legal proceedings in which we are involved or with which we have been
threatened in the previous twelve months to have, or have had in the recent past, significant effects on our
Group’s financial position or profitability. The outcome of legal proceedings, however, can be extremely difficult
to predict with certainty, and we can offer no assurances in this regard.
In January 2011, two shareholders of NIAG brought actions for avoidance and declaration of nullity against
the resolution of the extraordinary general meeting of NIAG held on December 15, 2010 to approve the
Consolidation Merger. In order to suspend the temporary prohibition of entry into the commercial register, which
was the result of the actions filed, NIAG obtained a court decision as part of the release procedure on May 26,
2011 which permitted the entry into the commercial register at the local court of Steinfurt under HRB no. 8959.
The avoidance action was rejected by decision of October 6, 2011. The claimant appealed before the Higher
Regional Court (Oberlandesgericht) of Hamm. The claimant has withdrawn the appeal and the company
approved the withdrawal on October 18, 2012.
During the award proceedings before the Regional Court in Dortmund (Landgericht) a minority shareholder
is having the exchange ratio in the Consolidation Merger reviewed by the court and is demanding additional
cash compensation. If he succeeds, shareholders owning a total of 3,770,401 shares would be entitled to
compensation.
Within the scope of an avoidance action before the Regional Court in Dortmund, two shareholders
challenge the resolutions adopted at the Annual General Meeting held on August 30, 2011 on the appropriation
of profits, the approval of the acts of members of the Management Board and the election of members to the
Supervisory Board. The claimants have withdrawn the avoidance action on October 11, 2012
In addition a fiscal court proceeding is pending dealing with the deductibility of payments under the
management option plan for the years 2006 to 2010. In case of a negative outcome of such fiscal court
proceeding, we could be obliged to make additional tax payments up to approximately EUR 2.0 million (plus
annual interest of 6 % thereon) for which tax provisions have been made in the Company’s financial statements
as of September 30, 2013.
Environmental Matters, Health and Safety and Governmental Regulation
Our operations and facilities are subject to a variety of laws and regulations governing the protection of the
environment and our employees, including those governing air emissions (i.e. emissions of solvents), the use of
water, the handling of hazardous materials and disposal of wastes as well as the remediation of contaminated
sites. We could incur substantial costs, including remediation costs, fines or civil or criminal sanctions, or third
party property damage or personal injury claims, in the event of violations or liabilities under these laws and
regulations, or non-compliance with the environmental permits required at our facilities. Potentially significant
expenditures could be required in order to comply with environmental laws that may be coming into force or
imposed in the future. We are, however, not aware of any threatened or pending material environmental
investigations, lawsuits or claims involving us or our operations. As of September 30, 2013, compliance with
federal, state and local provisions which have been enacted or adopted regulating the discharge of materials
into the environment, or otherwise relating to the protection of the environment, has not had a material effect on
our capital expenditures, earnings and competitive position. For the fiscal year ending September 30, 2013, we
spent approximately EUR 1.5 million for improvement measures relating to environmental, hygiene and safety
matters, and for the year ending December 31, 2014, we have included in our budget approximately EUR 10.0
million, respectively, for such matters.
75
As a manufacturer of packaging for hygiene products, food and petcare products we have implemented and
certified hygiene management system at all of our European facilities of the Group that manufacture and
process consumer packaging in accordance with DIN EN 15593 Packaging-Management of Hygiene in the
Production of Packaging for Foodstuffs Standard, in Malaysia in accordance with Hazard Analysis and Critical
Control Points standard (HACCP) and in USA in accordance with AIB International standard. In December
2009, our facility in Gronau, Germany introduced an occupational health and safety management system
pursuant to the requirements of the British Standard OHSAS 18001 (Occupational Health and Safety
Assessment Series) and in September 2011 our facility in Spain. Furthermore our German subsidiaries in
Osterburken, Gronau and Halle (plants Halle and Steinfeld) received as first facilities within the Group a
certificate for an implemented Energy Management System in accordance with ISO 50001. Over 10 years ago
we already started with the matrix certification procedure in accordance with ISO 9001 (Quality Management
System) and ISO 14001 (Environmental Management System).
We have adopted an integrated management system (called “IMS”) in order to make continuous
improvements to our products and processes. The fundamental aspects of the IMS are requirements relating to
quality, environment, hygiene and food packaging and work safety. With respect to quality, we evaluate not only
the processes that contribute to the manufacturing of a product, but also procedures for the planning, control
and monitoring of processes, products and services. The concept of environmental protection is anchored in our
company culture as a key aspect of sustainable business management. Our objective is for our products and
the connected processes to be both beneficial to our customers and compatible with the environment. We work
to maintain environmentally friendly operations by more efficiently utilizing energy resources, operating closed
cooling water circuit systems in manufacturing, striving to minimize process-related emissions and securing our
products during transport. We believe that qualified and safety-conscious employees and safe equipment are
essential for failure-free production over the long term. We believe to comply with local and international legal
and regulatory requirements and we continuously strive to improve and to ensure the best working conditions.
We also work in partnership with internal employee representatives to continuously improve employee safety.
76
MANAGEMENT
In accordance with German corporate law, the Issuer, a German stock corporation has three governing
entities: Management Board (Vorstand), Supervisory Board (Aufsichtsrat) and general meeting
(Hauptversammlung).
The members of the Management Board are appointed by the Supervisory Board for a maximum term of
five years. They may be reappointed or have their term extended for one or more consecutive terms of up to five
years each. Under certain circumstances, such as a serious breach of duty or a bona fide vote of no confidence
by the shareholders’ meeting, a member of the Management Board may be removed by the Supervisory Board
prior to the expiration of his or her term. A member of the Management Board may not attend to, nor vote on,
matters relating to proposals, arrangements or contracts between himself and the Group.
The Management Board is responsible for managing the Company in accordance with applicable law, the
Articles of Association and the internal rules of procedure for the Management Board including the business
distribution plan (Geschäftsverteilungsplan). The Management Board represents the Company in dealings with
third parties. The Management Board is required to report regularly to the Supervisory Board, particularly with
respect to business policy and strategy, profitability and any exceptional matters that may arise from time to
time.
The Supervisory Board appoints the members of the Management Board and is entitled to dismiss them for
good cause. The Supervisory Board advises and oversees the Management Board on the management of the
Company, but is not itself authorized to manage the Company, as set out in the German Stock Corporation Act.
The Articles of Association or the Supervisory Board must, however, designate any types of transactions that
may only be executed with the approval of the Supervisory Board.
Management Board of the Issuer
The Management Board of the Issuer currently consists of three members who are appointed by the
Supervisory Board in accordance with the German Stock Corporation Act.
Each member of the Management Board is assigned a specific area of responsibility. The members of the
Management Board are nevertheless jointly responsible for managing the Issuer. Furthermore, the rules of
procedure of NIAG set out certain transactions requiring an approval of the Supervisory Board, including: the
multi year business plan; the acquisition, sale or construction of long-term assets with a value exceeding
EUR 5,000,000; the formation of, the capital increase in subsidiaries or investment companies; entering into
material commercial agreements; issuing bonds or other securities; and granting guarantees, suretyships or
similar liabilities beyond a defined value.
The following table sets forth information as of September 30, 2013 regarding the individuals who serve as
members of the Issuer’s Management Board. All members of the Issuer’s Management Board served as
members of Mondi Consumer Packaging International AG Management Board before the Consolidation Merger
became effective.
Name
Ralph Landwehr
Age
58
Andreas Picolin
52
Andreas Busacker
48
77
Position
Chief Executive Officer and Chairman of
Management Board
Chief Operating Officer and Vice Chairman of
the Management Board
Chief Financial Officer
Ralph Landwehr was appointed Chief Executive Officer (Vorstandsvorsitzender) of NIAG in 2001. In
addition, he has been Head of the Consumer Division and a member of the Management Board since 1997. Mr.
Landwehr has been with NIAG since 1995. From 1995 to 1996 he was managing director of the Szada,
Hungary plant and from 1996 to 1997 he was managing director of the Halle, Germany plant. Prior to joining
NIAG, Mr. Landwehr held positions in Production, Technology and Sales with Harmstorf AG. He also held
positions at Schlichting Shipyard and was a member of the Management Board of Luerssen Group, where he
was responsible for Engineering, Marketing and Sales. He holds a degree in Engineering from the University of
Hannover.
Andreas Picolin has been a member of the Management Board of NIAG, Head of the Industrial Division and
in charge of Strategic Purchasing since 2001. He was appointed Chief Operating Officer in 2010. Prior to this
appointment as member of the Management Board, he was Managing Director of the Steinfeld, Germany plant
from 1993 to 2001. Mr. Picolin joined NIAG in 1991 as Executive Associate to the Chairman of the Executive
Board. Prior to joining NIAG, he was Head of the Distribution and Logistics Group of Colgate-Palmolive GmbH.
Mr. Picolin studied Industrial Engineering at the University of Hamburg.
Andreas Busacker has been Chief Financial Officer of NIAG since 2004. Mr. Busacker joined NIAG in 1996
and held the position of Group Treasurer from 1996 to 2001. He has been a member of the Management Board
since 2004. His current responsibilities include Finance and Controlling, IT and Legal and Tax. Prior to NIAG,
Mr. Busacker led the Treasury/Capital Markets and Risk Management as well as Investor Relations divisions at
Wella AG from 1991 to 1996. Previously, he held positions in Marketing and Controlling at Carl Schenck AG
from 1990 to 1991. He holds a degree in Industrial Engineering from Darmstadt University of Technology.
Supervisory Board of the Issuer
As a result of the Consolidation Merger, the Issuer became subject to the German Third-Part Act
(Drittelbeteiligungsgesetz). Since, the Supervisory Board of the Issuer consists of six members, four of whom
were elected by the shareholders in the general meeting, in accordance with the provisions of the German
Stock Corporation Act and two of whom were elected by the employees in accordance with the German ThirdPart Act.
A member of the Supervisory Board elected by the general meeting may be removed by a simple majority
vote at a general meeting. A member of the Supervisory Board elected by the employees may be removed by a
majority of at least three-quarters of the votes cast by the employees entitled to vote.
The members of the Supervisory Board are each elected for a term of approximately five years. The term
expires at the end of the shareholders’ meeting at which the shareholders discharge the Supervisory Board for
the fourth fiscal year after the beginning of the member’s term. The year in which the member’s term begins is
not counted in this calculation. Pursuant to the Issuer’s articles of association, the remuneration of the members
of the Supervisory Board is fixed by a resolution of the general meeting.
The Supervisory Board appoints a chairman and a deputy chairman from among its members. The
chairman and the deputy chairman are elected by a simple majority of the votes of the Supervisory Board. A
quorum exists when at least half of the members of the Supervisory Board are present at a meeting. Unless
otherwise provided for by law or the articles of association, resolutions are passed by a simple majority of the
Supervisory Board. In the event of a tie vote, the chairman may cast the tie-breaking vote.
78
The following table sets forth information as of September 30, 2013 regarding the individuals who serve as
members of the Issuer’s Supervisory Board. The terms of Ewald Unterste-Wilms and Manfred Kasper end in
2016. The other members of the Supervisory Board have been elected by the General Meeting on April 12,
2013.
Name
Peter J. Oswald
Andrew King
Franz Hiesinger
Thomas Schäbinger
Manfred Kasper
Ewald Unterste-Wilms
Age
51
44
48
51
55
56
Position
Chairman
Deputy Chairman
Member
Member
Employee Representative
Employee Representative
Peter J. Oswald graduated in law from the University of Vienna and in business administration from WUVienna Business School. He began his career with Deutsche Bank and automotive company KTM. He joined
the Frantschach Group in 1992 as the head of internal audit and later becoming corporate controller. After
serving as chief executive of the bag and flexibles business from 1995 to 2001, overseeing its recovery and
expansion, Mr. Oswald was appointed chief executive of Mondi Packaging Europe in 2002, leading its
subsequent integration with Frantschach into the new Mondi packaging division.
Andrew King was born in South Africa in 1969. He graduated in commerce from the University of Cape
Town, and is a Chartered Accountant (South Africa). Mr. King completed articles with Deloitte & Touche in
Johannesburg in 1994. In 1995 he joined Minorco, the international arm of Anglo American, as a financial
analyst, before assuming responsibility for the group’s investment management activities, and transferring to
their corporate finance department in 1998. He worked on a number of group M&A activities before being
appointed a vice president of Anglo American Corporate Finance in 1999. Mr. King was appointed Mondi’s vice
president of business development in 2002 and corporate development director in 2004. He served as Chief
Financial Officer of Mondi from June 2005 to May 2006, before being appointed as Group strategy and business
development director and has been appointed Chief Financial Officer of Mondi Group in October 2008.
Franz Hiesinger was born in Vienna in 1965. He graduated from Vienna School of Economics in Business
Administration and studied at Stockholm School of Economics (Sweden) Financial Economics. From 1990 until
2004, Mr. Hiesinger was employed in different positions for former Frantschach Group, including Managing
Director of the German Industrial Bag Plants as well as Director Corporate Development, before being
appointed CFO and Member of the Executive Board in 2000. After the acquisition of Frantschach Group by
Mondi Group in 2004, Mr. Hiesinger was appointed CFO and Member of the Executive Board of Mondi
Packaging Group. Since 2008, Mr. Hiesinger has been Chief Financial Officer of Mondi Europe & International.
Thomas K. Schäbinger was born in Austria in 1962 and graduated from Vienna School of Economics in
Economics. After having worked for leading manufacturers of Consumer Goods, such as Beiersdorf, he was
appointed Co-Managing Director of Unilever Germany for Industrial Chemicals. In 1998, Mr. Schäbinger
changed to former Frantschach Packaging AG to become Sales- & Marketing-Director Bags. Since 2001, Mr.
Schäbinger has been with Mondi Europe & International, having been CEO of the Business Unit Coatings for
more than ten years. As of 2012, he has been CEO of the Business Unit Fibre Packaging.
Manfred Kasper has been a member of the Supervisory Board of NIAG since 2008. Mr. Kasper has been an
employee of Mondi Gronau GmbH (formerly Nordenia Deutschland Gronau) since 1991, most recently in the
production planning department. Mr. Kasper has been a member of the workers council at Mondi Gronau GmbH
since 2000 and member of the group workers’ council since 2008. Mr. Kasper holds a degree as a statecertified engineer.
Ewald Unterste-Wilms has been a member of the Supervisory Board of Mondi Consumer Packaging
International AG (formerly NORDENIA International AG) since 1998. Mr. Unterste-Wilms has been employee of
Mondi Gronau GmbH since 1988 and currently serves as staff representative. He has been a member of the
workers’ council at Mondi Gronau GmbH since 1990, of which he became vice chairman in 1998 and chairman
79
in 2009. He was appointed as a member of the group workers’ council in 1998 and became chairman in 2002.
Mr. Unterste-Wilms has received training as an office management assistant and a software engineer.
Areas of Competency
The Management Board is responsible for managing the Issuer and the Supervisory Board supervises the
management and both boards are solely responsible for their own areas of competency (Kompetenztrennung).
In carrying out their duties, the individual board members must exercise the standard of care of a diligent and
prudent businessman. In complying with this standard of care, the boards must take into account a broad range
of considerations, including the interests of the company, its shareholders, employees and creditors. The
members of the Management Board and the Supervisory Board also become jointly and severally liable if they
breach their duties and cause damage to our company.
Compensation of the Issuer’s Management and Supervisory Boards
The following table sets forth our information regarding compensation to which the members of the
Management Board are entitled according to their service agreements in effect as of September 30, 2013.
Name
Ralph Landwehr
Andreas Picolin
Andreas Busacker
Principal Position
Chief Executive Officer
Chief Operating Officer
Chief Financial Officer
Pension
related Salary
310,000
260,000
250,000
Guaranteed
Bonus
170,000
125,000
115,000
Total
Guaranteed
Compensation
480,000
385,000
365,000
Management is also entitled to receive a variable bonus not to exceed 125 % of pension related salary upon
exceeding 100 % of the EBITDA target.
Pursuant to the articles of association of the Issuer, the general meeting must fix the remuneration of the
members of the Supervisory Board by way of resolution. On May 17, 2011, the general meeting resolved that
each member of the Supervisory Board will receive remuneration in the amount of EUR 20,000 per annum. The
Chairman is entitled to EUR 40,000 and the Vice-Chairman to EUR 30,000.
Service Contracts
The Issuer has entered into service contracts with each of the members of its Management Board. The
following table sets forth the date of each such service contract and the date the contract terminates (unless
extended, as discussed below).
Name
Ralph Landwehr
Andreas Picolin
Andreas Busacker
Date of contract
January 27, 2011
January 28, 2011
August 31, 2011
Termination of contract
June 30, 2016
June 30, 2016
June 30, 2017
The material terms and conditions of the service contracts with the Management Board Members are
similar. In addition to the remuneration described above, Messrs. Landwehr, Picolin and Busacker are entitled to
certain benefits, including contributions to health insurance, a company car and benefit under a pension plan. In
the event of a revocation of the Management Board Member’s appointment to the Management Board (other
than for reasons that would justify a summary dismissal) their service contracts will end six month to the end of
the calendar month after the revocation (or at the Termination date as defined above, whichever occurs first). In
this case, Mr. Landwehr will be entitled to a severance payment in the amount of the total guaranteed
compensation for 2.5 years, Mr. Picolin and Mr. Busacker in the amount of 2.0 years. The severance payment
will be reduced for every month between the date of the revocation and the end date of the service contract by
1/12 of the base salary. The service contracts of all three Management Board Members (Mr. Landwehr, Mr.
80
Picolin, Mr. Busacker) contain a post-contractual restrictive covenant for two years following the end of the
Management Board Member’s employment.
2006/2010 Stock Option Plan / Stock Appreciation Rights
In 2006, a stock option plan for German and foreign members of the senior management of the Group was
implemented. This stock option plan was converted to a virtual program in 2010, providing for a right of the
option holders to a cash payment (stock appreciation right) instead of granting subscription rights to shares. By
resolution of the general meeting of NIAG dated August 27, 2010 the contingent capital which had been created
to secure the original stock option plan was cancelled. On October 27, 2010 the management board and the
supervisory board of NIAG resolved upon the continuance of the previous stock option plan as virtual option
program and the corresponding adjustment of the option terms, to which all option holders agreed. Following the
Consolidation Merger the virtual option program is continued by the Issuer subject to certain value adjustments
taking account of the merger ratio.
As of September 30, 2012, a total of 2,379,094 options have been issued. The Management Board of the
Issuer holds a total of 1,534,899 options. 613,959 of these options account for Mr. Landwehr, 460,470 for Mr.
Picolin and 460,470 for Mr. Busacker. No options have been granted to Supervisory Board members. The
option terms provide that members of the Management Board of NIAG shall reinvest in the Company 30 percent
of the net payments received (after deduction of any taxes payable thereon) for the options.
The transfer of the majority of the Issuers shares by the Oaktree Investment Entities and other shareholders
to the Mondi Group (please see under “Recent Developments”) represents an Exit Event in terms of the Stock
Option Plan.
The cash payment per option due payable to the option holders was determined as stated in the option
terms, i.e. based on the fair value per stock. In the event that the share are sold against cash payment the fair
value was to be determined based on the assessed equity value per share less an amount equaling the pro rata
share in the transaction costs to be borne by the selling Oaktree funds. The equity value per share was based
on the cash purchase price per stock that the vendors received according to the purchase price. Amounts not
actually received were in particular deemed components of the purchase price that were paid to a trust fund in
accordance with the purchase agreement. This amount does not become due payable until and to the extent
that it is paid to the vendors after the expiration of the period specified in the purchase agreement for the sold
stocks. The maximum amount of the subsequent payment from the funds in the trust fund totals EUR 0.98 per
option. Furthermore, the option holders are entitled to a portion of the proceeds from the anticipated sale of the
investment in Danor. Based on the sales proceeds of EUR 3 million, the amount totals EUR 0.10 per option.
Accordingly, the Issuer paid an amount of EUR 7.86 per stock in early October 2012. So far the agreedupon amounts from the disposal of the investment in Danor and the funds in the trust fund have not been paid.
This was accounted for as at September 30, 2013 by recording an appropriate provision. At the balance sheet
date, the provision for outstanding payments from the discontinuation of the stock option program total EUR
2,500k.
Share Ownership
As of September 30, 2013 the members of the Management Board and the Supervisory Board don’t have a
participation in the capital stock of the Issuer..
81
PRINCIPAL SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Principal Shareholders
As of September 30, 2012 the Oaktree Investment Entities owned 83.3 % of the subscribed capital of the
Issuer. Pursuant to an agreement dated July 10, 2012, the Oaktree Investment Entities agreed to transfer these
shares to the Mondi Group. The transfer was completed on October 1, 2012. At this date Mondi Holding
Deutschland GmbH hold 99,93 % of the shares of Mondi Consumer Packaging International AG.
Resulting from a squeeze-out transaction in April 2013 Mondi Holding Deutschland acquired further shares
of non-controlling interest and finally holds 100 % of the shares of the company.
Related Party Transactions
Except as set forth below, none of the members of the management or supervisory boards or shareholders
holding greater than 1.0 % of the outstanding capital stock of the Issuer has or had any interest in any
transactions with us which are or were unusual in their nature or conditions or significant to our business taken
as a whole and that were effected during the current or immediately preceding financial year, or during any
earlier financial year and which remain in any respect outstanding or unperformed. No loans are outstanding
from us to any member of the management or supervisory boards.
Profit transfer agreement
With effect of Oct 1, 2012 the Issuer entered into a profit transfer agreement with the parent company
Mondi Holding Deutschland GmbH. On Sep 30, 2013 the issuer was obliged to transfer an amount of
EUR 25.589.460,13 on the basis of this agreement to Mondi Holding Deutschland GmbH.
E&I Licence contract
With effect of Jan 1, 2013 a contract between the subsidiaries of the Issuer and Mondi AG, Vienna, was
closed which allows the subsidiaries to use the name “Mondi”. The subsidiaries pay an annuallicense fee of
0.5 % of turnover.
Guarantee for the Notes
Resulting from the guarantee Mondi plc., London provided for the Notes after the acquisition by Mondi the
Notes achived Investment Grade Status. In this case the companies of the Group which originally provided a
guarantee are released. The Issuer pays a guarantee fee of 1.0 % p.a. of the total of the Notes to Mondi plc.,
London.
Financing contracts with the Issuer and its subsidiaries
Resulting from the integration of the Group in the Mondi-Group the financing strategy has been changed
and the Issuer and its subsidiaries are provided with loans and cash pooling accounts at arm's length by Mondi
Finance plc. which is not part of the Group. Loans and cash pooling accounts are granted at interest rates that
are comparable to average market interest rates.
Cost transfer and redebiting agreements
Between the Issuer, its subsidiaries and other companies of the Mondi-Group which are not part of the
Group certain cost transfer and redebiting agreements are closed.
82
NON-IFRS-EU FINANCIAL INFORMATION
EBITDA, Adjusted EBITDA according to RCF, and the ratios related thereto, are supplemental measures of
our performance that are not specifically defined under IFRS-EU. These measures are presented because we
believe that they and similar measures are widely used in the packaging industry as a means of evaluating a
company’s operating performance and financing structure, and in the case of Adjusted EBITDA according to
RCF because we believe it presents a helpful comparison of financial performance between periods by
excluding the distorting effect of non-recurring items. These measures may not be comparable to other similarly
titled measures of other companies and are not measurements under IFRS-EU or other generally accepted
accounting principles, and they should not be considered as substitutes for the information contained in the
Group’s financial statements.
We define EBITDA as consolidated net profit before income tax expenses, financial result, result from
discontinued operations and depreciation and amortization. We define Adjusted EBITDA according to RCF as
EBITDA plus the additional supplemental adjustments identified in the table below. We point out, that there has
been a refinement in definition in the last quarter 2010, were a differentiation has been made between adjusted
EBITDA according to RCF, which does include adjustments related to the Factoring Facility as the RCF
contracts consider it and adjusted EBITDA, which includes all adjustments beside of P&L effects of the
Factoring Facility, since this is an off-balance sheet issue.
Our EBITDA and Adjusted EBITDA according to RCF measures have limitations as analytical tools, and you
should not consider them in isolation, or as a substitute for analysis of our results as reported under IFRS-EU.
Some of these limitations are:
•
•
•
•
•
•
•
•
they do not reflect our cash expenditures or future requirements for capital commitments;
they do not reflect changes in, or cash requirements for, our working capital needs;
they do not reflect the interest expense or cash requirements necessary to service interest or
principal payments on our debt;
they do not reflect any cash income taxes that we may be required to pay;
they are not adjusted for all non-cash income or expense items that are reflected in our
statements of cash flows;
they do not reflect the impact of earnings or charges resulting from matters we consider not to
be indicative of our ongoing operations;
assets are depreciated or amortized over differing estimated useful lives and often have to be
replaced in the future, and these measures do not reflect any cash requirements for such
replacements; and
other companies in our industry may calculate these measures differently than we do, limiting
their usefulness as comparative measures.
Because of these limitations, our EBITDA and Adjusted EBITDA according to RCF measures should not be
considered as measures of discretionary cash available to us to invest in the growth of our business or as
measures of cash that will be available to us to meet our obligations. You should compensate for these
limitations by relying primarily on our IFRS-EU results and using these non-IFRS-EU measures only on a
supplemental basis to evaluate our performance. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and our unaudited consolidated financial statements and the related notes
included elsewhere in this Annual Report.
83
The following is a reconciliation of EBITDA and Adjusted EBITDA according to RCF to consolidated net
profit, the most directly comparable IFRS-EU measure:
Year ended September 30, / December 31,
2013
Income tax expenses
Financial result
(b)
EBITDA
(c)
Implied interest expenses on Factoring Facility
(d)
Management option plan expenses
(e)
Management fees
(f)
Restructuring expenses (income)
Severance payments
(g)
Gain/loss on disposal of assets
(h)
Unusual and other items
Extraordinary expenses from post merger integration
(i)
Mondi/Nordenia
(j)
Structuring expenses Issuer/Merger related costs
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
2012
(a)
2011
42,882
1,745
4,192
30,478
96,502
269
-287
0
779
-165
18
-51
0
13,045
15,298
23,665
25,446
77,453
1,117
-5,364
0
842
957
13
403
-36
14,259
8,978
45,845
28,541
97,624
1,235
511
156
406
797
-1,359
13
1,978
4,568
0
101,633
468
0
75,853
0
945
102,305
The fiscal year 2012 is a nine month business year from Jan 1 to Sept 30, 2012.
Includes depreciations on fixed assets (property, plant and equipment) and amortization of intangible assets.
Represents the implied interest component of the discount from the sale of receivables under the Factoring Facility. This implied
interest is not otherwise recorded in our consolidated income statement as interest expense. This amount relates to actual funding
costs incurred by the counterparty to the Factoring Facility.
Represents non-cash compensation charges recorded in connection with the vesting of stock options issued under NIAG’s
respectively the Issuers management stock option plan.
Represents advisory fees paid to Oaktree Capital Management pursuant to an advisory agreement between Oaktree Capital
Management and NIAG respectively the Issuer.
Represents the effects of reorganization and restructuring expenses or income incurred in connection with the sale or closure of
certain operations and final consolidation effects.
Represents the net gain or loss from the disposal of assets by certain operating subsidiaries.
Relates primarily to the release of accruals from prior years and the revaluation of pension provisions. In 2010 the major effect
results from professional fees in connection with the evaluation of an acquisition project.
Post merger integration expenses Mondi/Nordenia include rebranding costs and other integration costs.
Relates to consulting and notary costs incurred in connection with the formation of the Issuer and the preparation of the merger
NIAG/Issuer.
84
RISK FACTORS
An investment in our Notes involves significant risks. This Annual Report does not include a detailed
discussion of these risks. Existing and prospective investors should refer to the risk factors set forth in the
Offering Memorandum dated July 2, 2010 relating to the Notes. Prospective investors should consider those
risks carefully before making a decision to invest in the Notes. If any of those risks actually materializes, then
our business, financial condition and results of operations would suffer. In addition, there may be risks of which
we are currently unaware or that we currently regard as immaterial based on the information available to us that
later prove to be material. These risks may adversely affect our business, financial condition and operating
results. As a result, you may lose all or part of your original investment in the Notes.
85
Index to Financial Statements
Page
Consolidated Financial Statements and Audit Opinion
Financial Period 2013
Translation of the audit opinion
F-1
Consolidated income statement for the period from October 1, 2012 to September 30, 2013
F-2
Consolidated statement of comprehensive income for the period from October 1, 2012 to
September 30, 2013
F-3
Consolidated balance sheet as of September 30, 2013
F-4
Cash flow statement as of September 30, 2013
F-5
Statement of changes in group equity as of September 30, 2013
F-6
Notes to the consolidated financial statements as of September 30, 2013
F-7
Financial Period 2012
F-73
Consolidated income statement for the period from January 1 to September 30, 2012
F-74
Consolidated statement of comprehensive income for the period from January 1 to
September 30, 2012
F-75
F-76
F-77
F-78
Notes to the consolidated financial statements as of September 30, 2012
F-79
Year Ended December 31, 2011
F-148
Consolidated income statement for the period from January 1 to December 31, 2011
F-149
Consolidated statement of comprehensive income for the period from January 1 to
December 31, 2011
F-150
Consolidated balance sheet as of December 31, 2011
F-151
Cash flow statement as of December 31, 2011
F-152
Statement of changes in group equity as of December 31, 2011
F-153
Notes to the consolidated financial statements as of December 31, 2011
F-154
86
The following audit opinion has been issued in according with § 322 German Commercial Code
(Handelsgesetzbuch) and refers to the entire consolidated financial statements—comprising the income statement,
statement of comprehensive income, balance sheet, notes to the consolidated financial statements, statement of
changes in group equity and cash flow statement—as well as to the Group management report of Mondi Consumer
Packaging International AG, Greven. The Group management report is not reproduced in this financial report.
English translation of the audit opinion
We have audited the consolidated financial statements prepared by Mondi Consumer Packaging International AG, Greven/Germany, - comprising the income statement as well as the statement of comprehensive
income, the balance sheet, statement of changes in equity, cash flow statement and the notes to the financial
statements - and the group management report for the financial year from 1 October 2012 until 30 September 2013.
The preparation of the consolidated financial statements and the group management report in accordance with
International Financial Reporting Standards (IFRS), as adopted by the EU, and the additional requirements of
German commercial law pursuant to § 315a (1) HGB are the responsibility of the Company's Board of Directors.
Our responsibility is to express an opinion on the consolidated financial statements and on the group management
report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB ("German
Commercial Code") and German generally accepted standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer. Those standards require that we plan and perform the audit such that
misstatements materially affecting the presentation of the net assets, financial position and results of operations in
the consolidated financial statements in accordance with the applicable financial reporting framework and in the
group management report are detected with reasonable assurance. Knowledge of the business activities and the
economic and legal environment of the Group and expectations as to possible misstatements are taken into account
in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the
evidence supporting the disclosures in the consolidated financial statements and the group management report are
examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual
financial statements of those entities included in consolidation, the determination of entities to be included in
consolidation, the accounting and consolidation principles used and significant estimates made by the Board of
Directors, as well as evaluating the overall presentation of the consolidated financial statements and the group
management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements of Mondi Consumer Packaging International AG, Greven/Germany, comply with IFRS, as adopted by the EU, and the additional
requirements of German commercial law pursuant to § 315a (1) HGB and give a true and fair view of the net assets,
financial position and results of operations of the Group in accordance with these requirements. The group
management report is consistent with the consolidated financial statements and as a whole provides a suitable view
of the Group's position and suitably presents the opportunities and risks of future development.
Düsseldorf/Germany, 2 December 2013
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Signed: Feldhoff
Wirtschaftsprüfer
[German Public Auditor]
Signed: Arndt
Wirtschaftsprüfer
[German Public Auditor]
F-1
Mondi Consumer Packaging International AG, Greven
Notes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
Sales ...............................................................................................
Cost of sales ...................................................................................
Gross profit ....................................................................................
Selling costs ...................................................................................
Administrative costs.......................................................................
Research and development costs....................................................
Other operating income..................................................................
Other operating expenses ...............................................................
Exchange rate differences from business operations .....................
Operating profit ...........................................................................
Financial income ............................................................................
Financial expense ...........................................................................
Financial result .............................................................................
Profit before income taxes ...........................................................
Income tax expenses ......................................................................
Profit transferred
Result from continued operations ..................................................
Result from discontinued operations ..............................................
Consolidated net income..............................................................
thereof attributable to:
Shareholder of the parent ...............................................................
Non-controlling shareholder ..........................................................
F-2
(3)
(4)
(5)
(6)
(7)
(9)
(10)
(8)
(11)
(12)
(13)
(15)
10/0109/30
2013
kEUR
866,413
716,573
149,840
49,593
38,068
5,814
12,809
2,907
(243)
66,024
47,537
43,345
4,192
70,216
1,745
(25,589)
42,882
0
42,882
01/0109/30
2012
kEUR
666,441
557,191
109,250
34,223
15,778
4,190
4,031
6,722
(361)
52,008
13,547
37,212
(23,665)
28,343
15,298
0
13,045
0
13,045
42,926
(44)
13,070
(25)
Consolidated Statement of Comprehensive Income
10/01-09/30 01/01-09/30
2013
2012
kEUR
kEUR
42,882
13,045
Consolidated net income ..................................................................................
Other comprehensive income
Line items which will not be reclassified subsequently to profit and loss
Actuarial gains and losses from defined benefit obligation ...............................
1,116
(5,705)
Income taxes which will not be reclassified subsequently to
profit and loss .....................................................................................................
(1,763)
1,708
Line items which will be reclassified subsequently to profit and loss
when specific conditions are met
Exchange differences on translating foreign operations ....................................
(5,039)
3,565
Result from cash flow hedging
not affecting net income .......................................................................
0
295
Income taxes which will be reclassified subsequently to profit and loss
0
(109)
when specific conditions are met .......................................................................
(5,686)
(246)
Other comprehensive income ..........................................................................
37,196
12,799
Total comprehensive income ...........................................................................
27,240
12,832
Shareholder of the parent ...................................................................................
Non-controlling shareholder ..............................................................................
(44)
(33)
F-3
Consolidated Balance Sheet as of September 30, 2013
Notes
Assets
A. Non-current assets
1. Intangible assets ....................................................................................................
2. Property, plant and equipment ..............................................................................
3. Financial assets .....................................................................................................
4. Deferred tax assets ................................................................................................
5. Other financial assets ............................................................................................
6. Other non-financial assets .....................................................................................
kEUR
09/30/2012
kEUR
(16)
(17)
(18)
(19)
(20)
(20)
6,632
223,926
53,294
2,953
79
0
286,883
8,380
215,925
24,788
10,715
14
244
260,067
Current assets
Inventories ............................................................................................................
Trade receivables ..................................................................................................
Other financial assets ............................................................................................
Other non-financial assets .....................................................................................
Current income tax assets .....................................................................................
Cash and cash equivalents ....................................................................................
Assets available for sale ........................................................................................
(21)
(22)
(23)
(23)
(13)
(24)
114,554
132,131
92,343
11,152
14,739
5,694
0
370,612
657,496
113,139
94,151
26,893
6,622
390
33,068
0
274,263
534,330
Equity and Liabilities
A. Equity
1. Subscribed capital .................................................................................................
2. Capital Reserve .....................................................................................................
3. Revenue Reserves .................................................................................................
4. Profit attributable to shareholder of the parent......................................................
5. Currency adjustment item .....................................................................................
6. Share of equity attributable to the shareholder of the parent ................................
7. Share of equity attributable to non-controlling shareholder..................................
(25)
(25)
(25)
(25)
(25)
29,190
(174,648)
107,926
42,926
(6,648)
(1,254)
120
(1,134)
29,190
(175,088)
95,943
13,070
(1,609)
(38,494)
167
(38,327)
(26)
(26)
(26)
(28)
(30)
(31)
(26)
(26)
0
280,566
2,173
18,524
6,665
2,285
64,858
346
375,416
9,988
280,687
3,199
19,819
17,406
1,492
20,708
650
353,949
(26)
(26)
(26)
(26)
(31)
(26)
(26)
2,446
431
75,138
13,437
10,118
176,519
5,127
0
283,214
657,496
39,417
909
80,042
5,552
31,226
59,053
2,510
0
218,709
534,330
B.
1.
2.
3.
4.
5.
6.
7.
B.
1.
2.
3.
4.
5.
6.
7.
8.
Non-current liabilities
Subordinated loans ................................................................................................
Bonds ....................................................................................................................
Liabilities to banks ................................................................................................
Provisions for pensions and similar obligations ....................................................
Deferred tax liabilities...........................................................................................
Other provisions ....................................................................................................
Other financial liabilities.......................................................................................
Other liabilities .....................................................................................................
C. Current liabilities
1. Liabilities to banks ................................................................................................
2. Notes payables ......................................................................................................
3. Trade payables ......................................................................................................
4. Current income tax liabilities ................................................................................
5. Other provisions ....................................................................................................
6. Other financial liabilities.......................................................................................
7. Other non-financial liabilities ...............................................................................
8. Liabilities relating to assets available for sale .......................................................
F-4
(25)
Statement of Changes in Group Equity as of September 30, 2013
Subscribed
capital
Capital
reserves
Revenue
reserves
Profit
attributable to
the shareholder
of the parent
kEUR
kEUR
kEUR
kEUR
Profit carried forward ...........
Purchase of non-controlling
shares within the scope
of a merger .....................
Consolidated
comprehensive income ...
Other ...................................
29,190
(178,529)
89,073
14,299
3,441
(3,441)
29,190
(175,088)
of a merger .....................
Consolidated
29,190
Status at 09/30/2013............
29,190
Currency
adjustment
item
Available
for sale
financial
assets
Hedging
instr. fr.
cashflow
hedges
kEUR
kEUR
kEUR
14,299
(14,299)
(5,174)
(3,989)
1
95,943
13,070
3,565
13,070
(1,609)
(175,088)
95,943
13,070
13,070
(13,070)
(1,609)
440
(440)
(174,648)
(647)
42,926
(5,039)
107,926
42,926
(6,648)
F-5
0
Equity
Equity
attributable to attributable to
the shareholder non-controlling
shareholder
Taxes of the parent
Total
Group
equity
kEUR
kEUR
kEUR
kEUR
(295)
109
(51,327)
200
(51,127)
295
(109)
(33)
0
0
0
12,832
1
(38,494)
12,799
1
(38,327)
0
0
0
(38,494)
0
167
(38,327)
0
0
(3)
(3)
167
37,240
0
0
0
(1,254)
37,196
120
(1,134)
Cash Flow Statement as of September 30, 2013
Operating profit (EBIT including discontinued operations) .....................................
Depreciations on intangible assets and property, plant and equipment ....................
Income taxes paid .....................................................................................................
Interest paid ..............................................................................................................
Interest received........................................................................................................
Financial expenses paid (less financial income received) ........................................
Profit/loss from the disposal of property, plant and equipment ................................
Other non cash-relevant income/expenditure ...........................................................
Changes in working capital ......................................................................................
Increase in assets and provisions, in trade payables and other liabilities not related
to investing or financing activities ............................................................................
Cash flow from operating activities ......................................................................
Cash received from disposals of property, plant and equipment ..............................
Cash paid for investments in property, plant and equipment ....................................
Cash received from disposals of intangible assets ....................................................
Cash paid for investments in intangible assets .........................................................
Cash received from disposals of financial assets ......................................................
Cash paid for investments in financial assets ...........................................................
Cash received from the disposal of consolidated entities and other business units ..
Cash flow from investing activities .......................................................................
Cash paid for repayments of non-current financial loans .........................................
Cash received from the borrowing of non-current financial loans and bonds ..........
Transaction costs paid in economic relation to the borrowing of bonds...................
Cash received from the borrowing of current financial loans ..................................
Cash flow from financing activities .......................................................................
Change in cash ........................................................................................................
Change in cash funds from cash relevant transactions .............................................
Change in cash funds from exchange rate movements .............................................
Change in cash funds from change in consolidated companies
Cash balance at the beginning of the period .............................................................
Cash balance at the end of the period ...................................................................
F-6
10/0109/30
2013
kEUR
66,024
30,444
(12,846)
(38,102)
1,643
(1,309)
524
(916)
(44,940)
01/0109/30
2012
kEUR
52,008
25,446
(7,173)
(32,448)
900
(331)
319
(4,417)
(14,763)
(26,135)
(25,613)
392
(43,638)
113
(656)
943
(69)
1,866
(41,049)
(11,768)
59,589
(604)
18,935
2,059
(26,829)
0
(495)
222
(23)
3,643
(21,423)
(1,297)
2,222
0
43,413
(37,497)
6,841
4,353
4,353
147
1,232
27,336
33,068
196,592
(206,988)
37,425
(29,237)
(29,237)
1,863
0
33,068
5,694
Notes to the financial statements as at September 30, 2013
1
General disclosures
Mondi Consumer Packaging International AG (hereinafter referred to as Mondi CP) is the parent of an
international group (hereinafter referred to as "Group") in the packaging industry that operates in the divisions
Advanced Films & Components (AFC), Consumer Goods Packaging (CGP, formerly Consumer Flexible
Packaging) and Services.
The address is: Mondi Consumer Packaging International AG, Huettruper Heide 88,
48268 Greven. The Company with its registered office situated in Greven is registered in the Commercial Register
at the Amtsgericht Steinfurt [Steinfurt Local Court] under HRB 8959.
Based on the Share Purchase Agreement dated July 10, 2012, the shareholders of former NORDENIA
International AG (now Mondi Consumer Packaging International AG) agreed to transfer the majority of the shares
in NORDENIA International AG to Blitz 12-403 AG. Blitz 12-403 AG is a company of the Mondi Group. On
October 1, 2012, Mondi Group confirmed that all requirements were met and the transfer of the outstanding capital
stock in the amount of 99.93 % of NORDENIA International AG at EUR 259m was completed.
Since the merger of Mondi Consumer Packaging AG (formerly Blitz 12-403 AG) onto Mondi Holding
Deutschland GmbH on February 4, 2013, Mondi CP has been a 100 % subsidiary of Mondi Holding Deutschland
GmbH. This company is also a 100 % subsidiary of the Mondi Group whose parent is Mondi plc.
Since the Group intended to establish a fiscal unit for income tax purposes comprising Mondi Holding
Deutschland GmbH and Mondi CP, including their subsidiaries, the financial year was changed by way of
shareholders' resolution dated September 11, 2012; it now covers the period from October 1 to September 30 of the
following year. The previous period was a short financial year.
The fiscal unit of Mondi Holding Deutschland GmbH and Mondi CP was established by way of agreement
dated June 7, 2013 and registered in the Handelsregister [Register of Companies] on August 22, 2013.
Previous year's data in the consolidated income statement, the consolidated statement of comprehensive
income, the consolidated cash flow statement, the statement of shareholders' equity and the relating disclosures in
the notes are comparative only to a limited extent due to the fact that the previous financial year was a short
financial year.
The consolidated financial statements of Mondi Consumer Packaging International AG for the financial year
from October 1, 2012 to September 30, 2013 and the Group Management Report which Deloitte & Touche GmbH,
Duesseldorf audited, are publicly disclosed in the electronic Bundesanzeiger [German Federal Gazette]. The Board
of Directors of Mondi Consumer Packaging International AG released these consolidated financial statements on
December 2, 2013 for public disclosure.
2
Summary of most significant recognition and measurement methods
The most significant recognition and measurement methods used when compiling these consolidated
financial statements are outlined below. The methods described below were applied consistently to the reporting
periods included herein unless otherwise specified.
2.1
Basis for the compilation of the consolidated financial statements
The consolidated financial statements of Mondi Consumer Packaging International AG as at September 30,
2013 were compiled based on Sec. 315a para. 1 in context with para. 1 HGB [German Commercial Code] in
compliance with the International Financial Reporting Standards (IFRS) as applied in the European Union. The
consolidated financial statements were compiled based on historical cost, except for financial assets held for sale
F-7
which were measured at market value and financial assets and financial liabilities measured through profit and loss
at fair value (including derivative financial instruments).
The compilation of consolidated financial statements in accordance with IFRS requires estimates.
Furthermore, the application of the group-wide recognition and measurement methods requires assessments by the
management. Areas with a larger degree of discretionary decision regarding measurement or with a larger degree of
complexity or areas in which assumptions and estimate have a major impact on the consolidated financial statements
are presented in chapter 2.23.
For the purpose of clearer presentation, various items of the consolidated balance sheet and consolidated
income statement and the consolidated statement of comprehensive income were combined. These items are stated
separately, together with explanatory comments, in the notes to the consolidated financial statements. The
consolidated income statement is compiled using the cost-of-sales accounting method.
2.1.1 Going-concern
The Group compiled the consolidated financial statements on the basis of the going-concern principle; the
required funds are available in a sufficient amount.
2.1.2 Changes in the recognition and measurement methods and disclosures
2.1.2.1 Standards, interpretations and changes of standards and interpretations to be applied for the first time
in the financial year
The following standards, interpretations and changes of standards and interpretations had to be applied for
the first time in the financial year beginning October 1, 2012:
•
IAS 1 – Statement of comprehensive income
The changes in IAS 1 relate to renaming the statement of comprehensive income into statement of profit or
loss and other comprehensive income and the reorganization of the other comprehensive income.
Accordingly, the other comprehensive income will be divided into two sections: one section that contains
those elements that will be "recycled" into the statement of profit or loss in future periods and one section
that comprises all those elements that will not be "recycled" in the following periods. The changes in IAS 1
shall be applied in financial years beginning on or after July 1, 2012. The Group applied the changes
retroactively and adjusted the items of the other comprehensive income accordingly. Except for the abovedescribed changes in the presentation, the adoption of the revised IAS 1 will not have any impact on the
presentation in the income statement and the other comprehensive income.
2.1.2.2 Published but not yet to be adopted standards, interpretations and modifications
financial years that begin on or after October 1, 2012 or January 1, 2013, respectively. The Group has not adopted
these standards, interpretations and changes of standards and interpretations early:
•
IAS 19 – Employee benefits
the recording of actuarial gains and losses in other comprehensive income. In addition, the gains from plan
assets and the interest expense on the existing pension obligations expected to result from the revised IAS
19 are replaced by a standard net interest component. In the future, the past service costs will be recorded in
full in the period in which the corresponding plan changes. In the course of the revision of IAS 19, the
requirements regarding post-termination benefits were changed. The disclosure and the required
explanatory comments have been subject to an extension. The changes in IAS 19 shall be applied in
financial years beginning on or after January 1, 2013; earlier adoption is permitted. The revision of IAS 19
is primarily expected to affect the determination of the net interest expenses/income of the Group. In
addition, the first-time adoption of the revised standard will result in extended disclosures.
F-8
•
IFRS 10 – Consolidated financial statements
IFRS 10 replaces the provisions regarding consolidated financial statements in IAS 27 Consolidated and
separate financial statements and SIC 12 – Consolidation - special-purpose entities. The standard provides a
uniform definition for the term control for all companies thus also ensuring a uniform basis for the
determination of whether there is a parent-subsidiary relationship and of the consolidation of the company.
The standard contains comprehensive user guidelines for the determination of a control relationship.
According to the IASB, the provisions are mandatory to all financial years that begin on or after January 1,
2013 (first mandatory adoption in the EU: financial years that begin on or after January 1, 2014). Earlier
IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. The Group
is currently researching the potential impact on the presentation of its net worth, financial and earnings
position, as well as its cash flows.
•
IFRS 11 – Joint arrangements
The standard published by the IASB in May 2011 removes the current option to consolidate joint ventures
on a pro rata basis. The mandatory application of the equity method to joint ventures will be subject to the
provisions of IAS 28 Investments in associates and joint ventures in the future. According to the IASB, the
provisions are mandatory to all financial years that begin on or after January 1, 2013 (mandatory adoption
in the EU: financial years that begin on or after January 1, 2014). Earlier adoption is permitted; however, it
does not only require the disclosure of the early adoption but also that IFRS 10, IFRS 11, IFRS 12, IAS 27
(2011) and IAS 28 (2011) together are also adopted early. The Group is currently researching the potential
impact on its net worth, financial and earnings position, as well as its cash flows.
•
IFRS 12 – Disclosure of interests in other entities
Consolidated and separate financial statements, IAS 28 Investments in associates, IAS 31 Investments in
joint ventures and SIC-12 Consolidation – special-purpose entities. Hence, the standard governs the
disclosures of all types of investments in other entities, including joint arrangements, associates, structured
entities and units outside the balance sheet. According to the IASB, IFRS 12 is mandatory for all financial
years that begin on or after January 1, 2013 (first-time mandatory adoption in the EU: financial years
beginning on or after January 1, 2014); earlier adoption is permitted. The Group expects that the first-time
adoption will result in additional disclosures.
•
IFRS 10, IFRS 11 and IFRS 12 – Transition guidance amendments
In the course of the amendment of the transition provisions in IFRS 10, 11 and 12, exemptions are granted
by limiting the adjusted comparative figures to be disclosed to the closest comparative previous period
upon first-time adoption and eliminating the obligation to disclose comparative information regarding nonconsolidated structured entities when adopting IFRS 12 for the first time. According to the IASB, the
changes shall be applied to all financial years that begin on or after January 1, 2013 (first-time mandatory
adoption in the EU: financial years that begin on or after January 1, 2014).
•
IFRS 10, IFRS 12 and IAS 27 – Investment entities amendments
financial statements, but measure the investments held for investment at fair value. Unlike as proposed in
the Exposure Draft of 2001, the definition of an investment entity is not less restrictive. The changes shall
be applied to all financial years that begin on or after January 1, 2014. Earlier adoption is permitted. The
changes do not have any impact on the Group since the definition criteria for investment entities are not
met.
•
IAS 27 – Separate financial statements
only provisions regarding the recognition and disclosures of subsidiaries, joint ventures and associates that
are relevant to the separate financial statements compiled in accordance with the IFRS. According to the
IASB, the provisions are mandatory to all financial years that begin on or after January 1, 2013 (first-time
mandatory adoption in the EU: financial years that begin on or after January 1, 2014). Earlier adoption is
F-9
permitted; however, it does not only require the disclosure of the early adoption but also that IFRS 10,
IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. Since the revised IAS
27 now exclusively applies to separate financial statements, the changes will not affect the consolidated
financial statements.
•
IAS 28 – Investments in associates and joint ventures
expand the scope of the current standard to the recognition of joint ventures. According to the revised IAS
28, an entity must recognize an investment or part of an investment in an associate or a joint venture as held
for sale when and if the applicable criteria are met. The remaining portion of the investment in an associate
or joint venture that is not classified as held for sale must be recognized using the equity method until its
disposal. According to the IASB, the provisions are mandatory to all financial years that begin on or after
January 1, 2013 (first-time mandatory adoption in the EU: financial years that begin on or after January 1,
2014). Earlier adoption is permitted; however, it does not only require the disclosure of the early adoption
but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early.
The Group is currently researching the impact of the amendments to IAS 28.
•
IFRS 13 – Fair value measurement
IFRS 13 provides cross-standard uniform measurement guidelines for fair value measurement by defining
and specifying which methods may be used for the determination of the fair value. In addition, the
disclosures of assets and debts measured at fair value are expanded. IFRS 13 itself does not contain any
provisions as to when fair value measurement should be used. The standard shall be applied prospectively
to financial years beginning on or after January 1, 2013; earlier adoption is permitted. When adopting the
standard for the first time, no comparative figures are required. Currently, the Group expects that the
adoption of the new standard will result in additional disclosures.
•
IAS 12 – Deferred taxes: Recovery of underlying assets
deviate from the basic provision of IAS 12.51 – according to which the deferred taxes must be measured in
the amount of the expected tax consequence relating to the expected manner of recovery of the underlying
asset (or debt) – when measuring investment properties at fair value. In the future, deferred tax assets and
liabilities must be measured based on the tax consequences of a sale unless the accounting party provides
clear evidence that the carrying amount of the asset will be realized in full as a result of the use. This new
provision is primarily of significance in countries in which the use and the sale of such assets are taxes in a
different manner. The exemption provision also applies to investment properties recognized for the first
time in the course of a business acquisition when and if they shall also be measured at fair value in
subsequent recognition. According to the IASB, the change shall be applied to all financial years that begin
on or after January 1, 2012 (first-time mandatory adoption in the EU: financial years beginning on or after
January 1, 2013); earlier adoption is permitted. The Group is currently researching the corresponding
effects of the amendments on the presentation of the net worth, financial and earnings position, as well as
the cash flows.
•
IAS 32 – Offsetting financial assets and liabilities
In December 2011, the IASB published revised offset requirements. In order to meet the requirements for
offsetting in accordance with IAS 32, the currently legally enforceable right of set-off shall not be subject
to a future event and must apply both in the ordinary business transactions and in case of default and
insolvency of a party. Furthermore, the revised standard prescribes that a gross offset mechanism meets the
offsetting requirements under IAS 32 when and if there are no major credit and liquidity risks, receivables
and liabilities are processed in one and the same offsetting procedure and thus the offsetting eventually
equals netting. The changes shall be applied to all financial years that begin on or after January 1, 2014.
The Group is currently researching the potential impact on the presentation of its net worth, financial and
earnings position, as well as its cash flows.
•
IFRS 7 – Disclosures - Offsetting financial assets and liabilities
The IASB also published in December 2011 additional requirements for the disclosure of rights to offset. In
addition to more comprehensive disclosures regarding offsets actually made in accordance with IAS 32,
disclosure requirements are introduced for existing rights to offset depending on whether the offset in
F-10
accordance with IAS 32 is actually made. The new provisions shall be applied to all financial years that
begin on or after January 1, 2013. The Group is currently researching the potential impact on the
•
•
IFRS 1 – Government loans
The change affects the recognition of public loans when adopting the IFRS for the first time and the loans
are granted at an interest rate that is lower than the market interest rate. The change provides for another
exemption for the retrospective adoption of the IFRS. Accordingly, the same provisions apply as those that
applied when IAS 20 was introduced in 2008 for first-time adopters. The changes shall be applied for the
first time to all financial years that begin on or after January 1, 2013. The changes do not affect the Group's
net worth, financial and earnings position.
IFRS 1 – Severe hyperinflation and removal of fixed dates for first-time adopters
when presenting financial statements in accordance with IFRS when and if an entity was not able to meet
the IFRS standards for some time due to the fact that its functional currency was subject to severe
hyperinflation. As a result of the change which aims at removing the fixed dates for the transition to IFRS
the original references regarding the fixed transition date "January 1, 2004" are replaced by the wording
"date of transition to IFRS". Therefore, first-time IFRS adopters do not have to recognize and thus restate
any derecognition of transactions that occurred prior to the date of transition to IFRS.
According to the IASB, the changes shall be applied to all financial years that begin on or after July 1,
2011; earlier adoption is permitted (first-time mandatory adoption in the EU: financial years that begin on
or after January 1, 2013). The changes do not affect the Group's net worth, financial and earnings position.
•
On May 17, 2012, the IASB adopted the annual improvements of the IFRS. Among others, the following
standards were revised:
•
IFRS 1 – First-time adoption of the IFRS Admissibility of repeated application of IFRS 1: Disclosure of
comparative information of previous year with respect to borrowing costs relating to qualifying assets
whose capitalization date is prior to the date of the transition to IFRS
•
IAS 1 – Presentation of the financial statements: Clarification regarding the requirement to disclose
•
IAS 16 – Property, plant and equipment: Clarification of the classification of maintenance and servicing
equipment
•
IAS 32 – Financial instruments: Disclosure: Recognition of income tax effects of distributions to the owner
of an equity instrument must be in compliance with IAS 12 Income taxes
•
IAS 34 – Interim reports: Consistency of the disclosures with regard to the total segment assets in order to
improve consistency with IFRS 8 Business segments
•
IFRIC 20 – Removal costs in the production phase of a cast on day mine
phase in a cast on day mine. The interpretation applies for the first time to all financial years that begin on
or after January 1, 2013. The first-time adoption does not have any impact on the Group.
F-11
2.1.2.3 Published standards, interpretations and modifications not yet adopted by the EU
•
IFRS 9 – Financial instruments
liabilities. IFRS reflects the first stage of the IASB project for the replacement of IAS 39 and discusses the
classification and measurement of financial assets and financial liabilities in accordance with IAS 39. In the
next project stage, the IASB discussed the recognition of hedges. In further project stages, the IASB will
discuss the impairment of financial assets. The adoption of the amendments resulting from the first stage of
IFRS 9 will affect the classification and measurement of the Group's financial assets; however, the Group
does not expect any impact on the classification and measurement of its financial liabilities. The
innovations regarding accounting of hedges follow the approach to integrate them further into the operating
risk management. It is the announced goal of the IASB to adopt all three drafts in IFRS 9 after final
discussion and thus replace IAS 39. In a meeting in 2013, the IASB resolved to once again eliminate the
currently applicable first-time adoption date January 1, 2015 and decided that a new date would depend in
particular on the outcome of the stages regarding classification and measurement and those regarding
impairment losses. Upon first-time adoption of IFRS 9, additional disclosures in accordance with IFRS 7 –
Financial instruments: Disclosures are required. The Group is currently researching the potential impact on
the presentation of its net worth, financial and earnings position, as well as its cash flows.
•
IFRIC 21 – Disclosures
In May 2013, the IASB published IFRIC 31 – Levies, an interpretation of IAS 37. The interpretation
governs the recognition of levies that are not deemed income taxes as defined in IAS 12 and states in
particular when an obligation for the payment of such levies would have to be recorded as a liability. The
interpretation shall be applied in financial years beginning on or after January 1, 2014; earlier adoption is
permitted. At this time, the Group does not expect that the interpretation, if adopted by the EU as is, will
have a major impact on the representations in the financial statements.
•
IAS 39 – Disclosures for non-financial assets
In May 2013, the IASB implemented revised disclosure requirements in IAS 39 by publishing
"Recoverable Amount for Disclosures for Non-Financial Assets (Amendments to IAS 36)". Disclosures of
the recoverable amount that was determined based on the fair value less the costs to sell shall only be made
for non-financial instruments for which impairment losses were recorded or reversed in the current
reporting period. In addition, the disclosures were revised that must be made if the recoverable amount was
determined based on the fair value less costs to sell. The changes shall be applied retrospectively all
financial years that begin on or after January 1, 2014. An early adoption is permitted when and if IFRS 13
has been adopted. At this time, the Group does not expect that the changes, if adopted by the EU as is, will
have a major impact on the representations in the financial statements.
•
IAS 39 – Novation of derivatives and continuation of hedge accounting
In June 2013, the IASB published revisions of IAS 39 Financial instruments. Due to this change, a
contractual party of a hedge instrument changes over to a central counter-party due to legal or regulatory
requirements does not trigger a discontinuation of the hedge if certain requirements are met. The changes
shall be applied retrospectively in financial years beginning on or after January 1, 2014; earlier adoption is
permitted. At this time, the Group does not expect that the changes, if adopted by the EU as is, will have a
major impact on the representations in the financial statements.
These standards and interpretations will be applied subject to the adoption by the EU at the date at which
their application is mandatory for the first time.
2.2
Consolidation standards
a)
Subsidiaries
Subsidiaries are all companies, including special-purpose entities whose financial and business policies the
Group controls. This is usually accompanied by voting rights of more than 50 %. When assessing whether the Group
controls the policies the existence and impact of potential voting rights that are actually exercisable or convertible
are taken into account. Subsidiaries are consolidated as of the date at which the Group assumes control (full
consolidation). They are deconsolidated at the date at which control expires.
F-12
Acquired subsidiaries are recognized using the purchase method. The cost of the acquisition equal the fair
value of the transferred assets, the issued equity instruments and the debt incurred or transferred at the transaction
date. Furthermore, they include the fair value of any recognized assets or debts resulting from a conditional
agreement on the consideration. Acquisition-related costs are expenses when occurred. Assets, debt and contingent
liabilities identifiable in the course of a business combination are measured at fair value applicable at the acquisition
date when initially consolidating the items.
The Group decides on a case-to-case basis for each business acquisition whether the minority interests in the
acquired company are recorded at fair value or based on the pro rata share in the net assets of the acquired company.
Goodwill is the value resulting from the excess of the acquisition cost, the amount of the minority interests in
the acquired company and the fair value of any previously held equity interests at the acquisition date over the
Group's share in the net assets measured at fair value. If the cost are lower than the net assets of the acquired
subsidiary measured at fair value, the difference is directly recorded in profit or loss (cf. chapter 2.10).
Intercompany transactions, balances and unrealized gains and losses from intercompany transactions are
eliminated. The recognition and measurement methods of subsidiaries were changed as needed in order to ensure
group-wide standardized recognition.
b)
Transactions with minority interests without the loss of control (minority shareholders)
Transactions with minority interests are treated like transactions with equity owners of the Group. Any
difference between the consideration paid and the corresponding portion of the carrying amount of the net assets of
the subsidiary resulting from the acquisition of a minority interest is recorded in equity. Gains and losses resulting
from the sale of minority interests are also recorded in equity.
c)
Sale of subsidiaries
If the Group either loses control or the major influence on a company, the remaining portion is revalued at
fair value and the resulting difference is recorded in profit or loss. The fair value is the fair value of the initially
recognized associated company, joint venture or a financial asset. Furthermore, all amounts related to this company
that are reported in other comprehensive income are recognized in such manner as would be required if the parent
would have directly sold the related assets and debts. This means that any gain or loss previously recorded in other
comprehensive income is reclassified from equity to profit or loss.
If the percentage share in an associated company reduces, but the company remains an associated company,
only the pro rata amount of the gains and losses previously recorded in other comprehensive income is reclassified.
d)
Joint ventures
The Group's investments in a joint venture are consolidated on a pro rata basis. The Group aggregates on an
item-by-item basis the pro rata share in the income and expenses, assets and debts, as well as the cash flows with
similar items of the Group. Gains and losses from the sale of the Group's assets in a joint venture are recorded in the
amount of the portion attributable to its shareholders. The Group's shares in the gains and losses of the joint venture
resulting from the acquisition of assets by the Group are not recorded by the Group until they are resold to a
company that is not part of the Group. Losses from such transactions, however, are realized immediately when and
if the loss is deemed a clear indication that the net realizable value of current assets is reduced or impaired.
F-13
Consolidated group
The Group consists of the following entities:
Balance on
Merger
Addition
Disposals
1/1/2012
Mondi Consumer
Packaging
International AG
Fully consolidated
subsidiaries
Thereof
Germany
Thereof other
countries
Pro rata
consolidated
companies
Thereof
Germany
Thereof other
countries
Balance on
9/30/2012/
10/1/2012
Merger
Additions
Disposals
Balance on
9/30/2013
1
0
0
0
1
0
0
0
1
19
11
-1
-1
1
0
-2
-1
17
9
-3
-3
0
0
-2
-2
12
4
8
0
1
-1
8
0
0
0
8
1
0
0
0
0
0
-1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
-1
0
0
0
0
0
The following changes in the group of consolidated companies occurred in the reporting period:
The disposal of German companies relate to Mondi Lohne GmbH (formerly NORDENA Deutschland Lohne
GmbH) that was sold on February 28, 2013 and Mondi IT Services Barleben GmbH (formerly Nordenia IT Services
GmbH) that was sold on September 30, 2013.
The mergers relate to Mondi Consumer Packaging Development GmbH that was merged onto Mondi
Consumer Packaging International AG on June 24, 2013 effectively January 1, 2013; and Nordenia International
Beteiligungs GmbH & Co. KG that merged onto Mondi Consumer Packaging International AG as a result of the
withdrawal of its general partner on August 1, 2013, and the merger of the former general partner Nordenia
International Geschaeftsfuehrungs GmbH (formerly Nordenia International Beteiligung GmbH) onto Mondi
Consumer Packaging International AG on September 1, 2013.
The following changes in the group of consolidated companies occurred in the previous year:
Nordenia (China) Film Technology Co., Ltd., Taicang/China – which was consolidated for the first time as at
January 1, 2012 – was recorded as an addition.
The disposal due to merger relates to Empac Beteiligungs GmbH which merged onto Mondi Gronau GmbH
(formerly NORDENIA Deutschland Gronau GmbH) on July 12, 2012 effective January 1, 2012.
The disposal of German companies relates to NORDENIA International Beteiligungs GmbH (formerly
NORDENIA Deutschland Emsdetten GmbH) which was sold on September 26, 2012.
The disposal of foreign companies relates to Nordenia Polska Starogard GD sp. z o. o. which was sold on
March 30, 2012.
The disposal of foreign pro rata consolidated companies relates to Dalian DANOR Printing Packaging
Company which was sold on September 26, 2012 as a joint venture of NORDENIA International Beteiligungs
GmbH (formerly NORDENIA Deutschland Emsdetten GmbH).
F-14
2.3
Segment reporting
Segment reporting is in such manner that it corresponds to the internal reporting to the main decision-maker.
The main decision-maker is responsible for making decisions regarding the allocation of resources to the business
segments and the verification of their efficiency. The main decision-maker is deemed to be the joint board of
directors of Mondi Consumer Packaging International AG.
2.4
Foreign currency translation
a)
Functional currency and reporting currency
The items contained in the financial statements of each company of the Group are measured based on the
currency of the primary economic environment in which the entity operates (functional currency). The consolidated
financial statements are compiled in EUR which is both the functional and the reporting currency of Mondi CP.
Unless otherwise indicated, all amounts are stated in thousands of EUR (kEUR).
b)
Transactions and balances
Foreign currency transactions are translated into the functional currency at the exchange rates applicable at
the transaction date or the measurement date in case of revaluation. Gains and losses resulting from the performance
of such transactions and the translation of foreign currency monetary assets and debts at the rate prevailing at the
balance sheet date are recorded in profit or loss unless they are recorded as qualified cash flow hedges in equity.
Foreign currency gains and losses resulting from the translation of cash and cash equivalents, as well as
financial debt are, to the extent that they are attributable to the operating business, recorded in the item exchange
differences or, to the extent that they result from financial transactions, in the items financial expenses or income.
Changes in the fair value of monetary securities that are denominated in a foreign currency and are classified
as held for sale shall be divided into translation differences from the changes in amortized cost that are recorded
through profit or loss and other changes in the carrying amount that are recorded outside profit or loss.
Exchange differences of non-monetary items whose fair value changes and the change is recorded in profit or
loss (e.g. equity instruments measured at fair value through profit or loss) shall be disclosed as a portion of the profit
or loss from the measurement at fair value through profit or loss. On the other hand, exchange differences of nonmonetary items whose fair value changes and the change is recorded in equity (e.g. equity instruments classified as
held for sale) are recorded in the exchange clearing item in equity.
c)
Group companies
The earnings/losses and balance sheet items of all group companies that use a functional currency other than
the EUR are translated into EUR:
- Assets and liabilities are translated at the rate prevailing at the balance sheet date;
- income and expenses are translated at the weighted annual average rate for each statement of profit and
loss;
- All exchange differences resulting from such translation are recorded in a separate item in equity (exchange
clearing item).
In the course of consolidation, exchange differences resulting from the translation of net investments in
economically independent subdivisions and from financial debts are recorded in equity outside profit or loss. If a
foreign business operation is sold, exchange differences thus far recorded in equity outside profit or loss are
recorded as part of the gain or loss from the disposal through profit or loss.
Goodwill and adjustments of the fair value resulting from the acquisition of a foreign company are classified
as assets and debts of the foreign company and translated at the rate prevailing at the balance sheet date.
F-15
The exchange rates of the major currencies within the Group developed as follows:
Exchange rate 1 EUR =
China
Malaysia
Poland
Russia
Hungary
U.S.A.
2.5
Middle rate
at the balance sheet date
9/30/2013
9/30/2012
8.2645
8.1261
4.4103
3.9596
4.2288
4.1038
43.8240
40.1400
298.15
284.89
1.3505
1.2930
ISO
code
CNY
MYR
PLN
RUB
HUF
USD
Revenue recognition
The revenues comprise the fair value of the consideration received or to be received for the sale of goods in
the course of ordinary business operations. Revenues are reported net of sales tax, less returned sales, discounts and
price deductions, as well as after the elimination of intercompany sales.
The Group produces and sells flexible packaging, technical films and product components. Revenue from
goods sold is recorded when the goods have been delivered, the title of ownership has been transferred, and the
following criteria have been satisfied at that point in time:
-
the Group has transferred to the buyer the major risks and rewards from the title of ownership in the
products;
the Group retains neither managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Customized construction contracts are recognized using the percentage-of-completion method when and if
the criteria of IAS 11 are satisfied. Thus, the incurred order costs plus a margin based on the percentage of
completion are recorded as receivables from construction contracts and as revenues. The percentage of completion is
usually determined as the ratio of the incurred expenses and the expected total expenditure. If a period of more than
one year is required to complete a construction contract, the order costs also include the attributable borrowing
costs. If the result of a construction contract cannot be estimated reliably, revenues are only recorded in the amount
of the incurred costs. Any expected losses from the contract shall be accounted for by recorded impairment losses or
provisions; they are determined taking into account any discernible risks. Downpayments or payments of interim
invoices are directly offset against the receivables from construction contracts in the maximum amount of the
services already rendered. Any cash received in access of these amounts are disclosed in downpayments received on
orders.
2.6
Cost of sales
The cost of sales comprise cost of sold products and services, as well as costs of funds of sold merchandise.
In addition to direct cost of material and labor, they also include indirect overhead costs, including depreciation on
production plants and certain items of property, plant and equipment, as well as impairment of inventories.
2.7
Expenses for research and development
Research costs and non-recognizable development costs are directly recorded in profit or loss when they
occur. When and if the criteria of IAS 38 are satisfied, development costs are capitalized. In this respect, see chapter
2.10b) and d).
F-16
2.8
Financial result
The financial result comprises interest expenses from liabilities that is determined using the effective interest
method, dividends, exchange gains and losses from financial transactions, interest income from receivables, and
gains and losses from financial instruments that are directly recorded in profit or loss. In addition, the interest
expenses from pension provisions and the measurement costs from embedded derivatives in the interest expense are
reported.
The interest income is directly recorded in profit using the effective interest method. Dividends are directly
recorded in profit, if a resolution regarding the distribution was passed. The interest portions of finance leases are
determined using the effective interest method.
2.9
Current and deferred taxes
The tax expenditure of the period comprises current and deferred assets. Taxes are recorded in profit and loss
unless they relate to items that are directly recorded in equity or the other comprehensive income. In that case, the
taxes are also recorded in equity or in other comprehensive income.
The current tax expenditure is determined in accordance with the tax laws of those countries in which the
subsidiaries and associated companies operate and generate taxable income and that are applicable at the balance
sheet date or will become effective shortly thereafter. The management reviews tax declarations on a regular basis,
in particular with regard to aspects that are subject to discretionary decisions and, if appropriate, records provisions
based on the amounts that are expected to be paid to the fiscal authorities.
Deferred taxes are recorded on all temporary differences between the tax base of the assets/ liabilities and
their carrying amounts in the financial statements in accordance with IFRS (so-called liability method). However, if,
in the course of a transaction that is not deemed a business combination, deferred taxes result from initial
recognition of an asset or a liability that does neither have an impact on the profits or loss for accounting purposes
nor on the profits or losses for tax purposes at the date of the transaction, no deferred taxes are recorded initially or
subsequently. Deferred taxes are measured using the tax rates (and tax laws) applicable at the balance sheet date or
that have basically been adopted by the legislators and that are expected to be applicable at the date at which the
deferred tax asset is realized or the deferred tax liability is settled.
Deferred tax assets are only recorded to the extent that it is probable that taxable income will be available
against which the temporary difference can be used.
Deferred tax liabilities that result from temporary differences relating to investments in subsidiaries and
associated companies are recorded unless the date of the reversal of the temporary differences can be determined by
the Group and it is probable that the temporary differences will not be reversed in the foreseeable future due to this
effect.
Deferred tax assets are offset against deferred tax liabilities if the company is legally entitled to offset any
actual claim for tax refund with the actual tax liability and they relate to taxes on income and earnings that are
imposed by the same fiscal authority or different tax subjects that intend to achieve a settlement on net basis.
For further detail, see the explanatory comments regarding the establishment of a fiscal unit with Mondi
Holding Deutschland GmbH for income tax purposes in chapter 13.
2.10
Intangible assets
All intangible assets, except for goodwill, have a finite useful life.
a) Goodwill
Goodwill is the excess of the acquisition costs in a business acquisition over the fair value of the Group's
share in the net assets of the acquired company on the acquisition date. Goodwill resulting from a business
acquisition is recorded in intangible assets. The recognized goodwill is subject to an annual impairment test and is
measured at its historical cost less accumulated impairment losses. Impairment losses may be reversed. Gains and
F-17
losses from the sale of a company include the carrying amount of the goodwill attributable to the transferred
company.
Goodwill is allocated to cash-generating units for impairment test purposes. Goodwill is allocated to those
cash-generating units or groups of cash-generating units of the identified business segments that are expected to
benefit from the combination in the course of which the goodwill occurred.
b) Software and software development costs
Acquired software licenses are recognized at the cost that are incurred upon acquisition and for the
preparation of the software for its intended use. Those costs are written off over an estimated useful life of 3-5 years
using the straight-line method.
Software development costs that are directly attributable to the development and check of identifiable
individual software products within the control of the Group are recorded as intangible assets when and if the
following criteria are satisfied:
•
•
•
•
•
The completion of the software product is technically feasible.
The management intends to complete the software product and use it or sell it.
The Group is able to use or sell the software product.
There is evidence that the software product will most likely generate future economic benefits.
Adequate technical, financial and other resources are available in order to complete the development and
be able to use or sell the software product.
• The expenses attributable to the software product during the development process can be measured
reliably.
The costs directly attributable to the software product comprise personnel expenses relating to the employees
involved in the development, as well as an appropriate portion of the respective overhead costs.
Development costs that do not meet these criteria are expensed in the period in which they occur.
Development costs already expensed are not recognized in the following period.
Capitalized development costs for software are written off over their estimated useful life (no more than 5
years) using the straight-line method.
c) Concessions and industrial property rights
Concessions and industrial property rights are recorded at their historical cost. Concessions and industrial
property rights acquired in the course of a business acquisition are measured at the fair value applicable at the
acquisition date. Concessions and industrial property rights have definite useful lives (according to the respective
agreement) and are measured at their cost less accumulated depreciation. Depreciation is recorded over the
estimated useful life of the respective agreement of 3-5 years using the straight-line method.
d) Development costs
Development costs that are directly attributable to the development and check of identifiable individual
products and processes within the control of the Group are recorded as intangible assets when and if the following
criteria are satisfied:
•
•
•
•
•
The completion of the products and processes is technically feasible.
The management intends to complete the products and processes and use them or sell them.
The Group is able to use or sell the products and processes.
There is evidence that the products and processes will most likely generate future economic benefits.
Adequate technical, financial and other resources are available in order to complete the development and
be able to use or sell the products and processes.
• The expenses attributable to the products and processes during the development process can be measured
reliably.
The costs directly attributable to the product and processes comprise personnel expenses relating to the
employees involved in the development, as well as an appropriate portion of the respective overhead costs.
F-18
Capitalized development costs are written off over their estimated useful life (no more than 5 years) using the
straight-line method.
2.11
Property, plant and equipment is measured at cost less depreciation based on the estimated useful life, and
impairment losses. The cost of internally generated assets comprise all costs directly attributable to the production
process and production-related overhead costs. This includes production-related depreciation, prorated productionrelated administrative costs, as well as prorated social security costs.
The cost for the generation of qualified assets, i.e. assets which require a significant period of time (at least 6
months) to be ready for the intended purpose, comprise capitalized borrowing costs to the extent that they meet the
criteria of IAS 23.
Government grants for the acquisition or production of property, plant and equipment do not affect the cost
but are reported separately and reversed through profit and loss over the estimated useful life of the subsidized item
of property, plant and equipment.
Depreciation on property, plant and equipment is recorded using the straight-line method and reported in the
function costs. The useful life and depreciation methods are reviewed annually and adjusted to the current situation
and circumstances.
The measurement is based on the following useful lives:
Buildings
Technical equipment, plant and machinery
Other equipment, fixtures and fittings, and office equipment
10-50 years
2-10 years
3-10 years
Items of property, plant and equipment are written off on a prorated basis in the year in which they are
acquired.
If special events or market trends indicate that an asset is impaired, an impairment test is performed to assess
the carrying amount of the asset (including capitalized development costs).
In this impairment test the carrying amount of the asset and the recoverable value are compared and the
higher of the fair value less costs to sell and the value in use. When determining the recoverable amount based on
the value in use, future cash flows are discounted at a risk-based interest rate. When determining the future cash
flows, the current and future earnings as well as business segment-related, technological, economic and general
trends are taken into account. If the net carrying amount of assets exceeds the net realizable amount, impairment
losses are recorded.
If an asset is no longer impaired, the impairment losses are reversed to the maximum amount of amortized
cost.
For details regarding the accounting of assets from leases please see the explanatory comments on the
accounting of lease agreements (chapter 27).
2.12
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial instruments are in particular cash and cash equivalents, trade
receivable and other loans and receivables granted, financial investments held to maturity and original and
derivative financial assets held for trading. Financial obligations usually result in a repayment claim in cash or in
another financial asset. This includes in particular borrowings and other certified liabilities, trade payable, accounts
due to banks, liabilities from finance lease agreements, borrower’s note loans, and derivative financial liabilities.
F-19
Financial assets are recognized as soon as the Group becomes party to an agreement regarding a financial
instrument. In case of standard market acquisitions and disposals, however, the performance date is relevant for
initial recognition and disposal in the accounts.
Classification
Financial assets are basically divided into the following categories: assets measured at fair value through
profit or loss, loans and receivables, held-to-maturity investments and assets available for sale. The classification
depends on the respective purpose for which the financial assets were acquired. The management decides on the
classification of the financial assets upon initial recognition.
(a)
Assets measured at fair value through profit or loss
Assets measured at fair value through profit or loss are financial assets held for trading or designated as
assets to be measured at fair value through profit or loss.
An asset is classified as held for trading when and if it:
• was acquired primarily with the intention to sell it in the short run, or,
• in initial recognition, is part of a portfolio of clearly identifiable financial instruments that are jointly
controlled by the Group and there are indications in the recent past that profits will be generated in the
short run, or
• is a derivative that is not classified as a hedge instrument, is effective as such and does not constitute a
financial guarantee.
A financial asset that is deemed not held for trading may be designated in the initial recognition as measured
at fair value through profit or loss when and if
• such designation eliminates or drastically reduces measurement and recognition inconsistencies that would
otherwise occur, or
• financial asset is part of the group of financial assets and/or financial liabilities that, the development of the
values of which, according to a documented risk management or investment strategy, is determined based
on the fair value, and information regarding this portfolio is provided internally on this basis, or
• if it is governed by an agreement that contains one or more embedded derivatives and if, according to IAS
39 – Financial instruments: Recognition and Measurement, the entire structured product (asset or
liability) can be measured at fair value through profit or loss.
(b)
Loans and receivables
Loans and receivables do not constitute derivative financial assets with fixed or non-determinable payments
which do not constitute quotes market prices. They are deemed current assets unless they fall within more than 12
months after the balance sheet date. The latter are reported as non-current assets. The loans and receivables of the
Group are disclosed under "Trade receivables and other receivables" and "Cash and cash equivalents" in the balance
sheet.
(c)
Held-to-maturity financial investments
Held-to-maturity financial investments are non-derivative financial assets with fixed or quantifiable
payments and a fixed term and the Group is able and intends to hold the assets to maturity.
(d)
Assets available for sale
Financial assets available for sale are non-derivative financial assets that were attributed neither to that
category nor to any of the other categories described. They are deemed non-current assets when and if the
management does not intend to sell them within twelve months after the balance sheet date and the asset does not
fall due within this period of time.
Recognition and measurement
Financial assets that are not classified as "at fair value through profit or loss" are initially recognized at their
fair value plus transaction costs. Financial assets that are attributed to this category are initially recorded at their fair
value; the corresponding transaction costs are expensed. Financial assets are derecognized when and if the rights for
payment for the financial assets has expired or was transferred and the Group has transferred basically all risks and
rewards inherent in the title of ownership. Financial assets available for sale and assets measured at fair value
F-20
through profit or loss are measured at fair value when subsequently recognized. Loans and receivables and held-tomaturity financial investments are recorded at amortized cost using the effective interest method.
Gains or losses from financial assets measured at fair value through profit or loss are disclosed as financial
income or financial expenses, respectively, in the statement of profit and loss of the period in which they occurred.
as available for sale shall be divided into translation differences from the changes in amortized cost that are recorded
through profit or loss and other changes in the carrying amount that are recorded outside profit or loss. The
translation differences from monetary securities are recorded through profit or loss; the translation differences from
non-monetary securities are recorded in other comprehensive income. Changes in the fair value of both monetary
and non-monetary securities classified as available for sale are recorded in other comprehensive income.
If securities classified as available for sale are sold or impaired, the accumulated changes in the fair value
recorded previously in equity are recorded as financial income or expenses through profit or loss.
Interest income resulting from the measurement of securities available for sale using the effective interest
method is disclosed as financial income in the statement of profit and loss.
Offsetting financial instruments
Financial assets and liabilities are not offset and recorded in the net amount in the balance sheet unless there
is a legal claim for them and the Group intends to settle them on a net basis or settle the respective liability upon
utilization of the corresponding asset.
Impairment of financial instruments
Assets measured at amortized cost
At each balance sheet date, the Group performs an impairment test to assess whether there are indications of
an impairment of a financial asset or a group of financial assets. A financial asset or a group of financial assets is
only impaired when and if due to one or several events that occurred after initial recognition of the asset ("incident")
there is an objective indication that the asset is impaired and this incident (or incidents) have a reliably determinable
impact on the expected future cash flows from the financial asset or the group of financial assets.
The criteria based on which the Group assesses whether there is an objective indication of impairment
include in particular:
a)
• significant financial difficulty of the issuer or borrower;
• contractual violation such as failure to perform or non-payment of interests or capital amounts;
• the Group grants this debtor – for economic or legal reasons due to the financial difficulties of this debtor
– a concession that the issuer would otherwise not consider;
• it is highly likely that the borrower will declare insolvency or is subject to other financial reorganization;
• the disappearance of an active market for that financial asset because of financial difficulties; or
• apparent facts that indicate that the estimated future cash flows have drastically decreased since the
acquisition of the financial asset despite the fact that the decrease cannot yet be identified for the
individual financial asset; this includes:
(i) unfavorable changes in the solvency of the borrower in the portfolio;
(ii) domestic or regional economic circumstances that correspond to the default with respect to the assets
in the portfolio.
The Group first assesses whether there is an objective indication for the impairment.
The loss is determined as the difference between the carrying amount of the asset and the present value of the
expected future cash flows (except for future, not yet incurred credit losses), discounted at the original effective
interest rate of the financial asset. The carrying amount of the asset is reduced and the loss is recorded through profit
and loss. If a loan, a receivable or a financial investment to be held to maturity are subject to a variable interest rate,
the discount rate used for the measurement of the impairment loss equals the current effective interest rate as set
forth in the agreement.
If the amount of the impairment loss reduces in a following period and this reduction results from
F-21
circumstances that occurred after initial recognition of the impairment loss (e.g. better rating), the impairment loss is
reversed and the respective amount is recorded in profit or loss.
b)
Assets classified as available for sale
an impairment of a financial asset or a group of financial assets. In case of debt instruments, the criteria under (a) are
used as a basis. In case of equity instruments classified as available for sale a major or consistent decrease of the fair
value below the amortized cost of these equity instruments can be deemed an indication for the impairment of the
equity instrument. If such indication exists with respect to assets available for sale, the accumulated loss – being the
difference between the cost and the current fair value, less impairment losses recorded prior in respect of the
financial asset in question – is reversed in equity and recorded in profit or loss. Impairment losses of equity
instruments once recorded in profit or loss are not reversed through profit or loss. If, in a following period, the fair
value of a debt instrument that was classified as available for sale increases and this increase results from
circumstances that occurred after initial recognition of the impairment losses the impairment losses are reversed and
the respective amount is recorded in profit and loss.
2.13
Financial assets
The financial instruments available for sale are investments in non-consolidated affiliated companies and
investments that do not exceed a 20 % share. They are recognized at cost due to the fact that the fair values are not
available and other admissible measurement methods do not provide reliable results either. The respective financial
assets are recorded as financial assets held for sale.
2.14
Trade receivables
Trade receivables are due and payable amounts for goods or services sold in the ordinary business operation.
Receivables that fall due within one year are classified as current assets, while receivables that fall due within more
than one year are classified as non-current receivables.
Trade receivables are initially recorded at fair value and fall under the category "Loans and receivables" (cf.
chapter 29.1). The trade receivables are subsequently recorded at amortized cost using the effective interest method
and less impairment losses.
2.15
Cash and cash equivalents comprise cash, demand deposits, other current highly liquid financial assets with
an original term of no more than three months and current accounts. In the balance sheet, utilized current accounts
are disclosed as "liabilities due to banks" under current financial debt. The cash and cash equivalents are capitalized
and measured at their nominal value.
F-22
2.16
Derivative financial instruments
Derivative financial instruments are measured upon initial recognition at their fair value that is attributed to
them at the closing date of the agreement. They are recorded as "financial assets measured at fair value through
profit or loss" (cf. chapter 29.1). Subsequently, they are also recognized at the fair value applicable at the respective
balance sheet date. The gain or loss resulting from the measurement is recorded directly in profit and loss unless the
derivative instrument is designated and effectively used as a hedge instrument in the hedge accounting. The date of
the recording of the measurement results directly in profit and loss basically depends on the type of hedge.
2.17
Inventories
Inventories are recognized at the lower of cost and net realizable value. The net realizable value is the
estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. In
addition to the direct costs, the cost of production include production-related portions of necessary material and
production overhead costs as well as depreciation of items of property, plant and equipment and intangible assets
attributed to the production. Administrative costs and social security expenses are taken into account to the extent
that they are attributable to the production (production-related full cost approach). Measurement is at average costs.
2.18
Pension provisions
The actuarial measurement of pension provisions is based on the projected unit credit method described in
IAS 19 – Employee benefits.
In this method not only known pensions and accrued commitments are accounted for but also estimated
future increases in salaries and pensions. The computation of the material pension obligations is based on actuarial
expert reports compiled by an independent expert, taking into account biometric calculation bases. Actuarial gains
and losses are directly offset against equity (OCI method).
The interest rate used to determine the present value of the obligations was assessed based on the yields of
high quality fixed-interest corporate bonds of the respective currency region.
The expenditure resulting from the measurement of the pension provisions, including the corresponding
interest portion, are attributed to the costs in the individual functions. The discounting of the pension obligations and
the estimated income from plan assets are reported in the financial result.
2.19
Other accrued liabilities
According to IAS 37 – Provisions, contingent liabilities and contingent assets, other provisions are
recognized to the extent that the company has a present obligation as a result of a past event and it is probable that
an outflow of resources embodying economic benefits will occur and that a reliable estimate can be made of the
amount of the obligation.
Provisions shall be recognized for foreseeable risks and contingent liabilities in the amount of the
expenditure expected to be required to settle the obligation and shall not be offset against reimbursements. The
expenditure required to settle the obligation also includes increases in costs to be accounted for at the balance sheet
date. Provisions shall be discounted, if the effect is material.
Provisions are measured at the present value of the expected expenditure, with a pre-tax interest rate being
used as a basis that takes into account the current market expectations with regard to the interest effect and the
obligations resulting from specific risks. Increases in provisions resulting from mere discounting are expensed as
interest expenses.
Provisions for warranties shall be recognized taking into account the current or estimated future damage.
Warranty provisions are recognized based on experience in respect to similar products; they are determined as a
percentage of the sold products. Provisions for losses from orders are recognized in full in the reporting period in
which the estimated total costs resulting from the respective agreement exceed the expected revenues.
F-23
Demolition obligations are recorded as provisions at the time at which they occur at the discounted value of
the obligation and, at the same time, capitalized in the corresponding amount.
2.20
Financial debt and liabilities
The financial debt and liabilities are measured at fair value upon initial recognition; as for financial debt, they
are measured less transaction costs. All financial debt and liabilities are attributed to "Financial debt - measured at
amortized cost".
In the following periods, all financial debt and liabilities are measured at amortized cost. Differences between
the payment amount less transaction costs and the repayment amount are recorded in profit and loss using the
effective interest method.
For this purpose, the trade payables are payment obligations for goods and services acquired in the ordinary
business operations. The liabilities are classified as current debt when and if the payment obligation is due within
one year. Otherwise, they are recognized as non-current debt.
2.21
Leases
Leases are classified as finance leases if as a result of the terms of the lease basically all risks and rewards
attributed to the ownership are transferred to the lessee. All other leases are classified as operating leases. The
companies of the Group enter into lease agreements as the lessee.
Assets held under finance leases are recorded at the lower of fair value of the asset or the present value of the
respective minimum lease payments as assets of the Group at the beginning of the lease. The corresponding liability
due to lessor shall be recognized in the balance sheet as another liability from finance lease. The lease payments are
attributed on a prorated basis to the financial expenses and the decrease of the lease obligation resulting in a constant
interest rate on the remaining balance of the obligation for each reporting period. The financial expenditure is
recorded directly in profit or loss unless it can be directly attributed to a qualified asset. In those cases, the cost are
recognized in accordance with the general group guidelines for credit costs and IAS 23. The property, plant and
equipment held under a finance lease is written off over the shorter of the two following periods: the estimated
useful life of the asset or the term of the lease.
Lease payments resulting from operate leases are recognized directly in profit or loss over the term of the
lease using the straight-line method.
2.22
Stock options
Stock options involving compensation in the form of equity instruments are measured at fair value at the date
at which they are granted. This value is recorded as personnel expenses over the qualifying period. Terms and
conditions for the exercising of the options that are independent from the market are taken into account in the
assumptions regarding the number of options which are expected to be exercised. The obligations from share-based
remuneration transactions with cash compensation (virtual stock options) are recorded as provisions and measured at
the fair value at the balance sheet date, with the expenses being recorded over the qualifying period. The fair value
for stock options and virtual stock options is determined based on DCF measurement taking into account current
findings. For further details, see the comments in chapter 34 Stock Option Program.
2.23
Critical estimates for the recognition, measurement, assumptions in the measurement, and changes in
estimates, as well as discretionary management decisions
2.23.1 Critical estimates for the recognition, measurement, assumptions in the measurement
When compiling consolidated financial statements in accordance with IFRS, some balance sheet items
require discretionary decisions and estimates that affect the recognition and measurement in the balance sheet and
income statement. The actual amounts may differ from those estimates.
F-24
The estimates and assumptions that involve a significant risk of a major adjustment of the carrying amounts
of assets and debt within the next financial year are discussed below.
- Determination of necessity and measurement of impairment losses on intangible assets, items of property,
plant and equipment, as well as inventories (impairment test) and financial assets,
- Recognition and measurement of pension obligations, anniversary obligations and warranty obligations.
Property, plant and equipment as well as intangible assets are measured based on estimates of the fair value
at the acquisition date, if those items were acquired in the course of a business combination. Furthermore, the useful
life of the assets has to be estimated. The fair value of assets and liabilities as well as the useful life of assets are
determined based on the management's estimates.
estimates are made as well that relate – among others – to the cause, date and amount of impairment. Impairment
results from a number of factors. On principle, changes in current competition, expectations regarding the growth in
the packaging industry, increases in capital costs, changes in the availability of financial resources, technological
obsolescence, discontinuation of services, current replacement costs, purchase prices paid in similar transactions,
and other changes affecting the circumstances that indicate that impairment occurred are accounted for. The net
realizable amount and fair values are usually determined using the discounted cash flow method (DCF method)
which also involves appropriate assumptions of market participants. Identifying aspects that indicate that there is
impairment, the estimation of future cash flows and the determination of the fair values of assets (or disposal
groups) require significant estimates that the management has to make.
The Group performs an impairment test of the goodwill annually using the recognition and measurement
method outlined in chapter 2.10 a. The realizable amount of the cash-generating unit was determined based on the
computations of the value in use. These computations must be based on assumptions. For details see the explanatory
comments in chapter 16.
The management records impairment losses on doubtful accounts in order to account for expected losses that
result from the customer’s insolvency. The bases used by the management in order to assess the appropriateness of
respect to the derecognition of receivables, the customer’s credit standing, and changes in terms of payment. In the
event the customer’s financial situation worsens, the scope of the actual amount to be derecognized may exceed the
expected derecognition.
recognized as defined benefit plans. Expenses for old-age pensions are determined using actuarial methods that are
based on assumptions regarding the interest rate, life expectancy, and - to a limited extent - the expected earnings
from plan assets. The estimates of the expected earnings from plan assets do only affect the expenses for old-age
pensions to a limited extent. They are in part based on actuarial evaluations that are based on assumptions such as
the interest rates used to calculate the amount of our pension obligation. The assumptions regarding the expected
earnings from plan assets are made on a standard basis of long-term historical yields in the past, the asset strategy, as
well as estimates of non-current income from assets. In the event other modifications of the assumptions regarding
interest rates or expected earnings from plan benefits are required, such modification may have material impact on
the amount of expenses for old-age pensions in the future.
government proceedings and other contingent liabilities, respectively, require major estimates by Mondi CP. Hence,
the assessment of whether it is probable that pending proceedings will be successful or a liability will be incurred
and the amount of the respective obligation are based on the assessment of the respective situation and
probable that a loss will be incurred, and this loss can be estimated reliably. Due to the uncertainties related to such
assessment, the actual losses may deviate from the original estimates and thus from the amount accrued. In addition,
major estimates have to be made when determining the provisions for taxes, environmental liabilities and legal risks.
Those estimates may change due to new information. Mondi CP obtains new information primarily from services of
F-25
internal experts or external experts such as actuaries or legal consultants. Changes in the estimates of those
impending losses from pending transactions may have a significant impact on the future earnings position.
Since 2001 trade receivables of subsidiaries are sold and assigned to Kaiserplatz Purchase No. 5 Ltd., Jersey,
(KP5) in ABS transactions (asset-backed securities). When assessing the disposal of the receivables, the Group must
assess whether the acquiring entity (KP5) should be included in the consolidated group of the Group and, then,
whether or to which extent the disposal is deemed a disposal of receivables defined by IAS 39. In this respect, the
duty to consolidate is assessed based on the criteria set forth in SIC-12 "Consolidation of special-purpose entities".
The bases used by the management for the assessment of the criteria of SIC-12 and IAS 39 are based on the
contractual agreements with KP5, the customers' credit standing, the estimate of future cash flows from the
purchased receivables (date and amount), as well as the projection of the future interest and exchange rate trend on
the financial markets. Thus, the determination of the criteria of SIC-12 and IAS 39 require the management's
estimates and forecasts. Due to the transfer by Mondi-Group, the ABS program ceased within the reporting period.
Income taxes have to be estimated for each tax jurisdiction in which the Group operates. The expected actual
income tax for each taxable unit has to be calculated and temporary differences resulting from different treatment of
certain balance sheet items in the consolidated IFRS financial statements and the tax base have to be evaluated. If
temporary differences occur, those differences basically result in the recognition of deferred tax assets and liabilities
in the consolidated financial statements. The management has to make estimates when calculating actual and
deferred taxes. Deferred tax assets are recognized to the extent that it is probable that the assets will be utilized. The
utilization of deferred tax assets depends on the possibility to generate sufficient taxable income in the respective tax
category and tax jurisdiction; legal restrictions regarding maximum loss carryforward periods have to be taken into
account. When assessing whether a future utilization of deferred tax assets is probable, various factors have to be
taken into account, e.g. earnings position in the past, operational plans, loss carryforward periods, tax plan
strategies. If the actual results deviate from those estimates or do the estimates have to be adjusted in the future,
adverse effects on the net worth, financial and earnings position may occur. In the event the impairment test of
deferred tax assets results in a change in the assessment, impairment losses shall be recognized on the recognized
deferred tax assets in profit and loss.
outflows of economic benefits and on experience and the circumstances known at the balance sheet date. The actual
outflow of economic benefits may there deviate from the other provisions.
For details regarding the carrying amounts of the respective assets and liabilities see the respective chapters
in the notes and the balance sheet.
2.23.2 Changes in estimates
The consolidated companies generate revenues on the market that are subject to warranty. The warranty
periods for flexible packaging are governed by the general terms and conditions of the respective company and
usually cover a period of 6 months. In the financial year, the actual warranty cases were analyzed; this analysis
resulted in an adjustment of the estimated percentage for warranty provisions. This change of the percentage was a
change in accordance with IAS 8. The change in the percentage resulted in an operating income/loss effect of EUR
503k in the financial year.
The estimated percentage was changed again with regard to the measurement of the termination option for
the industrial bond. In this respect, see chapter 29.1.
2.23.3 Discretionary management decisions
When using the recognition and measurement methods, discretionary management decisions are required,
among others, in the following cases:
• Review whether major risks and rewards from the beneficial ownership were transferred to the lessee in
the course of lease transactions; and
• when measuring the provisions for pensions and similar obligations, actuarial gains and losses may be
accounted for in various manners.
F-26
The notes contain additional disclosures regarding the decision the Group made with regard to the respective
cases.
F-27
Notes on Consolidated Income Statement
3
Revenues
The revenues primarily include revenues from the sale of products less trade discounts and rebates, as well as
incidental revenues from the sale of energy and waste materials, and commission from the redebiting of setup costs,
engravings and clichees.
10/1/20121/1-9/30/
9/30/2013
2012
kEUR
kEUR
Revenues from
- Films
408,474
311,904
- Product components
297,916
232,026
- Bags, FIBCs
130,833
99,144
- Merchandise
14,033
11,529
Incidental revenues
27,670
24,192
Sales deductions
-12,513
-12,355
866,413
666,441
4
Cost of sales
The cost of sales comprise cost of sold products, as well as costs of funds of sold merchandise. In addition to
directly attributable costs such as material, labor and energy costs, they also include general overhead costs, incl.
depreciation.
The cost of sales also include additions to warranty provisions and provisions for losses from orders.
The cost of sales are broken down as follows:
10/1/20129/30/2013
kEUR
Material expenses
527,828
Personnel expenses
93,912
26,617
Operating expenses
26,054
Energy costs
19,419
Maintenance expenses
15,012
Consumables
11,208
Production-related administrative costs
2,974
Warranty expenses
-5
Others
-6,446
716,573
The other cost of sales primarily comprise changes in inventories and capitalized own work.
5
1/1-9/30/
2012
kEUR
407,451
73,167
19,705
18,713
15,539
11,168
7,901
3,321
912
-685
557,191
Selling costs
10/1/20129/30/2013
kEUR
18,107
13,117
10,255
1,053
830
6,231
49,593
Freight costs and commissions
Personnel expenses
Operating expenses
Purchased services
Other selling costs
F-28
1/1-9/30/
2012
kEUR
14,553
9,352
4,776
568
547
4,427
34,223
6
General administrative expenses
10/1/20121/1-9/30/
9/30/2013
2012
kEUR
kEUR
Personnel expenses
22,121
9,889
Audit and consulting services
4,096
2,516
IT expenses
4,393
2,364
1,570
1,332
Other general administrative expenses
5,888
-323
38,068
15,778
The reversals of provisions for the stock option program affected the personnel expenses in the amount of
EUR 5,364k.
Other general administrative costs increased in particular due to license fees payable to Mondi AG.
7
Research cost
This item does not only include research costs but also non-capitalizable development costs as per IAS 38.
10/1/20129/30/2013
kEUR
8
1/1-9/30/
2012
kEUR
5,814
4,190
Exchange gains and losses
This item comprises exchange gains and losses resulting from the Company's activities that are not
attributable to the financing activities.
The exchange gains and losses from operating activities explicitly include exchange gains and losses from
trade receivables, trade payables, intercompany cash accounts, foreign currency hedges relating to the operating
activities, as well as from foreign currency wire transfers that result from other receivables/liabilities.
10/1/20129/30/2013
kEUR
-243
Operating exchange gains/losses
9
1/1-9/30/
2012
kEUR
-361
Intercompany income
Income from the reversal of impairment losses
Credited bonuses
Personnel related income
Income from reversal of provisions and accrued liabilities, as well
as deferrals
ABS income
Compensations
Reimbursement from insurance companies for property, plant and
equipment
Income from redebiting
Insurance reimbursements
Income relating to a different accounting period
Proceeds from sale of non-current assets
F-29
10/1/20129/30/2013
kEUR
9,301
595
393
299
1/1-9/30/
2012
kEUR
0
426
412
216
218
209
202
0
26
379
195
188
125
103
101
0
211
153
234
98
Income from subsidies
Gains from the sale of subsidiaries
77
49
0
1,582
802
245
12,809
4,031
Intercompany income includes in particular income from transfer of sales fees in the division Consumer
Goods Packaging.
10
10/1/20129/30/2013
kEUR
1/1-9/30/
2012
kEUR
Impairment losses on property, plant and equipment, and
intangible assets
Losses from the sale of subsidiaries
909
3,438
770
1,959
676
Additions to allowances for doubtful accounts
799
Expenses relating to disposal of non-current assets
262
296
Expenses relating to a different accounting period
194
29
Other taxes
26
191
69
11
2,907
6,722
The impairment losses on property, plant and equipment, and intangible assets relate to Mondi Ipoh Sdn.
Bhd., Ipoh/Malaysia. In the comparative period, these impairment losses were recorded on ZAO Mondi Slavnika,
Pereslavl/Russia. For further details see chapter 16 and 17.
11
Financial income
10/1/20121/1-9/30/
9/30/2013
2012
kEUR
kEUR
Gains from measurement of options
44,476
5,167
Exchange gains from financial transactions
2,088
6,542
Other interest income
504
764
Income from borrowings
470
1,073
47,537
13,547
The gains from measurement of options relate to the termination option regarding the bond. In addition to the
gains, expenses in the amount of EUR 1,945k incurred which are included in the financial expenses (chapter 12).
For further details see chapter 29.1.
12
Financial expenses
Interest expenses
Expenses resulting from measurement of options
Exchange losses from financial transactions
Expenses resulting from measurement of finance swaps
F-30
10/1/20129/30/2013
kEUR
38,350
1,945
1,611
1/1-9/30/
2012
kEUR
27,110
0
7,199
1,439
43,345
2,902
37,212
13 Taxes on income and earnings
The income tax claims disclosed in the balance sheet are as follows:
10/1/20129/30/2013
kEUR
14,739
Current income tax claims
9/30/2012
kEUR
380
The Group's income taxes are as follows:
10/1/20129/30/2013
kEUR
4,376
1/1-9/30/
2012
kEUR
11,214
2,288
-4,919
1,745
In the financial year, the German total income tax rate is 30.0 % (prev. year: 30.0 %).
485
3,599
15,298
Current tax assets and liabilities
Tax assets and liabilities relating to a different accounting
period
Deferred tax assets and liabilities
At September 30, 2012, Mondi Consumer Packaging International AG was the controlling company of major
German subsidiaries for income tax purposes. Upon conclusion of a profit transfer agreement with its parent Mondi
Holding Deutschland GmbH, the Company became a controlled company itself effective October 1, 2012. Now
therefore and due to the fact that a tax redebiting agreement was not entered into with the controlling company, neither
current tax expenses nor deferred tax assets or liabilities are disclosed in the consolidated financial statements as at
September 30, 2013 for the German companies that are part of the fiscal unit.
The deferred tax assets and liabilities recognized for the respective companies as at September 30, 2012 were
derecognized in the amount of EUR 6,169k as deferred tax income through profit and loss.
The income tax rates for foreign companies range between 10.0 % and 37.0 % (prev. year: 10.0 % and 37.0 %).
There have been no changes in the tax rates.
The following chart shows the reconciliation of the tax expenses anticipated in the respective year and the
disclosed tax expenses. In order to determine the anticipated tax expenses the respective applicable German total tax rate
is multiplied by the earnings before taxes.
10/1/20121/1-9/30/
9/30/2013
2012
kEUR
kEUR
Earnings before taxes on continued operations
70,216
28,343
Thereof fiscal unit of Mondi Holding Deutschland GmbH for
income tax purposes
-59,089
0
11,127
28,343
Income tax rate (incl. trade tax) of
30.00 %
30.00 %
Anticipated income tax expenditure
3,338
8,503
Tax difference - Foreign countries
-217
166
0
1
-482
-616
Increases in taxes resulting from non-deductible expenses
274
595
Increases in taxes resulting from non-deductible taxes on the sale of
consolidated units
171
361
Tax increases due to impairment losses on goodwill resulting from
capital consolidation
273
0
Effects of deviating rates in Germany
Tax reductions resulting from tax-free income
F-31
0
841
2,166
794
-6,169
0
2,205
186
4,411
242
1,745
15.68 %
15,298
53.97 %
Increases in taxes resulting from additions for trade tax purposes
Tax expenses and income not relating to the accounting period
Derecognition of deferred taxes through profit and loss due to
establishment of fiscal unit with
Mondi Holding Deutschland GmbH for income tax purposes
Adjustment of deferred tax assets from loss and interest
carryforwards, as well as temporary differences
Other differences
Disclosed income tax expenses
Effective tax burden
The decrease in the effective tax expenses from 53.97 % to 15.68 % is primarily the result of the
derecognition of deferred taxes through profit and loss due to the establishment of the fiscal unit for income tax
purposes in the amount of EUR 6,169k; on the other hand, the tax expenses and income not relating to the
accounting period increased from EUR 794k by EUR 1,372k to EUR 2,166k.
The taxes recorded in other comprehensive income in the amount
(prev. year: EUR 1,599k) relate in full (prev. year: EUR 1,708k) actuarial gains and losses.
14
of
EUR
-1,763k
Other notes on consolidated income statement
10/1/20129/30/2013
kEUR
Expenditure on raw materials, consumables and supplies,
finished goods and work in process, as well as merchandise
Expenses for purchased services
Material expenses
Wages and salaries
Social security contributions
Expenses for retirement benefits
Personnel expenses
1/1-9/30/
2012
kEUR
524,162
4,727
528,889
404,571
3,438
408,008
10/1/20129/30/2013
kEUR
110,079
21,864
1,210
133,153
1/1-9/30/
2012
kEUR
78,115
16,476
782
95,374
Amortization of intangible assets
and property, plant and equipment
29,535
22,008
Recognition of impairment losses
909
3,438
30,444
25,446
For details on the classification by asset categories see the Schedule of Non-Current Assets in chapter 16 and
17.
15
Minority interest in current earnings/losses
Minority interests of the company
Mondi Lohne GmbH
Mondi Consumer Packaging Ibérica S.A.
%
10.0 *)
2.2 **)
Minority interest in current earnings/losses
*)
**)
10/1/20129/30/2013
kEUR
1/1-9/30/
2012
kEUR
-44
-3
-22
-44
-25
The company was sold on February 28, 2013.
This item relates to the interest in the earnings/losses of the minority shareholders of Mondi Consumer Packaging Ibérica
S.A. (formerly Nordenia Ibérica Barcelona S.A.) incurred as a result of the merger of Polireal S.L. onto Mondi Consumer
Packaging Ibérica S.A.
F-32
Explanatory comments on the consolidated balance sheet
16
Intangible assets
ntangible assets are goodwill, development costs (internally generated assets), patents, software, licenses and
similar rights.
The impairment test was performed with regard to the goodwill based on the multi-year plan of Mondi Ipoh
Sdn. Bhd., Ipoh/Malaysia, using the DCF method. While the growth rates during the development of the cash flows
is covered by the computation, the company's future cash flows were measured at weighted average cost of capital
(WACC) that also covers the country-specific risks.
The item development costs comprise acquired and internally generated development costs that meet the
criteria of IAS 38. Depreciation on intangible assets is included in the items of the corresponding function costs in
the statement of profit and loss. For details regarding the total depreciation see chapter 14.
Impairment test of goodwill
The goodwill is the difference not attributable to the acquired built-in gains from the acquisition of 50 % of
the shares in Mondi Ipoh Sdn. Bhd., Ipoh/Malaysia from the former joint venture partner. The above-described
company was identified as the smallest cash-generating unit for the purpose of the impairment test. The goodwill is
not depreciated on schedule and is subject to an annual impairment test.
The realizable amount of the cash-generating unit was determined based on the computations of the value in
use. Measurement was performed by discounting the projected cash flows of the company. The detailed planning
period covers the years 2013 - 2016 and is based on the assumptions regarding future selling prices or sales
quantities, respectively, and the costs, taking into account the underlying economic conditions. A perpetuity with a
general growth rate of 1.5 % (prev. year: 1.5 %) was determined for the period after this four-year detailed planning
period. The weighted average cost of capital (WACC) after taxes on which the computation was based totaled
8.82 % (prev. year: 6.77 %). The thus determined value in use was lower than the carrying amount as at September
30, 2013 and resulted in impairment losses of EUR 909k. Based on the recorded impairment loss for the cashgenerating unit, the realizable value after impairment losses equals the carrying amount. Another unfavorable
development of one of the major assumptions would result in additional impairment losses. For this purpose, a
sensitivity analysis was performed with regard to the capitalization interest rate and the free cash flow. Thus, an
increase of the capitalization interest rate to 8.95 % would result in additional impairment losses of EUR 405k; an
additional reduction of the free cash flow by 5 % would result in additional impairment losses of
EUR 1,102k.
The impairment losses were disclosed in the income statement under Other operating expenses as a crosssegment record (presented in the segment reporting in reconciliation) analogously to the recording of the goodwill
itself.
The intangible assets of the Group developed
October 1, 2012 to September 30, 2013 and the previous period:
Balance on Jan. 1, 2012
Changes in currencies
Changes in the group of consolidated
companies
Additions
Disposals
Reclassifications
Balance on Sept. 30, 2012 / Oct. 1,
2012
as
follows
in
the
financial
Concessions,
industrial
Goodwill Software
property Development Downrights
costs
payments
kEUR
kEUR
kEUR
kEUR
kEUR
7,081
18,008
3,040
714
413
21
83
12
0
1
year
from
Total
kEUR
29,256
117
0
0
10
0
-4
169
401
232
-1,015
6
0
0
0
56
0
0
0
264
0
-202
-1,019
495
411
30
7,112
18,889
2,043
770
476
29,290
F-33
companies
Additions
Disposals
Reclassifications
Balance on Sept. 30, 2012
Accumulated depreciation
companies
Additions
Disposals
Reclassifications
2012
companies
Additions
Impairment losses
Disposals
Reclassifications
Net carrying amount as at Sept. 30,
2013
2012
0
-96
-5
0
-32
-133
0
0
0
0
7,112
-12,128
270
239
513
7,687
0
17
0
0
2,055
0
7
0
75
852
0
350
0
-537
257
-12,128
644
239
51
17,963
699
21
16,679
80
1,989
6
494
0
0
0
19,861
107
0
0
10
-3
568
401
-527
405
0
0
87
0
0
0
0
-530
1,060
411
0
0
0
0
0
0
730
0
17,725
-90
1,873
-3
581
0
0
0
20,909
-93
0
0
909
0
0
1,639
-11,777
720
0
351
0
6,929
0
149
0
0
0
2,019
0
163
0
0
0
744
0
0
0
0
0
0
-11,777
1,032
909
351
0
11,331
5,473
758
36
108
257
6,632
6,382
1,164
170
189
476
8,381
F-34
17
The Group's property, plant and equipment developed as follows in the financial year from October 1, 2012
to September 30, 2013 and the previous period:
Other
DownTechnical
equipment,
payments
Land,
equipment fixtures+fittings,
and
leasehold
and
and office
assets under
rights
Buildings machinery
equipment
construction
Total
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
6,961
119,018
415,843
61,151
15,500 618,472
122
1,190
5,073
713
542
7,640
Changes in the group of
0
-2,035
-11,166
-684
16 -13,869
Additions
717
654
9,154
2,143
10,571
23,239
Disposals
0
-126
-3,915
-1,810
-1,674
-7,525
Reclassifications
-27
1,400
11,024
778
-13,205
-30
Balance on Sept. 30, 2012 / Oct.
1, 2012
7,773
120,101
426,013
62,291
11,750 627,928
-136
-2,410
-8,723
-759
-581 -12,609
0
-1,202
-1,886
-2,021
0
-5,109
Additions
0
665
13,386
3,192
25,813
43,056
Disposals
0
-105
-6,816
-2,894
0
-9,815
Reclassifications
0
778
7,046
1,780
-9,655
-51
7,637
117,827
429,020
61,589
27,327 643,400
Additions
Disposals
Reclassifications
Impairment losses
Balance on Sept. 30, 2012 / Oct.
1, 2012
Additions
Disposals
Reclassifications
Impairment losses
108
4
38,153
248
317,876
3,898
45,006
436
0
0
401,143
4,586
0
6
0
0
0
-834
2,318
-38
0
3,438
-11,056
15,170
-3,717
0
0
-665
3,453
-1,801
0
0
0
0
0
0
0
-12,555
20,947
-5,556
0
3,438
118
-13
43,286
-963
322,171
-6,779
46,429
-514
0
0
412,003
-8,269
0
18
0
0
0
123
-280
2,907
-28
0
0
44,922
-1,305
20,822
-6,626
0
0
328,283
-1,709
4,756
-2,815
0
0
46,147
0
0
0
0
0
0
-3,294
28,503
-9,469
0
0
419,474
Net carrying amount as at
Sept. 30, 2013
7,514
72,905
100,737
15,442
27,327 223,926
Sept. 30, 2012
7,655
76,815
103,842
15,862
11,750 215,925
The impairment loss in the previous year relates to buildings of ZAO Mondi Slavnika, Pereslavl/Russia, for
which the value was decreased to the realizable amount after an impairment test. The realizable amount corresponds
to the fair value less the costs to sell and was derived from the active market based on a valuation report. Due to the
earnings position of ZAO Mondi Slavnika and the corporate planning for the following years, the Group expects that
the buildings might not be used to the intended extent. The impairment loss was recorded in the other operating
expenses. The assets are attributed to the CGP segment.
F-35
Impairment losses were neither reversed in the reporting period nor the previous financial years. Borrowing
costs were capitalized to the extent that the criteria set forth in IAS 23 were satisfied.
The downpayments and assets under construction were attributed to the following asset categories upon
completion:
9/30/2013
9/30/2012
kEUR
kEUR
15,847
6,971
Buildings
9,641
2,726
Other fixtures and fittings, and office equipment
1,839
2,053
27,327
11,750
Property, plant and equipment in the amount of EUR 5,297k (prev. year: EUR 6,549k) were assigned as
collateral. The carrying amount of the assets capitalized under finance leases totals EUR 4,373k (prev. year: EUR
9,122k).
18
Financial assets
18.1
Shares and investments
The shares and investments developed as follows in the financial year from October 1, 2012 to September 30,
2013 and the previous year:
Shares
Investments
Total
kEUR
kEUR
kEUR
1,256
1,531
2,787
0
0
0
Changes in the group of consolidated companies
-1,250
0
-1,250
Additions
0
0
0
Disposals
0
0
0
Balance on Sept. 30, 2012 / Oct. 1, 2012
6
1,531
1,537
0
0
0
-6
0
0
Additions
0
0
0
Disposals
0
0
0
0
1,531
1,537
Impairment losses
Additions
Disposals
Balance on Sept. 30, 2012 / Oct. 1, 2012
Additions
Disposals
Net carrying amount as at Sept. 30, 2013
6
0
0
0
6
0
-6
0
0
0
1,301
0
0
0
1,301
0
0
0
0
1,301
1,307
0
0
0
1,307
0
0
0
0
1,307
0
0
230
230
230
230
The change in the consolidated group in the reporting period relates to shares of Mondi IT Services Barleben
GmbH in OOO NORDENIA Samara, Samara/Russia. Mondi IT Services Barleben GmbH was deconsolidated at
September 30, 2013 due to the disposal.
The change in the consolidated group in the previous year relates to shares in Mondi (China) Film
Technology Co., Ltd., (formerly NORDENIA (China) film Technology Co., Ltd.), Taicang/China that was
F-36
incorporated in 2011 but not yet consolidated in 2011 for materiality reasons. The company was initially
consolidated on January 1, 2012.
18.2
The other financial assets developed as follows in the financial year from October 1, 2012 to September 30,
Industrial
Termination
Lessee
Other
revenue
option
loans
Financial
bonds
instruments
Total
kEUR
Additions
kEUR
kEUR
kEUR
kEUR
13,145
2
0
13,483
0
0
4,128
0
0
437
1
23
31,193
3
23
0
0
-219
-3
-222
13,147
-560
0
13,483
0
0
3,909
0
0
458
-5
69
30,997
-565
69
-12,587
0
-876
-66
-13,529
0
13,483
3,033
456
16,972
Additions
0
0
0
11,221
0
0
0
0
0
385
0
0
11,606
0
0
Disposals
0
0
0
0
0
Reversal of impairment losses
2012
Additions
0
-5,167
0
0
-5,167
0
0
0
6,054
0
0
0
0
0
385
0
0
6,439
0
0
Disposals
0
0
0
0
0
0
-42,531
0
0
0
0
-36,477
0
385
6,439
Disposals
2012
Additions
Disposals
Impairment losses
2013
0
49,960
3,033
71
10,533
2012
13,147
7,429
3,909
73
24,558
The termination option is the option to repay the bond early which was agreed upon when the bond was granted.
The option is deemed a derivative financial instrument as defined in IAS 39 and is therefore measured at fair value
through profit and loss. Please refer to our comments in chapter 29.1.
For a description of the bond and the agreed-upon retention prices see chapter 26.2.
For details regarding the industrial revenue bonds, please see chapter 27.
F-37
The lessee loans relate to two loans granted to TGL Warehousing GmbH & Co. KG Gronau/Westf. Those loans
are used as a collateral for the lender's claims for payment under the corresponding lease agreements.
The loan dated November 22, 2004 in the amount of EUR 1,533k (prev. year: EUR 2,409k) was granted for the
purpose of a multi-purpose hall. It has a term of 13.5 years commencing on the commencement date of the lease period
and bears interest of 3.95 % p.a. Monthly repayment has been EUR 73k since July 2012. The multi-purpose hall is
accounted for in the property, plant and equipment of Mondi Gronau GmbH, Gronau/Westf.
The loan dated March 19, 2008 in the amount of EUR 1,500k was granted for the purpose of a block storage
unit. It has a term of 10 years commencing on the commencement date of the lease period and bears interest of 4.95 %
p.a. The lease agreement regarding the block storage unit was entered into as an operate lease.
Just as in the previous year, the other financial instruments do not comprise any financial instruments classified
as available for sale.
19
Deferred taxes are determined based on the tax rates applicable in the respective countries. Changes in tax laws
passed at the balance sheet date have already been accounted for. As in the previous period, the applied income tax
rates of the individual countries range between 10.0 % and 37.0 % (prev. year: between 10.0 % and 37.0 %).
Deferred tax assets were offset against deferred tax liabilities if they relate to taxes on income and earnings that
are imposed by the same fiscal authority and if the company is entitled to offset any actual claim for tax refund with the
actual tax liability.
The following deferred tax assets and liabilities relate to differences in the recognition and measurement of
individual balance sheet items and tax losses carried forward:
9/30/2013
9/30/2012
Asset
Liability
Asset
Liability
kEUR
kEUR
kEUR
kEUR
Intangible assets
172
-89
285
-68
532
-10,287
934
-19,696
Financial assets
1
0
130
-2,239
Inventories
1,621
-26
1,499
-291
Receivables and other assets
395
-74
1,626
-1,536
Pension provisions
90
0
3,682
0
Trade payables
28
-341
130
0
Other liabilities and provisions
1,752
-411
5,801
-2
Tax losses, interest carried forward and
tax credits
6,350
0
5,718
0
./. Impairment losses
-3,425
0
-2,664
0
7,516
-11,228
17,141
-23,832
./. Offsets
-4,563
4,563
-6,426
6,426
Balance sheet disclosure
2,953
6,665
10,715
17,406
Deferred tax liability (net)
-3,712
-6,691
The net amounts of the deferred taxes changed as follows:
Deferred tax liabilities (net)
9/30/2013
kEUR
6,691
177
-4,919
1,763
3,712
Balance, beginning of the period
Exchange loss / gain
Expenditure in the statement of profit and loss
Income taxes recorded in other comprehensive income
Balance, end of the period
F-38
9/30/2012
kEUR
4,821
-133
3,599
-1,596
6,691
The deferred tax assets and liabilities developed as follows:
Changes in the balance
Deferred tax assets
9/30/2013
kEUR
17,406
-289
-12,315
1,863
6,665
9/30/2012
kEUR
17,461
52
834
-941
17,406
9/30/2013
kEUR
-10,715
466
7,396
1,763
-1,863
-2,953
9/30/2012
kEUR
-12,640
-185
2,765
-1,596
941
-10,715
As at September 30, 2013, the Group had income tax loss carryforwards in the amount of EUR 19,114 k (prev.
year: EUR 13,688k), trade tax loss carryforwards in the amount of EUR 0k (prev. year: EUR 714k), interest
carryforwards in the amount of EUR 0k (prev. year: EUR 0k), as well as tax refunds in the amount of EUR 7,843k
(prev. year: EUR 9,365k). EUR 19,114k (prev. year: EUR 12,958k) of the income tax loss carryforwards relate to
foreign companies and are, in part, limited in their utilization.
The amounts comprise corporate income tax loss carryforwards in the amount of EUR 13,867k (prev. year:
EUR 9,877k) for which no deferred taxes were recorded in the balance sheet due to the fact that at present it is not
sufficiently probable that the deferred tax assets can be realized.
The existing corporate income tax loss carryforwards can be used as follows:
Expiring within
Expiring within
Unlimited
5 years
15 years
utilization
Total
kEUR
kEUR
kEUR
kEUR
9/30/2013
2,568
16,546
0
19,114
9/30/2012
0
12,579
1,109
13,688
The tax refunds relate to tax credits of Mondi Ipoh Sdn. Bhd., Ipoh / Malaysia. This amount's deductibility is
not limited.
The deferred taxes relating to losses carried forward include the amount of EUR 641k (prev. year: EUR 1,238k)
relating to companies that accrued losses in the current financial year. The amount was recognized, since a positive
business trend of the respective companies is expected.
Allowances on deferred tax assets in the amount of EUR 3,425k (prev. year: EUR 2,644k) include tax loss
carryforwards in the amount of EUR 2,943k (prev. year: EUR 1,976k), since the use of the respective loss
carryforwards is not probable. The loss carryforwards on which the allowances are based may be used within 15 years.
The Group does not account for any deferred tax liabilities relating to retained profits of the subsidiaries to the
extent that these profits are likely to be regarded as permanently invested.
The temporary differences relating to shares in subsidiaries total EUR 42,838k. No deferred tax liabilities were
recorded for the deferred tax assets relating thereto in the amount of EUR 620k since neither a sale nor a distribution is
planned. As a result of the establishment of a fiscal unit with Mondi Holding Deutschland GmbH for income tax
purposes, the Group will basically no longer incur any tax expenses from such temporary differences.
F-39
20
The other non-current assets break down as follows:
Retention of collateral
Financial assets
9/30/2013
kEUR
79
79
9/30/2012
kEUR
14
14
0
0
79
244
244
258
Other non-financial assets
Non-financial assets
21
Inventories
Raw materials, consumables and supplies
Work in process and services in process
Finished goods and merchandise
Downpayments
Inventories (gross)
- thereof without impairment
- thereof with impairment
Impairment losses
9/30/2013
kEUR
30,632
23,649
60,268
5
114,554
9/30/2012
kEUR
31,904
23,830
54,176
3,229
113,139
9/30/2013
kEUR
127,335
109,490
17,846
-12,781
114,554
9/30/2012
kEUR
124,463
105,284
19,180
-11,325
113,139
Impairment losses on inventories were increased in the amount of EUR 1,457k (prev. year: decrease by EUR
67k). The impairment loss was recorded in the cost of sales (material expenses) in profit and loss. Changes in the
impairment losses result from additions, utilization and disposals, the currency translation, as well as changes in the
consolidated group.
As in the previous period, no inventories were assigned as collateral for liabilities at balance sheet date.
22
Trade receivables
9/30/2013
kEUR
132,131
Trade receivables
9/30/2012
kEUR
94,151
The receivables are broken down by due date and maturity at the balance sheet as follows:
thereof at
Carrying balance sheet
Not impaired at balance sheet date and overdue within the respective
amount
date neither
timeframe
trade
impaired
> 30 days > 60 days > 90 days > 120 days
receivables nor overdue < 30 days < 60 days < 90 days < 120 days < 360 days > 360 days
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
9/30/2013
132,131
117,264
10,791
1,817
621
279
115
75
9/30/2012
94,151
78,977
12,147
1,331
148
162
116
10
In respect to the trade receivable that are neither impaired nor overdue, there are no indications at the balance
sheet date that the debtors might not meet their payment obligations.
F-40
The maximum credit risks are reflected in the carrying amount of the respective financial instrument. The
carrying amounts mainly correspond to the fair values. In order to avoid any risk of loss commercial credit
insurances were agreed upon. At the balance sheet date, trade receivables in the amount of EUR 85,500k (prev. year:
EUR 5,458k) were insured. EUR 8,684k of said amount (prev. year: EUR 870k) relate to overdue accounts. The
increase in secured trade receivables resulted from commercial credit sale insurance policies newly obtained during
the reporting period.
Development of impairment losses on trade receivables:
Balance on
Exchange
Change
1/1/ or 10/1
differences
in the
Addition
consolidated
group
kEUR
kEUR
kEUR
kEUR
2012
2,199
-85
-191
615
2013
1,764
-39
-513
659
Utilization
Reversal
Balance
on 9/30
kEUR
346
333
kEUR
428
393
kEUR
1,764
1,145
Since 2001, trade receivables of subsidiaries were sold and assigned to Kaiserplatz Purchase No. 5 Ltd.,
Jersey, in ABS transactions (asset-backed securities). The contract revised at the end of 2006 had a term expiring in
2013. According to the changed financing strategy of the Mondi Group, the contract was terminated in the reporting
period.
The agreement set forth a maximum of accumulated purchases of receivables of EUR 70m and USD 10m
and, in addition, governed the purchase of receivables at a price of about 90.5 % of the nominal value of the
receivables. The ABS transaction resulted in an increase in the Group's liquidity and balance sheet disclosures.
There was a decrease in trade receivable, on the one hand, and a corresponding decrease in bank liabilities, on the
other hand. At September 30, 2013, receivables in the amount of EUR 0k (prev. year: EUR 52,691k) had been sold
and assigned to Kaiserplatz Purchase No. 5 Ltd., Jersey.
When determining the value of the trade receivables not sold, each change in the credit standing between the
date at which the credit was granted and the balance sheet date is accounted for. The additions to and reversals of
impairment losses are recorded in other operating expenses in profit and loss (cf. chapter 10).
The loss of receivables risks and risks regarding any late payments that were retained in part resulted in a
continuing involvement as defined in IAS 39.20c (ii) in the previous year. The scope of the continuing involvement
was determined based on the extent to which the company was still subject to the risk of changes in the value of the
transferred asset and totaled EUR 1,317k in the previous year. When recognizing the associated liability, the Group
also took into account the fair value of the first loss guaranty related to the risk of the loss of the receivables in the
amount of EUR 263k in the previous year. Therefore, the associated liability totaled EUR 1,581k.
23
Receivables due from affiliated companies and related parties
Receivables from the sale of Nordenia International Beteiligungsgesellschaft mbH
Suppliers' bonuses and creditors with debit balances
Advance payments
Receivables from construction contract
Receivables from exchange futures (FAHfT)
Receivables due from insurances
Interests receivable
HR-related receivables
Deposit
Receivables from the ABS program
Financial assets
F-41
9/30/2013
kEUR
74,515
8,750
7,385
761
313
151
99
79
65
40
0
186
92,343
9/30/2012
kEUR
314
8,750
8,723
595
0
15
173
1,140
92
334
6,523
233
26,893
9/30/2013
kEUR
8,686
1,168
1,058
240
11,152
103,495
Value added tax receivables
Receivables from other taxes
Accrued income
9/30/2012
kEUR
4,504
500
1,476
143
6,622
33,515
The increase in accounts due from affiliated companies results from the integration of the NORDENIA Group
into the Mondi Group and the increase in the transactions with affiliated companies that are not consolidated in these
financial statements of the Mondi Group (cf. chapter 37.2).
As in the previous period, there were no material other financial assets that were overdue at the balance sheet
date.
The maximum credit loss risk is reflected in the carrying amounts. The carrying amounts mainly correspond to
the fair values.
Development of impairment losses on accounts due from affiliates:
Balance on
Exchange
Change
Appre1/1/or 1/10/
differences
in the
ciation
consolidated
group
kEUR
kEUR
kEUR
kEUR
2012
1,069
0
-176
0
2013
893
0
0
200
Balance
on 9/30/
kEUR
893
693
When determining the value of the other current assets, each change in the credit standing between the date at
which the credit is granted and the balance sheet date is accounted for. There is no significant focus in the attribution of
the credit risk. Thus, the management is of the opinion that no other risk prevention measures beyond the impairment
losses already recorded are necessary. The additions and reversals of impairment losses are recorded in profit or loss.
At the balance sheet, there was a construction contract that had not yet been concluded. The sales from this
contract recorded in the reporting period total EUR 4,094k (prev. year: EUR 0k). It was determined based on the total
proceeds and the costs incurred so far.
The percentage completion is based on the ratio of the costs incurred and the estimated total costs expected to be
incurred. The total costs incurred and the profits each total EUR 4,094k (prev. year: EUR 0k) at the balance sheet date.
The downpayments received on the order total EUR 3,781k (prev. year: EUR 0k). No amounts have been retained.
The other assets at the balance sheet include a credit balance in the amount of EUR 313k.
24
9/30/2013
kEUR
5,694
Cash on hand and on deposit in banking accounts
9/30/2012
kEUR
33,068
The assets in this item have a maturity of up to three months and mainly comprise balances on deposit in
banking accounts. In addition, the amount includes minor cash balances.
The maximum credit risks are reflected in the carrying amount of the cash. The carrying amounts mainly
correspond to the fair values.
For details regarding the development of the cash see the consolidated cash flow statement (Attachment II).
F-42
25
Shareholders' equity
The changes in equity are outlined in the Consolidated Statement of Shareholders' Equity (Attachment II).
25.1
Subscribed capital
The amount at the balance sheet comprises – just as in the previous year – the subscribed capital of Mondi
Consumer Packaging International AG as the legal parent of the former NORDENIA Group.
The Company's share capital is totals EUR 29,190k and is divided into 29,189,579 individual bearer shares at
an imputed share in the share capital of EUR 1.00. The share capital is paid in full and each share grants one vote.
The directors of Mondi Consumer Packaging International AG are authorized – upon approval by the
Supervisory Board – to increase the share capital at May 17, 2016 against cash contributions or capital contributions
in kind in one or several steps up to the amount of EUR 14,595k.
At the balance sheet date, the balance of authorized capital totals EUR 14,595k (prev. year: EUR 14,595k).
The share capital of the Company is increased conditionally up to EUR 12,710k, divided into up to
12,709,589 new individual bearer shares.
25.2
Capital reserve
Based on a capital reserve of EUR -175,088k EUR at September 30, 2012, the capital reserve increased to
EUR -174,648k at September 30, 2013. The change is based on changes in the consolidated group.
The capital reserve breaks down as follows:
9/30/2013
kEUR
231,540
-406,185
-174,648
Capital reserve of the parent company
Difference from capital consolidation
25.3
9/30/2012
kEUR
231,537
-406,625
-175,088
Retained earnings
9/30/2013
9/30/2012
kEUR
kEUR
Reserve for actuarial gains/losses
-6,491
-5,946
Other retained earnings, as well as profits carried forward
114,417
101,889
107,926
95,943
Actuarial gains and losses resulting from adjustments and changes in the actuarial assumptions when
measuring the pension obligations are recorded in equity outside profit and loss (OCI method). In the reporting
period, actuarial profits attributable to the Group, not taking into account minority interests, in the amount of EUR
1,116k (prev. year: actuarial losses of EUR 5,694k) were recorded in equity outside profit and loss. Due to the
deconsolidation of Mondi Lohne GmbH (formerly NORDENIA Deutschland Lohne GmbH), actuarial gains in the
amount of EUR 101k were derecognized from the reserve.
Due to the establishment of the fiscal unit of Mondi Holding Deutschland GmbH for income tax purposes,
the deferred taxes recorded directly in equity at September 30, 2012 were reversed in the amount of EUR 1,763k
outside profit and loss in other comprehensive income.
25.4
Earnings of the parent’s shareholders
At the balance sheet date, interests of
EUR 42,926k (prev. year: EUR 13,070k) were recorded.
F-43
the
parent's
shareholders
in
the
amount
of
25.5
Other reserves
The other reserves break down as follows:
9/30/2013
kEUR
-6,648
Exchange clearing item
9/30/2012
kEUR
-1,609
The exchange clearing item comprises the differences resulting from the translation of foreign currency
financial statements of the foreign subsidiaries, not affecting the operating result. The changes over the previous
year mainly result from the appreciation of the EUR.
25.6
Minority interests
The amount disclosed at September 30, 2013, comprises minority interests in Mondi Consumer Packaging
Ibérica S.A.
In the previous year, the balance also included minority interests in Mondi Lohne GmbH which was sold in
February 2013.
The other comprehensive income of the minority shareholders breaks down as follows:
9/30/2013
kEUR
Earnings/losses from actuarial gains and losses from defined benefit plans
-1
Taxes on other comprehensive income
0
-1
26
9/30/2012
kEUR
-11
3
-8
Liabilities
Subordinated loans **)
Bonds*)
Liabilities due to
banks**)
Accounts due to
affiliated companies**)
Notes payable**)
Trade payables**)
Current income tax
liabilities**)
Other financial
liabilities**)
- thereof HR-related
liabilities
- thereof finance
leases
- thereof Sundry other
liabilities
- thereof accruals
Other non-financial
liabilities**)
- thereof downpayments received on
orders
- thereof liabilities
Due within
one year
1 to 5 years
more than 5 years
9/30/2013 9/30/2012 9/30/2013 9/30/2012 9/30/2013 9/30/2012
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
0
0
0
9,988
0
0
0
0 280,566 280,687
0
0
Total
9/30/2013 9/30/2012
kEUR
kEUR
0
9,988
280,566 280,687
2,446
39,417
2,173
3,199
0
0
4,619
42,616
136,450
431
75,138
0
909
80,042
18,600
0
0
0
0
0
40,990
0
0
0
0
0
196,040
431
75,138
0
909
80,042
13,437
5,552
0
0
0
0
13,437
5,552
40,069
56,316
1,924
7,897
3,344
12,811
45,337
77,024
2,960
2,825
0
0
0
0
2,960
2,825
530
13,942
1,803
2,180
3,344
4,249
5,677
20,371
9,794
26,786
9,493
30,055
0
122
5,568
150
0
0
8,562
0
9,794
26,908
23,623
30,204
5,127
5,247
181
623
165
26
5,472
5,897
1,755
1,855
0
0
0
0
1,755
1,855
F-44
from the deferral of
public grants
- thereof for taxes
- thereof for social
security
- thereof Sundry other
liabilities
- thereof accruals
*)
**)
26.1
344
1,660
0
1,474
139
0
589
0
160
0
5
0
642
1,660
594
1,474
540
565
0
0
0
0
540
565
16
812
273,097
472
883
187,483
43
0
303,444
34
0
302,395
5
0
44,499
21
0
12,837
63
812
621,040
527
883
502,715
The fair value as at September 30, 2013 totaled EUR 310,170k (prev. year: EUR 315,000k).
The carrying amounts mainly correspond to the fair values.
Subordinated loans
In conjunction with the issuing of a subordinated corporate bond on July 9, 2010, bearing
9.75 % interest, Mondi Consumer Packaging International AG was granted a subordinated loan by Landessparkasse
zu Oldenburg in the amount of EUR 10,000k. The loan was repaid early in October 2012.
The loan had a term originally elapsing on July 31, 2014 and was discounted at the 6-month Euribor
applicable two days prior to the expiration of the respective previous interest period plus a surcharge of 450 basis
points.
26.2
Bonds
On July 9, 2010, a corporate bond with a total volume of EUR 280mn was issued. The bond is discounted at
9.74
%
p.a.;
the
interests
are
due
payable
semi-annually
on
January
15
and
July 15.
The bond becomes due payable on July 15, 2017. The Company may prematurely exercise the option to
repay the bond either in full or in installments before July 15, 2014 by paying a premium and the interests that have
been accrued but not yet paid by the exercise date.
On or after July 15, 2014, the corporate bond may be repaid either in full or in part at the following
redemption prices:
Redemption
price
104.875%
102.438%
100.000%
Year
2014
2015
2016 and after
26.3
Liabilities due to banks
The change in liabilities due to banks results from the fact that the credit line of EUR 100,000k was replaced by
internal financing through Mondi Finance plc. in the reporting period.
26.4
Notes payable
This item comprises liabilities from financing notes.
26.5
Trade payables
Trade payables are payment obligations for goods and services acquired in the ordinary business operations.
The liabilities are classified as current debt when and if the payment obligation is due within one year (or in the course
of the regular business cycle when and if it is longer). Otherwise, they are recognized as non-current debt.
F-45
26.6
9/30/2013
kEUR
13,437
9/30/2012
kEUR
5,552
This item includes current income tax liabilities. For additional information regarding effective and deferred
taxes see chapters 13 and 19.
26.7
Accruals
The accrued liabilities break down as follows:
9/30/2013
kEUR
Accrued financial liabilities
Accrued interest
HR-related accruals (vacation claims, etc.)
- thereof due within one to five years
Deferrals for ABS
Other financial deferrals (outstanding invoices, etc.)
Accrued non-financial liabilities
HR-related accruals (insurance against occupational accidents, social security, etc.)
Other non-financial accruals
Total accruals
27
9/30/2012
kEUR
6,640
16,321
122
0
3,947
26,908
7,411
18,044
150
1,581
3,169
30,204
570
242
812
27,719
736
146
883
31,087
Liabilities from finance lease
The other liabilities include liabilities from finance lease agreements. If the Company bears the material risks
and rewards from the lease, the leased assets are recognized at the acquisition date and measured either at the fair value
or the lower present value of the future minimum lease payments. The leased assets recognized with regard to the
finance lease agreements primarily relate to buildings, other plant, factory and office equipment, as well as technical
plant and machinery. The agreements cover periods of 3 - 12 years.
The agreements contain expansion or purchase options. All leases are based on fixed installments. No
agreements regarding contingent lease payments were entered into. The Group’s obligations from finance leases are
secured by way of retention of title by the lessor in the leased assets. The present value of the Group’s lease obligations
basically corresponds to their carrying amount.
The amounts break down as follows:
Minimum lease
payments
9/30/2013
9/30/2012
kEUR
kEUR
Liabilities from finance leases:
- thereof due within one year
- thereof due within more than one year
and up to 5 years
- thereof due within more than five years
less future financing costs
Present value of the lease obligation
Present value of the
Minimum lease payments
9/30/2013
9/30/2012
kEUR
kEUR
1,081
14,547
530
13,942
3,457
4,410
8,948
3,270
5,677
4,357
5,851
24,755
4,384
20,371
1,803
3,344
5,677
N/A
2,180
4,249
20,371
N/A
The net values of the assets recognized as assets from finance leases total EUR 4,373k at the balance sheet
date (prev. year: EUR 9,122k) and break down as follows:
F-46
Net values by asset categories
Software
Buildings
9/30/2013
kEUR
26
4,089
0
258
4,373
9/30/2012
kEUR
32
8,398
151
541
9,122
In December 2000, Mondi Jackson, Inc., Jackson, entered into a sale and leaseback agreement regarding
fixtures, fittings and office equipment with the municipality of Cape Girardeau, Missouri, in the approx. amount of
USD 17 million. The municipality paid to the company a 9.5 % industrial revenue bond as a consideration with a
term expiring on December 1, 2012. The lease was classified as a finance lease. The respective liability in the
amount of USD 17 million (EUR 13,148k on September 30, 2012) was included in Other liabilities (cf. chapter 26).
The liability was repaid in one amount on December 1, 2012 by offsetting against the industrial revenue bond. The
leased assets were acquired at the end of the term in accordance with the agreement at USD 10.
28
Pension provisions
9/30/2013
kEUR
18,524
Pension provisions
9/30/2012
kEUR
19,819
The reconciliation of the assets and liabilities recorded in the balance sheet is as follows:
9/30/2013
kEUR
25,821
-7,619
322
18,524
Present value of the fund-financed obligations
Fair value of the plan assets
Present value of the non-fund-financed obligations
Provision
9/30/2012
kEUR
26,561
-7,155
413
19,819
Pension provisions are recorded for obligations from commitments and current benefits to entitled active and
former employee of the Group and their survivors as per IAS 19 – Employee benefits.
Depending on the legal, economic and tax conditions in the individual countries, there are different pension
systems that are usually based on the years of service and the employees' remuneration.
The amount of pension obligations (actuarial present value of accrued pension benefits and “defined benefit
obligations” (DBO), respectively) were determined using actuarial methods, with estimates being necessary. In
addition to the assumed mortality and disability, the following premises play a role that depends on the economic
situation of the respective country:
Interest rate
Anticipated return on assets
Dynamic benefits
Dynamic pension
Germany
9/30/2013
9/30/2012
%
%
3.50
3.40
3.50
3.85
3.00
3.00
2.00
2.00
Other countries
9/30/2013
9/30/2012
%
%
3.50
6.25
0.00 - 3.50
n/a
2.50 – 5.50
2.50
0.00 – 2.00
0.00
Dynamic benefits take into account anticipated future increases in salaries that – among others – are estimated
based on the inflation and the economic situation on an annual basis. The actuarial present value of the pension
obligation using the projected unit credit method is decreased in case of an externally financed pension plan by the fair
value of the valued assets of the external pension plan.
According to IAS 19, the interest rate for the discounting of the pension provisions shall be derived from the
discounting of high-quality fixed interest industrial bond on the market and should be consistent to the currency and the
F-47
maturity of the obligation. For this reason, the Group adjusts on a regular basis the interest rate based on the current
market circumstances. The adjustments do not have any effect on the current or future reporting periods.
The underlying mortalities are based on published statistics and past experience in each country. The
assumptions in Germany are based on the 2005 G Heubeck mortality tables.
If the assets exceed the obligations from the pension commitments, usually an asset is recognized in accordance
with IAS 19 – Employee benefits. IAS 19.58 prescribes that in case the assets exceed the liabilities an asset may only
be recognized, if Mondi CP as the committed employer had the right to distribute this excess or is entitled to future
reductions of contributions.
If the assets do not cover the liabilities the net obligation is – after deduction of the service cost not yet
accounted for – carried as a pension provision.
Actuarial gains or losses may result from increases or decreases of either the present value of the defined benefit
obligation or the fair value of the plan assets; the reasons for such gains and losses may - among others - be changes in
calculation parameters, estimates of the risks relating to the pension obligations and deviations between the actual and
the anticipated revenues from the plan assets.
Development of the defined benefit obligations (DBO):
Germany
Other countries
9/30/
9/30/
9/30/
9/30/
2013
2012
2013
2012
kEUR
kEUR
kEUR
kEUR
Balance at the beginning of
financial year
26,561
20,675
413
389
thereof from sold
operations
-467
0
0
0
adjusted balance at the
beginning of financial year
26,094
20,675
413
389
Current service cost
657
272
30
11
Interest expense
870
726
19
12
Actuarial gains (-)/losses
-1,104
5,647
236
0
Changes in exchange rates
0
0
-40
7
Paid benefits
-1,028
-759
-4
-6
Balance at balance sheet
date
25,489
26,561
654
413
Fair value of the DBO
pension obligations
25,489
26,561
654
413
-7,234
-7,155
-385
0
Plan deficit
18,255
19,406
269
413
Total
9/30/
2013
kEUR
9/30/
2012
kEUR
26,974
21,064
-467
0
26,507
687
889
-868
-40
-1,032
21,064
283
738
5,647
7
-765
26,143
26,974
26,143
-7,619
18,524
26,974
-7,155
19,819
Development of the fair values of the plan assets during the reporting period:
Plan assets at the beginning of financial year
thereof from sold operations
Expected earnings on plan assets
Actuarial gains / losses (-)
Employer’s contributions
Interest income
Benefits paid by external plans during the financial year
Plan assets at the balance sheet date
F-48
9/30/2013
kEUR
7,155
-320
6,835
0
248
1,296
268
-1,028
7,619
9/30/2012
kEUR
6,757
0
6,757
197
-57
1,017
0
-759
7,155
The plan assets mainly comprise other assets such as life insurances. They were assigned by Mondi CP
(insured) to the pension allottee.
The pension expenses of the respective period break down as follows and are recognized in the respective
item of the income statement:
Germany
Other countries
Total
2013/2012
kEUR
Current service
cost
Cost of sales
and other
expenses
Financial result
Interest expense
Expected
earnings on plan
Financial result
assets
2012
kEUR
2013/2012
kEUR
2012
kEUR
2013/2012
kEUR
2012
kEUR
657
602
273
726
30
19
12
12
687
621
285
738
0
1,259
-197
802
0
49
0
24
0
1,308
-197
826
Actuarial gains or losses are recorded outside profit and loss directly in other comprehensive income (OCI
method) and thus the pension provision always equals the actuarial present value of the obligation ("Defined Benefit
Obligation") (see chapter 2.18). In the reporting period actuarial gains – without taking into account deferred taxes –
were recorded outside profit and loss directly in other comprehensive income in the amount of EUR 1,116k (prev. year:
losses of EUR 5,705k). In the reporting period total actuarial gains and losses – without taking into account deferred
taxes – were recorded outside profit and loss directly in other comprehensive income in the amount of EUR 6,491k
(prev. year: EUR 7,752k).
The actual gains from the plan assets of external insurances totaled 132 kEUR (prev. year. EUR 140k). The
expected total yield is derived from the weighted average of the Other assets contained in the plan assets. The forecasts
are based on past experience, economic data and interest forecasts.
The Group expects to pay contributions in the amount of EUR 1,214k (prev. year: EUR 386k) into defined
benefits plan in the coming financial year.
Amounts for the current year and the four previous years of the pension obligations, the plan assets, the
obligations exceeding the assets, as well as experience-based adjustments.
in kEUR
each at the balance sheet date
Pension obligations (DBO)
Plan assets
Plan deficit
Adjustments in %
Experience-based increase (+) / decrease (-) in
pension obligations
Experience-based increase (+) / decrease (-) in plan
assets
9/30/
2013
26,143
-7,619
18,524
9/30/
2012
26,974
-7,155
19,819
2011
21,064
-6,757
14,307
2010
20,996
-6,989
14,007
6/28/
2010
21,231
-6,919
14,312
2009
18,241
-6,420
11,821
9/30/
2013
9/30/
2012
2011
2010
6/28/
2010
2009
-3.07
-0.05
-0.06
0.63
1.00
-0.54
-1.09
0.80
-2.78
2.52
-4.12
0.29
The employer's portion of the statutory pension insurance is included in personnel expenses, social security
(cf. chapter 14).
Furthermore, there are defined contribution commitments within the Group the benefits of which are
financed in full by contributions to an external plan. The Group does not bear any financial or actuarial risks
inherent in these commitments. In 2013, the contributions to defined contribution plans total EUR 6,852k (prev.
year: EUR 5,147k).
F-49
29
29.1
Other disclosures regarding financial instruments
Carrying amounts, values and fair values by classes
Measurement
Carrying
category
amount
as per IAS 39 9/30/2013
kEUR
kEUR
ASSETS
Non-current
Financial assets
Loans and
receivables
Available for sale
Other original
financial assets
Loans and
receivables
Held for trading
Current
Cash and cash
equivalents
Trade receivables
Receivables due
from affiliated
companies (nonconsolidated)
Other assets
Financial assets held for trading
Other original
financial assets
Available for sale
Amortized
cost
kEUR
LaR
AfS
3,105
230
3,105
LaR
FAHfT
79
49,960
79
LaR
LaR
Value balance sheet as per IAS 39
Fair value Fair value
outside
through
Fair
profit or
profit or
falue
Cost
loss
loss
IAS 17 9/30/2013
kEUR
kEUR
kEUR
kEUR
kEUR
230
49,960
5,694
5,694
132,131 132,131
LaR
LaR
74,515
17,678
FAHfT
151
AfS
0
74,515
17,678
151
Non-current
Subordinated
liabilities
FLAC
0
0
Liabilities due to
banks
FLAC
282,739 282,739
Liabilities towards
affiliated
companies
FLAC
59,589 59,589
Other liabilities
Interest
bearing
FLAC
0
0
No interest
FLAC
122
122
From finance
leases*)
FLAC
5,147
Others
FLHfT
0
Current
Liabilities due to
banks
Trade payables
Notes payable
Liabilities due to
affiliated
Other liabilities
Interest
bearing
No interest
From finance
leases*)
Others
FLAC
FLAC
FLAC
FLAC
Carrying
amount
9/30/2012
kEUR
Amortized
cost
kEUR
outside
through
Fair
profit or
profit or
value
Cost
loss
loss
IAS 17 9/30/2012
kEUR
kEUR
kEUR
kEUR
kEUR
3,105
230
17,130
230
17,130
79
49,960
14
7,429
14
5,694
132,131
33,068
94,151
33,068
94,151
33,068
94,151
74,515
17,678
314
26,563
314
26,563
314
26,563
151
15
0
0
0
9,988
312,343
17,130
230
230
14
7,429
7,429
15
15
0
9,988
9,988
283,886 283,886
318,199
59,589
0
0
0
0
122
5,550
168
5,550
168
5,550
168
5,147
0
6,428
8,562
2,446
75,138
431
2,446
75,138
431
39,417
80,042
909
39,417
80,042
909
39,417
80,042
909
136,450 136,450
136,450
0
0
0
5,540
33,983
150
41,983
150
41,983
150
41,983
530
16
13,943
240
2,446
75,138
431
FLAC
FLAC
5,540
33,983
FLAC
FLHfT
530
16
5,147
5,540
33,983
530
16
6,428
8,562
13,943
240
*) The categories in this list are based on IAS 39. Finance leases are usually not within the scope of IAS 39, but IFRS 7. Therefore, finances
leases are disclosed separately.
F-50
6,428
8,562
13,943
240
Thereof broken down measurement categories as per IAS 39:
Measurement category
as per IAS 39
kEUR
Loans and
receivables
Financial assets
available for sale
Financial assets
held for trading
Financial liabilities
measured at
amortized cost
Financial assets
held for trading
Carrying
amount
9/30/2013
kEUR
Fair value
Fair value
Amortized
outside
through
cost
Cost
P&L
P&L
kEUR
kEUR
kEUR
kEUR
Carrying
amount
9/30/2012
kEUR
Fair value
Fair value
Amortized
outside
through
cost
Cost
P&L
P&L
kEUR
kEUR
kEUR
kEUR
LaR
233,200
233,200
0
0
0
171,240
171,240
0
0
0
AfS
230
0
230
0
0
230
0
230
0
0
FAHfT
50,110
0
0
0
50,110
7,444
0
0
0
7,444
FLAC
596,437
596,437
0
0
0
462,093
462,093
0
0
0
FLHfT
16
0
0
0
16
8,802
0
0
0
8,802
Thereof broken down by measurement categories as per IAS 7.27:
9/30/2013
ASSETS
Financial assets available
for sale
Financial assets held for
trading
EQUITY AND
LIABILITIES
trading
9/30/2012
Level 1*)
Level 2**)
Level 1*)
AfS
0
0
0
FAHfT
0
50,110
FLHfT
0
16
Level
2**)
Level
1*)
Level
2**)
Level
1*)
Level
2**)
0
0
0
0
0
0
50,110
0
15
7,429
7,444
0
16
0
8,802
0
8,802
*)
Level 1: fair values are determined based on publicly quoted market prices due to the fact that an
active market provides the best possible unbiased indication for the fair value of a financial asset or a financial
liability.
**)
Level 2: If there is no active market for a financial instrument, a company determines the fair
value using measurement models. These methods include the use of the most recent transactions between
experienced, independent business partners willing to enter into an agreement, the comparison with the current fair
value of another, basically identical financial instrument, the use of option price models or the discounted cash flow
method. The fair value is estimated based on the results of a measurement method that uses market data to the
largest extent possible and is based as little as possible on company-specific data.
**)
Level 3: The measurement models used at this level are not based on parameters observable on the
market.
For details regarding the receivables due from and payables due to non-consolidated affiliated companies see
chapter 37.2.
The financial instruments available for sale relate to investments in non-consolidated affiliated companies
and investments that do not exceed a 20 % share. They are recognized at cost due to the fact that the fair values are
not available and other admissible measurement methods do not provide reliable results either. These are shares not
quoted on the market. At present no sale is intended. The carrying amounts are specified in chapter 18.1.
Cash and cash equivalents, trade receivable, as well as other receivables are basically due within a short
period of time. Thus, their carrying amounts at the balance sheet date correspond to their fair value.
The fair values of the other non-current receivables which are due within more than one year correspond to
the present values of the payments relating to the assets, taking into account the respective current interest
parameters that reflect market- and partner-related changes in terms and conditions and expectations.
F-51
Trade payables, as well as other liabilities usually fall due within a short period of time; the recognized
amounts correspond to the respective fair values.
The fair values of liabilities due payable to banks, notes payable and other financial liabilities are determined
as the present values of the payments relating to the debt and liabilities, taking into account the respective applicable
interest structure.
The termination options with regard to the industrial revenue bond are deemed derivative financial
instruments as defined in IAS 39 and shall be measured at fair value through profit and loss (cf. chapter 18.2 and
chapter 26.2). Therefore, the termination options fall into the "Financial assets held for trading" category.
The fair value of the termination operations was determined as follows:
1st Step: Determination of the present value when and if the options are exercised
2nd Step: Determination of the present value if the options are not exercised
3rd Step: Determination of the difference between the present values determined in accordance with step 1
and step 2.
For measurement purposes, an interest rate of 1.82 % was used that is deemed the comparative refinancing
interest rate of Mondi Finance plc. for the Company for a term expiring in 2017.
In the previous year, a Hull-White option price model was used for the computation of the fair value of the
termination options. In the Hull-White option price model, material input factors are based on data that cannot be
observed directly on the market.
The appliance of the different measurement model is a change of estimates according to IAS8.
Since the most significant input factors due to the assumption by the Mondi Group can be observed on the
market, measurement in the reporting period was performed in the three steps mentioned above; the fair value of the
termination options is attributed to the 2nd level (prev. year: 3rd level).
The termination option developed as follows in the financial year and in the previous year (IFRS 7.27B(c)):
1/1/2012
2,261,852.00 EUR
Recorded in profit or loss
- in other financial income
5,166,709.75 EUR
9/30/2012 / 10/1/2012
7,428,561.75 EUR
- in other financial income/
expenses
42,531,004.25 EUR
9/30/2013
49,959,566.00 EUR
According to IFRS 7.27B(e), a sensitivity analysis had to be performed for the termination options
attributable to the 3rd stage with regard to the input factors not directly observable on the market that have a major
impact on the measurement model and, at the same time, can be replaced by plausible alternative assumptions. The
following table shows the value of the termination options and their sensitivity when using selected sensitivities. By
using sensitivity analyses, the Group determines which impact a change of the respective risk variables would have
on the value of the termination option. Sensitivities with respect to the change in the interest curve, the volatility and
credit standing spreads are analyzed.
F-52
Sensitivity
Value of the termination option
9/30/2013
9/30/2012
Parallel
shifting
of
interest curve
+ 100 Basis points
- 100 Basis points
Change of volatility
+ 10 %
- 10 %
Change of credit standing
spreads
+ 100 Basis points
- 100 Basis points
29.2
the
n/a
n/a
4,469,634.57 EUR
12,009,675.32 EUR
n/a
n/a
8,111,760.86 EUR
6,798,317.01 EUR
n/a
n/a
3,892,651.75 EUR
13,202,289.75 EUR
Net results by measurement categories
Interest
Subsequent recognition
Foreign
currency
at fair
transImpairmen
value
lation
t loss
kEUR
kEUR
kEUR
kEUR
Loans and
receivables (LaR)
Held-to-maturity
investments (HtM)
Available for sale
financial assets (AfS)
Held for trading
(FAHfT und FLHfT)
measured at amortized
cost (FLAC)
Disposal
Net result
2013
kEUR
kEUR
2012
kEUR
180
0
-247
-659
0
-727
162
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
42,665
0
0
0
42,665
2,000
-35,878
0
0
0
0
-35,878
-21,601
-597
0
0
0
0
-597
-1,592
Finance lease
Interest from financial instruments and the other components of the net profits/loss are recorded in financial
results. Only the allowances on trade receivables and currency effects attributed to the classes loans and receivables
are recorded in the operating result.
The fair value is disclosed in the financial result in the statement of profit and loss.
30
9/30/2013
kEUR
6,665
For details regarding deferred tax liabilities see chapter 19 "Deferred tax assets".
F-53
9/30/2012
kEUR
17,406
31
Other current and non-current provisions
Expected to be due
Balance
on
10/1/2012
kEUR
Non-current provisions
for stock options
for anniversary obligations
for archiving obligations
for demolition obligations
Current provisions
for stock options
for warranty obligations
for customer bonuses
for compensations and
bonuses *)
for impending losses
for taxes
for fees and charges
for litigation
for interest
for other accrued liabilities
Change
concerning
in the
consolidated
Group and
Currency
kEUR
Addition
kEUR
Interest
effect
kEUR
Utilization
kEUR
ReReclassiversal fication
kEUR
kEUR
Balance on
9/30/2013
kEUR
<3
months
kEUR
>3/
<6
months
kEUR
>6
months
kEUR
> 12 /
< 24
months
kEUR
> 24
months
kEUR
0
1,101
360
31
1,492
0
-7
-17
0
-24
0
77
0
0
77
0
46
0
0
46
0
311
0
0
311
0
24
0
0
24
1,000
027
0
0
1,027
1,000
909
345
31
2,285
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,000
139
0
0
1,139
0
770
345
31
1,145
21,289
2,844
4,429
0
-105
-89
0
750
4,345
0
0
0
18,788
850
3,801
0
1,203
328
-1,000
0
0
1,500
1,436
4,556
0
600
3,559
1,500
532
995
0
304
2
0
0
0
0
0
0
845
109
701
84
32
600
294
31,226
32,718
-66
-3
-15
-4
0
0
-8
-289
-313
516
60
525
35
5
0
1,854
8,090
8,167
0
0
0
0
0
0
0
0
46
477
0
495
45
29
600
1,045
26,130
26,440
170
0
0
0
3
0
48
1,752
1,776
-27
0
0
0
0
0
0
-1,027
0
622
165
716
70
5
0
1,048
10,118
12,402
353
91
358
70
5
0
1,033
6,069
6,069
178
0
358
0
0
0
15
3,577
3,577
91
74
00
0
0
0
0
471
471
0
0
0
0
0
0
0
0
1,139
0
0
0
0
0
0
0
0
1,145
*) Bonuses also include payments for anniversary obligations.
F-54
a)
Stock options
For the explanatory comments regarding the stock option program and the corresponding provisions see
chapter 34. The amount of the present value of the expected cost and the expected maturity can be derived in the
above table.
b)
Anniversary obligations
A provision in the amount of the present value of the expected costs was recorded for obligations for
employee anniversaries. The respective expense was recorded in personnel expenses in the statement of profit and
loss. Please find the respective maturities in the table above.
c)
Guaranty obligations
Guaranty obligations usually occur in the course of trading. The Group is bound by the law, contracts or
factually to perform repair for a certain period of time after the sale or replace the item. These obligations are
accounted for by recorded provisions in the amount of the respective expected obligation. Please find the respective
maturities in the table above.
d)
Customer discounts
Customer discount agreements have been entered into with various customers. Provisions in the anticipated
amounts were recorded for the obligations under those agreements. Please find the respective maturities in the table
above.
Other disclosures
32
Overall presentation of financial risks
32.1
Capital risk management
The business policy of Mondi Consumer Packaging aims at securing the Company's continuation,
consistently generating appropriate yields and steadily increasing the corporate value. The goal is to reduce net
leverage.
The net leverage for accounting purposes at the balance sheet dates is as follows:
Net leverage
9/30/2013
kEUR
Non-current financial liabilities
Bond
Interest-bearing loans and liabilities*
Liabilities from leases
Current financial liabilities
Interest-bearing liabilities*
Notes payable
9/30/2012
kEUR
+/in %
230,606
61,762
5,147
273,258
13,188
6,428
-15.6
368.3
-19.9
29,217
431
530
39,417
909
795
-25.9
-52.6
-33.3
Financial assets
5,694
33,068
-82.8
321,999
300,927
7.0
*Includes net items from interest-bearing transactions of the Mondi Group based on the new financing
structure
At the balance sheet date, the cash and cash equivalents totaled EUR 5,694k (prev. year: EUR 33,068k).
F-55
In July 2010, a bond – ultimately due in 2017, nominal volume of EUR 280,000k, 9.75 % coupon – was
successfully placed on the market. In addition, a subordinated loan in the amount of EUR 10,000k, ranking equally
to the bond, was taken up. An addition liquidity reserve was a credit line of EUR 100,000k that had been available
since July 9, 2010 basically for a period of three years and that was utilized last at EUR 35,000k in the main line and
EUR 3,154k in the ledger lines. Apart from the bond, the additional credit lines taken up under the former
refinancing strategy and the subordinated loan have meanwhile been repaid in full as a result of the assumption by
the Mondi Group and replaced by loans of the Mondi Group. These loans are loans with a term of five years and
variable interests. The variable interests comprise two components: the average borrowing costs plus a surcharge of
0.15 %. The amount of the loans depends on the individual financial requirements of the companies.
The Group controls the debt by way of the following accepted key ratios based on the financial covenants.
The ratio of the net financial liabilities and the adjusted EBITDA decreased slightly over the previous year
from 3.1 to 2.8. At September 30, 2013, the ratio of the financial liabilities preferential to the bond and the adjusted
EBITDA was 0.1. In the previous year, this ratio was 0.5 and thus has improved significantly. The ratio of the
adjusted EBITDA and the interest result – EBITDA interest coverage – totaled 3.6 in the reporting period (prev.
year: 3.2). This value has changed slightly due to the interest obligations from the bond that remained equal and that
account for the largest portion of the interest obligations.
Mondi Consumer Packaging met the agreed-upon financial covenants – just as in the previous year – with
major head room. These covenants are monitored on a monthly basis.
32.2
Principles of financial risk management
In respect to the assets, liabilities and intended transactions, Mondi Consumer Packaging is in particular
subject to risks from changes in interest rates and exchange rates, as well as changes in prices of raw materials.
In the course of the assumption of the former Nordenia Group by the Mondi Group, the current financial risk
management, i.e. the administration and control of all financial risks (market price risks, exchange rate risks, interest
risks, risk relating to prices of raw materials, and liquidity risks) has basically been transferred to the Mondi Group.
Mondi Group is now also responsible for the administration and control of these risks based on the treasury
policies of the Mondi Group. These policies also replace the treasury policies of the former Nordenia Group.
Derivative hedge instruments of the Mondi CP used until the assumption, in particular interest swaps and
exchange future transactions, were discontinued in the reporting period due to the assumption or replaced by
exchange future transactions of the Mondi Group, respectively.
32.3
Market price risks
The market price risk is the risk of losses resulting from changes in market prices and market parameters or
factors affecting the value of a financial instrument. The market price risk is controlled by means of financial
hedges; however, the administration and control of these hedges has not been transferred to the Mondi Group as a
result of the transfer to the Mondi Group.
32.4
Risks resulting from changes in exchange rates
Being an internationally operating company and due to the related activities, the Group is also subject to
foreign exchange risks. The foreign exchange risks that the Group faces result from investments, financing and
operating activities.
Since the effective date of the transfer of the Group to the assuming Mondi Group, the Mondi Group has
been responsible for the administration and control of currency-related risks.
If all other variables had remained constant and the EUR had been subject to a 10 % appreciation relative to
the market development for the transactions denominated in USD, the annual net profits in the reporting period
would have decreased by about EUR 12,483k (prev. year: EUR 9,498k).
F-56
32.5
Interest risks
The interest risk is the result of the uncertainty about the future development of the interest rates and affects
all interest-bearing items and their derivatives, as well as future cash flows. The risk is deemed to equal the volume
of non-hedged variable interest-bearing items. Among the material financing agreements, the issued bond is subject
to a fixed coupon. The other variable-interest financing agreements, comprising the subordinated loan ranking equal
to the bond, the syndicated credit line and the ABS program, on the other hand, have been repaid as a result of the
assumption by the Mondi Group. Due to the new financing structure within the Mondi Group, there is no longer a
significant risk from changes in interest rates as in the previous year. Thus, no sensitivity analysis was performed in
this reporting period. In the previous year, the fair value of the interest swaps would have been EUR 3,788k /
EUR 4,101k higher if the interest rates at the balance sheet date had been 100 basis points higher / lower with all
other variables remaining constant. If the interest rates in the previous year had been 100 basis points higher and all
other variables had remained constant, the financing costs relating to the variable portion of the financing structure
would have been EUR 492k higher.
In the previous year, the Group had payer swaps at a nominal value of EUR 60,000k and an average fixed
interest rate of 3.48 %. They were repaid in the reporting period due to the reorganization of the financial risk
management. The negative fair value of the interest swaps totaled EUR 8,562k at previous year's balance sheet date.
Termination options included in the corporate bond are measured and disclosed separately.
32.6
Raw materials price risk
Mondi Consumer Packaging primarily faces raw materials price risks in the granulates segment. According
to Mondi Consumer Packaging, there is no efficient market for the minimization of the risks at the balance sheet
date. The Group continues to observe the market. Price risks are minimized by way of corresponding agreements
with business partners.
32.7
Credit risk
Credit risk is the risk of insolvency or default in settlement of receivables by business partners. A less
favorable credit status of a business partner may result in a decrease in the value of the receivable due from said
business partner.
Mondi Consumer Packaging is in particular subject to credit risks in its operating business activities. In this
respect, receivables of the individual companies are permanently monitored and credit risks are accounted for by
recording itemized allowances and general itemized allowances. In addition, trade receivables of EUR 85,500k
(prev. year: EUR 5,458k) were secured by way of commercial credit insurances at September 30, 2013. The
remaining financial assets, on the other hand, are not secured or hedged. Thus, there is a net risk position equaling
EUR 46,631k (prev. year: EUR 88,693k) (trade receivables in the amount of EUR 132,131k (prev. year: EUR
94,151k), less trade receivables insured by commercial credit insurances of EUR 85,500k (prev. year: EUR
5,458k)).
The former Nordenia companies joined the collective agreement for commercial credit insurance of the
Mondi Group effective April 1, 2013.
The maximum credit risk is reflected in the carrying amounts of the financial assets disclosed in the balance
sheet (incl. derivative financial instruments with positive market value). The risk of lost receivables that are neither
overdue nor impaired is considered rather low due to the excellent credit standing of the customers. Hence, about
two third of the revenues are generated from the top 10 customers that are among the major manufacturers of
consumer goods and whose excellent credit standing (usually investment grade) results in a rather low probability of
a loss of the receivables.
F-57
32.8
Liquidity risk
The term liquidity risk also includes the question of access to cash equivalents. In order to ensure liquidity,
Mondi Consumer Packaging and its subsidiaries were integrated into the cash pooling of the Mondi Group in the
reporting period. A special liquidity plan was not prepared due to the flexible hedging via the Mondi cash pooling.
The credit facility established in the course of the refinancing measures in 2010 – under which the liquidity
reserves were maintained in the form of agreed-upon credit lines – was replaced by loans and the cash pooling
facility of the Mondi Group as a result of the transfer to the Mondi Group. Each company has an intraday limit
through the cash pooling that, if need be, may be exceeded as agreed-upon with the Treasury of the Mondi Group.
Hence, the current solvency and the financial flexibility of Mondi Consumer Packaging are ensured.
Cash flows from financial liabilities and
derivative
financial liabilities
Bonds*)
Liabilities due to banks**)
Accounts due to affiliated companies**)
Notes payable**)
Trade payables**)
Current income tax liabilities**)
Other financial liabilities**)
- thereof HR-related liabilities
- thereof finance leases
- thereof derivatives
- thereof Sundry other liabilities
- thereof accruals
Other non-financial liabilities**)
- thereof downpayments received on orders
- thereof liabilities from the deferral of
public grants
- thereof for taxes
- thereof for social security
- thereof Sundry other liabilities
- thereof accruals
*)
**)
Due within
one year
1 to 5 years
9/30/2013 9/30/2012 9/30/2013 9/30/2012
kEUR
kEUR
kEUR
kEUR
0
542
0
10,542
27,300
27,300 348,250 375,550
2,552
40,588
2,200
3,233
138,894
0
19,056
0
436
919
0
0
75,138
80,042
0
0
13,437
5,552
0
0
40,069
56,316
1,924
7,897
2,960
2,825
0
0
530
13,942
1,803
2,180
16
240
0
0
9,778
9,253
0
5,568
26,786
30,055
122
150
5,127
5,247
181
623
1,755
1,855
0
0
344
1,660
540
16
812
302,953
0
1,474
565
472
883
216,506
139
0
0
43
0
371,611
589
0
0
34
0
397,845
more than 5 years
9/30/2013 9/30/2012
kEUR
kEUR
0
0
0
13,650
0
0
41,994
0
0
0
0
0
0
0
3,344
12,811
0
0
3,344
4,249
0
8,562
0
0
0
0
165
26
0
0
160
0
0
5
0
45,503
5
0
0
21
0
26,487
Total
9/30/2013 9/30/2012
kEUR
kEUR
0
11,084
375,550 416,500
4,751
43,821
199,944
0
436
919
75,138
80,042
13,437
5,552
45,337
77,024
2,960
2,825
5,677
20,371
16
8,802
9,778
14,821
26,908
30,204
5,472
5,897
1,755
1,855
642
1,660
540
63
812
720,065
594
1,474
565
527
883
640,838
In general, the Company intends to repay the above financial debt within the aforementioned due periods. In
case of positive cash flow development, the Company will repay the liabilities due to banks early.
33
The market value of the financial instruments is determined by the respective partner in the derivative
transaction based on recognized calculation methods.
The determined market values are reported in the balance sheet under financial receivables and financial
liabilities.
Nominal volumes are presented separately as the total amount of acquired derivatives. At the balance sheet
date, the market values and nominal values are as follows:
F-58
Non-current
Due within
1 to 5 years
more than 5
years
9/30/ 9/30/
9/30/ 9/30/
2013 2012
2013 2012
kEUR kEUR
kEUR kEUR
Market value of derivative instruments
ASSETS
Exchange futures –
held for trading
Termination option
Current
one year
Total
9/30/ 9/30/
2013 2012
kEUR kEUR
9/30/ 9/30/
2013 2012
kEUR kEUR
0
49,960
0
0
0
0
0
7,429
151
0
15
0
151
49,960
15
7,429
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
8,562
16
0
240
0
16
0
240
8,562
Nominal values of derivative instruments
ASSETS
held for trading
0
Termination option
49,960
0
0
0
0
0
7,429
12,899
0
3,500
0
12,899
49,960
3,500
7,429
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 60,000
Cash flow hedges
held for trading
Interest swaps
Cash flow hedges
held for trading
Interest swaps
8,523 32,183
0
0
8,523 32,183
0 60,000
The fair values and measurement as at the balance sheet date of all derivatives form the basis of the hedge
measurement and are documented for each individual transaction.
Derivative financial instruments held for trading are classified as current assets or liabilities. The full fair
value of a derivative hedge instrument is classified as a non-current asset / liability when and if the residual maturity
of the hedged instrument exceeds twelve months; otherwise, the instrument is classified as a current asset / liability.
(a)
Exchange futures
The negative fair values of outstanding exchange futures totaled EUR 16k at September 30, 2013 (prev. year:
EUR 240k) and are disclosed as financial liabilities (cf. chapter 29.1).
The positive fair values of outstanding exchange futures totaled EUR 151k at September 30, 2013 (prev.
year: EUR 15k) and are disclosed as financial liabilities (cf. chapter 29.1).
Gains and losses from exchange futures are recorded in profit and loss. There is no hedge accounting.
(b)
Interest swaps
At September 30, 2013, there are no interest swaps and gains or losses from interest swaps were recorded
neither in equity (other reserves) nor in profit and loss. There is no hedge accounting.
The negative fair values of outstanding interest swaps totaled EUR 0k (prev. year: EUR 8,562k) and were
disclosed as financial liabilities (cf. chapter 29.1).
F-59
34
Stock option program
In 2006, the annual general meeting of NORDENIA International AG (now Mondi Consumer Packaging
International AG) resolved to introduce a stock option program for the German and foreign executives that was
implemented the same year.
Based on adjustment provisions, the program was set up as a virtual stock option program in 2010 that
granted the option holders only the option to receive cash compensation. Nordenia International AG (now Mondi
Consumer Packaging International AG) granted a total of 2,379,094 options to the members of its Board of
Directors, the members of managing bodies of group companies, as well as other executives of the Group. The
directors of Nordenia International AG (now Mondi Consumer Packaging International AG) held a total of
1,534,899 options as follows: Mr. Landwehr 613,959 options, Mr. Picolin 460,470 options, and Mr. Busacker
460,470 options. No options were granted to members of the Supervisory Board.
The option terms prescribed that in case of a sale of more than 50 % of the shares in the Company to an
independent third party (exit event) a cash payment to the option holders would be due as described below.
By way of an agreement dated July 10, 2012, the Company's stockholders sold in total more than 87 % of the
stocks to an independent third party, namely to Blitz 12--403 AG which is part of the Mondi Group. The execution
of the sale and thus the exit event resulting in the option holders' claim for payment occurred on September
30/October 1, 2012.
The cash payment per option due payable to the option holders was determined as stated in the option terms,
i.e. based on the fair value per stock. In the event that the share are sold against cash payment the fair value was to
be determined based on the assessed equity value per share less an amount equaling the pro rata share in the
transaction costs to be borne by the selling Oaktree funds. The equity value per share was based on the cash
purchase price per stock that the vendors received according to the purchase price. Amounts not actually received
were in particular deemed components of the purchase price that were paid to a trust fund in accordance with the
purchase agreement. This amount does not become due payable until and to the extent that it is paid to the vendors
after the expiration of the period specified in the purchase agreement for the sold stocks. The maximum amount of
the subsequent payment from the funds in the trust fund totals EUR 0.98 per option. Furthermore, the option holders
are entitled to a portion of the proceeds from the anticipated sale of the investment in Danor. Based on the sales
proceeds of EUR 3 million, the amount totals EUR 0.10 per option.
Accordingly, the Company paid an amount of EUR 7.86 per stock in early October 2012. So far the agreedupon amounts from the disposal of the investment in Danor and the funds in the trust fund have not been paid. This
was accounted for as at September 30, 2012 by recording an appropriate provision.
At the balance sheet date, the provision for outstanding payments from the discontinuation of the stock
option program total EUR 2,500k (prev. year: EUR 21,289k).
F-60
35
Explanatory comments on the consolidated cash flow statement
35.1
Cash
The cash, comprising cash on hand and short-term bank balances, combines cash and cash equivalents. At the
balance sheet date, the cash totaled EUR 5,694k (prev. year: EUR 33,068k).
35.2
Cash flow from current operating activities
The cash flow from current operating activities decreased by EUR 44,548k from EUR 18,935k in the
previous year to EUR -25,613k in the reporting period. The EBITDA increased by
EUR 14,018k and is offset against tax payments that increased by EUR 5,673k and interest payments that increased
by EUR 5,654k. The outflow resulting from the increase in the working capital, in particular due to the
discontinuation of the ABS program changed by EUR 30,177k, while the outflow from the change in assets and
liabilities that are not attributed to investing and financing activities changed by EUR 25,531k.
35.3
The cash paid for investing activities increased over the previous year by EUR 19,626k from EUR 21,423k to
EUR 41,049k. The investments in property, plant and equipment and intangible assets increased by EUR 16,970k
from EUR 27,324k in the previous year to EUR 44,294k in the reporting period. The inflow from the disposal of
assets decreased in the reporting period by EUR 1,554k. The inflow from the disposal of subsidiaries, on the other
hand, decreased by EUR 1,777k over the previous year. The inflow from the disposal of consolidated companies
accounts for the disposal of the shares in Mondi Lohne GmbH (EUR 1,932k) and was entirely in cash. In the course
of the disposal of the shares in Mondi Lohne GmbH and Mondi IT Services Barleben GmbH, cash and cash
equivalents in the amount of EUR 66k were paid.
9/30/2013
kEUR
Current assets
Trade receivables
Other receivables and assets
Inventories
Non-current assets
Intangible assets
Deferred tax assets
66
826
903
751
63
1,912
145
Current liabilities
Liabilities due to suppliers
Tax liabilities
Other current liabilities and provisions
Long-term liabilities
Pension obligations
Other non-current liabilities and provisions
35.4
349
287
702
127
-40
734
Cash flow resulting from financing activities
The cash flow from financing activities increased by EUR 30,584k from EUR 6,841k in the previous period
to EUR 37,425k in the reporting period due to increased debt. The cash flows from financing activities primarily
increased in the reporting period in order to finance the increased working capital. Furthermore, the new long-term
loans affect Mondi Finance plc.
F-61
36
Segment information
The management based the determination of the business segments on the reports available to the
management board.
The companies of the Group primarily operate in one industry, namely development, production and
processing of films and material components for packing, technical solutions and use in product components.
geographic regions. Based on the internal control, the Group is divided into the divisions Advanced Films &
Components (AFC), Consumer Goods Packaging (CGP) and Services (for service companies). This division is
based on the fixed attribution of the companies. Both operating divisions operate in the endmarkets "hygiene",
"converting", "food", "petcareand garden products", "beauty and healthcare", "industrial", "detergents & cleansing
agents" and "others".
The companies in the Service division mainly render intercompany services.
The management board analyzes the results of the business segments, et alia based on an adjusted EBITDA.
This assessment basis excludes one-time expenses of the business segments, ABS expenses, management fees,
expenses relating to the stock option program, gains and losses from the sale of assets, as well as compensation and
reorganization expenses.
The segment information is based on the same reporting and measurement methods as in the consolidated
financial statements. The reconciliation column contains the cross-segment effects from consolidation.
According to the internal reporting, the following key ratios were defined as control ratios:
- Gross margin
- Adjusted EBITDA
- Adjusted EBITDA in % of the revenues
- External working capital, including
- Inventories
- Working capital-relevant assets
- Working capital-relevant receivables
- Working capital-relevant debt
- Working capital-relevant liabilities
- Average number of employees per year
Revenues of EUR 340,983k (prev. year: EUR 260,533k) were generated with one external customer. The
customer is served by companies of the divisions AFC and CGP.
F-62
Segment information by divisions
AFC
CGP
Services
9/30/
2013
155,032
9/30/
2012
126,585
9/30/
2013
84,918
9/30/
2012
60,177
kEUR
522,398
423,197
398,617
kEUR
-822
-1,178
Revenues
kEUR
521,576
Gross margin
Adjusted EBITDA
Adjusted EBITDA in
% of the revenues
kEUR
kEUR
90,225
64,217
12.3
Adjustments
kEUR
110
-713
-112
EBITDA
Depreciation and
amortization
kEUR
64,107
54,562
36,745
Tonnage
t
Total revenues of the
divisions
Internal revenues of
the
divisions
%
9/30/
2013
Reconciliation
9/30/
2012
Group
0
0
9/30/
2013
-9,015
9/30/
2012
-5,876
9/30/
2013
230,936
9/30/
2012
180,886
282,034
10,873
8,908
0
0
931,888
714,139
-18,224
-12,936
-1,227
-959
-45,202
-32,625
-65,475
-47,698
422,019
380,393
269,098
9,646
7,949
-45,202
-32,625
866,413
666,441
70,149
53,848
60,169
36,634
38,749
24,987
6,375
457
6,572
-4,241
-6,929
57
-6,220
142
149,840
101,364
109,250
74,736
12.8
9.6
9.3
4.7
-53.4
-0.1
-0.4
11.7
11.2
987
4,093
-3,052
770
61
4,862
-2,717
24,000
-3,636
-1,189
-714
81
96,502
77,453
kEUR
13,690
10,631
14,847
14,045
1,015
803
926
-33
30,478
25,446
EBIT
Investments (CAPEX)
1)
kEUR
50,417
43,931
21,898
9,955
-4,651
-1,993
-1,640
113
66,024
52,007
kEUR
20,272
11,856
23,013
11,410
722
467
-99
0
43,908
23,733
Inventories
Working capitalrelevant receivables 2)
Working capitalrelevant assets
kEUR
53,661
56,741
61,752
56,286
0
847
-859
-735
114,554
113,139
kEUR
67,384
54,611
59,895
33,378
53
1,591
0
0
127,331
89,581
kEUR
121,045
111,352
121,647
89,664
53
2,438
-859
-735
241,885
202,719
kEUR
40,582
46,433
29,495
26,876
-37
438
0
0
70,040
73,746
kEUR
40,582
46,433
29,495
26,876
-37
438
0
0
70,040
73,746
kEUR
80,463
64,919
92,152
62,788
90
2,000
-859
-735
171,845
128,973
kEUR
1,212
1,351
1,472
1,479
116
118
0
0
2,800
2,948
Working capitalrelevant liabilities 3)
Working capitalrelevant debt
External working
capital 4)
Average number of
employees per year 5)
1) in property, plant and equipment and intangible assets
2) working capital-relevant receivables comprise trade receivables, creditors with debit balances less deferred customer bonuses.
3) working capital-relevant liabilities comprise trade payables, debtors with credit balances less liabilities from suppliers' bonuses.
4) external working capital is the Company's control ratio; hence, the assets and liabilities relevant for it are disclosed. The disclosure corresponds to the
regular reporting to the management board.
5) based on the number of full-time employees, including management
F-63
Reconciliation of EBIT to EBT:
EBIT
Financial expenses
Financial income
EBT
10/1/20129/30/2013
kEUR
66,024
-43,345
47,537
70,216
1/1-9/30/
2012
kEUR
52,007
-37,212
13,547
28,342
10/1/20129/30/2013
kEUR
96,502
-287
779
-165
18
0
1/1-9/30/
2012
kEUR
77,453
-5,364
842
957
13
-36
4,568
-51
101,364
468
403
74,736
Reconciliation from EBITDA to adjusted EBITDA
EBITDA
Restructuring charges
Compensation expenses
Gains (-) / losses (+) from the disposal of assets
Extraordinary expenses from post-merger integration
Mondi/Nordenia
Other extraordinary expenses
Adjusted EBITDA
The amounts – based on the segment assets – that are reported to the management board are measured in the
same manner as in this report. These assets are attributed to the respective divisions based on the attribution of the
companies.
Reconciliation of the segment assets to the assets according to the consolidated balance sheet:
9/30/2013
kEUR
241,885
223,926
5,694
53,294
108,373
6,632
2,953
14,739
657,496
Working capital-relevant segment assets (excl. ABS)
Financial assets
Other assets
Intangible assets
Deferred tax assets
Assets accord. to balance sheet
9/30/2012
kEUR
202,720
215,925
33,068
24,788
38,344
8,380
10,715
390
534,330
The amounts – based on the segment debts – that are reported to the management board are measured in the
same manner as in this report. These debts are attributed to the respective divisions based on the attribution of the
companies.
Reconciliation of the segment debts to the debts as per the consolidated balance sheet:
9/30/2013
kEUR
70,040
280,566
264,348
4,619
6,665
Working capital-relevant segment debt
Bond
F-64
9/30/2012
kEUR
73,746
280,687
131,923
42,616
17,406
Pension provisions
Notes payable
18,524
13,437
180
658,630
19,819
5,552
909
572,658
The revenues are broken down by regions as follows:
10/1/20129/30/2013
kEUR
1/1-9/30/
2012
kEUR
Germany
Western Europe (excluding Germany)
Eastern Europe
Europe
North America *)
Asia/Pacific
Other market regions
202,331
206,833
221,311
167,036
194,793
114,959
618,435
488,828
99,850
73,367
108,576
80,696
39,552
23,550
866,413
666,441
*) EUR 82,338k (prev. year: EUR 61,636k) of the total revenues are generated in the United States, also
within the North American region.
For a further breakdown of the revenues by categories see chapter 3.
The non-current assets are broken down by regions as follows:
9/30/2013
kEUR
Germany
Eastern Europe
Europe
North America *)
Asia/Pacific
122,347
12,548
37,957
172,852
36,573
20,194
229,619
36,573
*) thereof United States
37
9/30/2012
kEUR
124,176
13,511
41,531
179,218
37,472
12,255
228,945
37,472
Related third party disclosures
Chapter 37 also includes disclosures required pursuant to Sec. 315a in context with Sec. 314 para. 1 No. 6
HGB [German Commercial Code].
Mondi Consumer Packaging is controlled by Mondi Holding Deutschland GmbH, Rosenheimer Str. 33, D83064 Raubling which holds 100 % of the shares. This company is also a 100 % subsidiary of the Mondi Group
whose parents are Mondi plc. and Mondi Ltd. The companies of Mondi Group thus are related parties.
The related parties include:
Board of Directors of the Mondi Group
Joint Chairman Mondi Group David Williams
Joint Chairman Mondi Group Frederik Phaswana
CEO Mondi Group David Hathorn
CFO Mondi Group Andrew King
CEO Europe & International Peter J. Oswald
Non-Executive Director Mondi Group Anne Quinn
Non-Executive Director Mondi Group Stephen Harris
Non-Executive Director Mondi Group Imohen Mkhize
Non-Executive Director Mondi Group John Nicholas
F-65
Executive Committee of the Mondi Group
Group Technical Director Mondi Group John Lindahl
CEO South Africa Division Ron Trail
Company Secretary of Mondi plc Carol Hunt
Company Secretary of Mondi Limited Phillip Laubscher
Supervisory Board of Mondi Consumer Packaging International AG:
CEO Europe & International Peter J. Oswald (Chairman)
CFO Mondi Group Andrew King (Deputy Chairman)
CFO Europe & International Franz Hiesinger
CFO Fibre Packaging Thomas Schaebinger
Mr. Ewald Unterste-Wilms (employee representative), merchant
Mr. Manfred Kasper (employee representative), technical clerk work preparation
Board of Directors of Mondi Consumer Packaging International AG:
Mr. Dipl.-Ingenieur Ralph Landwehr (Chairman) [degree in Engineering]
Mr. Dipl.-Wirtschaftsingenieur Andreas Picolin (Deputy Chairman) [degree in Industrial
Engineering]
Mr. Dipl.-Wirtschaftsingenieur Andreas Busacker (CFO) [degree in Industrial Engineering].
37.1
Relations with companies not consolidated in full
9/30/2013
kEUR
Total receivables due from subsidiaries not consolidated in full
Total liabilities due to subsidiaries not consolidated in full
0
0
9/30/2012
kEUR
314
0
The receivables due from OOO NORDENIA Samara, Samara/Russia were sold to Mondi Gronau GmbH
when Mondi IT Services Barleben GmbH was sold on September 30, 2013 and are now disclosed in other financial
assets.
37.2
Related party disclosures
Balances and transactions between the company and its subsidiaries that are affiliated parties were eliminated
during consolidation; no explanatory comments are provided in these notes. For details regarding transactions
between the Group and other related parties are listed below.
37.2.1 Commercial transactions
During the financial year, group companies pursued the following transactions with related parties that are
not part of the group of consolidated companies:
Sale of goods
9/30/2013
9/30/2012
kEUR
kEUR
Companies of the Mondi Group that are not
part of the consolidated group
4,555
Purchase of goods
9/30/2013
9/30/2012
kEUR
kEUR
0
2,955
0
The following balances against related parties were outstanding at the end of the reporting period:
Receivables
9/30/2013
9/30/2012
kEUR
kEUR
1,153
F-66
314
Liabilities
9/30/2013
9/30/2012
kEUR
kEUR
837
0
Goods were sold to affiliates at arm's length.
The outstanding balances are not secured and will be settled within the cash pooling of the Mondi Group.
No impairment losses were recorded for uncollectible or doubtful accounts due from related parties in the
current financial year. In the previous year, impairment losses of EUR 893k were recorded on receivables due from
OOO NORDENIA Samara, Samara/Russia of EUR 1,027k.
37.2.2 Loans from/to related parties
Mondi Finance plc. which is not part of the consolidated group provides funds to the group companies in the
form of loans and cash pooling accounts at arm's length.
Cash is offset between Mondi companies that are not part of the consolidated group, in particular those
operating companies that are part of Business Unit Consumer Packaging; this results in receivables and payables at
the balance sheet date.
The following balances against related parties from loans were outstanding at the end of the reporting period:
Receivables
9/30/2013
9/30/2012
kEUR
kEUR
73,026
Liabilities
9/30/2013
9/30/2012
kEUR
kEUR
0
159,386
0
The Group was granted loans at interest rates that are comparable to average market interest rates. Interest
income and expenses are included in the financial income and expenses (chapter 11 and 12). The loans are not
secured.
The financial result includes the following interest expenses and income:
Income
10/1/20121/1/20129/30/2013
9/30/2012
kEUR
kEUR
14
Expenses
10/1/20121/1/20129/30/2013
9/30/2012
kEUR
kEUR
0
8,077
0
37.2.3 Other receivables from/liabilities to affiliated companies and related parties
The following balances from redebiting agreements and other transactions with related parties were
outstanding at the end of the reporting period:
Accounts receivable
9/30/2013
9/30/2012
kEUR
kEUR
335
Liabilities
9/30/2013
9/30/2012
kEUR
kEUR
0
35,816
0
The operating result includes the following income and expenses:
Income
10/1/20121/1/20129/30/2013
9/30/2012
kEUR
kEUR
9,301
F-67
Expenses
10/1/20121/1/20129/30/2013
9/30/2012
kEUR
kEUR
0
9,527
0
37.3
Additional information regarding the supervisory board and directors
Remuneration to members of the Supervisory Board of Mondi Consumer Packaging International AG
The total remuneration of the Supervisory Board of Mondi Consumer Packaging International AG for the
performance of the tasks at the parent and the subsidiaries totaled EUR 145k for the reporting period (prev. year:
EUR 97k).
No advance payments or loans were granted to members of the supervisory board in the last two years.
Neither did these members of the supervisory board receive any remuneration or benefit for personal services such
as consulting or intermediation services.
Remuneration to members of the Board of Directors of Mondi Consumer Packaging International AG
10/1/20129/30/2013
kEUR
1,934
353
2,287
Salaries and other short-term benefits
Expenses for post-employment benefit plans
1/1-9/30/
2012
kEUR
1,604
358
1,962
Post-termination benefits: Provisions were recorded in the consolidated financial statements in the amount of
EUR 6,554k (prev. year: EUR 6,488k) for future pensions to former members of the Management Board.
Provisions were recorded in the consolidated financial statements in the amount of EUR 12,639k (prev. year: EUR
13,041k) for current pensions and pension commitments to former directors and their survivors. The total
remuneration of former directors and their survivors totals EUR 794k (prev. year: EUR 585k). The members of the
Board of Directors received payments of EUR 12,068k (prev. year: EUR 0k) under the stock option program. At the
balance sheet date, the provisions relating to the stock options granted to members of the Board of Directors total
EUR 1,667k (prev. year: EUR 13,735k).
No advance payments or loans were granted to of the Management Board in the 2013 financial year.
37.4
Exemption as per Sec. 264 para. 3 HGB and Sec. 264b HGB
Pursuant to Sec. 264 para. 3 HGB and Sec. 264b HGB, the consolidation of the following fully consolidated
companies are exempt from the audit obligation and the obligation to publicly disclose the financial statements and
prepare notes and, if any, a management's report:
Name
Mondi Gronau GmbH
Mondi Osterburken GmbH
Mondi Halle GmbH
Mondi Consumer Packaging Technologies GmbH
Registered office
Gronau/Westf.
Osterburken
Halle/Westf.
Gronau/Westf.
A list of the complete shareholdings of the Group, the consolidated financial statements and the Group’s
management report, as well as the supervisory board’s report are publicly disclosed in the electronic Federal
Gazette.
F-68
37.5
Consolidated companies and shareholdings
As at September 30, 2013, Mondi Consumer Packaging International AG directly or indirectly controlled the
following companies:
Share of
Name of the Company
Capital
Balance sheet date1)
Registered office
structure
Consolidated companies
Mondi Gronau GmbH
Mondi Osterburken GmbH
Mondi Halle GmbH
Mondi Jackson, Inc.
ZAO Mondi Slavnika
Mondi Consumer Packaging Ibérica S.A.
Mondi Szada Kft.
Mondi Poznan sp. z o.o.
Mondi Ipoh Sdn. Bhd.
Mondi Australia Pty. Ltd
Nordenia (China) Film Technology Co., Ltd.
9/30/2013
9/30/2013
9/30/2013
9/30/2013
2)
3)
2)
12/31/2013
12/31/2013
12/31/2013
12/31/2013
12/31/2013
12/31/2013
12/31/2013
12/31/2013
12/31/2013
2)
2)
2)
2)
2)
4)
2)
5)
2)
Greven
Gronau/Westf.
Osterburken
Halle/Westf.
Jackson/United
States
Gronau/Westf.
Pereslavl/Russia
Polinya/Spain
Szada/Hungary
Dopiewo/Poland
Ipoh/Malaysia
Australia
Taicang/China
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
97.84%
100.00%
100.00%
100.00%
100.00%
100.00%
1) In the course of the change in the financial year of Mondi Consumer Packaging International AG,
the financial year of significant subsidiaries was changed to a financial year ended on September 30.
2) Direct investment in Mondi Consumer Packaging International AG:
3) Investment in Mondi Gronau GmbH
4) 97.5 % investment of Mondi Hungary Kft. and 2.5 % investment of Mondi Consumer Packaging International AG
5)
Investment in Mondi Ipoh Sdn. Bhd., subgroup with Mondi Ipoh Sdn. Bhd.
Companies not included in consolidation
OOO Nordenia Samara – a company that was not consolidated in the previous year – was sold in the course
of the sale of Mondi IT Services Barleben GmbH on September 30, 2013.
37.6
Disclosure of pro rata consolidated companies
The Group sold its 50 % investment in the joint venture Dalian DANOR Printing Packaging Company,
Dalian/China, on September 26, 2012. In the reporting period, no companies were consolidated on a pro rata basis.
The following figures represent the 50 % investment of the Group in the assets and liabilities, revenues and
earnings/losses of the joint venture in the previous year. The figures are disclosed in the consolidated balance sheet
and the consolidated income statement of the previous year:
9/30/2013
kEUR
Assets
Non-current assets
Current assets
Liabilities
Non-current debt
Current debt
F-69
9/30/2012
kEUR
0
0
0
0
0
0
0
0
0
0
0
0
Net assets
10/1/20129/30/2013
kEUR
Income
Expenditure
Share in the obligation of the joint venture
0
0
9/30/2012
0
0
0
kEUR
2,482
3,010
528
In the previous year, there were no contingent liabilities attributable to the Group, and the joint venture did
not have any contingent liabilities itself.
37.7
Employees
The companies of Mondi CP (the joint venture was accounted for on a pro rata basis) had the following
number of employees:
10/1/20121/1-9/30/
Per capita
9/30/2013
2012
Production
Administration
Sales
Research and development
Total number of employees, excluding management
General managers
2,326
234
207
60
2,827
15
2,842
2,456
256
210
57
2,979
18
2,997
In the previous year, employees of the pro rata consolidated company (50 %) broke down as follows:
10/1/20129/30/2013
Production
Administration
Sales
1/1-9/30/
2012
0
0
0
0
53
14
5
72
The pro rata consolidated company was deconsolidated in the previous year.
For corporate controlling purposes and for the subsequent analysis of the income statement, as well as for the
explanatory comments and segment reporting purposes, the average number of employees for the period is
converted into fulltime employees:
Fulltime employees
10/1/20129/30/2013
Production
Administration
Sales
Average number of employees
General managers
2,307
218
204
56
2,785
15
2,800
F-70
1/1-9/30/
2012
2,435
237
203
56
2,930
18
2,948
38
38.1
9/30/2013
kEUR
Notes payable
38.2
0
9/30/2012
kEUR
187
Litigation
Neither Mondi Consumer Packaging International AG nor one of its group companies are involved in any
pending or foreseeable legal or arbitration proceedings that could have or have had a material impact on the
economic situation in the last two years. Provisions in the appropriate amount were recorded by the respective
companies for any financial obligations from legal or arbitration proceedings. Unless it is expected that financial
burdens result from litigation and arbitration proceedings, no provisions were recorded (cf. chapter 38.4).
38.3
Commitments from investments, including obligations from future expenditure
Obligations from non-cancellable operate lease
or leasing agreements
Thereof due within one year
Thereof due between 1 - 5 years
Thereof due within more than 5 years
Total
The commitments mainly relate to investment in tangible assets.
9/30/2013
kEUR
11,807
9/30/2012
kEUR
12,552
17,688
4,060
10,834
2,794
29,495
18,628
4,128
10,551
3,949
31,180
The minimum lease payments relate to leased buildings, plants, as well as office and plant equipment, with
the existing agreements in part containing extension clauses. In addition, a production site (land and buildings) was
refinanced by way of a sale & leaseback transaction. Expenses from operate leases were recognized in the reporting
period in profit and loss total EUR 3,714k (prev. year: EUR 3,693k).
38.4
Mondi Consumer Packaging International AG and its German subsidiaries are parties in appeal proceedings
in various legal proceedings relating to tax assessments for the periods from 2006 to 2010.
Execution was suspended with regard to taxes in the total amount of EUR 20,586k and interest of EUR
1,446k. In the event of judgments against the group, the interest on the suspended amounts would total EUR 2,426k
at September 30, 2013.
In addition, taxes of EUR 8,782k and interest of EUR 428k have been paid, but were capitalized as
receivables.
Provisions for taxes and interest and reverse effects from time differences in the deductibility of expenses in
the total amount of EUR 16,809k were recorded for the total amount of EUR 33,668k.
Neither provisions nor liabilities were recorded for the excess amount of EUR 16,859k based on the
Company's risk assessment.
38.5
Auditors' fees and services
The fees expensed for the auditor of the consolidated financial statements for the short financial year from
October 1, 2012 to September 30, 2013 that the Group is required to disclose according to Sec. 315a para. 1 HGB in
context with Sec. 314 para. 1 No. 9 HGB break down as follows:
F-71
10/1/20129/30/2013
kEUR
Audit services
Other consultancy services
Tax advisory services
Other services
39
1/1-9/30/
2012
kEUR
400
0
0
0
400
168
0
0
0
168
Subsequent events
There were no events or developments until December 2, 2013 that would have resulted in a major change in
the recognition and measurement of the individual asset and liability items as at September 30, 2013 or that would
have been of major significance for the addressees of the consolidated financial statements.
Signed in Greven on this 2nd day of December 2013
Board of Directors
Ralph Landwehr
Andreas Picolin
F-72
Andreas Busacker
changes in group equity and cash flow statement—as well as to the Group management report of Mondi Consumer
Packaging International AG, Greven. The Group management report is not reproduced in this financial report.
We have audited the consolidated financial statements prepared by Mondi Consumer Packaging International AG,
Greven, comprising the income statement, the statement of comprehensive income, the balance sheet, the statement
of cash flows, the statement of changes in equity and the notes to the consolidated financial statements, together
with the group management report for the business year from January 1 to September 30, 2012. The preparation of
the consolidated financial statements and the group management report in accordance with the IFRSs, as adopted by
the EU, and the additional requirements of German commercial law pursuant to Section 315a (1) HGB,
(“Handelsgesetzbuch”; German Commercial Code) are the responsibility of the company’s Board of Management.
We conducted our audit of the consolidated financial statements in accordance with section 317 German
Commercial Code (HGB) and the generally accepted standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the audit such that
the consolidated financial statements in accordance with (German) principles of proper accounting and in the group
management report are detected with reasonable assurance. Knowledge of the business activities and the economic
and legal environment of the Group and expectations as to possible misstatements are taken into account in the
determination of audit procedures. The effectiveness of the accounting-related internal control system and the
financial statements of those entities included in consolidation, the determination of the entities to be included in
consolidation, the accounting and consolidation principles used and significant estimates made by the Company’s
Board of Management as well as evaluating the overall presentation of the consolidated financial statements and the
group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any objections.
In our opinion and based on the findings of our audit, the consolidated financial statements comply with the IFRS as
adopted by the EU and give a true and fair view of the net assets, financial position and results of operations of the
Group in accordance with these requirements. The Group management report is consistent with the consolidated
financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the
opportunities and risks of future development.
Osnabrück, December 10, 2012
PricewaterhouseCoopers
Aktiengesellschaft
signed Dr. Gregor Solfrian
Wirtschaftsprüfer
(German Public Accountant)
F-73
signed p.p. Volker Voelcker
Wirtschaftsprüfer
Consolidated income statement
for the period from January 1 to September 30, 2012
Notes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Sales ...............................................................................................
Cost of sales ...................................................................................
Gross profit ....................................................................................
Selling costs ...................................................................................
Research and development costs....................................................
Other operating income..................................................................
Consolidated net income..............................................................
F-74
(3)
(4)
(5)
(6)
(7)
(9)
(10)
(8)
(11)
(12)
(13)
(16)
01/0109/30
2012
kEUR
666,441
557,191
109,250
34,223
15,778
4,190
4,031
6,722
-361
52,008
13,547
37,212
-23,665
28,343
15,298
13,045
0
13,045
01/0112/31
2011
kEUR
880,783
736,360
144,423
43,783
31,549
5,264
5,415
1,323
1,163
69,082
31,648
77,493
(45,845)
23,237
8,978
14,259
0
14,259
13,070
(25)
14,299
(40)
Consolidated statement of comprehensive income
for the period from January 1 to September 30, 2012
1. Consolidated net income ........................................................................
2. Result from available-for-sale financial assets
affecting net income ...............................................................................
not affecting net income .........................................................................
3. Result from cashflow-hedging
4. Actuarial gains and losses from defined benefit obligations ....................
5. Exchange differences on translating foreign operations ...........................
6. Income taxes relating to components of other comprehensive income ....
7. Other comprehensive income ................................................................
8. Total comprehensive income .................................................................
Shareholder of the parent ..........................................................................
Non-controlling shareholder .....................................................................
01/01-09/30
2012
kEUR
13,045
01/01-12/31
2011
kEUR
14,259
0
0
0
295
(5,705)
3,565
1,599
(246)
12,799
0
(295)
(1,041) *)
(1,998)
422
(2,912)
11,347
12,832
(33)
11,389
(42)
*) thereof available for sale non-current assets kEUR -269 (previous year: kEUR 0)
F-75
0
0
Notes
(17)
(18)
(19)
(20)
(21)
(21)
8,380
215,925
24,788
10,715
14
244
260,067
9,395
217,329
21,067
12,429
68
243
260,531
B.
1.
2.
3.
4.
5.
6.
7.
(22)
(23)
(24)
(24)
(13)
(25)
(14)
113,139
94,151
26,893
6,622
390
33,068
0
274,263
534,330
104,920
85,275
15,385
5,142
500
27,336
5,326
243,884
504,415
(26)
(26)
(26)
(26)
(26)
29,190
(175,088)
95,943
13,070
(1,609)
(38,494)
167
(38,327)
29,190
(178,529)
89,073
14,299
(5,360)
(51,327)
200
(51,127)
Current assets
Inventories ............................................................................................................
A. Equity
2. Capital Reserve .....................................................................................................
kEUR
12/31/2011
kEUR
Assets
(26)
B. Non-current liabilities
1. Subordinated loans ................................................................................................
2. Bonds ....................................................................................................................
4. Provisions for pensions and similar obligations ....................................................
5. Trade payables .......................................................................................................
6. Deferred tax liabilities...........................................................................................
7. Other liabilities .....................................................................................................
(27)
(27)
(27)
(29)
(27)
(31)
(32)
(27)
(27)
9,988
280,687
3,199
19,819
0
17,406
1,492
20,708
650
353,949
9,984
280,770
1,820
14,307
11
17,461
1,573
13,016
304
339,246
2. Notes payables ......................................................................................................
3. Trade payables ......................................................................................................
(27)
(27)
(27)
(27)
(32)
(27)
(27)
(14)
39,417
909
80,042
5,552
31,226
59,053
2,510
0
218,709
534,330
33,239
732
83,638
1,135
33,915
57,955
3,488
2,194
216,296
504,415
F-76
Interest paid ..............................................................................................................
Change in cash ........................................................................................................
Change in cash funds from change in consolidated companies
F-77
01/0109/30
2012
kEUR
52,008
25,446
(7,173)
(32,448)
900
(331)
319
(4,417)
(14,763)
01/0112/31
2011
kEUR
69,082
28,540
(14,449)
(35,415)
2,449
56
(1,447)
1,136
(9,458)
(604)
18,935
2,059
(26,829)
0
(495)
222
(23)
3,643
(21,423)
(1,297)
2,222
0
43,413
(37,497)
6,841
4,353
4,353
147
1,232
27,336
33,068
(4,981)
35,513
4,543
(36,497)
1
(1,014)
979
(1,267)
0
(33,255)
(1,374)
2,000
(1,220)
103,071
(112,950)
(10,473)
(8,215)
(8,215)
147
0
35,404
27,336
Subscribed
capital
Capital
reserves
Revenue
reserves
Profit
attributable to
the shareholder
of the parent
kEUR
kEUR
kEUR
kEUR
of a merger .....................
Consolidated
Other ...................................
29,190
(177,183)
29,190
(178,529)
of a merger .....................
Consolidated
Other ...................................
Status at 09/30/2012............
29,190
84,362
5,438
5,438
(5,438)
Currency
adjustment
item
Available
for sale
financial
assets
Hedging
instr. fr.
cashflow
hedges
kEUR
kEUR
kEUR
(3,176)
0
0
Equity
Equity
the shareholder non-controlling
shareholder
Taxes of the parent
Total
Group
equity
kEUR
kEUR
0
(1,346)
29,190
(726)
(1)
89,073
14,299
(1,998)
14,299
(5,174)
(178,529)
89,073
14,299
14,299
(14,299)
(5,174)
3,441
(3,441)
13,070
3,565
(175,088))
(3,989)
1
95,943
13,070
(1,609)
F-78
kEUR
kEUR
(61,369)
0
(601)
0
(61,970)
0
(1,346)
843
(503)
(42)
200
11,347
(1)
(51,127)
(295)
109
0
(295)
109
11,389
(1)
(51,327)
0
(295)
109
(51,327)
200
(51,127)
295
(109)
(33)
0)
0
12,832
1
(38,494))
12,799
1
(38,327)
0
167
(formerly NORDENIA International AG, Greven)
Notes to the financial statements as at September 30, 2012
1
General disclosures
Mondi Consumer Packaging International AG (formerly NORDENIA International AG; hereinafter referred
to as Mondi CP) is the parent of an international Group in the packaging industry that operates in the divisions
Advanced Films & Components (AFC), Consumer Flexible Packaging (CFP) and Services.
The address is: NORDENIA International AG, Huettruper Heide 88, 48268 Greven. The Company with its
registered office situated in Greven is registered in the Commercial Register at the Amtsgericht Steinfurt [Steinfurt
Local Court] under HRB 8959.
Based on the Share Purchase Agreement dated July 10, 2012, the shareholders of NORDENIA International
AG agreed to transfer the majority of the shares in NORDENIA International AG to Blitz 12-403 AG. Blitz 12-403
AG is a company of the Mondi Group. On October 1, 2012, Mondi Group confirmed that all requirements were met
and the transfer of the outstanding capital stock in the amount of 99.93 % of NORDENIA International AG at
EUR 259m was completed.
The transfer offers former NORDENIA Group the unique opportunity to obtain a leading position in the
consumer packaging industry, expand the long-term customer relations of both companies and create a platform for
the further expansion of the markets into fast-growing emerging markets under the umbrella of Mondi.
The intention was to establish a fiscal unit for income tax purposes comprising the acquirer and NORDENIA
International AG, including the subsidiaries, effective October 1, 2012. For this purpose, pursuant to a shareholders'
resolution dated September 11, 2012, the financial year was changed; it now commences on October 1 and ends on
September 30 of the following year. The current financial year is a short financial year.
Previous year's data in the consolidated income statement, the consolidated cash flow statement, the
statement of shareholders' equity and the relating disclosures in the notes are comparative only to a limited extent
due to the fact that the current financial year is a short financial year.
The consolidated financial statements of Mondi Consumer Packaging International AG (formerly
NORDENIA International AG) for the short financial year from January 1, 2012 to September 30, 2012 and the
Group Management Report on which PricewaterhouseCoopers AG Wirtschaftspruefungsgesellschaft, Osnabrueck,
rendered an independent auditor's report are publicly disclosed in the electronic Bundesanzeiger [German Federal
Gazette]. The Board of Directors of Mondi Consumer Packaging International AG (formerly NORDENIA
International AG) released these consolidated financial statements on December 10, 2012 for public disclosure.
2
Summary of most significant recognition and measurement methods
The most significant recognition and measurement methods used when compiling these consolidated
financial statements are outlined below. The methods described below were applied consistently to the reporting
periods included herein unless otherwise specified.
2.1
Basis for the compilation of the consolidated financial statements
The consolidated financial statements of Mondi CP (formerly NORDENIA) as at September 30, 2012 were
compiled based on Sec. 315a para. 1 in context with para. 1 HGB [German Commercial Code] in compliance with
the International Financial Reporting Standards (IFRS) as applied in the European Union. The consolidated financial
statements were compiled based on historical cost, except for financial assets held for sale which were measured at
market value and financial assets and financial liabilities measured through profit and loss at fair value (including
derivative financial instruments).
The compilation of consolidated financial statements in accordance with IFRS requires estimates.
Furthermore, the application of the group-wide recognition and measurement methods requires assessments by the
F-79
management. Areas with a larger degree of discretionary decision regarding measurement or with a larger degree of
complexity or areas in which assumptions and estimate have a major impact on the consolidated financial statements
are presented in Section 2.24.
income statement and the consolidated statement of comprehensive income were combined. These items are stated
separately, together with explanatory comments, in the notes to the consolidated financial statements. The
consolidated income statement is compiled using the cost-of-sales accounting method.
2.1.1 Going-concern
The Group compiled the consolidated financial statements on the basis of the going-concern principle; the
required funds are available in a sufficient amount.
2.1.2 Changes in the recognition and measurement methods and disclosures
2.1.2.1 Standards, interpretations and changes of standards and interpretations to be applied for the first time
The following standards, interpretations and changes of standards and interpretations had to be applied for
the first time in the financial year beginning January 1, 2012:
•
IFRS 7 – Financial instruments: Disclosures: Transfer of financial assets
The changes of IFRS 7 set forth extended requirements for the disclosure of such transfers of financial
assets where the transferred assets are not derecognized in full or the transferring entity remains involved
consistently. Thus, the addressees shall be enabled to more clearly understand the impact of the risks
remaining with the entity. These changes do not have any significant effect on the consolidated financial
statements.
2.1.2.2
Published but not yet to be adopted standards, interpretations and modifications
financial years that begin on or after October 1, 2012 or January 1, 2013, respectively. The Group has not adopted
these standards, interpretations and changes of standards and interpretations early:
•
IAS 1 – Statement of comprehensive income
The changes in IAS 1 relate to renaming the statement of comprehensive income into statement of profit or
loss and other comprehensive income and the reorganization of the other comprehensive income. In the
future, the other comprehensive income will be divided into two sections: one section that contains those
elements that will be "recycled" into the statement of profit or loss in future periods and one section that
comprises all those elements that will not be "recycled" in the following periods. The changes in IAS 1
shall be applied in financial years beginning on or after July 1, 2012; earlier adoption is permitted. Overall,
these new provisions enhance the transparency of the other comprehensive income. The changes will not
have any significant impact on the representation of the net worth, financial and earnings position or the
cash flows of the Group.
•
IAS 19 – Employee benefits
the recording of actuarial gains and losses in other comprehensive income. In addition, the gains from plan
assets and the interest expense on the existing pension obligations expected to result from the revised IAS
19 are replaced by a standard net interest component. In the future, the past service costs will be recorded in
full in the period in which the corresponding plan changes. In the course of the revision of IAS 19, the
requirements regarding post-termination benefits were changed. The disclosure and the required
explanatory comments have been subject to an extension. The changes in IAS 19 shall be applied in
financial years beginning on or after January 01, 2013; earlier adoption is permitted. The first-time
adoption of the revised standard will result in extended disclosures.
2.1.2.3
Published standards, interpretations and modifications not yet adopted by the EU
F-80
•
IFRS 1 – First-time adoption of the IFRS
The change affects the recognition of public loans when adopting the IFRS for the first time and the loans
are granted at an interest rate that is lower than the market interest rate. The change provides for another
exemption for the retrospective adoption of the IFRS. Accordingly, the same provisions apply as those that
applied when IAS 20 was introduced in 2008 for first-time adopters. The changes shall be applied for the
first time to all financial years that begin on or after January 01, 2013. The changes do not affect the
Group's net worth, financial and earnings position.
•
IFRS 1 – Severe hyperinflation and removal of fixed dates for first-time adopters
when presenting financial statements in accordance with IFRS when and if an entity was not able to meet
the IFRS standards for some time due to the fact that its functional currency was subject to severe
hyperinflation. As a result of the change which aims at removing the fixed dates for the transition to IFRS
the original references regarding the fixed transition date "January 1, 2004" are replaced by the wording
"date of transition to IFRS". Therefore, first-time IFRS adopters do not have to recognize and thus restate
any derecognition of transactions that occurred prior to the date of transition to IFRS.
The amendments shall be applied in financial years beginning on or after July 1, 2011; earlier adoption is
permitted. The Group is currently researching the corresponding effects of the amendments on the
presentation of the net worth, financial and earnings position, as well as the cash flows.
•
IFRS – Financial instruments
liabilities. IFRS reflects the first stage of the IASB project for the replacement of IAS 39 and discusses the
classification and measurement of financial assets and financial liabilities in accordance with IAS 39. In the
next project stages, the IASB will discuss the recognition of hedges and the impairment of financial assets.
The adoption of the amendments resulting from the first stage of IFRS 9 will affect the classification and
measurement of the Group's financial assets; however, the Group does not expect any impact on the
classification and measurement of its financial liabilities. It is the announced goal of the IASB to adopt all
three drafts in IFRS 9 after final discussion and thus replace IAS 39. In the course of another amendment to
IFRS 9 published on December 16, 2011, the date for first-time adopters was moved from January 1, 2013
to January 1, 2015; earlier adoption is permitted. Upon first-time adoption of IFRS 9, additional disclosures
in accordance with IFRS 7 – Financial instruments: Disclosures are required. The Group is currently
researching the potential impact on the presentation of its net worth, financial and earnings position, as well
as its cash flows.
•
IFRS 10 – Consolidated financial statements
IFRS 10 replaces the provisions regarding consolidated financial statements in IAS 27 Consolidated and
separate financial statements and SIC 12 – Consolidation - special-purpose entities. The standard provides a
uniform definition for the term control for all companies thus also ensuring a uniform basis for the
determination of whether there is a parent-subsidiary relationship and of the consolidation of the company.
The standard contains comprehensive user guidelines for the determination of a control relationship. The
provisions are mandatory to all financial years that begin on or after January 1, 2013. Earlier adoption is
permitted; however, it does not only require the disclosure of the early adoption but also that IFRS 10,
IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. The Group can
currently not assess conclusively which impact the first-time adoption of IFRS 10 will have if the standard
is endorsed by the EU in its current form.
•
IFRS 11 – Joint arrangements
The standard published by the IASB in May 2011 removes the current option to consolidate joint ventures
on a pro rata basis. The mandatory application of the equity method to joint ventures will be subject to the
provisions of IAS 28 Investments in associates and joint ventures in the future. The standard applies to all
financial years beginning on or after January 1, 2013. Earlier adoption is permitted; however, it does not
only require the disclosure of the early adoption but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011)
and IAS 28 (2011) together are also adopted early. The Group can currently not assess conclusively which
impact the first-time adoption of IFRS 11 will have if the standard is endorsed by the EU in its current
form.
F-81
•
IFRS 12 – Disclosure of interests in other entities
Consolidated and separate financial statements, IAS 28 Investments in associates, IAS 31 Investments in
joint ventures and SIC-12 Consolidation - special-purpose entities. Hence, the standard governs the
disclosures of all types of investments in other entities, including joint arrangements, associates, structured
entities and units outside the balance sheet. IFRS 12 shall be applied to financial years beginning on or
after January 1, 2013; earlier adoption is permitted. The Group can currently not assess conclusively which
impact the first-time adoption of IFRS 12 will have if the standard is endorsed by the EU in its current
form.
•
IFRS 10, IFRS 11 and IFRS 12–Transition guidance amendments
In the course of the amendment of the transition provisions in IFRS 10, 11 and 12, exemptions are granted
by limiting the adjusted comparative figures to be disclosed to the closest comparative previous period
upon first-time adoption and eliminating the obligation to disclose comparative information regarding nonconsolidated structured entities when adopting IFRS 12 for the first time. The changes are mandatory to all
financial years that begin on or after January 1, 2013.
•
IFRS 10, IFRS 12 and IAS 27 – Investment entities amendments
financial statements, but measure the investments held for investment at fair value. Unlike as proposed in
the Exposure Draft of 2001, the definition of an investment entity is not less restrictive. The changes shall
be applied to all financial years that begin on or after January 1, 2014. Earlier adoption is permitted. The
changes do not have any impact on the Group since the definition criteria for investment entities are not
met.
•
IFRS 13 – Fair value measurement
IFRS 13 provides cross-standard uniform measurement guidelines for fair value measurement by defining
and specifying which methods may be used for the determination of the fair value. In addition, the
disclosures of assets and debts measured at fair value are expanded. IFRS 13 itself does not contain any
provisions as to when fair value measurement should be used. The standard shall be applied prospectively
to financial years beginning on or after January 1, 2013; earlier adoption is permitted. When adopting the
standard for the first time, no comparative figures are required. The Group is currently assuming that the
adoption of the new standard, if endorsed by the EU in its current form, will result in extended disclosure
requirements.
•
IAS 12 – Deferred taxes: Recovery of underlying assets
deviate from the basic provision of IAS 12.51–according to which the deferred taxes must be measured in
the amount of the expected tax consequence relating to the expected manner of recovery of the underlying
asset (or debt)–when measuring investment properties at fair value. In the future, deferred tax assets and
liabilities must be measured based on the tax consequences of a sale unless the accounting party provides
clear evidence that the carrying amount of the asset will be realized in full as a result of the use. This new
provision is primarily of significance in countries in which the use and the sale of such assets are taxes in a
different manner. The exemption provision also applies to investment properties recognized for the first
time in the course of a business acquisition when and if they shall also be measured at fair value in
subsequent recognition. The amendment shall be applied to financial years beginning on or after January 1,
2012; earlier adoption is permitted. The European Union has not yet endorsed the revisions. The Group is
currently researching the corresponding effects of the amendments on the presentation of the net worth,
financial and earnings position, as well as the cash flows.
•
IAS 27 – Separate financial statements
only provisions regarding the recognition and disclosures of subsidiaries, joint ventures and associates that
are relevant to the separate financial statements compiled in accordance with the IFRS. The standard is
mandatory to all financial years beginning on or after January 1, 2013. Earlier adoption is permitted;
F-82
however, it does not only require the disclosure of the early adoption but also that IFRS 10, IFRS 11, IFRS
12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. The Group is currently researching
the impact of the amendments to IAS 27.
•
IAS 28 – Investments in associates and joint ventures
expand the scope of the current standard to the recognition of joint ventures. According to the revised IAS
28, an entity must recognize an investment or part of an investment in an associate or a joint venture as held
for sale when and if the applicable criteria are met. The remaining portion of the investment in an associate
or joint venture that is not classified as held for sale must be recognized using the equity method until its
disposal. The standard is mandatory to all financial years beginning on or after January 1, 2013. Earlier
IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) together are also adopted early. The Group
is currently researching the impact of the amendments to IAS 28.
•
IAS 32 and IFRS 7 – Offsetting financial assets and (liabilities)
The provisions regarding the offsetting of financial assets and financial liabilities were revised by the
IASB. The results were published on December 16, 2011 in the form of a revised IFRS 7 Financial
instruments: Disclosures and IAS 32 Financial instruments: Presentation.
The requirements for the offsetting thus far codified in IAS 32 were basically continued and were merely
specified by additional guidance. The supplementary guidelines shall be applied retrospectively to all
financial years that begin on or after January 1, 2014. However, the mandatory disclosures introduced by
IFRS 7 with regard to certain offsetting agreements were added. In addition to a description of the
offsetting rights, in particular the following quantitative disclosures are required:
-
Scope of offsetting;
Gross amount of the respective financial assets and financial liabilities prior to offsetting;
Gross amount of the respective financial assets and financial liabilities after offsetting;
Amount of those financial assets and financial liabilities that are subject to offsetting
arrangements without them being offset in the balance sheet;
Fair value of financial instruments received or granted as financial collaterals;
Net amount of the respective financial assets and financial liabilities based on an offsetting
under the offsetting arrangements not taken into account, as well as collaterals.
The amendments to IFRIC 7 shall be applied retrospectively to financial years that begin on or after
January 1, 2013. The Group is currently researching the potential impact on the presentation of its net
•
On May 17, 2012, the IASB adopted the annual improvements of the IFRS. The following standards were
revised:
•
IFRS 1 First-time adoption of the IFRS: Admissibility of repeated application of IFRS 1: Disclosure of
comparative information of previous year with respect to borrowing costs relating to qualifying assets
whose capitalization date is prior to the date of the transition to IFRS
•
IAS 1 Presentation of the financial statements: Clarification regarding the requirement to disclose
•
IAS 16 Property, plant and equipment: Clarification of the classification of maintenance and servicing
equipment
•
IAS 32 Financial instruments: Disclosure: Recognition of income tax effects of distributions to the
owner of an equity instrument must be in compliance with IAS 12 Income taxes
F-83
•
IAS 34 Interim reports: Consistency of the disclosures with regard to the total segment assets in order
to improve consistency with IFRS 8 Business segments
•
IFRIC 20 Removal costs in the production phase of a cast on day mine
phase in a cast on day mine. The interpretation applies for the first time to all financial years that begin on
or after January 1, 2013. The first-time adoption does not have any impact on the Group.
These standards and interpretations will be applied subject to the adoption by the EU at the date at which
their application is mandatory for the first time.
2.2
a)
Subsidiaries
Subsidiaries are all companies, including special-purpose entities whose financial and business policies the
Group controls. This is usually accompanied by voting rights of more than 50 %. When assessing whether the Group
controls the policies the existence and impact of potential voting rights that are actually exercisable or convertible
are taken into account. Subsidiaries are consolidated as of the date at which the Group assumes control (full
consolidation). They are deconsolidated at the date at which control expires.
Acquired subsidiaries are recognized using the acquisition method. The cost of the acquisition equal the fair
value of the transferred assets, the issued equity instruments and the debt incurred or transferred at the transaction
date. Furthermore, they include the fair value of any recognized assets or debts resulting from a conditional
agreement on the consideration. Acquisition-related costs are expenses when occurred. Assets, debt and contingent
liabilities identifiable in the course of a business combination are measured at fair value applicable at the acquisition
date when initially consolidating the items.
The Group decides on a case-to-case basis for each business acquisition whether the minority interests in the
acquired company are recorded at fair value or based on the pro rata share in the net assets of the acquired company.
Goodwill is the value resulting from the excess of the acquisition cost, the amount of the minority interests in
the acquired company and the fair value of any previously held equity interests at the acquisition date over the
Group's share in the net assets measured at fair value. If the cost are lower than the net assets of the acquired
subsidiary measured at fair value, the difference is directly recorded in profit or loss (cf. chapter 2.10).
Intercompany transactions, balances and unrealized gains and losses from intercompany transactions are
eliminated. The recognition and measurement methods of subsidiaries were changed as needed in order to ensure
group-wide standardized recognition.
b)
Transactions with non-controlling interests without the loss of control (minority shareholders)
Transactions with non-controlling interests are treated like transactions with equity owners of the Group. Any
difference between the consideration paid and the corresponding portion of the carrying amount of the net assets of
the subsidiary resulting from the acquisition of non-controlling interests is recorded in equity. Gains and losses
resulting from the sale of non-controlling interests are also recorded in equity.
c)
Sale of subsidiaries
If the Group either loses control or the major influence on a company, the remaining portion is revalued at
fair value and the resulting difference is recorded in profit or loss. The fair value is the fair value of the initially
recognized associated company, joint venture or a financial asset. Furthermore, all amounts related to this company
that are reported in other comprehensive income are recognized in such manner as would be required if the parent
F-84
would have directly sold the related assets and debts. This means that any gain or loss previously recorded in other
comprehensive income is reclassified from equity to profit or loss.
If the percentage share in an associated company reduces, but the company remains an associated company,
only the pro rata amount of the gains and losses previously recorded in other comprehensive income is reclassified.
d)
Joint ventures
The Group's investments in a joint venture are consolidated on a pro rata basis. The Group aggregates on an
item-by-item basis the pro rata share in the income and expenses, assets and debts, as well as the cash flows with
similar items of the Group. Gains and losses from the sale of the Group's assets in a joint venture are recorded in the
amount of the portion attributable to its shareholders. The Group's shares in the gains and losses of the joint venture
resulting from the acquisition of assets by the Group are not recorded by the Group until they are resold to a
company that is not part of the Group. Losses from such transactions, however, are realized immediately when and
if the loss is deemed a clear indication that the net realizable value of current assets is reduced or impaired.
Consolidated group
The Group consists of the following entities:
Mondi Consumer Packaging
International AG (formerly
Fully consolidated subsidiaries
Thereof Germany
Thereof other countries
Pro rata consolidated companies
Thereof Germany
Thereof other countries
Balance on
1/1/2012
1
Merger
-
Additions
-
Disposals
-
Balance on
9/30/2012
1
-1
-1
1
1
-
-2
-1
-1
-1
-1
17
9
8
0
0
0
19
11
8
1
0
1
-
Nordenia (China) Film Technology Co., Ltd., Taicang/China – which was consolidated for the first time as at
January 1, 2012 – was recorded as an addition.
The disposal due to merger relates to Empac Beteiligungs GmbH which merged onto Mondi Gronau GmbH
(formerly NORDENIA Deutschland Gronau GmbH) on July 12, 2012 effective January 1, 2012.
The disposal of German companies relates to NORDENIA International Beteiligungs GmbH (formerly
NORDENIA Deutschland Emsdetten GmbH) which was sold on September 26, 2012.
The disposal of foreign companies relates to Nordenia Polska Starogard GD sp. z o. o. which was sold on
March 30, 2012.
The disposal of foreign pro rata consolidated companies relates to Dalian DANOR Printing Packaging
Company which was sold on September 26, 2012 as a joint venture of NORDENIA International Beteiligungs
GmbH (formerly NORDENIA Deutschland Emsdetten GmbH).
2.3
Segment reporting
Segment reporting is in such manner that it corresponds to the internal reporting to the main decision-maker.
The main decision-maker is responsible for making decisions regarding the allocation of resources to the business
segments and the verification of their efficiency. The main decision-maker is deemed to be the joint board of
directors of NORDENIA International AG.
2.4
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d)
Functional currency and reporting currency
The items contained in the financial statements of each company of the Group are measured based on the
currency of the primary economic environment in which the entity operates (functional currency). The consolidated
financial statements are compiled in EUR which is both the functional and the reporting currency of Mondi CP.
Unless otherwise indicated, all amounts are stated in thousands of EUR (kEUR).
e)
Foreign currency transactions are translated into the functional currency at the exchange rates applicable at
the transaction date or the measurement date in case of revaluation. Gains and losses resulting from the performance
of such transactions and the translation of foreign currency monetary assets and debts at the rate prevailing at the
balance sheet date are recorded in profit or loss unless they are recorded as qualified cash flow hedges in equity.
Foreign currency gains and losses resulting from the translation of cash and cash equivalents, as well as
financial debt are, to the extent that they are attributable to the operating business, recorded in the item exchange
differences or, to the extent that they result from financial transactions, in the items financial expenses or income.
as held for sale shall be divided into translation differences from the changes in amortized cost that are recorded
through profit or loss and other changes in the carrying amount that are recorded outside profit or loss.
Exchange differences of non-monetary items whose fair value changes and the change is recorded in profit or
loss (e.g. equity instruments measured at fair value through profit or loss) shall be disclosed as a portion of the profit
or loss from the measurement at fair value through profit or loss. On the other hand, exchange differences of nonmonetary items whose fair value changes and the change is recorded in equity (e.g. equity instruments classified as
held for sale) are recorded in the exchange clearing item in equity.
f) Group companies
The earnings/losses and balance sheet items of all group companies using a functional currency other than
the EUR are translated into EUR:
-
Assets and liabilities are translated at the rate prevailing at the balance sheet date;
income and expenses are translated at the weighted annual average rate for each statement of profit and
loss;
All exchange differences resulting from such translation are recorded in a separate item in equity
(exchange clearing item).
In the course of consolidation, exchange differences resulting from the translation of net investments in
economically independent subdivisions and from financial debts are recorded in equity outside profit or loss. If a
foreign business operation is sold, exchange differences thus far recorded in equity outside profit or loss are
recorded as part of the gain or loss from the disposal through profit or loss.
Goodwill and adjustments of the fair value resulting from the acquisition of a foreign company are classified
as assets and debts of the foreign company and translated at the rate prevailing at the balance sheet date.
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The exchange rates of the major currencies within the Group developed as follows:
China
Malaysia
Poland
Russia
Hungary
U.S.A.
Middle rate
at the balance sheet date
9/30/2012
12/31/2011
8.1261
8.1435
3.9596
4.1010
4.1038
4.4580
40.1400
41.6868
284.89
312.8200
1.2930
1.2932
ISO
code
CNY
MYR
PLN
RUB
HUF
USD
2.5
Revenue recognition
The revenues comprise the fair value of the consideration received or to be received for the sale of goods and
services in the course of ordinary business operations. Revenues are reported net of sales tax, less returned sales,
discounts and price deductions, as well as after the elimination of intercompany sales.
The Group produces and sells flexible packaging, technical films and product components. Revenues from
the sale of products are generated upon transfer of ownership and risks to the customer, if the consideration is
stipulated or can be determined, and it is probable that the corresponding receivable will be settled and the costs
incurred in relation with the sale can be determined reliably.
2.6
Cost of sales
The cost of sales comprise cost of sold products and services, as well as costs of funds of sold merchandise.
In addition to direct cost of material and labor, they also include indirect overhead costs, including depreciation on
production plants and certain items of property, plant and equipment, as well as impairment of inventories.
2.7
Expenses for research and development
Research costs and non-recognizable development costs are directly recorded in profit or loss when they
occur. When and if the criteria of IAS 38 are satisfied, development costs are capitalized. In this respect, see Section
2.10b) and d).
2.8
Financial result
The financial result comprises interest expenses from liabilities that is determined using the effective interest
method, dividends, exchange gains and losses from financial transactions, interest income from receivables, and
gains and losses from financial instruments that are directly recorded in profit or loss. In addition, the interest
expenses from pension provisions and the measurement costs from embedded derivatives in the interest expense are
reported.
The interest income is directly recorded in profit using the effective interest method. Dividends are directly
recorded in profit, if a resolution regarding the distribution was passed. The interest portions of finance leases are
determined using the effective interest method.
2.9
Current and deferred taxes
The tax expenditure of the period comprises current and deferred assets. Taxes are recorded in profit and loss
unless they relate to items that are directly recorded in equity or the other comprehensive income. In that case, the
taxes are also recorded in equity or in other comprehensive income.
The current tax expenditure is determined in accordance with the tax laws of those countries in which the
subsidiaries and associated companies operate and generate taxable income and that are applicable at the balance
sheet date or will become effective shortly thereafter. The management reviews tax declarations on a regular basis,
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in particular with regard to aspects that are subject to discretionary decisions and, if appropriate, records provisions
based on the amounts that are expected to be paid to the fiscal authorities.
Deferred taxes are recorded on all temporary differences between the tax base of the assets / liabilities and
their carrying amounts in the financial statements in accordance with IFRS (so-called liability method). However, if,
in the course of a transaction that is not deemed a business combination, deferred taxes result from initial
recognition of an asset or a liability that does neither have an impact on the profits or loss for accounting purposes
nor on the profits or losses for tax purposes at the date of the transaction, no deferred taxes are recorded initially or
subsequently. Deferred taxes are measured using the tax rates (and tax laws) applicable at the balance sheet date or
that have basically been adopted by the legislators and that are expected to be applicable at the date at which the
deferred tax asset is realized or the deferred tax liability is settled.
Deferred tax assets are only recorded to the extent that it is probable that taxable income will be available
against which the temporary difference can be used.
Deferred tax liabilities that result from temporary differences relating to investments in subsidiaries and
associated companies are recorded unless the date of the reversal of the temporary differences can be determined by
the Group and it is probable that the temporary differences will not be reversed in the foreseeable future due to this
effect.
Deferred tax assets are offset against deferred tax liabilities if the company is legally entitled to offset any
actual claim for tax refund with the actual tax liability and they relate to taxes on income and earnings that are
imposed by the same fiscal authority or different tax subjects that intend to achieve a settlement on net basis.
2.10
Intangible assets
e) Goodwill
Goodwill is the excess of the acquisition costs in a business acquisition over the fair value of the Group's
share in the net assets of the acquired company on the acquisition date. Goodwill resulting from a business
acquisition is recorded in intangible assets. The recognized goodwill is subject to an annual impairment test and is
measured at its historical cost less accumulated impairment losses. Impairment losses may be reversed. Gains and
losses from the sale of a company include the carrying amount of the goodwill attributable to the transferred
company.
Goodwill is allocated to cash-generating units for impairment test purposes. Goodwill is allocated to those
cash-generating units or groups of cash-generating units of the identified business segments that are expected to
benefit from the combination in the course of which the goodwill occurred.
f)
Software and software development costs
Acquired software licenses are recognized at the cost that are incurred upon acquisition and for the
preparation of the software for its intended use. Those costs are written off over an estimated useful life of 3-5 years
using the straight-line method.
Software development costs that are directly attributable to the development and check of identifiable
individual software products within the control of the Group are recorded as intangible assets when and if the
following criteria are satisfied:
•
•
•
•
•
•
The completion of the software product is technically feasible.
The management intends to complete the software product and use it or sell it.
The Group is able to use or sell the software product.
There is evidence that the software product will most likely generate future economic benefits.
Adequate technical, financial and other resources are available in order to complete the development and be
able to use or sell the software product.
The expenses attributable to the software product during the development process can be measured reliably.
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The costs directly attributable to the software product comprise personnel expenses relating to the employees
involved in the development, as well as an appropriate portion of the respective overhead costs.
Capitalized development costs for software are written off over their estimated useful life (no more than 5
years) using the straight-line method.
g) Concessions and industrial property rights
Concessions and industrial property rights are recorded at their historical cost. Concessions and industrial property
rights acquired in the course of a business acquisition are measured at the fair value applicable at the acquisition
date. Concessions and industrial property rights have definite useful lives (according to the respective agreement)
and are measured at their cost less accumulated depreciation. Depreciation is recorded over the estimated useful life
of the respective agreement using the straight-line method.
h) Development costs
Development costs that are directly attributable to the development and check of identifiable individual products and
processes within the control of the Group are recorded as intangible assets when and if the following criteria are
satisfied:
•
•
•
•
•
The completion of the products and processes is technically feasible.
The management intends to complete the products and processes and use them or sell them.
The Group is able to use or sell the products and processes.
There is evidence that the products and processes will most likely generate future economic benefits.
Adequate technical, financial and other resources are available in order to complete the development and be
able to use or sell the products and processes.
• The expenses attributable to the products and processes during the development process can be measured
reliably.
The costs directly attributable to the product and processes comprise personnel expenses relating to the
employees involved in the development, as well as an appropriate portion of the respective overhead costs.
Capitalized development costs are written off over their estimated useful life (no more than 5 years) using the
straight-line method.
2.11
Property, plant and equipment is measured at cost less depreciation based on the estimated useful life, and
impairment losses. The costs of internally generated assets comprise all costs directly attributable to the production
The cost for the generation of qualified assets, i.e. assets which require a significant period of time (at least 6
months) to be ready for the intended purpose, comprise capitalized borrowing costs to the extent that they meet the
criteria of IAS 23.
but are reported separately and reversed through profit and loss over the estimated useful life of the subsidized item
of property, plant and equipment.
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Depreciation on property, plant and equipment is recorded using the straight-line method and reported in the
function costs. The useful life and depreciation methods are reviewed annually and adjusted to the current situation
and circumstances.
Buildings
10-50 years
2-10 years
3-10 years
Items of property, plant and equipment are written off on a prorated basis in the year in which they are
acquired.
If special events or market trends indicate that an asset is impaired, an impairment test is performed to assess
the carrying amount of the asset (including capitalized development costs).
In this impairment test the carrying amount of the asset and the recoverable value are compared and the
higher of the fair value less costs to sell and the value in use. When determining the recoverable amount based on
the value in use, future cash flows are discounted at a risk-based interest rate. When determining the future cash
flows, the current and future earnings as well as business segment-related, technological, economic and general
trends are taken into account. If the net carrying amount of assets exceeds the net realizable amount, impairment
losses are recorded.
cost.
accounting of lease agreements (Section 28).
2.12
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial instruments are in particular cash and cash equivalents, trade
accounts receivable and other loans and receivables granted, financial investments held to maturity and original and
derivative financial assets held for trading. Financial obligations usually result in a repayment claim in cash or in
another financial asset. This includes in particular borrowings and other certified liabilities, trade accounts payable,
accounts due to banks, liabilities from finance lease agreements, borrower’s note loans, and derivative financial
liabilities.
Financial assets are recognized as soon as Mondi CP becomes party to an agreement regarding a financial
instrument. In case of standard market acquisitions and disposals, however, the performance date is relevant for
initial recognition and disposal in the accounts.
Classification
Financial assets are divided into the following categories: assets measured at fair value through profit or loss,
loans and receivables, and financial assets available for sale. The classification depends on the respective purpose
for which the financial assets were acquired. The management decides on the classification of the financial assets
upon initial recognition.
(a)
Assets measured at fair value through profit or loss
Assets measured at fair value through profit or loss are financial assets held for trading. A financial asset is
attributed to this category when and if it was basically acquired with the intention of a disposal within a short period
of time. Derivatives also fall into this category when and if they are not classified as hedges. Assets in this category
are reported as current assets.
(b)
Loans and receivables do not constitute derivative financial assets with fixed or non-determinable payments
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which do not constitute quotes market prices. They are deemed current assets unless they fall within more than 12
months after the balance sheet date. The latter are reported as non-current assets. The loans and receivables of the
Group are disclosed under "Trade receivables and other receivables" and "Cash and cash equivalents" in the balance
sheet.
(c)
Financial assets available for sale are non-derivative financial assets that were attributed neither to that
category nor to any of the other categories described. They are deemed non-current assets when and if the
management does not intend to sell them within twelve months after the balance sheet date and the asset does not
fall due within this period of time.
Financial assets that are not classified as "at fair value through profit or loss" are initially recognized at their
fair value plus transaction costs. Financial assets that are attributed to this category are initially recorded at their fair
value; the corresponding transaction costs are expensed. Financial assets are derecognized when and if the right for
payment for the financial assets has expired or was transferred and the Group has transferred basically all risks and
rewards inherent in the title of ownership. Financial assets available for sale and assets measured at fair value
through profit or loss are measured at fair value when subsequently recognized. Loans and receivables are recorded
at amortized cost using the effective interest method.
Gains or losses from financial assets measured at fair value through profit or loss are disclosed as financial
income or financial expenses, respectively, in the statement of profit and loss of the period in which they occurred.
as available for sale shall be divided into translation differences from the changes in amortized cost that are recorded
through profit or loss and other changes in the carrying amount that are recorded outside profit or loss. The
translation differences from monetary securities are recorded through profit or loss; the translation differences from
non-monetary securities are recorded in other comprehensive income. Changes in the fair value of both monetary
and non-monetary securities classified as available for sale are recorded in other comprehensive income.
If securities classified as available for sale are sold or impaired, the accumulated changes in the fair value
recorded previously in equity are recorded as financial income or expenses through profit or loss.
Interest income resulting from the measurement of securities available for sale using the effective interest method is
disclosed as financial income in the statement of profit and loss.
Financial assets and liabilities are not offset and recorded in the net amount in the balance sheet unless there
is a legal claim for them and the Group intends to settle them on a net basis or settle the respective liability upon
utilization of the corresponding asset.
Impairment of financial instruments
a) Assets measured at amortized cost
an impairment of a financial asset or a group of financial assets. A financial asset or a group of financial assets is
only impaired when and if due to one or several events that occurred after initial recognition of the asset ("incident")
there is an objective indication that the asset is impaired and this incident (or incidents) have a reliably determinable
impact on the expected future cash flows from the financial asset or the group of financial assets.
The criteria based on which the Group assesses whether there is an objective indication of impairment
include in particular:
•
•
•
significant financial difficulty of the issuer or borrower;
contractual violation such as failure to perform or non-payment of interests or capital amounts;
the Group grants this debtor–for economic or legal reasons due to the financial difficulties of this
debtor–a concession that the issuer would otherwise not consider;
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•
•
•
it is highly likely that the borrower will declare insolvency or is subject to other financial
reorganization;
the disappearance of an active market for that financial asset because of financial difficulties; or
apparent facts that indicate that the estimated future cash flows have drastically decreased since
the acquisition of the financial asset despite the fact that the decrease cannot yet be identified for
the individual financial asset; this includes:
(i)
unfavorable changes in the solvency of the borrower in the portfolio;
(ii)
domestic or regional economic circumstances that correspond to the default with respect
to the assets in the portfolio.
The Group first assesses whether there is an objective indication for the impairment.
The loss is determined as the difference between the carrying amount of the asset and the present value of the
expected future cash flows (except for future, not yet incurred credit losses), discounted at the original effective
interest rate of the financial asset. The carrying amount of the asset is reduced and the loss is recorded through profit
and loss. If a loan, a receivable or a financial investment to be held to maturity is subject to a variable interest rate,
the discount rate used for the measurement of the impairment loss equals the current effective interest rate as set
forth in the agreement. For practical reasons, the Group measures the impairment of a financial asset recognized at
amortized cost based on the fair value of the financial asset using an observable market value.
If the amount of the impairment loss reduces in a following period and this reduction results from
circumstances that occurred after initial recognition of the impairment loss (e.g. better rating), the impairment loss is
reversed and the respective amount is recorded in profit or loss.
b) Assets classified as available for sale
an impairment of a financial asset or a group of financial assets. In case of debt instruments, the criteria under (a) are
used as a basis. In case of equity instruments classified as available for sale a major or consistent decrease of the fair
value below the amortized cost of these equity instruments can be deemed an indication for the impairment of the
equity instrument. If such indication exists with respect to assets available for sale, the accumulated loss–being the
difference between the cost and the current fair value, less impairment losses recorded prior in respect of the
financial asset in question–is reversed in equity and recorded in profit or loss. Impairment losses of equity
instruments once recorded in profit or loss are not reversed through profit or loss. If, in a following period, the fair
value of a debt instrument that was classified as available for sale increases and this increase results from
circumstances that occurred after initial recognition of the impairment losses the impairment losses are reversed and
the respective amount is recorded in profit and loss.
2.13
Financial assets
The financial instruments available for sale are investments in non-consolidated affiliated companies and
investments that do not exceed a 20 % share. They are recognized at cost due to the fact that the fair values are not
available and other admissible measurement methods do not provide reliable results either. The respective financial
assets are recorded as financial assets held for sale.
2.14
Trade receivables
Trade receivables are due and payable amounts for goods or services sold in the ordinary business operation.
Receivables that fall due within one year are classified as current assets, while receivables that fall due within more
than one year are classified as non-current receivables.
Trade receivables are initially recorded at fair value and fall under the category "Loans and receivables" (cf.
chapter 30.1). The trade receivables are subsequently recorded at amortized cost using the effective interest method
and less impairment losses.
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2.15
Cash and cash equivalents comprise cash, demand deposits, other current highly liquid financial assets with
an original term of no more than three months and current accounts. In the balance sheet, utilized current accounts
are disclosed as "liabilities due to banks" under current financial debt. The cash and cash equivalents are capitalized
and measured at their nominal value.
2.16
Derivative financial instruments are measured upon initial recognition at their fair value that is attributed to
them at the closing date of the agreement. They are recorded as "financial assets measured at fair value through
profit or loss" (cf. chapter 30.1). Subsequently, they are also recognized at the fair value applicable at the respective
balance sheet date. The method used for the recording of gains and losses depends on whether the derivative
financial instrument was designated as a hedge instruments and, if so, on the type of the hedged item. The Group
designates certain derivative financial instruments either as hedges against certain risks of fluctuating cash flows
inherent in a recognized asset or a recognized liability or an expected transaction that is highly likely to occur in the
future (cash flow hedge).
Upon completion of the transaction, the Group documents the hedge relation between the hedge instrument
and the underlying transaction, the goal of the risk management and the underlying strategy upon closing of the
hedge transactions. Furthermore, the Group documents both at the commencement date of the hedge relation and
consistently after that, the assessment of whether the derivatives used in the hedge relation compensate the changes
in the fair value or the cash flows from the underlying transactions in a highly efficient manner.
The fair values of the various derivative financial instruments that are used for hedge purposes are outlined in
chapter 34. Changes in the reserve for cash flow hedges are described in chapter 26.5. The entire fair value of the
derivative instruments designated as hedge instruments is reported as a non-current asset or non-current liability
when and if the residual maturity of the underlying hedged transaction exceeds a period of twelve months after the
balance sheet date or as a current asset or liability if the maturity is shorter. Derivative financial instruments held for
trading are classified as current assets or liabilities.
Cash flow hedge
The effective portion of the changes in the fair value of derivatives that are held for the purpose of hedging
the cash flow and that can be classified as cash flow hedges are recorded in other comprehensive income. The
ineffective portion of such changes, on the other hand, is recorded directly under other financial expenses or income
in profit or loss.
Amounts recognized in equity are reclassified in profit or loss and either expensed or recorded as income in
the period in which the hedged underlying transaction affects profit or loss (e.g. at the date at which the hedged
future sale occurs).
If a hedge transaction expires, is sold or does no longer meet the criteria for recognition as a hedge
transaction, the gain or loss thus far accumulated in equity remains in equity and is not recorded in profit or loss
until the originally hedged future transaction occurs. If the future transaction is no longer expected to occur, the
gains or losses accumulated in equity are recorded directly in profit or loss.
2.17
Inventories
production overhead costs as well as depreciation of items of property, plant and equipment and intangible assets
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2.18
IAS 19 Employee benefits.
In this method not only known pensions and accrued commitments are accounted for but also estimated
future increases in salaries and pensions. The computation of the material pension obligations is based on actuarial
expert reports compiled by an independent expert, taking into account biometric calculation bases. Actuarial gains
and losses are directly offset against equity (OCI method).
interest portion, are attributed to the costs in the individual functions. The discounting of the pension obligations and
2.19
According to IAS 37 Provisions, contingent liabilities and contingent assets, other provisions are recognized
to the extent that the company has a present obligation as a result of a past event and it is probable that an outflow of
resources embodying economic benefits will occur and that a reliable estimate can be made of the amount of the
obligation.
Provisions are measured at the present value of the expected expenditure, with a pre-tax interest rate being
used as a basis that takes into account the current market expectations with regard to the interest effect and the
obligations resulting from specific risks. Increases in provisions resulting from mere discounting are expensed as
interest expenses.
Demolition obligations are recorded as provisions at the time at which they occur at the discounted value of
the obligation and, at the same time, capitalized in the corresponding amount.
2.20
Financial debt and liabilities
The financial debt and liabilities are measured at fair value upon initial recognition; as for financial debt, they
are measured less transaction costs. All financial debt and liabilities are attributed to "Financial debt - measured at
amortized cost".
In the following periods, all financial debt and liabilities are measured at amortized cost. Differences between
the payment amount less transaction costs and the repayment amount are recorded in profit and loss using the
effective interest method.
For this purpose, the trade payables are payment obligations for goods and services acquired in the ordinary
business operations. The liabilities are classified as current debt when and if the payment obligation is due within
one year. Otherwise, they are recognized as non-current debt.
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2.21
Leases
Leases are classified as finance leases if as a result of the terms of the lease basically all risks and rewards
companies of the Group enter into lease agreements as the lessee.
Assets held under finance leases are recorded at the lower of fair value of the asset or the present value of the
respective minimum lease payments as assets of the Group at the beginning of the lease. The corresponding liability
due to lessor shall be recognized in the balance sheet as another liability from finance lease. The lease payments are
attributed on a prorated basis to the financial expenses and the decrease of the lease obligation resulting in a constant
interest rate on the remaining balance of the obligation for each reporting period. The financial expenditure is
recorded directly in profit or loss unless it can be directly attributed to a qualified asset. In those cases, the costs are
recognized in accordance with the general group guidelines for credit costs and IAS 23. The property, plant and
equipment held under a finance lease is written off over the shorter of the two following periods: the estimated
Lease payments resulting from operate leases are recognized directly in profit or loss over the term of the
lease using the straight-line method.
2.22
Non-current assets and disposal groups held for sale and discontinued operations
Non-current assets and disposal groups are reported separately as “held for sale” in the balance sheet, if they
can be sold in their current condition and the sale is probable. When classifying the assets as „held for sale“, they are
recognized at their fair value less costs to sell in the event their fair value is lower than their carrying amount.
Depending on their classification, the liabilities on the liabilities side directly attributable to these non-current assets
and disposal groups are reported as "held for sale". Discontinued operations are reported separately when the
operation is an independent transaction that represents a separate major line of business or geographical area of
operations, is offered for sale and the Group management has initiated an official sales process.
2.23
Stock options
Stock options involving compensation in the form of equity instruments are measured at fair value at the date
at which they are granted. This value is recorded as personnel expenses over the qualifying period. Terms and
conditions for the exercising of the options that are independent from the market are taken into account in the
assumptions regarding the number of options which are expected to be exercised. The obligations from share-based
remuneration transactions with cash compensation (virtual stock options) are recorded as provisions and measured at
the fair value at the balance sheet date, with the expenses being recorded over the qualifying period. The fair value
for stock options and virtual stock options is determined based on DCF measurement taking into account current
findings. The fair value was determined based on the terms and conditions stipulated in the company acquisition
agreement entered into with the Mondi Group.
2.24
Critical estimates for the recognition, measurement, assumptions in the measurement
The estimates and assumptions that involve a significant risk of a major adjustment of the carrying amounts
of assets and debt within the next financial year are discussed below.
Determination of necessity and measurement of impairment losses on intangible assets, items of
property, plant and equipment, as well as inventories (impairment test) and financial assets,
Recognition and measurement of pension obligations, anniversary obligations and provisions for stock
options,
Assessment of potential deferred tax assets,
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-
Recognition of asset-backed securities.
Property, plant and equipment as well as intangible assets are measured based on estimates of the fair value
life of the assets has to be estimated. The fair value of assets and liabilities as well as the useful life of assets are
determined based on the management's estimates.
estimates are made as well that relate – among others - to the cause, date and amount of impairment. Impairment
which also involves appropriate assumptions of market participants. Identifying aspects that indicate that there is
impairment, the estimation of future cash flows and the determination of the fair values of assets (or disposal
groups) require significant estimates that the management has to make.
The Group performs an impairment test of the goodwill annually using the recognition and measurement
method outlined in chapter 2.10a. The realizable amount of the cash-generating unit was determined based on the
computations of the value in use. These computations must be based on assumptions. For details see the explanatory
comments in chapter 17.
The management records impairment losses on doubtful accounts in order to account for expected losses that
result from the customer’s insolvency. The bases used by the management in order to assess the appropriateness of
respect to the derecognition of receivables, the customer’s credit standing, and changes in terms of payment. In the
event the customer’s financial situation worsens, the scope of the actual amount to be derecognized may exceed the
expected derecognition.
(KP5) in ABS transactions (asset-backed securities). When assessing the disposal of the receivables, the Group must
assess whether the acquiring entity (KP5) should be included in the consolidated group of the Group and, then,
whether or to which extent the disposal is deemed a disposal of receivables defined by IAS 39. In this respect, the
duty to consolidate is assessed based on the criteria set forth in SIC-12 "Consolidation of special-purpose entities".
The bases used by the management for the assessment of the criteria of SIC-12 and IAS 39 are based on the
contractual agreements with KP5, the customers' credit standing, the estimate of future cash flows from the
purchased receivables (date and amount), as well as the projection of the future interest and exchange rate trend on
the financial markets. Thus, the determination of the criteria of SIC-12 and IAS 38 require the management's
estimates and forecasts.
Income taxes have to be estimated for each tax jurisdiction in which the Group operates. The expected actual
income tax for each taxable unit has to be calculated and temporary differences resulting from different treatment of
certain balance sheet items in the consolidated IFRS financial statements and the tax base have to be evaluated. If
temporary differences occur, those differences basically result in the recognition of deferred tax assets and liabilities
in the consolidated financial statements. The management has to make estimates when calculating actual and
deferred taxes. Deferred tax assets are recognized to the extent that it is probable that the assets will be utilized. The
utilization of deferred tax assets depends on the possibility to generate sufficient taxable income in the respective tax
category and tax jurisdiction; legal restrictions regarding maximum loss carryforward periods have to be taken into
account. When assessing whether a future utilization of deferred tax assets is probable, various factors have to be
taken into account, e.g. earnings position in the past, operational plans, loss carryforward periods, tax plan
strategies. If the actual results deviate from those estimates or do the estimates have to be adjusted in the future,
adverse effects on the net worth, financial and earnings position may occur. In the event the impairment test of
deferred tax assets in profit and loss.
F-96
based on assumptions regarding the interest rate, life expectancy, and - to a limited extent - the expected earnings
pensions to a limited extent. They are in part based on actuarial evaluations that are based on assumptions such as
the interest rates used to calculate the amount of our pension obligation. The assumptions regarding the expected
government proceedings and other contingent liabilities, respectively, require major estimates by Mondi CP. Hence,
the assessment of whether it is probable that pending proceedings will be successful or a liability will be incurred
and the amount of the respective obligation are based on the assessment of the respective situation and
Those estimates may change due to new information. Mondi CP obtains new information primarily from services of
internal experts or external experts such as actuaries or legal consultants. Changes in the estimates of those
outflow of economic benefits may there deviate from the other provisions.
F-97
Notes on Consolidated Income Statement
3
Sales
Sales primarily include revenues from the sale of products less trade discounts and rebates, as well as
incidental revenues from the sale of energy and waste materials, and commission from the redebiting of setup costs,
engravings and clichees. Revenues from services are predominantly generated in the form of intra-Group service
revenues from entities in the Service division.
1/1-9/30/
2012
2011
kEUR
kEUR
Revenues from
- Films
311,904
410,301
232,026
294,197
- Bags, FIBCs
99,144
139,593
- Merchandise
11,529
17,123
Incidental revenues
24,192
33,509
Sales deductions
-12,355
-13,940
666,441
880,783
4
Cost of sales
The cost of sales comprises cost of sold products, as well as costs of funds of sold merchandise. In addition to
directly attributable costs such as material, labor and energy costs, they also include general overhead costs, incl.
depreciation.
The cost of sales also includes additions to warranty provisions and provisions for losses from orders.
The cost of sales breaks down as follows:
1/1-9/30/
2012
kEUR
407,451
73,167
19,705
18,713
15,539
11,168
7,901
3,321
912
-685
557,191
Material expenses
Personnel expenses
Depreciation/amortization
Operating expenses
Energy costs
Consumables
Production-related administrative costs
Warranty expenses
Others
2011
kEUR
554,779
94,816
25,272
22,905
19,582
16,004
9,840
4,285
-532
-10,591
736,360
The other cost of sales primarily comprise changes in inventories and own work capitalized.
5
Selling costs
1/1-9/30/
2012
kEUR
14,553
9,352
4,776
568
547
4,427
34,223
Freight costs and commissions
Personnel expenses
Operating expenses
Purchased services
Other selling costs
F-98
2011
kEUR
18,490
11,837
7,101
720
760
4,873
43,783
6
1/1-9/30/
2012
kEUR
9,889
2,516
2,364
1,332
-323
15,778
Personnel expenses
IT expenses
2011
kEUR
20,774
5,475
3,102
2,054
144
31,549
The reversal of provisions for the stock option program affects the personnel expenses in the amount of EUR
5,364k (prev. year: addition in the amount of EUR 511k).
7
Research cost
This item does not only include research costs but also non-capitalizable development costs as per IAS 38.
1/1-9/30/
2012
kEUR
8
4,190
2011
kEUR
5,264
This item comprises exchange gains and losses resulting from the Company's activities that are not
attributable to the financing activities.
The exchange gains and losses from operating activities explicitly include exchange gains and losses from
trade receivables, trade payables, intercompany cash accounts, foreign currency hedges relating to the operating
activities, as well as from foreign currency wire transfers that result from other receivables/liabilities.
1/1-9/30/
2012
kEUR
-361
9
2011
kEUR
1,163
1/1-9/30/
2012
kEUR
1,582
426
412
379
234
211
153
98
49
26
461
4,031
Income from the sale of subsidiaries
Income from the reversal of allowances
Credited bonuses
Compensations
Proceeds from sale of non-current assets
ABS income
F-99
2011
kEUR
0
536
571
383
361
196
631
1,427
235
621
453
5,415
10 Other operating expenses
1/1-9/30/
2012
kEUR
3,438
1,959
799
296
191
29
11
6,722
Impairment losses on property, plant and equipment
Losses from the sale of subsidiaries
Additions to allowances for doubtful accounts
Expenses relating to disposal of non-current assets
Other taxes
2011
kEUR
0
0
638
166
0
123
396
1,323
The impairment losses on property, plant and equipment relate to ZAO Mondi Slavnika (formerly ZAO
NORDENIA Slavnika), Pereslavl/Russia. For further details see chapter 18.
11 Financial income
1/1-9/30/
2012
kEUR
6,542
5,167
1,073
764
0
13,547
Exchange gains from financial transactions
Gains from measurement of options
Income from borrowings
Gains from measurement of finance swaps
2011
kEUR
21,007
6,425
1,334
1,115
1,767
31,648
12 Financial expenses
Interest expenses
Exchange losses from financial transactions
Expenses resulting from measurement of finance swaps
Expenses resulting from measurement of options
1/1-9/30/
2012
kEUR
27,110
7,199
2,902
0
37,212
2011
kEUR
35,743
21,434
5,660
14,656
77,493
9/30/2012
kEUR
380
12/31/2011
kEUR
500
1/1-9/30/
2012
kEUR
11,214
485
2011
kEUR
12,260
-334
3,599
15,298
-2,948
8,978
13 Taxes on income and earnings
The Group's income taxes are as follows:
period
F-100
The income tax rates for foreign companies range between 10.0 % and 37.0 % (prev. year: 10.0 % and
37.0 %). There have been no changes in the tax rates.
disclosed tax expenses. In order to determine the anticipated tax expenses the respective applicable German total tax
rate is multiplied by the earnings before taxes.
1/1-9/30/
2012
2011
kEUR
kEUR
Earnings before taxes on continued operations
28,343
23,237
Income tax rate (incl. trade tax) of
Mondi Consumer Packaging International AG (formerly
30.00 %
30.00 %
Increases in taxes resulting from non-deductible taxes on the
sale of consolidated units
Increases in taxes resulting from additions for trade tax
purposes
period
Effect from changes in tax rates
Adjustment of deferred tax assets from loss and interest
carryforwards, as well as temporary differences
Utilization of adjusted deferred tax assets on loss
carryforwards
Other differences
8,503
6,971
166
1
-616
595
361
87
7
-332
418
0
841
1,127
794
-828
0
4,411
-166
2,053
0
-68
242
-289
15,298
53.97 %
8,978
38.60 %
The increase in the effective tax burden from 38.60 % to 53.97 % is mainly the result of tax expenses and
income relating to other accounting periods (EUR 841k - prev. year EUR -828k) and adjustments of deferred tax
assets (EUR 4,411k - prev. year EUR 2,053k).
The taxes recorded in other comprehensive income in the amount of EUR -1,599k (prev. year: EUR -422)
include EUR -1,708k (prev. year: EUR -313k) in actuarial gains and losses and EUR 109k (prev. year: EUR -109k)
in gains/losses from cash flow hedges.
F-101
14
Income/losses from assets (disposal groups) held for sale
1/1-9/30/
2012
kEUR
Intangible assets
Deferred tax assets
Inventories
Liabilities relating to
assets held for sale
Pension obligations
Trade payables
Provisions and accrued liabilities
2011
kEUR
0
0
0
0
0
0
0
177
2,046
211
98
1,797
997
5,326
0
0
0
0
0
0
725
26
800
492
151
2,194
The assets and debt of NORDENIA Emsdetten GmbH, Emsdetten, including the company's investment in
NORDENIA Polska Starogard GD sp. z o. o., Starogard/Poland (both part of the AFC segment) were disclosed as
held for sale as a result of the management's resolution to sell the company's assets and debt and the approving
acknowledgment by the Supervisory Board dated November 30, 2011. The sale was completed in the reporting
period.
15
Other notes on consolidated income statement
1/1-9/30/
2012
kEUR
Expenditure on raw materials, consumables and supplies,
finished goods and work in process, as well as merchandise
Material expenses
Wages and salaries
Social security contributions
Expenses for retirement benefits
Personnel expenses
Amortization of intangible assets
and property, plant and equipment
Recognition of impairment losses
2011
kEUR
404,571
3,438
408,008
549,960
5,406
555,366
1/1-9/30/
2012
kEUR
78,115
16,476
782
95,374
2011
kEUR
108,819
20,935
1,406
131,160
22,008
3,438
25,446
28,540
0
28,540
For details on the classification by asset categories see the Schedule of Non-Current Assets in chapter 17 and
18.
F-102
16
Portion of earnings/losses attributable to non-controlling interests
Non-controlling interests of the company
Mondi Lohne GmbH (formerly NORDENIA Deutschland
Lohne GmbH)
Mondi Consumer Packaging Iberica S.A. (formerly
NORDENIA Iberica Barcelona S.A.)
Portion of earnings/losses attributable to
non-controlling interests
*)
1/1-9/30/
2012
kEUR
%
10.0
2.2
*)
2011
kEUR
-3
-15
-22
-25
-25
-40
This item relates to the shares in the earnings/losses of the non-controlling interests in NORDENIA Iberica
Barcelona S.A incurred as a result of the merger of Polireal S.L. onto NORDENIA Iberica Barcelona S.A.
F-103
Explanatory comments on the consolidated balance sheet
17
Intangible assets
Intangible assets are goodwill, development costs (internally generated assets), patents, software, licenses and
similar rights.
The impairment test was performed with regard to the goodwill based on the multi-year plan of Mondi Ipoh
Sdn. Bhd. (formerly Nordenia (Malaysia) Sdn. Bhd.), Ipoh/Malaysia, using the DCF method. While the growth rates
during the development of the cash flows is covered by the computation, the company's future cash flows were
measured at weighted average cost of capital (WACC) that also covers the country-specific risks.
The item development costs comprise acquired and internally generated development costs that meet the
criteria of IAS 38. Depreciation on intangible assets is included in the items of the corresponding function costs in
the statement of profit and loss. For details regarding the total depreciation see chapter Fehler! Verweisquelle
konnte nicht gefunden werden..
Impairment test of goodwill
The goodwill is the difference not attributable to the acquired built-in gains from the acquisition of 50 % of
the shares in Mondi Ipoh Sdn. Bdh. (formerly Nordenia (Malaysia) Sdn. Bhd.), Ipoh/Malaysia, from the former joint
venture partner. The above-described company was identified as the smallest cash-generating unit for the purpose of
the impairment test. The goodwill is not depreciated on schedule and is subject to an annual impairment test.
The realizable amount of the cash-generating unit was determined based on the computations of the value in
use. Measurement was performed by discounting the projected cash flows of the company. The detailed planning
period covers the years 2013 - 2016 and is based on the assumptions regarding future selling prices or sales
quantities, respectively, and the costs, taking into account the underlying economic conditions. A perpetuity with a
general growth rate of 1.5 % (prev. year: 1.5 %) was determined for the period after this four-year detailed planning
period. The weighted average cost of capital (WACC) after taxes on which the computation was based totaled 6.77
% (prev. year: 8.91 %). The value in use so calculated exceeded the carrying amount at September 30, 2012. Even in
case of a deviation of the future cash flows by 32.69 % (prev. year: 47.16 %) would not have resulted in an
impairment.
F-104
The intangible assets of the Group developed as follows in the in the short financial year from January 1 to
September 30, 2012 and the previous period:
Concessions,
kEUR
7,111
-30
0
0
0
0
7,081
21
kEUR
18,435
-91
-543
598
-483
94
18,008
83
industrial
property
rights
kEUR
3,140
65
-158
0
-8
1
3,040
12
0
0
10
0
7,112
-4
169
401
232
18,889
-1,015
6
0
0
2,043
0
56
0
0
770
0
264
0
-202
476
-1,019
495
411
30
29,290
730
-31
0
0
0
0
699
21
16,822
-78
-356
774
-483
0
16,679
80
1,561
34
-158
559
-7
0
1,989
6
420
0
0
74
0
0
494
0
0
0
0
0
0
0
0
0
19,533
-75
-514
1,407
-490
0
19,861
107
0
0
10
0
730
-3
568
401
0
17,725
-527
405
0
0
1,873
0
87
0
0
581
0
0
0
0
0
-530
1,060
411
0
20,909
6,382
1,164
170
189
476
8,381
6,382
1,329
1,051
220
413
9,395
Goodwill
Reclassification of the disposal group*)
Additions
Disposals
Reclassifications
Balance on Dec. 31, 2011 / Jan. 1, 2012
companies
Additions
Disposals
Reclassifications
Additions
Disposals
Reclassifications
companies
Additions
Disposals
Reclassifications
2012
Net carrying amount as at Dec. 31,
2011
Software
*) cf. chapter 14
F-105
Development
costs
631
0
0
83
0
0
714
0
kEUR
245
0
0
333
0
-166
413
1
kEUR
29,562
-56
-701
1,014
-491
-71
29,256
117
kEUR
Downpayments
Total
18
The Group's property, plant and equipment developed as follows in the in the short financial year from
January 1 to September 30, 2012 and the previous period:
Land,
leasehold
companies
Additions
Disposals
Reclassifications
Additions
Disposals
Reclassifications
companies
Additions
Disposals
Reclassifications
Impairment losses
Net carrying amount as at Dec. 31, 2011
Downpayments
and
assets under
construction
kEUR
4,322
-117
-4
15,431
0
-4,133
kEUR
601,396
-3,301
-7,025
38,762
-11,432
71
kEUR
7,353
-144
-38
0
-210
0
kEUR
123,754
-439
-2,060
2,408
-4,987
342
Technical
equipment
plant and
machinery
kEUR
403,684
-1,873
-3,580
16,313
-2,144
3,442
6,961
122
119,018
1,190
415,843
5,073
61,151
713
15,500
542
618,472
7,640
0
717
0
-27
7,773
-2,035
654
-126
1,400
120,101
-11,166
9,154
-3,915
11,024
426,013
-684
2,143
-1,810
778
62,291
16
10,571
-1,674
-13,205
11,750
-13,869
23,239
-7,525
-30
627,928
100
1
0
7
0
0
37,947
70
-581
3,040
-2,323
0
304,880
-1,045
-3,247
19,277
-1,990
0
45,745
-370
-1,156
4,809
-4,023
0
0
0
0
0
0
0
388,672
-1,344
-4,984
27,133
-8,336
0
108
4
38,153
248
317,876
3,898
45,006
436
0
0
401,143
4,586
0
6
0
0
0
118
-834
2,318
-38
0
3,438
43,286
-11,056
15,170
-3,717
0
0
322,171
-665
3,453
-1,801
0
0
46,429
0
0
0
0
0
0
-12,555
20,947
-5,556
0
3,438
412,003
7,655
6,853
76,815
80,865
103,842
97,967
15,862
16,145
11,750
15,500
215,925
217,329
rights
Additions
Disposals
Reclassifications
Other fixtures and
fittings,
and
office
equipment
kEUR
62,283
-728
-1,343
4,610
-4,091
420
Buildings
*) cf. chapter 14
F-106
Total
The impairment is on buildings of ZAO Mondi Slavnika (formerly ZAO NORDENIA Slvanika),
Pereslavl/Russia, for which an impairment loss was recorded after an impairment test decreasing the value to the
realizable amount. The realizable amount corresponds to the fair value less the costs to sell and was derived from the
active market based on a valuation report. Due to the current earnings position of ZAO Mondi Slavnika (formerly
ZAO NORDENIA Slavnika) and the corporate planning for the following years, the Group believes that there are
indications that the buildings might not be used to the intended extent. The impairment loss was recorded in the
other operating expenses. The assets are attributed to the CFP segment.
Impairment losses were neither reversed in the reporting period nor the previous financial years. Borrowing
costs were capitalized to the extent that the criteria set forth in IAS 23 were satisfied.
The downpayments and assets under construction were attributed to the following asset categories upon
completion:
9/30/2012
kEUR
6,971
2,726
2,053
11,750
Buildings
Other fixtures and fittings, and office equipment
12/31/2011
kEUR
12,388
1,368
1,744
15,500
Property, plant and equipment was pledged as collateral in the amount of EUR 6,549k (prev. year: EUR
4,454k). The carrying amount of the assets capitalized under finance leases totals EUR 9,122k (prev. year: EUR
9,917k).
19
Financial assets
19.1
The shares and investments developed as follows in the short financial year from January 1 to September 30,
Shares
kEUR
Additions
Disposals
Additions
Disposals
6
0
1,250
0
1,256
0
-1,250
0
0
6
Investments
kEUR
1,531
0
0
0
1,531
0
0
0
0
1,531
Total
kEUR
1,537
0
1,250
0
2,787
0
-1,250
0
0
1,537
6
0
0
0
6
0
0
0
6
1,301
0
0
0
1,301
0
0
0
1,301
1,307
0
0
0
1,307
0
0
0
1,307
0
1,250
230
230
230
1,480
Impairment losses
Additions
Disposals
Additions
Disposals
F-107
The addition to the investments in the previous year relates to shares in the newly incorporated company
NORDENIA (China) Film Technology Co., Ltd., Taicang/China that was not consolidated in 2011 for materiality
reasons. The company was initially consolidated on January 1, 2012.
19.2
The other financial assets developed as follows in the short financial year from January 1 to September 30,
Industrial
Termination
Lessee
revenue
option
loans
Other
financial
bonds
instruments
kEUR
kEUR
kEUR
kEUR
kEUR
12,705
13,483
4,128
Total
1,921
32,237
440
0
0
-2
438
Additions
0
0
0
17
17
Disposals
0
0
0
-1,499
-1,499
13,145
13,483
4,128
437
31,193
2
0
0
1
3
Additions
0
0
0
23
23
Disposals
0
0
-219
-3
-222
13,147
13,483
3,909
458
30,997
0
2,990
0
738
3,728
0
0
0
0
0
Additions
0
8,231
0
0
8,231
Disposals
0
0
0
-353
-353
0
11,221
0
385
11,606
0
0
0
0
0
Additions
0
0
0
0
0
Disposals
0
0
0
0
0
0
-5,167
0
0
-5,167
0
6,054
0
385
6,439
13,147
7,429
3,909
73
24,558
13,145
2,262
4,128
52
19,587
Impairment losses
The derivative financial instruments comprise the option to repay the bond early which was agreed upon when
the industrial revenue bond was granted. The option is deemed a derivative financial instrument as defined in IAS 39
and is therefore measured at fair value through profit and loss. Please refer to our comments in chapter 30.1.
For a description of the bond and the agreed-upon retention prices see chapter 27.2.
For details regarding the industrial revenue bonds, please see chapter 28.
The lessee loans relate to two loans granted to TGL Warehousing GmbH & Co. KG Gronau/Westf. Those loans
are used as collateral for the lender's claims for payment under the corresponding lease agreements.
F-108
The loan dated November 22, 2004 in the amount of EUR 2,409k (prev. year: EUR 2,628k) was granted for the
purpose of a multi-purpose hall. It has a term of 13.5 years commencing on the commencement date of the lease period
and bears interest of 3.95 % p.a. Monthly repayment has been EUR 73k since July 2012. The multi-purpose hall is
accounted for in the property, plant and equipment of Mondi Gronau GmbH (formerly Nordenia Deutschland Gronau
GmbH), Gronau/Westf.
The loan dated March 19, 2008 in the amount of EUR 1,500k was granted for the purpose of a block storage
unit. It has a term of 10 years commencing on the commencement date of the lease period and bears interest of 4.95 %
p.a. The lease agreement regarding the block storage unit was entered into as an operate lease.
Just as in the previous year, the other financial instruments do not comprise any financial instruments classified
as available for sale.
20
Deferred taxes are determined based on the tax rates applicable in the respective countries. Changes in tax laws
passed at the balance sheet date have already been accounted for. As in the previous period, the applied income tax
rates of the individual countries range between 10.0 % and 37.0 % (prev. year: between 10.0 % and 37.0 %).
Deferred tax assets were offset against deferred tax liabilities if they relate to taxes on income and earnings that
are imposed by the same fiscal authority and if the company is entitled to offset any actual claim for tax refund with the
actual tax liability.
9/30/2012
Asset
Liability
kEUR
kEUR
285
-68
934
-19,696
130
-2,239
1,499
-291
1,626
-1,536
3,682
0
130
0
5,801
-2
Intangible assets
Financial assets
Inventories
Pension provisions
Trade payables
Tax losses, interest carried forward and
tax credits
5,718
-2,664
17,141
-6,426
10,715
./. Offsets
Balance sheet disclosure*)
Deferred tax liability (net)
0
0
-23,832
6,426
17,406
-6,691
12/31/2011
Asset
Liability
kEUR
kEUR
147
-24
1,173
-20,089
118
-689
1,415
-265
3,247
-875
1,983
0
2
-118
5,872
-886
7,438
-3,270
18,125
-5,485
12,640
0
0
-22,946
5,485
-17,461
-4,821
*) including the deferred tax assets included in the assets available for sale
The net amounts of the deferred taxes changed as follows:
F-109
9/30/2012
kEUR
4,821
-133
3,599
-1,596
6,691
12/31/2011
kEUR
8,048
142
-2,947
-422
4,821
Deferred tax assets
9/30/2012
kEUR
17,461
52
834
0
-941
17,406
12/31/2011
kEUR
16,534
164
-1,127
0
1,890
17,461
9/30/2012
kEUR
-12,640
-185
2,765
-1,596
941
-10,715
12/31/2011
kEUR
-8,486
-22
-1,820
-422
-1,890
-12,640
9/30/2012
kEUR
12/31/2011
kEUR
The maturity of the deferred tax assets and liabilities is as follows:
Realization within 12 months
Realization within more than 12 months
Realization within 12 months
Realization within more than 12 months
3,488
13,653
17,141
3,912
14,213
18,125
3,072
20,760
23,832
6,691
2,482
20,464
22,946
4,821
As at September 30, 2012, the Group had corporate tax loss carryforwards in the amount of EUR 13,688k (prev.
year: EUR 14,518k), trade tax loss carryforwards in the amount of EUR 714k (prev. year: EUR 5.687k), interest
carryforwards in the amount of EUR 0k (prev. year: EUR 5,687k), as well as tax refunds in the amount of EUR 9,365k
(prev. year: EUR 10,276k). EUR 12,958k (prev. year: EUR 13,165k) of the corporate tax loss carryforwards primarily
relate to foreign companies and are, in part, limited in their utilization.
The amounts comprise corporate income tax loss carryforwards in the amount of EUR 9,877k (prev. year: EUR
10,510k) for which no deferred taxes were recorded in the balance sheet due to the fact that at present it is not
9/30/2012
12/31/2011
Expiring within
5 years
kEUR
0
35
Expiring within
15 years
kEUR
12,579
11,723
Unlimited
utilization
kEUR
1,109
2,760
Total
kEUR
13,688
14,518
The tax refunds relate to tax credits of Mondi Ipoh Sdn. Bhd. (formerly NORDENIA (Malaysia) Sdn. Bhd.),
Ipoh / Malaysia. This amount's deductibility is not limited.
F-110
The deferred taxes relating to losses carried forward include the amount of EUR 1,238k (prev. year: EUR 843k)
relating to companies that accrued losses in the current financial year. The amount was recognized, since a positive
business trend of the respective companies is expected.
Allowances on deferred tax assets in the amount of EUR 2,644k (prev. year: EUR 3,270k) relate to tax loss
carryforwards in the amount of EUR 1,976k (prev. year: EUR 2,172k), since the use of the respective loss
carryforwards is not probable. The loss carryforwards on which the allowances are based may mainly be used within
15 years.
This exclusively affects corporate income tax loss carryforwards in the amount of EUR 9,877k (prev. year:
EUR 10,510k). They relate, just as in the previous year, exclusively to foreign companies.
The Group does not account for any deferred tax liabilities relating to retained profits of the subsidiaries to the
extent that these profits are likely to be regarded as permanently invested.
The temporary differences relating to shares in subsidiaries and joint ventures total EUR 42,838k (prev. year:
EUR 41,478k). No deferred tax liabilities were recorded for the deferred tax assets relating thereto in the amount of
EUR 620k (prev. year: EUR 622k) since neither a sale nor a distribution is planned.
21
The other non-current assets break down as follows:
Financial assets
22
9/30/2012
kEUR
14
12/31/2011
kEUR
68
14
68
244
244
258
243
243
311
9/30/2012
kEUR
31,904
23,830
54,176
3,229
113,139
12/31/2011
kEUR
28,553
24,912
51,281
174
104,920
9/30/2012
kEUR
124,463
105,284
19,180
-11,325
113,139
12/31/2011
kEUR
116,312
99,951
16,361
-11,393
104,920
Inventories
Downpayments
Inventories (gross)
Impairment losses
Impairment losses on inventories were reduced in the amount of EUR 67k (prev. year: increase by EUR 802k).
The impairment loss was recorded in the cost of sales (material expenses) in profit and loss. Changes in the impairment
losses result from additions, utilization and disposals, the currency translation, as well as changes in the consolidated
group.
As in the previous period, no inventories were assigned as collateral for liabilities at the balance sheet date.
F-111
23
Trade receivables
9/30/2012
kEUR
94,151
Trade receivables
12/31/2011
kEUR
85,275
The receivables are broken down by due date and maturity at the balance sheet as follows:
Carrying
amount
trade
thereof at
balance
sheet
date neither
impaired
receivables
9/30/2012
kEUR
94,151
nor
overdue
kEUR
78,977
12/31/2011
85,275
78,095
Not impaired at the balance sheet date and overdue within the respective
timeframe
> 30 days > 60 days > 90 days
> 120
days
< 30 days < 60 days < 90 days
< 120
< 360
> 360
days
days
days
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
12,147
1,331
148
162
116
10
8,853
927
339
66
45
14
In respect to the trade accounts receivable that are neither impaired nor overdue, there are no indications at
the balance sheet date that the debtors might not meet their payment obligations.
The maximum credit risk is reflected in the carrying amount of the respective financial instrument. The
insurances were agreed upon. At the balance sheet date, trade receivable in the amount of EUR 5,458k (prev. year:
EUR 5,491k) were insured. EUR 870k of said amount (prev. year: EUR 843k) relate to overdue accounts.
Development of impairment losses on trade accounts receivable:
Balance on
1/1/2012
Exchange
differences
kEUR
2,199
kEUR
-85
Change
in the
consolidated
group
kEUR
-317
Addition
Utilization
Reversal
Balance on
9/30/2012
kEUR
615
kEUR
346
kEUR
428
kEUR
1,764
in ABS transactions (asset-backed securities). The agreement revised at the end of 2006 has a term expiring in 2013
and is automatically extended by a period of five years if not terminated giving proper notice.
The agreement sets forth a maximum of accumulated purchases of receivables of EUR 70m and USD 10m
and, in addition, governs the purchase of receivables at a price of about 90.5 % of the nominal value of the
receivables. The ABS transaction results in an increase in the Group's liquidity and balance sheet disclosures. There
is a decrease in trade receivable, on the one hand, and a corresponding decrease in bank liabilities, on the other hand.
At September 30, 2012, receivables in the amount of EUR 52,691k (prev. year: EUR 49,571k) had been sold and
assigned to Kaiserplatz Purchase No. 5 Ltd., Jersey. Thus, any and all rights in those receivables have been
transferred to Kaiserplatz Purchaser No. 5 Ltd.
When determining the value of the trade receivables not sold, each change in the credit standing between the
date at which the credit is granted and the balance sheet date is accounted for. There is no significant concentration
of the credit risk due to the fact that the range of remaining customers is wide and there are no correlations. Thus,
the management is of the opinion that no other risk prevention measures beyond the impairment losses already
recorded are necessary. The additions to and reversals of impairment losses are recorded in other operating expenses
in profit and loss (cf. chapter 10).
F-112
The loss of receivables risks and risks regarding any late payments that were retained in part result in a
continuing involvement as defined in IAS 39.20c (ii). The scope of the continuing involvement is determined based
on the extent to which the company is still subject to the risk of changes in the value of the transferred asset and
totals EUR 1,317k at the balance sheet date (prev. year: EUR 1,239k). When recognizing the associated liability, the
Group also took into account the fair value of the first loss guaranty related to the risk of the loss of the receivables
in the amount of EUR 263k (prev. year: EUR 248k). Therefore, the associated liability totals EUR 1,581k (prev.
year: EUR 1,487k).
24
Suppliers' bonuses and creditors with debit balances
Receivables from the NDE sale
Interests receivable
Advance payments
Deposit
Receivables due from insurances
HR-related receivables
Receivables from exchange futures (FAHfT)
Financial assets
Receivables from other taxes
Accrued income
9/30/2012
kEUR
8,723
8,750
6,523
1,140
595
334
314
173
92
15
233
26,893
12/31/2011
kEUR
7,542
0
5,980
120
55
47
542
603
111
234
151
15,385
9/30/2012
kEUR
4,504
500
1,476
143
6,622
33,515
12/31/2011
kEUR
3,655
733
587
167
5,142
20,527
As in the previous period, there were no material other financial assets that were overdue at the balance sheet
date.
The maximum credit loss risk is reflected in the carrying amounts. The carrying amounts mainly correspond to
the fair values.
Balance on
1/1/2012
kEUR
1,069
Exchange
differences
kEUR
0
Change
in the
consolidated
group
kEUR
-176
Balance on
9/30/2012
kEUR
893
The change in the consolidated group relates to impairment losses on receivables due from Danor. The company
was sold in the reporting period. The receivables were reclassified into other external receivables.
When determining the value of the other current assets, each change in the credit standing between the date at
which the credit is granted and the balance sheet date is accounted for. There is no significant focus in the attribution of
the credit risk. Thus, the management is of the opinion that no other risk prevention measures beyond the impairment
losses already recorded are necessary. The additions and reversals of impairment losses are recorded in profit or loss.
F-113
25
9/30/2012
kEUR
33,068
12/31/2011
kEUR
27,336
The maximum credit risk is reflected in the carrying amount of the cash. The carrying amounts mainly
For details regarding the development of the cash see the consolidated cash flow statement (Appendix II):
26
Equity capital
The changes in equity are outlined in the Consolidated Statement of Shareholders' Equity (Appendix II).
26.1
Subscribed capital
The balance on September 30, 2012 reflects the subscribed capital of Mondi Consumer Packaging International
AG (formerly NORDENIA International AG) as the legal parent of the former NORDENIA Group.
The Company's share capital is totals EUR 29,190k and is divided into 29,189,579 individual bearer shares at
an imputed share in the share capital of EUR 1.00. The share capital is paid in full and each share grants one vote.
The directors of Mondi Consumer Packaging International AG (formerly NORDENIA International AG) are
authorized – upon approval by the Supervisory Board – to increase the share capital at May 17, 2016 against cash
contributions or capital contributions in kind in one or several steps up to the amount of EUR 14,595k.
At the balance sheet date, the balance of authorized capital totals EUR 14,595k (prev. year: EUR 14,595k).
26.2
Capital reserve
Based on a capital reserve of EUR -178,529k EUR at December 31, 2011, the capital reserve decreased to
EUR -175,088k at September 30, 2012. The change is based on changes in the consolidated group.
26.3
Retained earnings
Other retained earnings, as well as profits carried forward
9/30/2012
kEUR
-5,946
101,889
95,943
12/31/2011
kEUR
-2,167
91,240
89,073
Actuarial gains and losses resulting from adjustments and changes in the actuarial assumptions when
measuring the pension obligations are recorded in equity outside profit and loss (OCI method). In the reporting
period, actuarial losses attributable to the Group, not taking into account minority interests, in the amount of EUR
5,694k (prev. year: actuarial losses of EUR 1,041k) and the corresponding deferred taxes in the amount of EUR
1,705k (prev. year: EUR 313k) were recorded in equity outside profit and loss. Due to the deconsolidation of
NORDENIA Deutschland Emsdetten GmbH actuarial gains in the amount of EUR 210k were derecognized from the
reserve.
F-114
26.4
At the balance sheet date, interests of the parent's shareholders in the amount of EUR 13,070k (prev. year:
EUR 14,299k) were recorded.
The Group reclassified gains in the amount of EUR 953k and losses in the amount of EUR -295k from equity
into profit and loss. The gains result from the exchange clearing item of the deconsolidated and previously pro rata
consolidated company Dalian DANOR Printing Packaging Company. The losses resulted from the termination of a
cash flow hedge concluded in the previous year.
26.5
Other reserves
9/30/2012
kEUR
-1,609
Exchange clearing item
Cash flow hedge instruments (less deferred taxes)
0
-1,609
12/31/2011
kEUR
-5,174
-186
-5,360
The exchange clearing item comprises the differences resulting from the translation of foreign currency financial
statements of the foreign subsidiaries, not affecting the operating result. The changes over the previous year mainly
result from the inflation of the HUF.
26.6
Non-controlling interests
The disclosure at September 30, 2012 reflects non-controlling interests in Mondi Lohne GmbH (formerly
NORDENIA Deutschland Lohne GmbH), Steinfeld, as well as Mondi Consumer Packaging Iberica S.A. (formerly
NORDENIA Iberica Barcelona S.A.).
The other comprehensive income of the minority shareholders breaks down as follows:
Earnings/losses from actuarial gains and losses from defined benefit plans
Taxes on other comprehensive income
F-115
9/30/2012
kEUR
-11
3
-8
12/31/2011
kEUR
-3
1
-2
27
Liabilities
Bonds*)
Notes payable**)
Trade payables**)
Current income tax
liabilities**)
- thereof personnel
related liabilities
- thereof sundry other
liabilities
- thereof accruals
Other non-financial
liabilities**)
- thereof downpayments
received on orders
- thereof liabilities from
the deferral
of government grants
- thereof for taxes
- thereof for social
security
liabilities
- thereof accruals
Residual maturities
one year
1 to 5 years
Total
more than 5 years
9/30/2011 12/31/2011 9/30/2011 12/31/2011 9/30/2011 12/31/2011 9/30/2011 12/31/2011
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
0
0
9,988
9,984
0
0
9,988
9,984
0
0 280,687
0
0
280,770 280,687
280,770
39,417
33,239
3,199
1,820
0
0
42,616
35,059
909
732
0
0
0
0
909
732
80,042
83,638
0
11
0
0
80,042
83,649
5,552
56,316
1,135
57,955
0
7,897
0
2,695
0
12,811
0
10,321
5,552
77,024
1,135
70,971
2,825
13,942
3,063
14,108
2,180
0
2,299
4,249
0
4,661
2,825
20,371
3,063
21,068
9,493
30,055
10,525
30,259
5,568
150
58
338
8,562
0
5,660
0
23,623
30,204
16,243
30,597
5,247
3,488
623
277
26
27
5,897
3,792
1,855
143
0
1,855
143
0
1,474
4
1,492
589
0
234
0
5
0
6
0
594
1,474
244
1,492
565
540
0
0
0
0
565
540
472
883
187,483
299
1,010
180,187
34
0
302,395
43
0
14,787
21
0
12,837
21
0
291,118
527
883
502,715
363
1,010
486,092
0
*)
**)
27.1
Subordinated loans
In conjunction with the issuing of a subordinated corporate bond on July 9, 2010, bearing 9.75 % interest,
Mondi Consumer Packaging International AG (formerly NORDENIA International AG) was granted a subordinated
loan by Landessparkasse zu Oldenburg in the amount of EUR 10,000k. The loan has a term elapsing on July 31, 2014
and is discounted at the 6-month Euribor applicable two days prior to the expiration of the respective previous interest
period plus a surcharge of 450 basis points.
27.2
Bonds
On July 9, 2010, a corporate bond with a total volume of EUR 280mn was issued. The bond is discounted at
9.74 % p.a.; the interests are due payable semi-annually on January 15 and July 15. The first interest payment was due
on January 15, 2011.
The bond becomes due payable on July 15, 2017. The Company may prematurely exercise the option to repay
the bond either in full or in installments before July 15, 2014 by paying a premium and the interests that have been
accrued but not yet paid by the exercise date.
F-116
Before July 15, 2013, 35 % of the corporate bond may be repaid by paying a redemption price of 109.75 % plus
the interests accrued but not yet paid by the redemption date. On or after July 15, 2014, the corporate bond may be
repaid either in full or in part at the following redemption prices:
Redemption
Year
price
2014 .......................................................................................
104.875%
2015 .......................................................................................
102.438%
2016 and after ........................................................................
100.000%
27.3
The change in liabilities due to banks is primarily the result of the fact that utilized credit lines of EUR 100,000k
were repaid in part.
27.4
Notes payable
This item comprises liabilities from notes payables.
27.5
Trade payables
Trade payables are payment obligations for goods and services acquired in the ordinary business operations.
The liabilities are classified as current debt when and if the payment obligation is due within one year (or in the course
of the regular business cycle when and if it is longer). Otherwise, they are recognized as non-current debt.
27.6
9/30/2012
kEUR
5,552
12/31/2011
kEUR
1,135
This item includes current income tax liabilities. For additional information regarding effective and deferred
taxes see chapters 13 and 20.
27.7
Accruals
9/30/2012
kEUR
Accrued interest
Personnel-related accruals (vacation claims, etc.)
- thereof due within one to five years
Deferrals for ABS
Other financial accruals (outstanding invoices, etc.)
F-117
12/31/2011
kEUR
7,411
18,044
150
1,581
13,405
12,219
338
1,446
3,169
30,204
3,527
30,597
Personnel-related accruals (insurance against occupational accidents, social
security, etc.)
Total accruals
28
736
971
146
883
31,087
39
1,010
31,607
The other liabilities include in particular liabilities from finance lease agreements. If the Company bears the
material risks and rewards from the lease, the leased assets are recognized at the acquisition date and measured either at
the fair value or the lower present value of the future minimum lease payments. The leased assets recognized with
regard to the finance lease agreements primarily relate to buildings, other plant, factory and office equipment, as well
as technical plant and machinery, and buildings. The agreements cover periods of 3 - 12 years.
The agreements contain expansion or purchase options. All leases are based on fixed installments. No
secured by way of retention of title by the lessor in the leased assets. The present value of the Group’s lease obligations
basically corresponds to their carrying amount.
9/30/2012
12/31/2011
kEUR
kEUR
Liabilities from finance leases:
- thereof due within one year
- thereof due within more than one year
and up to 5 years
- thereof due within more than five years
Present value of the
minimum lease payments
9/30/2012
12/31/2011
kEUR
kEUR
14,547
14,838
13,942
14,108
4,357
5,851
24,755
4,384
20,371
4,610
6,633
26,081
5,013
21,068
2,180
4,249
20,371
N/A
2,299
4,661
21,068
N/A
The net values of the asset recognized as assets from finance leases total EUR 9,122k at the balance sheet
date (prev. year: EUR 9,917k) and break down as follows:
Net values by asset categories
9/30/2012
kEUR
32
8,398
151
541
9,122
Software
Buildings
Plant and machinery
Other equipment, plant, factory and office equipment
12/31/2011
kEUR
37
8,816
240
824
9,917
In December 2000, Mondi Jackson, Inc. (formerly NORDENIA USA Inc.), Jackson, entered into a sale &
lease back agreement with Cape Girardeau, Missouri. Under this agreement, the company sold buildings and office
and plant equipment worth approx. USD 17m in 2001 and 2000 and has leased those assets from the municipality
since that date. According to the agreement, the company is thus granted a property tax benefit. The municipality
paid to the company a 9.5 % industrial revenue bond as a consideration. The industrial revenue bond expires on
December 1, 2012. The lease is classified as a finance lease. The respective liability in the amount of USD 17m
(EUR 13,148k on September 30, 2012 or EUR 13,146k on December 31, 2011, respectively) is included in Other
liabilities (cf. chapter 27). The liability is to be repaid in one amount by offsetting against the industrial revenue
bond. The leased assets may be acquired at the end of the term in accordance with the agreement at 10 USD.
F-118
29
9/30/2012
kEUR
19,819
Pension provisions
12/31/2011
kEUR
14,307
The reconciliation of the assets and liabilities recorded in the balance sheet is as follows:
Present value of the fund-financed obligations
Present value of the non-fund-financed obligations
Provision
9/30/2012
kEUR
26,561
12/31/2011
kEUR
20,675
-7,155
-6,757
413
389
19,819
14,307
Pension provisions are recorded for obligations from commitments and current benefits to entitled active and
former employee of the Group and their survivors as per IAS 19 Employee benefits.
F-119
Germany
9/30/2012
12/31/2011
%
%
3.40
4.80
3.85
4.10
3.00
2.50
2.00
1.75
Interest rate
Dynamic benefits
Dynamic pension
Other countries
9/30/2012
12/31/2011
%
%
6.25
6.25
n/a
n/a
2.50
3.75
0.00
1.25
Dynamic benefits take into account anticipated future increases in salaries that - among others - are estimated
based on the inflation and the economic situation on an annual basis. The actuarial present value of the pension
obligation using the projected unit credit method is decreased in case of an externally financed pension plan by the fair
value of the valued assets of the external pension plan.
According to IAS 19, the interest rate for the discounting of the pension provisions shall be derived from the
discounting of high-value corporate bonds and should be consistent to the currency and the maturity of the obligation.
For this reason, the Group adjusts on a regular basis the interest rate based on the current market circumstances. The
adjustments do not have any effect on the current or future reporting periods.
The underlying mortalities are based on published statistics and past experience in each country. The
assumptions in Germany are based on the 2005 G Heubeck mortality tables.
If the assets exceed the obligations from the pension commitments, usually an asset is recognized in accordance
with IAS 19 Employee benefits. IAS 19.58 prescribes that in case the assets exceed the liabilities an asset may only be
recognized, if Mondi CP (formerly NORDENIA) as the committed employer had the right to distribute this excess or is
entitled to future reductions of contributions.
Actuarial gains or losses may result from increases or decreases of either the present value of the defined benefit
obligation or the fair value of the plan assets; the reasons for such gains and losses may – among others – be changes in
calculation parameters, estimates of the risks relating to the pension obligations and deviations between the actual and
the anticipated revenues from the plan assets.
Balance on Jan. 1
thereof operations held for sale
adjusted balance on Jan. 1
Interest expense
Actuarial gains (-)/losses
Paid benefits
Balance on Sept. 30
or Dec. 31, respectively
Fair value of the DBO
pension obligations
Plan deficit
Germany
9/30/
2012
2011
kEUR
kEUR
20,675
20,621
0
-1,385
20,675
19,236
272
324
726
975
5,647
993
0
0
-759
-853
Other countries
9/30/
2012
2011
kEUR
kEUR
389
375
0
-9
389
366
11
9
12
16
0
0
7
1
-6
-3
Total
9/30/
2012
2011
kEUR
kEUR
21,064
20,996
0
-1,394
21,064
19,602
283
333
738
991
5,647
993
7
1
-765
-856
26,561
20,675
413
389
26,974
21,064
26,561
-7,155
19,406
20,675
-6,757
13,918
413
0
413
389
0
389
26,974
-7,155
19,819
21,064
-6,757
14,307
F-120
2012
kEUR
6,757
2011
kEUR
6,989
0
-960
adjusted balance on Jan. 1
6,757
6,029
197
-57
1,017
-759
249
213
1,119
-853
Plan assets at the balance sheet date
7,155
6,757
Plan assets on Jan. 1
thereof operations held for sale
The plan assets mainly comprise other assets such as life insurances. They were assigned by Mondi CP
Germany
Other countries
9/30/2012 12/31/2011
kEUR
kEUR
Current service
cost
Cost of sales
and other
expenses
Financial result
Interest expense
Expected
earnings on plan
Financial result
assets
9/30/2012
kEUR
Total
12/31/2011
kEUR
9/30/2012
kEUR
12/31/2011
kEUR
273
726
324
975
12
12
9
16
285
738
332
991
-197
802
-249
1,050
0
24
0
25
-197
826
-249
1,075
Actuarial gains or losses are recorded outside profit and loss directly in other comprehensive income (OCI
method) and thus the pension provision always equals the actuarial present value of the obligation ("Defined Benefit
Obligation") (see chapter 2.18). In the reporting period actuarial gains – without taking into account deferred taxes –
EUR 1,041k). In the reporting period total actuarial gains and losses – without taking into account deferred taxes –
EUR 2,815k).
The actual gains from the plan assets of external insurances totaled EUR 140k (prev. year: EUR 462k). The
expected total yield is derived from the weighted average of the Other assets contained in the plan assets. The forecasts
are based on past experience, economic data and interest forecasts.
The Group expects to pay contributions in the amount of 386 kEUR into defined benefits plan in the coming
financial year.
F-121
obligations exceeding the assets, as well as experience-based adjustments:
in kEUR
each at the balance sheet date
Plan assets
Plan deficit
Adjustments in %
pension obligations
assets
9/30/
2012
26,974
-7,155
19,819
2011
21,064
-6,757
14,307
2010
20,996
-6,989
14,007
6/28/
2010
21,231
-6,919
14,312
2009
18,241
-6,420
11,821
2008
18,465
-6,098
12,367
9/30/
2012
2011
2010
6/28/
2010
2009
2008
-0.05
-0.06
0.63
1.00
-0.54
1.71
0.80
-2.78
2.52
-4.12
0.29
0.6
The employer's portion of the statutory pension insurance is included in personnel expenses, social security
(cf. chapter 15).
Furthermore, there are defined contribution commitments within the Group the benefits of which are
financed in full by contributions to an external plan. The Group does not bear any financial or actuarial risks
inherent in these commitments. In 2012, the contributions to defined contribution plans totaled EUR 5,147k.
F-122
30
30.1
Measurement
Carrying
category
amount
as per IAS 39 9/30/2012
kEUR
kEUR
ASSETS
Non-current
Financial assets
Loans and
receivables
Available for sale
Other original
financial assets
Loans and
receivables
Held for trading
Current
Cash and cash
equivalents
Trade receivables
Receivables due
from affiliated
Other assets
Other original
financial assets
Available for sale
EQUITY AN
D
LIABILITIE
S
Non-current
Subordinated
liabilities
Liabilities due to
banks
Trade payables
Other liabilities
Discounted
No interest
From finance
leases*)
Others
Current
Liabilities due to
banks
Trade payables
Notes payable
Liabilities due to
affiliated
Other liabilities
Discounted
No interest
From finance
leases*)
Others
Amortized
cost
kEUR
outside
through
Fair
Carrying
profit or
profit or
falue
amount
Cost
loss
loss
IAS 17 9/30/2012 12/31/2011
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
LaR
AfS
17,130
230
17,130
17,130
230
14
7,429
14
33,068
94,151
33,068
94,151
33,068
94,151
314
26,563
314
26,563
314
26,563
230
LaR
FAHfT
14
7,429
7,429
LaR
LaR
LaR
LaR
FAHfT
15
AfS
15
15
0
0
FLAC
9,988
9,988
9,988
283,886 283,886
0
0
283,886
0
FLAC
FLAC
FLAC
FLAC
FLAC
FLHfT
5,550
168
5,550
168
6,428
8,562
5,550
168
6,428
8,562
6,428
8,562
FLAC
67
67
2,262
2,262
2,262
27,336
27,336
27,336
85,275
85,275
85,275
542
542
542
14,609
14,609
14,609
234
234
234
0
9,984
0
9,984
9,984
282,590 282,590
282,590
11
11
11
0
396
0
396
0
396
6,960
6,960
5,660
5,660
6,960
5,660
33,239
83,638
732
83,638
732
0
0
0
0
150
41,983
0
43,517
0
43,517
0
43,517
39,417
80,042
909
FLAC
0
0
FLAC
FLAC
FLAC
150
41,983
150
41,983
240
1,480
33,239
39,417
80,042
909
FLHfT
67
17,325
1,480
83,638
732
39,417
80,042
909
13,94
3
17,325
1,480
33,239
FLAC
FLAC
13,943
240
17,325
Amortized
cost
kEUR
outside
through
Fair
profit or
profit or
value
Cost
loss
loss
IAS 17 12/31/2011
kEUR
kEUR
kEUR
kEUR
kEUR
13,943
240
14,108
332
14,108
295
37
14,108
332
*) The categories in this list are based on IAS 39. Finance leases are usually not within the scope of IAS 39, but IFRS 7.
Therefore, finances leases are disclosed separately.
F-123
Thereof broken down measurement categories as per IAS 39:
Loans and
receivables
Financial assets
available for sale
Financial assets
held for trading
measured at
amortized cost
Financial assets
held for trading
Measurement category
as per IAS 39
kEUR
LaR
Carrying
amount
9/30/2012
kEUR
Fair value
Fair value
Carrying
Fair value
Fair value
Amortized
outside profit through profit amount
Amortized
outside profit through profit
cost
Cost
or loss
or loss
12/31/2011
cost
Cost
or loss
or loss
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
171,240
171,240
0
0
0
145,155
145,155
0
0
0
230
0
230
0
0
1,480
0
1,480
0
0
7,444
0
0
0
7,444
2,496
0
0
0
2,496
462,093
462,093
0
0
0
454,105
454,105
0
0
0
8,802
0
0
0
8,802
5,992
0
0
295
5,696
AfS
FAHfT
FLAC
FLHfT
Thereof broken down by measurement categories as per IAS 7.27:
9/30/2012
ASSETS
Financial assets available
for sale
trading
EQUITY AND
LIABILITIES
trading
*)
**)
**)
12/31/2011
Level 1*)
Level 2**)
Level 3**)
Total
Level 1 Level 2 Level 3
Total
AfS
0
0
0
0
0
0
0
0
FAHfT
0
15
7,429
7,444
0
234
2,262
2,496
FLHfT
0
8,802
0
8,802
0
5,992
0
5,992
Level 1: fair values are determined based on publicly quoted market prices due to the fact that an active
market provides the best possible unbiased indication for the fair value of a financial asset or a financial
liability.
Level 2: If there is no active market for a financial instrument, a company determines the fair value using
measurement models. These methods include the use of the most recent transactions between experienced,
independent business partners willing to enter into an agreement, the comparison with the current fair value
of another, basically identical financial instrument, the use of option price models or the discounted cash
flow method. The fair value is estimated based on the results of a measurement method that uses market data
to the largest extent possible and is based as little as possible on company-specific data.
Level 3: The measurement models used at this level are not based on parameters observable on the market.
F-124
The financial instruments available for sale relate to investments in non-consolidated affiliated companies
and investments that do not exceed a 20 % share. They are recognized at cost due to the fact that the fair values are
not available and other admissible measurement methods do not provide reliable results either. These are shares not
quoted on the market. At present no sale is intended.
Cash and cash equivalents, trade accounts receivable, as well as other receivables are basically due within a
short period of time. Thus, their carrying amounts at the balance sheet date correspond to their fair value.
The fair values of the other non-current receivables which are due within more than one year correspond to
Trade accounts payable, as well as other liabilities usually fall due within a short period of time; the
recognized amounts correspond to the respective fair values.
The fair values of liabilities due payable to banks, notes payable and other financial liabilities are determined
as the present values of the payments relating to the debt and liabilities, taking into account the respective applicable
interest structure.
The termination options with regard to the industrial revenue bond are deemed derivative financial
instruments as defined in IAS 39 and shall be measured at fair value through profit and loss (cf. chapter 19.2 and
chapter 27.2). Therefore, the termination options fall into the "Financial assets held for trading" category.
As in the previous year, a Hull-White option price model is used for the computation of the fair value of the
termination options. In the Hull-White option price model, material input factors are based on data that cannot be
observed directly on the market. Interest and spread curves, credit ratings and volatilities are primarily used as input
factors.
Therefore, the fair value of the termination options is attributed to level 3. Level 3 developed as follows in
the short financial year (IFRS 7.27B(c)):
12/31/2011
- in other financial income
9/30/2012
2,261,852.00 EUR
5,166,708.98 EUR
7,428,560.98 EUR
According to IFRS 7.27B(e), a sensitivity analysis must be performed for input factors not directly
observable on the market that have a major impact on the measurement model and, at the same time, can be replaced
by plausible alternative assumptions. The following table shows the value of the termination options and their
sensitivity when using selected sensitivities. By using sensitivity analyses, the Group determines which impact a
change of the respective risk variables would have on the value of the termination option. Sensitivities with respect
to the change in the interest curve, the volatility and credit standing spreads are analyzed.
Sensitivity
Parallel shifting of the interest curve
+ 100 Basis points
- 100 Basis points
Change of volatility
+ 10 %
- 10 %
Change of credit standing spreads
+ 100 Basis points
- 100 Basis points
4,469,634.57 EUR
12,009,675.32 EUR
8,111,760.86 EUR
6,798,317.01 EUR
3,892,651.75 EUR
13,202,289.75 EUR
F-125
30.2
Interest
kEUR
Loans and
receivables (LaR)
Held-to-maturity
investments (HtM)
Available for sale
financial assets (AfS)
Held for trading
(FAHfT und FLHfT)
measured at amortized
cost (FLAC)
Finance lease
Subsequent recognition
Foreign
currency Impairat fair
transment
value
lation
loss
kEUR
kEUR
kEUR
Disposal
Net result
2012
kEUR
kEUR
2011
kEUR
1,221
0
-445
-615
0
162
862
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,000
0
0
0
2,000
-13,452
-21,691
0
90
0
0
-21,601
-1,592
0
0
0
0
-1,592
-29,312
-1,919
results. Only the allowances on trade receivables and currency effects attributed to the classes loans and receivables
are recorded in the operating result.
The fair value is disclosed in the financial result in the statement of profit and loss.
31
9/30/2012
kEUR
17,406
For details regarding deferred tax liabilities see chapter 20 "Deferred tax assets".
F-126
12/31/2011
kEUR
17,461
32
Expected to be due
Change
in the consolidated
group
Balance on
and
1/1/2012
currency
kEUR
kEUR
for anniversary obligations
for archiving obligations
for demolition obligations
Current provisions
for stock options
for warranty obligations
for customer bonuses
for compensations and
bonuses
for impending losses
for taxes
for fees and charges
for litigation
for interest
for other accrued liabilities
Addition
kEUR
Interest
effect
kEUR
Utilization
Reclassi- Balance on
>3/
> 12 /
Reversal fication 9/30/2012 < 3 months < 6 months > 6 months < 24 months > 24 months
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
1,140
403
30
1,573
10
6
0
16
67
6
0
72
23
13
2
38
130
0
0
130
0
68
0
68
-9
0
0
-9
1,101
360
31
1,492
0
0
0
0
0
0
0
0
0
0
0
0
169
0
0
169
932
360
31
1,323
26,652
2,906
3,059
0
14
10
0
870
4,546
0
0
0
0
919
3,075
5,364
28
111
0
0
0
21,289
2,844
4,429
18,788
1,129
3,042
2,500
1,175
816
0
539
571
0
0
0
0
0
0
404
125
358
29
52
0
330
33,915
35,488
11
0
0
0
0
0
0
35
51
590
31
344
84
22
600
877
7,963
8,035
0
0
0
0
0
0
0
0
38
168
48
2
29
38
0
912
5,189
5,319
0
0
0
0
4
0
0
5,507
5,575
9
0
0
0
0
0
0
9
0
845
109
701
84
32
600
294
31,226
32,718
435
31
343
84
32
0
272
24,155
24,155
313
0
0
0
0
600
22
5,427
5,427
98
78
358
0
0
0
0
1,644
1,644
0
0
0
0
0
0
0
0
169
0
0
0
0
0
0
0
0
1,323
F-127
e)
Stock options
For the explanatory comments regarding the stock option program and the corresponding provisions see
chapter 35. The amount of the present value of the expected cost and the expected maturity can be derived in the
above table.
f)
A provision in the amount of the present value of the expected costs was recorded for obligations for
employee anniversaries. The respective expense was recorded in personnel expenses in the statement of profit and
loss. Please find the respective maturities in the table below:
g)
Guaranty obligations
Guaranty obligations usually occur in the course of trading. The Group is bound by the law, contracts or
factually to perform repair for a certain period of time after the sale or replace the item. These obligations are
accounted for by recorded provisions in the amount of the respective expected obligation. Please find the respective
maturities in the table below:
h)
Customer discounts
Customer discount agreements have been entered into with various customers. Provisions in the anticipated
amounts were recorded for the obligations under those agreements. Please find the respective maturities in the table
below:
Other disclosures
33
33.1 Capital risk management
The business policy of Mondi Consumer Packaging (formerly NORDENIA Group) aims at securing the
Company's continuation, consistently generating appropriate yields and steadily increasing the corporate value. The
goal is to reduce net leverage.
The net leverage for accounting purposes at the balance sheet dates is as follows:
Net leverage
9/30/2012
kEUR
Bond
Interest-bearing loans and liabilities
Notes payable
Financial assets
Liquid funds
12/31/2011
kEUR
+/in %
273,258
13,188
6,428
278,508
11,804
6,960
-1.9
11.7
-7.6
39,417
909
795
33,239
732
962
18.6
24.3
-17.4
33,068
300,927
27,336
304,868
21.0
-1.3
At the balance sheet date, the cash and cash equivalents totaled EUR 33,068k (prev. year: EUR 27,336k).
F-128
In July 2010, a bond – ultimately due in 2017, nominal volume of EUR 280,000k, 9.75 % coupon – was
successfully placed on the market. In addition, a subordinated loan in the amount of EUR 10,000k, ranking equally
to the bond, was taken up. A credit line of EUR 100,000k serves as an additional liquidity reserve. This credit line
has been available since July 9, 2010 for a period of 3 years and had been utilized in the amount of EUR 35,000k
(main line) and EUR 3,154k (ledger line). The pros of the overall refinancing concept: simpler financing structure of
Mondi Consumer Packaging (formerly NORDENIA Group) and higher level of financing security due to longer
terms of the new financing involvement. As a result of the refinancing, Mondi Consumer Packaging (formerly
NORDENIA Group) is less dependent on financing by banks and prepared better for changes in interest rates. In
addition, the refinancing serves the purpose of accessing the capital market and showing higher capital market
presence. At the same time, the Group sells receivables without recourse under an ABS program. This serves the
purpose of short-term financing on the money market. Mondi Consumer Packaging (formerly NORDENIA Group)
may transfer receivables in the maximum nominal amount of EUR 70,000k and USD 10,000k in total. As at
September 30, 2012, the Group had sold receivables in the total equivalent amount of EUR 52,691k (prev. year:
EUR 49,571k).
The Group controls its debt using recognized key ratios.
The ratio of the net financial liabilities and the adjusted EBITDA decreased slightly over the previous year
from 3.0 to 3.1.
At September 30, 2012, the ratio of the financial liabilities preferential to the bond and the adjusted EBITDA
was 0.5. In the previous year, this ratio was 0.4 and thus slightly decreased.
The ratio of the adjusted EBITDA and the interest result – EBITDA interest coverage – totaled 3.2 in the
reporting period (prev. year: 3.2). This value has not changed due to the interest obligations from the bond that
remained equal and that account for the largest portion of the interest obligations.
Mondi Consumer Packaging (formerly NORDENIA Group) met its contractually agreed-upon financial
covenants in the reporting period with significant headroom.
The issuer's rating of the NORDENIA Group was confirmed in the reporting period by two independent
rating agencies. The rating agency Moody's rates the issuer at B1 (stable), while Standard & Poor's rates the issuer at
B+ (positive).
33.2 Principles of financial risk management
In respect to the assets, liabilities and intended transactions, Mondi Consumer Packaging (formerly
NORDENIA Group) is in particular subject to risks from changes in interest rates and exchange rates, as well as
changes in prices of raw materials. The goal of the financial risk management is to minimize those market risks
resulting from current operating and finance-oriented activities. It does so by way of mainly currency-related
financing and application of selected derivative financial instruments (interest and currency derivatives). However,
in general, only risks affecting the Group’s cash flow are hedged. Derivative financial instruments are only used as
collaterals for economic purposes. They are not held for trading or other investment purposes.
The basic aspects of the financial policies are determined by the management board annually and presented
in detail in the treasury guidelines. The Group Treasury is responsible for the realization of the financial policy and
the consistent financial risk management. The use of derivatives is subject to a clear authorization system. On
principle, these transactions by Treasury are coordinated by the top-tier parent of the Group. Transaction risks are
hedged locally by subsidiaries, however they require approval.
Mondi Consumer Packaging (formerly NORDENIA Group) primarily uses interest swaps and exchange
futures. The use of these derivative instruments and the realization of a risk minimization strategy serve the purpose
of hedging and minimizing interest rate and exchange rate fluctuations. The hedge transactions are entered into only
with financial services providers that have good credit standing. As a result of the risk-minimizing dispersion of the
hedge transactions the address loss risk is reduced.
F-129
33.3
Market price risks
factors affecting the value of a financial instrument. The market price risk is managed via financial hedging.
33.4
Being an internationally operating company and due to the related activities, Mondi Consumer Packaging
(formerly NORDENIA Group) is subject to foreign exchange risks. The foreign exchange risks that Mondi
Consumer Packaging (formerly NORDENIA Group) faces result from investments, financing and operating
activities.
Mondi Consumer Packaging (formerly NORDENIA Group) hedges its cash flows at both at Group and at
company level. At company level, future transactions that are highly likely to occur are hedged against foreign
exchange rate fluctuation risks. For this purpose, the company uses a rolling plan for individual circumstances.
If the occurrence criteria are satisfied, those hedges are recognized as cash flow hedges as set forth in IAS 39
Financial instruments: Recognition and Measurement. The effective portion of the gains or losses from the hedge
instruments are recorded directly in equity and reclassified into profit or loss as soon as the hedged cash flows also
affect profit or loss or the prerequisites of the hedge accounting are no longer met.
If all other variables had remained constant and the EUR had been subject to a 10 % appreciation relative to
the market development for the transactions denominated in USD, the revenues in the reporting period would have
decreased by about EUR 9,498k (prev. year: EUR 10,882k). Under the same circumstances, the revenues
denominated in PLN would have decreased in the reporting period by about EUR 399k (prev. year: EUR 519k).
Foreign exchange risks resulting from the translation of the assets and liabilities accounts of foreign
operations into the reporting currency of the Group are not hedged.
Receivables and liabilities of Mondi Consumer Packaging (formerly NORDENIA Group) are basically
hedged for each individual transaction by way of exchange futures to cover risks from changes in exchange rates. In
case of foreign currency cash flows expected in the future, the plan data is documented and the Group aims at hedge
accounting in the cash flow hedges category.
Exchange futures are recorded in profit or loss at the balance sheet date (no hedge accounting).
Mondi Consumer Packaging (formerly NORDENIA Group) uses a portfolio approach for the hedging of cash
accounts and foreign currency loans. Individual risks are summarized and only the remaining risks are hedged by
exchange futures. According to IAS 39 this transaction shall not be recorded in the hedge accounting; the market
values are recorded directly in profit or loss.
33.5
Interest risks
The financing of the business activities results in interest risks. The interest risk is the result of the
uncertainty about the future development of the interest rates and affects all interest-bearing items and their
derivatives, as well as future cash flows. The risk is deemed to equal the volume of non-hedged variable interestbearing items. Among the material financing agreements, the issued bond is subject to a fixed coupon. Hedge
instruments are in part used for financing agreements bearing variable interests – which comprise the subordinated
loan ranking equally to the bon, the syndicated credit line and the ABS program – in order to fix the interest rates
over a longer period of time. The risk of increasing variable short-term interests is minimized by hedging with
interest swaps. At the balance sheet date, the Group had payer swaps at a nominal value of EUR 60,000k and an
average fixed interest rate of 3.48 % (prev. year: EUR 60,000k, 3.48 %). The negative fair value of the interest
swaps totaled EUR 8,562k at the balance sheet date (prev. year: EUR 5,660k). There was no positive fair value,
neither in the reporting nor the previous year.
For the purpose of presenting market risks, IFRS 7 requires sensitivity analyses that demonstrate the impact
of hypothetical changes of relevant risk variables on the earnings//losses and equity. In addition to foreign exchange
F-130
risks, Mondi Consumer Packaging (formerly NORDENIA Group) is subject to risks resulting from any changes in
interest rates. The periodical effects are determined by relating the hypothetical changes of the risk variables to the
financial instruments inventories at the balance sheet date. For this purpose, the Group assumes that the inventories
at the balance sheet date are representative of the entire financial year.
If the interest rates at the balance sheet had been 100 basis points lower / higher and all other variables had
remained constant, the fair value of the interest swaps would have been EUR 3,788k higher / EUR 4,101k lower
(prev. year: EUR 4,096k higher / EUR 4,450k lower). If the interest rates at the balance sheet had been 100 basis
points higher and all other variables had remained constant, the financing costs relating to the variable portion of the
financing structure would have been EUR 492k higher (prev. year: EUR 438k higher).
Redemption options included in the industrial revenue bond are measured and disclosed separately.
33.6
Mondi Consumer Packaging (formerly NORDENIA Group) primarily faces raw materials price risks in the
granulates segment. According to Mondi Consumer Packaging (formerly NORDENIA Group), there was no
efficient market for the minimization of the risks at the balance sheet date. The Group continues to observe the
market. Price risks are minimized by way of corresponding agreements with business partners.
33.7
Credit risk
favorable credit status of a business partner may result in a decrease in the value of the receivable due from said
business partner.
Mondi Consumer Packaging (formerly NORDENIA Group) is in particular subject to credit risks in its
operating business activities. In this respect, receivables of the individual companies are permanently monitored and
credit risks are accounted for by recording itemized allowances and general itemized allowances. In addition, trade
receivables of EUR 5,458k were secured by way of commercial credit insurances at September 30, 2012. The
remaining financial assets, on the other hand, are no secured or hedged. Thus, there is a net risk position equaling
EUR 88,693k (trade receivables in the amount of EUR 94,151k, less trade receivables insured by commercial credit
insurances of EUR 5,458k).
The maximum credit risk is reflected in the carrying amounts of the financial assets disclosed in the balance
sheet (incl. derivative financial instruments with positive market value). The risk of lost receivables that are neither
overdue nor impaired is considered rather low due to the excellent credit standing of the customers. Hence, about
two third of the revenues are generated from the top 10 customers that are among the major manufacturers of
consumer goods and whose excellent credit standing (usually investment grade) results in a rather low probability of
a loss of the receivables.
33.8
Liquidity risk
To ensure sufficient liquidity at all times is a core task of the financial management of Mondi Consumer
Packaging (formerly NORDENIA Group). The term liquidity risk also includes the question of access to cash
equivalents. Primarily the refinancing of financial liabilities as well as interest rates payable should be taken into
account. Under the financial reporting system information regarding the actual financial status and expected cash
flows of the individual group companies is provided in a centralized manner. A farsighted liquidity plan ensures
solvency at all times. Hence, there is always a current view of the Group's liquidity development.
In order to ensure solvency and financial flexibility of Mondi Consumer Packaging (formerly NORDENIA
Group) at all times, a credit facility was established in the course of the refinancing measures in 2010 and thus a
liquidity reserve in the form of agreed-upon credit lines is provided.
The liquidity risk also reflects the tradability of financial instruments. The lack of liquidity may result in a
lower value of financial instruments. The liquidity risk is reduced by dispersing financial transactions. Top-class
liquid instruments are preferred for hedging purposes.
F-131
The following table shows the financial liabilities and derivative financial liabilities of the Group broken
down by maturity and based on the residual maturity at the balance sheet date and on the agreed-upon due date. The
amounts listed in the table are non-discounted cash flows. Items that fall due within the next twelve months equal
their carrying amounts due to the fact that the effects of the discounting are not material.
Cash flows from financial
liabilities and derivative
financial liabilities
Bonds*)
Notes payable**)
Trade payables**)
Current income tax
liabilities**)
- thereof personnel-related
liabilities
liabilities
- thereof accruals
Other non-financial
liabilities**)
- thereof downpayments
received on orders
- thereof liabilities from
the accrual of
government grants
- thereof for taxes
- thereof for social security
liabilities
- thereof accruals
*)
**)
Due within
one year
1 to 5 years
more than 5 years
Total
9/30/2012 12/31/2011 9/30/2012 12/31/2011 9/30/2012 12/31/2011 9/30/2012 12/31/2011
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
542
631
10,542
11,262
0
0
11,084
11,893
27,300
27,300 375,550
109,200
13,650
307,300
416,500 443,800
40,588
34,892
3,233
1,849
0
0
43,821
36,741
919
744
0
0
0
0
919
744
80,042
83,638
0
11
0
0
80,042
83,649
5,552
56,316
1,135
58,685
0
7,897
0
5,006
0
12,811
0
12,293
5,552
77,024
1,135
75,984
2,825
13,942
3,063
14,838
0
2,180
0
4,610
0
4,249
0
6,633
2,825
20,371
3,063
26,081
9,493
30,055
10,525
30,259
5,568
150
58
338
8,562
0
5,660
0
23,623
30,204
16,243
30,597
5,247
3,488
623
277
26
27
5,897
3,792
1,855
143
0
0
0
0
1,855
143
0
1,474
565
4
1,492
540
589
0
0
234
0
0
5
0
0
6
0
0
594
1,474
565
244
1,492
540
472
883
216,506
299
1,010
210,513
34
0
397,845
43
0
127,605
21
0
26,487
21
0
319,620
527
883
640,838
363
1,010
657,738
In general, the Company intends to repay the above financial debt within the aforementioned due periods. In
case of positive cash flow development, the Company will repay the liabilities due to banks early.Derivative
financial instruments
The market value of the financial instruments is determined by the respective partner in the derivative
transaction based on recognized calculation methods.
The determined market values are reported in the balance sheet under Other receivables and Other liabilities.
date, the market values and nominal values are as follows:
F-132
Non-current
Due within
1 to 5 years
more than
5 years
9/30/ 12/31/
9/30/ 12/31/
2012 2011
2012 2011
kEUR kEUR
kEUR kEUR
Market value of derivative instruments
ASSETS
held for trading
Redemption option
Cash flow hedges
held for trading
Interest swaps
ASSETS
held for trading
Redemption option
Cash flow hedges
held for trading
Interest swaps
Current
one year
Total
9/30/ 12/31/
2012 2011
kEUR kEUR
9/30/ 12/31/2
2012
011
kEUR kEUR
0
0
0
0
0
7,429
0
2,262
15
0
234
0
15
7,429
234
2,262
0
0
0
0
0
295
0
295
0
0
0
0
0
8,562
0
5,660
240
0
37
0
240
8,562
37
5,660
0
0
0
0
0
7,429
0
2,262
0
0
0
0
0
7,000
0
0
0
0
0
0
60,000 60,000
32,183
0
6,685
0
3,500 22,495
0
0
3,500 22,495
7,429 2,262
0
7,000
32,183 6,685
60,000 60,000
Derivative financial instruments held for trading are classified as current assets or liabilities. The full fair
value of a derivative hedge instrument is classified as a non-current asset / liability when and if the residual maturity
of the hedged instrument exceeds twelve months; otherwise, the instrument is classified as a current asset / liability.
(c)
Exchange futures
The negative fair values of outstanding exchange futures totaled EUR 240k at September 30, 2012 (prev.
year: EUR 332k) and are disclosed as financial liabilities (cf. chapter 30.1). Gains and losses from exchange futures
are recorded in profit and loss. There is no hedge accounting.
(d)
Interest swaps
The negative fair values of outstanding interest swaps totaled EUR 8,562k at September 30, 2012 (prev. year:
EUR 5,660k) and are disclosed as financial liabilities (cf. chapter 30.1).
As at September 30, 2012, the fixed interest rates range from 3.38 % to 3.59 % (prev. year: 3.38 % to
3.59 %). The most significant variable interest rates are the EURO Interbank Offered Rate (EURIBOR) and the
London Interbank Offered Rate (LIBOR). At September 30, 2012, no gains or losses from interest swaps had been
recorded in equity (other reserves) but were recorded in profit and loss. There is no hedge accounting.
34
F-133
In 2006, the annual general meeting of Mondi CP International AG (formerly NORDENIA International AG)
resolved to introduce a stock option program for the German and foreign executives of Mondi CP (formerly
NORDENIA) that was implemented the same year. This stock option program set forth the option to choose
between cash compensation and compensation in equity capital instruments. As of the 2009 financial year, the stock
option program has been capitalized in the consolidated financial statements in accordance with a share-based
remuneration with cash compensation.
By way of resolution by the annual general meeting of Mondi Consumer Packaging International AG
(formerly NORDENIA International AG) dated August 27, 2010, the condition capital for the securitization of the
stock option program was revoked with the approval of all option holders. The directors and the Supervisory Board
of Mondi Consumer Packaging International AG (formerly NORDENIA International AG) passed a resolution on
October 26 or 27, 2010, respectively, on the continuation of the program as a virtual option program and the
corresponding adjustment of the criteria for the participation in the program; all option holders granted their
approval. New stocks can therefore no longer result from the performance of the option program.
The criteria for the participation in the program were primarily based on the intended merger of Mondi
Consumer Packaging International AG onto NORDENIA International AG (formerly NORDENIA International
AG) due to the fact that the stock option program is transferred to the assuming entity as a result of the merger. As a
result of the continuation of the program as a virtual stock option program that grants the option holders a cash
compensation only, it is not represented in the consolidated financial statements in a different manner due to the fact
that the stock option program had been disclosed based on a share-based remuneration with cash compensation since
the 2009 financial year already.
Mondi Consumer Packaging International AG granted a total of 2,379,094 options to directors, members of
the managing bodies of group companies of Mondi Consumer Packaging International AG, and other executives of
Mondi Consumer Packaging International AG and its group companies. The vesting period has expired in respect of
all options granted to the option holders. The options have a term expiring on March 17, 2026, after the adjustment
of the criteria for the participation in the program the term was extended by 10 years (original expiration date:
March 17, 2016). In case of an exit event, full vesting occurs even if the 5-year period has not yet expired. Stock
options that are not exercised or could not be exercised by the end of the term on March 17, 2026 shall be forfeited
without the holder being entitled to replacement or compensation. An exit or payment event is the date at which
either the majority of the shares in Mondi Consumer Packaging International AG are sold or in case of an IPO of
Mondi Consumer Packaging International AG. In the event the employment is terminated by Mondi Consumer
Packaging International AG for due cause, the option rights are forfeited. In the event the employment is otherwise
terminated, Mondi Consumer Packaging International AG has the right to pay compensation to the withdrawing
option holder in lieu of the options.
Prior to the merger, the options granted the holder the right to receive payment equaling the value of the
option less a virtual purchase price of EUR 4.39 per option in the case of a payment event. The value of the option
equaled the fair value of a stock of Mondi Consumer Packaging International AG. However, the holder was only
entitled when and if the value of the option exceeded the virtual purchase price by at least 10 %, i.e. totaled at least
EUR 4.829 per option (performance target). The option terms set forth that the option program shall be continued
with Mondi Consumer Packaging International AG after the merger, with the option holders holding the number of
options already granted and the value of each option being based on the fair value of a stock of Mondi Consumer
Packaging International AG. For any changes in the value resulting from the merger, the option holders were
granted a compensation in accordance with the option terms by taking into account a voluntary payment of Mondi
Consumer Packaging International AG to the option holders in August 2010 in the amount of EUR 2.51 per option
(rounded) that are credited to their rights arising under the option program; the virtual purchase price of EUR 4.39
per option ceases to apply as of the effective date of the merger. Hence, the Company accounts for the impairment
of the option value as a result of the merger taking into account the measurement on which the conversion ratio of
the merger is based. Upon abolition of the virtual purchase price, the performance target was also adjusted. The
previous performance target according to which the fair value per stock of Mondi Consumer Packaging International
AG must at least total EUR 4.829 in case of a payment event was adjusted in accordance with the conversion ratio
set forth in the merger agreement in such manner that the value of each stock of Mondi Consumer Packaging
International AG must at least equal EUR 2.76 at the respective date.
F-134
By way of Agreement dated July 10, 2012, the Company's majority shareholders (OCM Luxembourg
Nordenia POF S.à.r.l and OCM Luxembourg Nordenia OPPS S.à.r.l) as well as other stockholders to sell more than
87 % of the Company's stocks to an independent third party, namely Blitz 12-403 AG which is a member of the
Mondi Group. The sale was completed on September 30 / October 1, 2012. Upon completion of the sale, the exit
event occurred.
The fair value of the issued options always equals the fair value of an individual bearer share of Mondi
Consumer Packaging International AG.
The company value and thus the fair value of the individual bearer shares of Mondi Consumer Packaging
International AG at the balance sheet date was determined based on the stipulations made in the company purchase
agreement entered into with the Mondi Group.
Hence, the fair value of the outstanding virtual stock options at the balance sheet date amounts to EUR 8.95
(prev. year: EUR 11.20)
As at December 31, 2011, the provisions relating to the stock options total EUR 21,289k (prev. year: EUR
26,652k).
9/30/2012
12/31/2011
Granted options in units (maximum number: 2,838,000)
Units
Units
Outstanding options on January 1
Granted, forfeited, exercised or expired options
Outstanding options on September 30
Exercisable options on September 30
2,379,094
0
2,379,094
0
2,379,094
0
2,379,094
0
The directors of Mondi Consumer Packaging International AG currently hold a total of 1,534,899 options as
follows: Mr. Landwehr 613,959 options, Mr. Picolin 460,470 options, and Mr. Busacker 460,470 options. No
options have been granted to members of the Supervisory Board.
35
Explanatory comments on the consolidated cash flow statement
35.1
Cash
Cash, comprising cash on hand and short-term bank balances, combines cash and cash equivalents. At the
balance sheet date, they totaled EUR 33,068k (prev. year: EUR 27,336k).
The cash also includes cash from pro rata consolidated companies in the amount of EUR 0k (prev. year: EUR
805k).
35.2
Cash flow resulting from current operating activities
The cash flow from current operating activities decreased in the reporting period by EUR 16,578k from EUR
35,513k in the accumulated previous year to EUR 18,935k. The EBITDA reduced by EUR 20,169k is offset against
tax payments that decreased by EUR 7,275k and interest payments that decreased by EUR 1,031k. The outflow of
cash from the increase in working capital changed by EUR 5,305k.
35.3
The cash paid for investing activities decreased over the 2011 calendar year by EUR 11,832k from EUR
33,255k to EUR 21,423k. The investments in property, plant and equipment and intangible assets decreased by EUR
10,187k from EUR 37,511k in the 2011 calendar year to EUR 27,324k in the reporting period. The inflow from the
disposal of assets decreased in the reporting period by EUR 2,485k. The inflow from the disposal of subsidiaries, on
the other hand, increased by EUR 3,643k over the previous year. The cash generated from the sale of consolidated
companies of EUR 3,643k related to the sale of the shares in NORDENIA Deutschland Emsdetten GmbH,
Emsdetten.
F-135
35.4
Cash flow resulting from financing activities
The cash flow from financing activities increased by EUR 17,314k from EUR -10,473k to EUR 6,841k over
the 2011 calendar year due to increased debt. The cash flows from financing activities have mainly increased over
the previous year due to the fact that both interest payments were made on the bond despite the financial year being
a short financial year. The utilization of the credit line of EUR 100,000k slightly increased from EUR 33,083k to
EUR 38,154k in the reporting period (utilization of the main line: EUR 35,000k, utilization of the ledger lines: EUR
3,154k).
36
Segment information
The management based the determination of the business segments on the reports available to the
management board.
geographic regions. Based on the internal control, the Group is divided into the divisions Advanced Films &
Components (AFC), Consumer Flexible Packaging (CFP) and Services (for service companies). This division is
based on the fixed attribution of the companies. Both operating divisions operate in the endmarkets "hygiene",
"converting", "food", "petcare", and "garden products", "beauty and healthcare", "industrial", "detergents &
cleansing agents" and "others".
The companies in the Service division mainly render intercompany services.
The management board analyzes the results of the business segments, et alia based on an adjusted EBITDA.
This assessment basis excludes one-time expenses of the business segments, ABS expenses, management fees,
expenses relating to the stock option program, gains and losses from the sale of assets, as well as compensation and
reorganization expenses.
The segment information is based on the same reporting and measurement methods as in the consolidated
financial statements. The reconciliation column contains the cross-segment effects from consolidation.
According to the internal reporting, the following key ratios were defined as control ratios:
- Gross margin
- Adjusted EBITDA
- Adjusted EBITDA in % of the revenues
- External working capital, including
- Inventories
- Working capital-relevant assets
- Working capital-relevant receivables
- Working capital-relevant debt
- Working capital-relevant liabilities
- Average number of employees per year
Revenues of EUR 260,533k (prev. year: EUR 329,340k) were generated with one external customer. The
customer is served by companies of the divisions AFC and CFP.
F-136
Segment information by divisions
Tonnage
Total revenues of the
divisions
Internal revenues of the
divisions
Revenues
Gross margin
Adjusted EBITDA
Adjusted EBITDA in % of
the revenues
Adjustments
EBITDA
Depreciation and
amortization
EBIT
Investments (CAPEX) 1)
Inventories
Working capital-relevant
receivables 2)
assets
liabilities 3)
debt
External working capital 4)
Average number of
employees per year 5)
t
AFC
9/30/
12/31/
2012
2011
126,585 170,472
CFP
9/30/
12/31/
2012
2011
60,177
84,162
Services
9/30/
12/31/
2012
2011
0
0
Reconciliation
9/30/
12/31/
2012
2011
-5,876
-9,964
Group
9/30/
12/31/
2012
2011
180,886
244,670
kEUR
423,197
569,164
282,034
372,554
8,908
12,320
0
0
714,139
954,038
kEUR
kEUR
kEUR
kEUR
-1,178
422,019
70,149
53,848
-2,471
566,693
94,968
75,155
-12,936
269,098
38,749
24,987
-20,558
351,996
49,712
31,631
-959
7,949
6,572
-4,241
-1,528
10,792
9,192
-4,955
-32,625
-32,625
-6,220
142
-48,698
-48,698
-9,448
-760
-47,698
666,441
109,250
74,736
-73,255
880,783
144,423
101,071
%
kEUR
kEUR
12.8
-713
54,562
13.3
-1,170
76,326
9.3
987
24,000
9.0
721
30,910
-53.4
-3,052
-1,189
-45.9
3,538
-8,494
-0.4
61
81
1.6
358
-1,118
11.2
-2,717
77,453
11.5
3,447
97,624
kEUR
kEUR
kEUR
10,631
43,931
11,856
14,497
61,829
19,974
14,045
9,955
11,410
12,902
18,008
18,672
803
-1,993
467
1,122
-9,616
1,130
-33
113
0
20
-1,138
0
25,446
52,007
23,733
28,541
69,082
39,776
kEUR
56,741
52,325
56,286
52,654
847
721
-735
-780
113,139
104,920
kEUR
54,611
48,663
33,378
32,679
1,591
196
0
0
89,581
81,538
kEUR
111,352
100,988
89,664
85,333
2,438
917
-735
-780
202,719
186,458
kEUR
46,433
53,730
26,876
22,829
438
512
0
-81
73,746
76,990
kEUR
kEUR
46,433
64,919
53,730
47,258
26,876
62,788
22,829
62,504
438
2,000
512
405
0
-735
-81
-699
73,746
128,973
76,990
109,468
kEUR
1,351
1,462
1,479
1,444
118
121
0
0
2,948
3,027
F-137
1)
2)
3)
4)
5)
in property, plant and equipment and intangible assets
working capital-relevant receivables comprise trade receivables, creditors with debit balances less deferred
customer bonuses.
working capital-relevant liabilities comprise trade payables, debtors with credit balances less liabilities from
suppliers' bonuses.
external working capital is the Company's control ratio; hence, the assets and liabilities relevant for it are
disclosed. The disclosure corresponds to the regular reporting to the management board.
based on the number of full-time employees, including managemen
Reconciliation of EBIT to EBT:
01/01-09/30/
2012
kEUR
EBIT
Financial expenses
Financial income
EBT
52,007
-37,212
13,547
28,342
01/01-12/31/
2011
kEUR
69,082
-77,493
31,648
23,237
Reconciliation from EBITDA to adjusted EBITDA
01/01-09/30/
2012
kEUR
EBITDA
Management fees
Restructuring charges
Compensation expenses
Gains (-) / losses (+) from the disposal of assets
Extraordinary expenses from refinancing and merger
Extraordinary expenses from post-merger integration
Mondi/Nordenia
Other extraordinary expenses
Adjusted EBITDA
01/01-12/31/
2011
kEUR
77,453
0
-5,364
842
957
13
0
-36
97,624
156
511
406
797
-1,359
945
1,978
468
403
74,736
0
13
101,071
The amounts – based on the segment assets – that are reported to the management board are measured in the
same manner as in this report. These assets are attributed to the respective divisions based on the attribution of the
companies.
The integration of Mondi Consumer Packaging International AG (formerly Nordenia International AG) into
the Mondi Group will result in changes in the segment reporting the impact of which currently not be estimated.
F-138
Reconciliation of the segment assets to the assets according to the consolidated balance sheet:
9/30/2012
kEUR
Working capital-relevant segment assets (excl. ABS)
Financial assets
Other assets
Intangible assets
Deferred tax assets
Assets accord. to balance sheet
202,720
215,925
33,068
24,788
38,344
8,380
10,715
390
0
534,330
12/31/2011
kEUR
186,458
217,329
27,336
21,067
24,575
9,395
12,429
500
5,326
504,415
The amounts – based on the segment debts – that are reported to the management board are measured in the
same manner as in this report. These debts are attributed to the respective divisions based on the attribution of the
companies.
Reconciliation of the segment debts to the debts as per the consolidated balance sheet:
9/30/2012
kEUR
Working capital-relevant segment debt
Bond
Pension provisions
Subordinated loans
Notes payable
Liabilities available for sale
73,746
280,687
131,923
42,616
17,406
19,819
0
5,552
909
0
572,658
F-139
12/31/2011
kEUR
76,990
280,770
118,728
33,241
17,461
14,307
9,984
1,135
732
2,194
555,542
The revenues are broken down by regions as follows:
1/1-9/30/
2012
kEUR
Germany
Eastern Europe
Europe
North America *)
Asia/Pacific
206,833
167,036
114,959
488,828
73,367
80,696
23,550
666,441
1/1-12/31/
2011
kEUR
283,455
214,555
141,391
639,401
108,527
106,376
26,479
880,783
*) EUR 61,636k (prev. year: EUR 101,537k) of the total revenues are generated in the United States, also within the
North American region.
For a further breakdown of the revenues by categories see chapter 3.
The non-current assets are broken down by regions as follows:
9/30/2012
kEUR
Germany
Eastern Europe
Europe
North America *)
Asia/Pacific
124,176
13,511
41,531
179,218
37,472
12,255
228,945
37,472
F-140
12/31/2011
kEUR
129,567
13,587
37,488
180,643
36,471
9,326
226,439
36,471
37
Chapter 38 also includes disclosures required pursuant to Sec. 315a HGB [German Commercial Code].
Mondi Consumer Packaging (formerly NORDENIA Group) is controlled by OCM Luxembourg Nordenia
POF Sarl, 26 A, boulevard Royal, L-2449 Luxembourg (hereinafter referred to as "OCM / Nordenia POF“) that is
the majority shareholder holding more than 50 % of the stocks. Furthermore, OCM Luxembourg Nordenia OPPS
Sarl, 26 A, boulevard Royal, L-2449 Luxembourg (hereinafter referred to as "OCM / Nordenia OPPS“) is an
affiliated company of OCM / Nordenia POF and holds more than 30 % of the stocks.
Management board of Mondi Consumer Packaging International AG (formerly NORDENIA International
AG):
Mr. Dipl.-Ingenieur Ralph Landwehr (Chairman) [degree in Engineering]
Mr. Dipl.-Wirtschaftsingenieur Andreas Picolin (Deputy Chairman) [degree in Industrial Engineering]
Mr. Dipl.-Wirtschaftsingenieur Andreas Busacker (CFO) [degree in Industrial Engineering]
Supervisory board of Mondi Consumer Packaging International AG (formerly NORDENIA International
AG):
CEO Europe & International Peter J. Oswald (Chairman)
CFO Mondi Group Andrew King (Deputy Chairman)
CFO Europe & International Franz Hiesinger
CEO Fibre Packaging Thomas Schaebinger
Mr. Ewald Unterste-Wilms (employee representative), merchant
Mr. Manfred Kasper (employee representative), technical clerk work preparation
as well as other key management personnel.
In addition to the consolidated subsidiaries, Mondi Consumer Packaging International AG (formerly
NORDENIA International AG) is related directly or indirectly through its ordinary business operations with the
following affiliated non-consolidated companies:
Company
Status
OOO NORDENIA Samara, Samara/Russia
37.1
Related - not material
Relations with companies not consolidated in full
9/30/2012
kEUR
314
0
12/31/2011
kEUR
542
0
The total scope of the transactions in the reporting period totaled EUR 157k (prev. year: EUR 210k). It
consist of payments received on receivables due from OOO NORDENIA Samara, Samara/Russia. Receivables due
from Dalian DANOR Printing Packaging Company, Dalian/China in the amount of EUR 70k were reclassified into
other external receivables after the sale of the company on September 26, 2012.
Impairment losses were recorded in the amount of EUR 893k (prev. year: EUR 893k) on receivables of EUR
1,207k (prev. year: EUR 1,364k) due from OOO NORDENIA Samara, Samara/Russia. No additional impairment
losses were recorded in the current year. The receivables result from the sale of goods.
F-141
37.2
OCM Luxembourg POF III S.a.r.l., a company related to the two shareholders of NORDENIA international
AG, OCM Luxembourg Nordenia POF Sarl and OCM Luxembourg Nordenia OPPS Sarl, rendered services to
Mondi Consumer Packaging International AG (formerly NORDENIA International AG) under a Management
Consulting Services Agreement effective until September 30, 2012. The scope of those services totals up to EUR
300k p.a. No expenditure under this service agreement was incurred in the reporting period.
37.3
Remuneration of the Supervisory Board
The total remuneration of the Supervisory Board of Mondi Consumer Packaging International AG (formerly
NORDENIA International AG) for the performance of the tasks at the parent and the subsidiaries totaled EUR 97k
for the reporting period after the merger (prev. year: EUR 90k).
No advance payments or loans were granted to members of the supervisory board in the last two years.
Neither did these members of the supervisory board receive any remuneration or benefit for personal services such
Emolument of the Management Board of Mondi Consumer Packaging International AG (formerly
1/1-9/30/
2012
kEUR
1/1-12/31/
2011
kEUR
1,604
2,133
Post-termination benefits: Provisions were recorded in the consolidated financial statements in the amount of
EUR 6,488k (prev. year: EUR 4,181k) for future pensions to former members of the Management Board.
Provisions were recorded in the consolidated financial statements in the amount of EUR 13,041k (prev. year: EUR
10,705k) for current pensions and pension commitments to former members of the Management Board and their
survivors. The total remuneration of former members of the Management Board and their survivors totals EUR
585k (prev. year: EUR 766k). The members of the Management Board received payments of EUR 0k (prev. year:
EUR 0k) under the stock option program. At the balance sheet date, the provisions relating to the stock options
granted to members of the Management Board total EUR 13,735k (prev. year: EUR 17,190k).
No advance payments or loans were granted to of the Management Board in the 2012 financial year.
37.4
Exemption as per Sec. 264 para. 3 HGB and Sec. 264b HGB
Pursuant to Sec. 264 para. 3 HGB and Sec. 264b HGB, the consolidation of the following fully consolidated
companies are exempt from the audit obligation and the obligation to publicly disclose the financial statements and
prepare notes and, if any, a management's report:
Name
Mondi Gronau GmbH (formerly NORDENIA Deutschland Gronau GmbH)
Mondi Osterburken GmbH (formerly NORDENIA Deutschland Osterburken
GmbH)
Mondi Halle GmbH (formerly NORDENIA Deutschland Halle GmbH)
Mondi Consumer Packaging Development GmbH (formerly Nordenia International
Development GmbH)
Nordenia International Beteiligungs GmbH & Co. KG
Mondi Consumer Packaging Technologies GmbH (formerly NORDENIA
Technologies GmbH)
F-142
Registered office
Gronau/Westf.
Osterburken
Halle/Westf.
Greven
Greven
Gronau/Westf.
A list of the complete shareholdings of the Group, the consolidated financial statements and the Group’s
management report, as well as the supervisory board’s report are publicly disclosed in the electronic Federal
Gazette.
37.5
Consolidated companies and shareholdings
As at September 30, 2012, Mondi Consumer Packaging International AG (formerly NORDENIA
International AG) directly or indirectly controlled the following companies:
Name of the Company
Registered
office
Balance sheet
date
Share of
Capital
structure
Consolidated companies
Mondi Consumer Packaging International AG (formerly
Mondi Lohne GmbH (formerly NORDENIA
Deutschland Lohne GmbH)
Mondi Gronau GmbH (formerly NORDENIA
Deutschland Gronau GmbH)
Mondi Osterburken GmbH (formerly
NORDENIA Deutschland Osterburken GmbH)
Mondi IT Services Barleben GmbH (formerly
NORDENIA IT Services GmbH)
Mondi Halle GmbH (formerly NORDENIA
Deutschland Halle GmbH)
(formerly NORDENIA Technologies GmbH)
Mondi Consumer Packaging Development GmbH
(formerly Nordenia International Development
GmbH)
ZAO Mondi Slavnika (formerly ZAO NORDENIA
Slavnika)
Nordenia International Geschäftsführungs GmbH
(formerly NORDENIA International Beteiligungs
GmbH)
Nordenia International Beteiligungs GmbH & Co.
KG
Mondi Jackson, Inc. (formerly NORDENIA
U.S.A., Inc.)
Mondi Consumer Packaging Iberica S.A. (formerly
NORDENIA Iberica Barcelona S.A.)
Mondi Szada Kft. (formerly NORDENIA Hungary
Kft.)
Mondi Poznan sp. z o.o. (formerly NORDENIA
Polska Poznan sp. z o.o.)
Mondi Ipoh Sdn. Bhd. (formerly NORDENIA
(Malaysia) Sdn. Bhd.)
Mondi Australia Pty. Ltd. (formerly Nordenia
(Australia) Pty. Ltd.)
9/30/2012
Greven
-
12/31/2012
1)
Steinfeld
90.00%
9/30/2012
1)
Gronau/Westf.
100.00%
9/30/2012
2)
Osterburken
100.00%
12/31/2012
2)
Barleben
100.00%
9/30/2012
1)
Halle/Westf.
100.00%
12/31/2012
1)
Gronau/Westf.
100.00%
12/31/2012
1)
Greven
100.00%
12/31/2012
1)
Pereslavl/Russia
100.00%
12/31/2012
3)
Greven
100.00%
12/31/2012
1)
Greven
100.00%
12/31/2012
4)
100.00%
12/31/2012
1)
Jackson/United
States
Polinya/Spain
12/31/2012
1)
Szada/Hungary
100.00%
12/31/2012
5)
Dopiewo/Poland
100.00%
12/31/2012
1)
Ipoh/Malaysia
100.00%
12/31/2012
6)
Australia
100.00%
12/31/2012
1)
Taicang/China
100.00%
F-143
97.84%
OOO NORDENIA Samara
1)
2)
3)
4)
7)
Samara/Russia
100.00%
direct investment of NORDENIA International AG
investment of NORDENIA Deutschland Gronau GmbH
general partner, investment of NORDENIA International AG
investment of NORDENIA International Beteiligungs GmbH & Co. KG
5) 97.5 % investment of NORDENIA Hungary Kft. and 2.5 % investment of NORDENIA International AG
6) investment of NORDENIA (Malaysia) Sdn. Bhd., subgroup with NORDENIA (Malaysia) Sdn. Bhd.
7) not included in consolidation due to minor significance to the Group
37.6
Disclosure of pro rata consolidated companies
The Group sold its 50 % investment in the joint venture Dalian DANOR Printing Packaging Company,
Dalian/China, on September 26, 2012.
The following figures represent the 50 % investment of the Group in the assets and liabilities, revenues and
earnings/losses of the joint venture. The figures are disclosed in the consolidated balance sheet and the consolidated
statement of profit and loss:
9/30/2012
12/31/2011
kEUR
kEUR
Assets
Non-current assets
0
1,860
Current assets
0
2,801
0
4,661
Liabilities
Non-current debt
0
12
Current debt
0
0
0
622
634
4,027
9/30/2012
kEUR
2,482
3,010
528
12/31/2011
kEUR
3,919
5,664
1,745
Net assets
Income
Expenditure
Share in the obligation of the joint venture
There are not contingent liabilities attributable to the Group, and the joint venture does not have any
contingent liabilities itself.
37.7
Employees
The companies of Mondi CP (formerly NORDENIA Group) (joint ventures accounted for on a pro rata basis)
had the following number of employees:
1/1-9/30/
Per capita
2012
1/1-12/31/
Production
2,456
2,542
Administration
256
260
Sales
210
207
57
53
General managers
18
19
2,997
3,081
F-144
The number of employees includes employees of the pro rata consolidated company as follows (50 %):
1/1-9/30/
2012
Production
Administration
Sales
1/1-12/31/
53
14
5
72
59
11
5
75
The pro rata consolidated company was deconsolidated on September 30, 2012.
For corporate controlling purposes and for the subsequent analysis of the statement of profit and loss, as well
as for the explanatory comments and segment reporting purposes, the average number of employees for the period is
converted into fulltime employees:
F-145
Fulltime employees
Production
Administration
Sales
General managers
39
39.1
1/1-12/31/ 2011
2,517
239
200
52
19
3,027
12/31/2011
kEUR
187
12/31/2011
kEUR
319
Notes payable
39.2
1/1-9/30/
2012
2,435
237
203
56
18
2,948
Litigation
Neither Mondi Packaging International AG (formerly NORDENIA International AG) nor any of its group
companies are involved in any pending or foreseeable legal or arbitration proceedings that could have or have had a
material impact on the economic situation in the last two years. Provisions in the appropriate amount were recorded
by the respective companies for any financial obligations from legal or arbitration proceedings. Unless it is expected
that financial burdens result from litigation and arbitration proceedings, no provisions were recorded (cf. chapter
39.4).
39.3
Thereof due within one year
Thereof due between 1 - 5 years
Thereof due within more than 5 years
Total
9/30/2012
kEUR
12,552
12/31/2011
kEUR
15,776
18,628
4,128
10,551
3,949
31,180
21,790
3,603
10,206
7,981
37,566
The minimum lease payments relate to leased buildings, plants, as well as office and plant equipment, with
the existing agreements in part containing extension clauses. In addition, a production site (land and buildings) was
refinanced by way of a sale & leaseback transaction. The expenses from operate leases that were recognized in
profit and loss total EUR 3,693k (prev. year: EUR 3,795k) at the balance sheet date.
39.4
The Group has contingent liabilities from litigation relating to the operating business.
It is not expected that a significant amount of liabilities will actually result from those contingent liabilities
for which no provisions have been recorded.
Taxes and incidental tax expenses in the total amount of EUR 10,121k have been assessed for Mondi CP AG
for the assessment periods 2006 and 2008; EUR 9,575k of those have neither been reported in the provisions nor the
liabilities of the Company. The Company has filed appeals or suit against those tax assessment notes. The fiscal
authorities and the imposing municipalities and cities have granted suspension for the payment of the
aforementioned amounts. The company expects that it will be successful in the pending appeals or suits.
F-146
39.5
Auditors' fees and services
The fees expensed for the auditor of the consolidated financial statements for the short financial year from
January 1 to September 30, 2012 that the Group is required to disclose according to Sec. 315a para. 1 HGB in
context with Sec. 314 para. 1 No. 9 HGB break down as follows:
2012
kEUR
Audit services
Other consultancy services
Tax advisory services
Other services
40
2011
kEUR
299
0
0
0
299
226
534
0
226
986
Events after the balance sheet date
Based on the Stock Purchase Agreement dated July 10, 2012, the stockholders of NORDENIA International
AG agreed to transfer the majority of the stocks in NORDENIA International AG to Blitz 12-403 AG with its
registered office situated in Munich. Blitz 12-403 AG is a company of the Mondi Group. On October 1, 2012,
Mondi Group confirmed that all requirements were met and the transfer of the outstanding capital stock in the
amount of 99.93 % of NORDENIA International AG at EUR 259m in cash was completed. Thus, NORDENIA
International AG has become part of the Mondi Group.
Given the integration of Mondi Consumer Packaging International AG (formerly Nordenia International AG)
into Mondi Group, financing of the Consumer Packaging segment will be primarily on an intercompany level in the
future. Already by October 1, 2012 was the pari passu loan in the amount of EUR 10.0m granted by
Landessparkasse zu Oldenburg repaid. In addition, the syndicated credit line of EUR 100m was repaid by November
22, 2012. The Group intends to reduce the ABS program of EUR 70m / USD 10m by the end of 2012 and, instead,
provide the funds via Mondi Finance plc.
Mondi Finance plc granted a guaranty for the bond of EUR 280m that expires in 2017. As a result of the
enhanced security, the rating agencies Moody's and Standard & Poor's upgraded their rating to an investment grade.
Thus, it is ensured that some of the financial covenants in the terms and conditions of the bond that applied in the
past do no longer have a limited effect.
The transfer of the majority of the stocks to Blitz 12-403 AG is deemed an exit event for the stock option
program which results in a payment of the stock options to the holders. The first payment was made in October 2012
and totaled EUR 18,101k. Additional payments in the maximum amount of EUR 3,187k shall be made in the
following three years.
There were no additional events or developments until December 10, 2012 that would have resulted in a
major change in the recognition and measurement of the individual asset and liability items as at September 30,
2012 or that would have been of major significance for the addressees of the consolidated financial statements.
Signed in Greven on this 10th day of December 2012
Management Board
Ralph Landwehr
Andreas Picolin
F-147
Andreas Busacker
changes in group equity and cash flow statement—as well as to the Group management report of NORDENIA
International AG, Greven. The Group management report is not reproduced in this financial report.
We have audited the consolidated financial statements prepared by NORDENIA International AG,Greven,
comprising the income statement, the statement of comprehensive income, the balance sheet, the statement of cash
flows, the statement of changes in equity and the notes to the consolidated financial statements, together with the
group management report for the business year from January 1 to December 31, 2011. The preparation of the
consolidated financial statements and the group management report in accordance with the IFRSs, as adopted by the
EU, and the additional requirements of German commercial law pursuant to Section 315a (1) HGB,
(“Handelsgesetzbuch”; German Commercial Code) are the responsibility of the company’s Board of Management.
We conducted our audit of the consolidated financial statements in accordance with section 317 German
Commercial Code (HGB) and the generally accepted standards for the audit of financial statements promulgated by
the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the audit such that
the consolidated financial statements in accordance with (German) principles of proper accounting and in the group
management report are detected with reasonable assurance. Knowledge of the business activities and the economic
and legal environment of the Group and expectations as to possible misstatements are taken into account in the
determination of audit procedures. The effectiveness of the accounting-related internal control system and the
financial statements of those entities included in consolidation, the determination of the entities to be included in
consolidation, the accounting and consolidation principles used and significant estimates made by the Company’s
Board of Management as well as evaluating the overall presentation of the consolidated financial statements and the
group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any objections.
In our opinion and based on the findings of our audit, the consolidated financial statements comply with the IFRS as
adopted by the EU and give a true and fair view of the net assets, financial position and results of operations of the
Group in accordance with these requirements. The Group management report is consistent with the consolidated
financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the
opportunities and risks of future development.
Osnabrück, March 15, 2012
PricewaterhouseCoopers
Aktiengesellschaft
signed Dr. Gregor Solfrian
Wirtschaftsprüfer
F-148
signed p.p. Volker Voelcker
Wirtschaftsprüfer
NORDENIA International AG, Greven
Consolidated income statement
for the period from January 1 to December 31, 2011
Notes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Sales ...............................................................................................
Cost of sales ...................................................................................
Gross profit ....................................................................................
Selling costs ...................................................................................
Research and development costs ....................................................
Other operating income ..................................................................
Consolidated net income ..............................................................
F-149
(3)
(4)
(5)
(6)
(7)
(9)
(10)
(8)
(11)
(12)
(13)
(14)
(16)
01/0112/31
2011
kEUR
880.783
736,360
144,423
43,783
31,549
5,264
5,415
1,323
1,163
69,082
31,648
77,493
(45,845)
23,237
8,978
14,259
0
14,259
06/2912/31
2010
kEUR
408,086
338,804
69,282
20,276
20,176
2,624
4,339
2,843
(581)
27,121
3,204
21,961
(18,757)
8,364
3,567
4,797
0
4,797
01/0112/31
2010
kEUR
801,497
657,546
143,951
40,175
46,037
5,309
8,951
3,435
(116)
57,830
6,425
30,908
(24,483)
33,347
10,820
22,527
(926)
21,601
14,299
(40)
5,439
(642)
21,901
(300)
Consolidated statement of comprehensive income
for the period from January 1 to December 31, 2011
1. Consolidated net income ........................................................................
2. Result from available-for-sale financial assets
3. Result from cashflow-hedging
4. Actuarial gains and losses from defined benefit obligations ....................
5. Exchange differences on translating foreign operations ...........................
6. Income taxes relating to components of other comprehensive income ....
7. Other comprehensive income ................................................................
8. Total comprehensive income..................................................................
Shareholder of the parent ..........................................................................
Non-controlling shareholder .....................................................................
01/01-12/31
2011
kEUR
14,259
06/2912/31
2010
kEUR
4,797
01/0112/31
2010
kEUR
21,601
0
355
0
355
0
0
405
(3,454)
(229)
(2,923)
1,874
0
246
(2,059)
5,172
437
4,151
25,752
2,514
(640)
26,161
(409)
0
0
0
(295)
(1,041) *)
(1,998)
422
(2,912)
11,347
11,389
(42)
*) thereof available for sale non-current assets kEUR -269 (previous year: kEUR 0)
F-150
Consolidated balance sheet as of December 31, 2011
Notes
(17)
(18)
(20)
(21)
(22)
(22)
9.395
217.329
21.067
12.429
68
243
260,531
10.029
212.724
28.739
8.486
194
254
260,426
B.
1.
2.
3.
4.
5.
6.
7.
(23)
(24)
(25)
(25)
(13)
(26)
(14)
104.920
85.275
15.385
5.142
500
27.336
5,326
243,884
504,415
100.685
72.332
11.650
8.224
747
35.404
0
229,042
489,468
(27)
(27)
(27)
(27)
(27)
29,190
(178,529)
89,073
14,299
(5,360)
(51,327)
200
(51,127)
29,190
(177,183)
84,362
5,438
(3,176)
(61,369)
(601)
(61,970)
Current assets
Inventories ............................................................................................................
A. Equity
2. Capital Reserve .....................................................................................................
kEUR
12/31/2010
kEUR
Assets
(27)
B. Non-current liabilities
1. Subordinated loans ................................................................................................
2. Bonds ....................................................................................................................
4. Provisions for pensions and similar obligations ....................................................
5. Trade payables .......................................................................................................
6. Deferred tax liabilities...........................................................................................
7. Other liabilities .....................................................................................................
(28)
(28)
(28)
(30)
(28)
(32)
(33)
(28)
(28)
9,984
280,770
1,820
14,307
11
17,461
1,573
13,016
304
339,246
9,978
280,873
448
14,007
0
16,534
1,481
22,586
391
346,298
2. Notes payables ......................................................................................................
3. Trade payables ......................................................................................................
(28)
(28)
(28)
(34)
(33)
(28)
(28)
(28)
33,239
732
83,638
1,135
33,915
57,955
3,488
2,194
216,296
504,415
39,609
3,039
70,911
3,893
34,921
48,274
4,493
0
205,140
489,468
F-151
Cash flow statement as of December 31, 2011
Interest paid ..............................................................................................................
Cash received from the supply of equity ..................................................................
Dividends..................................................................................................................
Cash paid for purchases of shares of other shareholders ..........................................
Cash received from the borrowing of subordinated loans ........................................
Cash paid for repayments of subordinated loans ......................................................
Cash paid from the repayment of current financial loans .........................................
Transaction costs paid in economic relation to the borrowing of current financial
loans .........................................................................................................................
Change in cash ........................................................................................................
F-152
01/0112/31
2011
kEUR
69,082
28,540
(14,449)
(35,415)
2,449
56
(1,447)
1,136
(9,458)
06/2912/31
2010
kEUR
27,121
14,322
(4,376)
(5,189)
1,257
(2,057)
49
1,334
(3,859)
01/0112/31
2010
kEUR
57,830
28,731
(15,417)
(9,114)
2,372
(2,059)
(179)
2,238
(30,070)
(4,981)
35,513
4,543
(36,497)
1
(1,014)
979
(1,267)
0
(33,255)
0
0
0
0
0
(1,374)
2,000
(1,220)
103,071
(112,950)
7,129
35,731
390
(14,196)
0
(688)
23
(17)
0
(14,488)
300
(185,126)
(1,354)
9,975
(50,000)
(37,020)
272,463
(5,024)
66,553
(87,314)
10,028
44,360
864
(25,020)
37
(1,167)
24
(24)
710
(24,576)
325
(185,126)
(1,354)
9,975
(50,000)
(51,825)
272,525
(5,024)
253,257
(245,438)
0
(10,473)
(8,215)
(8,215)
147
35,404
27,336
(147)
(16,694)
4,549
4,549
(634)
31,489
35,404
(147)
(2,832)
16,952
16,952
442
18,010
35,404
Statement of changes in group equity as of December 31, 2011
Subscribed
capital
Status at 1/1/2010 ...............
Change in capital structure
from reverse acquisition
of NORDENIA
Holdings GmbH by
NORDENIA
International AG .............
Change in group of
consolidated companies ..
Transfers ..............................
Consolidated
Others ..................................
Status at 06/28/2010............
Transfers ..............................
Status at 06/29/2010 after
transfers ........................
Change in capital structure
from reverse acquisition
of NORDENIA
Holdings GmbH by
NORDENIA
International AG .............
Payment by shareholders ......
Payment to shareholders.......
Consolidated
Status at 12/31/2010............
Capital
reserves
kEUR
28,380
kEUR
13,734
kEUR
69,136
(3,920)
(13,460)
(842)
126
(126)
kEUR
0
(1,516)
(344)
66,308
248
16,463
16,463
(16,463)
kEUR
(8,349)
8,700
2
353
Available
for sale
financial
assets
Hedging
instr. fr.
cashflow
hedges
kEUR
kEUR
0
0
Equity
Equity
Treasury the shareholder non-controlling
of the parent
shareholder
stock
Taxes
Total
Group
equity
kEUR kEUR
0 (4,167)
kEUR
98,734
11
kEUR
98,745
4,167
(14,055)
14,080
25
0
0
(313)
(313)
0
23,647
(342)
107,984
0
231
342
14,351
0
23,878
0
122,335
0
107,984
0
14,351
0
122,335
0
24,460
400
66,556
16,463
4,730
7,155
300
(185,038)
1,149
282
5,438
(3,454)
355
0
(107)
0
2,514
(640)
1,874
(177,183)
84,362
5,438
(3,176)
0
0
0
0
(61,369)
(601)
(61,970)
5,438
(5,438)
0
0
0
(1,346)
843
(503)
109
11,389
(42)
11,347
109
(1)
(51,327)
200
(1)
(51,127)
353
0
(355)
0
0
107
0
(355)
0
107
0
kEUR
400
29,190
16,463
Currency
adjustment
item
24,460
of a merger .....................
Consolidated
(75)
12,959
300
(185,126)
(88)
(1,346)
(726)
Other ...................................
Status at 12/31/2011............
Revenue
reserves
Profit
attributable to
the shareholder
of the parent
29,190
(178,529)
(1)
89,073
14,299
14,299
(1,998)
(5,174)
F-153
(295)
0
(295)
0
(14,312)
(1,353)
0
300
0 (185,126)
Notes to the consolidated financial statements as of December 31, 2011
1
General disclosures
The NORDENIA Group (hereinafter also referred to as NORDENIA) is an international group in the field
of packaging means that operates globally in the divisions Advanced Films & Components (AFC), Consumer
Flexible Packaging (CFP), and Services.
By way of Articles of Incorporation and Articles of Association dated April 28, 2010 and shareholder's
resolution dated September 6, 2010, Nordenia International AG (hereinafter referred to as Nordenia International)
was incorporated as Nordenia Holdings AG, a stock corporation under the laws of Germany.
On October 28, 2010 the Boards of Directors of Nordenia Holdings AG and former NORDENIA
International AG concluded a notarized agreement for the merger of both companies, by integrating NORDENIA
International AG into Nordenia Holdings AG. The merger took effect on May 26, 2011 upon entry in the
Handelsregister [Register of Companies] of the Steinfurt Amtsgericht [Local Court] under HRB 8959. Former
NORDENIA International AG ceased to exist when the merger came into force. Upon the merger becoming
effective, Nordenia Holdings AG also changed its firm to NORDENIA International AG. The address is
NORDENIA International AG, Huettruper Heide 88, 48268 Greven.
The Company’s registered office is situated in Greven. The Company is registered in the Handelsregister
[Register of Companies] of the Steinfurt Amtsgericht [Local Court] under HRB 8959.
The financial year is the calendar year. The previous year was a short financial year beginning on June 29
and ending on December 31, 2010.
Due to the 6-month comparative period in the consolidated income statement and the consolidated cash
flow statement, the disclosed information is comparative to previous year’s information to a limited extent only.
Therefore, for the purpose of comparativeness, an additional column was inserted in previous year's consolidated
financial statements comprising the accumulated figures of the 2010 calendar year.
The consolidated financial statements of NORDENIA International AG for the financial year ended
December 31, 2011, as well as the Group Management's Report, on which PricewaterhouseCoopers AG
Wirtschaftspruefungsgesellschaft, Osnabrueck, rendered an independent auditor's report are publicly disclosed in the
electronic Bundesanzeiger [German Federal Gazette]. The directors of NORDENIA International AG released these
consolidated financial statements on March 12, 2012 for public disclosure.
2
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1
Basis of preparation
The consolidated financial statements of NORDENIA International AG as at December 31, 2011 were
compiled in accordance with Sec. 315a para. 3 in context with para. 1 HGB [German Commercial Code] in
compliance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union. The
consolidated financial statements have been compiled under the historical cost convention, as modified by the
measurement of available-for-sale financial assets which were measured at fair market value and the revaluation of
the financial assets and financial liabilities (including derivative instruments) at fair value through profit and loss.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of applying the group’s
accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are disclosed in note 2.25.
income statement were combined. These items are stated separately, together with explanatory comments, in the
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notes to the consolidated financial statements. The consolidated income statement is compiled using the cost-ofsales accounting method.
In order to ensure comparativeness with the previous year, an additional column was inserted for the
previous year in the consolidated income statement, the consolidated statement of total comprehensive income and
the consolidated cash flow statement that comprises the accumulated comparative figures of the 2010 calendar year.
2.1.1
Going concern
As a result of the funding activities undertaken and the increased focus on working capital, despite
significant additional debt arising from the granting of corporate bonds, the Group improved both its short-term and
medium-term liquidity position in the previous year. In the financial year, the borrowing costs averaged 10.44 % of
the financial liabilities as at the year-end (incl. interest expense related to hedge transactions). Hence, they exceeded
previous year’s costs (9.75 %), but remained below management’s target. The Group planning and forecasts show
that the Group can continue to operate based on the current financing.
The Group continues to adopt the going-concern basis in preparing its consolidated financial statements;
adequate resources are available.
2.1.2
Changes in recognition and measurement methods, and disclosures
2.1.2.1 Standards, interpretations and revised standards and interpretations to be adopted for the first time
The following standards, interpretations and revised standards and interpretations were to be adopted in the
financial year beginning on January 01, 2011:
•
IFRS 1 — First-time adoption of International Financial Reporting Standards
The changes in IFRS 1 enable first-time IFRS adopters to apply the transition provisions of IFRS 7. Hence
IFRS first-time adopters are no longer under the obligation to publicly disclose comparative figures for the new
mandatory disclosures required under IFRS 7 for comparative periods that ended before December 31, 2009. Since
the Group is not a first-time adopter, this change does not have any impact on the consolidated financial statements.
•
IAS 32 — Classification of preemptive rights
The amendment of IAS 32 issued by the IASB in October 2009 addresses the accounting of preemptive
rights issues that are denominated in a currency other than the functional currency of the issuer. IAS 32 was
modified to such extent that preemptive rights, options and option bonds to acquire a fixed number of an entity's
own equity instruments for a fixed price stated in a currency other than the entity's functional currency that must be
fulfilled physically would be equity instruments, provided the entity offers the rights pro rata to all of its existing
owners of the same class of equity instruments. Since the Group does not hold such preemptive rights, the changes
of the standard will not have any impact on the consolidated financial statement.
•
IAS 24 — Related-party disclosures
In November 2009, the IASB published a revised IAS 24. The goal of the revisions is to eliminate
inconsistencies in the definition of related parties and to provide simpler disclosure requirements for entities in
which the state holds investments.
The new definition enhances a more detailed approach with regard to the identification of related-party
transactions and clarifies the circumstances under which persons or key management personnel can influence
related-party transactions. Furthermore, the amended standard results in a partial exemption from disclosure
requirements set forth in IAS 24 regarding transactions with government agencies and entities controlled by the
same government agency that controls the reporting entity, that are jointly controlled or influenced to a material
extent by one and the same government agency. The amendments do not have a material impact on the Group's net
asset, financial and earnings position, but result in additional disclosure in the notes.
•
Annual improvement project 2010
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The IASB amended 6 standards and one interpretation in the course of its annual improvement project that
aims at streamlining the IFRS and their interpretation. These changes are basically changes aiming at clarifying and
rectifying existing IFRS (a total of eleven changes of a total of six individual standards (IFRS 1, IFRS 3, IFRS 7,
IAS 1, IAS 27, IAS 34) and one interpretation (IFRIC 13), Unless otherwise stated, the changes should be applied in
financial years that begin on or after January 1, 2011; the revised standards may be applied earlier. Except for IFRS
7: Disclosures on the type and scope of risks from financial instruments, the changes that were applied in full do not
have a major impact on the Group's net asset, financial and earnings positions or its cash flows in the reporting
period.
•
IFRIC 19 — Extinguishing financial liabilities with equity instruments
The IFRIC published an interpretation IFRIC 19 regarding the accounting of the extinguishing of financial
liabilities with equity instruments (so-called debt for equity swaps). The interpretation clarifies the accounting by an
entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a
creditor of the entity to extinguish all or part of the financial liability (debt for equity swap), and the creditor is an
independent third party. The interpretation is mandatory for periods beginning on or after July 1, 2010. Earlier
application is permitted. The first-time adoption of the interpretation does not have any major impact on the
presentation of the consolidated financial statements.
•
IFRIC 14 — Prepayments of a minimum funding requirement
In November 2009, the IASB published an amendment of IFRIC 14—an interpretation of IAS 19. The
amendment is of relevance only in rare cases in which an entity that must meet minimum funding requirements
regarding its pension plans effects prepayments to said pension plans. Unlike under the existing provisions, the
economic benefits embodied in prepayments made by the company that reduce future payments due to the minimum
funding requirement are recognized as assets. In the event the minimum funding requirements relate to prepayments
for future services, the interpretation now prescribes that an asset be recognized that is the aggregate of two
amounts. This amendment shall be applied to all financial years beginning on or after January 1, 2011; it may be
applied earlier. There will be no major impact on the Group’s net asset, financial and earnings position.
2.1.2.2 Published but not yet adopted standards, interpretations and revisions
The following standards, interpretations and revised standards and interpretations shall be adopted in
financial years beginning on or after July 1, 2011 or January 1, 2012, respectively. The Group did not adopt these
standards and interpretations early:
•
IFRS 7 — Financial instruments: Disclosures: Transfer of financial assets
The changes of IFRS 7 prescribe extended disclosure requirements regarding those transfers of financial
assets where the transferred assets are not derecognized in full or where there is a continuing involvement in the
transferred asset. This shall help users of financial statements to better understand the risks that may remain with the
entity that transferred the assets. The revised standard is mandatory for all financial years beginning on or after July
01, 2011. Management is currently analyzing what impact the revisions will have. Management expects that there
will be no or no major impact on the Group’s net asset, financial and earnings position.
2.2.2.3 Published standards, interpretations and revisions not yet endorsed by the EU
•
IAS 32 and IFRS 7 — Offsetting financial assets (and liabilities)
The standards regarding the offsetting of financial assets and liabilities were revised by the IASB. The
results were published on December 16, 2011 in the form of a revised IFRS 7 Financial instruments: Disclosures
and IAS 32 Financial instruments: Presentation.
The prerequisites for the set-off codified in IAS 32 until then were basically retained; they were merely
specified by adding additional application guidelines. The supplementary guidelines are applicable retrospectively
for periods beginning on or after January 1, 2014. However, there are new disclosure requirements that were added
to IFRS 7, namely relating certain set-off agreements. In addition to describing the offsetting rights, the amendments
in particular set forth the following quantitative disclosures:
-
the scope of the set-off;
the gross amount of the respective financial assets and liabilities before offsetting;
the net amount of the respective financial assets and liabilities after offsetting;
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-
the amount of those financial assets and liabilities that are subject to set-off arrangements, but which
have not been offset in the balance sheet;
the fair value of financial instruments held or pledged as collateral;
the net amount of the respective financial assets and liabilities based on a set-off under set-off
agreements and collaterals not taken into account.
The amendments of IFRS 7 are applicable retrospectively for periods beginning on or after January 1,
2013. The Group is currently investigating potential effects on the Group's net asset, financial and earnings position,
as well as its cash flows.
•
IFRS 9 — Financial instruments
liabilities. IFRS 9 reflects the first phase of the IASB project regarding the replacement of IAS 39 and discusses the
classification and measurement of financial assets and financial liabilities under IAS 39. In additional project
phases, the IASB will discuss the accounting of collateral relations and the impairment of financial assets. The
application of the new provisions resulting from the first phase of the IFRS 9 project will affect the classification
and measurement of the Group's financial assets; however, it is not expected to affect the classification and
measurement of the financial liabilities. It is the proclaimed goal of the IASB to adopt all three drafts after final
discussion and implement them in IFRS 9, thus replacing IAS 39. In the additional amendment of IFRS 9 published
on December 16, 2011, the IASB postponed the original first-time adoption date; it is no longer January 1, 2013, but
January 1, 2015. Earlier application is permitted. The Group is currently investigating potential effects on the
Group's net asset, financial and earnings position, as well as its cash flows.
•
IFRS 10 — Consolidated financial statements
IFRS 10 substitutes the provisions regarding consolidated financial statements in IAS 27 Consolidated and
separate financial statements, as well as SIC-12 Consolidation - Special-purpose entities. This standard provides a
uniform definition of the term control applicable to all entities, thus also ensuring a uniform basis for the
determination of whether a parent-subsidiary relation exists and the corresponding integration into the consolidated
group. The standard contains comprehensive application guidelines regarding the identification of a control relation.
The provisions are applicable for periods beginning on or after January 1, 2013. Earlier application is permitted;
however, there are additional criteria that must be satisfied, namely not only the disclosure of early application, but
also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) are applied early as well. The Group cannot
conclusively assess which effects the first-time adoption of IFRS 10 will have in the event the standard is endorsed
by the EU in its current version.
•
IFRS 11 — Joint arrangements
The standard that the IASB published in May 2011 abolishes the option to consolidate joint ventures on a
pro rata basis. In the future, it is mandatory to apply the equity method to joint ventures as set forth in the provisions
of IAS 28 investments in associates and joint ventures. The standard must be applied to periods beginning on or
after January 1, 2013. Earlier application is permitted; however, there are additional criteria that must be satisfied,
namely not only the disclosure of early application, but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and
IAS 28 (2011) are applied early as well. The Group cannot conclusively assess which effects the first-time adoption
of IFRS 11 will have in the event the standard is endorsed by the EU in its current version.
•
IFRS 12 — Disclosures of interests in other entities
IFRS 12 replaces the current provisions regarding disclosure requirements set forth in IAS 27 Consolidated
and separate financial statements, IAS 28 investments in associates, IAS 31 investments in joint ventures, and SIC12 Consolidation - Special-purpose entities. Hence, the standard governs the disclosure requirements for all types of
investments in other entities, including joint agreements, associates, structured entities, and off-balance sheet units.
IFRS 12 must be applied to all financial years beginning on or after January 1, 2013; it may be applied earlier. The
Group cannot conclusively assess which effects the first-time adoption of IFRS 12 will have in the event the
standard is endorsed by the EU in its current version.
•
IFRS 13 — Fair value measurement
IFRS 13 prescribes uniform measurement standards for fair value measurement applying to basically all
standards by defining the term and specifying which methods may be used to determine the fair value. In addition,
the disclosures regarding assets and liabilities measured at fair value are expanded. IFRS 13 itself does not contain
F-157
any provisions specifying in which cases the fair value should be applied. The standard must be applied
retrospectively to all financial years beginning on or after January 1, 2013; it may be applied earlier. In the first year
of adoption, no comparative disclosures are required. Currently, the Group expects that the application of the new
standard will result in additional disclosures provided that it is endorsed by the EU in its current version.
•
IAS 1 — Presentation of the comprehensive income
The changes in IAS 1 prescribe changing the title “statement of comprehensive income” to “statement of
profit or loss and other comprehensive income”, as well as a reorganization of the other comprehensive income. In
the future, the other comprehensive income is divided into two sections: One section that contains those elements
that are transferred to the statement of profit or loss in the following periods (so-called recycling) and one section
that comprises all elements that are not recycled in the following periods. The amendments of IAS 1 must be applied
to all financial years beginning on or after July 1, 2012; it may be applied earlier. The Group is currently
investigating the effects resulting from the changes of IAS 12 on the presentation of the Group's net asset, financial
and earnings position, as well as its cash flows.
•
IAS 12 — Deferred taxes: Recovery of underlying assets
The amendment introduces a mandatory exemption provision according to which investment properties
measured at fair value should no longer be measured as specified in the basic provision of IAS 12.51 according to
which deferred taxes should be measured at the expected tax effect resulting from the expected manner of recovery
of the underlying tax asset (or liability). In the future, deferred tax assets and liabilities should be measured in
respect of such investment properties based on the tax effects resulting from the sale of the properties unless the
accounting party provides clear evidence that it will realize the carrying amount of the asset in full as a result of
utilizing the respective asset. This new provision will be of significance primarily in those countries in which the
taxation of the use and taxation of the disposal of such assets differ. The exemption also applies to investment
properties recorded for the first time in the course of a business acquisition when and if those properties shall
subsequently be recorded at fair value as well. This amendment shall be applied to all financial years beginning on
or after January 1, 2012; it may be applied earlier. The changes have not yet been endorsed by the European Union.
The Group is currently investigating the effects resulting from the changes on the presentation of the Group's net
asset, financial and earnings position, as well as its cash flows.
•
IAS 19 — Employee benefits
The changes of IAS 19 adopted by the IASB abolish the corridor approach existing so far and require the
recording of actuarial gains and losses in other comprehensive income. In addition, the income from plan assets
expected to result from the amendment of IAS 19 and the interest expenses on the existing pension obligations will
be replaced by a uniform net interest element. In the future, the subsequent service cost shall be recorded in full in
the period in which the respective change of the plan occurred. When revising IAS 19, the criteria for termination
benefits were changed. The disclosure requirements and explanatory comments requirements were expanded. The
amendments of IAS 19 must be applied to all financial years beginning on or after January 1, 2013; it may be
applied earlier. Currently, the Group cannot conclusively assess which effects the adoption of IAS 19 will have in
the event the standard is endorsed by the EU in its current version. However, the first-time adoption of the revised
standard will result in additional disclosures in the notes.
•
IAS 27 — Separate financial statements
Due to the publication of the new IFRS 10, the revised IAS 27 only comprises provisions regarding the
accounting of and disclosures on subsidiaries, joint ventures and associates that are relevant to the separate financial
statements compiled in accordance with the IFRS. The standard must be applied to periods beginning on or after
January 1, 2013. Earlier application is permitted; however, there are additional criteria that must be satisfied, namely
not only the disclosure of early application, but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28
(2011) are applied early as well. The Group is currently investigating the effects of the changes in IAS 27.
•
IAS 28 — Investments in associates and joint ventures
The changes in IAS 28 consist of corresponding changes resulting from the new IFRS 10, IFRS 11 and
IFRS 12 and expand the scope of application of the current standard to include the accounting of joint ventures.
According to the revised IAS 28, an entity shall recognize an investment or part of an investment in an associate or a
joint venture as held for sale when and if the applicable criteria are satisfied. Any remaining portion of the
investments in an associate or joint ventures that is not classified as held for sale must be accounted for using the
equity method until its disposal. The standard must be applied to periods beginning on or after January 1, 2013.
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Earlier application is permitted; however, there are additional criteria that must be satisfied, namely not only the
disclosure of early application, but also that IFRS 10, IFRS 11, IFRS 12, IAS 27 (2011) and IAS 28 (2011) are
applied early as well. The Group is currently investigating the effects of the changes in IAS 28.
•
IFRS 1 — Severe hyperinflation and removal of fixed dates for first-time adopters
The change in IFRS 1 in respect of severe hyperinflation provides application guidelines that outline the
method of presenting financial statements in accordance with the IFRS when and if an entity whose functional
currency was subject to severe hyperinflation was not able to comply with the provisions of the IFRS standards for a
period of time. Due to the change that aims at removing a fixed date for the transition the original references to the
fixed transition date "January 1, 2004" are replaced by "the date of transition to IFRS". Accordingly, first-time
adopters of IFRS do not have to subsequently record derecognition transactions that occurred before the date of
transition to IFRS in accordance with the IFRS derecognition standards and adjust the presentation accordingly.
The amendment must be applied to all financial years beginning on or after July 1, 2011; it may be applied
earlier. The Group is currently investigating the effects resulting from the changes on the presentation of the Group's
net asset, financial and earnings position, as well as its cash flows.
•
IFRIC 20 — Stripping costs in the production phase of a surface mine
IFRIC 20 exclusively governs the accounting of waste removal costs incurred at the mine during the
production phase. The interpretation is mandatory for periods beginning on or after January 1, 2013. The first-time
adoption will not have any impact on the Group.
These standards and interpretations shall be adopted - subject to the endorsement by the EU - at the firsttime mandatory adoption date.
2.1.2.4
Changes in the accounting methods
In 2011, the accounting method was modified with regard to the presentation of income from the reversal
of provisions in the income statement. Income from the reversal of provisions is offset against the corresponding
expense items for which the provision was originally recorded. Due to the major efforts required in order to
determine the respective figures, the Group decided not to adjust previous year's figures accordingly; this approach
did not have any major impact on the financial statements.
Since foreign currency receivables and liabilities are translated throughout the year at the respective
monthly closing rates, both gains and losses from foreign currency measurement are incurred during the financial
year. Unlike in the previous year, these effects that occurred during the year were not offset at the end of the year.
Due to the major efforts required in order to determine the respective figures, the Group decided not to adjust
previous year's figures accordingly; this approach did not have any major impact on the financial statements.
2.2
e)
Subsidiaries
Subsidiaries are all entities, including special purpose entities, at which the Group controls the financial
and operating policies. This usually includes voting rights exceeding 50 %. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The cost of the
acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests
issued by the Group. Furthermore, the consideration transferred includes the fair value of any asset or liability
resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognizes any non-controlling interest in the acquiree
either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.
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The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share
of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the
subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the statement of
comprehensive income (see note 2.10).
Inter-company transactions, balances and unrealized gains and losses on transactions between Group
companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
f)
Transactions involving non-controlling interests (minority interests)
The Group treats transactions with non-controlling interests as transactions with equity owners of the
Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals
of non-controlling interests are also recorded in equity.
When the Group ceases to have control or significant influence, any retained interest in the entity is
remeasured to its fair value, with the change in carrying amount recognized through profit and loss. The fair value is
the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect
of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may
mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where
appropriate.
g) Joint ventures
The Group's interests in joint ventures are consolidated using the proportionate method of consolidation.
The Group aggregates the pro rata portion in their income and expenses, assets and liabilities, as well as cash flows
broken down by items with similar items of the Group. Gains and losses from the disposal of the Group’s assets in
joint ventures are recorded in the amount of the portion to which the other investors are entitled. The Group’s shares
in the profits and losses of the joint ventures resulting from the acquisition of assets by the Group are not recorded
until they are have been resold to an entity that is not part of the NORDENIA Group. However, losses from such
transactions are recorded upon the loss being deemed an objective indication that the net realizable value of current
assets is reduced or that they are impaired.
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Consolidated group
NORDENIA Group consists of the following entities:
NORDENIA International AG
Fully consolidated subsidiaries
thereof Germany
thereof other countries
Pro rata consolidated companies
thereof Germany
thereof other countries
as at
1/1/2011
1
20
11
9
1
0
1
Merger
-1
-1
-
Additions
-
Disposals
-
as at
12/31/2011
1
19
11
8
1
0
1
The disposal by way of merger relates to Polireal S.L., a company that was merged onto NORDENIA
Iberica Barcelona S.A., Barcelona/Spain on December 17, 2011 effective January 1, 2011.
2.3
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the –steering committee of NORDENIA
International AG.
2.4
g)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (functional currency). The consolidated financial
statements are presented in EUR, which is the NORDENIA International AG’ presentation currency.
Unless otherwise indicated, all amounts are stated in thousands of Euros (kEUR).
h)
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Gains and losses from the
completion of such transactions and the translation of foreign currency monetary assets and liabilities at closing
rates are recorded through profit and loss unless they shall be recorded as qualified cash flow hedges in equity.
Foreign exchange gains and losses that relate to cash and cash equivalents and financial debt are presented
in the income statement in the item exchange gains or losses and – to the extent that they result from financial
transactions – in the items financial income or expenses.
Changes in the fair value of monetary securities denominated in foreign currency classified as held for sale
are analyzed between translation differences resulting from changes in the amortized cost of the security and other
changes in the carrying amount of the security. Translation differences related to changes in amortized cost are
recognized through profit and loss, and other changes in carrying amount are recognized in other comprehensive
income.
Translation differences on non-monetary items (such as equities held at fair value through profit and loss)
are recognized through profit and loss as part of the fair value gain or loss. Translation differences on non-monetary
items such as equities classified as held for sale, where the changes in the fair value are recorded in equity, are
included under the currency adjustment item in equity.
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i)
Group companies
The results and balance sheet items of the entire group that have a functional currency other than EUR are
translated into EUR as follows:
-
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
income and expenses for each income statement are translated at average exchange rates;
all resulting exchange differences are recognized separately in equity (currency adjustment item).
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations, and of borrowings are recorded in equity outside profit or loss. When a foreign operation is partially
disposed of or sold, exchange differences that were recorded in equity are recognized in the income statement as
part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rate.
The exchange rates of the major currencies developed as follows:
China
Malaysia
Poland
Russia
Hungary
United States
2.5
Middle rate
on the balance sheet date
12/31/2011
12/31/2010
8.1435
8.8205
4.1010
4.1268
4.4580
3.9604
41.6868
40.9241
312.8200
277.8400
1.2932
1.3380
ISO
code
CNY
MYR
PLN
RUB
HUF
USD
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates
and discounts and after eliminating sales within the Group.
The Group produces and sells flexible packaging, technical films and product subassemblies. Sales from
the sale of the products are generated upon transfer of ownership and risks to the customer, if the consideration is
stipulated or can be determined reliably, and it is probable that the corresponding receivable will be settled.
2.6
Cost of sales
The cost of sales comprises cost of sold products and services, as well as purchase costs of sold
merchandise. In addition to direct cost of material and labor, they also include indirect overhead costs, including
depreciation on production plants and certain items of property, plant and equipment, as well as impairment of
inventories.
2.7
Research costs and non-recognizable development costs are directly recorded through profit and loss when
they occur. If the criteria set forth in IAS 38 are satisfied, development costs are recognized. For details see notes
2.10b) and d).
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2.8
Financial result
The financial result comprises interest expenses from liabilities that are determined using the effective
interest method, dividends, exchange gains and losses from financial transactions, interest income from receivables,
and gains and losses from financial instruments that are directly recorded through profit and loss. In addition, the
interest expenses from pension provisions and the measurement costs from embedded derivatives are reported as
interest expense.
The interest income is directly recorded through profit using the effective interest method. Dividends are
directly recorded through profit, if a resolution regarding the distribution was passed. Interest from finance leases is
determined using the effective interest method. Furthermore, the expected income from plan assets, as well as the
measurement gains from embedded derivatives is reported as interest income from the reporting period onwards.
2.9
Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income
statement, except to the extent that it relates to items recognized in other comprehensive income or directly in
equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred income tax is recognized, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is
not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability
is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilized.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis.
2.10
Intangible assets
i)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the
net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries
is included in “Intangible assets”. Goodwill is tested annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
F-163
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made
to those cash-generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose, identified according to operating segment.
j)
Software and software development costs
Acquired software licenses are recorded based on the costs incurred at the acquisition or the preparation of
the software for its intended use. These costs are amortized over the estimated useful life of 3 - 5 years.
Development costs that are directly attributable to the design and testing of identifiable and unique
software products controlled by the Group are recognized as intangible assets when the following criteria are met:
• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the software
product are available; and
• the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalized as part of the software product include the software
development employee costs and an appropriate portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognized as an expense as incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
Computer software development costs recognized as assets are amortized over their estimated useful lives,
which does not exceed five years.
k)
Concessions, industrial property rights
Concessions and industrial property rights are recorded at historical cost. Concessions and industrial
property rights acquired in a business combination are recognized at fair value at the acquisition date. Concessions
and industrial property rights have a finite useful life (as per the respective agreement) and are carried at cost less
accumulated amortization. Amortization is calculated based on the estimated useful lives of the respective
agreement.
l)
Development costs
Development costs that are directly attributable to the design and testing of identifiable products and
processes controlled by the Group are recognized as intangible assets when the following criteria are met:
•
•
•
•
•
•
it is technically feasible to complete the products and processes so that it will be available for use;
management intends to complete the products and processes and use or sell it;
there is an ability to use or sell the product and processes;
it can be demonstrated how the products and processes will generate probable future economic benefit;
adequate technical, financial and other resources to complete the development and to use or sell the
products and processes are available; and
the expenses attributable to the development of the products and processes can be measured reliably.
Directly attributable costs that are capitalized as part of the products and processes include the development
employee costs and an appropriate portion of relevant overheads.
Other development expenditures that do not meet these criteria are recognized as an expense as incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
F-164
Development costs recognized as assets are amortized over their estimated useful lives, which does not
exceed five years.
2.11
Property, plant and equipment are measured at cost less depreciation based on the estimated useful life, and
impairment losses. The costs of internally generated assets comprise all costs directly attributable to the production
The costs relating to the generation of qualifying assets, i.e. assets that require a significant period of time
(at least 6 months) to be put into a ready-to-use state, include capitalized borrowing costs to the extent that they
meet the criteria set forth in IAS 23.
but are reported separately and reversed over the estimated useful life of the subsidized item of property, plant and
equipment through profit and loss.
Depreciation on property, plant and equipment are recorded using the straight-line method and reported in
the function costs. The useful life and depreciation methods are reviewed annually and adjusted to the current
situation and circumstances.
Buildings
Plant and machinery
10-50 years
2-10 years
3-10 years
Items of property, plant and equipment are written off on a pro rata basis in the year in which they are
acquired.
If special events or market trends indicate that an asset is impaired, an impairment test is performed to
assess the carrying amount of the asset (including capitalized development costs).
In this impairment test the carrying amount of the asset and the recoverable value – which is the higher of
the fair value less costs to sell and the value in use – are compared. When determining the recoverable amount based
on the value in use, future cash flows are discounted at a risk-based interest rate. When determining the future cash
flows, the current and future earnings, as well as business segment-related, technological, economic and general
trends are taken into account. If the net carrying amount of assets exceeds the recoverable, impairment losses are
recorded.
cost.
accounting of lease agreements (note 29).
2.12
Investment properties
Assets are classified as financial investments if they are required for the business operation and to generate
additional income or appreciation.
On principle, investment properties are measured using the cost method; this also applies to subsequent
recognition. Investment properties are not written off.
F-165
2.13
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial assets are in particular cash and cash equivalents, trade
receivables and other loans and receivables granted, financial investments held to maturity and original and
derivative financial assets held for trading. Financial liabilities usually result in a repayment claim in cash or in
another financial asset. This includes in particular bonds and other certified liabilities, trade payables, accounts due
to banks, liabilities from finance lease agreements, borrower’s note loans, and derivative financial liabilities.
Financial assets are recognized as soon as NORDENIA becomes party to an agreement regarding a
financial instrument. However, in case of standard market acquisitions and disposals the performance date is
relevant for initial recognition and disposal in the accounts.
Classification
Financial assets are divided into the following categories: at fair value through profit and loss, loans and
receivables and available-for-sale assets. The classification depends on the purpose for which the financial assets
were acquired. Management determines the classification of its financial assets at initial recognition.
(d)
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also
categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current
assets.
(e)
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for maturities greater than 12 months after
the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables
comprise “Trade and other receivables” and “Cash and cash equivalents” in the balance sheet.
(f)
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless the investment matures or
management intends to dispose of it within 12 months of the end of the reporting period.
Financial assets that are not designated to the category “At fair value through profit and loss” are initially
recognized at their fair value less transaction costs. Financial assets carried at fair value through profit and loss are
initially recognized at fair value, and transaction costs are expensed in the income statement. Financial assets are
derecognized when the rights to receive cash flows from the investments have expired or have been transferred and
the group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and
financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables are
subsequently carried at amortized cost using the effective interest method.
Gains and losses arising from financial assets at fair value through profit and loss are presented in the
income statement within “Financial income or expense” in the period in which they arise.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for
sale are analyzed between translation differences resulting from changes in the amortized cost of the security and
other changes in the carrying amount of the security. Translation differences related to changes in amortized cost are
recognized through profit and loss, and other changes in carrying amount are recognized in other comprehensive
income. Gains or losses arising from monetary securities are presented in the income statement outside profit or
loss; the gains or losses arising from non-monetary securities are presented in other comprehensive income. Changes
in the fair value of monetary and non-monetary securities classified as available for sale are recognized in other
comprehensive income.
F-166
When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments
recognized in equity are included in the income statement as “Financial income or expense”.
Interest on available-for-sale securities calculated using the effective interest method is recognized in the
income statement as part of interest income.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize
the asset and settle the liability simultaneously.
Impairment of financial assets
c) Assets carried at amortized cost
The Group assesses at the end of each reporting period whether there is objective evidence that a financial
asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events
that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on
the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:
•
•
•
•
•
•
significant financial difficulty of the issuer or obligor;
a breach of contract, such as a default or delinquency in interest or principal payments;
the Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the
borrower a concession that the lender would not otherwise consider;
it becomes probable that the borrower will enter bankruptcy or other financial reorganization;
the disappearance of an active market for that financial asset because of financial difficulties; or
observable data indicating that there is a measurable decrease in the estimated future cash flows from a
portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be
identified with the individual financial assets in the portfolio, including:
(i)
adverse changes in the payment status of borrowers in the portfolio; and
(ii)
national or local economic conditions that correlate with defaults on the assets in the
portfolio.
The Group first assesses whether objective evidence of impairment exists.
For loans and receivables category, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not
been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is
reduced and the amount of the loss is recognized in the consolidated income statement. If a loan or heldto-maturity
investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis
of an instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s
credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated income
statement.
d) Assets classified as available for sale
The Group assesses at the end of each reporting period whether there is objective evidence that a financial
asset or group of financial assets is impaired. For debt securities, the Group uses the criteria refer to (a) above. In the
case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the
security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale
financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair
F-167
value, less any impairment loss on that financial asset previously recognized through profit and loss – is removed
from equity and recognized in the separate consolidated income statement. Impairment losses recognized in the
separate consolidated income statement on equity instruments are not reversed through the separate consolidated
income statement. If, in a subsequent period, the fair value of a debt instrument classified as available for sale
increases and the increase can be objectively related to an event occurring after the impairment loss was recognized
through profit and loss, the impairment loss is reversed through the separate consolidated income statement.
2.14
Financial assets
The financial assets include investments in non-consolidated companies and investments where the
percentage share does not exceed 20 %. They are measured at cost due to the fact that the fair values are not
available and other applicable measurement methods do not lead any reliable results. The respective financial assets
are recorded under “Financial assets held for sale”.
2.15
Trade receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the
ordinary course of business. Receivables that fall due within one year are classified as current receivables;
receivables that fall due within more than one year are classified as non-current receivables.
Trade receivables are initially recognized at fair value and are classified as "Loans and receivables“ (cf.
note 31.1). Trade receivables are subsequently measured at amortized cost using the effective interest method and
less impairment losses.
2.16
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated balance
sheet, bank overdrafts are shown as "liabilities due to banks" in current liabilities. Cash and cash equivalents are
measured and recognized at their nominal values.
2.17
Derivative financial instruments are initially recognized at fair value at the closing date of the agreement.
They are recorded under "Financial assets at fair value through profit and loss” (cf. note 31.1). They are
subsequently recognized at fair value at the respective balance sheet date. The method for recording profits and
losses depends on whether the derivative instrument was designed as a hedging instrument; if this is the case, the
method depends on the type of hedged item. The Group designs certain derivative financial instruments either as
hedges against certain risks of fluctuating cash flows resulting from a recognized asset or a recognized liability or an
anticipated and highly probably future transaction (cash flow hedge).
Upon completion of the transaction, the Group documents the hedge relation between the hedging
instrument and the basic transaction, the objective of its risk management, as well as the strategy on which the
transaction is based upon completion of the hedge transaction. Furthermore, at the beginning of the hedge relation
and on a continuous basis after that, the Group documents the estimate of whether the derivatives used as hedges
compensate the changes in the fair value of or the cash flows from the basic transaction in a highly efficient manner.
The fair values of the various derivative financial instruments that are used for hedge purposes are listed in
note 35. Movements in the provision for cash flow hedges are outlined in note 27.5. The complete fair value of the
derivative financial instrument designed as a hedging instrument is reported as a non-current asset or non-current
liability, respectively, provided the residual maturity of the hedged basic transaction exceeds twelve months after the
balance sheet date, and as a current asset or liability if the residual maturity is less than twelve months. Held-fortrading derivative financial instruments are reported as current assets or liabilities.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are intended for hedging the cash flow
and can be classified as cash flow hedges is recorded in other comprehensive income. The ineffective portion of
F-168
such changes in the fair value, on the other hand, is recorded directly through profit and loss in the item other
financial expenses or income.
Amounts allocated in equity are reclassified through profit and loss and recorded as income or expenses in
the period in which the hedged basic transaction affects the operating result (e.g. at the date at which a hedge future
sale occurs).
Once a hedge transaction expires, is sold or does no longer meet the criteria for the accounting as a hedge
transaction, the gains or losses accumulated in equity remain in equity and will not be recorded through profit and
loss until the originally hedged future transaction occurs. In the event it is no longer expected that the future
transaction will occur, the gains and losses accumulated in equity are immediately recorded through profit and loss.
2.18
Inventories
production overhead costs, as well as depreciation of items of property, plant and equipment and intangible assets
2.19
IAS 19 “Employee Benefits”.
In this method, not only known pensions and accrued commitments are accounted for, but also estimated
future increases in salaries and pensions. The calculation of significant pension obligations is based on actuarial
expert reports prepared by an independent expert, taking into account biometric accounting bases. Actuarial gains
and losses are offset directly against equity (OCI method).
interest portion, is attributed to the costs in the individual functions. The discounting of the pension obligations and
2.20
According to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”, other accrued liabilities
are recognized to the extent that the company has a present obligation as a result of a past event and it is probable
that an outflow of resources embodying economic benefits will occur and that a reliable estimate can be made of the
amount of the obligation.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the obligation. Increases in the provisions resulting from mere discounting are recorded as interest
expenses through profit and loss.
F-169
Demolition obligations are recognized at the date at which they occur at the discounted value of the
obligation and at the same time the same amount is recognized as provisions on the liabilities side.
2.21
Borrowings and liabilities
Borrowings and liabilities are initially measured at fair value; borrowings are recorded less transaction
costs. All borrowings and liabilities are attributed to the category “Financial debt at amortized cost”.
Subsequently, all borrowings and liabilities are measured at amortized cost. Differences between the
payment net of transaction costs and the repayment amount are presented in the income statement using the effective
interest method.
Trade payables are payment obligations related to goods and services acquired in the course of ordinary
business operations. The liabilities are classified as current debt when payment is due within one year. If not, they
are presented as non-current debt.
2.22
Leases
Leases are classified as finance leases if, as a result of the terms of the lease, basically all risks and rewards
companies of the NORDENIA Group enter into lease agreements as the lessee.
Assets held under finance leases are recorded at the lower of fair value of the asset or the present value of
the respective minimum lease payments as assets of the Group at the beginning of the lease. The corresponding
liability due to lessor shall be recognized in the balance sheet as “Other liability from finance lease“. The lease
payments are attributed on a prorated basis to the financial expenses and the decrease of the lease obligation
resulting in a constant interest rate on the remaining balance of the obligation for each reporting period. The
financial expenditure is recorded directly through profit and loss unless it can be directly attributed to a qualified
asset. In those cases, the cost is recognized in accordance with the general Group guidelines for credit costs and IAS
23. The property, plant and equipment held under a finance lease are written off over the shorter of the estimated
Lease payments resulting from operate leases are recognized directly through profit and loss over the term
of the lease using the straight-line method.
2.23
Non-current held-for-sale assets and disposal groups, and discontinued operations
Non-current assets and disposal groups are reported separately as “held for sale” in the balance sheet, if
they can be sold in their current condition and the sale is probable. When classifying the assets as “held for sale“,
they are recognized at their fair value less costs to sell in the event their fair value is lower than their carrying
amount. Depending on their classification, the liabilities on the liabilities side directly attributable to these noncurrent assets and disposal groups are reported as "held for sale". Discontinued operations are reported separately
when the operation is an independent transaction that represents a separate major line of business or geographical
area of operations, is offered for sale and the Group management has initiated an official sales process.
2.24
Stock options
Stock options involving equity instruments are measured at the fair value at the date at which the option is
granted. This fair value is recorded as personnel expenses over the vesting period. Terms and conditions for
exercising the options that do not depend on market conditions are taken into account in the assumption regarding
the number options that are expected to be exercised. The obligations from share-based payment transactions
involving cash benefits (virtual stock options) are recorded as provisions and measured at the fair value applicable at
the balance sheet date. The expenses are recorded over the vesting period. The fair value of stock options and virtual
stock options is determined using a DCF method and taking into account the most recent findings.
F-170
2.25
Critical accounting estimates and judgments, assumptions for the measurement and changes in
estimates
2.25.1
Critical accounting estimates and judgments
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are addressed below:
-
Determination of necessity and measurement of impairment losses on intangible assets, items of property,
plant and equipment, as well as inventories and financial assets;
Recognition and measurement of pension obligations, anniversary bonuses, and the provision for stock
options;
Assessment of potential deferred tax assets;
Recognition of asset backed securities.
Property, plant and equipment, as well as intangible assets is measured based on estimates of the fair value
life of the assets has to be estimated. The fair value of assets and liabilities, as well as the useful life of assets are
determined based on management's estimates.
estimates are made as well that relate – among others – to the cause, date and amount of impairment. Impairment
which also involves appropriate assumptions of market participants. When identifying aspects that indicate that
there is an impairment, management has to make significant estimates of future cash flows and the fair values of
assets (or groups of assets).
The Group tests annually – in accordance with the accounting policy described in note 2.10a – whether the
goodwill is impaired. The recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of estimates. For details see note 17.
Management records impairment losses on doubtful accounts in order to account for expected losses that
result from customer’s insolvency. The bases used by management in order to assess the appropriateness of the
impairment losses on doubtful accounts are the maturity structure of the receivables and past experience in respect
to the derecognition of receivables, the customer’s credit rating, and changes in terms of payment. In the event the
customer’s financial situation worsens, the scope of the actual amount to be derecognized may exceed the expected
derecognition.
Since 2001, trade receivables of subsidiaries have been sold and assigned to Kaiserplatz Purchaser No. 5
Ltd., Jersey, (KP5) in ABS transactions (asset backed securities). When recognizing the disposal of trade
receivables, management must evaluate whether the transferee (KP5) should be included in the consolidated group
of the NORDENIA Group and whether the disposal is deemed a disposal of receivables as defined in IAS 39.
Whether the transferee should be consolidated shall be determined based on the criteria of SIC-12 “Consolidation of
Special-Purpose Entities”. The basis used by management with respect to the criteria of SIC-12 and IAS 39 are the
agreements with KP5, the credit standing of the customers, the estimated future cash flows from the receivables sold
(timing and amount), as well as a forecast of future interest and exchange rate trends in the financial markets. Hence,
management has to make estimates and forecasts with respect to the criteria of SIC-12 and IAS 39.
F-171
Income taxes have to be estimated for each tax jurisdiction in which the Group operates. The expected
actual income tax for each taxable unit has to be calculated and temporary differences resulting from different
treatment of certain balance sheet items in the consolidated IFRS financial statements and the tax base have to be
evaluated. If temporary differences occur, those differences basically result in the recognition of deferred tax assets
and liabilities in the consolidated financial statements. Management has to make estimates when calculating actual
and deferred taxes. Deferred tax assets are recognized to the extent that it is probable that the assets will be utilized.
The utilization of deferred tax assets depends on the possibility to generate sufficient taxable income in the
respective tax category and tax jurisdiction; legal restrictions regarding maximum loss carryforward periods have to
be taken into account. When assessing whether a future utilization of deferred tax assets is probable, various factors
have to be taken into account, e.g. earnings position in the past, operational plans, loss carryforward periods, tax
plan strategies. If the actual results deviate from those estimates or if the estimates have to be adjusted in the future,
adverse effects on the net assets, financial and earnings position may occur. In the event the impairment test of
deferred tax assets through profit and loss.
based on assumptions regarding the interest rate, life expectancy, and – to a limited extent – the expected earnings
pensions to a limited extent. They are in part based on actuarial evaluations that in turn are based on assumptions
such as the interest rates that are used to calculate the pension obligation. The assumptions regarding the expected
government proceedings and other contingent liabilities, respectively, require major estimates by NORDENIA.
Hence, the assessment of whether it is probable that pending proceedings will be successful or a liability will be
incurred and the amount of the respective obligation is based on the assessment of the respective situation and
Those estimates may change due to new information. NORDENIA obtains new information primarily from services
of internal experts or external experts such as actuarians or legal consultants. Changes in the estimates of those
outflow of economic benefits may fore deviate from the other provisions.
2.25.2
Changes in estimates
The issued corporate bond involves termination options (cf. note 28.2) that shall be measured at fair value
as set forth in IAS 39. In the previous year, the fair value of the termination options was determined using a residual
model that is primarily based on data observed on the market. However, in this financial year, there is no sufficiently
active market for the corporate bond issued by NORDENIA so that no reliable option price can be derived by means
of the residual method due to the fact that there is a very low market liquidity. Therefore, the Group applied a HullWhite option price model for the computation of the fair value of the termination options in this financial year (for
details see note 31.1). This constitutes a change in estimates as specified in IAS 8. The other financial assets as at
December 31, 2011 contain a total of kEUR 2,262 in termination options (prev. year: kEUR 10,493). The change in
the amount of kEUR 8,232 results both from the current change in the fair value of the termination option and the
change in the estimate. It is not possible to differentiate between the individual effects due to the low trading volume
of the corporate bond.
F-172
Disclosures and explanatory comments on the consolidated income statement
3
Sales
Sales primarily comprises revenue from the sale of products less trade discounts and rebates, as well as
incidental revenues from the sale of energy and waste materials, commissions and revenues from the redebiting of
setup costs, engravings and clichees. Service revenue is primarily generated as intercompany service revenue by
companies in the Services division.
2011
kEUR
Revenue from
- Films
- Bags, FIBCs
- Merchandise
Auxiliary revenues
Sales deductions
4
410,301
294,197
139,593
17,123
33,509
-13,940
880,783
6/29-12/31/
2010
kEUR
191,078
137,681
66,658
9,339
10,765
-7,435
408,086
2010
kEUR
377,019
260,500
131,684
18,986
27,258
-13,950
801,497
Cost of sales
The cost of sales comprises cost of sold products, as well as purchase costs of sold merchandise. In addition
to directly attributable costs such as material, labor and energy costs, they also include general overhead costs,
including depreciation.
The cost of sales also includes additions to warranty provisions and provisions for losses from orders.
The cost of sales breaks down as follows:
2011
kEUR
554,779
94,816
25,272
22,905
19,582
16,004
9,840
4,285
-532
-10,591
736,360
Material expenses
Personnel expenses
Operating expenses
Energy costs
Consumables
Production-related administrative expenses
Warranty expenses
Others
6/29-12/31/
2010
kEUR
251,188
48,524
12,525
10,018
8,346
8,477
4,896
2,041
739
-7,950
338,804
The other cost of sales primarily comprises changes in inventories and own work capitalized.
F-173
2010
kEUR
487,190
95,099
25,104
20,159
17,345
15,451
9,334
4,151
1,515
-17,802
657,546
5
Selling costs
Freight and commissions
Personnel expenses
Operating expenses
Purchased services
Other selling costs
6
2011
kEUR
18,490
11,837
7,101
760
720
4,873
43,783
6/29-12/31/
2010
kEUR
8,618
5,480
3,053
469
361
2,295
20,276
2010
kEUR
17,015
11,119
6,042
951
719
4,329
40,175
2011
kEUR
20,774
5,475
3,102
2,054
144
31,549
6/29-12/31/
2010
kEUR
14,125
2,863
1,288
1,215
685
20,176
2010
kEUR
34,317
5,555
2,858
2,426
881
46,037
Personnel expenses
IT expenses
Provisions related to the stock option program in the amount of kEUR 511 (prev. year: kEUR 3,883,
accumulated previous year: kEUR 14,123) affected the personnel expenses.
7
Research costs
In addition to the research costs, this item also includes non-capitalizable development costs according to
IAS 38.
2011
kEUR
8
5,264
6/29-12/31/
2010
kEUR
2,624
2010
kEUR
5,309
This item comprises exchange gains and losses resulting from the Company’s activities that are not
attributable to financing.
The exchange gains/losses from business operations explicitly include exchange gains and losses from
trade receivables, trade payables, intercompany cash accounts, foreign currency hedges related to operating
activities, as well as foreign currency bank wires related to other receivables/liabilities.
2011
kEUR
1,163
F-174
6/29-12/31/
2010
kEUR
-581
2010
kEUR
-116
9
Gains from sale of fixed assets
ABS income
Rebate credit notes
Income from retransfer of allowance
Compensations
Income from the reversal of provisions, accruals and
deferrals
2011
kEUR
1,427
631
621
571
536
383
361
235
196
0 *)
453
5,415
6/29-12/31/
2010
kEUR
18
67
0
98
70
423
14
142
322
2010
kEUR
297
84
0
440
275
423
424
268
504
2,858
327
4,339
5,428
808
8,951
638
0
123
166
396
1,323
6/29-12/31/
2010
kEUR
1,074
1,032
379
358
0
2,843
2010
kEUR
1,200
1,032
578
600
25
3,435
2011
kEUR
21,007
6,425
1,767
1,334
1,115
0
31,648
6/29-12/31/
2010
kEUR
153
0
1,755
723
535
38
3,204
2010
kEUR
2,259
0
1,755
1,419
954
38
6,425
*) cf. note 2.1.2.4
10 Other operating expenses
2011
kEUR
Additions to impairment losses on doubtful accounts
Other taxes
Expenses relating to disposal of fixed assets
11 Financial income
Exchange gains from financial transactions *)
Income from measurement of options
Income from measurement of finance swaps
Income from loans
Other financial income
F-175
12 Financial expenses
2011
kEUR
35,743
21,434
14,656
5,660
0
0
77,493
Interest expenses
Exchange losses from financial transactions *)
Expenses relating to measurement of options
Expenses relating to measurement of finance swaps
Impairment losses on financial assets
Other financial expenses
6/29-12/31/
2010
kEUR
17,104
986
2,990
0
362
519
21,961
2010
kEUR
22,180
1,229
2,990
3,523
467
519
30,908
12/31/2011
kEUR
500
12/31/2010
kEUR
747
*) cf. note 2.1.2.4
13 Income taxes
The taxes on income and earnings at the NORDENIA Group break down as follows:
period
2011
kEUR
12,260
6/29-12/31/
2010
kEUR
387
2010
kEUR
11,647
-334
-2,948
8,978
-206
3,386
3,567
313
-1,140
10,820
The income tax rates of the foreign companies range between 10.0 % and 37.0 % (prev. year: 10.0 % and
38.0 %). The tax rate in the United States fell from 38.0 % to 37.0 %. There were no other changes in tax rates.
disclosed tax expenses. In order to determine the anticipated tax expenses the respective applicable German total tax
rate is multiplied by the earnings before taxes.
2011
kEUR
6/29-12/31/
2010
kEUR
2010
kEUR
Earnings before income taxes on continued operations
23,237
8,364
33,347
0
23,237
0
8,364
-926
32,421
30.00 %
30.00 %
30.00 %
6,971
2,509
9,726
Earnings before income taxes on discontinued operations
EBT
Income tax rate (incl. trade tax) of NORDENIA International
AG
F-176
Tax increase resulting from non-deductible expenses from the
sale of consolidated units
Increases in taxes resulting from additions for trade tax
purposes
period
Effect from changes in tax rates
Impairment losses on deferred tax assets on loss carryforwards,
as well as temporary differences
Utilization of adjusted deferred tax assets on loss carryforwards
Other differences
87
7
-332
418
0
270
2
-625
841
0
370
1
-797
974
332
1,127
550
647
-828
-237
197
-166
2,053
112
400
112
407
-68
-289
-2
-251
-842
-305
8,978
38.60 %
3,567
42.66 %
10,820
33.38 %
For details regarding pending tax law disputes with the tax authorities see the disclosures in note 40.4.
The taxes in the amount of EUR -422k recorded in other comprehensive income include
actuarial gains and losses of EUR -313k and hedging instruments held for the hedging of cash flow in the amount of
EUR -109k.
14 Income/losses from discontinued operations and held-for-sale assets (groups of assets)
a) Disposal group held for sale
The assets and liabilities of NORDENIA Emsdetten GmbH, Emsdetten, including the company's
investment in NORDENIA Polska Starogard GD sp. z o. o., Starogard/Poland (both part of the AFC division) were
reported as held for sale due to the management's resolution to sell the assets and liabilities of the company and the
understanding and approval of the Supervisory Board dated November 30, 2011. Management expects that the sale
will be completed in the first quarter of 2012.
6/29-12/31/
2011
2010
2010
kEUR
kEUR
kEUR
Intangible assets
177
0
0
2,046
0
0
Deferred tax assets
211
0
0
98
0
0
Inventories
1,797
0
0
997
0
0
5,326
0
0
Liabilities relating to the
assets held for sale
Pension obligations
725
0
0
26
0
0
Trade payables
800
0
0
492
0
0
Provisions
151
0
0
2,194
0
0
F-177
6/29-12/31/
2010
2011
Accumulated income or expenses that are recorded directly in
equity and relating to the group of assets classified as held for
sale
Revenue reserves
-269
2010
0
0
b) Discontinued operation
In the previous calendar year, the NORDENIA Group disposed of the NORDENIA Morocco Casablanca
S.A.R.L. operation. The losses from this discontinued operation break down as follows:
6/29-12/31/
2010
kEUR
2011
kEUR
NORDENIA Morocco Casablanca S.A.R.L
Total from separate financial statements
Measurement at fair value/
Deconsolidation effect (profit/loss)
2010
kEUR
0
0
0
0
0
0
0
0
0
0
-926
-926
15 Other disclosures and explanatory comments on the consolidated income statement
2011
kEUR
Costs of raw material and supplies
Finished and unfinished goods, as well as merchandise
Material expenses
Wages and salaries
Social security taxes
Expenses for old-age pensions
Personnel expenses
Depreciation of intangible assets and property,
plant and equipment
6/29-12/31/
2010
kEUR
2010
kEUR
549,960
5,406
555,366
248,728
2,682
251,410
482,490
5,171
487,661
2011
kEUR
108,819
20,935
1,406
131,160
6/29-12/31/
2010
kEUR
58,261
10,737
830
69,828
2010
kEUR
121,448
20,902
1,718
144,068
28,540
14,322
28,731
For details on the breakdown by categories of assets see the Schedule of Fixed Assets in notes 17 and 18.
F-178
16 Portion of earnings/losses attributable to non-controlling interests
Non-controlling interests of the Company
%
11.64 *)
NORDENIA Deutschland Lohne GmbH
10.0
Polireal S.L.
89.6 **)
NORDENIA Iberica Barcelona S.A.
2.2 ***)
Portion of earnings/losses attributable to non-controlling
interests
6/29-12/31/
2010
kEUR
2011
kEUR
0
-15
0
-25
0
-4
-638
0
2010
kEUR
340
-2
-638
0
-40
-642
-300
*)
This item relates to the non-controlling interests resulting from the restructuring of the operations
as at June 28, 2010; the ratio is determined based on the stocks that are not held as treasury stock. Upon merger of
NORDENIA International AG onto Nordenia Holdings effective July 1, 2010, the non-controlling interests ceased.
**) Upon effectiveness of the new standard IAS 27 (2008), annual net losses attributable to non-controlling
interests are attributed to the non-controlling interests also in those cases where they do not exceed the equity
portion attributable to the non-controlling interests and there is no obligation to make subsequent contributions. The
annual net profit of kEUR 82 attributable to the non-controlling interests for the period from January 1, 2010 to June
28, 2010 is not included in the amount disclosed in the 2010 calendar year. This amount was offset against the losses
attributable to the non-controlling interests until the change of IAS 27. Upon merger of former NORDENIA
International AG onto Nordenia Holdings effective July 1, 2010, the non-controlling interests ceased.
***)
This amount relates to the shares in the profits or losses attributable to the non-controlling interests
in NORDENIA Iberica Barcelona S.A. that resulted from the merger of Polireal S.L. onto NORDENIA Iberica
Barcelona S.A..
F-179
Disclosures and explanatory comments on the consolidated balance sheet
17 Intangible assets
Intangible assets are goodwill, development costs (internally generated assets), patents, software, licenses
and similar rights.
The impairment test was performed using a DFC method based on a multi-year plan of Nordenia
(Malaysia) Sdn. Bhd., Ipoh/Malaysia. While the growth rates are accounted for by the cash flow trends in the
calculation, the Company's future cash flows were measured using a weighted cost of capital rate (WACC) that also
covers country-specific risks.
The development costs include acquired and internally generated development costs that satisfy the criteria
of IAS 38. Depreciation on intangible assets is included in the corresponding function costs in the consolidated
income statement. For details regarding total depreciation see note Fehler! Verweisquelle konnte nicht
gefunden werden..
Impairment test for goodwill
Goodwill is the difference not attributable to the acquired built-in gains from the acquisition of 50 % of the
shares in NORDENIA (Malaysia) Sdn. Bdh., Ipoh/Malaysia from the former joint venture partner. The abovedescribed company was identified as the smallest cash-generating unit for the impairment test. Goodwill is not
depreciated and is subject to an annual impairment test.
The recoverable amount of the cash-generating unit was determined based on the value in use. The amount
was measured by discounting the expected cash flows of the Company. The detailed budget period runs from 2012
through 2015; it is based on assumptions with respect to future sales prices, sales volumes and costs, taking into
account the underlying economic conditions. A perpetuity at a general growth rate of 1.5 % (prev. year: 1.5 %) was
determined for the period after this four-year detailed budget period. The weighted capital cost rate before taxes on
which the calculation is based is 8.91 % (prev. year: 9.22 %). The value in use so determined exceeded the carrying
amount as at December 31, 2011. An impairment loss would neither have resulted from a deviation of the future
cash flows by 47.16 % (prev. year: 44.06 %).
F-180
The intangible assets of the NORDENIA Group developed as follows in the financial year ended December
31, 2011 and the previous period:
Balance as at June 29, 2011
Additions
Disposals
Reclassifications
Balance as at December 31,
2010 / January 1, 2011
Reclassification of the disposal
group *)
Additions
Disposals
Reclassifications
2011
Additions
Disposals
Reclassifications
2010 / January 1, 2011
group *)
Additions
Disposals
Reclassifications
2011
December 31, 2011
December 31, 2010
Goodwill
kEUR
7,372
0
0
-261
0
Software
kEUR
18,103
-56
380
-25
33
Concessions
industrial
property rights
kEUR
3,047
-52
121
0
24
7,111
-30
18,435
-91
3,140
65
631
0
245
0
29,562
-56
0
0
0
0
-543
598
-483
94
-158
0
-8
1
0
83
0
0
0
333
0
-166
-701
1,014
-491
-71
7,081
18,008
3,040
714
413
29,256
990
1
0
-261
0
16,532
-54
369
-25
0
1,318
-24
267
0
0
380
-1
41
0
0
0
0
0
0
0
19,220
-78
677
-286
0
730
-31
16,822
-78
1,561
34
420
0
0
0
19,533
-75
0
0
0
0
-356
774
-483
0
-158
559
-7
0
0
74
0
0
0
0
0
0
-514
1,407
-490
0
699
16,679
1,989
494
0
19,861
6,382
1,329
1,051
220
413
9,395
6,381
1,613
1,579
211
245
10,029
F-181
Development
costs
kEUR
563
0
21
0
47
Downpayments
kEUR
0
0
166
0
79
Total
kEUR
29,085
-108
688
-286
183
18 Property, plant and equipment
The property, plant and equipment of the NORDENIA Group developed as follows in the financial year
ended December 31, 2011 and the previous period:
Additions
Disposals
Reclassifications
2010 / January 1, 2011
group *)
Additions
Disposals
Reclassifications
2011
Additions
Disposals
Reclassifications
2010 / January 1, 2011
group *)
Additions
Disposals
Reclassifications
2011
December 31, 2011
December 31, 2011
Other
equipment,
fixtures,
fittings and
office
equipment
kEUR
60,412
-93
2,446
-579
97
Downpayments
and
work in
process
kEUR
12,965
-479
2,996
-21
-11,139
Total
kEUR
596,448
-9,146
16,029
-1,877
-58
Land,
leasehold
rights
kEUR
7,173
-12
5
0
187
Buildings
kEUR
118,593
-2,043
1,382
-297
6,119
Technical
equipm.,
plant and
machinery
kEUR
397,305
-6,519
9,200
-980
4,678
7,353
123,754
403,684
62,283
4,322
601,396
-144
-439
-1,873
-728
-117
-3,301
-38
0
-210
0
-2,060
2,408
-4,987
342
-3,580
16,313
-2,144
3,442
-1,343
4,610
-4,091
420
-4
15,431
0
-4,133
-7,025
38,762
-11,432
71
6,961
119,018
415,843
61,151
15,500
618,472
100
-4
4
0
0
37,192
-730
1,508
-23
0
300,961
-4,977
9,768
-872
0
44,047
-125
2,366
-543
0
0
0
0
0
0
382,300
-5,836
13,646
-1,438
0
100
1
37,947
70
304,880
-1,045
45,745
-370
0
0
388,672
-1,344
0
7
0
0
-581
3,040
-2,323
0
-3,247
19,277
-1,990
0
-1,156
4,809
-4,023
0
0
0
0
0
-4,984
27,133
-8,336
0
108
38,153
317,876
45,006
0
401,143
6,853
80,865
97,967
16,145
15,500
217,329
7,253
85,807
98,804
16,538
4,322
212,724
Impairment losses on property, plant and equipment were – just as in the previous year – not recorded in
the financial year; impairment losses were not reversed in the reporting period or in the previous financial years.
Borrowing costs were capitalized to the extent that they met the criteria set forth in IAS 23.
The prepayments and assets under construction are attributed to the following types of assets upon
completion:
F-182
12/31/2011
kEUR
12,388
1,744
1,368
15,500
Plant and machinery
Other plant, factory and office equipment
Buildings
12/31/2010
kEUR
3,560
432
330
4,322
Property, plant and equipment in the amount of kEUR 4,454 (prev. year: kEUR 1,434) were assigned as
collateral. The carrying amount of the assets capitalized via finance leases totals kEUR 9,917 (prev. year:
kEUR 13,285).
19 Investment properties
The investment properties developed as follows in the financial year ended December 31, 2011 and the
previous period:
Additions
Disposals
Reclassifications
Balance as at December 31, 2010 / January 1, 2011
Additions
Disposals
Reclassifications
Balance as at December 31, 2011
kEUR
122
3
0
0
-125
0
0
0
0
0
0
- Impairment losses
Additions
Disposals
Balance as at December 31, 2010 / January 1, 2011
Additions
Disposals
Balance as at December 31, 2011
0
0
0
0
0
0
0
0
0
Net carrying amount as at December 31, 2011
0
0
In the past, this item included a property in Hungary that was reclassified to the item “Land” in this
comparative period. The item was reclassified due to the fact that the criteria of IAS 40 were no longer satisfied.
F-183
20 Financial assets
20.1
The shares and investments developed as follows in the financial year ended December 31, 2011 and the
previous year:
Shares
kEUR
Balance as at Jun. 29, 2010
Additions
Disposals
Balance as at Dec. 31, 2010 / Jan. 1, 2011
Additions
Disposals
Balance as at Dec. 31, 2011
469
0
0
-463
6
0
1,250
0
1,256
Investments
kEUR
1,531
0
0
0
1,531
0
0
0
1,531
impairment losses
Additions
Disposals
Balance as at Dec. 31, 2010 / Jan. 1, 2011
Additions
Disposals
469
0
0
-463
6
0
0
0
6
1,301
0
0
0
1,301
0
0
0
1,301
1,770
0
0
-463
1,307
0
0
0
1,307
1,250
0
230
230
1,480
230
Total
kEUR
2,000
0
0
-463
1,537
0
1,250
0
2,787
The addition to investments relates to investments in the newly founded company NORDENIA (China)
Film Technology Co., Ltd., Taicang/China that was not consolidated in 2011 for materiality reasons.
F-184
20.2
The other financial assets developed as follows in the financial year ended December 31, 2011 and the
previous year:
Additions
Industrial
revenue
bonds
Termination
options
kEUR
kEUR
Lessee
loans
Other
Financial
instruments
kEUR
kEUR
Total
kEUR
13,831
-1,126
0
0
0
13,483
4,128
0
0
1,937
-2
17
19,896
-1,128
13,500
0
0
0
-31
-31
12,705
440
0
13,483
0
0
4,128
0
0
1,921
-2
17
32,237
438
17
0
0
0
-1,499
-1,499
13,145
13,483
4,128
437
31,193
Additions
0
0
0
0
0
2,990
0
0
0
738
0
8
738
0
2,998
Disposals
Balance as at Dec. 31, 2010 / Jan. 1,
2011
Additions
0
0
0
-8
-8
0
0
0
2,990
0
8,231
0
0
0
738
0
0
3,728
0
8,231
Disposals
0
0
0
-353
-353
0
11,221
0
-385
11,606
13,145
2,262
4,128
52
19,587
12,705
10,493
4,128
1,183
28,509
Disposals
Balance as at Dec. 31, 2010 / Jan. 1,
2011
Additions
Disposals
Impairment losses
December 31, 2011
December 31, 2010
The additions to derivative financial instruments recorded in the previous year reflect the option to repay
the bond early as agreed-upon when the industrial revenue bond was granted. The option is classified as a derivative
financial instrument as defined in IAS 39 and thus measured at fair value through profit and loss. For details see our
explanatory comments in note 31.1.
For a description of the bond and the return price agreed upon, see note 28.2.
For details regarding the industrial revenue bonds, see note 29.
The lessee loans comprise two loans that were granted to TGL Warehousing GmbH & Co. KG,
Gronau/Westf. These loans serve ensure the borrower's claim for payment under the respective lease agreements.
F-185
The loan granted on November 22, 2004 in the amount of kEUR 2,628 was granted for the purpose of
erecting a multi-purpose hall. It has a term of 13.5 years starting from the beginning of the lease and bears interest of
3.5 % p.a. The multi-purpose hall is accounted for in the property, plant and equipment of Nordenia Deutschland
Gronau GmbH, Gronau/Westf. as a finance lease.
The loan granted on March 19, 2008 in the amount of kEUR 1,500 was granted for the purpose of erecting
a block storage. It has a term of 10 years starting from the beginning of the lease and bears interest of 4.95 % p.a.
The lease agreement regarding the block storage was entered into as an operate lease.
The other financial instruments comprise financial instruments classified as “available for sale” in the
amount of kEUR 0 (prev. year: kEUR 964).
21 Deferred tax assets
Deferred taxes are determined based on the tax rates applicable in the respective countries. Changes in tax
laws passed at the balance sheet date have already been accounted for. The income tax rates of the individual foreign
companies range from 10.0 % to 37.0 % (prev. year: 10.0 % and 38.0 %).
Deferred tax assets were offset against deferred tax liabilities if they relate to taxes on income and earnings
that are imposed by the same fiscal authority and if the company is entitled to offset any actual claim for tax refund
with the actual tax liability.
Intangible assets
Financial assets
Inventories
Pension provisions
Trade payables
Tax losses carried forward, interest carried forward, and tax
credits
./. Offsets
Disclosure*)
12/31/2011
Asset
Liability
kEUR
kEUR
147
-24
1,173
-20,089
118
-689
1,415
-265
3,247
-875
1,983
0
2
-118
5,872
-886
7,438
-3,270
18,125
-5,485
12,640
0
0
-22,946
5,485
-17,461
-4,821
12/31/2010
Asset
Liability
kEUR
kEUR
260
-2
1,144
-19,643
72
-3,158
1,036
-253
4,110
-493
1,732
-42
17
-242
4,122
-76
4,664
-1,296
15,861
-7,375
8,486
0
0
-23,909
7,375
-16,534
-8,048
*) incl. the deferred tax assets relating to the held-for-sale assets
The net deferred taxes changed as follows:
12/31/2011
kEUR
8,048
142
-2,947
-422
4,821
Balance at the beginning of the financial year
Expenditure in profit and loss
Income tax recorded in other comprehensive income
Balance at the end of the financial year
F-186
12/31/2010
kEUR
4,813
-380
3,386
229
8,048
Disposal of subsidiaries
Change in offsetting
Deferred tax assets
Disposal of subsidiaries
Change in offsetting
12/31/2011
kEUR
16,534
164
0
-1,127
0
1,890
17,461
12/31/2010
kEUR
17,060
-517
0
3,292
0
-3,301
16,534
12/31/2011
kEUR
-8,486
-22
0
-1,820
-422
-1,890
-12,640
12/31/2010
kEUR
-12,247
137
0
94
229
3,301
-8,486
12/31/2011
kEUR
12/31/2010
kEUR
The aging of the deferred tax assets and liabilities is as follows:
Within 12 months
Within more than 12 months
Within 12 months
Within more than 12 months
3,912
14,213
18,125
3,037
12,824
15,861
2,482
20,464
22,946
4,821
2,802
21,107
23,909
8,048
As at December 31, 2011, the Group had corporate tax loss carryforwards in the amount of kEUR 14,518
(prev. year: kEUR 9,535), trade tax loss carryforwards in the amount of kEUR 1,355 (prev. year: kEUR 1,871),
interest carryforwards in the amount of kEUR 5,687 (prev. year: kEUR 0), as well as tax refunds in the amount of
kEUR 10,276 (prev. year: kEUR 10,130). The corporate tax loss carryforwards primarily include those of foreign
companies (kEUR 13,165 (prev. year: kEUR 7,782)) and are in part limited in their utilization.
The amounts comprise corporate tax loss carryforwards in the amount of kEUR 10,510 (prev. year:
kEUR 6,270) for which no deferred taxes were recorded in the balance sheet due to the fact that, at present, it is not
12/31/2011
12/31/2010
Forfeited within
5 years
kEUR
35
178
Forfeited within
15 years
kEUR
11,723
7,033
Unlimited
use
kEUR
2,760
2,324
Total
kEUR
14,518
9,535
The interest carried forward exclusively relate to German companies. The amount's deductibility is not
limited in time.
F-187
The tax refunds relate to tax credits of NORDENIA (Malaysia) Sdn. Bhd., Ipoh/Malaysia. This amount's
deductibility is not limited.
The deferred taxes relating to losses carried forward include the amount of kEUR 843 (prev. year:
kEUR 37) relating to companies that accrued losses in the current financial year. The amount was recognized, since
a positive business trend of the respective companies is expected.
Impairment losses on deferred tax assets in the amount of kEUR 3,270 (prev. year: kEUR 1,296) relate to
tax loss carryforwards in the amount of kEUR 2,172 (prev. year: kEUR 1,253), since the use of the respective loss
carryforwards is not probable. The loss carryforwards on which the impairment losses are based may mainly be used
within 15 years.
Only tax loss carryforwards in the amount of kEUR 10,510 (prev. year: kEUR 6,275) are affected. As in
the previous year, the impairment losses only relate to foreign subsidiaries.
The Group does not account for any deferred tax liabilities relating to retained profits of the subsidiaries to
the extent that these profits are likely to be regarded as permanently invested.
The temporary differences from investments in subsidiaries and joint ventures total kEUR 41,478 (prev.
year: kEUR 40,435). No deferred taxes were recorded for the taxes on these temporary differences of kEUR 622
(prev. year: kEUR 806k) since the Group intends neither to sell the investments nor make a distribution.
22 Other non-current assets
The other non-current assets
December 31, 2011 and the previous year:
developed
Reinsurance old-age part-time
Financial assets
as
follows
in
the
financial
year
ended
12/31/2011
kEUR
68
0
68
12/31/2010
kEUR
136
58
194
243
243
311
254
254
448
12/31/2011
kEUR
28,553
24,912
51,281
174
104,920
12/31/2010
kEUR
35,473
18,100
47,031
80
100,684
12/31/2011
kEUR
116,312
99,951
16,361
-11,393
104,920
12/31/2010
kEUR
111,584
90,708
20,876
-10,900
100,684
23 Inventories
Prepayments made
Inventories (gross)
Impairment losses
In the reporting period, impairment losses were recorded on inventories through profit and loss in the
amount of kEUR 802 (accumulated previous year: kEUR 1,323). The impairment losses were recorded in the cost of
F-188
sales (material expenses) through profit and loss. Other changes in the impairment losses result from utilization and
disposals, currency translation, as well as the reclassification of the disposal group.
As in the previous period, no inventories were pledged as security for liabilities at the balance sheet date.
24 Trade receivables
12/31/2011
kEUR
85,275
Trade receivables
12/31/2010
kEUR
72,332
The receivables are broken down by due date and aging at the balance sheet date as follows:
Carrying
amount
of trade
receivables
kEUR
thereof neither
impaired nor
past due at the
balance sheet
date
kEUR
thereof not impaired, but past due within the timeframe specified at the balance sheet
date
< 30
> 30 days
> 60 days
> 90 days
> 120 days
days
< 60 days
< 90 days
< 120 days
< 360 days
> 360 days
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
12/31/2011
85,275
78,095
8,853
927
339
66
45
14
12/31/2010
72,332
70,611
4,651
664
450
308
73
43
In respect to the trade receivables that are neither impaired nor past due, there are no indications at the
balance sheet date that the debtors might not meet their payment obligations.
The maximum credit risks are reflected in the carrying amounts of the respective financial instruments. The
insurances were agreed upon. As at December 31, 2011, trade receivables in the amount of kEUR 5,491 (prev. year:
kEUR 4,463) were insured. KEUR 843 of said amount (prev. year: kEUR 322) relate to past due accounts.
Development of impairment losses on trade accounts receivable:
Balance at
1/1/2011
kEUR
2,505
Currency
differences
kEUR
-31
Addition
kEUR
614
Utilization
kEUR
315
Reversal
kEUR
574
Balance at
12/31/2011
kEUR
2,199
Since 2001, trade receivables of subsidiaries are sold and assigned to Kaiserplatz Purchaser No. 5 Ltd.,
Jersey, in ABS transactions (asset backed securities). The revised agreement entered into at the end of 2006 expires
in 2013 and is automatically extended by another five years if neither party cancels the agreement within the
stipulated period of time. The agreement defines maximum accumulated acquisitions of receivables of EUR 70
million and USD 10 million. Furthermore, it stipulates that receivables be purchased at a price of approx. 90.5 % of
the nominal amount of the respective receivables. The ABS transaction results in an improvement of the liquidity
and the balance sheet structure of the Group. There is a decrease in trade receivables, on the one hand, and a
corresponding decrease in bank liabilities, on the other hand. As at December 31, 2011, receivables in the amount of
kEUR 48,219 (prev. year: kEUR 42,403) had been sold and assigned to Kaiserplatz Purchaser No. 5 Ltd., Jersey.
When determining the value of the trade receivables not sold, each change in the credit standing between
the date at which the credit is granted and the balance sheet date is accounted for. There is no significant
concentration of the credit risk due to the fact that the remaining range of customers is wide and there are no
correlations. Thus, the management is of the opinion that no other risk prevention measures beyond the impairment
losses already recorded are necessary. The additions to and reversals of impairment losses were recorded under
other operating expenses through profit and loss (cf. note 10).
F-189
The risks of bad debt retained in part result in a continuing involvement as defined in IAS 39 20c (ii). The
scope of the continuing involvement is determined based on the extent to which the company is still exposed to the
risk of changes in the value of the transferred asset. The assets of the NORDENIA Group resulting from the
continuing involvement total kEUR 1,239 at the balance sheet date. A claim for payment of the residual purchase
price and an associated liability were recorded in the amount of the remaining risk item at December 31, 2011.
25 Other current assets
Suppliers’ bonuses and creditors with debit balances
Income from insurance
Income from fixed-term deposit transactions (FAHfT)
Interest income
Personnel-related receivables
Receivables from current loans
Financial assets
Income from other taxes
Accruals
12/31/2011
kEUR
7,542
5,980
603
542
234
120
111
0
253
15,385
12/31/2010
kEUR
6,441
3,380
8
855
33
129
144
341
319
11,650
12/31/2011
kEUR
3,655
733
587
167
5,142
20,527
12/31/2010
kEUR
6,054
933
1,008
229
8,224
19,874
As in the previous period, there were no material other financial assets that were past due at the balance
sheet date.
The maximum credit loss risk is reflected in the carrying amounts of the other financial assets. The carrying
amounts mainly correspond to the fair values.
Balance at
1/1/2011
kEUR
1,069
Currency
differences
kEUR
Addition
kEUR
0
Utilization
kEUR
0
Reversal
kEUR
0
0
Balance at
12/31/2011
kEUR
1,069
When determining the value of the other current assets, each change in the credit rating between the date at
which the credit is granted and the balance sheet date is accounted for. There is no significant focus in the attribution
of the credit risk. Thus, the management is of the opinion that no other risk prevention measures beyond the
impairment losses already recorded are necessary. The additions to and reversals of impairment losses are recorded
through profit and loss.
F-190
26 Cash and cash equivalents
12/31/2011
kEUR
27,336
12/31/2010
kEUR
35,404
The maximum credit risks are reflected in the carrying amount of the cash. The carrying amounts mainly
For details regarding the development of the cash see the consolidated cash flow statement (Appendix II):
27 Shareholders' equity
The changes in equity of the NORDENIA Group are outlined in the consolidated statement of changes in
group equity (Appendix II).
27.1
Subscribed Capital
The amount as at December 31, 2011 reflects the subscribed capital of NORDENIA International AG as
the legal parent of the NORDENIA Group.
The Company‘s share capital totals kEUR 29,190 and is divided into 29,189,579 individual bearer shares
with an imputed share in the share capital of EUR 1.00 each. The share capital is paid in full and each share grants
one vote.
On October 28, 2010, the directors of Nordenia Holdings AG (now NORDENIA International AG) and
former NORDENIA International AG entered into a notarized agreement regarding the merger of the two
companies by way of assumption of the former NORDENIA International AG by Nordenia Holdings AG. For the
purpose of the merger, the extraordinary annual general meeting of Nordenia Holdings AG resolved on December 8,
2010 a capital increase by kEUR 3,770 to kEUR 29,190 by issuing a total of 3,770,401 new individual bearer shares
with an imputed share in the share capital of EUR 1.00 each. The merger and the capital increase were registered in
the Handelsregister [Register of Companies] on May 26, 2011.
The directors of NORDENIA International AG are authorized – with the prior approval of the Supervisory
Board – to increase the share capital by May 17, 2016 against cash contribution or contribution in kind once or
several times up until the amount of kEUR 14,595.
As at December 31, 2011, the balance of authorized capital totals kEUR 14,595 (prev. year: kEUR 12,710).
27.2
Capital reserve
The capital reserve decreased from kEUR 177,183 as at December 31, 2010 to
kEUR -178,529 as at December 31, 2011. This is based on a change of non-controlling interests in NORDENIA
Iberica Barcelona S.A., Barcelona/Spain reported as an equity transaction.
27.3
Revenue reserves
12/31/2011
kEUR
-2,167
91,240
89,073
Other retained earnings and profits carried forward
F-191
12/31/2010
kEUR
-1,440
85,802
84,362
Actuarial gains and losses resulting from the measurement of pension obligations based on adjusted and
modified actuarial assumptions are recorded in equity; they are recorded outside profit and loss (OCI method). In the
reporting period, actuarial losses in the amount of kEUR 1,041 (prev. year: actuarial gains of kEUR 405) and
deferred taxes on these actuarial losses in the amount of kEUR 313 (prev. year: kEUR -122) were recorded in
equity.
27.4
At the balance sheet date, the Group disclosed earnings of kEUR 14,299 (prev. year: kEUR 5,438)
attributed to the parent’s shareholders.
27.5
Other reserves
Currency adjustment item
Hedging instruments from cash flow hedges (less deferred taxes)
12/31/2011
kEUR
-5,174
-186
-5,360
12/31/2010
kEUR
-3,176
0
-3,176
The currency adjustment item comprises the differences from foreign currency translation of the foreign
subsidiaries’ separate financial statements that were recorded outside profit or loss. The changes over the previous
year mainly result from the inflation of the HUF, while the U.S. dollar was subject to revaluation.
27.6
Non-controlling interests
The non-controlling interests as at December 31, 2011 relate to the non-controlling interests held by
NORDENIA Deutschland Lohne GmbH, Steinfeld, and NORDENIA Iberica Barcelona S.A.
F-192
28 Liabilities
1 year
12/31/ 06/28/
2010
2010
kEUR kEUR
0
0
0
0
33,239 39,609
732 3,039
83,638 70,911
1,135 3,893
57,955 48,274
Due within
1 to 5 years
12/31/ 06/28/
2010 2010
kEUR kEUR
9,984 9,978
0
0
1,820
448
0
0
11
0
0
0
2,695 15,654
Subordinated loans**) ..............................
Bonds*) ....................................................
Liabilities to banks**) ..............................
Notes payable**) ......................................
Trade payables**) ....................................
Current income tax liabilities**) ..............
- thereof personnel-related
liabilities ........................................ 3,063 3,352
0
0
- thereof for finance leases ............... 14,108 1,545 2,299 15,470
- thereof sundry other liabilities........ 10,525 13,719
58
117
- thereof accruals .............................. 30,259 29,658
338
67
Other non-financial liabilities**) ............. 3,488 4,493
277
333
- thereof prepayments .......................
143
182
0
0
- thereof liabilities resulting from
4
25
234
296
accrued government grants ............
- thereof for taxes ............................. 1,492 2,202
0
0
- thereof for social security ...............
540
547
0
0
- thereof sundry other liabilities........
299
330
43
37
- thereof accruals .............................. 1,010 1,207
0
0
180,187 170,219 14,787 26,413
*)
**)
28.1
more than 5 years
Total
12/31/ 06/28/
12/31/ 06/28/
2010
2010
2010
2010
kEUR kEUR
kEUR
kEUR
0
0
9,984
9,978
280,770 280,873 280,770 280,873
0
0
35,059
40,057
0
0
732
3,039
0
0
83,649
70,911
0
0
1,135
3,893
10,321 6,932
70,971
70,860
0
4,661
5,660
0
27
0
0
5,164
1,768
0
58
0
3,063
21,068
16,243
30,597
3,792
143
3,352
22,179
15,604
29,725
4,884
182
6
19
0
0
0
0
21
39
0
0
291,118 287,863
244
1,492
540
363
1,010
486,092
340
2,202
547
406
1,207
484,495
The fair value as at December 31, 2011 totaled kEUR 282,100 (prev. year: kEUR 310,072).
Subordinated loans
In connection with the issuance of a subordinated corporate bond on July 9, 2010 bearing interests of
9.75 %, NORDENIA International AG was granted a subordinated loan by Landessparkasse zu Oldenburg in the
amount of kEUR 10,000. The loan has a term elapsing on July 31, 2014 and is discounted at the 6-month Euribor
applicable two days prior to the expiration of the respective previous interest period plus a surcharge of 450 basis
points.
28.2
Bonds
On July 9, 2010, a corporate bond with a total volume of EUR 280 million was issued. The bond is
discounted at 9.75 % p.a.; the interests are due payable semi-annually on January 15 and July 15. The first interest
payment was due on January 15, 2011.
The corporate bond falls due on July 15, 2017. The Company may prematurely repay the bond either in full
or in installments before July 15, 2014 by paying a premium and the interests that have been accrued but not yet
paid by the exercise date.
Before July 15, 2013, 35 % of the corporate bond may be repaid by paying a redemption price of 109.75 %
plus the interests accrued but not yet paid by the redemption date. On or after July 15, 2014, the corporate bond may
be repaid either in full or in part at the following redemption prices:
F-193
Redemption
price
104.875 %
102.438 %
100.000 %
Year
2014
2015
2016 and after
28.3
The change in the liabilities due to banks is primarily the result of the credit lines of kEUR 100,000 being
repaid in part.
28.4
Notes payable
This item comprises liabilities from notes payable.
28.5
Trade payables
Trade payables are payment obligations related to goods and services acquired in the course of ordinary
business operations. The liabilities are classified as current debt when payment is due within one year or less (or, if
longer, within the normal business cycle). Otherwise, they are presented as non-current debt.
28.6
12/31/2011
kEUR
1,135
12/31/2010
kEUR
3,893
This item comprises current income tax liabilities. For further details regarding current and deferred taxes
see notes 13 and 21.
28.7
Liabilities resulting from accrued government grants
These liabilities primarily relate to investment grants. The grants in the amount of kEUR 0 (prev. year:
kEUR 340) at the balance sheet date are subject to conditions that may result in the requirement to repay part of the
grants in the event the conditions are not met.
28.8
Accruals
12/31/2011
kEUR
Accrued interests
Personnel-related accruals (vacation, etc.)
Accruals for ABS
Other financial accruals (outstanding invoices, etc.)
Personnel-related accruals (insurance against occupational accidents, social security,
etc.)
Total accruals
F-194
12/31/2010
kEUR
13,405
11,881
1,446
3,527
30,259
13,863
12,051
0
3,744
29,658
971
1,087
39
1,010
31,269
120
1,207
30,865
29
The other liabilities include in particular liabilities from finance lease agreements. If the Company bears the
material risks and rewards from the lease, the leased assets are recognized at the acquisition date and measured
either at the fair value or the lower present value of the future minimum lease payments. The leased assets
recognized with regard to the finance lease agreements primarily relate to buildings, other plant, factory and office
equipment, as well as plant and machinery. The agreements cover periods of 3 - 12 years.
The agreements contain extension or purchase options. All leases are based on fixed installments. No
secured by way of retention of title by the lessor in the leased assets. The present value of the Group’s lease
obligations basically corresponds to their carrying amount.
Minimum lease
payments
12/31/2011 12/31/2010
kEUR
kEUR
thereof due within one year
thereof due within more than one year
and 5 years
Present value of
12/31/2011
kEUR
12/31/2010
kEUR
14,838
2,423
14,108
1,545
4,610
6,633
26,081
5,013
21,068
18,514
12,676
33,613
11,434
22,179
2,299
4,661
21,068
N/A
15,470
5,164
22,179
N/A
The net values of the asset recognized as assets from finance leases total kEUR 9,917 at the balance sheet
date (prev. year: kEUR 13,285) and break down as follows.
Net value by categories of assets
12/31/2011
kEUR
37
8,816
240
824
9,917
Software
Buildings
Plant and machinery
12/31/2010
kEUR
0
9,260
2,849
1,176
13,285
In December 2000, NORDENIA USA Inc., Jackson, entered into a sale and lease back agreement with
Cape Girardeau, Missouri. Under this agreement, the company sold buildings and office and plant equipment worth
approx. USD 17 million in 2001 and 2000 and has leased those assets from the municipality since that date.
According to the agreement, the company is thus granted a property tax benefit. The municipality paid to the
company a 9.5 % industrial revenue bond as a consideration. The industrial revenue bond has a term elapsing on
December 1, 2012. The lease is classified as a finance lease. The respective liability in the amount of
USD 17 million (kEUR 13,146 on December 31, 2011 and kEUR 12,705 on December 31, 2010) is included in
“Other current liabilities” (cf. note 28). The liability is to be repaid in one amount by offsetting against the industrial
revenue bond. The leased assets may be acquired at the end of the term in accordance with the agreement at USD
10.
30
12/31/2011
kEUR
14,307
Pension provisions
F-195
12/31/2010
kEUR
14,007
Pension provisions are recorded for obligations from commitments and current benefits to entitled active
and former employee of the NORDENIA Group and their survivors as per IAS 19 “Employee Benefits”.
Interest rate
Dynamic benefits
Dynamic pensions
Germany
12/31/2011 12/31/2010
%
%
4.80
5.20
4.10
4.10
2.50
2.50
1.75
1.75
Other countries
12/31/2011 12/31/2010
%
%
6.25
6.90
n/a
n/a
3.75
4.82
1.25
n/a
Dynamic benefits take into account anticipated future increases in salaries that - among others - are
estimated based on the inflation and the economic situation on an annual basis. The actuarial present value of the
pension obligation using the projected unit credit method is decreased in case of an externally financed pension plan
by the fair value of the valued assets of the external pension plan.
The mortalities are based on published statistics and experience in each individual country. The
assumptions in Germany are based on the Heubeck mortality tables 2005 G.
If the assets exceed the obligations from the pension commitments, usually an asset is recognized in
accordance with IAS 19 “Employee Benefits”. IAS 19.58 prescribes that in case the assets exceed the liabilities an
asset may only be recognized, if NORDENIA as the committed employer had the right to distribute this excess or is
entitled to future reductions of contributions.
Actuarial gains or losses may result from increases or decreases of either the present value of the defined
benefit obligation or the fair value of the plan assets; the reasons for such gains and losses may – among others – be
changes in calculation parameters, estimates of the risks relating to the pension obligations and deviations between
the actual and the anticipated revenues from the plan assets.
F-196
Germany
(mid)
2011 2010 2010
kEUR kEUR kEUR
Balance as at January 1
(or June 29)
thereof from business units
held for sale
Adjusted balance as at
January 1
Interest expense
Actuarial gains (-) / losses
Benefits paid
Balance as at December 31
(or June 28 of the previous
year)
Fair value of the
DBO
Plan deficit
Other countries
(mid)
2011
2010
2010
kEUR kEUR kEUR
20,621 20,860 17,943
-1,385
19,236
324
975
993
0
-853
375
371
298
-9
2011
kEUR
20,996
Total
(mid)
2010
kEUR
2010
kEUR
21,231 18,241
-1,394
302
1,037
2,268
0
-929
366
9
16
0
1
-3
8
8
6
-13
-5
14
15
6
53
-11
19,602
333
991
993
1
-856
20,675 20,621 20,621
389
375
375
21,064
20,996 20,996
20,675 20,621 20,621
-6,757 -6,989 -6,989
13,918 13,632 13,632
389
0
389
375
0
375
375
0
375
21,064
-6,757
14,307
20,996 20,996
-6,989 -6,989
14,007 14,007
165
514
-458
0
-460
173
522
-452
-13
-465
316
1,052
2,274
53
-940
2011
kEUR
Total
(mid)
12/31/2010
kEUR
2010
kEUR
Plan assets on January 1
or June 29
thereof from business units held for sale
Adjusted balance as at January 1
6,989
-960
6,029
249
213
1,119
-853
6,919
6,420
142
-175
563
-460
276
86
1,137
-930
Plan assets as at the balance sheet date
6,757
6,989
6,989
The plan assets mainly comprise other assets such as life insurances. They were assigned by NORDENIA
F-197
Current service
cost
Interest expense
Expected
earnings on plan
assets
Cost of sales
and other
expenses
Financial result
Financial result
Germany
Other countries
Total
(mid)
12/31/ 12/31/ 12/31/
2011 2010
2010
kEUR kEUR kEUR
(mid)
12/31/ 12/31/ 12/31/
2011
2010
2010
kEUR kEUR kEUR
(mid)
12/31/ 12/31/ 12/31/
2011
2010
2010
kEUR kEUR kEUR
324
975
165
514
302
1,037
9
16
8
8
14
15
332
991
173
522
316
1,052
-249
1,050
-142
537
-277
1,062
0
25
-6
10
-12
17
-249
1,075
-148
547
-289
1,079
Actuarial gains or losses are recorded outside profit and loss in the other earnings/losses in the statement of
comprehensive income (OCI); thus, the pension provisions always equal the actuarial present value of the obligation
("Defined Benefit Obligation") (cf. note 2.19). In total, not accounting for deferred taxes, actuarial gains in the
amount of kEUR 1,041 (prev. year: losses in the amount of kEUR 405, accumulated previous year: losses of kEUR
2,869) were recorded outside profit or loss in other comprehensive income in the statement of comprehensive
income at the end of the reporting period. KEUR 269 of this amount are attributed to Nordenia Deutschland
Emsdetten GmbH.
The actual gains from the plan assets of external insurances totaled kEUR 462 (prev. year: kEUR -33;
accumulated previous year: kEUR 361). The expected total yield is derived from the weighted average of the “Other
assets“ contained in the plan assets. The forecasts are based on past experience, economic data and interest forecasts.
The Group expects to pay contributions in the amount of kEUR 385 into defined benefits plan in the
coming financial year.
obligations exceeding the assets, as well as experience-based adjustments.
in kEUR
each as at Dec. 31 or Jun. 28, respectively
Plan assets
Plan deficit
2011
21,064
-6,757
14,307
2010
20,996
-6,989
14,007
6/28/
2010
21,231
-6,919
14,312
2009
18,241
-6,420
11,821
2008
18,465
-6,098
12,367
2007
18,330
-5,768
12,562
2011
2010
6/28/
2010
2009
2008
2007
Adjustments in %
pension obligations
assets
-0.06
0.63
1.00
-0.54
1.71
2.40
-2.78
2.52
-4.12
0.29
0.6
4.07
The employer's portion of the statutory pension insurance is included in the personnel expenses, social
security (cf. note 15).
F-198
31
31.1
Value according to balance sheet as per IAS 39
Value according to balance sheet as per IAS 39
Fair
Fair
Value
Fair
Value
Fair
Measurement Carrying
Carrying
Value
Value
not
not
Fair value
Fair value
category as
amount Amortized
amount Amortized
affecting affecting
affecting affecting
cost
cost
cost
cost
per IAS 39 12/31/2011
result
result IAS 17 12/31/2011 12/31/2010
result
result IAS 17 12/31/2010
kEUR
kEUR
kEUR
kEUR kEUR
kEUR kEUR
kEUR
kEUR
kEUR
kEUR kEUR
kEUR kEUR
kEUR
ASSETS
Non-current
Financial assets
Loans and receivables .....................
Available for sale ............................
Other original financial assets
Loans and receivables .....................
Held for trading ...............................
Current
Cash and cash equivalents...............
Trade receivables ............................
Receivables due from affiliated
companies (non-consolidated) ....
Other assets .....................................
Financial assets—held for trading .
Other original financial assets
Available for sale ............................
Non-current
Subordinated liabilities ...................
Liabilities to banks ..........................
Trade payables ...............................
Other liabilities
interest bearing ...........................
non-interest bearing ....................
From finance leases *) ................
Others .........................................
Current
Liabilities to financial institutions ...
Trade payables ................................
Notes payable ..................................
LaR
AfS
17,325
1,480
17,325
17,325
1,480
17,051
1,193
17,051
LaR
FAHfT
67
2,262
67
67
2,262
195
10,494
195
LaR
LaR
27,336
85,275
27,336
85,275
27,336
85,275
35,404
72,332
35,404
72,332
35,404
72,332
LaR
LaR
FAHfT
542
14,609
234
542
14,609
542
14,609
234
855
10,762
33
855
10,762
855
10,762
33
AfS
0
0
0
FLAC
FLAC
FLAC
9,984
282,590
11
9,984
282,590
11
9,984
282,590
11
9,978
281,321
0
9,978
281,321
0
9,978
281,321
0
FLAC
FLAC
FLAC
FLHfT
0
396
6,960
5,660
0
396
0
396
6,960
5,660
12,785
104
7,928
1,767
12,785
104
12,785
104
7,928
1,767
FLAC
FLAC
FLAC
33,239
83,638
732
33,239
83,638
732
33,239
83,638
732
39,609
70,911
3,039
39,609
70,911
3,039
1,480
2,262
234
6,960
5,660
F-199
230
17,051
964
964
195
10,494
10,494
33
0
7,928
1,767
39,609
70,911
3,039
Liabilities due to affiliated
companies (non-consolidated) ....
Other liabilities
interest bearing ...........................
non-interest bearing ....................
From finance leases*) .................
Other ...........................................
FLAC
0
0
0
0
0
0
FLAC
FLAC
FLAC
FLHfT
13,146
43,517
962
332
13,146
43,517
13,146
43,517
962
332
0
46,454
1,545
274
0
46,454
0
46,454
1,545
274
962
295
37
1,545
274
*) The classes in this table are based on IAS 39. Finance leases are usually not within the scope of IAS 39, but in the scope of IFRS 7. Therefore, finance leases are
disclosed separately.
F-200
Thereof broken down by measurement categories as per IAS 39:
Class
as per
IAS 3
9
Carrying
amount
12/31/201
1
kEUR
Loans and
receivables ...
Financial
assets—
available for
sale ...............
Financial
assets—
held for
trading ..........
Financial
liabilities—
at amortized
cost ...............
Financial
liabilities—
held for
trading ..........
Value balance sheet
as per IAS 39
Fair
Fair
Value Value
Amortize
outsid
in
d
e
profit
historical
profit
or
cost
Cost or loss loss
kEU
kEU
R
kEUR
R
kEUR
Carrying
amount
12/31/201
0
kEUR
Value balance sheet
as per IAS 39
Fair
Fair
Value Value
outsid
in
e
profit
Amortize
profit
or
d cost
Cost or loss loss
kEU
kEUR
R
kEUR kEUR
LaR
145,155
145,155
0
0
0
136,599
136,599
0
0
0
AfS
1,480
0
1,480
0
0
1,194
0
230
964
0
FAHf
T
2,496
0
0
0
2,496
10,527
0
0
0
10,52
7
FLAC
467,251
467,251
0
0
0
464,201
464,201
0
0
0
FLHfT
5,992
0
0
295
5,696
2,041
0
0
0
2,041
Thereof broken down by measurement categories as per IFRS 7.27:
Level 1
*)
ASSETS
Financial assets available for sale
12/31/2011
Level 2 Level 3
**)
***)
Total
Level 1
12/31/2010
Level 2 Level 3
Total
AfS
FAHfT
0
0
0
234
0
2,262
0
2,496
0
0
964
10,527
0
0
964
10,527
FLHfT
0
5,992
0
5,992
0
2,041
0
2,041
*)
Level 1: The fair values are determined based on publicly quoted market prices due to the fact that the best
possible unbiased indication in respect to the fair value of a financial asset or a financial liability can be found on
an active market.
**) Level 2: If there is no active market for such financial instrument, an enterprise determines the fair value using
measurement methods such as the most recent transactions between knowledgeable, willing and independent
business partner, the comparison to the current fair value of another, basically identical financial instrument,
option price models, or the discounted cash flow method. The fair value is estimated based on the results of a
measurement method that uses the largest amount of data from the market and the smallest amount of companyrelated data.
***) Level 3: The measurement methods used at this level are also based on parameters that cannot be found on the
market.
Cash and cash equivalents, trade receivables, as well as other receivables are basically due within a short
period of time. Hence, their carrying amounts at the balance sheet date correspond to their fair value.
Cash and cash equivalents, trade receivables, as well as other receivables are basically due within a short
period of time. Hence, their carrying amounts at the balance sheet date correspond to their fair value.
F-201
The fair values of the other non-current receivables that are due within more than one year correspond to
Trade payables, as well as other liabilities usually fall due within a short period of time; the recognized
amounts correspond to the respective fair values.
The fair values of liabilities due to financial institutions, notes payable and other financial liabilities are
determined as the present values of the payments relating to the debt and liabilities, taking into account the
respective applicable interest structure.
The termination options relating to the corporate bond constitute derivative financial instruments as defined
in IAS 39 and shall be recorded at fair value through profit and loss (cf. note 20.2 and note 28.2). Accordingly, the
termination options fall into the "held-for-trading financial instruments" class.
In the previous year, the items were measured using a residual model that was primarily based on market
date ("level 2" in the fair value hierarchy as per IFRS 7.27A). However, in this financial year, there is no sufficiently
active market for the corporate bond issued by NORDENIA so that no reliable option price can be derived by means
of the residual method due to the fact that there is a very low market liquidity. Therefore, the Group has applied a
Hull-White option price model for the computation of the fair value of the termination options since September 30,
2011 (for details see note 31.1). This constitutes a change in estimates as specified in IAS 8.32 (cf. note 2.25.2).
When measuring items using the Hull-White option price model, major input factors are not based on data
not directly observed on the market. The input factors mainly include interest and spread curves, credit ratings and
volatilities.
Due to the change in the measurement method when determining the fair value of the termination options,
they – at the same time – have to be reclassified from level 2 to level 3 of the fair value hierarchy (IFRS 7.27B(c)).
Level 3 developed as follows during the financial year, with the value of the reclassification not changing
until September 30, 2011:
12/31/2010
Reclassification from level 2 to level 3
Recognition through profit and loss
in other financial expenses
in other financial income
12/31/2011
0.00 EUR
14,047,305.53 EUR
12,637,519.53 EUR
852,066.00 EUR
2,261,852.00 EUR
According to IFRS 7.27B(e), a sensitivity analysis is required of input factors not observable on the market
that have a major impact on the measurement model and, at the same time, can be replaced by plausible alternative
assumptions. The following table shows the value of the termination options and their sensitivity when applying
selected sensitivities. By performing sensitivity analyses, the Group determines which effects a change in the
respective risk variable would have on the value of the termination option. Sensitivities to the change in the interest
curve, the volatility and the credit standing spread are observed.
Sensitivity
Parallel shifting of the interest curve
+ 100 basis points
- 100 basis points
Change in volatility
+ 10 %
- 10 %
Change in credit standing spreads
+ 100 basis points
- 100 basis points
883,772.44 EUR
4,024,879.46 EUR
3,764,566.25 EUR
2,004,726.18 EUR
1,097,729.53 EUR
4,421,304.51 EUR
F-202
31.2
Subsequent measurement
Foreign
at fair currency
ImpairFrom
Interest value translation ment loss disposal
kEUR kEUR
kEUR
kEUR
kEUR
(LaR) ..........................
1,427
0
84
-649
0
Held-to-maturity
investments (HtM) ....
0
0
0
0
0
Available for sale
financial assets
0
0
0
0
0
(AfS) .........................
held for trading
(FAHfT and FLHfT) .
0 13,452
0
0
0
measured at
amortized cost
(FLAC) ..................... -30,741
0
273
0
0
Net result
6/2912/31/
2010
kEUR
2011
kEUR
2010
kEUR
862
335
1.338
0
0
0
0
-370
-370
-13,452
-4.757
-4.757
-30,468
-17.970
-22.219
results. Only the impairment losses on trade receivables attributed to the classes “Loans and receivables“ and
currency effects are recorded through profit and loss.
The fair values are disclosed under financial result in the income statement (cf. notes 11 and 12).
32
12/31/2011
kEUR
17,461
For details regarding deferred tax liabilities see note 21 "Deferred tax assets”.
F-203
12/31/2010
kEUR
16,534
33
Expected to be due
Change in
consolidaBalance ted group
> 12 /
Interest
Reclassi- Balance at
>3/
< 24
at
and
1/1/2011 currency Addition effect Utilization Reversal fication 12/31/2011 < 3 mon. < 6 mon. > 6 mon. mon.
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
kEUR
for anniversary bonuses ....................
for expenses relating to archiving
obligations ........................................
for demolition obligations ................
Current provisions
for stock options ...............................
for warranty obligations ...................
for customer bonuses ........................
for compensations and bonuses .......
for impending losses.........................
for taxes ............................................
for fees and charges ..........................
for litigation costs .............................
for complaints/returned goods ..........
for other accrued liabilities ...............
> 24
mon.
kEUR
1,038
-13
243
24
130
0
-22
1,140
0
0
0
209
931
415
28
1,481
-15
0
-28
56
2
301
8
0
32
0
0
130
61
0
61
0
0
-22
403
30
1,573
0
0
0
0
0
0
0
0
0
33
0
242
370
30
1,331
26,141
3,855
3,386
516
571
0
25
33
93
301
34,921
36,402
0
-53
15
-4
18
0
1
-10
2
-71
-102
-130
511
1,021
3,841
351
48
358
106
52
0
1,576
7,864
8,165
0
0
0
0
0
0
0
0
0
0
0
32
0
282
3,437
359
48
0
103
3
30
1,461
5,723
5,853
0
1,635
746
122
464
0
0
20
65
14
3,067
3,128
0
0
0
22
0
0
0
0
0
0
22
0
26,652
2,906
3,059
404
125
358
29
52
0
330
33,915
35,488
0
1,896
1,221
305
48
0
29
0
0
330
3,828
3,828
0
705
1,242
28
0
0
0
52
0
0
2,027
2,027
26,652
305
596
71
78
358
0
0
0
0
28,060
28,060
0
0
0
0
0
0
0
0
0
0
0
242
0
0
0
0
0
0
0
0
0
0
0
1,331
F-204
i)
Stock options
For explanatory comments regarding the stock option program and the corresponding provisions see note
36. The present value of the expected costs and the expected aging can be derived from the above table.
j)
A provision for the obligations for employees‘ anniversaries was recorded in the present value of the
expected costs. The corresponding expenditure was recorded under personnel expenses in the income statement. The
expected aging is shown in the above table.
k) Guaranty obligations
Guaranty obligations are usually incurred in respect of trading transactions. For a certain period of time, the
Group has a legal, contractual or constructive obligation to perform repair work or replace the products sold. These
obligations are accounted for by recording a provision in the respective amount of the expected future obligation.
The expected aging is shown in the above table.
l)
Customer discounts
Discount agreements have been entered into with a number of clients. Provisions in the expected amounts
were recorded for obligations arising from these agreements. The expected aging is shown in the above table.
Other disclosures
34
34.1
Capital risk management
The corporate policies of the NORDENIA Group aim at ensuring the Company's continuation, permanently
generate reasonable yields, and consistently increase the Company’s shareholders’ value. The Group’s goal is to
decrease its net debt.
The net debt in the accounting at the balance sheet dates is as follows:
Net debt
12/31/2011
kEUR
Bond
Interest-bearing loans and liabilities
Lease liabilities
Notes payable
Lease liabilities
Financial assets
12/31/2010
kEUR
+/ in %
278,508
11,804
6,960
270,379
10,426
7,928
3.01
13.21
-12.22
33,239
732
962
39,609
3,039
1,545
-16.08
-75.93
-37.72
27,336
304,868
35,404
297,522
-22.79
2.47
The cash and cash equivalents totaled kEUR 27,336 (prev. year: kEUR 35,404) at the balance sheet date.
In July 2010, the Group successfully placed a bond – due in 2017, nominal value of kEUR 280,000, 9.75 %
coupon – in the market. In addition, a subordinated loan in the amount of kEUR 10,000 was taken up pari passu to
F-205
the bond. A credit line of kEUR 100,000 serves as additional working capital. This credit line has been available for
three years beginning on July 9, 2010 and had been utilized in the amount of kEUR 29,000 (principal credit line)
and kEUR 4,083 (ledger lines) as at December 31, 2011. The advantages of the overall refinancing plan are a
simpler financing structure for the NORDEN1A Group and more financing security through the longer terms of the
new financing commitment. As a result of the refinancing, the NORDENIA Group is less dependent on bank
financing and can more easily adapt to fluctuations in interest rates. The refinancing also serves the purpose of
accessing the capital market and thus enhances the Group’s position on the capital market. At the same time, the
Group sells its receivables without any recourse under an ABS program. The goal is short-term financing on the
money market. The NORDENIA Group may assign receivables in the maximum nominal amount of kEUR 70,000
and kUSD 10,000. As at December 31, 2011, receivables in the total amount of kEUR 49,571 (kEUR 42,403) –
converted to EUR – were sold.
The Group manages its leverage based on generally accepted key ratios.
The net financial liabilities in relation to the adjusted EBITDA increased from 2.8 to 3.0.
As at December 31, 2011, the ratio of the financial liabilities senior to the bond and the adjusted EBITDA
was 0.4. In the previous year, this ratio was 0.5 and thus improved.
The ratio of the adjusted EBITDA and the interest income/expense – the EBITDA Interest Coverage – in
the reporting period was 3.2 (prev. year: 5.7). This value decreased since higher interest liabilities were not incurred
until the issuance of the bond effective July 9, 2010.
In the reporting period, the NORDENIA Group met its contractual financial covenants with significant
headroom.
In the reporting period, the issuer's rating of the NORDENIA Group was confirmed by two independent
rating agencies. The rating agency Moody awarded a B1 (stable) issuer rating, while Standard & Poor's granted a
B+(stable) rating.
34.2
Principles of financial risk management
In respect to its assets, liabilities and intended transactions, NORDENIA Group is in particular subject to
risks from changes in interest rates and exchange rates, as well as changes in prices of raw materials. The goal of the
financial risk management is to minimize those market risks resulting from current operating and finance-oriented
activities. It does so by way of mainly currency-related financing and application of selected derivative financial
instruments (interest and currency derivatives). However, on principle, only risks affecting the Group’s cash flow
are hedged. Derivative financial instruments are only used as collaterals in the economic sense. They are not held for
trading or other investment purposes.
The basic characteristics of the financial policies are determined annually by the directors and presented in
detail in the treasury guidelines. The Group Treasury is responsible for the implementation of the financial policies
and the consistent financial risk management. The use of derivatives is subject to a clear authorization system.
Basically, these treasury transactions are coordinated by the highest-tier parent of the Group. Transaction risks are
hedged locally by subsidiaries; however, they require approval.
The NORDENIA Group uses primarily interest swaps and exchange futures. The use of these derivative
instruments and the realization of a risk minimization strategy serve the purpose of hedging and minimizing interest
rate and exchange rate fluctuations. The hedge transactions are entered into only with financial services providers
that have good credit rating. As a result of the risk-minimizing dispersion of the hedge transactions the address loss
risk is reduced.
34.3
Market price risks
factors affecting the value of a financial instrument. The market price risk is managed via financial hedging.
F-206
34.4
Being an international company and as a result of the corresponding activities, the NORDENIA Group
faces currency-related risks. The risks that the NORDENIA Group faces in respect to changes in exchange rates
result from investments, financing measures and the operating business.
The NORDENIA Group hedges cash flows at group level and at company level. At company level, future
transactions whose occurrence is highly probable are hedged against exchange rate risks. For this purpose, a rolling
plan of individual facts is used.
When the event criteria are met, these hedges are recognized as cash flow hedges as set forth in IAS 39
Financial instruments: Recognition and measurement. The effective portion of the profits or losses from the hedging
instruments are reported directly in equity and reclassified into profit or loss as soon as the hedged cash flows also
affect profit or loss or if the criteria for the hedge accounting are no longer satisfied.
If all variables had remained constant and the EUR had appreciated by 10 % in relation to the market
development compared to the activities denominated in USD, the sales in the reporting period would have decreased
by about kEUR 10,882 (prev. year: kEUR 11,147). Under the same circumstances, the sales denominated in PLN
would have dropped by approx. kEUR 506 (prev. year: kEUR 334) in the reporting period.
Foreign exchange risks resulting from the translation of the assets and liabilities accounts of foreign
operations into the reporting currency of the Group are not hedged.
Receivables and liabilities of the NORDENIA Group are generally hedged for each individual transaction
by way of exchange futures to cover risks from changes in exchange rates. In case of foreign currency cash flows
expected in the future, the plan data is documented and hedge accounting in the cash flow hedges class is aimed at.
Exchange futures are recorded through profit and loss at the balance sheet date (no hedge accounting).
The NORDENIA Group uses a portfolio approach for the hedging of cash accounts and foreign currency
loans. Individual risks are summarized and only the remaining risks are hedged by exchange futures. According to
IAS 39, this transaction shall not be recorded in the hedge accounting; the fair market values are recorded directly
through profit and loss.
34.5
Interest rate risks
Interest rate risks result from the financing of the business operations. The interest rate risk results from the
uncertainty of the future development of the interest level and affects all discountable items and their derivatives, as
well as future cash flows. The risk is identified as the volume of unsecured variable discountable items. Out of the
material financing agreements, the granted bond involves a fixed coupon. As for the variable discountable financing
agreements comprising the subordinated loan that has the same priority level as the bond, the syndicated credit line
and the ABS program, the Group in part uses hedging instruments in order to fix the interests for a longer period of
time. The risks of increasing variable short-term interests are minimized by hedging with interest swaps. At the
balance sheet date, the Group had payer swaps in the nominal amount of kEUR 60,000 at an averaged fixed interest
rate of 3.48 % (prev. year: kEUR 60,000, 3.48 %). The negative fair value disclosed for the interest swaps was
kEUR 5,660 (prev. year: kEUR 1,767) at the balance sheet date. There was no positive market value, neither in the
reporting period nor in the previous period.
In order to present market risks, IFRS 7 requires sensitivity analyses that demonstrate which effects
hypothetical changes of relevant risk variables would have on the earnings and equity. In addition to facing currency
risks, NORDENIA Group is also subject to interest rate risks. The periodic changes are determined by applying the
hypothetical changes of the risk variables to the financial instruments inventories at the balance sheet date. This
approach is based on the assumption that the inventories at the balance sheet date are representative of the entire
financial year.
F-207
If the interest rates at the balance sheet date had been 100 basis points higher/lower and if all other
variables had remained constant, the fair value of the interest swaps would have been kEUR 4,096 higher/kEUR
4,450 lower (prev. year: kEUR 4,231 higher/kEUR 4,637 lower). If the interest rates at the balance sheet date had
been 100 basis points higher/lower and if all other variables had remained constant, the variable portion of the
financing costs would have been kEUR 458 higher (prev. year: kEUR 321).
Repurchase options included in the corporate bond are reported and measured separately.
34.6
At the NORDENIA Group, raw materials price risks mainly occur in the segment of granulates. According
to NORDENIA’s assessment, there was no efficient market for the minimization of the risks at the balance sheet
date. The Group continues to observe the market. Price risks are minimized by way of corresponding agreements
with business partners.
34.7
Credit risk
favorable credit rating of a business partner may result in a decrease in the value of the receivable due from said
business partner. Credit risks are minimized by way of avoiding cluster risks.
NORDENIA faces credit risks in particular from its operating business. In this respect, receivables of the
individual companies are permanently monitored and credit risks are accounted for by recording individual
allowances and grouped individual allowances. The maximum credit risk is reflected in the carrying amounts of the
financial assets disclosed in the balance sheet (incl. derivative financial instruments with positive market value).
34.8
Liquidity risk
Ensuring sufficient liquidity at all times is a core task of NORDENIA's financial management. The term
liquidity risk also includes the question of access to cash equivalents. The refinancing of financial liabilities, as well
as interest rates payable should be taken into account in particular. The financial reporting system provides
information regarding the actual financial status and the expected cash flows of the individual group companies in a
centralized manner. A foresighted liquidity plan assures solvency and ability to pay at any time. This results in a
view of the Group's liquidity development that is up-to-date at all times.
In order to ensure solvency at any time and financial flexibility of the NORDENIA Group reserves of cash
and cash equivalents in the form of agreed-upon credit lines in the reporting period and thus working capital in the
form of agreed-upon credit lines is available.
The liquidity risk also reflects the tradability of financial instruments. The lack of liquidity may result in a
lower recoverability of financial instruments. The liquidity risk is reduced by dispersing financial transactions. Topclass liquid instruments are preferred for hedging purposes.
The table below analyzes the group’s non-derivative financial liabilities and net-settled derivative financial
liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Items that fall due within
12 months correspond to their carrying amounts due to the fact that discounting effects have a minor impact only.
F-208
Cash flows from financial liabilities
and derivative financial liabilities
Subordinated loans ..............................
Bonds ..................................................
Liabilities due to banks .......................
Notes payable ......................................
Trade payables ....................................
Current income tax liabilities ..............
Other financial liabilities .....................
- thereof personnel related ..............
- thereof for finance leases ..............
- thereof sundry other liabilities ......
- thereof accruals.............................
Other non-financial liabilities ..............
- thereof prepayments .....................
- thereof liabilities resulting from
accrued government grants ...........
- thereof for taxes ............................
- thereof for social security .............
- thereof sundry other liabilities ......
- thereof accruals.............................
*)
**)
1 year
12/31/ 12/31/
2011
2010
kEUR kEUR
631
27,300
34,892
744
83,638
1,135
58,685
3,063
14,838
10,525
30,259
3,488
143
1 to 5 years
12/31/ 12/31/
2011
2010
kEUR kEUR
Due within
more than 5 years
12/31/
12/31/
2011
2010
kEUR
kEUR
Total
12/31/ 12/31/
2011
2010
kEUR kEUR
557 11,262 11,671
27,300 109,200 109,200
41,514
1,849
454
3,078
0
0
70,911
11
0
3,893
0
0
49,152
5,006 18,698
3,352
0
0
2,423
4,610 18,514
13,719
58
117
29,658
338
67
4,493
277
333
182
0
0
0
307,300
0
0
0
0
12,293
0
6,633
5,660
0
27
0
0
334,600
0
0
0
0
14,444
0
12,676
1,768
0
58
0
11,893 12,228
443,800 471,100
36,741 41,968
744
3,078
83,649 70,911
1,135
3,893
75,984 82,294
3,063
3,352
26,081 33,613
16,243 15,604
30,597 29,725
3,792
4,884
143
182
4
25
234
296
1,492
2,202
0
0
540
547
0
0
299
330
43
37
210,513 200,898 127,605 140,356
6
0
0
21
319,620
19
0
0
39
349,102
244
340
1,492
2,202
540
547
363
406
657,738 690,356
The fair value as at December 31, 2011 totaled kEUR 282,100 (prev. year: kEUR 310,072).
In general, the Company intends to repay the above financial liabilities within the agreed-upon periods. If
the cash flows develop positively, the Company will be able to repay the liabilities due to banks prematurely.
35
The fair value of the financial instruments is determined by the respective partner in the derivative
transaction based on generally accepted calculation methods.
The determined fair values are reported in the balance sheet under “Other receivables and other liabilities“.
date, the fair values and nominal values are as follows:
F-209
Non-current
Due within
1 to 5 years
more than
5 years
12/31/2 12/31/
12/31/ 12/31/
011
2010
2011 2010
kEUR kEUR
kEUR kEUR
Fair value of derivative instruments
ASSETS
Cash flow hedges
held for trading
Redemption option
Cash flow hedges
held for trading
Interest swaps
ASSETS
Cash flow hedges
held for trading
Redemption option
Cash flow hedges
held for trading
Interest swaps
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Current
1 year
Total
12/31/ 12/31/
2011 2010
kEUR kEUR
12/31/ 12/31/
2011 2010
kEUR kEUR
0
0
0
0
0
2,262 10,494
234
0
33
0
0
295
0
295
0
0
5,660
0
1,767
37
0
274
0
37
5,660
274
1,767
0
0
0
0
0
0
0
0
2,262 10,494
22,495
0
3,066
0
7,000
0
0
0
0
0
60,000 60,000
6,685 26,411
0
0
0
0
234
33
2,262 10,494
22,495 3,066
2,262 10,494
7,000
0
6,685 26,411
60,000 60,000
Held-for-trading derivative financial instruments are classified as current assets or liabilities. The entire fair
value of a derivative hedging instrument is classified as a non-current asset/liability provided that the residual
maturity of the hedging instrument exceeds twelve months; otherwise, the instrument is classified as a current
asset/liability.
(e) Exchange futures
At December 31, 2011, the negative fair market values of outstanding exchange future contracts total
kEUR 332 (prev. year: kEUR 274) and are reported as financial liabilities (cf. note 31.1).
Foreign currency transactions that are hedged by way of a hedge transaction and whose occurrence is
highly probably are expected to be realized at various points in time over the next twelve months. Gains and losses
from future foreign currency contracts as at December 31, 2011 that are recorded in the hedge reserve in equity (cf.
note 27.5) are recorded in the income statement in the period in which the hedged intended transactions will affect
the income statement. This is usually the case within twelve months after the balance sheet date. There is an
exception, namely when and if the gain or loss is included in the originally recorded cost of the acquisition of fixed
assets so that the items are recorded in the income statement over the estimated useful life of the respective asset.
F-210
(f) Interest swaps
At December 31, 2011, the negative fair market values of outstanding interest swaps total kEUR 5,660
(prev. year: kEUR 1,767) and are reported as financial liabilities (cf. note 31.1).
At December 31, 2011, the fixed interest rates range between 3.38 and 3.59 % (prev. year: 3.38 and 3.59
%). The most significant variable interest rates are the EURO Interbank Offered Rate (EURIBOR) and the London
Interbank Offered Rate (LIBOR). No gains or losses from interest swaps have been recorded in equity (other
reserves) as at December 31, 2011.
36
In 2006, the annual general meeting of NORDENIA International AG resolved to introduce a stock option
program for the German and foreign executives of the NORDENIA that was implemented the same year. This stock
option program set forth the option to choose between cash compensation or compensation in equity capital
instruments. In the 2009 financial year and after, the stock option program was disclosed in the consolidated
financial statements based on a share-based remuneration with cash compensation.
By way of resolution by the annual general meeting of NORDENIA International AG dated August 27,
2010, the condition capital for the securitization of the stock option program was revoked with the approval of all
option holders. The directors and the Supervisory Board of NORDENIA International AG passed a resolution on
October 26 or 27, 2010, respectively, on the continuation of the program as a virtual option program and the
corresponding adjustment of the criteria for the participation in the program; all option holders granted their
approval. New stocks can therefore no longer result from the performance of the option program.
The criteria for the participation in the program were primarily based on the merger of NORDENIA
International AG onto NORDENIA International AG (former Nordenia Holdings AG) due to the fact that the stock
option program was transferred to the assuming entity as a result of the merger. As a result of the continuation of the
program as a virtual stock option program that grants the option holders a cash compensation only, it is not
represented in the consolidated financial statements in a different manner due to the fact that the stock option
program had been disclosed based on a share-based remuneration with cash compensation since the 2009 financial
year already.
NORDENIA International AG granted a total of 2,379,094 options to directors, members of the managing
bodies of group companies of NORDENIA International AG, and other executives of NORDENIA International AG
and its group companies. The vesting period of all option rights granted to the option holders has expired in full. The
options have a term expiring on March 17, 2026, i.e. the original term expiring on March 17, 2016 was extended by
10 years as a result of the adjustment of the criteria for the participation in the program. In case of an exit event, full
vesting occurs even if the five-year period has not yet expired. Stock options that have not been exercised or cannot
be exercised by the end of the term on March 17, 2026 shall be forfeited without the holder being entitled to
replacement or compensation. An exit or payment event is the date at which either the majority of the shares in
NORDENIA International AG is sold or in case of an IPO of NORDENIA International AG. In the event the
employment is terminated by NORDENIA International AG for due cause, the option rights are forfeited. In the
event the employment is otherwise terminated, NORDENIA International AG has the right to pay compensation to
the withdrawing option holder in lieu of the options.
Prior to the merger, the options granted the holder the right to receive payment equaling the value of the
option less a virtual purchase price of EUR 4.39 per option in the case of a payment event. The value of the option
equaled the fair value of a stock of NORDENIA International AG. However, the holder was only entitled when and
if the value of the option exceeded the virtual purchase price by at least 10 %, i.e. totaled at least EUR 4.829 per
option (performance target). The option terms set forth that the option program shall be continued with NORDENIA
International AG after the merger with the option holders holding the number of options already being granted and
the value of each option being based on the fair value of a stock of NORDENIA International AG. For any changes
in the value resulting from the merger, the option holders were granted a compensation in accordance with the
option terms by taking into account a voluntary payment of NORDENIA International AG to the option holders in
August 2010 in the amount of EUR 2.51 per option (rounded down) that are credited to their rights arising under the
option program; the virtual purchase price of EUR 4.39 per option ceased to apply as of the effective date of the
F-211
merger. Hence, the Group accounted for the impairment of the option value as a result of the merger taking into
account the measurement on which the conversion ratio of the merger was based. Upon abolition of the virtual
purchase price, the performance target was also adjusted. The previous performance target according to which the
fair value per stock of NORDENIA International AG must at least total EUR 4.829 in case of a payment event was
adjusted in accordance with the conversion ratio set forth in the merger agreement in such manner that the value of
each stock of NORDENIA International AG must at least equal EUR 2.76 at the respective date.
The fair value of the issued options always equals the fair value per stock of NORDENIA International
AG.
The shareholders’ value and thus the fair value of the individual bearer shares of NORDENIA International
AG were determined at the balance sheet date using the DCF method, taking into account most recent findings. The
calculation is based on the multi-year plans of the Group. A base interest rate of 2.75 % (prev. year: 3.25 %), a risk
surcharge for the operating risk of 5.0 % (prev. year: 5.5 %), and a growth rate of 1.5 % (prev. year: 1.5 %) were
used as a basis for the calculation.
Hence, the fair value of the outstanding virtual stock options at the balance sheet date amounts to EUR
11.20 (prev. year: EUR 11.08).
The provision for the stock options totals kEUR 26,652 (prev. year: kEUR 26,141) at the balance sheet
date.
Granted options in units (maximum number: 2,838,000)
Outstanding options as at Jan. 1
Options granted, forfeited, exercised or expired
Outstanding options as at Dec. 31
Exercisable options as at Dec. 31
12/31/2011
Units
2,379,094
0
2,379,094
0
12/31/2010
Units
2,379,094
0
2,379,094
0
The directors of NORDENIA International AG currently hold a total of 1,534,899 options as follows: Mr.
Landwehr 613,959 options, Mr. Picolin 460,470 options, and Mr. Busacker 460,470 options. No options have been
granted to members of the Supervisory Board.
The virtual stock options existing at as at December 31, 2011 fall due within 14 years max (prev. year: 15
years).
37
Disclosures and explanatory comments on the consolidated cash flow statement
37.1
Cash
The cash combines cash and cash equivalents that comprise cash on hand and current bank balances At the
balance sheet date, the cash totaled kEUR 27,336 (prev. year: kEUR 35,404).
The cash includes cash from pro rata consolidated companies in the amount of kEUR 805 (prev. year:
kEUR 915).
37.2
Cash flow from ordinary business operations
The cash flow from current operating activities decreased in by kEUR 8,847 from kEUR 44,360
accumulated in the previous period to kEUR 35,513 in the reporting period. While the EBIT increased by kEUR
11,252, the interest expenses increased as well by kEUR 26,301. The increase in the interest expense is the result of
interest for the corporate bond issued in mid-2010 that was incurred for the first time in 2011.
The outflow resulting from the increase in the working capital totals kEUR 9,458 (prev. year: kEUR
30,070).
F-212
37.3
Compared to the 2010 calendar year, the outflow for investing activities increased by kEUR 8,679 from
kEUR 24,576 to kEUR 33,255. The investments in property, plant and equipment and in intangible assets increased
by kEUR 11,324 from kEUR 26,187 in the 2010 calendar year to kEUR 37,511 in the reporting period. Higher
outflows in these activities were accompanied by higher inflows from the disposal of fixed assets. The Group
generated an amount of kEUR 4,200 from the disposal of developed real property in Emsdetten.
The inflow from the sale of consolidated companies of kEUR 710 in the 2010 calendar year relates to the
sale of the shares in NORDENIA Morocco Casablanca S.A.R.L..
37.4
Cash flow from financing activities
Compared to the 2010 calendar year, the cash flow from financing activities decreased by kEUR 7,641
from kEUR -2,832 to kEUR -10,473 due to increased external funds. The cash flows from financing activities in the
2010 calendar year were primarily affected by the transactions resulting from the new financing structure and reflect
the origin and use of the cash. In the respect, cash inflows from the issuing of the bond (kEUR 272,463) were
primarily used to distribute dividends (kEUR 185,126) and the repayment of old loans. In particular, subordinated
loans in the amount of kEUR 50,000 were repaid. The utilized portion of the credit line of kEUR 100,000 slightly
decreased in the course of the reporting period from kEUR 35,000 to kEUR 33,083 (utilized principal credit line:
kEUR 29,000, utilized ledger lines: kEUR 4,083).
38
Segment reporting
Management based the determination of the business segments on the reports available to the directors.
geographic regions. According to internal controlling, the divisions are divided into Advanced Films & Components
(AFC), Consumer Flexible Packaging (CFP), and Services (for service providers). This classification is based on the
fixed allocation of the individual companies. Both operating divisions operate in the end markets “hygiene”,
“converting”, “food”, “petcare and garden products”, “beauty and healthcare”, “industrial”, “detergents & cleansing
agents”, and “others”.
The companies of the Service division primarily render intercompany services.
The directors analyze the results in the individual business segments, inter alia, based on an adjusted
EBITDA. This basis exclude effects from one-time expenses incurred by the business segments, ABS expenditure,
management fees, expenses related to the stock option program, gains and losses from the sale of fixed assets, as
well as expenditure for severance and compensations, as well as restructuring costs.
The segment reporting is compiled using the same reporting and measurement methods as the consolidated
financial statements. The reconciliation column shows the multi-segment effects resulting from consolidation
activities.
-
Based on the internal reporting, the following key ratios have been defined as control ratios:
Gross margin
Adjusted EBITDA
Adjusted EBITDA in % of the sales
External working capital, incl.
Inventories
Assets relevant to the working capital
Receivables relevant to the working capital
Debt relevant to the working capital
Liabilities relevant to the working capital
F-213
-
Average number of employees.
From one external customer, sales of kEUR 329,340 (prev. year: kEUR 152,815, accumulated kEUR
288,773) were generated. The customer is served by the divisions AFC and CFP.
F-214
Segment reporting broken down by divisions
Tonnage .........................................
t
Total sales of the divisions............. kEUR
Internal sales of the
Divisions ........................................ kEUR
AFC
12/31
2011
2010
170,472 83,763
569,164 261,812
-2,471
2010
169,931
514,351
-2,023
-4,160
CFP
12/31
2011
2010
2010
84,162 40,994 81,234
372,554 174,430 341,955
Services
12/31
2011
2010
2010
0
0
31
12,320 5,854 11,404
-20,558
-8,129 -15,695
-1,528
351,996 166,301 326,260
49,712 24,217 53,570
31,631 18,577 40,187
10,792
9,192
-4,955
-701
-1,066
Group
12/31
2011
2010
244,670 119,877
954,038 442,096
2010
241,320
867,710
-73,255
-34,010
-66,213
880,783
144,423
101,071
408,086
69,281
49,182
801,497
143,951
105,768
11.5 %
3,447
97,624
28,541
69,082
39,776
12.1 %
7,739
41,443
14,322
27,121
16,717
13.2 %
19,207
86,561
28,731
57,830
26,952
Sales...............................................
Gross margin..................................
Adjusted EBITDA .........................
Adjusted EBITDA in % of the
sales ...............................................
Adjustments ...................................
EBITDA ........................................
Depreciation...................................
EBIT ..............................................
Investments (CAPEX) 1) ...............
kEUR
kEUR
kEUR
566,693 259,789
94,968 43,268
75,155 33,466
510,191
88,108
69,692
%
kEUR
kEUR
kEUR
kEUR
kEUR
13.3 % 12.9 %
-1,170
291
76,326 33,175
14,497 7,099
61,829 26,076
19,974 8,225
13.7 %
2,017
67,675
14,252
53,423
13,346
9.0 %
721
30,910
12,902
18,008
18,672
11.2 %
276
18,301
7,715
10,586
7,351
12.3 %
140
40,047
14,454
25,593
11,919
Inventories .....................................
Receivables relevant to working
capital 2) ........................................
Assets relevant to working capital .
Liabilities relevant to working
capital 3) ........................................
Debts relevant to working capital ..
External working capital 4)............
Average number of employees 5) ..
kEUR
52,325 48,723
48,723
52,654
51,377
51,377
721
584
584
-780
0
0
104,920
100,684
100,684
kEUR
kEUR
48,663 41,331
100,988 90,054
41,331
90,054
32,679
85,333
26,683
78,060
26,683
78,060
196
917
111
695
111
695
0
-780
8
8
8
8
81,538
186,458
68,133
168,817
68,133
168,817
kEUR
kEUR
kEUR
kEUR
53,730 42,901
53,730 42,901
47,258 47,153
1,442 1,400
42,901
42,901
47,153
1,396
22,829
22,829
62,504
1,431
20,798
20,798
57,262
1,393
20,798
20,798
57,262
1,377
512
512
405
118
1,849
1,849
-1,154
113
1,849
1,849
-1,154
111
-81
-81
-699
0
-477
-477
485
0
-477
-477
485
0
76,990
76,990
109,468
2,991
65,071
65,071
103,746
2,906
65,071
65,071
103,746
2,884
1)
2)
3)
4)
5)
5,153 10,338
4,555 9,046
-2,318 -4,284
Reconciliation
12/31
2011 2010 2010
-9,964 -4,880 -9,876
0
0
0
48,698 23,157 45,292
48,698 23,157 45,292
-9,448 -2,759 -6,773
-760
-544
173
-45.9 % -45.0 %
3,538 7,172
-8,494 -9,489
1,122
533
-9,616 -10,022
1,130 1,141
-41.4 %
17,622
-21,906
1,039
-22,945
1,687
1.6 % 2.3 % -0.4 %
358
0
-572
-1,118
-544
745
20 -1,025 -1,014
-1,138
481 1,759
0
0
0
in property, plant and equipment, and intangible assets
The receivables relevant to the working capital comprise trade receivables, creditors with debit balances less deferred customer bonuses.
The liabilities relevant to the working capital comprise trade payables, debtors with credit balances, as well as suppliers' bonuses.
The external working capital is a key ratio in the Company’s controlling and therefore all assets and liabilities related thereto are disclosed. The
disclosures correspond to the reporting provided to the directors on a regular basis.
based on full-time employment, including management
F-215
Reconciliation of EBIT to earnings before taxes:
EBIT
Financial expenses
Financial income
EBT
1/1-12/31/
2011
kEUR
69,082
-77,493
31,648
23,237
6/29-12/31/
2010
kEUR
27,121
-21,961
3,204
8,364
1/1-12/31/
2010
kEUR
57,830
-30,908
6,425
33,347
1/1-12/31/
2011
kEUR
97,624
156
511
406
797
-1,359
945
1,978
13
101,071
6/29-12/31/
2010
kEUR
41,443
624
3,883
-47
91
492
2,887
0
-191
49,182
1/1-12/31/
2010
kEUR
86,561
300
14,123
-54
102
311
3,858
0
567
105,768
Reconciliation of EBITDA to adjusted EBITDA:
EBITDA
Management fees
Restructuring costs
Expenses relating to compensations and severance
Gains (-)/losses (+) from the disposal of fixed assets
Exceptional expenses from refinancing and merger
Extraordinary expenditure from capital market projects
Other exceptional expenses
Adjusted EBITDA
The amounts – based on the segment assets reported to the directors – are measured in the same manner as
in this report. Those assets are attributed based on the allocation of the companies to the individual divisions.
Reconciliation of segment assets to assets as per the consolidated balance sheet:
Segment assets relevant to the working capital (excl. ABS)
Financial assets
Other assets
Intangible assets
Deferred tax assets
Assets as per the balance sheet
12/31/2011
kEUR
186,458
217,329
27,336
21,067
24,575
9,395
12,429
500
5,326
504,415
12/31/2010
kEUR
168,817
212,724
35,404
28,739
24,522
10,029
8,486
747
0
489,468
The amounts – based on the segment liabilities reported to the directors – are measured in the same manner
as in this report. Those liabilities are attributed based on the allocation of the companies to the individual divisions.
F-216
Reconciliation of the segment debt to the liabilities as per the consolidated balance sheet:
Segment debt relevant to the working capital
Bond
Accounts due to banks
Provisions for pension obligations
Subordinated loans
Notes payable
Liabilities intended for sale
12/31/2011
kEUR
76,990
280,770
118,728
33,241
17,461
14,307
9,984
1,135
732
2,194
555,542
12/31/2010
kEUR
65,071
280,873
117,986
40,057
16,534
14,007
9,978
3,893
3,039
0
551,438
6/29-12/31/
2010
kEUR
136,000
97,578
62,436
296,014
59,631
42,689
9,752
408,086
1/1-12/31/
2010
kEUR
264,945
194,965
117,272
577,182
121,847
87,256
15,212
801,497
The sales break down by regions as follows:
1/1-12/31/
2011
kEUR
283,455
214,555
141,391
639,401
108,527
106,376
26,479
880,783
Germany
Eastern Europe
Europe
North America *)
Asia/Pacific
*) kEUR 101,537 (prev. year: kEUR 58,936, accumulated kEUR 120,798) of the total sales are generated
in the United States, i.e. within the North America region.
The non-current assets break down by regions as follows:
12/31/2011
kEUR
129,567
13,587
37,488
180,643
36,471
9,326
226,439
36,471
Germany
Eastern Europe
Europe
North America *)
Asia/Pacific
For further details regarding the breakdown of sales by categories see note 3.
F-217
12/31/2010
kEUR
126,550
16,395
35,821
178,766
33,952
10,191
222,909
33,952
39
Note 39 contains the disclosures required under Sec. 315a HGB [German Commercial Code].
The NORDENIA Group is controlled by OCM Luxembourg Nordenia POF Sarl, 26 A, boulevard Royal,
L-2449 Luxembourg (hereinafter referred to as “OCM / Nordenia POF”) that holds a majority interest of more than
50 %. Furthermore, OCM Luxembourg Nordenia OPPS Sarl, 26 A, boulevard Royal, L-2449 Luxembourg
(hereinafter referred to as "OCM / Nordenia OPPS") hold more than 30 % of the shares in a company affiliated with
OCM / Nordenia POF.
Directors of NORDENIA International AG:
Mr. Ralph Landwehr, degree in Engineering (Chairman)
Mr. Andreas Picolin, degree in Industrial Engineering (Deputy Chairman)
Mr. Andreas Busacker, degree in Industrial Engineering (CFO)
Supervisory Board of NORDENIA International AG:
Mr. Hermann Dambach, merchant (Chairman)
Mr. Uwe E. Flach, management consultant (Deputy Chairman)
Mr. Gerard J. Kerins, investor
Mr. Jordon L. Kruse, investment manager
Mr. Ewald Unterste-Wilms, merchant (employee representative)
Mr. Manfred Kasper, technical clerk work preparation (employee representative)
as well as other key management personnel.
In addition to the consolidated subsidiaries, NORDENIA International AG is directly or indirectly via its
operating activities related to the following affiliated non-consolidated companies:
Company
Status
OOO NORDENIA Samara, Samara/Russia
Nordenia (China) Film Technology Co., Ltd., Taicang/China
Affiliated – not significant
Affiliated – not significant
39.1
Business relations with companies not consolidated in full and associated companies
12/31/2011
kEUR
542
0
12/31/2010
kEUR
855
0
Impairment losses were recorded in the amount of kEUR 893 (prev. year: kEUR 893) on receivables due
from OOO NORDENIA Samara, Samara/Russia in the total amount of kEUR 1,364 (prev. year: kEUR 1,573).
39.2
OCM Luxembourg POF III S.a.r.l., a company affiliated with the two shareholders of NORDENIA
International AG, namely OCM Luxembourg Nordenia POF Sarl and OCM Luxembourg Nordenia OPPS Sarl,
renders services to NORDENIA International AG under a management consulting services agreement. The scope of
those services is up to kEUR 300 p.a. During the reporting period, no expenditure was incurred under this service
agreement.
F-218
39.3
Supervisory Board's emoluments
The total remuneration of the Supervisory Board of NORDENIA International AG in the reporting period
for their services to the parent and the subsidiaries totaled kEUR 90 (prev. year: kEUR 0).
For the period until the registration of the merger on May 26, 2011, the Supervisory Board of former
NORDENIA International AG received a total remuneration of kEUR 133. KEUR 119 of the total remuneration
paid to the Supervisory Board of former NORDENIA International AG (prev. year: kEUR 150, accumulated kEUR
300) relate to remuneration paid to one member of the Supervisory Board that also covers consulting services that
the member rendered to the directors.
A total of kEUR 223 (prev. year: kEUR 150, accumulated kEUR 300) was recorded in the income
statement of the reporting period.
No advance payments or loans were granted to the members of the Supervisory Board in the last two years.
Neither did these members of the Supervisory Board receive any remuneration or benefits for personal services such
Emoluments for the directors of NORDENIA International AG
1/1-12/31/
2011
kEUR
2,133
6/29-12/31/
2010
kEUR
1,265
1/1-12/31/
2010
kEUR
2,247
Post-employment benefits: A provision in the amount of kEUR 4,181 (prev. year: kEUR 3,505) was
recorded in the consolidated financial statements for pension commitments to directors. Provisions were recorded in
the consolidated financial statements in the amount of kEUR 10,951 (prev. year: kEUR 10,684) for current pensions
and pension commitments to former directors and their survivors. The total remuneration of former directors and
their survivors totals kEUR 766 (prev. year: kEUR 387, accumulated kEUR 781). The directors received payments
in the amount of kEUR 0 (prev. year: kEUR 3,859) under the stock option program. The provision for stock options
related to the directors totals kEUR 17190 (prev. year: kEUR 16,865).
No advance payments or loans were granted to directors during the 2011 financial year.
39.4
Exemption under Sec. 264 para. 3 HGB and Sec. 264b HGB
Due to the fact that the separate financial statements are consolidated in the consolidated financial
statements as set forth in Sec. 264 para. 3 HGB and Sec. 264b HGB, the following fully consolidated companies are
released from their obligation to have their financial statements audited, from the obligation to publicly disclose
their financial statements, and from the obligation to compile notes and, if any, a management's report.
Name
NORDENIA Deutschland Gronau GmbH
NORDENIA Deutschland Osterburken GmbH
NORDENIA Deutschland Halle GmbH
NORDENIA International Development GmbH
NORDENIA Technologies GmbH
NORDENIA Deutschland Emsdetten GmbH
EMPAC Beteiligungs GmbH
Registered office
Gronau/Westf.
Osterburken
Halle/Westf.
Greven
Greven
Gronau/Westf.
Emsdetten
Emsdetten
The complete shareholdings of the Group, the consolidated financial statements and the Group
Management's Report, as well as the Supervisory Board's Report are filed with the electronic Bundesanzeiger
[German Federal Gazette] for record.
F-219
39.5
Group of consolidated companies and shareholdings
As at December 31, 2011, NORDENIA International AG directly or indirectly controlled the following
companies:
Equity
Name of the company
Registered office
interest
Companies included in consolidation
NORDENIA Deutschland Lohne GmbH
NORDENIA Deutschland Emsdetten GmbH
Dalian DANOR Printing Packaging Company
EMPAC Beteiligungs GmbH
NORDENIA Polska Starogard GD. Sp. z o.o.
NORDENIA Deutschland Gronau GmbH
NORDENIA Deutschland Osterburken GmbH
NORDENIA IT Services GmbH
NORDENIA Deutschland Halle GmbH
NORDENIA Technologies GmbH
NORDENIA International Development GmbH
ZAO NORDENIA Slavnika
Nordenia International Beteiligungs GmbH
NORDENIA U.S.A., Inc.
NORDENIA Iberica Barcelona S.A.
NORDENIA Hungary Kft.
NORDENIA Polska Poznan Sp. z o.o.
NORDENIA (Malaysia) Sdn. Bhd.
Nordenia-Thong Fook (Australia) Pty. Ltd.
1)
1)
2)
1)
3)
1)
4)
4)
1)
1)
1)
1)
5)
1)
6)
1)
1)
7)
1)
8)
Greven
Steinfeld
Emsdetten
Dalian/China
Emsdetten
Swarozyn/Poland
Gronau/Westf.
Osterburken
Barleben
Halle/Westf.
Gronau/Westf.
Greven
Pereslavl/Russia
Greven
Greven
Jackson/U.S.A.
Polinya/Spain
Szada/Hungary
Dopiewo/Poland
Ipoh/ Malaysia
Australia
90.00 %
100.00 %
50.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
97.84 %
100.00 %
100.00 %
100.00 %
100.00 %
9)
9)
Taicang/China
Samara/Russia
100.00 %
100.00 %
OOO NORDENIA Samara
1)
2)
Direct investment of NORDENIA International AG
Investment of NORDENIA Deutschland Emsdetten GmbH, pursuant to IAS 31
Joint venture consolidated on a pro rata basis
3)
4)
5)
6)
7)
Investment of EMPAC Beteiligungs GmbH
Investment of NORDENIA Deutschland Gronau GmbH
General partner (GmbH [German limited liability company]) of NORDENIA International AG
Investment of NORDENIA International Beteiligungs GmbH & Co. KG
97.5 % investment of NORDENIA Hungary Kft. and 2.5 % investment of NORDENIA International AG
8)
Investment of NORDENIA-Thong Fook (Malaysia) Sdn. Bhd., subgroup with NORDENIA
Thong-Fook (Malaysia) Sdn. Bhd.
9)
No consolidation due to the minor significance to the Group
F-220
39.6
Disclosures regarding the company consolidated on a pro rata basis
The Group holds a 50 % investment in the joint venture Dalian DANOR Printing Packaging Company,
Dalian/China. The following figures reflect the 50 % share of the Group in the assets and liabilities, the sales and
earnings/losses of the joint venture. The figures are also included in the consolidated balance sheet and the
consolidated income statement:
12/31/2011
12/31/2010
kEUR
kEUR
Assets
Non-current assets
1,860
2,878
Current assets
2,801
3,414
4,661
6,292
Liabilities
Non-current debt
12
1
Current debt
622
961
634
962
Net assets
4,027
5,330
12/31/2011
kEUR
3,919
5,664
1,745
Income
Expenses
Share in the obligation of the joint ventures
12/31/2010
kEUR
2,411
2,704
-293
There are no contingent liabilities that are attributable to the Group; neither does the joint venture itself
have any contingent liabilities.
39.7
Employees
The companies of the NORDENIA Group (joint venture accounted for on a pro rata basis) had the
following numbers of employees:
Per capita
Production
Administration
Sales
Managing Director
1/1-12/31/2011
2,542
260
207
53
19
3,081
6/2912/31/2010
2,444
251
201
50
19
2,965
1/1-12/31/2010
2,422
248
195
51
19
2,935
The number of employees in the company consolidated on a pro rata basis is as follows (50 %):
Production
Administration
Sales
1/1-12/31/2011
59
11
5
75
6/2912/31/2010
62
10
5
77
1/1-12/31/2010
62
10
5
77
For corporate controlling purposes and the purpose of subsequent analyses of the income statement, as well
as the explanatory comments and the segment reporting, the average number of employees extrapolated to the
number of fulltime employees is disclosed:
F-221
Full-time employees
Production
Administration
Sales
Managing Director
1/1-12/31/2011
2,517
239
200
52
19
3,027
40
40.1
Contingencies
Notes payable
40.2
6/2912/31/2010
2,418
231
187
50
20
2,906
1/1-12/31/2010
2,400
228
185
51
20
2,884
12/31/2011
kEUR
319
12/31/2010
kEUR
405
Litigation
Neither NORDENIA International AG nor any of its group companies are involved in any pending or
foreseeable legal or arbitration proceedings that could have or have had a material impact on the economic situation
in the last two years. Provisions in the appropriate amount were recorded by the respective companies for any
financial obligations from legal or arbitration proceedings. No provisions were recorded, if the Group does not
expect the court and arbitration proceedings to result in any financial obligations (cf. note 40.4).
40.3
thereof due within 1 year
thereof due between 1 - 5 years
Total
12/31/2011
kEUR
15,776
12/31/2010
kEUR
12,275
21,790
3,603
10,206
7,981
37,566
10,525
2,266
5,854
2,405
22,800
The minimum leases relate to leased buildings, plant and machinery, as well as plant, factory and office
equipment, with some of the existing agreements containing extension clauses. In addition, a production site (land
and buildings) was refinanced by way of a sale and leaseback transaction. The expenses from operate leases that
were recognized through profit and loss total kEUR 3,795 (prev. year: kEUR 1,658, accumulated kEUR 3,359) at
the balance sheet date.
40.4
The Group incurred contingent liabilities from litigation related to its operating activities.
The Group does not expect that major liabilities for which no provisions have been recorded will actually
be occurred.
Taxes and incidental costs relating to the taxes in the total amount of kEUR 10,121 were assessed and are
due payable by NORDENIA International AG for 2006 and 2008; this amount was not disclosed in the provisions or
the Company's liabilities. The Company filed an appeal against the tax assessment notes. The tax authorities and the
municipalities and towns that are authorized to impose the taxes have granted a suspension of enforcement in
F-222
respect to those amounts. The Company expects that the currently pending appeal proceedings and suits will be
decided in its favor.
40.5
Auditor's fees and services
The fees recorded as expenses for the auditor of the consolidated financial statements in the financial year
ended December 31, 2011 that shall be disclosed pursuant to Sec. 315a para. 1 HGB in context with Sec. 314 para. 1
No. 9 HGB break down as follows:
6/29-12/317
2010
kEUR
2011
kEUR
Auditing services
Other consulting services
Tax consulting services
Other services
41
226
534
0
226
986
2010
kEUR
199
0
0
0
199
402
0
0
0
402
Subsequent events
As of March 12, 2012 no events or developments occurred which would have led to a material change in
the presentation or valuation of individual assets or liabilities as disclosed at December 31, 2011.
Signed in Greven on this 12th day of March 2012
The Directors
Ralph Landwehr
Andreas Picolin
F-223
Andreas Busacker

NORDENIA HOLDINGS GmbH

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