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    MMK   AT0000938204

MAYR-MELNHOF KARTON AG

(MMK)
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Mayr Melnhof Karton : Consolidated non-financial Report

04/07/2021 | 02:06am EDT

CONSOLIDATED NON-FINANCIAL REPORT

2020

MAYR-MELNHOF KARTON AG

CONSOLIDATED NON-FINANCIAL REPORT

Consolidated Non-financial Report

THE MM GROUP IN THE CONTEXT OF SUSTAINABILITY

2

Introduction

2

Business model

3

Sustainability strategy

4

Governance

5

Covid-19 pandemic

5

Climate change

7

Context of non-financial topics with business development

8

Stakeholders

11

Material topics

12

SUSTAINABILITY TOPICS

16

Material and product responsibility

16

1.

Renewable raw materials and recyclability

2.

Ecological criteria in procurement

3.

Product safety

Environmental management

25

1.

Energy consumption and emissions in production

2. Transport emissions

3. Water consumption in production

4. Waste in production

Employees

35

1.

Employee education and training

2.

Health and safety of employees

3. Working conditions/environment

Society

43

  1. Compliance with laws, standards and rules of conduct
  2. Anti-corruption,anti-trust compliance

ABOUT THE CONSOLIDATED NON-FINANCIAL REPORT

46

APPENDIX

47

Non-financial indicators at a glance

47

GRI content index

51

Independent limited assurance report

54

MAYR-MELNHOF KARTON AG

1

CONSOLIDATED NON-FINANCIAL REPORT

The MM Group in the context of sustainability

INTRODUCTION

Sustainability has always been a decisive success factor in the orientation and management of the Mayr-Melnhof Group. Since the start of non-financial reporting in 2017, we have been reporting in ever greater depth and more comprehensively on key environmental, employee and social issues. The legal requirements pursuant to section 267 a of the Austrian Commercial Code as well as the usual international standards serve as a basis. The aim is to document key sustainability topics at the MM Group by systematically presenting the relevant management concepts, objectives, measures as well as risks and opportunities. This consolidated non-financial report describes non-financial topics on which the business of the MM Group has a major impact or which are of particular interest for our stakeholders. It also describes the way in which we deal with them. Our aspiration is to continuously optimize and complement our annual reporting, especially by taking into account the findings and requirements identified in our continuous stakeholder dialog. The impact of Covid-19 on non-financial matters is discussed in a separate section.

As a member of the United Nations Global Compact, we are committed to the Sustainable Development Goals (SDGs) of the United Nations. This report on the year 2020 is for the first time based on the GRI (Global Reporting Initiative) standards. By taking this step toward greater transparency and international comparability, we respond to the growing need of our stakeholders (especially investors, employees and the public) for more in-depth information on the Company based on ESG (Environment, Social, Govern- ance) criteria.

Responsible circular economy has long been an intrinsic part of our business activities due to the concentration of our business on cartonboard and paper products, which are mainly produced using renewable raw materials and are fully recycled after use. Therefore, we strive to offer new possibilities for the substitution of plastics and to create attractive future potential in the current packaging discussion through innovative and competitive solutions using cartonboard and paper.

The basis for the sustainable orientation of the MM Group is our strategic positioning as market leader on the basis of cost and innovation leadership as well as the rules laid down in our Code of Conduct, which also include the universal principles of the UN Global Compact in the areas of labor standards, human rights, environmental protection, and anti-corruption. We set our targets and allocate resources based on the Group's sustainable orientation.

MAYR-MELNHOF KARTON AG

2

CONSOLIDATED NON-FINANCIAL REPORT

In this context, the management of sustainability and occupational safety, which had previously been largely decentralized, was established as a Group function in 2020, with the aim of further improving Group-wide performance by harmonizing systems, tools, and standards and creating new competitive advantages for the Group. In addition, the high importance of these areas is also increasingly taken into account by supplementing the basis for the variable remuneration of managers by criteria relating to occupational safety and climate protection (Management Board only).

The fact that the MM Group succeeds in making continuous progress in economic as well as ecological, social and societal terms is due to the high sense of responsibility and performance of the entire MM team, for which we would like to express our special thanks to our employees.

The topics described below were determined in the course of a materiality analysis in the Company. Relevant performance indicators were identified on the basis of the GRI Standards, and the appropriate internal experts were involved. They also provided assistance in taking into account the interests of our stakeholders. The definition and collection of non-financial indicators were analyzed throughout the Group and are intended to be further developed for future reports.

BUSINESS MODEL

The production of cartonboard and folding cartons for consumer goods is the core business of the Mayr-Melnhof Group, which covers almost the entire fiber cycle with the exception of the purely recycled fiber business. The integrated setup of the Group is covered by the divisions MM Karton and

  1. Packaging, which are managed as profit centers and trade among each other at market conditions. Cartonboard is the most important raw material for folding cartons which are mainly used for the pack- aging of consumer staples. About 10,000 employees in the Group produce approximately 1.7 million tons of cartonboard per year and process approximately 847,000 tons of cartonboard and paper. The MM Group generated sales of around EUR 2.5 billion in 2020. Mayr-Melnhof is present in 20 countries with 6 cartonboard mills1 and 44 packaging sites and sells its products to around 100 countries worldwide, with Europe as main market.
  1. Karton is the largest producer of cartonboard in Europe with a leading position in the field of recy- cled fiber-based cartonboard and a growing position in the field of virgin fiber-based cartonboard. The

broad product and service portfolio of the cartonboard division comprises cartonboard grades for a great variety of consumer goods industries, especially in the sectors of fast-moving consumer goods (FMCG) and e-commerce. In line with the product portfolio, around 75 % recycled fibers and 25 % virgin fibers are used as raw materials. The significantly lower virgin fiber share consists mainly of groundwood pulp and a smaller proportion of cellulose. Besides fibers, the most important input factors are coating chemicals for the cartonboard surface and energy which mainly comes from natural gas. As already described in the introduction, unprocessed cartonboard is mainly used in packaging production. All cartonboard products of MM Karton are produced using renewable fibers and are both recyclable and biodegradable.

  • In addition, MM Karton produces virgin fibers at the FollaCell site.

MAYR-MELNHOF KARTON AG

3

CONSOLIDATED NON-FINANCIAL REPORT

Customers of the cartonboard division are mainly folding carton producers, but consumer goods manufacturers also have an influence on the choice of cartonboard.

  1. Packaging is the largest producer of folding cartons in Europe and in several countries outside Europe. Production focuses primarily on manufacturing packaging for everyday consumer goods in the sectors of fast-moving consumer goods (FMCG) and e-commerce as well as in the premium sector. While the first sector serves a wide range of food and non-food applications, the premium business comprises highly specialized packaging markets such as health, beauty & personal care, cigarette, and luxury. Re- cycled and virgin fiber-based cartonboard are used as raw materials in roughly equal proportions, with the majority of cartonboard being purchased from outside the MM Group. In addition to the raw material cartonboard, inks, varnishes and die-cutting tools are important input factors in the production of packaging which is more labor-intensive but more energy-extensive than cartonboard production. MM Packaging's customers include both multinational and local consumer goods producers.

The recycling rate for cartonboard and paper currently totals around 85 % in Europe. Circular economy is an inherent part of the MM Group's business model through the use of paper for recycling in car- tonboard production and the manufacture of recyclable cartonboard packaging.

There were no significant changes in the Group's business model or with regard to the supply chain in the past year.

SUSTAINABILITY STRATEGY AND GOALS

Value added and growth in the core business

The focus of our strategy is the sustainable generation of value added and growth along the supply chain according to the business model described above, focusing on the two core business areas: MM Karton and MM Packaging.

Striving for best practice

To this end, we focus on excellent industrial performance, striving to achieve cost, innovation and technology leadership and to use best practice opportunities in the areas of resource consumption, circular economy, safety and the development of our human resources, diversity, respect for human rights as well as an ongoing fight against corruption and bribery. By implementing a Group-wide sustainability management, we aim at further emphasizing MM's attractiveness as a sustainable company and at responding even better to our customers' expectations in this connection.

MAYR-MELNHOF KARTON AG

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Mayr-Melnhof Karton AG published this content on 07 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 April 2021 06:05:08 UTC.


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Sales 2021 2 729 M 3 319 M 3 319 M
Net income 2021 178 M 216 M 216 M
Net Debt 2021 1 312 M 1 596 M 1 596 M
P/E ratio 2021 19,3x
Yield 2021 1,99%
Capitalization 3 424 M 4 161 M 4 164 M
EV / Sales 2021 1,74x
EV / Sales 2022 1,43x
Nbr of Employees 9 938
Free-Float 43,0%
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Average target price 201,38 €
Last Close Price 171,20 €
Spread / Highest target 23,0%
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NameTitle
Peter Josef Oswald Chairman-Management Board & CEO
Franz J. Hiesinger Chief Financial Officer
Rainer Zellner Chairman-Supervisory Board
Romuald Bertl Member-Supervisory Board
Johannes Goess-Saurau Deputy Chairman-Supervisory Board
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