There was a time when Mondi was the poster child of capital discipline in Europe’s packaging industry. It was the kind of company investors could set their watches by: high-teens to low-twenties returns on capital employed, dependable cash flow, and a portfolio that balanced the grind of commodity paper with the promise of value-added packaging. In the years before the pandemic, Mondi’s mills were humming, its balance sheet was strong, and its investors were rewarded with one of the best capital efficiency profiles in the sector.
Fast-forward to 2025 and the picture has changed dramatically. Mondi’s 2024 annual report and consensus estimates show return on capital employed collapsing from nearly 24 % in 2022 to 9.6 % in 2024 and just 8.4 % for the six months to 30 June 2025. Margins have contracted, free cash flow has dried up, and the share price languishes at multi-year lows. This isn’t a routine cyclical dip. It’s the consequence of a company whose over-zealous ESG ambitions and geopolitical setbacks have eroded the very engine of value creation.
