Mpact Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/025229/06)
JSE share code: MPT ISIN: ZAE000156501
(“Mpact” or “the Company” or “the Group”)


TRADING STATEMENT

In terms of the JSE Limited Listings Requirements, listed companies are required to publish
a trading statement as soon as they are satisfied that a reasonable degree of certainty exists
that the financial results for the period to be reported on next will differ by 20% or more from
the financial results of the previous corresponding reporting period.

As previously advised, Mpact’s Board decided to sell its Plastics’ Trays & Films business,
Versapak, as a going concern. Versapak currently forms part of the Plastics Division of
Mpact Operations Proprietary Limited. Mpact’s Group results include separate disclosures in
the financial statements for discontinued operations and assets and liabilities held-for-sale.
At the end of 2022, the sale of Versapak was still in progress.

Continuing operations

For the year ended 31 December 2022, Mpact’s revenue increased by approximately 7% to
R12.4 billion (December 2021: R11.5 billion). Excluding revenue relating to the Baywhite
distribution agreement with Mondi that terminated at the end of December 2021, Group
revenue increased by 15% and sales volumes by 6%.

In the Paper business, good demand in containerboard and cartonboard continued in
2H2022 and higher sales volumes were experienced in the Paper converting business.
Selling prices in the Paper business increased in the last quarter to recover higher input
costs.

In the Plastics business, sales volumes were at similar levels to the prior year with the
exception of the FMCG business which was negatively affected by seven days of downtime
at the Pinetown factory attributable to the floods in KwaZulu-Natal, coupled with lower
demand from customers.

Mpact’s underlying earnings before interest and tax (EBIT) are expected to increase by
approximately 23% compared to the prior year (December 2021: R948 million).

Net finance costs are expected to be approximately R184 million (December 2021: R140
million) due to increased average net debt and higher interest rates. Net debt of R2,327
million (December 2021: R1,756 million) increased mainly due to cash outflows in respect of
capital expenditure investments of R1,006 million as well as increased working capital.

The effective tax rate for the year ended 31 December 2022 is expected to approximate the
statutory tax rate of 28%.
Investment for growth and sustainability

Mpact recently announced an investment of R1.2 billion in its Mkhondo Paper Mill to meet
growing virgin containerboard demand for quality, sustainable, fresh produce packaging
driven by robust growth in the South African export fruit sector. This follows the development
of Mpact Plastic Containers’ new Castleview production and Brits recycling facilities, Mpact
Corrugated’s new customer service centre in Limpopo, Mpact Recycling’s new purpose-built
facility in KwaZulu-Natal and the expansion of the Group’s solar photovoltaic (PV) generation
capacity at a further five plants in 2022, bringing the Group’s total solar PV capacity to
10.8MWp.

Collectively these new investments allow us to take advantage of our unique circular
economy business model while positioning Mpact to deliver sustained revenue and margin
enhancing growth. The Group has a strong balance sheet and has sufficient debt facilities to
implement Mpact’s strategy.

Business held-for-sale / discontinued operations

For the year ended 31 December 2022, Versapak reported revenue of R1,107 million (2021:
R920 million), and net earnings of R65 million (December 2021: R2 million), which equates
to basic earnings per share of 44.4 cents (December 2021: 1.5 cents). During 2022, a
decision was taken to exclude Versapak’s trade receivables, cash balances and trade
payables from the assets and liabilities held for sale in order to reduce the complexity of a
transaction. This has resulted in Versapak’s net asset held-for-sale decreasing to R191
million (December 2021: R301 million).

Continuing operations and total operations

Based on the above, Mpact expects earnings per share (EPS), headline earnings per share
(HEPS) and underlying EPS to be in the following ranges:

                                                                   For the year ended 31
                   For the year ended 31 December 2022
                                                                      December 2021
                                                                 Continuing       Total
              Continuing operations      Total
                                                                 operations     operations
                                         operations
                                                                   Cents per share (cps)
 EPS          Between 430 and 475 Between 475 and
              cps, an increase of 525 cps, an increase
                                                                       351.5           353.0
              between 22.3% and of between 34.6%
              35.1%               and 48.7%
 HEPS         Between 410 and 455 Between 455 and
              cps, an increase of 505 cps, an increase
                                                                       343.2           343.5
              between 19.5% and of between 32.5%
              32.6%               and 47.0%
 Underlying   Between 430 and 475 Between 475 and
 EPS          cps, an increase of 525 cps, an increase
                                                                       359.6           361.1
              between 19.6% and of between 31.5%
              32.1%               and 45.4%


Mpact’s audited results for the year ended 31 December 2022 will be released on SENS on
or about 7 March 2023.
Shareholders are advised that the financial information on which this trading statement is
based has not been reviewed and reported on by the Company’s external auditor.



Melrose Arch

20 February 2023



Sponsor

The Standard Bank of South Africa Limited