Equity valuation of Mondi Plc

Abstract

The purpose of the present dissertation is to perform a valuation of Mondi, a packaging
company dual listed in London Stock Exchange and Johannesburg Stock Exchange. In order to
do, three valuation approaches were applied: Discounted Cash Flow (DCF), Dividend Discount
Model (DDM) and Relative valuation based on EV/EBITDA multiple. From the first approach,
Mondi’s stock price reaches a value of €25.62. The DDM results in a value of €22.96, that
represents a possible lower bound in the case of occurrence of unexpected events that can affect
the share price. Furthermore, based on EV/EBITDA, Mondi’s stock is priced at €24.32.
Therefore, the target price considered for Mondi is a range between €24.32 and €25.62, that
results in an equity value between €11,755 Million and €12,404 Million, around 9% higher than
the current market capitalization. Ultimately, a comparison with the target price of €24.76 per
share, published by Deutsche Bank on 22nd of February 2017 was done in which both valuations
end up in the same conclusion: Mondi is currently underpriced, so for this reason it is
recommended a buy position on the stock.

Date of Award	19 Oct 2017
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)