Ad Hoc News Details

- Group results 2005 as expected below last year’s record level
- Further increase of dividend from EUR 2.40 to EUR 2.60 per share

In 2005, the development of the Mayr-Melnhof Group was marked again by a high degree of stability. This was achieved despite on-going stagnation in consumer demand in the main markets of Western Europe and the accompanying intensification of competition, as well as the massive increase in energy prices and crude oil price driven input factors. Record results in cartonboard processing stood in contrast to a clear downturn in the profit contribution in cartonboard production.

 
In accordance with the Group’s dividend policy, which targets on the distribution of one third of the consolidated annual net income in the long term, the Management Board will propose to the Shareholders’ Meeting a dividend increase from EUR 2.40 (excl. anniversary bonus) for 2004 to EUR 2.60 per share for 2005.

Outlook:

Given an unchanged competitive situation, demand on the European cartonboard and folding cartons markets has been developing quite firmly in the first few weeks of the year. Both MM Karton and MM Packaging have witnessed high utilization of capacities since the beginning of the year. However, this cannot yet be interpreted as an upswing in demand.

In the wake of the heavy burden that the huge rise in energy costs is having on the current financial situation at MM Karton, the increase in cartonboard prices announced last year is now being gradually passed on to the market. Indications of the degree and extent of the cost compensation will be presented with the report on the first quarter of 2006. It is positive to note that the intake of orders has held up well even during the implementation of the price increase for cartonboard. Beyond Europe, cartonboard prices appear to have stabilized.

To ease pressure on quantities, the machine in the Nikopol board mill in Bulgaria was temporarily taken out of production, probably until the middle of 2006.

Passing on cartonboard price increases to the end customer is of the highest priority for cartonboard processing. The emphasis continuously is placed on increases in productivity.

Because of the unwavering trend in demand for recovered paper, from the present point of view we are not anticipating any significant price changes for the time being. Costs of energy and crude oil driven input factors remain unchanged at a high level.

We are pursuing acquisition projects in both cartonboard production and processing. The regional focus will be on Europe and neighboring regions.

In view of uncertain economic developments, it is not possible to give an estimate of the results for 2006 at present.

Today’s press release is available in the Internet at www.mayr-melnhof.com. The Annual Report for the financial year 2005 will be published as of April 6, 2006.