Slide 1: Q1 FY25 financial results
Steve Binnie Chief Executive Officer, Sappi Limited 05 February 2025 Q1 FY25 financial results 1
Slide 2: Forward-looking statements and Regulation G disclosure
Forward-looking statements and Regulation G disclosure Forward-looking statements Certain statements in this release that are neither reported financial results nor other historical information are forward-looking statements, including but not limited to statements that are predictions of or indicat
Slide 3: Summary Q1 FY25
Summary Q1 FY25 Net debt to Adjusted Adjusted Adjusted EBITDA* EPS* EBITDA* 14 US cents US$203 million Profit for the quarter: US$70m 1.9x • Solid performance which was ahead of expectations • Pulp segment delivered another strong performance • Graphic papers and Packaging and speciality papers prof
Slide 4: EBITDA reconciliation Q1 FY24 to Q1 FY25
EBITDA* reconciliation Q1 FY24 to Q1 FY25 Sales revenue 200 160 US$ million 120 80 40 0 130 16 45 4 8 5 (5) 203 (1) 202 Q1 FY24 Adjusted Sales volume Price & mix Variable & delivery Fixed costs Other Currency Q1 FY25 Adjusted Plantation price fair Q1 FY25 EBITDA** EBITDA* costs conversion EBITDA* va
Slide 5: Cost inflation developments
Cost inflation developments Major variable input cost/ton impact since Q1 FY22 1.4 • Q-o-q* input costs increased for wood, energy and chemicals, remained fairly flat 1.2 for delivery and decreased for pulp 1.0 • Total variable costs -4% q-o-q* 0.8 0.6 0.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY22
Slide 6: Net debt/EBITDA development
Net debt/EBITDA* development 6.1x 2,200 7.0 2,000 2,070 6.0 2,056 2,055 1,946 5.0 1,917 1,800 1,793 US$ million 4.0 1,600 1.9x 3.0 1,530 1,400 1,422 2.0 1,406 1,366 1,340 1,085 1,200 1.0 1,241 1,225 1,216 1,163 1,176 1,000 0.0 Q1 FY21*** Q2 FY21*** Q3 FY21*** Q4 FY21*** Q1 FY22*** Q2 FY22*** Q3 FY22
Slide 7: Debt maturity profile
Debt maturity profile* Fiscal years Liquidity Debt maturity 1,000 2028 includes 900 500 EUR400m bond 800 458 400 Includes 2026 700 EUR240m bond In January 2025, we successfully US$ million extended the securitisation 2032 642 600 programme to 2028 US$221m bond 300 500 292 264 400 200 221 300 200 80
Slide 8: Cash flow and capex
Cash flow and capex Cash flow Capital expenditure 1,400 600 1,267 1,200 500 1,000 800 761 400 659 643 US$ million 550 US$ million 600 506 472 300 400 362 256 210 206 200 200 29 38 0 -62 100 -200 -400 -306 0 2021 2022 2023 2024 Dec-24 2021 2022 2023 2024 2025E* Cash generated from operations Free cas
Slide 9: Disciplined capital allocation
Disciplined capital allocation Category Strategic priority FY25 targets High Regulatory & External regulatory and Mandatory license to operate < US$50 million for sustainability environmental environmental requirements Mandatory to meet ESG goals Long-term net debt target ~US$1 billion FY25 focus on
Slide 10: Segmental overview
Segmental overview 10
Slide 11: Pulp
Summary Q1 FY25 Pulp Sales tons +3% y-o-y Selling price per ton +11% y-o-y EBITDA* margin 27.8% 450 40% 400 35% 30% EBITDA* margin 350 25% Tons (‘000) 300 20% 250 15% 200 10% 150 5% 100 0% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Volume EBITDA*
Slide 12: Packaging and speciality papers
Summary Q1 FY25 Packaging and Sales tons +14% Selling price per ton EBITDA* margin speciality papers y-o-y +1% y-o-y 8.0% 450 24% 400 20% EBITDA* margin 350 16% Tons (‘000) 300 12% 250 8% 200 150 4% 100 0% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 2
Slide 13: Graphic papers
Summary Q1 FY25 Graphic Sales tons -3% Selling price per ton EBITDA* margin papers y-o-y +1% y-o-y 12.9% 1000 25% 900 800 20% EBITDA* margin 700 15% Tons (‘000) 600 500 10% 400 300 5% 200 100 0% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Vol
Slide 14: Regional segments Summary Q1 FY25
Regional segments Summary Q1 FY25 Sappi Europe Sappi North America Sappi Southern Africa Sales tons -6% Sales tons +16% Sales tons** +4% y-o-y y-o-y y-o-y Selling price per ton (EUR) Selling price per ton (US$) Selling price per ton (ZAR) +4% y-o-y +1% y-o-y +2% y-o-y EBITDA* margin EBITDA* margin E
Slide 15: Regional segments continued
Regional segments continued Summary Q1 FY25 Sappi Europe Sappi North America Sappi Southern Africa 900 25% 500 25% 500 35% 800 30% 700 20% 400 20% 400 600 25% 15% 300 15% 300 20% 500 400 15% 10% 200 10% 200 300 10% 200 5% 100 5% 100 100 5% 0 0% 0 0% 0 0% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4
Slide 16: Our business strategy
Our business strategy Thrive What this means Strategic objectives Drive operational excellence • Achieve zero fatalities and at least a 10% reduction in LTIFR pa • Maximise production outputs • Strengthen our safety-first culture • Gain cost advantage through a global footprint • Continuously improv
Slide 17: Outlook
Outlook 17
Slide 18: Outlook
Outlook Demand Demand Costs • Challenging global macroeconomic • We anticipate that our paper conditions continue business will continue to benefit • Underlying demand for DP remains from the lower pulp input costs in strong the second quarter • Packaging and speciality papers • Annual shuts at Ngod
Slide 19: Outlook continued
Outlook continued Somerset Capital Guidance for Demand Mill PM2 expenditure Q2 FY25 • The machine will be shut for • Capital expenditure forecast for • After taking into account the approximately 70 days in the FY25 has risen from US$500 million negative impacts of the annual second quarter as we co
Slide 20: Thank you
sappi Thank you
Slide 21: Supplementary information
Supplementary information 21
Slide 22: Adjusted EBITDA and operating profit
Adjusted EBITDA and operating profit* 450 391 400 371 337 350 318 300 290 300 259 US$ million 240 226 225 250 203 180 177 200 168 167 161 148 145 132 130 150 120 116 112 106 101 98 92 86 85 100 65 64 41 50 31 16 0 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY2
Slide 23: Packaging and speciality papers Production facilities
Packaging and speciality papers Production facilities Alfeld Mill (Germany) Ehingen Mill (Germany) Rockwell Solutions (Scotland) Flexible packaging paper, label Containerboard Functional paper, flexible packaging paper, paperboard, silicone base paper, coated barrier film paper, functional paper Car
Slide 24: Conversion and expansion of Somerset Mill PM2
Conversion and expansion of Somerset Mill PM2 • Somerset Mill PM2 conversion and expansion from 235,000 tons per annum CWF to 470,000 tons SBS is proceeding well • Aligned with our Thrive strategy to reduce exposure to declining graphic papers markets and grow packaging and speciality papers • PM2 s
Slide 25: Product portfolio
Product portfolio • Paperboard • Label & self-adhesive • Coated woodfree • Dissolving wood pulp • Biochemicals • Flexible packaging • Casting & release • Coated mechanical • High-yield pulp • Fibrillated cellulose • Containerboard • Dye sublimation • Newsprint • Kraft pulp • Lignin • Tissue • Office
Slide 26: Sappi Europe
Sappi Europe Q1 FY25 Q4 FY24 Q1 FY24 Tons sold (‘000) 465 488 494 - Packaging and speciality papers 107 118 102 - Graphic papers 358 370 392 Sales (EURm) 522 548 534 Price/Ton (EUR) 1,123 1,123 1,081 Cost/Ton* (EUR) 1,095 1,094 1,077 Operating profit excluding special items** (EURm) 13 14 2 Adjusted
Slide 27: Coated paper Deliveries and prices Western Europe
Coated paper Deliveries and prices Western Europe* 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 Q1 23 Q1 24 CWF demand MCR demand CWF 100 gsm sheets LWC 60 gsm offset reels * Western Europe
Slide 28: Sappi North America
Sappi North America Q1 FY25 Q4 FY24 Q1 FY24 Tons sold (‘000) 371 389 320 - Pulp* 104 113 104 - Packaging and speciality papers 131 130 95 - Graphic papers 136 146 121 Sales (US$m) 466 482 398 Price/Ton (US$) 1,256 1,239 1,244 Cost/Ton** (US$) 1,129 1,118 1,172 Operating profit excluding special item
Slide 29: Coated paper Deliveries and prices United States
Coated paper Deliveries and prices United States* 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 Q1 23 Q1 24 Domestic CWF shipments Domestic CWF purchases RISI price CFS #3 60 lb rolls * US industry pu
Slide 30: Sappi Southern Africa
Sappi Southern Africa Q1 FY25 Q4 FY24 Q1 FY24 Tons sold* (‘000) 371 423 357 - Pulp 242 261 231 - Packaging and speciality papers 87 127 88 - Graphic papers 42 35 38 Sales* (ZARm) 6,097 6,929 5,749 Price/Ton* (ZAR) 16,434 16,381 16,104 Cost/Ton** (ZAR) 13,108 14,104 12,955 Operating profit excluding
Slide 31: Paper pulp Prices
US$/ton 1,000 1,200 1,400 1,600 1,800 400 600 800 2-Jan-18 2-Mar-18 2-May-18 2-Jul-18 Source: FOEX, CCF group, RISI. 2-Sep-18 2-Nov-18 2-Jan-19 2-Mar-19 Paper pulp Prices 2-May-19 2-Jul-19 2-Sep-19 2-Nov-19 NBSK Europe (US$) NBSK Europe (EUR) 2-Jan-20 2-Mar-20 2-May-20 2-Jul-20 2-Sep-20 2-Nov-20 2-J
Slide 32: Dissolving pulp Prices
US$/ton 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 600 650 700 750 800 850 900 950 Oct 2017 Source: CCF Group. Jan 2018 Apr 2018 Jul 2018 Oct 2018 Jan 2019 Apr 2019 Jul 2019 Dissolving pulp Prices Oct 2019 Imp SW DP Jan 2020 Apr 2020 Jul 2020 Oct 2020 Jan 2021 Apr 2021 Imp HW DP Jul 2021
Slide 33: Textile fibre Prices
US$\ton 1,000 1,500 2,000 2,500 3,000 3,500 4,000 0 500 Jan 2018 Source: CCF Group. Apr 2018 Jul 2018 Oct 2018 Jan 2019 Apr 2019 Textile fibre Prices Jul 2019 Cotton 328 Oct 2019 Jan 2020 Apr 2020 Jul 2020 Oct 2020 Cotton "A" Index Jan 2021 Apr 2021 Jul 2021 Oct 2021 PSF 1.4 D Jan 2022 Apr 2022 Jul
Slide 34: Cash flow
Cash flow US$m Q1 FY25 Q4 FY24 Q1 FY24 Cash generated from operations 206 179 121 Movement in working capital (130) 73 (43) Closure and restructuring costs paid (2) (43) (43) Finance costs paid (34) (16) (13) Finance income received 5 6 9 Taxation (paid) refund (49) (20) (10) Cash generated from ope
Slide 35: Adjusted EBITDA and operating profit: earnings reconciliation
Adjusted EBITDA and operating profit Earnings reconciliation to reported operating profit US$m Q1 FY25 Q4 FY24 Q1 FY24 Adjusted EBITDA* 203 226 130 Plantation fair value price adjustment (1) (31) 26 EBITDA excluding special items 202 195 156 Depreciation and amortisation (70) (75) (70) Operating pro
Slide 36: Sustainability is at the core of our business and work culture
Who we are Sustainability is at the core of our business and work culture. Every solution we create supports our goal to make everyday products more sustainable. We know that the long-term sustainability of our business will only be ensured by delivering sustained value for our stakeholders. We will
Slide 37: ESG - Continuously rethinking what we do and how we do it
ESG - Continuously rethinking what we do and how we do it Our commitment to sustainable growth Awarded Platinum Level in sustainability performance by independent rating agency EcoVadis Sappi Forests 100% FSC- and PEFC-certified 2024 Annual 2024 TCFD Report 2024 Group Sustainability Report Integrate
Slide 38: Our approved science-based targets
Our approved science-based targets • Reduce Scope 1 and Scope 2 GHG emissions by 41.5% per ton of product by 2030 from a 2019 base year.* • 44% of our suppliers by spend will have science-based targets by 2026. * The target boundary includes biogenic emissions and removals from bioenergy feedstocks.
Slide 39: Our Thrive sustainability commitments
Our Thrive sustainability commitments Creating positive social impact RESPONSIBLE AFFORDABLE DECENT WORK CONSUMPTION NO QUALITY CLEAN WATER AND AND ECONOMIC AND CLIMATE LIFE PARTNERSHIPS POVERTY EDUCATION AND SANITA TION CLEAN ENERGY GROWTH PRODUCTION ACTION ON LAND FOR THE GOALS 39
Slide 40: 2025 Sustainability targets: Sappi Europe
2025 Sustainability targets are aligned with United Nation´s Sustainable Development Goals (SDGs) What we need to achieve in Sappi Europe between 2021–2025*: 11% Pts increase share of renewable and clean energy 5% Improvement in specific total energy (GJ/adt) 10% 80% 5.8% year-on-year improvement De
Slide 41: 2025 Sustainability targets: Sappi North America
2025 Sustainability targets are aligned with United Nation´s Sustainable Development Goals (SDGs) What we need to achieve in Sappi North America between 2021–2025*: Within 5% of 5% Share of renewable and clean Improvement in specific total baseline or energy energy (GJ/adt) higher Baseline = 79.1% 1
Slide 42: 2025 Sustainability targets: Sappi Southern Africa
2025 Sustainability targets are aligned with United Nation´s Sustainable Development Goals (SDGs) What we need to achieve in Sappi Southern Africa between 2021–2025*: 7% Pts increase share of renewable and clean energy 9% Improvement in specific total energy (GJ/adt) 10% 80% 3.1% year-on-year improv
Slide 43: Innovative R&D focus Unlocking the full potential of each tree
Innovative R&D focus Unlocking the full potential of each tree Packaging papers Product packaging Paperboard Chemicals from lignin Speciality papers Binding agent Label papers Dispersion agent Dye sublimation papers Emulsion stabiliser Graphic papers Commercial print and publishing Dissolving pulp T
Slide 44: Thank you
sappi Thank you