Slide 1: Q4 FY24 financial results
Steve Binnie Chief Executive Officer, Sappi Limited 07 November 2024 Q4 FY24 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 FY24
Summary FY24 Net debt to Adjusted Adjusted Adjusted EBITDA* EPS* EBITDA* US$684 million 41 US cents Profit for the year: US$33m 2.1x • Performance exceeded our expectations for the year • Strong performance from the pulp segment • Record profitability for the South African region driven by lower woo
Slide 4: Summary Q4 FY24
Summary Q4 FY24 Net debt to Adjusted Adjusted Adjusted EBITDA* EPS* EBITDA* US$226 million 15 US cents Profit for the quarter: US$79m 2.1x • Operating performance substantially better y-o-y • Pulp segment benefitted from strong demand and lower wood costs in South Africa • Packaging and speciality p
Slide 5: Product contribution split
Product contribution split Adjusted EBITDA* Sales volumes** 100% 100% 90% 90% 80% 80% 70% 70% Graphic papers 60% 60% 50% 50% Pulp 40% 40% 30% Packaging and 30% speciality papers 20% 20% 10% 10% 0% 0% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Slide 6: EBITDA reconciliation FY23 to FY24
EBITDA* reconciliation FY23 to FY24 Pulp – (US$10m) Packaging and speciality papers – (US$180m) Sales revenue Graphic papers – (US$211m) 800 700 600 500 US$ million 400 300 200 100 0 731 30 (401) 245 79 (11) 11 684 1 685 FY2023 Adjusted Sales volume Price & mix Variable & Fixed costs Other Currency
Slide 7: EBITDA reconciliation Q4 FY23 to Q4 FY24
EBITDA* reconciliation Q4 FY23 to Q4 FY24 Sales revenue 240 US$ million 160 80 0 168 17 28 (6) 22 1 (4) 226 (31) 195 Q4 FY23 Adjusted Sales volume Price & mix Variable & delivery Fixed costs Other Currency conversion Q4 FY24 Adjusted Plantation price fair Q4 FY24 EBITDA** EBITDA* costs EBITDA* value
Slide 8: Cost inflation developments
Cost inflation developments Major variable input cost/ton impact since Q1 FY22 1.6 • Q-o-q* input costs decreased for wood, 1.4 energy and chemicals, remained flat for 1.2 pulp and increased for delivery 1.0 • Total variable costs -1% q-o-q* 0.8 0.6 0.4 0.2 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY
Slide 9: Net debt/EBITDA development
Net debt/EBITDA* development 2,200 7.0 3.0x 6.0 2,070 2,000 2,056 2,055 1,977 1,957 1,946 5.0 1,917 1,916 2.1x 1,879 1,800 1,793 US$ million 4.0 1,600 3.0 1,530 1,400 1,422 2.0 1,366 1,340 1,200 1,085 1,241 1.0 1,225 1,216 1,163 1,176 1,000 0.0 Q1 FY20*** Q2 FY20*** Q3 FY20*** Q4 FY20*** Q1 FY21***
Slide 10: Debt maturity profile
Debt maturity profile* Fiscal years Liquidity Debt maturity 1,200 2028 includes EUR400m bond 500 492 1,000 400 Includes 2026 EUR240m bond 800 US$ million 2032 US$221m bond 692 300 313 600 293 200 221 400 200 100 317 50 35 20 18 65 20 45 45 35 0 0 Sep-24 2025 2026 2027 2028 2029 2030 2031 2032 Cash U
Slide 11: Cash flow and capex
Cash flow and capex Cash flow Capital expenditure 1,400 600 1,267 1,200 500 1,000 800 761 400 659 643 US$ million 550 US$ million 600 506 472 300 400 362 323 256 210 200 166 200 29 0 100 -200 -257 -400 -306 0 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2025E* Cash generated from operations Fre
Slide 12: Disciplined capital allocation
Disciplined capital allocation Category Strategic priority FY24 achievements High Regulatory & External regulatory & Mandatory license to operate ~US$30 million for sustainability environmental environmental requirements Mandatory to meet ESG goals FY24 free cash flow US$362 million Long-term net de
Slide 13: Segmental Overview
sappi Segmental Overview
Slide 14: Pulp: Summary Q4 FY24 EBITDA margin
Summary Q4 FY24 Sales tons -10% Selling price per ton EBITDA* margin y-o-y +15% y-o-y 30.4% 450 40% 400 35% 30% EBITDA* margin 350 25% Tons (‘000) 300 20% 250 15% 200 10% 150 5% 100 0% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 V
Slide 15: Packaging and speciality papers
Summary Q4 FY24 Packaging and speciality Sales tons +16% y-o-y Selling price per ton -3% y-o-y EBITDA* margin 10.6% papers 450 400 350 24% 20% EBITDA* margin 300 16% Tons (‘000) 250 12% 200 150 8% 100 4% 50 0 0% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 2
Slide 16: Graphic papers: EBITDA margin
Summary Q4 FY24 Sales tons +6% Selling price per ton EBITDA* margin y-o-y -2% y-o-y 10.6% 1000 23% 18% 800 EBITDA* margin 13% Tons (‘000) 600 8% 3% 400 -2% 200 -7% 0 -12% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Volume EB
Slide 17: Regional segments Summary Q4 FY24
Regional segments Summary Q4 FY24 Sappi Europe Sappi North America Sappi Southern Africa Sales tons +4% Sales tons +8% Sales tons** -2% y-o-y y-o-y y-o-y Selling price per ton (EUR) Selling price per ton (US$) Selling price per ton (ZAR) -2% y-o-y +3% y-o-y +4% y-o-y EBITDA* margin EBITDA* margin EB
Slide 18: Regional segments continued
Regional segments continued Summary Q4 FY24 Sappi Europe Sappi North America Sappi Southern Africa 900 500 25% 500 35% 23% 800 30% 700 18% 400 20% 400 25% 600 13% 15% 300 300 20% 500 8% 10% 15% 400 3% 200 200 10% 300 5% -2% 5% 200 100 100 -7% 0% 100 0% 0 -12% 0 -5% 0 -5% Q1 20 Q2 20 Q3 20 Q4 20 Q1 2
Slide 19: 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 20: Sustainability targets FY24 People & Prosperity
Sustainability targets FY24 Specific to Sappi Southern Africa People & Prosperity Safety - LTIFR* best-ever safety performance achieved in all regions - Strong safety focus Gender diversity - Target for women in senior positions achieved in all regions Sustainable procurement - Target exceeded; 84%
Slide 21: Sustainability targets FY24 Planet
Sustainability targets FY24 Planet Specific process water usage* - Target not achieved Energy efficiency - Negative impact of production curtailment Share of renewable energy - Target achieved Specific landfilled solid waste - Target achieved Specific GHG emission - Negative impact of production cur
Slide 22: An engaged workforce
An engaged workforce We achieved global recognition in Q4 FY24 • Sappi ranked 623rd globally in • Sappi ranked 473rd globally in • Sappi ranked 7th globally in Time’s World’s’ Best Companies Forbes World’s Best Employers Forbes World’s Best Companies for Women 22
Slide 23: Outlook
Outlook 23
Slide 24: Outlook
Outlook Demand Demand Costs • Challenging global macroeconomic • Lower paper pulp pricing will benefit conditions continues our paper businesses, particularly in Europe • DP market dynamics are expected to remain favourable • We anticipate that the plantation fair value price adjustment for the firs
Slide 25: Outlook continued
Outlook continued Capital Guidance for Demand Focus expenditure Q1 FY25 • We are sharpening our focus on • Capital expenditure for FY25 is • We anticipate that the Adjusted operational excellence by estimated to be in the region of EBITDA* for the first quarter of proactively managing capacity US$50
Slide 26: Thank you
Thank you: td
Slide 27: Supplementary information
Supplementary information 27
Slide 28: EBITDA and operating profit
EBITDA and operating profit Excluding special items* 450 391 371 400 337 318 350 300 290 300 259 240 226 225 250 US$ million 180 177 168 167 200 161 148 145 139 131 130 120 150 116 112 106 101 98 92 86 85 82 100 65 64 62 52 41 31 50 26 16 0 -5 -50 -52 -100 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2
Slide 29: Packaging and speciality papers Production facilities
Packaging and speciality papers Production facilities Alfeld Mill (Germany) Ehingen Mill (Germany) Rockwell Solutions (Scotland) Flexible packaging, label paper, Containerboard Functional papers and flexible paperboard, silicone base paper, packaging, coated barrier film functional paper Carmignano
Slide 30: Conversion and expansion of Somerset Mill PM2
Conversion and expansion of Somerset Mill PM2 • Conversion and expansion of Somerset Mill PM2 from 235,000 tons per annum CWF to 470,000 tons SBS • Approved by the board on 09 November 2022 • Progressing well • Start-up H2 FY25 • Aligned with Thrive strategy to reduce exposure to declining graphic p
Slide 31: Product portfolio
Product portfolio • Paperboard • Label & self-adhesive • Coated woodfree • Dissolving pulp • Biochemicals • Flexible packaging • Casting & release • Coated mechanical • High-yield pulp • Fibrillated cellulose • Containerboard • Dye sublimation • Newsprint • Kraft pulp • Lignin • Tissue • Office 31
Slide 32: Sappi Europe
Sappi Europe Q4 FY24 Q3 FY24 Q4 FY23 Tons sold (‘000) 488 492 469 - Packaging and speciality papers 118 125 111 - Graphic papers 370 367 358 Sales (EURm) 548 545 537 Price/Ton (EUR) 1,123 1,108 1,145 Cost/Ton* (EUR) 1,094 1,100 1,252 Operating profit excluding special items** (EURm) 14 4 (50) Adjust
Slide 33: 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 34: Sappi North America
Sappi North America Q4 FY24 Q3 FY24 Q4 FY23 Tons sold (‘000) 389 340 360 - Pulp* 113 98 142 - Packaging and speciality papers 130 119 90 - Graphic papers 146 123 128 Sales (US$m) 482 429 431 Price/Ton (US$) 1,239 1,262 1,197 Cost/Ton** (US$) 1,118 1,229 1,094 Operating profit excluding special items
Slide 35: Coated paper Deliveries and prices United States
Coated paper Deliveries and prices United States* 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19 Q1 20 Q1 21 Q1 22 Q1 23 Q1 24 Domestic CWF shipments Domestic CWF purchases RISI price CFS #3 60 lb rolls * US industry pu
Slide 36: Sappi Southern Africa
Sappi Southern Africa Q4 FY24 Q3 FY24 Q4 FY23 Tons sold* (‘000) 423 413 431 - Pulp 261 261 272 - Packaging and speciality papers 127 117 123 - Graphic papers 35 35 36 Sales* (ZARm) 6,929 6,673 6,817 Price/Ton* (ZAR) 16,381 16,157 15,817 Cost/Ton** (ZAR) 14,104 13,189 12,508 Operating profit excludin
Slide 37: Paper pulp Prices
US$/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$) NBSK Europe (EUR) 2-Jan-20 2-Mar-20 2-May-20 2-Jul-20 2-Sep-20 2-Nov-20 2-J
Slide 38: Dissolving pulp Prices
US$/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 Dissolving pulp Prices Jul 2019 Oct 2019 Imp SW DP Jan 2020 Apr 2020 Jul 2020 Oct 2020 Jan 2021 Apr 2021 Imp HW DP Jul 2021
Slide 39: Textile fibre Prices
US$\ton 1,000 1,500 2,000 2,500 3,000 3,500 4,000 0 500 Jan 2018 Source: CCF Group. Apr 2018 Jul 2018 Oct 2018 Jan 2019 Apr 2019 Textile fibre Prices Jul 2019 Cotton 328 Oct 2019 Jan 2020 Apr 2020 Jul 2020 Oct 2020 Cotton "A" Index Jan 2021 Apr 2021 Jul 2021 PSF 1.4 D Oct 2021 Jan 2022 Apr 2022 Jul
Slide 40: Cash flow
Cash flow US$m Q4 FY24 Q3 FY24 Q4 FY23 Cash generated from operations 179 122 126 Movement in working capital 73 44 164 Closure and restructuring costs paid (43) (61) - Finance costs paid (16) (15) (23) Finance income received 6 6 8 Taxation (paid) refund (20) (3) (28) Cash generated from operating
Slide 41: Adjusted EBITDA and operating profit
Adjusted EBITDA and operating profit Earnings reconciliation to reported operating profit US$m Q4 FY24 Q3 FY24 Q4 FY23 Adjusted EBITDA* 226 148 168 Plantation fair value price adjustment (31) 3 - EBITDA excluding special items 195 151 168 Depreciation and amortisation (75) (66) (103) Operating profi
Slide 42: 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 43: 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 2023 Annual 2023 TCFD Report 2023 Group Sustainability Report Integrate
Slide 44: 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 45: Our Thrive sustainability commitments
Our Thrive sustainability commitments Creating positive social impact RESPONSIBLE AFFORDABLE DECENT WOR K 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 45
Slide 46: 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 47: 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 48: 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 49: 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 50: Thank you
Thank you: td