roadbook - sappicdn-s3.sappi.com/s3fs-public/slices/downloads/roadbook... · 2017. 9. 7. · market...
TRANSCRIPT
August 2017
Sappi Limited
Roadbook delivering on
strategy
2017
Vision 2020
intentional
evolution
next phase
growth
1
2
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 indicate future earnings, savings, synergies, events, trends, plans or objectives. The words “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “assume”, “positioned”, “will”, “may”, “should”, “risk” and other similar expressions, which are predictions of or indicate future events and future trends and which do not relate to historical matters, identify forward-looking statements. In addition, this document includes forward-look ing statements relating
to our potential exposure to various types of market risks, such as interest rate risk, foreign exchange rate risk and commodity price risk. You should not rely on forward-look ing statements because they involve known and unknown risks, uncertainties and other factors which are in some cases beyond our control and may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-look ing statements (and from past results, performance or achievements). Certain factors that may cause such differences include but are not limited to:
• the highly cyclical nature of the pulp and paper industry (and the factors that contribute to such cyclicality, such as levels of demand, production capacity, production, input costs including raw material, energy and employee costs, and pricing);
• the impact on our business of adverse changes in global economic conditions;
• unanticipated production disruptions (including as a result of planned or unexpected power outages);
• changes in environmental, tax and other laws and regulations;
• adverse changes in the markets for our products;
• the emergence of new technologies and changes in consumer trends including increased preferences for digital media;
• consequences of our leverage, including as a result of adverse changes in credit markets that affect our ability to raise capital when needed;
• adverse changes in the political situation and economy in the countries in which we operate or the effect of governmental efforts to address present or future
economic or social problems;
• the impact of restructurings, investments, acquisitions, dispositions and other strategic initiatives (including related financing), any delays, unexpected costs or
other problems experienced in connection with dispositions or with integrating acquisitions or implementing restructurings or other strategic initiatives, and
achieving expected savings and synergies;
• currency fluctuations.
We undertake no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information or future events or circumstances
or otherwise.
Forward-looking statements and Regulation G
Regulation G disclosure Certain non-GAAP financial information is contained in this presentation that management believe may be useful in comparing the company’s operating results from period to period. Reconciliation's of certain of the non-
GAAP measures to the corresponding GAAP measures can be found in the quarterly results booklet for the relevant period. These booklets are located in the ‘Investors | Financial information’ section of w ww.sappi.com.
3
Agenda
Overview o Sales & Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
4
Sales analysis
* Data reflects FYTD 2017
48%
26%
26%
Sales by source* (US$)
Europe North America
Southern Africa Asia and other 41%
23%
10%
26%
Sales by destination* (US$)
56%
21%
11%
6%
5%
1%
Coated paper
Dissolving wood pulp
Speciality paper
Commodity paper
Uncoated paper
Other
Sales by product*
5
Sales analysis
* Data reflects results from Q3 FY17 ** RISI (August 2017)
56%
21%
11%
6% 5%
1%
Sales by product* (US$)
Coated paper Dissolving wood pulp
Speciality paper Commodity paper
Uncoated paper Other
Q3 FY2017
Coated paper
#2 Global producer of coated paper
EBITDA margins ~7%
Forecast** demand down 1-2%pa
Forecast** capacity down 1-2%pa
Sales analysis
* Data reflects results from Q3 FY17 ** Hawkins Wright (March 2017)
56%
21%
11%
6% 5%
1%
Sales by product* (US$)
Coated paper Dissolving wood pulp
Speciality paper Commodity paper
Uncoated paper Other
Q1 FY2017
Commodity paper EBITDA margins ~17% Demand up 3%
Speciality paper EBITDA margins ~12% Demand up 4%
Dissolving wood pulp #1 Global producer Demand forecast** up 6%pa EBITDA margins ~35% Capacity forecast** up 4%pa
7
Major Sensitivities
∆ EU NA SA Translation Group
€m US$m ZARm US$m US$m
Net Selling Price 1% 23 14 182 - 53
DWP Price US$10 - 2 136 - 12
Sales Volumes 1% 8 6 83 - 21
Variable Cost 1% 13 7 88 - 28
Fixed Cost 1% 6 4 44 - 14
Paper Pulp Price US$10 7 1 8 - 9
ZAR/US$ (weaker) 10c - - 77 -3 3
EUR/US$ (weaker) 10c - -4 - -23 -27
8
Global coated woodfree demand
* Source: RISI Aug 2017
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
North America Europe Far East Latin America Africa/ME Oceania
Forecast*
9
Dissolving wood pulp (DWP)
o DWP is the most abundant natural organic polymer on earth and is found in all plant materials
o The plant material (wood from certified forests or plantations) is processed and purified by
applying specialised chemistry to extract the cellulose polymers from the wood
o The purified natural wood cellulose fibres are further dissolved by our customers and regenerated
or reformed for a host of applications
Cellulose 45%
Hemi-cellulose 30%
Lignin 23%
Resins 1%
Inorganics 1%
10
Dissolving wood pulp End-uses
Dissolving wood pulp market
11
Viscose-grade DWP is used almost exclusively in textile applications
Source: Hawkins Wright; Fibre Year 2017; RISI ‘Dissolving Pulp Monitor’ (Jan 2017) and ‘Outlook for the Global Dissolving Pulp Market’.
Other Europe Americas China
0.2
5.3
0.6
0.6
1.7
3.7
1.9
7.8
Market size 2016 Mtpa
CAGR 2010-16 %
Viscose
Cellulose ethers and MCC
Cellulose acetate tow
Nitro-cellulose and other
Products (examples)
6.6 ~6-7 Total
Rayon Grade
High-alpha/ Speciality
DWP grade Demand geography
Applications (examples)
• Textiles (viscose)
• Non-wovens
• Cellophane
• Sausage skins
• Construction
• Food additives
• Medicine fillers
• Cosmetics
• Cigarette filters
• Paints and coatings
• Films
• Plastics
• Explosives
• Inks
• Lacquers
• Nail polish
12
Competition Top 10 producers by grade, 2017
Source: Hawkins Wright, March 2017
13
Why dissolving wood pulp? Capitalising on MEGA-TRENDS
o Global population growth from a current 6.9bn to
8.3bn by 2030
o Increasing need for food and clothes
o Increasing need for more comfortable clothing
o Rising urbanisation and standard of living in the
greater Asian region Asian middle class population is likely to grow from
current 1.9bn to 2.7bn people by 2030
Asian consumers are likely to spend US$32 trillion/year by 2030, accounting for 43% of total global consumption
39%
70%
94%
112%
26%
49%
70%
85%
0% 11%
20% 27% 32%
-5% -10% -14% -18%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
2010 2020 2030 2040 2050
Textile fibres Food Population Arable land
65.8
72.5
86.8
100.7
113.3
123.5
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
2005 2010 2015 2020 2025 2030
Textile fibres consumption Metric tons (millions)
14
There is still significant headroom to increase the level of cellulosic
fibre blending in most sub-categories
Source: Expert interviews.
POLYESTER
Future Today Gap Today Future Gap Today Future Gap
COTTON CELLULOSIC
Apparel
Home textile
Towels 5% 5% 0% 80% 75% -6% 15% 20% +33%
Bedding 45% 55% +22% 45% 40% -11% 1% 2% +100%
Denim 5% 5% 0 95% 95% 0% 0% 0% 0%
Shirts 35% 40% +14% 50% 40% -20% 15% 20% +33%
T-shirts 30% 50% +67% 70% 50% -29% 3% 5% 0%
Dresses 10% 10% 0% 35% 25% -29% 55% 65% +18%
Suits 35% 40% +14% 25% 20% -20% ~1% ~2% +100%
Sportswear 85% 85% 0% 0% 0% 0% 15% 15% 0%
Casual wear 45% 50% +11% 45% 35% -22% 10% 15% +50%
15
Cellulose gap theory Dissolving wood pulp share of the textiles market is expected to grow further
o Production of cotton is forecast to remain
stagnant or shrink
o Growth in total fibre consumption will be
covered by man-made fibres
o However, certain moisture management
properties of cellulose fibres cannot be
substituted by oil-based synthetic fibres,
enhancing opportunity for cellulosics
Fibre properties and applications
16
Cellulosic fibre properties are superior to cotton and polyester for many
textile applications
Source: IHS Global, RISI, Hawkins Wright.
Key strength Qualifies Issue
Apparel Home textiles Nonwovens/Technical textiles
Overall value proposition
Applications
Function and
feel
Appearance
Sustainability
17 62
21
66
27
7
52
20
28
Cellulosic fibres Cotton Polyester
• On a pure
property basis,
cellulosic fibres
are superior to
cotton and
differentiated
on
sustainability.
• Polyester is
differentiated
on strength/
durability
versus cotton
and cellulosic
fibres.
• Natural and attractive,
‘greener’ alternative to cotton
• Natural, functional and
well established
• Cheap, durable and
versatile
Durability
Absorbency
Breathability
Softness
Drape
Dyeability
Brightness/Lustre
Renewable and biodegradeable
Resource efficiency
17
Textile fibre prices
* Source: CCF group.
800
1,200
1,600
2,000
2,400
2,800
Cotton 328 Cotton "A" Index PSF 1.4 D VSF 1.2 D VSF 1.5 D
18
Agenda
Overview o Sales & Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
19
Strategic focus
Accelerate growth in adjacent
businesses from a strong
base Grow through
moderate investments
Rationalise declining
businesses
Achieve cost
advantages
Generate cash to
strengthen balance sheet
Achieve
cost
advantages
Improve
operational
and machine
efficiencies
Maximise
global
procurement
benefits
Optimise
business
processes
Our group strategy
20
We work to lower fixed and variable costs,
increase cost efficiencies and invest for cost
advantages.
US$50m investment in Saiccor Mill woodyard.
Group procurement initiatives >US$100m annually
by 2020 – US$63m by end-2017.
Ongoing continuous improvement across all mills.
US$25m investment in Somerset Mill woodyard.
Achieve cost advantages
Rationalise
declining
businesses
Continuously
balance paper supply
and demand
in all regions
Where
possible convert paper
machines to
higher margin
businesses
Our group strategy
21
Recognising the decreasing demand for
graphic paper, we manage our capacity to
strengthen our leadership position in these
markets, realising their strategic importance to
the group and maximising their significant cash
flow generation.
Progressive transition of Lanaken Mill out of LWC.
Reduced CWF exposure at Maastricht Mill, Ehingen
Mill and Somerset Mill PM1.
Rationalise declining businesses
Grow
through
moderate
investments
Extract
value from our
biorefinery
stream
Enhance
specialised
cellulose
product
portfolio
Expand
paper
packaging
grades
Our group strategy
22
We will make investments in existing areas
with strong potential growth, including pulp,
speciality grades and packaging papers. Debottlenecking of Saiccor and Ngodwana DWP.
Investments in Somerset, Maastricht, Alfeld and
Ehingen Mills.
Rockwell acquisition.
Additional packaging at Ngodwana and Tugela Mills.
Electricity opportunities in Southern Africa.
Securing additional HW timber supply.
Grow through moderate investments
Global market size – Speciality packaging
23
Markets and growth rates
o C1S papers
o 1.2 million tons
o Growth: 2-3%pa
Flexible packaging
and label papers Release liner
o CCK graphic arts
o 300,000 tons
o Growth: 6%pa
Rigid packaging
o SBS printing and
converting
o 4.7 million tons
o Growth: 2%pa
Containerboard
o Coated white
Topliner
o 1 million tons
o Growth: 1-2%pa
Functional papers
o Barrier and grease
resistant papers
o Virtually unlimited
Source for growth rates: AWA, Pira and RISI.
Paperboard market
Containerboard Boxboard
Corrugated Board Linerboard incl.
WTL Folding Boxboard Solid Unbleached
Board
White Lined
Chipboard
Solid Bleached
Sulfate
FBB
SUB in Europe,
SUS in NA
WLC in Europe,
Coated Recycled
Board (CRB) in
NA
SBB in Europe,
SBS in NA
24
Mill summary – Sappi Europe
25
Alfeld Mill: heavy and light weight packaging, silicone base papers and barrier papers
Maastricht Mill: heavy weight packaging, barrier boards and board weight graphics (=>300 gsm)
Ehingen Mill: coated woodfree and white top liner
Specialities
Graphics
Today
Alfeld Ehingen Gratkorn Kirkniemi Lanaken PM7 Lanaken PM8 Maastricht Stockstadt
HW packaging
LW packaging
HW graphics
MW graphics
LW graphics
UCWF
Mechanical
By 2020
Alfeld Ehingen Gratkorn Kirkniemi Lanaken PM7 Lanaken PM8 Maastricht Stockstadt
HW packaging
LW packaging
HW graphics
MW graphics
LW graphics
UCWF
Mechanical
Global production sites
26
Sappi packaging and speciality papers
Alfeld Mill (Germany)
Flexible packaging, label, SBB board, topliner and release liner
Ehingen Mill (Germany)
Topliner – Fusion®
Somerset Mill (USA)
Label paper – LusterCote® and Flexpack paper – LusterPrint®
Tugela Mill (South Africa)
Liner – UltraTest® and Fluting – UltraFlute®
Maastricht Mill (The Netherlands)
Folding boxboard – atelier™
Cloquet Mill (USA)
Label paper – LusterCote®
Westbrook Mill (USA)
Casting and release paper – Ultracast® & different classic brands
Ngodwana Mill (South Africa)
Liner – KraftPride®
Generate
cash to
strengthen
balance
sheet
Optimise
working
capital
Sell
non-core
assets
Restructure
debt
Our group strategy
27
US$400m 2017 bonds called in April.
US$21m in net finance cost savings/annum.
Refinancing and debt reduction leads to lower
finance cost - US$60-70m/annum going
forward - and EPS growth.
Generate cash to strengthen the balance sheet
Accelerate
growth in
adjacent
businesses from
a strong base
Accelerate
growth in
adjacent
businesses from
a strong base
Accelerate growth in adjacent businesses from a strong base
Our group strategy
28
We will continue our focus on having a
cleaner, stronger balance sheet so that we can
then accelerate our growth in adjacent
businesses.
Speciality packaging paper.
Biomaterials, biochemicals – lignins, sugars.
Expanded DWP portfolio – nanocellulose, other
speciality grades.
29
Agenda
Overview o Sales & Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
30
Highlights – five year review
31
Highlights – five year review
32
Net debt/EBITDA development
* EBITDA is excluding special items. ** The covenant Net debt/LTM EBITDA calculation has adjustments and therefore differs from that shown above.
2,3
80
2,2
48
2,2
86
1,9
46
2,0
40
1,9
16
1,9
17
1,7
71
1,7
34
1,6
52
1583
1408
1338
1329
1318
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17
US
$ m
illio
n
Net debt Net debt/LTM EBITDA**
1.7
4.6
Maturity profile Fiscal years
446
67 24 24 30 30
521
406
27
221
309
38
88
0
100
200
300
400
500
600
2017 2018 2019 2020 2021 2022 2023 2024 2032
US
$ m
illio
n
Cash Short-term SPH term debt Securitisation SSA
EUR450m bond EUR350m bond
US$221m bond
Capex development
34
0
100
200
300
400
500
600
2013 2014 2015 2016 2017E 2018E 2019E
US
$ m
illio
n
Maintenance Efficiency and expansion
Cash flow
35
US$m Q3 FY17 Q3 FY16 FYTD 17 FYTD 16
Cash generated from operations 139 144 544 502
Movement in working capital (7) 56 (130) (66)
Net finance costs paid (20) (29) (61) (87)
Taxation paid 4 (32) (62) (54)
Dividend paid - - (59) -
Cash generated from operating activities 116 139 232 295
Cash utilised in investing activities (86) (57) (165) (104)
Capital expenditure (78) (59) (160) (144)
Net proceeds on disposal of assets - 1 3 39
Other movements (8) 1 (8) 1
Net cash generated (utilised) 30 82 67 191
Excluding special items reconciliation to reported operating profit
36
EBITDA and operating profit
* Refer to page 21 in our Q3 FY17 results booklet (available on www.sappi.com) for a definition of special items.
US$m Q3 FY17 Q3 FY16 FYTD 17 FYTD16
EBITDA excluding special items* 155 160 564 530
Depreciation and amortisation (62) (63) (190) (188)
Operating profit excluding special items* 93 97 374 342
Special items* - gains (losses) (3) (1) 1 32
Plantation price fair value adjustment 2 12 14 40
Net restructuring provisions (1) - (1) (4)
Profit on disposal of asset held for sale and other assets
- - - 16
BEE charge - - (1) (1)
Fire, flood, storm and other events (4) (13) (11) (19)
Segment operating profit 90 96 375 374
37
Agenda
Overview o Sales & Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
Sappi Europe
38
Divisional overview
Coated woodfree paper 2,000
Uncoated woodfree paper 245
Coated mechanical paper 1,015
Speciality paper 245
Sappi Europe saleable capacity (‘000tpa) European CWF and CM capacity shares*
Sappi
UPM
Lecta
Stora Enso
Burgo
Others*
0%
20%
40%
60%
80%
100%
CWF
UPM
Sappi
Burgo
Leipa
Others*
0%
20%
40%
60%
80%
100%
CM
* 22 producers * Nine producers
*Source: RISI
Margins declined due to higher year-on-year raw material prices; all major categories, except
wood, were higher.
Graphic paper volumes were up 4% led by exports; within Europe, CWF demand rose through
the quarter – paper price increases coming through.
Speciality paper volumes rose 17% year-on-year – outpacing average market growth.
39
Sappi Europe
40
50
60
70
80
90
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17
‘00
0 to
ns
Speciality packaging volumes
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
Q3 FY14 Q3 FY15 Q3 FY16 Q3 FY17
US
$ m
illio
n
EBITDA* EBITDA Margin*
* EBITDA and EBITDA margin shown exclude special items. Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 21 in our Q3 FY17 financial results booklet (available on www.sappi.com) for a definition of special items.
Alfeld Mill Speciality conversion (December 2013)
Gratkorn and Kirkniemi Mills Pulp mill and paper machine upgrades, power plant rebuild
Nanocellulose pilot plant (The Netherlands) Trial runs
Maastricht, Ehingen, Alfeld and Lanaken Mills Projects Expanding our speciality packaging offering, increasing asset flexibility to adapt to market
dynamics
Sappi Europe
40
Projects
41
Agenda
Overview o Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
Sappi North America
42
Divisional overview
Coated freesheet paper 1,120
Dissolving wood pulp 330
Speciality paper 40
NBHK 30
Verso 49%
Sappi 31%
Appleton 8%
West Linn 7%
Catalyst 5%
US Coated freesheet capacity shares* Sappi North America saleable capacity (‘000tpa)
*Source: RISI
Sappi North America
43
Projects
Cloquet Mill
Dissolving wood pulp conversion (2013), lime kiln rebuild
Westbrook Mill
Coater modernisation
Somerset Mill
Natural gas conversion
Woodyard and chip processing investment
PM1 Conversion to speciality packaging
Similar performance to last year.
DWP prices and volumes were higher while variable and delivery costs were lower.
Coated paper prices were down 6% from last year – price increases announced for 01 July.
Packaging paper volumes were up over 20% led by C1S products.
44
Sappi North America
* EBITDA and EBITDA margin shown exclude special items. Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 21 in our Q3 FY17 financial results booklet (available on www.sappi.com) for a definition of special items. ** Source: RISI
0%
1%
2%
3%
4%
5%
6%
7%
0
5
10
15
20
25
Q3 FY14 Q3 FY15 Q3 FY16 Q3 FY17
US
$ m
illio
n
EBITDA* EBITDA Margin*
800
820
840
860
880
900
920No 3 Coated freesheet - 60 lb (90g) rolls US$/ton - US East**
45
Agenda
Overview o Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
Sappi South Africa
46
Divisional overview
Forestry 1,046
Dissolving wood pulp
1,010
Paper and paper packaging
675
Sappi Southern Africa saleable capacity (‘000tpa)
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Global dissolving wood pulp demand (‘000k Metric tons)*
Forecast
* Source: Hawkins Wright, March 2017
Sappi South Africa
47
Projects
Ngodwana Mill Dissolving wood pulp (DWP) conversion
Sale of Cape Kraft and Enstra Mills’ recycled packaging
business
Debottleneck Tugela, Saiccor and Ngodwana pulp mills ~ 10% increase in volumes in both packaging and dissolving wood pulp
Increase access to more HW timber supply
Results reflect effect of stronger Rand/Dollar exchange rate and higher maintenance costs due
to annual shut at Ngodwana Mill.
Realised US$ prices for DWP were higher, and DWP volumes were better despite logistics
problems at the Durban port.
Paper business had solid growth from containerboard and fluting demand.
48
Sappi Southern Africa
* EBITDA and EBITDA margin shown exclude special items. Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 21 in our Q3 FY17 financial results booklet (available on www.sappi.com) for a definition of special items. ** Source: CCF
0%
5%
10%
15%
20%
25%
30%
35%
0
20
40
60
80
100
120
Q3 FY14 Q3 FY15 Q3 FY16 Q3 FY17
US
$ m
illio
n
EBITDA* EBITDA Margin*
775
800
825
850
875
900
925
950
975
1000Market price – Hardwood DWP (US$/ton)**
49
Agenda
Overview o Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
50
Sustainability – PPP + IIRC
International Integrated Reporting Council’s ‘6 Capitals Model’
1. Financial
2. Manufactured
3. Intellectual
4. Human
5. Social
6. Natural
51
Sustainability
#1 – Financial capital
We manage our financial capital, including shareholder equity,
debt and reinvested capital to maintain a solid balance between
growth, profitability and liquidity.
#2 – Manufactured Capital
Investing in building, maintaining, operating, and improving this
infrastructure requires significant financial capital, together with
human and intellectual capital.
#3 – Intellectual Capital
Our technology centres and R&D initiatives promote a culture of
innovation to support the development of commercially and
environmentally sustainable solutions for the company.
Inputs: • Ordinary shareholders interest US$1.3B • 15 manufacturing sites worldwide • Technology centres in each region • R&D spend = US$26m
Outputs: • Share price up 78% • 6.1mt of production • Nanocellulose pilot plant • Sugar extraction pilot plant • Anaerobic digestion pilot plant
52
Sustainability
#4 – Human capital
By creating a safe and healthy workplace for our people in which
diversity is encouraged and valued, and providing them with
ongoing development opportunities, we enhance productivity and
our ability to service global markets.
#5 – Social capital
Building relationships with our key stakeholders in a spirit of trust
and mutual respect enhances both our license to trade and our
competitive advantage, thereby enabling more tangible business
value creation.
Inputs: • 12k employees, 750 contractors • Spend an average $529/employee on skills
development and compliance training • Ongoing stakeholder engagement
Outputs: • 0.46 LTIFR • Average training hours per job category: professional
or middle management – 330; semi-skilled – 100; tech or junior management – 52
53
Sustainability
#6 – Natural Capital
Recognising our business depends on natural capital, we focus
on managing and mitigating our impacts.
Inputs: • 2,798MW energy purchased, 1,911 generated • Specific water process extracted 33.9m3/adt • 338kha owned or leased plantations, 100% FSC with
approximately 28.6mt of standing timber • Contracted supply covers a further almost 103kha
Outputs: • 92% of water drawn returned to the environment • 48.8% renewable energy generated, of which 95%
own black liquor • 73% of fibre used is certified • 622,850 tons of waste, of which 331,248 tons sent to
landfill – in specific terms, a decrease of 24.7% in total waste over five years
54
Agenda
Overview o Products
o Strategy
o Results
Divisions o Sappi Europe
o Sappi North America
o Sappi Southern Africa
Sustainability
Conclusions
55
Conclusions
o Through intentional evolution, we are growing Sappi into a profitable and cash-
generative diversified woodfibre group.
o Selective capital spending in adjacent, growing, and more profitable businesses
o Costs remain a chief concern
o Cash-generative paper business will fund growth in:
o Cellulose-based solutions
o Speciality packaging papers
o Complementary products
o Committed to accelerating value for shareholders through:
o Debt reduction
o Improved profit
o Strategic positioning
Thank you
56