Edgar Filing: SAPPI LTD

Page 1

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of February 2007

Commission file number: 1-14872

SAPPI LIMITED

(Translation of registrant’s name into English)

48 Ameshoff Street

Braamfontein

Johannesburg 2001

REPUBLIC OF SOUTH AFRICA

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or
Form 40-F.

Form 20-F

-------

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted

by Regulation S-T Rule 101(b) (1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted

by Regulation S-T Rule 101(b) (7):

Indicate by check mark whether by furnishing the information contained in this Form, the

registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes

-------

If “Yes” is marked, indicated below the file number assigned to the registrant in

connection with Rule 12g3-2(b): 82-

sappi

quarter results ended

December 2006

1st

* for the quarter ended December 2006

** as at 31 December 2006

† Rest of World

Sales by product group *

Sales: where the product is manufactured *

Sales: where the product is sold *

Geographic ownership **

■

Coated fine paper

65%

■

Uncoated fine paper

■

Coated specialities

■

Packaging and newsprint

■

Pulp

14%

■

Other

■

North America

30%

■

Europe

43%

■

Southern Africa

14%

■

Asia and other

13%

■

South African

60%

■

North America

30%

■

Europe and ROW †

10%

■

North America

30%

■

Europe

46%

■

Southern Africa

24%

Sappi is the world’s leading
producer of coated fine paper

●

EPS 13 US cents

●

Demand for coated fine paper firm

●

Coated paper prices do not reflect high operating rates

●

Prices boost Forest Products performance

●

Input cost pressure abates, except in Europe

financial highlights

Quarter

ended

Dec

Sept

Dec

2006

2005

Sales (US$ million)

1,267

1,296 1,175

Operating profit (US$ million)

Operating profit to sales (%)

7.3

3.9

4.2

EBITDA ** (US$ million) *

187

151

146

EBITDA ** to sales (%) *

14.8

11.7

12.4

Operating profit to average net assets (%) *

9.4

5.2

4.8

EPS (US cents)

–

Return on average equity (ROE) (%) *

8.4

11.7

–

Net debt (US$ million) *

2,278

2,113

2,072

Net debt to total capitalisation (%) *

46.7

46.4

42.3

* Refer to Supplemental Information for the definition of the term.

** The EBITDA calculation has been amended. Refer to note 2 additional information in Supplemental Information for the effects

of the change.

summary

The group operating result improved in the quarter compared to the prior quarter and the equivalent

quarter last year. The Forest Products business, supported by strong pulp prices and a slightly weaker

currency, generated most of the operating profit. The Fine Paper business, while profitable, has not yet

achieved acceptable margins and returns.

Demand for coated fine paper globally was firm in the quarter; however, apparent consumption growth in

Europe and North America was lower than in recent periods.

Raw material input costs remain high. There has been some moderation in North America and Southern

Africa but upward pressure continues in Europe.

Coated fine paper prices in Europe have drifted downwards for the last 5 years and despite concerted

reductions in our operating costs, the combination of higher prices for our inputs and lower selling prices

has depressed margins. To counteract this we implemented a price increase on stock orders in Europe in

December and continue to implement increases on all other graphic paper business in January.

Group sales were approximately US$1.3 billion for the quarter, an increase of 7.8% compared to a year

ago as a result of a 3% increase in sales of pulp and paper, improved pricing and currency movement

which resulted in an increase in the European business’ sales when reported in US Dollars.

The operating profit for the quarter increased to US$92 million, largely as a result of the contribution of the

Forest Products business. The plantation fair value price adjustment for the quarter was a pre-tax gain of

US$29 million compared to US$10 million a year ago.

Finance costs for the quarter were US$37 million, which was at the same level as the prior quarter but up

US$10 million year on year as a result of higher interest paid (higher debt and floating rates) and the change

in fair value of financial instruments.

The high effective tax rate is a result of unrelieved tax losses in certain countries; in addition taxation for the

quarter included Secondary Tax on Companies of US$8.5 million which relates to the dividend declared

during the quarter.

The profit after tax for the quarter was US$30 million compared to a break-even in the equivalent quarter

last year. Earnings per share were 13 US cents for the quarter.

comment

sappi limited – first quarter page 2

sappi limited – first quarter page 3

cash flow and debt

Cash generated by operations was US$152 million for the quarter, approximately 25% up on a year ago.

We recorded a US$39 million increase in working capital which was significantly less than the US$80

million increase last year.

Capital expenditure increased to US$138 million for the quarter. We had a number of upfront payments in

respect of the Saiccor expansion in the quarter. We aim to manage capital expenditure over the full year

to avoid a material increase in debt over the year.

Net debt increased by US$165 million to approximately US$2.3 billion during the quarter of which

US$73 million was a result of currency translations. Net debt to total capitalisation increased to 46.7% in

December from 46.4% in September.

operating review for the quarter

Sappi Fine Paper

Quarter

ended

Dec 2006

Dec 2005

Sept 2006

US$ million

change

US$ million

Sales

1,044

943

10.7

1,029

Operating profit (loss)

6.7

(40)

Operating profit (loss) to sales (%)

1.5

1.6

–

(3.9)

EBITDA

(1.1)

EBITDA to sales (%)

9.0

10.1

–

4.2

RONOA pa (%)

2.1

1.9

–

(5.2)

Each of the Fine Paper businesses generated operating profits during the quarter; however, the returns are

still far from acceptable. Our focus is on reducing unit costs and achieving appropriate price increases.

Europe

Quarter

ended

Dec 2006

Dec 2005

change

Sept 2006

US$ million

(US$)

(Euro)

US$ million

Sales

587

520

12.9

4.1

569

Operating profit

(7.1)

(14.4)

(48)

Operating profit to sales (%)

2.2

2.7

–

(8.4)

EBITDA

–

(7.8)

EBITDA to sales (%)

10.4

11.7

–

0.2

RONOA pa (%)

2.8

3.2

–

(10.8)

Our sales volume for the quarter grew approximately 6% year on year. The average price achieved in Euro

terms was only marginally up on the prior quarter despite the December stock price increase as a result

of product and geographic mix. The Euro strengthened 8.5% relative to the equivalent period last year.

The upward pressure on many of our input costs has continued in the quarter. In particular pulpwood costs

have continued to rise sharply as a result of demand for wood for use as subsidised “green” fuel.

Higher prices for purchased pulp had an impact of US$7 million on operating profit for the quarter

compared to the equivalent quarter last year. (This is a regional impact as the group as a whole is a net

seller of pulp.)

North America

Quarter

ended

Dec 2006

Dec 2005

Sept 2006

US$ million

change

US$ million

Sales

374

345

8.4

373

Operating profit

100

Operating profit to sales (%)

0.5

0.3

–

1.9

EBITDA

(9.7)

EBITDA to sales (%)

7.5

9.0

–

9.9

RONOA pa (%)

0.7

0.3

–

2.5

The volume of paper sold increased by approximately 5% for the quarter. In addition we achieved strong

growth in pulp sales compared to a year ago, resulting in an overall increase of 8%.

Market conditions remain very competitive with continued pressure on prices. Average prices achieved

were marginally up compared to a year earlier.

Although input costs remain high, we have achieved reductions in wood, energy and certain other input

costs.

operating review for the quarter (continued)

sappi limited – first quarter page 4

Fine Paper South Africa

Quarter

ended

Dec 2006

Dec 2005

change

Sept 2006

US$ million

(US$)

(Rand)

US$ million

Sales

6.4

20.4

Operating profit

–

Operating profit to sales (%)

1.2

–

1.1

EBITDA

66.7

88.5

EBITDA to sales (%)

6.0

3.8

–

5.7

RONOA pa (%)

2.5

–

2.5

The business had strong demand for its products and sales volumes for the quarter increased 10% year

on year. Average prices achieved in Rand terms have increased over the last year partly due to the weaker

Rand.

Margins remain under pressure as a result of high input costs, particularly purchased pulp.

Forest Products

Quarter

ended

Dec 2006

Dec 2005

change

Sept 2006

US$ million

(US$)

(Rand)

US$ million

Sales

223

232

(3.9)

8.8

267

Operating profit

110.8

138.7

Operating profit to sales (%)

35.0

15.9

–

31.8

EBITDA

79.2

102.9

102

EBITDA to sales (%)

42.6

22.8

–

38.2

RONOA pa (%)

23.4

10.9

–

26.4

Plantation fair value gain (loss)

–

(10)

The forest products business had a strong performance despite the lower sales volume compared to the

equivalent quarter last year. Part of the shortfall in volume is the result of timing of export shipments relative

to the period end and lower sales by the Kraft business. We expect to catch up some volume in the next

quarter. The strong pulp prices and weaker currency contributed to the operating profit. Operating profit

also included US$29 million of plantation fair value price adjustment compared to US$10 million a year ago.

The manufacturing performance of the Kraft business has improved and has considerable scope for further

gains. Usutu Mill continued to perform well during the quarter.

Demand for chemical cellulose remains strong and Saiccor continues to perform well. Good progress has

been made on the expansion at Saiccor Mill; however, there has been pressure on civil construction costs

because of high demand in the South African construction industry.

sappi limited – first quarter page 5

directors

Klaas de Kluis retired as a non-executive director of the group in December 2006 on reaching the

mandatory retirement age.

outlook

The industry continues to record high global operating rates for coated fine paper. The combination of

strong expected consumption growth, capacity closures and limited new capacity additions indicate that

operating rates should remain high.

We have implemented price increases in Europe which are essential to restore margins after 5 years of

declining coated fine paper prices and 2 years of input cost escalations.

Pulp prices continue to be strong.

We expect earnings in the next quarter to improve compared to this quarter (excluding unpredictable fair

value adjustments).

This report is unaudited.

On behalf of the Board

E van As

M R Thompson

Director

1 February 2007

sappi limited

(Registration number 1936/008963/06)

Issuer Code: SAVVI

JSE Code: SAP

ISIN Code: ZAE 000006284

operating review for the quarter (continued)

sappi limited – first quarter page 6

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. Undue reliance should not be

placed on such statements because, by their nature, they are subject to known and unknown risks and

uncertainties and can be affected by other factors, that could cause actual results and company plans and

objectives to differ materially from those expressed or implied in the forward-looking statements (or from

past results). Such risks, uncertainties and factors 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), adverse changes in the markets for the group’s products, consequences of substantial leverage,

changing regulatory requirements, unanticipated production disruptions, economic and political conditions

in international markets, the impact of investments, acquisitions and dispositions (including related

financing), any delays, unexpected costs or other problems experienced with integrating acquisitions and

achieving expected savings and synergies and currency fluctuations. The company undertakes 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.

sappi limited – first quarter page 7

notes

sappi limited – first quarter page 8

financial results (unaudited)

for the quarter ended December 2006

sappi limited – first quarter page 9

group income statement

sappi limited – first quarter page 10

Quarter

ended

Dec 2006

Dec 2005

US$ million

% change

Sales

1,267

1,175

7.8

Cost of sales

1,091

1,042

Gross profit

176

133

32.3

Selling, general and administrative expenses

Other operating (income) expenses

(4)

Operating profit

87.8

Net finance costs

Net paid

Capitalised

(1)

Net foreign exchange gains

(2)

(1)

Change in fair value of financial instruments

(3)

Profit before tax

150.0

Taxation – current

– deferred

Profit for the period

–

Basic earnings per share (US cents)

–

Weighted average number of shares in issue (millions)

227.0

225.9

Diluted earnings per share (US cents)

–

Weighted average number of shares on a fully diluted

basis (millions)

229.9

226.7

Note: Refer to notes to the group results (page 13) for Headline earnings and calculation thereof.

group balance sheet

Dec 2006

Sept 2006

US$ million

ASSETS

Non-current assets

4,323

3,997

Property, plant and equipment

3,319

3,129

Plantations

607

520

Deferred taxation

Other non-current assets

318

274

Current assets

1,556

1,500

Inventories

764

699

Trade and other receivables

560

577

Cash and cash equivalents

232

224

Assets held for sale

Total assets

5,900

5,517

EQUITY AND LIABILITIES

Shareholders’ equity

Ordinary shareholders’ interest

1,467

1,386

Non-current liabilities

2,528

2,465

Interest-bearing borrowings

1,625

1,634

Deferred taxation

387

336

Other non-current liabilities

516

495

Current liabilities

1,905

1,666

Interest-bearing borrowings

818

694

Bank overdraft

Other current liabilities

841

862

Taxation payable

111

101

Shareholders for dividend

–

Total equity and liabilities

5,900

5,517

Number of shares in issue at balance sheet date (millions)

227.7

227.0

sappi limited – first quarter page 11

group cash flow statement

group statement of recognised income and
expense

Quarter

ended

Dec 2006

Dec 2005

US$ million

Operating profit

Depreciation, fellings and other amortisation

112

114

Other non-cash items (including impairment charges)

(52)

(41)

Cash generated by operations

152

122

Movement in working capital

(39)

(80)

Net finance costs

(46)

(45)

Taxation paid

(4)

(7)

Cash retained (utilised) from operating activities

(10)

Cash effects of investing activities

(155)

(74)

Cash utilised before financing activities

(92)

(84)

Cash effects of financing activities

Net movement in cash and cash equivalents

Quarter

ended

Dec 2006

Dec 2005

US$ million

Pension fund asset not recognised

(2)

(1)

Valuation allowance against deferred tax asset on actuarial

losses recognised

(1)

–

Exchange differences on translation of foreign operations

113

(11)

Net expense recorded directly in equity

110

(12)

Profit for the period

–

Recognised income (expense) for the period

140

(12)

sappi limited – first quarter page 12

notes to the group results

sappi limited – first quarter page 13

Basis of preparation

The condensed quarterly financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) including International Accounting Standard (IAS) 34 Interim Financial Reporting.
The accounting policies used in the preparation of the quarterly results are compliant with IFRS and
consistent with those used in the annual financial statements for September 2006. A recent accounting
interpretation IFRIC 4: Determining whether an arrangement contains a lease, is still being evaluated. No
changes to previous disclosures on application of this interpretation have been made. At this stage it is not
envisaged that the impact of any adjustment required will be material to the results of operations.

These results are unaudited.

Reconciliation of movement in shareholders’ equity

Quarter

ended

Dec 2006

Dec 2005

US$ million

Balance – beginning of year

1,386

1,589

Total recognised income (expense) for the period

140

(12)

Dividends declared

(68)

Transfers to participants of the share purchase trust

Share Based Payment Reserve

Balance – end of period

1,467

1,512

Operating profit

Included in operating profit are the following non-cash items:

Depreciation of property, plant and equipment

Fair value adjustment on plantations (included in cost of sales)

Changes in volume

Fellings

Growth

(17)

(14)

–

Changes in fair value

(29)

(10)

(29)

(7)

Headline earnings per share

Headline earnings per share (US cents) *

Weighted average number of shares in issue (millions)

227.0

225.9

Diluted headline earnings per share (US cents) *

Weighted average number of shares on fully diluted basis (millions)

229.9

226.7

Calculation of Headline earnings *
Profit for the period

Write-off of assets

–

Impairment of property, plant and equipment

–

Headline earnings

* Headline earnings disclosure is a listings requirement by the JSE Limited.

notes to the group results (continued)

sappi limited – first quarter page 14

Quarter

ended

Dec 2006

Dec 2005

US$ million

Capital expenditure

Property, plant and equipment

138

Dec 2006

Sept 2006

US$ million

Capital commitments

Contracted but not provided

201

294

Approved but not contracted

340

255

541

549

Contingent liabilities

Guarantees and suretyships

Other contingent liabilities

supplemental information

definitions

Average – averages are calculated as the sum of the opening and closing balances for the relevant period

divided by two

* EBITDA – earnings before interest (net finance costs), tax, depreciation and amortisation

* EBITDA to sales – EBITDA divided by sales

Fellings – the amount charged against the income statement representing the standing value of

the plantations harvested

Headline earnings – as defined in Circular 7/2002 issued by the South African Institute of Chartered

Accountants, separates from earnings all items of a capital nature. It is not necessarily a measure of

sustainable earnings. It is a listing requirement of the JSE Limited to disclose headline earnings per share

NBSK – Northern Bleached Softwood Kraft pulp. One of the main varieties of market pulp, mainly produced

from spruce trees in Scandinavia, Canada and north eastern USA. The NBSK is a benchmark widely used in

pulp and paper industry for comparative purposes

* Net assets – total assets less current liabilities

* Net asset value – shareholders’ equity plus net deferred tax

* Net asset value per share – net asset value divided by the number of shares in issue at balance sheet date

* Net debt – current and non-current interest-bearing borrowings, and bank overdrafts (net of cash,

cash equivalents and short-term deposits)

* Net debt to total capitalisation – Net debt divided by shareholders’ equity plus minority interest,

non-current liabilities, current interest-bearing borrowings and overdraft

* ROE – return on average equity. Profit (loss) for the period divided by average shareholders’ equity

* RONA – operating profit divided by average net assets

* RONOA – operating profit divided by average net operating assets. Net operating assets are total assets

(excluding deferred taxation and cash) less current liabilities (excluding interest-bearing borrowings and

bank overdraft)

* SG&A – selling, general and administrative expenses

* The above financial measures, other than headline earnings per share, are presented to assist our shareholders and the

investment community in interpreting our financial results. These financial measures are regularly used and compared between
companies in our industry.

sappi limited – first quarter page 15

supplemental information

additional information

Quarter

ended

Dec 2006

Dec 2005

US$ million

Profit for the period to EBITDA

(1)

reconciliation

Profit for the period

Net finance costs

Taxation – current

– deferred

Depreciation

EBITDA

(1) (2)

187

146

Dec 2006

Sept 2006

US$ million

Net debt (US$ million)

(3)

2,278

2,113

Net debt to total capitalisation (%)

(3)

46.7

46.4

Net asset value per share (US$)

(3)

7.80

7.26

(1)

In connection with the U.S. Securities Exchange Commission (“SEC”) rules relating to “Conditions for Use of Non-GAAP
Financial Measures”, we have reconciled EBITDA to net profit rather than operating profit. As a result our definition retains non-
trading profit/loss and minority interest as part of EBITDA. EBITDA represents earnings before interest (net finance costs),
taxation, depreciation and amortisation. Net finance costs includes: gross interest paid; interest received; interest capitalised;
net foreign exchange gains; and net fair value adjustments on interest rate financial instruments. See the Group income
statement for an explanation of the computation of net finance costs. We use EBITDA as an internal measure of performance
to benchmark and compare performance, both between our own operations and as against other companies. EBITDA is a
measure used by the group, together with measures of performance under IFRS and US GAAP, to compare the relative
performance of operations in planning, budgeting and reviewing the performances of various businesses. We believe EBITDA
is a useful and commonly used measure of financial performance in addition to net profit, operating profit and other profitability
measures under IFRS or US GAAP because it facilitates operating performance comparisons from period to period and
company to company. By eliminating potential differences in results of operations between periods or companies caused by
factors such as depreciation and amortization methods, historic cost and age of assets, financing and capital structures and
taxation positions or regimes, we believe EBITDA can provide a useful additional basis for comparing the current performance
of the underlying operations being evaluated. For these reasons, we believe EBITDA and similar measures are regularly used
by the investment community as a means of comparison of companies in our industry. Different companies and analysts may
calculate EBITDA differently, so making comparisons among companies on this basis should be done very carefully. EBITDA is
not a measure of performance under IFRS or US GAAP and should not be considered in isolation or construed as a substitute
for operating profit or net profit as an indicator of the company’s operations in accordance with IFRS or US GAAP.

(2)

The EBITDA calculation has been amended to eliminate the adjustment for fellings which previously resulted in fellings being
added back in the calculation as part of amortisation. Given the current accounting treatment of plantations, management has
concluded that eliminating such an adjustment would be more appropriate in determining the EBITDA performance measure in
future both for internal and reporting purposes. Prior year figures have been recalculated for comparison purposes as follows:
December 2005 quarter: decrease by US$17 million; September 2006 quarter: decrease by US$19 million.

(3)

Refer to page 15, Supplemental Information for the definition of the term.

sappi limited – first quarter page 16

supplemental information

regional information

Quarter

ended

Dec 2006

Dec 2005

Metric tons

(000’s)

% change

Sales volumes

Fine Paper –

North America

372

344

8.1

Europe

635

602

5.5

Southern Africa

10.1

Total

1,094

1,025

6.7

Forest Products – Pulp and paper operations

331

355

(6.8)

Forestry operations

271

376

(27.9)

Total

1,696

1,756

(3.4)

Quarter

ended

Dec 2006

Dec 2005

US$ million

% change

Sales

Fine Paper –

North America

374

345

8.4

Europe

587

520

12.9

Southern Africa

6.4

Total

1,044

943

10.7

Forest Products – Pulp and paper operations

207

212

(2.4)

Forestry operations

(20.0)

Total

1,267

1,175

7.8

sappi limited – first quarter page 17

supplemental information

Quarter

ended

Dec 2006

Dec 2005

US$ million

% change

Operating profit

Fine Paper –

North America

100.0

Europe

(7.1)

Southern Africa

Total

6.7

Forest Products

110.8

Corporate

(2)

(3)

Total

87.8

Earnings before interest, tax, depreciation

and amortisation charges *

Fine Paper –

North America

(9.7)

Europe

Southern Africa

66.7

Total

(1.1)

Forest Products

79.2

Corporate

(2)

Total

187

146

28.1

Net operating assets

Fine Paper –

North America

1,106

1,173

(5.7)

Europe

1,867

1,748

6.8

Southern Africa

170

171

(0.6)

Total

3,143

3,092

1.6

Forest Products

1,474

1,389

6.1

Corporate and other

(48)

(23)

Total

4,569

4,458

2.5

* The EBITDA calculation has been amended to eliminate the adjustment for fellings which previously resulted in fellings being

added back in the calculation as part of amortisation. Refer to note 2 Additional Information in Supplemental Information for the

effects of the change.

sappi limited – first quarter page 18

supplemental information

sappi limited – first quarter page 19

summary rand convenience translation

Quarter

ended

Dec 2006

Dec 2005

% change

Sales (ZAR million)

9,294

7,613

22.1

Operating profit (ZAR million)

675

317

112.9

Profit for the period (ZAR million)

220

–

EBITDA (ZAR million) *

1,372

946

45.0

Operating profit to sales (%)

7.3

4.2

EBITDA to sales (%) *

14.8

12.4

Operating profit to average net assets (%)

9.3

4.9

EPS (SA cents)

–

Net debt (ZAR million) *

15,963

13,111

Net debt to total capitalisation (%) *

46.7

42.3

Cash generated by operations (ZAR million)

1,115

790

41.1

Cash retained from operating activities (ZAR million)

462

(65)

–

Net movement in cash and cash equivalents (ZAR million)

–

*Refer to page 15, Supplemental Information for the definition of the term.

exchange rates

Dec

Sept

June

March

Dec

2006

2005

Exchange rates:

Period end rate: US$ 1 = ZAR

7.0076

7.7738

7.1700

6.1655

6.3275

Average rate for the Quarter: US$ 1 = ZAR

7.3358

7.2475

6.4658

6.1858

6.4795

Average rate for the YTD: US$ 1 = ZAR

7.3358

6.6039

6.4031

6.3334

6.4795

Period end rate: EUR 1 = US$

1.3199

1.2672

1.2789

1.2119

1.1843

Average rate for the Quarter: EUR 1 = US$

1.2926

1.2744

1.2570

1.1983

1.1915

Average rate for the YTD: EUR 1 = US$

1.2926

1.2315

1.2191

1.1964

1.1915

The financial results of entities with reporting currencies other than the US Dollar are translated into US Dollars

as follows:

– Assets and liabilities at rates of exchange ruling at period end; and

– Income, expenditure and cash flow items at average exchange rates.

sappi ordinary shares

ADR price (NYSE TICKER: SPP)

n o t e : ( 1 A D R = 1 s a p p i s h a r e )

US$

ZAR

140

120

100

sappi limited – first quarter page 20

1 Apr

2004

1 Jul
2004

1 Oct

2004

1 Jan

2005

1 Apr

2005

1 Jul
2005

1 Oct

2005

1 Jan

2006

1 Apr

2006

1 Jul
2006

1 Oct

2006

1 Jan

2007

29 Jan
2007

1 Apr

2004

1 Jul
2004

1 Oct

2004

1 Jan

2005

1 Apr

2005

1 Jul
2005

1 Oct

2005

1 Jan

2006

1 Apr

2006

1 Jul
2006

1 Oct

2006

1 Jan

2007

29 Jan
2007

this report is available on the Sappi website

www.sappi.com

Other interested parties can obtain printed copies of this report from:

South Africa:

United States

United Kingdom:

Computershare Investor

ADR Depository:

Capita Registrars

Services 2004 Limited

The Bank of New York

The Registry

70 Marshall Street

Investor Relations

34 Beckenham Road

Johannesburg 2001

PO Box 11258

Beckenham, Kent

PO Box 61051

Church Street Station

BR3 4TU, DX 91750

Marshalltown 2107

New York, NY 10286-1258

Beckenham West

Tel +27 (0)11 370 5000

Tel +1 610 382 7836

Tel +44 (0)208 639 2157

Printed on Sappi Avalon Triple Green 250g/m

and 150g/m

www.sappi.com

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 2, 2007

SAPPI LIMITED,

by /s/ D.J. O'Connor

Name: D.J. O'Connor
Title: Executive Director: Finance