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 November, 2012
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
X
-------
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.
the Securities Exchange Act of 1934.
Yes
No
X
-------
If “Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): n/a
INCORPORATION BY REFERENCE
Sappi Limited’s report for the conformed
fourth quarter results ended September 2012, furnished by the Registrant under this Form 6-K,
is incorporated by reference into (i) the Registration Statements on Form S-8 of the Registrant filed December 23, 1999, December
15, 2004 and February 2, 2010 in connection with The Sappi Limited Share Incentive Scheme, (ii) the Section 10(a) Prospectus
relating to the offer and sale of the Registrant’s shares to Participants under The Sappi Limited Share Incentive Scheme, (iii) the
Registration Statements on Form S-8 of the Registrant filed December 15, 2004 and December 21, 2005 in connection with The
Sappi Limited 2004 Performance Share Incentive Plan and (iv) the Section 10(a) Prospectus relating to the offer and sale of the
Registrant’s shares to Participants under The Sappi Limited 2004 Performance Share Incentive Plan. This Form 6-K includes a
conformed version of the earnings announcement sent by the Registrant to its shareholders. This conformed version was prepared
solely for purposes of supplementing the documents referred to in clauses (i) - (iv) above.
is incorporated by reference into (i) the Registration Statements on Form S-8 of the Registrant filed December 23, 1999, December
15, 2004 and February 2, 2010 in connection with The Sappi Limited Share Incentive Scheme, (ii) the Section 10(a) Prospectus
relating to the offer and sale of the Registrant’s shares to Participants under The Sappi Limited Share Incentive Scheme, (iii) the
Registration Statements on Form S-8 of the Registrant filed December 15, 2004 and December 21, 2005 in connection with The
Sappi Limited 2004 Performance Share Incentive Plan and (iv) the Section 10(a) Prospectus relating to the offer and sale of the
Registrant’s shares to Participants under The Sappi Limited 2004 Performance Share Incentive Plan. This Form 6-K includes a
conformed version of the earnings announcement sent by the Registrant to its shareholders. This conformed version was prepared
solely for purposes of supplementing the documents referred to in clauses (i) - (iv) above.
FORWARD-LOOKING STATEMENTS
In order to utilize the ”Safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (the ”Reform
Act”), Sappi Limited (the ”Company”) is providing the following cautionary statement. Except for historical information contained herein,
statements contained in this Report on Form 6-K may constitute”forward-looking statements” within the meaning of the Reform Act.
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, which do not relate to historical matters,
identify forward-looking statements. In addition, this Report on Form 6-K may include forward-looking statements relating to the
Company’s potential exposure to various types of market risks, such as interest rate risk, foreign exchange rate risk and commodity
price risk. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties
and other factors which are in some cases beyond the control of the Company, together with its subsidiaries (the ”Group”), and may
cause the actual results, performance or achievements of the Group to differ materially from anticipated future results, performance or
achievements expressed or implied by such forward-looking statements (and from past results, performance or achievements).
Certain factors that may cause such differences include but are not limited to:
Act”), Sappi Limited (the ”Company”) is providing the following cautionary statement. Except for historical information contained herein,
statements contained in this Report on Form 6-K may constitute”forward-looking statements” within the meaning of the Reform Act.
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, which do not relate to historical matters,
identify forward-looking statements. In addition, this Report on Form 6-K may include forward-looking statements relating to the
Company’s potential exposure to various types of market risks, such as interest rate risk, foreign exchange rate risk and commodity
price risk. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties
and other factors which are in some cases beyond the control of the Company, together with its subsidiaries (the ”Group”), and may
cause the actual results, performance or achievements of the Group to differ materially from anticipated future results, performance or
achievements expressed or implied by such forward-looking 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 rawmaterial, energy and employee costs,
and pricing);
levels of demand, production capacity, production, input costs including rawmaterial, energy and employee costs,
and pricing);
·
the impact on the business of the global economic downturn;
·
unanticipated production disruptions (including as a result of planned or unexpected power
outages);
outages);
·
changes in environmental, tax and other laws and regulations;
·
adverse changes in the markets for the Group’s products;
·
the emergence of new technologies and changes in consumer trends including increase
preferences for digital media;
·
consequences of the Group’s leverage, including as a result of adverse changes in credit markets that affect the
Group’s ability to raise capital when needed;
Group’s ability to raise capital when needed;
·
adverse changes in the political situation and economy in the countries in which the Group operates or the
effect of governmental efforts to address present or future economic or social problems;
effect of governmental efforts to address present or future economic or social problems;
·
the impact of restructurings, investments, acquisitions
and 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 restructuring or strategic initiatives, and achieving expected savings and
synergies; and
financing), any delays, unexpected costs or other problems experienced in connection with dispositions or with
integrating acquisitions or implementing restructuring or strategic initiatives, and achieving expected savings and
synergies; and
·
currency fluctuations.
These and other risks, uncertainties and factors are discussed in the Company’s Annual Report on Form 20- F and other filings with
and submissions to the Securities and Exchange Commission, including this Report on Form 6-K. Shareholders and prospective
investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made
as of the date of the submission of this Report on Form 6-K and are not intended to give any assurance as to future results. 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.
and submissions to the Securities and Exchange Commission, including this Report on Form 6-K. Shareholders and prospective
investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made
as of the date of the submission of this Report on Form 6-K and are not intended to give any assurance as to future results. 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.
4th
Quarter results for
the period ended
September 2012
the period ended
September 2012
Form S-8 Version
Sappi works closely with customers,
both direct and indirect, in over
100 countries to provide them with
relevant and sustainable paper,
paper-pulp and dissolving wood pulp
products and related services and
innovations.
both direct and indirect, in over
100 countries to provide them with
relevant and sustainable paper,
paper-pulp and dissolving wood pulp
products and related services and
innovations.
Our market-leading range of paper
products includes: coated fine
papers used by printers, publishers
and corporate end-users in the
production of books, brochures,
magazines, catalogues, direct mail
and many other print applications;
casting release papers used by
suppliers to the fashion, textiles,
automobile and household industries;
and in our Southern African region,
newsprint, uncoated graphic and
business papers, premium-quality
packaging papers, paper-grade pulp
and dissolving wood pulp.
products includes: coated fine
papers used by printers, publishers
and corporate end-users in the
production of books, brochures,
magazines, catalogues, direct mail
and many other print applications;
casting release papers used by
suppliers to the fashion, textiles,
automobile and household industries;
and in our Southern African region,
newsprint, uncoated graphic and
business papers, premium-quality
packaging papers, paper-grade pulp
and dissolving wood pulp.
Our dissolving wood pulp products
are used worldwide by converters
to create viscose fibre, acetate tow,
pharmaceutical products as well as
a wide range of consumer products.
are used worldwide by converters
to create viscose fibre, acetate tow,
pharmaceutical products as well as
a wide range of consumer products.
The pulp needed for our products
is either produced within Sappi or
bought from accredited suppliers.
Across the group, Sappi is close to
‘pulp neutral’, meaning that we sell
almost as much pulp as we buy.
is either produced within Sappi or
bought from accredited suppliers.
Across the group, Sappi is close to
‘pulp neutral’, meaning that we sell
almost as much pulp as we buy.
4th quarter results
* for the period ended September 2012
24%
Sales by source*
Europe
Southern Africa
North America
North America
23%
53%
24%
23%
23%
53%
Uncoated ne paper
Coated ne paper
7%
7%
7%
7%
7%
14%
Sales by product group*
Specialities
Commodity paper
Commodity paper
Pulp
Other
2%
63%
63%
14%
7%
7%
2%
7%
19%
23%
Sales by destination*
Southern Africa
Europe
North America
Asia and other
Asia and other
13%
45%
45%
23%
19%
13%
19%
13%
This cover picture is a photograph of a stylised transverse cross-section of Eucalyptus wood.
The large circles are vessels which transport water up and down the tree and the smaller
circles are the fibres which we use to make paper and chemical cellulose.
Fibres are separated in the pulping process through the softening and removal of lignin which
acts as a glue between the fibres in the wood. In papermaking, fibres are re-formed to form
a flat, strong and uniform surface for printing and writing.
Photograph taken by Dr Valerie Grzekowiak
The large circles are vessels which transport water up and down the tree and the smaller
circles are the fibres which we use to make paper and chemical cellulose.
Fibres are separated in the pulping process through the softening and removal of lignin which
acts as a glue between the fibres in the wood. In papermaking, fibres are re-formed to form
a flat, strong and uniform surface for printing and writing.
Photograph taken by Dr Valerie Grzekowiak
1
sappi
4th quarter results
Financial summary for the quarter
·
Profit for the period US$107 million (Q4 2011 loss for the period
US$127 million)
US$127 million)
·
Earnings per share of 21 US cents (Q4 2011 loss per share 24 US cents)
·
Operating profit US$160 million (Q4 2011 operating loss of US$88 million)
·
Operating profit excluding special items US$118 million
(Q4 2011 US$80 million)
(Q4 2011 US$80 million)
·
Net cash generated from operating and investing activities
US$203 million (Q4 2011 US$279 million)
US$203 million (Q4 2011 US$279 million)
·
Targeted interest-bearing borrowings (including bank overdrafts) less
cash and cash equivalents (‘net debt’) level reached a year early –
US$1,979 million
cash and cash equivalents (‘net debt’) level reached a year early –
US$1,979 million
Quarter ended
Year ended
Sept 2012
Sept 2011
Jun 2012
Sept 2012
Sept 2011
Key figures: (US$ million)
Sales
1,585
1,787
1,544
6,347
7,286
Operating profit (loss)
160
(88)
34
421
86
Special items – (gains) losses
(1)
(42)
168
26
(18)
318
Operating profit excluding special
items
items
(2)
118
80
60
403
404
EBITDA excluding special items
(2)
211
183
150
772
821
Profit (loss) for the period
107
(127)
(106)
104
(232)
Basic earnings (loss) per share
(US cents)
(US cents)
21
(24)
(20)
20
(45)
Key ratios: (%)
Operating profit (loss) to sales
10.1
(4.9)
2.2
6.6
1.2
Operating profit excluding special
items to sales
items to sales
7.4
4.5
3.9
6.3
5.5
EBITDA excluding special
items to sales
items to sales
13.3
10.2
9.7
12.2
11.3
Net asset value per share
(US cents)
(US cents)
293
284
299
293
284
(1)
Refer to note 8 for details on special items.
(2)
Refer to note 8 to the group results for the reconciliation of EBITDA excluding special items and operating profit excluding
special items to segment operating profit (loss), and profit (loss) for the period.
2
Commentary on the quarter
The European and North American paper businesses performed well during the quarter despite
tough market conditions. This performance reflects the positive effects of our ongoing actions to
further improve customer service, reduce costs and increase efficiencies over the past two years.
tough market conditions. This performance reflects the positive effects of our ongoing actions to
further improve customer service, reduce costs and increase efficiencies over the past two years.
The performance of our Southern African operations was negatively impacted by both the
rescheduling of the planned maintenance shut at Saiccor Mill from the third quarter to this quarter,
and the continuing weakness in the South African paper market.
rescheduling of the planned maintenance shut at Saiccor Mill from the third quarter to this quarter,
and the continuing weakness in the South African paper market.
We have decided to rename the Chemical Cellulose division to Sappi Specialised Cellulose to
better reflect our product range and the increased importance to the group of our dissolving wood
pulp business.
better reflect our product range and the increased importance to the group of our dissolving wood
pulp business.
Sales volumes for the group were approximately 3% lower than the equivalent quarter last year,
and reflect weaker market conditions, particularly in Europe. Average selling prices were lower as
a result of lower pulp prices, slightly weaker prices in certain grades of paper as well as the weaker
Rand and Euro exchange rate to the US Dollar and the translation impact this has on our prices.
and reflect weaker market conditions, particularly in Europe. Average selling prices were lower as
a result of lower pulp prices, slightly weaker prices in certain grades of paper as well as the weaker
Rand and Euro exchange rate to the US Dollar and the translation impact this has on our prices.
Pulp prices continued to decline during the quarter. The prices of other major inputs, including
wood, chemicals and energy were largely flat both compared to the prior quarter and the
equivalent quarter last year. The exception was the cost of energy in South Africa, which continues
to see substantial increases in pricing from the national energy supplier.
wood, chemicals and energy were largely flat both compared to the prior quarter and the
equivalent quarter last year. The exception was the cost of energy in South Africa, which continues
to see substantial increases in pricing from the national energy supplier.
Operating profit was US$160 million for the quarter compared to an operating loss of US$88 million
in the equivalent quarter last year and operating profit of US$34 million in the quarter ended
June 2012.
in the equivalent quarter last year and operating profit of US$34 million in the quarter ended
June 2012.
Operating profit excluding special items was US$118 million for the quarter compared to
US$80 million in the equivalent quarter last year and US$60 million in the quarter ended June 2012.
US$80 million in the equivalent quarter last year and US$60 million in the quarter ended June 2012.
The improvement in operating performance and the lower interest costs, mainly as a result of the
refinancing undertaken in the prior quarter, resulted in a profit for the period of US$107 million. The
earnings per share for the quarter was 21 US cents compared with a loss per share of 24 US cents
in the equivalent quarter last year.
refinancing undertaken in the prior quarter, resulted in a profit for the period of US$107 million. The
earnings per share for the quarter was 21 US cents compared with a loss per share of 24 US cents
in the equivalent quarter last year.
Year ended September 2012 compared to year ended September 2011
The group’s operating profit was US$421 million, significantly better than the US$86 million
last year.
last year.
The group’s operating profit excluding special items for the year was in line with that achieved last
year, despite challenging market conditions and pulp prices that were substantially lower in
US Dollar terms, which negatively affected our Southern African and North American businesses.
year, despite challenging market conditions and pulp prices that were substantially lower in
US Dollar terms, which negatively affected our Southern African and North American businesses.
Operating profit excluding special items was US$403 million. Special items amounted to a gain of
US$18 million comprising mainly the profit on the sale of assets of US$63 million, offset primarily
by fire and flood damage, asset impairment charges and an unfavourable plantation price fair value
adjustment.
US$18 million comprising mainly the profit on the sale of assets of US$63 million, offset primarily
by fire and flood damage, asset impairment charges and an unfavourable plantation price fair value
adjustment.
Net finance costs for the year was US$283 million, including the cost of the refinancing undertaken
during the third quarter.
during the third quarter.
Profit for the period was US$104 million for the year compared to a loss for the period of US$232
million in the prior year. The prior year loss for the period included special item losses of
US$318 million, principally related to the restructuring of the European and Southern African
operations. Earnings per share were significantly better, with earnings per share of 20 US cents
compared to a loss per share of 45 US cents in the prior year.
million in the prior year. The prior year loss for the period included special item losses of
US$318 million, principally related to the restructuring of the European and Southern African
operations. Earnings per share were significantly better, with earnings per share of 20 US cents
compared to a loss per share of 45 US cents in the prior year.
3
sappi
4th quarter results
Cash flow and debt
Quarter
Net cash generated from operating and investing activities for the quarter was US$203 million,
compared with US$279 million for the equivalent quarter last year. During the quarter,
US$115 million was generated from working capital, reflecting the seasonality of our business.
Capital expenditure increased to US$112 million from US$103 million in the equivalent quarter last
year as a result of the increased spending on the dissolving wood pulp (chemical cellulose)
investments at the Ngodwana and Cloquet mills.
compared with US$279 million for the equivalent quarter last year. During the quarter,
US$115 million was generated from working capital, reflecting the seasonality of our business.
Capital expenditure increased to US$112 million from US$103 million in the equivalent quarter last
year as a result of the increased spending on the dissolving wood pulp (chemical cellulose)
investments at the Ngodwana and Cloquet mills.
Year
Net cash generated from operating and investing activities for the full year was US$127 million
compared to US$163 million last year. This decrease is primarily due to the additional capital
expenditure for the dissolving wood pulp conversions.
compared to US$163 million last year. This decrease is primarily due to the additional capital
expenditure for the dissolving wood pulp conversions.
Net debt was further reduced from US$2,100 million to US$1,979 million, achieving our target of
reducing net debt to below US$2 billion a year earlier than initially indicated.
reducing net debt to below US$2 billion a year earlier than initially indicated.
During the year, we successfully refinanced US$700 million of debt resulting in the extension of our
maturities and reduction in our finance costs. The refinancing will reduce our annual interest charge
by US$45 million and our cash interest charge by US$30 million per annum. We now have no
significant maturities due before 2017.
maturities and reduction in our finance costs. The refinancing will reduce our annual interest charge
by US$45 million and our cash interest charge by US$30 million per annum. We now have no
significant maturities due before 2017.
At September 2012, we had liquidity comprising US$645 million of cash in addition to the
€350 million (US$450 million) available from the undrawn committed revolving credit facility.
€350 million (US$450 million) available from the undrawn committed revolving credit facility.
Operating Review for the Quarter
Sappi Fine Paper
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Jun 2012
US$ million
Quarter
ended
Mar 2012
US$ million
Quarter
ended
Dec 2011
US$ million
Quarter
ended
Sept 2011
US$ million
Sales
1,203
1,155
1,232
1,198
1,337
Operating profit
127
17
77
44
22
Operating profit to sales (%)
10.6
1.5
6.3
3.7
1.6
Special items – (gains)
losses
losses
(40)
11
(4)
(5)
17
Operating profit excluding
special items
special items
87
28
73
39
39
Operating profit excluding
special items to sales (%)
special items to sales (%)
7.2
2.4
5.9
3.3
2.9
Operating profit and operating profit excluding special items for the global fine paper business
improved compared to both the prior quarter ended June 2012 as well as the equivalent quarter last
year. Improved efficiencies and lower average variable costs offset sales volumes that were 4% below
those achieved a year ago.
improved compared to both the prior quarter ended June 2012 as well as the equivalent quarter last
year. Improved efficiencies and lower average variable costs offset sales volumes that were 4% below
those achieved a year ago.
4
Europe
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Jun 2012
US$ million
Quarter
ended
Mar 2012
US$ million
Quarter
ended
Dec 2011
US$ million
Quarter
ended
Sept 2011
US$ million
Sales
826
795
883
846
942
Operating profit (loss)
87
4
53
34
(18)
Operating profit (loss) to
sales (%)
sales (%)
10.5
0.5
6.0
4.0
(1.9)
Special items – (gains) losses
(42)
6
(4)
(5)
23
Operating profit excluding
special items
special items
45
10
49
29
5
Operating profit excluding
special items to sales (%)
special items to sales (%)
5.4
1.3
5.5
3.4
0.5
Demand was largely as expected, with volumes down 5% compared to the equivalent quarter last
year, and up 6% compared to the prior quarter, primarily due to the typical seasonal recovery.
Sales volumes for the full year were 9% down compared to the prior year, due to a combination
of weaker coated paper sales and the closure of the Biberist mill which led to reduced uncoated
woodfree capacity.
year, and up 6% compared to the prior quarter, primarily due to the typical seasonal recovery.
Sales volumes for the full year were 9% down compared to the prior year, due to a combination
of weaker coated paper sales and the closure of the Biberist mill which led to reduced uncoated
woodfree capacity.
Average prices realised for the quarter were marginally lower than for the equivalent quarter last
year, and flat compared to the prior quarter.
year, and flat compared to the prior quarter.
Fixed costs were 7% lower in the quarter compared to the equivalent quarter last year.
Raw material prices, including pulp, chemicals, wood and energy were lower than for the
equivalent quarter last year. This, in combination with the additional benefit of the variable cost
reduction programme initiated in 2011, resulted in cost savings for financial year 2012 in excess
of US$130 million.
Raw material prices, including pulp, chemicals, wood and energy were lower than for the
equivalent quarter last year. This, in combination with the additional benefit of the variable cost
reduction programme initiated in 2011, resulted in cost savings for financial year 2012 in excess
of US$130 million.
During the quarter, we announced the planned conversion of PM2 at the Alfeld mill from
150,000 tons of coated fine paper to 135,000 tons of speciality paper per annum. This conversion
will not only increase our capacity in a growing and higher margin specialised business, but will
also improve our cost position in coated woodfree graphic paper and further reduce our graphic
paper capacity in line with our strategy.
150,000 tons of coated fine paper to 135,000 tons of speciality paper per annum. This conversion
will not only increase our capacity in a growing and higher margin specialised business, but will
also improve our cost position in coated woodfree graphic paper and further reduce our graphic
paper capacity in line with our strategy.
5
sappi
4th quarter results
North America
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Jun 2012
US$ million
Quarter
ended
Mar 2012
US$ million
Quarter
ended
Dec 2011
US$ million
Quarter
ended
Sept 2011
US$ million
Sales
377
360
349
352
395
Operating profit
40
13
24
10
40
Operating profit to sales (%)
10.6
3.6
6.9
2.8
10.1
Special items – losses (gains)
2
5
–
–
(6)
Operating profit excluding
special items
special items
42
18
24
10
34
Operating profit excluding
special items to sales (%)
special items to sales (%)
11.1
5.0
6.9
2.8
8.6
Operating profit improved when compared to the prior quarter but was in line with the equivalent
quarter last year.
quarter last year.
Operating profit excluding special items improved to both the prior quarter and the equivalent
quarter last year and reflects the continued strong performance from the coated paper business.
The performance was achieved despite weaker industry conditions and the business achieved
sales volumes similar to those for the equivalent quarter last year, with improved margins.
quarter last year and reflects the continued strong performance from the coated paper business.
The performance was achieved despite weaker industry conditions and the business achieved
sales volumes similar to those for the equivalent quarter last year, with improved margins.
The pulp business continues to be negatively impacted by lower sales prices compared to both
the prior quarter and the equivalent quarter last year, with pulp prices 9% below those in the
equivalent quarter last year. The conversion of the Cloquet pulp mill from hardwood kraft pulp to
dissolving wood pulp continues on schedule.
the prior quarter and the equivalent quarter last year, with pulp prices 9% below those in the
equivalent quarter last year. The conversion of the Cloquet pulp mill from hardwood kraft pulp to
dissolving wood pulp continues on schedule.
Release sales volume was higher than in the equivalent quarter last year, with the pricing mix being
weaker due to weak demand in key global speciality markets.
weaker due to weak demand in key global speciality markets.
Both raw material pricing and usage were favourable during the quarter, and resulted in total
variable costs being 7% lower per ton compared to the equivalent quarter last year. A strong
manufacturing performance underpinned the lower usage and strong sales volumes.
variable costs being 7% lower per ton compared to the equivalent quarter last year. A strong
manufacturing performance underpinned the lower usage and strong sales volumes.
6
Sappi Southern Africa
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Jun 2012
US$ million
Quarter
ended
Mar 2012
US$ million
Quarter
ended
Dec 2011
US$ million
Quarter
ended
Sept 2011
US$ million
Sales
382
389
401
387
450
Operating profit (loss)
30
16
44
63
(64)
Operating profit (loss) to
sales (%)
sales (%)
7.9
4.1
11.0
16.3
(14.2)
Special items – losses (gains)
3
15
9
(2)
105
Operating profit excluding
special items
special items
33
31
53
61
41
Operating profit excluding
special items to sales (%)
special items to sales (%)
8.6
8.0
13.2
15.8
9.1
The operating performance of the business was negatively impacted by the rescheduling of the
planned annual maintenance shut at Saiccor Mill from the third quarter to the fourth quarter and
lower average pulp prices.
planned annual maintenance shut at Saiccor Mill from the third quarter to the fourth quarter and
lower average pulp prices.
The Specialised Cellulose (Chemical Cellulose) business continued to perform well. Dissolving
wood pulp demand continued to grow in 2012, albeit at a slower pace than last year. Despite the
impact of the maintenance shut in the quarter, sales volumes were close to those achieved in the
equivalent quarter last year. Net prices however, were 7% lower as a result of the lower US Dollar
NBSK pulp prices that our contracted dissolving wood pulp sales are linked to, offset to some
extent by the weaker Rand. Saiccor Mill achieved record production volumes in the past year. The
conversion of the Ngodwana pulp mill from hardwood kraft pulp to dissolving wood pulp continues
on schedule.
wood pulp demand continued to grow in 2012, albeit at a slower pace than last year. Despite the
impact of the maintenance shut in the quarter, sales volumes were close to those achieved in the
equivalent quarter last year. Net prices however, were 7% lower as a result of the lower US Dollar
NBSK pulp prices that our contracted dissolving wood pulp sales are linked to, offset to some
extent by the weaker Rand. Saiccor Mill achieved record production volumes in the past year. The
conversion of the Ngodwana pulp mill from hardwood kraft pulp to dissolving wood pulp continues
on schedule.
The Southern African paper business had an improved performance compared to the
equivalent quarter last year, which was negatively impacted by an industry-wide three week strike.
Fixed costs were more than 20% lower than the equivalent quarter last year, benefiting from the
Southern African restructuring completed earlier in the year.
equivalent quarter last year, which was negatively impacted by an industry-wide three week strike.
Fixed costs were more than 20% lower than the equivalent quarter last year, benefiting from the
Southern African restructuring completed earlier in the year.
Post the quarter-end we announced the decision to mothball PM4, a sackkraft and containerboard
machine, at the Tugela mill from 01 January 2013. We are currently in a consultation process with
employees at the mill regarding potential retrenchments. The asset impairment charge related to
the mothballing of the machine of US$9 million was taken in this quarter and is included in special
items.
machine, at the Tugela mill from 01 January 2013. We are currently in a consultation process with
employees at the mill regarding potential retrenchments. The asset impairment charge related to
the mothballing of the machine of US$9 million was taken in this quarter and is included in special
items.
7
sappi
4th quarter results
Outlook
Given continued uncertainty in global markets, and questions around the timing of any meaningful
economic recovery in our major markets, we expect trading conditions to remain challenging for
the next 12 months. Pulp prices, despite having recovered from their recent lows, are expected to
remain lower on average in 2013 than they were in 2012. This will negatively impact our North
American and Southern African businesses, which are net sellers of pulp, but will have a favourable
impact on our European business which is a net buyer of pulp.
economic recovery in our major markets, we expect trading conditions to remain challenging for
the next 12 months. Pulp prices, despite having recovered from their recent lows, are expected to
remain lower on average in 2013 than they were in 2012. This will negatively impact our North
American and Southern African businesses, which are net sellers of pulp, but will have a favourable
impact on our European business which is a net buyer of pulp.
We expect that demand for dissolving wood pulp in our Specialised Cellulose operations will
continue to grow in the coming year and beyond. We believe that particularly with our additional
low cost capacity, we are well positioned to take advantage of this growth. We have made further
good progress in signing long-term contracts for a significant portion of our new dissolving wood
pulp capacity.
continue to grow in the coming year and beyond. We believe that particularly with our additional
low cost capacity, we are well positioned to take advantage of this growth. We have made further
good progress in signing long-term contracts for a significant portion of our new dissolving wood
pulp capacity.
We expect the first quarter result for the Southern African operations to be in line with that
achieved in the fourth quarter of 2012. Operating profit in the first financial quarter of 2013 is
expected to be weaker than the equivalent quarter last year as a result of lower pulp prices, slightly
lower paper prices in Europe, as well as the impact of the road transport strike in South Africa.
achieved in the fourth quarter of 2012. Operating profit in the first financial quarter of 2013 is
expected to be weaker than the equivalent quarter last year as a result of lower pulp prices, slightly
lower paper prices in Europe, as well as the impact of the road transport strike in South Africa.
We expect a modest cash outflow in the important transitional year ahead due to the increase in
capital expenditure on the Specialised Cellulose investments. Our finance costs will be substantially
lower following the refinancing in 2012 and we expect that net debt will end the coming year
essentially flat year on year barring the impact of any adverse foreign currency translations.
capital expenditure on the Specialised Cellulose investments. Our finance costs will be substantially
lower following the refinancing in 2012 and we expect that net debt will end the coming year
essentially flat year on year barring the impact of any adverse foreign currency translations.
Additional downtime, variable costs and paper pulp purchases during the start-up phase of the
Ngodwana and Cloquet projects are expected to have a negative impact of approximately
US$40 million in the 2013 financial year.
Ngodwana and Cloquet projects are expected to have a negative impact of approximately
US$40 million in the 2013 financial year.
Provided that there is no further deterioration in global market conditions, we expect continued
profit growth, with the once-off negative operational impact of the conversion projects and the
expected lower pulp prices being offset by the lower finance costs.
profit growth, with the once-off negative operational impact of the conversion projects and the
expected lower pulp prices being offset by the lower finance costs.
We believe that the actions we have taken in all of our paper businesses over the past two years,
and the strategy of investing in higher margin, higher growth businesses such as Specialised
Cellulose will enable us to continue to improve our ability to generate shareholder value in the
coming year, but importantly also position us for an acceleration of that growth in the years
thereafter.
and the strategy of investing in higher margin, higher growth businesses such as Specialised
Cellulose will enable us to continue to improve our ability to generate shareholder value in the
coming year, but importantly also position us for an acceleration of that growth in the years
thereafter.
Directorate
Professor Meyer Feldberg, our lead independent director, will retire from the board at the end of
December 2012, having reached the board’s mandatory retirement age. Sir Nigel Rudd who has
served as a non-executive director for six years will succeed Professor Feldberg as lead
independent director at that time.
December 2012, having reached the board’s mandatory retirement age. Sir Nigel Rudd who has
served as a non-executive director for six years will succeed Professor Feldberg as lead
independent director at that time.
On behalf of the board
R J Boëttger
S R Binnie
Director
Director
08 November 2012
8
Condensed group income statement
Note
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
Sales
1,585
1,787
6,347
7,286
Cost of sales
1,363
1,582
5,552
6,454
Gross profit
222
205
795
832
Selling, general and
administrative expenses
administrative expenses
102
126
417
454
Other operating (income)
expenses
expenses
(38)
167
(41)
298
Share of profit from associates
and joint ventures
and joint ventures
(2)
–
(2)
(6)
Operating profit (loss)
2
160
(88)
421
86
Net finance costs
37
56
283
307
Net interest
46
60
299
336
Finance cost capitalised
(2)
–
(6)
–
Net foreign exchange gain
(4)
(3)
(5)
(13)
Net fair value gain on financial
instruments
instruments
(3)
(1)
(5)
(16)
Profit (loss) before taxation
123
(144)
138
(221)
Taxation
16
(17)
34
11
Current
16
2
28
14
Deferred
–
(19)
6
(3)
Profit (loss) for the period
107
(127)
104
(232)
Basic earnings (loss) per
share (US cents)
share (US cents)
21
(24)
20
(45)
Weighted average number of
shares in issue (millions)
shares in issue (millions)
520.8
520.4
520.8
519.9
Diluted basic earnings (loss)
per share (US cents)
per share (US cents)
20
(24)
20
(45)
Weighted average number of shares
on fully diluted basis (millions)
on fully diluted basis (millions)
522.3
520.4
522.2
519.9
Condensed group statement of comprehensive income
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
Profit (loss) for the period
107
(127)
104
(232)
Other comprehensive loss,
net of tax
net of tax
(140)
(285)
(69)
(205)
Exchange differences on translation
of foreign operations
of foreign operations
(50)
(214)
(60)
(151)
Actuarial losses on post-employment
benefit funds
benefit funds
(88)
(59)
(88)
(59)
Movements in hedging reserves
(24)
(12)
(47)
6
Movement on available for sale
financial assets
financial assets
1
2
1
2
Deferred tax effect of above items
21
(2)
24
(3)
Recognition of previously
unrecognised deferred tax asset
unrecognised deferred tax asset
(1)
–
–
101
–
Total comprehensive (loss) income
for the period
for the period
(33)
(412)
35
(437)
(1) Relates to amounts recognised within other comprehensive income in previous fiscal years.
9
sappi
4th quarter results
Condensed group balance sheet
Sept 2012
US$ million
Sept 2011
US$ million
ASSETS
Non-current assets
3,990
4,085
Property, plant and equipment
3,157
3,235
Plantations
555
580
Deferred taxation
154
45
Other non-current assets
124
225
Current assets
2,178
2,223
Inventories
726
750
Trade and other receivables
807
834
Cash and cash equivalents
645
639
Total assets
6,168
6,308
EQUITY AND LIABILITIES
Shareholders’ equity
Ordinary shareholders’ interest
1,525
1,478
Non-current liabilities
3,328
3,178
Interest-bearing borrowings
2,358
2,289
Deferred taxation
319
336
Other non-current liabilities
651
553
Current liabilities
1,315
1,652
Interest-bearing borrowings
261
449
Bank overdraft
5
1
Other current liabilities
1,023
1,182
Taxation payable
26
20
Total equity and liabilites
6,168
6,308
Number of shares in issue at balance sheet date (millions)
520.8
520.5
10
Condensed group statement of cash flows
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
Profit (loss) for the period
107
(127)
104
(232)
Adjustment for:
Depreciation, fellings and amortisation
109
121
442
499
Taxation
16
(17)
34
11
Net finance costs
37
56
283
307
Defined post-employment benefits paid
(23)
(20)
(62)
(70)
Plantation fair value adjustments
(28)
(21)
(68)
(65)
Impairments of assets and investments
13
98
10
167
Net restructuring provisions
(3)
67
(2)
135
Profit on disposal of investment
(11)
–
(11)
–
Profit on non-current assets held for sale
(48)
–
(48)
–
Other non-cash items
13
26
46
46
Cash generated from operations
182
183
728
798
Movement in working capital
115
266
(102)
(98)
Net finance costs paid
(38)
(62)
(195)
(256)
Taxation paid
(8)
(7)
(20)
(38)
Cash retained from operating activities
251
380
411
406
Cash utilised in investing activities
(48)
(101)
(284)
(243)
Net cash generated from operating
and investing activities
and investing activities
203
279
127
163
Cash effects of financing activities
39
68
(103)
(296)
Net movement in cash and cash
equivalents
equivalents
242
347
24
(133)
Condensed group statement of changes in equity
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
Balance – beginning of period
1,478
1,896
Total comprehensive income (loss) for the period
35
(437)
Transfers from the share purchase trust
2
6
Transfers of vested share options
(2)
(7)
Share-based payment reserve
12
20
Balance – end of period
1,525
1,478
11
sappi
4th quarter results
Notes to the condensed group results
1.
Basis of preparation
The condensed consolidated preliminary financial results for the fiscal year ended September 2012
have been prepared in compliance with the Listings Requirements of the JSE Limited and in
accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board, AC 500 standards issued by the Accounting Practices Board, the requirements of
the Companies Act of South Africa and the information required by IAS 34 Interim Financial
Reporting. The accounting policies applied in the preparation of these preliminary financial results are
consistent with those applied for the year ended September 2011.
have been prepared in compliance with the Listings Requirements of the JSE Limited and in
accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board, AC 500 standards issued by the Accounting Practices Board, the requirements of
the Companies Act of South Africa and the information required by IAS 34 Interim Financial
Reporting. The accounting policies applied in the preparation of these preliminary financial results are
consistent with those applied for the year ended September 2011.
The fiscal year ended September 2012 consists of 52 weeks compared to the prior fiscal year which
consisted of 53 weeks.
consisted of 53 weeks.
The preparation of this condensed consolidated financial information was supervised by the Chief
Financial Officer, S R Binnie CA(SA).
Financial Officer, S R Binnie CA(SA).
The results are unaudited.
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
2.
Operating profit (loss)
Included in operating profit (loss)
are the following non-cash items:
are the following non-cash items:
Depreciation and amortisation
93
103
369
417
Fair value adjustment on plantations
(included in cost of sales)
(included in cost of sales)
Changes in volume
Fellings
16
18
73
82
Growth
(19)
(21)
(83)
(81)
(3)
(3)
(10)
1
Plantation price fair value
adjustment
adjustment
(9)
–
15
16
(12)
(3)
5
17
Included in other operating (income)
expenses are the following:
expenses are the following:
Impairments of assets and investments
13
98
10
167
Loss (profit) on disposal of property,
plant and equipment
plant and equipment
3
(1)
(4)
(1)
Profit on disposal of investment
(11)
–
(11)
–
Profit on non-current assets
held for sale
held for sale
(48)
–
(48)
–
Net restructuring provisions
(3)
67
(2)
135
Black Economic Empowerment
charge
charge
–
2
3
5
12
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
3.
Headline earnings (loss) per share
Headline earnings (loss) per share
(US cents)
(US cents)
12
(8)
9
(16)
Weighted average number of shares
in issue (millions)
in issue (millions)
520.8
520.4
520.8
519.9
Diluted headline earnings (loss) per
share (US cents)
share (US cents)
12
(8)
9
(16)
Weighted average number of shares
on fully diluted basis (millions)
on fully diluted basis (millions)
522.3
520.4
522.2
519.9
Calculation of headline earnings
(loss)
(loss)
Profit (loss) for the period
107
(127)
104
(232)
Impairments of assets and
investments
investments
13
98
10
167
Loss (profit) on disposal of property,
plant and equipment
plant and equipment
3
(1)
(4)
(1)
Profit on disposal of investment
(11)
–
(11)
–
Profit on non-current assets held
for sale
for sale
(48)
–
(48)
–
Tax effect of above items
(3)
(14)
(2)
(17)
Headline earnings (loss)
61
(44)
49
(83)
4.
Capital expenditure
Property, plant and equipment
161
107
404
268
Sept 2012
US$ million
Sept 2011
US$ million
5.
Capital commitments
Contracted
267
61
Approved but not contracted
244
416
511
477
6.
Contingent liabilities
Guarantees and suretyships
31
33
Other contingent liabilities
10
15
41
48
13
sappi
4th quarter results
7.
Material balance sheet movements
Interest-bearing borrowings
In October 2011, the group repaid US$130 million (ZAR1,000 million) of the ZAR 10.64% fixed rate
public bonds in Southern Africa from cash resources.
In October 2011, the group repaid US$130 million (ZAR1,000 million) of the ZAR 10.64% fixed rate
public bonds in Southern Africa from cash resources.
In April 2012, the group issued a three-year ZAR750 million (US$98 million) floating rate bond
(‘SSA02’) at a 144 basis points spread over the six-month Johannesburg Inter-bank Agreed Rate.
The floating rate of the new bond was swapped into a fixed rate of 7.78%. The proceeds of the
bonds were used partly to refinance the ZAR500 million (US$65 million) bond (‘SMF3’) that matured
on 29 June 2012.
(‘SSA02’) at a 144 basis points spread over the six-month Johannesburg Inter-bank Agreed Rate.
The floating rate of the new bond was swapped into a fixed rate of 7.78%. The proceeds of the
bonds were used partly to refinance the ZAR500 million (US$65 million) bond (‘SMF3’) that matured
on 29 June 2012.
In June 2012, the group placed a new bond offering comprising two tranches of senior secured
notes being US$400 million notes due 2017 with a coupon of 7.750% per annum and US$300 million
notes due 2019 with a coupon of 8.375% per annum. The proceeds of the new notes together with
cash on hand, via tender offer and call redemption, were used to early redeem US$700 million of the
principal amount of the senior secured notes due 2014. As a result of the early redemption, a once-
off charge consisting of premium and other costs of US$86 million was recorded to net finance costs
for the year.
notes being US$400 million notes due 2017 with a coupon of 7.750% per annum and US$300 million
notes due 2019 with a coupon of 8.375% per annum. The proceeds of the new notes together with
cash on hand, via tender offer and call redemption, were used to early redeem US$700 million of the
principal amount of the senior secured notes due 2014. As a result of the early redemption, a once-
off charge consisting of premium and other costs of US$86 million was recorded to net finance costs
for the year.
In August 2012, the group entered into a €136 million (US$170 million) five-year term loan facility with
the Österreichische Kontrollbank, the proceeds of which will be used to fund the chemical cellulose
conversion project in North America.
the Österreichische Kontrollbank, the proceeds of which will be used to fund the chemical cellulose
conversion project in North America.
In September 2012, the group repaid the drawn amount of €100 million (US$129 million) of the
€350 million (US$450 million) revolving credit facility from cash resources. At year-end, the facility
remained undrawn.
€350 million (US$450 million) revolving credit facility from cash resources. At year-end, the facility
remained undrawn.
Other non-current assets
On the early redemption of the US$300 million tranche of the senior secured notes due 2014,
the group simultaneously unwound the corresponding interest rate and currency swaps resulting in
a cash inflow of US$43 million to the group.
On the early redemption of the US$300 million tranche of the senior secured notes due 2014,
the group simultaneously unwound the corresponding interest rate and currency swaps resulting in
a cash inflow of US$43 million to the group.
In August 2012, the group entered into a sale agreement for its equity accounted 34% shareholding
in Jiangxi Chenming Paper company to the majority shareholder and co-founding joint venture
partner for US$42 million resulting in a profit of US$11 million which includes the realisation of a
foreign currency translation reserve that was previously disclosed in other comprehensive income.
The proceeds were received on 06 November 2012.
in Jiangxi Chenming Paper company to the majority shareholder and co-founding joint venture
partner for US$42 million resulting in a profit of US$11 million which includes the realisation of a
foreign currency translation reserve that was previously disclosed in other comprehensive income.
The proceeds were received on 06 November 2012.
Deferred tax assets
In June 2012, the group reassessed the recoverability of its deferred tax assets in Sappi Fine Paper
North America. A deferred tax asset of US$101 million was recognised largely in other comprehensive
income.
In June 2012, the group reassessed the recoverability of its deferred tax assets in Sappi Fine Paper
North America. A deferred tax asset of US$101 million was recognised largely in other comprehensive
income.
Other current liabilities
Other current liabilities were reduced by payments of liabilities relating to restructuring costs
and accruals.
Other current liabilities were reduced by payments of liabilities relating to restructuring costs
and accruals.
14
8. Segment information
Quarter
ended
Sept 2012
Metric tons
(000’s)
Quarter
ended
Sept 2011
Metric tons
(000’s)
Year
ended
Sept 2012
Metric tons
(000’s)
Year
ended
Sept 2011
Metric tons
(000’s)
Sales volume
Fine Paper –
Fine Paper –
North America
369
379
1,400
1,436
Europe
896
942
3,507
3,845
Total
1,265
1,321
4,907
5,281
Southern Africa –
Pulp and paper
423
428
1,676
1,700
Forestry
292
229
1,122
917
Total
1,980
1,978
7,705
7,898
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
Sales
Fine Paper –
Fine Paper –
North America
377
395
1,438
1,520
Europe
826
942
3,350
3,965
Total
1,203
1,337
4,788
5,485
Southern Africa –
Pulp and paper
361
430
1,475
1,721
Forestry
21
20
84
80
Total
1,585
1,787
6,347
7,286
Operating profit excluding special items
Fine Paper –
Fine Paper –
North America
42
34
94
129
Europe
45
5
133
68
Total
87
39
227
197
Southern Africa
33
41
178
199
Unallocated and eliminations
(1)
(2)
–
(2)
8
Total
118
80
403
404
Special items – losses (gains)
Fine Paper –
Fine Paper –
North America
2
(6)
7
(7)
Europe
(42)
23
(45)
139
Total
(40)
17
(38)
132
Southern Africa
3
105
25
136
Unallocated and eliminations
(1)
(5)
46
(5)
50
Total
(42)
168
(18)
318
Segment operating profit (loss)
Fine Paper –
Fine Paper –
North America
40
40
87
136
Europe
87
(18)
178
(71)
Total
127
22
265
65
Southern Africa
30
(64)
153
63
Unallocated and eliminations
(1)
3
(46)
3
(42)
Total
160
(88)
421
86
(1) Includes the group’s treasury operations and the self-insurance captive.
15
sappi
4th quarter results
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
EBITDA excluding special items
Fine Paper –
Fine Paper –
North America
63
53
173
203
Europe
92
62
329
300
Total
155
115
502
503
Southern Africa
57
67
271
309
Unallocated and eliminations
(1)
(1)
1
(1)
9
Total
211
183
772
821
Segment assets
Fine Paper –
Fine Paper –
North America
919
908
919
908
Europe
1,776
1,889
1,776
1,889
Total
2,695
2,797
2,695
2,797
Southern Africa
1,605
1,574
1,605
1,574
Unallocated and eliminations
(1)
20
51
20
51
Total
4,320
4,422
4,320
4,422
(1) Includes the group’s treasury operations and the self-insurance captive.
16
Reconciliation of EBITDA excluding special items and operating profit excluding special items to
segment operating profit (loss) and profit (loss) for the period
segment operating profit (loss) and profit (loss) for the period
(1)
Special items cover those items which management believe are material by nature or amount to the
operating results and require separate disclosure.
operating results and require separate disclosure.
Quarter
ended
Sept 2012
US$ million
Quarter
ended
Sept 2011
US$ million
Year
ended
Sept 2012
US$ million
Year
ended
Sept 2011
US$ million
EBITDA excluding special items
211
183
772
821
Depreciation and amortisation
(93)
(103)
(369)
(417)
Operating profit excluding special
items
items
118
80
403
404
Special items – gains (losses)
42
(168)
18
(318)
Plantation price fair value
adjustment
adjustment
9
–
(15)
(16)
Net restructuring provisions
3
(67)
2
(135)
(Loss) profit on disposal of
property, plant and equipment
property, plant and equipment
(3)
1
4
1
Profit on disposal of investment
11
–
11
–
Profit on non-current assets
held for sale
held for sale
48
–
48
–
Impairments of assets and
investments
investments
(13)
(98)
(10)
(167)
Black Economic Empowerment
charge
charge
–
(2)
(3)
(5)
Insurance recoveries
–
–
–
10
Fire, flood, storm and related
events
events
(13)
(2)
(19)
(6)
Segment operating profit (loss)
160
(88)
421
86
Net finance costs
(37)
(56)
(283)
(307)
Profit (loss) before taxation
123
(144)
138
(221)
Taxation
(16)
17
(34)
(11)
Profit (loss) for the period
107
(127)
104
(232)
Reconciliation of segment assets
to total assets
to total assets
Segment assets
4,320
4,422
4,320
4,422
Deferred taxation
154
45
154
45
Cash and cash equivalents
645
639
645
639
Other current liabilities
1,023
1,182
1,023
1,182
Taxation payable
26
20
26
20
Total assets
6,168
6,308
6,168
6,308
(1)
In compliance with the U.S. Securities Exchange Commission (“SEC”) rules relating to “Conditions for Use of Non-GAAP
Financial Measures”, we have reconciled both operating profit excluding special items and EBITDA excluding special items
to profit (loss) for the period, rather than operating profit (loss).
to profit (loss) for the period, rather than operating profit (loss).
17
sappi
4th quarter results
We use operating profit excluding special items and EBITDA excluding special items as internal measures of performance to
benchmark and compare performance, both between our own operations and as against other companies. Operating profit
excluding special items and EBITDA excluding special items are used as measures by the group, together with measures of
performance under IFRS, to compare the relative performance of operations in planning, budgeting and reviewing the
performances of various businesses. We believe operating profit excluding special items and EBITDA excluding special items
are useful measures of financial performance in addition to profit for the period, operating profit and other profitability
measures under IFRS because it facilitates operating performance comparisons from period to period and company to
company. For these reasons, we believe operating profit excluding special items, EBITDA excluding special items and other
similar measures are regularly used by the investment community as a means of comparison of companies in our industry.
benchmark and compare performance, both between our own operations and as against other companies. Operating profit
excluding special items and EBITDA excluding special items are used as measures by the group, together with measures of
performance under IFRS, to compare the relative performance of operations in planning, budgeting and reviewing the
performances of various businesses. We believe operating profit excluding special items and EBITDA excluding special items
are useful measures of financial performance in addition to profit for the period, operating profit and other profitability
measures under IFRS because it facilitates operating performance comparisons from period to period and company to
company. For these reasons, we believe operating profit excluding special items, EBITDA excluding special items and other
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 operating profit excluding special items and EBITDA excluding special items
differently, so making comparisons among companies on this basis should be done very carefully. Operating profit excluding
special items and EBITDA excluding special items are not measures of performance under IFRS and should not be
considered in isolation or construed as a substitute for operating profit or profit for the period as an indicator of the
company’s operations in accordance with IFRS.
differently, so making comparisons among companies on this basis should be done very carefully. Operating profit excluding
special items and EBITDA excluding special items are not measures of performance under IFRS and should not be
considered in isolation or construed as a substitute for operating profit or profit for the period as an indicator of the
company’s operations in accordance with IFRS.
18
Supplemental information
Reconciliation of net debt to interest-bearing borrowings
Sept 2012
US$ million
Sept 2011
US$ million
Interest-bearing borrowings
2,624
2,739
Non-current interest-bearing borrowings
2,358
2,289
Current interest-bearing borrowings
261
449
Bank overdraft
5
1
Cash and cash equivalents
(645)
(639)
Net debt
1,979
2,100
Exchange rates
Sept
2012
Jun
2012
Mar
2012
Dec
2011
Sept
2011
Exchange rates:
Period end rate: US$1 = ZAR
Period end rate: US$1 = ZAR
8.3096
8.1650
7.6725
8.0862
8.0963
Average rate for the Quarter: US$1 = ZAR
8.2567
8.1229
7.7511
8.0915
7.1501
Average rate for the YTD: US$1 = ZAR
8.0531
7.9885
7.9237
8.0915
6.9578
Period end rate: €1 = US$
1.2859
1.2660
1.3344
1.2948
1.3386
Average rate for the Quarter: €1 = US$
1.2514
1.2838
1.3116
1.3482
1.4126
Average rate for the YTD: €1 = US$
1.2988
1.3145
1.3299
1.3482
1.3947
19
sappi
4th quarter results
Sappi ordinary shares (JSE: SAP)
US Dollar share price conversion
USD
30
Sep
08
31
Dec
08
31
Mar
09
30
Sep
09
30
Jun
09
30
Jun
10
31
Dec
09
31
Mar
10
30
Sep
10
31
Mar
11
31
Dec
10
30
Jun
11
30
Sep
11
31
Dec
11
31
Mar
12
22
Oct
12
30
Jun
12
30
Sep
12
0
1
2
3
4
5
6
7
8
ZAR
30
Sep
08
31
Dec
08
31
Mar
09
30
Sep
09
30
Jun
09
30
Jun
10
31
Dec
09
31
Mar
10
30
Sep
10
31
Mar
11
31
Dec
10
30
Jun
11
30
Sep
11
31
Dec
11
31
Mar
12
22
Oct
12
30
Jun
12
30
Sep
12
0
10
20
30
40
50
60
20
Sappi has a primary listing on the JSE Limited and a secondary listing on
the New York Stock Exchange
sappi limited
(Registration number 1936/008963/06)
Issuer Code: SAVVI
JSE Code: SAP
ISIN: ZAE000006284
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.
duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: November 08, 2012
SAPPI LIMITED,
By: /s/ S.R. Binnie
Name: S.R.
Binnie
Title: Chief Financial Officer