SAPPI LTD (SAP) 6-K

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The tables below highlight certain operational and financial metrics of the pro forma combined group (being Sappi and the Acquired Business) post the completion of the Transaction, based on the financial statements of Sappi for the year ended 30 September 2007 and Carve-out Financials of the Acquired Business for the year ended 31 December 2007. The pro forma operational metrics represent the summation of the historical operational metrics for Sappi and the Acquired Business, without adjustment. The pro forma financial information is set out in more detail in section 12 and Annexure 3 of this Circular. Pro forma financial information is presented for informational purposes only, and does not purport to represent what Sappi’s actual results of operations or financial condition would have been had the Transaction occurred as of 1 October 2006, nor are they necessarily indicative of future results of operations or financial condition. In addition to other matters noted in Section 12 and Annexure 3, the pro forma financial statements do not reflect the effect of: • anticipated synergies and efficiencies associated with combining the Sappi Group and the Acquired Business due to the adoption of best practices; • efficiencies in the permanent funding structure; and • movements in the US Dollar / Euro exchange rate. In addition, the pro forma financial statements do not give pro forma effect to the long term supply agreements with M-real for wood, pulp and other services and the transitional marketing agreements for the outputs of the Husum PM8 machine and the Äänekoski PM2 machine. 19
Description Sappi 2 Acquired Business 3 Adjustments Pro forma Percentage Change Operational metrics Mills 14 4 - 18 29 % Annual Capacity - Tonnes (’000) 4,250 1,875 - 6,125 44 % Staff 9,480 2,111 - 11,591 22 % Financial Information USD million Revenue 5,304 1,833 - 7,137 35 % Operating profit 383 125 29 537 40 % Profit before tax 249 109 4 362 45 % Profit / (loss) for the period 202 91 3 296 47 % EBITDA4 758 221 - 979 29 % 2 Operational metrics and Financial information for Sappi has been extracted from, or can be derived from, Sappi’s audited financials for the year ended September 2007. 3 Operational metrics and Financial information for the Acquired Business has been extracted from, or can be derived from, the M-real’s graphic paper business combined financial statements for the year ended 31 December 2007. M-real’s graphic paper business combined financial statements have been prepared on a full carve-out basis in accordance with IFRS as issued by the IASB, and are presented in Euros. Financial information for the Acquired Business has been converted from Euros into US Dollars using the average exchange rate for the year ended 31 December 2007 of €1 to US$1.4566. 4 EBITDA represents earnings before interest (net finance costs), taxation, depreciation and amortisation. Net finance costs include: gross interest paid; interest received; interest capitalised; net foreign exchange gains; and net fair value adjustments on interest rate financial instruments. 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, 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 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 amortisation 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 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. 20
Page 1 and 2: SAPPI LTD (SAP) 6-K Current report
Page 3 and 4: INCORPORATION BY REFERENCE Sappi Li
Page 6 and 7: CERTAIN FORWARD-LOOKING STATEMENTS
Page 8 and 9: South African legal advisor to Sapp
Page 10 and 11: TABLE OF CONTENTS Page CORPORATE IN
Page 12 and 13: ACTION REQUIRED BY SAPPI SHAREHOLDE
Page 14 and 15: IMPORTANT DATES/TIMES SALIENT DATES
Page 16 and 17: “CSDP” “CWF” “Deloitte So
Page 18 and 19: “Sappi Papier Holding” “Sappi
Page 20 and 21: CURRENCY TRANSLATION This Circular
Page 24 and 25: Reconciliation from profit for the
Page 26 and 27: 3. PRINCIPAL TERMS AND CONDITIONS O
Page 28 and 29: • dispose of any of the Settlemen
Page 30 and 31: There is no accrued taxation, which
Page 32 and 33: (d) all of the know-how, brands, or
Page 34 and 35: The map below sets out the location
Page 36 and 37: Name Age Position Experience Martti
Page 38 and 39: 5. FINANCIAL INFORMATION ON THE ACQ
Page 40 and 41: The registered address of Metsälii
Page 42 and 43: Pro forma financial effects for the
Page 44 and 45: G. Financial information for Sappi
Page 46 and 47: 13.3. Major Shareholders prior to t
Page 48 and 49: Dr D.C Cronje was appointed in Janu
Page 50 and 51: Executive Directors RJ Boëttger (3
Page 52 and 53: 14.2.2. Changes in executive direct
Page 54 and 55: 2007 2006 Direct Interests Indirect
Page 56 and 57: Other than described above, there a
Page 58 and 59: 21. DIRECTORS’ RESPONSIBILITY STA
Page 60 and 61: 25. EXCHANGE CONTROL AUTHORITY Subj
Page 62 and 63: • Audited Annual Financial Statem
Page 64 and 65: HISTORIC FINANCIAL INFORMATION RELA
Page 66 and 67: COMBINED STATEMENTS OF CASH FLOWS F
Page 68 and 69: Note 1• Background and basis of p
Page 70 and 71: The translation of foreign currency
Page 72 and 73:
Goodwill that arose prior to 1 Janu
Page 74 and 75:
Revenue recognition Revenue compris
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Application of new and amended IFRS
Page 78 and 79:
Liquidity risk is defined as the ri
Page 80 and 81:
Other operating expenses include al
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Note 7•Personnel data The Company
Page 84 and 85:
Note 9•Financial income and expen
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The Company has offset deferred tax
Page 88 and 89:
Note 12•Property, plant and equip
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Property, plant and equipment inclu
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Note 16•Cash and cash equivalents
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The Company expects to contribute E
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Note 20•Maturity of repayment and
Page 98 and 99:
Maturity of repayment and interest
Page 100 and 101:
Note 22•Other non-current liabili
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2. Interim Condensed Combined Finan
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INTERIM CONDENSED COMBINED CASH FLO
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NOTES TO THE INTERIM CONDENSED COMB
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A reconciliation of income tax expe
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Sales of goods to related parties d
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3. Interim condensed combined finan
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INTERIM CONDENSED COMBINED CASH FLO
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NOTES TO THE INTERIM CONDENSED COMB
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Depreciation of buildings and machi
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As of 31 December 2007 and 2006, cu
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ANNEXURE 2 INDEPENDENT REPORTING AC
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Opinion In our opinion, the combine
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Yours sincerely PRICEWATERHOUSECOOP
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The pro forma adjustments reflect t
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• anticipated synergies and effic
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(A) (B) Financial information for t
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(2) Adjustments to the equity balan
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ASSETS EUR’000 US$’000 Acquired
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UNAUDITED PRO FORMA INCOME STATEMEN
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Pro forma notes (1) Reflects the el
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* The number of shares in issue at
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Notes to the unaudited pro forma co
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Page 148 and 149:
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(2) (EUR54,970) has been reallocate
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We do not accept any responsibility
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ANNEXURE 5 MATERIAL LOANS RELATING
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(4) The financial covenant relates
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The fair value of non-current borro
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ADDITIONAL MATERIAL LOANS OF THE GR
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Directorships in the last five year
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David Charles Brink Age 69 Business
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Directorships in last five years Cu
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Directorships in last five years Fo
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Directorships in last five years Cu
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Experience Jan joined Sappi in 1992
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Experience Berry Wiersum joined Sap
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ANNEXURE 7 DETAILS ON THE SAPPI SHA
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SPECIAL RESOLUTION NUMBER 1 Increas
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Explanatory Note to Ordinary Resolu
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This Page Printed On Pink Paper Sap
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FORM OF DIRECTION FOR HOLDERS OF DE
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(Incorporated in the Republic of So
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TABLE OF CONTENTS Page REVISED LIST
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2.2 Background Sappi Limited was fo
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Where shareholders are required to
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6. INFORMATION RELATING TO THE DIRE
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6.4 Additional information pertaini
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No commissions are payable or have
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15. MATERIAL VENDORS There have not
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ANNEXURE A TRADING HISTORY OF SAPPI
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ANNEXURE B PRINCIPAL IMMOVABLE PROP
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ANNEXURE C APPOINTMENT, QUALIFICATI
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If any question arises at any meeti
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As at the termination of each annua
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At every annual general meeting of
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Human Resources committee The respo
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Risk management The Sappi Board rec
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Interest in contracts The Sappi Gro
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ANNEXURE E CAPITAL COMMITMENTS AND
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Westbrook Cogeneration Agreement: I
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SIGNATURE Pursuant to the requireme
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SAPPI LTD (SAP) 6-K

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