2008 Annual report - Sappi

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Our business Sappi is a global paper and pulp group. We are a leading producer of coated fine paper widely used in books, brochures, magazines, catalogues and many other print applications. We are also the world’s largest producer of chemical cellulose, used primarily in the manufacture of viscose fibre, acetate tow and consumer and pharmaceutical products. In addition, we produce newsprint, uncoated graphic and business papers, premium quality packaging papers, a range of coated speciality papers and a range of paper grade pulp. Sappi Limited was founded and incorporated in South Africa in 1936. Key facts Manufacturing operations on four continents Sales in over 100 countries 15,200 employees worldwide Paper production of 5.2 million tons per annum Chemical cellulose production of 800,000 tons per annum Paper pulp production of 2.8 million tons per annum 2
sappi Our performance The group’s operating performance improved during the year. However, operating profit excluding special items in the second half of the year was flat compared to the second half of 2007, reflecting worsening macro-economic conditions and rising input costs. ZAR convenience translation September September September September 2008 2007 2008 2007 US$ million US$ million ZAR million (3) ZAR million (3) Sales 5,863 5,304 43,559 38,051 Operating profit 314 383 2,333 2,748 Special items (gains) losses 52 (70) 386 (502) Operating profit excluding special items 366 313 2,719 2,246 EBITDA excluding special items (1) 740 688 5,498 4,936 Profit for the year 102 202 758 1,449 US cents US cents SA cents (3) SA cents (3) Basic earnings per share 45 89 334 638 Dividend per share (2) 16 32 156 209 Ordinary shareholders' interest per share 700 795 5,655 5,461 Achieved Achieved September September 2008 2007 Operating profit to sales (%) 5.4 7.2 Operating profit excluding special items to sales (%) 6.2 5.9 EBITDA excluding special items to sales 12.6 13.0 Operating profit excluding special items to capital employed (ROCE) (%) 9.1 8.3 Return on equity (ROE) (%) 6.0 12.6 Net debt to total capitalisation 0.60 0.55 Cash interest cover (times) 4.9 3.8 (1) Refer to the five-year review for a reconciliation of profit (loss) for the year to operating profit excluding special items, and EBITDA excluding special items. (2) The dividends for both financial years were declared subsequent to year end. (3) The translation to South African Rand from United States Dollars has been calculated at an average rate for the year of US$1 to ZAR7.4294 (September 2007: US$1 to ZAR7.1741), except for dividends which have been translated at the rate of exchange at the date of declaration. Note: Definitions for various terms and ratios used above are included in the Glossary on page 188. Financial summary Sales increased 11% to US$5.9 billion Operating profit excluding special items of US$366 million (2007: US$313 million) Special items; a net pre-tax charge of US$52 million Basic EPS of 45 US cents (unfavourably impacted by special items of 30 US cents) Input costs remained high, including wood, energy and chemical costs Net debt of US$2.4 billion, up US$148 million mainly as a result of expenditure on the Saiccor expansion Major strategic achievements: – Announced acquisition of M-real’s coated graphic paper business for €750 million – Saiccor Mill expansion commissioned Re-based dividend of 16 US cents declared (2007: 32 US cents) // 2008 Annual report 3
Page 1 and 2: annual report 2008
Page 3: sappi Our report in overview In pro
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Page 9 and 10: sappi Our score on the DJSI World D
Page 11 and 12: sappi People continued Our commitme
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Page 17 and 18: sappi Ideas that matter Print remai
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Chief financial officer’s report
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Five year review Not restated for I
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Share statistics at September 2008
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Corporate governance We are committ
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Corporate governance // continued E
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Corporate governance // continued A
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Corporate governance // continued r
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Compensation report Compensation co
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Annual financial statements for the
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Directors’ approval The directors
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Directors’ report // continued fo
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Group income statement for the year
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Group cash flow statement for the y
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Group income statement in Rands con
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Group cash flow statement in Rands
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Notes to the group annual financial
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Condensed Sappi Limited company inc
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Condensed Sappi Limited company cas
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Notes to the condensed Sappi Limite
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Glossary General definitions bleach
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Glossary // continued Non-GAAP fina
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Notice to shareholders // continued
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Notice to shareholders // continued
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Shareholder’s diary Annual genera
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Notes to proxy The form of proxy mu
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Notes 1. To be effective, this form
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Notes 1. To be effective, this form
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www.sappi.com
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2008 Annual report - Sappi

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