Our performance in 2009 - Sappi

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Share price performance 2009 annual report 61 During the year, we increased our authorised share capital as a result of the rights issue and the issuance of shares to M-real in part payment for the acquisition. We issued 286.9 million shares in terms of the rights offer and 11.2 million shares to M-real. Please refer to the Directors’ report for further detail on the changes in share capital during the year. The share prices in the graph above have been revised by an adjustment factor of 1.58 to reflect the impact of the rights offer. Please refer to earnings per share above and also note 7 to the annual financial statements for further details on this adjustment factor. The group’s equity increased by US$189 million during 2009 from US$1,605 million at the end of September 2008 to US$1,794 million at the end of September 2009. This increase arose as follows: Equity – September 2008 US$ million 1,605 Rights offer – net proceeds 544 Shares issued to M-real (in part payment of the acquisition) 45 Dividend in respect of fiscal 2008 (37) Loss for the year (177) Actuarial loss on pension funds (net of tax) (197) Other 11 Equity – September 2009 1,794 The actuarial loss on pension funds arose mainly as a result of an unusually large drop in discount rates, which caused pension fund liabilities to increase by more than the growth in the underlying asset portfolio. We do not expect this to result in a significant increase in the group’s contributions to its pension funds for the next few years as the contribution rates are set using a funding basis as opposed to a (more conservative) accounting basis, minimum statutory recovery rates (pace of funding) in certain countries have recently been eased and the returns of the underlying equity asset portfolios are expected to improve on the 2009 performance, thereby helping to close deficits. Conclusion On the operating front, we have taken a number of actions to improve our business. Although our finance costs have increased, we have a strong liquidity position. We expect improved operating results in 2010 and will continue to focus on generating cash and reducing our debt. M R Thompson chief financial officer 04 December 2009 our performance
62 Five-year review for the year ended September 2009 September September September September September 2009 2008 2007 2006 2005** US$ million US$ million US$ million US$ million US$ million Income statement Sales 5,369 5,863 5,304 4,941 5,018 Operating profit excluding special items 33 366 313 91 83 Special items* losses (gains) 106 52 (70) (34) 192 Operating (loss) profit (73) 314 383 125 (109) Net finance costs 145 126 134 130 80 (Loss) profit before taxation (218) 188 249 (5) (189) Taxation (benefit) charge (41) 86 47 (1) (5) (Loss) profit for the year (177) 102 202 (4) (184) Balance sheet Total assets 7,297 6,109 6,344 5,517 5,889 Non-current assets 4,867 4,408 4,608 3,997 4,244 Current assets 2,430 1,701 1,736 1,500 1,645 Assets held for sale – – – 20 – Current liabilities 1,841 1,926 1,916 1,666 1,753 Shareholders’ equity 1,794 1,605 1,816 1,386 1,589 Net debt 2,576 2,405 2,257 2,113 2,008 Capital employed 4,370 4,010 4,073 3,499 3,597 Cash flow Cash generated from operations 432 623 585 396 569 Decrease (increase) in working capital 152 1 60 (17) (30) Finance costs paid (107) (139) (183) (164) (162) Finance revenue received 26 13 21 26 35 Taxation paid (5) (70) (27) (13) (43) Dividends paid (37) (73) (68) (68) (68) Cash retained from operating activities 461 355 388 160 301 Capital expenditure (gross) 175 505 458 303 345 Cash effects of financing activities 707 49 98 (21) (37) EBITDA excluding special items (1) 431 740 688 483 507 Statistics Number of ordinary shares (millions) In issue at year end (2) 515.7 229.2 228.5 227.0 225.9 Basic weighted average number of shares in issue during the year (2,4) 482.6 362.2 360.6 358.0 357.4 Per share information (US cents per share) Basic (loss) earnings (4) (37) 28 56 (1) (51) Diluted (loss) earnings (4) (37) 28 55 (1) (51) Headline (loss) earnings (4) (21) 60 52 (7) 13 Diluted headline (loss) earnings (4) (21) 59 51 (7) 13 Ordinary dividend declared (3) – 16 32 30 30 Net asset value 348 700 795 611 703 Ordinary dividend cover (times) (3) – 2.8 2.8 – – Profitability ratios (%) Operating profit excluding special items to sales 0.6 6.2 5.9 1.8 1.7 EBITDA excluding special items to sales 8.0 12.6 13.0 9.8 10.1 Operating profit excluding special items to capital employed (ROCE) 0.8 9.1 8.3 2.6 2.3 (Loss) profit to average ordinary shareholders’ equity (ROE) (10.4) 6.0 12.6 (0.3) (10.4)
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SAPPI GROUP (Sappi Limited) ANNUAL
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• the impact of future investment
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Our reporting strategy As a leading
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1 2 North America 2 4 1 San Francis
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4 Our performance in 2009 Financial
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6 Our performance against financial
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8 Our performance against sustainab
Page 15 and 16: 10 Our performance against sustaina
Page 17 and 18: 12 Our performance against sustaina
Page 19 and 20: 14 Our sustainable business cycle T
Page 21 and 22: 16 Our products 1 2 3 Coated paper
Page 23 and 24: Our objectives for 2010 Improve pro
Page 25 and 26: 20 Letter to shareholders continued
Page 27 and 28: 22 Letter to shareholders continued
Page 29 and 30: 24 Interview with Ralph Boëttger,
Page 31 and 32: 26 Our leadership Independent non-e
Page 33 and 34: 28 Our leadership continued Indepen
Page 35 and 36: 30 Review of operations Sappi Fine
Page 37 and 38: 32 Review of operations | Sappi Fin
Page 39 and 40: 34 Review of operations | Sappi Fin
Page 41 and 42: 36 Review of operations Sappi Fores
Page 43 and 44: 38 Review of operations | Sappi For
Page 45 and 46: 40 Value added statement for the ye
Page 47 and 48: 42 Chief financial officer’s repo
Page 65: 60 Chief financial officer’s repo
Page 69 and 70: 64 Share statistics at September 20
Page 72 and 73: Risk management Global economic con
Page 74 and 75: Risk philosophy The Sappi Limited b
Page 76 and 77: Independence Accountability Given t
Page 78 and 79: Fairness Social responsibility Lege
Page 80 and 81: 2009 annual report 75 Induction and
Page 82 and 83: 2009 annual report 77 employment of
Page 84 and 85: 2009 annual report 79 board to esta
Page 86 and 87: As part of continuous improvement t
Page 88 and 89: Compensation report In 2009, the co
Page 90 and 91: Balance between fixed and variable
Page 92 and 93: Executive directors (1) Details of
Page 94 and 95: 2009 annual report 89 R J Boëttger
Page 96 and 97: 2009 annual report 91 Board Committ
Page 98 and 99: Auditor’s report Independent audi
Page 100 and 101: Audit committee report The legal re
Page 102 and 103: Directors’ report for the year en
Page 104 and 105: Litigation We become involved from
Page 106 and 107: Group balance sheet at September 20
Page 108 and 109: Group statement of changes in equit
Page 110 and 111: Group balance sheet in Rands conven
Page 112 and 113: Notes to the group annual financial
Page 114 and 115: • Financial assets and financial
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2.2.10 Non-current assets held for
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(iii) Dividends Dividends are recog
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uyer and seller) multiple used in o
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2.4 Adoption of accounting standard
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Corporate and eliminations Group 20
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2009 annual report US$ million 2009
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6. Taxation (benefit) charge contin
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7. Earnings per share and headline
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2009 annual report 9. Property, pla
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US$ million 2009 annual report 2009
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13. Joint ventures and associates*
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16. Trade and other receivables con
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2009 annual report 17. Ordinary sha
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20. Interest-bearing borrowings con
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2009 annual report 20. Interest-bea
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22. Provisions continued September
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27. Post-employment benefits - pens
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27. Post-employment benefits - pens
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2009 annual report 2009 2008 27. Po
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2009 annual report 28. Post-employm
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28. Post-employment benefits - othe
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29. Share-based payments continued
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2009 annual report 29. Share-based
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2009 annual report 29. Share-based
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30. Financial instruments continued
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2009 annual report 30. Financial in
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2009 annual report 31. Related-part
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2009 annual report 33. Environmenta
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Company auditor’s report for the
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Condensed Sappi Limited company bal
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2009 annual report Notes to the con
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Glossary General definitions bleach
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not be comparable with similarly ti
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No issue and/or sale of these share
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Notes Confirmation of appointment o
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Proxy form for annual general meeti
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forward-looking statements Certain
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