2006 20-F - Sappi

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PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. ITEM 3. KEY INFORMATION Selected Financial Data The selected financial data set forth below has been derived from our Group annual financial statements and are qualified by reference to, and should be read in conjunction with, our Group annual financial statements and the notes thereto, which are included elsewhere in this Annual Report, and “Item 5—Operating and Financial Review and Prospects”. We prepare our Group annual financial statements according to International Financial Reporting Standards. There are differences between these principles and those applied in the United States. You can read about the principal differences in note 35 to our Group annual financial statements included elsewhere in this Annual Report. 1 Year Ended September 2006 2005 (US$ million, except per share data) Consolidated Income Statement Data: International Financial Reporting Standards: Sales (1) ...................................................... 4,941 5,018 Operating profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 (109 ) Net (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4 ) (184 ) Basic (loss) per share (US cents) ............................... (2 ) (81 ) Diluted (loss) per share (US cents)............................. (2 ) (81 ) Dividends per share (US cents) (3) ............................... 30 30 Year Ended September 2006 2005 2004 2003 2002 (US$ million, except per share data) United States GAAP: Sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,941 5,018 4,728 4,299 3,729 Operating profit (loss) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . 21 (235) 120 272 402 Extraordinary items.............................. — — — — 6 Net (loss) profit (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (116) (345) 46 148 237 Basic (loss) earnings per share (US cents) (2) . . . . . . . . . (52) (154) 20 65 102 Diluted (loss) earnings per share (US cents) (2) . . . . . . . (52) (154) 20 64 102 Dividends per share (US cents) (3) .................. 30 30 30 29 28
2 Year Ended September 2006 2005 (US$ million) Consolidated Balance Sheet Data: International Financial Reporting Standards: Total assets................................................... 5,517 5,889 Operating assets (4) ............................................. 5,219 5,452 Total long-term borrowings..................................... 1,634 1,600 Shareholders’ equity........................................... 1,386 1,589 Year Ended September 2006 2005 2004 2003 2002 (US$ million) United States GAAP: Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,370 5,808 6,419 6,090 4,931 Operating assets (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,066 5,369 5,889 5,465 4,672 Total long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . 1,734 1,643 1,904 1,869 1,559 Shareholders’ equity (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,356 1,591 1,979 1,908 1,581 Other Information: (1) (2) Year Ended September 2006 2005 (US$ million, except number of shares data) International Financial Reporting Standards: EBITDA (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591 381 Weighted average number of ordinary shares in issue (in million). . . . . . 226.2 225.8 Year Ended September 2006 2005 2004 2003 2002 (US$ million, except number of shares data) United States GAAP: EBITDA (2)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 226 570 656 745 Weighted average number of ordinary shares in issue (in million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225.3 224.7 225.0 227.6 228.8 Sales are defined in note 2 to our Group annual financial statements included elsewhere in this Annual Report. In 2005, stock compensation of US$12 million was included in the US GAAP equity reconciliation and has been removed. An amount of US$13 million was charged to the 2005 profit and loss accounts in respect of the adoption of FAS 123R. This comprises a US$10 million charge due to the adoption of IFRS 2 and an additional US$3 million being the extra charge as a result of the earlier effective date of FAS 123R compared to IFRS 2. The effect is a change of US GAAP basic and diluted earnings per share from US 148 cents to US 154 cents per share. For a more detailed explanation see note 35 to our Group annual financial statements included elsewhere in this Annual Report. (3) The dividends per share were, in each case, declared after the end of the year indicated. For further information on our dividend policy, see “Item 8—Financial Information-Dividend Policy”. (4) Operating assets are defined in note 3 to our Group annual financial statements included elsewhere in this Annual Report. (5) 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
Page 1 and 2: As filed with the Securities and Ex
Page 3 and 4: OUR USE OF TERMS AND CONVENTIONS IN
Page 5: FORWARD-LOOKING STATEMENTS In order
Page 9 and 10: Risk Factors In addition to other i
Page 11 and 12: New technologies or changes in cons
Page 13 and 14: Several customers account for a sig
Page 15 and 16: Maintain a global presence. One of
Page 17 and 18: Major Product Categories Descriptio
Page 19 and 20: market share was negatively affecte
Page 21 and 22: The chart below represents the oper
Page 23 and 24: The following table sets forth appr
Page 25 and 26: Paper North America’s on-line fin
Page 27 and 28: of 860,000 metric tonnes of triple-
Page 29 and 30: a capacity of 60,000 metric tonnes
Page 31 and 32: customers use our products in the p
Page 33 and 34: (1) The following table sets forth
Page 35 and 36: The mill markets paper and excess p
Page 37 and 38: Pulp Sappi Fine Paper North America
Page 39 and 40: equired for its operations. Sappi F
Page 41 and 42: • The National Environmental Mana
Page 43 and 44: PROPERTY, PLANT AND EQUIPMENT For a
Page 45 and 46: ITEM 5. OPERATING AND FINANCIAL REV
Page 47 and 48: ) Movement in market prices for our
Page 49 and 50: The recent price history for benchm
Page 51 and 52: Demand from all of the market segme
Page 53 and 54: Raw Material and Other Input Costs
Page 55 and 56: The exchange rate impact on raw mat
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Our South African businesses have f
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• Any debtors or creditors not in
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Year Ended September 2006 Compared
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US$28 million. Decreased selling pr
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enefit of the reversal of the Usutu
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accounting mismatch, as a result of
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South African residents, who are na
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The increase of US$11 million in fi
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June 2010. The OeKB A tranche and t
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impact on liquidity varies accordin
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Contractual Obligations We have var
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mill is located in Nanchang, the ca
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product pricing, raw material costs
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flows of the related underlying exp
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increases, health care cost trends,
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alance sheet date. Risks, uncertain
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If the Group had applied IFRS 3 ret
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IFRS. The Group did not apply the e
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Where BEE equity credentials are ob
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Environmental Matters We operate in
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Klaas de Kluis (70) (independent).
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Mark Richard Thompson (54) BCom, BA
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Audit Committee An Audit Committee
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estructuring initiatives that occur
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Levies Act, was paid via Internal R
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Pursuant to the Companies Amendment
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on Restitution of Land Rights and a
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(“the Depositary”) with respect
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• any proposal concerning the ado
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Voting Rights Subject to any rights
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equest not less than one-twentieth
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Financial Assistance The Bill enhan
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At the Annual General Meeting of Sh
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African shareholders will be paid t
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purpose of Capital Gains Tax in Sou
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Distributions. The gross amount of
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US Federal Income Tax Consequences
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PART II ITEM 13. DEFAULTS, DIVIDEND
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the controls may become inadequate
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ITEM 16E. PURCHASES OF EQUITY SECUR
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4.10 Credit Facility, dated May 7,
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SAPPI Group Annual Financial Statem
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SAPPI GROUP INCOME STATEMENT for th
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SAPPI GROUP CASH FLOW STATEMENT for
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1. BUSINESS SAPPI NOTES TO THE GROU
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SAPPI NOTES TO THE GROUP ANNUAL FIN
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4.2 Employee cost SAPPI NOTES TO TH
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SAPPI CONDENSED COMPANY BALANCE SHE
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SAPPI CONDENSED COMPANY STATEMENT O
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5. OTHER INCOME 2006 2005 ZAR milli
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2006 20-F - Sappi

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