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Comparing fiscal 2009 with fiscal 2008<br />
Sales volume in fiscal 2009 declined by 18% compared to fiscal 2008 due to a significant weakening<br />
in demand for coated paper and pulp. The decline in demand was the result of a severe reduction in<br />
economic activity and a resulting decline in demand for advertising (a major driver for coated woodfree<br />
paper consumption). Average selling prices decreased from US$ 1,071 / tonne in fiscal 2008 to<br />
US$ 1,016 / tonne in fiscal 2009.<br />
Sappi Fine Paper Europe<br />
Comparing fiscal 2010 with fiscal 2009<br />
Market conditions improved for all Sappi Fine Paper Europe products during fiscal 2010 compared<br />
to the fiscal 2009 year. In fiscal 2010, sales volumes, including the Acquired Business for twelve months,<br />
were 28% higher than the sales volume in fiscal 2009, which included nine months of the Acquired<br />
Business. Excluding the sales volume of the Acquired Business, sales volume for fiscal 2010 increased<br />
by 20% compared to fiscal 2009.<br />
Despite the improvement in market conditions, selling prices only started rising in the last six<br />
months of fiscal 2010. The average selling price in euro terms for the last quarter of fiscal 2010 was e 753<br />
/tonne compared to an average selling price of e 677 / tonne in the last quarter of fiscal 2009.<br />
Overall, average selling prices during fiscal 2010, in both euro and US dollar terms were lower than<br />
those achieved in fiscal 2009. Average realized prices in euro terms decreased from e 717 / tonne in<br />
fiscal 2009 to e 702 / tonne in fiscal 2010. Average selling prices realized in US dollar terms in fiscal 2009<br />
were US$ 979 / tonne compared to US$ 958 / tonne for fiscal 2010.<br />
Comparing fiscal 2009 with fiscal 2008<br />
Market conditions were exceptionally weak during fiscal 2009 compared to the fiscal 2008 year. In<br />
fiscal 2009, sales volumes, including the Acquired Business, were approximately 116% of the sales<br />
volume for fiscal 2008. Volumes excluding the Acquired Business declined by approximately 20%<br />
compared to the 2008 fiscal year, as a result of a decline in demand for coated paper in the region’s<br />
major markets.<br />
Average selling prices realized in US dollar terms in fiscal 2009 were US$ 979 per tonne compared<br />
to US$ 1,068 per tonne for fiscal 2008. This reduction in US dollar price realization was due to the<br />
strengthening of the US dollar against the euro from an average of US$1.51 / euro for fiscal 2008 to<br />
US$1.37 / euro for fiscal 2009. Average realized prices in euro terms increased from e 709 per tonne in<br />
2008 to e 717 per tonne in fiscal 2009.<br />
Sappi Southern Africa<br />
Comparing fiscal 2010 with fiscal 2009<br />
Sales from the southern African pulp and paper operations (Sappi Chemical Cellulose and Sappi<br />
Paper and Paper Packaging) increased by 32% in US dollar terms or 10% in Rand terms in fiscal 2010<br />
(US$ 1,488 million; ZAR 11,148 million) compared to fiscal 2009 (US$ 1,124 million; ZAR 10,131 million).<br />
The increase in sales in US dollar terms was largely due to the difference in average exchange rates<br />
used to translate Rand sales to US dollar in fiscal 2009 (ZAR/USD 9.01) and 2010 (ZAR/USD 7.49).<br />
Sales volumes for the southern African pulp and paper operations increased by 5% in fiscal 2010<br />
compared to fiscal 2009. Demand for chemical cellulose products was significantly better in fiscal 2010<br />
than during fiscal 2009 and sales volume for the Sappi Chemical Cellulose business increased by 18%<br />
compared to fiscal 2009. The sales volumes for the Sappi Paper and Paper Packaging business declined<br />
by 3% compared to fiscal 2009, despite market conditions and demand being better than in fiscal 2009.<br />
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