About this report

Letter to stakeholders and Q&A with CEO

Trail

Every trail we follow is shaped by people – the communities we serve, the teams we empower, and the values we uphold. At Sappi, we believe that sustainable progress begins with understanding local needs and investing in shared value.

Like the fox navigating snow-covered terrain, we move with agility and intent – alert to change, guided by experience, and grounded in ethical purpose. This instinctive adaptability mirrors our approach: making smart decisions swiftly, with courage and integrity, and always with safety foremost in mind.

The communities beyond our fence lines are places we are also proud to call home. Their prosperity is not only linked to our own – it is deeply valued and actively nurtured. Our social impact approach is collaborative. We partner with communities to jointly identify and leverage opportunities that support local needs while aligning with Sappi’s purpose. While each region has its own programmes, they share common themes – forestry-related activities, environmental protection and conservation, education, and community welfare.

Through targeted enterprise and supplier development (ESD) programmes, we support local businesses and foster inclusive economic growth. We maintain open, proactive dialogue with stakeholders to build trust and mutual understanding.

Internally, we invest in training, succession planning, and skills development to prepare our workforce for future demands. We manage reputation with care and uphold ethical standards in every decision – ensuring that our path is shaped by smart choices and ethical resolve, moving swiftly but never at the expense of safety or integrity.

Our people-centred approach strengthens our social licence to operate and reinforces our commitment to shared progress – with every step, we remain alert, responsive, and purposeful.

Our sustainable value proposition

Channel

A channel is more than a passage – it is a chosen course, shaped by intention and skill. As we begin the next phase of our Thrive strategy, we reflect on a journey steered with stamina, precision, and responsiveness. Like a gondolier navigating shifting waters, we have moved through capacity expansion, product realignment, and strategic repositioning – attuned to our environment and guided by purpose.

At Sappi, prosperity is not defined by profit alone. It is the ability to create enduring value – financial, social, and environmental. For shareholders, it means disciplined stewardship and operational excellence. For communities, it means investing in renewable resources and partnering for shared progress. For the planet, it means embracing sustainable solutions with eco-effective ingenuity.

Looking ahead, for the immediate future we return to our basics: sustaining financial health, optimising asset utilisation, cash generation and managing costs. While demand for graphic papers continues its structural decline, our focus on market-share growth is delivering results and reinforcing our competitive position. In the dissolving wood pulp (DWP) segment, we remain cautiously optimistic. Despite global headwinds, the long-term outlook is positive, and we are well-positioned to respond with agility and clarity.

In a resource-constrained world, prosperity flows through the channels we choose – those defined by resilience, ethical resolve, and collective strength. As we navigate toward our next horizon, we do so with quiet confidence and a steady hand, steering toward value that endures.

Delivering value
for a thriving world

Course

Every course we chart is shaped by our relationship with the natural world. At Sappi, we are custodians of land and forests, committed to using woodfibre responsibly – not only to drive business success, but to contribute to long-term environmental and social value across generations.

Our environmental strategy is rooted in certification, traceability, and continuous improvement in sourcing and land management. Through precision forestry practices, we optimise plantation health and productivity while advancing biodiversity protection. These efforts ensure that our raw materials are sourced from responsibly managed plantations that meet rigorous sustainability standards.

We take proactive steps to reduce our environmental footprint. Our operations are guided by robust environmental management systems that help us lower emissions, conserve water, and improve energy efficiency – often with internally generated bioenergy. As part of our climate action strategy, we are accelerating decarbonisation across our value chain, aligning with science-based targets and global climate frameworks.

Stewardship at Sappi means moving beyond compliance. We integrate circular design principles, regenerative land-use practices, and climate resilience into our operations, balancing business needs with ecological integrity. Our approach is intentional, adaptive, and informed by the evolving expectations of our stakeholders and the realities of a changing climate.

As we adjust our sails to meet the shifting tides of climate change and global expectations, our direction remains clear: to protect, restore, and regenerate the natural systems that sustain us, through measurable action, transparent reporting, and continuous innovation.

Ensuring value creation through good governance and recognition and rewards

Voyage

Our voyage is powered by innovation – guided by purpose, leadership, and a steadfast commitment to sustainability. Sappi uses renewable resources to make woodfibre-based products, and we are a diversified, innovative, and trusted leader focused on sustainable processes and solutions. From dissolving wood pulp to packaging and speciality papers, we continue to expand our portfolio with offerings that meet evolving customer needs and rising environmental standards.

We invest in meaningful engagement across the value chain – collaborating with customers as well as brand owners, converters, and suppliers to unlock shared value. By listening closely and partnering widely, we identify opportunities to enhance product performance, all the while looking to reduce environmental impact, and supporting long-term returns.

Our product strategy is dynamic and forward-looking, anchored in circularity, and market relevance. Through fact-based support and technical expertise, we help customers navigate their own ESG challenges with confidence and clarity.

In a world transitioning from a fossil-based economy to a circular bioeconomy, Sappi offers a compelling vision: a sustainable business with an exciting future in woodfibre – delivering relevant solutions, enhanced value, and trusted partnerships. Beyond our product portfolio, we offer a suite of technical and development services supported by highly qualified teams of technicians to improve customer efficiencies and scientists who continuously explore new applications for woodfibre and collaborate with customers through targeted R&D initiatives.

On this voyage of delivering traceable, responsibly sourced products, we deploy state-of-the-art technology to ensure precision, reliability, and transparency. Every offering is a step forward – advancing purpose-led growth, regenerative design, and global impact. We are actively building a circular economy that benefits both business and the world.

Appendices

Path

Just as rivers carve their course over centuries – shaping landscapes through persistence and adaptability – our journey begins with a path defined by nearly 90 years of resilience, reinvention, and purpose. Sappi’s Thrive business strategy is more than a roadmap; it is a long-term commitment to sustainable growth, operational excellence, and enduring trust, all while creating meaningful value for our stakeholders.

As Thrive evolves, we stand at an inflection point. The environment around us is shifting – reshaped by global forces that continue to redefine business: climate change, resource scarcity, consumer and employee expectations, and the rapid pace of technological innovation. Our strategy evolves in response, slightly adjusted to remain fit for purpose, reaffirming our commitment to building a thriving world through renewable innovation and shared prosperity.

Our path is not static – it adapts with intention. Whether responding to market pressures or environmental imperatives, we remain focused on long-term value creation. Strategic clarity, technological innovation, and disciplined execution keep us on course – propelling us forward with purpose.

As we look ahead, our focus sharpens: sustaining financial health, deepening stakeholder value, and unlocking opportunity through collaboration and eco-effective ingenuity. The river may change course, but its direction remains true.

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Glossary

General definitions

AF&PA American Forest and Paper Association.
AGM Annual general meeting.
air dry tons (ADT) Meaning dry solids content of 90% and moisture content of 10%.
ARC Audit and Risk Committee.
BBBEE Broad-based black economic empowerment.
biochemicals In the pulp and paper sector, biochemicals refer to renewable, biobased chemicals derived from wood and other biomass during the pulping process. These compounds, such as lignin, hemicellulose, and tall oil, are extracted or synthesised into valuable products, including adhesives, resins, biofuels and bioplastics, offering sustainable alternatives to fossil-based chemicals.
biofuels Organic material such as wood, organic waste and alcohol fuels, as well as gaseous and liquid fuels produced from these biomass feedstocks.
biogenic emissions Emissions of carbon dioxide (CO2), methane (CH), and nitrous oxide (N2O) that originate from natural biological sources or the combustion/processing of biogenic materials such as wood, biomass, paper residues and other plant-based materials.
biomaterials New developments in wood processing supports the move to a biobased economy that utilises materials that are renewable and biodegradable and, in the case of wood feedstocks, do not compete with food sources.
black liquor The spent cooking liquor from the pulping process which arises when pulpwood is cooked in a digester thereby removing lignin, and other extractives from the wood to free the cellulose fibres. The resulting black liquor is an aqueous solution of lignin residues and the inorganic chemicals used in the pulping process. Black liquor contains slightly more than half of the energy content of the wood fed into the digester.
bleached pulp Pulp that has been bleached by means of chemical additives to make it suitable for higher brightness fine paper production.
CAC Control and Assurance Committee.
capital expenditures (CAPEX) Funds spent on acquiring, upgrading, or maintaining physical assets, including property, plant and equipment, to support long-term operations.
casting and release paper Embossed paper used to impart texture in polyurethane or polyvinyl chloride plastic films for the production of synthetic leather and other textured surfaces.
CAW Combined Assurance Workgroup.
CDP CDP (formerly the Carbon Disclosure Project) is a global non-profit organisation that runs a system for companies, cities, states and regions to disclose their environmental impacts related to climate, forests and water.
CEO Chief Executive Officer.
CFO Chief Financial Officer.
chemical pulp A generic term for pulp made from woodfibre that has been produced in a chemical process.
coated mechanical paper (CM) Coated paper made from groundwood pulp which has been produced in a mechanical process, primarily used for magazines, catalogues and advertising material.
coated paper Papers that contain a layer of coating material on one or both sides. The coating consisting of pigments and binders, which act as a filler to improve the printing surface of the paper.
coated woodfree paper (CWF) Coated paper made from chemical pulp which is made from woodfibre that has been produced in a chemical process, primarily used for high-end publications and advertising material.
corrugating medium Paperboard made from chemical and semi-chemical pulp, or waste paper, which is to be converted to a corrugated board by passing it through corrugating cylinders. Corrugating medium between layers of linerboard form the board from which corrugated boxes are produced.
CSI and CSR Corporate social investment and corporate social responsibility.
dissolving wood pulp (DWP) Highly purified chemical pulp derived primarily from wood and in some instances cotton linters, intended primarily for conversion into chemical derivatives of cellulose and used mainly in the manufacture of viscose staple fibre, solvent spun fibre and filament.
DWP market price Market price for imported hardwood dissolving wood pulp into China issued daily by the CCF Group.
energy Is present in many forms such as solar, mechanical, thermal, electrical and chemical. Any source of energy can be tapped to perform work. In power plants, coal is burned and its chemical energy is converted into electrical energy. To generate steam, coal and other fossil fuels are burned, thus converting stored chemical energy into thermal energy.
ESD Enterprise and supplier development.
ESG Environmental, social and governance.
Eskom Eskom is the South African national electricity public utility.
EUDR European Union Deforestation Regulation.
fibre Fibre refers to a long, thread-like structure that can be natural or synthetic and is used in various industries, including textiles, paper, and construction. In the context of the pulp and paper sector, fibre primarily refers to the cellulose fibres extracted from wood or other plant materials, which are the key component in paper production.
Forest Stewardship Council™ (FSC™) Is a global, not-for-profit organisation dedicated to the promotion of responsible forest management worldwide (FSCTM N003159). www.fsc.org.
FSA Forestry South Africa.
FSG Forest Solutions Group which is a technical working group part of the World Business Council for Sustainable Development (WBCSD).
full-time equivalent employee The number of total hours worked divided by the maximum number of compensable hours in a full-time schedule as defined by law.
Global E4 Committee (GEC) The E4 (Energy, Environment, Emissions and Effluent) Committee tracks key metrics. The Committee issues a detailed quarterly questionnaire covering environmental performance parameters, compiles mill data into a long-term database and utilises the data to compare performance.
graphic papers A generic term for a group of papers intended for commercial printing use such as coated woodfree, coated mechanical, uncoated woodfree and newsprint.
greenhouse gases (GHG) The GHGs included in the Kyoto Protocol are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.
GRMT Group Risk Management Team.
GSDC Group Sustainable Development Council.
hemicellulose sugars The biorefinery process for second generation hemicellulose sugars involves recovering them from the prehydrolysate liquor, and then separating them mostly from lignin.
high-yield pulp (HYP) Pulp that has a higher yield from wood logs than pure chemical pulps. High-yield pulp is processed either through mechanical processes or combined mechanical chemical processes such as Matane high-yield bleached chemi-thermo mechanical pulp (BCTMP).
ISO The International Organization for Standardization.
JSE Limited The main securities exchange in South Africa.
KPI Key performance indicator.
kraft paper Packaging or other paper (bleached or unbleached) made from kraft pulp.
kraft pulp Chemical wood pulp produced by digesting wood by means of the sulphate pulping process.
lignosulphonate Lignosulphonate is a highly soluble lignin derivative and a product of the sulphite pulping process.
linerboard The grade of paperboard used for the exterior facings of corrugated board. Linerboard is combined with corrugating medium by converters to produce corrugated board used in boxes.
liquor White liquor is the aqueous solution of chemicals used in the wood pulping process. Black liquor is the resultant combination of lignin, water and chemicals, after the pulping process is complete.
lost-time injury frequency rate (LTIFR) Number of lost-time injuries x 200,000 divided by man hours.
lost-time injury severity rate (LTISR) Total days lost due to injuries x 1,000,000 divided by the total hours worked.
managed forest Naturally occurring forests that are harvested commercially.
mechanical pulp Pulp produced by means of the mechanical grinding or refining of wood or woodchips.
MIS Management incentive scheme.
MOI Memorandum of incorporation.
natural/ indigenous forest Natural forests include old-growth and primary forests as well as managed forests where most of the principal characteristics and key elements of native ecosystems such as complexity, structure, wildlife and biological diversity are present.
newsprint Paper produced for the printing of newspapers mainly from mechanical pulp and/or recycled waste paper.
NGO Non-governmental organisation.
NPO Non-profit organisation.
packaging and speciality papers A generic term for a group of papers intended for commercial and industrial use such as flexible packaging, label papers, functional papers, containerboard, paperboard, silicone-base papers, casting and release papers, dye sublimation papers, inkjet papers and tissue paper.
packaging paper Paper used for packaging purposes.
PAMSA Paper Manufacturers’ Association of South Africa.
plantation Large scale planted forests, intensively managed, highly productive and grown primarily for wood and fibre production.
Programme for the Endorsement of Forest Certification (PEFC) An international non-profit, NGO dedicated to promoting sustainable forest management (SFM) through independent third-party certification. PEFC works by endorsing national forest certification systems and is represented in 49 countries through national organisations such as SFI® in North America. www.pefc.org.
PM Paper machine.
power The rate at which energy is used or produced.
PSP Performance share plan.
pulpwood Wood suitable for producing pulp – usually not of sufficient standard for sawmilling.
R&D Research and development.
release paper/liner The backing paper for self-adhesive labels.
Sappi Biotech The business unit within Sappi which drives innovation and commercialisation of biomaterials and biochemicals.
Sappi Europe (SEU) The business unit within Sappi which oversees operations in the European region.
Sappi North America (SNA) The business unit within Sappi which oversees operations in the North American region.
Sappi Pulp The business unit within Sappi which oversees the production and marketing of DWP and HYP.
Sappi Southern Africa (SSA) The business unit within Sappi which oversees operations in the Southern Africa region.
SBS Solid bleached sulphate paperboard typically used in food service or folding carton applications.
SBT Science-based target.
SBTi The Science Based Targets initiative (SBTi) is a partnership between Carbon Disclosure Project (CDP), the United Nations Global Compact (UNGC), World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). The objective of SBTi is to drive ambitious climate action in the private sector by enabling companies to set science-based GHG emissions reduction targets. SBTi provides technical assistance and expert resources to companies who set science-based targets in line with the latest climate science and provides companies with independent assessment and validation of decarbonisation targets.
Scope 1 and 2 GHG emissions

The Greenhouse Gas Protocol defines Scope 1 (direct) and Scope 2 (indirect) emissions as follows:

  • Direct GHG emissions are emissions from sources that are owned or controlled by the reporting entity
  • Indirect GHG emissions are emissions from purchased electricity, steam, heat or cooling.
Scope 3 Refers to all other indirect emissions that occur in the upstream and downstream activities of an organisation, such as purchased goods and services, business travel, employee commuting, waste disposal, use of sold products, and transportation.
SDGs See UN SDGs.
SETS Committee Social, Ethics, Transformation and Sustainability Committee.
solid waste Organic and inorganic waste materials.
SFM Sustainable forest management.
specific When data is expressed in specific form, this means that the actual quantity consumed during the year indicated, whether energy, water, emissions or solid waste, is expressed in terms of a production parameter. For Sappi, as with other pulp and paper companies, this parameter is per air dry tons of saleable product.
specific purchased energy The term ‘specific’ indicates that the actual quantity during the year indicated, is expressed in terms of a production parameter. For Sappi, as with other pulp and paper companies, the parameter is per air dry tons of product.
specific total energy (STE) The energy intensity ratio defined by the total energy consumption in the context of the saleable production.
Sustainable Forestry Initiative® (SFI®) Is a solutions-oriented sustainability organisation that collaborates on forest-based conservation and community initiatives. The SFI® forest management standard is the largest forestry certification standard within the PEFC programme. www.forests.org.
TCFD Task Force on Climate-related Financial Disclosures.
thermo-mechanical pulp Pulp produced by processing woodfibres using heat and mechanical grinding or refining wood or woodchips.
TNFD Taskforce on Nature-related Financial Disclosures.
ton Metric ton of 1,000 kg.
tons per annum (tpa) Term used in this report to denote tons per annum (tons a year). Capacity figures in this report denote tons per annum at maximum continuous run rate.
total suspended solids (TSS) Refers to matter suspended or dissolved in effluent.
Transnet Transnet is the state-owned South African rail, port and pipeline company.
TSR Total shareholder return.
uncoated woodfree paper Printing and writing paper made from bleached chemical pulp used for general printing, photocopying and stationery, etc. Referred to as uncoated as it does not contain a layer of pigment to give it a coated surface.
United Nations Global Compact (UNGC) A principle-based framework for businesses, stating 10 principles in the areas of human rights, labour, environment and anti-corruption.
UN SDGs United Nations Sustainable Development Goals.
Verve Brand name for Sappi dissolving wood pulp.
viscose staple fibre (VSF) A natural fibre made from purified cellulose, primarily from DWP that can be twisted to form yarn.
WBCSD World Business Council for Sustainable Development.
woodfibre For Sappi, this term includes both wood and pulp derived from wood that is used in our operations.
woodfree paper Paper made from chemical pulp.
World Wildlife Fund (WWF) The world’s largest conservation organisation, focused on supporting biological diversity.

General financial definitions

acquisition date The date on which control in respect of subsidiaries, joint control in respect of joint arrangements and significant influence in associates commences.
associate An entity over which the investor has significant influence.
basic earnings per share Net profit for the year divided by the weighted average number of shares in issue during the year.
CFRONA Cash flow return on net assets.
commissioning date The date that an item of property, plant and equipment, whether acquired or constructed, is brought into use.
control An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
diluted earnings per share Is calculated by assuming conversion or exercise of all potentially dilutive shares, share options and share awards unless these are anti-dilutive.
discount rate This is the pre-tax interest rate that reflects the current market assessment of the time value of money for the purposes of determining discounted cash flows. In determining the cash flows the risks specific to the asset or liability are taken into account in determining those cash flows and are not included in determining the discount rate.
disposal date The date on which control in respect of subsidiaries, joint arrangements and significant influence in associates ceases.
fair value The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
financial results Comprise the financial position (assets, liabilities and equity), results of operations (revenue and expenses) and cash flows of an entity and of the group.
foreign operation An entity whose activities are based or conducted in a country or currency other than that of the reporting entity.
functional currency The currency of the primary economic environment in which the entity operates.
group The group comprises Sappi Limited, its subsidiaries and its interest in joint ventures and associates.
joint arrangement Is an arrangement of which two or more parties have joint control.
joint venture Is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
operating profit A profit from business operations before deduction of net finance costs and taxes.
presentation currency The currency in which the financial results of an entity are presented.
qualifying asset An asset that necessarily takes a substantial period (normally in excess of six months) to get ready for its intended use.
recoverable amount The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs of disposal and its value in use. In determining the value in use, expected future cash flows are discounted to their net present values using the discount rate.
related party Parties are considered to be related if one party directly or indirectly has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions or is a member of the key management of Sappi Limited.
share-based payment A transaction in which Sappi Limited issues shares or share options to group employees as compensation for services rendered.
significant influence Is the power to participate in the financial and operating policy decisions of an entity but is not control or joint control of those policies.

Non-GAAP financial definitions

The group believes that it is useful to report certain non-generally accepted accounting principles (GAAP) measures for the following reasons:

  • These measures are used by the group for internal performance analysis
  • The presentation by the group’s reported business segments of these measures facilitates comparability with other companies in our industry, although the group’s measures may not be comparable with similarly titled profit measurements reported by other companies
  • It is useful in connection with discussions with the investment analyst community and debt rating agencies.

These non-GAAP measures should not be considered in isolation or construed as a substitute for GAAP measures in accordance with IFRS.

Adjusted EBITDA EBITDA excluding special items and the plantation fair value price adjustment.
Adjusted EPS Earnings per share excluding special items and the plantation fair value price adjustment and special finance and tax items.
asset turnover (times) Sales divided by total assets.
average Averages are calculated as the sum of the opening and closing balances for the relevant period divided by two.
black economic empowerment (BEE) charge Represents the IFRS 2 non-cash charge associated with the BEE transaction implemented in 2010 in terms of BEE legislation in South Africa.
capital employed Shareholders’ equity plus net debt.
cash interest cover Cash generated by operations divided by finance costs less finance revenue.
current asset ratio Current assets divided by current liabilities.
dividend yield Dividends per share, which were declared after year-end, in US cents divided by the financial year-end closing prices on the JSE Limited converted to US cents using the closing financial year-end exchange rate.
earnings yield Earnings per share divided by the financial year-end closing prices on the JSE Limited converted to US cents using the closing financial year-end exchange rate.
EBITDA excluding special items (EBITDA) Earnings before interest (net finance costs), taxes, depreciation, amortisation and special items.
fellings The amount charged against the income statement representing the standing value of the plantations harvested.
headline earnings As defined in Circular 1/2019, issued by the South African Institute of Chartered Accountants, which separates from earnings all separately identifiable remeasurements. It is not necessarily a measure of sustainable earnings. It is a Listings Requirement of the JSE Limited to disclose headline earnings per share.
inventory turnover (times) Cost of sales divided by inventory on hand at balance sheet date.
net assets Total assets less total liabilities.
net asset value per share Net assets divided by the number of shares in issue at balance sheet date.
net cash (utilised) generated Cash flows from operating activities less cash flows from investing activities.
net debt Current and non-current interest-bearing borrowings and lease liabilities, and bank overdraft (net of cash, cash equivalents and short-term deposits).
net debt to total capitalisation Net debt divided by capital employed.
net operating assets Total assets (excluding deferred taxation and cash and cash equivalents) less current liabilities (excluding interest-bearing borrowings, lease liabilities and overdraft).
ordinary dividend cover Profit for the period divided by the ordinary dividend declared, multiplied by the actual number of shares in issue at year-end.
ordinary shareholders’ interest per share Shareholders’ equity divided by the actual number of shares in issue at year-end.
price/earnings ratio The financial year-end closing prices on the JSE Limited converted to US cents using the closing financial year-end exchange rate divided by earnings per share.
revolving credit facility (RCF) A variable line of credit used by public and private businesses.
ROCE Return on average capital employed. Operating profit excluding special items divided by average capital employed.
ROE Return on average equity. Profit for the period divided by average shareholders’ equity.
RONOA Return on average net operating assets. Operating profit excluding special items divided by average net operating assets.
SG&A Selling, general and administrative expenses.
special items Special items cover those items which management believe are material by nature or amount to the operating results and require separate disclosure. Such items would generally include profit or loss on disposal of property, investments and businesses, asset impairments, restructuring charges, non-recurring integration costs related to acquisitions, financial impacts of natural disasters and settlement gains or losses on defined benefit obligations.
total market capitalisation Ordinary number of shares in issue (excluding treasury shares held by the group) multiplied by the financial year-end closing prices on the JSE Limited converted to US cents using the closing financial year-end exchange rate.
trade receivables days outstanding (including securitised balances) Gross trade receivables, including receivables securitised, divided by sales multiplied by the number of days in the year.