As we bring the 2020 – 2025 Thrive strategic cycle to a close, we reflect
on a period dominated by the impact of COVID-19 that tested our resilience, sharpened our strategic focus,
and strengthened the foundations of our business. Over the past five
years, Sappi has navigated an increasingly complex external environment
characterised by geopolitical uncertainty, supply chain disruptions,
volatile market conditions and shifting consumer dynamics. Despite
these challenges, the Thrive strategy has provided a clear and consistent
framework, enabling us to strengthen our competitive position, advance
our sustainability commitments and create long-term value for our
stakeholders.
Our commitment to operational excellence, financial
discipline and responsible resource management
has remained steadfast. We continued to invest
in technology and efficiency, progressed key
decarbonisation initiatives, deepened stakeholder
engagement and strengthened our focus on
safety and people development. Through turbulent
macroeconomic cycles, we remained committed to
strengthening our balance sheet, optimising our asset
base, and fostering trusted relationships across our
global value chain.
The Thrive strategy has served as a compass during
a transformative era, enabling us to adapt, grow, and
build resilience in a rapidly changing world. As we
now turn the page, the achievements of the past five
years provide a strong platform for the next phase
of our journey. The following section reflects on our
2020 – 2025 strategy and introduces the path forward –
a strategy designed to consolidate our gains, reinforce
our financial health, and unlock new opportunities
beyond 2025.
As we embark on the next phase of our strategic journey to 2030, the
guiding principles of our Thrive strategy remains relevant, however, in
the current environment our focus is ‘Back to Basics’.
Thrive strategy
- Grow dissolving wood pulp capacity to match market demand
- Continue to grow packaging and speciality papers in all regions
- Further commercialisation of biotech opportunities
- Reduce exposure to declining graphic papers business.
Sustain our financial health
- Target absolute net debt <US$1 billion
- Reduce absolute debt level and improve EBITDA*
- Optimise capital management
- Optimise debt maturity profile and finance charges.
Drive operational excellence
- Strengthen our safety-first culture
- Continuously improve our cost position
- Continue to maximise the benefits of our global footprint
- Best-in-class production efficiencies.
- Improving our understanding of and proactively partnering with all stakeholders
- Driving sustainability solutions
- Meeting the changing needs of every Sappi employee.
Our business strategy – next phase is ‘Back to Basics’
Thrive investment phase 2020 – 2025
- Major investments
- Saiccor Mill expansion
- Gratkorn Mill PM9 (labels)
- Somerset Mill PM2 (SBS)
- Graphic capacity closures
- Stockstadt Mill closure
- Lanaken Mill closure
- Various cost improvement projects.
Thrive consolidation phase (Back to Basics) 2026 – 2027/8
- Sustaining our financial health
- Net debt reduction
- Working capital optimisation
- Cost savings
- Fixed and variable cost savings
- European rationalisation US$60 million* (FY2026)
- Group-wide cost savings
- Capex management
- <US$300 million for next two years
- Driving operational excellence
- Ramp-up of production
- Achieve production efficiency.
Thrive advance phase 2028 and beyond
- When our stated targets are managed at sustained levels
- Dividend payments will resume
- Share buy-back opportunities revisited
- Growth opportunities explored.
See how we performed against our Thrive strategic targets in 2025.
Four key messages to shareholders
Focus on reducing leverage
- Target <US$1 billion net debt
- Reduce capex to <US$300 million for at least the next two years.
Maximise earnings growth
- EBITDA growth as we ramp-up Somerset Mill PM2
- ROCE target of WACC +2% consistently.
Enhanced shareholder return post de-gearing
- Re-evaluate dividend once debt target met
- Consider share buy-backs as a return mechanism dependent on share price.
Strategic portfolio optimisation
- Portfolio optimisation
- Sustainability opportunities explored
- Match graphic papers capacity to market demand.