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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Our products

Our diverse product portfolio includes three main categories: pulp, packaging and speciality papers, and graphic papers.

Sales volumes* (%)

* Excluding Sappi Forestry operations.

Sales revenue* (%)

* Excluding Sappi Forestry operations.

Adjusted EBITDA* (%)

* Excluding the unallocated and eliminations
  (the group’s treasury and insurance captive).

“ We continue to invest in all three of our world-class dissolving wood pulp (DWP) production sites – further entrenching our leadership position as a trusted source for responsible and sustainable DWP.”

Our pulp segment: a foundation of sustainable value

Our pulp segment is a cornerstone of our business, predominantly comprised of two key product categories: DWP and high-yield pulp (HYP). To maximise efficiency and value, any excess kraft pulp produced at our Somerset and Ngodwana Mills is sold externally and incorporated into this segment’s results.

DWP: the sustainable choice

Sappi is a significant player in the global DWP market, where our Verve brand holds a 15% market share with an annual capacity of 1.5 million tons. Verve is a truly sustainable brand, and we have the expertise and technology to meet the diverse challenges of its market segments, from textiles and pharmaceuticals to food applications.

From forest to fabric: a journey of innovation

Sappi’s DWP is a highly purified cellulose pulp derived from sustainably managed forests using advanced pulping and bleaching technology to extract cellulose from wood. The majority of our DWP is used to create naturally soft, breathable, and vibrant textile fabrics.

The fibre process: DWP is converted into viscose staple fibre (VSF) and lyocell fibre, which are then spun into yarns and woven into fabrics. The resulting textiles are smooth, hold colour beautifully, and drape well. While they blend effectively with cotton and polyester, their key differentiator is superior sustainability, meeting the growing consumer demand for renewable and biobased products.

VSF: VSF drives approximately 67% of the global demand for DWP. It is commonly used in fashion, home textiles, and non-woven applications like face masks, wet wipes and hygiene products. Our Verve brand delivers the essential quality and sustainability assurance for this major market.

Lyocell fibre: As the next generation of textile fibres, lyocell offers superior sustainability through reduced chemical use and closed-loop manufacturing. Our commitment is clear: approximately 50% of the world’s lyocell fibre is manufactured from DWP originating from a Sappi mill, cementing our role as a key supplier for the most sustainable wood-based cellulosic fibre on the market.

Beyond textiles: essential for everyday life

From the food we eat to the medicines we take, DWP is a hidden ingredient in countless products that shape our daily lives. Its applications extend into health and hygiene, innovative packaging, and many other familiar items.

Market outlook

We expect long-term demand for DWP to grow at approximately 3% to 4% annually, fuelled by global trends like population growth, urbanisation, and a consumer shift toward comfortable, environmentally friendly natural fibres. Market prices are primarily influenced by VSF and textile market dynamics, paper pulp pricing (which affects swing mills), and fluctuations in the US Dollar/RMB exchange rate.

High-yield pulp (HYP): strength and strategic integration

Our Matane Mill in Quebec, Canada, has an annual capacity of 285,000 tons of HYP. To increase our vertical integration, approximately 48% of the mill’s HYP production in FY2025 was consumed internally by our packaging and paper businesses. This strategy significantly lowers our costs, ensures supply certainty, and reduces earnings volatility.

The mill produces two distinct, high-quality hardwood HYP:

Sappi Matane Aspen: Delivers good bulk, excellent brightness, and exceptional drainage, making it ideal for printing paper grades.

Sappi Matane Maple: Delivers superior bulk, opacity and formation, making it an outstanding fibre for paperboard, linerboard, and speciality papers.

Our commitment

Our focus is on consistently meeting and exceeding our customers’ needs. We will leverage our key competitive advantages – our world-class, sustainably managed plantations, strategic geographic positioning, and reputation as a reliable partner – to deliver sustainable products that create shared value for all.

Our performance in 2025

Pulp sales volumes by product category

Sales volumes (%)

  2025
Sales volumes (metric tons) 1,425
Revenue (US$ million) 1,162
Adjusted EBITDA margin (%) 19.6

“ We manufacture innovative packaging and speciality papers products and services with a commitment to sustainability and a circular bioeconomy. Working closely with brand owners, converters, printers, designers and communications agencies, we pride ourselves in being a reliable and global business partner.”

Our customer commitment: partnership, performance, and reliability

Our growth is driven by a compelling value proposition, continuous innovation, and an outstanding service record. We create solutions that address our customers’ most critical challenges, empowering them to grow sales, lower costs, enhance sustainability, and minimise risk.

We believe strong partnerships are built on trust and respect, which begins with reliability. Our customers’ success depends on our unwavering commitment to maintaining our assets, ensuring financial stability, providing global availability, and delivering consistent, premium-quality products.

Packaging and speciality papers: leading the sustainable transition

A major market shift is underway as legislative changes and consumer demands drive brands toward sustainable packaging. Retailers, brand owners and consumers are actively seeking paper-based solutions that are biodegradable, recyclable, and functional. We see this as a significant opportunity and estimate it will drive 3% to 6% annual growth in global demand for our relevant products.

Our strategic advantage

Sappi is strategically positioned to lead this paper-for-plastic movement. Our progress is supported by technically advanced and efficient paper machines, which are ideally suited for conversion to demanding packaging grades. We meticulously analyse market growth and technical requirements, ensuring we only invest in projects where our assets, production capabilities, and cost structures give us a significant competitive edge.

Our manufacturing presence across Europe, North America, and South Africa provides significant scale efficiencies and ensures a secure supply chain. With regional R&D centres and a collaborative approach to innovation, our customers gain a reliable partner with a truly global reach.

Our extensive product portfolio
Flexible packaging

Innovative paper-based solutions with integrated functionalities such as barrier technology from water, oxygen and grease as well as sealing properties are suitable for various applications, notably in packaging for food as well as non-food markets. Flexible packaging is manufactured at our Alfeld Mill in Germany, at our Italian mills, Carmignano and Condino, Ngodwana Mill in South Africa, Somerset Mill in North America and Rockwell Solutions in Scotland.

Paperboard

High-quality coated boards for use in luxury packaging applications that require functionality and superior graphics across a range of market segments, including health and beauty, confectionery, premium beverages and food packaging. Paperboard is manufactured at our Somerset Mill in North America, and our Maastricht Mill in the Netherlands.

Containerboard

Includes liners and fluting, for corrugated boxes. Sappi’s products are found in applications like consumer packaging, shelf-ready packaging and transport packaging for agricultural and industrial uses. Containerboard is manufactured at our South African mills, Ngodwana and Tugela and Ehingen Mill in Germany.

Label papers and release liners

Our label paper offering includes non-wet strength (cut and stack) and wet-strength label products, which are used in beverage, food and packaging applications. Our clay-coated kraft (CCK) and glassine release liners provide solutions not only for labels but applications such as self-adhesive tapes, medical and industrial applications. Label papers and self-adhesives are manufactured at our Gratkorn Mill in Austria, Somerset and Cloquet Mills in North America, Alfeld Mills in Germany, and our Carmignano and Condino Mills in Italy.

Casting and release papers

Used by suppliers in the fashion, textile, automobile and laminate industries. Our papers serve as moulds to impart textures on other surfaces, ranging from decorative laminates and synthetic leather to engineered films and rubber. Casting and release papers are manufactured at our Westbrook Mill in North America.

Dye sublimation papers

For digital transfer printing with water-based dye sublimation inks. Designed for the transfer of an image onto various materials, such as apparel, outdoor advertising and home textiles. Dye sublimation papers are manufactured at our Italian mills, Carmignano and Condino.

Tissue paper

Used for bathroom tissue, kitchen towels, serviettes and medical and industrial wipes. Tissue paper is manufactured at our Stanger Mill in South Africa.

Strategy in action
The Somerset Mill transformation

A prime example of our Thrive strategy is the recent investment at our Somerset Mill. The Somerset Mill PM2 conversion and expansion project was completed in May 2025. We converted a paper machine from graphic paper to solid bleached sulphate (SBS) board, more than doubling its capacity from 235,000 to 470,000 tons per year.

The technical ramp-up is exceeding expectations, with excellent market feedback on quality. This state-of-the-art machine positions our business competitively in the North American paperboard market, perfectly illustrating our commitment to reducing exposure to declining markets while decisively increasing our capacity in growing ones.

Label investment at Gratkorn Mill

In September 2024, we completed an investment to expand label production at our Gratkorn Mill. This strategic move aims to establish Sappi as a leader in the label sector while reducing its reliance on the declining graphic papers market.

Our performance in 2025

Packaging and speciality papers sales volumes by product category

Sales volumes (%)

  2025
Sales volumes (metric tons) 1,458
Revenue (US$ million) 1,814
Adjusted EBITDA margin (%) 3.6

“At Sappi, we leverage our expertise to develop a diverse portfolio of graphic papers, meticulously designed to meet specific needs – whether it’s a premium product for an exclusive brand message, a versatile solution for broad requirements, or a more budget-friendly option. With Sappi, brands achieve a more memorable and lasting impression.”

This diverse portfolio is structured across the following four major grades of graphic paper, each engineered for distinct applications:

Coated woodfree paper

Printers and publishers use coated woodfree paper for a variety of marketing promotions, including brochures, catalogues, calendars, corporate reports, direct mail, books and magazines. Coated woodfree paper provides a smooth and uniform surface for optimal print fidelity. We manufacture coated woodfree paper in our North American and European businesses, but sell to customers all over the world. Coated woodfree paper products are sold through paper merchants, as well as directly to commercial printers.

Coated mechanical paper

Coated mechanical paper is primarily used in magazines, catalogues, newspaper inserts and other advertising materials. Sappi’s coated mechanical paper sales all come from our European business. Customers for this paper are typically web printers, publishers, retailers and cataloguers.

Uncoated woodfree paper

Uncoated woodfree paper is used for letterheads, business stationery, photocopy paper, books, brochures, envelopes, pamphlets and magazines. Sappi manufactures and sells uncoated woodfree paper in our European and South African businesses. Our main customers in this sector are paper merchants, commercial printers and retailers.

Newsprint paper

Newsprint is manufactured from mechanical and bleached chemical pulp, with uses including the printing of newspapers and advertising inserts. We manufacture and sell newsprint from our South African business.

Market outlook

We expect global graphic papers demand to continue declining by approximately 6% to 8% per annum. Our strategic focus in this segment remains to proactively manage capacity utilisation.

Our performance in 2025

Graphic papers sales volumes by product category

Sales volumes (%)

  2025
Sales volumes (metric tons) 2,045
Revenue (US$ million) 2,372
Adjusted EBITDA margin (%) 8.1