Group overview

Adapt. Advance. Amplify.

Delivering sustained value

growexplore our theme

As a company based on the power of renewable resources, we are well placed to take lessons from nature: When plants grow too quickly and are not properly rooted, they become top heavy and prone to toppling over. Similarly, if there is not enough light, even though tall, they can become spindly and not fit for purpose.

So, while growth is one of our strategic fundamentals, our approach to it is purposeful and phased. This means being responsive to our environment and the impacts of constant change on our stakeholders. It also means being rooted in our legacy of innovation and excellence and grounded by our Thrive25 strategy. Accordingly, we leverage our existing strengths and grow our people to progress in high-impact, high-value areas. We also partner to shape new marketing opportunities and industry standards that will stimulate growth.

Above all, we recognise that growth can only be sustainable insofar as it supports the health and repair of the natural environment on which we depend. And it is only inclusive when value is shared and society is positively impacted.

This is our focus as we work to build a thriving world.

Responding to our context

illumeexplore our theme

Sky lanterns – traditionally called Khoom Fay in China – can be traced back thousands of years to one of the early Chinese dynasties. They were used not only as decorative light sources but also as military signals that could communicate messages across long distances. Today, it is said they are released at traditional festivals to emphasise the unity of family coming together to celebrate the lunar new year. This is represented by the lanterns collecting in the sky and expressing the wholeness of family.

Sappi is situated in many different regions across many different cultures and countries. But we come together as one whole, OneSappi, united by our purpose which is our guiding light: Sappi exists to build a thriving world by unlocking the power of renewable resources to benefit people, communities and the planet.

Passion and excellence are the sparks that ignite thriving. And they're what keep our commitment to create a thriving future for the world and our business burning so brightly. They're also what will continue to illuminate our way forward – today and tomorrow.

Diving deeper into our,
performance and prospects

createexplore our theme

We are creators, relentless in our drive to make everyday solutions more sustainable. We understand that the power of the imagination is one of our biggest strengths and that opportunities don't just happen. Which is why we apply our creative energy to seeking them out and leveraging our partnerships to realise them.

In doing so, we harness the intellectual curiosity and critical thinking of our people to let go of certainties and develop breakthroughs that delight our customers, enable lasting outcomes for our stakeholders and a more positive impact on the planet. This aligns with our values of "making smart decisions which we execute with speed". So that when we fail, we fail fast and move on.

While innovation is key to delivering profit and margin improvement, we do not create merely because we have the available manufacturing assets, skills, technology and IP.

We do so to lead by example, inspire others and create the thriving tomorrow to which we are committed.

Governance and compensation

reflectexplore our theme

Only in still waters do things reflect undistorted. As a business, we take the time to reflect on our past actions – including assessing our relationship with our stakeholders, particularly our people – to understand more clearly where we have succeeded, where we could have done better and how we can continue to build sustainable competitive advantage. This investment in reflection enables us to calibrate the solutions we provide and our response to the world around us.

As OneSappi, we understand that like dropping a stone into a pond creates outward ripples, in today's interconnected world, our actions and decisions can have a significant impact. For example, our decarbonisation actions alone cannot bring the world to net zero, but they can have a ripple effect that influences and encourages others.

Many people think of excellence as an upward journey, but at Sappi we view it as going round and round in ever-expanding, infinite waves. This view is reflected in the use of irregular waves which symbolise energy and unity used as a design element throughout this report and in the above image.

Going forward, we will continue to focus on excellence with energy and clarity and unity of purpose.

Appendices

celebrateexplore our theme

Any sporting great will tell you that, even if they are an individual performer, their wins are due not just to their own prowess, but also to the work taking place behind the scenes. Most specifically, their win also belongs to the team backing them up – from the coaches who are with them every step of the way; to those who believe in them, even when obstacles seem insurmountable.

As we celebrate an outstanding year, we readily acknowledge that it is the outstanding perseverance, collaboration and commitment of our extraordinary people that delivered the results. We do not forget that it took tremendous courage from our people to implement the decisions that ultimately delivered so handsomely.

Together, over the last few years, we have been through some challenging times. We have taken some tough decisions and have had to make difficult calls.

Our people have countered volatility with agility, setbacks with courage and problems with perseverance and ingenuity. Through it all, they have held the flag of OneSappi and our purpose of building a thriving world high.

Together, even as we celebrate what we have accomplished, we are committed to maintaining our momentum.

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Five-year review

FOR THE YEAR ENDED SEPTEMBER 2022
US$ million   2022 2021 2020 2019 2018
Income statement            
Sales   7,296 5,265 4,609 5,746 5,806
Variable manufacturing and delivery costs   4,387 3,238 2,838 3,530 3,521
Fixed costs   1,853 1,777 1,673 1,771 1,767
Sundry expenses (income)1   18 47 41 43 38
Operating profit excluding special items   1,038 203 57 402 480
Special items – (gains) losses   268 57 95 19 (9)
Operating profit (loss)   770 146 (38) 383 489
Net finance costs   97 134 88 85 68
Profit (loss) before taxation   673 12 (126) 298 421
Taxation charge   137 (1) 9 87 98
Profit (loss) for the year   536 13 (135) 211 323
EBITDA excluding special items   1,339 532 378 687 762
Balance sheet            
Total assets   6,229 6,186 5,455 5,623 5,670
Non-current assets   3,430 4,255 3,891 3,789 3,766
Current assets   2,799 1,931 1,564 1,834 1,904
Current liabilities   1,524 1,309 1,123 1,214 1,173
Shareholders' equity   2,358 1,970 1,632 1,948 1,947
Net debt   1,163 1,946 1,957 1,501 1,568
   Gross interest-bearing debt   1,943 2,312 2,236 1,894 1,931
   Cash   (780) (366) (279) (393) (363)
Capital employed   3,521 3,916 3,589 3,449 3,515
Cash flow            
   Cash generated from operations   1,267 472 323 673 709
   Decrease (increase) in working capital   (270) 39 65 (15) (79)
   Finance costs paid   (102) (110) (108) (51) (84)
   Finance income received   10 8 6 9 18
   Taxation paid   (23) (2) (26) (51) (73)
   Dividends paid   (92) (81)
Cash generated from operating activities   882 407 260 473 410
Net cash generated (utilised)   506 29 (257) 1 (254)
Cash effects of financing activities   (43) 33 138 56 68
Capital expenditure (gross)   368 374 351 471 541
   To maintain operations   196 176 126 148 167
   To expand operations   172 198 225 323 374
Exchange rates            
US$ per one Euro exchange rate – closing   0,980 1,172 1,163 1,094 1,161
US$ per one Euro exchange rate – average (financial year)   1,085 1,196 1,120 1,128 1,190
ZAR to one US$ exchange rate – closing   18,154 14,966 17,131 15,156 14,147
ZAR to one US$ exchange rate – average (financial year)   15,783 14,851 16,226 14,346 13,052
1 Sundry items include all income and costs not directly related to manufacturing operations such as debtor securitisation costs, commissions paid and received and results of equity accounted investments.
US$ million   2022 2021 2020 2019 2018
Statistics            
Number of ordinary shares (millions)1            
In issue at year end   565.2 561.5 546.1 542.8 539.3
Basic weighted average number of shares in issue during the year   563.3 549.7 545.5 542.0 538.1
Per share information (US cents)            
Basic earnings (loss)   95 2 (25) 39 60
Diluted earnings (loss)   90 2 (25) 39 59
Headline earnings (loss)   130 5 (19) 42 59
Diluted headline earnings (loss)   122 5 (19) 42 58
EPS excluding special items (US cents)   138 15 (5) 44 60
Net asset value   417 351 299 359 361
Profitability ratios (%)            
Operating profit (loss) to sales   10.6 2.8 (0.8) 6.7 8.4
Operating profit excluding special items to sales   14.2 3.9 1.2 7.0 8.3
EBITDA excluding special items to sales   18.4 10.1 8.2 12.0 13.1
Operating profit excluding special items to capital employed (ROCE)   27.9 5.4 1.6 11.0 14.6
Net debt to EBITDA excluding special items   0.9 3.7 5.2 2.2 2.1
Interest cover   15.6 5.5 4.7 9.3 11.0
Return on average equity (ROE)   24.8 0.7 (7.5) 10.0 17.5
Debt ratios (%)            
Net debt to total capitalisation   33.0 49.7 54.5 43.5 44.6
Efficiency ratios            
Asset turnover (times)   1.2 0.9 0.8 1.0 1.0
Inventory turnover ratio   7.6 5.6 6.3 7.0 6.7
Liquidity ratios            
Current asset ratio   1.8 1.5 1.4 1.5 1.6
Trade accounts receivable days outstanding (including receivables securitised)   44 47 44 46 45
Cash interest cover (times)   12.9 4.5 3.7 7.6 9.3
Other non-financial information2            
Sales volumes   7,937 7,339 6,788 7,622 7,591
Number of full-time equivalent employees   12,495 12,492 12,805 12,821 12,645
Lost-time injury frequency rate (including contract employees)   0.30 0.38 0.35 0.54 0.43
Energy            
   Energy intensity (GJ/adt)   22.10 22.30 23.70 22.10 22.50
   Renewable and clean energy to total energy (%)   53.90 53.70 53.10 51.70 50.30
Water            
   Specific process water extracted (m3/adt)   34.40 35.00 37.20 34.60 34.60
Waste            
   Specific total landfill (kg/adt)   52.100 53.100 60.900 65.900 64.300
Emissions            
   Specific Scope 1 emissions (ton CO2 eq/adt)   0.61 0.68 0.71 0.66 0.69
   Absolute Scope 1 (ton CO2e)   4,072,052 4,264,077 4,073,453 4,415,554 4,443,906
   Specific Scope 2 emissions (ton CO2 eq/adt)   0.19 0.16 0.20 0.22 0.23
   Absolute Scope 2 (ton CO2e)   1,245,892 1,019,103 1,152,771 1,482,329 1,483,552

Refer to share statistics section for other market and share-related information.

1 Net of treasury shares (refer to note 19 to the group financial statements).
2 Certain energy, water, waste and emissions data for the comparative years have been restated using the latest reporting standards and measurement methodology.

Note: Definitions for various terms and ratios used above are included in the glossary section.