The condensed group interim financial statements for the quarter and half-year ended March 2026 have been prepared in accordance with and containing the information required by IAS 34 Interim Financial Reporting, the Financial Pronouncements as issued by the Financial Reporting Standards Council, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the JSE Listings Requirements and the Companies Act of South Africa. The accounting policies applied in the preparation of the condensed group financial statements are in terms of IFRS^® Accounting Standards and are consistent with those applied in the previous annual financial statements.

The preparation of these condensed group financial statements was supervised by the Chief Financial Officer, GT Pearce, CA(SA) and were authorised for issue on the 07 May 2026.

The condensed group interim financial statements for the half-year ended March 2026 which includes condensed group balance sheet, condensed group income statement, condensed group statements of other comprehensive income, changes in equity and cash flows and notes to the condensed group financial statements have been reviewed by KPMG Inc., who expressed an unmodified review conclusion. The auditor's report should therefore be read in conjunction with these condensed group financial statements. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report together with the accompanying financial information from the issuer's registered office.

⁽¹⁾ Includes the group’s treasury operations and insurance captive.

Reconciliation of Adjusted EBITDA to profit for the period and operating profit excluding special items to operating profit

The group's financial instruments that are measured at fair value on a recurring basis consist of derivative financial instruments and investment funds. These have been categorised in terms of the fair value measurement hierarchy as established by IFRS 13 Fair Value Measurement per the table below.

There have been no transfers of financial assets or financial liabilities between the categories of the fair value hierarchy.

The fair value of all external over-the-counter derivatives is calculated based on the discount rate adjustment technique. The discount rate used is derived from observable rates of return for comparable assets or liabilities traded in the market. The credit risk of the external counterparty is incorporated into the calculation of fair values of financial assets and own credit risk is incorporated in the measurement of financial liabilities. The change in fair value is therefore impacted by the following inputs, the movement of the interest rate curves, by the volatility of the applied credit spreads, and by any changes to the credit profile of the involved parties.

There are no financial assets and liabilities that have been remeasured to fair value on a non-recurring basis.

The carrying amounts of other financial instruments which include cash and cash equivalents, trade and other receivables, certain investments, trade and other payables and current interest-bearing borrowings approximate their fair values.

Since the 2025 financial year-end, the Euro and the ZAR have weakened and strengthened approximately 2.2% and 0.5% respectively against the US Dollar, the group's presentation currency. This has resulted in a decrease and increase of the group's European and South African assets and liabilities respectively, which are held in the aforementioned functional currency, on translation to the presentation currency at period-end.

Property, plant and equipment, goodwill and intangible assets and equity-accounted investees

Due to weakened market conditions and reduced future cash flow projections, the group impaired its mechanical coated and hybrid cash-generating units (CGU), including related goodwill of US$3 million, within its European segment by US$155 million and its Matane Mill, including related intangibles and goodwill of US$49 million, by US$111 million within its North American segment. The CGU impairments were based on the asset's value in use using management's five-year plan including appropriate bases for future product pricing in the appropriate markets, raw material and energy costs, volumes of product sold, the planned use of machinery or equipment or closing of facilities using real pre-tax discount rates of 9.26% for the European CGUs and 11.56% for the Matane CGU. These impairment amounts are included in Other operating expenses in the income statement.

In addition, the group impaired its remaining equity accounted investment within Forestry First Colombia by US$9 million.

Plantations

Largely as a result of a sharp decline in ZAR hardwood timber prices due to the strengthening of the ZAR against the US$ in the March quarter, the group recorded an adverse fair value price adjustment of US$110 million.

Interest-bearing borrowings

In January, the group raised a new EUR200 million five-year syndicated term loan of which the proceeds were used to term out short-term debt.

The group incurred a loss of US$450 million for the period ended 31 March 2026 (March 2025: Profit of US$50 million). The loss for the period was primarily due to once-off events of impairment losses of US$267 million (including goodwill) and a plantation fair value price adjustment loss of US$110 million due to a decline in ZAR hardwood timber prices as a result of the strengthening of the ZAR against the US$ in the March quarter. As at 31 March 2026, the group had net current assets of US$450 million (Sept 2025: US$285 million) and net total assets of US$1,887 million (Sept 2025: US$2,308 million). The group maintains access to committed borrowing facilities and cash resources, which management considers adequate to meet obligations as they fall due. Based on the cash flow forecast and after considering mitigating actions such as cost optimisation initiatives and refinancing plans, the directors are satisfied that the group has sufficient resources to continue operating as a going concern. Accordingly, the condensed group interim financial statements have been prepared on a going-concern basis.

On 04 December 2025, the group announced that it had signed a non-binding letter of intent with UPM-Kymmene Corporation (UPM) in relation to the possible formation of a 50/50 joint venture for graphic papers in Europe subject to the fulfilment of a number of regulatory and other conditions precedent. The joint venture will include the European graphic papers business of Sappi (Gratkorn Mill, Ehingen Mill, Maastricht Mill, Kirkniemi Mill and Sappi Europe's wood supply joint ventures) and the UPM Communications Paper Business in Europe, the UK and the USA.

The rationale for the creation of the joint venture is that the European graphic papers industry has been in structural decline for decades and is facing growing pressure due to falling demand, high energy costs, excess production capacity and broader economic challenges. To remain competitive and sustainable in the long term, consolidation is needed. Consolidation will contribute to a more robust and resilient European graphic papers industry.

The joint venture's combined enterprise value is EUR1,420 million. Sappi's businesses are valued at EUR320 million based on a FY2025 EBITDA of EUR64 million with a 5x multiple. Sappi will transfer pension and other liabilities of EUR53 million and net assets valued at EUR267 million to the joint venture. In return Sappi will receive cash of EUR139 million and 50% shareholding in the joint venture.

The parties intend signing definitive agreements during the first half of 2026 and expect to close the proposed transaction by the end of 2026 provided that all the conditions precedent have been fulfilled.

Management have considered the requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations and concluded that these were not met at the reporting date.

There has been no material change, by nature or amount, in transactions with related parties since the 2025 financial year-end.

The group concluded the sale of Rockwell Solutions in the United Kingdom to Camvac International Limited on 01 May 2026.

There has been no significant change to management's estimates in respect of new accounting standards, amendments and interpretations to existing standards that have been published which are not yet effective and which have not yet been adopted by the group.