Sappi Limited Overview
Sappi is a mid-sized, vertically integrated woodfibre group with operations on three continents and sales into more than 150 countries. Its earnings rest on two structurally different engines. The first is a globally significant dissolving wood pulp (DWP) franchise, Verve, based in South Africa and Cloquet (US), backed by company-owned plantations; in FY2025 it generated 46% of group Adjusted EBITDA from 29% of volumes. The second is a portfolio of graphic, packaging and speciality papers in Europe and North America. Since 2021 management has pursued a portfolio pivot: shrinking European graphic paper through closures and now a 50/50 joint venture with UPM, and redeploying capital into US solid bleached sulphate (SBS) paperboard through the US$418m Somerset PM2 conversion. The investment cycle peaked into a severe pricing downturn. As a result, Sappi enters FY2027 highly levered (6.5x net debt/Adjusted EBITDA at June 2026), with covenant testing suspended to March 2027 and a regulatory-dependent restructuring of Europe pending.
Company's own description. The latest reporting describes the group in one line: "Sappi uses renewable resources to make woodfibre-based products." [S4, FY2026]. Management further describes Sappi as a diversified, innovative and trusted leader making pulp, packaging and speciality papers, graphic papers and biomaterials from woodfibre sourced from sustainably managed forests. Many mills are energy self-sufficient through internally generated bioenergy [S4].
What the company does. Sappi converts wood (largely its own plantation fibre in South Africa, plus purchased wood in Europe and North America) into three main product families:
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Pulp. This comprises dissolving wood pulp sold mainly to viscose staple fibre (VSF) and other cellulose-derivative producers (textiles, plus pharmaceutical and food applications), together with paper-grade and high-yield pulp (BCTMP) used internally or sold externally [S3][S9].
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Packaging and speciality papers (P&SP). This includes SBS/solid bleached board paperboard, label papers, flexible packaging papers, release papers (casting/release for synthetic leather and laminates), containerboard (South Africa), tissue and technical papers [S3][S9].
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Graphic papers. These are coated woodfree, coated mechanical, uncoated woodfree office paper and newsprint [S3][S9].
Biomaterials (nanocellulose, lignin, xylose, furfural) and forestry/timber sales round out the portfolio [S9].
Business model. The model is overwhelmingly product sales. There is no material service, subscription or licensing revenue disclosed. Revenue is booked on delivery of tonnes. Since FY2025, revenue has been presented net of delivery costs where Sappi acts as agent for shipping; FY2024 was restated accordingly [S3].
Value-chain position. Sappi is upstream-integrated from forest to pulp to paper in South Africa, with 401,000 ha owned or leased, of which 262,000 ha is planted [S9; date of figure not stated]. It is partially integrated in North America (Cloquet pulp to graphic paper; Matane BCTMP to Somerset board) and in Europe (Ehingen, Gratkorn and Kirkniemi pulp lines). It sells mainly B2B to converters, printers, merchants, VSF/textile mills, label converters, packaging converters and brand owners.
Independent characterisation. Despite revenue still being about 44% graphic paper, Sappi should be analysed as a DWP-and-packaging group carrying a large, declining graphic-paper tail. The economics are highly asymmetric:
Pulp: is the profit engine: 46% of FY2025 Adjusted EBITDA from 29% of volumes [Sappi investor page, FY2025].
P&SP: has absorbed most recent capital but delivered only 13% of FY2025 Adjusted EBITDA from 30% of volumes. In 9M FY2026 its Adjusted EBITDA was slightly negative [S3][S4].
Graphic paper: remains cash-generative in North America, where supply is tight after the PM2 conversion and import tariffs. It is structurally loss-prone in Europe [S3][S4].
Value drivers to watch: the CCF hardwood DWP price in China, the ZAR/US$ exchange rate, which drives South African margins and plantation valuations, and NA SBS paperboard pricing.
Customer types and end-markets:
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Textile and nonwoven fibre producers (VSF, lyocell), mainly in Asia
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Food, beverage, cosmetics and pharma brand owners (via label and packaging converters)
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Commercial printers, publishers and catalogue/magazine producers
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Office paper distributors and newspaper publishers (South Africa)
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Agricultural exporters (citrus containerboard in South Africa)
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Automotive, fashion and decorative-laminate producers (release paper)
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Industrial users of lignin and biochemicals
Strategy
Strategic framework. Sappi ran the five-year Thrive25 plan (FY2021–FY2025). It had four pillars:
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Reset the balance sheet (net debt of approximately US$1bn).
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Reduce exposure to declining graphic paper.
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Grow pulp (DWP) and packaging and speciality papers.
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Develop biomaterials, all anchored in a "4Ps" sustainability frame (Principles, Prosperity, People, Planet) [S1][S2][S9].
FY2025 reporting introduces the successor Thrive strategy (with Thrive 2030 sustainability targets). The immediate operating phase is labelled "Back to Basics": debt reduction, targeted cost savings and operational efficiency [S3][S5]. Management also stresses a "strategic pivot toward its US operations" as central to long-term value [S6].
Medium-term targets and guidance:
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Long-term net debt target of approximately US$1bn (set FY2022 and still the reference point) [S1].
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FY2026 primary focus to "reduce net debt and leverage towards our stated targets" [S3].
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Capex below US$300m p.a. for FY2026–FY2027 [S3].
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Graphic paper demand assumed to decline ~6–8% p.a. [S3].
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No formal medium-term revenue or margin targets were identified in the sources reviewed.
Products & Services
Launch years and pricing models are generally not disclosed; Sappi sells on negotiated contract or spot pricing by grade and region. Where a field is unknown it is marked "nd" (not publicly disclosed).
Pulp segment
| Product / brand | Description and capabilities | Target customer | Producing site(s) | Launch / latest |
|---|---|---|---|---|
| Verve (dissolving wood pulp) | Highly purified cellulose for viscose staple fibre, lyocell, cellulose derivatives, pharma and food applications | VSF/textile fibre makers (largely Asia), speciality cellulose users | Saiccor, Ngodwana (DWP since 2013), Cloquet (DWP since 2013) | nd; Saiccor expansion commissioned FY2022 [S1] |
| Paper-grade kraft pulp | Swing production from DWP lines and internal fibre for paper | Internal integration; external market pulp buyers | Cloquet (swing), Ngodwana | — |
| BCTMP (high-yield pulp) | Bleached chemi-thermomechanical pulp | Mainly internal integration into Somerset board; reduced external sales | Matane (Quebec) | nd; Matane impaired US$113m in FY2026 [S4] |
| Valida (fibrillated / nanocellulose) | Reinforcement and stabilisation additive replacing petroleum-based ingredients | Cosmetics, coatings, agriculture, construction materials | — | nd [S9] |
| Lignin / lignosulphonate | Wood polymer co-product; lignosulphonate produced at Tugela | Binders, dispersants, industrial chemicals | Tugela; partner projects | nd [S9] |
| Xylose and organic acids | Patented process extracting xylose (xylitol precursor) from hemicellulose co-product of Verve operations | Food-ingredient and sweetener producers | DWP operations | nd [S9] |
| Furfural | Bio-based platform chemical | Chemical industry | — | nd [S9] |
| Symbio | Woodfibre-based biocomposite (alternative to fossil materials) | Automotive components, furniture, consumer electronics | — | nd [S9] |
Packaging and speciality papers segment
| Product / brand | Description and capabilities | Target customer | Producing site(s) | Launch / latest |
|---|---|---|---|---|
| Algro Design | Solid bleached board (virgin fibre carton board), 160–400 g/m², suited to premium finishing | Luxury and beverage packaging converters | Europe (Alfeld/Maastricht platform) | Shown at BrauBeviale 2024 |
| Algro Volume | High-bulk, high-strength premium paperboard | Premium beverage and consumer packaging | Europe | Launched ~2024 (described as newest Algro addition) |
| Fusion Topliner | Liner for lamination onto corrugated and solid board, 90–200 g/m² | POS displays, shelf-ready packaging | Europe | — |
| Parade Label Pro | Gloss, one-side double-coated non-wet-strength wet-glue label paper, 80–120 g/m², food-contact certified | Beverage and FMCG label converters | Gratkorn, Alfeld | Gratkorn label capacity extended end-2023 |
| Parade Label WS | Wet-strength, alkali-resistant label paper (gloss and linen), 65–80 g/m², for returnable bottles | Breweries and beverage bottlers | Europe | Ramp-up drove FY2025 European P&SP volume growth [S3] |
| CCK paper "Sol" | Clay-coated kraft release base for pressure-sensitive adhesives and pre-preg manufacture | Label stock and composites makers | Europe | — |
| Glassine "Silco" | Glassine papers, 50–200 g/m², for tapes, labels and pre-preg | Release liner converters | Europe | — |
| Face stock label papers | Self-adhesive face stock, 73–90 g/m² | Food and beverage, logistics, pharma labels | Europe | — |
| Leine | Label and packaging paper brand | Label converters | Europe | — |
| Flexible packaging papers | Barrier and functional papers replacing plastic laminates (incl. dairy) | Flexible packaging converters | Europe | Gradual dairy recovery noted FY2025 [S3] |
| SBS paperboard (Somerset PM1 and PM2) | Solid bleached sulphate board; PM2 capacity 470ktpa after conversion from 240ktpa graphic | US folding carton, food service and consumer packaging | Somerset Mill, Maine | PM2 start-up FY2025; ramp-up through FY2026 [S1][S3][S4] |
| Ultracast and release papers | Casting and release papers giving surface aesthetics to synthetic leather and decorative laminates; Sappi states it meets about half of world demand for release paper | Automotive, fashion and footwear, laminate producers | Westbrook Mill, Maine | — |
| Containerboard (kraft linerboard, corrugating medium) | Virgin-fibre containerboard; Ngodwana PM1 upgraded FY2022 | South African agricultural export packaging (citrus) | Ngodwana, Tugela | PM1 upgrade 2022 [S1] |
| Tissue | Bagasse- and wood-based tissue | South African household and industrial tissue | Stanger (tissue machine impaired in FY2026) | — |
Graphic papers segment
| Product / brand | Description | Target customer | Region / site | Status |
|---|---|---|---|---|
| Magno | Premium coated woodfree (Star/Satin and other surfaces) | Commercial print, corporate reports, books | Europe (Gratkorn, Maastricht) | To transfer to UPM JV on closing |
| Galerie, GalerieArt | Coated mechanical / premium magazine papers | Magazines, catalogues | Europe (Kirkniemi, Ehingen) | To transfer to UPM JV |
| Quatro | Coated graphic paper | Publishing, direct mail | Europe | To transfer to UPM JV |
| Vantage | Graphic paper | Commercial print | Europe | To transfer to UPM JV |
| McCoy | Premium coated woodfree | High-end print advertising, annual reports | North America | Retained |
| Opus | Coated woodfree | Catalogues, magazines | North America | Retained |
| Somerset | Coated woodfree | Commercial print | North America (Somerset PM1 swing) | Retained |
| Flo | Coated woodfree | Magazines, catalogues | North America | Retained |
| Office paper | Uncoated woodfree office paper (bagasse-based at Stanger) | South African office and merchant market | Stanger | Retained; import pressure |
| Newsprint | Newsprint | South African publishers | Ngodwana | Retained; ITAC tariff application (5%) lodged Mar 2026 [S6] |
Forestry
| Product | Description | Customer |
|---|---|---|
| Timber and sawlogs | Plantation timber from Sappi Forests (hardwood eucalyptus and softwood pine) | Internal mills and external buyers |
| Recovered fibre (Sappi ReFibre) | Secondary-fibre collection and recycling division | Internal containerboard / tissue |
The Lomati sawlog-to-lumber operation (kiln-dried pine) was classified as held-for-sale in March 2025 and sold in September 2025 [S3].
Financial Narrative
All figures are US$ million unless stated. FY2021 and FY2022 are from [S1]; FY2023 from [S2]; FY2024 (restated) and FY2025 from [S3]. FY2021–FY2023 revenue is "sales" gross of agent delivery costs, while FY2024–FY2025 revenue is net. The pre-FY2024 equivalent of Adjusted EBITDA is EBITDA ex special items.
Margins and growth
Revenue CAGR FY2021–FY2025 was +0.7% p.a. (US$5,265m to US$5,420m). The rate is modestly understated because FY2024–FY2025 revenue is net of delivery costs.
Commentary — income statement. The five-year series traces a full commodity cycle superimposed on a structural shift.
FY2021: EBITDA of US$532m reflected Covid-depressed graphic paper (graphic EBIT loss of US$32m) [S1].
FY2022: A record US$1,339m was driven by an unprecedented graphic-paper shortage and DWP prices peaking at US$1,220/t in July 2022 [S1].
FY2023: Profits halved as customers destocked and graphic volumes fell 38%. Pricing discipline and South Africa's record ZAR EBITDA held Adjusted EBITDA at US$731m [S2].
FY2024: Earnings were stable at the EBITDA line (US$684m), but US$225m of special items, largely Lanaken closure costs, reduced profit to US$33m [S3].
FY2025: The inflection. A post-tariff pricing collapse across all segments, a weaker US dollar against the rand, PM2 start-up disruption and extended South African maintenance shuts cut Adjusted EBITDA 27% to US$501m. US$170m of special items (mostly European impairments and restructuring) and higher finance costs produced a net loss of US$177m [S3].
Depreciation is rising again (US$303m in FY2025; US$244m in 9M FY2026 versus US$217m) as PM2 enters the asset base [S3][S4]. Combined with rising net finance costs (US$81m in 9M FY2026 versus US$65m), the earnings bar has risen just as EBITDA has fallen.
Balance sheet (year-end September; June 2026 shown separately below)
FY2022 current assets include US$291m of assets held for sale (Aurelius mills) [S1].
Latest balance sheet (30 June 2026) [S4]:
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Total assets US$5,492m; PP&E US$3,142m
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Plantations US$326m, down from US$560m after a US$262m year-to-date price fair-value loss from rand strength
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Goodwill and intangibles US$29m
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Cash US$204m; gross borrowings US$2,076m; leases US$125m
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Net debt US$1,997m
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Equity US$1,782m; NAV per share 294 US cents
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Net current assets US$366m
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Undrawn committed RCFs US$579m, giving total liquidity of ≈US$783m
Commentary — balance sheet. Thrive25's balance-sheet objective was met by FY2023. Net debt reached US$1,085m, the lowest since the early 1990s, against a stated target of approximately US$1bn [S2]. Three things then reversed it:
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the PM2 programme (US$100m of capex in FY2023, ~US$154m budgeted for FY2024, US$228m in FY2025);
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Lanaken closure cash costs (US$280m of closure and restructuring payments in FY2024);
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the FY2025 profit collapse.
Net debt therefore rose 77% in two years to US$1,920m [S2][S3]. Equity has been eroded by US$796m since FY2024 through losses and impairments, reaching US$1,782m. Goodwill is now almost fully written off following the US$48m Matane-related goodwill impairment in FY2026 [S4].
Cash flow
Free cash flow is defined by the analyst as cash from operating activities with dividends paid added back, less capex. Closure costs paid in FY2021–FY2023 were not separately disclosed in the reviewed statements and are shown as 0.
Year-to-date cash flow (9M FY2026) [S4]: cash generated from operations US$138m; working capital inflow US$22m; closure costs paid US$29m; capex US$162m; net cash utilised US$86m. Full-year FY2026 capex guidance has been cut from ~US$290m (Nov 2025) to US$260m (Feb 2026), US$250m (May 2026) and ~US$240m (Aug 2026).
Commentary — cash flow. Sappi's cash conversion depends on the cycle. FY2022 generated US$514m of pre-dividend free cash flow despite a US$270m working-capital build. The two subsequent growth-capex years consumed a cumulative US$573m [S1][S3]. Management has responded decisively:
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no expansionary capex for two years;
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the dividend suspended from FQ3 FY2025;
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a US$120m FY2026 cost-savings target [S3][S5].
Even so, 9M FY2026 remained cash-negative, so deleveraging now depends on a pricing recovery and JV proceeds rather than on internal cash generation alone.
Ratios
Notes on the ratios:
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ROE and ROA use average balances; FY2021 ROA and asset turnover use year-end assets.
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ROIC is not disclosed; company ROCE (operating profit ex SI over average equity plus net debt) is the closest proxy.
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Working-capital days use cost of sales and "trade and other payables", which includes accruals.
At June 2026 the covenant leverage ratio was 6.9x, net debt/Adjusted EBITDA 6.5x and interest cover 0.5x [S4].
Commentary — ratios. Every solvency metric deteriorated sharply after FY2024. The cash conversion cycle lengthened by ~10 days in FY2025 as payables normalised from FY2024's elevated level. Interest cover of 0.5x at June 2026 (LTM EBITDA ex SI to net interest) is the single most alarming metric. It explains both the covenant suspension negotiated with the banking group to March 2027 and the rating-agency pressure (Moody's Ba2 negative; Fitch downgrade to BB) [S4][S10].
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Revenue by Segment
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Pulp revenue (USD Mn) | 952 | 1,260 | 1,296 | 1,169 | 1,162 |
Packaging and speciality papers revenue (USD Mn) | 1,578 | 2,107 | 1,755 | 1,697 | 1,814 |
Graphic papers revenue (USD Mn) | 2,740 | 3,975 | 2,794 | 2,527 | 2,372 |
Forestry revenue (USD Mn) | 83 | 88 | 80 | 65 | 72 |
Delivery cost revenue adjustment (USD Mn; FY2024–FY2025 already netted) | -88 | -134 | -116 | 0 | 0 |
Group revenue (USD Mn) | 5,265 | 7,296 | 5,809 | 5,458 | 5,420 |
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View Subscription PlansResults by Segment
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Pulp Adjusted EBITDA (USD Mn) | 197 | 325 | 238 | 284 | 228 |
Packaging and speciality papers Adjusted EBITDA (USD Mn) | 214 | 359 | 214 | 127 | 65 |
Graphic papers Adjusted EBITDA (USD Mn) | 120 | 650 | 271 | 259 | 192 |
Unallocated and eliminations (USD Mn) | 1 | 5 | 8 | 14 | 16 |
Results by Segment — Pulp operating profit ex SI
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Pulp operating profit ex SI (USD Mn) | 127 | 250 | 162 | 171 | 115 |
Packaging and speciality papers operating profit ex SI (USD Mn) | 109 | 264 | 119 | 66 | -39 |
Graphic papers operating profit ex SI (USD Mn) | -32 | 521 | 145 | 158 | 85 |
Segment Margins & Growth (%) and Revenue by Segment (%)
| Segment metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Pulp Adjusted EBITDA margin (%) | 18.4 | 24.3 | 19.6 |
P&SP Adjusted EBITDA margin (%) | 12.2 | 7.5 | 3.6 |
Graphic papers Adjusted EBITDA margin (%) | 9.7 | 10.2 | 8.1 |
Pulp revenue YoY growth (%) | 2.9 | -9.8 | -0.6 |
P&SP revenue YoY growth (%) | -16.7 | -3.3 | 6.9 |
Graphic papers revenue YoY growth (%) | -29.7 | -9.6 | -6.1 |
Pulp share of segment revenue (%) | 21.9 | 21.4 | 21.4 |
P&SP share of segment revenue (%) | 29.6 | 31.1 | 33.5 |
Graphic papers share of segment revenue (%) | 47.2 | 46.3 | 43.8 |
Operating Metrics (kt)
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Pulp volumes (kt) | 1,236 | 1,421 | 1,517 | 1,445 | 1,425 |
Packaging and speciality papers volumes (kt) | 1,464 | 1,600 | 1,251 | 1,348 | 1,458 |
Graphic papers volumes (kt) | 3,200 | 3,447 | 2,124 | 2,163 | 2,045 |
Forestry volumes (kt) | 1,439 | 1,469 | 1,390 | 1,011 | 1,154 |
Revenue by Segment (FY2025 9M–FY2026 9M)
| Segment (USD Mn) | FY2025 9M | FY2026 9M |
|---|---|---|
Pulp revenue | 871 | 804 |
P&SP revenue | 1,305 | 1,425 |
Graphic papers revenue | 1,802 | 1,672 |
Forestry revenue | 53 | 54 |
Pulp Adjusted EBITDA | 174 | 48 |
P&SP Adjusted EBITDA | 46 | -6 |
Graphic papers Adjusted EBITDA | 158 | 138 |
Income Statement and Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Revenue (USD Mn) | 5,265 | 7,296 | 5,809 | 5,458 | 5,420 |
Gross profit (USD Mn) | 549 | 1,370 | 907 | 776 | 537 |
SG&A expenses (USD Mn) | 376 | 410 | 365 | 403 | 367 |
Operating profit IFRS (USD Mn) | 146 | 770 | 380 | 182 | 6 |
Operating profit ex special items (USD Mn) | 203 | 1,038 | 432 | 407 | 176 |
Special items loss (USD Mn) | 57 | 268 | 52 | 225 | 170 |
Adjusted EBITDA comparable basis (USD Mn) | 532 | 1,339 | 731 | 684 | 501 |
EBITDA ex special items as reported (USD Mn) | 532 | 1,339 | 731 | 685 | 479 |
Depreciation and amortisation (USD Mn) | 329 | 301 | 299 | 278 | 303 |
Net finance costs (USD Mn) | 134 | 97 | 49 | 67 | 89 |
Profit before tax (USD Mn) | 12 | 673 | 331 | 115 | -83 |
Taxation (USD Mn) | -1 | 137 | 72 | 82 | 94 |
Net profit (USD Mn) | 13 | 536 | 259 | 33 | -177 |
Basic EPS (US cents) | 2 | 95 | 46 | 6 | -29 |
Diluted EPS (US cents) | 2 | 90 | 44 | 6 | -29 |
Headline EPS (US cents) | 5 | 130 | 50 | 1 | -15 |
Adjusted EPS / EPS ex SI (US cents) | 15 | 138 | 52 | 41 | 8 |
Dividend per share declared for year (US cents) | 0 | 15 | 15 | 14 | 0 |
Weighted avg shares basic (millions) | 549.7 | 563.3 | 563.6 | 582.4 | 603.9 |
Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Gross margin (%) | 10.4 | 18.8 | 15.6 | 14.2 | 9.9 |
Operating margin IFRS (%) | 2.8 | 10.6 | 6.5 | 3.3 | 0.1 |
Operating margin ex SI (%) | 3.9 | 14.2 | 7.4 | 7.5 | 3.2 |
Adjusted EBITDA margin (%) | 10.1 | 18.4 | 12.6 | 12.5 | 9.2 |
Net margin (%) | 0.2 | 7.3 | 4.5 | 0.6 | -3.3 |
Revenue growth YoY (%) | 0 | 38.6 | -20.4 | -6.0 | -0.7 |
Adjusted EBITDA growth YoY (%) | 0 | 151.7 | -45.4 | -6.4 | -26.8 |
Balance Sheet and Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Total assets (USD Mn) | 6,186 | 6,229 | 5,796 | 6,206 | 6,072 |
Property plant and equipment (USD Mn) | 3,325 | 2,705 | 2,886 | 3,241 | 3,414 |
Plantations (USD Mn) | 477 | 382 | 488 | 562 | 560 |
Goodwill and intangibles (USD Mn) | 110 | 89 | 88 | 95 | 87 |
Inventories (USD Mn) | 841 | 780 | 777 | 836 | 823 |
Trade and other receivables (USD Mn) | 703 | 939 | 658 | 771 | 682 |
Cash and equivalents (USD Mn) | 366 | 780 | 601 | 317 | 219 |
Interest-bearing borrowings non-current (USD Mn) | 2,062 | 1,688 | 1,329 | 1,537 | 1,546 |
Interest-bearing borrowings current (USD Mn) | 132 | 171 | 266 | 107 | 469 |
Lease liabilities and overdrafts (USD Mn) | 118 | 84 | 91 | 95 | 124 |
Total gross debt incl leases (USD Mn) | 2,312 | 1,943 | 1,686 | 1,739 | 2,139 |
Net debt (USD Mn) | 1,946 | 1,163 | 1,085 | 1,422 | 1,920 |
Shareholders equity (USD Mn) | 1,970 | 2,358 | 2,445 | 2,578 | 2,308 |
Trade and other payables (USD Mn) | 1,131 | 1,045 | 908 | 1,110 | 898 |
Current assets (USD Mn) | 1,931 | 2,799 | 2,054 | 1,998 | 1,739 |
Current liabilities (USD Mn) | 1,309 | 1,524 | 1,316 | 1,329 | 1,454 |
Working capital current assets less current liabilities (USD Mn) | 622 | 1,275 | 738 | 669 | 285 |
Net asset value per share (US cents) | 351 | 417 | 438 | 430 | 382 |
Shares in issue at year end (millions) | 561.5 | 565.2 | 558.8 | 599.4 | 604.6 |
Dividends & Capital Returns
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Cash generated from operations (USD Mn) | 472 | 1,267 | 659 | 550 | 443 |
Working capital movement (USD Mn) | 39 | -270 | 178 | 29 | -89 |
Cash from operating activities after interest tax and dividends (USD Mn) | 407 | 882 | 605 | 124 | 88 |
Capital expenditure (USD Mn) | 374 | 368 | 382 | 458 | 496 |
Free cash flow before dividends (USD Mn) | 33 | 514 | 308 | -250 | -323 |
Net cash generated per Sappi definition (USD Mn) | 29 | 506 | 210 | -306 | -369 |
Dividends paid (USD Mn) | 0 | 0 | 85 | 84 | 85 |
Share buybacks (USD Mn) | 0 | 0 | 22 | 0 | 0 |
Closure and restructuring costs paid (USD Mn) | 0 | 0 | 0 | 280 | 7 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Ratio | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Return on equity (%) | 0.7 | 24.8 | 10.8 | 1.3 | -7.2 |
Return on assets (%) | 0.2 | 8.6 | 4.3 | 0.5 | -2.9 |
ROCE company-reported pre-tax (%) | 5.4 | 27.9 | 12.3 | 10.8 | 4.3 |
Current ratio (x) | 1.48 | 1.84 | 1.56 | 1.50 | 1.20 |
Gross debt to equity (x) | 1.17 | 0.82 | 0.69 | 0.67 | 0.93 |
Net debt to EBITDA ex SI reported (x) | 3.7 | 0.9 | 1.5 | 2.1 | 4.0 |
Covenant leverage ratio (x) | 3.7 | 0.9 | 1.4 | 2.0 | 3.6 |
Interest cover company definition (x) | 5.5 | 15.6 | 6.4 | 10.9 | 6.1 |
Asset turnover (x) | 0.85 | 1.18 | 0.97 | 0.91 | 0.88 |
Days inventory outstanding (days) | 65.1 | 48.0 | 57.9 | 65.2 | 61.5 |
Days sales outstanding (days) | 48.7 | 47.0 | 41.3 | 51.6 | 45.9 |
Days payables outstanding (days) | 87.5 | 64.4 | 67.6 | 86.5 | 67.1 |
Cash conversion cycle (days) | 26.3 | 30.6 | 31.6 | 30.3 | 40.3 |
Revenue by Region
| Region | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
North America revenue (USD Mn) | 1,688 | 2,200 | 1,810 | 1,723 | 1,731 |
Europe revenue (USD Mn) | 2,499 | 3,803 | 2,622 | 2,321 | 2,240 |
South Africa pulp and paper revenue (USD Mn) | 1,083 | 1,339 | 1,413 | 1,349 | 1,377 |
South Africa forestry revenue (USD Mn) | 83 | 88 | 80 | 65 | 72 |
Delivery cost adjustment (USD Mn; FY2024–FY2025 netted) | -88 | -134 | -116 | 0 | 0 |
Results by Region
| Region | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
North America Adjusted EBITDA (USD Mn) | 209 | 464 | 267 | 201 | 133 |
Europe Adjusted EBITDA (USD Mn) | 94 | 536 | 124 | 129 | 64 |
South Africa Adjusted EBITDA (USD Mn) | 228 | 334 | 332 | 340 | 288 |
Region Margins & Growth (%)
| Region | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
North America revenue growth (%) | -17.7 | -4.8 | 0.5 |
Europe revenue growth (%) | -31.1 | -11.5 | -3.5 |
South Africa pulp and paper revenue growth (%) | 5.5 | -4.5 | 2.1 |
Region Overview
| Region | Revenue | Adjusted EBITDA |
|---|---|---|
Europe | €2.03bn | €58m |
North America | US$1.73bn | US$133m |
South Africa | ZAR26.18bn | ZAR5.2bn |
Revenue by Region (%)
| Destination | FY2022 | FY2025 | FY2026 9M |
|---|---|---|---|
Europe share of sales (%) | 44 | 36 | 37 |
North America share of sales (%) | 29 | 30 | 31 |
Asia and other share of sales (%) | 19 | 24 | 22 |
South Africa share of sales (%) | 8 | 10 | 10 |
Revenue by Region (Quarterly)
| Region metric | Q1 FY2026 | Q2 FY2026 | Q3 FY2026 |
|---|---|---|---|
Europe revenue (EUR Mn) | 457 | 492 | 466 |
Europe Adjusted EBITDA (EUR Mn) | 33 | 17 | 12 |
North America revenue (USD Mn) | 395 | 420 | 454 |
North America Adjusted EBITDA (USD Mn) | -1 | 7 | 22 |
South Africa revenue (ZAR Mn) | 6,164 | 5,522 | 5,591 |
South Africa Adjusted EBITDA (ZAR Mn) | 805 | 334 | 194 |
Start by Period
| Period | Start | End | Change |
|---|---|---|---|
1 year (Oct 2025 to Oct 2026, ADR) | US$1.38 | ~US$0.90 | ≈ -35% |
3 years (Oct 2023 to Oct 2026, ADR, adjusted) | US$1.90 | ~US$0.90 | ≈ -53% |
5 years (Oct 2021 to Oct 2026, ADR, adjusted) | US$2.57 | ~US$0.90 | ≈ -65% |
JSE, calendar 2025 (to 6 Nov 2025) | R54.10 | R25.20 | ≈ -53% |
JSE 52-week range (as of 24 Jul 2026) | Low R8.64 | High R31.00 | — |
Share Price
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
SPPJY price at October following fiscal year start (USD) | 2.69 | 1.90 | 2.76 | 1.38 | 0.90 |
Valuation Multiples
| Multiple | Sappi | Basis |
|---|---|---|
P/E | Not meaningful (LTM loss) | 9M FY2026 loss US$631m |
EV/Adjusted EBITDA (LTM) | ≈8.3x | EV ≈ US$2,543m (US$546m equity + US$1,997m net debt) / LTM Adjusted EBITDA US$306m (Q4 FY2025 111 + Q1–Q3 FY2026 195) |
EV/Sales (LTM) | ≈0.48x | LTM revenue US$5,344m |
P/B | ≈0.31x | Equity US$1,782m (Jun 2026) |
Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Dividend per share declared (US cents) | 0 | 15 | 15 | 14 | 0 |
Credit Ratings
| Agency | Rating | Outlook | Notes |
|---|---|---|---|
Moody's | Ba2 (CFR) | Negative (changed from stable) | Affirmed ratings on €400m 2028, €300m 2032 and US$250m 2032 notes; expects leverage to peak mid-FY2026 and fall below 4x by Sep 2027 |
Fitch | BB (downgraded from BB+) | Stable | Cites FY2025 gross/net leverage of 4.5x/4.3x; downgrade triggers include gross debt/EBITDA not below 3.5x by 2027 and EBITDA margin below 9% |
Capital Instruments
| Instrument | Amount | Maturity | Notes |
|---|---|---|---|
Current interest-bearing borrowings | US$406m (Jun 2026) | Within 12 months | Mix of South African and European facilities [S4] |
Senior notes (EUR) | €400m | 2028 | Rated by Moody's [S10] |
Syndicated term loan (EUR) | €200m | ~2031 (five-year from Jan 2026) | Used to term out short-term debt [S4] |
Sustainability-linked senior notes (EUR) | €300m, 4.500% | 2032 | Issued Mar 2025 [S3] |
Senior notes (USD) | US$250m | 2032 | Rated by Moody's [S10] |
Committed RCFs (South Africa and Europe) | US$579m undrawn (Jun 2026) | — | Liquidity backstop [S4] |
“—” = not publicly disclosed.
Analyst Conclusions
Management guidance (as of 6 Aug 2026) [S4]:
-
Q4 FY2026 Adjusted EBITDA expected to be "materially above" Q3's US$53m, driven by:
-
lagged benefit from higher DWP prices;
-
continued PM2 ramp-up;
-
NA paperboard price increases;
-
lower maintenance costs (Saiccor shut of only ~US$7m).
-
-
FY2026 capex of ~US$240m.
-
Positive forestry fair-value adjustment expected in Q4.
-
JV conditions targeted for completion by end-2026.
Arithmetically, FY2026 Adjusted EBITDA will equal 9M FY2026 (US$195m) plus Q4. The full year will therefore sit somewhat above ~US$250m but roughly half of FY2025's US$501m.
Consensus. A modest Q4 loss of about US$0.02 per ADR is expected (EarningsWhispers). No reliable multi-year consensus was captured.
Bull case:
-
Pricing turn under way. The DWP price rose to US$898/t by June 2026 and is still climbing on healthy VSF fundamentals. Every US$50/t across ~1.4Mt of pulp-segment volumes is material relative to a ~US$300m EBITDA base [S3][S4].
-
PM2 operating leverage. NA Adjusted EBITDA swung from US$-1m (Q1) to US$22m (Q3) as volumes ramped. Industry-wide paperboard price increases and the ~US$300m revenue potential could add meaningful EBITDA once at design speed [S4]; Business Day.
-
JV crystallises Europe. Deconsolidating a structurally declining business with ≥€100m synergies, receiving €90m cash and keeping divestment optionality would leave Sappi as a cleaner DWP-plus-packaging company trading at about 0.3x book [S4][S8].
Bear case:
-
Covenant and refinancing risk. Testing resumes in March 2027 from a 6.9x ratio. Without a sharp EBITDA recovery, a further waiver or an equity raise is plausible, implying dilution of an equity worth only ~US$0.5bn [S4].
-
JV regulatory failure. The EC Statement of Objections signals real prohibition or remedy risk. Without the JV, Sappi retains loss-prone European graphic assets and lacks the cash proceeds [S8].
-
Macro and currency. Rand strength and Middle-East input inflation have already erased South African profitability (Q3 margin 3.5%), while P&SP has negative Adjusted EBITDA over nine months despite volume growth [S4].
Key catalysts and monitorables (next 12 months):
-
EC decision on the JV (deadline 26 Oct 2026) and any remedies.
-
FY2026 results (6 Nov 2026): Q4 EBITDA delivery, net debt, FY2027 capex and dividend stance.
-
JV closing (targeted end-2026) and receipt of the €90m.
-
CCF hardwood DWP price and VSF operating rates.
-
ZAR/US$ exchange rate.
-
PM2 reaching design speed; realisation of NA paperboard price increases.
-
Covenant renegotiation or reset ahead of March 2027.
-
Rating actions by Moody's and Fitch.
-
2027 AGM board transition (new Lead Independent Director and HR&C chair).
Analyst verdict. Sappi enters FY2027 at the weakest point of its post-2020 cycle. The combination of high leverage and depressed earnings has displaced its operating story as the main driver of equity value. The strategic logic of the last five years is sound:
-
shrink European graphic paper, a market in permanent decline;
-
build a cost-competitive US SBS position;
-
protect and grow a plantation-backed DWP franchise whose margins remain best-in-group even in a downturn.
What went wrong was timing and scale. The PM2 spend, Lanaken closure cash costs and a US$85m annual dividend coincided with a synchronised pricing collapse across all three segments, the rand strengthening against the dollar and tariff-driven trade dislocation. Net debt rose from US$1.1bn to US$2.0bn as EBITDA fell by roughly 60% from FY2023 to an LTM level near US$300m. The resulting 6.5x leverage leaves little room for error.
The near-term path is binary and largely external. Two variables dominate: a positive EC decision followed by JV closing, and a sustained DWP and paperboard price recovery. If both arrive, Sappi could plausibly rebuild EBITDA towards FY2024-type levels over two to three years, delever below 4x by late FY2027 (in line with Moody's expectations) and re-rate from about 0.3x book. If either fails, the March 2027 covenant reset becomes the defining event, and equity holders face meaningful dilution risk.
On balance, Sappi is a high-beta recovery situation with real asset value (DWP mills, plantations, Somerset). The FY2026 results on 6 November and the October EC decision should be treated as gating items before taking a fundamental position. On this evidence, the risk-reward is speculative-positive only for risk-tolerant capital and neutral-to-negative for income or quality-focused mandates.
Data integrity notes
-
FY2021–FY2023 revenue is gross of agent delivery costs; FY2024–FY2025 is net. FY2024 is restated per the FY2025 booklet.
-
"Adjusted EBITDA (comparable basis)" uses EBITDA ex special items for FY2021–FY2023, when the plantation price adjustment was itself a special item, and reported Adjusted EBITDA for FY2024–FY2025.
-
Aggregator-sourced items (remuneration, credit-rating summaries, share prices, analyst targets, employee counts) are flagged [S10] and should be checked against the 2025 Integrated Report and agency releases.
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View Subscription PlansExecutive Leadership
Executive Leadership Team
| Name | Title | Tenure / background | Age (where reported) | Source |
|---|---|---|---|---|
Stephen (Steve) Binnie | CEO and Executive Director | CEO since 1 Jul 2014; joined July 2012 as CFO designate, CFO from 1 Sep 2012; previously CFO of Edcon for ~10 years; B.Com, B.Acc, CA(SA), MBA | 58 | [S9]; GlobalData; Simply Wall St |
Glen Pearce | CFO and Executive Director | Joined Sappi June 1997; CFO since July 2014; CA(SA) | 62 | [S9]; GlobalData |
Marco Eikelenboom | CEO, Sappi Europe | CEO since 1 Apr 2021; previously VP Marketing and Sales, Graphic Papers | 58 | [S9]; GlobalData |
Michael (Mike) Haws | CEO, Sappi North America | — | — | [S9] |
Graeme Wild | CEO, Sappi Southern Africa | CEO since 1 Dec 2024; joined 1995 as forester; former Group Head IR; BSc (Forestry), MBA | 52 at appointment (Sep 2024) | [S7][S9] |
Fergus Marupen | Group Head Human Resources (role per Sappi biography; aggregator labels differ) | Joined 1 Mar 2015; ex-BUSA acting COO; ex-Absa Group Executive HR; Kumba and BHP Billiton roles | — | [S9] |
EVP, Sappi Pulp | Executive Vice President, Sappi Pulp | Joined ExCo January 2018; previously GM Pulp in Hong Kong (from June 2007) and VP Pulp Sales in New York; name not captured in sources reviewed | — | [S9] |
Group Head Manufacturing & Innovation | ExCo member since 2024 | Name not captured in sources reviewed | — | [S9] |
Mr van Hoven | Group legal head; custodian of the Code of Ethics and Group Legal Compliance Programme | First name not captured | — | [S9] |
Marjorie Boles | Group CIO (Group Management Committee) | CIO since 2018; with Sappi since 1999 | 55 | GlobalData; [S9] |
Ami Mahendranath | Group Company Secretary | Joined November 2017 | — | [S9] |
Tracy Wessels | Group Head IR and Sustainability | Investor and media contact | — | Engineering News; [S4] |
Andre Oberholzer | Group corporate affairs / media contact | Media contact on results releases | — | [S6] |
Directors' Remuneration
| Executive | Total remuneration FY2025 (USD K) | Source |
|---|---|---|
Steve Binnie, CEO | 1,210 | Simply Wall St [S10] (derived from Sappi 2025 remuneration disclosure) |
Marco Eikelenboom, CEO Europe | 1,100 | Simply Wall St [S10] |
Mike Haws, CEO North America | 721 | Simply Wall St [S10] |
Executive labelled EVP Sappi Pulp | 691 | Simply Wall St [S10] |
Glen Pearce, CFO | 685 | Simply Wall St [S10] |
Graeme Wild, CEO Southern Africa | 416 | Simply Wall St [S10] |
Board of Directors
| Director | Role | Appointed | Committees / notes | Source |
|---|---|---|---|---|
Nkululeko (Nkunku) Sowazi | Independent Chairman | INED 1 Oct 2022; Chairman from 7 Feb 2024 AGM | Chair, Nomination & Governance; executive chairman and co-founder of Tiso Investment Holdings; incoming chair of Investec Bank Ltd (from 6 Aug 2026) | [S7]; billionaires.africa |
Steve Binnie | CEO, executive director | 2012 (board) | Executive | [S9] |
Glen Pearce | CFO, executive director | 2014 (board) | Executive | [S9] |
Mike Fallon | Lead Independent Director | 1 Sep 2011 | Chair, HR & Compensation; member of Audit & Risk, Nomination & Governance and SETS; retires at the 2027 AGM | [S7] (4 Sep 2026) |
Rob-Jan Renders | INED (Dutch) | 1 Oct 2015 | Audit & Risk; HR & Compensation; retires 2027 AGM; re-election support only 67.61% at the Feb 2026 AGM | [S7] |
Dr Boni Mehlomakulu | INED | 1 Mar 2017 | SETS; Audit & Risk; retires 2027 AGM after more than nine years | [S7] |
Zola Malinga | INED | October 2018 | — | [S7] |
James (Jim) Lopez | INED | 2019 (per aggregator) | — | [S10] |
Louis von Zeuner | INED | 1 Sep 2022 | Former Deputy Group CEO, Absa | [S7] |
Eleni Istavridis | INED | 3 Oct 2022 | Former EVP and Global Operating Committee member; Sonoco Products board | [S7] |
Busisiwe Silwanyana CA(SA) | INED | 4 Sep 2026 | Old Mutual and Stefanutti Stocks boards; founder and CEO of Laud Pulse | [S7] |
Charles Brand | INED | 4 Sep 2026 | 41-year Tetra Pak career; EVP Processing Solutions & Equipment 2021–2025 | [S7] |
B R Beamish; J E Stipp | INEDs listed in Profile's Handbook 2025 | — | — | [S10] |
Major Shareholders
| Holder | Disclosed interest (%) | Date of notification | Source |
|---|---|---|---|
Public Investment Corporation (PIC) | 20.168 | 21 Apr 2022 (dated) | [S7] |
Allan Gray (clients) | 15.0167 | 14 Jun 2022 (dated) | [S7] |
Ninety One SA (clients) | 11.3838 | 28 Mar 2025 | [S7] |
M&G Investment Managers (clients) | 10.05 | 13 Nov 2025 | [S7] |
Coronation Asset Management (clients) | 5.31 | 21 Oct 2025 | [S7] |
PSG Asset Management | 5.22 | Jul 2026 | financialfilings.com [S10] |
Legal & General Investment Management | 5.03 | 9 Jul 2026 | financialfilings.com [S10] |
Competitive Landscape
Competitors by Segment
| Segment | Competitor | Positioning versus Sappi | Latest revenue (where verified) |
|---|---|---|---|
Dissolving wood pulp | Bracell (RGE group) | Large-scale Brazilian DWP/swing producer; cost leader | — |
Dissolving wood pulp | Aditya Birla group (Grasim / AV Group / Domsjö) | Integrated DWP-to-VSF producer | — |
Dissolving wood pulp | Lenzing | Integrated cellulose-fibre producer with own DWP; also a potential customer | — |
Dissolving wood pulp | Rayonier Advanced Materials | High-purity cellulose specialist | — |
Dissolving wood pulp | Chinese swing mills | Switch between DWP and paper pulp; caused FY2025 price pressure | — |
Graphic paper (Europe) | UPM Communication Papers | Largest European graphic producer; prospective JV partner | UPM group sales €9,656m (FY2025) [S11] |
Graphic paper (Europe) | Lecta, Burgo, Norske Skog | Coated woodfree and mechanical competitors | — |
Graphic paper (NA) | Domtar / Paper Excellence, ND Paper, Pixelle | Coated and uncoated NA competitors | — |
SBS paperboard (NA) | Graphic Packaging, Smurfit Westrock, Clearwater Paper | Incumbent SBS producers competing with Somerset PM2 | — |
Folding boxboard / SBB (Europe) | Stora Enso, Metsä Board, Holmen Iggesund, Billerud | Premium carton board | Stora Enso sales €9,326m (FY2025) [S11] |
Labels and speciality | Ahlstrom, UPM Specialty Papers / Raflatac, Fedrigoni, Lecta (Adestor) | Label face stock and release competitors | — |
Containerboard / office paper (South Africa) | Mondi, Mpact, imports | Local integrated competitors plus low-priced imports | Mondi revenue €7,663m (FY2025) [S11] |
Peer Comparison FY2025
| Metric | Sappi FY2025 (Sep) | UPM FY2025 (Dec) | Mondi FY2025 (Dec) | Stora Enso FY2025 (Dec) |
|---|---|---|---|---|
Revenue | US$5,420m | €9,656m | €7,663m | €9,326m |
Revenue growth YoY | -0.7% | -6.6% | +3% | +3.1% |
Profitability measure | Adj. EBITDA margin 9.2%; op. margin ex SI 3.2% | Comparable EBIT margin 9.5% | Underlying EBITDA margin 13.1% | Adjusted EBIT margin 5.7% |
Net debt / EBITDA | 4.0x (EBITDA ex SI) | Not captured | Not captured | 2.8x (adjusted) |
R&D intensity | — | Not captured | Not captured | Not captured |
“—” = not publicly disclosed.
