49
13 August 2018 Chief Executive Officer Steve Binnie Sappi Limited Q3 FY18 financial results delivering on strategy 2018 Vision 2020 intentional evolution next phase growth 1
13 August 2018
Chief Executive Officer
Steve Binnie
Sappi Limited
Q3 FY18 financial results delivering on
strategy
2018
Vision2020
intentionalevolution
next phase
growth
1
Forward-looking statements and Regulation G
2
Forward-looking statementsCertain statements in this release that are neither reported financial results nor other historical information, are forward-looking statements, including but not limited to statements that are predictions ofor indicate future earnings, savings, synergies, events, trends, plans or objectives. The words “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “assume”, “positioned”, “will”, “may”, “should”,“risk” and other similar expressions, which are predictions of or indicate future events and future trends and which do not relate to historical matters, identify forward-looking statements. In addition, thisdocument includes forward-looking statements relating to our potential exposure to various types of market risks, such as interest rate risk, foreign exchange rate risk and commodity price risk. Youshould not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are in some cases beyond our control and may cause our actualresults, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements (and from past results,performance or achievements). Certain factors that may cause such differences include but are not limited to:
The highly cyclical nature of the pulp and paper industry (and the factors that contribute to such cyclicality, such as levels of demand, production capacity, production, input costs including rawmaterial, energy and employee costs, and pricing)
The impact on our business of adverse changes in global economic conditions Unanticipated production disruptions (including as a result of planned or unexpected power outages) Changes in environmental, tax and other laws and regulations Adverse changes in the markets for our products The emergence of new technologies and changes in consumer trends including increased preferences for digital media Consequences of our leverage, including as a result of adverse changes in credit markets that affect our ability to raise capital when needed Adverse changes in the political situation and economy in the countries in which we operate or the effect of governmental efforts to address present or future economic or social problems The impact of restructurings, investments, acquisitions, dispositions and other strategic initiatives (including related financing), any delays, unexpected costs or other problems experienced in
connection with dispositions or with integrating acquisitions or implementing restructurings or other strategic initiatives, and achieving expected savings and synergies, and Currency fluctuations.
We undertake no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information or future events or circumstances or otherwise.
Regulation G disclosureCertain non-GAAP financial information is contained in this presentation that management believe may be useful in comparing the company’s operating results from period to period. Reconciliation's ofcertain of the non-GAAP measures to the corresponding GAAP measures can be found in the quarterly results booklet for the relevant period. These booklets are available on our website:https://www.sappi.com/quarterly-reports.
3
Summary
Highlights
EBITDA ex-special items: US$155m (Q3 FY17: US$155m)
Profit for the period: US$51m (Q3 FY17: US$58m)
EPS ex-special items: 10 US cents (Q3 FY17: 11 US cents)
Net debt: US$1,603m (Q3 FY17: US$1,318)
Q3 FY18
4
From paper to woodfibre
5
Transition from global paper company to global woodfibre business
3 phases since 2010
Balance 2010-2013: reduce balance sheet risk while investing in DWP and speciality packaging
Debt reduction 2014-2016: reduce leverage from 4.6X to below 2X Net debt:EBITDA
Growth : 2017-2020: Strong positions in DWP and packaging give rise to growth opportunities
Global trends shifting in Sappi’s favour Sustainability driving textile and packaging industries
Growth in paper based packaging, rising pulp costs and recycled paper trade flows encourage graphic paper
conversions and closures
Bio-chemicals and biomaterials offer interesting new growth opportunities while supporting existing businesses
6
Transformation – from paper to woodfibre
* EBITDA excluding special items
22 22
60
0
10
20
30
40
50
60
70
2010 2014 Q3 2018 LTM
US
CEN
TSEPS excluding special items
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2014 Q3 2018 LTM
EBITDA* by Segment
Specialised cellulose Specialities and packaging papers Printing and writing papers
3430 30
74
1310
8 9
05
10152025303540
2010 2014 Q3 2018 LTM
%
Segment analysis: EBITDA* margin
Specialised cellulose Specialities and packaging papers
Printing and writing papers
Sappi specialities and packaging papers
7
Global production sites with the ability to switch between graphics and packaging at various sites*
Alfeld Mill (Germany)Containerboard, flex-pack, label,
paperboard, silicone base papers
Carmignano Mill (Italy)Flexible packagingand functional papers
Condino Mill (Italy)Flexible packaging
and functional packaging
Cloquet Mill* (USA)Label papers
Ehingen Mill* (Germany)Containerboard
Maastricht Mill* (The Netherlands)Paperboard
Ngodwana Mill (South Africa)Containerboard
Somerset Mill* (USA)Label paper and flexible packaging paper
Tugela Mill (South Africa)Containerboard
Westbrook Mill (USA)Silicone base papers
Stockstadt Mill* (Germany)Flexible packaging
and functional papers
Specialities and Packaging Papers
8
Trends in our market
o Easy opening
o More functionality and
convenience
o Smaller pack sizes
Demographic ChangeRegulations
o Food safety – Mineral oil
barriers
o Plastic bans and waste
directive
Technology and Innovations
o Traceable packaging
o Customized packaging
o Smart/active packaging
Economic Concerns
o Cost reduction (TCO)o Light weighting and
down gauging
Specialities and Packaging Papers
9
Trends in our market
Regulations
o Food safety – Mineral oil
barriers
o Plastic bans and waste
directive
Dissolving wood pulp market
10
Viscose-grade DWP demand growth
Source: Sappi; Hawkins Wright; RISI.
OtherEurope Americas China
0.2
6.1
0.6
0.6
1.7
3.7
1.9
7.5
Market size 2017 Mtpa
CAGR 2010-17%
Viscose
Cellulose ethers and MCC
Cellulose acetate tow
Nitro-cellulose and other
Products (examples)
7.5 ~6-7Total
Rayon Grade
High-alpha/Speciality
DWP gradeDemand geography
Applications (examples)• Textiles (viscose)• Non-wovens• Cellophane• Sausage skins
• Construction• Food additives• Medicine fillers• Cosmetics
• Cigarette filters• Paints and coatings• Films• Plastics
• Explosives• Inks• Lacquers• Nail polish
Fibre properties and applications
11
Cellulosic fibre properties helping drive that growth
Source: IHS Global, RISI, Hawkins Wright.
Key strength Qualifies Issue
ApparelHome textilesNonwovens/Technical textiles
Overall value proposition
Applications
Function and feel
Appearance
Sustainability
1762
21
6627
7
5220
28
Cellulosic fibres Cotton Polyester
• On a pure property basis, cellulosic fibres are superior to cotton and differentiated on sustainability.
• Polyester is differentiated on strength/durability versus cotton and cellulosic fibres.
• Natural and attractive, ‘greener’ alternative to cotton
• Natural, functional and well established
• Cheap, durable and versatile
Durability
Absorbency Breathability Softness
Drape Dyeability
Brightness/Lustre
Renewable and biodegradeable
Resource efficiency
Q3 FY18
Specialities and Packaging Papers Maastricht:
On time, within budget, legacy products qualified at lower costs
New product trials are testing well, larger volumes across all basis weights in time for September roll-out
Ehingen: On time, within budget Carouseling stage set
Somerset: Delayed and overrun Legacy products qualified at lower costs Currently optimizing new products
12
Update on conversions and debottlenecking
Specialised Cellulose Ngodwana:
After late start up and commissioning, focus is on September evaporator upgrade to get to the planned 250ktpa
Saiccor: Head-box and sheet former issues are
behind us, now operating at full capacity (780ktpa)
EBITDA and operating profitExcluding special items*
13
* Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.
160
155
155
97 93
850
20
40
60
80
100
120
140
160
180
Q3 FY16 Q3 FY17 Q3 FY18
US$
milli
on
EBITDA Operating profit
Key ratios Q3 FY16 Q3 FY17 Q3 FY18
Net debt/LTM EBITDA 2.2 1.7 2.1
Interest cover 7.0 8.4 11.0
EBITDA % 13.1 12.3 10.7
ROCE % 14.0 12.8 9.7
• US$8m impact of Somerset shut overrun• US$3m due to DWP startup issues South Africa
155
(77)
(28)(4)
2
155
13
94
0
50
100
150
200
250
300
EBITDAQ3 FY17
Sales Volume Price & Mix Variable &Delivery Costs
Fixed Costs Other Exchange Rate EBITDAQ3 FY18
EBITDA* bridgeQ3 FY17 to Q3 FY18
14
* EBITDA = EBITDA excluding special items
Sales revenue
US$
milli
on
Notes:
1. All variances were calculated excluding Sappi Forestry.
2. “Exchange rate” reflects transactional and translation effect on consolidation.
JunExchange rates: 2018 2017Average rate for the quarter: US$1 = ZAR 12.6312 13.1875Average rate for the quarter: €1 = US$ 1.1920 1.1011
Product contribution split – LTM
15
* Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items. Data above excludes treasury operations and insurance captive.
41%
18%
41%
SpecialisedCellulose
Specialities &PackagingPapersPrinting Papers
54%
17%
29%
EBITDA excluding special items Operating profit excluding special items
Maturity profileFiscal years
16
317
74
129 47 46
548
451
70
221
365
83
0
100
200
300
400
500
600
2018 2019 2020 2021 2022 2023 2024 2032
US$
milli
on
Cash Short-term SPH term debt Securitisation SSA
EUR450m bond
EUR350m bond
US$221m bond
Capex development
17
0
100
200
300
400
500
600
700
2013 2014 2015 2016 2017 2018F 2019E
US$
milli
on
Maintenance Efficiency and expansion
Saiccor expansion capex subject to EIA approval
18
Divisional overview
Global P&W paper market trends
19
Supply and demand Operating rates remain healthy – CM partially at expense of CWF in EU. Capacity closures and conversions (many to recycled containerboard) in North America and
Europe
Selling prices and input costs Paper prices rising globally, tracking pulp price increases Lag effect between pulp and paper prices
Strategy Capacity conversions into other markets (Somerset/Maastricht/Lanaken/Ehingen) Flexibility post conversion at Somerset and Maastricht to take advantage of market dynamics Investments at key mills/machines to lower costs Procurement and efficiency programs to further reduce costs.
Global speciality & packaging paper market trends
20
Supply and demand Environmental concerns spurring legislation incentivising the use of more paper-based
packaging Negative public perception weighs on plastic packaging Conversions into recycled grades driven by China ban on RCP
Selling prices and input costs Price increases announced in April – lag due to contract term Softwood and hardwood fiber costs continue to rise
Strategy Acquisition of Cham speciality paper business Increase capacity and product offering to a growing customer base Procurement and efficiency programs to further reduce costs Transfer of Rockwell technology to paper based products
Global DWP market trends
21
Supply and demand Continued strong demand from new viscose capacity – depressing VSF prices New market DWP capacity likely in 2019 – limited capacity addition 2018. Cotton tariffs causing uncertainty in textile markets
Selling prices and input costs DWP market prices steady – range-bound between BEK and VSF Weakening RMB places further pressure on US$ input costs of VSF producers
Strategy Long-term global growth opportunities Align growth with leading VSF customers – environmental and social performance key Do not overpay for assets in heated paper pulp market
Strong performance despite cost pressures CM demand good, aided by market dynamics in adjacent grades Cham Paper exceeded expectations Fixed costs higher due to maintenance/headcount increase Lower latex and energy costs partially mitigated the impact of higher pulp prices
22
Sappi Europe
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
Q3 FY15 Q3 FY16 Q3 FY17 Q3 FY18
Eurm
illion
EBITDA* EBITDA Margin*
* EBITDA and EBITDA margin shown exclude special items. Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.
600
650
700
750
800
850
900
950
Jan-
17
Apr-1
7
Jul-1
7
Oct
-17
Jan-
18
Apr-1
8
Jul-1
8
BHKP Europe (EUR) CWF-S 100g, Germany
Profitability improved marginally versus last year – US$8m impact from PM1 overrun Average realised coated paper prices were up 12% y-o-y 12% increase in DWP volumes from Cloquet partially offset the rise in paper pulp prices PM1 conversion completed, although was behind schedule and approximately US$35-50m over
budget
23
Sappi North America
* EBITDA and EBITDA margin shown exclude special items. Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.** Source: RISI
0%
1%
2%
3%
4%
5%
6%
7%
0
5
10
15
20
25
Q3 FY15 Q3 FY16 Q3 FY17 Q3 FY18
US$
milli
on
EBITDA* EBITDA Margin*
800
820
840
860
880
900
920
940
960
980No 3 Coated freesheet - 60 lb (90g) rolls US$/ton - US East**
Weaker result due to currency and poor re-starts from scheduled shuts/upgrades DWP sales volumes affected and inventories are low – prices stable Results from paper business were strong due to higher volumes and prices Increased variable and fixed costs, exacerbated by the extended downtime
24
Sappi Southern Africa
* EBITDA and EBITDA margin shown exclude special items. Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.** Source: CCF
0%
5%
10%
15%
20%
25%
30%
35%
40%
200
400
600
800
1000
1200
1400
Q3 FY15 Q3 FY16 Q3 FY17 Q3 FY18
ZAR
milli
on
EBITDA* EBITDA Margin*
800
825
850
875
900
925
950
975
1000China market price – Hardwood DWP (US$/ton)**
Maintaina healthybalancesheet
Rationalisedeclining
businesses
Accelerate growth in
higher margin growth
segments
Achievecost
advantages
Improveoperational
and machineefficiencies
Maximiseprocurement
benefits Optimisebusiness
processes
Continuouslybalance
paper supplyand demandin all regions
Wherepossible
convert papermachines tohigher marginbusinesses
Optimiseworkingcapital
Strongcash
generationSmart
financing
Expandpaper
packaginggrades
Enhancespecialised celluloseportfolio
Extractvalue from our
biorefinerystream
Our group strategy
25
At Sappi we do business with integrity and courage; making smart decisions which we execute with speed.Our values are underpinned by an unrelenting focus on and commitment to safety.
Achievecost
advantages
Improveoperational
and machine efficiencies
Maximiseprocurement
benefitsOptimisebusiness
processes
Our group strategy
26
We work to lower fixed and variable costs, increase cost efficiencies and invest for cost advantages. Group efficiency and procurement initiatives
US$60m target for 2018. Ongoing continuous improvement across all mills. Debottleneck pulp capacity in Europe Saiccor expansion will lead to lower variable costs €30m upgrade to Gratkorn PM9
Rationalisedeclining
businesses
Continuouslybalance
paper supplyand demand in all regions
Wherepossible
convert paper machines tohigher margin
businesses
Our group strategy
27
Recognising the decreasing demand for graphic paper, we manage our capacity to strengthen our leadership position in these markets, realising their strategic importance to the group and maximising their significant cash flow generation. Progressive transition of Lanaken Mill out of LWC. Reduced CWF exposure at Maastricht Mill, Ehingen
Mill and Somerset Mill PM1. Conversion of Somerset PM1 and Maastricht Mill
Maintaina healthybalancesheet
Optimiseworkingcapital
Strongcash
generationSmart
financing
Our group strategy
28
Maintain leverage below 2x Net debt:EBITDA Finance costs US$60-70m/annum going
forward. Renewal of RCF Lower spread (165bp), cost and commitment fee Additional flexibility for acquisitions and disposals
Accelerategrowth in
higher margingrowth
segments
Extractvalue from our
biorefinerystream
Enhancespecialisedcelluloseportfolio
Expandpaper
packaginggrades
Our group strategy
29
We will make investments in existing and adjacent areas with strong potential growth. Debottlenecking of Saiccor, Cloquet and Ngodwana
DWP. Investments in Speciality packaging incl. Rockwell and
Cham Paper Additional packaging at Ngodwana and Tugela Mills. Securing additional HW timber supply. Biomaterials, bio-chemicals – lignins, sugars. Xylitol and Furfural demo plant to be built at Ngodwana Expansion of Saiccor by 110kt/annum
Accelerategrowth in
high marginproducts
Extractvalue from our
biorefinerystream
Enhancespecialisedcelluloseportfolio
Expandpaper
packaginggrades
Our group strategy
30
Ngodwana Energy Biomass Facility ZAR1.8bn 25MW boiler approved by DoE Construction begins Q3 FY18, expected completion
Q4 FY20 Sappi share ZAR139m = 30% equity stake ROI~19% Significant BBBEE benefits
Accelerategrowth in
higher margingrowth
segments
Extractvalue from our
biorefinerystream
Enhancespecialisedcelluloseportfolio
Expandpaper
packaginggrades
Speciality and packaging papers expansion plans
31
Europe Maastricht: construction done, 2 year ramp-up
-160k CWF, +150k specialities (FBB) Ehingen: to be completed Q3 FY18, 1.5 year ramp-up
-75k CWF, +60k specialities (WTL) Alfeld: construction to start FY19, done Q4 FY20
+10k specialities (Various) Lanaken: enable CWF on PM8, as market develops
North America Somerset: construction done, 3 year ramp up
-150k CWF, +350k specialities (SBS)
Accelerategrowth in
higher margingrowth
segments
Extractvalue from our
biorefinerystream
Enhancespecialisedcelluloseportfolio
Expandpaper
packaginggrades
DWP expansion plans
32
Debottlenecking Saiccor – 10kt complete April 2018 Ngodwana – 50kt complete September 2018 Cloquet – 30kt complete Q3 2019
additional 70kt swing capacity available
Expansion Saiccor – 110kt ≈Q3 2020 subject to positive EIA
External Paper pulp prices impacting valuations and returns
33
Outlook
DWP market is tightly supplied, limited new capacity in medium term
Operating rates in EU and NA remain healthy, average realised prices continue to rise
Good demand growth for specialities and packaging papers. Commercial sales from
conversions expected to start Q4 and ramp up in 2019
Q4 capex expected to be approximately $180m – majority at Saiccor, Ngodwana and Somerset
We expect to reduce net debt further with positive cash generation during the quarter
Given current market conditions and exchange rates, we expect our Q4 operating performance
to be similar to that of last year despite lost production/lower inventories from Q3
34
Outlook
Thank you
35
36
Supplementary information
Excluding special items*
37
EBITDA and operating profit
* Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.
175
195
160
209
201 20
8
155
221
172
211
155
112
133
97
145
136 14
5
93
152
105
142
85
0
50
100
150
200
250
US$
milli
on
EBITDA Operating profit ex special items
38
Net debt/EBITDA development
* EBITDA is excluding special items.** The covenant Net debt/LTM EBITDA calculation has adjustments and therefore differs from that shown above.
2,38
0
2,24
8
2,28
6
1,94
6 2,04
0
1,91
6
1,91
7
1,77
1
1,73
4
1,65
2
1583
1408
1338
1329
1318
1322 1349
1632
1603
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
US$
milli
on
Net debt Net debt/LTM EBITDA**
2.1
4.6
Western Europe
39
Coated paper deliveries and prices
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
Q1
08
Q1
09
Q1
10
Q1
11
Q1
12
Q1
13
Q1
14
Q1
15
Q1
16
Q1
17
Q1
18
CWF Demand MCR Demand CWF 100gsm Sheets LWC 60gsm offset reels
Western Europe shipments including export.Source: Cepifine, Cepiprint and RISI indexed to calendar 1Q 2008.
40
Sappi Europe
* Sales less operating profit excluding special items divided by tons sold.** Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.
Q3 FY18 Q3 FY17 YTD 18 YTD 17Tons sold (‘000) 833 795 2,502 2,501Sales (EURm) 636 554 1,823 1,737
Price/Ton (EUR) 764 697 729 694Cost/Ton* (EUR) 726 668 689 658
Operating profit excluding special items** (EURm) 31 23 99 91
United States of America
41
Coated paper prices and shipments
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
Q1
08
Q1
09
Q1
10
Q1
11
Q1
12
Q1
13
Q1
14
Q1
15
Q1
16
Q1
17
Q1
18
Domestic CWF shipments Domestic CWF purchases RISI price CFS #3 60lb rollsUS industry purchases defined as industry shipments, plus imports, less exports.Source: AF&PA and RISI indexed to calendar Q1 FY08.
42
Sappi North America
* Sales less operating profit excluding special items divided by tons sold.** Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.
Q3 FY18 Q3 FY17 YTD 18 YTD 17Tons sold (‘000) 318 316 1,008 998Sales (USDm) 339 314 1,044 1,003
Price/Ton (USD) 1.066 994 1,036 1,005Cost/Ton* (USD) 1,063 1,000 1,018 985
Operating profit excluding special items** (USDm) 1 (2) 18 20
43
There is still significant headroom to increase the level of cellulosic fibre blending in most sub-categories
Source: Expert interviews.
POLYESTER
Future Today Gap Today Future Gap Today Future Gap COTTON CELLULOSIC
Apparel
Home textile
Towels 5% 5% 0% 80% 75% -6% 15% 20% +33%
Bedding 45% 55% +22% 45% 40% -11% 1% 2% +100%
Denim 5% 5% 0 95% 95% 0% 0% 0% 0%
Shirts 35% 40% +14% 50% 40% -20% 15% 20% +33%
T-shirts 30% 50% +67% 70% 50% -29% 3% 5% 0%
Dresses 10% 10% 0% 35% 25% -29% 55% 65% +18%
Suits 35% 40% +14% 25% 20% -20% ~1% ~2% +100%
Sportswear 85% 85% 0% 0% 0% 0% 15% 15% 0%
Casual wear 45% 50% +11% 45% 35% -22% 10% 15% +50%
44
Pulp prices*
* Source: FOEX, CCF group.
600
700
800
900
1,000
1,100
1,200
1,300
US$
/ton
NBSK Europe BHKP Europe Commodity DWP Cotton linter pulp
45
Textile fibre prices*
* Source: CCF group.
800
1,200
1,600
2,000
2,400
2,800
Cotton 328 Cotton "A" Index PSF 1.4 D VSF 1.2 D VSF 1.5 D
US$
/ton
46
Sappi Southern Africa
* Sales less operating profit excluding special items divided by tons sold.** Refer to the supplementary information in this presentation for a reconciliation of EBITDA to reported operating profit and page 22 in our Q3 FY18 financial results booklet (available on www.sappi.com) for a definition of special items.
Q3 FY18 Q3 FY17 YTD 18 YTD 17Tons sold (‘000) 383 387 1,179 1,159Sales (ZARm) 4,105 4,207 12,509 12,848
Price/Ton (ZAR) 10,718 10,871 10,610 11,085Cost/Ton* (ZAR) 9,274 8,499 8,538 8,149
Operating profit excluding special items** (ZARm) 553 918 2,443 3,404
Excluding Sappi Forests
Cash flow
47
US$m Q3 FY18 Q3 FY17 YTD 18 YTD 17Cash generated from operations 141 139 497 544Movement in working capital 33 (7) (85) (130)
Net finance costs paid (21) (20) (42) (61)
Taxation refund (paid) (6) 4 (50) (62)
Dividend paid - - (81) (59)
Cash generated from operating activities 147 116 239 232Cash utilised in investing activities (188) (86) (519) (165)Capital expenditure (188) (78) (395) (160)
Proceeds on disposal of assets 1 - 11 3
Acquisition of subsidiary - - (132) -
Other movements (1) (8) (3) (8)
Net cash generated (utilised) (41) 30 (280) 67
Excluding special items reconciliation to reported operating profit
48
EBITDA and operating profit
* Refer to page 22 in our Q3 FY18 results booklet (available on www.sappi.com) for a definition of special items.
US$m Q3 FY18 Q3 FY17 YTD 18 YTD 17
EBITDA excluding special items* 155 155 538 564Depreciation and amortisation (70) (62) (206) (190)
Operating profit excluding special items* 85 93 332 374
Special items* - gains (losses) (1) (3) 22 1
Plantation price fair value adjustment 8 2 30 14
Acquisition cost - - (2) -
Net restructuring provisions - (1) 2 (1)
Profit on disposal and written off assets (1) - 8 -
Asset impairment reversal 3 - 3 -
BBBEE charge - - (1) (1)
Fire, flood, storm and other events (11) (4) (18) (11)
Segment operating profit 84 90 354 375
Thank you
49
