- Report of Foreign Issuer (6-K)

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of November, 2012

Commission file number: 1-14872

SAPPI LIMITED

(Translation of registrant;s name into English)

48 Ameshoff Street

Braamfontein

Johannesburg 2001

REPUBLIC OF SOUTH AFRICA

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or

Form 40-F.

Form 20-F

X

-------

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted

by Regulation S-T Rule 101(b) (1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted

by Regulation S-T Rule 101(b) (7):

Indicate by check mark whether by furnishing the information contained in this Form, the

registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes No

X

-------

If “Yes” is marked, indicate below the file number assigned to the registrant in

connection with Rule 12g3-2(b):

FORWARD-LOOKING STATEMENTS

In order to utilize the “Safe Harbor” provisions of the United States Private Securities Litigation Reform
Act of 1995 (the “Reform Act”), Sappi Limited (the “Company”) is providing the following cautionary
statement. Except for historical information contained herein, statements contained in this Report on
Form 6-K may constitute “forward-looking statements” within the meaning of the Reform Act. 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, which do not relate to historical matters, identify forward-looking statements. In addition,
this Report on Form 6-K may include forward-looking statements relating to the Company’s potential
exposure to various types of market risks, such as interest rate risk, foreign exchange rate risk and
commodity price risk. Reliance should not be placed on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors which are in some cases beyond the
control of the Company, together with its subsidiaries (the “Group”), and may cause the actual results,
performance or achievements of the Group 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:

o

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 raw material, energy and employee costs, and pricing);

o

the impact on the business of the global economic downturn;

o

unanticipated production disruptions (including as a result of planned or unexpected power outages);

o

changes in environmental, tax and other laws and regulations;

o

adverse changes in the markets for the Group’s products;

o

the emergence of new technologies and changes in consumer trends increase preferences for digital
media;

o

consequences of the Group’s leverage, including as a result of adverse changes in credit
markets that affect the Group’s ability to raise capital when needed;

o

adverse changes in the political situation and economy in the countries in which the Group operates
or the effect of governmental efforts to address present or future economic or social problems;

o

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
strategic initiatives, and achieving expected savings and synergies; and

o

currency fluctuations.

These and other risks, uncertainties and factors are discussed in the Company’s Annual Report on
Form 20-F and other filings with and submissions to the Securities and Exchange Commission,
including this Report on Form 6-K. Shareholders and prospective investors are cautioned not to place
undue reliance on these forward-looking statements. These forward-looking statements are made as
of the date of the submission of this Report on Form 6-K and are not intended to give any assurance
as to future results. The Company undertakes 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.

4th

Quarter results for
the period ended
September 2012

Sappi works closely with customers,
both direct and indirect, in over
100 countries to provide them with
relevant and sustainable paper,
paper-pulp and dissolving wood pulp
products and related services and
innovations.

Our market-leading range of paper
products includes: coated fine
papers used by printers, publishers
and corporate end-users in the
production of books, brochures,
magazines, catalogues, direct mail
and many other print applications;
casting release papers used by
suppliers to the fashion, textiles,
automobile and household industries;
and in our Southern African region,
newsprint, uncoated graphic and
business papers, premium-quality
packaging papers, paper-grade pulp
and dissolving wood pulp.

Our dissolving wood pulp products
are used worldwide by converters
to create viscose fibre, acetate tow,
pharmaceutical products as well as
a wide range of consumer products.

The pulp needed for our products
is either produced within Sappi or
bought from accredited suppliers.
Across the group, Sappi is close to
‘pulp neutral’, meaning that we sell
almost as much pulp as we buy.

4th quarter results

* for the year ended September 2012

** as at September 2012

24%

Sales by source*

Europe

Southern Africa
North America

23%

53%

24%
23%

53%

Uncoated ne paper

Coated ne paper

7%
7%
7%

14%

Sales by product group*

Specialities
Commodity paper

Pulp

Other

2%

63%

63%

14%

7%

7%

2%

7%

63%

37%

Net operating assets**

Southern Africa

Fine Paper

37%

63%

19%

23%

Sales by destination*

Southern Africa

Europe

North America
Asia and other

13%

45%

45%

23%
19%
13%

This cover picture is a photograph of a stylised transverse cross-section of Eucalyptus wood.
The large circles are vessels which transport water up and down the tree and the smaller
circles are the fibres which we use to make paper and chemical cellulose.

Fibres are separated in the pulping process through the softening and removal of lignin which
acts as a glue between the fibres in the wood. In papermaking, fibres are re-formed to form
a flat, strong and uniform surface for printing and writing.

Photograph taken by Dr Valerie Grzekowiak

1

sappi 4th quarter results

Financial summary for the quarter

·

Net profit US$107 million (Q4 2011 net loss US$127 million)

·

Earnings per share of 21 US cents (Q4 2011 loss per share 24 US cents)

·

Operating profit excluding special items US$118 million
(Q4 2011 US$80 million)

·

Net cash generated US$203 million (Q4 2011 US$279 million)

·

Targeted net debt level reached a year early – US$1,979 million

Quarter ended

Year ended

Sept 2012

Sept 2011

Jun 2012

Sept 2012

Sept 2011

Key figures: (US$ million)

Sales

1,585

1,787

1,544

6,347

7,286

Operating profit (loss)

160

(88)

34

421

86

Special items – (gains) losses

(1)

(42)

168

26

(18)

318

Operating profit excluding special
items

(2)

118

80

60

403

404

EBITDA excluding special items

(2)

211

183

150

772

821

Profit (loss) for the period

107

(127)

(106)

104

(232)

Basic earnings (loss) per share
(US cents)

21

(24)

(20)

20

(45)

Net debt

(3)

1,979

2,100

2,213

1,979

2,100

Key ratios: (%)

Operating profit (loss) to sales

10.1

(4.9)

2.2

6.6

1.2

Operating profit excluding special
items to sales

7.4

4.5

3.9

6.3

5.5

Operating profit excluding special
items to capital employed (ROCE)

13.0

8.1

6.4

11.4

10.5

EBITDA excluding special
items to sales

13.3

10.2

9.7

12.2

11.3

Return on average equity (ROE)

(4)

27.8

(30.2)

(26.5)

6.9

(13.8)

Net debt to total capitalisation

(4)

56.5

58.7

58.7

56.5

58.7

Net asset value per share
(US cents)

293

284

299

293

284

(1) Refer to page 17 for details on special items.

(2) Refer to page 17, note 8 to the group results for the reconciliation of EBITDA excluding special items and operating profit

excluding special items to segment operating profit (loss), and profit (loss) for the period.

(3) Refer to page 19, supplemental information for the reconciliation of net debt to interest-bearing borrowings.

(4) Refer to page 18, supplemental information for the definition of the term.

The table above has not been audited or reviewed.

2

Commentary on the quarter

The European and North American paper businesses performed well during the quarter despite
tough market conditions. This performance reflects the positive effects of our ongoing actions to
further improve customer service, reduce costs and increase efficiencies over the past two years.

The performance of our Southern African operations was negatively impacted by both the
rescheduling of the planned maintenance shut at Saiccor Mill from the third quarter to this quarter,
and the continuing weakness in the South African paper market.

We have decided to rename the Chemical Cellulose division to Sappi Specialised Cellulose to
better reflect our product range and the increased importance to the group of our dissolving wood
pulp business.

Sales volumes for the group were approximately 3% lower than the equivalent quarter last year,
and reflect weaker market conditions, particularly in Europe. Average selling prices were lower as
a result of lower pulp prices, slightly weaker prices in certain grades of paper as well as the weaker
Rand and Euro exchange rate to the US Dollar and the translation impact this has on our prices.

Pulp prices continued to decline during the quarter. The prices of other major inputs, including
wood, chemicals and energy were largely flat both compared to the prior quarter and the
equivalent quarter last year. The exception was the cost of energy in South Africa, which continues
to see substantial increases in pricing from the national energy supplier.

Operating profit excluding special items was US$118 million for the quarter compared to
US$80 million in the equivalent quarter last year and US$60 million in the quarter ended June 2012.

The improvement in operating performance and the lower interest costs, mainly as a result of the
refinancing undertaken in the prior quarter, resulted in a net profit for the quarter of US$107 million.
The earnings per share for the quarter was 21 US cents (including a gain of 10 US cents in respect
of special items) compared with a loss per share of 24 US cents (including a charge of 26 US cents
in respect of special items) in the equivalent quarter last year.

Year ended September 2012 compared to year ended September 2011

The group’s operating profit excluding special items for the year was in line with that achieved last
year, despite challenging market conditions and pulp prices that were substantially lower in
US Dollar terms, which negatively affected our Southern African and North American businesses.

Operating profit excluding special items was US$403 million. Special items amounted to a gain of
US$18 million comprising mainly the profit on the sale of assets of US$63 million, offset primarily
by fire and flood damage, asset impairment charges and an unfavourable plantation price fair value
adjustment.

Net finance costs for the year was US$283 million, including the cost of the refinancing undertaken
during the third quarter.

Net profit was US$104 million for the year compared to a net loss of US$232 million in the prior
year. The prior year net loss included special item losses of US$318 million, principally related to
the restructuring of the European and Southern African operations. Earnings per share were
significantly better, with earnings per share of 20 US cents (including a charge of 10 US cents in
respect of special items and once-off refinancing costs) compared to a loss per share of
45 US cents (including a charge of 65 US cents in respect of special items and once-off
refinancing costs) in the prior year.

3

sappi

4th quarter results

Cash flow and debt

Quarter

Net cash generated for the quarter was US$203 million, compared with US$279 million for the
equivalent quarter last year. During the quarter, US$115 million was generated from working
capital, reflecting the seasonality of our business. Capital expenditure increased to US$112 million
from US$103 million in the equivalent quarter last year as a result of the increased spending on
the dissolving wood pulp (chemical cellulose) investments at the Ngodwana and Cloquet mills.

Year

Net cash generated for the full year was US$127 million compared to US$163 million last year.
This decrease is primarily due to the additional capital expenditure for the dissolving wood pulp
conversions.

Net debt was further reduced from US$2,100 million to US$1,979 million, achieving our target of
reducing net debt to below US$2 billion a year earlier than initially indicated.

During the year, we successfully refinanced US$700 million of debt resulting in the extension of our
maturities and reduction in our finance costs. The refinancing will reduce our annual interest charge
by US$45 million and our cash interest charge by US$30 million per annum. We now have no
significant maturities due before 2017.

At September 2012, we had liquidity comprising US$645 million of cash in addition to the
€350 million (US$450 million) available from the undrawn committed revolving credit facility.

Operating Review for the Quarter

Sappi Fine Paper

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Jun 2012

US$ million

Quarter

ended

Mar 2012

US$ million

Quarter

ended

Dec 2011

US$ million

Quarter

ended

Sept 2011

US$ million

Sales

1,203

1,155

1,232

1,198

1,337

Operating profit excluding
special items

87

28

73

39

39

Operating profit excluding
special items to sales (%)

7.2

2.4

5.9

3.3

2.9

EBITDA excluding special
items

155

98

139

110

115

EBITDA excluding special
items to sales (%)

12.9

8.5

11.3

9.2

8.6

RONOA pa (%)

12.7

4.0

10.3

5.6

5.3

Operating profit excluding special items for the global fine paper business improved compared to both
the prior quarter ended June 2012 as well as the equivalent quarter last year. Improved efficiencies
and lower average variable costs offset sales volumes that were 4% below those achieved a year ago.

4

Europe

Quarter

ended

Sept 2012

€ million

Quarter

ended

Jun 2012

€ million

Quarter

ended

Mar 2012

€ million

Quarter

ended

Dec 2011

€ million

Quarter

ended

Sept 2011

€ million

Sales

659

620

672

628

666

Operating profit excluding
special items

35

8

37

22

3

Operating profit excluding
special items to sales (%)

5.3

1.3

5.5

3.5

0.5

EBITDA excluding special
items

73

47

73

60

44

EBITDA excluding special
items to sales (%)

11.1

7.6

10.9

9.6

6.6

RONOA pa (%)

9.8

2.2

10.2

6.1

0.8

Demand was largely as expected, with volumes down 5% compared to the equivalent quarter last
year, and up 6% compared to the prior quarter, primarily due to the typical seasonal recovery.
Sales volumes for the full year were 9% down compared to the prior year, due to a combination
of weaker coated paper sales and the closure of the Biberist mill which led to reduced uncoated
woodfree capacity.

Average prices realised for the quarter were marginally lower than for the equivalent quarter last
year, and flat compared to the prior quarter.

Fixed costs were 7% lower in the quarter compared to the equivalent quarter last year.
Raw  material prices, including pulp, chemicals, wood and energy were lower than for the
equivalent quarter last year. This, in combination with the additional benefit of the variable cost
reduction programme initiated in 2011, resulted in cost savings for financial year 2012 in excess
of €100 million.

As a result of the cost savings initiatives, operating profit excluding special items increased from
€3 million in the equivalent quarter last year to €35 million in the fourth quarter of this year.

During the quarter, we announced the planned conversion of PM2 at the Alfeld mill from
150,000 tons of coated fine paper to 135,000 tons of speciality paper per annum. This conversion
will not only increase our capacity in a growing and higher margin specialised business, but will
also improve our cost position in coated woodfree graphic paper and further reduce our graphic
paper capacity in line with our strategy.

5

sappi

4th quarter results

North America

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Jun 2012

US$ million

Quarter

ended

Mar 2012

US$ million

Quarter

ended

Dec 2011

US$ million

Quarter

ended

Sept 2011

US$ million

Sales

377

360

349

352

395

Operating profit excluding
special items

42

18

24

10

34

Operating profit excluding
special items to sales (%)

11.1

5.0

6.9

2.8

8.6

EBITDA excluding special
items

63

38

43

29

53

EBITDA excluding special
items to sales (%)

16.7

10.6

12.3

8.2

13.4

RONOA pa (%)

18.2

7.7

10.4

4.4

14.9

Operating profit excluding special items improved to both the prior quarter and the equivalent
quarter last year and reflects the continued strong performance from the coated paper business.
The performance was achieved despite weaker industry conditions and the business achieved
sales volumes similar to those for the equivalent quarter last year, with improved margins.

The pulp business continues to be negatively impacted by lower sales prices compared to both
the prior quarter and the equivalent quarter last year, with pulp prices 9% below those in the
equivalent quarter last year. The conversion of the Cloquet pulp mill from hardwood kraft pulp to
dissolving wood pulp continues on schedule.

Release sales volume was higher than in the equivalent quarter last year, with the pricing mix being
weaker due to weak demand in key global speciality markets.

Both raw material pricing and usage were favourable during the quarter, and resulted in total
variable costs being 7% lower per ton compared to the equivalent quarter last year. A strong
manufacturing performance underpinned the lower usage and strong sales volumes.

6

Sappi Southern Africa

Quarter

ended

Sept 2012

ZAR million

Quarter

ended

Jun 2012

ZAR million

Quarter

ended

Mar 2012

ZAR million

Quarter

ended

Dec 2011

ZAR million

Quarter

ended

Sept 2011

ZAR million

Sales

3,152

3,159

3,113

3,131

3,217

Operating profit excluding
special items

276

255

409

494

296

Operating profit excluding
special items to sales (%)

8.8

8.1

13.1

15.8

9.2

EBITDA excluding special
items

473

426

604

680

482

EBITDA excluding special
items to sales (%)

15.0

13.5

19.4

21.7

15.0

RONOA pa (%)

8.2

7.6

12.2

15.1

8.9

The operating performance of the business was negatively impacted by the rescheduling of the
planned annual maintenance shut at Saiccor Mill from the third quarter to the fourth quarter and
lower average pulp prices.

The Specialised Cellulose (Chemical Cellulose) business continued to perform well, generating an
EBITDA excluding special items of ZAR413 million and an EBITDA excluding special items margin
of 30%. Dissolving wood pulp demand continued to grow in 2012, albeit at a slower pace than
last year. Despite the impact of the maintenance shut in the quarter, sales volumes were close to
those achieved in the equivalent quarter last year. Net prices however, were 7% lower as a result
of the lower US Dollar NBSK pulp prices that our contracted dissolving wood pulp sales are linked
to, offset to some extent by the weaker Rand. Saiccor Mill achieved record production volumes in
the past year. The conversion of the Ngodwana pulp mill from hardwood kraft pulp to dissolving
wood pulp continues on schedule.

The Southern African paper business had an improved performance compared to the
equivalent quarter last year, which was negatively impacted by an industry-wide three week strike.
Fixed costs were more than 20% lower than the equivalent quarter last year, benefiting from the
Southern African restructuring completed earlier in the year.

Post the quarter-end we announced the decision to mothball PM4, a sackkraft and containerboard
machine, at the Tugela mill from 01 January 2013. We are currently in a consultation process with
employees at the mill regarding potential retrenchments. The asset impairment charge related to
the mothballing of the machine of ZAR76 million was taken in this quarter and is included in special
items.

7

sappi

4th quarter results

Outlook

Given continued uncertainty in global markets, and questions around the timing of any meaningful
economic recovery in our major markets, we expect trading conditions to remain challenging for
the next 12 months. Pulp prices, despite having recovered from their recent lows, are expected to
remain lower on average in 2013 than they were in 2012. This will negatively impact our North
American and Southern African businesses, which are net sellers of pulp, but will have a favourable
impact on our European business which is a net buyer of pulp.

We expect that demand for dissolving wood pulp in our Specialised Cellulose operations will
continue to grow in the coming year and beyond. We believe that particularly with our additional
low cost capacity, we are well positioned to take advantage of this growth. We have made further
good progress in signing long-term contracts for a significant portion of our new dissolving wood
pulp capacity.

We expect the first quarter result for the Southern African operations to be in line with that
achieved in the fourth quarter of 2012. Operating profit in the first financial quarter of 2013 is
expected to be weaker than the equivalent quarter last year as a result of lower pulp prices, slightly
lower paper prices in Europe, as well as the impact of the road transport strike in South Africa.

We expect a modest cash outflow in the important transitional year ahead due to the increase in
capital expenditure on the Specialised Cellulose investments. Our finance costs will be substantially
lower following the refinancing in 2012 and we expect that net debt will end the coming year
essentially flat year on year barring the impact of any adverse foreign currency translations.

Additional downtime, variable costs and paper pulp purchases during the start-up phase of the
Ngodwana and Cloquet projects are expected to have a negative impact of approximately
US$40 million in the 2013 financial year.

Provided that there is no further deterioration in global market conditions, we expect continued
profit growth, with the once-off negative operational impact of the conversion projects and the
expected lower pulp prices being offset by the lower finance costs.

We believe that the actions we have taken in all of our paper businesses over the past two years,
and the strategy of investing in higher margin, higher growth businesses such as Specialised
Cellulose will enable us to continue to improve our ability to generate shareholder value in the
coming year, but importantly also position us for an acceleration of that growth in the years
thereafter.

Directorate

Professor Meyer Feldberg, our lead independent director, will retire from the board at the end of
December 2012, having reached the board’s mandatory retirement age. Sir Nigel Rudd who has
served as a non-executive director for six years will succeed Professor Feldberg as lead
independent director at that time.

On behalf of the board

R J Boëttger

S R Binnie

Director                                                      Director

08 November 2012

8

Certain 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 of or 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, which do not relate to historical matters, identify forward-looking statements. You
should 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 actual
results, 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
raw material, energy and employee costs, and pricing);

•

the impact on our business of the global economic downturn;

•      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
restructuring or 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.

Forward-looking statements

9

sappi

4th quarter results

Condensed group income statement

Note

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

Sales

1,585

1,787

6,347

7,286

Cost of sales

1,363

1,582

5,552

6,454

Gross profit

222

205

795

832

Selling, general and
administrative expenses

102

126

417

454

Other operating (income)
expenses

(38)

167

(41)

298

Share of profit from associates
and joint ventures

(2)

–

(2)

(6)

Operating profit (loss)

2

160

(88)

421

86

Net finance costs

37

56

283

307

Net interest

46

60

299

336

Finance cost capitalised

(2)

–

(6)

–

Net foreign exchange gain

(4)

(3)

(5)

(13)

Net fair value gain on financial
instruments

(3)

(1)

(5)

(16)

Profit (loss) before taxation

123

(144)

138

(221)

Taxation

16

(17)

34

11

Current

16

2

28

14

Deferred

–

(19)

6

(3)

Profit (loss) for the period

107

(127)

104

(232)

Basic earnings (loss) per
share (US cents)

21

(24)

20

(45)

Weighted average number of
shares in issue (millions)

520.8

520.4

520.8

519.9

Diluted basic earnings (loss)
per share (US cents)

20

(24)

20

(45)

Weighted average number of shares
on fully diluted basis (millions)

522.3

520.4

522.2

519.9

Condensed group statement of comprehensive income

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

Profit (loss) for the period

107

(127)

104

(232)

Other comprehensive loss,
net of tax

(140)

(285)

(69)

(205)

Exchange differences on translation
of foreign operations

(50)

(214)

(60)

(151)

Actuarial losses on post-employment
benefit funds

(88)

(59)

(88)

(59)

Movements in hedging reserves

(24)

(12)

(47)

6

Movement on available for sale
financial assets

1

2

1

2

Deferred tax effect of above items

21

(2)

24

(3)

Recognition of previously
unrecognised deferred tax asset

(1)

–

–

101

–

Total comprehensive (loss) income
for the period

(33)

(412)

35

(437)

(1) Relates to amounts recognised within other comprehensive income in previous fiscal years.

10

Condensed group balance sheet

Reviewed

Sept 2012

US$ million

Reviewed

Sept 2011

US$ million

ASSETS

Non-current assets

3,990

4,085

Property, plant and equipment

3,157

3,235

Plantations

555

580

Deferred taxation

154

45

Other non-current assets

124

225

Current assets

2,178

2,223

Inventories

726

750

Trade and other receivables

807

834

Cash and cash equivalents

645

639

Total assets

6,168

6,308

EQUITY AND LIABILITIES

Shareholders’ equity

Ordinary shareholders’ interest

1,525

1,478

Non-current liabilities

3,328

3,178

Interest-bearing borrowings

2,358

2,289

Deferred taxation

319

336

Other non-current liabilities

651

553

Current liabilities

1,315

1,652

Interest-bearing borrowings

261

449

Bank overdraft

5

1

Other current liabilities

1,023

1,182

Taxation payable

26

20

Total equity and liabilites

6,168

6,308

Number of shares in issue at balance sheet date (millions)

520.8

520.5

11

sappi

4th quarter results

Condensed group statement of cash flows

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

Profit (loss) for the period

107

(127)

104

(232)

Adjustment for:

Depreciation, fellings and amortisation

109

121

442

499

Taxation

16

(17)

34

11

Net finance costs

37

56

283

307

Defined post-employment benefits paid

(23)

(20)

(62)

(70)

Plantation fair value adjustments

( 28)

(21)

(68)

(65)

Impairments of assets and investments

13

98

10

167

Net restructuring provisions

(3)

67

(2)

135

Profit on disposal of investment

(11)

–

( 11)

–

Profit on non-current assets held for sale

(48)

–

(48)

–

Other non-cash items

13

26

46

46

Cash generated from operations

182

183

728

798

Movement in working capital

115

266

(102)

(98)

Net finance costs paid

(38)

(62)

(195)

(256)

Taxation paid

(8)

(7)

(20)

(38)

Cash retained from operating activities

251

380

411

406

Cash utilised in investing activities

(48)

(101)

(284)

(243)

Net cash generated

203

279

127

163

Cash effects of financing activities

39

68

(103)

(296)

Net movement in cash and cash
equivalents

242

347

24

(133)

Condensed group statement of changes in equity

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

Balance – beginning of period

1,478

1,896

Total comprehensive income (loss) for the period

35

(437)

Transfers from the share purchase trust

2

6

Transfers of vested share options

(2)

(7)

Share-based payment reserve

12

20

Balance – end of period

1,525

1,478

12

Notes to the condensed group results

1. Basis of preparation

The condensed consolidated preliminary financial results for the fiscal year ended September 2012
have been prepared in compliance with the Listings Requirements of the JSE Limited and in
accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board, AC 500 standards issued by the Accounting Practices Board, the requirements of
the Companies Act of South Africa and the information required by IAS 34 Interim Financial
Reporting . The accounting policies applied in the preparation of these preliminary financial results are
consistent with those applied for the year ended September 2011.

The fiscal year ended September 2012 consists of 52 weeks compared to the prior fiscal year which
consisted of 53 weeks.

The preparation of this condensed consolidated financial information was supervised by the Chief
Financial Officer, S R Binnie CA(SA).

The preliminary results for the year ended September 2012 as set out on pages 9 to 17 have been
reviewed in accordance with the International Standard on Review Engagements 2410 by
the  group’s auditors, Deloitte & Touche. Their unmodified review report is available for inspection
at the company’s registered office.

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

2.

Operating profit (loss)

Included in operating profit (loss)
are the following non-cash items:

Depreciation and amortisation

93

103

369

417

Fair value adjustment on plantations
(included in cost of sales)

Changes in volume

Fellings

16

18

73

82

Growth

(19)

(21)

(83)

(81)

(3)

(3)

(10)

1

Plantation price fair value
adjustment

(9)

–

15

16

(12)

(3)

5

17

Included in other operating (income)
expenses are the following:

Impairments of assets and investments

13

98

10

167

Loss (profit) on disposal of property,
plant and equipment

3

(1)

(4)

(1)

Profit on disposal of investment

(11)

–

(11)

–

Profit on non-current assets
held for sale

(48)

–

(48)

–

Net restructuring provisions

(3)

67

(2)

135

Black Economic Empowerment
charge

–

2

3

5

13

sappi

4th quarter results

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

3.

Headline earnings (loss) per share

Headline earnings (loss) per share
(US cents)

12

(8)

9

(16)

Weighted average number of shares
in issue (millions)

520.8

520.4

520.8

519.9

Diluted headline earnings (loss) per
share (US cents)

12

(8)

9

(16)

Weighted average number of shares
on fully diluted basis (millions)

522.3

520.4

522.2

519.9

Calculation of headline earnings
(loss)

Profit (loss) for the period

107

(127)

104

(232)

Impairments of assets and
investments

13

98

10

167

Loss (profit) on disposal of property,
plant and equipment

3

(1)

(4)

(1)

Profit on disposal of investment

(11)

–

(11)

–

Profit on non-current assets held
for sale

(48)

–

(48)

–

Tax effect of above items

(3)

(14)

(2)

(17)

Headline earnings (loss)

61

(44)

49

(83)

4.

Capital expenditure

Property, plant and equipment

161

107

404

268

Reviewed

Sept 2012

US$ million

Reviewed

Sept 2011

US$ million

5.

Capital commitments

Contracted

267

61

Approved but not contracted

244

416

511

477

6.

Contingent liabilities

Guarantees and suretyships

31

33

Other contingent liabilities

10

15

41

48

14

7. Material balance sheet movements

Interest-bearing borrowings
In October 2011, the group repaid US$130 million (ZAR1,000 million) of the ZAR 10.64% fixed rate
public bonds in Southern Africa from cash resources.

In April 2012, the group issued a three-year ZAR750 million (US$98 million) floating rate bond
(‘SSA02’) at a 144 basis points spread over the six-month Johannesburg Inter-bank Agreed Rate.
The floating rate of the new bond was swapped into a fixed rate of 7.78%. The proceeds of the
bonds were used partly to refinance the ZAR500 million (US$65 million) bond (‘SMF3’) that matured
on 29 June 2012.

In June 2012, the group placed a new bond offering comprising two tranches of senior secured
notes being US$400 million notes due 2017 with a coupon of 7.750% per annum and US$300 million
notes due 2019 with a coupon of 8.375% per annum. The proceeds of the new notes together with
cash on hand, via tender offer and call redemption, were used to early redeem US$700 million of the
principal amount of the senior secured notes due 2014. As a result of the early redemption, a once-
off charge consisting of premium and other costs of US$86 million was recorded to net finance costs
for the year.

In August 2012, the group entered into a €136 million (US$170 million) five-year term loan facility with
the Österreichische Kontrollbank, the proceeds of which will be used to fund the chemical cellulose
conversion project in North America.

In September 2012, the group repaid the drawn amount of €100 million (US$129 million) of the
€350  million (US$450 million) revolving credit facility from cash resources. At year-end, the facility
remained undrawn.

Other non-current assets
On the early redemption of the US$300 million tranche of the senior secured notes due 2014,
the group simultaneously unwound the corresponding interest rate and currency swaps resulting in
a cash inflow of US$43 million to the group.

In August 2012, the group entered into a sale agreement for its equity accounted 34% shareholding
in Jiangxi Chenming Paper company to the majority shareholder and co-founding joint venture
partner for US$42 million resulting in a profit of US$11 million which includes the realisation of a
foreign currency translation reserve that was previously disclosed in other comprehensive income.
The proceeds were received on 06 November 2012.

Deferred tax assets
In June 2012, the group reassessed the recoverability of its deferred tax assets in Sappi Fine Paper
North America. A deferred tax asset of US$101 million was recognised largely in other comprehensive
income.

Other current liabilities
Other current liabilities were reduced by payments of liabilities relating to restructuring costs
and accruals.

15

sappi

4th quarter results

8. Segment information

Quarter

ended

Sept 2012

Metric tons

(000’s)

Quarter

ended

Sept 2011

Metric tons

(000’s)

Year

ended

Sept 2012

Metric tons

(000’s)

Year

ended

Sept 2011

Metric tons

(000’s)

Sales volume
Fine Paper –

North America

369

379

1,400

1,436

Europe

896

942

3,507

3,845

Total

1,265

1,321

4,907

5,281

Southern Africa –

Pulp and paper

423

428

1,676

1,700

Forestry

292

229

1,122

917

Total

1,980

1,978

7,705

7,898

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

Sales
Fine Paper –

North America

377

395

1,438

1,520

Europe

826

942

3,350

3,965

Total

1,203

1,337

4,788

5,485

Southern Africa –

Pulp and paper

361

430

1,475

1,721

Forestry

21

20

84

80

Total

1,585

1,787

6,347

7,286

Operating profit excluding special items
Fine Paper –

North America

42

34

94

129

Europe

45

5

133

68

Total

87

39

227

197

Southern Africa

33

41

178

199

Unallocated and eliminations

(1)

(2)

–

(2)

8

Total

118

80

403

404

Special items – losses (gains)
Fine Paper –

North America

2

(6)

7

(7)

Europe

(42)

23

(45)

139

Total

(40)

17

(38)

132

Southern Africa

3

105

25

136

Unallocated and eliminations

(1)

(5)

46

(5)

50

Total

(42)

168

(18)

318

Segment operating profit (loss)
Fine Paper –

North America

40

40

87

136

Europe

87

(18)

178

(71)

Total

127

22

265

65

Southern Africa

30

(64)

153

63

Unallocated and eliminations

(1)

3

(46)

3

(42)

Total

160

(88)

421

86

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

16

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

EBITDA excluding special items
Fine Paper –

North America

63

53

173

203

Europe

92

62

329

300

Total

155

115

502

503

Southern Africa

57

67

271

309

Unallocated and eliminations

(1)

(1)

1

(1)

9

Total

211

183

772

821

Segment assets
Fine Paper –

North America

919

908

919

908

Europe

1,776

1,889

1,776

1,889

Total

2,695

2,797

2,695

2,797

Southern Africa

1,605

1,574

1,605

1,574

Unallocated and eliminations

(1)

20

51

20

51

Total

4,320

4,422

4,320

4,422

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

17

sappi

4th quarter results

Reconciliation of EBITDA excluding special items and operating profit excluding special items to
segment operating profit (loss) and profit (loss) for the period
Special items cover those items which management believe are material by nature or amount to the
operating results and require separate disclosure.

Quarter

ended

Sept 2012

US$ million

Quarter

ended

Sept 2011

US$ million

Reviewed

Year

ended

Sept 2012

US$ million

Reviewed

Year

ended

Sept 2011

US$ million

EBITDA excluding special items

211

183

772

821

Depreciation and amortisation

(93)

(103)

(369)

(417)

Operating profit excluding special
items

118

80

403

404

Special items – gains (losses)

42

(168)

18

(318)

Plantation price fair value
adjustment

9

–

(15)

(16)

Net restructuring provisions

3

(67)

2

(135)

(Loss) profit on disposal of
property, plant and equipment

(3)

1

4

1

Profit on disposal of investment

11

–

11

–

Profit on non-current assets
held for sale

48

–

48

–

Impairments of assets and
investments

(13)

(98)

(10)

(167)

Black Economic Empowerment
charge

–

(2)

(3)

(5)

Insurance recoveries

–

–

–

10

Fire, flood, storm and related
events

(13)

(2)

(19)

(6)

Segment operating profit (loss)

160

(88)

421

86

Net finance costs

(37)

(56)

(283)

(307)

Profit (loss) before taxation

123

(144)

138

(221)

Taxation

(16)

17

(34)

(11)

Profit (loss) for the period

107

(127)

104

(232)

Reconciliation of segment assets
to total assets

Segment assets

4,320

4,422

4,320

4,422

Deferred taxation

154

45

154

45

Cash and cash equivalents

645

639

645

639

Other current liabilities

1,023

1,182

1,023

1,182

Taxation payable

26

20

26

20

Total assets

6,168

6,308

6,168

6,308

18

Supplemental information (this information has not been audited or reviewed)

General definitions

Average – averages are calculated as the sum of the opening and closing balances for the relevant
period divided by two

Black Economic Empowerment – as envisaged in the Black Economic Empowerment (BEE) legislation
in South Africa

Black Economic Empowerment charge – represents the IFRS 2 non-cash charge associated with the
BEE transaction implemented in fiscal 2010

Fellings – the amount charged against the income statement representing the standing value of the
plantations harvested

NBSK – Northern Bleached Softwood Kraft pulp. One of the main varieties of market pulp, produced
from coniferous trees (ie spruce, pine) in Scandinavia, Canada and northern USA. The price of NBSK is
a benchmark widely used in the pulp and paper industry for comparative purposes

SG&A – selling, general and administrative expenses

Non-GAAP measures

The group believes that it is useful to report certain non-GAAP measures for the following reasons:

–     these measures are used by the group for internal performance analysis;

–     the presentation by the group’s reported business segments of these measures facilitates

comparability with other companies in our industry, although the group’s measures may not be
comparable with similarly titled profit measurements reported by other companies; and

–     it is useful in connection with discussion with the investment analyst community and debt rating

agencies

These non-GAAP measures should not be considered in isolation or construed as a substitute for GAAP
measures in accordance with IFRS

Capital employed – shareholders’ equity plus net debt

EBITDA excluding special items – earnings before interest (net finance costs), taxation, depreciation,
amortisation and special items

Headline earnings – as defined in circular 3/2012 issued by the South African Institute of Chartered
Accountants, separates from earnings all separately identifiable re-measurements. It is not necessarily a
measure of sustainable earnings. It is a Listings Requirement of the JSE Limited to disclose headline
earnings per share

Net assets – total assets less total liabilities

Net asset value per share – net assets divided by the number of shares in issue at balance sheet date

Net debt – current and non-current interest-bearing borrowings, and bank overdraft (net of cash, cash
equivalents and short-term deposits)

Net debt to total capitalisation – net debt divided by capital employed

Net operating assets – total assets (excluding deferred taxation and cash) less current liabilities
(excluding interest-bearing borrowings and overdraft). Net operating assets equate to segment assets

ROCE – return on average capital employed. Operating profit excluding special items divided by average
capital employed

ROE – return on average equity. Profit for the period divided by average shareholders’ equity

RONOA – return on average net operating assets. Operating profit excluding special items divided by
average segment assets

Special items – special items cover those items which management believe are material by nature or
amount to the operating results and require separate disclosure. Such items would generally include
profit or loss on disposal of property, investments and businesses, asset impairments, restructuring
charges, non-recurring integration costs related to acquisitions, financial impacts of natural disasters,
non-cash gains or losses on the price fair value adjustment of plantations and alternative fuel tax credits
receivable in cash

The above financial measures are presented to assist our shareholders and the investment community in interpreting our financial
results. These financial measures are regularly used and compared between companies in our industry.

19

sappi 4th quarter results

Supplemental information (this information has not been audited or reviewed)

Summary rand convenience translation

Quarter

ended

Sept 2012

Quarter

ended

Sept 2011

Year

ended

Sept 2012

Year

ended

Sept 2011

Key figures: (ZAR million)
Sales

13,087

12,777

51,113

50,695

Operating profit (loss)

1,321

(629)

3,390

598

Special items – (gains) losses

(1)

(347)

1,201

(145)

2,213

Operating profit excluding special items

(1)

974

572

3,245

2,811

EBITDA excluding special items

(1)

1,742

1,308

6,217

5,712

Profit (loss) for the period

883

(908)

838

(1,614)

Basic earnings (loss) per share (SA cents)

170

(172)

161

(313)

Net debt

(1)

16,445

17,002

16,445

17,002

Key ratios: (%)
Operating profit (loss) to sales

10.1

(4.9)

6.6

1.2

Operating profit excluding special items
to sales

7.4

4.5

6.3

5.5

Operating profit excluding special items
to capital employed (ROCE)

(1)

13.0

7.8

11.2

9.7

EBITDA excluding special items to sales

13.3

10.2

12.2

11.3

Return on average equity (ROE)

27.8

(29.5)

6.8

(12.8)

Net debt to total capitalisation

(1)

56.5

58.7

56.5

58.7

(1) Refer to page 18, supplemental information for the definition of the term.
The above financial results have been translated into Rands from US Dollars as follows:
– assets and liabilities at rates of exchange ruling at period end; and
– income, expenditure and cash flow items at average exchange rates.

Reconciliation of net debt to interest-bearing borrowings

Sept 2012

US$ million

Sept 2011

US$ million

Interest-bearing borrowings

2,624

2,739

Non-current interest-bearing borrowings

2,358

2,289

Current interest-bearing borrowings

261

449

Bank overdraft

5

1

Cash and cash equivalents

(645)

(639)

Net debt

1,979

2,100

Exchange rates

Sept

2012

Jun

2012

Mar

2012

Dec

2011

Sept

2011

Exchange rates:
Period end rate: US$1 = ZAR

8.3096

8.1650

7.6725

8.0862

8.0963

Average rate for the Quarter: US$1 = ZAR

8.2567

8.1229

7.7511

8.0915

7.1501

Average rate for the YTD: US$1 = ZAR

8.0531

7.9885

7.9237

8.0915

6.9578

Period end rate: €1 = US$

1.2859

1.2660

1.3344

1.2948

1.3386

Average rate for the Quarter: €1 = US$

1.2514

1.2838

1.3116

1.3482

1.4126

Average rate for the YTD: €1 = US$

1.2988

1.3145

1.3299

1.3482

1.3947

20

Sappi ordinary shares (JSE: SAP)

US Dollar share price conversion

USD

30

Sep

08

31

Dec

08

31

Mar

09

30

Sep

09

30

Jun

09

30

Jun

10

31

Dec

09

31

Mar

10

30

Sep

10

31

Mar

11

31

Dec

10

30

Jun

11

30

Sep

11

31

Dec

11

31

Mar

12

22

Oct

12

30

Jun

12

30

Sep

12

0

1

2

3

4

5

6

7

8

ZAR

30

Sep

08

31

Dec

08

31

Mar

09

30

Sep

09

30

Jun

09

30

Jun

10

31

Dec

09

31

Mar

10

30

Sep

10

31

Mar

11

31

Dec

10

30

Jun

11

30

Sep

11

31

Dec

11

31

Mar

12

22

Oct

12

30

Jun

12

30

Sep

12

0

10

20

30

40

50

60

21

sappi 4th quarter results

Sappi has a primary listing on the JSE Limited and a secondary listing on

the New York Stock Exchange

sappi limited

(Registration number 1936/008963/06)

Issuer Code: SAVVI

JSE Code: SAP

ISIN: ZAE000006284

www.sappi.com

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 08, 2012

SAPPI LIMITED,

By:         /s/ S.R. Binnie

Name: S.R. Binnie
Title: Chief Financial Officer