{"id":10086,"date":"2012-04-19T16:21:03","date_gmt":"2012-04-19T14:21:03","guid":{"rendered":"http:\/\/www.myza.co.za\/04\/text-sp-summary-sappi-ltd\/"},"modified":"2012-04-19T16:21:03","modified_gmt":"2012-04-19T14:21:03","slug":"text-sp-summary-sappi-ltd","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-sp-summary-sappi-ltd\/","title":{"rendered":"TEXT-S&P summary: Sappi Ltd."},"content":{"rendered":"

\t\t<\/span><\/p>\n

<\/span><\/p>\n

<\/span><\/p>\n

SP base-case operating scenario<\/p>\n

<\/span><\/p>\n

Our current base-case operating scenario includes the following key near-term assumptions:<\/p>\n

<\/span><\/p>\n

— We believe that Sappi’s core European coated fine and magazine paper operations will
\ncontinue to be negatively affected by macroeconomic uncertainty. Still, we do not exclude the
\npossibility of minor price increases if the supply\/demand balance improves somewhat.
\nFurthermore, we assume that the European division will benefit from ongoing cost
\nrationalization, including the closure in 2011 of the group’s Biberist mill in Switzerland.<\/p>\n

<\/span><\/p>\n

— In North America, we believe that market conditions will be more favorable than in Europe
\nover the near term, on the back of macroeconomic recovery and healthy supply and pricing
\ndiscipline. Furthermore, Sappi’s increase of chemical cellulose capacity, through its $170
\nmillion Cloquet mill conversion, scheduled for start-up at the beginning of 2013 could boost
\nmargins if demand remains favorable.<\/p>\n

<\/span><\/p>\n

— We assume that Sappi’s South African business will continue to benefit from a weak South
\nAfrican rand as costs are in rand while sales are predominantly in U.S. dollars. In addition, we
\nassume continued healthy demand for chemical cellulose, as well as benefits from the group’s
\nrestructuring starting to affect results towards the end of 2012 and onwards.<\/p>\n

<\/span><\/p>\n

These assumptions translate into a rather stable adjusted EBITDA margin of about 11% in
\nfiscal 2012 (11.3% in fiscal 2011). We assume no significant growth in revenue in 2012 over
\n2011. However, we recognize meaningful potential for revenue and earnings growth in 2013,
\nprimarily driven by cost savings, increased chemical cellulose capacity, and a slightly more
\nfavorable macroeconomic environment. In a downside scenario, driven by near-term macroeconomic
\npressures, we believe that coated fine paper demand in Europe, already in structural decline,
\nwill fall more quickly and further than in our base case. Pressure on selling prices and
\nadditional industry capacity cuts could result. In our opinion, Sappi’s geographic diversity and
\ngrowing chemical cellulose pulp business, as well as the potential for lower input costs, may
\nmitigate these negative effects to an extent.<\/p>\n

<\/span><\/p>\n

<\/span><\/p>\n

SP base-case cash flow and capital-structure scenario
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

SP base-case operating scenario Our current base-case operating scenario includes the following key near-term assumptions: — We believe that Sappi’s core European coated fine and magazine paper operations will continue to be negatively affected by macroeconomic uncertainty. Still, we do not exclude the possibility of minor price increases if the supply\/demand balance improves somewhat. Furthermore, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-10086","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/10086","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=10086"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/10086\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=10086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=10086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=10086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}