Sappi (SAP) Q4 2025 earnings summary

Executive summary

• FY2025 Adjusted EBITDA was $501 million versus $684 million in FY2024; net loss was $177 million, while Q4 Adjusted EBITDA was $111 million and net loss was $194 million.

• Global economic weakness, trade tensions and oversupply drove market deterioration and pricing pressure; DWP and packaging/speciality paper volumes grew year-over-year, with graphic-paper market share gains.

• Somerset Mill PM2 conversion and expansion was completed, with ramp-up underway.

• European rationalisation and capacity optimisation were key operational priorities.

Financial highlights

• FY2025 revenue was $5,420 million, nearly flat year-over-year; Q4 revenue was $1,389 million versus $1,464 million in Q4 FY2024.

• FY2025 Adjusted EPS was 8 US cents versus 41 US cents in FY2024; Q4 Adjusted EPS was a loss of 3 US cents versus a profit of 15 US cents in Q4 FY2024.

• Lower selling prices across segments drove reduced profitability; variable costs per ton fell 3–6% quarter-over-quarter across regions.

• Special items reduced FY2025 earnings by $170 million, mainly from asset impairments and European restructuring costs.

• FY2025 cash utilisation was $369 million; capex was $496 million, including $228 million for Somerset Mill PM2.

Outlook and guidance

• Challenging macroeconomic and geopolitical conditions, supply-demand imbalances and trade tensions are expected to persist.

• DWP demand is expected to remain robust, but price recovery may be slow; packaging and speciality-paper volumes are expected to rise with Somerset PM2 ramp-up, while margins remain pressured.

• Q1 FY2026 Adjusted EBITDA is expected below Q4 FY2025, including the impact of a scheduled 18-day Somerset maintenance shut and estimated ~$20 million earnings reduction.

• European restructuring savings are expected to begin in Q2 FY2026, with full benefits in Q4 FY2026 and Q1 FY2027.

• FY2026 capex is estimated at $290 million; capex is targeted below $300 million annually for the next two years, with no expansionary projects planned.