Sappi : Strong measures in response to a cycle of low prices

Sappi has been experiencing difficult quarters since the macroeconomic upheaval in early 2025. Pulp and packaging prices are currently too low to achieve sufficient profitability. There is little hope of improvement in the short term, but Sappi can count on i/ the ramp-up of its Somerset plant, one of its largest investments, which has weighed heavily on results, ii/ a new cost-saving plan in Europe, and iii/ the creation of a paper joint venture with UPM by the end of 2026. Liquidity remains comfortable and the group – accustomed to managing volatile cycles – has put protective measures in place (capex & dividend cuts). The 2028 bonds could be refinanced in 2026. In our view, it is still too early to take a position on the 2032 bonds.