A Letter from Sappi Limited's Global CEO Steve Binnie
The success of our drive to adapt our business to the global megatrends that are reshaping the world around us is evident in our performance over the past year.
In terms of Prosperity, this translated into a 17.5 percent return on capital employed in 2016, and a dividend of US $0.11 for the year ended September 30—our first since 2008. In addition, we reduced debt significantly during the year and by US $800 million over the past three years. Our improved cash generation resulted in the group achieving the targeted leverage of less than two times net debt to our earnings before interest, taxes, depreciation and amortisation, earlier than expected.
This strong financial performance provides a platform for growth.
We continued to position our product portfolios to meet the needs of our customers across the world, leverage the opportunities inherent in global trends and unlock the potential of forest-derived bioproducts. This was underpinned by the commissioning of our nanocellulose pilot plant in The Netherlands, together with the decision to build a second-generation sugar extraction demonstration plant in South Africa, which is due to come on stream in 2017, as well as the establishment of a dedicated Biotech division to consolidate and expand our renewable biomaterial offerings.
In terms of our People, our priority is a diverse, engaged workforce who understand the world of tomorrow so that we position ourselves to take advantage of future trends in order to grow and prosper. Accordingly, we continued to invest in our people so that we are able to create and seize opportunities, enable our people to grow intellectually and bring new ideas to fruition. We also continued to invest in the communities in which we operate, with a view to empowering them to reach their full potential through self-sustaining initiatives.
The ongoing trajectory of urban growth around the globe is leading to growing concerns about natural resources and food security. To successfully navigate this trajectory, as One Sappi we need to continue treading more lightly on the Planet by progressively increasing our generation of renewable energy, enhancing our energy efficiency, reducing the amount of water used and solid waste generated, and promoting the use of certified fibre.
In addition to these efforts, we are working collaboratively with technology partners and industry bodies to develop more sustainable approaches to the task of balancing socio-economic growth and natural capital.
As we continue on our One Sappi journey towards our 2020 Vision, it is important to safeguard our legacy and reputation. This means ensuring that all our people, customers, partners, communities, suppliers and other stakeholders know what we stand for, how we hope to achieve our vision and understand the principles that guide us along the way. Accordingly, our revised Code of Ethics sets out the expected behaviours that will help us stay true to who we are as we progress on our journey.
Steve Binnie
Chief Executive Officer
Sappi Limited
Read more from Sappi North America's 2016 Sustainability Report here: http://bit.ly/SNA-2016SR
