A Letter from Sappi CEO Steve Binnie

Dear North American colleagues and stakeholders,

2017 was a good year for Sappi globally, with the focus and energy of our people enabling us to deliver another strong set of results built on the momentum of past years. In North America, good cost management and strong contributions from our Specialised Cellulose business offset some of the weak market conditions in the graphics and release businesses.

Of particular note is the exceptional safety performance displayed by the North American team, and I want to recognize the full effort and dedication this took. Globally, satisfaction with our performance must be tempered by collective grief of the four fatalities suffered this year in Africa and Europe. I am calling on our people to display the same vigour and commitment to improving our safety performance as they have shown in embracing our 2020Vision, strategic diversifi cation and values. In 2017, we continued to invest in growth in all three planks of sustainability—Prosperity, People and Planet.

Prosperity Significant investments at Somerset, both to rebuild Paper Machine 1 and to upgrade the wood room, as well as a new headbox for Cloquet Paper Machine 12 will keep those mills globally competitive and open up new packaging markets. Similar mill investments in Europe and the acquisitions of Plaxica, Rockwell, and Cham Paper Group, all of which are described further in this report, will accelerate product innovation across the globe. Collectively, these investments align with our global diversifi cation strategy and 2020Vision to grow in higher-margin growth segments.

People We continued to invest in our people with world-class training programmes, and in promoting skills and socio-economic growth in the communities close to our operations. Our customers benefi tted from more focused market-facing initiatives, new products and market-leading innovations. We also continued our collaborative work with technology partners worldwide to accelerate our move into adjacent markets and to develop more sustainable approaches to the task of balancing socio-economic growth and natural capital.

Planet As the world population approaches the eight billion mark, with concomitant pressure on natural resources, the need to use natural capital responsibly becomes increasingly important. Recognising this, we work to reduce our environmental impact across the group. In North America, good progress was made in reducing waste, improving effi ciencies and maintaining a very low carbon footprint as detailed in this report.

At Sappi we believe that sustainable growth must emanate from a solid foundation where we do not focus exclusively on profits, but rather, balance our need to generate Prosperity by promoting the interests of People while respecting the boundaries of the Planet. Our value statement “at Sappi we do business with integrity and courage, making smart decisions which we execute with speed” is guiding people towards the right behaviour and is providing the foundation for further growth.

Steve Binnie

Chief Executive Officer, Sappi Limited