Financial results for the first quarter 2003

Financial results for the first quarter 2003 1

Forward looking statements 2 Certain statements in this report that are neither reported financial results nor other historical information, are forward-looking statements, including, but not limited to statements that are predictions of or indicate future earnings, savings, synergies, events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors, that could cause actual results and company plans and objectives to differ materially from those expressed or implied in the forward-looking statements (or from past results). Such risks, uncertainties and factors include, but are not limited to the highly cyclical nature of the pulp and paper industry (and the factors that contribute to such cyclicality, such as levels of demand, production capacity, production and pricing), adverse changes in the markets for the group s products, consequences of substantial leverage, changing regulatory requirements, unanticipated production disruptions, economic and political conditions in international markets, the impact of investments, acquisitions and dispositions (including related financing), any delays, unexpected costs or other problems experienced with integrating acquisitions and achieving expected savings and synergies and currency fluctuations. The company undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information or future events or circumstances or otherwise.

First quarter highlights 3 Headline EPS 23 US cents up 64% on Q1 02 Low base last year - September 11 - Maintenance shuts Sales up 22% on Q1 02 (10% pro-forma) Sluggish markets, particularly in Europe US price increases Pulp markets pass trough Currency translation

Financial summary 4 US$ millions Quarter ended Dec-01 Sep-02 Dec-02 Sales Vol (t 000's) 1,369 1,639 1,602 Sales 832 1,052 1,019 EBITDA 148 219 190 Operating Profit 65 122 92

Financial summary 5 US cents Quarter ended Dec-01 Sep-02 Dec-02 Headline EPS 14 32 23 Basic EPS 10 32 23 Net Debt (US$m) 1,156 1,419 1,525 Net Debt / Tot Cap 35.2% 37.0% 36.7%

Financial summary 6 Percent Quarter ended Dec-01 Sep-02 Dec-02 Margin - EBITDA 17.8 20.8 18.6 - Operating 7.8 11.6 9.0 RONA 8.8 13.0 9.6 ROE 6.3 18.6 12.5

Strategy 7

The Sappi strategy 8 Global Focused and pulp integrated Low cost Efficient use of capital Intolerance of non-performing assets Re-invest in high return assets Share re-purchase & debt repayment

Financial objectives 9 ROE: after tax return to exceed US risk-free rate by at least 5% (current target > 11%) Operating Margin: target range 12-15% RONA: 5% above LIBOR (or equivalent) in the currencies in which we are invested (current target > 12%) NOPAT Return on Net Assets: to exceed WACC (current target > 9%) Debt / Total Capitalisation: target range 25-50%

Geographic diversity Where product is manufactured Sales by Region (US$)* Where product is sold 10 39% 40% 38% 41% 21% 8% 13% North America Southern Africa Europe Far East & Other * For the quarter ended December 2002

11 Financial performance

50 40 30 20 10 0 12 Headline EPS (US$) Q301 Q401 Q102 Q202 Q302 Q402 Q103 Q201 Q101 Q400 Q300 Q200 Q100 Q499 Q399 Earnings US cents per share 98 Ave Q199 Q299

Return on equity 13 ROE (after tax) 35 30 25 ROE Objective** % 20 15 10 5 0 1996 1997 1998 1999 Q100 * Before Mobile closure costs Q200 Q300 Q400 Q101 Q201 Q301 ** After tax return in US$ earnings that on average exceed the American risk free rate by at least 5% * * Q401 Q102 Q202 Q302 Q402 Q103

Finance costs* 14 300 250 200 US$ MM 150 100 50 0 1998 1999 2000 2001 2002 2003* * Annualised Q1 03 net finance costs before capitalised interest and excluding once-off items

Capex control 15 Capex vs depreciation* 400 350 Capex Depreciation FY03 plan 300 US$ MM - 250 200 150 100 50 0 1998 1999 2000 2001 2002 Q103 * Depreciation excludes fellings, Capex excludes plantation & timberlands

16 Divisional performance Sappi Fine Paper

Market conditions Coated fine paper 17 US ad pages up US demand improves US price increases being implemented European demand flat

Market conditions 18 Coated free sheet prices 1,300 1,300 1,200 1,200 1,100 1,100 1,000 900 800 700 1,000 900 800 700 600 500 Jan-95 Apr Jul Oct Jan-96 Apr Jul Oct Jan-97 Apr Jul Oct Jan-98 Apr Jul Oct Jan-99 Apr Jul Oct Jan-00 Apr Jul Oct Jan-01 Apr Jul Oct Jan-02 Apr Jul Oct Jan EUR/Ton US$/Short ton 600 500 Germany CFS 90gsm sheets US CFS No.3 60lb rolls SOURCE: PPI This Week and RISI

Market conditions 30% 19 US Magazine ad pages 20% 10% 0% -10% -20% -30% Jan-84 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Year on year % change Magazine Ad Pages yoy % change SOURCE: Publishers Information Bureau

Market conditions 20 US + Europe CWF Purchases 1,200,000 1,100,000 metric tons 1,000,000 900,000 800,000 700,000 600,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1998 1999 2000 2001 2002 SOURCE: Cepifine, AFPA December 2002 = Sappi estimate

21 Year-on-year growth in CWF purchases (3mma) Market conditions 20% 15% 10% 5% 0% -5% -10% -15% Europe US -20% Jan-97 Apr-97 Jul-97 Oct-97 Jan-98 Apr-98 Jul-98 Oct-98 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 SOURCE: Cepifine, AFPA

Operating performance 22 Sappi Fine Paper Quarter ended Dec-01 Sep-02 Dec-02 Sales (US$m) 697 905 862 Cost per ton (US$ Index)* 100 n/a 104 EBITDA Margin (%) 14.5 17.2 15.4 RONOA (%) 5.9 10.4 7.5 Some improvement in ad spend in major markets Demand higher than last year Continued curtailment * Excludes purchased pulp

Operating performance Sappi Fine Paper Europe 23 Quarter ended Dec-01 Sep-02 Dec-02 Sales (US$m) 410 459 403 Cost per ton (US$ Index)* 100 n/a 109 EBITDA Margin (%) 18.8 20.9 20.3 RONOA (%) 11.9 14.6 10.7 Sales volumes down 5% on last year Prices remain under pressure (down 1.5% on Q4 02) Stronger Euro had a positive impact * Excludes purchased pulp

Operating performance Sappi Fine Paper North America Quarter ended Dec-01 Sep-02 Dec-02 Sales (US$m) 239 388 400 Cost per ton (US$ Index)* 100 n/a 87/96** EBITDA Margin (%) 6.3 12.1 10.0 RONOA (%) (3.8) 4.2 2.4 Return to a modest operating profit Ad spend on print media grows Sales volumes boosted by Potlatch acquisition 24 * Excludes purchased pulp ** SFPNA excluding Cloquet

Operating performance Sappi Fine Paper South Africa Quarter ended Dec-01 Sep-02 Dec-02 Sales (US$m) 48 58 59 Cost per ton (US$ Index) 100 n/a 124 EBITDA Margin (%) 18.8 22.4 18.6 RONOA (%) 31.1 46.0 36.0 Strong demand in the quarter Stronger rand increases competitor activity 25

26 Divisional performance Sappi Forest Products

Market conditions FOEX PIX vs PULPEX 27 950 850 750 650 550 PIX price - 28 Jan 2003 NBSK = $446 Hardwood = $461 $ per metric ton 450 350 5/11/98 8/11/98 11/11/98 2/11/99 5/11/99 8/11/99 11/11/99 2/11/00 5/11/00 8/11/00 11/11/00 2/11/01 5/11/01 8/11/01 11/11/01 2/11/02 5/11/02 8/11/02 11/11/02 2/11/03 PULPEX 3 Month (moved 8 weeks forward) FOEX PIX NBSK FOEX PIX Hardwood SOURCE: FOEX & PULPEX

Operating performance 28 Sappi Forest Products Dec-01 Sep-02 Dec-02 Sales (US$m) 135 147 157 Cost per ton (US$ Index) 100 n/a 106 EBITDA Margin (%) 29.6 38.8 35.7 RONOA (%) 11.9 21.3 16.9 Local demand for Kraft firm Passed through pulp price trough Closure in US of DP capacity Quarter ended

Share price (ADR) 150 140 130 120 110 100 90 80 70 60 29 Indexed to 2 nd Jan 02 SOURCE: I-Net Bridge 15-Jan-02 30-Jan-02 13-Feb-02 28-Feb-02 14-Mar-02 28-Mar-02 12-Apr-02 26-Apr-02 10-May-02 24-May-02 10-Jun-02 24-Jun-02 09-Jul-02 23-Jul-02 06-Aug-02 20-Aug-02 04-Sep-02 18-Sep-02 02-Oct-02 16-Oct-02 30-Oct-02 13-Nov-02 27-Nov-02 13-Dec-02 30-Dec-02 14-Jan-03 S&P 500 S&P FP ADR

Outlook 30

Outlook 31 Economic outlook uncertain Pulp cycle has scope for turnaround in prices North American business expected to continue improving Currency volatility Q2 slow - earnings similar to Q1 Still expect reasonable growth for the year

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