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The company said it is continuing to progress well despite, as expected, continued macro-economic uncertainty, and expectations for overall financial performance remain unchanged.
The corrugated packaging giant said customer engagement and differentiators of scale, service, quality and innovation, have enabled strong pricing discipline. This, combined with ongoing operating cost efficiencies and focus on cashflow generation, together with new business wins in Europe and the US, gives it confidence in its resilient business model despite ongoing subdued volumes in some markets, in particular those economies with significant export-led market exposure, including Germany.
Europac integration and synergy delivery are said to be progressing “very well”, with “excellent customer and employee engagement.”
In a statement the company said: “We completed the remedy disposals in June and our paper footprint optimisation review continues to progress. Construction of our greenfield packaging plant in Indiana, which will significantly enhance our capability in the US and reduce our long paper position, is fully on track, with production expected to start in this calendar year. We continue to expect completion of the disposal of our Plastics division before the end of this calendar year.”
Miles Roberts, group chief executive, said: “The underlying drivers of demand for sustainable corrugated packaging remain strong and our leading offerings for highly resilient FMCG and e-commerce customers give us confidence of volume and market share growth.”
Highlighting the company’s emphasis on sustainable packaging, Steve Miley, senior market analyst at www.asktraders.com told Packaging News: “Following last year’s launch of the paper cups recycling facility in Kent, DS Smith took another step in becoming a leader in sustainable packaging by launching the Coffee Cup Drop Box programme.
“This programme ensures that coffee cups are separated from normal waste and easily recycled. Each Box is made from recycled cardboard and has a capacity of up to 700 cups, with Royal Mail overseeing collection when filled. These boxes are made available to 2.7 million businesses across the UK with a cost of £15 pounds per use.”
Having analysed DS Smith’s performance over the financial period, Miley said: “The company is on target with the transformation towards a fibre-based packaging focused company, a transformation that was marked recently by the disposal of the plastic unit to Olympus Partners. This disposal is aiming for completion by the end of 2019. The integration of Europac that was acquired at the end of 2018 is in progress and already generating cost synergies towards the expected £70m per annum by 2022.”
