DS Smith plc A year of significant delivery

FTSE News FTSE 100

DS Smith plc (LON: SMDS) have today provided full year results for the 12 months to 30th April 2019.

12 months to 30 April 2019 Continuing operations   Change(reported) Change(constant currency)
Revenue £6,171m +12% +12%
Adjusted operating profit(1) £631m +28% +28%
Adjusted profit before tax(1) £569m +31% +31%
Profit before tax £350m +35% +35%
Adjusted EPS(1) 33.3p +8% +8%
Basic EPS 19.7p (7%) (8%)
Dividend per share 16.2p +13% +13%
Return on sales(4) 10.2% +130bps +120bps
ROACE(5) 13.6% -10bps -10bps


• Strong operational performance

◦ Market outperformance – volume growth at 2.4%(2)

◦ Volume growth in all regions through FMCG and e-commerce focus

◦ Continued success of US operations

• Strong financial performance

◦ Record return on sales and upgrade of medium-term target to 10 – 12%

◦ Organic adjusted operating profit growth(8) of 9%

◦ Profit before tax up 35%

◦ Free cash flow up 84%

◦ Robust balance sheet – pro-forma net debt/EBITDA(9) <2.0X

• Strategic delivery

◦ Acquisition of Europac – upgrade to synergies from €50m to €70m

◦ Sale of plastics division agreed

Miles Roberts, DS Smith Group Chief Executive, commented:

“This strong set of results from DS Smith demonstrates the company’s growing scale and strategic progress in key markets. We are continuing to gain market share throughout Europe, particularly among more resilient FMCG customers, and our US business is performing well following our recent acquisition there.

I am very pleased to be able to raise our medium-term return on sales target, up to 10 – 12 per cent, as well as adding to our cost synergy estimate following successful initial progress in integrating Europac, which we acquired during the year. DS Smith is increasingly well-placed to capitalise on rising consumer demand for sustainable corrugated packaging as well as greater convenience from both e-commerce and more traditional retail channels.

The underlying drivers of demand for sustainable corrugated packaging and our differentiated offering give us confidence in ongoing volume and market share growth. We saw some volume weakness in certain export-led markets in the second half of 2018/19, including Germany, but we expect this to improve during the current year. While volatility in the macro-economic environment and input costs remains, our focus on pricing discipline, operating efficiencies and cash flows supports our expectations of further good progress in the coming year.”