..A leading supplier of recycled packaging in Europe

With a turnover in 2011/12 of £2.0 billion and employing more than 20,000 people, DS Smith Plc is an international supplier of recycled packaging for consumer goods.

On 30 June 2012 DS Smith acquired SCA Packaging. On a combined basis, the group is now the second largest manufacturer of corrugated products in Europe. We are also a leading worldwide supplier of bag-in-box packaging and a leading European supplier of plastic returnable transit packaging. The combined Group now has revenues of approximately £4 billion (based on a combination of historically reported figures and a 12 month contribution from both businesses).

DS Smith is a FTSE 250 company listed on the London Stock Exchange and headquartered in Maidenhead.

http://www.dssmith.com/

17 Sep Investec 380.00 Buy
17 Sep JP Morgan... 368.00 Overweight

Questor share tip: DS Smith has strong start

The FTSE 250 listed packaging group has a good start to the new financial year sending shares higher, says Questor


Market consensus is for DS Smith to increase pre-tax profits to £271m, on revenue of £4.12bn in the year ended April

Market consensus is for DS Smith to increase pre-tax profits to £271m, on revenue of £4.12bn in the year ended April Photo: ALAMY








By John Ficenec, Questor editor

6:00AM BST 18 Sep 2014



DS Smith
286.9p+13.9p
Questor says BUY


SHARES in recycled packaging maker DS Smith [LON:SMDS] jumped more than 5pc yesterday as the company said sales volumes were up in the first quarter of the new financial year. The upbeat update means Questor’s advice that the shares were looking oversold is paying out nicely.





The FTSE 250 company, whose customers include Procter & Gamble and Unilever, manufactures packaging for consumable consumer goods such as washing powder and tinned tomatoes on supermarket shelves.


The packaging group said like-for-like corrugated box volumes since May 1 have grown across all DS Smith’s regions, with growth ahead of last year’s rate and its target rate of “GDP +1pc”.

The company added that it bought a Scandinavian foam business for £24m and that, following the triennial pension review, no drastic changes were required to the funding.

The company generates about 65pc of its earnings in euros and more than 70pc of its revenue comes from outside the UK. DS Smith said a change of one euro cent in the pound/euro exchange rate affected pre-tax profit by about £1.2m.

Miles Roberts, chief executive, said: “Notwithstanding continued headwinds in many of our markets, performance has been in line with our plans.”

DS Smith is still generating plenty of cash and the dividend is covered more than twice by free cash flow. Analysts from Investec expect net debt to fall to about £750m by next April, down from about £830m

Market consensus is for DS Smith to increase pre-tax profits to £271m, on revenue of £4.12bn in the year ended April, giving 24.2p in earnings per share. That leaves the shares trading on 11.3 times forecast earnings.

Questor said “DS Smith shares look oversold” at 259.6p on August 7, and so they proved, rising by almost 11pc in little over a month.

We didn’t expect the recovery to be that quick and we think there could be a little longer to run with the prospective dividend yield of 4pc on offer, and that dividend is covered more than twice by earnings. Questor maintains the long-term view on DS Smith: Buy.

Smith (DS): Investec cuts target price from 380p to 350p and stays with its buy recommendation.

H1 trading update and acquisition

RNS


RNS Number : 2867W

Smith (DS) PLC

06 November 2014






6 November 2014

DS Smith Plc - H1 trading update and acquisition

DS Smith Plc, the leading supplier of recycled packaging for consumer goods, today issues a trading update for the half-year to 31 October 2014 and announces the acquisition of Spanish corrugated board producer Andopack.

Trading update

Group performance remains in line with our expectations, with continued good growth across all regions. The market and business trends discussed in our Interim Management Statement of 17 September 2014 have continued.

Like-for-like corrugated box volume growth is ahead of last year and our medium term financial target of GDP +1%. Return on sales and ROACE continue to improve and our focus on working capital and tight capital management has delivered a strong cash flow performance.

Acquisition of Andopack

We are pleased to announce the acquisition of Andopack, a Spanish corrugated board producer. Andopack is a very well-invested and growing business with good access to both Barcelona and Madrid.

The acquisition gives the Group a direct market position in Spain, allowing us to meet the demands from our pan-European customers to have a presence in this important market. Andopack will provide cost and cash saving opportunities and an excellent platform for growth as we leverage our scale, innovation and customer relationships.

The total consideration, including the assumption of debt, is expected to be circa £35m, subject to closing adjustments, representing a post synergy multiple of between 5.0 and 6.0x EBITDA. The transaction is being financed from existing cash resources and is expected to deliver a return on invested capital above our cost of capital in the second year of ownership.

Outlook

Our outlook remains positive as the business continues to grow, despite economic headwinds in many of our markets. The Board expects continued performance in line with the Group's medium term financial targets.

Miles Roberts, Group Chief Executive, said:

"In the first half of this financial year, we have continued to make good progress with our customers, benefitting from our differentiated commercial offering. We have again delivered volume growth ahead of the market, together with improved margins and returns.

The acquisition of Andopack in Spain is an exciting development for DS Smith as we continue to strengthen our pan-European customer offering. Andopack has high quality assets and we look forward to growing it further as we expand in this attractive market."

7 Nov Investec 350.00 Buy
7 Nov JP Morgan... 368.00 Overweight
6 Nov Goodbody N/A Hold
4 Nov Citigroup 350.00 Buy

Half Yearly Report

Highlights

· Continued success with customers driving growth

o Corrugated packaging volume growth of +2.3% - all regions in growth

o Underlying(6) revenue growth of 2.0%

· Strong financial performance in line with our KPI's

o Return on sales(4) increase of 130 bps (constant currency) to 8.9%

o ROACE(5) improvement of 170 bps to 13.8%

o Strong cash flow generation

o Net debt reduced by £133 million to £694 million

· Active investment and management of business portfolio

o 4 acquisitions and 2 disposals announced or completed

o Roll-out of design centre network through Europe



http://www.moneyam.com/action/news/showArticle?id=4936152

4 Dec Davy Research N/A Underperform
4 Dec JP Morgan... 360.00 Overweight
4 Dec Investec N/A Buy
4 Dec Canaccord... 370.00 Buy

Buy DS Smith for long term gains

The FTSE 250 listed packaging group has a good first half with profits up sharply, says Questor





First half pre-tax profits jumped 45pc to £123m, despite revenue falling 5pc on the euro’s weakness

First half pre-tax profits jumped 45pc to £123m, despite revenue falling 5pc on the euro’s weakness Photo: ALAMY


By John Ficenec, Questor Editor

11:49AM GMT 05 Dec 2014


DS Smith
303.8p+15.4p
Questor says BUY


DS SMITH’s first-half profits beat market expectations, sending shares in the recycled packaging group up more than 5pc yesterday.





Investors were rewarded with a 16pc increase in the interim dividend, and Questor thinks the shares are worth hanging on to for future gains.


The FTSE 250-listed company is operating in some very tough European markets, but online shopping and discount retailers are driving sales higher.



DS Smith generates about 65pc of its earnings in Europe, while more than 70pc of its revenue comes from outside of the UK.

Economic conditions across Europe are subdued. However, Miles Roberts, chief executive, is confident on the company’s outlook: “Packaging has never been more important for our customers.”

The recycled packaging maker’s customers include Procter & Gamble, Nestlé and Unilever, who demand boxes that hold products in a “shelf-ready” format. DS Smith can charge more for these boxes as they reduce costs for retailers, who in turn need fewer staff to stack shelves.

Transporting food long distances and keeping it fresh on shelves for longer will see more plastic and boxes being used in stores.

The boom in online retailing is also increasing the demand for cardboard packaging. The material remains the cheapest and easiest method to transport individually wrapped items through the post.

The like-for-like volume of packaging that DS Smith sold increased by 2.3pc during the six months ended October. Pre-tax profits jumped 45pc to £123m, despite revenue falling 5pc on the euro’s weakness.

DS Smith has been reducing costs since it paid €1.6bn (£1.35bn) for Swedish rival SCA in 2012. The deal increased DS Smith’s exposure across northern Europe, with the company now generating three-quarters of its sales from the continent as a whole.

The profit performance was 15pc ahead of analysts’ expectations, with a particularly strong performance in central Europe, Italy and the UK.

The sharp increase in profits meant the profit margin for the group rose 120 basis points to 8.9pc, towards the top end of company’s targeted range.

DS Smith can continue to increase shareholder returns against a tough European backdrop. It is now selling more cardboard boxes at a faster rate and at a higher profit margin, even after adjusting for additional sales from the SCA acquisition.

DS Smith is generating plenty of cash, and net debt – total debt less cash – has fallen to £694m, down £133m from a year ago. Those debt levels don’t look that risky against a balance sheet net asset value of £1.13bn at the end of October.

Investors are enjoying a decent income stream from DS Smith and the interim dividend was increased from 3.2p to 3.7p, ex-dividend April 5 and payable May 1.

The shares provide a full-year prospective dividend yield of 3.8pc, with payouts having increased about 12pc a year for the past four years.

With its finances looking reasonably robust, DS Smith is looking to expand into new markets. The company has recently purchased a Spanish packaging company and has signed a letter of intent. The deal, if completed, would expand the company into Turkey.

Shares in DS Smith have risen 17pc since Questor said they looked oversold on August 7 at 259.6p. However, there could be more gains to come. The shares trade on 12.2 times forecast earnings, falling to 11.3 times next year, which is in line with packaging sector peers on about 12 times forecast earnings.

DS Smith is growing earnings and the dividend by double digits, while the cash on the balance sheet also provides options for growth or returns. Buy.

05/12/2014 BUY Kathleen O'Donovan NED 10,471
05/12/2014 BUY Louise Smalley NED 14,615

UBS highlights further M&A opportunities for DS Smith

Mon, 08 December 2014



Price: 314.50

Chg: 2.80

Chg %: 0.90%

Date: 16:15



FTSE 250 Quote


Price: 15,962.29 Chg: -40.59 Chg %: -0.25% Date: 16:15

UBS has lifted its target price for packaging group DS Smith from 340p to 355p and reiterated a 'buy' rating after the company's strong first-half results, saying it sees the potential for more deals in the future.
"DS Smith delivered an impressive performance during H1 with robust volume growth being delivered alongside further M&A activity and deleveraging," the bank said.

It said that all key metrics showed improvements, such as corrugated card volumes, margins, return on average capital employed and cash generation.

DS Smith has either completed or announced the disposal of two businesses and the acquisition of four business over the past six months, but UBS believes that there are still more opportunities for the company.

"We believe the fragmented nature of the European corrugated industry, with the top five players accounting for only circa 40% of the market, offers opportunities for further consolidation and the deleveraging being delivered by DS Smith gives it the capacity to make additional acquisitions," the bank said.

"Inclusive of the £35m spend on Andopack, we continue to believe DS Smith can spend circa £600m on acquisitions."

The stock was up 1% at 314.76p by 11:01, and has now risen by 9% since its first-half results last Thursday

Top performing sector today
Forestry & Paper 12,688.66 +2.43%

2 Feb Canaccord... 370.00 Buy

17 Feb Jefferies... 360.00 Buy (upgrade)

Proposed acquisition of Duropack & trading update
RNS
RNS Number : 5333F
Smith (DS) PLC
23 February 2015



23 February 2015



DS Smith Plc

Proposed acquisition of Duropack and trading update



Proposed acquisition of Duropack

DS Smith Plc ("DS Smith"), the leading provider of recycled corrugated packaging in Europe, is pleased to announce the proposed acquisition of the Duropack business ("the acquisition") for approximately €300m (c.£220m). Duropack, a recycled corrugated board packaging business with market-leading positions across South Eastern Europe, is being acquired from CP Group 2 BV, a One Equity Partners subsidiary.

The acquisition is highly complementary to DS Smith's geographic footprint and transforms our position in higher-growth South Eastern European geographies, further strengthening our pan-European capabilities to our existing customer base in addition to providing access to new customers.

Duropack has number one or two market positions in many of the geographies in which it operates and, combined with DS Smith's existing operations in Hungary, Slovakia and Austria, will have a leading position across South Eastern Europe.

The business is well invested with high quality assets and operates a "short paper, long fibre" model similar to that of DS Smith.

In 2014 the business delivered EBITDA of €41 million and EBIT of €22 million on turnover of €273 million. Cost synergies of €12 million, are expected to be realised within three years of ownership. The additional investment required to integrate the acquisition is c.€13 million, incurred over the first two years. This will be funded by cash savings, driven by working capital efficiencies and tight cash management.

The total consideration, including the assumption of debt, is expected to be circa €300 million, subject to customary post-closing adjustments, representing a post synergy multiple of 5.7 times EBITDA.

The acquisition is being financed from existing debt facilities. It will be immediately accretive to earnings per share and generate a return above our cost of capital during the second year of ownership.

The acquisition is subject to competition clearance, which we expect in calendar Q2, with completion shortly thereafter.

Trading update

In the three month period to 31 January 2015, the business has continued to perform in line with our plans. Volumes have been ahead of the run-rate achieved in the first half of the year and remained positive in all regions, with Central Europe and Italy particularly strong. We are delighted by the initial customer reaction to our recent acquisition of Andopack and performance there has been in line with our expectations.



On 30 January 2015, we completed the disposal of our testliner mill in Nantes, France, which had capacity of c. 60 thousand tonnes. This transaction is in line with our strategy to exit paper manufacturing which does not sufficiently complement our Packaging business. There will be an exceptional charge of £9 million, of which £7 million is non-cash.



Our outlook remains positive as the business continues to perform in line with our medium term financial targets, despite economic headwinds in many of our markets, and the Board views the future with confidence.



Miles Roberts, Chief Executive of DS Smith said:

"Duropack is an excellent business and a highly complementary fit. It is a further important step in our strategy to leverage our scale and strengthen our geographic footprint. Duropack has high quality assets with market leading positions. We look forward to it contributing to the overall growth of DS Smith in attractive markets where we were previously under-represented.



Since our half-year, we have continued to make good progress with our customers, benefitting from our differentiated commercial offering and the ongoing roll out of our design centres. Our volume performance has been strong, as the rapidly changing retail environment and consumer buying patterns make well-designed recycled packaging increasingly relevant."

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23 Feb Berenberg 340.00 Hold
23 Feb JP Morgan... 380.00 Overweight

24 Feb Investec 410.00 Buy
24 Feb Jefferies... 410.00 Buy

DS Smith PLC (SMDS:LSE) set a new 52-week high during Wednesday's trading session when it reached 369.44. Over this period, the share price is up 7.02%.

Trading Statement
RNS
RNS Number : 2750M
Smith (DS) PLC
06 May 2015



6 May 2015



DS Smith Plc - 30 April 2015 Year end trading update



CONTINUED GOOD GROWTH



DS Smith Plc, the leading supplier of recycled packaging for consumer goods, today announces a trading update for the year to 30 April 2015.



Trading update

Group performance in the year has been in line with our expectations, with strong underlying growth more than offsetting the continued strengthening of sterling on translated results. The market and business trends from our trading update of 23 February 2015 have remained consistent with volume growth in H2 ahead of our first half and the prior year. Growth has been across all regions, as the roll-out of our design centres and proposition continues to gain good customer traction.



Return on sales and return on capital continue to improve due to further business integration, increasing our value-added products and services to customers, and operational efficiencies, combined with tight working capital management.



Our outlook remains positive as the business performs in line with our medium term financial targets, despite economic headwinds in many of our markets, and the Board continues to view the future with confidence.



Duropack update

Following the announcement of the proposed acquisition of Duropack, on 23 February 2015, the necessary competition filings have been made and it is expected that completion will take place in Q1 of our financial year 2015/16. Plans are in place to integrate this business immediately from completion and we look forward to building on the excellent market positions that Duropack already has in its regions.



Miles Roberts, Group Chief Executive, said:

"We are pleased with the performance of the business in the year, in particular the continued market share and volume growth. We continue to actively manage our business portfolio and the progress we have made with customers during the year, together with the opportunities we see for growth in

Shares - DS Smith is expected to be strongly cash generative over the net two or three years and a significant proportion of this will be spent on capex and acquisitions, which should yield good returns and create value for shareholders.

21 May Berenberg 350.00 Hold

Proposed acquisition
RNS
RNS Number : 1841R
Smith (DS) PLC
25 June 2015

25 June 2015



DS Smith Plc

Proposed acquisition of Grupo Lantero's corrugated business



DS Smith Plc ("DS Smith"), the leading provider of recycled corrugated packaging in Europe, is pleased to announce today that we have reached an agreement to acquire the corrugated activities of Grupo Lantero, including several operations in which DS Smith currently has a minority holding. The business is a well-invested Iberian corrugated producer with a strong focus in the FMCG sector, operating seven sites across Spain. This acquisition significantly strengthens our operations in Spain, an important and growing market for corrugated packaging, taking our market share to approximately 10%. It also builds on our recent acquisition of Andopack in calendar Q4 2014, where we have seen a very positive customer reaction to our product and service offering. The acquisition is subject to competition clearance, which we expect during calendar Q3 2015 with completion shortly thereafter.



The total consideration, including the assumption of debt, is expected to be circa €190m, subject to closing adjustments, representing a post synergy multiple of between 5 and 6x EBITDA. The transaction is being financed from existing cash resources and is expected to deliver a return on invested capital above our cost of capital in the second year of ownership.



Miles Roberts, Chief Executive of DS Smith said:

"We are delighted to announce the acquisition of the corrugated activities of Grupo Lantero. It is a high quality business that we have known and partnered with for a number of years and significantly increases our offering to Pan-European customers in this large and growing market. It is a further important step in our strategy to leverage our scale and strengthen our geographic footprint and we look forward to working with Grupo Lantero stakeholders and contributing to the overall growth of DS Smith."



Enric Holzbacher, Chief Executive of Grupo Lantero added:

"We are very pleased to hand over our corrugated packaging business to our partner DS Smith. We are convinced that DS Smith has a strong alignment with our FMCG sector and will further develop our well established customer relationships. Grupo Lantero has decided to strategically focus its activities on its multinational rigid and flexible plastic divisions: Coexpan and Emsur."