DS Smith ‘transforms’ position in European market

By Joe Whitworth

- Last updated on GMT

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DS Smith unveil interim management statement
DS Smith said it has transformed its position in the European market for recycled packaging after the takeover of a leading European packaging solutions company. 

The comments, made in the firm’s interim management statement, come after the acquisition of SCA Packaging for €1.58bn on 30 June.

The group also announced a 100-day presentation on the performance of SCA Packaging scheduled for 11 October 2012.

“Trading for the group in the period has continued in line with our expectations, with good corrugated box volumes in the legacy DS Smith business, slightly ahead of our GDP+1% target, with particularly encouraging volume growth continuing in Continental Europe,” said ​the statement. 

“This has led to our operating profit margin for the group continuing to improve despite the continued difficult market for our moderately sized paper business.”

Customer reaction

The UK-based firm said they were “pleased​” with the reaction from customers and integration work was slightly ahead of schedule.

“In the period we have seen good performance from the legacy DS Smith business despite the ongoing tough trading environment.

“Trading in the SCA Packaging business has been fully in line with expectations, reflecting the continuing difficult market conditions.

“As previously announced, we expect to deliver a return on capital from the acquisition above our weighted average cost of capital, in the financial year,” ​added the statement.

“The company is trading in line with current market expectations for substantial year-on-year EPS growth and the Board views the remainder of the year with confidence.”

RockTenn agreement

Meanwhile, DS Smith announced a partnership with RockTenn yesterday, to execute a licensing agreement.

The alliance will give RockTenn the exclusive rights to manufacture and distribute DS Smith’s proprietary corrugated packaging designs and to distribute packaging equipment in the US.

“The RockTenn team is tenaciously focused on delivering industry-leading innovation in packaging solutions for our customers​,” said RockTenn’s corrugated packaging president, James Porter.

“This exciting technology brings new opportunities to reduce the total cost of packaging and to improve print options to better sell our customer’s products and do so in a more sustainable fashion.”

DS Smith Group chief executive, Miles Roberts, said: “The extension of our licensee network to the US market, combined with our extensive European corrugated manufacturing footprint, means we now have one of the world’s broadest capabilities for the creation of innovative corrugated packaging propositions.”

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