Smith (DS) PLC AGM Trading Statement (9029K)
07 September 2021 - 4:00PM
UK Regulatory
TIDMSMDS
RNS Number : 9029K
Smith (DS) PLC
07 September 2021
7 September 2021
DS Smith Plc - AGM trading statement
DS Smith Plc ("DS Smith"), today issues a trading update in
respect of the period since 1 May 2021.
Miles Roberts, Group Chief Executive, said:
"I am very pleased with the progress made during the financial
year to date. We have continued to build on our strong customer
relationships resulting in excellent volume growth and good
progress towards recovering the significant increasing costs of
production through higher prices. Consequently overall trading
continues to strengthen in line with our expectations.
The long-term structural growth drivers of e-commerce and
sustainability have been accelerated by the effects of Covid. Over
many years, we have built a business that is ideally positioned to
benefit from these growth drivers. Accordingly, while the
macroeconomic environment remains uncertain, we remain confident
about the prospects for the business in this financial year and
beyond."
Trading overview
Trading continues to progress well, in line with the trends and
momentum described in our full year results on 22 June 2021. Driven
by our differentiated sustainable packaging offer, box volumes have
grown very strongly versus the comparable prior year period and
also compared to the comparable period in 2019. Whilst this growth
has been across all parts of the group it has been especially
strong in the US and Southern Europe and with our large FMCG
multi-national customers. Industrial customers have also seen
significant increases in demand but this represents a relatively
small proportion of our overall customer portfolio given our
development in the resilient and growing FMCG customer base.
Input costs have continued to rise with notable increases in the
cost of energy and transportation. Combined with the cost of OCC
remaining high, this has resulted in further significant increases
in the price of paper. Given the strong demand for our packaging we
have seen good progress towards recovering these increases.
Strong growth driven by e-commerce, sustainability and
innovation
The volume growth has been driven by continued strength in the
e-commerce and consumer sectors backed by our long-term commitment
to innovation. Our range of products and services to solve our
customers' challenges continues to grow in depth and reach. We
have, for example, recently launched our innovative Circular Design
Metrics, which are a first for the industry as a way of
systematically measuring the environmental impact and efficiency of
packaging within supply chains. We are seeing excellent customer
feedback from this, as they look for alternatives to single-use
plastic and to improve their environmental impact.
E-commerce continues to be a priority and our growth is being
supported by investment in technology solutions and the further
roll out of our digital platform, underpinned by our extensive
European distribution network.
Investing for growth
Construction of the additional packaging manufacturing sites in
Italy and Poland is proceeding to plan and they are expected to
begin operations in Q4 this financial year. Both plants have
already received advanced commitments from customers for over 50%
of their capacity. The new sites are in part being funded by the
recently announced proposed disposal of our non-core De Hoop paper
mill. Our investment plans continue to prioritise meeting the
growth of our packaging customers both for the near and
medium-term.
Conference Call
A conference call for analysts and investors, hosted by Miles
Roberts, will take place today, 7 September 2021 at 8.00am London
time. The dial-in number is:
UK/International +44 (0) 33 0551 0200
UK Toll Free 0808 109 0700
Password DS Smith
A play-back facility of this call will be available until 14
September 2021. The dial-in number is: +44 (0) 20 3451 9993, access
pin 8543371#. A recording and transcript of the call will also be
available through the Investor Relations section of our website:
https://www.dssmith.com/investors/results-and-presentations
Enquiries
DS Smith Plc
Investors +44 (0)20 7756 1800
Hugo Fisher, Group Investor Relations Director
Rachel Stevens, Investor Relations Director
Media
Greg Dawson, Group Corporate Affairs Director
Brunswick +44 (0)20 7404 5959
Dan Roberts, Sophia Lazarus
About DS Smith
DS Smith is a leading provider of sustainable paper-based
packaging worldwide which is supported by recycling and papermaking
operations. It play a central role in the value chain across
sectors including e-commerce, fast moving consumer goods and
industrials. Through its purpose of 'Redefining Packaging for a
Changing World' and its Now and Next sustainability strategy, DS
Smith is committed to leading the transition to the circular
economy, while delivering more circular solutions for its customers
and wider society - replacing problem plastics, taking carbon out
of supply chains and providing innovative recycling solutions. Its
bespoke box-to-box in 14 days model, design capabilities and
innovation strategy sits at the heart of this response. DS Smith is
committed to science-based targets for carbon reduction and to
achieving net zero by 2050. DS Smith operates in 34 countries
employing around 29,000 people and is a Strategic Partner of the
Ellen MacArthur Foundation.
Cautionary statement
This announcement contains certain forward-looking statements
with respect to the operations, performance and financial condition
of the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and
developments to differ materially from those anticipated. The
forward-looking statements reflect knowledge and information
available at the date of preparation of this announcement and DS
Smith plc undertakes no obligation to update these forward-looking
statements. Nothing in this trading statement should be construed
as a profit forecast.
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