The London-headquartered packaging giant recorded sales on continuing operations in the year to 30 April 2022 up 21% year-on-year or by 26% on a constant currency basis to £7.2bn. Adjusted operating profit was up by 23%, or 29% constant currency, to £616m, while pre-tax profit leapt by 64%, or 71% constant currency, to £378m.
The company reported like-for-like corrugated box volume growth of 5.4% compared to last year. It also saw positive profit momentum through the period, with H2 EBITA of £340m compared to £276m in H1.
It said price recovery successfully offset increased input costs, while investment in growth projects is on track, with its new greenfield site in Italy now operational and Poland currently being commissioned.
On sustainability, DS Smith said it has been working with its customers to deliver their sustainability goals. Circular design metrics are gaining traction, with 2,000 live projects, while the business said it has replaced 313 million units of plastic since 2020.
During the year, it launched 100 biodiversity projects and achieved its target for producing 100% reusable or recyclable packaging. The company has also reported a 29% reduction in CO2 per tonne of production compared to 2015.
Group chief executive Miles Roberts said: “It has been another year of volatile trading conditions where we have worked through the tail-end of the pandemic and, more recently, the tragic events of the Russian invasion of Ukraine.
“These difficult periods have again brought the best out of all of our colleagues at DS Smith, demonstrating their resilience, compassion and commitment.”
He added: “We have delivered strong operational, environmental and financial results. The actions we have taken, driven by our strategic focus on our customers and their changing needs, including an ever-increasing focus on sustainability, have resulted in record volume growth.
“This, together with price increases which have offset significant cost inflation, has driven a strong improvement in profitability and high cash generation. We continued to recycle capital out of mature, non-core assets with the disposal of the De Hoop paper mill, whilst reinvesting in new packaging sites that meet customer demand and offer attractive financial returns.
“The new financial year has started well, building on the momentum from the previous year. Whilst there remains considerable uncertainty about the overall economic environment, our expectations remain unchanged. Strong customer demand reinforces our confidence to invest in the business, with capital expenditure expected to further increase in the current year.
“We currently expect to see 2-4% growth in our volumes, aided by our focus on resilient end markets, a strong performance in the US and the opening of new sites in regions where demand is buoyant.
“This growth, combined with the benefits of ongoing pricing momentum and careful management of our cost base gives us confidence for the year ahead and is expected to result in a further substantial improvement in our performance.”
DS Smith’s share price was climbing following the publication of the results this morning (21 June), and at the time of writing just before midday stood at 290.7p, up 2.97% on yesterday’s close (52-week high: 465.97p, low: 277.40p).
