ROBUST PERFORMANCE IN CHALLENGING ENVIRONMENT; ON TRACK FOR FY24
DS Smith (LSE: SMDS):
6 months to 31 October 2023
|
|
Change
|
Change
|
Revenue |
£3,513m |
(18%) |
(18%) |
Adjusted operating profit(1) |
£365m |
(13%) |
(12%) |
Profit before tax |
£268m |
(15%) |
(15%) |
Adjusted basic EPS(1) |
17.7p |
(15%) |
(15%) |
Statutory basic EPS |
14.8p |
(12%) |
(12%) |
Dividend per share |
6.0p |
- |
- |
Return on sales (RoS)(2) |
10.4% |
+70bps |
+70bps |
ROACE(3) |
12.8% |
(40bps) |
(30bps) |
Net debt / EBITDA(6) |
1.7x |
- |
- |
See notes to financial table below
- Robust adjusted operating profit of £365m (£418m H1 FY22/23) in challenging environment
- Decline in like for like box volumes of 4.7% in H1, with sequential quarter-on-quarter improvement and H2 expected to show continued positive momentum
- Pricing has been resilient, underpinned by strong customer relationships, innovation and high service levels, with downward pressure offset by lower input costs and productivity initiatives
- Strong financial position: 1.7x net debt/EBITDA (FY22/23: 1.3x)
- Continued capital and operational investment to support our customers and improve productivity and environmental efficiency
- Full year trading in line with management expectations
Miles Roberts, Group Chief Executive, commented:
“I am pleased with the performance for the first half of the year. Our focus on value-added packaging solutions to predominantly FMCG customers, together with the benefit from our self-help productivity initiatives and flexible supply chain has driven a robust profit performance. Our Q2 volume performance was improved versus Q1 and we expect this trend to continue with H2 volumes stronger than H1, sequentially and on a like for like basis, as we continue to win market share.
“While we anticipate markets to remain challenging, we remain focused on our customers and our costs and expect to deliver full year results in line with management expectations. Looking forward we remain confident in our business model and our capital and operational investment programmes which drive innovation, growth, improving productivity and environmental efficiency.”
A complete report on DS Smith’s half-year results is available at: https://www.dssmith.com/investors/results-and-presentations/2023/ds-smith-half-year-results-202324.
Notes to the financial table
Reported results are presented in the Consolidated Income Statement and reconciliations to adjusted results are presented on the face of the Consolidated Income Statement, in note 2, note 3, note 7, and note 14.
(1) |
|
Operating profit (adjusted EBITA) is before adjusting items (as set out in note 3) and amortisation of £51 million. |
(2) |
|
Operating profit before amortisation and adjusting items as percentage of revenue. |
(3) |
|
Operating profit before amortisation and adjusting items as a percentage of the average monthly capital employed over the previous 12 month period. Average capital employed includes property, plant and equipment, right-of-use assets, intangible assets (including goodwill), working capital, provisions, capital debtors/creditors, biological assets and assets/liabilities held for sale. |
(4) |
|
Corrugated box volumes on a 6 months basis (based on area (m2) of corrugated box sold), adjusted for working days, on an organic basis. |
(5) |
|
GDP growth for rolling 6 months (year-on-year) for the countries in which DS Smith operates, weighted by our sales by country = 0.7%. Source: Eurostat (14 Nov 2023) and ONS |
(6) |
|
EBITDA being operating profit before adjusting items, depreciation and amortisation and adjusted for the full year effect of acquisitions and disposals in the period. Net debt is calculated at average exchange rates as opposed to closing rates. Ratio as calculated in accordance with bank covenants. See note 14 on non-GAAP measures for reconciliation. |
(7) |
|
Free cash flow before tax, net interest, growth capital expenditure, pension payments and adjusting cash flows as a percentage of operating profit before amortisation and adjusting items. |
(8) |
|
Free cash flow is the net movement on debt before cash outflow for adjusting items, dividends paid, acquisitions and divestment of subsidiary businesses (including borrowings acquired) and proceeds from issue of share capital. |
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 statement should be construed as a profit forecast.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231207046070/en/
Contacts
David Lindsay
David.Lindsay@dssmith.com
