Growth was delivered across all geographies, with expertise in e-commerce, combined with a strong Christmas trading period for online retail sales, contributing to continued market share gains.
Integration of North America business is going very well. The business continues to perform ahead of initial expectations, with packaging volume growth significantly ahead of the Group average rate and improved paper productivity.
The recovery of recent increases in paper prices is progressing well, as expected. This, together with operational leverage coming from the strong top-line growth, means that return on sales is expected to increase in this H2 period as compared to H1, and the full year return on sales is expected to be in line with that for the prior year, with trading overall in line with our expectations.
Completion of acquisition of Ecopack and Ecopaper in Romania
DS Smith completed the acquisition of Ecopack and Ecopaper, a leading integrated packaging and paper group in Romania, on 6 March 2018. The acquisition will significantly enhance DS Smith capacity to serve customers in this high growth region as well as supporting a wider substantial Eastern European presence. The acquisition, for an enterprise value of c. €208 million, is expected to be earnings enhancing immediately and is consistent with the Group’s medium term financial targets.
Miles Roberts, Group Chief Executive, said: “I am very pleased with how our strategy is delivering for customers and producing strong results. We continue to gain market share by delivering packaging that adds value for our customers, as they look to improve the efficiency of their own operations. The excellent reaction from US customers reflects the differentiated offer we bring, including our expertise in retail-ready packaging and e-commerce. At the same time, the benefit of a global supply platform for paper and fibre is being seen in the improved operational efficiency of our US assets and greater co-ordination across the Group. We are excited by the structural drivers supporting the growth of sustainable packaging and the opportunities for DS Smith. Our outlook therefore is positive and we remain confident in the future.”