In a trading update issued yesterday (4 March) in respect of the period since 1 November 2019, the London-headquartered packaging giant said it saw strong corrugated box performances, as expected, in Iberia, eastern Europe and the UK.
In a call to analysts and investors yesterday morning, DS Smith group chief executive Miles Roberts said: “It has also been very pleasing to see the ex-Europac packaging operations perform so well and our leading FMCG and e-commerce businesses growing strongly over the important Christmas period, although some countries with exposure to export led markets, including Germany, do continue to be subdued.
“In our North American business, we are very pleased with the initial customer reaction and operational progress from our new box plant in Indiana, which opened in November.
“Our domestic US business remains robust, although the negative impact of lower US paper export prices remains ongoing, due to reduced demand from China. However, our increasing packaging capacity at the new site will progressively reduce our exposure to that market.
“We have continued to focus on pricing, costs and cash, with limited box price erosion testament to our resilient business model and strong customer offering. We expect to deliver a margin in the full year in line with that achieved in the first half.”
Last week DS Smith completed the sale of its plastics division to Stamford, Connecticut-based Olympus Partners and its affiliate, flexible packaging specialist Liqui-Box.
Roberts said the sale “reinforces our commitment to fibre-based packaging solutions for our customers”.
He added: “In summary, the group has delivered a robust performance during the period within a challenging environment.
“Our sustainable packaging offering, including the replacement of plastics, is becoming ever more important to our FMCG and e-commerce customers and we continue to gain market share.
“With regard to Coronavirus, whilst we continue to monitor events and work closely with all our suppliers and customers, we have not to date seen any material impact on our business.
“Our production is spread over 200 sites across Europe and North America and we have a diverse customer base, and as such we believe we have a robust business model, albeit we are not immune to the event of a widespread macro-economic slowdown.
“So despite continued uncertainty in this environment, our focus on pricing discipline, enhanced cost and efficiency improvements, and cash generation, support our expectation of further good progress in the year.”
Earlier this month DS Smith revealed that its chief financial officer Adrian Marsh is set to leave the group to take on the same role at bookmaker William Hill.
DS Smith’s share price was up by 1.89% in early trading to 328.6p.
