DS Smith — H1 2024/25 Earnings Presentation
20 slides from DS Smith's earnings presentation, Dec 5, 2024
Slide 1: Half year results 2024/25
1 Half year results 2024/25 5 December 2024
Slide 2: Redefining packaging for a changing world
2 Redefining packaging for a changing world • In line H1 profit performance despite challenging market • Strong customer relationships, innovation, service and quality • Volume growth of 2% • Lower profits driven by the expected lower packaging prices • Packaging prices yet to fully recover higher i
Slide 3: Financial results
3 Financial results
Slide 4: Key financial metrics
4 Key financial metrics Change Change Continuing operations HY 2024/25 HY 2023/24 Reported Constant currency Revenue (£m) 3,371 3,513 (4%) (2%) Operating profit(1) (£m) 221 365 (39%) (38%) Return on sales(1) 6.6% 10.4% (380 bps) (370 bps) Adjusted EPS(1) 8.3p 17.7p (53%) (52%) Free cash flow (£m) (6
Slide 5: Revenue development
5 Revenue development Revenue | continuing operations | £m Packaging: £2,919m Packaging: (£163m) Other: £39m Packaging: £2,755m — Other volume includes paper, recycling corrugated sheet — Other sales price mix includes paper, recycling and external energy Private & Confidential © DS Smith www.dssmit
Slide 6: Packaging pricing yet to reflect 2025 input cost increases
6 Packaging pricing yet to reflect 2025 input cost increases EBITA | continuing operations | £m Private & Confidential © DS Smith www.dssmith.com
Slide 7: Cash flow
7 Cash flow Cash flow £m HY 2024/25 HY 2023/24 (continuing operations) EBITDA 391 522 Working capital (55) (253) Pension payments/other (42) (10) Capex (net of proceeds) (239) (208) Tax and interest (124) (105) Free cash flow (69) (54) FCF per share (5.0p) (3.9p) Cash conversion 65% 41% — Non-recour
Slide 8: Net Debt and leverage ratios
8 Net Debt and leverage ratios EBITDA | Net debt 2.1x 2.8x (1,500) (1,700) (1,900) Net debt £m (2,100) (2,300) (2,230) (69) (2,500) (165) (8) (2,472) (2,700) 30-Apr-24 Free cash flow Dividends IFRS 16 / FX / other 31-Oct-24 Net debt / EBITDA given as defined by our banking covenants Private & Confid
Slide 9: Delivering for all stakeholders
9 HY24/25 Delivering for all stakeholders
Slide 10: In-line performance despite a challenging market
10 In-line performance despite a challenging market Challenging market backdrop • Positive volume growth o Strong growth in North America and Eastern Europe • Packaging pricing yet to fully recover higher input costs Managing input cost pressures • Productivity improvements • Tight cost control offs
Slide 11: Delivering for our customers
11 Delivering for our customers Service(1) Quality(2) Customer satisfaction(3) Defect reduction 97.0% 120 110 108 96.0% 100 106 95.0% 80 104 94.0% 60 102 100 93.0% 40 98 92.0% 20 96 91.0% 0 94 2017 2018 2019 2020 2021 2022 2023 2024 2017 2018 2019 2020 2021 2022 2023 2024 2017 2018 2019 2020 2021 20
Slide 12: Delivering for our customers
12 Delivering for our customers “Wicked” Nestlé Procter & Gamble • Procter & Gamble • Simplex Innovators Excellence Awards: Baby • 100% plastic free point of Award: cost reduction and Care and Home Care sale display. supply chain optimisation. packaging solutions. Private & Confidential © DS Smith w
Slide 13: Delivering for our customers
13 Delivering for our customers Zalando Mondelez Carlsberg • Extended preferred • Fibre-based solutions to • Pioneering multi-pack supplier partnership for replace single-use plastics packaging solution with sustainable fibre-based e- across Europe. round corners. commerce packaging. • Supporting ne
Slide 14: Sustainable investment driving growth and efficiency
Sustainable investment driving growth and efficiency 14 Customer driven expansion in Increasing innovation footprint Rouen biomass boiler in Poland Hungary €90m incl €15m subsidy €35m investment €25M investment • Operational Q1 2025; on time, on budget • Over 40% manufacturing capacity boost • Incre
Slide 15: Combination with International Paper
15 Combination with International Paper • Combining two complementary businesses with leading positions in Europe and North America to create a global sustainable packaging solutions leader • Opportunity to drive best practice and optimise supply chains • Unlocking meaningful cost synergies as well
Slide 16: Outlook
16 Outlook • Q2 market trends continuing into H2 • Relentless focus on customer value-add • Expect ongoing modest volume growth and sequential packaging price increases to recover higher input costs • Recent paper market weakness • Strong corrugated market fundamentals • Completion of acquisition by
Slide 17: Appendix
17 Appendix
Slide 18: Foreign exchange exposure
18 Foreign exchange exposure Closing rate Average rate Average rate Average rate 2024/25 Revenue (%) 31 October H1 2023/24 FY 2023/24 H1 2024/25 2024 GBP 14.7% EUR 59.7% 1.159 1.161 1.183 1.194 PLN 3.4% 5.220 5.134 5.080 5.195 SEK 2.4% 13.523 13.371 13.542 13.887 DKK 2.0% 8.641 8.658 8.825 8.907 USD
Slide 19: Debt analysis
19 Debt analysis Available Committed Facilities at 31 October 2024 * As defined in the Group’s banking agreements. * As defined in the Group’s banking agreements. As at 31 October 2024, the weighted average remaining life of the Group’s committed borrowing was 3.25 years. Debt shown net of swaps. Pr
Slide 20: Technical guidance
20 Technical guidance £345m £23m Depreciation Pension deficit reduction cash contribution £95m c.£400-450m Amortisation Capex c.£145m 1% move in GBP Interest incl. pension FX Approximately £5m EBITA annual impact (£1 million is pension) 25% Tax rate Private & Confidential © DS Smith www.dssmith.com