2019 Annual Report Annual Report

DS Smith Plc Redefining packaging for Annual report & accounts 2019 a changing world Annual report & accounts 2019 Strategic report Contents Strategic report Highlights 2 DS Smith at a glance 6 Chairman’s statement 8 The evolving market landscape Revenue (£m)1 Return on sales (%)1,2 Welcome 12 Our business model 15 Our differentiators 18 Group Chief Executive’s interview £6,171m 10.2% 20 Continuing our growth 23 Our strategy 6,171 10.2 24 Our strategy — customers 2019 2019 26 Our strategy — people 5,518 8.9 30 Our strategy — sustainability 2018 2018 36 Our strategy — financial 4,540 8.9 38 Operating review 2017 2017 43 Financial review 49 Principal risks and viability statement Operating profit (£m) Adjusted operating profit (£m)2 Governance “In this report we set out what 56 Introduction to corporate governance £427m £631m 58 Board of Directors we have achieved in the year 60 Leadership and engagement 63 Effectiveness 427 631 2018/19, but more importantly 64 Accountability 2019 2019 65 Audit Committee report 329 492 why we are well set up for the 69 Nomination Committee report 2018 2018 72 Remuneration Committee report 280 405 years ahead.” 94 Directors’ report 2017 2017 97 Directors’ responsibilities 2 Financial statements Earnings per share (p) Adjusted earnings per share (p) 98 Independent Auditor’s report 106 Consolidated income statement 19.7p 33.3p 107 Consolidated statement of comprehensive income 19.7 33.3 108 Consolidated statement 2019 2019 of financial position 109 Consolidated statement of changes 21.2 30.7 2018 2018 in equity Over the last 12 months we have seen In this report we set out what we 110 Consolidated statement of cash flows 17.7 27.3 111 Notes to the consolidated 2017 2017 significant change. With the digital world have achieved in the year 2018/19, financial statements accelerating changes in how people live but more importantly why we are 162 Parent Company statement ROACE2 Free cash flow2 and work, and the huge drive for a more well set up for the years ahead. of financial position sustainable society, our customers and We explain the underlying growth 163 Parent Company statement of changes in equity 13.6% £339m stakeholders are asking new questions drivers for the corrugated industry, 164 Notes to the parent Company of us. These questions are what DS Smith and why DS Smith is in an excellent financial statements 13.6 339 thrives on. position to take advantage of those 168 Five-year financial summary 2019 2019 opportunities. As a company we take 169 Shareholder information 13.7 184 We have grown substantially, with the pride in understanding the world around 2018 2018 acquisition of Europac in Iberia and us and how we can make a positive 14.3 341 France and the full integration of 2017 2017 impact for everyone that has a stake Interstate Resources in the US. These in our company — we are redefining acquisitions have given us a higher packaging for a changing world. quality supply base; simply put, the right assets in the right places. We also took the decision to sell our Plastics division, in order to focus purely on our fibre 2.4% 23% based model. Like-for-like corrugated box Reduction in accident MILES ROBERTS volume growth3 frequency rate In addition to the significant corporate Group Chief Executive activity and positive performance of the acquired businesses, our underlying business has also grown well. We have 6.1% c. 17 billion continued to win awards for our Like-for-like reduction Boxes manufactured packaging innovation, and our safety statistics have improved once again, in CO2e per tonne for the tenth year in a row. 1. Comparatives restated for the adoption of IFRS 15 Revenue from Contracts with Customers 2. Continuing operations, before adjusting items and amortisation. These are all non-GAAP performance measures — see note 33 to the financial statements 3. Excludes Europac Annual report & accounts 2019 | dssmith.com 1 Strategic report DS Smith at a glance Redefining packaging for Our strategy To be the leading supplier of sustainable packaging solutions. Our strategy is balanced across our four key stakeholders a changing world of customers, employees, communities and investors. To delight To realise the potential To lead the way To double our size our customers of our people in sustainability and profitability • Delivering on all • Ensuring the safety of all • Putting sustainability at the • Winning market share Our Purpose our commitments • Creating an environment that heart of the business • Growing with our customers • Further improving fosters pride in our people • Growing our • Expanding our footprint Our Purpose is ‘Redefining packaging for a changing world’. We deliver our Purpose by: our quality standards and where they can give recycling platform through greenfield sites It is our reason for being. It is why we exist. It captures the Developing the right strategies • Driving innovation on their best • Delivering against our and acquisitions value we bring to all our stakeholder groups and the wider We tackle big challenges in their entirety rather than just a multinational basis • Building individual and range of long-term • Building a resilient and organisational capability sustainability targets world. We always keep an eye on the future, as we are one part to find the answers that would otherwise be out Read more on page 24 sustainable business model operating in a changing world. Towns, cities and entire of reach. From design to production and supply to recycling, Read more on page 26 Read more on page 30 Read more on page 36 populations are rapidly transforming. The growth in digital we offer our customers a joined-up solution that is technology is revolutionising the way we shop and live. sustainable for all. We increasingly expect to purchase products tailored Thinking differently Our vision Our business model for us, whenever we want them, wherever we want them, We take a flexible approach to the solutions we create and To be the leading supplier Find out more on page 12 delivered to us in a way that fits our busy lifestyles. operate where our customers need us. Our people thrive on of sustainable packaging solutions. We want more choice and convenience, but with less finding innovative ways to help customers sell more, reduce impact on the world around us. costs, and manage risk and complexity in their supply chains. What we use What we do — What we create Our culture • Our people supported by our values For our business This presents huge opportunities for all of us, but also Innovating together We have a clear set of values that we and values A supplier who requires new ways of thinking. How do we deliver Our experts work closely with customers to understand their expect all of our employees to own and • Financial capital M customers want to an more products, without more vehicles making our cities needs. Together, we find ways to take advantage of today’s • Manufacturing t u work with, and returns live by: h fa to our equity and and other ig c more congested? How do we deliver more to people’s opportunities to powerfully deliver products. s t n u debt providers physical assets I r homes, without filling them with excess packaging? How can • Be caring: We take pride in what we do and i • Stakeholder n For our people companies adapt to changing shopping habits, while running Putting sustainability at the heart we care about our customers, our people g and the world around us. relationships Opportunity, supportive their operations smoothly and efficiently? How can we make We can make, use, collect and recycle cardboard packaging culture, and a share in • Be challenging: We are not afraid to and our brand within 14 days. We are ambitious in using innovation to the future of the Group products available across borders, while ensuring constructively challenge each other and • Intellectual capital tackle some of the world’s most complex sustainability consistency everywhere, every time? ourselves to find a better way forward. • Natural resources For our communities challenges. Our circular business model is a great contributor • Be trusted: We can always be trusted Leadership, Redefining packaging for a changing world to the circular economy. It is a sustainable way of doing to deliver on our promises. and supporting local charities We are different because we see the opportunity for business for DS Smith, our customers and the planet • Be responsive: We seek new ideas and In understanding and are quick to react n n packaging to play a powerful role in the world around us. by protecting resources and reducing waste. ig o s We help our customers respond to changing shopping habits to opportunities. va e ti D with sustainable packaging solutions that our society needs. • Be tenacious: We get things done. on Find out more at dssmith.com/people Our investors Local communities and non- Our suppliers Our stakeholders DS Smith is listed on the governmental organisations We have approximately 40,000 Our strategy is designed to balance the requirements London Stock Exchange. DS Smith engages with those suppliers, ranging from small suppliers of all our stakeholders, so that we are delivering We are owned by a wide range communities it touches, ranging of goods and services, to large paper for all. Our customers of investors in the UK, Europe, from local initiatives such as sponsoring manufacturers from whom we source Our people Our customer base is largely fast moving consumer the US and beyond, including local educational projects, to larger substantial volumes of paper for our We employ over 31,000 people across goods (FMCG) companies who produce goods typically pension funds, insurance initiatives such as our global partnership corrugated board.

Load more