TIDMSMDS
RNS Number : 5076J
Smith (DS) PLC
29 June 2017
29 June 2017
DS Smith Plc - 2016/17 FULL YEAR RESULTS
Building on success
12 months to 30 Change Change
April 2017 (reported) (constant currency)
------------------- --------- ----------- --------------------
Revenue GBP4,781m +18% +6%
Adjusted operating
profit(1) GBP443m +17% +5%
Adjusted profit
before tax(1) GBP391m +18% +6%
Profit before tax GBP264m +31% +16%
Adjusted EPS(1) 32.5p +19% +7%
Dividend per share 15.2p +19% +19%
Return on sales(4) 9.3% 0bps -10bps
ROACE(5) 14.9% -50bps -40bps
------------------- --------- ----------- --------------------
See notes to financial table below
Highlights
-- Strong organic corrugated box volume growth of +3.2%
o Growth in all regions
o Continued excellent growth from pan-European customers
-- Continued investment to expand the business
o Capital invested in line with strategic priorities
o Five acquisitions in the year, totalling GBP85 million,
focused on display packaging and expanding in Iberia, and
Plastics
-- Building leadership positions in growth areas of e-commerce and display
-- Continued delivery against our medium-term targets
o Sustainable financial returns
-- Acquisition of Interstate Resources Inc., a US paper and
packaging business, and associated placing announced today (see
separate announcements)
Miles Roberts, Group Chief Executive, commented:
"We are delighted to report another year of good growth for DS
Smith, delivered through a combination of acquisitions and organic
development. We have expanded our customer offering during the year
both geographically and through our continuous focus on innovative
solutions for our customers and delivered against all our
medium-term financial targets.
This progress has continued into the new financial year. Full
recovery of the recent paper price rises is progressing well and as
expected.
Today's announcement of our intended acquisition of Interstate
Resources Inc. in the US offers a very exciting opportunity for us
to grow and support our customers' needs over a wider geographic
area.
Although economic conditions remain uncertain, our
innovation-led offering, the scale of our operations, and the
momentum in the business gives us confidence in further growth and
sustainable returns in the years ahead."
Sustainable delivery in line with medium-term targets
Medium-term targets Delivery in 2016/17
------------------------------- -------------------
Organic volume growth((2) )
at least GDP((3) )+1% 3.2%
Return on sales((4) ) 8% - 10% 9.3%
ROACE((5) ) 12% - 15% 14.9%
Net Debt / EBITDA((6) ) <=2.0x 1.8x
Operating cash flow/operating
profit((7) ) >= 100% 133%
------------------------------- -------------------
See notes to the financial tables, below
Enquiries
DS Smith Plc +44 (0)20 7756 1800
Hugo Fisher, Group Communications Director
Rachel Stevens, Investor Relations Director
Bell Pottinger
John Sunnucks +44 (0)20 3772 2549
Ben Woodford +44 (0)20 3772 2566
Presentation and dial-in details
A presentation to investors and analysts will be held at 09:00
today at the Lincoln Centre, 18 Lincoln Inn Fields, London WC2A
3ED. Dial-in access for the presentation is available per the
details below. The slides accompanying the presentation will be
available on our website shortly before 09:00.
+44 (0)20 3003 2666 (standard access) or 0808 109 0700 (UK toll
free) Password: DS Smith.
A replay of the event is available for seven days, on +44 (0) 20
8196 1998, PIN 7063164# An audio file and transcript will also be
available on
www.dssmith.com/investors/results-and-presentations.
Notes to the financial tables
(1) Before exceptional items and amortisation
(2) Corrugated box volumes, adjusted for the number of working
days
(3) GDP growth (year-on-year) for the countries in which DS
Smith operates, weighted by our sales by country, for the period
April 2016 - March 2017= 1.8%. Source: Eurostat (16/5/2017)
(4) Operating profit before amortisation and exceptional items
as percentage of revenue. Comparative on a constant currency
basis
(5) Operating profit before amortisation and exceptional items
as a percentage of the average monthly capital employed over the
previous 12 month period. Average capital employed includes
property, plant and equipment, intangible assets (including
goodwill), working capital, provisions, capital debtors/creditors
and assets/liabilities held for sale. Comparative on a constant
currency basis
(6) EBITDA being operating profit before exceptional items,
depreciation and amortisation. Ratio calculated in accordance with
bank covenants
(7) Free cash flow before tax, net interest, growth capital
expenditure, pension payments and exceptional cash flows as a
percentage of operating profit before amortisation and exceptional
items
Note 14 explains the use of non-GAAP performance measures.
Reported results are presented under the Consolidated Income
Statement and reconciliations to adjusted results are presented on
the face of the Consolidated Income Statement, in note 2, note 7,
and note 14.
(8)
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.
Overview
In the financial year 2016/17, DS Smith has once again delivered
on all our financial metrics, with continued strong organic volume
growth. The business has also continued to expand, with five
acquisitions completed in the year for a total of GBP85 million,
both consolidating our presence in the important growth region of
Iberia and expanding our capability in the specialist sector of
display packaging. Integration of our acquisitions is fully on
track and the customer and employee reactions have been extremely
positive. In addition to delivering against all our financial KPIs,
we have also made further improvements to our non-financial
metrics. We have delivered another annual reduction, of 19 per
cent, in our accident frequency rate, our service levels are
further improving, and we have again seen reductions in our
emissions of greenhouse gases per tonne of production.
Corrugated box volumes have grown by 3.2 per cent, on a
like-for-like basis, with good momentum in the second half of the
year. All regions have shown growth, with particularly good growth
from the UK, which has seen more benefit from e-commerce customers,
and from the Central Europe and Italy region. This rate of growth
is ahead of our target of volume growth of GDP +1 per cent, which
equates to 2.8 per cent. The contribution from our pan-European
customers has continued to be very good, with growth well ahead of
the Group average. This has been due to unique innovation and
service, coupled with an expanded geographic coverage. This demand
from pan-European customers is part of a continuing trend that we
are seeing among customers who are seeking to reduce their overall
supply chain costs by sourcing their materials, such as packaging,
from fewer, strategic suppliers. This is why we are investing in
our geographic coverage (such as the new additions in Iberia) and
in specialist packaging such as display packaging, where we are
seeing a similar trend. Our long-standing approach of working with
customers to increase their sales, reduce their costs and manage
their risks, remains as relevant as ever.
For the full-year, revenue growth of 6 per cent was broadly
equally weighted between the contribution from organic growth and
from acquired businesses (net of disposals), which contributed 3
per cent growth each on a constant currency basis. Organic growth
was predominantly driven by corrugated box volume growth, and by
volume growth from other elements of the business, along with
improved sales price/mix. The impact of FX translation boosted
reported revenue by GBP432 million or 11 per cent over the year as
a whole, reflecting the material devaluation of sterling following
the EU referendum in June 2016.
Adjusted operating profit increased by 5 per cent on a constant
currency basis to GBP443 million (17 per cent on a reported basis),
driven by the contribution from volume growth, contributing 9 per
cent growth (GBP38 million), and from the net contribution of
businesses acquired and disposed of, contributing 2 per cent growth
(GBP10 million). Input cost increases were driven by a rise in the
cost of raw materials and other operating costs, which impacted
profit by GBP36 million. The weakening of sterling in the year
resulted in an increase in profits of GBP43 million on
translation.
Adjusted earnings per share increased by 7 per cent on a
constant currency basis to 32.5 pence (19 per cent on a reported
basis) (2015/16: 27.4 pence). This result builds on six years of
consistently strong growth, with the seven year compound annual
growth rate for adjusted EPS being 28 per cent.
The Board considers the dividend to be an important component of
shareholder returns and, as such, has a policy to deliver a
progressive dividend, where dividend cover is between 2.0 and 2.5
times, through the cycle. For the year 2016/17, the Board
recommends a final dividend of 10.6 pence, which together with the
interim dividend of 4.6 pence gives a total dividend for the year
of 15.2 pence per share (2015/16: 12.8 pence per share). This
represents an increase of 19 per cent on the prior year and cover
of 2.1 times in relation to earnings per share (before amortisation
and exceptional items).
Investment in the business
DS Smith remains ambitious to grow both through continued
organic investment and through acquisition. The success of our
pan-European customer strategy demonstrates that there is
significant customer demand for high quality packaging and
consistent service on a multinational basis, and as such we
continue to see this as a major opportunity. All investment in the
business must fulfil our strategic and financial criteria. Our
strategic aim is to become the leader in sustainable packaging
solutions. In order to achieve this we will continue to seek to
extend our reach, as driven by customer demand, and further improve
the quality of our service and products. Scale allows us to invest
in innovation and design, with the benefit shared throughout the
business and with our customers.
We have made further steps this year to expand our scale and
breadth of service in key growth areas, such as display packaging,
following on from the prior year when we substantially increased
our geographic scope.
In the year, we have acquired three specialist businesses
focused on display packaging and point of sale, being Creo
(acquired in June 2016, based in the UK), Deku-Pack (acquired in
September 2016, based in Denmark) and P&I Display (acquired in
November 2016, based in Portugal). This, combined with the opening
of a new state-of-the-art point of sale and display production
facility in Germany, is part of a strategy to offer a pan-European
solution for display packaging, alongside other corrugated
packaging. We expect this to be an area of strong growth as
in-store marketing continues to grow rapidly.
In November 2016 we acquired Gopaca, a well-invested corrugated
packaging business in Portugal, with c. 135 employees. This
acquisition expanded our position in the Iberian peninsula and
complemented the operations we have in this important region. More
recently, in January 2017, we acquired Parish, a plastics
bag-in-box business complementary to our existing operations in the
US.
Integration of acquisitions remains an absolute focus in the
Group and we have an experienced team with well-established
processes to ensure successful integration. Communicating corporate
values and developing a positive corporate culture both within our
existing Group and to newly acquired businesses is vital to
delivering sustainable value and in order to achieve this,
immediately upon completion of an acquisition, we hold an
integration event for the senior management of the acquired
business along with key individuals from DS Smith. Building on the
due diligence undertaken prior to ownership, we then spend an
initial period refining the business plan, taking into account the
input of the local management team. We will also implement OWN IT!,
our employee engagement programme which helps colleagues around the
organisation understand their part in delivering the corporate
strategy.
We have continued to invest in our assets ahead of depreciation,
with net capex of GBP226 million (2015/16: GBP201 million). We are
investing to support our strategic priorities, with over 40 per
cent invested in growth projects, in particular in the UK, south
eastern Europe and Iberia, supporting our customer growth and
commitment to high quality production.
Operating review
Unless otherwise stated, any commentary and comparable analysis
in the operating review is based on constant currency
performance.
UK
Year ended Year ended Change
30 April 30 April
2017 2016
Revenue GBP962m GBP864m 11%
Operating profit* GBP94m GBP85m 11%
Return on sales* 9.8% 9.8% 0bps
*Adjusted to exclude amortisation and exceptional items
The UK has seen strong volume growth in a competitive market
environment, driven by success in the area of e-commerce as well as
a good operating performance by our major sites. The results
include TRM, a corrugated manufacturing site acquired in March
2016, and Creo, the specialist display packaging business, acquired
in June 2016, which together contributed a significant proportion
of the revenue growth.
The increase in profitability in the region has come from both
underlying trading and the benefit of profits from the acquired
businesses. The acquired businesses have performed well with a very
positive reaction from customers. For example, following the
acquisition of Creo, we were able to offer a comprehensive solution
to a large FMCG customer, who were tendering their display
requirements in the second half of calendar 2016. We won a
significant proportion of this work due to the combination of
expertise from Creo and our existing geographic reach.
Western Europe
Year ended Year ended Change- Change-
30 April 30 April reported constant
2017 2016 currency
Revenue GBP1,264m GBP1,044m +21% +7%
Operating profit* GBP104m GBP77m +35% +18%
Return on sales* 8.2% 7.4% +80bps +80 bps
*Adjusted to exclude amortisation and exceptional items
Like-for-like volumes in the region have been good, with Iberia
performing particularly well with increased demand from
pan-European customers and e-commerce customers. France also
performed well, driven by growth from existing FMCG customers,
offsetting continued flat market conditions in Benelux. Revenues
have grown by 7 per cent, principally from good organic growth and
the acquisitions in Iberia.
Adjusted operating profit on a constant currency basis increased
by 18 per cent, again driven by both organic growth and
acquisitions. Return on sales has improved by 80 basis points
following a number of profit improvement initiatives.
DCH and Northern Europe
Year ended Year ended Change-reported Change
30 April 30 April - constant
2017 2016 currency
Revenue GBP989m GBP853m +16% +2%
Operating profit* GBP82m GBP93m (12)% (23)%
Return on sales* 8.3% 10.9% (260)bps (260)bps
*Adjusted to exclude amortisation and exceptional items
Volumes in this region have been positive, with good growth in
Northern Europe offset by continued challenging market conditions
in the DCH (Germany and Switzerland) region.
Constant currency revenues grew by 2 per cent, reflecting both
the benefit of positive volumes from existing customers and the
contribution from the Danish display business acquired in the year,
Deku-Pack.
Constant currency adjusted operating profit decreased by 23 per
cent, despite a modest contribution from the acquired business,
reflecting the higher relative concentration of our paper
manufacturing operations in the region. Consequently, return on
sales fell 260 basis points to 8.3 per cent.
Central Europe and Italy
Year ended Year ended Change Change
30 April 30 April - reported - constant
2016 2016 currency
Revenue GBP1,239m GBP1,022m +21% +7%
Operating profit* GBP125m GBP92m +36% +19%
Return on sales* 10.1% 9.0% +110bps +100bps
* Adjusted to exclude amortisation and exceptional items
Volumes in this region have again been very good, particularly
in Poland and the Baltic region, but also in south eastern Europe
and in Italy. Constant currency revenue growth of 7 per cent
reflects good organic growth and a small incremental contribution
from the Duropack business, acquired near the start of the prior
year, and the other smaller acquisitions in the region (Milas
Ambalaj in Turkey and Cartonpack in Greece).
Adjusted operating profit grew by 19 per cent on a constant
currency basis, with the majority due to organic growth across the
region plus a smaller contribution from the acquired businesses. As
a result of the profit growth, return on sales increased by 100
basis points.
Plastics
Year ended Year ended Change Change
30 April 30 April - reported - constant
2017 2016 currency
Revenue GBP327m GBP283m +16% +3%
Operating profit* GBP38m GBP32m +19% +3%
Return on sales* 11.6% 11.3% +30bps (10)bps
* Adjusted for amortisation and exceptional items
Constant currency revenue increased 3 per cent, reflecting good
organic growth plus a modest contribution from the acquisition of
Parish, a small but highly complementary bag-in-box business in
North America. Adjusted operating profit also grew by 3 per cent on
a constant currency basis, reflecting the benefits of organic
growth, the prior restructuring in Europe and a contribution from
the acquired business.
Delivering on our medium-term targets and key performance
indicators
We have again delivered against all our key performance
indicators over the full-year. As explained above, corrugated box
volumes grew by 3.2 per cent. This exceeded our target of GDP+1 per
cent, with year-on-year GDP growth, weighted by our sales in the
markets in which we operate, estimated at 1.8 per cent (Source:
Eurostat) resulting in a 40 basis point outperformance against the
target of 2.8 per cent. All regions have again recorded volume
growth in the year, with a particularly strong contribution from
the UK and from central Europe and Italy, including businesses
acquired in the prior year. Underlying the regional performances
has been the growth of our pan-European customer base, where we
continue to make significant gains with existing customers as we
increase our market share with them, further demonstrating the
demand for a high quality pan-European supplier of corrugated
packaging, operating on a co-ordinated multinational basis.
Adjusted return on sales has remained at 9.3 per cent, in the
upper half of our target range of 8 to 10 per cent, reflecting the
benefit of good drop-through from incremental revenues into profit,
offset by substantial input cost pressure over the period.
Adjusted return on average capital employed (ROACE) on a
constant currency basis is 14.9 per cent, at the top end of our
medium-term target range of 12 to 15 per cent and significantly
above our cost of capital. This represents the expected small
decline compared to the prior year which reflects the impact of
capital invested in recently acquired businesses; acquisitions
typically move into our target ROACE range over a three-year
period, and, as such, can be dilutive to the overall Group returns
initially. The ongoing high ROACE reflects significant focus on an
efficient capital base, in addition to profitability. We have
maintained our continual focus on tight capital allocation and
management within the business, including working capital, which
has shown further improvement this year, despite the growth of the
business. ROACE is our primary financial measure of success, and is
measured and calculated on a monthly basis.
Net debt has remained broadly unchanged, despite the material
impact of FX on the translation of euro-denominated debt, at
GBP1,092 million (30 April 2016: GBP1,099 million) while net
debt/EBITDA (calculated in accordance with our banking covenant
requirements) has improved to 1.8 times (2015/16: 2.0 times)
reflecting the currency matching of debt to cash flow. This is in
line with our medium-term financial KPI of a ratio of 2.0 times or
below and reflects the acquisitions made as well as ongoing tight
cash management and control throughout the business.
During the year, the Group generated free cash flow of GBP363
million (2015/16: GBP238 million). Cash conversion was 133 per
cent, in line with our target of being at or above 100 per
cent.
DS Smith is committed to providing all employees with a safe and
productive working environment. We are pleased to report a further
substantial improvement in our safety record, with our accident
frequency rate (defined as the number of lost time accidents per
million hours worked) reducing by a further 19 per cent from 3.2 to
2.6, reflecting our ongoing commitment to best practice in health
and safety. This follows the substantial improvement in the prior
years, such that the accident frequency rate is now 45 per cent
lower than in 2013/14. We are pleased to report that 207 sites
achieved our target of zero accidents this year and we continue to
strive for zero accidents for the Group as a whole.
The Group has a challenging target for customer service of 97
per cent on-time, in-full deliveries. In the year we achieved 93
per cent, an improvement versus the prior year, but still below our
target. Management remains dissatisfied with this outcome and is
fully committed to delivering the highest standards of service,
quality and innovation to all our customers and will continue to
set ourselves the demanding standards our customers expect.
One part of the DS Smith strategy is to lead the way in
sustainability. Corrugated packaging is a key part of the
sustainable economy, providing essential protection to products as
they are transported, and at the end of use, it is fully
recyclable. Corrugated packaging is also substantially constructed
from recycled material, as are many of our plastic packaging
products. Our Recycling business works with customers across Europe
to improve their recycling operations and overall environmental
performance. In calendar 2016, compared to calendar 2015, on a
restated basis to reflect acquisitions, our CO(2) equivalent
emissions, relative to production, have reduced by 7.0 per cent.
Our targets on sustainability were first set in 2010, when the DS
Smith business was very substantially smaller than it is now. The
target to deliver a 20 per cent reduction in CO(2) equivalent
emissions (relative to production), has already been achieved, as
has our target on water usage, and we are on track to achieve our
target on waste to landfill. As a result, we are taking the
opportunity to restate our sustainability targets to set ourselves
new challenges, with more detail to follow in our Sustainability
Report.
Outlook
The current year has started well, with progress from 2016/17
continuing into the new financial year. Full recovery of the recent
paper price rises is progressing well and as expected.
Although economic conditions remain uncertain, our
innovation-led offering and the scale of our business means that we
are confident about further growth and sustainable returns in the
years ahead.
Financial review
All numbers within this review are based on continuing
operations before amortisation and exceptional items.
The Group continued to perform strongly in 2016/17, despite the
ongoing challenges of uncertain economic conditions and input cost
headwinds. Growth of the business was again achieved both
organically and through acquisitions. In the year we expanded our
specialist display and point of sale business, our plastics
business, and our geographic reach through the acquisitions of Creo
in the UK; Deku-Pack in Denmark; Gopaca and P&I Display in
Portugal; and Parish in the US. DS Smith continues to have the
widest reach in Europe of any packaging group and is able to offer
a complete pan-European solution to all our customers.
The Group continues to deliver against all the targets the Board
has set for its financial key performance indicators, as well as
all of its medium-term financial measures:
-- Adjusted operating profit before exceptional items and
amortisation up 5 per cent on a constant currency basis at GBP443
million (2015/16: GBP379 million)
-- Like-for-like corrugated box volume growth of 3.2 per cent (2015/16: 3.1 per cent)
-- Adjusted return on sales(1) of 9.3 per cent (2015/16: 9.3 per cent)
-- Adjusted return on average capital employed(1) of 14.9 per cent (2015/16: 15.4 per cent)
-- Net debt/EBITDA of 1.8 times (2015/16: 2.0 times)
-- Average working capital to sales 0.9 per cent (2015/16: 1.6 per cent)
(1) Adjusted for amortisation and exceptional items
Trading results
All numbers within this review are based on continuing
operations before amortisation and exceptional items.
Group revenue increased to GBP4,781 million (2015/16: GBP4,066
million), a growth of 18 per cent on a reported basis, including
the positive currency effects. The euro accounted for 62 per cent
of Group revenue and its strength against sterling during the year
represented the majority of the GBP432 million of currency impact.
On a constant currency basis revenue increased by 6 per cent,
including organic growth of GBP130 million.
Whilst revenue growth is clearly important, it is inevitably
correlated to the price of paper. The more relevant measure to
describe business performance is corrugated box volume growth which
once again was ahead of target of GDP +1 per cent at 3.2 per cent,
delivering meaningful growth.
Adjusted operating profit rose by 17 per cent on a reported
basis to GBP443 million (2015/16: GBP379 million), with currency
having a positive impact of GBP43 million. Growth on a constant
currency basis was 5 per cent. The acquisitions of Creo, Deku-Pack,
Gopaca, P&I Display and Parish during the financial year have
already begun to generate synergies in the short time that they
have been part of the Group and are well on track to deliver their
acquisition business cases. This good result is testament to the
Group's experience in the effective integration of, and support
for, acquired businesses. Whilst the devaluation of sterling in the
year has supported the reported profit growth, growth on a constant
currency basis was achieved despite lower paper prices for most of
the year and volatile fibre input costs. The Group systematically
mitigates against these uncertainties through year-on-year benefits
(on a reported basis) from energy management programmes (c. GBP12
million) and procurement savings (c. GBP35 million).
Depreciation increased by GBP21 million in the year on a
reported basis as a result of previous capital investments and
foreign exchange. Amortisation for the year was GBP65 million
(2015/16: GBP51 million), the increase primarily driven by
intangible assets recognised through business acquisitions during
2015/16 and in 2016/17.
Group margins continue to benefit from both operational leverage
and continuous focus on cost and efficiency, which mitigated
increases in direct material costs, resulting in stable return on
sales of 9.3 per cent (2015/16: 9.3 per cent). In 2015 the return
on sales target range was increased to 8-10 per cent and again
performance has been fully in line with this upgraded target. The
return on average capital employed for the year was 14.9 per cent
(2015/16: 15.4 per cent), which is at the top end of the target set
by the Board of 12-15 per cent. The return on average capital
employed remains significantly above the Group cost of capital.
Given the measure of capital employed is the average balance and
not a single point in time, this current year ratio is affected
fully by acquisitions made in 2015/16 and partially by acquisitions
made in 2016/17.
Exceptional items
Exceptional items before tax and share of results of associates
were GBP62 million (2015/16: GBP79 million).
Restructuring costs of GBP26 million and integration costs of
GBP17 million are the largest elements of exceptional items.
Restructuring and reorganisation costs were incurred primarily in
DCH and Northern Europe (GBP11 million) and in the UK (GBP6
million). Approximately a third of the restructuring charges relate
to initiatives that commenced in the prior year, with the remainder
attributable to new initiatives launched in the current year.
Integration costs relate to the businesses acquired during 2015/16
and 2016/17.
Acquisition costs of GBP7 million were incurred in respect of
professional advisory fees, legal fees and directly attributable
salary costs related to acquisitions completed during the year as
well as to deals which are still in the pipeline.
Interest, tax and earnings per share
Net interest expense before exceptional items was GBP50 million,
up GBP9 million from the prior year. The increase from the prior
year was primarily due to the acquisitions completed during 2015/16
which were funded by increased borrowings.
The employment benefit net finance expense was GBP5 million
(2015/16: GBP6 million).
Adjusted profit before tax (excluding amortisation and
exceptional items was GBP391 million (2015/16: GBP331 million), an
increase of 18 per cent on a reported basis.
The share of the profit of equity accounted investments was GBP3
million (2015/16: GBP1 million loss).
The Group's effective tax rate, excluding amortisation,
exceptional items and associates was 22 per cent (2015/16: 22 per
cent). The exceptional items tax credit was GBP13 million (2015/16:
GBP27 million).
Reported profit after tax, amortisation and exceptional items
was GBP208 million (2015/16: GBP167 million).
Adjusted earnings per share were 32.5 pence (2015/16: 27.4
pence), an increase of 19 per cent on a reported basis and 7 per
cent on a constant currency basis. Basic earnings per share were
22.1 pence (2015/16: 17.7 pence).
Dividend
The proposed final dividend is 10.6 pence (2015/16: 8.8 pence),
giving a total dividend for the year of 15.2 pence (2015/16: 12.8
pence). Dividend cover before amortisation and exceptional items
was 2.1 times in 2016/17 (2015/16: 2.1 times) and dividend growth
is consistent with earnings growth at actual exchange rates.
The final dividend of 10.6 pence per share will be paid on 1
November 2017 to ordinary shareholders on the register at close of
business on 6 October 2017.
Acquisitions and disposals
In line with its strategic aims, the Group has continued to grow
the business in order to meet the requirements of its major
customers. Acquisitions play an important part in expanding the
business model and this year the Group made continued progress with
five acquisitions which both increase our leadership in display
packaging and consolidate our presence in Iberia.
These include the acquisition of two businesses specialising in
point of sale and display products and services for in-store
marketing (Creo in the UK, and Deku-Pack in Denmark), Parish (a US
manufacturer and supplier of bag-in-box systems), Gopaca
(Portuguese integrated box manufacturer) and P&I Display (a
specialist corrugated display business in Portugal) for a total of
GBP71 million (together with loans and borrowings acquired of GBP14
million).
Acquisitions in 2015/16 included the Duropack packaging business
in south eastern Europe for EUR305 million and the corrugated
packaging activities of Lantero for EUR190 million.
Cash flow
Closing net debt of GBP1,092 million (30 April 2016: GBP1,099
million) has decreased year on year with cash flows from operating
activities more than offsetting exchange effects, acquisition and
other investment outflows. Working capital inflows of GBP124
million reflect further initiatives to improve receivables and
payables, which remains an area of opportunity in recently acquired
businesses.
Capital expenditure net of asset disposals increased to GBP226
million in the year (2015/16: GBP201 million). The Group capital
expenditure strategy of balancing asset renewal/replacement and
investment in growth and efficiency has been maintained. Growth and
efficiency together account for 61 per cent of expenditure.
Proceeds from the disposal of property, plant and equipment were
GBP18 million (2015/16: GBP28 million), resulting in profits of
GBP14 million (2015/16: GBP12 million).
Net interest payments of GBP45 million were GBP13 million higher
than the prior year. Interest on the EMTN issued in September 2015
is payable annually, which accounts for the majority of the
difference between cash interest paid and finance costs in the
income statement for the prior year.
Cash costs of exceptional items amounted to GBP66 million,
representing the cash investment in restructuring and
infrastructure. Investment in subsidiary businesses, net of cash
and cash equivalents (but before acquired debt), totalled GBP71
million in the year. No businesses were disposed of in 2016/17.
During the year dividends of GBP121 million, representing the
2015/16 interim dividend and final dividend, were paid.
The GBP695 million cash generated from operations before
exceptional cash items and net acquisitions made in the year has
resulted in a total Group cash inflow for the year of GBP105
million, compared to an outflow of GBP239 million in the prior
year. Loans and borrowings from acquired businesses was GBP14
million. Proceeds from the issue of share capital were GBP13
million in the year, primarily as the Group's first international
Sharesave Plan, which was launched in 2014, matured. Foreign
exchange, fair value and other non-cash movements increased net
debt by GBP97 million.
Statement of financial position
Shareholders' funds have increased to GBP1,355 million at 30
April 2017, an increase of GBP215 million over the reported
position of the prior year. The improvement in shareholders' funds
is principally due to profit attributable to shareholders of GBP208
million (2015/16: GBP167 million), currency translation gains of
GBP71 million and income tax on items which may be reclassified to
profit or loss of GBP35 million. The increases were offset by the
dividend payments of GBP121 million (2015/16: GBP108 million).
The net debt to earnings before interest, tax, depreciation and
amortisation (EBITDA) ratio calculated in accordance with the
Group's debt covenants was 1.8 times at 30 April 2017, down from
2.0 times at the previous year end. The Group is in compliance with
all financial covenants, which specify an EBITDA to net interest
payable ratio of not less than 4.50 times and a maximum ratio of
net debt to EBITDA of 3.25 times.
The covenant calculations exclude from the Income Statement
exceptional items and any interest arising from the defined benefit
pension schemes. At 30 April 2017, the Group had substantial
headroom under its covenants.
Energy costs
Energy costs remained broadly flat year on year despite the
increase in Group size. Energy is a significant cost for the Group
and gas, electricity and diesel costs totalled GBP179 million in
the year (2015/16: GBP178 million). Capital invested in combined
heat and power facilities, currency translation, lower prices and
energy efficiency initiatives have all contributed to the
management of energy costs. The Group continues to manage the risks
associated with its purchases of energy through its Energy
Procurement Group. By hedging energy costs with suppliers and
financial institutions the Group aims to reduce the volatility of
energy costs and provide a degree of certainty over future energy
costs.
Capital structure and treasury management
The Group funds its operations from the following sources of
capital: operating cash flow, borrowings, finance and operating
leases, shareholders' equity and, where appropriate, disposals of
non-core businesses. The Group's objective is to achieve a capital
structure that results in an appropriate cost of capital whilst
providing flexibility in short and medium-term funding so as to
accommodate material investments or acquisitions. The Group also
aims to maintain a strong balance sheet and to provide continuity
of financing by having borrowings with a range of maturities from a
variety of sources, supported by its investment grade credit
rating.
The Group's overall treasury objectives are to ensure that
sufficient funds are available for the Group to carry out its
strategy and to manage financial risks to which the Group is
exposed.
The Group regularly reviews the level of cash and debt
facilities required to fund its activities. At 30 April 2017, the
Group's committed borrowing facilities totalled c. GBP1.8 billion
of which c. GBP700 million were undrawn. The Group's committed
borrowing facilities at 30 April 2017 had a weighted average
maturity of 3.8 years (30 April 2016: 4.7 years). The Group's total
gross borrowings at 30 April 2017 were GBP1,263 million (30 April
2016: GBP1,258 million).
During the year the Group entered into three new committed,
bilateral bank term loan agreements totalling EUR270 million. The
proceeds were used in part to repay $95 million of US private
placement notes and to repay drawings under the Group's syndicated
bank revolving credit facility (RCF). In addition, the Group's
investment grade credit rating from Standard and Poor's has been
maintained (BBB-, Stable) and reflects the Group's commitment to
strong credit metrics and the ongoing financial discipline of
management. This credit rating allows the Group to issue investment
grade bonds in the public debt markets under its EUR2.5 billion
EMTN programme.
Impairment
When applying IAS 36 Impairment of Assets, the Group compares
the carrying amounts of goodwill and intangible assets with the
higher of their net realisable value and their value-in-use to
determine whether impairment exists. The value-in-use is calculated
by discounting the future cash flows expected to be generated by
the assets or group of assets being tested for impairment. In April
2017 tests were undertaken to determine whether there had been any
impairment to the balance sheet carrying values of goodwill and
other intangible assets. The key assumptions behind the
calculations are based on the regional long-term growth rates and a
pre-tax discount rate of 9.5 per cent which is a basic WACC of 8.8
per cent plus a blended country risk premium of 0.7 per cent. No
impairments were identified as a result of the testing.
The net book value of goodwill and other intangibles at 30 April
2017 was GBP1,178 million (30 April 2016: GBP1,089 million).
Pensions
The Group's principal funded defined benefit pension scheme is
in the UK and is closed to future accrual. The Group also operates
various local post-retirement and other employee benefit
arrangements for overseas operations, as well as a small UK
unfunded scheme relating to three former directors and secured
against assets of the UK business.
IAS 19 Employee Benefits (Revised 2011), requires the Group to
make assumptions including, but not limited to, rates of inflation,
discount rates and current and future life expectancies. The use of
different assumptions could have a material effect on the
accounting values of the relevant assets and liabilities, which in
turn could result in a change to the cost of such liabilities as
recognised in the income statement over time. The assumptions
involved are subject to periodic review.
The aggregate gross assets of the schemes at 30 April 2017 were
GBP1,099 million and the gross liabilities at 30 April 2017 were
GBP1,280 million, resulting in the recognition of a gross balance
sheet deficit of GBP181 million (30 April 2016: GBP188 million).
The net deficit was GBP139 million (30 April 2016: GBP145 million)
after taking into account deferred tax assets of GBP42 million (30
April 2016: GBP43 million).
A triennial valuation of the main UK scheme was carried out at
30 April 2016, following which a deficit recovery plan was agreed
with the Trustee Board on 28 April 2017. The Group has agreed to
increase existing cash contributions by 10 per cent per annum
commencing with the current year back-dated to the beginning of the
year. The planned contribution for 2016/17 was, therefore,
increased from GBP16 million to GBP17.6 million. The contribution
for 2017/18 will increase to GBP18.3 million. The recovery plan is
expected to be completed on or around November 2025.
The actual cash contributions paid into the Group pension
schemes were GBP17 million in 2016/17 (2015/16: GBP17 million),
principally comprising GBP16 million in respect of the agreed
contributions to the pension scheme deficit (for the deficit
recovery plan) and are included in cash generated from operations.
The back dated payment of GBP1.6 million will be paid in
2017/18.
The reduction in the gross balance sheet deficit of GBP7 million
is principally attributable to updated demographic assumptions and
the introduction of a new investment strategy to hedge interest
rate and inflation risk exposure.
Consolidated Income Statement
Year ended 30 April 2017
Before Exceptional After Before Exceptional After
exceptional items exceptional exceptional items exceptional
(note (note
items 3) items items 3) items
2017 2017 2017 2016 2016 2016
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Revenue 2 4,781 - 4,781 4,066 - 4,066
Operating costs (4,338) (57) (4,395) (3,687) (92) (3,779)
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Operating profit before
amortisation,
acquisitions and disposals 2 443 (57) 386 379 (92) 287
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Amortisation of intangible
assets;
acquisitions and disposals 3 (65) (5) (70) (51) 14 (37)
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Operating profit 378 (62) 316 328 (78) 250
Finance income 5 1 - 1 1 - 1
Finance costs 5 (51) - (51) (42) (1) (43)
Employment benefit net
finance
expense (5) - (5) (6) - (6)
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Net financing costs (55) - (55) (47) (1) (48)
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Profit after financing
costs 323 (62) 261 281 (79) 202
Share of profit/(loss) of
equity
accounted
investment, net of tax 3 - 3 (1) - (1)
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Profit before income tax 326 (62) 264 280 (79) 201
6,
Income tax (expense)/credit 3 (69) 13 (56) (61) 27 (34)
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Profit for the year 257 (49) 208 219 (52) 167
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Profit/(loss) for the year
attributable to:
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Owners of the parent 258 (49) 209 219 (52) 167
Non-controlling interests (1) - (1) - - -
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Earnings per share
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Earnings per share
Basic 7 22.1p 17.7p
Diluted 7 22.0p 17.5p
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
Adjusted earnings per
share(1)
Basic 7 32.5p 27.4p
Diluted 7 32.3p 27.0p
--------------------------- ---- ------------- ----------- ------------- ------------ ----------- -------------
1 Adjusted to exclude amortisation and exceptional items.
All activities comprise continuing operations.
(a) Subject to approval of shareholders at the Annual General
Meeting to be held on 5 September 2017, the final dividend of 10.6p
will be paid on 1 November 2017 to ordinary shareholders on the
register at the close of business on 6 October 2017.
(b) The financial information presented in this preliminary
announcement is extracted from, and is consistent with, the Group's
audited financial statements for the year ended 30 April 2017. The
financial information set out above does not constitute the
Company's statutory financial statements for the years ended 30
April 2017 or 30 April 2016 but is derived from those financial
statements. Statutory accounts for the year ended 30 April 2016
have been delivered to the Registrar of Companies. Statutory
accounts for the year ended 30 April 2017 will be delivered
following the Company's Annual General Meeting. The Auditor's
report on these accounts was not qualified or modified and did not
contain any statement under Sections 498(2) or (3) of the Companies
Act 2006.
(c) The Group's audited financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the EU. The preliminary announcement has been
agreed with the Company's Auditor for release.
(d) Items are presented as exceptional in the accounts where
they are significant items of financial performance that the
Directors consider should be separately disclosed to assist in the
understanding of the trading and financial results achieved by the
Group
(note 3).
Consolidated Statement of Comprehensive Income
Year ended 30 April 2017
2017 2016
Note GBPm GBPm
Profit for the year 208 167
---------------------------------------------------------------------- ---- ----- -----
Items which will not be reclassified subsequently to profit
or loss
Actuarial (loss)/gain on employee benefits 4 (1) 11
Income tax on items which will not be reclassified subsequently
to profit or loss (3) (5)
Items which may be reclassified subsequently to profit or
loss
Foreign currency translation differences 71 49
Movements in cash flow hedges 9 (2)
Share of other comprehensive income of equity accounted investment 1 -
Income tax on items which may be reclassified subsequently
to profit or loss 35 4
====================================================================== ==== ===== =====
Other comprehensive income for the year, net of tax 112 57
---------------------------------------------------------------------- ---- ----- -----
Total comprehensive income for the year 320 224
---------------------------------------------------------------------- ---- ----- -----
Total comprehensive income attributable to:
---------------------------------------------------------------------- ---- ----- -----
Owners of the parent 321 224
Non-controlling interests (1) -
---------------------------------------------------------------------- ---- ----- -----
Consolidated Statement of Financial Position
At 30 April 2017
2017 2016
GBPm GBPm
-------------------------------------------------- ------- -------
Assets
Non-current assets
Intangible assets 1,178 1,089
Property, plant and equipment 1,866 1,678
Equity accounted investment 9 4
Other investments 3 3
Deferred tax assets 79 58
Other receivables 3 3
Derivative financial instruments 19 17
-------------------------------------------------- ------- -------
Total non-current assets 3,157 2,852
-------------------------------------------------- ------- -------
Current assets
Inventories 406 338
Income tax receivable 10 11
Trade and other receivables 766 696
Cash and cash equivalents 139 134
Derivative financial instruments 13 40
Assets held for sale 2 7
-------------------------------------------------- ------- -------
Total current assets 1,336 1,226
-------------------------------------------------- ------- -------
Total assets 4,493 4,078
-------------------------------------------------- ------- -------
Liabilities
Non-current liabilities
Interest-bearing borrowings (1,144) (1,073)
Employee benefits 4 (181) (188)
Other payables (14) (8)
Provisions (5) (5)
Deferred tax liabilities (133) (141)
Derivative financial instruments (11) (9)
-------------------------------------------------- ------- -------
Total non-current liabilities (1,488) (1,424)
-------------------------------------------------- ------- -------
Current liabilities
Bank overdrafts (16) (19)
Interest-bearing loans and borrowings (119) (185)
Trade and other payables (1,358) (1,118)
Income tax liabilities (120) (109)
Provisions (24) (36)
Derivative financial instruments (13) (47)
-------------------------------------------------- ------- -------
Total current liabilities (1,650) (1,514)
-------------------------------------------------- ------- -------
Total liabilities (3,138) (2,938)
-------------------------------------------------- ------- -------
Net assets 1,355 1,140
-------------------------------------------------- ------- -------
Equity
Issued capital 95 94
Share premium 728 716
Reserves 530 327
-------------------------------------------------- ------- -------
Total equity attributable to owners of the parent 1,353 1,137
Non-controlling interests 2 3
-------------------------------------------------- ------- -------
Total equity 1,355 1,140
-------------------------------------------------- ------- -------
Approved by the Board of Directors of DS Smith Plc on 29 June
2017 and signed on its behalf by
M W Roberts A R T Marsh
Director Director
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated Statement of Changes in Equity
Year ended 30 April 2017
Total
reserves
attributable
to
owners
of
Share Share Hedging Translation Own Retained the Non-controlling Total
capital premium reserve reserve shares earnings parent interests equity
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
At 1 May 2015 94 715 (27) (122) - 359 1,019 (1) 1,018
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Profit for the
year - - - - - 167 167 - 167
Actuarial gain
on employee
benefits - - - - - 11 11 - 11
Foreign currency
translation
differences - - - 49 - - 49 - 49
Cash flow hedges
fair value
changes - - (20) - - - (20) - (20)
Reclassification
from cash flow
hedge reserve
to income
statement - - 18 - - - 18 - 18
Income tax on
other
comprehensive
income - - - 4 - (5) (1) - (1)
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Total comprehensive
(expense)/income - - (2) 53 - 173 224 - 224
----------------------- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Issue of share
capital - 1 - - - - 1 - 1
Employee share
trust - - - - (3) (4) (7) - (7)
Acquisition of
subsidiary with
non-controlling
interests - - - - - - - 4 4
Share-based
payment
expense (net of
tax) - - - - - 8 8 - 8
Dividends paid 8 - - - - - (108) (108) - (108)
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Other changes in equity
in
the year - 1 - - (3) (104) (106) 4 (102)
----------------------- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
At 30 April 2016 94 716 (29) (69) (3) 428 1,137 3 1,140
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Profit for the
year - - - - - 209 209 (1) 208
Actuarial loss
on employee
benefits - - - - - (1) (1) - (1)
Foreign currency
translation
differences - - - 71 - - 71 - 71
Cash flow hedges
fair value
changes - - 1 - - - 1 - 1
Reclassification
from cash flow
hedge reserve
to income
statement - - 8 - - - 8 - 8
Share of other
comprehensive
income of equity
accounted
investment - - - 1 - - 1 - 1
Income tax on
other
comprehensive
income - - (2) 37 - (3) 32 - 32
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Total comprehensive
income/(expense) - - 7 109 - 205 321 (1) 320
----------------------- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Issue of share
capital 1 12 - - - - 13 - 13
Employee share
trust - - - - (1) (5) (6) - (6)
Share-based
payment
expense (net of
tax) - - - - - 9 9 - 9
Dividends paid 8 - - - - - (121) (121) - (121)
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Other changes in equity
in
the year 1 12 - - (1) (117) (105) - (105)
----------------------- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
At 30 April 2017 95 728 (22) 40 (4) 516 1,353 2 1,355
----------------- ---- ------- ------- ------- ----------- ------ -------- ------------ --------------- ------
Consolidated Statement of Cash Flows
Year ended 30 April 2017
2017 2016
Continuing operations Note GBPm GBPm
----------------------------------------------- ---- ----- -----
Operating activities
Cash generated from operations 9 629 444
Interest received 1 1
Interest paid (46) (33)
Tax paid (61) (49)
----------------------------------------------- ---- ----- -----
Cash flows from operating activities 523 363
----------------------------------------------- ---- ----- -----
Investing activities
Acquisition of subsidiary businesses,
net of cash and cash equivalents 12 (71) (313)
Disposal of subsidiary businesses, net
of cash and cash equivalents 12 - 21
Capital expenditure (244) (229)
Proceeds from sale of property, plant
and equipment and intangible assets 18 28
----------------------------------------------- ---- ----- -----
Cash flows used in investing activities (297) (493)
----------------------------------------------- ---- ----- -----
Financing activities
Proceeds from issue of share capital 13 1
Repayment of borrowings (924) (337)
Proceeds from borrowings 785 605
Proceeds from settlement of derivative
financial instruments 31 -
Repayment of finance lease obligations (9) (5)
Dividends paid to Group shareholders 8 (121) (108)
----------------------------------------------- ---- ----- -----
Cash flows (used in)/from financing activities (225) 156
----------------------------------------------- ---- ----- -----
Increase in cash and cash equivalents 1 26
Net cash and cash equivalents at 1 May 115 82
Exchange gains on cash and cash equivalents 7 7
----------------------------------------------- ---- ----- -----
Net cash and cash equivalents at 30 April 123 115
----------------------------------------------- ---- ----- -----
1. Basis of preparation
The consolidated financial statements have been prepared and
approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the EU ('adopted
IFRSs'), and have also applied IFRSs as issued by the International
Accounting Standards Board (IASB).
The consolidated financial statements are prepared on the
historical cost basis with the exception of assets and liabilities
of certain financial instruments, employee benefit plans and
share-based payments that are stated at their fair value.
The consolidated financial statements have been prepared on a
going concern basis.
The preparation of consolidated financial statements requires
management to make judgements, estimates and assumptions that
affect whether and how policies are applied and the reported
amounts of assets and liabilities, income and expenses.
No changes have been made to the Group's accounting policies in
the year ended 30 April 2017 other than the following:
- IFRS 11 Accounting for Acquisitions of Interests in Joint Operations - Amendments to IFRS 11
- IAS 1 Disclosure Initiative - Amendments to IAS 1
- Annual Improvements to IFRSs 2012-2014 Cycle
- Amendments to IAS 27 Equity Method in Separate Financial Statements
- Amendments to IAS 16 and IAS 38 Clarification of Acceptable
Methods of Depreciation and Amortisation
The adoption of these standards, amendments and interpretations
has not had a material effect on the results for the year.
The accounting policies, presentation methods and methods of
computation followed are the same as those detailed in the 2016
Annual Report and Accounts, which is available on the Group's
website (www.dssmith.com/investors/results-and-presentations).
Whilst the financial information included in the preliminary
announcement has been computed in accordance with IFRS, this
announcement does not itself contain sufficient information to
comply with IFRS.
2. Segment reporting
DCH Central
and Europe Total
Western Northern and continuing
Year ended 30 April UK Europe Europe Italy Plastics operations
2017 Note GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- ---- ----- ------- --------- ------- -------- -----------
External revenue 962 1,264 989 1,239 327 4,781
------------------------------- ---- ----- ------- --------- ------- -------- -----------
EBITDA 122 144 112 165 48 591
Depreciation (28) (40) (30) (40) (10) (148)
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Adjusted operating
profit(1) 94 104 82 125 38 443
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Unallocated items:
Amortisation (65)
Exceptional items 3 (62)
-----------
Total operating profit
(continuing operations) 316
-----------
Analysis of total assets
and total liabilities
Segment assets 823 1,062 951 1,170 215 4,221
----- ------- --------- ------- -------- -----------
Unallocated items:
Equity accounted investment
and other investments 12
Derivative financial
instruments 32
Cash and cash equivalents 139
Tax 89
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Total assets 4,493
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Segment liabilities (292) (533) (192) (299) (65) (1,381)
----- ------- --------- ------- -------- -----------
Unallocated items:
Borrowings and accrued
interest (1,299)
Derivative financial
instruments (24)
Tax (253)
Employee benefits (181)
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Total liabilities (3,138)
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Capital expenditure 53 57 38 81 15 244
------------------------------- ---- ----- ------- --------- ------- -------- -----------
1 Adjusted to exclude amortisation and exceptional items.
2. Segment reporting continued
DCH Central
and Europe Total
Western Northern and continuing
Year ended 30 April UK Europe Europe Italy Plastics operations
2016 Note GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- ---- ----- ------- --------- ------- -------- -----------
External revenue 864 1,044 853 1,022 283 4,066
------------------------------- ---- ----- ------- --------- ------- -------- -----------
EBITDA 112 113 118 122 41 506
Depreciation (27) (36) (25) (30) (9) (127)
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Adjusted operating
profit(1) 85 77 93 92 32 379
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Unallocated items:
Amortisation (51)
Exceptional items 3 (78)
-----------
Total operating profit
(continuing operations) 250
-----------
Analysis of total assets
and total liabilities
Segment assets 747 959 899 1,031 175 3,811
----- ------- --------- ------- -------- -----------
Unallocated items:
Equity accounted investment
and other investments 7
Derivative financial
instruments 57
Cash and cash equivalents 134
Tax 69
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Total assets 4,078
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Segment liabilities (227) (438) (170) (256) (58) (1,149)
----- ------- --------- ------- -------- -----------
Unallocated items:
Borrowings and accrued
interest (1,295)
Derivative financial
instruments (56)
Tax (250)
Employee benefits (188)
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Total liabilities (2,938)
------------------------------- ---- ----- ------- --------- ------- -------- -----------
Capital expenditure 53 51 42 72 11 229
------------------------------- ---- ----- ------- --------- ------- -------- -----------
1 Adjusted to exclude amortisation and exceptional items.
Geographical areas
In presenting information by geographical area, external revenue
is based on the geographical location of customers.
External
revenue
------------
2017 2016
Continuing operations GBPm GBPm
---------------------- ----- -----
UK 932 813
France 704 629
Germany 606 533
Italy 512 444
Rest of the World 2,027 1,647
-------------------------- ----- -----
4,781 4,066
---------------------- ----- -----
3. Exceptional items
Items are presented as exceptional in the financial statements
where they are significant items of financial performance that the
Directors consider should be separately disclosed to assist in the
understanding of the trading and financial results of the Group.
Such items include business disposals, restructuring and
optimisation, acquisition related and integration costs, and
impairments.
2017 2016
Continuing operations GBPm GBPm
----------------------------------------------------------------- ----- -----
Acquisition related costs (7) (9)
Gains on acquisitions and disposals 2 23
----------------------------------------------------------------- ----- -----
Acquisitions and disposals (5) 14
Integration costs (17) (12)
Other restructuring costs (26) (50)
Impairment of assets (5) (21)
Other (9) (9)
----------------------------------------------------------------- ----- -----
Total pre-tax exceptional items (recognised in operating profit) (62) (78)
Income tax credit on exceptional items 13 27
Exceptional finance cost - (1)
----------------------------------------------------------------- ----- -----
Total post-tax exceptional items (49) (52)
----------------------------------------------------------------- ----- -----
2016/17
Acquisition costs of GBP7m relate to professional advisory,
legal and consultancy fees and directly attributable internal
salary costs relating to the review and execution of potential
deals, and deals completed during the year, including the
acquisition of Creo, Deku-Pack, Gopaca, P&I Display and
Parish.
Integration costs relate to integration projects underway to
ensure appropriate health and safety standards are operating and to
achieve cost synergies from the acquisitions made in the current
year and previous financial year. They include directly
attributable internal salary costs.
The GBP26m other restructuring costs includes reorganisation and
restructuring in DCH and Northern Europe (GBP11m), the UK (GBP6m),
Western Europe (GBP4m) and Plastics (GBP2m).
Other exceptional items of GBP9m principally relate to
infrastructure optimisation and efficiency projects.
The income tax credit on exceptional items in the year ended 30
April 2017 includes an increase in tax provisions arising from the
acquisition of a business (GBP1m), and the tax effect at the local
applicable tax rate of exceptional items that are subject to tax.
The exceptional items in the year give rise to a net income tax
effect, with the exception of non-deductible deal related advisory
fees in relation to acquisitions and disposals.
2015/16
Acquisition costs consist of professional advisory, legal and
consultancy fees and directly attributable internal salary costs
relating to the review and execution of potential deals, and deals
completed during the year including the acquisition of Duropack and
Lantero.
Gains on acquisitions and disposals comprise the profit on sale
of StePac of GBP9m, with the majority of the remainder relating to
a GBP10m gain on the step acquisition of the Lantero business
(where previously the Group held an associate interest).
Integration costs relate to integration projects underway to
achieve cost synergies from the acquisitions made in the year,
including Duropack and Lantero.
Of the GBP50m other restructuring costs in the year, GBP10m
relates to the closure of the Wansbrough paper mill in the UK,
announced in October 2015 after the completion of a consultation
process, with the majority of the remainder relating to further
reorganisation and restructuring in the UK (GBP10m), DCH and
Northern Europe (GBP17m) and Western Europe (GBP7m).
Impairment of assets is primarily associated with impairment
arising from the announced closure of the Wansbrough paper mill in
the UK (GBP20m).
Other exceptional items principally relate to infrastructure
optimisation and efficiency projects, site remediation costs and
the continuing costs of UK centralisation projects.
The income tax credit on exceptional items in the year ended 30
April 2016 includes an amount received from the previous owners of
an acquired business under the tax indemnity (GBP3m), the reversal
of tax provisions arising from the acquisition of a business
(GBP2m), and the tax effect at the local applicable tax rate of
exceptional items that are subject to tax. The exceptional items in
the period give rise to a net income tax effect, with the exception
of gains or losses on certain disposals which are not subject to
tax under local rules, and non-deductible deal related advisory
fees in relation to acquisitions and disposals.
4. Employee benefits
2017 2016
GBPm GBPm
---------------------------------------------------------- ----- -----
Employee benefit deficit at 1 May (188) (200)
Acquisitions - (9)
Curtailments - 2
Expense recognised in operating profit (5) (6)
Employment benefit net finance expense (excluding Pension
Protection Fund levy) (4) (5)
Employer contributions 17 17
Other payments and contributions 7 7
Actuarial (losses)/gains (1) 11
Currency translation (8) (5)
Reclassification 1 -
---------------------------------------------------------- ----- -----
Employee benefit deficit at 30 April (181) (188)
Deferred tax asset 42 43
---------------------------------------------------------- ----- -----
Net employee benefit deficit at 30 April (139) (145)
---------------------------------------------------------- ----- -----
The table above is the aggregate value of all Group employee
benefit schemes including both overseas and UK schemes. The Group's
principal funded, defined benefit pension scheme, the DS Smith
Group Pension scheme, is in the UK and is now closed to future
accrual.
The Group also operates various local post-retirement
arrangements for overseas operations, pre-retirement benefits and
long-service awards and a small UK unfunded scheme.
5. Finance income and costs
2017 2016
Continuing operations GBPm GBPm
-------------------------------------- ----- -----
Interest income from financial assets (1) (1)
Finance income (1) (1)
-------------------------------------- ----- -----
Interest on borrowings and overdrafts 46 38
Other 5 5
-------------------------------------- ----- -----
Finance costs 51 43
-------------------------------------- ----- -----
6. Income tax expense
2017 2016
Continuing operations GBPm GBPm
----------------------------------------------------------------- ----- -----
Current tax expense
Current year (99) (84)
Adjustment in respect of prior years 9 6
----------------------------------------------------------------- ----- -----
(90) (78)
----------------------------------------------------------------- ----- -----
Deferred tax credit
Origination and reversal of temporary differences 18 23
Reduction in tax rates (3) (4)
Adjustment in respect of prior years 6 (2)
----------------------------------------------------------------- ----- -----
21 17
----------------------------------------------------------------- ----- -----
Total income tax expense before exceptional items (69) (61)
Current and deferred tax relating to exceptional items (note
3) 13 27
----------------------------------------------------------------- ----- -----
Total income tax expense in the income statement from continuing
operations (56) (34)
----------------------------------------------------------------- ----- -----
The tax credit on amortisation was GBP16m (2015/16: GBP12m).
The reconciliation of the actual tax charge to that at the
domestic corporation tax rate is as follows:
2017 2016
GBPm GBPm
-------------------------------------------------------------------- ----- -----
Profit before income tax 264 201
Share of (profit)/loss of equity accounted investment, net
of tax (3) 1
-------------------------------------------------------------------- ----- -----
Profit before tax and share of (profit)/loss of equity accounted
investment, net of tax 261 202
-------------------------------------------------------------------- ----- -----
Income tax at the domestic corporation tax rate of 19.92%
(2015/16: 20.00%) (52) (40)
Effect of additional taxes and tax rates in overseas jurisdictions (30) (15)
Additional items deductible for tax purposes 18 16
Non-deductible expenses (5) (12)
Non-taxable gains 1 3
Release of prior year provisions in relation to acquired businesses 4 11
Reimbursement under tax indemnity in relation to acquired
businesses - 3
Adjustment in respect of prior years 11 4
Effect of change in corporation tax rates (3) (4)
-------------------------------------------------------------------- ----- -----
Income tax expense - total Group (56) (34)
-------------------------------------------------------------------- ----- -----
7. Earnings per share
Basic earnings per share from continuing operations
2017 2016
----------------------------------------------------------- ------- -------
Profit from continuing operations attributable to ordinary GBP167m
shareholders GBP209m
----------------------------------------------------------- ------- -------
Weighted average number of ordinary shares 945m 943m
----------------------------------------------------------- ------- -------
Basic earnings per share 22.1p 17.7p
----------------------------------------------------------- ------- -------
Diluted earnings per share from continuing operations
2017 2016
--------------------------------------------------------------- ------- -------
Profit from continuing operations attributable to ordinary GBP167m
shareholders GBP209m
--------------------------------------------------------------- ------- -------
Weighted average number of ordinary shares 945m 943m
Potentially dilutive shares issuable under share-based payment
arrangements 6m 11m
--------------------------------------------------------------- ------- -------
Weighted average number of ordinary shares (diluted) 951m 954m
--------------------------------------------------------------- ------- -------
Diluted earnings per share 22.0p 17.5p
--------------------------------------------------------------- ------- -------
The number of shares excludes the weighted average number of the
Company's own shares held as treasury shares during the year of 2m
(2015/16: 1m).
Adjusted earnings per share from continuing operations
The Directors believe that the presentation of an adjusted
earnings per share, being the basic earnings per share adjusted for
exceptional items and amortisation of intangible assets, better
explains the underlying performance of the Group. A reconciliation
of basic to adjusted earnings per share is as follows:
2017 2016
---------------------- ---------------------
Basic Basic Diluted
- Diluted - -
pence - pence pence pence
per per per per
GBPm share share GBPm share share
---------------------------------- ---- ------ -------- ---- ------ -------
Basic earnings 209 22.1p 22.0p 167 17.7p 17.5p
Add back amortisation, after tax 49 5.2p 5.1p 39 4.2p 4.1p
Add back exceptional items, after
tax 49 5.2p 5.2p 52 5.5p 5.4p
---------------------------------- ---- ------ -------- ---- ------ -------
Adjusted earnings 307 32.5p 32.3p 258 27.4p 27.0p
---------------------------------- ---- ------ -------- ---- ------ -------
8. Dividends proposed and paid
2017 2016
------------ ------------
Pence Pence
per per
share GBPm share GBPm
---------------------------------- ------ ---- ------ ----
2015/16 interim dividend - paid - - 4.0p 38
2015/16 final dividend - paid - - 8.8p 83
2016/17 interim dividend - paid 4.6 44 - -
2016/17 final dividend - proposed 10.6 100 - -
---------------------------------- ------ ---- ------ ----
2017 2016
GBPm GBPm
--------------------- ----- -----
Paid during the year 121 108
--------------------- ----- -----
The interim dividend in respect of 2016/17 of 4.6 pence per
share (GBP44m) was paid after the year end on 2 May 2017. The
2015/16 interim and final dividends were paid during the 2016/17
financial year. A final dividend in respect of 2016/17 of 10.6
pence per share (GBP100m) has been proposed by the Directors after
the reporting date.
9. Cash generated from operations
2017 2016
Continuing operations GBPm GBPm
--------------------------------------------------- ----- -----
Profit for the year 208 167
Adjustments for:
Pre-tax integration costs and other exceptional
items 57 92
Amortisation of intangible assets and
acquisitions and disposals 70 37
Cash outflow for exceptional items (66) (77)
Depreciation 148 127
Profit on sale of non-current assets(1) (14) (12)
Share of (profit)/loss of equity accounted
investment, net of tax (3) 1
Employment benefit net finance expense 5 6
Share-based payment expense 10 6
Finance income (1) (1)
Finance costs 51 43
Other non-cash items 9 2
Income tax expense 56 34
Change in provisions (6) (18)
Change in employee benefits (19) (19)
--------------------------------------------------- ----- -----
Cash generation before working capital
movement 505 388
--------------------------------------------------- ----- -----
Changes in:
Inventories (49) (25)
Trade and other receivables 10 33
Trade and other payables 163 48
--------------------------------------------------- ----- -----
Working capital movement 124 56
--------------------------------------------------- ----- -----
Cash generated from continuing operations 629 444
--------------------------------------------------- ----- -----
1 Includes gains on the sale of surplus property assets of GBP7m
(2015/16: GBP10m).
10. Net debt
2017 2016
GBPm GBPm
-------------------------------------- ------- -------
Cash and cash equivalents 139 134
Overdrafts (16) (19)
-------------------------------------- ------- -------
Net cash and cash equivalents 123 115
-------------------------------------- ------- -------
Other deposits 40 25
Interest-bearing loans and borrowings
due - after one year (1,133) (1,058)
Interest-bearing loans and borrowings
due - within one year (115) (180)
Finance leases (15) (20)
Derivative financial instruments
- assets 14 25
- liabilities (6) (6)
-------------------------------------- ------- -------
(1,215) (1,214)
-------------------------------------- ------- -------
Net debt (1,092) (1,099)
-------------------------------------- ------- -------
Derivative financial instruments above relate to cross-currency
interest rate swaps used to hedge the Group's borrowings and the
ratio of net debt to EBITDA. The difference between the amounts
shown above and the total derivative financial instrument assets
and liabilities in the Consolidated Statement of Financial Position
relates to derivative financial instruments that hedge forecast
foreign currency transactions and the Group's purchases of
energy.
Other deposits are included as these short-term receivables have
the characteristics of net debt.
11. Reconciliation of net cash flow to movement in net debt
2017 2016
GBPm GBPm
---------------------------------------------- ------- -------
Continuing operations
Operating profit before amortisation
and exceptional items 443 379
Depreciation 148 127
---------------------------------------------- ------- -------
Adjusted EBITDA 591 506
Working capital movement 124 56
Change in provisions (6) (18)
Change in employee benefits (19) (19)
Other 5 (5)
---------------------------------------------- ------- -------
Cash generated from operations before
exceptional cash items 695 520
Capital expenditure (244) (229)
Proceeds from sale of property, plant
and equipment and other investments 18 28
Tax paid (61) (49)
Net interest paid (45) (32)
---------------------------------------------- ------- -------
Free cash flow 363 238
Cash outflow for exceptional items (66) (77)
Dividends paid (121) (108)
Acquisition of subsidiary businesses,
net of cash and cash equivalents (71) (313)
Disposal of subsidiary and equity accounted
businesses, net of cash and cash equivalents - 21
---------------------------------------------- ------- -------
Net cash flow 105 (239)
Proceeds from issue of share capital 13 1
Loans and borrowings acquired (14) (120)
---------------------------------------------- ------- -------
Net movement on debt 104 (358)
Foreign exchange, fair value and other
non-cash movements (97) (90)
---------------------------------------------- ------- -------
Net debt movement - continuing operations 7 (448)
Opening net debt (1,099) (651)
---------------------------------------------- ------- -------
Closing net debt (1,092) (1,099)
---------------------------------------------- ------- -------
12. Acquisitions and disposals
(a) 2016/17 acquisitions and disposals
In the year ended 30 April 2017, the Group made various business
acquisitions, which are not considered material to the Group
individually or in aggregate.
These comprise the acquisition of two businesses specialising in
point of sale and display product and services for in-store
marketing (Creo in the UK, and Deku-Pack in Denmark), Parish (a US
manufacturer and supplier of bag-in-box systems), Gopaca (a
corrugated producer in Portugal) and P&I Display (a specialist
corrugated display business in Portugal) for a total of GBP71m (net
of cash and cash equivalents). Loans and borrowings acquired from
these transactions were GBP14m.
(b) 2015/16 acquisitions and disposals
On 31 May 2015, the Group acquired the Duropack business,
effected by the purchase of equity of the Duropack business for
EUR305m on a cash, debt and, to the extent legally possible and
commercially practicable, pension free basis.
On 31 July 2015, the Group acquired the corrugated activities of
Grupo Lantero, including several operations in which DS Smith
previously held an equity accounted minority. The acquisition was
effected by the purchase of equity, and the total consideration,
including the assumption of debt, was EUR190m.
In addition to the acquisitions detailed above, in the year
ended 30 April 2016, the Group also made various other business
acquisitions and disposals, which are not considered material to
the Group individually or in aggregate. These include the disposal
of StePac for US$31m, the acquisition of the Greek corrugated
packaging business of Cukurova Group with a simultaneous sale of
the Group's minority shareholding in Cukurova Group's Turkish
corrugated paper and packaging entities to the Cukurova Group, the
acquisition of the Milas packaging business of DasaMilas Ambalaj,
and the acquisition of a specialist high-quality packaging
producer, TRM Packaging, in the UK.
For various business combinations completed in the year ended 30
April 2016, certain fair values assigned to the net assets at the
dates of acquisition were provisional and, in accordance with IFRS
3 Business Combinations, the Group has adjusted the fair values
attributable to these acquisitions during the year ended 30 April
2017, resulting in a net increase in goodwill of GBP3m.
(c) Acquisition related costs
The Group incurred acquisition related costs of GBP7m (2015/16:
GBP9m). In 2016/17 these primarily related to the acquisition of
Creo, Deku-Pack, Gopaca, P&I Display and Parish, as well as
other deal costs relating to reviewing potential acquisitions.
These costs have been included in administrative expenses in the
Consolidated Income Statement within exceptional items.
13. Subsequent events
(a) Acquisition of Indevco Management Resources Inc.
On 28 June 2017, the Group entered into a conditional agreement
to acquire an 80% interest in Indevco Management Resources Inc.
(IMRI), the owner of Interstate Resources Inc. (Interstate) for
$920m plus acquired cash and debt of $226m. Interstate is an
integrated packaging and paper producer based on the East Coast of
the USA.
The acquisition will be funded by the issue of $300m of shares
in the Company, a placing on 29 June 2017 of shares in the Company
with estimated proceeds of GBP280m, existing debt facilities, and
new debt facilities of GBP400m agreed by the Company on 28 June
2017.
The acquisition is expected to complete by September 2017;
completion is subject to certain conditions including:
- approval by the Company's shareholders; and
- waiting periods under applicable US competition laws having expired.
An initial accounting and fair value exercise will be conducted
shortly after completion.
The following table summarises the estimated financial position
of IMRI at 31 December 2016 and its profit for the year then
ended:
Carrying
values
at 31
December
2016
GBPm
======================================= ============
Non-current assets 324
Current assets 111
Non-current liabilities (241)
Current liabilities (44)
======================================= ============
Total identifiable net assets acquired 150
======================================= ============
Results
for year
ended
31 December
2016
GBPm
======================================= ============
Revenue 456
Operating costs (410)
======================================= ============
Operating profit 46
Net finance costs (9)
======================================= ============
Profit before tax 37
Income tax expense (10)
======================================= ============
Profit after tax 27
======================================= ============
(b) Other subsequent events
On 31 May 2017, the Group purchased DPF Groupe, a specialist in
multi-material packaging solutions and a corrugated producer in
France. The acquisition of DPF Groupe is not material to the
Group.
There are no further subsequent events after the reporting date
which require disclosure.
14. Non-GAAP performance measures
The Group presents reported and adjusted financial information
in order to provide shareholders with additional information to
further understand the Group's operational performance and
financial position.
Total reported financial information represents the Group's
overall performance and financial position, but can contain
significant unusual or non-operational items or involve
calculations that may obscure understanding of the key trends and
position. Certain key non-GAAP measures are used internally to
evaluate business performance, as a key constituent of the Group's
planning process, as well as comprising targets against which
compensation is determined.
Certain non-GAAP performance measures can be, and are,
reconciled to information presented in the financial statements.
Other financial key performance measures are calculated using
information which is not presented in the financial statements and
is based on, for example, average twelve month balances or average
exchange rates.
The key non-GAAP performance measures used by the Group and
their calculation methods are as follows:
Adjusted operating profit
Adjusted operating profit is operating profit excluding
amortisation and exceptional items. Exceptional items include
business disposal gains and losses, restructuring and optimisation,
acquisition related and integration costs and impairments. A
reconciliation between reported and adjusted operating profit is
set out on the face of the Consolidated Income Statement.
Operating profit before exceptional items
Operating profit before exceptional items is operating profit
before exceptional items.
A reconciliation between operating profit and operating profit
before exceptional items is is set out on the face of the
Consolidated Income Statement.
Other similar profit measures before exceptional items are
quoted, such as profit before income tax and exceptional items, and
are directly derived from the Consolidated Income Statement, from
which they can be directly reconciled.
Return on sales
Return on sales is adjusted operating profit measured as a
percentage of revenue.
Adjusted earnings per share
Adjusted earnings per share is basic earnings per share adjusted
to exclude the post-tax effects of exceptional items and
amortisation. A reconciliation between basic and adjusted earnings
per share is provided in note 7.
Return on average capital employed (ROACE)
ROACE is adjusted operating profit as a percentage of the
average monthly capital employed over the previous 12 month period.
Capital employed is the sum of property, plant and equipment,
goodwill and intangible assets, working capital, capital
debtors/creditors, provisions and assets/liabilities held for
sale.
Average
capital
Capital employed
employed for the
at 30 Currency year ended
April and inter-month 30 April
2017 movements 2017
GBPm GBPm GBPm
----------------- --------- ---------------- -----------
Capital employed 2,796 182 2,978
----------------- --------- ---------------- -----------
EBITDA
Earnings before interest, tax, depreciation and amortisation
(EBITDA) is adjusted operating profit excluding depreciation. A
reconciliation from adjusted operating profit to EBITDA is provided
in note 11.
Net debt/EBITDA
Net debt/EBITDA is the ratio of net debt to EBITDA, calculated
in accordance with the Group's banking covenant requirements. In
calculating the ratio, net debt is stated at average rates as
opposed to closing rates, and EBITDA is adjusted operating profit
before depreciation from the previous 12 month period adjusted for
the full year effect of acquisitions and disposals in the
period.
Currency
Reported and acquisition Adjusted
basis effects basis
GBPm GBPm GBPm
------------------------- -------- ---------------- --------
At 30 April 2017
Net debt 1,092 - 1,092
------------------------- -------- ---------------- --------
Year ended 30 April 2017
EBITDA 591 6 597
------------------------- -------- ---------------- --------
Cash conversion
Cash conversion is free cash flow before tax, net interest,
growth capex, pension payments and exceptional cash flows as a
percentage of adjusted operating profit. Free cash flow is set out
in note 11.
Average working capital to revenue
Average working capital to revenue measures the level of
investment the Group makes in working capital to conduct its
operations. It is measured by comparing the monthly working capital
balances for the previous 12 months as a percentage of revenue over
the same period. Working capital is the sum of inventories, trade
and other receivables, and trade and other payables.
Constant currency
The Group presents commentary on both reported and constant
currency revenue and adjusted operating profit comparatives in
order to explain the impact of exchange rates on the Group's key
income statement captions. Constant currency comparatives
recalculate the prior year revenue and adjusted operating profit as
if they had been generated at the current year exchange rates. The
table below shows the calculation:
Constant
Reported Currency currency
basis effects basis
Year ended 30 April 2016 GBPm GBPm GBPm
-------------------------- -------- -------- ---------
Revenue 4,066 432 4,498
-------------------------- -------- -------- ---------
Adjusted operating profit 379 43 422
-------------------------- -------- -------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR XVLLLDQFLBBB
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June 29, 2017 02:01 ET (06:01 GMT)
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