DS Smith has seen an overall rise of 52% on its profit before tax, announced in its 2013/14 half year results.
The increase soared from 55.8% last year to 85.0% in 2013.
Speaking to FoodProductionDaily, a company spokesman said the figures were due to its SCA Packaging acquisition in June last year.
“In the comparable period last year we only owned SCA for four months and this time we owned it for six months,” he said.
“For the full period and the benefit and synergies that have come from that, it’s clearly a mathematical progression and created value for our shareholder and customers.”
SCA Packaging was the second largest packaging business in Europe and the acquisition presented an opportunity for the Group to achieve its strategic goal of becoming the biggest supplier of recycled packaging for consumer goods in Europe.
In other results, DS Smith saw revenue increase by 25%, adjusted operating profit up 31% and EPS +52%.
The spokesman added market share gains driving organic corrugated packaging had seen a volume growth of +2.2%, led by a good uptake in Germany and CEE (Central and Eastern Europe).
“Corrugated box packaging is a growing market share with our customers and shows we are running the business well and that translates into increased profits,” he said.
“The 2.2% volume growth shows we are ahead of the market. Germany and Central and Eastern Europe have been a particular focus for us because we had less presence there prior to partnering with SCA, that’s why we’re pleased we managed to grow those figures.”
Input cost pressures
Talking about its return on sales progression of 40bps to 7.7% despite input cost pressures, he added the cost of paper is a significant amount in the manufacture of cardboard.
“Paper costs put pressure on manufacturers in corrugated packaging,” he added.
“Our clients understand where their raw materials come from in making their packaging. We work hard with our customers to mitigate these amounts in any way we can.”
In DS Smith’s report statement, Miles Roberts, Group CEO added: “At the same time as gaining share and growing volumes, we have also improved our EBITA margin, despite the headwind due to recent input cost increases which we are recovering as expected, with the usual lag.”