DS Smith, a peer of Smurfit Kappa has released H1 results this morning that benefitted from the company’s increased market share driving organic growth for the group. Revenue for the period increased to £2.081 billion (+25% YoY) while adjusted operating profits were higher YoY to £160.2 million (+31%). The company increased market share in the period, particularly in Germany and CEE which led to volume growth of 2.2%. <p>

Management are happy with the performance achieved in the six month period and are reiterating their medium term targets which call for organic volume growth of GDP +1% (2.2% achieved), return on sales of 7-9% (7.7% achieved), ROACE of between 12-15% (12.1% achieved) and finally for operating cash flow/operating profit > 120% (139% achieved). <p>

In terms of outlook, management note that they are happy with trading in the year to date and they continue to expect further progress over the rest of 2013 helped by recent price increases aimed at recovering input cost hikes that have recently been put in place and will be recovered with the normal lag of several months.
<p><h5>David Holohan</h5>

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