Redefining Packaging For A Changing World PDF

Annual report & accounts 2018
Redefining packaging
for a changing world
Strategic report Governance Financial statements
2 Our business 46 Introduction to 83 Independent Auditor’s report
4 Our global footprint corporate governance 88 Consolidated income statement
12 Chairman’s statement 48 Conversation with the Board 89 Consolidated statement of
13 Our differentiators 50 Nomination Committee comprehensive income
14 In conversation with the report 90 Consolidated statement of financial position
Group Chief Executive 52 Roles and responsibilities 91 Consolidated statement of changes in equity
16 Market review of the Board 92 Consolidated statement of cash flows
18 Our business model 54 Board activities 93 Notes to the consolidated financial statements
20 Our strategy — customers 56 Board of Directors 142 Parent Company statement of financial position
22 Our strategy — people 58 Effectiveness 143 Parent Company statement of changes in equity
26 Our strategy — sustainability 59 Relations with stakeholders 144 Notes to the parent Company financial statements
30 Our strategy — financial 61 Directors’ report 148 Five-year financial summary
31 Operating review 64 Audit Committee report 149 Shareholder information
35 Financial review 68 Remuneration Committee
40 Principal risks and report
viability statement 82 Directors’ responsibilities
statement
Highlights
Adjusted operating Return on sales (%)1 ROACE (%)1 Adjusted earnings per
profit (£m)1 share (p)1
£530m 9.2% 14.1% 35.5p

530
9.3
9.3
15.4
35.5
9.2
14.9
14.6
8.8
14.1
32.5
13.0
443
7.6
27.4
379
24.5
335
21.4
307
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
1. Before adjusting items and amortisation.
The above are non-GAAP performance measures – see note 32 to the financial statements.
Every day we deliver for our
stakeholders by redefining
packaging for a changing world.
As a leading provider of corrugated

packaging, we create sustainable
value by working in balance to
develop our business, our people
and our environment.
Revenue (£m) Operating profit (£m) Reported earnings per Corrugated box
share (p) volume growth (%)
£5,765m £361m 24.9p 5.2%

5,765
361
5.2
24.9
22.1
316
4,781
17.7
4,066
4,035
250
249
16.6
3,820
3.2
15.3
218
3.1
3.1
2.2
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
Annual report & accounts 2018 | dssmith.com 1

DS Smith at a glance
Our business
We provide sustainable packaging solutions that help customers
respond to some of their biggest challenges. Our packaging design
and production is supported by paper making and recycling operations.
Packaging We are a leading international packaging company, sales, but we do so while ensuring lower cost and
delivering leading edge products and the highest managing risk, resulting in a step change in our
quality service across Europe and north America. customers’ performance.
Our product portfolio includes consumer packaging,
We complement our product range with consultancy
displays and promotional packaging, specialist
services on supply chain audit and creative design.
e-commerce packaging, customised protective
Corrugated packaging is fully recyclable and largely
packaging, transit packaging and industrial packaging,
made from recycled material, which means the packaging
providing solutions for each market requirement.
we produce helps our customers achieve their own
We partner with customers to develop innovative sustainability targets.
packaging solutions, ensuring their products achieve
Corrugated packaging is typically produced within c. 200km
more for less. As supply cycle strategists, not only do
of its destination due to the requirements for just-in-time
we help specify packaging solutions to generate more
delivery and the significant effect of transport cost.
Paper We are a leading global manufacturer of sustainable Paper is readily transportable and is traded globally.
corrugated case material (CCM), which is the paper used
We operate eight paper mills in Europe principally
by the packaging industry for conversion into board for
dedicated to the production of recycled CCM and
making corrugated boxes. We also make some specialist
two mills in the US, one of which makes recycled CCM
paper grades such as plasterboard liner, all of which are
and the other virgin kraftliner from sustainable forest
made from recyclable material.
products. We also have two small mills in Europe making
We operate a unique paper sourcing platform that specialist papers.
co-ordinates the decisions around ‘make, buy, sell’ for
the paper grades and the quality required by our
packaging business across the globe.
Recycling We provide integrated recycling and waste We harvest quality paper and cardboard for recycling
management services, ranging from simple recycling from a range of sectors, including retailers,
collections through to full recycling and waste manufacturers, local authorities, print, recycling and
management solutions. waste management companies.
We are Europe’s largest cardboard and paper The recyclate we collect provides the most cost
recycler, collecting c. 5 million tonnes annually efficient raw material for the Group’s paper making
and are one of the leading full recycling and waste processes. We also sell recyclate to third parties globally.
management companies.
Plastics We specialise in plastic packaging that is reusable and Extruded products

recyclable. Our plastics business comprises flexible We design and manufacture extruded products such
packaging and dispensing solutions, extruded and as corrugated plastic sheets and returnable transit
injection moulded products and foam products. We packaging for a variety of industries.
work with many of the world’s leading companies
Injection moulded products
in a diverse range of industries and markets.
We are a leader in Europe in the design and manufacture
Plastic packaging is a specialist market with numerous of plastic beverage crates, pallets, speciality trays and
niche products. bulk containers.
Flexible packaging and dispensing solutions Foam products
Our product brands include Rapak™, a global leader We design and manufacture foam moulded custom
in bag-in-box packaging and filling systems, and designed components and protective packaging.
Worldwide Dispensers’ high quality precision
moulding and customer design solutions.
2
Our vision
Strategic report
To be the leading supplier of sustainable packaging solutions.
Our culture
We have a clear set of values that we expect all of our
c. 22,800 employees to own and live by.
employees
Over 200 manufacturing

sites
34 countries
Over 16 billion boxes Be caring Be challenging Be trusted Be responsive Be tenacious
per year We take pride in We are not afraid We can always We seek We get
what we do and to constructively be trusted new ideas and things done.
we care about challenge each to deliver on understanding
our customers, other and our promises. and are quick
c. 2,900 our people ourselves to to react to
employees and the world find a better opportunities.
around us. way forward.
10
countries Find out more dssmith.com/people
c. 2.9 million tonnes CCM

per annum
How our revenue is spent

c. 800
employees
14 Cost of sales: £2,992m

countries
Labour costs: £1,194m
Other costs: £881m
26 recycling depots 2017/18 revenue Depreciation, amortisation and impairment: £262m
£5,765m
Restructuring and investment: £75m
c. 2,000 Financing: £74m

Tax: £33m
employees
Dividends: £157m
Value retained by shareholders: £97m
13
countries
25 sites

Our global footprint
A leading provider of corrugated packaging supported
by paper and recycling operations.
4
Strategic report
UK Our corrugated packaging business operates in five geographic
segments. Recycling and paper form an integrated part of our
£1,078m c. 5,100
global supply chain operations.
Plastic packaging is a global business with manufacturing sites
2017/18 revenue employees in the US, Europe and Asia Pacific. Its products are sold globally.
United Kingdom
Western Europe
£1,450m c. 6,700
2017/18 revenue employees
Belgium, France, Netherlands, Portugal and Spain
DCH and Northern Europe
£1,083m
2017/18 revenue
c. 5,000
employees
37
countries worldwide
c. 200
packaging manufacturing sites
Denmark, Finland, Germany, Norway, Sweden and Switzerland
Central Europe and Italy

9 c. 28,500
£1,429m c. 8,200 Impact Centres employees

Austria, Bosnia-Herzegovina, Bulgaria, Croatia, Czechia, Estonia,
Greece, Hungary, Italy, Latvia, Lithuania, Macedonia, Poland, Romania,
Serbia, Slovakia, Slovenia and Turkey 33
PackRight Centres
12
paper mills
North America
£379m
2017/18 revenue
c. 1,500
employees
28
different languages
c. 8bn
square metres of corrugated
United States
board per annum
Plastics
£346m c. 2,000
Global consultancy and sourcing capability

We have an independent packaging consultancy business, to
help our customers make their packaging design work better
for their brands by enhancing product utility and reducing
environmental impact. Our consultants offer a global solution
from offices based in the UK, Belgium, the US, India and China.
We also offer global sourcing support through our Total
Marketing Support (TMS) operations for customers who
seek a consistent approach from their packaging, sourced in
regions beyond DS Smith’s current manufacturing footprint.

Acquisition – a platform for growth in the US
On 25 August 2017 we completed the acquisition of Interstate customers will provide significant opportunities for profitable
Resources and in doing so created our North America Packaging growth over the coming years. The acquisition of Interstate
and Paper (NAPP) division. This acquisition followed consistent Resources in August 2017 and the acquisition of Corrugated
customer feedback that they also required the quality, service Container Corporation in June 2018 provides us with 16
and innovative packaging solutions that we provide in Europe packaging sites across the eastern United States, well located
to be provided in the US too. Europe in general, and DS Smith in for our global customers. In addition, we have integrated
particular, has been at the forefront of retail ready packaging Interstate Resources’ two paper mills into our global supply
which has allowed our fast-moving consumer goods customers engine allowing us to optimise our short paper position on a
to both reduce their costs and also to drive sales in an increasingly transatlantic basis, which has already contributed significant
competitive multi-channel retail environment. The US packaging value to our business. We have been delighted with the
market is starting to recognise and adopt a similar approach contribution of NAPP and in May 2018 upgraded our
and we believe the leadership and credibility we have with our synergies for a second time to $35 million.
17 of our top 20 European customers have US operations
Every day we deliver –

no matter where in the
world our customers are
6
Performance packaging opportunity Continuing to grow
Performance packaging is our way of describing our approach to We have grown strongly in Europe and the US, with volume growth
making boxes specified according to the strength of box required, for corrugated boxes 5.2 per cent in 2017/18 and north America
Strategic report
not the materials used to construct it. By focusing on the box ahead of this rate. On 1 June 2018, we made a small additional
strength, we have been successful in reducing the weight of paper acquisition in the US comprising four packaging sites with scope
used, which is beneficial to both us and our customers. In the US, the to grow their output.
weight of corrugated packaging is around 25 per cent heavier than
that used in Europe and around 50 per cent heavier than that used in
the UK. Our US customers have been extremely responsive to this
concept which has been a contributor to the excellent volume.
Average board weight (gsm) Annual box volume growth (%)

United Kingdom 430 2016 3.1
Europe 525 2017 3.2
United States 650 2018 5.2
We are creating scale within

DS Smith to extend our reach
further and faster

Expertise in e-commerce
We are working with some of the world’s biggest brands to We have developed “Made2fit”, an innovation to tackle the
navigate new ways of selling online and being the provider to e-commerce challenge of void space. Creating the right-sized
the ‘ebay generation’ through our new online packaging store pack lowers costs for e-retailers by reducing both operational
– epack. As e-commerce grows we are helping solve the biggest and shipping cost, saving storage space, reducing labour costs
challenges including saving the empty space that is wasted in and order administration and significantly cutting assembly
online shopping deliveries. and packing times. It also reduces product movement, helping
to reduce damage and hence the rate of product returns. The
resulting process helps customers prepare for omni-channel
45% retailing, i.e. packaging that can be used in any retail environment.
Average void space in
e-commerce packaging

to help customers adapt
and unlock new value
8
Expertise in high performance paper Showcasing innovation
We are investing in light-weight paper to make optimum We have a network of Impact Centres and PackRight Centres
packaging. Our recently acquired mill in Romania specialises throughout Europe. Our Impact Centres are designed to provide
Strategic report
in such paper, which will maximise our opportunity to inspiration to customer and retailers, demonstrating what is
deliver performance packaging to customers in the possible with well designed packaging. Our PackRight Centres
eastern Europe region. are where we work in detail in a multi-disciplinary team with
our customers to develop the optimum packaging for them.
6 42
New PackRight Centres PackRight and Impact
opened in 2017/18 Centres throughout Europe
Our investments in innovation are

helping customers solve big challenges,
from performance to waste reduction

in sustainable and responsible ways
Sustainability is at the heart of what we do Sustainable forestry

• 14 day box-to-box cycle – with materials re-used seven times We acquired forestry assets in 2017, located in south east Georgia.
or more – www.dssmith.com/paper/insights/blogs/2017/11/ With a total area of c. 18 thousand acres, they are managed on
box-to-box-in-14-days. a sustainable basis, with at least one tree planted for each one
• Corrugated packaging is a fully recyclable product. felled. Georgia’s forest area has remained stable over the past
• Fibre-based packaging has the highest recycling rate of any 50 years at c. 24 million acres, demonstrating the sustainable
packaging material proving that, unlike plastic alternatives, management in place in the state.
it is both recyclable and recycled in practice.
• 95 per cent of our sites have a recognised chain of custody
certification such as FSC, PEFC or SFI and we are committed c. 18,000 acres
to sourcing only sustainable fibre. sustainably managed forest
10
Strategic report
Inspired by The Power of Less®,
we redefine packaging, fit for
a modern shared world
Solving the coffee cup challenge

With one in five people visiting one of the UK’s c. 20,000 We have put in place solutions to recycle all UK coffee
coffee shops every day, the non-recyclability of paper coffee cups at our mill but we still have some challenges to
cups has regularly been in the headlines. DS Smith has taken overcome, because there needs to be improvements
leadership in order to solve this increasingly unacceptable in the infrastructure to segregate and collect coffee
situation, with raised public awareness of landfill and the cups from consumers all over the UK.
failure to reuse scarce resources. That is why DS Smith is
That is why DS Smith is working with the coffee cup supply
committed to providing a solution for how these cups
chain, policy makers, the recycling industry and coffee lovers
could be recycled.
across the UK to build a sustainable, long-term recycling
Following recent trials, we have announced that our ground solution. We can then potentially extend the model further.
breaking UK paper mill has the capacity to recycle up to 2.5
billion coffee cups – the amount used in the UK every year.

Chairman’s statement
Stepping up
On behalf of the Board, I would like to welcome colleagues who have
joined in the year and to thank everyone throughout DS Smith for
their commitment.
for DS Smith shareholders. The acquisition will be financed through

a combination of a rights issue and new debt. All shareholders will
receive details setting out how they can participate in the rights issue,
in separate documentation.
Dividend
For the year 2017/18, the Board recommends a final dividend
of 9.8 pence, which reflects the growth in the business and is in
line with our policy of dividend cover of 2.0 to 2.5 times earnings.
The dividend will be payable to all shareholders on the record date,
including in respect of shares to be issued in the rights issue.
Delivering sustainable value

Since May 2010, under current leadership, the business has
consistently delivered growth and returns. Total shareholder
Gareth Davis – Chairman return, which is a measure of growth in the share price combined
with the benefit of reinvested dividends, has grown 628 per cent,
considerably out-stripping the FTSE 100 at 82 per cent and the
Performance FTSE 250 at 143 per cent over the same period.
2017/18 has been a year of strong growth for DS Smith, both In December 2017 DS Smith Plc moved up into the FTSE 100. While
organically and through acquisition. this is a reflection of our growth rather than an aim in itself, I am very
proud of the business, which has grown in market capitalisation more
The organic box volume growth of over 5 per cent is a material step
than six times over in the period since I became Chairman. The credit
up from prior years and demonstrates how we are succeeding with
belongs to each and every person who works for DS Smith, from
a compelling offering for multinational customers. We are gaining
the leadership team to the factory floor, all of whom have played
market share along with taking advantage of the more positive
their part.
economic environment in Europe. That growth in market share is
in part due to the increased importance of display packaging and Total shareholder return
e-commerce packaging – areas in which we have consistently
+628%
DS Smith
invested in and have a leadership position. FTSE 100
FTSE 250
This year saw our first move into the corrugated packaging market 800
700
in the US, by an acquisition in August 2017, and I am delighted by the
600
progress that has been made. It was a bold move, but one that we 500
knew to be backed up by demand from customers in Europe, who 400
also operate in the US and want the opportunity to buy our type of 300
packaging there too. The reaction from local customers in the US 200
100
has been excellent also, with growth higher in the US than we have 0
seen in Europe. Our new employees in the US and our established 10 11 12 13 14 15 16 17 18
integration team have all done a wonderful job in making a success Outlook
of the acquisition and the progress to date is an excellent platform
On behalf of the Board, I would like to welcome colleagues
for the coming year.
who have joined in the year and to thank everyone throughout
When we invest, financial discipline is paramount and I am pleased DS Smith for their commitment. That hard work has delivered
to report that we have once again achieved all our financial targets, these excellent results, with more customers than ever looking
with our return on average capital employed at around the top of to DS Smith for their sustainable packaging solutions. The Board
our range, at 14.1 per cent. has great confidence in the future.
Acquisition of Europac
On 4 June 2018, we announced the proposed acquisition of Papeles y
Cartones de Europa, S.A., known as Europac, a leading western
European integrated packaging business. The acquisition has a
highly compelling strategic rationale and we expect that it will create Gareth Davis
significant value for customers and consistent and attractive returns Chairman
12
Our differentiators
Strategic report
We are dedicated to creating packaging that helps our customers sell more, that reduces
their costs and that manages their business risks, while providing great service, quality
and innovation.
We are able to do so because of the scale

We help our customers achieve more
of our business and our investment in
innovation and process improvement.
More sales
Our scale Increasing range, availability, activation, promotional
Enables us to serve large customers efficiently success and more
on a multinational basis
• Our corrugated packaging presence throughout
Europe and in the US enables us to serve customers
locally and with short lead-times. Lower cost
Driving out waste, cost and carbon in packing,
• Long-standing relationships with a wide range
warehousing and distribution
of multinational fast-moving consumer goods
(FMCG) customers.
Investment in innovation
Adds value to our customers Managed risk
• Forward thinking approach. Security, future proofing, sustainable practice and
• Network of Impact Centres and PackRight Centres. regulatory compliance
• Intellectual property and know-how.
• Collaboration with leading universities.
Total value approach

Aligns us with our customers who seek to
maximise their efficiency
• Sell more, reduce costs, manage risk. ‘Performance
packaging’ approach. er Re
cy
• Supply chain and market insight consultancy services. om
st
cli
Cu
Our people
ng
We employ dedicated, skilled and motivated people,
and invest in ensuring that they understand how to play
their part in the success of the business. We work hard Supply Cycle
to integrate new colleagues, including those who join Thinking
from businesses acquired by DS Smith, as quickly Box-to-box recycling
and smoothly as possible. in 14 days
Our strong corporate values underpin our culture and
behaviours and are central to how wider value is created
Pa
for our business and stakeholders.

ck
ng
ag
Sustainability is at the heart of our business

er
p
i
We have long recognised the importance of the Pa

circular economy.
Our packaging, paper and recycling operations are
closely integrated. Cardboard boxes are made, used,
collected, recycled, pulped, pressed and made back
into cardboard boxes again, from start to finish in as
little as 14 days.

In conversation with the Group Chief Executive
Redefining packaging
for tomorrow
At DS Smith, we are ambitious and excited about the future.
How would you sum up the 2018

financial year?
The past year has been a success both with regard to
the existing business in Europe and the newly acquired
business in the US. In Europe, we have seen our sales of
boxes increase in volume by over 5 per cent year-on-year,
which compares to an annual growth rate of c. 3 per
cent for the prior three years. That tells me that we are
getting things right for customers. We acquired our first
US corrugated packaging business in August 2017 and
I am delighted with the progress. Growth there has been
higher than in Europe and the integration has gone
smoothly too.
This success has not happened by accident. Our people
are stepping up to the challenge that being a larger group
presents. In addition, our business model is designed to
be sustainable, both from an environmental perspective
Miles Roberts – Group Chief Executive as well as a business perspective, which is important for
all our stakeholders.
Your corporate purpose is to “redefine Will corrugated packaging become

packaging for a changing world” – more popular as consumers become
what does that mean? increasingly aware of sustainability
issues?
New technology and the massive growth in e-commerce
are fundamentally changing the way we buy and use We recognise that packaging is an issue for consumers.
goods and services. This represents a huge opportunity Corrugated packaging has the advantage of being fully
for brands and organisations to deliver in new ways. But and readily recyclable and largely made from recycled
the opportunity also brings challenges. From complexity material, so we are working with customers to maximise
and cost in supply chains, to urban congestion and waste, the opportunities to use this versatile material. That
there is a need for a new approach to packaging. said, the issue of packaging is complex, particularly
At DS Smith, we are ambitious and excited about when you consider the benefit of packaging in reducing
the future. We are strategists that bring together waste in the supply chain. Multi-use plastic packaging,
an understanding of how to meet the massive for example, can be very environmentally sustainable.
opportunities for e-commerce, with the knowledge of As one of the largest paper recyclers in the UK, we
how to deliver a more sustainable solution that meets have invested in research into the recycling of single-
changing societal needs. We are redefining packaging use coffee cups, which is a major issue at present.
for a changing world. A decade of unprecedented Our experts found that coffee cups can be recycled
growth in the industry means we do not just tell but in the normal waste stream, although there remain
show customers how to respond to change with speed barriers to achieving this at present, for example around
and scale. Our integrated approach enables us to unlock food contamination and the collection and recycling
360 degree solutions that would otherwise be out of infrastructure. We are working with others in the
reach. Sustainability is at the heart of our business and industry more broadly to see how these barriers
we believe we can help our customers to grow, but not can be reduced and so play our part in reducing the
at the cost of the environment. number of single-use coffee cups that go to landfill.
14
Our strategy
To be the leader in
Strategic report
sustainable packaging
solutions
Many of your major customers, such as Our strategy is balanced across our four
FMCG businesses, are under pressure key stakeholders of employees, customers,
in mature markets such as Europe and
the US. How are you able to succeed in communities and investors. It is:
this environment?
To delight our customers
Major customers are under pressure, so they need a
supplier partner who can create real value for them. • Delivering on all our commitments
We can do so by using our expertise and innovation to • Further improving our quality standards
help them reduce their overall costs, while also aiming • Driving innovation on a multinational basis
to drive their sales. We have the international reach to Read more on page 20
do so on a multinational basis and of course our product
is inherently sustainable. Therefore customers are
working more with big suppliers, like us, who can To realise the potential of our people
offer a high quality packaging solution for them.
• Ensure the safety of all
How are you planning to grow in • Creating an environment that fosters pride in our people and where
the US? they can give their best
• Building individual and organisational capability
We have something different to bring to our US
Read more on page 22
customers, in particular retail-ready packaging.
This type of packaging is well developed in Europe
and less so in the US, so we have an advantage versus
To lead the way in sustainability
competitors, along with our technology around making
corrugated packaging from light-weight paper. We • Building sustainability into our decisions
therefore have a strong commercial position. That has • Growing our recycling platform
been seen in the excellent customer response in the
Read more on page 26
US, which exceeded our initial expectations.
In addition, we expect to expand further in the US. The
acquisition of four further packaging sites in June 2018, To double our size and profitability
will help us to build our network further.
• Winning market share
• Growing with our customers
What has been your highlight
• Expanding our footprint through acquisitions and greenfield sites
of the year?
• Building a resilient and sustainable business model
Gaining entry to the FTSE 100 was a milestone, but Read more on page 30
a consequence of success rather than an aim in itself.
We now expect more scrutiny, so it is up to us to
demonstrate leadership.
In January 2018 we held a senior managers conference
at which we committed to stepping up and taking the
business forward to the next level. It was a pleasure to
see the energy of our senior leaders and their enthusiasm
to continue to build on the success of the past year.
That commitment among senior management is also
reflected through the organisation with our employee
charter, which we agreed with our union groups, to
establish ways of working throughout the organisation.
Watch the full year results interview:

www.dssmith.com/investors

Market review
Bringing solutions to challenges from

a changing consumer landscape
The consumer landscape is changing – more e-commerce means more packaging
in the home. Changing shopper habits mean more frequent and smaller shopping trips.
Last-minute decision making means a greater emphasis on in-store product awareness.
Rising raw material costs mean food companies are constantly looking for greater
efficiencies. Sustainability matters – consumers want packaging that does not
litter the planet.
Market drivers The impact
Retail and e-retail • Packaging becomes designed for e-commerce fulfilment at the
• High growth in e-commerce. outset, including being suitable for all elements of the supply
• Traditional retail in a state of flux, with large format stores chain and ultimately presentation to consumers as the
in decline and discount and convenience stores rising. packaging that is delivered to the home.
• Packaging has to be adaptable to the needs of different
store formats.
• An increased importance of product presentation in the retail
environment, which requires higher quality packaging.
Brands • Packaging can help to differentiate brands, large and small.

• Large brands, while clearly still significant, are being • Packaging can offer personalisation.
challenged by micro-brands, for example those sold direct to • Packaging can provide links to information about the product,
customers on subscription. both enhancing the product and providing details about
• Consumers seek a more personalised or customised product. its provenance.
Social pressure for zero packaging waste • Packaging is required that is better designed to minimise
• Packaging is still widely perceived as a problem, including excess void space and deliver value across the whole supply chain.
packaging, voids in e-commerce, packaging that ends up as litter • Recycled and recyclable packaging will be in greater demand,
and unrecyclable materials that are badged as recyclable, for so long as this can be demonstrated and communicated.
example disposable coffee cups.
Alternative materials • Innovation is required to produce paper with higher

• Material costs are increasing. Without innovation, this drives up performance (strength) without a significant increase in cost.
the cost of packaging.
Evolution of customer base • Packaging businesses need to be able to offer innovative

• Customers are increasingly considering new routes to market, solutions to customers for e-commerce, in particular
particularly in e-commerce where they may now need to omni-channel retailing.
participate in packaging products directly. • Packaging works within complex supply chains to drive value.
• Consolidation among bricks-and-mortar retailers, accelerating
the process towards omni-channel retailing.
Changing demographics • Packaging needs to be more visually appealing and facilitate

• Consumers are more interested in making their brand choice the primary product being chosen in store.
inside a store, rather than driven by advertising viewed at home, • Point of sale packaging, i.e. temporary displays commonly used
online or through traditional media. for promotional products which provide flexibility for retailers.
Legislation • Packaging businesses will be required to take a more

• Potential legislation in a number of areas, e.g. EU legislation on sophisticated approach on a pan-European basis, for
the “circular economy” and specific rules around contamination fibre collection and recycling.
of fibre.
Technology • Packaging businesses will be required to invest more in

• Potential developments in paper. technology around fibre use in the recovery, pulping and
paper making fields.
16
Strategic report
Corrugated packaging market by country
Our market environment
The European corrugated packaging market is
fragmented, with the top five corrugated packaging
producers estimated to comprise c. 40 per cent of the Europe North America
total European market. 51bsm 42bsm
The US corrugated packaging market, by way of

contrast, is substantially consolidated with the top five
corrugated packaging producers comprising c. 65 per
Germany 20% US 85%
cent of the US market. Italy 13% Canada 7%
France 11% Mexico 8%
Plastic packaging is a global business with numerous Spain 10%
niche products. UK 9%
Poland 8%
Turkey 8%
Other 21%
Source: ICAA 2017 Source: ICAA 2017

The DS Smith response
Corrugated packaging market by customer type
DS Smith is well positioned, as a leader in corrugated
packaging, to respond to these market trends. We are
responding in four ways.
Focus on multinational capability
We continue to build our coverage across Europe and Europe United States
also in the US, in order to serve customers who require
a multi-national solution for their packaging.
Focus on e-commerce packaging and point of sale
We are further building our expertise in this area
FMCG and agriculture 43% FMCG and agriculture 43%
with recruitment and allocation of resource within Industrial 39% Industrial 45%
the business and investment in innovation to Other consumer 18% Other consumer 12%
support major customers. Source: FEFCO 2016 Source: FBA 2017
Focus on innovation, research and development
We are continuing our investment in Impact Centres Corrugated case material (CCM) manufacturing by type
and PackRight Centres with six opened in 2017/18
and more planned for 2018/19. We also have a
collaboration with a research institute in Sweden,
associated with Stockholm University, to lead the
Europe United States
industry in paper science.
29mt 29mt
Implementation of our performance
packaging programme
We are continuing our focus on optimal use of fibre in
packaging, both within our packaging business and in
Recycled CCM 24 Recycled CCM 11
collaboration with our paper manufacturing operations. Kraftliner 5 Kraftliner 18
Source: CEPI Source: FBA 2017: production for

domestic consumption
Notes: bsm – billion square metres
mt – million tonnes
CCM – corrugated case material

Our business model
To be the leading supplier of

sustainable packaging solutions
What we use What we do – supported by our values
Human capital – our people and values Insight

We employ approximately 28,500 people. We seek We work with many of the
to develop our people through training and providing leading FMCG brand owners,
opportunity for new challenges. We have an employee major retailers and leading
engagement programme, OWN IT!, designed to align industrial companies. This Be caring
employees with the overall aims of the business. breadth of interaction with
We maintain a close, constructive relationship with businesses on a multinational
our European Works Council and have in place an basis, combined with our own
Employee Charter. expertise, means that we have
considerable knowledge in
We have a set of values that all employees are expected
to follow in their interactions with other employees, how changing consumer and
retail trends affect the role and
customers, suppliers and their communities. We work to
use of packaging. We showcase
promote the application of these values through employee
our insight in our network of
communications and celebrating our employees’ success
in demonstrating our values. nine Impact Centres, designed Insight
to inspire our customers and
Financial capital help them understand how
We are funded by a combination of shareholder equity, debt packaging can help them sell
raised and cash flow generated by our operations, which is more, reduce their costs and
reinvested in the business. Our approach to capital allocation manage their risk.
is driven by returns on capital, with all investments expected
to achieve our target range in the medium-term. We target a
net debt/EBITDA ratio of less than or equal to 2.0 and are
committed to our investment grade credit rating.
Manufacturing and other physical assets Paper

We have an extensive network of packaging manufacturing
sites, paper mills, forestry assets, recycling depots, Impact
Centres, PackRight Centres and offices throughout Europe, Be tenacious
the US and the rest of the world. DS Smith also utilises the
infrastructure of the countries in which we operate, such
as the transportation networks, energy providers and Innovation
telecommunications. Innovation in packaging
design can help customers sell
Stakeholder relationships and our brand more (such as SalesFront®),
Our stakeholders include customers, communities, capital reduce costs (such as Trayzer®)
providers, suppliers, governments and regulators. Recycling
or manage their risks (such as
The DS Smith brand is consistent across our business interlocking, non-tip systems).
and seeks to bring together the different elements of the Our designers work with
organisation under a consistent vision, purpose and set customers to create innovative
of values. packaging solutions to meet
their requirements. Best
Intellectual capital practice is shared and
Innovation
As a leader in this industry we have substantial business designers are coordinated
know-how which is used throughout the Group. We own across all our regions.
patents, for example for certain packaging design processes,
We are also innovators in the
in both corrugated and particularly plastic packaging.
use of light-weight corrugated
Natural resources board, in a programme called
“PACE”. Our proprietary
We operate a highly sustainable model through the recycling
technology to test the
of natural material, in particular wood fibre. We collect used
strength of corrugated board Be responsive
fibre and use it to make paper and then convert that paper into
as it is manufactured means
corrugated board, which is then made into packaging. We also
we can use the optimum paper
source pulp from newly harvested trees, including from our
weight required. In addition,
own forestry assets to provide pulp for our kraft mill; all pulp is
we are developing innovative
sourced from certified sustainable sources. The paper-making
machine solutions that build
process requires substantial amounts of water, so sites are
boxes at high speeds, which
typically situated close to a natural water source and we use
can significantly reduce costs
and treat water responsibly.
and improve efficiency
for customers.
18
Strategic report
What we create
Manufacturing For our business

We manufacture corrugated A supplier partner who helps our customers to sell
packaging, plastic packaging more products, focused on efficiency across our
and paper to a high standard,
customers’ supply chains and who helps them
expertly designed for its
purpose. For corrugated achieve their own sustainability targets.
Be challenging
packaging, we manufacture A supplier who customers want to work with
corrugated board, print, cut
5.2 per cent volume growth in corrugated box.
and glue the boxes, which are
then shipped flat on pallets, Returns to our equity and debt providers
ready for assembly and filling Our total shareholder return has grown 628 per cent
at our customers’ factories.
from 1 May 2010 to 30 April 2018. Our listed debt is
Plastic packaging is
manufactured by us and investment grade credit rated and we are
committed to maintaining that rating.
Manufacturing supplied to our customers
ready for filling.
For our people
Our paper mills manufacture
Opportunity
corrugated case material
(CCM) from old corrugated We encourage the identification of development
cases (OCC) and from pulp. needs and opportunities to build capability and
develop strong talent pipelines at all levels in
the organisation.
Supportive culture
We have engaged workforce – our employee
engagement statistic improved from 61 per cent
to 69 per cent.
Be trusted Employees share in the future of the Group
Corrugated Our international Sharesave scheme covers nearly
and plastic packaging all employees.
For our communities

Sustainable forestry – all forestry assets
certified sustainable.
Leadership in solving sustainability problems
e.g. coffee cups.
Supporting local charities through the DS Smith
Charitable Foundation. £273,000 was donated
Design Design in 2017/18.
Using our network of 33
PackRight Centres, we design
packaging that fulfils our
customers’ requirements at
all stages of their supply chain,
including the manufacturing
process, logistics and
marketing. We work
collaboratively and on a We show above some of the non-financial
multi-disciplinary basis with
impacts of the business. Please refer to the
our customers to come up with
the optimum solution for them. table on page 63 to see how we comply
with the new Non Financial Reporting
Directive requirements.

Our strategy
To delight our customers

We aim to delight our customers by offering great service, quality and innovation.
We do this by delivering on all our commitments, further improving our quality
standards and driving innovation, on a multinational basis.
We do this by Our packaging customer profile

• Delivering on all our commitments Fast-moving consumer goods (FMCG), food and e-commerce
• Further improving our quality standards customers comprise over two thirds of our packaging business.
• Driving innovation, on a multinational basis These customers produce products commonly sold in
supermarkets, convenience stores, other retail outlets, or over
Our performance the internet. Ten per cent of our business is related to other
In 2017/18 we delivered: consumer-related products, for example consumer electronics,
• Strong organic volume growth in box volumes automotive or pharmaceuticals. The remainder of our business
• Expanded our packaging capability in the US – enhancing services other industrial customers trading in products such as
our potential offering to multinational customers bulk chemicals, where packaging may help transport products
safely and securely in large quantities.
• Six new PackRight Centres
• Continued roll-out of performance packaging – Long-standing partnerships with multinational
customer acceptance high customers drives value for both parties
In 2018/19 we will: • Volume growth among our multinational customers has been a
consistent driver of Group growth, as large customers look for a
• Prioritise investment and innovation in growth areas,
co-ordinated approach to their packaging in Europe and beyond.
in particular e-commerce and display packaging
• 17 of our top 20 European customers also operate in the US.
• Continue to grow partnerships with our key customers
We think that, over time, the opportunity to co-ordinate the
in the US
procurement of packaging in both Europe and the US will be
• Open further Impact Centres and PackRight Centres,
attractive to customers.
in Europe and the US
• Long-standing supply partnerships drive value for both parties,
• Place additional focus on improving service levels
as we can work together with customers to reduce their overall
• Renew sales and our marketing approach to deliver supply chain costs with innovative, efficient packaging.
a differentiated customer experience by investing
• We have worked with many of our customers for over a decade
in training and best-in-class materials
and some for many decades.
Our KPIs • Our emphasis on FMCG customers means that the demand for
our product is relatively consistent, as consumption of staple
On-time, in-full delivery
products tends to be less variable than discretionary items.
Definition
• FMCG customers also tend to change or promote their products
The proportion of our orders that are delivered on-time and
frequently, which gives us the opportunity to introduce new
in-full, across all our businesses.
innovation to our packaging and increase the value we add.
Target • We have a high quality diverse customer base which is not
97%
reliant on any single customer. Our largest packaging customer
represents c. 2 per cent of Group revenue and our top-20
packaging customers comprise c. 13 per cent of Group revenue.
Why this is a KPI

Packaging is an essential part of an efficient supply chain.
Therefore, delivery of a order on-time and in-full is a very
important part of being a trusted partner to our customers.
2018 performance
This year, we have continued to strive for a higher service
standard. The on-time in-full rate achieved remains short of
our target and it remains a key area of focus. At the same time,
we have seen other areas of success, for example the defect
rate (measured in defects-parts-per million) has dropped in
our packaging business by 28 per cent.
2016 92%
2017 93%
2018 93%
20
Strategic report
Our corrugated packaging customers by volume Our recycling customers
We provide recycling solutions to a range of retailers and other
businesses. We are proud to serve some of Europe’s best known
organisations such as Aldi, Tesco, Primark, Auchan and IKEA as
well as thousands of smaller scale companies across multiple
sectors. Go to our case studies website (www.dssmith.com/
FMCG and food: 68% recycling/insights/case-studies) to discover how our solutions
Other consumer are benefiting our customers, large and small.
related products: 10%
Other industrial: 22%
Our plastic packaging customers
Our three principal types of plastic packaging are used by a range
of customers in our key market sectors:
flexible rigid foam
Market packaging packaging products
Beverage
Pharmaceutical
FMCG and food ther consumer
O Other industrial
Automotive
related products
Fresh produce
68% 10% 22% Construction
Retail
• Grocery • Pharmaceutical • Machinery
• Home and • Electronics • Chemicals
personal care • Automotive • Construction
• Beverages
• Tobacco
• Agriculture
• E-commerce
Source: DS Smith analysis of 2018 corrugated box sales by volume

Our strategy
To realise the potential of our people

Engaging and energising our people is a key building block in our vision. Our values
are at our core, serving as the common foundation for over 28,500 people across
geographies and businesses, including newly acquired companies.
We do this by Ensuring the safety of all

• Ensuring the safety of all First and foremost, we live that commitment by promoting
• Creating an environment that fosters pride in our people a safety culture throughout the Group; putting safety first on
and where they can give their best every meeting agenda and including it as an essential part of the
induction of all new employees, contractors and agency workers
• Building individual and organisational capabilities
and when anyone visits one of our sites.
Our performance Our standards and expectations for safety go beyond the
In 2017/18 we delivered: legal requirements of the countries in which we operate and
• 239 sites without a lost time accident are modelled to drive world-class safety performance and to
• Accident frequency rate of 2.8 achieve our goal of zero accidents. As a result 239 of our locations
• Management Standards launched to 3,500 managers achieved zero lost time accidents (LTAs) in 2017/18. Overall we
are pleased with the reduction in our LTA rates and our accident
• Integration of c. 1,900 new employees from
frequency rates, however, by our exacting standards, we were
three acquisitions
disappointed by an increase in both the number, and severity,
• Launched personal development planning support for
of accidents that happened in the mid-part of the 2017/18 year,
all employees
which impacted our overall performance for this data collection
In 2018/19 we will: period. Previously reported 2016/17 data has been updated to
• Continue and renew our strong focus on health and safety reflect all acquisitions during the financial year, therefore
• Continue to develop strong leadership and providing a direct comparison data set for 2017/18.
management capability Health and safety key 2016/17 2016/17
performance indicators 2017/18 (comparative) (reported) Variance
• Embed Management Standards into recruitment,
Total LTAs1 126 132 113 (4.5)%
promotion, assessment and development conversations
AFR2 2.8 3.0 2.6 (6.7)%
for managers
• Invite all employees to share their opinions in an 1. Lost Time Accident (LTA): number of accidents resulting in lost time of one
Employee Survey shift or more
2. Accident Frequency Rate (AFR): number of LTAs per million hours worked
• Increase the efficiency of people processes by enhancing
and extending the use of our information systems Determined to return to a positive trend of accident reduction,
in both number and severity, we have proactively taken steps
Our KPIs to reduce risks and reinforce our policies, processes and safe
Accident Frequency Rate (AFR) systems of work as well as developing our safety culture. In 2017
we further upgraded our global health, safety and environmental
Definition
management system, CERTUS, providing us with greater control
The number of lost time accidents (LTAs) per million
and richer insight into our performance in these areas whilst also
hours worked.
reducing the number of information systems in use across the
Target Group. We continue to invest in all physical safety improvements
0 accidents
such as machine guarding, safety equipment or segregation of
vehicles and pedestrians. In addition, we are reinforcing how vital
it is to keep actively focused on safety at all times by increasing
the safety leadership skills of managers through training and
Why this is a KPI involving all employees in identifying ways we could make our
At DS Smith we have a strong focus on individual ownership workplaces safer.
and we believe that by engaging our people to contribute
to a safe working environment and culture, everyone can To increase safety leadership skills and to expedite the compliance
influence a reduction in our accident frequency rate. with DS Smith’s safety standards we have designed a bespoke
development course for key managers. Starting with our recently
2018 performance acquired businesses in Iberia, south east Europe and the US, all
We are pleased to see a reduction in LTAs and AFR, a result transferring plant-responsible managers have attended the Safety
of the proactive measures put in place at mid-year. Leadership Onboarding. This programme equips them to act as role
models, challenge effectively and demonstrate the importance of
2016 3.2 safety over production deadlines to our employees. A similar series
of workshops were also held for all safety professionals across
20171 3.0
the Group to promote leadership skills, continuous development,
2018 2.8 networking, the sharing of good practices and to clarify
expectations of our health and safety professionals.
1. On a comparative basis
22
Strategic report
Safety responsibility extends beyond managers and we expect Creating a place where people are proud
all employees to look out for their own safety and for that of their to work and give their best
colleagues, and to continuously look for ways to improve the Our people are talented, hard-working and keen to make active
safety of their workplace. contributions to the success of the Company. We want to empower
In the following months, we will be implementing a new health our employees to realise their potential and are working to ensure
and safety strategy and widening our aim towards a vision we have the talent to meet and exceed our organisational
of zero harm. The journey towards zero harm will encompass ambitions for future growth and industry innovation.
organisational, physical and cultural elements, designed to OWN IT!
engage our people and move towards sustainable world-class Our employees are unified by their connection to the same
health and safety performance in the years to come. corporate culture and business strategy and we have retained
that connection under the banner of OWN IT!
Health and Safety Manager, Karlovac, Croatia
In the past year, sites and offices across the globe have utilised
their Employee Survey results and the OWN IT! toolkit to create and
implement engagement improvement plans that are connected to
a common framework but localised to their individual priorities. In
November 2017, 14,000 colleagues took the opportunity to share
their views on the progress we are making in a pulse survey which
reflected an 8 per cent increase in employee engagement.
In parallel to our direct engagement with all employees, we
work closely with employee representative groups. Our ability
to adapt, change and grow as an organisation benefits from a
good working relationship with these forums and our European
Works Council (EWC). We have collaboratively delivered several
successful projects including a Code of Conduct and most recently
the Employee Charter, which lists the mutual commitments of
management and employee representatives to improve the
business culture and operations to ensure colleagues are treated
fairly, listened to, supported and given the opportunity to succeed.
In 2017, DS Smith Karlovac in Croatia achieved ten years
without a lost-time accident and were recognised with a Growing Together
health and safety award issued by the Croatian Ministry of Open and regular performance
Labour. This achievement was based on a significant work dialogue is central to our people
programme over many years including investment in machine plan. All employees who want to
guarding, vehicles and personal protective equipment as develop with DS Smith should have
well as training, ergonomic furniture and personal alarms. a plan in place with their manager
However, it was only with the engagement and participation and the opportunity to acquire new skills or challenge themselves
of all employees on site that the safety culture and sustained in their role, through project work or formal learning. In order to
safety performance were able to develop. promote that dialogue and enhance the development culture in
DS Smith we launched Growing Together. The Growing Together
“To me, the most important thing is to speak directly to the
site provides guidance on planning a career with DS Smith, not
employees, listen to their ideas and proposals and – as part
just fulfilling a job, and equips employees and managers alike with
of the conversation – point them to the importance of safety
the structure to have positive development conversations and
at work. I believe that without their co-operation and team
identify the appropriate development actions.
work, it could have been difficult to reach the desired results.
The realisation that their opinions were heard and taken into Inclusion and diversity
consideration made it much easier to achieve these results. Our commitment to realising the potential of our people
All my colleagues were very supportive and cooperative. extends to all employees. For us, it is all about merit. Anyone
I’m also very grateful to work for a company like DS Smith can and should be able to realise their full potential in DS Smith
that invests in its employees and cares about their safety without experiencing inequality and unfairness on any grounds,
and well-being.” including disability. Our stated ambition is to promote an inclusive
culture within which all employees are valued and respected and
Sinisa Kotur, Health and Safety Manager, Karlovac have the opportunity to flourish.

Our strategy: To realise the potential of our people continued
As standard, we include employee opinion metrics on fairness networking opportunities to enhance the gender diversity of our
and equal treatment in every employee survey and we are workforce and to promote inclusive work practices.
working together with our EWC on the topic of inclusion and
Management standards
diversity in the broadest sense as part of the implementation
Over the past few years we have been developing all
of our Employee Charter. In recent years a primary focus has
people managers to understand the importance of
been cultural diversity and inclusion through a period of rapid
their role in driving the performance of their teams
international growth in order to maximise the value creation
and ultimately the business. Our Engaging Managers
from our acquisitions. Most recently we have agreed diversity and
Programme has given over 3,000 managers the skills
inclusion priorities which will form part of a focused work plan for
to act as positive role models and engage their teams. Alongside
2018/19. Other ongoing initiatives include the creation of working
this, we have Core Values and Leadership Competencies which
groups to boost the representation of minority groups within the
set the behavioural code for how DS Smith managers are
employee base, education, training on inclusive work practices
expected to carry out their work. Based on feedback in the
and ensuring there are clear channels for employees to speak up
2016 Employee Survey, we identified a need for greater clarity of
to their representatives or to use our “Speak Up!” channel should
expectations and consistency of management practices across
they encounter any bias or unfair actions. DS Smith leadership has
the Group. As a result, we have introduced nine Management
been proactive in agreeing a stated ambition to create an inclusive
Standards which encompass the key expectations of all DS Smith
culture and have agreed a clear set of priorities which will form
managers, all related policies and processes and links to learning
our workplan for 2018/19. Our commitment to diversity and
materials or activities.
inclusion has been communicated through various channels
to our employees and is captured in our Code of Conduct, our Meeting specific business challenges
Employee Charter and our Management Standards. To meet some of the more specific business challenges and to
deliver our strategy, we are also developing key leaders from our
Gender diversity
Group talent-pool. A prestigious Global Leadership Programme
Board has been designed in partnership with Oxford University’s Saïd
Business School for future executives who can be called upon to
Male: 6 step up and take on strategic leadership roles. The first groups will
Female: 2 be embarking on this programme during 2018.
Senior management
Male: 118
Female: 16
Group Julie Westcott, Group Health and Safety Director
Male: 22,020
Female: 6,284
This year, we have published gender pay gap information for our
UK businesses for the first time. The evidence in the report reflects
the hard work we put in to implement fair and equitable policy and
process when it comes to reward. What our report, and those of
others in the industry, has highlighted is the need to encourage
more women into jobs in the manufacturing industry. DS Smith is
keen to take a leading role in promoting training, recruitment and With safety as a continued strategic priority, a key
appointment made this year was our new Group Health
Our priorities and Safety Director, Julie Westcott, who was promoted from
our Packaging division. Julie joined DS Smith nine years ago
1 Actively encouraging women to choose careers

in manufacturing.
and has supported the development of our health and safety
programme from roles in the Packaging, Paper and Recycling
2
divisions as well as leading the co-ordination of best practice
Identifying female talent and supporting them to grow
sharing and internal audit across the entire Group. She
and develop within our organisation.
has been instrumental in raising standards, educating on
3 Ensuring everyone has the opportunity to reach their

full potential by removing any potential barriers so
that women can succeed in our business.
the drivers of a safety culture, influencing managers and
leaders in their responsibilities and improving the way we
communicate the good practices in place with colleagues.
24
Strategic report
Building individual and organisational capabilities Integrating new business
DS Smith’s continued growth, maturation as an organisation
and innovation into new products and services requires fresh Stronger Together – Interstate Resources acquisition
talent and different experience to supplement our strong internal
Our approach to integration is based on the overriding belief
labour market.
that when we integrate businesses we are truly stronger
Bringing in expertise together. This belief extends beyond the assets, products
Vacancies and newly created roles in the organisation have and technologies – people are at the heart. We gain skills,
given us the opportunity to bring in new colleagues from leading knowledge, experience and ideas every time we acquire
companies and for them to introduce different perspectives and a new business and this was particularly the case with
extensive experience to some key functions in DS Smith. Interstate Resources in north America.
Packaging specialists of the future In order to maximise the strength of Interstate Resources
Working in partnership with our EWC, we have also been and DS Smith, we invested significant time and effort to
proactively seeking ways to retain the expert knowledge of our engage and align the Interstate Resources leadership team
workforce, as many technical experts and long service employees at the outset. A combined leadership event was followed by
approach retirement. As a result, we have reinvigorated a cascade to all new colleagues of DS Smith sharing our story,
apprenticeship and graduate programmes and are tightening our values and setting out the roadmap for integration.
international good practice sharing or coordination surrounding Individual workstreams then held their own subject matter
these programmes. Overall, these efforts will ensure consistently workshops, unifying colleagues working in similar roles, i.e.
optimised resourcing levels and provide opportunities to pair health and safety, paper and packaging, and promoting best
experienced colleagues with new joiners to pass on their skills. practice sharing.
Our apprenticeship scheme introduces young talent into the Regular and engaging two-way communications kept
organisation and gives them the opportunity to become the colleagues informed throughout the process and early access
packaging specialists of tomorrow. to the full DS Smith suite of communication and collaboration
tools helped our new colleagues in north America feel part
Apprentices in Germany and Switzerland of the wider team with more than 25,000 individuals around
the world.
The successful integration of Interstate Resources can be
summarised in the feedback received during the stronger
together conference:
“A new spirit of success has developed”
“We gained a shared sense of moving the business forward…
a shared destiny”
“I see more opportunities for my growth and development,
In Germany and Switzerland DS Smith currently employs business-wise and personally”
110 apprentices and students who are joining a three-year
programme. They can select courses in production, logistics, Acquisitions not only provide access to new knowledge and
maintenance or administration in specific areas like packaging expertise about our customers but also provide opportunities
technologists, media technologists, industrial clerks, for individuals and teams. We have already seen the benefit in
designers, paper engineers etc. sharing practices across Europe and north America and have
identified a number of key talents to fulfil short or medium-
Every year a central onboarding welcome event takes term placements overseas, providing invaluable experience
place for all new apprentices to enable the development of for the individual and supporting the wider integration process.
a strong network. In September 2017, we welcomed 47 new
apprentices and students.
During the programme the apprentices gain professional We have also expanded our capacity in Europe through acquisition
experience within different site departments, as well as this year and most recently added the Romanian based EcoPack
theoretical knowledge within vocational schools. The and EcoPaper businesses to our operations in south east Europe.
apprentices graduate with a state-approved degree. Our experience in identifying the right organisations to join
DS Smith and in successfully integrating them into the Group is a
After completion of the training we take on 90 per cent of the key capability; ensuring we have the right talent with knowledge
apprentices in a permanent employment relationship. In this of the local market and customers in these high growth areas.
way, we support the growth of the business and counter the
lack of specialists.

Our strategy
To lead the way in sustainability

We aim to lead the way in sustainability by balancing the needs of our business,
our environment and our people.
Packaging plays a key role in delivering

We do this by sustainable products
• Building sustainability into our decisions The core role of packaging is to protect products and to keep food
and drink fresher for longer. As shops and shopping habits evolve,
• Growing our recycling platform
consumer expectations change and supply chains become more
Our performance complex, packaging has to work harder than ever. Increasingly,
packaging is expected to build brands, enhance customer
In 2017/18 we delivered:
experience and make supply chains more efficient. Packaging
• EcoVadis Gold secured, placing us in the top 5 per cent of all
has to do all this whilst retaining its core purpose: protecting
evaluated organisations
products. The right packaging does all of this sustainably.
• 95 per cent FSC® certified across all in scope packaging and
paper sites According to the Food and Drink Federation and INCPEN,
• 5.9 per cent reduction in waste to landfill per tonne of packaging can account for just 10 per cent of the total resources
production, in the Packaging division and energy invested in a product’s carbon footprint. A product’s
packaging is there to protect it, ensuring it will not be damaged as
In 2018/19 we will: it traverses the supply chain from point of production to point of
• Roll out and implement new sustainability targets to use. In protecting the product effectively, packaging plays a vital
underpin our strategy role in ensuring valuable energy and resources are not wasted.
• Further embed sustainability reporting into existing Packaging also makes supply chains more efficient. The right
performance measurement mechanisms packaging, working in harmony with the product, can increase
• Integrate the North America Paper and Packaging division transport utilisation, simplify logistics, streamline last-mile
into our sustainability reporting deliveries, reduce damage rates and cut down on product returns.
At each link in the supply chain, packaging plays an important role
Our KPIs in protecting resources and minimising environmental impact.
CO2 equivalent emissions
In doing so, innovative packaging can play a key role in addressing
Definition
many of the challenges linked to global megatrends – increased
Total CO2 equivalent (CO2e) emissions per tonne of production
efficiency in a resource constrained world, last mile delivery in
Target increasingly urbanised societies and reducing food waste in
30%
developed and developing countries.
Reduction over the 10 years to 2030
Whilst the core role of packaging will always be to protect
products and to keep food and drink fresher for longer, new
and innovative packaging does much more, sustainably.
Why this is a KPI
Energy consumption and associated carbon emissions are Sustainability is embedded within our circular offer
significant environmental aspects that contribute to global Our business model is circular with a unique capability of
challenges such as climate change and we are committed complementary recycling, paper and packaging operations.
to reducing our emissions relative to production. It is through this closed-loop system that we are able to
2018 performance embed sustainability into our products and services and deliver
CO2e emissions per tonne of production have increased by packaging solutions and recycling services that meet the evolving
5.2 per cent. This is due to a combination of increased use requirements of supply chains, customers and consumers.
of natural gas at our paper mills as a result of decreased Our sustainable packaging solutions begin with product design
burning of alternative fuels like reject plastics and a focus and innovation. Our global network of packaging strategists,
on performance papers and packaging which, whilst using supported by our innovative Impact and PackRight Centres, work
less fibre and providing better performing packaging, are with customers to design packaging that protects products and
more carbon intensive per tonne of production. We remain in the resources invested in them whilst making their supply chains
a positive position against our long-term target, showing a 1.5 more efficient.
per cent reduction in carbon intensity against a 2015 baseline.
Sustainable sourcing is central to our offer. Our primary
raw material – fibre – is a renewable biomaterial. Our focus is
on using quality, sustainably sourced raw materials, whether
2016 209 fibre or plastics. In Europe, our paper division manufactures only
2017 196 recycled papers, whilst in north America our Reading mill also
manufactures recycled papers and our Riceboro kraftliner mill
2018 206 sources all of its fibre inputs from sustainable sources.
26
Strategic report
Our manufacturing operations are focused on fully recyclable End of life recycling is a core element of our circular business
corrugated solutions and within our plastics business we provide model. Paper and board has the highest recycling rate of any
packaging solutions that are multi-use or made from recycled and material in Europe with fibres capable of being recycled up to
recyclable materials. Across our operations we are reducing our seven times. Our recycling division, one of the largest in Europe,
environmental impact through investment in innovative energy plays a key role in this, managing over five million tonnes of waste
reduction technologies, switching to cleaner fuel, turning waste materials per annum, some of which are a key feedstock for our
streams into resources and managing our water impact. network of paper mills. The net effect is that we are involved in
the recycling of a considerably higher tonnage of material than
Truly sustainable packaging solutions can set off a domino effect
we manufacture.
of efficiencies in our customers’ supply cycles, making logistics
more efficient, reducing supply chain environmental impacts, To further explore how we manage sustainability issues in more
protecting products and keeping food and drink fresher for longer. detail please see our Sustainability Review 2018 which is available
online: dssmith.com/company/sustainability/sustainabilityreport
Our sustainability approach, strategy, focus and targets

At DS Smith, our approach to sustainability is focused on three core pillars. Through ongoing
engagement with a wide variety of stakeholders we have identified a number of priority areas
where we believe we can have the greatest impact.
To drive and focus our activities in these areas we have, this year, set ourselves a number of new challenging and ambitious
long-term targets, complementing those already in place. Our full list of targets is as follows:
Our Business Our Environment Our People

Creating shared value through Minimising our impact, from design to Ensuring the safety, wellbeing and
responsible recycling, paper production and supply to recycling. development of colleagues and
and packaging. contributing to our communities.
Packaging Impact
Manufacture 100 per cent reusable or recyclable packaging by 2025 and grow our net positive recycling position1
Carbon and Energy

Fibre Sourcing Reduce our CO2e emissions by 30 per
Use 100 per cent recycled or chain of cent per tonne of production by 2030,
custody certified papers by 2020 against a 2015 baseline
Our Business
Supplier Standards Water Stewardship

Assess sustainability Achieve zero water impact2
performance of 80 per cent3 of by 2030
non-paper suppliers by 2020 Our Environment
Responsible Employer Waste and Recycling

Build a diverse, engaged and Send zero waste to landfill
respected workforce Our People by 2030
Responsible Neighbour Health and Safety

Zero accidents
Engage in community programmes at 100 per cent of our sites by 2020
Vision zero harm
1. Involved in all or in part of collecting, sorting, reprocessing, managing and/or transporting a greater tonnage of material through our Recycling division than we
place on the market through our Packaging and Plastics divisions
2. To include water quality, water stress improvements and water reduction (where feasible)
3. By spend Annual report & accounts 2018 | dssmith.com 27
Our strategy: To lead the way in sustainability continued
Performance As reported last year, we are continuing to roll out ISO50001

In the past year we have been working to complete a range certification at all relevant sites and will use this management
of commitments made relating to each of our focus areas. framework as a mechanism for driving continued performance
A summary of performance against these commitments improvements against our long-term carbon reduction target.
can be found below. We recognise the importance of climate change as both a
Packaging impact challenge and opportunity for all businesses and are aware of the
Perhaps more than ever before the role of packaging in society recommendations of the Taskforce on Climate-related Financial
is being scrutinised. There is more that the industry can do to Disclosures (TCFD). At present we believe that we report against
provide sustainable packaging solutions and real change will come many of the recommended criteria through our annual submission
from collaboration between all involved: regulators, trade bodies, to the Carbon Disclosure Project. Over the coming year we will
councils, brand-owners, retailers, re-processors and consumers. review our reporting against the criteria and will look to disclose
DS Smith continues to innovate to drive resource efficiency in more in future reports.
packaging, with highlights from the past year including Bedkind Recycling and waste
(an animal bedding product made from waste from our packaging We have had some considerable success in reducing our waste
operations), Beaulex(R) (an urban drainage solution made from to landfill, most notably at our paper mill in Belišće, Croatia where
post-consumer plastic waste) and various e-commerce initiatives waste to landfill fell by 26.9 per cent, and in our packaging division
(e.g. DISCS(TM) and Made2fit). where absolute waste to landfill fell by 8.7 per cent, or by 5.9 per
Fibre sourcing cent relative to production. However the impact of Operation
Each production site that converts or trades in wood fibre National Sword in China – restricting the export market for
or other wood derivative products is mandated to pursue a recycled materials – has seen our total waste to landfill tonnages
recognised certification programme leading to a chain of custody increase by 21 per cent on an absolute basis and 22 per cent
for responsible fibre sourcing. 95 per cent of our production sites relative to production as UK infrastructure has been unable to
are currently certified by a recognised certification scheme. recycle some of the material that would otherwise have been
exported for recycling.
Supplier standards
Our commitment to ensure our top 200 strategic suppliers The restrictions on exporting recycled materials have had a
sign our new Global Supplier Standard has progressed well, significant impact on waste management operations at Kemsley,
with 213 having committed to adhere to our minimum social and our UK paper mill. Supporting our customers in new territories
environmental expectations. However, we have not progressed means that we have to operate in countries where the waste
as we had planned with regards developing and implementing management infrastructure is less mature than in many European
a supplier assessment programme. Work is ongoing and our countries, but we aim to use the expertise within our group to
ambition and focus in this area is now reflected in our new target manage the waste from our mills sustainably. This is reflected
for 80 per cent of our non-paper suppliers (by spend) to have their in our new zero waste to landfill ambition.
sustainability performance assessed by 2020. Whilst our aim to Water stewardship
source 100 per cent of our papers sustainably addresses the risk Over the past year our effluent per tonne of production has
associated with our primary raw material, the purpose of this increased slightly. This is the result of the ongoing focus on
target is to ensure we drive similar ethical standards into our innovative performance papers and packaging.
wider supply base.
As reported last year, having a focus on water reduction is a
Carbon and energy challenge as reducing water use has a negative impact on the
Our net carbon figures for 2017 rose by 4.4 per cent on 2016 amount of energy consumed in our paper mills, negating any
values, driven by an increase in the consumption of natural gas at potential positive environmental impact. As such, our new focus
some of our paper mills and corrugators which can be seen in the is on water quality and through effective treatment we are able
5.3 per cent increase in Scope 1 emissions. This was partially offset to ensure that our effluent does not adversely affect the water
by a 4.5 per cent increase in energy exports representing 317 kt of resources that we share with our local communities. This focus
CO2e. The slight fall in production by weight reported here reflects on water quality is something that we have looked to reflect in
the fact that, whilst production by volume continues to increase, our new water stewardship target. During the year we received
the relative weight of this production has decreased due to the notification of breaches or minor environmental incidents at six
success of our focus on lighter, higher performance papers sites. There were zero major incidents (defined as incidents of
and packaging. significant impact reportable to local or national authorities, or
We remain in a positive position against our long-term target incidents potentially resulting in legal prosecution) reported for
to reduce our CO2e emissions per tonne of production by 30 per the period of this report.
cent, with our carbon intensity 1.5 per cent lower against a 2015 Health and safety, responsible employer
baseline. This is the result of an ongoing focus on both energy and responsible neighbour
efficiency investments and switching to cleaner, less carbon For information on the past year’s health and safety performance
intensive fuels. and our ongoing work to be an ever more responsible employer
28 please see pages 22 and 23.
Strategic report
Sustainability governance Sustainability Steering Group is chaired by the Group General
The Board considers risks arising from sustainability issues as Counsel and Company Secretary.
being among the key risks to the Group’s operations and by way DS Smith is committed to conducting business in a socially and
of mitigation adequate and effective policies and procedures environmentally responsible manner. DS Smith subscribes to a
for managing emerging sustainability issues are in place. These number of international standards and guidelines relevant to
policies are periodically reviewed and updated, with action plans corporate responsibility and business conduct, including:
communicated to the heads of each business unit. The Board
receives regular reports on performance. • United Nations Global Compact;
• United Nations Declaration of Human Rights and the
The Group Chief Executive is responsible for addressing Convention on the Rights of the Child;
sustainability-related issues through the Group Health, Safety,
• International Labour Organisation Eight Fundamental
Environment and Sustainability Committee and a divisionally
Conventions; and
focused Sustainability Steering Group oversees the process
• Organisation for Economic Co-operation and Development
and sets and monitors internal targets and strategies to ensure
Guidelines for Multinational Enterprises.
sustainability-related risks and opportunities are appropriately
managed. Any residual issues are brought to the Board. The For more information on our policies, procedures and
performance in any of these areas please see our
Sustainability Review 2018.
Data
2015 2016 2016 2017 vs 2016 %
KPI Unit of measure (published) (published) (representative) 2017 (representative)
Scope 1 kt CO2e 1,678 1,570 1,576 1,660 5.3

Scope 2 kt CO2e 355 333 348 352 1.2
Emissions from energy exports kt CO2e 348 299 299 317 5.8
Total CO2e (net energy export) kt CO2e 1,686 1,604 1,624 1,695 4.4
Energy exported gwh 962 852 854 892 4.5
Total production kt nsp 8,059 8,209 8,302 8,234 (0.8)
Waste to landfill kt 87 98 97 118 21.0
Effluent Mm3 19 20 19 20 6.1
CO2e per tonne of production kg CO2e/tonne nsp 209.0 195.4 195.7 205.9 5.2
Effluent/tonne production m3/tonne nsp 2.4 2.4 2.3 2.5 7.0
Landfill/tonne production kg/tonne nsp 10.7 11.9 11.7 14.3 22.0
Methodology
1. Figures from all years are based on data from sites we owned for the entirety of that year. 2017 data based on sites we have owned since 1 January 2017.
2016 figure “2016 (representative)” restated from last year to include data from sites added to the 2017 scope to give a representative like-for-like comparison.
We have shown the 2015 published figure as it is the baseline year for our target, and the published figure for 2016 to show the performance of the business as
previously reported. The same calculations have been applied for all years.
2. The CO2 and CO2e emissions were calculated using the UK DECC 2016 factors for all fuels and the UK national grid. Emissions from other national grids use the
DECC factors (IEA) from 2015.
3. Total production is the sum of printed reels and paper reels from our paper mills; plastics production (all types) from our plastics sites; recovered fibre and other
materials collected and processed through our recycling depot network; and boxes and sheets sold to third parties from our packaging sites and other types of
packaging production from these sites.
4. DS Smith collects and reports environmental data in accordance with the guidelines of the Global Reporting Initiative and the Greenhouse Gas Protocol (GHGP),
to the extent that this is practicable.
Full details on the methodology and additional facts and figures on our sustainability data can be found in our Sustainability Review 2018
and databook.
Verification Statement from Bureau Veritas UK Ltd

Bureau Veritas UK Limited (Bureau Veritas) has been commissioned by DS Smith Plc. (DS Smith) to provide an independent opinion on the following
environmental performance indicators: energy consumption, greenhouse gas emissions, raw material usage, water consumption, waste, discharge
(to air and water) and production for calendar year 2017. The reporting boundaries cover DS Smith’s global operations.
Based on our verification activities and scope of work, nothing has come to our attention to suggest that the reported data do not provide a fair
representation of environmental performance across the DS Smith group for the defined period.
DS Smith should be commended on its approach to environmental data collection, including the use of a central reporting system,
clear responsibilities at Head Office and site levels, frequent data gathering, and the existence of an audit trail from source evidence to
reported data at the sites visited.
A full verification statement including methodology, limitations and exclusions can be found on the DS Smith website at
https://www.dssmith.com/company/sustainability/our-environment/performance

Our strategy
To double our size and profitability

We aim to double our size and profitability by growing through market share
gains, investing behind growing parts of the corrugated packaging market and
making acquisitions.
We do this by Return on sales

• Winning market share Definition
• Growing with our customers Earnings before interest, tax, amortisation and adjusting items as
a percentage of revenue.
• Expanding our footprint through acquisitions and
greenfield sites Target
8-10%
• Building a resilient and sustainable business model
Our performance
In 2017/18 we delivered:
Why this is a KPI
• 5.2 per cent underlying box volume growth
The margin we achieve is a reflection of the value we deliver to
• 17 per cent revenue growth (constant currency) our customers and our ability to charge for that value. It is also
• 16 per cent adjusted operating profit growth driven by our scale. A higher return on sales makes the profit
(constant currency) more resilient to adverse effects.
• Expansion of our corrugated packaging and paper operations 2018 Performance
into north America In 2018 we achieved a return on sales of 9.2 per cent, broadly
• High growth from multinational and e-commerce customers consistent with the prior two years and in the upper half of our
target range of 8–10 per cent. This has been delivered despite
In 2018/19 we will: substantial short-term headwinds from the very significant rise
• Continue to drive growth through investment and acquisitions in paper prices over the year, which is the largest input to our
• Optimise our manufacture and sourcing of CCM corrugated packaging. These input cost increases have been
• Maximise efficiency of operations and procurement recovered progressively through the year, with a time lag.
2016 9.3%
Our KPIs
2017 9.3%
Like-for-like corrugated volume growth
2018 9.2%
Definition
Like-for-like volume of corrugated box products sold (excluding
the effect of acquisitions and disposals) measured by area. Adjusted return on average capital employed
(ROACE)
Target
Definition
GDP +1%
Earnings before interest, tax, amortisation and adjusting items as
weighted GDP +1% target
a percentage of average capital employed, including goodwill, over
the prior 12 month period.
Why this is a KPI Target
12-15%
We target volume growth above GDP because we expect to win
market share by delivering value to our customers across their
supply chain on a multinational basis. We invest in areas that we
expect to grow ahead of GDP, such as e-commerce packaging and
display packaging. Why this is a KPI
Our target ROACE of 12–15 per cent, to be delivered throughout
2018 Performance the economic cycle, is above our cost of capital. ROACE is a key
In 2018 our corrugated box volumes grew 5.2 per cent consistently measure of financial success and sustainability of returns and
throughout the year. This is significantly ahead of the target of reflects the returns available for investment in the business
GDP + 1 per cent (being 3.5 per cent) and represents a step change and for the servicing of debt and equity. All investments and
compared to prior years. The drivers behind this are success in our acquisitions are assessed with reference to this target.
recently acquired north American business along with significant 2018 Performance
growth in Germany and eastern Europe. In 2018 we achieved a ROACE of 14.1 per cent, near the top of
our target range. This includes the acquisition of Interstate
2016 +2.8% 3.1%
Resources, which joined the Group on 25 August 2017.
2017 +2.8% 3.2% 2016 15.4%
2018 +3.5% 5.2% 2017 14.9%
GDP +1 target level 2018 14.1%
30
Strategic report
Net debt/EBITDA Operating review
Definition
Net debt calculated at average FX rates for the year, over
earnings before interest, tax, depreciation, amortisation and “We are delighted to report another year of
adjusting items for the preceding 12 month period adjusted good growth for DS Smith, delivered through
for acquisitions and disposals made during the financial year. a combination of acquisitions and organic
Target development. We have again expanded our
2.0x
customer offering during the year both
geographically and through our continuous
focus on innovative solutions for our customers,
and we have delivered against all our medium-term
Why this is a KPI
financial targets.”
Net debt/EBITDA is a key measure of balance sheet strength
and financial stability.
2018 Performance
Net debt/EBITDA at 30 April 2018 is 2.2 times. The increase in
Group leverage is due principally to acquisitions in the year of
£819 million, partially offset by cash flow in the period and
proceeds of equity issued of £283 million. Overview
2016 2.0x The past year has seen a backdrop of strong economic growth in
Europe and in particular, growth in e-commerce. In the financial
2017 1.8x
year 2017/18, DS Smith once again achieved very strong growth
2018 2.2x driven both organically and through acquisitions and we are
particularly pleased with our volume growth and gain in market
Cash conversion share. The ongoing recovery of very substantial input cost rises,
through pricing, has resulted in a broadly stable margin year-on-
Definition
Free cash flow before tax, net interest, growth capex, pension year. The business took a further major step in August 2017 with
payments and adjusting items cash flows as a percentage of the acquisition in north America of Interstate Resources. We are
earnings before interest, tax, amortisation and adjusting delighted with the initial performance and integration of what is
items. Free cash flow is the net movement on debt before now our North America Packaging and Paper (NAPP) business. The
cash outflow for adjusting items, dividends paid, acquisition positive response from customers to this acquisition is reflected
and disposal of subsidiary businesses (including borrowings in the strong volume growth since ownership. We made further
acquired) and proceeds from issue of share capital. investments in our fast growing south eastern Europe region
Target with the acquisition of a Romanian integrated packaging business
100%
with a newly commissioned light-weight paper mill. Since the
financial year-end, we have announced the proposed acquisition
of Europac, a leading integrated packaging business in western
Europe and of Corrugated Container Corporation, a four site
Why this is a KPI box business in north America.
We focus on cash conversion as part of our wider focus on
Organic corrugated box volumes have grown strongly throughout
capital management and maintaining a prudent balance sheet.
the year by 5.2 per cent. As with last year all regions have again
Working capital is a key focus within the business in order that
all capital is employed where it can best deliver returns for reported growth, with particularly strong regional volumes in DCH
the business. and Northern Europe, Central Europe and Italy, and North America.
This rate of box volume growth is ahead of our GDP +1 per cent
2018 Performance target, which equates to 3.5 per cent. Growth again comes
Cash conversion is in line with our target of 100 per cent
from our multinational customers, particularly e-commerce and
or greater.
shelf ready packaging. Our core strategy has been built around
2016 112% providing consistent quality and service on a pan-European and
now also trans-Atlantic basis providing opportunities for our
2017 133%
customers to benefit from our investment in innovation and
2018 100% leading solutions. We fully expect the current trends around
sustainable packaging solutions and rationalising supply chains to
Further information on calculation of financial KPIs and other non-GAAP continue and we continue to seek to drive our market share gains.
performance measures is given in note 32 to the financial statements

Our strategy: To double our size and profitability continued
Our long-standing approach of working with customers to and design, allowing our customers to participate in these
increase their sales, reduce their costs and manage their risks, benefits to drive their businesses.
remains as relevant as ever.
Acquisition of Interstate Resources
For the full-year, revenue growth of 17 per cent on a constant In 2017/18, we responded to customer demands and brought our
currency basis was broadly equally weighted between the solutions to north America, through the acquisition of Interstate
contribution from organic growth and from acquired businesses. Resources. We also added strategically required capacity in the
Organic growth was driven principally by volume growth and fast growing south east Europe region through the acquisition
increases in sales price, implemented in response to rises in of the EcoPack and EcoPaper businesses in Romania
underlying paper prices.
The creation of our North America Packaging and Paper (NAPP)
Adjusted operating profit increased by 16 per cent on a constant business has been a success on numerous measures and the
currency basis (20 per cent on a reported basis) to £530 million acquisition of Interstate Resources has materially outperformed
(2016/17: £443 million). This was driven by the contribution from our initial expectations. Engagement from new colleagues in
volume growth, contributing 13 per cent growth (£59 million) north America has been excellent, with a huge enthusiasm to
compared to the prior year, and from the contribution of deliver our business plans. The integration of their paper assets
businesses acquired, in particular our north America assets. into our global supply chain has already yielded significant value
Input cost increases were driven by a very substantial rise in the and we are progressing extremely well with our multinational
cost of paper and other operating costs, which were substantially customers. The NAPP division is managed by a senior team made
passed through to customers, with the usual timing lag, with a up of a mix of those who have worked in that business for many
net negative impact on profit of £52 million. years, and those with a background in DS Smith, with the overall
Adjusted earnings per share increased by 7 per cent on a constant approach being getting the “best from both” and all parties
currency basis to 35.5 pence (9 per cent on a reported basis) learning from one another. We are also implementing OWN IT!,
(2016/17: 32.5 pence). This result builds on eight years of our employee engagement programme which helps colleagues
consistently strong growth, with the eight year compound around the organisation actively participate in delivering the
annual growth rate for adjusted EPS being 26 per cent. corporate strategy. Since the year-end we acquired box plants
in four new sites in the US.
The Board considers the dividend to be an important component
of shareholder returns and, as such, has a policy to deliver a Strategic review of Plastics division
progressive dividend, where dividend cover is between 2.0 and 2.5 Consistent with our strategy to be the leading supplier of
times, through the cycle. For the year 2017/18, in accordance with sustainable packaging solutions and increasing focus on the
our dividend policy, the Board recommends a final dividend of 9.8 production of high quality, cost effective corrugated packaging,
pence per share, which will be paid to all shares on the record date, we have initiated a strategic review of our Plastics business.
including those to be issued in the rights issue. The 2017/18 interim
dividend of 4.9 pence, and prior dividends, will be restated in
Proposed acquisition of Europac
future accounts to reflect the bonus factor adjustment On 4 June 2018, we announced the proposed acquisition of
resulting from the rights issue. Papeles y Cartones de Europe, S.A., known as Europac, a leading
integrated packaging business in western Europe. The acquisition
Growing the business has a highly compelling strategic rationale and we expect that it
DS Smith has grown the business very profitably, organically and will create significant value for customers and consistent and
through consolidating acquisitions. We believe that the success attractive returns for DS Smith shareholders.
of our multinational customer strategy demonstrates that there
is significant customer demand for high quality packaging and
Delivering on our medium-term targets and key
consistent service on both a pan-European and now trans-Atlantic performance indicators
basis. As such we continue to see this demand as a significant We continue to deliver in line with our medium-term targets and
growth driver. Our capital and target acquisition investments key performance indicators. As set out above, corrugated box
are set out each year in our three year corporate plan and agreed volumes grew by 5.2 per cent. This exceeded our target of GDP
with the Board. All investments are evaluated to determine that +1 per cent, with year-on-year GDP growth, weighted by our sales
they fulfil our strict financial criteria of being consistent with our in the markets in which we operate, estimated at 2.5 per cent
financial KPIs, in the medium-term. Our strategic aim is to become (Source: Eurostat) resulting in a 170 basis point outperformance
the leader in sustainable packaging solutions by any measure. against the target of 3.5 per cent. All regions have again recorded
We will continue to build on our strong customer demand for our volume growth in the year, with a particularly strong contribution
packaging solutions and maintain our investment in innovation from DCH and Northern Europe region, Central Europe and Italy,
and from North America. Underlying the regional performances
32
Strategic report
has been the growth of our pan-European customer base, where The Group has a challenging target for customer service of
we continue to make significant gains with existing customers as 97 per cent on-time, in-full deliveries. In the year we achieved
we increase our market share with them, further demonstrating 93 per cent, an improvement versus the prior year, but still below
the demand for a high quality pan-European supplier of corrugated our target. Management remains extremely dissatisfied with
packaging, operating on a co-ordinated multinational basis. this outcome and is fully committed to delivering the highest
standards of service, quality and innovation to all our customers
Adjusted return on sales has remained broadly flat at 9.2 per cent
and will continue to challenge ourselves to meet the demanding
(2016/17: 9.3 per cent), in the upper half of our target range of
standards our customers expect.
8-10 per cent, reflecting the benefit of good drop-through from
incremental revenues into profit, offset by substantial input cost One part of the DS Smith strategy is to lead the way in sustainability.
pressure over the period and the recovery of this through selling price. Corrugated packaging is a key part of the sustainable economy,
providing essential protection to products as they are transported
Adjusted return on average capital employed (ROACE) is 14.1 per
and, at the end of use, it is fully recyclable. Corrugated packaging
cent (2016/17: 14.9 per cent), continuing near the top of our medium-
is also substantially constructed from recycled material, as are
term target range of 12-15 per cent and significantly above our cost
many of our plastic packaging products. Our Recycling business
of capital, despite the recent significant acquisition of Interstate
works with customers across Europe to improve their recycling
Resources in north America, which has a dilutive impact on this ratio.
operations and overall environmental performance. In calendar
The ongoing high ROACE reflects significant focus on an efficient
2017, compared to calendar 2016, on a restated basis to reflect
capital base, in addition to profitability. We have maintained our
acquisitions, our CO2 equivalent emissions, relative to production,
continual focus on tight capital allocation and management within
have increased by 5 per cent, reflecting an increase in energy
the business, including working capital, which has been closely
usage relating to increased volume growth, and by the impact
managed as shown by a reduction in the ratio of average working
of light-weighting our paper and packaging.
capital to revenue. ROACE is our primary financial measure of
success, and is measured and calculated on a monthly basis. Outlook
Net debt as at 30 April 2018 was £1,680 million (30 April 2017: The current year has started well, with the volume growth
£1,092 million) reflecting the significant acquisitions made in the momentum seen in 2017/18 continuing into the new financial
period of £819 million (including debt assumed of £204 million), year and the ongoing recovery of the paper price rises announced
less cash raised from the issue of new equity of £283 million. earlier this calendar year progressing as expected.
Cash generated from operations before adjusting items of £656 The drivers for growth of sustainable packaging in a dynamic
million was used to invest in capex of £329 million (net) and one consumer and retail environment are more relevant than ever.
off adjusting items of £80 million primarily in acquiring and Our differentiated position with customers, built on our geographic
integrating the new businesses. Net debt/EBITDA (calculated scale and innovation-led expertise reinforces our confidence in
in accordance with our banking covenant requirements) is 2.2 the prospects for the business.
times (2016/17: 1.8 times). This reflects the acquisitions made as
well as ongoing tight cash management and control throughout Statement of approval
the business. This Strategic Report, including pages 2 to 45, was approved
by a duly authorised Committee of the Board of Directors on
During the year, the Group generated free cash flow of £204
17 June 2018, and signed on its behalf by
million (2016/17: £363 million). Cash conversion, as defined in our
financial KPIs (page 31), was 100 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 have again reported
improvements in our safety record, with our accident frequency Miles Roberts
rate (defined as the number of lost time accidents per million
Group Chief Executive
hours worked) reducing by a further 9 per cent from 3.0 to 2.8,
reflecting our ongoing commitment to best practice in health and
safety. We are proud to report that 239 sites achieved our target
of zero accidents this year and we continue to strive for zero
accidents for the Group as a whole.

Operating review
Unless otherwise stated, any commentary and analysis in the Western Europe
operating review is based on constant currency performance. Year ended Year ended Change –
30 April 30 April Change – constant
Group £m 2018 2017 reported currency
Year ended Year ended Change – Revenue 1,450 1,264 15% 10%
£m 30 April 2018 30 April 2017 reported
Adjusted operating profit1 102 104 (2%) (6%)
Revenue 5,765 4,781 21%
Return on sales1 – % 7.0 8.2 (120bps) (120bps)
Adjusted operating profit1 530 443 20%
Operating profit 361 316 14% Like-for-like corrugated packaging volumes in the region have
been strong, with both France and Iberia gaining market share
Strong organic volume growth, revenue growth driven by paper with pan-European and e-commerce customers, offsetting
prices and growth from acquisitions offset by input cost increases continued flat market conditions in Benelux. Revenues have
led to higher revenue and operating profits. Revenue increased by grown by 10 per cent, principally from good organic growth and
21 per cent to £5,765 million and operating profit by 14 per cent a small contribution from the full year benefit of the acquisitions
to £361 million. The operating review below includes discussion of GoPaca and P&I Display in Iberia in 2016/17.
of adjusted operating profit which excludes amortisation and
There has been good recovery of paper cost rises to date in the
adjusting items. Note 32 includes discussion on non-GAAP
region, with a short-term lag. Adjusted operating profit fell slightly
performance measures.
reflecting input costs not yet fully recovered in absolute terms
UK although this is expected to be completed in the new financial
Year ended Year ended year. Return on sales has fallen by 120 basis points reflecting
£m 30 April 2018 30 April 2017 Change
the short-term lag in input cost recovery described above
Revenue 1,078 962 12% and are expected to be restored in the new financial year.
Adjusted operating profit 1
109 94 16%
Central Europe and Italy
Return on sales1 – % 10.1 9.8 +30bps
Year ended Year ended Change –
Our UK corrugated packaging business has performed well £m 2018 2017 reported currency
despite the uncertain economic backdrop. E-commerce volumes Revenue 1,429 1,239 15% 10%
have been particularly good, and we recently launched an online Adjusted operating profit1 129 125 3% (2%)
e-commerce supply platform for small businesses in addition to
our focus on large e-commerce customers. We have made very
good progress on input cost recovery and continue to drive Volumes in this region have again been very good, particularly
operational efficiencies. The UK business is long paper and in Poland and the Baltic region, and also in south eastern Europe.
recycling, which has benefited from the rising paper price Revenue growth of 10 per cent reflects the strong organic volume
environment over the past 12 months. growth, sales price increases implemented to recover input costs,
and a modest early contribution from the EcoPack and EcoPaper
DCH and Northern Europe
business acquired on 6 March 2018.
£m 2018 2017 reported currency
Adjusted operating profit is marginally lower, reflecting a small
contribution from the acquired businesses and the benefit of
Revenue 1,083 989 10% 6%
drop-through from volume and sales price increases, offset by the
Adjusted operating profit1 90 82 10% 6%
increases in paper and other input costs, as described earlier. As a
Return on sales1 – % 8.3 8.3 – – result, return on sales reduced by 110 basis points which as with
other regions should be fully restored in the new financial year.
Volumes in this region have continued to be very positive, with
very good volume growth in Northern Europe and excellent North America
growth in the DCH (Germany and Switzerland) region. Revenues Year ended Year ended
grew by 6 per cent, reflecting the benefit of positive corrugated £m 30 April 2018 30 April 2017
box volumes throughout the region. Revenue 379 –

Adjusted operating profit increased by 6 per cent, in line with Adjusted operating profit1 – £m 62 –
revenue growth, reflecting the benefit of the drop through of Return on sales1 – % 16.4 –
profit from volume growth and the benefit of the contribution
The performance of the North America packaging and paper
from our paper manufacturing operations in the region.
division has been excellent, with corrugated box volume growth
Consequently, return on sales was stable at 8.3 per cent.
compared to the comparative period (prior to DS Smith ownership)
ahead of the Group average. The return for the period, on a
1. Adjusted to exclude amortisation and adjusting items
34
Financial review
Delivering strong
Strategic report
run-rate basis is above our weighted average cost of capital,
well ahead of our initial expectations. Both the paper and
packaging assets have performed very well in a rising paper price
financial performance
environment. Synergies of c. $10 million (c. £8 million) have been
realised, principally from global supply chain benefits versus our
target of $35 million (upgraded from $25 million at the time of
announcement of the acquisition), the remainder of which we
expect to realise over the coming two financial years, broadly
evenly split.
Plastics
£m 2018 2017 reported currency
Revenue 346 327 6% 5%

Adjusted operating profit1 38 38 – –
Constant currency revenue increased 5 per cent, the majority of

which was driven from volume and pricing increases, and also with
a contribution from the acquisition of Parish, a small but highly
complementary bag-in-box business in north America acquired in
January 2017. Adjusted operating profit was stable at £38 million,
principally reflecting the impact of rising raw material and other
costs, which, as expected, were only partially recovered in the
year with the remainder to be recovered early on the next year.
Adrian Marsh – Group Finance Director
Non-GAAP performance measures Overview

The Group uses certain key non-GAAP measures in order to The Group performed very strongly in 2017/18, with significant
provide a balanced view of the Group’s overall performance and organic volume growth, revenue growth reflecting the recovery
position, eliminating amortisation and unusual or non-operational of paper prices and growth from acquisitions more than offsetting
items that may obscure understanding of the key trends and input cost headwinds. In the year we acquired Interstate
performance. These measures are used both internally and Resources in the US and EcoPack and EcoPaper in Romania.
externally to evaluate business performance, as a key constituent DS Smith maintains the widest reach in Europe of any packaging
of the Group’s planning process, they are applied in the Group’s group and, as a result, is able to offer a complete pan-European
financial and debt covenants, as well as establishing the targets solution to all our customers, and through the creation of our
against which compensation is determined. Amortisation relates North American Packaging and Paper business we can offer
primarily to customer contracts and relationships arising from trans-Atlantic solutions too.
business combinations – significant costs are incurred in The Group continues to deliver against the targets that the Board
maintaining, developing and increasing these, costs which are has set for its financial key performance indicators, as well as
charged in determining adjusted profit; exclusion of amortisation being confident that it will achieve all of its medium-term
remedies the double count which would otherwise occur. Unusual financial measures:
or non-operational items include business disposals, restructuring
and optimisation, acquisition related and integration costs, and • Adjusted operating profit before adjusting items and
impairments, and are referred to as adjusting items. amortisation up 16 per cent on a constant currency basis
and 20 per cent on a reported basis at £530 million
Reporting of non-GAAP measures alongside reported measures is (2016/17: £443 million)
considered useful to investors to understand how management
• Operating profit at £361 million is up 14 per cent
evaluates performance and value creation internally, enabling
(2016/17: £316 million)
them to track the Group’s performance and the key business
• Organic corrugated box volume growth of 5.2 per cent
drivers which underpin it and the basis on which to anticipate
(2016/17: 3.2 per cent)
future prospects.
• Adjusted return on sales1 of 9.2 per cent (2016/17: 9.3 per cent)
Note 32 of the consolidated financial statements explains further • Adjusted return on average capital employed1 of 14.1 per cent
the use of non-GAAP performance measures and provides (2016/17: 14.9 per cent)
reconciliations as appropriate to information stemming directly
• Net debt/EBITDA of 2.2 times (2016/17: 1.8 times)
from the financial statements.
Where a non-GAAP measure is referred to in the review,
the equivalent measure stemming directly from the financial
statements (if available and appropriate) is also referred to.

Financial review continued
Trading results The return on average capital employed for the year was 14.1 per
Group revenue increased to £5,765 million (2016/17: £4,781 cent (2016/17: 14.9 per cent), which is at the higher end of the
million), a growth of 21 per cent on a reported basis, reflecting target set by the Board of 12-15 per cent, significantly above the
volume and sales price growth, the impact of acquisitions and Group cost of capital. Given the measure of capital employed is
a positive currency translation effect. Corrugated box volume the average balance and not a single point in time, this current
growth was significantly ahead of target, of GDP +1 per cent, at year ratio is affected fully by acquisitions made in 2016/17 and
5.2 per cent, and sales price growth reflected the price increases partially by acquisitions made in 2017/18.
that took place to recover paper price increases in the year. The 2017/18 2016/17
Income statement £m £m
euro accounted for 57 per cent of Group revenue and its strength
against sterling during the year represented the majority of the Revenue 5,765 4,781
£143 million of currency impact. On a constant currency basis, Adjusted operating profit1 530 443
revenue increased by 17 per cent, including organic growth of Adjusted return on sales1 9.2% 9.3%
£401 million. Net financing costs (62) (55)
Operating profit of £361 million increased from the prior year Share of profit of equity accounted
(2016/17: £316 million) due to business growth, partially offset investments, net of tax 5 3
by higher adjusting items of £76 million (2016/17: £62 million) Adjusted profit before tax1 473 391
and higher amortisation of £93 million (2016/17: £65 million) Adjusted income tax expense1 (104) (85)
driven by the significant acquisitions made in the year. Non-controlling interests – 1
Adjusted operating profit rose by 20 per cent on a reported basis Adjusted earnings1 369 307
to £530 million (2016/17: £443 million), with currency having a Basic adjusted earnings per share1 35.5p 32.5p
positive impact of £13 million. Growth on a constant currency Profit for the year attributable to owners of
basis was 16 per cent, benefiting from a £67 million impact from the parent 259 257
the acquisitions of Interstate Resources in the US and EcoPack Basic earnings per share 24.9p 22.1p
and EcoPaper in Romania during the financial year. These
acquisitions have already begun to generate synergies in the
short time that they have been part of the Group and are on Adjusting items
track to deliver or outperform their acquisition business cases. Adjusting items before tax, financing costs and share of results of
This strong result is testament to the Group’s experience in the associates were £76 million (2016/17: £62 million).
effective integration of, and support for, acquired businesses.
Acquisition related costs of £29 million (2016/17: £7 million) were
The profit drop-through from higher volumes (£59 million) and the largest element of adjusting items in 2017/18 driven by the
the benefit of higher pricing and sales mix (£204 million) was acquisition costs of Interstate Resources which comprised £14
offset in part by higher input and other costs (£256 million). Input million of the total, but also reflecting a year of significant deal
costs were substantially higher than in the prior year, reflecting activity. They comprise professional advisory and legal fees, and
significant increases in paper prices (which are the largest single directly attributable staff costs related to acquisitions evaluated
component of input costs) and general inflationary pressures on and completed during the year as well as to deals which are still
other costs with a particularly large impact on distribution. The in the pipeline, as well as a £2 million fair value remeasurement
commercial finance function within the Group has worked closely on the redemption liability related to the acquisition of Interstate
with sales teams to ensure that increased paper prices are Resources. Integration costs of £13 million related to both current
recovered through pass through mechanisms to our customers, and prior year acquisitions.
and packaging strategists work with our customers to mitigate
these impacts through performance packaging and innovation. Restructuring and reorganisation costs of £17 million were
The Group looks to mitigate the impact of other input costs incurred primarily in DCH and Northern Europe (£4 million) and
through improvements in efficiency and procurement initiatives. in the UK (£4 million). Approximately half of the restructuring
charges relate to initiatives that commenced in the prior year,
Depreciation increased by £20 million in the year on a reported with the remainder attributable to new initiatives launched in
basis mainly from the acquisition of Interstate Resources and the current year.
previous capital investments. The increase in amortisation for
the year from £65 million in 2016/17 to £93 million in 2017/18 Other adjusting items of £16 million (2016/17: £9 million)
was driven primarily by intangible assets recognised through principally relate to significant multi-year European
the acquisition of Interstate Resources. centralisation and optimisation projects, including the
development of a Group wide financial enterprise resource
Group margins continue to benefit from both operational leverage planning (ERP) solution, shared service centres and major
and continuous focus on cost and efficiency, which mitigated IT integration projects. These projects arise primarily as a
increases in other direct material costs, resulting in a broadly flat consequence of the Group’s acquisition activities, where the
return on sales of 9.2 per cent (2016/17: 9.3 per cent). In 2015 the existing ERP, general IT systems and infrastructure are limited.
return on sales target range was increased to 8-10 per cent and The total costs of individual projects are significant and tend to be
again performance has been fully in line with this upgraded target. incurred over more than one financial period.
36
Strategic report
Finance costs adjusting items relate to financing costs incurred Acquisitions and disposals
in the acquisition of Interstate Resources of £5 million, with In line with its strategic aims, the Group has continued to grow
the remainder relating to the unwind of the discount on the the business in order to meet the requirements of its major
redemption liability related to the purchase of Interstate customers. This year the Group made significant strategic steps
Resources. The finance cost which would have been incurred with the acquisition of an 80 per cent holding in Interstate
had the put option been exercised is recorded in underlying Resources in the US on 25 August 2017 and of EcoPack and
finance costs. EcoPaper in Romania on 6 March 2018.
Interest, tax and earnings per share Interstate Resources is an integrated packaging business based
Net financing costs were £74 million (2016/17: £55 million). Net on the East Coast of the US and comprised the Group’s North
financing costs before adjusting items were £62 million, up £7 America segment. In the year ended 30 April 2018, Interstate
million from the prior year. The increase from the prior year was Resources contributed revenue of £379 million and adjusted
primarily due to the acquisition of Interstate Resources. Interest operating profit before amortisation and adjusting items of £62
costs include a charge of £2 million to reflect the additional million. The total consideration of £772 million plus debt acquired
finance cost which would be incurred if the Interstate Resources of £140 million was funded in part by a placement of ordinary
put option had been exercised. Adjusting financing costs of £12 shares in the market and to the seller. A redemption liability for
million (2016/17: nil) comprise the unwind of the discount on the the sale and/or acquisition of the remaining 20 per cent was
put option liability recognised on the acquisition of Interstate also recognised as a liability, initially at £152 million.
Resources, and bridge financing and bond issue costs associated
EcoPack and EcoPaper is a leading integrated packaging business
with this acquisition. The employment benefit net finance
in Romania. It will significantly enhance the Group’s capacity to
expense was £4 million (2016/17: £5 million).
serve customers in this high growth region as well as supporting
Profit before tax was higher at £292 million (2016/17: £264 our wider substantial eastern European presence. The total
million), due to flow through of higher operating profit and consideration of £128 million plus debt acquired of £60 million
improved share of results of associates, partially offset by was funded by existing debt facilities and the issue of ordinary
higher finance costs. Adjusted profit before tax of £473 million shares to the seller.
(2016/17: £391 million) was higher due to the growth in adjusted
In addition the two box plants of the DPF Groupe in France were
operating profit.
acquired in the period.
The share of the profit of equity accounted investments was
Acquisitions in 2016/17 included Creo in the UK, Deku-Pack in
£5 million (2016/17: £3 million).
Denmark, Parish in the USA and GoPaca and P&I Display in Portugal.
The tax charge of £33 million was £23 million lower than the prior
year primarily due to the recognition of a reduction in current
Cash flow
and deferred tax liabilities as a result of the major tax reform in Closing net debt of £1,680 million (30 April 2017: £1,092 million)
the US. The Group’s effective tax rate on adjusted profit, excluding has increased year on year with outflows on strategic acquisitions
amortisation, adjusting items and associates was 22.5 per cent and borrowings acquired more than offsetting cash inflows from
(2016/17: 22.0 per cent). The adjusting items tax credit was £47 operating activities. Working capital outflows of £16 million are an
million (2016/17: £13 million), driven by a £37 million credit arising effect of higher input prices in inventory, offset by trade payables,
from the US tax reform in December 2017. and higher selling prices increasing trade receivables.
Reported profit after tax, amortisation and adjusting items was Capital expenditure net of asset disposals increased to £329
£259 million (2016/17: £208 million). million in the year (2016/17: £226 million). The Group capital
expenditure strategy of balancing asset renewal/replacement
Basic earnings per share were 24.9 pence (2016/17: 22.1 pence) and investment in growth and efficiency has been maintained.
despite higher amortisation and adjusting items, together with Growth and efficiency together account for 65 per cent of
the equity issues noted above. expenditure. Proceeds from the disposal of property, plant and
Adjusted earnings per share were 35.5 pence (2016/17: 32.5 equipment were £18 million (2016/17: £18 million), resulting in
pence), an increase of 9 per cent on a reported basis and 7 per cent profits of £1 million (2016/17: £14 million).
on a constant currency basis, driven by the growth in operating Net interest payments of £41 million were £4 million lower than
profit. Earnings per share were impacted in the period by the the prior year. Interest on the Euro Medium Term Notes (EMTN)
equity issue on 29 June 2017 which raised funds for the Interstate issued in July 2017 is payable annually, which accounts for the
Resources acquisition, that completed approximately two months majority of the difference between cash interest paid and
later on 25 August 2017, in addition to the equity issues to the finance costs in the income statement.
vendors of both Interstate Resources and EcoPack and EcoPaper.
Cash costs of adjusting items amounted to £80 million,
Dividend representing the cash investment in acquisition costs,
The proposed final dividend is 9.8 pence (2016/17: 10.6 pence), restructuring and infrastructure. Acquisition of subsidiary
which will be paid on 1 November 2018 to ordinary shareholders businesses, net of cash and cash equivalents (but before
on the register at close of business on 5 October 2018, including acquired debt), totalled £615 million in the year. No businesses
those shares to be issued in the rights issue. were disposed of in 2017/18.

Financial review continued
During the year dividends of £157 million, representing grade credit rating from Standard and Poor’s of BBB- which takes
the 2016/17 interim dividend and final dividend, were paid. into account all of the items excluded from covenant calculations
and working capital.
The £656 million cash generated from operations before
2017/18 2016/17
adjusting cash items and net acquisitions made in the year has Statement of financial position £m £m
contributed to a net cash outflow for the year of £652 million,
Intangible assets 2,043 1,178
compared to an inflow of £105 million in the prior year.
Property, plant and equipment 2,396 1,866
Loans and borrowings from acquired businesses were £204 Inventories 543 406
million. Net proceeds from the issue of share capital were £283 Trade and other receivables 870 769
million in the year, primarily due to the equity issue on 29 June
2017 which raised funds for the Interstate Resources acquisition. Cash and cash equivalents 297 139
Foreign exchange, fair value and other non-cash movements Other 180 135
increased net debt by £15 million. Total assets 6,329 4,493
2017/18 2016/17 Bank overdrafts (29) (16)
Cash flow £m £m
Borrowings (1,973) (1,263)
Cash generated from operations before Trade and other payables (1,719) (1,372)
adjusting cash items 656 695
Provisions (20) (29)
Capital expenditure (net of disposal of
Employee benefits (106) (181)
fixed assets) (329) (226)
Other (372) (277)
Tax paid (82) (61)
Total liabilities (4,219) (3,138)
Net interest paid (41) (45)
Net assets 2,110 1,355
Free cash flow 204 363
Cash outflow for adjusting items (80) (66) Net debt 1,680 1,092
Dividends (157) (121) Net debt to EBITDA ratio 2.2x 1.8x
Acquisitions of businesses (615) (71)
Energy costs
Other (4) –
Energy is a significant cost for the Group and gas, electricity
Net cash flow (652) 105
and diesel costs totalled £207 million in the year (2016/17: £179
Issue of share capital 283 13 million). Capital invested in combined heat and power facilities,
Loans and borrowings acquired (204) (14) lower prices and energy efficiency initiatives have all contributed
Other movements (15) (97) to the management of energy costs. The Group continues to
Net debt movement (588) 7 manage the risks associated with its purchases of energy through
Opening net debt (1,092) (1,099) its Energy Procurement Group. By hedging energy costs with
Closing net debt (1,680) (1,092) suppliers and financial institutions the Group aims to reduce the
volatility of energy costs and provide a degree of certainty over
Statement of financial position future energy costs.
Shareholders’ funds have increased to £2,109 million at 30 April Capital structure and treasury management
2018, an increase of £756 million over the reported position of the
The Group funds its operations from the following sources of
prior year. The improvement in shareholders’ funds is principally
capital: operating cash flow, borrowings, finance and operating
due to profit attributable to shareholders of £259 million (2016/17:
leases, shareholders’ equity and, where appropriate, disposals of
£209 million) and actuarial gains on employee benefits of £57
non-core businesses. The Group’s objective is to achieve a capital
million partly offset by income tax on items which will not be
structure that results in an appropriate cost of capital whilst
reclassified to profit or loss of £14 million. This net increase was
providing flexibility in short and medium-term funding so as to
further offset by the dividend payments of £157 million (2016/17:
accommodate material investments or acquisitions. The Group
£121 million). Equity attributable to non-controlling interests was
also aims to maintain a strong balance sheet and to provide
£1 million (30 April 2017: £2 million).
continuity of financing by having borrowings with a range of
The net debt to earnings before interest, tax, depreciation and maturities from a variety of sources, supported by its financial
amortisation (EBITDA) ratio, calculated in accordance with the covenants and investment grade credit rating.
Group’s debt covenants, was 2.2 times at 30 April 2018, up from
The Group’s overall treasury objectives are to ensure that sufficient
1.8 times at the previous year end. The Group is in compliance with
funds are available for the Group to carry out its strategy and to
all financial covenants, which specify an EBITDA to net interest
manage financial risks to which the Group is exposed.
payable ratio of not less than 4.50 times and a maximum ratio of
net debt to EBITDA of 3.25 times. This calculation excludes the The Group regularly reviews the level of cash and debt facilities
Interstate Resources put option which, if exercised, would required to fund its activities. At 30 April 2018, the Group’s
increase leverage to c. 2.4 times. committed borrowing facilities totalled c. £2.8 billion of which
c. £800 million were undrawn. Undrawn committed borrowing
The covenant calculations exclude from the income statement
facilities are held to provide protection against any refinancing risk
adjusting items and any interest arising from the defined benefit
on maturing facilities or deterioration in working capital balances.
pension schemes. At 30 April 2018, the Group had substantial
The Group’s committed borrowing facilities at 30 April 2018 had a
headroom under its covenants. The Group has an investment
38
Strategic report
weighted average maturity of 4.4 years (30 April 2017: 3.8 years). The net book value of goodwill and other intangibles at 30 April
The Group’s total gross borrowings at 30 April 2018 were £1,973 2018 was £2,043 million (30 April 2017: £1,178 million) with the
million (30 April 2017: £1,263 million). increase a result of the acquisitions of Interstate Resources and
EcoPack and EcoPaper in the year.
During the year, the Group issued €750 million and £250 million of
new debt under the EMTN programme. The proceeds were used Pensions
for the acquisition of Interstate Resources and to repay drawings The Group’s principal funded defined benefit pension scheme is
under the Group’s syndicate bank revolving credit facility. The in the UK and is closed to future accrual. The Group also operates
Group is committed to maintain its investment grade credit rating various local post-retirement and other employee benefit
from Standard and Poor’s and has structured the financing of the arrangements for overseas operations, as well as a small UK
recently announced acquisition of Europac to try and achieve this. unfunded scheme relating to two former directors and secured
The proposed acquisition of Europac for an implied enterprise against assets of the UK business.
value €1,904 million will be financed by the issue of new equity
(c. £1 billion) with the balance funded through new debt. It is IAS 19 Employee Benefits (Revised 2011) requires the Group to
expected that reported leverage (excluding the Interstate put make assumptions including, but not limited to, rates of inflation,
option) will be under 2.5 times at year end following the acquisition. discount rates and current and future life expectancies. The use
of different assumptions could have a material effect on the
The Group has for many years sold without recourse certain trade accounting values of the relevant assets and liabilities, which
receivables and on realisation the receivable is de-recognised and in turn could result in a change to the cost of such liabilities as
proceeds are presented within operating cash flows. These recognised in the income statement over time. The assumptions
arrangements have systematically reduced early payment involved are subject to periodic review.
discounts and have thus provided the Group with more economic
alternatives. The facilities available are committed for three years The aggregate gross assets of the schemes at 30 April 2018
and are not relied upon by the Group for liquidity. Balances have were £1,086 million and the gross liabilities at 30 April 2018
increased in the year to £559 million in line with the increase in were £1,192 million, resulting in the recognition of a gross balance
turnover derived from higher prices for our products and the sheet deficit of £106 million (30 April 2017: £181 million). The net
increase in the size of the Group. Similarly, during the year deficit was £80 million (30 April 2017: £139 million) after taking
inventories and trade payables grew by a similar amount into account deferred tax assets of £26 million (30 April 2017:
for the same reasons. £42 million).
Committed facilities and debt at 30 April 2018 A triennial valuation of the main UK scheme was carried out at
30 April 2016, following which a deficit recovery plan was agreed
Committed £ million
Facility Currency funds million Maturity equivalent with the Trustee Board on 28 April 2017. The Group agreed to
Syndicated bank RCF GBP 800 2020 800 increase existing annual cash contributions under the deficit
recovery plan by 10 per cent per annum commencing with
EMTN EUR 1,250 2022-24 1,100
2016/17. The recovery plan is expected to be completed
EMTN GBP 250 2029 250
on or around November 2025.
Term loan facilities EUR 270 2018-21 237
Private placement EUR 118 2018-20 104 The total cash contributions paid into the Group pension schemes
were £25 million in 2017/18 (2016/17: £17 million), principally
Private placement USD 380 2017-22 2891
comprising £20 million (2016/17: £16 million) in respect of the
Total 2,780
agreed contributions to the pension scheme deficit (for the
1. Net of cross-currency interest rate swaps deficit recovery plan) and are included in cash generated from
operations. During the year, the Group reached an agreement
Impairment
regarding contributions made in respect of unfunded pension
When applying IAS 36 Impairment of Assets, the Group compares arrangements. There is no impact on the gross liabilities in
the carrying amounts of goodwill and intangible assets with respect of these arrangements, and a gain of £4 million has been
the higher of their net realisable value and their value-in-use recognised. The reduction in the gross balance sheet deficit of
to determine whether impairment exists. The value-in-use is £75 million is principally attributable to an increase in discount
calculated by discounting the future cash flows expected to rates and a reduction in inflation assumptions in the main
be generated by the assets or group of assets being tested for UK scheme.
impairment. In April 2018 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 weighted average cost of capital of 8.8 per cent Adrian Marsh
plus a blended country risk premium of 0.7 per cent. No impairments
Group Finance Director
were identified as a result of the testing.

Principal risks
Supporting effective planning

and quality decision-making
At DS Smith we believe that robust risk management drives better commercial
decisions, contributes to our strong growth and provides a platform for all our
businesses to become more resilient and sustainable.
2017 was a year where external risks increased and our internal Risk heat map
risks required careful attention. Despite this we identified a The results of our risk assessment process is presented below.
number of opportunities, including in north America, where our
disciplined approach in balancing the right risks against identified
Consider alternatives Re-evaluate
opportunities enabled us to remain on our strategic path. The
continued uncertainty around the UK’s exit from the EU and
geo-political tensions generally, when set against the Group’s risk
tolerance levels, meant that we continued to be selective with our
investments. We are however still confident that the underlying
fundamentals of our markets reflect sustainable growth and we
2
expect this to outweigh much of the near-term global uncertainty.
Post-acquisition integration
Our geographical footprint and the cross section of cultures
in which we operate broadened during the year. While we 6
recognised the potential for disrupting the consistency of 3
DS Smith’s offerings, we also saw that significant value could 10
be gained by harnessing this diversity to help strengthen our
12 7
approach across all our markets. Understanding the right cultural
signals has been a key component in how we manage and integrate
Net risk impact
9 5 1
our internal supply chain and businesses. We continue to listen, 4 11 8
learn and adapt our ‘Day One’ conferences and cultural awareness
programmes. We are pleased with the results achieved to date, Monitor Maintain/Progress
ensuring that our processes retain integrity and responsiveness,
and promote recognition whilst maintaining consistently high Net opportunity impact
quality as we grow. 1 Acquisition strategy 7 Changes in shopping habits

2 Eurozone and 8 Talent barriers
We are satisfied with the way our acquisition processes macro-economics 9 Digital vulnerabilities
have embedded risk assessments into the fabric of our due 3 Paper supply 10 Fibre technology
4 Capital markets and liquidity 11 Sustainability
diligence processes. Our work undertaken during the acquisition 5 Market consolidation 12 Strategic process change
of Interstate Resources provided us with growing confidence 6 Governance
that our procedures in this key strategy area remained robust
and appropriate. Internal processes
Principal risks Internally, we have added resources to strengthen our
governance teams and invested in them to create a stronger
The details of our principal risks and uncertainties and the key
compliance and risk framework to ensure there is both appropriate
mitigating activities put in place to address them can be found
and rigorous management of this increasingly important part of
on pages 42 to 45. We disclose those risks we believe may
our business.
have the greatest impact on our Corporate Plan. These have
been the subject of discussion at Audit Committee meetings Throughout the year we have challenged our businesses
during 2017/18 and reflect the importance we place in to improve the quality of risk information provided, whilst
managing these risks. maintaining a simple and practical approach through our planning
process. We have been particularly pleased with the participation
Our Group continues to be exposed to a wide range of political,
and detailed discussion held across our Supply Engine and north
market and macro-economic risks in addition to those listed in this
American businesses regarding the nature and extent of their
report. These other risks are monitored as part of our standard
key risks. This has helped to enhance our understanding of our
operating processes for any change to ensure that appropriate
changing business risk profile, as well as informing us of emerging
mitigations are in place as part of regular management reviews.
risk areas. Improvements in our controls for managing operational
Whilst our capacity to influence external risks is often limited, we
risks ensured that we both implemented and maintained risk
recognise the importance of operating a business model that can
resilience across our integrated supply chain.
quickly flex and adapt to a changing environment.
40
Strategic report
Horizon scanning evolution in the footprint of the Group, which limits the Directors’
Looking ahead, our external risk landscape will continue to evolve, ability to predict beyond this period reliably. The Corporate Plan
but we are of the view that this will create new opportunities for process is led by the Group Chief Executive, the Group Finance
all our businesses. This year we have seen many of our customers Director and the Head of Strategy, in conjunction with divisional
seeking our assistance to help them manage the growing management. The Board engages with the process through
consumer concerns with ‘Blue Planet’ plastics. At the same time a detailed review at their April Board meeting.
there is increased recognition by our customers of the positive The finalised Corporate Plan forms the backbone of the Group’s
benefits of our returnable plastic packaging. In the medium term strategy and a measure against which performance is assessed.
we envisage greater technological disruption in our industry Monthly trading performance is reviewed in the context of
including the adoption of alternative uses and sources of fibre. Corporate Plan objectives on a monthly basis by both the
These provide both threats and opportunities as we, and others, senior management team and the Board when it meets.
seek to secure competitive advantage and/or create new markets
for our products and services. In the longer term, social pressures Assessment of longer-term viability
to improve and manage areas of environmental risk can be In accordance with the revised 2016 UK Corporate Governance
expected to increase. Code, the Directors have assessed the viability of the Group over
a three-year period to 30 April 2021, which is a longer period than
Developments in risk management the 12 month outlook required in adopting the going concern basis
Our risk management organisation remained largely unchanged of accounting.
throughout 2017/18. The Group’s risk policy was reviewed and
The three-year time period was considered appropriate given
adapted to reflect the growing partnership between our Group
the time scale of the Group’s planning and investment cycle,
risk and strategy functions.
the evolution of the Group over the last three years, and the
We have long believed that well-managed risk-taking activities medium-term nature of our pan-European customer relationships.
form the basis of how we deliver on our Corporate Plan. Strong risk
The Directors confirm that they have performed a robust
management drives better commercial decisions and this year we
assessment of the principal risks facing the Group as detailed
have promoted this in a number of key areas across our packaging
on pages 42 to 45, including those that will threaten its business
division. We are pleased with the initial results and expect more
model, future performance and solvency or liquidity.
to be achieved as this is embedded in our commercial ventures.
The assessment of the Group’s viability considers likely downside
Anti-bribery and corruption policy sensitivities (including mitigating actions), both individually and
The Group has zero tolerance for bribery and corruption in combination. Downside sensitivities selected are severe but
issues and key components of the Group’s Code of Conduct plausible scenarios aligned to the principal risks and uncertainties
and compliance regime are the specific policies on Bribery and set out on pages 42 to 45 where the realisation of these risks is
Corruption, Gifts and Entertainment and its “Speak Up!” policy. considered more than remote, taking into account the effectiveness
The Group conducts annual training on bribery and corruption, of the Group’s risk management and control systems and
as well as ensuring that this is given promptly to new businesses considering current risk appetite. The degree of severity applied to
joining the Group. Work around reviewing and limiting the use the sensitivities was based on historical extremes and the Directors’
of agents by the businesses is also an increasing area of focus. assessment of plausible movement in assumptions. Sensitivities
considered included a significant increase in input costs, a prolonged
2017 saw the introduction of a twice yearly ethics report to the downturn in paper price, significant adverse foreign exchange
Audit Committee, as well as a half yearly Group policy compliance movements, significant drops in Packaging volumes and annually
certification for management and those who have a customer or recurring and debt funded spend on bolt-on acquisitions.
supplier facing role in the business.
The Group has significant financial resources including committed
Viability statement and uncommitted banking and debt facilities, detailed in note 19.
Context In assessing the Group’s viability, the Directors have assumed that
The Group’s strategy and key differentiators are detailed on the existing banking and debt facilities will remain in place or
pages 2 and 13, and our risk management framework is described mature as intended.
above. Understanding of our business model, our strategy and our
The Directors have also considered mitigating actions available to
principal risks is a key element in the assessment of the Group’s
the Group to respond to the stress scenarios such as restrictions
prospects, as well as the formal consideration of viability.
on capital investment, further cost reduction opportunities and
The Group’s Corporate Plan cycle is the primary annual strategic restricting dividend growth. The Directors have assumed that
and financial planning activity through which the Board assesses these mitigating actions can be applied on a timely basis and at
the prospects of the Group. This comprises preparation of detailed insignificant or no cost.
financial forecasts and objectives for the three-year period
Confirmation of viability
covered by the Plan, together with a detailed explanation of the
Based on the analysis, the Directors have a reasonable
key assumptions and considerations embedded in the plan, the
expectation that the Group will be able to continue in operation
most important of which are paper prices, foreign exchange rates
and meet its liabilities as they fall due over the three-year period
and packaging volume growth. The three-year period was chosen
of their assessment.
considering the speed and degree of change possible in the key
assumptions influencing the Group, as well as the speed of
Principal risks continued
Gross Net Link to Risk

Principal risks impact impact strategy appetite Threats
1. Acquisition To double • Our acquisition growth does not support our

strategy our size and pan-European and FMCG customers as they
Our growth strategy is profitability seek to develop a more global supply chain.
designed to create better • Acquisitions fail to address key areas of
value through economies vulnerability in our integrated business model
of scale and by adding new and in particular do not address security of
products and services to our supply through adequate integration.
existing supply cycle network.
2. E
urozone and macro- To double • Weak consumer demand may slow down growth
economic markets our size and in the Eurozone (France, Germany and Italy).
Exposure to multiple political profitability
• Adverse exchange rate positions may create
and economic factors could unpredictable pressures on pricing for our
impact consumer disposable key commodities.
income and/or the level of
• The UK’s exit from the EU might require
industrial activity.
unprecedented adjustments to our business
model that we may not have foreseen.
3. Paper supply To double • Our short paper supply strategy may leave the
Large fluctuations in the our size and Group over-exposed to the threat of significant
demand and supply dynamics profitability commodity price volatility.
of fibre and the economic • Unanticipated and prolonged price increases of
consequences of this can specific paper grades sourced externally, which are
affect our long-term position required to meet the demands of the packaging
as a net purchaser of paper division Performance Assurance Consistency
from third party suppliers. Environmental project.
4. Capital markets To double • Continued uncertainty about how the UK’s exit
and liquidity our size and from the EU might be implemented.
Political, economic and profitability
• Failure to meet funding needs at favourable
credit impacts may have debt terms.
an adverse effect on our
growth financing.
5. Concentration To double • Our weaker competitive position may decrease sale

and consolidation our size and volumes and margins.
of markets profitability
• Competitors may succeed in imitating our
Market consolidation integration model that challenges our supply
may create larger and more cycle business model.
focused competitors which
• We may face a ‘perfect storm’ scenario where
would weaken our position
customers, suppliers and competitors dominate.
and bargaining power.
6. Governance To delight our • Direct intervention due to anti-trust concerns.

and compliance customers
• Cultural differences in newly acquired businesses
Non-compliance with local may challenge the Group’s business ethics.
laws or regulations may
• Greater constraints on handling food due
damage our corporate
to contamination risk may require significant
reputation and subject
changes to product design and manufacturing.
the Group to significant
financial penalties.
42
Net risk appetite key Risk impact key
Strategic report
Acceptable Re-assess Unacceptable Increased Stable Decreased
Opportunities Management controls Board reviews

• We could succeed in entering new key • We have a diverse acquisition strategy which • Updates from the Group Chief Executive
markets and targeting growth areas. includes bolt-on transactions. on progress on the acquisition strategy
were reported at each Board meeting.
• We continue maintaining a positive track • Through the Group Strategy Committee, the paper
record across small and large transactions. division has clear overseas targeted investments • Specific M&A activity reviews were
in key markets and geographies (including the US). held quarterly throughout the year.
• The Board received detailed updates
on the Interstate transaction process.
• Opportunities to reposition our business • Management teams continue to lead • At each Board meeting the Group Chief
model outside of our traditional markets. projects based on cost optimisation and Executive and Group Finance Director
operational efficiency. presented reviews and forecasts on the
• Opportunities to re-adjust sources
impact of a macro-economic environment.
of supply. • We continue to invest in a strategy to address
any long-term Eurozone currency imbalances by • The Board held discussions on the
• Opportunities to prioritise cost
managing impacts of short-term slower-growth potential implications of the UK’s exit
optimisation and efficiency improvements
markets in higher-growth geographies. from the EU.
across all divisions and Group functions.
• Improving supply chain performance • Enhancing the integration approach to all recycled • The Board regularly discussed M&A
by exploring our closed-loop and short- paper/kraft paper across all geographies. opportunities with a particular focus on
paper strategy. security of supply including the positive
• Considering kraft paper opportunities via further
effect of the Interstate Resources and
• Accessing additional recycled paper acquisition or commercial contracts with European
EcoPack and EcoPaper acquisitions.
material outside of the UK. and US partners.
• The Board considered the evaluation of
• Improvements in our internal supply • Adopting innovations including the use of mixed
existing market supply of kraftliner and
of kraft paper from the Riceboro Mill. paper in our mills, fibre mining technologies, and
other paper grades.
extraction of clean fibre.
• Securing access to suitable sources • The Group has access to bank funding from its • The Audit Committee regularly reviewed
of debt capital through effective active Revolving Credit Facility, maturing in May 2020. liquidity schedules, exchange rates, cash
management of our core banking partners. flows and covenant headroom.
• Additional funding is available from other
• Becoming a constituent of the FTSE 100 three-year facilities. • The Group Finance Director regularly
Index helps us to build greater liquidity updated the Board on finance options,
• We have extended maturities on our debt by
with institutional and equity investors. including Euro-financing arrangements,
raising longer dated debt in the bond markets.
and new debt financing arrangements.
History of successful equity issuance.
• Exploring a broader footprint for our • An organisation structured to actively manage • The Group Finance Director provided the
packaging business. strategic segments for display and heavy duty Board with regular updates on market and
as well as consulting services. competitor activity.
• Assessing attractiveness of emerging
markets, given their growing populations, • Regular review and updates of the global value
economies and increased demand for proposition for target customers.
branded consumer goods.
• Active project management focused on cost
optimisation and footprint improvements.
• An opportunity to demonstrate a • Adoption of new policies and a thorough review • The Audit Committee regularly reviewed
standard of ethics and behaviour well of all existing Group policies. results of the internal control reports.
above expectations of all stakeholders. At every meeting the Board received an
• Deployment of compliance as a core management
internal corporate governance update.
• Enhanced collaboration with peers and standard and structured training across the Group.
stakeholders to monitor the implications • Audit Committee received reports on
• Engaging external advisers to undertake
of change in the regulatory landscape. ethics and compliance.
compliance and certification testing.
• The Board discussed anti-tax evasion
legislation, GDPR and modern slavery.

Principal risks continued
Gross Net Link to Risk

Principal risks impact impact strategy appetite Threats
7. C
hanges in To double • Our customers may reject our e-commerce
shopping habits our size and proposition.
Our investments in profitability
• We may not be quick enough to adapt to changes
innovative packaging fail in use of substitute products.
to match expected growth
• Innovation may not be a sufficient driver to
in consumer spending.
traditional single use and recyclable packaging
to broaden our offering in existing markets.
8. Talent barriers To realise the • Weaknesses in our organisation fail to drive

Despite our commitment potential of innovation, manage change and engage
we may fail to retain, engage our people our workforce.
and develop productive • We do not harness agile working practices across
workforce and to develop our internal talent pool.
key talent.
9. Digital vulnerabilities To delight our • Our inability to anticipate the shift in consumer
Inability to integrate our customers buying habits influenced by digital technologies.
digital printing technology • Our inability to adopt technology quickly
and to protect our key enough to maintain innovative growth for
IT infrastructure. our packaging business.
• Cyber-attack hinders the integrity of our
business systems.
10. Changes in To double • Our inability to adapt to rapid technological changes

fibre technology our size and in new fibre recovery, fibre/paper technology or
We may fail to exploit major profitability packaging material technology.
developments in fibre usage • Our failure to manage a material decline in fibre
or substitution. quality, and leakage of fibre to other applications.
11. Sustainability To lead • Inability to manage energy demand needs within

We may under deliver the the way in our sustainability targets.
required level of transparency, sustainability
• Shift in recycling behaviour and consumer demand
clarity and commitment may hinder our competitive edge.
to sustainability.
• Ownership of a kraft mill brings new sustainability
challenges through forest ownership.
12. Strategic To double • Unanticipated and protracted recovery due to

process change our size and a failure of our critical business processes.
Investments focusing profitability
• Failure of strategic process change or system
on new energy initiatives implementation failure.
(e.g. ‘perfect box’) may fail
to deliver expected returns.
44
Net risk appetite key Risk impact key
Strategic report
Acceptable Re-assess Unacceptable Increased Stable Decreased
Opportunities Management controls Board reviews

• Identifying early signs of growth • Progressing innovation in e-commerce, • The Board received a technical innovation
opportunities by actively engaging bricks and mortar, digital world and the presentation on specific packaging sectors
with our customers. consumer’s experience. with regards to e-commerce.
• Exploring new opportunities in the • Managing ‘front end’ supply chain services with • The Board considered customer shopping
packaging business as an alternative FMCG, industrial, heavy duty and display markets. habits as part of Group Strategy review.
to single use plastic packaging.
• Extending e-commerce skills across the European
packaging business and strengthening
e-commerce in the US.
• Developing employee centred mobile • Succession planning, international job rotation and • The Nomination Committee regularly
processes through the use of global IT talent pipeline. reviewed Board succession planning
systems to ensure effective use of skills and talent management.
• Managing our critical talent recruitment
and resources.
programme across our packaging academies. • The Group Chief Executive
• Attracting young talent through DS Smith updated the Nomination Committee
• Implementation of DS Smith Management
Charitable Foundation work and our on senior management and talent
Standards enhancing how people are managed
partnership with the EY Foundation. management programmes.
and developed.
• Enhancing our e-commerce and digital • Improving our awareness programme on security • The Board reviewed digital vulnerabilities
technology competencies. threats and best practice. as part of the Corporate Plan process.
• Adding value by focusing on IT eco- • The IT optimisation programme continued to drive
systems and a digital strategy to support improvement in cyber skills and defences.
long-term customer partnerships.
• Enhancing strategic alliances • Additional investments in research and • The Board regularly discussed the security
with universities and paper development of fibre recovery, pulping, of supply of existing materials as part of
machine manufacturers. papermaking and performance packaging. M&A updates.
• Exploring the use of virgin fibre in a • Improving the management of maximisation • The Board received a presentation
sustainable manner, including production of fibre efficiency. on technical innovation in packaging.
of kraft substitute and kraft top products.
• Implementation of a clean energy strategy • Continued disclosure of our sustainability data to • The Board received updates on Group
(‘Energy from Waste’ project at Kemsley). provide visibility and assurance to our stakeholders. sustainability performance.
• Listening to our stakeholders and • Further investment to improve management
encouraging wider engagement. capabilities in sustainability operations.
• Internal sustainability KPIs to track measures
important to our key stakeholders were set.
• Enhancing the effectiveness of fibre and • All mills operations based on clearly defined asset • The Group Chief Executive and Group
other efficiency programmes. management techniques. Finance Director presented the Board with
regular updates on the progress of the
• Improved project management approach to
support function review implementation.
process change initiatives.

Introduction to Corporate Governance
This section sets out our corporate governance processes and the role
they play in supporting the delivery of our strategy.
Diversity
“The Board this year There has been a continued focus on diversity during the year
has maintained its with the publication of the Hampton-Alexander review, the
particular focus on McGregor Smith and Parker reviews during 2017 and the new
the Company’s strategic requirement for companies to publish gender pay gap information.
direction and on The Board and I support the increased spotlight on this area and
driving the creation of are committed to improving diversity throughout the Company,
not just with regards to gender and ethnicity, but in the broader
sustainable long-term
sense to include diversity of thought, tenure, age, experience,
value for shareholders.”
skills, geographical expertise, education and
professional background.
Studies have shown that diversity can add value to boards and
their decision making. The Board has reviewed our progress
towards becoming a more diverse and inclusive business.
Board composition
Part of my role is to keep the membership of the Board and its
range of skills under review. Ian Griffiths is stepping down as a
Gareth Davis – Chairman non-Executive Director with effect from 28 June 2018 and I would
like to take this opportunity on behalf of the Board to thank him
for his insightful contribution over the last three years. A search
Introduction for two new non-Executive Directors to join the Board is under
It has been a year of considerable success, with DS Smith being way. We are looking to appoint outstanding candidates with a
admitted to the FTSE 100 Index. This elevation is a reflection of diverse range of experience, to maximise Board effectiveness.
the excellent performance of all our employees, our consistent
organic growth and our proven expertise in External evaluation of Board effectiveness
integrating acquisitions. In January this year, I commissioned an externally facilitated
review of the Board and its committees to provide external input
I recognise that with increased success comes increased scrutiny.
into their functioning and to identify ways in which to enhance
I speak for all the Board when I say we are committed to the
our overall effectiveness. Details of the process, outcomes and
highest ethical standards. These apply in the way in which we
actions are set out on page 58.
engage with each other, our customers, employees, shareholders,
suppliers and other stakeholders. Our reputation as a Group is Culture and values
founded on always meeting these high standards. Fostering As Chairman, I am responsible for establishing and embedding the
the right culture at DS Smith is critical to our success. culture of the Board, which in turn sets the tone from the top for
the culture of the Company.
Governance code
I firmly believe that good corporate governance is critical in New ambitions for our business require a shift in how we
helping to build a successful business in a sustainable manner. lead and manage our people. Earlier this year we launched our
During the year there have been various new regulations that the Management Standards which set the foundation for a common,
Board has taken into account and they are covered in this report. core and consistent view of what good management looks like
The Board has discussed means of fostering a more meaningful for DS Smith. As part of this process, we carried out a review of
engagement between the Board and our workforce, in line with our Group policies to better align them with the ever changing
forthcoming Financial Reporting Council governance changes, legal and regulatory environment. You can read more about
and I look forward to updating you on these initiatives next year. this on page 54.
46
Shareholder and wider stakeholder engagement Compliance Statement
Governance
The Group’s key stakeholders and their differing perspectives The Board is committed to strong governance and during the
were identified and taken into account as part of the Board’s year the Company has complied with all the provisions of the 2016
strategy and corporate plan discussions. These discussions UK Corporate Governance Code (Governance Code). This report
centred not only on delivering increased value for shareholders outlines how we have applied the Governance Code’s main
but also assessed the impact on the Group’s wider stakeholders. principles. Published by the Financial Reporting Council, the
Details of the Group’s key wider stakeholders and the value of Governance Code is available at www.frc.org.uk
the strategy for them is set out below. The Board recognises
the importance of regular, open and constructive dialogue Leadership
with shareholders and other stakeholders and this has long Your Board rigorously challenges strategy, performance,
been a key aspect of our culture and decision making. More responsibility and accountability to ensure that every decision
information about how we engage with our stakeholder we make is of the highest quality.
audience is set out on pages 59 and 60.
From page 54
Effectiveness
Your Board continuously evaluates the balance of skills,
experience, knowledge and independence of the Directors.
We scrutinise the effectiveness of our performance in an annual
Board evaluation and ensure that all new Directors receive a
Gareth Davis
tailored induction programme.
Chairman
From page 58
17 June 2018
Accountability
All of our decisions are discussed within the context of the risks
involved. Effective risk management is central to achieving our
strategic objectives.
From page 40
Remuneration
Having a formal and transparent procedure for developing policy
on remuneration for Executive Directors is crucial. Our remuneration
policy aims to attract, retain and motivate by linking reward
to performance.
From page 68
Relations with stakeholders

Maintaining strong relationships with our shareholders, both
private and institutional, is crucial to achieving our aims. We hold
events throughout the year to maintain an open dialogue with
our investors.
From page 59

Leadership Conversation with the Board
The Directors talk about their approach to governance

and what influences them.
What considerations and steps has DS Smith Does DS Smith have diversity initiatives
taken towards effective engagement with and are they linked to the organisational
wider stakeholders? strategy?
I have always found DS Smith to be committed DS Smith is a diverse and growing company.
to maintaining good communications with Our businesses operate in many different
stakeholders. The employee engagement survey countries and we have colleagues with different
is a very effective way of gauging what employees backgrounds and experiences. Everyone has
think is working and more importantly what is not something to bring because there’s no such
working. There is an effective and empowered employee thing as universal experience. Companies with diverse
voice. Employees’ views are sought out, they are listened management do better, so it’s in our interests to make sure
to and they see that their opinions count and make a that when we recruit, whether onto the Board, into senior
difference. The Board level discussions around how these management or more widely, our workplaces better reflect
opinions should be addressed is always very stimulating. our society.
As a business, DS Smith works closely with the communities Diversity is not just a ‘women’s issue’, or a ‘racial issue’ or an
in which it operates. Although it is a global company, it is also ‘educational issue’. It’s something that we all benefit from.
a very local company. As a responsible corporate citizen Diversity isn’t a box-ticking exercise. You can’t just fill quotas
DS Smith is aware of its potential to have a far reaching of people who all look a little bit different and expect the
impact beyond the factory walls. The business occupies an magic to happen if they all happen to think alike. Real
important place within the communities where it operates, diversity means people with different backgrounds,
creating value through business operations and prosperity different ways of looking at the world, different interests
for shareholders. As a major employer, DS Smith has the and insights. And it means everyone respecting and
capacity to affect the lives and livelihoods of thousands seeing the value in thinking that differs from their own.
of people. Through global distribution networks DS Smith
interacts indirectly with millions of consumers worldwide
every single day. As a Group, DS Smith is committed to
engaging with all of these external stakeholders and
to ensuring that the influence it has is positive and
mutually beneficial.
What makes the DS Smith’s business model How does the Board monitor and challenge
successful and how does it align with the the implementation of remuneration
Company’s purpose and values? policy and its alignment with the
Company’s strategic objectives?
Anyone who has ever heard me speaking The landscape for executive pay is continually
about DS Smith knows that I think this is a changing. Executive pay and gender pay gaps are
great company by any measure. DS Smith is at root an issue of fairness. Last year I worked
driven by the needs of our customers. From with the Remuneration Committee and its
design to production and supply to recycling, advisers to produce a clear remuneration policy
we offer integrated solutions that address the entire that promotes the long-term success of the Company. This
supply cycle, creating simplicity from otherwise complex policy was adopted by shareholders with a 96.96% vote
structures. We work to leverage our scale and geographic in favour at the AGM in 2017. As a modern employer, the
footprint to supply our customers with the innovative Company takes its responsibilities under the new gender
products they demand, with a level of service and quality pay regulations very seriously.
that sets us apart from our competitors.
The Remuneration Committee continued to ensure that
We believe in ‘Leading by Listening’. We listen to what decisions made during the year reflected our principles,
our customers want, rather than what the industry has Company performance and external considerations. The
historically offered. That is why at DS Smith we talk about importance of aligning our remuneration arrangements
lightening the load for our customers. If we listen to our with our strategic priorities played a crucial role in the
customers, we’ll find out what they want, and then we Committee’s decision-making during the year.
can become the leader they are looking for.
48
When looking at new appointments to the Operating in multiple jurisdictions with varying
Governance
Board and succession planning more generally, legislative, social and cultural issues, to what
what do you think makes an effective leader? extent is the ‘right thing to do’ guiding the
Board’s thinking as well as what is right legally?
Change these days happens more quickly and Complying with the law and “doing the right thing
more frequently and leaders need to be able without question” is an integral part of the culture
to create conditions that encourage purposeful and values of DS Smith and this will become even
innovation and the ability to adapt as and when more relevant as the reputation of our business
necessary. So when we are recruiting I would say grows and we continue our expansion into new
that we should always be looking for agile leaders, people markets and geographies.
who display some common traits.
It is important for all of our employees as well as protecting
Agile leaders demonstrate humility. They are able to the Company. As DS Smith is now a FTSE 100 company and
accept feedback and acknowledge that others might know continues to grow, we are subject to greater scrutiny, as
more than they do. They are adaptable. They accept that well as being subject to greater regulatory requirements.
change is ever present and dynamic and that changing their Abiding by a compliance framework allows us to give all our
minds based on new information is a strength rather than stakeholders confidence in DS Smith and avoid breaching
a weakness. They should be visionary, be someone with rules and regulations, which could lead to both corporate
a clear sense of long-term direction, even in the face of and personal liability.
short-term uncertainty. I look for someone who is engaged.
Someone with a willingness to listen, interact and
communicate with internal and external stakeholders,
with a strong sense of interest and curiosity in
emerging trends.
What makes DS Smith’s governance How does DS Smith’s governance support the
framework effective? strategic goals?
DS Smith keeps its governance framework under In the last year, the Board looked at a number of
review to ensure it enhances the Board’s ability acquisition prospects, two of which, Interstate
to exercise proper oversight. Governance is an Resources and EcoPaper and EcoPack, completed
important element of the Board environment. To during the year. In both cases there were early
support how DS Smith does business and how the discussions around the rationale for the
Company serves stakeholders it needs to be relevant, authentic transaction, the potential synergies, the key risks and
and meaningful. As a Board we regularly discuss the evolving the key financial considerations. Management and the
regulatory environment and the internal governance processes Board’s advisers produced a number of detailed papers
underpinning programmes and initiatives. to help the Board consider various aspects of the
acquisition opportunities.
The governance process is simply the set of rules and
procedures through which DS Smith is guided and controlled As a Board we discussed if these transactions would
and it applies throughout the organisation. Every local support the Company’s longer-term strategic ambitions
business makes sure they have something in place that and deliver financial returns for shareholders and positive
delivers full compliance both with local laws as well as wider benefits for other stakeholders. I was particularly impressed
regulations. Doing so ensures that decisions are taken by the detailed planning and preparation carried out by the
at the right time and at the correct level of the business integration team.
after the consideration of all relevant factors, ranging
from commercial value to reputational risk.

Effectiveness Nomination Committee report
The right skills, experience, independence and knowledge

to embed the right culture.
Membership and operation of the Committee

“The Committee Member Since
continues its work of Gareth Davis (Chair) 2010

ensuring the Board Chris Britton 2013
composition is right, Ian Griffiths 2014
that our governance Jonathan Nicholls 2009
is effective and that Kathleen O’Donovan 2012
succession is properly Miles Roberts 2010
planned for.” Louise Smalley 2014
The Group General Counsel and Company Secretary acts as Secretary to

the Committee.
Details of individual Directors’ attendance can be found on page 55.
Succession and diversity at Board and senior management levels

Gareth Davis – Chairman are key aspects of our agenda. Our priorities over the year were
as follows:
Key objective of the Nomination Committee • Following Ian Griffiths’ decision to step down from the
To make sure the Board comprises individuals with the Board in June 2018, to scope out the key skills, experience,
necessary skills, knowledge and experience to ensure that characteristics and requirements for two new
it is effective in discharging its responsibilities and has non-Executive Directors.
oversight of all matters relating to corporate governance. • To keep under review succession planning at the Executive
Director level and support succession planning at senior
Key responsibilities management levels.
• Reinforcing the culture and diversity expertise in • To review the skills matrices of the senior management team
the Board’s composition and maintaining ongoing following the Interstate Resources acquisition.
succession plans. • To review our progress on becoming a more diverse and
• Considering ways to improve diversity in the pipeline for inclusive business.
senior management roles.
• Further strengthening of the senior management team.
Succession planning
• Reviewing the Group’s talent management process. The Board takes succession planning for both Board members and
senior management very seriously. During the year, the Committee
held four formal meetings and there were regular updates.
Ian Griffiths, who has been a non-Executive Director of
DS Smith Plc since June 2014, decided to step down from the
Board from 28 June 2018. Given the growth of the Group and its
Allocation of time
increasing international presence, the Nomination Committee is
erformance
P looking to further strengthen the Board with the appointment of
evaluation: 10% two new non-Executive Directors. The Committee discussed the
Succession planning: 25% preferred skills and experience for the role specifications and
Talent pipeline: 25% considered the need for a robust selection process, facilitated
Diversity: 25% by independent executive search consultants. We then invited
Governance: 15% recruitment firms to participate in a selection process focusing
on a series of key questions in order to identify the appropriate
consultants to support our search. The Committee discussed the
responses and selected Russell Reynolds Associates. Aside from
assisting with recruitment, Russell Reynolds Associates has no
other connection to the Company.
In line with best practice, during 2017/18 the Nomination
Committee has also been exploring the contingency plan for
unexpected departures and reviewed the Group Chief Executive’s
succession plan. The plan envisages the role being filled by either
50
internal or external candidates and this discussion will be revisited can and should be able to realise their full potential in DS Smith
Governance
in 2018/19. without experiencing inequality and unfairness on any grounds.
Diversity Independence and re-election of Directors

DS Smith acknowledges the importance of diversity and inclusion The Board is satisfied that all of its non-Executive Directors
to the effective functioning of the Board. This includes diversity bring robust independent oversight and continue to remain
of skills and experience, age, gender, disability, sexual orientation, independent. Biographical details of each Director can be
cultural background and belief. Currently, 25 per cent of our Board found on pages 56 to 57. An evaluation of the performance
roles are held by women. Our Directors have experience of a wide of the Board was carried out by an external facilitator. More
range of industries and backgrounds, including FMCG, consumer information about this process and the resultant action plan
products and financial services, as well as complex organisations can be found on page 58.
with a global reach. Our Board diversity statistics can be
Both Ian Griffiths’ and Louise Smalley’s letters of appointment
found below.
expired on 24 June 2017. The Nomination Committee reviewed
I believe that diversity should extend beyond the boardroom and so their commitment and contribution to the Board at the time and
the Nomination Committee supports management in its efforts to was satisfied that their letters of appointment should be renewed
build a diverse organisation. In preparation for the first gender pay for a further three-year term.
gap reporting in April 2018, which is available on our website, we
Following these evaluations by the Nomination Committee,
looked at any factors that might lead to a gender pay gap across the
the Board recommends the re-election of all the Directors
Group. Through our internal initiatives, we have been exploring the
who are standing for re-election at the 2018 Annual General
creation of a programme which aims to bring talented women back
Meeting (AGM). Details about the Directors, including their
into the workplace after a career break and to increase the number
other directorships, can be found in their biographies
of women in management roles. For us, it is all about merit. Anyone
on pages 56 and 57.
Board gender diversity

Female: 25%
Male: 75%
Gareth Davis
Chairman
17 June 2018
Board tenure
4 – 6 years: 62%
7 – 9 years: 38%
Board composition
Executive: 25%
Non-Executive: 75%

Leadership Role and responsibilities of the Board
Our governance structure unpacked.
The Board
The Board is collectively responsible for the long-term success of the Group and for ensuring leadership within a framework of effective controls.
The key roles of the Board are:
• Setting the strategic direction of the Group.
• Approving the strategy.
• Overseeing implementation of the strategy by ensuring that the Group is suitably resourced to achieve its strategic aspirations.
The Board considers the impact of its decisions and its responsibilities to all of the Group’s stakeholders. Read about our key stakeholders on pages 59 and 60.
Chairman Senior Independent Director Non-Executive Directors

• Leads the Board, sets the agenda and • Provides a sounding board to the Chair and • Contribute to developing our strategy.
promotes a culture of open debate between appraises his performance. • Scrutinise and constructively challenge
Executive and non-Executive Directors. • Acts as intermediary for other Directors, the performance of management in
• Regularly meets with the Group Chief if needed. the execution of our strategy.
Executive and other senior management • Available to respond to shareholder
to stay informed. concerns when contact through the
• Ensures effective communication with normal channels is inappropriate.
our shareholders.
Audit Committee Remuneration Committee Nomination Committee

Oversees and monitors the Company’s Reviews and recommends the framework Reviews the structure, size and composition
financial statements, accounting processes and policy for the remuneration of the of the Board and its Committees.
and audits (internal and external). Chairman, the Executive Directors, the Identifies and nominates suitable candidates
Company Secretary and senior executives.
Controls matters relating to fraud and to be appointed to the Board and reviews the
whistleblowing reports received via Considers the business strategy of the Group talent pool.
“Speak Up!”. and how the remuneration policy reflects Considers wider elements of succession
and supports that strategy. planning below Board level, including diversity.
For more information see page 64 For more information see page 68 For more information see page 50
Disclosure Committee US Sub Committee General Purposes Committee

The Group Chief Executive, the Group The Chief Executive of Indevco Group, Neemat The Group Chief Executive, Group Finance
Finance Director, the Chairman and the Frem, the Chairman, the Group Chief Executive, Director and the Chairman are the members.
Company Secretary are the members. the Chair of the Audit Committee and the To facilitate swift and efficient operational
Other Directors, representatives from Group Finance Director are the members. management decision-making for
the Company’s brokers, members of the Other Directors, representatives from the business in relation to day-to-day
Company’s management and other external the internal Auditor and external Auditor, financing and administrative matters.
advisers may attend meetings in whole or members of the Company’s management
in part, if invited. and other external advisers may attend
meetings in whole or in part, if invited.
The Disclosure Committee oversees
the Company’s compliance with its The US Sub Committee oversees the
disclosure obligations. strategic direction of business in the
US together with any associated risks
or opportunities in the business.
Governance in action case study “We are building an even better business,
focused on delivering sustainable value to
all of our stakeholders. Truly sustainable
value is found when balancing the needs
of our business, our environment and
our people.”
Emma Ciechan, director of Planning, Performance Miles Roberts
Management & Sustainability, delivering an update to
the Health and Safety and Sustainability Committee.
52
Governance
• Responsible for management of the Group as a whole.
• Delivers strategic objectives within the Board’s stated risk appetite.
Group Strategy Group Operating Group Health and Safety and Group Compliance
Committee Committee Sustainability Committee Committee
Chaired by Miles Roberts Chaired by Miles Roberts Chaired by Miles Roberts Chaired by Miles Roberts
Meets monthly Meets monthly Meets monthly Meets quarterly
The Group Finance Director, The Group Finance Director, The Group Finance Director, The Group Finance Director,
divisional Chief Executives, divisional Chief Executives, divisional Chief Executives, the Group Risk Officer, the
the Head of Strategy, the Head the Group Human Resources the Group Human Resources Group Financial Controller
of Mergers & Acquisitions, Director, the Group General Director, the Group Director of and the Group General Counsel
the Group Human Resources Counsel and Company Secretary, Corporate Affairs, the Group and Company Secretary are
Director and the Group General the Group Director of Corporate Health and Safety Director, the other members. Oversees
Counsel and Company Secretary Affairs, the Group Chief the Director of Planning, compliance with all legal,
are the other members. Procurement Officer and Performance Management & regulatory and organisational
Plans the business strategy the Group Chief Information Sustainability and the Group requirements including the
implementation through the Officer are the other members. General Counsel and Company effective interface between
annual Corporate Plan process. Considers Group-wide initiatives Secretary are the other the financial, legal, risk and
The Corporate Plan is used to and priorities. Reviews the members. Oversees the internal audit functions.
develop the Group’s strategy, implementation of strategy management processes,
based on the set strategic and operational plans. Reviews targets and strategies designed
direction. The Corporate Plan’s changes to policies and to manage health & safety
focus is primarily on strategic procedures and facilitates the and environmental and social
actions, supported by high discussion of the development risks and opportunities, and
level financial information. of new projects. to ensure compliance with the
Our Corporate Plan covers Group’s health and safety
a three-year horizon and and environmental and
is reviewed annually with social responsibilities
the Board. and commitments.
Operating Divisions Corporate Functions

Day-to-day business delivery Day-to-day business delivery
Health and Safety and Sustainability Committee

This committee provides the drive, insight and expertise to enable the business to operate ever more sustainably, by focusing on:
• Our people – ensuring the safety, wellbeing and development of our colleagues and contributing to our communities. We are keen to
ensure DS Smith is an engaging employer where our people can thrive and fulfil their potential. Across our business we play an active
role in our communities, enabling our people to support the causes that matter to them.
• Our environment – minimising our impact from design to production, and supply to recycling. This commitment is a key part of how
we are working to create a sustainable business model. Throughout our operations and supply chains, from design to production and
supply to recycling, we are reducing energy consumption, minimising waste and embedding the highest ethical standards to ensure
the most positive impact on our environment.

Leadership Board activities
An insight into how the Board’s approach to governance

supported the delivery of our strategy.
Strategic goal Board governance role Risk management framework Key activities in 2017/18
To delight our • Determine risk appetite. • Retailing fails to evolve • Carried out a robust assessment
customers • Ensure the Company remains • Governance of principal key risks (see pages
See our at the forefront of developing • Digital vulnerabilities 42 to 45), monitored and
principal risks and embedding best practice in reviewed the internal controls
on page 40 responsible business behaviour. process and assessed the
for more • Maintain and enhance Group risk profile by identifying
detail. DS Smith’s culture and values where the business key risks lay,
and key policies and procedures aligning them with the business
and ensure these are rolled risk appetite and highlighting
out to existing and how to target and mitigate
acquired businesses. those risks effectively.
• Continue to strengthen • Reinforced compliance with
internal controls and reporting. DS Smith’s Code of Conduct and
the Operating Framework, a
document which sets out the
Group’s culture and values,
as well as its key policies and
procedures, all in accordance
with the principles of good
corporate governance.
To realise the • Annual evaluation of • Talent barriers • Continued to focus on the

potential of our Board performance. composition, balance and
people • Review of the effectiveness of the Board.
You can read development pipeline. Undertook an external
more about • Continue to monitor senior evaluation of the Board,
how we executive talent management with the aim of becoming
develop our and development plans to the best Board we can be.
people on provide succession for all • Reviewed the key operational
page 22. key positions. roles and identified gaps in
• Continue to increase the experience needed to deliver
diversity of the Board and the strategy.
the management team. • Held a number of meetings
with people in the senior talent
pipeline to further improve
information flow.
• Reviewed the governance
framework and continued roll
out of training and awareness
drivers for key policies.
• Monitored senior executive
talent management and
development plans with
succession planning for
all key positions in mind.
• Monitored health and safety
performance across the Group
and reviewed the lessons
learned to keep our employees
and others affected by our
operations safe. Regular Board
updates received on actions
improving health and safety.
54
Strategic goal Board governance role Risk management framework Key activities in 2017/18
Governance
To lead the way • Keep financial key performance • Sustainability promise • Reviewed financial KPIs.
in sustainability indicators (KPIs) under review. • Inability to secure paper supply • Considered and approved
See also our • Keep the Group’s dividend policy • Unanticipated fibre technology the Group’s dividend policy.
Sustainability under review. changes • Further understanding and
Report on • Continue to monitor compliance planning actions in relation to
our website. with the key policies. new regulations over the period.
To double our • Enhance the Board’s • Eurozone and • Reviewed and approved
size and strategic understanding of macro-economic limits the Corporate Plan.
profitability geopolitical and economic • Concentration and • Reviewed and approved
You can read risks in international markets. consolidation of markets a number of acquisitions,
more in our • Approve the Corporate Plan • Access to markets and including Interstate Resources.
strategic and keep it under review. liquidity restrictions • Reviewed the potential impact
report on • Consider acquisitions and • Process changes of the EU referendum (Brexit)
page 2. divestments as identified to the business.
and determine appropriate
course of action.
Board and Board Committee meetings attendance

Nomination Audit Remuneration Annual General
Board Committee Committee Committee Meeting % attended
Total number of meetings in 2017/18 9 4 4 5 1
Executive Directors
Miles Roberts 9 4 N/A N/A 1 100%
Adrian Marsh 9 N/A N/A N/A 1 100%
Non-Executive Directors
Gareth Davis 9 4 N/A 5 1 100%
Chris Britton 1
8 4 4 5 1 95%
Ian Griffiths2 9 4 4 4 1 95%
Jonathan Nicholls1 8 4 4 5 1 95%
Kathleen O’Donovan 9 4 4 5 1 100%
Louise Smalley 9 4 4 5 1 100%
In addition to the seven scheduled Board meetings, two ad hoc meetings were held to discuss business matters that the Chairman and Group Chief Executive
decided should be considered by the Board. All Directors received papers for all meetings and had the opportunity to comment in advance of meetings they
were unable to attend.
1. Chris Britton and Jonathan Nicholls were each unable to attend one ad hoc Board meeting due to prior business commitments.
2. Ian Griffiths was unable to attend one Remuneration Committee meeting due to prior business commitments.

Leadership Board of Directors
The Board is focused on creating an inclusive culture in line with DS Smith’s values.
Gareth Davis Miles Roberts Adrian Marsh Chris Britton Ian Griffiths
Chairman Group Chief Group Finance Non-Executive Non-Executive
Executive Director Director Director
Key strength: Key strength: Key strength: Key strength: Key strength:
• Wealth of international • Clear strategic mindset • Strong financial • Strong background in • Corporate finance
experience • Strong leadership skills expertise within an general management expertise
• Over 8 years’ experience international context and marketing • Extensive audit
External appointments:
as a chairman • Miles is a non-Executive • Wealth of experience • Extensive experience of experience
External appointments: Director of Aggreko plc as CFO in large listed serving on large listed External appointments:
• Gareth is Chairman of multinationals company boards • Ian is Chief Operating
Principal Board
Ferguson plc (formerly External appointments: External appointments: Officer and Group
Committees
Wolseley plc) None • Chris is Chairman Finance Director
• Nomination
Principal Board of Graze, a private of ITV plc
Principal Board
equity company Principal Board
Committees Committees
• Remuneration • He is also Chairman of Committees
None
Dr Gerard, a private • Audit
• Nomination (Chair)
equity company
• Nomination
Principal Board • Remuneration
Committees
• Audit
• Nomination
• Remuneration
Gareth was appointed to Miles was appointed to the Adrian was appointed Chris was appointed to the Ian was appointed to the
the Board on 1 June 2010 Board on 4 May 2010 as to the Board on Board on 6 March 2013 as Board on 23 June 2014 as
as a non-Executive Group Chief Executive. 24 September 2013 as a non-Executive Director. non-Executive Director.
Director and became the Group Finance Director. He is stepping down from
Following his engineering Previously a non-Executive
Chairman of the Board on the Board with effect
degree at Bristol University As the former head of Tax, Director for Alliance Boots
4 January 2012. He has from 28 June 2018.
he became a chartered Treasury and Corporate GmbH for six years and CEO
been Chairman of the
accountant and brings Finance at Tesco PLC, of the Findus Group. Chris Prior to his current
Nomination Committee
to the Board extensive Adrian has helped DS Smith has also held executive role with ITV, he was at
since January 2012.
financial experience. to significantly build the board positions as the EMAP plc for 13 years
On 2 April 2018 he stepped He was previously Chief finance function and President of the Baby in various senior finance
down from chairmanship of Executive of McBride plc, deliver strong financial Division of Royal Numico positions including Group
William Hill PLC. Previously having originally joined as results. As a qualified until its acquisition by Finance Director from
he was Group Chief its Group Finance Director. accountant, and coming Danone in 2007. He worked 2005-2008. Prior to that
Executive of Imperial He was Senior Independent from a FTSE background, for Diageo for 20 years he was at Ernst & Young,
Tobacco Group PLC from Director of Poundland Group he has held divisional in various marketing and where he worked in the
its incorporation in 1996 plc until September 2016. CFO positions at both general management corporate finance team.
until May 2010. AstraZeneca plc and positions, including
Pilkington plc. his final role as global
marketing director.
56
Governance
Jonathan Nicholls Kathleen O’Donovan Louise Smalley Iain Simm
Senior Independent Non-Executive Non-Executive Group General
Director Director Director Counsel and Company
Secretary
Key strength: Key strength: Key strength: Key strength:

• Extensive experience • Extensive global • Strong HR experience • Legal expertise
serving on boards experience of executive • Extensive knowledge • Wealth of experience
• Significant external and non-executive roles of people management, in assisting boards
commercial experience • M&A and restructuring rewards and with legal and
External appointments: experience remuneration schemes governance matters
• Jonathan is Chairman External appointments: External appointments: External appointments:
of Shaftesbury Plc • None • Louise is Group Human • None
• He is also Chairman Principal Board Resources Director and
of Ibstock plc an Executive Director of
Committees
Whitbread PLC
Principal Board • Audit
Committees • Nomination Principal Board
• Audit (Chair) • Remuneration (Chair) Committees
• Nomination • Audit
• Remuneration • Nomination
• Remuneration
Jonathan was appointed to Kathleen O’Donovan was Louise was appointed Iain was appointed Group
the Board on 1 December appointed to the Board as a to the Board on General Counsel and
2009 as a non-Executive Non-Executive Director on 23 June 2014 as a Company Secretary
Director. He was appointed 5 December 2012. Kathleen non-Executive Director. on 6 June 2016.
Senior Independent was appointed Chairman
She has held a number Previously, he has held
Director in 2012 and of the Remuneration
of key HR roles at General Counsel and
became Chairman of the Committee in September
Whitbread PLC. She Company Secretary
Audit Committee in 2010. 2013 and is a member of
previously worked as roles with BBA Aviation
He was previously Group the Audit and Nomination
an HR professional in plc and P&O Ports Ltd. He
Finance Director of Hanson Committees.
the oil industry, with undertook his legal training
Plc and, most recently, She was Senior Independent BP and Esso Petroleum. with Slaughter and May
Group Finance Director of Director for ARM Holdings and worked for a number
Old Mutual Plc. plc until December 2015 of years in their corporate
and chaired their Audit and commercial division.
Committee. Kathleen
was also previously a
non-Executive Director of
Trinity Mirror plc, Prudential
plc, EMI Group plc, O2 plc
and Senior Independent
Director of Great Portland
Estates plc. She served as a
Director on the Court of the
Bank of England from 1998
to 2004 and was Chief
Financial Officer of BTR plc
(subsequently renamed
Invensys plc) from 1991
to 2002.

Effectiveness External Board effectiveness review
Being the best Board that we can be.
Formal evaluation is a valuable tool for improvement. “Our Board is committed to excellence in
With internal evaluations having been carried out in each of corporate governance, but it is how the
the last two years, an external evaluation of the Board and its personalities, competencies and experiences
Committees was conducted this year in keeping with the guidance around the table interact with each other
provided under the UK Corporate Governance Code. Clare that determine the Board’s effectiveness.”
Chalmers Limited (CCL) was appointed, a specialist consultancy
which undertakes no other business for the Company. A formal Evaluation and report
assessment process was undertaken and the Chairman, together CCL found that the DS Smith Board operated to a high standard
with the Group General Counsel and Company Secretary, provided and worked well and effectively. It had overseen a period of rapid
a comprehensive briefing to CCL. growth over the past five years that had taken the Company into
Observation the FTSE 100. CCL noted that the Board benefitted from a stable
The review was conducted from January to April 2018. As part and long-serving group of directors, led by a highly capable
of the process CCL attended and observed a Board meeting and Chairman. The challenge now facing the Board was to recruit new
was given access to Board papers for the prior 12 months to directors who could fill forthcoming vacancies and to ensure that
enhance CCL’s understanding of how the Board and its all the Directors and the Board as a whole contributed fully to the
Committees operate. Board’s role.
Interviews
Individual interviews were held with each Director and the Group
General Counsel and Company Secretary. An interview script was
developed to ensure consistency, with bespoke questions to allow
for additional information reflecting function, role, tenure
and experience.
Evaluation Action plan Shared

Observation Interviews Discussion
& report & sign off action plan
CCL discussed the findings with the Chairman and presented the conclusions to the Board. The Board discussed the key points and
agreed an action plan. As with every high performing board, the Directors will continue to look for areas of improvement.
Action plan Recommendations
Board dynamics and culture • The Chairman, together with the Group General Counsel and Company Secretary
to agree a programme of essential site visits and meetings to be covered as part
of induction, plus ongoing site visits for non-Executive Directors on at least an
annual basis.
Board and executive succession • Nomination Committee to prioritise succession planning, including recruitment,
induction and ongoing Director development.
Strategic focus • Non-Executive Directors to consider how best to use the post-meeting session
to discuss ways of increasing the level of challenge, particularly on strategy and
risk issues.
Communication, shareholders • Board to consider ways of engaging with the customer perspective.
and stakeholders
Risk framework • Board to explore risk appetite within DS Smith as way of moving from oversight to
active engagement on risk.
Board Committees • Board to consider a more formal structure for the talent review and succession process.
58
Relations with stakeholders Our key stakeholders: who they are and how we engage
Honest and regular engagement with our shareholders and
Governance
wider stakeholders is a vital ingredient of building the sustainable
business we are so proud to be a part of.
As a company, we recognise that our responsibilities go far beyond
delivering excellent returns to our shareholders. For us it is as much
about satisfaction and doing the right thing as it is about healthy People Suppliers
profits. Our reputation as a Group is founded on always meeting
the highest ethical standards. This is evident in the way we engage
with our customers, employees, shareholders, suppliers and other
stakeholders. The DS Smith Code of Conduct has been created to
clarify our ethical position on key topics and enshrines our core
values – to be caring, challenging, trusted, responsive and tenacious.
Customers Local communities
You can read our Code of Conduct in full at
http://www.dssmith.com/people/culture/code-of-conduct/
Investors
Stakeholder type Link to our core values Priority for DS Smith Stakeholder type Link to our core values Priority for DS Smith
Our people High Our customers High
How we engage: How we engage:

1. Health and safety 1. Packaging strategists
The safety of our people is our number one priority. We Our packaging and display strategists, with their cross-industry
take great pride in our safety record and are pleased with experience, work in partnership with our customers to deliver
the progress made in reducing our accident frequency rate. results through packaging. We do this by helping them increase
Nonetheless, we remain focused on continuing our long-term sales, lower cost and manage risks.
goal towards a zero accident workplace.
The challenge is to continue to deliver consistent quality and
Vision Zero is our step up in terms of health and safety – our service, but with the opportunity to improve profitability for
vision for a future of zero harm – for anyone who comes to work our customers through our ability to deliver in six distinct areas:
at, or visits, our sites, offices, warehouses or any of our facilities.
• Superior customer experience
We want them to go home safe and healthy every single day.
• Authenticity
In order to continue our journey towards zero harm, we need • Brand building
to focus on developing our culture and people’s behaviour and • Sustainability
mind-set so that working safely and healthily becomes the
• End-to-end solutions
norm in our businesses and is integral to the way we do things.
• A connected world
2. Management standards
Achievements over the last 12 months:
Following feedback from our last employee survey, new
• Six new PackRight centres opened in 2017/18 bringing the
ambitions for our business require a shift in how we lead and
total to 42 PackRight and Impact Centres throughout Europe.
manage our people. The Management Standards, which were
introduced at the beginning of 2018, have been defined to • Strong organic volume growth in box volumes.
ensure that the organisation can deliver on its Corporate Plan • We have reduced our defect rate (measured in
by setting baseline performance expectations for all managers. defects-parts-per-million) by 28 per cent.
The nine Management Standards list the key expectations of a • Development of “Made2Fit”, an innovation to tackle the
common, core and consistent view of what good management e-commerce challenge of an average of 45 per cent void space.
looks like for DS Smith, which in turn will empower and engage
employees to contribute to a high performing organisation.
Achievements over the last 12 months
• 6.7% (2016/17: 19%) reduction in Accident Frequency Rate.
• 239 (2016/17: 207) sites with zero lost time accidents.
• All nine competencies comprising the Management Standards
have been rolled out across the Group.
* Read more about engagement with employees in the People section
on page 22.

Relations with stakeholders Our key stakeholders: who they are and how we engage continued
Stakeholder type Link to our core values Priority for DS Smith Stakeholder type Link to our core values Priority for DS Smith
Our investors High Local communities Medium
How we engage: How we engage:

1. Trading updates and investor meetings 1. Opportunities for young people
The Board maintains and values regular dialogue with We seek to support future generations through our strategic
shareholders throughout the year. Formal trading updates are alliances to reduce youth unemployment. From our apprentice
given to the market four times a year. Following the quarterly programmes, our work with the Alliance for Youth initiative, our
update, in Q1 and Q3, a conference call is held with shareholders links with local schools and funding of scholarships we aim to
and analysts and after the full-year and interim results a help educate young people into work.
presentation is made to shareholders and analysts. In addition,
2. Charitable foundation
pre-close trading updates are typically given at around the
DS Smith seeks to make a positive contribution to our communities
time of the close of the half and full-year periods.
and build a reputation as a good neighbour and employer. We
Throughout the year, meetings and conference calls are encourage our people to feel fulfilled through charity, community
organised in the UK, Europe and the US, at which the Group and volunteering work. We are proud to support our people, our
Chief Executive and Group Finance Director meet with communities and our customers in their goals to give something
investors, either individually or in groups, to discuss Group back through the DS Smith Charitable Foundation.
strategy and performance and respond to any questions
raised. These are structured both around the reporting events
• Inaugural partnership with the EY Foundation on the Smart
such as the full-year and half-year results, as part of investor
Futures programme.
conferences, or ad hoc. The Chairman also meets with investors.
• For the past four years we have been supporting Keep Britain
2. Annual General Meeting (AGM) Tidy’s Green Flag Award® scheme. This recognises and rewards
In September 2017 we welcomed shareholders to our AGM. well managed parks and green spaces, setting the benchmark
It is an annual opportunity for our Board to directly engage with standard for the management of recreational outdoor spaces
shareholders. Our Group Chief Executive gives a presentation across the United Kingdom and around the world.
on the performance of the business and our Chairman hosts an • £190,000 donated in the last year to local charities who are
insightful Q&A session, encouraging challenging questions and engaged in improving or conserving the environment or who
constructive dialogue. provide training and educational opportunities.
At the AGM in September 2018 we will be seeking to amend our
Stakeholder type Link to our core values Priority for DS Smith
Articles of Association to allow for hybrid AGMs in the future.
These are meetings where virtual technology allows those Our Suppliers Medium
shareholders who cannot attend in person to participate
using an app. Making the most of advances in technology How we engage:
like this allows us to engage with more shareholders. 1. Global supplier standards
DS Smith spends approximately €3 billion annually on suppliers
Achievements over the last 12 months: and we expect our suppliers to support us in providing the world
• June 2017 full-year results presentation, the announcement of class quality and service we deliver to our customers on a
the acquisition of Interstate Resources, with an accompanying daily basis.
equity issue, followed by investor meetings.
• December 2017 half-year results presentation and As a business, we are committed to the highest ethical
investor meetings. standards in the way we engage with suppliers. The Global
Supplier Standards (GSS) state the minimum requirements
• Nine investor conferences attended.
and standards imposed on our suppliers in the areas of ethical
• Four quarterly trading updates given to the markets.
business practices, code of conduct and social and environmental
• Investor roadshows to London, Edinburgh, Paris, Frankfurt, management. In addition to the general requirements and
New York, Boston, Toronto, Atlanta, Chicago and Los Angeles. expectations, the GSS also lay down various product safety
and quality assurance requirements and standards. We have
conducted a thorough review of our supply chain and identified
high‑risk suppliers who have signed up to our GSS based on
the Ethical Trading Initiative with references to the UK Modern
Slavery Act. GSS have become the cornerstone of our supplier
on-boarding programme.
• 65 per cent of our supplier base, representing €1.4 billion spend,
have committed to observe our Global Supplier Standards.
60
Directors’ report
Going concern and debt facilities and the issue of 6,492,411 ordinary shares to
In considering the going concern basis for preparing the financial the seller.
statements, the Directors have considered the Company’s On 4 June 2018 the Company announced the proposed acquisition
objectives and strategy, its risks and uncertainties in achieving its of Papeles y Cartones de Europa, S.A., known as Europac, a leading
objectives and its review of business performance, which are all western European integrated packaging business. The offer price
set out in the strategic report, operating review and financial of €16.80 per Europac share values the entire share capital of
review sections of this annual report and accounts. The Group’s Europac at €1,667 million (£1,453 million).
liquidity and funding arrangements are described in notes 19 and
20 to the financial statements, as well as in the capital structure In addition to the acqusitions detailed above the Group also made
various business acquisitions, which are not considered material
Governance
and treasury management section of the strategic report. The
Directors consider that the Group has significant covenant to the Group individually or in aggregate.
and liquidity headroom in its borrowing facilities for the 2016/17 acquisitions and disposals
foreseeable future. In the year ended 30 April 2017, the Group made various business
After reviewing the Company’s expenditure commitments, acquisitions, which included the acquisition of two businesses
current financial projections and expected future cash flows specialising in point of sale and display product and services for
(with appropriate sensitivities applied for deterioration in both in-store marketing, Creo in the UK and Deku-Pack in Denmark,
underlying cashflow and working capital), together with the the acquisition of Parish (a US manufacturer and supplier of
available cash resources and undrawn committed borrowing bag-in-box systems), Gopaca (a corrugated producer in Portugal)
facilities, the Directors have considered that adequate resources and P&I Display (a specialist corrugated display business in Portugal).
exist, before any mitigating actions, to continue in operational These acquisitions were not considered material to the Group
existence without relying on short term facilities for a period of individually or in aggregate and were for a total of £71 million
at least twelve months from the date of approval of this report. (net of cash and cash equivalents). Borrowings acquired from
Accordingly, the Directors continue to adopt the going concern these transactions were £14 million.
basis in preparing the financial statements.
Share capital
Acquisitions and divestments Details of the issued share capital and the rights and restrictions
2017/18 acquisitions and disposals attached to the shares, together with details of movements in
On 25 August 2017, the Group acquired 80 per cent of the the Company’s issued share capital during the year, are shown
shares of common stock in the capital of Indevco Management in note 23. Following the Placing announced on 29 June 2017,
Resources, Inc. (IMRI) from Merpas Co. S.à r.l. Together with the 62,637,363 new ordinary shares were placed at a price of £4.55
52,474,156 new ordinary shares allotted to Merpas the Group paid pence per share, resulting in total proceeds on issue of £288 million
£772 million in respect of cash consideration and repayment of in connection with the acquisition of Interstate Resources. On
IMRI Group’s financial indebtedness. A redemption liability relating 29 August 2017 52,474,156 new ordinary shares were allotted to
to the non-controlling interest of £152 million for the 20 per cent Merpas Co. S.a r.l. in connection with the acquisition of Interstate
minority stake in IMRI retained by Merpas was recognised at the Resources. On 7 March 2018, 6,492,411 new ordinary shares
same time. On fixed dates over the next four years, Merpas can were allotted to Kameran Financial Limited in connection with
require the Group to acquire some or all of the remaining shares the completion of the €208 million acquisition of EcoPack and
in IMRI on agreed terms under a put option, and on the fifth EcoPaper, Romania. These new shares ranked equally in all
anniversary of completion, the Group will (unless agreed respects with the existing ordinary shares. Pursuant to the
otherwise) acquire any shares in IMRI that it does not already own. Company’s employee share option schemes, 1,619,350 ordinary
On 18 October 2017 the Group announced it had entered into an shares of 10 pence each were issued during the year. 49,449
agreement to acquire EcoPack and EcoPaper for an enterprise shares pursuant to the Company’s employee share option
value of c. €208 million, which completed on 6 March 2018. schemes were issued between 1 May and 17 June 2018 inclusive.
The Company has not utilised its authority to make market
These businesses are a leading integrated packaging and paper purchases of 101,451,301 shares granted to it at the 2017 AGM
group in Romania. The acquisition was funded by existing cash but, in line with market practice, will be seeking to renew such
authority at this year’s AGM.
Substantial shareholders
Information provided to the Company pursuant to the Financial Conduct Authority’s (FCA) Disclosure Guidance and Transparency Rules
(DTRs) is published on a Regulatory Information Service and on the Company’s website. As at 30 April 2018, the following information
has been received, in accordance with DTR5, from holders of notifiable interests in the Company’s issued share capital.
Ordinary shares held % Nature of holding
Aviva plc 76,565,844 7.12 Direct & indirect

Standard Life Investments Limited 76,190,552 7.09 Indirect
Blackrock Inc 54,506,656 5.07 Indirect
Norges Bank 53,234,429 4.95 Direct
Ameriprise Financial Inc, and its group 47,955,690 4.46 Direct & indirect
The trustee of the Employee Benefit Trust (the Trust), which is used to purchase shares on behalf of the Company as described in note
23, has the power to vote or not vote, at its absolute discretion, in respect of any shares in the Company held unallocated in the Trust.
However, in accordance with good practice, the trustee adopts a policy of not voting in respect of such shares.
The trustee has a dividend waiver in place in respect of shares, which are the beneficial property of the Trust.
Directors’ report continued
Dividends In line with the Regulations which implement the European Union
An interim dividend for 2017/18 of 4.9 pence per ordinary share Accounting Directive (SI 2015/980), a complete list of the Group’s
was paid on 1 May 2018 and the Directors recommend a final subsidiaries has been included on pages 136 to 140 to comply with
dividend of 9.8 pence per ordinary share which, together with the s409 of the Act.
interim dividend, increases the total dividend for the year to 14.7 We have chosen, in accordance with the Act, to include certain
pence per ordinary share (2016/17: 15.2 pence). Subject to approval information in our strategic report or financial statements that
of shareholders at the AGM to be held on 4 September 2018, the would otherwise be required to be disclosed in the Directors’
final dividend will be paid on 1 November 2018 to shareholders on report. This is as follows:
the register at the close of business on 5 October 2018 including Subject matter Page
those to be issued in the rights issue. The 2017/18 interim
Important events since the financial year-end 12
dividend of 4.9 pence, and prior dividends, will be restated in
Likely future developments in the business 16
future accounts to reflect the bonus factor adjustment resulting
from the rights issue. Research and development 18
Use of financial instruments 39
Political donations Waiver of dividends 61
No political donations were made during the year ended Employment of disabled persons 23
30 April 2018 (2016/17: nil). DS Smith has a policy of not making
Employee involvement 22
donations to political organisations or independent election
candidates or incurring political expenditure anywhere in Greenhouse gas emissions 29
the world, as defined in the Political Parties, Elections and The information that fulfils the requirements of the Corporate
Referendums Act 2000. Governance Statement for the purposes of the Disclosure
Directors’ and officers’ liability insurance Guidance and Transparency Rules can be found on pages 46 to 67,
The Company has purchased and maintains appropriate and forms part of the Directors’ report. The 2016 UK Corporate
insurance cover in respect of Directors’ and Officers’ liabilities. Governance Code can be accessed at www.frc.org.uk
The Company has also entered into qualifying third-party Internal control
indemnity arrangements for the benefit of all its Directors, in The Board has an overall responsibility for the Group’s system of
a form and scope which comply with the requirements of the internal control, including financial, operational and compliance
Companies Act 2006 (the Act). These indemnities were in force controls. The Board is also responsible for the risk management
throughout the year and up to the date of this annual report. system and for reviewing its effectiveness. Such a system,
Risk governance however, can only be designed to manage rather than to eliminate
The Board retains accountability for establishing and maintaining risk. Therefore it can provide only reasonable and not absolute
the Group’s systems of internal control and risk management assurance against material misstatement or loss. We have the
and for reviewing their effectiveness, but has delegated day-to- necessary procedures in place to ensure that there is an ongoing
day responsibility to the Audit Committee. These systems are process for identifying, evaluating and managing the significant
designed to manage, and where possible eliminate, the risk of risks to the Group. These procedures are in line with Financial
failure to achieve business objectives and to provide reasonable, Reporting Council guidance and have been in place throughout
but not absolute, assurance against material misstatement or the year under review and up to the date of the approval of these
loss. There is an ongoing process for identifying, evaluating financial statements. Our risk governance process, including how
and managing the significant risks faced by the Group. it is reviewed by the Board, is described in more detail on page 40.
Our risk management framework and the processes we put in The Board determines the objectives and broad policies of
place last year are operating well and serve to identify, assess the Group. It meets regularly and there is a schedule of matters
and consider the possible remedies and responses to the principal which are required to be brought to it for decision. The Board is
risks and uncertainties the Group faces. The Group continues to accountable for, but has delegated to the Audit Committee the
improve the management of its key risks and to hold a strong responsibility for, establishing a system of internal controls
position to absorb the financial and operational impact should appropriate to the business environments in which the
those risks materialise. In doing so, the Board is encouraged by Group operates. Key elements of this system include:
the continuing work across the Group and its divisions, the • a clearly defined divisional organisation structure for
investments being made in risk management and the growing monitoring the conduct and operations of individual
interest and skills of our employees in this area. business units;
Further details on the Group’s risk management approach and • clear delegation of authority throughout the Group, starting
its management and mitigation of each principal risk is set out in with the matters reserved for the Board;
the principal risks section on pages 42 to 45. Following the new • a formal process for ensuring that key risks affecting all the
requirement of the Code to report on the Group’s longer-term Group’s operations are identified and assessed on a regular
solvency and viability, the Group’s viability statement is set out basis, together with the controls in place to mitigate those risks.
on page 41. Risk consideration is embedded in decision-making processes.
The most significant risks are periodically reported to the Board
Other disclosures and considered by it. The risk process is reviewed by the
This Directors’ governance report fulfils the requirements of the Audit Committee;
directors’ report for the purposes of the Act. The strategic report
can be found on pages 2 to 45, and encompasses our corporate
social responsibility report.
62
• the preparation and review of comprehensive annual divisional and risk management procedures, during the year and up to the
and Group budgets and an annual review and approval by the date of approval of this annual report. This included a process of
Board of the Corporate Plan; self-certification by senior divisional management in which they
• the monthly reporting of actual results and their review were asked to confirm that their divisions have complied with
against budget, forecasts (including bank covenant headroom) Group policies and procedures and to report any significant control
and the previous year, with explanations obtained for all weaknesses identified during the past year. In addition, it involved
significant variances; reviewing the results of the work of the Group’s Internal Audit
• the Operating Framework laying down common control function and the risk identification and management processes
procedures and policies to apply throughout the Group. This identified above.
Governance
includes clearly defined policies for capital expenditure and Disclosure of information to the Auditor
investment, including appropriate authorisation levels, with
Each of the persons who is a Director at the date of the approval
larger capital projects, acquisitions and disposals requiring
of this annual report confirms that:
Board approval;
• regular formal meetings between the Group Chief Executive, a) so far as the Director is aware, there is no relevant audit
the Group Finance Director and divisional management to information of which the Company’s Auditor is unaware; and
discuss strategic, operational and financial issues; and b) the Director has taken all the steps he/she ought to have taken
• communicating key corporate values through our Code as a Director in order to make him/herself aware of any relevant
of Conduct to all employees. audit information and to establish that the Company’s Auditor is
aware of that information.
Internal Audit
The Group’s Internal Audit function, which is outsourced to KPMG This confirmation is given and should be interpreted in accordance
LLP, undertakes regular reviews of the individual businesses’ with the provisions of section 418 of the Companies Act 2006.
operations and their systems of internal controls, makes Deloitte LLP have expressed their willingness to continue in office
recommendations to improve controls and follows up to ensure as Auditor and a resolution to reappoint them will be proposed at
that management implements the recommendations made. the forthcoming AGM.
The Internal Audit plan is determined on a risk assessment By order of the Board
basis and is reviewed and approved by the Audit Committee.
Internal Audit’s findings are reported to Group and divisional Iain Simm
business management as well as to the Audit Committee. The Group General Counsel and Company Secretary
Board can confirm that it has carried out an annual review of the
overall effectiveness of the Group’s system of internal controls 17 June 2018
Non-financial information statement

The table below sets out where stakeholders can find information in our strategic report that relates to non-financial matters,
as required under the new Non-Financial Reporting Directive requirements.
Where to read more in this report about our impact,
Reporting requirement Some of our relevant policies including the principal risks relating to these matters Page
Environmental matters Group Sustainability policy1 Sustainable forestry 10

Social pressure for zero packaging waste 14
Our sustainability approach, strategy, focus and targets 26 – 29
Our differentiators 13
Risk – sustainability 44
Employees Code of Conduct2 What we create for our people 23
Group Health and Safety policy 1 Diversity 24
To realise the potential of our people – performance 22
Compliance framework policy2 Board diversity 51
Health and safety 22
Responsible conduct 28
OWN IT! 23
Risk – talent barriers 44
Human rights Modern Slavery policy2 Sustainable governance 29
Code of Conduct2 Risk – governance and compliance 42
Social matters Code of Conduct2 Responsible neighbour 28

What we create for our communities 28
Anti-bribery and corruption Anti-corruption policy2 Risk – governance and compliance 42
Gifts and hospitality policy2
Anti-bribery Anti-corruption policy2
Business model Our business model 18-19
Non-financial KPIs Employees: accident frequency rate 22
Sustainability: CO2 equivalent emissions 26
Customers: on-time in-full deliveries 20
1. Available to all employees through the DS Smith intranet. Not published externally.
2. Available both on our website www.dssmith.com and available to employees through the DS Smith intranet.

Accountability Audit Committee report
The Committee supports the Board in its oversight of the control framework across
the Group.

“The Audit Committee’s Member Since
oversight is central in Jonathan Nicholls (Chair) 2009

bringing together risk Chris Britton 2013
management and Ian Griffiths 2014
control activities to Kathleen O’Donovan 2012
maintain a strong risk Louise Smalley 2014
focused culture.”
During the year, the Audit Committee met four times and met
privately with the external Auditor after each meeting. In addition
to the Audit Committee members, the Chairman, the Group
Chief Executive, the Group Finance Director, the Group Financial
Controller and representatives from the external Auditor and
Internal Audit attended parts of these meetings by invitation.
Jonathan Nicholls – Chairman of Audit Committee Meetings of the Committee are scheduled close to the end
of the half and full year, as well as before the publication of the
associated half and full-year financial reports, so as to ensure
Key objective of the Audit Committee the Committee is informed fully and on a timely basis on areas
To monitor the integrity of the Group’s reporting process of significant risks and judgement.
and financial management and to ensure that risks are
The Board is satisfied that Jonathan Nicholls and the members
carefully identified and assessed and that sound systems
of the Audit Committee have both current and relevant financial
of risk management and internal control are in place.
experience (as set out on pages 56 to 57) and that the Audit
Key responsibilities Committee, as a whole, has competence relevant to the sector
• The accounting principles, policies and practices adopted in which the Company operates.
in the Group’s accounts. The Chairman of the Audit Committee held separate private
• External financial reporting and meetings during the year with representatives from Internal
associated announcements. Audit, the Group Finance Director and his team and the
• Managing the appointment, independence, effectiveness external Auditor.
and remuneration of the Group’s external Auditor,
The Audit Committee received sufficient, reliable and
including the policy on the award of non-audit services.
timely information from management to enable it to fulfil
• Initiating and supervising a competitive tender process
its responsibilities.
for the external audit when next required.
• The resourcing, plans and effectiveness of Internal Audit
performed on behalf of the Group by an accountancy firm
(currently KPMG LLP), which is independent from the
Group’s external Auditor.
• The adequacy and effectiveness of the internal
control environment. Allocation of time
• The Group’s risk management processes
and performance.
• The establishment and oversight of fraud prevention
Governance: 10%
arrangements and reports under the “Speak Up!” policy.
Financial reporting: 50%
• The Group’s compliance with the 2014 and the 2016
Risk management: 20%
UK Corporate Governance Code (the Code).
External audit: 10%
• The provision of advice to the Board on whether the Internal audit: 10%
annual report and accounts, when taken as a whole, is
fair, balanced and understandable and provides all the
necessary information for shareholders to assess the
Company’s performance, business model and strategy.
64
Governance
Risk management and internal controls
In fulfilling the Committee’s oversight of the risk management and control environment, a number of key activities are undertaken
during the year, as well as regular meetings with senior management.
The Audit Committee considered the risk management activities during the year (with discussion including due diligence, management of
cultural risk in the integration phase after a new acquisition and brand reputation issues), and reviewed risk reporting to ensure that the
balance between risk and opportunity was in keeping with the Group’s risk appetite.
The Committee receives a separate report on any matters raised through “Speak Up!”, the Group’s confidential whistleblowing
channel, and any related investigations.
The Committee approved the Group’s annual Internal Audit plan, which was primarily risk-based focusing on the assurance
of core processes and projects, as well as overseeing internal compliance activities. During the year, the Committee received
regular reports summarising findings from the Internal Audit reviews performed, action plans to address any areas highlighted
for improvement and activity summaries from internal compliance teams.
The Audit Committee is satisfied that the Group’s executive compensation arrangements do not prejudice robust controls and
good stewardship.
Significant matters considered
Issue Review and conclusion

Classification and The Group has continued to deliver programmes to restructure the business to evolve and optimise the operational
presentation of footprint and the support infrastructure. The costs of these programmes, together with other elements of income
and cost (including acquisition costs, integration costs, impairments and gains or losses on business disposals), are
adjusting items
classified as adjusting items because of their nature, incidence or size. The Directors believe that such a classification
assists in the understanding of the trading and financial results of the Group.
The Audit Committee has reviewed the appropriateness of the income and costs both included in and excluded
from adjusting items by challenging and seeking explanations from management. The Audit Committee reviewed
reports prepared by management and the external Auditor. This work is a recurring agenda item in all Audit Committee
meetings and the Audit Committee has been involved in discussions to confirm that management policy on these items
remains appropriate, in particular considering the significant regulator focus on Alternative Performance Measures.
The external Auditor reports on these matters at the half and full year. The Audit Committee is satisfied that the
resulting presentation and disclosure is appropriate.
Acquisition The Group has made significant investments in new acquisitions during the year with consequential accounting
accounting considerations including, inter alia, identification and fair values of intangible assets, fair values of other assets and
liabilities (including the redemption liability relating to the non-controlling interest arising on acquisition of Interstate
Resources) and goodwill arising. The Audit Committee has reviewed the results of the work undertaken in these areas,
which has included for certain acquisitions, engagement of external professional advisers on the identification and
calculation of fair values of intangible assets. The Audit Committee is satisfied that the accounting and disclosure
is appropriate.
Taxation The focus by the Committee on taxation during the year considered the high current level of fiscal authority activity,
the new Country by Country reporting requirements and the Group’s expansion into new markets. This was in the
context of the Group’s overall tax strategy, as well as the significant reduction in rates across territories including the
US. Taxation represents a significant cost to the business both in cash and accounting terms and the Group is exposed
to differing tax regimes and risks which affect both the carrying values of tax balances (including deferred tax) and the
resultant income statement charges. The Audit Committee reviewed the tax charge for the half-year and the full-year,
including the underlying tax effect, the appropriateness of and movement in tax provisions recognised and the risks
associated with them. The Audit Committee is satisfied that the disclosure is appropriate.

Accountability Audit Committee report continued
Role of the Committee In order to help the Committee continue to meet their
The Audit Committee’s role is central to bringing together the responsibilities, training and briefing sessions are organised
Group’s risk management activities and control environment during the Committee meetings.
to ensure the integrity of financial reporting and maintaining a
During 2017/18, sessions included a briefing on the impact of new
strong risk focused culture. The Chairman of the Audit Committee
accounting standards, Corporate Governance developments and
attends the Group’s Annual General Meeting every year and
an update on strategy to address evolving legislation such as
makes himself available for any shareholder questions on the
GDPR and Anti-bribery and Corruption.
Committee’s remit.
External auditors
The Committee oversees and reviews the management of risk,
financial results and the Group’s internal audit function. The Pursuant to the terms of the Statutory Audit Services for Large
acquisition and integration programmes continue to be a focus, Companies Market Investigation (Mandatory Use of Competitive
as well as the continued progress of the Group’s optimisation Tender Process and Audit Committee Responsibilities) Order 2014
projects. The Committee has also overseen the transition of lead (Competition & Markets Authority Order), which was introduced
external Audit partner, underway after Ian Waller rotates after with effect from this year, the Audit Committee is solely responsible
the 2017/18 year end. for negotiating and agreeing the external Auditor’s fee, the scope
of the statutory audit and initiating and supervising a competitive
The UK Corporate Governance Code requires the Board to confirm tender process for the external audit where it is appropriate
that the annual report presents a fair, balanced and understandable to do so. When a tender is undertaken, the Committee will be
assessment of the Group’s performance, business model and responsible for making recommendations to the Board as to
strategy. Following a request from the Board, the Committee the external Auditor’s appointment.
undertook procedures to advise on this matter. In particular,
Committee members received an early draft of the annual The Audit Committee meets with the external Auditor to
report during the planning process to enable a review of any areas determine annually their qualifications, expertise, resources,
requiring additional clarity or better balance in the messaging. independence, objectivity and effectiveness. In addition, the
performance of the external and internal Audit functions is
In November 2017, the Group received a letter from the Financial evaluated as part of the annual cycle.
Reporting Council (FRC) regarding its 30 April 2017 annual report
and accounts. The Audit Committee reviewed the responses In order to ensure the independence and objectivity of the Auditor,
drafted and subsequent correspondence with the FRC and the the Audit Committee maintains and regularly reviews the Auditor
review concluded satisfactorily. The Audit Committee have Independence Policy which covers services which may be provided
reviewed the 30 April 2018 annual report and accounts to by the external Auditor, and permitted fees.
ensure the observations by the FRC have been addressed. The policy on the supply of non-audit services by the external
Auditor is as follows: The Group should not employ the Auditor
Significant other activities
to provide non-audit services where either the nature of the
During the year the Committee reviewed the updated wording of
work or the extent of such services might impair the Auditor’s
the Group’s longer-term viability statement, set out on page 41.
independence or objectivity. The external Auditor is permitted
In order to do this, they ensured that the model used for scenario to undertake some non-audit services, providing it has the skill,
and sensitivity testing aligned clearly with the principal risks of the competence and integrity to carry out the work in the best
Group, challenged the underlying assumptions used and reviewed interests of the Group, for example, advisory services and due
the results of the detailed work performed. The Committee was diligence activities associated with potential acquisitions and
satisfied that the viability statement had been prepared on an disposals, and major changes in accounting regulations.
appropriate basis and that the statement was justified.
Auditor rotation timeline
2006 2013/14 2018 2023/24

Deloitte LLP appointed. Full competitive Competitive tender,
tender following unless specific
which Deloitte was circumstances
reappointed, as require an earlier
described opposite. tender.
66
Non-audit services and fees are reported to the Audit Committee The Audit Committee is able to monitor the effectiveness of the
Governance
twice a year. For guidance, annual non-audit fees payable to the external Auditor both through direct assessment and through
external Auditor following the policy for 2017/18 should not recurring activities. The Audit Committee Chairman meets with
exceed 70 per cent of the annual Group audit fee without prior the lead engagement partner regularly and individual Committee
formal approval by the Audit Committee. During 2017/18, total members are encouraged to and do meet privately with Deloitte.
non-audit fees paid to the external Auditor of £1.5 million were
External audit fee negotiations are approved by the Audit
48 per cent of the annual Group audit fee (2016/17: £0.5 million:
Committee each year. There are no contractual restrictions
18 per cent). The increase over the previous year was primarily
on the Group with regard to Deloitte’s appointment.
due to the work performed in connection with the acquisition of
Interstate Resources. In addition, £8.4 million was paid to other Deloitte LLP were first appointed as external Auditor to
accounting firms for non-audit work, including £1.1 million for work the Group in 2006. In 2013/14, the Company carried out a full
relating to internal Audit (see note 3). EU regulations and other competitive tender for the role of Statutory Auditor, following
guidance mean that, with effect from the Group’s 2020/21 year, a which Deloitte were reappointed. The Committee’s policy is that
cap on the ratio of non-audit fees to audit fees paid to the Auditor the role of external Auditor will be put out to tender at least every
of 70 per cent has been introduced, which will further restrict the ten years in line with the applicable rules, or at other times should
non-audit services permitted. specific circumstances require this.
The Audit Committee receives written confirmation from the The Committee has the current intention to put the external audit
external Auditor in relation to any relationships that might out to tender no later than the 2023/24 year end. The Committee
have a bearing on their independence, whether they consider has the discretion to accelerate the planned audit tender timeline
themselves independent within the meaning of the UK regulatory at any time. The timeline will be kept under review on an annual
and professional requirements and on their quality control basis in conjunction with the assessment of the effectiveness of
processes and ethical standards. On the basis of the Committee’s the external audit process and the needs of the Group, including
own review, approval requirements in the non-audit services the benefit of stability in the independent oversight provided by
policy, and the Auditor’s confirmation, the Audit Committee is the external audit provision, which the Committee considers to
satisfied with Deloitte’s independence and effectiveness. be in the best interests of shareholders.
Deloitte confirmed that, with one exception, no non-audit The lead audit partner rotates every five years and Ian Waller, the
services prohibited by the FRC’s Ethical Standard were provided current lead audit partner, has been in post since 2013/14 and is
to the Group or parent Company. The one exception was that due to rotate after this 2017/18 year end. A replacement has been
services relating to payroll were provided to an immaterial identified and has been shadowing to ensure a smooth handover.
overseas subsidiary, which was acquired during the period. The The Audit Committee confirms that the Company has complied
services were provided by an associate of Deloitte France prior to with the provisions of the Competition & Markets Authority Order
acquisition and continued post acquisition before ceasing within with regards to external audit tendering and audit responsibilities
nine months of the acquisition having completed. The overseas throughout its financial year ended 30 April 2018.
subsidiary is audited by a firm that is not part of Deloitte’s network,
which acts as a safeguard. In forming their opinion on the Group’s
financial statements, Deloitte place no reliance on the work of the
subsidiary’s auditor. The number of employees and the payroll
charge within this subsidiary are wholly immaterial in the context
of the Group figures. The fees for this work amounted to £8,000.
Deloitte will not perform this work in the future. Jonathan Nicholls
Chairman of the Audit Committee
Following investigation and after consideration of the facts
highlighted above, the Audit Committee concluded that the
17 June 2018
provision of these services did not impact upon Deloitte’s
integrity, objectivity and independence as Auditor to the
Group and parent Company.

Remuneration Committee report
We remain committed to ensuring that our policy continues to drive the right
behaviours from our executives, who remain completely focused on the delivery
of our vision – ‘To be the leading supplier of sustainable packaging solutions’.
You can read more detail in the strategic report starting on

page 2 but some of the key achievements are summarised below.
The business has continued to perform strongly, with adjusted
operating profit at £530 million, net debt/EBITDA of 2.2 times
and adjusted return on average capital employed of 14.1%.
Key achievements by the business

• Award winning sustainability report and annual report.
• 6,201 tonnes carbon dioxide emissions saved by LED lighting in
UK sites in 2017/18.
• Expanding into the US packaging and paper market
with the acquisition of Interstate.
• Numerous packaging awards won for our supply cycle solutions.
• Launch of our Management Standards to 3,500 people managers.
Kathleen O’Donovan —
Chairman of Remuneration • Graduation of the first Paper Technology Apprentices
Committee from DS Smith’s paper division’s inaugural three-year
apprenticeship programme.
Dear shareholders • 239 sites without a lost time accident.
Background • Entered the FTSE 100 Index.
On behalf of the Board, I am pleased to present our Directors’ • Adjusted earnings per share (EPS) increased 9%.
remuneration report for the year ended 30 April 2018. • Total shareholder return (TSR) 628% since 2010.
Our remuneration policy was approved by shareholders at the The landscape for executive pay is continually changing and that,
Annual General Meeting (AGM) in September 2017 and we are together with the need to build public trust, is a continued theme
reporting on our implementation under the new policy in the of the discussions in our meetings. The Committee has oversight
annual report on Directors’ remuneration, which you can find of all senior management remuneration and relevant employment
starting on page 71. The annual report on Directors’ remuneration matters to ensure that we have the best calibre people, either
will be presented for approval (which is an advisory vote) at our through promotion or recruitment, and that these leaders are
AGM on 4 September 2018. properly incentivised. Your Committee seeks to ensure that the
alignment of executive remuneration with both stakeholder
Before I get into the detail of my report, I would like to remind
interests and business outcomes continues to be effective.
shareholders about some achievements against our strategic
priorities in the past year under the leadership of our We have recently submitted our first report under the UK gender
executive team. pay gap regulations, which can be found on our website. Although
our gender pay gap is less acute than the UK national average, we
Recap on our strategy recognise that we have work to do. Acting upon the underlying
To lead the way in To delight our
reasons for the gap and reaching a higher standard of diversity
sustainability customers
is an important area of focus for the business.
by championing sustainable by delivering outstanding
supply cycle solutions and results to them as we As part of our annual decision making cycle we consider how
using materials responsibly increase their sales, the business has performed and look at forecasts for the year to
through our production reduce their costs and come. We consider the feedback from both the employee survey
processes and beyond. manage their risk.
and pulse surveys on how employees feel about the quality of
our leadership. This would include whether the leadership team
Our vision continues to demonstrate living our values, how we measure
is to be the employee performance and if they believe we have the right
leading supplier approach to reward. We review guidance from the government,
of sustainable focus groups and investor bodies and take a holistic view of
packaging market practices. We consider whether our remuneration
solutions framework continues to motivate our leaders to achieve
To realise To double
the potential our size and
the Group’s strategic objectives.
of our people profitability
by creating a safe by driving operational
environment where excellence, growing
every colleague can our market share and
use and develop their expanding into
skills and ideas. new markets.
68
We endeavour to provide the proper incentives, suitably aligned,
Governance
for sustainable high performance from the executive team and
we will continue to report on this in a transparent way. Key objective of the Remuneration Committee
Our objective is to have a fair, equitable and competitive
Year under review total reward package that supports our vision; and to ensure
The key decisions taken during the year were: the rewards are performance-based and encourage
• Finalising the revised remuneration policy for approval long-term shareholder value creation.
by shareholders at the AGM in September 2017. Key responsibilities
• Reviewing the salaries of the Group Chief Executive and • Designing the remuneration policy.
Group Finance Director, taking into account increases for • Implementing the remuneration policy.
the wider workforce.
• Ensuring the competitiveness of reward.
• Setting of the 2017/18 annual bonus targets.
• Designing the incentive plans.
• Setting of the performance criteria for PSP awards granted
• Setting incentive targets and determining award levels.
both in July to the Executive Directors and other senior
• Overseeing all share awards across the Group.
managers, and in October 2017, to the senior management
Members Since
team of our new North America Paper and Packaging division.
• Measurement of performance criteria for incentive awards Kathleen O’Donovan (Chair) 2012
vesting in July 2018. Chris Britton 2013
• Approval of the remuneration package for the newly appointed Gareth Davis 2010
Group Human Resources Director. Ian Griffiths 2014
• Appointment of new independent adviser Jonathan Nicholls 2009
PricewaterhouseCoopers LLC. Louise Smalley 2014
Kathleen O’Donovan The Group General Counsel and Company Secretary acts as
Chairman of the Remuneration Committee Secretary to the Committee.
Details of individual Directors’ attendance can be found
17 June 2018
on page 55.
“The Remuneration Committee remains

firmly committed to the principle of pay for
performance, ensuring that rewards for the
senior leadership team are aligned with the
experience of long-term shareholders.”
Kathleen O’Donovan
Context of the Committee’s decisions
Our remuneration policy is
Allocation of time
Strategy: 30%
Annual pay cycle
including bonus and LTI
targets: 30%
specifically aligned to designed to designed to
Shareholder consultation
built around the Group’s allow us to encourage
our strategy values recruit and the right and governance: 40%
retain high behaviours
calibre to deliver
leaders who long-term
can deliver and
operational sustainable
excellence growth

At a glance
Remuneration policy
The table below sets out a summary of how the remuneration policy will apply during 2018/19.
Remuneration element Application of the remuneration policy
Base salary • Salaries will be increased by 3% on 1 August 2018 as follows:
• Group Chief Executive £763,250; and
• Group Finance Director £479,600.
Pension • No changes to contribution or cash alternative rates of:

• Group Chief Executive 30%; and
• Group Finance Director 20%.
Annual bonus • No changes to maximum award levels of:

• Bonus paid half in cash and half in deferred shares, under the deferred share bonus plan (DSBP),
with the shares vesting after three years.
• The performance measures for 2018/19 will remain at 50% EBTA and 50% ROACE.
PSP • No changes to maximum award levels of:

• The performance measures for 2018/19 will remain at EPS, ROACE and relative TSR with
equal weighting.
• Two-year post-vesting holding period applies, resulting in a total five-year period from grant.
Shareholding guidelines • Shareholding target remains at 225% of salary for the Group Chief Executive and 175% for
the Group Finance Director.
• Actual holding at 30 April 2018 was 1,305% and 249% respectively.
Key objectives of our remuneration policy

The policy aims to deliver a remuneration package that:
• attracts and retains high calibre executive directors and senior managers in a challenging and competitive business environment;
• reduces complexity, delivering an appropriate balance between fixed and variable pay for each Executive Director and the senior
management team;
• encourages long-term performance by setting challenging targets linked to sustainable growth;
• is strongly aligned to the achievement of the Group’s objectives and shareholder interests and to the delivery of sustainable value
to shareholders; and
• seeks to avoid creating excessive risks in the achievement of performance targets.
2017/18 outcomes
Performance measure Threshold Target Maximum Actual Weighting % of maximum achieved
Annual bonus
Adjusted EBTA £378.2m £398.1m £418.0m £414.2m 50% 90%
Adjusted ROACE 14.0% 14.7% 15.4% 15.2% 50% 86%
Overall 88%
PSP
Average three-year EPS 26.6p 30.4p 31.8p 33.3% 100%
Average three-year ROACE 13.0% 15.0% 14.9% 33.3% 96%
Total shareholder return ranking Median Upper quartile 12th 33.3% 83%
Overall 93%
The relative TSR performance for the 2014/15 award was measured against the constituents of the FTSE 250 Industrial Goods and Services Supersector.
Awards for 2016/17 and 2017/18 use the broader comparator group of the FTSE 350 in reflection of the growth of the Company and its move into the FTSE 100.
Awards vest on a straight-line basis between threshold and maximum performance.
For threshold performance 0% and 25% of the maximum award vests for the annual bonus and PSP respectively.
70
Remuneration policy
This part of the remuneration report sets out the key elements of our Directors’ remuneration policy applicable from 5 September 2017
when the policy was approved by shareholders at the AGM by a vote in favour of 96.2%. The full policy can be found in the 2017 annual
report on our website.
Current remuneration policy*
Governance
Element, purpose Operation and performance metrics Maximum opportunity
and link to strategy
Basic salary Normally reviewed by the Committee annually and fixed for the twelve Salaries will normally be increased in
To help recruit and retain months commencing 1 August. line with increases for the workforce
key senior executives. in general, unless there has been an
The Committee takes into account:
increase in the scope, responsibility
To provide a competitive • role, competence and performance; or complexity of the role, when
salary relative to
• average change in broader workforce salary; and increases may be higher. Phased
comparable companies,
• total organisational salary budgets. higher increases may also be awarded
in terms of size
to new Executive Directors who were
and complexity. When external benchmarking is used, the comparator groups are chosen
hired at a discount to the market
having regard to:
level to bring salary to the desired
• size: market capitalisation, turnover, profits and the number of employees; mid-market positioning, subject to
• diversity and complexity of the business; individual performance.
• geographical spread of the business; The aim is to position salaries around
• relevance to the paper, plastics and packaging industry; and the mid-market level, although higher
• domicile of the Executive Director. salaries may be paid, if necessary,
in cases of external recruitment
or retention.
Annual bonus Targets are set annually. The performance measures, targets and Maximum bonus potential of 200% of
To incentivise executives weightings may vary from year to year in order to align with the Company’s base salary, with target bonus being
to achieve or exceed strategy and goals during the year to which the bonus relates. one half of the maximum.
specific, predetermined Bonus payouts are determined by the Committee after the year end, based Bonus starts to be earned at the
objectives during a on performance against predetermined objectives, at least the majority of threshold level (below which 0%
one-year period. which will be financial. is payable).
To reward ongoing Up to half of the bonus is paid in cash and the balance is deferred Current maximum potential for each
delivery and contribution into shares. Executive Director is set out in the
to strategic initiatives. annual report on remuneration.
The deferred bonus shares vest after three years. Dividend equivalents
Deferred proportion of arising over the period between the grant date and the vesting date are
bonus, awarded in shares, paid in cash or shares in respect of the shares which vest.
provides a retention
element and additional The annual bonus plans are not contractual and bonuses under the plans are
alignment of interests not eligible for inclusion in the calculation of the participating executives’
with shareholders. pension plan arrangements.
Malus and clawback provisions apply to the annual bonus plan and the
deferred bonus shares so that individuals are liable to repay/forfeit some
or all of their bonus if there is a material misstatement of results, error in
calculation, or if there is serious misconduct.
Share ownership Executive Directors are expected to build and maintain a shareholding in None
guidelines the Company’s shares as a multiple of their base salary within five years of
To further align appointment as an Executive Director (Group Chief Executive 225%, Group
the interests of Finance Director 175%). To achieve this, Executive Directors are expected
executives with to retain at least 50% of shares (net of tax) which vest under the Company’s
those of shareholders. share plans until the share ownership guidelines are met. Nil cost options
which have vested but that the Executive Director has yet to exercise are
considered to count towards the shareholding on a notional post-tax basis.
Non-Executive Directors are expected to build and maintain a shareholding
that is equivalent to 50% of their annual fee from the Company within two
years of their date of appointment.
* Unaudited

Remuneration Committee report continued
Element, purpose Operation and performance metrics Maximum opportunity

and link to strategy
Performance share Awards of nil-cost options are made annually with vesting dependent on the The maximum annual award
plan (PSP) achievement of performance conditions over the three subsequent years. under the PSP that may be granted
To incentivise Executive Awards will vest, subject to performance, on the third anniversary of grant to an individual in any financial
Directors and other senior and will be subject to an additional two-year holding period post vesting, year is 225% of salary in normal
executives to achieve during which time awarded shares may not be sold (other than for tax). circumstances and 400% of salary
returns for shareholders in exceptional circumstances, which
The Committee reviews the quantum of awards annually to ensure that is limited to buy-out awards
over a longer time frame.
they are in line with market levels and appropriate, given the performance under recruitment.
To help retain executives of the individual and the Company.
and align their interests Actual award levels to Executive
Vesting of awards would normally be based on: Directors are set out in the annual
with shareholders through
building a shareholding in i. the Company’s total shareholder return performance against a peer report on remuneration.
the Company. group of companies selected by the Committee at the start of the 25% of the relevant part of
performance period. The vesting scale is median to upper quartile the award will vest for achieving
of the group of companies, with nothing vesting for below median threshold performance, increasing
performance; and to full vesting for the achievement
ii. key financial measures of performance (such as, but not limited to, of maximum performance.
earnings per share, and return on average capital employed).
Dividend equivalents arising over the period between the grant date
and the vesting date are paid in cash or shares in respect of the shares
which vest.
Malus and clawback provisions apply to the PSP so that individuals
are liable to repay/forfeit some or all of their shares if there is a
material misstatement of results, or error in calculation, or if
there is serious misconduct.
All Employee Executive Directors have the opportunity to participate in the UK Consistent with prevailing HMRC
Share Plan or international sharesave plans on the same terms as other eligible limits, currently £500 per month
Encourages long-term employees. There are no performance conditions applicable to awards. (or local currency equivalent) for
shareholding in the SAYE plan.
the Company.
Pension Executive Directors can elect to: Maximum: 30% of base salary
To remain competitive (combined cash supplement
• participate in the Group’s registered defined contribution plan (DC Plan); or
in the marketplace and DC Plan contribution). Future
• receive a salary supplement; or
and provide income appointments to the Board would
• a combination of the above. have a maximum of no more than
in retirement.
25% of base salary.
Benefits Directors, along with other UK senior executives, receive a car allowance or Benefit levels may be increased in
To help retain employees company car equivalent, income protection insurance, four times life cover, line with market levels to ensure they
and remain competitive family medical insurance and subsidised gym membership. Additional remain competitive and valued by the
in the marketplace. benefits (including a relocation allowance) may be provided from time recipient. However, as the cost of the
to time, where they are in line with market practice. provision of benefits can vary without
Any reasonable business related expenses may be reimbursed any change in the level of provisions,
(including tax thereon, if deemed to be a taxable benefit). no maximum is predetermined.
Non-Executive Reviewed annually by the Board (after recommendation by the Committee No prescribed maximum
Directors and in respect of the Chairman). annual increase.
Chairman Fee increases, if applicable, are normally effective from 1 August. The Board Details of current fees are set out in
Attract and retain high and, where appropriate, the Committee, considers pay data at comparable the annual report on remuneration.
performing individuals. companies of similar scale.
Aggregate annual fees limited
The Senior Independent Director and the Chairmen of the Audit and to £1,000,000 by Articles
Remuneration Committees receive additional fees. of Association.
No eligibility for participation in bonuses, retirement plans or share plans
but limited benefits may be delivered in relation to the permanency of their
duties as a Director (e.g. hospitality, provision of a mobile phone, iPad/laptop
and travel-related expenses). Tax may be reimbursed if these benefits are
deemed to be a taxable benefit.
If there is a temporary yet material increase in the time commitments for
non-Executive Directors, the Board may pay extra fees on a pro-rata basis
to recognise the additional workload.
72
Illustration of the remuneration policy for 2018/19
The balance between fixed and variable ‘at risk’ elements of remuneration changes with performance. The Company’s remuneration
policy results in a significant proportion of remuneration received by Executive Directors being dependent on Company performance.
The application of the total remuneration of the Executive Directors for a minimum, target and maximum performance in 2018/19 is
presented in the charts below. These figures are indicative as no adjustment for future share price movement and dividend accrual
can have been made.
Governance
Miles Roberts Adrian Marsh
Maximum (fixed remuneration plus maximum annual bonus opportunity plus 100% vesting of performance shares)
£1,013,900 £1,526,500 £1,717,300 £594,700 £719,400 £839,300
Fixed pay: 24% Bonus: 36% PSP: 40% Fixed pay: 28% Bonus: 33% PSP: 39%
Target (fixed remuneration plus half of maximum annual bonus opportunity plus 25% vesting at threshold of performance shares)
£1,013,900 £763,300 £429,300 £594,700 £359,700 £209,800
Fixed pay: 46% Bonus: 35% PSP: 19% Fixed pay: 51% Bonus: 31% PSP: 18%
Minimum (fixed remuneration only, i.e. latest known salary, benefits and pension)
£1,013,900 £594,700
Fixed pay: 100% Fixed pay: 100%
Annual report on remuneration (audited)

The table below shows how we have applied the current remuneration policy during 2017/18. It discloses all the elements of
remuneration received by the Directors during the year. Full details of the policy can be found in our 2016/17 annual report available
on our website.
Single total figure of remuneration for each Director (audited)
Long-term
Salary/fees Benefits1 Annual bonus2 incentives3 Pensions4
Total Total
£’000 £’000 £’000 £’000 £’000
2017/18 2016/17
2017/18 2016/17 2017/18 2016/17 2017/18 2016/17 2017/18 2016/17 2017/18 2016/17 £’000 £’000
Executive Directors
Miles Roberts 737 718 22 22 1,296 651 1,769 3,255 221 215 4,045 4,861
Group Finance Director
Adrian Marsh 463 451 19 19 611 307 949 1,371 93 90 2,135 2,238
Total 1,200 1,169 41 41 1,907 958 2,718 4,626 314 305 6,180 7,099
Non-Executive Directors
Chairman
Gareth Davis 269 261 — — — — — — — — 269 261
Chris Britton 57 55 — — — — — — — — 57 55
Ian Griffiths 57 55 — — — — — — — — 57 55
Jonathan Nicholls 75 73 — — — — — — — — 75 73
Kathleen O’Donovan 68 65 — — — — — — — — 68 65
Louise Smalley 57 55 — — — — — — — — 57 55
Total 583 564 — — — — — — — — 583 564
1. Taxable benefits in 2017/18 principally include a car allowance of £20,000 for Miles Roberts and £17,500 for Adrian Marsh. Both Directors also receive income
protection, life and health cover.
2. The annual bonus is paid 50% in cash and 50% in deferred shares as described in the policy table on page 71.
3. The value of LTIs for 2017/18 represents the estimated value of the 2015 PSP using the average share price for the last three months of the year of £4.89
(the performance period for this award being the three years ending 30 April 2018).
The LTIs for 2016/17 were valued in the 2016/17 annual report using the average share price for the last three months of that financial year. This has been
restated based on the share price on the actual vesting date now that this share price is known. This also impacts the total figure for the prior year. Note that
the SMP was discontinued in 2014 so 2016/17 was the last year that it was included.
4. Miles Roberts receives an annual pension allowance of 30% of basic salary in lieu of membership of the defined contribution scheme. Adrian Marsh is
a member of the defined contribution scheme. He contributes up to his annual allowance and the Company contribution is paid as a cash supplement. The annual
pension allowances are not pensionable and are not considered to be salary for the purpose of calculating any bonus payment.

Fixed pay
Basic salary
Salaries effective from:
Received in
1 August 2016 1 August 2017 1 August 2018 2017/18
(£) (£) (£) (£)
Miles Roberts 723,000 741,000 763,250 736,500

Adrian Marsh 454,250 465,600 479,600 462,763
When considering salaries the Committee takes account of a number of factors, with particular focus on the general level of salary
increases awarded throughout the Group. The salary review for the UK workforce as a whole was between 1% and 5% (and on average
2.5%). Where relevant, the Committee also considers external market data on salary and total remuneration and the Committee applies
judgement when considering such data. The Executive Directors’ salary increase for the 2018 review was 3% (2.5% for 2017).
Fees for non-Executive Directors and the Chairman

The rates for the Chairman’s and non-Executive Directors’ fees are:
Base fee effective from
Received in
1 August 2016 1 August 2017 1 August 20181 2017/18
(£) (£) (£) (£)
Gareth Davis 263,680 270,300 278,400 £268,645

Chris Britton 55,900 57,300 59,000 £56,950
Ian Griffiths2 55,900 57,300 – £56,950
Jonathan Nicholls3 55,900 57,300 59,000 £75,200
Kathleen O’Donovan4 55,900 57,300 59,000 £67,700
Louise Smalley 55,900 57,300 59,000 £56,950
1. The fee increase for 2018 was 3% (2.5% in 2017).
2. Ian Griffiths is stepping down from the Board on 28 June 2018.
3. The amount received in 2017/18 includes payment in respect of Senior Independent Director fee of £7,500 per annum and Chairman of the Audit Committee
fee of £11,000 from 1 August 2017. From 1 August 2018 the Chairman of the Audit Committee fee was increased to £13,500 per annum.
4. The amount received in 2017/18 includes payment in respect of Chairman of the Remuneration Committee fee of £11,000 from 1 August 2017. From
1 August 2018 this fee was increased to £13,500 per annum.
Variable pay
The Committee believes it is important that a significant portion of the Executive Directors’ package is performance-related and that
the performance conditions support the delivery of the Group’s strategy and the long-term sustainable success of the Company. The
remuneration policy encourages long-term performance by setting challenging targets linked to sustainable growth for the variable pay,
which consists of the annual bonus and the longer-term PSP. The Remuneration Committee can use discretion to retrospectively adjust
the targets, for example after a substantial restructuring, and would disclose and fully explain if it had.
Performance targets
An explanation of the performance conditions for the annual bonus and PSP are set out below.
Total shareholder return (TSR)
TSR is the increase (or decrease) in the value of a notional investment in a share in the Company and each of the companies in the
Industrial Goods and Services Supersector within the FTSE 350 Index over the three-year PSP performance period, taking account
of share price movement and the value of dividends (which are deemed to be re-invested) over that period.
Adjusted earnings per share (EPS)
Adjusted EPS is disclosed in the Company’s annual report and accounts and is the portion of the Group’s adjusted after tax profit
allocated to each outstanding share. Adjusted EPS is an indicator of the underlying performance of the DS Smith Group. The extent to
which a PSP award subject to this performance condition vests, depends on the Company’s average adjusted EPS performance over
the three financial years prior to vesting.
Adjusted return on average capital employed (ROACE)
ROACE is disclosed in the Company’s annual report and accounts. It is defined as operating profit before amortisation and exceptional
items divided by average capital employed and is a measure of the efficiency and profitability of the Company’s assets and investments.
The performance period for the annual bonus is measured over one year. The performance period for the PSP is measured over three
years with targets based on the average of the three financial years prior to vesting.
Adjusted earnings before tax and amortisation (EBTA)
EBTA is adjusted earnings before taxation and amortisation after the effect of pension interest but does not include the results of our
investments in associates. The performance period for the annual bonus is measured over one year.
74
Annual bonus (audited)
Bonus earned in 2017/18
The Executive Directors’ targets for the 2017/18 bonus were based on budgeted financial targets set out in the tables below, with
annual bonus payments determined by reference to performance over the financial year ended 30 April 2018. Achievement is calculated
on a straight-line basis between threshold and target and between target and maximum.
Governance
The table below shows the target ranges set, the business outturn and the bonus outcomes achieved.
Targets
Threshold Target
Financial measure 0% of maximum 50% of maximum1 Maximum Achieved
Adjusted EBTA £378.2 million £398.1 million £418.0 million £414.2 million
Adjusted ROACE 14.0% 14.7% 15.4% 15.2%
Outcomes
% of performance target achieved Miles Roberts Adrian Marsh
Adjusted EBTA 45/50 45/50

Adjusted ROACE 43/50 43/50
Total (as a proportion of the maximum opportunity) 88/100 88/100
Maximum bonus opportunity as a % of salary 200% 150%
Value of bonus paid in cash £648,120 £305,423
Value of bonus deferred into shares £648,120 £305,423
Overall award level2 £1,296,240 £610,846
1. The targets for threshold and maximum are set -/+5% of the target. There was a reduction in the ROACE target from 15.4% in 2016/17 to 14.7%. This reduction
reflected the 2016/17 investment activity in a number of individually small acquisitions in Portugal, Denmark and the UK, which had a dilutive impact overall of
0.9%, taking the baseline to 14.5%. There was therefore an underlying increase in the ROACE target from 2016/17 to 2017/18 of 0.2%.
2. The annual bonus for the financial year 2017/18 will be paid 50% in cash and 50% in deferred shares with a vesting period of three years. The only qualifying
condition for the deferred bonus awards to vest is for the Executive Director to remain in the employment of the Company at the vesting date and not
serving notice.
Performance is assessed on a constant currency and consistent basis and therefore the actual published results have been restated
for bonus purposes using budgeted exchange rates and adjusted for the impact of unbudgeted acquisitions. The policy applied to the
latter is to take into account only the upside or downside in earnings versus the acquisition business plan for the period post-acquisition.
This ensures that management are only rewarded (or penalised) for business performance above (or below) the business plan which
supported the acquisition price.
For the 2017/18 bonus the reported EBTA of £468.1 million has been reduced by £53.9 million to £414.2 million (£44.5 million in
relation to the acquisition business plans, thereby only accounting for the performance above the acquisition plans, and £9.4 million
to remove the favourable currency effect). Reported ROACE of 14.1% (calculated as £529.5 million EBITA divided by £3,753.2 million
capital employed) has been adjusted by 1.2% for the removal of the acquisition business plans (EBITA of £57.2 million and capital
employed of £655.6 million) and -0.1% for the favourable currency effect. The resulting 15.2% ROACE is the bonusable outcome
and means management are rewarded for outperformance above the acquisition business case.
The improvements in earnings over and above the acquisition business plans, which impacts both EBTA and ROACE, primarily reflects
significantly accelerated synergy benefits and cost savings above the Board approved plan for the Interstate Resources acquisition.
The annual bonus plan for the Executive Directors and other senior executives is operated as shown above. Bonus results are
determined by the Committee after the year end, based on performance against targets. Bonus awards are measured against the
achievement of the Group’s objectives. Maximum bonus opportunity for 2017/18 is shown above for the Executive Directors and is
generally between 60% and 110% for the other senior executives.
Implementation for 2018/19
Implemented in line with the policy.
The annual bonus will remain at a maximum opportunity of 200% of salary for the Group Chief Executive and 150% for the Group
Finance Director.
It remains based on EBTA and ROACE, each with equal weighting.
In the event of an acquisition in the year, the Committee will assess how the financial performance of the acquired company should
be included.
In the opinion of the Committee, the annual bonus measures and targets for 2018/19 are commercially sensitive and accordingly are
not disclosed. These will be disclosed next year in the Directors’ remuneration report, so that achievement against those targets will be
visible, in retrospect.

Awards vesting based on performance in the three-year period to 2017/18

The PSP award granted on 24 July 2015 is based on performance over the three years to 30 April 2018. The 2015 PSP awards were based
on equal weighting of TSR, EPS and ROACE performance conditions. An explanation for these performance conditions is on page 74. The
TSR, ROACE and EPS performance conditions attached to these awards and actual performance against these conditions are set out in
the table below.
The Committee’s policy is that no adjustments for exchange rate movements are made to EPS or ROACE over the three-year performance
period as the Committee feels that these are of a long-term nature and fluctuations are more likely to average out over the three years.
In calculating the average adjusted ROACE for the performance period the Committee reviewed the impact of the acquisitions made
during the year. The Committee considered it appropriate to recognise an element of dilutive impact due to the scale of the acquisitions.
As a consequence the 2017/18 Group reported ROACE of 14.1% has been adjusted by 0.4% to 14.5% in the calculation of the
three-year average.
Performance share plan (PSP) (audited)

TSR, ROACE and EPS performance targets on long-term incentives
Threshold Maximum Vesting
Weighting (25% vests) (100% vests) Outcome (% of maximum)
Three-year average EPS One third 26.6p 30.4p 31.8p 100%
Three-year average ROACE One third 13.0% 15.0% 14.9% 96%
Relative TSR1 One third Median quartile Upper quartile 12 out of 37 83%
Overall 93%
1. Measured against the FTSE 250 Industrial Goods and Services Supersector.
Resulting award levels

Number of Number of Number of Re-investment Estimated value2
Executive Director Award shares at grant shares to vest1 shares to lapse of dividend Total (£’000)
Miles Roberts PSP 356,214 331,279 24,935 30,353 361,632 1,769

Adrian Marsh PSP 191,107 177,729 13,378 16,284 194,013 949
1. These shares are subject to a two-year holding period.
2. The estimated value of the vested shares is based on the average share price during the three months to 30 April 2018 (£4.89). These shares will vest on the
third anniversary of grant on 24 July 2018.
The table on page 78 sets out details of the Executive Directors’ outstanding share awards.
2014 PSP awards values (vested in full during 2017/18)
Miles Roberts
£1,274,099 £346,849 £148,517 PSP original award value
PSP award appreciation
Dividend equivalents
Adrian Marsh
£683,547 £186,082 £79,678
Value of the original awards based on the share price on 24 July 2015 of £3.846 for Miles Roberts and Adrian Marsh. The estimated appreciation value of the vested
shares is based on the average share price during the three months to 30 April 2018 (£4.89).
Implementation in 2018/19 Targets may be adjusted by the Committee (for example,

In line with the award levels in 2017/18: to reflect the impact of acquisitions and disposals) to ensure
that the conditions achieve their original purpose.
• The award to be made in 2018 will be at 225% of salary for
the Group Chief Executive and at 175% of salary for the An average adjusted EPS/ROACE for the three years of the
Group Finance Director. performance period will be calculated and compared to the
• Shares that vest under the PSP awarded in 2018 to Executive targets below. To deliver against a target which is measured as
Directors must be retained for a further two years before they the average over the performance period requires steady and
can be sold. sustainable growth over the period. The Committee considers
• The awards will be granted as nil-cost options. that the use of such a target is a more demanding requirement
• The PSP will be subject to three performance measures: relative than one which is based only on performance in the final year.
TSR, three-year average adjusted EPS and three-year average
adjusted ROACE, with equal weighting on each element.
76
The targets for the 2018 PSP award will be: All employee share plan
3-year average 3-year average We believe that our Sharesave plan (SAYE) is a valuable way of
% vesting as Relative TSR EPS ROACE
a proportion one third1 one third2 one third3 aligning our employees’ interests with those of our long-term
100% Upper quartile 43.9p 15.7% shareholders. Our commitment is to deliver an equal opportunity
for all of our employees to participate in a plan that allows them to
Between 25% Between median 38.4p 14.5%
be engaged with the strategic direction of DS Smith and to share
Governance
and 100% and upper quartile to 43.9p to 15.7%
in its financial success.
25% Median quartile 38.4p 14.5%
Executive Directors are eligible (along with all employees of
Awards vest on a straight-line basis between threshold and
maximum performance. the Company and participating subsidiaries of the Group) to
1. The comparator group for measurement of relative TSR will be the FTSE participate in the SAYE. Options are granted under the SAYE,
350 Industrial Goods and Services Supersector. which is an HMRC tax-advantaged plan in the UK. Participants
2. Three-year average adjusted EPS, as disclosed in the annual report, over
the forthcoming three financial years, commencing with the financial year contract to save up to the equivalent of £250 per month over a
in which the award is made. Assuming steady growth, this will require the period of three years (two years in the US). The option price is
Company to achieve an average compound annual growth in EPS over the
three-year period of between 4% and 11%.
discounted by up to 20% (15% in the US) of the average closing
3. Three-year average adjusted ROACE over the forthcoming three financial mid-market price of the Group’s shares on the three dealing days
years, commencing with the financial year in which the award is made. prior to invitation (20-day average to the day before grant in
France and the mid-market average on the day of grant in the US).
In common with most plans of this type, there are no performance
conditions applicable to options granted under the SAYE.
This Plan will continue on an unchanged basis for 2018/19.
Market price
Options held at Options granted Options exercised Options lapsed on date of Options held at Exercise Dates from which
Executive Director 30 April 2017 during the year during the year during the year exercise (p) 30 April 2018 price (p) exercisable Expiry date
Miles Roberts 3,345 — 3,345 — 494.4 – 269.0 1 Apr 17 30 Sep 17

2,702 — — — — 2,702 333.0 1 Apr 20 30 Sep 20
Adrian Marsh 3,345 — 3,345 — 478.8 – 269.0 1 Apr 17 30 Sep 17
2,702 — — — — 2,702 333.0 1 Apr 20 30 Sep 20
Share ownership guidelines

Executive Directors are required to build a significant shareholding in the Company within five years from the date of their appointment.
Non-Executive Directors are required to build up a holding of 50% of their fees in shares within two years of their date of appointment.
Current shareholdings are summarised in the following table:
Unvested Unvested
and subject to and subject to Shareholding Shareholding
Total as at Total as at performance continued Vested but required at 30 April 2018 Requirement
Name of Director 30 April 2018 30 April 2017 conditions1 employment4 not exercised2 (% salary/fee) (% salary/fee)3 met
Executive Directors
Miles Roberts 1,651,589 1,629,026 751,495 734,209 375,700 225% 1,305% Yes
Adrian Marsh 221,893 43,504 367,205 369,215 - 175% 249% Yes
Non-Executive
Directors
Gareth Davis 106,900 106,900 — — — 50% 207% Yes
Chris Britton 10,550 10,550 — — — 50% 96% Yes
Ian Griffiths 15,000 15,000 — — — 50% 137% Yes
Jonathan Nicholls 109,307 109,307 — — — 50% 753% Yes
Kathleen O’Donovan 10,471 10,471 — — — 50% 80% Yes
Louise Smalley 14,615 14,615 — — — 50% 133% Yes
1. Includes the 2015/16 and 2016/17 PSP.
2. Nil cost options which have vested but have yet to be exercised are considered to count towards the shareholding requirement, other than any such shares that
correspond to the estimated tax and national insurance contributions.
3. Based on the salary/fee as at 1 August 2017 and a share price of £5.224 (being the closing price on 30 April 2018) multiplied by the current year shareholding.
4. Includes the 2014/15, 2015/16 and 2016/17 deferred bonus shares, the 2014/15 PSP which is due to vest on 24 July 2018 but is not subject to any further
performance conditions and the 2016/17 Sharesave.
Failure to meet the minimum shareholding requirement is taken into account when determining eligibility for share-based incentive
awards. There have been no changes to the shareholdings set out above between the financial year end and the date of this report.
It is currently intended that any ordinary shares required to fulfil entitlements under the DSBP will be provided by Computershare
Trustees (Jersey) Limited (the Trust), which buys shares on the market to do so. The Trust may also be used to fulfil certain entitlements
under the PSP and the SAYE (along with new issue shares for other entitlements).

Outstanding share awards

The table below sets out details of Executive Directors’ outstanding share awards, which will vest in future years subject to performance
and/or continued service.
Notional Market Vesting date
dividend price on Market (if performance
Awards held at shares Exercised/ Lapsed/ date of price at date of Awards held at conditions Expiry
Award date 30 April 2017 Granted accrued vested forfeited award (p)1
exercise (p) 30 April 2018 are met) date
Miles Roberts
PSP 30 Jul 14 375,700 — 36,260 36,260 — 267.5 515.0 375,700 30 Jul 17 30 Jul 24
PSP 24 Jul 15 356,214 — — — — 384.6 — 356,214 24 Jul 18 24 Jul 25
PSP 1 Jul 16 415,876 — — — — 379.8 — 415,876 1 Jul 19 1 Jul 26
PSP 18 Jul 17 — 335,619 — — — 484.7 — 335,619 18 Jul 20 18 Jul 27
1,483,409
DSBP 30 Jul 14 158,733 — — 158,733 — 267.5 515.0 – 30 Jul 17 30 Jul 24
DSBP 24 Jul 15 156,734 — — — — 384.6 — 156,734 24 Jul 18 24 Jul 25
DSBP 1 Jul 16 146,018 — — — — 379.8 — 146,018 1 Jul 19 1 Jul 26
DSBP 18 Jul 17 — 67,123 — — — 484.7 — 67,123 18 Jul 20 18 Jul 27
369,875
SMP 30 Jul 14 238,099 — 22,980 261,079 — 267.5 515.0 – 30 Jul 17 30 Jul 24
–
Adrian Marsh
PSP 30 Jul 14 186,915 — 18,040 204,955 — 267.5 482.2 – 30 Jul 17 30 Jul 24
PSP 24 Jul 15 191,107 — — — — 384.6 — 191,107 24 Jul 18 24 Jul 25
PSP 1 Jul 16 203,199 — — — — 379.8 — 203,199 1 Jul 19 1 Jul 26
PSP 18 Jul 17 — 164,006 — — — 484.7 — 164,006 18 Jul 20 18 Jul 27
558,312
DSBP 30 Jul 14 47,383 — — 47,383 — 267.5 482.2 – 30 Jul 17 30 Jul 24
DSBP 24 Jul 15 72,074 — — — — 384.6 — 72,074 24 Jul 18 24 Jul 25
DSBP 1 Jul 16 68,797 — — — — 379.8 — 68,797 1 Jul 19 1 Jul 26
DSBP 18 Jul 17 — 31,629 — — 484.7 — 31,629 18 Jul 20 18 Jul 27
172,500
SMP 30 Jul 14 71,074 — 6,859 77,933 — 267.5 482.2 – 30 Jul 17 30 Jul 24
–
1. The market price on the date of award was the average price of a DS Smith share for the three trading days preceeding the award.
The targets for historical awards granted under PSP are set out below:
3-year average
Plan Year 3-year average ROACE adjusted EPS TSR1
Performance share plan 2014/15 13.0% — 15.0% 26.6p — 30.4p Median

2015/16 14.5% — 15.7% 30.1p — 34.3p to upper
2016/17 14.5% — 15.7% 34.2p — 39.1p quartile
1. The awards in 2015 and 2016 are measured against the FTSE 250 Industrial Goods and Services Supersector. The 2017 award is measured against the
FTSE 350 Industrial Goods and Services Supersector.
2015, 2016 and 2017 PSP award: one-third based on relative TSR, one-third based on three-year average adjusted EPS and one-third
based on three-year average adjusted ROACE. 25% of the award vests for achieving threshold performance, increasing on a straight-line
basis to full vesting for maximum performance. Details of the number of shares to vest under the 2015 award are set out on page 76.
Dividend equivalents for the DSBP award in 2015 accrued during the vesting period and are paid in cash shortly after the award vests.
Miles Roberts will receive £63,634 and Adrian Marsh will receive £29,262.
78
External appointments
The Board supports Executive Directors taking up appointments outside the Company to broaden their knowledge and experience.
Each Executive Director is permitted to accept one non-Executive appointment (or in exceptional circumstances two appointments)
from which they may retain any fee. Any external appointment must not conflict with a Director’s duties and commitments to DS Smith.
Miles Roberts was a non-Executive Director of Aggreko plc and retained fees of £61,000 for the year ended 30 April 2018 (he was
Governance
appointed on 7 March 2017 and retained fees of £9,541 in 2016/17). Adrian Marsh does not currently have any remunerated
external appointments.
Notice period and payment for loss of office

The Committee’s policy is that the notice periods for Executive Directors appointed will not exceed one year. Non-Executive Directors
have letters of appointment for a term of three years whereupon they are normally renewed, but generally for no more than three
terms in aggregate. The notice period is one month by either the Company or the non-Executive Director. Non-Executive Directors
are not eligible for payments on termination. In line with the UK Corporate Governance Code (the Code), all non-Executive Directors are
subject to annual re-election by shareholders at the AGM. Their letters of appointment detail the time commitment expected of each
non-Executive Director. Both these and the Executive Directors’ service contracts are available for inspection at the registered office
during normal business hours and on the date of the AGM.
Date of contract/letter of
appointment Expiry of current term
Gareth Davis Chairman 26 April 2016 31 May 2019

Miles Roberts Group Chief Executive 4 May 2010 12 months by either the Director or the Company
Adrian Marsh Group Finance Director 24 September 2013 12 months by either the Director or the Company
Chris Britton 7 March 2016 5 March 2019
Ian Griffiths 23 June 2017 22 June 2020
Jonathan Nicholls Senior Independent Director 24 November 2015 30 November 2018
Kathleen O’Donovan 24 November 2015 4 December 2018
Louise Smalley 23 June 2017 22 June 2020
Payments to past Directors or for loss of office (audited)

No payments were made to past Executive Directors during the year ended 30 April 2018 (2016/17: Nil). No payments were made in
respect of loss of office during the year ended 30 April 2018 (2016/17: Nil).
Statement of change in pay of Group Chief Executive compared with other employees (audited)
The table below shows the change in the Group Chief Executive’s remuneration compared to all full-time equivalent employees based
in the UK. The UK employee workforce was chosen as a suitable comparator group as the Group Chief Executive is based in the UK
(albeit with a global role and responsibilities) and pay changes across DS Smith may vary widely depending on local market conditions.
Group Chief Executive All UK employees
Percentage change Percentage change
2017 to 2018 2017 to 2018
Salary 2.6% 2.6%

Benefits 0.0% 0.0%
Bonus 99.1% 63.3%
Relative importance of spend on pay

The table below shows the expenditure and percentage change in overall spend on employee remuneration and dividends.
£ million unless 2017/18 2016/17 Percentage
otherwise stated £m £m change
Overall expenditure on employee pay 1 1,194 1,046 14%

Dividend paid in the year 157 121 30%
1. Total remuneration reflects overall employee costs and includes some exchange rate fluctuation. See financial statements note 6 for further information.

Remuneration of the Group Chief Executive

The table below shows the total remuneration figure for the Group Chief Executive during each of those financial years. The total
remuneration figure includes the annual bonus and LTIP awards which vested, based on performance in those years. The annual bonus
and LTIP percentages show the payout for each year as a percentage of the maximum available for the financial year.
2009/101 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2 2017/18
Total remuneration (£’000) 1,499 1,796 2,170 6,057 3,696 5,527 4,447 4,861 4,045
Annual bonus (%) 100% 100% 100% 82% 85% 88% 79% 45% 88%
LTIP vesting (%) 28% 100% 100% 100% 98% 92% 94% 100% 93%
1. 2009/10 figures relate to the previous Group Chief Executive, Tony Thorne.
2. The 2016/17 figure has been updated to include the actual share price on the date of vesting for the PSP and SMP now that this is known.
Total shareholder return from May 2009

Review of past performance —
1,300 +1,211% total shareholder return graph
1,100 This graph illustrates the Company’s TSR performance
since 1 May 2009, relative to the FTSE 100 Index as well
900 as the FTSE 250 Index. In December 2017 the Company
700 joined the FTSE 100 index from the FTSE 250 Index. As at
30 April 2018 DS Smith ranked 88 by market capitalisation.
500
This graph looks at the value, over the nine years to 30 April
300 2018, of an initial investment of £100 in DS Smith shares
compared with that of £100 invested in both the FTSE 100
100
0 and FTSE 250 Index. The other points plotted are the values
09 10 11 12 13 14 15 16 17 18
at intervening financial year ends.
DS Smith
FTSE 100
FTSE 250
80
Voting on the remuneration report at the 2017 AGM
At the AGM held in 2017, votes cast by proxy and at the meeting in respect of the Directors’ remuneration were as follows:
Votes for including Total votes cast Total votes cast
discretionary Percentage Votes Percentage excluding votes Votes (including
Resolution votes for against against withheld withheld1 discretionary votes)
Directors’ remuneration policy 723,226,697 96.96% 22,523,083 3.02% 746,018,573 48,147,507 794,056,043
Governance
Directors’ remuneration report 718,776,466 97.27% 20,032,459 2.71% 739,075,696 55,090,384 794,056,043
1. Votes withheld are not included in the final figures as they are not recognised as a vote in law.
Remuneration Committee governance regularly and is satisfied that the advice it receives is objective
The Board is ultimately accountable for executive remuneration and independent.
and delegates this responsibility to the Committee. The This report has been prepared in accordance with the Large and
Committee’s principal function is to support the Group’s strategy Medium-Sized Companies and Groups (Accounts and Reports)
by ensuring that its delivery is underpinned by the Company’s (Amendment) Regulations 2013 and the Listing Rules of the UK
overall remuneration policy, as described above. It also determines Listing Authority. The Board, in conjunction with the Committee,
the specific remuneration package, including service contracts has taken the necessary steps to ensure that the Company
and pension arrangements, for each Executive Director and our complies with the provisions of the Code which relate to Directors’
most senior executives. remuneration. The Committee confirms that throughout the year
All members of the Committee are independent non-Executive it has complied with governance rules and best
Directors. We see this as fundamental in ensuring Executive practice provisions.
Directors’ and senior executives’ remuneration is set by people The Regulations require the Auditor to report to shareholders on
who are independent and have no personal financial interest, the audited information within this report and to state whether,
other than as shareholders, in the matters discussed. There are in their opinion, the relevant sections have been prepared in
no potential conflicts of interest arising from cross–directorships accordance with the Act. The Auditor’s opinion is set out in the
and there is no day-to-day involvement in running the business. Independent Auditor’s report and we have clearly marked the
The Committee consults with the Group Chief Executive, who may audited sections of the report.
attend meetings of the Committee, although he is not involved in
deciding his own remuneration. The Committee is assisted by the Prior to the 2017 AGM the Committee Chairman engaged with
Group General Counsel and Company Secretary, the Group Human shareholders on the implementation of the remuneration policy.
Resources Director and the Group Head of Reward. No-one is Since the AGM the Committee Chairman has continued to make
allowed to participate in any matter directly concerning the herself open to engage with shareholders.
details of their own remuneration or conditions of service. The Committee values highly the contribution that shareholder
During the year under review the Committee appointed views have on the process of formulating policy decisions.
PricewaterhouseCoopers LLC (PwC) to provide advice on the This feedback, together with emerging relevant guidance,
remuneration of Executive Directors and other senior executives was considered by the Committee and formed part of the
(advice was previously provided by New Bridge Street (a part of review of the remuneration policy.
Aon plc)). PwC also provides advice to the Company in connection The Company does not formally consult with employees on
with the operation of the Company’s share-based incentive plans. Executive Directors’ remuneration. However, when setting the
Both PwC and New Bridge Street are signatories to the Code of remuneration policy for Executive Directors the Committee takes
Conduct for remuneration consultants and members of the into account the overall approach to reward for, and the pay and
Remuneration Consultants Group. PwC provided advice to employment conditions of other employees in the Group. As part
different parts of the Group on tax matters. The teams providing of the development of the proposed policy the Committee also
this advice are separate from the Remuneration Committee considers the pay structures across the wider workforce.
advisors and there was no conflict. New Bridge Street did not
On behalf of the Board
provide any other services to the Group during the year. Aon’s risk
solutions business carried out work for our insurance programme
Kathleen O’Donovan
for the Group during the year, but otherwise Aon did not provide
any other services and there was no conflict. The total fees, Chairman of the Remuneration Committee
excluding VAT, to the Committee during the year were £22,500
17 June 2018
in respect of PwC’s services and £25,100 in respect of New Bridge
Street. The Committee reviews the appointment of its advisers
The Remuneration Committee’s Terms of Reference can be found at

www.dssmith.com/investors/corporate-governance/committees/

Directors’ responsibilities statement
The Directors are responsible for preparing the annual report The Directors are responsible for keeping adequate accounting
and the financial statements in accordance with applicable law records that are sufficient to show and explain the Company’s
and regulations. transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
Company law requires the Directors to prepare such financial
that the financial statements comply with the Companies Act
statements for each financial year. Under that law the Directors
2006. They are also responsible for safeguarding the assets
are required to prepare the Group financial statements in
of the Company and hence for taking reasonable steps for
accordance with International Financial Reporting Standards
the prevention and detection of fraud and other irregularities.
(IFRSs) as adopted by the European Union and Article 4 of the
IAS Regulation and have also chosen to prepare the parent The Directors are responsible for the maintenance and
Company financial statements in accordance with Financial integrity of the corporate and financial information included
Reporting Standard 101 Reduced Disclosure Framework. on the Company’s website. Legislation in the United Kingdom
Under company law the Directors must not approve the governing the preparation and dissemination of financial
financial statements unless they are satisfied that they statements may differ from legislation in other jurisdictions.
give a true and fair view of the state of affairs of the Company
and of the profit or loss of the Company for that period.
Directors’ responsibility statement
We confirm that to the best of our knowledge:
In preparing the parent Company financial statements, the
Directors are required to: • the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair
• select suitable accounting policies and then apply view of the assets, liabilities, financial position and profit or
them consistently; loss of the Company and the undertakings included in the
• make judgements and accounting estimates that are consolidation taken as a whole;
reasonable and prudent; • the strategic report includes a fair review of the development
• state whether Financial Reporting Standard 101 Reduced and performance of the business and the position of the
Disclosure Framework has been followed, subject to any Company and the undertakings included in the consolidation
material departures disclosed and explained in the financial taken as a whole, together with a description of the principal
statements; and risks and uncertainties that they face; and
• prepare the financial statements on the going concern basis • the annual report and financial statements, taken as a
unless it is inappropriate to presume that the Company will whole, are fair, balanced and understandable and provide
continue in business. the information necessary for shareholders to assess the
In preparing the Group financial statements, International Company’s position, performance, business model and strategy.
Accounting Standard 1 requires that Directors: This responsibility statement was approved by the Board of
• properly select and apply accounting policies; Directors on 17 June 2018 and is signed on its behalf by:
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the Miles Roberts Adrian Marsh
specific requirements in IFRSs is insufficient to enable users
Group Chief Executive Group Finance Director
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and 17 June 2018 17 June 2018
financial performance; and
• make an assessment of the Company’s ability to continue as
a going concern.
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Independent Auditor’s report to the members of DS Smith Plc
Report on the audit of the financial statements

Opinion
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 30 April 2018 and of
the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as
adopted by the European Union;
• the parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice, including FRS 101 Reduced Disclosure Framework; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS Regulation.
We have audited the financial statements of DS Smith Plc (the ‘parent Company’) and its subsidiaries (the ‘Group’) which comprise:
• the consolidated income statement;
Financial statements
• the consolidated statement of comprehensive income;
• the consolidated and parent Company balance sheets;
• the consolidated and parent Company statements of changes in equity;
• the consolidated cash flow statement;
• the related notes 1 to 34 to the consolidated financial statements; and
• the related notes 1 to 15 to the parent company financial statements.
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and IFRSs as
adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent Company financial
statements is applicable law and United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We confirm that, with one exception, no non-audit services prohibited by the
FRC’s Ethical Standard were provided to the Group or parent Company. This one exception related to immaterial payroll services provided to an
insignificant newly acquired overseas subsidiary not audited by us. These services have ceased. It was concluded in agreement with the Audit
Committee that this one exception did not impact upon our integrity, objectivity and independence (see page 67 for further information).
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Summary of our audit approach
Key audit matters The key audit risks that we identified in the current year were:
• classification and presentation of adjusting items;
• taxation; and
• acquisition accounting.
Within this report, any new key audit matters are identified with and any key audit matters which are the same as
the prior year identified with .
Materiality The materiality that we used for the Group financial statements was £18m which was determined on the basis of
profit before tax and adjusting items.
Scoping Our full scope audit procedures provided coverage at the Group’s key locations accounting for 59% (2016/17: 55%)
of revenue and 63% (2016/17: 55%) of the profit before tax and adjusting items.
Component auditors performed procedures on key audit matters and material balances for other locations that
provided coverage over 22% (2016/17: 33%) of revenue and 18% (2016/17: 29%) of the profit before tax and
adjusting items.
Together our procedures on key audit matters and material balances covered 81% (2016/17: 88%) of revenue and
81% (2016/17: 84%) of profit before tax and adjusting items.
Significant During 2017/18 the Group undertook a material acquisition in the US which required management judgement in
changes in determining the fair value of intangible assets, goodwill and other assets and liabilities in the opening balance sheet.
our approach Therefore, we have identified acquisition accounting as a new key audit matter for the current year.
83
Independent Auditor’s report to the members of DS Smith Plc continued
Conclusions relating to going concern, principal risks and viability statement

Going concern
We have reviewed the Directors’ statement in note 1(a) to the financial statements about whether they considered it appropriate to adopt the
going concern basis of accounting in preparing them and their identification of any material uncertainties to the Group’s and Company’s ability
to continue to do so over a period of at least twelve months from the date of approval of the financial statements.
We are required to state whether we have anything material to add or draw attention to in relation to that statement required by Listing Rule
9.8.6R(3) and report if the statement is materially inconsistent with our knowledge obtained in the audit.
We confirm that we have nothing to report, add or draw attention to in relation to these matters.
Principal risks and viability statement
Based solely on reading the Directors’ statements and considering whether they were consistent with the knowledge we obtained in the
course of the audit, including the knowledge obtained in the evaluation of the Directors’ assessment of the Group’s and the Company’s ability
to continue as a going concern, we are required to state whether we have anything material to add or draw attention to in relation to:
• the disclosures on pages 40 -45 that describe the principal risks and explains how they are being managed or mitigated;
• the Directors’ confirmation on page 41 that they have carried out a robust assessment of the principal risks facing the Group, including those
that would threaten its business model, future performance, solvency or liquidity; or
• the Directors’ explanation on page 41 as to how they have assessed the prospects of the Group, over what period they have done so and
why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
We are also required to report whether the Directors’ statement relating to the prospects of the Group required by Listing Rule 9.8.6R(3) is
materially inconsistent with our knowledge obtained in the audit.
We confirm that we have nothing material to add or draw attention to in respect of these matters.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Classification and presentation of adjusting items

Key audit matter description
The presentation and consistency of costs and income within adjusting items in the income statement is a key determinant in the
assessment of the quality of the Group’s earnings before adjusting items and also presents the opportunity for management bias in the
presentation of results. Management judgement is required in determining whether an item should be presented as adjusting based on
the size, nature and incidence of the item. Additionally this is an area that attracts greater scrutiny from the financial reporting regulator.
For the year ended 30 April 2018, the Group incurred net adjusting items of £88 million.
Refer to note 4 for details of adjusting items in the year and note 1(x) for management’s policy for identifying adjusting items. The
classification and presentation of adjusting items is also considered to be significant matter for the Audit Committee (page 65).
How the scope of our audit responded to the key audit matter
We considered the appropriateness and classification of the items which are included within adjusting items by testing a sample and
agreeing them back to supporting documentation.
We have reviewed the appropriateness of the adjusting items recorded in accordance with management’s policy on adjusting items and
the latest guidance from the FRC and the European Securities and Markets Authority (ESMA). We have reviewed the quality of adjusted
earnings as a result of the impact of the items above.
We reviewed the related disclosure in the Group financial statements and assessed consistency with the prior period and current market
best practice.
Key observations
We are satisfied that the amounts classified as adjusting items are in accordance with the Group’s accounting policy and the related
disclosure of these items in the financial statements is appropriate.
0
84
Taxation
The value of the tax provisions recorded in respect of a number of uncertain tax positions require judgement in respect of the likely
outcome of negotiations with various tax authorities. Refer to note 1(w) for management’s process for estimating and recording tax
provisions and note 7 for further detail in respect to the range of possible outcomes with regards to those uncertain tax positions.
We worked with our tax audit specialists, including those in required local jurisdictions, to challenge the estimates and judgements
made by management when calculating the income tax payable in each territory and the associated provisions held. Specifically, we have
reviewed the correspondence with the taxation authorities in significant locations, as well as reviewing the support or opinions received
from external counsel or other advisors where management has utilised such opinions to appraise the likely outcome of technical tax
treatments and in assessing the reasonableness of the provisions made.
Key observations
We are satisfied that the assumptions used in calculating the tax charge and recording the associated tax provisions are appropriate.
Acquisition accounting
The Group acquired Interstate Resources Inc (“IRI”) during the year for £772m. The judgements used in determining the value of goodwill
(£581m) and intangible assets (£258m) and the allocation between these assets could, if performed inaccurately, lead to a material
misstatement.
There is significant judgement and complexity involved in the allocation of excess consideration over net assets of the acquiree between
the fair value of the intangible assets and remaining goodwill. For the fair value of intangible assets, this includes estimates for growth
rates, margins, discount rates and retention rates.
Management must exercise judgement to accurately measure the fair value of the acquired assets and liabilities as at the acquisition date.
Note 1(z) to the financial statements discusses this further.
We obtained and reviewed the purchase agreements and performed the procedures to assess whether the transaction has been
accounted for appropriately in accordance with IFRS 3 Business combinations.
We have obtained management’s calculations for the accounting for the acquisition and we checked the mathematical accuracy of
the acquisition model. We also assessed the adjustments to assets and liabilities in order to bring them to their fair value. We have held
discussions with management in order to challenge the completeness of these adjustments and have also corroborated these against
independent valuation reports.
In order to assess the accuracy of the acquired intangible assets valuation, we have reviewed the methodology applied in management’s
calculation and challenged the assumptions behind the calculation. We have involved our own internal experts to assist in our assessment.
We have reviewed the disclosures included within note 30 of the consolidated financial statements.
Key observations
We have satisfied ourselves that the valuation of assets and liabilities associated with these acquisitions is appropriate, that they have
been recorded at their fair value and have been disclosed and accounted for appropriately.
Our application of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of
a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in
evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent Company financial statements
Materiality £18 million (2016/17: £16 million) £7 million (2016/17: £8 million)
Basis for Materiality has been determined as approximately 5% of Parent Company materiality equates to less than 1%
determining profit before tax and adjusting items. This is consistent with (2016/17: less than 1%) of net assets, and is capped
materiality prior year. The materiality equates to less than 1% (2016/17: at 40% (2016/17: 50%) of Group materiality.
less than 1%) of revenue from continuing operations and
less than 1% (2016/17: less than 1%) of net assets.
Rationale for We exclude the effect of adjusting items to provide a stable Parent Company’s materiality is determined based on net
the benchmark basis for materiality, as these items are expected to be assets of the Company. The parent Company does not
applied volatile year on year and profit before tax and adjusting items carry out trading activities and therefore net assets are
is a key metric for users of the accounts and is consistent the key metric for the users of the financial statements.
with the Group’s internal and external reporting.
1
Independent Auditor’s report to the members of DS Smith Plc continued
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £750,000 (2016/17: £650,000)
for the Group, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the
Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing
the risks of material misstatement at the Group level.
Based on that assessment, we focused our Group audit scope primarily on the audit work at twelve components (2016/17: nine) located
in the United Kingdom, France, Germany, Italy, the United States, Spain, Austria and Romania. These twelve components represent the
principal business units within the Group’s key reportable segments and accordingly provide an appropriate basis for undertaking audit work
to address the risks of material misstatement identified above. The Group audit team takes an active part in the conduct of the audits at these
components and follows a programme of planned site visits that is designed to ensure that the Senior Statutory Auditor or another senior
member of the Group audit team visits each of the full scope components or attends close out meetings on a rotational basis. These
components accounted for 59% (2016/17: 55%) of revenue and 63% (2016/17: 55%) of profit before tax and adjusting items.
For the remaining locations within our audit scope, the component auditor performed audit procedures on the key audit matters and material
balances and provided reporting to the Senior Statutory Auditor. The Senior Statutory Auditor or another senior member of the Group audit
team held discussions with the local audit team in the current year. These remaining locations accounted for 22% (2016/17: 33%) of revenue
and 18% (2016/17: 29%) of profit before tax and adjusting items.
Together the procedures provided coverage on key audit matters and material balances covering 81% (2016/17: 88%) of revenue and 81%
(2016/17: 84%) of profit before tax and adjusting items.
At the parent entity level we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there
were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to audit
or audit of significant risks and material balances.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report, other
than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
In this context, matters that we are specifically required to report to you as uncorrected material misstatements of the other information
include where we conclude that:
• Fair, balanced and understandable – the statement given by the Directors that they consider the annual report and financial statements
taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy, is materially inconsistent with our knowledge obtained in the audit; or
• Audit Committee reporting – the section describing the work of the Audit Committee does not appropriately address matters
communicated by us to the Audit Committee; or
• Directors’ statement of compliance with the UK Corporate Governance Code – the parts of the Directors’ statement required under the
Listing Rules relating to the Company’s compliance with the UK Corporate Governance Code containing provisions specified for review by
the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK Corporate
Governance Code.
We have nothing to report in respect of these matters.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent Company’s ability to continue as a
going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
2
86
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities.This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and of the parent Company and their environment obtained in the course of the
audit, we have not identified any material misstatements in the strategic report or the Directors’ report.
Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent Company financial statements are not in agreement with the accounting records and returns.
Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have not been
made or the part of the Directors’ remuneration report to be audited is not in agreement with the accounting records and returns.
Other matters
Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the shareholders on 13 October 2006 to audit the financial
statements for the year ended 30 April 2007 and subsequent financial periods. Following a competitive tender process, we were reappointed
as auditor for the year ended 30 April 2014 and subsequent financial years. The period of total uninterrupted engagement including previous
renewals and reappointments of the firm is 12 years, covering the years ended 30 April 2007 to 30 April 2018.
Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with ISAs (UK).
Ian Waller
(Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
17 June 2018
3
Consolidated income statement
Year ended 30 April 2018
Before Adjusting Before Adjusting

adjusting items adjusting items
items (note 4) items (note 4)
2018 2018 2018 2017 2017 2017
Note £m £m £m £m £m £m
Revenue 2 5,765 – 5,765 4,781 – 4,781
Operating costs 3, 4 (5,235) (47) (5,282) (4,338) (57) (4,395)
Operating profit before amortisation,
acquisitions and disposals 2 530 (47) 483 443 (57) 386
Amortisation of intangible assets;
acquisitions and disposals 10, 4 (93) (29) (122) (65) (5) (70)
Operating profit 437 (76) 361 378 (62) 316
Finance income 5 2 – 2 1 – 1
Finance costs 4, 5 (60) (12) (72) (51) – (51)
Employment benefit net finance expense 24 (4) – (4) (5) – (5)
Net financing costs (62) (12) (74) (55) – (55)
Profit after financing costs 375 (88) 287 323 (62) 261
Share of profit of equity accounted
investments, net of tax 12 5 – 5 3 – 3
Profit before income tax 380 (88) 292 326 (62) 264
Income tax (expense)/credit 7, 4 (80) 47 (33) (69) 13 (56)
Profit for the year 300 (41) 259 257 (49) 208
Profit for the year attributable to:

Owners of the parent 300 (41) 259 258 (49) 209
Non-controlling interests – – – (1) – (1)
Earnings per share

Earnings per share
Basic 8 24.9p 22.1p
Diluted 8 24.8p 22.0p
All activities comprise continuing operations.
4
88
Consolidated statement of comprehensive income
2018 2017
Note £m £m
Profit for the year 259 208
Items which will not be reclassified subsequently to profit or loss
Actuarial gain/(loss) on employee benefits 24 57 (1)
Income tax on items which will not be reclassified subsequently to profit or loss 7 (14) (3)
Items which may be reclassified subsequently to profit or loss
Foreign currency translation differences 1 71
Cash flow hedges fair value changes 8 1
Reclassification from cash flow hedge reserve to income statement 10 8
Share of other comprehensive income of equity accounted investments 12 – 1
Income tax on items which may be reclassified subsequently to profit or loss 7 5 35
Other comprehensive income for the year, net of tax 67 112
Total comprehensive income for the year 326 320
Total comprehensive income/(expense) attributable to:

Owners of the parent 326 321
Non-controlling interests – (1)
5
Consolidated statement of financial position
At 30 April 2018
2018 2017
Note £m £m
Assets
Non-current assets
Intangible assets 10 2,043 1,178
Biological assets 3 –
Property, plant and equipment 11 2,396 1,866
Equity accounted investments 12 24 9
Other investments 13 11 3
Deferred tax assets 21 64 79
Other receivables 15 7 3
Derivative financial instruments 20 15 19
Total non-current assets 4,563 3,157
Current assets
Inventories 14 543 406
Biological assets 4 –
Income tax receivable 15 10
Trade and other receivables 15 863 766
Cash and cash equivalents 18 297 139
Assets held for sale – 2
Total current assets 1,766 1,336
Total assets 6,329 4,493
Liabilities
Non-current liabilities
Borrowings 19 (1,811) (1,144)
Employee benefits 24 (106) (181)
Other payables 16 (14) (14)
Provisions 22 (4) (5)
Deferred tax liabilities 21 (195) (133)
Derivative financial instruments 20 (35) (11)
Total non-current liabilities (2,165) (1,488)
Current liabilities
Bank overdrafts 18 (29) (16)
Borrowings 19 (162) (119)
Trade and other payables 16 (1,705) (1,358)
Income tax liabilities (118) (120)
Provisions 22 (16) (24)
Total current liabilities (2,054) (1,650)
Equity
Issued capital 23 107 95
Share premium 1,260 728
Reserves 742 530
Total equity attributable to owners of the parent 2,109 1,353
Non-controlling interests 1 2
Total equity 2,110 1,355
Approved by the Board of Directors of DS Smith Plc on 17 June 2018 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.
6
90
Consolidated statement of changes in equity
Total reserves
attributable Non-
Share Share Hedging Translation Own Retained to owners of controlling Total
capital premium reserve reserve shares earnings the parent interests equity
Note £m £m £m £m £m 1 £m £m £m £m
At 1 May 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 24 – – – – – (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 20 – – 8 – – – 8 – 8
Share of other comprehensive income of
equity accounted investment 12 – – – 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 9 – – – – – (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
Profit for the year – – – – – 259 259 – 259
Actuarial gain on employee benefits 24 – – – – – 57 57 – 57
Foreign currency translation differences – – – 1 – – 1 – 1
Cash flow hedges fair value changes – – 8 – – – 8 – 8
Reclassification from cash flow hedge
reserve to income statement 20 – – 10 – – – 10 – 10
Income tax on other comprehensive income – – (3) 8 – (14) (9) – (9)
Total comprehensive
income – – 15 9 – 302 326 – 326
Issue of share capital 12 532 – – – 32 576 – 576
Employee share trust – – – – 3 (7) (4) – (4)
Share-based payment expense (net of tax) – – – – – 15 15 – 15
Dividends paid 9 – – – – – (157) (157) – (157)
Transaction with non-controlling interests – – – – – – – (1) (1)
Other changes in equity in the year 12 532 – – 3 (117) 430 (1) 429
At 30 April 2018 107 1,260 (7) 49 (1) 701 2,109 1 2,110
1. Retained earnings include a reserve related to merger relief (note 23).
7
Consolidated statement of cash flows
2018 2017
Continuing operations Note £m £m
Operating activities
Cash generated from operations 26 576 629
Interest received 1 1
Interest paid (42) (46)
Tax paid (82) (61)
Cash flows from operating activities 453 523
Investing activities
Acquisition of subsidiary businesses, net of cash and cash equivalents 30 (615) (71)
Capital expenditure (347) (244)
Proceeds from sale of property, plant and equipment and intangible assets 18 18
Cash flows from restricted cash and other deposits (6) –
Cash flows used in investing activities (950) (297)
Financing activities
Proceeds from issue of share capital 283 13
Repayment of borrowings (490) (924)
Proceeds from borrowings 1,008 785
Proceeds from settlement of derivative financial instruments 2 31
Repayment of finance lease obligations (4) (9)
Dividends paid to Group shareholders 9 (157) (121)
Other (4) –
Cash flows from/(used in) financing activities 638 (225)
Increase in cash and cash equivalents 141 1
Net cash and cash equivalents at 1 May 123 115
Exchange gains on cash and cash equivalents 4 7
Net cash and cash equivalents at 30 April 18 268 123
8
92
Notes to the consolidated financial statements
1. Significant accounting policies (ii) Interests in equity accounted investments

(a) Basis of preparation The Group’s interests in equity accounted investments comprise
These financial statements are consolidated financial statements interests in associates and joint ventures. An associate is an entity
for the Group consisting of DS Smith Plc, a company registered over which the Group has significant influence, but not control or
in England and Wales, and all its subsidiaries. The consolidated joint control, over the financial and operating policy decisions of the
financial statements have been prepared and approved by the investment. A joint venture is an entity in which the Group has joint
Directors in accordance with International Financial Reporting control, whereby the Group has rights to the net assets of the entity,
Standards as adopted by the EU (‘adopted IFRSs’), and with rather than rights to its assets and obligations for its liabilities.
those parts of the Companies Act 2006 applicable to companies Interests in associates and joint ventures are accounted for using the
reporting under IFRS. The consolidated financial statements equity method. They are recognised initially at cost, which includes
are also in compliance with IFRSs as issued by the International transaction costs. Subsequent to initial recognition the consolidated
Accounting Standards Board (IASB). financial statements include the Group’s share of the profit or loss
The consolidated financial statements are prepared on the historical and other comprehensive income of equity accounted investments,
cost basis with the exception of biological assets, other investments, until the date on which significant influence or joint control ceases.
assets and liabilities of certain financial instruments and employee
(iii) Non-controlling interests
benefit plans that are stated at their fair value and share-based
Non-controlling interests are shown as a component of equity in
payments that are stated at their grant date fair value.
the consolidated statement of financial position net of the value
The consolidated financial statements have been prepared on of options over interests held by non-controlling interests in the
a going concern basis as set out on page 61 of the Directors’ Group’s subsidiaries.
report. The Directors consider that adequate resources exist
(iv) Business combinations
for the Company to continue in operational existence for the
The acquisition method is used to account for the acquisition of
foreseeable future.
subsidiaries. Identifiable net assets acquired (including intangibles)
The preparation of consolidated financial statements requires in a business combination are measured initially at their fair values at
management to make judgements, estimates and assumptions the acquisition date.
that affect whether and how policies are applied, and the reported
Where the measurement of the fair value of identifiable net assets
amounts of assets and liabilities, income and expenses. Estimates
acquired is incomplete at the end of the reporting period in which the
with a significant risk of material adjustment and critical accounting
combination occurs, the Group will report provisional fair values. Final
judgements are discussed in accounting policy 1(z) and 1(aa).
fair values are determined within a year of the acquisition date and
The following new accounting standards, amendments or applied retrospectively.
interpretations have been adopted by the Group as of 1 May 2017:
The excess of the consideration transferred and the amount of any
• Amendments to IAS 12 Recognition of Deferred Tax Assets for non-controlling interest over the fair value of the identifiable assets
Unrealised Losses; (including intangibles), liabilities and contingent liabilities acquired is
• Amendments to IAS 7 Disclosure Initiative; and recorded as goodwill.
• Annual Improvements to IFRSs 2014-2016 Cycle. The consideration transferred is measured as the fair value of
The adoption of these standards, amendments and interpretations the assets given, equity instruments issued (if any), and liabilities
has not had a material effect on the results for the year. assumed or incurred at the date of acquisition.
The accounting policies set out below have been applied consistently Acquisition related costs are expensed as incurred.
in all periods presented in these consolidated financial statements. The results of the subsidiaries acquired are included in the
The accounting policies have been applied consistently by all consolidated financial statements from the acquisition date.
Group entities.
(b) Basis of consolidation
(i) Subsidiaries
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases. Control is achieved
when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Intra-group balances and
any unrealised gains and losses or income and expenses arising from
intra-group transactions are eliminated in preparing the consolidated
financial statements.
9
Notes to the consolidated financial statements continued
1. Significant accounting policies continued The assets and liabilities of all the Group entities that have a
(c) Revenue functional currency other than sterling are translated at the closing
Revenue comprises the fair value of the sale of goods and services, exchange rate at the reporting date. Income and expenses for each
net of value added tax and other sales taxes, rebates and discounts income statement are translated at average exchange rates (unless
and after eliminating sales within the Group. Revenue from the sale this average is not a reasonable approximation of the cumulative
of goods is recognised when: effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the date of the transactions).
• the Group has transferred the significant risks and rewards of
ownership to the buyer; On consolidation, exchange differences arising from the translation
• all significant performance obligations have been met; of the net investment in foreign entities, borrowings, and other
financial instruments designated as hedges of such investments,
• the Group retains neither continuing managerial involvement nor
are recognised in the translation reserve. On the disposal of foreign
effective control over the goods sold;
currency entities, the cumulative exchange difference recorded in
• it is probable that the economic benefits associated with the the translation reserve is taken to the consolidated income
transaction will flow to the Group; and statement as part of the gain or loss on disposal.
• the amount of revenue can be measured reliably.
(h) Intangible assets
This is typically either when the goods are loaded onto the (i) Goodwill
collection vehicle if the buyer is collecting them, or when the The recognition of business combinations requires the excess of the
goods are unloaded at the delivery address if the Group is purchase price of acquisitions over the net book value of identifiable
responsible for delivery. assets acquired to be allocated to the assets and liabilities of the
acquired entity. The Group makes judgements and estimates in
(d) Supplier rebates relation to the fair value allocation of the purchase price.
The Group receives income from its suppliers, mainly in the form
of volume based rebates and early settlement discounts. These are Goodwill is stated at cost less accumulated impairment losses.
recognised as a reduction in operating costs in the year to which they The useful life of goodwill is considered to be indefinite. Goodwill
relate. At the period end, where appropriate, the Group estimates is allocated to the cash generating units (CGUs), or groups of CGUs,
supplier income due from annual agreements for volume rebates. that are expected to benefit from the synergies of the combination
and is tested annually for impairment, or more frequently if
(e) Government grants impairment is indicated.
Government grants are recognised in the statement of financial
position initially as deferred income when there is reasonable On disposal of a subsidiary or a jointly controlled entity, the
assurance that they will be received and that the Group will comply attributable amount of goodwill is included in the determination of
with the conditions attached to them. Grants that compensate the the profit or loss recognised in the consolidated income statement.
Group for expenses incurred are offset against the expenses in the
(ii) Intellectual property
same periods in which the expenses are incurred. Grants relating
Intellectual property is stated at cost less accumulated amortisation
to assets are released to the income statement over the expected
and impairment.
useful life of the asset to which they relate on a basis consistent with
the depreciation policy. Depreciation is provided on the full cost of (iii) Computer software
the assets before deducting grants. Computer software that is integral to a related item of hardware is
included within property, plant and equipment. All other computer
(f) Dividends
software is treated as an intangible asset.
Dividends attributable to the equity holders of the Company paid
during the year are recognised directly in equity. (iv) Customer related
Customer relationships, acquired as part of a business combination,
(g) Foreign currency translation
are capitalised separately from goodwill and are carried at cost less
The consolidated financial statements are presented in sterling,
accumulated amortisation and impairment.
which is the Group’s presentational currency. Transactions in foreign
currencies are translated into the respective functional currencies of (v) Other intangible assets
Group companies at the foreign exchange rates ruling at the dates Other intangible assets that are acquired by the Group are carried at
of the transactions. Monetary assets and liabilities denominated cost less accumulated amortisation and impairment.
in foreign currencies at the reporting date are translated into the
functional currency at the foreign exchange rates ruling at that date. (vi) Amortisation
Foreign exchange differences arising on translation of monetary Amortisation of intangible assets (excluding goodwill) is charged to
assets and liabilities are recognised in the consolidated income the income statement on a straight-line basis over the estimated
statement. Non-monetary assets and liabilities that are measured at useful lives of intangible assets, unless such lives are indefinite.
historical cost in a foreign currency are translated using the exchange Intangible assets (other than goodwill) are amortised from the
rates at the dates of the transactions. date they are available for use.
The estimated useful lives are as follows:
Intellectual property Up to 20 years
Computer software 3-5 years
Customer relationships 5-15 years
10
94
1. Significant accounting policies continued (iii) Reversals of impairment
(i) Property, plant and equipment Impairment losses in respect of goodwill are not reversed. In respect
Property, plant and equipment is stated at cost less accumulated of other assets, an impairment loss is reversed if there has been a
depreciation and impairment. change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s
Depreciation is charged to the income statement on a straight-line carrying amount does not exceed the carrying amount that would
basis over the estimated useful lives of each item of property, plant have been determined, net of depreciation or amortisation, if no
and equipment, and major components that are accounted for impairment loss had been recognised.
separately (or in the case of leased assets, the lease period, if
shorter). Land is not depreciated. (l) Derivative financial instruments
The Group uses derivative financial instruments, primarily interest
The estimated useful lives are as follows: rate, currency and commodity swaps, to manage interest rate,
Freehold and long leasehold properties 10-50 years currency and commodity risks associated with the Group’s underlying
Plant and equipment, fixtures and fittings 2-30 years business activities and the financing of these activities. The Group
(including IT hardware) has a policy not to, and does not, undertake any speculative activity
Motor vehicles 3-5 years in these instruments.
Gains or losses arising on the sale of surplus property assets Such derivative financial instruments are initially recognised at fair
are recorded through operating profit before adjusting items. value on the date on which a derivative contract is entered into and
are subsequently remeasured at fair value. Derivatives are carried as
(j) Other investments assets when the fair value is positive and as liabilities when the fair
Other investments primarily consist of available for sale value is negative.
investments in unquoted equity securities and restricted cash.
Equity securities which are reliably measureable are measured at Derivative financial instruments are accounted for as hedges when
fair value. The remainder of other investments are carried at cost designated as hedges at the inception of the contract and when
less any impairment. the financial instruments provide an effective hedge of the
underlying risk.
(k) Impairment
The carrying amounts of the Group’s assets, including tangible and For the purpose of hedge accounting, hedges are classified as:
intangible non-current assets, are reviewed at each reporting date • fair value hedges when hedging the exposure to changes in the
to determine whether there are any indicators of impairment. If any fair value of a recognised asset or liability;
such indicators exist, the asset’s recoverable amount is estimated.
• cash flow hedges when hedging exposure to variability in cash
Goodwill is tested for impairment annually at the same time,
flows that is attributable to a particular risk associated with either
regardless of the presence of an impairment indicator. An impairment
a statement of financial position item or a highly probable forecast
loss is recognised whenever the carrying amount of an asset, transaction; or
collection of assets or its CGU exceeds its recoverable amount.
Impairment losses are recognised in the income statement. • hedges of the net investment in a foreign entity.
(i) Cash generating units The treatment of gains and losses arising from revaluing derivatives
For the purposes of property, plant and equipment and other designated as hedging instruments depends on the nature of the
intangibles impairment testing, each operating segment, split by hedging relationship as follows:
process (e.g. Packaging, Paper, Recycling), is a separate individual Fair value hedges: the carrying amount of the hedged item is
CGU. Goodwill impairment testing is carried out based on regional adjusted for gains or losses attributable to the risk being hedged
groupings of CGUs as illustrated in note 10, as this is the lowest level and the derivative is remeasured at fair value. Gains and losses
at which goodwill is monitored for internal management purposes. from both the hedged item and the fair value of derivatives are taken
(ii) Calculation of recoverable amount to the income statement. The Group discontinues fair value hedge
accounting if the hedging instrument expires or is sold, terminated
The recoverable amount of the Group’s assets is calculated as the
or exercised, the hedge no longer meets the criteria for hedge
value-in-use of the CGU to which the assets are attributed or the
accounting or the Group revokes the designation.
net selling price, if greater. Value-in-use is calculated by discounting
the cash flows expected to be generated by the CGU/group of CGUs Cash flow hedges: the effective portion of the gain or loss on
being tested for evidence of impairment. This is done using a pre-tax the hedging instrument is recognised directly in equity, while the
discount rate that reflects the current assessment of the time value ineffective portion is recognised in the income statement. Amounts
of money, and the country-specific risks for which the cash flows taken to equity are transferred to the income statement in the same
have not been adjusted. For an asset that does not generate largely period during which the hedged transaction affects profit or loss,
independent cash inflows, the recoverable amount is determined for such as when a forecast sale or purchase occurs. Where the hedged
the CGU to which the asset belongs. item is the cost of a non-financial asset or liability, the amounts
taken to equity are transferred to the initial carrying amount of
the non-financial asset or liability.
11
1. Significant accounting policies continued (q) Cash and cash equivalents and restricted cash
(l) Derivative financial instruments continued Cash and cash equivalents comprise cash balances and call deposits.
If the hedging instrument expires or is sold, terminated or exercised Bank overdrafts that are repayable on demand and form an integral
without replacement or roll-over, the hedged transaction ceases part of the Group’s cash management are included as a component of
to be highly probable, or if its designation as a hedge is revoked, cash and cash equivalents for the purpose of the statement of cash
amounts previously recognised in equity remain in equity until flows. Cash and cash equivalents are stated at amortised cost.
the forecast transaction occurs and are transferred to the income Cash subject to contractual restrictions on use by the Group is
statement or to the initial carrying amount of a non-financial asset excluded from cash and cash equivalents in the consolidated
or liability as above. If a forecast transaction is no longer expected to financial statements and is presented within other investments
occur, amounts previously recognised in equity are transferred to in the consolidated statement of financial position. Restricted cash
the income statement. is stated at amortised cost.
Hedges of net investment in a foreign entity: the effective portion
(r) Borrowings
of the gain or loss on the hedging instrument is recognised directly
Borrowings are recognised initially at fair value, less attributable
in equity, while the ineffective portion is recognised in the income
transaction costs. Subsequent to initial recognition, interest-bearing
statement. Amounts taken to equity are transferred to the income
borrowings are stated at amortised cost unless designated in a fair
statement when the foreign entity is sold.
value hedge relationship, with borrowing costs being accounted for
Any gains or losses arising from changes in the fair value of all other on an accruals basis in the income statement using the effective
derivatives are taken to the income statement. These may arise from interest method.
derivatives for which hedge accounting is not applied because they
At the reporting date, accrued interest is recorded separately from
are not effective as hedging instruments.
the associated borrowings within current liabilities.
The net present value of the expected future payments under
(s) Employee benefits
options over interests held by non-controlling interests in the Group’s
(i) Defined contribution schemes
subsidiaries is shown as a financial liability. At the end of each period,
Contributions to defined contribution pension schemes are
the valuation of the liability is reassessed with any changes
recognised as an employee benefit expense within personnel
recognised in profit or loss for the period.
expenses in the income statement, as incurred.
(m) Treasury shares
(ii) Defined benefit schemes
When share capital recognised as equity is repurchased, the
The Group’s net obligation in respect of defined benefit pension
amount of the consideration paid, including directly attributable
schemes is calculated separately for each scheme by estimating
costs, is recognised as a change in equity. Repurchased shares are
the amount of future benefit that employees have earned in return
classified as treasury shares and are presented as a deduction from
for their service in the current and prior periods; that benefit is
total equity.
discounted to its present value amount and recognised in the income
(n) Trade and other receivables statement within personnel expenses; a corresponding liability for all
Trade and other receivables are stated at their cost less future benefits is established on the statement of financial position
impairment provisions. and the fair value of any schemes’ assets is deducted.
(o) Inventories The discount rate is the yield at the reporting date on AA credit
Inventories are stated at the lower of cost and net realisable value. rated bonds that have maturity dates approximating to the duration
Net realisable value is the estimated selling price in the ordinary of the schemes’ obligations. The calculation is performed by a
course of business, less the estimated costs of completion and selling qualified actuary using the projected unit method. Actuarial gains
expenses. The cost of inventories is based on a weighted average and losses are recognised immediately in the statement of
cost and includes expenditure incurred in acquiring the inventories comprehensive income.
and bringing them to their existing location and condition. In the case
(iii) Share-based payment transactions
of manufactured inventories and work in progress, cost includes an
The Group operates equity-settled share-based compensation plans.
appropriate share of overheads based on normal operating capacity.
The fair value of the employee services received in exchange for the
(p) Biological assets grant of the options is recognised within personnel expenses, with a
Biological assets consist of standing timber, measured at fair corresponding increase in equity, over the period that the employees
value less cost to sell. Any change in fair value resulting from both unconditionally become entitled to the awards. The fair value of the
net growth and change in the market value of standing timber is options granted is measured using a stochastic model, taking into
presented in the income statement. The revenue from the sale of account the terms and conditions upon which the options were
standing timber is presented within revenue. granted. The total amount to be expensed over the vesting period
is determined by reference to the fair value of the options granted,
excluding the impact of any non-market vesting conditions.
At each reporting date, the entity revises its estimates of the number
of options that are expected to become exercisable. It recognises the
impact of the revision of original estimates, if any, in the income
statement, and a corresponding adjustment to equity.
12
96
1. Significant accounting policies continued Deferred tax is provided for using the balance sheet liability method,
(t) Provisions providing for temporary differences between the carrying amounts
A provision is recognised in the statement of financial position when of assets and liabilities for financial reporting purposes and the
the Group has a present legal or constructive obligation as a result amounts used for taxation purposes. The tax effect of certain
of a past event, a reliable estimate can be made of the amount of temporary differences is not recognised, principally with respect
the obligation and it is probable that an outflow of economic benefits to goodwill; temporary differences arising on the initial recognition
will be required to settle the obligation. Provisions are discounted to of assets or liabilities (other than those arising in a business
present value where the effect is material. combination or in a manner that initially impacts accounting or
taxable profit); and temporary differences relating to investment in
(u) Trade and other payables subsidiaries and equity accounted investees to the extent that they
Trade and other payables are stated at their cost.
will probably not reverse in the foreseeable future and the Group
(v) Leases is able to control the reversal of such temporary differences. The
(i) Finance leases amount of deferred tax provided is based on the expected manner
Assets held under finance leases are recognised as assets of the of realisation or settlement of the carrying amount of assets and
Group at the inception of the lease at the lower of their fair value liabilities, using tax rates enacted or substantively enacted at the
and the present value of the minimum lease payments. Depreciation reporting date.
on leased assets is charged to the income statement on the same A deferred tax asset is recognised only to the extent that it is
basis as owned assets. Leasing payments are treated as consisting probable that future taxable profits will be available against which
of capital and interest elements and the interest is charged to the the asset can be utilised. Deferred tax assets are reduced to the
income statement so that a constant periodic rate of interest is extent that it is no longer probable that the related tax benefit
recognised on the outstanding balance of the liability. will be realised.
(ii) Operating leases (x) Adjusting items
Operating lease rentals are charged to the income statement on a Items of income or expenditure that are significant by their nature,
straight-line basis over the lease term. Any premium or discount on size or incidence, and for which separate presentation would assist
the acquisition of a lease is spread over the life of the lease on a in the understanding of the trading and financial results of the Group,
straight-line basis. are classified and disclosed as adjusting items.
(w) Taxation Such items include business disposals, restructuring and optimisation,
Income tax on the profit or loss for the year comprises current and acquisition related and integration costs, and impairments.
deferred tax. Income tax is recognised in profit or loss except to the
extent that it relates to items recognised directly in equity or in other (y) Non-GAAP performance measures
comprehensive income. In the reporting of financial information, the Group has adopted
certain non-GAAP measures of historical or future financial
Current tax is the expected tax payable on the taxable income for performance, position or cash flows other than those defined or
the year, using tax rates enacted in each jurisdiction at the reporting specified under International Financial Reporting Standards (IFRSs).
date, and any adjustment to tax payable in respect of previous years.
Non-GAAP measures are either not defined by IFRS or are adjusted
The Group is subject to corporate taxes in a number of different IFRS figures, and therefore may not be directly comparable with
jurisdictions and judgement is required in determining the other companies’ reported non-GAAP measures, including those
appropriate provision for transactions where the ultimate tax in the Group’s industry.
determination is uncertain. In such circumstances, the Group
recognises liabilities for anticipated taxes based on the best Non-GAAP measures should be considered in addition to, and are not
information available and where the anticipated liability is both intended to be a substitute for, or superior to, IFRS measures.
probable and estimable. Such liabilities are classified as current Details of the Group’s non-GAAP performance measures, including
when the Group expects to settle the liability within 12 months with reasons for their use and reconciliations to IFRS figures are included
the remainder as non-current. Any interest and penalties accrued are as appropriate in note 32.
included in income taxes in both the consolidated income statement
and the consolidated statement of financial position. Where the final
outcome of such matters differs from the amount recorded, any
differences may impact the income tax and deferred tax provisions
in the period in which the final determination is made.
13
1. Significant accounting policies continued (ii) Acquisitions

(z) Key sources of estimates Estimates are required to value assets and liabilities acquired
The application of the Group’s accounting policies requires in business combinations at fair value and the purchase price
management to make estimates and assumptions. These estimates is allocated to assets and liabilities based on these fair values.
and assumptions affect the reported assets and liabilities and Determining fair values involves the use of significant estimates and
financial results of the Group. Actual outcomes could differ from assumptions (including discount rates, asset lives, customer attrition
the estimates and assumptions used. rates and recoverability). The value of intangible assets and property,
plant and equipment on acquisition is typically determined by
The Group’s key sources of estimates are as detailed below. qualified valuation specialists where material.
(i) Taxation (aa) Critical accounting judgement
The Group’s tax payable on profits is determined based on tax laws Adjusting items
and regulations that apply in each of the numerous jurisdictions The Group is required to exercise judgement in applying the adjusting
in which the Group operates. The Group is required to exercise items accounting policy to items of income and expenditure, taking
judgement in determining income tax provisions, along with the account of their origination, as well as considering similar items in
recognition of deferred tax assets/liabilities. While the Group aims prior years to ensure consistency and appropriate presentation.
to ensure that estimates recorded are accurate, the actual See note 4 for additional information.
amounts could be different from those expected. See note 7
for additional information.
(ab) IFRS standards and interpretations in issue but not yet effective
The International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC) have issued new
standards and interpretations with an effective date after the date of these financial statements.
Effective date –
International Financial Reporting Standards (IFRS/IAS) financial year ending
IFRS 15 Revenue from Contracts with Customers 30 April 2019
IFRS 9 Financial Instruments 30 April 2019
IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration 30 April 2019
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions 30 April 2019
IFRS 16 Leases 30 April 2020
IFRIC Interpretation 23 Uncertainty over Income Tax Treatments 30 April 2020
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures 30 April 2020
Amendments to IAS 19 Plan Amendment, Curtailment or Settlement 30 April 2020
IFRS 15 Revenue from Contracts with Customers

IFRS 15 replaces IAS 18 Revenue and related interpretations, introducing a single, principles-based approach to the recognition and
measurement of revenue from all contracts with customers. The new approach requires identification of performance obligations in
a contract and revenue to be recognised when or as those performance obligations are satisfied, as well as additional disclosure.
The Group has substantially completed its review of the requirements of IFRS 15 against existing policy and practice for both timing and
amount of revenue recognised, in particular considering dies, tools and moulds, variable consideration, provision of machines to customers,
and the agent versus principal criteria, as well as introducing the necessary processes to capture all information required for additional
disclosures required under IFRS 15.
The review concluded that timing of revenue recognition was materially consistent with the requirements of IFRS 15. For the majority of the
Group’s contracts, the performance obligation is the delivery of goods, which under IFRS 15 would be recognised at a single point of time, on
delivery of goods, consistent with the current accounting treatment under IAS 18.
The Group utilises customised dies, tools and moulds in both the Packaging and Plastics businesses in order to fulfil customer orders, which
vary considerably in value and treatment in the customer contracts. While some are immaterial in the context of the contract, others are of
more significant value and contractually distinct and are therefore considered a separate performance obligation under IFRS 15. Currently
revenue from dies, tools and moulds is netted within operating costs, while under IFRS 15 it represents a separate performance obligation
and should be included within revenue. In addition to the IFRS 15 adjustment relating to dies, tools and moulds, energy income, historically
netted within operating costs while not material, was determined to be more appropriately stated within revenue.
The Group will apply IFRS 15 with effect from 1 May 2018, with full restatement of prior periods to ensure comparability of the consolidated
income statement. The impact of applying the changes described above during the year ended 30 April 2018 would have been to increase
revenue and increase operating costs by £99 million respectively with no impact on net profit and loss. Other areas identified in the review
of IFRS 15 were concluded not to have material differences to current practice.
14
98
1. Significant accounting policies continued
(ab) IFRS standards and interpretations in issue but not yet effective continued
IFRS 9 Financial Instruments
IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement and concerns the classification, measurement and de-
recognition of financial assets and financial liabilities, introduces the expected credit loss model for the assessment of impairment of financial
assets, introduces new classification and measurement rules for financial assets affecting the Group’s other investments previously classified
as available for sale and held at fair value, and changes the hedge accounting requirements.
The Group has determined that all existing effective hedging relationships will continue to qualify for hedge accounting under IFRS 9. The
Group currently intends to elect to continue to apply the hedge accounting requirements of IAS 39, as allowed under IFRS 9.
The Group’s other investments previously classified as available for sale under IAS 39 and held at fair value will be designated on transition as
fair value through other comprehensive income, after which the Group will record their fair value movements in other comprehensive income.
The Group will adopt the simplified approach to provide for losses on receivables within the scope of IFRS 9. A preliminary assessment based
on average credit loss in relation to customers by region has been undertaken and the impact of applying the expected credit loss model has
been concluded not to be material considering the quality and short-term nature of the Group’s trade receivables. As the anticipated impact
of adopting IFRS 9 is not expected to be material, the Group will not restate prior periods on adoption of IFRS 9.
IFRS 16 Leases
IFRS 16 replaces IAS 17 Leases and prescribes a single lessee accounting model that requires the recognition of a right of use asset and
corresponding liability for all leases with terms over 12 months unless the underlying asset is of low value. The liability is initially measured
at the present value of future lease payments for the lease term. Depreciation of right of use assets, and interest on the corresponding lease
liabilities are recognised in the income statement over the lease term. In the cash flow statement, the total amount of cash paid is separated
into a principal portion (within financing activities) and an interest portion (within operating activities) in the cash flow statement.
On implementation of IFRS 16 there will be a material increase in lease liabilities, along with a corresponding increase in right of use assets
within property, plant and equipment. The Group’s most significant leases relate to property and production equipment and the undiscounted
commitments under non-cancellable operating leases under IAS 17 are provided in note 28 and total £210m at 30 April 2018.
IFRS 16 will be the most significant of the new accounting standards for the Group. The Group currently expects to adopt the modified
retrospective approach using practical expedients available, with a cumulative adjustment to equity at 1 May 2019, and as such will not
restate comparatives. During the year, the Group’s transition work focused on collecting data in order to facilitate assessment of accounting
impacts and transition options and the transition process will continue in 2018/19. Under the expected transition option, discount rates at
30 April 2019 will be utilised to calculate the transition adjustment and as such expectations of the transition impact will be able to be
quantified at that time.
Other standards not yet effective
IFRIC Interpretation 23 Uncertainty over Income Tax Treatments clarifies how to apply the recognition and measurement requirements in
IAS 12 when there is uncertainty over income tax treatments. In particular, the Interpretation addresses whether uncertain tax treatments
should be considered separately or together with one or more other uncertain tax treatments, and addresses the assumptions an entity
makes about the examination of tax treatments by taxation authorities. The Group is currently evaluating the impact of the new Interpretation.
The Group does not anticipate that the adoption of the remaining standards and interpretations that are effective for the year ending
30 April 2019 will have a material effect on its financial statements.
Of the standards listed above, all except for IFRIC 23, amendments to IAS 28 and amendments to IAS 19 have been endorsed by the EU.
15
2. Segment reporting
Operating segments
IFRS 8 Operating Segments requires operating segments to be identified on the same basis as is used internally for the review of performance
and allocation of resources by the Group Chief Executive (who is the Chief Operating Decision Maker as defined by IFRS 8).
The Group’s operations are organised into six segments, five of which cover geographical regions with integrated Packaging and Paper
businesses, and Plastics, which is reported separately. These comprise the Group’s reportable segments and their results are regularly
reviewed by the Group Chief Executive. The measure of profitability reported to the Group Chief Executive for the purposes of resource
allocation and assessment of performance is adjusted operating profit, which is a non-GAAP performance measure, about which further
information is provided in note 32.
To accommodate the Group’s acquisition of Interstate Resources in August 2017, an additional operating segment, ‘North America’ has been
added for the year ended 30 April 2018.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Central
administration costs are allocated to the individual segments on a consistent basis year on year. All assets and liabilities have been analysed
by segment, except for items of a financing nature, taxation balances, employee benefit liabilities and current and non-current asset
investments. Debt and associated interest are managed at a Group level and therefore have not been allocated across the segments.
DCH and Central Total
Western Northern Europe North continuing
UK Europe Europe and Italy America Plastics operations
Year ended 30 April 2018 Note £m £m £m £m £m £m £m
External revenue 1,078 1,450 1,083 1,429 379 346 5,765
Adjusted EBITDA 1 138 147 121 167 76 49 698
Depreciation 11 (29) (45) (31) (38) (14) (11) (168)
Adjusted operating profit1 109 102 90 129 62 38 530
Unallocated items:
Amortisation 10 (93)
Adjusting items in operating profit 4 (76)
Total operating profit (continuing operations) 361
Unallocated items:
Net financing costs (74)
investments, net of tax 5
Profit before income tax 292
Income tax expense (33)
Profit for the year 259
Analysis of total assets and total liabilities

Segment assets 835 1,182 1,000 1,481 1,147 214 5,859
Unallocated items:
Equity accounted investments and
other investments 35
Derivative financial instruments 59
Cash and cash equivalents 297
Tax 79
Total assets 6,329
Segment liabilities (280) (680) (208) (394) (62) (82) (1,706)

Unallocated items:
Borrowings and accrued interest (2,035)
Derivative financial instruments (59)
Tax (313)
Employee benefits (106)
Total liabilities (4,219)
Capital expenditure 64 83 60 88 32 20 347

1. Adjusted to exclude amortisation and adjusting items.
16
100
2. Segment reporting continued
DCH and Central Total
Western Northern Europe North continuing
UK Europe Europe and Italy America Plastics operations
Year ended 30 April 2017 Note £m £m £m £m £m £m £m
External revenue 962 1,264 989 1,239 – 327 4,781
Adjusted EBITDA 1 122 144 112 165 – 48 591
Depreciation 11 (28) (40) (30) (40) – (10) (148)
Adjusted operating profit1 94 104 82 125 – 38 443
Unallocated items:
Amortisation 10 (65)
Adjusting items in operating profit 4 (62)
Total operating profit (continuing operations) 316
Unallocated items:
Net financing costs (55)
investment, net of tax 3
Profit before income tax 264
Profit for the year 208
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 adjusting items.
Geographical areas
In presenting information by geographical area, external revenue is based on the geographical location of customers. Non-current assets are
based on the geographical location of assets and exclude investments, deferred tax assets, derivative financial instruments and intangible
assets (which are monitored at the operating segment level, not at a country level).
External revenue Non-current assets Capital expenditure
2018 2017 2018 2017 2018 2017
Continuing operations £m £m £m £m £m £m
UK 969 932 439 397 89 82
France 776 704 264 227 38 36
Germany 697 606 326 298 49 40
Italy 564 512 234 208 34 28
USA 437 93 288 17 44 2
Rest of the World 2,322 1,934 852 722 93 56
5,765 4,781 2,403 1,869 347 244
17
3. Operating profit
2018 2017
Continuing operations £m £m
Operating costs
Cost of sales 2,992 2,409
Other production costs 1,060 911
Distribution 403 331
Administrative expenses 827 744
5,282 4,395
Details of adjusting items included in operating profit are set out in note 4.
Operating profit is stated after charging/(crediting) the following:
2018 2017
Depreciation – owned assets 162 143
– leased assets 6 5
Amortisation of intangible assets 93 65
Profit on sale of non-current assets (1) (14)
Hire of plant and machinery 25 18
Other operating lease rentals 34 28
Research and development 11 7
2018 2017
UK Overseas Total UK Overseas Total
Auditor’s remuneration £m £m £m £m £m £m
Fees payable to the Company’s Auditor for audit of the Company’s annual
accounts 0.1 – 0.1 0.1 – 0.1
Fees payable to the Company’s Auditor and their associates for other
services:
Audit of the Company’s subsidiaries, pursuant to legislation 0.8 2.2 3.0 0.8 1.9 2.7
Total audit fees 0.9 2.2 3.1 0.9 1.9 2.8
Corporate finance services 1.4 – 1.4 – – –
Audit related assurance services 0.1 – 0.1 0.1 – 0.1
Tax and other services – – – 0.3 0.1 0.4
Total non-audit fees 1.5 – 1.5 0.4 0.1 0.5
Total Auditor’s remuneration 2.4 2.2 4.6 1.3 2.0 3.3
Non audit fees in 2017/18 include reporting accountant’s fees in respect of the acquisition of Interstate Resources.
Non-audit fees do not include costs in respect of the proposed acquisition of Europac (note 34) which were incurred after the year end and
are estimated to be in the region of £1.2m in total.
A description of the work of the Audit Committee is set out in the corporate governance section and includes an explanation of how
the external Auditor’s objectivity and independence are safeguarded when non-audit services are provided by the external Auditor.
18
102
4. Adjusting items
Items are presented as adjusting 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. With effect from 1 May 2017,
the Group has changed the description of these items from ‘exceptional’ to ‘adjusting’, to better represent their nature.
2018 2017
Acquisition related costs (29) (7)
Gains on acquisitions and disposals – 2
Acquisitions and disposals (29) (5)
Integration costs (13) (17)
Other restructuring costs (17) (26)
Impairment of assets (1) (5)
Other (16) (9)
Total pre-tax adjusting items (recognised in operating profit) (76) (62)
Finance costs adjusting items (12) –
Adjusting tax items 33 (1)
Current tax credit on adjusting items 14 13
Deferred tax credit on adjusting items – 1
Total post-tax adjusting items (41) (49)
2017/18
Acquisition related costs of £29m relate to professional advisory, legal and consultancy fees and directly attributable internal salary costs
relating to the review of potential deals, and deals completed during the period, including the acquisition of Interstate Resources, DPF Groupe
and EcoPack and EcoPaper. Of the total, £14m relates to the acquisition of Interstate Resources, with the most significant components being
transaction and sponsor fees, legal costs, and financial and tax due diligence and advice costs. Also included within acquisition costs is £2m for
the year end remeasurement of fair value on the redemption liability related to the purchase of Interstate Resources.
Integration costs relate to integration projects underway, primarily to achieve cost synergies from the acquisitions made in the current period
and previous financial years (of which Interstate Resources comprises £6m). They include those directly attributable internal salary costs
which would otherwise not be incurred.
Other restructuring costs of £17m include reorganisation and restructuring in DCH and Northern Europe (£4m), the UK (£4m) and Plastics
(£2m), primarily relating to completion of projects commenced in the previous year.
Other adjusting items of £16m principally relate to significant multi-year European centralisation and optimisation projects, including the
development of a Group-wide financial ERP solution, shared service centre and major IT projects. The costs of these programmes extend
over several years and as well as adjusting items include capitalisation of intangible assets, particularly in the case of the financial ERP system.
Those costs are primarily as a result of the Group’s acquisition activity, which has been focused on businesses where the IT and financial
infrastructure is limited.
Finance costs adjusting items relate to financing costs incurred in the acquisition of Interstate Resources of £5m, with the remainder relating
to the unwind of the discount on the redemption liability related to the purchase of Interstate Resources.
On 22 December 2017, the US enacted a major tax reform bill, which included, inter alia, the reduction in corporation tax rate from 35% to
21%. The revised rate has been used to revalue net deferred tax liabilities in the US, leading to a credit to profit and loss of £37m to adjusting
tax items, of which the most significant element relates to the deferred tax liabilities arising on the recognition of intangibles in business
combinations. The remaining £4m debit is an increase in tax provisions in respect of tax risks in acquired businesses.
The current tax credit on adjusting items of £14m in the year ended 30 April 2018 is the tax effect at the local applicable tax rate of adjusting
items that are subject to tax. This excludes non-tax deductible deal related advisory fees in relation to acquisitions and disposals.
19
4. Adjusting items continued

2016/17
Acquisition costs of £7m 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 those directly attributable internal salary
costs which would otherwise not be incurred.
The £26m other restructuring costs include reorganisation and restructuring in DCH and Northern Europe (£11m), the UK (£6m), Western
Europe (£4m) and Plastics (£2m).
Other adjusting items of £9m principally relate to infrastructure optimisation and efficiency projects.
The income tax credit on adjusting items includes an increase in tax provisions arising from the acquisition of a business (£1m), and the tax
effect at the local applicable tax rate of adjusting items that are subject to tax. The adjusting 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.
5. Finance income and costs
2018 2017
Interest income from financial assets (2) (1)
Finance income (2) (1)
Interest on borrowings and overdrafts 54 46
Other 6 5
Finance costs before adjusting items 60 51
Finance costs adjusting items 12 –
Finance costs 72 51
6. Personnel expenses
2018 2017
Wages and salaries 949 825
Social security costs 188 169
Contributions to defined contribution pension plans 42 37
Service costs for defined benefit schemes (note 24) 6 5
Share-based payment expense (note 25) 9 10
Personnel expenses 1,194 1,046
2018 2017
Average number of employees Number Number
UK 5,398 5,261
Western Europe 7,141 6,853
DCH and Northern Europe 4,906 4,701
Central Europe and Italy 8,278 8,370
USA 898 362
Rest of the World 476 127
Average number of employees 27,097 25,674
20
104
7. Income tax expense
2018 2017
£m £m
Current tax expense
Current year (106) (99)
Adjustment in respect of prior years 13 9
(93) (90)
Deferred tax credit
Origination and reversal of temporary differences 4 18
Reduction in tax rates (1) (3)
13 21
Total income tax expense before adjusting items (80) (69)
Adjusting tax items (note 4) 33 (1)
Current tax credit on adjusting items (note 4) 14 13
Deferred tax credit relating to adjusting items (note 4) – 1
Total income tax expense in the income statement from continuing operations (33) (56)
The tax credit on amortisation was £24m (2016/17: £16m).

The reconciliation of the actual tax charge to that at the domestic corporation tax rate is as follows:
2018 2017
£m £m
Profit before income tax 292 264
Share of profit of equity accounted investments, net of tax (5) (3)
Profit before tax and share of profit of equity accounted investments, net of tax 287 261
Income tax at the domestic corporation tax rate of 19.00% (2016/17: 19.92%) (55) (52)
Effect of additional taxes and tax rates in overseas jurisdictions (27) (30)
Additional items deductible for tax purposes 19 18
Non-deductible expenses (20) (5)
Non-taxable gains – 1
Release of prior year provisions in relation to acquired businesses 3 4
Deferred tax not recognised (4) –
Foreign exchange (5) –
Effect of change in corporation tax rates 36 (3)
Income tax expense – total Group (33) (56)
The Group’s effective tax rate, excluding amortisation, adjusting items and share of result from equity accounted investments was 22.5%
(2016/17: 22.0%).
21
7. Income tax expense continued

Uncertain tax positions
The Group operates in a complex multinational tax environment and is subject to uncertain tax positions and changes in legislation in the
jurisdictions in which it operates. The Group’s uncertain tax positions principally include pricing of cross-border transactions and a limited
number of specific transaction related tax risks.
The assessment of uncertain tax positions is based on management’s expectation of the likely outcome of settlements with tax authorities
or litigation. The quantification of the risks at any one point in time, especially with respect to transfer pricing, requires a degree of judgement
and estimation by management.
Included within the consolidated balance sheet at 30 April 2018 are current tax liabilities of £118m (30 April 2017: £120m) which include
a provision of £104m (30 April 2017: £95m) relating to uncertain tax positions. It is possible that amounts paid will be different from the
amounts provided and the Group estimates the range of reasonably possible outcomes relating to uncertain tax positions to be from
£11m to £142m.
Uncertain tax positions are generally released as statute of limitations end or specific tax enquiries are closed. The Group estimates that
transfer pricing provisions of up to £13m could reverse in the next 12 months.
Included within the current tax liabilities is an amount of £21m (30 April 2017: £18m) relating to interest and penalties on uncertain
tax positions.
The Group is also monitoring developments in relation to EU State Aid investigations following the EU Commission opening a State Aid
investigation into the Group Financing Exemption in the UK’s Controlled Foreign Company regime in October 2017. In line with current UK
tax law, the Group applies this regime. Based on its current assessment, the Group does not consider any provision is required in relation
to this issue.
Tax on other comprehensive income and equity
Tax
Tax credit/ credit/
Gross (charge) Net Gross (charge) Net
2018 2018 2018 2017 2017 2017
£m £m £m £m £m £m
Actuarial gain/(loss) on employee benefits 57 (14) 43 (1) (3) (4)
Foreign currency translation differences 1 8 9 71 37 108
Movements in cash flow hedges 18 (3) 15 9 (2) 7
Share of other comprehensive income of equity accounted investments – – – 1 – 1
Other comprehensive income/(expense) for the year 76 (9) 67 80 32 112
Issue of share capital 576 – 576 13 – 13
Employee share trust (4) – (4) (6) – (6)
Share-based payment expense 9 6 15 10 (1) 9
Dividends paid to Group shareholders (157) – (157) (121) – (121)
Other comprehensive income/(expense) and
changes in equity 500 (3) 497 (24) 31 (7)
22
106
8. Earnings per share
Basic earnings per share from continuing operations
2018 2017
Profit from continuing operations attributable to ordinary shareholders £259m £209m
Weighted average number of ordinary shares 1,039m 945m
Basic earnings per share 24.9p 22.1p
Diluted earnings per share from continuing operations

2018 2017
Profit from continuing operations attributable to ordinary shareholders £259m £209m
Weighted average number of ordinary shares 1,039m 945m
Potentially dilutive shares issuable under share-based payment arrangements 7m 6m
Weighted average number of ordinary shares (diluted) 1,046m 951m
Diluted earnings per share 24.8p 22.0p
The number of shares excludes the weighted average number of the Company’s own shares held as treasury shares during the year of
1m (2016/17: 2m).
Adjusted earnings per share from continuing operations
Adjusted earnings per share is a key performance measure for management long-term remuneration and is widely used by the Group’s
shareholders. Adjusted earnings is calculated by adding back the post-tax effects of both amortisation and adjusting items.
Further detail about the use of non-GAAP performance measures, including details of why amortisation is excluded, is given in note 32.
A reconciliation of basic to adjusted earnings per share is as follows:
2018 2017
Basic – Diluted – Basic – Diluted –
pence pence pence pence
£m per share per share £m per share per share
Basic earnings 259 24.9p 24.8p 209 22.1p 22.0p
Add back:
Amortisation of intangible assets 93 8.9p 8.9p 65 6.9p 6.8p
Tax credit on amortisation (24) (2.3p) (2.3p) (16) (1.7p) (1.7p)
Adjusting items, before tax 88 8.5p 8.4p 62 6.6p 6.6p
Tax on adjusting items and adjusting tax items (47) (4.5p) (4.5p) (13) (1.4p) (1.4p)
Adjusted earnings 369 35.5p 35.3p 307 32.5p 32.3p
9. Dividends proposed and paid

2018 2017
Pence Pence
per share £m per share £m
2016/17 interim dividend – paid – – 4.6p 44
2016/17 final dividend – paid – – 10.6p 113
2017/18 interim dividend – paid 4.9p 53 – –
2017/18 final dividend – proposed 9.8p *see note – –
2018 2017
£m £m
Paid during the year 157 121
The interim dividend in respect of 2017/18 of 4.9 pence per share (£53m) was paid after the year end on 1 May 2018. The 2016/17 interim and
final dividends were paid during the 2017/18 financial year.
* A final dividend in respect of 2017/18 of 9.8 pence per share has been proposed by the Directors after the reporting date, payable to all
shares on the record date, including those to be issued in the rights issue (see note 34(a)).
23
10. Intangible assets

Intellectual Customer
Goodwill Software property related Other Total
£m £m £m £m £m £m
Cost
At 1 May 2017 782 83 28 540 69 1,502
Acquisitions 638 – – 297 – 935
Additions – 3 – – 32 35
Disposals – (3) – – (3) (6)
Transfers – 7 – – (7) –
Currency translation (12) 3 1 4 4 –
At 30 April 2018 1,408 93 29 841 95 2,466
Amortisation and impairment
At 1 May 2017 (27) (42) (19) (218) (18) (324)
Amortisation – (9) (2) (70) (12) (93)
Disposals – 2 – – 3 5
Currency translation – (2) (1) (7) (1) (11)
At 30 April 2018 (27) (51) (22) (295) (28) (423)
Carrying amount
At 1 May 2017 755 41 9 322 51 1,178
At 30 April 2018 1,381 42 7 546 67 2,043
Intellectual Customer
Goodwill Software property related Other Total
£m £m £m £m £m £m
Cost
At 1 May 2016 710 50 24 483 66 1,333
Acquisitions 27 1 – 24 – 52
Additions – 10 1 – 20 31
Adjustment related to business combinations in prior year 3 – – – – 3
Disposals – (5) – – – (5)
Transfers – 22 – – (22) –
Currency translation 42 5 3 33 5 88
At 30 April 2017 782 83 28 540 69 1,502
Amortisation and impairment
At 1 May 2016 (26) (32) (15) (156) (15) (244)
Amortisation – (11) (2) (50) (2) (65)
Disposals – 5 – – – 5
Currency translation (1) (4) (2) (12) (1) (20)
At 30 April 2017 (27) (42) (19) (218) (18) (324)
Carrying amount
At 1 May 2016 684 18 9 327 51 1,089
At 30 April 2017 755 41 9 322 51 1,178
24
108
10. Intangible assets continued
Goodwill
The CGU groups below represent the lowest level at which goodwill is monitored for internal management purposes and are not larger than
the operating segments determined in accordance with IFRS 8 Operating Segments. The carrying values of goodwill are split between the
CGU groups as follows:
2018 2017
£m £m
UK 167 167
Western Europe 194 182
DCH and Northern Europe 229 220
Central Europe and Italy 187 124
North America 544 –
Plastics 60 62
Total goodwill 1,381 755
Goodwill impairment tests – key assumptions and methodology
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill may be impaired. The recoverable
amounts of the groups of CGUs are determined from value-in-use calculations. No impairment arose in the year ended 30 April 2018 as the
recoverable amount of the groups of CGUs, based on value-in-use calculations, exceeded the carrying amounts.
The key assumptions in the value-in-use calculations are:
• the cash flow forecasts have been derived from the most recent Board approved budget for the year ending 30 April 2019 and are
based upon past performance, known changes and expectations of current market conditions, taking into account the cyclical nature
of the business;
• the sales volume and price assumptions underlying the cash flow forecasts are the Directors’ estimates of likely future changes based upon
historic performance and the current economic outlooks for the economies in which the Group operates. These are viewed as the key
operating assumptions as they determine the Directors’ approach to margin and cost maintenance;
• the cash flow forecasts for capital expenditure are based upon past experience and include the replacement capital expenditure required to
generate the terminal cash flows;
• cash flows beyond the budgeted period (2020 and beyond) have been determined using a long-term growth rate specific to each of the
CGU groups based upon external sources such as the International Monetary Fund’s World Economic Outlook Database; and
• the pre-tax adjusted discount rate is derived from the weighted average cost of capital (‘WACC’) for the Group of 9.5% (2016/17: 9.5%). The
discount rate is a function of the cost of debt and equity. The cost of equity is largely based upon the risk free rate for 30 year German Bund
yields (75% weighting) and 30 year UK gilts (25% weighting), adjusted for the relevant country market risk premium, ranging from 0% to
15.5%, which reflects the increased risk of investing in country specific equities and the relative volatilities of the equity of the Group
compared to the market as a whole. This Group rate has been adjusted for the risks inherent in the countries in which the CGU group
operates that are not reflected in the cash flow projections.
DCH and Central
Western Northern Europe North
Key assumptions by CGU UK Europe Europe and Italy America Plastics
Long-term growth rate at 30 April 2018 1.7% 1.8% 1.5% 1.7% 1.9% 2.0%
Long-term growth rate at 30 April 2017 1.7% 1.8% 1.5% 1.8% – 2.0%
Discount rate at 30 April 2018 9.1% 8.8% 8.6% 11.0% 8.5% 9.0%
Discount rate at 30 April 2017 8.8% 8.7% 8.2% 11.5% – 8.9%
Goodwill impairment tests – sensitivities
The value-in-use is based upon anticipated discounted future cash flows and results in significant headroom across all CGU groups. Whilst the
Directors believe the assumptions used are realistic, it is possible that a reduction in the headroom would occur if any of the above key
assumptions were adversely changed. Factors which could cause an impairment are:
• significant underperformance relative to the forecast; and
• deteriorations in the economies in which the Group operates.
To support their assertions, the Directors have conducted sensitivity analyses to determine the impact that would result from the above
situations. Key sensitivities tested included future growth and discount rates. In these cases, if estimates of future growth were reduced
to 0% per annum, or if the estimated discount rates applied to the cash flows were increased by 1%, there would still be adequate
headroom to support the carrying value of the assets. Based on this analysis the Directors believe that a reasonably possible change in
any of the key assumptions detailed above would not cause the carrying value of CGU groups to exceed their recoverable amounts.
Therefore at 30 April 2018 no impairment charge is required against the carrying value of goodwill.
25
11. Property, plant and equipment

Land and Plant and Fixtures Under
buildings equipment and fittings construction Total
£m £m £m £m £m
Cost
At 1 May 2017 772 2,254 73 162 3,261
Acquisitions 65 289 1 18 373
Additions 14 125 6 180 325
Disposals (8) (96) (6) (5) (115)
Transfers 22 65 16 (103) –
Currency translation 18 21 3 1 43
At 30 April 2018 883 2,658 93 253 3,887
Depreciation and impairment
At 1 May 2017 (155) (1,208) (32) – (1,395)
Depreciation charge (25) (136) (7) – (168)
Impairment – (1) – – (1)
Disposals 7 83 6 – 96
Currency translation (3) (19) (1) – (23)
At 30 April 2018 (176) (1,281) (34) – (1,491)
Carrying amount
At 1 May 2017 617 1,046 41 162 1,866
At 30 April 2018 707 1,377 59 253 2,396
Land and Plant and Fixtures Under

buildings equipment and fittings construction Total
£m £m £m £m £m
Cost
At 1 May 2016 693 2,013 56 157 2,919
Acquisitions 11 7 3 – 21
Additions 17 70 7 121 215
Adjustment related to business combinations in prior year – (3) – – (3)
Disposals (15) (52) (3) (5) (75)
Transfers 25 89 5 (119) –
Currency translation 41 130 5 8 184
At 30 April 2017 772 2,254 73 162 3,261
Depreciation and impairment
At 1 May 2016 (136) (1,079) (26) – (1,241)
Depreciation charge (22) (120) (6) – (148)
Impairment (2) (1) – – (3)
Disposals 14 50 2 – 66
Currency translation (9) (58) (2) – (69)
At 30 April 2017 (155) (1,208) (32) – (1,395)
Carrying amount
At 1 May 2016 557 934 30 157 1,678
At 30 April 2017 617 1,046 41 162 1,866
Assets under construction mainly relate to production machines and site improvements being constructed at various sites across the Group.
Carrying amount held under finance leases

At 1 May 2017 6 17 1 – 24
At 30 April 2018 7 19 1 – 27
26
110
12. Equity accounted investments
2018 2017
£m £m
At 1 May 9 4
Acquisitions 12 –
Dividends (1) –
Share of profit of equity accounted investments 5 3
Share of other comprehensive income of equity accounted investments – 1
Currency translation (1) 1
At 30 April 24 9
Principal equity accounted investments

Ownership interest
Principal country
Nature of business of operation 2018 2017
OJSC Rubezhansk Paper and Packaging Mill Paper and packaging Ukraine 49.6% 49.6%
Philcorr LLC Packaging USA 40.0% –
Philcorr Vineland LLC Packaging USA 40.0% –
The Display Connection Inc (DCI) Point of sale display USA 48.0% –
The Group accounts for its investment in Rubezhansk using the equity method as an associate because the Group has the ability to
exercise significant influence over the investment due to the Group’s equity holdings.
The Group has a 40% interest in Philcorr LLC and Philcorr Vineland LLC, and a 48% interest in DCI, acquired as part of the Interstate
Resources acquisition. The Group accounts for its investments in Philcorr LLC, Philcorr Vinelands LLC and DCI under the equity method
of accounting because the Group has the ability to exercise significant influence over the investments due to the Group’s equity holdings
and board representation.
Summary of financial information of associates
The financial information below is for the Group’s associates on a 100% basis for the year ended 31 December.
2018 2017
£m £m
Current assets 45 26
Non-current assets 37 40
Current liabilities (20) (21)
Non-current liabilities (20) (17)
Revenue 192 108
Profit after tax 14 6
Other comprehensive income 1 3
13. Other investments

2018 2017
£m £m
Other investments 8 3
Restricted cash 3 –
Total non-current investments 11 3
14. Inventories
2018 2017
£m £m
Raw materials and consumables 313 219
Work in progress 26 24
Finished goods 204 163
543 406
Inventory provisions at 30 April 2018 were £33m (30 April 2017: £28m). Inventory write-offs in the year totalled £1m (2016/17: £1m).
27
15. Trade and other receivables

2018 2017
Non- Non-
current Current current Current
£m £m £m £m
Trade receivables – 690 – 628
Provisions for bad and doubtful receivables – (39) – (37)
Prepayments and accrued income – 64 – 63
Other deposits – 45 – 40
Other receivables 7 103 3 72
7 863 3 766
The Group has sold without recourse certain trade receivables and on realisation the receivable is de-recognised and proceeds are presented
within operating cash flows.
Of which
neither Of which past due but not impaired
Net carrying impaired 1 month 1–3 3–6 6–12 More than
amount nor past due or less months months months 12 months
Trade receivables £m £m £m £m £m £m £m
At 30 April 2018 651 523 78 30 11 5 4
At 30 April 2017 591 478 72 25 7 6 3
Movement in bad and doubtful receivables allowance

2018 2017
£m £m
At 1 May (37) (33)
Uncollectible amounts written off 4 3
Increase in allowance recognised in the income statement (3) (2)
Acquisitions (1) (3)
Currency translation (2) (2)
At 30 April (39) (37)
Concentrations of credit risk with respect to trade receivables are limited due to the Group’s customer base being large and diverse.
Management believes there is no further credit risk provision required in excess of the normal provision for bad and doubtful receivables.
16. Trade and other payables

2018 2017
Non- Non-
£m £m £m £m
Trade payables – 1,170 – 1,012
Non-trade payables and accrued expenses 14 535 14 346
14 1,705 14 1,358
In accordance with government initiatives to allow suppliers to receive payments earlier than contractual payment terms the Group has set up,
through third parties, supply chain finance programmes. These allow suppliers to receive, if they choose, an earlier payment whilst the Group
continues to pay to the suppliers’ contractual terms. Suppliers are at liberty to use them or not and these arrangements have no cost to the
Group and have no effect on trade payable balances or operating cash flows.
Within non-trade payables and accrued expenses is the redemption liability arising on the acquisition of Interstate Resources and relating to
a put option held by the seller, as detailed further in note 30. The first exercise date is 1 September 2019 under the contract, and as such the
redemption liability is classified within current liabilities.
The liability at 30 April 2018 is recorded at the discounted fair value of the estimated redemption amount, applying a discount rate of 9%,
based on the multiple based formula using the forecast results of the Interstate Resources business, as specified in the contract. The
movements due to re-measurement in the year ended 30 April 2018 were £2m.
28
112
17. Net debt
2018 2017
£m £m
Non-current liabilities (1,811) (1,144)
Current liabilities (162) (119)
Derivative financial instruments (23) 8
Net cash and cash equivalents 268 123
Other investments – restricted cash 3 –
Other deposits 45 40
Net debt (1,680) (1,092)
The movement in net debt is as follows:

Foreign
exchange, fair
Continuing value and
At 1 May operations non-cash At 30 April
2017 cash flow Acquisitions movements 2018
£m £m £m £m £m
Cash and cash equivalents 139 150 4 4 297
Overdrafts (16) (11) (2) – (29)
Net cash and cash equivalents 123 139 2 4 268
Other investments – restricted cash – 3 – – 3
Other deposits 40 3 – 2 45
Borrowings due – after one year (1,133) (820) – 151 (1,802)
Borrowings due – within one year (115) 302 (203) (142) (158)
Finance leases (15) 4 (1) (1) (13)
Derivative financial instruments
assets 14 (4) – 2 12
liabilities (6) 2 – (31) (35)
(1,215) (510) (204) (19) (1,948)
Net debt (1,092) (371) (202) (15) (1,680)
Net debt is a non-GAAP measure not defined by IFRS, calculated in accordance with the Group’s banking covenant requirements. Further detail
on the use of non-GAAP measures is included in note 32.
Derivative financial instruments above relate to forward foreign exchange contracts, interest rate and cross-currency swaps used to hedge
the Group’s borrowings and the ratio of net debt to adjusted 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.
Non-cash movements relate to amortisation of fees incurred on debt issuance and new finance leases.
Other deposits are included, as these short-term receivables have the characteristics of net debt.
29
18. Cash and cash equivalents

2018 2017
£m £m
Bank balances 195 135
Short-term deposits 102 4
Cash and cash equivalents (consolidated statement of financial position) 297 139
Bank overdrafts (29) (16)
Net cash and cash equivalents (consolidated statement of cash flows) 268 123
19. Borrowings
2018 2017
Current Non-current Total Current Non-current Total
£m £m £m £m £m £m
Bank and other loans1 – (1) (1) (100) (94) (194)
Medium-term notes and other fixed-term debt
€59m euro private placement shelf facility 4.40% coupon August 2018 (52) – (52) – (50) (50)
€60m euro term loan floating EURIBOR + margin December 2018 (53) – (53) – (51) (51)
€60m euro term loan floating EURIBOR + margin January 2019 (53) – (53) – (51) (51)
€59m euro private placement shelf facility 4.83% coupon August 2020 – (52) (52) – (50) (50)
$380m (30 April 2017: $400m) USD private placement 4.51% weighted
average coupon August 2019-20222 – (276) (276) (15) (293) (308)
€150m euro term loan fixed rate 0.6% coupon July 2021 – (132) (132) – (126) (126)
€500m euro medium-term note 2.25% coupon September 2022 – (437) (437) – (418) (418)
€750m euro medium-term note 1.38% coupon July 2024 – (656) (656) – – –
£250m medium-term note 2.88% coupon July 2029 – (248) (248) – – –
Finance lease liabilities (4) (9) (13) (4) (11) (15)
(162) (1,811) (1,973) (119) (1,144) (1,263)
1. Drawings under a short-term bank revolving credit facility and other bank loans.
2. Swapped to fixed rate £150m and fixed rate €158m using cross-currency interest rate swaps.
Borrowings are unsecured and, at 30 April 2018, all measured at amortised cost.
On 26 July 2017, the Group issued two public medium-term notes in the debt capital markets. The two issues were a seven year 1.38% €750m
note and a 12 year 2.88% £250m note.
There have been no breaches of covenants during the year ended 30 April 2018 in relation to the above borrowings.
Of the total borrowing facilities available to the Group, the undrawn committed facilities available at 30 April were as follows:
2018 2017
£m £m
Expiring between two and five years 800 705
Changes in liabilities arising from financing activities

At 1 May Financing New finance At 30 April
2017 cash flows Acquisitions leases Fair value Other 2018
£m £m £m £m adjustments £m £m
Bank and other loans (194) 396 (203) – – – (1)
Medium-term notes and other fixed-term debt (1,054) (914) – – – 9 (1,959)
Finance lease liabilities (15) 4 (1) (1) – – (13)
Derivative financial instruments related to hedging
of financial liabilities (note 17)
assets 14 (4) – – 2 – 12
liabilities (6) 2 – – (31) – (35)
Total liabilities from financing activities (1,255) (516) (204) (1) (29) 9 (1,996)
Other changes include foreign exchange movements.

Financing cash flows consists of the net amount of proceeds from borrowings, repayment of borrowings, repayment of finance lease
obligations and proceeds from settlement of derivative financial instruments in the consolidated statement of cash flows. Proceeds from
settlement of derivative financial instruments in the consolidated statement of cash flows relate solely to derivative financial instruments
used to hedge the Group’s borrowings and the ratio of net debt to adjusted EBITDA.
30
114
19. Borrowings continued
The repayment profile of the Group’s borrowings, after taking into account the effect of cross-currency interest rate swaps and forward foreign
exchange contracts, is as follows:
2018
1 year 1–2 2–5 More than
or less years years 5 years Total
£m £m £m £m £m
Borrowings
Fixed rate (112) (116) (788) (907) (1,923)
Floating rate (50) – – – (50)
Total borrowings (162) (116) (788) (907) (1,973)
2017
1 year 1–2 2–5 More than
or less years years 5 years Total
£m £m £m £m £m
Borrowings
Fixed rate (19) (54) (281) (627) (981)
Floating rate (100) (101) (81) – (282)
Total borrowings (119) (155) (362) (627) (1,263)
The Group’s borrowings, after taking into account the effect of cross-currency interest rate swaps, and forward foreign exchange contracts
are denominated in the following currencies:
2018
Sterling Euro US dollar Other Total
£m £m £m £m £m
Borrowings
Fixed rate (392) (1,474) – (57) (1,923)
Floating rate 128 172 (350) – (50)
(264) (1,302) (350) (57) (1,973)
Net cash and cash equivalents (including bank overdrafts)
Floating rate 120 101 20 27 268
Net borrowings at 30 April 2018 (144) (1,201) (330) (30) (1,705)
2017
Sterling Euro US dollar Other Total
£m £m £m £m £m
Borrowings
Fixed rate (156) (811) – (14) (981)
Floating rate (12) (203) (35) (32) (282)
(168) (1,014) (35) (46) (1,263)
Net cash and cash equivalents (including bank overdrafts)
Floating rate 15 80 3 25 123
Net borrowings at 30 April 2017 (153) (934) (32) (21) (1,140)
At 30 April 2018, 66% of the Group’s borrowings, after taking into account the effect of cross-currency swaps, were denominated in euros in
order to hedge the underlying assets of the Group’s European operations (30 April 2017: 80%). Interest rates on floating rate borrowings are
based on London Interbank Offered Rate (LIBOR), Euro Interbank Offered Rate (EURIBOR) or base rates.
Finance lease liabilities
2018 2017
Present Present
Future value of Future value of
minimum minimum minimum minimum
lease lease lease lease
payments Interest payments payments Interest payments
£m £m £m £m £m £m
Less than one year 4 – 4 4 – 4
Between one and five years 9 – 9 10 – 10
More than five years – – – 1 – 1
Finance lease liabilities 13 – 13 15 – 15
31
20. Financial instruments

The Group’s activities expose the Group to a number of key risks which have the potential to affect its ability to achieve its business objectives.
A summary of the Group’s key financial risks and the policies and objectives in place to manage these risks is set out in the financial review and
Principal risk sections of the strategic report.
The derivative financial instruments set out in this note have been entered into in line with the Group’s risk management objectives. The
Group’s treasury policy prohibits entering into speculative transactions.
(a) Carrying amounts and fair values of financial assets and liabilities
Set out below is the accounting classification of the carrying amounts and fair values of all of the Group’s financial assets and liabilities:
2018 2017
Carrying Carrying
amount Fair value amount Fair value
£m £m £m £m
Financial assets
Cash and cash equivalents 297 297 139 139
Available for sale – other investments 11 11 3 3
Trade and other receivables 870 870 769 769
Derivative financial instruments 59 59 32 32
Total financial assets 1,237 1,237 943 943
Financial liabilities
Trade and other payables (1,719) (1,719) (1,372) (1,372)
Bank and other loans (1) (1) (194) (194)
Medium-term notes and other fixed-term debt (1,959) (1,995) (1,054) (1,088)
Finance lease liabilities (13) (13) (15) (15)
Bank overdrafts (29) (29) (16) (16)
Derivative financial instruments (59) (59) (24) (24)
Total financial liabilities (3,780) (3,816) (2,675) (2,709)
The fair value is the amount for which an asset or liability could be exchanged or settled on an arm’s-length basis. For financial instruments
carried at fair value, market prices or rates are used to determine fair value where an active market exists. The Group uses forward prices for
valuing forward foreign exchange and commodity contracts and uses valuation models with present value calculations based on market yield
curves to value note purchase agreements, the medium-term note, cross-currency swaps and interest rate swaps. All derivative financial
instruments are shown at fair value in the consolidated statement of financial position.
The Group’s medium-term notes and other fixed-term debt are in effective cash flow and net investment hedges and are therefore held at
amortised cost. The fair values of financial assets and liabilities which bear floating rates of interest are estimated to be equivalent to their
carrying amounts.
IFRS 7 Financial Instruments: Disclosures requires the classification of fair value measurements using the fair value hierarchy that reflects the
significance of the inputs used in making the assessments.
All of the Group’s financial instruments are Level 2 financial instruments in accordance with the fair value hierarchy, meaning although the
instruments are not traded in an active market, inputs to fair value are observable for the asset and liability, either directly (i.e. quoted market
prices) or indirectly (i.e. derived from prices).
32
116
20. Financial instruments continued
(b) Derivative financial instruments
The Group enters into derivative financial instruments, primarily interest rate, foreign exchange and commodity contracts, to manage the risks
associated with the Group’s underlying business activities and the financing of these activities. Derivatives designated as effective hedging
instruments are carried at their fair value.
The assets and liabilities of the Group at 30 April in respect of derivative financial instruments are as follows:
Assets Liabilities Net
2018 2017 2018 2017 2018 2017
£m £m £m £m £m £m
Derivatives held to:
Manage the interest rate and currency exposures on business
activities, borrowings and net investments 12 14 (35) (6) (23) 8
Derivative financial instruments included in net debt 12 14 (35) (6) (23) 8
Derivatives held to hedge future transactions:
Energy costs 47 18 (24) (18) 23 –
Total derivative financial instruments 59 32 (59) (24) – 8
Current 44 13 (24) (13) 20 –

Non-current 15 19 (35) (11) (20) 8
59 32 (59) (24) – 8
(c) Cash flow, fair value and net investment hedges

(i) Cash flow hedging reserve movements
The following table identifies the movements in the cash flow hedging reserve during the year. All figures are post-tax.
2018 2017
£m £m
At 1 May (22) (29)
Post-tax unrealised fair value (loss)/gain on designated cash flow hedges
Cross-currency interest rate swaps (21) (9)
Forward foreign exchange contracts 2 –
Commodity contracts 26 10
Post-tax loss/(gain) reclassified from equity to the income statement
Cross-currency interest rate swaps 14 2
Commodity contracts (6) 4
At 30 April (7) (22)
The amounts reclassified to the income statement from the cash flow hedging reserve during the year are reflected in the following items in
the income statement:
2018 2017
£m £m
Cost of sales (7) 5
Finance costs 17 3
Total pre-tax loss reclassified from equity to the income statement during the year 10 8
(ii) Hedges of net investments in foreign operations

The Group holds cross-currency interest rate swap contracts as hedges of long-term investments in foreign subsidiaries. The pre-tax loss
on the hedges recognised in equity during the year was £1m (2016/17: loss of £11m). This loss is matched by a similar gain in equity on the
retranslation of the hedged foreign subsidiary net assets resulting in a net gain of £nil (2016/17: net gain of £nil) treated as hedge
ineffectiveness in the income statement.
33

(d) Risk identification and risk management
(i) Capital management
The Group defines its managed capital as equity, as presented in the consolidated statement of financial position, and net debt (note 17).
2018 2017
£m £m
Net debt 1,680 1,092
Total equity 2,110 1,355
Managed capital 3,790 2,447
The major changes in managed capital levels are as follows: during the year, the Group issued €750m and £250m of new debt under the
EMTN programme, and made a significant equity issue with proceeds of £283m, both primarily to raise funds for the Interstate Resources
acquisition. Equity was also issued as part of the consideration for both the Interstate Resources and EcoPack/EcoPaper acquisitions.
Managed capital is different from capital employed (defined as property, plant and equipment, goodwill and intangible assets, working capital,
capital debtors/creditors, provisions, biological assets and assets/liabilities held for sale). Managed capital relates to our sources of funding,
whereas adjusted return on average capital employed is our measure of the level of return being generated by the asset base.
The Group funds its operations from the following sources of capital: operating cash flow, borrowings, 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 significant 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 and from
a variety of sources.
The Group’s overall treasury objectives are to ensure sufficient funds are available for the Group to carry out its strategy and to manage
certain financial risks to which the Group is exposed, as described elsewhere in this note. The Group’s treasury strategy is controlled through
the Balance Sheet Committee which meets every two months and includes the Group Finance Director, the Group General Counsel and
Company Secretary, the Group Financial Controller and the Group Director of Tax and Treasury. The Group Treasury function operates in
accordance with policies and procedures approved by the Board and is controlled by the Group Director of Tax and Treasury. The function
arranges funding for the Group, provides a service to operations and implements strategies for financial risk management.
(ii) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument fluctuate because of a change in market prices. The
Group is exposed to changes in interest rates, foreign currency exchange rates and commodity prices.
Interest rate risk
The Group is exposed to interest rate risk as borrowings are arranged at fixed interest rates, exposing it to fair value risk, and at floating
interest rates, exposing it to future cash flow risk. The risk is managed by maintaining a mix of fixed and floating rate borrowings and by the
use of interest rate swap contracts which modify the interest payable on the Group’s underlying debt instruments. The Group’s exposures
to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.
At 30 April 2018, 97% of the Group’s borrowings were at fixed rates of interest (30 April 2017: 78%). The sensitivity analysis below shows the
impact on profit and total equity of a 100 basis points rise in market interest rates (representing management’s assessment of the reasonably
possible change in interest rates) in all currencies in which the Group had variable-rate borrowings at 30 April 2018.
To calculate the impact on the income statement for the year, the interest rates on all variable-rate external borrowings and cash deposits
have been increased by 100 basis points, and the resulting increase in the net interest charge has been adjusted for the effect of the Group’s
interest rate derivatives.
34
118
(d) Risk identification and risk management continued
(ii) Market risk continued
The results are presented before non-controlling interests and tax.
2018 2017
Impact Impact
Impact on on total Impact on on total
profit equity profit equity
£m £m £m £m
Increase in market interest rates of 100 basis points (1) (1) (3) (3)
Under interest rate swap contracts, the Group agrees to exchange a stream of interest payments calculated on agreed notional principal
amounts. At 30 April 2018, losses of £23m (30 April 2017: losses of £21m) net of tax are deferred in equity in respect of cash flow hedges of
interest rate risk. These will be reclassified to the income statement in the period in which the hedged item also affects the income statement,
which will be during the period to 2022.
Foreign exchange risk
Foreign exchange risk on investments
The Group is exposed to foreign exchange risk arising from net investments in Group entities, the functional currencies of which differ from
the Group’s presentational currency, sterling. The Group partly hedges this exposure through borrowings denominated in foreign currencies
and through cross-currency swap and forward foreign exchange contracts. Gains and losses for hedges of net investments are recognised
in equity.
Foreign exchange risk on borrowings
The Group is exposed to foreign exchange risk on borrowings denominated in foreign currencies. The Group hedges this exposure through
cross-currency swaps and forward foreign exchange contracts designated as either cash flow or fair value hedges.
Foreign exchange risk on transactions
Foreign currency transaction risk arises where a business unit makes product sales or purchases in a currency other than its functional
currency. Part of this risk is hedged using forward foreign exchange contracts which are designated as cash flow hedges.
At 30 April 2018, losses net of tax deferred in equity in respect of foreign exchange cash flow hedges were £2m (30 April 2017: £nil).
The Group’s main currency exposures are to the euro and US dollar. The following significant exchange rates applied during the year:
2018 2017
Average Closing Average Closing
euro 1.132 1.137 1.179 1.184
US dollar 1.356 1.373 1.285 1.294
The following sensitivity analysis shows the impact on the Group’s results of a 10% strengthening and weakening in the sterling exchange
rate against all other currencies representing management’s assessment of the reasonably possible change in foreign exchange rates. The
analysis is restricted to financial instruments denominated in a foreign currency and excludes the impact of financial instruments designated
as net investment hedges.
Net investment and fair value hedges are excluded as the impact of the foreign exchange movements on these are offset by equal and
opposite movements in the hedged items.
2018 2017
Impact Impact
£m £m £m £m
10% strengthening of sterling – 32 – 24
10% weakening of sterling – (39) – (30)
35

(ii) Market risk continued
Commodity risk
The Group’s main commodity exposures are to changes in gas and electricity prices. This commodity price risk is managed by a combination
of physical supply agreements and derivative instruments. At 30 April 2018, gains of £20m net of tax (2016/17: £nil) are deferred in equity in
respect of cash flow hedges in accordance with IAS 39 (30 April 2017: losses of £nil). Any gains or losses deferred in equity will be reclassified
to the income statement in the period in which the hedged item also affects the income statement, which will occur within three years.
The following table details the Group’s sensitivity to a 10% increase in these prices, which is management’s assessment of the reasonably
possible change, on average, over any given year. A decrease of 10% in these prices would produce an opposite effect on equity. As all of
the Group’s commodity financial instruments achieve hedge accounting under IAS 39, there is no impact on profit for either year.
2018 2017
Impact Impact
£m £m £m £m
10% increase in electricity prices – 3 – 2
10% increase in gas prices – 17 – 13
(iii) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due, causing financial
loss to the Group. In the current economic environment, the Group has placed increased emphasis on the management of credit risk. The carrying
amount of financial assets at 30 April 2018 was £1,237m and is analysed in note 20(a). This represents the maximum credit risk exposure.
Credit risk on financial instruments held with financial institutions is assessed and managed by reference to the long-term credit ratings
assigned to that counterparty by Standard & Poor’s and Moody’s credit rating agencies. There are no significant concentrations of credit risk.
See note 15 for information on credit risk with respect to trade receivables.
(iv) Liquidity risk
Liquidity risk is the risk that the Group, although solvent, will have difficulty in meeting its obligations associated with its financial liabilities as
they fall due.
The Group manages its liquidity risk by maintaining a sufficient level of undrawn committed borrowing facilities. At 30 April 2018, the Group
had £800m of undrawn committed borrowing facilities (30 April 2017: £705m). The Group mitigates its refinancing risk by raising its debt
requirements from a number of different sources with a range of maturities.
The following table is an analysis of the undiscounted contractual maturities of financial liabilities (including the effect of cross-currency
interest rate swaps).
Contractual repayments
1 year 1–5 More than
Total or less years 5 years
At 30 April 2018 £m £m £m £m
Non-derivative financial liabilities
Trade and other payables 1,719 1,705 14 –
Bank and other loans 1 – 1 –
Medium-term notes and other fixed-term debt 1,979 157 912 910
Finance lease liabilities 13 4 9 –
Bank overdrafts 29 29 – –
Interest payments on borrowings 235 37 130 68
Total non-derivative financial liabilities 3,976 1,932 1,066 978
36
120
(iv) Liquidity risk continued
Contractual repayments
At 30 April 2017 £m £m £m £m
Non-derivative financial liabilities
Trade and other payables 1,372 1,358 14 –
Bank and other loans 197 100 97 –
Finance lease liabilities 15 4 10 1
Bank overdrafts 16 16 – –
Interest payments on borrowings 120 25 82 13
Total non-derivative financial liabilities 2,770 1,518 615 637
Refer to note 28 for an analysis of the Group’s future operating lease payments and to note 29 for a summary of the Group’s
capital commitments.
The following table is an analysis of the undiscounted contractual maturities of derivative financial instruments excluding interest payments
and receipts. Where the payable and receivable legs of these derivatives are denominated in foreign currencies, the contractual payments or
receipts have been calculated based on exchange rates prevailing at the respective year ends.
Where applicable, interest and foreign exchange rates prevailing at the reporting date are assumed to remain constant over the future
contractual maturities.
Contractual payments/(receipts)
At 30 April 2018 £m £m £m £m
Derivative financial liabilities
Energy derivatives (24) (18) (6) –
Interest rate and currency swaps:
Payments 1,327 743 584 –
Receipts (1,313) (740) (573) –
Total net derivative financial (assets)/liabilities (10) (15) 5 –
Contractual payments/(receipts)
At 30 April 2017 £m £m £m £m
Derivative financial liabilities
Energy derivatives – – – –
Interest rate and currency swaps:
Payments 492 74 86 332
Receipts (502) (74) (90) (338)
Total net derivative financial (assets)/liabilities (10) – (4) (6)
37
21. Deferred tax assets and liabilities

Analysis of movements in recognised deferred tax assets and liabilities during the year
Property, plant and
equipment and intangible Employee benefits Tax
assets including pensions losses Other Total
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
£m £m £m £m £m £m £m £m £m £m
At 1 May (169) (158) 51 53 63 39 1 (17) (54) (83)
Acquired (120) (4) 1 – – – – – (119) (4)
Credit/(charge) for the year 66 10 (4) (2) (12) 14 – – 50 22
Recognised directly in equity – – (8) (2) – 8 (3) 16 (11) 22
Currency translation 2 (17) 1 2 – 2 – 2 3 (11)
At 30 April (221) (169) 41 51 51 63 (2) 1 (131) (54)
At 30 April 2018, deferred tax assets and liabilities were recognised for all taxable temporary differences:
• except where the deferred tax liability arises on goodwill;
• except on initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor the taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries and associates, except where the timing of
the reversal of temporary differences can be controlled by the Group and it is probable that temporary differences will not reverse in
the foreseeable future.
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the
deferred tax balances (after offset) for financial reporting purposes:
2018 2017
£m £m
Deferred tax liabilities (195) (133)
Deferred tax assets 64 79
Net deferred tax (131) (54)
The deferred tax asset in respect of tax losses at 30 April 2018 includes an asset in the UK of £31m (30 April 2017: £36m). The asset is
recognised based on additional interest income that will arise in the UK from the financing of acquisitions. The asset is expected to be fully
recovered over the next five years.
The Group has total unrecognised deferred tax assets relating to tax losses of £20m (30 April 2017: £19m). These losses do not expire under
current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable
profit will be available against which the Group can utilise these benefits.
38
122
22. Provisions
Restructuring Other Total
£m £m £m
At 1 May 2017 18 11 29
Acquisitions – 4 4
Charged to income 17 – 17
Credited to income – (1) (1)
Utilised (27) (2) (29)
At 30 April 2018 8 12 20
Non-current – 4 4
Current 8 8 16
8 12 20
The restructuring provision includes amounts associated with the site closures and restructuring costs described in note 4. Other provisions
mainly relate to environmental and restoration liabilities, indemnities and liabilities related to litigations. The timing of the utilisation of these
provisions is uncertain, except where the associated costs are contractual, in which case the provision is utilised over the time period specified
in the contract.
23. Capital and reserves

Share capital
Number of shares
2018 2017 2018 2017
millions millions £m £m
Ordinary equity shares of 10 pence each:
Issued, allotted, called up and fully paid 1,075 951 107 95
During the year ended 30 April 2018, 1,619,350 ordinary shares were issued as a result of exercises of employee share options. A placing on
29 June 2018 connected with the acquisition of Interstate Resources comprised an issue of 62,637,363 ordinary shares. The gross proceeds
from issue of share capital were £288m. The related transaction costs amounting to £5m have been netted against proceeds.
Additionally, 52,474,156 ordinary shares were issued to the seller of Interstate Resources, and 6,492,411 ordinary shares were issued to the
sellers of EcoPack/EcoPaper during the year.
The net movements in share capital and share premium are disclosed in the consolidated statement of changes in equity.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
meetings of the Company. In respect of the Company’s shares that are held by the Group, all rights are suspended until those shares
are reissued.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign
operations and the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related
to hedged transactions that have not yet occurred.
Share premium
The share premium account represents the difference between the issue price and the nominal value of shares issued.
Own shares
The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group. The Group operates a General
Employee Benefit Trust, which acquires shares in the Company that can be used to satisfy the requirements of the performance share plan
and the share matching plan. At 30 April 2018, the Trust held 0.4m shares (30 April 2017: 2.0m shares). The market value of the shares at
30 April 2018 was £2.0m (30 April 2017: £6.7m). Dividends receivable on the shares owned by the Trust have been waived.
Non-controlling interests
The Group has various put options in relation to subsidiaries with non-controlling interests. The Group records a liability at the net present
value of the expected future payments, with a corresponding entry against non-controlling interests in respect of the non-controlling
shareholders’ put option, measured at fair value. At the end of each period, the valuation of the liability is reassessed with any changes
recorded within finance costs through the income statement and then transferred out of retained earnings into non-controlling interests.
Retained earnings
Retained earnings includes a merger relief reserve related to the shares issued in consideration to the sellers of EcoPack/EcoPaper. The
closing balance of this reserve is £32m.
39
24. Employee benefits

Total UK Overseas
2018 2017 2018 2017 2018 2017
Balance sheet £m £m £m £m £m £m
Present value of post-retirement obligations (1,186) (1,277) (1,029) (1,133) (157) (144)
Fair value of plan assets

Equities/multi-strategy 322 294 303 281 19 13
Debt instruments 228 165 195 134 33 31
Derivatives 522 506 520 506 2 –
Real estate 3 3 – – 3 3
Cash and cash equivalents 5 3 4 2 1 1
Other 6 128 – 128 6 –
1,086 1,099 1,022 1,051 64 48
Net post-retirement plan deficit (100) (178) (7) (82) (93) (96)
Other employee benefit liabilities (6) (3) – – (6) (3)
Total employee benefit deficit (106) (181) (7) (82) (99) (99)
Related deferred tax asset 26 42 1 14 25 28
Net employee benefit deficit (80) (139) (6) (68) (74) (71)
Employee benefit schemes

At 30 April 2018, the Group operated a number of employee benefit arrangements for the benefit of its employees throughout the world. The
plans are provided through both defined benefit and defined contribution arrangements and their legal status and control vary depending on
the conditions and practices in the countries concerned.
Pension scheme trustees and representatives of the Group work with those managing the employee benefit arrangements to monitor the
effects on the arrangements of changes in financial markets and the impact of uncertainty in assumptions, and to develop strategies that
could mitigate the risks to which these employee benefit schemes expose the Group.
UK schemes
The DS Smith Group Pension Scheme (the ‘Group Scheme’) is a UK funded final salary defined benefit scheme providing pensions and lump
sum benefits to members and dependants. The Group Scheme closed to future accrual from 30 April 2011 with pensions calculated based on
pensionable salaries up to the point of closure (or the date of leaving the Group Scheme, if earlier). The Group Scheme has a normal retirement
age of 65 although some members are able to take their benefits earlier than this. Increases to pensions are affected by changes in the rate of
inflation for the majority of members.
The Group Scheme is governed by a Trustee Company (DS Smith Pension Trustees Limited), which is comprised of a Board of Trustee
Directors (the ‘Trustee Board’) and is independent of the Group. The Trustee Board is responsible for managing the operation, funding and
investment strategy of the Group Scheme.
UK legislation requires the Trustee Board to carry out actuarial funding valuations at least every three years and to target full funding over
an appropriate period of time, taking into account the current circumstances of the Group Scheme and the Group on a basis that prudently
reflects the risks to which the Group Scheme is exposed (the ‘Technical Provisions’ basis). The most recent funding valuation was carried out
as 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 annum, commencing with the current year back-dated to the beginning of the year. The
planned contribution for 2016/17 was, therefore, increased from £16m to £17.6m. The contribution for the year ended 30 April 2018 under
the plan is £18.3m. The recovery plan is expected to be completed on or around November 2025.
The Trustee Board and the Group have in place a secondary Long-Term Funding Target (the ‘LTFT’), in addition to the statutory funding
requirement, the purpose of which is to achieve material additional security for the Group Scheme’s members. The objective of the LTFT
is for the Group Scheme to be funded by 30 April 2035 to a level that does not expect to rely on future contributions from the Group.
In order to manage risk, the Group Scheme’s investment strategy is designed to closely align movements in the Group Scheme’s assets to that
of its liabilities, whilst maintaining an appropriate level of expected return. To do this, the Scheme has hedged its inflation and interest rate risk
exposure on a Technical Provisions basis. To help the Trustee Board to monitor, review and assess investment matters, the Investment and
Funding Committee (the ‘IFC’), which consists of representatives from the Trustee Board and the Group, meets on a quarterly basis
throughout the year.
The Group Scheme exposes the Group to risks, such as longevity risk, currency risk, inflation risk, interest rate risk and investment risk. As the
Group Scheme’s obligation is to provide lifetime pension benefits to members upon retirement, increases in life expectancy will result in an
increase in the Group Scheme’s liabilities. Other assumptions used to value the defined benefit obligation are also uncertain.
The largest defined contribution arrangement operated by the Group is in the UK. The UK defined contribution scheme is a trust-based
arrangement offering members a range of investments. All assets are held independently from the Group. The Group also operates a small
unfunded arrangement in the UK.
40
124
24. Employee benefits continued
Overseas schemes
The countries where the Group operates the most significant defined benefit post-retirement arrangements are:
• France – various mandatory retirement indemnities, post-retirement medical plans and jubilee arrangements (benefits paid to
employees after completion of a certain number of years of service) the majority of which are determined by the applicable Collective
Bargaining Agreement;
• Belgium – liabilities with respect to non-contributory defined benefit and cash balance retirement plans, as well as unfunded jubilee
arrangements. The defined benefit plan is closed to new employees, although active members continue to accrue benefits;
• Switzerland – a contributory defined benefit pension scheme providing pensions and lump sum benefits to members and dependants;
• Italy – mandatory end-of-service lump sum benefits in respect of pre-2007 service; and
• Germany – jubilee arrangements and non-contributory defined benefit pension schemes.
In general, local trustees or similar bodies manage the post-retirement and medical plans in accordance with local regulations.
Overseas schemes expose the Group to risks such as longevity risk, currency risk, inflation risk, interest rate risk, investment risk, life
expectancy risk and healthcare cost risk. Actions taken by the local regulator, or changes to legislation, could result in stronger local funding
requirements for pension schemes, which could affect the Group’s future cash flow.
Movements in the liability for employee benefit plans’ obligations recognised in the consolidated statement
of financial position
2018 2017
£m £m
Schemes’ liabilities at 1 May (1,280) (1,145)
Acquisitions (32) –
Interest cost (30) (36)
Service cost recognised in the consolidated income statement (6) (5)
Member contributions (1) (1)
Settlement/curtailment 19 –
Pension payments 49 48
Unfunded benefits paid 7 7
Actuarial gains/(losses) – financial assumptions 89 (217)
Actuarial (losses)/gains – experience (8) 56
Actuarial gains – demographic 4 22
Currency translation (3) (10)
Reclassification – 1
Schemes’ liabilities at 30 April (1,192) (1,280)
Movements in the fair value of employee benefit plans’ assets recognised in the consolidated statement
of financial position
2018 2017
£m £m
Schemes’ assets at 1 May 1,099 957
Acquisitions 24 –
Employer contributions 25 17
Member contributions 1 1
Other contributions 6 –
Settlement/curtailment (19) –
Interest income 27 32
Actuarial (losses)/gains (28) 138
Pension payments (49) (48)
Currency translation – 2
Schemes’ assets at 30 April 1,086 1,099
41

Durations and expected payment profile
The following table provides information on the distribution of the timing of expected benefit payments for the Group Scheme:
Within 5 6 to 10 11 to 20 21 to 30 31 to 40 41 to 50 Over 50
years years years years years years years
At 30 April 2018 £m £m £m £m £m £m £m
Projected benefit payments 197 233 502 400 248 104 25
The weighted average duration for the Group Scheme is 16 years.
The Group made agreed contributions of £20m to the Group Scheme in 2017/18 (2016/17: £16m). The Group’s current best estimate of
contributions expected to be made to the Group Scheme in the year ending 30 April 2019 is approximately £19m. A charge over four UK
Packaging properties has been made as security for the unfunded arrangement in the UK, the liability for which totals £7m.
Significant actuarial assumptions
Principal actuarial assumptions for the Group Scheme are as follows:
2018 2017
Discount rate for scheme liabilities 2.8% 2.5%
Inflation 2.0% 2.2%
Pre-retirement pension increases 2.0% 2.2%
Future pension increases for pre 30 April 2005 service 2.0% 2.2%
Future pension increases for post 30 April 2005 service 1.5% 1.8%
For other overseas arrangements, the weighted average actuarial assumptions are a discount rate of 1.4% (30 April 2017: 1.5%) and an
inflation rate of 1.8% (30 April 2017: 1.8%).
Assumptions regarding future mortality experience are set based on actuarial advice and in accordance with the relevant standard mortality
tables in each country. For the Group Scheme at 30 April 2018, the mortality base table used is S2PA (year of birth), with CMI 2017 projections
with a 1.25% per annum long-term rate of improvement used for future longevity improvement. At 30 April 2017 the mortality base table
used was S2PA (year of birth), with CMI 2016 projections with a 1.25% per annum long-term rate of improvement used for future longevity
improvement. As part of the Group Scheme actuarial valuation exercise the projected life expectancies were as follows:
2018 2017
Male Female Male Female
Life expectancy at age 65
Member currently aged 65 21.0 23.2 21.2 23.2
Member currently aged 45 22.0 24.9 22.1 25.0
Sensitivity analysis
The sensitivity of the liabilities in the Group Scheme to each significant actuarial assumption is summarised in the following table, showing
the impact on the defined benefit obligation if each assumption is altered by the amount specified in isolation, whilst assuming that all other
variables remain the same. In practice, this approach is not necessarily realistic since some assumptions are related. This sensitivity analysis
applies to the defined benefit obligation only and not to the net defined benefit pension liability, the measurement of which depends on a
number of factors including the fair value of plan assets.
Increase in
pension liability
£m
0.5% decrease in discount rate (86)
0.5% increase in inflation (59)
1 year increase in life expectancy (34)
42
126
Expense recognised in the consolidated income statement
Total
2018 2017
£m £m
Post-retirement benefits current service cost (6) (5)
Total service cost (6) (5)
Net interest cost on net pension liability (3) (4)
Pension Protection Fund levy (1) (1)
Employment benefit net finance expense (4) (5)
Total expense recognised in the consolidated income statement (10) (10)
Items recognised in other comprehensive income/(expense)

Remeasurement of defined benefit obligation 85 (139)
Return on plan assets excluding amounts included in employment benefit net finance expense (28) 138
Total gains/(losses) recognised in other comprehensive income/(expense) 57 (1)
25. Share-based payment expense

The Group’s share-based payment arrangements are as follows:
(i) A performance share plan (PSP). Awards under the PSP normally become exercisable after three years subject to remaining in service
and the satisfaction of performance conditions measured over the three financial years commencing with the year of grant. Awards have
been made under the PSP annually since 2008, originally based on the following performance measures, in the proportions shown below:
i. the Company’s total shareholder return (TSR) compared to the constituents of the Industrial Goods and Services Supersector within
the FTSE 250;
ii. average adjusted earnings per share (EPS); and
iii. average adjusted return on average capital employed (ROACE).
Awards between 2010 and 2014 are subject to three performance measures:
i. 50% of each award based on a TSR component;
ii. 25% of each award based on average adjusted EPS; and
iii. 25% of each award based on average adjusted ROACE.
Awards made between 2015 and 2016 are subject to three performance measures:
i. 33.3% of each award based on a TSR component;
ii. 33.3% of each award based on average adjusted EPS; and
iii. 33.3% of each award based on average adjusted ROACE.
Awards made in 2017 are subject to either two performance measures, or to three performance measures:
(a) Three performance measures:
i. 33.3% of each award based on a TSR component;
ii. 33.3% of each award based on average adjusted EPS; and
iii. 33.3% of each award based on average adjusted ROACE.
(b) Two performance measures:
i. 50% of each award based on average adjusted EPS; and
ii. 50% of each award based on average adjusted ROACE.
The 2013 and 2014 awards have vested, but have not yet been fully exercised.
(ii) A deferred share bonus plan (DSBP) is operated for Executive Directors and, from 2012/13, for senior executives. Shares awarded
under the Plan will vest automatically if the Director or senior executive is still employed by the Company three years after the grant
of the award.
The 2012, 2013 and 2014 awards have vested, but have not yet been fully exercised.
43
25. Share-based payment expense continued

(iii) A share matching plan (SMP) is operated for Executive Directors and senior executives with the first award made in 2012/13. The award
will vest after three years subject to remaining in service and the satisfaction of performance conditions measured over the three financial
years commencing with the year of grant. The performance conditions of the award are based 50% on average adjusted EPS and 50% on
average adjusted ROACE. No further awards under this Plan will be made subsequent to the 2014/15 award granted in July 2014.
All awards have vested, and have been fully exercised.
(iv) A long-term incentive plan (LTIP) is operated for selected senior managers with the first award made in 2013/14. The award will vest
after three years subject to remaining in service and the satisfaction of performance conditions measured over the three financial years
commencing with the year of grant. The performance conditions of the award are based 50% on average adjusted EPS and 50% on
average adjusted ROACE. The last award under this Plan was the 2016/17 award granted in July 2016.
(v) An international sharesave plan was introduced in January 2014 with further invitations being made in January 2016, January 2017
and January 2018. All employees of the Company and participating subsidiaries were eligible to participate in this plan. Under this HMRC
approved plan, options are granted to participants who have contracted to save up to a maximum of £250 (or local currency equivalent)
across all open invitations per month over a period of three years at a discount of up to 20% to the average closing mid-market price of a
DS Smith Plc ordinary share on the three dealing days prior to invitation. Options cannot normally be exercised until a minimum of three
years has elapsed. In common with most plans of this type there are no performance conditions applicable to options granted under
this plan. The provisions of this plan are subject to minor country specific variances. A standard US stock purchase plan, which received
shareholder approval at the 2014 AGM, was also introduced in January 2014 and subsequent invitations were made in 2016, 2017 and
2018. US employees of the Group are eligible to participate in this plan. Options are granted to participants who have contracted to save
up to $405 per month over a period of two years at a discount of up to 15% to the average closing mid-market price of a DS Smith Plc
ordinary share on the day before grant. Options cannot normally be exercised until a minimum of two years has elapsed.
Full details of the awards described in (i), (ii), (iii) and (v) are set out in the Remuneration Committee report.
Options outstanding and exercisable under share arrangements at 30 April 2018 were:
Options outstanding Options exercisable
Weighted
average Weighted Weighted
remaining average average
Number Option price contract life exercise Number exercise
of shares range (p) (years) price (p) exercisable price (p)
Performance share plan 6,014,273 Nil 1.1 Nil 588,584 Nil
Deferred Share Bonus Plan 1,161,278 Nil 0.9 Nil 165,221 Nil
Share Matching Plan – Nil – Nil – Nil
Sharesave Plan 9,751,212 269.0-412.0 2.0 343.7 64,296 269.0
Options outstanding Options exercisable

Weighted
average Weighted Weighted
remaining average average
Option price contract life exercise Value exercise
Value (£) range (p) (years) price (p) exercisable price (p)
Long-term incentive plan 3,158,096 Nil 0.8 Nil Nil Nil
The effect on earnings per share of potentially dilutive shares issuable under share-based payment arrangements is shown in note 8.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
Performance Deferred share Share matching Sharesave Long-term
share plan bonus plan plan plan incentive plan
Weighted Weighted Weighted Weighted Weighted
average average average average average
exercise Options exercise Options exercise Options exercise Options exercise Options
2018 price (p) (‘000s) price (p) (‘000s) price (p) (‘000s) price (p) (‘000s) price (p) (£‘000s)
At 1 May 2017 Nil 5,468 Nil 1,481 Nil 508 314.1 9,135 Nil 4,717
Granted Nil 2,424 Nil 248 Nil – 412.0 2,436 Nil –
Exercised Nil (1,554) Nil (538) Nil (494) 270.6 (1,234) Nil (1,011)
Lapsed Nil (324) Nil (30) Nil (14) 319.4 (586) Nil (548)
At 30 April 2018 Nil 6,014 Nil 1,161 Nil – 343.7 9,751 Nil 3,158
Exercisable at
30 April 2018 Nil 589 Nil 165 Nil – 269.0 64 Nil –
44
128
25. Share-based payment expense continued
Performance Deferred share Share matching Sharesave Long-term
share plan bonus plan plan plan incentive plan
Weighted Weighted Weighted Weighted Weighted
average average average average average
exercise Options exercise Options exercise Options exercise Options exercise Options
2017 price (p) (‘000s) price (p) (‘000s) price (p) (‘000s) price (p) (‘000s) price (p) (£‘000s)
At 1 May 2016 Nil 6,206 Nil 1,451 Nil 837 280.4 9,269 Nil 4,722
Granted Nil 1,909 Nil 463 Nil – 333.0 4,976 Nil 1,554
Exercised Nil (2,192) Nil (427) Nil (291) 269.1 (4,497) Nil (1,335)
Lapsed Nil (455) Nil (6) Nil (38) 288.8 (613) Nil (224)
At 30 April 2017 Nil 5,468 Nil 1,481 Nil 508 314.1 9,135 Nil 4,717
Exercisable at
30 April 2017 Nil 263 Nil 123 Nil 91 269.0 1,298 Nil –
The average share price of the Company during the financial year was 489.9 pence (2016/17: 409.6 pence).
The fair value of awards granted in the period relates to the PSP and DSBP schemes.
The fair value of the PSP award granted during the year, determined using the stochastic valuation model, was £8m. The significant inputs
into the model were: a share price of 478.0p for the PSP at the grant date; the exercise prices shown above; an expected volatility of the share
price of 22.51% for Executive Directors and 23.94% for all other participants; the scheme life disclosed above; a risk-free interest rate of
0.47% for Executive Directors and 0.26% for all other participants, and an expected dividend yield of nil. The volatility of share price returns
is calculated over the period of time commensurate with the remainder of the performance period immediately prior to the date of grant.
The total charge for the year relating to share-based payments recognised as personnel expenses was £9m (2016/17: £10m).
26. Cash generated from operations

2018 2017
Adjustments for:
Pre-tax integration costs and other adjusting items 47 57
Amortisation of intangible assets and acquisitions and disposals 122 70
Cash outflow for adjusting items (80) (66)
Depreciation 168 148
Profit on sale of non-current assets (1) (14)
Employment benefit net finance expense 4 5
Share-based payment expense 9 10
Finance income (2) (1)
Finance costs 72 51
Other non-cash items 2 9
Income tax expense 33 56
Change in provisions (9) (6)
Change in employee benefits (27) (19)
Cash generation before working capital movement 592 505
Changes in:
Inventories (82) (49)
Trade and other receivables (19) 10
Trade and other payables 85 163
Working capital movement (16) 124
Cash generated from continuing operations 576 629
45
27. Reconciliation of net cash flow to movement in net debt

2018 2017
£m £m
Income tax expense 33 56
Net financing costs 74 55
Amortisation 93 65
Adjusting items 76 62
Operating profit before amortisation and adjusting items 530 443
Depreciation 168 148
Adjusted EBITDA 698 591
Working capital movement (16) 124
Change in provisions (9) (6)
Change in employee benefits (27) (19)
Other 10 5
Cash generated from operations before adjusting cash items 656 695
Capital expenditure (347) (244)
Proceeds from sale of property, plant and equipment and other investments 18 18
Tax paid (82) (61)
Net interest paid (41) (45)
Free cash flow 204 363
Cash outflow for adjusting items (80) (66)
Dividends paid (157) (121)
Acquisition of subsidiary businesses, net of cash and cash equivalents (615) (71)
Other (4) –
Net cash flow (652) 105
Proceeds from issue of share capital 283 13
Borrowings acquired (204) (14)
Net movement on debt (573) 104
Foreign exchange, fair value and other non-cash movements (note 17) (15) (97)
Net debt movement – continuing operations (588) 7
Opening net debt (1,092) (1,099)
Closing net debt (1,680) (1,092)
Adjusted EBITDA, free cash flow, and net debt are non-GAAP measures not defined by IFRS. Further detail on the use of non-GAAP measures
is included in note 32.
28. Operating leases

Non-cancellable operating lease rentals are payable as follows:
2018 2017
£m £m
Less than one year 49 27
Between one and five years 111 64
More than five years 50 39
210 130
Operating lease payments represent rentals payable by the Group for various properties, machines, vehicles and office equipment.
29. Capital commitments and contingencies

At 30 April 2018, the Group had committed to incur capital expenditure of £56m (30 April 2017: £18m).
The Group is not subject to a material litigation, but has a number of contingent liabilities that arise in the ordinary course of business on behalf
of trading subsidiaries including, inter alia, intellectual property disputes and regulatory enquiries in areas such as health and safety,
environmental, and anti-trust. No losses are anticipated to arise on these contingent liabilities.
As a result of previous acquisitions, various contingent liabilities were identified and included within provisions, as required by IFRS 3 Business
Combinations. Whilst it is difficult to reasonably estimate the ultimate outcome of these claims, the Directors’ best estimate has been updated
and included in the closing provision balance at 30 April 2018.
46
130
30. Acquisitions and disposals
(a) Acquisition of Interstate Resources
On 29 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 Resources), from Merpas Co. Sàrl. (‘Merpas’), which completed on 25 August 2017.
Interstate Resources is an integrated packaging and paper producer based on the East Coast of the USA. It operates from 19 production sites
and has approximately 1,500 employees.
Interstate Resources operates across the entire packaging chain including wood procurement, paper manufacturing, design, packaging
manufacturing and customer logistics, with the majority of its customer base for its packaging products being FMCG and food customers.
The acquisition aligns with the global convergence of DS Smith’s customers’ requirements and is expected to create a higher quality, higher
margin group with more growth potential.
The acquisition was funded by the issue of a placing on 29 June 2017 of shares in the Company with proceeds net of commissions and
expenses of £280m, existing debt facilities, new debt facilities of £400m agreed by the Company on 28 June 2017, and the issue of
52,474,156 ordinary shares to the seller.
In the year ended 30 April 2018, Interstate Resources contributed combined revenue of £379m and adjusted operating profit before
amortisation and adjusting items of £62m to the Group’s results. If the acquisition had occurred on 1 May 2017, estimated revenue
and adjusted operating profit before amortisation and adjusting items for the combined group would have been £5,954m and
£557m respectively.
The following table summarises the consideration paid for the Interstate Resources business and provisional fair value of assets acquired and
liabilities assumed:
Carrying
values before Provisional
acquisition fair values
£m £m
Intangible assets 1 258
Biological assets 8 8
Property, plant and equipment 272 276
Equity accounted and other investments 16 19
Inventories 33 31
Net income tax assets 3 2
Trade and other receivables 63 61
Cash and cash equivalents 1 1
Borrowings (140) (140)
Trade and other payables (54) (42)
Provisions and employee benefits (11) (13)
Net deferred tax liabilities (37) (118)
Total identifiable net assets acquired 155 343
Redemption liability relating to non-controlling interest (152)
Goodwill 581
Total consideration 772
Satisfied by:
Cash consideration 511
Equity instruments (52,474,156 ordinary shares) 261
Total consideration transferred 772
Net cash flow arising on acquisition
Cash and cash equivalents acquired (1)
Total cash outflow 510
The fair value of the ordinary shares issued was based on the listed share price of the Company at 25 August 2017 of £4.97 per share.
A detailed exercise has been undertaken to assess the provisional fair values of assets acquired and liabilities assumed, with the use of third
party experts where appropriate. The provisional fair values of intangible assets and property, plant and equipment have been assessed by
reference to work performed by an independent valuation specialist. The intangible assets acquired as part of the acquisition relate to
customer relationships.
47
30. Acquisitions and disposals continued

(a) Acquisition of Interstate Resources continued
If new information obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date
identifies adjustments to the above amounts, or any additional provisions that existed at the acquisition date, then the acquisition accounting
will be revised.
The redemption liability relating to the non-controlling interest of £152m relates to the 20% minority stake in IMRI retained by Merpas. On
fixed dates over the next four years, Merpas can require the Group to acquire some or all of the remaining shares in IMRI on agreed terms
under a put option, and, on the fifth anniversary of Completion, the Group will (unless agreed otherwise) acquire any shares in IMRI that it
does not already own. The Group has concluded that the risks and rewards related to the put option have substantially transferred to the
Group as acquirer and, as such, a financial liability has been recognised, with no non-controlling interest recognised in the statement of
financial position. The redemption liability is held at discounted fair value, with subsequent movements taken to the income statement;
movements due to re-measurement using the multiple based formula as specified in the contract and the unwind of the discount are
recorded in adjusting items. The redemption liability is included in trade and other payables in the consolidated statement of financial
position (note 16).
Deferred tax is recognised on the temporary timing differences created by the fair value adjustments.
The trade and other receivables comprise gross contractual amounts due of £62m. At the acquisition date, it is estimated that contractual
cash flows of £1m will not be collected.
The provisional goodwill balance of £581m arising on the acquisition of Interstate Resources (which is not expected to be tax deductible)
includes anticipated synergies from integrating Interstate Resources into the Group, and the skills and technical talent of the Interstate
Resources workforce.
(b) Acquisition of EcoPack/EcoPaper
On 18 October 2017, the Group announced it had entered into an agreement to acquire EcoPack and EcoPaper, (collectively “the Business”) for
an enterprise value of c. €208 million, which completed on 6 March 2018.
The Business is a leading integrated packaging and paper group in Romania; family owned for many years. It will significantly enhance the
Group’s capacity to serve customers in this high growth region as well as supporting our wider substantial Eastern European presence. The
Business includes both high quality packaging assets, focused on the local FMCG market, as well as a new paper machine, built in 2017, that
specialises in high quality, light-weight paper, which is particularly well-suited to supporting the Group’s performance packaging solutions.
The acquisition was funded by existing cash and debt facilities and the issue of 6,492,411 ordinary shares to the seller.
In the year ended 30 April 2018, EcoPack/EcoPaper contributed combined revenue of £10m and adjusted operating profit before amortisation
and adjusting items of £3m to the Group’s results. If the acquisition had occurred on 1 May 2017, estimated revenue and adjusted operating
profit before amortisation and adjusting items for the combined group would have been £5,836m and £538m respectively.
The following table summarises the consideration paid for the EcoPack/EcoPaper business and provisional fair value of assets acquired and
liabilities assumed:
Carrying
values before Provisional
acquisition fair values
£m £m
Intangible assets – 39
Property, plant and equipment 94 94
Inventories 6 5
Net income tax liabilities – (1)
Borrowings (60) (60)
Trade and other payables (8) (8)
Net deferred tax liabilities – (6)
Total identifiable net assets acquired 44 75
Goodwill 53
Total consideration 128
Satisfied by:
Equity instruments (6,492,411 ordinary shares) 33
Total consideration transferred 128
Net cash flow arising on acquisition
Cash and cash equivalents acquired –
Total cash outflow 95
48
132
30. Acquisitions and disposals continued
(b) Acquisition of EcoPack/EcoPaper continued
The fair value of the ordinary shares issued was based on the listed share price of the Company at 6 March 2018 of £5.06 per share.
The intangible assets acquired as part of the acquisition relate to customer relationships.
Given that the acquisition was completed on 6 March, fair values for assets and liabilities acquired are provisional. If new information obtained
within one year from the acquisition date about facts and circumstances that existed at the acquisition date identifies adjustments to the
above amounts, or any additional provisions that existed at the acquisition date, then the acquisition accounting will be revised.
Deferred tax is recognised on the temporary timing differences created by the fair value adjustments.
The provisional goodwill balance of £53m arising on the acquisition of EcoPack/EcoPaper (which is not expected to be tax deductible) includes
anticipated synergies from integrating EcoPack/EcoPaper into the Group, and the skills and technical talent of the EcoPack/EcoPaper
workforce.
(c) Other 2017/18 acquisitions and disposals
In total, during the year ended 30 April 2018, cash consideration for acquisition of subsidiary businesses, net of cash and cash equivalents was
£615m, and borrowings acquired were £204m, giving a total impact on net debt from acquisitions of £819m. Apart from the acquisitions of
Interstate Resources and EcoPack/EcoPaper, the remaining acquisitions are not material to the Group individually or in aggregate.
(d) 2016/17 acquisitions and disposals
In the year ended 30 April 2017, the Group made various business acquisitions, which included 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, the acquisition of 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).
These acquisitions were not considered material to the Group individually or in aggregate and were for a total of £71m (net of cash and cash
equivalents). Borrowings acquired from these transactions were £14m.
(e) Acquisition related costs
The Group incurred acquisition related costs of £29m (2016/17: £7m) which primarily related to the acquisition of Interstate Resources as
detailed in note 30(a). In addition to the total of £29m which was included in administrative expenses within adjusting items, £5m of costs
related to the share placing with existing DS Smith equity holders has been netted against share premium.
31. Related parties

Identity of related parties
In the normal course of business the Group undertakes a wide variety of transactions between its subsidiaries and equity accounted
investments.
The key management personnel of the Company comprise the Chairman, Executive Directors and non-Executive Directors. The compensation
of key management personnel can be found in the table on page 73 of the Remuneration Committee report. Certain key management
personnel also participate in the Group’s share-based incentive programme (note 25). Included within the share-based payment expense,
and detailed in the Remuneration Committee report, is a charge of £3m (2016/17: £2m) relating to key management personnel.
Transactions with pension trustees are disclosed in note 24.
Other related party transactions
2018 2017
£m £m
Sales to equity accounted investees 3 –
Purchases from equity accounted investees 9 –
Purchases from other investees 4 –
49
32. 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.
The principal adjustments to financial information are made to exclude the effects of adjusting items and amortisation.
Total reported financial information represents the Group’s overall performance and financial position, but can contain significant unusual
or non-operational items that may obscure understanding of the key trends and position. These unusual or non-operational items include
business disposals, restructuring and optimisation project costs, acquisition-related and integration costs, and impairments. Restructuring and
optimisation items treated as adjusting items are major programmes usually spanning more than one year, with uneven impact on the profit
and loss for those years affected. Other adjusting items, such as business disposals, impairments, integration and acquisition costs, which
are by nature either highly variable and can also have a similar distorting effect. Therefore, the Directors consider that presenting non-GAAP
measures which exclude adjusting items enable comparability of the recurring core business, complementing the IFRS measures presented.
Amortisation relates primarily to customer contracts and relationships arising from business combinations. Significant costs are incurred in
maintaining, developing and increasing the value of such intangibles, costs which are charged in determining adjusted profit. Exclusion of
amortisation remedies this double count as well as providing comparability over the accounting treatment of customer contracts and
relationships arising from the acquisition of businesses and those generated internally.
The Group’s key non-GAAP measures are used both internally and externally to evaluate business performance against the Group’s KPIs and
banking and debt covenants, 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 the pre-tax effects of both amortisation and adjusting items. Adjusting items include
business disposal gains and losses, restructuring and optimisation costs, 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 adjusting items
A reconciliation between operating profit and operating profit before adjusting items is set out on the face of the consolidated income
statement.
Other similar profit measures before adjusting items are quoted, such as profit before income tax and adjusting 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 and can be derived directly from the face of the
consolidated income statement. Return on sales is used to measure the value we deliver to customers and the Group’s ability to charge for
that value.
2018 2017
£m £m
Adjusted operating profit 530 443
Revenue 5,765 4,781
Return on sales 9.2% 9.3%
Adjusted earnings per share

Adjusted earnings per share is basic earnings per share adjusted to exclude the post-tax effects of adjusting items and amortisation. Adjusted
earnings per share is a key performance measure for management long-term remuneration and is widely used by the Group’s shareholders.
A reconciliation between basic and adjusted earnings per share is provided in note 8.
50
134
32. Non-GAAP performance measures continued
Adjusted return on average capital employed (ROACE)
ROACE is the last 12 months’ 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, biological assets and assets/liabilities held for sale.
2018 2017
£m £m
Capital employed at 30 April 4,106 2,796
Currency, inter-month and acquisition movements (353) 182
Last 12 months’ average capital employed 3,753 2,978
Last 12 months’ adjusted operating profit 530 443
Adjusted return on average capital employed 14.1% 14.9%
Adjusted EBITDA
Earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) is adjusted operating profit excluding depreciation.
A reconciliation from adjusted operating profit to adjusted EBITDA is provided in note 27.
Net debt
Net debt is the measure by which the Group assesses its level of overall indebtedness within its financial position. A split showing the
components of net debt is provided in note 17.
Net debt/EBITDA
Net debt/EBITDA is the ratio of net debt to adjusted EBITDA, calculated in accordance with the Group’s banking covenant requirements.
Net debt/EBITDA is considered a key measure of balance sheet strength and financial stability by which the Group assesses its
financial position.
In calculating the ratio, net debt is stated at average rates as opposed to closing rates, and adjusted 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.
2018 2017
£m £m
Net debt – reported basis (see note 17) 1,680 1,092
Currency effects 7 –
Net debt – adjusted basis 1,687 1,092
Adjusted EBITDA – last 12 months’ reported basis 698 591
Acquisition effects 52 6
Adjusted EBITDA – banking covenant basis 750 597
Free cash flow

Free cash flow is the net movement on debt before cash outflow for adjusting items, dividends paid, acquisition and disposal of subsidiary
businesses (including borrowings acquired), and proceeds from issue of share capital.
A reconciliation of free cash flow is set out in note 27.
Cash conversion
Cash conversion is free cash flow, as defined above, adjusted to exclude tax, net interest, growth capital expenditure and pension payments
as a percentage of adjusted operating profit and can be derived directly from note 27, other than growth capital expenditure, which is capital
expenditure necessary for the development or expansion of the business as follows:
2018 2017
£m £m
Growth capital expenditure 175 103
Non-growth capital expenditure 172 141
Total capital expenditure 347 244
Free cash flow (note 27) 204 363
Tax paid (note 27) 82 61
Net interest paid (note 27) 41 45
Growth capital expenditure 175 103
Pension payments (note 27) 27 19
529 591
Adjusted operating profit 530 443
Cash conversion 100% 133%
51
32. Non-GAAP performance measures continued

Average working capital to sales
Average working capital to sales 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, excluding capital and acquisition related debtors
and creditors.
2018 2017
£m £m
Inventories 543 406
Trade and other payables (1,719) (1,372)
Inter-month movements and exclusion of capital and acquisition related items 308 239
Last 12 months’ average working capital 2 42
Last 12 months’ revenue 5,765 4,781
Average working capital to sales 0.0% 0.9%
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
period revenue and adjusted operating profit as if they had been generated at the current year exchange rates. The table below shows
the calculation:
Comparative
year ended
30 April 2017
Adjusted
operating
Revenue profit
£m £m
Reported basis 4,781 443
Currency effects 143 13
Constant currency basis 4,924 456
33. DS Smith Group companies

The Group’s ultimate parent Company is DS Smith Plc.
Group companies are grouped by the countries in which they are incorporated or registered. Unless otherwise noted, the undertakings below
are wholly owned and consolidated by DS Smith and the share capital held comprises ordinary or common shares which are held by Group
subsidiaries. Principal companies are identified in orange.
Fully owned subsidiaries Notes Notes Notes
Argentina Chile Egypt
Total Marketing Support Argentina SA 2 Total Marketing Support Chile SpA 15 TMS Egypt LLC 28
Australia China Estonia
Total Marketing Support Pacific Pty Ltd 3 DS Smith Shanghai Trading Ltd 16 DS Smith Packaging Estonia AS 29
Austria TMS Shanghai Trading Ltd 17 Finland
DS Smith Austria Holdings GmbH 4 Colombia DS Smith Packaging Baltic Holding Oy 30
DS Smith Packaging Austria 4 Total Marketing Support Colombia S A S 18 DS Smith Packaging Finland Oy 30
Beteiligungsverwaltungs GmbH Croatia DS Smith Packaging Pakkausjaloste Oy 30
DS Smith Packaging Austria GmbH 5 Bilokalnik-IPA d.d. G, 20 Eastpac Oy 30
DS Smith Packaging South East GmbH 4 DS Smith Belišće Croatia d.o.o. 19 France
Belgium DS Smith Plastics Karlovac d.o.o. 21 DPF Groupe 31
DS Smith Packaging Belgium N.V. 7 DS Smith Unijapapir Croatia d.o.o. 22 DS Smith Ducaplast 51
DS Smith Packaging Marketing N.V. 8 Duropack Karton d.o.o. 23 DS Smith France 33
DS Smith Plastics Bilzen N.V. 6 Czech Republic DS Smith Hêtre Blanc 32
Bosnia & Herzegovina DS Smith Packaging Czech Republic s.r.o. 25 DS Smith Packaging Anjou 32
DS Smith Packaging BH d.o.o. Sarajevo 9 DS Smith Triss s.r.o. 26 DS Smith Packaging Atlantique 32
DS Smith Recycling Bosnia d.o.o. 10 Denmark DS Smith Packaging Auneuil 32
Brazil DS Smith Display Emballageform ApS 27 DS Smith Packaging Bretagne 54
Total Marketing Support Brazil Ltda 11 DS Smith Display Holding ApS 27 DS Smith Packaging C.E.R.A. 38
Bulgaria DS Smith Display Hvidovre A/S 27 DS Smith Packaging Consumer 32
DS Smith Bulgaria S.A. 12 DS Smith Display Tastrup ApS 27 DS Smith Packaging Contoire-Hamel 41
Rapak EAD 13 DS Smith DM Plast ApS 27 DS Smith Packaging Display and Services 32
Canada DS Smith Packaging Denmark A/S 27 DS Smith Packaging DPF 31
TMS Canada 360 Inc. 14 DS Smith Vejle Print A/S 27 DS Smith Packaging Fegersheim 36
52
136
33. DS Smith Group companies continued
Fully owned subsidiaries continued Notes Notes Notes
France continued DS Smith Packaging Ireland Limited 77 Portugal
DS Smith Packaging France 32 Italy DS Smith Displays FFTM, Unipessoal Lda. 104
DS Smith Packaging Kaypac 55 DS Smith Holding Italia SpA 80 DS Smith Displays Opcao Actual, S.A. 102
DS Smith Packaging Larousse 44 DS Smith Packaging Italia SpA 80 DS Smith Displays P&I, S.A. 102
DS Smith Packaging Mehun – CIM 43 DS Smith Paper Italia Srl. 80 DS Smith Packaging Portugal, S.A. 103
DS Smith Packaging Nord-Est 33 DS Smith Recycling Italia Srl 79 Tecnicartón Portugal Unipessoal Lda 101
DS Smith Packaging Normandie 45 Toscana Ondulati SpA D, 78 Romania
DS Smith Packaging Normandie Ondulé 48 Japan DS Smith Packaging Romania S.R.L. 108
DS Smith Packaging Premium 53 Total Marketing Support Japan Ltd 81 EcoPack S.R.L. A,B, 106
DS Smith Packaging Services 35 Kazakhstan EcoPaper S.A. 107
DS Smith Packaging Sud Est 52 Total Marketing Support Kazakhstan 82 Russia
DS Smith Packaging Sud Ouest 53 Latvia David S. Smith Vostok 110
DS Smith Packaging Systems 34 SIA DS Smith Packaging Latvia 83 Total Marketing Support Moscow 109
DS Smith Packaging Tout Embal 49 Lithuania Serbia
DS Smith Packaging Velin 50 UAB DS Smith Packaging Lithuania 84 DS Smith Inos Papir Servis d.o.o. 111
DS Smith Packaging Vervins 32 Luxembourg DS Smith Packaging d.o.o. Kruševac 112
DS Smith Paper Coullons 47 DS Smith (Luxembourg) S.à r.l. 85 Papir Servis DP d.o.o. 112
DS Smith Paper Kaysersberg 40 DS Smith Perch Luxembourg S.à r.l. 85 Slovakia
DS Smith Plastics France 39 DS Smith Re S.A. 85 DS Smith Packaging Slovakia s.r.o. 115
DS Smith Recycling France 37 Macedonia (the Former Yugoslav Republic of) DS Smith Slovakia s.r.o. 114
DS Smith Rivatex 42 DS Smith AD Skopje E, 86 DS Smith Turpak Obaly a.s. C, 116
Otor Lease 32 Malaysia Slovenia
Rowlandson France 33 Total Marketing Support (360) Malaysia 87 DS Smith Slovenija d.o.o. 117
Tecnicartón France 46 Sdn. Bhd. South Africa
Germany Mexico TMS 360 SA (PTY) Ltd 118
Bretschneider Verpackungen GmbH H, 57 Total Marketing Support 360 Mexico S.A de C.V 88 Spain
Delta Packaging Services GmbH 64 Morocco Bertako S.L.U. 125
DS Smith Hamburg Display GmbH 66 Tecnicartón Tánger S.a.r.l. AU 89 DS Smith Andorra S.A. 119
DS Smith Packaging Arenshausen 60 Netherlands DS Smith Business Services S.L.U. 119
Mivepa GmbH David S. Smith (Netherlands) B.V. 92 DS Smith Carton Plastico S.A. 123
DS Smith Packaging Arnstadt GmbH 56 DS Smith (Holdings) B.V. 92 DS Smith Packaging Alcala S.L.U. 121
DS Smith Packaging Beteiligungen GmbH 67 DS Smith Baars B.V. 67 DS Smith Packaging Cartogal S.A. 126
DS Smith Packaging Deutschland Stiftung 62 DS Smith de Hoop Holding B.V. 92 DS Smith Packaging Dicesa S.A. F, 120
DS Smith Packaging Deutschland Stiftung 67 DS Smith Finance B.V. 92 DS Smith Packaging Flak S.L. 122
& Co KG DS Smith Hellas Netherlands B.V. 91 DS Smith Packaging Galicia S.A. 127
DS Smith Paper Deutschland GmbH 65 DS Smith Italy B.V. 92 DS Smith Packaging Holding S.L.U. 119
DS Smith Pre-Press Services GmbH 63 DS Smith Packaging Almelo B.V. 90 DS Smith Packaging Madrid S.L. 119
DS Smith Recycling Deutschland GmbH 61 DS Smith Packaging Barneveld B.V. 93 DS Smith Packaging Penedes S.A.U. 120
DS Smith Stange B.V. & Co. KG 67 DS Smith Packaging Belita B.V. 92 DS Smith Packaging TCT S.A. 119
DS Smith Transport Services GmbH 65 DS Smith Packaging Holding B.V. 92 P&I Displays & Packaging Spain S.L. 119
DS Smith Wirth Verpackungen GmbH 59 DS Smith Packaging International B.V. 92 Tecnicartón, S.L. 124
Rapak GmbH 58 DS Smith Packaging Netherlands B.V. 91 Sweden
Gibraltar DS Smith Recycling Benelux B.V. 91 DS Smith Packaging Sweden AB 128
DS Smith Finco (IRE) Limited 68 DS Smith Recycling Holding B.V. 91 DS Smith Packaging Sweden Holding AB 128
Greece DS Smith Salm B.V. 92 Switzerland
DS Smith Cretan Hellas S.A. 70 DS Smith Tilburg C.V. 95 DS Smith Packaging Switzerland AG 129
DS Smith Hellas S.A. 69 DS Smith Toppositie B.V. 92 Thailand
Hong Kong New Zealand DS Smith Rapak (Thailand) Limited 130
The Less Packaging Company (Asia) Limited 71 Rapak Asia Pacific Limited 96 Turkey
Hungary Nigeria DS Smith Ambalaj A.Ş. 131
DS Smith Omikron Kft. 73 Total Marketing Support 360 Nigeria Limited 97 Total Marketing Support Turkey Baskı 132
DS Smith Packaging Füzesabony Kft. 72 Pakistan Yönetimi Hizmetleri A.Ş.
DS Smith Packaging Hungary Kft. 73 TMS Pakistan (Private) Limited 98 Ukraine
India Philippines Total Marketing Support Ukraine 133
DS Smith Products & Services India 74 Total Marketing Support Philippines 99 United Arab Emirates
Private Limited Poland Total Marketing Support Middle East DMCC 135
The Less Packaging Company (India) 76 DS Smith Packaging sp. z o.o. 100
Private Limited
DS Smith Polska sp. z o.o. 100
Total Marketing Support India Private Limited 75
Ireland
David S. Smith (Ireland) Unlimited Company 77
53

Fully owned subsidiaries continued Notes Notes
UK St. Regis Packaging (Scotland) Limited 136 Associate entities
A. A. Griggs and Company Limited 1 St. Regis Paper Company Limited 1 Cyprus
Abbey Corrugated Limited 1 The Brand Compliance Company Limited 1 Aerozone Limited I, 24
Ashton Corrugated 1 The Less Packaging Company Limited 1 Netherlands
Ashton Corrugated (Southern) Limited 1 The Wansbrough Paper Company Limited 1 Industriewater Eerbeek B.V. M, 94
Avonbank Paper Disposal Limited 1 TheBannerPeople.Com Limited 1 Stort Doonweg B.V. I, 94
Biber Paper Converting Limited 1 Tillotsons Corrugated Cases Limited 1 Portugal
Calara Holding Limited 1 TMS Global UK Limited 1 Companhia Termica Do Serrado A.c.e. N, 105
Conew Limited 1 Total Marketing Support Global Limited I, 1 Serbia
Corrugated Products Limited 1 Total Marketing Support Limited 1 Papir Pet d.o.o. I, 113
Creo Property Limited 1 Treforest Mill plc 1 Ukraine
Creo Retail Marketing Holdings Limited 1 TRM Packaging Limited 1 Rubizhanskiy Kartonno-Tarniy Kombinat J, 134
Creo Retail Marketing Limited 1 United Shopper Marketing Limited 1 USA
D.W. Plastics (UK) Limited 1 W. Rowlandson & Company Limited 1 AL GAR The Display Connection, Inc. K, 137
David S Smith (Pension Contributions) Limited 1 Waddington & Duval Limited 1 Philcorr LLC L, 152
David S. Smith Nominees Limited 1 USA PhilCorr Vineland LLC L, 152
DS Smith (UK) Limited 1 Carolina Graphic Services LLC 138
DS Smith Business Services Limited 1 Cedarpak LLC 139 Ownership interest at 30 April 2018
DS Smith Corrugated Packaging Limited 1 CEMT Holdings Group LLC 140 A Directly held by DS Smith Plc
DS Smith Display Holding Limited 1 Corrugated Supply GP LLC 140 B 99.285% ownership interest
DS Smith Dormant Eight Limited 1 Corrugated Supply LP 140 C 98.89% ownership interest
DS Smith Dormant Five Limited 1 David S. Smith (America), Inc. 156 D 92% ownership interest
DS Smith Euro Finance Limited 1 David S. Smith (Holdings) America, Inc. 141 E 81.39% ownership interest
DS Smith Finco Limited A, 1 DS Smith Extrusion USA LLC 157 F 80% ownership interest
DS Smith Haddox Limited 1 DS Smith Holdings, Inc. 158 G 69.788% ownership interest
DS Smith Holdings Limited A, 1 DS Smith Management Resources, Inc. 139 H 51% ownership interest
DS Smith International Limited 1 DS Smith USA Corporation 155 I 50% ownership interest
DS Smith Italy Limited 1 DSS Rapak, Inc. 141 J 49.6% ownership interest
DS Smith Logistics Limited 1 Evergreen Community Power LLC 142 K 48% ownership interest
DS Smith Packaging Limited 1 Interstate CorrPack LLC 143 L 40% ownership interest
DS Smith Paper Limited 1 Interstate Container Brunswick LLC 144 M 37.5% ownership interest
DS Smith Pension Trustees Limited 1 Interstate Container Columbia LLC 145 N 30% ownership interest
DS Smith Perch Limited 1 Interstate Container Lowell LLC 146
DS Smith Plastics Limited 1 Interstate Mechanical Packaging LLC 145
DS Smith Recycling UK Limited 1 Interstate Container New Castle LLC 147
DS Smith Roma Limited 1 Interstate Container Reading LLC 148
DS Smith Romania Limited 1 Interstate Container Westminster LLC 149
DS Smith Saver Plus Trustees Limited 1 Interstate Holding, Inc. 139
DS Smith Sudbrook Limited 1 Interstate Paper LLC 150
DS Smith Supplementary Life Cover 1 Interstate Realty Hialeah LLC 139
Scheme Limited Interstate Resources, Inc. 139
DS Smith Ukraine Limited 1 Interstate Southern Packaging LLC 151
DSS Eastern Europe Limited 1 Newport Timber LLC 150
DSS Poznan Limited 1 Phoenix Technology Holdings USA, Inc. 139
DSSH No. 1 Limited 1 Rapak, LLC 141
First4Boxes Limited 1 RB Lumber Company LLC 150
Grovehurst Energy Limited 1 RFC Container LLC 140
JDS Holding 1 SouthCorr LLC 153
Miljoint Limited 1 St. George Timberland Holdings, Inc. 150
Multigraphics Holdings Limited 1 The Less Packaging Company, Inc. 154
Multigraphics Limited 1 TMS America LLC 141
Multigraphics Services Limited 1 United Corrstack LLC 142
Pavidda Paper Limited 1
Priory Packaging Limited 1
rapak psi Limited 1
Reed & Smith Limited 1
SRP New Thames Limited 1
St. Regis Holdings plc 1
St. Regis International Limited 1
St. Regis Kemsley Limited 1
54
138
Registered offices
1. 350 Euston Road, London, NW1 3AX, UK 57. Bretschneiderstr. 5, D-08309 Eibenstock, Germany
2. Avenida Eduardo Madero 1020, 5th floor, Office “B”, The City of Buenos 58. Dortmunder Strasse 6, 67823, Schwetzingen, Germany
Aires, Argentina 59. Ersteiner Strasse 7-9, D79346 Endingen am Kaiserstuhl, Germany
3. Foster Raffan, Level 6, 8 West Street, North Sydney NSW 2060, Australia 60. Hauptstrasse 80, 37318 Arenshausen, Germany
4. Friedrichstraße 10, 1010, Wien, Austria 61. Kufsteiner Strasse 27, 83064 Raubling, Germany
5. Heidestrasse 15, 2433 Margarethen am Moos, Austria 62. Rollnerstrasse 14, D-90408 Nürnberg, Germany
6. Nijverheidsstraat 26, 3740 Bilzen, Belgium 63. Ruhrstrasse 3, 36043 Fulda, Germany
7. New Orleansstraat 100, 9000 Gent, Belgium 64. Siemensstrasse 8, 50259 Pulheim, Germany
8. Leonardo da Vincilaan 2, Corporate Village - Gebouw Gent 1831 Machelen- 65. Weichertstrasse 7, D-63741 Aschaffenburg, Germany
Diegem, Belgium 66. Wilhelm-Bergner, Str.11 e, 21509 Glinde, Germany
9. Igmanska bb, Sarajevo, Vogošća, Bosnia and Herzegovina 67. Zum Fliegerhorst 1312 – 1318, 63526 Erlensee, Germany
10. Jovana Dučića br 25 A, Banja Luka, Bosnia and Herzegovina 68. 5-9 Main Street, Gibraltar
11. Rua das Fiandeiras 677, Vila Olimpia, Sao Paulo, Brazil 69. PO Box 1010, 57022 Sindos Industrial Area, Thessaloniki, Greece
12. Glavinitsa, 4400 Pazardzhik, Bulgaria 70. PO Box 90, GR-72200 Ierapetra, Kriti, Greece
13. 3rd Floor, 45 Industrialna Str, Shumen 9700, Bulgaria 71. Units 1607-8, 16th Floor, Citicorp Centre, 17 Whitfield Road,
14. 215-1673 Carling Avenue, Ottowa ON K2A 1C4, Canada Causeway Bay, Hong Kong
15. Santa Beatriz, 111. Of 1104. Providencia, Santiago de Chile, Chile 72. Duropack ut. 1, 3390 Füzesabony, Hungary
16. Room 05C, 3/F, No. 2 Building, Hongqiao Vanke Center, 988 Shenchang 73. Záhony u. 7, HU-1031 Budapest, Hungary
Road, Minhang district, 201107, Shanghai, China 74. 101-104 Banaji House, Flora Fountain, Fort, Mumbai – 40000, India
17. R919, 9/F, No. 1788 West Nan Jin Rd, Jing An District, Shanghai, 200040, China 75. 2/F, Elegance Tower, Jasola District Centre, Old Mathura Road, New Delhi,
18. Calle 72 , 10-07 Oficina 401, Edificio Liberty Seguros, Bogotá, Colombia 110025, India
19. Vijenac Salamona Henricha Gutmanna 30, Belišće, Croatia 76. A-5/30, Basement, Behind Oriental Bank of Commerce, Paschim Vihar, New
20. Dravska bb, Koprivnica (Grad Koprivnica), Croatia Delhi, 110063 , India
21. Kupljensko 75/b, 47220 Vojnic, Croatia 77. 25/28 North Wall Quay, Dublin 1, Ireland
22. Lastovska 5, Zagreb, Croatia 78. Capannori (Lu) Via del Fanuccio, 126 Cap, 55014 Frazione Marlia, Italy
23. Radnička cesta 22, Zagreb, Croatia 79. Strada Lanzo 237, cap 10148, Torino (TO), Italy
24. Julia House, 3 Themistocles Dervis Street, Nicosia, CY-1066, Cyprus 80. Viale Pasubio N.6, 20154 Milano, Italy
25. Teplická 109, Martiněves, 405 02 Jílové , Czech Republic 81. Oak Minami-Azabu Building 2F, 3-19-23 Minami-Azabu, Minato-ku, Tokyo,
26. Zirovnicka 3124, 10600 Praha 10, Czech Republic 106-0047, Japan
27. Åstrupvej 30, 8500 Grenaa, Denmark 82. Abay Ave. 52, 8 floor, 802-6 office “Innova Tower” BC, 050008,
28. Nile City Towers, North Tower, 22nd Floor, Cornish EINil, Cairo, 11624, Egypt Almaty, Kazakhstan
29. Pae 24, 11415 Tallinn, Estonia 83. Hospitāļu iela 23-102, Rīga LV-1013, Latvia
30. PL 426, 33101 Tampere, Finland 84. Savanoriu ave. 183, 02300 Vilnius, Lithuania
31. 350 Zone Artisanale des Trois Fontaines, 38140 Rives, France 85. 8-10 Avenue de la Gare, L-1610 Luxembourg
32. 1 Terrasse Bellini, 92800, Puteaux, France 86. Zenden Dzemail 1, Skopje 1000, Macedonia (the former Yugoslav Republic of)
33. 11 route Industrielle, F-68320, Kunheim, France 87. Unit C-12-4, Level 12, Block C, Megan Avenue II, No. 12 Jalan Yap Kwan Seng,
34. 12 rue Gay Lussac ZI Dijon Chenove, 21300, Chenove, France 50450 Kuala Lumpur, Wilayah Persekutuan, Malaysia
35. 143 Avenue Charles de Gaulle, 92521, Neuilly sur Seine Cedex, France 88. Av. Paseo de las Palmas No. 800, Int. 2501, Col. Lomas de Chapultepec III
36. 146 Route de Lyon, 67640, Fegersheim, France Sección, Delegación Miguel Hidalgo, Ciudad de México, C.P. 11000, Mexico
37. 2 Rue Vincent Van Gogh, ZAC des Bords de Marne, 93360, 89. Tanger, Zone Franche d’Exportation, ILot 11, Lot 5, Morocco
Neuilly Plaisance, France 90. Bedrijvenpark Twente 90, NL-7602 KD Almelo, Netherlands
38. 6-8 Boulevard Monge, 69330, Meyzieu, Lyon, France 91. Coldenhovenseweg 130, 6961 EH, Eerbeek, Netherlands
39. 75 Route de Lapoutroie, 68240, Kaysersberg, France 92. Harderwijkerweg 41, 6961 GH, Eerbeek, Netherlands
40. 77 Route de Lapoutroie, 68240, Kaysersberg, France 93. Hermesweg 2, 3771 ND, Barneveld, Netherlands
41. Contoire Hamel, 80500, Mondidier, France 94. Kanaalweg 8 A, 6961 LW, Eerbeek, Netherlands
42. Hotel d’Enterprise, Parc d’Activities Tournebride, 44118, 95. Wegastraat 2, 5015 BS, Tilburg, Netherlands
La Chevroliere, France 96. Building C1, The Gate, 373 Neilson Street, Onehunga, Auckland, New Zealand
43. Route de Marmagne, 18500, Mehun sur Yevre, France 97. 3, Ijora- Causeway, Ijora, Lagos, Nigeria
44. Rue de la Deviniere, B.P. 7, 45510 FR, Tigy, France 98. Office 408, Level 5, Al Memar Tower, E-11/2, Islamabad, Islamabad Capital
45. Saint Amand, 50160, Torigni sur Vire, France Territory (I.C.T.) 44000, Pakistan
46. 27 Rue du Tennis, 25110, Baume les Dames, France 99. 25/F Philam Tower, 8767 Paseo de Roxas Avenue, Makati City,
47. Usine de La Fosse, B.P. No 8, 45720, Coullons, France 1226, Philippines
48. ZAC Cabourg Village, 14390, Cabourg, France 100. Ul 17 Stycznia 45 D, 02-146 Warszawa, Poland
49. 345 Impasse de Saint-Alban Avenue de Croupillac, 30100 Ales, France 101. Águeda (Aveiro), Raso de Paredes 3754-209, Portugal
50. ZI La Plaine – Eloyes, 88214, Remiremont, France 102. Edificio Opcao Actual, Parque Industrial de Oliveirinha, 3430-414 Carregal do
Sal, Portugal
51. Zone d’entreprises de la Kruysstraete, B.P. 39, F-59470 Wormhout, France
103. Rua Mestra Cecília do Simão, n.º 378 , 3885-593 Esmoriz, Ovar, Portugal
52. Zone Industrielle du Pré de la Barre, 38440, St-Jean de Bournay, France
104. Via do Oriente, n.º 18, escritório 4, 1.º piso, Parque das Nações , 1990 514
53. Zone Industrielle de Châteaubernard, 16102, Cognac, France
Lisboa, Portugal
54. Zone Industrielle de Kevoasdoue, 29270, Carhaix, France
105. Lugar do Espido, Via Norte, Distrito: Porto Concelho: Maia Freguesia: Cidade
55. Zone Industrielle, Voiveselles Croisette, 88800, B.P. 37, Vittel, France
da Maia, 4470 177 MAIA, Portugal
56. Bierweg 11, 99310 Arnstadt, Germany
55

Registered offices continued
106. No. 46 Fagarasului Street, Ghimbav, Brasov County, Romania 132. Goztepe Merdivenkoy Mah. Bora Sk. No.1 Nida Kule Is Merkezi, Kat 7, Kadikoy,
107. No. 18, 13 Decembrie Street, Zarnesti, Brasov County, Romania Istanbul, 34732, Turkey
108. Calea Torontalului, DN6 kM. 7, Timisoara, Romania 133. 4-5 Floors, 25B,Sagaydachnogo str., Kiev, 04070, Ukraine
109. Office 405, 7 Dolgorukovskaya Street, Moscow, 127006, Russian Federation 134. 67 Mendeleev str., Rubizhne, Lugansk Region, 93006, Ukraine
110. Office 9, 35/1 Dmitria Ulianova Street, Moscow 103031, Russian Federation 135. Unit No: I5-PF-39, Detached Retail I5, Plot No: JLT-PH1-RET-I5,
111. 11000 Beograd, Milorada Jovanovića 14, Serbia Jumeirah Lakes Towers, Dubai, United Arab Emirates
112. 37000 Krusevac, Balkanska 72, Serbia 136. Muir Road, Houstoun Industrial Estate, Livingston, West Lothian,
113. 44 Bulevar Vojvode Stepe, Novi Sad, Serbia EH54 5DR, UK
114. Dolné Hony 21/435, Nitra 949 01, Slovakia 137. 131W. Commercial Avenue, Moonachie, New Jersey 07074, United States
115. Námestie baníkov 8/31, 048 01 Roznava, Slovakia 138. 4328 Federal Drive, STE 105, Greensboro, NC 27410, United States
116. Robotnícka 1, Martin, 036 80, Slovakia 139. 1300 Wilson Boulevard, Suite 1075, Arlington, VA 22209, United States
117. Cesta prvih borcev 51, 8280 Brestanica, Slovenia 140. 2066 South East Avenue, Vineland, NJ 08360, United States
118. 40 Philamere Road, Glenmore, Durban 4001, South Africa 141. 1201 Windham Parkway, Suite D, Romeoville, IL 60446, United States
119. Avd. Del Sol 13 Torrejón de Ardoz, 28850 – Madrid, Spain 142. 720 Laurel Street, Reading, PA 19602, United States
120. Carretera B.P. 2151 confluencia carretera C15, Sant Pere de Riudevitlles, 08776, 143. 903 Woods Road, Cambridge, MD 21613, United States
Barcelona, Spain 144. 501 Finnegans Lane, North Brunswick, NJ 08902, United States
121. Carretera de Daganzo Km 3,450- Poligono Industrial La Peña, Naves F1 a F8, 145. 128 Crews Drive, Columbia, SC 29210, United States
28806, Alcala de Henares (Madrid), Spain 146. 240 Industrial Avenue East, Lowell, MA 01852, United States
122. CL Sumoi 46-54 P.I., Clot de Moja, 08734 Olerdola, Barcelona, Spain 147. 792 Commerce Avenue, New Castle, PA 16101, United States
123. ctra. Madrid-Barcelona, Km. 28.300, Polig Ind, Fagober, Naves 6 y 7, 28802 148. 100 Grace Street, Reading, PA 19611, United States
Alcala de Henares, Madrid, Spain 149. 100 Simplex Drive Core 5, Westminster, MA 01473, United States
124. Parque Industrial Juan Carlos I, C/ Canal Crespo, 13 Almussafes 46440 150. 2366 Interstate Paper Road, Riceboro, GA 31323, United States
(Valencia), Spain 151. 120 T Elmer Cox Road Greeneville, TN 37743, United States
125. Polígono Industrial Areta nº 1, parcela 348, calle Altzutzate, nº 46, 31620 152. 2317 Almond Road, Route 55 Industrial Park, Vineland, NJ 08360, United States
Huarte, Navarra, Spain 153. 3021 Taylor Drive, Asheboro, NC 27203, United States
126. Polígono Industrial A Tomada, parcela 28-33, A Pobra do Caramiñal , 15949 A 154. 70 W. Madison St, Ste 5750, Chicago, Illinois, 60602, United States
Coruña, Spain 155. 9 E. Loockerman Street, Suite 311, Dover, County of Kent, DE 19901,
127. Polígono Industrial O Pousadoiro 4, Parcela 1, 36617 Vilagarcía de Arousa, United States
Pontevedra (Galicia), Spain 156. 78 2nd Avenue South Lester Prairie, MN 55354, United States
128. Box 504, 331 25 Varnamo, Sweden 157. 208 Pinnacle Drive, Ste D, Romeoville, IL 60446, United States
129. Industriestrasse 11, 4665 Oftringen, Switzerland 158. Corporation Trust Center, 1209 Orange Street, Wilmington, Newcastle,
130. 1/21 Moo5 Factory G26, TFD Industrial Estate, Tambon Tasa-arn, Amphoe DE 19801, United States
Bangpakong, Chachoengsao Province, Thailand
131. Araptepe Selimpaşa Mah. 5007. Sk. No. 4 Silivri, Istanbul, Turkey
56
140
34. Subsequent events
(a) Acquisition of Papeles y Cartones de Europa, S.A., (Europac)
On 4 June 2018, the Group announced the proposed acquisition of Papeles y Cartones de Europa, S.A. (Europac), a leading western European
integrated packaging business, for €1,667m plus acquired cash and debt of €237m.
The acquisition will be funded by a rights issue of c. £1,000m net and a new committed debt facility of €740m.
The acquisition is expected to complete in the last quarter of 2018; completion is subject to certain conditions including approval by the
Company’s shareholders and the receipt of regulatory approvals.
An initial accounting and fair value exercise will be conducted shortly after completion.
The following table summarises the financial position of Europac at 31 December 2017 and its profit for the year then ended:
Carrying values
at 31 December
2017
£m
Non-current assets 739
Current assets 222
Non-current liabilities (351)
Current liabilities (247)
Total identifiable net assets acquired 363
Results for
year ended 31
December 2017
£m
Revenue 760
Operating costs (663)
Operating profit 97
Net finance costs (8)
Profit before tax 89
Profit after tax 69
(b) Other subsequent events

On 22 May 2018, the Group announced an agreement to acquire Corrugated Container Corporation, a high-quality corrugated packaging
Company in north America. The acquisition is not material to the Group.
There are no further subsequent events after the reporting date which require disclosure.
57
Parent Company statement of financial position
At 30 April 2018
2018 2017
Note £m £m
Assets
Non-current assets
Intangible assets 3 50 37
Property, plant and equipment 4 2 1
Investments in subsidiaries 5 2,152 1,833
Deferred tax assets 50 46
Other receivables 6 2,334 1,733
Total non-current assets 4,603 3,669
Current assets
Trade and other receivables 6 897 504
Cash and cash equivalents 153 –
Total current assets 1,094 517
Total assets 5,697 4,186
Liabilities
Non-current liabilities
Borrowings 8 (1,669) (1,004)
Employee benefits 10 (6) (30)
Other payables 7 (405) (406)
Total non-current liabilities (2,115) (1,451)
Current liabilities
Borrowings 8 (318) (291)
Trade and other payables 7 (187) (659)
Income tax liabilities (3) (6)
Total current liabilities (532) (969)
Equity
Issued capital 11 107 95
Share premium account 11 1,260 728
Reserves 11 1,683 943
Shareholders’ equity 3,050 1,766
The Company made a profit for the year of £825m (2016/17: profit of £568m) including the recognition of intra-group dividends.
Approved by the Board of Directors of DS Smith Plc (company registered number 1377658) on 17 June 2018 and signed on its behalf by:
M W Roberts A R T Marsh
Director Director
The accompanying notes are an integral part of these financial statements.
58
142
Parent Company statement of changes in equity
At 30 April 2018
Share Share Hedging Own Merger relief Retained Total

capital premium reserve shares reserve earnings equity
£m £m £m £m £m £m £m
At 30 April 2016 94 716 (29) (3) – 521 1,299
Profit for the year – – – – – 568 568
Actuarial loss on employee benefits – – – – – (2) (2)
Cash flow hedge movements – – 9 – – – 9
Income tax on other comprehensive income – – (2) – – (1) (3)
Total comprehensive income – – 7 – – 565 572
Issue of share capital 1 12 – – – – 13
Employee share trust – – – (1) – (5) (6)
Share-based payment expense (net of tax) – – – – – 9 9
Dividends paid – – – – – (121) (121)
Other changes in equity in the year 1 12 – (1) – (117) (105)
At 30 April 2017 95 728 (22) (4) – 969 1,766
Profit for the year – – – – – 825 825
Actuarial gain on employee benefits – – – – – 18 18
Cash flow hedge movements – – 18 – – – 18
Income tax on other comprehensive income – – (3) – – (4) (7)
Total comprehensive income – – 15 – – 839 854
Issue of share capital 12 532 – – 32 – 576
Employee share trust – – – 3 – (7) (4)
Share-based payment expense (net of tax) – – – – – 15 15
Dividends paid – – – – – (157) (157)
Other changes in equity in the year 12 532 – 3 32 (149) 430
At 30 April 2018 107 1,260 (7) (1) 32 1,659 3,050
59
Notes to the parent Company financial statements
1. Principal accounting policies (d) Property, plant and equipment

(a) Basis of preparation Property, plant and equipment is stated at cost less accumulated
These financial statements of DS Smith Plc (the ‘Company’) have depreciation and impairment losses. Depreciation is charged to the
been prepared on the going concern basis and in accordance with income statement on a straight-line basis over the estimated useful
Financial Reporting Standard 101 Reduced Disclosure Framework lives of each item of property, plant and equipment. Estimated useful
(FRS 101) and the UK Companies Act. lives of plant and equipment are between two and 30 years, and for
leasehold improvements are over the period of the lease.
The accounts are prepared under the historical cost convention.
(e) Investments in subsidiaries
Under section 408 of the Companies Act 2006 the Company is Investments in subsidiaries are valued at cost less provisions
exempt from the requirement to present its own income statement for impairment.
or statement of comprehensive income.
(f) Deferred taxation
In these financial statements, the Company has applied the
Deferred tax is provided for using the balance sheet liability
exemptions available under FRS 101 in respect of the following
method, providing for temporary differences between the carrying
disclosures:
amounts of assets and liabilities for financial reporting purposes and
• statement of cash flows and related notes; the amounts used for taxation purposes. The amount of deferred
• a comparative period reconciliation for share capital; tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using
• disclosures in respect of transactions with wholly tax rates enacted or substantively enacted at the reporting date.
owned subsidiaries;
• comparative period reconciliations for tangible fixed assets and A deferred tax asset is recognised only to the extent that it is
intangible assets; probable that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reduced to the
• disclosures in respect of capital management; extent that it is no longer probable that the related tax benefit
• the effects of new but not yet effective IFRSs; and will be realised.
• disclosures in respect of Key Management Personnel. (g) Employee benefits
As the Group financial statements include the equivalent disclosures, (i) Defined benefit schemes
the Company has also taken advantage of the exemptions under FRS The Company is the sponsoring employer for a UK funded,
101 available in respect of the following disclosures: defined benefit scheme, the DS Smith Group Pension scheme
(the ‘Group Scheme’).
• IFRS 2 Share-based Payment in respect of Group settled
share-based payments; and The Group has in place a stated policy for allocating the net
• IFRS 13 Fair Value Measurement and the disclosures required by defined benefit cost relating to the Group Scheme to participating
IFRS 7 Financial Instruments. Group entities.
There are no new standards, amendments or interpretations that are Accordingly, both the Company’s statement of financial position and
applicable to the Company for the year ended 30 April 2018. income statement reflect the Company’s share of the net defined
benefit liability and net defined benefit cost in respect of the Group
The accounting policies set out below have, unless otherwise stated, scheme, allocated per the stated policy. Actuarial gains and losses are
been applied consistently to all periods presented in these financial recognised immediately in the statement of comprehensive income.
statements.
(b) Foreign currencies
The Company’s financial statements are presented in sterling, which
is the Company’s functional currency and presentation currency.
Monetary assets and liabilities denominated in foreign currencies
are translated into sterling at the rates of exchange at the date of
the transaction, and retranslated at the rate of exchange ruling at
the balance sheet date. Exchange differences arising on translation
are taken to the income statement.
(c) Intangible assets
Intangible assets are stated at cost less accumulated amortisation
and impairment losses. Amortisation is charged to the income
statement on a straight-line basis over the estimated useful
lives of each item, which range between three and five years.
60
144
1. Principal accounting policies continued (i) Financial instruments
(g) Employee benefits continued The Company uses derivative financial instruments, primarily interest
(ii) Share-based payment transactions rate, currency and commodity swaps, to manage interest rate,
The Company operates an equity-settled, share-based currency and commodity risks associated with the Group’s underlying
compensation plan. The fair value of the employee services received business activities and the financing of these activities. The Group
in exchange for the grant of the options is recognised as an expense. has a policy not to, and does not, undertake any speculative activity in
The fair value of the options granted is measured using a stochastic these instruments. Such derivative financial instruments are initially
model, taking into account the terms and conditions upon which the recognised at fair value on the date on which a derivative contract
options were granted. The total amount to be expensed over the is entered into and are subsequently remeasured at fair value.
vesting period is determined by reference to the fair value of the Derivatives are carried as assets when the fair value is positive
options granted, excluding the impact of any non-market vesting and as liabilities when the fair value is negative.
conditions. Non-market vesting conditions are included in Derivative financial instruments are accounted for as hedges when
assumptions about the number of options that are expected designated as hedges at the inception of the contract and when the
to become exercisable. financial instruments provide an effective hedge of the underlying
risk. Any gains or losses arising from the hedging instruments are
At each reporting date, the Company revises its estimate of the
number of options that are expected to become exercisable. It offset against the hedged items.
recognises the impact of the revision of original estimates, if any, For the purpose of hedge accounting, hedges are classified as:
in profit and loss, and a corresponding adjustment to equity. Where
applicable, the fair value of employee services received by subsidiary • fair value hedges when hedging the exposure to changes in the
undertakings within the DS Smith Plc Group in exchange for options fair value of a recognised asset or liability; and
granted by the Company is recognised as an expense in the financial • cash flow hedges when hedging exposure to variability in cash
statements of the subsidiary by means of a recharge from flows that is either attributable to a particular risk associated
the Company. with a recognised asset or liability or a highly probable
forecast transaction.
(h) Shares held by employee share trust
The cost of shares held in the employee share trust is deducted from (j) Dividend income
equity. All differences between the purchase price of the shares held Dividend income from subsidiary undertakings is recognised in the
to satisfy options granted and the proceeds received for the shares, income statement when paid.
whether on exercise or lapse, are charged to retained earnings.
2. Employee information
The average number of employees employed by the Company during the year was 260 (2016/17: 164).
2018 2017
£m £m
Wages and salaries 21 23
Social security costs 3 4
Pension costs 1 1
Total 25 28
Note 25 to the consolidated financial statements sets out the disclosure information required for the Company’s share-based payments.
3. Intangible assets
Intangible assets
Other under
Software intangibles construction Total
£m £m £m £m
Cost
At 1 May 2017 29 – 12 41
Additions – 3 19 22
Transfers 17 – (17) –
At 30 April 2018 46 3 14 63
Amortisation
At 1 May 2017 (4) – – (4)
Amortisation charge (9) – – (9)
At 30 April 2018 (13) – – (13)
Carrying amount
At 1 May 2017 25 – 12 37
At 30 April 2018 33 3 14 50
61
Notes to the parent Company financial statements continued
4. Property, plant and equipment

Leasehold Plant and
improvements equipment Total
£m £m £m
Cost
At 1 May 2017 – 3 3
Additions 2 – 2
At 30 April 2018 2 3 5
Depreciation
At 1 May 2017 – (2) (2)
Depreciation charge (1) – (1)
At 30 April 2018 (1) (2) (3)
Carrying amount
At 1 May 2017 – 1 1
At 30 April 2018 1 1 2
5. Investments in subsidiaries
Shares in Group
undertakings
£m
At 1 May 2017 1,833
Additions 319
At 30 April 2018 2,152
The Company’s principal trading subsidiary undertakings at 30 April 2018 are shown in note 33 to the consolidated financial statements.
6. Trade and other receivables

2018 2017
Non- Non-
£m £m £m £m
Amounts owed by subsidiary undertakings 2,334 892 1,733 493
Other receivables – 1 – –
Prepayments and accrued income – 4 – 11
2,334 897 1,733 504
7. Trade and other payables

2018 2017
Non- Non-
£m £m £m £m
Trade payables – 18 – 20
Amounts owed to subsidiary undertakings 405 130 406 609
Other tax and social security payables – 11 – 7
Non-trade payables, accruals and deferred income – 28 – 23
405 187 406 659
Non-current amounts owed to subsidiaries include £402m (30 April 2017: £404m), which are subject to interest at rates based on LIBOR or
EURIBOR, are unsecured, and are repayable between 2021 and 2025.
8. Borrowings
2018 2017
Non- Non-
£m £m £m £m
Bank loans and overdrafts – 160 91 276
1,669 318 1,004 291
Disclosures in respect of the Group’s borrowings are provided in note 19 to the consolidated financial statements.
62
146
9. Derivative financial instruments
The assets and liabilities of the Company at 30 April in respect of derivative financial instruments are as follows:
Assets Liabilities Net
2018 2017 2018 2017 2018 2017
£m £m £m £m £m £m
Derivatives held to:
Manage the interest rate and currency exposures on business
activities, borrowings and net investments 12 14 (35) (6) (23) 8
Derivative financial instruments included in net debt 12 14 (35) (6) (23) 8
Derivatives held to hedge future transactions
Energy costs 47 18 (24) (18) 23 –
Total derivative financial instruments 59 32 (59) (24) – 8
Current 44 13 (24) (13) 20 –
Non-current 15 19 (35) (11) (20) 8
59 32 (59) (24) – 8
Disclosures in respect of the Group’s derivative financial instruments are provided in note 20 to the consolidated financial statements.
10. Employee benefits

The Company participates in all of the Group’s UK pension schemes. The accounting valuation is consistent with the Group valuation,
as described in note 24 to the consolidated financial statements, where full disclosures relating to these schemes are given.
2018 2017
£m £m
Present value of funded obligations (1,022) (1,126)
Present value of unfunded obligations (7) (7)
Fair value of scheme assets 1,022 1,051
Total IAS 19 deficit, net (7) (82)
Allocated to other participating employers 1 52
Company’s share of IAS 19 deficit, net (6) (30)
11. Share capital and reserves

Details of the Company’s share capital are provided in note 23 to the consolidated financial statements. Movements in shareholders’ equity are
shown in the parent Company statement of changes in equity.
The closing merger relief reserve of £32m relates to the shares issued in consideration to the sellers of EcoPack/EcoPaper. Further details are
included in note 23 and note 30(b).
As at 30 April 2018, the Company had distributable reserves of £1,651m (30 April 2017: £943m).
12. Cash and cash equivalents

Included within cash and cash equivalents is £nil (30 April 2017: £nil) restricted for use by the Company.
13. Contingent liabilities

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the Group, the
Company considers these to be insurance arrangements and accounts for them as such. In this respect, the Company treats the guarantee
contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the
guarantee. At 30 April 2018, these guarantees amounted to £6m (30 April 2017: £5m).
14. Related party disclosure

The Company has identified the Directors of the Company, its key management personnel and the UK pension scheme as related parties.
Details of the relevant relationships with these related parties are disclosed in the Remuneration Committee report, and note 31 to the
consolidated financial statements respectively.
15. Auditor’s remuneration

Auditor’s remuneration in respect of the Company is detailed in note 3 to the consolidated financial statements.
63
Five-year financial summary
Unaudited
2014 2015 2016 2017 2018

Continuing operations £m £m £m £m £m
Revenue 4,035 3,820 4,066 4,781 5,765
Operating profit1 307 335 379 443 530
Amortisation (51) (46) (51) (65) (93)
Share of (loss)/profit of equity-accounted investments
before adjusting items, net of tax – – (1) 3 5
Net financing costs before adjusting items (48) (38) (47) (55) (62)
Profit before taxation and adjusting items 208 251 280 326 380
Acquisitions and disposals (46) (4) 14 (5) (29)
Other adjusting items 5 (47) (93) (57) (59)
Profit before income tax 167 200 201 264 292
Adjusted earnings per share1 21.4p 24.5p 27.4p 32.5p 35.5p

Dividends per share 10.0p 11.4p 12.8p 15.2p 14.7p
Return on sales1 7.6% 8.8% 9.3% 9.3% 9.2%

Adjusted return on average capital employed1,2,3 13.0% 14.6% 15.4% 14.9% 14.1%
1. Before amortisation and adjusting items.
2. Adjusted return on average capital employed is defined as operating profit before amortisation and adjusting items divided by average capital employed.
3. Average capital employed is the average monthly capital employed for the last 12 months. Capital employed is made up of property, plant and equipment,
goodwill and intangible assets, working capital, capital debtors/creditors, provisions, biological assets and assets/liabilities held for sale. The definition of capital
employed is different from the definition of managed capital as defined in note 20 to the consolidated financial statements, which consists of equity as
presented in the consolidated statement of financial position, plus net debt.
64
148
Shareholder information
Financial diary Registered office and advisers

4 September 2018 Annual General Meeting Secretary and Registered Office
Iain Simm
4 October 2018 Ex-dividend date for final dividend DS Smith Plc
1 November 2018 Payment of final dividend 350 Euston Road
6 December 2018* nnouncement of half-year results for
A London NW1 3AX
the six months ended 31 October 2018 Registered in England No: 1377658
4 April 2019* Ex-dividend date for interim dividend Auditor

Deloitte LLP
1 May 2019* Payment of interim dividend 2 New Street Square
13 June 2019* Announcement of full year results for the London EC4A 3BZ
year ended 30 April 2018
Solicitor
* Provisional date
Slaughter and May
One Bunhill Row
Company website London EC1Y 8YY
The Company’s website at www.dssmith.com contains the
latest information for shareholders, including press releases Principal clearing bank
and an updated financial diary. E-mail alerts of the latest news, The Royal Bank of Scotland
press releases and financial reports about DS Smith Plc may 280 Bishopsgate
be obtained by registering for the e-mail news alert service London EC2M 4RB
on the website. Stockbroker
Citigroup
Share price information
Citigroup Centre
The latest price of the Company’s ordinary shares is available
33 Canada Square
from the FT Cityline service. To access this service, telephone
Canary Wharf
+44 (0) 9058 171 690. For call charges, please check with
London E14 5LB
your provider as costs may vary. Alternatively click on
www.londonstockexchange.com. DS Smith’s ticker symbol J.P. Morgan Cazenove
is SMDS. It is recommended that you consult your financial 25 Bank Street
adviser and verify information obtained from these services London E14 5JP
before making any investment decision. Registrar
Registrar Equiniti
Please contact the Registrar at the above right address Aspect House
to advise of a change of address or for any enquiries relating Spencer Road
to dividend payments, lost share certificates or other share Lancing
registration matters. The Registrar provides on-line facilities West Sussex BN99 6DA
at www.shareview.co.uk. Once you have registered you will be Registrar’s queries
able to access information on your DS Smith Plc shareholding, Information on how to manage your shareholdings can
update your personal details and amend your dividend be found at https://help.shareview.co.uk. The pages at this
payment instructions on-line without having to call or web address provide answers to commonly asked questions
write to the Registrar. regarding shareholder registration, links to downloadable forms
Dividends and guidance notes. If your question is not answered by the
Shareholders who wish to have their dividends paid directly into information provided, you can send your enquiry via secure e-mail
a bank or building society account should contact the Registrar. from these pages. You will be asked to complete a structured form
In addition, the Registrar is now able to pay dividends in 90 and to provide your shareholder reference, name and address.
foreign currencies. This service enables the payment of your You will also need to provide your e-mail address if this is how you
dividends directly into your bank account in your home currency. would like to receive your response. In the UK you can telephone
For international payments, a charge is deducted from each 0371 384 2197. Lines are open 8.30am to 5.30pm Monday to
dividend payment to cover the costs involved. Please contact Friday. For call charges, please check with your provider as costs
the Registrar to request further information. may vary. For overseas, telephone +44 (0) 121 415 7047.
Share dealing services

The Registrar offers a real-time telephone and internet
dealing service for the UK. Further details including terms
and rates can be obtained by logging on to the website at
www.shareview.co.uk/dealing or by calling 0345 603 7037. Lines
are open between 8am and 4.30pm, UK time, Monday to Friday.
DS Smith Plc Contact us:
350 Euston Road
London Investors
NW1 3AX Results and presentations, investor and shareholder
information are available in the investors section
Telephone +44 (0) 20 7756 1800
of our website:
www.dssmith.com
www.dssmith.com/investors
Keep in touch
Annual reports
Current and archived annual reports are available in the
@dssmith investors section of our website:
www.dssmith.com/investors/annual-reports
@dssmith
People
DS Smith is made up of a team of c. 28,500 employees
@dssmith
across 37 countries. More information about our people
and career opportunities is available in the people
@dssmith section of our website:
www.dssmith.com/people
@dssmith
Sustainability
DS Smith publishes a separate sustainability report.
The report describes the environmental, social and
economic perspectives of DS Smith’s sustainability
initiatives, with additional information available on
our website:
www.dssmith.com/company/sustainability
DS Smith worldwide
Find out more about our global divisions and the
countries in which we operate and get in touch with us:
www.dssmith.com/contact/locations
Printed in the UK by Principal Colour Ltd on Revive

100% recycled offset and Revive 100% recycled silk.
Both manufactured at a mill certified to both ISO 14001
and FSC® accredited.
Principal Colour Ltd are certified to the ISO 14001
Environmental Management System and FSC®
accredited.
Designed and produced by Black Sun Plc (London)
www.blacksunplc.com +44 (0) 20 7736 0011

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Annual report & accounts 2018

£530m 9.2% 14.1% 35.5p

1. Before adjusting items and amortisation.

As a leading provider of corrugated

£5,765m £361m 24.9p 5.2%

Annual report & accounts 2018 | dssmith.com 1

Plastics We specialise in plastic packaging that is reusable and Extruded products

Over 200 manufacturing

c. 2.9 million tonnes CCM

How our revenue is spent

14 Cost of sales: £2,992m

c. 2,000 Financing: £74m

Annual report & accounts 2018 | dssmith.com 3

DCH and Northern Europe

Central Europe and Italy

2017/18 revenue employees

Global consultancy and sourcing capability

Annual report & accounts 2018 | dssmith.com 5

17 of our top 20 European customers have US operations

Every day we deliver –

Average board weight (gsm) Annual box volume growth (%)

We are creating scale within

Annual report & accounts 2018 | dssmith.com 7

Every day we deliver –

Our investments in innovation are

Annual report & accounts 2018 | dssmith.com 9

Sustainability is at the heart of what we do Sustainable forestry

Solving the coffee cup challenge

Annual report & accounts 2018 | dssmith.com 11

for DS Smith shareholders. The acquisition will be financed through

Delivering sustainable value

We are able to do so because of the scale

Total value approach

for our business and stakeholders.

Sustainability is at the heart of our business

We have long recognised the importance of the Pa

Annual report & accounts 2018 | dssmith.com 13

How would you sum up the 2018

Your corporate purpose is to “redefine Will corrugated packaging become

Watch the full year results interview:

Annual report & accounts 2018 | dssmith.com 15

Bringing solutions to challenges from

Brands • Packaging can help to differentiate brands, large and small.

Alternative materials • Innovation is required to produce paper with higher

Evolution of customer base • Packaging businesses need to be able to offer innovative

Changing demographics • Packaging needs to be more visually appealing and facilitate

Legislation • Packaging businesses will be required to take a more

Technology • Packaging businesses will be required to invest more in

The US corrugated packaging market, by way of

Source: ICAA 2017 Source: ICAA 2017

Source: CEPI Source: FBA 2017: production for

Annual report & accounts 2018 | dssmith.com 17

To be the leading supplier of

What we use What we do – supported by our values

Human capital – our people and values Insight

Manufacturing and other physical assets Paper

Manufacturing For our business

For our communities

Annual report & accounts 2018 | dssmith.com 19

1. Acquisition To double • Our acquisition growth does not support our

5. Concentration To double • Our weaker competitive position may decrease sale

6. Governance To delight our • Direct intervention due to anti-trust concerns.

10. Changes in To double • Our inability to adapt to rapid technological changes

12. Strategic To double • Unanticipated and protracted recovery due to