Reflecting on our changing world

Over the past year, the world around us has changed in ways unseen by many of us before in our lifetimes. As economies open up from lockdowns and we adapt to living with Covid-19, we have continued to help our many new and existing customers navigate this period of uncertainty through security of supply, quality and innovation, while at the same time prioritising the health, safety and wellbeing of our people. We were shocked and appalled by the Russian invasion of Ukraine. Our first priority has been the safety of our colleagues, partners and wider stakeholders across the region. Although we do not have direct operations in Russia or Belarus, we worked with our suppliers to suspend our relationships in these countries. As a DS Smith community, many of our colleagues all over the world have come together in response to this humanitarian crisis, from fundraising and donation efforts to direct support of Ukrainian refugees fleeing conflict. Alongside a backdrop of inflationary cost pressures, managed through successful hedging, long-term paper supply relationships and the excellent work of our procurement team, we are continuing to navigate an uncertain macroeconomic environment whilst delivering our Purpose of Redefining Packaging for a Changing World.

Long-term energy supply

A turbulent macroeconomic environment and inflationary cost pressures have challenged every industry this year. Through robust hedging, we have been able to successfully navigate surging commodity prices and continue to grow our business whilst maintaining focus on energy efficiency improvements and lowering our greenhouse gas emissions. Humanitarian aid for Ukraine

As the events in Ukraine unfolded, we supported the relief effort and our connections to the region. Following the humanitarian crisis in Ukraine, we made an initial pledge which included a donation to the International Red Cross and allocation to support efforts of sites around the world, from local charitable or product donations or in partnership with our customers to ensure that critical aid can reach the areas it is needed most. At our Belchatow Packaging plant in Poland, our people organised aid for Ukraine at the very beginning of the conflict. They collected essential supplies and delivered them to their border with Ukraine, standing in solidarity with the people of Ukraine.

Adapting to living with Covid-19

The Covid-19 pandemic has continued to shape our lives and its impacts continue to be felt by individuals, communities, businesses and economies around the world. We have continued to prioritise the health and safety of our people, whilst meeting the needs of our customers. Throughout the global pandemic, we have continued to grow our business, building on our existing customer relationships as well as winning new customers with a focus on the resilient FMCG and e-commerce markets. The pandemic has accelerated our key growth drivers – changing retail channels, including e-commerce and demand for sustainability. In a turbulent macroeconomic environment, we have remained steadfast in our focus on sustainability and realising the potential of our people.

A changed relationship with packaging

As we adapt to living with Covid-19, we reflect on how the relationship the consumer has with packaging has changed forever. Accelerated growth in e-commerce over the past couple of years has brought more cardboard into our homes than ever before. This raises important questions for our customers: • How do you deliver more to people’s homes, without filling them with excess packaging, and without more vehicles making our cities more congested and polluted? • How do you keep supply chains operating, with agility and responsiveness, without producing more emissions? Sustainability and the circular economy have never been more important. £100 million R&D boost

At the beginning of this year, we announced a £100 million R&D and innovation package to accelerate our work on the circular economy. This new investment over five years includes the creation of a breakthrough technologies hub in the UK, new materials development to replace plastics and a pilot to gauge G-force shock in home delivery packaging. “How we live our lives is changing fast due to many factors and how we all take care of the environment is a top priority. We are now investing more than in previous years to ensure that we are leading this change and can offer packaging for a rapidly changing world.”

Miles Roberts,

Group Chief Executive

This year, we also unveiled our £750,000 state of the art laboratory for researching technologies to enhance the performance and sustainability of fibre-based packaging, including coatings and barrier technology, wet-end chemistries, surface chemistries, re-pulp-ability and recyclability.