Hello, and welcome to the DS Smith AGM Trading Statement. Please note, this call is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. I will now hand you over to Miles Roberts to begin today's conference. Please go ahead, sir. Good morning, everybody, and firstly, I'd like to thank you all for joining us today. I'm Miles Roberts, the Group's Chief Executive, and I'm joined by Richard Pike, our CFO. Our statement today covers trading for the period since the first of May, 2023. I'm very pleased to say that we've started the financial year well, despite the economic environment remaining challenging. Trading has been in line with our expectations. We've continued resilient pricing and our ongoing focus on cost and operational efficiencies. On the balance sheet front, I'm pleased to say we issued our EUR 1.5 billion inaugural Green Bond in July, which has significantly extended our debt maturity profile at attractive terms. Returning to trading, in terms of box volume, like-for-like performance has been on an improving trend since the start of the financial year, with really clear signs of a reduction in customer destocking. Although volumes are still below the prior year comparative, we are seeing the improving trends continue into August. Regionally, Northern Europe remains the most challenging area, but other areas, such as Eastern Europe and North America, are performing much better. We continue to work with our customers, meeting their evolving needs, and are seeing this result in positive feedback and new contract wins, which together with a continued focus on our cost and our robust and flexible supply chain, positions us well for the remainder of full year 2024 and beyond. Thank you. Now, both of us are very happy to take any questions you may have. Thank you. As a reminder, to ask a question today, please signal by pressing star one on your telephone keypad. And our first question today comes from Charlie Muir-Sands of BNP Paribas. Please go ahead. Yeah, morning, gentlemen. Thank you for taking my questions. So to firstly, sorry, could you just repeat the geographic color you gave? Because my line crackled just as you were speaking. And then secondly, I wonder if you could just give us any updates necessary or otherwise on your likely full year interest expense now that you've issued that bond. I guess your financing needs for the year are pretty locked in. Thanks. Thank you. Well, on the first, in terms of the volumes, I said overall, we've seen kind of a good improvement in the rate of decline. Just regionally, countries like the U.K. and Germany have been lagging the group. The areas where we've seen much better growth is much better performance rather, is in Eastern Europe, and the U.S. is doing very well for us as well. Slightly to less extent, it'll be sort of Southern Europe via the Middle East, in terms of the regional split. On interest, Richard? Interest, Charlie, basically, a couple of things to say as charged. I mean, obviously, interest costs have been going up during the course of the financial year, and we've locked in the new bond at sort of higher pricing levels. So probably expect the interest cost to be close to GBP 100 million. Thank you. And for now, moving on to our next questioner, which is Lars Kjellberg from Credit Suisse. Please go ahead. Thank you. I just wanted to stay a bit with your box volume progression. Could you share with us, you know, sort of July, August trading, where you've sort of been in comparison to the balance of the year, i.e., for the next three to four months, if this volume is now moving into positive territory, the current sort of level of volume. And also, when you look, talking about resilience and pricing, it would be interesting to hear, of course, how pricing have progressed since the start of the year and through the calendar quarter, if you can share that with us, that'd be helpful. Thank you. So in terms of the volumes, we've seen a steady improvement during the year. Overall, for the group, they are still negative for the period. I'd say August showed a further good improvement on July, which improved on June. August was quite a reasonable month, but still negative. Some of the regions are positive. Some regions within Eastern Europe are positive. So the U.S. is now being positive. And going forward, obviously, it's very difficult to know what's gonna happen to the market, but, you know, what our customers are telling us and what we see coming through is a steady improvement in this... in the rate of decline, and we do expect at some point in the year to move back into growth. So it's very difficult to know exactly when that'll happen, but to date, it's going pretty much as broadly as we expected. And in terms of pricing, you know, there has been more resilience here. You know, I have to say that is our first focus is on pricing. There's, you know, there's obviously been a lot of inflation coming through. We're now seeing, you know, deflation. If you look in the first quarter compared to the first quarter of last year, and in terms of pricing, it's down a few, sort of, a few early percent in the pricing compared to the first quarter of last year. See some indexation come through after this, but it has been, it's been reasonably resilient. Thank you. Up next, we have Justin Jordan from Davy. Please go ahead. Thank you. Good morning, everyone. I've got two small questions, if I could. Firstly, can you just reassure, sorry, just on the technical guidance that you gave in June, I'm just assuming there's no change to the GBP 500 million CapEx and GBP 180 million of kind of energy on lines. And then secondly, you appear to have done a small acquisition in Serbia in August. Can you just give us a little bit more color on that, please? Yeah. Technical guidance, the same, Justin. We still expect to spend around about GBP 500 million in CapEx, and that sort of energy collateralization of mine is a fixed sum. In Serbia, we spent around GBP 20 million on a business that we acquired. It's a box plant. We think it's a good fit. It provides us with offset printing capability, which we don't have in that region, so we think it actually adds to our capability. Thank you. So you're completed? We think it'll complete sort of towards the end of the financial year. Basically, the competition processes in the surrounding areas take a few months, so probably sort of in the February, March timescale. Thank you. Thank you. We're moving on to our next questioner, which is David O'Brien from Goodbody. Please go ahead. Good morning, guys. Thanks for taking my question. Just two, please. Firstly, can you give us a sense on where you see containerboard inventory levels across Europe? I think you talked, Miles, at the full year just about, you know, your view to pricing had probably bottomed. Just wondering, could you give us a refresh what the context where inventories is? And then secondly, you've been kind enough to give us a sense of the trend in volumes as we've progressed through the period right into August. Could you talk us through maybe the major cost buckets, how they've evolved into August, and what you expect for the rest of the financial year, please? I think on the—when we look at containerboard, which on testliner, and we've seen the industry stocks be broadly, broadly stable, sort of around about 550,000 tons, something like that. Ticks up and down a bit, but it's been broadly stable. There has been quite a bit of downtime continuing in the industry. And this, together with, you know, the demand situation that I've outlined, has meant that pricing has been, has been steady on paper, really, throughout the last few months, and the outlook for September is for it to, is for it to remain steady. There is a lot of downtime there being taken. Who knows what's going to, to happen? But, it's, it, it's, it's, it's steady. It's steady at the moment. You know, demand continues to improve. Let's see. Let's see what happens to paper. It's interesting just how this ties into the, sort of the cost buckets. Generally, we are seeing pricing come down, input inflation really forward. I think that's why when we look at our profitability, yes, we've had some price erodes, but obviously, we're paying less for the paper we buy. OCC has been stable, but it has come down a bit, but obviously energy, start, distribution, all of these costs have really started to fall. Wage inflation is running at around about, say, 4% to 5%, something like that, depending on the region. Bit higher in some, bit lower in others. But we are generally seeing costs actually reducing for us, and that, aligned with our self-help and our cost base as well, is really supporting the profitability despite the reduction in paper prices. So overall, I think we're probably, yeah, we're quite sort of pleased with how our cost basis has developed and the performance of our material, the functions, et cetera, and the support that we've had from our suppliers as well, I think, yeah, pretty pleased with that. Thank you. Thank you, and we're moving on to our next question, which comes from Cole Hathorn of Jefferies. Please go ahead. Morning. Thanks for taking my question. I've got two, one on kind of promotional activity, another one on CapEx. Miles, maybe start with the promotional activity. Just wondering, are you seeing any uptick or incomings from some of your consumer staples companies to push for kind of promotional activities? I mean, I suppose the last two years, all the fast-moving consumer goods, pushing price over volume, I'm just wondering if there's kind of more of a focus on defending market share and promotional activity, and maybe if you could give some color, you know, will that support, you know, the DS Smith volumes and, you know, will it be better mixed, kind of you're thinking gondolas at the end of aisles, et cetera, that'll support the business or maybe the mix element is reading too much into it? Richard, maybe just on the CapEx program. I know in the release you called out, you know, focus on kind of procurement costs, but if we think about the CapEx spending, now that you've been in situ for a few months, you know, how are you thinking about, you know, CapEx going forward from here? You know, have you kind of reprioritized one or two projects, you know, focusing on cost out? You know, maybe if you could just give an example on some of the bigger CapEx programs, you know, some of the cost savings. I know, for example, the recovery boiler is a needed cost expense, but I think people forget that, you know, you will get an improvement in your overall cost from that mill once the project's done. Thank you. Thank you, Cole. Yeah, the promotional activity, we talk about the, about the stocking, but the other side of it is also about the reduction in promotional activity that has really been across, I think, all retailers across Europe. Exactly as you said, as the big branded companies have, because the inflation had to recover that through cost, going for that, but the promotion activity has really fallen back. And what we are hearing much more consistently is as inflation is falling, some of our big customers are gonna get back on the front foot with some new products, new launches, basically taking back share from Private Label in some regions, which has grown quite, which has grown strongly. How they get that back with new product, with pricing, with promotion, and they're talking about that, particularly after, after Christmas. Now, I should say these are words, these are discussions, and these are future plans. We are not seeing a lot of that at the moment, but there is a lot more talk, and when we look at the sort of the six months out with some of our big customers, I've been with a few, a few of them recently, they are talking about, reinvigorating that. As inflation is starting to, to modulate, they need to get their market share back, and, and obviously we see that to be a, a very nice, support to, to our, to our volumes. So that's the talk. We have to wait and see. I mean, we're not promising it, but that is definitely where they're coming from, rebuilding their market share, which some of them have absolutely fallen back on over the last sort of 18 months. On the CapEx call, I mean, the business is already doing very sensible things, so me coming in isn't sort of shifting the direction materially. But we are, as you'd probably expect, in some areas, pulling back slightly on things that are purely sort of growth focused, given the environment, and thus in prioritizing the, you know, sort of cost reduction efforts that sort of make more difference to the business sooner. So it's pretty sensible sort of prioritization activity. But in terms of some large areas of spend, certainly this year and sort of into next year as well, two of our larger projects are the, you know, the recovery boiler replacement in Viana, in Portugal, and the sort of replacement paper line in Lucca. And both those are essential replacement CapExes, but they actually give us additional efficiency and additional volume because they're newer kits, they're more modern, they operate more efficiently. And so, you know, there are improvement aspects to those, but they will actually run over 2 to 3 years, so the actual returns on those don't come through in the short term. But, you know, they're both likely to be under, you know, creative projects. And then those are larger projects on the back of the sort of new box plants that we built in Bełchatów, in Poland and Castelfranco last year, which again are sort of driving efficiency and improving growth potential. Sort of supplemented with lots and lots of smaller CapExes, new corrugators, which again improve efficiency, reduce waste and, you know, improve improvements in conversion equipment, automation, improvements in productivity. So I think you've got a sort of, as I look at it, you've got a sensible mix there, in addition to spending money on maintaining what we've got, keeping it. So if I look at our returns, if I look at our Return on Operating Assets, adding back goodwill to our Return on Capital measures, it's sort of been in the high teens-low 20% range over most of the last decade, but so I mean, I think generally we're focused on the right things, and yes, we will continue to focus on, you know, cost reduction in the short term as well as other areas and bit of a shift, but it's mainly sort of doing more of what we're already doing. So although you won't see a massive step up in this year, but in the coming years, we'll start to see those multi-year projects. Thank you. Now we're moving on to a question from Andrew Jones of UBS. Please go ahead. Hi, James. Just a few from me. I've got one on volumes. I mean, obviously, you're talking about a sequential improvement in the year-over-year number, but I mean, sequentially, I mean, are we actually really seeing any sequential pickup, or is this just mainly a reflection of the fact that volumes were generally declining as we started to go through the second half of last year? And secondly, just on some of those, you know, quantifying some of those gains from those projects, such as Recovery Boiler and so forth. I mean, in terms of the actual impact on EBITDA, you know, what's the... I mean, could you try and quantify how much we could potentially see this financial year, the next, and just, you know, just a broad sort of, you know, your pound number, if that's possible? I mean, just to, I might have missed it earlier, but in terms of the big buckets of cost changes, I mean, you were talking about, like, 4% to 5% wage inflation, et cetera. But, I mean, on energy with the hedge, you know, what's the sort of year-over-year number you're expecting there, please, if that's okay? Volumes, I mean, basically, yes, we had reductions last year, and we've still got reductions this year. What we're saying in terms of sequential improvement is the reductions this year at lower levels, so month-on-month. If you remember, the sort of the volume decline in the second half of last year was 8.5% on average. What we're saying is, during the first quarter of this year, we, we're seeing month-on-month improvement, you know, particularly in certain regions, in terms of moving into positive territory, but also reductions in declining volume territories. That's, that's what we're trying to say there. The, the guidance we're giving is similar to what you're seeing elsewhere in the market. To the return on capital, I mean, obviously, the, the returns for this year are in our full-year guidance, so that's included in consensus. What I'd probably point to is, if you look at the business over time, the period over which Miles has been here, obviously, we've grown substantially through acquisition, but also we've invested north of sort of depreciation levels over time. If you look at the actual underlying performance of the business, the relatively consistent return on operating assets during that period, and actually a growing business. So where we've been investing has been driving improved, improved performance. Obviously, we had a very strong year last year, and this year, if finally we deliver against what we're expecting, that will be our second strongest year ever in what we think is, you know, a period in which we're in a trough. So the investments we've been making are inherent in this. We've guided previously that we expect to make around about 15% return on capital from the discretionary capital. So the amount we're spending in excess of depreciation. Therefore, if we're spending GBP 75 to 200 million in excess of depreciation, you should be expecting over time to see sort of GBP 30 to 40 million of incremental benefit per annum. Over time, obviously, these things, several of these projects take years to come in, so it doesn't all come in in a year, but actually in the case of BioMarin Group, for two, three years. But we'll expand on this as we go forward to try and provide, you know, some more granular detail on that. Then on the costs, probably the best guidance I can give you is, you know, obviously we're going to be down this year on last year, and, and if we look at the quarter to date, pretty much if you take the ups and downs of, you know, paper prices and, you know, the feed through into box prices and foam prices and all the other areas of our cost, the movement year on year is down to the volume decline. So despite actually elevating levels of inflation in certain areas, we're managing that well and actually, you know, basically, we're, we're performing both, both in terms of price retention and cost management solidly in terms of, in terms of what's within our control. On specifics, we're benefiting in the first quarter from energy costs. You know, we're, we're sort of hedged in the sort of high 70% level, so therefore we do have an amount of free flow to the benefit of some of you there. But energy costs will obviously increase in the second half as we move into this current period. We guided, you know, at the start of the year, the fact that we probably expected energy costs to be a negative because we expected to be producing more paper than we did last year, and we're still expecting that. That will be second half weighted, in which again prices are energy costs. Miles mentioned starch, which is, you know, basically going for us at the moment, and, you know, it's another ma terial cost. Labor costs, you know, basically, but then we're offsetting a number of these things through productivity improvements, procurement savings, and general just tight management of costs. You know, basically, if we don't need to spend it, we're not spending it. So I think what we're trying to do is just make sure we come out the other side of this trough in as good shape as we can then. Thank you. We move to our next questioner, which is Parag Sherlekar from Barclays. Please go ahead. ... Morning. Thank you for taking my questions. I have a couple. Firstly, talking about your capital allocation, particularly the progressive dividend policy you have, how should we think about it for FY 2024, specifically considering the ongoing volume declines and the working capital unwind from last year? That's the first question. And secondly, I mean, this is just to check, did you say interest costs towards GBP 100 million? And this will be then up versus GBP 85 million you said at your full year results. And also, could you remind me the consideration for Serbian acquisition that you just mentioned? Thank you. Thank you for those. So there's a couple allocations of dividend. Obviously, we've not discussed this as a board this year, but actually we're confident in, you know, sort of the future progression of the business, and we probably anticipate keeping the dividend flat this year on last year. So despite profits coming down this year, last year, that's probably where Mark and I would expect to be, but that's subject to board discussion. So the interest costs, yes. I mean, it's sort of, you know, while significant input of our interest costs are fixed, the variable elements costs have gone up during the course of the year. And then the bond that we repriced is more expensive than obviously when we priced several years ago. Offsetting that though, the dividend, sorry, the tax charge will almost certainly be lower. We've been progressing through sort of tax audits in various areas of the world, settling out positions and actually coming out fairly well positioned. So there'll be an offset against that increased interest cost. Thank you. And we move on to our next question now, which is James Twyman of Prescient. Please go ahead. Yes, thank you very much. I've got two questions. The first one is, in terms of box prices, when do you think those would have reached, basically the trough, just in terms of reflecting the paper prices that you've seen so far, or do you think that indexing is mostly done? And secondly, are you seeing the same trends from your customers in the U.S., as in Europe, which you've mostly spoken about, so far? Thanks. So on the box prices, again, about half of our business is on index deals and half is freely negotiated. The longer the paper price stays down, then at every stage, this indexation starts to take more of the box price impacts on the box price. We do have other indices in there, which we seek to recover other inflationary costs that come through, things like labor. And then obviously on the freely negotiated, that is just, that's just, you know, an at will contract and we'll be negotiating with people. The longer the paper price stays down in itself, you will see some erosion. I think we've had—I mean, the erosion hasn't been as severe as we expected. I think that's down to a number of factors, particularly around our service, the relationships, our responsiveness, that security of supply that we, that we offer. But, you know, we, I think a lot of it just will depend on, you know, the future economic environment in which we, in which we're working. We're not at the bottom on box prices yet. That will depend on what happens to the paper price, but expect that to start to, you know, to really sort of the erosion to it, sort of, flatten out if everything stays, as it, as it is. In terms of the trends, we, you know, for our business, the different parts of the business are seeing on the volume side. It's a bit. There are some differences. In countries like Germany, I mean, the economy is quieter. The like-for-like performance in Germany has not been great. Similarly, in the UK. When we look elsewhere, if we look into the US at the moment, then actually the volumes are coming, starting to really come through quite nicely. Eastern Europe, parts of Eastern Europe are positive and doing well, as well. I'd say just the general trend when we talk to our customers, they're certainly more optimistic in the US than they are in Europe as a general. They are, some of the incentives, the outlook for the economy, whilst it's difficult, I think people are slightly more optimistic about the US than about Europe. But having said that, in Europe, you know, we are seeing, overall, we are seeing some improvements. Thank you. Thank you. Our last question for today comes from Kevin Fogarty of Numis. Please go ahead. Thank you, morning, and, thanks for taking the questions. Just two points of clarification, please, if I could. One, I think on the last update, you talked about destocking, accounting for about half the kind of volume decline you had seen. And I just wondered, what does that do you have any view as to sort of what that looked like in Q1? Appreciate, you know, you're calling out reduced customer destocking, but I just wondered sort of how much of that it may have contributed to the sort of volume decline you're currently seeing. And just secondly, apologies if I kind of didn't pick it up earlier, but in terms of the kind of box price decline you've seen year to date, did you say earlier that that was a kind of running at about a single digit year-over-year decline? Sorry, my line went funny at the time, so just to sort of pick up in terms of clarification, that'd be helpful. And if it's, I think it's very important points there. Just on our like-for-like performance, if you go back to the full year, we've said that underlying consumer demand is probably down, say, 2% to 3%, something like that, and the rest, you know, when we looked at our like-for-like volume decline, the difference between that 2% to 3% and our sort of 8% in the second half last year, we felt was destocking. And even if we look at the performance to date, if we look at our current update, then actually we're not seeing that destocking. We're seeing that destocking has really started, has really sort of, I think, pretty much finished. And if we're just now at that underlying level of consumer demand, that's where I have to say, you know, these are... You know, the markets are quite challenging, but we're now sort of at this underlying level of consumer demand. And as we take share in the market, which we have been doing, we can start to see our volumes improve from this underlying position of probably about -2 to -3, which is where the consumer, where the consumer is. So we're pleased. I think we are, if we're not at the end, we're pretty—we're getting close to the end of the destocking, as far as we can tell from what our customers are telling us, which played out pretty much as we expected. Just to be clear on the box pricing, if we look at the first quarter of last year to the first quarter of this year, our average box price is down sort of a few, early few percentage. That's just, you know, on a like-for-like basis, just on the first quarter of last year. Thank you, everybody, for your time today. I think we've had all the questions. Just to reiterate that, we're pleased with the performance to date. It's fully in line with our expectations. We've seen an improving trend on our volumes. Our pricing performance has been good, and our focus on costs has also been good against the trading advance expectations. Thank you very much, everybody, for your time today. Thank you. Thank you. That concludes today's call. Thank you for joining, ladies and gentlemen. You may now disconnect.