The Plastics division comprises the plastics operations of DS Smith, including flexible plastics, rigid plastics and foam products. Gross assets of the business as at 31 October 2018 were £223 million and profit before tax for the 12 month period to 31 October 2018 was £28 million.

Thie entreprise value represents a multiple of 9.9x EBITDA based on the past 12 months to 31 October 2018. And DS Smith expect net cash proceeds after taxation, transaction adjustments and expenses of approximately £400 million.

This sale represents an important step in DS Smith’s continued progress as a leader in sustainable packaging and accelerates the programme of deleveraging, alongside organic cashflow. The cash proceeds are expected to be used to reduce the financial gearing of DS Smith plc, in line with our medium-term target of net debt/EBITDA at or below 2.0x. The sale is expected to result in a substantial exceptional gain and be marginally EPS dilutive.

In the period since 1 November 2018, trading has continued to be strong, in line with our expectations. DS Smith continue to see good corrugated box volume growth with continued market share gains driven by the quality of its offering to large and e-commerce customers and its FMCG - weighted customer base. The Christmas period was especially busy for its e-commerce focussed customers.

Its US business continues to perform well with strong margins and returns ahead of our acquisition case. Group margins are expected to progress further in the second half of our financial year and operating cashflow generation is stronger than in the comparable period last year.

The acquisition of Europac completed on 22 January 2019. And with this company, DS Smith reinforce its position "as a leader in sustainable packaging with a clear focus on our fibre-based business".

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