IM and AGM Statement

Smith (DS) PLC
05 September 2007







                                                                5 September 2007





               DS SMITH PLC INTERIM MANAGEMENT AND AGM STATEMENT



In accordance with the UK Listing Authority's Disclosure and Transparency Rules,
DS Smith Plc, the international packaging manufacturer and office products
wholesaler, is today publishing its first Interim Management Statement, in
respect of the period from 1 May 2007 to 31 July 2007.  DS Smith will be holding
its Annual General meeting today at 12 noon.



DS Smith Group

DS Smith has continued to benefit from the better pricing environment in the
paper and corrugated packaging market and the actions taken to strengthen the
Group.  Although input costs for the Packaging businesses have risen further,
the positive trend in the Group's performance in the second half of the 2006/07
financial year has continued in the first quarter of 2007/08.  The Group's
balance sheet remains strong and there has been no significant change to the
financial position of the Group since the publication of the Report and Accounts
in respect of the year ended 30 April 2007.





Paper and Corrugated Packaging

Demand for corrugated packaging in the European market in 2007 has remained
generally good but growth has been lower than in 2006.  The German and Eastern
European markets have continued to grow strongly while the UK and French markets
have been broadly flat.  The industry supply position for recycled corrugated
case material (CCM) remains balanced and this has underpinned the firmer pricing
environment in both CCM and corrugated boxes.  No significant CCM capacity
additions are expected in western Europe in 2007 and 2008.  A number of European
CCM producers have recently announced their intentions to invest in new capacity
which is expected to come on stream from 2009 onwards; the capacity announced to
date would broadly be absorbed by current levels of market growth.  Input costs
of energy and waste paper, the principal raw material for recycled CCM, have
remained high and, as a result of continued strong demand for waste paper from
Asia, there have been further increases in its price.



Our Paper and Corrugated Packaging businesses have maintained their focus on
growing sales in the higher value-added sectors of the market, such as
retail-ready packaging, while seeking to recover the previous substantial
increases in their input costs.  They have raised box prices further through the
spring and summer of 2007.  With effect from the beginning of September 2007,
our UK Paper business is implementing another increase in CCM prices in order to
recover the recent rise in waste paper costs.  Both in the UK and on the
continent, our Corrugated Packaging businesses will be going out for further box
price increases during the coming months to recover the higher costs in the
supply chain.



In UK Paper and Corrugated Packaging, we have continued to benefit from the
improved pricing in both paper and corrugated packaging; we are also benefiting
from the extensive actions we have taken to raise efficiency.  Our Continental
European Corrugated Packaging segment is a net buyer of CCM; it has recovered a
considerable proportion, but not all, of the previous cost increases and this
shortfall has put a squeeze on its margins.  The latest rise in CCM prices will
result in further pressure on margins in our continental businesses until we are
able fully to recover the higher input costs.





Plastic Packaging

As we indicated in June, the Plastic Packaging segment has faced further
increases in the costs of polymer, both virgin and recycled.  Our efforts to
recover these higher input costs through targeted price increases have met with
limited success to date.  In liquid packaging and dispensing, results have been
affected by a combination of lower sales and competitive price pressure; the
consultation with employees about the proposed restructuring of our European
operations in this sector is continuing.  At this early stage we are aiming for
some progress in this segment over the year.





Office Products Wholesaling

The Spicers UK business has performed in line with our plan to rebuild profits.
The actions taken by the new management team have continued to enhance the sales
mix, raise service levels and reduce costs. The closure of the Park Royal
regional distribution centre (RDC) in London was concluded successfully in June
with its business being transferred to other Spicers RDCs.  The continental
European businesses have continued to perform well and have made good progress.





Group Outlook for financial year 2007/08

As stated at the time of our Preliminary Results in June, our priorities for
this financial year are to continue to drive for recovery of the high input
costs within our Packaging businesses and to raise profits at Spicers,
particularly in the UK.  The Board remains confident that the Group will make
good progress this year.



The Group's interim results for the half year to 31 October 2007 will be
released on 5 December 2007.





Enquiries


DS Smith Plc                                                       020 7932 5000
Tony Thorne, Group Chief Executive
Gavin Morris, Group Finance Director
Peter Aubusson, Group Communications Manager

Financial Dynamics                                                 020 7269 7121
Richard Mountain/Susanne Yule





A conference call for analysts and investors, hosted by Tony Thorne and Gavin
Morris, will take place today, 5 September, at 8.15 am BST.  The dial-in numbers
are:

UK participants: 020 8817 9301
International participants: [phone]
Alternative back-up number: [phone]



A recording of this conference call will be available by telephone from one hour
after the call has ended until 17.00 BST on 12/9/07.  The dial-in numbers for
this recording are:

UK callers: 020 7769 6425
International callers: [phone]
Replay security code: 1004563#



A recording of the call will also be available through the Investor Relations
section of our website: www.dssmith.uk.com from 14.00 BST today.


                      This information is provided by RNS
            The company news service from the London Stock Exchange