DS Smith closes 29 plants and targets €480 million in savings ahead of its spin-off

The European corrugated packaging landscape is undergoing a brutal but necessary recalibration. Less than two years after International Paper absorbed DS Smith in early 2025, the Memphis-based giant is preparing to release a newly consolidated, leaner European entity back into the public markets. During a Capital Markets Day in London on November 3, 2026, the future leadership of the soon-to-be independent DS Smith plc laid out a stark operational reality: achieving independence requires a €480 million structural cost reset.

Led by future CEO Tim Nicholls and CFO Vincent Bonnot, the executive team detailed the mechanics of the spin-off, which remains on track for completion between late 2026 and early 2027. The new DS Smith will amalgamate the legacy EMEA assets of both International Paper and the original DS Smith, creating a pan-European behemoth with 14 paper mills and approximately 180 converting plants across 29 countries.

An aggressive industrial consolidation

However, the footprint is shrinking before it stabilizes. The €480 million annualized run-rate savings target, expected to be fully realized by the end of 2027, is not built on marginal efficiency gains. It is rooted in a severe rationalization of capacity. Management confirmed that 29 packaging sites are either closed or in the process of closing, representing a 15% reduction in the company's physical footprint.

The human cost of this optimization is equally significant, with a 10% workforce reduction eliminating approximately 3,100 positions to date. Operationally, the company is shifting roughly 13% of its product volumes across the remaining network to maximize machine utilization and reduce overhead. This is a classic, aggressive capacity-balancing maneuver designed to protect margins in a European market where volume growth remains tepid, projected at just 1% to 2% annually over the medium term.

Financial targets and market positioning

For the 2026 financial year, the company projects an adjusted EBITDA between €730 million and €780 million, translating to a margin of 9.0% to 9.7%. The ultimate goal of the current restructuring is to drag that margin into the mid-teens. Bonnot noted that about €200 million of the targeted savings will already be secured by the end of 2026.

The separation and listing process itself carries a one-off cash cost of €120 million to €130 million. Once finalized, DS Smith plc will list on the London Stock Exchange's Main Market, with a secondary Level II ADR program in New York.

A pure-play strategy with zero M&A distractions

Nicholls made it clear that the immediate future of DS Smith will be strictly organic. The company has committed to a moratorium on mergers and acquisitions for the first 24 months post-listing. Instead, capital allocation will focus on internal upgrades and executing the transformation plan.

By stripping away peripheral activities and focusing entirely on the European corrugated sector, the new DS Smith is betting that a simplified, highly utilized asset base will generate the cash flow necessary to satisfy investors. The success of this spin-off will not be judged by the scale of its 14 mills, but by the ruthless execution of its €480 million optimization plan over the next twelve months.