The U.K.-based packaging producer also reported growth in the U.S. market in its latest earnings report.
London-based DS Smith has reported 16 percent growth in revenue in the first half of its 2021-2022 fiscal year compared with the first half of its 2020-2021 fiscal year. The company has reported a positive outlook for the year with its last earnings report in April.
According to the company’s latest earnings report, it achieved about 3.36 billion pounds (about $4.4 billion) in revenue in the first half of the fiscal year compared with about 2.89 billion pounds (about $3.82 billion) in revenue in the first half of the 2020-2021 fiscal year.
In the six months ended Oct. 31, its revenue for the period grew by 22 percent on a constant currency basis. The company says this was driven by packaging volume growth and higher selling prices across the group. According to DS Smith, external paper and recycling revenues increased as higher pricing offset reduced volumes sold externally and the company used a greater proportion of its paper production internally to help meet growth needs of its packaging volumes.
During the company’s first-half 2021-2022 fiscal year earnings call Dec. 9, Adrian Marsh, group finance director at DS Smith, said the increased revenue reflects the company’s record box volume growth and higher prices across packaging, paper and recycling. “Together, these more than offset significant cost increases, with operating profit up 26 percent, including a 64 percent increase in the U.S.”
Within the first half of its fiscal year, DS Smith reports that it achieved record corrugated box volume growth of 9.4 percent compared with the same time period in its 2020-2021 fiscal year. The company says volume growth has risen 8.8 percent over the last 12 months, reflecting continued growth in the fast-moving consumer goods sector, which represents 80 percent of DS Smith’s volume. Additionally, the company says strong pricing has helped to mitigate input cost pressures as well.
DS Smith reports that its U.S. business is growing and achieved 36 million pounds (about $47.54 million) in profits for the first half of the year, which the company says is up 64 percent in adjusted operating profit growth in the first half of the 2021-2022 fiscal year compared with the first half of the 2020-2021 fiscal year. Corrugated box volume growth contributed to the strong U.S. profits, with higher box pricing offsetting input cost increases.
“We are continuing to benefit from a very dynamic market with demand for packaging for different retail solutions evolving rapidly and COP26 intensifying the desire for sustainable packaging solutions for the circular economy,” says Miles Roberts, group chief executive of DS Smith. “Our leadership in these areas has contributed to record volumes with particularly strong growth in the U.S. and Southern Europe regions, where we have invested recently, as well as with our multinational [fast-moving consumer goods] customers."
He continues, “Our supply chains have remained secure, and the significant increases in input costs have been mitigated by effective hedging of energy cost, our long-term supplier agreements and raising packaging prices. Combined with strong volume growth, this has significantly increased our profit with continuing good progress recovering from the impacts of COVID-19.”
In Northern Europe, DS Smith reports that organic corrugated box volume growth was strong for the first half of its fiscal year, with particularly good performances in the Nordics, Benelux and Germany. The company says its U.K. performance was good against strong comparatives from the 2020-2021 fiscal year. For this region, revenues increased by 20 percent compared with the same time frame in its previous fiscal year due to increases in corrugated box volumes and pricing as well as the impact from an increase in sales price for externally sold paper and recovered fiber. Adjusted operating profit grew 30 percent, reflecting the drop of packaging volume growth to operating profit, together with increased pricing in packaging, recycling and external paper sales offsetting increased input costs for old corrugated containers (OCC).
In the Southern Europe region, DS Smith reports strong growth in volumes for the first half of its 2021-2022 fiscal year that have been driven by Iberia, in particular. Revenue in the region grew by 27 percent due to the impact of higher box volumes and increases in both box and paper pricing. Adjusted operating profit grew by 28 percent in the first half of the fiscal year compared with the same period last year, with packaging operations benefiting from higher paper prices.
In Eastern Europe, DS Smith says organic corrugated box volumes have growth faster than the group average. Revenues grew 26 percent in the first half of the year for this region compared with the same time period last year, which reflects increases in corrugated box volumes and pricing. However, adjusted operating profit fell 11 percent in this region, reflecting the timing lag in the recovery of higher paper prices through increased packaging pricing.
DS Smith’s North America region reported strong increases in the first half of the fiscal year compared with the same period last year, according to the company’s earnings report. The company plans to ramp up a box plant in Indiana in its 2022-2023 fiscal year. Revenues for this region increased by 7 percent compared with the same time period last year, reflecting the packaging volume growth and the increase in export paper prices that offset reduced volumes in external paper sales. Adjusted operating profit grew by 64 percent as well.
During the company’s earnings presentation, Roberts noted that the circular economy and sustainability remained important to consumers. Increasingly, he said, consumers are concerned about the recyclability and actual recycling of packaging.
He said, “As Europe’s largest fiber recycler with extensive recycling operations across Europe with 100 percent recyclable products and our approach to a fully closed loop where we collect waste products from our customers and convert it into packaging, we’re seeing a number of customers awarding new long-term contracts on the basis of a closed loop. … We’ve just secured a significant new contract with a very large customer … where our closed-loop offering was instrumental to us securing that business."
He continued, “And, of course, in plastic replacement, the new taxation on plastics, combined with consumer awareness is seeing an acceleration in the conversion of plastic to fiber.”
In the past year, DS Smith replaced 54 million plastic products with fiber-based products. Roberts said he expects the rate of this change “to increase over the coming years.”
Roberts concludes, “We have built a business to benefit from the significant structural growth drivers within fiber-based corrugated packaging. These benefits, combined with our scale, geographic footprint, sustainability and innovation focus, position us very well for continued volume and market share growth. Together with pricing momentum, this underpins our confidence to deliver a significant improvement in profitability during the second half of this year in line with our expectations and towards our medium-term targets.”
American Battery Technology Co. receives $2 million USABC contract award to demonstrate its lithium-ion battery recycling technologies.
Reno, Nevada-based American Battery Technology Co. (ABTC) says it has received a competitively bid $2 million contract award from the United States Advanced Battery Consortium LLC (USABC), in collaboration with the U.S. Department of Energy (DOE), for the commercial demonstration of its integrated lithium-ion battery recycling system.
The system results in the production of battery cathode-grade metal products; the synthesis of high energy density active cathode material from these recycled battery metals by cathode producer and lithium-ion battery recycler BASF; and then the fabrication of large format automotive battery cells from these recycled materials and the testing of these cells against otherwise identical cells made from virgin sourced metals by Binghamton, New York-based cell technology developer C4V, according to ABTC.
The contract award, designed to cover a 75 percent share of costs, funds a 30-month project that began in October 2021. “The program’s focus is to demonstrate that battery grade metals can be manufactured from recycled materials at lower cost, lower environmental impact, and with higher domestic United States-sourced content than conventional virgin sourced metals,” states the company.
A combination of processes will be used to demonstrate the battery cells made achieve the same performance metrics as otherwise identical cells manufactured from conventional virgin sourced metals says ABTC of its first contract with USABC.
“While the domestic manufacturing capacities of electric vehicles and of lithium-ion battery cells have grown rapidly in the U.S. in recent years, unfortunately the domestic production capacities of the battery metals that supply these operations have not kept pace,” remarks project Principal Investigator and American Battery Technology Co. CEO Ryan Melsert.
“The establishment of a commercial scale domestic U.S. battery recycling industry can address these challenges and produce each of the battery metals required to supply new manufacturing operations,” he continues. “We are excited that through this demonstration ABTC will work together with such highly respected industry leaders to demonstrate a low-cost, low-environmental impact, integrated lithium-ion battery manufacturing supply chain to enable a true closed-loop domestic circular economy.”
Icahn Enterprises has sold 100 percent of its interests in PSC Metals to the California-based recycler.
Icahn Enterprises L.P. (IEP), Sunny Isles Beach, Florida, has announced that its American Entertainment Properties Corp. subsidiary has completed the sale of its equity interests in Mayfield Heights, Ohio-based PSC Metals LLC to Orange, California-based SA Recycling LLC for total cash consideration of approximately $323 million. The company reports that the deal is subject to customary postclosing adjustments.
Icahn Enterprises initially announced the deal in late October. PSC operates scrap metal processing facilities across North America in Ohio, Pennsylvania, Indiana, Illinois, Missouri, Kentucky, Georgia and Alabama.
As of Sept. 30, Icahn Enterprises carried PSC Metals on its balance sheet at a value of $147 million.
Icahn Enterprises reports that it has retained ownership of a parcel of land previously owned by PSC Metals that is located near downtown Nashville, Tennessee. In connection with the transaction, Icahn Enterprises has leased this land to SA Recycling.
“Icahn Enterprises acquired its interest in PSC Metals in 2007,” says Carl C. Icahn, chairman of Icahn Enterprises. “Even under challenging circumstances created by volatile commodity markets over the past several years, we executed our activist playbook with this investment—significantly increasing [earnings before interest, taxes, depreciation and amortization]. … We believe today’s transaction is appropriately timed and provides a very positive outcome for IEP unitholders.”
Recycling Today reached out to SA Recycling for comment on the acquisition but did not receive a response.
Jeff Bittner and Jeremy Schaller of Exit Technologies in Naples, Florida, launched a podcast to highlight innovative ideas in the ITAD industry.
Jeff Bittner, CEO of Exit Technologies in Naples, Florida, says he’s always looking for new concepts in the information technology asset and disposal (ITAD) industry. When he was approached to launch a podcast about ITAD earlier this year, he jumped at the opportunity—now he’s sharing them with an audience of 10,000 listeners.
Bittner launched ITAD Talks in August, a weekly podcast about the ITAD industry. The show features Bittner speaking with industry leaders such as Sean Magann, chief commercial officer for Sims Lifecycle Services, West Chicago, Illinois; Cal Braunstein, the research director at the Robert Frances Group, Westport, Connecticut; and Kyle Wiens, CEO of iFixit, San Luis Obispo, California.
“This is a way to have a really productive and insightful conversation that can be shared with others,” Bittner says. “We’re providing value while finding value for ourselves.”
Since August, Exit Technologies has released more than 19 episodes, broken into smaller segments. Some of the topics include the labor shortage, R2 (Responsible Recycling) certification and sustainability. However, the podcast also covers topics such as growing and expanding a company and market trends affecting the industry.
Bittner records each episode with the help of Jeremy Schaller, the marketing director for Exit Technologies.
“We wanted to give a platform to really awesome people,” Schaller says. “It doesn’t seem like there’s enough content specific to our industry that’s readily available.”
Each interview is broken into two to four segments, which are released on consecutive days. Schaller says this release schedule gives the audience an easier time navigating the information discussed on the show.
He says he hopes the podcast can increase access to ITAD information and provide a way for people to network with others in the field.
Bittner founded his ITAD company in Naples in 1994 as SMS. In 2001, the company changed its name to Exit Technologies. It has17 employees and dropbox locations in Illinois and California.
Bittner’s company specializes in refreshes for corporate America and sells computers, laptops, servers and storage devices. Exit Technologies handles equipment from Dell, HP and Cisco, with degaussers, shredders and custom-made erasure racks that the company created. It also tests memory processors on custom-made devices. The company primarily sells to data centers in North America but also does business in overseas markets.
Exit Technologies is ISO45001 certified, a standard developed by the International Organization for Standardization, and R2 certified, a standard developed by the Sustainable Electronics Recycling International (SERI). Bittner says the company is working toward its R2v3 certification I and hopes to earn it next year.
While the podcast was meant to connect industry professionals with one another and shed light on new ideas, it also has helped Bittner and Schaller identify emerging trends in the market. Recently, the most important trends discussed include the right to repair movement, the chip shortage and the disposition of electric vehicles as they become more prominent.
While the duo’s goal is to share new ideas about the ITAD industry, Bittner says he hopes the podcast helps new businesses get off the ground and establish themselves.
“When I got into this business, it was a pretty cutthroat industry,” Bittner says. “I think that mentoring others and helping each other is really important to do right now.”
Quest says the acquisitions adds incremental volume to its existing market verticals and expands its roster of international manufacturers.
Quest Resource Holding Corp., an environmental waste and recycling services provider based in The Colony, Texas, has announced the purchase of RWS Facility Services in Chadds Ford, Pennsylvania, and InStream Environmental of Greenville, South Carolina. The company says the national asset-light waste and environmental service providers will expand Quest’s presence in the commercial property space and add to industrial market customer base.
“These transactions are estimated to increase our annual revenue, net income and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by more than 50 percent, adding significant scale as well as customer diversification,” says S. Ray Hatch, the president and CEO of Quest. “With the increased scale and scope of our combined businesses, we are well-positioned to maintain strong customer relationships and provide more services for existing and prospective customers.”
According to a news release from Quest, the company agreed to acquire the membership interests of RWS for $33 million in cashand the assets of InStream for a total consideration of $11 million and an additional $1.5 million of consideration that might be earned based on future performance. The combined transaction price of about $44 million is estimated to add more than $80 million of revenue, about $2.2 million in net income and $5.5 million in adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA. The transactions are expected to be accretive on a free cash flow per share basis.
“Quest is committed to growing long-term shareholder value and to supporting our customers’ sustainability goals,” Dan Friedberg, oard chairman, says. “Our strategy is to grow by expanding services to existing customers, organically adding to our customer base and acquiring businesses like RWS and InStream, whose customers can be better served on the Quest platform. We are focused on building scale and scope to our national platform, bringing value by lowering the costs to serve, enhancing our technology capabilities and offering a broad range of sustainability solutions across services and industries.”
The company says RWS will add incremental volume to its existing market verticals and establish a more meaningful position in the commercial property management market. The acquisition also will add to Quest’s industrial market customer base. InStream brings an attractive roster of multinational manufacturers to Quest.
As part of the transactions, Quest further announced that it has amended its lending agreement with Monroe Capital, increasing its borrowing facilities up to $75 million, lowering borrowing costs by 350 basis points and providing other improved terms.