Interim Management Statement

Smith (DS) PLC
05 March 2008



                                                                    5 March 2008



DS SMITH PLC INTERIM MANAGEMENT STATEMENT

DS Smith Plc, the international packaging manufacturer and office products
wholesaler, today publishes its Interim Management Statement, in respect of the
period since 1 November 2007.


DS Smith Group

Trading in the third quarter of financial year 2007/08 has been in line with
management's expectations at the time of the Group's interim results
announcement in December. The Group has maintained its significant year-on-year
progress, benefiting particularly from the recovery of higher input costs in
Paper and Corrugated Packaging and the improved performance in Office Products
Wholesaling.

Save for the effects of the acquisitions referred to below, there has been no
significant change to the financial position of the Group since the publication
of the results for the six months to 31 October 2007. The Group's balance sheet
is strong.


Paper and Corrugated Packaging

As previously reported, the rate of growth in demand for corrugated packaging in
the European market has slowed since the summer of 2007. The industry supply
and demand for recycled corrugated case material (CCM) is in reasonable balance
and the pricing environment in both CCM and corrugated boxes has remained firm.
Input costs of energy and waste paper, the principal raw material for recycled
CCM, which are at historically high levels, have recently experienced further
rises.

Our UK Paper and Corrugated Packaging segment continued to perform well while
the Continental European Corrugated Packaging segment, which is a net buyer of
CCM, has made good progress in recovering the input cost increases which have
squeezed its margins.

As announced on 1 February, DS Smith has acquired from M-real Corporation the
New Thames Paper Mill, which is located adjacent to the Group's prime UK paper
mill at Kemsley, as well as the 50% balance of Grovehurst Energy Limited, the
mills' energy and services supplier, not already owned by DS Smith. The
transaction was completed on 29 February for a consideration of £60 million in
cash. In addition, DS Smith incurred a net cash cost of £7 million from a
one-off payment, net of tax, towards the costs of the transfer of the associated
pension scheme to a third party.

The acquired facility currently produces fine uncoated paper and, using the
latest paper-making technology, DS Smith intends to invest, over the next 12
months, a further circa £37 million in the modification of the acquired facility
to enable it to produce high-quality lightweight recycled CCM with effect from
January 2009.  The total cost of the project is expected to be circa £104
million and will be funded from the Group's existing debt facilities. The
acquisition and investment will materially strengthen the long-term
competitiveness of DS Smith's important UK Paper and Corrugated Packaging
business and give the Group a significant capability in the growth segment of
high-quality lightweight CCM. The project is expected to generate good
financial returns in its first full year of operation (2009/10) and provide very
good returns for shareholders.

On 4 March 2008, the Group acquired Multigraphics Holdings Ltd from funds
managed by 3i and from the Multigraphics management team.  Multigraphics
specialises in the design and printing of retail and promotional display
material, has annual revenue of circa £11 million and employs 137 people. Its
gross assets at 29 February 2008 were £5.7 million.  DS Smith's UK corrugated
packaging business is a substantial supplier of high-quality printed display
material. This acquisition further strengthens the Group's position in this
fast-growing sector of the market.


Plastic Packaging

We continued to grow revenue well in Plastic Packaging. The higher polymer
costs have maintained the squeeze on margins; we continue to seek to mitigate
the effect of these increased input costs through raising prices and introducing
new products.  The returnable transit packaging sector has made good progress
but the liquid packaging and dispensing sector (LP&D) has been affected by
competitive pressure in Europe; in LP&D our actions to lower costs and enhance
the sales mix are continuing.


Office Products Wholesaling

Spicers' improved results have been in line with our three-year plan to restore
profits.  Revenue advanced strongly in the UK and the business has continued to
benefit from the actions taken by management. The continental European
businesses maintained their good progress, particularly as a result of further
strong growth in our development markets.


Group Outlook for financial year 2007/08

As stated at the time of our Interim Results in December, the Board remains
confident that the Group will make substantial progress this year.

The Group plans to announce its preliminary results for the financial year to 30
April 2008 on 26 June 2008.




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 7140
Andrew Dowler





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