DS Smith Chases €200M in Savings Ahead of IP Spinoff by Early 2027

International Paper confirmed Tuesday it still plans to split into two geographically focused companies by the first quarter of 2027 or sooner — and the European half, DS Smith, is chasing roughly 200 million euros in further cost savings before it stands alone.

That's the number Tim Nicholls, president of DS Smith and the widely expected CEO of the post-split company, put on the remaining opportunity. He spent much of his career as IP's CFO, so the figure carries weight. The caveat: executives wouldn't say whether the London-based spinoff will actually be sold, even though IP disclosed unsolicited bids in recent weeks.

By Marcus Bennett, Target Marketing

What does the split actually look like?

IP, headquartered in Memphis, Tennessee, acquired DS Smith in January 2025. In January 2026 it announced the breakup. Legacy North American assets from both companies stay with International Paper; legacy European assets go to the new DS Smith, which will run 14 paper mills and roughly 180 packaging sites.

The math matters for scale: 180 packaging sites across EMEA is a sprawling footprint to streamline, and that's exactly what the past 18 months have been about. The optimization has included site closures, workforce reductions and strategy revamps since the acquisition closed.

Tuesday's capital markets day hammered three themes: cutting costs, disciplined reinvestment and prioritizing customer relationships. Mid-term spending will favor organic investments such as facility upgrades over deals.

"How do we combine the best from both and create a better organization?" Nicholls said.

How deep does the transformation go?

DS Smith is relocating where about 13% of the product volumes it brings to market are produced within its network. That's a physical reshuffle of the manufacturing base, not a paper exercise.

"We are putting in place also this movement of machinery to create sites which really can welcome the right production to give the right productivity," said Stefano Rossi, CEO of packaging at DS Smith.

"We haven't simply focused on improving the business we have. We have fundamentally redesigned our business to make it stronger, simpler and more competitive," said Ana Soldo, managing director for East EMEA.

Rossi went further: "I don't think in my 40 years I've seen another company having the courage to take such an impressive transformation at once, and especially not in such a short period of time."

Bold words. But courage and results aren't the same thing, and the market backdrop is unforgiving.

What about margins and growth?

Cost inflation keeps pressuring margins, and the European market remains soft. Executives expect earnings before interest, taxes, depreciation and amortization to be lower in 2026 — a down year before the promised payoff.

The recovery case rests on 2027: financial benefits from announced price increases and a target of 1% to 2% volume growth. That's modest growth by any measure, and it assumes pricing sticks in a soft market.

Is M&A off the table?

For now, yes. Legacy DS Smith grew fast through deals — 17 acquisitions in the 10 years before IP bought it in 2025. Executives said they expect no mergers or acquisitions for at least two years after the spinoff. Growth has to come from within.

Executives stressed the transformation continues in the coming months, with Nicholls pointing to the 200 million euros in savings still ahead.

The open question is the one nobody answered on stage: whether DS Smith ever trades as an independent company at all, or whether those unsolicited bids turn the spinoff into a sale first.