Core Viewpoint - Sonoco Products Company (NYSE: SON) provides a range of highly engineered and sustainable packaging products for consumer and industrial companies across 40 countries, but its performance has not been particularly commendable [1] Group 1 - Sonoco operates in the packaging industry, focusing on engineered and sustainable products [1] - The company serves both consumer and industrial sectors, indicating a diverse customer base [1] - Sonoco's global reach spans 40 countries, highlighting its international presence [1]

Core Insights - Sonoco Products Company has transformed into a more sustainable packaging company following the acquisition of Eviosys, enhancing its sustainability footprint and global reach [1][2] Group 1: Sustainability Initiatives - The acquisition of Eviosys adds 6,300 employees and 45 facilities across Europe, the Middle East, and Africa, positioning Sonoco as a global leader in metal and fiber packaging [2] - Sonoco aims to reduce Scope 1 and 2 greenhouse gas emissions by 25% by 2030 from a 2020 baseline, supported by investments in renewable energy and energy efficiency [3] - In 2024, Sonoco implemented 27 sustainability projects, achieving a 9.6% reduction in energy use, surpassing its 8% goal for 2030 [4] Group 2: Emission Reductions and Achievements - Eviosys achieved a 26.3% reduction in Scope 1 and 2 emissions from its 2020 baseline in 2024 and received an EcoVadis Platinum rating for environmental performance [5] - The integration of energy-efficient technologies is expected to reduce natural gas usage by 60% and eliminate solvent emissions [5] Group 3: Product Innovations - Sonoco's packaging innovations include the Rigid Paper Container and lightweight steel aerosols, which enhance recyclability and reduce carbon emissions [6] - Eviosys' Ecopeel and Horizon products have been recognized for their sustainable design, cutting carbon emissions by 20% and enhancing recyclability [6] Group 4: Corporate Vision and Recognition - Sonoco's mission, "Better Packaging. Better Life.", drives its commitment to sustainability and innovation across its global operations [7] - The company has been recognized as one of America's Most Trustworthy and Responsible Companies by Newsweek in 2025 [8]

Financial Data and Key Metrics Changes - Net sales increased by 31% to $1.7 billion, driven by favorable pricing and the full quarter impact of the S&P EMEA acquisition [12][13] - Adjusted EBITDA rose by 38% to $338 million, with an adjusted EBITDA margin improvement of 170 basis points to 16.6% [13][19] - Adjusted earnings per share increased by 23% to $1.30, primarily due to strong productivity and favorable price-cost performance [12][13] Business Line Data and Key Metrics Changes - Consumer Packaging segment saw a remarkable 127% growth in adjusted EBITDA, attributed to the EVOSYS acquisition and strong volume mix [6][14] - Industrial Packaging segment's adjusted EBITDA improved by 6%, despite a low single-digit decline in volume [6][15] - All Other business segment reported sales of $85 million and adjusted EBITDA of $14 million, affected by the divestiture of Protective Solutions [16] Market Data and Key Metrics Changes - North American metal packaging business achieved a 10% organic volume mix improvement, with aerosols up approximately 25% [10][34] - EMEA metal packaging adjusted EBITDA increased by about 23% due to productivity savings and a favorable price-cost environment [10][14] - European market conditions were slower than expected, impacting metal packaging volumes [10][34] Company Strategy and Development Direction - The company is focused on fewer, bigger businesses, enhancing its core sustainable packaging platforms and reinvesting in higher return opportunities [11][12] - Integration of the Ebiosis acquisition is underway, with expectations of achieving $40 million in synergy savings by 2025 [9][20] - The company aims to increase long-term profitability and return capital to shareholders, reaffirming its commitment to dividend payments [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, highlighting the resilience of the consumer packaging business during economic stress [22][23] - The company anticipates continued strength in legacy businesses and expects adjusted EPS to be in the range of $6 to $6.2 for the full year [18][19] - Operating cash flow is projected between $800 million to $900 million, with free cash flow between $450 million to $550 million [19][27] Other Important Information - The company has reduced net leverage to just under four times net debt to adjusted EBITDA, using proceeds from the TFP sale to significantly reduce debt [17][18] - The company was recognized as one of America's Climate Leaders for 2025, reflecting its commitment to reducing carbon emissions [21] Q&A Session Summary Question: Can you provide more detail on volume performance by region and segment? - Management noted mid-single-digit growth globally in the consumer segment, with North America slightly up and Europe down [30][31] Question: Are there any changes in purchasing behavior or supply chain issues? - Management indicated minimal changes in purchasing behavior, with some stagnation due to a major customer's acquisition [40][41] Question: What are the opportunities in managing the global network? - The company is evaluating the best locations for production to provide cost-effective solutions across its global operations [46][47] Question: What is the outlook for the ThermoSafe business? - Management is pleased with the performance and expects to make a decision on its future by the end of the year [64] Question: What is the current status of net adjusted debt post the TFP pay down? - Management confirmed net adjusted debt is expected to be under four times by year-end, with a target of 3 to 3.3 times by the end of 2026 [68] Question: What are the expectations for OCC costs and URB price increases? - OCC costs are expected to average between $90 and $95 in the second half of the year, with URB price increases anticipated to benefit the company in the second half [70][71]

Financial Data and Key Metrics Changes - Net sales increased by 31% to $1.7 billion, driven by favorable pricing and the full quarter impact of the S&P EMEA acquisition [12][13] - Adjusted EBITDA rose by 38% to $338 million, with an adjusted EBITDA margin improvement of 170 basis points to 16.6% [13][18] - Adjusted earnings per share increased by 23% to $1.30, primarily due to strong productivity and favorable price-cost performance [12][13] Business Line Data and Key Metrics Changes - Consumer Packaging segment saw a remarkable 127% growth in adjusted EBITDA, attributed to the EVOSYS acquisition and strong volume mix [6][14] - Industrial Packaging segment experienced a 6% increase in adjusted EBITDA, despite a low single-digit decline in volume [15][18] - All Other business reported sales of $85 million and adjusted EBITDA of $14 million, affected by the divestiture of Protective Solutions [16] Market Data and Key Metrics Changes - North American metal packaging business achieved a 10% organic volume mix improvement, with strong growth in aerosols and food cans [10][36] - EMEA metal packaging adjusted EBITDA increased by approximately 23%, driven by productivity savings and a favorable price-cost environment [10][14] - Industrial sales decreased by 6% to $558 million, impacted by lower volumes and unfavorable currency translation [15] Company Strategy and Development Direction - The company is focused on fewer, bigger businesses, enhancing its core sustainable packaging platforms and reinvesting in higher return opportunities [11][12] - Integration of the Ebiosis acquisition is underway, with expectations of achieving $40 million in synergy savings by 2025 [9][20] - The company aims to increase long-term profitability and return capital to shareholders, reaffirming its commitment to dividend payments [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, highlighting the resilience of the consumer packaging business during economic stress [22][23] - The company anticipates continued strength in legacy businesses and expects adjusted EPS to be in the range of $6 to $6.20 for the full year [18][26] - Management noted that the integration of the metal packaging business is progressing well, with strong customer interest in global capabilities [56][57] Other Important Information - The company has reduced its net leverage to just under four times net debt to adjusted EBITDA, using proceeds from the TFP sale to significantly reduce debt [17][70] - Operating cash flow is projected to be between $800 million to $900 million, with free cash flow expected between $450 million to $550 million [19][26] Q&A Session Summary Question: Can you provide more detail on volume performance by region and segment? - Management indicated mid-single-digit growth globally in the consumer segment, with North America slightly up and Europe down [31][32] Question: Are there any changes in purchasing behavior or supply chain issues? - Management noted minimal changes in purchasing behavior, with some stagnation due to a major customer's acquisition [43][44] Question: What are the opportunities in managing the global network? - Management is evaluating the best locations for production across their global platform to optimize costs and market share [48][49] Question: What is the outlook for the ThermoSafe business? - Management is preparing for a resolution on the ThermoSafe situation by the end of the year, with positive performance noted [65] Question: What is the current status of net adjusted debt post the TFP pay down? - Management confirmed net adjusted debt is expected to be under four times by year-end, with a target of 3 to 3.3 times by the end of 2026 [69][70]

Financial Data and Key Metrics Changes - Net sales increased by 31% to $1.7 billion, driven by favorable pricing and the full quarter impact of the S&P EMEA acquisition [12][18] - Adjusted EBITDA rose by 38% to $338 million, with an adjusted EBITDA margin improvement of 170 basis points to 16.6% [13][18] - Adjusted earnings per share increased by 23% to $1.30, primarily due to strong productivity and favorable price-cost performance [12][18] Business Line Data and Key Metrics Changes - Consumer Packaging segment saw an 83% increase in sales, with adjusted EBITDA growing by 127% year over year [13][14] - Industrial Packaging segment sales decreased by 6% to $558 million, with adjusted EBITDA increasing by 6% to $101 million [14][15] - All Other business segment reported sales of $85 million and adjusted EBITDA of $14 million, affected by the divestiture of Protective Solutions [15] Market Data and Key Metrics Changes - North American metal packaging business achieved a 10% organic volume mix improvement, with aerosol business up approximately 25% [10][34] - EMEA metal packaging adjusted EBITDA increased by approximately 23% year over year, despite slower market conditions in Europe [10][14] - Consumer segment volumes globally increased by mid-single digits, with North America and South America showing slight growth while Europe and Southeast Asia experienced declines [31][32] Company Strategy and Development Direction - The company is focused on a fewer bigger businesses strategy, enhancing core sustainable packaging platforms and reinvesting in higher return opportunities [11][12] - Integration of the Ebiosis acquisition is underway, with expected synergy savings of approximately $40 million in 2025, targeting a total of $100 million over two years [8][20] - The company aims to increase long-term profitability and return capital to shareholders, with a strong emphasis on cash generation and debt reduction [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, highlighting the resilience of the consumer packaging business during economic stress [22][23] - The company reaffirmed its full-year guidance, expecting adjusted EPS in the range of $6 to $6.20, with anticipated headwinds from higher effective tax rates and industrial volume softness [18][19] - Management noted strong cash flow generation, projecting operating cash flow between $800 million to $900 million and free cash flow between $450 million to $550 million [19][26] Other Important Information - The company completed the sale of its thermoform and flexible packaging business for approximately $1.8 billion, significantly reducing debt and strengthening the balance sheet [6][16] - The company has reduced its net leverage to just under four times net debt to adjusted EBITDA, with a target of 3 to 3.3 times by the end of 2026 [16][70] Q&A Session Summary Question: Can you provide more details on volume performance by region and segment? - Management indicated mid-single digit growth globally in the consumer segment, with slight increases in North America and South America, while Europe and Southeast Asia saw declines [31][32] Question: Are there any changes in purchasing behavior or supply chain issues? - Management noted minimal changes in purchasing behavior, with expectations of increased pull-through from consumer customers in the near future [41][42] Question: What are the opportunities in managing the global network? - The company is evaluating the best locations for production across its global platforms to provide cost-effective solutions and gain market share [47][48] Question: What is the outlook for the ThermoSafe business? - Management is pleased with the performance and is preparing for a decision on the business by the end of the year [65] Question: What is the expected impact of the URB price increase? - Management expects the benefits of the URB price increase to be realized primarily in the second half of the year, with each $10 increase in the index representing about $6 million in annualized revenue [84]

Financial Performance - Revenue, excluding discontinued operations, increased by 31% to $1.71 billion in Q1 2025[14] - Total Adjusted EBITDA increased by 38% to $338 million, with a margin of 16.6%, up 170 bps[15, 16] - Adjusted Earnings Per Share (EPS) increased by 23% to $1.38[16] - Consumer Packaging Adjusted EBITDA increased significantly by 127%[19] - Industrial Paper Packaging Adjusted EBITDA increased by 6%[19] Strategic Actions and Outlook - The sale of TFP (likely Thermo Fisher Scientific) closed as expected for $1.8 billion, approximately 10 times TTM Adjusted EBITDA, and the $1.5 billion term loan was paid off[20] - The company reaffirms its 2025 Adjusted EBITDA guidance of $1.3 billion to $1.4 billion and Adjusted EPS guidance of $6.00 to $6.20[45] - The company is on track to achieve net leverage of 3.3x to 3.0x by the end of 2026[44] Segment Results - Consumer Packaging sales increased by 83% from $582 million in Q1 2024 to $1.066 billion in Q1 2025[30] - Industrial Paper Packaging sales decreased by 6% from $593 million in Q1 2024 to $558 million in Q1 2025[36] - All Other segment sales decreased by 36.6% from $134 million in Q1 2024 to $85 million in Q1 2025[39, 79]

Financial Performance - Sonoco reported quarterly earnings of $1.38 per share, missing the Zacks Consensus Estimate of $1.39 per share, but showing an increase from $1.12 per share a year ago, representing an earnings surprise of -0.72% [1] - The company posted revenues of $1.71 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 18.89%, compared to year-ago revenues of $1.64 billion [2] - Over the last four quarters, Sonoco has surpassed consensus EPS estimates two times, but has not been able to beat consensus revenue estimates [2] Stock Performance - Sonoco shares have lost about 4.9% since the beginning of the year, while the S&P 500 has declined by 6% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.52 on revenues of $1.94 billion, and for the current fiscal year, it is $5.94 on revenues of $7.99 billion [7] - The outlook for the Containers - Paper and Packaging industry is currently in the bottom 17% of the Zacks industries, which may materially impact Sonoco's stock performance [8]

April 29, 2025 Sonoco Reports First Quarter 2025 Results Hartsville, S.C., U.S. - Sonoco Products Company ("Sonoco" or the "Company") (NYSE: SON), a core mid-cap growth and value equity which is a global leader in high-value sustainable packaging, today reported financial results for the first quarter ended March 30, 2025. References in today's news release to consolidated "net sales," "operating profit," and "adjusted operating profit," and Consumer Packaging segment "segment operating profit" and "segment ...

Core Viewpoint - Sonoco Products Company reported strong financial results for Q1 2025, with significant growth in net sales and adjusted operating profit, despite challenges from discontinued operations and higher costs [1][6][7]. Financial Performance - Consolidated net sales reached $1.709 billion, a 31% increase from $1.309 billion in Q1 2024 [4][10]. - Operating profit rose to $127 million, up 75% from $73 million in the same period last year [4][10]. - Adjusted operating profit increased by 63% to $213 million, while adjusted EBITDA grew by 38% to $338 million [4][6]. - Net income attributable to Sonoco was $54 million, a decrease of 16% from $65 million in Q1 2024 [4][10]. Segment Performance - Consumer Packaging segment net sales surged by 83% to $1.067 billion, driven by the acquisition of Eviosys and volume growth in the U.S. [9][10]. - Industrial Paper Packaging segment net sales decreased by 6% to $558 million, impacted by volume declines and foreign currency exchange rates [15][10]. - The "All Other" segment saw a 37% decline in net sales to $85 million, primarily due to the divestiture of Protexic Solutions [12][10]. Strategic Actions - The company completed the $1.8 billion sale of its Thermoformed and Flexibles Packaging business, using approximately $1.5 billion of the after-tax proceeds to reduce debt [6][7]. - Sonoco raised its quarterly common stock dividend to $0.53, marking 100 consecutive years of dividend payments [6][7]. Guidance and Outlook - Sonoco reaffirmed its full-year 2025 guidance, projecting a 20% growth in adjusted net income and a 30% increase in adjusted EBITDA [6][18]. - The company emphasized its resilience and ability to manage risks associated with changing macroeconomic conditions, including tariffs and inflation [18][24].

Core Viewpoint - Sonoco Products Company is set to announce its first quarter 2025 results on April 29, 2025, and will host a conference call on April 30, 2025, to discuss these results [1][2]. Company Overview - Sonoco, founded in 1899, is a global leader in sustainable packaging, operating as a multi-billion-dollar enterprise with approximately 23,400 employees across 285 operations in 40 countries [4]. - The company focuses on value-added metal and fiber consumer and industrial packaging, serving well-known global brands [4]. - Sonoco is recognized for its commitment to sustainability and innovation, having been named one of America's Most Responsible Companies by Newsweek [4].