Sonoco Reports Fourth Quarter and Full Year 2025 Results

Core Viewpoint - Sonoco Products Company reported strong financial results for Q4 and the full year 2025, driven by acquisitions and improved operational efficiencies, while also undergoing significant portfolio transformation through divestitures [1][6][9]. Financial Performance - Fourth quarter net sales reached $1.77 billion, a 29.7% increase from the prior year, primarily due to acquisition activity and price increases to offset inflation [5][10]. - The company reported a GAAP net income of $332.2 million for Q4 2025, a significant recovery from a loss of $(43.0) million in Q4 2024 [6][7]. - Adjusted operating profit for Q4 was $187 million, up 47.1% year-over-year, with adjusted EBITDA of $272 million, reflecting a 10.2% increase [6][11]. Segment Results - The Consumer Packaging segment saw net sales grow by 62.1% in Q4 2025, driven by the acquisition of Titan Holdings I B.V. and price increases [12][13]. - The Industrial Paper Packaging segment's net sales remained relatively flat at $568 million, with slight improvements in operating profit and adjusted EBITDA margins [16][14]. Cash Flow and Debt Management - Operating cash flow for 2025 was $690 million, including $196 million in one-time taxes related to divestitures [9][21]. - The company reduced net debt by $2.7 billion in 2025, ending the year with a net leverage ratio of approximately 3.0x [6][21]. 2026 Guidance - For 2026, Sonoco targets adjusted diluted earnings per share of $5.80 to $6.20 and adjusted EBITDA of $1.25 billion to $1.35 billion [20][25]. - The company plans to simplify its reporting structure, focusing on two segments: Consumer Packaging and Industrial Paper Packaging [20][22]. Strategic Outlook - The company aims for a 20% improvement in adjusted earnings in 2026, supported by a profitability performance plan focused on cost savings and operational improvements [22][9]. - Sonoco's management believes that the transformation of its portfolio will enhance financial performance and drive sustainable growth [22][9].