Sonoco Reports Fourth Quarter and Full Year 2024 Results

In a release issued under the same headline earlier today by Sonoco Products Company, please note that the cash flow from operating activities under Full-Year 2025 Guidance should be $800 million to $900 million, not $750 million to $850 million as previously stated. The corrected release follows:

Sonoco Products Company (“Sonoco” or the “Company”), a global leader in high-value sustainable packaging, reported financial results for its fourth quarter and fiscal year ended December 31, 2024.

References in this news release to consolidated “net sales,” “operating profit,” and “adjusted operating profit,” and Consumer Packaging segment “segment operating profit” and “segment adjusted EBITDA” along with the corresponding year-over-year comparable results, do not include results of the Company’s Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”), which are being accounted for as discontinued operations.

Summary:

• Expanded global leadership in sustainable metal packaging following the completion of the acquisition of Eviosys, Europe’s leading food cans, ends and closures manufacturer, on December 4, 2024
• Entered into an agreement to sell TFP to TOPPAN Holdings, Inc. for approximately $1.8 billion
• Reported fourth quarter GAAP net loss attributable to Sonoco of $(43) million, adjusted net income attributable to Sonoco of $100 million, diluted earnings per share of $(0.44) and adjusted diluted earnings per share of $1.00
• Excluding the impact of the Eviosys acquisition, adjusted diluted earnings per share for the fourth quarter would have been $1.17, which is comparable to the Company’s previously provided guidance of $1.15 to $1.35
• Generated strong operating cash flow of $834 million and $456 million of Free Cash Flow in 2024
• Produced fourth quarter adjusted EBITDA of $247 million, up 4.6% from the corresponding prior year quarter
• Achieved strong productivity from certain procurement savings, production efficiencies, and fixed cost reduction initiatives of $41 million during the fourth quarter and $183 million for 2024
• Invested a record $378 million of capital in future growth and productivity projects during 2024
• Projecting approximately 20% growth in adjusted net income attributable to Sonoco in 2025

Fourth Quarter and Year End 2024 Consolidated Results

• Fourth quarter net sales of $1.4 billion reflect an increase of 2% compared to the corresponding prior year quarter, driven by low single digit volume gains and partial December sales attributable to Titan Holdings I B.V. (“Eviosys”) following the completion of the acquisition on December 4, 2024, partially offset by the loss of net sales from the divested Protective Solutions (“Protexic”) business, the treatment of recycling operations as a procurement function beginning January 1, 2024 and lower selling prices
• GAAP operating profit for the fourth quarter declined to $56 million due to higher acquisition-related costs and remeasurement loss on Euro denominated cash held by the Company in connection with the Eviosys acquisition; unfavorable price/cost was offset by higher productivity from procurement savings, production efficiencies and fixed cost reduction initiatives
• Effective tax rates on GAAP net income attributable to Sonoco and adjusted net income attributable to Sonoco were 36.6% and 24.8%, respectively, in Q4 2024, compared to 16.3% and 22.9%, respectively, in Q4 2023
• Fourth quarter GAAP net income attributable to Sonoco was $(43) million, resulting in GAAP EPS (diluted) of $(0.44)
• Adjusted operating profit and adjusted EBITDA for the fourth quarter were $127 million and $247 million, respectively
• Fourth quarter adjusted net income attributable to Sonoco was $100 million, resulting in adjusted diluted earnings per share (“adjusted diluted EPS”) of $1.00; excluding the loss from the Eviosys acquisition, adjusted diluted EPS would have been $1.17

“2024 was a milestone year for Sonoco in achieving our strategy to globally scale our metal packaging platform through the acquisition of Eviosys and to transform our portfolio to comprise more sustainable Consumer and Industrial packaging businesses through the announced divestiture of TFP and strategic review of some of our other resin-based diversified businesses,” said Howard Coker, President and Chief Executive Officer. “Our fourth-quarter results were within our expectations as we benefited from strong productivity improvements that more than offset price/cost headwinds that persisted across most of our businesses. Overall, we achieved the second best operating cash flow in our history and maintained solid operating performance due to the focused execution of our global team.”

Fourth Quarter and Year Ended 2024 Segment Results

Sonoco reports its financial results in two reportable segments: Consumer Packaging (“Consumer”) and Industrial Paper Packaging (“Industrial”), with all remaining businesses reported as All Other.

Consumer Packaging

• Consumer segment net sales grew 18%, driven by partial December sales attributable to Eviosys after the completion of the acquisition and year-over-year volume growth in rigid paper containers, partially offset by lower selling prices.
• Segment operating profit and segment adjusted EBITDA grew as a result of strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, which offset price/cost headwinds, with volume remaining flat.

Industrial Paper Packaging

• Industrial segment net sales were $571 million as higher volumes and higher selling prices were offset by lower sales related to the treatment of recycling as a procurement function effective January 1, 2024.
• Segment operating profit margin was 12% and adjusted EBITDA margin was 18% as strong productivity efficiencies and modest volume/mix gains were partially offset by continued price/cost pressures.

All Other

• Net sales declined 40% reflecting the sale of the Protexic business and lower volumes from the remaining businesses in All Other.
• Operating profit and adjusted EBITDA declined 73% and 65%, respectively, reflecting lower volume/mix in temperature-assured packaging and industrial plastics along with the sale of the Protexic business.

Balance Sheet and Cash Flow Highlights

• Cash and cash equivalents, including from discontinued operations, were $443 million as of December 31, 2024, compared to $152 million as of December?31, 2023, with the increase primarily related to cash acquired in the Eviosys acquisition
• Total debt, including from discontinued operations, was $7.1 billion as of December 31, 2024, an increase of $4.0 billion compared to December 31, 2023, primarily related to the financing for the Eviosys acquisition
• On December 31, 2024, the Company had available liquidity of $1.7 billion, comprising available borrowing capacity under its revolving credit facility and cash on hand
• Cash flow from operating activities for the full year 2024 was $834 million, compared to $883 million in the same period of 2023
• Capital expenditures, net of proceeds from sales of fixed assets, for the full year 2024 were $378 million, compared to $283 million for the same period last year
• Free Cash Flow for the full year 2024 was $456 million compared to $600 million for the same period of 2023. Free Cash Flow is a non-GAAP financial measure. See the Company’s definition of Free Cash Flow, the explanation as to why it is used, and the reconciliation to net cash provided by operating activities later in this release
• Dividends paid during the full year ended December 31, 2024 increased to $203 million compared to $197 million in the prior year

Guidance⁽¹⁾

Full-Year 2025

• Adjusted EPS⁽²⁾: $6.00 to $6.20
• Cash flow from operating activities: $800 million to $900 million
• Adjusted EBITDA⁽²⁾: $1,300 million to $1,400 million

Commenting on the Company’s outlook, Sonoco’s President and CEO, Howard Coker, said, “As we enter the new year, we are focused on successfully integrating Eviosys into Sonoco Metal Packaging and achieving our two-year $100 million synergy target. We have announced the divestiture of TFP and intend to continue pursuing strategic alternatives for our remaining temperature-assured cold-chain packaging business. We intend to use proceeds from divestitures, along with projected strong free cash flow, to lower leverage to 3.0X to 3.3X Net Debt/Adjusted EBITDA by the end of 2026. We will continue to invest in our global Consumer and Industrial packaging businesses while maintaining our focus on profitability and productivity. Finally, we expect to achieve an extraordinary 100 consecutive years of returning cash to our shareholders in the form of dividends. By transforming into a simpler, stronger and more sustainable company, we have positioned Sonoco to grow projected adjusted net income attributable to Sonoco by approximately 20% year over year and adjusted EBITDA by approximately 30% year over year in 2025.”

⁽¹⁾Sonoco’s 2025 guidance includes projected first quarter results from the TFP business. Guidance excludes any impact of other potential divestitures. Although the Company believes the assumptions reflected in the range of guidance are reasonable, given the uncertainty regarding the future performance of the overall economy, the effects of inflation, the challenges in global supply chains, potential changes in raw material prices, other costs, and the Company’s effective tax rate, as well as other risks and uncertainties, including those described below, actual results could vary substantially. Further information can be found in the section entitled “Forward-looking Statements” in this release.

⁽²⁾ Full year 2025 GAAP guidance is not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast without unreasonable efforts: restructuring costs and restructuring-related impairment charges, acquisition/divestiture-related costs, gains or losses from the sale of businesses or other assets, and the income tax effects of these items and/or other income tax-related events. These items could have a significant impact on the Company’s future GAAP financial results. Accordingly, quantitative reconciliations of Adjusted EPS and Adjusted EBITDA guidance and net debt/Adjusted EBITDA targets to the nearest comparable GAAP measures have been omitted in reliance on the exception provided by Item 10 of Regulation S-K.

Effective January 1, 2024, the Company integrated its flexible packaging and thermoformed packaging businesses within the Consumer segment in order to streamline operations, enhance customer service, and better position the business for accelerated growth. As a result, the Company changed its operating and reporting structure to reflect the way it now manages its operations, evaluates performance, and allocates resources. Beginning the first quarter of 2024, the Company’s consumer thermoformed businesses moved from the All Other group of businesses to the Consumer segment. The Company’s Industrial segment was not affected by these changes.

For full fourth quarter and full year results click here.

About Sonoco

With net sales of approximately $6.8 billion in 2023, Sonoco has approximately 21,000 employees working in more than 300 operations around the world, serving some of the world’s best-known brands. With our corporate purpose of Better Packaging. Better Life., Sonoco is committed to creating sustainable products and a better world for our customers, employees and communities. Sonoco was named one of America’s Most Responsible Companies by Newsweek. For more information on the Company, visit our website at www.sonoco.com.

Contact:

Lisa Weeks – Vice President of Investor Relations & Communications – lisa.weeks@sonoco.com – (843) 383-7524

Source: Sonoco Products Company