• Net Sales: Increased 31% to $1.7 billion.
• Adjusted EBITDA: Up 38% to $338 million; margin improved 170 basis points to 16.6%.
• Adjusted Earnings Per Share (EPS): $1.38, a 23% increase year-over-year.
• Consumer Segment Adjusted EBITDA: Grew 127% year-over-year.
• Industrial Segment Sales: Decreased 6% to $558 million.
• Industrial Segment Adjusted EBITDA: Increased 6% to $101 million.
• Debt Reduction: Net leverage reduced to under 4 times net debt to adjusted EBITDA.
• Full Year Guidance: Adjusted EPS expected between $6 to $6.20; operating cash flow projected between $800 million and $900 million.
• Free Cash Flow: Projected between $50 million to $550 million.
• Divestiture Proceeds: Approximately $1.56 billion in after-tax proceeds used to reduce debt.
• Global Metal Packaging Sales: Tracking at expectations with adjusted EBITDA margins near 16%.

• Warning! GuruFocus has detected 8 Warning Signs with SON.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sonoco Products Co (NYSE:SON) achieved record top line and adjusted EBITDA performance, with net sales growing by 31% and adjusted EBITDA up by 38%.
• The Consumer Packaging segment saw a 127% growth in adjusted EBITDA, driven by the Eviosys acquisition and strong volume mix from legacy metal and rigid paper can businesses.
• The company completed the sale of its thermoform and flexibles business, receiving approximately $1.8 billion in cash, which was used to significantly reduce debt.
• Sonoco Products Co (NYSE:SON) is on track to achieve approximately $40 million in synergy savings in 2025 from the integration of Eviosys, with a two-year target of $100 million.
• The US metal packaging business experienced strong year-over-year results, with a 10% organic volume mix improvement, driven by growth in aerosols and food cans.

Negative Points

• Higher-than-expected interest expenses, taxes, and negative currency translation impacted adjusted earnings, which were up by 23%.
• Volume in the Industrial segment was down low single digits, with flat results in South America offset by declines in other markets.
• The European metal packaging business faced slower market conditions, with can volumes reflecting a decline, although new customer wins are expected to benefit future performance.
• The Industrial segment saw a 6% decrease in sales, impacted by lower volumes, the planned exit from China, and unfavorable currency translation.
• The company anticipates headwinds from a higher effective tax rate and softness in the industrial volume mix, although these are expected to be offset by favorable price/cost dynamics.

Q & A Highlights

Q: Can you provide more details on the volume performance by region and key segments? A: Robert Coker, President and CEO, explained that on the consumer side, North America and South America saw slight increases in rigid paper volumes, while Europe and Southeast Asia experienced declines. In the industrial segment, volumes were down low single digits, with Europe being softer than expected. The North American metal packaging business saw a 10% improvement in food cans and a 25% increase in aerosols.

Q: Are you seeing any changes in purchasing behavior or supply chain dynamics due to tariffs or macroeconomic conditions? A: Robert Coker noted that there haven't been significant changes in supply chain or customer behavior. However, there is some stagnation with a major paper can customer due to an ongoing acquisition, which is expected to resolve post-acquisition.

Q: Can you discuss the opportunities and strategies for managing your global network? A: Rodger Fuller, COO, highlighted that the focus is on optimizing the metal can business, particularly in Europe, to provide the lowest cost solutions. This involves strategic decisions on production locations for components like easy-open ends, aiming to gain market share and grow the business.

Q: Why did you reiterate a more modest EBITDA guidance for Eviosys despite strong Q1 performance? A: Robert Coker stated that the guidance is conservative, considering the weaker performance in the previous year. The strong Q1 results are acknowledged, but the company remains cautious due to potential economic uncertainties.

Q: What measures are in place to retain the leadership team post-Eviosys integration? A: Rodger Fuller emphasized the importance of constant communication and cultural integration within Sonoco. The leadership team is engaged and aligned with Sonoco's vision, and retention discussions are ongoing to ensure stability and continuity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.