Sonoco Products Company · NYSE:SON
Sonoco Products — Non-Deal Roadshow (August 2008)
44 slides from Sonoco Products's roadshow presentation, August 2008
Slide 1: Sonoco West Coast Investor Meetings
Sonoco West Coast Investor Meetings August 5-11, 2008 Jack Sanders Executive Vice President - Industrial Charles J. Hupfer Senior Vice President & CFO 1
Slide 2: Forward-looking Statements
Forward-looking Statements Today’s presentation contains a number of forward-looking statements based on current expectations, estimates and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties. Therefore, actual results may differ
Slide 3: Business Segments
Business Segments Consumer Packaging - $1.44 billion Tubes/Cores/Paper - $1.71 billion Rigid Paper & Plastic Containers Global Paper Global Tubes and Cores Global Composite Cans Plastic Containers Packaging Services - $520 million Point-of-Purchase Service Centers Flexible Packaging Metal & Plastic
Slide 4: Successful Progress
Successful Progress Record sales in 2007 – increased 10.5% Grew base earnings per share Five-year sales growth – 8.4% CAGR 12% in 2007 Changing business mix more to Five-year base earnings per share consumer over industrial growth – 10% 4
Slide 5: Global Sales by Region
Global Sales by Region All All other other Canada 9% U.S. Canada 10% 9% 70% U.S. 10% 62% Europe Europe 12% 18% 2002 2007 Net Sales $2.7 billion Net Sales $4.0 billion Excluding discontinued operations 5
Slide 6: Global Consumer Packaging Businesses
Global Consumer Packaging Businesses Rigid Paper Rigid Plastic Ends and Closures Printed Flexible Packaging Matrix Packaging 6
Slide 7: Global Consumer Packaging Services
Global Consumer Packaging Services Service Centers Point-of-Purchase (P-O-P) Displays 7
Slide 8: Steps to Grow Sonoco's Consumer Businesses
Steps to Grow Sonoco’s Consumer Businesses Cross-division solution selling New product development Geographic expansion Acquisitions Consumer solutions strategy 8
Slide 9: Creating Sustainable Value for Our Customers
Creating Sustainable Value for Our Customers Sonoco’s Total Solutions Strategy Design Material Sourcing Converting Recovery/ Recycling Retail/ Usage Distribution 9
Slide 10: Top-line Growth: Consumer Acquisitions
Top-line Growth Acquisitions Consumer Approx. $565 million in sales Phoenix Packaging PAC One G7 CorrFlex Bauen Wycon Markson Rosenthal Cin-Made Clear Pack Matrix Packaging United Packaging Caraustar Consumer Products 10
Slide 11: Top-line Growth: Geographic Expansion Opportunities
Top-line Growth Geographic Expansion Opportunities • New composite • New service centers can opportunities for P&G – Gillette (2008) – Lodz expansion (2007) – New Strykow Service Center – Lego (2007) – Additional capacity (2008) • Growing tube and core business • Growing tube, core and paper operati
Slide 12: Top-line Growth: New Product Development
Top-line Growth New Product Development New product sales were $62.2 million in 1st half 2008, up 51% 2006 and 2007 new products more than $100 million Goal: Average $100 million to $150 million of annual sales from new products New products = those commercialized two years or less 12
Slide 13: New Product Launch
New Product Launch Target Launches New Sonoco-made Cereal Package 13
Slide 14: Consumer Packaging Innovations: Flexible Packaging
Consumer Packaging Innovations Flexible Packaging 14 14
Slide 15: Consumer Packaging Innovations: SmartSeal
Consumer Packaging Innovations SmartSeal™ Easy-Open and Reclose Technology 15
Slide 16: New Product and Market Development
New Product and Market Development 16
Slide 17: Award-winning Consumer Packaging Innovations
Award-winning Consumer Packaging Innovations Ends and Closures 17
Slide 18: Consumer Packaging Innovations: Gravure Cylinders
Consumer Packaging Innovations Gravure Cylinders 18
Slide 19: Consumer Packaging Innovations: Rigid Paper Containers
Consumer Packaging Innovations Rigid Paper Containers Meow Mix®, Preen® and Elizabeth Farley’s Powdered Infant Arden/Dorpak® pails Formula 19
Slide 20: Award Winning Packaging Services Innovations
Award Winning Packaging Services Innovations Elizabeth Arden displays P&G Sonopop® display for Crest Pantene countertop display Back to Basics Regimen 20
Slide 21: Packaging Services Innovations
Packaging Services Innovations Service Center Strykow, Poland 21
Slide 22: Cross-divisional Solution Selling
Cross-divisional Solution Selling Base Business Growth Business 22
Slide 23: Global Industrial Products Group
Global Industrial Products Group Paper Tubes and Cores Protective Packaging Reels 23
Slide 24: Industrial Products Growth Steps
Industrial Products Growth Steps Maximize cash flow • Price management • Structure cost reductions • “Manage the Guts” Recycling services New product development Acquisitions/Geographic expansion Share gain 24
Slide 25: Top-line Growth: Acquisitions/Joint Ventures/Alliances
Top-line Growth Acquisitions/Joint Ventures/Alliances (2002-2007) Approx. $385 million in sales Acquisitions/Joint Ventures Ahlstrom Demolli Smaller acquisitions in Mexico, North America and Finland Alliances Pacific Paper Tube (Northwest U.S.) Summer Industries (Florida) Erdie Industr
Slide 26: New Industrial Product Innovations
New Industrial Product Innovations Dura-Block™ Pallet Blocks 26
Slide 27: Tubes and Cores/Paper Innovations
Tubes and Cores/Paper Innovations Void forms Twist-n-Pull™ Commercial mailing tubes Sonotube® forms 27
Slide 28: Sonoco Sustainability Solutions
Sonoco Sustainability Solutions Waste Reduction Services For Consumer Packaging Companies And Retailers 28
Slide 29: All Other Sonoco Products and Services
All Other Sonoco Products and Services 29
Slide 30: Maximizing Cash Flow
Maximizing Cash Flow Structural Cost Reductions Reducing fixed costs Closed converting operations in North America and Europe Closed five paperboard mills in North America/ Europe since 2002 Price/cost management July 14 - $40/ton paperboard energy surcharge 30
Slide 31: Financial Review
Financial Review 31 31
Slide 32: EPS, As Reported and Base
EPS, As Reported and Base 32 32
Slide 33: State of the Company is Sound
State of the Company is Sound Maintain a strong balance sheet Strong cash flow Total debt to capital reduced Second highest on record to 34.2% end of 2Q ‘08 Investing in growing our business One of the lowest levels in nearly Returning value to shareholders 15 years 33
Slide 34: Returning Value to Shareholders
Returning Value to Shareholders Paid out $102.7 million in dividends Board declared increase in quarterly Repurchased $109.2 million in cash dividends for 26 consecutive th common stock year Five-year average total return to $.27 per share ($1.08 per share shareholders of 10.8% annualized)
Slide 35: Price/Costs
Price/Costs ($ in Millions) 35 35
Slide 36: Total Productivity
Total Productivity ($ in Millions) 36 36
Slide 37: 2008 Financial Performance
2008 Financial Performance ($ Millions, except Base EPS) First Half 2008 First Half 2007 Percent Increase 1st 2nd 1st 2nd 1st 2nd Qtr Qtr Total Qtr Qtr Total Qtr Qtr Total Net Sales $1,038.0 $1,086.6 $2,124.6 $955.7 $994.4 $1,950.1 8.6% 9.3% 8.9% Base EBIT $88.3 $93.8 $182.0 $95.5 $90.2 $185.7 -7.6%
Slide 38: 2008 Balance Sheet
2008 Balance Sheet ($Millions) 06/29/08 12/31/07 Current Assets $ 1,140 $ 1,028 PP&E 1,084 1,105 Goodwill 833 828 Affiliate Investments 97 107 Other 248 272 Total Assets $ 3,402 $ 3,340 CL (excluding notes/st debt) $ 733 $ 713 Total Debt 826 850 Postretirement Benefit Obligations 183 181 Deferred Ta
Slide 39: 2008 Base EPS Forecast
2008 Base EPS Forecast 3Q 2008 Estimate $0.63 - $0.65 3Q 2007 Actual $0.64 2008 Guidance $2.44 to $2.47 2007 Actual $2.38 (As reported on July 17) 39
Slide 40: Progress Forward Growth Plan
Progress Forward Growth Plan Average Annual Double-digit Total Return to Shareholders Profitable Sales Growth Superior Returns on Investment and Equity Maximize Cash Flow Right People in the Right Jobs 40
Slide 41: Progress Forward Growth Plan: 2008-2012 Financial Targets
Progress Forward Growth Plan 2008 – 2012 Financial Targets Achieve sales growth To $5.5B - $6.0B Improve EBIT margins From 9.1% to 11.0% Increase RONAE From 11.0% to 12.5% 41
Slide 42: Progress Forward Growth Plan 2008-2012
Progress Forward Growth Plan 2008 – 2012 $1.0B $2.8B 42
Slide 43: Key Steps to Success – Progress Forward
Key Steps to Success – Progress Forward • Consumer vs. Industrial • New product development Top-line growth • Acquisitions • Total solutions strategy Working capital Cash flow “Managing the Guts” • Reduce cost structure Improve margins • Productivity • Price/cost Manage under-performing EBIT growth
Slide 44: Questions
Questions
Sonoco Products Company — Non-Deal Roadshow (August 2008) on 6ix