Sonoco Products Company · NYSE:SON
Sonoco Products — Q3 2024 Earnings Presentation
29 slides from Sonoco Products's earnings presentation, Nov 1, 2024
Slide 1: 3rd Quarter 2024 Earnings Results
3RD QUARTER 2024 EARNINGS RESULTS November 1, 2024
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS / NON-GAAP FINANCIAL MEASURES Statements included herein that are not historical in nature, are intended to be, and are hereby identified as “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amen
Slide 3: Today's Attendees
TODAY’S ATTENDEES Lisa Weeks Howard Coker Rob Dillard Rodger Fuller VP of IR & Communications President & CEO Chief Financial Officer Chief Operating Officer 3
Slide 4: Business Update
BUSINESS UPDATE Howard Coker President & CEO
Slide 5: Q3 2024 Results Summary
Q3 2024 Results Summary CONTINUED SOLID RESULTS FROM PRODUCTIVITY Revenue Adj. EBITDA Adj. Net Income* Adj. Earnings Per Share* $1.68B $281M $148M $1.49 16.8% Margin 8.8% Margin Q3 Highlights Third quarter results near the midpoint of guidance of $1.40 - $1.60: • Adjusted EBITDA margins remain stron
Slide 6: Strategic Priorities Updates
STRATEGIC PRIORITIES UPDATES Operating with Sustainability Strategic Discipline Design Awards M&A • Productivity of $141 million through • Sustainable Innovation Award for • Announced Eviosys transaction Sept. 30, 2024 Mono-material Pringles Tube on June 24, 2024 • Payoff from increased capital spen
Slide 7: Sonoco to Acquire Eviosys
SONOCO TO ACQUIRE EVIOSYS Eviosys At-a-Glance #1 in food cans in Europe Acquisition Highlights – Expecting Q4 Closure ~$2.5B Adds scale to our core metal can platform; proforma, Sonoco will be the 2024E Revenue leading metal food and aerosol can manufacturer globally ~$430M Expands customer relation
Slide 8: Strategic Review of TFP
STRATEGIC REVIEW OF TFP • As announced on Sept 4, 2024, Sonoco is reviewing Strategic Alternatives for our Thermoformed & Flexible Packaging (TFP) business, part of the Consumer Packaging segment • Goal of the review is to accelerate Sonoco’s portfolio simplification strategy, improve pro forma leve
Slide 9: Financial Results & Outlook
FINANCIAL RESULTS & OUTLOOK Rob Dillard Chief Financial Officer
Slide 10: Q3 Financial Results vs 2023: Resilient Operating Performance
Q3 - 24 Financial Results vs 2023 RESILIENT OPERATING PERFORMANCE Q3-23 Q3-24 YoY % Change Net Sales driven by positive volume/mix offset by strategic Net Sales ($M) $1,710 $1,676 -2.0% activity of divestitures, market exits, and reclassifications Adjusted Operating Profit ($M) $213 $211 -0.9% Stron
Slide 11: Consumer Segment: Q3-24 Results
Consumer Segment: Q3-24 Results CONTINUED PROFITABLE GROWTH Q3 Results Sales ($M) Adj. EBITDA ($M) • Consumer volume/mix increased mid-single-digits due to -0.1% 6% acquisitions and positive organic $151 $160 $985 $984 volume/mix in TFP and SMP • Improvement in productivity to $18M across Consumer 1
Slide 12: Industrial Segment: Q3-24 Results
Industrial Segment: Q3-24 Results VOLUMES STABLE Q3 Results Sales ($M) Adj. EBITDA ($M) • Industrial volume/mix increased 1% -3% 6% due to acquisitions and $585 improving paper demand globally $580 $105 $102 • Strong productivity of $18M due to improved operating leverage 18% 17% and lower fixed cos
Slide 13: All Other Group of Businesses: Q3-24 Results
All Other Group of Businesses: Q3-24 Results THREE BUSINESSES REMAIN Q3 Results Sales ($M) Adj. EBITDA ($M) • Price/cost headwind and flat volume/mix partially offset by -26% -18% positive productivity $146 $25 $107 $20 • Sale of Protective Solutions completed on April 1, 2024, 19% proceeds used to
Slide 14: Balanced Approach to Capital Allocation
BALANCED APPROACH TO CAPITAL ALLOCATION Disciplined Investment in Our Strategy Capital Investment Dividend Invest to drive productivity and Reward shareholders growth Track record of consistent Dynamic capital allocation dividend growth Focus on increasing ROIC* Industry leading yield Share Repurcha
Slide 15: Cash Flow Overview
Cash Flow Overview STRONG CASH FLOW GENERATION Operating Cash Flow ($M) Q3 Results $251 $268 $267 • Generated $162M of Operating Cash Flow in Q3 $166 $162 $98 $109 • Seasonally higher Q3 EBITDA was partially offset by NWC build to support business activity Q1F23 Q2F23 Q3F23 Q4F23 Q1F24 Q2F24 Q3F24 •
Slide 16: Recent Financing Activities
RECENT FINANCING ACTIVITIES Maintaining investment grade credit rating • Completed permanent Revolving Credit Facility New Term Loans Existing Term Loan New Bonds Existing Bonds financing to fund Eviosys acquisition • Received commitments for a $700M 2-Year Term Loan 1,500 1,250 in July 364-Day • Re
Slide 17: Q4 and 2024 Financial Outlook
Q4 AND 2024 FINANCIAL OUTLOOK Summary Reaffirm full year guidance: $ in Millions (except EPS) 2024 Guidance EBITDA • Reaffirm full year range Adjusted EBITDA $1,050 - $1,090 EPS • Full Year Guide Range mid-point reaffirmed Adjusted EPS $5.05 - $5.25 Operating Cash Flow expected within the guidance r
Slide 18: Q4-24 Segment Outlook
Q4-24 SEGMENT OUTLOOK CONSUMER INDUSTRIAL ALL OTHER PACKAGING PRODUCTS BUSINESSES • Anticipate sales lower year-over-year from • Anticipate sales down sequentially from • Anticipate lower sales year-over- a facility divestiture and negative normal seasonality and down year-over- year from the sell o
Slide 19: Positioned to Deliver Long-Term Shareholder Value
POSITIONED TO DELIVER LONG-TERM SHAREHOLDER VALUE 2028 SONOCO TARGETS Adjusted EBITDA Cash Flow Capital Strategy $1.5B $4-$5B • Investment Grade Balance Sheet Margins in cumulative operating cash flow (2024-28) • Dynamic Capital Allocation High Teens Deliver on the above with a competitive and growi
Slide 20: Upcoming Investor Events
UPCOMING INVESTOR EVENTS Nov 4, 2024 Nov 12, 2024 Nov 13, 2024 Dec 3, 2024 February 2025 Chicago, IL Boston, MA Chicago, IL New York, NY New York, NY Pack Expo 2024 Morgan Stanley RW Baird Citi’s Q4/FY 24 Booth S-2666 Global Global 2024 Basic RESULTS and Chemicals, Industrial Materials Agriculture a
Slide 21: Q3 2024 Earnings
Q3 2024 ® EARNINGS SONOCO
Slide 22: Appendix
APPENDIX Quarter-ending: September 30th, 2024
Slide 23: EPS Summary
EPS SUMMARY 2024 Vs. 2023 Third Quarter Year To Date 2024 2023 2024 2023 GAAP EPS - diluted $ 0.51 $ 1.32 $ 2.09 $ 3.98 Addback for: Acquisition, divestiture, and integration costs, net 0.44 0.10 0.64 0.18 LIFO Reserve change 0.01 (0.02) — (0.08) Acquisition intangibles amortization expense 0.17 0.1
Slide 24: P&L Summary (Adjusted) - Third Quarter
P&L Summary (Adjusted) Third Quarter: 2024 Vs. 2023 (Dollars in millions) Better / (Worse) 2024 2023 $ % Net sales $ 1,676 $ 1,710 $ (34) (2.0)% Gross profit 360 361 (1) (0.2)% SG&A Expenses, net of Other Income (149) (149) 1 0.4 % Operating profit $ 211 $ 212 $ (1) (0.6)% Net interest (26) (30) 4 1
Slide 25: P&L Summary (Adjusted) - YTD
P&L Summary (Adjusted) Year over Year: 2024 YTD Vs. 2023 YTD (Dollars in millions) Better / (Worse) 2024 2023 $ % Net sales $ 4,937 $ 5,145 $ (208) (4.0)% Gross profit 1,053 1,086 (33) (3.0)% SG&A Expenses, net of Other Income (474) (449) (25) (5.7)% Operating Profit $ 579 $ 637 $ (58) (9.0)% Net in
Slide 26: Balance Sheet
Balance Sheet (Dollars in millions) 9/29/2024 12/31/2023 Change $ Cash and cash equivalents $ 1,931 $ 152 $ 1,779 Trade accounts receivable, net of allowances 1,043 905 138 Other receivables 110 107 3 Inventories 755 774 (19) Prepaid expenses 131 113 18 Current Assets $ 3,969 $ 2,051 $ 1,918 Propert
Slide 27: Sales and Adj. Operating Profit Bridge - Quarter over Quarter
Sales and Adj. Operating Profit Bridge Quarter over Quarter (Dollars in Millions) Sales Consumer Industrial All Other Total Q3 2023 Sales $ 985 $ 580 $ 146 $ 1,710 Volume / Mix* 55 34 (38) 51 Price (21) 4 — (17) FX / Other (35) (34) — (68) Q3 2024 Sales $ 984 $ 585 $ 107 $ 1,676 Adj Operating Profit
Slide 28: Sales and Adj. Operating Profit Bridge - Year over Year
Sales and Adj. Operating Profit Bridge Year over Year: Q3 2024 vs Q3 2023 (Dollars in Millions) Sales Consumer Industrial All Other Total 2023 Sales $ 2,914 $ 1,781 $ 450 $ 5,145 Volume / Mix* 46 144 (114) 76 Price (61) (45) — (106) FX / Other (77) (101) — (178) 2024 Sales $ 2,822 $ 1,779 $ 336 $ 4,
Slide 29: Dividend Is Foundational
DIVIDEND IS FOUNDATIONAL $2.02 Raised Dividend for the 41st Consecutive Year $1.92 $1.80 $1.70 $1.72 $1.62 $1.54 $1.46 Dividend in $s $1.37 $1.27 $1.23 $1.19 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 41 99 29 Quarterly Dividend of $0.52 per Years of Consecutive Consecutive share as
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