Sonoco Products Company · NYSE:SON
Sonoco Products — Shareholder Meeting (April 2024)
38 slides from Sonoco Products's shareholder meeting presentation, Apr 17, 2024
Slide 1: Annual Meeting of Shareholders
SONOCO Annual Meeting of Shareholders John Haley Chairman April 17, 2024
Slide 2: Board of Directors
Board of Directors Steven Boyd Howard Coker Pamela Davies Theresa Drew Philippe Guillemot 2
Slide 3: Board of Directors
Board of Directors John Haley Robert Hill Eleni Istavridis Richard Kyle Blythe McGarvie Thomas Whiddon 3
Slide 4: 2024 Annual Meeting Agenda
2024 Annual Meeting Agenda Proposal 1 Election of Directors Proposal 2 Ratification of Independent Registered Public Accounting Firm Proposal 3 Advisory (Non-binding) Vote to Approve Executive Compensation Proposal 4 Approval of the 2024 Omnibus Incentive Plan Proposal 5 Advisory (Non-binding) Share
Slide 5: Advancing Sonoco's Strategy
ADVANCING SONOCO’S STRATEGY Howard Coker President and CEO
Slide 6: 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 ame
Slide 7: Key Takeaways
KEY TAKEAWAYS WHAT YOU WILL HEAR TODAY We set out on a transformation journey in 2020, and we have made good on our promises to date We built a stronger portfolio that is positioned to deliver value-creating growth We better unified our operating model to our advantage, with more efficiencies expect
Slide 8: People Build Businesses by Doing the Right Things
Our guiding principle remains unchanged since 1899: PEOPLE BUILD BUSINESSES BY DOING THE RIGHT THINGS Our Core Values Teamwork Service Respect Integrity Accountability 8
Slide 9: Celebrating 125 Years of History
CELEBRATING 125 YEARS OF HISTORY 4,000+ Patents to date — Many of which you engage with on a daily basis $ Revenue Milestones +500 Patents since 2020 Spiro-Pac, composite UltraSeal $7B tubular invented Rigid Paper Container Smartseal containers launched business expands to invented $5B Asia & Brazil
Slide 10: Video Update
Video Update Sonoco 125-Year History 10
Slide 11: Unified Sustainability Focus Across Sonoco
UNIFIED SUSTAINABILITY FOCUS ACROSS SONOCO Protecting our Investing in our Striving for environment people and transparency at all communities levels 11
Slide 12: Sonoco Provides Value-Added Packaging
SONOCO PROVIDES VALUE-ADDED PACKAGING Principles central to where we play Advanced Market Material Science Dynamics High Product Large / Global Functionality Customers Continuous process Manufacturing How We Win Guiding Principle Serving Operational Innovation Culture People Build Customers Executio
Slide 13: We Set Out to Do More... Our Transformation Journey
WE SET OUT TO DO MORE... OUR TRANSFORMATION JOURNEY 2024 –2028 Next Era Goals 2024 - 2025 • Maintain a Focused Portfolio Strategy Portfolio Alignment • Drive Further Profitable Growth 2022-2023 • Building New Strategic Platform • Operate with Discipline (Flex-Therm Packaging) 2020-2021 Focus the Org
Slide 14: Notable Progress Since 2020
NOTABLE PROGRESS SINCE 2020 Simplified Portfolio Invested Created a new CORE Refined and Executed (Phase 1) in CORE Platform – Metal Pkg Operating Strategy Defined CORE Increased Capex Value creation model and separated non-core businesses 2010 – 2019 <$200M/yr ALL OTHER Structural Strategic Capital
Slide 15: Increased Profitability and Cash Flow
INCREASED PROFITABILITY AND CASH FLOW Execution of strategy drove improved results Adjusted EBITDA >$1B $1.6B+ $771M CUMULATIVE OPERATING CASH FLOW 2021–2023 2021 2023 15
Slide 16: Sonoco At-a-Glance
SONOCO At-a-Glance GLOBAL LEADER IN HIGH-VALUE, SUSTAINABLE PACKAGING FY 2023 Results Sales Breakdown Company Profile BY SEGMENT ~$5.5B Consumer Industrial All Other Estd. Market Cap 53% 35% 12% 1899 $6.8B BY SUBSTRATE 22K+ Revenue Employees Paper Resin Tinplate 57% 29% 14% $1,067M 300+ Adjusted EBI
Slide 17: Defined 4 Businesses Within Core
DEFINED Consumer Industrial 4 BUSINESSES WITHIN CORE RIGID PAPER Based on Strategic Fit in terms of CONTAINERS Technology, Innovation, Customers, INDUSTRIAL and Sustainability PACKAGING Core Attributes FLEX-THERM PACKAGING ~ $6.2B Advanced Material Science 2023 Sales High Product Functionality Conti
Slide 18: Long-Standing Partnerships with Customers
LONG-STANDING PARTNERSHIPS WITH CUSTOMERS All trademarks, registered or unregistered, are the property of their respective owners. Specific ownership information avai lable upon request. 18
Slide 19: What's Changing with Our Customers
Environmental Excellence WHAT’S HOW SONOCO IS RESPONDING CHANGING FOCUS ON CIRCULAR ECONOMY Goal: Produce more sustainable WITH OUR products across all substrates CUSTOMERS What we’re doing: • Reducing environmental impact via circular design • Providing thought leadership to develop industry recycl
Slide 20: Focus on Climate Change Impact
Environmental Excellence FOCUS ON CLIMATE CHANGE IMPACT How we are reducing emissions DRIVING SUSTAINABLE PURCHASING LOWERING OPERATIONS POWER ENERGY USE Waco, TX | Flex-Therm • Solar Installation 2024 • LED Lighting Signed VPPA Plant Systems • Compressed Air System Optimization Agreement Optimizati
Slide 21: Delivering on Our Commitments
Environmental Excellence DELIVERING ON OUR COMMITMENTS * Protecting our Investing in our people Striving for transparency environment and communities at the executive level 2.7% >20% 26% 32% 45% 98.8% YoY decrease in YoY decrease in GHG Female Workforce Female New Hires Board Diversity Rate Average
Slide 22: Future-Proofing Pringles in the Evolving EU Marketplace
CASE STUDY - SUSTAINABILITY SOLUTION The 90% Paper Pringles Can Development and implementation FUTURE-PROOFING of our patent pending technology for paper bottom ends for high-speed production lines and PRINGLES IN THE influencing country regulations while future- proofing can design EVOLVING EU MARK
Slide 23: Co-locate and Drive Synergies
CASE STUDY - CUSTOMER PARTNERSHIP SOLUTION Co-locate and drive synergies • Joint Investment: Sonoco and Bush's collectively invested $30 million in a new 2-piece 307 line • New line built and co-located with Bush’s production facility in Tennessee RESULTS • Partnership streamlines can BACKGROUND SKU
Slide 24: Drive Circular Economy with PET Trays
CASE STUDY: SUSTAINABILITY + INNOVATION SOLUTION Natural CPET Tray Sonoco created an important solution by designing an unpigmented tray, called the Natural Tray, that is NIR-detectable, contains 30% DRIVE recycled PET materials, and the ability to be captured in a Material Recovery Facility (MRF).
Slide 25: European Appliances Industry: Driving Sustainable Packaging Growth
CASE STUDY - SUSTAINABILITY SOLUTION Sonopost® Europe Sonopost® and Linear Draw EUROPEAN • Port Sonoco’s proven solutions of Sonopost® to the European market APPLIANCES • Installed production capacity in countries with strong appliance INDUSTRY: DRIVING manufacturing presence SUSTAINABLE PACKAGING G
Slide 26: Clear Investment Thesis Drives Our Focus
CLEAR INVESTMENT THESIS DRIVES OUR FOCUS Multi-substrate portfolio strength gives us edge over competition Expected Long Term SONOCO Core Business End-market Growth Investment Thesis RIGID PAPER High Single Digits Organic growth engine CONTAINERS Strong, secular tailwinds FLEX-THERM Mid-Single Digit
Slide 27: Aligning Long-Range Plans to Achieve Enterprise Objectives
Next Era: Growth-oriented Disciplined Company ALIGNING LONG-RANGE PLANS TO ACHIEVE ENTERPRISE OBJECTIVES BUSINESS STRATEGY EXECUTION PLAYBOOK Enterprise DRIVE GROWTH Business Excellence DELIVER Strategy RESULTS Portfolio OPTIMIZE COSTS Financial Excellence Strategy Operational Excellence • Expand re
Slide 28: Delivering Results: 2028 Goals
DELIVERING RESULTS Building on Improved Financial Performance for the Next 5 Years 2028 GOALS $1.5B High Teens $4B – $5B Adjusted EBITDA Adjusted EBITDA Cumulative Operating Margin Cash Flow WITH A COMPETITIVE AND GROWING DIVIDEND 28
Slide 29: Dividend Is Foundational
DIVIDEND IS FOUNDATIONAL $2.02 DRIVES DISCIPLINE AND $1.92 SHAREHOLDER VALUE $1.80 Dividend in $s $1.70 $1.72 $1.62 $1.54 $1.46 $1.37 $1.27 $1.23 $1.19 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Annualized Dividend Increase of $0.04 /share Announced Today 41 Years of Consecutive Ann
Slide 30: Great Company, Primed for Greater Value Creation
GREAT COMPANY, PRIMED FOR GREATER VALUE CREATION Strong Company Well-positioned Sustainability focus Increasing value of innovation as differentiator Diversified portfolio Robust/sticky customer relationships Differentiated operating model Economic cycle resiliency Investing in growth Increasing val
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Slide 32: Investor Day
(@, 2024 a. INVESTOR DAY SONOCO
Slide 33: Appendix: Reconciliation of GAAP and Non-GAAP Information
APPENDIX RECONCILIATION OF GAAP AND NON-GAAP INFORMATION Year-ending: December 31, 2023
Slide 34: EPS Summary
EPS SUMMARY 2023 Vs. 2022 Fourth Quarter Year to Date 2023 2022 2023 2022 GAAP EPS $ 0.82 $ 0.98 $ 4.80 $ 4.72 Addback for: Acquisition and divestiture related costs, net 0.02 0.06 0.20 0.53 LIFO Reserve change (0.01) 0.03 (0.09) 0.22 Acquisition intangibles amortization expense 0.18 0.15 0.66 0.62
Slide 35: P&L Summary (Adjusted) Fourth Quarter
P&L Summary (Adjusted) Fourth Quarter: 2023 Vs. 2022 (Dollars in millions) Better / (Worse) 2023 2022 $ % Net sales $1,636 $1,676 $(40) (2.4)% Gross profit 338 317 20 6.4 % SG&A Expenses, net of Other Income (171) (133) (37) (28.1)% Operating profit $167 $184 $(17) (9.3)% Net interest (32) (29) (3)
Slide 36: P&L Summary (Adjusted) Year to Date
P&L Summary (Adjusted) Year to date: 2023 Vs. 2022 (Dollars in millions) Better / (Worse) 2023 2022 $ % Net sales $6,781 $7,251 $(470) (6.5)% Gross profit 1,424 1,501 (77) (5.1)% SG&A Expenses, net of Other Income (620) (581) (39) (6.8)% Operating Profit $804 $920 $(116) (12.5)% Net interest (126) (
Slide 37: Balance Sheet
Balance Sheet (Dollars in millions) 12/31/2023 12/31/2022 Change $ Cash and cash equivalents $152 $227 $(75) Trade accounts receivable, net of allowances 905 863 42 Other receivables 107 99 8 Inventories 774 1,096 (322) Prepaid expenses 113 76 37 Current Assets $2,051 $2,361 $(310) Property, plant a
Slide 38: Segment Analysis
Segment Analysis Year to date: 2023 Vs. 2022 (Dollars in millions) Net Sales Segment Operating Profit 2023 2022 % Chg 2023 2022 % Chg Consumer Packaging $3,627 $3,768 (3.7)% $382 $526 (27.4)% Industrial Paper Packaging 2,374 2,685 (11.6)% 318 328 (3.0)% All Other 780 798 (2.2)% 104 66 57.2 % $6,781
Sonoco Products Company — Shareholder Meeting (April 2024) on 6ix