Sonoco Products Company · NYSE:SON
Sonoco Products — Q3 2023 Earnings Presentation
18 slides from Sonoco Products's earnings presentation, Oct 31, 2023
Slide 1: Sonoco Third Quarter 2023 Earnings Presentation
SONOCO SONOCO THIRD QUARTER 2023 Earnings Presentation | November 2023 Sonoco | www.sonoco.com
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 HOWARD COKER ROB DILLARD RODGER FULLER LISA WEEKS President & CEO Chief Financial Officer Chief Operating Officer VP of IR & Communications Sonoco | www.sonoco.com 3
Slide 4: Q3 2023 Results Summary
Q3 2023 Results Summary Adjusted Adjusted Adjusted REVENUE EBITDA NET INCOME* EARNINGS PER SHARE* $1.71B $280M $145M $1.46 -10% y/y 16.4% Margin 8.5% Margin HIGHLIGHTS • Sales flat sequentially as expected; cost management and productivity better than expected • Consumer volumes sequentially higher
Slide 5: Financial Results
Financial Results Rob Dillard Chief Financial Officer Sonoco | www.sonoco.com 5
Slide 6: Q3 - 2023 Financial Results
Q3 - 2023 Financial Results YoY % Q3-22 Q2-23 Q3-23 Change Net Sales ($M) $1,890 $1,705 $1,710 (10%) Adjusted Operating Profit ($M) $225 $211 $213 (6%) Adjusted Operating Profit Margin 11.9% 12.4% 12.4% Adjusted EBITDA ($M) $288 $275 $280 (3%) Adjusted EBITDA Margin 15.2% 16.1% 16.4% Adjusted EPS $1
Slide 7: Q3-23 Performance Review
Q3-23 Performance Review Sales Bridge (Year-over-Year) Sales Drivers (Dollars in millions) $1,890 FX/Other $23 $1,710 • Volume/Mix: Consumer lower from inflationary pricing Q3-22 Volume/Mix Price and destocking at retail and continued low Industrial ($145)* Q3-23 ($58) demand • Price: Unfavorable pr
Slide 8: Q3-23 Segment Results
Q3-23 Segment Results Adjusted Operating Net Sales Operating Profit as OP Bridge Drivers (Y/Y) Profit % of Sales Y/Y Y/Y $MM Y/Y Growth $MM % Growth Growth CONSUMER $938 (9%) $112 (12%) 11.9% (47 bps) • Volumes down primarily driven by inflationary pricing and continued destocking • Negative price/c
Slide 9: Capital Allocation
Capital Allocation Capital Allocation Framework is Aligned to Business Strategy to Drive Value Creation for Shareholders Capital Allocation Priorities Operating Cash Flow ($M) 251 268 Cash Flow from Operations 183 187 138 (37) 79 1 98 118 Capital Expenditures to support ongoing business and drive gr
Slide 10: 2023 Revised Financial Outlook
2023 Revised Financial Outlook Summary $ in Millions (except EPS) 2023 Guidance • Increased the low end of EPS range by $0.15, raising the midpoint by ~8 cents. Price / Cost will Adjusted EBITDA $1,050 - $1,080 become more challenged in Q4, with continued focus on productivity, and cost controls in
Slide 11: Q4-23 Segment Outlook
Q4-23 Segment Outlook CONSUMER PACKAGING INDUSTRIAL PAPER PACKAGING ALL OTHER BUSINESSES • Continued stable volumes in • As expected, global industrial • Lower volumes primarily rigid paper containers globally; market demand for converted from seasonality benefit offset by negative products (film co
Slide 12: Closing Remarks
Closing Remarks Howard Coker President and Chief Executive Officer Sonoco | www.sonoco.com 12
Slide 13: Looking Ahead: Continued Focus on Strategic Initiatives
Looking Ahead: Continued Focus on Strategic Initiatives We are continuing to transform the company through portfolio management and M&A We have increasing opportunity to leverage our operating model to expand margins We remain disciplined in capital allocation and expect to further invest to grow We
Slide 14: Appendix
Appendix Sonoco | www.sonoco.com 14
Slide 15: EPS Summary 2023 Vs. 2022
EPS Summary 2023 Vs. 2022 Third Quarter Year To Date 2023 2022 2023 2022 GAAP EPS $ 1.32 $ 1.24 $ 3.98 $ 3.74 Addback for: Acquisition and divestiture related costs, net 0.10 0.01 0.18 0.48 LIFO Reserve change (0.02) — (0.08) 0.19 Acquisition intangibles amortization expense 0.16 0.16 0.48 0.46 Rest
Slide 16: P&L Summary (Adjusted) Third Quarter: 2023 Vs. 2022
P&L Summary (Adjusted) Third Quarter: 2023 Vs. 2022 (Dollars in millions) Better / (Worse) 2023 2022 $ % Net sales $ 1,710 $ 1,890 $ (180) (9.5)% Gross profit 361 367 (7) (1.8)% SG&A Expenses, net of Other Income (148) (142) (5) (3.8)% Operating profit $ 213 $ 225 $ (12) (5.4)% Net interest (30) (26
Slide 17: P&L Summary (Adjusted) Year to date: 2023 Vs. 2022
P&L Summary (Adjusted) Year to date: 2023 Vs. 2022 (Dollars in millions) Better / (Worse) 2023 2022 $ % Net sales $ 5,145 $ 5,575 $ (430) (7.7)% Gross profit 1,086 1,184 (98) (8.3)% SG&A Expenses, net of Other Income (449) (448) (1) (0.3) % Operating Profit $ 637 $ 736 $ (99) (13.4)% Net interest (9
Slide 18: Balance Sheet
Balance Sheet (Dollars in millions) 10/1/2023 12/31/2022 Change $ Cash and cash equivalents $ 258 $ 227 $ 31 Trade accounts receivable, net of allowances 964 863 101 Other receivables 101 99 2 Inventories 826 1,096 (270) Prepaid expenses 91 76 15 Current Assets $ 2,240 $ 2,361 $ (121) Property, plan
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