Sonoco Products Company, one of the largest sustainable global packaging companies, reported financial results for its Q1 ended March 31, 2024.
Net sales decreased 5% to $1.6 billion driven by lower pricing and the treatment of recycling operations as a procurement function beginning January 1, 2024; volumes remained flat as lower volumes offset the benefit of acquisitions.
GAAP operating profit decreased to $112 million primarily due to the absence of gains ($72 million) recognized in Q1 2023 related to the sales of the Company’s timberland properties and Sonoco Sustainability Solutions; lower volumes and price/cost were partially offset by higher productivity.
Q1 2024 Adjusted Earnings decreased to $111 million resulting in Adjusted EPS (diluted) of $1.12.
Sonoco achieved net income of $65 million, Adjusted EBITDA of $245 million, diluted earnings per share of $0.66 and diluted Adjusted earnings per share of $1.12; higher productivity of $51 million partially offset price/cost pressures and lower volumes.
Q1 2024 Adjusted operating profit and Adjusted EBITDA decreased to $176 million and $245 million, respectively, due to lower volumes in the Consumer Packaging segment and unfavorable price/cost in the Industrial Packaging segment, which were partially offset by higher productivity across the portfolio
“Sonoco delivered Q1 results in line with our expectations”, said Sonoco’s President and CEO, Howard Coker. “While the overall demand environment remains muted and price/cost headwinds persist, focused execution and operating discipline delivered $51 million of productivity from value creating capital investments and business simplification initiatives over the past several years. On the strategic front, we continued to make notable progress on portfolio alignment with the sale of our Protective Solutions business, integration of our flexibles and thermoformed businesses, and strengthening our strategic pipeline of both organic and inorganic investment opportunities.”
Commenting on the Company’s outlook, Coker said, “At the midpoint of Q2 2024 guidance, we expect sequential adjusted earnings per share improvement of 16% over Q1 results from increased sales in metal packaging and trade paper and continued strong productivity across all businesses. We will continue to make progress on our portfolio simplification efforts while remaining focused on financial discipline and returning capital to our shareholders.”
Founded in 1899, Sonoco is a global provider of packaging products.
