By the numbers: Q4 and full-year 2024
Q4 net sales: $1.36B
Up 2% year over year
Full-year net sales: $5.31B
Down 2.5% year over year
Consumer packaging Q4 net sales: $705M
Up 18.1% year over year
Consumer packaging full-year net sales: $2.53B
Up 2.5% year over year
- Overview: 2024 was a “milestone year” for Sonoco, largely due to its acquisition of metal packaging producer Eviosys in December, said CEO Howard Coker on Wednesday’s earnings call. Teams are “deep in the process” of that integration. Another transformative move is Sonoco’s pending sale of its thermoformed and flexible packaging business to Toppan Holdings for $1.8 billion, which is on track for completion in Q2. Sonoco also completed its previously announced exit from industrial operations in China.
- Reworked strategy: The company made “significant progress” on its restructuring strategy introduced last year to create four core business units, said interim CFO Jerry Cheatham; he replaces Rob Dillard, who left the company last month. The emphasis on fewer, bigger businesses “will enable more focused investments,” he said. Executives anticipate growth in metal packaging and rigid paper containers in 2025, following a strong Q4 2024. Additionally, an intense flu season drove consumer demand for disinfectants, which provided a bump to the aerosol can segment.
- Weather impacts: Sonoco’s operations took a hit from two major storms in late 2024, Hurricanes Helene and Milton, Coker explained. Milton destroyed the roof at the company’s largest thermoforming facility, located in Florida, which resulted in weeks of downtime. “Our employees went above and beyond to minimize downtime caused by the storms, while at the same time taking time to volunteer in their communities to help with clean-up and recovery efforts,” Coker said.
- Eviosys acquisition: While Sonoco anticipated realizing most of the synergies from the Eviosys acquisition in the first year, it did not expect a U.K. regulator to take a “deep dive into this,” which pushed the deal close farther into Q4 than first anticipated, Coker said. The December deal close “really put us on our heels in terms of negotiating annual contracts with our major suppliers,” he said. Now the company estimates that about a third of the synergies will occur in 2025, with the rest coming in 2026, Coker said.
- ThermoSafe sale: Sonoco is still looking to sell ThermoSafe, its temperature-assured packaging business, at some point this year, confirmed Chief Operating Officer Rodger Fuller. ThermoSafe’s sales volumes were soft in Q4, he said. Specifically, he explained the influence in 2024 of the tight market for GLP-1 drugs that could be shipped to medical facilities. However, “they’re now shipping direct-to-consumer, and that will positively impact our ThermoSafe business” in 2025, Fuller said.
- Investments: Sonoco continues to invest in facilities in its key business areas, such as metal packaging and rigid paper containers, including in the United States, Mexico and Thailand, Coker said. The Thailand greenfield site will be one of the world’s largest paper can production sites when it is completed in the next couple years, he said.
- Outlook: The company projects sales of $7.75 billion to $8 billion in 2025, with year-over-year sales growth of about 21.5%, primarily due to the Eviosys acquisition. The company expects low single-digit sales volume growth in the industrial segment and a mix of growth and declines for the other businesses. It targets $360 million in capital expenditures for the year and expects to have free cash flow of $450 million to $550 million.
