Sonoco Products Company (“Sonoco” or the “Company”) (NYSE: SON),
one of the largest sustainable global packaging companies, today
reported financial results for its fourth quarter and fiscal year
ended December 31, 2023.
Summary
- Achieved second best full year
results for Adjusted EPS in the Company’s 125-year history
- Generated a record $883 million of
operating cash flow and $600 million of Free Cash Flow in the full
year of 2023
- Invested a record level of capital
in the business for future growth and productivity
- Achieved record results in
Operating Profit and Adjusted EBITDA in flexible packaging and
record net sales in rigid paper containers in the Consumer
Packaging (“Consumer”) segment
- Produced record Operating Profit
margins and Adjusted EBITDA margins in Industrial Paper Packaging
(“Industrial”) segment despite a low volume environment
- Expanded the Company’s flexible
packaging capabilities with the acquisition of Inapel Embalagens
Ltda. in Brazil
- Made further progress on strategic
priorities including portfolio simplification, organic growth
investments, and Environmental, Social, and Governance
commitments
- Solid fourth quarter operating
results driven by strong productivity offset by higher employee
expenses, healthcare, and accounts receivable reserve
- Effective January 1, 2024, we
integrated the flexible packaging and thermoforming packaging
businesses within the Consumer segment to streamline operations,
enhance customer service, and better position the business to
accelerate growth
Fourth Quarter and Year End 2023 Consolidated
Results |
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(Dollars in millions except per share data) |
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Three Months Ended |
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Twelve Months Ended |
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GAAP
Results |
December 31, 2023 |
December 31, 2022 |
|
Change |
|
December 31, 2023 |
December 31, 2022 |
Change |
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|
|
|
|
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|
|
Net sales |
$ |
1,636 |
$ |
1,676 |
|
(2 |
)% |
|
$ |
6,781 |
$ |
7,251 |
(6 |
)% |
|
Operating profit |
$ |
135 |
$ |
127 |
|
7 |
% |
|
$ |
716 |
$ |
675 |
6 |
% |
|
Net income attributable to
Sonoco |
$ |
81 |
$ |
97 |
|
(16 |
)% |
|
$ |
475 |
$ |
466 |
2 |
% |
|
EPS (diluted) |
$ |
0.82 |
$ |
0.98 |
|
(16 |
)% |
|
$ |
4.80 |
$ |
4.72 |
2 |
% |
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Three Months Ended |
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Twelve Months Ended |
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Non-GAAP Results(1) |
December 31, 2023 |
December 31, 2022 |
|
Change |
|
December 31, 2023 |
December 31, 2022 |
Change |
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|
|
|
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|
|
Adjusted operating profit |
$ |
167 |
$ |
184 |
|
(9 |
)% |
|
$ |
804 |
$ |
920 |
(13 |
)% |
|
Adjusted EBITDA |
$ |
236 |
$ |
246 |
|
(4 |
)% |
|
$ |
1,067 |
$ |
1,162 |
(8 |
)% |
|
Adjusted net income
attributable to Sonoco (“Adjusted Earnings”) |
$ |
101 |
$ |
125 |
|
(19 |
)% |
|
$ |
520 |
$ |
639 |
(19 |
)% |
|
Adjusted EPS (diluted) |
$ |
1.02 |
$ |
1.27 |
|
(20 |
)% |
|
$ |
5.26 |
$ |
6.48 |
(19 |
)% |
(1) See the Company’s definitions of non-GAAP
financial measures, explanations as to why they are used, and
reconciliations to the most directly comparable GAAP financial
measures later in this release.
Q4-23 (versus Q4-22):
- Net sales decreased 2% to $1.6
billion driven by lower volumes and pricing
- GAAP operating profit increased to
$135 million due to lower acquisition and restructuring costs,
favorable productivity, and revenue from acquisitions
- Effective tax rates on GAAP and
Adjusted Earnings were 21.7% and 25.7%, respectively, in Q4 2023
compared to 1.9% and 21.3%, respectively, in Q4 2022
- GAAP net income decreased to $81
million for GAAP EPS (diluted) of $0.82
- Adjusted Earnings decreased to $101
million for Adjusted EPS (diluted) of $1.02
- Adjusted operating profit and
Adjusted EBITDA decreased to $167 million and $236 million,
respectively, due to lower volumes across the portfolio,
unfavorable price/cost in Industrial, higher employee expenses, and
higher accounts receivable reserve, which were partially offset by
higher productivity and favorable price/cost in Consumer
2023 (versus 2022):
- Net sales decreased 6%
year-over-year to $6.8 billion driven by lower volumes across the
portfolio, partially offset by revenue from acquisitions
- GAAP operating profit increased to
$716 million due to gains on divestitures and asset sales, lower
acquisition and restructuring costs, favorable productivity, and
revenue from acquisitions
- Effective tax rates on GAAP and
Adjusted Earnings for the full year 2023 were 24.3% and 24.6%,
respectively, compared with 20.7% and 23.9%, respectively, in the
prior year
- Net income margin was 7.0% and
Adjusted EBITDA margin was 15.7% in 2023, compared with 6.4% and
16.0% in 2022, respectively
- GAAP net income increased to $475
million for GAAP EPS (diluted) of $4.80
- Adjusted Earnings decreased to $520
million for Adjusted EPS (diluted) of $5.26
- Adjusted operating profit decreased
to $804 million as lower overall volumes and unfavorable metal
price overlap were partially offset by favorable productivity and
revenue from acquisitions
“In 2023, Sonoco made further progress on our
strategic initiatives and delivered solid financial results in a
challenging macroeconomic environment,” said Howard Coker,
President and Chief Executive Officer. “We achieved the second best
year of financial results in our 125-year history. Our multi-year
focus on improving and leveraging the operating model combined with
our capital allocation strategy resulted in record productivity. We
advanced our strategy by strengthening our portfolio with the
addition of accretive acquisitions in our core businesses, and
successfully divesting non-core assets.”
Coker continued, “We generated record annual
operating cash flow of $883 million and free cash flow of over $600
million. We remained focused on disciplined capital allocation and
a strong balance sheet, and were pleased to increase our annual
dividend for the 40th straight year. I am extremely proud of the
hard-working Sonoco team members who remain focused on delivering
value for our customers and executing initiatives to support the
Company’s continued success in the future.”
Fourth Quarter and Year End 2023 Segment
Results(Dollars in millions except per share data)
Sonoco reports its financial results in two reportable segments:
Consumer and Industrial, with all remaining businesses reported as
All Other.
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|
Three Months Ended |
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|
Twelve Months Ended |
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|
Consumer Packaging |
December 31, 2023 |
|
December 31, 2022 |
Change |
|
December 31, 2023 |
|
December 31, 2022 |
Change |
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|
|
|
|
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|
Net sales |
$ |
856 |
|
|
$ |
879 |
|
(3 |
)% |
|
$ |
3,627 |
|
|
$ |
3,768 |
|
(4)% |
|
Segment operating profit |
$ |
83 |
|
|
$ |
85 |
|
(3 |
)% |
|
$ |
382 |
|
|
$ |
526 |
|
(27)% |
|
Segment operating profit
margin |
|
10 |
% |
|
|
10 |
% |
|
|
|
11 |
% |
|
|
14 |
% |
|
|
Segment Adjusted EBITDA1 |
$ |
116 |
|
|
$ |
114 |
|
2 |
% |
|
$ |
507 |
|
|
$ |
638 |
|
(21)% |
|
Segment Adjusted EBITDA
margin1 |
|
14 |
% |
|
|
13 |
% |
|
|
|
14 |
% |
|
|
17 |
% |
|
Q4-23 (versus Q4-22):
- Consumer net sales were $856
million as volumes continued to be impacted by lower consumer
purchases for food and household products from inflationary pricing
impacts
- Consumer operating profit decreased
to $83 million due to lower volumes and higher accounts receivable
reserve, which were partially offset by strong productivity and
strategic pricing initiatives
2023 (versus 2022):
- Consumer net sales were $3.6
billion, down 4% year over year, primarily due to the previously
mentioned inflationary pricing impacts on volumes and volume
declines from customer retail destocking throughout the year
- Full year segment operating profit
decreased to $382 million due to unfavorable volume/mix and metal
price overlap of $35 million (which was a full year $105 million
year-over-year difference), which was partially offset by improved
productivity
|
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Three Months Ended |
|
|
Twelve Months Ended |
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|
Industrial Paper Packaging |
December 31, 2023 |
|
December 31, 2022 |
Change |
|
December 31, 2023 |
|
December 31, 2022 |
Change |
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|
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|
|
|
|
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|
|
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|
Net sales |
$ |
593 |
|
|
$ |
597 |
|
(1)% |
|
$ |
2,374 |
|
|
$ |
2,685 |
|
(12 |
)% |
|
Segment operating profit |
$ |
62 |
|
|
$ |
79 |
|
(22)% |
|
$ |
318 |
|
|
$ |
328 |
|
(3 |
)% |
|
Segment operating profit
margin |
|
10 |
% |
|
|
13 |
% |
|
|
|
13 |
% |
|
|
12 |
% |
|
|
Segment Adjusted EBITDA1 |
$ |
91 |
|
|
$ |
106 |
|
(14)% |
|
$ |
432 |
|
|
$ |
434 |
|
— |
% |
|
Segment Adjusted EBITDA
margin1 |
|
15 |
% |
|
|
18 |
% |
|
|
|
18 |
% |
|
|
16 |
% |
|
Q4-23 (versus Q4-22):
- Industrial net sales decreased 1%
to $593 million due to unfavorable volume/mix, weakness in global
demand for converted paper products and lower pricing, which was
partially offset by higher demand in paper and revenue from
acquisitions
- Continued low volumes and
price/cost pressures were partially offset by improved productivity
which resulted in an operating profit margin of 10% and Adjusted
EBITDA margin of 15%
2023 (versus
2022):
- Industrial sales decreased 12% to
$2.4 billion due to unfavorable volume and index-related pricing
declines
- Segment operating profit margin and
Segment Adjusted EBITDA margin increased to 13% and 18%,
respectively, primarily due to the first half 2023 benefits of
higher pricing and lower costs
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
All Other |
December 31, 2023 |
|
December 31, 2022 |
Change |
|
December 31, 2023 |
|
December 31, 2022 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
187 |
|
|
$ |
200 |
|
(7 |
)% |
|
$ |
780 |
|
|
$ |
798 |
|
(2 |
)% |
|
Operating profit |
$ |
22 |
|
|
$ |
20 |
|
14 |
% |
|
$ |
104 |
|
|
$ |
66 |
|
57 |
% |
|
Operating profit margin |
|
12 |
% |
|
|
10 |
% |
|
|
|
13 |
% |
|
|
8 |
% |
|
|
Adjusted EBITDA1 |
$ |
28 |
|
|
$ |
26 |
|
10 |
% |
|
$ |
128 |
|
|
$ |
91 |
|
41 |
% |
|
Adjusted EBITDA margin1 |
|
15 |
% |
|
|
13 |
% |
|
|
|
16 |
% |
|
|
11 |
% |
|
Q4-23 (versus Q4-22):
- Net sales declined 7% due to lower
volumes, primarily in temperature assured packaging as
COVID-related demand declined
- Operating profit and Adjusted
EBITDA improved by 14% and 10%, respectively, primarily due to
positive strategic pricing and strong productivity, partially
offset by lower volume
2023 (versus
2022):
- Net sales declined 2% primarily due
to lower volumes
- Operating profit and Adjusted
EBITDA improved by 57% and 41%, respectively, primarily due to
ongoing structural improvement programs to improve profitability
across this diversified collection of businesses, favorable
strategic pricing initiatives, and strong productivity
1Segment and All Other Adjusted EBITDA and
Adjusted EBITDA margin are non-GAAP financial measures. See the
Company’s reconciliations of these non-GAAP financial measures to
the most directly comparable GAAP financial measures later in this
release.
Balance Sheet and Cash Flow
Highlights
- Cash and cash equivalents were $152
million as of December 31, 2023, compared to $227 million as
of December 31, 2022.
- Total debt was $3.1 billion as of
December 31, 2023, a decrease of $139 million from December 31,
2022.
- On December 31, 2023, the
Company had available liquidity of $1.1 billion, including the
undrawn availability under its revolving credit facility.
- Cash flow from operating activities
for the year ended 2023 was $883 million, compared to $509 million
in the same period of 2022.
- Capital expenditures, net of
proceeds from sales of fixed assets, for 2023 were $283 million,
compared to $319 million for the same period last year. Capital
expenditures were $363 million and net proceeds from the sale of
our timberland properties were $80 million in 2023.
- Free Cash Flow in 2023 was $600
million compared to $190 million in 2022. See the Company’s
definition of Free Cash Flow, the explanation as to why it is used,
and the reconciliation to net cash provided by operating activities
later in this release.
- Dividends paid during the fiscal
year ended December 31, 2023 increased to $197 million
compared to $187 million for the prior fiscal year.
Guidance(1)
First Quarter
2024
- Adjusted EPS(2):
$1.05 to $1.15
Full Year 2024
- Adjusted EPS(2):
$5.10 to $5.40
- Cash flow from operating
activities: $650 million to $750 million
- Adjusted EBITDA: $1.05 billion to
$1.10 billion
Sonoco’s President and CEO, Howard Coker stated,
“In the first quarter of 2024, we expect volumes to be down over
the prior year period. We also expect negative price/cost from
metal price overlap and from the year-over-year Industrial
comparable. For the full year, we are expecting overall sales to be
up modestly and price/cost impacts to be negative, in each case
compared to the prior year period. We intend to continue to
aggressively manage costs and generate positive productivity while
we navigate global volume uncertainties. We remain focused on
executing strategic initiatives to simplify our portfolio and
capture synergies from our recent acquisitions to advance Sonoco
through 2024 and beyond. We look forward to providing further
updates in our Investor Day, which is planned for February 22,
2024.”
(1) Although the Company believes the
assumptions reflected in the range of guidance are reasonable,
given the uncertainty regarding the future performance of the
overall economy, the effects of inflation, the continued challenges
in global supply chains, potential changes in raw material prices,
other costs, and the Company’s effective tax rate, as well as other
risks and uncertainties, including those described below, actual
results could vary substantially. Further information can be found
in the section entitled “Forward-looking Statements” in this
release.
(2) First quarter and full year 2024 GAAP
guidance are not provided in this release due to the likely
occurrence of one or more of the following, the timing and
magnitude of which we are unable to reliably forecast without
unreasonable efforts: restructuring costs and restructuring-related
impairment charges, acquisition/divestiture-related costs, gains or
losses on the sale of businesses or other, and the income tax
effects of these items and/or other income tax-related events.
These items could have a significant impact on the Company’s future
GAAP financial results. Accordingly, a quantitative reconciliation
of Adjusted EPS guidance has been omitted in reliance on the
exception provided by Item 10 of Regulation
S-K.
Effective January 1, 2024, the Company will
integrate its flexible packaging and thermoforming packaging
businesses within the Consumer segment in order to streamline
operations, enhance customer service, and better position the
business for accelerated growth. As a result, the Company will
change its operating and reporting structure to reflect the way it
plans to manage its operations, evaluate performance, and allocate
resources going forward. Therefore, in future reporting periods,
the Company’s consumer thermoforming businesses will move from the
All Other group of businesses to the Consumer segment. The
Company’s Industrial segment will not be affected by these changes.
As of, and for the year ended December 31, 2023, there were no
changes to the manner in which the Company reviewed financial
information at the segment level; therefore, these changes had no
impact on our reporting structure.
Conference Call
WebcastManagement will host a conference call and webcast
to further discuss these results beginning at 8:30 am EDT,
Thursday, February 15, 2024. The live conference call and a
corresponding presentation can be accessed via the Company’s
Investor Relations website at https://investor.sonoco.com. To
listen via telephone, please register in advance at
https://edge.media-server.com/mmc/p/owncumwd/. Upon registration,
all telephone participants will receive the dial-in number along
with a unique PIN number that can be used to access the call. A
replay of the conference call and webcast will be archived on the
Company’s Investor Relations website for at least 30 days.
Contact Information: Lisa
WeeksVice President of Investor Relations &
Communicationslisa.weeks@sonoco.com 843-383-7524
About SonocoFounded in 1899,
Sonoco (NYSE:SON) is a global provider of packaging products. With
net sales of approximately $6.8 billion in 2023, the Company has
approximately 22,000 employees working in more than 310 operations
around the world, serving some of the world’s best-known brands.
With our corporate purpose of Better Packaging. Better Life.,
Sonoco is committed to creating sustainable products, and a better
world, for our customers, employees and communities. The Company
ranked first in the Packaging sector on Fortune’s World’s Most
Admired Companies for 2022 and was also included in Barron’s 100
Most Sustainable Companies for the fourth consecutive year. For
more information on the Company, visit our website at
www.sonoco.com.
Forward-looking
StatementsStatements 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
amended. In addition, the Company and its representatives may from
time to time make other oral or written statements that are also
“forward-looking statements.” Words such as “anticipate,” “assume,”
“believe,” “committed,” “continue,” “could,” “estimate,” “expect,”
“focused,” “forecast,” “future,” “goal,” “guidance,” “likely,”
“may,” “might,” “objective,” “ongoing,” “outlook,” “plan,”
“potential,” “project,” “seek,” “strategy,” “will,” or the negative
thereof, and similar expressions identify forward-looking
statements.
Forward-looking statements in this communication
include statements regarding, but not limited to: the Company’s
future operating and financial performance, including first quarter
and full year 2024 outlook and the anticipated drivers thereof; the
Company’s ability to support its customers and manage costs;
opportunities for productivity and other operational improvements;
pricing, customer demand and volume outlook; expected benefits from
and integration efforts related to acquisitions and divestitures;
the effectiveness of the Company’s strategy and strategic
initiatives, including with respect to portfolio simplification and
capital allocation priorities; the effects of the macroeconomic
environment and inflation on the Company and its customers; and the
Company’s ability to generate continued value for customers and
shareholders.
Such forward-looking statements are based on
current expectations, estimates and projections about our industry,
management’s beliefs and certain assumptions made by management.
Such information includes, without limitation, discussions as to
guidance and other estimates, perceived opportunities,
expectations, beliefs, plans, strategies, goals and objectives
concerning our future financial and operating performance. These
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict.
Therefore, actual results may differ materially
from those expressed or forecasted in such forward-looking
statements.
Such risks, uncertainties and assumptions
include, without limitation, those related to: the Company’s
ability to execute on its strategy, including with respect to
acquisitions (and integrations thereof), divestitures, cost
management, productivity improvements, restructuring and capital
expenditures, and achieve the benefits it expects therefrom; the
operation of new manufacturing capabilities; the Company’s ability
to achieve anticipated cost and energy savings; the availability,
transportation and pricing of raw materials, energy and
transportation, including the impact of potential changes in
tariffs or sanctions and escalating trade wars, and the impact of
war, general regional instability and other geopolitical tensions
(such as the ongoing conflict between Russia and Ukraine as well as
the economic sanctions related thereto, and the ongoing conflict in
Israel and Gaza), and the Company’s ability to pass raw material,
energy and transportation price increases and surcharges through to
customers or otherwise manage these commodity pricing risks; the
costs of labor; the effects of inflation, fluctuations in consumer
demand, volume softness, and other macroeconomic factors on the
Company and the industries in which it operates and that it serves;
the Company’s ability to meet its environmental and sustainability
goals, including with respect to greenhouse gas emissions; and to
meet other social and governance goals, including challenges in
implementation; and the other risks, uncertainties and assumptions
discussed in the Company’s filings with the Securities and Exchange
Commission, including its most recent reports on Forms 10-K and
10-Q, particularly under the heading “Risk Factors.” The Company
undertakes no obligation to publicly update or revise
forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward-looking events discussed herein might
not occur.
References to our Website
Address
References to our website address and domain
names throughout this release are for informational purposes only,
or to fulfill specific disclosure requirements of the Securities
and Exchange Commission’s rules or the New York Stock Exchange
Listing Standards. These references are not intended to, and do
not, incorporate the contents of our website by reference into this
release.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) |
(Dollars and shares in thousands except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
1,635,800 |
|
|
$ |
1,676,022 |
|
$ |
6,781,292 |
|
|
$ |
7,250,552 |
|
Cost of sales |
|
1,296,148 |
|
|
|
1,362,085 |
|
|
5,345,638 |
|
|
|
5,810,903 |
|
Gross profit |
|
339,652 |
|
|
|
313,937 |
|
|
1,435,654 |
|
|
|
1,439,649 |
|
Selling, general,
and administrative expenses |
|
200,439 |
|
|
|
173,466 |
|
|
741,860 |
|
|
|
707,343 |
|
Restructuring/Asset impairment charges |
|
3,952 |
|
|
|
13,553 |
|
|
56,933 |
|
|
|
56,910 |
|
Gain on
divestiture of business and other assets |
|
85 |
|
|
|
— |
|
|
78,929 |
|
|
|
— |
|
Operating
profit |
|
135,346 |
|
|
|
126,918 |
|
|
715,790 |
|
|
|
675,396 |
|
Other income,
net |
|
2,714 |
|
|
|
— |
|
|
39,657 |
|
|
|
— |
|
Non-operating
pension costs |
|
3,888 |
|
|
|
2,822 |
|
|
14,312 |
|
|
|
7,073 |
|
Net interest
expense |
|
31,619 |
|
|
|
29,250 |
|
|
126,303 |
|
|
|
97,041 |
|
Income before
income taxes |
|
102,553 |
|
|
|
94,846 |
|
|
614,832 |
|
|
|
571,282 |
|
Provision for
income taxes |
|
22,275 |
|
|
|
1,797 |
|
|
149,278 |
|
|
|
118,509 |
|
Income before
equity in earnings of affiliates |
|
80,278 |
|
|
|
93,049 |
|
|
465,554 |
|
|
|
452,773 |
|
Equity in earnings
of affiliates, net of tax |
|
1,552 |
|
|
|
4,056 |
|
|
10,347 |
|
|
|
14,207 |
|
Net income |
|
81,830 |
|
|
|
97,105 |
|
|
475,901 |
|
|
|
466,980 |
|
Net loss (income)
attributable to noncontrolling interests |
|
(588 |
) |
|
|
99 |
|
|
(942 |
) |
|
|
(543 |
) |
Net income
attributable to Sonoco |
$ |
81,242 |
|
|
$ |
97,204 |
|
$ |
474,959 |
|
|
$ |
466,437 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – diluted |
|
99,164 |
|
|
|
98,922 |
|
|
98,890 |
|
|
|
98,732 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per common share |
$ |
0.82 |
|
|
$ |
0.98 |
|
$ |
4.80 |
|
|
$ |
4.72 |
|
Dividends per
common share |
$ |
0.51 |
|
|
$ |
0.49 |
|
$ |
2.02 |
|
|
$ |
1.92 |
|
|
FINANCIAL SEGMENT INFORMATION (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Net sales: |
|
|
|
|
|
|
|
|
Consumer Packaging |
$ |
855,687 |
|
|
$ |
879,326 |
|
|
$ |
3,626,977 |
|
|
$ |
3,767,956 |
|
|
Industrial Paper
Packaging |
|
593,080 |
|
|
|
596,582 |
|
|
|
2,374,113 |
|
|
|
2,684,563 |
|
|
All Other |
|
187,033 |
|
|
|
200,114 |
|
|
|
780,202 |
|
|
|
798,033 |
|
|
Net sales |
$ |
1,635,800 |
|
|
$ |
1,676,022 |
|
|
$ |
6,781,292 |
|
|
$ |
7,250,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit: |
|
|
|
|
|
|
|
|
Consumer
Packaging |
$ |
82,979 |
|
|
$ |
85,139 |
|
|
$ |
382,063 |
|
|
$ |
526,028 |
|
|
Industrial Paper
Packaging |
|
61,504 |
|
|
|
79,139 |
|
|
|
317,917 |
|
|
|
327,859 |
|
|
All Other |
|
22,336 |
|
|
|
19,551 |
|
|
|
103,745 |
|
|
|
65,978 |
|
|
Corporate |
|
|
|
|
|
|
|
|
Restructuring/Asset impairment charges |
|
(3,952 |
) |
|
|
(13,553 |
) |
|
|
(56,933 |
) |
|
|
(56,910 |
) |
|
Amortization of acquisition intangibles |
|
(24,182 |
) |
|
|
(20,065 |
) |
|
|
(87,264 |
) |
|
|
(80,427 |
) |
|
Other operating income/(charges), net |
|
(3,339 |
) |
|
|
(23,293 |
) |
|
|
56,262 |
|
|
|
(107,132 |
) |
|
Operating profit |
$ |
135,346 |
|
|
$ |
126,918 |
|
|
$ |
715,790 |
|
|
$ |
675,396 |
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
Net income |
$ |
475,901 |
|
|
$ |
466,980 |
|
Net (gains)/losses
on asset impairments, disposition of assets and divestiture of
business and other assets |
|
(96,606 |
) |
|
|
15,465 |
|
Depreciation,
depletion and amortization |
|
340,988 |
|
|
|
308,824 |
|
Pension and
postretirement plan (contributions), net of non-cash expense |
|
2,798 |
|
|
|
(26,712 |
) |
Changes in working
capital |
|
218,807 |
|
|
|
(328,719 |
) |
Changes in tax
accounts |
|
(40,495 |
) |
|
|
(4,372 |
) |
Other operating
activity |
|
(18,475 |
) |
|
|
77,583 |
|
Net cash
provided by operating activities |
|
882,918 |
|
|
|
509,049 |
|
|
|
|
|
|
|
Purchases of
property, plant and equipment, net |
|
(282,738 |
) |
|
|
(319,148 |
) |
Proceeds from the
sale of business, net |
|
33,237 |
|
|
|
— |
|
Cost of
acquisitions, net of cash acquired |
|
(372,616 |
) |
|
|
(1,427,020 |
) |
Net debt
(repayments)/ borrowings |
|
(150,360 |
) |
|
|
1,518,844 |
|
Cash
dividends |
|
(197,416 |
) |
|
|
(187,093 |
) |
Payments for share
repurchases |
|
(10,617 |
) |
|
|
(4,547 |
) |
Other, including
effects of exchange rates on cash |
|
22,091 |
|
|
|
(19,151 |
) |
Purchase of
noncontrolling interest |
|
— |
|
|
|
(14,474 |
) |
Net increase in
cash and cash equivalents |
|
(75,501 |
) |
|
|
56,460 |
|
Cash and cash
equivalents at beginning of period |
|
227,438 |
|
|
|
170,978 |
|
Cash and cash
equivalents at end of period |
$ |
151,937 |
|
|
$ |
227,438 |
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
(Dollars in thousands) |
|
|
|
December 31, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current
Assets: |
|
|
|
|
Cash and cash
equivalents |
$ |
151,937 |
|
|
$ |
227,438 |
|
|
Trade accounts
receivable, net of allowances |
|
904,898 |
|
|
|
862,712 |
|
|
Other
receivables |
|
106,644 |
|
|
|
99,492 |
|
|
Inventories |
|
773,501 |
|
|
|
1,095,558 |
|
|
Prepaid
expenses |
|
113,385 |
|
|
|
76,054 |
|
|
|
|
|
2,050,365 |
|
|
|
2,361,254 |
|
Property, plant
and equipment, net |
|
1,906,137 |
|
|
|
1,710,399 |
|
Right of use
asset-operating leases |
|
314,944 |
|
|
|
296,781 |
|
Goodwill |
|
1,810,654 |
|
|
|
1,675,311 |
|
Other intangible
assets, net |
|
853,670 |
|
|
|
741,598 |
|
Other assets |
|
256,187 |
|
|
|
267,597 |
|
|
|
|
$ |
7,191,957 |
|
|
$ |
7,052,940 |
|
Liabilities and Shareholders’ Equity |
|
|
|
Current
Liabilities: |
|
|
|
|
Payable to
suppliers and other payables |
$ |
1,107,504 |
|
|
$ |
1,224,556 |
|
|
Notes payable and
current portion of long-term debt |
|
47,132 |
|
|
|
502,440 |
|
|
Accrued taxes |
|
10,641 |
|
|
|
16,905 |
|
|
|
|
|
1,165,277 |
|
|
|
1,743,901 |
|
Long-term debt,
net of current portion |
|
3,035,868 |
|
|
|
2,719,783 |
|
Noncurrent
operating lease liabilities |
|
265,454 |
|
|
|
250,994 |
|
Pension and other
postretirement benefits |
|
142,900 |
|
|
|
120,084 |
|
Deferred income
taxes and other |
|
150,623 |
|
|
|
145,381 |
|
Total equity |
|
2,431,835 |
|
|
|
2,072,797 |
|
|
|
|
$ |
7,191,957 |
|
|
$ |
7,052,940 |
|
|
|
Definition and Reconciliation of Non-GAAP Financial
Measures
The Company’s results determined in accordance
with U.S. generally accepted accounting principles (“GAAP”) are
referred to as “as reported” or “GAAP” results. The Company uses
certain financial performance measures, both internally and
externally, that are not in conformity with GAAP (“non-GAAP
financial measures”) to assess and communicate the financial
performance of the Company. These non-GAAP financial measures
reflect the Company’s GAAP operating results adjusted to remove
amounts (including the associated tax effects) relating to:
- restructuring/asset impairment
charges1;
- acquisition, integration, and divestiture-related costs;
- gains or losses from the divestiture of businesses and other
assets;
- losses from the early extinguishment of debt;
- non-operating pension costs;
- amortization expense on acquisition intangibles;
- changes in last-in, first-out (“LIFO”) inventory reserves;
- certain income tax events and adjustments;
- derivative gains/losses;
- other non-operating income and losses; and
- certain other items, if any.
1 Restructuring and restructuring-related asset
impairment charges are a recurring item as the Company’s
restructuring programs usually require several years to fully
implement and the Company is continually seeking to take actions
that could enhance its efficiency. Although recurring, these
charges are subject to significant fluctuations from period to
period due to the varying levels of restructuring activity, the
inherent imprecision in the estimates used to recognize the
impairment of assets, and the wide variety of costs and taxes
associated with severance and termination benefits in the countries
in which the restructuring actions occur.
The Company’s management believes the exclusion
of the amounts related to above-listed items improves the
period-to-period comparability and analysis of the underlying
financial performance of the business. Non-GAAP figures previously
identified by the term “Base” are now identified using the term
“Adjusted,” for example “Adjusted Operating Profit,” “Adjusted Net
Income” (referred to as “Adjusted Earnings”), and Adjusted Diluted
Earnings Per Share (referred to as “Adjusted EPS)”.
In addition to the “Adjusted” results described
above, the Company also uses Adjusted EBITDA and Adjusted EBITDA
Margin. Adjusted EBITDA is defined as net income excluding the
following: interest expense; interest income; provision for income
taxes; depreciation, depletion and amortization expense;
non-operating pension costs; net income attributable to
noncontrolling interests; restructuring/asset impairment charges;
changes in LIFO inventory reserves; gains/losses from the
divestiture of businesses and other assets; other income;
acquisition, integration and divestiture-related costs; derivative
gains/losses; and other non-GAAP adjustments, if any, that may
arise from time to time. Adjusted EBITDA Margin is defined as
Adjusted EBITDA divided by net sales.
The Company’s non-GAAP financial measures are
not calculated in accordance with, nor are they an alternative for,
measures conforming to GAAP, and they may be different from
non-GAAP financial measures used by other companies. In addition,
these non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles.
The Company presents these non-GAAP financial
measures to provide investors with information to evaluate Sonoco’s
operating results in a manner similar to how management evaluates
business performance. The Company consistently applies its non-GAAP
financial measures presented herein and uses them for internal
planning and forecasting purposes, to evaluate its ongoing
operations, and to evaluate the ultimate performance of management
and each business unit against plans/forecasts. In addition, these
same non-GAAP financial measures are used in determining incentive
compensation for the entire management team and in providing
earnings guidance to the investing community.
Material limitations associated with the use of
such measures include that they do not reflect all period costs
included in operating expenses and may not be comparable with
similarly named financial measures of other companies. Furthermore,
the calculations of these non-GAAP financial measures are based on
subjective determinations of management regarding the nature and
classification of events and circumstances that the investor may
find material and view differently.
To compensate for any limitations in such
non-GAAP financial measures, management believes that it is useful
in evaluating the Company’s results to review both GAAP
information, which includes all of the items impacting financial
results, and the related non-GAAP financial measures that exclude
certain elements, as described above. Further, Sonoco management
does not, nor does it suggest that investors should, consider any
non-GAAP financial measures in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP.
Whenever reviewing a non-GAAP financial measure, investors are
encouraged to review the related reconciliation to understand how
it differs from the most directly comparable GAAP measure.
Whenever Sonoco uses a non-GAAP financial
measure it provides a reconciliation of the non-GAAP financial
measure to the most directly comparable GAAP financial measure.
Investors are encouraged to review and consider these
reconciliations.
The following tables reconcile the Company’s non-GAAP financial
measures to their most directly comparable GAAP financial measures
for each of the periods presented:
Adjusted Operating Profit, Adjusted
Income Before Income Taxes, Adjusted Provision for Income Taxes,
Adjusted Earnings Attributable to Sonoco, and Adjusted
EPS
|
For the three-month period ended December 31,
2023 |
Dollars in thousands,
except per share data |
Operating Profit |
Income Before Income Taxes |
Provision for Income Taxes |
Net Income Attributable to Sonoco |
Diluted EPS |
As Reported (GAAP) |
$ |
135,346 |
|
$ |
102,553 |
|
$ |
22,275 |
|
$ |
81,242 |
|
$ |
0.82 |
|
Acquisition, integration and divestiture-related costs |
|
4,063 |
|
|
4,063 |
|
|
2,158 |
|
|
1,905 |
|
|
0.02 |
|
Changes in LIFO inventory reserves |
|
(1,631 |
) |
|
(1,631 |
) |
|
(414 |
) |
|
(1,217 |
) |
|
(0.01 |
) |
Amortization of acquisition intangibles |
|
24,182 |
|
|
24,182 |
|
|
6,207 |
|
|
17,975 |
|
|
0.18 |
|
Restructuring/Asset impairment charges |
|
3,952 |
|
|
3,952 |
|
|
576 |
|
|
3,378 |
|
|
0.03 |
|
Gain on divestiture of business and other assets |
|
(85 |
) |
|
(85 |
) |
|
(253 |
) |
|
168 |
|
|
— |
|
Other income, net |
|
— |
|
|
(2,714 |
) |
|
(694 |
) |
|
(2,020 |
) |
|
(0.02 |
) |
Non-operating pension costs |
|
— |
|
|
3,888 |
|
|
958 |
|
|
2,930 |
|
|
0.03 |
|
Net gain from derivatives |
|
(397 |
) |
|
(397 |
) |
|
(100 |
) |
|
(297 |
) |
|
— |
|
Other adjustments |
|
1,389 |
|
|
1,360 |
|
|
4,013 |
|
|
(2,653 |
) |
|
(0.03 |
) |
Total adjustments |
$ |
31,473 |
|
$ |
32,618 |
|
$ |
12,451 |
|
$ |
20,169 |
|
$ |
0.20 |
|
Adjusted |
$ |
166,819 |
|
$ |
135,171 |
|
$ |
34,726 |
|
$ |
101,411 |
|
$ |
1.02 |
|
Due to rounding,
individual items may not sum appropriately. |
|
|
|
|
|
For the three-month period ended December 31,
2022 |
Dollars in thousands,
except per share data |
Operating Profit |
Income Before Income Taxes |
Provision for Income Taxes |
Net Income Attributable to Sonoco |
Diluted EPS |
As Reported (GAAP) |
$ |
126,918 |
$ |
94,845 |
$ |
1,797 |
$ |
97,204 |
|
$ |
0.98 |
|
Acquisition, integration and divestiture-related costs |
|
7,555 |
|
7,555 |
|
2,110 |
|
5,445 |
|
|
0.06 |
|
Changes in LIFO inventory reserves |
|
3,357 |
|
3,357 |
|
687 |
|
2,670 |
|
|
0.03 |
|
Amortization of acquisition intangibles |
|
20,065 |
|
20,065 |
|
4,888 |
|
15,177 |
|
|
0.15 |
|
Restructuring/Asset impairment charges |
|
13,553 |
|
13,553 |
|
3,930 |
|
9,238 |
|
|
0.09 |
|
Non-operating pension costs |
|
— |
|
2,822 |
|
823 |
|
1,999 |
|
|
0.02 |
|
Net loss from derivatives |
|
11,083 |
|
11,083 |
|
2,761 |
|
8,322 |
|
|
0.08 |
|
Other adjustments |
|
1,299 |
|
1,299 |
|
15,911 |
|
(14,614 |
) |
|
(0.14 |
) |
Total adjustments |
$ |
56,912 |
$ |
59,734 |
$ |
31,110 |
$ |
28,237 |
|
$ |
0.29 |
|
Adjusted |
$ |
183,830 |
$ |
154,579 |
$ |
32,907 |
$ |
125,441 |
|
$ |
1.27 |
|
Due to rounding,
individual items may not sum appropriately. |
|
|
|
|
|
For the twelve-month period ended December 31,
2023 |
Dollars in thousands,
except per share data |
Operating Profit |
Income Before Income Taxes |
Provision for Income Taxes |
Net Income Attributable to Sonoco |
Diluted EPS |
As Reported (GAAP) |
$ |
715,790 |
|
$ |
614,832 |
|
$ |
149,278 |
|
$ |
474,959 |
|
$ |
4.80 |
|
Acquisition, integration and divestiture-related costs |
|
26,254 |
|
|
26,254 |
|
|
6,407 |
|
|
19,847 |
|
|
0.20 |
|
Changes in LIFO inventory reserves |
|
(11,817 |
) |
|
(11,817 |
) |
|
(2,977 |
) |
|
(8,840 |
) |
|
(0.09 |
) |
Amortization of acquisition intangibles |
|
87,264 |
|
|
87,264 |
|
|
21,523 |
|
|
65,741 |
|
|
0.66 |
|
Restructuring/Asset impairment charges |
|
56,933 |
|
|
56,933 |
|
|
12,920 |
|
|
44,036 |
|
|
0.44 |
|
Gain on divestiture of business and other assets |
|
(78,929 |
) |
|
(78,929 |
) |
|
(19,076 |
) |
|
(59,853 |
) |
|
(0.60 |
) |
Other income, net |
|
— |
|
|
(39,657 |
) |
|
(9,624 |
) |
|
(30,033 |
) |
|
(0.30 |
) |
Non-operating pension costs |
|
— |
|
|
14,312 |
|
|
3,547 |
|
|
10,765 |
|
|
0.11 |
|
Net gain from derivatives |
|
(1,912 |
) |
|
(1,912 |
) |
|
(482 |
) |
|
(1,430 |
) |
|
(0.01 |
) |
Other adjustments |
|
10,142 |
|
|
10,113 |
|
|
5,433 |
|
|
4,680 |
|
|
0.05 |
|
Total adjustments |
$ |
87,935 |
|
$ |
62,561 |
|
$ |
17,671 |
|
$ |
44,913 |
|
$ |
0.46 |
|
Adjusted |
$ |
803,725 |
|
$ |
677,393 |
|
$ |
166,949 |
|
$ |
519,872 |
|
$ |
5.26 |
|
Due to rounding,
individual items may not sum appropriately. |
|
|
|
|
For the twelve-month period ended December 31,
2022 |
Dollars in thousands,
except per share data |
Operating Profit |
Income Before Income Taxes |
Provision for Income Taxes |
Net Income Attributable to Sonoco |
Diluted EPS |
As Reported (GAAP) |
$ |
675,396 |
|
$ |
571,282 |
|
$ |
118,509 |
$ |
466,437 |
|
$ |
4.72 |
|
Acquisition, integration and divestiture-related costs |
|
70,210 |
|
|
70,210 |
|
|
17,640 |
|
52,570 |
|
|
0.53 |
|
Changes in LIFO inventory reserves |
|
28,445 |
|
|
28,445 |
|
|
7,083 |
|
21,362 |
|
|
0.22 |
|
Amortization of acquisition intangibles |
|
80,427 |
|
|
80,427 |
|
|
19,554 |
|
60,873 |
|
|
0.62 |
|
Restructuring/Asset impairment charges |
|
56,910 |
|
|
56,910 |
|
|
11,269 |
|
45,542 |
|
|
0.46 |
|
Non-operating pension costs |
|
— |
|
|
7,073 |
|
|
2,007 |
|
5,066 |
|
|
0.05 |
|
Net loss from derivatives |
|
8,767 |
|
|
8,767 |
|
|
2,183 |
|
6,584 |
|
|
0.07 |
|
Other adjustments |
|
(290 |
) |
|
(426 |
) |
|
18,515 |
|
(18,941 |
) |
|
(0.19 |
) |
Total adjustments |
$ |
244,469 |
|
$ |
251,406 |
|
$ |
78,251 |
$ |
173,056 |
|
$ |
1.76 |
|
Adjusted |
$ |
919,865 |
|
$ |
822,688 |
|
$ |
196,760 |
$ |
639,493 |
|
$ |
6.48 |
|
Due to rounding,
individual items may not sum appropriately. |
|
|
|
Adjusted EBITDA and
Adjusted EBITDA Margin |
|
|
|
|
Three Months Ended |
|
Dollars in
thousands |
December 31, 2023 |
December 31, 2022 |
|
|
|
|
|
Net income attributable to Sonoco |
$ |
81,242 |
|
$ |
97,204 |
|
|
Adjustments: |
|
|
|
Interest expense |
|
35,323 |
|
|
30,420 |
|
|
Interest income |
|
(3,704 |
) |
|
(1,170 |
) |
|
Provision for income taxes |
|
22,275 |
|
|
1,797 |
|
|
Depreciation, depletion, and amortization |
|
91,601 |
|
|
77,729 |
|
|
Non-operating pension costs |
|
3,888 |
|
|
2,822 |
|
|
Net income attributable to noncontrolling interests |
|
588 |
|
|
(99 |
) |
|
Restructuring/Asset impairment charges |
|
3,952 |
|
|
13,553 |
|
|
Changes in LIFO inventory reserves |
|
(1,631 |
) |
|
3,357 |
|
|
Gain from divestiture of business and other assets |
|
(85 |
) |
|
— |
|
|
Acquisition, integration and divestiture-related costs |
|
4,063 |
|
|
7,555 |
|
|
Other income, net |
|
(2,714 |
) |
|
— |
|
|
Net (gain)/loss from derivatives |
|
(397 |
) |
|
11,083 |
|
|
Other non-GAAP adjustments |
|
1,389 |
|
|
1,298 |
|
|
Adjusted
EBITDA |
$ |
235,790 |
|
$ |
245,549 |
|
|
|
|
|
|
Net Sales |
$ |
1,635,800 |
|
$ |
1,676,022 |
|
|
Net Income Margin |
|
5.0 |
% |
|
5.8 |
% |
|
Adjusted EBITDA Margin |
|
14.4 |
% |
|
14.7 |
% |
|
Segment results, which are reviewed by the
Company’s management to evaluate segment performance, do not
include the following: restructuring/asset impairment charges;
amortization of acquisition intangibles; acquisition, integration,
and divestiture-related costs; changes in LIFO inventory reserves;
gains/losses from the sale of businesses and other assets; or
certain other items, if any, the exclusion of which the Company
believes improves the comparability and analysis of the ongoing
operating performance of the business. Accordingly, the term
“segment operating profit” is defined as the segment’s portion of
“operating profit” excluding those items. All other general
corporate expenses have been allocated as operating costs to each
of the Company’s reportable segments and All Other. Total operating
profit is comprised of the sum of segment and All Other operating
profit plus certain items that have been allocated to Corporate,
including amortization of acquisition intangibles;
restructuring/asset impairment charges; changes in LIFO inventory
reserves; acquisition, integration and divestiture-related costs;
gains/losses from the sale of businesses or other assets;
gains/losses on derivatives; and certain other items that were
excluded from segment and All Other operating profit.
The Company does not calculate net income by
segment; therefore, Segment Adjusted EBITDA is reconciled to the
most directly comparable GAAP measure of segment profitability,
Segment Operating Profit, which is the measure of segment profit or
loss in accordance with Accounting Standards Codification 280 -
Segment Reporting, as prescribed by the Financial Accounting
Standards Board.
Segment
Adjusted EBITDA and All Other Adjusted EBITDA
Reconciliation |
For the
Three Months Ended December 31,
2023 |
Dollars in thousands |
Consumer Packaging segment |
Industrial Paper Packaging segment |
All Other |
Corporate |
Total |
Segment and Total Operating Profit |
$ |
82,979 |
|
$ |
61,504 |
|
$ |
22,336 |
|
$ |
(31,473 |
) |
$ |
135,346 |
|
Adjustments: |
|
|
|
|
|
Depreciation, depletion and amortization1 |
|
33,088 |
|
|
28,278 |
|
|
6,053 |
|
|
24,182 |
|
|
91,601 |
|
Equity in earnings of affiliates, net of tax |
|
71 |
|
|
1,481 |
|
|
— |
|
|
— |
|
|
1,552 |
|
Restructuring/Asset impairment charges2 |
|
— |
|
|
— |
|
|
— |
|
|
3,952 |
|
|
3,952 |
|
Changes in LIFO inventory reserves3 |
|
— |
|
|
— |
|
|
— |
|
|
(1,631 |
) |
|
(1,631 |
) |
Acquisition, integration and divestiture-related costs4 |
|
— |
|
|
— |
|
|
— |
|
|
4,063 |
|
|
4,063 |
|
Gain from divestiture of business and other assets |
|
— |
|
|
— |
|
|
— |
|
|
(85 |
) |
|
(85 |
) |
Net gains from derivatives5 |
|
— |
|
|
— |
|
|
— |
|
|
(397 |
) |
|
(397 |
) |
Other non-GAAP adjustments |
|
— |
|
|
— |
|
|
— |
|
|
1,389 |
|
|
1,389 |
|
Segment Adjusted
EBITDA |
$ |
116,138 |
|
$ |
91,263 |
|
$ |
28,389 |
|
$ |
— |
|
$ |
235,790 |
|
|
|
|
|
|
|
Net Sales |
$ |
855,687 |
|
$ |
593,080 |
|
$ |
187,033 |
|
|
|
Segment Operating Profit
Margin |
|
9.7 |
% |
|
10.4 |
% |
|
11.9 |
% |
|
|
Segment Adjusted EBITDA
Margin |
|
13.6 |
% |
|
15.4 |
% |
|
15.2 |
% |
|
|
1 Included in Corporate is the amortization of
acquisition intangibles associated with the Consumer segment of
$14,215, the Industrial segment of $7,208, and All Other of
$2,759.2 Included in Corporate are restructuring/asset impairment
charges associated with the Consumer segment of $(3,733), the
Industrial segment of $5,793, and All Other of $1,748.3 Included in
Corporate are changes in LIFO inventory reserves associated with
the Consumer segment of $(1,487) and the Industrial segment of
$(144).4 Included in Corporate are acquisition, integration and
divestiture-related costs associated with the Consumer segment of
$436 and the Industrial segment of $415.5 Included in Corporate are
net gains on derivatives associated with the Consumer segment of
$(63), the Industrial segment of $(244), and All Other of
$(90).
Segment
Adjusted EBITDA and All Other Adjusted EBITDA
Reconciliation |
For the
Three Months Ended December 31,
2022 |
Dollars in thousands |
Consumer Packaging segment |
Industrial Paper Packaging segment |
All Other |
Corporate |
Total |
Segment and Total Operating Profit |
$ |
85,139 |
|
$ |
79,139 |
|
$ |
19,551 |
|
$ |
(56,911 |
) |
$ |
126,918 |
Adjustments: |
|
|
|
|
|
Depreciation, depletion, and amortization1 |
|
28,438 |
|
|
23,003 |
|
|
6,223 |
|
|
20,065 |
|
|
77,729 |
Equity in earnings of affiliates, net of tax |
|
117 |
|
|
3,939 |
|
|
— |
|
|
— |
|
|
4,056 |
Restructuring/Asset impairment charges2 |
|
— |
|
|
— |
|
|
— |
|
|
13,553 |
|
|
13,553 |
Changes in LIFO inventory reserves3 |
|
— |
|
|
— |
|
|
— |
|
|
3,357 |
|
|
3,357 |
Acquisition, integration and divestiture-related costs4 |
|
— |
|
|
— |
|
|
— |
|
|
7,555 |
|
|
7,555 |
Net losses from derivatives5 |
|
— |
|
|
— |
|
|
— |
|
|
11,083 |
|
|
11,083 |
Other non-GAAP adjustments |
|
— |
|
|
— |
|
|
— |
|
|
1,298 |
|
|
1,298 |
Segment Adjusted
EBITDA |
$ |
113,694 |
|
$ |
106,081 |
|
$ |
25,774 |
|
$ |
— |
|
$ |
245,549 |
|
|
|
|
|
|
Net Sales |
$ |
879,326 |
|
$ |
596,582 |
|
$ |
200,114 |
|
|
|
Segment Operating Profit
Margin |
|
9.7 |
% |
|
13.3 |
% |
|
9.8 |
% |
|
|
Segment Adjusted EBITDA
Margin |
|
12.9 |
% |
|
17.8 |
% |
|
12.9 |
% |
|
|
1 Included in Corporate is amortization of
acquisition intangibles associated with the Consumer segment of
$14,151, the Industrial segment of $1,956, and All Other of
$3,958.2 Included in Corporate are restructuring/asset impairment
charges associated with the Consumer segment of $3,969, the
Industrial segment of $7,674, and All Other of $18.3 Included in
Corporate are changes in LIFO inventory reserves associated with
the Consumer segment of $4,164 and the Industrial segment of
$(807).4 Included in Corporate are acquisition, integration and
divestiture-related costs associated with the Consumer segment of
$652 and the Industrial segment of $19.5 Included in Corporate are
net losses on derivatives associated with the Consumer segment of
$1,577, the Industrial segment of $7,266, and All Other of
$2,241.
Adjusted EBITDA and
Adjusted EBITDA Margin |
|
|
|
|
Twelve Months Ended |
|
Dollars in
thousands |
December 31, 2023 |
December 31, 2022 |
|
|
|
|
|
Net income attributable to Sonoco |
$ |
474,959 |
|
$ |
466,437 |
|
|
Adjustments: |
|
|
|
Interest expense |
|
136,686 |
|
|
101,662 |
|
|
Interest income |
|
(10,383 |
) |
|
(4,621 |
) |
|
Provision for income taxes |
|
149,278 |
|
|
118,509 |
|
|
Depreciation, depletion, and amortization |
|
340,988 |
|
|
308,824 |
|
|
Non-operating pension costs |
|
14,312 |
|
|
7,073 |
|
|
Net income attributable to noncontrolling interests |
|
942 |
|
|
543 |
|
|
Restructuring/Asset impairment charges |
|
56,933 |
|
|
56,910 |
|
|
Changes in LIFO inventory reserves |
|
(11,817 |
) |
|
28,445 |
|
|
Gain from divestiture of business and other assets |
|
(78,929 |
) |
|
— |
|
|
Acquisition, integration and divestiture-related costs |
|
26,254 |
|
|
70,210 |
|
|
Other income, net |
|
(39,657 |
) |
|
— |
|
|
Net (gain)/loss from derivatives |
|
(1,912 |
) |
|
8,767 |
|
|
Other non-GAAP adjustments |
|
10,142 |
|
|
(290 |
) |
|
Adjusted
EBITDA |
$ |
1,067,796 |
|
$ |
1,162,469 |
|
|
|
|
|
|
Net Sales |
$ |
6,781,292 |
|
$ |
7,250,552 |
|
|
Net Income Margin |
|
7.0 |
% |
|
6.4 |
% |
|
Adjusted EBITDA Margin |
|
15.7 |
% |
|
16.0 |
% |
|
The following tables reconcile Segment and Total Operating
Profit, the most directly comparable GAAP measure of profitability,
to Segment Adjusted EBITDA.
Segment
Adjusted EBITDA and All Other Adjusted EBITDA
Reconciliation |
For the
Twelve Months Ended December 31,
2023 |
Dollars in thousands |
Consumer Packaging segment |
Industrial Paper Packaging segment |
All Other |
Corporate |
Total |
Segment and Total Operating Profit |
$ |
382,063 |
|
$ |
317,917 |
|
$ |
103,745 |
|
$ |
(87,935 |
) |
$ |
715,790 |
|
Adjustments: |
|
|
|
|
|
Depreciation, depletion and amortization1 |
|
124,483 |
|
|
104,722 |
|
|
24,519 |
|
|
87,264 |
|
|
340,988 |
|
Equity in earnings of affiliates, net of tax |
|
564 |
|
|
9,783 |
|
|
— |
|
|
— |
|
|
10,347 |
|
Restructuring/Asset impairment charges2 |
|
— |
|
|
— |
|
|
— |
|
|
56,933 |
|
|
56,933 |
|
Changes in LIFO inventory reserves3 |
|
— |
|
|
— |
|
|
— |
|
|
(11,817 |
) |
|
(11,817 |
) |
Acquisition, integration and divestiture-related costs4 |
|
— |
|
|
— |
|
|
— |
|
|
26,254 |
|
|
26,254 |
|
Gains from divestiture of business and other assets5 |
|
— |
|
|
— |
|
|
— |
|
|
(78,929 |
) |
|
(78,929 |
) |
Net gains from derivatives6 |
|
— |
|
|
— |
|
|
— |
|
|
(1,912 |
) |
|
(1,912 |
) |
Other non-GAAP adjustments7 |
|
— |
|
|
— |
|
|
— |
|
|
10,142 |
|
|
10,142 |
|
Segment Adjusted
EBITDA |
$ |
507,110 |
|
$ |
432,422 |
|
$ |
128,264 |
|
$ |
— |
|
$ |
1,067,796 |
|
|
|
|
|
|
|
Net Sales |
$ |
3,626,977 |
|
$ |
2,374,113 |
|
$ |
780,202 |
|
|
|
Segment Operating Profit
Margin |
|
10.5 |
% |
|
13.4 |
% |
|
13.3 |
% |
|
|
Segment Adjusted EBITDA
Margin |
|
14.0 |
% |
|
18.2 |
% |
|
16.4 |
% |
|
|
1 Included in Corporate is the amortization of
acquisition intangibles associated with the Consumer segment of
$57,044, the Industrial segment of $16,121, and All Other of
$14,099.2 Included in Corporate are restructuring/asset impairment
charges associated with the Consumer segment of $8,059, the
Industrial segment of $38,754, and All Other of $7,623.3 Included
in Corporate are changes in LIFO inventory reserves associated with
the Consumer segment of $(10,915) and the Industrial segment of
$(902).4 Included in Corporate are acquisition, integration and
divestiture-related costs associated with the Consumer segment of
$1,738 and the Industrial segment of $5,810.5 Included in Corporate
are gains from the sale of the Company’s timberland properties in
the amount of $(60,945), the sale of its S3 business of in the
amount of $(11,065), and the sale of its BulkSak businesses of
$(6,919), all of which are associated with the Industrial segment.6
Included in Corporate are gains on derivatives associated with the
Consumer segment of $(257), the Industrial segment of $(1,290), and
All Other of $(365).7 Included in Corporate are other non-GAAP
adjustments associated with the Industrial Paper Packaging segment
of $3,762 and the All Other group of businesses of $3,249.
Segment
Adjusted EBITDA and All Other Adjusted EBITDA
Reconciliation |
For the
Twelve Months Ended December 31,
2022 |
Dollars in thousands |
Consumer Packaging segment |
Industrial Paper Packaging segment |
All Other |
Corporate |
Total |
Segment and Total Operating Profit |
$ |
526,028 |
|
$ |
327,859 |
|
$ |
65,978 |
|
$ |
(244,469 |
) |
$ |
675,396 |
|
Adjustments: |
|
|
|
|
|
Depreciation, depletion, and amortization1 |
|
111,599 |
|
|
91,944 |
|
|
24,854 |
|
|
80,427 |
|
|
308,824 |
|
Equity in earnings of affiliates, net of tax |
|
485 |
|
|
13,722 |
|
|
— |
|
|
— |
|
|
14,207 |
|
Restructuring/Asset impairment charges2 |
|
— |
|
|
— |
|
|
— |
|
|
56,910 |
|
|
56,910 |
|
Changes in LIFO inventory reserves3 |
|
— |
|
|
— |
|
|
— |
|
|
28,445 |
|
|
28,445 |
|
Acquisition, integration and divestiture-related costs4 |
|
— |
|
|
— |
|
|
— |
|
|
70,210 |
|
|
70,210 |
|
Net losses from derivatives5 |
|
— |
|
|
— |
|
|
— |
|
|
8,767 |
|
|
8,767 |
|
Other non-GAAP adjustments |
|
— |
|
|
— |
|
|
— |
|
|
(290 |
) |
|
(290 |
) |
Segment Adjusted
EBITDA |
$ |
638,112 |
|
$ |
433,525 |
|
$ |
90,832 |
|
$ |
— |
|
$ |
1,162,469 |
|
|
|
|
|
|
|
Net Sales |
$ |
3,767,956 |
|
$ |
2,684,563 |
|
$ |
798,033 |
|
|
|
Segment Operating Profit
Margin |
|
14.0 |
% |
|
12.2 |
% |
|
8.3 |
% |
|
|
Segment Adjusted EBITDA
Margin |
|
16.9 |
% |
|
16.1 |
% |
|
11.4 |
% |
|
|
1 Included in Corporate is the amortization of
acquisition intangibles associated with the Consumer segment of
$55,089, the Industrial segment of $8,053, and All Other of
$17,285.2 Included in Corporate are restructuring/asset impairment
charges associated with the Consumer segment of $13,865, the
Industrial segment of $24,745, and All Other of $(229).3 Included
in Corporate are changes in LIFO inventory reserves associated with
the Consumer segment of $26,753 and the Industrial segment of
$1,692.4 Included in Corporate are acquisition, integration and
divestiture-related costs associated with the Consumer segment of
$38,690 and the Industrial segment of $1,885.5 Included in
Corporate are net losses on derivatives associated with the
Consumer segment of $1,230, the Industrial segment of $5,789, and
All Other of $1,748.
Free Cash Flow
The Company uses the non-GAAP financial measure
of “Free Cash Flow,” which it defines as cash flow from operations
minus net capital expenditures. Net capital expenditures are
defined as capital expenditures minus proceeds from the disposition
of capital assets. Free Cash Flow may not represent the amount of
cash flow available for general discretionary use because it
excludes non-discretionary expenditures, such as mandatory debt
repayments and required settlements of recorded and/or contingent
liabilities not reflected in cash flow from operations.
|
Twelve Months Ended |
FREE CASH
FLOW |
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
Net cash provided by operating activities |
$ |
882,918 |
|
|
$ |
509,049 |
|
Purchase of property, plant
and equipment, net |
|
(282,738 |
) |
|
|
(319,148 |
) |
Free Cash Flow |
$ |
600,180 |
|
|
$ |
189,901 |
|
|
|
|
|
Sonoco Products (NYSE:SON)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Sonoco Products (NYSE:SON)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024