Sonoco Products Company Reports Decline in Revenue and Profitability for Nine-Month Period Ending September 29, 2024

Sonoco Products Company reported its financial results for the nine-month period ending September 29, 2024, revealing a decline in both revenue and profitability compared to the same period in 2023. Net sales for the first nine months of 2024 totaled $4.94 billion, down 4.1% from $5.15 billion in 2023. This decrease was attributed to the absence of $90.5 million in sales from the divestiture of Protexic, a $73.6 million loss from a plant closure, and lower pricing impacting sales by $106.3 million. However, acquisitions contributed an increase of $159.2 million in sales.

Gross profit for the nine-month period was $1.02 billion, a decrease of 3.9% year-over-year, with a gross profit margin of 21.3%. Operating profit fell significantly to $381.0 million, down 34.4% from $580.4 million in the previous year. The decline in operating profit was primarily due to lower net sales and a $30.0 million loss related to the pending sale of two production facilities in China.

Net income attributable to Sonoco for the nine months was $206.9 million ($2.09 per diluted share), a substantial drop from $393.7 million ($3.98 per diluted share) in 2023. Adjusted net income also decreased by 7.7% to $386.1 million ($3.89 per diluted share). The company’s net interest expense increased to $109.4 million, up from $94.7 million in the prior year, largely due to financing activities related to the pending acquisition of Eviosys.

In terms of strategic developments, Sonoco announced the acquisition of Eviosys, a European food can manufacturer, for approximately $3.9 billion, expected to close in Q4 2024. The company also completed several smaller acquisitions, including the remaining interest in RTS Packaging and Inapel Embalagens Ltda. Additionally, Sonoco divested its Protexic business and two production facilities in China, which contributed to the overall decline in sales.

The company’s restructuring efforts included charges of $59.1 million for the first nine months of 2024, compared to $53.0 million in the same period last year. These charges were primarily related to organizational effectiveness initiatives and facility relocations.

As of September 29, 2024, Sonoco reported total assets of $9.04 billion, with total equity of $2.49 billion. The company’s cash and cash equivalents significantly increased to $1.93 billion, up from $151.9 million at the end of 2023, reflecting strong cash flow from financing activities, including proceeds from the issuance of senior unsecured notes.