Sonoco Products Co Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: George Staphos - Bank of America Global Research - Analyst : Hi everyone, good morning. Thanks for the details. I guess the first question I would have, if you could just give us a bit more color on the volume performance by region, by key segment or product line, I know you touched on a lot of it, Howard, during your remarks, but if you could just give us sort of a quick review, North America versus Europe versus the rest of the world, if you care, to talk to that, rigid paper, metal, and industrial on an organic, if you have that, that'd be great. And then a couple of other questions.

Question: George Staphos - Bank of America Global Research - Analyst : Okay, Howard. And just, you're pleased with Europe, but it's down mid single digits in metal so far, correct?

Question: George Staphos - Bank of America Global Research - Analyst : Europe, you're pleased, but it's down mid single digits in metal, correct?

Question: George Staphos - Bank of America Global Research - Analyst : Thanks for that rundown, Howard. Two quick ones and I'll turn it over. One, are you seeing any changes in purchasing behavior, any changes in supply chain, anything to call out on customer promotional activity given tariffs, given the macro? And that's sort of a big question. You don't have to go through everything, but if there's anything in particular we as analysts should know about relative to how we're modeling you going forward, that's kind of what's behind that question. And then you talk about messaging and trying to, this is my wording, not yours, get the story out to a larger degree on Sonoco. It's neither here nor there, but what do you think needs to be better understood by the market relative to the discount you see in the stock versus where you think it should be? Thanks, and I'll turn it over. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 12:30PM, SON.N - Q1 2025 Sonoco Products Co Earnings Call

Question: George Staphos - Bank of America Global Research - Analyst : All right, Howard, I appreciate it thanks. I'll turn it over. Good luck in the quarter. Thanks.

Question: Michael Roxland - Truist Securities - Analyst : Thank you, Howard, Jerry, Roger for taking my questions and congrats on all the progress. Can you help us? You mentioned managing your global network. Can you give us a sense of where there are opportunities and some of the things that you're considering doing around your global network?

Question: Michael Roxland - Truist Securities - Analyst : On Eviosys transitioning, I think I heard you say that EBITDA was up 23% year over year in 1Q. I think you reiterated the guide for EBITDA to be 10%. Is that just conservatism, or is that some concerns over your tariff and economic uncertainty? Like, why reiterate the more modest guide relative to what strong 1Q performance?

Question: Michael Roxland - Truist Securities - Analyst : Nothing operationally stands out, though. It's just work. Is it just.

Question: Michael Roxland - Truist Securities - Analyst : Yeah. Got you. And last question before turning it over, just in terms of the Eviosys integration, last quarter you mentioned having a very strong leadership team there. What has the company done to ensure that the team is retained and there's not turnover in the near term that could cause disruption and negatively impact results?

Question: Michael Roxland - Truist Securities - Analyst : That's great. I really appreciate it and good luck into you.

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : So appreciate that you've upped the target on synergies by $10 million. At the same time, you've talked about the volume environment being weaker. I think you had originally come into the year thinking like a 2% to 3% type of growth in consumer packaging was viable. Correct me if I'm wrong there, but what would your updated view be? And then presumably, that delta would be more than a $10 million negative delta. So I'm curious, what are some of the other explicit drivers you think are going to help offset that in keeping the guidance where it had been? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 12:30PM, SON.N - Q1 2025 Sonoco Products Co Earnings Call

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Sorry, just to clarify, so you're still kind of embedding a 2% to 3% volume increase for the year, which I think is what you had been talking about three months ago?

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Okay. Fair enough. And then second, any update on ThermoSafe and where your thought process there might be?

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Thanks very much.

Question: Matthew Roberts - Raymond James - Analyst : Quick question, on leverage, post the TFP pay down on April 3rd, where does your net adjusted debt stand? I know you said it was less than 4 times, but what would that have been at the end of 1Q and recognizing there is some seasonality with a larger metal business, where do you expect that leverage to be by year-end '25? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 12:30PM, SON.N - Q1 2025 Sonoco Products Co Earnings Call

Question: Matthew Roberts - Raymond James - Analyst : Got it. And secondly, on the price cost expectations, could you say where your OCC cost expectation now is versus where you had it in January and what kind of market conditions inform that? And we're hearing some constructive commentary around the URB list price increase, although it's not yet reflected in the index. Does the guide assume any incremental benefit there? If so, how much? Usually it's not reflected unless passed through, but just curious your thoughts or any color you have there. Thank you again.

Question: Matthew Roberts - Raymond James - Analyst : And on the URB price?

Question: Matthew Roberts - Raymond James - Analyst : All right, thank you again.

Question: Gabrial Hajde - Wells Fargo Securities LLC - Analyst : Good morning team. I had a question, maybe a point of clarification. I apologize. It's a busy morning. Did you talk about consumer volumes in aggregate on an organic basis, question number one? And question number two, Howard, you threw out a bunch of numbers for the metal food business, and so maybe if we could break it down, North America versus Europe and organic. You talked about some pretty big numbers. I think double-digit growth in the North American metal business. It's quite a bit better than what we saw for the industry data, maybe suggesting you guys are winning some business there. Can you talk about that? And would it be your view that customers are trying to buy ahead of any potential price increases in material costs? And again, I apologize if you covered that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 12:30PM, SON.N - Q1 2025 Sonoco Products Co Earnings Call

Question: Gabrial Hajde - Wells Fargo Securities LLC - Analyst : Okay. So to be clear, I guess, adjusting for the end sales, which seems like it should balance out over the course of the year, you would expect pretty darn strong volumes in aerosol and food cans also to be up for the full year in North America.

Question: Gabrial Hajde - Wells Fargo Securities LLC - Analyst : And then a point of clarification, I think, Jerry, you mentioned embedded in the guidance, you talked about getting early realization on the URB price increase, but you'd expect that to flow through in the back half of the year. A, is that in fact what you said? And B, quantification of what that benefit would look like in the second half?