Sonoco Products Co Q4 2024 Earnings Call Summary

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

Question: George Staphos - Bank of America Global Research - Analyst : Thanks. Good morning. Hi, everyone. Thanks for the details. Jerry, welcome. Roger, great to hear your voice again. Hope everybody's well. I guess -- can you talk a little bit about the exit rates or early 1Q rates depending on your perspective that you're seeing across your most important businesses? Relatedly, can you talk about how Eviosys is doing relative to the original, I want to say, $430 million of EBITDA guidance on an annualized basis? And lastly, can you talk about how much you're expecting from TFP in the first quarter? I might have a quick follow-on.

Question: George Staphos - Bank of America Global Research - Analyst : Okay. So that would be roughly $20 million-ish, $25 million, if I remember correctly from the slides. And then just maybe last question. Industrial, I recognize you're seeing sequential improvement. Was the business on plan with where you're expecting for the fourth quarter? It was somewhat below our forecast, which is neither here nor there, but just want to see if there are any things in 4Q that were either positive or negative relative to your guidance. Thank you, 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. FEBRUARY 19, 2025 / 1:30PM, SON.N - Q4 2024 Sonoco Products Co Earnings Call

Question: George Staphos - Bank of America Global Research - Analyst : Okay. Thanks very much. I'll turn it over.

Question: Bryan Burgmeier - Citi Research - Analyst : Good morning. This is actually Bryan Burgmeier on for Anthony. Thank you for taking the question. My first question is just kind of from a high level. I think guidance kind of points to low single-digit volume growth in 2025. Just curious what that maybe implies specifically for Consumer? We maybe consider that to be a little bit above peers or a little bit above maybe some of the blue chip customers. So I'm just curious what's driving that.

Question: Bryan Burgmeier - Citi Research - Analyst : Got it. Thanks for that detail. And then maybe just within your metal businesses, are you expecting maybe a better pack season in 2025? I think the North American pack was pretty weak last year. I'm curious if you think maybe you have a full recovery or a partial recovery. I know you just said you're not forecasting anything major, but just specifically kind of thinking about North American metal. Thank you, and I'll turn it over.

Question: Matthew Roberts - Raymond James - Analyst : Good morning, gentlemen. Thank you for taking the questions. If I could first follow up on George's question earlier. I understand there's certainly a lot of moving parts. Typically, you do guide one quarter ahead as well. So recognizing there are a lot of moving pieces. Wondering if you could help frame EPS for 1Q a little bit better in terms of what you're expecting in terms of volume or any other bridge items there, such as FX impacts or productivity and price costs? Thanks.

Question: Matthew Roberts - Raymond James - Analyst : Very good. Thanks, Howard. And certainly, understandable there. Maybe on ThermoSafe, I think it was recently in November, you expected to sign something there in early half of 2025 and close out in the middle of the year. Have there been any changes in the thinking or timing there? I believe you noted volumes in the other -- all other segment were negative exiting the year. We've heard some destocking has lingered in pharma end markets. So maybe what are you seeing in terms of volumes in that business? And while ThermoSafe is included in the 2025 guide, are there any assumptions from ThermoSafe and the leverage target? It seems like that changed a bit from the less than 3x that you were thinking previously 24 months after Eviosys. Thank you again for taking the questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:30PM, SON.N - Q4 2024 Sonoco Products Co Earnings Call

Question: Matthew Roberts - Raymond James - Analyst : Rodger, Howard, thank you all again.

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Thank you. Two clarifications maybe. One, can you help us with the cash flow bridge from your EPS to your free cash flow per share because you have EPS $6 to $6.20 and then you also have CapEx lower than DD&A? Not a whole lot of working capital investment, but your free cash flow per share is a good bit lower than the EPS. If you could just help us out there, please.

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Okay. I'll circle back perhaps with you guys on that after. But also on metal overlap, is there anything of significance that we should be -- that might be included in the guide one way or the other? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:30PM, SON.N - Q4 2024 Sonoco Products Co Earnings Call

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Okay. Great. And then lastly, on Eviosys, thanks for the specifics in terms of like what you're expecting. The numbers you were using, does that include synergies for 2025? Or is that 10% increase on the [390] or is that ex synergies?

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Okay. That's super helpful. And then maybe -- and I apologize, I know I'm going a little long here, but just the shortfall last year in Eviosys relative to what you might have been originally anticipating. Anything specific you can point to?

Question: Mark Weintraub - Seaport Global Securities LLC - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:30PM, SON.N - Q4 2024 Sonoco Products Co Earnings Call

Question: Mike Roxland - Truist Securities - Analyst : Thanks very much for taking the questions and congrats on all the progress. Just wanted to follow up. I think, Rodger, you mentioned European weakness in paper and you quoted -- you mentioned how -- having some work to do. Any way you could expand on that, provide some more color around what you're thinking about doing in Europe to improve the business or maybe just to continue to rationalize assets as you did in Greece?

Question: Mike Roxland - Truist Securities - Analyst : Got it, thank you. Is that something that we should expect will be largely done this year as well so that when you look at 2026, this is going to be -- this will be in hindsight?

Question: Mike Roxland - Truist Securities - Analyst : Perfect. Great. And then just one quick follow-up on Eviosys. How is the integration proceeding thus far? And in the short time, or a short period of time that you've owned it, anything better than expected? Anything not as good? Obviously, you mentioned the synergies with most of that now coming in '26 or it's '25, just given some of the CMA issues. But anything that you've noticed from a positive or negative? And how should we think about the $100 million of synergies and potential upside to 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. FEBRUARY 19, 2025 / 1:30PM, SON.N - Q4 2024 Sonoco Products Co Earnings Call

Question: Mike Roxland - Truist Securities - Analyst : Thanks very much, Rodger, and good luck in '25.

Question: George Staphos - Bank of America Global Research - Analyst : Hey, thanks for taking my follow-on question. So folks, if we could talk about productivity ex synergy, if you mentioned it earlier in the remarks, forgive me for missing it, but what do you expect for 2025? And how would the mix look across industrial and consumer? Secondly, if we think about the supply chain and, Rodger, you were talking earlier about how you're trying to work both direct and indirect now and the work is progressing. Any issues to be concerned about relative to trade, to tariffs and the like? How do you feel about your supply of metal? And then totally switching gears in metal itself. Can you give us a bit more color on where you're seeing strength in aerosol? Is it coming more from construction markets? Is it coming elsewhere? And within food, what are you doing to sort of diversify the customer base that you've had traditionally, that business has had traditionally? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:30PM, SON.N - Q4 2024 Sonoco Products Co Earnings Call

Question: George Staphos - Bank of America Global Research - Analyst : Thanks very much. Good luck in the quarter.

Question: Richard Carlson - Wells Fargo Securities LLC - Analyst : Good morning, guys. This is Richard in for Gabe Hajde this morning. I just wanted to double click on the 2026 leverage target if you guys could hear the notes. I know it's too early for guidance, but other than the already disclosed asset sales and the Eviosys synergies, are there any other big pieces that we need to be keeping in mind when we work our models? And then on CapEx, there's a good chart you had on slide 7. Should we think about that kind of a continued trend either towards a maintenance level or are you focused more on a percentage of sales basis? Thank you.