Sonoco Products Co · Q2 2023 earnings

Briefing

Sonoco's second quarter performance in 2023 was marked by strong cash flows amidst a disruptive demand environment, with most businesses meeting or exceeding expectations, though volume softness impacted Consumer metal packaging and Industrials.

Sonoco reported a decrease in net sales to $1.7 billion due to lower volumes, while GAAP operating profit decreased to $188 million. Despite these challenges, the company generated $349 million of operating cash flow for the first six months of 2023 and lowered full-year Adjusted EPS and Adjusted EBITDA guidance based on lower volume trends.

• Net sales decreased to $1.7 billion driven by lower volumes.
• GAAP operating profit decreased to $188 million as lower overall volume and mix was partially offset by lower acquisition-related and restructuring costs, gains on asset sales, higher price/cost and productivity.
• Achieved net income margin of 6.7% and Adjusted EBITDA margin of 16.1%.
• Adjusted operating profit and Adjusted EBITDA declined to $211 million and $275 million, respectively, due to lower overall volume and mix, partially offset by higher price cost and productivity.

Headline financials

Revenue & EPS history

Based on the softer than expected second quarter results and in recognition of our customers’ cautious forecasts through the remainder of the year, we are reducing our full year guidance. We intend to continue to manage variable and fixed expenses and execute our continuous improvement programs to improve results in the near and long term.