Sonoco Products : Regulation FD Presentation - Form 8-K
March 26, 2024 at 04:39 pm EDT
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The following tables recast certain unaudited segment information and non-GAAP financial measures of Sonoco Products Company (the "Company") for each quarterly reporting period in the year ended December 31, 2023, and for the years ending December 31, 2023 and 2022, to conform to the updated reportable segment structure, effective January 1, 2024, that will be reflected in the Company's future periodic reports. The recast financial information set forth below has not been audited and does not modify or update the disclosures contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") in any way and should be read in conjunction with the 2023 Form 10-K and the Company's other filings with the Securities and Exchange Commission.
Three Months Ended
Twelve Months Ended
Dollars in thousands
April 2, 2023
July 2, 2023
October 1, 2023
December 31, 2023
December 31, 2023
December 31, 2022
Net sales:
Consumer Packaging
$
958,008
$
971,320
$
984,840
$
896,746
$
3,810,914
$
3,955,229
Industrial Paper Packaging
615,855
585,143
580,035
593,080
2,374,113
2,684,563
Total reportable segments
1,573,863
1,556,463
1,564,875
1,489,826
6,185,027
6,639,792
All Other
155,920
148,827
145,544
145,974
596,265
610,760
Net Sales
$
1,729,783
$
1,705,290
$
1,710,419
$
1,635,800
$
6,781,292
$
7,250,552
Intersegment sales1:
Consumer Packaging
$
2,007
$
2,364
$
2,756
$
5,529
$
12,656
$
6,673
Industrial Paper Packaging
38,720
35,411
3,032
24,659
101,822
134,215
Total reportable segments
40,727
37,775
5,788
30,188
114,478
140,888
All Other
2,789
1,845
1,740
1,804
8,178
9,570
Intersegment Sales
$
43,516
$
39,620
$
7,528
$
31,992
$
122,656
$
150,458
Segment operating profit2:
Consumer Packaging
$
96,494
$
101,115
$
116,800
$
86,250
$
400,659
$
533,766
Industrial Paper Packaging
94,367
87,040
75,006
61,504
317,917
327,859
Total reportable segments
$
190,861
$
188,155
$
191,806
$
147,754
$
718,576
$
861,625
Reconciliation of segment operating profit to Income before income taxes:
Segment operating profit
$
190,861
$
188,155
$
191,806
$
147,754
$
718,576
$
861,625
All Other
22,560
22,785
20,740
19,064
85,149
58,240
Corporate
Restructuring/Asset impairment charges
(28,814)
(6,057)
(18,110)
(3,952)
(56,933)
(56,910)
Amortization of acquisition intangibles
(21,164)
(20,539)
(21,379)
(24,182)
(87,264)
(80,445)
Other non-GAAP income/(charges), net
66,205
3,515
(10,120)
(3,338)
56,262
(107,114)
Operating profit
229,648
187,859
162,937
135,346
715,790
675,396
Other income, net
-
-
36,943
2,714
39,657
-
Non-operating pension costs
(3,658)
(3,342)
(3,424)
(3,888)
(14,312)
(7,073)
Interest expense
(34,232)
(34,284)
(32,847)
(35,323)
(136,686)
(101,662)
Interest income
1,562
1,944
3,173
3,704
10,383
4,621
Income before income taxes
$
193,320
$
152,177
$
166,782
$
102,553
$
614,832
$
571,282
1 Intersegment sales are recorded at a market-related transfer price.
2 Segment operating profit viewed by the Company's management to evaluate segment performance does not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration and divestiture-related costs; changes in last-in, first-out inventory reserves; gains/losses from the sale of businesses or 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. All other general corporate expenses have been allocated as operating costs to each of the Company's reportable segments and the All Other group of businesses.
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Three Months Ended April 2, 2023
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
96,494
$
94,367
$
22,560
$
16,227
$
229,648
Adjustments:
Depreciation, depletion and amortization1
32,549
24,878
3,546
21,164
82,137
Equity in earnings of affiliates, net of tax
75
1,781
-
-
1,856
Restructuring/Asset impairment charges2
-
-
-
28,814
28,814
Changes in LIFO inventory reserves3
-
-
-
(5,425)
(5,425)
Acquisition, integration and divestiture-related costs4
-
-
-
5,188
5,188
Gain from divestiture of business and other assets5
-
-
-
(72,010)
(72,010)
Net losses from derivatives6
-
-
-
6,085
6,085
Other non-GAAP adjustments
-
-
-
(43)
(43)
Segment Adjusted EBITDA
$
129,118
$
121,026
$
26,106
$
-
$
276,250
Net Sales
$
958,008
$
615,855
$
155,920
Segment Operating Profit Margin
10.1
%
15.3
%
14.5
%
Segment Adjusted EBITDA Margin
13.5
%
19.7
%
16.7
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $16,226, the Industrial Paper Packaging segment of $2,934, and the All Other group of businesses of $2,004.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $2,680, the Industrial Paper Packaging segment of $24,544, and the All Other group of businesses of $53.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $6,102 and the Industrial Paper Packaging segment of $(677).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $779 and the Industrial Paper Packaging segment of $289.
5 Included in Corporate are gains from the sale of the Company's timberland properties in the amount of $(60,945) and the sale of its S3 business in the amount of $(11,065), both of which are associated with the Industrial Paper Packaging segment.
6 Included in Corporate are losses on derivatives associated with the Consumer Packaging segment of $946, the Industrial Paper Packaging segment of $3,912, and the All Other group of businesses of $1,170.
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Three Months Ended July 2, 2023
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
101,115
$
87,040
$
22,785
$
(23,081)
$
187,859
Adjustments:
Depreciation, depletion and amortization1
32,465
25,008
3,667
20,539
81,679
Equity in earnings of affiliates, net of tax
134
3,178
-
-
3,312
Restructuring/Asset impairment charges2
-
-
-
6,057
6,057
Changes in LIFO inventory reserves3
-
-
-
(1,575)
(1,575)
Acquisition, integration and divestiture-related costs4
-
-
-
4,532
4,532
Gain from divestiture of business and other assets5
-
-
-
(7,371)
(7,371)
Net gains from derivatives6
-
-
-
(4,288)
(4,288)
Other non-GAAP adjustments
-
-
-
5,187
5,187
Segment Adjusted EBITDA
$
133,714
$
115,226
$
26,452
$
-
$
275,392
Net Sales
$
971,320
$
585,143
$
148,827
Segment Operating Profit Margin
10.4
%
14.9
%
15.3
%
Segment Adjusted EBITDA Margin
13.8
%
19.7
%
17.8
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $15,987, the Industrial Paper Packaging segment of $2,565, and the All Other group of businesses of $1,987.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $4,016, the Industrial Paper Packaging segment of $1,987, and the All Other group of businesses of $865.
3 Included in Corporate are changes in LIFO inventory reserves associated with and the Industrial Paper Packaging segment of $(1,575).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $112 and the Industrial Paper Packaging segment of $60.
5 Included in Corporate is the gain from the sale of the Company's U.S. BulkSak businesses, associated with the Industrial Paper Packaging segment, in the amount of $(7,371).
6 Included in Corporate are gains on derivatives associated with the Consumer Packaging segment of $(650), the Industrial Paper Packaging segment of $(2,835), and the All Other group of businesses of $(803).
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Six Months Ended July 2, 2023
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
197,608
$
181,407
$
45,345
$
(6,853)
$
417,507
Adjustments:
Depreciation, depletion and amortization1
65,015
49,886
7,213
41,703
163,817
Equity in earnings of affiliates, net of tax
209
4,959
-
-
5,168
Restructuring/Asset impairment charges2
-
-
-
34,871
34,871
Changes in LIFO inventory reserves3
-
-
-
(7,000)
(7,000)
Acquisition, integration and divestiture-related costs4
-
-
-
9,720
9,720
Gains from divestiture of business and other assets5
-
-
-
(79,381)
(79,381)
Net losses from derivatives6
-
-
-
1,796
1,796
Other non-GAAP adjustments
-
-
-
5,144
5,144
Segment Adjusted EBITDA
$
262,832
$
236,252
$
52,558
$
-
$
551,642
Net Sales
$
1,929,328
$
1,200,998
$
304,747
Segment Operating Profit Margin
10.2
%
15.1
%
14.9
%
Segment Adjusted EBITDA Margin
13.6
%
19.7
%
17.2
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $32,213, the Industrial Paper Packaging segment of $5,499, and the All Other group of businesses of $3,991.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $6,696, the Industrial Paper Packaging segment of $26,531, and the All Other group of businesses of $918.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(6,103) and the Industrial Paper Packaging segment of $(897).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $892 and the Industrial Paper Packaging segment of $349.
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 in the amount of $(11,065), and the sale of its U.S. BulkSak businesses in the amount of $(7,371), all of which are associated with the Industrial Paper Packaging segment.
6 Included in Corporate are losses on derivatives associated with the Consumer Packaging segment of $297, the Industrial Paper Packaging segment of $1,133, and the All Other group of businesses of $366.
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Three Months Ended October 1, 2023
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
116,800
$
75,006
$
20,740
$
(49,609)
$
162,937
Adjustments:
Depreciation, depletion and amortization1
33,833
26,558
3,800
21,379
85,570
Equity in earnings of affiliates, net of tax
284
3,343
-
-
3,627
Restructuring/Asset impairment charges2
-
-
-
18,110
18,110
Changes in LIFO inventory reserves3
-
-
-
(3,186)
(3,186)
Acquisition, integration and divestiture-related costs4
-
-
-
12,472
12,472
Loss from divestiture of business and other assets
-
-
-
537
537
Net gains from derivatives5
-
-
-
(3,310)
(3,310)
Other non-GAAP adjustments
-
-
-
3,607
3,607
Segment Adjusted EBITDA
$
150,917
$
104,907
$
24,540
$
-
$
280,364
Net Sales
$
984,840
$
580,035
$
145,544
Segment Operating Profit Margin
11.9
%
12.9
%
14.2
%
Segment Adjusted EBITDA Margin
15.3
%
18.1
%
16.9
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $15,980, the Industrial Paper Packaging segment of $3,414, and the All Other group of businesses of $1,985.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $9,784, the Industrial Paper Packaging segment of $6,430, and the All Other group of businesses of $270.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(3,325) and the Industrial Paper Packaging segment of $139.
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $410 and the Industrial Paper Packaging segment of $5,046.
5 Included in Corporate are gains on derivatives associated with the Consumer Packaging segment of $(507), the Industrial Paper Packaging segment of $(2,178), and the All Other group of businesses of $(625).
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Nine Months Ended October 1, 2023
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
314,408
$
256,413
$
66,084
$
(56,461)
$
580,444
Adjustments:
Depreciation, depletion and amortization1
98,847
76,444
11,014
63,082
249,387
Equity in earnings of affiliates, net of tax
493
8,302
-
-
8,795
Restructuring/Asset impairment charges2
-
-
-
52,981
52,981
Changes in LIFO inventory reserves3
-
-
-
(10,186)
(10,186)
Acquisition, integration and divestiture-related costs4
-
-
-
22,192
22,192
Gains from divestiture of business and other assets5
-
-
-
(78,844)
(78,844)
Net gains from derivatives6
-
-
-
(1,514)
(1,514)
Other non-GAAP adjustments
-
-
-
8,750
8,750
Segment Adjusted EBITDA
$
413,748
$
341,159
$
77,098
$
-
$
832,005
Net Sales
$
2,914,168
$
1,781,033
$
450,291
Segment Operating Profit Margin
10.8
%
14.4
%
14.7
%
Segment Adjusted EBITDA Margin
14.2
%
19.2
%
17.1
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $48,193, the Industrial Paper Packaging segment of $8,913, and the All Other group of businesses of $5,976.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $16,480, the Industrial Paper Packaging segment of $32,961, and the All Other group of businesses of $1,188.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(9,428) and the Industrial Paper Packaging segment of $(758).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $1,302 and the Industrial Paper Packaging segment of $5,394.
5 Included in Corporate are gains from the divestiture of business and other assets associated with the sale of the Company's timberland properties of $(60,945), the sale of its S3 business of $(11,065), and the sale of its U.S. BulkSak business of $(6,834), all of which are associated with the Industrial Paper Packaging segment.
6 Included in Corporate are gains on derivatives associated with the Consumer Packaging segment of $(210), the Industrial Paper Packaging segment of $(1,045), and the All Other group of businesses of $(259).
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
$
86,250
$
61,504
$
19,064
$
(31,472)
$
135,346
Adjustments:
Depreciation, depletion and amortization1
35,511
28,278
3,630
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
Gains from divestiture of business and other assets
-
-
-
(85)
(85)
Net gains from derivatives5
-
-
-
(397)
(397)
Other non-GAAP adjustments
-
-
-
1,388
1,388
Segment Adjusted EBITDA
$
121,832
$
91,263
$
22,694
$
-
$
235,789
Net Sales
$
896,746
$
593,080
$
145,974
Segment Operating Profit Margin
9.6
%
10.4
%
13.1
%
Segment Adjusted EBITDA Margin
13.6
%
15.4
%
15.5
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $15,998, the Industrial Paper Packaging segment of $7,208, and the All Other group of businesses of $976.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $(3,733), the Industrial Paper Packaging segment of $5,793, and the All Other group of businesses of $1,748.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(1,487) and the Industrial Paper Packaging segment of $(144).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $436 and the Industrial Paper Packaging segment of $415.
5 Included in Corporate are gains on derivatives associated with the Consumer Packaging segment of $(68), the Industrial Paper Packaging segment of $(244), and the All Other group of businesses of $(85).
Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation
For the Year Ended December 31, 2023
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
400,659
$
317,917
$
85,149
$
(87,935)
$
715,790
Adjustments:
Depreciation, depletion and amortization1
134,358
104,722
14,644
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
Gain 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
$
535,581
$
432,422
$
99,793
$
-
$
1,067,796
Net Sales
$
3,810,914
$
2,374,113
$
596,265
Segment Operating Profit Margin
10.5
%
13.4
%
14.3
%
Segment Adjusted EBITDA Margin
14.1
%
18.2
%
16.7
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $64,191, the Industrial Paper Packaging segment of $16,121, and the All Other group of businesses of $6,952.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $8,059, the Industrial Paper Packaging segment of $38,754, and the All Other group of businesses of $7,623.
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(10,915) and the Industrial Paper Packaging segment of $(902).
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $1,738 and the Industrial Paper Packaging 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 in the amount of $(11,065), and the sales of its BulkSak businesses in the amount of $(6,919), all of which are associated with the Industrial Paper Packaging segment.
6 Included in Corporate are gains on derivatives associated with the Consumer Packaging segment of $(278), the Industrial Paper Packaging segment of $(1,290), and the All Other group of businesses of $(344).
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 Year Ended December 31, 2022
Dollars in thousands
Consumer Packaging segment
Industrial Paper Packaging segment
All Other
Corporate
Total
Segment and Total Operating Profit
$
533,766
$
327,859
$
58,240
$
(244,469)
$
675,396
Adjustments:
Depreciation, depletion, and amortization1
122,176
91,944
14,277
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
$
656,427
$
433,525
$
72,517
$
-
$
1,162,469
Net Sales
$
3,955,229
$
2,684,563
$
610,760
Segment Operating Profit Margin
13.5
%
12.2
%
9.5
%
Segment Adjusted EBITDA Margin
16.6
%
16.1
%
11.9
%
1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $62,221, the Industrial Paper Packaging segment of $8,053, and the All Other group of businesses of $10,153.
2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $13,705, the Industrial Paper Packaging segment of $24,745, and the All Other group of businesses of $(69).
3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $26,753 and the Industrial Paper Packaging segment of $1,692.
4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $38,690 and the Industrial Paper Packaging segment of $1,885.
5 Included in Corporate are losses on derivatives associated with the Consumer Packaging segment of $1,332, the Industrial Paper Packaging segment of $5,789, and the All Other group of businesses of $1,646.
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Sonoco Products Co. published this content on
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Sonoco Products Company is a sustainable global packaging company. The Company's segments include Consumer Packaging and Industrial Paper Packaging. The Consumer Packaging segment's products consist of rigid packaging (paper, metal, and plastic) and flexible packaging, primarily serving the consumer staples market focused on food, beverage, household, and personal products. Its rigid plastic products are comprised of thermoformed plastic trays and enclosures for fresh produce, condiments, and pre-packaged foods. Its flexible packaging is comprised of plastic packaging serving a variety of food and personal product applications. The Industrial Paper Packaging segment's products consist of goods produced from recycled fiber including paperboard tubes, cores, cones and cans; partitions; paper-based protective materials, and uncoated recycled paperboard. Its other businesses consist of a variety of packaging materials including plastic, paper, foam, and various other specialty materials.