Sonoco CEO: Company well-positioned to navigate geopolitical landscape

Sonoco Products Co. reported its first quarter 2025 financial results earlier this week, and despite a drop in earnings, the Hartsville, South Carolina-based packaging company posted record net sales and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), and CEO Howard Coker says Sonoco is “better positioned than ever” to navigate the evolving geopolitical landscape.

Sonoco’s net income is down 16.5 percent year over year, coming in at $54 million in the first quarter of 2025 compared with $65 million in the same period last year.

However, the company’s first-quarter net sales came in at a record $1.7 billion, up 31 percent from the $1.3 billion in net sales achieved in the first quarter of 2024, and its adjusted EBITDA also was a record, totaling $338 million, a 38 percent increase from the $245 million seen in the same period last year.

RELATED: Sonoco cites OCC shortage for price hike in Europe

Sonoco attributes much of the sales growth to its $3.8 billion acquisition of Swiss metal packaging company Eviosys, which has been rebranded to Sonoco Metal Packaging EMEA. The deal was finalized in December 2024 and provided Sonoco a full-quarter sales boost.

During the first quarter, the company also completed the $1.8 billion sale of its thermoformed and flexible packaging business to Toppan Holdings Inc. and has used after-tax proceeds of about $1.56 billion to reduce debt.

“This divestiture strengthens our focus on core sustainable packaging platforms and positions us to reinvest in higher return opportunities that drive long term earnings growth and margin expansion,” Sonoco interim Chief Financial Officer Jerry Cheatham said during an earnings call Wednesday. “Looking ahead, our leadership in two core markets will enable us to operate more efficiently and serve our customers with greater focus and agility.”

Net sales in Sonoco’s Consumer Packaging business are up 83 percent, coming in at $1.07 billion compared with $582 million in the first quarter last year, driven by the integration of the new Sonoco Metal Packaging EMEA business as well as year-over-year volume growth in metal packaging in the U.S.

However, net sales in its Industrial Paper Packaging business are down 6 percent, coming in at $558 million in the first quarter of this year compared with $593 million in the first quarter of 2024. Sonoco attributes the decline to volume declines across the business, negative impact of foreign currency exchange rates and the loss of net sales related to the divestiture of two production facilities in China. These factors only were partially offset by year-over-year price increases.

As far as recovered fiber, particularly old corrugated containers (OCC), Sonoco had assumed in its original guidance that per-ton prices for OCC would average around $100.

“Obviously, it was around $80-85 dollars in the first quarter,” Cheatham said. “We expect it to be similar in the second, and we’re expecting it to average somewhere between $90 and $95 in the second half of the year.”

During the earnings call, Coker also was asked about the ongoing tariff situation and what measures Sonoco has in place to mitigate any risk, and the CEO said the company’s consumer packaging business typically has been able to withstand economic uncertainty.

RELATED: Sonoco to increase prices for URB, converted paperboard products

“Sonoco’s consumer packaging business tends to perform well during periods of economic stress as consumers typically shift to center-of-the-store packaged food,” he said. “While industrial paper packaging business has experienced some slowing during past recessions, I would point out that our industrial business in 2025 is significantly stronger and the markets we serve have matured since the COVID recession of 2020. Now, does that mean that Sonoco is immune to an economic downturn or tariffs? Certainly not.

“We believe Sonoco is better positioned than ever to navigate the evolving geopolitical landscape. First, our manufacturing network is designed to serve local markets, reducing our exposure to cross-border disruptions and tariff-related risks. Second, while we are actively working with our customers to help manage the impact of higher input costs driven by tariffs, our business model allows for pricing adjustments when necessary. Most importantly, our transformed portfolio is significantly more resilient, with over two-thirds of our sales now coming from consumer food packaging, a segment that has historically demonstrated strong performance across economic cycles.

“Even with economic uncertainty, we remain confident in our ability to deliver continued growth, margin expansion and strong cash flow generation enabling us to drive even greater long-term value for our shareholders.”

Sonoco’s full first-quarter 2025 financial report can be found online.