Sonoco Products Company (SON) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 net sales of $1.71 billion, up 31% year-over-year, driven by the Eviosys (now Sonoco Metal Packaging EMEA) acquisition and strong Consumer Packaging results.

• Adjusted EBITDA reached $338 million, up 38% year-over-year, with margin improving to 16.6%.

• Adjusted EPS was $1.38, up 23% year-over-year, despite higher interest, taxes, and FX impacts.

• Completed $1.8 billion sale of Thermoform and Flexibles business, using $1.5 billion after-tax proceeds to reduce debt and strengthen the balance sheet.

• Reaffirmed full-year 2025 guidance for adjusted EPS ($6.00–$6.20) and adjusted EBITDA ($1.3–$1.4 billion).

Financial highlights

• Net sales from continuing operations: $1.709 billion (up 31% year-over-year); discontinued operations: $321 million.

• Adjusted operating profit: $213 million (up 63% year-over-year); adjusted EBITDA: $338 million (up 38%).

• Adjusted EPS: $1.38 (up 23% year-over-year); net income from continuing operations: $119 million.

• Gross profit margin: 21.8% (up from 20.8%); operating profit margin: 12.4% (up from 10.0%).

• Free cash flow: $(300) million, down from $80 million in Q1 2024, due to seasonal working capital build.

Outlook and guidance

• Reaffirmed full-year adjusted EPS guidance of $6.00–$6.20 and adjusted EBITDA of $1.3–$1.4 billion.

• Projected 2025 operating cash flow: $800–$900 million; free cash flow: $450–$550 million.

• Targeting net leverage ratio of 3.0x–3.3x by end of 2026.

• Expect net sales to grow ~20% to nearly $8 billion, with adjusted EBITDA up ~30% for 2025.

• Anticipate 2–3% volume growth in consumer packaging for the year, with stronger performance in Q2 and Q3.