News - Sonoco Products Co, Corporate Paper Division

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News - Sonoco Products Co, Corporate Paper Division

Sonoco Products Co, Corporate Paper Division

News - Sonoco Products Co, Corporate Paper Division

Newsgrafik #120852
 16.08.2018

Sonoco Sets New Commitments for Sustainable Packaging and Recycling  (Company news)

Company Supporting Food Industry’s Efforts to Reduce Global Food Waste

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, announced the expansion of its environmental and social stewardship initiatives to include commitments to achieve greater packaging sustainability and recycling in support the food industry’s efforts to reduce global food waste. These new time-based commitments, along with an update of the Company’s ongoing efforts to improve environmental, governance and social measure, are highlighted in its 2017-18 Corporate Responsibility Report, entitled Better Packaging, Better Life – for a Better World, which is available on the Company’s website at www.sonoco.com/sustainability.

Specifically, Sonoco set out key commitments for more sustainable use and increased recyclability of packaging by 2025, including:
-Sonoco will increase the equivalent by weight, the amount it recycles, or causes to be recycled, from 75 percent to 85 percent, relative to the volume of packaging it places into to the global market place.
-Sonoco is committed to increasing the use of post-consumer recycled resins in its plastic packaging from 19 percent to 25 percent.
-Sonoco will ensure that approximately 75 percent of its rigid plastic packaging can carry the relevant on-package recyclable claim.

In addition, Sonoco will not use resin additives that purport to degrade in landfills or waterways by simply breaking up into smaller pieces. Finally, the Company will ensure all of its production facilities using plastic pellets have systems to prevent discharges into the environment.

According to Rob Tiede, president and chief executive officer, “Sonoco believes packaging plays an important role in protecting food from damage and spoilage, while extending shelf life at retail and home. In fact, greater adoption of food packaging technologies to prolong the shelf life of produce and proteins has the potential to divert 72,000 tons of food waste from landfills in the United States, reducing greenhouse gas emissions by 329,000 tons per year1.”

Tiede pointed out that solving the food waste challenge requires the collective intellectual capital and collaboration of industry experts and though leaders in food science, agriculture, horticulture, packaging, transportation and material science. In response to this challenge, Sonoco has committed $2.725 million to Clemson University to create a joint initiative called SonocoFRESH. Sonoco is also a joint development partner in the Plant City, Fla-based robotics company Harvest CROO Robotics, which is focused on improving the supply chain for fresh produce by connecting harvesting technology with new packaging technology.

1Data based on an analysis from the organization Rethink Food Waste through Economics and Data (ReFED). More insights on Sonoco’s more sustainable packaging initiatives can be reviewed in a whitepaper: “How Packaging Can Help solve Our Food Waste Problem,” which is available at www.sonoco.com/sustainability.

“Our mission is to deliver breakthroughs to help the entire packaging industry and ultimately have a major impact on reducing food waste, while increasing access to fresh, nutritional foods for millions of people,” Tiede said. “Meeting this challenge requires a holistic approach to the entire lifecycle, and working to identify opportunities to reimagine process, science and technologies associated with harvesting, packaging, supply chain and consumer education and perception.”

Sonoco’s Corporate Responsibility Report also highlighted several key environmental milestones accomplished over the past year, including reducing total greenhouse gas emissions from operations by approximately 6.2 percent, and reducing total landfill disposal by approximately 9.4 percent.

In addition, the Company’s Diversity and Unity Council continued its work to create a diverse workforce within an inclusive environment by sponsoring several business resource groups and fostering diversity and inclusion education, awareness and communication. The Council added the LGBT+ business resource group in 2018, joining military professionals, young professionals and employee volunteer groups.

And, the Company launched the SonocoWORKS apprenticeship program across the U.S. to train internal and external maintenance candidates, both academically and on the job, continuing the Company’s tradition of developing highly talented multi-craft professionals.
(Sonoco Products Co)

Newsgrafik #120728
 01.08.2018

Sonoco Reports Strong Second Quarter 2018 Results  (Company news)

-Double-Digit Improvement to Top-line and Bottom-line Drives Record Quarter Results
-Company Increases 2018 Full-Year Guidance

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, reported financial results for its second quarter, ending July 1, 2018.

Second Quarter Highlights
- Second-quarter 2018 GAAP earnings included after-tax charges of $4.4 million related to restructuring and acquisition-related expenses. In the second quarter of 2017, GAAP results included $28.7 million, after tax, in charges for lump-sum pension settlement distributions, restructuring-related activities and acquisition expenses.
- Base net income attributable to Sonoco (base earnings) for second quarter 2018 was $0.93 per diluted share, compared with $0.71 in 2017. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.) Sonoco previously provided second-quarter 2018 base earnings guidance of $0.83 to $0.89 per diluted share.
- Second-quarter 2018 net sales were $1.37 billion, up 10.1 percent from $1.24 billion in 2017.
- Cash flow from operations was $251.2 million in the first half of 2018, compared with $103.2 million in 2017. Year-to-date free cash flow was $88.8 million, compared with $(69.3) million in 2017. (See free cash flow definition and reconciliation to cash flow from operations later in this release.)
- On May 29, 2018, Sonoco signed a definitive agreement with Texpack, Inc. to acquire its 70 percent interest in the Conitex Sonoco joint venture and Texpack's composite can operation in Spain for approximately $143 million in cash. Conitex Sonoco is a vertically integrated global leader in the manufacturing of paper-based cones and tubes used in the textile industry. The transaction is subject to normal international regulatory reviews and is expected to close early in the fourth quarter of 2018. Conitex Sonoco will be included in our Paper and Industrial Converted Products Segment and the Spanish composite can operation in our Consumer Segment.

Third Quarter and Full-Year Guidance Update
-Base earnings for the third quarter of 2018 are estimated to be in the range of $0.82 to $0.88 per diluted share, compared to $0.76 per diluted share in the third quarter of 2017.
-Full-year 2018 base earnings guidance has been raised to $3.27 to $3.37 per diluted share, from the previous guidance of $3.22 to $3.32 per diluted share, to reflect the Company's strong second quarter results and expected solid second half results despite additional expenses anticipated from recently enacted tariffs on steel, aluminum and other products along with higher than previously expected freight and other non-material inflation. This new guidance does not include possible benefit from the expected completion of the Conitex Sonoco acquisition.
-Full-year 2018 operating cash flow and free cash flow guidance has been raised to a range of $570 million to $590 million and $190 million and $210 million, respectively.

CEO Comments
Commenting on the Company’s second-quarter GAAP and base results, President and Chief Executive Officer Rob Tiede (photo) said, "Sonoco produced an outstanding quarter as our growing diversified mix of global packaging businesses improved both the top-line and bottom-line by double-digits over prior-year consolidated results. Net sales grew by 10.1 percent, while operating profit improved 25.4 percent and net income attributable to Sonoco gained 107.3 percent compared to last year. Base operating profit and base net income attributable to Sonoco improved 16.9 percent and 30.6 percent, respectively. Second-quarter GAAP and base operating profit benefitted from a positive price/cost relationship and improvements to productivity, which were partially offset by operating cost inflation and higher management incentives. Overall volume/mix was modestly higher compared to the prior-year quarter, with each business segment showing improvement. The year-over-year improvement also reflects a lower effective tax rate due to the 2017 Tax Cuts and Jobs Act. GAAP operating profit was further aided by lower restructuring and impairment charges compared to 2017. In addition, cash flow from operations and free cash flow were extremely strong during the first six months of 2018, with cash flow from operations improving approximately $148.1 million over the prior year.

“Net sales in our Consumer Packaging segment grew 18.2 percent over the prior year, while operating profit improved by approximately 5.5 percent. A positive price/cost relationship, solid productivity gains, the benefit of acquisitions and a slight improvement in volume/mix drove the second quarter operating profit increase and more than offset higher operating inflation.

“Our Paper and Industrial Converted Products segment achieved a record second-quarter operating profit, improving 35.4 percent from last year, while net sales grew 1.1 percent. The gain in segment operating profit was primarily driven by a positive price/cost relationship and better volume/mix, which more than offset higher operating costs.

“Our Protective Solutions segment produced a solid turnaround, with operating profit improving 23.7 percent from last year as a positive price/cost relationship and productivity improvements helped offset higher operating inflation. Finally, our Display and Packaging segment operating profit declined as volume growth, a positive price/cost relationship and productivity improvements were more than offset by a negative mix of business and higher operating costs driven by the continued ramp up of operations at our new pack center in Atlanta.”

Second Quarter Review
Net sales for the second quarter were $1.37 billion, an increase of $125.7 million, or 10.1 percent, from last year’s quarter. The improvement reflects an increase in sales added by acquisitions, volume growth, the positive impact of foreign exchange and higher selling prices implemented to recover rising freight and other operating inflation.

GAAP net income attributable to Sonoco in the second quarter was $89.4 million, or $0.88 per diluted share, an increase of $46.3 million, compared with $43.1 million, or $0.43 per diluted share, in 2017. Second-quarter GAAP earnings included after-tax charges of $4.4 million related to restructuring and acquisition-related expenses. In the second quarter of 2017, GAAP earnings included $28.7 million after tax, related to lump-sum pension settlement distributions, restructuring costs from previously announced plant closures and acquisition-related expenses. Adjusted for these items, base earnings in the second quarter were $93.8 million, or $0.93 per diluted share, an increase of $22.0 million compared with $71.8 million, or $0.71 per diluted share, in 2017. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring-related items, asset impairment charges, acquisition expenses and certain income tax-related events and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the ongoing operating performance of the business. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)

Gross profits were a record $276.5 million in the second quarter, an increase of $38.1 million or 16.0 percent, compared with $238.4 million in the same period in 2017. Gross profit as a percentage of sales increased to 20.2 percent, compared with 19.2 percent in the same period in 2017. The 100 basis point gross profit percentage increase was primarily due to manufacturing and procurement productivity, partially offset by higher operating costs.
Second-quarter selling, general and administrative expenses increased $15.7 million from the prior year to $141.0 million. This increase was driven by expenses related to acquired businesses, wage inflation and higher management incentive accruals.

Segment Review
Sonoco reports its financial results in four operating segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. Segment operating results do not include restructuring and asset impairment charges, acquisition expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis.

Consumer Packaging
Sonoco’s Consumer Packaging segment includes the following products and services: round and shaped rigid containers and trays (both composite and thermoformed plastic); extruded and injection-molded plastic products; printed flexible packaging; global brand artwork management; and metal and peelable membrane ends and closures.

Second-quarter 2018 sales for the segment were $616 million, compared with $521 million in 2017. Segment operating profit was $63.7 million in the second quarter, compared with $60.4 million in the same quarter of 2017.

Segment sales increased 18.2 percent compared to the prior-year quarter due to sales added from acquisitions, the positive impact from changes in foreign exchange rates, and higher selling prices. Sales volume also increased as higher sales volume in flexible packaging and European and Asian composite cans exceeded a decline in plastic container sales volume. Segment operating profit grew 5.5 percent compared to the prior-year quarter due to a positive price/cost relationship, solid productivity gains, and the benefit of acquisitions which more than offset higher operating expenses due to inflation and higher management incentives. Segment operating margin declined to 10.3 percent in the quarter from 11.6 percent in 2017 due to changes in the mix of business, including changes from acquisitions, and higher operating costs.

Display and Packaging
The Display and Packaging segment includes the following products and services: designing, manufacturing,
assembling, packing and distributing temporary, semi-permanent and permanent point-of-purchase displays; supply chain management services, including contract packing, fulfillment and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities, such as coasters and glass covers.

Second-quarter 2018 sales for this segment were $143 million, compared with $116 million in 2017. The segment reported an operating loss of $(0.6) million in the current quarter, compared with an operating profit of $1.5 million in the prior-year quarter.

Sales increased 23.9 percent compared to last year’s quarter due primarily to volume growth from a new pack center near Atlanta and the positive impact of foreign exchange. Segment operating profit declined $2.0 million largely due to inefficiencies and higher operating costs associated with the start up of new production lines at the Atlanta pack center. The Company is continuing to work to resolve these and other operational issues to achieve efficiency and cost levels in line with expectations.

Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes and cores; fiber-based construction tubes; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper and material recycling services.

Second-quarter 2018 sales for the segment were $474 million, up from $469 million in 2017. Segment operating profit was $61.5 million in the quarter, compared with $45.4 million in 2017.

Segment sales grew 1.1 percent from the prior-year quarter as volume/mix growth and the positive impact of foreign exchange more than offset lower selling prices associated with lower recovered paper prices. Volume/mix gains in North American paper operations as well as wire and cable reels were partially offset by declines in North American and European tube and core volumes. Segment operating profit improved 35.4 percent over the prior year driven by a positive price/cost relationship across most of the segment, excluding recycling operations. Segment operating margin improved 330 basis points to 13.0 percent.

Protective Solutions
The Protective Solutions segment includes the following products: custom-engineered, paperboard-based and expanded foam protective packaging and components; and temperature-assured packaging.

Second-quarter 2018 sales were $133 million, down slightly from $135 million in 2017. Operating profit was $13.6 million, a 23.7 percent improvement from the second quarter of 2017.

This segment’s sales declined slightly year over year as the negative impact of declining foreign exchange rates offset higher selling prices. Volume/mix was essentially flat as continued declines in the segment’s automotive components business was offset by growth in temperature-assured packaging. Improvement in segment operating profit for the quarter was driven by a positive price/cost relationship and productivity improvements more than offsetting higher operating inflation. Segment operating margin was 10.3 percent, an improvement of 210 basis points.

Corporate/Tax
Net interest expense for the second quarter of 2018 increased to $15.1 million, compared with $12.8 million during the same period in 2017, primarily due to higher borrowings in the current-year quarter stemming from acquisitions. The 2018 second-quarter effective tax rates on GAAP and base earnings were 26.1 percent and 26.7 percent, respectively, compared with 29.6 percent and 32.0 percent, respectively, in the prior year’s quarter. The 2017 U.S. Tax Cuts and Jobs Act (Tax Act) lowered the year-over-year effective tax rate on both GAAP and base earnings. The prior year's GAAP tax rate benefitted from a favorable distribution of earnings between low and high tax jurisdictions, primarily from the previously discussed pension settlement expense occurring in the U.S. This lessened the year-over-year change in the GAAP effective tax rate.

Note: In regards to the effect of the Tax Act, Sonoco has not yet fully completed its accounting. For certain of the Tax Act's provisions, the Company has made reasonable estimates and has included any measurement period adjustments in its second quarter and first six months earnings accordingly. In other cases, the Company has not been able to make a reasonable estimate due either to complexity or uncertainty and, as such, continues to account for those items consistent with their pre-Tax Act accounting. The Company believes any adjustments remaining to be made upon the completion of its accounting will not have a material impact on the Company's financial position.

Year-to-date Results
For the first six months of 2018 net sales were $2.67 billion, up $257.6 million compared with $2.41 billion in the first six months of 2017. Sales grew 10.7 percent in the first half of the year due to acquisitions, the positive impact of foreign exchange, volume growth and higher selling prices implemented to recover higher freight and operating inflation and certain rising material costs.

GAAP net income attributable to Sonoco for the first half of 2018 was $163.5 million or $1.62 per diluted share, compared with $96.9 million or $0.96 per diluted share in the first half 2017. Earnings in the first half of 2018 included after-tax charges totaling $5.0 million largely related to restructuring charges, acquisition costs and the effect of income tax rate changes on deferred tax items. Earnings in the first half of 2017 included net after-tax charges of $34.9 million primarily related to lump-sum pension settlements, restructuring charges and acquisition-related expenses.

Base earnings for the first six months of 2018 were $168.5 million, or $1.67 per diluted share, compared with $131.7 million, or $1.31 per diluted share, in the same period in 2017, a 27.9 percent and 27.5 percent increase, respectively. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)

Current year-to-date gross profit was a record $527.1 million, compared with $461.4 million in 2017. Gross profit as a percentage of sales in 2018 was 19.7 percent, compared with 19.1 percent in 2017. Selling, general and administrative expenses increased $28.0 million, driven by acquisitions and increased management incentives. Non-Operating Pension costs decreased $37.9 million as the previously disclosed 2017 settlement charges did not recur in 2018. Base operating profit for the first six months of 2018 increased 15.0 percent to $251.5 million due primarily to a positive price/cost relationship and productivity improvements.

Cash Flow and Free Cash Flow
For the first half of 2018, cash generated from operations was $251.2 million, compared with $103.2 million in 2017, an increase of $148.1 million. This increase reflects the improvement in GAAP net income of $66.6 million and the following described year-over-year changes. In 2018, year-to-date net cash paid for taxes was $2.9 million less than reported tax expense while in 2017 it was $20.9 million more, a year-over-year benefit of $23.8 million. This difference is largely due to the timing of taxes paid on the 2016 sale of our blowmolding plastics business and normal changes in various deferred tax items. Pension and post-retirement plan contributions, net of non-cash expenses, had a negative year-over-year impact of $13.4 million. This change is composed of a $24.4 million year-over-year decrease in cash contributions that was more than offset by a $37.8 million decrease in non-cash expense which was largely driven by 2017 non-base pension settlement charges of $31.1 million which did not recur in 2018. Year-to-date increases in working capital, driven largely by seasonal changes in business activity, consumed cash in both periods; however, this increase consumed $11.0 million less cash in 2018 due to improved collection efforts of trade accounts receivables in the first six months of 2018. Operating cash flow further benefited in the first six months of 2018 from collections of various other items outstanding at December 31, 2017 and increased accruals related to management incentives in 2018 compared to 2017. During the first six months of 2018, net capital expenditures and cash dividends were $82.7 million and $79.8 million, respectively, compared with $96.8 million and $75.6 million, respectively, in 2017.

Free cash flow for first six months of 2018 was $88.8 million, compared with a negative $69.3 million in the same period last year, reflecting the items impacting cash flow from operations discussed above. (See free cash flow description and reconciliation later in this release. Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures are defined as capital expenditures minus proceeds from, and/or plus costs incurred in, the disposition of capital assets.)

As of July 1, 2018, total debt was approximately $1.45 billion, compared with $1.45 billion as of December 31, 2017. At the end of the first half of 2018, the Company had a total-debt-to-total-capital ratio of 44.8 percent, compared with 45.6 percent at December 31, 2017. Cash and cash equivalents were $197.7 million as of July 1, 2018, compared with $254.9 million at December 31, 2017. The reduced cash balance reflects repatriation of $110 million of offshore cash, which was then used to repay short-term U.S. debt, helping offset borrowings to fund the April 12, 2018 acquisition of Highland Packaging Solutions for approximately $150 million, of which $8 million is deferred.

Third Quarter and Full-Year 2018 Outlook
Sonoco expects third-quarter 2018 base earnings to be in the range of $0.82 to $0.88 per diluted share. Base earnings in the third quarter of 2017 were $0.76 per diluted share. Full-year 2018 base earnings per diluted share are expected to be in a range of $3.27 to $3.37, which is an increase from the previous estimate of $3.22 to $3.32 per diluted share. This increase reflects the Company's strong second quarter results and expected solid performance in the second-half of the year despite additional expenses anticipated from recently enacted tariffs on steel, aluminum and other products along with higher than previously expected freight and other non-material inflation. This new guidance reflects an expected 26 percent effective tax rate and does not include possible benefits from the completion of the Conitex Sonoco acquisition. Operating and free cash flow guidance for 2018 has been raised and is expected to be in the range of $570 million to $590 million and $190 million to $210 million, respectively.

Although the Company believes the assumptions reflected in the range of guidance are reasonable, given uncertainty regarding the impact of new and potential tariffs, the future performance of the overall economy, potential changes in raw material prices and other costs, potential changes in the estimated impact of the Tax Act on the Company's effective tax rate, as well as other risks and uncertainties, including those described further below, actual results could vary substantially.

Commenting on the Company’s outlook, Tiede said, “Our team achieved a great deal in the first half of 2018, including driving record top-line and bottom-line consolidated results and producing strong cash flow from operations and free cash flow. The acquisition of Highland Packaging Solutions further enhances our capabilities and opportunities for continued expansion in the fast-growing, fresh-food perimeter of the supermarket. Looking forward, we’re projecting year-over-year improvement in the second half which, together with stronger than expected second quarter results, led us to raise our 2018 guidance. Our growth and margin improvement targets for 2018 remain on track, with sales up 10.7 percent and base operating margin up a solid 35 basis points from the first half of last year. We are excited about the Conitex Sonoco acquisition, which creates opportunities for us to further grow our Paper/Industrial Converted Products segment, especially in the fast-growing Asian markets.

“Like many companies, we are facing inflationary cost pressure from higher freight, wages, energy and material costs, particularly resins, along with uncertain headwinds from newly imposed or threatened tariffs. This is requiring us to drive cost-recovery through proactive price increases in many of our businesses. Although recovered paper prices appear to have stabilized for the time being, experts believe they could rise in the second half of the year, in which case we would not enjoy the same price/cost benefit we saw in the first half of the year. Overall, we remain optimistic about general economic activity and believe the breadth of our diversified consumer, industrial and protective operations across a number of markets enhances our ability to produce consistent earnings, improved returns and greater rewards for our shareholders."
(Sonoco Products Co)

Newsgrafik #119926
 02.05.2018

Sonoco Reports Strong First Quarter 2018 Results  (Company news)

Top-line and Bottom-line Results Achieve Double-Digit Improvement
Company Raises Full-Year Guidance

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, reported financial results for its first quarter, ending April 1, 2018.

First Quarter Highlights
-First-quarter 2018 GAAP earnings per diluted share were $0.73, compared with $0.53 in 2017.
-First-quarter 2018 GAAP earnings included after-tax charges of $0.01 per diluted share related to restructuring and acquisition-related expenses, which were mostly offset by the effect of the change in the U.S. corporate tax rate on adjustments to deferred taxes. In the first quarter of 2017, GAAP results included $0.06 per diluted share, after tax, in restructuring and acquisition-related charges.
-Base net income attributable to Sonoco (base earnings) for first quarter 2018 was $0.74 per diluted share, compared with $0.59 in 2017. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.) Sonoco previously provided first-quarter 2018 base earnings guidance of $0.69 to $0.75 per diluted share.
-First-quarter 2018 net sales were $1.30 billion, up 11.2 percent, from $1.17 billion in 2017.
-Cash flow from operations was $119.8 million in the first quarter of 2018, compared with $67.4 million in 2017. Free cash flow for the first quarter was $44.9 million, compared with $(18.4) million in 2017. (See free cash flow definition and reconciliation to cash flow from operations later in this release.)
-On April 12, 2018, Sonoco completed the acquisition of Highland Packaging Solutions, a Plant City, Fla.-based, leading manufacturer of thermoformed packaging for fresh fruits, vegetables and eggs for approximately $150 million in cash.

Second Quarter and Full-Year Guidance Update
-Base earnings for the second quarter of 2018 are estimated to be in the range of $0.83 to $0.89 per diluted share, compared to $0.71 per diluted share in the second quarter of 2017.
-Full-year 2018 base earnings guidance has been raised to $3.22 to $3.32 per diluted share, from the previous guidance of $3.16 to $3.26 per diluted share, to reflect a downward revision in the expected effective tax rate to approximately 26 percent and expected earnings accretion from the Highland Packaging acquisition.
-Full-year 2018 operating cash flow and free cash flow guidance remain in the range of $560 million to $580 million and $180 million and $200 million, respectively.

CEO Comments
Commenting on the Company’s first-quarter GAAP and base results, Sonoco President and Chief Executive Officer Rob Tiede (photo) said, “Sonoco's growing diversified mix of Consumer- and Industrial-related packaging businesses achieved record consolidated top-line and bottom-line results in the first quarter, with each improving by double-digits over prior-year consolidated results. Net sales grew by 11.2 percent, while operating profit improved 17.6 percent and net income attributable to Sonoco gained 37.8 percent compared to last year. Base operating profit and base net income attributable to Sonoco improved 12.8 percent and 24.6 percent, respectively. First-quarter GAAP and base operating profit benefitted from a positive price/cost relationship and improvements to productivity, which were partially offset by a negative mix of business and operating cost inflation. Overall volume was up slightly compared to the prior-year quarter, despite the impact of one fewer business day. GAAP operating profit was further aided by less restructuring asset impairment charges in 2018 compared to 2017.”

“Net sales in our Consumer Packaging segment grew 18.2 percent over the prior year, while operating profit improved by approximately 2.7 percent. Improved productivity, a positive price/cost relationship and the benefit of acquisitions drove the first quarter operating profit increase and more than offset higher operating inflation and lower volume/mix.

“Our Paper and Industrial Converted Products segment reported its strongest first-quarter operating profit in 10 years, improving 48.2 percent from last year, while net sales grew 4.1 percent. The improvement in segment operating profit was primarily driven by a positive price/cost relationship, which more than offset higher operating costs and lower volume/mix which was driven by the current period having one less day than the prior period.

“Operating profit from our Protective Solutions segment was down slightly from last year as productivity improvements helped offset lower volume/mix, primarily in the segment’s automotive components business. Display and Packaging segment operating profit was lower than last year due to higher operating costs and a negative mix of business associated with the segment’s domestic pack center and display businesses. However, both of these segments registered sequential quarterly improvement as efforts to address the current challenges in these businesses are beginning to show positive results.”

First Quarter Review
Net sales for the first quarter were $1.30 billion, an increase of $131.9 million, or 11.2 percent, from last year’s quarter. The improvement reflects an increase in sales added by acquisitions, the positive impact of foreign exchange, higher selling prices implemented to recover rising freight, wages and operating inflation, and modest volume growth.

GAAP net income attributable to Sonoco in the first quarter was $74.1 million, or $0.73 per diluted share, an increase of $20.3 million, compared with $53.7 million, or $0.53 per diluted share, in 2017. Base earnings in the first quarter were $74.6 million, or $0.74 per diluted share, an increase of $14.8 million compared with $59.9 million, or $0.59 per diluted share, in 2017. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring-related items, asset impairment charges, acquisition expenses and certain income tax-related events and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the ongoing operating performance of the business. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)

First-quarter GAAP earnings included after-tax charges of $2.4 million, or $0.02 per diluted share, related to restructuring and acquisition-related expenses. These charges were mostly offset by the effect of the change in the US corporate tax rate on deferred tax adjustments and a gain from a casualty loss insurance settlement totaling $1.8 million, or $0.02 per diluted share. In the first quarter of 2017, GAAP earnings included $6.1 million or $0.06 per diluted share, after tax, in restructuring charges and acquisition-related expenses.

Gross profits were a record $250.6 million in the first quarter, an increase of $27.6 million or 12.4 percent, compared with $223.0 million in the same period in 2017. Gross profit as a percentage of sales increased to 19.2 percent, compared with 19.0 percent in the same period in 2017. The gross profit percentage increase was primarily due to manufacturing and procurement productivity mostly offsetting higher raw material and other operating costs.

First-quarter selling, general and administrative expenses increased $12.2 million from the prior year to $137.4 million. This increase was driven by expenses related to acquired businesses, wage inflation and higher management incentive accruals.

Segment Review
Sonoco reports its financial results in four operating segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. Segment operating results do not include restructuring and asset impairment charges, acquisition expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis.

Consumer Packaging
Sonoco’s Consumer Packaging segment includes the following products and services: round and shaped rigid containers and trays (both composite and thermoformed plastic); extruded and injection-molded plastic products; printed flexible packaging; global brand artwork management; and metal and peelable membrane ends and closures.

First-quarter 2018 sales for the segment were $570 million, compared with $482 million in 2017. Segment operating profit was $61.1 million in the first quarter, compared with $59.5 million in the same quarter of 2017.

Segment sales increased 18.2 percent compared to the prior-year quarter due to sales added from acquisitions, the positive translation impact of changes in foreign exchange rates, and higher selling prices. Segment operating profit grew 2.7 percent compared to the prior-year quarter due to productivity improvements, a positive price/cost relationship and the benefit of acquisitions, partially offset by a negative change in volume/mix, higher wages and operating costs. Higher sales volume/positive sales mix in global plastics and international composite can operations were more than offset by lower composite can volume in North America. Segment operating margin declined to 10.7 percent in the quarter from 12.3 percent in 2017 due to higher operating costs, certain resin material inflation and changes in mix of business, including acquisitions.

Display and Packaging
The Display and Packaging segment includes the following products and services: designing, manufacturing, assembling, packing and distributing temporary, semi-permanent and permanent point-of-purchase displays; supply chain management services, including contract packing, fulfillment and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities, such as coasters and glass covers.

First-quarter 2018 sales for this segment were $143 million, compared with $115 million in 2017. The segment reported an operating profit of $1.7 million in the current quarter, compared with an operating profit of $3.2 million in the prior year.

Sales increased 24.4 percent compared to last year’s quarter due primarily to volume growth from a new pack center near Atlanta and the positive impact of foreign exchange. Segment operating profit declined $1.5 million largely due to inefficiencies and higher operating costs associated with the ramp up of production at the new pack center. While results from the new pack center showed sequential quarterly improvement, the Company is continuing to work to resolve these and other operational issues and remains optimistic that over time the pack center will be able to achieve efficiency and cost levels in line with expectations.

Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes and cores; fiber-based construction tubes; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper and material recycling services.

First-quarter 2018 sales for the segment were $461 million, up from $443 million in 2017. Segment operating profit was $39.8 million in the quarter, compared with $26.9 million in 2017.

Segment sales grew 4.1 percent from the prior-year quarter due to the positive impact of foreign exchange and higher selling prices implemented to recover higher freight and other operating costs, partially offset by lower volume/mix. Volume/mix gains in wire and cable reels as well as North America and European paper operations were more than offset by declines in North America tube and core and recycling volumes. Segment operating profit surged 48.2 percent over the prior year driven by a positive price/cost relationship across most of the segment, including continued improvement in the Company's corrugating medium operations. Segment operating margin improved 250 basis points to 8.6 percent.

Protective Solutions
The Protective Solutions segment includes the following products: custom-engineered, paperboard-based and expanded foam protective packaging and components; and temperature-assured packaging.

First-quarter 2018 sales were $131 million, down slightly from $133 million in 2017. Operating profit was $10.7 million, essentially flat with the first quarter of 2017.

This segment’s sales declined slightly year over year as the positive impact of foreign exchange and higher selling prices was offset by lower volume/mix, primarily in the segment’s automotive components business. While first-quarter segment operating profit was flat compared to the 2017 quarter, it improved sequentially as the segment is focused on reducing fixed costs in response to lower automotive component volume. Segment operating margin was 8.2 percent, essentially flat with the prior-year quarter.

Corporate/Tax
Net interest expense for the first quarter of 2018 increased to $13.4 million, compared with $12.1 million during the same period in 2017, primarily due to higher average borrowings in the current-year quarter stemming from acquisitions made in 2017. The 2018 first-quarter effective tax rates on GAAP and base earnings were 24.1 percent and 25.9 percent, respectively, compared with 32.8 percent and 30.9 percent, respectively, in the prior year’s quarter. Although the 2017 U.S. Tax Cuts and Jobs Act (Tax Act) lowered the year-over-year effective tax rate on both GAAP and base earnings, it had a more meaningful impact on certain non-base items resulting in a larger decrease in the GAAP rate.

Note: In regards to the effect of the Tax Act, Sonoco has not yet been able to fully complete its accounting. For certain of the Tax Act's provisions, the Company has made reasonable estimates and has included any measurement period adjustments in its first quarter earnings accordingly. In other cases, the Company has not been able to make a reasonable estimate due either to complexity or uncertainty and, as such, continues to account for those items consistent with their pre-Tax Act accounting. The Company believes any adjustments remaining to be made upon the completion of its accounting will not have a material impact on the Company's financial position.

Cash Flow and Free Cash Flow
For the first quarter of 2018, cash generated from operations was $119.8 million, compared with $67.4 million in 2017, an increase of $52.4 million. The $20.6 million improvement in GAAP net income along with a decrease in cash contributions to pension and post-retirement plans, net of non-cash expenses, of $21.0 million drove the year-over-year increase. Increased business activity from year-end in both periods consumed cash through increases in working capital; however, 2018 consumed more cash than 2017. This was partially offset by collections of various items outstanding at December 31, 2017. During 2018 first quarter, net capital expenditures and cash dividends were $36.0 million and $38.8 million, respectively, compared with $49.0 million and $36.8 million, respectively, in 2017.

Free cash flow for first 2018 quarter was $44.9 million, compared with a negative $18.4 million in the same period last year, reflecting the items impacting cash flow from operations discussed above. Free cash flow is a non-GAAP financial measure that may not represent the amount of cash flow available for general discretionary use because it excludes non-discretionary expenditures, such as mandatory debt repayments and required settlements of recorded and/or contingent liabilities not reflected in cash flow from operations. (See free cash flow reconciliation later in this release. Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures are defined as capital expenditures minus proceeds from, and/or plus costs incurred in, the disposition of capital assets.)

As of April 1, 2018, total debt was approximately $1.46 billion, compared with $1.45 billion as of December 31, 2017. At the end of 2018 first quarter, the Company had a total-debt-to-total-capital ratio of 44.9 percent, compared with 45.6 percent at December 31, 2017. Cash and cash equivalents were $305.3 million as of April 1, 2018, compared with $254.9 million at December 31, 2017. On April 12, 2018, in conjunction with the previously mentioned purchase of Highland Packaging Solutions, the Company entered into a new $100.0 million Term Loan Facility.

Second Quarter and Full-Year 2018 Outlook
Sonoco expects second-quarter 2018 base earnings to be in the range of $0.83 to $0.89 per diluted share. Base earnings in the second quarter of 2017 were $0.71 per diluted share.

Full-year 2018 base earnings per diluted share are expected to be in a range of $3.22 to $3.32, which is an increase from the previous estimate of $3.16 to $3.26. The increase in the Company’s 2018 base earnings guidance is due to a reduction in the expected annual effective tax rate to approximately 26 percent, compared to the previous estimate of 27 percent, and expected earnings accretion from the recent acquisition of Highland Packaging Solutions.

Operating and free cash flow guidance remains unchanged for 2018 and is expected to be in the range of $560 million to $580 million and $180 million to $200 million, respectively.

Although the Company believes the assumptions reflected in the range of guidance are reasonable, given uncertainty regarding the future performance of the overall economy and potential changes in raw material prices and other costs, potential changes in the estimated impact of the Tax Act on the Company's effective tax rate, as well as other risks and uncertainties, including those described further below, actual results could vary substantially.

Commenting on the Company’s outlook, Tiede said, “We’re off to a good start to 2018 as our two largest segments, Consumer Packaging and Paper/Industrial Converted Products, showed solid improvement in the first quarter and we’re beginning to gain traction in improving the performance of our Protective Solutions and Display and Packaging segments."

“Overall, we’re projecting a strong second quarter for Sonoco as our Consumer Packaging segment will benefit from the recently completed acquisition of Highland Packaging Solutions, which further complements our growing thermoformed plastic packaging strategy serving fresh fruits, vegetables and dairy products found in the fast-growing perimeter of the supermarket. We also expect strong second-quarter performance from our Paper/Industrial Converted Products segment as we believe demand should be good and expect to continue to benefit from a favorable price/cost relationship. As a result, along with our expectations for a lower effective tax rate, we have raised full-year 2018 base earnings guidance by six cents per share and now target annual base earnings to improve more than 17 percent, year over year.

“But we still have work to do to meet our growth and margin improvement targets in 2018. Inflationary cost pressures in freight, labor, energy and material costs, particularly resins, are requiring us to drive recovery through price increases in many of our businesses. Furthermore, we must work to find effective solutions for our packaged food customers to help them reverse recent headwinds as consumers focus on fresh food alternatives and expanding e-commerce options. Finally, we must continue to drive a turnaround of our Display and Packaging and Protective Solutions segments. We remain confident that our blend of paper, polymer and protective packaging businesses will continue to produce consistent earnings, improved returns and greater rewards for our shareholders.”
(Sonoco Products Co)

Newsgrafik #119734
 10.04.2018

Sonoco Welcomes Robert C. Tiede as President and CEO  (Company news)

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, announced the start of Robert C. Tiede’s (photo) tenure as the new President and CEO of Sonoco. Tiede replaces the retiring Jack Sanders, who served as President and CEO since 2013. Tiede will be the ninth CEO of the 119-year-old company.

“It’s humbling, and truly an honor to have the opportunity to lead such a storied company, with a legacy going back more than a century,” said Tiede. “This is an exciting time for Sonoco as we continue to evolve our portfolio and geographic footprint in ways that help us serve our purpose, Better Packaging. Better Life., while delivering value to our shareholders, our customers and our teammates.”

Prior to being named CEO, Rob served as Executive Vice President and Chief Operating Officer of Sonoco, with global leadership, sales and operating responsibility for all of the Company’s diversified consumer, industrial and protective packaging businesses.

“Rob has made significant contributions to Sonoco over the past fourteen years, especially as we have worked to expand our consumer packaging business,” said Board Chairman Harris DeLoach. “We look forward to Rob’s leadership as we continue to build upon our existing foundation, while charting new courses for growth.”

Since joining Sonoco in 2004, Tiede has led all of Sonoco’s global consumer-related businesses, including Rigid Paper Containers, Flexible Packaging, Plastics and Display and Packaging. Before becoming Executive Vice President and COO, Tiede served as Senior Vice President, Global Consumer Packaging and Services, responsible for the Company’s Corporate Customer program as well as its Rigid Plastics, Flexibles and Display and Packaging businesses. Tiede was named to that position in December 2012. During his tenure at Sonoco, the Company’s consumer-related businesses have increased sales by approximately 90 percent and operating profits by 120 percent, as the Company’s consumer growth strategy developed broader global packaging and services capabilities.

Tiede joined Sonoco as president of Sonoco CorrFlex with the 2004 acquisition of CorrFlex Graphics’ point-of-purchase merchandising display and supply chain management business. In 2006, Tiede assumed responsibility for Sonoco’s global packaging services business, and in 2007 he was named division vice president and general manager of the Company’s Flexible Packaging division. Prior to joining Sonoco, Tiede worked in private equity as president of Bostic Packaging/CorrFlex from 2000 to 2004 and president of Sterling International from 1998 to 2000. He also served as Executive Vice President of operations for Graphic Packaging International, Inc.’s flexible packaging division from 1994 to 1998.

Tiede is active in industry and community organizations and is the outgoing chairman of the Flexible Packaging Association and the chairman of the Hartsville United Way. A native of Winnipeg, Manitoba, Canada, Tiede became a U.S. citizen in 2013. He and his wife, Val, maintain a home in Hartsville, S.C. and have three grown children.
(Sonoco Products Co)

Newsgrafik #118813
 18.12.2017

Sonoco announces 5-year, $2.725 million fresh packaging initiative  (Company news)

Sonoco FRESH partnership with Clemson University to develop new technologies, package formats

Sonoco (NYSE:SON), one of the largest global diversified packaging companies, has announced a new research partnership with Clemson University: the Sonoco FRESH (Food Research Excellence for Safety and Health) initiative will develop new technologies and new forms of packaging to optimize the fresh food lifecycle.

“Sonoco is committed to serving fresh brands, using packaging to tackle the challenges they face,” said Sonoco President and CEO Jack Sanders. “Optimizing fresh food packaging to extend shelf life and maintain quality makes fresh produce more accessible to communities, and helps brands and retailers extend sales opportunities and eliminate food waste.

“Each year, the food industry loses $15.6 billion due to food spoilage at retail. Modifying packaging design to extend shelf life by even one day can recover $1.8 billion of that loss – while feeding more people and reducing waste to landfills.”

To establish the multi-disciplinary hub for innovation and research to advance fresh food packaging and distribution, Sonoco will contribute $1.725 million over 5 years. The Company will also sponsor business-driven research projects totaling $1 million over that period. Sonoco FRESH is an extension of the partnership that created the Sonoco Institute of Packaging Design and Graphics at Clemson.

“Working with outstanding industry partners like Sonoco allows us to do more to develop solutions for the grand challenges facing the world, and it helps us to prepare our students to become future leaders,” said Clemson University President James P. Clements. “Leveraging the expertise of our faculty, Sonoco FRESH will play a key role in exposing our undergraduate and graduate students to issues related to the crisis of food waste and sustainability so that they will be informed and responsible decision makers as they enter the workforce.”

“We are honored to be working with Clemson, as reducing food waste is central to our combined efforts – and finding ways to extend freshness through new technology is key,” said Vicki Arthur, Sonoco’s senior vice president of plastic packaging and protective solutions. “We believe this partnership will deliver breakthroughs to help the entire packaging industry, and will have a major impact on the distribution of fresh food across the country and around the world.”
(Sonoco Products Co)

Newsgrafik #115993
 02.02.2017

Sonoco Implementing Price Increase for Paperboard Tubes and Cores  (Company news)

Sonoco (NYSE:SON) announced it is implementing price increases for all paperboard tubes and cores in the United States and Canada by a minimum of 8 percent.

Sonoco previously announced a 6 percent to 8 percent price increase on all paperboard tubes and cores in October 2016 and the Company is revising the increase to a minimum of 8 percent, effective with shipments beginning February 13, 2017.

“This price adjustment is necessary to recover continuing cost increases in uncoated recycled paperboard, our primary raw material, combined with higher costs for energy, labor and other input costs,” said James Harrell, corporate vice president for Sonoco’s U.S. and Canada Tubes and Cores Division.
(Sonoco Products Co)

Newsgrafik #115661
 14.12.2016

Sonoco to Invest $20 Million in New Atlanta-area Packaging Center Supporting Duracell's ...  (Company news)

... North America Operations

Company to Offer Unique Go-to-Market Packaging Solutions: Packaging Materials, Primary Packaging, Retail Merchandising Displays and Fulfillment

Sonoco (NYSE:SON), one of the largest global diversified packaging companies, announced it will invest $20 million in the development of a new packaging center to support Duracell’s new North America battery packaging operation.

Sonoco’s Display and Packaging unit will be located in Duracell’s new leased facility in the Atlanta area. Sonoco will install and operate state-of-the-art primary packaging equipment at the new center and provide all packaging materials. In addition, the Company will produce retail merchandising displays which will also be packed out at the same facility.

“This unprecedented go-to-market packaging solution for Duracell is unlike any effort provided in our industry,” said Jack Sanders, Sonoco president and chief executive officer. “Because Sonoco is a solutions company which offers multiple packaging products and services, we are able to meet all of Duracell’s unique packaging and retail merchandising needs.”

Full production is expected in the fourth quarter of 2018. Sales of packaging and services annualized over the five-year contract period are expected to be more than $50 million.
(Sonoco Products Co)

Newsgrafik #115605
 12.12.2016

Sonoco Announces Senior Leadership Changes  (Company news)

Tiede Appointed Chief Operating Officer; Arthur, Coker and Fuller Promoted to Senior VP of Company’s Global Businesses

Sonoco (NYSE:SON), one of the largest global diversified packaging companies, announced several new senior leadership changes which will become effective January 3, 2017, according to M. Jack Sanders, President and Chief Executive Officer.

Robert C. Tiede (photo), 58, has been appointed Executive Vice President and Chief Operating Officer and will have global leadership, sales and operating responsibility for all of the Company’s diversified consumer, industrial and protective packaging businesses, reporting to Sanders. Since joining Sonoco in 2004, Tiede has led all of Sonoco’s global consumer-related businesses, including Rigid Paper Containers, Flexible Packaging, Plastics and Display and Packaging. During his tenure, Sonoco’s consumer-related businesses have increased sales by approximately 90 percent and operating profits by 120 percent, as the Company’s consumer growth strategy developed broader global packaging and services capabilities.

“Rob has been a key leader of our efforts to Re-Envision Sonoco to become a more innovative, consumer solutions-focused business,” said Sanders. “His ability to turn around underperforming businesses, drive innovation to spur organic growth and help build our capabilities through targeted acquisitions has been an important element in executing our Grow and Optimize strategy.”

Tiede joined Sonoco as president of Sonoco CorrFlex following the 2004 acquisition of CorrFlex Graphics’ point of purchase merchandising display and packaging business. In 2007, he became division vice president and general manager of the Company’s Flexible Packaging division and later added responsibility for all of the Company’s Consumer Packaging businesses. He became Senior Vice President in 2013 and in 2015 added responsibility for the Company’s Protective Solutions and Reels businesses. Prior to joining Sonoco, Tiede worked in private equity as president of Bostic Packaging/CorrFlex from 2000 to 2004 and president of Sterling International from 1998 to 2000. He also served as executive vice president of operations for Graphic Packaging International, Inc., heading its flexible packaging division from 1994 to 1998.

A Chartered Accountant through the Canadian Institute of Chartered Accountants, Tiede began his professional career with KPMG. Tiede is active in industry and community organizations and is the chairman of the Flexible Packaging Association and Hartsville United Way. A native of Winnipeg, Manitoba, Canada, Tiede became a U.S. citizen in 2013 and he and his wife, Val, maintain a home in Hartsville and have three grown children.

Sanders also announced the promotions of Vicki B. Arthur to Senior Vice President, Plastic Packaging and Protective Solutions; R. Howard Coker to Senior Vice President, Rigid Paper Containers and Paper/Engineered Carriers International; and Rodger D. Fuller to Senior Vice President, Paper/Engineered Carriers U.S./Canada and Display and Packaging. Each will report to Tiede.

In this new position, Arthur, 58, will have responsibility for Sonoco’s plastics businesses, including flexible packaging and thermoformed, injection molded and extruded plastics, and Protective Solutions, which includes the Company’s consumer durable paper-based packaging, molded foam components and temperature-assured packaging operations. Combined, these businesses have 52 operating facilities in North America, Europe and Asia with combined sales of approximately $1.5 billion and more than 4,000 associates.

Arthur joined Sonoco in 1984 and has held senior leadership positions in finance, including Corporate Treasurer, sales and operations. Prior to this promotion, she was Vice President, Protective Solutions. Arthur graduated from the University of South Carolina with a degree in accounting and worked in public accounting, becoming a Certified Public Accountant. In 2000, she received an MBA from Duke University. She is member of the AICPA and South Carolina Association of CPAs and is a member of the South Carolina Automotive Association. She remains active in community activities, including previously serving on the boards of Coker College, the Byerly Foundation and the Hartsville YMCA. Arthur and her husband, Stephen, have two grown children and have a home in Hartsville.

Coker, 54, has responsibility for the Company’s global composite can operations in North America, South America, Europe and Asia, as well as paper, tube and core operations in Europe, Latin America and Australasia. Combined, these businesses have annual sales of $1.8 billion, through 110 operations and 8,000 associates. Prior to this promotion, Coker was Group Vice President, and during his 31-year career he has held several leadership positions running global consumer-related and industrial businesses.

Coker holds a B.A. in business administration from Wofford College and an MBA from Wake Forest University. He is active in community and wildlife organizations, having served as past chairman of the Board of Trustees of Coker College and on the board of the Byerly Foundation and has been an active member of Ducks Unlimited. A native resident of Hartsville, he and his wife, Rhonda, have three grown children.

In this new position, Fuller, 55, has responsibility for the Company’s Paper and Engineered Carriers businesses, including 12 uncoated recycled paper mills, 24 recovered paper recycling facilities, 40 tube and core converting facilities and 16 wire and cable reels centers serving customers throughout the U.S. and Canada. In addition, he assumes responsibility for the Company’s Display and Packaging business, which operates 25 manufacturing and packaging facilities in the United States, Mexico, Poland and Brazil. Combined, these businesses have annual sales of $1.6 billion and 8,000 associates. Prior to this appointment, Fuller was Group Vice President and has held leadership positions in both Consumer and Industrial businesses during his 31-year career with Sonoco.

Fuller graduated from Berry College in Rome, Georgia, with a B.S. in business administration and received an MBA from Emory University. He is active in industry and community service organizations, including serving on the board of the Paper and Packaging Board, the American Forest and Paper Association and the Hartsville United Way. He and his wife, Helen, have two grown children and reside in Hartsville.
(Sonoco Products Co)

Newsgrafik #115205
 19.10.2016

Sonoco Invests in New Equipment to Enhance High Performance Film Core Production  (Company news)

Sonoco (NYSE:SON), one of the largest global diversified packaging companies, has made a significant investment in its high performance film core production equipment. The investment will enable Sonoco to provide enhanced quality cores for film markets where constantly increasing quality standards are so incredibly vital to the integrity of the film. The high performance film markets serviced by these cores include medical films, optical films, window films, photovoltaic applications, battery separator films, packaging films, industrial films and more.

“Many customers rely on Sonoco for highly-engineered cores that protect their investments in delicate, sensitive films. Our proprietary manufacturing processes for producing high performance film cores reduce film scrap and minimize start-up impressions while providing best in class performance on a consistent basis,” said James Harrell, vice president of Tubes & Cores, U.S. and Canada. “This investment in our Hartsville, S.C., facility shows our dedication to this industry and will greatly improve our ability to produce the highest quality products for the most demanding applications.”

Sonoco’s QS™ Series of film cores are designed to deliver a wide array of functional benefits that allow them to perform at the highest level of the High Performance Film Market:
-Smooth surfaces reduce material waste and spiral film impressions
-Straightness allows for high winding speeds and minimizes start-up wrinkles
-Excellent TIR control to ensure uniform rolls of film
-Multiple levels of dust control and cleanliness for sensitive films
-Long length capabilities to produce wide rolls of film
-Engineered core designs for safe and optimal roll weight capacities during winding and shipping
-Engineered core designs with dimensionally stable properties
(Sonoco Products Co)

Newsgrafik #114967
 28.09.2016

Sonoco Announces Price Increase for All Uncoated Recycled Paperboard Products  (Company news)

Sonoco (NYSE:SON) announced that it will raise the price for all grades of uncoated recycled paperboard (URB) products by $40 to $60 per ton depending on grade, effective with shipments in the United States and Canada, beginning October 3, 2016.

“It is critically important in a mature business, such as our paper business, to run our operations efficiently and provide a return that justifies continued investment,” said Palace Stepps, director of sales and marketing for Sonoco’s North America paper business. “The increase is necessary to capture generally higher operating costs so we can continue providing high-quality, value-adding products to our customers.”

Sonoco is one of the largest producers of uncoated recycled paperboard in the United States and Canada, producing more than one million tons annually from 11 mills. For more information about Sonoco’s complete line of URB paper products, or to learn more about current pricing, please visit the Company’s website (www.sonoco.com) or contact the Company at 1-800-377-2692.
(Sonoco Products Co)

Newsgrafik #114846
 08.09.2016

Sonoco Agrees to Sell Rigid Plastics Blow Molding Operations to Amcor  (Company news)

Sonoco (NYSE:SON) announced it has reached a definitive agreement to sell its rigid plastics blow molding operations to Amcor, a global leader of rigid and flexible packaging products, for $280 million. The transaction is subject to regulatory approvals in the United States.

Sonoco’s rigid plastics blow molding operations include seven manufacturing facilities in the U.S. and Canada with 850 employees producing containers serving the personal care and food and beverage markets.

According to Jack Sanders, Sonoco president and chief executive officer, the decision to sell the blow molding operations was made to focus the Company’s consumer packaging portfolio and provide resources to further expand its targeted growth businesses, including flexible packaging, thermoforming rigid plastics and temperature-assurance packaging for transporting pharmaceuticals, biologics and vaccines.
(Sonoco Products Co)

Newsgrafik #114580
 08.08.2016

Sonoco Reports Second Quarter 2016 Results  (Company news)

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, reported financial results for its second quarter, ending July 3, 2016.

Second Quarter Highlights
-Second quarter 2016 GAAP earnings per diluted share were $0.55, compared with $0.63 in 2015.
-Second quarter 2016 GAAP results included $0.18 per diluted share, after tax, in asset impairment and restructuring expenses largely related to the divestiture of a paper mill in France and a retail packaging business in Puerto Rico, along with other previously announced restructuring actions. In the second quarter of 2015, GAAP results included $0.05 per diluted share, after tax, in restructuring charges, acquisition costs and environmental remediation expenses partially offset by favorable litigation and tax reserve adjustments.
-Base net income attributable to Sonoco (base earnings) for second quarter 2016 was $0.73 per diluted share, compared with $0.68 in 2015. Sonoco previously provided second quarter base earnings guidance of $.65 to $.70 per diluted share.
-Second quarter 2016 net sales were $1.21 billion, down from $1.25 billion in 2015.
-Cash flow from operations was $119.7 million in the second quarter of 2016, compared with $112.8 million in 2015. Free cash flow for the second quarter was $31.9 million, compared with $32.2 million in 2015.

Third Quarter and 2016 Guidance Update
-Base earnings for the third quarter of 2016 are estimated to be in the range of $.65 to $.70 per diluted share. Base earnings in the third quarter of 2015 were $.65 per diluted share.
-Full-year 2016 base earnings have been updated to a range of $2.68 to $2.74 per diluted share, compared to previous guidance of $2.64 to $2.74. Base earnings were $2.51 in 2015.
-Free cash flow in 2016 is projected to be approximately $140 million, reflecting expected operating cash flow of $490 million. Expected free cash flow for the year is unchanged from previously communicated guidance.

Second Quarter Review
Commenting on the Company’s second quarter results, Sonoco President and Chief Executive Officer Jack Sanders (photo) said, “Our diversified mix of global packaging businesses collectively performed very well in the second quarter, producing solid results despite market and operating headwinds. Once again, our targeted growth segments - Consumer Packaging and Protective Solutions - each produced record second quarter operating profit, and our Display and Packaging segment continued to show improvement, helping offset slightly lower results in our Paper and Industrial Converted Products segment driven by operating losses in corrugating medium. Overall, the Company's earnings benefited from a positive price/cost relationship, gains from fixed cost productivity, lower pension and post-retirement benefit costs and a lower effective tax rate. Offsetting these positive factors were higher labor, maintenance and other operating costs, and the negative impact of foreign currency translation. A positive contribution from modest volume improvement in the quarter was more than offset by a negative mix of business.

“Operating profit in our Consumer Packaging segment was up 3.4 percent, reaching record levels for the seventh consecutive quarter, while segment operating margins improved 80 basis points over the same quarter last year. Overall, the segment benefited from a positive price/cost relationship and lower pension expense. These positive factors were partially offset by lower volume, higher labor, maintenance and other operating costs, and the negative impact of foreign currency exchange rates. Segment sales declined 3.8 percent due to lower selling prices, primarily related to lower raw material costs, lower volume and the negative impact of foreign currency translation. Display and Packaging segment operating profit improved significantly for the quarter due to a positive price/cost relationship and productivity improvements.

“As expected, our Paper and Industrial Converted Products segment faced headwinds in the second quarter with operating profit declining 3.8 percent from the same quarter last year due primarily to the impact of deteriorating market conditions for paper produced on our single corrugating medium machine. Absent corrugating medium, segment earnings would have been well above last year on solid improvements in volume, manufacturing productivity and fixed costs, partially offset by the negative impact of foreign currency translation. Quarterly segment sales declined 3.5 percent year over year as the negative impact of foreign currency translation, lower corrugating medium prices and the divestiture of a paperboard mill in France were only partially offset by an improvement in global tube and core and North America paperboard volume and a positive mix of business.

“For the fifth consecutive quarter, our Protective Solutions segment produced record quarterly results with operating profit up 4.5 percent over the second quarter last year as solid volume growth, particularly in temperature-assured packaging, and a positive price/cost relationship more than offset higher labor, maintenance and other operating costs and a negative mix of business.”

GAAP net income attributable to Sonoco in the second quarter was $56.3 million, or $0.55 per diluted share, compared with $64.4 million, or $0.63 per diluted share, in 2015. Base earnings in the second quarter were $74.7 million, or $0.73 per diluted share, compared with $69.5 million, or $0.68 per diluted share, in 2015. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring-related items, asset impairment charges, acquisition expenses and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the on-going operating performance of the business. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)

Second quarter base earnings exclude after-tax charges of $18.4 million, or $0.18 per diluted share, including asset impairment and restructuring expenses related to the divestiture of a paper mill in France and a packaging business in Puerto Rico, along with other previously announced restructuring actions. Second quarter base earnings in 2015 excluded $5.1 million or $0.05 per diluted share in after-tax charges, including $6.7 million, or $0.07 per diluted share, related to global plant consolidations and restructuring activities and $.03 per diluted share in environmental remediation and acquisition costs, partially offset by approximately $.04 per diluted share in after-tax gains associated with a reduction to the liability for uncertain tax positions and a reversal of Fox River litigation reserves.

Net sales for the second quarter were $1.21 billion, down $42.9 million, or 3.4 percent, from last year’s quarter. The decline in sales was a result of lower selling prices, primarily linked to lower raw material costs; the previously reported loss of contract packaging business in Irapuato, Mexico; and the negative impact of foreign currency translation. These declines were partially offset by volume/mix improvements.

Gross profits were $242.0 million in the second quarter, up $1.7 million, compared with $240.3 million in the same period in 2015. Gross profit as a percent of sales improved to 20.1 percent, compared with 19.2 percent in the same period in 2015, reaching the highest percentage margin level in 13 years. The 82 basis point improvement in the quarter was due primarily to a positive overall price/cost relationship and lower pension expense, which were partially offset by higher labor expenses and increased operating costs. Second-quarter selling, general and administrative expenses declined $4.3 million, or 3.3 percent, to $126.6 million, due primarily to lower pension and post-retirement benefit costs, fixed cost reductions and the impact of foreign currency translation, partially offset by wage inflation and higher management incentive costs.

Cash generated from operations in the second quarter was $119.7 million, compared with $112.8 million in the same period in 2015. This $6.9 million improvement was largely driven by less cash paid for income taxes partially offset by an increase in cash used to pay severance and other restructuring related liabilities. During the quarter, net capital expenditures were $50.5 million, compared to $45.5 million in the prior year quarter; and cash dividends paid were $37.3 million, compared to $35.1 million in the prior year.

Free cash flow for the quarter was $31.9 million compared with $32.2 million in the same quarter last year. Free cash flow is a non-GAAP financial measure which may not represent the amount of cash flow available for general discretionary use because it excludes non-discretionary expenditures, such as, mandatory debt repayments and required settlements of recorded and/or contingent liabilities not reflected in cash flow from operations. (See free cash flow reconciliation later in this release. Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures is defined as capital expenditures minus proceeds from, and/or plus costs incurred in, the disposition of capital assets.)

Year-to-date Results
For the first six months of 2016, net sales were $2.43 billion, down $22.7 million, compared to $2.45 billion in 2015. Sales declined during the period due to a $58 million impact from foreign currency translation, lower selling prices related to lower raw material costs, and the loss of contract packaging business in Mexico. These negative factors were partially offset by improvements to volume/mix, including the positive effect of six additional accounting days, which includes three more business days, and sales from acquisitions, net of divestitures.

GAAP net income attributable to Sonoco for the first half of 2016 was $116.2 million or $1.14 per diluted share, compared with $150.2 million or $1.47 per diluted share in the same period in 2015. Earnings in the first half of 2016 included $25.0 million, or $0.24 per diluted share, in after-tax asset impairment and restructuring charges related to sale of the paper mill in France and retail packaging business in Puerto Rico along with other previously announced global plant closures and related restructuring actions. Earnings in the first half of 2015 included an after-tax benefit of $25.7 million, or $.26 per diluted share, which included favorable disposition of Fox River-related litigation, the gain on the sale of two metal end plants and a favorable tax reserve adjustment, partially offset by foreign exchange driven asset impairments in Venezuela, charges for restructuring and asset impairment actions and acquisition-related costs.

Base earnings in the first half of 2016 were $141.2 million or $1.38 per diluted share, compared with $124.5 million or $1.22 per diluted share in the same period in 2015. This 13.4 percent improvement stemmed from a positive price/cost relationship, gains in volume/mix, including the positive impact of additional business days, productivity improvements, lower pension expenses and acquisitions. Partially offsetting these positive factors were higher labor, maintenance and other operating costs and negative impact of foreign currency translation. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.)

Current year-to-date gross profit was $487.3 million, up 5.8 percent, compared with $460.7 million in the first half of 2015, largely due to a positive/price cost relationship and gains in volume/mix. Gross profit as a percent of sales was 20.0 percent, up 127 basis points, from 18.8 percent in 2015.

For the first half of 2016, cash generated from operations was $186.0 million, compared with $173.1 million in the same period in 2015. Year-to-date 2016 pension and post-retirement plan contributions were $10.5 million more than the previous year. Net capital expenditures and cash dividends were $103.6 million and $72.7 million, respectively, during the first half of 2016, compared with $55.7 million and $67.4 million, respectively, in 2015.

Free cash flow for the first half of 2016 was $9.8 million, compared with $50.0 million in same period last year. As noted above, free cash flow is a non-GAAP financial measure, which may not represent the amount of cash flow available for general discretionary use. (See free cash flow reconciliation later in this release.) Year-to-date, the Company has spent $37.9 million to repurchase approximately 825,000 shares of common stock at an average cost of $45.70. These repurchases were made under the Company’s previously announced plan to utilize up to $100 million to repurchase shares during 2016.

At July 3, 2016, total debt was approximately $1.08 billion, compared with $1.13 billion as of December 31, 2015. Effective May 25, 2016, the Company’s wholly-owned subsidiary Sonoco Deutschland Holdings GmbH entered into a Euro 150 million (approximately $168 million) unsecured five-year fixed-rate assignable loan agreement guaranteed by the Company. Proceeds were used primarily to refinance existing obligations, including an outstanding $150 million term-loan. In addition, the Company used approximately $75 million to redeem an outstanding 5.625% bond. At the end of the second quarter, the Company had a total debt to total capital ratio of 40.7 percent, compared with 42.4 percent at December 31, 2015. Cash and cash equivalents were $107.7 million at July 3, 2016, compared with $182.4 million at December 31, 2015.

Corporate
Net interest expense for the second quarter of 2016 declined slightly to $13.5 million, compared with $13.6 million during the same period in 2015. The 2016 second quarter effective tax rates on GAAP and base earnings were 31.5 percent and 29.6 percent, compared with a 28.1 percent and 31.8 percent for GAAP and base earnings, respectively, in the prior year’s quarter. The main driver in the year-over-year increase in the GAAP income tax rate is related to the tax benefit from restructuring charges in jurisdictions with applicable tax rates lower than the Company’s effective tax rate, primarily from the disposition of the paper mill in France. The decrease in the base tax rate is primarily driven by the settlement of a state tax audit and a more favorable change in reserves for uncertain tax positions in the current year.

Third Quarter and Full-Year 2016 Outlook
Sonoco expects third quarter 2016 base earnings to be in the range of $.65 to $.70 per diluted share. The Company’s third quarter 2015 base earnings were $.65 per diluted share. Full-year 2016 base earnings guidance has been updated to $2.68 to $2.74 per diluted share, compared with previous guidance of $2.64 to $2.74 per diluted share. The Company’s 2016 base earnings guidance anticipates a 31.5 percent effective tax rate for the year. Free cash flow expectations are unchanged at approximately $140 million in 2016, compared to $155 million in 2015.

Although the Company believes the assumptions reflected in the range of guidance are reasonable, given uncertainty regarding the future performance of the overall economy and potential changes in raw material prices and other costs, as well as other risks and uncertainties, including those described below, actual results could vary substantially.

Commenting on the Company’s outlook, Sanders said, “I am extremely pleased with the strong results our businesses have produced in the first half of 2016 and believe we have established the positive momentum needed to achieve our full-year goals. As a result, we are raising the lower end of our previously communicated annual base earnings guidance even though we continue to face headwinds in some of our served markets due to weak global economic conditions. During the remainder of 2016, we expect to continue successfully driving new commercial opportunities in our Consumer Packaging and Protective Solutions businesses. In our Paper and Industrial Converted Products segment, sustained near-term under-performance of our corrugating medium operations is expected to effectively negate the solid year-over-year improvement expected in our global tube and core operations. We will continue to look at all possible alternatives to address the weak performance in corrugating medium and will remain focused on further improving our cost structure.”
(Sonoco Products Co)

Newsgrafik #114280
 06.07.2016

New Flexible Bag with CrossSeal™ Technology Meets Consumer Desire for Ease of Opening, ...  (Company news)

...Maximizes Brand Visibility While Ensuring Freshness, Quality

Responding to consumer desire for easier-to-open packaging, Sonoco (NYSE:SON), one of the largest global diversified packaging companies, has announced its latest innovation: an easy-open quad-seal flexible bag with Cross-Seal™ technology.

Brand owners are increasingly adopting the quad-seal bag format for premium packaging in order to stand out at retail. This package format involves sealing along a side corner of the bag rather than via a traditional back seam, which results in four full panels for bright, clear graphics and messaging to help drive brand identity and product differentiation. The squared-off edges offer more billboarding space on the package, as well as improved blocking/facings on the shelf compared to rounded flexible bags.

“The challenge with producing a quad-seal bag is that you want a strong seal down the edge of the bag, but the top of the bag needs to remain easy for the consumer to open,” said Rod Pettis, Sonoco director of flexible packaging technology. “Bags produced with Sonoco’s trademarked Cross-Seal technology are easier for consumers to use because they require less force and open more cleanly, while reducing the potential for corner tears and product spilling.”

Sonoco’s first commercial application for the Cross-Seal technology is in the coffee segment. For coffee manufacturers, Cross-Seal technology minimizes headaches through uncompromised production speeds, greater consistency regarding slip transfer, a wider sealing range and less buildup on sealing jaws compared to pattern-applied heat seals.

Unlike other quad-seal coffee bags on the market, bags produced with Cross-Seal technology do not have to be in perfect registration. “With other quad-seal bag structures, variation in the sealing process can cause difficult or inconsistent opening for the consumer,” added Pettis. “Sonoco’s Cross-Seal technology eliminates this risk.”

Quad-seal bags made with Cross-Seal technology are designed to keep coffee fresh while maximizing branding opportunities and customer satisfaction. Sonoco’s expertise in optimized product protection ensures that the product remains at its best when the consumer opens the package. High oxygen barrier and moisture protection provide the optimum consumer experience every time the bag is opened.
(Sonoco Products Co)

Newsgrafik #113745
 12.05.2016

Sonoco Issues 2015 Annual Report to Shareholders  (Company news)

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, announced that its 2015 Annual Report to Shareholders is now available on the Company's website at www.sonoco.com in the Investor Relations section. The report, entitled Grow & Optimize, reviews Sonoco's 2015 financial performance and examines how the Company is creating a highly engaged culture of innovation to spur the development of innovative packaging solutions designed to deliver a sustainable competitive advantage for its customers around the world.

"Our efforts to Grow and Optimize Sonoco in 2015 focused on putting all the pieces in place to Grow through new products, new markets, new services and new ways of thinking. These efforts are illustrated by the opening of our new innovation center, the iPS Studio, built on our campus in Hartsville," said Jack Sanders (photo), president and chief executive officer, in his letter to shareholders.

"At the same time, we worked to harness the power of our portfolio and our people to further Optimize business performance. Despite diverging global economic conditions and headwinds stemming from the continued strength of the U.S. dollar, Sonoco put up solid results in 2015."

Sanders noted that in 2015, Sonoco showed a strong performance, particularly in the Consumer and Protective Solutions sectors, which achieved record sales and base earnings. Total net sales for the company were $4.96 billion, down 1 percent from last year, largely as a result of the negative impact of foreign currency translation. In contrast, net income attributable to Sonoco was up 12 percent from 2014, and current-year gross profit was a record $929 million, up 2.4 percent from 2014. This rise in gross profit was primarily due to the 2014 acquisition of Weidenhammer Packaging Group, a European composite can business. Base earnings for 2015 were $256.7 million, or $2.51 per diluted share, a 3.2 percent increase over 2014 stemming from a positive price/cost relationship, manufacturing productivity improvements, acquisition earnings and a lower effective tax rate.

The report also highlights Sonoco’s new iPS Studio, an innovative packaging center that opened in 2015 to serve emerging needs of the company’s customers with the rationale that “Sometimes Where You Think Inspires What You Think™.” The $12 million state-of-the-art consumer research and development facility includes on-site focus group areas, consumer and retail simulation spaces, a pilot plant and rapid prototyping capabilities.
(Sonoco Products Co)

Newsgrafik #113595
 02.05.2016

Sonoco Reports First Quarter 2016 Results  (Company news)

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, reported financial results for its first quarter ending April 3, 2016. As a result of the Company’s accounting calendar, the first quarter of 2016 contained 94 days, six more calendar days and three more business days than in 2015.

Photo: Sonoco President and Chief Executive Officer Jack Sanders

First Quarter Highlights
-First quarter 2016 GAAP earnings per diluted share were $.59, compared with $.84 in 2015.
-First quarter 2016 GAAP results included $.06 per diluted share, after tax, in asset impairment and restructuring expenses. In the first quarter of 2015, the favorable disposition of Fox River-related environmental litigation together with a gain on the sale of two metal ends plants, partially offset by costs related to acquisition and restructuring activities, added $.30 to earnings per diluted share.
-Base net income attributable to Sonoco (base earnings) for first quarter 2016 was $.65 per diluted share, compared with $.54 in 2015. (See base earnings definition and reconciliation later in this release.) Sonoco previously provided first quarter base earnings guidance of $.57 to $.62 per diluted share.
-First quarter 2016 net sales grew to $1.23 billion, up from $1.21 billion in 2015.
-Cash flow from operations was $66.4 million in the first quarter of 2016, compared with $60.3 million in 2015. Free cash flow for the first quarter was negative $22.1 million, compared with a positive $17.8 million in 2015. (See free cash flow definition later in this release.)

Second Quarter and 2016 Guidance
-Base earnings for the second quarter of 2016 are estimated to be in the range of $.65 to $.70 per diluted share. Base earnings in the second quarter of 2015 were $.68 per diluted share.
-Full-year 2016 estimated base earnings remain unchanged at the previously announced range of $2.64 to $2.74 per diluted share.
-Free cash flow in 2016 is projected to be approximately $140 million, equal to previously communicated guidance.

First Quarter Review
Commenting on the Company’s first quarter results, Sonoco President and Chief Executive Officer Jack Sanders said, “We are extremely pleased to deliver record first quarter base earnings results with each business segment reporting solid year-over-year improvement, including record first quarter performances in our targeted growth segments – Consumer Packaging and Protective Solutions. Overall, the Company benefited from a positive price/cost relationship, productivity improvements, lower pension and post-retirement benefit costs, and gains from volume/mix, which showed improvement even after excluding the positive impact of additional business days. Offsetting these positive factors were higher labor, maintenance and other operating costs, the negative impact of foreign currency translation and a higher effective tax rate.
“For the sixth consecutive quarter, operating profit in our Consumer Packaging segment reached record levels, improving 16 percent year over year due to solid improvement from global composite cans and flexible packaging. Overall, the segment benefited from a positive price/cost relationship, including a favorable change in LIFO inventory reserves, productivity improvements, lower pension costs and improved volume/mix, part of which was due to the additional business days in the quarter. These positive factors were partially offset by higher labor, maintenance and other operating costs, and the negative impact of foreign currency exchange rates. Growth in segment sales was due to the additional business days along with acquisitions, partially offset by lower selling prices and the negative impact of foreign currency translation. Results in the Display and Packaging segment improved significantly in the first quarter due to a positive price/cost relationship, productivity improvements and volume growth in international packaging fulfilment.
“We’re clearly pleased with the turnaround in our Paper and Industrial Converted Products segment, as operating profit grew 20 percent due to solid productivity gains, a positive price/cost relationship, lower pension expense and gains from volume/mix beyond the benefit of additional business days in the quarter. Segment sales were essentially flat in the quarter as volume gains, including the impact of additional days, were offset by the negative impact from foreign currency translation and lower selling prices.
“Finally, our Protective Solutions segment produced record first quarter operating profit, up 24 percent year over year, as strong volume well beyond the impact of the additional business days and a positive price/cost relationship more than offset higher labor, maintenance and other operating costs.”

GAAP net income attributable to Sonoco in the first quarter was $59.9 million, or $.59 per diluted share, compared with $85.8 million, or $.84 per diluted share, in 2015. Base earnings in the first quarter were $66.5 million, or $.65 per diluted share, compared with $54.9 million, or $.54 per diluted share, in 2015. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring related items, asset impairment charges, acquisition expenses and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.

First quarter base earnings exclude after-tax charges of $6.6 million, or $.06 per diluted share, from restructuring activities. Base earnings in first quarter 2015 excluded the following items, on an after tax basis: a benefit of $19.9 million, or $.20 per diluted share, from the reversal of reserves related to Fox River environmental litigation; a benefit of $16.8 million, or $.16 per diluted share, from the sale of two metal ends plants; restructuring charges of $4.8 million, or $.04 per diluted share; and acquisition related expenses of $1.2 million, or $.01 per diluted share. Additional information about base earnings and base earnings per diluted share, along with reconciliation to the most closely applicable GAAP financial measures, is provided later in this release.

Net sales for the first quarter were $1.23 billion, up $20 million or 1.7 percent from last year’s quarter. This sales growth was due primarily to additional business days and other volume/mix improvements along with acquisition-related sales. These gains were partially offset by a negative translation impact from exchange rate changes of approximately $45 million along with lower selling prices due to lower commodity costs.

Gross profits were a record $245.3 million in the first quarter, up 11 percent, compared with $220.4 million in the same period in 2015. Gross profit as a percent of sales improved to 20.0 percent, compared with 18.3 percent in the same period in 2015, and reached the highest percentage margin level since 2002. The 170 basis point improvement in the quarter was due to a positive price/cost relationship, productivity gains and lower pension expense, which were partially offset by wage inflation and increased operating costs. First-quarter base selling, general and administrative (SG&A) expenses increased 4.5 percent to $133.8 million due primarily to additional days in the quarter, wage inflation and higher management incentive costs, partially offset by lower pension and post-retirement benefit costs and the impact of foreign currency translation. (See base earnings reconciliation later in this release.)

Cash generated from operations in the first quarter was $66.4 million, compared with $60.3 million in the same period in 2015. Free cash flow for the first quarter was a negative $22.1 million, compared with a positive $17.8 million in 2015. Operating cash flow improved in the current quarter due to less significant increases in working capital. During the quarter, net capital expenditures were $53 million, compared to $39 million in the prior year quarter; and cash dividends were $35 million, compared to $32 million in the prior year. In 2015, the Company received cash of $29.1 million from the sale of two metal ends plants which is reflected in prior-year net capital expenditures. During the first quarter of 2016, the Company spent $15.3 million to repurchase 354,000 shares at an average cost of $43.31 per share. These purchases were made under the Company’s previously announced plan to utilize up to $100 million to repurchase shares during 2016. (Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures is defined as capital expenditures minus proceeds from the disposal of capital assets.)

At April 3, 2016, total debt was approximately $1.13 billion, unchanged from December 31, 2015, and the debt-to-total capital ratio was 42 percent, compared to 43 percent at December 31, 2015. No commercial paper was outstanding at either date. Cash and cash equivalents were $152.3 million at the end of the first quarter, compared with $182.4 million at year end 2015.

Corporate
Net interest expense for the first quarter of 2016 increased to $13.8 million, compared with $13.2 million during the same period in 2015. This increase was due to the additional days in the current-year quarter, partially offset by lower year-over-year debt levels. The 2016 first-quarter effective tax rates on GAAP and base earnings were 33.2 percent and 33.0 percent, compared with a 23.7 percent and 32.0 percent rate for GAAP and base earnings, respectively, in the prior year’s quarter. The main driver in the year-over-year increase in the GAAP income tax rate is related to the 2015 tax benefit associated with the loss on stock of the underlying subsidiary associated with the sale of the two metal end plants.

Second Quarter and Full-Year 2016 Outlook
Sonoco expects second quarter 2016 base earnings to be in the range of $.65 to $.70 per diluted share. The Company’s second quarter 2015 base earnings were $.68 per diluted share. Full-year 2016 base earnings remain unchanged at the previously announced range of $2.64 to $2.74 per diluted share. The Company’s 2016 guidance anticipates a 32 percent effective tax rate for the year. Free cash flow is expected to be approximately $140 million in 2016, compared to $155 million in 2015.

Although the Company believes the assumptions reflected in the range of guidance are reasonable, given uncertainty regarding the future performance of the overall economy and potential changes in raw material prices and other costs, as well as other risks and uncertainties, including those described below, actual results could vary substantially.

Commenting on the Company’s outlook, Sanders said, “As a result of our strong start to 2016, we feel confident reiterating our previously communicated annual earnings guidance even though we expect to continue facing headwinds from a strong U.S. dollar and generally flat to weak economic conditions around the world. As we enter the second quarter, we remain optimistic that we should be able to achieve our volume growth objectives, particularly with the many new commercial development opportunities we are actively working on in our Consumer Packaging and Protective Solutions businesses. In our Paper and Industrial Converted Products segment we face a difficult year-over-year comparison in the second quarter due to weak market conditions affecting our corrugating medium paperboard operation. As we work to overcome this obstacle, we remain focused on further improving our cost competitiveness by optimizing our supply chain, enhancing productivity, and streamlining our corporate and business unit structures.”

Segment Review
Sonoco reports its financial results in four operating segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. Segment operating results do not include restructuring and asset impairment charges, acquisition expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis.

Consumer Packaging
Sonoco’s Consumer Packaging segment includes the following products and services: round and shaped rigid containers and trays (both composite and thermoformed plastic); blow-molded plastic bottles and jars; extruded and injection-molded plastic products; printed flexible packaging; global brand artwork management; and metal and peelable membrane ends and closures.
First quarter 2016 sales for the segment were $527 million, compared with $520 million in 2015. Segment operating profit was $62.9 million in the first quarter, compared with $54.0 million in the same quarter of 2015.
Segment sales grew 1.4 percent over the prior-year quarter due to the additional business days along with acquisitions, partially offset by lower selling prices, stemming primarily from lower raw material costs, and the negative impact of foreign currency translation. Excluding the estimated benefit of additional business days, volume/mix showed improvement in global composite cans and flexible packaging, but showed a decline in rigid plastic containers. Segment operating profit increased 16.4 percent over the prior year quarter and operating margins improved to 11.9 percent of sales during the quarter. Overall, the segment benefited from a positive price/cost relationship, including a favorable change in LIFO inventory reserves, productivity improvements and lower pension costs. These positive factors were partially offset by higher labor, maintenance and other operating costs, and the negative translation impact of foreign currency exchange rate changes.

Display and Packaging
The Display and Packaging segment includes the following products and services: designing, manufacturing, assembling, packing and distributing temporary, semi-permanent and permanent point-of-purchase displays; supply chain management services, including contract packing, fulfillment and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities, such as coasters and glass covers.
First quarter 2016 sales for this segment were $144 million, compared with $146 million in 2015. Segment operating profit was $3.3 million in the quarter, compared with $0.8 million in 2015.
Sales declined 1.0 percent compared to last year’s quarter due primarily to the negative translation impact of foreign exchange rate changes, largely offset by the impact of additional business days. Absent the impact of days, lower volume stemming from packaging center operations was partially offset by an increase in international packaging fulfilment. The significant improvement in operating profit in the first quarter was primarily driven by an improved price/cost relationship.

Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes and cores; fiber-based construction tubes; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper and material recycling services.
First quarter 2016 sales for the segment were $423 million, up modestly from $422 million in 2015. Segment operating profit was $33.3 million in the first quarter, compared with $27.8 million in 2015.
Segment sales were essentially flat with the prior-year quarter as volume gains, including the impact of additional business days, were offset by the negative impact from foreign currency translation and lower selling prices stemming from reduced recovered fiber costs. Volume/mix, excluding additional business days, showed improvement in our international tube and core operations, while in our paper operations, gains in North America and Europe were partially offset by lower corrugating medium results. Operating profit improved 19.8 percent on solid productivity gains, a positive price/cost relationship, lower pension expense and the benefit from additional days in the quarter, which were partially offset by inflation in labor and other operating expenses.

Protective Solutions
The Protective Solutions segment includes the following products: custom-engineered, paperboard-based and expanded foam protective packaging and components; and temperature-assured packaging.
First quarter 2016 sales were $132 million, compared with $118 million in 2015. Operating profit was $12.0 million, compared with $9.7 million in the first quarter of 2015.
This segment’s 11.4 percent year-over-year increase in first quarter sales came from strongly higher volume beyond the impact of additional business days, partially offset by the negative impact of foreign exchange translation and lower selling prices. Operating profit was up 24 percent as higher volume, including the impact of additional days, and a positive price/cost relationship was only partially offset by higher labor, maintenance and other operating costs.
(Sonoco Products Co)

Newsgrafik #112983
 26.02.2016

Sonoco Reports Fourth Quarter, Full-Year 2015 Results  (Company news)

Company’s Board Approves New $100 Million Common Stock Repurchase Program

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, reported consolidated financial results for its fourth quarter and full-year 2015. (2014 consolidated financial results referenced in this news release have been restated to reflect adjustments associated with the previously reported misstatements of the Company’s Irapuato, Mexico, packaging center. Information on the restatement is available in the Company’s 2014 Annual Report on Form 10-K/A.)

Fourth Quarter Highlights
-Fourth quarter 2015 GAAP earnings per diluted share were $.55, compared with $.48 in 2014.
-Fourth quarter 2015 GAAP results include $.09 per diluted share, after tax, in asset impairment and restructuring expenses and other non-base charges, net of gains related to releases of deferred tax valuation allowances, compared with $.13 per diluted share, after-tax, in asset impairment and restructuring charges, acquisition expenses and acquisition inventory step-up costs in the fourth quarter of 2014.
-Base net income attributable to Sonoco (base earnings) for fourth quarter 2015 was $.64 per diluted share, compared with $.61 in 2014. (See base earnings definition and reconciliation later in this release.) Sonoco previously provided fourth quarter base earnings guidance of $.59 to $.64 per diluted share.
-Fourth quarter 2015 net sales declined 3.8 percent to $1.27 billion, due primarily to the negative impact of foreign currency translation.
-Cash flow from operations for the fourth quarter was $146 million, compared with $151 million in 2014. Free cash flow in the quarter was $49 million, compared with $78 million in 2014. (See free cash flow definition later in this release.)

2015 Full-Year Highlights
-Full-year 2015 GAAP earnings per diluted share were $2.44, compared with $2.19 in 2014.
-Full-year 2015 GAAP results were negatively impacted by $.07 per diluted share, after-tax, from a combination of the following: a favorable disposition of Fox River-related claims/litigation; gain on the sale of two metal end plants and favorable tax reserve adjustments, which were more than offset by foreign exchange driven asset impairments in Venezuela; charges for restructuring costs, asset impairment charges, acquisition-related and environmental remediation expenses; and professional fees to investigate and correct the financial misstatements at the Irapuato packaging center. Prior-year results were negatively impacted by $.22 per diluted share, after-tax, primarily composed of restructuring-related charges and acquisition expenses.
-Full-year 2015 base earnings were $2.51 per diluted share, up 4.2 percent from $2.41 per diluted share in 2014. Sonoco previously guided full-year base earnings to be in the range of $2.46 to $2.51 per diluted share.
-Net sales for 2015 were $4.96 billion, down 1 percent from $5.02 billion in 2014.
-Cash flow from operations for 2015 was $453 million, up 8.4 percent from $418 million in 2014. Free cash flow was $155 million, compared to $120 million in 2014.

2016 Guidance and Common Stock Repurchase Program
-Full-year 2016 base earnings are projected to be in the range of $2.64 and $2.74 per diluted share, with a targeted mid-point of $2.69 per diluted share.
-Base earnings for the first quarter of 2016 are projected to be in the range of $.57 to $.62 per diluted share. Base earnings in the first quarter of 2015 were $.54 per diluted share. As a result of the Company’s accounting calendar, the first quarter of 2016 will contain 94 days, six more than in 2015, and the fourth quarter will contain 90 days, five fewer than in 2015.
-2016 free cash flow is projected to be approximately $140 million.
-Sonoco’s Board of Directors approved repurchasing up to $100 million in common stock in open market transactions beginning immediately. The Board also restored the Company’s residual share repurchase authorization to its original five million shares.

Fourth Quarter Comments
“Despite diverging global economic conditions and headwinds stemming from the continued strength of the U.S. dollar, Sonoco put up solid results led by record fourth quarter performances in our Consumer Packaging and Protective Solutions segments, partially offset by lower results in our Paper and Industrial Converted Products segment,” said Sonoco President and Chief Executive Officer Jack Sanders (photo). “Overall, gains from a positive price/cost relationship; volume growth, particularly in our Consumer Packaging and Protective Solutions segments; acquisition earnings; and a lower effective tax rate more than offset a negative mix in some of our businesses, the impact of foreign currency translation and higher labor, pension, maintenance and other operating costs.
“Operating profit in our Consumer Packaging segment improved just over 8 percent and reached a record for the fifth consecutive quarter. This quarter’s improvement was a result of a positive price/cost relationship, acquisition earnings and solid volume growth, partially offset by higher pension and other operating costs, lower manufacturing productivity and unfavorable exchange rate changes. Operating profits in our Display and Packaging segment showed significant improvement due to a positive/price cost relationship, manufacturing productivity improvements and the reimbursement of excess costs by a customer.
“Operating profit in our Paper and Industrial Converted Products segment declined 32.4 percent from the prior-year quarter. More than half of the negative variance for the segment was directly related to the impact of declining market conditions on our one corrugating medium paper machine with the balance essentially stemming from unfavorable exchange rates changes and higher pension expense.
“In our Protective Solutions segment, operating profits grew nearly 12 percent due to continued strong volume growth, a positive price/cost relationship and manufacturing productivity improvements, which more than offset negative mix and higher labor, maintenance and other operating costs.”

Fourth Quarter Summary
GAAP net income attributable to Sonoco in the fourth quarter was $56.1 million, or $.55 per diluted share, compared with $49.0 million, or $.48 per diluted share, in the prior year. Base earnings in the fourth quarter were $65.5 million, or $.64 per diluted share, compared with $62.5 million, or $.61 per diluted share, in 2014. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring charges, asset impairment charges, acquisition expenses and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.

Fourth quarter base earnings exclude $9.4 million in net expenses, or $.09 per diluted share, consisting of after-tax asset impairment and restructuring expenses and certain other one-time charges, partially offset by certain income tax valuation allowance releases. Base earnings in the fourth quarter of 2014 excluded $13.5 million, after tax, or $.13 per diluted share, of restructuring and asset impairment costs and acquisition-related expenses. Additional information about base earnings and base earnings per diluted share, along with reconciliation to the most closely applicable GAAP financial measures, is provided later in this release.

Net sales for the fourth quarter were $1.27 billion, down approximately 4 percent from $1.32 billion in last year’s quarter, reflecting a nearly $75 million negative impact of foreign currency translation. Absent this impact, reported sales would have increased as net acquisitions accounted for $29 million of additional sales and solid volume growth, primarily in Consumer Packaging and Protective Solutions, were only partially offset by lower selling prices stemming from a year-over-year decline in recovered paper and resin costs.

Gross profit was $239 million in the fourth quarter, down 3 percent, compared with $247 million in the prior-year quarter. Gross profit would have been higher year over year absent the negative impact of currency rate changes. Gross profit as a percent of sales improved to 18.9 percent, compared with 18.7 percent in the same period in 2014. The Company’s fourth quarter selling, general and administrative (SG&A) expenses on a GAAP basis were $138 million, or 10.9 percent of sales, compared with $146 million, or 11.1 percent of sales last year. The decrease was largely attributable to prior-year acquisition costs, lower current quarter management incentives and the impact of currency rate changes. Year over year, base earnings for the quarter benefitted by nearly $0.06 per diluted share from a lower effective tax rate, partially offset by the negative impact of currency rate changes.

Cash generated from operations in the fourth quarter was $146 million, compared with $151 million in 2014. Operating cash flow declined this quarter as higher GAAP net income and lower net pension expense/(contributions) were more than offset by a smaller year-over-year improvement in working capital and an increase in cash paid for taxes. Net capital expenditures and cash dividends were $61 million and $35 million, respectively, during the quarter, compared with $40 million and $32 million, respectively, during the same period in 2014. (Net capital expenditures is defined as capital expenditures minus proceeds from the disposal of capital assets). Free cash flow for the fourth quarter of 2015 was $49 million, compared with $78 million for the same period last year. (Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends).

Full-Year 2015 Overview
Net sales for 2015 were $4.96 billion, down 1 percent, compared with $5.02 billion in 2014. The negative impact of foreign currency translation reduced reported sales by approximately $276 million in 2015, more than offsetting $236 million in sales added by acquisitions net of divestitures. Favorable volume/mix was essentially offset by lower selling prices stemming from declining recovered paper and resin costs.

Net income attributable to Sonoco for 2015 was $250.1 million, or $2.44 per diluted share, up 12 percent, from $225.9 million, or $2.19 per diluted share, in 2014. Current-year earnings included a net loss of $.07 per diluted share, after-tax, from a combination of the following: a favorable disposition of Fox River-related claims/litigation, gain on the sale of two metal end plants and favorable tax reserve adjustments, more than offset by foreign exchange driven asset impairments in Venezuela, restructuring costs, asset impairment charges, acquisition-related and environmental remediation expenses, and professional fees to investigate and correct the financial misstatements at the Irapuato packaging center. Fiscal year 2014 earnings were negatively impacted by $.22 per diluted share, after-tax, for restructuring and other related charges and acquisition expenses.

Base earnings for 2015 were $256.7 million, or $2.51 per diluted share, compared with $248.6 million, or $2.41 per diluted share for 2014. This 3 percent increase in base earnings stemmed from a positive price/cost relationship, manufacturing productivity improvements, acquisition earnings and a lower effective tax rate. Partially offsetting these positive factors were higher labor, pension, maintenance and other operating costs and unfavorable changes in exchange rates. Improved volume in the Company’s Consumer Packaging and Protective Solutions segments was partially offset by lower volume from the Paper and Industrial Converted Products segment and negative changes in the mix of products sold in most businesses.

Current-year gross profit was a record $929 million, up 2.4 percent, compared with $908 million in 2014. The prior-year acquisition of Weidenhammer Packaging Group, a European composite can business, was a benefit to gross profit, offset by the negative impact of currency rate changes. Gross profit as a percent of sales was 18.7 percent, compared with 18.1 percent in 2014. SG&A expenses were $496 million in 2015, down from $507 million in the prior year. SG&A expenses were 10.0 percent of sales in 2015, compared with 10.1 percent in 2014.

In 2015, cash generated from operations was $453 million, up 8.4 percent, compared with $418 million in 2014. Both operating cash flow and free cash flow were higher in 2015 on higher GAAP net income that also reflected higher impairment, depreciation and other non-cash charges in the year. Pension and post-retirement plan contributions, net of expenses, were $47 million less in 2015 than the previous year. These positive cash flow changes were offset by an increase in cash paid for income taxes of approximately $40 million. Net capital expenditures and cash dividends were $189 million and $138 million, respectively, during 2015, compared with $169 million and $129 million, respectively, in 2014. Free cash flow for 2015 was $155 million, compared with $120 million last year. For the year, the Company used available cash to reduce debt, net of proceeds, by approximately $115 million. In addition, the Company utilized $17 million of net cash for acquisitions, including $16 million in the second quarter to purchase a majority interest in a flexible packaging business in Brazil.

As of Dec. 31, 2015, total debt was approximately $1.13 billion, compared with $1.25 billion at December 31, 2014, including no outstanding commercial paper. The Company’s debt-to-capital ratio was 43 percent at the end of 2015, compared with 46 percent at the end of 2014. Cash and cash equivalents were $182 million at year end 2015, compared with $161 million at year end 2014.

Corporate
Net interest expense for the fourth quarter of 2015 increased to $14.1 million, compared with $13.7 million during the same period in 2014. The small increase was due to higher average year-over-year debt levels as result of the Weidenhammer acquisition. The 2015 fourth quarter effective tax rate on GAAP and base earnings was 19.3 percent and 29.7 percent, respectively, compared with 39.0 percent and 35.9 percent on GAAP and base earnings, respectively, for the prior year’s fourth quarter. A more favorable distribution of earnings between high- and low-tax jurisdictions, as well as certain non-recurring tax charges recognized in last year’s quarter, contributed to the lower year-over-year effective tax rate on both GAAP and base earnings. Additionally, the year-over-year decrease in the GAAP rate was driven by the release of deferred tax asset valuation allowances in the fourth quarter of 2015.

Board Approves New $100 Million Common Stock Repurchase Program
Sonoco’s Board of Directors has authorized management, at its discretion, to immediately begin repurchasing up to $100 million of the Company’s outstanding common stock through open market purchases. Based on the February 10, 2016, stock price of $40.41, if fully utilized this authorization would reduce the Company’s outstanding share count by approximately 2.5 million shares. In addition, the Board restored the Company’s residual common stock repurchase authorization to its original 5 million shares.

“For more than nine decades, Sonoco has consistently returned cash to its shareholders in the form of cash dividends and share repurchases, including nearly $1.5 billion over the past decade,” said Sanders. “Based on our projected dividend payments and this new common stock repurchase program, the Company expects to return approximately $240 million in cash to shareholders in 2016. With one of the strongest balance sheets in the Packaging sector and strong cash flow generation, we are well positioned to continue investing to grow our business while returning cash and delivering increased value to our shareholders.”

2016 Outlook
Sonoco expects first quarter 2016 base earnings to be in the range of $.57 to $.62 per diluted share. Base earnings in the first quarter of 2015 were $.54 per diluted share. As a result of the Company’s accounting calendar, the first quarter of 2016 will contain 94 days, six more than in 2015, and the fourth quarter will contain 90 days, five fewer than in 2015. Full-year 2016 base earnings are projected to be in the range of $2.64 to $2.74 per diluted share, with a targeted midpoint of $2.69 per diluted share. The Company’s guidance has been updated to reflect the announced share repurchase program. Compared to 2015 results, the Company’s full-year outlook reflects an expected benefit of approximately $.07 per share from lower pension expense and an expected negative impact of $.03 per share from the effect of a stronger dollar on the translation of foreign earnings. Free cash flow is expected to be approximately $140 million in 2016. The free cash flow projection reflects expectations for higher pension and post retirement plan contributions of $12 million. The Company’s 2016 outlook also reflects the recent decision by a customer not to renew a contract to continue operating a packaging center in Irapuato, Mexico. Sonoco expects to transition the operation to its customer over the next six months. The loss of business will have a modest impact on second-half 2016 sales for the Company’s Display and Packaging segment, but minimal year-over-year impact to operating profit.

The Company believes the assumptions reflected in the range of guidance are reasonable. However, given uncertainty regarding the future performance of the overall economy, potential changes in raw material prices and other costs, as well as other risks and uncertainties, including those described below, actual results could vary substantially.

Commenting on the Company’s outlook, Sonoco CEO Sanders said, “As we enter 2016, it is clear the pace of change in our businesses and the markets we serve is accelerating and, while we can’t control the marketplace, we can control our actions to address the challenges and opportunities we face. We remain committed to executing on our ‘Grow and Optimize’ strategy, which is focused on targeted growth of our Consumer Packaging and Protective Solutions businesses and optimizing our Industrial-focused businesses. We are excited about the expected launch of several new innovative products in 2016, as we continue to work closely with our customers through our i6 Innovation Process™ and utilizing the full capabilities of our recently opened IPS Studio in Hartsville. And finally, we are working diligently to offset current economic, market and currency headwinds by further optimizing our supply chain, driving productivity improvements and further streamlining our cost structure.”
(Sonoco Products Co)

Newsgrafik #112197
 15.12.2015

Sonoco Display & Packaging Recognized With 10 Design of the Times Awards  (Company news)

Sonoco Display and Packaging, the point-of-purchase (POP) display and packaging services division of Sonoco (NYSE:SON), has been awarded 10 Design of the Times Awards by the Path to Purchase Institute at the 2015 Shopper Marketing Conference & Expo in Minneapolis.

The Design of the Times Awards competition celebrates the most inspiring and creative in-store campaigns and activation tactics, and recognizes their key role in the discipline of shopper marketing. Sonoco Display and Packaging was recognized with:

Gold Awards:
-Nestlé: NESCAFÉ® Dolce Gusto Inline Demonstrator (photo)
-InComm: 2014 Holiday Tree Gift Cards Display

Silver Awards:
-Chattem: ROLAIDS® Giant Roll Skinny Tower
-Coolcore: Dr. Cool® Recovery-On-The-Go™ Launch Floor Display
-Swann®: Home Security Systems Demonstrator
-Nestlé: Skinny Cow® Iced Coffee Launch Program

Bronze Awards:
-InComm: 2014 Back-to-School Gift Cards Display
-Robert Bosch Tool Corporation: Dremel® Micro™ 8050 National Launch
-Sam’s Club: DURAGLIDE 6™ Launch Campaign
-Sam’s Club: DURAGLIDE 6™ Launch Packaging

“Sonoco is honored to have our retail merchandising team recognized for their inspiring and creative work with customers,” said Philippe Erhart, division vice president and general manager, Sonoco Global Display and Packaging. “Our team is highly committed to developing innovative and engaging in-store solutions that connect with shoppers and ultimately promote and sell products for our customers.”

“We congratulate our customers and our division’s retail merchandising team on their exceptional shopper-engaging, award-winning achievements,” added Meg Bekker, division director of sales and marketing, Sonoco Global Display and Packaging.
(Sonoco Products Co)

Newsgrafik #112179
 07.12.2015

Sonoco Announces Senior Leadership Changes  (Company news)

Sonoco (NYSE:SON), one of the largest global diversified packaging companies, announced several interrelated senior management changes within its Industrial business segments, according to Jack Sanders, president and chief executive officer.

Senior Vice President of Global Industrial Products and Protective Solutions John Colyer (photo) is relinquishing his operations leadership to focus on treating a health issue. Colyer will continue to work on special projects for the Company, reporting to Sanders. As a result of Colyer’s change in status, Sanders is announcing several leadership changes, effective immediately, focused on streamlining Sonoco’s existing organizational structure.

Rodger Fuller, group vice president, is assuming responsibilities for the Industrial businesses in the Americas, including Tubes and Cores, Paper, Adhesives and Recycling in North America and South America, reporting to Sanders. Fuller, 54, most recently served as vice president, Global Primary Materials Group and has 30 years of experience at Sonoco, including leadership positions in the Company’s global Industrial and Consumer Packaging segments.

Howard Coker, group vice president, is assuming responsibility for Sonoco’s Industrial businesses for Rest of World (ROW), while continuing his leadership of Global Rigid Paper and Closures, reporting to Sanders. Most recently vice president of Global Rigid Paper and Closures, Coker, 53, joined Sonoco in 1985 and has held a number of international sales, manufacturing and management positions in the Company’s Consumer and Industrial businesses. Reporting to Coker is Adam Wood, vice president, who is assuming operational leadership for the ROW Industrial businesses, including Paper, Tubes and Cores in Europe, Asia and Australia/New Zealand.

Rob Tiede, senior vice president, will continue to lead the Company’s Consumer Packaging and Display and Packaging business and is assuming additional responsibility for Protective Solutions and Reels. Serving as senior vice president of Global Consumer Packaging and Services since 2012, Tiede, 57, continues reporting to Sanders. He joined Sonoco as division vice president and general manager of the Company’s Packaging Services business with the 2004 acquisition of CorrFlex Graphics’ point-of-purchase merchandising display and supply chain management business and has held increasingly responsible roles at the Company since then. Vicki Arthur, vice president, Global Protective Solutions, is reporting to Tiede and continues to lead the growth and optimization of the Protective Solutions business while also serving as a member of the Executive Committee. Also reporting to Tiede is Jeff Stafford, division vice president and general manager, Reels.

“Everyone at Sonoco wishes John the very best, and we remain optimistic he will have a full recovery,” said Sanders. “The change in John’s status and his deep experience in our Industrial businesses require we adjust our leadership structure to better position and streamline the organization to achieve our mission.”
(Sonoco Products Co)

Newsgrafik #111356
 11.09.2015

Sonoco Achieves 5-Year Sustainability Targets  (Company news)

Substantially Lowers CO2, Water Usage While Improving Plant Waste Reduction, Establishes New 2020 Improvement Goals

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, today released its Corporate Responsibility Report for 2014-2015 and reported that it achieved its five-year global sustainability targets, including significant reduction in global greenhouse gas emissions (GHG), water usage and development of landfill-free operations.

“Five years ago, we established goals to change our economic, environmental and social performance in aspects that were material to Sonoco and its stakeholders,” said Sonoco President and CEO Jack Sanders. “Our process of change, which is providing us better opportunities to grow through new products, new markets, new customers, new services and new ways of thinking, also has created an environment that allows us to better harness the power of our portfolio and our people to optimize our sustainability performance. As a result, we made significant progress to not just meet, but exceed, our challenging sustainability goals.”

Targeted achievements highlighted in the Company’s Corporate Responsibility Report include:

- Sonoco reduced normalized carbon dioxide (CO2) emissions by nearly 24% over the past five years, with normalized emissions in 2014 dropping nearly 12% and direct emissions from Sonoco’s facilities reduced by 21%. Much of the emission reduction success was a result of the Company’s new biomass cogeneration system at its largest manufacturing complex in Hartsville, S.C., where CO2 emissions were reduced by 65% since 2009. The Company had set a goal of reducing CO2 emissions by 15% over the five-year period ending in 2014.

- Normalized water usage decreased 40% over the past five years, due to Sonoco’s investment in a new water cooling and treatment system put in place at the Hartsville complex. Following the completion of the project, water consumption at the plant declined 35% in 2014 – equivalent to saving more than 10 million cubic meters of water.

- Nearly 10% of the Company’s 336 global operating facilities achieved Sonoco Sustainability Star Awards by reaching landfill-free status of 95% waste diversion or higher. In addition, the Company’s Sonoco Recycling subsidiary implemented programs for 17 of its customers’ facilities to also reach landfill diversion goals.

In addition to reducing the Company’s impact on the environment, the Company reported continued improvement in employee safety, engagement and leadership development, including being ranked by AON Hewitt as one of the top 25 global companies for leaders six consecutive times. Finally, the report provides a summary of the Company’s support of communities in which it operates, particularly through its support of education.

Using 2014 as the Company’s new baseline, Sonoco has made the following sustainability commitments through 2020:

- Reducing normalized global energy usage by 1% annually, which should result in a further 1% reduction in GHG emissions (or reducing CO2 emissions by 5%).
- Reduce normalized water usage by 5%.
- Achieve landfill-free status at an additional 10% of the Company’s operations significantly diverting landfill wastes, while continuing to work with customers to also reduce their waste going to landfills.
- Finally, continue to demonstrate improvement in employee safety, diversity and engagement.
(Sonoco Products Co)

Newsgrafik #109847
 04.05.2015

Sonoco Names Saunders Senior Vice President  (Company news)

Sonoco (NYSE:SON), one of the largest global diversified packaging companies, announced that Barry L. Saunders (photo) has been elected senior vice president and chief financial officer, according to Jack Sanders, president and chief executive officer.

Saunders, 56, who previously served as the Company's vice president and CFO, is responsible for the Company's global finance, treasury, audit, tax and accounting functions and also serves as chief accounting officer. He is a member of Sonoco's executive committee and reports to Sanders.

"Barry provides strong leadership and expert counsel to our Board's Audit Committee and Sonoco management," said Sanders. "During his 26-year career with Sonoco, he has held several key finance positions in corporate and global operations and has extensive international experience."

Saunders joined Sonoco in 1989 after working as an audit manager with Ernst & Young. He worked in leadership positions in the Company's Treasury Department for seven years before becoming director of corporate reporting and accounting. He then moved to Brussels, Belgium, for four years as director of finance for the Company's European operations before returning as staff vice president and global controller of the Company's Industrial businesses. He was promoted to staff vice president and corporate controller in 2003 and was elected vice president, corporate controller and chief accounting officer in 2008 before being elected CFO in 2011.

A resident of Hartsville, S.C., Saunders holds a B.S. in accounting and an MBA from the University of South Carolina. He is a Certified Public Accountant and serves on the Board of Directors of the South Carolina Chamber of Commerce, and he is treasurer of the Byerly Foundation in Hartsville.
(Sonoco Products Co)

Newsgrafik #109026
 13.02.2015

Sonoco Announces Price Increase for All Uncoated Recycled Paperboard Products  (Company news)

Sonoco (NYSE:SON) announced that it will raise the price for all grades of uncoated recycled paperboard (URB) products by $40 per ton, effective with shipments in the United States and Canada beginning March 2, 2015.

"The price increase is driven by a need to relieve continued inflationary pressure, especially from rising freight rates and chemicals, and to cover the added cost of continued investment in our paper business," said Palace Stepps, director of sales and marketing for Sonoco's North America paper business.

Sonoco is one of the largest producers of uncoated recycled paperboard in the United States and Canada, producing more than 1 million tons annually from 11 mills. For more information about Sonoco's complete line of URB paper products or to learn more about current pricing, please visit the Company's website at www.sonoco.com or contact the Company at 1-800-377-2692.
(Sonoco Products Co)

Newsgrafik #108316
 19.11.2014

Sonoco's Newport Paper Mill Receives Bronze Sustainability Star Award  (Company news)

Sonoco (NYSE:SON), one of the largest diversified packaging companies, has named the Company's Newport, Tennessee, paper mill a bronze Sonoco Sustainability Star Award recipient for the facility's efforts to significantly decrease wastes going to landfill.

The award marks a milestone in landfill-free efforts that have been underway since the fourth quarter of 2012. In late 2012, the Newport facility partnered with local recycling company TLR Solutions to process some of the more difficult to recycle byproducts of the mill's operations, like bailing wire and materials such as glass, staples and ceramics that are sorted out from incoming paper fiber.

"After the company announced its goal of taking 10 percent of its facilities landfill free, we began efforts to eliminate the facility's waste streams," said Marty Pignone, vice president, Paper North America. "The Newport paper mill has made significant advances—recycling almost 20 percent of waste that previously went to landfill each month—and we look forward to continuing those efforts."

Many of the items collected by TLR Solutions for processing require very specific equipment. The recycling company not only found nearby locations with equipment capable of handling the materials, but also worked with those locations for over a year to identify the correct processes for recycling—many some of the first of their kind in North America.

Administered by Sonoco Recycling, the Company's recycling business, the Sonoco Sustainability Star Awards program is comprised of three tiers:
-Gold recognizes facilities that have achieved 99% landfill diversion.
-Silver is awarded to facilities achieving 95% landfill diversion, and
-Bronze recognizes facilities that have made significant waste reduction achievements, such as drastically reducing their waste streams or implementing a new composting system.

A recycling leader with locations and expertise worldwide, Sonoco Recycling annually collects more than 3 million tons of old corrugated containers, various grades of paper, metals and plastics. In addition, the Company has experts who provide secure, reliable and innovative recycling solutions to residential and commercial customers. Currently, Sonoco Recycling operates five material recovery facilities (MRFs) serving more than 125 communities in which curbside-collected residential and commercial materials are processed. The Company also operates recycling programs which identify waste reduction opportunities that reduce operating expenses for many of the largest consumer product companies in the United States.
(Sonoco Products Co)

Newsgrafik #108285
 14.11.2014

Sonoco Completes Acquisition of Weidenhammer Packaging Group  (Company news)

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, announced that it has completed the acquisition of Weidenhammer Packaging Group (WPG), Europe's leading provider of composite cans along with composite drums and rigid plastic containers, for €286 million, or approximately $360 million, in cash.

According to M. Jack Sanders (photo), Sonoco president and chief executive officer, "We are extremely excited to welcome Weidenhammer's leadership team and its 1,100 associates into the Sonoco family. The acquisition creates a global leader in rigid paper packaging and is expected to increase Sonoco's combined global consumer-related packaging and services business to approximately $2.8 billion in annual sales or approximately 53 percent of the Company's combined revenue of approximately $5.4 billion. In addition, the combination is expected to increase Sonoco's net sales in Europe to approximately 21 percent of total sales."

Headquartered in Hockenheim, Germany, Weidenhammer has approximately 1,100 employees and operates 13 production facilities, including five in Germany, along with individual plants in Belgium, France, Greece, The Netherlands, United Kingdom, United States, Chile and Russia. In addition to producing composite cans, drums and luxury tubes, WPG produces unique rigid plastic containers using state-of-the-art thin-walled injection molding technology with modern in-mold labeling. Markets served by the company include processed foods, powdered beverages, tobacco, confectionery, personal care, pet food, pharmaceuticals and home and garden products. Further information is available on the Internet at www.weidenhammer.de/en/home.

To finance the transaction, Sonoco entered into a Credit Agreement for a new $600 million bank credit facility earlier in October. Included in that facility is a new $350 million, five-year revolving credit facility, which replaces an existing credit facility under substantially the same terms. The $350 million revolving credit facility is being used to support an identically sized commercial paper program. Also included in the Credit Agreement is a new $250 million three-year term loan which was used to fund the acquisition.

As previously reported, the acquisition of Weidenhammer is expected to have no material impact to Sonoco's fourth quarter 2014 base earnings and should be accretive to the Company's 2015 base earnings in the range of $.09 to $.14 per share, including adjustments for purchase accounting.
(Sonoco Products Co)

Newsgrafik #107492
 02.09.2014

Weidenhammer-Gesellschafter verkaufen 100 Prozent ihrer Unternehmensanteile an Sonoco  (Firmennews)

Die Gesellschafter der Weidenhammer Packaging Group (WPG) mit Hauptsitz in Hockenheim haben bekannt gegeben, dass sie ihre Unternehmensanteile komplett an die Sonoco Products Company verkaufen. Sonoco, einer der weltgrößten Verpackungskonzerne mit Hauptsitz in Hartsville, South Carolina, USA, stärkt durch den Kauf sein Verpackungsgeschäft in Europa und baut seine Expertise im Bereich stabiler, hochdekorierter Convenience-Verpackungen weiter aus. Für die WPG, Europas führenden Anbieter von Kombidosen, Kombitrommeln und Kunststoffbehältern, ergeben sich durch die Fusion mit Sonoco zusätzliche Wachstumsperspektiven mit neuen Kunden und in neuen Märkten.

Nach gründlicher Abwägung und intensiven Verhandlungen haben sich die Gesellschafter der WPG, ausschließlich Mitglieder der Familie Weidenhammer, entschlossen, ihre Gesell­schafts­anteile an Sonoco zu verkaufen. Der Übergang der Gesell­schafts­anteile an Sonoco soll – vorbehaltlich laufender rechtlicher Prüfungen – Anfang Oktober 2014 erfolgen. Dann werden Werke, Standorte, Niederlassungen und Produkte der WPG Teil der Sonoco Products Company.

Die WPG befindet sich vollständig im Besitz der Familie Weidenhammer, die das Unter­nehmen 1955 gegründet hat. In den darauf folgenden knapp sechs Jahrzehnten hat sich die WPG zum europäischen Marktführer in ihrem Segment entwickelt. "Wir haben die Entwicklung der WPG mit viel Herzblut und persönlichem Einsatz vorangetrieben. Entsprechend schwer haben wir uns die Entscheidung zum Verkauf unsere Anteile gemacht", erklärt Ralf Weiden­hammer, Geschäftsführer und einer der Gesellschafter der WPG. "Wir sind aber überzeugt, dass diese Fusion der richtige Schritt zur richtigen Zeit ist, und dass der Zusammen­schluss mit Sonoco der WPG und ihren Mitarbeitenden neue, wichtige Zukunftsperspektiven eröffnet."

Als Markt- und Technologieführer in Europa bringt die WPG wichtige zusätzliche Expertise in die Sonoco-Gruppe ein – und wird ihrerseits von Sonocos Marktposition in Nordamerika, Asien und Lateinamerika sowie ihrer 115-jährigen Markterfahrung und Marktführung profitieren. Sonoco unterhält zudem mehrere Werke, in denen Vormaterialien für Kombidosen hergestellt werden. Die Tatsache, dass diese innovativen Materialien künftig in der gleichen Unter­nehmens­gruppe produziert werden, macht die Kombidosenproduktion der WPG noch leistungsfähiger.
(Weidenhammer Packaging Group)

Newsgrafik #106457
 23.05.2014

Sonoco Reports First Quarter 2014 Results  (Company news)

Sonoco (NYSE:SON), one of the largest diversified global packaging companies, reported financial results for its first quarter ending March 30, 2014.

Picture: Sonoco President and Chief Executive Officer Jack Sanders

First Quarter Highlights
-First quarter 2014 GAAP earnings per diluted share were $.50, compared with $.47 in 2013.
-First quarter 2014 GAAP results include $.02 per diluted share in after-tax charges related to previously announced restructuring activities. First quarter 2013 GAAP results included after-tax charges of $.03 per diluted share related to restructuring activities and the impact of devaluation on reported results in Venezuela.
-Base net income attributable to Sonoco (base earnings) for first quarter 2014 was $.52 per diluted share, compared with $.50 in 2013. (See base earnings definition and reconciliation later in this release.) Sonoco previously provided first quarter base earnings guidance of $.50 to $.54 per diluted share.
-Abnormally severe winter weather across much of the U.S. and Canada unfavorably impacted first quarter 2014 base earnings. Absent the weather impact, the Company estimates that results would have been at or slightly above the high end of its previously issued guidance.
-First quarter 2014 net sales were $1.19 billion up slightly from $1.18 billion in 2013.
-Cash flow from operations was $45 million, in line with expectations, compared with $136 million in 2013. Free cash flow for the first quarter was a negative $22 million, compared with $51 million in 2013. The year-over-year changes in operating and free cash flows reflect a more-normal working capital impact as well as higher pension plan contributions. (See free cash flow definition later in this release.)

Second Quarter and 2014 Base Earnings Guidance Updated
-Base earnings for the second quarter of 2014 are estimated to be in the range of $.63 to $.67 per diluted share. Base earnings in the second quarter of 2013 were $.59.
-Full-year 2014 base earnings are expected to be in the range of $2.43 to $2.53 per diluted share and the Company continues to target $2.51 per diluted share.
-Free cash flow in 2014 is projected to be approximately $130 million.

First Quarter Review
Commenting on the Company's first quarter results, Sonoco President and Chief Executive Officer Jack Sanders said, "Severe winter weather significantly disrupted our customers' and our operations in January and February resulting in lost production and sales along with higher operating costs, particularly in our Industrial-related businesses. I'm extremely proud of how our people responded to these challenges as they went to extraordinary lengths to meet the critical needs of our customers. Even with these headwinds, base earnings improved 4 percent in the first quarter as the Company benefited from a positive price/cost relationship, modest productivity improvements and lower pension and interest expenses, partially offset by normal inflation.
"For the fifth consecutive quarter, operating profits from our Consumer Packaging segment increased year-over-year with first quarter results up 14 percent. This improvement came from a positive price/cost relationship, productivity improvements and lower pension expense, partially offset by higher labor and operating costs. In addition, operating profits from our Display and Packaging segment improved more than 50 percent in the quarter due to productivity improvements and modest volume gains.
"Operating profits in our Paper and Industrial Converted Products segment declined 4 percent in the first quarter due to the negative impacts of severe weather on volume and energy costs, as well as higher maintenance, freight and raw material costs. These negative factors were only partially offset by a positive price/cost relationship, modest productivity improvements and lower pension costs. Lower volume and higher costs, partially due to the severe weather, negatively impacted our Protective Solutions segment."

GAAP net income attributable to Sonoco in the first quarter was $52.3 million, or $.50 per diluted share, compared with $48.1 million, or $.47 per diluted share, in 2013. Base earnings in the first quarter were $53.9 million, or $.52 per diluted share, compared with $51.7 million, or $.50 per diluted share, in 2013. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring charges, asset impairment charges, acquisition expenses and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.
First-quarter base earnings exclude $1.6 million in after-tax charges, or $.02 per diluted share, related to previously announced restructuring activities. Base earnings in the first quarter of 2013 excluded after-tax charges of $3.6 million or $.03 per diluted share, stemming from restructuring activities and the impact of a currency devaluation in Venezuela. Additional information about base earnings and base earnings per diluted share, along with reconciliation to the most closely applicable GAAP financial measures, is provided later in this release.
Net sales for the first quarter were $1.19 billion, compared with $1.18 billion in last year's quarter, reflecting essentially flat volume for the Company as a whole. The small increase was driven primarily by higher selling prices and sales from two small acquisitions in recycling and graphics management, partially offset by foreign exchange.
Gross profits were $212 million in the first quarter, up 3 percent, compared with $206 million in the same period in 2013. Gross profit as a percent of sales improved to 17.9 percent, compared with 17.4 percent in the same period in 2013. This improvement was due primarily to a positive price/cost relationship, manufacturing productivity improvements and lower pension expense, partially offset by higher maintenance, labor and other costs. The Company's first quarter selling, general and administrative expenses increased 3 percent to $124 million, due primarily to wage inflation and higher management incentive costs compared with the previous year.
Cash generated from operations in the first quarter was $45 million, compared with $136 million in the same period in 2013. Both operating cash flow and free cash flow were lower this quarter as higher GAAP net income was offset by changes in working capital and higher pension contributions. Net capital expenditures and cash dividends were $35 million and $32 million, respectively, during the quarter, compared with $55 million and $30 million, respectively, during the same period in 2013. The decrease in capital expenditures reflects the completion in 2013 of several projects, the most significant of which was the biomass boiler in Hartsville, S.C. The Company also repurchased 208,000 shares of its common stock in the first quarter at a cost of $8.6 million under a previously announced stock buyback plan. (Free cash flow is defined as cash flow from operations minus net capital expenditures and cash dividends. Net capital expenditures is defined as capital expenditures minus proceeds from the disposal of capital assets.)
At the end of the first quarter of 2014, total debt was approximately $985 million, compared to $981 million at December 31, 2013. The Company had no commercial paper outstanding and the debt-to-total capital ratio was 36.1 percent at March 30, 2014, compared with 36.3 percent at the end of 2013. Cash and cash equivalents were $191 million at March 30, 2014, compared with $218 million at year end 2013.

Corporate
Net interest expense for the first quarter of 2014 decreased to $12.6 million, compared with $14.3 million during the same period in 2013. The decrease was due to lower year-over-year debt levels. The 2014 first-quarter effective tax rate on GAAP and base earnings was 31.3 percent and 31.1 percent, respectively, compared with a 31.6 percent rate for both in the prior year's quarter.

Second Quarter and Full-Year 2014 Outlook Updates
Sonoco expects second quarter 2014 base earnings to be in the range of $.63 to $.67 per diluted share. The Company's second quarter 2013 base earnings were $.59 per diluted share. Annual base earnings per diluted share are expected to be in the range of $2.43 to $2.53 in 2014, and the Company is targeting $2.51 per diluted share. The Company's 2014 guidance range reflects an expectation of a 33 percent effective tax rate for the year. Free cash flow is expected to be approximately $130 million in 2014, compared to $245 million in 2013. The year-over-year reduction reflects expectations for higher income tax payments, an increase in pension and post retirement plan contributions and a greater, but more-normal, use of cash for working capital.
Although the Company believes the assumptions reflected in the range of guidance are reasonable, given uncertainty regarding the future performance of the overall economy and potential changes in raw material prices and other costs, as well as other risks and uncertainties, including those described below, actual results could vary substantially.
Commenting on the Company's outlook, Sanders said, "Much of the negative impact from severe winter weather occurred in January and February. As weather improved in March, we saw a strong rebound in customer orders across most of our businesses and a sharp improvement in operating performance. Entering April, customer orders appear to be running at more normal levels, in line with volume expectations and our second-quarter earnings guidance, which anticipates continued improvement in operations."

Segment Review
Sonoco reports its financial results in four operating segments: Consumer Packaging, Display and Packaging, Paper and Industrial Converted Products, and Protective Solutions. Effective January 1, 2014, Sonoco Alloyd, the Company's retail packaging business and previously part of the Protective Solutions segment, began reporting as part of the Display and Packaging segment. This change reflects the evolving integration occurring between these businesses, enabling them to better leverage the Company's capabilities, products and services to provide complete solutions to our retail merchandising customers. Prior period results for the affected segments have been recast to reflect this change.
Segment operating results do not include restructuring and asset impairment charges, acquisition expenses, interest income and expense, income taxes or certain other items, if any, the exclusion of which the Company believes improves comparability and analysis.

Consumer Packaging
Sonoco's Consumer Packaging segment includes the following products and services: round and shaped rigid containers and trays (both composite and thermoformed plastic); blow-molded plastic bottles and jars; extruded and injection-molded plastic products; printed flexible packaging; global brand artwork management; and metal and peelable membrane ends and closures.
First quarter 2014 sales for the segment were $465 million, compared with $463 million in 2013. Segment operating profit was $48.2 million in the first quarter, compared with $42.3 million in the same quarter of 2013.
Segment sales during the quarter were essentially flat as higher selling prices and sales added from the acquisition of a small graphics management business in the U.K. were partially offset by the negative impact of foreign exchange and slightly lower volume. Segment operating profit increased 14 percent due to a positive price/cost relationship, lower pension expense and productivity improvements that more than offset higher labor and operating costs.

Display and Packaging
The Display and Packaging segment includes the following products and services: designing, manufacturing, assembling, packing and distributing temporary, semi-permanent and permanent point-of-purchase displays; supply chain management services, including contract packing, fulfillment and scalable service centers; retail packaging, including printed backer cards, thermoformed blisters and heat sealing equipment; and paper amenities, such as coasters and glass covers.
First quarter 2014 sales for this segment were $153 million, compared with $145 million in 2013. Segment operating profit was $5.4 million in the quarter, compared with $3.5 million in 2013.
Sales for the quarter were up 6 percent year over year on volume growth in U.S. display and packaging, global pack centers and retail packaging. Quarterly operating profit for the segment grew 53 percent due to manufacturing productivity in retail packaging and volume gains.

Paper and Industrial Converted Products
The Paper and Industrial Converted Products segment includes the following products: paperboard tubes and cores; fiber-based construction tubes; wooden, metal and composite wire and cable reels and spools; and recycled paperboard, linerboard, corrugating medium, recovered paper and material recycling services.
First quarter 2014 sales for the segment were $456 million up slightly from $454 million in 2013. Segment operating profit was $29.8 million in the first quarter, compared with $31.0 million in 2013.
Despite the negative effects of severe winter weather on volume, segment sales were flat during the quarter as higher selling prices and sales from a small recycling acquisition offset the lower volume and a negative impact from foreign exchange. Operating profits declined 4 percent year over year as a positive price/cost relationship, lower pension expense and modest productivity improvements were more than offset by lower volume and higher maintenance, labor and other costs. Severe weather resulted in lost production at several mills that were forced to cancel multiple shifts due to the conditions and/or partially curtail production. In addition, persistently lower-than-normal temperatures across much of the United States and Canada caused a short-term but significant increase in energy costs at many of our facilities.

Protective Solutions
The Protective Solutions segment includes the following products: custom-engineered, paperboard-based and expanded foam protective packaging and components; and temperature-assured packaging.
First quarter 2014 sales were $112 million, compared with $117 million in 2013. Operating profit was $5.3 million, compared with $9.7 million in the first quarter of 2013.
This segment's 4 percent decline in sales was due to lower volume in the industrial protective and temperature-assured businesses and the divestiture of a small box plant. Operating profits declined 46 percent due to lower volume and higher costs, partially due to the severe weather, a negative price/cost relationship and start up costs related to a new facility in Mexico.
(Sonoco Products Co)

 

Sonoco Announces Price Increase for All Uncoated Recycled Paperboard Products  (Company news)

Sonoco(NYSE: SON) announced that it will raise the price for all grades of uncoated recycled paperboard (URB) products by $40 per ton, effective with shipments in the United States and Canada beginning July 8, 2013.
"Unfortunately, the price increase is necessary to recover rising recovered paper and other raw materials costs," said Marty Pignone, vice president, Primary Materials Group, North America. "The posted price for old corrugated containers (OCC) in the Southeast U.S. has risen approximately 60 percent since September 2012 and OCC being sold in the market today is running above the posted price of $120 per ton. In addition, demand for all grades for URB products is strong."
(Sonoco Products Co)

 

Sonoco Names Thompson Vice President, Marketing and Innovation  (Company news)

Sonoco(NYSE: SON), one of the largest diversified global packaging companies, announced that Marcy Thompson has been named vice president, marketing and innovation, according to M. Jack Sanders, president and chief executive officer.
In this new position, Thompson, 51, will lead Sonoco's marketing function, including an initiative to develop a focused consumer insights and end-use market strategy to better serve the Company's customers. Thompson reports to Rob Tiede, senior vice president, global Consumer Packaging and Services, and John Colyer, senior vice president, global Industrial Products and Protective Solutions.
Previously, Thompson headed the North American Rigid Paper division since 2011. Group Vice President Howard Coker will temporarily take over the division's day-to-day operations until a successor is named and will maintain responsibilities for the Sonoco's global Rigid Paper, Closures and Plastics businesses. To assist Coker during this interim period, Tiede will assume executive leadership of the Company's global Plastics businesses.
"Our marketing team has already begun a detailed analysis of the consumer insights and end-use markets that are most relevant to our customers' products," said Sanders. "Marcy has first-hand experience working with many of our largest customers, and she will lead a cross-functional team to better align our diverse packaging and services capabilities with our customers' changing needs. In addition, Marcy will work with me in developing processes to improve ideation and innovation, which will be critical for Sonoco's growth and development."
Thompson joined Sonoco in 2006 as division vice president of sales and marketing for the North American Industrial Products Division where she later became division vice president and general manager. Prior to becoming a corporate officer in 2011 and leading Rigid Paper North America, she was division vice president and general manager, Sonoco Recycling, LLC, and division vice president and general manager of the Company's North America Tubes and Cores Division.
Thompson joined Sonoco from General Electric's Commercial Finance business where she was chief marketing officer, Healthcare Financial Services. She previously held several sales, marketing and business leadership positions with General Electric, The Gillette Company and Inland Steel Company. She is a graduate of The Pennsylvania State University with a B.S. degree in metallurgy, and has earned a Six Sigma Master Black Belt certification.
(Sonoco Products Co)

Newsgrafik #102437
 04.04.2013

Sanders Takes Over as Sonoco's Chief Executive Officer  (Company news)

Sonoco (NYSE: SON) announced that M. Jack Sanders (photo) has taken over as president and chief executive officer following his election by the Company's board of directors. Sanders, 59, succeeds Harris E. DeLoach Jr., who retired as CEO after a 27-year career with the Company. As announced in December, DeLoach, 68, remains Sonoco's executive chairman of the board.
"I'm extremely proud and honored to be elected to lead such a great company," said Sanders, who is only the Company's eighth CEO in its 114-year history. "Sonoco was founded on creativity, hard work, a spirit of innovation and a focus on satisfying our customers while creating value for our shareholders. We want to continue building on past successes and defining a new future for this exceptional company."
A graduate of Louisiana State University with a Bachelor of Science degree in finance, Sanders joined Sonoco in 1988 as national sales and marketing manager for the Company's Reels business. In 1992, he was asked to build and lead the development of Sonoco's new Protective Packaging business as its general manager and in 1998 was promoted to division vice president and general manager.
Sanders was elected a corporate officer and named vice president, Industrial Products, North America, in 2001. He was subsequently named vice president, Global Industrial Products, in January 2006 and assumed responsibility for all Industrial Converting businesses as senior vice president in July 2007. In 2008, Sanders was named executive vice president, Industrial, with global operating responsibility for all of the Company's businesses serving industrial markets, including Sonoco's tubes and cores, paper, reels, protective packaging, paperboard specialties and recycling businesses. Prior to assuming his current position, Sanders served as the executive vice president of Sonoco's Global Consumer businesses, where he was responsible for Rigid Paper and Closures, Rigid Plastics, Flexible Packaging, and Display and Packaging.
(Sonoco Products Co)

 

Sonoco Reports Fourth Quarter and Full-Year 2012 Results  (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, reported financial results for its fourth quarter and full-year 2012.

Fourth Quarter Highlights
- Fourth quarter 2012 GAAP earnings per diluted share were $.42, compared with $.29 in 2011.
- Fourth quarter 2012 GAAP results include $.14 per diluted share in net after-tax charges related to restructuring activities and taxes on the repatriation of cash, partially offset by excess insurance settlement gains. Fourth quarter 2011 GAAP results included a net after-tax charge of $.17 per diluted share related to restructuring activities, acquisition items and income tax reserve adjustments, partially offset by excess insurance settlement gains.
- Base net income attributable to Sonoco (base earnings) for fourth quarter 2012 was $.56 per diluted share, compared with $.46 in 2011. (See base earnings definition and reconciliation later in this release.)
Sonoco previously provided fourth quarter base earnings guidance of $.52 to $.56 per diluted share.
- Fourth quarter 2012 net sales were a record $1.18 billion, up 4 percent, compared with $1.13 billion in 2011.

Full-Year Results
- Full-year 2012 GAAP earnings per diluted share were $1.91, compared with $2.13 in 2011.
- Full-year 2012 GAAP earnings include $.30 per diluted share in after-tax restructuring charges and tax items, partially offset by excess insurance settlement gains. In comparison, 2011 GAAP results include $.16 per diluted share in after-tax restructuring charges, acquisition expenses and acquisition inventory step-up costs, partially offset by net positive adjustments to valuation allowances on deferred tax assets.
- Full-year 2012 base earnings were $2.21 per diluted share, compared with $2.29 in 2011. Sonoco previously provided full-year 2012 guidance of $2.17 to $2.21 per diluted share.
- Net sales reached a record $4.79 billion, up 6 percent, compared with $4.50 billion in 2011.
- Free cash flow totaled $101.2 million in 2012, compared with a use of cash of $31.9 million in 2011. (Free cash flow is defined as cash flow from operations minus net capital expenditures and dividends.)

Increased 2013 Earnings Guidance and Debt Repayment
- Full-year 2013 base earnings guidance is expected to be $2.26 to $2.34 per diluted share, reflecting an improvement of $.02 per share, after tax, in expected pension expense compared to prior guidance. Base earnings for the first quarter of 2013 are estimated to be $.50 to $.54 per diluted share.
- 2013 free cash flow is projected to be approximately $130 million.
- In January 2013, Sonoco repaid the $135 million outstanding balance of the term loan it incurred in conjunction with the 2011 Tegrant Holding Corp. (Tegrant) acquisition, together with approximately $98 million of commercial paper, using accumulated cash repatriated from outside the United States.

Fourth Quarter Review
Commenting on the Company’s fourth quarter results, Chairman and Chief Executive Officer Harris E. DeLoach Jr. said, “Base earnings increased 21 percent over last year’s fourth quarter while gross profit improved 10 percent and base earnings before interest and taxes (EBIT) gained 7 percent. A lower effective tax rate drove a significant part of the base earnings improvement. The improvement in base EBIT stemmed from much
stronger productivity, the addition of Tegrant and modest volume gains. These favorable factors were partially offset by a slightly negative price/cost relationship and higher maintenance, labor, pension, interest and other expenses.
“Operating profits from our Paper and Industrial Converted Products segment rose 23 percent in the fourth quarter as the segment generated its strongest fourth quarter earnings performance since 2007. The segment’s
improvement was due to higher volume and strong productivity gains. Tons produced in the Company’s North America paperboard mills increased 7 percent with less downtime that aided productivity and helped offset a
negative price/cost relationship stemming from rising recovered paper prices.
“Our Protective Solutions segment reported an 82 percent year-over-year improvement in operating profits during the fourth quarter driven largely by last year’s addition of Tegrant.
“Our Consumer Packaging segment continued to suffer from soft demand, reporting a 16 percent decline in operating profits. In addition to lower volumes across most of our consumer packaging businesses, segment
operating profits were also impacted by higher labor, pension and other costs. These negative factors were partially offset by productivity improvements and a positive price/cost relationship. Operating profits from our Display and Packaging segment improved 165 percent for the quarter due primarily to an improved mix of business and productivity.”
(Sonoco Products Co)

Newsgrafik #101419
 05.12.2012

M. Jack Sanders to Become Chief Executive Officer of Sonoco  (Company news)

Harris E. DeLoach to Remain Executive Chairman of the Board

Sonoco (NYSE: SON) announced that M. Jack Sanders (photo) will become president and chief executive officer of the Company, effective April 1, 2013, when Harris E. DeLoach Jr., retires as an active employee after more than 27 years with Sonoco. Sanders also was elected to Sonoco's Board of Directors, effective immediately, increasing the board to 13 members.
Sanders, 59, is currently president and chief operating officer of Sonoco and has global leadership, sales and operating responsibility for all of the Company's diversified packaging businesses. DeLoach, 68, is currently chairman and chief executive officer and has served as CEO since July 2000. He has been a member of Sonoco's Board of Directors since 1998 and chairman of the Board of Directors since 2005 and will remain its executive chairman following his retirement on March 31, 2013.
"During his 25-year career with Sonoco, Jack has played an integral role in helping to grow the Company and successfully led many of our Consumer, Industrial and Protective packaging businesses," said DeLoach. "Jack is an extremely talented leader who has proven that he's ready to serve as Sonoco's eighth CEO over our 113-year history."
A graduate of Louisiana State University with a Bachelor of Science in finance, Sanders joined Sonoco in 1988 as national sales and marketing manager for the Company's Reels business. In 1992, he was asked to build and lead the development of Sonoco's new Protective Packaging business as its general manager. He was promoted in 1998 to division vice president and general manager of Protective Packaging.
Sanders was elected a corporate officer and named vice president, Industrial Products, North America, in 2001. He was subsequently named vice president, Global Industrial products in January 2006 and assumed responsibility for all industrial converting businesses as senior vice president in July 2007. In 2008, Sanders was named executive vice president, Industrial, with global operating responsibility for all of the Company's businesses serving industrial markets, including Sonoco's tubes and cores, paper, reels, protective packaging, paperboard specialties and recycling businesses. Prior to assuming his current position, Sanders served as the executive vice president of Sonoco's Global Consumer businesses, where he was responsible for Rigid Paper and Closures, Rigid Plastics, Flexible Packaging and Display and Packaging.

During DeLoach's 12 years as CEO, Sonoco has grown sales from $2.7 billion to a projected $4.75 billion at the end of 2012, while its asset base has nearly doubled to more than $4 billion. Also during his tenure, the Company has returned approximately $1.6 billion to shareholders in cash dividends and share repurchases and it has provided a total shareholder return of approximately 153 percent through Oct. 31, 2012. While serving as CEO, Sonoco made more than 50 acquisitions and the Company was transformed from primarily a company serving industrial packaging markets to a diversified global consumer, industrial and protective packaging company.
DeLoach started his career as an attorney in Hartsville, S.C., where Sonoco was one of his clients. He officially joined the Company in 1986 as vice president of administration and general counsel. In 1990, he was named vice president of Sonoco's High Density Film Products Division. In 1993, DeLoach was named vice president of Film, Plastics and Special Products before being promoted to group vice president in October of that year. Over the next decade, he continued to move into higher leadership positions and became president and chief operating officer in 2000, before taking over as CEO in July 2000.
In addition to the Sonoco Board of Directors, DeLoach currently serves on boards of Duke Energy and Milliken & Company as well as a trustee of the Duke Endowment and The Palmetto Institute Board. He also has served on the boards of directors of several other public companies and chaired numerous business and industry associations.
(Sonoco Products Co)

Newsgrafik #101083
 30.10.2012

Sonoco Awarded Two Golden Cylinders for Flexible Packaging Innovations  (Company news)

Caption: Flexible stand-up pouches produced by Sonoco for LEGO Group's Hero Factory toy lines received GAA's "Best of the Best" recognition in the Packaging Category.

LEGO Hero Factory reclosable stand-up pouch wins top packaging award

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, received two Golden Cylinder Awards for flexible packaging innovations from the Gravure Association of America (GAA) at its recent Packaging and Products Conference held in Chicago, Ill.
Flexible stand-up pouches produced by Sonoco for LEGO Group's Hero Factory toy lines received GAA's "Best of the Best" recognition in the Packaging Category for delivering a new, reclosable flexible packaging option with high-impact graphics. The graphics provide unique differentiation on retail store shelves, said Bob Puechl, vice president, Sonoco Flexibles.
"In working with LEGO's packaging team we tapped into Sonoco's 'total solutions' capabilities to deliver every aspect of the new packaging. To create differentiation, our artwork management team adapted and improved graphics used in rigid paper and plastics formats and incorporated them to fit a new shaped pouch design that would catch the consumer's eye. Our rotogravure cylinders and separations business delivered the intricate detail needed for the package and the brand. The fine-screened colors are produced from line and process colors. Tight registration and color controls ensure detail and color balance on the package. The superiority and quality of the gravure process, working in close alignment with our graphics capability, was able to deliver the consistency and pop required by the customer," Puechl added.
Sonoco's work with LEGO does not end with its rotogravure presses, said Jeff Tomaszewski, division vice president and general manager of Sonoco Display and Packaging. "Our dedicated LEGO packaging centers in Mexico and Poland fulfill every pouch with the precise brick formulation to reward LEGO consumers with a consistent and fun product."
Rob Tiede, vice president, Sonoco Flexibles, Display and Packaging, noted, "Sonoco's complete line of packaging services – from design, to artwork management, to color separations and cylinder engraving, to rotogravure printing and finally packaging fulfillment – is truly delivering on the promise for our customers. No other packaging company can come close to providing such a complementary packaging solution."
Sonoco also received a Golden Cylinder Award for producing a new rotogravure printed flexible package to help celebrate the 100th birthday of Mondelez International's Oreo® brand. Mondelez International, which comprises the global snacking and food brands of the former Kraft Foods, developed a new "Birthday Cake" flavored cookie, which required a new package. Sonoco worked closely with Kraft Food's design agency to develop a design and to engrave cylinders that would run effectively on Sonoco's rotogravure presses, resulting in the award-winning package.
(Sonoco Products Co)

Newsgrafik #100993
 22.10.2012

Sonoco Announces Leadership Changes in North American Paper Mill Operations  (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, today announced that Marty F. Pignone (photo) has been named vice president, Paper North America, effective December 1, 2012. Pignone will replace John M. Grups, 61, division vice president and general manager, who will be retiring from Sonoco following a 36-year career.
In this position, Pignone, 55, will have responsibility for Sonoco's 12 uncoated recycled paperboard mills in the United States, Canada and Mexico and related support functions. He reports to John Colyer, vice president, Paper and Industrial Converted Products.
"Following John's decision to retire after nearly four decades with Sonoco, it was important that we installed a seasoned paper manufacturing veteran to head this manufacturing-intensive operation," said Colyer. "Marty previously led our North American paper mills for eight years and implemented several key safety and operating excellence initiatives that improved performance during his tenure. In this new role, we're asking him to improve operating performance and safety near-term, while further developing our paper manufacturing management team."
Pignone joined the Company in 1997 and was elevated to division vice president and general manager of Paper, North America in 2000. He became vice president, Global Manufacturing in 2009 and later vice president, Operating Excellence, where he has led the Company's global manufacturing improvement initiatives as well as supply management and product quality improvement. Pignone graduated in 1978 from the University of Massachusetts, Amherst, with a Bachelor of Science in mechanical engineering and received a Master of Science in business administration from Stanford University in 1991. Prior to joining Sonoco he worked for General Electric and Kodak.
Grups' retirement is effective March 31, 2013. During the transition, he will work with Pignone on several manufacturing initiatives. Grups took over the Company's Primary Materials Group in September 2011 after serving as staff vice president, Operating Excellence for eight years. Grups is a 1974 graduate of the University of Missouri with a Bachelor of Science in mathematics and a Bachelor of Arts in philosophy. He also holds a master's degree from Purdue University in industrial management.
(Sonoco Products Co)

Newsgrafik #100199
 27.07.2012

Sonoco Reports Second Quarter 2012 Results  (Company news)

Photo: Harris E. DeLoach, Jr., Chairman and CEO

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, reported financial results for its 2012 second quarter, ending July 1, 2012.

Second Quarter Highlights
•Second quarter 2012 GAAP earnings per diluted share were $.50, compared with $.52 in 2011.
•Second quarter 2012 GAAP results include after-tax charges of $.08 per diluted share, driven by previously announced restructuring activities.
•Base net income attributable to Sonoco (base earnings) for second quarter 2012 was $.58 per diluted share, compared with $.60 in 2011. (See base earnings definition and reconciliation later in this release.) Sonoco previously provided second quarter base earnings guidance of $.55 to $.60 per diluted share.
•Second quarter 2012 net sales were a record $1.20 billion, up 7 percent, compared with $1.13 billion in 2011.

Earnings Guidance
•Third quarter 2012 base earnings are expected to be $.62 to $.66 per diluted share.
•Guidance for full-year 2012 base earnings is revised to $2.34 to $2.39 per diluted share.

Second Quarter Review
Commenting on the Company's second quarter results, Chairman and Chief Executive Officer Harris E. DeLoach Jr. said, "Sonoco's second quarter results met our expectations despite the continuing tough global economic conditions. Base earnings showed sequential improvement for the second consecutive quarter and gross profits increased 13 percent year over year while base earnings before interest and taxes (EBIT) improved by 6 percent. Base earnings were down year over year by a little less than 2 percent. The benefits to base earnings from significantly improved productivity, prior year acquisitions and a positive price/cost relationship were largely offset by lower volumes, a negative mix of business and higher pension, interest and income tax expenses. However, absent the impact of a stronger dollar, year-over-year base earnings would have been essentially unchanged.
"Our Consumer Packaging segment's second quarter operating profit improved 6 percent year over year, but was down 15 percent from the first quarter largely due to normal seasonality. The segment's year-over-year improvement was a result of productivity gains and a positive price/cost relationship, partially offset by lower volumes, negative mix and higher pension, labor and other expenses. Operating profits from our Packaging Services segment declined 54 percent from the second quarter of 2011, and 17 percent from the first quarter.

Year-over-year results were negatively impacted by the previously announced loss of a large contract packaging customer and a stronger dollar.
"In our Paper and Industrial Converted Products segment, second quarter operating profits were down 2 percent from last year's second quarter, but were up 23 percent from the first quarter. The year-over-year decline was driven by higher pension, labor and other expenses and a negative impact from exchange rates. These factors were partially offset by improved productivity, a positive price/cost relationship and slightly better volume, coming primarily from improved paper operations.
"Operating profits in our new Protective Packaging segment, created as a result of last year's acquisition of Tegrant Holding Corporation, improved 66 percent from the first quarter. Tegrant's operations comprise the majority of this segment and we are very pleased with the improvement we're seeing there in operating efficiencies and the progress being made in the integration. Year-over-year results in the legacy protective packaging operation improved slightly as a small decline in volume was more than offset by improved productivity."
GAAP net income attributable to Sonoco in the second quarter was $51.3 million, or $.50 per diluted share, compared with $53.4 million, or $.52 per diluted share, in 2011. Base earnings were $59.7 million, or $.58 per diluted share, in the second quarter, compared with $60.8 million, or $.60 per diluted share, in 2011. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring charges, asset impairment charges, acquisition expenses and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.
Items excluded from base earnings in the second quarter of 2012 totaled $8.3 million, after tax, or $.08 per diluted share. This included restructuring expenses and asset impairment stemming from previously announced plant closures and manufacturing rationalization efforts in Germany, Canada and the United States. Excluded from base earnings in the second quarter of 2011 were after-tax restructuring and other charges totaling $7.4 million, or $.08 per diluted share, largely attributable to the disposition of the Company's Brazilian plastics operations and closure of a Canadian flexible packaging operation. Additional information about base earnings and base earnings per diluted share, along with a reconciliation to the most closely applicable GAAP financial measures, is provided later in this release.
Net sales for the second quarter were $1.20 billion, compared with $1.13 billion in the same period in 2011. This 7 percent increase was due to sales from acquisitions of $124 million, almost all of which is related to Tegrant, and higher selling prices, partially offset by lower volume/mix and a $41 million negative impact from foreign currency translation.
Gross profits were $217 million in the second quarter of 2012, compared with $191 million in the same period in 2011. Gross profit as a percent of sales was 18.0 percent, compared with 16.9 percent in the same period in 2011. The improvement in gross profits was due to productivity improvements and a positive price/cost relationship, partially offset by lower volumes, a negative shift in the mix of business and higher labor and other costs. The Company's selling, general and administrative (SG&A) expenses increased 19 percent year over year in the quarter, primarily due to added costs from the acquired Tegrant businesses. SG&A expenses were 9.9 percent of net sales in the 2012 period, compared with 8.8 percent in 2011.
Cash generated from operations in the second quarter was $42.9 million, compared with $45.9 million in the same period in 2011. Capital expenditures net of proceeds and cash dividends were $54.9 million and $30.2 million, respectively, during the second quarter of 2012, compared with $34.0 million and $28.9 million, respectively, during the same period in 2011.

Year-to-date Results
For the first six months of 2012, net sales increased 8 percent to $2.41 billion, compared with $2.25 billion in the first half of 2011. Net income attributable to Sonoco for the first six months of 2012 was $94.4 million, or $.92 per diluted share, compared with $110.8 million, or $1.08 per diluted share, in the first half of 2011. Earnings in the first half of 2012 were negatively impacted by after-tax restructuring and other charges of $19.1 million, or $.19 per diluted share, compared with $8.5 million, or $.09 per diluted share, in the same period in 2011.
Base earnings for the first half of 2012 were $113.5 million, compared with $119.3 million in the same period in 2011. This 5 percent year-over-year decline in base earnings stemmed from lower volume, a negative mix of business and higher pension, labor and other expenses. These negative factors were partially offset by productivity improvements, acquisitions and a positive price/cost relationship.
Gross profit increased 12.5 percent year over year to $433.4 million, compared with $385.3 million in 2011. Gross profit as a percent of sales increased in the first half of 2012 to 17.9 percent, compared to 17.2 percent in 2011.
For the first six months of 2012, cash generated from operations was $144.4 million, compared with $32.1 million in the same period in 2011. The first half cash flow reflects pension and postretirement benefit plan contributions of $58.9 million, compared with $110.5 million in the first half of 2011. Cash flow from operations also improved during the first half of 2012 due to less management incentives paid in comparison to last year. Capital expenditures and cash dividends were $102.0 million and $59.3 million, respectively, during the first half of the year, compared with $70.5 million and $57.0 million, respectively, for the same period in 2011.
At the end of the first half of 2012, total debt was approximately $1.32 billion, a $32.0 million increase from the Company's year-end total debt of $1.29 billion. The Company's debt-to-total capital ratio was 47.4 percent, which is unchanged from year end 2011. Cash and cash equivalents as of the end of the first half of 2012 was $196 million, compared with $176 million at the end of the year.

Corporate
Net interest expense for the second quarter of 2012 increased to $15.3 million, compared with $8.2 million during the same period in 2011. The increase was due to higher debt levels as a result of the acquisition of Tegrant. The effective tax rate for the second quarter of 2012 was 35.3 percent, compared with 32.1 percent for the same period in 2011. The effective tax rate on base earnings was 32.8 percent and 31.9 percent in the second quarters of 2012 and 2011, respectively.

Third Quarter and Full-Year 2012 Outlook
Sonoco expects third quarter 2012 base earnings to be in the range of $.62 to $.66 per diluted share. Base earnings in the third quarter of 2011 were $.66 per diluted share. For the full-year 2012, base earnings are projected to be in the range of $2.34 to $2.39 per diluted share. The Company had previously provided full-year guidance of $2.34 to $2.44 per diluted share.
The Company's base earnings guidance assumes sales demand will remain near current levels, adjusted for seasonality. Although the Company believes the assumptions reflected in the range of guidance are reasonable, given the uncertainty regarding the global economy and fluctuating raw material prices and other costs, actual results could vary substantially.
Commenting on the Company's outlook, DeLoach said, "We expect third quarter base earnings to continue to improve sequentially and possibly could be near our results for the third quarter of 2011, which benefited from some lower incentives, taxes and other favorable actions. While we are encouraged by the progression of improvement in many of our businesses in the first half of the year, general economic conditions continue to be challenging and our customers' long-term order patterns remain difficult to predict. Accordingly, we are focused on implementing operating excellence initiatives to improve our manufacturing productivity and working to further reduce costs and control spending. Also, we expect to complete several important growth projects this year, including the third-quarter start-up of our new rigid plastics container plant in Columbus, Ohio. Finally, efforts to successfully integrate our Protective Packaging businesses continue and we expect to meet our objective of achieving annualized synergies of $12 million by year end."
(Sonoco Products Co)

 

Sonoco's Patented Radial Crush Tester Now Commercially Available   (Company news)

Tester Simulates Radial Pressures Applied to Paper Cores During Winding Processes

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced today the commercial availability of its patented radial crush tester, which measures the radial strength of paper cores by simulating the pressures applied during the winding processes of rolled products such as plastic films and textiles.

According to David E. Rhodes, director of Global Industrial Technology, Sonoco's radial crush tester is the result of several decades of engineering development work.

"In response to the needs of our tube and core customers, we have been committed to understanding the properties of radial crush technology for many years," Rhodes said. "We developed radial crush testing so we could help customers prevent failures during the winding process and optimize tube designs. Today it remains an essential test for many of the cores we supply."

Sonoco's radial crush tester has been endorsed by the Composite Can and Tube Institute as an accepted test method (CCTI Standard Testing Procedure T-158). Each tester is manufactured by Sonoco, and order fulfillment requires approximately 12 weeks.

In keeping with Sonoco's commitment to safety, the radial crush tester has been evaluated by an independent safety advisor and subjected to a human factors engineering review. The tester includes an operations manual, which details testing procedures, safety, installation, troubleshooting, warranty and parts.

A price list available for control unit and hydraulics, as well as various chamber sizes, is available at http://www.sonoco.com/UserFiles/sonoco/Documents/RadialCrushTester.pdf. For additional information, or to place an order, please contact Marcia O'Neal at 843-383-7482 or marcia.oneal@sonoco.com.
(Sonoco Products Co)

Newsgrafik #98755
 15.02.2012

Sonoco Announces Selection of James M. Micali as Lead Director  (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced that its Board of Directors has elected James M. Micali as its independent Lead Director, effective immediately. This appointment replaces the current practice of having an independent Board committee chairman rotate as presiding director.
Micali has been an independent director of Sonoco since 2003 and currently serves as chair of the Board’s Corporate Governance and Nominating Committee. The Lead Director’s duties include presiding at executive sessions of the independent directors and at any meetings of the Board at which the Chairman is not present. In addition, the Lead Director will confer with the Chairman regarding Board meeting agendas, schedules and information sent to the Board, along with other duties.
Since 2008, Micali, 64, has been senior advisor to, and limited partner of, Azalea Fund III of Azalea Capital LLC, Greenville, S.C. He retired as chairman and president of Michelin North America, Inc., of Greenville, S.C., in August 2008. Micali is also a director of SCANA Corporation (NYSE:SCG), Ritchie Brothers Auctioneers, Inc. (NYSE:RBA), and American Tire Distributors Holding, Inc.
(Sonoco Products Co)

 

Sonoco Provides Investors with Strategic and Financial Update   (Company news)

Company Reaffirms 2011 Guidance; Establishes 2012 Base EPS Estimate of $2.47 to $2.57

Sonoco (NYSE: SON), Chairman and Chief Executive Officer Harris E. DeLoach, Jr., M. Jack Sanders, president and chief operating officer, and Barry L. Saunders, vice president and chief financial officer, today addressed the investment community in New York to provide an update on the Company’s 2011 performance, outline strategic initiatives and establish its financial outlook for 2012.

2011 Base Earnings Guidance Unchanged; 2012 Estimates Established

Sonoco expects fourth quarter and full-year 2011 base earnings to be unchanged from the Company’s previously announced guidance of $.59 to $.63 and $2.41 to $2.45 per diluted share, respectively, according to Saunders. “Although our industrial-focused businesses have experienced continued sluggish demand, the impact should be offset by a slightly more favorable than expected price/cost relationship, as well as better than expected results in our consumer businesses,” he said.

Sonoco estimates 2012 base earnings per diluted share to be in the range of $2.47 to $2.57, with a projected midpoint of $2.52 per diluted share. Saunders said the Company’s guidance assumes an estimated $.20 per share improvement stemming from volume growth, productivity gains and a positive price/cost relationship, and an approximately 7 cents per share contribution from the recently completed acquisition of Tegrant Corporation, a leading protective packaging provider. Offsetting the Company’s positive assumptions is approximately $.16 per share in negative items, including an estimated $.10 per share negative impact from higher year-over-year pension expenses. Base earnings and base earnings per diluted share are non-GAAP financial measures adjusted to remove restructuring charges, asset impairment charges and other items, if any, the exclusion of which the Company believes improves comparability and analysis of the underlying financial performance of the business.

Uses of Cash Update

Sonoco expects cash flow from operations to reach $410 million in 2012, including an estimated $60 million cash contribution that is expected to be made to the Company’s pension and postretirement plans, Saunders said. This compares to an expected approximately $260 million in cash from operations in 2011, including approximately $140 million in cash contributions to the Company’s pension and postretirement plans.

Saunders said the Company is projecting capital expenditures of $185 million in 2012, compared with an expected $155 million in 2011. The increase will be focused on new growth projects as well as additional capital needs related to the recent addition of Tegrant’s operations. Following expected cash dividend payments to shareholders, the Company’s projected free cash flow of more than $100 million could be used to reduce debt.

Strategic Growth Initiatives Highlighted

DeLoach pointed out that Sonoco’s 2011 sales are projected to reach a record $4.5 billion. “This should be the second consecutive year that we have achieved double-digit sales growth. It’s been more than 15 years (dating back to 1994-1995) since Sonoco has achieved back-to-back years of double-digit sales growth. If you take into consideration that most of the global markets we serve have been stubbornly slow in 2011, then we are pleased with our expected base earnings growth, projected to be in the range of $2.41 to $2.45 per diluted share.”

DeLoach said that Sonoco expects sales to grow to approximately $5 billion in 2012 with the Company focused on continuing to build four global businesses, including Consumer Packaging; Packaging Services; Industrial Converted Products; and a newly created Protective Packaging segment.

In speaking about the recently completed Tegrant acquisition, Sanders pointed out that Sonoco’s new Protective Packaging segment will be a market leader in custom-engineered molded foam, temperature-assured and retail security packaging with expected 2012 sales of approximately $560 million.

“The global protective packaging industry serves an estimated $15 billion market which experts believe will grow to $23 billion over the next several years,” Sanders said. “In addition to expecting 3 to 5 percent market growth over the next several years, this industry remains highly fragmented and we believe it is ripe for consolidation.”

Sonoco’s new diversified Protective Packaging segment includes four businesses.

•Protexic™ Brands, North America’s leader in custom-molded foam solutions, which serves a number of markets, including high-tech, consumer electronics, automotive, appliances and medical devices
•ThermoSafe® Brands, a leading provider of temperature-assured solutions, primarily used in packaging sensitive pharmaceuticals
•Alloyd Brands®, a leading manufacturer and designer of high-visibility retail security packaging, including printed products and blister packaging machines serving various retail and medical markets
•Sonoco’s existing custom-designed paperboard packaging business, which provides solutions for household appliances and a variety of large format consumer products
“The combination of Sonoco and Tegrant has created a powerful protective packaging growth engine that is either number 1 or number 2 in the key markets we serve,” Sanders said. “Our long-term objective is to grow this business to approximately $1 billion in annual sales. We believe this can be accomplished, in part, by leveraging existing relationships with our largest global customers. In addition, we want to strengthen new product development and utilize Sonoco’s global infrastructure to gain access to emerging markets.”

Closing

DeLoach concluded by saying, “Slowing global economic growth is affecting our near-term results and requires us to work harder to meet our longer-term financial goals. Overall, we are projecting another record year in sales and base earnings in 2012, despite pension expense headwinds. We remain focused on growing cash flow from operations. This is the fuel that will grow our Company and fund cash dividends to our shareholders, as we have for 86 consecutive years.”

Event Replay

A replay of Sonoco’s presentation will begin at noon, Eastern time on December 2, 2011, and continue through midnight Eastern time on March 2, 2012. The toll-free replay number in the United States is 888/286-8010 and the international replay number is +617/801-6888. The replay access code is 559749844. The webcast and presentations of the event will be archived for 90 days on the Company’s website at http://www.sonoco.com, under conference calls.

Newsgrafik #90253
 11.10.2011

Sonoco Announces Bowen to Retire; Grups Named Head of Primary Materials Group...  (Company news)

(Photo: Jim Bowen (left), Marty Pignone (right)

...and Pignone Named Vice President, Global Operating Excellence

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced that Jim C. Bowen, 61, senior vice president, Primary Materials Group, North America, will be retiring from Sonoco following a 40-year career. As a result of Bowen's decision, John M. Grups has been named division vice president and general manager, Primary Materials Group, North America, effective October 1, 2011.
In this new position, Grups, 60, will have responsibility for Sonoco's 12 uncoated recycled paperboard mills in the United States, Canada and Mexico; Sonoco Recycling, Inc.; and the Company's Adhesives and Forest Products divisions. He will continue to report to Jack Sanders, president and chief operating officer.
"John is a 35-year veteran of Sonoco and has extensive manufacturing experience, including serving as division vice president, Global Operations, Consumer Products, along with other operating leadership and plant management responsibilities," said Sanders. "For the past eight years, he has led our Operating Excellence initiatives, which have enhanced our Six Sigma and Lean Manufacturing operating philosophies and improved our purchasing and logistics functions."
Grups is a 1974 graduate of The University of Missouri with a B.S. degree in Math and a B.A. degree in Philosophy. He also holds a master's degree from Purdue University in Industrial Management.
In an effort to further leverage Sonoco's global manufacturing support efforts, the Company's supply management organization, including purchasing, logistics and other support services will report to Marty F. Pignone, vice president,Global Operating Excellence. Pignone, 55, will have responsibility for driving standardization with the Company's global manufacturing processes while leveraging productivity, quality, supply management, supply chain, environmental services, safety and engineering functions.
Pignone joined the Company in 1997 and has been vice president, Global Manufacturing, since 2009. He graduated in 1978 from the University of Massachusetts, Amherst, with a B.S. degree in mechanical engineering and received a M.S. degree in business administration from Stanford University in 1991. Prior to joining Sonoco he worked for General Electric and Kodak.
Bowen's retirement is effective March 31, 2012, and he will continue to work on several manufacturing initiatives until that time. He has been a senior vice president since 2002, holding various senior management positions in the Company's paper, recycling, manufacturing and internal supply functions. He joined the Company in 1972 after graduating from the Pulp and Paper engineering program at North Carolina State University. He also received an MBA from Duke University.
(Sonoco Products Co)

 

Sonoco Recycling Announces New Sonoco Sustainability Star Award Program   (Company news)

New program recognizes customer, Sonoco facilities that significantly reduce landfill waste streams

Sonoco Recycling, a wholly owned subsidiary of Sonoco (NYSE: SON) and one of the largest packaging recyclers in North America, announced the launch of its Sonoco Sustainability Star Award program.
Created to recognize customer and Sonoco facilities for achieving significant milestones in landfill diversion and waste stream reduction, the program is comprised of three tiers:
•Gold recognizes facilities that have achieved 99% landfill diversion.
•Silver is awarded to facilities achieving 95% landfill diversion.
•Bronze recognizes facilities that have made significant waste reduction achievements, such as drastically reducing their waste streams or implementing a new composting system.
"With the increasing importance placed on sustainability by both Sonoco and our customers, we felt compelled to create a program that would recognize those facilities that take considerable steps to achieve higher levels of sustainability," said Jim Brown, vice president, Sonoco Recycling.
"To date, we've experienced great success in helping our customers - in targeted facilities - significantly reduce their landfill waste or become landfill free. We fully expect this program will encourage even more of our customers to strive for significant reductions in landfill waste. Additionally, by recognizing the efforts of our own facilities, the new Sonoco Sustainability Star Award program furthers Sonoco's goals of achieving landfill-free status at 10 percent of our plants by 2015."
Plants and customers who have achieved landfill-free status prior to the program's implementation will be recognized retroactively.
The Sonoco Sustainability Award program will be administered through Sonoco Recycling and Sonoco Sustainability Solutions, LLC (S3). With a knowledge base informed by more than a century of experience as a global packaging leader and innovative recycler, S3 is uniquely qualified to find alternative recycling solutions for waste that was previously thought to be unrecyclable. Today, some of the world's most successful manufacturers and retailers rely on S3 to create and implement sustainable business solutions in their facilities.
A recycling leader with locations and expertise worldwide, Sonoco Recycling annually collects more than 3 million tons of old corrugated containers, various grades of paper, metals and plastics. In addition, the Company has experts who provide secure, reliable and innovative recycling solutions to residential and commercial customers. Currently, Sonoco Recycling operates three material recovery facilities (MRFs) serving more than 125 communities in which curbside-collected residential and commercial materials are processed. The Company also operates recycling programs which identify waste reduction opportunities that reduce operating expenses for many of the largest consumer product companies in the U.S.
(Sonoco Products Co)

 

John R. Haley Elected to Sonoco Board of Directors   (Company news)

The board of directors of Sonoco (NYSE: SON), one of the largest diversified global packaging companies, elected John R. Haley as a director of the Company, according to Harris DeLoach Jr., chairman and chief executive officer.
Haley, 50, is chief executive officer of Gosiger, Inc., a Dayton, Ohio-based, privately owned distributor of computer-controlled machine tools and factory automation systems that serves manufacturers throughout North America. Haley joined Gosiger in 1987, and served as a division president before being named managing partner in 2002. Over its nearly 90-year history, Gosiger has grown revenues to more than $200 million and has 13 facilities in eight states.
"We are extremely pleased to have John joining Sonoco's board," DeLoach said. "He not only brings strong business leadership skills, but extensive experience in manufacturing automation that will be valuable in helping us in our efforts to continue improving manufacturing productivity in our global operations."
A resident of Dayton, Haley holds a bachelor's degree from the University of Notre Dame and an MBA from the University of Virginia. He serves on the board of directors of Ultra-met Carbide Technologies, a privately owned manufacturer of custom-molded tungsten carbide products, located in Urbana, Ohio. He also serves on the University of Dayton's board of trustees, where he has chaired the board's finance and facilities committees, and the board of directors of the Gosiger Foundation.
(Sonoco Products Co)

 

Sonoco Elects Barry L. Saunders as Chief Financial Officer   (Company news)

Hupfer to Retire After 35-Year Finance Career

Sonoco (NYSE: SON), one of the largest global diversified packaging companies, announced that Barry L. Saunders has been elected vice president and chief financial officer, according to Harris E. DeLoach Jr., chairman and chief executive officer. The appointment is effective May 1, 2011, and Saunders will report to DeLoach and join the Company's executive committee.
Saunders, 52, who currently serves as the Company's vice president, corporate controller and chief accounting officer, will replace Charles J. Hupfer, senior vice president, who has served as chief financial officer since May 2002. Hupfer will be retiring after reaching the age of 65 in May 2011, capping a 35-year finance career with the Company.
"During Barry's 22-year career with Sonoco, he has held several key leadership positions in treasury, finance and accounting in both corporate and global operations. He has extensive international experience and has done an excellent job in the Company's critical chief accounting officer role," said DeLoach. "We look forward to working with Barry as Sonoco's next chief financial officer."
"I also want to personally thank Charlie for all he has done for Sonoco during his career. He has actively participated in driving Sonoco's growth while building our strong capital structure through numerous debt financings. He has established a solid finance organization and implemented processes that have driven transparency to management, rating agencies, regulators and investors," DeLoach concluded, adding that Hupfer will retire on May 31, 2011.
Saunders joined Sonoco in 1989 after working as an audit manager with Ernst & Young. He worked in leadership positions in the Company's Treasury department for seven years before becoming director of corporate reporting and accounting. He then moved to Brussels, Belgium, for four years as director of finance for the Company's European operations before returning as staff vice president and global controller of the Company's Industrial businesses. He was promoted to staff vice president and corporate controller in 2003 and has been responsible for corporate accounting, financial reporting and all global business unit finance. He was elected vice president, corporate controller and chief accounting officer in 2008. A resident of Hartsville, S.C., Saunders holds a B.S. in accounting and an MBA from the University of South Carolina. He is a Certified Public Accountant.
Hupfer joined Sonoco in November 1975 as manager of financial reporting after working six years for Coopers & Lybrand. He became director of international finance in 1980 and director of tax and audit in 1985. In 1988, he was promoted to treasurer then was elected vice president, secretary and treasurer in 1995. He was elected chief financial officer in 2002 and senior vice president in 2005. He holds a B.S. in accounting from the University of North Carolina/Chapel Hill and an MBA in management from the University of North Carolina/Charlotte. He is a CPA and a Certified Management Accountant. He resides in Hartsville and is chairman of the Byerly Foundation and serves on the Board of Trustees for Coker College. (Sonoco Products Co)


 

Sonoco Receives Outstanding Marketing Achievement Awards   (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging and services companies, announced that its retail point-of-purchase display and packaging services business won four Outstanding Marketing at Retail Achievement Awards (OMAs) at the 53rd annual Point of Purchase Advertising International (POPAI) competition.
POPAI's annual OMA competition recognizes the most innovative and effective retail promotions. More than 500 entrants from more than 100 companies were adjudicated in 26 industry categories during this year's competition held during GlobalShop 2011. Entries were judged on design, innovation, interactivity and the proven ability to lift sales.
Sonoco won a Gold OMA award for its BIC Mark-it(R) Permanent Marker in-line permanent display for Staples. The Company also received two Silver OMAs, including a supermarket retailer award for its Frito-Lay Doritos(R) EA Sports(TM) pallet display for Kroger and a drug store retailer award for its Elizabeth Arden Ornaments counter display for CVS. In addition, it received a Bronze OMA in the drug store retailer category for its Vaseline(R) Sheer Infusion(R) VIP display program.
"I'm proud that Sonoco's talented retail merchandising team has again been recognized for its ability to work with our customers to create effective marketing solutions," said Gerson Heidrich, division vice president and general manager, Sonoco CorrFlex. (Sonoco Products Co)


 

Sonoco Elects Mahoney Sr. VP, Corporate Planning; Bond VP, Treasurer and Secretary  (Company news)

Kevin P. Mahoney has been elected senior vice president of Corporate Planning for Sonoco (NYSE: SON), according to Harris E. DeLoach, Jr., chairman and chief executive officer.
Mahoney, 55, is responsible for leading the Company’s merger and acquisition efforts along with corporate planning. He will report to DeLoach.
“During his 23-year career with Sonoco, Kevin has played an integral role in helping mold our growth strategy,” said DeLoach. “Since 2000, Kevin has been directly involved in more than 40 global acquisitions which added nearly $1 billion in sales to the Company.”
Mahoney joined Sonoco in 1987 as manager of corporate financial planning and analysis, and subsequently was promoted to positions of additional responsibility before being named vice president of corporate planning in 2000. He holds a B.S. degree in accounting from Marquette University and an M.S. Tax and MBA from DePaul University. Prior to joining Sonoco, Mahoney worked for Arthur Andersen as a tax manager.
In addition, Ritchie L. Bond, 54, has been elected Vice President, Treasurer and Secretary, reporting to Charlie J. Hupfer, senior vice president and chief financial officer.
Bond joined Sonoco in 2005 as staff vice president and Treasurer. He subsequently was named Corporate Secretary in 2009. Bond holds a B.S. degree in business administration from the University of North Carolina. Prior to joining Sonoco, Bond was treasurer of Alliance One International. He also served previously as a senior manager with Ernst & Young. (Sonoco Products Co)


 

Patented Radial Crush Tester Made Available to Industry  (Company news)

Sonoco's Patented Radial Crush Tester for Paper Tubes Made Available to Industry
Partnership with CCTI Will Provide a Standardized Testing Procedure

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, has reached an agreement with the Composite Can and Tube Institute (CCTI) to make the Company's patented Radial Crush Tester for spiral-wound paperboard tubes and cores available to the industry.
According to David E. Rhodes, Sonoco's director of global industrial technology and engineering, "The radial crush tester measures the radial strength of a tube or core, which is a critical factor for a customer whose product applies a radial load such as plastic film and extensible textiles. The tester is able to simulate the loading condition that a customer's products apply to a core. The failure mode created by the tester is the same as the radial crush failure that occurs in a customer's winding operations."
Kristine Garland, Executive Vice President of the Composite Can and Tube Institute stated, "CCTI's Technical Committee will develop and publish a standardized industry-wide testing procedure for measuring radial crush with the Sonoco radial crush tester. The Radial Crush Tester will be demonstrated at CCTI's Spring Operations Meeting, March 16-17, 2011, in Myrtle Beach, S.C."
Sonoco developed the radial crush tester in response to customer requirements more than 15 years ago. The tester is manufactured exclusively by Sonoco and used throughout its global tube and core operations.
Sonoco is the world's largest producer of spiral-wound uncoated recycled paperboard tubes and cores that serve as carriers for numerous products serving the film, paper mill, textiles, tape and labels, metals, construction, shipping and storage markets. The Company operates approximately 90 converting facilities on five continents. (Sonoco Products Co)

 

Sanders Named President and Chief Operating Officer of Sonoco  (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced that M. Jack Sanders has been named president and chief operating officer, effective immediately. Sanders, 57, will report to Harris E. DeLoach, Jr., 66, chairman and chief executive officer.
“We are very pleased to have Jack become president and chief operating officer of Sonoco. Over his 23-year career with the Company, Jack has demonstrated exceptional operations leadership while running all of our Global Consumer and Industrial businesses,” said DeLoach, who has been president of Sonoco since 2000.
In this new leadership role, Sanders will have global operating responsibility for Sonoco’s businesses serving consumer markets, including Global Rigid Paper and Closures, Global Rigid Plastics, Global Flexible Packaging and Global Services. He also will have responsibility for the Company’s businesses serving industrial markets, including the Company’s vertically integrated global industrial converting and paperboard operations. Combined, these businesses operate more than 300 plants in 35 countries.
A 1976 graduate of Louisiana State University with a B.S. in finance, Sanders joined Sonoco in 1987 as national sales and marketing manager, Wire and Cable Reels. In 1991, he was named general manager for Sonoco’s Protective Packaging division and was promoted to division vice president and general manager of Protective Packaging in 1998. Sanders was elected a corporate officer and named vice president, Industrial Products, North America in 2001. He was subsequently named vice president, Global Industrial Products in 2005, senior vice president in 2006 and executive vice president in 2008. Prior to this promotion, Sanders has served as executive vice president, Global Consumer, since January 2010. (Sonoco Products Co)

Newsgrafik #65741
 30.11.2010

Wood to Head Sonoco’s European Tube, Core and Paperboard Operations  (Company news)

Smith Retiring from Post after 40 Years with Company

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced that Adam Wood (photo) has been named division vice president and general manager of Converted Products/Paper – Europe, effective January 1, 2011, according to John Colyer, vice president, Global Industrial Converting.
Wood, 42, will replace Eddie Smith, who is retiring after nearly 40 years with the Company. Smith will remain with the Company through March 31, 2011, to help with the transition and to work on special projects. In this new position, Wood will have responsibility for the Company’s Sonoco-Alcore business unit, which includes 30 tube and core plants and six uncoated recycled paperboard mills operating in 15 European countries with more than 1,650 employees. He will report to Colyer.
“Adam is an excellent choice to lead our European tube and core/paper business after working with Eddie as the head of sales and marketing over the past four years. He has strong commercial skills and a detailed understanding of the European tube and core market, particularly in emerging markets,” said Colyer. “Eddie has done a terrific job in strengthening our business while leading our European operations since 2006. We appreciate all Eddie has done for the company. During his career with Sonoco, he has provided countless contributions in building business development processes while successfully running several of our consumer and industrial businesses globally.”
Wood joined Sonoco in 2003 as regional sales director for the Company’s European tube and core business. He then served as a regional sales manager for Sonoco’s North American tube and core business before returning to the Company’s European business in 2007. Prior to joining Sonoco, Wood served in sales management positions with Pactiv Ltd., and Tenneco in Europe. He is a member of the Chartered Institute of Management and holds an MBA from Bradford University School of Management.
Smith, a member of Sonoco’s executive committee, joined the Company in 1990 after it acquired the composite can business of Carnaud Metal Box, where he served from 1971 to 1990. He subsequently held several general manager positions at Sonoco, including for the Company’s European consumer products operations and its flexible packaging business in North America. Prior to heading industrial operations in Europe, Smith was vice president of customer and business development at the Company’s headquarters. (Sonoco Products Co)


 

Sonoco Helps Customers Shrink Their Environmental Footprint   (Company news)

Packaging designers and engineers and material scientists at Sonoco are using the Company’s cutting-edge proprietary sustainable packaging design software to help customers reduce their packaging environmental footprint by substituting or eliminating materials, down-gauging structures and simplifying the package to improve its recyclability. Sonoco is also working with customers to reduce and ultimately eliminate landfill waste at their manufacturing facilities.
“We are working to balance the growing demand from our customers, consumers and retailers for ‘greener’ packaging with requirements for convenience, performance and price,” said Jeff Schuetz, staff vice president, Global Technology, Consumer Packaging. “Retailers and consumer product companies are increasingly integrating sustainability into their business strategies and looking for Sonoco to help make those efforts successful.”
Sonoco’s True Blue™ line of sustainable packaging solutions and recycling services provides customers with packages that offer a clear environmental advantage over the package they were designed to replace through the use of more sustainable materials or source reduction or because they require less energy, water and/or raw materials to produce or result in fewer carbon emissions.
For PJ’s Coffee of New Orleans, Sonoco developed and is producing vibrant, three-ply, foil-based flexible coffee bags that require 10 percent less material and 15 percent less energy to produce and result in 10 percent fewer carbon emissions than traditional four-ply flexible coffee bags.
Sonoco also helped Kraft Foods convert its Maxwell House, Nabob and Yuban® brands of coffee from metal cans to more environmentally friendly rigid paperboard containers without sacrificing abuse resistance or shelf life. Less costly and more environmentally responsible than metal, the new cans are made from paperboard that contains more than 50 percent recycled materials and has received chain-of-custody certification from the Rainforest Alliance’s SmartWood program. The move to Sonoco’s high-performance composite can bodies also reduced both brands’ environmental footprint through a material, energy inputs and greenhouse gas emissions reduction.
“Our True Blue brand gives consumer product customers a one-stop shop for sustainable packaging solutions,” said Schuetz. “By combining our True Blue line of products with our total packaging solutions capabilities, we’re creating sustainable value for our customers.”
Unilever USA strengthened its Suave® brand image, cut packaging costs and reduced its environmental footprint by working with Sonoco Global Plastics to redesign Suave’s rigid plastic shampoo and conditioner bottles. The attractive new curve in the bottles’ walls improved the overall strength of the bottles and reduced the resin required to produce the bottles by 16 percent.
Sonoco is also converting the world’s leading infant formulas from metal cans to composite cans. Sonoco composite cans average 50 percent recycled content by weight and provide the same performance as traditional metal cans in abuse resistance and shelf life, but have a reduced environmental input—a reduction in material weight inputs, energy inputs, greenhouse gas emissions and certain regulated air emissions.
True Blue eco-friendly point-of-purchase displays like the one Sonoco’s Global Services division designed and produced for Unilever’s Vaseline® Sheer Infusion™ body lotion are helping customers and their retail partners meet their sustainability and sales goals. By redesigning an existing floorstand wing unit, Sonoco cut the paperboard required to produce the display in half—from 65.2 to 32.65 square feet—without sacrificing its ability to attract customer attention.
One of Sonoco’s new protective packaging designs for Hewlett-Packard (HP) LaserJet printers reduced the volume of foam required by more than half, cut the pack’s corrugated weight by 69 percent and decreased overall packaging volume by 52 percent. Most of the pack’s components are made from recycled paperboard, so it’s easier to recycle than the previous protective packaging. And, although it’s lighter, less expensive and more sustainable than the previous package, it provides the same level of product protection.
“Because we’re not limited to just one sustainable packaging platform, technology or format, our customers can choose from a variety of innovative options that meet their unique needs,” added Schuetz. “Our True Blue brand leverages Sonoco’s extensive skill and experience in developing superior design concepts that meet our customers’ performance, cost and sustainability requirements.”
Sonoco is also helping customers reduce and ultimately eliminate landfill waste through its fast-growing Sonoco Sustainability Solutions (S3) waste-reduction consulting service. By identifying recycling alternatives for materials being sent to landfills and developing a more comprehensive recycling program at Unilever’s Lipton Tea plant in Suffolk, Va., Sonoco helped the largest tea processing plant in the U.S. become a zero landfill facility in 2009. (Sonoco Products Co)


 

Sonoco Announces Paperboard, Tubes and Cores Price Increases  (Company news)

Sonoco (NYSE: SON) will increase prices for all uncoated recycled paperboard grades in the United States and Canada by $30 per ton effective with shipments on Nov. 29, 2010. In addition, the Company announced that it will increase prices on all paperboard tubes and cores in the United States and Canada by 5 percent effective with shipments on Nov. 29, 2010.
“Prices for old corrugated containers in the Southeast have increased by one-third in the past three months, which is unprecedented during what is normally the highest material generation time of the year,” said Harris DeLoach, Sonoco chairman, president and chief executive officer. “Strong domestic and export demand is causing an imbalance in the supply of recovered paper, which is our primary raw material. It is essential that we begin recovering these higher input costs.”
The Nov. 29 price increase for the Company’s uncoated recycled paperboard grades is in addition to a $35 per ton increase which went into effect on Oct. 11, 2010. (Sonoco Products Co)

 

Sonoco Listed in the Top Quarter of Newsweek’s Green Rankings   (Company news)

Sonoco, one of the largest diversified global packaging companies, has been ranked in the top 25 percent of the 500 largest publicly traded U.S. companies at 125th in Newsweek magazine’s Green Rankings for a second consecutive year. The Company’s reputation was rated third in the General Industrials sector and 33rd overall. Sonoco’s Green Policies and Performance ranking was 109th overall and fifth in the General Industrials sector.
To develop the 2010 Green Rankings, Newsweek magazine collaborated with MSCI ESG Research—a leading source of environmental, social and governance ratings—which served as lead research organization; Trucost, which specializes in quantitative measurements of environmental performance; CorporateRegister.com, the world’s largest online directory of social responsibility, sustainability and environmental reports; and ASAP Media. The goal of the rankings was to assess each company’s actual environmental footprint and management of that footprint (including policies and strategies) as well as its reputation among environmental experts. The 500 companies included in the rankings are the largest U.S. companies as measured by revenue, market capitalization and number of employees.
“We are very pleased to be rated so highly again this year, especially given the extensive in-depth research that was done to develop the Green Rankings,” said Harris E. DeLoach Jr., Sonoco chairman, president and chief executive. “To have our commitment to setting the standard for sustainability in the packaging industry recognized again is extremely gratifying for all of our employees and other stakeholders.”
In September, Sonoco was also one of only two U.S-based packaging companies selected to join the 2010/2011 Dow Jones Sustainability World Index. (Sonoco Products Co)

 

Sonoco Selected to the Dow Jones Sustainability World Index   (Company news)

Company is One of Only Two U.S. Packaging Companies Listed on DJSI World in

Sonoco (NYSE: SON) announced that for the second year in a row it has been selected to join the Dow Jones Sustainability World Index (DJSI World). DJSI World comprises the leading global companies in terms of economic performance, environmental stewardship and social responsibility. Dow Jones Sustainability Indexes are determined following an annual review by SAM, an investment boutique focused on sustainability investing, together with Dow Jones Indexes.
"We are very pleased to be one of only two U.S.-based containers and packaging companies to make this elite group of DJSI World companies. It recognizes the importance Sonoco places on being a leader in sustainable packaging and provider of recycling services to many of the largest consumer brands in the world," said Harris E. DeLoach Jr., chairman, president and chief executive officer.
Following SAM's largest global analysis of corporate sustainability leadership, 48 companies will join DJSI World, while 46 firms will be deleted, resulting in a total of 318 index components. All changes will become effective with the opening of equity markets on September 20, 1010. The DJSI follows a best-in-class approach and includes sustainability leaders from each industry on a global and regional level. The annual review of the DJSI family is based on a thorough analysis of corporate sustainability efforts, assessing issues such as corporate governance, risk management, climate change mitigation, supply chain standards and branding. It accounts for general as well as industry specific sustainability criteria for each of the 57 sectors defined according to the Industry Classification Benchmark (ICB).
DeLoach pointed out that Sonoco's selection to DJSI World for 2010/2011 was a result of significant improvement in its ranking in a number of economic, environmental stewardship and social responsibility factors. "Overall, the Company's 2010 score improved 14 percent from 2009, which reinforces the progress we're making in all of our global operations. In addition, the Company received best-in-class marks in our industry for advancements in product stewardship, climate strategy, customer relationship management, code of conduct and stakeholder engagement." (Sonoco Products Co)

 

Sonoco Announces North America Paperboard Price Increase   (Company news)

Sonoco (NYSE: SON) will increase prices in the United States and Canada for all uncoated recycled paperboard grades by $35 per ton effective with shipments on October 11, 2010, according to Jim Bowen, senior vice president, Primary Materials Group. (Sonoco Products Co)



 

Sonoco Targets Voluntary 15% Drop in Global Greenhouse Gas Emissions by 2014  (Company news)

Emission Reductions to Occur at Company's More Than 300 Global Manufacturing Plants

Sonoco (NYSE: SON), one of the largest global diversified packaging companies, today said it is voluntarily targeting a 15 percent reduction in greenhouse gas emissions (GHG) from the Company's more than 300 global manufacturing plants by 2014.
Harris E. DeLoach, Jr., chairman, president and chief executive officer, announced the new voluntary emission reduction goal in a letter to stakeholders from the Company's 2009-2010 Sustainability Report which was issued today. The report is available on the Company's Web site at www.sonoco.com.
"Last year, we committed to reducing GHG emissions from our uncoated recycled papermills in the United States and Canada by approximately 15 percent by 2013. I am pleased to report that our efforts in 2009 led to an approximate 13 percent reduction," DeLoach said. "We have put in place a global Web-based environmental management system which collects GHG emissions from all of our international manufacturing facilities. We have taken this data, established 2008 as our baseline year, and set a goal of reducing GHG emission from our more than 300 manufacturing facilities by 15 percent by 2014."
DeLoach said the significant progress Sonoco made in 2009 toward reducing GHG emission came from decreasing energy consumption and by converting steam boilers at some of the Company's paperboard mills to less carbon-intensive fuels. As an example, overall energy consumption at Sonoco's North American paperboard mills was reduced by 3.3 percent in 2009, which saved the Company approximately $2.2 million and reduced GHG and other emissions. Further projects are underway at Company mills in North America, Italy and Greece.
Sonoco's 20-page Sustainability Report reviews actions the Company is taking in the areas of environmental stewardship, community service and economic performance. The report provides a scorecard of initiatives, including efforts to provide more sustainable packaging products and recycling services offered by the Company to the Company's diverse consumer and industrial packaging businesses. (Sonoco Products Co)

 

Sonoco Investing in New Boiler Installation at Its Holyoke, Mass. Paper Mill   (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced that it is investing $2.8 million at its 100 percent uncoated recycled paper mill, located in Holyoke, Massachusetts. The investment includes the installation of two high-efficiency, natural gas-fired boilers that will supply steam to the mill's papermaking process. Construction of a new building and installation of the boilers is expected to be completed in August 2010.
The Holyoke mill has been making paper for 136 years. Sonoco has the last running paper machine in "Paper City" with an annual output of 66,000 tons of uncoated recycled paperboard. Sonoco also manufactures paper tubes and cores at a separate location in Holyoke that uses approximately 80 percent of the paperboard produced at the Company's neighboring paper mill. The two locations combined employ more than 135 people.
Holyoke Gas and Electric (HG&E) announced in mid-2009 that it would cease steam production operations by late third quarter 2010, citing a major decrease in industrial demand as the key driver for its decision. Sonoco worked closely with HG&E to develop a mutually acceptable exit strategy and the Company will continue to purchase electricity and natural gas for the new boilers from HG&E.
Dave Schultz, Sonoco plant manager, states, "There has been true collaboration throughout a very difficult time for both parties. Jim Lavelle and his team have been outstanding to deal with throughout this process. We look forward to continuing our long-standing partnership with HG&E and the City as we prepare for the future."
Schultz added that Sonoco would also like to thank U.S. Congressman John W. Olver, State Senator Michael Knapik, State Representative Michael F. Kane, the Massachusetts Department of Energy Resources and Kathleen Anderson at the City of Holyoke Economic Development for their continued support.
Sonoco is a strong supporter of local environmental sustainability as it uses recycled old corrugated containers (cardboard boxes), mixed office waste and newspapers from local communities to produce paperboard that achieves 85 percent post-consumer status for its converted products. As a result, Sonoco has earned certifications through the Sustainable Forestry Initiative (PwC-SFICOC-294) and Forest Stewardship Council (SW-COC-003307). Sonoco's Holyoke mill recycled a total of 62,900 tons of local post-consumer waste in 2008. Sonoco also runs the only loose paper collection operation that pays cash to local neighbors to drop off cardboard and newspapers to make paper. (Sonoco Products Co)

Newsgrafik #44312
 08.04.2010

Sonoco Receives Outstanding Merchandising Achievement Awards  (Company news)

Sonoco (NYSE: SON), one of the largest diversified global packaging companies, announced that its retail point-of-purchase (P-O-P) display and packaging services business won eight Outstanding Merchandising at Retail Achievement Awards (OMAs) at the 52nd Annual Point of Purchase Advertising International (POPAI) competition.
POPAI's annual OMA competition recognizes the most innovative and effective retail promotions. Judges from the P-O-P industry evaluated more than 450 entries from 100 companies in 26 industry categories during a two-phase selection process in determining the winners. Entries were judged on design, innovation, interactivity and the proven ability to lift sales.
"Being recognized for excellence by your peers is gratifying. However, it really speaks to the effectiveness of Sonoco's talented retail merchandising team's ability to effectively communicate our understanding of the power of marketing at retail for our global customers," said Gerson Heiderich, division vice president/general manager, Sonoco CorrFlex.
Sonoco won Gold OMA awards for its BIC Create-A-Pack Mark-it(R) Permanent Marker Display for Staples, Novartis Consumer Health Prevacid(R)24HR Launch Displays and The Scotts Miracle-Gro Company Pallet Bridge Displays for Lowe's. The Company also won a Silver OMA for its Elizabeth Arden Ornaments Counter Display for CVS. Four Bronze OMAs were won for Cadbury Adams USA Halls(R) National Display Program; Elizabeth Arden CVS Holiday Fragrance Tower Display; Procter & Gamble Pampers(R) Mixed Wipes 3X Floorstand Display; and Cadbury Adams USA Halls(R) 8+2 Permanent Counter Display. (Sonoco Products Co)

 

Sonoco Announces New Paperboard, Industrial Converted Products Price Increases  (Company news)

Sonoco (NYSE: SON) will increase prices for all uncoated recycled paperboard grades in the United States and Canada by $60 per ton effective with shipments on April 5, 2010. In addition, the Company will increase prices on all paperboard industrial converted products in the U.S. and Canada by 5.5 percent effective with shipments on April 5, 2010.
"Recovered paper costs have continued to rise rapidly throughout the first quarter of 2010. Key grades, such as old corrugated cartons (OCC), are up by approximately $110 per ton, or 150 percent, since November 2009, according to published lists," said Harris DeLoach, chairman, president and chief executive officer. "Actual marketplace prices for recovered paper are currently exceeding listed prices by another $20 to $30 per ton, due to scarcity of supply. As a result, we have no alternative but to pass on these higher raw material costs."
Sonoco is one of the largest producers of uncoated recycled paperboard in North America, and of paperboard tubes and cores, and protective packaging.
(Sonoco Products Co)