Sonoco Products Company

What they do

Sonoco designs and manufactures highly engineered and sustainable packaging products, including metal food cans, ends and closures, paper cans, and uncoated recycled paperboard. The company operates approximately 265 locations in 37 countries, serving consumer and industrial products companies. It reports in two segments: Consumer Packaging and Industrial Paper Packaging, with remaining businesses in All Other.

Revenue drivers

• Consumer Packaging — Includes metal food cans, ends and closures (Eviosys, branded as Sonoco Metal Packaging EMEA) and other consumer packaging. This segment benefits from the Eviosys acquisition, which expanded global leadership in metal packaging.
• Industrial Paper Packaging — Produces uncoated recycled paperboard (URB) and paper cans. In Q2 2026, North America URB trade ton sales volume grew 6% and EMEA APAC paper cans sales volume grew 9%.
• Geographic mix — In 2025, approximately 48% of sales were in the U.S., 43% in EMEA, 3% in APAC, 1% in Canada, and 5% in other regions. International operations (outside U.S.) accounted for about 52% of sales in 2025.

Recent performance

In Q2 2026, net sales were $1.9 billion, down 1.3% year-over-year, primarily due to the ThermoSafe divestiture, partially offset by higher prices and favorable FX. GAAP operating profit rose 9.8% to $193 million, while adjusted operating profit was $242 million and adjusted EBITDA was $324 million. GAAP net income was $105 million ($1.05 diluted EPS), down from $493 million in Q2 2025 due to a prior-year gain on the sale of TFP. Adjusted net income increased 10.6% to $151 million, with adjusted diluted EPS of $1.51. The company generated record Q2 operating cash flow of $301 million.

Strategy

Sonoco has been streamlining its portfolio into two core global segments, completing the sale of ThermoSafe in November 2025 and TFP in April 2025. It acquired Eviosys in December 2024 for approximately $3.8 billion to expand metal packaging leadership and drive innovation and sustainability. Management emphasizes productivity savings from fixed cost reduction and procurement, and highlights volume growth in industrial paper packaging. The portfolio transformation is substantially concluded, leaving industrial and specialty plastics as the only remaining All Other business.

Risks

• Macroeconomic and geopolitical exposure — Over half of sales come from outside the U.S., subjecting Sonoco to currency fluctuations, tariffs, trade policy changes, and geopolitical instability.
• Integration and synergy risk — The large Eviosys acquisition may not deliver expected synergies or anticipated benefits within the expected timeline, potentially affecting financial results.
• Raw material and energy costs — Inflation, tariffs, and supply chain disruptions can increase costs for raw materials, energy, and logistics, impacting margins if not fully offset by price increases.
• Divestiture-related cash flow impact — One-time taxes on gains from the sales of TFP and ThermoSafe (approximately $103 million in 2026) have pressured operating cash flow year-to-date.

Outlook

Management reaffirmed full-year 2026 guidance for sales, adjusted EBITDA, adjusted EPS, and operating cash flow as reported with the April first quarter results. They expect continued benefits from productivity and procurement savings, offset by volume mix and the absence of divested businesses. Executives noted that Industrial Paper Packaging results exceeded expectations in Q2 2026, with URB volume growth driving optimism.