SON - Earnings call transcript Q4 2024 | Sonoco Products Company

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Operator

Thank you for standing by, and welcome to the Sonoco's Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] I'd now like to turn the call over to Roger Schrum, Interim Head of Investor Relations and Communications.

You may begin.

Roger Schrum

Thank you, Rob, and good morning, everyone. Yesterday evening, we issued a news release and posted an investor presentation that reviews Sonoco's fourth quarter and full year results, along with our 2025 guidance. the section on at our posted sonoco.com. are Investor of Relations website Both today's be week. call website, replay conference A of will post transcript and a available later this we'll our on

I actual are If turn of are Therefore, today's we and estimates may based discuss you will not and subject future materially. risks statements you number uncertainties. forward-looking current to X, guarantees call, of would a to on differ that certain would results Slide projections. during and remind performance expectations, statements These

today's includes available well which use company's financial Further information reconciliations as the about Additionally, presentation non-GAAP operations. under the financial measures, Relations section as Investor the company's management to website. of to use GAAP measures of non-GAAP the condition of of about our useful and financial results believes measures, is provides information definitions investors including

except call for operations. on Finally, a full financial results references to certain basis, made specifically along with comparable for are discontinued on operations year-over-year or when corresponding referred this metrics company continuing to

me President Roger Officer; Coker, Operating Chief Interim and Jerry morning this Cheatham, Fuller, Financial and are Chief CEO; Officer. Joining Howard

remarks, For Q&A. have today's prepared followed call, will we by

the in will Slide you to now to presentation, over X turn will I turn If call Howard. our

Robert Coker

of manufacturers. was Europe's and Roger, closure in acquisition welcome the leading milestone you, and leadership Thank Sonoco, food inns back. a Evosys, created following for X December global XXXX cans, we year sustainable packaging metal

Evosys with we jump groups X shows, integration several with X As the facilities. large Slide process day of employees, started celebrations

achieving synergy integrating EMEA in now Sonoco are of our target. Metal $XXX and deep teams X-year Our million into process Packaging, the

during on our approval Holdings, through to second we divestiture quarter business further announced U.K. and our paper $X.X remaining metal our continuing focus received temperature-assured the track to businesses. We're having and strategic cold industrial Also on packaging on TOPPAN chain the billion. flexible the sale U.S., of and complete packaging, We're consumer the to packaging XX, our the regulators Brazil review thermoform further from transformed in now a portfolio business, approximately of December and

the Moving price to focused fourth driving cost our hurricanes team you X earlier for Slide impact the the will the X, in quarter. the quarter key adjusted on and our solid we drivers the not Despite stayed results headwinds see excluding quarter, of details project operating per results. and persistent were expectations. in Eviosys, guidance, Jerry provide share, our for did but earnings which within

loss summer, incurred Rest profitable, due is was normal a reported that year-end a Eviosys so far meeting certainly the was holiday experienced our and expectations. operations it are season were in results asset in and a primarily While interest slowdown. high-quality XXXX highly expense to Eviosys assured,

quarter, to driven fourth adjusted by adjusted productivity. XX%, Sonoco X% EBITDA strong produced margin nearly the in and improvement Overall, expanded EBITDA in primarily

XXXX, we million segments. all savings Consumer $XXX our For achieved approximately and Industrial in of productivity between equally split

Milton. As in mentioned operations were including destroyed had by by thermaforming Florida, quarter, earlier, States the early which the hit Hurricane largest our fourth which United impacted Southeast X hurricanes, some facility in roof our of

time beyond cleanup the efforts. recovery to and by and help communities to above minimize went caused storms while with at employees to taking Our same downtime the their in volunteer time

are sales in we on focused cash flow a operating invested operating by flow largest million on in strategy was projects generated capital cash growth and flow. and The productivity. of through and a million million $XXX Sonoco multiyear $XXX our Finally, a productivity. better-than-expected This second record in $XXX demonstrated improved cash our invest the year results free Sonoco,

Today's investments weighted are more towards growth.

businesses, can the to including and Thailand, If U.S. invest expanding greenfield across Slide you'll paper you in where in see continuing at X, in look production our we're Mexico

I sales completed Thailand paper few should organic when All world's become customers fully years. And facility production the and the can years. expected by is over next largest sponsored add, these projects increase the over will next sites are one several of to the of

recapitalizing productivity closures cans finally, demand And continue as businesses their In to to aerosol businesses and targeted Europe, the focus are and customer-specific U.S. opportunities continuing projects products we're and markets. repair adhesives while homes Packaging, food rightsizing rising and Also, pet U.S. with web and both caulk Metal U.S. demand the Europe to Industrial contractors tube growth strong projects. paper in storms who our adding experienced production from unprecedented along homeowners our caps and capture for we on select in and in meeting and capabilities fire-related for sealants events. cans we're for customers and

the Now over Jerry the me resume, took I great group's Jerry is January, well, please to the financial extremely in brief trust who operations go my let numbers. at global has knows doing Jerry Jerry us the and organization. introduction, turn career, interim I over with and for segment over a including Cheatham, of job. impressive and frankly, with worked welcome that but through when leader. role won't as of Jerry, and Sonoco's Jerry's I've CFO call headed take the and served respect our our Industrial most he finance

Jerry Cheatham

the the on that are X growth Please in basis in adjusted Thanks, presentation. the pleased are of present Howard. basis, quarter is note release. stated. metrics GAAP press EPS unless presentation an to appendix starting year-over-year the as of financial the as fourth a I'm results reconciliation to non-GAAP on otherwise all The Page on well and results, the

of businesses drive margin and to XXXX Howard year enable investments through our will bigger significant a focused made more creation earnings As We growth value was said, for improvement. milestone that strategy Sonoco. on progress fewer,

of improved the and market two leading greater future expect the global efficiency We excited our confident businesses are drive positions customer X to and about support. and

financing by Eviosys range. consisted transaction for end related period $X.XX, lower strong related negative consecutive operational by year-over-year guidance marked improvement. -- expense which the our business fixed to strong productivity time interest owned performance on was in We cost the performance grew and improvement of primarily and $XX EPS positive $X.XX within was to was adjusted initiatives. XXXX. quarter the Productivity year-over-year we The excluding XX.X% reduction the driven of EPS The the Eviosys of million eighth

further impact single-digit the This low partially offset price the by costs and other volume of negative and and aided volumes in our segments growth by businesses. Consumer Industrial was all lower in

and quarter X% divest partially This by non sales strategic of as to the function, Fourth was to Adjusted billion, $X.X Discontinued actions or that and reduced and from was of excluding the driven reclassifying change December net by the gains was procurement million. Eviosys This sales impact XX December was single-digit increased favorable volume EBITDA to X. margins $XXX low acquisition a on points XX.X%. X% completed exit from recycling EBITDA offset business improved volumes basis $XXX positions. adjusted by million selling of lower prices up operations

were our results Eviosys to favorable period. Consumer operations lower continuing in holiday partially selling the offset of XX% This sales up Consumer segment their Eviosys Page a the reflected contributed December acquisition XX and days during sales prices. pattern of by basis. lower sales sales on has XX due volume mix. was normal that

grew offset year-over-year margins negative by domestic global single-digit adjusted metal volume business, cost. operations -- cost to X% Consumer organic price reductions containers due and from Our continuing low productivity and rigid Consumer both EBITDA was experienced partially fixed EBITDA adjusted packaging growth. that

results. These $XXX segment include has of sales by our to sales the results Industrial reduced during recycling, XX Industrial decreased million. $XX the Page X% million reclassification quarter. which

prices benefited X.X% the up for Industrial driven points those in increased Organic by resets. Adjusted year-over-year. were completed sales strong by due been fourth to by quarter, single low million industrial increase. by also in $XXX during margins representing index-based increased actions, We the exit the improved improvements and of a sequentially would productivity. Adjusted in price digits, year, XXX low up selling have were operations single-digit China also $XX the to EBITDA XX% our quarter. sales basis million, Adjusting volumes year-over-year through EBITDA

has our Protective slowing affected of million. Solutions, adjusted new distribution. and EBITDA other did All from all sales was negatively XX vaccine product adjusted along with results in Industrial launch Plastics not customer's businesses. the The were in were Page XXXX repeat sales by $X million the business, results as EBITDA our that and divestiture of COVID $XX sales other

projects XX, growth second in best the cash to improvement. the year. of cash Strong our operating the generation we This have future on year for XXXX. year. margin for operating flow performance Page on of drove $XXX was flow year the year invested enable to $XXX performance performance $XXX capital record drive Turning and million heels the million for million We

ahead Now looking to XXXX. Page to and turning XX

an year. is of guidance average full Our TFP. average XX%. XXXX a a full The one expected stronger year the We're tax to and for exchange year average OCC of rate $XXX of Eviosys dollar in year. rate the full and $X.XXX euro quarter is approximately expected expecting effective to considers for

reset. on bridge organic organic and projecting by sales $X.X we TFP growth Consumer, price expect our We're the the net to from Page to by negative of of grow approximately in the businesses. single-digit due billion, billion offset divestiture $X Turning acquisition primarily index-based legacy to XX.X% In low sales growth, XX. Eviosys, to partially

to organic all the faring low be businesses in expected with resets with growth all to mid-teens. expect other also contractual favorable -- of organic in growth customers. Industrial group low single-digit due we existing digits single the volume to segment, the and Volume from For is price mixed

a adjusted Slide XX drivers our our summary of EPS guidance. provides of key

is dilutive projected Earnings XX% financing expected $X.XX, $X.XX driven XX% X% reflect other XXXX, organic in We offset XXXX, in the higher and cost to December. growth grow EPS the to from expect impact related be X%. net productivity, partially EPS the expected of of price legacy is performance, expense the the to expenses. businesses impacts strong growth, expected in the by negative to interest in XX% Eviosys operating range are acquisition These to due divestiture by and the that to approximately continued to be from earnings TFP repayment. our XX%, deliver in above associated The by Eviosys the fixed excludes accretive range debt adjusted of and expected to

due expected discrete headwinds between interest resulting repeat, to in expect $X.XX to items we $X.XX, Nonoperational not do to tax expense. net higher a FX to higher and are XXXX from rate lower expenses effective EPS that

Page XX flow key our and cash presents assumptions. guidance

$XXX of to in range of free million We operating expect cash between and to year have performance million strong flow $XXX million. to million $XXX flow cash the $XXX another

as drive and XXXX margin We opportunities. sales ratio on capital million of expenditures $XXX to be repayment. targeting growth spending net expected compared emphasis to are due The to of a higher approximately to slower debt of capital a percent expansion is

net a We of working lead growth capital expect million. to volume $XX use to of approximately

over turn closing Howard back to with I'll it for remarks. that, Now

Robert Coker

bigger found scale We metal sustainable products Jerry. products, fiber plastic Thanks, our and businesses technology and the the to was simpler, moved in industrial strategic food away Right. because value-added I'll a us complexity to and We positions necessary beverage and remove achieve ago win I to has marketplace. the business by more to we that and Sunoco display divest XX. medical could with transformation smaller today leader X molded low-margin packaging through for Slide Directors fewer in and automobiles, global consistently of Board for not market from move consistently win years we did us foam tray and a the become We've food, marketplace. stronger businesses. bottles to sustainable CEO, presence resin-based become so gone led from That now consumer to assets. and packaging. is the company ranging and other process build of we've packaging. the When honored noncore

caps position. leaned and the U.S. and growing into assembled now we've along assets we closures our have EMEA, and strong with market quality aerosol And cans, and but in

and Metalpack for XX% opportunities example, greater are similar approximately annual results can with growth. We for we've EBITDA XXXX. in XX% achieve continued For believe adjusted purchasing January projecting EBITDA and we Ball driven XXXX, improvement in Eviosys in growth defined than adjusted

another to invest key tenet As of is ourselves. strategy mentioned in our earlier,

in can franchise an with past investments example, that paper emerging have made resulted our over offer market sales more particularly paper markets years, cans XX%, that in the growing in new by nearly we've As X all differentiation. global and

global businesses lower of the EBITDA by markets, competitors. Our in technology approximately iconic unmatched by is profit grown North XXXX. and continued investment our of integrated business pruning product XX% URB industrial paper we and since certain products have America The leader

EBITDA cash-generating between debt the the utilizing leverage by a to to cash our focused And in finally, proceeds sales reducing Xx and $X.X the $X approximately flow adjusted strong new divestitures, become in capital has cash billion and Sunoco on billion our engine past years. free flow. allocation X.Xx in strategy free After from cash net end producing is of X investing operating ourselves, over XXXX, asset

of the expect achieve extraordinary cash finally, And returning form our to we sector-leading consecutive of years to an XXXth dividends. shareholders in

graphic new We is XX project Sonoco approximately billion XXXX, what XX% expected representation businesses Adjusted is and between The billion $X million. with cash approximately our $X.X and Slide to EBITDA along operations in served -- between a is remain between strong $X.X grow to of XX% markets. $X.XX sales the or will million excuse achieve grow billion. to billion. flow me, $XXX to from will $XXX and expected

occurring our the consumer the mix to balanced world shifting our of geographic of more sales in will half still Finally, around markets with more States. than and United reach more business become is further our

of well portfolio our prospects our to to We're serve industrial to improvement strong to world-class challenging growth, continue changing to for global cash packaging start Looking to continued positioned our greater our customers. value transformed forward, I a us diverse off the return allow flow will XXXX, businesses and margin needs are generation we consumer, believe shareholders. solid believe of and

operator, to And take that, any ready questions. with we're

Operator

comes first Staphos the question of George [Operator America. from of Instructions] line from Your Bank

George Staphos

important I you or your details. the about your depending your for seeing early everybody And that a the how quick guess hope Relatedly, is to I doing Roger, voice Eviosys Thanks on XQ talk I EBITDA original, how relative the about Jerry, can on basis? can great $XXX welcome. guidance rates well. exit talk much bit perspective you're little from want first a hear I rates most say, in TFP follow-on. to to across is quarter? annualized businesses? again. of about you might million expecting lastly, you you're talk an have can the

Robert Coker

George. Sure,

it's looks million somewhere for On adjusted like Eviosys run actually, neighborhood the to the going XXXX. rates, the exit rate be in for $XXX around of

our XXXX, our we've As guidance. into our what that we've XX% entered a plan in increase into expectation built that's and is number, and is got

remainder we've been And seeing on very on quarters. America, But that on behind particularly business us. metal obviously, the there. sequential bullish so then can improvements about the improvement, of business slight the early of run And far, we're with on we're X.X businesses, go-forward we've rate, seeing months type of improvements, paper the can in seen in the America, consecutive over flat, here out the to particularly Industrial December quarter-over-quarter North flattish X North business, coming last yes, the

we're the lot enter how we positive things year, we on a but as what new with So feel perspective, we uniquely control. the control macro uncertainty we for dipole going can in of out, starting what's

Jerry Cheatham

X Yes.

to TFP similar relates for expect saw Just we be as quarter, quarter to performance we it the XXXX. XXXX expectations in first what first to QX the in

George Staphos

Okay.

is the And you're improvement. where $XX you're Was on business the So I expecting remember positive relative forecast, sequential here last slides. just million, XQ below nor things that but for there from just fourth It to our with in roughly negative would somewhat be quarter? any neither recognize if million-ish, or maybe Industrial, see question. which want was there, $XX to if your seeing were that correctly then I are plan either guidance? the

Rodger Fuller

were Yes, as Yes, Industrial the is fourth this in far North we quarter. Roger. with pleased America, very George, as

you're soft. with in growth to that's just weakness Paper America. mill nice job quality North We already in there, the Europe standpoint. And capacity slightly. George. numbers, from team America were URB and said, in core basically that. of and volumes, really think North a our As converting we've from work seen outside especially Howard the from winning on and be in operations the paper North got what hard do core to in share, We're a has a standpoint, I continued We've volumes area. flat, nice working up very seeing some America paper see standpoint maybe service a frankly, tube doing do

As took we a out we of machine small talked Greece. quarter, last paper about

to X from and in very difficult at exited in in Asia, competitive paper Europe the looking businesses past pricing Asia, across be We situation. China. continues our the a platform the soft quarters, in Industrial Over so board hard we're volume. European And

seeing in machine out small of paper you're Indonesia. of numbers. some So a the taken We've that

North We're first coming weakness So continuing from price see North fourth quarter. the about cost in quarter, outside and frankly, sign, the is North America we optimistic good which a that turned America. was positive in the America very into

outside working sequential we're as it get through XXXX. America, we'll take will a little and we hard improvement, So cost as to North time run but right, see

Operator

of question Anthony comes line from next from Pettinari the Your Citi.

Unknown Analyst

Burgmeier actually just is kind question high My is first Anthony. level. of Bryan This from on a for

low think in kind guidance I single-digit XXXX. volume of points growth to

Just some curious bit be implies little a chip what maybe little or for of a maybe customers. Consumer? blue bit consider to above peers that We maybe that specifically above the

So that. I'm driving just curious what's

Robert Coker

just at in single-digit the businesses and can really, we in And low quarter-to-quarter-to-quarter digits the year our Yes, in Brian, fall type global year. here, as -- the if actually my low we're low a solid America, last we're for it business well. over in seeing metals strong the but business main consumer, the pickup full North growth I X paper charts and aggregate saw a seeing look double single in

deployment. capital So I projects, Mexico, lot new lines new the U.S. the talked Thailand, plants of A earlier about those in in

up in early period Others of time. are a stages the off. over start be starting Some will of

single as But -- not it's from. any where that's type forecasting -- recovery. low being great driven we're we said, not But digits. We're

Unknown Analyst

recovery. season pack think a was you think a North it. Got major, pack thinking XXXX? I'm in know businesses, American forecasting expecting maybe not just the pretty then year. metal. curious Metal better weak anything but you just just a last maybe within recovery said And full North you of partial maybe have you're your kind it. specifically Got you or are I I American about if

Robert Coker

say of we markets holding things I'd I are were as Yes. slightly kind we're in better. we're you a but single-digit impacted, mean, not few that that impacted. There -- were low up. noted,

particularly forecasting of that where we type share have a coming from. feel where from So we're is But like recovery. certainly, aerosols, are position do growth visibility we exactly any we not great on

we if think upside. season, great I pack have just a that's

Operator

Matt Roberts the next of question line James. Your comes from Raymond from

Matthew Roberts

lot first moving could If guide certainly you quarter I question I a follow Typically, as do parts. one on there's of understand up George's earlier. ahead well.

are volume Wondering of pieces. frame bridge you're recognizing items there little a impacts price So bit expecting and terms in of moving of a or or any other lot such for help productivity terms EPS you there, if what could better XQ in as costs?

Robert Coker

you of a moving nailed beginning, from the are very pieces. it Matt, right there lot Yes,

guys cetera. would I basis quarter-by-quarter follow-up we update an up annual pretty think we be calls some you off, because have. et just that may we'll there'll we going a quite now, go and decided et certainly a forecast, this help to as on cetera, the with year, much But of that go you all the with covers. We've associated through moving TFP, clean right offset questions of with the pieces that few on move

Matthew Roberts

ThermoSafe, the year. on middle the understandable thinking -- other the out in We've Maybe something other or in some end in negative there expected noted exiting November recently volumes Certainly you in all destocking there markets. Have in there? changes segment of lingered early pharma think I the you timing the and half year. were in heard sign close there. any been has XXXX of the to I believe

is and of months like any what there And that in XX seems business? XXXX terms in guide, leverage maybe changed while you assumptions the Xx previously volumes in than ThermoSafe So Eviosys. a the ThermoSafe were from included that the It that from you bit less target? are are after seeing thinking

Rodger Fuller

quarter. little the pharma optimistic ThermoSafe, soft XXXX, Quickly really, were said, have mentioned, however. Roger. slowed it's in you as that's you the about Matt, some. slows And fourth on volumes an issue, a industry sales as We're

of areas of clinics, drugs they're tight. tight impact drugs you've key as the ThermoSafe our of number those GLP-X GLP-X offices will those. consumer, that a that samples. that, largest on, There to at And on look was focused of supply doctors' Last with now shipping for drugs business. you number could shipped the is we're of year, very the so was of a one one direct If producers and positively be seen that restriction

A lot vaccines. on going in

understand vaccines COVID As you vaccine. are in expect flu be we very you vaccines season strong if know, like And for year, products all look Mist we've vaccines out have that. XXXX. the to We coming had slowed tremendously. flu with new this at flu there But there

what So we're We've ThermoSafe. our there. changed on not still are optimistic expectations

of be the expect to the the year. We divestiture process by completed end

that's that's So plan. as deleveraging already And changed. not into you've built our said,

areas So optimistic industry but slowdown there. some got we've we're is an about optimistic The still we're that specific issue, very in XXXX.

Operator

next Research the Your Partners. from Mark from line Weintraub Seaport comes question of

Mark Weintraub

cash than a Two help share the than can your free Because have investment, have to is you you flow then lower flow also whole cash $X.XX bit and EPS One, working of you cash good free CapEx capital lot clarifications share? $X us EPS but a your lower maybe. from flow per EPS. DD&A. to bridge per the Not with your

out just us please? there, help If you could

Jerry Cheatham

interest Yes, of and is higher guidance, a -- kind reflecting cash profile. in first it expense of normal little of I think the probably a all, probably impact on pulling of bit. what working you're our effective some flow rate the a you're sort tax higher And seeing capital seeing it there down

little maybe would be a two items bit you give reconciling those that. that be trouble of a So -- the in the

Mark Weintraub

on metal that the also be we anything is in with significance Okay. after. on I'll overlap, circle one should way other? back be might of guys that guide or included perhaps that you there But the

Robert Coker

global Mark. much flattish No, really pretty a isn't, from There perspective.

there about. So talk material nothing to

Mark Weintraub

XXXX? synergies like does what then terms is lastly, And XX% is Or synergies? on that you're increase Great. Okay. were you X include in expecting. for or numbers Eviosys, thanks of the that on that X using, specifics ex for The the

Robert Coker

Mark. a percentage in Synergy-wise, synergies had you I'm Yes. significant asked, we the anticipated that we would fairly of glad achieve year X.

did we recall, midsummer. announced the that deep a deep take dive -- you'll would this. expect As authority, not U.K. the semi We into CMA, deal

not not terms heels put us able negotiating our really until contracts in we of our did we close -- major were on suppliers. So of first which the annual to week with December,

In raw fact, it turned we the business. the run more had necessary that into materials to ensuring global

than So flowing synergies X, the of X/X rather the those through, in XXXX. about coming majority we're of estimating coming year synergies really with the into remainder

lot a certainly, bullish of side, not extremely the context at only what terms in get So anticipated. the And had we the are into deeper simplified that's least of The synergies the the there, of business even we X now, we procurement substrates but coming But drive not integration. pretty and over exciting years. the opportunity cans products. productivity the to further converted through really and portfolio SG&A, URB through being more on

Rodger Fuller

between other synergies that all within as result Mark, Europe the The -- Mark. fall the of necessarily don't add, in those sorry, The just some the and in doses -- spread business U.S. metal synergies the well. I'll businesses other

synergies line. are those corporate really So

Mark Weintraub

can shortfall maybe Okay. anticipating. That's year just I'm point you specific going Eviosys you to? here, originally apologize, little and I might been super have last helpful. relative but know I Anything to what long And in a then the

Robert Coker

outlook a day, of disruptions Things volume happen. are some it. we of issues year, earlier issues noted obviously, in with say But surprise items. at a as I were have There Obviously, -- go-forward some but highly cost few part transaction-related I'd issues. did general the that they the quite we're had of the the the they that confident in that say, business. would end

Operator

Roxland comes from of next Your Securities. from question Mike the line Truist

Michael Roxland

the all progress. on Congrats

up. to follow Just wanted

as I rationalize on you provide you or mentioned to could did what quoted to -- Roger, maybe doing more way the Greece? weakness color improve mentioned you business Europe European continue to to thinking -- do. you some around in about that, Any in just having paper you're some assets you expand and in think, work how

Rodger Fuller

out X, ago, our Yes. and work America frankly, referring network to, the in North from we people this Yes, cost, good of the you question. in mills taking mill side just highly What was And was paper -- best well, high-cost capacity years the that's investing in remember, really process can just as most Europe. talking really about our the started I business. and really X I lowest optimizing

of our we to a invest I how mill be Europe. in push decisions in providing difficult more out should more mills accelerating our really need the mills, Europe, where we As just And be focus in fantastic my Greece. can opinion, we said, hard in around the and got we took best URB competitive on making in we've some

As capacity a moves said, in unprofitable made we've in the I to some Ireland We made out system. get of Greece. move

So in my opinion, we just need to accelerate that.

which it accelerating through. We are cases, takes in that. we're It working just And some takes time. capital,

Michael Roxland

we year XXXX, that should hindsight? this will be you largely as -- that well be expect Got is this so going at that this it. when done something will look be in Is to

Rodger Fuller

we're in You'll That's Europe in improvements year-over-year. and this year confident see around guidance, that. the

more Europe year. around moves capacity this see You'll in

and flow working they'll it on into actively you'll speak. this year, we So see as we're XXXX, but yes, I improvements think

Michael Roxland

as the then is negative? how noticed that? synergies should coming we time you've with $XXX CMA you've or that it that positive Perfect. 'XX upside a mentioned the it's short million of better Eviosys. some think follow-up Great. not on than And But And integration good. or given of most that the of issues. anything And to in thus 'XX, the Anything just synergies from about now of and potential just proceeding a X in you How time, expected? owned Obviously, short quick anything far? or period the

Rodger Fuller

going Mike, Roger again. Yes, frankly. I think the is great, integration

very we strong team. leadership As inherited expected, a we

the customer cultures Our a a all critical practices have a best of market down business. of of perfect common we others well one CPGs across some have know. couple leverage we some fit. the we path customers don't. areas And and large relationships. to From good standpoint, -- And sharing CPGs, there are opportunity of the We're there's the think the that and region are opportunity you large serves ones those would

a good So really there. we opportunity see

is not market supplies, those a -- materials the So as types our finding together things, logistics, standpoint, Howard focus even until speak From clear strategy and we're supplier area we're serving the has mentioned, focusing go January, across standpoint, those we're packaging a our together material to to coatings, we across putting add of on we're looking From really of customers globally. buy is metal value platform. could that pallets, ways purchasing an indirect extreme on. but platform. new to already we large a materials, tinplate, direct compounds, direct European

industrial know, large that business platform. you can logistics, got As we've paper now indirect a there, European cost at across metal. looking leveraging and with We're transport there business a

we're confident get leverage to of significant synergy XXXX. the S&A to $XXX run the by also million And opportunity very million that across target to in Europe. rate So $XXX end there's a

So again, industrial standpoint, our across a metal -- tremendous from in businesses shared can. and industrial those serving IT, European finance and us paper businesses opportunity X for services our is S&A and HR an

firm from got Eviosys integration confident So place the are. we the think to really is so catch from And going family just a We're as plans in I but started, support I synergies. great. We're We team's new up. think been entire where we've late got the start, the I fantastic. pleased members and in our with

the the. integration really business Eviosys feel coming about optimistic and the in we So

Operator

from Bank line America. the of comes of Your [Operator Staphos next George Instructions] question from

George Staphos

Follow-on question.

itself. look for the would a feel talk diversify it were if metal the your about to we had you're to to you if synergy, XXXX? And we are that remarks, the business construction missing progressing. doing Any metal? you folks, you in direct then Industrial like, coming how the how expect where productivity more and us Is do you it, talking it seeing traditionally? base trade, earlier in markets? had of about ex mentioned has earlier of relative elsewhere? mix food, for customer and do and but gears tariffs Can switching aerosol? what traditionally to how across what could it strength And now more about forgive And bit work in coming issues me supply be that both that, think trying totally on chain the supply you concerned Rog, about work color Consumer? the from and, to give within -- you Secondly, is So and if indirect you're you've Is sort about

Robert Coker

So I over see between if back. those. year-over-year, the over I about I it we've XXXX, we're pulling George, in all neighborhood roughly mean, got Productivity and again. somewhere for of talked --

year-over-year Just is massive improvements, and calculation. it a

track year, This million of business. we're $XXX-some-odd been conservative the a again, I $XX around like same we've we're to on XXXX. in So on. million $XX think of Hopefully, on million view, taking the that million year-over-year kind in stay more top $XXX-plus we'll base

Rodger Fuller

And of out just keep plastics is that. that and in mind, George, flexibles

strong into to a So fall you productivity they've that I out the number talking And been the into contributor productivity. is number Eviosys that see, about. doesn't built was which

that $XX in that there significant So productivity show up pieces don't there's million. another of pretty in

Jerry Cheatham

those mix pretty And from of between a George, would standpoint, I the consumer add mix that and industrial. balanced is

Robert Coker

the if in that of we've U.S., that it supplied I local keep chain in roughly markets, We local have for frankly, but like markets. opportunities we'll of us business ultimately diversity more that non-U.S. on and to And we we're gives now the our at business. have. don't up. the in we through otherwise it's mind the issue, to minimize of going U.S. we supply on here look to Certainly, XX% would without And And is how than them. in as end impact pass you Yes. an can. mechanisms serving all do outside can see the impact would our say total, we tariffs, have the that of remainder they

to impact navigate of an of the So Mexico, going really the on between type paper point metal impact. side able that your little Again, is on but material we'll of Canada to bit be and any less issue. through without is the business The side.

aerosol we've the just side increased the on In the business side, terms seen considerably. strength, of paint the demand yes, of on has

to you up. in of are can COVID of few has lot sitting a do season that has every been understand But paint hangover our paints cans think imagine with garages. strong. us still pretty have Flu I the and a -- got one effect I

as well. we're in it disinfectants So seeing

was have. are and slight focusing yes, -- customers, position share. just business, share deteriorated, on rewarded And hard those that the really there we're then strategic and the in So that got customers in working a that that historically, increase seeing of an provide the base on increases the we owner previous and we had satisfy, to order quality service expected

Operator

from Fargo. from the comes Your Wells Carlson Richard of next line question

Unknown Analyst

I to Should work are either it's that click other continued need you CapEx, XXXX models? of when focused in This is maintenance you sales that synergies, more a we for to Gabe. just our a pieces wanted in the we target leverage think Eviosys keeping already are big a there's the percentage about guidance, we other had Slide disclosed good for any sales there kind if of had. And then you guys and double X. early know be than on too towards Richard chart trend I level? mind but Or asset the a basis? on on on

Robert Coker

Yes. the versus we're value-added cost, of I'll capital XX% But towards the more CapEx for year is that talk Jerry weighted somewhere about actually think value-added this is around let maintenance. Richard, coming leverage. forecasting I the

around going the number we've got, up seen and So we've plants capital sponsored X major last already of a I've flip greenfield or X world. over years, talked through that the initiatives

of cost, leverage? as So talk benefit pretty that the you plants 'XX. about these they that. 'XX, Will as bullish start we 'XX, we'll ramping the Understanding see invest and the up about

Jerry Cheatham

Yes. Yes.

we're forward we earlier leverage to would to we Obviously, end to strategic help accelerate of X.Xx generation flow give XXXX. X that, strong will that confidence but end we're the cash there also to cash -- we that us get can X.X get targeting those by ThermoSafe, moving the and to alternatives will X.Xx X are which flow proceeds on -- X strong call, believe the the with that for free As to towards -- operating said

question we businesses towards to our sales. in of and capital, on on do X.Xx growth X.X to to generating And value our to tilt that expect are And invest in trying continue of capital standpoint. we more your percent a

Operator

I question-and-answer Roger And session. for will call the closing now turn back to remarks. our Schrum that concludes over

Roger Schrum

for further on joining us I discussions certainly we are some website. and conferences forward want everybody today, We upcoming look to with have to meetings our you. posted do thank with investors and that

So you and disconnect. stay other and presentations updates participation, tuned thank that your we have. for can you for Again,

Operator

today's concludes joining. conference call. for you This Thank

disconnect. now may You

Sonoco Products (SON) 19 Feb 252024 Q4 Earnings call transcript