Sonoco reports 16.5% decline in Q1 2025 net income despite record sales and EBITDA

USA – Global packaging leader Sonoco reported a GAAP net income of US$54.4 million for the first quarter of 2025, representing a 16.5% decline compared to US$65.2 million in Q1 2024.

Despite the drop in GAAP earnings, the company delivered strong adjusted results and record revenue performance, reflecting the growing strength of its reshaped business model.

Adjusted net income rose 22.7% year-over-year to US$137 million, with adjusted diluted earnings per share reaching US$1.38.

These gains came alongside a significant 30.6% increase in net sales, which hit a record US$1.7 billion during the quarter ending 30 March 2025.

The surge in revenue was largely driven by the acquisition of Titan Holdings I (Eviosys) in December 2024, boosting Sonoco’s Metal Packaging business in the Europe, Middle East and Africa (EMEA) region.

However, pricing gains were partially offset by several factors, including the sale of the Protexic Solutions business, the closure of two manufacturing facilities in China, and unfavorable foreign currency exchange rates.

Sonoco’s Consumer Packaging segment showed particularly strong momentum, with sales climbing 83% and adjusted EBITDA soaring 127% year-over-year.

Meanwhile, volume trends across the business were mixed—robust growth in consumer packaging was offset by declines in the Industrial Paper Packaging segment.

The company posted record Q1 adjusted EBITDA of US$338 million, a 38% increase over the same period last year, underpinned by solid operating performance and integration progress.

Sonoco also realized US$17 million in productivity gains through procurement savings, improved production efficiency, and fixed cost reductions.

Despite higher effective tax rates—30.9% for GAAP net income and 25.7% for adjusted net income, compared to 18.6% and 26.2% in Q1 2024—Sonoco reaffirmed its full-year guidance.

The company expects a 20% increase in adjusted net income and a 30% boost in adjusted EBITDA for 2025.

During the quarter, Sonoco completed the US$1.8 billion sale of its Thermoformed and Flexibles packaging business to TOPPAN Holdings.

It used US$1.5 billion of the proceeds to significantly reduce debt. Additionally, US$92 million in net capital was allocated to growth and productivity initiatives.

President and CEO Howard Coker commented, “Our first-quarter results demonstrate the strength of the new Sonoco. We achieved record top-line and adjusted EBITDA performance—up 31% and 38% respectively—while adjusted earnings per share grew 23%, even in the face of elevated interest expenses, taxes, and currency headwinds.

“The successful integration of Eviosys, now rebranded as Sonoco Metal Packaging EMEA, has already delivered strong synergies across our global metal packaging operations.”

With the transformation of its portfolio and continued focus on integration, efficiency, and innovation, Sonoco appears well-positioned to drive sustained performance throughout 2025.

Subscribe to our email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE