Sonoco Products : Q3 2023 Earnings Presentation

SONOCO

SONOCO THIRD QUARTER 2023

Earnings Presentation | November 2023

Forward-Looking Statements / Non-GAAP Financial Measures

Statements included herein that are not historical in nature, are intended to be, and are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. In addition, the Company and its representatives may from time to time make other oral or written statements that are also "forward-looking statements." Words such as "anticipate," "assume," "believe," "committed," "consider," "continue," "could," "estimate," "expect," "forecast," "future," "goal," "guidance," "intend," "likely," "may," "might," "objective," "outlook," "plan," "potential," "project," "seek," "strategy," "will," or the negative thereof, and similar expressions identify forward- looking statements.

Forward-looking statements in this communication include statements regarding, but not limited to: the Company's future operating and financial performance, including fourth quarter and full-year 2023 outlook; the Company's ability to manage variable and fixed expenses; opportunities for operational improvements; customer demand and volume outlook; the Company's relationships with its customers; the Company's ability to create near-term and long-term value and to generate cash flows and returns for shareholders; expected benefits from accretive acquisitions and divestitures; the effectiveness of the Company's strategy; the effects of the macroeconomic environment and inflation on the Company and its

customers; and outcomes of certain tax issues and tax rates. Such forward-looking statements are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management. Such information includes, without limitation, discussions as to guidance and other estimates, perceived opportunities, expectations, beliefs, plans, strategies, goals and objectives concerning our future financial and operating performance. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed or forecasted in such forward-looking statements. The risks, uncertainties and assumptions include, without limitation, those related to: the Company's ability to achieve the benefits it expects from acquisitions and divestitures; the Company's ability to execute on its strategy, including with respect to acquisitions, divestitures, cost management, restructuring and capital expenditures, and achieve the benefits it expects therefrom; the operation of new manufacturing capabilities; the Company's ability to achieve anticipated cost and energy savings; the availability and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs and escalating trade wars, and the Company's ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these pricing risks; the costs of labor; the effects of inflation, fluctuations in consumer demand, volume softness, customer destocking and other macroeconomic factors on the Company and the industries in which it operates and that it serves;

the Company's ability to meet its goals relating to sustainability and reduction of greenhouse gas emissions; the Company's ability to return cash to shareholders and create long-term value; and the other risks, uncertainties and assumptions discussed in the Company's filings with the Securities and Exchange Commission, including its most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors." The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed herein might not occur.

Information about the Company's use of non-GAAP financial measures, why management believes presentation of non-GAAP financial measures provides useful information to investors about the Company's financial condition and results of operations, and the purposes for which management uses non-GAAP financial measures is included in the Company's Annual Report and on the Company's website at investor.sonoco.com under Webcasts & Presentations, and Non-GAAP Reconciliations for the Q3 2023 Earnings Presentation. Pursuant to the requirements of Regulation G, the Company has provided definitions of the non-GAAP measures discussed during this presentation as well as reconciliations of those measures to the most closely related GAAP measure on its website at investor.sonoco.com.

This presentation does not constitute the solicitation of the purchase or sale of any securities.

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Sonoco | www.sonoco.com

Today's Attendees

HOWARD COKER	ROB DILLARD	RODGER FULLER	LISA WEEKS
President & CEO	Chief Financial Officer	Chief Operating Officer	VP of IR &
			Communications

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Sonoco | www.sonoco.com

Q3 2023 Results Summary

	Adjusted	Adjusted	Adjusted
REVENUE	EBITDA	NET INCOME*	EARNINGS PER SHARE*
$1.71B	$280M	$145M	$1.46
-10% y/y	16.4% Margin	8.5% Margin

HIGHLIGHTS

• Sales flat sequentially as expected; cost management and productivity better than expected
• Consumer volumes sequentially higher in most businesses; metal aerosol cans remain weak from destocking
• Industrial volumes as expected with continuing input cost pressure
• Closed the RTS Packaging and Chattanooga mill acquisition in September
• Strong adjusted EBITDA margin and operating cash flow results in the quarter

4	* Net Income = Net Income attributable to Sonoco. See Appendix for EPS Adjusted to GAAP reconciliation. See investor.sonoco.com for reconciliations of other non-GAAP financial measures. Sonoco | www.sonoco.com

Financial Results

Rob Dillard

Chief Financial Officer

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Sonoco | www.sonoco.com

Q3 - 2023 Financial Results

	Q3-22	Q2-23	Q3-23	YoY %
	Change
Net Sales ($M)	$1,890	$1,705	$1,710	(10%)
Adjusted Operating Profit ($M)	$225	$211	$213	(6%)
Adjusted Operating Profit Margin	11.9%	12.4%	12.4%
Adjusted EBITDA ($M)	$288	$275	$280	(3%)
Adjusted EBITDA Margin	15.2%	16.1%	16.4%
Adjusted EPS	$1.60	$1.38	$1.46	(8%)
Guidance Range	$1.35 - $1.45	$1.45 - $1.55	$1.25 - $1.35

6	NOTE: See appendix for EPS Adjusted to GAAP reconciliation	Sonoco | www.sonoco.com

Q3-23 Performance Review

Sales Bridge (Year-over-Year)

(Dollars in millions)

$1,890			FX/Other
Q3-22			$23	$1,710
Volume/Mix
	Price		Q3-23
	($145)*
	($58)

* Includes Acquisitions and Divestitures

Adjusted Operating Profit Bridge (Year-over-Year)

(Dollars in millions)

$225			Productivity
			$30		$213
Q3-22
			FX/Other	Q3-23
	Volume/Mix
	Price/Cost	($1)
	($31)*
		($10)

Sales Drivers

• Volume/Mix: Consumer lower from inflationary pricing and destocking at retail and continued low Industrial demand
• Price: Unfavorable price performance driven by index- based cost increases and price decreases in resin and metals businesses

Profit Drivers

• Volume/Mix: Lower unit volumes negatively impacted profitability
• Price/Cost: Negative with index-based price declines; continued inflation in fixed and variable costs including labor
• Productivity: Strong productivity mainly from the Consumer segment

* Includes Acquisitions and Divestitures	Sonoco | www.sonoco.com
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Q3-23 Segment Results

			Adjusted	Operating
	Net Sales	Operating	Profit as	OP Bridge Drivers (Y/Y)
			Profit	% of Sales
	$MM	Y/Y Growth	$MM	Y/Y	%	Y/Y
	Growth	Growth
CONSUMER	$938	(9%)	$112	(12%)	11.9%	(47 bps)	• Volumes down primarily driven by inflationary pricing and
							continued destocking
							• Negative price/cost mainly driven by lower pricing in metal
							packaging and plastics food
							• Positive productivity driven by supply chain / cost controls,
							partially offset by deleveraging
INDUSTRIAL	$580	(12%)	$75	(8%)	12.9%	56 bps	• Lower volumes across all key markets and geographies
							• Price/cost lower as paper indices declined and OCC and
							other input costs increased
							• Profitability supported by positive productivity from mill
							utilization and lower operating expenses
ALL OTHER	$192	(3%)	$26	66%	13.3% 553 bps	• Volumes down slightly across the business units
							• Profitability higher from strong price / cost and productivity
TOTAL	$1,710	(10%)	$213	(6%)	12.4%	52 bps	Sonoco | www.sonoco.com

Capital Allocation

Capital Allocation Framework is Aligned to Business Strategy to Drive Value Creation for Shareholders

Capital Allocation Priorities

Operating Cash Flow

Cash Flow from Operations

Capital Expenditures to support ongoing business and drive growth

($M)
					251	268
(37)		79	183	138	187
118	1		98
Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23

Free Cash Flow

Balance Sheet Optimization	Dividends currently paid at $0.51
in compliance with debt covenants	per share (>3% LTM yield)

Net Capital Expenditures

($M)
	97			87	88	78	93
			77
		67
	53				71
54
						12
Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23*Q2 23Q3 23

M&A aligned with our long-term	Share Repurchases	*Q1-23 is net of the proceeds of the sale of Forest Products ($71M)
strategy	opportunistically

Free Cash Flow

($M)			106
Value Creation for Sonoco Shareholders	65
	51 99
(18)	(66)	86
(90)

173 175

Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23Q2 23Q3 23

Maintain Strong Investment Grade Rating (Baa2/BBB)

9	Sonoco | www.sonoco.com
NOTE: See investor.sonoco.com for reconciliations of non-GAAP financial measures.

2023 Revised Financial Outlook

$ in Millions (except EPS)	2023 Guidance
Adjusted EBITDA	$1,050	- $1,080
Adjusted EPS	$5.25	- $5.40
Operating Cash Flow	$850	- $900
Free Cash Flow	$600	- $690

Summary

• Increased the low end of EPS range by $0.15, raising the midpoint by ~8 cents. Price / Cost will become more challenged in Q4, with continued focus on productivity, and cost controls in a persistent low volume environment
• Operating Cash Flow midpoint reduced by
  $75 million with greater visibility to year end Net Working Capital projections
• Free Cash Flow midpoint reduced by $25 million due to Operating Cash Flow reduction partially offset by lower Capital Expense spending

Q4-23 Adjusted EPS Guidance Range: $1.01 - $1.16

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Sonoco | www.sonoco.com