Sonoco scaling automation, robotics, digital printing

The company is targeting $65 million in “productivity savings” in 2025 to focus on “the needs of our fewer, bigger businesses,” said CEO Howard Coker.

By the numbers: Q2 2025

Net sales: $1.91B

Up 49.3% year over year (following acquisitions and divestitures) 

Consumer packaging net sales: $1.23B

110.5% YoY increase (driven by sales attributable to Metal Packaging EMEA from the acquisition of Eviosys)

Industrial packaging net sales: $588M

Down 2.2% YoY (attributed to segment volume declines and the 2024 divestiture of two production facilities in China)

Net income: $493M

Compared with $91M in the prior year period

Overview: On a second-quarter earnings call Thursday, Sonoco CEO Howard Coker discussed bright spots for the company, including growth in U.S. metal packaging operations and demand for pet food. The company also noted challenging factors, including declines in Asia, slower consumer demand in Europe, a delayed European vegetable packaging season and limited sardine availability in Africa. Thursday also marked Paul Joachimczyk’s first earnings call as Sonoco’s CFO.

M&A: Sonoco’s Q2 results were influenced by recent divestitures and acquisitions, especially its integration of Eviosys, now known as Sonoco Metal Packaging EMEA. Looking ahead, Coker also said that Sonoco is preparing its ThermoSafe temperature-controlled packaging business for a second-half sale process. Proceeds would be used to reduce its net leverage ratio to 3x to 3.3x by the end of 2026, Coker said.

Optimization and automation: “As a result of our portfolio changes, we’re in the process of further optimizing our operating footprint and reducing support functions to align them with the needs of our fewer, bigger businesses,” Coker said. Together with automation investments, the company is targeting $65 million in “productivity savings” in 2025.

Investments: So far this year, Sonoco has put $188 million toward capital expenditures, with projected spending of $360 million by year’s end. Coker noted Sonoco’s growth investments in adhesives and sealants across three facilities. Sonoco is one of the largest providers of cartridges for these applications “and we are currently sold out,” he said. Additionally, Sonoco is scaling digital printing technology, robotics and other forms of automation. One example is the addition of autonomous forklifts and robotic assemblers at a paper container site in Tennessee, Coker said.

Tariff commentary: “I don’t think there’s many people that like tariffs. We certainly don’t. We’re doing all we can to mitigate those,” Coker said. “But unfortunately, they’re happening, and we have sufficient ways to push those through.” Customers still expect retail volume impacts, Coker said. If there are slowdowns among consumers, “that drives consumers to the center of the store,” which could mean more upside than downside for cans and closures, he said.

Outlook: The company is now in what’s typically the busiest quarter of the year, executives said, noting they remain mindful of macroeconomic risks and uncertainties impacting customers and consumers. Sonoco reaffirmed its previous guidance for adjusted earnings before interest, taxes, depreciation and amortization between $1.3 billion and $1.4 billion. It’s now targeting the low end of previous guidance for adjusted diluted earnings per share, or approximately $6.00.