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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-28 · 607 added, 335 removed, 345 unchanged (73% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis contains forward-looking statements, including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and resources.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is intended to help the reader understand the Company, its operations and its present business environment.

The MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this Form 10-K.

The MD&A contains forward-looking statements, including, without limitation, statements relating to the Company’s plans, strategies, objectives, expectations, intentions and resources.

Such forward-looking statements should be read in conjunction with our disclosures under “Forward-Looking Statements” and under “Item 1A.

Risk Factors” of this Form 10-K.

This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022 .

Discussions of 2022 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 .

Risk Factors” of this Annual Report on Form 10-K.

The Company’s financial statements are prepared in conformity with U.S.

generally accepted accounting principles (“GAAP”).

Sonoco’s management considers a variety of both GAAP and non-GAAP financial and operating measures in assessing the Company’s financial performance.

The key GAAP measures used are net sales, operating profit, gross profit margin, net income attributable to Sonoco and diluted earnings per share.

The key non-GAAP measures used are Adjusted operating profit, Adjusted net income attributable to Sonoco, Adjusted diluted earnings per share, and Adjusted EBITDA.

For information about the Company’s use of non-GAAP measures and reconciliations of these measures to the most directly comparable GAAP measures see “Non-GAAP Financial Measures” below.

Management may also assess year-over-year changes in operating performance in terms of productivity savings or usage, which is driven by procurement savings or losses, production efficiencies or inefficiencies and the effect of fixed cost reduction initiatives.

Management views productivity as a measure of operational excellence of the business and uses it to evaluate improvements in manufacturing efficiency, including automation, and other fixed and variable cost reduction initiatives.

Management provides investors with this information to evaluate Sonoco’s operating results in a manner similar to how management evaluates operating performance.

The Company calculates productivity savings as the difference between applicable current period costs and prior year costs, excluding the impact of estimated inflation or deflation, and volume changes where appropriate.

Discontinued Operations

On December 18, 2024, the Company announced that it had entered into an agreement to sell its Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”) to TOPPAN Holdings Inc.

(“Toppan”) for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments (the “Transaction”).

The Transaction, which reflects the completion of the previously announced strategic review of Sonoco’s Thermoformed and Flexibles Packaging business, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.

In accordance with applicable accounting guidance, the results of TFP are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K.

Further, the Company reclassified the assets and liabilities of TFP as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2024 and 2023.

The Consolidated Statements of Comprehensive Income, Changes in Total Equity, and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.

All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted.

See Note 2 to the Consolidated Financial Statements for additional information.

24 FORM 10-K SONOCO 2024 ANNUAL REPORT

General Overview

Sonoco is a multi-billion dollar global designer, developer, and manufacturer of a variety of highly-engineered and sustainable packaging serving multiple end markets.

As of December 31, 2023, the Company had approximately 310 locations in 33 countries, serving some of the world’s best-known brands in some 85 nations.

Sonoco is a multi-billion dollar global designer, developer, and manufacturer of a variety of highly-engineered and sustainable packaging products serving multiple end markets.

As of December 31, 2024, the Company had approximately 315 locations in 40 countries, serving some of the world’s best-known brands around the globe.

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

Geographically, in 2024, approximately 67% of sales were generated in the United States, 18% in Europe, 6% in Asia, 2% in Canada, and 7% in other regions.

Sonoco competes in multiple product categories, with the majority of the Company’s revenues attributable to products and services sold to consumer and industrial products companies for use in the packaging of their products for sale or shipment.

The Company also manufactures uncoated recycled paperboard for both internal use and open market sale.

Each of the Company’s operating units has its own sales staff and maintains direct sales relationships with its customers.

Sonoco’s goal is to increase its long-term profitability and return capital to shareholders.

Over the past several years, we have simplified our business portfolio around fewer, bigger businesses which has reduced operating complexity and improved agility.

We are focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets.

In parallel, we have worked on commercial, operational, and supply chain excellence programs to shift the mix of our business towards higher-valued products and increase overall productivity, as well as strategic pricing initiatives to better capture input costs and the value of the services we provide.

The Company's primary focus areas in 2023 were to continue to focus on improving returns on promising organic investments and acquisitions to better manage our business mix, improve profits, improve generation of operating cash flow and free cash flow, and operate the business with better efficiency.

Another focus area in 2023 was the Company’s continued commitment to promote accountability and transparency in its sustainability and corporate responsibility programs.

On September 8, 2023, the Company completed the acquisition of the remaining 65% interest in RTS Packaging from joint venture partner WestRock Company (“WestRock”) and the acquisition of a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”) from WestRock.

These acquisitions further strengthened and expanded the Company’s 100% recycled fiber-based packaging solutions to serve consumer wine, spirits, food, beauty and healthcare markets.

On December 1, 2023, the Company completed the acquisition in Brazil of Inapel, significantly expanding the Company’s presence in the flexible packaging services market in Latin America.

Both acquisitions build on the Company's strategy of investing in our core businesses.

Over the past several years, we have simplified our portfolio around fewer, bigger businesses, which has reduced operating complexity and improved agility.

On December 4, 2024, Sonoco completed the acquisition of Titan Holdings I B.V.

(“Eviosys”), Europe’s leading food cans, ends and closures manufacturer, from KPS Capital Partners, LP (“KPS”), for net cash consideration of approximately $3.8 billion.

The transaction advances Sonoco’s portfolio transformation strategy to simplify and realign its portfolio and position the Company for long-term growth and value creation.

The transaction is expected to expand Sonoco’s global leadership in metal food can and aerosol packaging and facilitate Sonoco’s ability to partner with global customers and advance innovation and sustainability in metal packaging offerings.

Following the integration process, Eviosys will transition to the Sonoco brand over the coming months and will operate under Sonoco’s Consumer Packaging segment.

In September 2023, the Company acquired the remaining ownership interest in RTS Packaging, LLC (“RTS Packaging”) from joint venture partner WestRock Company (“WestRock”), to further strengthen and expand the Company’s 100% recycled fiber-based packaging solutions.

See “Acquisitions and Divestitures—Acquisitions” below for more information.

The Company made other changes in its portfolio in 2023 including the sales of its U.S.

and Mexico BulkSak businesses and its S3 business.

The Company also sold approximately 55,000 acres of timberland properties as we now produce paper exclusively from recycled fiber and no longer require natural tree fiber for production.

In January 2024, the Company entered into a definitive agreement to sell its Protective Solutions business, part of the All Other group of businesses, to Black Diamond Capital Management, LLC.

These actions were the result of Sonoco’s continuing evaluation of its business portfolio and were consistent with the Company’s strategic and investment priorities.

23 FORM 10-K SONOCO 2023 ANNUAL REPORT

The Company also continued efforts to improve productivity through focus on operational excellence including the implementation of automation programs and commercial excellence where we are realigning pricing models to value versus legacy cost-based inputs.

Sonoco’s portfolio transformation strategy also includes significant divestitures.

For example, on December 18, 2024, the Company entered into an agreement to sell TFP to Toppan for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments.

The planned sale, which reflects the completion of the previously announced strategic review of Sonoco’s Thermoformed and Flexibles Packaging business, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.

On a standalone basis, TFP had revenue of $1.3 billion in 2024.

In April 2024, Sonoco completed the divestiture of its Protective Solutions business (“Protexic”), which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets.

In 2023, the Company completed the divestitures of its U.S.

and Mexico Bulksak businesses, which consisted of the manufacture and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners, and its Sonoco Sustainability Solutions (“S3”) business, which provided customized waste and recycling management programs.

See “Acquisitions and Divestitures—Divestitures” below for more information.

In addition to the completed and pending divestitures discussed above, the Company has initiated a review of strategic alternatives for ThermoSafe, its leading temperature assured packaging business.

On a standalone basis, ThermoSafe, which is part of the All Other group of businesses, had revenue of $245 million in 2024.

The Company expects to complete its review of strategic alternatives for ThermoSafe in the second half of 2025.

The Company believes that these completed, pending, and potential divestitures will enable greater strategic and operational focus while also generating proceeds to fund deleveraging and capital investments in our remaining industrial paper products, rigid paper containers, and metal packaging businesses.

The Company is focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets.

In parallel, the Company has worked on commercial, operational, and supply chain excellence programs to shift the mix of its business towards higher-valued products and increase overall productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, as well as strategic pricing initiatives intended to better capture input costs and the value of the services provided.

Effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function.

As a result, no recycling net sales are recorded and the margin from the Company’s recycling operations reduced “Cost of sales” in the Company’s Consolidated Statements of Income for the year ended December 31, 2024 as these activities are no longer a part of ongoing major operations.

In 2024, the Company continued to focus on improving returns on both organic investments and acquisitions with a goal of better managing its business mix, improving profits, improving generation of operating cash flow and free cash flow, and operating the business with better efficiency.

Another focus area in 2024 was the Company’s continued commitment to promote accountability and transparency in its sustainability and corporate responsibility programs.

The Company also continued efforts to improve productivity through focus on operational excellence including the implementation of automation programs and commercial excellence where the Company is realigning pricing models to value-based pricing versus legacy cost-based inputs.

The results of these efforts reflected positively in the Company’s 2024 financial results.

As the Company looks to 2024, we expect year-over-year sales to be up modestly and year-over-year price/cost impacts to be negative.

We intend to aggressively manage costs and generate positive productivity while navigating global volume uncertainties.

Actions taken over the past several years have built resiliency into our operating model and are expected to help offset inflation.

At the same time, we have invested capital in our core consumer and industrial businesses to position us well for longer term growth and profitability.

We remain focused on executing strategic initiatives to simplify our portfolio and capture synergies from our recent acquisitions to advance Sonoco through 2024 and beyond.

Use of Non-GAAP Financial Measures

To assess and communicate the financial performance of the Company, Sonoco’s management uses, both internally and externally, certain financial performance measures that are not in conformity with GAAP.

These “non-GAAP” financial measures (referred to as “Adjusted”) reflect adjustments to the net income attributable to the Company (“GAAP results”) to exclude amounts, including the associated tax effects, relating to:

• restructuring/asset impairment charges 1 ;

• acquisition, integration and divestiture-related costs;

• gains or losses from the divestiture of businesses and other assets;

• losses from the early extinguishment of debt;

• non-operating pension costs;

• amortization expense on acquisition intangibles;

• changes in last-in, first-out (“LIFO”) inventory reserves;

• certain income tax events and adjustments;

• derivative gains/losses;

• other non-operating income and losses;

• certain other items, if any.

1 Restructuring and restructuring-related asset impairment charges are a recurring item as the Company’s restructuring programs usually require several years to fully implement, and the Company is continually seeking to take actions that could enhance its efficiency.

Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.

The Company’s management believes the exclusion of the amounts relating to the above-listed items improves the period-to-period comparability and analysis of the underlying financial performance of the business.

Non-GAAP figures previously identified by the term “Base” are now identified using the term “Adjusted,” for example, “Adjusted Operating Profit,” “Adjusted Net Income” (referred to as “Adjusted Earnings”), and Adjusted Diluted Earnings Per Share (referred to as “Adjusted EPS”).

In addition to the “Adjusted” results described above, the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin.

Adjusted EBITDA is defined as net income excluding the following:

interest expense;

interest income;

provision for income taxes;

depreciation, depletion and amortization expense;

non-operating pension costs;

net income attributable to noncontrolling interests;

restructuring/asset impairment charges;

changes in LIFO inventory reserves;

gains/losses from the divestiture of businesses and other assets;

other income;

acquisition, integration and divestiture-related costs;

derivative gains/losses;

and other non-GAAP adjustments, if any, that may arise from time to time.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.

The Company’s non-GAAP financial measures are not calculated in accordance with, nor are they an alternative for, measures conforming to GAAP, and they may be different from non-GAAP financial measures used by other companies.

In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.

The Company presents these non-GAAP financial measures to provide investors with information to evaluate Sonoco’s operating results in a manner similar to how management evaluates business performance.

The Company consistently applies its non-GAAP financial measures presented herein and uses them for internal planning and forecasting purposes, to evaluate its ongoing operations, and to evaluate the ultimate performance of management and each business unit against plans/forecasts.

In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.

Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies.

Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances that the investor may find material and view differently.

To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in evaluating the Company’s results to review both GAAP information, which includes all of the items impacting financial results, and the related non-GAAP financial measures that exclude certain elements, as described above.

Further, Sonoco management does not, nor does it suggest that investors should, consider any non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Whenever reviewing a non-GAAP financial measure, investors are encouraged to review the related reconciliation to understand how it differs from the most directly comparable GAAP measure.

Reconciliations of GAAP to Non-GAAP results are presented under “Reconciliations of GAAP to Non-GAAP Financial Measures” below in conjunction with management’s discussion and analysis of the Company’s results of operations.

Reconciliations are not provided for non-GAAP financial measures related to future years due to the likely occurrence of one or more of the following, the timing and magnitude of which management is unable to reliably forecast:

possible gains or losses on the sale of businesses or other assets;

restructuring costs and restructuring-related asset impairment charges;

acquisition, integration and divestiture-related costs;

and the tax effect of these items and/or other income tax-related events.

These items could have a significant impact on the Company's future GAAP financial results.

As the Company looks to 2025, it is focused on successfully integrating Eviosys into Sonoco and achieving synergy targets, completing the divestiture of TFP, and pursuing strategic alternatives for our ThermoSafe business.

The Company anticipates using proceeds from divestitures, along with cash from operations, to reduce outstanding debt.

The Company plans to continue to invest capital to further grow its Consumer Packaging and Industrial Paper Packaging segments while maintaining its focus on profitability through productivity improvements.

By transforming into a simpler, stronger and more sustainable company, the Company believes it is positioned to grow through 2025 and beyond.

25 FORM 10-K SONOCO 2024 ANNUAL REPORT

Acquisitions and Divestitures

As described above, on December 4, 2024, the Company completed the acquisition of all issued and outstanding equity interests in Eviosys from an affiliate of KPS for net cash consideration of approximately $3.8 billion.

Eviosys, a global supplier of metal packaging that produces food cans and ends, aerosol cans, metal closures and promotional packaging with a large metal food can manufacturing footprint in the Europe, Middle East, and Africa region, has approximately 6,500 employees in 44 manufacturing facilities across 17 countries.

The Company funded the Eviosys acquisition, including related fees and expenses, with the net proceeds from the registered public offering of senior unsecured notes, borrowings from two term loan facilities, and cash on hand.

See Note 11 to the Consolidated Financial Statements for more information.

The financial results of Eviosys are included in the Company’s Consumer Packaging segment.

On June 1, 2024, the Company completed the purchase of a small tube and paper cone manufacturer in Brazil for $2.7 million.

The financial results of this business are included in the Company’s Industrial Paper Packaging segment.

The Company completed two acquisitions during 2023 at a net cash cost of approximately $372.6 million.

On December 1, 2023, the Company completed the acquisition of Inapel, a manufacturer of single-layer and multilayer materials for flexible packaging in Brazil for a net cash purchase price of $59.2 million, subject to customary working capital adjustments.

With the acquisition of Inapel, the Company added approximately 500 employees and two manufacturing locations in the Sao Paulo region of Brazil.

The acquisition significantly expanded the Company’s presence in the flexible packaging services market in Latin America.

On September 8, 2023, the Company completed the acquisition of the remaining 65% interest in RTS Packaging from joint venture partner WestRock, and the acquisition of the Chattanooga Mill from WestRock for net cash consideration of $313.4 million, subject to a final working capital adjustment of $0.5 million that was paid to WestRock in January 2024.

On December 1, 2023, the Company completed the acquisition of Inapel Embalagens Ltda.

(“Inapel”), a manufacturer of single-layer and multilayer materials for flexible packaging in Brazil for a net cash payment at clos ing of $59.2 million with additional purchase consideration of $2.3 million and a final working capital settlement of $0.5 million paid to the seller in 2024.

As Inapel is one of the operations included in the pending sale of TFP, the acquired assets and liabilities are reflected as assets and liabilities of discontinued operations in the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023.

On September 8, 2023, the Company completed the acquisition of the remaining 65% ownership interest in RTS Packaging from joint venture partner WestRock, and the acquisition of a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”) from WestRock for net cash conside ration of $313.4 million, subject to a final w orking capital adjustment of $0.5 million that was paid to WestRock in January 202 4.

Prior to completing the acquisitions, the Company held a 35% ownership interest in the RTS Packaging joint venture, which was formed in 1997, and combined the former protective packaging operations of WestRock and Sonoco to market recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals.

With the acquisition of the remaining interest in RTS Packaging and the acquisition of the Chattanooga Mill, the Company added approximately 1,100 employees, fourteen converting operations, including ten in the United States, two in Mexico, two in South America, and one paper mill in the United States.

On January 30, 2024, the Company entered into a definitive agreement to sell its Protective Solutions business, part of the All Other group of businesses, to Black Diamond Capital Management, LLC for an estimated $80.0 million in cash.

The transaction is expected to be completed in the first half of 2024, subject to the satisfaction or waiver of customary closing conditions.

This business provides foam components and integrated material solutions for various industrial end markets.

The business operates nine manufacturing facilities and has approximately 900 employees.

This sale is the result of Sonoco’s continuing evaluation of its business portfolio and is consistent with the Company’s strategic and investment priorities.

As described above, on December 18, 2024, the Company announced that it had entered into an agreement to sell TFP to Toppan for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments.

The sale is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.

See Notes 1 and 2 to the Consolidated Financial Statements for additional information.

In November 2024, the Company completed the sale of two production facilities in China, both of which were part of the Company’s Industrial Paper Packaging segment, for $0.3 million.

As a result of the sale, the Company reclassified $0.6 million of cumulative translation losses from Accumulated Other Comprehensive Loss and recognized a loss of $25.6 million, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On April 1, 2024, the Company completed the sale of Protexic, part of the All Other group of businesses, to Black Diamond Capital Management, LLC.

This business provided foam components and integrated material solutions for various industrial end markets.

This sale was the result of the Company’s continuing evaluation of its business portfolio and is consistent with the Company’s strategic and investment priorities.

The cash selling price, as adjusted for the final working capital settlement, was $78.5 million.

As a result of the Protexic divestiture, the Company recognized a pretax gain of $0.9 million included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

The Company used the majority of the cash proceeds from the sale to pay down debt.

On July 1, 2023, the Company completed the sale of its U.S.

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As a result of the U.S.

BulkSak divestiture, the Company recognized a pretax gain of $6.8 million included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

BulkSak divestiture, the Company recognized a pretax gain of $6.8 million included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

Also on July 1, 2023, the Company agreed to the sale of its Mexico BulkSak business.

The sale closed in December 2023 for a cash selling price, as adjusted for working capital, of $1.1 million.

As a result of the Mexico BulkSak sale, the Company recognized a pretax gain of $0.1 million which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

As a result of the Mexico BulkSak sale, the Company recognized a pretax gain of $0.1 million which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On January 26, 2023, the Company completed the sale of its S3 business, a provider of customized waste and recycling management programs and part of the Company’s Industrial Paper Packaging segment, to Northstar Recycling Co.

(“Northstar”), for total cash proceeds of $13.8 million.

An additional $1.5 million of proceeds are being held in escrow and will be released to the Company twenty months following the date of the divestiture, pursuant to any indemnification claims.

The Company recognized a pretax gain of $11.1 million during the first quarter of 2023, which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income and is entitled to receive additional proceeds of $3.2 million in the second quarter of 2024 if certain conditions are met.

This contingent consideration will be recognized as an additional gain on the sale at the point the contingencies are resolved.

An additional $1.5 million of proceeds were released to the Company from escrow in September 2024.

The Company recognized a pretax gain of $11.1 million during the first quarter of 2023.

In the second quarter of 2024, upon resolution of certain contingencies, the Company received cash proceeds and recognized an additional pre tax gain of $1.3 million on the sale.

These gains are included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income for their respective periods.

On January 26, 2023, in connection with the sale of the S3 business, the Company acquired a 2.7% equity interest in Northstar valued at $5.0 million.

This investment is being accounted for under the measurement alternative (i.e., cost less impairment, adjusted for any qualifying observable price changes).

This investment, which had been accounted for under the measurement alternative, was sold in December 2024 for a cash selling price of $8.6 million.

The resulting gain of $3.6 million is included in “Other (expenses)/income, net” in the Compan y’s Consolidated Statements of Income.

26 FORM 10-K SONOCO 2024 ANNUAL REPORT

Sale of Assets

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Accordingly, on March 29, 2023, the Company sold its timberland properties, consisting of approximately 55 acres, to Manulife Investment Management for net cash proceeds of $70.8 million.

The Company disposed of assets with a net book value of $9.9 million as part of the sale, and recognized a pretax gain from the sale of these assets of $60.9 million during the year ended December 31, 2023, which is included in “Gain/(Loss) on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

The Company disposed of assets with a net book value of $9.9 million as part of the sale, and recognized a pretax gain from the sale of these assets of $60.9 million during the year ended December 31, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

Additional Ownership Investment

During the second quarter of 2024, the Company increased its ownership investment in a small South Carolina-based designer and manufacturer of sustainable protective packaging solutions from 20.5% to 39.9%.

The Company acquired its initial ownership interest in June 2022.

The preferred stock investment increased by $18.5 million during the second quarter of 2024, which included a $10.0 million cash payment, a $5.4 million remeasurement of the fair value of the existing investment, and a $2.5 million conversion of the carrying value of the outstanding convertible notes into a preferred series stock investment, which yielded a $0.5 million fair value increase and a $0.1 million increase for interest income earned.

The outstanding investment of $21.2 million as of December 31, 2024 is included within “Other assets” in the Company’s Consolidated Balance Sheet.

The remeasurement of the carrying value of the existing investment to fair value during the second quarter of 2024 resulted in a gain of $5.9 million and interest income of $0.1 million , which are included in “Other (expenses)/income, net” and “Interest income,” respectively, in the Company’s Consolidated Statements of Income.

The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to be suboptimal or nonstrategic.

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Due to its geographic footprint (approximately 315 locations in 40 countries as of December 31, 2024) and the cost-competitive nature of its businesses, the Company frequently seeks more cost-effective means and structures to serve its customers, to improve profitability, and to respond to fundamental changes in its markets.

As such, restructuring costs have been and are expected to be a recurring component of the Company’s operating costs.

As such, plant closures in connection with footprint rationalization and headcount reductions are an important component of the Company’s cost control initiatives.

The amount of these costs can vary significantly from year to year depending upon the scope and location of the restructuring activities.

25 FORM 10-K SONOCO 2023 ANNUAL REPORT

The following table summarizes the impact of restructuring and asset impairment charges for each of the years presented:

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Restructuring/Asset impairment charges $ 65,370 $ 47,909

During 2024, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts, including the relocation of certain facilities.

The largest of these plant closures were the closures of the Company’s paper mills in Sumner, Washington (the “Sumner Mill”) and Kilkis, Greec e (the “Kilkis Mill”) , both of which were part of the Industrial Paper Packaging segment.

Restructuring charges were also incurred during the year for costs related to plant closures, including equipment removal, utilities, plant security, property taxes, insurance, and environmental remediation costs related to the closure of the Sumner Mill, and ongoing facility carrying costs of previously announced plant closures.

Asset impairment charges were recognized in the Industrial Paper Packaging segment related to the closures of the Sumner Mill and the Kilkis Mill and in the Consumer Packaging segment as a result of exiting a small metal canning lid business.

During 2023, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts.

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Asset impairment charges were recognized in the Industrial Paper Packaging and Consumer Packaging segments as the result of plant closures.

During 2022, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts.

Restructuring charges were also incurred during the year for consulting services and costs related to plant closures, including equipment removal, utilities, plant security, property taxes, and insurance at closed facilities.

Asset impairment charges were recognized in the Industrial Paper Packaging and Consumer Packaging segments as the result of plant closures.

The Company recognized other asset impairment charges in 2022 totaling $10.1 million, primarily as a result of completing the exit of its operations in Russia during the second quarter of 2022.

These operations consisted of two small tube and core plants and were part of the Industrial Paper Packaging segment.

The Company expects to recognize future additional costs totaling approximatel y $3.0 million in connection with previously announced restructuring actions that were underway as of December 31, 2024 .

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See Note 5 to the Consolidated Financial Statements for further information about restructuring activities and asset impairment charges.

27 FORM 10-K SONOCO 2024 ANNUAL REPORT

Results of Operations – 2024 Versus 2023

Consolidated net sales from continuing operations for 2024 were $5.3 billion, a $0.1 billion, or 2.5%, decrease from 2023.

The Protexic divestiture in April 2024 resulted in lower year-over-year sales of $132.0 million, accounting for the Company’s recycling operations as a procurement function effective January 1, 2024 resulted in lower year-over-year sales of $100.0 million, lower selling prices across the Consumer Packaging and Industrial Paper Packaging segments resulted in a $94.2 million decline, and unfavorable volumes in the All Other group of businesses lowered year-over-year sales by $46.3 million.

These decreases were partially offset by a year-over-year increase in sales of $266.2 million from the acquisitions of Eviosys, RTS and the Chattanooga Mill.

GAAP operating profit for the year ended December 31, 2024 was $326.6 million, a decrease of 44.6% from the $589.0 million for the year ended December 31, 2023.

The decrease in GAAP operating profit was primarily due to a $63.3 million decrease in gross profit, a $25.6 million loss in the current period from the sale of two production facilities in China, the absence of a net $78.9 million benefit from the sale of the Company’s timberland properties and the divestitures of the S3 and U.S.

BulkSak businesses in 2023, and $67.0 million in additional acquisition, integration and divestiture-related costs for the year ended December 31, 2024.

Adjusted operating profit for the year ended December 31, 2024 was $573.1 million, a decrease of 11.4% from the $646.6 million reported for the year ended December 31, 2023.

GAAP net income attributable to Sonoco was $163.9 million ($1.65 per diluted share) in 2024, compared with $475.0 million ($4.80 per diluted share) in 2023.

GAAP net income attributable to Sonoco was lower in 2024 compared to 2023 primarily due to the decrease in GAAP operating profit as described above, a $113.7 million remeasurement loss on Euro denominated cash held by the Company to close the Eviosys acquisition, and the absence of a $44.0 million gain in 2023 from the step-up to fair value of the Company’s 35% ownership interest in RTS Packaging upon acquiring the remaining 65% ownership interest.

These decreases were partially offset by a $114.2 million reduction in income tax expense as discussed further below.

Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share were $485.8 million ($4.89 per diluted share) in 2024, compared with $519.9 million ($5.26 per diluted share) in 2023.

Costs and Expenses/Margins

Cost of sales decreased $72.7 million in 2024, or 1.7%, from the prior year.

The decrease was primarily related to the sale of Protexic and improved productivity from procurement savings, production efficiencies and fixed cost reduction initiatives, and materials price reductions, partially offset by cost of sales related to the 2023 and 2024 acquisitions.

Gross profit margins decreased to 21.5% in 2024 from 22.1% in the prior year due to pricing, depreciation and other various items as discussed above.

Selling, general and administrative expenses (“SG&A”) increased $79.3 million, or 12.3%, and were 13.6% of sales in 2024 compared to 11.8% of sales in 2023.

The current year increase was primarily related to an increase in acquisition, integration, and divestiture-related costs.

Restructuring and asset impairment charges totaled $65.4 million in 2024, compared with $47.9 million in 2023.

The 2024 charges reflect severance costs related to the Company’s ongoing organizational effectiveness efforts, the relocation costs of certain facilities in Greece and Germany, and closure costs related to the Sumner Mill and the Kilkis Mill, two small industrial converted products facilities in China, and the exit of a small metal canning lid business within Sonoco Metal Packaging (“Metal Packaging”) .

The 2023 charges reflect costs related to the closure of several operations, including a paper mill in Kansas and a metal packaging facility and severance costs related to the closures of several smaller operations.

Additional information regarding restructuring actions and asset impairments is provided in Note 5 to the Company’s Consolidated Financial Statements.

(Loss)/Gain on divestiture of business and other assets reflected a loss of $23.5 million in 2024, compared to a gain of $78.9 million in 2023.

The loss reported in 2024 primarily related to the loss on the sale of two production facilities in China.

The gain recorded in 2023 primarily related to the sale of the Company’s timberland properties and the divestitures of the S3 and U.S.

BulkSak businesses.

Other (expenses)/income, net reflected expense of $104.2 million in 2024, compared with income of $39.7 million in 2023.

Other expenses, net reported in 2024 included a loss of $113.7 million from the remeasurement of euro-denominated cash balances held in connection with the Eviosys acquisition, partially offset by a gain of $5.9 million from the remeasurement of an equity investment to fair value and a gain of $3.6 million from the sale of the Company’s equity interest in Northstar.

Other income, net reported in 2023 included a gain of $44.0 million from the remeasurement of the Company’s previously held equity interest in RTS Packaging to fair value, partially offset by a loss of $7.1 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition.

See Note 4 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $13.8 million in 2024, compared with $14.3 million in 2023.

The year-over-year decrease of $0.5 million was primarily due to lower interest costs on the Company’s defined benefit pension liabilities, resulting from lower year-over-year discount rates.

See Note 15 to the Consolidated Financial Statements for further information on employee benefit plans.

Net interest expense totaled $145.1 million for the year ended December 31, 2024, compared with $125.4 million in 2023.

The increase was primarily due to higher interest from financing transactions relating to the Eviosys acquisition.

Additional information regarding the Company’s indebtedness is provided in Note 11 to the Company’s Consolidated Financial Statements.

The effective tax rates on GAAP and Adjusted net income attributable to Sonoco for the full year 2024 were 8.7% and 24.3%, respectively, compared with 24.5% and 24.9%, respectively for the full year 2023.

The decrease in the GAAP effective tax rate for 2024 was due primarily to the release of a reserve for uncertain tax positions following the expiration of the applicable statute of limitations, as well as deferred tax adjustments associated with the post-acquisition entity restructuring of the partitions business.

The decrease in the effective tax rate on Adjusted net income attributable to Sonoco was primarily due to a variance in tax rates between jurisdictions in which the respective income and charges were taxed.

Discontinued Operations

Net income from discontinued operations totaled $96.4 million for the year ended December 31, 2024, compared with $96.3 million for the year ended December 31, 2023.

The increase in interest expense related to debt required to be repaid upon closure of the TFP transaction were offset by tax benefits due to the recording of a deferred tax asset on the outside basis of certain held-for-sale entities.

28 FORM 10-K SONOCO 2024 ANNUAL REPORT

Reportable Segments

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

In accordance with applicable accounting guidance, the results of TFP, previously part of the Consumer Packaging segment, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K.

All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted.

As of and for the year ended December 31, 2024, there were no changes to the manner in which the Company reviewed financial information at the segment level;

therefore, these changes had no impact on the Company’s segment reporting structure.

Total operating profit, reported as “Operating Profit” in the Company’s Consolidated Statements of Income, is comprised of the following:

($ in millions) 2024 2023 % Change

Operating profit:

Consumer Packaging $ 294.8 $ 285.8 3.1 %

Industrial Paper Packaging 271.7 317.9 (14.5) %

Segment operating profit

566.5 603.7 (6.2) %

All Other 53.3 85.1 (37.4) %

Restructuring/Asset impairment charges (65.4) (47.9) 36.5 %

Amortization of acquisition intangibles (78.6) (67.3) 16.8 %

(Loss)/Gain on divestiture of business and other assets

(23.5) 78.9 (129.8) %

Acquisition, integration and divestiture-related costs

(91.6) (24.6) 272.4 %

Other corporate costs

(46.7) (42.3) 10.4 %

Other operating income, net

12.5 3.4 267.6 %

Total operating profit*

$ 326.6 $ 589.1 (44.6) %

*Due to rounding, amounts above may not sum to the totals presented

Segment results, which are reviewed by Company management to evaluate segment performance, do not include:

restructuring/asset impairment charges;

amortization of acquired intangibles;

acquisition, integration, and divestiture-related costs;

changes in last in, first out (“LIFO”) inventory reserves;

gains/losses from the sale of businesses or other assets;

gains/losses on derivatives;

or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business.

Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items.

All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations.

See Note 20 to the Company’s Consolidated Financial Statements for more information on reportable segments.

Consumer Packaging

($ in millions) 2024 2023 % Change

$ 2,531.9 $ 2,471.0 2.5 %

Segment operating profit 294.8 285.8 3.1 %

Depreciation, depletion and amortization 109.4 95.3 14.8 %

Cost of Sales

2,041.1 1,999.5 2.1 %

Consumer Packaging segment net sales increased year over year primarily due to sales of $115.0 million related to the December 4, 2024 acquisition of Eviosys, partially offset by a $59.0 million unfavorable impact from lower selling prices due to ongoing pricing pressures.

Segment operating profits increased year over year as a result of strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives totaling $48.1 million, which were only partially offset by price/cost headwinds of $17.5 million and higher employee compensation costs.

Year-over-year volumes remained fairly flat.

Cost of sales increased year over year due to increased volumes from the Eviosys acquisition, partially offset by the decline in prices and strong productivity from procurement savings and production efficiencies.

Industrial Paper Packaging

($ in millions) 2024 2023 % Change

$ 2,349.5 $ 2,374.1 (1.0) %

Segment operating profit 271.7 317.9 (14.5) %

Depreciation, depletion and amortization 116.1 104.7 10.9 %

Cost of Sales

1,818.3 1,809.8 0.5 %

Industrial Paper Packaging segment net sales decreased year over year due to lower sales of $100.0 million related to the treatment of recycling as a procurement function effective January 1, 2024, lower sales prices of $35.3 million, and an unfavorable impact from foreign currency exchange of $24.1 million from the strengthening of the U.S.

These declines were partially offset by a net increase of $123.8 million related to the September 2023 acquisitions of the Chattanooga Mill and the remaining ownership interest in RTS Packaging, the divestiture of the Bulksak business, and the closure of certain facilities in Greece.

An increase in volume of $18.1 million further offset the year-over-year decrease.

Segment operating profit decreased year over year as continued price/cost pressures negatively impacted operating profit by $137.6 million, partially offset by strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives totaling $85.4 million .

29 FORM 10-K SONOCO 2024 ANNUAL REPORT

Cost of sales increased year over year as a result of the acquisition of the Chattanooga Mill and the remaining ownership interest in RTS Packaging, partially offset by price/cost declines and the treatment of recycling as a procurement function effective January 1, 2024.

($ in millions) 2024 2023 % Change

$ 424.0 $ 596.3 (28.9) %

Segment operating profit 53.3 85.1 (37.4) %

Depreciation, depletion and amortization 12.0 14.6 (17.8) %

All Other net sales decreased year over year, reflecting the April 2024 divestiture of Protexic and lower volumes from the remaining businesses.

All Other operating profit decreased year over year, reflecting lower volumes and prices in temperature assured packaging and lower sales due to the April 2024 divestiture of Protexic.

Results of Operations – 2023 Versus 2022

Consolidated net sales from continuing operations for 2023 were $5.4 billion, a $0.4 billion, or 7.1%, decrease from 2022.

The lower year-over-year sales were driven by lower volumes of $505.8 million across the portfolio .

This impact was partially offset by an increase in sales of $78.9 million due to the full year impact in 2023 of the January 2022 acquisition of Metal Packaging.

GAAP operating profit for the year ended December 31, 2023 was $589.0 million, an increase of 4.6% from $563.4 million for the year ended December 31, 2022.

Operating profit increased primarily as a result of the $78.9 million benefit from the sale of the Company’s timberland properties and the divestitures of the S3 and U.S.

BulkSak businesses in 2023, lower restructuring and asset impairment costs of $4.5 million, and lower acquisition and integration costs for the year ended December 31, 2023.

These increases were partially offset by a decrease in gross profit of $22.7 million and increases in other SG&A expenses related to higher compensation, benefits, group medical, and information technology costs resulting from inflation and the impact of acquisitions.

Adjusted operating profit for the year ended December 31, 2023 was $646.6 million, a decrease of 17.4% from the $783.0 million reported for the year ended December 31, 2022.

GAAP net income attributable to Sonoco was $475.0 million ( $4.80 per diluted share) in 2023, compared with $466.4 million ($4.72 per diluted share) in 2022.

These GAAP results reflect net after-tax, adjusted charges totaling $44.9 million and $173.1 million in 2023 and 2022, respectively.

These adjustments are presented in the “Reconciliations of GAAP to Non-GAAP Financial Measures” tables.

Adjusted for these items, Adjusted net income attributable to Sonoco was $519.9 million ($5.26 per diluted share) in 2023, compared with $639.5 million ($6.48 per diluted share) in 2022.

The GAAP results were slightly higher in 2023 as a result of the full year impact of the acquisition of Metal Packaging, the acquisition of the remaining interest in RTS Packaging, and the acquisition of the Chattanooga Mill, gains from divestitures and sale of assets, and lower acquisition, integration and divestiture-related costs.

These favorable factors were partially offset by lower volumes across the portfolio and unfavorable metal price overlap.

Adjusted net income attributable to Sonoco declined in 2023 as a result of lower volumes across the portfolio, inflationary pricing pressure within retail in the Consumer Packaging segment, and unfavorable index-related pricing in the Industrial Paper Packaging segment.

Costs and Expenses/Margins

Cost of sales decreased $0.4 billion in 2023, or 8.5%, from the prior year.

The decrease was attributable to the lower sales volume, which was partially offset by lower input costs, primarily for steel and old corrugated cardboard.

Gross profit margins increased to 22.1% in 2023 from 20.9% in the prior year primarily due to the previously mentioned lower input costs.

SG&A increased $35.0 million, or 5.7%, and were 11.8% of sales in 2023 compared to 10.4% of sales in 2022.

The current year increase was related to higher compensation, benefits, group medical, and information technology costs resulting from inflation and the impact of acquisitions.

These increases were partially offset by lower year-over-year acquisition, integration, and divestiture-related costs.

These costs were higher in the prior year due to the January 2022 acquisition of Metal Packaging.

Restructuring and asset impairment charges totaled $47.9 million in 2023 compared with $52.4 million in 2022.

The 2023 charges reflect costs related to the closure of several operations, including a paper mill in Kansas and a metal packaging facility and severance related to the closures of several smaller operations.

The 2022 charges include severance and other plant closure costs as well as a $9.2 million impairment charge resulting from the Company’s exit from its Russian operations.

Additional information regarding restructuring actions and asset impairments is provided in Note 5 to the Consolidated Financial Statements.

Gain on divestiture of business and other assets reflected gains totaling $78.9 million in 2023 related to the sale of the Company’s timberland properties and the divestitures of the S3 and U.S.

BulkSak businesses.

Other (expense)/income, net was $39.7 million in 2023, reflecting a gain of $44.0 million resulting from the remeasurement of the Company’s previously held equity interest in RTS Packaging to fair value, partially offset by a loss of $4.3 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition.

See Note 4 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $14.3 million in 2023, compared with $7.1 million in 2022.

The year-over-year increase of $7.2 million was primarily due to higher interest costs on the Company’s defined benefit pension liabilities, resulting from higher year-over-year discount rates.

See Note 15 to the Consolidated Financial Statements for further information on employee benefit plans.

Net interest expense totaled $125.4 million for the year ended December 31, 2023, compared with $96.3 million in 2022.

The increase was primarily due to higher year-over-year average debt balances resulting from the term loans executed in December 2022 and August 2023 and the impact of higher interest rates on the Company’s variable debt.

Additional information regarding the Company’s indebtedness is provided in Note 11 to the Consolidated Financial Statements.

The effective tax rates on GAAP and Adjusted net income attributable to Sonoco for the full year 2023 were 24.5% and 24.9% , respectively, compared with 20.8% and 24.5%, respectively, for the full year 2022.

The increase in the GAAP effective tax rate for 2023 was due primarily to the absence in 2023 of a release of a valuation allowance on foreign tax credits.

The increase in the effective tax rate on Adjusted net income attributable to Sonoco was primarily due to a variance in tax rates between jurisdictions in which the respective income and charges were taxed.

30 FORM 10-K SONOCO 2024 ANNUAL REPORT

Discontinued Operations

Net income from discontinued operations totaled $96.3 million for the year ended December 31, 2023, compared with $88.6 million for the year ended December 31, 2022.

The increase was primarily due to improved productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, partially offset by unfavorable volume/mix and increased restructuring charges.

Reportable Segments

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted.

See Note 2 to the Consolidated Financial Statements for more information.

As of and for the year ended December 31, 2023, there were no changes to the manner in which the Company reviewed financial information at the segment level;

therefore, these changes had no impact on the Company’s segment reporting structure.

Total operating profit, reported as “Operating Profit” in the Company’s Consolidated Statements of Income, is comprised of the following:

($ in millions) 2023 2022 % Change

Operating profit:

Consumer Packaging $ 285.8 $ 442.2 (35.4) %

Industrial Paper Packaging 317.9 327.9 (3.0) %

Segment operating profit

603.7 770.1 (21.6) %

All Other 85.1 58.2 46.2 %

Restructuring/Asset impairment charges (47.9) (52.4) (8.6) %

Amortization of acquisition intangibles (67.3) (60.3) 11.6 %

Gain on divestiture of business and other assets

Acquisition, integration and divestiture-related costs

(24.6) (70.2) (65.0) %

Other corporate costs

(42.3) (45.2) (6.4) %

Other operating income, net

3.4 (36.8) (109.2) %

Total operating profit*

$ 589.1 $ 563.4 4.6 %

*Due to rounding, amounts above may not sum to the totals presented

Segment results, which are reviewed by Company management to evaluate segment performance, do not include:

restructuring/asset impairment charges;

amortization of acquired intangibles;

acquisition, integration, and divestiture-related costs;

changes in LIFO inventory reserves;

gains/losses from the sale of businesses or other assets;

gains/losses on derivatives;

or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business.

Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items.

All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations.

See Note 20 to the Consolidated Financial Statements for more information on reportable segments.

Consumer Packaging

($ in millions) 2023 2022 % Change

$ 2,471.0 $ 2,564.0 (3.6) %

Segment operating profit 285.8 442.2 (35.4) %

Depreciation, depletion and amortization 95.3 84.0 13.5 %

Cost of Sales

1,999.5 1,981.6 0.9 %

Consumer Packaging segment net sales decreased year over year primarily as a result of a $208.2 million decline in volume from customer retail destocking throughout the year, partially offset by a $78.9 million increase in sales related to the inclusion of a full year of operations of the January 2022 Metal Packaging acquisition as well as a $29.5 million favorable impact related to pricing.

Segment operating profits decreased by $156.4 million year over year and operating profit margins decreased to 11.6% from 17.2%.

The decreases in operating profit and operating margins were primarily due to a $84.7 million decline from price/cost pressures and the unfavorable impact of metal price overlap, a $58.5 million decline from unfavorable sales volume/mix, and increased employee compensation and group medical costs.

These unfavorable impacts were partially offset by $25.9 million in improved productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

Cost of sales increased year over year due to increased pricing as a result of inflationary pricing pressures, partially offset by volume declines and strong productivity from procurement savings and production efficiencies.

31 FORM 10-K SONOCO 2024 ANNUAL REPORT

Industrial Paper Packaging

($ in millions) 2023 2022 % Change

$ 2,374.1 $ 2,684.6 (11.6) %

Segment operating profit 317.9 327.9 (3.0) %

Depreciation, depletion and amortization 104.7 91.9 13.9 %

Cost of Sales

1,809.8 2,109.1 (14.2) %

Industrial Paper Packaging segment net sales decreased year over year primarily as a result of unfavorable volume of $256.6 million and index-related pricing declines of $64.9 million.

Segment operating profit decreased year over year, driven by unfavorable volume of $73.4 million.

This unfavorable impact was partially offset by $25.6 million favorable impact from price/cost and $18.8 million from productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

Cost of sales decreased year over year due to volume declines, partially offset by strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

($ in millions) 2023 2022 % Change

$ 596.3 $ 620.3 (3.9) %

Segment operating profit 85.1 58.2 46.2 %

Depreciation, depletion and amortization 14.6 14.3 2.1 %

All Other net sales decreased year over year due to lower volumes, primarily in temperature assured packaging as COVID-related demand declined.

All Other operating profit increased year over year, driven by ongoing structural improvement programs to improve profitability across this diversified collection of businesses, favorable strategic pricing initiatives and strong productivity from procurement savings, production efficiencies and fixed cost reduction initiatives.

These favorable factors were partially offset by the impact of the lower volumes.

Non-GAAP Financial Measures

The Company uses certain financial performance measures, both internally and externally, that are not in conformity with GAAP (referred to as “non-GAAP financial measures”) to assess and communicate the financial performance of the Company.

These non-GAAP financial measures, which are identified using the term “Adjusted” (for example, “Adjusted Operating Profit,” “Adjusted Net Income Attributable to Sonoco,” and “Adjusted Diluted EPS”), reflect adjustments to the Company’s GAAP operating results to exclude amounts, including the associated tax effects, relating to:

• restructuring/asset impairment charges 1 ;

• acquisition, integration and divestiture-related costs;

• gains or losses from the divestiture of businesses and other assets;

• losses from the early extinguishment of debt;

• non-operating pension costs;

• amortization expense on acquisition intangibles;

• changes in LIFO inventory reserves;

• certain income tax events and adjustments;

• derivative gains/losses;

• other non-operating income and losses;

• certain other items, if any.

Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.

The Company’s management believes the exclusion of these amounts improves the period-to-period comparability and analysis of the underlying financial performance of the business.

In addition to the “Adjusted” results described above, the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin.

Adjusted EBITDA is defined as net income excluding the following:

interest expense;

interest income;

provision for income taxes;

depreciation, depletion and amortization expense;

non-operating pension costs;

net income/loss attributable to noncontrolling interests;

restructuring/asset impairment charges;

changes in LIFO inventory reserves;

gains/losses from the divestiture of businesses and other assets;

acquisition, integration and divestiture-related costs;

other income;

derivative gains/losses;

and other non-GAAP adjustments, if any, that may arise from time to time.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.

In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.

In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.

32 FORM 10-K SONOCO 2024 ANNUAL REPORT

Whenever reviewing a non-GAAP financial measure, investors are encouraged to review the related reconciliation to understand how it differs from the most directly comparable GAAP measure.

Reconciliations of GAAP to non-GAAP results are presented under “Reconciliations of GAAP to Non-GAAP Financial Measures” below in

conjunction with MD&A of the Company’s results of operations.

Reconciliations are not provided for non-GAAP financial measures related to

future years due to the likely occurrence of one or more of the following, the timing and magnitude of which management is unable to reliably

possible gains or losses on the sale of businesses or other assets;

restructuring costs and restructuring-related asset impairment

acquisition, integration and divestiture-related costs;

and the tax effect of these items and/or other income tax-related events.

items could have a significant impact on the Company’s future GAAP financial results.

Reconciliations of GAAP to Non-GAAP Financial Measures

The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures for each of the years presented in conjunction with management's analysis of the Company’s results of operations:

Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Earnings Attributable to Sonoco, and Adjusted EPS

The following tables reconcile the Company’s non-GAAP financial measures to their most directly comparable GAAP financial measures for each of the years presented:

Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Net Income Attributable to Sonoco, and Adjusted Diluted EPS

For the year ended December 31, 2024

2 unchanged sentences

As Reported (GAAP) 1

$ 326,578 $ 63,486 $ 5,509 $ 163,949 $ 1.65

Acquisition, integration and divestiture-related costs 2

91,600 125,169 24,281 115,602 1.16

Changes in LIFO inventory reserves (6,263) (6,263) (1,570) (4,693) (0.05)

1 unchanged sentence

Restructuring/Asset impairment charges 65,370 65,370 13,384 55,181 0.56

Loss on divestiture of business and other assets 23,452 23,452 1,499 21,953 0.22

Other expenses, net 3

— 104,200 27,670 76,530 0.77

Non-operating pension costs — 13,842 3,412 10,430 0.11

Net gain from derivatives

(7,225) (7,225) (1,811) (5,414) (0.05)

Other adjustments 4

982 982 20,566 (23,349) (0.24)

Total adjustments 246,511 398,122 106,601 321,854 3.24

Adjusted $ 573,089 $ 461,608 $ 112,110 $ 485,803 $ 4.89

Due to rounding, individual items may not sum appropriately.

1 Operating profit, income before income taxes, and provision for income taxes exclude results related to discontinued operations of $128,037, $116,309, and $19,934, respectively.

2 Acquisition, integration and divestiture related costs include losses on treasury lock derivative instruments, amortization of financing fees and pre-acquisition net interest exp enses totaling $33,569 r elated to debt instruments associated with the financing of the Eviosys acquisition.

These costs are included in “Interest expense” in the Company’s Consolidated Statements of Income.

3 Other expenses, net primarily relates to remeasurement loss on Euro denominated cash held by the Company to close the Eviosys acquisition.

4 Other adjustments include discrete tax items primarily related to a $12,638 adjustment to deferred taxes from a post-acquisition restructuring of the partitions business, a $9,864 reduction in reserves for uncertain tax positions following the expiration of the applicable statute of limitations and a $5,796 tax benefit due to the recording of a deferred tax asset on the outside basis of certain held-for-sale entities, partially offset by an adjustment for hurricane-related insurance deductible losses.

33 FORM 10-K SONOCO 2024 ANNUAL REPORT

For the year ended December 31, 2023

Dollars in thousands, except per share data

Operating Profit Income Before Income Taxes

Provision for Income Taxes Net Income Attributable to Sonoco

As Reported (GAAP) 1

$ 589,049 $ 489,027 $ 119,730 $ 474,959 $ 4.80

Acquisition, integration and divestiture-related costs 24,624 24,624 5,736 19,847 0.20

Changes in LIFO inventory reserves (11,817) (11,817) (2,977) (8,840) (0.09)

Amortization of acquisition intangibles 67,323 67,323 16,787 65,741 0.66

Restructuring/Asset impairment charges 47,909 47,909 10,808 44,036 0.44

Gain on divestiture of business and other assets (78,929) (78,929) (19,076) (59,853) (0.60)

2 unchanged sentences

Net gain from derivatives

(1,912) (1,912) (482) (1,430) (0.01)

Other adjustments 10,326 10,298 5,495 4,680 0.05

1 unchanged sentence

Adjusted $ 646,573 $ 521,178 $ 129,944 $ 519,872 $ 5.26

26 FORM 10-K SONOCO 2023 ANNUAL REPORT

Due to rounding, individual items may not sum appropriately.

1 Operating profit, income before income taxes, and provision for income taxes exclude results related to discontinued operations of $126,741, $125,805, and $29,548, respectively.

For the year ended December 31, 2022

3 unchanged sentences

As Reported (GAAP) 1

$ 563,355 $ 459,934 $ 95,731 $ 466,437 4.72

Acquisition, integration and divestiture-related costs 70,210 70,210 17,640 52,570 0.53

4 unchanged sentences

Net loss from derivatives

8,767 8,767 2,183 6,584 0.07

Other adjustments (380) (516) 18,471 (18,941) (0.19)

1 unchanged sentence

Adjusted $ 783,045 $ 686,561 $ 167,861 $ 639,493 $ 6.48

Adjusted EBITDA and Adjusted EBITDA Margin

For the Year Ended December 31,

Due to rounding, individual items may not sum appropriately.

1 Operating profit, income before income taxes, and provision for income taxes exclude results related to discontinued operations of $112,044, $111,348, and $22,778, respectively.

34 FORM 10-K SONOCO 2024 ANNUAL REPORT

Adjusted EBITDA 1

Twelve Months Ended

Dollars in thousands 2024 2023 2022

5 unchanged sentences

Non-operating pension costs 13,842 14,312 7,073

Net income attributable to noncontrolling interests 942 543

Net (income)/loss attributable to noncontrolling interests (9) 942 543

Restructuring/Asset impairment charges 69,110 56,933 56,910

Changes in LIFO inventory reserves (6,263) (11,817) 28,445

Gain from divestiture of business and other assets (78,929) —

Other income, net (39,657)

Loss/(Gain) on divestiture of business and other assets

23,452 (78,929) —

Acquisition, integration and divestiture-related costs 110,883 26,254 70,210

Other expenses/(income), net

104,200 (39,657) —

Net (gain)/loss from derivatives (7,225) (1,912) 8,767

1 unchanged sentence

Adjusted EBITDA $ 1,035,172 $ 1,067,796 $ 1,162,469

Net Sales $ 6,781,292 $ 7,250,552

Net Income Margin 7.0 % 6.4 %

Adjusted EBITDA Margin 15.7 % 16.0 %

1 Adjusted EBITDA is calculated on a total Company basis, including both continuing operations and discontinued operations.

The Company does not calculate net income by segment;

10 unchanged sentences

Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items.

All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other.

All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations.

Total operating profit is comprised of the sum of segment and All Other operating profit plus certain items that have been allocated to Corporate, including amortization of acquisition intangibles;

6 unchanged sentences

35 FORM 10-K SONOCO 2024 ANNUAL REPORT

Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation

Segment Adjusted EBITDA and All Other Adjusted EBITDA, Adjusted EBITDA Margin Reconciliation

For the Year Ended December 31, 2024

10 unchanged sentences

— — — 91,600 91,600

Gain from divestiture of business and other assets 5

Loss on divestiture of business and other assets 5

— — — 23,452 23,452

Net gains from derivatives 6

Net gain from derivatives 6

— — — (7,225) (7,225)

5 unchanged sentences

Segment Adjusted EBITDA Margin 16.0 % 16.9 % 15.4 %

1 Included in Corporate is the amortization of acq uisition intangibles associated with the Consumer Packaging segment of $57,044, the Industrial Paper Packaging segment of $16,121, and All Other of $14,099.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $8,059, the Industrial Paper Packaging segment of $38,754, and All Other of $7,623.

1 Included in Corporate is the amortization of acq uisition intangibles associated with the Consumer Packaging segment of $52,144, the Industrial Paper Packaging segment of $25,619, and the All Other group of businesses of $832.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $19,259, the Industrial Paper Packaging segment of $33,923, and the All Other group of businesses of $1,434.

3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(5,780) and the Industrial Paper Packaging segment of $(483).

4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $9,052 and the Industrial Paper Packaging segment of $(3,600).

5 Included in Corporate are gains from the sale of the Company’s timberland properties in the amount of $(60,945), the sale of its S3 business in the amount of $(11,065), and the sales of its BulkSak businesses in the amount of $(6,919), all of which are associated with the Industrial Paper Packaging segment.

6 Included in Corporate are gains on derivatives associated with the Consumer Packaging segment of $(257), the Industrial Paper Packaging segment of $(1,290), and All Other of $(365).

7 Included in Corporate are other non-GAAP adjustments associated with the Industrial Paper Packaging segment of $3,762 and the All Other group of businesses of $3,249.

5 Included in Corporate are net losses on the divestiture of business associated with the Industrial Paper Packaging segment of $24,357, including a loss of $25,607 from the sale of two production facilities in China, partially offset by a gain of $(1,250) from the sale of the S3 business, and a gain associated with the All Other group of businesses of $(905) related to the sale of Protexic.

6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(1,202), the Industrial Paper Packaging segment of $(5,174), and the All Other group of businesses of $(849).

36 FORM 10-K SONOCO 2024 ANNUAL REPORT

Segment Adjusted EBITDA and All Other Adjusted EBITDA Reconciliation

Segment Adjusted EBITDA and All Other Adjusted EBITDA, Adjusted EBITDA Margin Reconciliation

For the Year Ended December 31, 2023

10 unchanged sentences

— — — 24,624 24,624

Net losses from derivatives 5

Gain from divestiture of business and other assets 5

— — — (78,929) (78,929)

Net gains from derivatives 6

— — — (1,912) (1,912)

Other non-GAAP adjustments 7

— — — 10,326 10,326

Segment Adjusted EBITDA $ 381,666 $ 432,423 $ 99,791 $ (42,254) $ 871,626

2 unchanged sentences

Segment Adjusted EBITDA Margin 15.4 % 18.2 % 16.7 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $55,089, the Industrial Paper Packaging segment of $8,053, and All Other of $17,285.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $13,865 and the Industrial Paper Packaging segment of $24,745.

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $44,250, the Industrial Paper Packaging segment of $16,121, and the All Other group of businesses of $6,952.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $4,111, the Industrial Paper Packaging segment of $38,754, and the All Other group of businesses of $2,547.

3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(10,915) and the Industrial Paper Packaging segment of $(902).

4 Included in Corporate are acquisition, integration, and divestiture-related costs associated with the Consumer Packaging segment of $1,171 and the Industrial Paper Packaging segment of $5,810.

5 Included in Corporate are net losses on derivatives associated with the Consumer Packaging segment of $1,230, the Industrial Paper Packaging segment of $5,789, and All Other of $1,748.

Results of Operations – 2023 Versus 2022

Net income attributable to Sonoco (“GAAP results”) were $475.0 million ($4.80 per diluted share) in 2023, compared with $466.4 million ($4.72 per diluted share) in 2022.

GAAP results reflect net after-tax, adjusted charges totaling $44.9 million and $173.1 million in 2023 and 2022, respectively.

These adjustments are presented in the “Reconciliations of GAAP to Non-GAAP Financial Measures” tables.

Adjusted for these items, Adjusted Earnings in 2023 was $519.9 million ($5.26 per diluted share), compared with $639.5 million ($6.48 per diluted share) in 2022.

These favorable factors were partially offset by lower volumes across the portfolio and unfavorable metal price overlap.

Adjusted Earnings in 2023 declined as a result of lower volumes across the portfolio, inflationary pricing pressure within retail in the Consumer Packaging segment, and unfavorable index-related pricing in the Industrial Paper Packaging segment.

Consolidated net sales for 2023 were $6.8 billion, a $0.5 billion, or 6.5%, decrease from 2022.

The components of the sales change were:

($ in millions)

Volume/mix $ (574)

Selling price (14)

Acquisitions and divestitures, net 104

Foreign currency translation and other, net 15

Total sales decrease

The lower year-over-year sales were driven by lower volumes across the portfolio and were partially offset by sales from acquisitions.

Volume challenges in the Consumer segment resulted from inflationary pricing pressures within retail.

This impact, along with unfavorable pricing, was partially offset by the full year impact in 2023 of the January 2022 acquisition of Metal Packaging.

Along with unfavorable volume, the Industrial segment was unfavorably impacted by index pricing, partially offset by the impact of the current year acquisitions of the remaining interest in RTS Packaging and the acquisition of the Chattanooga Mill.

Volume/mix declines in the All Other group of businesses were partially offset by positive pricing.

6 Included in Corporate are net gains from derivatives associated with the Consumer segment of $(257), the Industrial Paper Packaging segment of $(1,290), and All Other of $(365).

7 Included in Corporate are other non-GAAP adjustments associated with the Industrial segment of $3,762 and the All Other group of businesses of $3,249.

37 FORM 10-K SONOCO 2024 ANNUAL REPORT

Total domestic sales were $4.8 billion, down 7.9% from 2022, driven by lower volumes across the portfolio, partially offset by revenue from acquisitions.

International sales were $2.0 billion, down 2.8% from 2022.

Costs and Expenses/Margins

Cost of sales decreased $465.3 million in 2023, or 8.0%, from the prior year.

The decrease was attributable to the lower sales volume, which was partially offset by lower input costs, primarily for steel and old corrugated cardboard.

Gross profit margins increased to 21.2% in 2023 from 19.9% in the prior year primarily due to the previously mentioned lower input costs.

Selling, general and administrative expenses (“SG&A”) increased $34.5 million, or 4.9%, and were 10.9% of sales in 2023 compared to 9.8% of sales in 2022.

The current year increase was related to higher compensation, benefits, group medical, and information technology costs resulting from inflation and the impact of acquisitions.

These increases were partially offset by lower year-over-year acquisition, integration, and divestiture-related costs.

These costs were higher in the prior year due to the January 2022 acquisition of Metal Packaging.

Restructuring and asset impairment charges totaled $56.9 million in both 2023 and 2022.

The 2023 charges reflect the closure costs of several operations, including a paper mill in Kansas, a perimeter-of-the-store facility in California, and medical plastics facilities in the United States and United Kingdom.

The 2022 charges include severance and other plant closure costs as well as a $9.2 million impairment charge resulting from the Company’s exit from its Russian operations.

Additional information regarding restructuring actions and asset impairments is provided in Note 4 to the Company’s Consolidated Financial Statements.

Other income, net was $39.7 million in 2023, reflecting a gain of $44.0 million resulting from the remeasurement of the Company’s previously held equity interest in RTS Packaging to fair value, partially offset by a loss of $4.3 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition.

See Note 3 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $14.3 million in 2023, compared with $7.1 million in 2022.

The year-over-year increase of $7.2 million was primarily due to higher interest costs on the Company’s defined benefit pension liabilities, resulting from higher year-over-year discount rates.

See Note 14 to the Consolidated Financial Statements for further information on employee benefit plans.

Net interest expense totaled $126.3 million for the year ended December 31, 2023, compared with $97.0 million in 2022.

Additional information regarding the Company’s indebtedness is provided in Note 10 to the Company’s Consolidated Financial Statements.

The effective tax rates on GAAP and Adjusted Earnings for the full year 2023 were 24.3% and 24.6%, respectively, compared with 20.7% and 23.9%, respectively in 2022.

The increase in the GAAP effective tax rate for 2023 was due primarily to the absence in 2023 of a release of a valuation allowance on foreign tax credits.

The increase in the effective tax rate on Adjusted Earnings was primarily due to a variance in tax rates between jurisdictions in which the respective income and charges were taxed.

Reportable Segments

The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other.

Effective January 1, 2024, the Company will integrate its flexible packaging and thermoforming packaging businesses within the Consumer Packaging segment in order to streamline operations, enhance customer service and better position the business for accelerated growth.

As a result, the Company will change its operating and reporting structure to reflect the way it plans to manage its operations, evaluate performance, and allocate resources going forward.

Therefore, in future reporting periods, the Company’s consumer thermoforming businesses will move from the All Other group of businesses to the Consumer Packaging segment.

The Company’s Industrial Paper Packaging segment will not be affected by these changes.

As of and for the year ended December 31, 2023, there were no changes to the manner in which the Company reviewed financial information at the segment level;

therefore, these changes had no impact on the Company’s reporting structure.

Total operating profit, reported as “Operating Profit” in the Company’s Consolidated Statements of Income, is comprised of the following:

($ in millions) 2023 2022 % Change

Segment operating profit:

Consumer Packaging $ 382.1 $ 526.0 (27.4) %

Industrial Paper Packaging 317.9 327.9 (3.0) %

All Other 103.7 66.0 57.1 %

Total segment operating profit 803.7 919.9 (12.6) %

Restructuring/Asset impairment charges (56.9) (56.9)

Amortization of acquisition intangibles (87.3) (80.4)

Other income/(charges), net 56.3 (107.1)

Total operating profit*

Segment Adjusted EBITDA and All Other Adjusted EBITDA, Adjusted EBITDA Margin Reconciliation

For the Year Ended December 31, 2022

Dollars in thousands Consumer Packaging segment Industrial Paper Packaging segment All Other Corporate Total

Segment and Total Operating Profit $ 442,156 $ 327,859 $ 58,240 $ (264,900) $ 563,355

Depreciation, depletion, and amortization 1

84,049 91,944 14,277 60,263 250,533

*Due to rounding, amounts above may not sum to the totals presented

Segment results, which are reviewed by Company management to evaluate segment performance, do not include:

Equity in earnings of affiliates, net of tax 485 13,722 — — 14,207

Restructuring/Asset impairment charges 2

amortization of acquired intangibles:

acquisition, integration, and divestiture-related charges;

— — — 52,385 52,385

Changes in LIFO inventory reserves 3

gains/losses from the sale of businesses or other assets;

gains/losses on derivatives;

or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business.

Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items.

All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other.

See Note 19 to the Company’s Consolidated Financial Statements for more information on reportable segments.

30 FORM 10-K SONOCO 2023 ANNUAL REPORT

Consumer Packaging

($ in millions) 2023 2022 % Change

— — — 28,445 28,445

Segment operating profits 382.1 526.0 (27.4) %

Depreciation, depletion and amortization 124.5 111.6 11.6 %

Capital spending 186.1 127.5 46.0 %

Consumer Packaging segment net sales decreased year over year as volumes continued to be impacted by inflationary pricing pressures within retail and volume declines from customer retail destocking throughout the year.

Domestic sales were approximately $2,780 million, down 6.1%, or $180 million, from 2022, while international sales were approximately $847 million, up 4.9%, or $39 million, from 2022.

Segment operating profits decreased by $144.0 million year over year and operating profit margins decreased to 10.5% from 14.0%.

The decreases in operating profit and operating margins were primarily due to unfavorable volume/mix and the unfavorable impact of metal price overlap of approximately $35 million.

These unfavorable impacts were partially offset by improved productivity.

Capital spending in the segment included numerous automation projects in North America and Europe and expansion of manufacturing capabilities in North America, Europe, South America, and Asia.

Industrial Paper Packaging

($ in millions) 2023 2022 % Change

Acquisition, integration and divestiture-related costs 4

— — — 70,210 70,210

Segment operating profits 317.9 327.9 (3.0) %

Depreciation, depletion and amortization 104.7 91.9 13.9 %

Capital spending 111.6 145.0 (23.0) %

Industrial Packaging segment net sales decreased year over year due to unfavorable volume and index-related pricing declines.

Domestic trade sales in the segment decreased $222 million, or 13.8%, to $1,389 million, while international trade sales decreased $89 million, or 8.3%, to $985 million.

Segment operating profit decreased year over year, driven by the unfavorable volume and index-related pricing, partially offset by the full-year impact of strategic pricing initiatives.

Capital spending in the segment included numerous automation projects in North America, productivity projects in North America and Europe, and capacity improvements in North America, Europe, and Asia.

($ in millions) 2023 2022 % Change

Net gain from derivatives 5

— — — 8,767 8,767

Segment operating profits 103.7 66.0 57.1 %

Depreciation, depletion and amortization 24.5 24.9 (1.6) %

Capital spending 24.8 21.2 17.0 %

All Other net sales decreased year over year due to lower volumes, primarily in temperature assured packaging as COVID-related demand declined.

These favorable factors were partially offset by the impact of the lower volumes.

Capital spending in the All Other group of businesses was mostly related to customer development and automation projects in North America.

Other non-GAAP adjustments

— — — (380) (380)

Segment Adjusted EBITDA $ 526,690 $ 433,525 $ 72,517 $ (45,210) $ 987,522

Net Sales $ 2,564,004 $ 2,684,563 $ 610,760

Segment Operating Profit Margin 17.2 % 12.2 % 9.5 %

Segment Adjusted EBITDA Margin 20.5 % 16.1 % 11.9 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $42,058, the Industrial Paper Packaging segment of $8,053, and the All Other group of businesses of $10,152.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $9,180, the Industrial Paper Packaging segment of $24,745, and the All Other group of businesses of $(69).

3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $26,753 and the Industrial Paper Packaging segment of $1,692.

4 Included in Corporate are acquisition, integration, and divestiture-related costs associated with the Consumer Packaging segment of $38,690 and the Industrial Paper Packaging segment of $1,885.

5 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $1,332, the Industrial Paper Packaging segment of $5,788, and All Other of $1,646.

Financial Position, Liquidity, and Capital Resources

Operating Activities

Cash flows from operations totaled $882.9 million in 2023 compared with $509.0 million in 2022, a year-over-year increase of $373.9 million.

GAAP net income increased by $8.9 million year over year, reflecting a non-cash gain in 2023 resulting from the remeasurement of the Company’s previously held equity interest in RTS Packaging to fair value, and gains from the sale of the Company’s timberland properties, and the sales of its S3 and BulkSak businesses.

Net income in the current year also reflected a $32.2 million year-over-year increase in non-cash depreciation, depletion and amortization expense and a $5.0 million increase in net non-cash asset impairment charges.

Cash contributions to the Company’s pension and postretirement plans in 2023 were $14.7 million, compared with $37.4 million in 2022, a year-over-year decrease of $22.7 million.

The prior year contributions included the final Sonoco Retirement Contribution (“SRC”), the non-elective component of the Sonoco Savings Plan.

The SRC was terminated as of December 31, 2021.

Accrued expenses and other assets and liabilities used $46.7 million of cash in 2023 and provided $17.9 million of cash in 2022.

The year-over-year change was largely driven by the higher payout of management incentive compensation in 2023.

Cash paid for taxes increased by $66.9 million year over year.

Tax payments in 2022 benefited from additional accelerated tax depreciation in the United States resulting from the Metal Packaging acquisition, while the 2023 payments did not have this benefit.

Net working capital provided $218.8 million of cash in 2023, while it used $328.7 million of cash in 2022, for a year-over-year increase in operating cash flows of $547.5 million.

The year-over-year improvement was driven largely by inventory reductions in the current year.

Inventory levels at the end of 2022 were higher than usual as the Company sought to mitigate supply chain uncertainty caused by lack of availability and shipment delays.

Inventory levels decreased in 2023, most notably in tinplate steel, as the Company focused on reducing inventory in a lower sales volume environment.

The year-over-year decrease in accounts payable was attributable to the lower spending on inventories and a decline in the cost of inputs (principally steel and old corrugated containers).

Accounts receivable provided $27.4 million more cash in 2023 than in 2022,

Cash flows from operations totaled $833.8 million in 2024, compared with $882.9 million in 2023, a year-over-year decrease of $(49.1) million.

GAAP net income decreased by $312.0 million year over year as described in the “Results of Operations” section above.

Net income in the current year also reflected a $33.9 million year-over-year increase in non-cash depreciation, depletion and amortization expense and a $9.4 million decrease in net non-cash asset impairment charges.

Cash contributions to the Company’s pension and postretirement plans in 2024 were $19.6 million, compared with $14.7 million in 2023, a year-over-year increase of $5.0 million.

Accrued expenses and other assets and liabilities provided $75.1 million of cash in 2024 and used $46.7 million of cash in 2023, for a year-over-year increase in provision of cash of $121.8 million.

A significant driver of the change was the year-over-year increase in accrued management incentives in 2024 of $37.9 million, compared to a year-over-year decrease in 2023 of $22.7 million.

The $60.6 million year-over-year increase in provision of cash related to accrued management incentive compensation, combined with a $34.1 million year-over-year increase in accrued interest as the result of higher interest expense related to financing transactions associated with the Eviosys acquisition, were the primary drivers of the increased provision of cash from accrued expenses and other assets and liabilities.

Cash paid for taxes decreased by $97.3 million year over year.

Tax payments in 2024 benefited from lower pre-tax income in the United States compared to 2023.

Net working capital provided $128.1 million of cash in 2024, while it provided $218.8 million in 2023.

This net year-over-year decrease in provision of cash of $90.7 million was driven largely by year-over-year changes in inventory levels, partially offset by changes in accounts payables.

Inventories used cash of $13.3 million in 2024 while providing cash of $342.7 million in 2023.

Inventory levels at the end of 2024 changed only slightly from inventory levels at the end of 2023;

however, inventory levels at the end of 2023 were significantly lower than they were at the end of 2022, particularly in tinplate steel, as the Company focused on reducing inventory in a lower sales volume environment during 2023.

Accounts payable provided $123.6 million of cash in 2024 while using $148.8 million of cash in 2024.

The year-over-year increase in the provision of cash from accounts payable was attributable to the spending on inventories, the year-over-year change in the cost of inputs, and better negotiated terms with certain vendors.

Accounts receivable provided $7.2 million less cash in 2024 compared to 2023.

38 FORM 10-K SONOCO 2024 ANNUAL REPORT

reflecting the Company’s active management of collections and compliance with payment terms, along with the impact of lower volumes and lower selling prices.

Investing Activities

Investing activities used $619.3 million of cash in 2023, compared with $1,741.4 million in 2022.

The lower year-over-year use of cash was primarily attributable to lower acquisition spending as the Company invested $372.6 million in acquisitions in 2023 (RTS Packaging, the Chattanooga Mill, and Inapel) compared with $1,427.0 million in 2022 (Metal Packaging, Skjern, and Nordeste).

Investing activities used $4.1 billion of cash in 2024, compared with $619.3 million in 2023.

The higher year-over-year use of cash was primarily attributable to higher acquisition spending as the Company invested $3.8 billion in the Eviosys acquisition in December 2024, compared with total acquisition spending of $372.6 million in 2023 for the acquisitions of RTS Packaging, the Chattanooga Mill, and Inapel.

Capital expenditures in 2024 were $393.2 million, $30.2 million higher than the previous year.

The year-over-year increase was driven by increased investments in various automation projects and strategic growth and productivity projects in both the Consumer Packaging and the Industrial Packaging segments.

Proceeds from the sale of businesses provided $33.2 million of cash in 2023 as the Company received cash from the sale of its S3 and BulkSak businesses.

Proceeds from the sale of assets totaled $80.3 million in 2023, primarily from the sale of the Company’s timberland properties, compared with $9.6 million in the prior year.

In addition, the Company’s year-over-year investments in affiliated companies increased $8.6 million, including a 2.7% equity interest in Northstar valued at $5.0 million which the Company acquired on January 26, 2023, as part of the sale of its S3 business to Northstar.

Other net investing proceeds provided $6.6 million more cash year over year, primarily as a result of higher life insurance proceeds received in the current year.

Proceeds from the sale of businesses provided $81.0 million of cash in 2024 as the Company received cash from the sale of its Protexic business and additional proceeds related to the prior year sale of its S3 business.

Proceeds from the sale of businesses provided $33.2 million of cash in 2023 as the Company received cash from the sales of its S3 and BulkSak businesses.

Proceeds from the sale of assets totaled $15.6 million in 2024, primarily from the sale of previously closed production facilities, compared with $80.3 million in the prior year, primarily related to the sale of the Company’s timberland properties.

Proceeds from the settlement of a net investment hedge provided $9.1 million of cash in 2024, and the Company paid $34.4 million in 2024 to settle a tranche of foreign currency forward contracts that the Company entered into in connection with the funding of the Eviosys acquisition.

Net investments in affiliated companies used $2.7 million of cash in 2024, compared to $11.3 million of cash in 2023.

Both years reflect additional investments in the Company’s investments in ISI Robotics and a small South Carolina-based designer and manufacturer of sustainable packaging solutions.

The 2024 figure also reflects proceeds from the sale of the Company’s 2.7% equity interest in Northstar, which it had acquired on January 26, 2023 for $5.0 million, as part of the sale of its S3 business to Northstar.

Other net investing proceeds provided $1.4 million less cash year over year, primarily as a result of lower life insurance proceeds received in the current year.

Financing Activities

Net cash used by financing activities totaled $352.0 million in 2023, compared with a net provision of cash totaling $1,294.2 million in 2022.

Financing activities in 2023 included the net repayment of debt totaling $150.4 million as the Company utilized its strong operating cash flows and proceeds from the sale of assets to repay syndicated term loans ahead of their scheduled maturities.

The Company received net debt proceeds of $1,518.8 million from the issuance of green bonds and a three-year term loan facility in 2022 that were used primarily to fund the January 2022 acquisition of Metal Packaging.

The change in outstanding checks provided cash of $6.4 million in 2023 while using cash of $18.5 million in the prior year.

The year-over-year change is the result of the timing and size of the last accounts payable check runs in 2023 and 2022 relative to the Company’s December 31 year end.

Net cash provided by financing activities totaled $3.7 billion in 2024, compared with a net use of cash totaling $352.0 million in 2023.

Financing activities in 2024 included net proceeds of debt totaling $3.9 billion used primarily to fund the acquisition of Eviosys.

In 2023, the Company made net debt repayments of $150.4 million as it utilized strong operating cash flow and proceeds from the sale of assets to repay syndicated term loans ahead of their scheduled maturities.

Financing activities in 2024 also included the payment of f ees totaling $19.0 million related to an unsecured bridge term loan facility to secure funding for the Eviosys acquisition.

The change in outstanding checks used cash of $8.7 million in 2024 while providing cash of $6.4 million in the prior year.

The year-over-year c hange is the result of the timing and size of the last accounts payable check runs in 2024 and 2023 relative to the Company’s December 31 year end.

Cash used to repurchase the Company’s common stock to satisfy employee tax withholding obligations in association with the exercise of certain share-based compensation awards was $9.2 million in 2024, compared to $10.6 million in 2023.

Also in 2022, the Company used cash of $14.5 million to purchase the remaining 33% ownership interest in Graffo Paranaense de Embalagens S/A from the three noncontrolling partners.

Cash dividends totaled $197.4 million in 2023 compared to $187.1 million in 2022, reflecting the increase in the quarterly dividend payment from $0.49 per share to $0.51 per share approved by the Board in April 2023.

Cash dividen ds totaled $203.5 million in 2024 compared to $197.4 million in 2023, reflecting the increase in the quarterly dividend payment from $0.51 per share to $0.52 per share approved by the Board in April 2024.

Capital Resources

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Cash held outside of the United States is available to meet local liquidity needs, or for capital expenditures, acquisitions, and other offshore growth opportunities.

As the Company has maintained sufficient domestic liquidity through a combination of operating cash flow generation and access to bank and capital markets borrowings, we have generally considered our foreign unremitted earnings to be indefinitely invested outside the United States and currently have no plans to repatriate such earnings, other than excess cash balances that can be repatriated at minimal tax cost.

Accordingly, as of December 31, 2023, the Company is not providing for taxes on these amounts for financial reporting purposes.

The Company has generally maintained sufficient domestic liquidity through a combination of operating cash flow generation and access to bank and capital markets borrowings, and therefore generally considered its foreign unremitted earnings to be indefinitely invested outside the United States and did not typically plan to repatriate such earnings, other than excess cash balances that could be repatriated at minimal tax cost.

In 2024, due to the increase in debt in the United States affecting domestic liquidity, the Company did not consider certain future earnings of the Eviosys business to be indefinitely reinvested outside the United States and may repatriate excess cash balances from Eviosys at minimal tax cost.

As of December 31, 2024, the Company is not providing for taxes on these amounts for financial reporting purposes.

Computation of the potential deferred tax liability associated with unremitted earnings considered to be indefinitely reinvested is not practicable.

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The amount owed to the participating financial institution under the SCF Programs and included in accounts payable for continuing operations was $28.5 million at December 31, 2024 and $24.8 million at December 31, 2023.

The Company accounts for all payments made under the SCF Programs as a reduction to cash flows from operations and reports them within “changes in payable to suppliers” in the Consolidated Statements of Cash Flows.

The total amount settled through the SCF Programs and paid by the Company to the participating financial institution was $188 million during 2023 and $270 million during 2022.

A downgrade in the Company’s credit rating or changes in the financial markets could limit financial institutions’ willingness to commit funds to, and participate in, the SCF Programs.

However, the Company does not believe a reduction in, or the elimination of, the SCF Programs would have a material impact on its working capital or cash flows.

The Company’s total debt at December 31, 2023, was $3.1 billion, a year-over-year decrease of $0.1 billion.

The Company’s total debt at December 31, 2024, was $7.0 billion, a year-over-year increase of $4.0 billion.

The year-over-year change reflects the following actions taken during 2024:

• On August 7, 2023, the Company entered into a $900 million term loan facility, maturing on August 7, 2028, with a consortium of Farm Credit System institutions (see Note 10 for more information).

A total of $600 million was drawn on August 7, 2023 and used to repay the syndicated term loans that were due in December 2023 and January 2025 and to make certain capital expenditures and to reimburse the Company for certain capital expenditures it had made in its operation of waste disposal facilities in rural areas.

An additional $270 million was drawn on September 8, 2023 and used to partially fund the acquisition of the remaining interest in RTS Packaging and the acquisition of the Chattanooga Mill (see Note 3 for more information).

As of December 31, 2023, the Company had repaid a total of $295 million of the amounts drawn and had outstanding borrowings of $575 million under the term loan facility.

• On May 3, 2024, the Company increased the commitments under its unsecured revolving credit facility by $350 million to an aggregate amount of $1.25 billion.

The Company entered into this five-year facility, which supports its $1.25 billion commercial paper program, on June 30, 2021.

At December 31, 2024, the Company had no commercial paper balances outstanding;

accordingly, the committed capacity available for drawdown under its revolving credit facility at December 31, 2024 was $1.25 billion.

39 FORM 10-K SONOCO 2024 ANNUAL REPORT

• The Company utilized its strong operating cash flows and proceeds from the sale of assets to repay syndicated term loans of $700 million in July and August 2023, ahead of their scheduled maturities.

On August 7, 2023, the Company increased the commitments under its unsecured revolving credit facility by $150 million to an aggregate amount of $900 million.

The Company entered into this five-year facility, which supports its $500 million commercial paper program, on June 30, 2021.

At December 31, 2023, the Company had approximately $152 million in cash and cash equivalents on hand and $900 million in committed availability under its revolving credit facility, all of which was available for drawdown.

• On July 12, 2024, the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Term Credit Agreement”).

The Term Credit Agreement provides the Company with the ability to borrow up to $700 million on an unsecured basis (the “Term Loan Facility”) to finance a portion of the cash consideration for the Company’s acquisition of Eviosys.

The Company drew down the entire Term Loan Facility on December 2, 2024 in connection with the consummation of the Eviosys acquisition on December 4, 2024.

• On September 16, 2024, the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “ 364 -Day Term Credit Agreement”).

The 364 -Day Term Credit Agreement provides the Company with the ability to borrow up to $1.5 billion on an unsecured basis (the “ 364 -Day Term Loan Facility” and, together with the Term Loan Facility, the “Term Loan Facilities”) to finance a portion of the cash consideration for the Company’s acquisition of Eviosys.

The Company drew down the entire 364-Day Term Loan Facility on December 2, 2024 in connection with the consummation of the Eviosys acquisition on December 4, 2024.

Pursuant to the terms of the Term Loan Facilities, the Company is required to use the net proceeds of its pending divestiture of TFP and certain future dispositions to reduce its indebtedness.

• On September 19, 2024, the Company completed a registered public offering of senior unsecured notes (the “Notes”) in a combined aggregate principal amount of $1.8 billion.

• On December 4, 2024, the Company completed the acquisition of Eviosys.

The net cash consideration of approximately $3.8 billion and the acquisition-related fees and expenses, was funded through (i) the completed registered public offering of the Notes in a combined aggregate principal amount of $1.8 billion;

(ii) the Term Loan Facility in an aggregate principal amount of $700 million ;

(iii) the 364-Day Term Credit Agreement in an aggregate principal amount of $1.5 billion ;

and (iv) cash on hand.

Included in “Other foreign denominated debt” at December 31, 2024 are $73.5 million of transfers of certain trade receivables of Eviosys to third-party financial institutions for which the requirements to be accounted for as a true sale in accordance with the guidance under ASC 860 were not met.

At December 31, 2024, the Company had approximately $443.1 million in cash and cash equivalents on hand, including discontinued operations, and $1.25 billion in committed availability under its revolving credit facility, all of which was available for drawdown.

The Company has the contractual right to draw funds directly on the underlying revolving credit facility, which could possibly occur if there were a disruption in the commercial paper market.

As of December 31, 2024, the Company had scheduled debt maturities of $2,054.5 million, $1,218.5 million, $310.5 million, $508.1 million, and $598.4 million in 2025, 2026, 2027, 2028, and 2029, respectively.

See Note 10 to the Consolidated Financial Statements for additional information regarding the Company’s contractual principal debt maturities.

On February 3, 2025, the Company repaid the 1.80% notes due February 2025 using proceeds from the issuance of commercial paper.

S ee Note 11 to the Consolidated Financial Statements for additional information regarding the Company’s contractual principal debt maturities.

The Company’s contractual obligation maturities for interest payments on outstanding fixed-rate, long-term debt, as well as financing fees on the backstop line of credit, are expected to total approximately $158.3 million in 2025, $150.3 million in 2026, $129.2 million in 2027, $128.7 million in 2028, and $118.1 million in 2029.

Capital spending is expected to total approximately $350 million in 2024, in line with 2023 (when excluding the impact of proceeds from asset sales).

The Company expects increasing levels of investment for profit generating projects in the Rigid Paper, Flexibles, and Metal Packaging businesses centered around footprint optimization, automation, and sales growth support.

These increases are expected to be offset by moderating year-over-year levels of maintenance capital.

Capital spending is expected to total approximately $360 million in 2025, down slightly from 2024.

The Company expects to continue to invest in profit generating projects in our Global Cans business (inclusive of the 2024 acquisition of Eviosys) and Global Paper Products business focused on footprint optimization, automation, and sales growth.

The Company believes cash on hand and available credit, combined with expected net cash flows generated from operating and investing activities, will provide sufficient liquidity to cover these and other cash flow needs of the Company over the course of 2025 and beyond.

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The net underfunded position of the Company’s various U.S and international defined benefit pension and postretirement plans was $168 million at the end of 2024, compared with $127 million at the end of 2023.

The increase in the unfunded position reflects an additional unfunded liability of approximately $12 million associated with the acquisition of the remaining interest in RTS Packaging and the related assumption of the RTS Packaging Pension Plan (“RTS Plan”).

The increase in the unfunded position reflects pension plans acquired in the December 4, 2024 acquisition of Eviosys with an unfunded liability totaling approximately $52.8 million.

The Company contributed approximately $19.6 million to its benefit plans in 2024.

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Future funding requirements will depend largely on actual investment returns, future actuarial assumptions, legislative actions, and changes to the Company’s benefit offerings.

Current assets decreased year over year by $311 million to $2,050 million at December 31, 2023, and current liabilities decreased by $579 million to $1,165 million, resulting in an increase in the Company’s ratio of current assets to current liabilities to 1.8 at December 31, 2023 from 1.4 at December 31, 2022.

Current assets increased ye ar over year by $1,128 million to $3,179 million at December 31, 2024, and current liabilities i ncreased b y $2,873 million to $4,038 million , resulting in a de crease in th e Company’s ratio of current assets to current liabilities to 0.8 at December 31, 2024 from 1.8 at December 31, 2023.

Current assets were lower principally due to year-over-year reductions in inventory while current liabilities decreased primarily due to the repayment of the syndicated term loan that was due in December 2023.

Total equity increased $359 million during 2023 as net income of $476 million, other comprehensive income of $63 million and stock-based compensation of $28 million were partially offset by dividends of $199 million and share repurchases of $11 million for tax share withholding on vested stock compensation granted to employees.

The primary driver of other comprehensive income was a $70 million translation gain from the impact of a weaker U.S.

Total equity decreased $146 million during 2024 as net income of $164 million, other comprehensive loss of $137 million and stock-based compensation of $30 million were partially offset by dividends of $204 million and share repurchases of $9 million for tax share withholding on vested stock compensation granted to employees.

The primary driver of other comprehensive income was a $144 million translation loss from the impact of a stronger U.S.

dollar on the Company’s foreign investments.

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The Company purchased a total of 3.29 million shares under this authorization during 2021 at a cost of $212 million.

No shares were repurchased under this authorization during 2022 or 2023;

No additional shares have been repurchased under this authorization since 2021;

accordingly, a total of $138 million remains available for share repurchases at December 31, 2024.

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On February 12, 2025 , the Company declared a regular quarterly dividend of $0.52 per common share payable on March 10, 2025 , to shareholders of record on February 26, 2025 .

40 FORM 10-K SONOCO 2024 ANNUAL REPORT

The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, warehouses, and packaging centers), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines).

Lease contracts with a term of 12 months or less are not recorded on the consolidated balance sheet.

Lease contracts with a term of 12 months or less are not recorded in the consolidated balance sheet.

Leased assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation arising from the lease.

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The exposure is well diversified, as the Company’s facilities are located throughout the world, and the Company generally sells in the same countries where it produces with both revenue and costs transacted in the local currency.

The Company monitors these exposures and may use foreign currency forward contracts and other risk management instruments to manage exposure to changes in foreign currency cash flows and the translation of monetary assets and liabilities on the Company’s consolidated financial statements by hedging a portion of forecasted transactions that are denominated in foreign currencies, foreign currency assets and liabilities or net investment in foreign subsidiaries.

The Company’s foreign operations are exposed to political, geopolitical, and cultural risks, but the risks are mitigated by diversification and the relative stability of the countries in which the Company has significant operations.

33 FORM 10-K SONOCO 2023 ANNUAL REPORT

The Company monitors these exposures and uses foreign currency forward contracts and other risk management instruments to manage exposure to changes in foreign currency cash flows and the translation of monetary assets and liabilities on the Company’s consolidated financial statements by hedging a portion of forecasted transactions that are denominated in foreign currencies, foreign currency assets and liabilities, or its net investment in foreign subsidiaries.

The Company’s foreign operations are exposed to political, geopolitical, and cultural risks, but these risks are mitigated by diversification and the relative stability of the countries in which the Company has significant operations.

Because the economy in Venezuela is considered highly inflationary under U.S.

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dollar to be the functional currency of its Venezuelan operations and uses the official exchange rate when remeasuring the financial results of those operations.

Economic conditions in Venezuela have worsened considerably over the past several years and there is no indication that conditions are due to improve in the foreseeable future.

Further deterioration could result in the recognition of an impairment charge or a deconsolidatio n of the subsidiary.

Economic conditions in Venezuela have worsened considerably over the past several years and there are no indications that conditions are likely to improve in the foreseeable future.

Further deterioration could result in the recognition of an impairment charge or a deconsolidation of the subsidiary.

At December 31, 2024, the carrying value of the Company’s net investment in its Venezuelan operations was approximately $2.1 million.

In addition, accumulated other comprehensive loss at December 31, 2023 included a cumulative translation loss of approximately $3.8 million related to the Company’s Venezuela operations.

These translation losses would be reclassified to net income in the event of a complete exit of the business or deconsolidation of these operations.

Turkey has been deemed to be a highly inflationary economy under U.S.

In addition, at December 31, 2024, the Company’s “Accumulated other comprehensive loss” included a cumulative translation loss of $3.8 million related to its Venezuelan operations which would need to be reclassified to net income in the event of a complete exit of the business or a deconsolidation of the Venezuelan operations.

Turkey has also been deemed to be a highly inflationary economy under U.S.

GAAP since the first quarter of 2022.

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dollars with changes recorded through earnings.

The cumulative impact of applying highly inflationary accounting to Turkey has been a pretax charge to earnings of $6.5 million ($5.0 million after tax), including $3.8 million ($2.9 million after tax) during 2023.

The magnitude of future earnings impacts is uncertain as such impacts are dependent upon unpredictable movements in the Turkish lira relative to the U.S.

The cumulative impact of applying highly inflationary accounting to Turk ey has been a pretax charge to earnings of $7.9 million ($6.1 million after tax), including $1.4 million ($1.1 million after tax) during 2024.

Th e magnitude of future earnings impacts, however, is uncertain as such impacts are dependent upon unpredictable movements in the Turkish lira relative to the U.S.

In addition to remeasurement-related charges, significant deterioration in the Turkish economy could result in the recognition of future impairment charges.

H owever, the Company believes its exposure is limited to its net investment in Turkey which, as of December 31, 2023, was approximately $17.8 million.

However, the Company believes its exposure is limited to its net investment in Turkey, which was approximat ely $48.3 million as of December 31, 2024, including approximately $27.0 million of additional investment in Turkey as a result of the Eviosys acquisition

The Company is a purchaser of various raw material inputs such as recovered paper, energy, steel, aluminum, and plastic resin.

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In addition, the Company may occasionally use traditional, unleveraged interest-rate swaps to manage its mix of fixed and variable rate debt and control its exposure to interest rate movements within select ranges.

At December 31, 2023 , the Company had derivative contracts outstanding to hedge the prices on a portion of anticipated natural gas and aluminum purchases.

These contracts, which qualify as cash flow hedges, included natural gas swaps covering approximately 0.1 million metric million British thermal units (“MMBTUs”) and aluminum swaps covering 488 metric tons.

In addition, at December 31, 2023 , the Company had certain other commodity contracts outstanding to manage the cost of anticipated natural gas purchases for which the Company does not apply hedge accounting.

These contracts consist of natural gas swaps covering approximately 5.4 million MMBTUs.

The Company’s combined designated and non-designated derivative contracts totaled approximately 76% and 10% of anticipated natural gas and aluminum usage, respectively, in North America for 2024.

The Company routinely enters into forward contracts to hedge certain anticipated foreign currency denominated sales, purchases, and capital spending.

For such contracts that are designated and qualify as a cash flow hedge under ASC 815, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the periods during which the hedged transaction affects earnings.

At December 31, 2024 , t he Company had derivative contracts outstanding to hedge the prices on a portion of anticipated natural gas and aluminum purchases.

These contracts, some of which qualify as cash flow hedges, include natural gas swaps totaling approximately 5.25 million metric million British thermal units (“MMBTUs”) and aluminum swaps totaling 3,546 metric tons.

These contracts have various maturity dates ranging through December 2025.

The total fai r market value of these instruments resulted in a net gain position of $1.0 million and net loss position of $6.8 million at December 31, 2024 and December 31, 2023 , respectively.

The Company routinely enters into derivative currency contracts to mitigate the risk of unfavorable fluctuations in the exchange rate on certain anticipated foreign currency cash flows.

These contracts qualify as cash flow hedges and have various maturity dates rangi n g through Decembe r 2024.

T he total market value of these instruments resulted in a net loss position of $4.9 million at December 31, 2024 and a net gain position of $1.5 million at December 31, 2023.

At December 31, 2024, the total notional amount of these contracts, in U.S.

dollar terms, was $125 million, of which $34 million related to the Mexican peso, $33 million to the Polish zloty, $26 million to the Canadian dollar, $11 million to the Brazilian real, $7 million to the Danish krone, $6 million to the Colombian peso, $5 million to the Czech koruna and $3 million to all other currencies.

The Company also routinely enters into forward contracts to economically hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables.

The Company does not apply hedge accounting treatment under ASC 815 for these instruments.

dollar terms, was $89 million, of which $18 million related to the Mexican peso, $30 million to the Polish zloty, $8 million to the Canadian dollar, $23 million to the Danish krone, $6 million to the Colombian peso, $5 million to the Czech koruna and $(1) million to all other currencies.

In addition, the Company had various currency contracts outstanding to hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables.

Although placed as economic hedges, the Company does not apply hedge accounting to these instruments.

As such, changes in fair value are recorded directly to income and expense in the periods that they occur.

During 2023, the Company became party to cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S.

In 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S.

dollar denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt.

The swap agreement provides for the Company to receive semi-annual interest payments in U.S.

The swap agreements, which had a maturity of December 18, 2026, provided for the Company to receive semi-annual interest payments in U.S.

dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate.

The risk management objective of entering into such agreements is to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros.

The agreements are designated as net investment hedges for accounting purposes.

The gain or loss on the net investment hedge derivative instrument is included in the foreign currency translation component of accumulated other comprehensive loss until the net investment is sold, diluted, or liquidated.

Interest payments received for the cross-currency swap are excluded from the net investment hedge effectiveness assessment and are recorded in interest expense.

For the year ended December 31, 2023, the fair value of the Company’s net investment hedges was a loss position of $5.1 million , and a loss of $3.8 million (net of income taxes of $1.3 million ) was reported as a component of accumulated other comprehensive loss within foreign currency items.

The total fair market value of the Company’s derivatives was a net unfavorable position of $10.4 million and $9.7 million at December 31, 2023 and December 31, 2022, respectively.

The risk management objective of entering into the swap agreements was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros.

The agreements were designated as net investment hedges for accounting purposes.

The gain or loss on the net investment hedge derivative instruments is included in the “Foreign currency translation” component of “Accumulated other comprehensive loss” until the net investment is sold, diluted, or liquidated.

Interest payments received for the cross-currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Consolidated Statements of Income.

The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S.

dollar exchange rate market.

41 FORM 10-K SONOCO 2024 ANNUAL REPORT

On April 15, 2024, as a result of the strengthening of the U.S.

dollar against the euro, as well as a reduction in the differential between U.S.

and European interest rates, the Company terminated its swap agreements and received a net cash settlement of $9.1 million.

The foreign currency translation gain of approximately $3.1 million, net of tax, is included as a component of “Accumulated other comprehensive loss.”

Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S.

dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt.

The new swap agreements, which have a maturity of May 1, 2027, share the same risk management objective as the terminated cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

In December 2024, the Company entered into additional cross-currency swap agreements with a total notional amount of $1.5 billion , including $500 million mat uring on September 1, 2026 , $500 million maturing on September 1, 2029, and $500 million maturing on M ay 1, 2030.

The swaps effectively convert a portion of the Company’s fixed-rate U.S.

dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt at the prevailing market rate at execution.

The new swap agreements share the same risk management objective as the Company’s previously existing cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

The fair value of the Company’s net investment hedges was a gain position of $11.9 million and a loss position of $(5.1) million at December 31, 2024 and December 31, 2023, respectively.

Foreign currency translation gain of $8.9 million (net of income taxes of $3.0 million) and loss of $3.8 million (net of income taxes of $1.3 million) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at December 31, 2024 and December 31, 2023, respectively.

In anticipation of the offering of th e Notes, the Company entered into treasury lock derivative instruments with eleven banks, with a total notional principal amount of $900 million , on August 29, 2024.

These instruments had the risk management objective of reducing the Company’s exposure to increases in the underlying Treasury index up to the date of pricing of the Notes.

The derivatives were settled when the Notes priced on September 17 , 2024, with the Company recognizing a loss on the settlement of $11.1 million.

T he loss is included in “Interest expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2024.

The total fair market value of the Company’s derivatives was a net favorable position of $8.0 million and a net unfavorable position of $10.4 million at December 31, 2024 and December 31, 2023, respectively.

Derivatives are marked to fair value using published market prices, if available, or using estimated values based on current price quotes and a discounted cash flow model.

See Note 12 to the Consolidated Financial Statements for more information on financial instruments.

The Company has an investment in preferred stock of a nonaffiliated private company that is accounted for under the measurement alternative of cost less impairment, adjusted for any qualifying observable price changes.

Observable price changes would consist of Level 2 inputs based on privately negotiated transactions with the nonaffiliated company.

The preferred stock balance of $21.2 million is included in “Other assets” in the Company’s Consolidated Balance Sheet as of December 31, 2024.

The Company is subject to various federal, state and local environmental laws and regulations in the United States and in each of the countries where we conduct business, concerning, among other matters, solid waste disposal, wastewater effluent and air emissions.

Although the costs of compliance have not been significant due to the nature of the materials and processes used in manufacturing operations, such laws also make generators of hazardous wastes and their legal successors financially responsible for the cleanup of sites contaminated by those wastes.

The Company has been named a PRP at several en vironmentally contaminated sites.

The Company has been named a potentially responsible party at several en vironmentally contaminated sites.

These regulatory actions and a small number of private party lawsuits are believed to represent the Company’s largest potential environmental liabilities.

The Company had accrued $7.3 million at December 31, 2023 with respect to these sites.

The Company had accrued $7.0 million at December 31, 2024 with respect to these sites, including $5.1 million related to environmental contingencies at a site in Spartanburg, South Carolina, that is part of the Company’s Thermoformed and Flexibles Packaging business and part of the pending sale of TFP to Toppan.

See “Environmen tal Charges” in Item 3 – Legal Proceedings and Note 18 to the Consolidated Financial Statements for more information on environmental matters.

34 FORM 10-K SONOCO 2023 ANNUAL REPORT

Critical Accounting Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with U.S.

The MD&A is based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with U.S.

The preparation of financial statements in conformity with U.S.

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Actual results could differ from those estimates.

The impact of and any associated risks related to estimates, assumptions and accounting policies are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Consolidated Financial Statements, if applicable, where such estimates, assumptions and accounting policies affect the Company’s reported and expected financial results.

The impact of and any associated risks related to estimates, assumptions and accounting policies are discussed in the MD&A, as well as in the Notes to the Consolidated Financial Statements, if applicable, where such estimates, assumptions and accounting policies affect the Company’s reported and expected financial results.

The Company believes the accounting policies discussed in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K are critical to understanding the results of its operations.

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If we are required to adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on our financial condition and results of operations.

42 FORM 10-K SONOCO 2024 ANNUAL REPORT

Significant estimates and assumptions in estimating the fair value of acquired patents, customer relationships, trade names, proprietary technology, and other identifiable intangible assets include future cash flows that the Company expects to generate from the acquired assets, discount rate, customer attrition rate, and long-term revenue growth projections.

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The qualitative evaluations considered factors such as the macroeconomic environment, the industry, the Company’s overall financial performance, the current and projected financial performance of specific reporting units, and business strategy changes.

The quantitative tests, described further below, relied

35 FORM 10-K SONOCO 2023 ANNUAL REPORT

on the current outlook of reporting unit management for future operating results and took into consideration, among other things, specific business unit risk, the countries in which the reporting units operate, and implied fair values based on comparable tra ding multiples.

The quantitative tests, described further below, relied on the current outlook of reporting unit management for future operating results and took into consideration, among other things, specific business unit risk, the countries in which the reporting units operate, and implied fair values based on comparable tra ding multiples.

When performing a quantitative analysis, the Company estimates the fair value of its reporting units using a weighted average of the income and market approaches.

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Management considers the assumptions used to be its best estimates across a range of possible outcomes based on available evidence at the time of the assessment.

Other than in the Plastics-Medical reporting unit, previously known as Plastics-Healthcare, which is discussed below, there is no specific singular event or single change in circumstances management has identified that it believes could reasonably result in a change to the expected future results in any of its reporting units sufficient to result in goodwill impairment.

Other than in the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units, there is no specific singular event or single change in circumstances management has identified that it believes could reasonably result in a change to the expected future results in any of its reporting units sufficient to result in goodwill impairment.

In management’s opinion, a change of such magnitude would more likely be the result of changes to some combination of the factors identified above, a general deterioration in competitive position, introduction of a superior technology, significant unexpected changes in customer preferences, an inability to pass through significant raw material cost increases, and other such items as identified in “Item 1A.

Risk Factors” in this Annual Report on Form 10-K.

Although no reporting units failed the annual impairment test, in management’s opinion, the goodwill of the Plastics-Medical reporting unit is at risk of impairment in the near term if its operations do not perform in line with management's expectations, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate.

Although no reporting units failed the annual impairment test, in management’s opinion, the goodwill balances of Plastics-Medical, Plastics-Food, and Metal Packaging reporting units are individually at risk of impairment in the near term if each reporting unit’s operations do not perform in line with management’s expectations, or if there is a negative change in the long-term financial outlook for each reporting unit or in other factors such as the particular discount rates used.

Both the Plastics-Medical and Plastics-Food reporting units are part of the Company’s Thermoformed and Flexibles Packaging business and are included in the pending sale of TFP to Toppan.

43 FORM 10-K SONOCO 2024 ANNUAL REPORT

Sensitivity Analysis

In the 2023 annual goodwill impairment analysis, projected future cash flows fo r the Plastics-Medical reporting unit were di scounted at 12.0%, and its estimated fair value was determined to exceed its carrying value by approximately 29.9%.

Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rate for this unit would have to be increased to 14.5% in order for the estimated fair value of the reporting unit to fall below its carrying value.

Total goodwill associated with the Plastics-Medical reporting unit was $64.2 million at December 31, 2023.

In the 2024 annual goodwill impairment analysis, projected future cash flows for the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units were discounted at 11.5%, 10.5%, and 11.0%, respectively, and their estimated fair values were determined to exceed their individual carrying values by approximately 18.7%, 18.9%, and 12.6%, respectively.

Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rates for the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units would have to increase to 13.8%, 12.4%, and 12.1%, respectively, in order for the estimated fair values of the reporting units to fall below their carrying values.

Total goodwill associated with the Plastics-Medical, Plastics-Food, and Metal Pack aging reporting units wa s $63.6 million, $198.8 million, and $384.3 million, respectively, at December 31, 2024.

The goodwill of the Plastics-Medical and Plastics-Food reporting units are reflected in “Non-current assets of discontinued operations” in the Company’s Consolidated Balance Sheets at December 31, 2024.

The Company follows ASC 740, Accounting for Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not such assets will not be realized.

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Share-Based Compensation Plans

The Company utilizes share-based compensation in the form of restricted stock units, performance contingent restricted stock units (“PCSUs”), and other share-based awards.

The fair value of the Company’s restricted stock units is equal to the closing price of the Company’s stock on the date of grant discounted for any projected dividends that are not eligible to be received during the vesting period.

The Company utilizes share-based compensation in the form of restricted stock units (“RSUs”), performance contingent restricted stock units (“PCSUs”), and other share-based awards.

The fair value of the Company’s RSUs is equal to the closing price of the Company’s stock on the date of grant discounted for any projected dividends that are not eligible to be received during the vesting period.

The amount of share-based compensation expense associated with PCSUs is based on estimates of future performance using measures defined in the stock plan descriptions for each award granted.

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• Return on invested capital — three-year simple average of annual returns calculated by dividing 1) adjusted operating profit after tax (derived from historical or projected adjusted earnings) by 2) the average of total historical or projected debt plus equity for the respective annual periods.

For the most recent award grant in 2023, the performance payout will be subject to adjustment by a total stock return modifier as determined by the Company’s relative performance within its targeted peer group.

Changes in estimates regarding the future achievement of these performance measures may result in significant fluctuations from period to period in the amount of share-based compensation expense recognized in the Company’s Consolidated Financial Statements.

For the PCSU awards granted in 2024 and 2023, the performance payouts will be subject to further adjustment by a total stock return modifier as determined by the Company’s relative performance within its targeted peer group for each grant.

See Note 14 to the Consolidated Financial Statements for additional information on the Company’s share-based compensation plans.

36 FORM 10-K SONOCO 2023 ANNUAL REPORT

Pension and Postretirement Benefit Plans

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nonqualified retirement plans, the U.S.

Retirement and Retiree Health and Life Insurance Plan, and the Sonoco U.K.

Retirement and Retiree Health and Life Insurance Plan, the RTS Packaging Pension Plan, and the Sonoco U.K.

Retirement Benefits Plan.

On September 8, 2023, the Company completed the acquisition of the remaining 65% ownership interest of the RTS Packaging joint venture, which included the assumption of the RTS Plan.

At the time of the acquisition, the RTS Plan had a projected benefit obligation (“PBO”) of $43.9 million and plan assets of $32.3 million resulting in an unfunded pension obligation of $11.6 million.

On December 4, 2024, the Company completed the acquisition of Eviosys, which included the assumption of several defined benefit plans (the “Eviosys Plans”).

At the time of the acquisition, the Eviosys Plans had a projected benefit obligation (“PBO”) of $74.1 million and plan assets of $21.2 million resulting in a net unfunded pension obligation of $52.8 million.

The actuarial valuations used to evaluate the plans employ key assumptions that can have a significant effect on the calculated amounts.

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The rate of compensation increase assumption is generally based on salary and incentive compensation increases.

The sensitivity to changes in the critical assumptions for the Company’s U.S.

plans as of December 31, 2023, is as follows:

44 FORM 10-K SONOCO 2024 ANNUAL REPORT

The sensitivity to changes in the critical assumptions for the Company’s U.S., U.K., and Eviosys plans as of December 31, 2024, is as follows:

($ in millions)

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis