What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-28 compared with 2025-05-02 · 370 added, 158 removed, 395 unchanged (57% of the section changed)

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• improved productivity and cost containment;

• the Company’s acquisition of Titan Holdings I B.V.

(“Eviosys”) and the anticipated benefits of the acquisition, including with respect to market leadership, strategic alignment, customer relationships, sustainability, innovation and cost synergies;

• effects and timing of, and anticipated costs, synergies and gains resulting from our other contemplated, pending, and completed acquisitions, including the Company’s acquisitions of Ball Metalpack Holding, LLC, renamed Sonoco Metal Packaging, the remaining ownership interest in RTS Packaging, LLC, a paper mill in Chattanooga, Tennessee, and Inapel Embalagens Ltda.;

• effects and timing of, and anticipated gains and costs, of the Company’s restructuring and portfolio simplification activities, including with respect to streamlining of the Company’s organizational structure and the Company’s contemplated, pending, and completed divestitures, including the Company’s sale of its Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”), its Protective Solutions business (“Protexic”), and two production facilities in China, and the potential divestiture of the Company’s ThermoSafe business;

• the Company’s integration of Titan Holdings I B.V.

(“Eviosys”) and the Company’s ability to realize the anticipated benefits of the acquisition, including with respect to market leadership, strategic alignment, customer relationships, sustainability, innovation and cost synergies;

• effects and timing of, and anticipated costs, synergies and gains resulting from our other contemplated, pending, and completed acquisitions;

• effects and timing of, and anticipated gains and costs, of the Company’s restructuring and portfolio simplification activities, including with respect to streamlining of the Company’s organizational structure and the Company’s contemplated, pending, and completed divestitures, including the Company’s sale of its Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”), and the potential divestiture of the Company’s ThermoSafe business;

• adequacy and anticipated amounts and uses of cash flows;

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• creation of near-term and long-term value and returns for shareholders;

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• continued payment of dividends;

• planned stock repurchases.

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Such forward-looking statements are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management.

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• ability to satisfy closing conditions and close acquisitions, and to finance such acquisitions on acceptable terms;

• ability to successfully integrate newly acquired businesses, including Eviosys, into the Company’s operations, retain key employees, and realize expected cost savings, synergies and other anticipated benefits relating thereto within the expected time period, or at all;

• the potential impact of acquisitions, including the acquisition of Eviosys, on relationships with customers and other third parties;

• ability to successfully integrate newly acquired businesses, including Eviosys, into the Company’s operations, retain key employees, maintain relationships with customers and other third parties, and realize expected cost savings, synergies and other anticipated benefits relating thereto within the expected time period, or at all;

• availability, transportation and pricing of raw materials, energy and transportation, including the impact of changes in tariffs or sanctions and escalating trade wars, and the impact of war, general regional instability and other geopolitical tensions (such as the ongoing conflict between Russia and Ukraine as well as the economic sanctions related thereto, and the ongoing conflicts in the Middle East), and the Company’s ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;

• costs of labor;

• costs of labor and employment, including the cost of employee and retiree medical, health, and life insurance benefits;

• work stoppages due to labor disputes;

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• success of implementation of new manufacturing technologies and installation of manufacturing equipment, including the startup of new facilities and lines;

• consumer demand for products and changing consumer preferences, including changes related to inflation, tariffs, and other macroeconomic factors;

• consumer demand for products and changing consumer preferences, including changes related to inflation, tariffs, and other macroeconomic factors, and changes in consumer attitudes toward plastic packaging;

• ability to be the low-cost global leader in customer-preferred packaging solutions within targeted segments;

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• foreign currency exchange rate fluctuations, interest rate and commodity price risk and the effectiveness of related hedges;

• cost of employee and retiree medical, health, and life insurance benefits;

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• resolution of income tax contingencies;

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• the adoption of new, or changes in, accounting standards or interpretations;

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• accuracy of assumptions underlying projections related to goodwill impairment testing, and accuracy of management’s assessment of goodwill impairment;

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• changes in laws and regulations relating to packaging for food products and foods packaged therein, other actions and public concerns about products packaged in our containers, or chemicals or substances used in raw materials or in the manufacturing process;

• changing consumer attitudes toward plastic packaging;

• changing climate and greenhouse gas effects;

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• international, national, and local economic and market conditions and levels of unemployment;

• economic disruptions resulting from changing tariff policies and trade wars, war, and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine and the ongoing conflicts in the Middle East), public health events, terrorist activities, and natural disasters;

• economic disruptions resulting from changing tariff policies and trade wars, the overall uncertainty surrounding international trade relations, war,and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine and the ongoing conflicts in the Middle East), public health events, terrorist activities, and natural disasters, and our ability to successfully mitigate any negative impacts of such disruptions;

• inflation and the activities and operations in highly inflationary economies.

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COMPANY OVERVIEW

Sonoco is now a multi-billion dollar global designer, developer, and manufacturer of a variety of highly engineered and sustainable packaging products serving multiple end markets serving some of the world’s best-known brands around the globe from approximately 285 locations in 40 countries.

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 serving some of the world’s best-known brands around the globe from approximately 285 locations in 40 countries.

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.

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The transaction, the largest in the Company’s history, expands Sonoco’s global leadership in metal food can and aerosol packaging and facilitates our ability to partner with global customers to advance innovation and sustainability in metal packaging offerings.

During 2025, Eviosys will complete its transition to the Sonoco brand and operate under the Consumer Packaging segment.

Eviosys operates under the Consumer Packaging segment as Sonoco Metal Packaging EMEA.

Sonoco’s portfolio transformation strategy also includes significant divestitures.

For example, on April 1, 2025, subsequent to the end of the first quarter, the Company completed the sale of TFP to TOPPAN Holdings Inc.

For example, on April 1, 2025, the Company completed the sale of TFP to TOPPAN Holdings Inc.

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

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

As previously disclosed, the Company initiated a review of strategic alternatives for ThermoSafe, its leading temperature-assured packaging business.

As previously disclosed, 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.

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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 continues to work 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.

For example, in July 2025 the Company announced plans to invest $30 million of capital into three rigid paper can facilities in the United States to increase its production capacity in the adhesives and sealants sector.

The investment is intended to improve supply chain reliability and ensure consistent access to materials for customers.

In parallel, the Company has continued to work 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.

Global Trade Developments

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On February 10, 2025, the Administration announced the expansion of Section 232 steel and aluminum tariffs (“Section 232 Tariffs”) on steel and aluminum imported into the United States, effective March 12, 2025, and the termination of the granting of new exclusions to mitigate these tariffs.

As a result, imported steel and aluminum is now subject to a 25% duty.

Further, on April 2, 2025, the Administration announced an across-the-board 10% tariff on imported goods from most countries, with materially higher tariffs imposed on many of the countries, as well as other trade policy changes.

The Administration subsequently suspended the implementation of certain of these trade policy changes, with many of the affected countries expected to negotiate separate trade agreements with the Administration during the suspension.

In response to the Administration’s tariff actions, some countries have announced additional trade measures, including

As a result, imported steel and aluminum is currently subject to a 50% duty.

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reciprocal tariffs, which may continue to give rise to further escalations of trade measures by the United States and impacted countries.

Canada has imposed retaliatory tariffs on goods coming from the United States, including a 25% tariff on a variety of enumerated goods on March 4 and March 13, 2025.

At the same time, Canada has not exempted USMCA-qualified goods from these tariffs on U.S.-origin goods.

Further, on April 2, 2025, the Administration announced reciprocal tariffs on imported goods from most countries.

The reciprocal tariffs were temporarily held at 10% until July 9, 2025, after which date the Administration began announcing higher country-specific tariff rates, which are expected to go into effect August 1.

In response to these tariff actions, Canada imposed retaliatory tariffs on goods coming from the United States, including a 25% tariff on a variety of enumerated goods, and has not exempted USMCA-qualified goods from these tariffs on U.S.-origin goods.

Some of the enumerated goods subject to this tariff include products and materials shipped to Sonoco’s plants in Canada.

The Company intends to claim end-use specific exemptions to mitigate the Canadian retaliatory tariffs where eligible.

While the exact scope of any tariffs or other trade policy changes that will ultimately be implemented is not known at this time, the Company does not currently expect these recently announced tariffs and proposed future tariffs to have a material direct effect on the Company’s profitability or cash flows over the remainder of 2025 because the Company’s manufacturing network is designed to serve local markets, reducing its exposure to cross-border disruptions and tariff-related risks, and while the Company is actively working with its customers to help manage the impacts of higher input costs driven by tariffs, its business model allows for pricing adjustments when necessary.

In addition, the Company believes its transformed portfolio following the Eviosys acquisition and the sale of TFP is significantly more resilient, with over two-thirds of the Company’s sales for the three-month period ended March 30, 2025 coming from the Consumer Packaging segment, a segment that has historically demonstrated strong performance across economic cycles.

In addition, the Company believes its transformed portfolio following the Eviosys acquisition and the sale of TFP is significantly more resilient, with nearly two-thirds of the Company’s sales for the six-month period ended June 29, 2025 coming from the Consumer Packaging segment, a segment that has historically demonstrated strong performance across economic cycles.

In addition, while the Section 232 Tariffs impact input costs for the Company’s U.S.-based metal packaging and rigid paper container businesses (part of the Consumer Packaging segment), which source a portion of their steel and aluminum purchases from outside the United States, the Company intends, and has the contractual ability, to pass such increases in cost due to tariffs to its customers.

The ultimate resolution and consequences of these trade policy developments, and their effect on the Company in uncertain and the Company will continue to monitor the Administration’s trade policy changes closely in order to adapt its strategies and to maintain competitiveness in a challenging market environment.

The ultimate resolution and consequences of these trade policy developments, and their effect on the Company, is uncertain and the Company will continue to monitor the Administration’s trade policy changes closely in order to adapt its strategies and to maintain competitiveness in a challenging market environment.

See “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Other Recent Developments

On July 4, 2025, subsequent to the end of the quarter, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States.

The OBBBA includes a broad range of tax reform provisions, including the extension of key provisions of the Tax Cuts and Jobs Act of 2017.

While the Company is continuing to assess the potential impact of this new legislation, it currently does not expect the OBBBA to have a material impact on its results of operations.

RESULTS OF OPERATIONS

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On December 18, 2024, the Company announced that it had entered into an agreement to sell TFP to Toppan.

This sale was completed on April 1, 2025, subsequent to the end of the first quarter.

This sale was completed on April 1, 2025.

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

Further, the Company reclassified the assets and liabilities of TFP as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets as of March 30, 2025 and December 31, 2024.

The Condensed 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 Quarterly Report on Form 10-Q reflect only the continuing operations of Sonoco unless otherwise noted.

Further, the Company reclassified the assets and liabilities of TFP as assets and liabilities of discontinued operations in the Condensed Consolidated Balance Sheets as of June 29, 2025 and December 31, 2024.

The Condensed Consolidated

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First Quarter 2025 Compared with First Quarter 2024

The following discussion provides a review of results for the three-month period ended March 30, 2025 versus the three-month period ended March 31, 2024.

Consolidated net sales for the first quarter of 2025 were $1.7 billion, a $400.6 million or 30.6% increase from the first quarter of 2024.

The increase was driven by $464.3 million in sales from the Eviosys acquisition in December 2024 and increased sales of $22.2 million as a result of increased selling prices across the Industrial Paper Packaging and Consumer Packaging segments.

These increases were partially offset by a decrease of $51.5 million of sales related to divestitures and a net decline in volume/mix of $9.7 million.

GAAP operating profit for the first quarter of 2025 was $126.9 million, an increase of 74.8% from the $72.6 million reported in the first quarter of 2024.

The increase in GAAP operating profit was primarily due to a $82.5 million increase in gross profit, and a decrease in restructuring related costs of $17.4 million from the prior year, partially offset by an increase of $41.5 million in selling, general and administrative expenses including acquisition and integration costs, and a net loss on dispositions of $4.2 million.

Adjusted Operating Profit for the first quarter of 2025 was $212.7 million, an increase of 63.1% from the $130.4 million reported for the same period in 2024.

GAAP net income attributable to Sonoco for the first quarter of 2025 decreased to $54.4 million, or $0.55 per diluted share, compared to $65.2 million, or $0.66 per diluted share, for the first quarter of 2024.

This decrease was primarily due to the increase in GAAP operating profit as described above, more than offset by an increase in net interest expense, a decrease in GAAP Net Income from discontinued operations, and an increased provision for income taxes as described below.

Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share for the first quarter of 2025 were $136.8 million ($1.38 per diluted share), compared with $111.5 million ($1.12 per diluted share) for the same period in 2024.

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 Quarterly Report on Form 10-Q reflect only the continuing operations of Sonoco unless otherwise noted.

Second Quarter 2025 Compared with Second Quarter 2024

The following discussion provides a review of results for the three-month period ended June 29, 2025 versus the three-month period ended June 30, 2024.

Consolidated net sales for the second quarter of 2025 were $1.9 billion, a $631.6 million or 49.4% increase from the second quarter of 2024.

The increase was primarily driven by $601.3 million in net sales from the December 2024 Eviosys acquisition including the impact of foreign exchange rates and increased net sales of $44.7 million as a result of increased selling prices across the Industrial Paper Packaging and Consumer Packaging segments.

GAAP operating profit for the second quarter of 2025 was $175.7 million, an increase of 83.3% from the $95.8 million reported in the second quarter of 2024.

The increase in GAAP operating profit was primarily due to a $121.0 million increase in gross profit, primarily related to the Eviosys acquisition, and a decrease in restructuring related costs of $8.2 million from the prior year, partially offset by an increase of $42.8 million in selling, general and administrative expenses.

Adjusted Operating Profit for the second quarter of 2025 was $246.9 million, an increase of 74.0% from the $141.9 million reported for the same period in 2024.

GAAP net income attributable to Sonoco for the second quarter of 2025 increased to $493.4 million, or $4.96 per diluted share, compared to $90.8 million, or $0.92 per diluted share, for the second quarter of 2024.

This increase was primarily due to the increase in GAAP operating profit as described above, and the increase in GAAP net income from discontinued operations due to the gain on the sale of the TFP divestiture.

Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share for the second quarter of 2025 were $136.1 million ($1.37 per diluted share), compared with $126.8 million ($1.28 per diluted share) for the same period in 2024.

Costs and Expenses

Cost of goods sold increased by $318.1 million, or 30.7%, in the first quarter of 2025 compared with the first quarter of 2024.

This increase was primarily driven by the Eviosys acquisition, partially offset by the decline in costs from the sale of the Protexic business in April 2024, improved productivity from procurement savings, production efficiencies, fixed cost reduction initiatives, and materials price reductions.

Gross profit margins were flat at 20.7% in each of the first quarter of 2025 and the first quarter of 2024 .

Selling, general and administrative costs increased by $41.5 million, or 24.8%, and were 12.2% of sales in the first quarter of 2025, compared to 12.8% of sales in the first quarter of 2024.

This increase was primarily due to the acquisition of Eviosys and the increase in acquisition, integration, and divestiture-related costs.

Restructuring/Asset impairment charges totaled $13.6 million in the first quarter of 2025, compared with $31.0 million during the same period last year.

The higher cost in the prior year was primarily related to the closure of the Company’s paper mill in Sumner, Washington during the first quarter of 2024.

Cost of goods sold increased by $510.6 million, or 51.4%, in the second quarter of 2025 compared with the second quarter of 2024.

This increase was primarily driven by the Eviosys acquisition.

Gross profit margins decreased from 22.3% in the second quarter of 2024 to 21.3% in the second quarter of 2025 .

Selling, general and administrative costs increased by $42.8 million, or 24.3%, and were 11.5% of sales in the second quarter of 2025, compared to 13.8% of sales in the second quarter of 2024.

This increase reflects a $61.5 million impact from the Eviosys acquisition, partially offset by an $11.0 million decrease in acquisition, integration and divestiture related costs and $7.1 million decrease in employee-related costs.

Restructuring/Asset impairment charges totaled $9.8 million in the second quarter of 2025, compared with $18.0 million during the same period last year.

The decrease was primarily related to the higher cost of restructuring actions in 2024, including the closure of a metal plant in Memphis, Tennessee, part of the Consumer Packaging segment.

Additional information regarding restructuring and asset impairment charges is provided in Note 6 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Loss on divestiture of business and other assets of $4.2 million in the first quarter of 2025 reflects a $5.4 million loss from the sale of the Company’s tube and core operations in Venezuela, partially offset by a $1.2 million gain from the sale of a small construction tube operation in France, both part of the Industrial Paper Packaging segment.

Loss on divestiture of business of $2.1 million in the second quarter of 2025 reflects a $2.1 million loss from the sale of the Asheville recycling operations, a part of the Industrial Paper Packaging segment.

Gain on divestiture of businesses during the second quarter of 2024 included $4.5 million in gains from the sales of the Protexic and S3 businesses.

See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Other expense, net totaled $6.5 million in the first quarter of 2025.

The amount represents charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle primarily within our Consumer Packaging segment.

Net interest expense for the first quarter of 2025 increased to $48.7 million, compared with $27.0 million during the first quarter of 2024.

The increase was primarily due to higher year-over-year debt levels resulting from financing transactions related to the Eviosys acquisition.

The effective tax rates for continuing operations reflected in GAAP net income and Adjusted net income attributable to Sonoco in the first quarter of 2025 were 30.9% and 25.7%, respectively, compared with 18.6% and 26.2%, respectively, in the corresponding prior year quarter.

The increase in the GAAP effective tax rate was primarily due to an adjustment to

Other expenses, net of $6.6 million in the second quarter of 2025 represents charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle primarily within our Consumer Packaging segment.

Other income, net during the second quarter of 2024 was related to the $5.9 million gain upon the fair value remeasurement of one of the Company’s affiliate investments.

See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to the 2024 gain.

Non-operating pension costs decreased $1.2 million during the second quarter of 2025 compared to the corresponding prior year quarter.

This decrease was primarily due to a year-over-year increase in expected return on plan assets and

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record deferred tax liabilities on certain entities considered to be held for sale, as well as discrete non-GAAP charges for which no tax benefit will be realized.

lower amortization and settlement charges during the second quarter of 2025.

Additional information regarding costs of the Company’s retirement plans is provided in Note 13 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Net interest expense for the second quarter of 2025 increased to $60.2 million, compared with $25.6 million during the second quarter of 2024.

The increase was primarily due to higher year-over-year debt levels resulting from financing transactions related to the Eviosys acquisition.

The effective tax rates for continuing operations reflected in GAAP net income and Adjusted net income attributable to Sonoco in the second quarter of 2025 were 37.3% and 25.6%, respectively, compared with 23.3% and 26.2%, respectively, in the corresponding prior year quarter.

The increase in the GAAP effective tax rate was primarily due to tax rate changes on deferred taxes and various other unfavorable tax adjustments.

Discontinued Operations

Net income from discontinued operations totaled $5.2 million for the first quarter of 2025, compared with $29.7 million for the first quarter of 2024.

The decrease in net income is primarily due to the increase in interest expense related to debt required to be repaid upon closure of the sale of TFP.

Net income from discontinued operations totaled $424.5 million for the second quarter of 2025, compared with $33.5 million for the second quarter of 2024.

The increase in net income reflects the gain on divestiture of business offset by lower sales upon completion of the sale of TFP on April 1, 2025.

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.

The following table summarizes net sales attributable to each of the Company’s segments and the All Other group of businesses for the first quarters of 2025 and 2024:

The following table summarizes net sales attributable to each of the Company’s segments and the All Other group of businesses for the second quarters of 2025 and 2024:

Three Months Ended

(Dollars in thousands) March 30, 2025 March 31, 2024 %

(Dollars in thousands) June 29, 2025 June 30, 2024 %

Consumer Packaging $ 1,227,033 $ 583,051 110.5 %

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Net sales $ 1,910,441 $ 1,278,801 49.4 %

The following table summarizes operating profit attributable to each of the Company’s reportable segments, the All Other group of businesses, and Corporate-related activity during the first quarters of 2025 and 2024:

Three Months Ended

(Dollars in thousands) March 30, 2025 March 31, 2024 %

(Dollars in thousands) June 29, 2025 June 30, 2024 %

Operating profit:

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Amortization of acquisition intangibles (44,193) (17,479)

Loss on divestiture of business and other assets

(Loss)/Gain on divestiture of business (2,083) 4,478

Acquisition, integration and divestiture-related costs (11,161) (22,092)

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Other operating income/(expense), net (4,082) 6,922

1,128 (3,468)

Operating profit $ 175,667 $ 95,811 83.3 %

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These products primarily serve the consumer staples market, focused on food, beverage, household, personal, and pharmaceutical products.

Segment sales increased $484.9 million over the corresponding prior year quarter primarily due to increased sales from the 2024 Eviosys acquisition of $464.3 million and increased volumes/mix of $23.3 million.

Year-over-year prices remained fairly flat.

Segment operating profit increased over the corresponding prior year quarter primarily due to operating profits from the Eviosys acquisition of $49.2 million and positive price/cost of $27.1 million.

As a result, segment operating profit margin increased to 13.2% in the first quarter of 2025 from 10.1% in the same period last year.

Segment net sales increased $644.0 million over the corresponding prior year quarter primarily as a result of $601.3 million of net sales, including the impact of foreign exchange rates, from the December 2024 Eviosys acquisition, as well as increased volume/mix of $24.1 million and higher sales prices of $14.8 million.

Segment operating profit increased over the corresponding prior year quarter primarily due to $65.9 million of operating profit from the Eviosys acquisition, strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives of $7.6 million, and increased volume/mix of $3.2 million.

As a result, segment operating profit margin increased to 13.1% in the second quarter of 2025 from 12.7% in the same period last year.

Industrial Paper Packaging

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Products across this segment support end markets, primarily in paper, textile, and films.

Segment sales decreased $35.4 million from the corresponding prior year quarter primarily due to lower sales of $26.0 million from a decline in volume/mix, lower sales of $11.6 million due to the disposition of facilities in China during the fourth quarter of 2024, and $16.4 million unfavorable impact from foreign currency exchange rates.

Segment net sales decreased $12.5 million from the corresponding prior year quarter primarily due to a decline in volume/mix of $25.0 million and the disposition of facilities in China during the fourth quarter of 2024 of $12.6 million.

These headwinds were only partially offset by a $29.9 million increase from higher selling prices.

Segment operating profit increased over the corresponding prior year quarter primarily due to a $10.3 million increase from a positive price/cost environment combined with a $7.3 million increase attributable to strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiative.

These increases were partially offset by a decline of $5.8 million attributable to lower volumes and an unfavorable impact from foreign currency exchange rates.

As a result, segment operating profit margin increased to 12.8% in the first quarter of 2025 from 11.1% in the same period last year.

Segment operating profit increased over the corresponding prior year quarter primarily due to a $19.9 million increase from a positive price/cost environment combined with a $5.1 million increase attributable to strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

These increases were partially offset by a decline of $8.1 million attributable to lower volumes.

As a result, segment operating profit margin increased to 13.8% in the second quarter of 2025 from 11.1% in the same period last year.

The primary products produced within the All Other group of businesses consist of a variety of packaging materials, including plastic, paper, foam, and various other specialty materials serving a wide variety of end markets including consumer staples, consumer discretionary, and industrial.

Sales declined from the same period of the prior year primarily due to the sale of the Protexic business and the decline in volume/mix.

Pricing was flat year over year.

All Other operating profit decreased in the first quarter of 2025 compared to the same period last year, primarily due to volume declines in our Industrial Plastics businesses and the sale of the Protexic business in April 2024.

Net sales improved from the same period of the prior year primarily due to favorable pricing and volumes across the All Other group of businesses.

All Other operating profit decreased in the second quarter of 2025 compared to the same period last year, primarily due to volume declines in our Industrial Plastics business and the sale of the Protexic business in April 2024.

Price/cost was also a headwind from 2024, but this impact was largely offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

As a result, operating profit margin increased to 14.0% in the first quarter of 2025 compared to 12.8% in the same period last year.

As a result, operating profit margin decreased to 13.8% in the second quarter of 2025 compared to 14.6% in the same period last year.

Six Months Ended June 29, 2025 Compared with Six Months Ended June 30, 2024

The following discussion provides a review of results for the six-month period ended June 29, 2025 compared with the six-month period ended June 30, 2024.

Consolidated net sales for the first six months of 2025 were $3.6 billion, a $1.0 billion or 39.9% increase from the same period last year.

The increase was driven by $1.1 billion in net sales from the December 2024 Eviosys acquisition, including the impact of foreign currency exchange rates, and a $66.8 million favorable impact as a result of selling price increases across the Industrial Paper Packaging and Consumer Packaging segments.

These increases were partially offset by the year-over-year loss of $63.1 million in sales due to divestitures not accounted for as discontinued operations.

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GAAP operating profit for the first six months of 2025 was $302.5 million, an increase of 79.7% from the $168.4 million reported for the first six months of 2024.

The increase in GAAP operating profit reflected a $203.6 million increase in gross profit primarily related to the Eviosys acquisition and a decrease in restructuring related costs of $25.6 million from the prior year, partially offset by an increase of $84.3 million in selling, general and administrative expenses, including the amortization of intangible assets, and acquisition and integration costs.

Adjusted operating profit for the first six months of 2025 was $459.7 million, an increase of 68.7% from the $272.4 million reported for the same period in 2024.

GAAP net income attributable to Sonoco for the first six months of 2025 increased to $547.9 million, or $5.51 per diluted share, compared to $156.0 million, or $1.57 per diluted share, reported for the same period of 2024.

This increase reflects the increase in GAAP operating profit as described above and the gain on sale from the TFP divestiture.

Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share for the six-month period ended June 29, 2025 decreased 14.6% to $273.0 million, or $2.74 per diluted share, from $238.3 million, or $2.40 per diluted share, in the six-month period ended June 30, 2024.

Costs and Expenses

Cost of goods sold increased by $828.7 million, or 40.8%, in the first six months of 2025 compared with the first six months of 2024.

This increase was primarily driven by the Eviosys acquisition, partially offset by lower materials pricing and the decline in costs from the sale of the Protexic business in April 2024.

Gross profit margins were 21.0% for the first six months of 2025 and 21.5% for the first six months of 2024 .

Selling, general and administrative costs for the first six months of 2025 increased $84.3 million, or 24.5%, year over year.

This increase reflected $99.5 million of additional costs related to the Eviosys acquisition, partially offset by an $11.0 million decrease in employee-related costs and a $7.2 million decrease in acquisition, integration and divestiture costs.

Restructuring/Asset impairment charges totaled $23.3 million during the first six months of 2025, compared with $49.0 million during the same period last year.

The decrease was primarily related to the higher cost of restructuring actions in 2024, including the closures of a paper mill in Sumner, Washington, part of the Industrial Paper Packaging segment, and a metal plant in Memphis, Tennessee, part of the Consumer Packaging segment.

Loss on divestiture of business of $6.3 million during the first six months of 2025 reflected losses from the sales of the Company’s tube and core operations in Venezuela and the Asheville recycling operations, partially offset by a gain from the sale of a small construction tube operation in France, all part of the Industrial Paper Packaging segment.

Gain on divestiture of businesses during the first six months of 2024 resulted from the sales of the Protexic and S3 businesses.

See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Other expense, net during the first six months of 2025 was $13.1 million, reflecting charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle primarily within our Consumer Packaging segment.

Other income, net during the first six months of 2024 reflected the $5.9 million gain upon the fair value remeasurement of one of the Company’s affiliate investments.

See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information related to the 2024 gain.

Non-operating pension costs decreased by $1.4 million during the first six months year over year.

The decrease is primarily due to higher expected return on plan assets and lower amortization and settlement charges, partially offset by higher interest costs during the first six months of 2025.

GAAP net interest expense during the first six months of 2025 increased to $108.9 million, compared with $52.6 million during the first six months of 2024.

The increase of $56.3 million was primarily due to higher year-over-year debt levels resulting from financing transactions related to the Eviosys acquisition.

The effective tax rates reflected in GAAP net income and Adjusted net income attributable to Sonoco in the first six months of 2025 were 34.8% and 25.7%, respectively, compared with 21.6% and 26.2%, respectively, in the prior-year period.

The increase in the effective tax rate on GAAP net income attributable to Sonoco was primarily due to tax rate changes on deferred taxes and various other unfavorable tax adjustments.

SONOCO PRODUCTS COMPANY

Discontinued Operations

Net income from discontinued operations totaled $429.7 million for the first six months of 2025, compared with $63.3 million for the first six months of 2024.

The increase in net income reflected the gain on the divestiture of TFP, partially offset by lower sales following the completion of the TFP divestiture on April 1, 2025.

Reportable Segments

The following table summarizes net sales attributable to each of the Company’s reportable segments, and the All Other group of businesses during the first six months of 2025 and 2024:

Six Months Ended

(Dollars in thousands) June 29, 2025 June 30, 2024 % Change

Consumer Packaging $ 2,293,626 $ 1,164,721 96.9 %

Industrial Paper Packaging 1,145,948 1,193,830 (4.0) %

Total reportable segments 3,439,574 2,358,551 45.8 %

All Other 180,095 228,886 (21.3) %

Net sales $ 3,619,669 $ 2,587,437 39.9 %

Six Months Ended

(Dollars in thousands) June 29, 2025 June 30, 2024 % Change

Operating profit:

Consumer Packaging $ 301,124 $ 132,323 127.6 %

Industrial Paper Packaging 152,355 132,802 14.7 %

Segment operating profit 453,479 265,125 71.0 %

All Other 25,035 30,990 (19.2) %

Restructuring/Asset impairment charges (23,333) (48,973)

Amortization of acquisition intangibles (86,154) (35,373)

(Loss)/Gain on divestiture of business (6,266) 4,478

Acquisition, integration and divestiture-related costs (38,427) (27,596)

Other corporate costs (18,853) (23,722)

Other operating income/(expense), net (2,954) 3,454

Operating profit $ 302,527 $ 168,383 79.7 %

Consumer Packaging

Segment net sales increased 96.9% year to date compared to the prior-year period, primarily due to net sales of $1.1 billion related to the December 2024 acquisition of Eviosys, a $47.4 million favorable impact from higher volume/mix during the period and a $16.3 million favorable impact from increased pricing.

Year-to-date segment operating profit increased 127.6%, primarily from the Eviosys acquisition of $115.7 million, an increase from strong price/cost initiatives of $28.1 million, improved volume/mix profits of $8.8 million and strong productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives of $8.5 million.

As a result, segment operating profit margin increased from 11.4% in the first six months of 2024 to 13.1% in the first six months of 2025.

Industrial Paper Packaging

Segment net sales declined year to date compared to the prior-year period primarily due to decline in volume/mix of $51.0 million, the decline in sales of $24.2 million related to the divestiture of two China operations during Q4 2024 and the unfavorable impact from foreign currency exchange rates.

These declines were partially offset by the $50.5 million increase in sales prices.

SONOCO PRODUCTS COMPANY

Segment operating profit increased 14.7% versus the prior-year period primarily as a result of improved price/cost trends of $30.1 million and improved productivity from procurement savings, production efficiencies and fixed cost initiatives of $12.4 million.

This was partially offset by unfavorable impacts, primarily from lower volumes and foreign currency translation, totaling $22.9 million.

As a result, segment operating margin increased from 11.1% in the first six months of 2024 to 13.3% in the first six months of 2025.

Net sales for the All Other group of businesses declined 21.3% year to date compared to the prior-year period primarily due to the sale of Protexic and lower volumes in temperature assured packaging.

All Other operating profit declined 19.2% year to date compared to the prior-year period due to the sale of Protexic, lower volumes and negative price/cost, partially offset by higher productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

Segment operating margin increased to 13.9% year to date compared to 13.5% in 2024.

SONOCO PRODUCTS COMPANY

NON-GAAP FINANCIAL MEASURES

5 unchanged sentences

• losses from the early extinguishment of debt;

SONOCO PRODUCTS COMPANY

• non-operating pension costs;

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provision for income taxes;

depreciation, depletion and amortization expense;

depreciation and amortization expense;

non-operating pension costs;

15 unchanged sentences

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.

SONOCO PRODUCTS COMPANY

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.

1 unchanged sentence

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.

SONOCO PRODUCTS COMPANY

Quarterly 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 in the Company’s Condensed Consolidated Statements of Income for the three-month periods ended March 30, 2025 and March 31, 2024.

Adjusted Operating Profit, Adjusted Income Before Income Taxes, Adjusted Provision for Income Taxes, Adjusted Net Income Attributable to Sonoco, and Adjusted Diluted Earnings Per Share (“EPS”)

For the three-month period ended March 30, 2025

For the three-month period ended June 29, 2025

Dollars in thousands, except per share data Operating Profit Income Before Income Taxes Provision for Income Taxes Net Income Attributable to Sonoco Diluted EPS

6 unchanged sentences

Restructuring/Asset impairment charges 9,752 9,752 2,197 7,173 0.07

Loss on divestiture of business and other assets 4,183 4,183 372 3,811 0.04

Loss/(Gain) on divestiture of business 2,083 2,083 514 (422,979) (4.25)

Non-operating pension costs — 2,982 761 2,221 0.02

Net gains from derivatives

(2,949) (2,949) (744) (2,205) (0.02)

Net losses from derivatives 2,154 2,154 548 1,606 0.02

Other adjustments 3

5 unchanged sentences

2 Acquisition, integration and divestiture-related costs relate mostly to the Company’s December 2024 acquisition of Eviosys and the divestiture of the TFP business, which was completed on April 1, 2025.

3 Other adjustments include discrete tax items primarily related to a $3,500 tax expense due to the reduction of the deferred tax asset on the outside basis of certain held-for-sale entities.

For the three-month period ended March 31, 2024

3 Other adjustments include discrete tax items primarily related to tax rate changes on accumulated other comprehensive income (“AOCI”) and rate differences between non-US jurisdictions related to acquisitions/divestitures.

SONOCO PRODUCTS COMPANY

For the three-month period ended June 30, 2024

Dollars in thousands, except per share data Operating Profit Income Before Income Taxes Provision for Income Taxes Net Income Attributable to Sonoco Diluted EPS

5 unchanged sentences

Restructuring/Asset impairment charges 17,963 17,963 2,862 16,116 0.16

Gain on divestiture of business (4,478) (4,478) 1,222 (5,700) (0.06)

Other income, net

— (5,867) — (5,867) (0.06)

Non-operating pension costs — 4,170 1,032 3,138 0.03

6 unchanged sentences

1 Operating profit, income before income taxes, and provision for income taxes exclude results related to discontinued operations of $44,561, $44,091 and $10,551 , respectively.

SONOCO PRODUCTS COMPANY

Adjusted EBITDA 1

Three Months Ended

Dollars in thousands March 30, 2025 March 31, 2024

Dollars in thousands June 29, 2025 June 30, 2024

Net income attributable to Sonoco $ 493,423 $ 90,811

2 unchanged sentences

Provision for income taxes 240,725 27,307

Depreciation, depletion and amortization

121,492 90,559

Depreciation and amortization 129,475 89,486

Non-operating pension costs 2,982 4,170

Net income attributable to noncontrolling interests 60 96

Net (loss)/income attributable to noncontrolling interests (224) 140

Restructuring/Asset impairment charges 9,752 19,250

Changes in LIFO inventory reserves 1,193 (1,418)

Loss on divestiture of business and other assets 4,183 —

Gain on divestiture of business (623,690) (4,478)

Acquisition, integration and divestiture-related costs 11,161 22,269

Net gains from derivatives

(2,949) (286)

Other income, net

Net losses/(gains) from derivatives 2,154 (3,485)

Other non-GAAP adjustments

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Segment operating profit is the measure of segment profit or loss reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance in accordance with Accounting Standards Codification 280, “Segment Reporting,” as prescribed by the Financial Accounting Standards Board.

SONOCO PRODUCTS COMPANY

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

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and certain other items that were excluded from segment and All Other operating profit.

SONOCO PRODUCTS COMPANY

Segment and All Other Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation

For the Three Months Ended March 30, 2025

For the Three Months Ended June 29, 2025

Excludes results of discontinued operations

1 unchanged sentence

Segment and Total Operating Profit $ 160,353 $ 81,231 $ 13,109 $ (79,026) $ 175,667

Depreciation, depletion and amortization 1

Depreciation and amortization 1

52,801 29,838 2,643 44,193 129,475

Other expense, net 2

Other expense 2

— — — (6,559) (6,559)

Equity in (loss)/earnings of affiliates, net of tax

Equity in earnings of affiliates, net of tax

170 2,100 — — 2,270

5 unchanged sentences

— — — 11,161 11,161

Loss on divestiture of business and other assets 6

Loss on divestiture of business 6

— — — 2,083 2,083

Net gains from derivatives 7

Net loss from derivatives 7

— — — 2,154 2,154

7 unchanged sentences

2 These expenses relate to charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle, primarily within the Consumer Packaging segment.

3 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $1,220 and the Industrial Paper Packaging segment of $12,401, and a gain in the All Other group of businesses of $40.

3 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $1,479, the Industrial Paper Packaging segment of $8,228, and the All Other group of businesses of $5.

4 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $1,193.

5 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $1,137 and the Industrial Paper Packaging segment of $213.

6 Included in Corporate are losses on the divestiture of businesses associated with the Industrial Paper Packaging segment of $4,183 related to the sale of a production facility in France and the entirety of our business in Venezuela.

7 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(284), the Industrial Paper Packaging segment of $(2,552), and the All Other group of businesses of $(113).

6 Included in Corporate is a $2,083 loss on the sale of a recycling facility in Asheville, North Carolina associated with the Industrial Paper Packaging segment .

7 Included in Corporate are net losses from derivatives associated with the Consumer Packaging segment of $208, the Industrial Paper Packaging segment of $1,864, and the All Other group of businesses of $82.

SONOCO PRODUCTS COMPANY

Segment and All Other Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Excludes results of discontinued operations

1 unchanged sentence

Segment and Total Operating Profit $ 73,756 $ 66,958 $ 13,865 $ (58,768) $ 95,811

Depreciation, depletion and amortization 1

Depreciation and amortization 1

25,232 28,641 2,717 17,479 74,069

6 unchanged sentences

— — — 22,092 22,092

Gain on divestiture of business 5

— — — (4,478) (4,478)

Net gains from derivatives 6

1 unchanged sentence

Other non-GAAP adjustments — — — (2,019) (2,019)

Segment Adjusted EBITDA $ 99,023 $ 97,838 $ 16,582 $ (12,634) $ 200,809

Net Sales $ 583,051 $ 600,770 $ 94,980

Segment Operating Profit Margin 12.7 % 11.1 % 14.6 %

Segment Adjusted EBITDA Margin 17.0 % 16.3 % 17.5 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $11,042, the Industrial Paper Packaging segment of $6,231, and the All Other group of businesses of $206.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $9,876, the Industrial Paper Packaging segment of $7,737, and the All Other group of businesses of $214.

3 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $(462) and the Industrial Paper Packaging segment of $(956).

4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Industrial Paper Packaging segment of $215.

5 Included in Corporate are gains from the divestiture of businesses including $(1,250) from the sale of the Sonoco Sustainability Solutions (“S3”) business, part of the Industrial segment, and $(3,228) from the sale of the Protective Solutions business, part of the the All Other group of businesses.

6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(540), the Industrial Paper Packaging segment of $(2,278), and the All Other group of businesses of $(667).

SONOCO PRODUCTS COMPANY

Year-to-Date 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 in the Company’s Condensed Consolidated Statements of Income for the six-month periods ended June 29, 2025 and June 30, 2024.

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 six-month period ended June 29, 2025

Dollars in thousands, except per share data Operating Profit Income Before Income Taxes Provision for Income Taxes Net Income Attributable to Sonoco Diluted EPS

As Reported 1

$ 302,527 $ 174,424 $ 60,647 $ 547,852 $ 5.51

Acquisition, integration and divestiture-related costs 2

38,427 38,427 8,757 39,336 0.40

Changes in LIFO inventory reserves 1,755 1,755 433 1,322 0.01

Amortization of acquisition intangibles 86,154 86,154 19,005 66,936 0.67

Restructuring/Asset impairment charges 23,333 23,333 5,397 17,888 0.18

Loss/(Gain) on divestiture of business 3

6,266 6,266 886 (419,168) (4.21)

Non-operating pension costs — 6,103 1,559 4,544 0.05

Net gains from derivatives

(795) (795) (196) (599) (0.01)

Other adjustments 4

1,994 1,994 (9,804) 14,844 0.14

Total adjustments 157,134 163,237 26,037 (274,897) (2.77)

Adjusted $ 459,661 $ 337,661 $ 86,684 $ 272,955 $ 2.74

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 $663,564, $638,752, and $209,032, respectively.

2 Acquisition, integration and divestiture related costs relate mostly to the Company’s December 2024 acquisition of Eviosys and the April 2025 divestiture of TFP.

3 Loss/(gain) on divestiture of business primarily consists of the gain on the sale of the Company’s Thermoformed and Flexibles Packaging business, included in “Net income from discontinued operations” in the Company’s Condensed Consolidated Statements of Income.

4 Other adjustments include discrete tax items primarily related to tax rate changes on AOCI and rate differences between non-U.S.

jurisdictions related to acquisitions/divestitures.

SONOCO PRODUCTS COMPANY

For the six-month period ended June 30, 2024

Dollars in thousands, except per share data Operating Profit Income Before Income Taxes Provision for Income Taxes Net Income Attributable to Sonoco Diluted EPS

As Reported 1

$ 168,383 $ 114,139 $ 24,627 $ 155,988 $ 1.57

Acquisition, integration and divestiture-related costs 27,596 27,596 7,064 20,772 0.21

Changes in LIFO inventory reserves (987) (987) (248) (739) (0.01)

Amortization of acquisition intangibles 35,373 35,373 8,703 34,342 0.35

Restructuring/Asset impairment charges 48,973 48,973 9,841 40,702 0.41

Gain on divestiture of business (4,478) (4,478) 1,222 (5,700) (0.06)

Other income, net — (5,867) — (5,867) (0.06)

Non-operating pension costs — 7,465 1,855 5,610 0.06

Net gains from derivatives (3,771) (3,771) (948) (2,823) (0.03)

Other adjustments 2

1,304 1,726 5,635 (4,035) (0.04)

Total adjustments 104,010 106,030 33,124 82,262 0.83

Adjusted $ 272,393 $ 220,169 $ 57,751 $ 238,250 $ 2.40

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 $84,442, $83,341, and $20,040, respectively.

2 Other adjustments includes discrete tax items primarily related to a $4,455 adjustment to deferred taxes from the post-acquisition restructuring of the partitions business.

Adjusted EBITDA 1

Six Months Ended

Dollars in thousands June 29, 2025 June 30, 2024

Net income attributable to Sonoco $ 547,852 $ 155,988

Interest expense 145,305 60,860

Interest income (11,751) (7,113)

Provision for income taxes 269,679 44,667

Depreciation and amortization 250,967 180,045

Non-operating pension costs 6,103 7,465

Net (loss)/income attributable to noncontrolling interests

Restructuring/Asset impairment charges 23,759 50,868

Changes in LIFO inventory reserves 1,755 (987)

Gain on divestiture of business (619,507) (4,478)

Acquisition, integration and divestiture-related costs 51,103 27,930

Other income, net

Net gains from derivatives (795) (3,771)

Other non-GAAP adjustments 1,381 1,124

Adjusted EBITDA $ 665,687 $ 506,967

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

SONOCO PRODUCTS COMPANY

The following tables reconcile segment operating profit, the closest GAAP measure of profitability, to Segment Adjusted EBITDA.

Segment and All Other Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation

For the Six Months Ended June 29, 2025

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

Segment and Total Operating Profit $ 301,124 $ 152,355 $ 25,035 $ (175,987) $ 302,527

Depreciation and amortization 1

101,756 58,171 5,197 86,154 251,278

Other expense 2

— — — (13,076) (13,076)

Equity in earnings of affiliates, net of tax 119 4,072 — — 4,191

Restructuring/Asset impairment charges 3

— — — 23,333 23,333

Changes in LIFO inventory reserves 4

— — — 1,755 1,755

Acquisition, integration and divestiture-related costs 5

— — — 38,427 38,427

Loss on divestiture of business 6

— — — 6,266 6,266

Net gains from derivatives 7

— — — (795) (795)

Other non-GAAP adjustments — — — 1,994 1,994

Segment Adjusted EBITDA $ 402,999 $ 214,598 $ 30,232 $ (31,929) $ 615,900

3 unchanged sentences

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $74,835, the Industrial Paper Packaging segment of $10,920, and the All Other group of businesses of $399.

3 Included in Corporate are restructuring/asset impairment charges/(income) associated with the Consumer Packaging segment of $2,709, the Industrial Paper Packaging segment of $20,763, and the All Other group of businesses of $(27).

4 Included in Corporate are changes in LIFO inventory reserves associated with the Consumer Packaging segment of $1,755.

5 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $21,209 and the Industrial Paper Packaging segment of $431.

6 Included in Corporate are net losses on the divestiture of businesses associated with the Industrial Paper Packaging segment of $6,266, including a loss of $2,083 from the sale of a recycling facility in Asheville, N.C.

and losses totaling $4,183 related to the sale of a production facility in France and the entirety of our business in Venezuela.

7 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(76), the Industrial Paper Packaging segment of $(688), and the All Other group of businesses of $(31).

SONOCO PRODUCTS COMPANY

Segment and All Other Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation

For the Six Months Ended June 30, 2024

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

Segment and Total Operating Profit $ 132,323 $ 132,802 $ 30,990 $ (127,732) $ 168,383

Depreciation and amortization 1

50,129 57,144 6,369 35,373 149,015

Equity in earnings of affiliates, net of tax 47 3,364 — — 3,411

Restructuring/Asset impairment charges 2

— — — 48,973 48,973

Changes in LIFO inventory reserves 3

— — — (987) (987)

Acquisition, integration and divestiture-related costs 4

— — — 27,596 27,596

Gain on divestiture of business 5

— — — (4,478) (4,478)

Net gains from derivatives 6

— — — (3,771) (3,771)

Other non-GAAP adjustments — — — 1,304 1,304

Segment Adjusted EBITDA $ 182,499 $ 193,310 $ 37,359 $ (23,722) $ 389,446

Net Sales $ 1,164,721 $ 1,193,830 $ 228,886

Segment Operating Profit Margin 11.4 % 11.1 % 13.5 %

Segment Adjusted EBITDA Margin 15.7 % 16.2 % 16.3 %

1 Included in Corporate is the amortization of acquisition intangibles associated with the Consumer Packaging segment of $22,099, the Industrial Paper Packaging segment of $12,862, and the All Other group of businesses of $412.

2 Included in Corporate are restructuring/asset impairment charges associated with the Consumer Packaging segment of $14,193, the Industrial Paper Packaging segment of $30,340, and the All Other group of businesses of $1,362.

1 unchanged sentence

4 Included in Corporate are acquisition, integration and divestiture-related costs associated with the Consumer Packaging segment of $(281) and the Industrial Paper Packaging segment of $871.

5 Included in Corporate are gains from the divestiture of businesses, including $(1,250) from the sale of the S3 business, part of the Industrial Paper Packaging segment, and $(3,228) from the sale of the Protective Solutions business, part of the the All Other group of businesses.

6 Included in Corporate are net gains from derivatives associated with the Consumer Packaging segment of $(583), the Industrial Paper Packaging segment of $(2,467), and the All Other group of businesses of $(721).

1 unchanged sentence

Financial Position, Liquidity and Capital Resources

Operating activities used cash of $208.1 million in the first three months of 2025 , while they provided cash of $166.2 million in the same period of 2024, a year-over-year decrease of $374.3 million.

GAAP net income decreased by $10.8 million year over year as described in the “Results of Operations” section above.

Net working capital used $309.4 million of cash in the first three months of 2025, while providing $0.8 million in the same period of 2024, for a year-over-year decrease in operating cash flow of $310.1 million.

Accounts receivable used $21.0 million more cash during the first three months of 2025 than in the same period of 2024 as a result of the impact of the changing mix in customer payment terms combined with higher revenues year over year.

Inventory was a use of cash of $110.2 million in the first three months of 2025, while it was a source of cash of $18.4 million in the same period of 2024 due to higher overall inventory levels, mainly in tinplate steel, the impacts of inflation, and seasonality.

Accounts payable used cash of $134.9 million in the first three months as compared to a provision of cash of $25.7 million in the same period of 2024 due to timing of purchases and scheduled payments.

Operating activities used cash of $14.7 million in the first six months of 2025 , while providing cash of $275.5 million in the same period of 2024, a year-over-year decrease of $290.1 million.

GAAP net income increased by $391.5 million year over year, primarily as a result of the gain on the divestiture of TFP, partially offset by higher depreciation and amortization.

Net working capital used $263.4 million of cash in the first six months of 2025, while using $29.2 million in the same period of 2024, for a year-over-year decrease in operating cash flow of $234.2 million.

Accounts receivable used $34.8 million less cash during the first six months of 2025 than in the same period of 2024 as a result of the impact of the changing mix in customer payment terms and strong focus on cash management.

Inventory used cash of $203.8 million in the first six months of 2025, while it provided cash of $15.4 million in the same period of 2024 due to higher overall inventory levels, mainly in tinplate steel, reflecting the impacts of both inflation and seasonality.

Accounts payable provided cash of $8.1 million in the first six months of 2025 and provided cash of $57.9 million in the same period of 2024 due to timing of purchases and scheduled payments.

The Company has continued to actively manage inventories and review payment terms with customers and suppliers to address risk and balance economic benefit.

Changes in accrued expenses and other assets and liabilities used cash totaling $100.2 million in the first three months of 2025 and $7.1 million in the same period of 2024, for a year-over-year increase in use of cash of $93.2 million.

The primary drivers contributing to the change include the higher year-over-year payments related to management incentive compensation of $24.3 million, interest of $22.1 million, and the Company’s restructuring initiatives of $16.8 million.

Investing activities used $88.6 million of cash in the first three months of 2025, compared with $81.7 million in the same period of 2024, a higher year-over-year use of cash of $6.9 million, primarily attributable to higher capital expenditures.

Capital expenditures during the first three months of 2025 totaled $92.7 million, a $6.2 million increase year over year.

Proceeds from divestitures provided $3.5 million in the first three months of 2025, including $2.0 million of proceeds related to the July 1, 2023 sale of the Company’s U.S.

BulkSak business released from escrow in February 2025 and $1.5 million of proceeds from the sale of a small construction tube operation in France.

Financing activities provided $29.6 million of cash in the three-month period ended March 30, 2025, compared with using $62.7 million of cash in the corresponding prior-year period.

The primary driver of the $92.3 million year-over-year increase was the receipt of proceeds from the issuance of commercial paper of $528.0 million, partially offset by $448.8 million in net debt repayments during the first three months of 2025, including the repayment upon maturity of the $400 million aggregate principal amount of the Company’s 1.800% note s due February 2025.

N et debt repayments in the first quarter of 2024 were $1.8 million.

Cash used to pay dividends increased by $1.1 million year over year, reflecting the increase in the quarterly dividend payment from $0.51 per share to $0.52 per share, which increase was approved by the Company’s Board of Directors in April 2024.

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 $10.6 million in the three-month period ended March 30, 2025, compared to $9.1 million in the corresponding prior-year period.

During the three-month period ended March 30, 2025, the Company reported a net increase in cash and cash equivalents of $15.7 million due to currency translation adjustments resulting from a weaker U.S.

dollar relative to certain foreign currencies in which cash and cash equivalents were held.

Changes in accrued expenses and other assets and liabilities used $98.2 million of cash in the first six months of 2025 and $3.7 million of cash in the same period of 2024, for a higher year-over-year use of cash of $94.5 million.

The primary drivers contributing to the change include higher year-over-year payments related to management incentive compensation of $30.3 million, interest of $14.2 million, and restructuring initiatives of $14.9 million.

Additionally, prepaid expenses provided $9.0 million of cash in 2025 and used $51.1 million of cash in 2024, reflecting lower advance payments year over year for steel purchases from China.

Income taxes payable provided $198 million of cash in 2025, compared to $6.6 million in 2024, primarily due to the gain from the sale of TFP business, and the deferral of the majority of the related payment to the second half of 2025.

Investing activities provided $1,645.3 million of cash in the first six months of 2025, compared with using $96.6 million in the same period of 2024.

The higher year-over-year provision of cash of $1,741.9 million was primarily the result of the sale of the Company’s TFP business on April 1, 2025 for which the Company received net cash proceeds totaling $1,807.5 million, and a final working capital settlement of $16.5 million related to the December 2024 acquisition of Eviosys.

Proceeds from sale of businesses in the first six months of 2024 were $81.5 million, primarily from the sale of the Company’s Protexic business.

Capital expenditures during the first six months of 2025 totaled $187.5 million, a $7.8 million increase year over year.

Financing activities used $1,776.8 million and $178.0 million of cash in the six-month periods ended June 29, 2025 and June 30, 2024, respectively.

The primary driver of the $1,598.8 million higher year-over-year use of cash was net debt repayments totaling $1,668.9 million during the first six months of 2025, including the repayment upon maturity of the $400 million aggregate principal amount of the Company’s 1.800% notes due February 2025, largely funded by commercial paper borrowings, and the April 2025 repayment of the outstanding $1,500 million principal amount of borrowings under its 364-day term loan facility and a portion of its outstanding commercial paper borrowings using cash proceeds from the sale of TFP.

Net debt repayments in the first six months of 2024 were $80.2 million.

Cash used to pay dividends increased by $2.2 million year over year, reflecting the increase in the quarterly dividend payment from $0.52 per share to $0.53 per share approved by the Company’s Board of Directors in April 2025.

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 $10.6 million in the six-month period ended June 29, 2025, compared to $9.2 million in the corresponding prior-year period.

During the six-month period ended June 29, 2025, the Company reported a net increase in cash and cash equivalents of $32.9 million due to currency translation adjustments resulting from a weaker U.S.

dollar relative to the majority of the foreign currencies in which the Company’s cash and cash equivalents were held.

The Company’s cash balances are held in numerous locations throughout the world.

At March 30, 2025 and December 31, 2024, approximately $161.4 million and $190.1 million, respectively, of the Company’s reported cash and cash equivalents balances of $181.8 million and $431.0 million, respectively, were held outside of the United States by its foreign subsidiaries.

At June 29, 2025 and December 31, 2024, approximately $174.1 million and $190.1 million, respectively, of the Company’s reported cash and cash equivalents balances of $329.8 million and $431.0 million, respectively, were held outside of the United States by its foreign subsidiaries.

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

SONOCO PRODUCTS COMPANY

The Company uses a notional pooling arrangement with an international bank to help manage global liquidity requirements.

Under this pooling arrangement, the Company and its participating subsidiaries may maintain either a cash deposit or borrowing position through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit.

Under this pooling arrangement, the Company and its participating subsidiaries may maintain either a cash deposit or a borrowing position through local currency accounts with the bank, so long as the aggregate position of the global pool is a notionally calculated net cash deposit.

Because it maintains a security interest in the cash deposits and has the right to offset the cash deposits against the borrowings, the bank provides the Company and its participating subsidiaries favorable interest terms on both the cash deposit and borrowing positions.

SONOCO PRODUCTS COMPANY

The Company maintains a revolving credit facility with total commitments of $1.25 billion and a maturity date of May 3, 2029.

The Company’s $1.25 billion commercial paper program is supported by the revolving credit facility.

At March 30, 2025 , the Company had $528.0 million in commercial paper balances outstanding;

accordingly, the committed capacity available for drawdown under its revolving credit facility at March 30, 2025 was $722.0 million.

At June 29, 2025 , the Company had $354.6 million in commercial paper balances outstanding;

accordingly, the committed capacity available for drawdown under its revolving credit facility at June 29, 2025 was $895.4 million.

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.

On February 3, 2025, the Company repaid the $400 million aggregate principal amount of its 1.800% notes due February 2025 upon maturity using proceeds from the issuance of commercial paper.

At March 30, 2025, the Company had scheduled debt maturities of approximately $2.15 billion over the next twelve months.

On April 1, 2025, subsequent to the end of the three-month period ended March 30, 2025 , the Company completed the sale of TFP and used a portion of the cash proceeds from the sale to repay the outstanding $1.50 billion principal amount of borrowings under its 364 -day term loan facility.

On April 3, 2025, the Company repaid the outstanding $1.50 billion principal amount of borrowings under its 364 -day term loan facility using a portion of the cash proceeds from the sale of TFP.

At June 29, 2025, the Company had scheduled debt maturities of approximately $437 million over the next twelve months.

The Company believes that cash and cash equivalents on hand, expected net cash flows generated from operating and investing activities, available capacity under the Company’s increased borrowing arrangements, and proceeds from potential divestitures, will provide sufficient liquidity to cover the remaining debt maturities and other cash flow needs of the Company over the next twelve months and beyond.

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The most restrictive covenants currently require the Company to maintain a minimum level of interest coverage and a minimum level of net worth, as defined in the agreements.

As of March 30, 2025 , the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

As of June 29, 2025 , the Company’s interest coverage and net worth were substantially above the minimum levels required under these covenants.

The Company continually explores strategic acquisition opportunities that may result in the use of cash.

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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.

SONOCO PRODUCTS COMPANY

The economy in Venezuela has been considered highly inflationary under U.S.

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As a result, the Company sold its operations in Venezuela during the first quarter of 2025, recognizing a loss in the amount of $5.4 million, including $3.8 million of cumulative translation losses that were reclassified from accumulated other comprehensive income.

SONOCO PRODUCTS COMPANY

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

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dollars with changes recorded through earnings.

The cumulative impact of applying highly inflationary accounting to Turk ey has been a pretax charge to earnings of $8.5 million ($6.5 million after tax), including $0.6 million ($0.4 million after tax) during th e three-month period ended March 30, 2025.

The cumulative impact of applying highly inflationary accounting to Turk ey has been a pretax charge to earnings of $8.1 million ($6.3 million after tax), including $0.2 million ($0.2 million after tax) during th e six-month period ended June 29, 2025.

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.

However, the Company believes its exposure is limited to its net investment in Turkey, which was approximat ely $51.5 million as of March 30, 2025.

However, the Company believes its exposure is limited to its net investment in Turkey, which was approximat ely $48 million as of June 29, 2025.

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 March 30, 2025, t he Company had derivative contracts outstanding to hedge the prices on a portion of anticipated aluminum purchases.

At June 29, 2025, t he Company had derivative contracts outstanding to hedge the prices on a portion of anticipated aluminum purchases.

These contracts, some of which qualify as cash flow hedges, include aluminum swaps totaling 8,740 metric tons.

The total fair value of the Company’s commodity cash flow hedges netted to gain positions of $0.1 million and $0.7 million at March 30, 2025 and December 31, 2024, respectively.

The amount of the gain included in accumulated other comprehensive income at March 30, 2025 expected to be reclassified to the income statement during the next twelve months is $0.1 million.

The total fair value of the Company’s commodity cash flow hedges netted to a loss position of $0.3 million and a gain position of $0.7 million at June 29, 2025 and December 31, 2024, respectively.

The amount of the loss included in accumulated other comprehensive income at June 29, 2025 expected to be reclassified to the income statement during the next twelve months is $0.3 million .

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.

T he total market value of these instruments resulted in a net gain position of $1.1 million and a net loss position of $1.8 million at March 30, 2025 and December 31, 2024, respectively .

In addition, at March 30, 2025, the Company had various currency contracts outstanding to hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables.

T he total market value of these instruments resulted in a net gain po sition of $1.2 million and a net loss position of $1.8 million at June 29, 2025 and December 31, 2024, respectively .

In addition, at June 29, 2025, 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.

The fair value of the Company’s non-designated deriva tives position was a gain of $3.0 million and a loss of $2.7 million at March 30, 2025 and December 31, 2024, respectively.

The fair value of the Company’s non-designated deriva tives position was a gain o f $4.3 million and a loss of $2.7 million at June 29, 2025 and December 31, 2024, respectively.

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.

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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 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.

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

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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.”

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

SONOCO PRODUCTS COMPANY

Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500 million in April 2024 to effectively convert a portion of the Company’s fixed-rate U.S.

Following the unwind of the swaps, in April 2024 the Company entered into new cross-currency swap agreements with a total notional amount of $500 million, maturing on May 1, 2027, 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 maturing on September 1, 2026, $500 million maturing on September 1, 2029, and $500 million maturing on May 1, 2030.

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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.

On June 30, 2025, subsequent to the end of the second quarter, the Company entered into additional cross-currency swap agreements with a total notional amount of $285 million, maturing on February 1, 2027.

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.

All of the Company’s cross-currency swap agreements are designated as net investment hedges for accounting purposes and have the risk management objective of managing foreign currency risk relating to net investments in certain European subsidiaries denominated in euros.

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 Condensed Consolidated Statements of Income.

Net interest receivables for the cross-currency swaps totaling $9.1 million and $18.1 million for the three and six months ended June 29, 2025 are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Condensed 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.

The fair value of the Company’s net investment hedges was a loss position of $49.2 million and a gain position of $11.9 million at March 30, 2025 and December 31, 2024, respectively.

Foreign currency translation loss of $36.7 million (net of income taxes of $12.6 million) and gain of $8.9 million (net of income taxes of $3.0 million) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at March 30, 2025 and December 31, 2024, respectively.

The fair value of the Company’s net investment hedges was a loss position of $218.2 million and a gain position of $11.9 million at June 29, 2025 and December 31, 2024, respectively.

Foreign currency translati on loss of $162.6 million (net of income taxes of $55.7 million ) and gain of $8.9 million (net of income taxes of $3.0 million) were reported as components of “Accumulated other comprehensive income/(loss)” within “Foreign currency items” at June 29, 2025 and December 31, 2024, respectively.

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 Condensed Consolidated Balance Sheet as of March 30, 2025 .

During the first three months of 2025, the U.S.

dollar weakened against the euro, the British pound, the Moroccan dirham, the Polish zloty, the Brazilian real, the Danish krone, the Mexican peso, and the Colombian peso, all of which are functional currencies in which a large amount of the Company’s foreign investments are held.

During this same period, the U.S.

dollar strengthened against the Indonesia rupiah and the Chinese yuan.

The net impact of these changes, and the changes in the net investment hedge discussed above, resulted in a net translation gain of $172.1 million being recor ded in “Accumulated other comprehensive loss” during the three-month period ended March 30, 2025.

The preferred stock balance of $21.2 million is included in “Other assets” in the Company’s Condensed Consolidated Balance Sheet as of June 29, 2025 .

During the first six months of 2025, the U.S.

dollar weakened appreciably against most of the functional currencies in which the Company’s foreign investments are held, including the euro, the British pound, the Moroccan dirham, the Polish zloty, and the Mexican peso .

The impact of these changes, and the changes in the net investment hedge discussed above, resulted in a net translation gain of approximately $462 million being recor ded in “Accumulated other comprehensive income/(loss)” during the six-month period ended June 29, 2025.

Restructuring and Impairment

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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-Q

Item 2. Management’s Discussion and Analysis