David Savastano, Editor02.15.21
Sonoco reported a strong 2020, and while sales were stable, free cash flow more than quadrupled.
In its financial results for its fourth quarter and full year ending Dec. 31, 2020, fourth-quarter 2020 net sales were $1.38 billion, up from $1.31 billion in 2019. Full-year 2020 net sales were $5.24 billion, compared to $5.37 billion in 2019.
Full-year cash flow from operations was $705.6 million in 2020, compared with $425.9 million in 2019. Free cash flow in 2020 was $349.3 million, compared with $74.3 million in 2019. Base earnings for the first quarter of 2021 are estimated to be in the range of $0.80 to $0.90 per diluted share, compared to $0.94 per diluted share in the first quarter of 2020.
The company will change its operating and reporting structure in 2021 and will begin to report its results in two segments, Consumer Packaging and Industrial Paper Packaging.
"Despite the impact of the pandemic-induced global recession, we quickly refocused operations on accelerating production of food packaging to meet consumers' growing preference for at-home eating, while making adjustments in our industrial-related and protective packaging businesses in response to demand swings,” said Howard Coker, Sonoco president and CEO.
“We developed vitally needed temperature-assured packaging to begin shipping life-saving vaccines and therapeutic drugs to combat the spread of the coronavirus, and we further improved our portfolio by acquiring Can Packaging, a French designer and manufacturer of sustainable paper packaging and related equipment, while divesting our lower-margin Europe contract packaging business,” he added.
"Our Consumer Packaging segment achieved a 47% improvement in operating profit for the quarter, reflecting continued strong food packaging demand, while our Paper and Industrial Converted Products segment reported another sequential improvement in operating profit, although year-over-year results were off by 28%,” Coker said. “In our Protective Solutions segment, we achieved a 42% improvement in operating profit driven by strong customer demand, while our Display and Packaging segment's results were modestly lower due to the divestiture of our Europe contract packaging business.
"Finally, we achieved record cash flow from operations and free cash flow in 2020 reflecting our solid earnings performance and disciplined focus on managing working capital,” Coker concluded. “Sonoco maintains a strong liquidity position and repaid $442 million of debt during the fourth quarter to further support our investment-grade credit rating. Our strong cash flow and balance sheet provide us the flexibility to invest in growing our business both organically and through acquisitions while continuing to return cash to our shareholders through dividends, including our recently announced 4.7% increase."
In its financial results for its fourth quarter and full year ending Dec. 31, 2020, fourth-quarter 2020 net sales were $1.38 billion, up from $1.31 billion in 2019. Full-year 2020 net sales were $5.24 billion, compared to $5.37 billion in 2019.
Full-year cash flow from operations was $705.6 million in 2020, compared with $425.9 million in 2019. Free cash flow in 2020 was $349.3 million, compared with $74.3 million in 2019. Base earnings for the first quarter of 2021 are estimated to be in the range of $0.80 to $0.90 per diluted share, compared to $0.94 per diluted share in the first quarter of 2020.
The company will change its operating and reporting structure in 2021 and will begin to report its results in two segments, Consumer Packaging and Industrial Paper Packaging.
"Despite the impact of the pandemic-induced global recession, we quickly refocused operations on accelerating production of food packaging to meet consumers' growing preference for at-home eating, while making adjustments in our industrial-related and protective packaging businesses in response to demand swings,” said Howard Coker, Sonoco president and CEO.
“We developed vitally needed temperature-assured packaging to begin shipping life-saving vaccines and therapeutic drugs to combat the spread of the coronavirus, and we further improved our portfolio by acquiring Can Packaging, a French designer and manufacturer of sustainable paper packaging and related equipment, while divesting our lower-margin Europe contract packaging business,” he added.
"Our Consumer Packaging segment achieved a 47% improvement in operating profit for the quarter, reflecting continued strong food packaging demand, while our Paper and Industrial Converted Products segment reported another sequential improvement in operating profit, although year-over-year results were off by 28%,” Coker said. “In our Protective Solutions segment, we achieved a 42% improvement in operating profit driven by strong customer demand, while our Display and Packaging segment's results were modestly lower due to the divestiture of our Europe contract packaging business.
"Finally, we achieved record cash flow from operations and free cash flow in 2020 reflecting our solid earnings performance and disciplined focus on managing working capital,” Coker concluded. “Sonoco maintains a strong liquidity position and repaid $442 million of debt during the fourth quarter to further support our investment-grade credit rating. Our strong cash flow and balance sheet provide us the flexibility to invest in growing our business both organically and through acquisitions while continuing to return cash to our shareholders through dividends, including our recently announced 4.7% increase."
