HARTSVILLE, S.C., Feb. 11, 2021-- Sonoco(NYSE: SON), one of the largest diversified global packaging companies, today reported financial results for its fourth quarter and full year, both ending December 31, 2020.
Fourth-Quarter and Full-Year Highlights
- Fourth-quarter 2020 GAAP loss per diluted share was
$(0.12), compared with GAAP earnings per diluted share of $0.44in 2019. Full-year 2020 GAAP earnings per diluted share were $2.05, compared to $2.88in 2019.
- 2020 fourth-quarter results include net after-tax charges of
$0.94per diluted share. The main components of these charges were $0.56related to non-cash asset impairments and $0.17from the loss on the divestiture of the Company's Europecontract packaging business. Additionally, the net charges include restructuring, non-operating pension and acquisition/divestiture costs. Prior-year results included net after-tax charges of $0.31per diluted share mostly due to asset impairments, restructuring actions, non-operating pension costs and acquisition costs.
- Base net income attributable to
Sonoco(base earnings) for the quarter was $0.82per diluted share, compared with $0.75in 2019. Full-year 2020 base earnings per diluted share were $3.41, compared to $3.53in 2019. (See base earnings definition, explanation and reconciliation to GAAP earnings later in this release.) Sonocopreviously provided fourth-quarter and full-year 2020 base earnings guidance of $0.70to $0.80and $3.29to $3.39per diluted share, respectively.
- Fourth-quarter 2020 net sales were
$1.38 billion, up from $1.31 billionin 2019. Full-year 2020 net sales were $5.24 billion, compared to $5.37 billionin 2019.
- Full-year cash flow from operations was
$705.6 millionin 2020, compared with $425.9 millionin 2019. Free cash flow in 2020 was $349.3 million, compared with $74.3 millionin 2019. (See free cash flow definition and reconciliation to cash flow from operations later in this release.)
November 30, 2020, Sonocosold its Europecontract packaging business, part of the Display and Packagingsegment, for $120 millionin cash, net of working capital and other adjustments.
First-Quarter and Full-Year 2021 Guidance
- Base earnings for the first quarter of 2021 are estimated to be in the range of
$0.80to $0.90per diluted share, compared to $0.94per diluted share in the first quarter of 2020.
- Full-year 2021 base earnings are expected to be in the range of
$3.40to $3.60per diluted share.
- Full-year 2021 cash flow from operations and free cash flow are expected to be between
$570 millionto $600 millionand $270 millionto $300 million, respectively. See details later in this release which include a change to the definition of free cash flow.
- The Company will change its operating and reporting structure in 2021 and will begin to report its results in two segments,
Consumer Packagingand Industrial Paper Packaging. The Company's remaining businesses which will primarily consist of our healthcare and protective packaging businesses will be reported as "All Other" in our future earnings releases and financial statements. The Company has determined this reporting structure appropriately represents the management of its business portfolio going forward.
Note: First-quarter and full-year 2021 GAAP guidance are not provided in this release due to the likely occurrence of one or more of the following, the timing and magnitude of which we are unable to reliably forecast: gains or losses on the sale of businesses or other assets, restructuring actions, asset impairment charges, acquisition/divestiture costs, certain income tax related events and other items. These items could have a significant impact on the Company's future GAAP financial results.
Commenting on the Company’s full-year and fourth-quarter results,
"In the fourth quarter, our businesses performed well as we exceeded the high end of our base earnings guidance and volume/mix drove a 4 percent improvement in sales growth. Some of this is the impact of two additional days in the current-year quarter, but a strong volume/mix improvement, nonetheless. Our
"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.