SONOCO PRODUCTS CO (SON) FY 2024 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is intended to help the reader understand the Company, its operations and its present business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this Form 10-K. The MD&A contains forward-looking statements, including, without limitation, statements relating to the Company’s plans, strategies, objectives, expectations, intentions and resources. Such forward-looking statements should be read in conjunction with our disclosures under “Forward-Looking Statements” and under “Item 1A. Risk Factors” of this Annual Report on Form 10-K.

The Company’s financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Sonoco’s management considers a variety of both GAAP and non-GAAP financial and operating measures in assessing the Company’s financial performance. The key GAAP measures used are net sales, operating profit, gross profit margin, net income attributable to Sonoco and diluted earnings per share. The key non-GAAP measures used are Adjusted operating profit, Adjusted net income attributable to Sonoco, Adjusted diluted earnings per share, and Adjusted EBITDA. For information about the Company’s use of non-GAAP measures and reconciliations of these measures to the most directly comparable GAAP measures see “Non-GAAP Financial Measures” below.

Management may also assess year-over-year changes in operating performance in terms of productivity savings or usage, which is driven by procurement savings or losses, production efficiencies or inefficiencies and the effect of fixed cost reduction initiatives. Management views productivity as a measure of operational excellence of the business and uses it to evaluate improvements in manufacturing efficiency, including automation, and other fixed and variable cost reduction initiatives. Management provides investors with this information to evaluate Sonoco’s operating results in a manner similar to how management evaluates operating performance. The Company calculates productivity savings as the difference between applicable current period costs and prior year costs, excluding the impact of estimated inflation or deflation, and volume changes where appropriate.

Discontinued Operations

On December 18, 2024, the Company announced that it had entered into an agreement to sell its Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”) to TOPPAN Holdings Inc. (“Toppan”) for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments (the “Transaction”). The Transaction, which reflects the completion of the previously announced strategic review of Sonoco’s Thermoformed and Flexibles Packaging business, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. In accordance with applicable accounting guidance, the results of TFP are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K. Further, the Company reclassified the assets and liabilities of TFP as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2024 and 2023. The Consolidated Statements of Comprehensive Income, Changes in Total Equity, and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted. See Note 2 to the Consolidated Financial Statements for additional information.

24 FORM 10-K SONOCO 2024 ANNUAL REPORT

General Overview

Sonoco is a multi-billion dollar global designer, developer, and manufacturer of a variety of highly-engineered and sustainable packaging products serving multiple end markets. As of December 31, 2024, the Company had approximately 315 locations in 40 countries, serving some of the world’s best-known brands around the globe. The Company’s operating and reporting structure consists of two reportable segments, Consumer Packaging and Industrial Paper Packaging, with all remaining businesses reported as All Other. Geographically, in 2024, approximately 67% of sales were generated in the United States, 18% in Europe, 6% in Asia, 2% in Canada, and 7% in other regions.

Sonoco competes in multiple product categories, with the majority of the Company’s revenues attributable to products and services sold to consumer and industrial products companies for use in the packaging of their products for sale or shipment. The Company also manufactures uncoated recycled paperboard for both internal use and open market sale. Each of the Company’s operating units has its own sales staff and maintains direct sales relationships with its customers.

Sonoco’s goal is to increase its long-term profitability and return capital to shareholders. Over the past several years, we have simplified our portfolio around fewer, bigger businesses, which has reduced operating complexity and improved agility. On December 4, 2024, Sonoco completed the acquisition of Titan Holdings I B.V. (“Eviosys”), Europe’s leading food cans, ends and closures manufacturer, from KPS Capital Partners, LP (“KPS”), for net cash consideration of approximately $3.8 billion. The transaction advances Sonoco’s portfolio transformation strategy to simplify and realign its portfolio and position the Company for long-term growth and value creation. The transaction is expected to expand Sonoco’s global leadership in metal food can and aerosol packaging and facilitate Sonoco’s ability to partner with global customers and advance innovation and sustainability in metal packaging offerings. Following the integration process, Eviosys will transition to the Sonoco brand over the coming months and will operate under Sonoco’s Consumer Packaging segment.

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

Sonoco’s portfolio transformation strategy also includes significant divestitures. For example, on December 18, 2024, the Company entered into an agreement to sell TFP to Toppan for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments. The planned sale, which reflects the completion of the previously announced strategic review of Sonoco’s Thermoformed and Flexibles Packaging business, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. On a standalone basis, TFP had revenue of $1.3 billion in 2024.

In April 2024, Sonoco completed the divestiture of its Protective Solutions business (“Protexic”), which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets. In 2023, the Company completed the divestitures of its U.S. and Mexico Bulksak businesses, which consisted of the manufacture and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners, and its Sonoco Sustainability Solutions (“S3”) business, which provided customized waste and recycling management programs. See “Acquisitions and Divestitures—Divestitures” below for more information.

In addition to the completed and pending divestitures discussed above, the Company has initiated a review of strategic alternatives for ThermoSafe, its leading temperature assured packaging business. On a standalone basis, ThermoSafe, which is part of the All Other group of businesses, had revenue of $245 million in 2024. The Company expects to complete its review of strategic alternatives for ThermoSafe in the second half of 2025.

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

The Company is focused on efficient capital deployment into these larger, core business units to improve economic returns and improve integration effectiveness and speed for acquired strategic assets. In parallel, the Company has worked on commercial, operational, and supply chain excellence programs to shift the mix of its business towards higher-valued products and increase overall productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, as well as strategic pricing initiatives intended to better capture input costs and the value of the services provided.

Effective January 1, 2024, the Company began conducting its recycling operations, part of the Industrial Paper Packaging segment, as a procurement function. As a result, no recycling net sales are recorded and the margin from the Company’s recycling operations reduced “Cost of sales” in the Company’s Consolidated Statements of Income for the year ended December 31, 2024 as these activities are no longer a part of ongoing major operations.

In 2024, the Company continued to focus on improving returns on both organic investments and acquisitions with a goal of better managing its business mix, improving profits, improving generation of operating cash flow and free cash flow, and operating the business with better efficiency. Another focus area in 2024 was the Company’s continued commitment to promote accountability and transparency in its sustainability and corporate responsibility programs.

The Company also continued efforts to improve productivity through focus on operational excellence including the implementation of automation programs and commercial excellence where the Company is realigning pricing models to value-based pricing versus legacy cost-based inputs. The results of these efforts reflected positively in the Company’s 2024 financial results.

As the Company looks to 2025, it is focused on successfully integrating Eviosys into Sonoco and achieving synergy targets, completing the divestiture of TFP, and pursuing strategic alternatives for our ThermoSafe business. The Company anticipates using proceeds from divestitures, along with cash from operations, to reduce outstanding debt. The Company plans to continue to invest capital to further grow its Consumer Packaging and Industrial Paper Packaging segments while maintaining its focus on profitability through productivity improvements. By transforming into a simpler, stronger and more sustainable company, the Company believes it is positioned to grow through 2025 and beyond.

25 FORM 10-K SONOCO 2024 ANNUAL REPORT

Acquisitions and Divestitures

Acquisitions

As described above, on December 4, 2024, the Company completed the acquisition of all issued and outstanding equity interests in Eviosys from an affiliate of KPS for net cash consideration of approximately $3.8 billion. Eviosys, a global supplier of metal packaging that produces food cans and ends, aerosol cans, metal closures and promotional packaging with a large metal food can manufacturing footprint in the Europe, Middle East, and Africa region, has approximately 6,500 employees in 44 manufacturing facilities across 17 countries. The Company funded the Eviosys acquisition, including related fees and expenses, with the net proceeds from the registered public offering of senior unsecured notes, borrowings from two term loan facilities, and cash on hand. See Note 11 to the Consolidated Financial Statements for more information. The financial results of Eviosys are included in the Company’s Consumer Packaging segment.

On June 1, 2024, the Company completed the purchase of a small tube and paper cone manufacturer in Brazil for $2.7 million. The financial results of this business are included in the Company’s Industrial Paper Packaging segment.

The Company completed two acquisitions during 2023 at a net cash cost of approximately $372.6 million. On December 1, 2023, the Company completed the acquisition of Inapel Embalagens Ltda. (“Inapel”), a manufacturer of single-layer and multilayer materials for flexible packaging in Brazil for a net cash payment at closing of $59.2 million with additional purchase consideration of $2.3 million and a final working capital settlement of $0.5 million paid to the seller in 2024. As Inapel is one of the operations included in the pending sale of TFP, the acquired assets and liabilities are reflected as assets and liabilities of discontinued operations in the Company’s Consolidated Balance Sheets as of December 31, 2024 and 2023.

On September 8, 2023, the Company completed the acquisition of the remaining 65% ownership interest in RTS Packaging from joint venture partner WestRock, and the acquisition of a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”) from WestRock for net cash consideration of $313.4 million, subject to a final working capital adjustment of $0.5 million that was paid to WestRock in January 2024. Prior to completing the acquisitions, the Company held a 35% ownership interest in the RTS Packaging joint venture, which was formed in 1997, and combined the former protective packaging operations of WestRock and Sonoco to market recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals. With the acquisition of the remaining interest in RTS Packaging and the acquisition of the Chattanooga Mill, the Company added approximately 1,100 employees, fourteen converting operations, including ten in the United States, two in Mexico, two in South America, and one paper mill in the United States.

Divestitures

As described above, on December 18, 2024, the Company announced that it had entered into an agreement to sell TFP to Toppan for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments. The sale is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025. See Notes 1 and 2 to the Consolidated Financial Statements for additional information.

In November 2024, the Company completed the sale of two production facilities in China, both of which were part of the Company’s Industrial Paper Packaging segment, for $0.3 million. As a result of the sale, the Company reclassified $0.6 million of cumulative translation losses from Accumulated Other Comprehensive Loss and recognized a loss of $25.6 million, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On April 1, 2024, the Company completed the sale of Protexic, part of the All Other group of businesses, to Black Diamond Capital Management, LLC. This business provided foam components and integrated material solutions for various industrial end markets. This sale was the result of the Company’s continuing evaluation of its business portfolio and is consistent with the Company’s strategic and investment priorities. The cash selling price, as adjusted for the final working capital settlement, was $78.5 million. As a result of the Protexic divestiture, the Company recognized a pretax gain of $0.9 million included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income. The Company used the majority of the cash proceeds from the sale to pay down debt.

On July 1, 2023, the Company completed the sale of its U.S. BulkSak business, which consisted of the manufacturing and distribution of flexible intermediate bulk containers, plastic and fiber pallets, and custom fit liners and was a part of the Company’s Industrial Paper Packaging segment, to U.S. BulkSak Holdings, LLC. The cash selling price, as adjusted for the final working capital settlement, was $20.3 million with cash proceeds totaling $18.3 million received in 2023, and the remaining $2.0 million held in escrow to be released to the Company within 18 months from the date of the sale, pursuant to the settlement of any indemnity claims. As a result of the U.S. BulkSak divestiture, the Company recognized a pretax gain of $6.8 million included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

Also on July 1, 2023, the Company agreed to the sale of its Mexico BulkSak business. The sale closed in December 2023 for a cash selling price, as adjusted for working capital, of $1.1 million. As a result of the Mexico BulkSak sale, the Company recognized a pretax gain of $0.1 million which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On January 26, 2023, the Company completed the sale of its S3 business, a provider of customized waste and recycling management programs and part of the Company’s Industrial Paper Packaging segment, to Northstar Recycling Co. (“Northstar”), for total cash proceeds of $13.8 million. An additional $1.5 million of proceeds were released to the Company from escrow in September 2024. The Company recognized a pretax gain of $11.1 million during the first quarter of 2023. In the second quarter of 2024, upon resolution of certain contingencies, the Company received cash proceeds and recognized an additional pretax gain of $1.3 million on the sale. These gains are included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income for their respective periods.

On January 26, 2023, in connection with the sale of the S3 business, the Company acquired a 2.7% equity interest in Northstar valued at $5.0 million. This investment, which had been accounted for under the measurement alternative, was sold in December 2024 for a cash selling price of $8.6 million. The resulting gain of $3.6 million is included in “Other (expenses)/income, net” in the Company’s Consolidated Statements of Income.

26 FORM 10-K SONOCO 2024 ANNUAL REPORT

Sale of Assets

Following the completion of Project Horizon in the third quarter of 2022, the Company’s project to convert the corrugated medium machine in Hartsville, South Carolina, to produce uncoated recycled paperboard, the Company now produces paper exclusively from recycled fibers and no longer requires natural tree fiber for production. Accordingly, on March 29, 2023, the Company sold its timberland properties, consisting of approximately 55 acres, to Manulife Investment Management for net cash proceeds of $70.8 million. The Company disposed of assets with a net book value of $9.9 million as part of the sale, and recognized a pretax gain from the sale of these assets of $60.9 million during the year ended December 31, 2023, which is included in “(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

Additional Ownership Investment

During the second quarter of 2024, the Company increased its ownership investment in a small South Carolina-based designer and manufacturer of sustainable protective packaging solutions from 20.5% to 39.9%. The Company acquired its initial ownership interest in June 2022. The preferred stock investment increased by $18.5 million during the second quarter of 2024, which included a $10.0 million cash payment, a $5.4 million remeasurement of the fair value of the existing investment, and a $2.5 million conversion of the carrying value of the outstanding convertible notes into a preferred series stock investment, which yielded a $0.5 million fair value increase and a $0.1 million increase for interest income earned. The outstanding investment of $21.2 million as of December 31, 2024 is included within “Other assets” in the Company’s Consolidated Balance Sheet. The remeasurement of the carrying value of the existing investment to fair value during the second quarter of 2024 resulted in a gain of $5.9 million and interest income of $0.1 million, which are included in “Other (expenses)/income, net” and “Interest income,” respectively, in the Company’s Consolidated Statements of Income.

The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to be suboptimal or nonstrategic. See Note 4 to the Consolidated Financial Statements for further information about acquisitions and divestitures.

Restructuring and Asset Impairment Charges

Due to its geographic footprint (approximately 315 locations in 40 countries as of December 31, 2024) and the cost-competitive nature of its businesses, the Company frequently seeks more cost-effective means and structures to serve its customers, to improve profitability, and to respond to fundamental changes in its markets. As such, plant closures in connection with footprint rationalization and headcount reductions are an important component of the Company’s cost control initiatives. The amount of these costs can vary significantly from year to year depending upon the scope and location of the restructuring activities.

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

During 2024, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts, including the relocation of certain facilities. The largest of these plant closures were the closures of the Company’s paper mills in Sumner, Washington (the “Sumner Mill”) and Kilkis, Greece (the “Kilkis Mill”), both of which were part of the Industrial Paper Packaging segment. Restructuring charges were also incurred during the year for costs related to plant closures, including equipment removal, utilities, plant security, property taxes, insurance, and environmental remediation costs related to the closure of the Sumner Mill, and ongoing facility carrying costs of previously announced plant closures. Asset impairment charges were recognized in the Industrial Paper Packaging segment related to the closures of the Sumner Mill and the Kilkis Mill and in the Consumer Packaging segment as a result of exiting a small metal canning lid business.

During 2023, the Company recognized restructuring charges related to severance for employees terminated as a result of various plant closures or whose positions were eliminated as part of the Company’s ongoing organizational effectiveness efforts. The largest of these plant closures was the closure of the Company’s paper mill in Hutchinson, Kansas, which was part of the Industrial Paper Packaging segment. Restructuring charges were also incurred during the year for costs related to plant closures, including equipment removal, utilities, plant security, property taxes, and insurance at closed facilities. Asset impairment charges were recognized in the Industrial Paper Packaging and Consumer Packaging segments as the result of plant closures.

The Company expects to recognize future additional costs totaling approximately $3.0 million in connection with previously announced restructuring actions that were underway as of December 31, 2024. The Company believes that the majority of these charges will be incurred and paid by the end of 2025. The Company regularly evaluates its cost structure, including its manufacturing capacity, and additional restructuring actions are likely to be undertaken. Restructuring and asset impairment charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity and the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the Company operates.

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

27 FORM 10-K SONOCO 2024 ANNUAL REPORT

Results of Operations – 2024 Versus 2023

Consolidated net sales from continuing operations for 2024 were $5.3 billion, a $0.1 billion, or 2.5%, decrease from 2023. The Protexic divestiture in April 2024 resulted in lower year-over-year sales of $132.0 million, accounting for the Company’s recycling operations as a procurement function effective January 1, 2024 resulted in lower year-over-year sales of $100.0 million, lower selling prices across the Consumer Packaging and Industrial Paper Packaging segments resulted in a $94.2 million decline, and unfavorable volumes in the All Other group of businesses lowered year-over-year sales by $46.3 million. These decreases were partially offset by a year-over-year increase in sales of $266.2 million from the acquisitions of Eviosys, RTS and the Chattanooga Mill.

GAAP operating profit for the year ended December 31, 2024 was $326.6 million, a decrease of 44.6% from the $589.0 million for the year ended December 31, 2023. The decrease in GAAP operating profit was primarily due to a $63.3 million decrease in gross profit, a $25.6 million loss in the current period from the sale of two production facilities in China, the absence of a net $78.9 million benefit from the sale of the Company’s timberland properties and the divestitures of the S3 and U.S. BulkSak businesses in 2023, and $67.0 million in additional acquisition, integration and divestiture-related costs for the year ended December 31, 2024. Adjusted operating profit for the year ended December 31, 2024 was $573.1 million, a decrease of 11.4% from the $646.6 million reported for the year ended December 31, 2023.

GAAP net income attributable to Sonoco was $163.9 million ($1.65 per diluted share) in 2024, compared with $475.0 million ($4.80 per diluted share) in 2023. GAAP net income attributable to Sonoco was lower in 2024 compared to 2023 primarily due to the decrease in GAAP operating profit as described above, a $113.7 million remeasurement loss on Euro denominated cash held by the Company to close the Eviosys acquisition, and the absence of a $44.0 million gain in 2023 from the step-up to fair value of the Company’s 35% ownership interest in RTS Packaging upon acquiring the remaining 65% ownership interest. These decreases were partially offset by a $114.2 million reduction in income tax expense as discussed further below. Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share were $485.8 million ($4.89 per diluted share) in 2024, compared with $519.9 million ($5.26 per diluted share) in 2023.

Costs and Expenses/Margins

Cost of sales decreased $72.7 million in 2024, or 1.7%, from the prior year. The decrease was primarily related to the sale of Protexic and improved productivity from procurement savings, production efficiencies and fixed cost reduction initiatives, and materials price reductions, partially offset by cost of sales related to the 2023 and 2024 acquisitions. Gross profit margins decreased to 21.5% in 2024 from 22.1% in the prior year due to pricing, depreciation and other various items as discussed above.

Selling, general and administrative expenses (“SG&A”) increased $79.3 million, or 12.3%, and were 13.6% of sales in 2024 compared to 11.8% of sales in 2023. The current year increase was primarily related to an increase in acquisition, integration, and divestiture-related costs.

Restructuring and asset impairment charges totaled $65.4 million in 2024, compared with $47.9 million in 2023. The 2024 charges reflect severance costs related to the Company’s ongoing organizational effectiveness efforts, the relocation costs of certain facilities in Greece and Germany, and closure costs related to the Sumner Mill and the Kilkis Mill, two small industrial converted products facilities in China, and the exit of a small metal canning lid business within Sonoco Metal Packaging (“Metal Packaging”). The 2023 charges reflect costs related to the closure of several operations, including a paper mill in Kansas and a metal packaging facility and severance costs related to the closures of several smaller operations. Additional information regarding restructuring actions and asset impairments is provided in Note 5 to the Company’s Consolidated Financial Statements.

(Loss)/Gain on divestiture of business and other assets reflected a loss of $23.5 million in 2024, compared to a gain of $78.9 million in 2023. The loss reported in 2024 primarily related to the loss on the sale of two production facilities in China. The gain recorded in 2023 primarily related to the sale of the Company’s timberland properties and the divestitures of the S3 and U.S. BulkSak businesses.

Other (expenses)/income, net reflected expense of $104.2 million in 2024, compared with income of $39.7 million in 2023. Other expenses, net reported in 2024 included a loss of $113.7 million from the remeasurement of euro-denominated cash balances held in connection with the Eviosys acquisition, partially offset by a gain of $5.9 million from the remeasurement of an equity investment to fair value and a gain of $3.6 million from the sale of the Company’s equity interest in Northstar. Other income, net reported in 2023 included a gain of $44.0 million from the remeasurement of the Company’s previously held equity interest in RTS Packaging to fair value, partially offset by a loss of $7.1 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition. See Note 4 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $13.8 million in 2024, compared with $14.3 million in 2023. The year-over-year decrease of $0.5 million was primarily due to lower interest costs on the Company’s defined benefit pension liabilities, resulting from lower year-over-year discount rates. See Note 15 to the Consolidated Financial Statements for further information on employee benefit plans.

Net interest expense totaled $145.1 million for the year ended December 31, 2024, compared with $125.4 million in 2023. The increase was primarily due to higher interest from financing transactions relating to the Eviosys acquisition. Additional information regarding the Company’s indebtedness is provided in Note 11 to the Company’s Consolidated Financial Statements.

The effective tax rates on GAAP and Adjusted net income attributable to Sonoco for the full year 2024 were 8.7% and 24.3%, respectively, compared with 24.5% and 24.9%, respectively for the full year 2023. The decrease in the GAAP effective tax rate for 2024 was due primarily to the release of a reserve for uncertain tax positions following the expiration of the applicable statute of limitations, as well as deferred tax adjustments associated with the post-acquisition entity restructuring of the partitions business. The decrease in the effective tax rate on Adjusted net income attributable to Sonoco was primarily due to a variance in tax rates between jurisdictions in which the respective income and charges were taxed.

Discontinued Operations

Net income from discontinued operations totaled $96.4 million for the year ended December 31, 2024, compared with $96.3 million for the year ended December 31, 2023. The increase in interest expense related to debt required to be repaid upon closure of the TFP transaction were offset by tax benefits due to the recording of a deferred tax asset on the outside basis of certain held-for-sale entities.

28 FORM 10-K SONOCO 2024 ANNUAL REPORT

Reportable Segments

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

In accordance with applicable accounting guidance, the results of TFP, previously part of the Consumer Packaging segment, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K. All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted. As of and for the year ended December 31, 2024, there were no changes to the manner in which the Company reviewed financial information at the segment level; therefore, these changes had no impact on the Company’s segment reporting structure.

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

Segment results, which are reviewed by Company management to evaluate segment performance, do not include: restructuring/asset impairment charges; amortization of acquired intangibles; acquisition, integration, and divestiture-related costs; changes in last in, first out (“LIFO”) inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations.

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

Consumer Packaging

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

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

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

Industrial Paper Packaging

Industrial Paper Packaging segment net sales decreased year over year due to lower sales of $100.0 million related to the treatment of recycling as a procurement function effective January 1, 2024, lower sales prices of $35.3 million, and an unfavorable impact from foreign currency exchange of $24.1 million from the strengthening of the U.S. dollar. These declines were partially offset by a net increase of $123.8 million related to the September 2023 acquisitions of the Chattanooga Mill and the remaining ownership interest in RTS Packaging, the divestiture of the Bulksak business, and the closure of certain facilities in Greece. An increase in volume of $18.1 million further offset the year-over-year decrease.

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

29 FORM 10-K SONOCO 2024 ANNUAL REPORT

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

All Other

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

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

Results of Operations – 2023 Versus 2022

Consolidated net sales from continuing operations for 2023 were $5.4 billion, a $0.4 billion, or 7.1%, decrease from 2022. The lower year-over-year sales were driven by lower volumes of $505.8 million across the portfolio. This impact was partially offset by an increase in sales of $78.9 million due to the full year impact in 2023 of the January 2022 acquisition of Metal Packaging.

GAAP operating profit for the year ended December 31, 2023 was $589.0 million, an increase of 4.6% from $563.4 million for the year ended December 31, 2022. Operating profit increased primarily as a result of the $78.9 million benefit from the sale of the Company’s timberland properties and the divestitures of the S3 and U.S. BulkSak businesses in 2023, lower restructuring and asset impairment costs of $4.5 million, and lower acquisition and integration costs for the year ended December 31, 2023. These increases were partially offset by a decrease in gross profit of $22.7 million and increases in other SG&A expenses related to higher compensation, benefits, group medical, and information technology costs resulting from inflation and the impact of acquisitions. Adjusted operating profit for the year ended December 31, 2023 was $646.6 million, a decrease of 17.4% from the $783.0 million reported for the year ended December 31, 2022.

GAAP net income attributable to Sonoco was $475.0 million ($4.80 per diluted share) in 2023, compared with $466.4 million ($4.72 per diluted share) in 2022. These GAAP results reflect net after-tax, adjusted charges totaling $44.9 million and $173.1 million in 2023 and 2022, respectively. These adjustments are presented in the “Reconciliations of GAAP to Non-GAAP Financial Measures” tables. Adjusted for these items, Adjusted net income attributable to Sonoco was $519.9 million ($5.26 per diluted share) in 2023, compared with $639.5 million ($6.48 per diluted share) in 2022.

The GAAP results were slightly higher in 2023 as a result of the full year impact of the acquisition of Metal Packaging, the acquisition of the remaining interest in RTS Packaging, and the acquisition of the Chattanooga Mill, gains from divestitures and sale of assets, and lower acquisition, integration and divestiture-related costs. These favorable factors were partially offset by lower volumes across the portfolio and unfavorable metal price overlap. Adjusted net income attributable to Sonoco declined in 2023 as a result of lower volumes across the portfolio, inflationary pricing pressure within retail in the Consumer Packaging segment, and unfavorable index-related pricing in the Industrial Paper Packaging segment.

Costs and Expenses/Margins

Cost of sales decreased $0.4 billion in 2023, or 8.5%, from the prior year. The decrease was attributable to the lower sales volume, which was partially offset by lower input costs, primarily for steel and old corrugated cardboard. Gross profit margins increased to 22.1% in 2023 from 20.9% in the prior year primarily due to the previously mentioned lower input costs.

SG&A increased $35.0 million, or 5.7%, and were 11.8% of sales in 2023 compared to 10.4% of sales in 2022. The current year increase was related to higher compensation, benefits, group medical, and information technology costs resulting from inflation and the impact of acquisitions. These increases were partially offset by lower year-over-year acquisition, integration, and divestiture-related costs. These costs were higher in the prior year due to the January 2022 acquisition of Metal Packaging.

Restructuring and asset impairment charges totaled $47.9 million in 2023 compared with $52.4 million in 2022. The 2023 charges reflect costs related to the closure of several operations, including a paper mill in Kansas and a metal packaging facility and severance related to the closures of several smaller operations. The 2022 charges include severance and other plant closure costs as well as a $9.2 million impairment charge resulting from the Company’s exit from its Russian operations. Additional information regarding restructuring actions and asset impairments is provided in Note 5 to the Consolidated Financial Statements.

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

Other (expense)/income, net was $39.7 million in 2023, reflecting a gain of $44.0 million resulting from the remeasurement of the Company’s previously held equity interest in RTS Packaging to fair value, partially offset by a loss of $4.3 million from the settlement of a contract associated with the acquisition of the Chattanooga Mill that was determined to have unfavorable terms given market conditions at the time of the acquisition. See Note 4 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $14.3 million in 2023, compared with $7.1 million in 2022. The year-over-year increase of $7.2 million was primarily due to higher interest costs on the Company’s defined benefit pension liabilities, resulting from higher year-over-year discount rates. See Note 15 to the Consolidated Financial Statements for further information on employee benefit plans.

Net interest expense totaled $125.4 million for the year ended December 31, 2023, compared with $96.3 million in 2022. The increase was primarily due to higher year-over-year average debt balances resulting from the term loans executed in December 2022 and August 2023 and the impact of higher interest rates on the Company’s variable debt. Additional information regarding the Company’s indebtedness is provided in Note 11 to the Consolidated Financial Statements.

The effective tax rates on GAAP and Adjusted net income attributable to Sonoco for the full year 2023 were 24.5% and 24.9%, respectively, compared with 20.8% and 24.5%, respectively, for the full year 2022. The increase in the GAAP effective tax rate for 2023 was due primarily to the absence in 2023 of a release of a valuation allowance on foreign tax credits. The increase in the effective tax rate on Adjusted net income attributable to Sonoco was primarily due to a variance in tax rates between jurisdictions in which the respective income and charges were taxed.

30 FORM 10-K SONOCO 2024 ANNUAL REPORT

Discontinued Operations

Net income from discontinued operations totaled $96.3 million for the year ended December 31, 2023, compared with $88.6 million for the year ended December 31, 2022. The increase was primarily due to improved productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives, partially offset by unfavorable volume/mix and increased restructuring charges.

Reportable Segments

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

In accordance with applicable accounting guidance, the results of TFP, previously part of the Consumer Packaging segment, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented in this Annual Report on Form 10-K. All amounts, percentages and disclosures for all periods presented in this Annual Report on Form 10-K reflect only the continuing operations of Sonoco unless otherwise noted. See Note 2 to the Consolidated Financial Statements for more information. As of and for the year ended December 31, 2023, there were no changes to the manner in which the Company reviewed financial information at the segment level; therefore, these changes had no impact on the Company’s segment reporting structure.

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

Segment results, which are reviewed by Company management to evaluate segment performance, do not include: restructuring/asset impairment charges; amortization of acquired intangibles; acquisition, integration, and divestiture-related costs; changes in LIFO inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations.

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

Consumer Packaging

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

Segment operating profits decreased by $156.4 million year over year and operating profit margins decreased to 11.6% from 17.2%. The decreases in operating profit and operating margins were primarily due to a $84.7 million decline from price/cost pressures and the unfavorable impact of metal price overlap, a $58.5 million decline from unfavorable sales volume/mix, and increased employee compensation and group medical costs. These unfavorable impacts were partially offset by $25.9 million in improved productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

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

31 FORM 10-K SONOCO 2024 ANNUAL REPORT

Industrial Paper Packaging

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

Segment operating profit decreased year over year, driven by unfavorable volume of $73.4 million. This unfavorable impact was partially offset by $25.6 million favorable impact from price/cost and $18.8 million from productivity from procurement savings, production efficiencies, and fixed cost reduction initiatives.

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

All Other

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

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

Non-GAAP Financial Measures

The Company uses certain financial performance measures, both internally and externally, that are not in conformity with GAAP (referred to as “non-GAAP financial measures”) to assess and communicate the financial performance of the Company. These non-GAAP financial measures, which are identified using the term “Adjusted” (for example, “Adjusted Operating Profit,” “Adjusted Net Income Attributable to Sonoco,” and “Adjusted Diluted EPS”), reflect adjustments to the Company’s GAAP operating results to exclude amounts, including the associated tax effects, relating to:

•restructuring/asset impairment charges1;

•acquisition, integration and divestiture-related costs;

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

•losses from the early extinguishment of debt;

•non-operating pension costs;

•amortization expense on acquisition intangibles;

•changes in LIFO inventory reserves;

•certain income tax events and adjustments;

•derivative gains/losses;

•other non-operating income and losses; and

•certain other items, if any.

1 Restructuring and restructuring-related asset impairment charges are a recurring item as the Company’s restructuring programs usually require several years to fully implement, and the Company is continually seeking to take actions that could enhance its efficiency. Although recurring, these charges are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, the inherent imprecision in the estimates used to recognize the impairment of assets and the wide variety of costs and taxes associated with severance and termination benefits in the countries in which the restructuring actions occur.

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

In addition to the “Adjusted” results described above, the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA is defined as net income excluding the following: interest expense; interest income; provision for income taxes; depreciation, depletion and amortization expense; non-operating pension costs; net income/loss attributable to noncontrolling interests; restructuring/asset impairment charges; changes in LIFO inventory reserves; gains/losses from the divestiture of businesses and other assets; acquisition, integration and divestiture-related costs; other income; derivative gains/losses; and other non-GAAP adjustments, if any, that may arise from time to time. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales.

The Company’s non-GAAP financial measures are not calculated in accordance with, nor are they an alternative for, measures conforming to GAAP, and they may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles.

The Company presents these non-GAAP financial measures to provide investors with information to evaluate Sonoco’s operating results in a manner similar to how management evaluates business performance. The Company consistently applies its non-GAAP financial measures presented herein and uses them for internal planning and forecasting purposes, to evaluate its ongoing operations, and to evaluate the ultimate performance of management and each business unit against plans/forecasts. In addition, these same non-GAAP financial measures are used in determining incentive compensation for the entire management team and in providing earnings guidance to the investing community.

32 FORM 10-K SONOCO 2024 ANNUAL REPORT

Material limitations associated with the use of such measures include that they do not reflect all period costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, the calculations of these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances that the investor may find material and view differently.

To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in evaluating the Company’s results to review both GAAP information, which includes all of the items impacting financial results, and the related non-GAAP financial measures that exclude certain elements, as described above. Further, Sonoco management does not, nor does it suggest that investors should, consider any non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Whenever reviewing a non-GAAP financial measure, investors are encouraged to review the related reconciliation to understand how it differs from the most directly comparable GAAP measure.

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

conjunction with MD&A of the Company’s results of operations. Reconciliations are not provided for non-GAAP financial measures related to

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

forecast: possible gains or losses on the sale of businesses or other assets; restructuring costs and restructuring-related asset impairment

charges; acquisition, integration and divestiture-related costs; and the tax effect of these items and/or other income tax-related events. These

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

Reconciliations of GAAP to Non-GAAP Financial Measures

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

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

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

2 Acquisition, integration and divestiture related costs include losses on treasury lock derivative instruments, amortization of financing fees and pre-acquisition net interest expenses totaling $33,569 related to debt instruments associated with the financing of the Eviosys acquisition. These costs are included in “Interest expense” in the Company’s Consolidated Statements of Income.

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

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

33 FORM 10-K SONOCO 2024 ANNUAL REPORT

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

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

34 FORM 10-K SONOCO 2024 ANNUAL REPORT

Adjusted EBITDA1

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

The Company does not calculate net income by segment; therefore, Adjusted EBITDA by segment is reconciled to the closest GAAP measure of segment profitability, Segment Operating Profit, which is another method to achieve the same result. 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 (“ASC”) 280, “Segment Reporting,” as prescribed by the Financial Accounting Standards Board.

Segment results, which are reviewed by the Company’s management to evaluate segment performance, do not include the following: restructuring/asset impairment charges; amortization of acquisition intangibles; acquisition, integration, and divestiture-related costs; changes in LIFO inventory reserves; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; or certain other items, if any, the exclusion of which the Company believes improves the comparability and analysis of the ongoing operating performance of the business. Accordingly, the term “segment operating profit” is defined as the segment’s portion of “operating profit” excluding those items. All other general corporate expenses have been allocated as operating costs to each of the Company’s reportable segments and All Other, except for costs related to discontinued operations. Total operating profit is comprised of the sum of segment and All Other operating profit plus certain items that have been allocated to Corporate, including amortization of acquisition intangibles; restructuring/asset impairment charges; changes in LIFO inventory reserves; acquisition, integration and divestiture-related costs; gains/losses from the sale of businesses or other assets; gains/losses on derivatives; and certain other items that were excluded from segment and All Other operating profit.

35 FORM 10-K SONOCO 2024 ANNUAL REPORT

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

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

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

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

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

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

36 FORM 10-K SONOCO 2024 ANNUAL REPORT

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

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

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

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

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

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

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

37 FORM 10-K SONOCO 2024 ANNUAL REPORT

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

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

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

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

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

Financial Position, Liquidity, and Capital Resources

Cash Flow

Operating Activities

Cash flows from operations totaled $833.8 million in 2024, compared with $882.9 million in 2023, a year-over-year decrease of $(49.1) million. GAAP net income decreased by $312.0 million year over year as described in the “Results of Operations” section above. Net income in the current year also reflected a $33.9 million year-over-year increase in non-cash depreciation, depletion and amortization expense and a $9.4 million decrease in net non-cash asset impairment charges. Cash contributions to the Company’s pension and postretirement plans in 2024 were $19.6 million, compared with $14.7 million in 2023, a year-over-year increase of $5.0 million. Accrued expenses and other assets and liabilities provided $75.1 million of cash in 2024 and used $46.7 million of cash in 2023, for a year-over-year increase in provision of cash of $121.8 million. A significant driver of the change was the year-over-year increase in accrued management incentives in 2024 of $37.9 million, compared to a year-over-year decrease in 2023 of $22.7 million. The $60.6 million year-over-year increase in provision of cash related to accrued management incentive compensation, combined with a $34.1 million year-over-year increase in accrued interest as the result of higher interest expense related to financing transactions associated with the Eviosys acquisition, were the primary drivers of the increased provision of cash from accrued expenses and other assets and liabilities. Cash paid for taxes decreased by $97.3 million year over year. Tax payments in 2024 benefited from lower pre-tax income in the United States compared to 2023.

Net working capital provided $128.1 million of cash in 2024, while it provided $218.8 million in 2023. This net year-over-year decrease in provision of cash of $90.7 million was driven largely by year-over-year changes in inventory levels, partially offset by changes in accounts payables. Inventories used cash of $13.3 million in 2024 while providing cash of $342.7 million in 2023. Inventory levels at the end of 2024 changed only slightly from inventory levels at the end of 2023; however, inventory levels at the end of 2023 were significantly lower than they were at the end of 2022, particularly in tinplate steel, as the Company focused on reducing inventory in a lower sales volume environment during 2023. Accounts payable provided $123.6 million of cash in 2024 while using $148.8 million of cash in 2024. The year-over-year increase in the provision of cash from accounts payable was attributable to the spending on inventories, the year-over-year change in the cost of inputs, and better negotiated terms with certain vendors. Accounts receivable provided $7.2 million less cash in 2024 compared to 2023.

38 FORM 10-K SONOCO 2024 ANNUAL REPORT

Investing Activities

Investing activities used $4.1 billion of cash in 2024, compared with $619.3 million in 2023. The higher year-over-year use of cash was primarily attributable to higher acquisition spending as the Company invested $3.8 billion in the Eviosys acquisition in December 2024, compared with total acquisition spending of $372.6 million in 2023 for the acquisitions of RTS Packaging, the Chattanooga Mill, and Inapel. Capital expenditures in 2024 were $393.2 million, $30.2 million higher than the previous year. The year-over-year increase was driven by increased investments in various automation projects and strategic growth and productivity projects in both the Consumer Packaging and the Industrial Paper Packaging segments. Proceeds from the sale of businesses provided $81.0 million of cash in 2024 as the Company received cash from the sale of its Protexic business and additional proceeds related to the prior year sale of its S3 business. Proceeds from the sale of businesses provided $33.2 million of cash in 2023 as the Company received cash from the sales of its S3 and BulkSak businesses. Proceeds from the sale of assets totaled $15.6 million in 2024, primarily from the sale of previously closed production facilities, compared with $80.3 million in the prior year, primarily related to the sale of the Company’s timberland properties. Proceeds from the settlement of a net investment hedge provided $9.1 million of cash in 2024, and the Company paid $34.4 million in 2024 to settle a tranche of foreign currency forward contracts that the Company entered into in connection with the funding of the Eviosys acquisition. Net investments in affiliated companies used $2.7 million of cash in 2024, compared to $11.3 million of cash in 2023. Both years reflect additional investments in the Company’s investments in ISI Robotics and a small South Carolina-based designer and manufacturer of sustainable packaging solutions. The 2024 figure also reflects proceeds from the sale of the Company’s 2.7% equity interest in Northstar, which it had acquired on January 26, 2023 for $5.0 million, as part of the sale of its S3 business to Northstar. Other net investing proceeds provided $1.4 million less cash year over year, primarily as a result of lower life insurance proceeds received in the current year.

Financing Activities

Net cash provided by financing activities totaled $3.7 billion in 2024, compared with a net use of cash totaling $352.0 million in 2023. Financing activities in 2024 included net proceeds of debt totaling $3.9 billion used primarily to fund the acquisition of Eviosys. In 2023, the Company made net debt repayments of $150.4 million as it utilized strong operating cash flow and proceeds from the sale of assets to repay syndicated term loans ahead of their scheduled maturities. Financing activities in 2024 also included the payment of fees totaling $19.0 million related to an unsecured bridge term loan facility to secure funding for the Eviosys acquisition. The change in outstanding checks used cash of $8.7 million in 2024 while providing cash of $6.4 million in the prior year. The year-over-year change is the result of the timing and size of the last accounts payable check runs in 2024 and 2023 relative to the Company’s December 31 year end. Cash used to repurchase the Company’s common stock to satisfy employee tax withholding obligations in association with the exercise of certain share-based compensation awards was $9.2 million in 2024, compared to $10.6 million in 2023.

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

Capital Resources

The Company’s cash balances are held in numerous locations throughout the world. At December 31, 2024 and 2023, approximately $190.1 million and $85.8 million, respectively, of the Company’s reported cash and cash equivalents balances of $431.0 million and $138.9 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. The Company has generally maintained sufficient domestic liquidity through a combination of operating cash flow generation and access to bank and capital markets borrowings, and therefore generally considered its foreign unremitted earnings to be indefinitely invested outside the United States and did not typically plan to repatriate such earnings, other than excess cash balances that could be repatriated at minimal tax cost. In 2024, due to the increase in debt in the United States affecting domestic liquidity, the Company did not consider certain future earnings of the Eviosys business to be indefinitely reinvested outside the United States and may repatriate excess cash balances from Eviosys at minimal tax cost. As of December 31, 2024, the Company is not providing for taxes on these amounts for financial reporting purposes. Computation of the potential deferred tax liability associated with unremitted earnings considered to be indefinitely reinvested is not practicable.

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. 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 with favorable interest terms on both.

The Company, as part of its ongoing efforts to improve cash flow and related liquidity, works with suppliers to improve its terms and conditions, including extending payment terms. Beginning in 2020, the Company also began voluntary supply chain financing programs (the “SCF Programs”) to provide certain suppliers with the opportunity to sell receivables due from the Company to the SCF Programs’ participating financial institution. Such sales are conducted at the sole discretion of both the suppliers and the financial institution on a non-recourse basis at a rate that leverages the credit rating of the Company and thus might be more beneficial to the supplier. No guarantees are provided by the Company or any of its subsidiaries under the SCF Programs. Responsibility is limited to making payment on the terms originally negotiated with suppliers, regardless of whether those suppliers sell the receivables to the financial institution. The Company does not enter into any agreements with suppliers regarding their participation in the SCF Programs. All amounts outstanding at December 31, 2024 under the SCF Programs were recorded within trade accounts payable. The amount owed to the participating financial institution under the SCF Programs and included in accounts payable for continuing operations was $28.5 million at December 31, 2024 and $24.8 million at December 31, 2023. The Company accounts for all payments made under the SCF Programs as a reduction to cash flows from operations and reports them within “changes in payable to suppliers” in the Consolidated Statements of Cash Flows exclusive of the $7.5 million of obligations acquired in the acquisition of Eviosys. A downgrade in the Company’s credit rating or changes in the financial markets could limit financial institutions’ willingness to commit funds to, and participate in, the SCF Programs. However, the Company does not believe a reduction in, or the elimination of, the SCF Programs would have a material impact on its working capital or cash flows.

The Company’s total debt at December 31, 2024, was $7.0 billion, a year-over-year increase of $4.0 billion. The year-over-year change reflects the following actions taken during 2024:

•On May 3, 2024, the Company increased the commitments under its unsecured revolving credit facility by $350 million to an aggregate amount of $1.25 billion. The Company entered into this five-year facility, which supports its $1.25 billion commercial paper program, on June 30, 2021. At December 31, 2024, the Company had no commercial paper balances outstanding; accordingly, the committed capacity available for drawdown under its revolving credit facility at December 31, 2024 was $1.25 billion.

39 FORM 10-K SONOCO 2024 ANNUAL REPORT

•On July 12, 2024, the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Term Credit Agreement”). The Term Credit Agreement provides the Company with the ability to borrow up to $700 million on an unsecured basis (the “Term Loan Facility”) to finance a portion of the cash consideration for the Company’s acquisition of Eviosys. The Company drew down the entire Term Loan Facility on December 2, 2024 in connection with the consummation of the Eviosys acquisition on December 4, 2024.

•On September 16, 2024, the Company entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “364-Day Term Credit Agreement”). The 364-Day Term Credit Agreement provides the Company with the ability to borrow up to $1.5 billion on an unsecured basis (the “364-Day Term Loan Facility” and, together with the Term Loan Facility, the “Term Loan Facilities”) to finance a portion of the cash consideration for the Company’s acquisition of Eviosys. The Company drew down the entire 364-Day Term Loan Facility on December 2, 2024 in connection with the consummation of the Eviosys acquisition on December 4, 2024. Pursuant to the terms of the Term Loan Facilities, the Company is required to use the net proceeds of its pending divestiture of TFP and certain future dispositions to reduce its indebtedness.

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

•On December 4, 2024, the Company completed the acquisition of Eviosys. The net cash consideration of approximately $3.8 billion and the acquisition-related fees and expenses, was funded through (i) the completed registered public offering of the Notes in a combined aggregate principal amount of $1.8 billion; (ii) the Term Loan Facility in an aggregate principal amount of $700 million; (iii) the 364-Day Term Credit Agreement in an aggregate principal amount of $1.5 billion; and (iv) cash on hand.

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

At December 31, 2024, the Company had approximately $443.1 million in cash and cash equivalents on hand, including discontinued operations, and $1.25 billion in committed availability under its revolving credit facility, all of which was available for drawdown. The Company has the contractual right to draw funds directly on the underlying revolving credit facility, which could possibly occur if there were a disruption in the commercial paper market.

As of December 31, 2024, the Company had scheduled debt maturities of $2,054.5 million, $1,218.5 million, $310.5 million, $508.1 million, and $598.4 million in 2025, 2026, 2027, 2028, and 2029, respectively. On February 3, 2025, the Company repaid the 1.80% notes due February 2025 using proceeds from the issuance of commercial paper. See Note 11 to the Consolidated Financial Statements for additional information regarding the Company’s contractual principal debt maturities.

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

Capital spending is expected to total approximately $360 million in 2025, down slightly from 2024. The Company expects to continue to invest in profit generating projects in our Global Cans business (inclusive of the 2024 acquisition of Eviosys) and Global Paper Products business focused on footprint optimization, automation, and sales growth.

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

Acquisitions and internal investments are key elements of the Company’s growth strategy. The Company believes that its cash on hand, coupled with cash generated from operations and available borrowing capacity, will enable it to support this strategy. Although the Company believes that it has excess borrowing capacity beyond its current lines of credit, there can be no assurance that such financing would be available or available on terms that are acceptable to the Company. The Company continually assesses its operational footprint as well as its overall portfolio of businesses and may consider the divestiture of plants and/or business units it considers to be suboptimal or nonstrategic. Should these efforts result in the future sale of any plants or business units, management expects to utilize the proceeds to pay down debt and/or invest in growth projects or strategic acquisitions.

The net underfunded position of the Company’s various U.S and international defined benefit pension and postretirement plans was $168 million at the end of 2024, compared with $127 million at the end of 2023. The increase in the unfunded position reflects pension plans acquired in the December 4, 2024 acquisition of Eviosys with an unfunded liability totaling approximately $52.8 million. The Company contributed approximately $19.6 million to its benefit plans in 2024. Benefit plan contributions in 2025 are expected to total approximately $22 million. Future funding requirements will depend largely on actual investment returns, future actuarial assumptions, legislative actions, and changes to the Company’s benefit offerings.

Current assets increased year over year by $1,128 million to $3,179 million at December 31, 2024, and current liabilities increased by $2,873 million to $4,038 million, resulting in a decrease in the Company’s ratio of current assets to current liabilities to 0.8 at December 31, 2024 from 1.8 at December 31, 2023. Current assets were lower principally due to year-over-year reductions in inventory while current liabilities decreased primarily due to the repayment of the syndicated term loan that was due in December 2023.

Total equity decreased $146 million during 2024 as net income of $164 million, other comprehensive loss of $137 million and stock-based compensation of $30 million were partially offset by dividends of $204 million and share repurchases of $9 million for tax share withholding on vested stock compensation granted to employees. The primary driver of other comprehensive income was a $144 million translation loss from the impact of a stronger U.S. dollar on the Company’s foreign investments.

On April 20, 2021, the Board authorized the repurchase of the Company’s common stock up to an aggregate amount of $350 million. The Company purchased a total of 3.29 million shares under this authorization during 2021 at a cost of $212 million. No additional shares have been repurchased under this authorization since 2021; accordingly, a total of $138 million remains available for share repurchases at December 31, 2024.

Although the ultimate determination of whether to pay dividends is within the sole discretion of the Board and is based on a variety of factors, the Company plans to continue paying dividends consistent with historical practice as earnings and the Company’s liquidity permit. Dividends per common share were $2.07 in 2024, $2.02 in 2023 and $1.92 in 2021. On February 12, 2025, the Company declared a regular quarterly dividend of $0.52 per common share payable on March 10, 2025, to shareholders of record on February 26, 2025.

40 FORM 10-K SONOCO 2024 ANNUAL REPORT

The Company routinely enters into leasing arrangements for real estate (including manufacturing facilities, office space, warehouses, and packaging centers), transportation equipment (automobiles, forklifts, and trailers), and office equipment (copiers and postage machines). Lease contracts with a term of 12 months or less are not recorded in the consolidated balance sheet. Leased assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation arising from the lease. Leased assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most real estate leases, in particular, include one or more options to renew, with renewal terms that typically extend the lease term in increments from one to five years. For additional information regarding the Company’s contractual lease obligations, see Note 8 to the Consolidated Financial Statements.

As of December 31, 2024, the Company had long-term obligations to purchase electricity and steam, which it uses in its production processes, as well as long-term purchase commitments for certain raw materials, principally old corrugated containers. For additional information regarding the Company’s purchase commitment obligations, see Note 18 to the Consolidated Financial Statements.

Risk Management

As a result of operating globally, the Company is exposed to changes in foreign exchange rates. The exposure is well diversified, as the Company’s facilities are located throughout the world, and the Company generally sells in the same countries where it produces with both revenue and costs transacted in the local currency. The Company monitors these exposures and uses foreign currency forward contracts and other risk management instruments to manage exposure to changes in foreign currency cash flows and the translation of monetary assets and liabilities on the Company’s consolidated financial statements by hedging a portion of forecasted transactions that are denominated in foreign currencies, foreign currency assets and liabilities, or its net investment in foreign subsidiaries. The Company’s foreign operations are exposed to political, geopolitical, and cultural risks, but these risks are mitigated by diversification and the relative stability of the countries in which the Company has significant operations.

Because the economy in Venezuela is considered highly inflationary under U.S. GAAP, the Company considers the U.S. dollar to be the functional currency of its Venezuelan operations and uses the official exchange rate when remeasuring the financial results of those operations. Economic conditions in Venezuela have worsened considerably over the past several years and there are no indications that conditions are likely to improve in the foreseeable future. Further deterioration could result in the recognition of an impairment charge or a deconsolidation of the subsidiary. At December 31, 2024, the carrying value of the Company’s net investment in its Venezuelan operations was approximately $2.1 million. In addition, at December 31, 2024, the Company’s “Accumulated other comprehensive loss” included a cumulative translation loss of $3.8 million related to its Venezuelan operations which would need to be reclassified to net income in the event of a complete exit of the business or a deconsolidation of the Venezuelan operations.

Turkey has also been deemed to be a highly inflationary economy under U.S. GAAP since the first quarter of 2022. Accordingly, the Company considers the U.S. dollar to be the functional currency of its operations in Turkey and has remeasured monetary assets and liabilities denominated in Turkish lira to U.S. dollars with changes recorded through earnings. The cumulative impact of applying highly inflationary accounting to Turkey has been a pretax charge to earnings of $7.9 million ($6.1 million after tax), including $1.4 million ($1.1 million after tax) during 2024. The 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. dollar. 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 approximately $48.3 million as of December 31, 2024, including approximately $27.0 million of additional investment in Turkey as a result of the Eviosys acquisition

The Company is a purchaser of various raw material inputs such as recovered paper, energy, steel, aluminum, and plastic resin. The Company generally does not engage in significant hedging activities for these purchases other than for energy and, from time to time, aluminum, because there is usually a high correlation between the primary input costs and the ultimate selling price of its products. Inputs are generally purchased at market or at fixed prices that are established with individual suppliers as part of the purchase process for quantities expected to be consumed in the ordinary course of business. On occasion, where the correlation between selling price and input price is less direct, the Company may enter into derivative contracts such as futures or swaps to manage the effect of price fluctuations. In addition, the Company may occasionally use traditional, unleveraged interest-rate swaps to manage its mix of fixed and variable rate debt and control its exposure to interest rate movements within select ranges.

At December 31, 2024, the Company had derivative contracts outstanding to hedge the prices on a portion of anticipated natural gas and aluminum purchases. These contracts, some of which qualify as cash flow hedges, include natural gas swaps totaling approximately 5.25 million metric million British thermal units (“MMBTUs”) and aluminum swaps totaling 3,546 metric tons. These contracts have various maturity dates ranging through December 2025. The total fair market value of these instruments resulted in a net gain position of $1.0 million and net loss position of $6.8 million at December 31, 2024 and December 31, 2023, respectively.

The Company routinely enters into derivative currency contracts to mitigate the risk of unfavorable fluctuations in the exchange rate on certain anticipated foreign currency cash flows. These contracts qualify as cash flow hedges and have various maturity dates ranging through December 2024. The total market value of these instruments resulted in a net loss position of $4.9 million at December 31, 2024 and a net gain position of $1.5 million at December 31, 2023. At December 31, 2024, the total notional amount of these contracts, in U.S. dollar terms, was $89 million, of which $18 million related to the Mexican peso, $30 million to the Polish zloty, $8 million to the Canadian dollar, $23 million to the Danish krone, $6 million to the Colombian peso, $5 million to the Czech koruna and $(1) million to all other currencies. In addition, the Company had various currency contracts outstanding to hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables. Although placed as economic hedges, the Company does not apply hedge accounting to these instruments. As such, changes in fair value are recorded directly to income and expense in the periods that they occur.

In 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S. dollar denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The swap agreements, which had a maturity of December 18, 2026, provided for the Company to receive semi-annual interest payments in U.S. dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate. The risk management objective of entering into the swap agreements was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros. The agreements were designated as net investment hedges for accounting purposes.

The gain or loss on the net investment hedge derivative instruments is included in the “Foreign currency translation” component of “Accumulated other comprehensive loss” until the net investment is sold, diluted, or liquidated. Interest payments received for the cross-currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Consolidated Statements of Income. The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S. dollar exchange rate market.

41 FORM 10-K SONOCO 2024 ANNUAL REPORT

On April 15, 2024, as a result of the strengthening of the U.S. dollar against the euro, as well as a reduction in the differential between U.S. and European interest rates, the Company terminated its swap agreements and received a net cash settlement of $9.1 million. The foreign currency translation gain of approximately $3.1 million, net of tax, is included as a component of “Accumulated other comprehensive loss.”

Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500 million to effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The new swap agreements, which have a maturity of May 1, 2027, share the same risk management objective as the terminated cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

In December 2024, the Company entered into additional cross-currency swap agreements with a total notional amount of $1.5 billion, including $500 million maturing on September 1, 2026, $500 million maturing on September 1, 2029, and $500 million maturing on May 1, 2030. The swaps effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt at the prevailing market rate at execution. The new swap agreements share the same risk management objective as the Company’s previously existing cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

The fair value of the Company’s net investment hedges was a gain position of $11.9 million and a loss position of $(5.1) million at December 31, 2024 and December 31, 2023, respectively. Foreign currency translation gain of $8.9 million (net of income taxes of $3.0 million) and loss of $3.8 million (net of income taxes of $1.3 million) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at December 31, 2024 and December 31, 2023, respectively.

In anticipation of the offering of the Notes, the Company entered into treasury lock derivative instruments with eleven banks, with a total notional principal amount of $900 million, on August 29, 2024. These instruments had the risk management objective of reducing the Company’s exposure to increases in the underlying Treasury index up to the date of pricing of the Notes. The derivatives were settled when the Notes priced on September 17, 2024, with the Company recognizing a loss on the settlement of $11.1 million. The loss is included in “Interest expense” in the Company’s Consolidated Statements of Income for the year ended December 31, 2024.

The total fair market value of the Company’s derivatives was a net favorable position of $8.0 million and a net unfavorable position of $10.4 million at December 31, 2024 and December 31, 2023, respectively. Derivatives are marked to fair value using published market prices, if available, or using estimated values based on current price quotes and a discounted cash flow model. See Note 12 to the Consolidated Financial Statements for more information on financial instruments.

The Company has an investment in preferred stock of a nonaffiliated private company that is accounted for under the measurement alternative of cost less impairment, adjusted for any qualifying observable price changes. Observable price changes would consist of Level 2 inputs based on privately negotiated transactions with the nonaffiliated company. The preferred stock balance of $21.2 million is included in “Other assets” in the Company’s Consolidated Balance Sheet as of December 31, 2024.

The Company is subject to various federal, state and local environmental laws and regulations in the United States and in each of the countries where we conduct business, concerning, among other matters, solid waste disposal, wastewater effluent and air emissions. Although the costs of compliance have not been significant due to the nature of the materials and processes used in manufacturing operations, such laws also make generators of hazardous wastes and their legal successors financially responsible for the cleanup of sites contaminated by those wastes. The Company has been named a potentially responsible party at several environmentally contaminated sites. These regulatory actions and a small number of private party lawsuits are believed to represent the Company’s largest potential environmental liabilities. The Company had accrued $7.0 million at December 31, 2024 with respect to these sites, including $5.1 million related to environmental contingencies at a site in Spartanburg, South Carolina, that is part of the Company’s Thermoformed and Flexibles Packaging business and part of the pending sale of TFP to Toppan. See “Environmental Charges” in Item 3 – Legal Proceedings and Note 18 to the Consolidated Financial Statements for more information on environmental matters.

Critical Accounting Estimates

The MD&A is based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and assumptions on an ongoing basis, including but not limited to those related to inventories, bad debts, derivatives, income taxes, share-based compensation, goodwill, intangible assets, restructuring, pension and other postretirement benefits, environmental liabilities, and contingencies and litigation. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The results of these estimates may form the basis of the carrying value of certain assets and liabilities and may not be readily apparent from other sources. Actual results could differ from those estimates. The impact of and any associated risks related to estimates, assumptions and accounting policies are discussed in the MD&A, as well as in the Notes to the Consolidated Financial Statements, if applicable, where such estimates, assumptions and accounting policies affect the Company’s reported and expected financial results.

The Company believes the accounting policies discussed in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K are critical to understanding the results of its operations. The following discussion represents those policies that involve the more significant judgments and estimates used in the preparation of the Company’s Consolidated Financial Statements.

Business Combinations

The Company’s acquisitions of businesses are accounted for in accordance with ASC 805, “Business Combinations.” The Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquired business at their fair values as of the date of acquisition. Goodwill is measured as the excess of the consideration transferred, also measured at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method of accounting requires us to make significant estimates and assumptions regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, property, plant, and equipment, deferred tax asset valuation allowances, liabilities including those related to debt, pensions and other postretirement plans, uncertain tax positions, contingent consideration, and contingencies. This method also requires us to refine these estimates over a measurement period not to exceed one year to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on our financial condition and results of operations.

42 FORM 10-K SONOCO 2024 ANNUAL REPORT

Significant estimates and assumptions in estimating the fair value of acquired patents, customer relationships, trade names, proprietary technology, and other identifiable intangible assets include future cash flows that the Company expects to generate from the acquired assets, discount rate, customer attrition rate, and long-term revenue growth projections. Projecting discounted future cash flows requires the Company to make significant estimates regarding projected revenues, projected earnings before interest, taxes, depreciation, and amortization margins, discount rates and customer attrition rates. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, the Company could record impairment charges.

In addition, the Company has estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation on property, plant, and equipment and amortization expense on definite-lived intangible assets. If the estimates of the economic lives change, depreciation or amortization expenses could be increased or decreased, or the acquired asset could become impaired.

For leases acquired in a business combination, the Company measures the lease liability at the present value of the remaining lease payments, as if the acquired lease were a new lease of the Company at the acquisition date. When the implicit rate in the acquired lease is not readily determinable, the Company calculates the lease liabilities using discount rates based upon the Company’s incremental secured borrowing rate for the region in which the acquisition was completed. An assessment of the certainty associated with the exercise of any lease renewal, termination, and purchase options included in the acquired lease contracts is also performed. The Company measures the right-of-use asset at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms.

Impairment of Long-Lived, Intangible, and Other Assets

Assumptions and estimates used in the evaluation of potential impairment can result in adjustments affecting the carrying values of long-lived, intangible and other assets and the recognition of impairment expense in the Company’s Consolidated Financial Statements. The Company evaluates its long-lived assets (property, plant and equipment), definite-lived intangible assets and other assets (including right of use lease assets, notes receivable and equity and other investments) for impairment whenever indicators of impairment exist, or when it commits to sell the asset. If the sum of the undiscounted expected future cash flows from a long-lived asset or definite-lived intangible asset group is less than the carrying value of that asset group, an asset impairment charge is recognized. Key assumptions and estimates used in the projection of expected future cash flows generally include price levels, sales growth, profit margins and asset life. The amount of an impairment charge, if any, is calculated as the excess of the asset’s carrying value over its fair value, generally represented by the discounted future cash flows from that asset or, in the case of assets the Company evaluates for sale, estimated sale proceeds less costs to sell. The Company takes into consideration historical data and experience together with all other relevant information available when estimating the fair values of its assets. However, fair values that could be realized in actual transactions may differ from the estimates used to evaluate impairment. In addition, changes in the assumptions and estimates may result in a different conclusion regarding impairment.

Impairment of Goodwill

The Company assesses its goodwill for impairment annually and from time to time when warranted by the facts and circumstances surrounding individual reporting units or the Company as a whole. If the fair value of a reporting unit exceeds the carrying value of that reporting unit, there is no impairment. If the carrying value of a reporting unit exceeds the fair value of that reporting unit, an impairment charge to goodwill is recognized for the excess. The Company’s reporting units, as determined in accordance with ASC 350, “Intangibles-Goodwill and Other,” are the same as, or one level below, its operating segments, as determined in accordance with ASC 280, “Segment Reporting.”

The Company completed its most recent annual goodwill impairment testing during the third quarter of 2024. For testing purposes, the Company performed an assessment of each reporting unit using either a qualitative evaluation or a quantitative test. The qualitative evaluations considered factors such as the macroeconomic environment, the industry, the Company’s overall financial performance, the current and projected financial performance of specific reporting units, and business strategy changes. The quantitative tests, described further below, relied on the current outlook of reporting unit management for future operating results and took into consideration, among other things, specific business unit risk, the countries in which the reporting units operate, and implied fair values based on comparable trading multiples.

When performing a quantitative analysis, the Company estimates the fair value of its reporting units using a weighted average of the income and market approaches. Under the income approach, the Company uses a discounted cash flow model based on projections of future years’ operating results and associated cash flows. The Company’s assessments reflect significant management assumptions and estimates related to the Company’s forecast of sales growth, gross profit margins and discount rates, which are validated by observed comparable trading and transaction multiples based on guideline public companies under the market approach. The Company’s model discounts projected future cash flows, forecasted over a five-year period, with an estimated residual growth rate. The Company’s projections incorporate management’s estimates of the most-likely expected future results. Projected future cash flows are discounted to present value using a discount rate that management believes is appropriate for the reporting unit.

The Company’s assessments, whether qualitative or quantitative, incorporate management’s expectations for the future, including forecasted growth rates and/or margin improvements. Therefore, should there be changes in the relevant facts and circumstances and/or expectations, management’s conclusions regarding goodwill impairment may change as well.

In considering the level of uncertainty regarding the potential for goodwill impairment, management has concluded that any such impairment would, in most cases, likely be the result of adverse changes in more than one assumption. Management considers the assumptions used to be its best estimates across a range of possible outcomes based on available evidence at the time of the assessment. Other than in the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units, there is no specific singular event or single change in circumstances management has identified that it believes could reasonably result in a change to the expected future results in any of its reporting units sufficient to result in goodwill impairment. In management’s opinion, a change of such magnitude would more likely be the result of changes to some combination of the factors identified above, a general deterioration in competitive position, introduction of a superior technology, significant unexpected changes in customer preferences, an inability to pass through significant raw material cost increases, and other such items as identified in “Item 1A. Risk Factors” in this Annual Report on Form 10-K.

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

43 FORM 10-K SONOCO 2024 ANNUAL REPORT

Sensitivity Analysis

In the 2024 annual goodwill impairment analysis, projected future cash flows for the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units were discounted at 11.5%, 10.5%, and 11.0%, respectively, and their estimated fair values were determined to exceed their individual carrying values by approximately 18.7%, 18.9%, and 12.6%, respectively. Based on the discounted cash flow model and holding other valuation assumptions constant, the discount rates for the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units would have to increase to 13.8%, 12.4%, and 12.1%, respectively, in order for the estimated fair values of the reporting units to fall below their carrying values. Total goodwill associated with the Plastics-Medical, Plastics-Food, and Metal Packaging reporting units was $63.6 million, $198.8 million, and $384.3 million, respectively, at December 31, 2024. The goodwill of the Plastics-Medical and Plastics-Food reporting units are reflected in “Non-current assets of discontinued operations” in the Company’s Consolidated Balance Sheets at December 31, 2024.

Income Taxes

The Company follows ASC 740, Accounting for Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not such assets will not be realized. Deferred tax assets generally represent expenses that have been recognized for financial reporting purposes, but for which the corresponding tax deductions will occur in future periods. The valuation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns and future profitability. Our accounting for deferred tax consequences represents our best estimate of those future events. Changes in our current estimates, due to unanticipated events or otherwise, could have a material impact on our financial condition and results of operations.

For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those positions not meeting the more-likely-than-not standard, no tax benefit has been recognized in the financial statements. Associated interest has also been recognized, where applicable.

The estimate for the potential outcome of any uncertain tax issue is highly judgmental. The Company believes it has adequately provided for any reasonably foreseeable outcome related to these matters. However, future results may include favorable or unfavorable adjustments to estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitations on potential assessments expire. Additionally, the jurisdictions in which earnings or deductions are realized may differ from current estimates. As a result, the eventual resolution of these matters could have a different impact on the effective rate than currently reflected or expected.

Share-Based Compensation Plans

The Company utilizes share-based compensation in the form of restricted stock units (“RSUs”), performance contingent restricted stock units (“PCSUs”), and other share-based awards. The fair value of the Company’s RSUs is equal to the closing price of the Company’s stock on the date of grant discounted for any projected dividends that are not eligible to be received during the vesting period. The amount of share-based compensation expense associated with PCSUs is based on estimates of future performance using measures defined in the stock plan descriptions for each award granted. As of December 31, 2024, these performance measures include the following:

•Adjusted earnings per share — three-year sum of forecasted future and historical annual adjusted earnings per share for the three-year measurement period associated with each award; and

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

Changes in estimates regarding the future achievement of these performance measures may result in significant fluctuations from period to period in the amount of share-based compensation expense recognized in the Company’s Consolidated Financial Statements. For the PCSU awards granted in 2024 and 2023, the performance payouts will be subject to further adjustment by a total stock return modifier as determined by the Company’s relative performance within its targeted peer group for each grant. See Note 14 to the Consolidated Financial Statements for additional information on the Company’s share-based compensation plans.

Pension and Postretirement Benefit Plans

The Company has significant pension and postretirement benefit liabilities and costs that are measured using actuarial valuations. The largest of the Company’s pension and postretirement plans include the U.S.-based Sonoco Pension Plan, the U.S. nonqualified retirement plans, the U.S. Retirement and Retiree Health and Life Insurance Plan, the RTS Packaging Pension Plan, and the Sonoco U.K. Retirement Benefits Plan. On December 4, 2024, the Company completed the acquisition of Eviosys, which included the assumption of several defined benefit plans (the “Eviosys Plans”). At the time of the acquisition, the Eviosys Plans had a projected benefit obligation (“PBO”) of $74.1 million and plan assets of $21.2 million resulting in a net unfunded pension obligation of $52.8 million.

The actuarial valuations used to evaluate the plans employ key assumptions that can have a significant effect on the calculated amounts. The key assumptions used at December 31, 2024 in determining the PBO and the accumulated benefit obligation for retirement and retiree health and life insurance plans include discount rates and rates of compensation increase. The key assumptions used to determine the 2024 net periodic benefit cost for retirement and retiree health and life insurance plans include discount rates, expected long-term rate of return on plan assets, and rates of compensation increase.

The Company adjusts its discount rates at the end of each fiscal year based on yield curves of high-quality debt instruments over durations that match the expected benefit payouts of each plan. The expected rate of return assumption is derived by taking into consideration the targeted plan asset allocation, projected future returns by asset class and active investment management. A third-party asset return model is used to develop an expected range of returns on plan investments over a 12- to 15-year period, with the expected rate of return selected from a best estimate range within the total range of projected results. The Company periodically re-balances its plan asset portfolio in order to maintain the targeted allocation levels. The rate of compensation increase assumption is generally based on salary and incentive compensation increases.

44 FORM 10-K SONOCO 2024 ANNUAL REPORT

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

Another key assumption for the U.S. retiree health and life insurance plan is a medical cost trend rate beginning at 7.28% for post-age 65 participants and trending down to an ultimate rate of 4.5% in 2035. The ultimate trend rate of 4.5% represents the Company’s best estimate of the long-term average annual medical cost increase over the duration of the plan’s liabilities. It provides for real growth in medical costs in excess of the overall inflation level.

Other assumptions and estimates impacting the projected liabilities of these plans include inflation, participant withdrawal and mortality rates, and retirement ages. The Company evaluates the assumptions used in projecting the pension and postretirement liabilities and associated expenses annually. These judgments, assumptions and estimates may affect the carrying value of pension and postretirement plan net assets and liabilities and pension and postretirement plan expenses in the Company’s Consolidated Financial Statements. See Note 15 to the Consolidated Financial Statements for additional information on the Company’s pension and postretirement plans.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is provided in Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.