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December 13, 2021updated 24 Dec 2021 5:47am

Sonoco aims to increase annual EBITDA to $1bn in five years

The company expects its base earnings for each diluted share for FY22 to be between $3.85 and $3.95.

US-based diversified packaging company Sonoco has revealed an outline of the company’s five-year strategic plan and financial guidance for the fiscal year 2022 (FY22).

Over the next five years, the company plans to increase its annual earnings before interest, taxes, depreciation and amortisation (EBITDA) to $1bn.

Sonoco plans to undertake various measures to achieve this, including investing in its key consumer and industrial businesses and pursuing acquisitions that improve its portfolio.

For FY22, the company expects its earnings for each diluted share to be between $3.85 and $3.95.

In addition, the company has set a mid-point goal of $3.90 to a diluted share and a mid-point operating cash flow target of around $585m for the full year.

Sonoco also expects its full-year 2021 earnings for each diluted share to be a loss of between $0.81 and $0.97 calculated according to generally accepted accounting principles (GAAP).

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The company’s fourth-quarter GAAP earnings for each diluted share are expected to be between $0.54 and $0.70.

Sonoco has forecast an operating cash flow in the range of $520m to $550m and a free cash flow of $270m to $300m for 2021.

Sonoco president and CEO Howard Coker said: “We believe Sonoco is coming out of the pandemic well-positioned with strong businesses, a strong balance sheet and solid cash flow.

“Despite headwinds, we’ve exhibited solid growth and are managing price and cost in the face of unprecedented inflation.

“We’re excited about 2022 and expect to drive record top-line and bottom-line results.

“We’ll continue investing in the long-term potential of our core businesses, while remaining committed to returning cash to our shareholders.”

Sonoco supplies packaging solutions for the consumer, industrial, healthcare and protective packaging sectors.

The company currently operates a network of more than 300 locations in 34 countries, employing a total of 19,000 people.

In April this year, it sold its domestic display and packaging business to mill-to-market company Hood Container for $80m in cash.

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