SON 10-K & 10-Q changes, risk factors and insider trading

We have operations throughout North and South America, Europe, Australia and Asia, with approximately 315265 owned and leased facilities in 4037 countries as of December 31, 2024.2025. In 2024,2025, approximately 33%52% of consolidated sales came from operations outside of the United States, andreflecting wethe significantlysignificant expandedexpansion of our international operations with the December 2024 acquisition of Eviosys in December 2024.Eviosys. Management of global operations is extremely complex, and operations in foreign countries are subject to local statutory and regulatory requirements, differing legal environments, and other additional risks that may not exist, or be as significant, in the United States. These additional risks, which can vary substantially by country and by region, can adversely affect our business operations and financial results, and include, without limitation:

•compliance with and changes in applicable foreign laws and regulations, including with respect to data privacy, artificial intelligence (“AI”),AI, consumer protection, environmental and antitrust matters;

•political, social, legal and economic instability, civil unrest, warwar, expansion of same and other geopolitical tensions (such as the ongoing conflictsconflict between Russia and Ukraine and uncertainty in the Middle EastEast, the potential escalation of tensions between China and Taiwan, and the potential impact of recent events in Venezuela on Latin America), catastrophic events, acts of terrorism, and health emergencies or widespread outbreaks of infectious diseases (such as COVID-19).diseases.

We have extensive international operations and are dependent on customers and suppliers that operate in local economies around the world. In addition, we access global credit markets as part of our capital allocation strategy. Adverse global macroeconomic conditions could adversely impact our ability to access credit, or the price at which funding could be obtained. Likewise, uncertainty about or a decline in global or regional economic conditions has in the past and could in the future have a significant impact on the financial stability of our suppliers and customers, and has and can in the future adversely impact demand for our products. For example, during the COVID-19 pandemic, we previously experienced adverse effects on customer stability and demand for our products. Potential effects on us include financial instability, inability to obtain credit to finance operations, and insolvency.

Furthermore, export control laws and economic sanctions may prohibit the shipment of certain products to, and related transactions involving, embargoed or otherwise sanctioned countries, governments and persons, and may prohibit us from engaging in certain activities in connection with such countries, governments, and persons. Despite our efforts to ensure compliance with applicable law, we cannot guarantee that a violation of export control laws or economic sanctions will not occur. A prohibited shipment, transaction, or activity could have adverse consequences, including government investigations, inquiries, or subpoenas, penalties, fines, civil and criminal sanctions, and reputational harm. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons, activities, or technologies targeted by such regulations, could decrease our ability to export or sell our products internationally. Any limitation on our ability to export or sell our products could adversely affect our business. For example, in 2022, following Russia’s invasion of Ukraine and the imposition of economic sanctions against Russia by the United States and other countries, we finalized the exit from our operations in Russia, which consisted of two small manufacturing operations, and incurred asset impairment charges as a result of our exit. We also ceased sourcing from Russian suppliers. As part of the Eviosys acquisition,acquisition in December 2024, we acquired certain existing operations in Russia. WhileThese weoperations are still evaluating these operations, Russia carriescarry a heightened risk from an export controls and sanctions perspective, including export control restrictions and restrictions concerning transactions involving sanctioned persons and the provision of certain services and investments. These export controlcontrols and sanctions restrictions may impair our ability to leverage these Russian operations and adversely affect its financial condition.operations. We expect that continuing to operate in Russia in compliance with applicable U.S., EU, UK, and other laws and regulations will require us to expend substantial resources and devote significant management attention. Any failure to comply with applicable requirements could expose us to significant penalties, expenses incurred relating to government investigations, inquiries, or subpoenas, and reputational harm. Although we have policies and procedures in place to promote compliance with such laws, there can be no assurance that they will be followed at all times or effectively detect and prevent all a violations of export control laws and economic sanctions in connection with these operations in Russia will not occur.Russia. U.S., EU, UK, and other economic sanctions, export controls and related laws and regulations may increase and make continuing such Russia operations impracticable or impossible. Further, the Russian government has recently seized the assets of several Western companies, including metal can manufacturers, placing them under state control, or “temporary administration,” and Russia or another country could take similar actions in the future. Our operations in Russia accounted for approximately 1% of the Company’s net sales in 2025 and approximately 0.5% of the Company’s total assets at December 31, 2025.

Export control laws and economic sanctions may also have an indirect adverse effect on our business. For example, some of our customers previously exported their products to Russia, and any reduction in demand for such customers’ products could in turn reduce demand for our products. Economic sanctions against Russia have also contributed to adverse changes in the global price and availability of natural gas, raw materials and finished goods, which could reduce our sales and earnings or otherwise have an adverse effect on our operations. Any future additional export controls or sanctions imposed by the United States,US, the United Kingdom,UK, the European Union,EU, or other countries could further exacerbate these effects.

In addition, in Julyresponse 2020,to the United States-Mexico-Canada Agreement,Agreement which replaced the North American Free Trade Agreement, became effective. In response to this agreement,(“USMCA”), other countries may change their own trade policies, including the imposition of additional tariffs and quotas, which could also adversely affect our business outside the United States. If further tariffs are imposed on a broader range of imports, further retaliatory trade measures are taken by countries in response to tariffs, or efforts are made to withdraw from or substantially modify such agreements, then we may be required to raise our prices or incur additional expenses, which may result in the loss of customers and harm our sales, earnings, business, financial condition, and results of operations. Furthermore, the duty preferential treatment for goods that qualify for the USMCA was temporarily exempted from the United States 25% tariff on Mexican and Canadian goods, and although Canada imposed retaliatory tariffs on goods coming from the United States that did not originally exempt USMCA-qualified goods, Canada lifted many of its retaliatory tariffs in September 2025, apart from those on steel, aluminum, and autos. Some of the enumerated goods subject to these tariffs include products and materials shipped to Sonoco’s plants in Canada, and the Company may be unable to claim end-use exemptions to mitigate the impact of such tariffs. These or any future retaliatory measures, the removal of the exemption by the United States, or other changes to the USMCA or other trade arrangements, could impact our operations by increasing the cost of imported raw materials and finished goods from Canada and Mexico.

Fluctuations in currency exchange rates can cause, and have in the past caused, translation, transaction and other losses that can unpredictably and adversely affect our consolidated results of operations. Our reporting currency is the U.S. dollar. However, as a result of operating globally, a portion of our consolidated net sales, costs, assets, and liabilities are denominated in currencies other than the U.S. dollar. In our consolidated financial statements, we translate the local currency financial results of our foreign operations into U.S. dollars based on their respective exchange rates. Depending on the direction, changes in those rates will either increase or decrease net sales, costs, net income, and other balances reported in U.S. dollars. Our acquisition of Eviosys increasesincreased our exposure to the effects of such changes. Although we monitor our exposures and, from time to time, may use forward currency contracts to hedge certain forecasted foreign currency transactions or foreign currency denominated assets and liabilities, our hedging activities do not completely insulate us from the effects of foreign currency fluctuations and also expose us to counterparty risk of nonperformance.

Because of the nature of our products and services, general economic downturns in the United States and globally can adversely affect our business operations and financial results. Current global economic challenges, including inflationary pressures, supply chain disruptions, changing tariffs and other trade restrictions, currency fluctuations, geopolitical uncertainty, military conflicts, increased interest rates and recession risks, as well as the rising debt levels of the United States and other countries, are likely to continue to put pressure on the economy, and on us. For example, during 2022 and 2023, the U.S. Federal Reserve raised its benchmark interest rate by a total of 525 basis points during 2022 and 2023 in order to combat inflation. Although the Federal Reserve subsequently lowered rates by a total of 100175 basis points induring three separate actions in September, November,2024 and December2025, 2024, and has indicated that it expects to further reduce interest rates in 2025,relatively high interest rates may persist and may, among other things, reduce the availability and increase the costs of obtaining new variable rate debt and refinancing existing indebtedness, and adversely impact our financial condition and results of operations. Additionally, such increases in rates put additional pressure on consumers and the economy in general, which can in turn lead, and has in recent periods led, to reduced consumption of products incorporating our packaging. Bank failures or issues in the broader U.S. or global financial systems may have an impact on the broader capital markets and, in turn, our ability to access those markets. As evidenced in recent years, changes in fiscal and monetary policies and tightening of credit availability and financial difficulties, leading to declines in consumer and business confidence and spending, may adversely affect us, or our customers, suppliers, and distributors. When such conditions exist, customers may delay, decrease or cancel purchases from us, and may also delay payment or fail to pay us altogether. Suppliers may have difficulty filling our orders and distributors may have difficulty getting our products to market, which may affect our ability to meet customer demands, and result in loss of business. Weakened global economic conditions may also result in unfavorable changes in our product price/mix and lower profit margins. We have experienced most of these conditions to some extent as a result of the global economic impact of the pandemic. All of these factors may have a material and adverse effect on our business, results of operations, financial condition, and prospects.

As a manufacturer, our sales and profitability are dependent on the availability and cost of raw materials, labor, and other inputs. Most of the raw materials we use are purchased from third parties. Principal examples are recovered paper, paperboard, steel, aluminum and plastic resins. Prices and availability of these raw materials are subject to substantial fluctuations that are beyond our control due to factors such as changing economic conditions, inflation, currency and commodity price fluctuations, tariffs, resource availability, transportation costs, weather conditions and natural disasters, war, political unrest and instability (such as the ongoing conflictsconflict between Russia and Ukraine and uncertainty in the Middle EastEast, the potential escalation of tensions between China and Taiwan, and the potential impact of recent events in Venezuela on Latin America), and other factors impacting supply and demand pressures. Increases in costs can have an adverse effect on our business and financial results. Our performance depends, in part, on our ability to pass on cost increases to our customers by raising selling prices and to offset the impact by improving productivity. Although many of our long-term contracts and non-contractual pricing arrangements with customers permit limited price adjustments to reflect increased raw material costs, such adjustments may not occur quickly enough, or be sufficient to prevent a material and adverse effect on net income and cash flow. Furthermore, we may not be able to improve productivity or realize sufficient savings from our cost reduction initiatives to offset the impact of increased costs.

We continually strive to serve our customers and increase returns to our shareholders through innovation and improved operating performance by investing in productivity improvements, manufacturing efficiencies, manufacturing cost reductions, and the rationalization of our manufacturing facilities footprints. However, our operations include complex manufacturing systems as well as intricate scheduling and numerous geographic and logistical complexities, and our business initiatives are subject to significant business, economic, and competitive uncertainties and contingencies. We may not meet anticipated implementation timetables or stay within budgeted costs, and we may not fully achieve expected results. These initiatives could also adversely impact customer or employee retention or our operations. Additionally, our business strategies may change from time to time in light of our ability to implement new business initiatives, competitive pressures, economic uncertainties or developments, or other factors. A variety of risks could cause us not to realize some or all of the expected benefits of these initiatives. These risks include, among others, delays in the anticipated timing of activities related to such initiatives, strategies, and operating plans; increased difficulty and costs in implementing these efforts; and the incurrence of other unexpected costs associated with operating the 12 FORM 10-K SONOCO 2025 ANNUAL REPORT business. As a result, there can be no assurance that we will realize these benefits. If, for any reason, the benefits we realize are substantially less than our estimates, or the implementation of these growth initiatives and business strategies adversely affects our operations, costs significantly more or takes significantly longer to effectuate than we expect, or if our assumptions prove inaccurate, our results of operations may be materially and adversely affected.

Although we take measures to minimize the risks of disruption at our facilities, we from time to time encounter an unforeseen material operational disruption in one of our major facilities, which could adversely impact production and our financial results. Such a disruption could occur as a result of any number of events including but not limited to: political events, trade and other international disputes, war (such as the ongoing conflict between Russia and Ukraine as well as the economic sanctions related thereto, and the ongoing conflictsuncertainty in the Middle EastEast, the potential escalation of tensions between China and Taiwan, and the potential impact of recent events in Venezuela on Latin America), terrorism, industrial accidents, major equipment failure, labor stoppages, transportation failures affecting the supply and shipment of materials, disruptions at our suppliers, fire, severe weather conditions (including as a result of climate change), natural disasters and disruptions in utility services, as well as disruptions related to localized or widespread public health events (including epidemics or pandemics, such as the COVID-19 pandemicpandemics). These types of disruptions could materially and adversely affect our earnings to varying degrees depending upon the facility, the duration of the disruption, and our ability to shift business to another facility or find alternative sources of materials or energy. Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles.

We continually evaluate potential acquisitions and strategic investments that are significant to our business both in the United States and internationally. We have invested a substantial amount of capital in acquisitions, joint ventures, and strategic investments, including our acquisition of Eviosys in December 2024, the acquisitionsacquisition of a paper mill in Chattanooga, Tennessee (the “Chattanooga Mill”) and the remaining equity interest in RTS PackagingPackaging, LLC in September 2023, and the acquisition of Metal Packaging in January 2022, and we expect that we will continue to evaluate potential acquisitions, joint ventures, and strategic investments in the future. Acquisitions, joint ventures, and strategic investments involve numerous risks. As has happened from time to time in the past, acquired businesses may not achieve the expected levels of revenue, profitability or productivity, or otherwise perform as expected, and acquisitions may involve significant cash expenditures, debt incurrence, operating losses, and expenses that could have a material and adverse effect on our financial condition and results of operations. Acquisitions also involve special risks, including, without limitation, the impairment of goodwill and other intangible assets, the potential assumption of unanticipated liabilities and contingencies, and the challenges of effectively integrating acquired businesses.

•challenges associated with operating in new geographic regions and competitive environments;

We have made numerous acquisitions in recent years and have been actively considering new acquisitions that provide meaningful opportunities for growth. However, we may not be able to identify suitable acquisition candidates or complete acquisitions on acceptable timing, terms, and conditions. Other companies in our industries have similar investment and acquisition strategies to ours, and competition 13 FORM 10-K SONOCO 2025 ANNUAL REPORT for acquisitions may intensify. If we are unable to identify acquisition candidates that meet our criteria, our potential for growth may be restricted. Even if we do identify acquisition candidates that we believe meet our criteria, we may be unable to complete such acquisitions in a timely manner, on desirable terms or at all, including as a result of an inability to satisfy related closing conditions or obtain necessary government consents, or the expiration or termination of applicable regulatory waiting periods. For example, our ability to close certain of our prior acquisitions have in some cases been delayed due to regulatory review or other constraints. Our efforts to identify suitable acquisition candidates, even if successful, could also cause us to incur substantial search and transaction fees, divert the time and attention of our management, or fail to identify due diligence or other issues affecting the value and suitability of potential acquisition targets. Any of these results could have a material and adverse effect on our business, results of operations, financial condition, and prospects.

From time to time, we have closed higher-cost facilities, implemented reductions in force, sold non-core assets and businesses, and otherwise restructured operations, and are likely to do so againagain, in an effort to improve cost competitiveness and profitability and reduce leverage. For example, in 20242025 we completed the divestitures of TFP and ThermoSafe, and in 2024, we completed the divestiture of Protexic, which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets, reached an agreement to sell TFP, and we have initiated a review of strategic alternatives for our ThermoSafe business.Protexic. In addition, induring 2024,2024 and 2025, we permanently closed oura uncoated paperboardpaper mill operationsin Mexico and a paper mill in Sumner,the WashingtonUnited States as part of our strategy to rationalize our mill network and lower operating costs.costs, Inclosed 2023metal wecan divestedfacilities ourin U.S.France and Mexico BulkSak businesses, sold our timberland properties,Spain, and closed several other high-cost operations. As a result, restructuring and divestiture costs have been, and are expected to continue to be, a recurring component of our operating costs, the magnitude of which could vary significantly from year to year depending on the scope of such activities. Divestitures and restructuring may result, and have in the past resulted, in significant financial charges for the write-off or impairment of assets, including goodwill and other intangible assets. Furthermore, such activities may divert the attention of management, disrupt our ordinary operations, or result in a reduction in the volume of products produced and sold, and the impact of divestitures on our revenue growth may be larger than we anticipate if we experience greater dis-synergies than we expect. In addition, in cases where we seek to divest or otherwise dispose of certain facilities, operations, assets, or other components of our business, we may be unable to find buyers or alternative exit strategies on acceptable terms, in a timely manner or at all, and we may dispose of facilities, operations, assets, or other components of our business at prices or on terms that are less desirable than we had anticipated. Moreover, we may be prevented from completing dispositions as a result of our own or our counterparties’ failure to satisfy pre-closing conditions or obtain necessary regulatory or government approvals. We may also be exposed to continuing financial risks from any businesses we divest, including as a result of continuing equity ownership, guarantees, indemnities, responsibility for environmental clean-up, or other financial obligations. There is no guarantee that any such activities will achieve our goals, and if we cannot successfully manage the associated risks, our financial position and results of operations could be adversely affected.

In addition, because we share ownership and management with our joint venture partners, we may have limited control over the actions of a joint venture, particularly when we own a minority interest. As a result, we may be unable to prevent violations of applicable laws or other misconduct by a joint venture, or the failure to satisfy contractual obligations by one or more parties. Moreover, a joint venture may not be 13 FORM 10-K SONOCO 2024 ANNUAL REPORT subject to or follow the same requirements regarding compliance, internal controls and internal control over financial reporting that we follow. To the extent another party makes decisions that adversely impact the joint venture or internal control issues arise within the joint venture, we may have to take responsive actions, or we may be subject to penalties, fines, or other punitive actions for these activities.

We sell our products in highly competitive markets. We regularly bid for new and continuing business, and being a responsive, high-quality, low-cost producer is a key component of competing effectively. We also face competition that may be larger, more diversified, or better funded than us. These competitive advantages may enable our competition to adapt more quickly to changing customer or consumer preferencespreferences, including with respect to more sustainable products and packaging; changes brought about by public health events, supply chain constraints, 14 FORM 10-K SONOCO 2025 ANNUAL REPORT inflationary pressures, currency fluctuations, geopolitical uncertainty, and increased interest rates; or the introduction of new products, technologies, and equipment, including advanced technologies such as AI. For example, growing use of AI by our competitors could disrupt our business model and lower the barriers to entry in the markets we serve. If our competitors invest in, develop and utilize AI tools more effectively than us to innovate and introduce go-to-market solutions more rapidly and compete more effectively on quality and price, we could lose business and the profitability of our business could be reduced. We have started to cautiously introduce certain AI capabilities via Microsoft CoPilot in our environment, and some of our business solution partners have also added AI capabilities to their tooling, but usage is still minimal. Any impact arising from the use of AI by our competitors, as well as the loss of business from our larger customers, customer changes to alternative forms of packaging, or renewal of business with less favorable terms, could have a significant and adverse effect on our results of operations.

There has been increased focus from investors, customers, the general public, and certain governmental and nongovernmental authorities on climate change and GHG emissions. The increasing concern over climate change has resulted, and will continue to result, in transition risks such as shifting customer preferences in favor of more environmentally friendly products, which we may be unable to address, and increased regulation intended to reduce overall GHG emissions. Such rules and regulations could include, among other things, cap-and-trade programs, carbon taxes, and mandates within certain industries or activities to reduce GHG emissions. In the United States, the Environmental Protection Agency has issued a number of regulations under the Clean Air Act with the goal of reducing GHG emissions. Some of our facilities are subject to these regulations, and compliance with such rules and any other regulatory responses to climate change could in the future significantly increase costs and add complexity to our operations.

In order to align with customer and other stakeholder expectations, we have voluntarily established and publicly disclosed our GHG reduction targets and other environmental, social and governance (“ESG”) goals and sustainability targets. These targets could prove more costly or difficult to achieve than we expect, and we may be unable to achieve these targets at an acceptable cost or at all. If we are unable to meet these targets and goals on our projected timelines or at all, whether as a result of cost, operational or technological limitations, or if such targets or our progress against them are not perceived to be sufficiently robust, our reputation, as well as our relationships with investors, customers and other stakeholders, could be harmed, which could in turn adversely affect our business, results of operations and prospects. In addition, not all of our competitors may seek to establish climate or other ESG targets and goals, or may not establish targets and goals that are comparable to ours, which could result in our competitors achieving competitive advantages through lower supply chain or operating costs, which could adversely affect our business, results of operations, financial condition and prospects.

In addition, ESG matters have recently been the subject of increased regulatory and stakeholder attention, and emerging and evolving regulatory requirements and frameworks regarding ESG matters. The changes to existing or imposition of new laws, regulatory requirements, policies, international accords or changing interpretations thereof, changes in the enforcement priorities of regulators, and differing or competing regulations and standards across the markets where we manufacture, distribute and sell our products, as well as relating to 15 FORM 10-K SONOCO 2024 ANNUAL REPORT matters beyond our core products, including environmental sustainability, climate change, human capital and employment matters, has in the 16 FORM 10-K SONOCO 2025 ANNUAL REPORT past and could continue to result in higher production and manufacturing costs, compliance costs, capital expenditures and other costs, resulting in adverse effects on our business. In addition, we expect to need to be prepared to contend with overlapping, yet distinct, climate-related disclosure requirements in multiple jurisdictions. For instance, the State of California has enacted legislation that requires greater transparency on climate-related matters, including legislation that will require large U.S. companies doing business in California to make broad-based climate-related disclosures starting as early as 2026, and other states are also considering new climate change disclosure requirements. In the European Union, the Corporate Sustainability Reporting Directive, which became effective in 2023, but is in the process of being revised, applies to both E.U. and non-E.U. in-scope entities and would require them to provide expansive disclosures on various sustainability topics. We are assessing our obligations under these laws and expect that compliance with these and other future reporting obligations could require substantial cost and effort. Collecting, measuring, and reporting ESG information and metrics can be costly, difficult, and time-consuming, are subject to evolving reporting standards and interpretive guidance, and can present numerous operational, reputational, financial, legal, and other risks. Globally, a lack of harmonization in relation to ESG legal and regulatory reform across the jurisdictions in which we operate may increase the cost and difficulty of implementing and complying with rapidly developing ESG reporting standards and requirements, and any failure to comply with such legislation and regulations could result in fines to us and could adversely affect our business, financial condition, results of operations, and cash flows.

Changes to laws and regulations dealing with environmental, health and safety, and corporate social responsibility issues (e.g., sustainability) are made or proposed with some frequency, and some of the proposals, if adopted, might, directly or indirectly, result in a material reduction in 16 FORM 10-K SONOCO 2024 ANNUAL REPORT the results of operations of one or more of our operating units. For example, we may be subject to future policy changes and regulations that 17 FORM 10-K SONOCO 2025 ANNUAL REPORT discourage the use of single-use plastics and packaging containing per- and polyfluoroalkyl substances (PFAs), mandate certain waste management practices, recycling or the use of recycled content, or place limitations on certain kinds of packaging materials. Such regulations could both result in customers switching to other packaging formats, and therefore result in lost revenue, and result in increased costs associated with sourcing recycled resins and designing and producing products with enhanced recyclability. These or any other such policy changes or new regulations are uncertain and we cannot predict the impact on our markets or the amount of additional capital expenditures or operating expenses that could be necessary for compliance.

We have incurred, and may incur in the future, significant indebtedness, including in connection with mergers or acquisitions, which may impact the manner in which we conduct business or our access to external sources of liquidity. For example, in connection with our December 2024 acquisition of Eviosys, we issued $1.8 billion aggregate principal amount of senior unsecured notes and borrowed a total of $2.2 billion through two unsecured term loan facilities. In addition to interest payments, a significant portion of our cash flow may need to be used to service our indebtedness, and, therefore, may not be available for use in our business. In addition, althoughAlthough we plan to useused the net proceeds offrom our pending divestituredivestitures of TFP and certainThermoSafe futurein dispositions2025 to reduce our indebtedness, as required under the terms of such term loan facilities, we may be unable to complete this or other contemplated divestitures on the timing we anticipate or at all, which would further burden our debt service and operations and limit our ability to investgenerate cash from the sale of assets or divestitures of business in the future is limited following the simplification of our business.portfolio into two core global business segments. Our ability to generate cash flow is subject to general economic, financial, competitive, legislative, regulatory, and other factors that may be beyond our control. Our indebtedness could have a significant impact on us, including, but not limited to:

We are continually evaluating and pursuing acquisition opportunities and, as we have in the past, we may from time to time incur additional indebtedness to finance any such acquisitions and to fund any resulting increased operating needs. As new debt is added to our current debt levels, the related risks we face could increase. While we will have to effect any new financing in compliance with the agreements governing our then existing indebtedness, changes in our debt levels and or debt structure may impact our credit rating and costs to borrow, as well as constrain our future financial flexibility in the event of a deterioration in our financial operating performance or financial condition. At December 31, 2024,2025, scheduled debt maturities in 20252026 totaled $2.1approximately $0.5 billion.

We rely on the successful and uninterrupted functioning of our information technologies to securely manage operations and various business functions, and we rely on diverse technologies to process, store and report information about our business, and to interact with customers, vendors and employees around the world. As with all large environments, our information technologyIT systems may be susceptible to damage, disruption or shutdown due to natural disaster, hardware or software failure, obsolescence, cyberattack, support infrastructure failure, user errors or malfeasance resulting in malicious or accidental destruction of information or functionality, or other catastrophic events. In addition, we may be subject to cybersecurity-related liabilities from businesses or assets that we acquire.

Information system damages, disruptions, shutdowns or compromises could result in production downtimes and operational disruptions, transaction errors, loss of customers and business opportunities, legal liability, regulatory fines, penalties or intervention, reputational damage, reimbursement or compensatory payments, and other costs, any of which could have a material and adverse effect on our business, financial position and operations. Although we attempt to mitigate these risks by employing a number of administrative, physical, technical and process-based measures, including employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our systems, networks, products, and services remain potentially vulnerable to cyber threats. Furthermore, the tactics, techniques, and procedures used by malicious actors to obtain unauthorized access to information technologyIT systems and networks change frequently and often are not recognizable until launched against a target. Accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures. It is possible that we may in the future suffer a criminal attack whereby unauthorized parties gain access to our information technologyIT networks and systems, including sensitive, confidential or proprietary data, and we may not be able to identify and respond to such an incident in a timely manner.

We sponsor various defined benefit plans worldwide and had an aggregate PBO for these plans of approximately $472$483 million as of December 31, 2024.2025. The difference between defined benefit plan obligations and assets (the funded status of the plans) significantly affects the net periodic benefit costs and the ongoing funding requirements of the plans. Among other factors, changes in discount rates and lower-than-expected investment returns could substantially increase our future plan funding requirements and have an adverse impact on our results of operations and cash flows. As of December 31, 2024,2025, these plans held a total of approximately $304$320 million in assets consisting primarily of mutual funds and fixed income securities and mutual funds,securities, funding a portion of the PBOs of the plans. If the performance of these assets does not meet our assumptions, or discount rates decline, the net underfunding of the plans may increase and we may be required to contribute additional funds to these plans, and our pension expense may increase, which could adversely affect results of operations and shareholders’ equity.

At December 31, 2024,2025, the carrying value of the goodwill and intangible assets of our continuing operations was approximately $5.1$5.2 billion. We are required to evaluate our goodwill for impairment annually, or more frequently when evidence of potential impairment exists. The impairment test requires us to analyze a number of factors and make estimates that require judgment. As a result of this testing, we have in the past recognized goodwill impairment charges, and we have identified threetwo reporting unitsunits, Metal Packaging EMEA and Global Paper Products APAC, that are currently at risk of a future impairment charge if actualeach resultsdoes fallnot shortperform ofin expectations.line with management’s expectations, or if there is a negative change in the long-term financial outlook or in other factors such as each reporting unit’s particular discount rate used. Total goodwill associated with the Metal Packaging EMEA and Global Paper Products APAC reporting units was $1.4 billion at December 31, 2025. Future changes in the cost of capital, expected cash flows, changes in our business strategy, and external market conditions, among other factors, could require us to record an impairment charge for goodwill, which could lead to decreased assets and reduced net income. If a significant write down were required, the charge could have a material and adverse effect on our results of operations and shareholders’ equity.

We have deferred tax assets, including United States and foreign operating loss carryforwards, capital loss carryforwards, employee and retiree benefit items, foreign tax credits, and other accruals not yet deductible for tax purposes. We have established valuation allowances to reduce those deferred tax assets to an amount that we believe is more likely than not to be realized prior to expiration of such deferred tax 19 FORM 10-K SONOCO 2024 ANNUAL REPORT assets. Our ability to use these deferred tax assets depends in part upon our having future taxable income during the periods in which these temporary differences reverse or our ability to carry back any losses created by the deduction of these temporary differences. We expect to realize these assets over an extended period. However, if we were unable to generate sufficient future taxable income in the United States and certain foreign jurisdictions, or if there were a significant change in the time period within which the underlying temporary differences became taxable or deductible, we could be required to increase our valuation allowances against our deferred tax assets, which would increase our effective tax rate which could have a material and adverse effect on our reported results of operations.

As a large multinational corporation, we are subject to U.S. federal, state and local, and many foreign tax laws and regulations, all of which are complex and subject to significant change and varying interpretations. Tax laws and regulations are continuously evolving with corporate tax reform, base-erosion efforts, global minimum tax, and increased transparency continuing to be high priorities in many tax jurisdictions in which we operate. For example, changeson toJuly 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States. The OBBBA includes a broad range of tax lawsreform provisions and regulations,extends including variouscertain provisions of the Tax CutCuts and Jobs Act whichof will2017. expireWhile inwe 2025 ifdo not extended,currently mayanticipate negativelyany impactmaterial effect on our effective tax rate, financial results, or cash flows for 2026 arising from the amount ofOBBBA, any tax assets or liabilities. Changeschanges in this and othertax laws or regulations, or any change in the position of taxing authorities regarding their application, administration or interpretation, could have a material adverse effect on our business, consolidated financial condition or results of our operations.

The Organisation for Economic Co-operation and Development (“OECD”) has issued the Global Anti-BaseBase Erosion Modeland RulesProfit Shifting (“BEPS”) Pillar II”) rules which generally providesprovide for multinational organizations to have a minimum effective corporate tax rate of 15% in each jurisdiction in which they operate. While it is uncertain whether the United States will enact legislation to adopt Pillar II, certain countries in which we operate have enacted legislation, and other countries have introduced legislation to implement the minimum tax directive. Many aspects of Pillar II were effective for us in 2025, with additional components becoming effective in 2026. We do not currently anticipate any material effect on our effective tax rate, financial results or cash flows for fiscal 2025 based on currently enacted laws as a result of Pillar II; however, our analysis is ongoing as the OECD continues to release additional guidance and countries enact legislation. To the extent additional legislative changes take place in the countries in which we operate, it is possible that these changes may yield an adverse impact on our effective tax rate, financial results and cash flows.

The Company’s financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”).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.

OnThe Company’s decision in December 18, 2024, the Company announced that it had entered into an agreement2024 to sell itsTFP Thermoformed and Flexibles Packaging business and its global Trident business (collectively, “TFP”) to TOPPAN Holdings Inc. (“Toppan”) for approximately $1.8 billion onrepresented a cash-free and debt-free basis and subject to customary adjustments (the “Transaction”). The Transaction, which reflects the completion of the previously announcedmajor strategic review of Sonoco’s Thermoformed and Flexibles Packaging business, is subject to customary closing conditions, including regulatory approvals, and is expected to closeshift in theoperations. firstTherefore, half of 2025. Inin 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.10-K Further, the Company reclassifiedand the assets and liabilities of TFP are classified as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2024 and 2023.Sheets. 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. On April 1, 2025, the Company completed the sale of TFP to TOPPAN for approximately $1.8 billion on a cash-free and debt-free basis and subject to customary adjustments. See Note 2 to the Consolidated Financial Statements for additional information.

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, 2024,2025, the Company had approximately 315265 locations in 4037 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 2024,2025, approximately 67%48% of sales were generated in the United States, 18%43% in Europe,EMEA, 6%3% in Asia,APAC, 2%1% in Canada, and 7%5% in other regions.

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 aroundinto fewer,two biggercore businesses,global business segments, which has reduced operating complexity and improved agility. On December 4, 2024, Sonoco completed the acquisition of Titan Holdings I B.V. (“Eviosys”),Eviosys, Europe’s leading food cans, ends and closures manufacturer, from KPS Capital Partners, LP (“KPS”),KPS, for net cash consideration of approximately $3.8 billion. The transaction advanceswas designed to advance Sonoco’s portfolio transformation strategy to simplify and realign its portfolioportfolio. andThe positiontransaction, the Companylargest forin long-termthe growthCompany’s andhistory, value creation. The transaction is expected to expandexpanded Sonoco’s global leadership in metal food can and aerosol packagingpackaging, andfacilitating facilitate Sonoco’sour ability to partner with global customers andto 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 operateoperates under Sonoco’sthe Consumer Packaging segment.segment as Sonoco Metal Packaging EMEA.

InSonoco’s Aprilportfolio 2024,transformation Sonocostrategy completedalso theincludes divestituresignificant ofdivestitures. itsFor Protectiveexample, Solutions business (“Protexic”), which manufactured molded expanded polypropylene and expanded polystyrene foam components serving the automotive, electronics, appliances, and other markets. Inin 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.

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. InFor parallel,example, in July 2025 the Company hasannounced workedplans onto commercial,invest operational,$30 million of capital into three rigid paper can facilities in the United States to increase its production capacity in the adhesives and sealants sector. The investment is intended to improve supply chain excellencereliability programsand ensure consistent access to shiftmaterials thefor 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.customers.

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 arewere 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, 2025 and 2024 as these activities are no longer a part of ongoing major operations.

AsNo acquisitions were completed by the Company in 2025. However, 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.billion, net of a final working capital settlement for which the Company received $16.5 million during the second quarter of 2025. Eviosys, now operated as Sonoco Metal Packaging EMEA in the Company’s Consumer Packaging segment, is 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 AfricaEMEA region, haswhich at the time of the acquisition included 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.

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

DivestituresTFP Divestiture

InOn NovemberApril 2024,30, 2025, the Company completed the sale of twoa productionrecycling facilitiesfacility in China,Asheville, bothNorth of which wereCarolina, part of the Company’s Industrial Paper Packaging segment, for $0.3cash proceeds of $3.9 million. AsThe asale resultresulted of the sale, the Company reclassified $0.6 million of cumulative translation losses from Accumulated Other Comprehensive Loss and recognizedin a loss of $25.6$2.1 million, which is included in “Gain/(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income.

On JanuaryMarch 26,2, 2023,2025, the Company completed the sale of its S3 business, a provider of customized wastetube and recyclingcore managementoperations programsin andVenezuela, part of the Company’s Industrial Paper Packaging segment, toin Northstar Recycling Co. (“Northstar”),exchange for totala cashnote proceedsreceivable in the amount of $13.8$0.1 million. AnThe additionalsale $1.5resulted in a loss of $5.4 million, including $3.8 million of proceedscumulative translation losses that were released to the Companyreclassified from escrowaccumulated inother Septembercomprehensive 2024.income/(loss). TheThis Companyloss 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 areis included in “Gain/(Loss)/Gain on divestiture of business and other assets” in the Company’s Consolidated Statements of Income for their respective periods.Income.

Consolidated net sales from continuing operations for 20242025 were $5.3$7.5 billion, a $0.1$2.2 billion, or 2.5%,42%, decreaseincrease from 2023.2024. The Protexicyear-over-year divestitureincrease in Aprilnet trade sales is due primarily to the acquisition of Eviosys on December 4, 2024 resultedwhich added approximately $2.2 billion in lower year-over-year salessales. 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, lowerHigher selling prices across the Consumer Packaging and Industrial Paper Packaging segments resulted in a $94.2$178.0 million decline,year-over-year andincrease in sales, offset by unfavorable volumes in the AllIndustrial OtherPaper groupPackaging segment and the impact of businessesdivestitures, which lowered year-over-year sales by $46.3$80.9 million.million and $98.5 million, respectively. These decreasesdivestitures wereincluded partiallythe offsetNovember by2025 a year-over-year increase in salesdivestiture of $266.2 million from the acquisitions of Eviosys, RTSThermoSafe and the Chattanooga2024 Mill.divestitures of Protexic and two production facilities in China.

GAAP operating profit forin the year ended December 31, 20242025 was $326.6$1,017.7 million, aan decreaseincrease of 44.6%$691.2 million, or 212% from the $589.0$326.6 million forreported thein year ended December 31, 2023.2024. The decreaseincrease in GAAP operating profit wasreflects gains from the sale of businesses totaling $371.7 million in 2025, primarily duerelated to the sale of ThermoSafe, compared to a $63.3net loss from the sale of businesses of $23.5 million decrease in gross profit, a $25.6 million loss in the currentprior periodyear, fromprimarily related to the sale of two production facilities in China,China. The remaining year-over-year change is primarily due to the absenceEviosys of a net $78.9 million benefit from the sale of the Company’s timberland propertiesacquisition and the divestitures of the S3 and U.S. BulkSak businesses in 2023, and $67.0 million in additionallower acquisition, integrationintegration, and divestiture-related costs for the year ended December 31, 2024.costs. Adjusted operating profit for the year ended December 31, 20242025 was $573.1$954.9 million, aan decreaseincrease of 11.4%67% from the $646.6$573.1 million reported for the year ended December 31, 2023.2024, primarily as a result of the Eviosys acquisition.

GAAP net income attributable to Sonoco was $1,003.0 million (or $10.07 per diluted share) in 2025, compared with $163.9 million (or $1.65 per diluted share) in 2024,2024. comparedThe withyear-over-year $475.0 million ($4.80 per diluted share) in 2023. GAAP net income attributable to Sonocoincrease was lower in 2024 compared to 2023 primarily due to the decreaseincrease in GAAP operating profit as described above, a $316.0 million increase in net income from discontinued operations primarily related to the gain on the sale of TFP, and the non-recurrence of a $113.7 million remeasurement loss in 2024 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.acquisition. These decreasesincreases were partially offset by a $114.2$178.1 million reductionincrease in income tax expense as discussed further below.below and a $60.9 million increase in interest expense due to higher levels of debt to fund the Eviosys acquisition. Adjusted net income attributable to Sonoco and Adjusted diluted earnings per share were $568.8 million (or $5.71 per diluted share) in 2025, compared with $485.8 million (or $4.89 per diluted share) in 2024, compared with $519.9 million ($5.26 per diluted share) in 2023.2024.

Cost of sales decreasedincreased $72.7$1.78 millionbillion in 2024,2025, or 1.7%,42.7%, from the prior year. The decreaseacquisition wasof Eviosys on December 4, 2024, increased cost of sales by approximately $1.86 billion year over year, and increases in labor costs, overhead, and fixed operating costs increased cost of sales by approximately $77.1 million year over year. These increases were partially offset by reductions related to divestitures of $89.3 million, primarily related to the sale of ProtexicThermoSafe, while lower material costs and improved productivity from procurement savings, production efficiencies and fixed cost reduction initiatives,initiatives andreduced materials price reductions, partially offsetcosts by cost$74.6 of sales related to the 2023 and 2024 acquisitions.million. Gross profit marginsmargin decreased to 21.5%20.9% in 20242025 from 22.1%21.5% in the prior year due to pricing, depreciation and other various items as discussed above.year.

Selling, general and administrative expenses (“SG&A”) increased $79.3$138.3 million, or 12.3%,19.1%, and were 11.5% of sales in 2025, compared to 13.6% of sales in 20242024. comparedSG&A toin 11.8%2025 reflected an increase of sales$228.8 in 2023. The current year increase was primarilymillion related to anthe increaseEviosys inacquisition, partially offset by lower year-over-year acquisition, integration, and divestiture-related costs.costs of $53.7 million, the impact of divestitures of $19.2 million, and other net favorable changes of $17.6 million, primarily related to labor and professional fees.

Restructuring and asset impairment chargescharges, net totaled $66.2 million in 2025, compared with $65.4 million in 2024,2024. comparedThe 2025 charges reflect severance costs related to the Company’s ongoing organizational effectiveness efforts, as well as costs related to the closures of metal can facilities in France and Spain, a paper mill in Mexico, cone facilities in Taiwan and Mexico, and partitions facilities in Maine and California. These charges were partially offset by gains from the sales of the land and buildings associated with $47.9previously millionclosed facilities, primarily the cone facility in Taiwan and the partitions facility in Maine. Also offsetting the impairment charges was a gain from the sale of water rights at our former paper mill in Hutchinson, Kansas, which was closed 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 Sumnerclosures Millof paper mills in Sumner, Washington and theKilkis, Kilkis Mill,Greece, 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.business. Additional information regarding restructuring actions and asset impairments is provided in Note 5 to the Company’s Consolidated Financial Statements.

Gain/(Loss)/Gain on divestiture of business and other assets reflected a gain of $371.7 million in 2025, compared to a loss of $23.5 million in 2024,2024. comparedThe gain recorded in 2025 related primarily to athe gainsale of $78.9 million in 2023.ThermoSafe. The loss reported in 2024 related primarily related to the loss on the sale of two production facilities in China. TheAdditional gaininformation recordedregarding divestitures is provided in 2023Note primarily related4 to the sale of the Company’s timberlandConsolidated propertiesFinancial and the divestitures of the S3 and U.S. BulkSak businesses.Statements.

Other (expensesexpense)/income, net reflected a net expense of $27.5 million in 2025, compared with $104.2 million in 2024,2024. comparedOther with(expense)/income, incomenet of $39.7 millionreported in 2023.2025 represents charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivables in order to accelerate its cash collection cycle primarily within our Consumer Packaging segment. Other expenses,(expense)/income, 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.Northstar OtherRecycling income,Company, netLLC 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.(“Northstar”). See Note 4 to the Consolidated Financial Statements for further information.

Non-operating pension costs were $12.2 million in 2025, compared with $13.8 million in 2024, compared with $14.3 million in 2023.2024. The year-over-year decrease of $0.5$1.6 million was primarily due to higher expected returns on plan assets and lower amortization of net actuarial losses, partially offset by higher interest costs on the Company’s defined benefit pension liabilities, resulting from lowerhigher year-over-year discount rates. See Note 15 to the Consolidated Financial Statements for further information on employee benefit plans.

•the effects of economic downturns, changing tariffs or trade policy, inflation, volatility and other macroeconomic factors on the Company and its industry, including the Company’s ability to manage such matters and their effects on suppliers, consumers and customers;

•producing improvements in earnings and profitable sales growth and rates of growth;

•availability, transportation and pricing of raw materials, energy and transportation, including the impact of changes in tariffs or sanctions and escalating trade wars, and the impact of war, general regional instability and other geopolitical tensions (such as the ongoing conflictconflicts between Russia and Ukraine and between the United States and Iran and elsewhere in the Middle East, the potential escalation of tensions between China and Taiwan, and recent events in Venezuela), and the Company’s ability to continue to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;

•costs of labor and employment, including thecosts costrelating ofto employee and retiree medical, health, and life insurance benefits and the impact of any work stoppages due to labor disputes;

•ability to maintain or increase productivity levels, contain or reduce costs, and maintain positive price/cost relationshipsrelationships. including through ongoing organizational efforts;

•liability for and anticipated costs of resolution of litigation, regulatory actions,actions or other legal proceedings or environmental remediation actions;

•effects of changing climate and greenhouse gas effects and environmental laws and regulations, including with respect to climate change and emissions reporting;

•The acquisition of Eviosys, Europe’s leading food cans, ends and closures manufacturermanufacturer, for net cash consideration of approximately $3.8 billion on December 4, 2024. This transaction, the largest in the Company’s history, expanded Sonoco’s global leadership in metal food can and aerosol packaging, facilitating our ability to partner with global customers to advance innovation and sustainability in metal packaging offerings.

The Company is planninginvesting to invest $20$20.0 million in its Industrial Paper Packaging segment to add new nailed wood and steel reel production capacitycapacities at the Company’s Hartselle, Alabama, facilityfacilities to help meet growing wire and cable infrastructure demand to support artificial intelligenceAI data centers.centers and other electrical grid investments. This expansion is expected to be completed before the end of 2026.

RecentOngoing developments in U.S. and foreign trade policy have increased uncertainty for the global economy and the Company’s business. On March 4, 2025, the U.S. government imposed a 25% tariff on all imports from Canada or Mexico. After imposing this tariff, the U.S. government allowed for the temporary exemption from the tariff for any goods that comply with the USMCA,United States-Mexico-Canada Agreement (“USMCA”), which has helped mitigate the impact of the tariff on the Company’s operations in North America. On February 10, 2025, the United States announced the expansion of Section 232 Tariffs on steel and aluminum imported into the United States, effective March 12, 2025, and the termination of the granting of new exclusions to mitigate these tariffs. As a result, imported steel and aluminum originating from most countries is currently subject to a 50% duty.

The UnitedU.S. Statesgovernment also imposed reciprocal tariffs at a baseline rate of 10%, effective April 5, 2025, and later set firmly established tariff rates for various countries at the beginning of August 2025. For the most part, these reciprocal tariffs were incremental increases over the previously established 10% temporary reciprocal tariffs. On February 20, 2026, the U.S. Supreme Court invalidated certain of these tariffs. On April 20, 2026, U.S. Customs and Border Protection launched an electronic system to manage refunds for tariffs paid under the International Emergency Economic Powers Act (“IEEPA”). The Company willhas seekapplied refundfor refunds of all eligible IEEPA tariffs; however,and has recovered approximately 80% of its overall claim as of the end of the second quarter of 2026. The amount of the recoveries to date has not been material nor are any suchfuture recovery is notrecoveries expected to be material.

Effective April 6, 2026, the United States overhauled Section 232 tariffs on steel and aluminum moving from a metal-content-based assessment to the full customs value of the imported goods. Under the revised rules, many steel and aluminum products, along with their derivative articles, now face significantly higher tariffs. The metal ends that the Company imports into the United States are now subject to a 25% tariff. Future changes in tariff and trade policy may result in additional changes, the exact scope of which is not known at this time. While the full impact of the most recent Section 232 changes is uncertain, the Company does not currently expect the current tariff environment to have a material direct effect on its profitability or cash flows over the remainder of 2026 because the Company’s manufacturing network is designed to serve local markets, reducing its exposure to cross-border disruptions and tariff-related risks. While the Company is actively working with its customers to help manage the impacts of higher input costs driven by tariffs, its business model allows for pricing adjustments when necessary. In addition, the Company believes its transformed portfolio following the Eviosys acquisition and the salesdivestitures of its TFP and ThermoSafe businesses is significantly more resilient, with nearly two-thirds of the Company’s sales in 2025 and the first half of 2026 coming from the Consumer Packaging segment, a segment that has historically demonstrated strong performance across economic cycles. In addition, while the Section 232 Tariffs impact input costs for the Company’s U.S.-based operations with Consumer Packaging, Americas, which source a portion of their steel and aluminum purchases from outside the United States, the Company intends, and has the contractual ability, to continue to pass such increases in cost due to tariffs to its customers.

The ongoing conflict between the United States and Iran has introduced additional volatility into global energy markets, shipping corridors, and raw material supply chains. The Company relies on a diversified global supplier base for resin, chemicals, adhesives, and other inputs, some of which are indirectly influenced by crude-oil-linked pricing or international transportation costs. As a result of this geopolitical and macroeconomic uncertainty, the Company expects inflation related to experience increases in cost of sales from these higher input costs, as well as higher energyenergy, and logistics costs,to includingpersist higher fuel surcharges. Whileover the Companysecond willhalf seekof to2026; reduce the potential impact on its customers,however, it isdoes anticipatednot that such increases will be passed to our customers and thatexpect these cost pressures will notto materially impact the Company’s ability to source materials, operate facilities, or meet customer demand. Based on information currently available, theThe Company does not expect these factors to materially impact its near-term financial performance.performance based on cost recovery actions through recognized market price increases and contractual price resets. However, the duration and broader economic consequences of the conflict, including the potential for further increases in energy and logistics costs, remain uncertain. The Company will continue to evaluate developments in the geopolitical environment and adjust its risk management strategies as conditions evolve.appropriate.

On July 4, 2025, the One Big Beautiful Bill Act (the “"OBBBA”"), which includes a broad range of tax reform provisions,provisions includingand theextends extensionor ofmodifies keycertain provisions of theprior Taxtax Cuts and Jobs Act of 2017,legislation, was signed into law in the United States. The Company has evaluated the impact of the OBBBA as part of its projected 2026 results, and the effects of the OBBBA in accordance with ASC 740 and determined that enactment of the legislation aredid reflectednot result in a material adjustment to its income tax provisionaccounts upon enactment. Based on the Company’s assessment, the OBBBA is not expected to have a material impact on the Company’s consolidated effective tax rate, results of operations, financial position or cash flows for the quarter.2026. While certain provisions of the OBBBA are expected to haveprovide afuture favorabletax benefits, largely through acceleration of deductions to benefit cash taxes, the overall impact on the Company’s income tax profile, the Company doesis not currently anticipateexpected thatto thebe OBBBA will have a material effect on its effective tax rate, financial results or cash flows for 2026.material. The Company will continue to monitor and assess the applicationimplementation of the OBBBA and related regulatory, administrative and interpretive guidance and will evaluate the effects of any related regulatorysuch guidance as it becomes available.

FirstSecond Quarter 2026 Compared with FirstSecond Quarter 2025

The following discussion provides a review of results for the three-month period ended MarchJune 29,28, 2026 versus the three-month period ended MarchJune 30,29, 2025.

Consolidated net sales for the firstsecond quarter of 2026 were $1.7$1.9 billion, a $(32.825.0) million or 1.9%(1.3)% decline from the firstsecond quarter of 2025. LowerThe volumesNovember resulted2025 indivestiture lowerof ThermoSafe reduced sales by $(65.7) million in the firstsecond quarter of 2026 of $(97.8) million compared to the same period last year while lower volumes further reduced sales by $(22.9) million as continuing macroeconomic and geopolitical pressures weighed on both the Company’s supply chain and its customers and the November 2025 divestiture of ThermoSafe further reduced sales by $(55.8) million.customers. These decreases were partially offset by a favorable impact from foreign currency translation of $87.1 million and a $38.7$37.0 million benefit from higher selling prices implemented to offset the effects of inflation and tariffs.tariffs and the favorable impact from foreign currency translation of $29.3 million. All other factors contributed to a net reduction of $(5.02.7) million in the firstsecond quarter of 2026 compared to the same period last year.

GAAP operating profit for the firstsecond quarter of 2026 was $127.1$192.8 million, an increase of 0.2%9.8% from the $126.9$175.7 million reported in the firstsecond quarter of 2025. The increase in GAAP operating profit was primarily due to productivity savings from fixed cost reduction initiatives totalingand $4.6procurement savings of $18.7 million, lower lossesacquisition, integration and divestiture-related costs of $9.1 million, lower restructuring costs of $7.8 million, higher gains on the sale of businesses of $2.3$4.7 million, and otherthe net favorable impactsimpact of $0.5foreign currency translation and other items totaling $5.1 million. These favorable itemsimpacts were partially offset by unfavorable price/cost of $(11.8) million, the impact of the ThermoSafe divestiture of $(7.28.9) million, and unfavorable volume/mix of $(7.6) million. Adjusted Operating Profit for the firstsecond quarter of 2026 was $200.8$242.4 million, a decrease of (5.61.8)% from the $212.7$246.9 million reported for the same period in 2025, primarily resulting from the impact of the ThermoSafe divestiture.

GAAP net income attributable to Sonoco for the firstsecond quarter of 2026 increaseddecreased to $67.6$104.9 million, or $0.68$1.05 per diluted share, compared to $54.4$493.4 million, or $0.55$4.96 per diluted share, for the firstsecond quarter of 2025. ThisThe increasequarter-over-quarter reduction was primarily due to net income from discontinued operations in the prior year of $424.5 million related to the April 2025 divestiture of TFP. The impact of this reduction was partially offset by the increase in GAAP operating profit as described above,above and lower net interest expense and provision for income taxesexpense, as described more fully below, partially offset by the decrease in GAAP net income from discontinued operations resulting from the April 1, 2025 sale of TFP and higher Other expense, net in the current year as described below. Adjusted net income attributable to Sonoco and Adjusted diluted EPS for the firstsecond quarter of 2026 were $119.4$150.5 million (or $1.20$1.51 per diluted share), compared with $136.8$136.1 million (or $1.38$1.37 per diluted share) for the same period in 2025. The decrease is primarily attributable to the sale of TFP.

Cost of goods soldsales decreased by $(24.711.1) million, or 1.8%,(0.7)%, in the firstsecond quarter of 2026 compared with the firstsecond quarter of 2025. This decrease resulted from a $(40.349.0) million impact from the divestiture of ThermoSafe,ThermoSafe and lower labor costs of $(18.818.4) million, and the nonrecurrence of inventory step-up amortization recognized in the first quarter of 2025 in connection with the Eviosys acquisition of $(17.9) million. These decreases were partially offset by higher direct material costs of $36.9 million and higher outbound freight costs of $44.1$20.5 millionmillion. andOther $6.9favorable million,factors respectively.resulted in a net reduction in cost of sales totaling $(1.1) million. Gross profit margins decreased slightly fromto 20.7%20.8% in the firstsecond quarter of 20252026 tofrom 20.6%21.3% in the firstsecond quarter of 2026.2025.

Selling, general and administrative costs decreased by $(7.518.5) million, or 3.6%,(8.5)%, and were 12.0%10.6% of sales in the firstsecond quarter of 2026, compared to 12.2%11.5% of sales in the firstsecond quarter of 2025. This decrease reflects reduced costs of $(7.6) million from the ThermoSafe divestiture and lower acquisition, integration, and divestiture-related costs of $(2.99.1) million, partiallyreduced offsetcosts byfrom the ThermoSafe divestiture of $(7.8) million, and other net increases,decreases, primarily salaries and benefits, totaling $3.0$(1.6) million.

Restructuring/Asset impairment charges totaled $15.1$1.9 million in the firstsecond quarter of 2026, compared with $13.6$9.8 million during the same period last year. The net charges in the current year related primarily to ongoing restructuring costs related to prior year plant closures and headcount eliminations in conjunction with the Company’s ongoing organizational effectiveness efforts.efforts, partially offset by reductions resulting from revisions to the estimates of total severance to be paid. Additional information regarding restructuring and asset impairment charges is provided in Note 6 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Gain/(Loss) on divestiture of business totaled $1.9 million in the firstsecond quarter of 2026 reflectingand 2025 was a charge related to the final working capital settlement for the ThermoSafe divestiture. Loss on divestituregain of business of $4.2$2.6 million during the first quarter of 2025 reflected a $5.4 million loss from the sale of the Company’s tube and corerecycling operations in Venezuela,Savannah, partiallyGeorgia, offset byand a $1.2loss of $(2.1) million gain from the sale of athe smallCompany’s constructionrecycling tube operationoperations in France,Asheville, bothNorth Carolina, respectively. These operations were part of the Industrial Paper Packaging segment. See Note 4 to the Company’s Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Other expense, net was $12.3$6.2 million and $6.5$6.6 million in the firstsecond quarter of 2026 and 2025, respectively. The amounts in both years are comprised of charges from third-party financial institutions related to our centralized treasury program under which the Company sells certain trade accounts receivable in order to accelerate its cash collection cycle, primarily within our Consumer Packaging segment. Other expense, net in the first quarter of 2026 also includes non-operating charges related to certain pre-acquisition liabilities relevant to the Sonoco Metal Packaging (“SMP”) EMEA business.

Net interest expense for the firstsecond quarter of 2026 decreased to $35.8$41.4 million, compared with $48.7$60.2 million during the firstsecond quarter of 2025, primarily due to lower average debt levels resulting from the Company’s repayment of debt during 2025 utilizing proceeds from the divestitures of TFP and ThermoSafe.

The effective tax rates on GAAP income from continuing operations before income taxes and Adjusted income from continuing operations before income taxes in the firstsecond quarter of 2026 were 12.4%27.8% and 25.5%,23.8%, respectively, compared with 30.9%37.3% and 25.7%,25.6%, respectively, in the corresponding prior year quarter. The decrease in the GAAP effective tax rate was primarily from a provision-to-return adjustment relateddue to athe retroactiveabsence U.S.of taxnon-GAAP election.adjustments for restructuring and other discrete one-time items which were present in 2025.

Net income from discontinued operations totaled $5.2$424.5 million in the firstsecond quarter of 2025.2025, Thereflecting the net after-tax gain on divestiture of business recognized upon completion of the sale of TFP was completed on April 1, 2025.

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. During 2025, the All Other group of businesses consisted of ThermoSafe and the Company’s industrial and specialty plastics business (“Industrial Plastics”).Plastics. With the divestiture of ThermoSafe in November 2025, only Industrial Plastics remained. Effective January 1, 2026, the Company changed its operating and management reporting structure to include the results of Industrial Plastics in the Company’s Industrial Paper Packaging segment and discontinued the use of All Other. Results for prior periods have been revised to conform with the current presentation.

The following table summarizes net sales attributable to each of the Company’s segments for the firstsecond quarters of 2026 and 2025 and the All Other group of businesses for the firstsecond quarter of 2025:

The following table summarizes operating profit attributable to each of the Company’s reportable segments, and Corporate-related activity for the firstsecond quarters of 2026 and 2025 and the All Other group of businesses for the firstsecond quarter of 2025:

Segment net sales increased $30.5$14.8 million, or 2.9%,1.2%, over the prior year quarter as the favorable impact of foreign exchange rates added $67.7$20.3 million and price increases implemented to offset the effects ofrecover inflation and tariffstariff-related costs added approximately $27.6$18.9 million of sales. These favorable factors were partially offset by softer volume/mix across the segment of $(61.622.1) million relatedas higher paper can volumes in EMEA/APAC due to macroeconomicrising conditionssnack demand were more than offset by lower demand for metal aerosol cans and thesealant impacttubes. ofOther severeunfavorable winterfactors weatherreduced alongquarter-over-quarter thesales eastby coast$(2.3) of the United States in the first quarter of 2026.million.

Segment operating profit decreased (5.4)% compared to the corresponding prior year quarter primarilylast dueyear, tothough continued productivity and disciplined cost management helped mitigate the impact of softer volumes, partially offset by the benefits from productivity savings and a favorable price/cost environment.volumes. Segment operating profit margin werewas 11.5%12.2% and 13.2%13.1% in the firstsecond quarter of 2026 and 2025, respectively.

Segment net sales decreasedincreased $(8.2)$26.0 million, or (1.4)%,4.2%, from the corresponding prior year quarter as lowerprice volume/mixgains acrossresulting thefrom segmentindex-based reducedpricing resets added $18.1 million of sales by $(36.2) million, partially offset byand the favorable impact of foreign exchange rates ofadded $18.7$8.8 millionmillion, andwhile pricethe gainssegment’s ofvolume/mix $11.2was million resulting from index-based pricing resets.flat. All other factors contributed to a net reduction in sales of $(1.90.9) million in the firstsecond quarter of 2026 compared with the same period last year.

Segment operating profit decreasedincreased 4.0% compared to the corresponding priorquarter last year quarter primarily due to lowerthe volume/miximpact of productivity savings from fixed cost reduction initiatives and lossesprocurement attributablesavings, toand afavorable firemill at a recycling facilityutilization in Greenville,North South Carolina.America. These unfavorablefavorable factors were partially offset by strongunfavorable productivityprice/cost savings.from rising material, freight and other operating costs. Segment operating profit margin decreasedwas to 12.0%13.9% in both the firstsecond quarter of 2026 fromand 13.0% in the same period last year.2025.