Sonoco focused on operating excellence

- General economic conditions to continue as challenging, with customers' long-term order patterns difficult to predict

 

- Focused on implementing operating excellence initiatives to improve manufacturing productivity, reduce costs and control spending

 

Sonoco, a global provider of consumer packaging, industrial products, protective packaging and packaging supply chain services, said it was encouraged by its performance in the first half of the year, and will focus on executing operating excellence initiatives in the face of the ongoing challenging economic climate.

 

During the first six months of 2012, Sonoco saw net sales increase eight percent to $2.4 billion year-on-year, although net income attributable to Sonoco fell from $110.8 million to $94.4 million.

 

Cash generated from operations was $144.4 million, compared with $32.1 million in 2011. Pension and post-retirement benefit plan contributions, plus less management incentives paid out, impacted cash flow.  

 

Total debt was reported at $1.32 billion, a $32 million increase from the 2011 year-end total of $1.29 billion.

 

Second quarter 2012 net sales reached a record $1.2 billion, compared to $1.13 billion the year-prior. The seven percent growth recorded was attributed to sales from acquisitions of $124 million, almost all of which is related to Tegrant, and higher selling prices, Sonoco said. Tegrant provides highly engineered protective, temperature-assured and retail security packaging.

 

Sonoco chairman and chief executive officer
Harris DeLoach Jr said: ‘Sonoco's second quarter results met our expectations despite the continuing tough global economic conditions.’

He added: ‘We expect third quarter base earnings to continue to improve sequentially and possibly could be near our results for the third quarter of 2011, which benefited from some lower incentives, taxes and other favorable actions.

 

‘While we are encouraged by the progression of improvement in many of our businesses in the first half of the year, general economic conditions continue to be challenging and our customers' long-term order patterns remain difficult to predict.

 

‘Accordingly, we are focused on implementing operating excellence initiatives to improve our manufacturing productivity and working to further reduce costs and control spending.

 

‘Also, we expect to complete several important growth projects this year, including the third-quarter start-up of our new rigid plastics container plant in Columbus, Ohio.

 

‘Finally, efforts to successfully integrate our protective packaging businesses continue and we expect to meet our objective of achieving annualized synergies of $12 million by year-end.’

 

Read more on current trading conditions here

Read more from Europe here

Read more North America here

Read more from the Asia-Pacific region here