Fitch Ratings has affirmed Sonoco Products Company’s Long-Term Issuer Default Rating at ‘BBB’, maintaining a Stable Outlook.
The rating reflects Sonoco’s scale, leading positions in consumer markets, and ability to manage variable costs, supporting stable margins.
Sonoco is the top US producer of tinplate aerosol containers and a global leader in rigid paper containers.
With strong exposure to resilient markets including food, beverages and consumer staples, Sonoco is expected to generate revenues exceeding $7 billion (€6.44 billion) this year.
The company’s $4 billion (€3.68 billion) acquisition of Eviosys in late 2024 strengthened its European footprint, making Sonoco the continent’s leading metal food can producer and a global leader in metal food and aerosol cans.
Non-US revenue now exceeds 40% of total, enhancing geographical diversification.
Consumer market exposure exceeds 70%, reducing earnings cyclicality, while increased metal packaging supports environmental sustainability.
Fitch expects Sonoco to end fiscal 2025 with total leverage near 4x. The company has already repaid $1.5 billion (€1.38 billion) of acquisition debt from prior divestitures and plans to use proceeds from the ThermoSafe sale, expected to generate $650 million (€598 million), to further reduce leverage to around 3.0x by end-2026. Free cash flow is forecast at over $300 million (€276 million) annually.
The rating also reflects Sonoco’s long-standing conservative financial approach, which has preserved investment-grade metrics for more than two decades. Fitch expects the company to prioritise debt repayment, capital expenditure, and modest dividend growth over share buybacks and leveraged acquisitions in the near term.
Compared with peers, Sonoco’s revenue is nearly double that of AptarGroup, Inc., though Aptar operates with higher EBITDA margins due to its pharmaceutical focus. Silgan Holdings Inc. is a leading rigid packaging supplier with similar margins, while Amcor plc, after merging with Berry Global, generates around $24 billion (€22.1 billion) in revenue with nearly $4 billion (€3.68 billion) EBITDA. Fitch noted that Sonoco’s unencumbered balance sheet provides an advantage over secured-debt peers.
Fitch highlighted potential risks to the rating, including delays in planned divestitures, deviation from debt repayment plans, or sustained leverage above 3.0x. Conversely, leverage below 2.0x or the completion of strategic growth objectives could support a positive rating action.
As of June 2025, Sonoco held roughly $330 million (€304 million) in cash and $355 million (€326 million) drawn under its $1.25 billion (€1.15 billion) commercial paper programme. Total debt stood at $5.4 billion (€4.97 billion), with key maturities in 2026. Fitch expects remaining divestiture proceeds to cover these obligations.
Fitch affirms Sonoco’s rating at ‘BBB’ with stable outlook
