SON – Quick Take - Live from the Truist Securities Industrials & Services Conference

Research evidence excerpt

SON – Quick Take - Live from the Truist Securities Industrials & Services Conference

incremental annual

Reasons for this report EBITDA, with the second $60/ton increase adding ~$36mn assuming full implementation.

Domestic supply / demand conditions should continue to remain tight as customers restock

✓ Truist Securities Conference Takeaways inventory, while SON is importing its own paper from Europe to meet heightened demand

✓ Management Meeting Takeaways rather than buy from competitors in North America, pushing its European utilization to the

90%s from the mid-80%s in 1Q. While net net there is nominal EBITDA benefit as greater

operating leverage is offset by higher freight, the greater utilization allows SON to avoid

costly economic downtime.

Meanwhile, saturating kraft is an attractive organic growth opportunity, with technology

present at one mill with ~30k tons of capability and room to grow to ~50-60k tons without

significant reconfiguration and capital, though growth beyond that would likely require

additional capital investment. The high end of this expansion would represent ~27% of the

total NA market at 225k+ tons. Given the product’s highly defensible market position, limited

industry capacity, and exposure to relatively non-cyclical end markets, management views

virgin saturated kraft as one of the most attractive organic growth opportunities within the

portfolio.

In Consumer, SON is focused on execution amid macro headwinds. Food cans in North

America and Europe (strength in fish) are performing well with the company expecting

consistent performance for the duration of the year including the pack seasons. RPCs are

sold out at present in Brazil and Mexico, with some incremental demand from the World