2006 Annual Meeting of Shareholders

1
2006 Annual Meeting of Shareholders
2
Employees Serving our Country

• Robert Chinn Edinburgh, Ind.
• David Delgado Hartsville, S.C.
• Leslie Hilton Hutchinson, Kan.
• Curtis Lee Hartsville, S.C.
• Ronald McQueen Fayetteville, N.C.
• Henry Moore York, Ala.
• David Peacock Opp, Ala.

3
Employees with Completed Tours

• Edward Brooks Morristown, Tenn.
• Anthony Gattison Hartsville, S.C.
• Jason Johnson Edinburgh, Ind.
• Joshua Johnson Neenah, Wis.
• Culley Lasselle Pittsfield, Maine
• Rodney Myers Morristown, Tenn.
• Wiley Starling Hartsville, S.C.
• Christopher Terrell Erlanger, Ky.
• Roger Watson Woodland, Wash.
• Joe Williams Hartselle, Ala.

4

• Board of Directors

5
Forward-looking Statements

• Todays presentation contains a number of
  forward-looking statements based on current
  expectations, estimates and projections. These
  statements are not guarantees of future
  performance and are subject to certain risks and
  uncertainties. Therefore, actual results may
  differ materially.
• Information about the Companys use of non-GAAP
  financial measures, why management believes
  presentation of non-GAAP financial measures
  provides useful information to investors about
  the Companys financial condition and results of
  operations, and the purposes for which management
  uses non-GAAP financial measures is included in
  the Companys Annual Report on Form 10-K filed
  with the Securities and Exchange Commission.
• Pursuant to the requirements of Regulation G, the
  Company has provided definitions of the non-GAAP
  measures discussed during this annual meeting
  with the financial community as well as
  reconciliations of those measures to the most
  closely related GAAP measure on its Web site at
  www.sonoco.com.

6
First Quarter 2006 Financial Results

• 
  Three
  Months Ended
  
• (Unaudited) March 27, 2006 March 27, 2005
• Diluted Earnings Per Share,
• as reported (GAAP) .44 .37
• Adjusted for
• Restructuring charges, net of tax .02 .03
• Base Earnings Per Share (Non-GAAP) .46 .40

Base EPS is a non-GAAP financial measure of
earnings per share, which excludes the impact of
restructuring charges and of non-recurring or
infrequent and unusual items. The above table
sets forth the reconciliation of GAAP Diluted
Earnings Per Share to Base Earnings Per Share.
7
2006 Dividend Declaration

• Cash Dividends Paid
• to Shareholders
• (Dollars Per Share)

• Board of Directors increased quarterly dividend
• To .24 per share (.96 annualized)
• From .23 per share (.92 per share annualized
• 324th Consecutive Quarterly Dividend
• Payable June 9, 2006
• Shareholders of Record May 19, 2006

1.00
.87
.84
.83
.75
.80
.50
.25
01 02 03 04 05
8

• Business Meeting

9
2005 Annual Review and Outlook
WE PUT ALL THE PIECES TOGETHER
10
State of the Company is Sound

• Debt to Total Capital Ratio
• (Percent)

• Strong balance sheet and cash flow
• Reduced debt by 117.8 million
• Debt-to-capital ratio dropped from 40.7 in 2004
  to 35.7 in 2005
  
• Maintain one of the strongest debt ratings in
  the industry

52
49.3
44.5
40.7
39
36.4
26
13
01 02 03 04 05
11
State of the Company is Sound

• Top-line growth strategy continues
• 12 improvement in sales
• Second consecutive year of double-digit sales
  growth
  
• Growth from acquisitions, joint ventures and new
  products and market development

• Net Sales
• (Billions of dollars)

4.0
3.16
3.0
2.76
2.70
2.46
2.0
1.0
01 02 03 04 05
12
State of the Company is Sound

• Cumulative Total
• Shareholder Return
• (Dollars)

• Average double-digit total returns to
  shareholders
  
• Dividends paid consecutively since 1925
• Five-year compound average growth rate of 10.04

180
157.47
135
127.00
126.40
113.21
100.00
90
45
00 01 02 03 04 05
Assumes 100 invested in Sonoco common stock on
Dec. 31, 2000, with reinvestment of dividends
13
State of the Company is Sound

• People Build Businesses
• Employees set all-time safety record in 2005
• Customer service remains highest priority to our
  employees
  
• Productivity improvements totaled 77 million in
  2005

• Safety Record
• (Total Incident Rate
• per 100 Employees)

1.60
1.49
1.20
.98
1.19
1.03
.80
.40
01 02 03 04 05
14
2005 A Strong Operating Performance

• Met or exceeded our primary initiatives in 2005
• Double-digit growth in sales
• Generated strong operating profits
• Improved margins
• Increased Companywide volumes
• Maintained positive price/cost relationship
• Integrated acquisitions and joint ventures

• Net Income from
• Continuing Operations
• (Millions of dollars)

200
150
151.2
125.5
.98
100
81.5
78.2
50
01 02 03 04 05
15
Strong Performance Despite Difficult Operating
Environment

• 2005
• Increased costs for
• Raw materials
• Energy
• Hedging natural gas
• Positive price/cost relationship
• Steel surcharge contractual price recovery began
  1/05
  
• Paperboard increase
• 3040/ton, 6/13/05
• Tube and core increase
• Up to 5, 6/27/05
• Paperboard energy surcharge
• 10/ton, 9/16/05
• Tube and core energy surcharge
• 1.375, 9/19/05
• Flexible Packaging increase
• 79, 10/5/05

• 2006
• Expect continued pressure on raw materials and
  energy costs
  
• Hedging natural gas
• Will continue aggressively managing price/cost
• N.A. paperboard increase
• 30-40/ton, 2/6/06
• N.A. tube and core increase
• 6, 2/20/06
• European tube and core increase
• U.K., central and western
• 12-16, 3/1/06
• Nordic region
• 5-8, 3/1/06

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Areas for Improvement in 2006

• Increase flexible packaging capacity for growing
  opportunities with major consumer product
  companies
  
• Reduce working capital
• Reduce number of underperforming plants
• Stay focused on putting the right people in the
  right jobs to execute growth strategy

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Growth Strategy Changing Sales Mix

• Reversing the historical ratio of sales from
  industrial and consumer markets

• Objective over next
• 2000
  2005 several years
  
• Industrial Consumer Industrial Consumer
  Industrial Consumer
  
• 59 41 51 49
  45 55

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Growth Strategy
19
Growth Base

• Strong balance sheet
• Dividends
• Substantial cash flow
• Dividends
• Capital expenditures
• Pension and postretirement funding
• Debt reduction
• Stock buy backs

20
Growth Strategy
21
Managing the Guts Margin Improvement

• Objective Return margins to historical levels
• Structural cost reductions
• Working capital management
• Price micromanagement
• Operating excellence
• Six Sigma
• Lean Manufacturing
• Scrap reduction

22
Sales GrowthSales Excluding Divestitures (
millions)
6.7 CAGR
4.6 CAGR
23
Growth Strategy
24
Top-line GrowthAcquisitions

• Acquisition criteria
• Not dilutive in first year
• Meet cost of capital in three to four years
• Complementary to existing businesses
• Example CorrFlex Graphics, LLC
• Transformed Sonoco into one of North Americas
  largest point-of-purchase (P-O-P) display
  companies
  
• Accretive in first year exceeding expectations

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Top-line GrowthJoint Ventures

• Sonoco-Alcore, joint venture with Ahlstrom of
  Finland
  
• Combined Ahlstroms and Sonocos respective
  European paper-based tube/core and coreboard
  operations 11/02/04
  
• Sonoco owns 64.5 can acquire remainder through
  put/call provisions
  
• Similar agreement with Demolli of Italy
• Sonoco owns 25 with option to acquire 100
  after December 2006

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Top-line GrowthGeographic Expansion

• Brazil
• Sonoco is largest tube and core manufacturer
• Newest venture steel easyopen closures
• China
• Sonoco is largest tube and core manufacturer
• Five converting plants/one paper mill
• A sixth tube and core plant to open in 2006
• Germany
• New Service Center for PG European baby care
  division
  
• Also manages Mitsubishi tube and core requirements

• Poland
• New Service Center for PG/Gillette
• Sonoco moved with Gillette from U.K. to Poland
• Turkey
• Completed second tube and core plant in 2005
• Principally serving textile industry
• India
• Reviewing entry opportunities

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Top-line GrowthTotal Solutions Strategy
A full range of packaging supply chain products
and services for consumer product companies
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Top-line GrowthTotal Solutions Strategy

• One Sonoco Face to the customer
• Large consumer product goods (CPG) customers want
  fewer suppliers, capable of handling an
  increasingly wider range of their packaging
  supply chain needs.
• Sonoco is uniquely able to take advantage of this
  opportunity because we have the broadest
  offerings of packaging products and services in
  the industry.
• CPGs, want a single point of account leadership,
  One Sonoco Face, to simplify their
  relationship across multiple Sonoco businesses.
  
• We have assigned seasoned executives to handle
  these relationships.

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Top-line GrowthNew Product and Market Development

• Increased product development expenditures
• Doubling of new patent applications since 2001
• New product sales reached nearly 75 million in
  2005
  
• New products those commercialized two years
  or less
  
• Goal Average 100 million to 125 million of
  annual sales from new products

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Consumer Packaging Segment
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Consumer Packaging Highlights
Net Sales (Billions of dollars)

• Net sales increased 10 to 1.25 billion
• Driven by increased volumes, especially in
  flexible packaging
  
• Domestic sales increased 7 in 2005
• International sales increased 21 in 2005
• Operating profits increased 24.5 to 103.5
  million

1.5
1.13
1.1
1.04
.7
.3
03 04 05
Operating Profit (Millions of dollars)
120
90
83.1
78.7
60
30
03 04 05
32
Consumer Packaging InnovationsRigid Paper and
Plastics
33
Consumer Packaging InnovationsRigid Paper and
Plastics
34
Consumer Packaging InnovationsFlexible Packaging
35
Tubes and Cores/Paper Segment
36
Tubes and Cores/Paper Highlights
Net Sales (Billions of dollars)

• Net sales increased 6.5 to 1.48 billion in
  2005
  
• Increase due primarily to a full-years
  recognition of Sonoco-Alcore joint venture in
  Europe
  
• Excluding impact of joint venture volume decline
  2
  
• Declines in textile and newsprint industries
• Operating profits decreased 5.3 to 107.1 million

1.5
1.39
1.26
1.1
.7
.3
03 04 05
03 04 05
Operating Profit (Millions of dollars)
140
113.0
105
102.9
70
35
03 04 05
37
Tubes and Cores/Paper Innovations
38
Tubes and Cores/Paper Innovations
39
Packaging Services Segment
40
Packaging Services Highlights
Net Sales (Billions of dollars)

• Net sales increased 42 to 455.9 million
• Reflecting full-years impact of the acquisition
  of CorrFlex
  
• Higher volume increased sales by 56.5 million
• Operating profits increased 48 to 44.8
  million
  

.48
.36
.321
.24
.185
.12
03 04 05
Operating Profit (Millions of dollars)
48
36
30.3
24
12
7.9
03 04 05
41
Packaging Services Innovations
42
Packaging Services Innovation
43
All Other Sonoco
44
All Other Sonoco Highlights
Net Sales (Billions of dollars)

• Net sales increased 9 to 343.2 million
• Higher volumes in wire and cable reels and
  protective packaging
  
• Price increases
• Operating profits increased 27 to 40.6 million

.4
.314
.3
.270
.2
.1
03 04 05
Operating Profit (Millions of dollars)
48
36
32.0
24
19.0
12
03 04 05
45
All Other Sonoco Innovations
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Conclusions and OutlookWhy Invest in Sonoco?

• Effective management of price/cost
• Through 2006, expect average annual cash flow
  from operations of approximately 300 million,
  excluding any discretionary pension plan
  contributions, with capital expenditures from
  125 million to 150 million annually
• Volumes and margins improving in Consumer
  Packaging
  
• Aggressive new product development, geographic
  expansion and integration of new acquisitions and
  joint ventures

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Conclusions and OutlookWhy Invest in Sonoco?

• Dividends yielding more than 35 higher than the
  SP average and paid consecutively since 1925
  
• Sales, volumes and margins improving in Consumer
  Packaging
  
• Aggressive new product development, geographic
  expansion and integration of new acquisitions and
  joint ventures
  
• Expect annual cash flow from operations of 300
  million
  
• Continuing to aggressively pursue productivity
  improvements and cost reductions
  
• Remain focused on average annual double-digit
  return to shareholders

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