![]() Fourth Quarter 2013 Earnings Conference Call Supplement (Unaudited Results) Jerome A. Peribere – President & CEO Carol P. Lowe – Senior Vice President & CFO Exhibit 99.2 |
Safe Harbor and Regulation G Statement 2 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words as “anticipates,” “believes,” “plan,” “assumes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans to,” “will” and similar expressions. These statements reflect our beliefs and expectations as to future events and trends affecting our business, our consolidated financial position and our results of operations. Examples of these forward-looking statements include expectations regarding our anticipated effective income tax rate, the potential cash tax benefits associated with the W. R. Grace settlement, potential volume, revenue and operating growth for future periods, expectations and assumptions associated with our restructuring programs, availability and pricing of raw materials, success of our growth initiatives, economic conditions, and the success of pricing actions. A variety of factors may cause actual results to differ materially from these expectations, including general domestic and international economic and political conditions, changes in our raw material and energy costs, credit ratings, the success of restructuring plans, currency translation and devaluation effects, the competitive environment, the effects of animal and food-related health issues, environmental matters, and regulatory actions and legal matters. For more extensive information, see “Risk Factors” and “Cautionary Notice Regarding Forward-Looking Statements,” which appear in our most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, and as revised and updated by our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events, or otherwise. Our management uses non-U.S. GAAP financial measures to evaluate the Company’s performance, which exclude items we consider unusual or special items. We believe the use of such financial measures and information may be useful to investors. We believe that the use of non-U.S. GAAP measures helps investors to gain a better understanding of core operating results and future prospects, consistent with how management measures and forecasts the Company's performance, especially when comparing such results to previous periods or forecasts. Please see Sealed Air’s February 6, 2014 earnings press release for important information about the use of non-U.S. GAAP financial measures relevant to this presentation, including applicable reconciliations to U.S. GAAP financial measures. |
![]() Key Takeaways FOURTH QUARTER & FULL YEAR 2013 3 Fourth Quarter 2013 • Constant currency net sales growth of 4.1% with growth in all regions • Favorable product price/mix across all divisions and all regions Full Year 2013 • Constant currency net sales growth of 2.7% with growth in all divisions and all regions, except Europe • Adjusted EBITDA, excluding SARs, increased 7.3% due to favorable pricing and cost savings initiatives • Second time in eleven years, Sealed Air delivered Adj. EBITDA margin growth • Generated $509 million of Free Cash Flow February 3, 2014 • Completion of W. R. Grace & Co. Settlement agreement is a significant milestone for Sealed Air, creating financial flexibility and additional cash generation in future years Reported U.S. GAAP Measures, Continuing Operations Q4-13 Net Sales: $2.0B; Operating Profit: $172.6M; Net Income: $3.6M 2013 Net Sales: $7.7B; Operating Profit: $602.1M; Net Income: $93.7M Q4-12 Net Sales: $2.0B; Operating Loss*: ($420.0M); Net Loss: ($345.2M) 2012 Net Sales: $7.6B; Operating Loss*: ($1.4B); Net Loss: ($1.9B) *Includes impairment of goodwill and certain intangible assets associated with the Diversey acquisition |
![]() 4 * Constant currency refers to unit volume and price/mix performance and excludes the impact of currency translation Regional Sales Performance FOURTH QUARTER 2013 Q4 Net Sales: $2.0B Reported Sales Growth: Up 3.0%; Constant Currency: Up 4.1% Latin America Reported: (1.3%) Constant Currency: 6.7% % of Sales: 10.7% North America Reported: 3.1% Constant Currency: 3.6% % of Sales: 38.4% Japan/ANZ Reported: (6.0%) Constant Currency: 2.7% % of Sales: 7.8% Europe Reported: 6.1% Constant Currency: 2.6% % of Sales: 32.6% AMAT Reported: 4.2% Constant Currency: 8.0% % of Sales: 10.5% |
![]() Regional Sales Performance 5 FULL YEAR 2013 * Constant currency refers to unit volume and price/mix performance and excludes the impact of currency translation 2013 Net Sales: $7.7B Reported Sales Growth: Up 1.7%; Constant Currency: Up 2.7% Latin America Reported: 3.1% Constant Currency: 9.7% % of Sales: 10.7% North America Reported: 1.8% Constant Currency: 2.1% % of Sales: 39.1% Japan/ANZ Reported: (5.2%) Constant Currency: 0.5% % of Sales: 7.4% Europe Reported: 1.2% Constant Currency: (0.3%) % of Sales: 31.8% AMAT Reported: 6.5% Constant Currency: 8.8% % of Sales: 11.0% |
![]() Net Sales Performance Product Price/Mix & Volume 6 By Division Q4 2013 2013 By Division Q4 2013 2013 Food Care 3.2% 1.6% Food Care 1.0% 1.7% Diversey Care 1.8% 1.5% Diversey Care 1.1% 0.5% Product Care 1.7% (0.2%) Product Care 3.1% 2.6% Medical/New Ventures 13.3% 2.3% Medical/New Ventures (6.0%) (1.2%) Total 2.7% 1.2% Total 1.4% 1.5% By Region Q4 2013 2013 By Region Q4 2013 2013 North America 3.7% 1.5% North America (0.1%) 0.6% Europe 0.2% (0.2%) Europe 2.4% (0.1%) Latin America 7.1% 5.1% Latin America (0.4%) 4.6% AMAT 3.0% 2.0% AMAT 5.0% 6.8% JANZ 1.1% (0.6%) JANZ 1.6% 1.1% Total 2.7% 1.2% Total 1.4% 1.5% Product Price/Mix (% Change) Volume (% Change) Favorable Price/Mix in every division and in every region in Q4 2013 |
![]() Food Care 7 SALES GROWTH WITH FAVORABLE PRICE/MIX Q4 Net Sales ($M) Packaging Hygiene 811 832 175 180 986 1,012 Q4 2013 SG&A Volume Cost Synergies Q4 2012 Q4 2012 Q4 2013 Packaging Hygiene 3,049 3,106 691 705 3,740 3,811 2012 2013 Q4 Adjusted EBITDA, excluding SARs ($M) SG&A 2013 Perf- based Incentive Comp 2012 Volume Cost Synergies * Other includes ($20M) supply chain costs primarily related to LIFO adjustment, non-material inflation & timing of inventory adjustments; FX: ($1.4M) Full Year Net Sales ($M) Full Year Adjusted EBITDA, excluding SARs ($M) * Other includes ($13M) supply chain costs primarily related to non-material inflation; FX: ($3.9M) Other / FX* Mix & Price/Cost Spread Mix & Price/Cost Spread Other / FX* -3 -8 -28 151 17 2 14 156 579 25 20 58 535 -21 -24 -13 Perf- based Incentive Comp |
![]() Diversey Care 8 INCREASED ADJUSTED EBITDA , EXCLUDING SARs 57 6 4 8 52 Q4 2013 SG&A -3 Volume Cost Synergies Q4 2012 Perf- based Incentive Comp -6 -4 223 20 5 34 210 SG&A -7 2013 -25 Perf- based Incentive Comp 2012 -14 Volume Cost Synergies Q4 Net Sales ($M) Q4 Adjusted EBITDA, excluding SARs ($M) Full Year Net Sales ($M) Full Year Adjusted EBITDA, excluding SARs ($M) * FX: ($1.2M) * Other includes ($12M) supply chain costs primarily related to non-material inflation & inventory obsolescence; Also includes bad debt allowance of ($4M) recorded in Q3 for large customer in AMAT; FX: ($1.2M) Other/ FX* Mix & Price/Cost Spread Other/ FX* Mix & Price/Cost Spread 534 546 Q4 2012 Q4 2013 2,132 2,160 2012 2013 |
![]() Product Care 9 STRONG VOLUME & POSITIVE PRICE/MIX IN Q4 SG&A -2 Volume Cost Synergies Q4 2012 -8 Perf- based Incentive Comp -2 Q4 2013 2013 -17 Perf- based Incentive Comp -7 SG&A -9 -6 Volume 2012 Cost Synergies Q4 Net Sales ($M) Q4 Adjusted EBITDA, excluding SARs ($M) Full Year Net Sales ($M) Full Year Adjusted EBITDA, excluding SARs ($M) * Other includes ($7M) supply chain costs primarily related to LIFO adjustment & non-material inflation; FX: ($0.3M) * Other ($12M) includes supply chain costs primarily related to LIFO adjustment & non-material inflation; FX: ($1.0M) 407 424 Q4 2012 Q4 2013 1,578 1,608 2012 2013 247 16 19 250 68 2 5 5 68 Mix & Price/Cost Spread Mix & Price/Cost Spread Other/ FX* Other/ FX* |
![]() Q4 2013 Net Sales 2,013 Foreign Exchange -22 Price/Mix +52 Volume +27 Q4 2012 Net Sales 1,956 10 Q4 Net Sales ($M) Full Year Net Sales ($M) Q4 & 2013 Net Sales Bridge 7,691 2013 Net Sales Foreign Exchange -76 Price/Mix +94 Volume +114 2012 Net Sales 7,559 +3% +2% |
![]() 11 273 26 11 28 275 Volume Q4 2012 Adj. EBITDA -1% Other/FX* -42 -17 -7 Q4 Adj. EBITDA, excluding SARs ($M) Full Year Adj. EBITDA, excluding SARs ($M) 1,073 40 112 1,000 41 Volume 2012 Adj. EBITDA +7% Other/FX* -61 -25 -34 Q4 & 2013 Adj. EBITDA Bridge * Others include ($46M) supply chain costs primarily related to non-material inflation; FX: ($5.9M) Cost Synergies Mix & Price/ Cost Spread SG&A/ Other Perf- based Incentive Comp Q4 2013 Adj. EBITDA Cost Synergies Mix & Price/ Cost Spread SG&A/ Other Perf- based Incentive Comp Q4 2013 Adj. EBITDA * Others include ($31M) supply chain primarily related to LIFO adjustment, non-material inflation & timing of inventory adjustments; FX: ($2.2M) |
![]() ![]() SIGNIFICANT YoY IMPROVEMENT 12 ($ in millions) Year Ended December 31 Free Cash Flow ($ in millions) Free Cash Flow 2012 2013 Adjusted Net Earnings $193 $263 Depreciation and Amortization 317 308 Profit Sharing Expense 19 35 Settlement agreement & Other Non-Cash Interest 61 67 Restructuring Payments (103) (107) Tax Payments (109) (111) SARs Payments (24) (46) Net change in working capital items* (77) 96 Other 117 120 Cash Flow from Operations $394 $625 Capital Expenditures (123) (116) Free Cash Flow $271 $509 Year Ended December 31 * Accounts Receivable, Inventories & Accounts Payable 271 509 2012 2013 |
![]() Adjusted EBITDA: $1.05B - $1.07B (D&A: $315M; Interest Expense: $295M) Net Sales: Approx. $7.7B (Organic growth offset by product rationalization and more than 2% unfavorable FX) 2014 Outlook Adjusted EPS: $1.50 – $1.60 (Anticipated core tax rate of approx. 25%) Free Cash Flow: Approx. $410M (Assumes: Approx. $170M capex, $150M cash restructuring and $280M cash interest expense) Note: Adjusted EBITDA, EPS and D&A guidance excludes the impact of special items. Adjusted EPS also includes $0.12 benefit related to the Settlement agreement. 13 |
![]() Q&A Earnings Conference Call Fourth Quarter 2013 |
![]() Appendix |
![]() Q4 & 2013 Adj. EPS Calculation 16 Reported U.S. GAAP Measures : • • • (1) Comprised of $38.9M of property and equipment depreciation, $30.8M of amortization of intangibles and $3.8M of share-based compensation, net of ($0.3M) special items (2) 2013 contributions to be made in Sealed Air common stock ($ in millions, except Adjusted EPS) (1) Comprised of $160.2M of property and equipment depreciation, $123.2M of amortization of intangibles and $24.1M of share-based compensation, net of ($5.3M) special items (2) 2013 contributions to be made in Sealed Air common stock Q4 Adjusted EBITDA $261.8 2013 Adjusted EBITDA $1,034.6 Depreciation and amortization (1) 73.2 Depreciation and amortization (1) 302.2 Interest expense 91.6 Interest expense 361.0 Non-cash profit sharing expense (2) 5.2 Non-cash profit sharing expense (2) 34.7 Adjusted pre-tax earnings $91.8 Adjusted pre-tax earnings $336.7 Core taxes (20.0%) 18.4 Core taxes (21.8%) 73.5 Adjusted net earnings $73.4 Adjusted net earnings $263.2 Diluted Shares 213.9 Diluted Shares 213.5 Q4 Adjusted EPS $0.34 2013 Adjusted EPS $1.23 Q4 2013 Operating Income: $172.6M; Net Income: $3.6M; 2013 Operating Income: $602.1M; Net Income: $93.7M Q4 2013: Recognized $0.11 in discontinued operations, including $0.10 per share gain on Medical Rigids sale 2013: Recognized $0.14 in discontinued operations, including $0.10 per share gain on Medical Rigids sale |
![]() Liquidity & Net Debt 17 ($ in millions) Liquidity Position 1,901 Net Debt Lower net debt as a result of cash generated from operating activities & asset sales, partially offset by capital expenditures & dividend payments 992 700 209 Dec. 31, 2013 Cash & Cash Equivalents A/R Securitization 4,779 4,332 Dec. 31, 2012 Dec. 31, 2013 Revolving Credit Facility |
![]() 18 GAAP Operating Profit (Loss) (1) 2013 2012 2013 2012 Revised (2) Revised (2) Operating profit (loss): Food Care $ 119.6 $ (95.0) $ 431.4 $ (170.9) As a % of Food Care net sales 11.8 % (9.6) % 11.3 % (4.6) % Diversey Care 11.2 (322.4) 57.9 (1,278.4) As a % of Diversey Care net sales 2.1 % (60.4) % 2.7 % (60.0) % Product Care 56.7 56.9 200.4 207.5 As a % of Product Care net sales 13.4 % 14.0 % 12.5 % 13.1 % Other Category: Medical Applications business and New Ventures (1.9) (24.5) (12.7) (36.0) As a % of Medical Applications and New Ventures net sales (6.2) % (86.0) % (11.4) % (32.8) % Total segments and other category 185.6 (385.0) 677.0 (1,277.8) As a % of total net sales 9.2 % (19.7) % 8.8 % (16.9) % Costs related to the acquisition and integration of Diversey 0.4 2.6 1.1 7.4 Restructuring and other charges 12.6 32.4 73.8 142.5 Total $ 172.6 $ (420.0) $ 602.1 $ (1,427.7) As a % of total net sales 8.6 % (21.5) % 7.8 % (18.9) % December 31, December 31, (Unaudited, $ in millions) Year Ended Three Months Ended (1) The supplementary information included in this press release for 2013 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. (2) In December 2013, we completed the sale of our Medical Rigids business. The financial results of the Medical Rigids business are reported as discontinued operations, net of tax, and, accordingly all previously reported financial information has been revised. |