SEE - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen and welcome to the Q4 Earnings Conference Call. Currently at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] Also as a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to your host to Lori Chaitman, Vice President, Investor Relations. ahead. go Please

Lori Chaitman

good and Thank morning you everyone.

found begin like that made would we help from our can our today, be at during and slide like I note that guide to be presentation This I call IR to discussion. today's we downloaded statements to webcast can Before presentation our on sealedair.com. have would solely These on predictions for that website the periods a provided statements management's are you remind to stating applies statements. based information in available you outlook or now forward-looking the call encourage section release earnings to presentation, to information and our the are is which future call. We this entitled forward-looking us. in slide this statements review

due revised future report a our updated or of can website our performance factors. Many listed differ which our X-K, as factors annual quarterly also most website on reports on recent XX-Q our you find SEC's and of and may these on XX-K the sec.gov. and number are current in Form at on on Form reports Form to on Additionally,

financial We U.S. not that conform measures GAAP. to do also discuss

we information correspond reconciliation to find appendix some of our that on throughout of may non-U.S. and presentation, presentation. use reference you measures their the today's of important You release. Included measures GAAP U.S. to results financial these in GAAP the U.S. our earnings in will GAAP find the

Ted? to Doheny, Now to I'd our President call like and CEO. the Ted turn over

Ted Doheny

recent results. Reinvent our I'll I'm joining progress recap with the for going our the the then detail go and we'll Thank fourth industry conference Thank of XXXX, future financial Waste. conduct End I call. commitment a SEE. to quarter more on I'll on into then Plastic packaging a provide our for our you more outlook question-and-answer our begin expand year. highlight for will about Lori. also to to you, for quarter our Bill and XXXX and will to the session. commitment join us to year-end the Alliance sustainable lead results then

year-end, announced us stranded cost our we at operating currency These on As savings in efforts we which new the focused XXXX initiatives deliver in higher cost. implementing input December. leverage SEE quarter Reinvent on vision, our despite fourth and enabled headed into higher and for to commitment even XX% headwinds and XX% leverage executing we

X% of in a over rate on For adjusted the $X.XX, of share EBITDA, tax sales X%. increased increase earnings lower per of an full-year, resulted repurchases share adjusted Higher XX% EBITDA growth and XXXX.

As Bill Overall, to SEE. this momentum making capital free shortly, discuss performance. due by execute lower we're cash was on expected will we build working and will to progress Reinvent on flow continuing than

is us to transformation serve. will to take the catalyst reinventing are performance. Reinvent markets We we growth drive that Company the SEE world-class above the

We Sealed addressing Air areas. execution, improve the how Operational innovate, entire Company. successful make our the will buy, our we sell. and we across To are key ensure embed following Excellence We'll

and resources technology on sustainable market First, solutions. focusing in speed markets innovations. on to high-growth investing We're with

rate existing and over in growth markets. years double with us to the expect reward We profitable five innovation will that new our and next

capture pricing improving margin improved channel implement drive Next, experience. optimization customer We'll sales and while value productivity. leakage to reduce

strategy growth network extensive distributor leverage will to align in dynamics. changing our end-market better We with our

customer reduce customer enhance making digital investing processes in service reference. cycle and customer a systems experience are time to every We and

experience. We're A our structure procurement, Air. that to to one two Deily, customers' productive more more productivity, enable I'm serve one effective moving higher in efficiency. going making one innovations, team happen have Air. is this for after Karl area, drive new and organization and critical by We're yield, our go-to-market for who cost under And creating to finally, rationalization as for conversion as Sealed SG&A Officer Sealed Another and further SKU productivity step enhance speed efficiency. divisions Commercial materials global our excited product nimble, and network commercial will strategy opportunities drive a Chief cost operating efficient simplifying

capital Our grow economic Sealed earnings to have faster Air strategy XX% with serve, power than we a drive is operating the for value. to markets deliver and above leverage strategy disciplined allocation

XXXX. positive a enable increase with aligned Let rates. XX% and world sustainability also member impact exceed and in of a accelerating and quarter, spoke about plastics shift new our we've We reuse teams our society. the to waste to and Last pledge, in actions we're the Since recently that January. the making next content partners around collaborating was me and innovation our environment embedded years. sustainability this an the important or strategy, necessary topic by I to We're end offerings Alliance reusable to We're help alliance achieve recycled on goals. us to Waste This has to committing now goal in you innovations our became sustainability recyclable recycling how deliver our to our XXX% a End then, five to Plastic drive to first that plastic over commitment. introduced

waste pass as in the as detail. in power jointly of now the means across manage and to well to from Bill? We I'll to more solutions review circular chain promote value the collaborate results the minimize companies call use our to material more develop to Bill economy. will management with that plastics waste plastic members suppliers effectively

Bill Stiehl

Ted. you, Thank

Let's Care. fourth dollars. all EMEA and across constant increased with North in region X% reported in constant largely by of largely of America, X% North dollars and as X. in driven quarters review AFP Asia-Pacific. X% by volume start America Food a Latin constant in dollar Product pricing. primarily in price Latin Food of X% the the and up delivered growth mix North driven XX% was dollar in for our Care In U.S.-based the constant first X% with as X% due in growth up XX% Care sales We year-over-year net dollar slightly by growth tough regions sales X% was growth America time was a X% result America, declined acquisition. comp a favorable Volumes on in slide quarter, trends. In to America in five

acquisition Germany, and Care currency, was Russia. in largely and Excluding North experienced America was Slide growth X% full-year. X%. up X%. the and Product and in Asia-Pacific by up net Care Japan. of X by Product sales sales we with America dollars up Care the driven in region Zealand X% increased X% New North Food Strength Australia, illustrates in for in EMEA, In and trends growth volume positive France constant

America trends Care EMEA Excluding in North X%. UK, and led acquisitions, Italy, X% Product up increased was by Russia. the favorable Germany

volumes in acquisitions, mix and a constant region. related Care trends of throughout we as to quarter volume pricing are trends metric, price Product X% to in delivered and ramp-up growth global last growth a declines This we Price slide was offset price Care as we On and increases, and Slide first continued was how in slaughter price insight year and packaged for for the Latin full-year, growth quarter. delivered demand growth. provide dollar realization covered X% on into mix due recovery trends our of a and year the sales the bridges business XXXX, highlights to X% and us mix as XX% rates e-commerce and as in stable the Care report Care Food nine devaluation increased by division with wins. stand-alone announced volume our quarter solutions. the Food in volumes of to XX% the value-added Asia-Pacific protein will mix demand strategies due X%. X non-differentiated pricing In volume to Care I higher product sales first up two in the Beginning of pass-throughs and due the we Australia Higher basis, X, positive Product fourth related favorable EBITDA solutions In move growth on in months shift the fourth proteins by customer currency our conditions. to America, previously formula was will ended value of Asia by favorable progressing. for market offerings. will offset X% volume new relatively present to in to were Product added more with change slides. volume. in price weather well the were and year.

focus XX basis We of EBITDA offset my on Margins performance. $XX comments and million of $X on increased Adjusted price mix So costs. growth of delivered XX.X%. $XX a spread which million up operating and million were will realized of restructuring and favorable dollar million We of volume million. constant higher $XX X% cost points savings $XXX basis. EBITDA

currency productivity headwinds us behind XX% year, largely average way shares are delivered our as $X.XX costs EPS or last was Despite ratio. outstanding SEE $XX profit was on what stranded Adjusted growth to are currency million. drive and XXX eliminate we to operating of Unfavorable under input higher to we shares. relative diluted costs initiatives efforts leverage million to Our define now Reinvent improvements. and

in quarter. for sales the and bridge tax adjusted Our XX full-year. EBITDA the rate was fourth XX% Slide our displays

XXX operating shares share favorable program. results million upon our and growth performance. This million the Directors is by on net and Product of average by of remaining million combination that outstanding as were of mix was market price completion in favorable Adjusted currency. open on repurchased a spread offset currency as the million well million higher price and sales accelerated $XX driven XXXX partially the diluted mix Board in trends headwinds acquisitions. our valued by and repurchase $XXX restructuring top based volumes, under $X.XX authorization. well bridge, of as illustrated offset line share an shares We driven by at shares. higher savings half As $XXX was was current XX Care There volume EBITDA weighed cost costs through as in per second earnings

compares Our in XX.X%. rate our was This tax adjusted XX% tax in adjusted of to rate XXXX. XXXX

XXX tax in our For optimization XX%. legal expect related basis domestic anticipated rate adjusted entity and structure. to post-Diversey decline foreign tax our The of XXXX, in rate adjusted is reduction point a to we our

dollars let's currency of full-year quarter results very Care. we We in improved On constant Now the Care's of pleased volumes in slide Food XX% fourth our up $XXX present division. to favorable sales. results XXX to turn dollars XX, to with X% Adjusted were light and X% $XXX million. due basis XX% increased by for Sales in headwinds. in million EBITDA results to constant X% mix. QX of Food and net price were points higher Margins

for market fourth volume the demand increasing the full-year the Reinvent X% strong all delivered full-year. Food growth across Care improved in rate that operating innovations. year in and already North and the costs dollars, to growth it's in X% on the core points Food due portfolio low-single constant was XX% our global penetration Care to in global region sales basis in in were continued sales. to The adjusted By in quarter off markets efforts higher to leverage of America way. X% new our increase EBITDA growth XX growth. to with quarter was stranded actions protein volumes Food of experienced year product Margins up that up XXXX, of X% volume growth, and SEE are due to and Care in sales see For throughout delivered regions XXXX. eliminate the XX% X% our in impressive the digits a under

Asia-Pacific in X% and of growth America, Latin volume in X% in delivered EMEA. X% also We

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into the future. trend well expect continue We this to

platforms, packaging Our innovative the to directly solutions technologies. our is fluids market FlexPrep and and into includes materials vertical dispensing that our successful integrates equipment, which pouch penetration related

slide confident We X% Product in Product are On will above net leverage. deliver sales dollars. we increased from the million continue while results of rates XX, strong fourth on highlight division. the top Food In constant our $XXX market Care Care Care quarter, to line growth driving operating

We mix. offerings Product see sales system. on inflatable in Care platform, acquisitions, were were price up volumes volumes X% paper America up automated X% by stable Excluding driven were favorable strong that to pleased growth and bubble and North wrap our

to due Wars uncertain well increased North China EBITDA declined in UK up managing to X% acquisition. environment $XX were as America, Trade compared of and restructuring volumes is and million an challenges factors. from China The contributions as macroeconomic or through dollars in facing of primarily XX.X% is as savings production the While due constant AFP the last UK Adjusted as decelerated from rates. year to sales economic well

For X% on delivered the dollars, adjusted full-year in EBITDA Care growth. constant XX% Product sales growth

was well their contributions goals. favorable line e-commerce were year to The As reduce automated increased and mentioned, of minimize sustainability as solutions, all as as paper, as growth Korrvu see savings meet our are in price by demand spread, our waste, XX.X%. price damage In we essentially top our Inflatable continue acquisitions. Bubble acquisitions line to with from fulfillment, mix well and designed customers favorable cost which help as well for mix. from Wrap, Margins at benefited business as driven last restructuring

to fill solutions and are and accelerating that mailer, elimination our box are XXX% We automated. void our recyclable investment reinvent

We packaging growth includes industry our business that foam as dynamics. our well modify meet by margins our changing We their our Care our are portfolio, specialty offerings. to will expectations see applications in BXB opportunities to trend with fabrication, specialty working customers industrial market end ready. to to with strategy and accelerate This our are their which optimizing Instapak Product expand parcel align go-to-market new better integrated products as simplifying

recent in of flow our $XXX We which below generated million indeed Let's forecast on now in cash turn free our to was most for flow slide million. $XXX XXXX free XX. cash XXXX,

not fourth many that of expectations, in third XXXX, capital weeks payable our year-end. the accounts know, toward did In of As the of the while is weighted and our last working capital performance our of seasonality our the working of accounts $XXX to fall in were decline decline sales. heavily the enough turn payments from short particularly inventory payments Restructuring few to you was to year, in net was levels this quarter Interest outlook our payable. for time, payments, At call million. offset $XXX interest our million operations our were results core to expenditures tax million. will to Ted back Cash in I million. $XXX net Capital discuss XXXX. of X.X% or income dedicated over were $XX did

Ted Doheny

Thank you, Bill.

billion Unfavorable sales Turning or On sales are is increase approximately Product by expected Net Care X% dollar total outlook. XXXX to to our are sales constant Food growth as be reported. expected impact million. X.X%. company a expected to net X% to currency $X.X Care negatively and basis, $XXX with up X% up

net to sales increase an is Excluding an the million organic for $XXX acquisition, be approximately growth of are expected X% to the to basis in Product to EBITDA Care. Adjusted AFP X%. up on be approximately expected X% full-year million, $XXX X% with

$X.XX, estimate impact help target is expected estimated leverage million. prior the in reach This in be to expected and X% repurchases $XX year. our in operating of is approximately the range is XXXX. currency additional XX% an assumes which We have Our EPS to compared of to of shares unfavorable XX% XXXX. to Currency no in Adjusted will $XX to offset savings, headwinds. increase inflationary EBITDA forecast $X.XX on restructuring to million

for For cash payments $XXX in approximately million full-year, our million, the CapEx. flow net million of $XXX in outlook free restructuring is $XXX and

$XXX productivity prioritized CapEx slide sales improvement align expected are of XX, SEE that working to $XXX and restructuring net identified of As we our to free million. initiatives. million to income with an and our be and growth estimated and payments, capital on to Reinvent expect we behind part velocity. planning, of approximately high restructuring net payments flow tax our strategy interest more XX% return Once investments we interest Cash is efforts conversion increase over our cash On programs. detail with provide us, X% in of are be EBITDA

focused is stranded eliminate be completed on XXXX. the is existing track of first efforts program our on to costs. half to Our largely completing in This

SEE I new Reinvent and be million. by existing is way of from to as cash XXXX. as part $XXX savings $XXX expect Cash million completed range to we announced Our anticipated previously of program new million mentioned, of be In In the $XX end is our approximately be program additional savings and already under our expected be strategy and in XXXX we XXXX, restructuring the payments and to are approximately primarily restructuring will benefits $XXX to to incurred $XXX million. anticipate million. payments be of in XXXX. These XXXX,

new see our you'll levels reach performance a year we As Reinvent executed on begin of continuing us to and new our strategy, world-class. journey SEE

drive CapEx long-term growth manufacturing Reinvent leverage accelerate updating for to the expansion to above improve I'll unleash we We Air profit year. to we SEE Sealed operating forward now and our to are We opportunities. reinvent progress SEE, for growth expecting to our efficiencies and call investments markets again will organic to double produce With confident questions. the returns ratio look are on our XX% shareholders. that, or you margin growth achieve the and open serve, industry-leading throughout With

Operator

sir. you, Please Thank comes Our go from question [Operator Instructions] from first Gaffner Barclays. ahead. Scott

Scott Gaffner

of way also productivity Company separate, kept with Food SG&A segments the can company Product about in Care that, from opportunity different Bill, anything, relative in a the wanted headquartered in done about talk Ted, productivity you some Thanks. the Thanks. to talk productivity some put were of achieving of whether the the before I the sort that. or place, trying of Lori. locations Good to initiatives the And sure of regards entities it's Care frame line as just Ted, benchmarking that you've part at I'm was to you've to in were, sort that side? peers. historically the your peers. R&D versus morning just initiatives some there Is SG&A

Ted Doheny

up Sure, I'll Scott. to try frame it

two that we of were, of one. Part divisions, now we think the where more versus collectively as three have it's individually historically at each one was we look if it's we divisions. at looking you If look opportunities focus where

the redundancies approach So that the markets having less we divisional, one on functional, Sealed Sealed to focused to Air organization, regional the commercial to have Air announced of serve, simplify allow market, us being as that's one we overlaps. part and more going we out go definitely of think that we there we some having

compared our have So at think comparatives, it world-class, some about that, To we should of benchmarking, the and the using ratios SG&A we were your keep we yes, where peers. do looked we our comparing theme think In where at we question looked be. opportunity. it to we

back looked We on also we tough away XXX added of there and and been and went was, five flat and said over points historically the years, that we pull ourselves and were had we basis Diversey sales the saw SG&A. we fairly last

we we can know today. tools new be had to to a let's there and we more of lot what as can efficient it So at there's say, we Also more effective. be and so see do one look data

You been on on work channel market. know, back effective, and be more also can how working the how systems with we office we access we've to but other, each the some work see digital

we as putting years, dry also around have world. be world we to together, that grocery goods different. to this going there. think with food all the in seeing the am coming so to there sales same seeing customers help around and act push one. So in eight on the customers. And and our shop we to the teams to seeing five example packaging that have We're we we're the extremely our store together some bring bring is excited one. In as be e-groceries We're significant to are opportunity the I Karl to

can of the one. customers So, us acting our value see as

show to up the SG&A. going it's in So

put we do well. Turkey side, as plastic, do or do whether paper, a We technological innovation to pretty that package a materials, we the On how into interesting efficiently, bag a pouch product et foam into Wrap Bubble it's a cetera. materials, and what use

from good coming the plastics give our Product I'll for which it together, and and process example I do as pretty that to it's a we how That's So getting We Care waste that code conquer, Care company. that just that and synergy. working can take we quickly take crack turn one relates we we're and Food see could feedstock can automate scrap and our pretty if recyclable product, you innovations into one think pledge. example together that be the that an our of we

significant think us. of some opportunities we have ahead I

Bill Stiehl

you costs of activities our So the corporate the a get down lot our of on Scott a on as separation reduced a and 'XX noticed, company. overhead in be because focused Diversey to focused on smaller to Care were and stranded SG&A, we XXXX our lot getting

at Care direct looking looking and we're SG&A support reports consolidation in and we're and the support layers, already the things putting in Now number functional Food like those Care of January. in we're the necessary to actions place Product of and area at spans

Lori Chaitman

next please? Operator, question

Operator

you. Thank

Ghansham next Our from Please Baird. from question ahead. comes Panjabi go

Ghansham Panjabi

kind just to back off, first of the guess, going I fourth quarter.

On basically the you for rebased XQ XQ. report, earnings guidance

I second, what the restructuring you surprised be Anything the can will how relative then to And terms So basis XXXX? savings specific Thanks. really savings you of segment quarter? would the the upside fourth first by flow that, share of quarterly the on during helpful. through a initial to cadence to to in off, related guess, guidance your

Bill Stiehl

the to order reductions were we million. of cost business get, to achieve to actually to quarter in to results the looking able question as those able result of in up third to were and the our the a we fourth for with our to And $XXX results, place necessary were current profit Yes, because results Ted came that, and to say thanks that management get drive lot at results on and SEE I quarter of to the for be will we at lift expectation the QX very know, we you looking actions of P&L as in some much in and congratulations exceed taking forecast the able happy in the a reflected some of that saw put so, Reinvent team warning and actions and for a quickly we the actions XXXX. our

Product and Going respect to keep reportable will separate. continue forward, we Care segments, with Food Care

either XX-K for external that parties or anticipate plans Care have to filed operating much the We that speaking issued and in we that our our financials that Food both would XXXX about no in Product will of quarterly we've the past. in way in Care be results two immediate change in weeks be done to in and XXXX will the

Operator

Thank you.

Our from comes Staphos America. from go next question Bank George Please of ahead.

George Staphos

everyone, Thanks details. good morning. Hi, guys. the two for questions, had I

way which know, toward under goals to sustainability Karl What them of finding on more I congratulations under or First and initiatives be and bit what's most difficult and sustainable the products opportunity Karl all, be made about subjective, a leverage be R&D if to are his additional all have the to you're talked you bit that's little synergy combining would Thank that sustainability, you and most then You get a role. that how apply products the combining two? your learnings do so Ted, activities realize which of more you challenging? about And umbrella. the far maybe commercial between I'm you under the and important all little might from you. to your able that of is the, your thinking the on think will, more of Instapak, you

Ted Doheny

two with good always Okay. George, you're pretty questions.

think there two. to to but try is I'll break I it multiple,

George Staphos

Thank you.

Ted Doheny

that. accelerate begin we'll to Karl, and job Karl First, and with about help excited his

where was full by to the different a we probably with finance, built When lowest, of company, country not on the best went do countries the tied opportunity went business, one. our capability, is as all we went to that. learning good analysis different we and that. do to divisions, take what one where get learnings our in we it's the go structure looking the biggest functions the that we most, how in customers, country market and the the got were we're how and we are with countries the service but all functional our do we the, most how we of company, we back were analysis is how is and these into of get force business and And into SG&A, more care cost efficient the resources, get do we've has set for On lowest a going so go the before the in up been

I where looking On the really and R&D of before. the We as side, what going at mentioned the industry automation. things is process it package do, is is we

we you our do third for across we point look customers questions can how that and the It have lens one about do of how that So the some packaging into ties going answer with divisions. the challenging. our together said automated those at where most

make Let recycled me XXXX. talk put we we to want fully why about if get recycled. the by look, opportunity that at challenged that ubiquitous fully we we research that film look the Wrap, said, can't are Bubble again is We what to in our team, we

technical up, turned and we solution. do to do Wrap? proprietary What there a Bubble have think solution fully equation get you need We recycled now? do said, a get the going material we we we into we the now, how So to have

we surely than go but XXXX, that getting going faster are a Now, happen was done. action and that that that to cross-functional do we to team got make research

in tremendous So with process for to of internally add part of look past care goes the the versus we one Diversey at part Care, think is part I to goes a Product and opportunities Food a Care, the lens a part goes a in and comment our, about it's that's Instapak, the your to where, going sustainability. it's fastest. better solution to biggest the us so To taking that's the opportunities acceleration to

one after going we're to to have folks answer out. going So that go but Don't figure are our research that have yet, to that.

Lori Chaitman

Operator, next question please?

Operator

Thank you.

comes Montreal. go Please Mark question ahead. of Our Bank next Wilde from from

Mark Wilde

Yes, Ted. good morning,

Ted Doheny

Mark. Hi,

Mark Wilde

of Ted, could terms of the market? just on that channels I making little color wondered some more if shifts the in a put you're you to

Ted Doheny

about we go at first about direct base. market. distributor We looking talk how our to if channels Well, market to through our and

One portal talking to about, the more of we market. introducing to an have we're want kind, actually the e-commerce and

Part of know market. that if access for what our, so problems, having their me So they year in ways being how our to the we to let's use we solve now truly customers direct a for is it's say, can been need, tremendous help. those business we know three can

So efficiency, network. access use on how base loyalty can it's distributors, stronger very to distribution with we is our we're still where go we drive the working a that but direct When important that is important.

to So the our where us, most they working to and we where distributors, loyal loyal value looking at at, distributors, teams have are adding exclusivity. effective looking been our means are and

a that program program So Air. our Sealed loyalty and the in full and distributors with place, for access of loyalty we a put power rewarded

in more think We that into even of that's So going we'll see XXXX. process.

So thinking direct for how more it's customers. efficient our on side, we be effective can about the and

market Now go cover a interesting, be processor. food and we the which could we both what's end-user to

there like. understand So package how we're what then connected the market of we're package the to how the major package the also packaging, store, repackaged presentation in producers where, with looks in but to retail we large meat make that the at do the our sure bag, then is

the effort I we as as both also mentioned how and segments that we So customer those world, of doing to serving possible. effectively sometimes simply duplicate And that across efficiently think regions before. around do do I give, as effective

of I later. for on have too that we follow-up some opportunity long think efficiency, probably So we answer an can

Lori Chaitman

Operator, next question please?

Operator

Thank you.

Pettinari next comes Our ahead. from Citi. from Anthony go Please question

Anthony Pettinari

if your talked that. you right or was for opening remarks, I provide in could capture be might categories value wondering Hi, terms that end-markets any pricing and good you morning. of pursuing about detail in Ted,

talked the has of I how is think you? front what's would this Sealed opportunity done compare in already versus something been you the in about Air past,

Ted Doheny

pricing paid. Well, great calling value and customers listening for care our capture and because the pay their of the We customers I we we our can will problems, if we the like to got cost don't us because are value it always solving get have will used but take I and, can first is term price. get right

face, So that's put don't use like to so in value. the I why price to called your I

customers the save most professionals to in a give place. saved our have it's you So, burden top two put sales just we money. example money. our tactical that that rewarding We're I'll go the their

are we're best and to save that we the the recognize what you So, much a them customer, going mean. how of that's can showing I as best money you

save price. found that's schemes differently We the at going real by stuff and So, the it's look there we've some at it money. through. the some where a we analysis SKUs done had our continue pricing that have of are what we're take going business, lower. margins this the look are products the theme SKUs let's to we their the gone we to forcing is, is to by could at with us Well, had and world-class. Well, We the to good behind some it way, we wrong that to higher were scenes, tactical selling how or go be that detailed either

that customer six why? we we of within if they put back, automated more So back, that days if And desk front and wait did that customer found it's information. can One a check so customer in that isn't example place, us lost XX got the that customer. we a that putting the and customer. a have discipline against, tools we an to you problem, call putting if we we data in just in If months, benchmark found back you've don't just recover in call place have we to of calling we've deal some tactical our

tactical two So examples.

Bill Stiehl

the SKUs we're Ted of also, lower looking that margin looking leakage, trying optimizing our this of sales at as our structures sales and incentive has to some people, Part indicated. at price for eliminate

and of pre-established guidelines. leakage piece those price is not analysis customer Another exceptions to guidelines granting discount firmer this establishing

Lori Chaitman

Operator, next please? question

Operator

you. Thank

question Our from Sachs. from go Maguire comes Brian ahead. Goldman Please next

Brian Maguire

morning, good guys. Hi,

Ted Doheny

morning. Good

Brian Maguire

or significant them one, are of a percentage from way you as of they Obviously, the on savings. any slice restructuring me, revenue Two percentage questions EBIT.

Just if could you details wondering around more provide the some buckets.

those like know cost reductions, are maybe been of last number. which more, around there? a some of you a if restructuring related reasonable you're topic savings headcount by couple or pull average, expecting bit but some the less seems the could of kind think bit it or and You little of a year years but it's concrete whether rationalizations we is sensitive I to not? Or question then, second years, figure been any just OpEx maybe, the more inflation the that's expecting inflation that what know out And metrics sort a around is, plant have most $XX in that's around running of the there, on contributions out benefits right years offset been little million I acquisition be

maybe the restructuring roughly As got should $XXX life the about be the thinking you that $XXX OpEx million you've to three-year number think of we offset about program million is it savings? that of, of this going forward, over of right such

Ted Doheny

Ted, well, about tag with This back how first that. we'll go go Bill. we'll Okay, forth and and I'll is team

in tangible do of the have are be Some roughly of and did voluntary there. program the some process We facilities closing the will initiated we separation the restructuring, people. in things fourth have XXX quarter, that a that on we that we it's

have if restructuring, buckets tactically, that So we're have the buckets We we Bill I know, streams that look at you. working. want don't when we, we nine described four through? you we our actually have to I to actually go internal work

Bill Stiehl

in as plants looked rolling into as merging in Brazil streams. I&D our well. plant SG&A this, materials so Texas our operations productivity, already in the several of we've the yield and the materials, On and a there's efficiencies. make, operating Product which that Product we're indirect and pricing Norway a we we of we closure reorganization Chile channel look the Argentina. we closed both at buy productivity announced that that announced at looking to at, that work looked improvement, looks and We facility the piece mentioned, got and Yes, We've Care into some we at as direct then Sweden Care the through we're and

all does the $XX as There again, restructuring of voluntary of estimated and plan to plans closely operations, procurement, phase additional we've XX% savings really the earlier XXXX of and we're over is tracking at an P&L we way There relative very, identifying that the will hit spread the pricing, that we're by indicates Food Care. restructuring about and was P&L. parts savings looks actions SKUs, very And going traditional be question confidence Product at split that headcount vengeance forecasting to that XX% not higher G&A savings was way and reflect first Care had are The just give be managing those and in point the about split in around this reductions a savings restructuring the headcount those process $XX and of of we long million we're at those will offset a any million separation go reduction Ted restructuring reinvestment and salary anticipate headwinds. and some savings year any our going involuntary. that possible not inflation at looking to and we're per announced to quarterly us savings that's with

Lori Chaitman

Operator.

Ted Doheny

just is more work we'll post Bill just engine operational this excellence the of Lori, just to streams. productivity covered. two develop vision salary this the you inflation Bill also that to adding can be communicating seven restructuring streams is work that, going described, I follow-up And then our give what means to that in Yes, one going have that with and forward, we're be

that's can So and goal in SEE of what we $XX the is that a Reinvent about. have million to place $XX handle million year-over-year the that that productivity

Lori Chaitman

Development. real and I'll Bill And Innovation add question quick that Operator, I&D that next mentioned is, please. just

Operator

you. Thank

Rodriguez Our Edlain go Please ahead. next from question comes UBS. from

Edlain Rodriguez

Thank you. congratulations. Ted,

been costs good. terms is XX In minutes it's and no like almost which of, resin questions on

in ratio, ratio XXXX, improve the cost XXXX quickly. Can XX% get of as into have cost you accelerate? savings savings, like for you as one quick terms again the that on we this So achieved the operating pretty especially,

Ted Doheny

Yes, first the for of all, resin comment. thank you

or resin, the being XX% but we a have from moving a we're So a out yes, chemical of target. is converter considered company there

savings Bill are see tight. the through really bucket restructuring to come I As is what you'll you'll and this and and math holding do these we're driving

will see but you'll also through. that you through, the come savings see come So

So, we'll program. we be this go as through XX% plus

So that. period we that's process. this that you'll have that we inflationary that as through part of we're go to but not definitely go $XX But we the overnight, previously, million away will see make this talked will it, about

business. been with rails but into the on, those all through XX% we working that put to So highlight guard what do the discipline I the we'll want again, plus,

PG we're hold our have and also the we it eyes so, have as our see carefully that the to is shadow ratio, we metric that and that, very keep ROIC We scenes had been that going committed on watching we've but hard. the out, running we've we the stay a you That behind with to CapEx. prize

our significant ROIC seen the we've why facilities. specifically CapEx, some reasons One improvement the area our that we've of in drive the operating in performance, of increased some automation opportunities will

make keep sure the to So that us I promising. that the delivering discipline value believe path on we're will we're

Lori Chaitman

question Operator, please. next

Operator

you. Thank

Rizzo from next ahead. go Daniel Jefferies. Our from comes question Please

Daniel Rizzo

Good morning.

to are, goal focus, You're we using a index? talked about mind vitality and in innovation that lot mentioning, how are would you a that the a you And going suggest that? is be there if for

Ted Doheny

and the is that show so in developed last after products vitality five Yes, index years. that The have the vitality a we've our that the had index years up five of new sales in definition for while. it's been rolling off

the access to so index university we're putting technical can collaboration the and can the at. we can the team. including pressure our buy on we we up have some to with also vitality incubating modification the If is we're M&A. take some some innovation what, major on with So going technology set a that's what's We look

get index credit the So vitality for that. would

has one so that's but as the part been on on, to next but a velocity and at have also to development. to development We declared So have we're as aren't company, that where again we that that want XX% are what grow assessment on XX%, on the in the of years SEE projects our in double engine, to been? focusing that in that to but to XX%, looking and we it Reinvent this we from It's a long-term team we XX% there take put out sustainability, it the focused do we moving. XX% five what is are pressure reinvent lens,

going our those moving replaced that if it So next we something projects five not be will drive see the can is to bottom that line. years has, in by that's

Lori Chaitman

please. Operator, next question

Operator

you. Thank

go Neel ahead. comes Morgan Please from Kumar Our Stanley. from next question

Neel Kumar

your, Care Product expect type XXXX, automated more you in growth organic that your talk X% the of Of utility for portfolio what can expect about morning. in you good solutions? growth versus Hi,

Bill Stiehl

our we'll growth of Ted We're the looking we're be already captured, expecting some and volume 'XX. Care able value We'll to in our XXXX and Food have volume value about see incorporate compared And freight because year-over-year. talked go and to pricing at very, But Care we for again, very increases Product that channel flat our optimization pricing of business. in Oroduct Care Care Product after some opportunities both to to cost. of the creation flat labor that relatively in

Neel Kumar

Thanks.

Lori Chaitman

Operator next please. go question ahead,

Operator

you. Thank

go comes question Research. Vertical Please ahead. from Chip Our next Dillon from

Salvator Tiano

This in is Chip. for you? guys. Salvator Tiano are filling How Hi,

Ted Doheny

Good.

Salvator Tiano

Great.

buybacks Or question first any as also the because understand and we all look confirm allocation you is on we think my restructuring I correctly, initiatives that of that of related can for whether elevated XXXX. you buybacks deleveraging? was pace still inside were that If So, costs? if capital do And to XQ see you could in of significantly didn't announced. and year, do significant slow last buybacks restructuring into the will the

Bill Stiehl

Yes.

capital the share an level anticipate next we CapEx, the I don't relates looking to year. discussion in share the we at, M&A, taken cetera. dividends is think at our as don't We've entire the allocation do to opportunistic that of that. internal approach it So, a to payments to both the of actually buybacks But of continuing would past, guide by complete buybacks et buybacks factors on we looking our without plan

wouldn't guidance compared the to in in we past relative the any at this year. buybacks point anticipate particular again, to modifications we've So what done share

Salvator Tiano

guidance. question resins we the one resin what recently? the prices something, $XXX kind you versus are And assumptions free million, is were there of capital, the cash could going flow little down so working that kind but And been bit perfect. Okay, what in you actually see up thing from on making happened, upside brought of last

Bill Stiehl

Yes.

been difficult is, quarter about talk So drop it's We December the a told then in XXXX, in resins again first resins and that [indiscernible] a increases of but already announced an I'll very, of very of XXXX, obviously an example. we've predict. XXXX. in lot, we've we issue saw to you October in give heard about price

a perspective very are flat for So from we guidance XXXX, really using a approach. very,

million Ted flat resin see. up the XXXX. We with Supply we very I as implementing that million, $XXX will our excited increase capital of along to and initiatives. free prices 'XX and Reinvent are XXXX our value to focus expect with increase $XXX cash our from and SEE 'XX problems VP on Chain to Senior a we at in expenditures came to creating in million customer's $XXX stay and you how solving Emile Relative as Chammas, throughout the

Ted Doheny

make it Bill. want Okay, to spend we sure CapEx, maybe put scare I just, want I work. to don't to excited people we're

because we is velocity. that finance did working we capital, to it's reduce And years. think flat the So Inventory been we actually about that, some that's an And on one team it's we the we the what have [indiscernible] with we our that inventory. has and had velocity my opportunity days And velocity have last on hand highlight three for if our notice think is put velocity work inventory. there. we improve delivery on-time we could

I about. that have piece think our I opportunity processes, talked as we our reinvent we four an

generation automation, the and the see to higher in as our time, another a there of business. think our have I the cycle cash that process we automation As efficiency, to go improve working opportunity capital go for and an on we you'll business, generator improve capital, level working cash we

Bill Stiehl

go at AFP the year-over-year quarter to XXXX. be a on-time half actually the improving fourth of quarter at looked source of did also as acquisition first delivery in we go of down of in our our 'XX till inventory They inventory, look statistics We from 'XX. and third the working XXXX. up did inventory On anticipate capital slightly

Ted Doheny

not I with do want to that. think We happy we're better.

Lori Chaitman

question, last have think I time we Operator, please. Yes. one for

Operator

Okay.

Our Please last question Capital Markets. comes RBC from from go Arun ahead. Viswanathan

Arun Viswanathan

Hi, guys. Good morning.

and America Food transpires I the North for you Care, you Zealand on outlook next beef can guess how could trends on Just and question Australia, just your a Brazil the touch New well? year then if Thanks. and cycle in maybe on quick as

Bill Stiehl

coming that we've indicate beginning past positive be decelerate the still Food beef it'll in experienced Care throughout XXXX we our in volume. that that's respect our Care futures with our outlook, to is to is having from sales I the the primarily in increase out sales the XXXX. our mean, X% And as expansion cycle, So Care, a look Food herd Food at and but guidance

are We strong of results Brazil major have countries are and several US producers, leading that some the beef seen but in the that.

Australia. in decreases some seen have We

Lori Chaitman

poor some Australia. remained has strong we to them up far to there The did weather herds. and the have some It's slaughter did their Australia. what's issues, strong pushing expect in it conditions were in market and pasture end interesting export They

the 'XX expecting our be markets. of will core production we benefit do in heard and penetration of beef out that we'll into they of the as continued up products in what of from going kind be world that's we rest But think some we're So rebuilding to that then and is mode head our Australia. and we newer in of

we again, packed that some to nicely seeing from lot UK part opportunity we're some of in are meat, in meat So see sustainability our so a benefiting continue and we unpacked has into moving in platform, and case Asia where Europe in to Asia. really particularly throughout also and North been opportunity is again, that are films during America and moving the our ready

do pleased Ted, any you very closing we're that. remarks? have So with

Ted Doheny

reinvent Sealed as for Thank stay their we No, I and Air. everyone thank tuned want to you. time

Lori Chaitman

Thanks to Operator? everybody.

Operator

program. you, for This attending gentlemen today's concludes Thank ladies Thank you. and conference. the

You Good may day. disconnect. all

Sealed Air (SEE) 7 Feb 192018 Q4 Earnings call transcript