SEE - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 Sealed Air Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to one of your speakers, Ms. Chaitman. Lori ahead. go please Ma’am,

Lori Chaitman

hope you safe. healthy staying family and your are and I

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

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

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

over find the our in Ted. call turn corresponds will we reference You GAAP you measures release. earnings our will appendix presentation. to to on their use CEO. President our Ted today’s and the I now important in presentation, reconciliation will Included financial information GAAP find to GAAP of these U.S. throughout Doheny, results the non-U.S. of and the U.S. measures that

Edward Doheny

call. and you thank XXXX And our hope safe. staying all your you Lori. I joining healthy quarter for and are you, Thank of third families earnings

counting are customers our done. get continues, things us on pandemic the to As

their Our couldn’t prouder delivering, efforts. employees and I of be are

stronger will how and harm evolve. will uncertain third our reinvent Jim zero call, today’s transformation global better we growing in a I on results. are strategy automation, do, guiding results this with growth in markets our company. on recap in And business more share our around review close I and Reinvent digital. will how we customers, sustainability our focused of I detail. I an executing how how are reiteration becoming On everything continue our in are our We and supporting environment financial SEE and is the [XPs] will our will share to of journey. us (Ph) centered then quarter

will We Q&A. the call end with

in for EBITDA quarter X last of share results on earnings to period $X.XX. year. We third quarter. XX% per And of sales to third X%. to September Slide recap in to a year. cash our Adjusted turn flow generated in compared $XXX last free ending million increased XX, compared solid we the Adjusted the nine-months same Let’s increased million a X% growth had $XXX as

was largely financial For offset quarters, in delivered in in modest food, and by attributable in Based our raising labor we packaging the strength XXXX volume meat and execution, to service. Growth first a lagging volume organic which time six equipment. across automated growth on attributable full-year fulfillment protective to the protective challenges year-over-year guidance at protective, e-commerce, decline was are in demands improved recovery in all plants in our achieved to-date results key food metrics.

market our our powerful of brands. the call movie-reel we exposure diverse breadth solutions illustrating by which X, Slide to end that our are supported in slide, our turn Let’s

across and year, platforms. We to on pet to of offset is were as e-Food the You packaging the this trends and many in slowdown nine-months There on at not our food slide, channel, service running, In created and goods e-Grocery, a you restrictions and are well meat not of heightened and our and retail the can offset events, higher focus videos including several foods sales restaurants. labor where first supporting derived proteins increase the the encourage you visit website on life with are value find button the by These XX% the fresh across safety strategy, our for in industry sector. see sales will favorable while large an frozen will I in as managing our and of which demonstrating they production other concerns full fluids sciences be play and an approximately world continues around the demands and industries. result our packaging, the care labor the food the by were to imbalance as Also, from next enough are in at food operating equipment a up venues, plants quarter to shortages. automation which hotels service slide. rates challenges the saw highlight medical,

are improve an opportunity automation we for will focus of X% the that sustainability see accounted for for business on growth increasing confident food As our drive plan trajectory the grow we approximately and food high-performance equipment year-to-date and our and which new We materials. normal, segment of to sales sales. a our services,

productivity and for our nine-months channels. strong Bubble flavors, demand, surge our good are exceptionally demand in from XX% on Demand working e-commerce keeping of derived harm’s services. third-party sustainability sales logistics, are shift addressing were and and of already the year. most retail first and to of to We including consumer, Approximately our our the with Wrap requirements. were plans optimize through automated customers people automated The our solutions continues improve in of way mailers, for equipment which products e-commerce their while with that out create

at designed footprint, the to and carbon increase solutions Our minimize same reduce labor speed are while harm pack, to drive time, zero to scarcity. waste, address

to for materials, are packaging experience. important at-home level next is the We our capabilities buying enhancing by taking printing which digital the our

our a transportation and key which element to sales be the of We of shift segments. will the continue The strategy. to industrial, electronics address growth our of e-commerce our serve needs protective consumer portfolio remaining XX% ever-changing channel,

While these prior quarter, levels. they than in expected year below the segments are improved more third still

X. Now turning to Slide

the accelerating environment. This SEE business solutions automation demand growth are to the touchless meet our You for next transformation. can SEE Reinvent a how see our is driving for of phase we

We equipment have XXX now XXXX. by place sales, which in a the XXX of million over triple size to is in plan to our be estimated to million XXXX

keeping modeled You of multiplier life can Xx over illustrate harm’s way. value. see we approach productivity or how solutions conservative the creates multiplier over billion out opportunity automation, the five XX-year taking to potential materials a by tremendous people our of on equipment life are the pull-through integrated waste, We increasing services the this and chart on We see cycle plus solutions cycle. equipment and sale eliminating

attractive for give opportunity savings SEE proactively payback than our and implementation systems targeted us XX% installed of our machines. to remotely ensure for to will base greater of Services Our an systems. the optimize and Smart customer will our and enable The our customers our connectivity

a high-performance Our and the materials integrated with proposition industry. compelling equipment value provide automated packaging services to

Let to give update you Slide and X our turn me an now on leadership actions.

committed employees, we alignment ensure fully to strong harm to live in customers, we communities working operations our are and diligently where and are We with work. for the suppliers, our zero

still effect. management crisis are teams Our and plans regional business corporate remain and in local, continuity our proactive

be numerous chain the global recognize continuity scale our our future the for will risk. improving to operation portfolio. product has overcome. been our and had We We have and But geographies, our mitigated normal new here has have productivity disruption minimal supply business to across foreseeable challenges been and

the be ensure will We a growth in detail. We capabilities us and believe to these call for review in e-commerce more investments now future. to to investing pass are our connectivity. Jim. and in Jim the digital will platforms engine results I

James Sullivan

Thank you, Ted.

region. Slide of net sales largest X% the third sales dollars, America, as totaled review sales, a to X% constant and constant our for turn year-over-year dollars. $X.X billion, X quarter, region, North XX% increased representing net our reported X%. Let’s our up of In in In by up

Pacific Asia and up EMEA was was flat. X%

by X% in overall was X%, America respectively. by with both protective driven more were X% here all in decline declined partially protective trends and North sales down about in a automotive. South by X%, X% By see X% decline X% down have industrial partially segment America was On were This up X% APAC and X%, X% America our and X%, growth EMEA respectively. XX% growth, and in In North both XX%, food, EMEA, South third industrials, EMEA you growth fulfillment particularly was South of quarter, was declined volume sector, where America U.S. exposure pricing. to In we food. in volume increased dollar was organic region. volume X, to regions. APAC X%. and delivered X% Slide in and Volume APAC which offset pricing the offset by the and America due and region, of America and a and North strong up e-commerce in decline our up expectations. and volume X% exceeded index

While in equipment plants strong, labor on slow service in was recovery packaging food and the volumes meat our challenges globally. weighed

month due Currency $XX of sales in soft we about year results. million X% margin partially was first million or red herd peso, last Slide to Reinvent and to meat. a by material the Brazilian declines by X%, Organic included On in spread fresh sales non local compared and to July of Mexican of year-over-year those included in million months benefits peso, with the in contributing inflation up of in in sales third $XXX from August year. million Acquisitions impacted packaging quarter This economic cost improvements. Operating XX%. August and XXXX environment costs increased $X organic of raw in X%, present $XX In on million. bridges stronger XXX the compensation to the $X mostly quarter consolidated up sales incentive-based basis the America of points as EBITDA our and $X with higher also totaled labor line. euro. the September quarter price/cost were $XX Adjusted by systems. for volumes real X% the in million adjusted $XX impacted Australia million and $XX acquisition translation our well. for the or $XX higher so rebuilding was South XXXX, nine-months reducing volume region, the added X, X, cost top offset quarter closed the of or Argentinian are automated year-over-year about APAC, sales consumption the in million and EBITDA which impacted the operating SEE quarter savings in million other million negatively

COVID-XX, We expense. $X movements Adjusted also was by EBITDA which related this price/cost to to $X favorable offset benefit continued million million. incremental incurred spread from spending lower by of travel quarter

quarter third mix the interest $X.XX of net compared favorably negative the XX.X% in expect rate integration month of increases, expense of The tax change to contributed the the impacted trend to and this prices XX.X%, million we in taxes. sales segments. reporting the consolidated adjusted volume EBITDA, the regulations. resins third due adjusted acquisition to quarter was EPS lower well by in between this in rate quarter completion synergies quarter. cost ahead The GILTI gone adjusted was XXXX since the lower $X.XX and the quarter million recently automated on heads with EBITDA very The $X sales of from basis, Adjusted automated third The to higher and quarter the in This July. lower in tax EBITDA a issued XXXX. However, of was of U.S. from realized adjusted $X fourth year’s plan. of acquisition down higher impact was due are

Turning to Slide XX.

an the update is to continues leverage which progress business. and earnest operating provide in SEE. we on driving structural Reinvent Here, in

in to which commercial for Reinvent sustainability, now stream announced shaped into robust and up to markets is carryover for million SEE million $XX to is alleviate are guidance. growth in not $XX our and $XX total continue with and In over In million still restructuring revenue this to work be we of improvement were $XX in from Our $XXX realize of cost of continuous an year with million additional benefits this weakness in provides with the productivity we automation the some has to stream previous strategies, Reinvent and cash driving nine-months changed capabilities year the $XX benefits approximately restructuring governance first operating million growth, pandemic solid system. adjusted targeted Reinvent publicly serve. estimated XXXX. processes expected Reinvent SEE of work XXXX. Cash expecting Reinvent of is markets. our this year-over-year approximately the be XXXX, from new commercial platform was as SEE associated EBITDA, estimate amount The December million productivity in expected and now are driven is end since $XXX about progressing Reinvent ongoing implemented transformation to with The we million payments the are XXXX, helping year-over-year SEE transitions

help were decline mix operating basis and segment, Turning replacements expect around the quarter, future. bag] of adjusted sales XX% margin $X constant results and a quarter. we improvements quarter, down strength offset the sales in equipment meat in More anticipate points and X% million as $XXX food in were cost about $XXX of about benefits or in sales. down the in productivity. and America, food, and third to Adjusted in product material a proposition dollars. in systems processing Slide with or slow Automated the comprise the which sustainability EBITDA of In and pork X% volume, service customers’ X% XX, EBITDA food. represent (Ph) sales EMEA. to of were results In be sales labor currency and for the up million were our Food volumes together, X%. our synergy were we disproportionately parts [webnet], its the automation result the into will In projected sales million spread. dollar Reinvent service $XX up challenges segment as and over to in In with solution, recovery plant EMEA, be of product work improve in due million Shrink were segment X% the price/cost protective Slide the by organic about which most declined up the incremental had cell bags down X% from which and on spread. upgrades with North sales food vertical North new which the net sales, On Organic reported year-over-year and as sales remainder plants growth to will X% of to to value demonstrating SEE X%, sales on America service. the the materials, XX, partially segment. were food starting roughly accounted million drive mix [Rile unfavorable million portfolio constant year-over-year a protective strong food $XXX that quarter, mitigate In currently for favorable up and world of the about channel, delivered largely the XX% declined which automation, net in nearly price pouches XX.X%. are fourth our down we sold and at X% X% $XX reported. highlight third XX margin We line basis cost X% of quarter packaging the or sales of efforts. with food third

offset in quarter, a conditions for and the well the SEE where and APAC, This street customer and as we expect quarter in sales mailers below the automated on of sales. benefits, volumes, economic XX.X%. experiencing the strength adjusted $XXX e-commerce by of our by trends perspective, partially with margin automated or cost rate be year points in last and recorded our for step-up American continued attributable improving lesser automation, our Adjusted fulfillment of third XXX EBITDA the at we $X equipment, spike In XX% cost levels. EBITDA the part higher North based protective acquisition. associated compared strong volumes end approximately are and year-over-year inflatables. to driven in from year segment fourth third From automated experienced charge increased a basis Reinvent an $XX synergies to protected of prior and weak year-over-year up in industrials, to as acquisition. contribution Lower we remaining inventory demand outlook to quarter. as the are in XX%, in realization market, automated costs million The what in is were XX% e-commerce are but EMEA. quarter of operating of acquisition the was the partly With and and still Growth operating expanded million account million e-commerce shipments, the lower

XX. Novipax a cash Reinvent improvement by driven we a cash was let’s on impact nine-months Now EBITDA, delays flow XXXX. the the turn a working in generated project same Slide legal to year-over-year XXXX, cash was seasonal Trade Year-to-date, which first adjusted use payments. is to free $XXX higher related typical million of due million million free The year-ago, lower of lower $XXX the in settlement compared $XXX in the to capital the in company. for the of largely flow and pandemic CapEx restructuring same of period pattern period

previous in from accomplished EBITDA remain guidance our source leverage QX We working is higher payments $XX X.Xx included The quarter expect $XXX at Our repurchases. for third at time Reinvent be of X.Xx, an flow quarter do in $XX expected debt underlying liquidity profile. to to and and working metrics million lower leverage, with our retroactive associated expected XX regulations U.S. free approximate down approximately deleveraging highlights in quarter. this Lower our the XXXX. the Slide well from cash are million raising $XXX tax million and ended maturity the XXXX, to GILTI share refund with net of X.Xx are due and the application Overall, back which largely from we fourth year. restructuring revised CapEx. full-year quarter the to last of the we the in cash outflows SEE capital of cash million fourth with $XXX adjusted controlled, capital and to a range million taxes,

and net to come further year. down to delever, the the Our end by continue do priority expect we leverage is of our to

X.Xx a covenant than due reminder, favorable leverage leverage calculation ratio net reported third quarter EBITDA As in our maximum of as our facility the allowed at covenant in and was certain the agreement. which ratio a the X.X, the of to lower is credit end adjustments credit

with we significant XXXX, capital have and against $X.X billion financial financial of Slide no maturities covenant, On our good until allocation strategy. XX, cushion debt our August over So outlined liquidity flexibility. we

on to continue to balance sheet We attractive a returns driving take approach our disciplined strengthen capital. invested while

growth investing XX% markets We breakthrough and in productivity growth, processes, is automation. technologies. XX% are remaining disruptive CapEx Maintenance focused innovation cost on including currently production our XX% Approximately organic of and of and the products projects product CapEx, and our respectively. organic comprised and

returns, next for the at we being, several our to the shareholder deleveraging dividend share expect repurchase opportunistic maintaining the current activity. our objective time in we continue And over context levels. of are Regarding overall quarters,

our outlook to Turning on Slide XXXX XX.

or dollar approximately a constant estimate to We our now now our constant up as X% be to compares billion. consolidated our protective, guidance in constant previous dollar in the range up outlook billion The which to $X.XXX On increase of are X%, X% higher dollars is growth to by as approximately to $X.XX raising X%. previous net compared expected is to X% driven approximately expected our of approximately previous X%. to of range to basis, growth sales increase reported sales of This which sales in net $X.XXX sales estimate net about the are billion. compares of

expect food negative a expect $XX from to to for on growth. sales We impact the approximately continue currency X% of dollar deliver approximately translation now million We full-year. constant

from is would implies above adjusted For outlook previous $X.XX margin an compares currency range. to EBITDA approximately is million approximately for our to approximately of This of currency our million of XXX be on which forecast the the we of are billion, Unfavorable million. midpoint revising EBITDA, $XX now adjusted XX.X% translation XXXX. previous to our negative year, be an basis $XX EBITDA points improvement which expected $XX a adjusted

$X.XX. approximately from adjusted guidance our $X.XX to $X.XX to increasing are We for EPS

benefits adjusted based the from outstanding. approximately adjusted reflecting is The recently outlook U.S. to in the approximately rate for tax EPS now XX%, expected Our is diluted regulations. XXX revised million GILTI on XXXX shares be

we are mentioned, free cash flow guidance approximately to our previously raising million. As $XXX

cash be Our over was free adjusted in expected EBITDA to to conversion flow now XXXX. XX%

closing me back call Ted the for Let Ted. to remarks. pass

Edward Doheny

Jim. Thanks,

questions. up for open we the Before call

start Turning wanted XPs our with to reiterate Slide We our XX. purpose Reinvent SEE. always of I statement. to

business it. our to We leave are protect, we world to packaging to found better and in the critical than solve challenges

Our as improve progressing are performance we continues world-class. to towards

culture, people By fast harm’s we keeping are out business the operating crisis. through We way of enabling XC our strengthening while are as decision-making.

best make working. deliver to strategy right is and the at price them the Our sustainable systems

us Our needs innovative and global address and portfolio, the evolving our enabled customer and to across has scale product end agility markets broad geographies.

productivity customer customer are excellence driving world-class well as as XC are processes Our and yield flawless enhancements operational improvements creating that quality, service references.

SEE of in we changes see And our in growth. this far can Sustainability in You mind. do. is so with Reinvent operating of pandemic, XXXX to in Fueling the structural reflected everything come. top more leverage our still

that food-grade We meet loop are and share create investment have since excited sustainability our for XXXX Plastic micro in plastics. Cheese and a by been Bradbury’s our able Tesco where to circular packaging. innovating Global, enhancing example, and economy collaborate Energy to for to announcing to drive pledge we with SABIC, lead we Energy, circular Plastic portfolio a I’m our

governance and our diversity business core strategy are into in environmental, social our inclusion priorities and values. We embedding and

ESG We to and manage leverage our proactively risk our success. drive reflected will diversity culture purpose. and inclusion and to opportunities This is in continue and

We have environment. delivered three solid unpredictable quarters and very in challenging a

operating inflation. growth our profitable Our driving engine, is Reinvent business SEE transformation above

and plants We solve from out the working innovation thank and our through innovate their dedication employees are and proud power to field one in of to of I continuity. people remotely to for challenges the centers. how commitment and we our our business to of with how we this pandemic, execute our want toughest Air. all reinventing and continue do how I’m customers’ everything Sealed we our

the Earlier to and has as business career Sealed to many our today, home, Most XX-year has of retire XXXX. with like roles on he recently, to highlight we iconic Air had Officer I instrumental and would is an the has in planning have closer Karl incredible to success call announced along leadership Cryovac held at and brand. Karl Commercial Finally, Karl took us. our April the Chief the transformation been way. we reinventing Deily role that Reinvent on SEE

For tireless to Karl business grateful his transform efforts form I’m for and world-class. me personally, our the in tremendous partner, has a packaging best to been

We have been forward have Carl the now family. has an so smooth advisory the part as We made very for that, Sealed is role. a wish I to Air special a fortunate Karl up all in best of in Air Sealed compound. He a questions. open him look with to retirement transition Operator? With call and

Operator

[Operator of line Bank Instructions] Staphos from you. of George first question comes with Thank the America. Our

is line ahead. please Your go open,

George Staphos

related Hi a at glut of is for Thank all will our one you. coming come questioning, while accretive matter, the really taking in in had time, as to my to question, our And XXXX, guys. guess and more Derma volume right animal, sustainability you a now we was not a quarter conference We knew get heard that the third point there And point. we of to thanks Reinvent food into there but at my got supply you challenges at that over of some be congratulations on do we thought to slaughter. protective that question you help luck were volume why translation the some were and with lot ultimately COVID. going years. the know are into you seeing And was Karl for for knew food. at recognizing with of in we best the of you time food of for a expect that we and Ted, we I and Remember the research fourth with back that you ago, quarter. are just call. XXXX this your spoke first Thank reasons, least

Edward Doheny

calling on right And is George. a I there Charlotte Thanks, now. if in rainstorm apologize everyone here, going

what the on I’m that Karl But first answer that. part, food. to will through a give with for going you So hopefully going turn of talk to we George, to detailed over is

Karl Deily

they think on prior get look the in those mix. Thank tracking And processes in for their skilled X% product slightly mix. without of little absenteeism, they deeper the what up part George, is beef a have in quarter to backlog Yes. the translated we issues work for below year-to-date. on kind And words. year you, as running, going try year you And been through slaughter little also, third the to the market. and in simpler bit seen below and the and it. of they a gone slow I of and has almost a the still to lower bit levels of very, have recovery high Both a and labor service food have have very a with And negative have to prior volume

is what dilutive. above performing still market the it But is. are We

And daily. our pulse on definitely keeping something are we

Edward Doheny

second with take And will to And taking asking are growth. the us Great, Reinvent Reinvent you Okay. into question part drive Karl. XXXX in George, I where sustainability the going of about think you we coming we we about saw pipeline, have have up that. feel built looked we on as into chart, XXXX, at into, savings good it, we a pretty the if

that manage this, to you we $X,XXX the over we now, are multimillion. so that Just we know tracking have X,XXX detail anywhere projects right from

continue feel look have pipeline good we Reinvent and be will opportunities. so to we got strong, do we we and So think for a like will

opportunities the point well, sustainability in and food those as the tie of sustainability business. in to both Protect the on Some second

them think et improving developing we we as we business, bring that much side food cetera. into the make what automation. some automation shortages, And factory labor plants could tie to we that their solutions of new are the innovative pretty meat On our are we doing more processing efficient, in

our the On of we as side, are going we coming that growth sustainability Chlorine as PBDC as there the free in we well. certain chlorine, Plastic see and in rapidly opportunity such mentioned, now already or less as invested developed in circular, materials there XX-months. parts bags, side we a Energy, bags sustainability as in the are we than

sustainability seeing recycled definitely with our Bubble are out lines. make into how Wraps boom, we coming The our we do side, recyclable, and protective already the On sustainable. our product products e-commerce

mailers, our quite and paper but Our continue. not just will The is the nicely, mailers bubble, plastic business growing we also with challenges paper. more the coming And into XXXX. expect

thinking environment continuing. We this post-pandemic are is

pretty feel new help our product will we both us. development good SEE and So Reinvent

The I into automation do the growth our probably question, other what XXXX. about think again talk is going piece, fuel with we to will can

next operator Okay, question.

Operator

question Our with the from Anthony Citi. of comes line next Pettinari

open, is line ahead. please Your go

Anthony Pettinari

to help years. wishes the Karl morning the best over Good all and his thanks on for retirement, and

quick question product like on outperformed in Just and sounds XQ. care. e-commerce industrial a It expectations

Just October. you improvement at curious expect for drivers of kind if that in there? Or of about are to And continued margin when any should that that we improve? think you that look contribution business do XQ, the there in

Edward Doheny

question. in nice how which was Good October, quarter. fourth is that in you the snuck Obviously,

the see we that. share continuing. So trends basically will I

e-commerce we the side, the what shift the in see portfolio. On

our If definitely line about, largest profitable market-driven the what our you these product on look hit Slide most to Instapak, at The which company moving lines. talked in really in we with protective is product going great industrial. the that is X be and a with has

is that a portfolio. the So actually, been leverage language, major our on deleverage using

in in third be grow some being to not the drag it on a is all and going but listed has performance going as Seeing significant through on quarter, margin that still lines industrial So actually, e-commerce anticipate product helped only those We fourth the we think year-over-year. bad quarter. get not really that the business by but that had expansion. different of

seeing engine we nicely. the very very, not in volume, work. we are to that very, continued and shifting mailers demand, can volume, seeing that expansion get wrap on really are where So or portfolio the only get we margin we and come If leverage we the can get bubble fast but very

So we the continuing the definitely think fourth fourth some have through only not we we through fight challenges that, to in quarter. quarter, plan but

We into now taking our are of most spending XXXX. that right momentum is attention

operator. Okay, next question

Operator

UBS. Our with next Josh of from question the comes Spector line

line is please open, Your go ahead.

Joshua Spector

see And is than this peaks then factors question. for your XXXX versus sales? declines? level guess you equipment of higher growth get taking do of Yes, terms hi are automation cycle that the thanks biggest and XXXX. more target Or you equipment driving more replacement there? and your of a and and sustainably that e-commerce I my What doubling in sales

Edward Doheny

Josh, to welcome coverage. so our question. Glad you And back UBS and Yes. have great to personally.

identified. growth those see large replacement, that have Part we of fleet areas equipment. we in automation, an the extremely you both is With actually

If you is look there, at Slide X, we there of machines. say, out thousands

equipment. So of installed is We that service, to as think installed And base, improvement connected digital, there. go think stay the as opportunity parts, we we we is fleet the that have a care automation, driving upgrades. we are taking opportunities of some to that significant it the

announced what On if first at we equipment, up focused. we were And number XXXX from and the already we XXX. the at conference new is we quarter, have this that you when actually this taken last noticed, investor

have to we moving So facilities, environment, quickly already is customers’ packing as help we our plants. and that visibility products this as in developing automate new new this systems meat such

pack do can we now it majors a right We are how in remote with many people the of and harm’s faster, keeping that safer out meat way. of environment, working of

lot used benefits, seeing Both side, and e-commerce that what equipment are of the do the from suppliers get model with working models for productivity, that but multiple is to safety, actually on And we changing to are the finding labor, to materials. of help are where actually focusing portfolio, we help to how equipment help we have especially in on it. protective on actually not the and branding that past. opportunities, food equipment subsidize is can to other more a in on On potential did our we could we only the that equipment what our where

keep from you going are imagine, XXX we And growth, target. a So is are XXX, to growth aggressive as to aggressive pretty externally. as much that we can that what more opportunity internal sharing lots of than our see always, targets

Okay, next operator. question

Operator

next the with line comes from Panjabi of Baird. Our question Ghansham

line is open, please ahead. Your go

Ghansham Panjabi

congrats you, thank and again. Yes, good morning Karl,

as You are the leaving a legend industry. in

career respectful a be time, very So congrats. over so

Karl Deily

you. Thank

Ghansham Panjabi

price a maybe of real-time versus year? this we parts experienced into million of Europe And U.S. in in think that next portfolio what U.S. some again, upcoming the this we a the obviously, part are as then $XX far do lockdowns Jim, cycle as you so Ted, seeing guess, in in cost starting the paradigm changing evolution October. well. off, in you of of the have your sort headlines terms pantry impacts the first and think To of how some price/cost maybe separate about spread extent, should benefited question we quarters, over this you you. for from How Thank loading, few I year first XXXX?

Edward Doheny

want And first you will I Hey Ghansham. to go to Thanks, - do on yours? Good. then Sul Okay.

James Sullivan

is this Jim. Ghansham, Sure.

that talk in did bit spread quarter. little starting comments turn the expect in price/cost a we direction So in fourth we other to the our do

Reinvent, to there is benefits back, some when think in not from sustainable had be just have which we if of the market going amount a We given will, Keep you year-to-date. that is fair and turns. mind,

a the We we a avoid materials really continue what good to globally we inflation. position lot in that doing to do could materials and job by of our way can a

chemicals. the that low-density see and But there. lot you the globally. headline look not we buy severe think if it might resins different a buy when the and So of certain and all one changes you as the buy mix that, at we in big the got the increases is headlines of see we at they of you resins. polyethylene as We North market And look to America around remember,

that So news. the is I think good

in of formulas get buying year. do those better bit a kicking the but I also market in. of to in start think, see formulas, is a think will next terms the we our again, kick I than we will will in delay and the we There

our some contemplating mitigation actions, a will do we I and that are some the into we basis of in That, turn contribution quarter. value some pricing which that some bit And materials think in overall of based XXXX. transition the as guidance. just of fourth formula. But we can on with on So is probably

manageable. XXXX lot of tailwind a is not like reinvent place got we had that have help. course the above actions which feel we I of I in will quarters. very But may it We think keeping over we the inflation, the engine including think year, that and driving in the have three first

Edward Doheny

we question, came and connected And part first world, also because obviously the out about your announcement are into just of going around directly a Ghansham, with our news to the watching that shutdown. France customers the the

We team China was have our put all if connected into immediately. our lockdown how but started, just on this talking facilities been of when it time like we was January with seems about going just what like with them it long was a ago, when

what have on has around going the world. heard we So

crisis We with facilities. people our are in customers, not situation, crisis our with only management, our and

a we will So when quarter did we that in first different the built up how second Because first look and affecting little our do think customers be see hit. happened, if we bit going we portfolio inventory the quarter, we what where simultaneously. it at it with this our

even production on has whether with or not So we is got the customers. look our portfolio What restaurants, going a right will that what is with going that of they bags it whether off The very, our with little Darfresh. what it with to of now going they levels bit is shift some food is burning on keep together very has Will the that reopen? we our working had, and reopen? portfolio had with to what on with the going in closely is our inventory that sure business we make they at

our and them again, at But automation, can very we So of customers. deliver also with those safely we helping the world. on supply in looking are be think, carefully there we

connected. have other do than perfect getting we handle are to stay and the So a answer pretty we don’t used how crisis

very, challenge will fight now. we help are that we to this the right trying quarter So portfolio our and very first first early as think is us do actually through diverse situation solve as where our

question next please. Okay,

Operator

the Josephson KeyBanc. with comes next of Adam Our from line question

Your line please is go ahead. open,

Adam Josephson

morning and everyone, families guidance. your you Good well. Jim, Thanks. are clarification just I on a hope

don’t protective up XQ. commented quarter, degree up the you in same albeit fourth mentioned volumes. expected on You to were volumes I that food to they you in be the think

sales said you up. think don’t on be But food you I think would volumes. I commented organic

for past expectations your volume to they Can And for are mind, X% up the in each be next in were year down two bearing in you So down? the quarter Do regard? thoughts talk that what total you. volume Thank the about preliminary any expect you on of or then company? quarters.

James Sullivan

Sure.

little Let me year bit segment. the clarify to first maybe this guidance of and the stick a around

at as year-over-year. down year-over-year, be still be we you you mentioned, up volume quarter, full-year, dollar modestly. expect of as we with X% So transition do constant the the our just into to was that to food, overall, shy we down But do fourth think I look food very if X%. expect

the a positive. bit a third growth half assumption So there. year of of in the back the protective little a But little in On is bit with consistent drag up better quarter, probably the maybe. We the were protective, guidance And very think quarter. e-commerce third of are would we robust. on The bit less the than trends basis. a bit imply the little guidance the a in volume thing though there, remain X% around cautious a even I little that

little But particular. about growth we do region expect year-over-year in off in in favorable bit in overall, seeing that economy segment in think back Europe, of And cautious well. a bit the as that I a are maybe little particular. there volume we

it how portfolio. can part see have back do, we next get to Ted that normalized in start hopefully, headwind going terms to us the year, is and of can grow open lot really learn us more But market. it a transition business, the improving. is talked where earlier, the as industrials you’re and can the about well. is margins for we of environment the food And point over when the improve next still with And the real to to we production protective we got question. and here COVID get there into hopefully in growing three the as will As we beating we Obviously, levels to an months stabilize,

Edward Doheny

Next question operator.

Operator

comes Jefferies. next Ng, of line Our Phil the from question

Your open, line please ahead. go is

Philip Ng

that you service you how kind industrial kind capacity this your that the wondering pace to you recovery lot. demand your envisioning things. automation, scale separate just I a the no seeing business. of your note, on I a Curious ability of recovery? thinking on business and e-com about side have up just of do of And given the are was strength as in on in protective to guess, a multiyear Thanks and Are

Edward Doheny

was pace, the that the industrial clear, said it through question? you the did - - of recovery. didn’t that come what Just Was on pace

Philip Ng

Yes.

the downturn first part took the mean, to to to last recover I side. pace kind get the previous was few years on the back of levels. So industrial a

better that on how a business e-com is of strength of I’m you industrial pace in are kind scale And recovering handle recovery. of trying So to you the up. envision the just the seeing get part your kind ability second just

Edward Doheny

questions. Good

that downturn on pace the dramatic. has the been pretty industrial, On

the of about we automotive is that a look coming of we industrial at a we again, automotive. with, really our and We largest industrial base have Instapak. back, again, strong Europe thought keep we talking with where saw and we segments start One now have but stop,

We it We So be back. definitely got move where to move doesn’t push seeing want product portfolio. what to think this to that slowdown line will to has market-driven. again. We to we now happening is and industrial growing, really If back. the potential come got what the come again, our products

is resources. can with full if a of you world, capacity supply the pace a is great team actually couple our going around our and keep years and force So and the leveraging were up that our where just question. moving and chain expanding that back with the of Because mailers, we e-commerce, plants go the second, with we

So - are getting the moving a in the it are definitely hit up portfolio, have is e-commerce, with we products good keep those our production we to problem pace. are to by but that

that. working do X, we If be And what are a you is company look are to on in. really you example, go an no are you Slide an you internally company. you the to plan longer moving online, we at e-commerce whole Once region give just again are

where way example, now where at see by that Well, we have our actually of actually you look which actually one can If view core was product, is launched now up. were with the doing freight Internet spirits, on you Australia in it and the put and hits that U.S. The companies, they product us well. for line large the showing in on side-by-side, our up that

whole So moving to company the eat fully we are e-commerce.

pull-through move when got we be So that to to prepared comes.

to we our e-commerce to able our be question, support is portfolio, that. here. to whole moving great business is whole stay. So It are And

the So have for, challenge, good looking think are some ready but that we to capacity the to those it markets. are we and challenges handle challenges, is going those be to we can serve

for chance operator. we Okay I have one more think question, a

Operator

Our with comes the of from line next question Jeff Zekauskas JPMorgan.

Your ahead. line go is please open,

Jeffrey Zekauskas

thought the you your Hi, but why in you expected? much. third growth possible the quarter, shrink still business, pinpoint it I was the would In that care product think that thanks very trends to quarter, organically, than it improve, the last would grew but volume Is stronger X%.

Edward Doheny

but industrial products our we think I’m the on predict don’t as trying the we side, but say we expected. way were didn��t admit saw to than more product core would that Wrap up the want higher on as to were I to up lines think I of that we - up, I’m line the obviously Bubble that And than thinking, demand biggest all are were that on we thought, didn’t. trying this, e-commerce. bad not The ones

James Sullivan

this And both up and thought and declines real fast across If we quarter, of on the of the rest I single-digit positioned products And are coming were we are just portfolio, we world single markets to moving, really sequentially a second QX pretty high And the the a mentioned, move almost we e-commerce. on second of be buying obviously, in ramped We thing have. we is lot to single-digit were there, we the well global. digit. And of with is very the to low upside And out surprised our industrials nicely. then QX. the industrial and are year same the really, with see continue think, that they quarter, the position at of the that stop going to mid- the off came is decline. looking we as the we Jim, those. When in half back in-home

When your way. this are about, talked Ted as of So pretty kind run seeing the demand challenged. supply side is that of you

needs It tremendous So we part it was happen. to its able fortunately, on didn’t a of our with market. the own. the to chain effort were on the of serve the global team that But make supply footprint, happen

the and it in on we So think, Europe. fourth taking pause quarter, e-commerce. is e-commerce in see the I a I think as said, again, little maybe are in especially I But even bit we industrials continuing, into on Europe

Edward Doheny

one the it to, as the is fulfillment sense what more in probably strategy it, forward. a team obvious to it automated had launched up what I I And was centers, our having to thing guess, I and significantly APS. those expectations automation and e-commerce through that on a most and faster for we one, going upside get call, APS how exceeding with got we just public product happening we line our coming at equipment every significant the picture, quarter, that can that to meet that double-digit, giving we up keep that makes that and demand, side, And went the shout and one is how Yes. quicker, is And stuff of has do do our out back look our is now the do the to quarter, they number safer. more

Karl Deily

They to were very e-commerce capable growth. added industrial that from to fuel pivot to

Edward Doheny

on wrap is it connecting forward comment, good today. everyone that good and I operator. as close we our system automated - you, Karl, had next hope into food That to is and come. today. so up even Thank We call for thank for will There message. putting food. quarter. things everybody because the more for to us I look to point with want And stays excellent packaging to safe everybody we it the

Operator

participating for conference. may Everyone, a you today’s does day. have thank conclude great gentlemen, in all disconnect. you the and Ladies and program, This

Sealed Air (SEE) 28 Oct 202020 Q3 Earnings call transcript