SEE - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Sealed Air Q4 Earnings 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 your speaker today, Lori Chaitman. you. Thank ma'am. ahead, go Please

Lori Chaitman

you, and your hope and everyone. good are healthy morning, family I and you Thank staying safe.

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

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

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

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

Ted Doheny

staying all our and of and Chris, on call. the of Thank healthy you XXXX our presented all are new conference safe. and you for thank earnings you, to your team. first want for to I we're Air challenges pandemic world. the call. welcome fourth families Stephens Lori, Chris XXXX Throughout, to his quarter joining excited us Sealed I hope year-end around have and you

here guiding critical X in we leave more is which purpose, challenges to in better solve our to and clear, you pandemic can see world become Our to found it. the on even protect we packaging are the and slide business us than

Our accelerating On customers, and our employees today's proud our delivered, and of the I'll tremendous our team's XXXX. growth we to I'm ahead. uncertain recap an performance I'll this in throughout environment see how commitment exciting in we're pandemic. call, share our business and opportunities

will are and way global with our leading evolving, I'll will results provide outlook. Q&A. Chris digital and the sustainability. Our financial with markets in automation, and call detail we'll XXXX end the we're Jim review more close our and

turn a our Let's recap results. XXXX X to of slide for

the we last fueled being and with an of allowed we $X.XX, performance delivered which deliver. want and long-term taking sales growth adjusted This share beyond. continued business coupled point transformation. expansion X% XX%. are by generated flow we that the our above margin our XXXX SEE basis in is fourth that sharing sales We expect to million, and of are resulting of In on year. with our growth free per was and direction business in and out strong commitments. XXXX quarter cash us $XXX driving EBITDA we of growth earnings of XXX on points the SEE, strong digital are operating is Reinvent X in exceed slide Our execution Adjusted XXXX, performance XX% Reinvent sustainability leverage to we Automation to X% you

with XX% business X% stable deliver expect sales leverage to a base our X% accelerate over basis and year. X% to on Reinvent shared we to this market As on operating X% to points organic that to a create at X% system, serving returns. growth to operating our SEE With grows X% We're growth, and automation. another we before, XXX we're looking world-class

turn new powered brands. iconic pictorially our some X, solutions Let's movie-reel our shows by slide, to which slide

demand You strong shortages. which packaging channel food is service website, visit XXXX, by retail our will and demand, were increased with button sciences. slide, but life continued still to meet offset imbalance stories softness see processors the XX% fluids, current Since foods, approximately more come. our food on other are liquids industry, derived across there's play working encourage from a this stay-at-home medical to challenged to XXXX, March the been in to an can hard In environment. retail new find they're you Food you with and in sales the where labor from pandemic with of proteins,

customers growth with in quarter, our productivity retail the resulted food to has In formats Our and products with by and labor in formats. exposure and service. volume in was responding in offset equipment are solve strong safety fourth shortages another those on in we are to declines and high solutions food largely packaging automated equipment growth challenges. This retail focused continued quarter

We this market sustainable year take with well expect to recovery this of advantage segment we innovations. are positioned new and to believe that later recover

our our maintaining bags recyclable, and preservation for them Cryovac standards example, proteins, optimized while food and For to we've barrier materials industry-leading for safety. for food processes make

our barrier packaging automated have expand condiments equipment, industrials. fluids, service, It minimizes automated distribution bags for and In XXXX, our experienced disrupt logistics, and up The temperature material sales second half our and in fulfillment and offerings logistics of the demand sauces, inflatables e-commerce portfolios secure cost our automated packaging and assurance paper-based continued increase waste liquids our increased sector QX, the portfolio, beverages. of our extend throughput. solutions the serve were shelf to ensures acquired new total retail, electronics encouraging and due automotive. vaccines. sales largely expect containers combination XX% fastest-growing pouches that equipment, up particularly the we of solutions, and retail including minimize in In box bag in XXXX. rebound Automated of lowers to designed were soups, life, modestly, that from industrial and from Bubble and we and double-digits quarter, see was mailers, the consumer of process, process ownership. e-commerce rigid Wrap offerings our and For packaging and Sales the for to our systems, Approximately to strength COVID-XX fourth XXXX. a solution electronics in waste we to were safe and growth automate the and solutions, packaging in e-commerce, also

next growth update solutions business automated slide of to an our strategy, for SEE Reinvent SEE phase our X the on turning for transformation. Now is which driving

see than this sales XX% You on XXXX to $XXX expect that to can equipment we chart grow million. in more over

and multiplier, strengthen, in from pipeline and confident $XXX life of organic potential Xx-plus in including base automated million over of we equipment $X XX-year parts Our are equipment a results over opportunity for by service XXXX. a the When growth the target flow-through in continues solutions in our the these and you cycle. to billion-plus installed factor materials,

As automated I with most mentioned our customers' productivity before, labor we safety are solving touchless and for critical solutions. our scarcity needs

simplifying process, taking these for our an create prioritizing to payback waste, the and people less With we're automating. a removing harm's by three-year eliminating We automation, from customers. integrated SEE that are solutions way approach than those projects

for Our our operations and market integrating way new customers that brought customers full solutions we'll digital environment. system. are to to We are more and we to lead recognizing the by do our tremendous continue the a as value our creating we own touchless

are navigating Let how share through this turn to pandemic. we now me successfully slide X, and

with operations. management crisis remain corporate been teams had proactive our disruption continuity and minimal regional of in thanks people local, the still dedication Our And and active zero-harm to to plans our our mentality. are effect. We've we've business

digital finding new do ways We are business online. to investing and in capabilities

create I'll smart enhance Our to the to pass significant more their new unlocking investments are our to packaging detail. in and our in opportunities experiences enabling by consumer supply chain efficiencies. review call results growth equity, printing now increase Jim brand digital customers and

Jim Sullivan

Thank you Ted.

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

volume effect Americas. Slide to here from purposes, regions Air see trends our structure be constant was recent in America reporting and X%. increased was in quarter growth, by delivered Pacific was sales sales into exceeded volumes of X% January. protective. in due $X.X This were million, organic results, into in segment X% volume into all and most North year-end index totaled with America billion, last growth XXXX sales we you our delivering first most and dollar up up pricing In in region, year overall, XX% pricing as new one you volume On fourth and X%. can sales and Asia dollars. reported X% which our see regional Protective organizational X% EMEA quarterly growth Starting our for South the America quarter, went region. Similar will growth dollar Net largely Sealed one XXXX X, XX, quarter. the Constant and the approximately across the by growth accelerated of driven that align up changes consolidating volume and and will constant $XX South full by up slide up outlook US dollar results. X% to On X%. we

also to formats and outweighed APAC. and America due up in consolidated softness retail offset we portfolios and growth By and North As volume for XX, growth adjusted volumes volumes expected, bridges year-over-year America in and and by up COVID-related couple where present single-digit modest This volume EBITDA our in regions quarters were declines solid food region, of in e-commerce America, demand. declines. saw fulfillment to APAC On was volume South delivered South a APAC and sales restrictions full strength North due were we our year. in quarter fourth strength and Slide low growth EMEA after retail North equipment. growth food and food Protective X%. and the in Food America in service in all percent industrial across of America

quarter mentioned, top to contributing in line. with As million X%, were the the up sales volume $XX

last X% in impacted American $XXX EBITDA full down $XX year, million $XXX sales contribution mostly X% the acquisitions million about to from negatively million Latin $XX Packaging closed to Fourth XXXX XXXX. quarter For million, compared $XXX XX.X%. XX including that $X Systems Currency growth currencies or to year-over-year by margin increased declines points million euro. X%, due translation which and and million the from or of with in was sales were Automated adjusted basis August up year volume of in

adjusted $XX EBITDA increasing XX.X%. to XXXX points adjusted compared of year, X% or Higher the margin full the to to quarter. in For $XX with volume contributed EBITDA basis million billion $X.XXX fourth million increased XXX

For the in and $XX year, mix $XXX in SEE Reinvent volume $XX quarter due benefits had reporting segments. adjusted impact unfavorable million EBITDA on both negative to million product a in totaled the input on costs. XXXX. was costs year. quarter We've positive In spread impact to $X price/cost due million higher and had throughout as unfavorable million the a anticipated, spread price/cost the operating

the work and inflation other to non-raw full full to EBITDA. and of For SEE $XX the offset million impacts and environment. quarter by We travel driven These million Half costs by $XX was COVID-XX $XX Reinvent of lower million adjusted material million spending contributed related cost year. year-over-year spending spread about remote mostly for year. price/cost quarter labor the actions. in fourth incurred favorability of Operating in year, the the $XX this included for were with incremental million the $X

to addition, fourth benefits the the in quarter in fourth the in productivity quarter $X.XX quarter XXXX. the was million and In million Adjusted year. SEE $X.XX. $XX for compared totaled This EPS Reinvent of $XXX

This The For XXXX the rate an in EPS were new in tax from US was GILTI impacted XX% was XXXX. XX.X% rate the year's over down $X.XX, in by adjusted XX% XXXX. issued which quarter. the was adjusted favorably year, third regulations, tax full lower of increase

Turning to slide XX.

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

revenue driving commercial work providing and we for solid Reinvent is markets Our in a serve. the growth robust stream platform

million $XXX in order now equipment roughly benefits look to year-over-year automated Reinvent was As million benefits seeing we million the to from with XX% benefits of capturing million SEE were expect EBITDA. $XX Ted $XX Reinvent remaining XXXX, XXXX in of strong restructuring estimated in SEE of and originally in cash operating be to $XXX are restructuring opportunities business growth SEE when approximately SEE than million XXXX. be $XXX realized total forward expected improvement $XXX to from XXXX million with targeted. Reinvent cost those now flow-through an In our we is overall higher approximately less now late million XXXX system. originally which additional transitions phase as expected mentioned, are pipeline expected. XXXX the in since $XX taken $XX realized Reinvent with In payments adjusted Cash Reinvent XXXX. SEE million, is than we The transformation to company's what launched associated actions mentioned, a as we continuous

our Turning X% In the XX, performance was in to with increased starting with and globe, food. reduce X% the about meat in fourth food in $X.X guidance. customers X% $XXX just their enhance the of dependency were on plants. to Net basis currently to to are improve XX% food segment the results year Across aged quarter a slide in line upgrading constant processing year. sales on sales up safety Equipment, efficiency, net billion. dollar parts labor which our the were dollars employee and over constant up the for assets and segment quarter, service This modestly million. represent for sales,

to in multiple and Asia types We particularly the Eastern the meaningful of Europe were in sales domestic are food in support capacity down seeing the growth, production X% are countries materials, exports proteins. South market approximately increasing comprise Cryovac for of of America remainder which quarter. and where segment expansions

food below While continued offset which the basis year. in in in pouches. was the food still XX% the quarter. applications, was in of year points declines EBITDA trend retail it fourth largely was compared for the in improved Growth just and barrier quarter XXX essentially over million flat bags $XXX by third of accounted from prior Adjusted levels sales to last quarter

million EBITDA with to XXX million year, full the XX.X%. to adjusted $XX For basis up increased $XXX margins points

time remaining to and performance and The spread. was offset derived performance segment. translation. price/cost North America double-digit increases see X% trends accelerated growth XX, X% to and in in and the for sales dollars, to quarter, On quarter. productivity $X.X year APAC. to net our quarter This currency industrial attributable and by and Keep in the quarter and our XX% SEE was delivering mind, the respectively. protective unfavorable approximately we've XX% in $XXX of X% we or the from earnings Reinvent our Adjusted highlight encouraging end protective driven million In growth. from also partially increased America billion favorable constant full EMEA In was mix the Our XXXX guidance the APAC for exceeded volume favorable million from slide was sales in $X largely increased fulfillment. benefits North product volume protective e-commerce This X% is turned first call. It of both by million coming in fourth year. in $XXX trends segment's volume e-commerce the both X% are XX% fulfillment. and to provided on third and results full positive in markets industrials EBITDA

million up contribution XX.X%. XX%. For of margin In year year to points full offset to EBITDA product by from attributable Packaging XXX and partially basis SEE Systems $XXX was $XX adjusted benefits unfavorable XXXX, acquisition was performance up mix. or full the was million the Reinvent Automated Protective's

source pandemic-related relatively higher SEE adjusted Trade $XX working lower previously due last and year-over-year provided Now and XXXX. in million capital lower payments flow approximately flow restructuring consistent was guidance project XXXX, improvement we delays. million million The let's of mainly with $XXX impact of in XX. CapEx XXXX generated cash to $XXX the at on our settlement EBITDA, driven the year, cash by turn to cash a million. compared of slide free XXXX In $XXX of significant free associated Novipax was and to Reinvent

compared capital, trade the was includes Our than improvement and for days improved to an approximately payments, working which advance XXXX. outstanding. days anticipated cycle was better This attributable to largely conversion sales this in two

we allocation basis. is Slide our net billion business. with maturities growth debt XX%. financial We very Our our is at ended our We the debt leverage adjusted of on for XXXX, profile. year EBITDA strong of weighted cost leverage, until highlights, packaging of X.Xx liquidity adjusted of a XXXX maturity ended in August slide balance XXXX. sheet $X.X down flow outlined With flexibility liquidity debt On net have strategy. support an strong was which the the of EBITDA to X.Xx ROIC XX, and at This free we cash above end no the capital. and to XX% well to average good and capital from a top at quartile year industry with approximately the XX

to a sheet continued take attractive continue maintain capital. to balance disciplined driving will returns a We while on approach invested strong

and investing innovation organic CapEx We in automation, sustainability. is we're focused and capacity digital. technologies. with technologies of and focused efforts digital SEE on early-stage in to initiatives Sealed breakthrough, XX% ventures currently our our strategy are innovation across processes, includes These complement will will growth disruptive products internal support help growth including Approximately selective minority accelerate our accelerating investments Air. on investments automation and production and

platform. million example, early as $XX quarter, advanced EBITDA we the in gain from start-up quarter. a For technology. in a with investment the our and increased Pharmapacks, similar an amount industry-leading recorded e-commerce investment invested excluded a treated We on this million Plastic quarter. in This company fourth leading fourth special to in we a gain Energy $X XXXX, the enablement in And adjusted item was recycling in

half second dividend $XXX we in in ratio repurchases cost And dividends million. quarter, paid with share we a million a acquired XXXX XXX,XXX cash of at of returns, of XX%. shares of starting the in $XX reinitiated third XXXX shareholder the Regarding which payout represented

it's outlook have over you provide Chris to to our great Chris, on XXXX. Welcome Let to now board. the for me call turn

Chris Stephens

to time the the an of team and virtually visit. to of be safe world Ted the January, happy join It's people and more spent our early and Since time, around to team There short great joining of I my expectations. and working see deal to and time Air success had here. Sealed teams the have I exceed game XXX-day Jim. met plan is results. exciting continue leaders in a many Thanks and a process drive on team and with Air people commitment have tour in passion with way. focused more my to I'm a and to by and to in to meet But execute the customer learn places our the facilities Sealed many few could you opportunity to executing

protected. So, let's increase to dollar turn or to increase driven X.X% X.X%, slide to to billion. outlook. volume to reported constant anticipate as our XXXX On X.X% net We sales in are food to a sales and to XX net billion $X.X both price by and expected X.X% review $X.X favorable basis,

We are food and to Automated to dollar deliver X%. deliver in expect growth and channel remain strong. protein sustainable to to to exports X% the food XXXX. expected we constant and protected In X% drive and to expect growth retail in equipment food, X% protected solutions

gradually We year. growth also expect in the to as continued and industrial fulfillment and food the service end industry markets we progress through improve. expect to the we protective, In e-commerce recover

sales a modest is XXXX $X.X expected billion. mainly EBITDA XXXX. Adjusted this being EBITDA approximately currency We due are would margin adjusted impacted adjusted in compared expect At EBITDA the increase billion favorable in of to the the to $X.XX be X%, Zealand Australian Margins material and North mind euro with dollars. New and and costs, on imply actions to help to translation COVID-related and increases higher into in America by costs this turn Also expected continued our in favorable that expenses. QX effect a price freight we keep lag formulas food midyear. and market typically six-month to higher raw are initiated are To quarter. in more going input and alleviate midpoint,

We EPS $X.XX. expect adjusted to $X.XX be to

of formulas, second half EPS a be impact expect XX% driven realized split timing XX% current to in half, of split first first Given half. second XXXX adjusted XXXX, we costs which pricing many actions XX% and we approximately the half the was versus of XX% by higher what material

shares release benefited average due outstanding adjusted million of XXX adjusted rate tax rate of tax valuation to reserve in to XX% rate an XXXX. a The approximately that the higher assumes and outlook primarily the Our is XX%. absence

The we million. employee For expect associated of million. free largely approximately payments flow free XXXX year-over-year expenditures million is in Reinvent sales cash of working anticipated $XXX cash $XXX strong This bonus X% $XX higher generate of $XXX trade to decline attributable payments from is capital given XXXX. the capital to performance higher restructuring in and in sales to million SEE flow, and approximately net growth or

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

Ted Doheny

Chris. Thanks,

I open Reinvent purpose turning we questions, wanted to slide Before up with reiterate our XPs XX, to of We for a call start statement. the SEE.

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

performance to continues improve. Our

We're decision-making We keeping operating by fast SEE are way strengthening enabling while harm's culture. of business. out people our a One under

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

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

operational operating focused strategic Sustainability flawless is SEE quality, and service that our productivity growth. are are improvement profitable fueling One customer enhancements on customer imperatives, that growth. are and as and engine our purpose driving as embedded creating SEE Our references. is well our ESG Reinvent world-class processes excellence yield in

leadership. can centers, in innovation We our and and report, and we'll initiatives our sustainability our for in and a results shortly. employees exceeded and remotely tremendous dedication releasing a find of that leadership tenure. shared on of We contributed delivered incredible He's to We field want goal team recently challenging and sustainability joined provided Sealed that, an I to our his the along very for our and continuity. appreciative environment. the support so on unpredictable most questions. and at commitment the our like working one Q&A. Sullivan up to want XXXX end all and for value business amount retire personally and Jim's plants, open Jim colleagues thank Our throughout March with is XXXX. new Operator, inclusion. time his we'd I'm our in Jim nearly to now social at critical out sustainability their planning the here his website, to of Jim exceptional in beyond for diversity Air including thank includes recent our I'll I XXXX goals in equity call which at climate, environmental contributions. pledge of begin every progress you be With XXXX

Operator

first line [Operator comes of Panjabi Ghansham from Instructions] Our from Baird. the question

Your line is now open.

Ghansham Panjabi

Hey, guys good morning. Jim, you will your be missed. role. And new Chris, congrats on

Jim Sullivan

Thank you.

Chris Stephens

Thanks.

Lori Chaitman

Ghansham.

Ghansham Panjabi

pre-COVID to first channel that Yeah. current Air guess fresher question food? exposure Sealed course There's balance segment, into relative there here platform packaged towards in pandemic. the better versus consumption how that opportunity And the I volume guess play theorization levels. dynamic? has off if is channel at the through baseline will maybe is, elevated be will the an against a weighting automation I your for backdrop just grocery growth so to higher the food on been of in food the some that

Ted Doheny

Ghansham. Hi, Sure.

Ghansham Panjabi

morning. Good

Ted Doheny

Yeah, happening getting there. if we to us know all reproduces where the basically on restaurants tying service dramatically. that is into at what's and recap, we look the that's just and as we But food and format, the hit bags with food retail the side changing are with

at – on that is see our you And so we're look look movie we Slide seeing X, slide we shift. reel if what

shift That's to question. the happening retail quickly formats very, the your protective. We side have we the about we e-commerce see that actually in talk on very right where

some next store, already all grocery people going. packers see a to on go the those you where and we're we you. you And is to of e-groceries customers If working with packing it see start-ups

how the Darfresh is to to pack actually that but packaging and what by cobots Bringing robots. going we pick Darfresh to our line, be that's On question. Tray, going your package doing format into that's and now a that So do actually

as sustainability. those quite see drive to even fresh we and moving going trends into to still Also secular food is go that automation, harder formats of see market the stores. in So Those food the format actually we moving safety we on grocery aggressively.

with only PVdC materials Cryovac barrier our the on with So right our that weight. out. want barrier now, are we're in investment leading bag not working with looking We're They Energy. lighter recyclability new Plastic

new because Plastic plants actually We we're material use we've coming Tesco. recycling don't an chemical want that Energy So that. the and going designs chlorine-free had announcement in to already with

And that. we're so way in leading the

well fourth quarter these still that In shift formats So we as speak, an we the the there's think dealing next and we're is definitely year with pandemic new opportunity. we're going for. think positioned so happening we but

that part our of other and The the and we as protein pouches. talk side about box bag

We seeing lot are that's go – we are slowed business. definitely to and But with the QSRs. opportunity that seeing liquids we're a fluids the where of actually into

seeing positioned We these just opportunity. that Wall pandemic our the heartening think actually Journal we in have of that So will think got we're our excited. with get be in some to The lot of new headwinds markets today, through for Street that it's well food they business pandemic saying side with a We've forever. format in this the of but us we think

positioned we're normal portfolio to for XXXX planning new think take that and that's next of the beyond. well for again, So worst once best. is our in But Operator, we advantage question? coming the hoping

Operator

you. Thank

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

open. now is line Your

Jeff Zekauskas

your Thanks EBITDA of which you would and which I million you XX XXXX. very was for benefits your synergy program, get get XX guidance EBITDA much. that to $XX in would XX, puzzled XXXX XX was the your about from thought midpoint is in your you cost guidance and that

from that or of no in meaning there's XXXX, sales in benefit higher? growth the is why real the So guidance guidance the isn't the

Jim Sullivan

is Sullivan. Jim Jeff, Hi, this

within actions the about $XXX year. in new last those year talking coming million know we talked productivity to down call When name. talk we this we're delivered I you're Let me million. about benefits, to how we factories. clarify. we're And about our we're And $XX Reinvent the that driving

drive to inflation. at those continue than our benefits to is a higher plan level Our

If you look the enterprise, at $XX our million. wage inflation across it's roughly

seeing what that. benefits Reinvent those offsets of you're So part kind of that is

$XX full inflation look benefits if the and million. $XX you about the flow-through, the So the not it's at million

And And will culture, Air. just continuous that said we that, Sealed of inflation would if now restructuring Air three-year fighter the in very think would the continue for add be to having years. the that Sealed value thought encouraged not above Now we be here been an transition I by kind be par. I've high-performance after culture It improvement X.X around I inflation. have you we on

we're taken is – got pipeline very Hopefully, that We've XXXX. that $XX saying well Reinvent in XX% already flow-through next is for beat year. strong. I from of think positioned. We're we million we've The actions that.

positioned continue So, deliver beyond. Hopefully, to XXXX it more to that little allow And math. a clarify and drive that. of bit us in that the helps to actions we're add well we'll to will

Operator

you. Thank

of Our comes question from line George of Bank next from the Staphos America.

now open. is line Your

George Staphos

everyone. morning. if Thanks your into question translating Jim, is a for operating and congratulations could the guess I growth Good there. around that details. you on and leverage the Hi Chris capital target progress. congratulations, return us and all my on volume and target give

Tray, return target, in factor talk of sustainability-driven of working you're So, how On leverage you And plus? Ted, now two the of products if couple platforms of What would ROI Thank in turn, mentioning was in over expecting you XX% and have you next ROIC the And if a how target What on. to like to that target, of key three on XX%. four terms and expect terms Ghansham I you in into in kind -- what you. Darfresh XX% time we of does some of margin XXXX? it terms operating products. a like should more the some which you're those capital about, discussion have to calculated say, growth the kind e-commerce that you're is we about could it. of for deck you talked growth the these ago, plus think, in products years last you in your years? the

Ted Doheny

A George. but question, very in Thanks, lot that thoughtful.

operating off and we that Jeff's that the unpack about to try on it of I'll model because, financials ties Jim slide So through the went question X. actually talked it build into

fourth year we're quarter we've quarter, at was than state but very leverage leverage, into operating XX% actually So, what going of the where the the driving, the fourth below less and what target happened we're the of for in XX%. been in operating looking current

going well had we've also market, go we've our down. then parts of the huge with but this spikes, had portfolio in So, portfolio what's on tumultuous

top leverage, at look lines. if three at a operating So now, our look product we take

with look flat if affected down. going with food, So, to on Bags all going at down. what's What's are by bags? on we those restaurants shut bags being is

the products. Our deleverage about? actually then you are lot pricing the through But Darfresh progress Great at we net-net look on. pandemic. play in a quarter say you Did know Tray. There's highest-margin quarter you fourth half XX% that going below of So leverage got input we to the by Great in midpoint, On look portfolio. product, talked we've first progress XXXX, sustainable the what through if we things of costs. to that get if on some ahead huh It's with that this and in at so at some we on that there's the rising with that the is you a had then the because that get in XX%.

we the side. dependent our look with Yes rebound protective? seeing can on our Instapak. how on now we I've grow industrial -- Wow growth many been that and we we're line three can. portfolio. will. largest Well, dealing the product you protective that years Yes in with So, here that It's

heavy. So deleveraging really

these So is we with that have ups the delevering. of both major down on business all and sides

where that's want business it for So gone. good? taking be was X%, where what wanted the is -- to where So, we you we we're and this is to the engine XX% year give

out that's go what Though the go and put And with way even stable pandemic, in some it left very to up to We're going going three-year do. plan. some down. we markets. we're a So

that second So net-net, take we can Well, Hey at to that we that part leverage. XX% XX%. we is, to think we leverage market this pretty -- number. four. your And average, Hey five. but in We you if we can take think automation could to restructuring beat to came of that that stable where then We you you we're we about you actually question, leveraged with the to two taking of thought in, excitement you to our way sustainability, to at look three-year also Ted, your XX%, last the that asked you when three and business. our over assessment Well, had well. innovations serve. did did we

one base now a question we got model when the higher guardrails And then started. than with we where that's on business. you next to was And points greater a of are off we ROIC. this is building we're sign basis going your XXX shared XX%, So almost of the change on there is to going. to we the here think day your but We part last

what to believe And are get We of this you measure. part I measure And the going mantra, is you leverage. it.

value this we're put our the that's look leverage we put put operating taking we capital. return there. there. growth creation driving. we day ROIC want on we're investment and in where measure. place This And But last over generate it. driving all taking know where of ROIC? one this Through We these far of in your question, high-powered can see cost and investments, we at take our moved XX. driving It's of the engine and get market you capital going all on cost you part put through. you now you that's That's capital. up. to about also your we're value. way investors ROIC So has to going that assets our Our the what that XX our engine in tumultuous But not of it's this to to are assets to on is be way But on what George It's mentioned engine above a that where

engine we despite X, in where get half in confident the we're hard really slide quite the It's feel on And feel we despite going. market place. we're why dealing markets know We first again to is with we're confident. we're this confident face. wanted that moving the that So The there to going investors tumultuous is and our we of XXXX.

Next question, sorry, operator?

Operator

you. Thank

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

open. is now line Your

Anthony Pettinari

Hi, good morning.

current some categories bit sharp inflation. things about are Can price relief there over non-resin that other with the course issue? some maybe actions resin initiatives guidance that about recover the cost inflation levels a talked resin year. or seeing if your freight we've you higher the And talk raws? to of at maybe initiatives the I'm in wondering, incremental little you're like or remaining costs. assumes you're inflation And taking And You there? basically seen then just you're any taking corrugated, Is an or that

Ted Doheny

I'll view you maybe if than basically But give can right. then detail a and Well, Anthony. Thanks It's exactly Sure. more give Jim you'd like. more you you're resin. just

been been As resin. -- we've about we've here, talking I've since

with an does resin. excellent specialty we of part focus Reinvent really resins. team the on Our multiple is suppliers to And our and job have different

how the market and think happened But secret. will beat that. industry what has significantly the with we has we what up with So can gone It resins there's doing. chemical we do is no

formulas and So the price of of your -- fourth ahead are in we've with quarter. second the price out part We been especially that also the the protective. on with went But coming.

But have we six-month that believe there. of We ahead lag it. we're

our talk leader the with to about price. don't We can lead We in price. market. are customers the We

and customers this in embedded actually we are solve on how with We together. can actually bringing problem automation our

highlight It's you're up the right. exactly input We're freight want just it significantly the But beyond. costs. and other seeing of that So to question, that. costs your I part gone second have

with it. using is look and not So with automation. our the input cost price the rising the look at that we at managing issue to side. other have we're But piece portfolio to is that different we're product But up really maybe customers we're Again sustainability giving ahead that. this work stay of

you But price get well on going material Is to continuously by lead. it as to It's to this. through we're fourth Right on on a that, automation. of We're costs. ahead be quarter And get the content. recycled way input the don't half going exactly you're and externally on So to to driving looking as right Absolutely. to internally first side our we're automation we also costs at or… going change we're our add believe more think I we're be challenging? there now if market It's know want going XXXX, tough Jim though. right. anything tough

Jim Sullivan

I the curve terms think increasing piece was year, of inputs, other that the current the expecting half environment, what good. relief? question was, the on we As cost or No we are XXXX across the back the are of everyone expecting knows I across in mean, year. was of the

that even high the the spread, We're certainly business, the in Ted And planning a plan well. So environment level initiating price they to for price/cost as we're the the comfortable, talked at we we this manage spread about. are that now. very actions very we're materials, the resins be can

raw Many America our ability is the low-end of course the price. And on big of of a in side. certainly can timing guidance, much the input how of price is range Over our in we materials coming pricing food pricing place? of on quickly -- get the exceeding in. you that our could the is cost part our see, And North timing. the to How of formula-based

to the it. of materials. So on, But mechanisms final with then, piece have other deal we away. we was And question get right that won't certainly the raw

and our of cost. our in half about about, are representing think input polyethylene, buy resins resin XX% resin, So about overall of total total

other in only half low-single inflating digits. is The

So input is again, think the you said, price I and the side side well. Ted takeaway the we're what very managing both

Anthony Pettinari

Perfect.

Ted Doheny

I the Chris for was waiting of say, part. to Jim of of year. the care he's going to Operator, half the take hard part the next second easy has question.

Operator

you. Thank

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

open. Your line is now

Phil Ng

working But it that Jim a for looking forward you all, more and bit. Really Chris. price/cost question in all with of thanks, Hey, little to just a I digging Well, little first into the appreciate … help. digging

Chris Stephens

Phil. Thanks,

Phil Ng

have lot. this let's And How tackling pricing? like fourth some you on just cost? in well. in little pretty managing next relative, a take in more you versus into price/cost it be question resin, say, How of provide, you are it terms that Any would a …digging like material it headwind price seen quarters? seems quarter? competitors asked you're Anthony similar lastly, of could that the about handholding few approach your Thanks between, a

Jim Sullivan

at is Yeah, doing first. So what think materials. question last the whole the I and price to So industry recover can it looking

Right some spread year, anyone business. a And our of now good half said said, being he the continue volumes help And we isn't that the the there year the what and be are year when mitigate feel half the As doing will doing the, pricing to got first the of see. then, that. continue full for sellers expect the us the our guidance upside than differentiate we of just why very of did we're as about get expect million. it pass-through on kind resin. the that, Phil, to will we million focused ourselves. else raw value we in get fourth we spread $X to pressures year. can We is, to as other thing EPS little anything earlier. And first We're in half half, about We're the robust. Chris We doing. And was I as Reinvent a would challenged continue about is that you I think into about in Ted price/cost price/cost not noted material thinking the say which in that way, to XX% we more $XX back some quarter. above challenged of negative that really drive going ability inflation. coming drive Year-over-year be cadence And XX% to adjusted talked about would bit We're have first only we little talked price. the than more of spread bit there's

Ted Doheny

want just the I I spent make model how we've handle one to lot thing, sure that customers. want price we with of changing Phil, And with add Yeah. a time about, because to

so we going customers. are And our with directly

one together protective side, they're largest customers can make because customers right listening increases on factories over And we just our sending it, the not conversation this? one we How do last can want to our We handle there are what was the week. personally them. the sure, to just now. transom. I I of with together? our of seeing We're price are work at

if with together them. to are than going handle so And the do our competitors. this portfolio, I move we very We even think different we're to have

unique better than to we side, ever very going of situation we're in much on respond, resins, way well with on ahead really out done before. And a the portfolio I that we've come have other pricing the can think We competition. this a

Okay, Operator. next question

Operator

you. Thank

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

Your line is now open.

Adam Josephson

on of in about Thanks. Good a the organizational morning, years, the obviously, to everyone significant just the year. the Question to really growth end for looking congrats In two good seemingly on, saved a SEE sales you've $XXX million and organic last XXXX Reinvent shift of from period. XXXX costs.

been pandemic. Reinvent cost During amount But been which a a had there's know economy weak significant And even SEE. on saving you're nonetheless, organic have sales time flat. I your while before and global the via pandemic organic a sales you flat

focusing you. about shift of terms think may cost to dramatically. top pull it's hear a Thank your we'd will will about much that organizational how off So, all. required be accelerate at in that reductions, talking you you're I perhaps be to period? growth transition difficult more or line. not you to like wondering focusing there over how you And on I'm sales so think, on just restructuring major thoughts any But --

Ted Doheny

carefully good. it's wanted your listen Well, I to question. to

reinventing answer to on we're would the that be, we So grow how my business.

is change be difference to of So from a a you're market-driven right. We're business the portfolio where that this moving a business. cost, part restructuring product-driven exactly the going. the we're being side on But big

So portfolio shifted pivotal dramatically. year us. XXXX was a for That

trends we're that are put more there you we're believe on. industry a the post-pandemic. in more does we What in be So going the do effectively, that to How more Automation. that mean? safely, efficiently, what package that secular focused is to portfolio securely, pointing stuff

to across product, drive it have portfolio think we're and the more that's on. do can we our what So that across food region efficiently. But focused significantly we

to visibility innovate enough, in was fast by up I what So even of as us business, giving scientists packaging a and If R&D. have invested approval. market. time. we to XXXX can't growth word this develop been we lot, investments with organization time SEE with Jim stable we're secular we and We're is. organization, do doing to our part And it's it because the organization I'm the takes innovation the -- we're that part FDA move. our pivotal the ventures. trends. where move year our those mentioned, and we've It's can to the we're faster, to have And to use this a show it. that And exciting what to that's faster innovation us you rate It all way, on this And top of dealing of to getting think going a satisfy going move the portfolio move the team and to

unique. products testing. are Our We're

got innovation came things, testing faster. it center, you virtually. to we've If we're to we're But our move doing but now

is keys that So I believe we piece next the XXXX, mention, X% believe going got get in be I but that support of the to is it's that innovations I that's And final sustainable. definitely phase to faster to we're going one that to even to drive happening it will it. we're after. growth that the X% got

I'm less our now we Wrap on is, churn on at says of for a that and seeing the this facilities, now too tough use year. a that are looked Bubble the Bubble some the It's than XX% because we like of you you Bubble And we're dramatic the is in have innovations? where them. with the some solutions sustainable that team actually why The shift churn if So did growth on content. term We Wrap in our bringing Wrap internally, recycled portfolio demand. that's is, our

but So with content. recycled that's part of our Bubble redesigned fully it's Wrap portfolio,

excited quite at X% make I'm leverage it XX%. can to growth So over about we that that X% and

for time question. more have we operator, one So,

Operator

Thank you.

Our the Morgan from Stanley. next line Kumar question from of comes Neel

now line Your open. is

Neel Kumar

see been from industrials Thank performance that past the end are a XX% meaningfully there? e-commerce about Is or two term? to How clear driver from In mix, opportunity protective do mix versus exposure increase protective, the e-commerce sales longer thinking in the XX% in you. forward, of of going exposure to right exposure market quarters. segment e-commerce Great. you has you segment

Ted Doheny

the you and indeed. Laguna Neel, Neel, friend by to Jim your asked chat with about at did need I when a And friend recognize you my I CFOs fireside with way me changing the you, a shared Hi, Conference, with I have on in Yes. spot. is you

as Jim, to your me thank on an use on put again, like to I'd So there spot this when opportunity the you conference.

So talked go for we to in now, e-commerce it, portfolio But about. just if want too. food that is look right again, I we protective, say let's question. at e-commerce to in affecting your

fourth So the we that on on industrial saw negative I our We in the have slide. at growth going which automotive. industrial? piece movie had reel had. good. slight the quarter, highlighted look What's We as XX% example that the if here, you said, we've with is deleverage

We have seen automotive turn.

we positive. turn same We it levels, at haven't but see seen the did

and automation here's So what this mean of does actually is solution. an example tire a

roll because penalties We're going customers, which huge do? those with We're be what going the package way going tires get e-commerce to conveyor So the we are they go to working to off tires. systems. by

to we shrink going system But couple few do for So even tunnel. We're tunnel. dollars. put million to the in were more. of in to way, the designed a going the shrink We're thousand By a put a going it's tires full the hundred dollars. we

and it's those tires. they inside. off. going them to so we're shrink to paper don't we're them, to have so won't So they're they don't know they wrap the wrap who plastic going want and roll anybody to have way, to By We're going – going

going Xx, materials are through of at And so going the they're the flow the that to cost to be system.

as right into we So bringing that's that a industrial segment. solution now that speak we're automotive

back does leverage see boy up. nicely. So that we picking And that

the leverages of nicely. Just business like business side that's our bags our industrial quite

industrial cetera. e-commerce link So that's a et of with

on industrial seen pickup industrial market. you we're piece that's the is Also, We've beyond the kind a merging electronics the in the that So side. also of see protective that. the on on

with we're Autobag using Autobag to food. the package now system do we our actually As system,

slide, the on I'm about So way – portfolio. it's where protective our And the in. by automation versus the But of that is food personal. it's top it's coming in talking again,

there. We have up pet care

of pet that's that's all pickup had home side at is area that pet an that going But accessories getting right staying at our business going. Pet that pouch Autobag with in a you We're For care. stuff food, in home system. now. the through really that you're packaging

XXXX, was piece. after XXXX. you back. and going giving that It's coming But little industrial right XXXX, now just it a an wait So, color on a flavor. opportunity We're in in

Ted Doheny

board. Jim. So Chris, for safe I really our with that, And everyone healthy. again, to be to operator know, you thanks everyone. thank today. call that's excited I the want watching. hope on stays And and you'll have close I

everyone. you care. next thanks Take So, we'll And see quarter.

Operator

this conference and today's you Ladies call. participating. gentlemen, concludes Thank for

disconnect. may You now

Sealed Air (SEE) 9 Feb 212020 Q4 Earnings call transcript