SEE - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the Sealed Air Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participant lines are in listen-only mode. After the presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today’s conference may be recorded. like President the of now Lori over I’d Vice Chaitman, Investor Instructions] to conference hand to [Operator Relations.

Lori Chaitman

CFO. and Thank With you, Stephens, CEO; me everyone. our Chris today are and Ted Doheny, good morning, our

that Before we begin guide provided call, I help slide to discussion. we to presentation would a our have like our note

be periods Forward now IR statements are available In Looking addition dive outlook, earnings release Statements today’s SEE at Please future Automation. and and in on call presentation made to website webcast based is go We statements. during us. where our information that you in will or applies stating encourage our information forward to call. Ted our downloaded are presentation Statements slide to sealedair.com. this to review management’s can visit website predictions results and deep through from looking entitled solely which section our this These the a for on the outlook

may performance Form XX-K a listed updated recent on report future these number annual in as our our revised are quarterly of Many differ on XX-Q on and and factors which Additionally, can factors. most or of to U.S. Form find to current on you financial website and website. our on on do X-K, our We SEC’s not conform reports also the discussed Form that reports measures GAAP. due

will slide GAAP to the U.S. presentation, our measures non-U.S. U.S. the important our call Operator, today’s measures that financial find correspond to to Ted? in on use their turn find I GAAP throughout Ted. information referenced GAAP please to reconciliation over will release. these appendix will turn presentation. You Including of three. earnings we now you of the the results and

Ted Doheny

our solutions three, year-end Lori. slide And results, how vision and call. dive are three-year world show QX plan. driven Chris become a will earnings SEE a will and our digitally our you you we you, On class, quarter and getting discuss joining outlook year-end to be packaging thank our you introducing XXXX can and deep into our Automation I and sustainable Thank will fourth see done. automating it we we for of company, all

slide turn earnings, strong inflationary four. delivered sales and to XXXX, and COVID let’s supply overcoming In we dramatic Now challenges.

are results powerful culture, to a Operating testament Our our SEE people Engine. and

are like a to disrupt We empowered our acting markets times and us. class the exciting we world building a These ourselves. company digitally industry are serve, for startup

bold our our customers operations steps, are value We in for stakeholders. people, investing and taking create significant to

Operating $XXX were adjusted fourth You up performed see to how was XX% $X.X Net the million. SEE Engine quarter. in sales and our can up to XX% EBITDA billion

full the cash For we million. $XXX free flow of year, generated

strategic materials construction realignment, a and points. tax five, are we XXX additional As by and raising we our the part EBITDA of after proceeds portfolio of generated successfully for of the Operating of divestiture goals our basis for maker adjusted million. Model insulating growth Reflectix, sales completed $XX market slide SEE On

and of our expand Ventures, Under digital Our to market. recently SEE to Ventures, and and attractive our by accelerate are and across in innovations disruptive the our M&A investments, execution in disruptive led speed completed looking business printing. models markets, to into acquisition we a technologies FoxPak, pioneer above confidence higher SEE strategy, goals and markets are growth Through geographies. our market we

shifted in experienced Well, give fluids, our proteins Chris, In more to from a market turn solutions in portfolio will Automation, where markets. automated from and double year. a quarter the business on digits our and our up strong automation, slide digits fourth on e-commerce up will e-commerce our growth. this were parts which sustainability top In digital the Autobag on services, in the see and to in fulfillment demands Sales focusing quarter for customer-centric company, you transition sustainable and the automation and equipment, geographic XXXX, for towards can the you and logistics. we and powering illustrated six, materials-driven Let’s is and solutions. Autobag, focus double detail slide increased performance, and reflecting with on growth our I year, activities

You partnership experience. an an for UPS, Continental can packaging is tire slide Tires sorting Wrap creating well. This solution example enabling for significant see new with are we With and fully Tires Auto automated a this UPS. that enhanced creates as our customer of solution on and and business savings Continental our

a dive Automation. seven, you slide will take deep Turning on SEE we through to

billion to business our more Our plan than by Automation double $X is XXXX. to over

solutions with a savings solutions, those converting payback. starts into identifying our by for faster and savings model Our three-year than customers

Multiplier, flow base and as installed key our is growth. service to Solutions through Our materials the

We more are installed assets. digitally connecting than XXX,XXX

and at their Automation address we with Our margin deliver Solutions drive SEE we SEE quality. productivity, Solutions to them See solutions compelling and allow the increase resilient operations, as customers, making resonate the expansion needs right operational price costs and for customer dependency, as build our flawless for reduce labor best savings sustainable. Automation more reduce improvements are

Automation. to to equipment Automation production bookings The are how our our relentless growth business. and illustrates pursuit. in behind the match go you this faster our strength The of double our of giving service to years chart the left investing platforms, into shows to capacity ambition. recognize our trends next We transparency right three fastest are to customer in the our savings and we over are We growing the chart have we

customers facilities. less than in process most meat improvement in automates We with creating protein Auto change system, Load step a sustainable are central Automation Solutions. three-year payback, slide our the of eight, labor-intensive a SEE pillars a loading with bag. $X start challenges we million processes are the our competitive customer example This On of is an Solving meat-packing and automated showcasing driving savings providing ecosystem. tangible advantage, an inimitable See for operations. the the the our of

automated robots Auto systems We with while producing are integrating line speed, quality flawless and increase other to Vac Pack. Auto cobots, and

We high them and making effective. innovate performance an continue Cryovac more to recyclable materials, sustainable,

cannot, quality smarter. systems can and see intelligence control use for continuously vision machine Our learning an the certify and validate We to what quality. humans Mark state-of-the-art our process SEE makes artificial

advancements their the to capabilities leverage operations, enable and in customers connect we Our teams printing our Automation time, improve improve operations. point OpEx customer their for differentiation at digital Touchless key of digitally same is and will A how with our to internal consumers. See

what and are simplify of principle process, Our working measure. industry-leading in putting with people and automate, get waste, experts the then remove facilities the their way eliminate from practice harm’s to customers you you

means slide value we to nine, waves the the On of about what the SEE Automation for Multiplier. use talk Mark Solutions growth. Let’s illustrate the

with are a the an first We We changing start first with to order Automation materials being of our leading solutions model. Xx. the initial value from past equaling equipment

being lifecycle, along integration with and and takes the Xx well as parts represent services system, the with us such flow the over automation continue through digital times materials over and the their order. Xx, and the original opportunities of equipment performance paper graphics films, it high equipment We as value XX

to turn Let me XX. now slide

make of sustainability Our our strategies part an business. integral to

waste reached our high solutions performance are of and of on renewable materials more eliminate continue It in simplify and/or make design and where for Touchless solutions. to measure sustainability pathway create based. aggressively to our we with approximately those starts and content approximately work mind, of from We pellet already fiber We every our XX% pledge our progress our XXXX for solutions make designed affordable we recycled XX% Approximately process, sustainability with significant the to touches. to recyclability operations, with a to recyclability XX% in actively and touchpoint circularity. bag, millions

We in happen. it investing Automation make to are and robotics

customers leveraging same we linking use internally. processes are productivity We operations own to our Automation the and our

is Our efforts. Automation digital and critical to initiative sustainability our

Next to more Mark plan technology digital detail results loop to to our review how brands build and now Chris I in the the close quarter, detail. feature we on will connect the and economy. our SEE proprietary customers to call consumers printing circular pass and in

Chris Stephens

morning, you, Ted, good Thank and everyone.

favorable and protective. APAC slide net food were were up growth up versus up in Let’s Growth XX with $X.X in In last sales XX% and In sales EMEA, by start up sales were review was trends digits, net sales constant EMEA up see region. were In XX% up by to in food protective. growth of by APAC and XX%, $X.X volume up both XXXX, sales sales were QX, XX% year. with In growth were by year-end region. billion. up can net growth and with XXXX were the on double which price and in quarterly to X%, overall organic dollars, you was pricing XX% by with our up and In growth was XX%, XX%, The dollars, both EMEA segment respectively, up segment XX%, XX% while X% X% slide and constant net Americas In price with Americas and X%. and growth XX% volume versus and up X% XX Americas XX% XX%. QX, and billion. favorable year. On to volumes net led last

accelerating with X%, industrial quarter, comps Let’s trends. APAC EMEA X% second vines up face and up QX in up the around on X%, flattened We food and up with half materials, the continued and volume and remained of food X%, In Automation were and XXXX second with in were up on growth of surged Americas to EMEA. APAC shutdowns, all start first led XXXX. X%. Protective service with X%. growth XXXX the in in volumes the across in EMEA experienced half We Protective retail recover sales volume heels world, and of trends Americas food XXXX demand XX% regions, fulfillment higher half, tougher in the the performance declined focus and and by in volume growth particularly growth, as strong.

QX up demand response inflationary in sales However, accelerated we price QX XXXX, protective at Starting fulfillment and at were automation with to actions. was favorable XX%. in and XX% pressures, pricing XX%, favorable. food was industrial

in year nearly result and $XXX of pricing was of price, million For actions of which timing in as the XXXX, pass-throughs. a realized full half formula than we more realized QX,

Given price X% offering, environment, with and and ongoing care. XX%. between and increases average inflationary will on additional region be will product announcing will we increases vary based These

volume savings. performance. consolidated On on productivity and present sales, million, QX EBITDA operational XX, adjusted with XX.X%, compared will up EBITDA We increased let to and contributed basis XXX full slide $XXX discussed XX% XX points. XXXX year, we points. them year $X.XXX work Having with year our of walk. adjusted with our million year $XX already compared margins our adjusted billion, XX.X% volume X% EBITDA to customers up drive Higher was basis last adjusted adjusted and adjusted me of EBITDA. million sales to to up directly up and QX EBITDA of of demand to Full and meet EBITDA. margins comment QX help Full $XXX contributed

XXXX, compares per $X.XX, QX and to price to in in QX $XX ago, spread contributing QX, Adjusted For include to QX Operating we QX in XXXX, quarter, million. of diluted the benefits year, in time same inflation in non-raw $XX was favorable increase year $XX earnings full in $X.XX million of the price in in which $XX compared unfavorable the delivered up cost XXXX million for adjusted since from $X.XX, spread labor period earnings. was first is XX%. to totaled in material cost $X.XX cost SEE $XX $XX In XXXX. and EPS XXXX Reinvent $XX about of costs million which and XXXX, million the million and million million was share an other compared a XXXX. $XX

XXXX. tax adjusted XX%, in rate Our to was XX.X% compared

XXXX or per our $XX million authorized under diluted were XXXX, $XXX to in $XXX weighted share. year shares our million buyer for program. were stock million, $XXX throughout year, given active shares purchasing end XXX At average Our of repurchase we million, had the outstanding remaining we compared an million X.X approximately

is million. with to XX, half XXXX, of the achieved program. are pricing coupled cumulative and gains the complete XXXX, XXXX, Reinvent of XXXX. that with Cash SEE headwinds update to productivity $XXX expected million said, to combination SEE $XXX is payments supply bringing productivity Reinvent to are on which program Reinvent in is approximately We remaining of designed in to in $XX million from one-third benefits Turning two-thirds costs slide here initiatives, were inflationary $XX $XX program, this of the volume of anticipate from We pressures Operating improvements. of associated SEE XXXX growth, drive Engine, benefits $XX an coming $XX our million Engine we continuous SEE million with With continue. mitigate million of XXXX. Reinvent in SEE start carryover SEE. productivity which gains Operating is provide to since which in The expected in disruptions million and associated cash these we To anticipate the payments our

results supply Turning led quarter by and basis to strong XX.X%, organic on we in of the our will $XXX and protective growth offset basis food margins face QX segment XX, versus XX% was year. in higher up in last highlight with comments Adjusted million to growth compared down XX million Adjusted materials. QX, starting of constant sales margins XX.X%, results. Volume sales was productivity volumes, million up we at on pricing X% million. as points, XX% of managed net with Automation $XXX comps slide of to slide On in EBITDA in focus results. with points costs. basis and segment an volume double-digit $XXX XX, Net food, in QX growth $XXX at X%, through increased gains In to disruptions. tougher my increase increased on XX% last were elevated year, up XX EBITDA dollars, QX, XX%

In We Now driven last maintain outline to sheet, to higher relative and XXXX, cash offset focused balance let’s to capital strong same and XX. needs and capital flow slide returns on flow the profitable incremental value. turn restructuring free by were period supporting free of generated million year, driving slide creating while and On our on attractive strong CapEx $XXX on economic support XX, investments cash payments interest a working growth invested capital strategy, lower initiatives. allocation growth. we purpose we earnings

We CapEx on our are sustainability. digital Automation, focusing Touchless and

We and align equipment are growth. and support demand with expanding our customer continued to capacity

in smart growth in see and packaging printing markets to attractive expand investing opportunities presence are digital geographies. We and and our

are We growth our strategy. with portfolio managing alignment with discipline the our to ensure

review to Let’s turn slide to outlook. XX our XXXX

sales we an $X net X%. to to estimate billion, $X.X of billion For X% increase

XX%. which is assumes EBITDA forecast growth an and in of XX%, of organic the approximately to at in Our the to XX% We to anticipate X% approximately $X.X is X% $X.XX price. approximately adjusted volume to EBITDA billion range to billion. and EBITDA X% implies of expected X% be in midpoint grow Adjusted margin

be $XXX This expense for amortization of the approximately of and outstanding. $X.XX million $XXX X we range of million approximately to XXX flow effective adjusted interest $XXX EPS, and to shares expected million $XXX tax be cash free expect adjusted approximately and to And in XX%, the net range rate For lastly, depreciation to outlook of $X.XX. million is assumes of in million. approximately our

million CapEx capacity increasing increase growth to to support to are $XXX We $XXX to initiatives. million

pay $XX versus R&D years the from $XXX to For XXXX, allowance. Reflectix million million related expenses prior immediate deducted to to tax five on reflecting earnings and to requiring the the gain expensing provision, to we cash over sale payments, approximately be growth, around $XX expected anticipate tax million payments of R&D $XXX impact in million

previously as revised of cash refund payments XXXX tax by our U.S. approximately regulations. retroactive associated million Additionally, with $XX reduced disclosed, application GILTI the the were

engine growth We and XXXX our investments sales, driving Operating increasing This beyond To reflected cash cash around executing flow. we on and earnings drive R&D are in fuel and productivity aligning for innovation our is our generation, for growth our the and are our strategy and SEE accelerated and automation. outlook XXXX, business CapEx Model.

for on Ted? that, generating the balance pass attractive invested closing to a call Ted me and let back capital. have remarks. we on to We sheet continue focus With will strong returns now

Ted Doheny

Chris. Thanks,

how Statement. This vision is reality. where Let’s XX, our turn we are making a have our to Purpose we slide

and Engine Operating is momentum. SEE Our performing gaining

invest our to continue four SEE. will Reinvent We Ps in of

Next quarter a we will on provide deep digital. dive

Q&A better creating like begin up long-term than and session. the call it. are world find will stakeholders we for With to now questions. value our open would that, We making I we for the our Operator,

Operator

[Operator from with question Anthony Instructions] comes Our Pettinari Citi. first

Bryan Brokmeier

Brokmeier and some And and price freight detail rising you the actually guidance for to in in in XXXX? Hi. inflation? XXXX cost as wage Bryan cost your Anthony. This you Can again expect positive assumptions do sitting provide be such XQ is included on throughout

Chris Stephens

for This question. Thanks your Bryan. is Sure, Chris.

So, are that talked pressures inflationary remarks, my the we seeing. opening just we about

of in be just now spread will to year. think, have the I favorable positive to our comment we terms price cost into the game, on heading

on $XXX expect when just material to is material is you non-material will, the take We action the the million the bring you guidance in if what continue relative And that side inflationary roughly million. all seeing up pressures $XXX the we But But everything side, inflationary non-material to on that is are level, items, is through clearly us price. being of causing related beyond first half cost side it assumption. year. else, a the the from to about our

continue. are we the our productivity positive, So commitments. we that turning we that our deliver through to feel see And price the the organization that on just pricing, cost spread we But year. that managing expect across got managing not at comment also to be I $XXX we expect million least to able only but will about again, actions are good this we to

Ted Doheny

Okay.

question. Next

Operator

next comes William with from Blair. Larry Maria Our question De

Larry De Maria

everybody. morning, Good Thanks. Hey.

Ted Doheny

Larry. Good morning. Hi,

Larry De Maria

Ted -- guys. hi,

Automation Automation end how on to Automation, your of seeing the As the they especially. because labor are prioritized more versus other processing, visibility trends Can backlog, challenge in gain line being clearly talk across the solutions there. your obviously, it relate are food we accelerating much and all secondary about is what you side, toward

about? thinking words, visibility in order are what the and you are where in So you backlog other of kind

Ted Doheny

on me Larry. an it’s Hi, asking Automation the expert questions. great And Good. Okay. having

up in it parts. break So, two

you If an that what’s seven, our their so pretty up gave in at we much out higher as of kind business, the company see talks backlog they Automation significant, and than backlog, backlog? can especially look picture, you talk about what’s about of you kind slide So is there, sales.

that to So are higher. question, we much seeing your

the The will detail part going get the we I slide. does for second other your part actually protein process? went see when if lots are a actual Automation plant are, into But question, we you compare of upfront of a packaging and the you you processing. at on another of after lots put people. of get see of we that question, package, looked But the in meat I to and/or the would where to process meat and plant, what am putting sure full the but how the you

see where on the have news even You of scares customers, COVID you had that’s the is. some our when it with labor intensity of some the large

So is labor, the we driving part can’t right where fit help are Automation key efficiency. they a we with now, in customers now them our actually availability, get to right some for it,

the and answer, probably So helps direct most is money they are get of food line some first the and the to Automation piece plant. with there. that we packaging that Hope spending spot intensive the are break description on in This that to labor bottlenecks.

question. Next

Operator

with question Stanley. Our comes from Morgan Angel next Castillo

Angel Castillo

Good and thanks morning Hi. for taking question. my

and X% in I you. the are that, more you the not the us But we should volume of noted Just the guide, assumptions as about two X% you think price kind Thank low-end give of what midpoint. high-end, kind and bit to little that? the if color was of if bookends kind could wondering of how at embedded and a EBITDA it’s

Chris Stephens

questions. Good Sure.

items, a FX currently are. just got the we to where -- fact the side the few want currencies So, maybe want concern headwinds to have on definitely I just some that highlight

occurred item, X%. about FX So we talked Reflectix this we is of adjusted did our the EBITDA divestiture past year. roughly -- on impact Small that but

capacity which are number through are we the million around, of pretty little terms in XXXX. that the and it our notable it’s we the But if a move put made, expense thinking -- we expect contribution roughly company. make investments the million heading XXXX. incremental in that’s So is that, a much forward, versus R&D as in plan to needs, with XXXX those consistent as innovation, I as into highlight the mainly business, other the well to item bit investments is driven that what piece, $XX side, is on $XX to on to increasing the making we spend And

the So price all XXXX. assumptions that is line and volume through heading given of flowing bottom not that into

back industry-leading to you ourselves up XXXX. in future in So not ability if look ending that’s investments, generate for ROI year can you see the as And that a conscious on returns returns were investment XX%. to at then our those

we much line. pause, and if driven longer-term let that you investments are short-term making make are on going bottom to to So of we will, not all to that dropped the that very

million our I in investments we mentioned consistent strategy, in guide, million to of where $XX as before, like making we So $XX our roughly incremental are with going. are ourselves,

Ted Doheny

little at question a looked business. driving. Automation bit going what’s And in of color Just is really the Larry’s on we bookends time those as to

to So are if knows really we even supply going in with we bookings we you look the disruptions. the the the at and looked the high have though though, chain end, got carefully Everybody on what’s operational that with issues very still market. up at deal what significantly,

looking So as so knock higher. bottlenecks, could of that those out are we up even at, some push we we that’s

Chris’s digital, of heavily sustainability. definitely that there’s stuff Again in some happen, that and So some happen, automation, see point, to make but opportunity. the make let’s are to investing go we we

are to And investing make so that happen. we

of So same this we year thing, issues, of do those the our bottlenecks, these knocking some the inflation. is knocking think COVID, supply third through out way, and chain, by

what now, So we it right now. that’s power and that’s And, think and we we going are the to what right the through done. is there after -- engine guidance that get can think doable, but

Okay.

Next question, please?

Operator

with Ng Jefferies. Phil question next Our comes from

Unidentified Analyst

Chris, Phil. with... you Ted. are wanted for I off start [ph] Good doing this Hope to John well. on morning, is

Ted Doheny

we Must getting and are be something exciting going the... on

Unidentified Analyst

exciting. more Nothing

you restrictions how the with easing. growth through volumes. protective easing the of pandemic through the Coming Protective your on of in you give comps And terms thoughts tougher some are where seeing in COVID up? the strength on restrictions XXXX XXXX will obviously decelerated protective volumes? For Can us do

Chris Stephens

organic And and X%. if of But, favorable approximately down areas to a are that bit can Protective side, implies the of kind a relates we growth better piece your well and X% that of And that looking it X%. would break faster point higher our low the as right things of bit others, a kind roughly little on that the it, anticipating as it, but Sure. there’s we be kind to back as there, specifically Food view we as settle expect side. come that the to to organic to X%, our is than Protective, up little you guidance in markets guidance else just are do add? the of price at. a single-digit open between thinking on are from it It X% lower of point Hopefully, on is view, certain more for roughly than anything things caution what Ted, geography to X% now kind bit the little X% Food we Protective but

Ted Doheny

color on Protective. little A Yeah. focusing

If you story trying on are moving be Again, market-driven look you a we John, at picture tell give here. from to what to is the going our we products. to are slide six,

actually you e-commerce in surge in really with portfolio we had we some some, XXXX, the COVID-related shifted used have going and space been was We language. stuff, on fast. this that markets the Chris, had So the what

us business. actually of areas XXXX Mailer grow didn’t one the And in that are for areas, our different fast that so we in was anticipating so as shift

lower Also, us. so which of a this We system driving driving the market year equipment look about out you that out, Protective is tires changing Mailer this million a Auto piece the an is the new Wrap that, if with an opportunity at the actually business, that $X upside think example the think of That’s the there We fourth that that we and bringing year. wrapping simple. that whole are Automation, this down there Automation was potential number quarter for Automation. is into again driving slide, opportunity upside was on taking we industry, was that are last in

the pretty business pretty that’s taking to move significantly. if and can we quickly So to taking that move are Protective we areas, think Automation the continue we new markets

we recover XXXX. us feel for an that will in So growth we see in don’t and issue that, as Protective,

Okay.

question, Next please?

Operator

Panjabi comes with Our Ghansham next question from Baird.

Ghansham Panjabi

guys. Good of one - plus your Hi, morning. On ambitions Automation

Ted Doheny

I that This am Ghansham, great. is our call. excited you made

Ghansham Panjabi

the for of the I excitement. the was guess to ambitions where you slides of back going one the This one inclusive by was billion This Automation of plus excitement the have acquisitions. week. XXXX

weighted you how curious, position the with complement expanding towards for existing I technologies or internally new Thanks. split? that the second particular? on segment, in is which commensurate the do for solutions years, that that you is guess baseline the already question next to will relative Or current the then resourcing the is growth to you what over to the expertise it require to have? incremental Just level sales investment And question XXXX? And to outside organic are with one capacity that related that your comment double three and some production equipment customers of

Ted Doheny

Okay.

to Let last and get it. first, Ghansham, try sure me make I will Chris to try go to

And we in So year, last we double go have the we to we on EPS increase last saw to increased went the investment. get actually capacity public and CapEx, middle the of been that a earlier, shared are and the on the that that let’s transparent that we volumes because EPS. years. price the the three we Where going on capacity, to in up

that’s schedule ahead working. actually are on that, We of

little team thing timing question, been has same of a there, have working we been your So the the bit that. working on

CapEx, part we of are are obviously of there, that but internal We doubling that’s being just declared CapEx.

Automation make happen. we that that So can

is going am piece left if our technology are pictures bathtub that way bringing there, operations. processes of that a the about to the piece of of it’s with or talked get robots backward are a our working circular the that’s actual in we other look robot mixture cobot cobot are I you go a those actually at slide I asked This a human. your is automated XX. The the and living cobots question on Where -- and by the where This we here. Automation in, lot world question,

we just number today hundreds operations. So in our rough of have these

going to are thousands to next in the that take We five years.

are is you be the of is have we driving over our that We in by to our been the that talking behind XX%, and journey. going that XX% to all productivity by millions, of facilities which way touch-points about reducing

the digital, forms quarter. and deep technology has the is and will we on next that more this about So when behind digital we do many talk dive digital

into technology the that of into is now bringing our second slide customers’ the operations. piece bracing Now the

So some its eliminating technology, some that’s the streamlining its cetera. process. are is same but ESG processes, it technologies of obstacles, et And some of of

of are part their savings from, excess, technologies, some large process, of but material. it’s where coming driving So different these pace

The have. number with Automation, getting going really to our on up down but third there we even get actually connected how the those over And it’s again, connected the partners pieces and network, are installed to get make to is base. not of that we this us model only working again what And our piece turning it The our that how XXX,XXX element is for growth behind upside being fast? other digital, really, we faster. first, we that’s equipment of Automation do bringing

you all talked those those growth how are make with to beat numbers we So growth those working we that interconnected actually that’s numbers about. have to going

Ghansham Panjabi

Yeah.

Ted Doheny

of next To point the Yeah. question. this

Ghansham Panjabi

good. That’s

Ted Doheny

Okay.

please? question, Next

Operator

with UBS. comes next Josh from Spector Our question

Josh Spector

thanks question. guys, taking my for Hi Yeah.

Just could update -- morning. on curious where are good us you if you

further were like? us you In couple profitability, in context, of you versus where give you Also XXXX need you about if your of that are become the equipment you looks some that there improvement to context scale seeing profitable? ago to investment of meaningfully flowing you to thinking incremental can what more through to thinking years Or get XXXX that’s a terms are goals Do guys your highlighting? higher the maybe EBITDA? already

Chris Stephens

the we Yeah. we But ahead. in in. news margins to side. that go profitability that I the Ted, at EBITDA wanted don’t will disclose good Only equipment clearly are let, because on jump level. I focused is

answer Ted I EBITDA it’s Bet improvements. some getting are happening let part overall strategically. we adjusted it’s of So a Clearly, our margin. -- will

Ted Doheny

just is us, jumping is be actually your exactly before it’s growth, great question But is about Chris to our demand. question. again so then make the repetitive, exactly, it’s And where we profitability. exciting. the customers, about want Josh, this creating I but why it in to about and sure was this talk is just Not

at bar And that’s this slide, our something look you in savings. put if this we so put driving customer the we slide is there in seven, gray, the out

solutions on we a right are company customers getting the and solutions an their save most as customers -- can sizing, focused money the pricing, provider three-year payback. on We the Automation are we focused our how our is

improving important, because we while margin. drives why then at innovation it fourth So you so is on accelerating are bullet EBITDA this slide, that to, if look the

we equipment but for have our So, through on is equipment yes, margin conversation from does the significant the side does hundred many a it how But, are one few where coming we and improvement yes, points it different moving today on improvement reason is, going. to are reasons, basis driving there to how much offerings number we of much cost save are significant. savings the the

there, modeling you through leverage business that we where are our as that’s have goes, and say it where XX% whole our reinventing greater look all operating journey are of the thinking driving we about that at out than company, So we to leverage.

in as have to going going to that fit do we expansion are is and growth targets margin we this this. So

is on slide The word use go if solution you third nine. that can important element we this, and of so slide the why inevitable, to the

nine is there. So, slide

we upside So turning core equipment, down. is model our which are to going put the

going not a is to subsidy. our profitable business, part this be of So

profitable differentiates is, are service customers’ The be eyes, us. But is the significantly equipment. service to we than element more what part going in driving here, second

our our technicians have customers’ embedded We into operations. had service

are we these are model Multiplier. pulling of that’s pay Solutions get We about and BUBBLE with the going And packages cool that? wrapping really special you to WRAP is how driving are of then Savings, integration that our materials, what’s other materials inimitable talked to we do we solution more of for that technology the the materials. the our than the through part really that we Cryovac the do

are grow more it great So, are to we whole not do model, profitably. we going business this going the It’s faster, behind question. to

Next question, please?

Operator

comes question Our Viswanathan Arun with RBC Capital. from next

Arun Viswanathan

Great. Thanks for my question. taking

resin of declines in couple few in prices quite We have last seen a the months.

last on weeks. is Although operations? And unusual little about how the we when energy the of will in understand think maybe on then impact there formula I European to bit feedstock you have switching Thanks. couple guess a And pricing price you tight be your us the costs also any be increased that, affected? the seems of side. all just can help

Chris Stephens

your Yeah. Thanks for question.

volatility I the yes, So, continues. guess

some is, it are there best we the specialty improvements actions seeing resin we about But of pricing, have are have we the certain what pricing we talked are in think now. I on get, are relative quarters resins. of that but we three top to you right,

just it’s it’s So on on not many. one,

you as other about resins the talking So well are that increasing chemicals. are as

of our all are So raw making year to good pricing it, the this of anticipating a and just close what we that. look as at sense we heading sure for possible material get as into is

the are formula-based it we will six-month when on effect come months that get in that the six benefits same expect the period. of we somewhat. is pricing over point to to middle has And about and would down, that, continue takes does kick a it in, that Your for we

guide So to we to relates favorable cost pricing as this our consider year be it spread. in

on entering want is other last the half I are just we guidance this first entered that we like that half. terms I thinking year did we then point into looking year make think between maybe kind XX%, and just in about wanted of the I comment at XX%, add are earlier. roughly the color to XX%. And roughly of some second XX%. our This I year, to just

is as that don’t maybe So it pricing. But, in change are resins some buy intact. formula-based specialty in Ted, resin formulas. our we bottom again anytime line, the and is an future that different that there pricing And near grades multiple of that expect immediate embedded in of improvement types if even We to relates other comments?

Ted Doheny

a Yeah. business. years much business, converter obviously I bit little we of than questions trying I have with to will are now guide our resin color because more the just that four add the

let’s is of on our business. understand a going source this because but, what’s So, major

said, with inflation, markets resins hit resin Chris us hard. as the So, really

mix, ahead for end maybe took price that cost the but Especially the on of see us half on the the we on pressure it in actually down to the in So in but first to down commodity year. get of that the think resins, year up first year. go we the and the the will still whole half, type of first half

So resins that, our do going underneath that’s year-over-year. and though, the see what especially the specialty Cryovac we still up we magic material, with that

those good. were have going that balance bit that we going where resins is flattening We have we down a a specialty, the we us want still also But little going up. see in, So bit. paper. little The into commodities just which to beyond the also are take

especially moving So agnostic. Europe our material be the to in is we paper, are portfolio

are around significant We are driving. we all know plus seeing it’s on energy, wood costs simply very world as paper that paper. there the Again, energy inflation is the because the

with handle cetera, et still beyond in As is drive labor, inflation, through is all resins, with So that working with customers do we on our cetera. to do power have with still our pricing Chris disciplined how Automation? drive comment actions freight, care, paper, And this last everything to this materials, How et Automation with said, this the we place resin its one beyond it. we And the customers? solution now same.

us So our for is attacking handle have we care we we it, and we pricing really, on can over it not it inflation to with issue and customers. really are with do but the

please? question, Next

Operator

question with Josephson next Our Adam KeyBanc. from comes

Adam Josephson

seems expecting you last everyone. conversion maybe Hope touch free are year lower morning, well. your you flow, a XXXX. something similar on are Good seeing in It Chris, cash like was XX%.

term long XX% know was will I couple a drag. last is taxes And year is elevated reasons. of be this And be working of going a a CapEx capital target to year plus. bit cash Your elevated, for

help CapEx back What to normalize? beyond you you about taxes that Cash me to gets perhaps can to you normalize? XXXX? XXXX, algorithm So think post expecting are

Chris Stephens

question. Yeah. Good

profile business. the investments given there, improvement earnings XX% we return time. with start we are drive overall yes, aspirations I’d the to and Meaning performance the power just around So what generate. to clearly based it these able mid-XX% starts a of on business margin first over It got of are EBITDA to the

on power So what of are is we those return the we them. getting the I’d make investments able which start, earnings as to do,

is CapEx the of the sense. internally, and lot As a we on need return investment we comment there, don’t capital starve of makes

couple space. in do and to around I back commented as the R&D also of that, elevated investments the CapEx we going with going into a this on are have that mainly business We year, earlier, the

capital I then So the next metrics. really, really it our see strong capital, et large relates and performance as DSO, you working lever, to DPO, efficiencies, those in to can and you get cetera. DLH, working mean,

However, especially this I are would we it and going comment that if environment. that’s in available, to inventories are get

the of I is remarks, my And part future inventory are prepared getting get would certain of they year-over-year, we because get made down remarks payments stabilize, of up see demand, tax these velocity, be we area into but other elements, over, considerably, I to down. inventory to are just then supply that things $XXX in and challenges, increase the is So taking I to on if more prepared tax working income able that’s expect more and to inventory with say on open that roughly explained will, my seeing terms and payment taking are we specifically on in we we you a you expect million those kind through But which the what good. comments were. once get

to are if tax based opportunities that countries will make. we call company, always we can how of you are we we that take opportunities global we the a I of, see course, operate takes shape, in advantage the looking there We on it will, benefits will incentives are get investments for

of to going at look in to taxes continue terms to are get down. we cash being able that So

are in -- just I greater to is earnings to look power summarize, maybe just improvement at at earnings our looked than XX%. for is So of driving I terms that of The what power. business the we

Ted Doheny

It’s took looked to over first took -- Chris, what said, here up add been We been good we the we thing now that We number it history. XX, Chris that we XX, only summary as when congratulations, the to year looked engine to And have at Adam, a especially, there. at and driving. XX.

going revving as Chris came working those so, volumes we capital, in with the described are what we is forward are engines the going up. And as are

let’s earnings going the model, up, engines. real, the will that’s to it we is producing said we higher the the be of part a volumes more they and cash second there with sustain cash, there up, those to drive key looked when consumption to even volumes the in go So volumes but at the spike of those and

pretty those feel the that’s confident where we areas get two we there. So take we that there that’s business going the going and are and confident are are the model to to

please? next So, question,

Operator

from comes Our next Markets. Capital Shah Anojja BMO question with

Anojja Shah

Good are you morning. I Hi. going… know

Ted Doheny

Good morning, Anojja.

Anojja Shah

it digital wondering, … will mentioned more of do envision printing M&A to built you the you But and talk more about next digital quarter. printing and was an acquisition, I FoxPak focus? be or more internally

Chris Stephens

let Yeah. go you I with that. will

Ted Doheny

Yeah. No. question. a good It’s

It’s the started digital XX our We printing we look a SEE see question. actually of it’s had invested if digital both this we in think slide good part that on Ventures, journey at have but technology. you some, have sides, and So you game-changing we

a invested put out to of there that for expectations. in but want little technology don’t quarter, exceeding next we buzz I is that So bit a have

to mostly it’s get the now right it’s some operations, in us enabling So productivity. significant

customers the presentation to the We European and that market they really FoxPak get helped we how outcomes, putting especially with of expertise printing places out putting Automation more our pioneer packages some its produce in to their and in impressive. what us that are do on It’s speed with a now is really the is the space. the digital technology actually faster, our footprint,

answer So, as Chris said, the yes. is,

that we M&A in connected own have faster be capability because digital. coming. more everything secret looking have scenes, we with us buy and to at dive move the other working we digital with question got deep and will at do, impressive are future, on digital. We excited the are you next opportunities our to that’s but pretty We about. because that are when in all share it some and we on what internal And we quarter are the the have digitally Great some the internally because we did is might we investing now behind we necessarily space of to again to partners the that

Chris Stephens

And Last please, then, question. last question Operator. the

Operator

Samuelson Adam from with Goldman Sachs. comes question last Our

Adam Samuelson

Yeah. Thank Good morning, everyone. you.

Chris Stephens

Good morning.

Adam Samuelson

a hearing that’s maybe And outlook to more seem kind it of where higher driver hoping, longer-term offerings, of am maybe the company considerably XX for you And was of I previously. and at is sense outlook looking which have trying on reaching point get to dramatically? times itself that This online multiplayer a first of dig the just of talked about change solutions to into Multiplier. what Automation I time up what equipment Solutions framing growth kind kind And framed this doesn’t the big the proportion equipment of you the the optimistic the growth if materials the than threshold. be might business is properly. some

Ted Doheny

Yeah. Hi, Adam. Yeah.

So answer are we yes. turning. the there, It’s is, it’s

nine, to go go you we before slide give to back a framework. If Just you slide to --

So slide XX if at where call bathtub. and this circular our model slide our XX, you look is taking of we are this. the I

re-powering it, an turning aircraft recharging in bathtub can a it. we see are carrier rewiring We are and it, you

this Solutions the an Automation are are of they get to is those, person on So Automation well. this being that new our very sell-side Because And talking then an the APS. and acquisition company does. if about to next ex-equipment Solutions that Multiplier, based, talk with you Multiplier we and even this we the slide analysts did go what

special we are you materials. we give the away, then you part inimitable that’s this equipment, and you that have company an the so of do you is equipment different bring model. use the and do word And the we the charge with not That’s service equipment, connected you equipment, only the equipment why don’t we the what than

But, over so is that pieces I So multiplier yes got quickly. get to big. we XXX,XXX fairly with linking moving well together with, get have that you, we connected, that that shared of equipment,

This and example box if at one So use looked connected one. the get example get model, if show look your do you you very really you times to than bag how to service to because visual to showing slide was if comment equipment we XX of that greater appropriate, X you is like times. and materials, our a specific you do we for at in

on use you anywhere that Solutions does to the work? the where pouch that multiples. equipment do all service what you very pouch, means fitting, well you digital have a box and you customers XX materials that $XXX,XXX, we doing customized piece the auto we and Well, the way how our system and those do can have over have printing and you multiplier a a of times. a Multiplier and have All actually an is box, So for from

we discrete your whole even point, so, piece of you Mailers in to millions below that’s a is times. And down that the did every product-by-product portfolio it the the but are not inputs. by But Mailer. moving did we to shows which over taking mailers. we X mail That it, past, where example

above, leads if facility but you Where look the at whole side, the roll and exciting. meat times portfolio, look on Multiplier which beef you Right lower. going before are The stock. automating below if the we already bag times, We digital Now now, automation actually printing Mailer to right? Mailers. much and of it’s even putting Multiplier. it one at right So ever multiple that customer’s that to system bring see then bringing are that can you be is X some really we Solutions the we

that of $X So is the as example multiplier shared system I but the that the all was significant, film automation that doing million. piece,

on So that’s at are model. pushing on to the that’s once, those how Yes. we future us are going the where of growth be high in equipment why future? the we higher moving of to And it guide volume the volumes Is growth growth gave in taking our on the you we you answer going not real? but question. Are your your business careful all to everything Yes. modeling. It’s see our

that, for And next the I out that’s the healthy. as want can Really for today. we are it excited for thank call. of with and you So but time. quarter’s tell you. everybody on safe stay Operator, to everybody us call digital Thank hope

Operator

call. Thank participating. conference This for you today’s concludes

disconnect. You may now

Sealed Air (SEE) 17 Feb 222021 Q4 Earnings call transcript