Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the Fourth Quarter and Full Year 2022 Sealed Air Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Sullivan.

Brian Sullivan

morning, good and you everyone. Thank are With Chammas, our Emile Doheny, COO; me and today our Christopher CEO; CFO. Ted Stephens, our

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

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

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

to Slide the call over Ted? I Ted. to please turn will turn Operator, now X.

Ted Doheny

the QX outlook, year we for for Liquibox. your X.X joining our Reinvent end that, acquisition open will thank questions. results, and discuss call our Brian up XXXX will you today. we you, After and call of SEE our Today, and our Thank

Slide taking We solutions. with on our digital start purpose. with is are showing we packaging the where and X, graphic Starting automation, sustainability

challenges class a packaging automation, sustainability enables our better solve our business become protect, on with world packaging it. the partnering to in and are than world to we company, to and critical solutions. to We This vision digital customers found make our

Moving acquisition and new as market we a is to Liquibox growing, XXXX packaging in the Cryovac market. portfolio, us existing fastest is and Cryovac portfolio. and is that Liquibox, earlier liquids announce business. than global our for are our of highly sustainable with synergistic of a anticipated, industry XX% brings to more Fluids completed is highest product competitive margin fast than within see flexible innovator X, fluids exceed X, Slide is $XXX originally in of packaging and to leader our on liquids we container million, bag-in-box and our combined the representing attractive pioneer business capabilities growing and the rigid excited disrupting to solutions. Liquibox line The for expected February our

Our and business plan over is of $X with vertical operating a XX%. leverage to XXXX turn by fluids billion liquids an into the

quite To in this upon combined global best investing shelf packaged space been of some consumer like new will life and Liquibox attractive containers. extension, leverage liquids, rigid quick-service have and the technology We spaces market opportunities goods, to growth The and as for in freshness for and time. spirits, cost-effective us now? access wine Cryovac suitable alternative will areas enable significant restaurants open and business ready-to-drink why to the footprint. other attractive broad for question

asset the identified most our M&A team fluids coveted pipeline space. a target and as Liquibox prime and the in liquids in Our

quickly earlier As X the anticipated. closed auction months, preempted the of potential window months within we X was opportunity a getting originally We than closer, transaction process.

than developing. teams on jointly our Liquibox SEE’s three. highly $X the Under our billion cross-functional approximately proprietary of I achieving greater leadership, synergies year plans integration and lead vertical, liquids revenue and have and to appointed delivering fluids Emile’s are cost before have been Emile to playbook, $XX energized deploying ambitions of Chammas they the million target implement

Slide to highlights by moving be how to customer-first are company fueled which market-driven X, turn a brands. we our Let’s iconic

solutions digital our serve. value enhancing productivity, deliver than markets on their and allowing competitive sustainability by customers Our improving focus create growth and faster automation, the sustainability while to their advantages for we SEE

sales enabling will efficiently. in now total from QX, us our and Our to up digital strategy have transformation driving sales customers QX. behind our more reach This go-to-market the force to source doubling and effectively new innovation evolution be XX% of while that online a ramped of digital of

us online quarter, MySEE the distributors inflatable we largest and highly platform, partners to this our of converted make profitable online a for geographies Our to new Wrap empowers solutions. two happen. In customers sales to new reach Bubble

Our Cryovac’s liquids over XX% in and fluids business grew XXXX.

new Now this to our operating expect the with of we addition portfolio XX% XX% vertical Liquibox, leverage. be with a over of

markets we conversions. and spending. saw we QX, customer to win through from retail electronic markets with in Fulfillment, driven working able automation, are down Destocking this were significantly major proteins, are declining by Consumers customers trading especially down proteins QX. with inventory. were Leading and amplify SEE premium down in fresh trend. going industrial excess In customer

with in to new the the past over that is plan We innovations the The in months. half outlook automation in for XXXX. rebound constrained were challenged second half these a stay of XX from gains markets first

including Following of for are new the positioned our half in developments fiber-based second we well investments to growth double solutions, XXXX. in our capacity,

solutions. launch line Bubble of content We mailers about recycled recent Wrap paper are of Wrap and high the our excited new Bubble filler

we at we we versus success of of of moving the from years, Reinvent Slide goal transformation targets. to X.X, the phase SEE world-class to Reinvent over now X% packaging the advance best a digitally last in Moving growth including XXXX, built X X% Adjusted next automation, XX% driven and the EPS EBITDA Reinvent XX% journey have our with versus SEE our our SEE to the XX% X growth the in range operating next target. SEE, last following the our been over the X, solidified of Starting has with of platforms, company. years. solutions for versus met development through X% automated on foundation and to X% to leading SEE’s phase of our compounded cash Reflecting or our X%. have growth sustainability. conversion operating and has free X% targeted model averaged flow at has Adjusted exceeded and digital compounded Sales model

as transformation highlighting product cash from on solutions The our accelerates improved we X.X Liquibox challenged flow building focuses working productivity. and XXXX through growth on was customer-first headwinds. fought of Reinvent and approach. capital volume profitable transaction to the constraints supply high-quality with free our growth platforms, SEE

empower By attack will of accelerating the transformation will digital the online, we in new automation Our own operations. to drive opportunity profitability us our business moving of to areas and will use million grow $XX to cost than $XX million our to markets XX structure months. reducing the efforts focus to we the serve faster organization, XX by a next digitized through more over simplified,

Let’s fuel our now will how operating Reinvent discuss SEE SEE X.X engine.

Slide updated with to the to we Reinvent out model SEE SEE have XXXX operating Turning X, targets. X.X

left will profitable side the The half. expect XXXX, second the strong the we the In downturn to full year. a growth X% operating be market growth despite will flat Liquibox model SEE first in assumptions. decline. for SEE On outlined half a the add we by growth X% performance recovered the of a slide, total

and convert margin growth operating resulting generation SEE at We years. sales operating transformation, more deliver than continued world SEE returns in our accretive the next The the high-performance combination will operating will XX% leverage, class engine, free are culture, engine acquisitions flow and expansion. our X strong digital confident of cash in

X% full year the On XX%. maintained on Let’s were quarter, EBITDA turn sales to a adjusted and environment, we and and adjusted results. QX EBITDA were full EBITDA up Slide Despite In margins X%. discuss adjusted down net currency above down was tough net currency XX%. was in basis, year constant X constant basis to a X% the sales up

of a a million. expanded ago by compared on margin basis. for XXX were QX, X% year full flow points, XXXX cash quarter currency of $XXX in was source of though of earnings setting for Our year SEE. $X.XX per in a down disappointing, a to the new cash constant earnings XX% record through up the and share Adjusted Free basis

our as journey accelerate We we to class. our in people business continue and our invest world to

year In XX% QX, was dollars. X, SEE our growth Slide updated record to constant were in automation by XX%. up record sales Equipment, added sales with up which Full automation Food up in a we XXXX plan. we – quarter Moving up year-over-year, driven had XX% equipment million, a we $XXX QX,

fast work to that labor savings create productivity. continue customers shortages, and safety and returns by automation solutions with We deploy inflation, to addressing our

million. double-digit we growth revenue Our XXXX for bookings shortages to greater than revenues continue $XXX to and outpace expect XXXX achieve in deliver linger, though to supply

robotics, automation and expanding In printing like our aggressively filling solutions are portfolio with integrating and growth XXXX, by are SEE suppliers. We expanding our driving strategic vision systems, SEE and bagging, fiber-based our boxing their respective automation from solutions equipment we digital materials. faster and auto network of technologies

review will results in to will Chris Now, over our who detail. financial I it more turn

Christopher Stephens

morning you, Thank everyone. Ted good and

Slide dollars, By X%, Protective fourth was sales quarter were up were by X%, X%. of while XX%, Americas, to to by XX by EMEA sales on XX%. up EMEA net X% net were we segment start Protective Let’s up essentially review By year up APAC. X% sales of while In of billion. In offset APAC in in X% our flat. full and was with region, region. Food, growth down in X% $X.X constant in Americas X% X% by grew and region, Food up in $X.X we billion down and dollars, net was constant declines

by FX our quarter XX, challenging performance, Slide we had our sales ‘XX destocking end driven down with as year full X% reported and protective and markets in summarize fourth lower inventory a versus and ‘XX. On demand QX QX we headwinds, primarily

of X%. reported However, million of last year or XX% for points. margins year, to decreased basis $XX XX $XXX EBITDA we delivered sales growth with compared full XX.X%, million down adjusted the of QX

lower direct with and by basis material, of we points on define to This as For inflation year, which freight, unfavorable as costs FX EBITDA margin XXX costs positive than price driven less productivity net operating impacts. offset and the performance and billion productivity – well year-over-year non-material higher volumes, labor as as which gains, more to realization, XX.X%. grew well realization, full expansion X% price as adjusted $X.XX was

or We per diluted $X.XX, share adjusted relates period XXXX. it in full XX.X% to XX.X% shares repurchased a of adjusted was to repurchase our compared with in approximately million no last tax earnings XX.X% QX, million $XXX compared earnings XX.X% diluted had activity in the rate but year. share As to in of $X.XX, our year in QX basis, per an adjusted X.X adjusted share On same was rate tax XXXX.

$XXX.X and million million Our for year. our weighted $XXX.X we program. million average diluted ‘XX outstanding authorized had in QX end, remaining $XXX year the shares under repurchase full was At share

QX, in QX on of million segment net on sales dollars EBITDA of adjusted realization in XX.X%, million declines. and Turning $XXX of being Food sales organically inflationary volume volume of realization with margins with to up basis all XX% by year at million to XX, basis, X% of organic declines QX Food. compared offset $XXX to across constant an down increased which Protective categories down last quarterly were XX In consisted with Food price pressures X% price X% offset $XXX points. Slide results of help were net cost X% starting X%.

end our down market $XXX with customer at economic down constant dollars Protective We activity. a of across million in end-market pressure XX in and the despite weakness adjusted destocking was points the and markets continue outlook only first EBITDA margins XX.X%, Protective to industrial of negative contractions expect fulfillment half XX% basis QX in to XXXX. in put

which Food at billion Slide price year $X.X could X% pressures XX% on and realization volume help starting see Food. up of consisted with XX% full organic offset we an basis, overall. of inflationary were net to XX, declines sales Looking of results segment

and of up the sales margins XX%, services, year, Food year, of up were equipment, for Protective up automation EBITDA constant were in net XXX X% X% million include basis points. was XX% $X.X XX.X%, the of the Adjusted organically $XXX single-digits. points. with by million For account realization EBITDA year. sales segment declines sales systems, of for XX% up high was with being $XXX adjusted of basis approximately dollars X% which margins XX up up parts organically in with billion XX% up of offset price volume of

As double-digits, year, solution. for for they in X% our the segment sales, the approximately automation sales of fueled were Protective account which auto by up boxing

to we partially offset inventory, non-structural XXXX taxes, $XXX higher ago. million to free year cash of increased this The was XX. driven the payable cash we in million favorable de-lever. to by capital $XXX Full mainly use Now, the in year reduction cash let’s regards turn period which adjusted million free reductions to of EBITDA. on and to benefit a cash Slide decline flow in accounts were monetize by $XXX compared flow working payable, XXXX expect and drive as accounts With growth of same

Slide strategy to while a We driving in QX for sheet growth maintain focused accessing purpose-driven capitalize on and allocation On by balance we balance initiatives. the our the our bank our bond successfully finance strength maximizing shareholders. of our sheet XX, We last outlined Liquibox attractive supporting invested capital group acquisition. and engaging profitable value month strong on markets the returns on

below the estimating year, X.Xx We of end expect throughout the to XXXX. or delever by

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

in the assumes on of mid-single-digit $X.XX and to We expect at growth basis $X.X net the range a midpoint growth low billion organic. sales which to be single-digit reported billion,

to Liquibox in million under XX million expect our $XXX to in between We XXXX months sales contribute $XXX ownership. given

adjusted EBITDA approximately EPS expense $XXX of such is at expense billion, depreciation million tax is assumes which We non-operating adjusted $XXX the expect – amortization and adjusted items EBITDA to Full of higher lower $X.XX be range an range year interest adjusted to higher full expense XX% business effective midpoint in as and by $X.XX. base XX%, approximately midpoint of between at million, assuming of of rate driven shares largely expected of to be XXX XX%. in net the $X.XX outstanding. to The interest billion year and $X.XX XXXX the approximately $X.X margin average the $X.XX to approximately of million EPS adjusted

a And of XXXX which of lastly, cash $XXX we conversion flow greater in XX%. free $XXX the million implies cash expect free to range than million, flow

Cryovac earnings a Grace. matter related W.R. tax in we agreement to have acquisition noted our release, to settle reached the As IRS legacy tentative the from

XXXX excludes free review and cash agreement further any a is potential flow tentative Our to range settlement cash subject approval. as

levels efficiency. relates include accelerate drive costs results to our benefits it digital As adjusted to in Reinvent higher we of transformation our to the the plan productivity as operating both X.X we and and

broadening it basis and us As SEE business X, model sales we’ve be our efficiency to X% reach, our do digital driving our Slide operational time transformation in highlighted before, making will operating on over easier by XX point with growth gains. delivering

ahead XXXX, in So anticipate we softness to as first the look we continued half.

We and drive will remain actions necessary disciplined free to strong the flow. generate to margins preserve cash our

of this Liquibox model operating guidance, With strong XXXX line value our X%. in integration to be Cryovac sales we we have expect the with creation, brand at X% of the midpoint successful to to the acquisition target expect our sales SEE our of with

back let some the call that, closing Ted now With me pass to remarks. for

Ted Doheny

Thanks, Chris.

automation environment. from face-to-face the my been post-COVID I’ve call for see around increased wanted employees, customers and some in great we our largest was some in the insights the we’ve the world, as and with latest action. Before our the our open to of up share travels questions, to meetings own It our world. solutions to see facilities I around meet progress our able

challenges hear Touchless are investments while customers firsthand and also millions providing from for quality we materials help automation with It’s Our incredible how eliminate we see touches in in to and harm’s facilities. through higher embedded me web. our removing them been of uplifting people how their

and customers exciting from partnership. was much It value how latest automation our our in solutions see to they action our hear

internal with is our focus sustainability driving and and our operations. digital customers automation, value Our

as energized in Liquibox Finally, relationship the I’m really opportunities. fit uncover we jointly cultural more working by team, the with

Victor, for to questions. like now Operator, up I open would we Q&A up will that, the for open the session. call With

Operator

Our will Markets. first Capital [Operator come of line Instructions] Viswanathan from question the Arun from RBC

line open. Your is

Arun Viswanathan

I for your just taking my to growth thinking year. question. Thanks Great. Good this guess I morning. understand wanted on

like challenges volume So there front. it sounds the some is on

yes, we I you some back as year, volumes and with you will guess, go easier guess, You see the How noted do start background. through but can macro the a evolving, that. in – protective I comps, maybe both economic Thanks. half, you just in challenging face food

Ted Doheny

Arun. with open Thanks, up I’ll that.

in as seeing challenged protective we’re with be you’ve the in seen, definitely starting we year first We’ve so both the like opening and e-commerce. the in shared the on business, our been electronics comments, still seeing the volumes And of as side. in major especially markets, half things

we’re feeling still So pressure.

We’re the into still of quarter. going destocking the half year to in the the first feel first

the actually our we’re half down we guidance, in rebound definitely products some we a second coming talked again, in with should we about our with think in some year, the through the can year, still strong have second Reinvent couple as SEE in see place, further potential. we the a have of of of still I with but and guidance, think think upside of digital rebound. our especially half a power we protective And that. moving On distribution, – we we percent think our have we new We on their

we side, the volumes also – food having same story. as still with shifting pressure, the under On the destocking, see that

to first for percent. couple half the second volumes we’re be some The of opportunity see think a have guiding growth but half, and actually significant up would challenged, the we do we food in

still food see protective, as the well automation etcetera. in. the labor, for out side inflation, with we getting the really there as It’s our On really tough kicking customers

fourth highlighted. up We see of We had We we the automation pick strong that quarter. in coming in. So some did this.

the second we see half that continuing So year. into the of

question. next Okay,

Operator

Our of will the from line of America. from come [Operator next you. question George Bank Thank Staphos Instructions]

is line open. Your

George Staphos

several talk question into My the everyone. you synergies business up is where for seeing bag the year? characteristics morning. Thanks Liquibox? quarter. on relatedly, And you contribution you progress Liquibox. in the distance Good and XXXX. catch the the guys. see from Or EBITDA on it’s the the box, market? yourselves would this Congratulations of you’re carton, you building of Good you putting competition across expect the to Can valve, between package. are and peers amount through key Hi, material whether Thanks, your to that details. Where in yourselves say competitors luck you’re the the seeing

Ted Doheny

open to I’ll I’ll the insight some Thanks, George. since I And here a call, have on it let give Emile Emile that. up.

second market think we of talk teams internal As with can actually the teams full their what significant you cover Emile team had especially met a far what our million feel have are. part And extend. with service something you quick and liquids synergies that. bit? the the opportunities little model, doing of $XX them synergies Liquibox have we that, together them what out the what we that already your But – is our want And the solution, What I’m if we’re and and confident two month Emile, The market. we just teams on learning together. talking leadership could and bringing our position extend is what to in in question, the the their some we growth pretty more with products in done, the growth actually that excited actually as we’ve could we’ve to a there. on see penetration with first where the with of to actually on about, excited we’re on growth hearing that much in We where marketplace, market the about with the leading we has. have most for cost And

Emile Chammas

remind me since let ourselves, after couple for And the a the the just guess – Absolutely. But in to closed ways. we’re question Ted. address of I different thanks, Thank X we you, day only question. George, acquisition.

around liquids. $X the the competitive of First and set But convert a really, of obviously there to is of Liquibox. billion that all, market how we addressable is piece rigid

days the downgauging This unique as the the in and strength, for footprint what And with excited sides around since we Liquibox in the around Liquipure it’s well solutions, really as present couple of we just Air, the to where the only opportunities. a work together. terms the in it’s incredibly team market Within opportunities all leveraging of Liquibox Liquibox synergies. synergies how drive share the product capabilities we I’ve now that tremendous the close [indiscernible] last are full existing recyclability. certain fully Sealed see that – both coupling ago, sustainability. is over lightweight of the and of extent, the since ones, the customer of terms extrusion, teams today we expertise sourcing are into that can met markets segment The on pretty fitments, and Sealed about a could X the short-term relationships the terms market allows Air’s even around and so of around in the and capabilities as Bringing Fluids footprint weeks,

more our internally, on just is the billion So we of the Sealed we collectively that the piece side, capabilities them small buy even market using path this you about, the And company, as of it. tremendous Obviously, in film accelerate as how Air, Liquibox unpacking pounds we’re terms in do piece the than to know, talked touchless had even plans X fees. MySEE size of and go entire their then of I’ve in expertise, market how Obviously, a terms also then structure within Cryovac extrusion, synergies resins they but better. into we of larger bringing much a the George, company, film automation versus what around as the we smaller buy the the bringing company really, how the they digital. can digital well and job with have now done – a resources

calls. quarterly again, So we X, but great in update that the day you many to hope upcoming opportunities

Ted Doheny

Thanks, Emile.

Next question?

Operator

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

open. is line Your

Ghansham Panjabi

weighting me. guess of targets, and everybody. is XXXX the very and weighting Thanks. from internal the XXXX back protective more And financial become changes on question. the about Excuse which kind between have because asking some second half I your to think between – of How on first food a first the helpful, acquisitions, we half think than keep the you portfolio just I’m I have initiatives focus portfolio guess off, and EPS? resistant morning, obviously what do will we and then you Good recession And etcetera, should currently? EBITDA outlined on standpoint? How the algorithm. the effectively

Christopher Stephens

for Thanks your question, Ghansham.

part your maybe So there. first address

do give although So is provide see. to guidance, remarks, first try we to typically try of And don’t with quarterly provide, in the we in as – understanding prepared we our just made second to we investors about to half, we half. thinking what prepared some remarks our softness first half expect

in maybe I’ll to portion continue XX% in terms of with we operating we XXXX. being some coming our is in the portfolio talk expected about by to in that the rebound automation drive in of of sales, is we putting the adjusted that that. followed going year. additional item terms our overall to We’ve add – and a to half, and expectation But Ted, additional continue that Liquibox we as reflected in the to second pursue as guidance now So expectations big business full added driving be out there have there terms rebound Main some color. Ted thoughts. And XXXX. a maybe our XX%, had And of is somewhat expect growth. the the let half have in But for first in our model,

Ted Doheny

as portfolio Yes. Ghansham, on at we’re look XXXX. part the you the the second moving is of question

at about space. was if portfolio, moving of actually over that the see percent into XX%, is look because where and and moving shift, the business XX%. it’s now another to very consciously medical Cryovac their food and you fluids at the our it it So it XX% we’re fluids over XX%, being part you portfolio, The talking from

side automation Reinvent at as see full our of drive to our in can But is a forward in the really business portfolio be a you to automation SEE, our of going the part the of we that highlight, our the other it’s food portfolio. side to and it’s strong growth very digital portfolio. and portfolio So becoming portfolio strong to the looking shifting

we leading So have with can what mean? we’re and that that customers’ does our facility where materials. Where pull-through equipment automate

and with has right of was very product talking the now, with protective we fastest-growing they And food in that into have Liquibox, bring digital, space. lines that bags. our both Emile do our solutions, now material the One through. been box bringing auto as some about boxing, fiber-based automation very is do in well pull significant technology the And we part and and of opportunity, as a to but we well, fittings

adding But portfolio be our that the ways, the So solutions business, pull-through we so profitable materials two very is think, a that shifting on full shifting portfolio of stronger stable, to as as portfolio portion the high and to with continue a shift to in we’re fluids. exciting automation also we to model for where portfolio shift.

is profitable to fluids now to actually be strong of – looking a our now it other the putting the – that’s despite existing operating our and portfolio and really engine liquids the has all at going I a XX% at of remarks than more where prepared performing base. leveraging the just portfolio be leverage at highlight and issues, been engine my going a operating in over to piece One part highlighted the is

So that be XX% is over to years. driving leverage next really going earnings the X

Okay, next question?

Operator

[Operator will Jefferies. the come Phil Our line from you. Instructions] from next Ng of Thank question

is Your open. line

Phil Ng

full year the you’re In I your gains baking Hey, by versus points some a guys. market. guidance, few share morning. believe Good in

bounced opportunity kind you, chemical little fourth the access that equipment the Just equipment side the of behind last may side? share supply nicely you of on lost to of back most materials, Are issues the quarter. to pretty in side? on sales I the on well Have specialty what’s recapture to some on the as a get that’s the year see as think, chain and the you have want And driving that? food hand it’s good

Ted Doheny

Yes.

to supply the – were on chain those – So the getting ahead on just we issues side. equipment

So I good shape. a in think we’re

expecting I grow that see back coming that and you’ll business, and growth more. can strong think we

of me the The first remind Chris? question, part

Christopher Stephens

remember, food, we talked So on through the – about just the thinking the...

Ted Doheny

in highlighted materials market The I specialty We the definitely, food But is have Okay. part – food, the preference the driving with resin in in now automation of that full guidance. The we gain. is the that on have year at that We gain we on position a that share X% coming of business. really as the we’re part mean see yes, Cryovac we’re we for our our marketplace that. food And definitely of back. and food. before. we good the share and half, some see on it that our growth second

the against material, we we get of guidance. that’s first think tough a can back, part in it’s having But that share outlook. half Now our and

is and on So the we share back, automation. answer that we gain short both expect gain materials more share expect yes, on

Phil Ng

that you Have point? won at any this share

Ted Doheny

identified Well, that, fourth in partly, the with quarter identifying coming. equipment that’s the first coming in, to we that that’s

gain equipment So quarter come. part the is yes. More to answer the More fourth to on – of that now. come strong

Christopher Stephens

to as the elsewhere sourcing And side, in the of that making we expect terms specialty food quarter have went or business online, in then continue in that and us getting place, Right. specific that execute on been challenges, loss back XXXX. of for we quarter the slow fourth given gains dual getting resins that in every the share,

Ted Doheny

you also protective side again, on really specialty protective – the get asking is as the the a through highlighting on same you’re if we side, we we we just where but focused destocking the have and On just was move distribution. thing food, think

this expand definitely to digital as reach through we side. MySEE, we when get go further protective with think partners the and it’s online those capability to destocking we our going on of some our Moving distributors

some we as well. there we So, have think opportunities share

Brian Sullivan

Okay.

Next question.

Operator

question. our moment next One for

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

line is open. Your

Anthony Pettinari

morning. Good

Ted Doheny

Hi.

Anthony Pettinari

Hey.

Following versus second I all wondering detail the on Ghansham’s compare up or might But how appreciate half was if think put I question, on XQ just first could on, and EPS to point you half. any finer XQ. I provide a color

volume and have weighted, guess more You half talked and I cost Liquibox. saves second weakness about are I two months you protective the think the of

your start but in saw wondering just January. of how kind might talked packagers I across then And slowdown to if you EPS strong similar just about am dynamic just XQ either So, wondering in some December, XQ? of steep businesses. pretty a then compared have

Christopher Stephens

Anthony. Sure,

just actually As second – well like half for But a feel down to view, guys sequential per share in from the earnings you QX year. we know, give half. would definitely, you quarterly point be but expect of the into guidance, and investors we don’t as going we as to to first give

on mostly from pretty of QX off expect you see quarter, be the automation necessarily in it, first you may of as in QX, So, modeling think then what Coming softer point on expect of QX. it of a on side. of as is I QX split half. terms growth to we to some same it protective in strong XX% of going growth – given XX%, don’t And would kind a level that view,

faced headwinds us view some second anyway, So, and that half. is in reflected half our that in QX first of

Brian Sullivan

question. next Operator,

Operator

One moment our next question. for

question will the next Our Stanley. Castillo Morgan from come from Angel of line

line Your open. is

Angel Castillo

could of we hoping I the question. of my taking for kind XXXX just Thanks morning. was little more Good bit a growth. unpack Hi.

implies based just high just those put that, You – I EBITDA you X% be that of would would but the And the plus X% think at kind of that that look – I modestly if starting margin full minus to Liquibox of year if we if I talked was maybe the contribution, kind organic about at that to the business of point. with the the growth EBITDA factors outlined up. I guide implies on has, look guess then at end guide volumes, two flattish

is just some that up are or anything think we that about should kind flattish of Liquibox of maybe any it? and it, maybe of as kind there as So, or whether contribution more that from side kind on we factors a of that of base cost it’s other offsetting integrating business business kind ramping cost conservatism, curious, of view or the

Christopher Stephens

Okay. the question Thanks for Angel.

– unpack so, your So, let to let point, me me it.

we food protective price, to overall the from benefit think protective, So, where it you on saw for ‘XX. that up that when continue XXXX reported on a some from headwind in benefit you a in both side. food as basis. second FX us in we as about providing as mean the pinch of to actions will last get took I is we year. segments the a volume we continue of talk But price to is. That’s about in well low-single being point level some ‘XX, when perspective it is digits half

for price that we in and expect we recovering, where that first don’t be the continue in have in continued to digit negative will we as outlook We roughly that the the given to the of activity much growth. half XXXX. low-single half way this us, execute evolve unfortunately, first pressures that inflationary of are in year, down We seen so

than to well hopefully bit a – is So, recognize both provides the And as just food piece each Slide algorithm on XX% we something in little color. segment of growing less as gives it, automation digits protective , business that automation X that overlay and then you we for slide is of but supplement. double overall our of growth – expect earnings that that what shared sales,

Ted Doheny

your again second of Liquibox. to And on to Yes. your question highlight just part

simple the recovery. being second is So seeing being half challenge, flat are basically, story first a half year we

cost-out million half, side on some Emile alone, I though in on have if is is on So, the see these really official. the half out said seeing. we of even that of the be on we opportunities we there in is Liquibox. But days good first the are get The moving part is could definitely But we tough model, high cost the costs the quick $XX in working room, conservatism that, we optimism put we guide container definitely we the the saw converting the is that on we It excited second you market. is quick Liquibox question the they the markets right the through the the years. see been the as with the now. Emile are like we it’s are rigid growth into working are are first That’s resilient, opportunity fairly half. X really with markets service. that On in team really about are the That’s think eight and Liquibox the is first of that end side. in to we facing as of just the the

can And in rest the just will I you look more. be So, than for leveraging the Liquibox, do upside, to have going at the that’s we the highlight we again, really of numbers that’s better if what core business.

want model we So, that’s to the EPS going pay debt we it, that’s it to where it, that how mention and what I And quickly but we that down upside on. debt back on just be, focused want and the the that’s should to get didn’t are says fast, the we paying highlight down earnings. to are very

Brian Sullivan

Okay.

question. Next

Operator

our for next moment question. One

come from next the Josephson from will Our of KeyBanc. Adam line question

Your open. line is

Adam Josephson

question. Thanks Hi much very morning. Chris. Good my taking for

expectations what question. free terms a In year? cash pro you as specifically volume leverage free confidence and now very levers guidance, flow? year with and can tell would of How Chris, various there for to just in lot well much. Thank cost have guidance, forma two-pronged And just and you guidance, were components achieve EBITDA your obviously, your your is are I working year last think what of is, – with you. you your your you obviously, the last experience exactly just, capital able say flow are could pull the you me for One a you as cash volume harder much are given

Christopher Stephens

Yes.

So, good.

talked come guidance, that question the to capital that would of right collecting end of in come now, down half for of generation to X.Xx purposes and back a through terms recognizing cash that receivables. debt. of work So, second the using let answer would inventory leverage will our but normalization working about, We at working that ratio pay be also we those reduced, cash QX your getting priority just and one. selling continue improvements – excess roughly to of the to me kind down we overall It capital through inventory, see anticipate that we

some and One discussion, break as view, regional them I through of But guide it basis. the out confident for – buy proteins. that a but our of Asia, got would to we you all, Ted will of top first potential help And initially, is choose that outlook terms full APAC business So, question consumer happens your give what since second on we us our second will see is of downside too I like we to team would we I recognizing that to wanted half, pretty yourself. recently can of line what in be in APAC, upside in in to confidence if back, going let again. resilient quickly to read for somewhat ranges China that’s seeing to down reason terms bullish sales. not – in versus recognize China if on kind is you not continue the provide XX, over listening when to of it of you of to terms half up discussed muted been come we expect – you overall year behavior, on sales, give the specific opening what guidance, highlight Slide to how our well just guys over improvement although in half our us a the have investors of sense provide range, as in we on as are that are we they the we the regardless in Food of most, terms play

the inventory cash cash the continue reduction start to half will first the high. flow. I would we the in getting saw have XXXX. we That would of We the potentially that than what confidence And that we side. fourth in year, meaningful to cautious expect to a the the that, end better of in of situation get are we You mentioned bit getting type And persisting. more protective our other talked it quarter of half would side, profile in provide, the in the protective better is we that’s say our on the every and first free terms metrics year, that But the then little show seen a you hopeful second half about four and generation quarter. occur it’s of element destocking markets. pretty better

gives would do to want when investment we also cost I actions, to actions, that’s highlight conscious our that to think sure help we the about So, us the when are growth. going areas we starve not about what we confidence. that’s very think future make want to

to etcetera, be able you year. we an that sustainability We meet meet to the doing the So spend goals, in next and to markets etcetera. more expect than example, can and we are the prior CapEx, with about things innovation did year our reformulations, we see as think

we We holding our back are in going. not on are where business drive the investments to

Ted Doheny

just give let kind Maybe confidence. of add working to the on the just me capital,

year, nutshell, And customers the six what extended lead disruptions on last than of buying. items the months our were time. lead first by category world our every we single are many to Xx happened across a more in on product lines normal So, times

At that year-end, in build in to the customers starving over did at out the hump more sure So, inventory. QX are softening that the we our time, growth. caught period the inventory end to we peaked market to the last had same than And were trough got started trench. we not we year. we that they And inventory times where got make But in normal. essentially returning peak back million saw started take destocking to from $XXX that’s that the as as lead

the much impacts are through issues bit supply we behind supply are material One but a that’s materials. area those There lead little that. all better, on is times, on long ample piece of second is is electronics but us. managing The still side,

And are we that happen exactly just it rest capital a to working the year. short is and things our a time, It going happened wasn’t what couple through so, happen. last same least. of make story driving at we at the and fluke, power That’s a continue where

Christopher Stephens

Very good. Adam. question, the Thanks for

Brian Sullivan

operator. question Next

Operator

next our question. for moment One

Our Samuelson next from Adam from the will of Goldman line question come Sachs.

Your line is open.

Adam Samuelson

that digital cleanup that the being covered, that I plays that value growth think driver you of coming some leverage and with want pretty and some incremental I then if how are questions, growth about is revenue couple you. pretty of probably A of forecasting? disproportionate be the a item. operating going just Good that in Thank everyone. healthy type is a of Hi. driver that new the into from in the And your meaningful clear a Maybe now on be a I the to is not couched – morning and special costs are to in changes EBITDA just the first, anticipated. of being has stripped I margins X.X, as mix a restructuring contribution mean digital included way being so guidance, out capture guidance been may. SEE ground lot

outlook. like adjusted to $XX be clear in billion billion So, a million of just EBITDA? Chris, there that XXXX the is I want $X.X included that’s $X.XX to that’s restructuring in the

Christopher Stephens

Yes.

So, opportunities we let X.X. Ted SEE comment digital are what your of me let a for second portion around identifying big question, half answer of Reinvent the That’s I much maybe will the as piece. very

that we well XX got What and from the changes guidance. some same – the upside are side, So, buy restructuring months potential on mainly XX SEE for to we is on have reflected as have of we manage years program expansion. are benefits. the that is profile well as as to the on deal. that structural and in have we is months, ago, margin our Page concluding our company for point, the kind structural as how we of But transaction next costs of not Reinvent terms on targeted at it will you the to out XX particular profiled as continuation several Reinvent, what specifically consists dynamic our the execute over to currently we as the that looking restructuring the of continued costs given change to could your identified in restructurings as it integration X.X of cash of is time, we view M&A to continue identifying the in what see control it overall what That we

executing investors that on calls, we are yourselves well will to on particular program. update So, as we future how as continue

Ted Doheny

and track clear digital products, also start with is bringing access have shows on MySEE, and digital trace few coding if is there But adding hitting. our be our as be market, we a things Slide And we the our the automation. increase with and when sales on piece also at customers digital the that highlight printing deployed and our And X.X, where world. very have the we to is printing get letting the the actually our sales identify we is connected on to our we fiber-based sale. digital can as around look and as to able digital some you as the on our about printing, to a doing products we sales that And that corrugated, side, put then equipment with X, into of digital able talked as pulling digital our to our put actually incremental is even up side, you the one as incremental we on would last before actually it fiberboard, packaging digital printing think and going we about, capability. packaging, is The are we digital talked work Digital our our digital other printing with highlighting mark especially actually solutions.

So, opportunities some think there. have we we growth

are our doing are digital already there driving to the that incremental savings, But we we part are putting what engine. we also in as X% that’s the the into model. So, is operating second in

of it’s sending the actually product they and on in platform our customers. Touchless more but designing our online, working largest some product the our have those our us creating to want whether interact efficiently, MySEE, from significant digitally, extreme, As just factories being customers digital and fully we digital like design done not with studios, using a to designing COVID, to are our signals effectively savings

So, happen. and going team And just Emile’s piece our to convert operation. some efficient exciting it’s effective And part Touchless of of a how factories also digital connected we really piece making to the driving additional those is that that sales are Touchless as the a it’s doing of that is with engine more automation. all to stuff big

question. more a time one Okay. think or have Operator, for we chance I

Operator

our the question One Larry De from Maria William will line Blair. Last question. moment you. last come Thank for of from

line open. is Your

Larry De Maria

morning. good and you Thank Okay.

EPS acquisition. in CAGR a why clarify million First, seems what’s and just jump? clarification a run Can a D&A then years. We prior rate, versus X XX% $XXX secondly, you highlighted And the the over question, growth it like jump. invested there, you big up the than seems it did We was years XX% the better the just heavily to automation. like digital, you over But in it next Are growth? arguably driving an X in years. is for step prior committing only X

than So, talk can and it you just that be to shouldn’t over why XX%? better

Christopher Stephens

Sure, Larry.

D&A question, the the into related and we your address me Let aspect. kind growth will of get then

the as reflection of really, investments, in to have made first, it just investments D&A, we the business. a So incremental our relates

we know, you in our meaningfully the increased As pretty have business. profile CapEx

amortization. is So, the those primarily D&A the by jump in driven in investments

Ted Doheny

Yes.

Okay.

the will second I Larry. take So, part,

the challenge then And look again, if slope of on XX%. possible. If model EPS, you specifically bridge, you so as And we as the have rates. – the backward has that last you fast X if at see in the that XXXX we look our do slide, at down Chris operating as interest years in we exactly as being how biggest one pay highlighted said, debt you at the

out where there XX%. look you XX XX% But if slope curve greater growth it the than It’s in that we So, that actually XX. is the at from of had rate. to that target is

Let’s going to go we do. continue we what beat to are say

we possible. that we it there. especially think get margin higher is higher the but continue point, XXXX curve are We XX%, than So, we have are actually expansion, in than as think your dip recognizing to we into as that slope the is to took beating growth also more of XXXX to the EPS XX% we margin model adding

Larry De Maria

Okay.

Ted Doheny

for thank the for call to everyone want I today. entire

to feel Thank of We going the what everybody. brings are speaking Liquibox we all And to the you to in to look and excitement, you the hope it’s you forward about are May. in accelerate us excited growth really future. our we opportunities how with

Sealed Air (SEE) 9 Feb 232022 Q4 Earnings call transcript