SEE - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Q3 2024 Sealed Air Earnings Conference Call. [Operator Instructions] Please also be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brian Sullivan, Investor Relations. Brian, please go ahead.

Brian Sullivan

morning, good and you, everyone. Thank are With Semach, CEO; Dustin Kivits, and me CFO. today President and Patrick

Before our to we and Relations have Please we page. note sealedair.com presentation provided to begin visit from a call, can I be slide our today's presentation where supplement downloaded call. like the webcast would Investor that

us. Statements future solely statements. to forward-looking are and based encourage periods on to now applies this information We These section stating is this statements which in outlook management's review in call, during our to are made or earnings for that the the release estimates you the presentation, call. forward-looking statements slide available information entitled

listed future to reports annual differ due recent reports performance as factors. report a on our X-K. Form Many XX-Q and Form may on quarterly our factors our in Form updated on XX-K most of Additionally, current are and revised on number of these

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

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

over I to Slide Dustin. to will X. the now Operator, turn call Patrick? and Patrick please turn

Patrick Kivits

and you Brian, quarter for thank you, earnings Thank joining our call. third

made progress earnings have I to last a take we update the during discussions, on like today's would we earnings the in Before dive moment to actions call. you our on outlined

needs challenges. investors connected how partners get we our I've and with their distribution largest insight engaging our to into been gain Over few meet packing with to Separately, their address months, Protective, opportunities maximize the shareholder past clear customers' I've a customer's these can and ahead our experience was the it and critical shareholder X into value. on value. became Through verticals, step foundational enhance creating Food perspectives to their that reorganizing discussions, deeper for

and manufacturing innovation assets. end unique customer distinct is business markets, Each needs base, with

are combining offering value best-in-class proposition as We company, differentiated core automation deliver returning to packaging a science, solutions. material and industry-leading world-class our to services

refine our principle. addressing customers and critical remains we As our packaging strategy, a challenges serving guiding their

need focused execution each in the other strong portfolio team bringing drive and right talent sustainable we We have packaging in expertise commercial vertical. consistently sales delivering accelerated profit that to commercial to we navigated progress on companies looking Next, from growth. in portfolio ensure successfully and for leaders shifts while have improved and with place

industry leads ] successfully experience [ the has Protective The of first now in vertical. commercial background. is own acumen, fiber, his who Byron valuable brings roles. hire previous in Protective our of turnaround the in critical business. and was packaging our and packaging he years format He to transitions Byron And strong over spearheading XX With substrate my similar navigated knowledge

growth. a and multiple Steve unlock business consistently sales Flannery [ our Food innovation, will In experience October, culture that robust in of Steve led Head has earnings as years driving sales, ] and XX on vertical. across of has businesses we up delivered within innovations at Dennison, leadership and brought roles our growth. over held He fostering geographies, momentum Food Steve build the operations. marketing market-leading further team-based With Avery and

supply Operating end and Chief and Food to the service Emile those ensuring for markets is both Officer, efforts Protective, Chammas continues be supply chain optimize for levels. our expected prospective chain our to stable leading each

high-performance experience, cultivating as High enhancing a the Officer, [ culture We focus right our will we organization. also hired who have Belinda the the ensuring and capabilities employee Chief across leadership People on and ]

develop plan transformation a to value the partnering with and across Financial me Chief to product and create Dustin Lastly, drive is Officer, closely our business. Semach shareholder a long-term President

[ the as as as [ to He Silicon Tony diversified enhancing also is led packaging his packaging over We are we a successfully Director. President serve team, an value. He experienced ] years Board new look management to the Chairman. executive appointed the Ellett sector. senior In created portfolios ] transformation. Executive in the for and strengthening XX leading Beyond Silicon's Board. Tony leveraging accelerate Chief significant expertise Officer, in where forward our companies to continues he with help October, shareholder

each have now in swiftly I'm foundation to in and trends, customer and business adapt each milestone and to These sustainable respective Food we focus enhance achieving this functions transformation towards build our will to within represents vertical automation innovation, and With operating eager our on Protective significant the their long-term customer continue a growth. market changes leverage our as aligned scale, presence place, execute their global service This we enable vertical. units, growth strategies. evolve to

our execution, to teams delivering and from in markets initiated. fully and would lines. like aligned of early a successes highlight This have driven a resulting Food Food commercial now wins. transformation the performance excellence, commercial our I competitive each growth dedicated product on we some directly product end market new most business launches above each With local of above-market end by and is is actions focused across market mix to

the a to On with packaging Buy, to a of customer, high solutions. announced amount the suite large a in recycled recently of in the content volumes help their reduce fiber-based with provide continues retail the partnership Best plastic Protective traction packaging. side, be our products used soft, to while are virgin in We and we market gaining business sustainable

them with waste from collection collaborated we plastic Additionally, their of recycling. for arrange the centers distribution to

sustainability challenges. needs addressing match Beyond this still critical example, we our to packaging continue to while most their customers' position portfolio our

we have us. work ahead much more of that said, still With

of infusing work couple On continuing vertical. through commercial we focus months, portfolio will execution operationalizing each Protective, next are we improving to talent the organization. on the Over gaps, sustainability-related throughout and

our are dynamics. navigating we and case-ready sustainable on business and improving Food, solutions, bags liquid growth focused fluid of accelerating On transitions and with outside shrink pricing successfully packaging

initiatives and profitability. overall each price and volume takeout in improvements we to rightsize cost our performance, see are drive vertical accelerating we further Until

over Helene. impacted path update, it take South for These North impacts many moment a their of and plants business of X,XXX like to affecting infrastructure. our hand a across Helene's I of aspects to many employees. to experienced locations Hurricane Carolina would Dustin and Western Carolina, challenges the sites discuss I across Before over Hurricane

quickly mobilized of; that ensure team to Our families care restore operations. our first, their second, to and taken people and normal were

customers. communities our members on company. to really these our kept impact together operational other's witness was to each inspiring their one safety, our It the to team team Despite and quarter challenges, and ensure us the our another, and come minimizing support

XXXX that, I'll turn our February. forward over our With and be an outlook in Dustin? excited to here you I'm to and the look on to on it give to and Dustin outlook. business updating transformation update

Dustin Semach

Thank you, Patrick.

Sealed X% quarter last reported performance. on review of with the each compared Air's $X.XX Let's year turn Slide to million, sales We billion a and basis. adjusted to quarter $XXX X down third closed EBITDA to of

Our performance cost third continued initiatives. a quarter strong results in reflect benefits, challenges including persisting Food, our solid and in takeout productivity Protective

share in of to quarter X% the earnings $X.XX compared up were a Adjusted per year ago.

rate the in income tax decrease tax was in compared The and the was same prior mix last by year-over-year period items nonrecurring year. of the adjusted Our in rate discrete to jurisdictional driven year. XX.X% XX%

was million. quarter in of Our third XXXX weighted diluted average the XXX shares outstanding

pricing Turning XXXX a to third Protective the was pricing year-over-year segments. by third as were across to diminish. quarters, X. Food negative both sequentially In quarter prior On the actions Slide quarter, sales basis, relative organic less the down to from and lower carryover pricing X% driven started

by the offset segment declines in Volumes growth Americas with across all in flat year-over-year regions, in relatively were Food for and EMEA. the quarter Protective

lower approximately by volumes in in Food, or productivity Third year cost last initiatives. EBITDA $X and by with favorable basis price compared adjusted partially lower Protective, including net performance quarter of unfavorable mainly and costs, realization million net million mainly higher was takeout of down benefits, X% points. driven driven offset XX.X%, and decreased margins $XXX realization This XX operating volumes by price to

Moving and driven volume net Americas by more protein X%. pricing the gains for of EMEA primarily positive Slide end Lower offset bags case-ready market solutions. within in million X. and were demand by to and our growth in approximately in Food strength than sales share was all regions, up quarter $XXX

X%. net approximately protein quarter, were In by markets the the third global positive

production by U.S. Continued declines Meat outbreaks robust strength consumer demand increased in cycles, in flu caused further stronger-than-anticipated markets, turkey in than pork Avian offset poultry more protein production lens. the and demand beef we Australian affecting competitive flocks. cattle North American drove

in high years sales, retail previous caution solutions recovery Our stock space share to deploying customers offerings case experienced where gains market ongoing and lending and resin in roll the exercise with the share the business single-digit however, capital. continue our by growth, as shortages lost trades Protein we declined rate in due to driven by of

year. by was growth quarter XXX third adjusted million points XX.X%, Food increase The basis adjusted with to compared the volume net of EBITDA margins $XXX X% was EBITDA last at mainly realization. driven up price in in and up

Transitioning Protective. to

Third quarter void-fill portfolios pressure by as world. lines. automation developed XX%, sales in in guidance. to portfolio down the weak $XXX net has in slowdown were declined Industrial anticipated in continued of remained the million manufacturing QX approximately our Volume product subdued activities and within X% due equipment fulfillment driven

product quarter. volumes the largely in the regions, ongoing weakness lines, box in performance on sector grew automation remained in approximately Americas industrial to the and impact In the rightsizing EMEA APAC continue our region, pressures fulfillment and Sustainability results. negatively automation in from weakness and void-fill In our gain portfolios. as sales X% the prior offset industrial the volume quarter lower unchanged

down was approximately volume by driven Protective XX% million net price margins down XX.X%, unfavorable adjusted cost points. at including by basis adjusted benefits, in EBITDA offset of partially decrease relation, year-over-year The -- lower initiatives. EBITDA takeout productivity was $XX and with XXX

declined sales lower driven softness an other in gain and X%, offset fulfillment protective down portfolios. our strength [ organically, by Protective. EMEA due driven organically than third Volumes by X%, in in Food. across pricing On as by volume in primarily cycle was by portfolios, cattle America Australian was continued pricing. and both automation partially from quarter X, continued On ] review X% offset we APAC up X% to Slide net Protective region. organic were and pricing basis, our lower more the tailwinds in lower declined segments weakness down

leverage to Now X. and cash Slide flow let's on free turn

year-to-date. $XXX teams the efforts resolution our we when tax excluding the quarter the This deposits of ago as payments around flow million year is $XXX above cash prior of certain and third million well strong of of U.S. the year's world, a free With matters. focused for delivered

focus year-over-year a we sales basis to XXX payables inventory which as continue teams points Our by velocity. improving as continue has working and improved on capital, percentage improve to of

and the We quarter ended X.Xx. of ratio on leverage the our net deleveraging maintained balance a focus sheet with

liquidity remaining position uncommitted $XXX total $X.X fully including revolver. was Our the billion, and cash and in undrawn million

net our of below of adjusted to achieving in XXXX. debt We EBITDA confident the are end highly X.Xx by target

to Slide XXXX to our X turn Let's review outlook.

results quarter third with line Our were expectations. largely in

expect At pleased the We and our continued we to Food in momentum are soft continued this business. our challenges the fourth remain dynamics. volumes quarter Protective due with portfolio market in overall to point,

a QX expect by year-over-year up Food our weakness be slightly Protective. in being offset strength As we partially QX the in result, volumes to total, in with in

Heading our into of midpoint approximately with sales we be performance the volume billion, quarter, to expect businesses. for fourth $X.X third both slightly quarter year-over-year sales versus the levels the guidance improving consistent with

to continue cost driven range, the with mainly adjusted in midpoint be line guidance expect actions. control our to of We continued by EBITDA

effective improvement driven $XXX the amortization by We capital. range, midpoint deployment. also raising the reflecting in be to capital discipline rate to lower cash EPS and of tax at of flow depreciation adjusted the and improved expense, our of reflecting around We're free million, higher working continued guidance the raising are previous expense, the midpoint interest end

This working and transformation new will months each We each and the outlook beyond. be for fully with accelerating will the operational In form our growth over profitability. cost meantime, XXXX operationalize plans strategies and for to we are drive business. team inform vertical our initiatives coming the reduction management the to and excellence

XX. into Food I'm their very verticals Turning excited reorganization Protective teams. and the leadership to new and about Slide

have taken and success. growth and we as As for position long-term Sealed earlier, each business the whole a Patrick will mentioned steps transformational Air

With look that, to your I we the Patrick session. like would to questions. and forward begin Operator, Q&A

Operator

line [Operator of Bank Instructions] America of comes Securities. The the from at Staphos first George question

George Staphos

on in is out. plays question Protective quarter My fourth particular, how and

down be, I'm a we're analysis fourth sequentially if nonetheless, quarter your tends bit at versus over in So to quarter. XQ. correctly better year-on-year time, on and And doing the based guidance, my traditionally, both looking again,

is weak. Protective obviously

in I think though, segments should said, and up you Protective. Food both be volume, sequentially both

versus in growth in it's or happening, So you fourth particular poly, fiber addition, you're talk seeing about a can between last ago? what driving bit you about And will, quarter talk that assuming year kind within and you further of and Protective what can year in -- little if Protective? that's is the

Dustin Semach

here. Dustin George, you have

$XXX you to step So million at you're in So a if we of to at look of full for comments clarify seeing kind million, million just year. Protective, to about both at $XXX of the roughly coming look guidance they're million the going roughly for fourth the you When you quarter. quarter think you're $XXX When couple landed up quarter stepping off and one we'll think be Food, as up you sequentially, the right? businesses, QX in looking about the $XXX QX.

and the X%, sense X%. is it the imply commentary QX, fact That actually be but down QX it's down in going performing is -- would we're we're that implies still roughly better to that roughly we're around down, the

one And step the which in we largely to we get seasonality, being holiday do up that? in season, point strong, be sequential the that you U.S. Protective, this so driven what's see perceive associated -- So in particularly that's is time, still by at driving with

that reflected particular that's in so And number.

you're keep The business make I'll better portfolios. But the size, and that XX% poly, at in commentary fiber in this base. of still performing versus poly. we're be going compensate the broader it specific is able in relative Protective it's to other than seeing to not Fiber some to that declines fiber growth to our that in at relative about only just looking mind, is

Protective, how other But point to is mind, I'll all was clarifying or that, keep relative are behaving. the in in too, just make not of that equal the each portfolios

and the bagging, be If that you auto look well and/or poly, performed is -- mailers is year. -- could at our APS the throughout has business, this performing the fiber

Hopefully, as inflatables, related answers they're in void-fill, think It's to areas we've cetera seeing pressure. of that you other specifically that your about we're question. well. et If just performing portfolio that

Operator

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

Anthony Pettinari

following parts you on when Protective? to don't And just of might on to it George's question, see is it overall business, when a needle declines to there enough directionally, then volumes does point flattish ball the possible segment volumes? shrunk void of is fill looking comps even -- get year-over-year a basis? Just up where a a big to when that not kind where are you on understanding update kind at of crystal is have maybe economy, year-over-year point expect the on move And in automation just easier

Patrick Kivits

It's Patrick.

on start me hit a think as saying, Just let by reminder, I doesn't that.

the size void and our this roughly is XX% of total. where So right? in fiber is it So mailers, roughly of of Protective, most the in place, takes that's the business overall fill transition

commented not that And opportunity to look people the changes this had I of if pivot to their you drive all on on we obviously, in of -- -- as have space. you fund-based if at towards in visit many -- that market. will actually Chicago. seeing the in the we e-commerce you're in So paper offering exhibition of will, our focus existing how all will a week offerings, we And surprised lot space, we offerings more the continue

the in do back in do one. at this February. It's you mailer good this on too next party the little in think offerings point. space. in showcases will tell months, drive couple significant to We'll we win, And further the much I which offering Best with actually come referenced really that late of our been Buy the have is to early to one, that growth a how I to space may which fiber-based bit a is continue space. that, a that So we yes, really But will to

in scheme at to a vehicles changes these the order But of go-to-market in grand space. we're things talked that side I portfolio of using our drive in in that turnaround our shift to about

Dustin Semach

-- to and so And couple on a just comments. Patrick's then of follow

back those we the then the and market. understanding with better out in in forming script now, So plans just playing transformation Protective how across overall to a months growth XXXX the we will going coming strategies around idea comments beyond. general, in we're February working see points about of the have But right the fully and

void points specifically beginning the Keep in of next mind year. about but of fill at going terms loss in that. then void than about fill talked couple into of you A in Amazon made the was benefits further the year that guidance, our specific deteriorated

You going have to wrap. a are

much is to next just this into large fill going void year be loss. customer comp than the because one, going past So year you're that better that in

due dynamics And ratio in cetera. are this it's has extension general, in great an more both challenging et cuts, to getting this what of our and Protective of about question. market year We et that's rate lot been is a year. capital automation, Food The has we've then been seen favorable And deployment, with last A largely year book-to-bill cetera. across talked X:X.

And implying much and we benefit our which flattish growth backlog a also materials space, relative better ability starting that automation to to XXXX to a were our from our in point perspective. into coming so will drive in

give we'll of the So some we're us back going together this time, over put couple and all next to months. come and

Operator

comes Ghansham question Instructions] with Our [Operator Panjabi Baird. next from

Ghansham Panjabi

wanted the model for you of be also, back of X structure to leadership put basically was the what and And changes you've then operating companies you out in a do there that this had announced expect including will positive few shift, coming into place a operating shift? Are distinct Can just us years there? changes structure historical to just basis? in shift sort to a go back verticals. I context the on that the of going you back a change

Patrick Kivits

Great question.

very, this about and this not of by really and organization, we deck So vertical it's portfolio, I organization the right? shares. of make towards focused those are so I'd a not different a clear. that our more were the organized of at our regional rearrangement rearranging look changed a back earlier. start we different is this model But market, let like -- is the shares, a going XXXX. end way proposition to to the We value as to Because just So just very going to verticals. it's me as mentioned saying of tax

areas the to is concerned have is by to this mention like -- that here in basis, up And wake that growth a on in growth important the we drive this day every about responsible where to to This came to they're people vertical What for. is worry doing would be common. is things that where I strategy. people

the What is been we've But important sometimes And it's or sort defocused secular maybe day, of were -- hiding on aspirational, themselves. couple in new had go-to-market the great that we really the last years, problem of we the by end have, focused we of initiatives. visionary Protective. decline sort that real it the of the on is these was at

moving So met e-commerce our got we were maybe partners ordering maybe we're with through from the go-to-market some through starting really distribution and online our that at I last tools. that, alternative away in that perception them to of right, of months, because couple we're with the looking that channels, to compete or

very their with salespeople and salespeople are really It's go-to-market [indiscernible]. the can important drive them have we we're not Rob to with whether that all getting the feedback get of say And of reinforced traction easy how why to or that's a part our implement. our -- we strategy. model me And an message they

important is So one. the a very go-to-market

fiber-based the will and The portfolio very plastic-based the strongly shift second before, I pushed in market. from this continue as be the to offerings highlighted organization into offerings, to one,

Protective Food towards approach predominantly underpenetrated. the and and more you those the that changed we areas growth will see, So on are side in the market further we're side, drive in that things portfolio will also currently change

Dustin Semach

proximity. closer is And talked customer the just shifts specifically couple to customer Ghansham, innovation, a Yes. complement of Patrick comments to service, about is made -- we getting to

fundamental back reorganized shifts. you side. itself are been go So the that X then improving innovation to has stool Those on in -- service. specifically customer and X And service

improvements associated within it see because you the today with shift comment in keep it, they the expect in already the when model earlier made around operating year. you kind And the mind, of we Food made

We're just share region perform. regions and business about in but Food one the all not most talking or line, lines. gains, seen product product across You've one

from of in more as alluded in as to Protective there where that benefiting and going we'll February. Patrick's continue -- already clarity to plan there lay go-to-market Food's of and and shift. focus change to kind that's around and February, give comments So in that There's see the Protective the portfolio and more well a the we're you between transformation out focus now

Operator

comes Stanley. The question Morgan next with from Diaz Stefan

Stefan Diaz

the Do remarks million then takeout an that stepping taking cost $XXX you you highlight And you in initiative. I if previous also have believe additional the up you're prepared $XXX number maybe So some CTOXGrow number? mentioned the cost actions could as versus of update million. for was the takeout before? to far as

Dustin Semach

Dustin is speaking. This Okay.

we you of G&A, that original part chain, million to number go middle million back-office back areas of back it's middle $XXX optimization, -- as largely on in the is for across announced This supply network program, right we're to our the if talked touching to related track intent savings this as we We're go-to-market later noncustomer-facing. So about we $XX takeout and now other million, of talked buckets, about the to cost related XXXX. of of well of different it to across the a as right? $XXX

looking step on $XX to about going as in execute we drop next to continue into look go million. we've QX up Protective what had it so that was you that. next And now And and if the year. And to year, in QX, was volume we we reevaluating that roughly originally but how we're talked and be

complete intention. that over our that's will that be into the of and kind But landed exactly what the work to haven't We X X next for on factored will outlook months, be, will XXXX.

want year. that through is through baked going to then least will driving leave that right? message we, continue we're we of amount point, that. on actions taking at I we're this So already And terms And we're determine another $XX x be profitability, our next that of kind working another roll point. million to in at with main the to to have that that you in, commitment have That's

of is those being so in the And that's we buckets Protective And a relative because about. of it they're that say same due each of the of on, to those great terms that to to talked that I more largely in the to areas now able Food benefits on models each But we're than individual one moving structures focus of focused would individual to there's better businesses. performance those we're is cost going to understand vertical. aligned really primary

Operator

is Spector from [Operator question Instructions] Our next with UBS. Josh

Joshua Spector

I and Presidents. segments follow again X different of around up the comments wanted some on the to the

talked how you you in does any I change good at that to to So anything? Protective willingness about or carve-outs see. months there? versus X, guess, So is more, that is are divestment about maybe investing which look the the Does ago? lot you're question X So opportunities a I this side, guess it. improve operational really thinking within strategically, change your to today

Patrick Kivits

I question. think very a good it's

offering right are laser changes that the the We So the moment, -- confident are path direction. at going that do We in into focused we terms the go-to-market. fiber is on do all of from that the believe that right feedback on operationalizing making. distribution our we're of partners the we're really we

trying address of The the with this been we've verticalization. sight, accountability, to issues are that those clear line

of So do our have to I now business as lot we opportunities think right a we forward. go improve

maybe on in that -- much. into opportunities rationalization or We areas successful footprint that for will where always think look growing not or future we're we

I very making, things, But we change where today changes in in of with scheme going the comfortable we're of organizations. the are are those drive all to are we we grand think and

Operator

question from Truist [Operator Instructions] Roxland Securities. comes Mike with next The

Michael Roxland

business the quickly, that separate wanted that these fully Food. just comments out And quickly Protective, you shifted follow such X now Just do you operating on up on would units. if there to But be you be parse to I would then distinct were established the verticals. minimized? -- each how Obviously, to synergies on

you going I -- up is we you've the XQ, exactly occurred progression in during around been allowed be? that In how you margin that should think XQ? XX%. round And Food XX.X%. think quarter about What to margin about

Patrick Kivits

Mike, question the margin. I'll and great Dustin I'll the let on question. verticals, the answer start with Food

in So putting really there for verticals changing back the operating changing and about place is organizational the our reason or the effectiveness. model

I earlier people So mentioned We up wake sight. a that to earlier they're areas create -- day clear to for. want every responsible focus the of line before on just you

matter in last create with clear where lose order that's accountabilities will think market structure We with P&L subject I experts years. couple in we been because in not the to traction of have the

have the without where finger-pointing. doing responsible having of we that a longer The are benefit we situation something that's think that than need verticals individual one for that, we have that develop on based trying start in customer and we innovation is our no to innovations And rather means actually that now we asking. Rob, you pool have really customer

the this. premise So that we're is doing basic

the focus verticalization real get to has that optionality operational future, but stronger Obviously, in a driving been effectiveness. on that gives the us Dustin?

Dustin Semach

at to as look giving And so back to complement chance that that really and very look in back business a structure needed is and to going and for the us really way. the it are, take different cost reorganization, a really ourselves prior well. way a to a that take it what step growth we just statement I support each that our comment, the expectations at Obviously, through made ask going is

long-term back is how Food dis-synergy we maximize them as the operating. today how And and get confident value opportunity standpoint, the to both from less so I'm do individual have highly of it of which business on we growth, I sustainable businesses that a in think driving based each demonstrated towards already

margin, right? to about this we benefited volume We it. growth, Food And year going from the back talked

We lines. are driving across themselves, volume the the growth different businesses regions, across all product

opportunity network. an creating for across utilization our You're higher

margin come through seeing in you're so the And pull-through. that

right, where XXs, operating. business a -- you're point We on difference the of every to low expect operate or depending X how you that could have still quarter in

but of right Patrick now, we going and in any that, expectation terms beyond And the how about terms that think so outlined -- in areas can in forward of above unlock reinvestment would earlier. growth further to economics we continue

Operator

next The Wolfe with Research. Instructions] is question Chris Parkinson [Operator from

Unknown Analyst

looking on you the what you both want protein volume interplayed products I and walking 'XX. in in for forward? delve success and fourth mind new trends, of through and X Chris. It's the have this substrate of expect Food Would quarter sort Andrew into to those just quarter and going into how

Dustin Semach

make Okay. to X% a kind you're the at that driving It's really volume QX. of underlying pulled couple in growth, X.X% back perspective. about forward QX, tomato into of right? season of talked about And forward again, have a We reorient some pull single-digit of strength. that Just talked I'll low we in comments, overall. QX, Food of from would looking kind

a performance So again, QX, in QX. to similar expect very We're strong. going

year, next in to is more relative would that's say coming be bags. One thought bit of than this little has it year. U.S. mind more XXXX. I And we'd to year year headwind from impacting to keep much we particularly one into actually slight been heavier that going but the -- be QX about become better the cycle perspective a higher. a big to it's volume, in been going changes going in been we the is originally going market -- just market a that that that see this into our you're anticipated talked a going market challenging was beef and into a where But

in our our EMEA I there gain lot And as and pulling through as to in Latin is the beef well, you're that that, QX of talked share would and just with seeing a of strong well we outside But business ramp being American cycles well. is QX and QX. continue in performing very as that about competitive you wins up that competitive very QX volume tell

outside as the year, competitive market that of a And in that beef making wins is so just the proteins, our dynamics also number lot terms but product impact. you're we're bags QX, expectation stock we're just U.S. lines -- momentum into as of of delaying well evaluating continue this better albeit a our business, XXXX, progress still will we'll those the that, different across into of some our core -- recognizing the

that, outlook You're pushing means understanding through we'll have the business a and into better still what overall working we're and our that further XXXX, it to of February. and in

Operator

[Operator question next Arun Markets. Instructions] Instructions] Capital The Viswanathan, comes from [Operator RBC

comes with Rodriguez Edlain Mizuho. from question next Our

Edlain Rodriguez

Just the and you're I new course, for guidance. of a the about mean to quick that's one firm. Patrick, me,

your -- it's like expectation. a So been third have where row you is quarter the exceeded like this in

for the likely conservative for it's prior the XQ Like is like driving the that it initially uncertainty different So expected? is X quarters. you what quarters you is But me that? Is from? a as what's what's very visibility? results months question question from the volume coming as guide it a of expected making just Like than where of higher before Is cost? couple

Patrick Kivits

Yes. Great question.

development is Protective. think as in QX, into the I volume we went about really this

volume situation different a I think in anticipated the Protective we business.

strength in our and we're the in very certain uncertainty we the in We see guidance think the despite our had really hedged that's in cattle certain of the Food I But cycle main there. regions, well going day, strong forward. is terms headwinds some which of at to of business, end continue

Dustin Semach

Yes.

if point So on I One a our look being to around line, I'll of relatively comments was say, relative relative the expectations, or meeting complement couple it to would your expectations. tight, top at there. is, you QX

thought that came So in in Food. well way as as we Protective both businesses the

line, we're bottom coming the some how leverage cost of the plants there are our On terms and that's that. some from timing optimizing and takeout benefits, of of of the largely and in within some

to would QX, again, it's say at more if look and QX. QX modest relative you I But

worse QX, from I And what's Protective we business the the into gotten as better, say so original tell right? and our better gotten to has year Food our you and business out if would year, expectation. go our of throughout the beginning played you back and that has better actually go And

L-shape changed, downside. go some towards the you of the And the inflection to outlook our at in back we QX. more end that of have, right? year, If has been QX, would That's recovery, beginning point, an in thought particularly the but

challenges had been working weakness we've by we're in in portfolio strength So Protective our has continuously business and Food to our the business offset the due that the through.

guidance. set And up view to our so me is of that what's

QX, actually we When towards at expect what look that's is we to that think guiding we're we what happen.

of And so that. reflective it's -- that's

conservatism not intended per be to it's So se.

Operator

[Operator Instructions] Our with next Fargo question Gabe Hajde Wells comes from Securities.

Gabe Hajde

I'm going to try one more time.

protective. line in versus And I speaking, in sequential You you worse talked some kind it of know a price/cost little Dustin, Protective. strengthening was maybe or was bit seasonally Protective a actually fact, Food positive. number, for gave top and about Food, for us

give fourth discrete But is on you these then of which range. variability -- the the working anything will get to $XXX the there some the impacts could working that to desired be weather capital know million, on us with quarter I I wider be, maybe then obviously got don't appreciate level, of that, once alluded that we or you you it probably be is or move mindful then that unwind EBITDA we haven't think when your the hurricane us? flow still quantified but and it's capital in growth next than is cash that side? something So Or stable is that know And for for maybe so to into should company? there I some will year exactly related. insight in I

Dustin Semach

Yes.

appreciate I -- all all that Dave, so And those commentary.

don't their that's would has Hurricane drive this testament. did. see that with impact the and really Anything start the as a at a happened you our script, we our factored There's to really to Patrick that earlier have. We as believe QX. time. discrete to guidance Helene related business. teams have the far So material let in events made to point been in they into that ability everything remarks discrete And testament that's me no

really that. we're So pleased with

Patrick Kivits

build that, Dustin. And maybe on to

just right? able think manage you I days pretty business well. end if to of hurricane So the quarter remember, happened quarter, we the were the before X So the

between just end of over . costs a of carry day, the the were it wasn't the some So these X material. quarters, but at

Dustin Semach

flow from from what is committed to pleased able to I drive really flow, of right, and other as the so free been year. been year. And a that comment. kind we're which as Look, expect capital and always comment relative next would this cash we're to adjusted be to to net working we've what we've free And we into well committed shifting conversion there cash high the the the income what into driving same going make

As you as in last low, have factor gave pools, on think reminder, step-up talked in a at of year. at the due note, this million right, about adjusted would have actually a for you XXXX. restoration would which outlook guidance if I those and compensation, going our And the from the during EBITDA pools, -- of our year, compensation it and that's benefit onetime executive a also that midpoint, very to our we of fact, in positive X,XXX $XX it's compensation the you a and expense played The year is look we're be that's restoration fact compensation benefiting original right? -- factoring remembered this we're that the the to

inventory time. a least next I bonuses probably expectations, at point be fact next we'll line year, in But little see still because expect do we'll at working opportunity -- out factor don't going would normalized largely this that say we more of paying bit into we in in So now. the There's year. in it's historical capital. with

at conversion. point. ability and commitments and expect the And intact I within that be outlined, very a expect will this strong based still so hit our cash still and outlook this our fully determined, on it's we've flow. And year year still we and think very somewhat high delever we we free It to expect once we get wouldn't for profit we feel to obviously, February, next control that -- our

Operator

next The comes Jefferies. Philip with Ng Instructions] question [Operator from

Philip Ng

guess Congrats pretty a would high on I has been for I say the Food from demand strong level, quarter. solid.

is So Separately, be there out fairly sorry, price? competitive scope kind to you maintain pricing we for to your color my Any to trying on Have the to actually those having price/cost is is businesses? flip XXXX? really, landscape, positive stable. X a net look question get seems started Dustin, in -- Protective at your to when I'm conversations? ultimately, So price XXXX ability of positive of there opportunity either in for in I'm price/mix

Dustin Semach

Yes.

as you overall guide flattish, individual obviously, what appreciate of business. for low for obviously indication the at of of terms if the which it I you're kind year. So what's said, our beyond really have price/cost kind in dynamics the relates question almost price, right, was commensurate that And kind you each down going to positive correct. also is single-digit in the And volumes, look with next QX, of into a is come quarters, prior you're we X in seeing implied spread which growth very

see we Food There -- largest to than business sit next going today. we processors, into businesses favorable are their year. the year still some pressures dynamics of we within pricing industrial going more But the some where into still next related particularly in

say about lot we reducing and They've stable year, that, volatility. that. obviously, talked that into big been I'll a Now a and the factor very input of positivity are caveat around costs, resin costs obviously this

be better going And effect over year do XXXX. dynamic thought to so we pricing still To cost kind through in of will had that is we think through. going the of X extent the next working Food, we're a And for next what wraparound be than to months. kind X

that are kind [ bring resin down 'XX definitely the a the supply 'XX On pricing of It's things ]. terms Protective, the in number across a because of on still but through into chain, really right? reductions there happened of price, due comes lot of working down price narrowed to

effect. wraparound that So

again some but to to the degree. it to similar feel not still quite You Food, but it's narrowed degree, same

next So into tail about a see X% which reduction will you'll year. obviously going have in a price in QX,

the particularly in where A we volumes. void poly, talked lot areas of from dynamics, that Like that deterioration competitive about is in coming fill. have you

right a So now, in there's volume pressures loss it's there's just competitive a across the volume but to less seeing landscape because that lot not there, more particular pricing area. that you're grab

what down NPR it's will XXXX. next this down year, an from but -- seem -- a -- improved just if the extent, a million throughout as the more we're into in negative does than to overall, $XX relative we you in year. we're it To year be and that about we similar experienced to reminder, mean positive positive again, But going be vein,

So It's a better. to question. expect TBD, great but we be it do

Operator

next The with Roberts comes [Operator Instructions] from question Raymond James. Matt

Matthew Roberts

days. spent I to spoke about talking of distributors Patrick, and here. try lot more maybe last customers say many one over couple you the time to of know in we did I'll a get you fiber, but

understand erosion where products it new long could would seeing or commercialize would what the versus to And me in your there to areas? that mailer what expect investment maybe the lacks So ramp see? you're void-fill take products of help up? in any those require How of stop peers? we specifically and mean those changes are to it pipeline fiber product I type to

Patrick Kivits

Thank you, Matt.

start with the mailer side. So

actually is of as -- with protection replacing mailers mailers, So on inside, the plastic perception traditional the the you different. you're of bubble wrap will, the those the if products very

people compromising actually plastic protective so you important. moving from is products mailer As from actually the fiber-based and that -- very are nature of fiber-based to

in a into bit offering protective the wasn't I way. it's came lacking at of the competitive some that perceived though in of think as one offerings, organization we've like alternative is I theory, our little product as things the looked our market, even and So it the been as

that sales actually perception some better actually that and launching and us So a there's that protection in out can moment we're are in get a the and mailer drive actually prototypes the market. the we're the we condition help good on And can working at space. in so very that

are pressure people think as because is far a -- a se. has I void goes, mailers quite to focus design on because per been general the the under void our and filler bit it's such out in as the trying challenge the void terms, So

but different in need. growth solid kind the do getting about you really sweet you it's the very space, volume what all the protection of in there is in Now of still terms of applications terms of spot have

critically the it more with but again, there important, automation. hand-in-hand is going So protection is

question around kind of go to require. So the get if timing you what your of things, to I'll and it does investment

offerings will -- quite So of a have mills timing substantially. we we in lot sharpened of the available, because the fine-tuned offering paper go already the pencil that have and faster

that is faster. So

comes investment, I intense, It's as good it the for we're a capital investment. capital on capital as not position business. our the think to on instance, When Food in

automation to paper as far easier an void interplay you're then between filling the it's using. implement. So goes, that more and as And the is this

So that terms little effective. portfolio change is something of that being will our be a longer bit in

Operator

George Staphos, Bank [Operator Instructions] of comes The from Securities. question next America

George Staphos

It's on Protective as well.

the So focus could we're with going-forward on The basis? Relatedly, that a large the or sustainability one, if care guys but smaller what street Instapak us vary depending the to on the distribution talking much, in help on poly distribution are maybe company views you in incorrect. guys, in that. as is don't is or your understand portfolio e-tailer a for important this how smaller does affinity more fiber imagine, whether would terms but on and versus a one? of Protective, I

less competitive? fiber And nascent because you then your price it to this guarantees time? time transformation the no less make you plastic, Do makes you, more more business pricing for or more still it's versus it or does over if lastly, move here think fiber over you as days move to variable, recognizing predictable

Patrick Kivits

George. Great you, question. Thank

is difference are touch Those products with into I So more really So biggest -- that let space. the consumer me the go the shifts that I between start industrial where that the products asked question a see. and around you see more

is but comes consumer. Yes, between to actually larger differences touching there and will consumers, products it when it pronounced more smaller be

question. And back your goes Instapak that to

So more out want is our and industrial products industrial space because by into going the price are and in the higher Instapak of value get less who typically segment consumer sensitive and much much typically more paper. hits -- preferences driven heavier, poly more to

simply very have less important recycling Instapak industrial. So is area is portfolio. different of we the That protection. the these is from is ballgame important that recycling as opportunities products products is fiber-based the because other our these shift consumers is the areas thing part a are level will think same much an pressure of not And in you curbside that move fiber-based I actually than for give forward, a an under plus that

So feel more price is available. sensitive more and does recyclability

So much of different the but the larger not. there view, a believe consumer do product more necessarily as and segments, that point touches or space, not small of the I from between in terms difference is where in the

So the pricing. then bit a about little let's talk

important fiber-based drop agnostic. to I saying we That alternatives, more us am develop we have is that So subside really become I more talked develop that that? we very as our it about why a in. equipment we is as And important

have choices. customers So

use or whether that use So we alternative, have poly opportunity. they they do fiber-based

expensive by on how the a going product material it's than to now. use Now of that side, used product. a have typically, more to much more just fiber-based Customers be poly nature paper choice

So products, the use have the price option and fiber-based critically predictability go think we're them else. people want can using fiber-based is what they do is in that go shop offering of today. drop as potentially the But to a organization view. somewhere don't for relatively from to in, important I stable more that we're They that point that to us an is equipment just

Operator

to now like session. concludes to would Kivits, the closing turn question-and-answer I it CEO, back This for Patrick remarks.

Patrick Kivits

to forward Sealed And day. the challenges make I'd to continuing we Thank time their quarters Air the over I packaging to thanking you efforts updating you. for most the close thank on by every like our customers' critical team to Air. are Sealed solving I'd like for progress lastly, the in to everyone today. global So look coming transform

Operator

today's program, Thank the conclude conference. you does you and for your participation This disconnect. in now may

Sealed Air (SEE) 7 Nov 242024 Q3 Earnings call transcript