Core Insights - Sealed Air Corporation (SEE) reported adjusted earnings per share of 89 cents for Q2 2025, exceeding the Zacks Consensus Estimate of 72 cents, reflecting a 7% year-over-year improvement due to better operating leverage and business optimization [1][8] - Total sales for the quarter were $1.335 billion, surpassing the Zacks Consensus Estimate of $1.318 billion, but down 0.7% year over year, with pricing positively impacting sales by 0.5% and volumes declining by 1.8% [2][8] - Adjusted EBITDA for the quarter was approximately $276.93 million, a 3% increase from the previous year, driven by lower operating costs and productivity benefits, resulting in an adjusted EBITDA margin of 21.9% [4][8] Financial Performance - The cost of sales remained flat at $929 million, while gross profit decreased by 2% to $406 million, leading to a gross margin contraction of 50 basis points to 30.4% [3] - Selling, General and Administrative (SG&A) expenses were reduced to $184 million, down 3.2% from $190 million in the prior year [3] - The Food segment reported net sales of $896 million, a slight increase of 0.3% year over year, while the Protective segment saw a decline in net sales to $439 million, down 2.7% [5][6] Segment Analysis - In the Food segment, adjusted EBITDA rose by 2.6% to around $210 million, supported by lower operating costs, while the Protective segment's adjusted EBITDA fell by 5% to $78 million due to unfavorable net price realization [6][9] - Currency fluctuations had a favorable impact of 1% on sales, while pricing negatively affected sales by 2% and volumes fell by 2% due to prior-year customer churn [7][8] Cash Flow and Balance Sheet - Cash flow from operating activities was approximately $168.5 million in the first half of 2025, a decrease from $313 million in the same period last year [10] - As of June 30, 2025, total debt stood at $4.34 billion, with $1.2 billion in available liquidity, including $354 million in cash and $830 million in undrawn credit facilities [11] Guidance and Market Performance - Sealed Air expects net sales for 2025 to be between $5.1 billion and $5.5 billion, indicating a potential 2% decline from 2024 sales of $5.39 billion [12] - Adjusted EBITDA is projected to be between $1.075 billion and $1.175 billion, with adjusted earnings per share forecasted at $2.90 to $3.30, compared to $3.14 in 2024 [12] - Over the past year, Sealed Air's shares have decreased by 16.8%, compared to an 11.2% decline in the industry [13]

Financial Data and Key Metrics Changes - Net sales for the second quarter were $1,340 million, down 1% on a constant currency basis [27] - Adjusted EBITDA was $293 million, up 3% on a constant currency basis [27] - Adjusted earnings per share increased to $0.89, up 7% as reported and 10% on a constant currency basis [28] - Adjusted tax rate improved to 24.4% from 25.5% in the same period last year [28] Business Line Data and Key Metrics Changes - Food segment net sales were $896 million, flat as favorable pricing offset softer volumes [30] - Protective segment net sales were $439 million, down 3% as reported and 4% in constant currency [33] - Food adjusted EBITDA was $210 million, up 3%, with a margin of 23.4%, up 50 basis points [32] - Protective adjusted EBITDA was $78 million, down 5%, with a margin of 17.8%, up 20 basis points from the first quarter [33] Market Data and Key Metrics Changes - The U.S. beef cycle saw a decline of 7% in slaughter rates, impacting the food segment [22] - EMEA region for food showed strength with volumes up low single digits [32] - North American market pressures accelerated in the second quarter, affecting food service and industrial processing [19] Company Strategy and Development Direction - The company is focused on transforming its Protective segment and improving customer engagement [12][14] - New product innovations include the Jiffy embossed paper mailer and hybrid auto vac solutions [15] - The company is optimizing its manufacturing footprint and has opened a new facility in Lakeland, Florida [16] Management's Comments on Operating Environment and Future Outlook - Management noted a stable second quarter despite global trade uncertainties and tariff impacts [10][11] - The company remains cautious about the second half of the year due to market uncertainties and lower growth expectations [17] - Management expressed confidence in the ongoing transformation and capital allocation discipline, with net debt below $4 billion for the first time since 2022 [25][26] Other Important Information - The company is maintaining its sales guidance range of $5.1 billion to $5.5 billion and adjusted EBITDA guidance of $1.075 billion to $1.175 billion [36] - Free cash flow guidance remains at $400 million, with capital expenditures expected to be lower than originally anticipated [38] Q&A Session All Questions and Answers Question: What does the volume impact for the second half look like for food? - Management expects a volume mix in the second half to be down three points in Q3 and Q4, primarily due to consumer spending shifts [46] Question: How should we think about near-term outlook for margins specific to food? - Management indicated that while there is a margin impact from volume loss, network optimization efforts are expected to balance out margins [55] Question: Can you talk about specific cost takeouts expected for the second half? - Management highlighted a focus on cost takeout initiatives, aiming for approximately $90 million in savings for the full year [60] Question: Are you seeing any slowdown in bidding and order activity? - Management reported no significant change in order patterns and remains optimistic about the performance of the industrial portfolio [71] Question: Why is the adjusted EBITDA range for 2025 so wide? - Management attributed the wide range to conservatism and low visibility regarding end markets, preferring to wait for more clarity in Q3 [78] Question: Can you describe your issue with procuring specialty resins? - Management clarified that there are no procurement issues but noted challenges related to tariffs impacting certain specialty resins [80]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were $1.34 billion, down 1% on a constant currency basis [24] - Adjusted EBITDA for the quarter was $293 million, up 3% on a constant currency basis [24] - Adjusted earnings per share increased to $0.89, up 7% as reported and 10% on a constant currency basis [25] - Adjusted EBITDA margin was 22%, up 70 basis points [27] Business Line Data and Key Metrics Changes - Food segment net sales were $896 million, flat as favorable pricing offset softer volumes [28] - Protective segment net sales were $439 million, down 3% as reported and 4% in constant currency [31] - Food adjusted EBITDA was $210 million, up 3%, with a margin of 23.4%, up 50 basis points [30] - Protective adjusted EBITDA was $78 million, down 5%, with a margin of 17.8%, up 20 basis points from the first quarter [31] Market Data and Key Metrics Changes - The U.S. beef cycle saw a decline of 7%, impacting the overall protein markets [20] - EMEA and Asia regions for the food business showed strength with volumes up low single digits [30] - The North American market faced pressures, particularly in the food service sector, leading to a shift in consumer spending [18] Company Strategy and Development Direction - The company is focused on transforming its Protective segment and improving customer engagement [12] - A new Chief Financial Officer, Kristin Actis Grande, is expected to drive transformation and shareholder value [6][7] - The company is optimizing its manufacturing footprint and has opened a new facility in Lakeland, Florida [15] - The strategy includes simplifying the organization and moving closer to the markets served [23] Management's Comments on Operating Environment and Future Outlook - Management noted a stable second quarter despite global trade uncertainties and tariff impacts [9] - The company remains cautious about the second half of the year due to market uncertainties and lower growth expectations [15][23] - The outlook for the food business is impacted by shifting consumer spending patterns, particularly towards value grocery [18] Other Important Information - The company generated $81 million in free cash flow in the first half of 2025 [32] - The net leverage ratio was 3.6 times, with a goal to reduce it to approximately 3.0 times by 2026 [32] - The company is maintaining its sales guidance range of $5.1 billion to $5.5 billion for the year [34] Q&A Session Summary Question: Impact of beef headwinds on volume expectations - Management indicated that the cattle cycle is expected to impact volumes, with a forecast of down 3% to 4% for 2025 and flat in 2027 [41][43] Question: Near-term outlook for food margins - Management expressed confidence in maintaining margins despite headwinds, citing ongoing productivity improvements [51][52] Question: Specific cost savings and guidance maintenance - Management highlighted ongoing cost takeout initiatives and network optimization efforts to bolster earnings [57][58] Question: Order activity and market dynamics - Management reported no significant changes in order patterns and remains optimistic about internal initiatives driving growth [66][68] Question: Full year EBITDA range and conservatism - Management clarified that the wide EBITDA range reflects conservatism due to market volatility and uncertainty [74] Question: Specialty resins procurement challenges - Management noted that while procurement is not an issue, tariff impacts have affected certain specialty resins [76][78] Question: Cattle cycle in South America and Australia - Management indicated strong performance in both regions, with expectations for continued strength [94][95]

Q2 2025 Financial Performance - Net sales were $13 billion, down 1% as reported and constant currency [12] - Adjusted EBITDA reached $293 million, up 2% as reported and 3% on a constant currency basis [12] - Adjusted EPS increased to $089, up 7% as reported and 10% in constant currency [12] - Adjusted EBITDA margin increased by 70 bps to 219%, driven by productivity savings, but offset by unfavorable net price realization and lower volumes [16] Segment Performance - Food Protective segment: Organic sales were flat, with adjusted EBITDA up 3% to $210 million and margin up 50 bps to 234% [17] - Protective segment: Organic sales decreased by 4%, with adjusted EBITDA down 5% to $78 million and margin down 30 bps to 178% [17] H1 2025 Financials - Net sales decreased by 3% to $2607 billion as reported, with a 2% organic decline due to lower volumes [37, 35] - Adjusted EBITDA increased by 1% to $569 million as reported, and 3% on a constant currency basis [37, 36] - Free cash flow was $81 million, lower than the $207 million in H1 2024, due to higher incentive compensation and timing of tax payments [22, 44] Capital Allocation and Outlook - The company is targeting a net debt to adjusted EBITDA ratio of approximately 30x by 2026 [21, 28] - The company maintains its 2025 outlook with net sales between $51 billion and $55 billion, adjusted EBITDA between $1075 billion and $1175 billion, and adjusted EPS between $290 and $330 [24]

Group 1: Earnings Performance - Sealed Air reported quarterly earnings of $0.89 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and up from $0.83 per share a year ago, representing an earnings surprise of +23.61% [1] - The company has surpassed consensus EPS estimates for the last four quarters, with revenues of $1.34 billion for the quarter ended June 2025, which also exceeded the Zacks Consensus Estimate by 1.26% [2] Group 2: Stock Performance and Outlook - Sealed Air shares have declined approximately 14.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Group 3: Estimate Revisions and Industry Context - The trend of estimate revisions for Sealed Air was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is $0.75 on revenues of $1.33 billion, and for the current fiscal year, it is $3.07 on revenues of $5.29 billion [7] - The Containers - Paper and Packaging industry, to which Sealed Air belongs, is currently ranked in the bottom 28% of Zacks industries, suggesting potential challenges for stock performance [8]

Executive Summary & Highlights This section provides an overview of management's commentary, key financial highlights, and significant business updates for the quarter [Management Commentary](index=1&type=section&id=1.1.%20Management%20Commentary) Management highlights Protective segment volume progress, Q2 outperformance, accelerated productivity, and maintained full-year guidance - CEO Dustin Semach noted that the Protective turnaround will be non-linear, but Q2 2025 marked progress with the **best volume performance since Q4 2021** and **industrial portfolio volume growth**[4](index=4&type=chunk) - Market pressures are accelerating, primarily in North America, influenced by global trade policies and shifting consumer spending patterns[4](index=4&type=chunk) - Interim CFO Roni Johnson stated that Q2 results exceeded expectations across all metrics despite increasing market headwinds, and productivity initiatives are being accelerated to improve operating leverage[4](index=4&type=chunk) - The company is maintaining its full-year guidance range, anticipating more visibility on global trade policies and consumer buying patterns in Q3[4](index=4&type=chunk) [Q2 2025 Financial Highlights (Summary Table)](index=1&type=section&id=1.2.%20Q2%202025%20Financial%20Highlights%20(Summary%20Table)) Q2 2025 financial highlights show slight GAAP net sales and earnings declines, with Adjusted EBITDA and EPS growth | ($ millions, except per share data) | Second Quarter 2025 | Second Quarter 2024 | Reported △% | Constant currency △% | | :-------------------------------- | :------------------ | :------------------ | :---------- | :------------------- | | **GAAP Results** | | | | | | Net Sales | $1,335 | $1,345 | (0.8)% | (1.3)% | | Net Earnings | $94 | $98 | (3.7)% | | | Diluted EPS | $0.64 | $0.67 | (4.5)% | | | Cash Flow from Operations (YTD) | $168 | $313 | (46.2)% | | | **Non-GAAP Results** | | | | | | Adjusted EBITDA | $293 | $285 | 2.5% | 3.4% | | Adjusted Net Earnings | $132 | $121 | 9.3% | 11.2% | | Adjusted Diluted EPS | $0.89 | $0.83 | 7.2% | 9.6% | | Free Cash Flow (YTD) | $81 | $207 | (60.9)% | | [Key Business Updates](index=1&type=section&id=1.3.%20Key%20Business%20Updates) Key updates include new CFO, Protective volume stabilization, flat Food sales, and focus on margin, EPS, debt reduction - Kristen Actis-Grande is joining Sealed Air as Chief Financial Officer[5](index=5&type=chunk) - Protective volumes stabilized in the quarter, with the industrial portfolio inflecting to **volume growth** due to ongoing transformation efforts[5](index=5&type=chunk) - Food sales were **flat**, as favorable pricing was offset by softer volumes driven by market pressure in the North American business[5](index=5&type=chunk) - Margin expansion and **Adjusted EPS growth** were achieved through improved operating leverage and continued business optimization[5](index=5&type=chunk) - The company maintained its financial outlook for 2025, with an improved FX outlook being offset by volume weakness in North America[5](index=5&type=chunk) Detailed Financial Performance - Q2 2025 This section provides an in-depth analysis of the company's consolidated financial results, segment performance, and cash flow dynamics for the second quarter of 2025 [Consolidated Financial Results](index=2&type=section&id=2.1.%20Consolidated%20Financial%20Results) Consolidated financial results for Q2 2025 show a slight decrease in net sales, a decline in GAAP net earnings due to higher Special Items expense, but an increase in Adjusted EBITDA and Adjusted EPS driven by productivity benefits and lower interest expense - Net sales were **$1.34 billion**, decreasing less than **1%** as reported (**0.8%**) and **1%** on a constant currency basis. Volumes decreased by **2%** (**$23 million**), while price increased by less than **1%** (**$6 million**)[6](index=6&type=chunk) - Net earnings were **$94 million** (**$0.64 per diluted share**), down from **$98 million** (**$0.67 per diluted share**) in the prior year, primarily due to an unfavorable impact of **$38 million** in Special Items expense (vs. **$23 million** prior year)[8](index=8&type=chunk) - Adjusted EBITDA increased **2.5%** to **$293 million** (**21.9% of net sales**) from **$285 million** (**21.2%**) in the prior year, driven by lower operating costs from productivity benefits (CTO2Grow Program), partially offset by unfavorable net price realization, lower volume, and unfavorable currency translation[9](index=9&type=chunk) - Adjusted earnings per diluted share increased **7%** to **$0.89** from **$0.83** in the prior year, mainly due to higher Adjusted EBITDA and lower interest expense[10](index=10&type=chunk) [Segment Performance](index=2&type=section&id=2.2.%20Segment%20Performance) Segment performance reveals flat net sales for Food, with price gains offsetting volume declines, and a decrease in Protective net sales due to volume weakness, despite some industrial portfolio growth. Both segments saw Adjusted EBITDA impacted by productivity benefits and price/volume dynamics [Food Segment](index=2&type=section&id=2.2.1.%20Food%20Segment) The Food segment reported flat net sales, with favorable pricing offsetting volume softness in North America. Adjusted EBITDA increased due to productivity benefits, despite the volume decline - Second quarter net sales in Food were **$896 million**, **flat** as reported. Price had a favorable impact of **$14 million** (**2%**), while volumes decreased **$13 million** (**1%**), primarily due to softness in the North American market[11](index=11&type=chunk) - Adjusted EBITDA for Food was **$210 million** (**23.4% of net sales**), an increase of **3%** from **$205 million** (**22.9%**) in the prior year, driven by lower operating costs from productivity benefits (CTO2Grow Program) and slightly favorable net price realization, partially offset by lower volume[11](index=11&type=chunk) [Protective Segment](index=2&type=section&id=2.2.2.%20Protective%20Segment) The Protective segment experienced a 3% decrease in reported net sales, with volume declines from prior year customer churn partially offset by growth in the industrial portfolio and favorable currency. Adjusted EBITDA decreased due to unfavorable net price realization - Second quarter net sales in Protective were **$439 million**, a decrease of **3%** as reported. On a constant currency basis, net sales decreased **4%** (**$18 million**)[12](index=12&type=chunk) - Volumes decreased **$10 million** (**2%**), primarily due to the remaining impact of prior year customer churn in the fulfillment portfolio, partially offset by **growth in the industrial portfolio**. Price had an unfavorable impact of **$8 million** (**2%**)[12](index=12&type=chunk) - Adjusted EBITDA for Protective was **$78 million** (**17.8% of net sales**), a decrease of approximately **5%** from **$82 million** (**18.1%**) in the prior year, primarily due to unfavorable net price realization, partially offset by lower operating costs from productivity benefits (CTO2Grow Program)[12](index=12&type=chunk) [Cash Flow and Debt](index=2&type=section&id=2.3.%20Cash%20Flow%20and%20Debt) Cash flow from operating activities and Free Cash Flow significantly decreased year-to-date compared to the prior year, mainly due to higher incentive compensation and tax payments. Total debt decreased slightly, while Net Debt remained stable, and the company maintained substantial liquidity - Cash flow from operating activities for the first six months of 2025 was **$168 million**, a decrease from **$313 million** in the prior year period, primarily reflecting higher incentive compensation and tax payments[13](index=13&type=chunk) - Free Cash Flow for the first six months of 2025 was **$81 million**, down from **$207 million** in the prior year period, with capital expenditures at **$87 million** (vs. **$106 million** prior year)[14](index=14&type=chunk) - Total debt was **$4.3 billion** as of June 30, 2025, down from **$4.4 billion** as of December 31, 2024. Net Debt remained stable at **$4.0 billion** for both periods[15](index=15&type=chunk) - As of June 30, 2025, Sealed Air had approximately **$1.2 billion** of available liquidity, including **$354 million** in cash and **$830 million** in available and unused lines of credit[15](index=15&type=chunk) - The net leverage ratio was **3.6x** as of June 30, 2025, consistent with December 31, 2024[15](index=15&type=chunk) Financial Outlook & Corporate Information This section outlines the company's full-year 2025 financial guidance, provides an overview of its business, and clarifies its use of non-GAAP measures and forward-looking statements [2025 Full Year Outlook](index=3&type=section&id=3.1.%202025%20Full%20Year%20Outlook) Sealed Air provided its full-year 2025 financial guidance, including ranges for Net Sales, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow, noting that non-GAAP measures are used due to the variability of certain Special Items | (in $ millions except EPS) | Range | Constant currency △% | | :------------------------- | :---------------- | :------------------- | | Net Sales | $5,100 to $5,500 | (6)% to 2% | | Adjusted EBITDA | $1,075 to $1,175 | (3)% to 6% | | Adjusted EPS | $2.90 to $3.30

Core Insights - Sealed Air Corporation reported second quarter 2025 financial results, showing a slight decline in net sales and earnings, but an increase in adjusted earnings and EBITDA, indicating resilience amid market pressures [2][3][5]. Financial Performance - Net sales for Q2 2025 were $1.335 billion, a decrease of 0.8% from Q2 2024, with the Food segment flat and the Protective segment down 3% [3][5]. - Net earnings were $94 million, or $0.64 per diluted share, down from $98 million, or $0.67 per diluted share in the prior year [5][34]. - Adjusted EBITDA increased to $293 million, representing 21.9% of net sales, compared to $285 million, or 21.2% in the prior year [6][30]. Segment Performance - The Food segment reported net sales of $896 million, flat year-over-year, with a slight volume decrease of 1% but a favorable price impact of 2% [8][27]. - The Protective segment saw net sales of $439 million, a decrease of 3%, with a 2% unfavorable price impact and a 2% volume decrease [9][27]. Cash Flow and Debt Management - Cash flow from operations for the first half of 2025 was $168 million, down 46.2% from $313 million in the prior year, primarily due to higher incentive compensation and tax payments [11][12]. - Free cash flow for the first half of 2025 was $81 million, a significant decrease from $207 million in the same period last year [12][25]. - Total debt as of June 30, 2025, was $4.3 billion, with net debt remaining stable at $4.0 billion [13][13]. Outlook - The company maintains its full-year guidance for 2025, projecting net sales between $5.1 billion and $5.5 billion, with adjusted EBITDA between $1.075 billion and $1.175 billion [14][14]. - The outlook reflects a cautious approach due to ongoing market pressures and shifts in consumer spending patterns [2][10].

Group 1 - Sealed Air Corporation has appointed Kristen Actis-Grande as Chief Financial Officer, effective August 25, 2025, to enhance its ongoing transformation efforts [1] - Actis-Grande has a strong background in finance, previously serving as Executive Vice President and CFO of MSC Industrial Supply Co. and holding various finance leadership roles at Ingersoll Rand for 17 years [1] - The company generated $5.4 billion in sales in 2024 and employs approximately 16,400 people across 117 countries/territories [3] Group 2 - Kristen Actis-Grande succeeds Veronika "Roni" Johnson, who served as Interim CFO since February 14, 2025, and will continue as Chief Accounting Officer [2] - The CEO of Sealed Air expressed gratitude towards Johnson for her leadership during a critical period in the company's transformation [3] - Sealed Air is recognized for its packaging solutions that cater to various markets, including food, medical, e-commerce, and industrial sectors [3]

Core Insights - Sealed Air Corporation (SEE) is set to report its second-quarter 2025 results on August 5, with net sales estimated at $1.32 billion, reflecting a 1.9% decline year-over-year [1][6] - The consensus estimate for earnings is 72 cents per share, indicating a year-over-year decline of 13.3% and a 1.4% decrease in estimates over the past 60 days [2][6] Financial Performance - Sealed Air has a history of exceeding earnings estimates, with an average surprise of 20.6% over the last four quarters [4] - The company's earnings per share (EPS) for the last four quarters were reported as follows: 0.81, 0.75, 0.79, and 0.83, with respective surprises of 20.90%, 11.94%, 19.70%, and 29.69% [5][4] Segment Analysis - The Food segment is projected to generate net sales of $891 million, a 0.3% decline from the previous year, with a slight volume decrease of 0.2% [10][9] - The Protective segment is expected to see net sales of $424 million, down 6% year-over-year, continuing a trend of volume declines for 13 consecutive quarters [11][8] - Overall, Sealed Air's volumes are anticipated to dip by 1.7%, with a minimal pricing growth of 0.1% for the quarter [11] Strategic Initiatives - The company's "Reinvent SEE Strategy" is expected to enhance productivity and mitigate supply chain challenges, positively impacting operating margins in the upcoming quarter [12] Stock Performance - Over the past year, Sealed Air's stock has decreased by 20%, compared to a 7.9% decline in the industry [13]

Group 1 - Sealed Air will release its second quarter 2025 results on August 5, 2025, at 7 a.m. EDT, followed by a conference call at 10 a.m. EDT [1] - The conference call will be available via live webcast on Sealed Air's Investors homepage [1] Group 2 - Sealed Air Corporation is a leading global provider of packaging solutions, focusing on sustainable materials, automation, and services [2] - The company generated $5.4 billion in sales in 2024 and employs approximately 16,400 people across 117 countries/territories [2] - Sealed Air's product offerings include well-known brands such as CRYOVAC®, LIQUIBOX®, SEALED AIR®, AUTOBAG®, and BUBBLE WRAP® [2]