Sealed Air (SEE) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 2.6% year-over-year to $1.35 billion, with Food segment volume growth offset by continued weakness in Protective; overall volume increased 1%.

• Adjusted EBITDA rose 1.9% to $285.5 million, with margin up 90 basis points to 21.2%, driven by cost savings from the CTO2Grow program and higher Food volumes.

• Adjusted EPS increased 4% year-over-year to $0.83; net earnings from continuing operations rose 4.2% to $97.8 million.

• Free cash flow for the first half reached $207.5 million, over four times higher than the prior year period, reflecting higher earnings and improved working capital.

• Leadership transition completed with Patrick Kivits appointed CEO and Dustin Semach promoted to President and CFO, aiming to accelerate transformation and restore volume growth.

Financial highlights

• Q2 2024 net sales: $1.35 billion, down 2.6% year-over-year; organic sales down 2%.

• Adjusted EBITDA: $285.5 million, up 1.9% year-over-year; margin 21.2%, up 90 basis points.

• Adjusted EPS: $0.83, up 4% year-over-year; diluted EPS from continuing operations $0.67, up 3.1%.

• Free cash flow for the first half: $207.5 million, compared to $45 million in the prior year.

• Gross profit margin improved to 30.9% in Q2 2024 from 30.3% in Q2 2023.

Outlook and guidance

• Full-year 2024 net sales expected between $5.2–$5.6 billion; adjusted EBITDA $1.05–$1.15 billion.

• Adjusted EPS guidance for 2024 is $2.65–$3.05; free cash flow projected at $325–$425 million.

• Food segment expected to deliver low to mid-single-digit volume growth for 2024, offset by pricing declines.

• Protective segment market softness anticipated to persist through 2024 and into 2025.

• CTO2Grow Program aims for $140–$160 million in annualized savings by end of 2025, with $65–$75 million cash outlay expected in 2024.